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S-4
RENAISSANCE MEDIA GROUP LLC filed this Form S-4 on 06/12/1998
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<PAGE>
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 12, 1998
                                                        REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                                ---------------
                               FORMS S-1 AND S-4
                            REGISTRATION STATEMENT
                                     UNDER
                          THE SECURITIES ACT OF 1933
 
                                ---------------
                          RENAISSANCE MEDIA GROUP LLC
                       RENAISSANCE MEDIA (LOUISIANA) LLC
                       RENAISSANCE MEDIA (TENNESSEE) LLC
                     RENAISSANCE MEDIA CAPITAL CORPORATION
          (EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
 
   DELAWARE DELAWARE          4841 4841 4841 4841    14-1803051 14-1801165 14-
   DELAWARE DELAWARE                                     1801164 14-1803049
           (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
    (STATE OR OTHER                                       (I.R.S. EMPLOYER
    JURISDICTION OF                                   IDENTIFICATION NUMBERS)
    INCORPORATION OR
     ORGANIZATION)
 
   1 CABLEVISION CENTER, SUITE 100, FERNDALE, NEW YORK 12734 (914) 295-2600
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
 
                                ---------------
 
                                 FRED SCHULTE
                     PRESIDENT AND CHIEF EXECUTIVE OFFICER
                          RENAISSANCE MEDIA GROUP LLC
                        1 CABLEVISION CENTER, SUITE 100
                           FERNDALE, NEW YORK 12734
                                (914) 295-2600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                      OF REGISTRANTS' AGENT FOR SERVICE)
 
                                ---------------
 
                PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
 
                            STUART A. SHELDON, ESQ.
                         DOW, LOHNES & ALBERTSON, PLLC
                        1200 NEW HAMPSHIRE AVENUE, N.W.
                            WASHINGTON, D.C. 20036
                                (202) 776-2000
 
                                ---------------
 
  APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
                                ---------------
  If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
 
  If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
 
  If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
 
  If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
 
                        CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                               PROPOSED        PROPOSED
                                 AMOUNT        MAXIMUM          MAXIMUM
   TITLE OF EACH CLASS OF         TO BE     OFFERING PRICE     AGGREGATE         AMOUNT OF
SECURITIES  TO BE REGISTERED  REGISTERED(1)  PER UNIT(2)   OFFERING PRICE(2)  REGISTRATION FEE
- ----------------------------------------------------------------------------------------------
<S>                           <C>           <C>            <C>               <C>
 10% Senior Discount
  Notes due 2008.........     $163,175,000       100%        $163,175,000       $48,136.63
</TABLE>

- -------------------------------------------------------------------------------
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(1) An indeterminate amount is also being registered for resale by dealers in
    connection with market-making activities. See "Explanatory Note."
(2) Estimated solely for the purpose of calculating the registration fee in
    accordance with Rule 457 of the Securities Act of 1933, as amended.
 
                                ---------------
 
  THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

<PAGE>
 
                               EXPLANATORY NOTE
 
  This Registration Statement covers the registration of $163,175,000
aggregate Principal Amount at Maturity of 10% Senior Discount Notes due 2008
(the "New Notes"), which are being issued by Renaissance Media (Louisiana)
LLC, Renaissance Media (Tennessee) LLC and Renaissance Media Capital
Corporation (collectively, the "Obligors") and guaranteed by Renaissance Media
Group LLC (the "Guarantor") in exchange for 10% Senior Discount Notes due 2008
with terms substantially identical to the New Notes (the "Old Notes"). The Old
Notes were previously issued and sold by the Obligors and guaranteed by the
Guarantor in an offering exempt from the registration requirements of the
Securities Act of 1933, as amended. The complete Prospectus contained herein
relates to the issuance and exchange of the New Notes for the Old Notes.
Immediately following the complete Prospectus are certain alternate pages of
the Prospectus, which will be included in the prospectus relating to certain
marketing-making activities with respect to the Notes, which may, from time to
time, be carried out by Morgan Stanley & Co. Incorporated (the "Market-Making
Prospectus"). The two prospectuses will be identical in all respects, except
for the front cover page and the Plan of Distribution and except for the fact
that the Market-Making Prospectus will not contain the information in the
Prospectus Summary relating to the Exchange Offer, the information under the
captions "The Exchange Offer" and "Certain United States Federal Income Tax
Consequences" will be deleted and certain conforming changes will be made to
delete references to the Exchange Offer and federal tax considerations. The
prospectus for the Exchange Offer follows immediately after this Explanatory
Note. Following such prospectus are the form of the alternative cover page and
Plan of Distribution section for the Market-Making Prospectus and alternative
pages covering conforming changes.

<PAGE>
 
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT        +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR   +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE      +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE    +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF  +
+ANY SUCH STATE.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                             SUBJECT TO COMPLETION
                               DATED JUNE  , 1998
PROSPECTUS
                                                                            LOGO
                          RENAISSANCE MEDIA GROUP LLC
                       RENAISSANCE MEDIA (LOUISIANA) LLC
                       RENAISSANCE MEDIA (TENNESSEE) LLC
                     RENAISSANCE MEDIA CAPITAL CORPORATION
 
              OFFER TO EXCHANGE 10% SENIOR DISCOUNT NOTES DUE 2008
              WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
         FOR ANY AND ALL OUTSTANDING 10% SENIOR DISCOUNT NOTES DUE 2008
 
                  THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
              NEW YORK CITY TIME, ON      , 1998, UNLESS EXTENDED
 
  Renaissance Media (Louisiana) LLC ("Renaissance Louisiana"), Renaissance
Media (Tennessee) LLC ("Renaissance Tennessee") and Renaissance Media Capital
Corporation ("Renaissance Capital" and, together with Renaissance Louisiana and
Renaissance Tennessee, the "Obligors") hereby offer, upon the terms and subject
to the conditions set forth in this Prospectus and the accompanying Letter of
Transmittal (which together constitute the "Exchange Offer"), to exchange
$1,000 original Principal Amount at Maturity (as defined) of 10% Senior
Discount Notes due 2008 of the Obligors (the " New Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for each $1,000 original Principal Amount at
Maturity of the Obligors' issued and outstanding 10% Senior Discount Notes due
2008 (the "Old Notes," and collectively with the New Notes, the "Notes"). As of
the date of this Prospectus, $163,175,000 aggregate original Principal Amount
at Maturity of the Old Notes are outstanding. The New Notes will be fully and
unconditionally guaranteed (the "New Guaranty") on a senior basis by
Renaissance Media Group LLC (the "Guarantor"). Each of the Obligors is a wholly
owned subsidiary of the Guarantor. The Guarantor and its subsidiaries,
including the Obligors and Renaissance Media LLC, are hereinafter referred to
as the "Company."
 
  The form and terms of the New Notes are the same as the form and terms of the
Old Notes except that (i) the issuance of the New Notes will have been
registered under the Securities Act and, therefore, the New Notes will not bear
legends restricting the transfer thereof and (ii) holders of the New Notes will
not be entitled to certain rights of holders of Old Notes under the
Registration Rights Agreement (as defined herein). The New Notes will evidence
the same debt as the Old Notes (which they replace) and will be issued under
and be entitled to the benefits of the Indenture, dated as of April 9, 1998
(the "Indenture"), by and among the Obligors, the Guarantor and United States
Trust Company of New York, as Trustee, governing the Old Notes. See "The
Exchange Offer" and "Description of the Notes."
 
  The Obligors and the Guarantor will accept for exchange any and all Old Notes
that are validly tendered on or prior to 5:00 p.m., New York City time, on the
Expiration Date. The Exchange Offer is not conditioned upon any minimum
aggregate principal amount of Old Notes being tendered for exchange. However,
the Exchange Offer is subject to certain conditions which may be waived by the
Obligors and the Guarantor and to the terms and provisions of the Registration
Rights Agreement (as defined herein). Old Notes may be tendered only in
denominations of $1,000 and integral multiples thereof. The Exchange Offer will
expire at 5:00 p.m., New York City time, on      , 1998, unless the Obligors,
in their sole discretion, extend the Exchange Offer (as it may be so extended,
the "Expiration Date"), in which case the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is extended. Old Notes
tendered pursuant to the Exchange Offer may be withdrawn at any time prior to
5:00 p.m., New York City time on the business day prior to the Expiration Date;
otherwise such tenders are irrevocable.
 
  SEE "RISK FACTORS" BEGINNING ON PAGE 20 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.
                                  -----------
 THESE SECURITIES HAVE NOT BEEN APPROVED  OR DISAPPROVED BY THE SECURITIES AND
  EXCHANGE  COMMISSION  OR  ANY  STATE  SECURITIES  COMMISSION  NOR  HAS  THE
    SECURITIES AND EXCHANGE  COMMISSION OR ANY  STATE SECURITIES  COMMISSION
     PASSED  UPON  THE  ACCURACY  OR  ADEQUACY  OF  THIS  PROSPECTUS.  ANY
      REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
                                  -----------
  The Old Notes were sold at a substantial discount from their principal amount
at maturity and there will not be any payment of interest in respect of the
Notes prior to October 15, 2003. Each New Note will have a principal amount at
maturity of $1,000 and has an initial Accreted Value of $612.91. Interest on
the New Notes will be paid semi-annually in cash at a rate of 10% per annum on
each April 15 and October 15, beginning on October 15, 2003. The New Notes are
redeemable at the option of the Obligors, in whole or in part, at any time on
or after April 15, 2003, at the redemption prices set forth herein, plus
accrued interest, if any, to the date of redemption. In addition, at any time
prior to April 15, 2001, the Obligors may redeem up to 35% of the aggregate
principal amount at maturity of the New Notes with the proceeds of one or more
sales of Capital Stock (other than Disqualified Stock) at the redemption price
set forth herein; provided, however, that after any such redemption at least
$106.0 million aggregate principal amount at maturity of Notes remains
outstanding.
 
  The New Notes and the New Guaranty will be unsecured, unsubordinated
indebtedness of the Obligors and the Guarantor, respectively, ranking pari
passu with all unsecured unsubordinated indebtedness of the Obligors and the
Guarantor and senior in right of payment to all subordinated indebtedness of
the Obligors and the Guarantor. The New Notes and the New Guaranty will be
effectively subordinated to all liabilities of their respective subsidiaries,
including all indebtedness under the Senior Credit Facility (as defined herein)
and trade payables. At March 31, 1998, on a pro forma basis, after giving
effect to the Transactions (as defined herein), the Obligors would have had
$210.0 million of indebtedness outstanding and the Obligors' subsidiaries would
have had $114.0 million of liabilities (including $110.0 million of
indebtedness under the Senior Credit Facility).
 
                                        (Cover page continued on following page)
 
                  The date of this Prospectus is      , 1998.

<PAGE>
 
(Cover page continued)
 
  The Exchange Offer is being made to satisfy certain obligations of the
Obligors and the Guarantor under the Registration Rights Agreement, dated as
of April 6, 1998 (the "Registration Rights Agreement"), among the Obligors,
the Guarantor and Morgan Stanley & Co. Incorporated, as the placement agent
("Morgan Stanley" or the "Placement Agent"). Upon consummation of the Exchange
Offer, holders of Old Notes that were not prohibited from participating in the
Exchange Offer and did not tender their Old Notes will not have any
registration rights under the Registration Rights Agreement with respect to
such nontendered Old Notes and, accordingly, such Old Notes will continue to
be subject to the restrictions on transfer contained in the legend thereon.
 
  Based upon interpretations by the staff of the Securities and Exchange
Commission (the "Commission") set forth in certain no-action letters issued to
third parties (including Exxon Capital Holdings Corp., SEC No-Action Letter
(April 13, 1989); Morgan Stanley & Co. Inc., SEC No-Action Letter (June 5,
1991); and Shearman & Sterling, SEC No-Action Letter (July 2, 1993)), the
Obligors believe that the New Notes issued pursuant to the Exchange Offer in
exchange for Old Notes may be offered for resale, resold and otherwise
transferred by any holder thereof (other than any such holder which is an
"affiliate" of the Obligors within the meaning of Rule 405 under the
Securities Act of 1933, as amended (the "Securities Act")) without compliance
with the registration and prospectus delivery requirements of the Securities
Act, provided that such New Notes are acquired in the ordinary course of such
holder's business and that at the time of the consummation of the Exchange
Offer, such holder has no arrangement or understanding with any person to
participate in the distribution of such New Notes. See "The Exchange Offer--
Resale of the New Notes." Holders of Old Notes wishing to accept the Exchange
Offer must represent to the Obligors, as required by the Registration Rights
Agreement, that such conditions have been met and that such holder that is an
"affiliate" of the Obligors within the meaning of Rule 405 under the
Securities Act. Each broker-dealer that is the beneficial owner (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of New Notes for its own account pursuant to the
Exchange Offer (a "Participating Broker-Dealer") must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a Participating Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. This Prospectus,
as it may be amended or supplemented from time to time, may be used by any
person subject to the prospectus delivery requirements of the Securities Act
(other than a Participating Broker Dealer (an "Excluded Participating Broker
Dealer") who either (x) acquired Notes other than for its own account as a
result of market-making activities or other trading activities or (y) has
entered into any arrangement or understanding with any Obligor or any
affiliate of any Obligor to distribute the New Notes). The Obligors have
agreed that, for a period of up to 180 days, they will use their reasonable
best efforts to keep the Exchange Offer Registration Statement (as defined)
effective and to amend and supplement this Prospectus in order to permit this
Prospectus to be lawfully delivered by all persons subject to the prospectus
delivery requirements of the Securities Act (provided that, as set forth in
the Letter of Transmittal, such persons shall have acknowledged that they may
be subject to such requirements and have undertaken to use their reasonable
best efforts to notify the Obligors when they are no longer subject to such
requirements). See "Plan of Distribution."
 
  The Old Notes were originally issued and sold on April 9, 1998 in an
offering of $163,175,000 aggregate original Principal Amount at Maturity of
the Old Notes (the "Offering,"). The Offering was exempt from registration
under the Securities Act in reliance upon the exemptions provided by Rule
144A, Section 4(2) and Regulation S of the Securities Act. Accordingly, the
Old Notes may not be reoffered, resold or otherwise pledged, hypothecated or
transferred in the United States unless so registered or unless an exemption
from the registration requirements of the Securities Act and applicable state
securities laws is available. Upon completion of the Exchange Offer, Old Notes
which have not been exchanged for New Notes will remain outstanding. See "Risk
Factors Consequences of Failure to Exchange."
 
  The Company will not receive any proceeds from the Exchange Offer.
 
  The Obligors have not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer, and
to the best of the Obligors' information and belief, each person participating
in the Exchange Offer is acquiring the New Notes in its ordinary course of
business and has no arrangement or understanding with any person to
participate in the distribution of the New Notes to be received in the
Exchange Offer. Any holder who is an "affiliate" of the Obligors (within the
meaning of Rule 405 under
 
                                       2

<PAGE>
 
the Securities Act), who does not acquire the New Notes in the ordinary course
of business or who tenders in the Exchange Offer for the purpose of
participating in a distribution of the New Notes could not rely on the
position of the staff of the Commission enunciated in the no-action letters
and, in the absence of an exemption therefrom, must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Failure to comply with such
requirements in such instance may result in such holder incurring liability
under the Securities Act for which the holder is not indemnified by the
Obligors.
 
  There has not previously been any public market for the Old Notes or the New
Notes. The Obligors do not intend to list the New Notes on any securities
exchange or to seek approval for quotation through any automated quotation
system. There can be no assurance that an active market for the New Notes will
develop. See "Risk Factors." Moreover, to the extent that Old Notes are
tendered and accepted in the Exchange Offer, the trading market for untendered
and tendered but unaccepted Old Notes could be adversely affected. The Company
has been advised by the Morgan Stanley & Co. Incorporated, the placement agent
(the "Placement Agent"), for the Old Notes, that it presently intends to make
a market in the New Notes. However, the Placement Agent is not obligated to do
so, and any market-making activity with respect to the New Notes may be
discontinued at any time without notice. There can be no assurance that an
active trading market will exist for the New Notes or that such trading market
will be liquid. See "Risk Factors--Lack of Public Market for the Notes."
 
  THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE OBLIGORS ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
 
  NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
OR THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE OBLIGORS. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE
ACCOMPANYING LETTER OF TRANSMITTAL NOR ANY EXCHANGE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
 
  UNTIL      , 1998 (90 DAYS AFTER COMMENCEMENT OF THE EXCHANGE OFFER), ALL
DEALERS EFFECTING TRANSACTIONS IN THE NEW NOTES, WHETHER OR NOT PARTICIPATING
IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
  The New Notes will be available initially only in book-entry form and the
Obligors expect that the New Notes issued pursuant to the Exchange Offer will
be represented by one or more Global Notes (as defined), which will be
deposited with, or on behalf of, The Depository Trust Company ("DTC") and
registered in its name or in the name of Cede & Co., its nominee, except with
respect to institutional "accredited investors" (within the meaning of Rule
501 (a)(1), (2), (3) or (7) under the Securities Act) who will receive New
Notes in certificated form. Beneficial interests in the Global Notes will be
shown on, and transfers thereof will be effected through, records maintained
by DTC and its participants. After the initial issuance of the Global Notes,
New Notes in certificated form will be issued in exchange for the Global Notes
only under limited circumstances as set forth in the Indenture. See "Book-
Entry; Delivery and Form."
 
                                       3

<PAGE>
 
  This prospectus constitutes a part of a registration statement (the
"Registration Statement") filed by the Obligors and the Guarantor with the
Commission under the Securities Act. As permitted by the rules of regulations
of the Commission, this prospectus does not contain all of the information
contained in the Registration Statement and the exhibits and schedules thereto.
For further information about the Obligors and the Exchange Offer, reference is
hereby made to the Registration Statement and to such exhibits and schedules.
Statements contained herein concerning the provisions of any documents filed as
an exhibit to the Registration Statement or otherwise filed with the Commission
are not necessarily complete, and in each instance reference is made to the
copy of such document so filed. Each such statement is qualified in its
entirety by such reference.
 
                               ----------------
 
  The Indenture pursuant to which the New Notes will be issued (the
"Indenture") requires the Company, and the Company intends, to distribute to
the holders of the Notes annual reports containing audited consolidated
financial statements of the Company audited by its independent public
accountants and quarterly reports containing unaudited condensed consolidated
financial data for the first three quarters of each fiscal year.
 
                               ----------------
 
                               TABLE OF CONTENTS
 

<TABLE>
<S>                                   <C>
Prospectus Summary...................
The Company..........................
Risk Factors.........................
Use of Proceeds......................
Capitalization.......................
Selected Financial and Other Data....
Proforma Financial Data..............
Management's Discussion and Analysis
 of Financial Condition and Results
 of Operations.......................
Recent Developments..................
Business.............................
Legislation and Regulation...........
</TABLE>


<TABLE>
<S>                                                                     <C>
Management.............................................................
Certain Relationships and Related Transactions.........................
Principal Securityholders..............................................
The Exchange Offer.....................................................
Description of the Notes...............................................
Certain United States Federal Income Tax Consequences..................
Plan of Distribution...................................................
Legal Matters..........................................................
Independent Auditors...................................................
Available Information..................................................
Index to Financial Statements..........................................
</TABLE>

 
  THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). ALL STATEMENTS REGARDING THE
EXPECTED FINANCIAL POSITION, BUSINESS AND FINANCING PLANS OF THE OBLIGORS AND
THE GUARANTOR ARE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE OBLIGORS AND THE
GUARANTOR BELIEVE THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING
STATEMENTS ARE REASONABLE, THEY CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS
WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM SUCH EXPECTATIONS ("CAUTIONARY STATEMENTS")
ARE DISCLOSED IN THIS PROSPECTUS, INCLUDING, WITHOUT LIMITATION, IN CONJUNCTION
WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS AND UNDER "RISK
FACTORS." ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS
ATTRIBUTABLE TO THE OBLIGORS, THE GUARANTOR, THEIR RESPECTIVE SUBSIDIARIES OR
PERSONS ACTING ON BEHALF OF ANY OF THEM ARE EXPRESSLY QUALIFIED IN THEIR
ENTIRETY BY THE CAUTIONARY STATEMENTS.
 
                                       4

<PAGE>
 
 
                                    SUMMARY
 
  The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial statements and
notes thereto included elsewhere in this Prospectus. Unless the context
otherwise requires: (i) all references to the "Company" refer collectively to
Renaissance Media Group LLC and its subsidiaries, including the Obligors and
Renaissance Media LLC ("Renaissance Media"); (ii) all references to "Time
Warner" refer collectively to TWI Cable, Inc. and its cable-related affiliates;
and (iii) all information relating to the Company contained in this Prospectus,
other than historical financial information, gives effect to the Acquisition
described below. See "--The Acquisition and the Financing." References to
EBITDA refer to income (loss) before interest, income taxes and depreciation,
amortization and loss (gain) on disposal of fixed assets.
 
                                  THE COMPANY
 
  The Company was formed to acquire, operate and develop medium-sized cable
television systems. The Company acquired (the "Acquisition") six cable
television systems (the "Systems") from Time Warner on April 9, 1998, the date
of the initial sale of the Old Notes by the Obligors to the Placement Agent.
The Systems are clustered in southern Louisiana and western Mississippi (the
"Louisiana Systems") and western Tennessee (the "Tennessee System") and, as of
March 31, 1998, passed 179,402 homes and served 127,191 subscribers. The
Company is the 4th largest cable television system operator in Louisiana and
the 5th largest cable television system operator in Tennessee based upon the
Systems' numbers of subscribers at March 31, 1998.
 
  The Guarantor and the Obligors were formed in 1998 by Renaissance Media
Holdings LLC ("Holdings"). Holdings is owned by Morgan Stanley Capital Partners
III, L.P. ("MSCPIII"), Morgan Stanley Capital Investors, L.P. ("MSCI"), MSCP
III 892 Investors, L.P. ("MSCP Investors" and, collectively with its
affiliates, MSCPIII, MSCI and their respective affiliates, the "Morgan Stanley
Entities"), Time Warner and six former senior managers (the "Management
Investors") of Cablevision Industries Corporation ("CVI") who have an average
of 17 years experience in the cable television industry. At CVI, the Management
Investors were largely responsible for the management of 55 cable television
systems serving 600 communities in 18 states, including operating the Louisiana
Systems for seven years and the Tennessee System for nine years. In addition,
the Company's regional management has significant experience in the critical
functions of operations, management, sales, marketing, back office, finance and
regulatory affairs.
 
  The Company intends to increase its subscriber base and operating cash flow
by pursuing cable television system acquisitions, improving and upgrading its
technical plant and expanding its service offerings. The Company will pursue
selective acquisitions in markets which are contiguous to the Systems and in
non-contiguous mid-sized markets serving more than 30,000 subscribers where
local or regional clusters can be formed. The Company believes that by
clustering systems it will be able to realize economies of scale, such as
reduced payroll, reduced billing and technical costs per subscriber, reduced
advertising sales costs, increased local advertising sales, more efficient
roll-out and utilization of new technologies and consolidation of its customer
service functions. The Company plans to improve and upgrade its technical
plant, which should allow it to provide a wide array of new services and
service tiers, as well as integrate new interactive features into advanced
analog and digital set-top consumer equipment. The Company also plans to
develop and provide new cable and broadband services and develop ancillary
businesses including digital video and high speed Internet access services.
 
THE SYSTEMS
 
  The Louisiana Systems. The Louisiana Systems consist of five cable television
systems serving 94,760 basic subscribers as of March 31, 1998, located in
southern Louisiana and western Mississippi: the St. Tammany system, the St.
Landry system, the Lafourche system, the Picayune system and the Pointe Coupee
 
                                       5

<PAGE>
 
system. As of March 31, 1998, approximately one-half of the Louisiana Systems'
subscribers were served by the St. Tammany system. St. Tammany is a suburb
located 40 miles northeast of New Orleans. As of March 31, 1998, the St.
Tammany system comprised one consolidated headend, passed 62,611 homes with
1,341 miles of plant and served 42,956 basic subscribers, representing a 68.6%
basic penetration. As of March 31, 1998, the Louisiana Systems passed 130,756
homes with 2,816 miles of plant and nine headends. The Louisiana Systems and
the Tennessee System are managed from a Regional Office located in Thibodaux,
Louisiana (the "Regional Office") which provides certain support services for
the Systems. The Systems' regional management has 15 years average experience
in the cable television industry.
 
  The Tennessee System. As of March 31, 1998, the Tennessee System served
32,431 basic subscribers, located in Jackson, Tennessee and surrounding
counties, representing a 66.7% basic penetration. As of March 31, 1998, the
Tennessee System passed 48,646 homes with 914 miles of plant and five headends.
As of March 31, 1998, 22,948 basic subscribers (excluding bulk subscribers), or
three-quarters of the Tennessee System's subscribers, were served from a single
headend.
 
  The following table illustrates certain subscriber and operating statistics
for the Systems as of March 31, 1998:
 

<TABLE>
<CAPTION>
                                                                                                  AVERAGE
                                                                         PREMIUM                  MONTHLY
                                   TOTAL                                 SERVICE                  REVENUE
                          HOMES    PLANT      BASIC           BASIC       UNITS      PREMIUM     PER BASIC
  SYSTEM                PASSED (1) MILES SUBSCRIBERS (2) PENETRATION (3)   (4)   PENETRATION (5) SUBSCRIBER
  ------                ---------- ----- --------------- --------------- ------- --------------- ----------
<S>                     <C>        <C>   <C>             <C>             <C>     <C>             <C>        <C> <C> <C>
Louisiana Systems......  130,756   2,816      94,760          72.5%      49,247       52.0%        $37.84
Tennessee System.......   48,646     914      32,431          66.7       11,806       36.4          33.44
                         -------   -----     -------                     ------                    ------
Total Systems..........  179,402   3,730     127,191          70.9       61,053       48.0          36.71
                         =======   =====     =======                     ======                    ======
</TABLE>

- --------
(1) Homes passed refers to estimates of the number of dwelling units and
    commercial establishments in a particular community that can be connected
    to the distribution system without any further extension of principal
    transmission lines. Such estimates are based upon a variety of sources,
    including billing records, house counts, city directories and other local
    sources.
(2) The number of basic subscribers has been computed by adding the actual
    number of subscribers for all non-bulk accounts and the equivalent
    subscribers for all bulk accounts. The number of such equivalent
    subscribers has been calculated by dividing aggregate basic service revenue
    for bulk accounts by the full basic service rate for the community in which
    the accounts are located. Bulk accounts consist of commercial
    establishments and multiple dwelling units.
(3) Basic penetration represents the number of basic subscribers as a
    percentage of the total number of homes passed in the system.
(4) Premium service units represent the number of subscriptions to premium
    channels offered for a monthly fee per channel.
(5) Premium penetration represents the number of premium service units as a
    percentage of the total number of basic subscribers.
 
                                       6

<PAGE>
 
 
BUSINESS STRATEGY
 
  The Company's strategy is to increase its revenues and EBITDA by acquiring,
operating and developing cable television systems and capitalizing on the
expertise of management, as well as the Company's relationship with the
Management Investors and Time Warner. The key components of the Company's
strategy include the following:
 
  Pursue Strategic Acquisitions. Management believes that attractive
acquisition opportunities will be available as large cable television system
operators divest non-strategic assets and small operators sell their systems.
The Company intends to pursue system acquisitions in markets which are
contiguous to the Systems and in non-contiguous markets serving more than
30,000 subscribers where local or regional clusters can be formed. The Company
believes that by clustering systems it will be able to realize economies of
scale, such as reduced payroll, reduced billing and technical costs per
subscriber, reduced advertising sales costs, increased local advertising sales,
more efficient roll-out and utilization of new technologies and consolidation
of customer service functions. The Management Investors' experience in
operating cable television systems in urban, suburban and rural markets will
enable the Company to pursue a wide range of potential acquisition
opportunities.
 
  Operate Technologically Advanced Systems. The Company will seek to operate
cable television systems with bandwidths of 550 MHz to 750 MHz (78 to 110
analog channels) that include the use of hybrid fiber-coaxial cable plant, bi-
directional transmission capability, small-cluster nodes, advanced subscriber
set-top devices and digital compression technology. The Company will continue
to upgrade the Systems and will selectively upgrade systems acquired in the
future depending on market conditions. Many of the upgraded systems will likely
incorporate digital compression technology which would increase the number of
programming channels that may be transmitted over a given amount of bandwidth,
in many cases resulting in up to 10 digital channels transmitted in the space
required for a single analog channel. The Company expects that such technology
also will permit it to offer new services such as high speed Internet access
and data transmission and additional programming tiers, as well as new
interactive features being integrated into advanced analog and digital set-top
consumer equipment.
 
  Capitalize on Relationships with Management Investors and Time Warner. The
Company will benefit from the depth and breadth of the experience of the
Management Investors in acquiring, operating and developing cable television
systems, including the Systems, as well as the expertise of its regional
marketing, sales and technical personnel. The Company believes that it will
benefit from its relationship with Time Warner through access to certain of
Time Warner's programming arrangements and technical and engineering expertise
and through coordination of its equipment purchasing with Time Warner.
 
  Focus on Operations and Service. Management believes that its focus on system
operations and customer service will increase subscriber penetration, revenues
and cash flow margins. The Company will implement its comprehensive training
and certification program which provides specific technical training to further
improve operations performance and customer service. In addition, the Company
will actively monitor the performance of its systems and the quality of its
customer service, using criteria such as picture quality, service call response
times, average outage durations, telephone answer rates and installation
response times. The Company will also use market research tools to gauge its
performance and customer satisfaction and to tailor its local service offerings
to the particular community.
 
  Develop Ancillary Businesses. The Company intends to pursue new business
opportunities that complement its core video delivery systems. The Company
intends to expand its advertising sales operations in each of its cable
television systems and create local production businesses in markets that can
support that activity. Management will also concentrate on the marketing of
special events and pay-per-view movies. In the future, the Company plans to
offer digital services such as near video on demand as an alternative to video
rentals. In addition, the Company plans to offer high speed Internet access and
data transmission via certain of its cable networks.
 
                                       7

<PAGE>
 
 
                       THE ACQUISITION AND THE FINANCING
 
  At the time of the initial sale of the Old Notes by the Obligors and the
Guarantor to the Placement Agent: (i) Holdings received equity contributions of
$95.1 million from the Morgan Stanley Entities and $3.9 million from the
Management Investors, which were contributed to the Company as equity
(collectively, the "Equity Contributions"); (ii) Renaissance Media, as
borrower, and Renaissance Louisiana, Renaissance Tennessee and Renaissance
Capital, as guarantors, entered into a credit agreement (the "Senior Credit
Facility"), consisting of $110.0 million of term loan facilities (the "Term
Loans") and a $40.0 million revolving credit facility (the "Revolver") with
Morgan Stanley Senior Funding, Inc. ("MSSF"), as syndication agent, and
arranger, and the other lenders party thereto; and (iii) Renaissance Media
acquired the Systems from Time Warner for $300.0 million in cash and the
issuance to Time Warner of a $9.5 million equity interest in Holdings pursuant
to an asset purchase agreement dated as of November 14, 1997, between Holdings
and Time Warner, as amended (the "Asset Purchase Agreement"). The Acquisition
(including the issuance to Time Warner of a $9.5 million equity ownership
interest in Holdings), the Equity Contributions, the establishment of the
Senior Credit Facility, borrowings under the Term Loans and the Offering are
hereinafter referred to as the "Transactions."
 
  The Company used the net proceeds from the Offering, together with the Equity
Contributions and borrowings under the Term Loans to consummate the
Acquisition. The Company believes that borrowings expected to be available
under the Revolver and anticipated cash flow from operations will be sufficient
to upgrade the Systems as currently contemplated and satisfy the Company's
anticipated working capital and debt service requirements. However, the actual
amount and timing of the Company's capital requirements may differ materially
from the Company's estimates as a result of, among other things, the demand for
the Company's services and regulatory, technological and competitive
developments (including additional market developments and new opportunities)
in the Company's industry. The Company also expects that it will require
additional financing if the Company's development plans or projections change
or prove to be inaccurate or the Company engages in any acquisitions. Sources
of additional financing may include commercial bank borrowings, vendor
financing or the private or public sale of equity or debt securities. There can
be no assurances that such financing will be available on terms acceptable to
the Company or at all.
 
 
                                       8

<PAGE>
 
 
                               THE EXCHANGE OFFER
 
Old Notes...................  The Old Notes were sold by the Obligors on April
                              9, 1998 to the Placement Agent pursuant to a
                              Placement Agreement dated April 6, 1998 (the
                              "Placement Agreement"). The Placement Agent
                              subsequently placed the Old Notes with (i)
                              qualified institutional buyers pursuant to Rule
                              144A under the Securities Act, (ii) [a limited
                              number of institutional accredited investors that
                              agreed to comply with certain transfer
                              restrictions and other conditions and (iii)]
                              qualified buyers outside the United States in
                              reliance upon Regulation S under the Securities
                              Act.
 
Registration Rights           Pursuant to the Placement Agreement, the
 Agreement..................  Obligors, the Guarantor and the Placement Agent
                              entered into a Registration Rights Agreement,
                              dated as of April 6, 1998 (the "Registration
                              Rights Agreement"), which grants the holders of
                              the Old Notes certain exchange and registration
                              rights. The Exchange Offer is intended to satisfy
                              such exchange rights which terminate upon the
                              consummation of the Exchange Offer.
 
Securities Offered..........  $163,175,000 aggregate original Principal Amount
                              at Maturity of 10% Senior Discount Notes due 2008
                              (the "New Notes").
 
The Exchange Offer..........  $1,000 original Principal Amount at Maturity of
                              New Notes will be issued in exchange for each
                              $1,000 original Principal Amount at Maturity of
                              Old Notes. As of the date hereof, $163,175,000
                              aggregate original Principal Amount at Maturity
                              of Old Notes are outstanding. The Obligors will
                              issue the New Notes to holders on or promptly
                              after the Expiration Date.
 
                              Based on an interpretation by the staff of the
                              Commission set forth in no-action letters issued
                              to third parties (including Exxon Capital
                              Holdings Corp., SEC No-Action Letter (April 13,
                              1989); Morgan Stanley & Co. Inc., SEC No-Action
                              Letter (June 5, 1991); and Shearman & Sterling,
                              SEC No-Action Letter (July 2, 1993)), the
                              Obligors believe that New Notes issued pursuant
                              to the Exchange Offer in exchange for Old Notes
                              may be offered for resale, resold and otherwise
                              transferred by any holder of such New Notes
                              (other than any such holder which is an
                              "affiliate" of the Obligors within the meaning of
                              Rule 405 under the Securities Act) without
                              compliance with the registration and prospectus
                              delivery requirements of the Securities Act,
                              provided that such New Notes are acquired in the
                              ordinary course of such holder's business and
                              that such holder at the time of the Exchange
                              Offer has no arrangement or understanding with
                              any person to participate in the distribution of
                              such New Notes.
 
                              Any Participating Broker-Dealer that acquired Old
                              Notes for its own account as a result of market-
                              making activities or other trading
 
                                       9

<PAGE>
 
                              activities may be a statutory underwriter. Each
                              Participating Broker-Dealer that receives New
                              Notes for its own account pursuant to the
                              Exchange Offer must acknowledge that it will
                              deliver a prospectus in connection with any
                              resale of such New Notes. The Letter of
                              Transmittal states that by so acknowledging and
                              by delivering a prospectus, a Participating
                              Broker-Dealer will not be deemed to admit that it
                              is an "underwriter" within the meaning of the
                              Securities Act. This Prospectus, as it may be
                              amended or supplemented from time to time, may be
                              used by any person subject to the prospectus
                              delivery requirements of the Securities Act
                              (other than an Excluded Participating Broker-
                              Dealer). The Obligors have agreed that, for a
                              period of up to 180 days, they will use their
                              reasonable best efforts to keep the Exchange
                              Offer Registration Statement effective and to
                              amend and supplement this Prospectus in order to
                              permit this Prospectus to be lawfully delivered
                              by all persons subject to the prospectus delivery
                              requirements of the Securities Act (provided
                              that, as set forth in the Letter of Transmittal,
                              such persons shall have acknowledged that they
                              may be subject to such requirements and have
                              undertaken to use their reasonable best efforts
                              to notify Holdings when they are no longer
                              subject to such requirements). See "Plan of
                              Distribution."
 
                              Any holder who is an "affiliate" of the Obligors
                              (within the meaning of Rule 405 under the
                              Securities Act), who does not acquire the New
                              Notes in the ordinary course of business or who
                              tenders in the Exchange Offer for the purpose of
                              participating in a distribution of the New Notes
                              could not rely on the position of the staff of
                              the Commission enunciated in the above-mentioned
                              no-action letters and, in the absence of an
                              exemption therefrom, must comply with the
                              registration and prospectus delivery requirements
                              of the Securities Act in connection with any
                              resale transaction. Failure to comply with such
                              requirements in such instance may result in such
                              holder incurring liability under the Securities
                              Act for which the holder is not indemnified by
                              the Obligors.
 
Expiration Date.............  5:00 p.m., New York City time, on      , 1998
                              unless the Exchange Offer is extended, in which
                              case the term "Expiration Date" means the latest
                              date and time to which the Exchange Offer is
                              extended.
 
Accreted Value on the New
 Notes and the Old Notes....  Each New Note will have an Accreted Value equal
                              to that of the Old Note for which it is
                              exchanged.
 
Conditions to the Exchange    The Exchange Offer is subject to certain
 Offer......................  customary conditions, which may be waived by the
                              Obligors. See "The Exchange Offer--Conditions."
 
Procedures for Tendering      Each holder of Old Notes wishing to accept the
 Old Notes..................  Exchange Offer must complete, sign and date the
                              accompanying Letter of Transmittal, or a
                              facsimile thereof or transmit an Agents' Message
 
                                       10

<PAGE>
 
                              (as defined) in connection with a book-entry
                              transfer, in accordance with the instructions
                              contained herein and therein, and mail or
                              otherwise deliver such Letter of Transmittal, or
                              such facsimile of such Agent's Message, together
                              with the Old Notes and any other required
                              documentation to the Exchange Agent (as defined)
                              at the address set forth herein. By executing the
                              Letter of Transmittal or Agent's Message, each
                              holder will represent to the Obligors that, among
                              other things, the New Notes acquired pursuant to
                              the Exchange Offer are being obtained in the
                              ordinary course of business of the person
                              receiving such New Notes, whether or not such
                              person is the holder, that neither the holder nor
                              any such other person has any arrangement or
                              understanding with any person to participate in
                              the distribution of such New Notes and that
                              neither the holder nor any such other person is
                              an "affiliate," as defined under Rule 405 of the
                              Securities Act, of the Obligors. See "The
                              Exchange Offer--Purpose and Effect of the
                              Exchange Offer" and "--Procedures for Tendering."
 
Untendered Old Notes........
                              Following the consummation of the Exchange Offer,
                              holders of Old Notes eligible to participate, but
                              who do not tender their Old Notes, will not have
                              any further exchange rights and such Old Notes
                              will continue to be subject to certain
                              restrictions on transfer. Accordingly, the
                              liquidity of the market for such Old Notes could
                              be adversely affected.
 
Consequences of Failure to    The Old Notes that are not exchanged pursuant to
 Exchange...................  the Exchange Offer will remain restricted
                              securities. Accordingly, such Old Notes may be
                              resold only (i) to the Obligors, (ii) pursuant to
                              Rule 144A or Rule 144 under the Securities Act or
                              pursuant to some other exemption under the
                              Securities Act, (iii) outside the United States
                              to a foreign person pursuant to the requirements
                              of Rule 904 under the Securities Act, or (iv)
                              pursuant to an effective registration statement
                              under the Securities Act. See "The Exchange
                              Offer-- Consequences of Failure to Exchange."
 
Shelf Registration
 Statement..................  In the event that changes in the law or the
                              applicable interpretations of the staff of the
                              Commission do not permit the Obligors to effect
                              such an Exchange Offer, or if for any other
                              reason the Exchange Offer is not commenced and
                              not consummated by October 9, 1998, the Obligors
                              will (i) file a shelf registration statement (the
                              "Shelf Registration Statement") covering resales
                              of the Old Notes; (ii) use their best efforts to
                              cause the Shelf Registration Statement to be
                              declared effective under the Securities Act and
                              (iii) use their best efforts to keep effective
                              the Shelf Registration Statement until the
                              earlier of (a) two years after the date of the
                              original issuance of the Old Notes or (b) such
                              time as all of the applicable Old Notes have been
                              sold thereunder.
 
                                       11

<PAGE>
 
 
Special Procedures for
 Beneficial Owners..........  Any beneficial owner whose Old Notes are
                              registered in the name of a broker, dealer,
                              commercial bank, trust company or other nominee
                              and who wishes to tender should contact such
                              registered holder promptly and instruct such
                              registered holder to tender on such beneficial
                              owner's behalf. If such beneficial owner wishes
                              to tender on such owner's own behalf, such owner
                              must, prior to completing and executing the
                              Letter of Transmittal and delivering its Old
                              Notes, either make appropriate arrangements to
                              register ownership of the Old Notes in such
                              owner's name or obtain a properly completed bond
                              power from the registered holder. The transfer of
                              registered ownership may take considerable time.
                              The Obligors will keep the Exchange Offer open
                              for not less than twenty business days in order
                              to provide for the transfer of registered
                              ownership.
 
Guaranteed Delivery
 Procedures.................  Holders of Old Notes who wish to tender their Old
                              Notes and whose Old Notes are not immediately
                              available or who cannot deliver their Old Notes,
                              the Letter of Transmittal or any other documents
                              required by the Letter of Transmittal to the
                              Exchange Agent (or comply with the procedures for
                              book-entry transfer) prior to the Expiration Date
                              must tender their Old Notes according to the
                              guaranteed delivery procedures set forth in "The
                              Exchange Offer--Guaranteed Delivery Procedures."
 
Withdrawal Rights...........  Tenders may be withdrawn at any time prior to
                              5:00 p.m., New York City time, on the business
                              day prior to the Expiration Date.
 
Acceptance of Old Notes and
 Delivery of New Notes......  The Obligors will accept for exchange any and all
                              Old Notes which are properly tendered in the
                              Exchange Offer prior to 5:00 p.m., New York City
                              time, on the Expiration Date. The New Notes
                              issued pursuant to the Exchange Offer will be
                              delivered promptly following the Expiration Date.
                              See "The Exchange Offer--Terms of the Exchange
                              Offer."
 
Federal Income Tax
 Consequences...............  The exchange pursuant to the Exchange Offer will
                              not be a taxable event for federal income tax
                              purposes. See "Certain Federal Income Tax
                              Consequences."
 
Use of Proceeds.............  There will be no cash proceeds to the Obligors
                              from the Exchange Offer.
 
Exchange Agent..............
                              United States Trust Company of New York.
 
                                       12

<PAGE>
 
 
                                 THE NEW NOTES
 
New Notes...................  $163,175,000 aggregate principal amount at
                              maturity ($100,011,589.25 initial Accreted Value)
                              of 10% Senior Discount Notes due 2008.
 
General.....................  The form and terms of the New Notes are the same
                              as the form and terms of the Old Notes (which
                              they replace) except that (i) the New Notes have
                              been registered under the Securities Act and,
                              therefore, will not bear legends restricting the
                              transfer thereof, and (ii) the holders of New
                              Notes will not be entitled to certain rights
                              under the Registration Rights Agreement,
                              including the provisions providing for an
                              increase in the interest rate on the Old Notes in
                              certain circumstances relating to the timing of
                              the Exchange Offer, which rights will terminate
                              when the Exchange Offer is consummated. See "The
                              Exchange Offer--Purpose and Effect of the
                              Exchange Offer." The New Notes will evidence the
                              same debt as the Old Notes and will be entitled
                              to the benefits of the Indenture. See
                              "Description of the Notes."
 
Maturity Date...............  April 15, 2008.
 
Yield and Interest..........  The Old Notes were originally sold at a
                              substantial discount from their principal amount
                              at maturity and there will not be any payment of
                              interest on the New Notes prior to October 15,
                              2003. For a discussion of the U.S. federal income
                              tax treatment of the New Notes under the original
                              issue discount rules, see "Certain United States
                              Federal Income Tax Consequences." The New Notes
                              will fully accrete to face value on April 15,
                              2003. From and after April 15, 2003, the New
                              Notes will bear interest, payable semi-annually
                              in cash, at a rate of 10% per annum on April 15
                              and October 15 of each year, commencing October
                              15, 2003.
 
Optional Redemption.........  The New Notes are redeemable, at the option of
                              the Obligors, in whole or in part, at any time on
                              or after April 15, 2003, initially at 105.000% of
                              their principal amount at maturity, plus accrued
                              interest, declining to 100% of their principal
                              amount at maturity, plus accrued interest, on or
                              after April 15, 2006. In addition, at any time
                              prior to April 15, 2001, the Obligors may redeem
                              up to 35% of the aggregate principal amount at
                              maturity of the Notes with the proceeds of one or
                              more sales of Capital Stock (other than
                              Disqualified Stock) of the Company or an Obligor,
                              at 110.000% of their Accreted Value on the
                              redemption date; provided, however, that after
                              any such redemption at least $106.0 million
                              aggregate principal amount at maturity of Notes
                              remains outstanding. See "Description of the
                              Notes--Optional Redemption."
 
Change of Control...........  Upon a Change of Control (as defined herein), the
                              Obligors will be required to make an offer to
                              purchase the New Notes at a purchase price equal
                              to 101% of their Accreted Value on the date of
                              purchase,
 
                                       13

<PAGE>
 
                              plus accrued interest, if any. There can be no
                              assurance that the Obligors will have sufficient
                              funds available at the time of any Change of
                              Control to make any required debt repayment
                              (including repurchases of the Notes). See
                              "Description of the Notes--Repurchase of Notes
                              upon a Change of Control."
 
Ranking.....................  The New Notes will be unsecured, unsubordinated
                              indebtedness of the Obligors, will rank pari
                              passu in right of payment with all unsecured,
                              unsubordinated indebtedness of the Obligors and
                              will be senior in right of payment to all
                              subordinated indebtedness of the Obligors. At
                              March 31, 1998, after giving pro forma effect to
                              the Transactions, the Obligors would have had
                              approximately $210.0 million of indebtedness
                              outstanding and the Obligors' subsidiaries would
                              have had $114.0 million of liabilities (including
                              $110.0 million of indebtedness under the Senior
                              Credit Facility). See "Risk Factors--Substantial
                              Leverage" and "--Holding Company Structure;
                              Structural Subordination."
 
Guaranty....................  All payments with respect to the New Notes
                              (including principal and interest) will be fully
                              and unconditionally guaranteed on a senior basis
                              by the Guarantor. The New Guaranty will rank pari
                              passu with all existing and future unsecured,
                              unsubordinated indebtedness of the Guarantor and
                              will be effectively subordinated to all
                              liabilities of the Guarantor's subsidiaries,
                              including the Obligors and Renaissance Media.
 
Certain Covenants...........  The Indenture contains certain covenants that,
                              among other things, restrict the ability of the
                              Company and its Restricted Subsidiaries (as
                              defined herein) to incur additional indebtedness,
                              create liens, engage in sale-leaseback
                              transactions, pay dividends or make distributions
                              in respect of their capital stock, redeem capital
                              stock, make investments or certain other
                              restricted payments, sell assets, issue or sell
                              stock of Restricted Subsidiaries, enter into
                              transactions with stockholders or affiliates or
                              effect a consolidation or merger. However, these
                              limitations are subject to a number of important
                              qualifications and exceptions. See "Risk
                              Factors--Restrictions Imposed by Terms of the
                              Company's Indebtedness" and "Description of the
                              Notes--Covenants."
 
Registration Rights.........  The Obligors and the Guarantor are required to
                              commence this exchange offer (the "Exchange
                              Offer") pursuant to an effective registration
                              statement or cause resales of the Notes to be
                              registered under the Securities Act pursuant to
                              an effective shelf registration statement. If one
                              of such events does not occur prior to the date
                              that is six months after the initial sale of the
                              Notes (the "Closing Date"), interest on the Notes
                              will increase by .5% per annum until the
                              consummation of the Exchange Offer or the
                              effectiveness of such shelf registration
                              statement. Holders who do not participate in the
                              Exchange Offer may thereafter hold a less liquid
                              security. See "Description of the Notes--
                              Registration Rights."
 
                                       14

<PAGE>
 
 
Book-Entry; Delivery and      The New Notes will be represented by one or more
Form........................  permanent global Notes in definitive, fully
                              registered form, deposited with the Trustee as
                              custodian for, and registered in the name of, a
                              nominee of The Depository Trust Company ("DTC").
                              See "Description of the Notes--Book-Entry;
                              Delivery and Form."
 
                                  RISK FACTORS
 
  Potential investors should consider carefully certain factors relating to an
investment in the Notes. See "Risk Factors."
 
                                       15

<PAGE>
 
                        SUMMARY FINANCIAL AND OTHER DATA
 
  The summary financial and other data set forth below were derived from the
combined financial statements of the Systems to be acquired in the Acquisition
and the pro forma combined financial statements of the Company. The summary
statement of operations data for the years ended December 31, 1995, 1996 and
1997 and the balance sheet data as of December 31, 1997 were derived from the
audited combined financial statements of the Systems included elsewhere in this
Prospectus. The summary statement of operations data for the years ended
December 31, 1993 and 1994 and the three months ended March 31, 1997 and 1998
were derived from unaudited combined financial statements for the Systems
which, in the opinion of management, include all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of the
Systems' results of operations for such periods. The summary financial and
other data presented below should be read in conjunction with, and are
qualified in their entirety by, "Pro Forma Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the financial statements and notes thereto included elsewhere in this
Prospectus.
 

<TABLE>
<CAPTION>
                                      YEAR ENDED DECEMBER 31,                    THREE MONTHS ENDED MARCH 31,
                         ------------------------------------------------------  ----------------------------
                                                                                      SYSTEMS
                                   SYSTEMS HISTORICAL                               HISTORICAL
                         -------------------------------------------  PRO FORMA  --------------------  PRO FORMA
                          1993     1994     1995     1996     1997    1997 (1)     1997       1998      1998 (1)
                         -------  -------  -------  -------  -------  ---------  ---------  ---------  ------------
                                       (DOLLARS IN THOUSANDS, EXCEPT PER SUBSCRIBER DATA)
                                                     (INCLUDED IN
                            (PREDECESSOR) (2)         TWI CABLE,                 (INCLUDED IN TWI
                                                         INC.)                     CABLE, INC.)
<S>                      <C>      <C>      <C>      <C>      <C>      <C>        <C>        <C>        <C>
STATEMENT OF OPERATIONS DATA:
 Revenues (3)........... $38,125  $40,168  $43,549  $47,327  $50,987  $ 50,987     $12,446    $13,973      13,973
 System operating
  expenses (3) (4)......  17,618   18,656   20,787   22,626   23,142    24,157       5,778      6,013       6,261
 Non-system operating
  expenses (5)..........     765    2,032    2,200    2,733    2,782     2,782         695        703         804
 Depreciation,
  amortization and loss
  (gain) on disposal of
  fixed assets..........  16,305   16,583   17,610   18,116   19,317    26,683       4,672      4,611       6,671
                         -------  -------  -------  -------  -------  --------   ---------  ---------   ---------
 Operating income.......   3,437    2,897    2,952    3,852    5,746    (2,635)      1,301      2,646         237
                         -------  -------  -------  -------  -------  --------   ---------  ---------   ---------
 Interest expense, net.. (12,058) (11,603) (11,871)     --       --    (19,117)        --         --        4,612
 Income tax benefit
  (expense).............   3,449    3,482    3,567   (1,502)  (2,262)      --         (659)    (1,191)        --
                         -------  -------  -------  -------  -------  --------   ---------  ---------   ---------
 Net (loss) income...... $(5,172) $(5,224) $(5,352) $ 2,350  $ 3,484  $(21,752)  $     642  $   1,455      (4,375)
                         =======  =======  =======  =======  =======  ========   =========  =========   =========
OTHER FINANCIAL DATA:
 Net cash provided by
  operations............    N.A.     N.A.  $ 7,523  $23,088  $23,604      N.A.       4,787      6,021        N.A.
 EBITDA (6)............. $19,742  $19,480   20,562   21,968   25,063  $ 24,048       5,973      7,257       6,908
 System cash flow (7)...  20,507   21,512   22,762   24,701   27,845    26,830       6,668      7,960       7,712
 Capital expenditures...   7,777    9,152    7,376    8,170    6,390     6,390       1,561        456         456
 EBITDA margin (3)......    51.8%    48.5%    47.2%    46.4%    49.2%     47.2%       48.0%      51.9%       49.4%
 Ratio of earnings to
  fixed
  charges (8)...........     --       --       --       --       --        --          --         --          --
OTHER DATA:
 Homes passed (at period
  end) (9).............. 141,402  143,248  145,148  175,522  178,449   178,449     176,617    179,402     179,402
 Basic subscribers (at
  period end)........... 109,026  115,075  120,340  123,203  126,558   126,558     125,016    127,191     127,191
 Basic penetration (at
  period end) (9).......    77.1%    80.3%    82.9%    70.2%    70.9%     70.9%       70.8%      70.9%       70.9%
 Premium units (at
  period end)...........  56,764   62,434   60,462   64,716   64,963    64,963      63,890     61,053      61,053
 Premium penetration (at
  period end)...........    52.1%    54.3%    50.2%    52.5%    51.3%     51.3%       51.1%      48.0%       48.0%
 Average monthly revenue
  per basic subscriber
  (10).................. $ 29.78  $ 29.87  $ 30.83  $ 32.39  $ 34.02  $  34.02   $   33.43  $   36.71   $   36.71
 Annual EBITDA per basic
  subscriber (11).......  185.03   173.85   174.69   180.40   200.70    192.57      192.51     228.79      217.79
 Annual system cash flow
  per basic subscriber
  (12)..................  192.20   191.98   193.38   202.85   222.97    214.85      214.91     250.96      243.14
 Annual capital
  expenditures per basic
  subscriber (13).......   72.89    81.68    62.66    67.09    51.17     51.17       50.31      14.38       14.38
</TABLE>


<TABLE>
<CAPTION>
                                AS OF DECEMBER 31, 1997    AS OF MARCH 31, 1998
                                -----------------------    --------------------
                                  SYSTEMS         PRO       SYSTEMS      PRO
                                 HISTORICAL    FORMA (1)   HISTORICAL FORMA (1)
                                ------------  -----------  ---------- ---------
<S>                             <C>           <C>          <C>        <C>
BALANCE SHEET DATA:
 Cash and cash equivalents.....  $      1,371  $     1,962  $ 2,943      1,989
 Property, plant and equipment,
  net..........................        36,944       65,216   35,994     65,271
 Total assets..................       288,914      322,543  286,971    322,634
 Total debt....................           --       210,012      --         --
 Net assets/members' equity....       224,546      108,537  222,008    108,614
</TABLE>

 
                                       16

<PAGE>
 
 (1) See "Pro Forma Financial Data."
 (2) Prior to January 4, 1996, the Systems were owned by certain subsidiaries
     of CVI.
 (3) Prior to 1997, franchise fees were included in both revenues and expenses.
     In 1997, the Systems began itemizing franchise fees on subscriber billing
     invoices and recorded such fees as an offset to system operating expenses.
     Had the itemization process occurred prior to 1997, the estimated amount
     of franchise fees that would have been reflected as an offset to the
     system operating expenses and not included in revenue in 1993, 1994, 1995
     and 1996 would have been approximately $1.0 million, $1.3 million, $1.4
     million and $1.5 million, respectively. The effect on EBITDA margin of
     this change would have resulted in EBITDA margins of 53.0%, 50.1%, 48.9%
     and 48.0% for the years 1993, 1994, 1995 and 1996, respectively.
 (4) Represents all system operating expenses and excludes management fees and
     corporate overhead.
 (5) Represents management fees and corporate overhead.
 (6) EBITDA represents income before interest, income taxes and depreciation,
     amortization and loss (gain) on disposal of fixed assets. EBITDA is not
     intended to represent cash flow from operations or net (loss) income as
     defined by generally accepted accounting principles and should not be
     considered as a measure of liquidity or an alternative to, or more
     meaningful than, operating income or operating cash flow as an indication
     of the Company's operating performance. Moreover, EBITDA is not a
     standardized measure and may be calculated in a number of ways.
     Accordingly, the EBITDA information provided may not be comparable to
     other similarly titled measures provided by other companies. EBITDA is
     included herein because management believes that certain investors find it
     a useful tool for measuring the Company's ability to service its
     indebtedness.
 (7) Represents EBITDA before non-system operating expenses. System cash flow
     should not be considered as a measure of liquidity or an alternative to,
     or more meaningful than, operating cash flow as defined by generally
     accepted accounting principles.
 (8) For purposes of this calculation, "earnings" is defined as earnings before
     fixed charges. Fixed charges consist of interest expense, amortization of
     deferred financing costs, income taxes and the portion of rent expense
     under operating leases representative of interest. For the years ended
     December 31, 1993, 1994 and 1995, the Systems' earnings before fixed
     charges were insufficient to cover their fixed charges by $8.7 million,
     $9.0 million and $9.1 million. For the years ended December 31, 1996 and
     1997, the Systems did not have indebtedness and a ratio of earnings to
     fixed charges would not be meaningful for such years. On a pro forma basis
     for the year ended December 31, 1997, and the three months ended March 31,
     1998, the Company's earnings before fixed charges would have been
     insufficient to cover fixed charges by $21.9 million and $4.4 million,
     respectively.
 (9) Based on a homes passed audit conducted in 1996 which showed an increase
     in homes passed of approximately 27,000 homes, the homes passed may be
     understated in 1993, 1994 and 1995 and basic penetration may be overstated
     for such periods.
(10) Reflects revenues for the applicable period divided by the average number
     of basic subscribers for the applicable period divided by the number of
     months in the applicable period.
(11) Reflects EBITDA for the applicable period divided by the average number of
     basic subscribers for the applicable period. For purposes of this
     calculation, EBTIDA was annualized for the three-month period ended March
     31, 1998 and 1997.
(12) Reflects system cash flow divided by the average number of basic
     subscribers for the applicable period. For purposes of this calculation,
     cash flow was annualized for the three-month period ended March 31, 1998
     and 1997.
(13) Reflects capital expenditures for the applicable period divided by the
     average number of basic subscribers for the applicable period. For
     purposes of this calculation, capital expenditures were annualized for the
     three-month period ended March 31, 1998 and 1997.
 
                                       17

<PAGE>
 
                                  THE COMPANY
 
  Holdings is owned by the Morgan Stanley Entities, Time Warner and the
Management Investors. Renaissance Louisiana, Renaissance Tennessee and
Renaissance Capital are wholly owned subsidiaries of the Guarantor.
Renaissance Louisiana and Renaissance Tennessee own all the equity interests
in Renaissance Media. The Guarantor and Renaissance Capital have no assets and
do not, and will not, conduct any operations.
 
  The following chart sets forth the ownership structure of the Company:
 
                                   [CHART] (1)

[Chart sets forth in graphic form the following: Time Warner, the Morgan Stanley
Entities and the Management Investors own 8.8%, 87.6% & 3.6% of Holdings
respectively. Holdings owns 100% of the Guarantor, which in turn owns 100% of 
Renaissance Louisiana, Renaissance Capital and Renaissance Tennessee.
Renaissance Louisiana and Renaissance Tennessee own 75.77% and 24.23%,
respectively, of Renaissance Media. Renaissance Media holds the Louisiana 
Systems and the Tennessee System.]


- --------
(1)  Excludes certain carried interests of the Management Investors in
     affiliates of Time Warner and the Morgan Stanley Entities which hold the
     respective equity interests in Holdings. These carried interests
     represent the right to participate in additional distributions of such
     affiliates.




 
                                      18

<PAGE>
 
ASSET PURCHASE AGREEMENT
 
  On November 14, 1997, Holdings and Time Warner entered into the Asset
Purchase Agreement. The Asset Purchase Agreement was assigned by Holdings to
Renaissance Media, and, on April 9, 1998, Renaissance Media purchased
substantially all of the assets of the Systems for approximately $300.0
million in cash, plus the issuance to Time Warner of a $9.5 million equity
ownership interest in Holdings, subject to adjustment based upon working
capital and subscriber amounts at the time of closing. Time Warner has agreed
to indemnify Renaissance Media in an amount not to exceed $26.0 million in the
aggregate for any losses arising out of any representation or warranty made by
Time Warner in connection with the Acquisition not being true and accurate.
 
  The foregoing summary of certain provisions of the Asset Purchase Agreement
does not purport to be complete and is qualified in its entirety by reference
to the Asset Purchase Agreement, a copy of which is available from the Company
upon request.
 
                                      19

<PAGE>
 
                                 RISK FACTORS
 
  An investment in the Notes offered hereby involves a significant degree of
risk. Prospective Investors should consider carefully all of the information
set forth herein, and in particular the following factors.
 
SUBSTANTIAL LEVERAGE
 
  As of December 31, 1997 and March 31, 1998, on a pro forma basis after
giving effect to the Transactions, the Company would have had approximately
$210.0 million of indebtedness outstanding. See "Capitalization" and "Selected
Financial and Other Data." The accretion of original issue discount on the
Notes will cause an increase in indebtedness of $63.2 million by April 15,
2003. In addition, subject to the restrictions in the Senior Credit Facility
and the Indenture, the Company plans to incur additional indebtedness under
the Revolver for capital expenditures, working capital and acquisitions. As a
result, the Company anticipates that it will continue to be highly leveraged
for the foreseeable future. The Company's highly leveraged capital structure
could adversely affect the Company's ability to service the Notes and could
significantly limit the Company's ability to finance its operations and fund
its capital expenditure requirements, to compete effectively, to expand its
business, to comply with its obligations under its franchise agreements, to
plan for or react to changes in its business or to operate under adverse
economic conditions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."
 
INSUFFICIENCY OF EARNINGS TO COVER FIXED CHARGES
 
  On a pro forma basis, the Company's earnings before fixed charges would have
been insufficient to cover its fixed charges for the year ended December 31,
1997 by $21.9 million and for the three months ended March 31, 1998 by $4.4
million (unaudited). See "Selected Financial and Other Data" and "Pro Forma
Financial Data."
 
  The Company used the net proceeds from the Offering, together with the
Equity Contributions and borrowings under the Term Loans to consummate the
Acquisition. The Company believes that the borrowings expected to be available
under the Revolver and anticipated cash flow from operations will be
sufficient to upgrade the Systems as currently contemplated and satisfy the
Company's anticipated working capital and debt service requirements. However,
the actual amount and timing of the Company's capital requirements may differ
materially from the Company's estimates as a result of, among other things,
the demand for the Company's services and regulatory, technological and
competitive developments (including additional market developments and new
opportunities) in the Company's industry. The ability of the Company to meet
its debt service and other obligations will depend upon the future performance
of the Company which, in turn, is subject to general economic conditions and
to financial, political, competitive, regulatory and other factors, many of
which are beyond the Company's control. The Company's ability to meet its debt
service and other obligations also may be affected by changes in prevailing
interest rates, as borrowings under the Senior Credit Facility will bear
interest at floating rates, subject to certain interest rate protection
agreements. See "Description of Certain Indebtedness."
 
  The Company believes that it will continue to generate cash flow from
operations and obtain financing sufficient to meet the costs and expenses of
future acquisitions, capital expenditures, working capital needs and debt
service requirements; however, there can be no assurance that the terms on
which any such financing may be available would be favorable to the Company or
that, if it were able to obtain financing, the Company will be able to meet
its debt service and other obligations. If the Company were unable to meet its
debt service or other obligations, it would have to refinance its indebtedness
or obtain new financing. There can be no assurance that such financing will be
available to the Company on acceptable terms or at all. See "Selected
Financial and Other Data," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Description of Certain Indebtedness"
and "Description of the Notes."
 
                                      20

<PAGE>
 
  The Company expects that the Obligors will be required to refinance a
portion of the Notes at the maturity thereof. In addition, the Company expects
that Renaissance Media may refinance a portion of the indebtedness under the
Senior Credit Facility at its maturity. There can be no assurance that the
Obligors or Renaissance Media will be able to obtain such refinancing upon
acceptable terms or at all.
 
HOLDING COMPANY STRUCTURE; STRUCTURAL SUBORDINATION
 
  The Guarantor is a holding company which has no significant operations or
assets other than its equity interests in Renaissance Louisiana, Renaissance
Tennessee and Renaissance Capital. Renaissance Louisiana and Renaissance
Tennessee are holding companies which have no significant operations or assets
other than their equity interests in Renaissance Media. Renaissance Capital
has no operations or assets and was formed solely for the purpose of serving
as a co-obligor of the Notes. Accordingly, the Obligors must rely entirely
upon distributions from Renaissance Media to generate the funds necessary to
meet the Obligors' obligations, including the payment of principal and
interest on the Notes. Renaissance Media is a separate legal entity that has
no obligation to pay any amounts due pursuant to the Notes or to make any
funds available therefor, whether by dividends, loans or other payments. The
Senior Credit Facility contains significant restrictions on the ability of
Renaissance Media to distribute funds to Renaissance Louisiana and Renaissance
Tennessee. See "Description of Certain Indebtedness."
 
  The Obligors' equity interests in Renaissance Media are pledged as
collateral under the Senior Credit Facility. Therefore, if the Obligors were
unable to pay the principal or interest on the Notes when due (whether at
maturity, upon acceleration or otherwise), the ability of the holders of the
Notes to proceed against such equity interests to satisfy such amounts would
be subject to the prior satisfaction in full of all amounts owing under the
Senior Credit Facility. Any action to proceed against such equity interests by
or on behalf of the holders of the Notes would constitute an event of default
under the Senior Credit Facility, entitling the lenders thereunder to declare
all amounts owing to be immediately due and payable. In addition, as a secured
creditor, the lenders under the Senior Credit Facility would control the
disposition and sale of such equity interests after an event of default under
the Senior Credit Facility and would not be legally required to take into
account the interests of unsecured creditors of the Obligors, such as the
holders of the Notes, with respect to any such disposition or sale. There can
be no assurance that the assets of Renaissance Media, after the satisfaction
of its secured creditors, would be sufficient to satisfy any amounts owing
with respect to the Notes.
 
  The Guarantor, Renaissance Louisiana and Renaissance Tennessee are holding
companies and conduct their businesses through subsidiaries. The Notes are
effectively subordinated to all existing and future claims of creditors of the
Obligors' subsidiaries, including the lenders under the Senior Credit Facility
and such subsidiaries' trade and other creditors. At March 31, 1998 on a pro
forma basis after giving effect to the Transactions, the Obligors'
subsidiaries would have had $114.0 million of liabilities (including $110.0
million of indebtedness under the Senior Credit Facility). The rights of the
Obligors and their creditors, including the holders of the Notes, to realize
upon the assets of any of the Obligors' subsidiaries upon any such
subsidiary's liquidation or reorganization (and the consequent rights of the
holders of the Notes to participate in the realization of those assets) will
be subject to the prior claims of such subsidiaries' respective creditors,
including, in the case of Renaissance Media, the lenders under the Senior
Credit Facility. In such event, there may not be sufficient assets remaining
to pay amounts due on any or all of the Notes then outstanding. See
"Description of the Notes--Ranking" and "Description of Certain Indebtedness."
The Indenture relating to the Notes will permit the Obligors' subsidiaries to
incur additional indebtedness under certain circumstances. See "Description of
the Notes--Covenants."
 
RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
 
  The Indenture relating to the Notes and the Senior Credit Facility impose
restrictions that, among other things, limit the ability of the Company and
its subsidiaries to incur additional indebtedness, create liens upon assets,
apply the proceeds from the disposal of assets, make investments, loans and
other payments, enter into
 
                                      21

<PAGE>
 
certain transactions with affiliates and certain mergers and acquisitions. The
Senior Credit Facility also requires Renaissance Media to maintain specified
financial ratios and to meet certain financial tests. See "Description of the
Notes" and "Description of Certain Indebtedness." The ability of Renaissance
Media to comply with such covenants and restrictions can be affected by events
beyond its control, and there can be no assurances that Renaissance Media will
achieve operating results that would permit compliance with such provisions.
The breach of any of the provisions of the Senior Credit Facility would, under
certain circumstances, result in defaults thereunder, permitting the lenders
thereunder to prevent distributions by Renaissance Media and to accelerate the
indebtedness thereunder. If Renaissance Media were unable to pay the amounts
due in respect of the Senior Credit Facility, the lenders under the Senior
Credit Facility could foreclose upon any assets pledged to secure such payment
or otherwise prevent the distribution of funds by Renaissance Media. In such
event, the holders of the Notes might not be able to receive any payments
until the payment default was cured or waived, any such acceleration was
rescinded or the indebtedness under the Senior Credit Facility was discharged
or paid in full. Any of such events would adversely affect the Obligors'
ability to service the Notes, including but not limited to the Obligors'
ability to pay cash interest on the Notes.
 
OPERATIONS AS AN INDEPENDENT COMPANY
 
  Prior to the Acquisition, the Systems were operated by Time Warner since
January 4, 1996 and prior to such time were operated by CVI from September 12,
1986 (in the case of the Tennessee System) and December 31, 1988 (in the case
of the Louisiana Systems). Although the Management Investors had extensive
experience managing the Systems prior to the acquisition of CVI by Time
Warner, no financial or operating history of the Systems as an independent
entity and not as part of a large multiple cable television system operator
("MSO") is available for potential purchasers to evaluate. Because the Company
has retained much of the Systems' prior regional personnel and the Management
Investors have experience managing the Systems, the Company believes that it
will have personnel and systems in place prior to the consummation of the
Acquisition sufficient to permit the Company to operate the Systems without
assistance from Time Warner. Time Warner manages certain programming for the
Company, although the Company has lost certain programming discounts that were
available to the Systems when they were part of a large MSO. In addition, as a
result of the purchase accounting adjustments arising in connection with the
Acquisition, the Company's annual depreciation and amortization charges will
increase. The above factors, together with increased interest expense
associated with the Notes and the Senior Credit Facility, will have a material
adverse impact on the Company's results in the future. See "Pro Forma
Financial and Other Data."
 
SIGNIFICANT COMPETITION IN THE CABLE TELEVISION INDUSTRY
 
  Cable television systems face competition from alternative methods of
receiving and distributing television signals and from other sources of news,
information and entertainment such as off-air television broadcast
programming, newspapers, movie theaters, live sporting events, online computer
services and home video products, including videotape cassette recorders.
Because the Company's franchises are non-exclusive, there is the potential for
competition with the Systems from other operators of cable television systems,
including systems operated by local government authorities, and from other
distribution systems capable of delivering programming to homes or businesses,
including direct broadcast satellite ("DBS") systems and multichannel
multipoint distribution service ("MMDS") systems. Additionally, the FCC
recently adopted new regulations allocating frequencies in the 28 GHz band for
a new multichannel wireless video service called local multipoint distribution
service ("LMDS") that is similar to MMDS, and the FCC initiated spectrum
auctions for LMDS licenses in February 1998. In recent years, there has been
significant national growth in the number of subscribers to DBS services.
Subscribership to MMDS also is increasing and can be expected to grow.
Additionally, recent changes in federal law and recent administrative and
judicial decisions have removed certain of the restrictions that have limited
entry into the cable television business by potential competitors such as
telephone companies, public utility holding companies and their subsidiaries.
During 1997, the Jackson, Tennessee Public Utility Department, which as of
March 31, 1998, encompassed approximately 34,000 homes passed by the Tennessee
System, and approximately 23,000 basic subscribers (excluding bulk
subscribers), representing approximately
 
                                      22

<PAGE>
 
three-quarters of the subscribers of the Tennessee System, undertook a
feasibility study with respect to providing cable television service to
customers in its service area and reportedly concluded that a competitive
cable television could be feasible under certain circumstances. During its
1997-1998 session, the Tennessee legislature considered several bills which
would allow municipalities operating electric utility plants and electric
cooperatives to provide cable television and other service and would authorize
six pilot municipal electric systems to provide cable television and other
services. Though the authorization will terminate on June 30, 2001, any system
actually providing such services to customers as a pilot system prior to that
date will be permitted to continue doing so indefinitely. As of the date
hereof, however, none of these bills has been enacted, and applicable state
and local law do not permit the Jackson Public Utility Department to provide
cable television services. See "Legislation and Regulation--State and Local
Regulation." Other new technologies, including Internet-based services, may
also become competitive with services that the Company may offer.
 
  Many of the Company's potential competitors have substantially greater
resources than the Company, and the Company cannot predict the extent to which
competition will materialize in its franchise areas from other cable
television operators, other distribution systems for delivering video
programming and other broadband telecommunications services to the home, or
from other potential competitors, or, if such competition materializes, the
extent of its effect on the Company. See "Business--Competition" and
"Legislation and Regulation."
 
NON-EXCLUSIVE FRANCHISES; NON-RENEWAL OR TERMINATION OF FRANCHISES
 
  Cable television companies operate under franchises granted by local
authorities which are subject to renewal and renegotiation from time to time.
The Company's business is dependent upon the retention and renewal of its
local franchises. A franchise is generally granted for a fixed term ranging
from five to fifteen years, but in many cases is terminable if the franchisee
fails to comply with the material provisions thereof. The Company's franchises
typically impose conditions relating to the use and operation of the cable
television system, including requirements relating to the payment of fees,
system bandwidth capacity, customer service requirements, franchise renewal
and termination. The Cable Television Consumer Protection and Competition Act
of 1992 (the "1992 Cable Act") prohibits franchising authorities from granting
exclusive cable television franchises and from unreasonably refusing to award
additional competitive franchises. It also permits municipal authorities to
operate cable television systems in their communities without franchises. The
Cable Communications Policy Act of 1984 (the "1984 Cable Act" and collectively
with the 1992 Cable Act, the "Cable Acts") provides, among other things, for
procedural and substantive safeguards for cable operators and creates an
orderly franchise renewal process in which renewal of franchise licenses can
not be unreasonably withheld or, if renewal is withheld and the franchise
authority acquires ownership of the system or effects a transfer of the system
to another person, the operator generally is entitled to the "fair market
value" for the system covered by such franchise. Although the Company believes
that the Systems generally have good relationships with their franchise
authorities, no assurances can be given that the Company will be able to
retain or renew such franchises or that the terms of any such renewals will be
as favorable to the Company as the existing franchises. The non-renewal or
termination of franchises relating to a significant portion of the Company's
subscribers could have a material adverse effect on the Company's financial
condition and results of operations. The Company's future acquisitions will be
dependent on its ability to obtain franchise transfer approvals in a timely
manner. Each city has some flexibility in determining the terms of a franchise
(including franchise fees), and to some extent can impose conditions on such
franchise, such as build-out and upgrade requirements. See "Business--
Franchises."
 
FEDERAL LAW AND REGULATION IN THE CABLE TELEVISION INDUSTRY
 
  The cable television industry is subject to extensive regulation by federal,
local and, in some instances, state governmental agencies. The Cable Acts,
both of which amended the Communications Act of 1934 (as amended, the
"Communications Act"), established a national policy to guide the development
and regulation of cable television systems. The Communications Act was
substantially amended by the Telecommunications Act of 1996 (the "1996 Telecom
Act"). Principal responsibility for implementing the policies of the Cable
Acts and the 1996 Telecom Act has been allocated between the Federal
Communications Commission (the "FCC") and state or local
 
                                      23

<PAGE>
 
regulatory authorities. Advances in communications technology as well as
changes in the marketplace and the regulatory and legislative environment are
constantly occurring. Thus, it is not possible to predict the effect that
ongoing or future developments might have on the cable television industry or
on the operations of the Company.
 
  The 1992 Cable Act and the FCC's rules implementing that Act generally have
increased the administrative and operational expenses of cable television
systems and have resulted in additional regulatory oversight by the FCC and
local or state franchise authorities. The Cable Acts and the corresponding FCC
regulations have established, among other things: (i) rate regulations; (ii)
mandatory carriage and retransmission consent requirements that require a
cable system under certain circumstances to carry a local broadcast station or
to obtain consent to carry a local or distant broadcast station; (iii) rules
for franchise renewals and transfers; and (iv) other requirements covering a
variety of operational areas such as technical standards and equal employment
opportunity and customer service requirements.
 
  The 1996 Telecom Act deregulates rates for CPSTs after March 31, 1999 for
most MSOs and, for certain small cable operators, immediately eliminates rate
regulation of CPSTs, and, in certain circumstances, basic services and
equipment. Time Warner and its affiliates entered into a "Social Contract"
with the FCC which became effective on January 1, 1996. Under the Social
Contract, which terminates December 31, 2000, Time Warner is permitted to make
the same rate adjustments on CPSTs which operators are permitted to make under
the FCC's rules for "external costs," including programming and franchise-
related costs and inflation, except that Time Warner may not adjust rates for
channel additions to the CPSTs pursuant to the FCC's rules, nor may it use
cost of service showings to adjust rates. In addition, Time Warner is
permitted to increase monthly CPST rates by an additional $1.00 per year above
other permissible increases in return for certain upgrade commitments through
the contract term. See "Regulation and Legislation--The Social Contract." The
FCC is conducting various rulemakings and reconsidering other regulations
adopted pursuant to the 1996 Telecom Act. The Company is currently unable to
predict the ultimate effect of the 1992 Cable Act or the 1996 Telecom Act, the
ultimate outcome of the various FCC rulemaking proceedings, or the litigation
challenging various aspects of this federal legislation and the FCC's
regulations implementing the legislation. In addition, the FCC and Congress
continue to be concerned that rates for regulated services are rising at a
rate exceeding inflation. Recently a bill was introduced in Congress which
would repeal the deregulation of CPST's now scheduled to be effective after
March 31, 1999. See "Regulation and Legislation."
 
  A bill, which was pending in the 1997 term of the Louisiana legislature and
which provided for the certification and regulation of cable television
systems by the Louisiana Public Service Commission ("PUC"), was not re-
introduced in the 1998 term. The bill, if adopted, among other provisions,
would have: (i) allowed the PUC to void, order new rates or reduce rates found
to be discriminatory or necessary to reflect adequate service; (ii) required
that all cable television systems commencing or expanding service be
franchised conditioned upon confirmation by the PUC; and (iii) provided the
PUC with the authority to order construction, operation, or an extension of
cable service on such terms and conditions as it deems reasonable where cable
service has been unreasonably delayed or withheld. During its 1997-1998 term,
the Tennessee legislature considered a bill which would permit municipalities
operating electric utility plants and electric cooperatives authorization to
provide cable television and other services. The Company cannot predict
whether any of the states in which it currently operates will engage in such
regulation in the future.
 
RISKS RELATING TO ACQUISITION STRATEGY
 
  A significant element of the Company's business strategy is to expand by
acquiring cable television systems located in reasonable proximity to existing
systems or of a sufficient size to enable the acquired system to serve as the
basis for a new local cluster. Any acquisition may have an adverse effect upon
the Company's operating results or cash flow. There is substantial competition
for attractive acquisition candidates. There can be no assurances that the
Company will be able to acquire suitable acquisition candidates on favorable
terms or that it will be able to integrate successfully any acquired business
with its existing operations or realize any efficiencies therefrom. There can
also be no assurances that any such acquisition, if consummated, will perform
as expected. In connection with such acquisitions, the Company may have to
upgrade a significant portion of the cable television systems it acquires to,
among other things, increase bandwidth and channel capacity. The Company's
inability to upgrade these
 
                                      24

<PAGE>
 
systems could have a material adverse effect on its operations and competitive
position. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources" and "Business."
 
  The Company will be required to seek additional financing to fund
acquisitions of additional cable television systems and any capital
expenditures required to upgrade such systems. There can be no assurance that
such financing will be available on terms acceptable to the Company or at all.
Sources of additional financing may include commercial bank borrowings, vendor
financing or the private or public sale of equity or debt securities.
 
ABILITY TO MANAGE GROWTH
 
  The Company's future performance will depend, in part, upon its ability to
successfully implement its acquisition strategy, evaluate markets, secure
financing, effect transfers of pole attachment agreements and obtain any
required governmental authorizations, all in a timely manner, at reasonable
costs and on satisfactory terms and conditions. Rapid growth may place a
significant strain on the Company's management. The Company's success will
also depend in part upon its ability to hire and retain qualified sales,
marketing, administrative, operating and technical personnel. There can be no
assurance that the Company will be able to recruit, train, manage and retain
sufficient qualified personnel. In addition, as the Company increases its
service offerings and expands its targeted markets, there will be additional
demands on customer support, sales and marketing, administrative resources and
network infrastructure. The Company's inability to effectively manage its
growth could have a material adverse effect on the Company's business, results
of operations and financial condition.
 
RAPID TECHNOLOGICAL ADVANCEMENTS
 
  The cable television business is characterized by rapid technological change
and the introduction of new products and services. There can be no assurance
that the Company will be able to fund the capital expenditures necessary to
keep pace with technological developments or that the Company will
successfully anticipate the demand of its subscribers for products or services
requiring new technology. The Company's inability to provide enhanced services
in a timely manner or to anticipate the demands of the marketplace could have
a material adverse effect on the Company's business, results of operations and
financial condition. See "Business--Competition."
 
  In addition, the Company's introduction of new technologies or services is
subject to uncertainties regarding subscriber demand, future competition,
appropriate pricing, and the costs and timing with respect to marketing and
sales efforts. There can be no assurances as to the effect of such
technological changes on the Company's business, results of operations and
financial condition or that the Company will not be required to expend
substantial financial resources to implement new technologies, that capital
expenditures for new technologies or services will approximate Management's
expectations, or that sufficient demand exists to recoup such expenditures.
 
DEPENDENCE ON KEY PERSONNEL
 
  The Company is managed by a small number of key executive officers,
including the Management Investors. The loss of services of one or more of
these key individuals could materially and adversely affect the business of
the Company and its prospects. The Company believes that its success will
depend in large part on its ability to attract and retain highly skilled and
qualified personnel. All of the Management Investors have employment and
related agreements upon consummation of the Transactions. Pursuant to these
agreements, the Management Investors may own or manage other cable television
systems after 2001. The competing claims upon the Management Investors' time
and energies could divert their attention from the affairs of the Company. The
Company does not maintain key person life insurance for any of its executive
officers.
 
DEPENDENCE ON BILLING, ACCOUNTING AND INFORMATION SYSTEMS
 
  The Company relies on CSG Systems International Inc. ("CSG") for the
provision of its billing and subscriber management information systems. As
there are only a limited number of companies providing these services, the
loss of CSG's services would have a material adverse effect on the Company.
While the Company believes CSG will resolve its Year 2000 concerns prior to
1999, there can be no assurance that the systems of companies on which the
Company's Systems and operations rely, including CSG, will be converted on a
timely basis and will not have a material adverse effect on the Company.
 
                                      25

<PAGE>
 
CONTROL BY THE MORGAN STANLEY ENTITIES; CONFLICTS OF INTEREST
 
  The Morgan Stanley Entities, each of which is an affiliate of Morgan
Stanley, beneficially own 87.6% and Time Warner beneficially owns 8.8% of the
outstanding equity of Holdings. The Guarantor, the Obligors and Renaissance
Media are directly or indirectly wholly owned by Holdings. Currently, three of
the seven members of the Board of Representatives of Holdings are Managing
Directors of Morgan Stanley. The Morgan Stanley Entities and the Management
Investors each have the right to appoint three Representatives (only one of
whom shall have the right to vote) to the Board of Holdings. Time Warner has
the right to appoint one Representative to the Board of Holdings.
Representatives who have the right to vote shall have the right to cast votes
which are proportional to the respective equity ownership interests in
Holdings of the entities which appointed them. See "Management" and "Certain
Relationships and Related Transactions."
 
  As a result of their ownership interest in Holdings, the Morgan Stanley
Entities control the management policies of the Company and matters requiring
securityholder approval. See "Principal Securityholders." Certain decisions
concerning the operations or financial structure of the Company may present
conflicts of interest between the Morgan Stanley Entities and the holders of
the Notes. For example, if the Company encounters financial difficulties or is
unable to pay its debts as they mature, the interests of the Morgan Stanley
Entities may conflict with those of the holders of Notes. In addition, the
Morgan Stanley Entities may have an interest in pursuing acquisitions,
divestitures, financings or other transactions that, in their judgment, could
enhance their equity investment in the Company, even though such transactions
might involve increased risk to the holders of the Notes.
 
  The employment and related agreements of the Management Investors permit the
Management Investors to own or manage other cable television systems after
2001, although the Management Investors are obligated to first offer
acquisition opportunities to the Morgan Stanley Entities. In the event that
the Management Investors acquire or manage other cable television systems, the
competing claims on their time and energy could divert their attention from
the affairs of the Company.
 
  Time Warner and its affiliates currently operate cable television systems
and have significant investments in such systems. Time Warner has invested in
the past, and may invest in the future, in other entities engaged in the
operation of cable television systems or in related businesses (including
entities engaged in business in areas in which the Company operates). As a
result, Time Warner or its affiliates may compete with the Company for
acquisition targets. Time Warner has, and may develop, relationships with
businesses that are or may be competitive with the Company. Conflicts may also
arise in the negotiation or enforcement of arrangements entered into by the
Company and Time Warner or entities in which Time Warner has an interest. In
addition, Time Warner has no obligation to bring to the Company any investment
or business opportunities of which it becomes aware, even if such
opportunities are within the scope and objectives of the Company.
 
  MSSF, an affiliate of the Placement Agent and the Morgan Stanley Entities,
is the syndication agent and arranger under the Senior Credit Facility. In
connection with such services, MSSF will receive customary fees and be
reimbursed for expenses.
 
ABSENCE OF PUBLIC MARKET; RESTRICTIONS ON RESALES
 
  There presently is no active trading market for the Notes and none may
develop. If the Notes are traded after their initial issuance, they may trade
at a discount from their initial offering price, depending upon prevailing
interest rates, the market for similar securities, the financial condition and
prospects of the Obligors and the Guarantor and other factors beyond the
control of the Obligors and the Guarantor, including general economic
conditions. Although Morgan Stanley has informed the Company that it currently
intends to make a market in the Old Notes and the New Notes, Morgan Stanley is
not obligated to do so and any market-making may be discontinued at any time
without notice, at its sole discretion. Accordingly, there can be no assurance
as to the development or liquidity of any market for the Notes. If Morgan
Stanley conducts any market-making
 
                                      26

<PAGE>
 
activities, it may be required to deliver a "market-making prospectus" when
effecting offers and sales in the New Notes because of the beneficial
ownership in the equity of Holdings by the Morgan Stanley Entities. For so
long as a market-making prospectus is required to be delivered, the ability of
Morgan Stanley to make a market in the New Notes may, in part, be dependent on
the ability of the Guarantor and the Obligors to maintain a current market-
making prospectus. See "Transfer Restrictions."
 
  The Old Notes have not been registered under the Securities Act and were
offered in reliance upon exemptions from registration under the Securities Act
and applicable state securities laws. Therefore, the Old Notes may be
transferred or resold only in a transaction registered under or exempt from
the Securities Act and applicable state securities laws. Pursuant to the
Registration Rights Agreement, the Guarantor and each Obligor have agreed to
file a registration statement relating to the Exchange Offer with the
Commission and to use their best efforts to cause such registration statement
to become effective with respect to the New Notes. If issued, the New Notes
generally will be permitted to be resold or otherwise transferred by each
holder without the requirement of further registration. The New Notes,
however, will also constitute a new issue of securities with no established
trading market. No assurance can be given as to the liquidity of the trading
market for the New Notes or, in the case of non-exchanging holders of Old
Notes, the trading market for the Old Notes following the Exchange Offer.
Holders who do not participate in the Exchange Offer may thereafter hold a
less liquid security. See "Description of Notes--Registration Rights."
 
ORIGINAL ISSUE DISCOUNT CONSEQUENCES OF THE NOTES
 
  The Old Notes were issued at a substantial discount from their principal
amount at maturity. Consequently, the purchasers of the Notes generally will
be required to include amounts in gross income for federal income tax purposes
in advance of receipt of the cash payments to which such income is
attributable. See "Certain United States Federal Income Tax Consequences" for
a more detailed discussion of the U.S. federal income tax consequences to the
holders of the Notes of the purchase, ownership and disposition of the Notes.
 
  If a bankruptcy case is commenced by or against the Guarantor or the
Obligors under the U.S. Bankruptcy Code after the issuance of the Notes, the
claim of a holder of Notes with respect to the principal amount thereof may be
limited to an amount equal to the sum of (i) the initial public offering
price, and (ii) that portion of the original issue discount that is not deemed
to constitute "unmatured interest" for purposes of the U.S. Bankruptcy Code.
Any original issue discount that was not amortized as of any such bankruptcy
filing would constitute "unmatured interest."
 
CONSEQUENCES OF EXCHANGING OR FAILURE TO FOLLOW EXCHANGE OFFER PROCEDURES
 
  Based on an interpretation by the staff of the Commission set forth in no-
action letters issued to third parties (including Exxon Capital Holdings
Corp., SEC No-Action Letter (April 13, 1989); Morgan Stanley & Co. Inc., SEC
No-Action Letter (June 5, 1991); and Shearman & Sterling, SEC No-Action Letter
(July 2, 1993)), the Obligors believe that New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by any holder of such New Notes (other than any such
holder which is an "affiliate" of any Obligor within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holder's business and that
such holder does not intend to participate and has no arrangement or
understanding with any person to participate in the distribution of such New
Notes. Any Participating Broker-Dealer that acquired Old Notes for its own
account as a result of market-making activities or other trading activities
may be a statutory underwriter. Each Participating Broker-Dealer that receives
New Notes for its own account pursuant to the Exchange Offer must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may
be used by a Participating Broker-Dealer in connection with resales of New
Notes received in exchange for Old Notes where such Old Notes were acquired by
such Participating
 
                                      27

<PAGE>
 
Broker-Dealer as a result of market-making activities or other trading
activities. The Obligors have agreed that, for a period of 180 days after the
Expiration Date, they will make this Prospectus available to any Participating
Broker-Dealer for use in connection with any such resale (provided that the
Obligors receive a reasonable request therefor from such Participating Broker-
Dealer of its status as a Participating Broker-Dealer). See "Plan of
Distribution."
 
  Any holder who tenders in the Exchange Offer with the intention to
participate, or for the purpose of participating, in a distribution of the New
Notes could not rely on the position of the staff of the Commission enunciated
in no-action letters and, in the absence of an exemption therefrom, must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. Failure to comply
with such requirements in such instance may result in such holder incurring
liability under the Securities Act for which the holder is not indemnified by
the Obligors.
 
  To comply with the securities laws of certain jurisdictions, it may be
necessary to qualify for sale or register the New Notes prior to offering or
selling such New Notes. Upon consummation of the Exchange Offer, holders that
were not prohibited from participating in the Exchange Offer and did not
tender their Old Notes will not have any registration rights under the
Registration Rights Agreement with respect to such nontendered Old Notes, and
accordingly, such Old Notes will continue to be subject to the restrictions on
transfer contained in the legend thereon. In general, Old Notes may not be
offered or sold, unless registered under the Securities Act and applicable
state securities laws. See "The Exchange Offer--Consequences of Failure to
Exchange."
 
  Issuance of the New Notes in exchange for the Old Notes pursuant to the
Exchange Offer will be made only after a timely receipt by the Obligors of
such Old Notes, a properly completed and duly executed Letter of Transmittal
and all other required documents. Therefore, holders of the Old Notes desiring
to tender such Old Notes in exchange for New Notes should allow sufficient
time to ensure timely delivery. The Obligors are under no duty to give
notification of defects or irregularities with respect to the tenders of Old
Notes for exchange. Old Notes that are not tendered or are tendered but not
accepted will, following the consummation of the Exchange Offer, continue to
be subject to the existing restrictions upon transfer thereof, and, upon
consummation of the Exchange Offer, certain registration rights with respect
to the Old Notes under the Registration Rights Agreement will terminate. In
addition, any holder of Old Notes who tenders in the Exchange Offer for the
purpose of participating in a distribution of the New Notes may be deemed to
have received restricted securities, and if so, will be required to comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with any resale transaction. Each broker-dealer that
receives New Notes for its own account in exchange for Old Notes, where such
Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver
a prospectus in connection with any resale of such New Notes. See "Plan of
Distribution." To the extent that Old Notes are tendered and accepted in the
Exchange Offer, the trading market for untendered and tendered but unaccepted
Old Notes could be adversely affected. See "The Exchange Offer."
 
FORWARD LOOKING STATEMENTS
 
  This Prospectus contains forward-looking statements which can be identified
by terminology such as "believes," "anticipates," "intends," "expects" and
words of similar import. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, events or developments to be materially different from any future
results, events or developments expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general
economic and business conditions, both nationally and in the regions in which
the Company operates; technology changes; competition; changes in business
strategy or development plans; the high leverage of the Company; the ability
to attract and retain qualified personnel; existing governmental regulations
and changes in, or the failure to comply with, governmental regulations;
liability and other claims asserted against the Company; and other factors
referenced in this Prospectus, including, without limitation, under the
captions "Summary," "Risk Factors,"
 
                                      28

<PAGE>
 
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business." GIVEN THESE UNCERTAINTIES, PROSPECTIVE INVESTORS
ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS.
The Company disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future results, events or developments.
 
                                USE OF PROCEEDS
 
  This Exchange Offer is intended to satisfy certain of the Obligors'
obligations under the Placement Agreement and the Registration Rights
Agreement. The Obligors will not receive any cash proceeds from the issuance
of the New Notes offered hereby. In consideration for issuing the New Notes
contemplated in this Prospectus, the Obligors will receive Old Notes in like
original Principal Amount at Maturity, the form and terms of which are the
same as the form and terms of the New Notes (which replace the Old Notes),
except as otherwise described herein.
 
  The net proceeds to the Obligors from the Offering of the Old Notes were
approximately $95.3 million, after deducting the estimated underwriting
discounts and commissions and other Offering expenses payable by the Obligors.
The Obligors used the net proceeds from the Offering of the Old Notes,
together with the Equity Contributions and borrowings under the Term Loans, to
consummate the Acquisition and to pay certain fees and expenses in connection
with the Transactions. The cash purchase price for the Systems was
approximately $300.0 million. Time Warner received a $9.5 million equity
ownership interest in Holdings in connection with the consummation of the
Transactions. See "The Company."
 
  The sources and uses of funds for the Transactions were as follows:
 

<TABLE>
<CAPTION>
      SOURCES OF FUNDS          AMOUNT
      ----------------       -------------
                             (IN MILLIONS)
<S>                          <C>
Old Notes...................    $100.0
Equity Contributions(1).....      99.0
Borrowings under the Term
 Loans......................     110.0
Working Capital
 Adjustments(2)                    1.0
                                ------
Total Sources of Funds          $310.0
                                ======
</TABLE>


<TABLE>
<CAPTION>
                                     USES OF FUNDS                   AMOUNT
                                     -------------                -------------
                                                                  (IN MILLIONS)
                       <S>                                        <C>
                       Cash purchase price for the Systems(1)....    $300.0
                       Estimated transaction fees and expenses...      10.0
                                                                     ------
                       Total Uses of Funds.......................    $310.0
                                                                     ======
 
 
</TABLE>

 
- --------
(1) Does not include the portion of the purchase price that was paid to Time
    Warner as a $9.5 million equity ownership interest in Holdings.
(2) Working Capital Adjustments consists of certain net liabilities of the
    Systems assumed by the Company at the time the Acquisition was
    consummated.
 
  The Offering of the Old Notes was conditioned on the consummation of the
Acquisition, which was dependent, among other things, upon the consummation of
the Senior Credit Facility. See "Description of Certain Indebtedness."
 
                                      29

<PAGE>
 
                                CAPITALIZATION
 
  The following table sets forth the combined capitalization of the Systems
and Holdings and Renaissance Media as of December 31, 1997 and March 31, 1998,
and the pro forma capitalization of the Company as of December 31, 1997 and
March 31, 1998 as adjusted to give effect to the Transactions. This table
should be read in conjunction with "Selected and Other Financial Data," "Pro
Forma Financial Data," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and the financial statements and the
notes thereto included elsewhere in this Prospectus.
 

<TABLE>
<CAPTION>
                               AS OF DECEMBER 31, 1997                 AS OF MARCH 31, 1998
                         ------------------------------------  -------------------------------------
                                     HOLDINGS                               HOLDINGS
                                        AND                                   AND
                                    RENAISSANCE                           RENAISSANCE
                                       MEDIA                                 MEDIA
                          SYSTEMS    COMBINED                   SYSTEMS   CONSOLIDATED
                         HISTORICAL HISTORICAL  PRO FORMA (1)  HISTORICAL  HISTORICAL  PRO FORMA (1)
                         ---------- ----------- -------------  ---------- ------------ -------------
                                                       (IN THOUSANDS)
<S>                      <C>        <C>         <C>            <C>        <C>          <C>
Long-term debt:
  Senior Credit Facility
   (2)..................  $    --     $   --      $110,000      $    --     $   --       $110,000
  Notes offered hereby,
   at initial accreted
   value................       --         --       100,012           --         --        100,012
                          --------    -------     --------      --------    -------      --------
  Total long-term debt..       --         --       210,012           --         --        210,012
                          --------    -------     --------      --------    -------      --------
Equity:
  Total net
   assets/equity .......   224,546     15,037      108,537(3)    222,008     15,114       108,614(3)
                          --------    -------     --------      --------    -------      --------
    Total
     capitalization.....  $224,546    $15,037     $318,549      $222,008    $15,114      $318,626
                          ========    =======     ========      ========    =======      ========
</TABLE>

- --------
(1) See "Pro Forma Financial Data."
(2) Does not reflect the $40.0 million of financing available under the
    Revolver. See "Description of Certain Indebtedness."
(3) Consists in part of the Equity Contributions to Holdings which were
    contributed to the Company as equity.
 
                                      30

<PAGE>
 
                       SELECTED FINANCIAL AND OTHER DATA
 
  The selected financial and other data set forth below were derived from the
combined financial statements of the Systems acquired in the Acquisition. The
financial data for the Systems as of December 31, 1996 and 1997 and for the
years ended December 31, 1995, 1996 and 1997 were derived from the combined
financial statements of the Systems which have been audited by Ernst & Young
LLP, independent auditors. The financial data for the Systems as of December
31, 1993, 1994, 1995 and March 31, 1997 and 1998 and for the years ended
December 31, 1993 and 1994 and the three months ended March 31, 1997 and 1998
were derived from unaudited combined financial statements of the Systems
which, in the opinion of management, include all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of the
results of operations and financial condition of the Systems for such periods.
The selected financial and other data set forth below should be read in
conjunction with, and are qualified in their entirety by, "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the financial statements and notes thereto include elsewhere in this
Prospectus.
 

<TABLE>
<CAPTION>
                                                                             THREE MONTHS
                                   YEAR ENDED DECEMBER 31,                  ENDED MARCH 31,
                         ------------------------------------------------  ------------------
                           1993      1994      1995      1996      1997      1997      1998
                         --------  --------  --------  --------  --------  --------  --------
                               (DOLLARS IN THOUSANDS, EXCEPT PER SUBSCRIBER DATA)
                             (PREDECESSOR) (1)         (INCLUDED IN TWI    (INCLUDED IN TWI
                                                         CABLE, INC.)        CABLE, INC.)
<S>                      <C>       <C>       <C>       <C>       <C>       <C>       <C>
STATEMENT OF OPERATIONS
 DATA:
 Revenues (2)........... $ 38,125  $ 40,168  $ 43,549  $ 47,327  $ 50,987  $ 12,446  $ 13,973
 System operating
  expenses (2) (3)......   17,618    18,656    20,787    22,626    23,142     5,778     6,013
 Non-system operating
  expenses (4)..........      765     2,032     2,200     2,733     2,782       695       703
 Depreciation,
  amortization and loss
  (gain) on disposal of
  fixed assets..........   16,305    16,583    17,610    18,116    19,317     4,672     4,611
                         --------  --------  --------  --------  --------  --------  --------
 Operating income.......    3,437     2,897     2,952     3,852     5,746     1,301     2,646
                         --------  --------  --------  --------  --------  --------  --------
 Interest expense.......  (12,058)  (11,603)  (11,871)      --        --        --        --
 Income tax benefit
  (expense).............    3,449     3,482     3,567    (1,502)   (2,262)     (659)   (1,191)
                         --------  --------  --------  --------  --------  --------  --------
 Net (loss) income ..... $ (5,172) $ (5,224) $ (5,352) $  2,350  $  3,484  $    642  $  1,455
                         ========  ========  ========  ========  ========  ========  ========
OTHER FINANCIAL DATA:
 Net cash provided by
  operations ...........     N.A.      N.A.  $  7,523  $ 23,088  $ 23,604  $  4,787  $  6,021
 EBITDA (5)............. $ 19,742  $ 19,480    20,562    21,968    25,063     5,973     7,257
 System cash flow (6)...   20,507    21,512    22,762    24,701    27,845     6,668     7,960
 Capital expenditures...    7,777     9,152     7,376     8,170     6,390     1,561       456
 EBITDA margin (2)......     51.8%     48.5%     47.2%     46.4%     49.2%     48.0%     51.9%
 Ratio of earnings to
  fixed charges (7).....      --        --        --        --        --        --        --
OTHER DATA:
 Homes passed (at period
  end) (8)..............  141,402   143,248   145,148   175,522   178,449   176,617   179,402
 Basic subscribers (at
  period end)...........  109,026   115,075   120,340   123,203   126,558   125,016   127,191
 Basic penetration (at
  period end) (8).......     77.1%     80.3%     82.9%     70.2%     70.9%     70.8%     70.9%
 Premium units (at
  period end)...........   56,764    62,434    60,462    64,716    64,963    63,890    61,053
 Premium penetration (at
  period end)...........     52.1%     54.3%     50.2%     52.5%     51.3%     51.1%     48.0%
 Average monthly revenue
  per basic
  subscriber (9)........ $  29.78  $  29.87  $  30.83  $  32.39  $  34.02  $  33.43  $  36.71
 Annual EBITDA per basic
  subscriber (10).......   185.03    173.85    174.69    180.40    200.70    192.51    228.79
 Annual system cash flow
  per basic
  subscriber (11) ......   192.20    191.98    193.38    202.85    222.97    214.91    250.96
 Annual capital
  expenditures per basic
  subscriber (12).......    72.89     81.68     62.66     67.09     51.17     50.31     14.38
BALANCE SHEET DATA (AT
 PERIOD END):
 Cash and cash
  equivalents........... $    322  $    419  $    566  $    570  $  1,371      N.A.  $  2,943
 Property, plant and
  equipment, net........   32,297    34,739    34,426    36,966    36,944      N.A.    35,994
 Total assets...........  148,405   142,316   132,905   300,049   288,914      N.A.   286,971
 Total debt.............  133,520   130,068   128,328       --        --       N.A.       --
 Net (liabilities)
  assets ...............  (43,716)  (48,939)  (54,292)  237,475   224,546      N.A.   222,008
</TABLE>

 
                                      31

<PAGE>
 
- --------
 (1) Prior to January 4, 1996, the Systems were owned by certain subsidiaries
     of CVI.
 (2) Prior to 1997, franchise fees were included in both revenues and
     expenses. In 1997, the Systems began itemizing franchise fees on
     subscriber billing invoices and recorded such fees as an offset to system
     operating expenses. Had the itemization process occurred prior to 1997,
     the estimated amount of franchise fees that would have been reflected as
     an offset to System operating expenses and not included in revenues in
     1993, 1994, 1995 and 1996 would have been approximately $1.0 million,
     $1.3 million, $1.4 million and $1.5 million, respectively. The effect of
     this change on EBITDA margin would have resulted in EBITDA margins of
     53.0%, 50.1%, 48.9% and 48.0% for the years 1993, 1994, 1995 and 1996,
     respectively.
 (3) Represents all system operating expenses and excludes management fees and
     corporate overhead.
 (4) Represents management fees and corporate overhead.
 (5) EBITDA represents income before interest, income taxes and depreciation,
     amortization and loss (gain) on disposal of fixed assets. EBITDA is not
     intended to represent cash flow from operations or net (loss) income as
     defined by generally accepted accounting principles and should not be
     considered as a measure of liquidity or an alternative to, or more
     meaningful than, operating income or operating cash flow as an indication
     of the Company's operating performance. Moreover, EBITDA is not a
     standardized measure and may be calculated in a number of ways.
     Accordingly, the EBITDA information provided may not be comparable to
     other similarly titled measures provided by other companies. EBITDA is
     included herein because management believes that certain investors find
     it a useful tool for measuring the Company's ability to service its
     indebtedness.
 (6) Represents EBITDA before non-system operating expenses. System cash flow
     should not be considered as a measure of liquidity or an alternative to,
     or more meaningful than, operating cash flow as defined by generally
     accepted accounting principles.
 (7) For purposes of this calculation, "earnings" is defined as earnings
     before fixed charges. Fixed charges consist of interest expense,
     amortization of deferred financing costs, income taxes and the portion of
     rent expense under operating leases representative of interest. For the
     years ended December 31, 1993, 1994 and 1995, the Systems' earnings
     before fixed charges were insufficient to cover their fixed charges by
     $8.7 million, $9.0 million and $9.1 million, respectively. For the years
     ended December 31, 1996 and 1997, the Systems did not have indebtedness
     and a ratio of earnings to fixed charges would not be meaningful.
 (8) Based on a homes passed audit conducted in 1996 which showed an increase
     in homes passed of approximately 27,000 homes, the homes passed may be
     understated in 1993, 1994 and 1995 and basic penetration may be
     overstated for such periods.
 (9) Reflects revenues for the applicable period divided by the average number
     of basic subscribers for the applicable period divided by the number of
     months in the applicable period.
(10) Reflects EBITDA for the applicable period divided by the average number
     of basic subscribers for the applicable period. For purposes of this
     calculation, EBITDA was annualized for the three-month period ended March
     31, 1998 and 1997.
(11) Reflects system cash flow for the applicable period divided by the
     average number of basic subscribers for the applicable period. For
     purposes of this calculation, cash flow was annualized for the three-
     month period ended March 31, 1998 and 1997.
(12) Reflects capital expenditures for the applicable period divided by the
     average number of basic subscribers for the applicable period. For
     purposes of this calculation, capital expenditures were annualized for
     the three-month period ended March 31, 1998 and 1997.
 
                                      32

<PAGE>
 
                           PRO FORMA FINANCIAL DATA
 
  Holdings and Renaissance Media were formed in November 1997. The Obligors
and the Guarantor were formed in 1998. The following unaudited Pro Forma
Combined (as of and for the year ended December 31, 1997) and Consolidated (as
of and for the three months ended March 31, 1998) Financial Statements have
been prepared to give effect to the formation of the Obligors and the
Guarantor and to the Transactions, including the Offering.
 
  The pro forma adjustments are based upon available information and certain
assumptions that the Company believes are reasonable under the circumstances.
Pro forma adjustments are applied to the historical financial statements of
the Systems to account for the Acquisition under the purchase method of
accounting. Under purchase accounting, the total purchase price for the
Acquisition will be allocated to the Systems' assets and liabilities based on
their relative fair values. Allocations are subject to valuations as of the
date of the Acquisition based on appraisals and other studies which are not
yet completed. Accordingly, the final allocations may be different from the
amounts reflected herein.
 
  The unaudited pro forma combined and consolidated statement of operations,
for the year ended December 31, 1997 and the three months ended March 31,
1998, respectively, gives effect to the Transactions as if they had occurred
as of January 1, 1997 and 1998. The unaudited pro forma combined balance sheet
as of December 31, 1997 and the unaudited pro forma consolidated balance sheet
as of March 31, 1998 have been prepared as if the Transactions were
consummated as of such dates. The pro forma financial statements are provided
for informational purposes only and do not purport to be indicative of the
results which would have actually been obtained had the Transactions been
completed on the dates indicated or which may be expected to occur in the
future. The pro forma financial statements should be read in conjunction with
"Selected Financial and Other Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the historical financial
statements and notes thereto included elsewhere in this Prospectus.
 
                                      33

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
                   UNAUDITED PRO FORMA COMBINED BALANCE SHEET
                               DECEMBER 31, 1997
                                 (IN THOUSANDS)
 

<TABLE>
<CAPTION>
                                             HOLDINGS
                                                AND
                                            RENAISSANCE
                                               MEDIA
                                  SYSTEMS    COMBINED
                                 HISTORICAL HISTORICAL  ADJUSTMENTS    PRO FORMA
                                 ---------- ----------- -----------    ---------
<S>                              <C>        <C>         <C>            <C>
             ASSETS
Cash and cash equivalents.......  $  1,371    $   903    $  1,000 (1)  $  1,962
                                                               59 (2)
                                                           (1,371)(3)
Escrow deposit--Asset Purchase
 Agreement......................       --      15,059     (15,059)(2)       --
Receivables, net................     1,120        --         (544)(1)       576
Prepaid expenses and other
 assets.........................       183          5         269 (1)       457
Property, plant and equipment,
 net............................    36,944        --       28,272 (4)    65,216
Cable television franchises,
 net............................   198,913        --       36,763 (4)   237,676
                                                            2,000 (5)
Goodwill and other intangibles,
 net............................    50,383      1,036       7,012 (5)    16,656
                                                          (41,775)(4)
                                  --------    -------    --------      --------
  Total assets..................  $288,914    $17,003    $ 16,626      $322,543
                                  ========    =======    ========      ========
       LIABILITIES AND NET
     ASSETS/MEMBERS' EQUITY
Due to Management Investors.....  $    --     $ 1,000    $ (1,000)(6)  $    --
Accounts payable................       652        --         (652)(3)       --
Accrued programming expenses....       904        --         (904)(3)       --
Accrued franchise fees..........       835        --         (218)(1)       617
Subscriber advance payments and
 deposits.......................       407        --          186 (1)       593
Deferred income taxes...........    60,601        --      (60,601)(3)       --
Other liabilities...............       969        966        (151)(1)     2,784
                                                            1,000 (5)
Senior Credit Facility..........       --         --      110,000 (7)   110,000
Notes, at initial accreted
 value..........................       --         --      100,012 (8)   100,012
                                  --------    -------    --------      --------
  Total liabilities.............    64,368      1,966     147,672       214,006
                                  --------    -------    --------      --------
Total net assets................   224,546        --     (224,546)(3)       --
Total members' equity...........       --      15,037      93,500 (6)   108,537
                                  --------    -------    --------      --------
  Total liabilities and net
   assets/members' equity.......  $288,914    $17,003    $ 16,626      $322,543
                                  ========    =======    ========      ========
</TABLE>

 
          See accompanying notes to pro forma combined balance sheet.
 
                                       34

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
              NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
                               DECEMBER 31, 1997
                                (IN THOUSANDS)
 
  The unaudited pro forma combined balance sheet gives effect to the following
pro forma adjustments. The approximate sources and uses of funds for the
Transactions (excluding the issuance of equity to Time Warner) are as follows:
 

<TABLE>
   <S>                                                                 <C>
   SOURCES OF FUNDS
     Gross proceeds of the Notes...................................... $100,012
     Borrowings under the Term Loans..................................  110,000
     Cash Equity Contributions........................................   99,000
     Working Capital Adjustment.......................................    1,000
                                                                       --------
       Total cash sources............................................. $310,012
                                                                       ========
   USE OF FUNDS
     Cash purchase price for the Systems.............................. $300,000
     Estimated transaction fees.......................................   10,012
                                                                       --------
       Total cash uses................................................ $310,012
                                                                       ========
</TABLE>

 
  (1) Pursuant to the Asset Purchase Agreement, the Company is required to
      assume certain working capital items, including accounts receivable,
      prepaid expenses and certain accrued liabilities. At December 31, 1997,
      the net effect of these working capital items (as of the Closing Date)
      was a net liability of $1,000, which would have resulted in a cash
      payment from Time Warner of $1,000, computed as follows:
 

<TABLE>
       <S>                                                               <C>
       Accounts receivable.............................................. $  576
       Prepaid expenses/other assets....................................    452
                                                                         ------
         Total assets...................................................  1,028
                                                                         ------
       Accrued franchise fees...........................................    617
       Subscriber advanced payments and deposits........................    593
       Other accrued liabilities........................................    818
                                                                         ------
         Total liabilities..............................................  2,028
                                                                         ------
       Net liabilities.................................................. $1,000
                                                                         ======
</TABLE>

 
  (2) Represents payment of the $15,000 escrow deposit to Time Warner under
      the Asset Purchase Agreement and the payment of the $59 accrued
      interest on the escrow deposit to Renaissance Media.
 
  (3) Pursuant to the Asset Purchase Agreement, no assets or liabilities
      other than those reflected in footnote (1) above will be assumed by
      Renaissance Media. Pursuant to the Asset Purchase Agreement,
      Renaissance Media is indemnified for non-assumed liabilities.
 
 
                                      35

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
       NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET--(CONTINUED)
                               DECEMBER 31, 1997
                                (IN THOUSANDS)
 
  (4) To allocate the purchase price to the assets acquired as follows:
 

<TABLE>
       <S>                                                             <C>
       Estimated purchase price....................................... $309,500
                                                                       ========
       Historical net book value as of December 31, 1997 of:
         Property, plant and equipment................................ $ 36,944
         Cable television franchises..................................  198,913
         Goodwill and other intangibles...............................   50,383
                                                                       --------
                                                                       $286,240
       Estimated write up (down) of:
         Property, plant and equipment................................ $ 28,272
         Cable television franchises..................................   36,763
         Goodwill and other intangibles...............................  (41,775)
                                                                       --------
                                                                       $309,500
                                                                       ========
</TABLE>

 
    The estimated purchase price does not include the working capital
    adjustment described in Note (1) or the expenses of the Transactions
    estimated at $10,012 described in Note (5).
 
  (5) Represents the debt issuance costs associated with the issuance of the
      Notes, the Senior Credit Facility and the other fees and expenses
      related to the Transactions.
 
  (6) Represents the balance of Equity Contributions, including the equity
      ownership interest to be issued to Time Warner in the Acquisition, and
      the conversion of the advances from the Management Investors to equity.
 
  (7) Represents borrowings under the Term Loans.
 
  (8) Represents the issuance of $100,012 initial accreted value of the
      Notes.
 
                                      36

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
                 UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 1998
                                 (IN THOUSANDS)
 

<TABLE>
<CAPTION>
                                             HOLDINGS
                                                AND
                                            RENAISSANCE
                                               MEDIA
                                  SYSTEMS    COMBINED
                                 HISTORICAL HISTORICAL  ADJUSTMENTS    PRO FORMA
                                 ---------- ----------- -----------    ---------
<S>                              <C>        <C>         <C>            <C>
             ASSETS
Cash and cash equivalents.......  $  2,943    $   746    $  1,000 (1)  $  1,989
                                                              243 (2)
                                                           (2,943)(3)
Escrow deposit--Asset Purchase
 Agreement......................       --      15,243     (15,243)(2)       --
Receivables, net................     1,502        --         (926)(1)       576
Prepaid expenses and other
 assets.........................       327         13         125 (1)       465
Property, plant and equipment,
 net............................    35,994         55      29,222 (4)    65,271
Cable television franchises,
 net............................   196,153        --       39,523 (4)   237,676
                                                            2,000 (5)
Goodwill and other intangibles,
 net............................    50,052      2,626     (41,444)(4)    16,657
                                                            5,423 (5)
                                  --------    -------    --------      --------
  Total assets..................  $286,971    $18,683    $ 16,980      $322,634
                                  ========    =======    ========      ========
       LIABILITIES AND NET
     ASSETS/MEMBERS' EQUITY
Due to Management Investors.....  $    --     $ 1,000    $ (1,000)(6)  $    --
Accounts payable................        63          3         (63)(3)         3
Accrued programming expenses....       978        --         (978)(3)       --
Accrued franchise fees..........       564        --           52 (1)       616
Subscriber advance payments and
 deposits.......................       458        --          135 (1)       593
Deferred income taxes...........    61,792        --      (61,792)(3)       --
Other liabilities...............     1,108      2,566        (290)(1)     2,796
                                                             (588)(5)
Senior Credit Facility..........       --         --      110,000 (7)   110,000
Notes, at initial accreted
 value..........................       --         --      100,012 (8)   100,012
                                  --------    -------    --------      --------
  Total liabilities.............    64,963      3,569     145,488       214,020
                                  --------    -------    --------      --------
Total net assets................   222,008        --     (222,008)(3)       --
Total members' equity...........       --      15,114      93,500 (6)   108,614
                                  --------    -------    --------      --------
  Total liabilities and net
   assets/members' equity.......  $286,971    $18,683    $ 16,980      $322,634
                                  ========    =======    ========      ========
</TABLE>

 
          See accompanying notes to pro forma combined balance sheet.
 
                                       37

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
            NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
                                MARCH 31, 1998
                                (IN THOUSANDS)
 
  The unaudited pro forma combined balance sheet gives effect to the following
pro forma adjustments. The approximate sources and uses of funds for the
Transactions (excluding the issuance of equity to Time Warner) are as follows:
 

<TABLE>
   <S>                                                                 <C>
   SOURCES OF FUNDS
     Gross proceeds of the Notes...................................... $100,012
     Borrowings under the Term Loans..................................  110,000
     Cash Equity Contributions........................................   99,000
     Working Capital Adjustments......................................    1,000
                                                                       --------
       Total cash sources............................................. $310,012
                                                                       ========
   USE OF FUNDS
     Cash purchase price for the Systems.............................. $300,000
     Estimated transaction fees.......................................   10,012
                                                                       --------
       Total cash uses................................................ $310,012
                                                                       ========
</TABLE>

 
  (1) Pursuant to the Asset Purchase Agreement, the Company is required to
      assume certain working capital items, including accounts receivable,
      prepaid expenses and certain accrued liabilities. The net effect of
      these working capital items as of the closing date was a net liability
      of $1,000, which would have resulted in a cash payment from Time Warner
      of $1,000, computed as follows:
 

<TABLE>
       <S>                                                               <C>
       Accounts receivable.............................................. $  576
       Prepaid expenses/other assets....................................    452
                                                                         ------
         Total assets...................................................  1,028
                                                                         ------
       Accrued franchise fees...........................................    617
       Subscriber advanced payments and deposits........................    593
       Other accrued liabilites.........................................    818
                                                                         ------
         Total liabilities..............................................  2,028
                                                                         ------
       Net liabilities.................................................. $1,000
                                                                         ======
</TABLE>

 
  (2) Represents payment of the $15,000 escrow deposit to Time Warner under
      the Asset Purchase Agreement and the payment of the $243 accrued
      interest on the escrow deposit to Renaissance Media.
 
  (3) Pursuant to the Asset Purchase Agreement, no assets or liabilities
      other than those reflected in footnote (1) above will be assumed by
      Renaissance Media. Pursuant to the Asset Purchase Agreement,
      Renaissance Media is indemnified for non-assumed liabilities.
 
 
                                      38

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
     NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET--(CONTINUED)
                                MARCH 31, 1998
                                (IN THOUSANDS)
 
  (4) To allocate the purchase price to the assets acquired as follows:
 

<TABLE>
       <S>                                                             <C>
       Estimated purchase price....................................... $309,500
                                                                       ========
       Historical net book value as of March 31, 1998 of:
         Property, plant and equipment................................ $ 35,994
         Cable television franchises..................................  196,153
         Goodwill and other intangibles...............................   50,052
                                                                       --------
                                                                       $282,199
       Estimated write up (down) of:
         Property, plant and equipment................................ $ 29,222
         Cable television franchises..................................   39,523
         Goodwill and other intangibles...............................  (41,444)
                                                                       --------
                                                                       $309,500
                                                                       ========
</TABLE>

 
    The estimated purchase price does not include the working capital
    adjustment described in Note (1) or the expenses of the Transactions
    estimated at $10,012 described in Note (5).
 
  (5) Represents the debt issuance costs associated with the issuance of the
      Notes, the Senior Credit Facility and the other fees and expenses
      related to the Transactions.
 
  (6) Represents the balance of Equity Contributions, including the equity
      ownership interest to be issued to Time Warner in the Acquisition, and
      the conversion of the advances from the Management Investors to equity.
 
  (7) Represents borrowings under the Term Loans.
 
  (8) Represents the issuance of $100,012 initial accreted value of the
      Notes.
 
                                      39

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
              UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 1997
                                 (IN THOUSANDS)
 

<TABLE>
<CAPTION>
                                             HOLDINGS
                                                AND
                                            RENAISSANCE
                                  SYSTEMS      MEDIA
                                 HISTORICAL HISTORICAL  ADJUSTMENTS    PRO FORMA
                                 ---------- ----------- -----------    ---------
<S>                              <C>        <C>         <C>            <C>
Revenues........................  $50,987     $    65    $    (65)(1)  $ 50,987
Costs and expenses:
  System operating expenses.....   23,142          25         990 (2)    24,157
  Non-System operating
   expenses.....................    2,782         --          --          2,782
  Depreciation, amortization and
   loss (gain) on disposal of
   fixed assets.................   19,317         --        1,031 (3)    26,683
                                                            6,335 (4)
                                  -------     -------    --------      --------
    Total costs and expenses....   45,241          25       8,356        53,622
                                  -------     -------    --------      --------
Operating income (loss).........    5,746          40      (8,421)       (2,635)
Interest expense, net...........      --            4      19,178 (5)    19,117
                                                              (65)(1)
                                  -------     -------    --------      --------
Income (loss) before income
 taxes..........................    5,746          36     (27,534)      (21,752)
Income tax expense..............    2,262         --       (2,262)(6)       --
                                  -------     -------    --------      --------
    Net income (loss)...........  $ 3,484     $    36    $(25,272)     $(21,752)
                                  =======     =======    ========      ========
</TABLE>

 
 
     See accompanying notes to pro forma combined statement of operations.
 
                                       40

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
         NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1997
                                (IN THOUSANDS)
 
  The unaudited pro forma combined statement of operations gives effect to the
following pro forma adjustments:
 
  (1) Reflects the reclassification of Renaissance Media's interest income
      from revenues to interest expense, net.
 
  (2) Reflects the estimated additional programming expenses, which would
      have been incurred if the Systems had been operating under the program
      management agreement with Time Warner.
 
  (3) Represents the amortization of debt issuance costs and organization
      costs over periods ranging from five to ten years.
 
  (4) Represents the depreciation and amortization of the write up (down) of
      property, plant and equipment, franchise assets and goodwill arising
      from the allocation of the purchase price to the Systems' assets under
      the purchase method of accounting. Pro forma depreciation amounts have
      been computed based on an estimate of the composite useful life of such
      assets (approximately 11 years). Pro forma amortization amounts have
      been computed based on an estimate of the useful lives of franchise
      assets and goodwill (approximately 15 years and 25 years,
      respectively). The net adjustment was computed as follows:
 

<TABLE>
   <S>                                                                <C>
       Pro forma depreciation of property, plant and equipment....... $  9,514
       Pro forma amortization of franchise assets and goodwill.......   16,138
       Elimination of historical depreciation and amortization.......  (19,317)
                                                                      --------
       Pro forma increase in depreciation and amortization........... $  6,335
                                                                      ========
 
  (5) Reflects the following interest expense that would have been incurred
      based on the Acquisition financing:
 
       Interest on the Term Loans at an assumed weighted average
        interest
        rate of 8.11% (including commitment fees of $200)............ $  8,877
       Interest on the Notes.........................................   10,250
       Amortization of interest rate cap agreement...................       51
                                                                      --------
                                                                      $ 19,178
                                                                      ========
</TABLE>

 
    For each .25% change in the assumed interest rate on the Term Loans,
    pro forma interest expense would change by approximately $275.
 
  (6) Represents elimination of income tax expense because the Company will
      be treated as a partnership for federal income tax purposes.
 
 
                                      41

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                   FOR THE THREE MONTHS ENDED MARCH 31, 1998
                                 (IN THOUSANDS)
 

<TABLE>
<CAPTION>
                                             HOLDINGS
                                                AND
                                            RENAISSANCE
                                  SYSTEMS      MEDIA
                                 HISTORICAL HISTORICAL  ADJUSTMENTS   PRO FORMA
                                 ---------- ----------- -----------   ---------
<S>                              <C>        <C>         <C>           <C>
Revenues........................  $13,973     $   193     $  (193)(1)  $13,973
Costs and expenses:
  System operating expenses.....    6,013         --          248 (2)    6,261
  Non-System operating
   expenses.....................      703         101         --           804
  Depreciation, amortization and
   loss (gain) on disposal of
   fixed assets.................    4,611           1         257 (3)    6,671
                                                            1,802 (4)
                                  -------     -------     -------      -------
    Total costs and expenses....   11,327         102       2,307       13,736
                                  -------     -------     -------      -------
Operating income................    2,646          91      (2,500)         237
Interest expense, net...........      --           13       4,792 (5)    4,612
                                                             (193)(1)
                                  -------     -------     -------      -------
Income (loss) before income
 taxes..........................    2,646          78      (7,099)      (4,375)
Income tax expense..............    1,191         --       (1,191)(6)      --
                                  -------     -------     -------      -------
    Net income (loss)...........  $ 1,455     $    78     $(5,908)     $(4,375)
                                  =======     =======     =======      =======
</TABLE>

 
 
          See accompanying notes to pro forma statement of operations.
 
                                       42

<PAGE>
 
                          RENAISSANCE MEDIA GROUP LLC
 
       NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                   FOR THE THREE MONTHS ENDED MARCH 31, 1998
                                (IN THOUSANDS)
 
  The unaudited pro forma combined statement of operations gives effect to the
following pro forma adjustments:
 
  (1) Reflects the reclassification of Renaissance Media's interest income
      from revenues to interest expense, net.
 
  (2) Reflects the estimated additional programming expenses, which would
      have been incurred if the Systems had been operating under the program
      management agreement with Time Warner.
 
  (3) Represents the amortization of debt issuance costs and organization
      costs over periods ranging from five to ten years.
 
  (4) Represents the depreciation and amortization of the write up (down) of
      property, plant and equipment, franchise assets and goodwill arising
      from the allocation of the purchase price to the Systems' assets under
      the purchase method of accounting. Pro forma depreciation amounts have
      been computed based on an estimate of the composite useful life of such
      assets (approximately 11 years). Pro forma amortization amounts have
      been computed based on an estimate of the useful lives of franchise
      assets and goodwill (approximately 15 years and 25 years,
      respectively). The net adjustment was computed as follows:
 

<TABLE>
   <S>                                                                 <C>
       Pro forma depreciation of property, plant and equipment........ $ 2,378
       Pro forma amortization of franchise assets and goodwill........   4,035
       Elimination of historical depreciation and amortization........  (4,611)
                                                                       -------
       Pro forma increase in depreciation and amortization............ $ 1,802
                                                                       =======
 
  (5) Reflects the following interest expense that would have been incurred
      based on the Acquisition financing:
 
       Interest on the Term Loans at an assumed weighted average
        interest
        rate of 8.11% (including commitment fees of $50).............. $ 2,279
       Interest on the Notes..........................................   2,500
       Amortization of interest rate cap agreement....................      13
                                                                       -------
                                                                       $ 4,792
                                                                       =======
</TABLE>

 
    For each .25% change in the assumed interest rate on the Term Loans,
    pro forma interest expense would change by approximately $69 .
 
  (6) Represents elimination of income tax expense because the Company will
      be treated as a partnership for federal income tax purposes.
 
 
                                      43

<PAGE>
 

        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS
 
OVERVIEW
 
  Holdings was formed on November 5, 1997 and entered into the Asset Purchase
Agreement dated November 14, 1997 with Time Warner to acquire the Systems. The
Acquisition was consummated on April 9, 1998. Holdings was initially
capitalized with a $15.0 million capital contribution from MSCPIII, MSCP
Investors and MSCI and received a $1.0 million advance capital contribution
from the Management Investors. The $16.0 million in funds received by Holdings
was utilized to fund the escrow deposit of $15.0 million required under the
Asset Purchase Agreement and to provide working capital. For the period from
inception through March 31, 1998, Holdings has earned interest income on the
escrow deposit and the working capital fund and has incurred costs, primarily
related to the Acquisition. Prior to the consummation of the Acquisition,
Holdings assigned all of its interest in the Asset Purchase Agreement to
Renaissance Media, and all assets and liabilities of Holdings became assets
and liabilities of Renaissance Media. The Systems are clustered in southern
Louisiana, western Mississippi and western Tennessee and, as of March 31,
1998, passed 179,402 homes, served 127,191 basic subscribers and had 61,053
premium service units. The Company is the 4th largest cable television system
operator in Louisiana and the 5th largest cable television system operator in
Tennessee based upon the Systems' numbers of subscribers at March 31, 1998.
 
  The Systems were owned and operated by CVI or related entities prior to the
acquisition of CVI by Time Warner on January 4, 1996 and were owned and
operated by Time Warner since that date until April 9, 1998. As a result, the
assets of the Systems have been reflected utilizing Time Warner's basis from
January 4, 1996 to April 9, 1998 and at CVI's basis prior to January 4, 1996.
 
  The Company intends to increase its subscriber base and operating cash flow
by pursuing cable television system acquisitions, improving and upgrading its
technical plant and expanding its service offerings. The Company will pursue
selective acquisitions in markets which are contiguous to the Systems and in
non-contiguous mid-sized markets serving more than 30,000 subscribers where
local or regional clusters can be formed. The Company believes that by
clustering systems it will be able to realize economies of scale, such as
reduced payroll, reduced billing and technical costs per subscriber, reduced
advertising sales costs, increased local advertising sales, more efficient
roll-out and utilization of new technologies and consolidation of its customer
service functions. The Company plans to improve and upgrade its technical
plant, which should allow it to provide a wide array of new services and
service tiers, as well as integrate new interactive features into advanced
analog and digital set-top consumer equipment. The Company also plans to
develop and provide new cable and broadband services and develop ancillary
businesses including digital video and high speed Internet access services.
 
  Revenues. The Systems' revenues are primarily attributable to subscription
fees charged to subscribers for basic and premium cable television programming
services. Basic revenue consists of monthly subscription fees for basic and
CPST services. Multiple dwelling unit accounts typically are offered a bulk
rate in exchange for single point billing and basic service to all units.
Premium revenue consists of monthly subscription fees for programming provided
on a per-channel basis. In addition, other revenue is derived from new product
tiers, pay-per-view fees, installation and reconnection fees charged to
subscribers to receive service, monthly equipment rental fees, advertising
revenue and commissions related to the sale of goods by home shopping services
and in-home wiring maintenance contracts. The table below sets forth for the
periods indicated basic, premium and other revenues expressed as a percentage
of total revenues:
 

<TABLE>
<CAPTION>
                                                                      THREE
                                                                     MONTHS
                                                                      ENDED
                                        YEAR ENDED DECEMBER 31,     MARCH 31,
                                        -------------------------  ------------
                                         1995     1996     1997    1997   1998
                                        -------  -------  -------  -----  -----
<S>                                     <C>      <C>      <C>      <C>    <C>
  Basic................................    65.9%    68.4%    70.6%  70.6%  71.4%
  Premium..............................    14.7     13.4     12.8   12.7   11.6
  Other................................    19.4     18.2     16.6   16.7   17.0
                                        -------  -------  -------  -----  -----
  Revenues.............................   100.0%   100.0%   100.0% 100.0% 100.0%
                                        =======  =======  =======  =====  =====
</TABLE>

 
                                      44

<PAGE>
 
  Basic revenue has been increasing as a percentage of total revenues since
1995 due primarily to increases in subscription rates offset by a change in
the treatment of franchise fees. Prior to 1997, franchise fees were included
in both revenues and expenses. In 1997, the Systems began itemizing franchise
fees on subscriber billing invoices and recorded such fees only as an offset
to System operating expenses. Premium revenues have been decreasing as a
percentage of total revenues due to marginal growth in this revenue category.
Other revenue has been decreasing as a percentage of total revenues due
primarily to the elimination in 1996 and 1995 of additional outlet charges,
offset in part, by increases in other revenue items.
 
  System Operating Expenses. System operating expenses are comprised of
variable operating expenses and selling, service and administrative expenses
directly attributable to the Systems. Variable operating expenses consist of
costs directly attributable to providing cable services to customers and
therefore generally vary directly with revenues. Variable operating expenses
include programming fees paid to suppliers of programming included in the
Systems' basic and premium cable television services, as well as expenses
related to copyright fees, franchise fees and bad debt expenses. Programming
costs have historically increased at rates in excess of inflation due, in
part, to improvements in the quality of programming. Cable programming costs
are expected to continue to increase due to additional programming being
provided to customers, inflationary increases and other factors. Programming
costs as a percentage of revenue increased to 20.5% in 1997 from 20.1% in 1996
and to 21.0% in the three months ended March 31, 1998 from 20.0% the three
months ended March 31, 1997. The Systems have lost certain programming
discounts that were realized as a result of being part of a large MSO and, as
a result, the Company expects that programming costs will increase as a
percentage of revenues. See "Pro Forma Financial Data." Selling, service and
administrative expenses directly attributable to the Systems include the
salaries and wages of field and office personnel, plant operating expenses,
office and administrative expenses and sales costs.
 
  Non-System Operating Expenses. Non-system operating expenses consist
primarily of corporate related expenses, which are not directly attributable
to the Systems. These expenses include personnel costs, rent, legal, audit,
tax and other corporate overhead costs.
 
  Depreciation, Amortization and Loss (Gain) on Disposal of Fixed
Assets. Depreciation, amortization and loss (gain) on disposal of fixed assets
include depreciation of the Systems' network and equipment, amortization of
goodwill and intangibles assets and losses or gains recognized on the disposal
of assets. Management expects depreciation, amortization and loss (gain) on
disposal of fixed assets to increase as a result of the purchase accounting
adjustments arising in connection with the Acquisition. See "Pro Forma
Financial Data."
 
  The table below sets forth for the periods indicated certain data regarding
expenses expressed as a percentage of total revenues:
 

<TABLE>
<CAPTION>
                                                               THREE MONTHS
                                   YEAR ENDED DECEMBER 31,    ENDED MARCH 31,
                                   -------------------------  ----------------
                                    1995     1996     1997     1997     1998
                                   -------  -------  -------  -------  -------
   <S>                             <C>      <C>      <C>      <C>      <C>
   Revenues......................    100.0%   100.0%   100.0%   100.0%   100.0%
     System operating expenses...     47.7     47.8     45.4     46.4     43.2
     Non-system operating
      expenses...................      5.1      5.8      5.5      5.6      5.0
     Depreciation, amortization
      and loss (gain) on disposal
      of fixed assets............     40.4     38.3     37.9     37.5     32.9
      Operating income...........      6.8      8.1     11.2     10.5     18.9
     Interest expense............     27.3      --       --       --       --
     Income tax (benefit)
      expense....................     (8.2)     3.2      4.4      5.3      8.5
     Net (loss) income...........    (12.3)     4.9      6.8      5.2     10.4
</TABLE>

 
  The Systems have not had any material acquisitions during these periods and
thus the growth since 1995 represents internal growth resulting from
subscriber additions, rate increases and additional services purchased by
subscribers and advertisers.
 

<TABLE>
<S>  <C> <C> <C>
     === === ===
</TABLE>

 
                                      45

<PAGE>
 
RESULTS OF OPERATIONS
 
  YEAR ENDED DECEMBER 31, 1997 COMPARED WITH YEAR ENDED DECEMBER 31, 1996
 
  The Systems served 126,558 basic subscribers at December 31, 1997 compared
with 123,203 basic subscribers at December 31, 1996, an increase of 3,355
subscribers or 2.7%. Homes passed increased to 178,449 at December 31, 1997
from 175,522 at December 31, 1996, an increase of 2,927 homes or 1.7%. Premium
service units increased to 64,963 at December 31, 1997 from 64,716 at December
31, 1996.
 
  Revenues. Revenues increased $3.7 million, or 7.7%, to $51.0 million in 1997
from $47.3 million in 1996. Adjusting for the change in the method of
recording franchise fees (recorded in 1997 as an offset to expense and in 1996
as both revenues and expense) revenues increased $5.2 million or 11.1%.
 
  The increase in revenues in 1997 resulted primarily from increases in basic
revenue and other revenue. Basic revenue increased due to an increase in the
weighted average monthly subscription rate for basic service to $7.69 in 1997
from $6.38 in 1996 and an increase in the weighted average monthly
subscription rate for CPST to $17.33 in 1997 from $16.19 in 1996. In addition,
basic revenue increased due to the increase in subscribers in 1997. Other
revenue components including home shopping, pay-per-view and advertising
revenue increased, while additional outlet revenue decreased.
 
  System Operating Expenses. System operating expenses increased $.5 million,
or 2.3%, to $23.1 million in 1997 from $22.6 million in 1996. Adjusting for
the change in the method of recording franchise fees, system operating
expenses increased $2.0 million or 8.8%. The increase in system operating
expenses in 1997 resulted primarily from increases in salaries and programming
costs.
 
  Non-System Operating Expenses. Non-system operating expenses increased $.1
million, or 1.8%, to $2.8 million in 1997 from $2.7 million in 1996.
 
  Depreciation, Amortization and Loss (Gain) on Disposal of Fixed
Assets. Depreciation, amortization and loss (gain) on disposal of fixed assets
increased $1.2 million, or 6.6%, to $19.3 million in 1997 from $18.1 million
in 1996. This increase resulted primarily from $.6 million of losses on
miscellaneous asset disposals during the year.
 
  Operating Income. Operating income increased $1.9 million, or 49.2%, to $5.7
million in 1997 from $3.9 million in 1996.
 
  Income Tax (Benefit) Expense. Income tax (benefit) expense increased $.8
million, or 50.6%, to $2.3 million in 1997 from $1.5 million in 1996. This
increase is due to the increase in operating income in 1997.
 
  Net (Loss) Income. For the reasons discussed above, net (loss) income
increased $1.1 million, or 48.3%, to $3.5 million in 1997 from $2.4 million in
1996.
 
  YEAR ENDED DECEMBER 31, 1996 COMPARED WITH YEAR ENDED DECEMBER 31, 1995
 
  The Systems served 123,203 basic subscribers at December 31, 1996 compared
with 120,340 basic subscribers at December 31, 1995, an increase of 2,863
basic subscribers or 2.4%. Homes passed increased to 175,522 homes at December
31, 1996 compared to 145,148 at December 31, 1995. This increase resulted
primarily from a homes passed audit of the Systems during 1996, which added
approximately 27,000 homes to the Systems' database, and estimated real growth
in the number of homes passed by the Systems of approximately 1.7%. Premium
service units increased 4,254, or 7.0%, to 64,716 at December 31, 1996 from
60,462 at December 31, 1995.
 
  Revenues. Revenues increased $3.8 million, or 8.7%, to $47.3 million in 1996
from $43.5 million in 1995. Basic revenue increased due to increases in the
weighted average monthly subscription rate for CPST to $16.19 in 1996 from
$13.09 in 1995, offset in part by a decrease in the weighted average monthly
subscription rate for basic service to $6.38 in 1996 from $6.75 in 1995. In
addition, basic revenue increased due to the increase in the number of basic
subscribers in 1996. Premium and other revenue remained the same due to a
reduction in advertising and additional outlet revenue, offset by increases in
pay-per-view revenue and other revenue.
 
 
                                      46

<PAGE>
 
  System Operating Expenses. System operating expenses increased $1.8 million,
or 8.8%, to $22.6 million in 1996 from $20.8 million in 1995. The 1996
expenses reflect increased payroll expenses, pay-per-view expenses, marketing
and other miscellaneous costs, offset in part by reductions in programming
costs resulting from the lower rates incurred by Time Warner.
 
  Non-System Operating Expenses. Non-system operating expenses increased $.5
million, or 24.2%, to $2.7 million in 1996 from $2.2 million in 1995 due to
the different amounts of corporate overhead and regional expenses incurred by
Time Warner in 1996 and CVI in 1995.
 
  Depreciation, Amortization and Loss (Gain) on Disposal of Fixed
Assets. Depreciation, amortization and loss (gain) on disposal of fixed assets
increased $.5 million, or 2.9%, to $18.1 million in 1996 from $17.6 million in
1995. This net increase resulted primarily from the net write-up of assets in
1996 under the purchase method of accounting following the acquisition of the
Systems when Time Warner acquired CVI.
 
  Operating Income. Operating income increased $.9 million, or 30.5%, to $3.9
million in 1996 from $3.0 million in 1995.
 
  Interest Expense. Interest expense was $11.9 million in 1995 which related
to debt recorded at the System level by CVI. The Systems recorded no interest
expense in 1996 because Time Warner met the Systems' financing needs through
non-interest bearing capital advances.
 
  Income Taxes (Benefit) Expense. Income tax (benefit) expense increased $5.1
million to an expense of $1.5 million in 1996 from a benefit of $3.6 million
in 1995. The increase in income tax (benefit) expense resulted from the
increase in operating income in 1996.
 
  Net (Loss) Income. For the reasons discussed above, net (loss) income
increased $7.7 million to net income of $2.4 million in 1996 from a net loss
of $5.4 million in 1995.
 
  THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997
 
   The Systems served 127,191 basic subscribers at March 31, 1998 compared
with 125,016 basic subscribers at March 31, 1997, an increase of 2,175
subscribers or 1.7%. Homes passed increased to 179,402 at March 31, 1998 from
176,617 at March 31, 1997, an increase of 2,785 homes or 1.6%. Premium service
units decreased to 61,053 at March 31, 1998 from 63,890 at March 31, 1997.
 
  Revenues. Revenues increased $1.5 million, or 12.3%, to $14.0 million for
the three months ended March 31, 1998 from $12.4 million for the three months
ended March 31, 1997.
 
  The increase in revenues for the three months ended March 31, 1998 resulted
primarily from increases in basic revenue and other revenue. Basic revenue
increased due to an increase in the weighted average monthly subscription rate
for basic service to $7.88 in 1998 from $7.69 in 1997 and an increase in the
weighted average monthly subscription rate for CPST to $20.28 in 1998 from
$17.33 in 1997. In addition, basic revenue increased due to the increase in
subscribers in 1998. Other revenue components including home shopping, pay-
per-view and advertising revenue increased, while additional outlet revenue
decreased.
 
  System Operating Expenses. System operating expenses increased $.2 million,
or 4.0%, to $6.0 million for the three months ended March 31, 1998 from $5.8
million for the three months ended March 31, 1997. The increase in system
operating expenses for the three months ended March 31, 1998 resulted
primarily from increases in programming costs, offset in part by decreases in
repairs, maintenance, advertising, contract labor and bad debt expense.
 
  Operating Income. Operating income increased $1.3 million, or 103.4%, to
$2.6 million for the three months ended March 31, 1998 from $1.3 million for
the three months ended March 31, 1997.
 
                                      47

<PAGE>
 
  This increase resulted from the increase in revenues for the three months
ended March 31, 1998 of $1.5 million, offset in part by the increase in system
operating expenses of $.2 million for the three months ended March 31, 1998.
 
  Income Tax (Benefit) Expense. Income tax (benefit) expense increased $.5
million, or 80.7%, to $1.2 million for the three months ended March 31, 1998
from $.7 million for the three months ended March 31, 1997. This increase was
due to the increase in operating income for the three months ended March 31,
1998.
 
  Net Income. For the reasons discussed above, net income increased $.8
million, or 126.6%, to $1.5 million for the three months ended March 31, 1998
from $.6 million for the three months ended March 31, 1997.
 
LIQUIDITY AND CAPITAL RESOURCES
 
  From January 4, 1996 until April 9, 1998, the Systems were owned by Time
Warner and their liquidity and capital resources needs were evaluated and met
based upon funding from Time Warner. The Systems' cash balances were generally
minimized with excess cash balances transferred to corporate cash management
accounts.
 
  The cable television business requires substantial capital for the
upgrading, expansion and maintenance of signal distribution equipment, as well
for home subscriber devices and wiring and for service vehicles. The Company
will continue to deploy fiber optic technology and to upgrade the Systems to a
minimum of 550 MHz and to 750 MHz where system characteristics warrant. The
deployment of fiber optic technology will allow the Company to complete future
upgrades to the Systems in a cost-effective manner. In addition, the Company
believes that the application of digital compression technology will likely
reduce the requirement in the future for upgrades to increase capacity beyond
750 MHz.
 
  The working capital requirements of a cable television business are
generally not significant since subscribers are billed for services monthly in
advance, while the majority of expenses incurred (except for payroll) are paid
generally 30 to 60 days after their incurrence.
 
  The Systems' net cash provided by operations was $23.6 million in 1997
compared to $23.1 million in 1996 and $7.5 million in 1995. The System's net
cash provided by operations was $6.0 million and $4.8 million for the three
months ended March 31, 1998 and 1997, respectively. The Systems' net cash used
in investing activities was $6.4 million, $8.2 million and $7.4 million in
1997, 1996 and 1995, respectively, and in 1996 Time Warner allocated $249.5
million of the purchase price paid (net of cash acquired) for CVI to the
Systems. The System's net cash used in investing activities was $.5 million
and $1.6 million for the three months ended March 31, 1998 and 1997,
respectively. The Systems' net cash used in financing activities which related
to distributions of excess cash to their parent companies, amounted to $16.4
million, $14.9 million and none, in 1997, 1996 and 1995, respectively, and in
1996 Time Warner allocated $250.0 million of the purchase price paid for CVI
to the Systems. The System's net cash used in financing activities was $4.0
million and $1.3 million for the three months ended March 31, 1998 and 1997,
respectively. The Systems' EBITDA increased to $25.1 million in 1997 from
$22.0 million in 1996 and $20.6 million in 1995. EBITDA as a percentage of
revenue increased to 49.2% in 1997 from 46.4% in 1996, primarily resulting
from a change in the method of recording franchise fees, and 47.2% in 1995.
Had the method of recording franchise fees been changed in 1995 and 1996, the
effect of this change would have resulted in EBITDA margins of 48.0% and 48.9%
for 1996 and 1995, respectively. The System's EBITDA was $7.3 million and $6.0
million for the quarter ended March 31, 1998 and 1997, respectively. As a
percentage of revenue, EBITDA was 51.9% and 48.0% for the quarter ended March
31, 1998 and 1997, respectively.
 
  Simultaneously with the Offering of the Old Notes: (i) the Company received
equity contributions of $95.1 million from the Morgan Stanley Entities and
$3.9 million from the Management Investors; (ii) Renaissance Media, as
borrower, and Renaissance Louisiana, Renaissance Tennessee and Renaissance
Capital, as guarantors, entered into the Senior Credit Facility, consisting of
$110.0 million in Term Loans and the $40.0 million
 
                                      48

<PAGE>
 
Revolver; and (iii) Renaissance Media acquired the Systems from Time Warner
for $300.0 million in cash and the issuance to Time Warner of a $9.5 million
equity interest in Holdings.
 
  The Company used the net proceeds from the Offering, together with the
Equity Contributions and borrowings under the Term Loans, to consummate the
Acquisition. The Company has approximately $210.0 million of indebtedness
outstanding and unused commitments under the Revolver of $40.0 million.
Subject to compliance with the terms of the Senior Credit Facility, borrowings
under the Revolver will be available for working capital purposes, capital
expenditures and acquisitions.
 
  The Company expects to make substantial investments in capital to: (i)
upgrade its cable plant; (ii) build line extensions; (iii) purchase new
equipment; and (iv) acquire the equipment necessary to implement its digital
and Internet and data transmission strategy. In 1998, the Company estimates it
will make capital expenditures of approximately $9.8 million. The Company
believes that the borrowings expected to be available under the Revolver and
anticipated cash flow from operations will be sufficient to upgrade the
Systems as currently contemplated and to satisfy the Company's working
capital, capital expenditure and debt service requirements. However, the
actual amount and timing of the Company's capital requirements may differ
materially from the Company's estimates as a result of, among other things,
the demand for the Company's services and regulatory, technological and
competitive developments (including additional market developments and new
opportunities) in the Company's industry. The Company also expects that it
will require additional financing if the Company's development plans or
projections change or prove to be inaccurate or the Company engages in any
acquisitions. Sources of additional financing may include commercial bank
borrowings, vendor financing or the private or public sale of equity or debt
securities. There can be no assurances that such financing will be available
on terms acceptable to the Company or at all.
 
  Borrowings under the Senior Credit Facility will bear interest at floating
rates, although the Company will be required to maintain interest rate
protection programs. Renaissance Media's obligations under the Senior Credit
Facility will be secured by substantially all the assets of Renaissance Media.
See "Description of Certain Indebtedness--Senior Credit Facility."
 
  The Company has developed a plan for information technology resources to
address the Year 2000. While the Company believes that its planning efforts
are adequate to address the Year 2000 concerns and that CSG will resolve its
Year 2000 concerns prior to 1999, there can be no assurance that the systems
of companies on which the Systems and their operations rely, including CSG,
will be converted on a timely basis and will not have a material adverse
effect on the Company. The cost of the Year 2000 initiatives is not expected
to be material to the Company's result of operations or financial position.
 
RECENT DEVELOPMENTS
 
  During January 1998, the Systems increased their subscription rates from
$7.69 to $7.88, on a weighted average basis (excluding bulk subscribers) for
basic service, and from $17.33 to $20.28, on a weighted average basis, for
CPST. For the three months ended March 31, 1998, after giving pro forma effect
to the rate increases described above as if they all occurred on January 1,
1998 as opposed to cycling in throughout the month, and the Acquisition as if
it occurred at the beginning of the period, the Company's EBITDA would have
been approximately $7.2 million, as compared to approximately $6.9 million
reflected in the pro forma combined statement of operations for the three
months ended March 31, 1998.
 
IMPACT OF INFLATION
 
  With the exception of programming costs, the Company does not believe that
inflation has had or will likely have a significant effect on its results of
operations or capital expenditure programs. Programming cost increases in the
past have tended to exceed inflation and may continue to do so in the future.
The Company, in accordance with FCC regulations, may pass along programming
cost increases to its subscribers.
 
 
                                      49

<PAGE>
 
 
                                  BUSINESS
 
GENERAL
 
  The Company was formed to acquire, operate and develop medium-sized cable
television systems. The Company acquired six cable television Systems from
Time Warner on April 9, 1998. The Systems are clustered in southern Louisiana
and western Mississippi (the Louisiana Systems) and western Tennessee (the
Tennessee System) and, as of March 31, 1998, passed approximately 179,402
homes and served approximately 127,191 subscribers. The Company is the 4th
largest cable television system operator in Louisiana and the 5th largest
cable television system operator in Tennessee based upon the Systems' numbers
of subscribers at March 31, 1998.
 
  The Guarantor and the Obligors were formed in 1998 by Holdings. Holdings is
owned by the Morgan Stanley Entities, Time Warner and the Management
Investors, who have an average of 17 years of experience in the cable
television industry. At CVI, the Management Investors were largely responsible
for the management of 55 cable television systems serving 600 communities in
18 states, including operating the Louisiana Systems for seven years and the
Tennessee System for nine years. In addition, the Company's regional
management has significant experience in the critical functions of operations,
management, sales, marketing, back office, finance and regulatory affairs.
 
  The Company intends to increase its subscriber base and operating cash flow
by pursuing cable television system acquisitions, improving and upgrading its
technical plant and expanding its service offerings. The Company will pursue
selective acquisitions in markets which are contiguous to the Systems and in
non-contiguous mid-sized markets serving more than 30,000 subscribers where
local or regional clusters can be formed. The Company believes that by
clustering systems it will be able to realize economies of scale, such as
reduced payroll, reduced billing and technical costs per subscriber, reduced
advertising sales costs, increased local advertising sales, more efficient
roll-out and utilization of new technologies and consolidation of its customer
service functions. The Company plans to improve and upgrade its technical
plant, which should allow it to provide a wide array of new services and
service tiers, as well as integrate new interactive features into advanced
analog and digital set-top consumer equipment. The Company also plans to
develop and provide new cable and broadband services and develop ancillary
businesses including digital video and high speed Internet access services.
 
  The Guarantor's and the Obligors' principal executive offices are located at
One Cablevision Center, Suite 100, Ferndale, New York 12734 and the telephone
number is (914) 295-2600.
 
BUSINESS STRATEGY
 
  The Company's strategy is to increase its revenues and EBITDA by acquiring,
operating and developing cable television systems and capitalizing on the
expertise of management, as well as the Company's relationship with the
Management Investors and Time Warner. The key components of the Company's
strategy include the following:
 
  Pursue Strategic Acquisitions. Management believes that attractive
acquisition opportunities will be available as large cable television system
operators divest non-strategic assets and small operators sell their systems.
The Company intends to pursue system acquisitions in markets which are
contiguous to the Systems and in non-contiguous markets serving more than
30,000 subscribers where local or regional clusters can be formed. The Company
believes that by clustering systems it will be able to realize economies of
scale, such as reduced payroll, reduced billing and technical costs per
subscriber, reduced advertising sales costs, increased local advertising
sales, more efficient roll-out and utilization of new technologies and
consolidation of customer service functions. The Management Investors'
experience in operating cable television systems in urban, suburban and rural
markets will enable the Company to pursue a wide range of potential
acquisition opportunities.
 
 
                                      50

<PAGE>
 
  Operate Technologically Advanced Systems. The Company will seek to operate
cable television systems with bandwidths of 550 MHz to 750 MHz (78 to 110
analog channels) that include the use of hybrid fiber-coaxial cable plant, bi-
directional transmission capability, small-cluster nodes, advanced subscriber
set-top devices and digital compression technology. The Company will continue
to upgrade the Systems and will selectively upgrade systems acquired in the
future depending on market conditions. Many of the upgraded systems will
likely incorporate digital compression technology which would increase the
number of programming channels that may be transmitted over a given amount of
bandwidth, in many cases resulting in up to 10 digital channels transmitted in
the space required for a single analog channel. The Company expects that such
technology will also permit it to offer new services such as high speed
Internet access and data transmission and additional programming tiers, as
well as new interactive features being integrated into advanced analog and
digital set-top consumer equipment.
 
  Capitalize on Relationships with Management Investors and Time Warner. The
Company will benefit from the depth and breadth of the experience of the
Management Investors in acquiring, operating and developing cable television
systems, including the Systems, as well as the expertise of its regional
marketing, sales and technical personnel. The Company believes that it will
benefit from its relationship with Time Warner through access to certain of
Time Warner's programming arrangements and technical and engineering
expertise. In addition, the Company believes it will be able to coordinate its
equipment purchasing with Time Warner.
 
  Focus on Operations and Service. Management believes that its focus on
system operations and customer service will increase subscriber penetration,
revenues and cash flow margins. The Company will implement its comprehensive
training and certification program which provides specific technical training
to further improve operations performance and customer service. In addition,
the Company will actively monitor the performance of its systems and the
quality of its customer service, using criteria such as picture quality,
service call response times, average outage durations, telephone answer rates
and installation response times. The Company will also use market research
tools to gauge its performance and customer satisfaction and to tailor its
local service offerings to the particular community.
 
  Develop Ancillary Businesses. The Company intends to pursue new business
opportunities that complement its core video delivery systems. The Company
intends to expand its advertising sales operations in each of its cable
television systems and create local production businesses in markets that can
support that activity. Management will also concentrate on the marketing of
special events and pay-per-view movies. In the future, the Company plans to
offer digital services such as near video on demand as an alternative to video
rentals. In addition, the Company plans to offer high speed Internet access
and data transmission via certain of its cable networks.
 
                                      51

<PAGE>
 
THE SYSTEMS
 
  Overview. The following table illustrates certain subscriber and operating
statistics for the Systems as of March 31, 1998. The Systems are divided into
two geographical regions, southern Louisiana and western Mississippi (the
Louisiana Systems) and western Tennessee (the Tennessee System):
 

<TABLE>
<CAPTION>
                                                                                                     AVERAGE
                                                                           PREMIUM                   MONTHLY
                                     TOTAL                                 SERVICE                   REVENUE
                            HOMES    PLANT      BASIC           BASIC       UNITS      PREMIUM      PER BASIC
         SYSTEM           PASSED (1) MILES SUBSCRIBERS (2) PENETRATION (3)   (4)   PENETRATION (5) SUBSCRIBER
         ------           ---------- ----- --------------- --------------- ------- --------------- -----------
<S>                       <C>        <C>   <C>             <C>             <C>     <C>             <C>
Louisiana Systems:
 St. Tammany System.....    62,611   1,341      42,956          68.6%      25,259       58.8%
 Lafourche System.......    28,518     560      22,418          78.6       12,244       54.6%
 St. Landry System......    26,434     529      19,367          73.3        7,153       36.9%
 Picayune System........     6,943     224       5,590          80.5        2,690       48.1%
 Pointe Coupee System...     6,250     162       4,429          70.9        1,901       42.9%
                           -------   -----     -------          ----       ------
 Total..................   130,756   2,816      94,760          72.5       49,247       52.0%        $37.84
                           -------   -----     -------                     ------
Tennessee System........    48,646     914      32,431          66.7       11,806       36.4%         33.44
                           -------   -----     -------                     ------       ----
Total Systems...........   179,402   3,730     127,191          70.9       61,053       48.0%         36.71
                           =======   =====     =======                     ======
</TABLE>

- --------
(1) Homes passed refers to estimates of the number of dwelling units and
    commercial establishments in a particular community that can be connected
    to the distribution system without any further extension of principal
    transmission lines. Such estimates are based upon a variety of sources,
    including billing records, house counts, city directories and other local
    sources.
(2) The number of basic subscribers has been computed by adding the actual
    number of subscribers for all non-bulk accounts and the equivalent
    subscribers for all bulk accounts. The number of such equivalent
    subscribers has been calculated by dividing aggregate basic service
    revenue for bulk accounts by the full basic service rate for the community
    in which the accounts are located. Bulk accounts consist of commercial
    establishments and multiple dwelling units.
(3) Basic penetration represents the number of basic subscribers as a
    percentage of the total number of homes passed in the system.
(4) Premium service units represent the number of subscriptions to premium
    channels offered for a monthly fee per channel.
(5) Premium penetration represents the number of premium service units as a
    percentage of the total number of basic subscribers.
 
  The following table sets forth certain information regarding the analog
channel capacities of the Systems as of December 31, 1997:
 

<TABLE>
<CAPTION>
                                    330 MHZ     450 MHZ     550 MHZ
                                  40 CHANNELS 62 CHANNELS 78 CHANNELS  TOTAL
                                  ----------- ----------- ----------- -------
<S>                               <C>         <C>         <C>         <C>
Number of headends...............        1           9           4         14
Subscribers as of December 31,
 1997............................    1,702      83,906      40,950    126,558
% of total subscribers...........      1.3%       66.3%       32.4%     100.0%
Miles of plant...................       60       2,226       1,444      3,730
% of total plant.................      1.6%       59.7%       38.7%     100.0%
</TABLE>

 
  The Company will continue to deploy fiber optic technology and to upgrade
the Systems to a minimum of 550 MHz and to 750 MHz where system
characteristics warrant. The deployment of fiber optic technology will allow
the Company to complete future upgrades to the Systems in a cost-effective
manner. The Company also plans to use fiber optic technology to interconnect
headends and to create fiber optic backbones to reduce amplifier cascades,
thereby gaining operational efficiencies and improved picture quality and
system reliability.
 
  The Company plans to upgrade the Systems according to the following table:
 

<TABLE>
<CAPTION>
                                                        CURRENT  PLANNED UPGRADE
                        SYSTEM                           (MHZ)        (MHZ)
                        ------                          -------  ---------------
<S>                                                     <C>      <C>
Jackson, TN............................................ 330/450          750
Picayune, MS...........................................     550          550
St. Tammany, LA........................................ 450/550*     550/750
Lafourche, LA.......................................... 450/550*     550/750
St. Landry, LA.........................................     450          750
Pointe Coupee, LA......................................     550          550
</TABLE>

- --------
* Some sections of these systems are currently 450 or 330 MHz and the rest
  were recently upgraded to 550 MHz. The Company plans to upgrade the 450 MHz
  and 330 MHz sections to 750 MHz.
 
                                      52

<PAGE>
 
  THE LOUISIANA SYSTEMS
 
  The Louisiana Systems consist of five cable television systems serving
94,760 basic subscribers as of March 31, 1998, located in southern Louisiana
and western Mississippi: the St. Tammany system, the St. Landry system, the
Lafourche system, the Picayune system and the Pointe Coupee system. As of
March 31, 1998, approximately one-half of the Louisiana Systems' subscribers
were served by the St. Tammany system. The Louisiana Systems are operated from
the Regional Office located in Thibodaux, Louisiana which provides certain
support services for the Systems. The Systems' regional management has 15
years average experience in the cable television industry.
 
  The St. Tammany System. The St. Tammany system comprises one consolidated
headend, and serves the communities of Slidell, Mandeville and St. Tammany,
the towns of Pearl River, Abita Springs and Madisonville and the City of
Covington. St. Tammany is a suburb located approximately 40 miles northeast of
New Orleans. Recognized as Louisiana's fastest growing parish since 1995.
 
  The Lafourche System. The Lafourche system comprises two headends, one of
which is a consolidated headend, and serves the communities of Lafourche,
Assumption and St. James. Lafourche is located in southeast Louisiana along
the Gulf of Mexico, approximately 60 miles from New Orleans. Commercial
fishing and the oil and gas extraction industries dominate the local economy
in the southern portion of the system's service area, comprising a significant
portion of the manufacturing work force there. In the northern portion of the
system's service area, sugar is a prominent industry, as are other farming
related industries.
 
  The St. Landry System. The St. Landry system comprises four headends and
serves the communities of Jennings, Church Point, Eunice and Opelousas.
Located 61 miles from Baton Rouge, St. Landry's economy is primarily focused
on agriculture.
 
  The Picayune System. The Picayune system comprises one headend and serves
the communities of Picayune and parts of Pearl County. Picayune, 25 miles
northeast of Slidell and 60 miles northeast of New Orleans, is in Pearl
County, Mississippi. The John C. Stennis Space Center is one of the largest
employers in the Picayune area and is the main testing facility for NASA's
large propulsion systems including the Space Shuttle.
 
  The Pointe Coupee System. The Pointe Coupee system comprises one headend and
serves the community of New Roads and the Village of Morganza. Pointe Coupee
is a suburb of Baton Rouge and is Louisiana's second oldest settlement. Pointe
Coupee's major industry is agriculture.
 
  THE TENNESSEE SYSTEM
 
  As of March 31, 1998, the Tennessee System served 32,431 basic subscribers
located in Jackson, Tennessee and surrounding counties. The Tennessee System
is managed from the Regional Office located in Thibodaux, Louisiana. The
Tennessee System comprises five headends and serves the communities of
Jackson, Selmer, Bethel Springs, Adamsville, Camden, Alamo, Bells, Maury City,
Newbern, Trimble, Obion, Troy and the counties of Madison, Crockett, McNairy,
Benton, Dyer and Obion. Jackson is the medical, retail, cultural and
geographic center of west Tennessee. As of March 31, 1998, 22,948 basic
subscribers (excluding bulk subscribers), or three-quarters of the Tennessee
System's subscribers, were served from a single headend.
 
THE SOCIAL CONTRACT
 
  The Social Contract between Time Warner and the FCC, which became effective
on January 1, 1996, resolved certain outstanding cable rate cases involving
Time Warner that arose in connection with regulations promulgated by the FCC
pursuant to the 1992 Cable Act. The Social Contract established parameters
within which Time Warner and subsequent buyers of Time Warner's cable
television systems might determine certain
 
                                      53

<PAGE>
 
subscriber rates and maintain a high level of technical capacity in such
systems. Among other obligations, Time Warner agreed to upgrade one-half of
its systems to 550 MHz capacity and the balance to 750MHz capacity within the
term of the Social Contract, of which at least 200 MHz is expected to be
allocated to digital compression technology by January 1, 2001. In exchange,
the Social Contract settled those certain outstanding rate cases and
established a right of Time Warner to increase monthly CPST rates by an
additional $1.00 per year above other permissible increases resulting from
inflation and so-called "external costs" for the term of the Social Contract
through the year 2000. The Social Contract provides that Time Warner may
petition the FCC to modify or terminate the Social Contract based on any
relevant change in applicable law, regulation or circumstance.
 
  In connection with the Acquisition, the Company received the FCC's consent
to the assignment of the Social Contract as it applies to the Systems. By
assuming Time Warner's unsatisfied obligations with respect to the Systems,
the Company has gained certain rate benefits described above. The principal
remaining obligations of the Social Contract as they relate to the Systems
will be to upgrade the Tennessee System, the St. Landry system and
approximately one-half of the St. Tammany and Lafourche systems to 750 MHz
capacities. The failure to comply with the upgrade requirements will subject
the Company to refund liability under the terms of the Social Contract. The
Company also is required to ensure that at least 60% of new analog services in
the Systems are added to the CPST, and add at least 15 new channels on average
(weighted by CPST subscribers) to the CPST of the Systems. The Company
believes the upgrades are prudent both due to the competitive advantages to be
gained by technologically advanced facilities and from the rate increases the
Company will be permitted to implement.
 
INDUSTRY OVERVIEW
 
  A cable television system receives television, radio and data signals at the
system's "headend" site by means of off-air antennas, microwave relay systems
and satellite earth stations. These signals are then modulated, amplified and
distributed, primarily through coaxial and fiber optic distribution systems,
to deliver a wide variety of channels of television programming, primarily
entertainment and informational video programming, to the homes of subscribers
who pay fees for this service, generally on a monthly basis. A cable
television system may also produce its own television programming and other
information services for distribution through the system. Cable television
systems generally are constructed and operated pursuant to non-exclusive
franchises or similar licenses granted by local governmental authorities for a
specified period of time, generally up to ten years.
 
  Cable television systems offer customers various levels (or "tiers") of
cable services consisting of broadcast television signals of local network
affiliates, independent and educational television stations, a limited number
of broadcast television signals from so-called "super stations" originating
from distant cities (such as WGN), various satellite-delivered, non-broadcast
channels (such as Cable News Network (CNN), MTV: Music Television (MTV), the
USA Network, ESPN and Turner Network Television (TNT), programming originated
locally by the cable television system (such as public, educational and
governmental access programs) and informational displays featuring news,
weather and public service announcements. Cable television systems also offer
"premium" television services to customers on a monthly charge per-channel
basis and sometimes on a pay-per-view basis. These services (such as Home Box
Office ("HBO") and Showtime and selected regional sports networks) are
satellite channels that consist principally of feature films, live sporting
events, concerts and other special entertainment features, usually presented
without commercial interruption.
 
  A customer generally pays an initial installation charge and fixed monthly
fees for basic, tier and premium television services and for other services
(such as the rental of converters and remote control devices). Such monthly
service fees constitute the primary source of revenue for cable television
systems. In addition to customer revenue, cable television systems also
frequently offer to their customers home shopping services, which pay such
systems a share of revenue from products sold in the systems' service areas.
Some cable television systems also receive revenue from the sale of available
spots on advertiser-supported programming.
 
                                      54

<PAGE>
 
PROGRAMMING AND SUBSCRIBER RATES
 
  Cable television systems offer their customers programming that includes the
local network, independent and educational broadcast television stations, a
limited number of broadcast television signals from distant cities, numerous
satellite-delivered, non-broadcast channels and in some systems local
information and public, educational and governmental access channels.
Depending upon each system's channel capacity and viewer interests, the
Company offers tiers of cable television programming: a basic programming tier
(consisting generally of network, independent and public television signals
available over-the-air), an "expanded basic" programming tier (consisting
generally of satellite-delivered programming services with broad based
viewership appealing to a wide variety of subscriber tastes), one or more
specialty tiers (consisting of satellite-delivered programming, services
tailored to particular niche subscriber groups such as the Sci-Fi Channel,
Home & Garden, The Cartoon Network, American Movie Classics, ESPN2 and
regional sports programming) and per channel and pay-per-view premium services
purchased from content suppliers such as HBO, Cinemax and The Disney Channel.
 
  In connection with the Acquisition, the Company has retained Time Warner
under an exclusive arrangement to manage all of the Company's programming,
except local programming, at rates which the Company believes will be
favorable. Time Warner will have various contracts and arrangements to obtain
basic, satellite and premium programming for the Systems from program
suppliers, including, in limited circumstances, some broadcast stations, with
compensation generally based on a fixed fee per customer or a percentage of
the gross receipts for the particular service. Some program suppliers provide
volume discount pricing structures and/or offer marketing support. Through
Time Warner, the Company plans to have long-term programming contracts for the
supply of a substantial amount of its programming. Such contracts generally
will be for fixed periods of time ranging from one to five years and will be
subject to negotiated renewal. The loss of contracts with certain programming
suppliers could have a material adverse effect on the Company, its financial
condition, prospects and debt service ability. In the event that the Company's
arrangement with Time Warner is terminated, the Company expects it will be
able to obtain other programming arrangements, although such arrangements may
be at higher rates. This arrangement with Time Warner lasts only as long as
Time Warner retains an equity interest in Holdings and Holdings holds all or
substantially all of the Systems.
 
  Cable programming costs are expected to continue to increase due to
additional programming being provided to customers, inflationary increases and
other factors. In 1996 and 1997, programming costs as a percentage of the
System's revenues were approximately 20.1% and 20.5%, respectively and 20.0%
and 21.0% for the three months ended March 31, 1997 and 1998, respectively.
However, following the Acquisition, the Systems will lose certain programming
discounts that were realized as a result of being part of a large MSO. See
"Pro Forma Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
 
  Monthly customer rates for services offered by the Systems vary from market
to market, primarily according to the amount of program offerings and costs of
operations. As of January 1, 1998, the monthly basic service rates for
residential customers for the Systems ranged from $5.20 to $11.00, per-channel
premium service rates ranged from $7.95 to $11.95 and tier service rates
ranged from $16.80 to $21.94. As of December 31, 1997, the weighted average
price for the System's monthly full basic service rate was approximately
$7.69. During January 1998, the Systems increased their subscription rates
from $7.69 to $7.88, on a weighted average basis (excluding bulk subscribers)
for basic service, and from $17.33 to $20.28, on a weighted average basis, for
CPST. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Recent Developments."
 
CUSTOMER SERVICE AND MARKETING
 
  The Company emphasizes the importance of excellent customer service, which
it believes is critical to the successful operation of its business. The
Company intends to implement business approaches which permit it to provide
high-quality locally focused service to each community served. The Company
believes that a system-by-system, decentralized approach to operations is
required as each area served has distinct characteristics such as
 
                                      55

<PAGE>
 
demographics, economic diversity and geographic setting. The Company's local
management will strive to become an integral part of the communities served.
These efforts will enable the Company periodically to adjust its local service
offerings to meet the needs of a particular community.
 
  In the communities it will serve, the Company believes that many customers
prefer to personally visit the local office to pay their bills or ask
questions about their service. As a result, the Company intends to maintain
conveniently accessible local offices in many of its service areas. The
Systems' local staff, typically native to the areas they serve, are familiar
with the community's customer base. The Company believes that this combination
of local offices and local staffing will allow the Company to provide a high
level of customer service. Additionally, the Company believes familiarity with
its communities will allow it to customize its menu of services and respective
pricing to provide its customers with products that are both diverse and
affordable.
 
  The Company will operate under a quality assurance program which stresses
responsibility and reliability among employees at all levels, and treats each
customer's concerns individually. To monitor the performance of its Systems
and the quality of its customer service, the Company will measure eleven
criteria on a weekly, and in some cases, daily basis. These criteria are:
service call response times, service call-to-total customers ratio,
installation response time, repeat service calls, new-customer service calls,
average outage duration, picture quality, occurrence of all-telephone-trunks
busy per measurement period, telephone answer rate and response time to
customer correspondence. The Company will also use market research tools to
gauge its performance and customer satisfaction and to tailor its local
service offerings to the particular community. Management believes that its
focus on system operations and customer service will increase subscriber
penetration, revenues and cash flow margins.
 
  The Company will aggressively market and promote its cable television
services with the objective of adding and retaining customers and increasing
subscriber revenue. The Company will actively market its basic and premium
program packages through a number of coordinated marketing techniques,
including: (i) door-to-door sales and subscriber audit programs; (ii) direct
mail for basic and upgrade acquisition campaigns; (iii) monthly subscriber
statement inserts; (iv) local newspaper and broadcast/radio advertising where
population densities are sufficient to provide a reasonable cost per sale; and
(v) cross-channel promotion of new services and pay-per-view movies and
events.
 
FRANCHISES
 
  Cable television companies operate under non-exclusive franchises granted by
local authorities which are subject to renewal and renegotiation from time to
time. These franchises typically contain many conditions, including: (i) time
limitations on commencement and completion of construction; (ii) conditions of
service including customer response requests, technical standards, compliance
with FCC regulations and the provision of free service to schools and certain
other public institutions; and (iii) the maintenance of insurance and
indemnity bonds. Certain provisions of local franchises are subject to federal
regulation under the 1984 Cable Act, the 1992 Cable Act and the 1996 Telecom
Act.
 
  As of March 31, 1998, the Systems held 46 franchises in the aggregate. These
franchises, all of which are non-exclusive, generally provide for the payment
of fees to the issuing authority. The Company's franchise fees typically range
from 3.0% to 5.0% of "revenue" (as defined in each franchise agreement). For
the past three years, franchise fee payments made by the Systems have averaged
approximately 3.7% of total gross System revenue. Franchise fees are generally
passed directly through to the customers on their monthly bills. General
business or utility taxes may also be imposed in various jurisdictions. As
amended by the 1996 Telecom Act, the 1984 Cable Act prohibits franchising
authorities from imposing franchise fees in excess of 5% of gross revenue
derived from the operation of a cable television system to provide cable
services and also permits the cable operator to seek renegotiation and
modification of franchise requirements if warranted by changed circumstances.
Most of the Company's franchises can be terminated prior to their stated
expirations for uncured breaches of material provisions. See "Legislation and
Regulation."
 
                                      56

<PAGE>
 
  The following table sets forth for the Systems the number of franchises by
year of franchise expiration and the number of basic subscribers and
percentage of the Systems' basic subscribers as of December 31, 1997:
 

<TABLE>
<CAPTION>
                                                                      PERCENTAGE
                                                           NUMBER OF  OF SYSTEMS'
                              NUMBER OF   PERCENTAGE OF      BASIC       BASIC
YEAR OF FRANCHISE EXPIRATION  FRANCHISES TOTAL FRANCHISES SUBSCRIBERS SUBSCRIBERS
- ----------------------------  ---------- ---------------- ----------- -----------
<S>                           <C>        <C>              <C>         <C>
Prior to 2000...............       1            2.2%          3,803        3.0%
2000--2004..................      15           32.6%         52,745       41.7
2005--2008..................      18           39.1%         44,152       34.9
2009 and after..............      12           26.1%         25,858       20.4
                                 ---          -----         -------      -----
  Total.....................      46          100.0%        126,558      100.0%
                                 ===          =====         =======      =====
</TABLE>

 
  The Company believes that the Systems have good relationships with their
respective franchising authorities. However, renewals or extensions of
franchises may result in more rigorous franchise requirements.
 
  The 1984 Cable Act provides for, among other things, procedural and
substantive safeguards for cable operators and creates an orderly franchise
renewal process in which renewal of franchise licenses issued by governmental
authorities cannot be unreasonably withheld, or, if renewal is withheld and
the franchise authority acquires ownership of the system or effects a transfer
of the system to another person, such franchise authority or other person must
pay the operator either: (i) the "fair market value" (without value assigned
to the franchise) for the system if the franchise was granted after the
effective date of the 1984 Cable Act (December 1984) or the franchise was pre-
existing but the franchise agreement did not provide a buyout or (ii) the
price set in franchise agreements predating the 1984 Cable Act. In addition,
the 1984 Cable Act established comprehensive renewal procedures which require
that an incumbent franchisee's renewal application be assessed on its own
merits and not as part of a comparative process with competing applications.
See "Legislation and Regulation."
 
  The 1984 Cable Act also establishes buyout rates in the event the franchise
is terminated "for cause" and the franchise authority desires to acquire the
system. For franchises which post-date the existence of the 1984 Cable Act or
pre-date the 1984 Cable Act but do not specify buyout terms, the franchise
authority must pay the operator an "equitable" price. To date, none of the
System's franchises has been terminated.
 
  The 1992 Cable Act prohibits the award of exclusive franchises, prohibits
franchising authorities from unreasonably refusing to award additional
franchises and permits them to operate cable systems themselves without
franchises. The 1996 Telecom Act provides that no state or local laws or
regulations may prohibit or have the effect of prohibiting any entity from
providing any interstate or intrastate telecommunications service. State and
local authorities retain authority to manage the public rights of way and
"competitively neutral" requirements concerning right of way fees, universal
service, public safety and welfare, service quality and consumer protection
are permitted with respect to telecommunications services. See "Risk Factors--
Non-Exclusive Franchises; Non-Renewal or Termination of Franchises" and
"Legislation and Regulation."
 
COMPETITION
 
  Cable television systems face competition from alternative methods of
receiving and distributing television signals and from other sources of news,
information and entertainment such as off-air television broadcast
programming, newspapers, movie theaters, live sporting events, interactive
online computer services and home video products, including videotape cassette
recorders. The extent to which a cable communications system is competitive
depends, in part, upon the cable system's ability to provide, at a reasonable
price to customers, a greater variety of programming and other communications
services than those which are available off-air or through other alternative
delivery sources and upon superior technical performance and customer service.
 
  Cable television systems generally operate pursuant to franchises granted on
a nonexclusive basis. The 1992 Cable Act prohibits franchising authorities
from unreasonably denying requests for additional franchises and
 
                                      57

<PAGE>
 
permits franchising authorities to operate cable television systems. See
"Legislation and Regulation." It is possible that a franchising authority
might grant a franchise to another company containing terms and conditions
more favorable than those afforded the Company. Well-financed businesses from
outside the cable industry (such as the public utilities that own the poles to
which cable is attached) may become competitors for franchises or providers of
competing services. See "Legislation and Regulation." Currently, the Systems'
principal competitors for receiving and distributing television signals in the
areas they serve are off-air television broadcast programming, home satellite
dish earth stations ("HSDS") and DBS, although other cable television systems
operate in other non-overlapping areas of the Company's franchise areas. See
"Risk Factors--Significant Competition in the Cable Television Industry."
 
  The 1992 Cable Act contains provisions, which the FCC implemented with
regulations, to enhance the ability of cable competitors to purchase and make
available to HSDS owners certain satellite-delivered cable programming at
competitive costs. The 1996 Telecom Act prohibits certain local restrictions
that impair a viewer's ability to receive video programming services using
HSDS and over-the-air antennae, and the FCC adopted regulations implementing
this provision that preempt certain local restrictions on satellite and over-
the-air antenna reception of video programming services, including zoning,
land-use or building regulations, or any private covenant, homeowners'
association rule or similar restriction on property within the exclusive use
or control of the antenna user.
 
  Cable operators also face competition from private satellite master antenna
television ("SMATV") systems that serve condominiums, apartment and office
complexes and private residential developments. The 1996 Telecom Act broadens
the definition of SMATV systems not subject to regulation as a franchised
cable television system, and the FCC recently revised its cable inside wiring
rules to provide a more specific procedure for the disposition of internal
cable wiring that belongs to an incumbent cable operator that is forced to
terminate its cable services in a multiple dwelling unit ("MDU") building by
the building owner. SMATV systems offer both improved reception of local
television stations and many of the same satellite-delivered program services
offered by franchised cable television systems. SMATV operators often enter
into exclusive agreements with building owners or homeowners' associations.
Although some states have enacted laws that authorize franchised cable
operators access to such private complexes, Louisiana, Mississippi and
Tennessee have not. These laws have been challenged in the courts with varying
results. In addition, some companies are developing and/or offering to these
private residential and commercial developments packages of telephony, data
and video services. The ability of the Company to compete for customers in
residential and commercial developments served by SMATV operators is
uncertain.
 
  The FCC and the Congress have adopted policies providing a more favorable
operating environment for new and existing technologies that provide, or have
the potential to provide, substantial competition to cable television systems.
These technologies include, among others, DBS service, whereby signals are
transmitted by satellite to receiving facilities located on customer premises.
Programming is currently available to the owners of DBS dishes through
conventional, medium and high-powered satellites. DBS systems are increasing
channel capacity and are providing movies, broadcast stations, and other
program services comparable to those of cable television systems. Currently,
Primestar Partners (a consortium comprised of cable operators and a satellite
company), DirecTV and EchoStar Communications Corp. ("EchoStar") are providing
nationwide DBS services, with each company offering in excess of 100 channels
of video programming to subscribers. There are other companies that are
currently providing or are planning to provide domestic DBS services. American
Sky Broadcasting ("ASkyB"), a joint venture between MCI Communications Corp.
("MCI") and The News Corporation Limited ("News Corp."), is currently
developing high-power DBS services. Primestar, News Corp., MCI and ASkyB
recently announced several agreements in which News Corp., MCI and ASkyB will
sell to Primestar two satellites under construction and MCI will assign to
Primestar (subject to various governmental approvals) an FCC DBS license. The
satellites to be sold to Primestar, when operational, are expected to be
capable of providing approximately 200 channels of DBS service in the United
States. In 1997, the Primestar partners announced an agreement to consolidate
their DBS assets into a new company. DBS providers provide significant
competition to cable service providers, including the Company.
 
                                      58

<PAGE>
 
  Digital satellite service ("DSS") offered by DBS systems currently has
certain advantages over cable systems with respect to programming and digital
quality, as well as disadvantages that include high up-front costs and a lack
of local programming, service and equipment distribution. Presently satellite
program providers are only authorized to provide the signals of television
network stations to subscribers who live in areas where over-the-air reception
of such signals cannot be received. EchoStar recently announced plans to offer
some local television signals in a limited number of markets. Efforts are
underway at the United States Copyright Office and in Congress to ensure that
such offerings are permissible under the Copyright law. Legislation recently
was introduced in Congress which would permit DBS operators to rebroadcast
local television signals upon compliance with certain requirements, including
market-specific must-carry requirements and compliance with programming black-
out obligations. The ability to provide local broadcast signals in DBS program
packages would provide substantial competition to the cable television
industry. The Company cannot predict whether such legislation will be passed,
or the effect that it will have on the Company's business. While DSS presents
a competitive threat, the Company currently has excess channel capacity
available in most of its systems, as well as strong local customer service and
technical support, which will enhance its ability to compete. By selectively
increasing channel capacities of systems to between 78 and 110 channels and
introducing new premium channels, pay-per-view and other services, the Company
will seek to maintain programming parity with DSS and competitive service
price points. The Company will continue to monitor closely the activity level
and the product and service needs of its customer base to counter potential
erosion of its market position or unit growth to DSS.
 
  Cable television systems also compete with wireless program distribution
services such as MMDS, which uses low power microwave frequencies to transmit
video programming over the air to customers. Additionally, the FCC recently
adopted new regulations allocating frequencies in the 28 GHz band for a new
multichannel wireless video service called Local Multipoint Distribution
Service that is similar to MMDS, and the FCC initiated spectrum auctions for
LMDS licenses in February 1998. Wireless distribution services generally
provide many of the programming services provided by cable systems, and
digital compression technology is likely to increase significantly the channel
capacity of such wireless systems. Because MMDS and LMDS service requires
unobstructed "line of sight" transmission paths, the ability of MMDS systems
to compete may be hampered in some areas by physical terrain and large
buildings. The Company is not aware of any significant MMDS operation
currently within its cable franchise service areas.
 
  The 1996 Telecom Act makes it easier for local exchange carriers ("LECs")
and others to provide a wide variety of video services competitive with
services provided by cable systems and to provide cable services directly to
subscribers. Other new technologies, including Internet-based services, may
become competitive with services that the Company may offer. See "Legislation
and Regulation." Various LECs currently are providing video programming
services within and outside their telephone service areas through a variety of
distribution methods, including both the deployment of broadband wire
facilities and the use of wireless transmission facilities. LECs also provide
access to interactive online computer services using conventional or
integrated service digital network ("ISDN") modems. Cable television systems
could be placed at a competitive disadvantage if the delivery of video
programming and interactive online computer services by LECs becomes
widespread, since LECs are not required, under certain circumstances, to
obtain local franchises to deliver such services or to comply with the variety
of obligations imposed upon cable television systems under such franchises.
Issues of cross-subsidization by LECs of video and telephony services also
pose strategic disadvantages for cable operators seeking to compete with LECs
that provide video services. The Company cannot predict the likelihood of
success of video service ventures by LECs or the impact on the Company of such
competitive ventures.
 
  LECs and other companies provide facilities for the transmission and
distribution to homes and businesses of interactive computer-based services,
including Internet access, as well as data and other non-video services. The
Company is planning to market high-speed Internet access and data transmission
in certain areas served by its cable systems. The high-speed cable modems that
will be used by the Company are capable of providing access to interactive
online information services, including the Internet, at faster speeds than
that of conventional or ISDN modems used by other service providers.
Competitors in this area may include LECs, Internet service providers, long
distance carriers, satellite companies, public utilities and others, many of
whom have more substantial financial resources than the Company. Several LECs
recently requested the FCC to fully deregulate
 
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packet-switched networks to allow the provision of high-speed broadband
services without regard to present LATA boundaries and other regulatory
restrictions. Regardless of whether this request is granted, the Company
expects that competition in the interactive online services area will be
significant. The Company cannot predict the likelihood of success of the
broadband services offered by the Company's competitors or the impact on the
Company of such competitive ventures.
 
  The 1996 Telecom Act directed the FCC to establish, and the FCC has adopted,
regulations and policies for the issuance of licenses for digital television
("DTV") to incumbent television broadcast licensees. DTV is expected to
deliver high definition television pictures, multiple digital-quality program
streams, as well as CD-quality audio programming and advanced digital
services, such as data transfer or subscription video. The FCC also has
authorized television broadcast stations to transmit textual and graphic
information useful both to consumers and businesses. The FCC also permits
commercial and noncommercial FM stations to use their subcarrier frequencies
to provide nonbroadcast services including data transmissions. The FCC
established an over-the-air Interactive Video and Data Service that will
permit two-way interaction with commercial and educational programming along
with informational and data services.
 
  Advances in communications technology as well as changes in the marketplace
and the regulatory and legislative environments are constantly occurring.
Thus, it is not possible to predict the effect that ongoing or future
developments might have on the cable industry or on the operations of the
Company.
 
EMPLOYEES
 
  The Company has 181 full-time employees and 8 part-time employees, none of
whom are represented by a labor union on the date hereof.
 
PROPERTIES
 
  A cable television system consists of three principal operating components.
The first component, known as the headend, receives television, radio and
information signals generally by means of special antennas and satellite earth
stations. The second component, the distribution network, which originates at
the headend and extends throughout the system's service area, consists of
microwave relays, coaxial or fiber optic cables and associated electronic
equipment placed on utility poles or buried underground. The third component
of the system is a "drop cable," which extends from the distribution network
into each customer's home and connects the distribution system to the
customer's television set. An additional component used in certain systems is
the home terminal device, or converter/descrambler, that expands channel
capacity to permit reception of more than twelve channels of programming on a
non-cable ready television set and permits the operator to control the
reception of program offerings by subscribers.
 
  The Company's principal physical assets consist of cable television systems,
including signal-receiving, encoding and decoding apparatus, headends,
distribution systems and subscriber house drop equipment for each of the
Systems. The signal receiving apparatus typically includes a tower, antennas,
ancillary electronic equipment and earth stations for reception of satellite
signals. Headends, consisting of associated electronic equipment necessary for
the reception, amplification and modulation of signals, typically are located
near the receiving devices. The Company's distribution systems consist
primarily of coaxial cable, fiber optic cable and related electronic
equipment. As upgrades are completed, the Systems will continue to incorporate
fiber optic cable. Subscriber equipment consists of house drops,
converters/descramblers and, in some cases, traps. The Company owns its
distribution systems, various office fixtures, test equipment and certain
service vehicles. The physical components of the Systems require maintenance
and periodic upgrading to keep pace with technological advances.
 
  The Company's cables are generally attached to utility poles under pole
rental agreements with local public utilities, although in some areas the
distribution cable is buried in trenches or placed in underground ducts. The
 
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FCC regulates most pole attachment rates under the Federal Pole Attachment Act
although in certain cases attachment rates are regulated by state law.
 
  The Company owns or leases 27 parcels of real property for signal reception
sites (antenna towers and headends), microwave complexes and business offices.
The Company believes that its properties, both owned and leased, are in good
condition and are suitable and adequate for the Company's business operations
as presently conducted.
 
LEGAL PROCEEDINGS
 
  As of the date hereof, the Company is not a party to any litigation
proceedings. The Systems are subject to certain litigation proceedings
incidental to their businesses. Pursuant to the Asset Purchase Agreement, the
Company did not assume any liabilities related to litigation commenced on or
prior to the Acquisition Date, and Time Warner has agreed to indemnify the
Company from and against any such liabilities, subject to the terms and
provisions of the Asset Purchase Agreement. See "The Company--Asset Purchase
Agreement." The Company's management believes that the outcome of all pending
legal proceedings will not, individually or in the aggregate, have a material
adverse effect on the Company's business, results of operations or financial
condition.
 
                          LEGISLATION AND REGULATION
 
  The cable television industry currently is regulated by the FCC and certain
state and local governments. In addition, legislative and regulatory proposals
under consideration by the Congress and federal agencies may materially affect
the cable television industry.
 
  The Cable Acts and the 1996 Telecom Act amended the Communications Act and
established a national policy to guide the development and regulation of cable
television systems. The 1996 Telecom Act, which became effective in February
1996, was the most comprehensive reform of the nation's telecommunications
laws since the Communications Act. Although the long term goal of the 1996
Telecom Act is to promote competition and decrease regulation of various
communications industries, in the short term, the law delegates to the FCC
(and in some cases to the states) broad new rulemaking authority. Principal
responsibility for implementing the policies of the Cable Acts and the 1996
Telecom Act is allocated between the FCC and state or local franchising
authorities. The FCC and state regulatory agencies are required to conduct
numerous rulemaking and regulatory proceedings to implement the 1996 Telecom
Act and such proceedings may materially affect the cable television industry.
The following is a summary of federal laws and regulations materially
affecting the growth and operation of the cable television industry and a
description of certain state and local laws.
 
THE COMMUNICATIONS ACT AND FCC REGULATIONS
 
  Rate Regulation
 
  The 1992 Cable Act authorized rate regulation for certain cable
communications services and equipment in communities that are not subject to
"effective competition" as defined by federal law. Most cable television
systems are now subject to rate regulation for basic cable service and
equipment by local officials under the oversight of the FCC which prescribed
detailed guidelines for such rate regulation. The 1992 Cable Act also required
the FCC to resolve complaints about rates for nonbasic cable programming
services (other than programming offered on a per channel or per program
basis) and to reduce any such rates found to be unreasonable. The 1996 Telecom
Act eliminates the right of individual customers to file rate complaints with
the FCC concerning certain CPSTs and requires the FCC to issue a final order
within 90 days after receipt of CPST rate complaints filed by any franchising
authority after the date of enactment of the 1996 Telecom Act. The 1992 Cable
Act limits the ability of cable television systems to raise rates for basic
and certain cable programming services (collectively, the "Regulated
Services"). Cable services offered on a per channel (a la carte) or per
program (pay-per-view) basis are not subject to rate regulation by either
local franchising authorities or the FCC.
 
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  The 1996 Telecom Act deregulates rates for CPSTs after March 31, 1999 for
most MSOs and, for certain small cable operators, immediately eliminates rate
regulation of CPSTs and, in certain circumstances, basic services and
equipment. Deregulation will occur sooner for systems in markets where
comparable video programming services, other than DBS, are offered by local
telephone companies, or their affiliates, or by third parties using the local
telephone company's facilities, or where "effective competition" is
established under the 1992 Cable Act. The 1996 Telecom Act also modifies the
uniform rate provisions of the 1992 Cable Act by prohibiting regulation of
non-predatory bulk discount rates offered to subscribers in commercial and
residential developments and permits regulated equipment rates to be computed
by aggregating costs of broad categories of equipment at the franchise,
system, regional or company level. The FCC and Congress continue to be
concerned that cable rates are rising too rapidly. The FCC has begun to
explore ways of addressing this issue, and a bill was recently introduced in
Congress which would repeal the deregulation of CPSTs now scheduled for March
1999.
 
  The FCC's regulations govern rates that may be charged to subscribers for
Regulated Services. The FCC uses a benchmark methodology as the principal
method of regulating rates for Regulated Services. Cable operators may also
justify rates using a cost-of-service methodology. The FCC has also adopted
comprehensive and restrictive regulations allowing operators to modify their
regulated rates on a quarterly or annual basis using various methodologies
that account for changes in the number of regulated channels, inflation, and
increases in certain external costs, such as franchise and other governmental
fees, copyright and retransmission consent fees, taxes, programming fees and
franchise related obligations. The FCC's regulations also permit cable
operators to create new programming packages, called new product tiers
("NPTs"), that are not subject to rate regulation upon compliance with certain
conditions, including affirmatively marketing NPT services and adding to an
NPT only new services which had not been previously carried by the system in
the past two years, among other conditions. The Company cannot predict whether
the FCC will modify these comprehensive regulations in the future.
 
  The 1996 Telecom Act provides for the deregulation of the CPST of certain
cable systems owned by "small cable operators." Among other requirements, an
eligible small operator is one which does not serve, directly or through an
affiliate, one percent or more of cable subscribers nationwide and is not
affiliated with any entity or entities whose gross annual revenues aggregate
more than $250,000,000. The Company will not be eligible for small cable
operator status under the 1996 Telecom Act because the Morgan Stanley Entities
own more than 20% of the Company and those investors and their affiliated
companies have aggregated revenues in excess of $250,000,000.
 
  In addition to rate deregulation for certain small cable operators under the
1996 Telecom Act, the FCC adopted regulations in June 1995 ("Small System
Regulations") pursuant to the 1992 Cable Act that were designed to reduce the
substantive and procedural burdens of rate regulation on "small cable
systems." For purposes of these FCC regulations, a "small cable system" is a
system serving 15,000 or fewer subscribers that is owned by or affiliated with
a cable company which serves, in the aggregate, 400,000 or fewer subscribers.
Under the FCC's Small System Regulations, qualifying systems may justify their
regulated service and equipment rates using a simplified cost-of-service
formula. The regulatory benefits accruing to qualified small cable systems
under certain circumstances remain effective even if such systems are later
acquired by a larger cable operator that serves in excess of 400,000
subscribers. Various franchising authorities and municipal groups have
requested the FCC to reconsider its Small System Regulations. Renaissance
Media's assumption of Time Warner's Social Contract precludes such exemption
from rate regulation for systems that serve 15,000 or fewer subscribers, but
ameliorates the effect of such preclusion by permitting the Company to benefit
from automatic rate adjustments during the term of the Social Contact for all
of the Systems acquired from Time Warner. The Company will have the right to
increase monthly CPST rates by $1.00 during each year of the Social Contact
above other permissible increases resulting from inflation and so-called
"external costs."
 
  Franchising authorities are empowered to regulate the rates charged for
additional outlets and for the installation, lease and sale of equipment used
by customers to receive the basic service tier, such as converter boxes and
remote control units. The FCC's rules require franchising authorities to
regulate these rates on the
 
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basis of actual cost plus a reasonable profit as defined by the FCC. The FCC's
regulations permit operators to compute regulated equipment rates by
aggregating costs of broad categories of equipment at the franchise, system,
regional or company level.
 
  Cable operators required to reduce rates may also be required to refund
overcharges with interest. Rate reductions will not be required where a cable
operator can demonstrate that rates for Regulated Services are reasonable
using the FCC's cost-of-service rate regulations which require, among other
things, the exclusion of 34% of system acquisition costs related to intangible
and tangible assets used to provide Regulated Services. The FCC's cost-of-
service regulations contain a rebuttable presumption of an industry-wide
11.25% after-tax rate of return on an operator's allowable rate base, but the
FCC has initiated a further rulemaking in which it proposes to use an
operator's actual debt cost and capital structure to determine an operator's
cost of capital or rate of return.
 
  "Anti-Buy Through" Provisions
 
  The 1992 Cable Act also requires cable systems to permit customers to
purchase video programming offered by the operator on a per channel or a per
program basis without the necessity of subscribing to any tier of service,
other than the basic service tier, unless the system's lack of addressable
converter boxes or other technological limitations does not permit it to do
so. The statutory exemption for cable systems that do not have the
technological capacity to offer programming in the manner required by the
statute is available until a system obtains such capability, but not later
than December 2002. The FCC may waive such time periods, if deemed necessary.
Most of the Company's cable systems do not have the technological capability
to offer programming in the manner required by the statute and currently are
exempt from complying with the requirement.
 
  Must Carry/Retransmission Consent
 
  The 1992 Cable Act contains broadcast signal carriage requirements that
allow local commercial television broadcast stations to elect once every three
years to require a cable system to carry the station, subject to certain
exceptions, or to negotiate for "retransmission consent" to carry the station.
A cable system generally is required to devote up to one-third of its
activated channel capacity for the carriage of local commercial television
stations whether pursuant to the mandatory carriage or retransmission consent
requirements of the 1992 Cable Act. Local noncommercial television stations
are also given mandatory carriage rights; however, such stations are not given
the option to negotiate retransmission consent for the carriage of their
signals by cable systems. Additionally, cable systems are required to obtain
retransmission consent for all "distant" commercial television stations
(except for commercial satellite-delivered independent "superstations" such as
WGN), commercial radio stations and certain low power television stations
carried by such systems after October 1993. In March 1997, the U.S. Supreme
Court affirmed a three-judge district court decision upholding the
constitutional validity of the 1992 Cable Act's mandatory signal carriage
requirements. The FCC will conduct a rulemaking in the future to consider the
requirements, if any, for mandatory carriage of DTV signals. The Company
cannot predict the ultimate outcome of such a rulemaking or the impact of new
carriage requirements on the Company or its business. As a result of the
mandatory carriage rules, some of the Systems have been required to carry
television broadcast stations that otherwise would not have been carried and
may be required to displace possibly more attractive programming. The
retransmission consent rules have resulted in the deletion of certain local
and distant television broadcast stations which various Systems were carrying.
To the extent retransmission consent fees must be paid for the continued
carriage of certain television stations, the Company's cost of doing business
will increase with no assurance that such fees can be recovered through rate
increases.
 
  Designated Channels
 
  The Communications Act permits franchising authorities to require cable
operators to set aside certain channels for public, educational and
governmental access programming. Federal law also requires a cable system with
36 or more activated channels to designate a portion of its channel capacity
for commercial leased access by third parties to provide programming that may
compete with services offered by the cable operator. The U.S.
 
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Supreme Court has upheld the statutory right of cable operators to prohibit or
limit the provision of indecent or obscene programming on commercial leased
access channels. The FCC has adopted rules regulating: (i) the maximum
reasonable rate a cable operator may charge for commercial use of the
designated channel capacity; (ii) the terms and conditions for commercial use
of such channels; and (iii) the procedures for the expedited resolution of
disputes concerning rates or commercial use of the designated channel
capacity.
 
  Franchise Procedures
 
  The 1984 Cable Act affirms the right of franchising authorities (state or
local, depending on the practice in individual states) to award one or more
franchises within their jurisdictions and prohibits non-grandfathered cable
systems from operating without a franchise in such jurisdictions. The 1992
Cable Act encourages competition with existing cable systems by (i) allowing
municipalities to operate their own cable systems without franchises, (ii)
preventing franchising authorities from granting exclusive franchises or
unreasonably refusing to award additional franchises covering an existing
cable system's service area, and (iii) prohibiting (with limited exceptions)
the common ownership of cable systems and co-located MMDS or SMATV systems. In
January 1995, the FCC relaxed its restrictions on ownership of SMATV systems
to permit a cable operator to acquire SMATV systems in the operator's existing
franchise area so long as the programming services provided through the SMATV
system are offered according to the terms and conditions of the cable
operator's local franchise agreement. The 1996 Telecom Act provides that the
cable/SMATV and cable/MMDS cross-ownership rules do not apply in any franchise
area where the cable operator faces "effective competition" as defined by
federal law. The 1996 Telecom Act also permits local telephone companies to
provide video programming services as traditional cable operators with local
franchises.
 
  The 1984 Cable Act also provides that in granting or renewing franchises,
local authorities may establish requirements for cable-related facilities and
equipment, but not for video programming or information services other than in
broad categories. The 1984 Cable Act limits franchise fees to 5% of cable
system revenue derived from the provision of cable services and permits cable
operators to obtain modification of franchise requirements by the franchising
authority or judicial action if warranted by changed circumstances. The
Company's franchises typically provide for payment of fees to franchising
authorities in the range of 3% to 5% of "revenue" (as defined by each
franchise agreement). Recently, a federal appellate court held that a cable
operator's gross revenue includes all revenue received from subscribers,
without deduction, and overturned an FCC order which had held that a cable
operator's gross revenue does not include money collected from subscribers
that is allocated to pay local franchise fees. The 1996 Telecom Act generally
prohibits franchising authorities from: (i) imposing requirements in the cable
franchising process that require, prohibit or restrict the provision of
telecommunications services by an operator; (ii) imposing franchise fees on
revenue derived by the operator from providing telecommunications services
over its cable system; or (iii) restricting an operator's use of any type of
subscriber equipment or transmission technology.
 
  The 1984 Cable Act provides for, among other things, procedural and
substantive safeguards for cable operators and creates an orderly franchise
renewal process in which renewal of franchise licenses issued by governmental
authorities cannot be unreasonably withheld, or, if renewal is withheld and
the franchise authority acquires ownership of the system or effects a transfer
of the system to another person, such franchise authority or other person must
pay the operator either: (i) the "fair market value" (without value assigned
to the franchise) for the system if the franchise was granted after the
effective date of the 1984 Cable Act (December 1984) or the franchise was pre-
existing but the franchise agreement did not provide a buyout or (ii) the
price set in franchise agreements predating the 1984 Cable Act. In addition,
the 1984 Cable Act established comprehensive renewal procedures which require
that an incumbent franchisee's renewal application be assessed on its own
merits and not as part of a comparative process with competing applications.
The 1984 Cable Act also establishes buyout rates in the event the franchise is
terminated "for cause" and the franchise authority desires to acquire the
system. For franchises which post-date the existence of the 1984 Cable Act or
pre-date the 1984 Cable Act but do not specify buyout terms, the franchise
authority must pay the operator an "equitable" price. As amended by the 1996
Telecom Act, the 1984 Cable Act permits the cable operator to seek
renegotiation and modification of franchise requirements if warranted by
changed circumstances.
 
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  The 1992 Cable Act made several changes to the renewal process which could
make it easier for a franchising authority to deny renewal. Moreover, even if
the franchise is renewed, the franchising authority may seek to impose new and
more onerous requirements such as significant upgrades in facilities and
services or increased franchise fees as a condition of renewal. Similarly, if
a franchising authority's consent is required for the purchase or sale of a
cable system or franchise, such authority may attempt to impose more
burdensome or onerous franchise requirements in connection with a request for
such consent. Historically, franchises have been renewed for cable operators
that have provided satisfactory services and have complied with the terms of
their franchises. Most of the Company's franchises can be terminated prior to
their stated expirations for uncured breaches of material provisions.
 
  Various courts have considered whether franchising authorities have the
legal right to limit franchise awards to a single cable operator and to impose
certain substantive franchise requirements (i.e., access channels, universal
service and other technical requirements). These decisions have been somewhat
inconsistent and, until the U.S. Supreme Court rules definitively on the scope
of cable operators' First Amendment protections, the legality of the
franchising process generally and of various specific franchise requirements
is likely to be in a state of flux.
 
  Ownership Limitations
 
  Pursuant to the 1992 Cable Act, the FCC adopted rules prescribing national
customer limits and limits on the number of channels that can be occupied on a
cable system by a video programmer in which the cable operator has an
attributable interest. The FCC's horizontal ownership limits have been stayed
because a federal district court found the statutory limitation to be
unconstitutional. An appeal of that decision is pending and has been
consolidated with an appeal of the FCC's regulations which implemented the
national customer and channel limitation provisions of the 1992 Cable Act. The
1996 Telecom Act eliminates the statutory prohibition on the common ownership,
operation or control of a cable system and a television broadcast station in
the same service area and directs the FCC to eliminate its regulatory
restrictions on cross-ownership of cable systems and national broadcasting
networks and to review its broadcast-cable ownership restrictions to determine
if they are necessary in the public interest. Pursuant to the mandate of the
1996 Telecom Act, the FCC eliminated its regulatory restriction on cross-
ownership of cable systems and national broadcasting networks. In March 1998,
the FCC initiated a rulemaking proceeding to determine whether the cable
television/broadcast cross-ownership ban is necessary and in the public
interest or should be eliminated.
 
  Telephone Company Ownership of Cable Systems
 
  The 1996 Telecom Act makes far-reaching changes in the regulation of
telephone companies that provide video programming services. The new law
eliminates federal legal barriers to competition in the local telephone and
cable communications businesses, preempts legal barriers to competition that
previously existed in state and local laws and regulation and sets basic
standards for relationships between telecommunications providers. The 1996
Telecom Act eliminates the requirement that LECs obtain FCC approval under
Section 214 of the Communications Act before providing video services in their
telephone service areas and removes the statutory telephone company/cable
television cross-ownership prohibition, thereby allowing LECs to offer video
services in their telephone service areas. LECs may provide service as
traditional cable operators with local franchises or they may opt to provide
their programming over unfranchised "open video systems," subject to certain
conditions, including, but not limited to, setting aside a portion of their
channel capacity for use by unaffiliated program distributors on a non-
discriminatory basis.
 
  The 1996 Telecom Act generally limits acquisitions and prohibits certain
joint ventures between LECs and cable operators in the same market. There are
some statutory exceptions to the buy-out and joint venture prohibitions,
including exceptions for certain small cable systems (as defined by federal
law) and for cable
 
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systems or telephone facilities serving certain rural areas, and the FCC is
authorized to grant waivers of the prohibitions under certain circumstances.
The FCC adopted regulations implementing the 1996 Telecom Act requirement that
LECs open their telephone networks to competition by providing competitors
interconnection, access to unbundled network elements and retail services at
wholesale rates. Numerous parties appealed these regulations. The U.S. Court
of Appeals for the Eighth Circuit, where the appeals were consolidated,
recently vacated key portions of the FCC's regulations, including the FCC's
pricing and nondiscrimination rules, and in January 1998, the United States
Supreme Court agreed to review the lower court's decision. SBC Communications,
Inc. also filed suit in Texas seeking to overturn the long distance entry
provisions of the 1996 Telecom Act on constitutional grounds and obtained a
favorable decision from the U.S. District Court in Wichita Falls, Texas. This
decision has been stayed pending appeal. The ultimate outcome of the
litigation and the FCC's rulemakings, and the ultimate impact of the 1996
Telecom Act or any final regulations adopted pursuant to the new law on the
Company or its business cannot be determined at this time.
 
  Pole Attachment
 
  The Communications Act requires the FCC to regulate the rates, terms and
conditions imposed by public utilities for cable systems' use of utility pole
and conduit space unless state authorities can demonstrate that they
adequately regulate pole attachment rates, as is the case in Louisiana. In the
absence of state regulation, the FCC administers pole attachment rates through
the use of a formula that it has devised. In some cases, utility companies
have increased pole attachment fees for cable systems that have installed
fiber optic cables and that are using such cables for the distribution of
nonvideo services. The FCC concluded that, in the absence of state regulation,
it has jurisdiction to determine whether utility companies have justified
their demand for additional rental fees and that the Communications Act does
not permit disparate rates based on the type of service provided over the
equipment attached to the utility's pole. The 1996 Telecom Act and the FCC's
implementing regulations modify the current pole attachment provisions of the
Communications Act by immediately permitting certain providers of
telecommunications services to rely upon the protections of the current law
and by requiring that utilities provide cable systems and telecommunications
carriers with nondiscriminatory access to any pole, conduit or right-of-way
controlled by the utility. The FCC recently initiated a rulemaking to consider
revisions to its existing rate formula, which revisions may increase the fees
paid by cable operators to utilities for pole attachments and conduit space.
Additionally, in February 1998, the FCC adopted new regulations to govern the
charges for pole attachments used by companies providing telecommunications
services, including cable operators. Several parties have requested the FCC to
reconsider some provisions of its new regulations. These new pole attachment
rate regulations will become effective five years after enactment of the 1996
Telecom Act, and any increase in attachment rates resulting from the FCC's new
regulations will be phased in equal annual increments over a period of five
years beginning on the effective date of the new FCC regulations. The ultimate
outcome of these rulemakings and the ultimate impact of any revised FCC rate
formula or of any new pole attachment rate regulations on the Company or its
business cannot be determined at this time.
 
  Other Statutory Provisions
 
  The 1992 Cable Act, the 1996 Telecom Act and FCC regulations preclude a
satellite video programmer affiliated with a cable company, or with a common
carrier providing video programming directly to customers, from favoring an
affiliated company over competitors and require such a programmer to sell its
programming to other multichannel video distributors. These provisions limit
the ability of cable program suppliers affiliated with cable companies or with
common carriers providing satellite-delivered video programming directly to
customers to offer exclusive programming arrangements to their affiliates. The
1992 Cable Act requires operators to block fully both the video and audio
portion of sexually explicit or indecent programming on channels that are
primarily dedicated to sexually oriented programming or, alternatively, to
carry such programming only at "safe harbor" time periods currently defined by
the FCC as the hours between 10 p.m. to 6 a.m. Several adult-oriented cable
programmers have challenged the constitutionality of this statutory provision,
but the U.S. Supreme Court recently refused to overturn a lower court's denial
of a preliminary injunction motion seeking to enjoin the enforcement of this
law. The 1996 Telecom Act also contains provisions regulating the content of
video programming and computer services and specifically prohibits the use of
computer services to transmit "indecent" material to minors. The United States
Supreme Court has found these provisions unconstitutional to
 
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the extent they regulated the transmission of indecent material. The
Communications Act also includes provisions, among others, concerning
horizontal and vertical ownership of cable systems, customer service, customer
privacy, marketing practices, equal employment opportunity, technical
standards, and consumer equipment compatibility.
 
  Other FCC Regulations
 
  The FCC has numerous rulemaking proceedings pending that will implement
various provisions of the 1996 Telecom Act; it also has adopted regulations
implementing various provisions of the 1992 Cable Act and the 1996 Telecom Act
that are the subject of petitions requesting reconsideration of various
aspects of its rulemaking proceedings. In addition to the FCC regulations
noted above, there are other FCC regulations covering such areas as equal
employment opportunity, syndicated program exclusivity, network program
nonduplication, closed captioning of video programming, registration of cable
systems, maintenance of various records and public inspection files, microwave
frequency usage, lockbox availability, origination cablecasting and
sponsorship identification, antenna structure notification, marking and
lighting, carriage of local sports broadcast programming, application of rules
governing political broadcasts, limitations on advertising contained in
nonbroadcast children's programming, consumer protection and customer service,
ownership of home wiring and MDU building inside wiring, indecent programming,
programmer access to cable systems, programming agreements, technical
standards and consumer electronics equipment compatibility. The FCC has the
authority to enforce its regulations through the imposition of substantial
fines, the issuance of cease and desist orders and/or the imposition of other
administrative sanctions, such as the revocation of FCC licenses needed to
operate certain transmission facilities often used in connection with cable
operations.
 
  The 1992 Cable Act, the 1996 Telecom Act and the FCC's rules implementing
these statutory provisions generally have increased the administrative and
operational expenses of cable systems and have resulted in additional
regulatory oversight by the FCC and local franchise authorities. The Company
will continue to develop strategies to minimize the adverse impact that the
FCC's regulations and the other provisions of the 1992 Cable Act and the 1996
Telecom Act have on the Company's business. However, no assurances can be
given that the Company will be able to develop and successfully implement such
strategies to minimize the adverse impact of the FCC's rate regulations, the
1992 Cable Act or the 1996 Telecom Act on the Company's business.
 
THE SOCIAL CONTRACT
 
  The Social Contract between Time Warner and the FCC, which became effective
on January 1, 1996, resolved certain outstanding cable rate cases involving
Time Warner that arose in connection with regulations promulgated by the FCC
pursuant to the 1992 Cable Act. The Social Contract established parameters
within which Time Warner and subsequent buyers of Time Warner's cable
television systems might determine certain subscriber rates and maintain a
high level of technical capacity in such systems. Among other obligations,
Time Warner agreed to upgrade one-half of its systems to 550 MHz capacity and
the balance to 750 MHz capacity within the term of the Social Contract of
which at least 200 MHz is expected to be allocated to digital compression
technology by January 1, 2001. In exchange, the Social Contract settled those
certain outstanding rate cases and established a right of Time Warner to
increase monthly CPST rates by an additional $1.00 per year above other
permissible increases resulting from inflation and so-called "external costs"
for the term of the Social Contract through the year 2000. The Social Contract
provides that Time Warner may petition the FCC to modify or terminate the
Social Contract based on any relevant change in applicable law, regulation or
circumstance.
 
  In connection with the Acquisition, the Company received the FCC's consent
to the assignment of the Social Contract as it applies to the Systems. By
assuming Time Warner's unsatisfied obligations with respect to the System, the
Company will gain certain rate benefits described above. The principal
remaining obligations of the Social Contract as they relate to the Systems
will be to upgrade the Tennessee System, the St. Landry system and
approximately one-half of the St. Tammany and Lafourche systems to 750 MHz
capacities. The failure to comply with the Social Contract's upgrade
requirements will subject the Company to refund liability under the
 
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terms of the Social Contract. The Company is also required to ensure that at
least 60% of new analog services in the Systems are added to the CPST and add
at least 15 new channels on average (weighted by CPST subscribers) to the CPST
of the Systems. The Company believes the upgrades are prudent both due to the
competitive advantages to be gained by technologically advanced facilities and
from the rate increases the Company will be permitted to implement.
 
COPYRIGHT
 
  Cable systems are subject to federal copyright licensing covering carriage
of television and radio broadcast signals. In exchange for filing certain
reports and contributing a percentage of their revenue to a federal copyright
royalty pool, cable operators can obtain blanket permission to retransmit
copyrighted material on broadcast signals. The nature and amount of future
payments for broadcast signal carriage cannot be predicted at this time. In a
recent report to Congress, the Copyright Office recommended that Congress make
major revisions of both the cable television and satellite compulsory licenses
to make them as simple as possible to administer, to provide copyright owners
with full compensation for the use of their works, and to treat every
multichannel video delivery system the same, except to the extent that
technological differences or differences in the regulatory burdens placed upon
the delivery system justify different copyright treatment. The possible
simplification, modification or elimination of the compulsory copyright
license is the subject of continuing legislative review. The elimination or
substantial modification of the cable compulsory license could adversely
affect the Company's ability to obtain suitable programming and could
substantially increase the cost of programming that remained available for
distribution to the Company's customers. The Company cannot predict the
outcome of this legislative activity.
 
  Cable operators distribute programming and advertising that use music
controlled by the two major music performing rights organizations, ASCAP and
BMI. In October 1989, the special rate court of the U.S. District Court for
the Southern District of New York imposed interim rates on the cable
industry's use of ASCAP-controlled music. The same federal district court
recently established a special rate court for BMI. BMI and certain cable
industry representatives recently concluded negotiations for a standard
licensing agreement covering the usage of BMI music contained in advertising
and other information inserted by operators into cable programming and on
certain local access and origination channels carried on cable systems. ASCAP
and cable industry representatives have met to discuss the development of a
standard licensing agreement covering ASCAP music in local origination and
access channels and pay-per-view programming. Although the Company cannot
predict the ultimate outcome of these industry negotiations or the amount of
any license fees it may be required to pay for past and future use of ASCAP-
controlled music, it does not believe such license fees will be material to
the Company's operations.
 
STATE AND LOCAL REGULATION
 
  Cable systems are subject to state and local regulation, typically imposed
through the franchising process, because they use local streets and rights-of-
way. Regulatory responsibility for essentially local aspects of the cable
business such as franchisee selection, billing practices, system design and
construction, and safety and consumer protection remains with either state or
local officials and, in some jurisdictions, with both.
 
  Cable systems generally are operated pursuant to nonexclusive franchises,
permits or licenses granted by a municipality or other state or local
government entity. Franchises generally are granted for fixed terms and in
many cases are terminable if the franchisee fails to comply with material
provisions. The terms and conditions of franchises vary materially from
jurisdiction to jurisdiction. Each franchise generally contains provisions
governing payment of franchise fees, franchise term, system construction and
maintenance obligations, system channel capacity, design and technical
performance, customer service standards, franchise renewal, sale or transfer
of the franchise, territory of the franchisee, indemnification of the
franchising authority, use and occupancy of public streets and types of cable
services provided. A number of states subject cable systems to the
jurisdiction of centralized state governmental agencies, some of which impose
regulation of a character similar to that of a public utility. Attempts in
other states to regulate cable systems are continuing and can be expected
 
                                      68

<PAGE>
 
to increase. To date, Louisiana, Mississippi and Tennessee have not enacted
such state level regulation. However, a bill which was pending in the 1997
term of the Louisiana legislature and which provided for the certification and
regulation of cable television systems by the PUC was not re-introduced in the
1998 term. The bill, if adopted, would have (i) allowed the PUC to void, order
new rates or reduce rates found to be discriminatory or necessary to reflect
adequate service; (ii) required that all cable television systems commencing
or expanding service be franchised conditioned upon confirmation by the PUC;
and (iii) provided the PUC with the authority to order construction,
operation, or an extension of cable service on such terms and conditions as it
deems reasonable where cable service has been unreasonably delayed or
withheld. However, this bill could be re-introduced for the 1999 legislative
session, which begins on the last Monday of March 1999. During its 1997-1998
session, the Tennessee legislature considered a bill which would authorize
municipalities operating electric utility plants and electric cooperatives
authorization to provide cable television and other services. A second bill
which was also considered would authorize six pilot municipal electric systems
to provide cable television and other services. Though the authorization will
terminate on June 30, 2001, any system actually providing such services to
customers as a pilot system prior to that date will be permitted to continue
doing so indefinitely. Neither of these bills has been enacted by the
Tennessee legislature. A bill which was pending in the Mississippi legislature
and which would have prohibited landlords and condominium boards from
preventing any tenant of a dwelling unit or condominium owner from procuring
cable television service from a cable television system operating pursuant to
a written franchise agreement with a municipality or county lapsed in the
senate Public Utilities Committee on March 3, 1998. The Company cannot predict
whether any of the states in which it currently operates will engage in such
regulation in the future. State and local franchising jurisdiction is not
unlimited, however, and must be exercised consistently with federal law. The
1992 Cable Act immunizes franchising authorities from monetary damage awards
arising from regulation of cable systems or decisions made on franchise
grants, renewals, transfers and amendments.
 
  The foregoing does not purport to describe all present and proposed federal,
state, and local regulations and legislation affecting the cable industry.
Other existing federal regulations, copyright licensing, and, in many
jurisdictions, state and local franchise requirements, are currently the
subject of judicial proceedings, legislative hearings and administrative and
legislative proposals which could change, in varying degrees, the manner in
which cable systems operate. Neither the outcome of these proceedings nor the
impact on the cable communications industry or the Company can be predicted at
this time.
 
                                      69

<PAGE>
 
                       CERTAIN ORGANIZATIONAL DOCUMENTS
 
  Holdings was formed under the laws of the State of Delaware on November 5,
1997, pursuant to a Limited Liability Company Agreement dated as of November
14, 1997, as amended (the "Holdings Operating Agreement"). Renaissance Media
was formed under the laws of the State of Delaware on November 24, 1997
pursuant to a Limited Liability Company Agreement dated as of February 13,
1998 (the "Media Operating Agreement"). The Guarantor, Renaissance Louisiana
and Renaissance Tennessee were formed under the laws of the State of Delaware
on March 13, 1998, January 7, 1998 and January 7, 1998 pursuant to separate
Limited Liability Company Agreements, each dated as of March 20, 1998
(collectively, together with the Media Operating Agreement, the "Group
Operating Agreements"), and Renaissance Capital was incorporated under the
laws of the State of Delaware on March 12, 1998. Holdings, the Guarantor,
Renaissance Louisiana, Renaissance Tennessee and Renaissance Media are each
governed by a Board of Representatives, and Renaissance Capital is governed by
a Board of Directors. Pursuant to the Holdings Operating Agreement and the
Media Operating Agreement, the Morgan Stanley Entities and the Management
Investors each have the right to appoint three Representatives (only one of
whom shall have the right to cast votes) to each of the Holdings Board of
Representatives and the Renaissance Media Board of Representatives, and Time
Warner has the right to appoint one Representative to each of the Holdings
Board of Representatives and the Renaissance Media Board of Representatives.
Representatives on such Boards who have the right to vote shall have the right
to cast votes which are proportional to the respective equity ownership
interests in Holdings of the entities which appointed them.
 
  Each Representative or voting Representative is authorized to act only as
directed by the appointing entity. The Boards of Representatives of Holdings
and Renaissance Media will approve all significant actions taken by Holdings
and Renaissance Media, respectively, including: (i) the modification of their
respective long-term business strategy or scope; (ii) the approval of their
respective capital and operating budgets and strategic plans; (iii) subject to
certain conditions, the issuance of additional equity or the sale, repurchase
or redemption of outstanding equity; and (iv) any financings or refinancings
or other matters affecting Holdings' or Renaissance Media's capital structure,
respectively. Subject to certain exceptions, the Management Investors and Time
Warner may not transfer their interests in Holdings without prior approval of
the Morgan Stanley Entities. Each of the Management Investors and Time Warner
have certain tag-along rights and the Morgan Stanley Entities have certain
drag-along rights with respect to any sale of equity interests in Holdings by
the Morgan Stanley Entities.
 
  Each of the Guarantor, Renaissance Louisiana, Renaissance Tennessee and
Renaissance Capital is managed by a Board consisting of at least one
individual, initially Fred Schulte.
 
                                      70

<PAGE>
 
                                  MANAGEMENT
 
BOARDS OF REPRESENTATIVES, BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
 
  The following table sets forth certain information concerning the members of
the Boards of Representatives and executive officers of Holdings and
Renaissance Media. See "Certain Organizational Documents." All persons
specified as executive officers of Holdings and Renaissance Media also hold
such offices with the Guarantor and the Obligors.
 

<TABLE>
<CAPTION>
          NAME           AGE (1)                     POSITION
          ----           -------                     --------
<S>                      <C>     <C>
Fred Schulte............    47   Representative and President, Chief Executive
                                  Officer and Chairman(2)
Rodney Cornelius........    47   Representative and Vice Chairman
Michael J. Egan.........    45   Executive Vice President
Darlene Fedun...........    40   Executive Vice President
Mark Halpin.............    49   Representative, Executive Vice President, Chief
                                  Financial Officer and Treasurer
David L. Testa..........    49   Executive Vice President
Alan E. Goldberg........    43   Representative
Michael M. Janson.......    50   Representative
Amy Rosen Wildstein.....    27   Representative
Glenn A. Britt..........    49   Representative
</TABLE>

- --------
(1) As of March 20, 1998.
(2) Also a Representative of the Guarantor, Renaissance Louisiana and
    Renaissance Tennessee and a Director of Renaissance Capital.
 
  Fred Schulte, the President, Chief Executive Officer and Chairman, as well
as a founder of the Company, founded Renaissance Media Partners, L.L.C., the
predecessor of the Company ("RMP"), and has served as President since its
formation in 1996. From 1980 until January 1996, Mr. Schulte held several key
management positions, including Chief Operating Officer, at CVI. Mr. Schulte's
23-year career in the cable industry includes a number of field operations
positions with several companies, although the majority of his career was at
CVI. He has served as a Director of the Cable Television Association of New
York from 1986 to 1990.
 
  Rodney Cornelius, the Vice Chairman of Renaissance Media and a founder of
the Company and RMP, has worked as a cable television industry consultant to
RMP from January 1996 through November 1997 and previously served as the Vice
Chairman of CVI and held several other key management positions at CVI from
1980 to 1995. Before joining CVI, Mr. Cornelius was the Chief Operating
Officer of Robotics, Inc., and prior to that he spent ten years in public
accounting.
 
  Michael J. Egan, an Executive Vice President and a founder of the Company,
is a founder of RMP and spent over 15 years at CVI in various senior
management positions, most recently as Vice President of Programming and New
Product Development. Mr. Egan is the recipient of several cable industry
awards and was twice elected to the Board of Governors of the National Academy
of Cable Programming.
 
  Darlene Fedun, an Executive Vice President and a founder of the Company, is
also a founding member of RMP. Prior to her association with RMP, Ms. Fedun
served for 15 years in various marketing, sales and customer service functions
at CVI, where she was a Vice President of Operations. Ms. Fedun is an active
member of several cable industry groups including the Cable Television
Administration and Marketing Society and the Cable Television Human Resource
Association.
 
  Mark Halpin, an Executive Vice President, Chief Financial Officer and
Treasurer, as well as a founder of the Company and RMP, worked as a cable
television industry consultant to RMP from January 1996 through
 
                                      71

<PAGE>
 
November, 1997 and previously was Executive Vice President for Administration
at CVI since 1990. Mr. Halpin's professional career spans 18 years during
which he worked in a wide variety of industries as a partner at Arthur
Andersen, including being a member of Arthur Andersen's cable television
industry committee. Mr. Halpin is a member of the AICPA and the Connecticut
State Society of CPA's.
 
  David Testa, an Executive Vice President, a founder of the Company and one
of the founding members of RMP, served as a Vice President of CVI since 1987.
Mr. Testa's career in the cable industry spans 18 years with Warner Cable,
Teleprompter, Group W Cable and CVI. He has served on several national
industry committees and was a Director of the Cable Television Association of
New York.
 
  Alan E. Goldberg, the Head of the Morgan Stanley Dean Witter Private Equity
Group, has been a Managing Director of Morgan Stanley & Co. Incorporated since
January 1988. Mr. Goldberg is a Managing Director of Morgan Stanley Capital
Partners III, Inc., the general partner of the general partner of Morgan
Stanley Capital Partners III, L.P. He also serves as director of Catalytica,
Inc., Amerin Corporation, Jefferson Smurfit Corporation, Direct Response
Corporation, Homeowners Direct Corporation, Equant, N.V. and several private
companies.
 
  Michael M. Janson, a Managing Director of Morgan Stanley & Co. Incorporated
and of Morgan Stanley Capital Partners III, Inc., was previously a Managing
Director in Morgan Stanley's Global High Yield Capital Markets Group prior to
joining Morgan Stanley's Private Equity Group. He is also a director of
Jefferson Smurfit Corporation and American Color Graphics Inc.
 
  Amy Rosen Wildstein, an Associate of Morgan Stanley & Co. Incorporated and
of Morgan Stanley Capital Partners III, Inc., has been employed by Morgan
Stanley & Co. Incorporated since 1994. Ms. Wildstein was previously employed
by the Blackstone Group. She is also a director of The Compucare Company.
 
  Glenn A. Britt, the President of Time Warner Cable Ventures, was previously
Executive Vice President, Time Warner Cable, since 1990. From 1988 Mr. Britt
was a Vice President and Chief Financial Officer of Time Inc. until the merger
of Time Inc. and Warner Communications Inc. and Senior Vice President and
Treasurer of Time Warner Inc. from the date of such merger until 1990.
 
COMMITTEES OF THE BOARDS
 
  The Board of Representatives of Holdings is expected to have an Audit
Committee and a Compensation Committee, and the Board of Representatives of
Renaissance Media is expected to have at least two committees: (i) an Audit
Committee; and (ii) a Compensation Committee. The Audit Committees' primary
responsibilities will be to review and recommend to the Board internal
accounting and financial controls and the accounting principles and auditing
practices and procedures to be employed in preparation and review of financial
statements and to make recommendations concerning the engagement of
independent public accountants and the scope of the audit to be undertaken by
such accountants. The Compensation Committee's primary responsibilities will
be to review and recommend policies, practices and procedures relating to the
compensation of the officers and other managerial employees and the
establishment and administration of employee benefit plans, including the
Renaissance Media Executive Bonus Incentive Plan (the "Plan").
 
REPRESENTATIVE AND DIRECTOR COMPENSATION
 
  Representatives and Directors will not receive any compensation for their
services as Representatives/ Directors of Holdings, the Obligors, the
Guarantor and Renaissance Media. Representatives and Directors will be
reimbursed by the Company for their reasonable out-of-pocket expenses accrued
in connection with acting as Representatives and Directors.
 
APPOINTMENT OF EXECUTIVE OFFICERS
 
  Executive officers are appointed at the first meeting of the Boards of
Representatives/Directors after each annual meeting of members/stockholders
and are elected to serve until they resign or are removed, or are otherwise
disqualified to serve, or until their successors are elected and qualified.
 
 
                                      72

<PAGE>
 
EXECUTIVE COMPENSATION
 
  During 1998, Renaissance Media expects to pay Messrs. Schulte, Cornelius,
Egan, Halpin and Testa and Ms. Fedun annual base salaries of $225,000,
$225,000, $175,000, $175,000, $175,000 and $175,000, respectively. In
addition, such executives will be eligible to receive bonuses if certain
performance goals are met. See "--Executive Employment Arrangements" and "--
Executive Bonus Incentive Plan."
 
EXECUTIVE EMPLOYMENT ARRANGEMENTS
 
  Renaissance Media has entered into an employment agreement with each of the
Management Investors. Each of the employment agreements provides for an annual
base salary and an incentive bonus determined according to the Renaissance
Media Executive Bonus Incentive Plan. Each agreement has an initial term of
five years, except for that of Mr. Cornelius which has a one year initial
term. The initial terms will automatically be extended if a sale of
Renaissance Media is in process at the expiration of such term. Each
employment agreement may be terminated by the Company with or without cause or
upon an executive's continued disability. Each Management Investor may
terminate the employment agreement with or without good reason, including for
material reduction in position or responsibilities or termination of certain
other executives by Renaissance Media, other than for cause, subject to
certain exceptions. If an employment agreement is terminated by Renaissance
Media without cause or by the Management Investor with good reason,
Renaissance Media is obligated to pay the applicable Management Investor
(other than Mr. Cornelius), subject to certain exceptions, any accrued unpaid
base salary, any prior year bonus earned but not paid, a pro rata bonus for
the year in which the termination occurs and severance for the remainder of
the term of the agreement equal to the base salary and bonus at the annual
rate for the year prior to the termination. It is anticipated that Mr.
Cornelius will be entitled to one year severance payments upon his termination
without cause or for good reason. In certain circumstances where Renaissance
Media fails to meet certain financial targets, the term of severance may be
limited to the lesser of the remainder of the employment term and two years.
It is anticipated that Mr. Cornelius will be entitled to one year severance
payments in such circumstances. Pursuant to the terms of the employment
agreement, each Management Investor is subject to a (i) confidentiality
covenant, (ii) a non-compete covenant for a period from the date of the
employment agreement until the earlier of: (a) the expiration of the
employment term; (b) the last day of any period of severance payments; and (c)
two years following termination of employment; and (iii) for a period of two
years following termination of employment, a non-solicitation covenant.
 
  The exclusivity agreement between Renaissance Media and each of the
Management Investors permits the Management Investors to manage other cable
television systems after 2001 subject to first offering such acquisition
opportunities to the Morgan Stanley Entities.
 
EXECUTIVE BONUS INCENTIVE PLAN
 
  Renaissance Media has established the Plan to provide its executive
officers, including the Management Investors, and other key employees with
bonuses based upon the achievement of annual performance goals. The Plan will
be administered by the Compensation Committee of the Board of Renaissance
Media, consisting of at least three Representatives. The Compensation
Committee will establish performance goals based on the Company's EBITDA. The
award of bonuses will be based on the attainment of the Company's performance
goals and the performance of individual executives.
 
                                      73

<PAGE>
 
                CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
TRANSACTIONS WITH THE MORGAN STANLEY ENTITIES AND RELATED PARTIES
 
  In connection with the consummation of the Transactions, Renaissance Media
entered into the Senior Credit Facility with MSSF, an affiliate of the Morgan
Stanley Entities, as syndication agent and arranger. The Senior Credit
Facility establishes an eight-year revolving credit facility in the initial
aggregate principal amount of $40.0 million, an eight-year term loan in the
initial aggregate principal amount of $60.0 million and an eight and one-half-
year term loan in the initial aggregate principal amount of $50.0 million. See
"Description of Certain Indebtedness." In connection with its services, MSSF
will receive customary fees and be reimbursed for expenses.
 
TRANSACTIONS WITH TIME WARNER AND RELATED PARTIES
 
  The Systems were owned by CVI from December 31, 1988 through January 4,
1996, in the case of the Louisiana Systems, and from September 12, 1986
through January 4, 1996, in the case of the Tennessee System. On January 4,
1996, the Systems were acquired by Time Warner as a result of the acquisition
of CVI by Time Warner. The Company purchased the Systems from Time Warner on
April 9, 1998 in accordance with the terms and provisions of the Asset
Purchase Agreement and Time Warner received approximately $300.0 million in
cash and a $9.5 million equity ownership interest in Holdings, subject to
adjustment.
 
  In connection with the Acquisition, the Company entered into an agreement
with Time Warner, pursuant to which Time Warner manages the Company's
programming. See "Business--Programming and Subscription Rates." The Company
believes it will benefit from its relationship with Time Warner from access to
certain of Time Warner's programming arrangements. The Company believes that
the rates at which Time Warner will make any such programming available to the
Company will be at least as favorable as the rates the Company could obtain
from unaffiliated third parties.
 
  The Asset Purchase Agreement provides that Time Warner will provide certain
interim operational services to the Company. In addition, the Company will
assume Time Warner's obligations under the Social Contract with respect to the
Systems. See "Regulation and Legislation--The Social Contract."
 
                                      74

<PAGE>
 
                           PRINCIPAL SECURITYHOLDERS
 
  The Guarantor and the Obligors are wholly owned subsidiaries of Holdings.
The following table sets forth certain information, following the
Transactions, regarding beneficial ownership of the membership interests in
Holdings by: (i) each person known by the Company to beneficially own more
than 5% of the outstanding equity interests of Holdings; (ii) each member of
the Boards of Representatives or Board of Directors, as applicable, of
Holdings, the Obligors and the Guarantor; (iii) each executive officers of
Holdings, the Obligors and the Guarantor; and (iv) all members of the Boards
of Representatives, Board of Directors and executive officers of Holdings, the
Guarantor and the Obligors as a group. The information as to beneficial
ownership has been furnished by the respective equity holders,
Representatives, Directors and executive officers of Holdings, the Guarantor
and Obligors, and, unless otherwise indicated, each of the equity holders has
the sole voting and investment power with respect to the equity interests
beneficially owned. The address for each Representative, Director and
executive officer of Holdings, the Obligors and the Guarantor is c/o
Renaissance Media, One Cablevision Center, Suite 100, Ferndale, New York
12734. The address for each of MSCPIII, MSCI and MSCP Investors is 1221 Avenue
of the Americas, New York, New York 10020. The address for Time Warner is 290
Harbor Drive, Stamford, Connecticut 06902.
 

<TABLE>
<CAPTION>
                                                                 PERCENT OF
      NAME OF BENEFICIAL OWNER                                EQUITY OWNERSHIP
      ------------------------                                ----------------
<S>                                                           <C>
Morgan Stanley Entities (1)..................................       87.6%
Time Warner..................................................        8.8
Fred Schulte (2).............................................         .9
Rodney Cornelius (2).........................................         .9
Michael J. Egan (2)..........................................         .4
Darlene Fedun (2)............................................         .4
Mark Halpin (2)..............................................         .4
David L. Testa (2)...........................................         .4
Alan E. Goldberg (3).........................................          -
Michael M. Janson (3)........................................          -
Amy Rosen Wildstein (3)......................................          -
Glenn A. Britt...............................................          -
All Representatives, Directors and executive officers as a
 group.......................................................        3.6
</TABLE>

- --------
(1) The equity ownership interests of the Morgan Stanley Entities in Holdings
    are owned, directly or indirectly, by MSCPIII, MSCI and MSCP Investors in
    the following percentages: 88.5%, 9.1% and 2.4%, respectively,
    representing percentage equity interests in Holdings of 77.5%, 8.0% and
    2.1%, respectively.
(2) Excludes certain carried interests in affiliates of Time Warner and the
    Morgan Stanley Entities which hold their respective equity interests in
    Holdings. These carried interests represent the right to participate in
    future distributions of such affiliates.
(3) Messrs. Goldberg and Janson are Managing Directors of, and Ms. Wildstein
    is an associate of, Morgan Stanley Capital Partners III, Inc., the general
    partner of the general partner of MSCPIII.
 
                                      75

<PAGE>
 
                      DESCRIPTION OF CERTAIN INDEBTEDNESS
 
THE SENIOR CREDIT FACILITY
 
  General
 
  Renaissance Media is a party to a senior secured credit facility with MSSF,
an affiliate of the Morgan Stanley Entities and the Placement Agent, as lender
and agent (the "Senior Credit Facility").
 
  The following summary of the material provisions of the Senior Credit
Facility does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, the Senior Credit Facility Commitment Letter
and the definitive loan document therefor (the "Senior Credit Facility
Agreement"), copies of which are available from the Company upon request.
 
  The Senior Credit Facility establishes (i) the $40.0 million Revolver, an
eight-year revolving credit facility (including a $4.0 million letter of
credit facility) and (ii) the Term Loans, consisting of a $60.0 million,
eight-year term loan facility (the "Term Loan A Facility"), and a $50.0
million, eight and one-half-year term loan facility (the "Term Loan B
Facility"). Availability under the Revolver is subject to compliance with all
covenants contained in the Senior Credit Facility Agreement (as hereinafter
defined), including a minimum combined interest coverage ratio and a maximum
combined total leverage ratio as described below.
 
  Loans under the Senior Credit Facility bear interest at the option of
Renaissance Media, subject to certain limitations, based upon a base rate or
LIBOR, plus an interest rate margin. The initial interest rate margins for
borrowing under the Revolver and the Term Loan A Facility are between 1.25%
and 1.625% for base rate loans and between 2.25% and 2.625% for LIBOR loans;
and the initial interest rate margins for borrowing under the Term Loan B
Facility will be between 1.625% and 1.875% for base rate loans and between
2.625% and 2.875% for LIBOR loans. Beginning six months after the
effectiveness of the Senior Credit Facility Agreement, the interest rate
margins for borrowings under the Revolver and the Term Loan A Facility will be
between .625% and 1.625% for base rate loans and between 1.625% and 2.625% for
LIBOR loans and for borrowing under the Term Loan B Facility will be between
1.375% and 1.875% for base rate loans and between 2.375% and 2.875% for LIBOR
loans. The actual margins will be based on the ratio of Renaissance Media's
consolidated senior leverage ratio as determined in accordance with the Senior
Credit Facility Agreement.
 
  The Term Loans were drawn in full to purchase the Systems and pay related
fees and expenses. No amount was drawn under the Revolver to finance the
Acquisition. The Revolver is available to fund working capital requirements,
capital expenditures and acquisitions.
 
  Amortization
 
  Revolver. The loans under the Revolver shall be repaid in full, on or prior
to, and all letters of credit shall expire prior to, the eighth anniversary of
the Closing Date, and the sum of revolving credit loans and letter of credit
exposure shall at no time exceed the total commitments under the Revolver. The
commitments under the Revolver shall be reduced by $2,000,000 each quarter
from June 30, 2002 through March 31, 2005 and by $4,000,000 each quarter
thereafter.
 
  Term Loan A Facility. The loans under the Term A Loan Facility shall be
amortized in quarterly installments aggregating 1% per annum of the amount
thereof in each of the first three years, 5% per annum of the amount thereof
in the fourth year, 20% per annum of the amount thereof in each of the fifth,
six and seventh years, and 32% per annum of the amount thereof in the eighth
year.
 
 
                                      76

<PAGE>
 
  Term Loan B Facility. The loan under the Term Loan B Facility shall be
amortized in quarterly installments aggregating 1% per annum of the amount
thereof in each of the first seven years, 63% per annum of the amount thereof
in the eighth year and 30% per annum of the amount thereof in the last six
months.
 
  Prepayments
 
  Mandatory Prepayments. Renaissance Media is obligated to prepay the loans
outstanding under the Senior Credit Facility with: (i) the net proceeds
received from asset sales (with certain exceptions), (ii) the net proceeds
received from the issuance of certain debt, (iii) the net proceeds received
from certain issuances of equity by Renaissance Media or any of its
subsidiaries, (iv) insurance recoveries or condemnation awards not applied
within 180 days toward repair or replacement of the damaged or condemned
property, (v) the net proceeds received from the reversion of pension plans,
and (vi) in the case of the Term Loans so long as the combined total leverage
ratio exceeds 4.0:1.0 for any fiscal year of Renaissance Media (beginning with
the fiscal year ending in 1998), 50% of Renaissance Media's excess cash flow
for such fiscal year.
 
  Voluntary Prepayments. Renaissance Media may make voluntary prepayments of
amounts outstanding under the Senior Credit Facility, in whole or in part,
with prior notice and without premium or penalty (other than payment of LIBOR
breakage costs, if any), subject to limitations as to minimum amounts of
prepayments.
 
  Covenants. The Senior Credit Facility contains certain covenants: (i)
limiting Renaissance Media's ability to incur debt; (ii) limiting Renaissance
Media's ability to create liens; (iii) restricting Renaissance Media's ability
to merge with another entity; (iv) prohibiting Renaissance Media from selling
all or any substantial part of its assets; (v) restricting Renaissance Media's
ability to make investments, loans, advances, guarantees, acquisitions and
certain payments, to engage in transactions with affiliates, and (vi) limiting
Renaissance Media's capital expenditures. These covenants are subject to
certain permitted exceptions. So long as no default under the Senior Credit
Facility Agreement has occurred and is continuing, Renaissance Media will be
permitted to make distributions to the Obligors to pay interest on the Notes.
 
  Financial Covenants. The Senior Credit Facility contains certain financial
covenants requiring Renaissance Media to (i) maintain a consolidated senior
leverage ratio initially not more than 5.5:1 and decreasing to 3.0:1 on April
1, 2005, (ii) a combined total leverage ratio after April 1, 2003 not more
than 7.0:1, (iii) a combined interest coverage ratio at the last day of any
fiscal quarter of not less than (a) 2.0:1 until March 31, 2003, (b) 1.5:1
thereafter until March 31, 2004, (c) 1.75:1 thereafter until March 31, 2005
and (d) 2.0:1 thereafter and (iv) a combined fixed charge coverage ratio at
the last day of any fiscal quarter of 1.25:1 or more until March 31, 2003 and
1.0:1 thereafter.
 
  Events of Default. The Senior Credit Facility includes customary events of
default, including, without limitation, a failure to pay any loan when due, a
cross-default to certain other indebtedness of Renaissance Media, the
Guarantor and the Obligors, the failure to satisfy any of the covenants,
including the financial covenants, under the Senior Credit Facility, the
commencement of bankruptcy proceedings or the occurrence of a change of
control with respect to the Guarantor, the Obligors and Renaissance Media. An
event of default under the Senior Credit Facility would allow the lenders
thereunder to accelerate the maturity of the indebtedness under the Senior
Credit Facility and would adversely affect the ability of the Obligors to meet
their obligations under the Notes.
 
  Security. The Senior Credit Facility, the guarantees referred to below and
any interest rate protection agreements related thereto entered into by
Renaissance Media with the lenders are secured by perfected first priority (i)
pledges of the ownership interests in Renaissance Media and its subsidiaries,
and security interests in all obligations owed to Renaissance Media from any
of its direct or indirect subsidiaries, and (ii) security interests in, and
liens upon, substantially all other assets of Renaissance Media and its
subsidiaries.
 
  Guarantees. Borrowings under the Senior Credit Facility are guaranteed, on a
joint and several basis, by Renaissance Louisiana, Renaissance Tennessee,
Renaissance Capital and all direct and indirect subsidiaries of Renaissance
Louisiana and Renaissance Tennessee.
 
                                      77

<PAGE>
 
                              THE EXCHANGE OFFER
 
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
 
  The Old Notes were originally sold by the Obligors on April 9, 1998 to the
Placement Agent pursuant to the Placement Agreement. The Placement Agent
subsequently placed the Old Notes with (i) qualified institutional buyers in
reliance on Rule 144A under the Securities Act, (ii) a limited number of
institutional accredited investors that agreed to comply with certain transfer
restrictions and other conditions and (iii) qualified buyers outside the
United States in reliance upon Regulation S under the Securities Act. As a
condition of the Placement Agreement, the Obligors entered into the
Registration Rights Agreement with the Placement Agent pursuant to which the
Obligors have agreed, for the benefit of the holders of the Old Notes, at the
Obligors' cost, to use their best efforts to file the Exchange Offer
Registration Statement with the Commission with respect to the Exchange Offer
for the New Notes; and to have such Exchange Offer Registration Statement
remain effective until the closing of the Exchange Offer and to have the
Exchange Offer consummated not later than 60 days after such effective date.
Upon the Exchange Offer Registration Statement being declared effective, the
Obligors will offer the New Notes in exchange for surrender of the Old Notes.
The Obligors will keep the Exchange Offer open for not less than 20 business
days (or longer if required by applicable law) after the date on which notice
of the Exchange Offer is mailed to the holders of the Old Notes. For each Old
Note surrendered to the Obligors pursuant to the Exchange Offer, the holder of
such Old Note will receive a New Note having an original Principal Amount at
Maturity equal to that of the surrendered Old Note.
 
  Under existing interpretations of the staff of the Commission contained in
several no-action letters to third parties (including Exxon Capital Holdings
Corp., SEC No-Action Letter (April 13, 1989); Morgan Stanley & Co. Inc., SEC
No-Action Letter (June 5, 1991); and Shearman & Sterling, SEC No-Action Letter
(July 2, 1993)), the New Notes will in general be freely tradeable after the
Exchange Offer without further registration under the Securities Act. However,
any purchaser of Old Notes who is an "affiliate" of the Obligors or who
intends to participate in the Exchange Offer for the purpose of distributing
the New Notes (other than a broker-dealer) (i) will not be able to rely on the
interpretation of the staff of the Commission, (ii) will not be able to tender
its Old Notes in the Exchange Offer and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Old Notes, unless such sale or
transfer is made pursuant to an exemption from such requirements.
 
  As contemplated by the above-mentioned no-action letters and the
Registration Rights Agreement, each holder accepting the Exchange Offer is
required to represent to the Obligors in the Letter of Transmittal that (i)
the New Notes are to be acquired by the holder or the person receiving such
New Notes, whether or not such person is the holder, in the ordinary course of
business, (ii) the holder or any such other person (other than a broker-dealer
referred to in the next sentence) is not engaging and does not intend to
engage, in a distribution of the New Notes, (iii) the holder or any such other
person has no arrangement or understanding with any person to participate in
the distribution of the New Notes, (iv) neither the holder nor any such other
person is an "affiliate" of the Obligors within the meaning of Rule 405 under
the Securities Act, and (v) the holder or any such other person acknowledges
that if such holder or any other person participates in the Exchange Offer for
the purpose of distributing the New Notes it must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with
any resale of the New Notes and cannot rely on those no-action letters. As
indicated above, each Participating Broker-Dealer that receives a New Note for
its own account in exchange for Old Notes must acknowledge that it (i)
acquired the Old Notes for its own account as a result of market-making
activities or other trading activities, (ii) has not entered into any
arrangement or understanding with the Obligors or any "affiliate" of the
Obligors (within the meaning of Rule 405 under the Securities Act) to
distribute the New Notes to be received in the Exchange Offer and (iii) will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Notes. For a description of the
procedures for resales by Participant Broker-Dealers, see "Plan of
Distribution."
 
  In the event that changes in the law or the applicable interpretations of
the staff of the Commission do not permit the Obligors to effect such an
Exchange Offer, or if for any other reason the Exchange Offer is
 
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<PAGE>
 
commenced and not consummated by October 9, 1998, the Obligors will (i) file
the Shelf Registration Statement covering resales of the Old Notes; (ii) use
their best efforts to cause the Shelf Registration Statement to be declared
effective under the Securities Act and (iii) use their best efforts to keep
effective the Shelf Registration Statement until the earlier of (a) two years
after the date of the original issuance of the Old Notes or (b) such time as
all of the applicable Old Notes have been sold thereunder. The Obligors will,
in the event of the filing of the Shelf Registration Statement, provide to
each applicable holder of the Old Notes copies of the prospectus which is a
part of the Shelf Registration Statement, notify each such holder when the
Shelf Registration Statement has become effective and take certain other
actions as are required to permit unrestricted resales of the Old Notes. A
holder of the Old Notes that sells such Old Notes pursuant to the Shelf
Registration Statement generally will be required to be named as a selling
security holder in the related prospectus and to deliver a prospectus to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the Registration Rights Agreement which are applicable to such a
holder (including certain indemnification obligations). In addition, each
holder of the Old Notes will be required to deliver information to be used in
connection with the Shelf Registration Statement and to provide comments on
the Shelf Registration Statement within the time periods set forth in the
Registration Rights Agreement in order to have their Old Notes included in the
Shelf Registration Statement and to benefit from the provisions set forth in
the following paragraph.
 
  In the event the Exchange Offer is not consummated and the Shelf
Registration Statement is not declared effective on or prior to October 9,
1998, interest on the Notes (in addition to the accrual of original issue
discount during the period ended April 15, 2003 and in addition to interest
otherwise due on the Notes after such date) will accrue from October 9, 1998
at a rate of 0.5% per annum of the accreted value of the Notes on the
preceding semi-annual accrual date and be payable in cash semi-annually
commencing April 15, 1999 until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective.
 
  Holders of Old Notes will be required to make certain representations to the
Obligors (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and will be required to deliver information
to be used in connection with the Shelf Registration Statement and to provide
comments on the Shelf Registration Statement within the time periods set forth
in the Registration Rights Agreement in order to have their Old Notes included
in the Shelf Registration Statement and benefit from the provisions regarding
Additional Interest set forth above.
 
  The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified
in its entirety by, all the provisions of the Registration Rights Agreement, a
copy of which is filed as an exhibit to the Exchange Offer Registration
Statement of which this Prospectus is a part.
 
  Following the consummation of the Exchange Offer, holders of the Old Notes
who were eligible to participate in the Exchange Offer but who did not tender
their Old Notes will not have any further registration rights and such Old
Notes will continue to be subject to certain restrictions on transfer.
Accordingly, the liquidity of the market for such Old Notes could be adversely
affected.
 
TERMS OF THE EXCHANGE OFFER
 
  Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Obligors will accept any and all Old
Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date. The Obligors will issue $1,000 original
Principal Amount at Maturity of New Notes in exchange for each $1,000 original
Principal Amount at Maturity of outstanding Old Notes accepted in the Exchange
Offer. Holders may tender some or all of their Old Notes pursuant to the
Exchange Offer. However, Old Notes may be tendered only in integral multiples
of $1,000.
 
  The form and terms of the New Notes are the same as the form and terms of
the Old Notes except that (i) the New Notes have been registered under the
Securities Act and hence will not bear legends restricting the
 
                                      79

<PAGE>
 
transfer thereof and (ii) the holders of the New Notes will not be entitled to
certain rights under the Registration Rights Agreement, including the
provisions providing for an increase in the interest rate on the Old Notes in
certain circumstances relating to the timing of the Exchange Offer, all of
which rights will terminate when the Exchange Offer is terminated. The New
Notes will evidence the same debt as the Old Notes and will be entitled to the
benefits of the Indenture.
 
  As of the date of this Prospectus, $163,175,000 aggregate original Principal
Amount at Maturity of Old Notes were outstanding. The Obligors have fixed the
close of business on      , 1998 as the record date for the Exchange Offer for
purposes of determining the persons to whom this Prospectus and the Letter of
Transmittal will be mailed initially.
 
  Holders of Old Notes do not have any appraisal or dissenters' rights under
the Delaware General Corporation Law or the Indenture in connection with the
Exchange Offer. The Obligors intend to conduct the Exchange Offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
 
  The Obligors shall be deemed to have accepted validly tendered Old Notes
when, as and if the Obligors have given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
for the purpose of receiving the New Notes from the Obligors.
 
  If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Old Notes will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
 
  Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Old
Notes pursuant to the Exchange Offer. The Obligors will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection
with the Exchange Offer. See "--Fees and Expenses."
 
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
 
  The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
     , 1998, unless the Obligors, in their sole discretion, extend the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
 
  In order to extend the Exchange Offer, the Obligors will notify the Exchange
Agent of any extension by oral or written notice and will mail to the
registered holders an announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date.
 
  The Obligors reserve the right, in their sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "--Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of
the Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral
or written notice thereof to the registered holders.
 
PROCEDURES FOR TENDERING
 
  Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal or transmit an Agent's
Message in connection with a book-entry transfer, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, or Agent's Message,
together with the Old Notes and any other required documents, to the Exchange
Agent prior to 5:00
 
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<PAGE>
 
p.m., New York City time, on the Expiration Date. In addition, either (i)
certificates for such Old Notes must be received by the Exchange Agent prior
to the Expiration Date along with the Letter of Transmittal, (ii) a timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such
Old Notes into the Exchange Agent's account at The Depository Trust Company
("DTC" or the "Book-Entry Transfer Facility") pursuant to the procedure for
book-entry transfer described below, must be received by the Exchange Agent
prior to the Expiration Date or (iii) the holder must comply with the
guaranteed delivery procedures described below. To be tendered effectively,
the Old Notes, Letter of Transmittal or Agent's Message, and other required
documents must be completed and received by the Exchange Agent at the address
set forth below under "Exchange Agent" prior to 5:00 p.m., New York City time,
on the Expiration Date. Delivery of the Old Notes may be made by book-entry
transfer in accordance with the procedures described below. Confirmation of
such book-entry transfer must be received by the Exchange Agent prior to the
Expiration Date. DELIVERY OF DOCUMENTS TO THE BOOK ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH ITS PROCEDURE DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
 
  DTC has authorized DTC participants that hold Old Notes on behalf of
beneficial owners of Old Notes through DTC to tender their Old Notes as if
they were holders. To effect a tender of Old Notes, DTC participants should
either (i) complete and sign the Letter of Transmittal (or a manually signed
facsimile thereof), have the signature thereon guaranteed if required by the
instructions to the Letter of Transmittal, and mail or deliver the Letter of
Transmittal (or such manually signed facsimile) to the Exchange Agent pursuant
to the procedure set forth in "Procedures for Tendering" or (ii) transmit
their acceptance to DTC through the DTC Automated Tender Offer Program
("ATOP") for which the transaction will be eligible and follow the procedure
for book-entry transfer set forth in "--Book-Entry Transfer."
 
  By executing the Letter of Transmittal or Agent's Message, each holder will
make to the Obligors the representations set forth above in the third
paragraph under the heading "--Purpose and Effect of the Exchange Offer."
 
  The tender by a holder and the acceptance thereof by the Obligors will
constitute agreement between such holder and the Obligors in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal or Agent's Message.
 
  THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL OR AGENT'S
MESSAGE AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL,
HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE
SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS
FOR SUCH HOLDERS.
 
  Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. See
"Instructions to Registered Holder and/or Book-Entry Transfer Facility
Participant from Beneficial Owner" included with the Letter of Transmittal.
 
  Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Old Notes tendered pursuant thereto are tendered (i) by a
registered holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution. In the event that
signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantee must be by a member firm
of the Medallion System (an "Eligible Institution").
 
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<PAGE>
 
  If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, such Old Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered
holder as such registered holder's name appears on such Old Notes with the
signature thereon guaranteed by an Eligible Institution.
 
  If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, offices of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
Obligors of their authority to so act must be submitted with the Letter of
Transmittal.
 
  All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old
Notes will be determined by the Obligors in their sole discretion, which
determination will be final and binding. The Obligors reserve the absolute
right to reject any and all Old Notes not properly tendered or any Old Notes
the Obligors' acceptance of which would, in the opinion of counsel for the
Obligors, be unlawful. The Obligors also reserve the right in their sole
discretion to waive any defects, irregularities or conditions of tender as to
particular Old Notes. The Obligors' interpretation of the terms and conditions
of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be
cured within such time as the Obligors shall determine. Although the Obligors
intend to notify holders of defects or irregularities with respect to tenders
of Old Notes, neither the Obligors, the Exchange Agent nor any other person
shall incur any liability for failure to give such notification. Tenders of
Old Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Old Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
 
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
 
  For each Old Note accepted for exchange, the holder of such Old Note will
receive a New Note having a Principal Amount at Maturity equal to that of the
surrendered Old Note. For purposes of the Exchange Offer, the Obligors shall
be deemed to have accepted properly tendered Old Notes for exchange when, as
and if the Obligors have given oral or written notice thereof to the Exchange
Agent.
 
  In all cases, the issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely Book-
Entry Confirmation of such Old Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility, a properly completed and duly executed Letter of
Transmittal or Agent's Message and all other required documents. If any
tendered Old Notes are not accepted for any reason set forth in the terms and
conditions of the Exchange Offer, such unaccepted or non-exchanged Old Notes
will be returned without expense to the tendering holder thereof (or, in the
case of Old Notes tendered by book-entry transfer into the Exchange Agent's
account at the Book-Entry Transfer Facility pursuant to the book-entry
transfer procedures described below, such non-exchanged Old Notes will be
credited to an account maintained with such Book-Entry Transfer Facility) as
promptly as practicable after the Expiration Date.
 
BOOK-ENTRY TRANSFER
 
  The Exchange Agent will establish a new account or utilize an existing
account with respect to the Old Notes at DTC promptly after the date of this
Prospectus, and any financial institution that is a participant in DTC and
whose name appears on a security position listing as the owner of Old Notes
may make a book-entry tender of Old Notes by causing DTC to transfer such Old
Notes into the Exchange Agent's account in accordance with DTC's procedures
for such transfer. However, although tender of Old Notes may be effected
through book-entry transfer into the Exchange Agent's account at DTC, the
Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and validly executed, with any required signature guarantees, or an
Agent's
 
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<PAGE>
 
Message in lieu of the Letter of Transmittal, and any other required
documents, must, in any case, be received by the Exchange Agent at its address
set forth below under the caption "Exchange Agent" on or prior to the
Expiration Date, or the guaranteed delivery procedures described below must be
complied with. The confirmation of book-entry transfer of Old Notes into the
Exchange Agent's account at DTC as described above is referred to herein as a
"Book-Entry Confirmation." Delivery of documents to DTC in accordance with
DTC's procedures does not constitute delivery to the Exchange Agent.
 
  The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of a Book-Entry
Confirmation, which states that DTC has received an express acknowledgment
from the participant in DTC tendering the Old Notes stating (i) the aggregate
principal amount of Old Notes which have been tendered by such participant,
(ii) that such participant has received and agrees to be bound by the terms of
the Letter of Transmittal and (iii) that the Obligors may enforce such
agreement against the participant.
 
GUARANTEED DELIVERY PROCEDURES
 
  Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent or (iii) who
cannot complete the procedures for book-entry transfer, prior to the
Expiration Date, may effect a tender if:
 
    (a) the tender is made through an Eligible Institution;
 
    (b) prior to the Expiration Date, the Exchange Agent receives from such
  Eligible Institution a properly completed and duly executed Notice of
  Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
  setting forth the name and address of the holder, the certificate number(s)
  of such Old Notes and the principal amount of Old Notes tendered, stating
  that the tender is being made thereby and guaranteeing that, within five
  New York Stock Exchange trading days after the Expiration Date, the Letter
  of Transmittal (or facsimile thereof) (or in the case of a book-entry
  transfer, an Agent's Message) together with the certificate(s) representing
  the Old Notes (or a confirmation of book-entry transfer of such Notes into
  the Exchange Agent's account at the Book-Entry Transfer Facility), and any
  other documents required by the Letter of Transmittal will be deposited by
  the Eligible Institution with the Exchange Agent; and
 
    (c) the certificate(s) representing all tendered Old Notes in proper form
  for transfer (or a confirmation of book-entry transfer of such Old Notes
  into the Exchange Agent's account at the Book-Entry Transfer Facility),
  together with a Letter of Transmittal (or facsimile thereof), properly
  completed and duly executed, with any required signature guarantees (or, in
  the case of a book-entry transfer, an Agent's Message) and all other
  documents required by the Letter of Transmittal are received by the
  Exchange Agent upon five New York Stock Exchange trading days after the
  Expiration Date.
 
  Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
 
WITHDRAWAL OF TENDERS
 
  Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the business day prior
to the Expiration Date.
 
  To withdraw a tender of Old Notes in the Exchange Offer, a telegram, telex,
letter or facsimile transmission notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York
City time, on the business day prior to the Expiration Date. Any such notice
of withdrawal must (i) specify the name of the person having deposited the Old
Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be
withdrawn (including the certificate number(s) and principal amount of such
Old Notes, or, in the case of Old Notes transferred by book-entry transfer,
the name and number of the account at the Book-Entry Transfer Facility to be
credited), (iii) be signed by the holder in the same manner as the original
signature
 
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<PAGE>
 
on the Letter of Transmittal by which such Old Notes were tendered (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Old Notes register the
transfer of such Old Notes into the name of the person withdrawing the tender
and (iv) specify the name in which any such Old Notes are to be registered, if
different from that of the Depositor. All questions as to the validity, form
and eligibility (including time of receipt) of such notices will be determined
by the Obligors, whose determination shall be final and binding on all
parties. Any Old Notes so withdrawn will be deemed not to have been validly
tendered for purposes of the Exchange Offer and no New Notes will be issued
with respect thereto unless the Old Notes so withdrawn are validly retendered.
Any Old Notes which have been tendered but which are not accepted for exchange
will be returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Notes may be retendered by following
one of the procedures described above under "--Procedures for Tendering" at
any time prior to the Expiration Date.
 
CONDITIONS
 
  Notwithstanding any other term of the Exchange Offer, the Obligors shall not
be required to accept for exchange, or exchange New Notes for, any Old Notes,
and may terminate or amend the Exchange Offer as provided herein before the
acceptance of such Old Notes, if:
 
    (a) any action or proceeding is instituted or threatened in any court or
  by or before any governmental agency with respect to the Exchange Offer
  which, in the sole judgment of the Obligors, might materially impair the
  ability of the Obligors to proceed with the Exchange Offer or any material
  adverse development has occurred in any existing action or proceeding with
  respect to the Obligors or any of their subsidiaries; or
 
    (b) any law, statute, rule, regulation or interpretation by the Staff of
  the Commission is proposed, adopted or enacted, which, in the sole judgment
  of the Obligors, might materially impair the ability of the Obligors to
  proceed with the Exchange Offer or materially impair the contemplated
  benefits of the Exchange Offer to the Obligors; or
 
    (c) any governmental approval has not been obtained, which approval the
  Obligors shall, in their sole discretion, deem necessary for the
  consummation of the Exchange Offer as contemplated hereby.
 
  If the Obligors determine in their sole discretion that any of the
conditions are not satisfied, the Obligors may (i) refuse to accept any Old
Notes and return all tendered Old Notes to the tendering holders, (ii) extend
the Exchange Offer and retain all Old Notes tendered prior to the expiration
of the Exchange Offer, subject, however, to the rights of holders to withdraw
such Old Notes (see "--Withdrawal of Tenders") or (iii) waive such unsatisfied
conditions with respect to the Exchange Offer and accept all properly tendered
Old Notes which have not been withdrawn.
 
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<PAGE>
 
EXCHANGE AGENT
 
  United States Trust Company of New York has been appointed as Exchange Agent
for the Exchange Offer. Questions and requests for assistance, requests for
additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notice of Guaranteed Delivery should be directed to the Exchange
Agent addressed as follows:
 
              By Mail:                             Overnight Courier:
 
 
- -------------------------------------     -------------------------------------
- -------------------------------------     -------------------------------------
- -------------------------------------     -------------------------------------
Attention: __________________________     Attention: __________________________
 
              By Hand:                           Facsimile Transmission:
 
 
- -------------------------------------                (   )    -
- -------------------------------------
- -------------------------------------
Attention: __________________________
 
                             Confirm by Telephone:
 
                                (   )    -
 
  DELIVERY TO AN ADDRESS OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
 
FEES AND EXPENSES
 
  The expenses of soliciting tenders will be borne by the Obligors. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Obligors and their affiliates.
 
  The Obligors have not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The Obligors, however, will pay
the Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of pocket expenses in connection
therewith.
 
  The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Obligor. Such expenses include fees and expenses of the
Exchange Agent and Trustee, accounting and legal fees and printing costs,
among others.
 
ACCOUNTING TREATMENT
 
  The New Notes will be recorded at the same carrying value as the Old Notes,
which is face value, as reflected in the Obligors' accounting records on the
date of exchange. Accordingly, no gain or loss for accounting purposes will be
recognized by the Obligors. The expenses of the Exchange Offer will be
expensed over the term of the New Notes.
 
CONSEQUENCES OF FAILURE TO EXCHANGE
 
  The Old Notes that are not exchanged for New Notes pursuant to the Exchange
Offer will remain restricted securities. Accordingly, such Old Notes may be
resold only (i) to the Obligors (upon redemption thereof or otherwise), (ii)
so long as the Old Notes are eligible for resale pursuant to Rule 144A, to a
person inside the
 
                                      85

<PAGE>
 
United States whom the seller reasonably believes is a qualified institutional
buyer within the meaning of Rule 144A under the Securities Act, in a
transaction meeting the requirements of Rule 144A, in accordance with Rule 144
under the Securities Act, or pursuant to another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel reasonably acceptable to the Obligors), (iii) outside the United
States to a foreign person in a transaction meeting the requirements of Rule
904 under the Securities Act, or (iv) pursuant to an effective registration
statement under the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States.
 
RESALE OF THE NEW NOTES
 
  With respect to resales of New Notes, based on interpretations by the staff
of the Commission set forth in no-action letters issued to third parties, the
Obligors believe that a holder or other person who receives New Notes, whether
or not such person is the holder (other than a person that is an "affiliate"
of the Obligors within the meaning of Rule 405 under the Securities Act) who
receives New Notes in exchange for Old Notes in the ordinary course of
business and who is not participating, does not intend to participate, and has
no arrangement or understanding with any person to participate, in the
distribution of the New Notes, will be allowed to resell the New Notes to the
public without further registration under the Securities Act and without
delivering to the purchasers of the New Notes a prospectus that satisfies the
requirements of Section 10 of the Securities Act. However, if any holder
acquires New Notes in the Exchange Offer for the purpose of distributing or
participating in a distribution of the New Notes, such holder cannot rely on
the position of the staff of the Commission enunciated in such no-action
letters or any similar interpretive letters, and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction, unless an exemption from registration
is otherwise available. Further, each Participating Broker-Dealer that
receives New Notes for its own account in exchange for Old Notes, where such
Old Notes were acquired by such Participating Broker-Dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such New Notes.
 
  As contemplated by these no-action letters and the Registration Rights
Agreement, each holder accepting the Exchange Offer is required to represent
to the Obligors in the Letter of Transmittal that (i) the New Notes are to be
acquired by the holder or the person receiving such New Notes, whether or not
such person is the holder, in the ordinary course of business, (ii) the holder
or any such other person (other than a broker-dealer referred to in the next
sentence) is not engaging and does not intend to engage, in the distribution
of the New Notes, (iii) the holder or any such other person has no arrangement
or understanding with any person to participate in the distribution of the New
Notes, (iv) neither the holder nor any such other person is an "affiliate" of
the Obligors within the meaning of Rule 405 under the Securities Act, and (v)
the holder or any such other person acknowledges that if such holder or other
person participates in the Exchange Offer for the
purpose of distributing the New Notes it must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale of the New Notes and cannot rely on those no-action letters. As
indicated above, each Participating Broker-Dealer that receives New Notes for
its own account in exchange for Old Notes must acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. For a
description of the procedures for such resales by Participating Broker-
Dealers, see "Plan of Distribution."
 
                                      86

<PAGE>
 
                           DESCRIPTION OF THE NOTES
 
  The Old Notes were issued under an Indenture, dated as of the Closing Date
(the "Indenture"), among Renaissance Louisiana, Renaissance Tennessee and
Renaissance Capital, as joint and several Obligors (the "Obligors"), the
Company, as guarantor, and United States Trust Company of New York (the
"Trustee"). The New Notes will be issued under the Indenture, which shall
thereupon be subject to and governed by the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). A copy of the Indenture is available upon
request from the Company. The following summary of certain provisions of the
Indenture does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Indenture,
including the definitions of certain terms therein and those terms made a part
thereof by the Trust Indenture Act. For purposes of this section, all
references to the Company are to Renaissance Media Group LLC, excluding its
subsidiaries. Whenever particular defined terms of the Indenture not otherwise
defined herein are referred to, such defined terms are incorporated herein by
reference. For definitions of certain capitalized terms used in the following
summary, see "--Certain Definitions."
 
  The form and terms of the New Notes are the same as the form and terms of
the Old Notes (which they replace) except that (i) the issuance of the New
Notes have been registered under the Securities Act and, therefore, the New
Notes will not bear legends restricting the transfer thereof, and (ii) the
holders of New Notes will not be entitled to certain rights under the
Registration Rights Agreement, including the provisions providing for an
increase in the interest rate on the Old Notes in certain circumstances
relating to the timing of the Exchange Offer, which rights will terminate when
the Exchange Offer is consummated. A copy of the Indenture has been filed as
an exhibit to the Exchange Offer Registration Statement of which this
Prospectus forms a part. Certain definitions of terms used in the following
summary are set forth under "--Certain Definitions" below. The Old Notes and
the New Notes are sometimes referred to herein collectively as the "Notes."
 
GENERAL
 
  The New Notes will be unsecured unsubordinated obligations of the Obligors,
initially limited to $163,175,000 aggregate principal amount at maturity, and
will mature on April 15, 2008. Although for U.S. federal income tax purposes a
significant amount of original issue discount, taxable as ordinary income,
will be recognized by a Holder as such discount accrues from the issue date of
the Old Notes, no interest will be payable on the New Notes prior to October
15, 2003. From and after April 15, 2003, interest on the New Notes will accrue
at the rate shown on the front cover of this Prospectus from April 15, 2003 or
from the most recent Interest Payment Date to which interest has been paid or
provided for, payable semiannually (to Holders of record at the close of
business on April 1 or October 1 immediately preceding the Interest Payment
Date) on April 15 and October 15 of each year, commencing October 15, 2003.
The New Notes will fully accrete to face value on April 15, 2003. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
 
  Old Notes that remain outstanding after the consummation of the Exchange
Offer and New Notes issued in connection with the Exchange Offer will be
treated as a single class of securities under the Indenture.
 
  Principal of, premium, if any, and interest on the New Notes will be
payable, and the New Notes may be exchanged or transferred, at the office or
agency of the Obligors in the Borough of Manhattan, the City of New York
(which initially will be the corporate trust office of the Trustee); provided
that, at the option of the Obligors payment of interest may be made by check
mailed to the Holders at their addresses as they appear in the Security
Register.
 
  The New Notes will be issued only in fully registered form, without coupons,
in denominations of $1,000 of principal amount at maturity and any integral
multiple thereof. See "--Book-Entry; Delivery and Form." No service charge
will be made for any registration of transfer or exchange of Notes, but the
Obligors may require payment of a sum sufficient to cover any transfer tax or
other similar governmental charge payable in connection therewith.
 
                                      87

<PAGE>
 
  Subject to the covenants described below under "Covenants" and applicable
law, the Obligors may issue additional notes under the Indenture. The Notes
and any such additional notes subsequently issued would be treated as a single
class for all purposes under the Indenture.
 
OPTIONAL REDEMPTION
 
  The New Notes will be redeemable, at the Obligors' option, in whole or in
part, at any time or from time to time, on or after April 15, 2003 and prior
to maturity, upon not less than 30 nor more than 60 days' prior notice mailed
by first class mail to each Holder's last address as it appears in the
Security Register, at the following Redemption Prices (expressed in
percentages of principal amount at maturity), plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing April 15 of the years set forth
below:
 

<TABLE>
<CAPTION>
                                                                      REDEMPTION
       YEAR                                                             PRICE
       ----                                                           ----------
      <S>                                                             <C>
      2003...........................................................  105.000%
      2004...........................................................  103.333
      2005...........................................................  101.667
      2006 and thereafter............................................  100.000
</TABLE>

 
  In addition, at any time prior to April 15, 2001, the Obligors may redeem up
to 35% of the principal amount at maturity of the Notes with the proceeds of
one or more sales of Capital Stock (other than Disqualified Stock) of the
Company or an Obligor to a Person other than the Company or any Subsidiary of
the Company, at any time or from time to time in part, at a Redemption Price
(expressed as a percentage of Accreted Value on the Redemption Date) of
110.000%; provided that at least $106.0 million aggregate principal amount at
maturity of Notes remains outstanding after each such redemption and notice of
any such redemption is mailed within 60 days after the related sale of Capital
Stock.
 
  In the case of any partial redemption, selection of the Notes for redemption
will be made by the Trustee in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed
or, if the Notes are not listed on a national securities exchange, by lot or
by such other method as the Trustee in its sole discretion shall deem to be
fair and appropriate; provided that no Note of $1,000 in principal amount at
maturity or less shall be redeemed in part. If any Note is to be redeemed in
part only, the notice of redemption relating to such Note shall state the
portion of the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Note.
 
GUARANTEE
 
  The payment and performance in full when due of the Obligors' obligations
under the Indenture and the New Notes will be fully and unconditionally
guaranteed on a senior basis by the Company. The obligations of the Company
will be limited to the maximum amount which, after giving effect to all other
contingent and fixed liabilities of the Company and after giving effect to any
collections from or payments made by or on behalf of any Obligor in respect of
the obligations of such Obligor under the Indenture, will result in the
obligations of the Company under its Guaranty not constituting a fraudulent
conveyance or fraudulent transfer under applicable law.
 
SINKING FUND
 
  There will be no sinking fund payments for the New Notes.
 
                                      88

<PAGE>
 
RANKING
 
  The indebtedness evidenced by the New Notes will rank pari passu in right of
payment with all existing and future unsubordinated indebtedness of the
Obligors and senior in right of payment to all existing and future
subordinated indebtedness of the Obligors.
 
  The indebtedness evidenced by the New Guaranty will rank pari passu in right
of payment will all existing and future unsubordinated indebtedness of the
Company and senior in right of payment to all subordinated indebtedness of the
Company.
 
  After giving pro forma effect to the Transactions, as of March 31, 1998, the
Company and the Obligors would have had $210.0 million of indebtedness
outstanding. In addition, all existing and future liabilities (including
indebtedness under the Credit Agreement and trade payables) of the Obligors'
subsidiaries will be effectively senior to the Notes. After giving pro forma
effect to the Transactions, as of March 31, 1998, the Obligors' subsidiaries
would have had $114.0 million of indebtedness and other liabilities
outstanding, including $110.0 million of indebtedness under the Credit
Agreement. See "Risk Factors--Holding Company Structure; Structural
Subordination."
 
CERTAIN DEFINITIONS
 
  Set forth below is a summary of certain of the defined terms used in the
covenants and other provisions of the Indenture. Reference is made to the
Indenture for the full definition of all terms as well as any other
capitalized term used herein for which no definition is provided.
 
  "Accreted Value" is defined to mean, for any Specified Date, the amount
calculated pursuant to (i), (ii), (iii) or (iv) below for each $1,000 of
principal amount at maturity of the Notes:
 
    (i) if the Specified Date occurs on one or more of the following dates
  (each a "Semi-Annual Accrual Date"), the Accreted Value will equal the
  amount set forth below for such Semi-Annual Accrual Date:
 

<TABLE>
<CAPTION>
            SEMI-ANNUAL                             ACCRETED
            ACCRUAL DATE                              VALUE
            ------------                            ---------
           <S>                                      <C>
           October 15, 1998........................ $  644.60
           April 15, 1999.......................... $  676.83
           October 15, 1999........................ $  710.68
           April 15, 2000.......................... $  746.21
           October 15, 2000........................ $  783.52
           April 15, 2001.......................... $  822.70
           October 15, 2001........................ $  863.83
           April 15, 2002.......................... $  907.02
           October 15, 2002........................ $  952.38
           April 15, 2003.......................... $1,000.00
</TABLE>

 
    (ii) if the Specified Date occurs before the first Semi-Annual Accrual
  Date, the Accreted Value will equal the sum of (a) $612.91 and (b) an
  amount equal to the product of (1) the Accreted Value for the first Semi-
  Annual Accrual Date less $612.91 multiplied by (2) a fraction, the
  numerator of which is the number of days from the Closing Date to the
  Specified Date, using a 360-day year of twelve 30-day months, and the
  denominator of which is the number of days elapsed from the Closing Date to
  the first Semi-Annual Accrual Date, using a 360-day year of twelve 30-day
  months;
 
    (iii) if the Specified Date occurs between two Semi-Annual Accrual Dates,
  the Accreted Value will equal the sum of (a) the Accreted Value for the
  Semi-Annual Accrual Date immediately preceding such Specified Date and (b)
  an amount equal to the product of (1) the Accreted Value for the
  immediately following Semi-Annual Accrual Date less the Accreted Value for
  the immediately preceding Semi-Annual
 
                                      89

<PAGE>
 
  Accrual Date multiplied by (2) a fraction, the numerator of which is the
  number of days from the immediately preceding Semi-Annual Accrual Date to
  the Specified Date, using a 360-day year of twelve 30-day months, and the
  denominator of which is 180; or
 
    (iv) if the Specified Date occurs after the last Semi-Annual Accrual
  Date, the Accreted Value will equal $1,000.
 
  "Acquired Indebtedness" means Indebtedness of a Person existing at the time
such Person becomes a Restricted Subsidiary or assumed in connection with an
Asset Acquisition by a Restricted Subsidiary and not Incurred in connection
with, or in anticipation of, such Person becoming a Restricted Subsidiary;
provided that Indebtedness of such Person which is redeemed, defeased, retired
or otherwise repaid at the time of or immediately upon consummation of the
transactions by which such Person becomes a Restricted Subsidiary or such
Asset Acquisition shall not be Acquired Indebtedness.
 
  "Adjusted Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Company and its Restricted Subsidiaries for such
period determined in conformity with GAAP; provided that the following items
shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income (or loss) of any Person that is not a
Restricted Subsidiary, except (x) with respect to net income, to the extent of
the amount of dividends or other distributions actually paid to the Company or
any of its Restricted Subsidiaries by such Person during such period and (y)
with respect to net losses, to the extent of the amount of Investments made by
the Company or any Restricted Subsidiary in such Person during such period;
(ii) solely for the purposes of calculating the amount of Restricted Payments
that may be made pursuant to clause (C) of the first paragraph of the
"Limitation on Restricted Payments" covenant described below (and in such
case, except to the extent includable pursuant to clause (i) above), the net
income (or loss) of any Person accrued prior to the date it becomes a
Restricted Subsidiary or is merged into or consolidated with the Company or
any of its Restricted Subsidiaries or all or substantially all of the property
and assets of such Person are acquired by the Company or any of its Restricted
Subsidiaries; (iii) any gains or losses (on an after-tax basis) attributable
to Asset Sales; (iv) except for purposes of calculating the amount of
Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of the "Limitation on Restricted Payments" covenant described below,
any amount paid or accrued as dividends on Preferred Stock of the Company or
any Restricted Subsidiary owned by Persons other than the Company and any of
its Restricted Subsidiaries; and (v) all extraordinary gains and extraordinary
losses.
 
  "Adjusted Consolidated Net Tangible Assets" means the total amount of assets
of the Company and its Restricted Subsidiaries (less applicable depreciation,
amortization and other valuation reserves), except to the extent resulting
from write-ups of capital assets (excluding write-ups in connection with
accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other
like intangibles, all as set forth on the most recent quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and filed with the Commission or provided to
the Trustee pursuant to the "Commission Reports and Reports to Holders"
covenant.
 
  "Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
 
  "Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Company or any of its Restricted Subsidiaries; provided that such
Person's primary
 
                                      90

<PAGE>
 
business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such investment or (ii)
an acquisition by the Company or any of its Restricted Subsidiaries of the
property and assets of any Person other than the Company or any of its
Restricted Subsidiaries that constitute substantially all of a division or
line of business of such Person; provided that the property and assets
acquired are related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such acquisition.
 
  "Asset Disposition" means the sale or other disposition by the Company or
any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
 
  "Asset Sale" means any sale, transfer or other disposition (including by way
of merger, consolidation or sale-leaseback transaction) in one transaction or
a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted
Subsidiaries or (iii) any other property and assets (other than the Capital
Stock or other Investment in an Unrestricted Subsidiary) of the Company or any
of its Restricted Subsidiaries outside the ordinary course of business of the
Company or such Restricted Subsidiary and, in each case, that is not governed
by the provisions of the Indenture applicable to mergers, consolidations and
sales of all or substantially all of the assets of the Company or an Obligor;
provided that "Asset Sale" shall not include (a) sales or other dispositions
of inventory, receivables and other current assets, (b) sales, transfers or
other dispositions of assets constituting a Restricted Payment permitted to be
made under the "Limitation on Restricted Payments" covenant, (c) sales,
transfers or other dispositions of assets with a fair market value (as
certified in an Officers' Certificate) not in excess of $1 million in any
transaction or series of transactions or (d) sales or other dispositions of
assets for consideration (including exchanges for assets) at least equal to
the fair market value of the assets sold or disposed of, to the extent that
the consideration received would constitute property or assets of the kind
described in clause (B) of the "Limitation on Asset Sales" covenant or
deposits of proceeds with a "qualified intermediary," "qualified trustee" or
similar person for purposes of facilitating a like-kind exchange under
applicable provisions of the Internal Revenue Code of 1986, as amended.
 
  "Average Life" means, at any date of determination with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of (a)
the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the
amount of such principal payment by (ii) the sum of all such principal
payments.
 
  "Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such Person.
 
  "Capitalized Lease Obligations" means the discounted present value of the
rental obligations under a Capitalized Lease.
 
  "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
 
  "Change of Control" means such time as (i) (a) prior to the occurrence of a
Public Market, a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) becomes the ultimate "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of Voting Stock representing a
greater percentage of the total voting power of the Voting Stock of (x)
Holdings, on a fully diluted basis, than is beneficially owned by the Morgan
Stanley Entities and Time Warner and their Affiliates on such date or (y) the
Company, on a fully diluted basis, than is held by the Existing Stockholders
on such date and (b) after the
 
                                      91

<PAGE>
 
occurrence of a Public Market, a "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the ultimate
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 35% of the total voting power of the Voting Stock of the Company on a
fully diluted basis and such ownership represents a greater percentage of the
total voting power of the Voting Stock of the Company, on a fully diluted
basis, than is held by the Existing Stockholders on such date; or (ii)
individuals who on the Closing Date constitute the Board of Directors of
Holdings or the Company (together with any new directors (x) whose election by
such Board of Directors or whose nomination by such Board of Directors for
election by the Company's equityholders was approved by a vote of at least
two-thirds of the members of such Board of Directors then in office who either
were members of such Board of Directors on the Closing Date or whose election
or nomination for election was previously so approved or (y) so long as no
person beneficially owns a greater proportion of the total voting power of the
Voting Stock of Holdings than is beneficially owned by the Morgan Stanley
Entities and Time Warner and their Affiliates, whose election was approved by
Holdings with respect to the Company) cease for any reason to constitute a
majority of the members of the Board of Directors then in office.
 
  "Closing Date" means the date on which the Notes are originally issued under
the Indenture.
 
  "Common Stock" means, with respect to any Person, such Person's equity,
other than Preferred Stock of such Person, whether outstanding on the Closing
Date or issued thereafter, including, without limitation, all series and
classes of such common stock, including any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) thereof.
 
  "Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period (x) plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), (iii) depreciation expense, (iv) amortization expense and
(v) all other non-cash items reducing Adjusted Consolidated Net Income (other
than items that will require cash payments and for which an accrual or reserve
is, or is required by GAAP to be, made), less all non-cash items increasing
Adjusted Consolidated Net Income, all as determined on a consolidated basis
for the Company and its Restricted Subsidiaries in conformity with GAAP, and
(y) solely for purposes of calculating the amount of Restricted Payments that
may be made pursuant to clause (C) of the first paragraph of the "Limitation
on Restricted Payments" covenant described below, less (to the extent not
otherwise reduced in accordance with GAAP) the aggregate amount of deposits
made by the Company and its Restricted Subsidiaries after the Closing Date in
connection with proposed Asset Acquisitions that are forfeited by the Company
or any of its Restricted Subsidiaries; provided that, if any Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA
shall be reduced (to the extent not otherwise reduced in accordance with GAAP)
by an amount equal to (A) the amount of the Adjusted Consolidated Net Income
attributable to such Restricted Subsidiary multiplied by (B) the percentage
ownership interest in the income of such Restricted Subsidiary not owned on
the last day of such period by the Company or any of its Restricted
Subsidiaries.
 
  "Consolidated Interest Expense" means, for any period, the aggregate amount
of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers'
acceptance financing; the net costs associated with Interest Rate Agreements;
and Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; excluding, however any premiums, fees and expenses (and any
amortization thereof) payable in connection with the Transactions, all as
determined on a consolidated basis (without taking into account Unrestricted
Subsidiaries) in conformity with GAAP.
 
  "Consolidated Leverage Ratio" means, on any Transaction Date, the ratio of
(i) the aggregate amount of Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis outstanding on such
 
                                      92

<PAGE>
 
Transaction Date to (ii) four times the aggregate amount of Consolidated
EBITDA for the then most recent fiscal quarter for which financial statements
of the Company have been filed with the Commission or provided to the Trustee
pursuant to the "Commission Reports and Reports to Holders" covenant described
below (such fiscal quarter being the "Quarter"); provided that, in making the
foregoing calculation, (A) pro forma effect shall be given to any Indebtedness
to be Incurred or repaid on the Transaction Date; (B) pro forma effect shall
be given to Asset Dispositions and Asset Acquisitions (including giving pro
forma effect to the application of proceeds of any Asset Disposition) that
occur from the beginning of the Quarter through the Transaction Date (the
"Reference Period"), as if they had occurred and such proceeds had been
applied on the first day of such Reference Period and, in the case of any
Asset Acquisition, giving pro forma effect to any cost reductions the Company
anticipates if the Company delivers to the Trustee an officer's certificate
executed by the Chief Financial Officer of the Company certifying to and
describing and quantifying with reasonable specificity the cost reductions
expected to be attained within the first year after such Asset Acquisition;
and (C) pro forma effect shall be given to asset dispositions and asset
acquisitions (including giving pro forma effect to the application of proceeds
of any asset disposition) that have been made by any Person that has become a
Restricted Subsidiary or has been merged with or into the Company or any
Restricted Subsidiary during such Reference Period and that would have
constituted Asset Dispositions or Asset Acquisitions had such transactions
occurred when such Person was a Restricted Subsidiary as if such asset
dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference Period; provided
that to the extent that clause (B) or (C) of this sentence requires that pro
forma effect be given to an Asset Acquisition or Asset Disposition, such pro
forma calculation shall be based upon the fiscal quarter immediately preceding
the Transaction Date of the Person, or division or line of business of the
Person, that is acquired or disposed of for which financial information is
available.
 
  "Consolidated Net Worth" means, at any date of determination, stockholders'
equity as set forth on the most recently available quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of
the Capital Stock of the Company or any of its Restricted Subsidiaries, each
item to be determined in conformity with GAAP (excluding the effects of
foreign currency exchange adjustments under Financial Accounting Standards
Board Statement of Financial Accounting Standards No. 52).
 
  "Credit Agreement" means the credit agreement between Renaissance Media LLC,
the lenders party thereto, Morgan Stanley Senior Funding, Inc., as syndication
agent, CIBC Oppenheimer, as documentation agent, and Bankers Trust Company, as
administrative agent, together with any agreements, instruments and documents
executed or delivered pursuant to or in connection with such credit agreement,
as such credit agreement or such agreements, instruments or documents may be
amended, supplemented, extended, restated, renewed or otherwise modified from
time to time and any refinancing, replacement or substitution thereof or
therefor, or of or for any previous refinancing, replacement or substitution.
 
  "Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
 
  "Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
 
  "Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder
of such class or series of Capital Stock at any time prior to the Stated
Maturity of the Notes or (iii) convertible into or exchangeable for Capital
Stock referred to in clause (i) or (ii) above or Indebtedness having a
scheduled maturity prior to the Stated Maturity of the Notes; provided that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase
 
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<PAGE>
 
or redeem such Capital Stock upon the occurrence of an "asset sale" or "change
of control" occurring prior to the Stated Maturity of the Notes shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the
holders of such Capital Stock than the provisions contained in "Limitation on
Asset Sales" and "Repurchase of Notes upon a Change of Control" covenants
described below and such Capital Stock specifically provides that such Person
will not repurchase or redeem any such stock pursuant to such provision prior
to the Obligors' repurchase of such Notes as are required to be repurchased
pursuant to the "Limitation on Asset Sales" and "Repurchase of Notes upon a
Change of Control" covenants described below.
 
  "Existing Stockholders" means (i) the Morgan Stanley Entities and Time
Warner and their respective Affiliates and (ii) Holdings, so long as the
Morgan Stanley Entities and Time Warner, and their respective Affiliates, in
the aggregate, beneficially own a majority of the Voting Stock of Holdings.
 
  "fair market value" means the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the Board of Directors, whose determination shall be conclusive
if evidenced by a Board Resolution; provided that for purposes of clause
(viii) of the second paragraph of the "Limitation on Indebtedness" covenant,
(x) the fair market value of any security registered under the Exchange Act
shall be the average of the closing prices, regular way, of such security for
the 20 consecutive trading days immediately preceding the sale of Capital
Stock and (y) in the event the aggregate fair market value of any other
property (other than cash or cash equivalents) received by the Company or an
Obligor exceeds $10 million, the fair market value of such property shall be
determined by a nationally recognized investment banking firm and set forth in
the written opinion which shall be delivered to the Trustee.
 
  "GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Closing Date, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or
in such other statements by such other entity as approved by a significant
segment of the accounting profession. All ratios and computations contained or
referred to in the Indenture shall be computed in conformity with GAAP applied
on a consistent basis, except that calculations made for purposes of
determining compliance with the terms of the covenants and with other
provisions of the Indenture shall be made without giving effect to (i) the
amortization of any expenses incurred in connection with the Transactions and
(ii) except as otherwise provided, the amortization of any amounts required or
permitted by Accounting Principles Board Opinion Nos. 16 and 17.
 
  "Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or
by agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
 
  "Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness,
including an "Incurrence" of Indebtedness by reason of a Person becoming a
Restricted Subsidiary; provided that neither the accrual of interest nor the
accretion of original issue discount shall be considered an Incurrence of
Indebtedness.
 
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  "Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in (i) or (ii) above or (v),
(vi) or (vii) below) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if drawn
upon, to the extent such drawing is reimbursed no later than the third
Business Day following receipt by such Person of a demand for reimbursement),
(iv) all obligations of such Person to pay the deferred and unpaid purchase
price of property or services, which purchase price is due more than six
months after the date of placing such property in service or taking delivery
and title thereto or the completion of such services, except Trade Payables,
(v) all Capitalized Lease Obligations, (vi) all Indebtedness of other Persons
secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person and (viii) to the extent not
otherwise included in this definition, obligations under Currency Agreements
and Interest Rate Agreements. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations,
the maximum liability upon the occurrence of the contingency giving rise to
the obligation, provided (A) that the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP, (B) that money borrowed and set aside at the time of the Incurrence of
any Indebtedness in order to prefund the payment of the interest on such
Indebtedness shall not be deemed to be "Indebtedness" so long as such money is
held to secure the payment of such interest and (C) that Indebtedness shall
not include any liability for federal, state, local or other taxes.
 
  "Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
 
  "Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding (x) advances to customers or suppliers
in the ordinary course of business that are, in conformity with GAAP, recorded
as accounts receivable, prepaid expenses or deposits on the balance sheet of
the Company or its Restricted Subsidiaries and (y) deposits in connection with
any proposed Asset Acquisition not to exceed 10% of the estimated purchase
price for such Asset Acquisition) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition of
Capital Stock, bonds, notes, debentures or other similar instruments issued
by, such Person and shall include (i) the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary and (ii) the fair market value of the
Capital Stock (or any other Investment), held by the Company or any of its
Restricted Subsidiaries, of (or in) any Person that has ceased to be a
Restricted Subsidiary, including without limitation, by reason of any
transaction permitted by clause (iii) of the "Limitation on the Issuance and
Sale of Capital Stock of Restricted Subsidiaries" covenant; provided that the
fair market value of the Investment remaining in any Person that has ceased to
be a Restricted Subsidiary shall not exceed the aggregate amount of
Investments previously made in such Person valued at the time such Investments
were made less the net reduction of such Investments. For purposes of the
definition of "Unrestricted Subsidiary" and the "Limitation on Restricted
Payments" covenant described below, (i) "Investment" shall include the fair
market value of the assets (net of liabilities (other than liabilities to the
Company or any of its Restricted Subsidiaries)) of any Restricted Subsidiary
at the time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary, (ii) the fair market value of the assets (net of liabilities
(other than liabilities to the Company or any of its Restricted Subsidiaries))
of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary
is designated a
 
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Restricted Subsidiary shall be considered a reduction in outstanding
Investments and (iii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer.
 
  "Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
 
  "Moody's" means Moody's Investors Service, Inc. and its successors.
 
  "Net Cash Proceeds" means, (a) with respect to any Asset Sale, the proceeds
of such Asset Sale in the form of cash or cash equivalents, including payments
in respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and
proceeds from the conversion of other property received when converted to cash
or cash equivalents, net of (i) brokerage commissions and other fees and
expenses (including fees and expenses of counsel and investment bankers)
related to such Asset Sale, (ii) provisions for all taxes (whether or not such
taxes will actually be paid or are payable), including, without limitation,
distributions by the Company or a Restricted Subsidiary pursuant to clause
(ix) of the second paragraph of the "Limitation on Restricted Payments"
covenant, as a result of such Asset Sale without regard to the consolidated
results of operations of the Company and its Restricted Subsidiaries, taken as
a whole, (iii) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Asset Sale that either (A) is secured by a
Lien on the property or assets sold or (B) is required to be paid as a result
of such sale and (iv) appropriate amounts to be provided by the Company or any
Restricted Subsidiary as a reserve against any liabilities associated with
such Asset Sale, including, without limitation, pension and other post-
employment benefit liabilities, liabilities related to environmental matters
and liabilities under any indemnification obligations associated with such
Asset Sale, all as determined in conformity with GAAP and (b) with respect to
any issuance or sale of Capital Stock, the proceeds of such issuance or sale
in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal,
but not interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorney's fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
 
  "Offer to Purchase" means an offer to purchase Notes by the Obligors from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase (which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date such notice
is mailed) (the "Payment Date"); (iii) that any Note not tendered will
continue to accrue interest pursuant to its terms; (iv) that, unless the
Obligors default in the payment of the purchase price, any Note accepted for
payment pursuant to the Offer to Purchase shall cease to accrue interest on
and after the Payment Date; (v) that Holders electing to have a Note purchased
pursuant to the Offer to Purchase will be required to surrender the Note,
together with the form entitled "Option of the Holder to Elect Purchase" on
the reverse side of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date; (vi) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the third Business Day immediately preceding the Payment Date,
a telegram, facsimile transmission or letter setting forth the name of such
Holder, the principal amount at maturity of Notes delivered for purchase and a
statement that such Holder is withdrawing his election to have such Notes
purchased; and (vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered; provided that each Note purchased and each new Note
issued shall be in a principal amount at maturity of $1,000
 
                                      96

<PAGE>
 
or integral multiples thereof. On the Payment Date, the Obligors shall (i)
accept for payment on a pro rata basis Notes or portions thereof tendered
pursuant to an Offer to Purchase; (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
accepted; and (iii) deliver, or cause to be delivered, to the Trustee all
Notes or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the Obligors.
The Paying Agent shall promptly mail to the Holders of Notes so accepted
payment in an amount equal to the purchase price, and the Trustee shall
promptly authenticate and mail to such Holders a new Note equal in principal
amount at maturity to any unpurchased portion of the Note surrendered;
provided that each Note purchased and each new Note issued shall be in a
principal amount at maturity of $1,000 or integral multiples thereof. The
Obligors will publicly announce the results of an Offer to Purchase as soon as
practicable after the Payment Date. The Trustee shall act as the Paying Agent
for an Offer to Purchase. The Obligors will comply with Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable, in the event that the
Obligors are required to repurchase Notes pursuant to an Offer to Purchase.
 
  "Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with
or into or transfer or convey all or substantially all its assets to, the
Company or a Restricted Subsidiary; provided that such person's primary
business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such Investment; (ii)
Temporary Cash Investments; (iii) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses in accordance with GAAP; (iv) stock, obligations or
securities received in satisfaction of judgments; (v) loans or advances to
employees of the Company or any Restricted Subsidiary evidenced by
unsubordinated promissory notes that do not in the aggregate exceed at any one
time outstanding $1 million; (vi) Investments in any Person the primary
business of which is related, ancillary or complementary to the business of
the Company and its Restricted Subsidiaries on the date of such Investments;
provided the aggregate amount of Investments made pursuant to this clause (vi)
does not exceed $2 million plus the net reductions in Investments made
pursuant to this clause (vi) resulting from distributions on or repayments of
such Investments or the Net Cash Proceeds from the sale of any such
Investments, provided that the net reduction in any Investment shall not
exceed the amount of such Investment; (vii) deposits of proceeds with a
"qualified intermediary," "qualified trustee" or similar person for purposes
of facilitating a like-kind exchange under applicable provisions of the
Internal Revenue Code of 1986, as amended; or (viii) Interest Rate Agreements
and Currency Agreements designed solely to protect the Company or its
Restricted Subsidiaries against fluctuations in interest rates or foreign
currency exchange rates.
 
  "Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are not yet delinquent or are being contested in good
faith by appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made; (ii) statutory
and common law Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other similar Liens arising in the
ordinary course of business and with respect to amounts not yet delinquent or
being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory or
regulatory obligations (including obligations under franchise agreements),
bankers' acceptances, surety and appeal bonds, government contracts,
performance and return-of-money bonds and other obligations of a similar
nature incurred in the ordinary course of business (exclusive of obligations
for the payment of borrowed money); (v) easements, rights-of-way, municipal
and zoning ordinances and similar charges, encumbrances, title defects or
other irregularities that do not materially interfere with the ordinary course
of business of the Company or any of its Restricted Subsidiaries; (vi) Liens
upon real or personal property acquired after the Closing Date; provided that
(a) such Lien is created solely for the purpose of securing Indebtedness
Incurred, in accordance with the "Limitation on Indebtedness" covenant
described below, to
 
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<PAGE>
 
finance the cost (including the cost of design, development, acquisition,
installation, integration, improvement or construction) of the item of
property or assets subject thereto and such Lien is created prior to, at the
time of or within six months after the later of the acquisition, the
completion of construction or the commencement of full operation of such
property (b) the principal amount of the Indebtedness secured by such Lien
does not exceed 100% of such cost and (c) any such Lien shall not extend to or
cover any property or assets other than such item of property or assets and
any improvements on such item; (vii) leases or subleases granted to others
that do not materially interfere with the ordinary course of business of the
Company and its Restricted Subsidiaries, taken as a whole; (viii) Liens
encumbering property or assets under construction arising from progress or
partial payments by a customer of the Company or its Restricted Subsidiaries
relating to such property or assets; (ix) any interest or title of a lessor in
the property subject to any Capitalized Lease or operating lease; (x) Liens
arising from filing Uniform Commercial Code financing statements regarding
leases; (xi) Liens on property of, or on shares of Capital Stock or
Indebtedness of, any Person existing at the time such Person becomes, or
becomes a part of, any Restricted Subsidiary; provided that such Liens do not
extend to or cover any property or assets of the Company or any Restricted
Subsidiary other than the property or assets acquired; (xii) Liens in favor of
the Company or any Restricted Subsidiary; (xiii) Liens arising from the
rendering of a final judgment or order against the Company or any Restricted
Subsidiary that does not give rise to an Event of Default; (xiv) Liens
securing reimbursement obligations with respect to letters of credit that
encumber documents and other property relating to such letters of credit and
the products and proceeds thereof; (xv) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (xvi) Liens encumbering customary
initial deposits and margin deposits, and other Liens that are within the
general parameters customary in the industry and incurred in the ordinary
course of business, in each case, securing Indebtedness under Interest Rate
Agreements and Currency Agreements and forward contracts, options, future
contracts, futures options or similar agreements or arrangements designed
solely to protect the Company or any of its Restricted Subsidiaries from
fluctuations in interest rates, currencies or the price of commodities; (xvii)
Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business in accordance with
industry practice; (xviii) Liens resulting from deposits made in connection
with any proposed Asset Acquisition provided that such deposit does not exceed
10% of the estimated purchase price for such Asset Acquisition; (xix) Liens
upon real or personal property acquired after the Closing Date that secure
Indebtedness under clause (vi) above to secure any other Indebtedness secured
under clause (vi) above; provided that the aggregate principal amount of
Indebtedness secured by such Liens does not exceed 100% of the cost of all of
the property securing such Indebtedness under clause (vi) above; and (xx)
Liens on or sales of receivables, including related intangible assets and
proceeds thereof.
 
  "Preferred Stock" means, with respect to any Person, such Person's preferred
or preference equity, whether outstanding on the Closing Date or issued
thereafter, including, without limitation, all series and classes of such
preferred or preference stock, including any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) thereof.
 
  "Public Equity Offering" means an underwritten primary public offering of
Common Stock of the Company or an Obligor pursuant to an effective
registration statement under the Securities Act.
 
  A "Public Market" shall be deemed to exist if (i) a Public Equity Offering
has been consummated and (ii) at least 15% of the total issued and outstanding
Common Stock of the Company or an Obligor has been distributed by means of an
effective registration statement under the Securities Act or sales pursuant to
Rule 144 under the Securities Act.
 
  "Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
 
  "Significant Subsidiary" means, at any date of determination, the Obligors
and any Restricted Subsidiary that, together with its Subsidiaries, (i) for
the most recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii)
as of the end of such
 
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fiscal year, was the owner of more than 10% of the consolidated assets of the
Company and its Restricted Subsidiaries, all as set forth on the most recently
available consolidated financial statements of the Company for such fiscal
year.
 
  "Specified Date" means any Redemption Date, any Payment Date for an Offer to
Purchase or any date on which the Notes first become due and payable after an
Event of Default.
 
  "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, and its successors.
 
  "Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii)
with respect to any scheduled installment of principal of or interest on any
debt security, the date specified in such debt security as the fixed date on
which such installment is due and payable.
 
  "Subsidiary" means, with respect to any Person, any corporation, association
or other business entity of which more than 50% of the voting power of the
outstanding Voting Stock is owned, directly or indirectly, by such Person and
one or more other Subsidiaries of such Person.
 
  "Tax Amount" means, with respect to any period, without duplication, the
increase in the cumulative United States federal, state and local tax
liability of holders of equity interests in the Company or a Restricted
Subsidiary, as applicable (or if such holder is a pass-through entity for
United States income tax purposes, holders of its equity interests) in respect
of their interests in the Company or such Restricted Subsidiary for such
period plus any additional amounts payable to such holders to cover taxes
arising from the ownership of such equity interests, but excluding any
increase in tax liability or additional amounts payable in respect of a gain
realized by a holder of an equity interest in the Company or a Restricted
Subsidiary upon the sale or disposition by such holder of an equity interest,
including without limitation, any redemption thereof by the Company, in the
Company or a Restricted Subsidiary.
 
  "Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or
obligations fully and unconditionally guaranteed by the United States of
America or any agency thereof, (ii) time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess of
$50 million (or the foreign currency equivalent thereof) and has outstanding
debt which is rated "A" (or such similar equivalent rating) or higher by at
least one nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above, (iv) commercial paper, maturing
not more than 90 days after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence under the
laws of the United States of America, any state thereof or any foreign country
recognized by the United States of America with a rating at the time as of
which any investment therein is made of "P-1" (or higher) according to Moody's
or "A-1" (or higher) according to S&P, and (v) securities with maturities of
six months or less from the date of acquisition issued or fully and
unconditionally guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by S&P or Moody's.
 
  "Trade Payables" means, with respect to any Person, any accounts payable or
any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
 
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  "Transaction Date" means, with respect to the Incurrence of any Indebtedness
by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment,
the date such Restricted Payment is to be made.
 
  "Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below; and (ii) any Subsidiary
of an Unrestricted Subsidiary. The Board of Directors may designate any
Restricted Subsidiary (including any newly acquired or newly formed Subsidiary
of the Company), other than the Obligors, to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any Restricted Subsidiary; provided that (A)
any Guarantee by the Company or any Restricted Subsidiary of any Indebtedness
of the Subsidiary being so designated shall be deemed an "Incurrence" of such
Indebtedness and an "Investment" by the Company or such Restricted Subsidiary
(or both, if applicable) at the time of such designation; (B) either (I) the
Subsidiary to be so designated has total assets of $1,000 or less or (II) if
such Subsidiary has assets greater than $1,000, such designation would be
permitted under the "Limitation on Restricted Payments" covenant described
below and (C) if applicable, the Incurrence of Indebtedness and the Investment
referred to in clause (A) of this proviso would be permitted under the
"Limitation on Indebtedness" and "Limitation on Restricted Payments" covenants
described below. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that (i) no Default or
Event of Default shall have occurred and be continuing at the time of or after
giving effect to such designation and (ii) all Liens and Indebtedness of such
Unrestricted Subsidiary outstanding immediately after such designation would,
if Incurred at such time, have been permitted to be Incurred (and shall be
deemed to have been Incurred) for all purposes of the Indenture. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
 
  "Voting Stock" means with respect to any Person, Capital Stock of any class
or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
 
  "Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
 
COVENANTS
 
  Limitation on Indebtedness
 
  (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (other than the Notes, the Guaranty
and Indebtedness existing on the Closing Date); provided that the Company or
any Obligor may Incur Indebtedness if, after giving effect to the Incurrence
of such Indebtedness and the receipt and application of the proceeds
therefrom, the Consolidated Leverage Ratio would be greater than zero and (x)
less than or equal to 7.25 to 1, for Indebtedness Incurred on or prior to
December 31, 1999, or (y) less than or equal to 6.75 to 1, for Indebtedness
Incurred thereafter.
 
  Notwithstanding the foregoing, the Company and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following: (i)
Indebtedness outstanding at any time in an aggregate principal amount not to
exceed the greater of (x) $200 million, less any amount of such Indebtedness
permanently repaid as provided under the "Limitation on Asset Sales" covenant
described below and (y) an amount equal to 4.5 times the Company's
Consolidated EBITDA for the then most recent fiscal quarter for which
financial statements of the Company have been filed with the Commission
(giving pro forma effect to any Asset Acquisitions and Asset Dispositions as
provided under the definition of "Consolidated Leverage Ratio") multiplied by
four; (ii) Indebtedness owed (A) to
 
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the Company or any Obligor evidenced by a promissory note or (B) to any other
Restricted Subsidiary; provided that any event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
transfer of such Indebtedness (other than to the Company or another Restricted
Subsidiary) shall be deemed, in each case, to constitute an Incurrence of such
Indebtedness not permitted by this clause (ii); (iii) Indebtedness issued in
exchange for, or the net proceeds of which are used to refinance or refund,
then outstanding Indebtedness (other than Indebtedness Incurred under clause
(i), (ii), (iv), (vi), (vii) or (viii) of this paragraph) and any refinancings
thereof in an amount not to exceed the amount so refinanced or refunded (plus
premiums, accrued interest, fees and expenses); provided that Indebtedness the
proceeds of which are used to refinance or refund the Notes and the Guaranty
or Indebtedness that is pari passu with, or subordinated in right of payment
to, the Notes and the Guaranty shall only be permitted under this clause (iii)
if (A) in case the Notes and the Guaranty are refinanced in part or the
Indebtedness to be refinanced is pari passu with the Notes and the Guaranty,
such new Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is outstanding, is
expressly made pari passu with, or subordinate in right of payment to, the
remaining Notes and the Guaranty, (B) in case the Indebtedness to be
refinanced is subordinated in right of payment to the Notes and the Guaranty,
such new Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the Notes
and the Guaranty at least to the extent that the Indebtedness to be refinanced
is subordinated to the Notes and the Guaranty and (C) such new Indebtedness,
determined as of the date of Incurrence of such new Indebtedness, does not
mature prior to the Stated Maturity of the Indebtedness to be refinanced or
refunded, and the Average Life of such new Indebtedness is at least equal to
the remaining Average Life of the Indebtedness to be refinanced or refunded;
and provided further that in no event may Indebtedness of the Company or the
Obligors be refinanced by means of any Indebtedness of any Restricted
Subsidiary other than the Obligors pursuant to this clause (iii); (iv)
Indebtedness (A) in respect of performance, surety or appeal bonds,
performance guarantees or similar obligations securing the Company's or any
Restricted Subsidiary's obligations under any cable television franchise, pole
attachment agreement or lease or other similar agreement incurred in the
ordinary course of business and entered into in connection with the day-to-day
operations of such business, (B) under Currency Agreements and Interest Rate
Agreements; provided that such agreements (a) are designed solely to protect
the Company or its Restricted Subsidiaries against fluctuations in foreign
currency exchange rates or interest rates and (b) do not increase the
Indebtedness of the obligor outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or interest rates or by reason
of fees, indemnities and compensation payable thereunder; and (C) arising from
agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted Subsidiary
for the purpose of financing such acquisition), in a principal amount not to
exceed the gross proceeds actually received by the Company or any Restricted
Subsidiary in connection with such disposition; (v) Indebtedness of the
Company or the Obligors, to the extent the net proceeds thereof are promptly
(A) used to purchase Notes tendered in an Offer to Purchase made as a result
of a Change in Control or (B) deposited to defease the Notes as described
below under "Defeasance"; (vi) Guarantees of the Notes and Guarantees of
Indebtedness of the Company or the Obligors by any Restricted Subsidiary
provided the Guarantee of such Indebtedness is permitted by and made in
accordance with the "Limitation on Issuance of Guarantees by Restricted
Subsidiaries" covenant described below; (vii) Indebtedness Incurred to finance
the cost to acquire equipment, inventory or other assets used or useful in the
business of the Company and its Restricted Subsidiaries (including
acquisitions by way of a Capitalized Lease and the acquisition of the Capital
Stock of a Person that becomes a Restricted Subsidiary), in an aggregate
principal amount outstanding at any time not to exceed 5% of the Company's
total assets as set forth on the most recently available quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries
filed with the Commission; (viii) Indebtedness of the Company or any Obligor
not to exceed, at any one time outstanding, two times the sum of (A) the Net
Cash Proceeds received by the Company or an Obligor after the Closing Date as
a capital contribution (other than a capital contribution by the Company or
any Subsidiary of the Company) or from the sale of its Capital Stock (other
than Disqualified Stock) to a Person other than the Company or any
 
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Subsidiary of the Company, to the extent such capital contribution or sale of
Capital Stock has not been used pursuant to clause (C)(2) of the first
paragraph or clause (iii), or (iv) of the second paragraph of the "Limitation
on Restricted Payments" covenant described below to make a Restricted Payment
and (B) 80% of the fair market value of property (other than cash and cash
equivalents) received by the Company or an Obligor after the Closing Date as a
capital contribution (other than a capital contribution by the Company or any
Subsidiary of the Company) or from the sale of its Capital Stock (other than
Disqualified Stock) to a Person other than the Company or any Subsidiary of
the Company, to the extent such capital contribution or sale of Capital Stock
has not been used pursuant to clause (iii), (iv) or (vi) of the second
paragraph of the "Limitation on Restricted Payments" covenant described below
to make a Restricted Payment; provided that such Indebtedness does not mature
prior to the Stated Maturity of the Notes and has an Average Life longer than
the Notes; and (ix) Acquired Indebtedness; provided that after giving effect
to the Incurrence thereof, the Company could Incur at least $1.00 of
Indebtedness under the first paragraph of the "Limitation on Indebtedness"
covenant.
 
  (b) Notwithstanding any other provision of this "Limitation on Indebtedness"
covenant, the maximum amount of Indebtedness that the Company or a Restricted
Subsidiary may Incur pursuant to this "Limitation on Indebtedness" covenant
shall not be deemed to be exceeded, with respect to any outstanding
Indebtedness due solely to the result of fluctuations in the exchange rates of
currencies.
 
  (c) For purposes of determining any particular amount of Indebtedness under
this "Limitation on Indebtedness" covenant, (1) Indebtedness Incurred under
the Credit Agreement on or prior to the Closing Date shall be treated as
Incurred pursuant to clause (i) of the second paragraph of this "Limitation on
Indebtedness" covenant, (2) Guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (3) any
Liens granted pursuant to the equal and ratable provisions referred to in the
"Limitation on Liens" covenant described below shall not be treated as
Indebtedness. For purposes of determining compliance with this "Limitation on
Indebtedness" covenant, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the above
clauses (other than Indebtedness referred to in clause (1) of the preceding
sentence), the Company, in its sole discretion, shall classify, and from time
to time may reclassify, such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such clauses;
provided that any Indebtedness Incurred under any of clauses (i) through (ix)
of the second paragraph of this covenant shall be deemed to be no longer
outstanding under any such clauses and shall be deemed to have been Incurred
under the first paragraph of this covenant on the first date on which the
Company could have Incurred such Indebtedness under the first paragraph of
this covenant if no Default or Event of Default would be continuing after
giving effect to such Incurrence.
 
  Limitation on Restricted Payments
 
  The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, (i) declare or pay any dividend or make any
distribution on or with respect to its Capital Stock held by Persons other
than the Company or any of its Restricted Subsidiaries (other than (x)
dividends or distributions payable solely in shares of its Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
acquire shares of such Capital Stock and (y) pro rata dividends or
distributions on Common Stock of Restricted Subsidiaries other than the
Obligors held by minority stockholders), (ii) purchase, redeem, retire or
otherwise acquire for value any shares of Capital Stock of (A) the Company, an
Obligor or an Unrestricted Subsidiary (including options, warrants or other
rights to acquire such shares of Capital Stock) held by any Person (other than
the Company or a Wholly Owned Restricted Subsidiary) or (B) any Restricted
Subsidiary other than the Obligors (including options, warrants or other
rights to acquire such shares of Capital Stock) held by any Affiliate of the
Company or any Obligor (other than a Wholly Owned Restricted Subsidiary) or
any holder (or any Affiliate of such holder) of 5% or more of the Capital
Stock of the Company or any Obligor, (iii) make any voluntary or optional
principal payment, or voluntary or optional redemption, repurchase,
defeasance, or other acquisition or retirement for value, of Indebtedness of
the Company that is subordinated in right of payment to the Guaranty or
Indebtedness of an Obligor that is subordinated in right of payment to the
Notes or (iv) make any Investment, other than a Permitted Investment, in any
Person (such payments or any other actions described in clauses (i) through
(iv)
 
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<PAGE>
 
above being collectively "Restricted Payments") if, at the time of, and after
giving effect to, the proposed Restricted Payment:   (A) a Default or Event of
Default shall have occurred and be continuing, (B) the Company could not Incur
at least $1.00 of Indebtedness under the first paragraph of the "Limitation on
Indebtedness" covenant or (C) the aggregate amount of all Restricted Payments
(the amount, if other than in cash, to be determined in good faith by the
Board of Directors, whose determination shall be conclusive and evidenced by a
Board Resolution) made after the Closing Date shall exceed the sum of (1) the
amount by which Consolidated EBITDA exceeds 130% of Consolidated Interest
Expense, in each case, determined on a cumulative basis during the period
(taken as one accounting period) beginning on the first day of the fiscal
quarter immediately following the Closing Date and ending on the last day of
the last fiscal quarter preceding the Transaction Date for which reports have
been filed with the Commission or provided to the Trustee pursuant to the
"Commission Reports and Reports to Holders" covenant plus (2) the aggregate
Net Cash Proceeds received by the Company or an Obligor after the Closing Date
as a capital contribution (other than a capital contribution by the Company or
any Subsidiary of the Company) or from the issuance and sale permitted by the
Indenture of its Capital Stock (other than Disqualified Stock) to a Person
other than the Company or any Subsidiary of the Company, including an issuance
or sale permitted by the Indenture of Indebtedness of the Company or an
Obligor for cash subsequent to the Closing Date upon the conversion of such
Indebtedness into Capital Stock (other than Disqualified Stock) of the Company
or such Obligor, or from the issuance to a Person other than the Company or
any Subsidiary of the Company of any options, warrants or other rights to
acquire Capital Stock of the Company or an Obligor (in each case, exclusive of
any Disqualified Stock or any options, warrants or other rights that are
redeemable at the option of the holder, or are required to be redeemed, prior
to the Stated Maturity of the Notes), in each case except to the extent such
Net Cash Proceeds are used to Incur Indebtedness outstanding under clause
(viii) of the second paragraph under the "Limitation on Indebtedness"
covenant, plus (3) an amount equal to the net reduction in Investments (other
than reductions in Permitted Investments) in any Person resulting from
payments of interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of assets, in each case to the Company or any
Restricted Subsidiary or from the Net Cash Proceeds from the sale of any such
Investment (except, in each case, to the extent any such payment or proceeds
are included in the calculation of Adjusted Consolidated Net Income), or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of "Investments"), not to exceed,
in each case, the amount of Investments previously made by the Company or any
Restricted Subsidiary in such Person or Unrestricted Subsidiary.
 
  The foregoing provision shall not be violated by reason of:   (i) the
payment of any dividend within 60 days after the date of declaration thereof
if, at said date of declaration, such payment would comply with the foregoing
paragraph; (ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of payment
to the Guaranty or the Notes including premium, if any, and accrued and unpaid
interest, with the proceeds of, or in exchange for, Indebtedness Incurred
under clause (iii) of the second paragraph of part (a) of the "Limitation on
Indebtedness" covenant; (iii) the repurchase, redemption or other acquisition
of Capital Stock of the Company, an Obligor or an Unrestricted Subsidiary (or
options, warrants or other rights to acquire such Capital Stock) in exchange
for, or out of the proceeds of a substantially concurrent offering of, shares
of Capital Stock (other than Disqualified Stock) of the Company or an Obligor
(or options, warrants or other rights to acquire such Capital Stock); (iv) the
making of any principal payment or the repurchase, redemption, retirement,
defeasance or other acquisition for value of Indebtedness of the Company which
is subordinated in right of payment to the Guaranty or Indebtedness of an
Obligor which is subordinated in right of payment to the Notes in exchange
for, or out of the proceeds of, a substantially concurrent offering of, shares
of the Capital Stock (other than Disqualified Stock) of the Company or an
Obligor (or options, warrants or other rights to acquire such Capital Stock);
(v) payments or distributions, to dissenting stockholders pursuant to
applicable law, pursuant to or in connection with a consolidation, merger or
transfer of assets that complies with the provisions of the Indenture
applicable to mergers, consolidations and transfers of all or substantially
all of the property and assets of the Company; (vi) Investments acquired as a
capital contribution or in exchange for Capital Stock (other than Disqualified
Stock) of the Company or an Obligor; (vii) the purchase, redemption,
acquisition, cancellation or other retirement for value of shares of Capital
Stock of the Company or an Obligor, options for any such shares or related
stock appreciation rights or similar
 
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securities held by officers or employees or former officers or employees (or
their estates or beneficiaries under their estates), upon death, disability,
retirement or termination of employment or pursuant to any agreement under
which such shares of stock or related rights were issued; provided that the
aggregate consideration paid for such purchase, redemption, acquisition,
cancellation or other retirement of such shares or related rights after the
Closing Date does not exceed $2 million; (viii) the declaration or payment of
dividends on the Common Stock of the Company or an Obligor following a Public
Equity Offering of such Common Stock, of up to 6% per annum of the Net Cash
Proceeds received by the Company or such Obligor in such Public Equity
Offering; (ix) for so long as the Company or any Restricted Subsidiary is
treated as a pass-through entity for United States federal income tax
purposes, distributions to equity holders of the Company or any Restricted
Subsidiary in an amount not to exceed the Tax Amount for such period; or (x)
other Restricted Payments in an aggregate amount not to exceed $10 million;
provided that, except in the case of clauses (i) and (iii), no Default or
Event of Default shall have occurred and be continuing or occur as a
consequence of the actions or payments set forth therein.
 
  Each Restricted Payment permitted pursuant to the preceding paragraph (other
than the Restricted Payment referred to in clause (ii) thereof, an exchange of
Capital Stock for Capital Stock or Indebtedness referred to in clause (iii) or
(iv) thereof and an Investment referred to in clause (vi) thereof), and the
Net Cash Proceeds from any issuance of Capital Stock referred to in clauses
(iii) and (iv), shall be included in calculating whether the conditions of
clause (C) of the first paragraph of this "Limitation on Restricted Payments"
covenant have been met with respect to any subsequent Restricted Payments. In
the event the proceeds of an issuance of Capital Stock of the Company or an
Obligor are used for the redemption, repurchase or other acquisition of the
Notes, or Indebtedness that is pari passu with the Notes or the Guaranty, then
the Net Cash Proceeds of such issuance shall be included in clause (C) of the
first paragraph of this "Limitation on Restricted Payments" covenant only to
the extent such proceeds are not used for such redemption, repurchase or other
acquisition of Indebtedness.
 
  Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries
 
  The Company will not, and will not permit any Restricted Subsidiary to,
create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions
permitted by applicable law on any Capital Stock of such Restricted Subsidiary
owned by the Company or any other Restricted Subsidiary, (ii) pay any
Indebtedness owed to the Company or any other Restricted Subsidiary, (iii)
make loans or advances to the Company or any other Restricted Subsidiary or
(iv) transfer any of its property or assets to the Company or any other
Restricted Subsidiary.
 
  The foregoing provisions shall not restrict any encumbrances or
restrictions:   (i) existing on the Closing Date in the Credit Agreement, the
Indenture or any other agreements in effect on the Closing Date, and any
extensions, refinancings, renewals or replacements of such agreements;
provided that (x) the encumbrances and restrictions in any such extensions,
refinancings, renewals or replacements are no less favorable in any material
respect to the Holders than those encumbrances or restrictions that are then
in effect and that are being extended, refinanced, renewed or replaced or (y)
the encumbrances and restrictions in any such modifications, extensions,
refinancings, renewals, restructurings, substitutions or replacements (A) do
not prevent the Company or any of its Restricted Subsidiaries from paying
interest on the Notes and (B) will be no more restrictive in any material
respect than encumbrances and restrictions which could be obtained by a Person
comparable to the Company or such Restricted Subsidiary under then prevailing
market conditions; (ii) existing under or by reason of applicable law; (iii)
existing with respect to any Person or the property or assets of such Person
acquired by the Company or any Restricted Subsidiary, existing at the time of
such acquisition and not incurred in contemplation thereof, which encumbrances
or restrictions are not applicable to any Person or the property or assets of
any Person other than such Person or the property or assets of such Person so
acquired; (iv) in the case of clause (iv) of the first paragraph of this
"Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries" covenant, (A) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (B) existing by
virtue of any transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Company or
 
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any Restricted Subsidiary not otherwise prohibited by the Indenture or (C)
arising or agreed to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate, detract from
the value of property or assets of the Company or any Restricted Subsidiary in
any manner material to the Company or any Restricted Subsidiary; (v) with
respect to a Restricted Subsidiary and imposed pursuant to an agreement that
has been entered into for the sale or disposition of all or substantially all
of the Capital Stock of, or property and assets of, such Restricted
Subsidiary; or (vi) contained in the terms of any Indebtedness or any
agreement pursuant to which such Indebtedness was issued if (A) the
encumbrance or restriction applies only in the event of a payment default or a
default with respect to a financial covenant contained in such Indebtedness or
agreement, (B) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in comparable
financings (as determined by the Company) and (C) the Company determines, at
the time of entering into such encumbrance or restriction, that any such
encumbrance or restriction will not materially affect the Company's ability to
make principal or interest payments on the Notes. Nothing contained in this
"Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries" covenant shall prevent the Company or any Restricted Subsidiary
from (1) creating, incurring, assuming or suffering to exist any Liens
otherwise permitted in the "Limitation on Liens" covenant or (2) restricting
the sale or other disposition of property or assets of the Company or any of
its Restricted Subsidiaries that secure Indebtedness of the Company or any of
its Restricted Subsidiaries.
 
  Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries
 
  The Company will not sell, and will not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell, any shares of Capital Stock of a
Restricted Subsidiary other than an Obligor (including options, warrants or
other rights to purchase shares of such Capital Stock) except (i) to the
Company or a Wholly Owned Restricted Subsidiary; (ii) issuances of director's
qualifying shares or sales to foreign nationals of shares of Capital Stock of
foreign Restricted Subsidiaries, to the extent required by applicable law;
(iii) if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and
any Investment in such Person remaining after giving effect to such issuance
or sale would have been permitted to be made under the "Limitation on
Restricted Payments" covenant if made on the date of such issuance or sale; or
(iv) issuances or sales of Common Stock of a Restricted Subsidiary provided
that the Company or such Restricted Subsidiary applies the Net Cash Proceeds,
if any, of any such sale in accordance with clause (A) or (B) of the
"Limitation on Asset Sales" covenant described below.
 
  Limitation on Issuances of Guarantees by Restricted Subsidiaries
 
  The Company will not permit any Restricted Subsidiary other than an Obligor,
directly or indirectly, to Guarantee any Indebtedness of the Company or any
Obligor which is pari passu with or subordinate in right of payment to the
Notes or the Guaranty ("Guaranteed Indebtedness"), unless (i) such Restricted
Subsidiary simultaneously executes and delivers a supplemental indenture to
the Indenture providing for a Guarantee (a "Subsidiary Guarantee") of payment
of the Notes by such Restricted Subsidiary and (ii) such Restricted Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Restricted Subsidiary as a
result of any payment by such Restricted Subsidiary under its Subsidiary
Guarantee; provided that this paragraph shall not be applicable to (x) any
Guarantee of any Restricted Subsidiary that existed at the time such Person
became a Restricted Subsidiary and was not Incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary or (y) any
Guarantee of Indebtedness, including Indebtedness under the Credit Agreement,
Incurred under clause (i) of the second paragraph under the "Limitation on
Indebtedness" covenant. If the Guaranteed Indebtedness is (A) pari passu with
the Notes or the Guaranty, then the Guarantee of such Guaranteed Indebtedness
shall be pari passu with, or subordinated to, the Subsidiary Guarantee or (B)
subordinated to the Notes or the Guaranty, then the Guarantee of such
Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that the Guaranteed Indebtedness is subordinated to the
Notes or the Guaranty.
 
  Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or
 
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transfer, to any Person not an Affiliate of the Company, of all of the
Company's and each Restricted Subsidiary's Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by the Indenture) or (ii) the release
or discharge of the Guarantee which resulted in the creation of such
Subsidiary Guarantee, except a discharge or release by or as a result of
payment under such Guarantee.
 
  Limitation on Transactions with Shareholders and Affiliates
 
  The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock of the
Company or with any Affiliate of the Company or any Restricted Subsidiary,
except upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than could be obtained, at the time of such transaction
or, if such transaction is pursuant to a written agreement, at the time of the
execution of the agreement providing therefor, in a comparable arm's-length
transaction with a Person that is not such a holder or an Affiliate.
 
  The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized
investment banking firm (including, without limitation, Morgan Stanley & Co.
Incorporated and its Affiliates) stating that the transaction is fair to the
Company or such Restricted Subsidiary from a financial point of view; (ii) any
transaction solely between the Company and any of its Wholly Owned Restricted
Subsidiaries or solely between Wholly Owned Restricted Subsidiaries; (iii) the
payment of reasonable and customary regular fees to directors of the Company
who are not employees of the Company; (iv) any payments or other transactions
pursuant to any tax-sharing agreement between the Company and any other Person
with which the Company files a consolidated tax return or with which the
Company is part of a consolidated group for tax purposes; (v) programming
agreements, marketing and promotional agreements, equipment agreements and
agreements for other goods or services related to the business of the Company
and its Restricted Subsidiaries entered into in the ordinary course of
business by the Company or any Restricted Subsidiary and Time Warner or its
Affiliates; (vi) the payment of fees to Morgan Stanley & Co. Incorporated or
its Affiliates for financial, advisory, consulting or investment banking
services that the Board of Directors deems to be advisable or appropriate
(including, without limitation, the payment of any underwriting discounts or
commissions or placement agency fees in connection with the issuance and sale
of securities); (vii) the Transactions; or (viii) any Restricted Payments not
prohibited by the "Limitation on Restricted Payments" covenant.
Notwithstanding the foregoing, any transaction or series of related
transactions covered by the first paragraph of this "Limitation on
Transactions with Shareholders and Affiliates" covenant and not covered by
clauses (ii) through (viii) of this paragraph, (a) the aggregate amount of
which exceeds $2 million in value, must be approved or determined to be fair
in the manner provided for in clause (i)(A) or (B) above and (b) the aggregate
amount of which exceeds $4 million in value, must be determined to be fair in
the manner provided for in clause (i)(B) above.
 
  Limitation on Liens
 
  The Company will not, and will not permit any Restricted Subsidiary to,
create, incur, assume or suffer to exist any Lien on any of its assets or
properties of any character, or any shares of Capital Stock or Indebtedness of
any Restricted Subsidiary, without making effective provision for all of the
Notes and the Guaranty and all other amounts due under the Indenture to be
directly secured equally and ratably with (or, if the obligation or liability
to be secured by such Lien is subordinated in right of payment to the Notes
and the Guaranty, prior to) the obligation or liability secured by such Lien.
 
  The foregoing limitation does not apply to (i) Liens existing on the Closing
Date, including Liens securing obligations under the Credit Agreement; (ii)
Liens granted after the Closing Date on any assets or Capital Stock of the
Company or its Restricted Subsidiaries created in favor of the Holders; (iii)
Liens with respect to the assets
 
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of a Restricted Subsidiary granted by such Restricted Subsidiary to the
Company or a Wholly Owned Restricted Subsidiary to secure Indebtedness owing
to the Company or such other Restricted Subsidiary; (iv) Liens securing
Indebtedness which is Incurred to refinance secured Indebtedness which is
permitted to be Incurred under clause (iii) of the second paragraph of the
"Limitation on Indebtedness" covenant; provided that such Liens do not extend
to or cover any property or assets of the Company or any Restricted Subsidiary
other than the property or assets securing the Indebtedness being refinanced;
(v) Liens on the Capital Stock of or any property or assets of a Restricted
Subsidiary securing Indebtedness of such Restricted Subsidiary permitted under
the "Limitation on Indebtedness" covenant; (vi) Liens securing Indebtedness
outstanding under clause (i) of the second paragraph under the "Limitation on
Indebtedness" covenant; or (vii) Permitted Liens.
 
  Limitation on Sale-Leaseback Transactions
 
  The Company will not, and will not permit any Restricted Subsidiary to,
enter into any sale-leaseback transaction involving any of its assets or
properties whether now owned or hereafter acquired, whereby the Company or a
Restricted Subsidiary sells or transfers such assets or properties and then or
thereafter leases such assets or properties or any part thereof or any other
assets or properties which the Company or such Restricted Subsidiary, as the
case may be, intends to use for substantially the same purpose or purposes as
the assets or properties sold or transferred.
 
  The foregoing restriction does not apply to any sale-leaseback transaction
if (i) the lease is for a period, including renewal rights, of not in excess
of three years; (ii) the lease secures or relates to industrial revenue or
pollution control bonds; (iii) the transaction is solely between the Company
and any Wholly Owned Restricted Subsidiary or solely between Wholly Owned
Restricted Subsidiaries; or (iv) the Company or such Restricted Subsidiary,
within 12 months after the sale or transfer of any assets or properties is
completed, applies an amount not less than the net proceeds received from such
sale in accordance with clause (A) or (B) of the first paragraph of the
"Limitation on Asset Sales" covenant described below.
 
  Limitation on Asset Sales
 
  The Company will not, and will not permit any Restricted Subsidiary to,
consummate any Asset Sale, unless (i) the consideration received by the
Company or such Restricted Subsidiary is at least equal to the fair market
value of the assets sold or disposed of and (ii) at least 75% of the
consideration received consists of cash or Temporary Cash Investments or the
assumption of Indebtedness of the Company or any Restricted Subsidiary,
provided that the Company or such Restricted Subsidiary is irrevocably and
unconditionally released from all liability under such Indebtedness. In the
event and to the extent that the Net Cash Proceeds received by the Company or
any of its Restricted Subsidiaries from one or more Asset Sales occurring on
or after the Closing Date in any period of 12 consecutive months exceed 10% of
Adjusted Consolidated Net Tangible Assets (determined as of the date closest
to the commencement of such 12-month period for which a consolidated balance
sheet of the Company and its Subsidiaries has been filed with the Commission
pursuant to the "Commission Reports and Reports to Holders" covenant), then
the Company shall or shall cause the relevant Restricted Subsidiary to (i)
within twelve months after the date Net Cash Proceeds so received exceed 10%
of Adjusted Consolidated Net Tangible Assets (A) apply an amount equal to such
excess Net Cash Proceeds to permanently repay unsubordinated Indebtedness of
the Company, the Obligors or any Restricted Subsidiary providing a Subsidiary
Guarantee pursuant to the "Limitation on Issuances of Guarantees by Restricted
Subsidiaries" covenant described above or Indebtedness of any other Restricted
Subsidiary, in each case owing to a Person other than the Company or any of
its Restricted Subsidiaries or (B) invest an equal amount, or the amount not
so applied pursuant to clause (A) (or enter into a definitive agreement
committing to so invest within 12 months after the date of such agreement), in
property or assets (other than current assets) of a nature or type or that are
used in a business (or in a company having property and assets of a nature or
type, or engaged in a business) similar or related to the nature or type of
the property and assets of, or the business of, the Company and its Restricted
Subsidiaries existing on the date of such investment and (ii) apply (no later
than the end of the 12-month period referred to in clause (i)) such excess Net
Cash Proceeds (to the extent not applied pursuant to
 
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clause (i)) as provided in the following paragraph of this "Limitation on
Asset Sales" covenant. Without in any way limiting the Company's discretion
under the preceding sentence, pending the final application of any such Net
Cash Proceeds, the Company or such Restricted Subsidiary may temporarily
reduce Indebtedness under a revolving credit facility, if any, or otherwise
invest such Net Cash Proceeds. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such 12-month
period as set forth in clause (i) of the preceding sentence and not applied as
so required by the end of such period shall constitute "Excess Proceeds."
 
  If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
this "Limitation on Asset Sales" covenant totals at least $10 million, the
Obligors must commence, not later than the fifteenth Business Day of such
month, and consummate an Offer to Purchase from the Holders (and if required
by the terms of any Indebtedness that is pari passu with the Notes or the
Guaranty ("Pari Passu Indebtedness"), from the holders of such Pari Passu
Indebtedness) on a pro rata basis an aggregate Accreted Value of Notes (and
Pari Passu Indebtedness) equal to the Excess Proceeds on such date, at a
purchase price equal to 100% of the Accreted Value of the Notes on the
relevant Payment Date (and principal amount of Pari Passu Indebtedness), plus,
in each case, accrued interest (if any) to the Payment Date.
 
REPURCHASE OF NOTES UPON A CHANGE OF CONTROL
 
  The Obligors must commence, within 30 days of the occurrence of a Change of
Control, and consummate an Offer to Purchase for all Notes then outstanding,
at a purchase price equal to 101% of the Accreted Value thereof on the
relevant Payment Date, plus accrued interest (if any) to the Payment Date.
 
  There can be no assurance that the Obligors will have sufficient funds
available at the time of any Change of Control to make any debt payment
(including repurchases of Notes) required by the foregoing covenant (as well
as may be contained in other securities of the Company and the Obligors which
might be outstanding at the time). The above covenant requiring the Obligors
to repurchase the Notes will, unless consents are obtained, require the
Obligors to repay all indebtedness then outstanding which by its terms would
prohibit such Note repurchase, either prior to or concurrently with such Note
repurchase.
 
  The Obligors will not be required to make an Offer to Purchase pursuant to
this covenant if a third party makes an Offer to Purchase in compliance with
this covenant and repurchases all Notes validly tendered and not withdrawn
under such Offer to Purchase.
 
COMMISSION REPORTS AND REPORTS TO HOLDERS
 
  At all times from and after the earlier of (i) the date of the commencement
of an Exchange Offer or the effectiveness of the Shelf Registration Statement
(the "Registration") and (ii) the date that is six months after the Closing
Date, in either case, whether or not the Company and the Obligors are then
required to file reports with the Commission, the Company and the Obligors
shall file with the Commission all such reports and other information as they
would be required to file with the Commission by Sections 13(a) or 15(d) under
the Securities Exchange Act of 1934 if they were subject thereto. The Company
and the Obligors shall supply the Trustee and each Holder or shall supply to
the Trustee for forwarding to each such Holder, without cost to such Holder,
copies of such reports and other information. In addition, at all times prior
to the earlier of the date of the Registration and the date that is six months
after the Closing Date, the Company and the Obligors shall, at their cost,
deliver to each Holder of the Notes quarterly and annual reports substantially
equivalent to those which would be required by the Exchange Act. In addition,
at all times prior to the Registration, upon the request of any Holder or any
prospective purchaser of the Notes designated by a Holder, the Company and the
Obligors shall supply to such Holder or such prospective purchaser the
information required under Rule 144A under the Securities Act.
 
EVENTS OF DEFAULT
 
  The following events will be defined as "Events of Default" in the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon
 
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acceleration, redemption or otherwise; (b) default in the payment of interest
on any Note when the same becomes due and payable, and such default continues
for a period of 30 days; (c) default in the performance or breach of the
provisions of the Indenture described under "Consolidation, Merger and Sale of
Assets" or the failure to make or consummate an Offer to Purchase in
accordance with the "Limitation on Asset Sales" or "Repurchase of Notes upon a
Change of Control" covenant; (d) the Company or the Obligors default in the
performance of or breaches any other covenant or agreement of the Company or
the Obligors in the Indenture or under the Notes (other than a default
specified in clause (a), (b) or (c) above) and such default or breach
continues for a period of 30 consecutive days after written notice by the
Trustee or the Holders of 25% or more in aggregate principal amount of the
Notes; (e) there occurs with respect to any issue or issues of Indebtedness of
the Company or any Significant Subsidiary having an outstanding principal
amount of $10 million or more in the aggregate for all such issues of all such
Persons, whether such Indebtedness now exists or shall hereafter be created,
(I) an event of default that has caused the holder thereof to declare such
Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (II) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or
extended within 30 days of such payment default; (f) any final judgment or
order (not covered by insurance) for the payment of money in excess of $10
million in the aggregate for all such final judgments or orders against all
such Persons (treating any deductibles, self-insurance or retention as not so
covered) shall be rendered against the Company or any Significant Subsidiary
and shall not be paid or discharged, and there shall be any period of 30
consecutive days following entry of the final judgment or order that causes
the aggregate amount for all such final judgments or orders outstanding and
not paid or discharged against all such Persons to exceed $10 million during
which a stay of enforcement of such final judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; (g) a court having
jurisdiction in the premises enters a decree or order for (A) relief in
respect of the Company or any Significant Subsidiary in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and,
in each case, such decree or order shall remain unstayed and in effect for a
period of 30 consecutive days; (h) the Company or any Significant Subsidiary
(A) commences a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law, (B) consents to
the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors; or (i) the Guaranty or any Subsidiary
Guarantee ceases to be in full force and effect (except as contemplated by the
terms thereof) or the Company or any Subsidiary Guarantor denies or disaffirms
its obligations under the Indenture, the Guaranty or any Subsidiary Guarantee.
 
  If an Event of Default (other than an Event of Default specified in clause
(g) or (h) above that occurs with respect to the Company or an Obligor) occurs
and is continuing under the Indenture, the Trustee or the Holders of at least
25% in aggregate principal amount of the Notes, then outstanding, by written
notice to the Obligors (and to the Trustee if such notice is given by the
Holders), may, and the Trustee at the request of such Holders shall, declare
the Accreted Value of, premium, if any, and accrued interest on the Notes to
be immediately due and payable. Upon a declaration of acceleration, such
Accreted Value, premium, if any, and accrued interest shall be immediately due
and payable. In the event of a declaration of acceleration because an Event of
Default set forth in clause (e) above has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if
the event of default triggering such Event of Default pursuant to clause (e)
shall be remedied or cured by the Company or the relevant Significant
Subsidiary or waived by the holders of the relevant Indebtedness within 60
days after the declaration of acceleration with respect thereto. If an Event
of Default specified in clause (g) or (h) above occurs with respect to the
Company or an Obligor, the Accreted Value of, premium, if any, and accrued
interest on the Notes then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder. The Holders of at
 
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least a majority in principal amount of the outstanding Notes by written
notice to the Obligors and to the Trustee, may waive all past defaults and
rescind and annul a declaration of acceleration and its consequences if (i)
all existing Events of Default, other than the nonpayment of the Accreted
Value of, premium, if any, and interest on the Notes that have become due
solely by such declaration of acceleration, have been cured or waived and (ii)
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction. For information as to the waiver of defaults, see "--
Modification and Waiver."
 
  The Holders of at least a majority in aggregate principal amount of the
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or the Indenture, that may involve the
Trustee in personal liability, or that the Trustee determines in good faith
may be unduly prejudicial to the rights of Holders of Notes not joining in the
giving of such direction and may take any other action it deems proper that is
not inconsistent with any such direction received from Holders of Notes. A
Holder may not pursue any remedy with respect to the Indenture or the Notes
unless: (i) the Holder gives the Trustee written notice of a continuing Event
of Default; (ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes make a written request to the Trustee to pursue the remedy;
(iii) such Holder or Holders offer the Trustee indemnity satisfactory to the
Trustee against any costs, liability or expense; (iv) the Trustee does not
comply with the request within 60 days after receipt of the request and the
offer of indemnity; and (v) during such 60-day period, the Holders of a
majority in aggregate principal amount of the outstanding Notes do not give
the Trustee a direction that is inconsistent with the request. However, such
limitations do not apply to the right of any Holder of a Note to receive
payment of the Accreted Value of, premium, if any, or interest on, such Note
or to bring suit for the enforcement of any such payment, on or after the due
date expressed in the Notes, which right shall not be impaired or affected
without the consent of the Holder.
 
  The Indenture will require certain officers of the Company and the Obligors
to certify, on or before a date not more than 90 days after the end of each
fiscal year, that a review has been conducted of the activities of the Company
and its Restricted Subsidiaries and the Company's and its Restricted
Subsidiaries' performance under the Indenture and that the Company and the
Obligors have fulfilled all obligations thereunder, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default and the nature and status thereof. The Company and the Obligors will
also be obligated to notify the Trustee of any default or defaults in the
performance of any covenants or agreements under the Indenture.
 
CONSOLIDATION, MERGER AND SALE OF ASSETS
 
  Neither the Company nor any Obligor that constitutes all or substantially
all of the property and assets of the Company will consolidate with, merge
with or into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially
an entirety in one transaction or a series of related transactions) to, any
Person or permit any Person to merge with or into it unless: (i) the Company
or such Obligor shall be the continuing Person, or the Person (if other than
the Company or such Obligor) formed by such consolidation or into which the
Company or such Obligor is merged or that acquired or leased such property and
assets of the Company or such Obligor shall be a corporation organized and
validly existing under the laws of the United States of America or any
jurisdiction thereof and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, all of the obligations of the Company
or the Obligor, as the case may be, on all of the Notes and under the
Indenture; (ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; (iii)
immediately after giving effect to such transaction on a pro forma basis, the
Company or the Obligor or any Person becoming the successor obligor of the
Notes or the Guaranty, as the case may be, shall have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company or the
Obligor immediately prior to such transaction; provided that this clause (iii)
shall only apply to a sale of substantially all, but less than all, of the
assets of the Company or an Obligor; (iv) immediately after giving effect to
such transaction on a pro forma basis the Company or such Obligor, or any
Person becoming the successor obligor on the Guaranty or the Notes,
 
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as the case may be, could Incur at least $1.00 of Indebtedness under the first
paragraph of the "Limitation on Indebtedness" covenant; provided that this
clause (iv) shall not apply to a consolidation, merger or sale of all (but not
less than all) of the assets of the Company or an Obligor if all Liens and
Indebtedness of the Company or any Person becoming the successor obligor on
the Guaranty, as the case may be, and its Restricted Subsidiaries, including
the Obligors or any Person becoming a successor Obligor on the Notes,
outstanding immediately after such transaction would, if Incurred at such
time, have been permitted to be Incurred (and all such Liens and Indebtedness,
other than Liens and Indebtedness of the Company and its Restricted
Subsidiaries outstanding immediately prior to the transaction, shall be deemed
to have been Incurred) for all purposes of the Indenture; and (v) the Company
or such Obligor delivers to the Trustee an Officers' Certificate (attaching
the arithmetic computations to demonstrate compliance with clauses (iii) and
(iv), if either is applicable) and Opinion of Counsel, in each case stating
that such consolidation, merger or transfer and such supplemental indenture
complies with this provision and that all conditions precedent provided for
herein relating to such transaction have been complied with; provided,
however, that clauses (iii) and (iv) above do not apply if, in the good faith
determination of the Board of Directors of the Company, whose determination
shall be evidenced by a Board Resolution, the principal purpose of such
transaction is to change the state of incorporation of the Company and such
transaction shall not have as one of its purposes the evasion of the foregoing
limitations.
 
RELEASE OF OBLIGORS UPON SALE
 
  The Indenture will provide that Renaissance Louisiana and/or Renaissance
Tennessee will be automatically, completely and unconditionally released and
discharged from its obligations in respect of the Notes upon the sale or other
disposition (in compliance with the first sentence of the "Limitation on
Assets Sales" covenant) of all of the Company's and each of its Restricted
Subsidiary's Capital Stock in such Obligor to any Person that is not an
Affiliate of the Company; provided that such sale is not governed by the
provisions of the Indenture described under "Consolidation, Merger and Sale of
Assets" and after any such release and discharge at least one Obligor shall
remain an obligor on the Notes.
 
  For U.S. federal income tax purposes, a Holder will be treated as having
exchanged the Notes for new notes if there is "significant modification" of
the debt instrument within the meaning of the Treasury regulations and in such
case the Holder will be faxed on any gain or loss determined in accordance
with the discussion contained in "--Sale, Exchange or Redemption of the Notes"
above. The deletion of a co-obligor on the Notes will result in a "significant
modification" if, (i) as a result of the deletion, there is a substantial
impairment of the Company's capacity to meet the payment obligations under the
Notes, and (ii) the Company's capacity to meet the payment obligations under
the Notes was adequate prior to the deletion and is primarily speculative
after the deletion. The Company's capacity to meet the payment obligations
under the Notes includes any source for payment, including collateral,
guarantees, or other credit enhancement. There are limitations placed on the
ability of the Company to dispose of the Capital Stock in Renaissance
Louisiana or Renaissance Tennessee (see "Limitation on Assets Sales" covenant
described above). If such a disposition occurs, resulting in the release of
one of the Obligors, the Company does not believe that there will be a
substantial impairment of its capacity to meet the payment obligations under
the Notes or that such capacity will be primarily speculative, and thus such
deletion of an Obligor should not be a "significant modification" of the
Notes.
 
DEFEASANCE
 
  Defeasance and Discharge. The Indenture will provide that the Obligors will
be deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the deposit referred to below, and
the provisions of the Indenture will no longer be in effect with respect to
the Notes (except for, among other matters, certain obligations to register
the transfer or exchange of the Notes, to replace stolen, lost or mutilated
Notes, to maintain paying agencies and to hold monies for payment in trust)
if, among other things, (A) the Obligors have deposited with the Trustee, in
trust, money and/or U.S. Government Obligations that through the payment of
interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of, premium, if
any, and accrued interest on the Notes on the
 
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Stated Maturity of such payments in accordance with the terms of the Indenture
and the Notes, (B) the Obligors have delivered to the Trustee (i) either (x)
an Opinion of Counsel to the effect that Holders will not recognize income,
gain or loss for federal income tax purposes as a result of the Obligors'
exercise of their option under this "Defeasance" provision and will be subject
to federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit, defeasance and
discharge had not occurred, which Opinion of Counsel must be based upon (and
accompanied by a copy of) a ruling of the Internal Revenue Service to the same
effect unless there has been a change in applicable federal income tax law
after the Closing Date such that a ruling is no longer required or (y) a
ruling directed to the Trustee received from the Internal Revenue Service to
the same effect as the aforementioned Opinion of Counsel and (ii) an Opinion
of Counsel to the effect that the creation of the defeasance trust does not
violate the Investment Company Act of 1940 and after the passage of 123 days
following the deposit, the trust fund will not be subject to the effect of
Section 547 of the United States Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law, (C) immediately after giving effect to such deposit
on a pro forma basis, no Event of Default, or event that after the giving of
notice or lapse of time or both would become an Event of Default, shall have
occurred and be continuing on the date of such deposit or during the period
ending on the 123rd day after the date of such deposit, and such deposit shall
not result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company, the Obligors or any of
their Subsidiaries is a party or by which the Company, the Obligors or any of
their Subsidiaries is bound and (D) if at such time the Notes are listed on a
national securities exchange, the Obligors have delivered to the Trustee an
Opinion of Counsel to the effect that the Notes will not be delisted as a
result of such deposit, defeasance and discharge.
 
  Defeasance of Certain Covenants and Certain Events of Default. The Indenture
further will provide that the provisions of the Indenture will no longer be in
effect with respect to clauses (iii) and (iv) under "Consolidation, Merger and
Sale of Assets" and all the covenants described herein under "Covenants,"
clause (c) under "Events of Default" with respect to such clauses (iii) and
(iv) under "Consolidation, Merger and Sale of Assets," clause (d) under
"Events of Default" with respect to such other covenants and clauses (e) and
(f) under "Events of Default" shall be deemed not to be Events of Default
upon, among other things, the deposit with the Trustee, in trust, of money
and/or U.S. Government Obligations that through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient to pay the principal of, premium, if any, and accrued
interest on the Notes on the Stated Maturity of such payments in accordance
with the terms of the Indenture and the Notes, the satisfaction of the
provisions described in clauses (B)(ii), (C) and (D) of the preceding
paragraph and the delivery by the Obligors to the Trustee of an Opinion of
Counsel to the effect that, among other things, the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit and defeasance of certain covenants and Events of Default and will be
subject to federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit and defeasance had
not occurred.
 
  Defeasance and Certain Other Events of Default. In the event the Obligors
exercise their option to omit compliance with certain covenants and provisions
of the Indenture with respect to the Notes as described in the immediately
preceding paragraph and the Notes are declared due and payable because of the
occurrence of an Event of Default that remains applicable, the amount of money
and/or U.S. Government Obligations on deposit with the Trustee will be
sufficient to pay amounts due on the Notes at the time of their Stated
Maturity but may not be sufficient to pay amounts due on the Notes at the time
of the acceleration resulting from such Event of Default. However, the
Obligors will remain liable for such payments and the Guaranty with respect to
such payments will remain in effect.
 
MODIFICATION AND WAIVER
 
  From time to time, the Company, the Obligors and the Trustee, together,
without the consent of the Holders, may amend or supplement the Indenture or
the Notes to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated notes, to
provide for the assumption of the Company's or an Obligor's obligations to
Holders of Notes in the case of a merger or consolidation, to make
 
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any change that would provide any additional rights or benefits to the Holders
of Notes or that does not, in the good faith determination of the Board of
Directors, adversely affect the legal rights under the Indenture of any such
Holder in any material respect, or to comply with requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act. Other modifications and amendments of the
Indenture may be made by the Company, the Obligors and the Trustee with the
consent of the Holders of not less than a majority in aggregate principal
amount of the outstanding Notes; provided, however, that no such modification
or amendment may, without the consent of each Holder affected thereby, (i)
change the Stated Maturity of the principal of, or any installment of interest
on, any Note, (ii) reduce the Accreted Value or principal of, or premium, if
any, or interest on, any Note, (iii) change the place or currency of payment
of principal of, or premium, if any, or interest on, any Note, (iv) impair the
right to institute suit for the enforcement of any payment on or after the
Stated Maturity (or, in the case of a redemption, on or after the Redemption
Date) of any Note, (v) reduce the above-stated percentage of outstanding Notes
the consent of whose Holders is necessary to modify or amend the Indenture,
(vi) waive a default in the payment of principal of, premium, if any, or
interest on the Notes (except a rescission of acceleration of the Notes by the
Holders as provided in the Indenture and a waiver of the payment default that
resulted from such acceleration), (vii) modify the Guaranty in a manner
adverse to the Holders or (viii) reduce the percentage of aggregate principal
amount of outstanding Notes the consent of whose Holders is necessary for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults.
 
NO PERSONAL LIABILITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS, OR
EMPLOYEES
 
  The Indenture provides that no recourse for the payment of the principal of,
premium, if any, or interest on any of the Notes or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company or the Obligors in the
Indenture, or in any of the Notes or the Guaranty or because of the creation
of any Indebtedness represented thereby, shall be had against any
incorporator, stockholder, member, officer, director, member of the board of
representatives, employee or controlling person of the Company or any Obligor
or of any successor Person thereof. Each Holder, by accepting the Notes,
waives and releases all such liability.
 
CONCERNING THE TRUSTEE
 
  The Indenture provides that, except during the continuance of a Default, the
Trustee will not be liable, except for the performance of such duties as are
specifically set forth in such Indenture. If an Event of Default has occurred
and is continuing, the Trustee will use the same degree of care and skill in
its exercise of the rights and powers vested in it under the Indenture as a
prudent person would exercise under the circumstances in the conduct of such
person's own affairs.
 
  The Indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the Trustee, should it
become a creditor of the Company or any Obligor, to obtain payment of claims
in certain cases or to realize on certain property received by it in respect
of any such claims, as security or otherwise. The Trustee is permitted to
engage in other transactions; provided, however, that if it acquires any
conflicting interest (as defined in the Indenture or the Trust Indenture Act),
it must eliminate such conflict or resign.
 
BOOK-ENTRY; DELIVERY AND FORM
 
  Old Notes sold in reliance on Rule 144A and Old Notes sold pursuant to
Regulation S will be exchanged for one or more permanent global New Notes in
definitive, fully registered form without interest coupons (each a "Global
Note"; and collectively, the "Global Notes") and will be deposited with the
Trustee as custodian for, and registered in the name of a nominee of, DTC.
 
  Old Notes originally purchased by or transferred to Institutional Accredited
Investors who are not Qualified Institutional Buyers ("Non-Global Purchasers")
will be exchanged for New Notes in fully registered form without interest
coupons ("Certificated Notes"). Upon the transfer of Certificated Notes by a
Non-Global
 
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<PAGE>
 
Purchaser to a Qualified Institutional Buyer or in accordance with Regulation
S, such Certificated Notes will, unless the relevant Global Note has
previously been exchanged in whole for Certificated Notes, be exchanged for an
interest in such Global Note.
 
  Ownership of beneficial interests in a Global Note will be limited to
persons who have accounts with DTC ("participants") or persons who hold
interests through participants. Ownership of beneficial interests in a Global
Note will be shown on, and the transfer of that ownership will be effected
only through, records maintained by DTC or its nominee (with respect to
interests of participants) and the records of participants (with respect to
interests of persons other than participants). Qualified Institutional Buyers
may hold their interests in a Global Note directly through DTC if they are
participants in such system, or indirectly through organizations which are
participants in such system.
 
  Investors outside the United States may hold their interests in a Global
Note directly through Cedel Bank or Euroclear, if they are participants in
such systems, or indirectly through organizations that are participants in
such system. Cedel Bank and Euroclear will hold interests in the Global Notes
on behalf of their participants through DTC.
 
  So long as DTC, or its nominee, is the registered owner or holder of a
Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the Notes represented by such Global Note for all
purposes under the Indenture and the Notes. No beneficial owner of an interest
in a Global Note will be able to transfer that interest except in accordance
with DTC's applicable procedures, in addition to those provided for under the
Indenture and, if applicable, those of Euroclear and Cedel Bank.
 
  Payments of the principal of, and interest on, a Global Note will be made to
DTC or its nominee, as the case may be, as the registered owner thereof.
Neither the Company, the Obligors, the Trustee nor any Paying Agent will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
 
  The Company expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of a Global Note, will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Note as shown on the records
of DTC or its nominee. The Company also expects that payments by participants
to owners of beneficial interests in such Global Note held through such
participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers registered in the names of nominees for such customers. Such
payments will be the responsibility of such participants.
 
  Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds. Transfers
between participants in Euroclear and Cedel Bank will be effected in the
ordinary way in accordance with their respective rules and operating
procedures.
 
  The Company expects that DTC will take any action permitted to be taken by a
holder of Notes (including the presentation of Notes for exchange as described
below) only at the direction of one or more participants to whose account the
DTC interests in a Global Note are credited and only in respect of such
portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction. However, if
there is an Event of Default under the Notes, DTC will exchange the applicable
Global Note for Certificated Notes, which it will distribute to its
participants.
 
  The Company understands that: DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "Clearing Agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC was created
 
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<PAGE>
 
to hold securities for its participants and facilitate the clearance and
settlement of securities transactions between participants through electronic
book-entry changes in accounts of its participants, thereby eliminating the
need for physical movement of certificates and certain other organizations.
Indirect access to the DTC system is available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly
("indirect participants").
 
  Although DTC, Euroclear and Cedel Bank are expected to follow the foregoing
procedures in order to facilitate transfers of interests in a Global Note
among participants of DTC, Euroclear and Cedel Bank, they are under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Company, the Obligors
nor the Trustee will have any responsibility for the performance by DTC,
Euroclear or Cedel Bank or their respective participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
 
  If DTC is at any time unwilling or unable to continue as a depositary for
the Global Notes and a successor depositary is not appointed by the Company
within 90 days, the Company will issue Certificated Notes in exchange for the
Global Notes. Holders of an interest in a Global Note may receive Certificated
Notes in accordance with the DTC's rules and procedures in addition to those
provided for under the Indenture.
 
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             CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
 
GENERAL
 
  The following is a summary of the material United States federal income,
estate and gift tax consequences of the purchase, ownership and disposition of
the Notes, but is not purported to be a complete analysis of all potential tax
effects. This summary is based upon the Internal Revenue Code of 1986, as
amended (the "Code"), existing and proposed regulations promulgated
thereunder, published rulings and court decisions, all as in effect and
existing on the date hereof and all of which are subject to change at any
time, which change may be retroactive or prospective. Unless otherwise
specifically noted, this summary applies only to those persons that hold the
Notes as capital assets within the meaning of Section 1221 of the Code. This
discussion assumes that the Notes will be treated as indebtedness for United
States federal income tax purposes.
 
  THIS SUMMARY IS FOR GENERAL INFORMATION ONLY AND DOES NOT ADDRESS THE TAX
CONSEQUENCES TO TAXPAYERS WHO ARE SUBJECT TO SPECIAL RULES (SUCH AS FINANCIAL
INSTITUTIONS, TAX-EXEMPT ORGANIZATIONS, INSURANCE COMPANIES, S CORPORATIONS,
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, BROKER-DEALERS,
TAXPAYERS SUBJECT TO THE ALTERNATIVE MINIMUM TAX AND PERSONS THAT WILL HOLD
THE NOTES AS PART OF A POSITION IN A "STRADDLE" OR AS PART OF A "CONSTRUCTIVE
SALE." A "HEDGING" OR "CONVERSION" TRANSACTION) OR ADDRESS ASPECTS OF FEDERAL
TAXATION THAT MIGHT BE RELEVANT TO A PROSPECTIVE INVESTOR BASED UPON SUCH
INVESTOR'S PARTICULAR TAX SITUATION. THIS SUMMARY DOES NOT ADDRESS ANY TAX
CONSEQUENCES ARISING UNDER ANY STATE, MUNICIPALITY, FOREIGN COUNTRY OR OTHER
TAXING JURISDICTION. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX
ADVISORS REGARDING THE UNITED STATES FEDERAL TAX CONSEQUENCES OF OWNING AND
DISPOSING OF THE NOTES (INCLUDING THE INVESTOR'S STATUS AS A UNITED STATES
HOLDER OR A NON-UNITED STATES HOLDER), AS WELL AS ANY TAX CONSEQUENCES THAT
MAY ARISE UNDER THE LAWS OF ANY STATE, MUNICIPALITY, FOREIGN COUNTRY OR OTHER
TAXING JURISDICTION.
 
EFFECT OF EXCHANGE OF OLD NOTES FOR NEW NOTES
 
  The Obligors believe that the exchange of Old Notes for New Notes pursuant
to the Exchange Offer will not be treated as an "exchange" for federal income
tax purposes because the New Notes will not be considered to differ materially
in kind or extent from the Old Notes. Rather, the New Notes received by a
holder will be treated as a continuation of the Old Notes in the hands of such
holder. As a result, holders will not recognize any taxable gain or loss or
any interest income as a result of exchanging Old Notes for New Notes pursuant
to the Exchange Offer, the holding period of the New Notes will include the
holding period of the Old Notes, and the basis of the New Notes will equal the
basis of the Old Notes immediately before the exchange.
 
UNITED STATES HOLDERS
 
  General. The following is a general discussion of certain United States
federal income tax consequences of the ownership and sale or other disposition
of the Notes by a beneficial owner that, for United States federal income tax
purposes, is a "United States person" (a "United States Holder"). For purposes
of this discussion, a "United States person" means a citizen or individual
resident (as defined in Section 7701(b) of the Code) of the United States; a
corporation or partnership (including any entity treated as a corporation or
partnership for United States federal income tax purposes) created or
organized under the laws of the United States, any state thereof or the
District of Columbia unless, in the case of a partnership, otherwise provided
by regulation; an estate the income of which is subject to United States
federal income tax without regard to its source; or a trust if a court within
the Untied States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. Notwithstanding
 
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<PAGE>
 
the preceding sentence, certain trusts in existence on August 20, 1996, and
treated as United States persons prior to such date that elect to continue to
be so treated shall also be considered to be United States persons.
 
  Original Issue Discount. Because the Notes are being issued at a discount
from their "stated redemption price at maturity," the Notes will have original
issue discount ("OID") for federal income tax purposes. For federal income tax
purposes, the amount of OID on a Note generally will equal the excess of the
"stated redemption price at maturity" of the Note over its "issue price." The
issue price of the Notes will be the first price to the public (excluding bond
houses, brokers, or similar persons or organizations acting in the capacity of
underwriters or wholesalers) at which a substantial amount of the Notes is
sold. For purposes of this discussion, it is assumed that all initial Holders
will purchase their Notes at the issue price. The stated redemption price at
maturity of a Note will be the sum of all cash payments to be made on such
Note (whether denominated as principal or interest) other than payments of
"qualified stated interest." Qualified stated interest is stated interest that
is unconditionally payable at least annually at a single fixed rate that
appropriately takes into account the length of the interval between payments.
Because there will be no required payment of interest on the Notes prior to
October 15, 2003, none of the interest payments on the Notes will constitute
qualified stated interest; accordingly, each Note will bear OID in an amount
equal to the excess of (i) the sum of its principal amount and all stated
interest payments, over (ii) its issue price.
 
  A United States Holder will be required to include OID in income
periodically over the term of a Note before receipt of the cash or other
payment attributable to such income, regardless of such Holder's method of tax
accounting. The amount of OID required to be included in a United States
Holder's gross income for any taxable year is the sum of the "daily portions"
of OID with respect to the Note for each day during the taxable year or
portion of a taxable year during which such Holder holds the Note. The daily
portion is determined by allocating to each day of any "accrual period" within
a taxable year a pro rata portion of an amount equal to the "adjusted issue
price" of the Note at the beginning of the accrual period multiplied by the
"yield to maturity" of the Note. For purposes of computing OID, the Obligors
will use six-month accrual periods that end on the days in the calendar year
corresponding to the maturity date of the Notes and the date six months prior
to such maturity date, with the exception of an initial short accrual period.
A United States Holder is permitted to use different accrual periods; provided
that each accrual period is no longer than one year, and each scheduled
payment of interest or principal occurs on either the first or last day of an
accrual period. The adjusted issue price of a Note at the beginning of any
accrual period is the issue price of the Note increased by the amount of OID
previously includible in the gross income of the Holder and decreased by any
payments previously made on the Note. The yield to maturity is the discount
rate that, when used in computing the present value of all payments of
principal and interest to be made on a Note, produces an amount equal to the
issue price of the Note. Under these rules, United States Holders of Notes
will be required to include in gross income increasingly greater amounts of
OID in each successive accrual period. Payments of stated interest on a Note
will not be separately included in income, but rather will be treated first as
payments of previously accrued OID and then as payments of principal and
consequently will reduce the United States Holder's basis in a Note, as
described below under "Certain United States Federal Income Tax Consequences--
United States Holders--Sale, Exchange or Redemption of the Notes."
 
  The Obligors intend to treat the possibility of (i) an optional redemption,
as described under "Description of the Notes--Optional Redemption," and (ii) a
repurchase pursuant to a Change in Control, as described under "Description of
the Notes--Repurchase of Notes upon a Change of Control" as remote under
applicable Treasury regulations. The Company does not intend to treat the
possibilities described in (i) or (ii) above as (x) affecting the
determination of the yield to maturity of the Notes or (y) giving rise to any
additional accrual of OID or recognition of ordinary income upon the
redemption, sale or exchange of a Note. In the unlikely event that the
interest rate on the Notes is increased, then such increased interest may be
treated as increasing the amount of OID on the Notes includable by a United
States Holder in income as such OID accrues, in advance of the receipt of any
cash payment therefor.
 
  Acquisition Premium. A United States Holder that purchases a Note for an
amount that is greater than its adjusted issue price as of the purchase date
will be considered to have purchased such Note at an "acquisition
 
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<PAGE>
 
premium." The amount of OID that such Holder must include in its gross income
with respect to such Note for any taxable year is generally reduced by the
portion of such acquisition premium properly allocable to such year. The
information reported by the Obligors to the record Holders of the Notes on an
annual basis will not account for an offset against OID for any portion of the
acquisition premium. Accordingly, each United States Holder should consult its
own tax advisor as to the determination of the acquisition premium amount and
the resulting adjustments to the amount of reportable OID.
 
  Amortizable Bond Premium. A United States Holder that purchases a Note for
an amount in excess of its principal amount will be considered to have
purchased the Note at a premium and may elect to amortize such premium, using
a constant yield method, over the remaining term of the Note (or, if a smaller
amortization allowance would result, by computing such allowance with
reference to the amount payable on an earlier call date and amortizing such
allowance over the shorter period to such call date). The amount amortized in
any year will be treated as a reduction of the United States Holder's interest
income from the Note. Bond premium on a Note held by a United States Holder
that does not make such an election will decrease the gain or increase the
loss otherwise recognized on disposition of the Note. The election to amortize
bond premium on a constant yield method, once made, applies to all debt
obligations held or subsequently acquired by the electing United States Holder
on or after the first day of the first taxable year to which the election
applies and may not be revoked without the consent of the Internal Revenue
Service (the "Service").
 
  Market Discount. If a United States Holder purchases, subsequent to its
original issuance, a Note for an amount that is less than its "revised issue
price" as of the purchase date, the amount of the difference generally will be
treated as "market discount," unless such difference is less than a specified
de minimis amount. The Code provides that the revised issue price of a Note
equals its issue price plus the amount of OID includable in the income of all
holders for periods prior to the purchase date (disregarding any deduction for
acquisition premium) reduced by the amount of all prior cash payments on the
Note. Subject to a de minimis exception, a United States Holder will be
required to treat any gain recognized on the sale, exchange, redemption,
retirement or other disposition of the Note as ordinary income to the extent
of the accrued market discount that has not previously been included in
income. In addition, the United States Holder may be required to defer, until
the maturity date of the Note or its earlier disposition in a taxable
transaction, the deduction of all or a portion of the interest expense on any
indebtedness incurred or continued to purchase or carry such Note.
 
  Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Note, unless the
United States Holder elects to accrue market discount on a constant interest
method. A United States Holder of a Note may elect to include market discount
in income currently as it accrues (under either the ratable or constant
interest method). This election to include currently, once made, applies to
all market discount obligations acquired in or after the first taxable year to
which the election applies and may not be revoked without the consent of the
Service. If the United States Holder of a Note makes such an election, the
foregoing rules with respect to the recognition of ordinary income on sales
and other dispositions of such instruments, and with respect to the deferral
of interest deductions on debt incurred or maintained to purchase or carry
such debt instruments, would not apply.
 
  Election to Treat All Interest as OID. A United States Holder of a Note may
elect, subject to certain limitations, to include all interest that accrues on
a Note in gross income on a constant yield basis. For purposes of this
election, interest includes stated interest, OID, market discount, de minimus
OID, de minimis market discount and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium. Special rules and limitations
apply to taxpayers, who make this election; therefore, United States Holders
should consult their tax advisors as to whether they should make this
election.
 
  Sale, Exchange or Redemption of the Notes. Generally, a sale, exchange or
redemption of the Notes will result in taxable gain or loss equal to the
difference between the amount of cash or other property received and the
United States Holder's adjusted tax basis in the Note. A United States
Holder's adjusted tax basis for determining gain or loss on the sale or other
disposition of a Note will initially equal the cost of the Note to such
 
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Holder and will be increased by (i) any amounts included in income as OID, and
(ii) any market discount previously included in income by such Holder, and
decreased by (a) any principal and stated interest payments received by such
Holder, and (b) any amortized premium previously deducted from income by such
Holder. Except as described above with respect to market discount, such gain
or loss will be capital gain or loss. Capital gain or loss will be long-term
gain or loss if the Note is held by the United States Holder for more than one
year, otherwise such gain or loss will be short-term.
 
  United States Holders that are corporations will generally be taxed on net
capital gains at a maximum rate of 35%. In contrast, United States Holders
that are individuals will generally be taxed on net capital gains at a maximum
rate of (i) 28% for property held for 18 months or less but more than one
year, and (ii) 20% for property held more than 18 months. Special rules (and
generally lower maximum rates) apply for individuals in lower tax brackets.
Any capital losses realized by a United States Holder that is a corporation
generally may be used only to offset capital gains. Any capital losses
realized by a United States Holder that is an individual generally may be used
only to offset capital gains plus $3,000 of other income per year.
 
  Release of Obligors Upon Sale. Under certain circumstances, Renaissance
Louisiana or Renaissance Tennessee will be released and discharged from its
obligations in respect of the Notes upon the sale or other disposition of
Capital Stock in such Obligor to any Person that is not an Affiliate of the
Company. See "Description of the Notes--Release of Obligors Upon Sale." For
United States federal income tax purposes, a United States Holder will be
treated as having exchanged the Notes for new Notes if there is "significant
modification" of the debt instrument within the meaning of the Treasury
regulations, and in such case the Holder will be taxed on any gain or loss
determined in accordance with the discussion contained in "United States
Holders--Sale, Exchange or Redemption of the Notes" above. The deletion of a
co-obligor on the Notes will result in a "significant modification" if (i) as
a result of the deletion, there is a substantial impairment of the Company's
capacity to meet the payment obligations under the Notes, and (ii) the
Company's capacity to meet the payment obligations under the Notes was
adequate prior to the deletion and is primarily speculative after the
deletion. The Company's capacity to meet the payment obligations under the
Notes includes any source for payment, including collateral, guarantees, or
other credit enhancement. There are substantial limitations placed on the
ability of the Company to dispose of the Capital Stock in Renaissance
Louisiana or Renaissance Tennessee (see "Description of the Notes--Limitation
on Assets Sales"). If such disposition occurs, resulting in the release of one
of the Obligors, the Company does not believe that there will be a substantial
impairment of its capacity to meet the payment obligations under the Notes or
that such capacity will be primarily speculative, and thus that there will not
be a "significant modification" of the Notes.
 
FOREIGN HOLDERS
 
  The following is a general discussion of certain United States federal
income, estate and gift tax consequences of the ownership and sale or other
disposition of the Notes by any beneficial owner of a Note that is not a
United States Holder (a "Non-United States Holder"). Resident alien
individuals will be subject to United States federal income tax with respect
to the Notes as if they were United States Holders.
 
  Interest. Under current United States federal income tax law, and subject to
the discussion of backup withholding below, interest (including OID) paid on
the Notes to a Non-United States Holder will not be subject to the normal 30%
United States federal withholding tax; provided that (i) the interest is
"effectively connected with the conduct of a trade or business in the United
States" by the Non-United States Holder and the Non-United States Holder
timely furnishes the Obligors with two duly executed copies of Internal
Revenue Service Form 4224 (or any successor form), or (ii) all of the
following conditions of the "portfolio interest" exception (the "Portfolio
Interest Exception") are met: (A) the Non-United States Holder does not,
actually or constructively, own 10% or more of the total combined voting power
of all classes of stock of a corporate issuer entitled to vote and does not,
actually or constructively, own 10% or more of the capital or profits interest
in a partnership issuer, (B) the Non-United States Holder is not a controlled
foreign corporation that is related, directly or indirectly, to the Obligors
through stock ownership, (C) the Non-United States Holder is not a bank
 
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receiving interest (including OID) pursuant to a loan agreement entered into
in the ordinary course of its trade or business, and (D) either (1) the Non-
United States Holder certifies to the Obligors or their agent, under penalties
of perjury, that it is a Non-United States Holder and provides its name and
address, or (2) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business (a "Financial Institution"), and holds the Notes in such
capacity, certifies to the Obligors or their agent, under penalties of
perjury, that such statement has been received from the beneficial owner of
the Notes by it or by a Financial Institution between it and the beneficial
owner and furnishes the Obligors or their agent with a copy thereof. The
foregoing certification may be provided by the Non-United States Holder on
Internal Revenue Service Form W-8 (or any successor form). Such certificate is
effective with respect to payments of interest (including OID) made after the
issuance of the certificate in the calendar year of its issuance and the two
immediately succeeding calendar years.
 
  On October 14, 1997, final regulations were published in the Federal
Register (the "1997 Final Regulations") that affect the United States federal
income taxation of Non-United States Holders. The 1997 Final Regulations are
effective for payments after December 31, 1999, regardless of the issue date
of the instrument with respect to which such payments are made, subject to
certain transition rules discussed below. The discussion under this heading
and under "Backup Withholding Tax and Information Reporting," below, is not
intended to be a complete discussion of the provisions of the 1997 Final
Regulations. Prospective Holders of the Notes are urged to consult their tax
advisors concerning the tax consequences of their investment in light of the
1997 Final Regulations.
 
  The 1997 Final Regulations provide documentation procedures designed to
simplify compliance by withholding agents. The 1997 Final Regulations
generally do not affect the documentation rules described above, but add other
certification options. Under one such option, a withholding agent will be
allowed to rely on an intermediary withholding certificate furnished by a
"qualified intermediary" (as defined below) on behalf of one or more
beneficial owners (or other intermediaries) without having to obtain the
beneficial owner certificate described above. Qualified intermediaries
include: (i) foreign financial institutions or foreign clearing organizations
(other than a United States branch or United States office of such institution
or organization), or (ii) foreign branches or offices of United States
financial institutions or foreign branches or offices of United States
clearing organizations, which, as to both (i) and (ii), have entered into
withholding agreements with the Service. In addition to certain other
requirements, qualified intermediaries must obtain withholding certificates,
such as revised Internal Revenue Service Form W-8 (discussed below), from each
beneficial owner. Under another option, an authorized foreign agent of a
United States withholding agent will be permitted to act on behalf of the
United States withholding agent (including the receipt of withholding
certificates, the payment of amounts of income subject to withholding and the
deposit of tax withheld); provided that certain conditions are met.
 
  For purposes of the certification requirements, the 1997 Final Regulations
generally treat as the beneficial owners of payments on a Note those persons
that, under United States federal income tax principles, are the taxpayers
with respect to such payments, rather than persons such as nominees or agents
legally entitled to such payments. In the case of payments to an entity
classified as a foreign partnership under United States tax principles, the
partners, rather than the partnership, generally must provide the required
certifications to qualify for the withholding tax exemption described above
(unless the partnership has entered into a special agreement with the
Service). A payment to a United States partnership, however, is treated for
these purposes as payment to a United States payee, even if the partnership
has one or more foreign partners. The 1997 Final Regulations provide certain
presumptions with respect to withholding for Holders not furnishing the
required certifications to qualify for the withholding tax exemption described
above. In addition, the 1997 Final Regulations will replace a number of
current tax certification forms (including Internal Revenue Service Form W-8)
with a single, revised Internal Revenue Service Form W-8 (which, in certain
circumstances, requires information in addition to that previously required).
Under the 1997 Final Regulations, this revised Form W-8 will remain valid
until the last day of the third calendar year following the year in which the
certificate is signed.
 
  The 1997 Final Regulations provide transition rules concerning existing
certificates, such as Internal Revenue Service Form W-8. Valid withholding
certificates that are held on December 31, 1999 will generally
 
                                      120

<PAGE>
 
remain valid until the earlier of December 31, 2000 or the date of their
expiration. Existing certificates that expire in 1999 will not be effective
after their expiration. Certificates dated prior to January 1, 1998 will
generally remain valid until the end of 1998, irrespective of the fact that
their validity expires during 1998.
 
  In the event that the interest (including OID) paid on the Notes is
effectively connected with the conduct of a trade or business within the
United States of the Non-United States Holder, the Non-United States Holder
will generally be taxed on a net income basis (that is, after allowance for
applicable deductions) at the graduated rates that are applicable to United
States Holders in essentially the same manner as if the Notes were held by a
United States Holder, as discussed above. In the case of a Non-United States
Holder that is a corporation, such income may also be subject to the United
States federal branch profits tax (which is generally imposed on a foreign
corporation upon the deemed repatriation from the United States of effectively
connected earnings and profits) at a 30% rate, unless the rate is reduced or
eliminated by an applicable income tax treaty and the Non-United States Holder
is a qualified resident of the treaty country.
 
  If the interest on the Notes is not "effectively connected" and does not
qualify for the Portfolio Interest Exception, then the interest will be
subject to United States federal withholding tax at a flat rate of 30% (or a
lower applicable income tax treaty rate upon delivery of the appropriate
certification of eligibility for treaty benefits).
 
  Gain on Sale or Other Disposition. Subject to special rules applicable to
individuals as described below, a Non-United States Holder will generally not
be subject to regular United States federal income or withholding tax on gain
recognized on a sale or other disposition of the Notes (including a deemed
exchange upon a release of Obligors, as discussed above in "Certain United
States Federal Income Tax Consequences--United States Holders--Release of
Obligors Upon Sale"), unless the gain is effectively connected with the
conduct of a trade or business within the United States of the Non-United
States Holder or of a partnership, trust or estate in which such Non-United
States Holder is a partner or beneficiary.
 
  Gains realized by a Non-United States Holder that are effectively connected
with the conduct of a trade or business within the United States of the Non-
United States Holder will generally be taxed on a net income basis (that is,
after allowance for applicable deductions) at the graduated rates that are
applicable to United States Holders, as discussed above, unless exempt by an
applicable income tax treaty. In the case of a Non-United States Holder that
is a corporation, such income may also be subject to the United States federal
branch profits tax (which is generally imposed on a foreign corporation upon
the deemed repatriation from the United States of effectively connected
earnings and profits) at a 30% rate, unless the rate is reduced or eliminated
by an applicable income tax treaty and the Non-United States Holder is a
qualified resident of the treaty country.
 
  In addition to being subject to the rules described above, an individual
Non-United States Holder who holds the Notes as a capital asset will generally
be subject to tax at a 30% rate on any gain recognized on the sale or other
disposition of such Notes if (i) such gain is not effectively connected with
the conduct of a trade or business within the United States of the Non-United
States Holder, and (ii) such individual is present in the United States for
183 days or more in the taxable year of the sale or other disposition and
either (A) has a "tax home" in the United States (as specially defined for
purposes of the United States federal income tax), or (B) maintains an office
or other fixed place of business in the United States and the gain from the
sale or other disposition of the Notes is attributable to such office or other
fixed place of business. Individual Non-United States Holders may also be
subject to tax pursuant to provisions of United States federal income tax law
applicable to certain United States expatriates (including certain former
long-term residents of the United States).
 
  Under the 1997 Final Regulations, withholding of United States federal
income tax may apply to payments on a taxable sale or other disposition of the
Notes by a Non-United States Holder who does not provide appropriate
certification to the withholding agent with respect to such transaction.
 
  Federal Estate Taxes. A Note beneficially owned by an individual who is
neither a United States citizen nor a domiciliary of the United States at the
time of death will not be subject to United States federal estate tax
 
                                      121

<PAGE>
 
as a result of such individual's death; provided that any interest thereon
would have been eligible for the Portfolio Interest Exception described above
in "Certain United States Federal Income Tax Consequences--Foreign Holders--
Interest," if such interest had been received by the individual at the time of
death.
 
  Federal Gift Taxes. An individual who is not a United States citizen will
not be subject to United States federal gift tax on a transfer of Notes,
unless such person is a domiciliary of the United States or such person is
subject to provisions of United States federal gift tax law applicable to
certain United States expatriates (including certain former long-term
residents of the United States).
 
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
 
  Under current United States federal income tax law, information reporting
requirements apply to interest (including OID) paid to, and to the proceeds of
sales or other dispositions before maturity by, certain non-corporate persons.
In addition, a 31% backup withholding tax applies if a non-corporate person
(i) fails to furnish such person's Taxpayer Identification Number ("TIN")
(which, for an individual, is his or her Social Security Number) to the payor
in the manner required, (ii) furnishes an incorrect TIN and the payor is so
notified by the Service, (iii) is notified by the Service that such person has
failed properly to report payments of interest and dividends, or (iv) in
certain circumstances, fails to certify, under penalties of perjury, that such
person has not been notified by the Service that such person is subject to
backup withholding for failure properly to report interest and dividend
payments. Backup withholding does not apply to payments made to certain exempt
recipients, such as corporations and tax-exempt organizations.
 
  In the case of a Non-United States Holder, under current United States
federal income tax law, backup withholding and information reporting do not
apply to payments of interest (including OID) with respect to the Note, or to
payments on the sale or other disposition of a Note, if such Holder has
provided to the Obligors or their paying agent the certification described in
clause (ii)(D) of "Certain United States Federal Income Tax Consequences--
Foreign Holders--Interest" or has otherwise established an exemption.
 
  Under current United States federal income tax law, (i) interest payments
(including OID) with respect to a Note collected outside the United States by
a foreign office of a custodian, nominee or broker acting on behalf of a
beneficial owner of a Note, and (ii) payments on the sale or other disposition
of a Note to or through a foreign office of a broker are not generally subject
to backup withholding or information reporting. However, if such custodian,
nominee or broker is a "United States person" (as defined in Section
7701(a)(30) of the Code), a controlled foreign corporation for United States
tax purposes or a foreign person 50% of more of whose gross income is
effectively connected with the conduct of a United States trade or business
for a specified three-year period (a "U.S. Related Person"), such custodian,
nominee or broker may be subject to certain information reporting (but not
backup withholding) requirements with respect to such payments, unless such
custodian, nominee or broker has in its records documentary evidence that the
beneficial owner is not a United States Holder and certain conditions are met
or the beneficial owner otherwise establishes an exemption. Backup withholding
may apply to any payment that such custodian, nominee or broker is required to
report if such person has actual knowledge that the payee is a United States
Holder. Payments to or through the United States office of a broker will be
subject to backup withholding and information reporting unless the Holder
certifies, under penalties of perjury, that it is not a United States Holder
or otherwise establishes an exemption.
 
  The 1997 Final Regulations modify certain of the certification requirements
for backup withholding and expand the group of U.S. Related Persons. It is
possible that the Obligors or their paying agent may request new withholding
exemption forms from Holders in order to qualify for continued exemption from
backup withholding when the 1997 Final Regulations become effective.
 
  Backup withholding tax is not an additional tax. Rather, any amounts
withheld from a payment to a Holder under the backup withholding rules are
allowed as a refund or a credit against such Holder's United States federal
income tax; provided that the required information is furnished to the
Service.
 
                                      122

<PAGE>
 
                             PLAN OF DISTRIBUTION
 
  Each Participating Broker-Dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with resales of New Notes received
in exchange for Old Notes where such Old Notes were acquired as a result of
market-making activities or other trading activities. The Obligors have agreed
that for a period of 180 days after the Expiration Date, they will make this
Prospectus, as amended or supplemented, available to any Participating Broker-
Dealer for use in connection with any such resale (provided that the Obligors
receive notice from any Participating Broker-Dealer of its status as a
Participating Broker-Dealer within 30 days after the consummation of the
Exchange Offer). In addition, until      , 1998 (90 days after the
commencement of the Exchange Offer), all dealers effecting transactions in the
New Notes may be required to deliver a prospectus.
 
  The Obligors will not receive any proceeds from any sales of the New Notes
by Participating Broker-Dealers. New Notes received by Participating Broker-
Dealers for their own account pursuant to the Exchange Offer may be sold from
time to time in one or more transactions in the over- the-counter market, in
negotiated transactions, through the writing of options on the New Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Participating Broker-Dealer and/or the purchasers of
any such New Notes. Any Participating Broker-Dealer that resells the New Notes
that were received by it for its own account pursuant to the Exchange Offer
and any broker or dealer that participates in a distribution of such New Notes
may be deemed to be an "underwriter" within the meaning of the Securities Act
and any profit on any such resale of New Notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that
by acknowledging that it will deliver and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
 
  For a period of 180 days after the Expiration Date, the Obligors will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any Participating Broker-Dealer that has
provided the Obligors with notice of its status as a Participating Broker-
Dealer within 30 days after the consummation of the Exchange Offer.
 
                                 LEGAL MATTERS
 
  The validity of the New Notes offered hereby will be passed upon on behalf
of the Obligors and the Guarantor by Dow, Lohnes & Albertson, PLLC,
Washington, D.C.
 
                                    EXPERTS
 
  The audited combined financial statements of the Systems as of December 31,
1996 and 1997, and for each of the three years ended December 31, 1997, and
the audited combined statements of Holdings and Renaissance Media as of
December 31, 1997 and for the period from November 5, 1997 (date of inception)
to December 31, 1997 appearing in this Prospectus and Registration Statement
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their reports thereon appearing elsewhere herein, and are included in reliance
upon such reports given upon the authority of such firm as experts in
accounting and auditing.
 
                                      123

<PAGE>
 
                             AVAILABLE INFORMATION
 
  The Obligors and the Guarantor have filed with the Commission a Registration
Statement on Form S-4 (of which this Prospectus is a part and which term shall
encompass any amendments thereto) pursuant to the Securities Act with respect
to the Exchange Offer. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the information set forth
in the Registration Statement and the exhibits and schedules thereto. For
further information about the Obligors and the Exchange Offer, reference is
hereby made to the Registration Statement and to such exhibits and schedules.
Statements contained herein concerning the provisions of any documents filed
as an exhibit to the Registration Statement or otherwise filed with the
Commission are not necessarily complete, and in each instance reference is
made to the copy of such document so filed. Each such statement is qualified
in its entirety by such reference.
 
  In addition, the Obligors and the Guarantor will be subject to the
informational requirements of the Exchange Act, and, in accordance therewith,
will file reports and other information with the Commission. In addition,
under the Indenture governing the Notes, the Obligors will be required to
furnish to the Trustee and to registered holders of the Notes audited annual
consolidated financial statements, unaudited quarterly consolidated financial
reports and certain other reports. The Registration Statement, the exhibits
and schedules forming a part thereof and the reports and other information
filed by the Obligors with the Commission pursuant to the informational
requirements of the Exchange Act may be inspected without charge and copied
upon payment of certain fees at the public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, 13th Floor,
New York, New York 10048, and Chicago Regional Office, Northwestern Atrium,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission
also maintains a World Wide Web site on the Internet at http://www.sec.gov
that contains reports and other information regarding registrants that file
electronically with the Commission.
 
 
                                      124

<PAGE>
 
                     INDEX TO COMBINED FINANCIAL STATEMENTS
 

<TABLE>
<S>                                                                         <C>
RENAISSANCE MEDIA HOLDINGS LLC AND RENAISSANCE MEDIA LLC                    PAGE
                                                                            ----
Report of Independent Auditors............................................   F-2
Combined Balance Sheet as of December 31, 1997 and Consolidated Balance
 Sheet as of March 31, 1998 (unaudited) ..................................   F-3
Combined Income Statement and Retained Earnings for the Period from
 November 5, 1997 (Date of Inception) to December 31, 1997 and
 Consolidated Income Statement and Retained Earnings for the three months
 ended March 31, 1998 (unaudited) ........................................   F-4
Combined Statement of Cash Flows for the Period from November 5, 1997
 (Date of Inception) to December 31, 1997 and Consolidated Statement of
 Cash Flows for the three months ended March 31, 1998 (unaudited).........   F-5
Notes to Financial Statements.............................................   F-6
PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA, POINTE COUPEE
 LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
Report of Independent Auditors............................................   F-8
Combined Balance Sheets as of December 31, 1996 and 1997 and March 31,
 1998 (unaudited).........................................................   F-9
Combined Statements of Operations for the Years Ended December 31, 1995,
 1996 and 1997 and the three months ended March 31, 1997 and 1998
 (unaudited)..............................................................  F-10
Combined Statements of Changes in Net Assets for the Years Ended December
 31, 1996 and 1997 and the three months ended March 31, 1998 (unaudited)..  F-11
Combined Statements of Cash Flows for the Years Ended December 31, 1995,
 1996 and 1997 and the three months ended March 31, 1997 and 1998
 (unaudited)..............................................................  F-12
Notes to Combined Financial Statements....................................  F-13

</TABLE>

 
                                      F-1

<PAGE>
 

                        REPORT OF INDEPENDENT AUDITORS
 
To the Members of
Renaissance Media Holdings LLC
Renaissance Media LLC
 
  We have audited the accompanying combined balance sheet of Renaissance Media
Holdings LLC and Renaissance Media LLC (as combined, the "Company") as of
December 31, 1997 and the related combined income statement and statement of
cash flows for the period from November 5, 1997 (date of inception) to
December 31, 1997. These combined financial statements are the responsibility

of the Company's management. Our responsibility is to express an opinion on
these combined financial statements based on our audit.
 
  We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
 
  In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of the Company at
December 31, 1997 and the results of its operations and its cash flows for the
period from November 5, 1997 (date of inception) to December 31, 1997 in
conformity with generally accepted accounting principles.
 
                                          Ernst & Young LLP
New York, New York
March 16, 1998
 
                                      F-2

<PAGE>
 
            RENAISSANCE MEDIA HOLDINGS LLC AND RENAISSANCE MEDIA LLC
 
                                 BALANCE SHEETS
 

<TABLE>
<S>                                                <C>           <C>
                                                   DECEMBER 31,    MARCH 31,
                                                       1997           1998
                      ASSETS                        (COMBINED)   (CONSOLIDATED)
                                                   ------------  --------------
<CAPTION>
                                                                  (UNAUDITED)
<S>                                                <C>           <C>
Cash and cash equivalents......................... $    903,034  $      745,758
Accrued interest income...........................       59,434          65,575
Accounts receivable...............................        2,500           3,074
Prepaid expenses and other assets.................        2,041          10,191
Escrow deposit....................................   15,000,000      15,177,372
Property, plant & equipment.......................          --           56,348
Less accumulated depreciation.....................          --           (1,057)
                                                   ------------  --------------
                                                            --           55,291
Intangible assets.................................          --          581,755
Less accumulated amortization.....................          --             (127)
                                                   ------------  --------------
                                                            --          581,628
Deferred acquisition costs, net...................      347,500         666,949
Deferred financing costs..........................      692,500       1,393,759
Less accumulated amortization.....................       (4,271)        (17,083)
                                                   ------------  --------------
                                                        688,229       1,376,676
                                                   ------------  --------------
    Total assets.................................. $ 17,002,738  $   18,682,514
                                                   ============  ==============
         LIABILITIES AND MEMBERS' EQUITY
Due to Management Investors....................... $  1,000,000  $    1,000,000
Accounts payable..................................       11,313           2,864
Accrued expenses:
  Legal...........................................      880,000       1,830,500
  Audit fees......................................       15,000          33,000
  Other professional fees.........................       60,000         678,173
  Other operating.................................          --           18,864
  Other liability.................................          --            4,867
                                                   ------------  --------------
                                                      1,966,313       3,568,268
                                                   ------------  --------------
MEMBERS' EQUITY:
Morgan Stanley Capital Partners III, Inc..........            1               1
Morgan Stanley Capital Partners III, L.P..........   13,269,701      13,269,701
MSCP III 892 Investors, L.P.......................    1,358,582       1,358,582
Morgan Stanley Capital Investors, L.P.............      371,717         371,717
Retained earnings.................................       36,424         114,245
                                                   ------------  --------------
    Total members' equity.........................   15,036,425      15,114,246
                                                   ------------  --------------
    Total liabilities and members' equity......... $ 17,002,738  $   18,682,514
                                                   ============  ==============
</TABLE>

 
                See accompanying notes to financial statements.
 
                                      F-3

<PAGE>
 
            RENAISSANCE MEDIA HOLDINGS LLC AND RENAISSANCE MEDIA LLC
 
                   STATEMENTS OF INCOME AND RETAINED EARNINGS
 

<TABLE>
<CAPTION>
                              NOVEMBER 5, 1997
                             (DATE OF INCEPTION)  THREE MONTHS
                                     TO               ENDED
                              DECEMBER 31, 1998  MARCH 31, 1998-
                                 (COMBINED)      (CONSOLIDATED)
                             ------------------- ---------------
                                                   (UNAUDITED)
<S>                          <C>                 <C>
REVENUES:
Interest income.............       $64,968          $193,108
                                   -------          --------
    Total revenue...........        64,968           193,108
                                   -------          --------
EXPENSES:
Employee....................         9,196            50,264
Facility....................           --             22,500
General.....................            77             8,479
Professional................        15,000            20,048
Interest expense............         4,271            12,812
Depreciation and
 amortization...............           --              1,184
                                   -------          --------
    Total expenses..........        28,544           115,287
                                   -------          --------
    Net income..............       $36,424          $ 77,821
    Retained earnings,
     beginning of period....           --             36,424
                                   -------          --------
    Retained earnings, end
     of period..............       $36,424          $114,245
                                   =======          ========
</TABLE>

 
 
                See accompanying notes to financial statements.
 
                                      F-4

<PAGE>
 
            RENAISSANCE MEDIA HOLDINGS LLC AND RENAISSANCE MEDIA LLC
 
                            STATEMENTS OF CASH FLOWS
 

<TABLE>
<CAPTION>
                                              NOVEMBER 5, 1997    THREE MONTHS
                                            (DATE OF INCEPTION)      ENDED
                                            TO DECEMBER 31, 1997 MARCH 31, 1998
                                                 (COMBINED)      (CONSOLIDATED)
                                            -------------------- --------------
                                                                  (UNAUDITED)
<S>                                         <C>                  <C>
OPERATING ACTIVITIES:
Net income................................      $     36,424        $ 77,821
Adjustments to non-cash and non-operating
 items:
  Non-cash interest expense/(income)......             4,271        (164,560)
  Depreciation............................               --            1,057
  Amortization............................               --              127
  Changes in operating assets and
   liabilities:
    Accrued interest income...............           (59,434)         (6,141)
    Accounts receivable...................            (2,500)         (3,074)
    Prepaid expenses and other assets.....            (2,041)         (8,150)
    Purchase of interest rate cap
     agreement............................          (102,500)            --
    Accrued expenses:
      Other professional fees.............             2,500             --
      Audit fees..........................            15,000          18,000
    Other operating.......................               --           18,864
    Accounts payable......................            11,313          (8,449)
    Other liabilities.....................               --            4,867
                                                ------------        --------
Net cash (used in) operating activities...           (96,967)        (69,638)
                                                ------------        --------
INVESTING ACTIVITIES:
Escrow deposit............................       (15,000,000)            --
Property, plant and equipment.............               --          (56,348)
Intangible asset additions................               --           (8,582)
                                                ------------        --------
Net cash (used in) investing activities...       (15,000,000)        (64,930)
                                                ------------        --------
FINANCING ACTIVITIES:
Deferred financing costs..................               --           (6,259)
Deferred acquisition costs................               --          (16,449)
Due to Management Investors...............         1,000,000             --
Capital contributions:
  Morgan Stanley Capital Partners III,
   Inc....................................                 1             --
  Morgan Stanley Capital Partners III,
   L.P....................................        13,269,701             --
  MSCP III 892 Investors, L.P.............         1,358,582             --
  Morgan Stanley Capital Investors, L.P...           371,717             --
                                                ------------        --------
Net cash provided by (used in) financing
 activities...............................        16,000,001         (22,708)
                                                ------------        --------
NET INCREASE IN CASH AND CASH
 EQUIVALENTS..............................           903,034        (157,276)
CASH AND CASH EQUIVALENTS AT THE BEGINNING
 OF THE PERIOD............................               --          903,034
                                                ------------        --------
CASH AND CASH EQUIVALENTS AT THE END OF
 THE PERIOD...............................      $    903,034        $745,758
                                                ============        ========
</TABLE>

 
                See accompanying notes to financial statements.
 
                                      F-5

<PAGE>
 
           RENAISSANCE MEDIA HOLDINGS LLC AND RENAISSANCE MEDIA LLC
 
                         NOTES TO FINANCIAL STATEMENTS
 
1. ORGANIZATION AND BASIS OF PRESENTATION
 
  Renaissance Media Holdings LLC ("Holdings") was formed on November 5, 1997
to acquire certain cable television systems in Louisiana, Tennessee and
Mississippi. The initial investing stockholders of Holdings were Morgan
Stanley Capital Partners III, L.P., MSCP III 892 Investors, L.P., and Morgan
Stanley Capital Investors, L.P. Renaissance Media LLC ("Media") was formed on
November 24, 1997. The initial investing stockholder of Media was Morgan
Stanley Capital Partners III, Inc.
 
  The financial statements of Holdings and Media (as combined, the "Company")
have been combined as of December 31, 1997 and for the period from November 5,
1997 (date of inception) to December 31, 1997. Subsequent to December 31,
1997, the following legal entity structure changes were enacted: a) Holdings
formed Renaissance Media Group LLC ("Group"); b) Group formed three wholly-
owned subsidiaries, Renaissance Media (Louisiana) LLC ("Louisiana"),
Renaissance Media (Tennessee) LLC ("Tennessee"), and Renaissance Media Capital
Corporation; and c) Media became a wholly-owned subsidiary of Holdings through
a 24% interest held by Tennessee and a 76% interest held by Louisiana. The
consolidated financial statements as of and for the three months ended March
31, 1998 include the financial statements of Holdings and its wholly-owned
subsidiaries; Renaissance Media Group LLC, Renaissance Media (Louisiana) LLC,
Renaissance Media (Tennessee) LLC, Renaissance Media Capital Corporation and
Renaissance Media LLC.
 
  Significant intercompany transactions and accounts have been eliminated. The
accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial statements and
with the instructions to Article 10 of Regulation S-X. The interim financial
statements are unaudited but include all adjustments, which are of normal
recurring nature, that the Company considers necessary for a fair presentation
of the financial position and the results of operations and cash flows for
such period. Operating results of interim periods are not necessarily
indicative of results for a full year.
 
2. RECLASSIFICATIONS
 
  Certain reclassifications have been made to the 1997 financial statements to
conform to the current period presentation.
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Use of Estimates
 
  The presentation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and footnotes thereto. Actual results
could differ from those estimates.
 
 Cash Equivalents
 
  The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
 
 Deferred Acquisition and Financing Costs
 
  Deferred acquisition and financing costs at December 31, 1997 and March 31,
1998 consist primarily of legal fees associated with the acquisition of
certain assets of TWI Cable Inc. ("TWI Cable") and financing costs relating to
the contemplated financing (see note 5). Subsequent to the closing of the
acquisition, these costs will be amortized over periods ranging from 8 to 15
years.
 
                                      F-6

<PAGE>
 
           RENAISSANCE MEDIA HOLDINGS LLC AND RENAISSANCE MEDIA LLC
 
                  NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
 
 
4. ASSET PURCHASE AGREEMENT
 
  On November 14, 1997, Holdings entered into an Asset Purchase Agreement (the
"Asset Purchase Agreement") with TWI Cable whereby Holdings agreed to purchase
from TWI Cable the assets of certain cable television systems in Louisiana,
Tennessee and Mississippi (the "Acquisition"). This transaction closed on
April 9, 1998. The purchase price for the assets acquired was $309.5 million,
$300 million of which was paid in cash and $9.5 million of which was paid by
the issuance of an equity interest in Holdings to TWI Cable at the closing. In
accordance with the Asset Purchase Agreement, Holdings made a deposit payment
of $15 million on December 5, 1997 which was held by an escrow agent until the
closing date. (See Note 10.)
 
5. CAPITALIZATION AND DEBT FINANCING
 
  In accordance with a commitment letter dated November 14, 1997, Morgan
Stanley Senior Funding, Inc. has committed to provide up to $200 million of
acquisition debt financing to Media ("Acquisition Debt"), including $25
million available to Media, if necessary, to fund capital expansion and
upgrade programs as well as for general working capital requirements. (See
Note 10.)
 
6. INTEREST-RATE CAP AGREEMENT
 
  On December 5, 1997, Media purchased an interest-rate cap agreement from
Morgan Stanley Capital Services Inc. At December 31, 1997, the interest-rate
cap agreement effectively fixed or set a maximum interest rate of 7.25% on
bank debt borrowings up to $100 million. The interest-rate cap agreement
expires on December 5, 1999. The cost of this agreement has been recorded as
deferred financing costs and is being amortized to interest expense ratably
over the life of the agreement.
 
7. DUE TO MANAGEMENT INVESTORS
 
  Subsequent to the formation of the Company and the execution of the Asset
Purchase Agreement, the Management Investors advanced $1 million to Holdings.
At the closing of the Asset Purchase Agreement, (see Note 10), this advance
will be contributed by the Management Investors to Holdings as equity.
 
8. COMMITMENTS
 
  Media entered into a lease agreement on January 5, 1998 for corporate office
headquarters. The lease agreement expires on January 4, 1999. Annual rental
expense for 1998 under the agreement will be $90,000.
 
9. INCOME TAXES
 
  Holdings, Group and Media are limited liability companies and are not
subject to Federal or New York State Income Tax. Any income earned by these
entities will be taxed to their respective members. Louisiana and Tennessee
have elected to be treated as Corporations for Income Tax purposes and as of
December 31, 1997 and March 31, 1998 have not recorded any tax benefit of
their losses pending completion of the Acquisition.
 
10. SUBSEQUENT EVENTS (UNAUDITED)
 
  On April 9, 1998, the Acquisition described on Note 4 was completed. At that
time Holdings assigned its rights and obligations under the Asset Purchase
Agreement to Media.
 
  The capitalization of Holdings was modified with respect to the financing
aspects of the transaction such that the Acquisition Debt described in Note 5
was reduced to $150 million of which $110 million was drawn and $40 million is
available under a revolving credit facility. In addition, Renaissance Media
Group LLC, Renaissance Media (Louisiana) LLC, Renaissance (Tennessee) LLC and
Renaissance Media Capital Corporation issued $100 million senior discount
notes due 2008. Additional equity contributions of $93.5 million, were made by
M. S. Capital Partners III, L.P., MSCP III 892 Investors, L.P., M.S. Capital
Investors, L.P., TWI Cable Inc. and the Management Investors on April 9, 1998
to the Company.
 
                                      F-7

<PAGE>
 

                        REPORT OF INDEPENDENT AUDITORS
 
To the Board of Directors of
 TWI Cable Inc.
 
  We have audited the accompanying combined balance sheets of the Picayune MS,
Lafourche LA, St. Tammany LA, St. Landry LA, Pointe Coupee LA, and Jackson TN
cable television systems, (collectively, the "Combined Systems") included in
TWI Cable, Inc. ("TWI Cable"), as of December 31, 1996 and 1997, the related
combined statements of operations, changes in net assets and cash flows for
the years then ended. In addition, we have audited the combined statement of
operations and cash flows for the year ended December 31, 1995 of the
Predecessor Combined Systems. These combined financial statements are the
responsibility of the Combined Systems' or the Predecessor's management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.
 
  We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
  In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of the Combined
Systems, included in TWI Cable or the Predecessor, at December 31, 1996 and
1997, and the combined results of their operations and their cash flows for
the years ended December 31, 1995, 1996 and 1997, in conformity with generally
accepted accounting principles.
 
                                          Ernst & Young LLP
New York, New York
March 16, 1998

 
                                      F-8

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                          (INCLUDED IN TWI CABLE INC.)
 
                            COMBINED BALANCE SHEETS
                                 (IN THOUSANDS)
 

<TABLE>
<CAPTION>
                                                DECEMBER 31,       MARCH 31,
                                              ----------------- ---------------
                                                1996     1997      1998
                                              -------- -------- -----------
                                                                (UNAUDITED)
<S>                                           <C>      <C>      <C>         <C>
                   ASSETS
Cash and cash equivalents.................... $    570 $  1,371  $  2,943
Receivables, less allowance of $71 and $116
 for the years ended December 31, 1996 and
 1997, and $116 for the three months ended
 March 31, 1998 (unaudited), respectively....      794    1,120     1,502
Prepaid expenses and other assets............       45      183       327
Property, plant and equipment, net...........   36,966   36,944    35,994
Cable television franchises, net.............  209,952  198,913   196,153
Goodwill and other intangibles, net..........   51,722   50,383    50,052
                                              -------- --------  --------
    Total assets............................. $300,049 $288,914  $286,971
                                              ======== ========  ========
         LIABILITIES AND NET ASSETS
Accounts payable............................. $  1,640 $    652  $     63
Accrued programming expenses.................      847      904       978
Accrued franchise fees.......................      736      835       564
Subscriber advance payments and deposits.....       66      407       458
Deferred income taxes........................   58,340   60,601    61,792
Other liabilities............................      945      969     1,108
                                              -------- --------  --------
    Total liabilities........................   62,574   64,368    64,963
    Total net assets.........................  237,475  224,546   222,008
                                              -------- --------  --------
    Total liabilities and net assets......... $300,049 $288,914  $286,971
                                              ======== ========  ========
</TABLE>

 
 
            See accompanying notes to combined financial statements.
 
                                      F-9

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
 
                       COMBINED STATEMENTS OF OPERATIONS
 
                                 (IN THOUSANDS)
 

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                    --------------------------------------------
                                                        1995           1996            1997
                                                    ------------- --------------  --------------
                                                    (PREDECESSOR) (INCLUDED IN TWI CABLE INC.)
<S>                                                 <C>           <C>             <C>
REVENUES.....................................          $43,549           $47,327         $50,987
COSTS AND EXPENSES:
Operating and programming....................           13,010            12,413          12,101
Selling, general and administrative..........            9,977            12,946          13,823
Depreciation and amortization................           17,610            18,360          18,697
(Gain) loss on disposal of fixed assets......              --               (244)            620
                                                       -------    --------------  --------------
  Total costs and expenses...................           40,597            43,475          45,241
                                                       -------    --------------  --------------
Operating income.............................            2,952             3,852           5,746
Interest expense.............................           11,871               --              --
                                                       -------    --------------  --------------
(Loss) income before income tax (benefit) ex-
 pense.......................................           (8,919)            3,852           5,746
Income tax (benefit) expense.................           (3,567)            1,502           2,262
                                                       -------    --------------  --------------
Net (loss) income............................          $(5,352)   $        2,350  $        3,484
                                                       =======    ==============  ==============

<CAPTION>
                                                      THREE MONTHS ENDED MARCH 31,
                                                    ------------------------------
                                                         1997           1998
                                                    -------------- ---------------
                                                    (INCLUDED IN TWI CABLE INC.)
                                                             (UNAUDITED)
<S>                                                 <C>            <C>             
REVENUES.....................................              $12,446        $13,973
COSTS AND EXPENSES:
Operating and programming....................                2,876          3,326
Selling, general and administrative..........                3,597          3,390
Depreciation and amortization................                4,667          4,707
(Gain) loss on disposal of fixed assets......                    5            (96)
                                                    -------------- ---------------
  Total costs and expenses...................               11,145         11,327
                                                    -------------- ---------------
Operating income.............................                1,301          2,646
Interest expense.............................                  --             --
                                                    -------------- ---------------
(Loss) income before income tax (benefit) ex-
 pense.......................................                1,301          2,646
Income tax (benefit) expense.................                  659          1,191
                                                    -------------- ---------------
Net (loss) income............................       $          642 $        1,455
                                                    ============== ===============
</TABLE>

 
 
 
            See accompanying notes to combined financial statements.
 
                                      F-10

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                          (INCLUDED IN TWI CABLE INC.)
 
                  COMBINED STATEMENTS OF CHANGES IN NET ASSETS
                                 (IN THOUSANDS)
 

<TABLE>
<S>                                                                    <C>
Contribution by Parent................................................ $250,039
  Net distributions to Parent.........................................  (14,914)
  Net income..........................................................    2,350
                                                                       --------
Balance at December 31, 1996..........................................  237,475
  Net distribution to Parent..........................................  (16,413)
  Net income..........................................................    3,484
                                                                       --------
Balance at December 31, 1997.......................................... $224,546
  Net distribution to Parent (Unaudited)..............................   (3,993)
  Net income (Unaudited)..............................................    1,455
                                                                       --------
Balance at March 31, 1998 (Unaudited)................................. $222,008
                                                                       ========
</TABLE>

 
 
 
            See accompanying notes to combined financial statements.
 
                                      F-11

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
 
                       COMBINED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
 

<TABLE>
<CAPTION>
                                   YEAR ENDED DECEMBER 31,               THREE MONTHS ENDED MARCH 31,
                          -------------------------------------------- -----------------------------------
                              1995           1996           1997            1997            1998
                          ------------- --------------  -------------- --------------  --------------
                          (PREDECESSOR) (INCLUDED IN TWI CABLE INC.)   (INCLUDED IN TWI CABLE INC.)
                                                                                (UNAUDITED)
<S>                       <C>           <C>             <C>            <C>             <C>             <C>
OPERATING ACTIVITIES:
Net (loss) income.......     $(5,352)   $        2,350  $       3,484  $          642  $        1,455
Adjustments for noncash
 and nonoperating items:
  Income tax (benefit)
   expense..............      (3,567)            1,502          2,262             659           1,191
  Depreciation and
   amortization.........      17,610            18,360         18,697           4,667           4,707
  (Gain) loss on
   disposal of fixed
   assets...............         --               (244)           620               5             (96)
  Changes in operating
   assets and
   liabilities:
    Receivables,
     prepaids and other
     assets.............        (196)              944           (464)           (149)           (526)
    Accounts payable,
     accrued expenses
     and other
     liabilities........        (972)              176           (466)           (998)           (596)
    Other balance sheet
     changes............         --                --            (529)            (39)           (114)
                             -------    --------------  -------------  --------------  --------------
Net cash provided by
 operations.............       7,523            23,088         23,604           4,787           6,021
INVESTING ACTIVITIES:
Purchase of Predecessor
 cable systems, net of
 cash acquired..........         --           (249,473)           --              --              --
Capital expenditures....      (7,376)           (8,170)        (6,390)         (1,561)           (456)
                             -------    --------------  -------------  --------------  --------------
Net cash used in
 investing activities...      (7,376)         (257,643)        (6,390)         (1,561)           (456)
FINANCING ACTIVITIES:
Advance from Parent for
 purchase of
 Predecessor............         --            250,039            --              --              --
Net distribution to
 Parent.................         --            (14,914)       (16,413)         (1,281)         (3,993)
                             -------    --------------  -------------  --------------  --------------
Net cash provided by
 (used in) financing
 activities.............         --            235,125        (16,413)         (1,281)         (3,993)
INCREASE IN CASH AND
 CASH EQUIVALENTS.......         147               570            801           1,945           1,572
CASH AND CASH
 EQUIVALENTS AT
 BEGINNING OF PERIOD....         419                 0            570             570           1,371
                             -------    --------------  -------------  --------------  --------------
CASH AND CASH
 EQUIVALENTS AT END OF
 PERIOD.................     $   566    $          570  $       1,371  $        2,515  $        2,943
                             =======    ==============  =============  ==============  ==============
</TABLE>

 
            See accompanying notes to combined financial statements.
 
                                      F-12

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                         (INCLUDED IN TWI CABLE INC.)
 
                    NOTES TO COMBINED FINANCIAL STATEMENTS
 
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Description of Business
 
  The cable television systems operating in the metropolitan areas of
Picayune, Mississippi; Lafourche, Louisiana; St. Tammany, Louisiana; St.
Landry, Louisiana; Pointe Coupee, Louisiana; and Jackson, Tennessee (the
"Combined Systems") are principally engaged in the cable television business
under non-exclusive franchise agreements, which expire at various times
beginning in 1999. The Combined Systems' operations consist primarily of
selling video programming which is distributed to subscribers for a monthly
fee through a network of coaxial and fiber-optic cables.
 
  Prior to January 4, 1996, the Combined Systems were included in certain
subsidiaries of Cablevision Industries Corporation ("CVI"). On January 4,
1996, CVI merged into a wholly owned subsidiary of Time Warner Inc. (the "CVI
Merger"). On October 1, 1996, Time Warner Inc. ("Time Warner") completed a
reorganization amongst certain of its wholly owned cable television
subsidiaries whereby CVI was renamed TWI Cable Inc. ("TWI Cable").
 
 Basis of Presentation
 
  TWI Cable has committed to sell the Combined Systems to Renaissance Media
Holdings LLC ("Renaissance") pursuant to an Asset Purchase Agreement with
Renaissance, dated November 14, 1997. Accordingly, the accompanying combined
financial statements have been prepared as if the Combined Systems had
operated as an independent, stand-alone entity for all periods presented.
Effective as of January 1, 1996, the Combined Systems' financial statements
reflect the new basis of accounting arising from Time Warner's merger with
CVI. Based on Time Warner's allocation of the purchase price, the assets and
liabilities of the Combined Systems were revalued resulting in goodwill
allocated to the Combined Systems of approximately $52,971,000, which is being
amortized over its estimated life of 40 years. In addition, approximately
$220,981,000 was allocated to cable television franchises and other intangible
assets, which is being amortized over periods up to 20 years. The Combined
Systems' financial statements through December 31, 1995 reflect the historical
cost of their assets and liabilities and results of their operations.
 
  The combined statements have been adjusted to include certain corporate
expenses incurred by Time Warner Cable and/or TWI Cable on the Combined
Systems' behalf.
 
  The combined financial statements as of and for the three months ended March
31, 1998 and 1997 included herein are unaudited and have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statments prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. However, in the opinon of management of the Combined Systems, the
combined financial statements as of and for the three months ended March 31,
1997 and 1998 include all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the financial information.
 
 
                                     F-13

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                         (INCLUDED IN TWI CABLE INC.)
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
 
 Basis of Combination
 
  The combined financial statements include the assets, liabilities, revenues,
expenses, income, loss and cash flows of the Combined Systems, as if the
Combined Systems were a single company. Significant intercompany accounts and
transactions between the Combined Systems have been eliminated. Significant
accounts and transactions with Time Warner and its affiliates are disclosed as
related party transactions (see Note 3).
 
 Use of Estimates
 
  The preparation of combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the combined financial
statements and footnotes thereto. Actual results could differ from those
estimates.
 
 Concentration of Credit Risk
 
  A significant portion of the customer base is concentrated within the local
geographical area of each of the individual cable television systems. The
Combined Systems generally extend credit to customers and the
ultimate collection of accounts receivable could be affected by the local
economy. Management performs continuous credit evaluations of its customers
and may require cash in advance or other special arrangements from certain
customers. Management does not believe that there is any significant credit
risk which could have a material effect on the financial condition of the
Combined Systems.
 
 Revenue and Costs
 
  Subscriber fees are recorded as revenue in the period the related services
are provided and advertising revenues are recognized in the period the related
advertisements are exhibited. Rights to exhibit programming are purchased from
various cable networks. The costs of such rights are generally expensed as the
related services are made available to subscribers.
 
 Advertising Costs
 
  Advertising costs are expensed upon the first exhibition of the related
advertisements. Advertising expense amounted to $308,000, $632,000 and
$510,000 for the years ended 1995, 1996 and 1997, respectively and $147,000
and $59,000 for the periods ended March 31, 1997 and 1998, respectively.
 
 Statement of Cash Flows
 
  The Combined Systems participate in a cash management system with affiliates
whereby cash receipts are transferred to a centralized bank account from which
centralized payments to various suppliers and creditors are made on behalf of
the Combined Systems. The excess of such cash receipts over payments is
included in net assets. Amounts shown as cash represent the Combined Systems'
net cash receipts not transferred to the centralized account as of December
31, 1996 and 1997. The average net intercompany balances were $173,348,000 and
$170,438,000 for the years ended December 31, 1996 and 1997, respectively.
 
  For purposes of this statement, cash and cash equivalents includes all
highly liquid investments purchased with original maturities of three months
or less.
 
 Property, Plant and Equipment
 
  Property, plant and equipment are stated at cost. Additions to property,
plant and equipment generally include material, labor, overhead and interest.
Depreciation is provided on the straight-line method over estimated useful
lives as follows:
 

<TABLE>
     <S>                                                              <C>
     Buildings and improvements...................................... 5-20 years
     Cable television equipment...................................... 5-15 years
     Furniture, fixtures and other equipment......................... 3-10 years
</TABLE>

 
                                     F-14

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                         (INCLUDED IN TWI CABLE INC.)
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
 
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
 
Property, plant and equipment consist of:
 

<TABLE>
<CAPTION>
                                               DECEMBER 31,       MARCH 31,
                                              ----------------  --------------
                                               1996     1997         1998
                                              -------  -------  --------------
                                              (IN THOUSANDS)    (IN THOUSANDS)
                                                                 (UNAUDITED)
      <S>                                     <C>      <C>      <C>
      Land and buildings..................... $ 2,003  $ 2,265     $ 2,255
      Cable television equipment.............  32,324   39,589      40,386
      Furniture, fixtures and other equip-
       ment..................................   1,455    2,341       2,308
      Construction in progress...............   5,657    1,028       1,026
                                              -------  -------     -------
                                               41,439   45,223      45,975
      Less accumulated depreciation..........  (4,473)  (8,279)     (9,981)
                                              -------  -------     -------
        Total................................ $36,966  $36,944     $35,994
                                              =======  =======     =======
</TABLE>

 Intangible Assets
 
  During 1996 and 1997, the Combined Systems amortized goodwill over periods
up to 40 years and cable television franchises over periods up to 20 years,
both using the straight-line method. Prior to the CVI Merger, goodwill and
cable television franchises were amortized over 15 years using the straight-
line method. For the years ended 1995, 1996, and 1997, amortization of
goodwill amounted to $8,199,000, $1,325,000, and $1,325,000, respectively, and
amortization of cable television franchises amounted to $1,284,000,
$11,048,000, and $11,048,000, respectively. For the three month periods ended
March 31, 1998 (unaudited), amortization of goodwill amounted to $331,000, and
amortization of cable television franchises amounted to $2,762,000.
Accumulated amortization of intangible assets at December 31, 1996 and 1997
amounted to $12,373,000 and $24,746,000, respectively, and $24,858,000 at
March 31, 1998 (unaudited).
 
  Management separately reviews the carrying value of acquired intangible
assets for each acquired entity on a quarterly basis to determine whether an
impairment may exist. Management considers relevant cash flow and
profitability information, including estimated future operating results,
trends and other available information, in assessing whether the carrying
value of intangible assets can be recovered. Upon a determination that the
carrying value of intangible assets will not be recovered from the
undiscounted future cash flows of the acquired business, the carrying value of
such intangible assets would be considered impaired and would be reduced by a
charge to operations in the amount of the impairment. An impairment charge is
measured as a deficiency in estimated discounted future cash flows of the
acquired business to recover the carrying value related to the intangible
assets.
 
 Income Taxes
 
  Income taxes have been provided using the liability method prescribed by
FASB Statement No. 109, "Accounting for Income Taxes." Under the liability
method, deferred income taxes reflect tax carryforwards and the net tax
effects of temporary differences between the carrying amount of assets and
liabilities for financial statements and income tax purposes, as determined
under enacted tax laws and rates.
 
2. EMPLOYEE BENEFIT PLANS
 
  Following the CVI Merger, the Combined Systems began participation in the
Time Warner Cable Pension Plan (the "Pension Plan"), a non-contributory
defined benefit pension plan, and the Time Warner Cable Employee Savings Plan
(the "Savings Plan") which are administered by a committee appointed by the
Board of Representatives of Time Warner Entertainment Company, L.P. ("TWE"),
an affiliate of Time Warner, and which cover substantially all employees.
 
                                     F-15

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                         (INCLUDED IN TWI CABLE INC.)
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
 
2. EMPLOYEE BENEFIT PLANS--(CONTINUED)
 
  Benefits under the Pension Plan are determined based on formulas which
reflect an employee's years of service and compensation levels during the
employment period. Pension expense for the years ended December 31, 1996 and
1997 totaled $184,000 and $192,000, respectively, and $61,000 and $56,000 for
the three months ended March 31, 1997 and 1998 (unaudited), respectively.
 
  The Combined Systems' contributions to the Savings Plan are limited to 6.67%
of an employee's eligible compensation during the plan year. The Board of
Representatives of TWE has the right in any year to set the maximum amount of
the Combined Systems' contribution. Defined contribution plan expense for the
years ended December 31, 1996 and 1997 totaled $107,000 and $117,000,
respectively, and $30,000 and $35,000 for the three months ended March 31,
1997 and 1998 (unaudited), respectively.
 
  Prior to the CVI Merger, substantially all employees were eligible to
participate in a profit sharing plan or a defined contribution plan. The
profit sharing plan provided that the Combined Systems may contribute, at the
discretion of their board of directors, an amount up to 15% of compensation
for all eligible participants out of its accumulated earnings and profits, as
defined. Profit sharing expense amounted to approximately $31,000 for the year
ended December 31, 1995.
 
  The defined contribution plan contained a qualified cash or deferred
arrangement pursuant to Internal Revenue Code Section 401(k). This plan
provided that eligible employees may contribute from 2% to 10% of their
compensation to the plan. The Combined Systems matched contributions of up to
4% of the employees' compensation. The expense for this plan amounted to
approximately $96,000 for the year ended December 31, 1995.
 
  The Combined Systems have no material obligations for other post retirement
benefits.
 
3. RELATED PARTIES
 
  In the normal course of conducting business, the Combined Systems had
various transactions with Time Warner and its affiliates, generally on terms
resulting from a negotiation between the affected units that in management's
view resulted in reasonable allocations.
 
 Programming
 
  Included in the Combined Systems' 1996 and 1997 operating expenses are
charges for programming and promotional services provided by Home Box Office,
Turner Broadcasting System, Inc. and other affiliates of Time Warner. These
charges are based on customary rates and are in the ordinary course of
business. For the year ended December 31, 1996 and 1997, these charges totaled
$3,260,000 and $3,458,000, respectively, and $860,000 and $1,069,000 for the
three months ended March 31, 1997 and 1998 (unaudited), respectively. Accrued
related party expenses for these programming and promotional services included
in accrued programming expenses approximated $327,000 and $291,000 for the
years ended December 31, 1996 and 1997, respectively, and $423,000 and
$314,000 for the three months ended March 31, 1997 and 1998 (unaudited),
respectively. There were no such programming and promotional service related
party transactions in 1995.
 
 Management Fees
 
  TWI Cable entered into a management service arrangement with Time Warner
Cable ("TWC"), pursuant to which TWC is responsible for the management and
operation of TWI Cable, which includes the Combined Systems. The management
fees paid to TWC by TWI Cable are based on an allocation of the corporate
expenses of TWC's cable division in proportion to the respective number of
subscribers of all cable systems managed by TWC's cable division. The
allocation of the TWI Cable management fee to the Combined Systems
approximated $1,432,000 and $1,715,000 for the years ended December 31, 1996
and 1997, respectively, and $429,000 and $446,000 for the three months ended
March 31, 1997 and 1998 (unaudited), respectively.
 
                                     F-16

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                         (INCLUDED IN TWI CABLE INC.)
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  Other divisional expenses allocated to the Combined Systems approximated
$1,301,000 and $1,067,000 for the years ended December 31, 1996 and 1997,
respectively, and $267,000 and $275,000 for the three months ended March 31,
1997 and 1998 (unaudited), respectively.
 
4. INTEREST EXPENSE
 
  Prior to the CVI Merger, the Jackson, Tennessee system was included in
Cablevision Industries Limited Partnership and Combined Entities ("CILP"). The
Jackson system was charged interest expense in connection with CILP's (a)
senior and subordinated bank credit agreements; and (b) senior unsecured
subordinated Series A and Series B notes payable to CVI. The remaining five
systems comprising the Combined Systems were included in Cablevision
Industries of the Southeast, Inc. and Combined Entities ("CIOS"). These
systems were charged interest expense in connection with CIOS's (a) bank
revolving credit agreement; and (b) junior and senior subordinated debt to
CVI.
 
5. INCOME TAXES
 
  Effective January 4, 1996, the Combined Systems are included in the
consolidated federal income tax return of Time Warner. Prior to January 4,
1996, the Combined Systems were included in the consolidated federal income
tax return of CVI. The provision (benefit) for income taxes has been
calculated on a separate company basis. The components of the provision
(benefit) for income taxes are as follows:
 

<TABLE>
<CAPTION>
                                                                 THREE
                                                                MONTHS
                                                                 ENDED
                                    YEAR ENDED DECEMBER 31,    MARCH 31,
                                    ------------------------- -----------
                                      1995     1996    1997   1997  1998
                                    --------  ------- ------- ---- ------
                                         (IN THOUSANDS)       (IN THOUSANDS)
                                                                (UNAUDITED)
   <S>                              <C>       <C>     <C>     <C>  <C>    <C>
   Federal:
     Current......................  $    --   $   --  $   --  $--  $  --
     Deferred.....................    (2,881)   1,213   1,826  532    962
   State:
     Current......................       --       --      --   --     --
     Deferred.....................      (686)     289     436  127    229
                                    --------  ------- ------- ---- ------
       Net provision (benefit) for
        income taxes..............   $(3,567) $ 1,502 $ 2,262 $659 $1,191
                                    ========  ======= ======= ==== ======
</TABLE>

 
  The Combined Systems did not, and will not, have a tax sharing agreement
with either Time Warner, TWI Cable or CVI. Therefore, the Combined Systems
have not and will not be compensated for the utilization of the Combined
Systems' tax losses, by Time Warner, TWI Cable or CVI. In addition, the
Combined Systems have not and will not be required to make payments to either
Time Warner or TWI Cable for the current tax provision of the Combined
Systems.
 
  The differences between the income tax provision (benefit) expected at the
U.S. federal statutory income tax rate and the total income tax provision
(benefit) are due to nondeductible goodwill amortization and state taxes.
 
                                     F-17

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                         (INCLUDED IN TWI CABLE INC.)
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
 
5. INCOME TAXES--(CONTINUED)
 
  Significant components of the Combined Systems' deferred tax assets and
liabilities, as calculated on a separate company basis, are as follows:

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                 YEAR ENDED DECEMBER 31,     MARCH 31,
                                 ----------------------- ------------------
                                    1996        1997            1998
                                 ----------- ----------- ------------------
                                     (IN THOUSANDS)          (IN THOUSANDS)
                                                              (UNAUDITED)
   <S>                           <C>         <C>         <C>                <C>
   Deferred tax liabilities:
     Amortization..............  $    61,266 $    58,507      $57,817
     Depreciation..............        3,576       4,060        4,181
                                 ----------- -----------      -------
       Total gross deferred tax
        liabilities............       64,842      62,567       61,998
                                 ----------- -----------      -------
   Deferred tax assets:
     Tax loss carryforwards....        6,474       1,920          160
     Allowance for doubtful
      accounts.................           28          46           46
                                 ----------- -----------      -------
       Total deferred tax
        assets.................        6,502       1,966          206
                                 ----------- -----------      -------
       Net deferred tax
        liability..............  $    58,340 $    60,601      $61,792
                                 =========== ===========      =======
</TABLE>

 
  On a separate company basis, the Combined Systems have tax loss
carryforwards of approximately $4.8 million at December 31, 1997 and tax loss
carryforwards of approximately $400,000 at March 31, 1998 (unaudited).
However, if the Combined Systems are acquired in an asset purchase, the tax
loss carryforwards, and net deferred tax liabilities relating to temporary
differences will not carry over to Renaissance (see Note 8).
 
6. COMMITMENTS AND CONTINGENCIES
 
  The Combined Systems had rental expense of approximately $642,000, $824,000,
and $843,000 for the years ended December 31, 1995, 1996 and 1997,
respectively, and $209,000 and $224,000 for the three months ended March 31,
1997 and 1998 (unaudited), respectively, under various lease and rental
agreements for offices, utility poles, warehouses and computer equipment.
Future minimum annual rental payments under noncancellable leases will
approximate $1,000,000 annually over the next five years.
 
  In exchange for certain flexibility in establishing cable rate pricing
structures for regulated services that went into effect on January 1, 1996,
TWC has agreed with the Federal Communications Commission ("FCC") to invest in
certain upgrades to its cable infrastructure over the next three years. This
agreement with the FCC, which extends to the Combined Systems, will be assumed
by Renaissance as it relates to the Combined Systems in accordance with the
Asset Purchase Agreement.
 
7. OTHER LIABILITIES
 
  Other liabilities consist of:

<TABLE>
<CAPTION>
                                                   DECEMBER 31,     MARCH 31,
                                                  --------------- --------------
                                                   1996    1997        1998
                                                  ------- ------- --------------
                                                  (IN THOUSANDS)  (IN THOUSANDS)
                                                                   (UNAUDITED)
      <S>                                         <C>     <C>     <C>
      Compensation............................... $   217 $   250     $  279
      Data Processing Costs......................     100      90        161
      Sales and other taxes......................     101      90        146
      Copyright Fees.............................      85      83         35
      Pole Rent..................................      66      63         93
      Other......................................     376     393        394
                                                  ------- -------     ------
        Total.................................... $   945 $   969     $1,108
                                                  ======= =======     ======
</TABLE>

 
                                     F-18

<PAGE>
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                          (INCLUDED IN TWI CABLE INC.)
 
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
 
8. SUBSEQUENT EVENT (UNAUDITED)
 
  The sale of the Combined Systems, in connection with the Asset Purchase
Agreement with Renaissance, closed on April 9, 1998 at the purchase price of
$309,500,000.
 
                                      F-19

<PAGE>
 
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT        +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR   +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE      +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE    +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF  +
+ANY SUCH STATE.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                              [ALTERNATE PAGE C-1]
 
                             SUBJECT TO COMPLETION
                               DATED JUNE  , 1998
PROSPECTUS
                                                                            LOGO
                          RENAISSANCE MEDIA GROUP LLC
                       RENAISSANCE MEDIA (LOUISIANA) LLC
                       RENAISSANCE MEDIA (TENNESSEE) LLC
                     RENAISSANCE MEDIA CAPITAL CORPORATION
 
              OFFER TO EXCHANGE 10% SENIOR DISCOUNT NOTES DUE 2008
              WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
         FOR ANY AND ALL OUTSTANDING 10% SENIOR DISCOUNT NOTES DUE 2008
 
                  THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
              NEW YORK CITY TIME, ON      , 1998, UNLESS EXTENDED
 
  The 10% Senior Discount Notes due 2008 (the "'New Notes") of Renaissance
Media (Louisiana) LLC ("Renaissance Louisiana"), Renaissance Media (Tennessee)
LLC ("Renaissance Tennessee") and Renaissance Media Capital Corporation
("'Renaissance Capital" and, together with Renaissance Louisiana and
Renaissance Tennessee, the "Obligors") are fully and unconditionally guaranteed
(the "New Guaranty") on a senior basis by Renaissance Media Group LLC (the
"Guarantor"). Each of the Obligors is a wholly owned subsidiary of the
Guarantor. The Guarantor and its subsidiaries, including the Obligors and
Renaissance Media LLC, are hereinafter referred to as the "Company."
 
  The form and terms of the New Notes are the same as the form and terms of the
Old Notes except that (i) the issuance of the New Notes will have been
registered under the Securities Act and, therefore, the New Notes will not bear
legends restricting the transfer thereof and (ii) holders of the New Notes will
not be entitled to certain rights of holders of Old Notes under the
Registration Rights Agreement (as defined herein). The New Notes will evidence
the same debt as the Old Notes (which they replace) and will be issued under
and be entitled to the benefits of the Indenture, dated as of April 9, 1998
(the "Indenture"), by and among the Obligors, the Guarantor and United States
Trust Company of New York, as Trustee, governing the Old Notes. See "The
Exchange Offer" and "Description of the Notes."
 
  The Obligors and the Guarantor will accept for exchange any and all Old Notes
that are validly tendered on or prior to 5:00 p.m., New York City time, on the
Expiration Date. The Exchange Offer is not conditioned upon any minimum
aggregate principal amount of Old Notes being tendered for exchange. However,
the Exchange Offer is subject to certain conditions which may be waived by the
Obligors and the Guarantor and to the terms and provisions of the Registration
Rights Agreement (as defined herein). Old Notes may be tendered only in
denominations of $1,000 and integral multiples thereof. The Exchange Offer will
expire at 5:00 p.m., New York City time, on      , 1998, unless the Obligors,
in their sole discretion, extend the Exchange Offer (as it may be so extended,
the "Expiration Date"), in which case the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is extended. Old Notes
tendered pursuant to the Exchange Offer may be withdrawn at any time prior to
5:00 p.m., New York City time on the business day prior to the Expiration Date;
otherwise such tenders are irrevocable.
 
  SEE "RISK FACTORS" BEGINNING ON PAGE 20 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.
 
                                  -----------
 
 THESE SECURITIES HAVE NOT BEEN APPROVED  OR DISAPPROVED BY THE SECURITIES AND
  EXCHANGE  COMMISSION  OR  ANY  STATE  SECURITIES  COMMISSION  NOR  HAS  THE
   SECURITIES  AND EXCHANGE  COMMISSION OR  ANY STATE SECURITIES  COMMISSION
    PASSED  UPON   THE  ACCURACY  OR  ADEQUACY  OF  THIS   PROSPECTUS.  ANY
      REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
                                  -----------
 
                                        (Cover page continued on following page)
 
                  The date of this Prospectus is      , 1998.

<PAGE>
 
                              [ALTERNATE PAGE 1]
 
(Cover page continued)
 
  This Prospectus is to be used by Morgan Stanley & Co. Incorporated ("Morgan
Stanley") in connection with offers and sales of the New Notes in market-
making transactions at negotiated prices related to prevailing market prices
at the time of sale. Morgan Stanley may act as principal or as agent in such
transactions. The Obligors will receive no portion of the proceeds of the
sales of such Notes. If Morgan Stanley conducts any market-making activities,
it may be required to deliver a "market-making prospectus" when effecting
offers and sales in the Notes because of the equity ownership of the Obligors
and the Guarantor by Morgan Stanley Capital Partners III, L.P. ("MSCP III"),
Morgan Stanley Capital Investors, L.P. ("MSCI"), MSCP III 892 Investors, L.P.
("MSCP Investors" and, collectively, with its affiliates, MSCP III, MSCI and
their respective affiliates, the "Morgan Stanley Entities"), all of which are
affiliates of Morgan Stanley. As of March 31, 1998, the Morgan Stanley
Entities owned in the aggregate approximately 87.6% of the outstanding equity
of the Obligors and the Guarantor. For as long as a market-making prospectus
is required to be delivered, the ability of Morgan Stanley to make a market in
the Notes may, in part, be dependent on the ability of the Obligors to
maintain a current market-making prospectus.
                               ----------------
 
 
                              TABLE OF CONTENTS
 

<TABLE>
<S>                                      <C>                                
Prospectus Summary...................    Legislation and Regulation.........    
The Company..........................    Management.........................    
Risk Factors.........................    Certain Relationships and Related      
Use of Proceeds......................     Transactions......................    
Capitalization.......................    Principal Securityholders..........    
Selected Financial and Other Data....    The Exchange Offer.................    
Proforma Financial Data..............    Description of the Notes...........    
Management's Discussion and Analysis     Plan of Distribution...............    
 of Financial Condition and Results      Legal Matters......................    
 of Operations.......................    Independent Auditors...............    
Recent Developments..................    Available Information..............    
Business.............................    Index to Financial Statements......    
</TABLE>

 
  THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). ALL STATEMENTS REGARDING THE
EXPECTED FINANCIAL POSITION, BUSINESS AND FINANCING PLANS OF THE OBLIGORS AND
THE GUARANTOR ARE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE OBLIGORS AND THE
GUARANTOR BELIEVE THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING
STATEMENTS ARE REASONABLE, THEY CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS
WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM SUCH EXPECTATIONS ("CAUTIONARY STATEMENTS")
ARE DISCLOSED IN THIS PROSPECTUS, INCLUDING, WITHOUT LIMITATION, IN
CONJUNCTION WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS
AND UNDER "RISK FACTORS." ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING
STATEMENTS ATTRIBUTABLE TO THE OBLIGORS, THE GUARANTOR, THEIR RESPECTIVE
SUBSIDIARIES OR PERSONS ACTING ON BEHALF OF ANY OF THEM ARE EXPRESSLY
QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS.
 

<PAGE>
 
                               [ALTERNATE PAGE 2]
                                 THE NEW NOTES
 
  The New Notes have been registered under the Securities Act and, therefore,
will not be subject to certain transfer restrictions and registration rights
and will not contain certain provisions providing for an increase in the
interest rate under certain circumstances relating to the Registration Rights
Agreement.
 
New Notes...................  $163,175,000 aggregate principal amount at
                              maturity ($100,011,589.25 initial Accreted Value)
                              of 10% Senior Discount Notes due 2008.
 
General.....................  The form and terms of the New Notes are the same
                              as the form and terms of the Old Notes (which
                              they replace) except that (i) the New Notes have
                              been registered under the Securities Act and,
                              therefore, will not bear legends restricting the
                              transfer thereof, and (ii) the holders of New
                              Notes will not be entitled to certain rights
                              under the Registration Rights Agreement,
                              including the provisions providing for an
                              increase in the interest rate on the Old Notes in
                              certain circumstances relating to the timing of
                              the Exchange Offer, which rights will terminate
                              when the Exchange Offer is consummated. See "The
                              Exchange Offer--Purpose and Effect of the
                              Exchange Offer." The New Notes will evidence the
                              same debt as the Old Notes and will be entitled
                              to the benefits of the Indenture. See
                              "Description of the Notes."
 
Maturity Date...............  April 15, 2008.
 
Yield and Interest..........  The Old Notes were originally sold at a
                              substantial discount from their principal amount
                              at maturity and there will not be any payment of
                              interest on the New Notes prior to October 15,
                              2003. For a discussion of the U.S. federal income
                              tax treatment of the New Notes under the original
                              issue discount rules, see "Certain United States
                              Federal Income Tax Consequences." The New Notes
                              will fully accrete to face value on April 15,
                              2003. From and after April 15, 2003, the New
                              Notes will bear interest, payable semi-annually
                              in cash, at a rate of 10% per annum on April 15
                              and October 15 of each year, commencing October
                              15, 2003.
 
Optional Redemption.........  The New Notes are redeemable, at the option of
                              the Obligors, in whole or in part, at any time on
                              or after April 15, 2003, initially at 105.000% of
                              their principal amount at maturity, plus accrued
                              interest, declining to 100% of their principal
                              amount at maturity, plus accrued interest, on or
                              after April 15, 2006. In addition, at any time
                              prior to April 15, 2001, the Obligors may redeem
                              up to 35% of the aggregate principal amount at
                              maturity of the Notes with the proceeds of one or
                              more sales of Capital Stock (other than
                              Disqualified Stock) of the Company or an Obligor,
                              at 110.000% of their Accreted Value on the
                              redemption date; provided, however, that after
                              any such redemption at least $106.0 million
                              aggregate principal amount at maturity of Notes
                              remains outstanding. See "Description of the
                              Notes--Optional Redemption."
 
Change of Control...........  Upon a Change of Control (as defined herein), the
                              Obligors will be required to make an offer to
                              purchase the New Notes at a purchase price equal
                              to 101% of their Accreted Value on the date of
                              purchase,

<PAGE>
 
                               [ALTERNATE PAGE 3]
 
                              PLAN OF DISTRIBUTION
 
  This Prospectus is to be used by Morgan Stanley in connection with offers and
sales of the Notes in market-making transactions at negotiated prices relating
to prevailing market prices at the time of sale. Morgan Stanley may act as
principal or agent in such transactions. Morgan Stanley has no obligation to
make a market in the Notes, and may discontinue its market-making activities at
any time without notice, at its sole discretion.
 
  There is currently no established public market for the Notes. The Obligors
do not currently intend to apply for listing of the Notes on any securities
exchange. Therefore, any trading that does develop will occur on the over-the-
counter market. The Obligors have been advised by Morgan Stanley that it
intends to make a market in the Notes but it has no obligation to do so and any
market-making may be discontinued at any time. No assurance can be given that
an active public market for the Notes will develop.
 
  Morgan Stanley acted as placement agent in connection with the original
private placement of the Old Notes and received a placement fee of $
million in connection therewith. Morgan Stanley is affiliated with entities
that beneficially own approximately 87.6% of the outstanding equity of the
Obligors and the Guarantor as of March 31, 1998.
 
  Although there are no agreements to do so, Morgan Stanley, as well as others,
may act as broker or dealer in connection with the sale of Notes contemplated
by this Prospectus and may receive fees or commissions in connection therewith.
 
  The Obligors have agreed to indemnify Morgan Stanley against certain
liabilities under the Securities Act or to contribute to payments that Morgan
Stanley may be required to make in respect of such liabilities.
 

<PAGE>
 

                                    PART II
                    INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13 OF FORM S-1 OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
 
* To be filed by amendment.
 
ITEM 14 OF FORM S-1 AND ITEM 20 OF FORM S-4: INDEMNIFICATION OF DIRECTORS AND
OFFICERS
 
  Section 102(b)(7) of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a corporation (in its original certificate of
incorporation or amendment thereto) may eliminate or limit the personal
liability of a director (or certain persons who, pursuant to the provisions of
the certificate of incorporation, exercise of perform duties conferred or
imposed upon directors by the DGCL) to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that
such provisions shall not eliminate or limit the liability of a director (i)
for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL (providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions) or (iv) for any
transaction from which the director derived an improper personal benefit.
Renaissance Capital's Certificate of Incorporation limits the liability of
directors thereof to the extent permitted by Section 102(b)(7) of the DGCL.
 
  Under Section 145 of the DGCL, in general, a corporation may indemnify its
directors, officers, employees or agents against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any action, suit or proceeding
brought by third parties to which they may be made parties by reason of their
being or having been directors, officers, employees or agents and shall so
indemnify such persons if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful.
 
  Section 18-108 of the Delaware Limited Liability Company Act provides that a
limited liability company may indemnify and hold harmless any member or
manager or other person from and against any and all claims and demands,
subject to such standards and restrictions, if any, as are set forth in its
limited liability company agreement.
 
ITEM 16 OF FORM S-1 AND ITEM 21 OF FORM S-4  EXHIBITS AND FINANCIAL DATA
SCHEDULES
 

<TABLE>
 <C>  <S>
  3.1 Certificate of Incorporation of Renaissance Media Capital Corporation and
      all amendments thereto.
  3.2 By-laws of Renaissance Media Capital Corporation.
  3.3 Certificate of Formation of Renaissance Media (Louisiana) LLC.
  3.4 Limited Liability Company Agreement dated as of March 20, 1998 of
      Renaissance Media (Louisiana) LLC.
  3.5 Certificate of Formation of Renaissance Media (Tennessee) LLC.
  3.6 Limited Liability Company Agreement dated as of March 20, 1998 of
      Renaissance Media (Tennessee) LLC.
  3.7 Certificate of Formation of Renaissance Media Group LLC.
  3.8 Limited Liability Company Agreement dated as of March 20, 1998 of
      Renaissance Media Group LLC.
  4.1 Indenture dated as of April 9, 1998 by and among Renaissance Media
      (Louisiana) LLC, Renaissance Media (Tennessee) LLC, Renaissance Media
      Capital Corporation, Renaissance Media Group LLC and United States Trust
      Company of New York, as Trustee.
  4.2 Registration Rights agreement dated April 6, 1998 among Renaissance Media
      Group LLC, Renaissance Media (Louisiana) LLC, Renaissance Media
      (Tennessee) LLC, Renaissance Media Capital Corporation and Morgan Stanley
      & Co. Incorporated.
  5.1 Opinion of Dow, Lohnes & Albertson, PLLC, regarding validity of the
      Notes.*
  8.1 Tax Opinion of Dow, Lohnes & Albertson, PLLC.*
</TABLE>

 
                                     II-1

<PAGE>
 

<TABLE>
 <C>   <S>
 10.1  Credit Agreement dated as of April 9, 1998 among Renaissance Media LLC,
       the Lenders party thereto, Morgan Stanley Senior Funding, Inc., as
       Syndication Agent and Arranger, CIBC, Inc., as Documentation Agent, and
       Bankers Trust Company, as Administrative Agent.
 10.2  Asset Purchase Agreement dated as of November 14, 1997, as amended by
       the Letter Agreement dated December 11, 1997, the Letter Agreement dated
       December 29, 1997, the Letter Agreement dated January 13, 1998, the
       Letter Agreement dated March 5, 1998, and the Letter Agreement dated
       April 9, 1998, between TWI Cable Inc. and Renaissance Media LLC (as
       assignee of Renaissance Media Holdings LLC).
 10.3  Program Management Agreement, dated as of April 9, 1998, between
       Renaissance Media LLC and Time Warner Cable.
 10.4  CSG Master Subscriber Management System Agreement, dated as of March 28,
       1998, between CGS Systems International, Inc. and Renaissance Media LLC.
 10.5  Social Contract approved by the Federal Communications Commission (the
       "FCC") on November 30, 1995 and entered into between the FCC and Time
       Warner Entertainment Company, L.P., TWI Cable Inc. and Time Warner
       Entertainment--Advance/Newhouse Partnership, or any subsidiary, division
       or affiliate thereof.*
 10.6  Employment Agreement dated April 9, 1998 between Renaissance Media LLC
       and Fred Schulte.
 10.7  Employment Agreement dated April 9, 1998 between Renaissance Media LLC
       and Rodney Cornelius.
 10.8  Employment Agreement dated April 9, 1998 between Renaissance Media LLC
       and Michael J. Egan.
 10.9  Employment Agreement dated April 9, 1998 between Renaissance Media LLC
       and Darlene Fedun.
 10.10 Employment Agreement dated April 9, 1998 between Renaissance Media LLC
       and Mark Halpin.
 10.11 Employment Agreement dated April 9, 1998 between Renaissance Media LLC
       and David L. Testa.
 10.12 Renaissance Media LLC Annual Executive Bonus Incentive Plan.
 10.13 Exclusivity Agreement dated as of April 9, 1998 among Morgan Stanley
       Capital Partners III, L.P., MSCP III 892 Investors, L.P., Morgan Stanley
       Capital Investors, L.P., Rodney Cornelius, Michael J. Egan, Darlene
       Fedun, Mark Halpin, Fred Schulte and David L. Testa.
 10.14 St. Tammany Parish, Louisiana, Police Jury Ordinance Calendar No. 3081,
       Ordinance Police Jury Series No. 98-2821.*
 10.15 City of Covington, Louisiana, Resolution No. 98-03.
 10.16 City of Slidell, Louisiana, Resolution R98-04.
 10.17 St. James Parish, Louisiana, Council Resolution 98-3.
 10.18 Assumption Parish, Louisiana, Police Jury Resolution.
 10.19 City of Eunice, Louisiana, Resolution No. 0398(E).
 10.20 City of Opelousas, Louisiana, Resolution No. 13 of 1998.
 10.21 St. Landry Parish, Louisiana, Excerpt from the Minutes of a Police Jury
       Meeting, February 9th, 1998.
 10.22 City of Jackson, Tennessee, Resolution No. 98-5.
 10.23 County of Madison, Tennessee, Resolution.
 10.24 City of Newbern, Tennessee, Resolution.
 10.25 City of Selmer, Tennessee, Resolution No. 0398.
 10.26 City of Thibodaux, Louisiana, Resolution No. 656.
 21    Subsidiaries of Registrants.
 23.1  Consent of Ernst & Young LLP.
       Consent of Dow, Lohnes and Albertson, PLLC (included in Exhibit 5.1 and
 23.2  Exhibit 5.8).*
 24.1  Powers of attorney of directors and officers (included as part of
       signature pages).
</TABLE>

 
                                      II-2

<PAGE>
 

<TABLE>
<S>   <C>
25.1  Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of the
      United States Trust Company of New York, as Trustee for the Notes.
99.1  Letter of Transmittal.*
99.2  Tender Instructions.*
99.3  Notice of Guaranteed Delivery.*
</TABLE>

- --------
* To be filed by amendment.
 
ITEM 17 OF FORM S-1 AND ITEM 22 OF FORM S-4 UNDERTAKINGS
 
  Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions or otherwise, the Registrants have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of
expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrants will, unless in the opinion
of their counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by them is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
 
  The undersigned registrant hereby undertakes:
 
    (1)To file, during any period in which offers or sales are being made, a
  post-effective amendment to this registration statement;
 
      (i)To include any prospectus required by Section 10(a)(3) of the
    Securities Act of 1933;
 
      (ii)To reflect in the prospectus any facts or events arising after
    the effective date of the registration statement (or the most recent
    post-effective amendment thereof) which, individually or in the
    aggregate, represent a fundamental change in the information set forth
    in the registration statement.
 
      (iii)To include any material information with respect to the plan of
    distribution not previously disclosed in the registration statement or
    any material change to such information in the registration statement;
 
    (2)That, for the purpose of determining any liability under the
  Securities Act of 1933, each such post-effective amendment shall be deemed
  to be a new registration statement relating to the securities offered
  therein, and the offering of such securities at that time shall be deemed
  to be the initial bona fide offering thereof.
 
    (3)To remove from registration by means of a post-effective amendment any
  of the securities which remain unsold at the termination of the offering.
 
                                     II-3

<PAGE>
 

                                  SIGNATURES
 
  Pursuant to the requirements of the Securities Act of 1933, as amended,
Renaissance Media Group LLC has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized on June 12,
1998.
 
                                          RENAISSANCE MEDIA GROUP LLC
 
                                                     /s/ Fred Schulte
                                          By: _________________________________
                                             Fred Schulte
                                             President and Chief Executive
                                            Officer
 
                                          RENAISSANCE MEDIA (LOUISIANA) LLC
 
                                                     /s/ Fred Schulte
                                          By: _________________________________
                                             Fred Schulte
                                             President and Chief Executive
                                            Officer
 
                                          RENAISSANCE MEDIA (TENNESSEE) LLC
 
                                                     /s/ Fred Schulte
                                          By: _________________________________
                                             Fred Schulte
                                             President and Chief Executive
                                            Officer
 
                                          RENAISSANCE MEDIA CAPITAL
                                           CORPORATION
 
                                                     /s/ Fred Schulte
                                          By: _________________________________
                                             Fred Schulte
                                             President and Chief Executive
                                            Officer
 
 
                                     II-4

<PAGE>
 
                               POWER OF ATTORNEY
 
  We, the undersigned Directors, Representatives and Officers of Renaissance
Media Group LLC, Renaissance Media (Louisiana) LLC, Renaissance Media
(Tennessee) LLC and Renaissance Media Capital Corporation and each of us, do
hereby constitute and appoint Fred Schulte and Mark Halpin, or either of them,
our true and lawful attorneys and agents, each with power of substitution, to
do any and all acts and things in our name and on our behalf in our capacities
as directors and officers and to execute any and all instruments for us and in
our names in the capacities indicated below, which said attorneys and agents,
or either of them, may deem necessary or advisable to enable said corporation
to comply with the Securities Act of 1933, as amended, and any rules,
regulations, and requirements of the Securities and Exchange Commission, in
connection with this Registration Statement, including specifically but
without limitation, power and authority to sign for us, or any of us, in our
names in the capacities indicated below, any and all amendments (including
post-effective amendments) hereto; and we do hereby ratify and confirm all
that said attorneys and agents, or their substitute or substitutes, or either
of them, shall do or cause to be done by virtue thereof.
 
  Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons on
behalf of the Registrants and in the capacities and on the dates indicated.
 
                                       ---------------------------------------
                                       Fred Schulte
                                       President, Chief Executive Officer,
                                       Chairman and a Representative of
                                       Renaissance Media Group LLC,
                                       Renaissance Media (Louisiana) LLC and
                                       Renaissance Media (Tennessee) LLC and
                                       President, Chief Executive Officer,
                                       Chairman and a Director of Renaissance
                                       Media Capital Corporation (Principal
                                       Executive Officer of Renaissance Media
                                       Group LLC, Renaissance Media
                                       (Louisiana) LLC, Renaissance Media
                                       (Tennessee) LLC and Renaissance Media
                                       Capital Corporation)
 
                                       ---------------------------------------
                                       Mark Halpin
                                       Executive Vice President, Chief
                                       Financial Officer and Treasurer of
                                       Renaissance Media Group LLC,
                                       Renaissance Media (Louisiana) LLC,
                                       Renaissance Media (Tennessee) LLC and
                                       Renaissance Media Capital Corporation
                                       (Principal Financial Officer and
                                       Principal Accounting Officer of
                                       Renaissance Media Group LLC,
                                       Renaissance Media (Louisiana) LLC,
                                       Renaissance Media (Tennessee) LLC and
                                       Renaissance Media Capital Corporation)
 
 
                                     II-5

<PAGE>
 

To the Board of Directors of
 TWI Cable Inc.
 
  We have audited the combined balance sheets of the Picayune MS, LaFourche
LA, St. Tammany LA, St. Landry LA, Pointe Coupee LA, and Jackson TN cable
television systems, (collectively, the "Combined Systems") included in TWI
Cable Inc. ("TWI Cable'), as of December 31, 1996 and 1997, and the related
combined statements of operations, changes in net assets and cash flows for
the years then ended, and we have audited the combined statements of
operations and cash flows for the year ended December 31, 1995 of the
Predecessor Combined Systems, and have issued our reports thereon dated March
16, 1998 (included elsewhere in this Registration Statement). Our audits
included the financial statement schedule listed in Item 21 of this
Registration Statement. This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
 
  In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
 
                                          Ernst & Young LLP
 
New York, New York
March 16, 1998

 
                                     II-6

<PAGE>
 
                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
 
           PICAYUNE MS, LAFOURCHE LA, ST. TAMMANY LA, ST. LANDRY LA,
           POINTE COUPEE LA, AND JACKSON TN CABLE TELEVISION SYSTEMS
                          (INCLUDED IN TWI CABLE INC.)
 

<TABLE>
<CAPTION>
                         BALANCES AT  ADDITIONS CHARGED
                         BEGINNING OF   TO COSTS AND                  BALANCE AT END
                            PERIOD        EXPENSES      DEDUCTIONS(1)   OF PERIOD
                         ------------ ----------------- ------------- --------------
<S>                      <C>          <C>               <C>           <C>
For the three months
 ended March 31,
 1998 (unaudited)
Allowance for
 receivables............   $116,000       $ 64,000        $ (64,000)     $116,000
                           ========       ========        =========      ========
For the year ended
 December 31, 1997
Allowance for
 receivables............   $ 71,000       $471,000        $(426,000)     $116,000
                           ========       ========        =========      ========
For the year ended
 December 31, 1996
Allowance for
 receivables............   $ 84,000       $398,000        $(411,000)     $ 71,000
                           ========       ========        =========      ========
- ------------------------------------------------------------------------------------
For the year ended
 December 31, 1995
 (predecessor)
Allowance for
 receivables............   $ 61,000       $396,000        $(373,000)     $ 84,000
                           ========       ========        =========      ========
</TABLE>

- --------
(1) Represents the write-off of uncollectible accounts, net of recoveries.
 
                                      II-7





<PAGE>
 
                                                                     EXHIBIT 3.1


                         CERTIFICATE OF INCORPORATION

                                      OF

                     RENAISSANCE MEDIA CAPITAL CORPORATION

                                   * * * * *

     FIRST:  The name of the Corporation is Renaissance Media Capital
Corporation.

     SECOND:  The address of its registered office in the State of Delaware is
1013 Centre Road, City of Wilmington, County of New Castle, Delaware 19805. The
name of its registered agent at such address is Corporation Service Company.

     THIRD:  The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware as the same exists or may hereafter be amended
("Delaware Law").

     FOURTH:  The total number of shares of stock which the Corporation shall
have authority to issue is 3,000, consisting of 2,000 shares of Common Stock,
par value $.01 per share (the "Common Stock"), and 1,000 shares of Preferred
Stock, par value $.01 per share (the "Preferred Stock").

     The Board of Directors is hereby empowered to authorize by resolution or
resolutions from time to time the issuance of one or more classes or series of
Preferred Stock and to fix the designations, powers, preferences and relative,
participating, optional or other rights, if any, and the qualifications,
limitations or
 restrictions thereof, if any, with respect to each such class or
series of Preferred Stock and the number of shares constituting each such class
or series, and to increase or decrease the number of shares of any such class or
series to the extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time.

<PAGE>
 
     FIFTH:  The name and mailing address of the incorporator are:


Name                                 Mailing Address
- ----                                 ---------------
Eric R. Dann                         Davis Polk & Wardwell
                                     450 Lexington Avenue
                                     New York, New York 10017

The power of the incorporator as such shall terminate upon the filing of this
Certificate of Incorporation.

     SIXTH:  The name and mailing address of the person who is to serve as
director until the first annual meeting of stockholders or until his successors
are elected and qualified are:

Name                                 Mailing Address
- ----                                 ---------------
Fred Schulte                         One Cablevision Center
                                     Suite 100
                                     Ferndale, NY 12734

     SEVENTH:  The Board of Directors shall have the power to adopt, amend or
repeal the bylaws of the Corporation.

     EIGHTH:  Election of directors need not be by written ballot unless the
bylaws of the Corporation so provide.

     NINTH:  (1) A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director to the fullest extent permitted by Delaware Law.

     (2)(a)  Each person (and the heirs, executors or administrators of such
person) who was or is a party or is threatened to be made a party to, or is
involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such person is or was a director of the Corporation or is or was serving at
the request of the Corporation as a director of another corporation,
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the Corporation to the fullest extent permitted by Delaware
Law.  The right to indemnification conferred in this ARTICLE NINTH shall also
include the right to be paid by the Corporation the expenses incurred in
connection with any such proceeding in advance of its final disposition to the
fullest extent authorized by Delaware Law. 

                                       2

<PAGE>
 
The right to indemnification conferred in this ARTICLE NINTH shall be a contract
right.

     (b)  The Corporation may, by action of its Board of Directors, provide
indemnification to such of the officers, employees and agents of the Corporation
to such extent and to such effect as the Board of Directors shall determine to
be appropriate and authorized by Delaware Law.

     (3)  The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability or loss
incurred by such person in any such capacity or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him or
her against such liability under Delaware Law.

     (4)  The rights and authority conferred in this ARTICLE NINTH shall not be
exclusive of any other right which any person may otherwise have or hereafter
acquire.

     (5)  Neither the amendment nor repeal of this ARTICLE NINTH, nor the
adoption of any provision of this Certificate of Incorporation or the bylaws of
the Corporation, nor, to the fullest extent permitted by Delaware Law, any
modification of law, shall eliminate or reduce the effect of this ARTICLE NINTH
in respect of any acts or omissions occurring prior to such amendment, repeal,
adoption or modification.

     TENTH:  The Corporation reserves the right to amend this Certificate of
Incorporation in any manner permitted by Delaware Law and, with the sole
exception of those rights and powers conferred under the above ARTICLE NINTH,
all rights and powers conferred herein on stockholders, directors and officers,
if any, are subject to this reserved power.

                                       3

<PAGE>
 
     IN WITNESS WHEREOF, I have hereunto signed my name this 11th day of March,
1998.




                           /s/ Eric Dann
                           ------------------------------------------
                           Eric Dann



                                       4



<PAGE>
 

                                                                     EXHIBIT 3.2



                                     BYLAWS


                                       OF


                     RENAISSANCE MEDIA CAPITAL CORPORATION


                                   * * * * *



                                   ARTICLE 1

                                    Offices

     Section 1.01.  Registered Office.  The registered office shall be in the
City of Wilmington, County of New Castle, State of Delaware.

     Section 1.02.  Other Offices.  The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.

     Section 1.03.  Books.  The books of the Corporation may be kept within or
without of the State of Delaware as the Board of Directors may from time to time
determine or the business of the Corporation may require.



                                   ARTICLE 2

                           Meetings of Stockholders

     Section 2.01.  Time and Place of Meetings.  All meetings of stockholders
shall be held at such place, either within or without the State of Delaware, on
such date and at such time as may be determined from time to time by the Board
of Directors (or the Chairman in the absence of a designation by the Board of
Directors).

     Section 2.02.  Annual Meetings.  Annual meetings of stockholders,
commencing with the year 1998, shall be held to elect the Board of Directors and
transact such other business as may properly be brought before the meeting.


<PAGE>
 
     Section 2.03.  Special Meetings.  Special meetings of stockholders may be
called by the Board of Directors or the chairman of the Board and shall be
called by the Secretary at the request in writing of holders of record of a
majority of the outstanding capital stock of the Corporation entitled to vote.
Such request shall state the purpose or purposes of the proposed meeting.

     Section 2.04.  Notice of Meetings and Adjourned Meetings; Waivers of
Notice. (a) Whenever stockholders are required or permitted to take any action
at a meeting, a written notice of the meeting shall be given which shall state
the place, date and hour of the meeting, and, in the case of a special meeting,
the purpose or purposes for which the meeting is called. Unless otherwise
provided by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended ("Delaware Law"), such notice shall be given
not less than 10 nor more than 60 days before the date of the meeting to each
stockholder of record entitled to vote at such meeting. Unless these bylaws
otherwise require, when a meeting is adjourned to another time or place (whether
or not a quorum is present), notice need not be given of the adjourned meeting
if the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting, the Corporation may transact any
business which might have been transacted at the original meeting. If the
adjournment is for more than 30 days, or after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.

     (b)  A written waiver of any such notice signed by the person entitled
thereto, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends the meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Business transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice.

     Section 2.05.  Quorum.  Unless otherwise provided under the certificate of
incorporation or these bylaws and subject to Delaware Law, the presence, in
person or by proxy, of the holders of a majority of the outstanding capital
stock of the Corporation entitled to vote at a meeting of stockholders shall
constitute a quorum for the transaction of business.

     Section 2.06.  Voting.   (a)  Unless otherwise provided in the certificate
of incorporation and subject to Delaware Law, each stockholder shall be entitled
to one vote for each outstanding share of capital stock of the Corporation held
by such stockholder. Unless otherwise provided in Delaware Law, the certificate
of 

                                       2

<PAGE>
 
incorporation or these bylaws, the affirmative vote of a majority of the shares
of capital stock of the Corporation present, in person or by proxy, at a meeting
of stockholders and entitled to vote on the subject matter shall be the act of
the stockholders.

     (b)  Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to a corporate action in writing without a meeting
may authorize another person or persons to act for him by proxy, but no such
proxy shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period.

     Section 2.07.  Action by Consent.  (a)  Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders, or any action which may be taken at any annual
or special meeting of stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding capital
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted and shall be delivered to the Corporation by
delivery to its registered office in Delaware, its principal place of business,
or an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing.

     (b)  Every written consent shall bear the date of signature of each
stockholder who signs the consent, and no written consent shall be effective to
take the corporate action referred to therein unless, within 60 days of the
earliest dated consent delivered in the manner required by this section and
Delaware Law to the Corporation, written consents signed by a sufficient number
of holders to take action are delivered to the Corporation by delivery to its
registered office in Delaware, its principal place of business, or an officer or
agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered mail, return
receipt requested.

     Section 2.08.  Organization.  At each meeting of stockholders, the Chairman
of the Board, if one shall have been elected, (or in his absence or if one shall
not have been elected, the President) shall act as chairman of the meeting. The
Secretary (or in his absence or inability to act, the person whom the chairman

                                       3

<PAGE>
 
of the meeting shall appoint secretary of the meeting) shall act as secretary of
the meeting and keep the minutes thereof.

     Section 2.09.  Order of Business.  The order of business at all meetings of
stockholders shall be as determined by the chairman of the meeting.



                                   ARTICLE 3

                                   Directors

     Section 3.01.  General Powers.  Except as otherwise provided in Delaware
Law or the certificate of incorporation, the business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors.

     Section 3.02.  Number, Election and Term of Office.  The number of
directors which shall constitute the whole Board shall be fixed from time to
time by resolution of the Board of Directors but shall be at least one but not
more than three. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 3.12 herein, and each director so
elected shall hold office until his successor is elected and qualified or until
his earlier death, resignation or removal. Directors need not be stockholders.

     Section 3.03.  Quorum and Manner of Acting.  Unless the certificate of
incorporation or these bylaws require a greater number, a majority of the total
number of directors shall constitute a quorum for the transaction of business,
and the affirmative vote of a majority of the directors present at meeting at
which a quorum is present shall be the act of the Board of Directors. When a
meeting is adjourned to another time or place (whether or not a quorum is
present), notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting, the Board of Directors may transact any business which
might have been transacted at the original meeting. If a quorum shall not be
present at any meeting of the Board of directors the directors present thereat
may adjourn the meeting, from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.

     Section 3.04.  Time and Place of Meetings.  The Board of Directors shall
hold its meetings at such place, either within or without the State of Delaware,
and at such time as may be determined from time to time by the Board of
Directors (or the Chairman in the absence of a determination by the Board of
Directors).

                                       4

<PAGE>
 
     Section 3.05.  Annual Meeting.  The Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable after each annual meeting of stockholders, on
the same day and at the same place where such annual meeting shall be held.
Notice of such meeting need not be given. In the event such annual meeting is
not so held, the annual meeting of the Board of Directors may be held at such
place either within or without the State of Delaware, on such date and at such
time as shall be specified in a notice thereof given as hereinafter provided in
Section 3.07 herein or in a waiver of notice thereof signed by any director who
chooses to waive the requirement of notice.

     Section 3.06.  Regular Meetings.  After the place and time of regular
meetings of the Board of Directors shall have been determined and notice thereof
shall have been once given to each member of the Board of Directors, regular
meetings may be held without further notice being given.

     Section 3.07.  Special Meetings.  Special meetings of the Board of
Directors may be called by the Chairman of the Board or the President and shall
be called by the Chairman of the Board, President or Secretary on the written
request of three directors. Notice of special meetings of the Board of Directors
shall be given to each director at least three days before the date of the
meeting in such manner as is determined by the Board of Directors.

     Section 3.08.  Committees.  The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the bylaws of the Corporation; and
unless the resolution of the Board of Directors or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock. Each
committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required.

                                       5

<PAGE>
 
     Section 3.09.  Action by Consent.  Unless otherwise restricted by the
certificate of incorporation or these bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee.

     Section 3.10.  Telephonic Meetings.  Unless otherwise restricted by the
certificate of incorporation or these bylaws, members of the Board of Directors,
or any committee designated by the Board of Directors, may participate in a
meeting of the Board of Directors, or such committee, as the case may be, by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.

     Section 3.11.  Resignation.  Any director may resign at any time by giving
written notice to the Board of Directors or to the Secretary of the Corporation.
The resignation of any director shall take effect upon receipt of notice thereof
or at such later time as shall be specified in such notice; and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.

     Section 3.12.  Vacancies.  Unless otherwise provided in the certificate of
incorporation, vacancies and newly created directorships resulting from any
increase in the authorized number of directors elected by all the stockholders
having the right to vote as a single class may be filled by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more directors by the certificate of
incorporation, vacancies and newly created directorships of such class or
classes or series may be filled by a majority of directors elected by such class
or classes or series thereof then in office, or by a sole remaining director so
elected. Each director so chosen shall hold office until his successor is
elected and qualified, or until his earlier death, resignation or removal. If
there are no directors in office, then an election of directors may be held in
accordance with Delaware Law. Unless otherwise provided in the certificate of
incorporation, when one or more directors shall resign from the Board, effective
at a future date, a majority of the directors then in office, including those
who have so resigned, shall have the power to fill such vacancy or vacancies,
the vote thereon to take effect when such resignation or resignations shall
become effective, and each director so chosen shall hold office as provided in
the filling of other vacancies.

                                       6

<PAGE>
 
     Section 3.13.  Removal.  Any director or the entire Board of Directors may
be removed, with or without cause, at any time by the affirmative vote of the
holders of a majority of the outstanding capital stock of the Corporation
entitled to vote and the vacancies thus created may be filled in accordance with
Section 3.12 herein.

     Section 3.14.  Compensation.  Unless otherwise restricted by the
certificate of incorporation or these bylaws, the Board of Directors shall have
authority to fix the compensation of directors, including fees and reimbursement
of expenses.



                                   ARTICLE 4

                                   Officers

     Section 4.01.  Principal Officers.  The principal officers of the
Corporation shall be a President, one or more Vice Presidents, a Treasurer and a
Secretary who shall have the duty, among other things, to record the proceedings
of the meetings of stockholders and directors in a book kept for that purpose.
The Corporation may also have such other principal officers, including one or
more Controllers, as the Board may in its discretion appoint. One person may
hold the offices and perform the duties of any two or more of said offices,
except that no one person shall hold the offices and perform the duties of
President and Secretary.

     Section 4.02.  Election, Term of Office and Remuneration.  The principal
officers of the Corporation shall be elected annually by the Board of Directors
at the annual meeting thereof. Each such officer shall hold office until his
successor is elected and qualified, or until his earlier death, resignation or
removal. The remuneration of all officers of the Corporation shall be fixed by
the Board of Directors. Any vacancy in any office shall be filled in such manner
as the Board of Directors shall determine.

     Section 4.03.  Subordinate Officers.  In addition to the principal officers
enumerated in Section 4.01 herein, the Corporation may have one or more
Assistant Treasurers, Assistant Secretaries and Assistant Controllers and such
other subordinate officers, agents and employees as the Board of Directors may
deem necessary, each of whom shall hold office for such period as the Board of
Directors may from time to time determine. The Board of Directors may delegate
to any principal officer the power to appoint and to remove any such subordinate
officers, agents or employees.

                                       7

<PAGE>
 
     Section 4.04.  Removal.  Except as otherwise permitted with respect to
subordinate officers, any officer may be removed, with or without cause, at any
time, by resolution adopted by the Board of Directors.

     Section 4.05.  Resignations.  Any officer may resign at any time by giving
written notice to the Board of Directors (or to a principal officer if the Board
of Directors has delegated to such principal officer the power to appoint and to
remove such officer). The resignation of any officer shall take effect upon
receipt of notice thereof or at such later time as shall be specified in such
notice; and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

     Section 4.06.  Powers and Duties.  The officers of the Corporation shall
have such powers and perform such duties incident to each of their respective
offices and such other duties as may from time to time be conferred upon or
assigned to them by the Board of Directors.



                                   ARTICLE 5

                              General Provisions

     Section 5.01.  Fixing the Record Date.  (a)  In order that the Corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than 60 nor less than 10 days before the
date of such meeting. If no record date is fixed by the Board of Directors, the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided that the Board of Directors may fix a new record date for the adjourned
meeting.

     (b)  In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than 10 days after the date upon
which the resolution fixing

                                       8

<PAGE>
 
the record date is adopted by the Board of Directors. If no record date has been
fixed by the Board of Directors, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is required by Delaware Law, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation by delivery to its
registered office in Delaware, its principal place of business, or an officer or
agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered mail, return
receipt requested. If no record date has been fixed by the Board of Directors
and prior action by the Board of Directors is required by Delaware Law, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action.

     (c)  In order that the Corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights or the stockholders entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than 60 days prior to such
action. If no record date is fixed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.

     Section 5.02.  Dividends.  Subject to limitations contained in Delaware Law
and the certificate of incorporation, the Board of Directors may declare and pay
dividends upon the shares of capital stock of the Corporation, which dividends
may be paid either in cash, in property or in shares of the capital stock of the
Corporation.

     Section 5.03.  Year.   The fiscal year of the Corporation shall commence on
January 1 and end on December 31 of each year.

     Section 5.04.  Corporate Seal.  The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed, affixed or otherwise reproduced.

     Section 5.05.  Voting of Stock Owned by the Corporation.  The Board of
Directors may authorize any person, on behalf of the Corporation, to attend,
vote

                                       9

<PAGE>
 
at and grant proxies to be used at any meeting of stockholders of any
corporation (except this Corporation) in which the Corporation may hold stock.

     Section 5.06.  Amendments.  These bylaws or any of them, may be altered,
amended or repealed, or new bylaws may be made, by the stockholders entitled to
vote thereon at any annual or special meeting thereof or by the Board of
Directors.

                                       10



<PAGE>
 
                                                                     EXHIBIT 3.3

                           CERTIFICATE OF FORMATION

                                      OF

                       RENAISSANCE MEDIA (LOUISIANA) LLC


     This Certificate of Formation of Renaissance Media (Louisiana) LLC (the
"Company"), dated January 6, 1998, is being duly executed and filed by
Renaissance Media Holdings LLC, as an authorized person, to form a limited
liability company under the Delaware Limited Liability Company Act (6 Del. C.
                                                                      -------
(S)18-101, et seq.).
           ------   

     FIRST.  The name of the limited liability company formed hereby is
Renaissance Media (Louisiana) LLC.

     SECOND.  The address of the registered office of the Company in the State
of Delaware is c/o Corporation Service Company, 1013 Centre Road, City of
Wilmington, County of New Castle, Delaware  19805.

     THIRD.  The name and address of the registered agent for service of process
on the Company in the State of Delaware is Corporation Service Company, 1013
Centre Road, City of Wilmington, County of New Castle, Delaware  19805.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.
 

                                       RENAISSANCE MEDIA HOLDINGS LLC

 
                                       By: /s/ Mark W. Halpin
                                          ------------------------------------
                                       Name:  Mark W. Halpin
                                       Title: Executive Vice President and
                                              Chief Financial Officer





<PAGE>
 
                                                                     EXHIBIT 3.4

                      LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                       RENAISSANCE MEDIA (LOUISIANA) LLC


     This Limited Liability Company Agreement of Renaissance Media (Louisiana)
LLC, is entered into by Renaissance Media Group LLC ("Renaissance Media Group"),
as the sole member (the "Member").

     WHEREAS, on January 7, 1998 Renaissance Media (Louisiana) LLC (the
"Company") was formed as a Delaware limited liability company by Renaissance
Media Holdings LLC (the "Initial Member"), pursuant to and in accordance with
the Delaware Limited Liability Company Act (6 Del.C. (S) 18-101, et seq.) (the
                                              ------                          
"Act");

     WHEREAS, the Initial Member wishes to withdraw from the Company on the date
hereof; and

     WHEREAS, the Member wishes to continue the Company and to enter into a
Limited Liability Company Agreement with respect to the Company.

     NOW, THEREFORE, the party hereto agrees as follows:

     1.   Name.  The name of the limited liability company formed hereby is
"Renaissance Media (Louisiana) LLC" (the "Company").

     2.   Purpose.  The Company is formed for the object and purpose of, and the
nature of the business to be conducted and promoted by the Company is, engaging
in any lawful act or activity for which limited liability companies may be
formed under the Act and engaging in any and all activities
 necessary or
incidental to the foregoing.

     3.   Registered Office.  The address of the registered office of the
Company in the State of Delaware is c/o Corporation Service Company, 1013 Centre
Street, Wilmington, New Castle County, Delaware 19805.

     4.   Registered Agent.  The name and address of the registered agent of the
Company for service of process on the Company in the State of Delaware is

<PAGE>
 
Corporation Service Company, 1013 Centre Street, Wilmington, New Castle County,
Delaware 19805.

5.   Member.  The name and the business, residence or mailing address of the
Member are as follows:

     Name                              Address

     Renaissance Media Group LLC       One Cablevision Center
                                       Suite 100
                                       Ferndale, NY 12734

     6.   Powers.  The business and affairs of the Company shall be managed by
or under the direction of the Member, acting through a board of representatives
(the "Board of Representatives").  The Board of Representatives shall consist of
at least one representative (each, a "Representative") appointed by the Member;
provided that each such Representative must also be an officer, director,
employee or partner of the Member or a parent entity (direct or indirect) of
such Member. On all matters submitted to the Board of Representatives, each
Representative shall be entitled to cast one vote.  The Member may remove, with
or without cause, and replace any Representative.  Each Representative shall act
for the Member, as directed by the Member, for purposes of casting the votes of
the Member, acting by consent, taking any other actions pursuant to this
Agreement and making any election or decision to be made by the Member pursuant
to this Agreement.  The Member, by execution of this Agreement, agrees and
consents to the actions and decisions of each such Representative within the
scope of such Representative's authority as provided herein as if such actions
or decisions had been taken or made by the Member.

     The Member, acting through the Board of Representatives, shall have the
power to do any and all acts necessary, appropriate, proper, advisable,
incidental or convenient to or for the furtherance of the purposes described
herein, including all powers, statutory or otherwise, possessed by members under
the laws of the State of Delaware.  Renaissance Media Group is hereby designated
as an authorized person, within the meaning of the Act, to execute, deliver and
file the certificate of formation of the Company (and any amendments and/or
restatements thereof) and any other certificates (and any amendments and/or
restatements thereof) necessary for the Company to qualify to do business in a
jurisdiction in which the Company may wish to conduct business.

     7.   Capital Contribution.  The Member has contributed, or will contribute
concurrently with the execution of this Agreement, the following amount in cash
to the Company:

                                       2

<PAGE>
 
     Renaissance Media Group LLC         $      1,000
                                         ------------
                         Total:          $      1,000

     8.   Additional Contributions.  The Member may, but is not required to,
make any additional capital contribution to the Company.

     9.   Renaissance Media Holdings LLC.  Upon execution of this Agreement or a
counterpart of this Agreement, the Initial Member shall withdraw from the
Company.  Upon such withdrawal, the Member of the Company is authorized to, and
shall continue, the business of the Company without dissolution.  The parties
hereto acknowledge that the Initial Member's obligations will be fully
discharged upon its withdrawal from the Company.

     10.  Admission of Additional Members.  One or more additional members of
the Company may be admitted to the Company with the consent of the Member.

     11.  Liability of Member.  The Member shall not have any liability for the
obligations or liabilities of the Company except to the extent provided in the
Act.

     12.  Governing Law.  This Agreement shall be governed by, and construed
under, the laws of the State of Delaware, all rights and remedies being governed
by said laws.

                                       3

<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
has duly executed this Limited Liability Company Agreement as of the 20th day of
March, 1998.
 
                                     RENAISSANCE MEDIA GROUP LLC

                                     By: /s/ Fred Schulte
                                        ----------------------------------------
                                        Name:  Fred Schulte
                                        Title: Chief Executive Officer


ACKNOWLEDGMENT:

Effective upon the execution hereof by the party hereto, Renaissance Media
Holdings LLC hereby withdraws from the Company.


                                        RENAISSANCE MEDIA HOLDINGS LLC


                                        By: /s/ Fred Schulte
                                           -------------------------------------
                                           Name:  Fred Schulte
                                           Title: Chief Executive Officer

                                       4



<PAGE>
 
                                                                     EXHIBIT 3.5

                            CERTIFICATE OF FORMATION

                                       OF

                       RENAISSANCE MEDIA (TENNESSEE) LLC


     This Certificate of Formation of Renaissance Media (Tennessee) LLC (the
"Company"), dated January 6, 1998, is being duly executed and filed by
Renaissance Media Holdings LLC, as an authorized person, to form a limited
liability company under the Delaware Limited Liability Company Act (6 Del. C.
                                                                      -------
(S)18-101, et seq.).
           ------   

     FIRST.  The name of the limited liability company formed hereby is
Renaissance Media (Tennessee) LLC.

     SECOND.  The address of the registered office of the Company in the State
of Delaware is c/o Corporation Service Company, 1013 Centre Road, City of
Wilmington, County of New Castle, Delaware  19805.

     THIRD.  The name and address of the registered agent for service of process
on the Company in the State of Delaware is Corporation Service Company, 1013
Centre Road, City of Wilmington, County of New Castle, Delaware  19805.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.
 

                                       RENAISSANCE MEDIA HOLDINGS LLC


                                       By: /s/ Mark W. Halpin
                                          -----------------------------------
                                       Name:  Mark W. Halpin
                                       Title: Executive Vice President and
                                              Chief Financial Officer





<PAGE>
 
                                                                     EXHIBIT 3.6

                      LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                       RENAISSANCE MEDIA (TENNESSEE) LLC


     This Limited Liability Company Agreement of Renaissance Media (Tennessee)
LLC, is entered into by Renaissance Media Group LLC ("Renaissance Media Group"),
as the sole member (the "Member").

     WHEREAS, on January 7, 1998 Renaissance Media (Tennessee) LLC (the
"Company") was formed as a Delaware limited liability company by Renaissance
Media Holdings LLC (the "Initial Member"), pursuant to and in accordance with
the Delaware Limited Liability Company Act (6 Del.C. (S) 18-101, et seq.) (the
                                              ------                          
"Act");

     WHEREAS, the Initial Member wishes to withdraw from the Company on the date
hereof; and

     WHEREAS, the Member wishes to continue the Company and to enter into a
Limited Liability Company Agreement with respect to the Company.

     NOW, THEREFORE, the party hereto agrees as follows:

     1.   Name.  The name of the limited liability company formed hereby is
"Renaissance Media (Tennessee) LLC" (the "Company").

     2.   Purpose.  The Company is formed for the object and purpose of, and the
nature of the business to be conducted and promoted by the Company is, engaging
in any lawful act or activity for which limited liability companies may be
formed under the Act and engaging in any and all activities
 necessary or
incidental to the foregoing.

     3.   Registered Office.  The address of the registered office of the
Company in the State of Delaware is c/o Corporation Service Company, 1013 Centre
Street, Wilmington, New Castle County, Delaware 19805.

     4.   Registered Agent.  The name and address of the registered agent of the
Company for service of process on the Company in the State of Delaware is

<PAGE>
 
Corporation Service Company, 1013 Centre Street, Wilmington, New Castle County,
Delaware 19805.

     5.   Member.  The name and the business, residence or mailing address of
the Member are as follows:

     Name                                 Address

     Renaissance Media Group LLC          One Cablevision Center
                                          Suite 100
                                          Ferndale, NY 12734

     6.   Powers.  The business and affairs of the Company shall be managed by
or under the direction of the Member, acting through a board of representatives
(the "Board of Representatives").  The Board of Representatives shall consist of
at least one representative (each, a "Representative") appointed by the Member;
provided that each such Representative must also be an officer, director,
employee or partner of the Member or a parent entity (direct or indirect) of
such Member. On all matters submitted to the Board of Representatives, each
Representative shall be entitled to cast one vote.  The Member may remove, with
or without cause, and replace any Representative.  Each Representative shall act
for the Member, as directed by the Member, for purposes of casting the votes of
the Member, acting by consent, taking any other actions pursuant to this
Agreement and making any election or decision to be made by the Member pursuant
to this Agreement.  The Member, by execution of this Agreement, agrees and
consents to the actions and decisions of each such Representative within the
scope of such Representative's authority as provided herein as if such actions
or decisions had been taken or made by the Member.

     The Member, acting through the Board of Representatives, shall have the
power to do any and all acts necessary, appropriate, proper, advisable,
incidental or convenient to or for the furtherance of the purposes described
herein, including all powers, statutory or otherwise, possessed by members under
the laws of the State of Delaware.  Renaissance Media Group is hereby designated
as an authorized person, within the meaning of the Act, to execute, deliver and
file the certificate of formation of the Company (and any amendments and/or
restatements thereof) and any other certificates (and any amendments and/or
restatements thereof) necessary for the Company to qualify to do business in a
jurisdiction in which the Company may wish to conduct business.

     7.   Capital Contribution.  The Member has contributed, or will contribute
concurrently with the execution of this Agreement, the following amount in cash
to the Company:

                                       2

<PAGE>
 
     Renaissance Media Group LLC         $      1,000
                                         ------------
                         Total:          $      1,000

     8.   Additional Contributions.  The Member may, but is not required to,
make any additional capital contribution to the Company.

     9.   Renaissance Media Holdings LLC.  Upon execution of this Agreement or a
counterpart of this Agreement, the Initial Member shall withdraw from the
Company.  Upon such withdrawal, the Member of the Company is authorized to, and
shall continue, the business of the Company without dissolution.  The parties
hereto acknowledge that the Initial Member's obligations will be fully
discharged upon its withdrawal from the Company.

     10.  Admission of Additional Members.  One or more additional members of
the Company may be admitted to the Company with the consent of the Member.

     11.  Liability of Member.  The Member shall not have any liability for the
obligations or liabilities of the Company except to the extent provided in the
Act.

     12.  Governing Law.  This Agreement shall be governed by, and construed
under, the laws of the State of Delaware, all rights and remedies being governed
by said laws.

                                       3

<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
has duly executed this Limited Liability Company Agreement as of the 20th day of
March, 1998.
 
                                   RENAISSANCE MEDIA GROUP LLC

                                   By: /s/ Fred Schulte
                                      ------------------------------------------
                                      Name:  Fred Schulte
                                      Title: Chief Executive Officer


ACKNOWLEDGMENT:

Effective upon the execution hereof by the party hereto, Renaissance Media
Holdings LLC hereby withdraws from the Company.


                                      RENAISSANCE MEDIA HOLDINGS LLC


                                      By: /s/ Fred Schulte
                                         ---------------------------------------
                                         Name:  Fred Schulte
                                         Title: Chief Executive Officer

                                       4

<PAGE>
 
 
                                                                     EXHIBIT 3.5

                            CERTIFICATE OF FORMATION

                                       OF

                       RENAISSANCE MEDIA (TENNESSEE) LLC


     This Certificate of Formation of Renaissance Media (Tennessee) LLC (the
"Company"), dated January 6, 1998, is being duly executed and filed by
Renaissance Media Holdings LLC, as an authorized person, to form a limited
liability company under the Delaware Limited Liability Company Act (6 Del. C.
                                                                      -------
(S)18-101, et seq.).
           ------   

     FIRST.  The name of the limited liability company formed hereby is
Renaissance Media (Tennessee) LLC.

     SECOND.  The address of the registered office of the Company in the State
of Delaware is c/o Corporation Service Company, 1013 Centre Road, City of
Wilmington, County of New Castle, Delaware  19805.

     THIRD.  The name and address of the registered agent for service of process
on the Company in the State of Delaware is Corporation Service Company, 1013
Centre Road, City of Wilmington, County of New Castle, Delaware  19805.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.
 

                                       RENAISSANCE MEDIA HOLDINGS LLC


                                       By: /s/ Mark W. Halpin
                                          -----------------------------------
                                       Name:  Mark W. Halpin
                                       Title: Executive Vice President and
                                              Chief Financial Officer




<PAGE>
 
                                                                     EXHIBIT 3.7

                            CERTIFICATE OF FORMATION

                                       OF

                          RENAISSANCE MEDIA GROUP LLC


     This Certificate of Formation of Renaissance Media Group LLC (the
"Company"), dated March 11, 1998, is being duly executed and filed by
Renaissance Media Holdings LLC, as an authorized person, to form a limited
liability company under the Delaware Limited Liability Company Act (6 Del. C.
                                                                      -------
(S)18-101, et seq.).
           ------   

     FIRST.  The name of the limited liability company formed hereby is
Renaissance Media Group LLC.

     SECOND.  The address of the registered office of the Company in the State
of Delaware is c/o Corporation Service Company, 1013 Centre Road, City of
Wilmington, County of New Castle, Delaware  19805.

     THIRD.  The name and address of the registered agent for service of process
on the Company in the State of Delaware is Corporation Service Company, 1013
Centre Road, City of Wilmington, County of New Castle, Delaware  19805.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.
 

                                       RENAISSANCE MEDIA HOLDINGS LLC

 
                                       By: /s/ Fred Schulte
                                          -----------------------------------
                                       Name:  Fred Schulte
                                       Title: Chief Executive Officer





<PAGE>
 
                                                                     EXHIBIT 3.8

                      LIMITED LIABILITY COMPANY AGREEMENT

                                      OF

                          RENAISSANCE MEDIA GROUP LLC


     This Limited Liability Company Agreement of Renaissance Media Group LLC, is
entered into by Renaissance Media Holdings LLC ("Holdings"), as the sole member
(the "Member").

     The Member hereby forms a limited liability company pursuant to and in
accordance with the Delaware Limited Liability Company Act (6 Del.C. (S) 18-101,
                                                              ------            
et seq.) (the "Act"), and hereby agrees as follows:

     1.   Name.  The name of the limited liability company formed hereby is
"Renaissance Media Group LLC" (the "Company").

     2.   Purpose.  The Company is formed for the object and purpose of, and the
nature of the business to be conducted and promoted by the Company is, engaging
in any lawful act or activity for which limited liability companies may be
formed under the Act and engaging in any and all activities necessary or
incidental to the foregoing.

     3.   Registered Office.  The address of the registered office of the
Company in the State of Delaware is c/o Corporation Service Company, 1013 Centre
Street, Wilmington, New Castle County, Delaware 19805.

     4.   Registered Agent.  The name and address of the registered agent of the
Company for service of process on the Company in the State of Delaware is
Corporation
 Service Company, 1013 Centre Street, Wilmington, New Castle County,
Delaware 19805.

5.   Member.  The name and the business, residence or mailing address of the
Member are as follows:

     Name                              Address

     Renaissance Media Holdings LLC    One Cablevision Center
                                       Suite 100
                                       Ferndale, NY 12734

<PAGE>
 
     6.   Powers.  The business and affairs of the Company shall be managed by
or under the direction of the Member, acting through a board of representatives
(the "Board of Representatives"). The Board of Representatives shall consist of
at least one representative (each, a "Representative") appointed by the Member;
provided that each such Representative must also be an officer, director,
employee or partner of the Member or a parent entity (direct or indirect) of
such Member. On all matters submitted to the Board of Representatives, each
Representative shall be entitled to cast one vote. The Member may remove, with
or without cause, and replace any Representative. Each Representative shall act
for the Member, as directed by the Member, for purposes of casting the votes of
the Member, acting by consent, taking any other actions pursuant to this
Agreement and making any election or decision to be made by the Member pursuant
to this Agreement. The Member, by execution of this Agreement, agrees and
consents to the actions and decisions of each such Representative within the
scope of such Representative's authority as provided herein as if such actions
or decisions had been taken or made by the Member.

     The Member, acting through the Board of Representatives, shall have the
power to do any and all acts necessary, appropriate, proper, advisable,
incidental or convenient to or for the furtherance of the purposes described
herein, including all powers, statutory or otherwise, possessed by members under
the laws of the State of Delaware. Holdings is hereby designated as an
authorized person, within the meaning of the Act, to execute, deliver and file
the certificate of formation of the Company (and any amendments and/or
restatements thereof) and any other certificates (and any amendments and/or
restatements thereof) necessary for the Company to qualify to do business in a
jurisdiction in which the Company may wish to conduct business.

     7.   Capital Contribution.  The Member has contributed, or will contribute,
the following amount in cash to the Company:

     Renaissance Media Holdings LLC           $      1,000
                                              ------------
                              Total:          $      1,000

     8.   Additional Contributions.  The Member may, but is not required to,
make any additional capital contribution to the Company.

     9.   Admission of Additional Members.  One or more additional members of
the Company may be admitted to the Company with the consent of the Member.

     10.  Liability of Member.  The Member shall not have any liability for the
obligations or liabilities of the Company except to the extent provided in the
Act.

                                       2

<PAGE>
 
     11.  Governing Law.  This Agreement shall be governed by, and construed
under, the laws of the State of Delaware, all rights and remedies being governed
by said laws.

     IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
has duly executed this Limited Liability Company Agreement as of the 20th day of
March, 1998.
 
                         RENAISSANCE MEDIA HOLDINGS LLC

                         By: /s/ Fred Schulte
                             ------------------------------------------------
                          Name:  Fred Schulte
                          Title: Chief Executive Officer

                                       3



<PAGE>
 
                                                                     EXHIBIT 4.1

================================================================================

                        RENAISSANCE MEDIA (LOUISIANA) LLC
                        RENAISSANCE MEDIA (TENNESSEE) LLC
                     RENAISSANCE MEDIA CAPITAL CORPORATION,
                                    Issuers,


                          RENAISSANCE MEDIA GROUP LLC,
                                   Guarantor,


                                       and


                    UNITED STATES TRUST COMPANY OF NEW YORK,
                                     Trustee



                              --------------------


                                    Indenture

                            Dated as of April 9, 1998


                              --------------------


                       10% Senior Discount Notes due 2008

================================================================================

<PAGE>
 
                              CROSS-REFERENCE TABLE
                              ---------------------



TIA Sections                                           Indenture Sections
- ------------                                           ------------------

(S)310(a)(1).......................................         7.10
      (a)(2).......................................         7.10
      (b)..........................................         7.03; 7.08
(S)311(a)..........................................         7.03
      (b)..........................................         7.03
(S)312(a)..........................................         2.04
      (b)..........................................         10.02
      (c)..........................................         10.02
(S)313(a)..........................................         7.06
      (b)(2).......................................         7.07
      (c)..........................................         7.05; 7.06; 10.02
      (d)..........................................         7.06
(S)314(a)..........................................         7.05; 10.02
      (a)(4).......................................         4.17; 10.02
      (c)(1).......................................         10.03
      (c)(2).......................................         10.03
      (e)..........................................         4.17; 10.04
(S)315(a)..........................................         7.02
      (b)..........................................         7.05; 10.02
      (c)..........................................         7.02
      (d)..........................................         7.02
      (e)..........................................         6.11
(S)316(a)(1)(A)....................................         6.05
      (a)(1)(B)....................................         6.04
      (b)..........................................         6.07
      (c)..........................................         9.03
(S)317(a)(1).......................................         6.08
      (a)(2).......................................         6.09
      (b)..........................................         2.05
(S)318(a)..........................................         10.01
      (c)..........................................         10.01

Note: The Cross-Reference Table shall not for any purpose be deemed to be a part
of the Indenture.

<PAGE>
 
                                TABLE OF CONTENTS
                                -----------------
                                                                           Page

    RECITALS OF THE OBLIGORS..................................................1

                                   ARTICLE ONE
                   DEFINITIONS AND INCORPORATION BY REFERENCE

    SECTION 1.01.  Definitions................................................1
                   -----------
    SECTION 1.02.  Incorporation by Reference of Trust Indenture Act.........22
                   -------------------------------------------------
    SECTION 1.03.  Rules of Construction.....................................23
                   ---------------------

                                   ARTICLE TWO
                                    THE NOTES

    SECTION 2.01.  Form and Dating...........................................24
                   ---------------
    SECTION 2.02.  Restrictive Legends.......................................25
                   -------------------
    SECTION 2.03.  Execution, Authentication and Denominations...............27
                   -------------------------------------------
    SECTION 2.04.  Registrar and Paying Agent................................28
                   --------------------------
    SECTION 2.05.  Paying Agent to Hold Money in Trust.......................29
                   -----------------------------------
    SECTION 2.06.  Transfer and Exchange.....................................29

                   ---------------------
    SECTION 2.07.  Book-Entry Provisions for Global Notes....................30
                   --------------------------------------
    SECTION 2.08.  Special Transfer Provisions...............................31
                   ---------------------------
    SECTION 2.09.  Replacement Notes.........................................35
                   -----------------
    SECTION 2.10.  Outstanding Notes.........................................35
                   -----------------
    SECTION 2.11.  Temporary Notes...........................................36
                   ---------------
    SECTION 2.12.  Cancellation..............................................36
                   ------------
    SECTION 2.13.  CUSIP Numbers.............................................36
                   -------------
    SECTION 2.14.  Defaulted Interest........................................37
                   ------------------
    SECTION 2.15.  Issuance of Additional Notes..............................37
                   ----------------------------

                                  ARTICLE THREE
                                   REDEMPTION

    SECTION 3.01.  Right of Redemption.......................................37
                   -------------------
    SECTION 3.02.  Notices to Trustee........................................38
                   ------------------
    SECTION 3.03.  Selection of Notes to Be Redeemed.........................38
                   ---------------------------------
    SECTION 3.04.  Notice of Redemption......................................38
                   --------------------
    SECTION 3.05.  Effect of Notice of Redemption............................39
                   ------------------------------

- ------------------------
Note: The Table of Contents shall not for any purposes be deemed to be a part of
      the Indenture.

<PAGE>
 
                                      ii

    SECTION 3.06.  Deposit of Redemption Price..............................39
                   ---------------------------
    SECTION 3.07.  Payment of Notes Called for Redemption...................40
                   --------------------------------------
    SECTION 3.08.  Notes Redeemed in Part...................................40
                   ----------------------

                                  ARTICLE FOUR
                                    COVENANTS

    SECTION 4.01.  Payment of Notes.........................................40\
                   ----------------
    SECTION 4.02.  Maintenance of Office or Agency..........................41
                   -------------------------------
    SECTION 4.03.  Limitation on Indebtedness...............................41
                   --------------------------
    SECTION 4.04.  Limitation on Restricted Payments........................44
                   ---------------------------------
    SECTION 4.05.  Limitation on Dividend and Other Payment 
                   ----------------------------------------
                  Restrictions Affecting Restricted Subsidiaries............46
                  ----------------------------------------------
    SECTION 4.06.  Limitation on the Issuance and Sale of 
                   --------------------------------------
                  Capital Stock of Restricted Subsidiaries..................47
                  ----------------------------------------
    SECTION 4.07.  Limitation on Issuances of Guarantees by 
                   ----------------------------------------
                  Restricted Subsidiaries..................................48
                  -----------------------
    SECTION 4.08.  Limitation on Transactions with 
                   -------------------------------
                  Shareholders and Affiliates...............................48
                  ---------------------------
    SECTION 4.09.  Limitation on Liens......................................49
                   -------------------
    SECTION 4.10.  Limitation on Sale-Leaseback Transactions................50
                   -----------------------------------------
    SECTION 4.11.  Limitation on Asset Sales................................50
                   -------------------------
    SECTION 4.12.  Repurchase of Notes upon a Change of Control.............51
                   --------------------------------------------
    SECTION 4.13.  Existence................................................51
                   ---------
    SECTION 4.14.  Payment of Taxes and Other Claims........................52
                   ---------------------------------
    SECTION 4.15.  Maintenance of Properties and Insurance..................52
                   ---------------------------------------
    SECTION 4.16.  Notice of Defaults.......................................52
                   ------------------
    SECTION 4.17.  Compliance Certificates..................................52
                   -----------------------
    SECTION 4.18.  Commission Reports and Reports to Holders................53
                   -----------------------------------------
    SECTION 4.19.  Waiver of Stay, Extension or Usury Laws..................54
                   ---------------------------------------
    SECTION 4.20.  Calculation of Original Issue Discount...................54
                   --------------------------------------
    SECTION 4.21.  Release of Obligors Upon Sale............................54
                   -----------------------------

                                  ARTICLE FIVE
                              SUCCESSOR CORPORATION

    SECTION 5.01.  When Obligors and the Company May Merge, Etc..............54
                   --------------------------------------------
    SECTION 5.02.  Successor Substituted.....................................55
                   ---------------------

                                   ARTICLE SIX
                              DEFAULT AND REMEDIES

    SECTION 6.01.  Events of Default.........................................56
                   -----------------

<PAGE>
 
                                      iii

    SECTION 6.02.  Acceleration..............................................57
                   ------------
    SECTION 6.03.  Other Remedies............................................58
                   --------------
    SECTION 6.04.  Waiver of Past Defaults...................................58
                   -----------------------
    SECTION 6.05.  Control by Majority.......................................58
                   -------------------
    SECTION 6.06.  Limitation on Suits.......................................59
                   -------------------
    SECTION 6.07.  Rights of Holders to Receive Payment......................59
                   ------------------------------------
    SECTION 6.08.  Collection Suit by Trustee................................60
                   --------------------------
    SECTION 6.09.  Trustee May File Proofs of Claim..........................60
                   --------------------------------
    SECTION 6.10.  Priorities................................................60
                   ----------
    SECTION 6.11.  Undertaking for Costs.....................................61
                   ---------------------
    SECTION 6.12.  Restoration of Rights and Remedies........................61
                   ----------------------------------
    SECTION 6.13.  Rights and Remedies Cumulative............................61
                   ------------------------------
    SECTION 6.14.  Delay or Omission Not Waiver..............................61
                   ----------------------------

                                  ARTICLE SEVEN
                                     TRUSTEE

    SECTION 7.01.  General...................................................62
                   -------
    SECTION 7.02.  Certain Rights of Trustee.................................62
                   -------------------------
    SECTION 7.03.  Individual Rights of Trustee..............................63
                   ----------------------------
    SECTION 7.04.  Trustee's Disclaimer......................................63
                   --------------------
    SECTION 7.05.  Notice of Default.........................................63
                   -----------------
    SECTION 7.06.  Reports by Trustee to Holders.............................64
                   -----------------------------
    SECTION 7.07.  Compensation and Indemnity................................64
                   --------------------------
    SECTION 7.08.  Replacement of Trustee....................................65
                   ----------------------
    SECTION 7.09.  Successor Trustee by Merger, Etc..........................66
                   --------------------------------
    SECTION 7.10.  Eligibility...............................................66
                   -----------
    SECTION 7.11.  Money Held in Trust.......................................66
                   -------------------

                                  ARTICLE EIGHT
                             DISCHARGE OF INDENTURE

    SECTION 8.01.  Termination of Obligors' Obligations......................67
                   ------------------------------------
    SECTION 8.02.  Defeasance and Discharge of Indenture.....................68
                   -------------------------------------
    SECTION 8.03.  Defeasance of Certain Obligations.........................70
                   ---------------------------------
    SECTION 8.04.  Application of Trust Money................................72
                   --------------------------
    SECTION 8.05.  Repayment to Obligors.....................................72
                   ---------------------
    SECTION 8.06.  Reinstatement.............................................72
                   -------------

                                  ARTICLE NINE
                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

    SECTION 9.01.  Without Consent of Holders................................73
                   --------------------------
    SECTION 9.02.  With Consent of Holders...................................73
                   -----------------------

<PAGE>
 
                                      iv

    SECTION 9.03.  Revocation and Effect of Consent.........................74
                   --------------------------------
    SECTION 9.04.  Notation on or Exchange of Notes.........................75
                   --------------------------------
    SECTION 9.05.  Trustee to Sign Amendments, Etc..........................75
                   -------------------------------
    SECTION 9.06.  Conformity with Trust Indenture Act......................75
                   -----------------------------------

                                   ARTICLE TEN
                                GUARANTY OF NOTES

    SECTION 10.01.  Guaranty................................................76
                    --------
    SECTION 10.02.  Obligations Unconditional...............................77
                    -------------------------
    SECTION 10.03.  Notice to Trustee.......................................78
                    -----------------
    SECTION 10.04.  This Article Not to Prevent Events of Default...........78
                    ---------------------------------------------
    SECTION 10.05.  Limitation..............................................78
                    ----------

                                 ARTICLE ELEVEN
                                  MISCELLANEOUS

    SECTION 11.01.  Trust Indenture Act of 1939.............................78
                    ---------------------------
    SECTION 11.02.  Notices.................................................78
                    -------
    SECTION 11.03.  Certificate and Opinion as to Conditions Precedent......79
                    --------------------------------------------------
    SECTION 11.04.  Statements Required in Certificate or Opinion...........80
                    ---------------------------------------------
    SECTION 11.05.  Rules by Trustee, Paying Agent or Registrar.............80
                    -------------------------------------------
    SECTION 11.06.  Payment Date Other Than a Business Day..................80
                    --------------------------------------
    SECTION 11.07.  Governing Law...........................................81
                    -------------
    SECTION 11.08.  No Adverse Interpretation of Other Agreements...........81
                    ---------------------------------------------
    SECTION 11.09.  No Recourse Against Others..............................81
                    --------------------------
    SECTION 11.10.  Successors..............................................81
                    ----------
    SECTION 11.11.  Duplicate Originals.....................................81
                    -------------------
    SECTION 11.12.  Separability............................................81
                    ------------
    SECTION 11.13.  Table of Contents, Headings, Etc........................81
                    --------------------------------

EXHIBIT A     Form of Note.................................................A-1
EXHIBIT B     Form of Certificate..........................................B-1
EXHIBIT C     Form of Certificate to Be Delivered in Connection with
                         Transfers Pursuant to Non-QIB 
                         Accredited Investors..............................C-1
EXHIBIT D     Form of Certificate to Be Delivered in Connection with
                         Transfers Pursuant to Regulation S................D-1

<PAGE>
 
     INDENTURE, dated as of April 9, 1998, between RENAISSANCE MEDIA (LOUISIANA)
LLC, a Delaware limited liability company ("Renaissance Louisiana"), RENAISSANCE
                                            ---------------------               
MEDIA (TENNESSEE) LLC, a Delaware limited liability company ("Renaissance
                                                              -----------
Tennessee"), RENAISSANCE MEDIA CAPITAL CORPORATION, a Delaware corporation, as
- ---------                                                                     
issuers ("Renaissance Capital" and together with Renaissance Louisiana and
          -------------------                                             
Renaissance Tennessee, the "Obligors"), RENAISSANCE MEDIA GROUP LLC, a Delaware
                            --------                                           
limited liability company, as guarantor (the "Company"), and UNITED STATES TRUST
                                              -------                           
COMPANY OF NEW YORK, a New York banking corporation, as trustee (the "Trustee").
                                                                      -------   


                            RECITALS OF THE OBLIGORS

     The Obligors have duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $163,175,000.00 million
aggregate principal amount at maturity of the Obligors' 10% Senior Discount
Notes due 2008 (the "Notes") issuable as provided in this Indenture.  All things
                     -----                                                      
necessary to make this Indenture a valid agreement of the Obligors and the
Company, in accordance with its terms, have been done, and the Obligors and the
Company have done all things necessary to make the Notes, when executed by the
Obligors and authenticated and delivered by the Trustee hereunder and duly
issued by the Obligors, valid obligations of the Obligors as hereinafter
provided.

     This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act of 1939, as amended, that are required to be a part of
and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.

                     AND THIS INDENTURE FURTHER WITNESSETH

     For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows.


                                  ARTICLE ONE
                   DEFINITIONS AND INCORPORATION BY REFERENCE

     SECTION 1.01.  Definitions.
                    ----------- 

     "Accreted Value" is defined to mean, for any Specified Date, the amount
calculated pursuant to (i), (ii), (iii) or (iv) below for each $1,000 of
principal amount at maturity of the Notes:

          (i) if the Specified Date occurs on one or more of the following dates
     (each a "Semi-Annual Accrual Date"), the Accreted Value will equal the
     amount set forth below for such Semi-Annual Accrual Date:

<PAGE>
 
                                       2



     Semi-Annual                            Accreted
     Accrual Date                             Value 
     ------------                           --------
                                                    
     October 15, 1998....................   $  644.60
     April 15, 1999......................      676.83
     October 15, 1999....................      710.68
     April 15, 2000......................      746.21
     October 15, 2000....................      783.52
     April 15, 2001......................      822.70
     October 15, 2001....................      863.83
     April 15, 2002......................      907.02
     October 15, 2002....................      952.38
     April 15, 2003......................   $1,000.00


          (ii)   if the Specified Date occurs before the first Semi-Annual
     Accrual Date, the Accreted Value will equal the sum of (a) $612.91 and (b)
     an amount equal to the product of (1) the Accreted Value for the first
     Semi-Annual Accrual Date less $612.91 multiplied by (2) a fraction, the
     numerator of which is the number of days from the Closing Date to the
     Specified Date, using a 360-day year of twelve 30-day months, and the
     denominator of which is the number of days elapsed from the Closing Date to
     the first Semi-Annual Accrual Date, using a 360-day year of twelve 30-day
     months;

          (iii)  if the Specified Date occurs between two Semi-Annual
     Accrual Dates, the Accreted Value will equal the sum of (a) the Accreted
     Value for the Semi-Annual Accrual Date immediately preceding such Specified
     Date and (b) an amount equal to the product of (1) the Accreted Value for
     the immediately following Semi-Annual Accrual Date less the Accreted Value
     for the immediately preceding Semi-Annual Accrual Date multiplied by (2) a
     fraction, the numerator of which is the number of days from the immediately
     preceding Semi-Annual Accrual Date to the Specified Date, using a 360-day
     year of twelve 30-day months, and the denominator of which is 180; or

          (iv)   if the Specified Date occurs after the last Semi-Annual
     Accrual Date, the Accreted Value will equal $1,000.

          "Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary and not Incurred in connection
with, or in anticipation of, such Person 

<PAGE>
 
                                       3


becoming a Restricted Subsidiary; provided that Indebtedness of such Person
which is redeemed, defeased, retired or otherwise repaid at the time of or
immediately upon consummation of the transactions by which such Person becomes a
Restricted Subsidiary or such Asset Acquisition shall not be Acquired
Indebtedness.

          "Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined in conformity with GAAP; provided that the following
items shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income (or loss) of any Person that is not a
Restricted Subsidiary, except (x) with respect to net income, to the extent of
the amount of dividends or other distributions actually paid to the Company or
any of its Restricted Subsidiaries by such Person during such period and (y)
with respect to net losses, to the extent of the amount of Investments made by
the Company or any Restricted Subsidiary in such Person during such period; (ii)
solely for the purposes of calculating the amount of Restricted Payments that
may be made pursuant to clause (C) of the first paragraph of Section 4.04 (and
in such case, except to the extent includable pursuant to clause (i) above), the
net income (or loss) of any Person accrued prior to the date it becomes a
Restricted Subsidiary or is merged into or consolidated with the Company or any
of its Restricted Subsidiaries or all or substantially all of the property and
assets of such Person are acquired by the Company or any of its Restricted
Subsidiaries; (iii) any gains or losses (on an after-tax basis) attributable to
Asset Sales; (iv) except for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.04, any amount paid or accrued as dividends on Preferred Stock of the
Company or any Restricted Subsidiary owned by Persons other than the Company and
any of its Restricted Subsidiaries; and (v) all extraordinary gains and
extraordinary losses.

          "Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and filed with the Commission or provided to
the Trustee pursuant to Section 4.18.

          "Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the 

<PAGE>
 
                                       4


management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

          "Agent" means any Registrar, Co-Registrar, Paying Agent or
authenticating agent.

          "Agent Members" has the meaning provided in Section 2.07(a).

          "Asset Acquisition" means (i) an investment by the Company or any of
its Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Company or any of its Restricted Subsidiaries; provided that such
Person's primary business is related, ancillary or complementary to the
businesses of the Company and its Restricted Subsidiaries on the date of such
investment or (ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Company or
any of its Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person; provided that the property and
assets acquired are related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such acquisition.

          "Asset Disposition" means the sale or other disposition by the Company
or any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.

          "Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property and assets (other than the Capital Stock or other
Investment in an Unrestricted Subsidiary) of the Company or any of its
Restricted Subsidiaries outside the ordinary course of business of the Company
or such Restricted Subsidiary and, in each case, that is not governed by the
provisions of Article Five; provided that "Asset Sale" shall not include (a)
sales or other dispositions of inventory, receivables and other current assets,
(b) sales, transfers or other dispositions of assets constituting a Restricted
Payment permitted to be made under Section 4.04, (c) sales, transfers or other
dispositions of assets with a fair market value (as certified in an Officers'
Certificate) not in excess of $1 million in any transaction or series of
transactions or (d) sales or other dispositions of assets for consideration
(including exchanges for assets) at least equal to the fair market value of the
assets sold or disposed of, to the extent that the consideration received would
constitute property or assets of the kind described in clause (B) of Section
4.11 or deposits of proceeds with a "qualified intermediary," "qualified
trustee" or similar person for purposes of facilitating a 

<PAGE>
 
                                       5


like-kind exchange under applicable provisions of the Internal Revenue Code of
1986, as amended.

          "Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.

          "Board of Directors" means, with respect to any Person, the Board of
Directors or Board of Representatives of such Person or any committee of such
Board of Directors or Board of Representatives duly authorized to act with
respect to this Indenture.

          "Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or Assistant Secretary of such Person to
have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.

          "Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.

          "Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.

          "Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.

          "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.

          "Change of Control" means such time as (i) (a) prior to the occurrence
of a Public Market, a "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the Exchange Act) becomes the ultimate "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of Voting Stock representing a
greater percentage of the total voting power of the Voting Stock of (x)
Holdings, on a fully diluted basis, than is beneficially owned by the Morgan
Stanley Entities and Time Warner and their Affiliates on such date or (y) the
Company, on a fully diluted basis, than is held by the Existing Stockholders on
such date and (b) after the occurrence of a Public Market, a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the 

<PAGE>
 
                                       6


Exchange Act) becomes the ultimate "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act) of more than 35% of the total voting power of the Voting
Stock of the Company on a fully diluted basis and such ownership represents a
greater percentage of the total voting power of the Voting Stock of the Company,
on a fully diluted basis, than is held by the Existing Stockholders on such
date; or (ii) individuals who on the Closing Date constitute the Board of
Directors of Holdings or the Company (together with any new directors (x) whose
election by such Board of Directors or whose nomination by such Board of
Directors for election by Holdings' or the Company's equityholders was approved
by a vote of at least two-thirds of the members of such Board of Directors then
in office who either were members of such Board of Directors on the Closing Date
or whose election or nomination for election was previously so approved or (y)
so long as no person beneficially owns a greater proportion of the total voting
power of the Voting Stock of Holdings than is beneficially owned by the Morgan
Stanley Entities and Time Warner and their Affiliates, whose election was
approved by Holdings with respect to the Company) cease for any reason to
constitute a majority of the members of the Board of Directors then in office.

          "Closing Date" means the date on which the Notes are originally issued
under this Indenture.

          "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.

          "Common Stock" means, with respect to any Person, such Person's
equity, other than Preferred Stock of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all series and
classes of such common stock, including any and all shares, interests,
participations or other equivalents (however designated, whether voting or non-
voting) thereof.

          "Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.

          "Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period (x) plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), (iii) depreciation expense, (iv) amortization expense and (v)
all other non-cash items reducing Adjusted Consolidated Net Income (other than
items that will require cash payments and for which an accrual or reserve is, or
is required by GAAP to be, made), less all non-cash items increasing Adjusted
Consolidated Net Income, all as determined on a consolidated 

<PAGE>
 
                                       7

basis for the Company and its Restricted Subsidiaries in conformity with GAAP,
and (y) solely for purposes of calculating the amount of Restricted Payments
that may be made pursuant to clause (C) of the first paragraph of Section 4.04,
less (to the extent not otherwise reduced in accordance with GAAP) the aggregate
amount of deposits made by the Company and its Restricted Subsidiaries after the
Closing Date in connection with proposed Asset Acquisitions that are forfeited
by the Company or any of its Restricted Subsidiaries; provided that, if any
Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated
EBITDA shall be reduced (to the extent not otherwise reduced in accordance with
GAAP) by an amount equal to (A) the amount of the Adjusted Consolidated Net
Income attributable to such Restricted Subsidiary multiplied by (B) the
percentage ownership interest in the income of such Restricted Subsidiary not
owned on the last day of such period by the Company or any of its Restricted
Subsidiaries.

          "Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; excluding, however, any premiums, fees and expenses (and any
amortization thereof) payable in connection with the Transactions, all as
determined on a consolidated basis (without taking into account Unrestricted
Subsidiaries) in conformity with GAAP.

          "Consolidated Leverage Ratio" means, on any Transaction Date, the
ratio of (i) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries on a consolidated basis outstanding on such Transaction
Date to (ii) four times the aggregate amount of Consolidated EBITDA for the then
most recent fiscal quarter for which financial statements of the Company have
been filed with the Commission or provided to the Trustee pursuant to Section
4.18 (such fiscal quarter being the "Quarter"); provided that, in making the
foregoing calculation, (A) pro forma effect shall be given to any Indebtedness
to be Incurred or repaid on the Transaction Date; (B) pro forma effect shall be
given to Asset Dispositions and Asset Acquisitions (including giving pro forma
effect to the application of proceeds of any Asset Disposition) that occur from
the beginning of the Quarter through the Transaction Date (the "Reference
Period"), as if they had occurred and such proceeds had been applied on the
first day of such Reference Period and, in the case of any Asset Acquisition,
giving pro forma effect to any cost reductions the Company anticipates if the
Company delivers to the Trustee an officer's certificate executed by the Chief
Financial Officer of the Company certifying to and describing and quantifying
with reasonable specificity the cost reductions expected to be attained within
the first year after such Asset Acquisition; and (C) pro forma effect shall be
given to asset dispositions and asset acquisitions (including giving pro forma
effect to the application of proceeds of any asset 

<PAGE>
 
                                       8


disposition) that have been made by any Person that has become a Restricted
Subsidiary or has been merged with or into the Company or any Restricted
Subsidiary during such Reference Period and that would have constituted Asset
Dispositions or Asset Acquisitions had such transactions occurred when such
Person was a Restricted Subsidiary as if such asset dispositions or asset
acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the
first day of such Reference Period; provided that to the extent that clause (B)
or (C) of this sentence requires that pro forma effect be given to an Asset
Acquisition or Asset Disposition, such pro forma calculation shall be based upon
the fiscal quarter immediately preceding the Transaction Date of the Person, or
division or line of business of the Person, that is acquired or disposed of for
which financial information is available.

          "Consolidated Net Worth" means, at any date of determination,
shareholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).

          "Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 114 West 47/th/ Street, New York, New York  10036-1532; Attention:
Corporate Trust Division: 25/th/ Floor.

          "Credit Agreement" means the credit agreement between Renaissance
Media LLC, the lenders party thereto, Morgan Stanley Senior Funding, Inc., as
syndication agent, CIBC Oppenheimer, as documentation agent, and Bankers Trust
Company, as administrative agent, together with any agreements, instruments and
documents executed or delivered pursuant to or in connection with such credit
agreement, as such credit agreement or such agreements, instruments or documents
may be amended, supplemented, extended, restated, renewed or otherwise modified
from time to time and any refinancing, replacement or substitution thereof or
therefor, or of or for any previous refinancing, replacement or substitution.

          "Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.

          "Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.

<PAGE>
 
                                       9


          "Depositary" means The Depository Trust Company, its nominees, and
their respective successors.

          "Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; provided that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Sections 4.11 and 4.12 and such
Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Obligors'
repurchase of such Notes as are required to be repurchased pursuant to Sections
4.11 and 4.12.

          "Event of Default" has the meaning provided in Section 6.01.

          "Excess Proceeds" has the meaning provided in Section 4.11.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Exchange Notes" means any securities of the Obligors containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for the Notes pursuant
to the Registration Rights Agreement and this Indenture.

          "Existing Stockholders" means (i) the Morgan Stanley Entities and Time
Warner and their respective Affiliates and (ii) Holdings, so long as the Morgan
Stanley Entities and Time Warner, and their respective Affiliates, in the
aggregate, beneficially own a majority of the Voting Stock of Holdings.

          "fair market value" means the price that would be paid in an arm's-
length transaction between an informed and willing seller under no compulsion to
sell and an informed and willing buyer under no compulsion to buy, as determined
in good faith by the Board of Directors, whose determination shall be conclusive
if evidenced by a Board Resolution; provided that for purposes of clause (viii)
of the second paragraph of Section 4.03, (x) the fair market value of any
security registered under the Exchange Act shall be the average of the closing
prices, regular way, of such security for the 20 consecutive trading days
immediately preceding the sale of Capital Stock and (y) in the event the
aggregate fair market value of any other property (other than cash or cash

<PAGE>
 
                                       10


equivalents) received by the Company or an Obligor exceeds $10 million, the fair
market value of such property shall be determined by a nationally recognized
investment banking firm and set forth in the written opinion which shall be
delivered to the Trustee.

          "GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained or referred
to in this Indenture shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of this
Indenture shall be made without giving effect to (i) the amortization of any
expenses incurred in connection with the Transactions and (ii) except as
otherwise provided, the amortization of any amounts required or permitted by
Accounting Principles Board Opinion Nos. 16 and 17.

          "Global Notes" has the meaning provided in Section 2.01.

          "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.

          "Guaranteed Indebtedness" has the meaning provided in Section 4.07.

          "Guaranty" means the full and unconditional Guarantee of the Notes by
the Company, as set forth in Article Ten.

          "Holder" or "Noteholder" means the registered holder of any Note.

          "Holdings" means Renaissance Media Holdings LLC, a Delaware limited
liability company.

<PAGE>
 
                                       11


          "Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Indebtedness by reason of a Person
becoming a Restricted Subsidiary; provided that neither the accrual of interest
nor the accretion of original issue discount shall be considered an Incurrence
of Indebtedness.

          "Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in (i) or (ii) above or (v), (vi)
or (vii) below) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if drawn upon, to
the extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables, (v) all Capitalized
Lease Obligations, (vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be the lesser of (A)
the fair market value of such asset at such date of determination and (B) the
amount of such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed
by such Person to the extent such Indebtedness is Guaranteed by such Person and
(viii) to the extent not otherwise included in this definition, obligations
under Currency Agreements and Interest Rate Agreements. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and, with respect to
contingent obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation, provided (A) that the amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness less the remaining unamortized portion
of the original issue discount of such Indebtedness at such time as determined
in conformity with GAAP, (B) that money borrowed and set aside at the time of
the Incurrence of any Indebtedness in order to prefund the payment of the
interest on such Indebtedness shall not be deemed to be "Indebtedness" so long
as such money is held to secure the payment of such interest and (C) that
Indebtedness shall not include any liability for federal, state, local or other
taxes.

          "Indenture" means this Indenture as originally executed or as it may
be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.

<PAGE>
 
                                       12


          "Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.

          "Interest Payment Date" means each semiannual interest payment date on
April 15 and October 15 of each year, commencing October 15, 2003.

          "Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement, option or future contract or other
similar agreement or arrangement.

          "Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding (x) advances to customers or suppliers in
the ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable, prepaid expenses or deposits on the balance sheet of the
Company or its Restricted Subsidiaries and (y) deposits in connection with any
proposed Asset Acquisition not to exceed 10% of the estimated purchase price for
such Asset Acquisition) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
bonds, notes, debentures or other similar instruments issued by, such Person and
shall include (i) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and (ii) the fair market value of the Capital Stock (or any other
Investment), held by the Company or any of its Restricted Subsidiaries, of (or
in) any Person that has ceased to be a Restricted Subsidiary, including without
limitation, by reason of any transaction permitted by clause (iii) of Section
4.06; provided that the fair market value of the Investment remaining in any
Person that has ceased to be a Restricted Subsidiary shall not exceed the
aggregate amount of Investments previously made in such Person valued at the
time such Investments were made less the net reduction of such Investments. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.04, (i)
"Investment" shall include the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any of its Restricted
Subsidiaries)) of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary, (ii) the fair market value
of the assets (net of liabilities (other than liabilities to the Company or any
of its Restricted Subsidiaries)) of any Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is designated a Restricted Subsidiary shall be
considered a reduction in outstanding Investments and (iii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer.

          "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).

          "Moody's" means Moody's Investors Service, Inc. and its successors.

<PAGE>
 
                                       13


          "Morgan Stanley Entities" means Morgan Stanley Capital Partners III,
L.P., Morgan Stanley Capital Investors, L.P. and MSCP III 892 Investors, L.P.

          "Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable), including, without limitation, distributions
by the Company or a Restricted Subsidiary pursuant to clause (ix) of the second
paragraph of Section 4.04, as a result of such Asset Sale without regard to the
consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Company or any Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP and (b) with respect
to any issuance or sale of Capital Stock, the proceeds of such issuance or sale
in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorney's fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.

          "Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.

          "Notes" means any of the Notes, as defined in the first paragraph of
the recitals hereof, that are authenticated and delivered under this Indenture.
For all purposes of this Indenture, the term "Notes" shall include the Notes
initially issued on the Closing Date, any Exchange Notes to be issued and
exchanged for any Notes pursuant to the Registration Rights Agreement and this
Indenture and any other Notes issued after the Closing Date under this
Indenture.  For purposes of this Indenture, all Notes shall vote together as one
series of Notes under this Indenture.

<PAGE>
 
                                       14

          "Obligor Order" means a written request or order signed in the name of
each Obligor (i) by its Chairman, a Vice Chairman, its President, a Vice
President or the Chief Financial Officer and (ii) by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee;
provided, however, that such written request or order may be signed by any two
of the officers listed in clause (i) above in lieu of being signed by one of
such officers listed in such clause (i) and one of the officers listed in clause
(ii) above.

          "Obligors" means each of the parties named as such in the first
paragraph of this Indenture until a successor replaces it pursuant to Article
Five of this Indenture and thereafter means the successor.

          "Offer to Purchase" means an offer to purchase Notes by the Obligors
from the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that all
Notes validly tendered will be accepted for payment on a pro rata basis; (ii)
the purchase price and the date of purchase (which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed)
(the "Payment Date"); (iii) that any Note not tendered will continue to accrue
interest pursuant to its terms; (iv) that, unless the Obligors default in the
payment of the purchase price, any Note accepted for payment pursuant to the
Offer to Purchase shall cease to accrue interest on and after the Payment Date;
(v) that Holders electing to have a Note purchased pursuant to the Offer to
Purchase will be required to surrender the Note, together with the form entitled
"Option of the Holder to Elect Purchase" on the reverse side of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day immediately preceding the Payment
Date; (vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount at maturity of Notes delivered for purchase and a statement that such
Holder is withdrawing his election to have such Notes purchased; and (vii) that
Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered;
provided that each Note purchased and each new Note issued shall be in a
principal amount at maturity of $1,000 or integral multiples thereof. On the
Payment Date, the Obligors shall (i) accept for payment on a pro rata basis
Notes or portions thereof tendered pursuant to an Offer to Purchase; (ii)
deposit with the Paying Agent money sufficient to pay the purchase price of all
Notes or portions thereof so accepted; and (iii) deliver, or cause to be
delivered, to the Trustee all Notes or portions thereof so accepted together
with an Officers' Certificate specifying the Notes or portions thereof accepted
for payment by the Obligors. The Paying Agent shall promptly mail to the Holders
of Notes so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail to such Holders a new Note equal in
principal amount at maturity to any unpurchased portion of the Note surrendered;
provided that each Note purchased and each new Note issued shall be in a
principal amount at maturity of $1,000 or integral multiples thereof. The
Obligors shall publicly announce the results of an Offer to Purchase as soon as
practicable after the Payment Date. The 

<PAGE>
 
                                       15


Trustee shall act as the Paying Agent for an Offer to Purchase. The Obligors
shall comply with Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable, in the event that the Obligors are required to repurchase Notes
pursuant to an Offer to Purchase.

          "Officer" means, with respect to any Person, (i) the Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, and (ii) the
Treasurer or any Assistant Treasurer, or the Secretary or any Assistant
Secretary, in each case of and duly authorized by such Person.

          "Officers' Certificate" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof or two officers listed in clause (i) of the
definition thereof.  Each Officers' Certificate (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include the statements
provided for in TIA Section 314(e).

          "Offshore Global Notes" has the meaning provided in Section 2.01.

          "Offshore Physical Notes" has the meaning provided in Section 2.01.

          "Opinion of Counsel" means a written opinion signed by legal counsel,
who may be an employee of or counsel to the Obligors or the Company, as the case
may be.  Each such Opinion of Counsel shall include the statements provided for
in TIA Section 314(e).

          "Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them.  The term "Paying
Agent" includes any additional Paying Agent.

          "Payment Date" has the meaning specified in the definition of "Offer
to Purchase."

          "Permanent Offshore Global Notes" has the meaning provided in Section
2.01.

          "Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into or transfer or convey all or substantially all its assets to, the Company
or a Restricted Subsidiary; provided that such person's primary business is
related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such Investment; (ii) Temporary Cash
Investments; (iii) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP; (iv) stock, obligations or securities received in
satisfaction of judgments; (v) loans or advances to employees of the Company or
any Restricted Subsidiary evidenced by unsubordinated promissory notes that do
not in the aggregate exceed at any one time 

<PAGE>
 
                                       16


outstanding $1 million; (vi) Investments in any Person the primary business of
which is related, ancillary or complementary to the business of the Company and
its Restricted Subsidiaries on the date of such Investments; provided the
aggregate amount of Investments made pursuant to this clause (vi) does not
exceed $2 million plus the net reductions in Investments made pursuant to this
clause (vi) resulting from distributions on or repayments of such Investments or
the Net Cash Proceeds from the sale of any such Investments, provided that the
net reduction in any Investment shall not exceed the amount of such Investment;
(vii) deposits of proceeds with a "qualified intermediary," "qualified trustee"
or similar person for purposes of facilitating a like-kind exchange under
applicable provisions of the Internal Revenue Code of 1986, as amended; or
(viii) Interest Rate Agreements and Currency Agreements designed solely to
protect the Company or its Restricted Subsidiaries against fluctuations in
interest rates or foreign currency exchange rates.

          "Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are not yet delinquent or are being contested in good
faith by appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made; (ii) statutory
and common law Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other similar Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made; (iii)
Liens incurred or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security; (iv) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations (including
obligations under franchise agreements), bankers' acceptances, surety and appeal
bonds, government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (v) easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or any of its
Restricted Subsidiaries; (vi) Liens upon real or personal property acquired
after the Closing Date; provided that (a) such Lien is created solely for the
purpose of securing Indebtedness Incurred, in accordance with Section 4.03, to
finance the cost (including the cost of design, development, acquisition,
installation, integration, improvement or construction) of the item of property
or assets subject thereto and such Lien is created prior to, at the time of or
within six months after the later of the acquisition, the completion of
construction or the commencement of full operation of such property (b) the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost and (c) any such Lien shall not extend to or cover any property or
assets other than such item of property or assets and any improvements on such
item; (vii) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company and its Restricted
Subsidiaries, taken as a whole; (viii) Liens encumbering property or assets
under construction arising from progress or partial payments by a customer of

<PAGE>
 
                                       17

the Company or its Restricted Subsidiaries relating to such property or assets;
(ix) any interest or title of a lessor in the property subject to any
Capitalized Lease or operating lease; (x) Liens arising from filing Uniform
Commercial Code financing statements regarding leases; (xi) Liens on property
of, or on shares of Capital Stock or Indebtedness of, any Person existing at the
time such Person becomes, or becomes a part of, any Restricted Subsidiary;
provided that such Liens do not extend to or cover any property or assets of the
Company or any Restricted Subsidiary other than the property or assets acquired;
(xii) Liens in favor of the Company or any Restricted Subsidiary; (xiii) Liens
arising from the rendering of a final judgment or order against the Company or
any Restricted Subsidiary that does not give rise to an Event of Default; (xiv)
Liens securing reimbursement obligations with respect to letters of credit that
encumber documents and other property relating to such letters of credit and the
products and proceeds thereof; (xv) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (xvi) Liens encumbering customary
initial deposits and margin deposits, and other Liens that are within the
general parameters customary in the industry and incurred in the ordinary course
of business, in each case, securing Indebtedness under Interest Rate Agreements
and Currency Agreements and forward contracts, options, future contracts,
futures options or similar agreements or arrangements designed solely to protect
the Company or any of its Restricted Subsidiaries from fluctuations in interest
rates, currencies or the price of commodities; (xvii) Liens arising out of
conditional sale, title retention, consignment or similar arrangements for the
sale of goods entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business in accordance with industry practice; (xviii)
Liens resulting from deposits made in connection with any proposed Asset
Acquisition provided that such deposit does not exceed 10% of the estimated
purchase price for such Asset Acquisition; (xix) Liens upon real or personal
property acquired after the Closing Date that secure Indebtedness under clause
(vi) above to secure any other Indebtedness secured under clause (vi) above;
provided that the aggregate principal amount of Indebtedness secured by such
Liens does not exceed 100% of the cost of all of the property securing such
Indebtedness under clause (vi) above; and (xx) Liens on or sales of receivables,
including related intangible assets and proceeds thereof.

          "Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.

          "Physical Notes" has the meaning provided in Section 2.01.

          "Preferred Stock" means, with respect to any Person, such Person's
preferred or preference equity, whether outstanding on the Closing Date or
issued thereafter, including, without limitation, all series and classes of such
preferred or preference stock, including any and all shares, interests,
participations or other equivalents (however designated, whether voting or non-
voting) thereof.

<PAGE>
 
                                       18

          "principal" of a debt security, including the Notes, means the
principal amount due on the Stated Maturity as shown on such debt security.

          "Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.

          "Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company or an Obligor pursuant to an effective
registration statement under the Securities Act.

          A "Public Market" shall be deemed to exist if (i) a Public Equity
Offering has been consummated and (ii) at least 15% of the total issued and
outstanding Common Stock of the Company or an Obligor has been distributed by
means of an effective registration statement under the Securities Act or sales
pursuant to Rule 144 under the Securities Act.

          "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

          "Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

          "Redemption Price", when used with respect to any Note to be redeemed,
means the price at which such Note is to be redeemed pursuant to this Indenture.

          "Registrar" has the meaning provided in Section 2.04.

          "Registration" has the meaning provided in Section 4.18.

          "Registration Rights Agreement" means the Registration Rights
Agreement, dated April 6, 1998, between the Obligors, the Company and Morgan
Stanley & Co. Incorporated and certain permitted assigns specified therein.

          "Registration Statement" means the Registration Statement as defined
and described in the Registration Rights Agreement.

          "Regular Record Date" for the interest payable on any Interest Payment
Date means the April 1 or October 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.

          "Regulation S" means Regulation S under the Securities Act.

          "Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive 

<PAGE>
 
                                       19

committee of the board of directors, the chairman of the trust committee, the
president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee in its corporate
trust department customarily performing functions similar to those performed by
any of the above-designated officers, in each case assigned to or responsible
for this Indenture, and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.

          "Restricted Payments" has the meaning provided in Section 4.04.

          "Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.

          "Rule 144A" means Rule 144A under the Securities Act.

          "Securities Act" means the Securities Act of 1933, as amended.

          "Security Register" has the meaning provided in Section 2.04.

          "Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.

          "Significant Subsidiary" means, at any date of determination, the
Obligors and any Restricted Subsidiary that, together with its Subsidiaries, (i)
for the most recent fiscal year of the Company, accounted for more than 10% of
the consolidated revenues of the Company and its Restricted Subsidiaries or (ii)
as of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.

          "Specified Date" means any Redemption Date, any Payment Date for an
Offer to Purchase or any date on which the Notes first become due and payable
after an Event of Default.

          "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, and its successors .

          "Stated Maturity" means, (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.

<PAGE>
 
                                       20

          "Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.

          "Subsidiary Guarantee" has the meaning provided in Section 4.07.

          "Tax Amount" means, with respect to any period, without duplication,
the increase in the cumulative United States federal, state and local tax
liability of holders of equity interests in the Company or a Restricted
Subsidiary, as applicable (or if such holder is a pass-through entity for United
States income tax purposes, holders of its equity interests) in respect of their
interests in the Company or such Restricted Subsidiary for such period plus any
additional amounts payable to such holders to cover taxes arising from the
ownership of such equity interests, but excluding any increase in tax liability
or additional amounts payable in respect of a gain realized by a holder of an
equity interest in the Company or a Restricted Subsidiary upon the sale or
disposition by such holder of an equity interest, including without limitation,
any redemption thereof by the Company, in the Company or a Restricted
Subsidiary.

          "Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States of America, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50 million (or the
foreign currency equivalent thereof) and has outstanding debt which is rated "A"
(or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker dealer
or mutual fund distributor, (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above, (iv) commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
with a rating at the time as of which any investment therein is made of "P-1"
(or higher) according to Moody's or "A-1" (or higher) according to S&P, and (v)
securities with maturities of six months or less from the date of acquisition
issued or fully and unconditionally guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least "A" by S&P or Moody's.

          "Temporary Offshore Global Notes" has the meaning provided in Section
2.01.

<PAGE>
 
                                       21

          "TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended (15 U.S. Code (S)(S) 77aaa-77bbbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.

          "Time Warner" means TWI Cable, Inc. and its cable-related affiliates.

          "Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition of goods
or services.

          "Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.

          "Transactions" means, collectively, (i) the acquisition by Renaissance
Media LLC of six cable television systems from Time Warner, (ii) the issuance to
Time Warner of a $9.5 million equity ownership interest in Holdings, (iii) the
equity contribution to Holdings of $95.1 million from the Morgan Stanley
Entities and $3.9 million from six former senior managers of Cablevision
Industries Corporation, which will be contributed to Renaissance Media LLC and
its subsidiaries as equity, (iv) the establishment of the Credit Agreement and
(v) the sale of the Notes originally issued hereunder.

          "Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.

          "United States Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.

          "Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors of the Company in the manner provided below; and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any Restricted Subsidiary (including any newly acquired or newly
formed Subsidiary of the Company), other than the Obligors, to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or
owns or holds any Lien on any property of, the Company or any Restricted
Subsidiary; provided that (A) any Guarantee by the Company or any Restricted
Subsidiary of any Indebtedness of the Subsidiary being so designated shall be
deemed an "Incurrence" of such Indebtedness and an "Investment" by the Company
or such Restricted Subsidiary (or both, if applicable) at the time of such
designation; (B) either (I) the Subsidiary to be so designated has total assets
of $1,000 or less or 

<PAGE>
 
                                       22

(II) if such Subsidiary has assets greater than $1,000, such designation would
be permitted under Section 4.04 and (C) if applicable, the Incurrence of
Indebtedness and the Investment referred to in clause (A) of this proviso would
be permitted under Sections 4.03 and 4.04. The Board of Directors of the Company
may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that (i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such designation and (ii)
all Liens and Indebtedness of such Unrestricted Subsidiary outstanding
immediately after such designation would, if Incurred at such time, have been
permitted to be Incurred (and shall be deemed to have been Incurred) for all
purposes of this Indenture. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.

          "U.S. Global Notes" has the meaning provided in Section 2.01.

          "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Notes, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.

          "U.S. Physical Notes" has the meaning provided in Section 2.01.

          "Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.

          "Wholly Owned" means, with respect to any Subsidiary of any Person,
the ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.

<PAGE>
 
                                       23

          SECTION 1.02.  Incorporation by Reference of Trust Indenture Act.
                         -------------------------------------------------  
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.  The following
TIA terms used in this Indenture have the following meanings:

               "indenture securities" means the Notes;

               "indenture security holder" means a Holder or a Noteholder;

               "indenture to be qualified" means this Indenture;

               "indenture trustee" or "institutional trustee" means the Trustee;
     and

               "obligor" on the indenture securities means the Obligors, the
     Company or any other obligor on the Notes.

          All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.

          SECTION 1.03.  Rules of Construction. Unless the context otherwise
                         ---------------------
requires:

               (i)    a term has the meaning assigned to it;

               (ii)   an accounting term not otherwise defined has the meaning
     assigned to it in accordance with GAAP;

               (iii)  "or" is not exclusive;

               (iv)   words in the singular include the plural, and words in the
     plural include the singular;

               (v)    provisions apply to successive events and transactions;

               (vi)   "herein," "hereof" and other words of similar import refer
     to this Indenture as a whole and not to any particular Article, Section or
     other subdivision;

               (vii)  all ratios and computations based on GAAP contained in
     this Indenture shall be computed in accordance with the definition of GAAP
     set forth in Section 1.01; and

               (viii) all references to Sections or Articles refer to Sections
     or Articles of this Indenture unless otherwise indicated.

<PAGE>
 
                                       24

                                  ARTICLE TWO
                                   THE NOTES

      SECTION 2.01.  Form and Dating.  The Notes and the Trustee's certificate
                     ---------------                                          
of authentication shall be substantially in the form annexed hereto as Exhibit A
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture.  The Notes may have notations,
legends or endorsements required by law, stock exchange agreements to which the
Obligors are subject or usage.  The Obligors and the Trustee shall approve the
form of the Notes and any notation, legend or endorsement on the Notes.  Each
Note shall be dated the date of its authentication.

     The terms and provisions contained in the form of the Notes annexed hereto
as Exhibit A shall constitute, and are hereby expressly made, a part of this
Indenture.  To the extent applicable, the Company, each of the Obligors and the
Trustee, by its execution and delivery of this Indenture, expressly agrees to
the terms and provisions of the Notes applicable to it and to be bound thereby.

     Notes offered and sold in reliance on Rule 144A shall be issued initially
in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "U.S. Global Notes"),
                                                       -----------------   
registered in the name of the nominee of the Depositary, deposited with the
Trustee, as custodian for the Depositary, duly executed by the Obligors and
authenticated by the Trustee as hereinafter provided.  The aggregate principal
amount at maturity of the U.S. Global Notes may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.

     Notes offered and sold in offshore transactions in reliance on Regulation S
shall be issued initially in the form of one or more temporary global Notes in
registered form substantially in the form set forth in Exhibit A (the "Temporary
                                                                       ---------
Offshore Global Notes"), registered in the name of the nominee of the
- ---------------------                                                
Depositary, deposited with the Trustee, as custodian for the Depositary, duly
executed by the Obligors and authenticated by the Trustee as hereinafter
provided.  The aggregate principal amount at maturity of the Offshore Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.  At any time on or after May 19, 1998, upon receipt by the
Trustee and the Obligors of a certificate substantially in the form of Exhibit B
hereto, one or more permanent global Notes in registered form substantially in
the form set forth in Exhibit A (the "Permanent Offshore Global Notes"; and
                                      -------------------------------      
together with the Temporary Offshore Global Notes, the "Offshore Global Notes")
                                                        ---------------------  
duly executed by the Obligors and authenticated by the Trustee as hereinafter
provided shall be deposited with the Trustee, as custodian for the Depositary or
its nominee, and the Registrar shall reflect on its books and records the date
and a decrease in the principal amount at maturity of the Temporary Offshore
Global Notes in an amount equal to the 

<PAGE>
 
                                       25

principal amount at maturity of the beneficial interest in the Temporary
Offshore Global Notes transferred.

     Notes offered and sold in reliance on Regulation D under the Securities Act
shall be issued in the form of permanent certificated Notes in registered form
in substantially the form set forth in Exhibit A (the "U.S. Physical Notes").
                                                       -------------------   

     Notes issued pursuant to Section 2.07 in exchange for interests in the
Offshore Global Notes shall be in the form of permanent certificated Notes in
registered form substantially in the form set forth in Exhibit A (the "Offshore
                                                                       --------
Physical Notes").
- --------------   

     The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes."  The U.S. Global Notes
                                        --------------                         
and the Offshore Global Notes are sometimes referred to herein as the "Global
                                                                       ------
Notes."
- -----  

     The definitive Notes shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officers executing such Notes, as evidenced
by their execution of such Notes.

      SECTION 2.02.  Restrictive Legends.  Unless and until a Note is exchanged
                     -------------------                                       
for an Exchange Note or sold in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, the U.S. Global Notes,
Temporary Offshore Global Notes and each U.S. Physical Note shall bear the
following legend on the face thereof:

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
     AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
     WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
     PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.  BY ITS ACQUISITION
     HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
     BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
     INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
     OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
     ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
     NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
     SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
     REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE
     DATE OF TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE
     EXCEPT (A) TO 

<PAGE>
 
                                       26

     RENAISSANCE MEDIA GROUP LLC OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
     INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
     (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
     PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
     CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
     TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
     TRUSTEE), AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE ACCRETED
     VALUE OF NOTES AT THE TIME OF TRANSFER OF LESS THAN $100,000, AN OPINION OF
     COUNSEL ACCEPTABLE TO THE OBLIGORS THAT SUCH TRANSFER IS IN COMPLIANCE WITH
     THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
     TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E)
     PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
     SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
     STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO
     EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
     EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN
     THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE
     BOX SET FORTH ON THE REVERSE HERETO RELATING TO THE MANNER OF SUCH TRANSFER
     AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS
     AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
     TRANSFER, FURNISH TO THE TRUSTEE AND THE OBLIGORS SUCH CERTIFICATIONS,
     LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY
     REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
     EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
     REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
     TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
     THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
     PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
     NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.

     Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:

<PAGE>
 
                                       27

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
     DEPOSITORY TRUST COMPANY, TO THE OBLIGORS OR THEIR AGENT FOR REGISTRATION
     OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
     IN THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN
     AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
     HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
     AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
     PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
     WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
     HEREIN.

     TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
     NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
     SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
     LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
     SECTION 2.08 OF THE INDENTURE.

     SECTION 2.03.  Execution, Authentication and Denominations.  Subject to
                    -------------------------------------------             
Article Four and applicable law, the aggregate principal amount at maturity of
Notes which may be authenticated and delivered under this Indenture is
unlimited.  The Notes shall be executed by two Officers of each of the Obligors.
The signature of any of these Officers on the Notes may be by facsimile or
manual signature in the name and on behalf of the Obligors.

     If an Officer whose signature is on a Note no longer holds that office at
the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.

     A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note.  The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.

     At any time and from time to time after the execution of this Indenture,
the Trustee or an authenticating agent shall upon receipt of an Obligor Order
authenticate for original issue Notes in the aggregate principal amount
specified in such Obligor Order; provided that the Trustee shall be entitled to
receive an Officers' Certificate and an Opinion of Counsel of the Obligors in
connection with such authentication of Notes.

<PAGE>
 
                                       28

     Such Obligor Order shall specify the amount of Notes to be authenticated
and the date on which the original issue of Notes is to be authenticated and, in
case of an issuance of Notes pursuant to Section 2.15, shall certify that such
issuance is in compliance with Article Four.

     The Trustee may appoint an authenticating agent to authenticate Notes.  An
authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent.  An authenticating agent has the
same rights as an Agent to deal with the Obligors or an Affiliate of the
Obligors.

     The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 in principal amount at maturity and any integral
multiple thereof.

     SECTION 2.04.  Registrar and Paying Agent.  The Obligors shall maintain an
                    --------------------------                                 
office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be presented
                   ---------                                                    
for payment (the "Paying Agent") and an office or agency where notices and
                  ------------                                            
demands to or upon the Obligors in respect of the Notes and this Indenture may
be served, which shall be in the Borough of Manhattan, The City of New York. The
Obligors shall cause the Registrar to keep a register of the Notes and of their
transfer and exchange (the "Security Register").  The Security Register shall be
                            -----------------                                   
in written form or any other form capable of being converted into written form
within a reasonable time.  The Obligors may have one or more co-Registrars and
one or more additional Paying Agents.

     The Obligors shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture.  The agreement shall implement the
provisions of this Indenture that relate to such Agent.  The Obligors shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent.  If the Obligors fails to maintain
a Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands.  The Obligors may remove any Agent upon written notice to
such Agent and the Trustee; provided that no such removal shall become effective
until (i) the acceptance of an appointment by a successor Agent to such Agent as
evidenced by an appropriate agency agreement entered into by the Obligors and
such successor Agent and delivered to the Trustee or (ii) notification to the
Trustee that the Trustee shall serve as such Agent until the appointment of a
successor Agent in accordance with clause (i) of this proviso.  The Obligors,
any Subsidiary of the Obligors, or any Affiliate of any of them may act as
Paying Agent, Registrar or co-Registrar, and/or agent for service of notice and
demands.

     The Obligors initially appoint the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands.  The Trustee
shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders and shall otherwise
comply with TIA (S)312(a).  If, at any time, the Trustee is not the Registrar,
the Registrar shall make available to the Trustee as of each Regular Record Date
and at such other 

<PAGE>
 
                                       29

times as the Trustee may reasonably request, the names and addresses of the
Holders as they appear in the Security Register, including the aggregate
principal amount at maturity of Notes held by each Holder.

      SECTION 2.05.  Paying Agent to Hold Money in Trust.  Not later than 11:00
                     -----------------------------------                       
a.m. (New York City time) on each due date of the principal, premium, if any,
and interest on any Notes, the Obligors shall deposit with the Paying Agent
money in immediately available funds sufficient to pay such principal, premium,
if any, and interest so becoming due.  The Obligors shall require each Paying
Agent other than the Trustee to agree in writing that such Paying Agent shall
hold in trust for the benefit of the Holders or the Trustee all money held by
the Paying Agent for the payment of principal of, premium, if any, and interest
on the Notes (whether such money has been paid to it by the Obligors or any
other obligor on the Notes), and such Paying Agent shall promptly notify the
Trustee of any default by the Obligors (or any other obligor on the Notes) in
making any such payment.  The Obligors at any time may require a Paying Agent to
pay all money held by it to the Trustee and account for any funds disbursed, and
the Trustee may at any time during the continuance of any payment default, upon
written request to a Paying Agent, require such Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed.  Upon doing
so, the Paying Agent shall have no further liability for the money so paid over
to the Trustee. If the Obligors or any Subsidiary of the Obligors or any
Affiliate of any of them acts as Paying Agent, it will, on or before each due
date of any principal of, premium, if any, or interest on the Notes, segregate
and hold in a separate trust fund for the benefit of the Holders a sum of money
sufficient to pay such principal, premium, if any, or interest so becoming due
until such sum of money shall be paid to such Holders or otherwise disposed of
as provided in this Indenture, and will promptly notify the Trustee of its
action or failure to act.

      SECTION 2.06.  Transfer and Exchange.  The Notes are issuable only in
                     ---------------------                                 
registered form. A Holder may transfer a Note only by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture.  No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon registration
of the transfer by the Registrar in the Security Register.  Prior to the
registration of any transfer by a Holder as provided herein, the Obligors, the
Company, the Trustee, and any agent of the Obligors or the Company shall treat
the person in whose name the Note is registered as the owner thereof for all
purposes whether or not the Note shall be overdue, and neither the Obligors, the
Company, the Trustee, nor any such agent shall be affected by notice to the
contrary. Furthermore, any Holder of a Global Note shall, by acceptance of such
Global Note, agree that transfers of beneficial interests in such Global Note
may be effected only through a book entry system maintained by the Holder of
such Global Note (or its agent) and that ownership of a beneficial interest in
the Note shall be required to be reflected in a book entry.  When Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer or to exchange them for an equal principal amount at maturity of Notes
of other authorized denominations (including an exchange of Notes for Exchange
Notes), the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met (including that 

<PAGE>
 
                                       30

such Notes are duly endorsed or accompanied by a written instrument of transfer
in form satisfactory to the Trustee and Registrar duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder); provided that no exchanges of Notes for Exchange Notes shall occur
until a Registration Statement shall have been declared effective by the
Commission and that any Notes that are exchanged for Exchange Notes shall be
canceled by the Trustee. To permit registrations of transfers and exchanges, the
Obligors shall execute and the Trustee shall authenticate Notes at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange or redemption of the Notes, but the Obligors may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
other similar governmental charge payable upon exchanges pursuant to Section
2.11, 3.08 or 9.04).

     The Registrar shall not be required (i) to issue, register the transfer of
or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.03 and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.

     SECTION 2.07.  Book-Entry Provisions for Global Notes.  (a)  The U.S.
                    --------------------------------------                
Global Notes and Offshore Global Notes initially shall (i) be registered in the
name of the Depositary for such Global Notes or the nominee of such Depositary,
(ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear
legends as set forth in Section 2.02.

     Members of, or participants in, the Depositary ("Agent Members") shall have
                                                      -------------             
no rights under this Indenture with respect to any Global Note held on their
behalf by the Depositary, or the Trustee as its custodian, or under such Global
Note, and the Depositary may be treated by the Obligors, the Company, the
Trustee and any agent of the Obligors, the Company or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Obligors, the Company, the
Trustee or any agent of the Obligors, the Company or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
holder of any Note.

     (b) Transfers of a Global Note shall be limited to transfers of such Global
Note in whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in a Global Note may be
transferred in accordance with the rules and procedures of the Depositary and
the provisions of Section 2.08.  In addition, U.S. Physical Notes and Offshore
Physical Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in the U.S. Global Notes or the Offshore Global
Notes, as the case may be, (i) if the Depositary notifies the Obligors that it
is unwilling or unable to continue as Depositary for 

<PAGE>
 
                                       31



the U.S. Global Notes or the Offshore Global Notes, as the case may be, and a
successor depositary is not appointed by the Obligors within 90 days of such
notice, (ii) if an Event of Default has occurred and is continuing and the
Registrar has received a request therefor from the Depositary or (iii) in
accordance with the rules and procedures of the Depositary and the provisions of
Section 2.08.

     (c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in such other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.

     (d) In connection with any transfer of a portion of the beneficial
interests in a Global Note to beneficial owners pursuant to paragraph (b) of
this Section 2.07, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount at maturity of such Global Note in an
amount equal to the principal amount at maturity of the beneficial interest in
such Global Note to be transferred, and the Obligors shall execute, and the
Trustee shall authenticate and deliver, one or more U.S. Physical Notes or
Offshore Physical Notes, as the case may be, of like tenor and amount.

     (e) In connection with the transfer of the U.S. Global Notes or Offshore
Global Notes, in whole, to beneficial owners pursuant to paragraph (b) of this
Section 2.07, the U.S. Global Notes or Offshore Global Notes, as the case may
be, shall be deemed to be surrendered to the Trustee for cancellation, and the
Obligors shall execute, and the Trustee shall authenticate and make available
for delivery, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the U.S. Global Notes or Offshore Global Notes,
as the case may be, an equal aggregate principal amount at maturity of U.S.
Physical Notes or Offshore Physical Notes, as the case may be, of authorized
denominations.

     (f) Any U.S. Physical Note delivered in exchange for an interest in the
U.S. Global Notes pursuant to paragraph (b), (d) or (e) of this Section 2.07
shall, except as otherwise provided by paragraph (f) of Section 2.08, bear the
legend regarding transfer restrictions applicable to the U.S. Physical Note set
forth in Section 2.02.

     (g) Any Offshore Physical Note delivered in exchange for an interest in the
Offshore Global Notes pursuant to paragraph (b), (d) or (e) of this Section 2.07
shall, except as otherwise provided by paragraph (f) of Section 2.08, bear the
legend regarding transfer restrictions applicable to the Offshore Physical Note
set forth in Section 2.02.

     (h) The registered holder of a Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.

<PAGE>
 
                                       32


     SECTION 2.08.  Special Transfer Provisions.  Unless and until a Note is
                    ---------------------------                             
exchanged for an Exchange Note or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:

     (a)  Transfers to Non-QIB Institutional Accredited Investors.  The 
          -------------------------------------------------------
following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):

          (i)  The Registrar shall register the transfer of any Note, whether or
     not such Note bears the Private Placement Legend, if (x) the transferor
     certifies that the requested transfer is after the time period referred to
     in Rule 144(k) under the Securities Act or (y) the proposed transferee has
     delivered to the Registrar (A) a certificate substantially in the form of
     Exhibit C hereto and (B) if the aggregate Accreted Value of the Notes at
     the time of transfer is less than $100,000, an opinion of counsel
     acceptable to the Obligors that such transfer is in compliance with the
     Securities Act.

          (ii) If the proposed transferor is an Agent Member holding a
     beneficial interest in the U.S. Global Notes, upon receipt by the Registrar
     of (x) the documents, if any, required by paragraph (i) above and (y)
     instructions given in accordance with the Depositary's and the Registrar's
     procedures, the Registrar shall reflect on its books and records the date
     and a decrease in the principal amount at maturity of the U.S. Global Notes
     in an amount equal to the principal amount at maturity of the beneficial
     interest in the U.S. Global Notes to be transferred, and the Obligors shall
     execute, and the Trustee shall authenticate and deliver, one or more U.S.
     Physical Notes of like tenor and amount.

     (b)  Transfers to QIBs.  The following provisions shall apply with respect
          -----------------                                                    
to the registration of any proposed transfer of a Note to a QIB (excluding Non-
U.S. Persons):

          (i) If the Note to be transferred consists of (x) either Offshore
     Physical Notes prior to the removal of the Private Placement Legend or U.S.
     Physical Notes, the Registrar shall register the transfer if such transfer
     is being made by a proposed transferor who has checked the box provided for
     on the form of Note stating, or has otherwise advised the Obligors and the
     Registrar in writing, that the sale has been made in compliance with the
     provisions of Rule 144A to a transferee who has signed the certification
     provided for on the form of Note stating, or has otherwise advised the
     Obligors and the Registrar in writing, that it is purchasing the Note for
     its own account or an account with respect to which it exercises sole
     investment discretion and that it and any such account is a QIB within the
     meaning of Rule 144A and is aware that the sale to it is being made in
     reliance on Rule 144A and acknowledges that it has received such
     information regarding the Obligors as it has requested pursuant to Rule
     144A or has determined not to request such information and that it is aware
     that the transferor is relying upon its foregoing representations in order
     to claim the exemption from registration provided by Rule 144A 

<PAGE>
 
                                       33


     or (y) an interest in the U.S. Global Notes, the transfer of such interest
     may be effected only through the book entry system maintained by the
     Depositary.

          (ii) If the proposed transferee is an Agent Member, and the Note to be
     transferred consists of U.S. Physical Notes, upon receipt by the Registrar
     of the documents referred to in clause (i) above and instructions given in
     accordance with the Depositary's and the Registrar's procedures, the
     Registrar shall reflect on its books and records the date and an increase
     in the principal amount at maturity of the U.S. Global Notes in an amount
     equal to the principal amount at maturity of the U.S. Physical Notes to be
     transferred, and the Trustee shall cancel the U.S. Physical Notes so
     transferred.

     (c) Transfers of Interests in the Temporary Offshore Global Notes.  The
         -------------------------------------------------------------      
following provisions shall apply with respect to registration of any proposed
transfer of interests in the Temporary Offshore Global Notes:

          (i)  The Registrar shall register the transfer of any Note (x) if the
     proposed transferee is a Non-U.S. Person and the proposed transferor has
     delivered to the Registrar a certificate substantially in the form of
     Exhibit D hereto or (y) if the proposed transferee is a QIB and the
     proposed transferor has checked the box provided for on the form of Note
     stating, or has otherwise advised the Obligors and the Registrar in
     writing, that the sale has been made in compliance with the provisions of
     Rule 144A to a transferee who has signed the certification provided for on
     the form of Note stating, or has otherwise advised the Obligors and the
     Registrar in writing, that it is purchasing the Note for its own account or
     an account with respect to which it exercises sole investment discretion
     and that it and any such account is a QIB within the meaning of Rule 144A,
     and is aware that the sale to it is being made in reliance on Rule 144A and
     acknowledges that it has received such information regarding the Obligors
     as it has requested pursuant to Rule 144A or has determined not to request
     such information and that it is aware that the transferor is relying upon
     its foregoing representations in order to claim the exemption from
     registration provided by Rule 144A.

          (ii) If the proposed transferee is an Agent Member, upon receipt by
     the Registrar of the documents referred to in clause (i)(y) above and
     instructions given in accordance with the Depositary's and the Registrar's
     procedures, the Registrar shall reflect on its books and records the date
     and an increase in the principal amount at maturity of the U.S. Global
     Notes in an amount equal to the principal amount at maturity of the
     Temporary Offshore Global Notes to be transferred, and the Trustee shall
     decrease the amount of the Temporary Offshore Global Notes in such an
     amount.

     (d) Transfers of Interests in the Permanent Offshore Global Notes or
         ----------------------------------------------------------------
Unlegended Offshore Physical Notes.  The following provisions shall apply with
- ----------------------------------                                            
respect to any transfer of 

<PAGE>
 
                                       34


interests in the Permanent Offshore Global Notes or unlegended Offshore Physical
Notes. The Registrar shall register the transfer of any such Note without
requiring any additional certification.

     (e)  Transfers to Non-U.S. Persons at Any Time.  The following provisions
          -----------------------------------------                           
shall apply with respect to any transfer of a Note to a Non-U.S. Person:

          (i)   Prior to May 19, 1998, the Registrar shall register any proposed
     transfer of a Note to a Non-U.S. Person upon receipt of a certificate
     substantially in the form of Exhibit D hereto from the proposed transferor.

          (ii)  On and after May 19, 1998, the Registrar shall register any
     proposed transfer to any Non-U.S. Person if the Note to be transferred is a
     U.S. Physical Note or an interest in the U.S. Global Notes, upon receipt of
     a certificate substantially in the form of Exhibit D hereto from the
     proposed transferor.

          (iii) (a) If the proposed transferor is an Agent Member holding a
     beneficial interest in the U.S. Global Notes, upon receipt by the Registrar
     of (x) the documents, if any, required by paragraph (ii) and (y)
     instructions in accordance with the Depositary's and the Registrar's
     procedures, the Registrar shall reflect on its books and records the date
     and a decrease in the principal amount at maturity of the U.S. Global Notes
     in an amount equal to the principal amount at maturity of the beneficial
     interest in the U.S. Global Notes to be transferred, and (b) if the
     proposed transferee is an Agent Member, upon receipt by the Registrar of
     instructions given in accordance with the Depositary's and the Registrar's
     procedures, the Registrar shall reflect on its books and records the date
     and an increase in the principal amount at maturity of the Offshore Global
     Notes in an amount equal to the principal amount at maturity of the U.S.
     Physical Notes or the U.S. Global Notes, as the case may be, to be
     transferred, and the Trustee shall cancel the Physical Note, if any, so
     transferred or decrease the amount of the U.S. Global Notes.

     (f) Private Placement Legend.  Upon the transfer, exchange or replacement
         ------------------------                                             
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of Notes bearing the Private Placement Legend, the Registrar
shall deliver only Notes that bear the Private Placement Legend unless either
(i) the circumstances contemplated by the second sentence of the fourth
paragraph of Section 2.01 or paragraphs (a)(i)(x) or (e)(ii) of this Section
2.08 exist or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Obligors and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.

     (g) General.  By its acceptance of any Note bearing the Private Placement
         -------                                                              
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as 

<PAGE>
 
                                       35


provided in this Indenture. The Registrar shall not register a transfer of any
Note unless such transfer complies with the restrictions on transfer of such
Note set forth in this Indenture. In connection with any transfer of Notes, each
Holder agrees by its acceptance of the Notes to furnish the Registrar or the
Obligors such certifications, legal opinions or other information as either of
them may reasonably require to confirm that such transfer is being made pursuant
to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; provided that the Registrar shall not be
required to determine (but may rely on a determination made by the Obligors with
respect to) the sufficiency of any such certifications, legal opinions or other
information.

     The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.07 or this Section 2.08 for a
period of time required by applicable law. The Obligors shall have the right to
inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.

     SECTION 2.09.  Replacement Notes.  If a mutilated Note is surrendered to
                    -----------------                                        
the Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, then, in the absence of notice to the Obligors or the Trustee
that such Note has been acquired by a bona fide purchase, the Obligors shall
issue and the Trustee shall authenticate a replacement Note of like tenor and
principal amount and bearing a number not contemporaneously outstanding;
provided that the requirements of this Section 2.09 are met.  If required by the
Trustee or the Obligors, an indemnity bond must be furnished that is sufficient
in the judgment of both the Trustee and the Obligors to protect the Obligors,
the Trustee or any Agent from any loss that any of them may suffer if a Note is
replaced.  The Obligors may charge such Holder for its expenses and the expenses
of the Trustee in replacing a Note.  In case any such mutilated, lost, destroyed
or wrongfully taken Note has become or is about to become due and payable, the
Obligors in their discretion may pay such Note instead of issuing a new Note in
replacement thereof.

     Every replacement Note is an additional obligation of the Obligors and
shall be entitled to the benefits of this Indenture.

     SECTION 2.10.  Outstanding Notes.  Notes outstanding at any time are all
                    -----------------                                        
Notes that have been authenticated by the Trustee except for those canceled by
it, those delivered to it for cancellation and those described in this Section
2.10 as not outstanding.

     If a Note is replaced pursuant to Section 2.09, it ceases to be outstanding
unless and until the Trustee and the Obligors receive proof satisfactory to them
that the replaced Note is held by a bona fide purchaser.

<PAGE>
 
                                       36


     If the Paying Agent (other than the Obligors or an Affiliate of the
Obligors) holds on the maturity date money sufficient to pay Notes payable on
that date, then on and after that date such Notes cease to be outstanding and
interest on them shall cease to accrue.

     A Note does not cease to be outstanding because the Obligors or one of its
Affiliates holds such Note, provided, however, that in determining whether the
Holders of the requisite principal amount of the outstanding Notes have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Obligors or any other obligor upon the Notes or
any Affiliate of the Obligors or of such other obligor shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer of
the Trustee actually knows to be so owned shall be so disregarded.  Notes so
owned which have been pledged in good faith may be regarded as outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Obligors or
any other obligor upon the Notes or any Affiliate of the Obligors or of such
other obligor.

     SECTION 2.11.  Temporary Notes.  Until definitive Notes are ready for
                    ---------------                                       
delivery, the Obligors may prepare and the Trustee shall authenticate temporary
Notes.  Temporary Notes shall be substantially in the form of definitive Notes
but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the Officers executing the temporary Notes, as
evidenced by their execution of such temporary Notes.  If temporary Notes are
issued, the Obligors will cause definitive Notes to be prepared without
unreasonable delay.  After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Obligors designated for such purpose
pursuant to Section 4.02, without charge to the Holder.  Upon surrender for
cancellation of any one or more temporary Notes the Obligors shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations.  Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.

     SECTION 2.12.  Cancellation.  The Obligors at any time may deliver to the
                    ------------                                              
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Obligors may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Obligors have not issued and sold.  The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
transfer, exchange or payment.  The Trustee shall cancel all Notes surrendered
for transfer, exchange, payment or cancellation in accordance with its normal
procedure.

     SECTION 2.13.  CUSIP Numbers.  The Obligors in issuing the Notes may use
                    -------------                                            
"CUSIP", "CINS" or "ISIN" numbers (if then generally in use), and the Trustee
shall use CUSIP, CINS or ISIN numbers, as the case may be, in notices of
redemption or exchange as a convenience to 

<PAGE>
 
                                       37


Holders; provided that any such notice shall state that no representation is
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of redemption or exchange and that reliance may be
placed only on the other identification numbers printed on the Notes and any
such redemption shall not be affected by any defect or omission of such numbers.
The Obligors will promptly notify the Trustee of any change in the "CUSIP,"
"CINS" or "ISIN" numbers.

     SECTION 2.14.  Defaulted Interest.  If the Obligors default in a payment
                    ------------------                                       
of interest on the Notes, they shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date.  A special
record date, as used in this Section 2.14 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Obligors for the payment of defaulted interest, whether or not such day is a
Business Day.  At least 15 days before the subsequent special record date, the
Obligors shall mail to each Holder and the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.

     SECTION 2.15.  Issuance of Additional Notes.  The Obligors may, subject to
                    ----------------------------                               
Article Four of this Indenture and applicable law, issue additional Notes under
this Indenture.  The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.


                                 ARTICLE THREE
                                   REDEMPTION

     SECTION 3.01.  Right of Redemption. (a)  The Notes may be redeemed, at the
                    -------------------                                        
Obligors' option, in whole or in part, at any time or from time to time, on or
after  April 15, 2003 and prior to maturity, upon not less than 30 nor more than
60 days' prior notice mailed by first-class mail to each Holder's last address,
as it appears in the Security Register, at the following Redemption Prices
(expressed in percentages of principal amount at maturity), plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing April 15 of the years set forth
below:

<PAGE>
 
                                       38

                                      Redemption
               Year                      Price
               ----                   ----------
               2003.................     105.000%
               2004.................     103.333
               2005.................     101.667
               2006 and thereafter..     100.000

     (b) In addition, at any time prior to April 15, 2001, the Obligors may
redeem up to 35% of the principal amount at maturity of the Notes with the
proceeds of one or more sales of Capital Stock (other than Disqualified Stock)
of the Company or an Obligor to a Person other than the Company or any
Subsidiary of the Company, at any time or from time to time in part, at a
Redemption Price (expressed as a percentage of Accreted Value on the Redemption
Date) of 110.000%; provided that at least $106.0 million aggregate principal
amount at maturity of Notes remains outstanding after each such redemption and
notice of any such redemption is mailed within 60 days after the related sale of
Capital Stock.

     SECTION 3.02.  Notices to Trustee.  If the Obligors elect to redeem Notes
                    ------------------                                        
pursuant to Section 3.01(a) or 3.01(b), they shall notify the Trustee in writing
of the Redemption Date and the principal amount at maturity of Notes to be
redeemed and the clause of this Indenture pursuant to which redemption shall
occur.

     The Obligors shall give each notice provided for in this Section 3.02 in an
Officers' Certificate at least 45 days before the Redemption Date (unless a
shorter period shall be satisfactory to the Trustee).

     SECTION 3.03.  Selection of Notes to Be Redeemed.  If less than all of the
                    ---------------------------------                          
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed in compliance with the requirements, as certified to it by the
Obligors, of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not listed on a national securities
exchange, by lot or by such other method as the Trustee in its sole discretion
shall deem fair and appropriate; provided that no Notes of $1,000 in principal
amount at maturity or less shall be redeemed in part.

     The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption.  Notes in denominations of $1,000 in principal
amount at maturity may only be redeemed in whole.  The Trustee may select for
redemption portions (equal to $1,000 in principal amount at maturity or any
integral multiple thereof) of Notes that have denominations larger than $1,000
in principal amount at maturity.  Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.  The Trustee shall notify the Obligors and the Registrar promptly in
writing of the Notes or portions of Notes to be called for redemption.

<PAGE>
 
                                       39


     SECTION 3.04.  Notice of Redemption.  With respect to any redemption of
                    --------------------                                    
Notes pursuant to Section 3.01(a) or 3.01(b), at least 30 days but not more than
60 days before a Redemption Date, the Obligors shall mail a notice of redemption
by first-class mail to each Holder whose Notes are to be redeemed.

     The notice shall identify the Notes (including CUSIP, CINS or ISIN numbers)
to be redeemed and shall state:

          (i)    the Redemption Date;

          (ii)   the Redemption Price;

          (iii)  the name and address of the Paying Agent;

          (iv)   that Notes called for redemption must be surrendered to the
     Paying Agent in order to collect the Redemption Price;

          (v)    that, unless the Obligors default in making the redemption
     payment, interest on Notes called for redemption ceases to accrue on and
     after the Redemption Date and the only remaining right of the Holders is to
     receive payment of the Redemption Price plus accrued interest to the
     Redemption Date upon surrender of the Notes to the Paying Agent;

          (vi)   that, if any Note is being redeemed in part, the portion of the
     principal amount at maturity (equal to $1,000 in principal amount at
     maturity or any integral multiple thereof) of such Note to be redeemed and
     that, on and after the Redemption Date, upon surrender of such Note, a new
     Note or Notes in principal amount at maturity equal to the unredeemed
     portion thereof will be reissued; and

          (vii)  that, if any Note contains a CUSIP, CINS or ISIN number as
     provided in Section 2.13, no representation is being made as to the
     correctness of the CUSIP, CINS or ISIN number either as printed on the
     Notes or as contained in the notice of redemption and that reliance may be
     placed only on the other identification numbers printed on the Notes.

     At the Obligors' request (which request may be revoked by the Obligors at
any time prior to the time at which the Trustee shall have given such notice to
the Holders), made in writing to the Trustee at least 45 days (or such shorter
period as shall be satisfactory to the Trustee) before a Redemption Date, the
Trustee shall give the notice of redemption in the name and at the expense of
the Obligors.  If, however, the Obligors give such notice to the Holders, the
Obligors shall concurrently deliver to the Trustee an Officers' Certificate
stating that such notice has been given.

<PAGE>
 
                                       40


     SECTION 3.05.  Effect of Notice of Redemption.  Once notice of redemption
                    ------------------------------                            
is mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price.  Upon surrender of any Notes to the Paying
Agent, such Notes shall be paid at the Redemption Price, plus accrued interest,
if any, to the Redemption Date.

     Notice of redemption shall be deemed to be given when mailed, whether or
not the Holder receives the notice.  In any event, failure to give such notice,
or any defect therein, shall not affect the validity of the proceedings for the
redemption of Notes held by Holders to whom such notice was properly given.

     SECTION 3.06.  Deposit of Redemption Price.  On or prior to any Redemption
                    ---------------------------                                
Date, the Obligors shall deposit with the Paying Agent (or, if the Obligors are
acting as their own Paying Agent, shall segregate and hold in trust as provided
in Section 2.05) money sufficient to pay the Redemption Price of and accrued
interest on all Notes to be redeemed on that date other than Notes or portions
thereof called for redemption on that date that have been delivered by the
Obligors to the Trustee for cancellation.

     SECTION 3.07.  Payment of Notes Called for Redemption.  If notice of
                    --------------------------------------               
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless the
Obligors shall default in the payment of such Notes at the Redemption Price and
accrued interest to the Redemption Date, in which case the principal, until
paid, shall bear interest from the Redemption Date at the rate prescribed in the
Notes), such Notes shall cease to accrue interest. Upon surrender of any Note
for redemption in accordance with a notice of redemption, such Note shall be
paid and redeemed by the Obligors at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders registered as such at the close of business on the relevant Regular
Record Date.

     SECTION 3.08.  Notes Redeemed in Part.  Upon surrender of any Note that is
                    ----------------------                                     
redeemed in part, the Obligors shall execute and the Trustee shall authenticate
and deliver to the Holder without service charge a new Note equal in principal
amount at maturity to the unredeemed portion of such surrendered Note.

<PAGE>
 
                                       41


                                 ARTICLE FOUR
                                   COVENANTS

     SECTION 4.01.  Payment of Notes.  The Obligors shall, jointly and
                    ----------------                                  
severally, pay the principal of, premium, if any, and interest on the Notes on
the dates and in the manner provided in the Notes and this Indenture.  An
installment of principal, premium, if any, or interest shall be considered paid
on the date due if the Trustee or Paying Agent (other than the Obligors, a
Subsidiary of the Obligors, or any Affiliate of any of them) holds on that date
money designated for and sufficient to pay the installment.  If the Obligors or
any Subsidiary of the Obligors or any Affiliate of any of them acts as Paying
Agent, an installment of principal, premium, if any, or interest shall be
considered paid on the due date if the entity acting as Paying Agent complies
with the last sentence of Section 2.05.  As provided in Section 6.09, upon any
bankruptcy or reorganization procedure relative to the Obligors, the Trustee
shall serve as the Paying Agent, if any, for the Notes.

     The Obligors shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.

     SECTION 4.02.  Maintenance of Office or Agency.  The Obligors will
                    -------------------------------                    
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Obligors
in respect of the Notes and this Indenture may be served.  The Obligors will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency.  If at any time the Obligors shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 11.02.

     The Obligors may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no
such designation or rescission shall in any manner relieve the Obligors of their
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes.  The Obligors shall give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

     The Obligors hereby initially designate the Corporate Trust Office of the
Trustee as such office of the Obligors in accordance with Section 2.04.

      SECTION 4.03.  Limitation on Indebtedness.  (a) The Company will not, and
                     --------------------------                                
will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(other than the Notes, the Guaranty and Indebtedness existing on the Closing
Date); provided that the Company or any 

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                                       42


Obligor may Incur Indebtedness if, after giving effect to the Incurrence of such
Indebtedness and the receipt and application of the proceeds therefrom, the
Consolidated Leverage Ratio would be greater than zero and (x) less than or
equal to 7.25 to 1, for Indebtedness Incurred on or prior to December 31, 1999,
or (y) less than or equal to 6.75 to 1, for Indebtedness Incurred thereafter.

     Notwithstanding the foregoing, the Company and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following: (i)
Indebtedness outstanding at any time in an aggregate principal amount not to
exceed the greater of (x) $200 million, less any amount of such Indebtedness
permanently repaid as provided under Section 4.11 and (y) an amount equal to 4.5
times the Company's Consolidated EBITDA for the then most recent fiscal quarter
for which financial statements of the Company have been filed with the
Commission (giving pro forma effect to any Asset Acquisitions and Asset
Dispositions as provided under the definition of "Consolidated Leverage Ratio")
multiplied by four; (ii) Indebtedness owed (A) to the Company or any Obligor
evidenced by a promissory note or (B) to any other Restricted Subsidiary;
provided that any event which results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness
(other than to the Company or another Restricted Subsidiary) shall be deemed, in
each case, to constitute an Incurrence of such Indebtedness not permitted by
this clause (ii); (iii) Indebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding Indebtedness (other
than Indebtedness Incurred under clause (i), (ii), (iv), (vi), (vii) or (viii)
of this paragraph) and any refinancings thereof in an amount not to exceed the
amount so refinanced or refunded (plus premiums, accrued interest, fees and
expenses); provided that Indebtedness the proceeds of which are used to
refinance or refund the Notes and the Guaranty or Indebtedness that is pari
passu with, or subordinated in right of payment to, the Notes and the Guaranty
shall only be permitted under this clause (iii) if (A) in case the Notes and the
Guaranty are refinanced in part or the Indebtedness to be refinanced is pari
passu with the Notes and the Guaranty, such new Indebtedness, by its terms or by
the terms of any agreement or instrument pursuant to which such new Indebtedness
is outstanding, is expressly made pari passu with, or subordinate in right of
payment to, the remaining Notes and the Guaranty, (B) in case the Indebtedness
to be refinanced is subordinated in right of payment to the Notes and the
Guaranty, such new Indebtedness, by its terms or by the terms of any agreement
or instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the Notes and
the Guaranty at least to the extent that the Indebtedness to be refinanced is
subordinated to the Notes and the Guaranty and (C) such new Indebtedness,
determined as of the date of Incurrence of such new Indebtedness, does not
mature prior to the Stated Maturity of the Indebtedness to be refinanced or
refunded, and the Average Life of such new Indebtedness is at least equal to the
remaining Average Life of the Indebtedness to be refinanced or refunded; and
provided further that in no event may Indebtedness of the Company or the
Obligors be refinanced by means of any Indebtedness of any Restricted Subsidiary
other than the Obligors pursuant to this clause (iii); (iv) Indebtedness (A) in
respect of performance, surety or appeal bonds, performance guarantees or
similar obligations securing the Company's or any Restricted Subsidiary's
obligations under any cable television franchise, pole attachment agreement or
lease or other similar agreement incurred in the ordinary course of business and
entered into in 

<PAGE>
 
                                       43


connection with the day-to-day operations of such business, (B) under Currency
Agreements and Interest Rate Agreements; provided that such agreements (a) are
designed solely to protect the Company or its Restricted Subsidiaries against
fluctuations in foreign currency exchange rates or interest rates and (b) do not
increase the Indebtedness of the obligor outstanding at any time other than as a
result of fluctuations in foreign currency exchange rates or interest rates or
by reason of fees, indemnities and compensation payable thereunder; and (C)
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from Guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted Subsidiary
(other than Guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary for the purpose of
financing such acquisition), in a principal amount not to exceed the gross
proceeds actually received by the Company or any Restricted Subsidiary in
connection with such disposition; (v) Indebtedness of the Company or the
Obligors, to the extent the net proceeds thereof are promptly (A) used to
purchase Notes tendered in an Offer to Purchase made as a result of a Change in
Control or (B) deposited to defease the Notes as described under Article Eight;
(vi) Guarantees of the Notes and Guarantees of Indebtedness of the Company or
the Obligors by any Restricted Subsidiary provided the Guarantee of such
Indebtedness is permitted by and made in accordance with Section 4.07; (vii)
Indebtedness Incurred to finance the cost to acquire equipment, inventory or
other assets used or useful in the business of the Company and its Restricted
Subsidiaries (including acquisitions by way of a Capitalized Lease and the
acquisition of the Capital Stock of a Person that becomes a Restricted
Subsidiary), in an aggregate principal amount outstanding at any time not to
exceed 5% of the Company's total assets as set forth on the most recently
available quarterly or annual consolidated balance sheet of the Company and its
Restricted Subsidiaries filed with the Commission; (viii) Indebtedness of the
Company or any Obligor not to exceed, at any one time outstanding, two times the
sum of (A) the Net Cash Proceeds received by the Company or an Obligor after the
Closing Date as a capital contribution (other than a capital contribution by the
Company or any Subsidiary of the Company) or from the sale of its Capital Stock
(other than Disqualified Stock) to a Person other than the Company or any
Subsidiary of the Company, to the extent such capital contribution or sale of
Capital Stock has not been used pursuant to clause (C)(2) of the first paragraph
or clause (iii), or (iv) of the second paragraph of Section 4.04 to make a
Restricted Payment and (B) 80% of the fair market value of property (other than
cash and cash equivalents) received by the Company or an Obligor after the
Closing Date as a capital contribution (other than a capital contribution by the
Company or any Subsidiary of the Company) or from the sale of its Capital Stock
(other than Disqualified Stock) to a Person other than the Company or any
Subsidiary of the Company, to the extent such capital contribution or sale of
Capital Stock has not been used pursuant to clause (iii), (iv) or (vi) of the
second paragraph of Section 4.04 to make a Restricted Payment; provided that
such Indebtedness does not mature prior to the Stated Maturity of the Notes and
has an Average Life longer than the Notes; and (ix) Acquired Indebtedness;
provided that after giving effect to the Incurrence thereof, the Company could
Incur at least $1.00 of Indebtedness under the first paragraph of Section 4.03.

<PAGE>
 
                                       44


     (b) Notwithstanding any other provision of this Section 4.03, the maximum
amount of Indebtedness that the Company or a Restricted Subsidiary may Incur
pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect
to any outstanding Indebtedness due solely to the result of fluctuations in the
exchange rates of currencies.

     (c) For purposes of determining any particular amount of Indebtedness under
this Section 4.03, (1) Indebtedness Incurred under the Credit Agreement on or
prior to the Closing Date shall be treated as Incurred pursuant to clause (i) of
the second paragraph of this Section 4.03, (2) Guarantees, Liens or obligations
with respect to letters of credit supporting Indebtedness otherwise included in
the determination of such particular amount shall not be included and (3) any
Liens granted pursuant to the equal and ratable provisions referred to in
Section 4.09 shall not be treated as Indebtedness. For purposes of determining
compliance with this Section 4.03, in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness described in
the above clauses (other than Indebtedness referred to in clause (1) of the
preceding sentence), the Company, in its sole discretion, shall classify, and
from time to time may reclassify, such item of Indebtedness and only be required
to include the amount and type of such Indebtedness in one of such clauses;
provided that any Indebtedness Incurred under any of clauses (i) through (ix) of
the second paragraph of this Section 4.03 shall be deemed to be no longer
outstanding under any such clauses and shall be deemed to have been Incurred
under the first paragraph of this Section 4.03 on the first date on which the
Company could have Incurred such Indebtedness under the first paragraph of this
Section 4.03 if no Default or Event of Default would be continuing after giving
effect to such Incurrence.

     SECTION 4.04.  Limitation on Restricted Payments.  The Company will not,
                    ---------------------------------                        
and will not permit any Restricted Subsidiary to, directly or indirectly, (i)
declare or pay any dividend or make any distribution on or with respect to its
Capital Stock held by Persons other than the Company or any of its Restricted
Subsidiaries (other than (x) dividends or distributions payable solely in shares
of its Capital Stock (other than Disqualified Stock) or in options, warrants or
other rights to acquire shares of such Capital Stock and (y) pro rata dividends
or distributions on Common Stock of Restricted Subsidiaries other than the
Obligors held by minority stockholders), (ii) purchase, redeem, retire or
otherwise acquire for value any shares of Capital Stock of (A) the Company, an
Obligor or an Unrestricted Subsidiary (including options, warrants or other
rights to acquire such shares of Capital Stock) held by any Person (other than
the Company or a Wholly Owned Restricted Subsidiary) or (B) any Restricted
Subsidiary other than the Obligors (including options, warrants or other rights
to acquire such shares of Capital Stock) held by any Affiliate of the Company or
any Obligor (other than a Wholly Owned Restricted Subsidiary) or any holder (or
any Affiliate of such holder) of 5% or more of the Capital Stock of the Company
or any Obligor, (iii) make any voluntary or optional principal payment, or
voluntary or optional redemption, repurchase, defeasance, or other acquisition
or retirement for value, of Indebtedness of the Company that is subordinated in
right of payment to the Guaranty or Indebtedness of an Obligor that is
subordinated in right of payment to the Notes or (iv) make any Investment, other
than a Permitted Investment, in any Person (such payments or any other actions
described in clauses (i) 

<PAGE>
 
                                       45


through (iv) above being collectively "Restricted Payments") if, at the time 
                                       ---------- -------- 
of, and after giving effect to, the proposed Restricted Payment: (A) a Default
or Event of Default shall have occurred and be continuing, (B) the Company could
not Incur at least $1.00 of Indebtedness under the first paragraph of Section
4.03 or (C) the aggregate amount of all Restricted Payments (the amount, if
other than in cash, to be determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a Board Resolution)
made after the Closing Date shall exceed the sum of (1) the amount by which
Consolidated EBITDA exceeds 130% of Consolidated Interest Expense, in each case,
determined on a cumulative basis during the period (taken as one accounting
period) beginning on the first day of the fiscal quarter immediately following
the Closing Date and ending on the last day of the last fiscal quarter preceding
the Transaction Date for which reports have been filed with the Commission or
provided to the Trustee pursuant to Section 4.18 plus (2) the aggregate Net Cash
Proceeds received by the Company or an Obligor after the Closing Date as a
capital contribution (other than a capital contribution by the Company or any
Subsidiary of the Company) or from the issuance and sale permitted by this
Indenture of its Capital Stock (other than Disqualified Stock) to a Person other
than the Company or any Subsidiary of the Company, including an issuance or sale
permitted by this Indenture of Indebtedness of the Company or an Obligor for
cash subsequent to the Closing Date upon the conversion of such Indebtedness
into Capital Stock (other than Disqualified Stock) of the Company or such
Obligor, or from the issuance to a Person other than the Company or any
Subsidiary of the Company of any options, warrants or other rights to acquire
Capital Stock of the Company or an Obligor (in each case, exclusive of any
Disqualified Stock or any options, warrants or other rights that are redeemable
at the option of the holder, or are required to be redeemed, prior to the Stated
Maturity of the Notes), in each case except to the extent such Net Cash Proceeds
are used to Incur Indebtedness outstanding under clause (viii) of the second
paragraph under Section 4.03, plus (3) an amount equal to the net reduction in
Investments (other than reductions in Permitted Investments) in any Person
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of assets, in each case to the Company or
any Restricted Subsidiary or from the Net Cash Proceeds from the sale of any
such Investment (except, in each case, to the extent any such payment or
proceeds are included in the calculation of Adjusted Consolidated Net Income),
or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investments"), not to
exceed, in each case, the amount of Investments previously made by the Company
or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.

     The foregoing provision shall not be violated by reason of:  (i) the
payment of any dividend within 60 days after the date of declaration thereof if,
at said date of declaration, such payment would comply with the foregoing
paragraph; (ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of payment to
the Guaranty or the Notes including premium, if any, and accrued and unpaid
interest, with the proceeds of, or in exchange for, Indebtedness Incurred under
clause (iii) of the second paragraph of Section 4.03(a); (iii) the repurchase,
redemption or other acquisition of Capital Stock of the Company, an Obligor or
an Unrestricted Subsidiary (or options, warrants or other rights to acquire 

<PAGE>
 
                                       46




such Capital Stock) in exchange for, or out of the proceeds of a substantially
concurrent offering of, shares of Capital Stock (other than Disqualified Stock)
of the Company or an Obligor (or options, warrants or other rights to acquire
such Capital Stock); (iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment to the
Guaranty or Indebtedness of an Obligor which is subordinated in right of payment
to the Notes in exchange for, or out of the proceeds of, a substantially
concurrent offering of, shares of the Capital Stock (other than Disqualified
Stock) of the Company or an Obligor (or options, warrants or other rights to
acquire such Capital Stock); (v) payments or distributions, to dissenting
stockholders pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the provisions of
Article Five; (vi) Investments acquired as a capital contribution or in exchange
for Capital Stock (other than Disqualified Stock) of the Company or an Obligor;
(vii) the purchase, redemption, acquisition, cancellation or other retirement
for value of shares of Capital Stock of the Company or an Obligor, options for
any such shares or related stock appreciation rights or similar securities held
by officers or employees or former officers or employees (or their estates or
beneficiaries under their estates), upon death, disability, retirement or
termination of employment or pursuant to any agreement under which such shares
of stock or related rights were issued; provided that the aggregate
consideration paid for such purchase, redemption, acquisition, cancellation or
other retirement of such shares or related rights after the Closing Date does
not exceed $2 million; (viii) the declaration or payment of dividends on the
Common Stock of the Company or an Obligor following a Public Equity Offering of
such Common Stock, of up to 6% per annum of the Net Cash Proceeds received by
the Company or such Obligor in such Public Equity Offering; (ix) for so long as
the Company or any Restricted Subsidiary is treated as a pass-through entity for
United States federal income tax purposes, distributions to equity holders of
the Company or any Restricted Subsidiary in an amount not to exceed the Tax
Amount for such period; or (x) other Restricted Payments in an aggregate amount
not to exceed $10 million; provided that, except in the case of clauses (i) and
(iii), no Default or Event of Default shall have occurred and be continuing or
occur as a consequence of the actions or payments set forth therein.

     Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment referred to in clause (vi)
thereof), and the Net Cash Proceeds from any issuance of Capital Stock referred
to in clauses (iii) and (iv), shall be included in calculating whether the
conditions of clause (C) of the first paragraph of this Section 4.04 have been
met with respect to any subsequent Restricted Payments. In the event the
proceeds of an issuance of Capital Stock of the Company or an Obligor are used
for the redemption, repurchase or other acquisition of the Notes, or
Indebtedness that is pari passu with the Notes or the Guaranty, then the Net
Cash Proceeds of such issuance shall be included in clause (C) of the first
paragraph of this Section 4.04 only to the extent such proceeds are not used for
such redemption, repurchase or other acquisition of Indebtedness.

<PAGE>
 
                                       47

      SECTION 4.05.  Limitation on Dividend and Other Payment Restrictions
                     -----------------------------------------------------
Affecting Restricted Subsidiaries.  The Company will not, and will not permit
- ---------------------------------                                            
any Restricted Subsidiary to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.

     The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Closing Date in the Credit Agreement, this
Indenture or any other agreements in effect on the Closing Date, and any
extensions, refinancings, renewals or replacements of such agreements; provided
that (x) the encumbrances and restrictions in any such extensions, refinancings,
renewals or replacements are no less favorable in any material respect to the
Holders than those encumbrances or restrictions that are then in effect and that
are being extended, refinanced, renewed or replaced or (y) the encumbrances and
restrictions in any such modifications, extensions, refinancings, renewals,
restructurings, substitutions or replacements (A) do not prevent the Company or
any of its Restricted Subsidiaries from paying interest on the Notes and (B)
will be no more restrictive in any material respect than encumbrances and
restrictions which could be obtained by a Person comparable to the Company or
such Restricted Subsidiary under then prevailing market conditions; (ii)
existing under or by reason of applicable law; (iii) existing with respect to
any Person or the property or assets of such Person acquired by the Company or
any Restricted Subsidiary, existing at the time of such acquisition and not
incurred in contemplation thereof, which encumbrances or restrictions are not
applicable to any Person or the property or assets of any Person other than such
Person or the property or assets of such Person so acquired; (iv) in the case of
clause (iv) of the first paragraph of this Section 4.05, (A) that restrict in a
customary manner the subletting, assignment or transfer of any property or asset
that is a lease, license, conveyance or contract or similar property or asset,
(B) existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by this Indenture or (C) arising
or agreed to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate, detract from
the value of property or assets of the Company or any Restricted Subsidiary in
any manner material to the Company or any Restricted Subsidiary; (v) with
respect to a Restricted Subsidiary and imposed pursuant to an agreement that has
been entered into for the sale or disposition of all or substantially all of the
Capital Stock of, or property and assets of, such Restricted Subsidiary; or (vi)
contained in the terms of any Indebtedness or any agreement pursuant to which
such Indebtedness was issued if (A) the encumbrance or restriction applies only
in the event of a payment default or a default with respect to a financial
covenant contained in such Indebtedness or agreement, (B) the encumbrance or
restriction is not materially more disadvantageous to the Holders of the Notes
than is customary in comparable financings (as determined by the Company) and
(C) the Company determines, at the time of entering into such

<PAGE>
 
                                       48

encumbrance or restriction, that any such encumbrance or restriction will not
materially affect the Company's ability to make principal or interest payments
on the Notes. Nothing contained in this Section 4.05 shall prevent the Company
or any Restricted Subsidiary from (1) creating, incurring, assuming or suffering
to exist any Liens otherwise permitted in Section 4.09 or (2) restricting the
sale or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.

      SECTION 4.06.  Limitation on the Issuance and Sale of Capital Stock of
                     -------------------------------------------------------
Restricted Subsidiaries.  The Company will not sell, and will not permit any
- -----------------------                                                     
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary other than an Obligor (including
options, warrants or other rights to purchase shares of such Capital Stock)
except (i) to the Company or a Wholly Owned Restricted Subsidiary; (ii)
issuances of director's qualifying shares or sales to foreign nationals of
shares of Capital Stock of foreign Restricted Subsidiaries, to the extent
required by applicable law; (iii) if, immediately after giving effect to such
issuance or sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary and any Investment in such Person remaining after giving
effect to such issuance or sale would have been permitted to be made under
Section 4.04 if made on the date of such issuance or sale; or (iv) issuances or
sales of Common Stock of a Restricted Subsidiary, provided that the Company or
such Restricted Subsidiary applies the Net Cash Proceeds, if any, of any such
sale in accordance with clause (A) or (B) of Section 4.11.

      SECTION 4.07.  Limitation on Issuances of Guarantees by Restricted
                     ---------------------------------------------------
Subsidiaries.  The Company will not permit any Restricted Subsidiary other than
- ------------                                                                   
an Obligor, directly or indirectly, to Guarantee any Indebtedness of the Company
or any Obligor which is pari passu with or subordinate in right of payment to
the Notes or the Guaranty ("Guaranteed Indebtedness"), unless (i) such
                            -----------------------                   
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Guarantee (a "Subsidiary Guarantee")
                                                          --------------------  
of payment of the Notes by such Restricted Subsidiary and (ii) such Restricted
Subsidiary waives and will not in any manner whatsoever claim or take the
benefit or advantage of, any rights of reimbursement, indemnity or subrogation
or any other rights against the Company or any other Restricted Subsidiary as a
result of any payment by such Restricted Subsidiary under its Subsidiary
Guarantee; provided that this paragraph shall not be applicable to (x) any
Guarantee of any Restricted Subsidiary that existed at the time such Person
became a Restricted Subsidiary and was not Incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary or (y) any
Guarantee of Indebtedness, including Indebtedness under the Credit Agreement,
Incurred under clause (i) of the second paragraph under Section 4.03. If the
Guaranteed Indebtedness is (A) pari passu with the Notes or the Guaranty, then
the Guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Subsidiary Guarantee or (B) subordinated to the Notes or
the Guaranty, then the Guarantee of such Guaranteed Indebtedness shall be
subordinated to the Subsidiary Guarantee at least to the extent that the
Guaranteed Indebtedness is subordinated to the Notes or the Guaranty.

<PAGE>
 
                                       49

     Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer,
to any Person not an Affiliate of the Company, of all of the Company's and each
Restricted Subsidiary's Capital Stock in, or all or substantially all the assets
of, such Restricted Subsidiary (which sale, exchange or transfer is not
prohibited by this Indenture) or (ii) the release or discharge of the Guarantee
which resulted in the creation of such Subsidiary Guarantee, except a discharge
or release by or as a result of payment under such Guarantee.

      SECTION 4.08.  Limitation on Transactions with Shareholders and
                     ------------------------------------------------
Affiliates. The Company will not, and will not permit any Restricted Subsidiary
- ----------
to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock of the
Company or with any Affiliate of the Company or any Restricted Subsidiary,
except upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than could be obtained, at the time of such transaction
or, if such transaction is pursuant to a written agreement, at the time of the
execution of the agreement providing therefor, in a comparable arm's-length
transaction with a Person that is not such a holder or an Affiliate.

     The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized investment
banking firm (including, without limitation, Morgan Stanley & Co. Incorporated
and its Affiliates) stating that the transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view; (ii) any transaction
solely between the Company and any of its Wholly Owned Restricted Subsidiaries
or solely between Wholly Owned Restricted Subsidiaries; (iii) the payment of
reasonable and customary regular fees to directors of the Company who are not
employees of the Company; (iv) any payments or other transactions pursuant to
any tax-sharing agreement between the Company and any other Person with which
the Company files a consolidated tax return or with which the Company is part of
a consolidated group for tax purposes; (v) programming agreements, marketing and
promotional agreements, equipment agreements and agreements for other goods or
services related to the business of the Company and its Restricted Subsidiaries
entered into in the ordinary course of business by the Company or any Restricted
Subsidiary and Time Warner or its Affiliates; (vi) the payment of fees to Morgan
Stanley & Co. Incorporated or its Affiliates for financial, advisory, consulting
or investment banking services that the Board of Directors deems to be advisable
or appropriate (including, without limitation, the payment of any underwriting
discounts or commissions or placement agency fees in connection with the
issuance and sale of securities); (vii) the Transactions; or (viii) any
Restricted Payments not prohibited by Section 4.04.  Notwithstanding the
foregoing, any transaction or series of related transactions covered by the
first paragraph of this Section 4.08 and not covered by clauses (ii) through
(viii) of this paragraph, (a) the aggregate amount of which exceeds $2 million
in value, must be approved or determined to be fair in the manner provided for

<PAGE>
 
                                       50

in clause (i)(A) or (B) above and (b) the aggregate amount of which exceeds $4
million in value, must be determined to be fair in the manner provided for in
clause (i)(B) above.

      SECTION 4.09.  Limitation on Liens.  The Company will not, and will not
                     -------------------                                     
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Lien on any of its assets or properties of any character, or any shares of
Capital Stock or Indebtedness of any Restricted Subsidiary, without making
effective provision for all of the Notes and the Guaranty and all other amounts
due under this Indenture to be directly secured equally and ratably with (or, if
the obligation or liability to be secured by such Lien is subordinated in right
of payment to the Notes and the Guaranty, prior to) the obligation or liability
secured by such Lien.

     The foregoing limitation does not apply to (i) Liens existing on the
Closing Date, including Liens securing obligations under the Credit Agreement;
(ii) Liens granted after the Closing Date on any assets or Capital Stock of the
Company or its Restricted Subsidiaries created in favor of the Holders; (iii)
Liens with respect to the assets of a Restricted Subsidiary granted by such
Restricted Subsidiary to the Company or a Wholly Owned Restricted Subsidiary to
secure Indebtedness owing to the Company or such other Restricted Subsidiary;
(iv) Liens securing Indebtedness which is Incurred to refinance secured
Indebtedness which is permitted to be Incurred under clause (iii) of the second
paragraph of Section 4.03; provided that such Liens do not extend to or cover
any property or assets of the Company or any Restricted Subsidiary other than
the property or assets securing the Indebtedness being refinanced; (v) Liens on
the Capital Stock of or any property or assets of a Restricted Subsidiary
securing Indebtedness of such Restricted Subsidiary permitted under Section
4.03; (vi) Liens securing Indebtedness outstanding under clause (i) of the
second paragraph under Section 4.03; or (vii) Permitted Liens.
 
      SECTION 4.10.  Limitation on Sale-Leaseback Transactions.  The Company
                     -----------------------------------------              
will not, and will not permit any Restricted Subsidiary to, enter into any sale-
leaseback transaction involving any of its assets or properties whether now
owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
the Company or such Restricted Subsidiary, as the case may be, intends to use
for substantially the same purpose or purposes as the assets or properties sold
or transferred.

     The foregoing restriction does not apply to any sale-leaseback transaction
if (i) the lease is for a period, including renewal rights, of not in excess of
three years; (ii) the lease secures or relates to industrial revenue or
pollution control bonds; (iii) the transaction is solely between the Company and
any Wholly Owned Restricted Subsidiary or solely between Wholly Owned Restricted
Subsidiaries; or (iv) the Company or such Restricted Subsidiary, within 12
months after the sale or transfer of any assets or properties is completed,
applies an amount not less than the net proceeds received from such sale in
accordance with clause (A) or (B) of the first paragraph of Section 4.11.

<PAGE>
 
                                       51

      SECTION 4.11.  Limitation on Asset Sales.  The Company will not, and will
                     -------------------------                                 
not permit any Restricted Subsidiary to, consummate any Asset Sale, unless (i)
the consideration received by the Company or such Restricted Subsidiary is at
least equal to the fair market value of the assets sold or disposed of and (ii)
at least 75% of the consideration received consists of cash or Temporary Cash
Investments or the assumption of Indebtedness of the Company or any Restricted
Subsidiary, provided that the Company or such Restricted Subsidiary is
irrevocably and unconditionally released from all liability under such
Indebtedness. In the event and to the extent that the Net Cash Proceeds received
by the Company or any of its Restricted Subsidiaries from one or more Asset
Sales occurring on or after the Closing Date in any period of 12 consecutive
months exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as of
the date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Subsidiaries has been filed
with the Commission pursuant to Section 4.18) then the Company shall or shall
cause the relevant Restricted Subsidiary to (i) within twelve months after the
date Net Cash Proceeds so received exceed 10% of Adjusted Consolidated Net
Tangible Assets (A) apply an amount equal to such excess Net Cash Proceeds to
permanently repay unsubordinated Indebtedness of the Company, the Obligors or
any Restricted Subsidiary providing a Subsidiary Guarantee pursuant to Section
4.07 or Indebtedness of any other Restricted Subsidiary, in each case owing to a
Person other than the Company or any of its Restricted Subsidiaries or (B)
invest an equal amount, or the amount not so applied pursuant to clause (A) (or
enter into a definitive agreement committing to so invest within 12 months after
the date of such agreement), in property or assets (other than current assets)
of a nature or type or that are used in a business (or in a company having
property and assets of a nature or type, or engaged in a business) similar or
related to the nature or type of the property and assets of, or the business of,
the Company and its Restricted Subsidiaries existing on the date of such
investment and (ii) apply (no later than the end of the 12-month period referred
to in clause (i)) such excess Net Cash Proceeds (to the extent not applied
pursuant to clause (i)) as provided in the following paragraph of this Section
4.11. Without in any way limiting the Company's discretion under the preceding
sentence, pending the final application of any such Net Cash Proceeds, the
Company or such Restricted Subsidiary may temporarily reduce Indebtedness under
a revolving credit facility, if any, or otherwise invest such Net Cash Proceeds.
The amount of such excess Net Cash Proceeds required to be applied (or to be
committed to be applied) during such 12-month period as set forth in clause (i)
of the preceding sentence and not applied as so required by the end of such
period shall constitute "Excess Proceeds."

     If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.11 totals at least $10 million, the Obligors must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders (and if required by the terms of any Indebtedness that
is pari passu with the Notes or the Guaranty ("Pari Passu Indebtedness"), from
                                               -----------------------        
the holders of such Pari Passu Indebtedness) on a pro rata basis an aggregate
Accreted Value of Notes (and Pari Passu Indebtedness) equal to the Excess
Proceeds on such date, at a purchase price equal to 100% of the Accreted Value
of the Notes on the relevant Payment Date (and principal 

<PAGE>
 
                                       52

amount of Pari Passu Indebtedness), plus, in each case, accrued interest (if
any) to the Payment Date.

      SECTION 4.12.  Repurchase of Notes upon a Change of Control.  The Obligors
                     --------------------------------------------               
must commence, within 30 days of the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then outstanding, at a purchase
price equal to 101% of the Accreted Value thereof on the relevant Payment Date,
plus accrued interest, if any, to the Payment Date.

     The Obligors will not be required to make an Offer to Purchase pursuant to
this Section 4.12 if a third party makes an Offer to Purchase in compliance with
this Section 4.12 and repurchases all Notes validly tendered and not withdrawn
under such Offer to Purchase.

      SECTION 4.13.  Existence.  Subject to Article Five of this Indenture, the
                     ---------                                                 
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its existence and the existence of each of its Restricted
Subsidiaries in accordance with the respective organizational documents of the
Company and each such Subsidiary and the rights (whether pursuant to charter,
partnership certificate, agreement, statute or otherwise), material licenses and
franchises of the Company and each such Subsidiary; provided that the Company
shall not be required to preserve any such right, license or franchise, or the
existence of any Restricted Subsidiary (other than of the Company), if the
maintenance or preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries taken as a whole.

      SECTION 4.14.  Payment of Taxes and Other Claims.  The Company will pay or
                     ---------------------------------                          
discharge and shall cause each of its Subsidiaries to pay or discharge, or cause
to be paid or discharged, before the same shall become delinquent (i) all
material taxes, assessments and governmental charges levied or imposed upon (a)
the Company or any such Subsidiary, (b) the income or profits of any such
Subsidiary which is a corporation or (c) the property of the Company or any such
Subsidiary and (ii) all material lawful claims for labor, materials and supplies
that, if unpaid, might by law become a lien upon the property of the Company or
any such Subsidiary; provided that the Company shall not be required to pay or
discharge, or cause to be paid or discharged, any such tax, assessment, charge
or claim the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings and for which adequate reserves have been
established.

      SECTION 4.15.  Maintenance of Properties and Insurance.  The Company will
                     ---------------------------------------                   
cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly conducted at all times; provided that nothing in this Section 4.15
shall prevent the Company or any such Subsidiary from discontinuing the use,
operation or maintenance of any of such properties or 

<PAGE>
 
                                       53

disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Company, desirable in the conduct of the business of the Company or such
Subsidiary.

     The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, including, but not limited to,
products liability insurance and public liability insurance, with reputable
insurers or with the government of the United States of America, or an agency or
instrumentality thereof, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly situated in the
industry in which the Company or any such Subsidiary, as the case may be, is
then conducting business.

      SECTION 4.16.  Notice of Defaults.  In the event that any of the Obligors
                     ------------------                                        
or the Company becomes aware of any Default or Event of Default, such Obligor or
the Company, as the case may be, promptly, after it becomes aware thereof, will
give written notice thereof to the Trustee.

      SECTION 4.17.  Compliance Certificates.  (a)  The Company shall deliver to
                     -----------------------                                    
the Trustee, within 45 days after the end of each fiscal quarter (90 days after
the end of the Company's last fiscal quarter of each year), an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default that occurred during such fiscal quarter.  In the case of the Officers'
Certificate delivered within 90 days after the end of the Company's fiscal year,
such certificate shall contain a certification from the principal executive
officer, principal financial officer or principal accounting officer of the
Company that a review has been conducted of the activities of the Company and
its Subsidiaries and the Company's and its Subsidiaries' performance under this
Indenture and that the Company has complied with all conditions and covenants
under this Indenture.  For purposes of this Section 4.17, such compliance shall
be determined without regard to any period of grace or requirement of notice
provided under this Indenture.  If any such officer knows of such a Default or
Event of Default, the certificate shall describe any such Default or Event of
Default and its status.

     The first certificate to be delivered pursuant to this Section 4.17(a)
shall be for the  first fiscal quarter beginning after the execution of this
Indenture.

     (b) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year, beginning with the fiscal year in which this Indenture was
executed, a certificate signed by the Company's independent certified public
accountants stating (i) that their audit examination has included a review of
the terms of this Indenture and the Notes as they relate to accounting matters,
(ii) that they have read the most recent Officers' Certificate delivered to the
Trustee pursuant to paragraph (a) of this Section 4.17 and (iii) whether, in
connection with their audit examination, anything came to their attention that
caused them to believe that the Obligors or the Company were not in compliance
with any of the terms, covenants, provisions or conditions of Article Four and
Section 5.01 of this Indenture as they pertain to accounting matters and, if any
Default or Event

<PAGE>
 
                                       54

of Default has come to their attention, specifying the nature and period of
existence thereof; provided that such independent certified public accountants
shall not be liable in respect of such statement by reason of any failure to
obtain knowledge of any such Default or Event of Default that would not come to
the attention of such accountants in the course of an audit examination
conducted in accordance with generally accepted auditing standards in effect at
the date of such examination.

      SECTION 4.18.  Commission Reports and Reports to Holders.  At all times
                     -----------------------------------------               
from and after the earlier of (i) the date of the commencement of a registered
exchange offer for the Notes by the Obligors or the effectiveness of the Shelf
Registration Statement pursuant to and in accordance with the terms of the
Registration Rights Agreement (the "Registration") and (ii) the date that is six
                                    ------------                                
months after the Closing Date, in either case, whether or not the Company and
the Obligors are then required to file reports with the Commission, the Company
and the Obligors shall file with the Commission all such reports and other
information as they would be required to file with the Commission by Sections
13(a) or 15(d) under the Exchange Act if they were subject thereto.  The Company
and the Obligors shall supply the Trustee and each Holder or shall supply to the
Trustee for forwarding to each such Holder, without cost to such Holder, copies
of such reports and other information within 15 days after the date they would
have been required to file such reports or other information with the Commission
had they been subject to such Sections.  In addition, at all times prior to the
earlier of the date of the Registration and the date that is six months after
the Closing Date, the Company and the Obligors shall, at their cost, deliver to
each Holder of the Notes quarterly and annual reports substantially equivalent
to those which would be required by the Exchange Act.  In addition, at all times
prior to the Registration, upon the request of any Holder or any prospective
purchaser of the Notes designated by a Holder, the Company and the Obligors
shall supply to such Holder or such prospective purchaser the information
required under Rule 144A under the Securities Act.  The Company and the Obligors
also shall comply with the other provisions of TIA Section 314(a).
 
      SECTION 4.19.  Waiver of Stay, Extension or Usury Laws.  Each of the
                     ---------------------------------------              
Obligors and the Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Obligors or the
Company, as the case may be, from paying all or any portion of the principal of,
premium, if any, or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or that may affect the covenants
or the performance of this Indenture; and (to the extent that it may lawfully do
so) each of the Obligors and the Company hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.

      SECTION 4.20.  Calculation of Original Issue Discount.  The Company and
                     --------------------------------------                  
the Obligors shall file with the Trustee promptly at the end of each calendar
year (i) a written notice specifying

<PAGE>
 
                                       55

the amount of original issue discount (including daily rates and accrual
periods) accrued on outstanding Notes as of the end of such year and (ii) such
other specific information relating to such original issue discount as may then
be relevant under the Internal Revenue Code of 1986, as amended from time to
time, and requested by the Trustee.

      SECTION 4.21.  Release of Obligors Upon Sale.  Renaissance Louisiana
                     -----------------------------                        
and/or Renaissance Tennessee will be automatically, completely and
unconditionally released and discharged from its obligations in respect of the
Notes upon the sale or other disposition (in compliance with the first sentence
of Section 4.11) of all of the Company's and each of its Restricted Subsidiary's
Capital Stock in such Obligor to any Person that is not an Affiliate of the
Company; provided that such sale is not governed by the provisions of Article
Five and after any such release and discharge at least one Obligor shall remain
an obligor on the Notes.


                                 ARTICLE FIVE
                             SUCCESSOR CORPORATION

      SECTION 5.01.  When Obligors and the Company May Merge, Etc.  Neither the
                     --------------------------------------------              
Company nor any Obligor that constitutes all or substantially all of the
property and assets of the Company will consolidate with, merge with or into, or
sell, convey, transfer, lease or otherwise dispose of all or substantially all
of its property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person or permit any
Person to merge with or into it unless: (i) the Company or such Obligor shall be
the continuing Person, or the Person (if other than the Company or such Obligor)
formed by such consolidation or into which the Company or such Obligor is merged
or that acquired or leased such property and assets of the Company or such
Obligor shall be a corporation organized and validly existing under the laws of
the United States of America or any jurisdiction thereof and shall expressly
assume, by a supplemental indenture, executed and delivered to the Trustee, all
of the obligations of the Company or the Obligor, as the case may be, on all of
the Notes and under this Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) immediately after giving effect to such transaction on a pro
forma basis, the Company or the Obligor or any Person becoming the successor
obligor of the Notes or the Guaranty, as the case may be, shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth of
the Company or the Obligor immediately prior to such transaction; provided that
this clause (iii) shall only apply to a sale of substantially all, but less than
all, of the assets of the Company or an Obligor; (iv) immediately after giving
effect to such transaction on a pro forma basis the Company or such Obligor, or
any Person becoming the successor obligor on the Guaranty or the Notes, as the
case may be, could Incur at least $1.00 of Indebtedness under the first
paragraph of Section 4.03(a); provided that this clause (iv) shall not apply to
a consolidation, merger or sale of all (but not less than all) of the assets of
the Company or an Obligor if all Liens and Indebtedness of the Company or any
Person becoming the successor obligor on the Guaranty, as the case may be, and
its Restricted Subsidiaries, including the Obligors

<PAGE>
 
                                       56

or any Person becoming a successor obligor on the Notes, outstanding immediately
after such transaction would, if Incurred at such time, have been permitted to
be Incurred (and all such Liens and Indebtedness, other than Liens and
Indebtedness of the Company and its Restricted Subsidiaries outstanding
immediately prior to the transaction, shall be deemed to have been Incurred) for
all purposes of this Indenture; and (v) the Company or such Obligor delivers to
the Trustee an Officers' Certificate (attaching the arithmetic computations to
demonstrate compliance with clauses (iii) and (iv), if either is applicable) and
Opinion of Counsel, in each case stating that such consolidation, merger or
transfer and such supplemental indenture complies with this provision and that
all conditions precedent provided for herein relating to such transaction have
been complied with; provided, however, that clauses (iii) and (iv) above do not
apply if, in the good faith determination of the Board of Directors of the
Company, whose determination shall be evidenced by a Board Resolution, the
principal purpose of such transaction is to change the state of incorporation of
the Company and such transaction shall not have as one of its purposes the
evasion of the foregoing limitations.

      SECTION 5.02.  Successor Substituted.  Upon any consolidation or merger,
                     ---------------------                                    
or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of any Obligor or the Company in
accordance with Section 5.01 of this Indenture, the successor Person formed by
such consolidation or into which such Obligor or the Company is merged or to
which such sale, conveyance, transfer, lease or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
such Obligor or the Company, as the case may be, under this Indenture with the
same effect as if such successor Person had been named as such Obligor or the
Company, as the case may be, herein; provided that none of the Obligors or the
Company, as the case may be, shall be released from their joint and several
obligations to pay the principal of, premium, if any, or interest on the Notes
in the case of a lease of all or substantially all of its property and assets.


                                  ARTICLE SIX
                             DEFAULT AND REMEDIES

      SECTION 6.01.  Events of Default.  Any of the following events shall
                     -----------------                                    
constitute an "Event of Default" hereunder:
               ----- ----------            
 
     (a) default in the payment of principal of (or premium, if any, on) any
Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise;

     (b) default in the payment of interest on any Note when the same becomes
due and payable, and such default continues for a period of 30 days;

     (c) default in the performance or breach of the provisions of Article Five
or the failure to make or consummate an Offer to Purchase in accordance with
Sections 4.11 or 4.12;

<PAGE>
 
                                       57

     (d) the Company or the Obligors default in the performance of or breaches
any other covenant or agreement of the Company or the Obligors in this Indenture
or under the Notes (other than a default specified in clause (a), (b) or (c)
above) and such default or breach continues for a period of 30 consecutive days
after written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Notes;

     (e) there occurs with respect to any issue or issues of Indebtedness of the
Company or any Significant Subsidiary having an outstanding principal amount of
$10 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default;

     (f) any final judgment or order (not covered by insurance) for the payment
of money in excess of $10 million in the aggregate for all such final judgments
or orders against all such Persons (treating any deductibles, self-insurance or
retention as not so covered) shall be rendered against the Company or any
Significant Subsidiary and shall not be paid or discharged, and there shall be
any period of 30 consecutive days following entry of the final judgment or order
that causes the aggregate amount for all such final judgments or orders
outstanding and not paid or discharged against all such Persons to exceed $10
million during which a stay of enforcement of such final judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;

     (g) a court having jurisdiction in the premises enters a decree or order
for (A) relief in respect of the Company or any Significant Subsidiary in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, (B) appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 30 consecutive days;

     (h) the Company or any Significant Subsidiary (A) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (B) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) effects any general assignment for the benefit of
creditors; or

<PAGE>
 
                                       58

     (i) the Guaranty or any Subsidiary Guarantee ceases to be in full force and
effect (except as contemplated by the terms thereof) or the Company or any
Subsidiary Guarantor denies or disaffirms its obligations under this Indenture,
the Guaranty or any Subsidiary Guarantee.

      SECTION 6.02.  Acceleration.  If an Event of Default (other than an Event
                     ------------                                              
of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to an Obligor or the Company) occurs and is continuing under this
Indenture, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding, by written notice to the Obligors (and to
the Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the Accreted Value of, premium, if any,
and accrued interest on the Notes to be immediately due and payable.  Upon a
declaration of acceleration, such Accreted Value, premium, if any, and accrued
interest shall be immediately due and payable. In the event of a declaration of
acceleration because an Event of Default set forth in clause (e) of Section 6.01
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (e) shall be remedied or cured by the
Company or the relevant Significant Subsidiary or waived by the holders of the
relevant Indebtedness within 60 days after the declaration of acceleration with
respect thereto. If an Event of Default specified in clause (g) or (h) of
Section 6.01 occurs with respect to an Obligor or the Company, the Accreted
Value of, premium, if any, and accrued interest on the Notes then outstanding
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.

     At any time after such a declaration of acceleration, but before a judgment
or decree for the payment of the money due has been obtained by the Trustee, the
Holders of at least a majority in principal amount of the outstanding Notes by
written notice to the Obligors and to the Trustee, may waive all past Defaults
and rescind and annul a declaration of acceleration and its consequences if (a)
the Company or the Obligors have paid or deposited with the Trustee a sum
sufficient to pay (i) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, (ii) all overdue interest on all Notes, (iii) the
Accreted Value of and premium, if any, on any Notes that have become due
otherwise than by such declaration or occurrence of acceleration and interest
thereon at the rate prescribed therefor by such Notes, and (iv) to the extent
that payment of such interest is lawful, interest upon overdue interest, if any,
at the rate prescribed therefor by such Notes, (b)(i) all existing Events of
Default, other than the non-payment of the Accreted Value of, premium, if any,
or interest on the Notes that have become due solely by such declaration of
acceleration, have been cured or waived and (ii) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction.

      SECTION 6.03.  Other Remedies.  If an Event of Default occurs and is
                     --------------                                       
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if any, or interest
on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.

<PAGE>
 
                                       59

     The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.

      SECTION 6.04.  Waiver of Past Defaults.  Subject to Sections 6.02, 6.07
                     -----------------------                                 
and 9.02, the Holders of at least a majority in principal amount of the
outstanding Notes, by notice to the Trustee, may waive an existing Default or
Event of Default and its consequences, except a Default in the payment of
principal of, premium, if any, or interest on any Note as specified in clause
(a) or (b) of Section 6.01 or in respect of a covenant or provision of this
Indenture which cannot be modified or amended without the consent of the Holder
of each outstanding Note affected.  Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.

      SECTION 6.05.  Control by Majority.  The Holders of at least a majority in
                     -------------------                                        
aggregate principal amount of the outstanding Notes may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee.  However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
that may involve the Trustee in personal liability, or that the Trustee
determines in good faith may be unduly prejudicial to the rights of Holders of
Notes not joining in the giving of such direction  and may take any other action
it deems proper that is not inconsistent with any such direction received from
Holders of Notes.

      SECTION 6.06.  Limitation on Suits.  A Holder may not institute any
                     -------------------                                 
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

          (i)    the Holder gives the Trustee written notice of a continuing
     Event of Default;

          (ii)   the Holders of at least 25% in aggregate principal amount of
     outstanding Notes make a written request to the Trustee to pursue the
     remedy;

          (iii)  such Holder or Holders offer the Trustee indemnity satisfactory
     to the Trustee against any costs, liability or expense;

          (iv)   the Trustee does not comply with the request within 60 days
     after receipt of the request and the offer of indemnity; and

          (v)    during such 60-day period, the Holders of a majority in
     aggregate principal amount of the outstanding Notes do not give the Trustee
     a direction that is inconsistent with the request.

<PAGE>
 
                                       60

     For purposes of Section 6.05 of this Indenture and this Section 6.06, the
Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture or
the Notes or otherwise under the law.

     A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.

          The limitations set forth in this Section 6.06 shall not apply to the
right of any Holder of a Note to receive payment of the Accreted Value of,
premium, if any, or interest on, such Note or to bring suit for the enforcement
of any such payment, on or after the due date expressed in the Notes, which
right shall not be impaired or affected without the consent of the Holder.

      SECTION 6.07.  Rights of Holders to Receive Payment.  Notwithstanding any
                     ------------------------------------                      
other provision of this Indenture, the right of any Holder of a Note to receive
payment of the Accreted Value of, premium, if any, or interest on, such Note or
to bring suit for the enforcement of any such payment, on or after the due date
expressed in the Notes, shall not be impaired or affected without the consent of
such Holder.

      SECTION 6.08.  Collection Suit by Trustee.  If an Event of Default in
                     --------------------------                            
payment of principal, premium or interest specified in clause (a), (b) or (c) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against any Obligor or the Company
or any other obligor of the Notes for the whole amount of principal, premium, if
any, and accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
specified in the Notes, and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

      SECTION 6.09.  Trustee May File Proofs of Claim.  The Trustee may file
                     --------------------------------                       
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Obligors (or any other obligor of the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Notes or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the 

<PAGE>
 
                                      61



event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to empower the Trustee to authorize or consent
to, or accept or adopt on behalf of any Holder, any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.

      SECTION 6.10.  Priorities.  If the Trustee collects any money pursuant to
                     ----------                                                
this Article Six, it shall pay out the money in the following order:

          First:  to the Trustee for all amounts due under Section 7.07;

          Second:  to Holders for amounts then due and unpaid for principal of,
     premium, if any, and interest on the Notes in respect of which or for the
     benefit of which such money has been collected, ratably, without preference
     or priority of any kind, according to the amounts due and payable on such
     Notes for principal, premium, if any, and interest, respectively; and

          Third:  to the Obligors or any other obligors of the Notes, as their
     interests may appear, or as a court of competent jurisdiction may direct.

     The Trustee, upon prior written notice to the Obligors, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.

      SECTION 6.11.  Undertaking for Costs.  In any suit for the enforcement of
                     ---------------------                                     
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit having due regard to the merits
and good faith of the claims or defenses made by the party litigant.  This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 of this Indenture, or a suit by Holders of more than
10% in principal amount of the outstanding Notes.

      SECTION 6.12.  Restoration of Rights and Remedies.  If the Trustee or any
                     ----------------------------------                        
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in such proceeding, the Obligors,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Obligors, Trustee and the Holders shall continue as though no such proceeding
had been instituted.

<PAGE>
 
                                      62


      SECTION 6.13.  Rights and Remedies Cumulative.  Except as otherwise
                     ------------------------------                      
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

      SECTION 6.14.  Delay or Omission Not Waiver.  No delay or omission of the
                     ----------------------------                              
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein.  Every right and remedy given
by this Article Six or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.


                                 ARTICLE SEVEN
                                    TRUSTEE

      SECTION 7.01.  General.  The duties and responsibilities of the Trustee
                     -------                                                 
shall be as provided by the TIA and as are specifically set forth herein and no
covenants or obligations shall be otherwise implied by this Indenture.
Notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.  Whether or not herein expressly
so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Article Seven.

      SECTION 7.02.  Certain Rights of Trustee.  Subject to TIA Sections 315(a)
                     -------------------------                                 
through (d):

          (i) the Trustee may rely, and shall be protected in acting or
     refraining from acting, upon any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, debenture, note, other evidence of indebtedness or other paper or
     document believed by it to be genuine and to have been signed or presented
     by the proper person;

          (ii) before the Trustee acts or refrains from acting, it may require
     an Officers' Certificate and/or an Opinion of Counsel, which shall conform
     to Section 11.03 or Section 

<PAGE>
 
                                      63

     11.04, as the case may be. The Trustee shall not be liable for any action
     it takes or omits to take in good faith in reliance on such certificate or
     opinion;

          (iii)  the Trustee may act through its attorneys and agents and shall
     not be responsible for the misconduct or negligence of any attorney or
     agent appointed with due care;

          (iv) the Trustee shall be under no obligation to exercise any of the
     rights or powers vested in it by this Indenture at the request or direction
     of any of the Holders, unless such Holders shall have offered to the
     Trustee reasonable security or indemnity against the costs, expenses and
     liabilities that might be incurred by it in compliance with such request or
     direction;

          (v) the Trustee shall not be liable for any action it takes or omits
     to take in good faith that it believes to be authorized or within its
     rights or powers or for any action it takes or omits to take in accordance
     with the written direction of the Holders of a majority in principal amount
     of the outstanding Notes, including relating to the time, method and place
     of conducting any proceeding for any remedy available to the Trustee, or
     exercising any trust or power conferred upon the Trustee, under this
     Indenture, provided that the Trustee's conduct does not constitute gross
     negligence or bad faith;

          (vi) whenever in the administration of this Indenture the Trustee
     shall deem it desirable that a matter be proved or established prior to
     taking, suffering or omitting any action hereunder, the Trustee (unless
     other evidence be herein specifically prescribed) may, in the absence of
     bad faith on its part, rely upon an Officers' Certificate;

          (vii)  the Trustee shall not be bound to make any investigation into
     the facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, debenture, note, other evidence of indebtedness or other paper or
     document, but the Trustee, in its discretion, may make such further inquiry
     or investigation into such facts or matters as it may see fit, and, if the
     Trustee shall determine to make such further inquiry or investigation, it
     shall be entitled to examine the books, records and premises of the
     Obligors and the Company personally or by agent or attorney; and

          (viii)  the Trustee shall not be charged with knowledge of any
     Defaults or Events of Default unless either (1) a Responsible Officer shall
     have actual knowledge of such Default or Event of Default or (2) written
     notice of such Default or Event of Default shall have been given to the
     Trustee by any Holder, Obligor, the Company or any other obligor on the
     Notes.

<PAGE>
 
                                      64

      SECTION 7.03.  Individual Rights of Trustee.  The Trustee, in its
                     ----------------------------                      
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Obligors, the Company or their Affiliates with the
same rights it would have if it were not the Trustee.  Any Agent may do the same
with like rights.  However, the Trustee is subject to TIA Sections 310(b) and
311.

      SECTION 7.04.  Trustee's Disclaimer.  The Trustee (i) makes no
                     --------------------                           
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Obligors' use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement of
the Company or the Obliglors in this Indenture or in the Notes other than its
certificate of authentication.

      SECTION 7.05.  Notice of Default.  If any Default or any Event of Default
                     -----------------                                         
occurs and is continuing and if such Default or Event of Default is known to the
Trustee, the Trustee shall mail to each Holder in the manner and to the extent
provided in TIA Section 313(c) notice of the Default or Event of Default within
45 days after it occurs, unless such Default or Event of Default has been cured;
provided, however, that, except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Note, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders.

      SECTION 7.06.  Reports by Trustee to Holders.  Within 60 days after each
                     -----------------------------                            
May 15, beginning with May 15, 1998, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report dated as of such May 15, if
required by TIA Section 313(a). The Company shall promptly notify the Trustee if
the Notes become listed on any stock exchange and the Trustee shall comply with
TIA Section 313(d).

      SECTION 7.07.  Compensation and Indemnity.  The Obligors and the Company,
                     --------------------------                                
jointly and severally, shall pay to the Trustee from time to time such
compensation as shall be agreed upon in writing for its services.  The
compensation of the Trustee shall not be limited by any law on compensation of a
trustee of an express trust.  The Obligors and the Company, jointly and
severally, shall reimburse the Trustee upon request for all reasonable out-of-
pocket expenses and advances incurred or made by the Trustee without gross
negligence or bad faith on its part.  Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.

     The Obligors and the Company, jointly and severally, shall indemnify the
Trustee (including its agents, employees, officers, directors and shareholders,
as applicable) for, and hold it harmless against, any loss or liability or
expense incurred by it without negligence or bad faith on its part in connection
with the acceptance or administration of this Indenture and its duties under
this Indenture and the Notes, including the costs and expenses of defending
itself against any claim 

<PAGE>
 
                                      65

or liability and of complying with any process served upon it or any of its
officers in connection with the exercise or performance of any of its powers or
duties under this Indenture and the Notes.

     The Trustee shall notify the Obligors  and the Company promptly of any
claim for which it may seek indemnity.  Failure by the Trustee to so notify the
Obligors and the Company shall not relieve the Obligors or the Company of their
obligations hereunder, unless and only to the extent that the Obligors and the
Company are materially prejudiced thereby.  At the Trustee's sole discretion,
the Obligors and the Company shall defend the claim and the Trustee shall
provide reasonable cooperation in the defense.  The Trustee may at its option
have separate counsel of its own choosing and the Obligors and the Company shall
pay the reasonable fees and expenses of such counsel.  The Obligors and the
Company need not pay for any settlement made without their consent, which
consent shall not be unreasonably withheld.

     To secure the Obligors' and the Company's payment obligations, as the case
may be, in this Section 7.07, the Trustee shall have a lien prior to the Notes
on all money or property held or collected by the Trustee, in its capacity as
Trustee, except money or property held in trust to pay principal of, premium, if
any, and interest on particular Notes.

     If the Trustee incurs expenses or renders services after the occurrence of
an Event of Default specified in clause (g) or (h) of Section 6.01, the expenses
and the compensation for the services will be intended to constitute expenses of
administration under Title 11 of the United States Bankruptcy Code or any
applicable federal or state law for the relief of debtors.

     The provisions of this Section 7.07 and any lien arising hereunder shall
survive the resignation or removal of the Trustee, the discharge of the
Obligors' obligations pursuant to Article Eight or the termination of this
Indenture.

     The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.

      SECTION 7.08.  Replacement of Trustee.  A resignation or removal of the
                     ----------------------                                  
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.

     The Trustee may resign at any time by so notifying the Obligors in writing
at least 30 days prior to the date of the proposed resignation.  The Holders of
a majority in principal amount of the outstanding Notes may remove the Trustee
by so notifying the Trustee in writing and may appoint a successor Trustee with
the consent of the Obligors.  The Obligors may remove the Trustee if: (i) the
Trustee is no longer eligible under Section 7.10; (ii) the Trustee is adjudged a
bankrupt or an insolvent; (iii) a receiver or other public officer takes charge
of the Trustee or its property; or (iv) the Trustee becomes incapable of acting.
 

<PAGE>
 
                                      66


     If the Trustee resigns or is removed, or if a vacancy exists in the office
of Trustee for any reason, the Obligors shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Obligors. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Obligors or the Holders
of a majority in principal amount of the outstanding Notes may, at the expense
of the Obligors, petition any court of competent jurisdiction for the
appointment of a successor Trustee.

     A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Obligors.  Immediately after the delivery of
such written acceptance, subject to the lien provided in Section 7.07, (i) the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, (ii) the resignation or removal of the retiring Trustee shall
become effective and (iii) the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture.  A successor Trustee
shall mail notice of its succession to each Holder.  No successor Trustee shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible under this Article.

     If the Trustee is no longer eligible under Section 7.10 or shall fail to
comply with TIA Section 310(b), any Holder who satisfies the requirements of TIA
Section 310(b) may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.

     If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 7.08, the Trustee shall resign immediately in the
manner and with the effect provided in this Section.
 
     The Obligors shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders.  Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.

     Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Obligors' obligation under Section 7.07 shall continue for the benefit of
the retiring Trustee.

      SECTION 7.09.  Successor Trustee by Merger, Etc.  If the Trustee
                     --------------------------------                 
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein, provided such corporation shall be otherwise qualified and eligible
under this Article.

<PAGE>
 
                                      67

      SECTION 7.10.  Eligibility.  This Indenture shall always have a Trustee
                     -----------                                             
who satisfies the requirements of TIA Section 310(a)(1).  The Trustee shall have
a combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition that is subject to the requirements
of applicable Federal or state supervising or examining authority.  If at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section 7.10, the Trustee shall resign immediately in the manner and with
the effect specified in this Article.

      SECTION 7.11.  Money Held in Trust.  The Trustee shall not be liable for
                     -------------------                                      
interest on any money received by it except as the Trustee may agree in writing
with the Obligors.  Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law and except for money held
in trust under Article Eight of this Indenture.

 
                                 ARTICLE EIGHT
                            DISCHARGE OF INDENTURE

      SECTION 8.01.  Termination of Obligors' Obligations.  Except as otherwise
                     ------------------------------------                      
provided in this Section 8.01, the Obligors may terminate their obligations
under the Notes and this Indenture if:

          (i) all Notes previously authenticated and delivered (other than
     destroyed, lost or stolen Notes that have been replaced or Notes that are
     paid pursuant to Section 4.01 or Notes for whose payment money or
     securities have theretofore been held in trust and thereafter repaid to the
     Obligors, as provided in Section 8.05) have been delivered to the Trustee
     for cancellation and the Obligors have paid all sums payable by them
     hereunder; or

          (ii) (A) the Notes mature within one year or all of them are to be
     called for redemption within one year under arrangements satisfactory to
     the Trustee for giving the notice of redemption, (B) the Obligors or the
     Company irrevocably deposit in trust with the Trustee during such one-year
     period, under the terms of an irrevocable trust agreement in form and
     substance satisfactory to the Trustee, as trust funds solely for the
     benefit of the Holders for that purpose, money or U.S. Government
     Obligations sufficient (in the opinion of a nationally recognized firm of
     independent public accountants expressed in a written certification thereof
     delivered to the Trustee), without consideration of any reinvestment of any
     interest thereon, to pay principal, premium, if, any, and interest on the
     Notes to maturity or redemption, as the case may be, and to pay all other
     sums payable by it hereunder, (C) no Default or Event of Default with
     respect to the Notes shall have occurred and be continuing on the date of
     such deposit, (D) such deposit will not result in a breach or violation of,
     or constitute a default under, this Indenture or any other agreement or
     instrument to which any of the Obligors or the Company is a party or by
     which it is bound 

<PAGE>
 
                                      68


     and (E) the Obligors have delivered to the Trustee an Officers' Certificate
     and an Opinion of Counsel, in each case stating that all conditions
     precedent provided for herein relating to the satisfaction and discharge of
     this Indenture have been complied with.

     With respect to the foregoing clause (i), the Obligors' obligations under
Section 7.07 shall survive.  With respect to the foregoing clause (ii), the
Obligors' and the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05,
2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 and
Article Ten shall survive until the Notes are no longer outstanding.
Thereafter, only the Obligors' and the Company's obligations in Sections 7.07,
8.04, 8.05 and 8.06 shall survive. After any such irrevocable deposit, the
Trustee, on demand of the Obligors accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Obligors, shall execute
proper instruments acknowledging such satisfaction of and discharging of the
Obligors and the Company's obligations under the Notes and this Indenture except
for those surviving obligations specified above.  The Obligors and the Company
jointly and severally agree to reimburse the Trustee for any costs or expenses
(including, without limitation, the reasonable fees of its counsel) thereafter
reasonably and properly incurred, to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Notes and to indemnify the trust referred to in Section
8.02(a) for any tax liability and pay any expenses of such trust not otherwise
provided for pursuant to such Section.

      SECTION 8.02.  Defeasance and Discharge of Indenture.  The Obligors will
                     -------------------------------------                    
be deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the date of the deposit referred to
in clause (A) of this Section 8.02, and the provisions of this Indenture will no
longer be in effect with respect to the Notes, and the Trustee, at the expense
of the Obligors, shall execute proper instruments acknowledging the same, except
as provided in the penultimate paragraph of this Section 8.02; provided that the
following conditions shall have been satisfied:

          (A) with reference to this Section 8.02, the Obligors have irrevocably
     deposited or caused to be irrevocably deposited with the Trustee (or
     another trustee satisfying the requirements of Section 7.10 of this
     Indenture) and conveyed all right, title and interest to the Trustee for
     the benefit of the Holders, under the terms of an irrevocable trust
     agreement in form and substance satisfactory to the Trustee as trust funds
     in trust, specifically pledged to the Trustee for the benefit of the
     Holders as security for payment of the principal of, premium, if any, and
     interest, if any, on the Notes, and dedicated solely to, the benefit of the
     Holders, in and to (1) money in an amount, (2) U.S. Government Obligations
     that, through the payment of interest, premium, if any, and principal in
     respect thereof in accordance with their terms, will provide, not later
     than one day before the due date of any payment referred to in this clause
     (A), money in an amount or (3) a combination thereof in an amount
     sufficient, in the opinion of a nationally recognized firm of independent
     public accountants expressed in a written certification thereof delivered
     to the Trustee, to pay and discharge, without consideration of the
     reinvestment of such interest and after payment of 

<PAGE>
 
                                      69
   
     all federal, state and local taxes or other charges and assessments in
     respect thereof payable by the Trustee, the principal of, premium, if any,
     and accrued interest on the outstanding Notes at the Stated Maturity of
     such principal or interest; provided that the Trustee shall have been
     irrevocably instructed to apply such money or the proceeds of such U.S.
     Government Obligations to the payment of such principal, premium, if any,
     and interest with respect to the Notes;

          (B) the Obligors have delivered to the Trustee (1) either (x) an
     Opinion of Counsel to the effect that Holders will not recognize income,
     gain or loss for federal income tax purposes as a result of the Obligors'
     exercise of their option under this Section 8.02 and will be subject to
     federal income tax on the same amount and in the same manner and at the
     same times as would have been the case if such deposit, defeasance and
     discharge had not occurred, which Opinion of Counsel shall be based upon
     (and accompanied by a copy of) a ruling of the Internal Revenue Service to
     the same effect unless there has been a change in applicable federal income
     tax law after the Closing Date such that a ruling is no longer required or
     (y) a ruling directed to the Trustee received from the Internal Revenue
     Service to the same effect as the aforementioned Opinion of Counsel and (2)
     an Opinion of Counsel to the effect that the creation of the defeasance
     trust does not violate the Investment Company Act of 1940 and that after
     the passage of 123 days following the deposit (except, with respect to any
     trust funds for the account of any Holder who may be deemed to be an
     "insider" for purposes of the United States Bankruptcy Code, after one year
     following the deposit), the trust funds will not be subject to the effect
     of Section 547 of the United States Bankruptcy Code or Section 15 of the
     New York Debtor and Creditor Law in a case commenced by or against the
     Obligors or the Company under either such statute, and either (I) the trust
     funds will no longer remain the property of the Obligors or the Company
     (and therefore will not be subject to the effect of any applicable
     bankruptcy, insolvency, reorganization or similar laws affecting creditors'
     rights generally) or (II) if a court were to rule under any such law in any
     case or proceeding that the trust funds remained property of the Obligors
     or the Company, (a) assuming such trust funds remained in the possession of
     the Trustee prior to such court ruling to the extent not paid to the
     Holders, the Trustee will hold, for the benefit of the Holders, a valid and
     perfected security interest in such trust funds that is not avoidable in
     bankruptcy or otherwise except for the effect of Section 552(b) of the
     United States Bankruptcy Code on interest on the trust funds accruing after
     the commencement of a case under such statute and (b) the Holders will be
     entitled to receive adequate protection of their interests in such trust
     funds if such trust funds are used in such case or proceeding;

          (C) immediately after giving effect to such deposit on a pro forma
     basis, no Default or Event of Default shall have occurred and be continuing
     on the date of such deposit or during the period ending on the 123rd day
     after such date of such deposit, and such deposit shall not result in a
     breach or violation of, or constitute a default under, this Indenture or
     any other agreement or instrument to which the Obligors, the Company or any

<PAGE>
 
                                      70

     of their Subsidiaries is a party or by which the Obligors, the Company or
     any of their Subsidiaries is bound;

          (D) if the Notes are then listed on a national securities exchange,
     the Obligors shall have delivered to the Trustee an Opinion of Counsel to
     the effect that the Notes will not be delisted as a result of such deposit,
     defeasance and discharge; and

          (E) the Obligors shall have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, in each case stating that all
     conditions precedent provided for herein relating to the defeasance
     contemplated by this Section 8.02 have been complied with.

     Notwithstanding the foregoing, prior to the end of the 123-day (or one
year) period referred to in clause (B)(2) of this Section 8.02, none of the
Obligors' or the Company's obligations under this Indenture shall be discharged.
Subsequent to the end of such 123-day (or one year) period with respect to this
Section 8.02, the Obligors' and the Company's obligations in Sections 2.02,
2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 8.05, 8.06 and
Article Ten and the rights, powers, trusts, duties and immunities of the Trustee
hereunder shall survive until the Notes are no longer outstanding.  Thereafter,
only the Obligors' and the Company's obligations in Sections 7.07, 8.04, 8.05
and 8.06 shall survive.  If and when a ruling from the Internal Revenue Service
or an Opinion of Counsel referred to in clause (B)(1) of this Section 8.02 may
be provided specifically without regard to, and not in reliance upon, the
continuance of the Obligors' obligations under Section 4.01 and the Company's
obligations under Article Ten, then the Obligors' obligations under such Section
4.01 and the Company's obligations under Article Ten, shall cease upon delivery
to the Trustee of such ruling or Opinion of Counsel and compliance with the
other conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02.

     After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Obligors' and the Company's
obligations under the Notes and this Indenture except for those surviving
obligations in the immediately preceding paragraph.

      SECTION 8.03.  Defeasance of Certain Obligations.  The Obligors and the
                     ---------------------------------                       
Company may omit to comply with any term, provision or condition set forth in
clauses (iii) and (iv) of Section 5.01 and Sections 4.03 through 4.11 and clause
(c) of Section 6.01 with respect to clauses (iii) and (iv) of Section 5.01,
clause (d) of Section 6.01 with respect to Sections 4.01, 4.02 and 4.12 through
4.21 and clauses (e) and (f) of Section 6.01 shall be deemed not to be Events of
Default in each case with respect to the outstanding Notes if:

          (i) with reference to this Section 8.03, the Obligors have irrevocably
     deposited or caused to be irrevocably deposited with the Trustee (or
     another trustee satisfying the requirements of Section 7.10) and conveyed
     all right, title and interest to the Trustee for the benefit of the
     Holders, under the terms of an irrevocable trust agreement in form and
 

<PAGE>
 
                                      71

     substance satisfactory to the Trustee as trust funds in trust, specifically
     pledged to the Trustee for the benefit of the Holders as security for
     payment of the principal of, premium, if any, and interest, if any, on the
     Notes, and dedicated solely to, the benefit of the Holders, in and to (A)
     money in an amount, (B) U.S. Government Obligations that, through the
     payment of interest, premium, if any, and principal in respect thereof in
     accordance with their terms, will provide, not later than one day before
     the due date of any payment referred to in this clause (i), money in an
     amount or (C) a combination thereof in an amount sufficient, in the opinion
     of a nationally recognized firm of independent public accountants expressed
     in a written certification thereof delivered to the Trustee, to pay and
     discharge, without consideration of the reinvestment of such interest and
     after payment of all federal, state and local taxes or other charges and
     assessments in respect thereof payable by the Trustee, the principal of,
     premium, if any, and interest on the outstanding Notes on the Stated
     Maturity of such principal or interest; provided that the Trustee shall
     have been irrevocably instructed to apply such money or the proceeds of
     such U.S. Government Obligations to the payment of such principal, premium,
     if any, and interest with respect to the Notes;

          (ii) such deposit will not result in a breach or violation of, or
     constitute a default under, this Indenture or any other agreement or
     instrument to which the Obligors, the Company or any of their Subsidiaries
     is a party or by which the Obligors, the Company or any of their
     Subsidiaries is bound;

          (iii)  immediately after giving effect to such deposit on a pro forma
     basis, no Default or Event of Default shall have occurred and be continuing
     on the date of such deposit or during the period ending on the 123/rd/ day
     after such date of such deposit;

          (iv) the Obligors have delivered to the Trustee an Opinion of Counsel
     to the effect that (A) the creation of the defeasance trust does not
     violate the Investment Company Act of 1940, (B) the Trustee, for the
     benefit of the Holders, has a valid first-priority security interest in the
     trust funds, (C) the Holders will not recognize income, gain or loss for
     federal income tax purposes as a result of such deposit and defeasance of
     certain obligations and will be subject to federal income tax on the same
     amount and in the same manner and at the same times as would have been the
     case if such deposit and defeasance had not occurred and (D) after the
     passage of 123 days following the deposit (except, with respect to any
     trust funds for the account of any Holder who may be deemed to be an
     "insider" for purposes of the United States Bankruptcy Code, after one year
     following the deposit), the trust funds will not be subject to the effect
     of Section 547 of the United States Bankruptcy Code or Section 15 of the
     New York Debtor and Creditor Law in a case commenced by or against the
     Obligors or the Company under either such statute, and either (1) the trust
     funds will no longer remain the property of the Obligors or the Company
     (and therefore will not be subject to the effect of any applicable
     bankruptcy, insolvency, reorganization or similar laws affecting creditors'
     rights generally) or (2) if a court were 

<PAGE>
 
                                      72


     to rule under any such law in any case or proceeding that the trust funds
     remained property of the Obligors or the Company, (x) assuming such trust
     funds remained in the possession of the Trustee prior to such court ruling
     to the extent not paid to the Holders, the Trustee will hold, for the
     benefit of the Holders, a valid and perfected security interest in such
     trust funds that is not avoidable in bankruptcy or otherwise (except for
     the effect of Section 552(b) of the United States Bankruptcy Code on
     interest on the trust funds accruing after the commencement of a case under
     such statute), (y) the Holders will be entitled to receive adequate
     protection of their interests in such trust funds if such trust funds are
     used in such case or proceeding and (z) no property, rights in property or
     other interest granted to the Trustee or the Holders in exchange for, or
     with respect to, such trust funds will be subject to any prior rights of
     holders of other Indebtedness of the Company;

          (v) if the Notes are then listed on a national securities exchange,
     the Obligors shall have delivered to the Trustee an Opinion of Counsel to
     the effect that such deposit, defeasance and discharge will not cause the
     Notes to be delisted; and

          (vi) the Obligors have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, in each case stating that all
     conditions precedent provided for herein relating to the defeasance
     contemplated by this Section 8.03 have been complied with.

      SECTION 8.04.  Application of Trust Money.  Subject to Section 8.06, the
                     --------------------------                               
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
and shall apply the deposited money and the money from U.S. Government
Obligations in accordance with the Notes and this Indenture to the payment of
principal of, premium, if any, and interest on the Notes; but such money need
not be segregated from other funds except to the extent required by law.

      SECTION 8.05.  Repayment to Obligors.  Subject to Sections 7.07, 8.01,
                     ---------------------                                  
8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Obligors upon request set forth in an Officers' Certificate any excess money
held by them at any time and thereupon shall be relieved from all liability with
respect to such money.  The Trustee and the Paying Agent shall pay to the
Obligors upon request any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two years; provided that
the Trustee or such Paying Agent before being required to make any payment may
cause to be published at the expense of the Obligors once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money at such Holder's address (as set forth in the Security Register)
notice that such money remains unclaimed and that after a date specified therein
(which shall be at least 30 days from the date of such publication or mailing)
any unclaimed balance of such money then remaining will be repaid to the
Obligors.  After payment to the Obligors, Holders entitled to such money must
look to the Obligors for payment as general creditors unless an applicable law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.

<PAGE>
 
                                      73


      SECTION 8.06.  Reinstatement.  If the Trustee or Paying Agent is unable to
                     -------------                                              
apply any money or U.S. Government Obligations in accordance with Section 8.01,
8.02 or 8.03, as the case may be, by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Obligors' and the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02 or
8.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.01, 8.02 or 8.03, as the case may be; provided that, if the
Obligors or the Company have made any payment of principal of, premium, if any,
or interest on any Notes because of the reinstatement of its obligations, the
Obligors or the Company, as the case may be, shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.


                                 ARTICLE NINE
                      AMENDMENTS, SUPPLEMENTS AND WAIVERS

      SECTION 9.01.  Without Consent of Holders.  The Obligors and the Company,
                     --------------------------                                
when authorized by resolutions of their Boards of Directors (as evidenced by a
Board Resolution), and the Trustee may amend or supplement this Indenture or the
Notes without notice to or the consent of any Holder:

          (1) to cure any ambiguity, defect or inconsistency in this Indenture;
     provided that such amendments or supplements shall not in the good faith
     opinion of the Board of Directors, as evidenced by a Board Resolution,
     adversely affect the interests of the Holders in any material respect;

          (2) to provide for uncertificated Notes in addition to or in place of
     certificated Notes;

          (3) to comply with Article Five and to provide for the assumption of
     the Company's or an Obligor's obligations to Holders of Notes in the case
     of a merger or consolidation;

          (4) to comply with any requirements of the Commission in order to
     effect or maintain the qualification of this Indenture under the TIA;

          (5) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee; or

<PAGE>
 
                                      74

          (6) to make any change that would provide additional rights or
     benefits to the Holders of Notes or that, in the good faith opinion of the
     Board of Directors of the Company evidenced by a Board Resolution, does not
     adversely affect the rights of any Holder in any material respect.

      SECTION 9.02.  With Consent of Holders.  Subject to Sections 6.04 and 6.07
                     -----------------------                                    
and without prior notice to the Holders, the Obligors and the Company, when
authorized by their Boards of Directors, (as evidenced by a Board Resolution),
and the Trustee may amend this Indenture and the Notes with the written consent
of the Holders of a majority in aggregate principal amount at maturity of the
Notes then outstanding, and the Holders of a majority in aggregate principal
amount at maturity of the Notes then outstanding by written notice to the
Trustee may waive future compliance by the Obligors or the Company with any
provision of this Indenture or the Notes.

     Notwithstanding the provisions of this Section 9.02, without the consent of
each Holder affected, an amendment or waiver, including a waiver pursuant to
Section 6.04, may not:

          (i) change the Stated Maturity of the principal of, or any installment
     of interest on, any Note;

          (ii) reduce the Accreted Value or principal of, or premium, if any, or
     interest on, any Note;

          (iii)  change the place or currency of payment of principal of, or
     premium, if any, or interest on, any Note;
 
          (iv) impair the right to institute suit for the enforcement of any
     payment on or after the Stated Maturity (or, in the case of a redemption,
     on or after the Redemption Date) of any Note;

          (v) waive a default in the payment of principal of, premium, if any,
     or interest on, the Notes (except a rescission of acceleration of the Notes
     by the Holders as provided in this Indenture and a waiver of the payment
     default that resulted from such acceleration);

          (vi) modify the Guaranty in a manner adverse to the Holders;

          (vii)  modify any of the provisions of this Section 9.02, except to
     increase any such percentage or to provide that certain other provisions of
     this Indenture cannot be modified or waived without the consent of the
     Holder of each outstanding Note affected thereby; or

<PAGE>
 
                                      75


          (viii)  reduce the percentage or aggregate principal amount of
     outstanding Notes the consent of whose Holders is necessary for waiver of
     compliance with certain provisions of this Indenture or for waiver of
     certain defaults.

     It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.

     After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Obligors shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver.  The Obligors will mail
supplemental indentures to Holders upon request. Any failure of the Obligors to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.

      SECTION 9.03.  Revocation and Effect of Consent.  Until an amendment,
                     --------------------------------                      
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the Note of the consenting
Holder, even if notation of the consent is not made on any Note.  Subject to the
following paragraph, any such Holder or subsequent Holder may revoke the consent
as to its Note or portion of its Note.  Such revocation shall be effective only
if the Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.  An amendment, supplement or waiver
shall become effective on receipt by the Registrar of written consents from the
Holders of the requisite percentage in principal amount of the outstanding Notes
and notification to the Trustee thereof.

     The Obligors may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver.  If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date.  No such consent shall be valid or effective
for more than 90 days after such record date.

     After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it is of the type described in any of clauses (i) through
(viii) of Section 9.02.  In case of an amendment or waiver of the type described
in clauses (i) through (viii) of Section 9.02, the amendment or waiver shall
bind each Holder who has consented to it and every subsequent Holder of a Note
that evidences the same indebtedness as the Note of the consenting Holder.

      SECTION 9.04.  Notation on or Exchange of Notes.  If an amendment,
                     --------------------------------                   
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver such Note to the Trustee.  At the Obligors' expense, the
Trustee may place an appropriate notation on the Note 

<PAGE>
 
                                       76



about the changed terms and return it to the Holder and the Trustee may place an
appropriate notation on any Note thereafter authenticated. Alternatively, if the
Obligors or the Trustee so determine, the Obligors in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms.

      SECTION 9.05.  Trustee to Sign Amendments, Etc.  The Trustee shall be
                     -------------------------------                       
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture.  Subject to the preceding sentence, the Trustee shall sign such
amendment, supplement or waiver if the same does not adversely affect the
rights, duties or immunities of the Trustee under this Indenture or otherwise.
The Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver that affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.

      SECTION 9.06.  Conformity with Trust Indenture Act.  Every supplemental
                     -----------------------------------                     
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.


                                  ARTICLE TEN
                               GUARANTY OF NOTES

      SECTION 10.01.  Guaranty.  Subject to the provisions of this Article Ten,
                      --------                                                 
the Company hereby fully, unconditionally and irrevocably guarantees to each
Holder and to the Trustee on behalf of the Holders:  (i) the due and punctual
payment of the principal of, premium, if any, and interest on each Note, when
and as the same shall become due and payable, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal of and interest, if any, on the Notes, to the extent lawful,
and the due and punctual performance of all other obligations of the Obligors to
the Holders or the Trustee, all in accordance with the terms of such Note and
this Indenture and (ii) in the case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, at Stated Maturity, by acceleration or otherwise.  The
Company hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Obligors, any
right to require a proceeding first against the Obligors, the benefit of
discussion, protest or notice with respect to any such Note or the debt
evidenced thereby and all demands whatsoever, and covenants that this Guaranty
will not be discharged as to any such Note except by payment in full of the
principal thereof and interest thereon and as provided in Section 8.01 and
Section 8.02 (subject to Section 8.06).  The maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Six for the purposes
of this Article Ten.  In the event of any declaration of acceleration of such
obligations as provided in Article Six, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Company for the purpose
of this 

<PAGE>
 
                                       77


Article Ten. In addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article Six, the Trustee shall promptly
make a demand for payment on the Notes under the Guaranty provided for in this
Article Ten.

     If the Trustee or the Holder of any Note is required by any court or
otherwise to return to the Obligors or the Company, or any custodian, receiver,
liquidator, trustee, sequestrator or other similar official acting in relation
to the Obligors or the Company, any amount paid to the Trustee or such Holder in
respect of a Note, this Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect.  The Company further agrees, to the fullest
extent that it may lawfully do so, that, as between it, on the one hand, and the
Holders and the Trustee, on the other hand, the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Six hereof for the
purposes of this Guaranty, notwithstanding any stay, injunction or other
prohibition extant under any applicable bankruptcy law preventing such
acceleration in respect of the obligations Guaranteed hereby.

     The Company hereby irrevocably waives any claim or other rights which it
may now or hereafter acquire against the Obligors that arise from the existence,
payment, performance or enforcement of its obligations under this Guaranty and
this Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of the Holders against the Obligors or any
collateral which any such Holder or the Trustee on behalf of such Holder
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including, without limitation, the
right to take or receive from the Obligors, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other rights.  If any amount shall be paid to the
Company in violation of the preceding sentence and the principal of, premium, if
any, and accrued interest on the Notes shall not have been paid in full, such
amount shall be deemed to have been paid to the Company for the benefit of, and
held in trust for the benefit of, the Holders, and shall forthwith be paid to
the Trustee for the benefit of the Holders to be credited and applied upon the
principal of, premium, if any, and accrued interest on the Notes.  The Company
acknowledges that it will receive direct and indirect benefits from the issuance
of the Notes pursuant to this Indenture and that the waivers set forth in this
Section 10.01 are knowingly made in contemplation of such benefits.

     The Guaranty set forth in this Section 10.01 shall not be valid or become
obligatory for any purpose with respect to a Note until the certificate of
authentication on such Note shall have been signed by or on behalf of the
Trustee.

      SECTION 10.02.  Obligations Unconditional.  Subject to Section 10.05,
                      -------------------------                            
nothing contained in this Article Ten or elsewhere in this Indenture or in the
Notes is intended to or shall impair, as among the Company and the Holders of
the Notes, the obligation of the Company, which is absolute and unconditional,
upon failure by the Obligors, to pay to the Holders of the Notes the principal
of, premium, if any, and interest on the Notes as and when the same shall become
due 

<PAGE>
 
                                       78

and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the Holders of the Notes and creditors of the Company,
nor shall anything herein or therein prevent the Holder of any Note or the
Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture.

     Without limiting the foregoing, nothing contained in this Article Ten will
restrict the right of the Trustee or the Holders of the Notes to take any action
to declare the Guaranty to be due and payable prior to the Stated Maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder.

<PAGE>
 
                                       79


      SECTION 10.03.  Notice to Trustee.  The Company shall give prompt written
                      -----------------                                        
notice to the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Guaranty pursuant
to the provisions of this Article Ten.

      SECTION 10.04.  This Article Not to Prevent Events of Default.  The
                      ---------------------------------------------      
failure to make a payment on account of principal of, premium, if any, or
interest on the Notes by reason of any provision of this Article will not be
construed as preventing the occurrence of an Event of Default.

      SECTION 10.05.  Limitation.  Notwithstanding any other provision of this
                      ----------                                              
Indenture or the Notes, the obligations of the Company will be limited to the
maximum amount which, after giving effect to all other contingent and fixed
liabilities of the Company and after giving effect to any collections from or
payments made by or on behalf of any Obligor in respect of the obligations of
such Obligor under this Indenture, will result in the obligations of the Company
under its Guaranty not constituting a fraudulent conveyance or fraudulent
transfer under applicable law.
 

                                 ARTICLE ELEVEN
                                 MISCELLANEOUS

      SECTION 11.01.  Trust Indenture Act of 1939.  Prior to the effectiveness
                      ---------------------------                             
of the Registration Statement, this Indenture shall incorporate and be governed
by the provisions of the TIA that are required to be part of and to govern
indentures qualified under the TIA.  After the effectiveness of the Registration
Statement, this Indenture shall be subject to the provisions of the TIA that are
required to be a part of this Indenture and shall, to the extent applicable, be
governed by such provisions.

      SECTION 11.02.  Notices.  Any notice or communication shall be
                      -------                                       
sufficiently given if in writing and delivered in person or mailed by first-
class mail addressed as follows:

     if to the Obligors or the Company, to each of them care of:
     ---------------------------------------------------------- 

          Renaissance Media Group LLC
          1 Cable Vision Center
          Suite 100
          Ferndale, New York 12734
          Attention:  Executive Vice President
                       & Chief Financial Officer
          Facsimile Number:  (914) 295-2601

<PAGE>
 
                                       80

     if to the Trustee:
     ----------------- 

          United States Trust Company of New York
          114 West 47/th/ Street
          New York, New York  10036-1532
          Attention:  Corporate Trust Division: 25/th/ Floor
          Facsimile Number: (212) 852-1626

     The Obligors, the Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.

     Any notice or communication mailed to a Holder shall be mailed to him at
his address as it appears on the Security Register by first-class mail and shall
be sufficiently given to him if so mailed within the time prescribed.  Any
notice or communication shall also be so mailed to any Person described in TIA
Section 313(c), to the extent required by the TIA.  Copies of any such
communication or notice to a Holder shall also be mailed to the Trustee and each
Agent at the same time.

     Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.  Except for a
notice to the Trustee, which is deemed given only when received, and except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 11.02, it is duly given, whether or not the
addressee receives it.

     Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

     In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.

     Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes.  The Company,
the Obligors, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).

      SECTION 11.03.  Certificate and Opinion as to Conditions Precedent.  Upon
                      --------------------------------------------------       
any request or application by the Obligors or the Company to the Trustee to take
any action under this Indenture, the Obligors or the Company shall furnish to
the Trustee:

<PAGE>
 
                                       81

          (i) an Officers' Certificate in form and substance reasonably
     satisfactory to the Trustee stating that, in the opinion of the signers,
     all conditions precedent, if any, provided for in this Indenture relating
     to the proposed action have been complied with; and

          (ii) an Opinion of Counsel in form and substance reasonably
     satisfactory to the Trustee stating that, in the opinion of such Counsel,
     all such conditions precedent have been complied with.

      SECTION 11.04.  Statements Required in Certificate or Opinion.  Each
                      ---------------------------------------------       
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

          (i)    a statement that each person signing such certificate or
     opinion has read such covenant or condition and the definitions herein
     relating thereto;

          (ii)   a brief statement as to the nature and scope of the examination
     or investigation upon which the statements or opinions contained in such
     certificate or opinion is based;

          (iii)  a statement that, in the opinion of each such person, he has
     made such examination or investigation as is necessary to enable him to
     express an informed opinion as to whether or not such covenant or condition
     has been complied with; and

          (iv)   a statement as to whether or not, in the opinion of each such
     person, such condition or covenant has been complied with; provided,
     however, that, with respect to matters of fact, an Opinion of Counsel may
     rely on an Officers' Certificate or certificates of public officials.

      SECTION 11.05.  Rules by Trustee, Paying Agent or Registrar.  The Trustee
                      -------------------------------------------              
may make reasonable rules for action by or at a meeting of Holders.  The Paying
Agent or Registrar may make reasonable rules for its functions.

      SECTION 11.06.  Payment Date Other Than a Business Day.  If an Interest
                      --------------------------------------                 
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of maturity
of any Note shall not be a Business Day, then payment of principal of, premium,
if any, or interest on such Note, as the case may be, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Payment Date or Redemption
Date, or at the Stated Maturity or date of maturity of such Note; provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Payment Date, Redemption Date, Stated Maturity or date of maturity, as the
case may be.

<PAGE>
 
                                       82

      SECTION 11.07.  Governing Law.  This Indenture and the Notes shall be
                      -------------                                        
governed by the laws of the State of New York.  Each of the Trustee, the
Obligors, the Company and the Holders agrees to submit to the jurisdiction of
the courts of the State of New York in any action or proceeding arising out of
or relating to this Indenture or the Notes.

      SECTION 11.08.  No Adverse Interpretation of Other Agreements.  This
                      ---------------------------------------------       
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Obligors, the Company or any of their Subsidiaries.  Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.

      SECTION 11.09.  No Recourse Against Others.  No recourse for the payment
                      --------------------------                              
of the principal of, premium, if any, or interest on any of the Notes, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Obligors or the Company
contained in this Indenture or in any of the Notes or the Guaranty, or because
of the creation of any Indebtedness represented thereby, shall be had against
any incorporator or against any past, present or future partner, stockholder,
member, officer, director, member of a board of representatives, employee or
controlling person, as such, of an Obligor or the Company or of any successor
Person, either directly or through the Obligors or the Company or any successor
Person, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.

      SECTION 11.10.  Successors.  All agreements of the Obligors and the
                      ----------                                         
Company in this Indenture and the Notes shall bind their respective successors.
All agreements of the Trustee in this Indenture shall bind its successors.

      SECTION 11.11.  Duplicate Originals.  The parties may sign any number of
                      -------------------                                     
copies of this Indenture.  Each signed copy shall be an original, but all of
them together represent the same agreement.

      SECTION 11.12.  Separability.  In case any provision in this Indenture or
                      ------------                                             
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

      SECTION 11.13.  Table of Contents, Headings, Etc.  The Table of Contents,
                      --------------------------------                         
Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
and provisions hereof.

<PAGE>
 
                                   SIGNATURES

     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.


                              RENAISSANCE MEDIA (LOUISIANA) LLC

                              By: /s/ Fred Schulte
                                  -----------------------------------
                                  Name: Fred Schulte
                                  Title: President


                              RENAISSANCE MEDIA (TENNESSEE) LLC

                              By: /s/ Fred Schulte
                                  -----------------------------------
                                  Name: Fred Schulte
                                  Title: President


                              RENAISSANCE MEDIA CAPITAL CORPORATION

                              By: /s/ Fred Schulte 
                                  -----------------------------------
                                  Name: Fred Schulte
                                  Title: President


                              RENAISSANCE MEDIA GROUP LLC

                              By: /s/ Fred Schulte
                                  -----------------------------------
                                  Name: Fred Schulte
                                  Title: President


                              UNITED STATES TRUST COMPANY OF
                              NEW YORK, as Trustee

                              By: /s/ James D. Nesci 
                                  -----------------------------------
                                  Name: James D. Nesci
                                  Title: Assistant Vice President

<PAGE>
 
                                                                       EXHIBIT A
                                                                       ---------


                                 [FACE OF NOTE]

                       RENAISSANCE MEDIA (LOUISIANA) LLC
                       RENAISSANCE MEDIA (TENNESSEE) LLC
                     RENAISSANCE MEDIA CAPITAL CORPORATION

                       10% Senior Discount Note due 2008

                                              [CUSIP] [CINS] [ISIN] [__________]


No. ____                                                              $_________

     The following information is supplied for purposes of Sections 1273 and
1275 of the Internal Revenue Code:


<TABLE>
<S>                                     <C>
Issue Date:  April 9, 1998
                                        Original issue discount under Section
Yield to maturity for period from       1273 of the Internal Revenue Code
Issue Date to April 15, 2008: 10%,      (for each $1,000 principal amount):
compounded semiannually on  April 15    $887.09
and October 15, commencing October
15, 1998 (computed without giving       Issue Price (for each $1,000
effect to the additional payments of    principal amount):  $612.91
interest in the event the issuer
fails to commence the exchange offer
or cause the registration statement
to be declared effective, each as
described on the reverse hereof)
 
</TABLE>


     RENAISSANCE MEDIA (LOUISIANA) LLC, a Delaware limited liability company
("Renaissance Louisiana"), RENAISSANCE MEDIA (TENNESSEE) LLC, a Delaware limited
- -----------------------                                                         
liability company ("Renaissance Tennessee"), RENAISSANCE MEDIA CAPITAL
                    ---------------------                             
CORPORATION, a Delaware corporation, as issuers ("Renaissance Capital" and
                                                  -------------------     
together with Renaissance Louisiana and Renaissance Tennessee, the "Obligors,"
                                                                    --------  
which term includes any successor under the Indenture hereinafter referred to),
for value received, each jointly and severally promises to pay to _____________,
or its registered assigns, the principal sum of ____________ ($____) on  April
15, 2008, to be fully and unconditionally guaranteed on a senior basis by
RENAISSANCE MEDIA GROUP LLC, a Delaware limited liability company (the
"Company").
 -------   

     Interest Payment Dates:   April 15 and October 15, commencing October 15,
2003.

<PAGE>
 
                                      A-2

     Regular Record Dates:    April 1 and October 1.

     Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

     IN WITNESS WHEREOF, the Obligors have caused this Note to be signed
manually or by facsimile by its duly authorized officers.


                              RENAISSANCE MEDIA (LOUISIANA) LLC


                              By: 
                                  ----------------------------------
                                  Name:
                                  Title:

                              By: 
                                  ----------------------------------
                                  Name:
                                  Title:


                              RENAISSANCE MEDIA (TENNESSEE) LLC


                              By: 
                                  ----------------------------------
                                  Name:
                                  Title:
 
                              By: 
                                  ----------------------------------
                                  Name:
                                  Title:

<PAGE>
 
                                      A-3

                              RENAISSANCE MEDIA CAPITAL CORPORATION


                              By: 
                                  ----------------------------------
                                  Name:
                                  Title:

                              By: 
                                  ----------------------------------
                                  Name:
                                  Title:

<PAGE>
 
                                      A-4

                   (Trustee's Certificate of Authentication)

    This is one of the 10% Senior Discount Notes due 2008 described in the
within-mentioned Indenture.



Date:  April 9, 1998              UNITED STATES TRUST COMPANY OF
                                  NEW YORK,
                                    as Trustee

                              By: 
                                  ----------------------------------
                                  Authorized Signatory

<PAGE>
 
                                      A-5

                             [REVERSE SIDE OF NOTE]

                       RENAISSANCE MEDIA (LOUISIANA) LLC
                       RENAISSANCE MEDIA (TENNESSEE) LLC
                     RENAISSANCE MEDIA CAPITAL CORPORATION


                       10% Senior Discount Note due 2008



1.  Principal and Interest.
    ---------------------- 

     The Obligors will, jointly and severally, pay the principal of this Note on
April 15, 2008.

     The Obligors promise, jointly and severally, to pay interest on the
principal amount of this Note on each Interest Payment Date, as set forth below,
at the rate per annum shown above.

     Interest will be payable semiannually (to the holders of record of the
Notes at the close of business on the April 1 or October 1 immediately preceding
the Interest Payment Date) on each Interest Payme