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SEC Filings

10-Q
AVALON CABLE OF MICHIGAN INC/ filed this Form 10-Q on 11/12/1999
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adverse manner or prove to be materially inaccurate, or if we engage in any
significant acquisitions. We cannot assure you that this financing, if permitted
under the terms of the indenture governing the senior discount notes or other
then applicable agreements, will be available on terms acceptable to us or at
all.

 We have signed an agreement with Charter Communications, Inc.("Charter
Communications") under which Charter Communications agreed to purchase for cash
all of the equity interests in our company and assume and repay our outstanding
debt. The completion of this transaction would cause an event of default under
our credit facility. Our agreement with Charter Communications requires that it
either pay all amounts due under the credit facility at the time the acquisition
is completed or cause the event of default arising from its acquisition to be
waived. The consummation of the Charter Communications transaction would also
constitute a change of control under the indenture of the senior discount notes.
As a result, the issuers will be required to offer to repurchase the senior
discount notes from each holder at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
liquidated damages thereon to the date of purchase. The amount of cash that the
issuers will need to repurchase the senior discount notes from holders upon a
change of control will depend upon the number of holders that accept the
issuers' offer to repurchase such senior discount notes. To the extent that the
issuers have insufficient funds to repurchase all of the senior discount notes
for which their offers to repurchase the senior discount notes are accepted by
holders, (1) the issuers must borrow funds to repurchase such senior


discount notes and/or (2) Charter Communications will need to contribute equity
to the issuers. Charter Communications has represented to us in the documents
providing for the acquisition of our company that it will have sufficient funds
to consummate the transaction and pay related fees and expenses. They have
further represented that the payment of such amounts is not dependent upon the
consummation of an initial public offering of equity securities or any offering
of debt securities by it or any of its affiliates. We do not know, however,
Charter Communications' plans for financing its acquisition of our company and
Charter Communications is not obligated to make any equity contributions to the
issuers. The issuers' failure to repurchase all of the senior discount notes for
which offers were accepted would constitute an event of default under the
indenture.

Year 2000 Information and Readiness Discussion

 We have financial, administrative and operational systems. In July 1999, we
completed the process of reviewing our existing systems. We are currently in the
process of reviewing the systems employed by third party service providers
(including billing services) in order to analyze the extent, if any, to
which we face a "Year 2000" problem (a problem that is expected to arise with
respect to computer programs that use only two digits to identify a year in the
date field and which were designed and developed without considering the impact
of the upcoming change in the century).

 In particular, in July 1999, we completed a review and survey of all
information technology and non-information technology equipment and software to
discover items that may not be Year 2000 compliant. The results of review and
survey identified two items that required remediation and testing. Those items

relate to our telephone router and New England headend. We have completed the
necessary repairs for these items. In addition, we have contacted each material
third party vendor of products and services used by our company in writing in
order to determine the Year 2000 status of the products and services provided by
such vendors. To date, our third party vendors have indicated that all material
products and services are Year 2000 compliant.

 Our most reasonable likely worst case Year 2000 scenario involves the
complete failure of our third party billing and customer support system. Such a
scenario is, however, highly unlikely given that our billing and customer
support systems are relatively new and that our vendors provide readily
available Year 2000 upgrades and/or system replacement packages. In the unlikely
event that our third party billing, customer support and addressable control