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S-4
RENAISSANCE MEDIA GROUP LLC filed this Form S-4 on 06/12/1998
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<PAGE>
 
                                                                    EXHIBIT 10.2


                            Asset Purchase Agreement

                            Dated November 14, 1997

                                    between

                         Renaissance Media Holdings LLC

                                      and

                                 TWI Cable Inc.

<PAGE>
 
                               TABLE OF CONTENTS

<TABLE> 
<CAPTION> 

                                                                            Page
<S>                                                                         <C>
Article 1. Certain Definitions .............................................  1
           -------------------

  Section 1.1 Rules of Construction ........................................  1

  Section 1.2 Certain Defined Terms ........................................  2

  Section 1.3 Terms Defined in Other Sections ..............................  7

Article 2. Purchase and Sale ...............................................  8
           -----------------

  Section 2.1 Covenant of Purchase and Sale; Assets ........................  8

  Section 2.2 Excluded Assets .............................................. 10

  Section 2.3 Assumed Obligations and Liabilities .......................... 10

  Section 2.4 Purchase Price ............................................... 11

  Section 2.5 Current Items Amount ......................................... 11

  Section 2.6 Subscriber Adjustment Amount ................................. 14

Article 3. Related Matters ................................................. 14
           ---------------

  Section 3.1 Use of Names and Logos; Transitional Consulting Services ..... 14

  Section 3.2 Bulk Sales ................................................... 15

  Section 3.3 Transfer Taxes ............................................... 15

  Section 3.4 Escrow Deposit ............................................... 15

Article 4. Buyer's Representations and Warranties .......................... 15
           --------------------------------------

  Section 4.1 Organization of Buyer ........................................ 16

  Section 4.2 Authority .................................................... 16

  Section 4.3 No Conflict; Required Consents ............................... 16

  Section 4.4 Litigation ................................................... 16

  Section 4.5 Finders and Brokers .......................................... 17

</TABLE>
 

                                       i

<PAGE>
 

<TABLE> 

<S>                                                                                <C>
  Section 4.6 Full Access .......................................................  17

  Section 4.7 Offering ..........................................................  17

Article 5. Seller's Representations and Warranties ..............................  17
           ---------------------------------------

  Section 5.1 Organization and Qualification of Seller and Seller Subsidiaries...  17

  Section 5.2 Authority
 .........................................................  18 

  Section 5.3 No Conflict; Required Consents ....................................  18

  Section 5.4 Title to and Physical Condition of Assets .........................  18

  Section 5.5 Franchises, Licenses, and System Contracts ........................  19

  Section 5.6 Litigation ........................................................  20

  Section 5.7 Tax Returns; Other Reports ........................................  20

  Section 5.8 System Information ................................................  20

  Section 5.9 Compliance with Legal Requirements ................................  21

  Section 5.10 Financial and Operational Information ............................  22

  Section 5.11 No Adverse Change ................................................  22

  Section 5.12 Employees ........................................................  22

  Section 5.13 Employee Benefits ................................................  23

  Section 5.14 Environmental ....................................................  23

  Section 5.15 Accounts Receivable ..............................................  24

  Section 5.16 Taxpayer Identification Number ...................................  24

  Section 5.17 Competitive Activity .............................................  24

  Section 5.18 No Other Commitment ..............................................  24

  Section 5.19 Experience .......................................................  24

  Section 5.20 Investment .......................................................  25

  Section 5.21 Disclosure of Information ........................................  25

</TABLE>
 

                                      ii

<PAGE>
 

<TABLE> 

<S>                                                                          <C>
Article 6. Covenants .......................................................  25
           ---------

  Section 6.1 Certain Affirmative Covenants of Seller ......................  25

  Section 6.2 Certain Negative Covenants of Seller .........................  27

  Section 6.3 Certain Covenants of Buyer ...................................  28

  Section 6.4 Employee Matters .............................................  29
 
  Section 6.5 WARN Act .....................................................  30

  Section 6.6 Title Insurance ..............................................  30

  Section 6.7 HSR Act Compliance ...........................................  31

  Section 6.8 Post-Closing Obtaining of Consents, Authorizations
              and Approvals ................................................  31

  Section 6.9 Social Contract ..............................................  31

  Section 6.10 Confidentiality .............................................  32

  Section 6.11 Supplements to Schedules ....................................  33

  Section 6.12 Notification of Certain Matters .............................  33

  Section 6.13 Commercially Reasonable Efforts .............................  34

  Section 6.14 Environmental Reports .......................................  34

  Section 6.15 Access to Books and Records .................................  34

  Section 6.16 Other Agreements ............................................  34

  Section 6.17 Guaranty of Seller's Post-Closing Obligations ...............  35

  Section 6.18 Special Provisions for Franchise Transfers ..................  35

Article 7. Conditions Precedent ............................................  39
           --------------------

  Section 7.1 Conditions to Buyer's Obligations ............................  39

  Section 7.2 Conditions to Seller's Obligations ...........................  41

Article 8. Closing .........................................................  42
           -------

  Section 8.1 Closing; Time and Place ......................................  42

</TABLE>
 
                                      iii

<PAGE>
 

<TABLE>

<S>                                                                           <C> 
  Section 8.2 Seller's Obligations .......................................... 43

  Section 8.3 Buyer's Obligations ........................................... 44

Article 9. Termination ...................................................... 45
           -----------

  Section 9.1 Termination Events ............................................ 45

  Section 9.2 Effect of Termination ......................................... 45

Article 10. Remedies ........................................................ 47
            --------

  Section 10.1 Remedies Cumulative .......................................... 47

  Section 10.2 Attorneys' Fees .............................................. 47

Article 11. Indemnification ................................................. 47
            ---------------

  Section 11.1 Indemnification by Seller .................................... 47

  Section 11.2 Indemnification by Buyer ..................................... 48

  Section 11.3 Indemnified Third Party Claim ................................ 49

  Section 11.4 Determination of Indemnification Amounts and Related Matters.. 50

  Section 11.5 Time and Manner of Certain Claims ............................ 50

Article 12. Miscellaneous Provisions ........................................ 50
            ------------------------

  Section 12.1 Expenses ..................................................... 50

  Section 12.2 Waivers ...................................................... 51

  Section 12.3 Notices ...................................................... 51

  Section 12.4 Entire Agreement; Amendments ................................. 52

  Section 12.5 Binding Effect; Benefits; Assignments ........................ 52

  Section 12.6 Headings ..................................................... 53

  Section 12.7 Counterparts ................................................. 53

  Section 12.8 Publicity .................................................... 53

  Section 12.9 Governing Law ................................................ 53

</TABLE>
 
                                      iv

<PAGE>
 

<TABLE> 

<S>                                                                           <C>
  Section 12.10 Third Parties; Joint Ventures ............................... 53

  Section 12.11 Construction ................................................ 54

  Section 12.12 Risk of Loss ................................................ 54
</TABLE>
 

                                       v

<PAGE>
 
                            Asset Purchase Agreement
                            ------------------------

     THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of November 14, 1997, by and between RENAISSANCE MEDIA HOLDINGS LLC, a
Delaware limited liability company ("Buyer"), and TWI CABLE INC., a Delaware
corporation ("Seller").

                                    RECITALS
                                    --------

     A.  Seller owns and operates cable television systems which are franchised
or hold other operating authority and operate in and around the City of Jackson,
Tennessee, Picayune Cablevision, Inc. (an indirect wholly-owned subsidiary of
Seller) owns and operates a cable television system which is franchised or holds
other operating authority and operates in and around the City of Picayune,
Mississippi, and Cablevision Industries of Louisiana Partnership (an indirect
wholly-owned subsidiary of Seller) owns and operates cable television systems
which are franchised or hold other operating authority and operate in and around
the Parishes of Lafourche, St. Landry, St. Tammany and Pointe Coupee, Louisiana
(all such Tennessee, Mississippi and Louisiana cable television systems
together, the "Systems"). Picayune Cablevision, Inc. and Cablevision Industries
of Louisiana Partnership are sometimes referred to herein collectively as the
"Seller Subsidiaries".

     B.  Seller and the Seller Subsidiaries are willing to sell and convey to
Buyer, and Buyer is willing to purchase from Seller and the Seller Subsidiaries,
substantially all of the assets comprising the Systems other than the Excluded
Assets (as hereinafter defined), upon the terms and conditions set forth in this
Agreement.

                                   AGREEMENTS
                                   ----------

     In consideration of the foregoing recitals, which are incorporated herein
by this reference, and the mutual covenants and promises set forth herein, Buyer
and Seller agree as follows:

                      
                                   Article 1.
                              Certain Definitions
                              -------------------

     Section 1.1  Rules of Construction. Unless otherwise expressly provided in
                  ---------------------
this Agreement, or unless the context clearly requires otherwise, (a) accounting
terms used in this Agreement shall have the meanings ascribed to them under
GAAP, (b) words used in this Agreement, regardless of the gender and number
used, shall be deemed and construed to include any other gender, masculine,
feminine, or neuter, and any other number, singular or plural, as the context
requires, (c) the words "including", "include" and "includes" are not limiting,
and the word "or" is not exclusive, (d) the capitalized term "Section" refers to
sections of this Agreement, (e) references to a particular Section include all
subsections thereof, (f) references to a particular statute or regulation
include all amendments thereto, rules and regulations thereunder and any

<PAGE>
 
successor statute, rule or regulation, or published clarifications or
interpretations with respect thereto, in each case as from time to time in
effect, (g) references to Schedules and Exhibits shall, unless otherwise
indicated, refer to the Schedules and Exhibits attached to this Agreement, which
shall be incorporated in and constitute a part of this Agreement by such
reference, (h) references to a Person include such person's successors and
assigns to the extent not prohibited by this Agreement, and (i) references to a
"day" or number of "days" (without the explicit qualification "business") shall
be interpreted as a reference to a calendar day or number of calendar days, and
if any action or notice is to be taken or given on or by a particular calendar
day, and such calendar day is not a business day, then such action or notice
shall be deferred until, or may be taken or given on, the next business day.

     Section 1.2  Certain Defined Terms. As used in this Agreement:
                  ---------------------
   
     "Adjustment Time" means 11:59 p.m., local time, on the Closing Date.

     "Affiliate" means, with respect to a Person, any other Person controlling,
controlled by or under common control with the Person, with "control" for such
purpose meaning the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities or voting interests, by contract or
otherwise.

     "Benefit Arrangement" means any material benefit arrangement that is not an
Employee Benefit Plan, including (a) any employment or consulting agreement, (b)
any arrangement providing for insurance coverage or workers' compensation
benefits, (c) any incentive or deferred bonus arrangement, (d) any arrangement
providing termination allowance, severance or similar benefits, (e) any equity
compensation plan, (f) any deferred compensation plan and (g) any compensation
policy or practice.

     "Cable Act" means Title VI of the Communications Act of 1934, 47 U.S.C. (S)
151 et. seq., and all other provisions of the Cable Communications Policy Act of
1984, Pub. L. No. 98-549, and the Cable Television Consumer Protection and
Competition Act of 1992, Pub. L. No. 102-385.

     "Closing Date" means the date of Closing.

     "Code" means the Internal Revenue Code of 1986.

     "Communications Act" means the Communications Act of 1934.

     "Contract" means any written contract, mortgage, deed of trust, bond,
indenture, lease, license, note, franchise, certificate, option, warrant, right
or other instrument, document, obligation or agreement, and any oral obligation,
right or agreement.

     "Copyright Act" means the Copyright Act of 1976.

                                       2

<PAGE>
 
     "Employee Benefit Plan" means any pension, retirement, profit-sharing,
deferred compensation, vacation, severance, bonus, incentive, medical, vision,
dental, disability, life insurance or any other employee benefit plan as defined
in Section 3(3) of ERISA to which Seller or any Seller Subsidiary or any entity
related to Seller or any Seller Subsidiary (under the terms of Sections  414(b),
(c), (m) or (o) of the Code) contributes or which Seller or any Seller
Subsidiary or any entity related to Seller or any Seller Subsidiary (under the
terms of Sections  414(b), (c), (m) or (o) of the Code) sponsors or maintains,
or by which Seller or any Seller Subsidiary is otherwise bound and which covers
or otherwise provides benefits to any individual who performs services for the
Systems.

     "Environmental Law" means any requirement of law pertaining to land use,
air, soil, surface water, groundwater (including the protection, cleanup,
removal, remediation or damage thereof), public or employee health or safety or
any other environmental matter, including the following laws: (a) Clean Air Act
(42 U.S.C. (S) 7401, et seq.); (b) Clean Water Act, as amended (33 U.S.C. (S)
                     -- ---
1251, et seq.); (c) Watershed Protection and Flood Prevention Act, as amended
      -- ---
(16 U.S.C. (S) 1001, et seq.); (d) Comprehensive Environmental Response,
                     -- ---
Compensation and Liability Act of 1980, as amended (42 U.S.C. (S) 9601, et
                                                                        --
seq.); (e) Safe Drinking Water Act, as amended (42 U.S.C. 300f, et seq.); (f)
- ---                                                             -- ---
Toxic Substances Control Act (15 U.S.C. (S) 2601, et seq.); (g) Endangered
                                                  -- ---
Species Act of 1973, as amended (16 U.S.C. (S) 1531, et seq.); (h) Occupational
                                                     -- ---
Safety and Health Act of 1970 (29 U.S.C. (S) 651, et seq.); and (i) Resource
                                                  -- ---
Conservation and Recovery Act of 1976, as amended (42 U.S.C. (S) 6901, et seq.);
                                                                       -- ---
together with any other applicable federal, state or local laws relating to
emissions, discharges, releases or threatened releases of any Hazardous
Substance into ambient air, land, surface water, ground water, personal property
or structures, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage disposal, transport, discharge or handling
of any Hazardous Substance.

     "Equity Value" means $9,500,000.00, subject to adjustment as provided in
Sections 2.6 and 6.18.

     "ERISA" means the Employee Retirement Income Security Act of 1974.

     "FCC" means the Federal Communications Commission.

     "GAAP" means generally-accepted accounting principles applicable to the
cable television industry, consistently applied, as from time to time in effect,
including the statements and interpretations of the U.S. Financial Accounting
Standards Board.

     "Governmental Authority" means the United States of America, any state,
commonwealth, territory, or possession thereof and any political subdivision or
quasi-governmental authority of any of the same.

     "Hazardous Substance" means any pollutant, contaminant, hazardous or toxic
substance, material, constituent or waste or any pollutant that is labeled or
regulated as

                                       3

<PAGE>
 
such terms are defined in any Environmental Law or that is labeled or regulated
as such by any governmental authority and includes, without limitation, asbestos
and asbestos-containing materials and any material or substance that is: (a)
designated as a "toxic pollutant" pursuant to Section 307 of the Clean Water
Act, 33 U.S.C. Section 1251, et seq. (33 U.S.C. (S) 1317); (b) defined as a
                             -- ---
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901, et seq. (42 U.S.C. (S) 6903); (c)
                                              -- ---
defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980; or (d is so
designated or defined under any other applicable Legal Requirement.

     "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

     "Individual Subscriber" means, as to each System, any active subscriber of
such System at that System's regular monthly subscription rate for Tier Cable
(a) who has been a subscriber for at least one full month, and who has paid at
least one month's payment in full without discount, together with any applicable
installation fees unless waived in the ordinary course of business consistent
with Seller or the Seller Subsidiaries' past practices; (b) whose payment for
service (including installation fees, but exclusive of late charges) is not more
than 60 days past due from the first day of the period to which an outstanding
bill relates (provided that a subscriber's account shall not be considered
delinquent as a result of unpaid amounts not exceeding $8.00 pending the
resolution of a bona fide dispute); (c) who has not given notice of
disconnection or has not been given notice of disconnection; (d) who, consistent
with Seller's or the applicable Seller Subsidiary's standard policy on
disconnection, should not have been given notice of disconnection; and (e) who
has become a subscriber only pursuant to customary marketing promotions (other
than promotions based on offers of free cable television services) conducted in
the ordinary course of business consistent with past practices and as if neither
Seller nor the Seller Subsidiaries intended to sell the Systems hereunder.

     "Judgment" means any judgment, writ, order, injunction, award, decree or
similar act of any court, judge, justice, magistrate or similar Governmental
Authority.

     "Legal Requirements" means applicable common law and any statute,
ordinance, code or other law, rule, regulation, or order enacted, adopted or
promulgated by any Governmental Authority, including Judgments and the
Franchises.

     "Lien" means any security agreement, financing statement filed with any
Governmental Authority, conditional sale or other title retention agreement, any
lease, consignment or bailment given for purposes of security, any lien,
mortgage, indenture, pledge, option, encumbrance, adverse interest, constructive
trust or other trust, claim, attachment, exception to or defect in title or
other ownership interest (including reservations, rights of entry, possibilities
of reverter, encroachments, easement, rights-of-way, restrictive covenants,
leases, and licenses) of any kind, which otherwise

                                       4

<PAGE>
 
constitutes an interest in or claim against property, whether arising pursuant
to any Legal Requirement, under any Contract or otherwise.

     "Litigation" means any claim, action, suit, proceeding, arbitration,
investigation, hearing, or other similar activity or procedure.

     "LLC Interest" means the interest in Renaissance Media Holdings LLC that
Seller will acquire at Closing as described in the LLC Terms Sheet.

     "Losses" means any claims, losses, liabilities, damages, penalties, costs,
and expenses, including reasonable counsel fees and costs and expenses incurred
in the investigation, defense or settlement of any claims covered by the
indemnification provided for in herein, but shall in no event include incidental
or consequential damages.

     "Material Adverse Effect" means a material adverse effect on the business,
operations, assets or condition (financial or otherwise) of the Systems, taken
as a whole, other than matters affecting the cable television industry generally
(including legislative, regulatory or litigation matters) and matters relating
to or arising from national economic conditions (including financial and capital
markets).

     "Nonconsent Franchise Cash Flow Amount" means with respect to a Nonconsent
Franchise, for any period beginning on or after the Adjustment Time, the net
income (or loss) of, or otherwise derived from, the operation of such Nonconsent
Franchise and subscribers covered thereby and Assets related thereto, as
determined in accordance with, or otherwise consistent with, GAAP plus (to the
                                                                  ----        
extent deducted in calculating such net income) the sum of amortization and
depreciation, interest expense, management fees, corporate overhead, taxes on
income and non-cash charges to net income, minus (to the extent added in
                                           -----                        
calculating such net income) interest income, plus, without duplication, the
                                              ----                          
proceeds of any sale or disposition of or insurance recoveries with respect to
such Nonconsent Franchise (but only to the extent such proceeds were not
invested in or otherwise used in connection with the ownership or operation of
such Nonconsent Franchise), and minus the sum of capital expenditures (made with
                                -----                                           
the consent of Buyer, which consent shall not unreasonably be withheld)
attributable to such Nonconsent Franchise and related Assets.

     "Permitted Lien" means (a) liens for Taxes not yet past due; (b) rights of
general applicability to similarly situated property reserved to any
Governmental Authority to regulate the affected property; (c) as to leased
Assets, statutory interests of the lessors thereof or interests set forth in the
applicable lease; (d) inchoate materialmen's, mechanics', workmen's, repairmen's
or other like liens arising in the ordinary course of business (which will be
discharged by Seller or a Seller Subsidiary at or prior to the Closing Date or
in respect of which Buyer will receive a credit against the Cash Consideration
in an amount equal to the amount secured by any such lien which is not
discharged at or prior to the Closing Date); (e) any Liens to be released at or
prior to Closing; (f) as to any parcel of Real Property, any Liens that do not
in any material

                                       5

<PAGE>
 
respect, individually or in the aggregate, affect or impair the value or use
thereof as it is currently being used by Seller or a Seller Subsidiary in the
ordinary course of the business or render title thereto unmerchantable or
uninsurable; (g) zoning laws and ordinances and similar governmental regulations
(none of which interfere, or would reasonably be expected to interfere, in any
material respect with the operation of the Systems as currently conducted); and
(h) the Liens described on Schedule 1.2.
                           ------------ 

     "Person" means any natural person, Governmental Authority, corporation,
general or limited partnership, joint venture, trust, association, limited
liability company, or unincorporated entity of any kind.

     "Securities Act" means the Securities Act of 1933.

     "Social Contract" means the Social Contract approved by the FCC on November
30, 1995 and effective as of January 1, 1996 and entered into among the FCC,
Seller, Time Warner Entertainment Company, L.P., Time Warner Entertainment-
Advance/Newhouse Partnership, and subsidiaries, divisions and affiliates
thereof.

     "Subscriber" means each Individual Subscriber and Subscriber Equivalent.

     "Subscriber Equivalent" means, as to each System, an equivalent to an
Individual Subscriber, the number of Subscriber Equivalents served by a System
being equal, as of any date, to the quotient of (a) the aggregate revenues
earned by such System for Tier Cable provided by that System during the last
month prior to such date from billings to residential multiple dwelling units,
other active subscribers that are billed for such service on a bulk basis, and
single family households that pay less than the System's regular monthly
subscription rate for Tier Cable, divided by (b) that System's regular monthly
subscription rate for Tier Cable.  For purposes of the foregoing, aggregate
revenues earned for Tier Cable shall not include (i) passed-through franchise
fees and sales taxes, (ii) nonrecurring charges or credits and (iii) billings to
any bulk account or discounted family household (A) that has not been a
subscriber of that System for at least one month and paid at least one month's
payment in full, together with any applicable installation fee unless waived in
the ordinary course of business, (B) that is 60 days or more in arrears in
payment for services, as measured from the first day of the month for which
service was received; (C) that is pending disconnection for any reason; (D)
that, consistent with Seller's or the applicable Seller Subsidiary's standard
policy on disconnection should have been given notice of disconnection; or (E)
that become a subscriber other than pursuant to customary marketing promotions
(other than promotions based on offers of free cable television services)
conducted in the ordinary course of business consistent with past practices and
as if neither Seller nor the Seller Subsidiaries intended to sell the Systems
hereunder.

     "Subscriber Total" means, at any date, the sum of all Subscribers on such
date.

     "Subscriber Valuation" means $2,580.

                                       6

<PAGE>
 
     "Taxes" means all levies and assessments imposed by any Governmental
Authority, including income, sales, use, ad valorem, value added, franchise,
severance, net or gross proceeds, withholding, payroll, employment, excise or
property taxes, and interest, penalties and other government charges with
respect thereto.

     "Tier Cable" means the cable television services described on Schedule 5.8
                                                                   ------------
with respect to the Tennessee Systems as "Basic Reception Service" and "Cable
Programming Tier I" collectively, and with respect to the Louisiana and
Mississippi Systems as "Broadcast Basic" and "Standard Cable Service"
collectively.

     "To Seller's knowledge" means to the actual knowledge of Bonnie J. Blecha
or David E. O'Hayre, or their respective successors, or the system or general
managers of the Systems.

      Section 1.3  Terms Defined in Other Sections. The following terms, have
                   -------------------------------
the meanings given in the Sections indicated:

   Term                                                      Section
   ----                                                      -------
   "Agreement"                                               Preamble
   "Assets"                                                  2.1
   "Assumed Obligations and Liabilities"                     2.3
   "Beneficial Arrangement"                                  6.18(c)
   "Breaching Party"                                         9.1(b)
   "Buyer"                                                   Preamble
   "Cash Consideration"                                      2.4
   "Closing"                                                 8.1
   "Closing Subscriber Total"                                2.6
   "Consent"                                                 5.3
   "CPST Subscribers"                                        6.9(b)
   "CSG Assignments"                                         6.16
   "Current Items Amount"                                    2.5(a)
   "Deductible"                                              11.4(a)
   "Disclosing Party"                                        6.10
   "Eligible Accounts Receivable"                            2.5(a)(i)
   "Employee Obligations"                                    6.4(a)
   "Escrow Agent"                                            3.4
   "Escrow Agreement                                         3.4
   "Escrow Deposit"                                          3.4
   "Excluded Assets"                                         2.2
   "Final Adjustment Certificate"                            2.5(b)
   "Financial Statements"                                    5.10
   "Franchises"                                              2.1(c)
   "Guarantor"                                               6.17
   "Hired Employees"                                         6.4(b)
   "Indemnitee"                                              11.3(a)
   "Indemnitor"                                              11.3(a)

                                       7

<PAGE>
 
   "Initial Adjustment Certificate"                          2.5(b)
   "Leased Real Property"                                    2.1(b)
   "Licenses"                                                2.1(d)
   "LLC Terms Sheet"                                         6.16
   "Lost Subscribers"                                        12.12(b)(ii)
   "Management Agreement"                                    6.18(b)
   "Multiemployer Plan"                                      5.12(b)
   "Notice"                                                  11.3(a)
   "Nonconsent Franchise"                                    6.18(a)
   "Nonconsent Franchise Cash Flow"                          6.18(c)
   "Operating Agreement"                                     6.16
   "Outside Closing Date"                                    8.1
   "Owned Real Property"                                     2.1(b)
   "Program Management Agreement"                            6.16
   "Purchase Price"                                          2.4
   "Proprietary Rights"                                      3.1(a)
   "Qualified Auditor"                                       2.5(b)
   "Real Property"                                           2.1(b)
   "Recipient Party"                                         6.10
   "Road Runner Product"                                     6.16
   "Seller"                                                  Preamble
   "Seller Subsidiaries"                                     Recital A
   "Social Contract Refund"                                  6.9(b)
   "Social Contract Refund Credit"                           6.9(b)(i)
   "Subscriber Adjustment Amount"                            2.6
   "Survival Period"                                         11.5
   "System Contracts"                                        2.1(e)
   "Systems"                                                 Recital A
   "Tangible Personal Property"                              2.1(a)
   "Transitional Consulting Services"                        3.1(b)
   "WARN Act"                                                6.5


                                   Article 2.
                               Purchase and Sale
                               -----------------

     Section 2.1  Covenant of Purchase and Sale; Assets. Subject to the terms
                  -------------------------------------
and conditions set forth in this Agreement, at Closing Seller shall contribute,
convey, assign and transfer as a contribution to capital, and Buyer shall
acquire from Seller in consideration of the LLC Interest, free and clear of all
Liens (except for Permitted Liens, but subject to such Permitted Liens being
released at Closing and any reductions in Purchase Price provided for in the
definition of Permitted Liens having been made at Closing) an undivided portion,
having a fair market value equal to the Equity Value, of all right, title and
interest of Seller in all of the assets and properties, real and personal,
tangible and intangible, used or held for use by Seller in its operation of the
Systems, and further Seller shall, and shall cause the Seller Subsidiaries to,
convey, assign, and transfer to Buyer, and Buyer shall acquire from Seller and
the Seller Subsidiaries in

                                       8

<PAGE>
 
consideration of the Cash Consideration, free and clear of all Liens (except for
Permitted Liens, but subject to such Permitted Liens as are to be released at
Closing being released at Closing and any reductions in Purchase Price provided
for in the definition of Permitted Liens having been made at Closing) all
remaining right, title and interest of Seller and all of the right, title and
interest of the Seller Subsidiaries in all of the assets and properties, real
and personal, tangible and intangible, used or held for use by Seller or any
Seller Subsidiary in its operation of the Systems, in each case including the
following (all of the foregoing together, the "Assets"):

     (a)  Tangible Personal Property.  All tangible personal property, including
          --------------------------                                            
towers, tower equipment, antennae, aboveground and underground cable,
distribution systems, headend amplifiers, line amplifiers, microwave equipment,
converters, testing equipment, all antennae, earth satellite receive stations
and related equipment, motor vehicles, office equipment, furniture, fixtures,
supplies, inventory, and other physical assets, including the items described on
Schedule 2.1(a) (the "Tangible Personal Property").
- ---------------
     (b)  Real Property.  All interests in real property, including all
          -------------
improvements thereon, owned by Seller or the Seller Subsidiaries ("Owned Real
Property") or leased by Seller or the Seller Subsidiaries ("Leased Real
Property"), all of which are described on Schedule 2.1(b) (the "Real Property").
                                          ---------------

     (c)  Franchises.  All franchises and similar authorizations or permits
          ----------
issued by any Governmental Authority or other Person that are necessary or
required to operate a cable television system and provide cable television
services in the geographic areas served by the Systems, all of which are listed
on Schedule 2.1(c) (the "Franchises").
   ---------------

     (d)  Licenses.  The intangible CATV channel distribution rights, cable
          --------                                                         
television relay service (CARS), business radio, intangible domestic satellite
receive only (TVRO) registrations, and other licenses, authorizations,
registrations or permits issued by the FCC or any other Governmental Authority,
all of which are described on Schedule 2.1(d) (the "Licenses").
                              ---------------

     (e)  System Contracts.  The leases, private easements or rights of access,
          ----------------                                                     
contractual rights to easements, servitude agreements, pole attachment
agreements or joint line agreements, underground conduit agreements, crossing
agreements, bulk and commercial service agreements, retransmission consent
agreements and other Contracts, all of which are either (i) described on
Schedule 2.1(e); (ii) (1) Contracts with Individual Subscribers for cable
- ---------------
service in the ordinary course of business which may be canceled without penalty
by Seller or a Seller Subsidiary; (2) other Contracts terminable at will by
Seller or a Seller Subsidiary without penalty; and (3) Contracts that do not
contemplate payments by or to Seller or a Seller Subsidiary exceeding $25,000
individually or $200,000 for all such Contracts in the aggregate and do not
involve any material non-monetary obligation; or (iii) are entered

                                       9

<PAGE>
 
into after the date hereof in accordance with the provisions of Section 6.2
hereof and are to be assumed by Buyer hereunder (the "System Contracts").

          (f)  Accounts Receivable.  All subscriber, trade and other accounts
               -------------------
receivable.

          (g)  Books and Records. All engineering records, files, data,
               -----------------
drawings, blueprints, schematics, reports, lists, plans and processes, and all
files of correspondence, lists, records, and reports concerning subscribers and
prospective subscribers of the Systems, signal and program carriage, and
dealings with Governmental Authorities, including all reports filed by or on
behalf of Seller or a Seller Subsidiary with the FCC with respect to the Systems
and statements of account filed by or on behalf of Seller or a Seller Subsidiary
with the U.S. Copyright Office with respect to the Systems.

     Section 2.2  Excluded Assets. Notwithstanding the provisions of Section
                  ---------------
2.1, the Assets shall not include the following, which shall be retained by
Seller or a Seller Subsidiary (the "Excluded Assets"): (a) cable programming
Contracts; (b) insurance policies and rights and claims thereunder; (c) bonds,
letters of credit, surety instruments, and other similar items; (d) cash and
cash equivalents; (e) any agreement, right, asset or property owned or leased by
Seller or a Seller Subsidiary that is not used or held for use in the Systems;
(f) all subscriber deposits and advance payments held by Seller or a Seller
Subsidiary as of the Adjustment Time in connection with the operation of the
Systems; (g) all claims, rights, and interest in and to any refunds of taxes or
fees of any nature, or other claims against third parties, relating to the
operation of the Systems prior to the Adjustment Time; (h) the account books of
original entry, general ledgers and financial records used in connection with
the Systems (provided that Buyer shall have access thereto after the Closing in
accordance with the provisions of Section 6.15 hereof); (i) subject to the
provisions of Section 3.1(a), Seller or any Seller Subsidiary's trademarks,
trade names, service marks, service names, logos, and similar proprietary
rights; (j) any contract, agreement or other commitment of Seller or a Seller
Subsidiary that is not either Leased Property, a License, a Franchise or a
System Contract; (k) any Benefit Arrangement or Employee Benefit Plan; and (l)
any other items described on Schedule 2.2.
                             ------------ 

     Section 2.3  Assumed Obligations and Liabilities.  At Closing, Buyer shall
                  -----------------------------------
assume, pay, discharge, and perform the following (the "Assumed Obligations and
Liabilities"):  (a) those obligations and liabilities attributable to periods
after the Adjustment Time and that arise out of events occurring after the
Adjustment Time under or with respect to the Franchises, Licenses or System
Contracts; (b) other obligations and liabilities of Seller or a Seller
Subsidiary to the extent that there shall be an adjustment in favor of Buyer
with respect thereto pursuant to Section 2.5; (c) all obligations and
liabilities relating to, arising out of or attributable to Buyer's ownership of
the Assets or operation of the Systems after the Adjustment Time; and (d) if the
FCC has concurred with Buyer's assumption of the Social Contract, all
obligations and liabilities attributable to periods after the Adjustment Time
and that arise out of acts,

                                       10

<PAGE>
 
events and circumstances occurring after the Adjustment Time under or with
respect to the Social Contract insofar as it applies to the Systems and only to
the extent applicable to the Systems, including any rate refund liability to
subscribers of the Systems attributable to Buyer's failure to fully and timely
perform the infrastructure upgrade requirements applicable to the Systems and
contained in the Social Contract, regardless of whether such rate refund
liability relates to periods before or after the Adjustment Time. All
obligations and liabilities arising out of or relating to or attributable to the
Assets or the Systems and all other liabilities of any nature whatsoever of
Seller or a Seller Subsidiary (including any liabilities relating to, arising
out of or attributable to Excluded Assets, and any liabilities relating to,
arising out of or attributable to any environmental conditions or situations,
including any liability under any Environmental Law, existing or occurring on or
before the Adjustment Time) other than the Assumed Obligations and Liabilities
shall remain and be the obligations and liabilities solely of Seller.

     Section 2.4  Purchase Price.  The aggregate consideration for the Assets to
                  --------------
be paid by Buyer pursuant to this Agreement shall consist of (a) $300,000,000.00
(the "Cash Consideration"), adjusted pursuant to Sections 2.5, 2.6, 6.18 and
12.12, which shall be payable at Closing by wire transfer of next day funds to
such account or accounts as may be designated by Seller; (b) the LLC Interest,
adjusted pursuant to Sections 2.6 and 6.18 (the LLC Interest and Cash
Consideration together are herein referred to as the "Purchase Price"); and (c)
the assumption by Buyer of the Assumed Obligations and Liabilities.

     Section 2.5  Current Items Amount.
                  --------------------
   
     (a)  At Closing, the Cash Consideration shall be increased or decreased by
the net amount of the adjustments and prorations effected pursuant to this
Section 2.5 (the "Current Items Amount") and Sections 2.6, 6.18 and 12.12.

          (i)  Eligible Accounts Receivable. Seller shall be entitled to an
               ----------------------------
amount equal to the face amount of all Eligible Accounts Receivable that are
sixty or fewer days past due as of the Adjustment Time. "Eligible Accounts
Receivable" means (A) accounts receivable resulting from the provision of cable
television service prior to the Adjustment Time to Subscribers that are active
subscribers as of the Adjustment Time and (B) accounts receivable representing
amounts owed to Seller or a Seller Subsidiary in connection with commercial
advertising cablecast on the Systems. For purposes of making "past due"
calculations under this section, the monthly billing statements of Seller or a
Seller Subsidiary shall be deemed to be due and payable, with respect to
subsection (A) above, on the first day of the period during which the service to
which such billing statements relate is provided and with respect to subsection
(B) above, on the date of such billing statements.

          (ii) Advance Payments and Deposits. Buyer shall be entitled to an
               -----------------------------
amount equal to the aggregate of (A) all deposits of subscribers of the Systems,
and all interest, if any, required to be paid thereon as of the Adjustment Time,
for

                                       11

<PAGE>
 
converters, decoders, similar items and otherwise, and (B) all payments for
services to be rendered by Buyer to subscribers of the Systems after the
Adjustment Time, or for other services to be rendered by Buyer to other third
parties after the Adjustment Time for cable television commercials, channel
leasing, or other services or rentals, to the extent all obligations of Seller
or the Seller Subsidiaries relating thereto are assumed by Buyer at Closing.

        (iii)  Expenses. As of the Adjustment Time, expenses of a recurring
               --------
nature that are incurred to benefit the Systems and which will result in a
benefit to Buyer after Closing and are incurred in the ordinary course of
business, including those set forth below, shall be prorated, in accordance with
GAAP, so that all such expenses for periods prior to the Adjustment Time shall
be for the account of Seller, and all such expenses for periods after the
Adjustment Time shall be for the account of Buyer:

               (A)  all payments and charges under or with respect to the
Franchises, the Licenses, and the System Contracts;

               (B)  Taxes levied or assessed against any of the Assets or
payable with respect to cable television service and related sales to
subscribers of the Systems;

               (C)  charges for utilities, municipal assessments, rents and
service charges, and other goods or services furnished to the Systems;

               (D)  copyright fees based on signal carriage by the Systems; and

               (E)  all other items of expense relating to the Systems;

provided, however, that Seller and Buyer shall not prorate any items of expense
attributable to any Excluded Assets, all of which shall remain and be solely for
the account of Seller.

          (iv) Capital Expenditures. Seller shall be entitled to an amount equal
               --------------------
to the aggregate capital expenditures actually expended by Seller or a Seller
Subsidiary between December 31, 1997 and the Closing Date with respect to any
upgrades or rebuilds of the cable plant included within the Systems; provided
that such expenditures are either approved by Buyer or requested by Buyer and
approved by Seller, such approvals not to be unreasonably withheld.

           (v) Social Contract Refund Credit. If Buyer has waived the condition
               -----------------------------
precedent set forth in Section 7.1(h)(ii), if applicable, as set forth in
Section 6.9, Buyer shall be entitled to the Social Contract Refund Credit.

     (b)  Current Items Amount and Subscriber Adjustment Amount Calculated.  The
          ----------------------------------------------------------------      
Current Items Amount and Subscriber Adjustment Amount (as defined

                                       12

<PAGE>
 
in Section 2.6) shall be estimated in good faith by Seller, and set forth,
together with a detailed statement of the calculation thereof, in a certificate
(the "Initial Adjustment Certificate"), in form and substance reasonably
satisfactory to Buyer, delivered to Buyer not later than three business days
prior to Closing, together with a copy of any working papers relating to such
Initial Adjustment Certificate and such other supporting documentation as Buyer
may reasonably request. To the extent there is a dispute regarding any
adjustments to the Cash Consideration that would result in Buyer paying less
than the amount claimed by Seller, Buyer shall place such amounts in a separate
escrow account, pursuant to an escrow agreement mutually satisfactory to Buyer
and Seller, and such amounts shall be released to Buyer or Seller, as
appropriate, upon final determination of the adjustments in accordance with the
remainder of this paragraph. The Initial Adjustment Certificate, unless
contested in good faith by Buyer, shall constitute the basis on which the
Current Items Amount paid at Closing and the Subscriber Adjustment Amount is
calculated. On or before 120 days after the Closing Date, Buyer shall deliver to
Seller a final calculation of the adjustments calculated as of the Adjustment
Time, together with such supporting documentation as Seller may reasonably
request, in a certificate (the "Final Adjustment Certificate"), which shall
evidence in reasonable detail the nature and extent of each adjustment. Seller
shall review the Final Adjustment Certificate and shall give written notice to
Buyer of any objections Seller has to the calculations shown in such certificate
within 30 days after Seller's receipt thereof. Buyer and Seller shall endeavor
in good faith to resolve any such objections within 15 days after the receipt by
Buyer of Seller's objections. If any objections or disputes have not been
resolved at the end of such 15-day period, the disputed portion of the Current
Items Amount or Subscriber Adjustment Amount shall be determined within the
following 30 days by a partner in a major accounting firm with substantial cable
television audit experience which is not the auditor of either Buyer or Seller
(a "Qualified Auditor") and the determination of the Qualified Auditor shall be
final and shall be binding upon both parties. If Buyer and Seller cannot agree
with respect to selection of the Qualified Auditor, Buyer and Seller shall each
select an auditor and those two auditors shall select a third auditor whose
determination shall be final and shall be binding upon both parties. Buyer and
Seller shall bear equally the expenses arising in connection with such
determination. Any payment or, subject to Section 2.6, transfer of a portion of
the LLC Interest required as a result of the determination of all disputed
amounts, whether by agreement of the parties or by an auditor's determination,
shall be made by the party responsible therefor to the other party within ten
business days after the final determination is made and shall be treated as the
final Current Items Amount or Subscriber Adjustment Amount for all purposes of
this Agreement.

     Section 2.6  Subscriber Adjustment Amount.  If the average of the
                  ----------------------------
Subscriber Total at the end of each month during the 3-month period ending on
the last day of the last billing cycle ending prior to the Adjustment Time (the
"Closing Subscriber Total") is less than 120,131 then the Equity Value shall be
reduced by an amount equal to the product of (a) the Subscriber Valuation times
(b) the amount, if any, by which 120,131 exceeds the Closing Subscriber Total
(the "Subscriber Adjustment Amount"). The Subscriber Adjustment Amount shall be
estimated as of Closing in the Initial

                                       13

<PAGE>
 
Adjustment Certificate delivered to Buyer in accordance with Section 2.5(b) and
thereafter shall be subject to post-Closing verification under said Section
2.5(b). If the estimated Subscriber Adjustment Amount exceeds $9,500,000, then,
at Closing, the Cash Consideration shall be reduced by the amount of such
excess. If the Subscriber Adjustment Amount as finally determined differs from
the estimated Subscriber Adjustment Amount, then, within ten business days of
the date the final determination is made, Seller or Buyer as appropriate shall
transfer to the other that portion of the LLC Interest as shall be necessary to
reflect the actual Equity Value as adjusted for such difference in the
Subscriber Adjustment Amount. If the Subscriber Adjustment Amount as finally
determined exceeds $9,500,000, the excess amount shall be payable by Seller to
Buyer within ten business days of the date the final determination is made.

     For purposes of Sections 2.6 and 6.18(e), (f) and (g), any adjustments made
to the LLC Interest shall be made based on the LLC Interest having a value of
$9,500,000 and subject to any previous reduction in the LLC Interest pursuant to
Sections 2.6 or 6.18(e), (f) or (g).  For example, to the extent the Equity
Value of the LLC Interest is $9,500,000, and pursuant to Section 6.18(f) a
reduction in the amount of $4,750,000 is required, Seller shall convey one half
of its LLC Interest to Buyer.  On the other hand, for example, to the extent the
Equity Value of the LLC Interest is $9,500,000 and pursuant to Section 6.18(f) a
reduction in the amount of $11,500,000 is required, Seller shall convey its
entire LLC Interest to Buyer and pay Buyer $2,000,000 in cash.  Furthermore, for
example, if Seller has already conveyed pursuant to an adjustment under Section
2.6, $1,900,000 (or 20%) of its LLC Interest to Buyer, and pursuant to Section
6.18(f) a reduction in the amount of $3,800,000 is required, Seller shall convey
one half of its remaining LLC Interest to Buyer.


                                   Article 3.
                                Related Matters
                                ---------------

     Section 3.1  Use of Names and Logos; Transitional Consulting Services;
                  ---------------------------------------------------------

             (a)  For a period up to 180 days after Closing, Buyer shall be
entitled to use the trademarks, trade names, service marks, service names,
logos, and similar proprietary rights of Seller or a Seller Subsidiary to the
extent incorporated in or on the Assets (collectively, the "Proprietary
Rights"); provided that (i) Buyer acknowledges that the Proprietary Rights
belong to Seller or a Seller Subsidiary, and that Buyer acquires no rights
therein pursuant to the 180-day phase-out period; (ii) all such Assets shall be
used in a manner consistent with the use made by Seller or a Seller Subsidiary
of such Assets prior to Closing; and (iii) Buyer shall exercise commercially
reasonable efforts to remove all Proprietary Rights from the Assets as soon as
practicable following Closing. Except as set forth in this Section 3.1(a), or
unless granted by prior written approval from Seller, Buyer shall not, at any
time prior to or following the Closing, use in any fashion the "Time", "Warner",
"Time Warner" or "TWI" trademarks or trade names.

                                       14

<PAGE>
 
             (b)  For a period of up to 180 days after Closing, upon Buyer's
written request delivered to Seller no later than 30 days prior to the first
anticipated Closing Date, Seller shall, to the extent permitted under applicable
Contracts, provide to Buyer billing and general ledger accounting services as
requested by Buyer to maintain the smooth and orderly functioning of the Systems
during such period (the "Transitional Consulting Services"), and Buyer shall pay
Seller (a) an amount equal to Seller's actual costs incurred in performing
billing services for Buyer hereunder, and (b) the sum of $5,000 per month for
the Systems located in Tennessee and $5,000 per month for the Systems located in
Louisiana and Mississippi as transitional consulting fees for the duration of
the Transitional Consulting Services. Buyer shall have the right to terminate
all or any portion of the Transitional Consulting Services upon 30 days' prior
notice to Seller.

     Section 3.2  Bulk Sales. Buyer and Seller each waives compliance by the
                  ----------
other with bulk sales Legal Requirements applicable to the transactions
contemplated hereby.

     Section 3.3  Transfer Taxes. Buyer and Seller shall each pay one half of
                  --------------
all sales, use, transfer, and similar Taxes arising from or payable by reason of
the transactions contemplated by this Agreement.

     Section 3.4  Escrow Deposit.  No later than December 5, 1997, Buyer shall
                  --------------
deposit the sum of $15,000,000 with The Chase Manhattan Bank, N.A. ("Escrow
Agent") as an escrow deposit (the "Escrow Deposit") pursuant to the terms of the
Escrow Agreement entered into as of the date hereof by and between Buyer, Seller
and Escrow Agent (the "Escrow Agreement").  The Escrow Deposit and all interest
or other income accrued thereon shall be paid to Seller at Closing, for credit
toward payment of the Purchase Price, by wire transfer in accordance with joint
instructions given by Buyer and Seller to Escrow Agent and shall otherwise be
released to Seller or returned to Buyer in accordance with the terms hereof and
of the Escrow Agreement.
                       
                                   Article 4.
                     Buyer's Representations and Warranties
                     --------------------------------------

     Buyer represents and warrants to Seller as follows:

     Section 4.1  Organization of Buyer. Buyer is a limited liability company
                  ---------------------
duly formed, validly existing, and in good standing under the laws of the State
of Delaware, and has all requisite limited liability company power and authority
to own and lease the properties and assets it currently owns and leases and to
conduct its activities as such activities are currently conducted. Buyer is, or
will prior to Closing be, duly qualified to do business as a foreign limited
liability company and is, or will prior to the Closing be, in good standing in
all jurisdictions in which the ownership or leasing of the Assets or the nature
of its activities in connection with the Systems would make such qualification
necessary.

                                       15

<PAGE>
 
     Section 4.2  Authority.  Buyer has all requisite limited liability company
                  ---------
power and authority to execute, deliver, and perform this Agreement and
consummate the transactions contemplated hereby.  The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby, including the issuance of the LLC Interest to Seller by
Buyer, have been duly and validly authorized by all necessary limited liability
company action on the part of Buyer.  This Agreement has been duly and validly
executed and delivered by Buyer, and is the valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.

     Section 4.3  No Conflict; Required Consents. Except as described in
                  ------------------------------
Schedule 4.3 or as will not have a material adverse effect on the ability of
- ------------
Buyer to perform its obligations hereunder, and subject to compliance with the
HSR Act, the execution, delivery, and performance by Buyer of this Agreement,
including the issuance of the LLC Interest to Seller in accordance with the
terms of this Agreement, do not and will not: (a) conflict with or violate any
provision of the Certificate of Formation of Buyer or the Operating Agreement;
(b) violate any provision of any Legal Requirement; (c) conflict with, violate,
result in a breach of, or constitute a default under any Contract to which Buyer
is a party or by which Buyer or the assets or properties owned or leased by it
are bound or affected, or (d) require any consent, approval, or authorization
of, or filing of any certificate, notice, application, report, or other document
with, any Governmental Authority or other Person.

     Section 4.4  Litigation.  Except for any Litigation or Judgment as may
                  ----------
affect the cable television industry (national or regional) generally, there is
no Litigation or Judgment pending, or to the best of Buyer's knowledge,
threatened, in any court or before any Governmental Authority or any arbitrator,
by or against or affecting or relating to Buyer or any of its Affiliates and, to
Buyer's knowledge, no facts or circumstances exist which reasonably could be
expected to give rise to any such Litigation or Judgment, which, if adversely
determined, would restrain or materially hinder or delay the consummation of the
transactions contemplated by this Agreement or cause any of such transactions to
be rescinded.

     Section 4.5  Finders and Brokers.  Buyer has not employed any financial
                  -------------------                                         
advisor, broker or finder or incurred any liability for any financial advisory,
brokerage, finder's or similar fee or commission in connection with the
transactions contemplated by this Agreement for which Seller will in any way
have any liability.

     Section 4.6  Full Access.  Buyer's representatives have received complete
                  -----------                                                   
access to Seller and the Seller Subsidiaries' books and records and to the
facilities and the Assets of the Systems to the extent requested by Buyer, and
Seller and the Seller Subsidiaries have cooperated with Buyer to the end that
Buyer has been able to conduct its own inspection and investigation of the
Systems and the Assets to Buyer's satisfaction and has independently
investigated, analyzed and appraised the condition, value, prospects and
profitability thereof and such other pre-signing due diligence in

                                       16

<PAGE>
 
connection with the transactions contemplated by this Agreement in accordance
with the normal practice of Buyer; provided that notwithstanding any such
access, inspection or investigation, Buyer shall be entitled to rely on all
representations, warranties, covenants and agreements of Seller set forth herein
and shall not be deemed by virtue of such access, inspection or investigation,
to have waived any of its rights hereunder.

     Section 4.7 Offering.  Subject to the accuracy of Seller's representations
                 --------
in Sections 5.19 and 5.20 hereof, the issuance of the LLC Interest to be issued
in conformity with the terms of this Agreement constitutes a transaction exempt
from the registration requirements of Section 5 of the Securities Act and
similar requirements of any state securities or "blue sky" Legal Requirements.
                       
                                   Article 5.
                    Seller's Representations and Warranties
                    ---------------------------------------

     Seller represents and warrants to Buyer as follows:

     Section 5.1  Organization and Qualification of Seller and Seller
                  ---------------------------------------------------
Subsidiaries. Seller is a corporation duly organized, validly existing, and in
- ------------
good standing under the laws of the State of Delaware, Picayune Cablevision,
Inc. is a corporation duly organized, validly existing and in good standing
under the laws of the State of Mississippi, and Cablevision Industries of
Louisiana Partnership is a general partnership duly organized and validly
existing under the laws of the State of Louisiana. Each of Seller and each
Seller Subsidiary has all requisite corporate or partnership power and authority
to own and lease the properties and assets it currently owns and leases and to
conduct its activities as such activities are currently conducted. Seller and
Picayune Cablevision, Inc. are duly qualified to do business as a foreign
corporations and are in good standing in all jurisdictions in which the
ownership or leasing of the Assets or the nature of their activities in
connection with the Systems makes such qualification necessary.

     Section 5.2  Authority.  Seller has all requisite corporate power and
                  ---------                                                 
authority to execute, deliver, and perform this Agreement and each of Seller and
each Seller Subsidiary has all requisite corporate or partnership power and
authority to consummate the transactions contemplated hereby.  The execution,
delivery, and performance of this Agreement by Seller and the consummation of
the transactions contemplated hereby on the part of Seller and each Seller
Subsidiary have been duly and validly authorized by all necessary action on the
part of Seller and each Seller Subsidiary.  This Agreement has been duly and
validly executed and delivered by Seller, and constitutes the legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally or the availability of equitable
remedies.

    Section 5.3  No Conflict; Required Consents. Except as described on Schedule
                 ------------------------------                         --------
5.3 and subject to compliance with the HSR Act, the execution, delivery, and
- ---

                                       17

<PAGE>
 
performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby by Seller and the Seller Subsidiaries do not and will not:
(a) conflict with or violate any provision of the Articles of Incorporation or
Bylaws or Partnership Agreement, as the case may be, of Seller or any Seller
Subsidiary; (b) violate any provision of any Legal Requirement; (c) conflict
with, violate, result in a material breach of, or constitute a default under any
Contract to which Seller or any Seller Subsidiary is a party or by which Seller
or any Seller Subsidiary or the assets or properties owned or leased by it are
bound or affected or create any Lien upon or relating to the Assets or the
Systems; or (d) require any consent, approval or authorization of, or filing of
any certificate, notice, application, report, or other document with
(individually, any of the foregoing, a "Consent" and collectively "Consents"),
any Governmental Authority or other Person, except for such consents, approvals,
authorizations or filings the absence of which would not prevent, materially
delay or make unduly burdensome the consummation of the transactions
contemplated hereby.  Except for the Consents described in Schedule 5.3 and
                                                           ------------    
subject to compliance with the HSR Act, no Consent from any Governmental
Authority or other Person is required (e) to permit Seller or any Seller
Subsidiary to assign or transfer the Assets to Buyer (without any default or
violation under or in respect of such Assets and without causing any
acceleration or termination of any of such Assets); or (f) to permit Buyer to
conduct the business or operations of the Systems in the same manner as such
business or operations are presently conducted.

     Section 5.4  Title to and Physical Condition of Assets. Except for
                  -----------------------------------------
Permitted Liens and except as set forth on Schedules 2.1(b) and 5.4, Seller or
                                           ------------------------
the Seller Subsidiaries have good title to (or in the case of Assets that are
leased, valid leasehold interests in) all of the Tangible Personal Property and
good and marketable title to all of the Real Property, in each case free and
clear of all Liens. The amount of the Systems' inventory as of Closing will be
sufficient to permit the continued maintenance and operation of the Systems for
at least a 30-day period. EXCEPT AS SET FORTH IN THIS AGREEMENT, SELLER MAKES NO
WARRANTIES, AND DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PHYSICAL CONDITION OF THE ASSETS, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND WILL CONVEY OR CAUSE
TO BE CONVEYED THE ASSETS TO BUYER AT CLOSING "AS IS"; PROVIDED THAT AT CLOSING
THE ASSETS SHALL BE IN THE SAME OPERATING CONDITION AND REPAIR AS OF THE DATE OF
EXECUTION OF THIS AGREEMENT, ORDINARY WEAR AND TEAR EXCEPTED.

     Section 5.5  Franchises, Licenses, and System Contracts. Except as
                  ------------------------------------------
described on Schedule 2.1(e), Seller has delivered to Buyer true and complete
             ---------------
copies of each of the Franchises, Licenses, and System Contracts and all
amendments, assignments and consents thereto. Except as set forth on Schedules
                                                                     ---------
2.1(b), 2.1(c), 2.1(d) and 2.1(e), and except for Excluded Assets and (a)
- ------  ------  ------     ------
Contracts with Individual Subscribers for cable service in the ordinary course
of business which may be canceled without penalty by Seller or a Seller
Subsidiary; (b) other Contracts terminable at will by Seller or a Seller
Subsidiary, without penalty; and (c) Contracts that do not contemplate payments
by or

                                       18

<PAGE>
 
to Seller or a Seller Subsidiary exceeding $25,000 individually or $200,000 for
all such Contracts in the aggregate and do not involve any material non-monetary
obligation, neither Seller nor any Seller Subsidiary is bound or affected by any
Contract that relates to any System. All Franchises, Licenses and System
Contracts (to the extent required to be listed) are listed on Schedule 2.1(b),
                                                              ---------------
(c), (d) and (e) and notwithstanding anything else contained herein to the
- ----------------
contrary. Schedule 2.1(e) lists all retransmission consents and leased access
          ---------------
agreements which are not Excluded Assets. Each of the Franchises, Licenses and
System Contracts set forth on the Schedules hereto is in full force and effect,
is validly held by Seller or another Person, will at Closing be held by Seller
or a Seller Subsidiary, and is valid, binding and enforceable in accordance with
its terms. Except as described on Schedule 5.5, there has not occurred (and
                                  ------------
there is not now existing) any material default by Seller or any Seller
Subsidiary nor, to Seller's knowledge, by any other Person under any of the
Franchises, Licenses or System Contracts. A request for renewal has been timely
filed pursuant to Section 626(a) of the Cable Act with the proper Governmental
Authority with respect to any Franchise expiring within 30 months after the date
of this Agreement. Other than Excluded Assets, the System Contracts comprise all
necessary Contracts to enable Seller or a Seller Subsidiary to carry on lawfully
and properly the business and operations of each of the Systems as presently
conducted. Except as set forth in Schedule 5.5: (d) Seller or a Seller
                                  ------------
Subsidiary has fulfilled or complied in all material respects with all promises
or commitments on the part of Seller or a Seller Subsidiary contained in any
Franchise, License or System Contract with respect to any System, including any
relating to capital improvements required under the Franchises or otherwise; and
(e) other than as required under the Social Contract, no written promises or
commitments which are to be fulfilled after the Closing Date have been made with
respect to capital improvements relating to the Systems. To Seller's knowledge,
with respect to the Systems, Seller and the Seller Subsidiaries are in
compliance in all material respects with the basic service tier relief and
equipment rates provisions of the Social Contract and, with respect to the
Systems, Seller and the Seller Subsidiaries are in compliance in all material
respects with the resolution of CPST rate cases, migrated product tiers and
customer refund provisions and infrastructure upgrade requirements of the Social
Contract, to the extent such provisions and requirements are applicable on, or
required to be performed on or before, the date hereof.

     Section 5.6  Litigation.  Except as set forth on Schedule 5.6, and except
                  ----------                          ------------
for any Litigation or Judgment as may affect the cable television industry
(national or regional) generally to the extent neither Seller nor any Seller
Subsidiary is named as a party therein or thereto, there is no Litigation or
Judgment pending or, to Seller's knowledge, threatened, in any court or before
any Governmental Authority or any arbitrators, by or against or affecting or
relating to Seller or any of its Affiliates, and, to Seller's knowledge, no
facts or circumstances exist which could reasonably be expected to give rise to
any such Litigation or Judgment, which, if adversely determined could adversely
affect the business, financial condition or operations of the Systems or the
ability of Seller or the Seller Subsidiaries to perform their obligations under
or arising out of this Agreement, or which seeks or could result in the
modification, revocation, termination, suspension, or other limitation of any of
the Franchises, Licenses or System Contracts

                                       19

<PAGE>
 
set forth on the Schedules hereto. Except as set forth on Schedule 5.6, neither
                                                          ------------
Seller nor any Seller Subsidiary is in default or violation, and, to Seller's
knowledge, no event or condition exists, which with notice or lapse of time or
both, could become or result in a default under or violation of, any Judgment
issued against Seller or any Seller Subsidiary in connection with the Systems.

    Section 5.7  Tax Returns; Other Reports.  Seller has timely filed or caused
                 --------------------------
to be filed all federal, state, local, and foreign tax returns and other tax
reports relating to the Systems that are required to be filed on or prior to the
date hereof, and has timely paid or caused to be paid all Taxes including those
shown thereon to be due and payable, the failure to file or pay which could
affect or result in the imposition of a Lien upon any Asset. Other than the
sales tax audits or notices thereof with respect to Seller or the Seller
Subsidiaries' operation of the Systems which are listed on Schedule 5.7, 
                                                           ------------
neither Seller nor any Seller Subsidiary has received any notice of
deficiency or assessment of proposed deficiency or assessment from any taxing
Governmental Authority pertaining to the Systems.

    Section 5.8  System Information.  Schedule 5.8 sets forth a materially true
                 ------------------   ------------
and accurate description of the following information:

            (a)  the approximate number of miles of plant included in the Assets
as of September 30, 1997;

            (b)  the number of basic and tier subscribers and pay units (as
defined in Schedule 5.8) served by each of the Systems as of September 30, 1997;
           ------------

            (c)  a description of basic and optional or tier services available
from the Systems and the rates charged by Seller or a Seller Subsidiary for
each;

            (d)  the stations and signals carried by the Systems and the channel
position of each such signal and station;

            (e)  the MHz capacity of the Systems; and the channel capacity of
the Systems; and

            (f)  the franchising Governmental Authorities that have filed FCC
Forms 328 with the FCC, pursuant to Section 623(a)(3) of the Communications Act,
to regulate basic cable rates of the Systems, and any pending complaints (Form
329) on file with the FCC relating to the Systems.

Notwithstanding any other provision of this Agreement, the representations and
warranties in Section 5.8 shall survive Closing for a period of sixty days.

     Section 5.9 Compliance with Legal Requirements.
                 ----------------------------------  
 
            (a)  Except as described on Schedule 5.9, Seller and each Seller
                                        ------------
Subsidiary has complied and is in compliance in all material respects with all
Legal

                                       20

<PAGE>
 
Requirements applicable to the Systems, including the Communications Act, the
Cable Act, the Copyright Act, the Occupational Safety and Health Act, all
Environmental Laws, and rules and regulations promulgated thereunder. Except as
described on Schedule 5.9, neither Seller nor any Seller Subsidiary has received
             ------------
any notice from the FCC of any violation of its rules and regulations insofar as
they apply to a System.

            (b)  Seller and the Seller Subsidiaries have used reasonable best
efforts to establish rates charged to customers that would be allowable under
rules and regulations promulgated by the FCC under the Cable Act, and any
authoritative interpretation thereof, if such rates were subject to regulation
by any Governmental Authority, including the local franchising authority and/or
the FCC, and, to Seller's knowledge, such rates as computed under the FCC's
rules and regulations are permitted rates except as set forth in Schedule 5.9.
                                                                 ------------
Except as set forth in Schedule 5.9, Seller has delivered to Buyer complete and
                       ------------
correct copies of all FCC 393 Forms and FCC 1200 Series Forms provided during
the last three years to franchising Governmental Authorities or the FCC with
respect to the Systems and copies of all material correspondence with any
Governmental Authority relating to rates charged to customers with respect to
the Systems, including, without limitation, copies of any pending complaints and
responses filed with the FCC with respect to any rates charged to customers of
the Systems.

            (c)  Seller or a Seller Subsidiary has deposited with the U.S.
Copyright Office all statements of account and other documents and instruments,
and paid all royalties, supplemental royalties, fees and other sums to the U.S.
Copyright Office under the Copyright Act, with respect to the business and
operations of the Systems as are required to obtain, hold and maintain the
compulsory license for cable television Systems prescribed in Section 111 of the
Copyright Act. To Seller's knowledge, there is no inquiry, claim, action or
demand pending before the U.S. Copyright Office or from any other party which
questions the copyright filings or payments made by Seller or a Seller
Subsidiary with respect to the Systems.

     Section 5.10 Financial and Operational Information. Seller has delivered to
                  -------------------------------------
Buyer an unaudited trial balance for the Systems as of June 30, 1997 and
unaudited statements of profit and loss of the Systems for the six-month period
then ended, and an unaudited trial balance for each of the Systems as of
December 31, 1996 and unaudited statements of profit and loss of each of the
Systems for the twelve-month period then ended (collectively, the "Financial
Statements"). Except as set forth on Schedule 5.10, and except for the absence
                                     -------------
of a statement of cash flows and footnotes and subject to normal recurring year-
end adjustments, which are not expected to be material in amount, the Financial
Statements were prepared in accordance with GAAP and present fairly the results
of operations of each of the Systems for the periods indicated. Except for (a)
liabilities disclosed or provided for (or otherwise described) in the Financial
Statements, and (b) liabilities incurred in the ordinary course of business
since the date of the most recent Financial Statements, neither Seller nor any
Seller Subsidiary has on the date hereof any material liabilities or obligations
relating to the Assets or the Systems which

                                       21

<PAGE>
 
would have been required to be disclosed on the Financial Statements pursuant to
GAAP or in the notes to such Financial Statements.

    Section 5.11 No Adverse Change. Since June 30, 1997, (a) there has been no
                 -----------------
material adverse change in the Assets or the business, financial condition or
operations of the Systems; (b) the Assets and the financial condition and
operations of the Systems have not been materially and adversely affected as a
result of any fire, explosion, accident, casualty, labor trouble, flood,
drought, riot, storm, condemnation, or act of God or public force or otherwise;
and (c) none of Seller or any Seller Subsidiary has made any sale, assignment,
lease or other transfer of any of the Assets other than in the ordinary course
of business in an aggregate amount not exceeding $100,000.

    Section 5.12 Employees.
                 ---------
   
       (a)  Schedule 5.12 sets forth a true and complete list of all individuals
            -------------
employed by Seller or a Seller Subsidiary who primarily render services to the
Systems. Except as described on Schedule 5.12, neither Seller nor any Seller
                                -------------
Subsidiary is a party to any written or oral employment Contract with any such
individual, other than a Contract which is terminable at will by either party.

       (b)  Neither Seller nor any Seller Subsidiary is a party or subject to
any labor union or collective bargaining agreement in connection with the
Systems, and neither Seller nor any Seller Subsidiary is a party to any labor or
employment dispute involving any of its employees who render services in
connection with the Systems. Neither Seller, any Seller Subsidiary nor any
entity related to Seller or any Seller Subsidiary (under Sections 414(b), (c),
(m) or (o) of the Code) contribute to, are required to contribute, or ever have
been required to contribute to, a "Multiemployer Plan", as that term is defined
in Section 3(37) of ERISA on behalf of any employee of the Systems.

     (c)  Neither Seller nor any Seller Subsidiary accrues sick leave for its
employees as a liability for accounting purposes, nor do Seller or any Seller
Subsidiary have any obligation to pay unused sick leave to employees of Seller
or any Seller Subsidiary upon such employees' termination of employment.

    Section 5.13  Employee Benefits.  Each Employee Benefit Plan sponsored or
                  -----------------
maintained by Seller, any Seller Subsidiary or any entity related to Seller
(under the terms of Sections 414(b), (c), (m) or (o) of the Code) is in material
compliance with the provisions of ERISA; no reportable event (as defined in
Section 4043(c)(1), (2), (3), (5), (6), (7), (10) or (13) of ERISA) has occurred
and is continuing with respect to any such Employee Benefit Plan; and, no non-
exempt prohibited transaction (as defined in Section 406 of ERISA) has occurred
with respect to any such Employee Benefit Plan that would result in any
liability to Seller or any Seller Subsidiary.

                                       22

<PAGE>
 
     Section 5.14  Environmental.
                   -------------   

          (a)  To Seller's knowledge, none of the Real Property is the subject
of any "Superfund" evaluation or investigation, or any other investigation or
proceeding of any Governmental Authority evaluating whether any remedial action
is necessary to respond to any release of Hazardous Substances on or in
connection with the Real Property and neither Seller nor any Seller Subsidiary
has filed any notice under any Environmental Law indicating past or present
treatment, storage or disposal of a hazardous waste or reporting a spill or
release of a Hazardous Substance on or from the Real Property into the
environment.

          (b)  Except as described on Schedule 5.14, to Seller's knowledge, no
                                      -------------
surface impoundments or underground storage tanks are located in or on the
Real Property.

          (c)  None of Seller or the Seller Subsidiaries' operations with
respect to the Systems are subject to any judicial or administrative proceeding
alleging the violation of any Environmental Law. Neither Seller nor any Seller
Subsidiary has received any notice of the presence, use, generation,
manufacture, disposal, release, or threatened release of any Hazardous
Substances on the Real Property which could reasonably be expected to prevent
compliance by Seller, a Seller Subsidiary or the Real Property with, or result
in Losses under, applicable Legal Requirements.

          (d)  Seller has delivered to Buyer true and complete copies of all
"Phase I," "Phase II," or other environmental site assessments conducted or
reports prepared by or which are in the possession of Seller or any Affiliate
thereof relating to the Real Property.

     Section 5.15  Accounts Receivable. Seller and Seller Subsidiaries' accounts
                   -------------------
receivable are actual and bona fide receivables representing obligations for the
total dollar amount thereof shown on the books of Seller or the Seller
Subsidiaries that resulted from the regular course of Seller or the Seller
Subsidiaries' business, and are fully collectible in accordance with their
terms, subject to no offset or reduction of any nature except for a reserve for
uncollectible accounts consistent with the reserve established by Seller or a
Seller Subsidiary in the most recent trial balance delivered to Buyer in
accordance with Section 5.10.

    Section 5.16  Taxpayer Identification Number.  Seller's U.S. Taxpayer
                  ------------------------------
Identification Number is 59-1353813.

    Section 5.17  Competitive Activity.  Except as set forth on Schedule 5.17,
                  --------------------                          -------------
(i) other than the Systems, there are no operating cable television systems in
the areas for which Seller or any Seller Subsidiary holds a Franchise, (ii) no
franchise or other operating authority for a cable television system has been
granted to any party other than Seller or any Seller Subsidiary by the
appropriate Governmental Authority in the areas for which Seller or any Seller
Subsidiary holds a Franchise, and, to the knowledge

                                       23

<PAGE>
 
of Seller, no party is seeking such a franchise or other operating authority,
and (iii) there are no multi-point distribution systems, multi-channel multi-
point distribution systems, wireless cable systems, or to the knowledge of
Seller, satellite master antenna systems operating in the areas for which Seller
or any Seller Subsidiary holds a Franchise, and, to the knowledge of Seller, no
party intends or is seeking to construct or operate any of the foregoing.

     Section 5.18 No Other Commitment. No material part of any of the Systems or
                  -------------------
the Assets is directly or indirectly subject in any manner to any oral or
written commitment or any arrangement for the sale, transfer, assignment or
disposition thereof, in whole or in part, except pursuant to this Agreement.

     Section 5.19 Experience. Seller has substantial experience in evaluating
                  ----------
and investing in private placement transactions of securities of companies
similar to Buyer so that it is capable of evaluating the merits and the risks of
its investment in Buyer and has the capacity to protect its own interests.

     Section 5.20 Investment.  Seller is an "accredited investor" within the
                  ----------                                                  
meaning of Rule 501 promulgated under the Securities Act.  Except for transfers
to Affiliates, Seller is acquiring the LLC Interest for investment for its own
account, not as a nominee or agent, and not with the view to, or for the resale
in connection with, any distribution thereof.  Seller understands that the LLC
Interest has not been, and will not be, registered under Section 5 of the
Securities Act or under any applicable state securities or "blue sky" Legal
Requirement by reason of a specific exemption from the registration provisions
of the Securities Act, the availability of which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of
Seller's representations as expressed in this Section 5.20.

     Section 5.21 Disclosure of Information. Seller believes it has received all
                  -------------------------
of the information it considers necessary or appropriate for deciding whether to
acquire the LLC Interest, and further represents that it has had an opportunity
to ask questions and receive answers from Buyer regarding the terms and
conditions of the LLC Interest and the business, properties, and financial
condition of Buyer. Seller acknowledges that Buyer has not made any
representations concerning the tax consequences of acquisition and ownership of
the LLC Interest, the prospects or projected financial performance of Buyer or
other matters concerning Buyer except as specifically set forth in this
Agreement and the Operating Agreement. The foregoing does not limit or modify
the representations or warranties of Buyer in Article 4 of this Agreement or as
may be contained in the Operating Agreement or the right of Seller to rely
thereon.

                                       24

<PAGE>
 
                                  Article 6.

                                   Covenants
                                   ---------

     Section 6.1  Certain Affirmative Covenants of Seller.  Except as Buyer may
                  --------------------------------------- 
otherwise consent in writing, between the date of this Agreement and Closing,
Seller shall:

         (a)    (i) operate the Systems, and cause the Systems to be operated,
in the ordinary course of business in accordance with past practices; (ii)
maintain the tangible Assets, and cause the tangible Assets to be maintained, in
their current condition and repair, ordinary wear excepted and maintain
inventories of spare parts, converters and expendable supplies at levels
sufficient to permit the continued maintenance and operation of the Systems for
at least a 30 day period; (iii) perform all of its obligations, and cause each
Seller Subsidiary to perform all of its obligations, under all of the
Franchises, Licenses and System Contracts without material breach or default;
(iv) operate the Systems, and cause the Systems to be operated, in material
compliance with applicable Legal Requirements; (v) use its commercially
reasonable efforts, and cause the Seller Subsidiaries to use commercially
reasonable efforts, to preserve the business of each of the Systems and present
relationships with Subscribers, Governmental Authorities and others having
business relations with Seller or any Seller Subsidiary; and (iv) continue to
implement Seller and Seller Subsidiaries' procedures for disconnection and
discontinuance of service of subscribers whose accounts are delinquent in
accordance with those in effect on the date of this Agreement;

         (b)    give to Buyer and its counsel, accountants, and other
representatives, access upon reasonable prior notice during normal business
hours to the Systems, the Real Property, the other Assets and Seller and Seller
Subsidiaries' books and records relating to the Systems;

          (c)    as soon as practicable after the date of this Agreement and in
any event within 30 days after the date of this Agreement, and at its expense,
make all filings, including the simultaneous filing of FCC Forms 394 with all
other FCC Forms 394 filed by Seller hereunder, as necessary in order to transfer
any Franchises to Seller or a Seller Subsidiary at or prior to Closing, and
exercise commercially reasonable efforts to obtain in writing as promptly as
practicable all approvals, authorizations and consents described on Schedule
                                                                    --------
5.3, and deliver to Buyer copies thereof promptly upon receiving them; provided
- ---
that "commercially reasonable efforts" for this purpose shall not require Seller
to undertake any measures which in the reasonable opinion of Seller are
extraordinary or unreasonable to obtain such approvals and consents, including
the initiation or prosecution of legal proceedings or the payment of fees in
excess of normal and usual filing and processing fees; provided, further, that
the costs and expenses associated with the performance after the Closing Date of
obligations which are required by a third party as a condition of granting its
consent or approval and which obligations are accepted by Buyer (which
obligations shall be accepted or rejected by Buyer in accordance with the terms
of this Agreement) shall be borne solely by Buyer. If Buyer's

                                       25

<PAGE>
 
cooperation is required to obtain such consents, Buyer shall be responsible for
its own out-of-pocket costs in connection therewith;

         (d)    promptly deliver to Buyer copies of any reports with respect to
the operation of the Systems regularly prepared by Seller or any Seller
Subsidiary at any time from the date hereof until Closing including, within 20
days after the end of each calendar month, a statement of income and expenses
for the month just ended (prepared in accordance with GAAP, except for the
absence of footnotes and subject to usual and customary year-end adjustments)
and such other financial and operational information (including information on
Subscribers, and payables and receivables as reflected on the balance sheet) as
Buyer may reasonably request;

         (e)    promptly inform Buyer in writing of any material adverse change
in the condition (financial or otherwise), operations, assets, liabilities,
business or prospects of the Systems. Notwithstanding the disclosure to Buyer of
any such material adverse change, Seller shall not be relieved of any liability
for, nor shall the providing of such information by Seller to Buyer be deemed a
waiver by Buyer of, the breach of any representation or warranty of Seller
contained in this Agreement;

         (f)    continue to carry and maintain in full force and effect its
existing casualty and liability insurance through and including the Closing
Date;

         (g)    implement the increases in basic and CPST rates for cable
services at the times and in the full amounts set forth in the column entitled
"Proposed Total" in the Atlanta Division 1998 Rate Increases Sheet for Systems
located in Louisiana and Mississippi and in the column entitled "New (after
increase)" in the rate sheets for the Systems located in Tennessee, as set forth
in Schedule 6.1(g). Seller will adjust the basic and CPST rates currently stated
   ---------------
in Schedule 6.1(g) in each of the Systems so that as of January 1, 1998, the
   --------------- 
rates are at or below maximum permitted basic and CPST rates, and will result in
rate adjustments for all of the Systems which in the aggregate are equal to the
total "Proposed Total" and total "New (after increase)" rates for the Louisiana
and Mississippi Systems and for the Tennessee Systems, respectively, as set
forth in Schedule 6.1(g). Seller shall provide Buyer with all relevant FCC Forms
         ---------------         
1200, 1205, 1210, and 1240 whether or not submitted to any Governmental
Authority or the FCC, which the Seller used to determine the rates of each of
the Systems on the Closing Date pursuant to the FCC's regulations. Seller shall
cooperate with Buyer in providing any additional information subsequent to the
Closing Date which may be necessary to complete any FCC Form used to determine
the rates in effect on the Closing Date, and Seller will take all actions
necessary under the FCC's rules to notify subscribers in each relevant System of
the rate adjustment required pursuant to this paragraph;

         (h)    take all actions necessary or appropriate to remain in
compliance with the Social Contract;

                                       26

<PAGE>
 
         (i)    undertake such upgrades or rebuilds of the cable plant included
within the Systems as are requested by Buyer and approved by Seller in
accordance with Section 2.5(a)(iv); and

         (j)    cause all of the Franchises, Licenses, System Contracts and
Owned Real Property to be held by Seller or a Seller Subsidiary at or prior to
Closing.

     Section 6.2  Certain Negative Covenants of Seller. Between the date hereof
                  ------------------------------------
and Closing, Seller shall not, and shall not permit the Seller Subsidiaries to,
solicit or participate in negotiations with (and Seller shall use its
commercially reasonable efforts to prevent any Affiliate, partner, director,
officer, employee or other representative or agent of Seller or the Seller
Subsidiaries from negotiating with, soliciting or participating in negotiations
with) any third party with respect to the sale of the Seller Subsidiaries, the
Assets or the Systems or any transaction inconsistent with those contemplated
hereby. Additionally, except as Buyer may otherwise consent in writing, or as
contemplated by this Agreement, between the date of this Agreement and Closing,
Seller shall not, and shall not permit the Seller Subsidiaries to, (a) modify,
terminate, renew, suspend, or abrogate any Franchise, License or material System
Contract; (b) enter into any new Contract relating to the Assets or the Systems,
except for any such Contract entered into in the ordinary course of business,
which Contract shall in no event involve material non-monetary obligations or
payments by or to Seller or any Seller Subsidiary exceeding $25,000 for any
individual Contract or $200,000 for all such Contracts in the aggregate; (c)
sell, assign, transfer or otherwise dispose of any of the Seller Subsidiaries or
Assets, except for (i) the disposition of obsolete or worn-out equipment; or
(ii) dispositions with respect to which such Assets are replaced with assets of
at least equal value; (d) other than increases attributable to promotions
granted in the ordinary course, grant any increase in the compensation of any
employee of the Systems, except in the ordinary course of business and
consistent with past practice and in no event exceeding (i) individually, 110.5%
of any employee's compensation as of the date hereof, or (ii) in the aggregate,
105% of the aggregate compensation payable to all System employees as of the
date hereof; or (e) enter into any transaction or permit the taking of any
action that would result in any of Seller's representations and warranties
contained in this Agreement not being true and correct when made or at Closing.

     Section 6.3  Certain Covenants of Buyer.
                  --------------------------
         (a)    Except as Seller may otherwise consent in writing, Buyer shall,
as soon as practicable and in any event within 30 days after the date of this
Agreement, make all filings, and exercise commercially reasonable efforts to
obtain in writing as promptly as practicable all approvals, authorizations and
consents, described on Schedule 4.3, and deliver to Seller copies thereof.
                       ------------

         (b)    Buyer shall use its commercially reasonable efforts to cooperate
with Seller in obtaining all necessary approvals, authorizations and Consents to
be obtained by Seller including, but not limited to, notifying Seller as
promptly as

                                       27

<PAGE>
 
practicable after the date hereof of its wholly-owned Affiliate or
Affiliates, if any, who will take title to the Assets, attending meetings with
the parties who must provide such approvals, authorizations and consents and by
providing the appropriate financial statements, insurance certificates and
surety bonds required to obtain such approvals, authorizations and consents;
provided that "commercially reasonable efforts" for this purpose shall not
require Buyer to take any measures which in the reasonable opinion of Buyer are
extraordinary or unreasonable to obtain any Consents, including, without
limitation, under no circumstances shall Buyer be required to (i) make any
payments to any Person from whom such Consents are sought; (ii) accept any
conditions which in the reasonable judgment of Buyer it considers materially
adverse; or (iii) accept any changes, modifications or additions in the terms of
the document or instrument for which a Consent is sought if Buyer, in its
reasonable judgment, concludes that such changes, modifications or additions
would make such document or instrument materially more onerous upon Buyer than
the existing terms of such document or instrument. Buyer shall have the right to
request in connection with seeking and as a part of any Consent a consent by the
relevant party to the grant of a security interest in such underlying document
or instrument by Buyer (or its Affiliates) to their lenders; provided that Buyer
shall withdraw such request if the relevant party refuses to consent to the
grant of a security interest.

         (c)    Promptly after the date hereof, Buyer shall apply for a U.S.
Taxpayer Identification Number. Buyer shall inform Seller of such number
promptly after it is assigned.

     Section 6.4  Employee Matters.
                  ----------------   

         (a)    Except for employees of the Systems who are retained as
employees of Seller or a Seller Subsidiary and reassigned as of Closing, Seller
or the Seller Subsidiaries shall terminate the employment of all of the
employees who primarily render services to the Systems immediately prior to
Closing. Seller shall be responsible for and shall cause to be discharged and
satisfied in full all amounts owed to any employee of Seller or the Seller
Subsidiaries who primarily render services to the Systems through the Adjustment
Time, including wages, salaries, accrued vacation, amounts owed under any
employment, incentive, compensation or bonus agreements, or other benefits or
payments under the Benefit Arrangements and Employee Benefit Plans including
severance payments, (collectively, the "Employee Obligations").

         (b)    Buyer may offer employment to any or all of the employees of
Seller or the Seller Subsidiaries who primarily render services to the Systems
as of the Closing Date. Not later than 30 days (or such longer period as may be
required to comply with the WARN Act) prior to the first anticipated Closing
Date, Buyer shall deliver to Seller a written notice containing the names, if
any, of employees of the Systems whom Buyer intends to hire after the Closing
Date, and each such employee who accepts employment with Buyer as of the Closing
Date is hereinafter referred to as a "Hired Employee". Not later than 15 days
after delivering such written notice to Seller, Buyer shall notify those
employees whom Buyer intends to hire after the Closing

                                       28

<PAGE>
 
Date; the form and manner of such notification shall be reasonably satisfactory
to, and approved in advanced by, Seller and shall specify the terms of
employment, including compensation and all benefits relating thereto.

         (c)    Notwithstanding anything to the contrary herein, Buyer shall (i)
permit each Hired Employee to participate in Buyer's employee benefit plans and
Benefit Arrangements to the same extent as similarly situated employees of
Buyer; (ii) give each Hired Employee credit for past service with Seller
(including past service with any Affiliate of Seller) for purposes of
eligibility, and vesting and accrual under Buyer's employee benefit plans and
Benefit Arrangements (including severance benefit, if any); (iii) not subject
any Hired Employee to any waiting periods or limitations on benefits for pre-
existing conditions under Buyer's employee welfare benefit plans, within the
meaning of Section 3(1) of ERISA, including any group health and disability
plans, except to the extent such Hired Employee was subject to such limitations
under Seller's Employee Benefit Plans and except to the extent the insurer of
such employee benefit plans refuses to so provide (despite Buyer's commercially
reasonable efforts to the contrary); and (iv) credit all payments made by such
Hired Employee toward deductible, co-payment and out-of-pocket limits under
Seller's health care plans for the plan year that includes the Closing Date as
if such payments had been made for similar purposes under the health care plan
of Buyer for the plan year that includes the Closing Date.

         (d)    Buyer shall recognize the term of service with Seller or a
Seller Subsidiary of any Hired Employee in determining such employee's vacation
under Buyer's vacation plan.

         (e)    If Buyer discharges any Hired Employee without cause within 90
days after the Adjustment Time, such Hired Employee shall be entitled to
severance benefits under Buyer's severance pay plan, if any, in accordance with
the terms of such plan and counting the period of employment with Seller or a
Seller Subsidiary as employment with Buyer for purposes of calculating benefits
under any such plan. If Buyer has no severance pay plan, then the severance
benefits payable by Buyer under this subsection (e) shall be calculated in
accordance with the terms and provisions of Seller's severance plan.

         (f)    To permit Seller to make distributions to any former employee
who is a Hired Employee of the balance of such employee's 401(k) account in
Seller's tax qualified plan, if any, as soon as legally permitted, Buyer shall
cooperate with Seller by providing information reasonably requested by Seller
regarding each such employee's employment status with Buyer. Such information
shall be provided by Buyer within five business days following each such request
by Seller. To facilitate the foregoing, Buyer shall, within 90 days following
the Closing Date, include a notice in all personnel files (whether computerized
or hard copy) relating to each Hired Employee requiring the appropriate manager
or supervisor who closes such employee personnel file upon

                                       29

<PAGE>
 
termination of such employee's employment with Buyer for any reason to provide
Seller with such notice of the date of termination in accordance with this
Section 6.4(f).

         (g)    For the sole purpose of assisting Buyer in the establishment of
employee benefit plans for the benefit of Hired Employees, Seller shall make
reasonably available to Buyer copies of current summary plan descriptions for
the Employee Benefit Plans.

     Section 6.5 WARN Act. Seller shall, and shall cause the Seller Subsidiaries
                 --------
to, comply with the employee notification requirements, if applicable, of the
Federal Worker Adjustment and Retraining Notification Act (the "WARN Act").

     Section 6.6  Title Insurance.  Seller shall, and shall cause the Seller
                  ---------------                                             
Subsidiaries to, reasonably cooperate with Buyer if Buyer elects to obtain title
insurance policies on parcels of Real Property, it being understood that Buyer
shall have the sole responsibility for obtaining and paying for such policies.
The obtaining of title insurance shall not be a condition to the obligations of
Buyer to consummate the transactions contemplated hereunder.

     Section 6.7 HSR Act Compliance. As promptly as practicable after the date
                 ------------------
of this Agreement, but in any event no later than 45 days after the date of this
Agreement, Buyer and Seller shall prepare and file proper premerger notification
forms and affidavits in connection with the transactions contemplated hereby, in
compliance with the HSR Act. If any Governmental Authority shall challenge the
transactions contemplated hereby, or request any additional filings or
information, neither Buyer nor Seller shall have any obligation to contest such
challenge or make or provide any such filing or information, and in any such
event each shall be entitled, at its option, to withdraw its filing and
terminate this Agreement; provided that Buyer and Seller shall use commercially
reasonable efforts to negotiate as promptly as practical with such Governmental
Authority regarding the scope and content of any such request for additional
filings, information or documentary material in an attempt to limit the scope
and content of any such request in such a manner as such party would determine
that compliance with such request would be commercially reasonable. Buyer and
Seller shall each pay one half of any applicable HSR filing fee.

     Section 6.8  Post-Closing Obtaining of Consents, Authorizations and
                  ------------------------------------------------------
Approvals. Subsequent to Closing, each party shall continue to use its
- ---------
commercially reasonable efforts at its own expense to obtain in writing as
promptly as possible any consent, authorization or approval required to be
obtained by it that was not obtained on or before Closing, and deliver copies of
such, reasonably satisfactory in form and substance, to the other. The
obligations set forth in this subsection shall survive Closing and shall not be
merged in the consummation of the transactions contemplated hereby. From Closing
until each such consent, authorization or approval is obtained, each party shall
act as the agent for the other, and shall preserve the benefit of and enforce
the System Contract or other right to which such consent, authorization or
approval pertains to the fullest extent permissible under such System Contract
or other

                                       30

<PAGE>
 
right. Upon request of the other, at Closing, Buyer and Seller shall
enter into an agency agreement in a form mutually satisfactory to each party
specifying the terms of such agency.

     Section 6.9  Social Contract.
                  ---------------   
         (a)    Social Contract Election. Buyer has elected to have the
                ------------------------
provisions of the Social Contract apply to the Systems after Closing. No later
than 30 days after the date hereof, Buyer shall notify the FCC of its election
to have the provisions of the Social Contract apply to the Systems after
Closing. Buyer shall then use commercially reasonable efforts to obtain the
FCC's concurrence thereto prior to Closing, in accordance with the terms of the
Social Contract.

         (b)    Social Contract Refund. If the FCC does not concur with Buyer's
                ----------------------
election to have the provisions of the Social Contract apply to the Systems
after Closing, and because the upgrade commitment described in Section III.F.1.
of the Social Contract will not have been completed prior to Closing, Section
III.F.6.b. of the Social Contract provides that the "Cable Programming Service
Tier" subscribers of the Systems as of Closing (the "CPST Subscribers") will be
eligible for refunds (in the form of prospective bill credits) of any CPST rate
increases taken by Seller or a Seller Subsidiary pursuant to the Social
Contract, with interest computed in accordance with FCC requirements for
subscriber refunds, and a liquidated damages penalty of 15% of such refund
amount, calculated pursuant to Section III.F.5. of the Social Contract (the
"Social Contract Refund"). Accordingly, with respect to the Social Contract
Refund, if Buyer elects to waive its condition precedent to Closing set forth in
Section 7.1(h)(ii) with respect to the Social Contract:

                (i) At Closing, pursuant to Section 2.5(a)(v), Buyer shall
receive a credit in an amount equal to the Social Contract Refund, calculated by
Seller in accordance with the Social Contract as of the 30th day after the
Closing Date (the "Social Contract Refund Credit"). Buyer shall be responsible
for any additional interest to be paid to CPST Subscribers calculated in
accordance with the Social Contract if the Social Contract Refunds are not made
within 30 days after the Closing Date.

                (ii) As soon as reasonably practicable after Closing (and taking
into account the time reasonably required for Buyer to complete arrangements to
make the Social Contract Refund and any rate adjustments proposed by Buyer),
Buyer shall give each CPST Subscriber a prospective bill credit in the aggregate
amount calculated by Seller as appropriate for (A) the portion of the Social
Contract Refund Credit that is properly payable to such CPST Subscriber, plus
(B) any additional interest, computed in accordance with FCC requirements for
subscriber refunds, that may be owing to such CPST Subscriber for the period
between the 30th day after the Closing Date and the effective date of such
refund. Buyer shall reflect such prospective bill credit on a regular monthly
billing statement by Buyer and shall describe such bill credit as the refund
required and calculated pursuant to the Social Contract.

                                       31

<PAGE>
 
     Section 6.10 Confidentiality. Any non-public information that either party
                  ---------------
("Recipient Party") may obtain from the other ("Disclosing Party") in connection
with this Agreement with respect to Disclosing Party or the Systems shall be
confidential and, unless and until Closing shall occur, Recipient Party shall
not disclose any such information to any third party (other than its directors,
officers, members, shareholders, partners and employees, and representatives of
its advisers and lenders whose knowledge thereof is necessary in order to
facilitate the consummation of the transactions contemplated hereby) or use such
information to the detriment of Disclosing Party; provided that (a) Recipient
Party may use and disclose any such information once it has been publicly
disclosed (other than by Recipient Party in breach of its obligations under this
Section) or which rightfully has come into the possession of Recipient Party
(other than from Disclosing Party), and (b) to the extent that Recipient Party
may become compelled by Legal Requirements to disclose any of such information,
Recipient Party may disclose such information if it shall have used all
reasonable efforts, and shall have afforded Disclosing Party the opportunity, to
obtain an appropriate protective order, or other satisfactory assurance of
confidential treatment, for the information compelled to be disclosed. If this
Agreement is terminated, Recipient Party shall use all reasonable efforts to
cause to be delivered to Disclosing Party, and retain no copies of, any
documents, work papers and other materials obtained by Recipient Party or on its
behalf from Disclosing Party, whether so obtained before or after the execution
hereof.

         Section 6.11 Supplements to Schedules. Each of Seller and Buyer shall,
                      ------------------------
from time to time prior to Closing, supplement the Schedules to this Agreement
with additional information that, if existing or known to it on the date of this
Agreement, would have been required to be included in one or more Schedules to
this Agreement. For purposes of determining the satisfaction of any of the
conditions to the obligations of Buyer and Seller in Sections 7.1 and 7.2 and
the liability of Seller or of Buyer following Closing for breaches of its
representations and warranties under this Agreement, the Schedules to this
Agreement shall be deemed to include only (a) the information contained therein
on the date of this Agreement and (b) information added to the Schedules by
written supplements to this Agreement delivered prior to Closing by the party
making such amendment that (i) are accepted in writing by the other party or
(ii) reflect actions permitted by this Agreement to be taken prior to Closing.

     Section 6.12  Notification of Certain Matters.
                   -------------------------------

         (a)    Each party shall promptly notify the other party of any fact,
event, circumstance, action or omission (i) which, if known at the date of this
Agreement, would have been required to be disclosed in or pursuant to this
Agreement, or (ii) the existence or occurrence of which would cause any of such
party's representations or warranties under this Agreement not to be true in any
material respect, and with respect to clause (ii), use commercially reasonable
efforts to remedy the same.

         (b)    Promptly upon becoming aware of such matter, each party shall
notify the other party of any fact, event, circumstance, action or omission
which

                                       32

<PAGE>
 
constitutes a breach by the other party of any of the representations or
warranties made by the other party in this Agreement or a default in the
performance of or compliance with any covenant, agreement or obligation required
to be performed or complied with hereunder prior to the Closing Date.

         (c)    Notwithstanding anything in this Agreement to the contrary, any
knowledge of Buyer obtained at any time of any breach of a representation or
warranty or covenant (however such knowledge was obtained) and any investigation
made at any time by or on behalf of Buyer, shall not diminish in any respect
whatsoever Buyer's right (before or after Closing) to rely on (and any rights or
remedies of Buyer in the event of the breach of) any representations,
warranties, covenants and agreements made by or on behalf of Seller pursuant to
this Agreement or in any certificate delivered pursuant hereto.

     Section 6.13  Commercially Reasonable Efforts.  Each party shall use
                   -------------------------------
commercially reasonable efforts to take all steps within its power, and shall
cooperate with the other party, to cause to be fulfilled those of the conditions
to the other party's obligations to consummate the transactions contemplated by
this Agreement that are dependent upon its actions, and to execute and deliver,
or cause the execution and delivery of, such instruments and take or cause to be
taken such other commercially reasonable actions as may be necessary to carry
out the intent of this Agreement and consummate the transactions contemplated
hereby.

     Section 6.14 Environmental Reports. Prior to the Closing Date, Buyer shall
                  ---------------------
have the right, at its sole cost, to conduct such environmental audits and
studies of the Real Property as it deems appropriate, including the preparation
of Phase I and Phase II environmental reports. Seller shall cooperate with all
reasonable requests of Buyer in connection with the preparation of such
environmental audits and studies, including furnishing information and allowing
Buyer and its consultants reasonable access to the parcels of Real Property
unless prohibited under System Contracts relating to such Real Property. The
parties agree to use commercially reasonable efforts to ensure to the extent
possible the attorney-client privilege treatment of all environmental audits and
studies conducted hereunder; provided that nothing herein shall be construed to
prevent Buyer from disclosing the contents of such audits and studies to its
lenders and other parties as may be necessary to carry out the intent of this
Agreement.

     Section 6.15 Access to Books and Records. Seller shall provide Buyer
                  ---------------------------
access and the right to copy during usual business hours upon reasonable prior
notice to Seller for a period of three years from the Closing Date any books and
records relating to the Assets but not included in the Assets. Buyer shall
provide Seller access and the right to copy during usual business hours upon
reasonable prior notice to Buyer for a period of three years after the Closing
Date any books and records relating to the Assets that are included in the
Assets.

     Section 6.16  Other Agreements.  Commencing promptly after the date hereof,
                   ----------------
Seller and Buyer shall cooperate in good faith to negotiate the terms of an
amended and

                                       33

<PAGE>
 
restated Operating Agreement of Buyer, consistent with the terms contained in
the LLC Terms Sheet attached hereto as Exhibit A (the "LLC Terms Sheet"), which
                                       ---------
shall be entered into by Seller and the other parties thereto contemplated by
the LLC Terms Sheet and delivered at Closing (the "Operating Agreement"). At
Closing, if requested by Buyer, (a) Buyer and an Affiliate of Seller shall enter
into a program management agreement (the "Program Management Agreement")
relating to programming services to be provided by Seller's Affiliate to Buyer
in substantially the form agreed to by Buyer and Seller, and (b) Buyer, Seller,
or a Seller Subsidiary and CSG Systems, Inc. or an Affiliate thereof shall enter
into an agreement or agreements in substantially the form attached hereto as
Exhibit B (the "CSG Assignments") relating to the assignment and assumption by
- ---------
Buyer of certain Seller or Seller Subsidiary's rights and obligations with
respect to the Systems under subscriber billing service agreements with CSG
Systems, Inc. or an Affiliate thereof. Notwithstanding anything in the Agreement
to the contrary, if Buyer elects not to enter into the Program Management
Agreement, it shall so notify Seller at least 45 days prior to the first
scheduled Closing Date and nothing herein shall be deemed to prohibit Buyer from
negotiating or entering into retransmission consent agreements or programming
agreements for the Systems relating to the period on and after Closing. Buyer
acknowledges that an Affiliate of Seller has developed a branded package of user
interfaces, browsers and other navigational tools, and content that provides a
template for high-speed cable modem-enabled online services to be offered on
cable televisions systems (the "Roadrunner Product"). Buyer agrees that if it
determines to offer services on the Systems after Closing which are similar to
the Roadrunner Product, it will enter into non-exclusive good faith negotiations
with Seller's Affiliate concerning an affiliation agreement by which the
Roadrunner Product would be offered on the Systems taking into account all
circumstances at the relevant time; provided, however, that to the extent the
parties are unable to agree in good faith on the terms of such agreement that
are mutually satisfactory to the parties for any reason whatsoever, neither
party shall be deemed to be in breach in any respect hereof.

     Section 6.17 Guaranty of Seller's Post-Closing Obligations. If, during the
                  ---------------------------------------------
period ending on the second anniversary of the Closing Date, (a) Seller's net
equity shall fall below $300,000,000 for two or more consecutive quarters, or
(b) Seller shall consummate an asset transfer with the result that Seller's net
equity shall fall below $300,000,000, then Seller shall so notify Buyer and
designate an Affiliate with a net equity in excess of $300,000,000 (the
"Guarantor") who shall, execute and deliver a guaranty agreement by and between
Guarantor and Buyer, guaranteeing the full and punctual performance of Seller's
remaining obligations under Section 11.1 hereof.

     Section 6.18  Special Provisions for Franchise Transfers.
                   ------------------------------------------ 

         (a)    If Closing has occurred and any Material Consent required with
respect to the transfer of a Franchise has not been obtained on or prior to the
Closing Date (such Franchise, a "Nonconsent Franchise"), subject to the
provisions of Section 6.18(e) below, the parties shall continue to use their
respective commercially reasonable efforts after Closing to obtain such consent
or consents as promptly as practicable after Closing, and shall otherwise treat
any Nonconsent Franchise in

                                       34

<PAGE>
 
accordance with the terms of this Section 6.18. Notwithstanding the absence of a
Franchise transfer Material Consent, unless Seller shall have elected to hold
the Nonconsent Franchise for the use and benefit of Buyer under subsection (c)
hereof or unless either party shall reasonably determine that such assignment
would violate the terms of the applicable Nonconsent Franchise, or System
Contract, License or Legal Requirement or subject Seller to liability under the
Nonconsent Franchise, System Contract, License or otherwise, Seller shall
assign, or shall cause a Seller Subsidiary to assign, to Buyer at Closing all
System Contracts and Licenses relating solely to, and all Tangible Personal
Property and Real Property located within the areas covered by, any Nonconsent
Franchises. To the extent not assigned at Closing, such System Contracts,
Licenses, Tangible Personal Property and Real Property shall be assigned
simultaneously with the assignment of the Nonconsent Franchise, free and clear
of all Liens except Permitted Liens.

         (b)    Unless subsection (c) hereof is applicable, Buyer and Seller
shall execute and deliver (or Seller shall cause the applicable Seller
Subsidiary to execute and deliver) a management agreement at Closing with
respect to each such Nonconsent Franchise (the "Management Agreement"). Each
Management Agreement will incorporate the following terms and such other terms
as the parties shall reasonably agree upon, acting in good faith: Buyer will
manage and operate the Nonconsent Franchise and the area, Subscribers and Assets
covered thereby in accordance with good business practices in the cable
television industry and will use its commercially reasonable efforts to perform
all actions necessary or appropriate to the management of the Nonconsent
Franchise and its operation; Buyer will bear the expenses relating to such
management and operations and retain the revenues derived therefrom, the net
cash flow from the management and operation of such Nonconsent Franchise, or
otherwise derived from or relating to such Nonconsent Franchise, being Buyer's
sole compensation for managing and operating the Nonconsent Franchise and the
area, Subscribers and Assets covered thereby; Buyer will indemnify Seller and
any Seller Subsidiary against Losses suffered or incurred by Seller or the
Seller Subsidiary resulting from Buyer's material breach of the Management
Agreement or Buyer's gross negligence or willful misconduct; and, the Management
Agreement will automatically terminate upon subsequent transfer of the
Nonconsent Franchise to Buyer. Upon receipt of consent to transfer the
Nonconsent Franchise, the same shall be assigned to Buyer, free and clear of all
Liens except Permitted Liens.

            (c) In the event Seller reasonably determines the terms of the
applicable Nonconsent Franchise or any Legal Requirement would prevent the
management and operation thereof by Buyer under a Management Agreement, then, at
Closing, in lieu of executing and delivering a Management Agreement, Seller or
the applicable Seller Subsidiary may hold, or Seller may cause a Seller
Subsidiary to hold, such Nonconsent Franchise for the use and benefit of Buyer
(each, a "Beneficial Arrangement"). In such event, Seller shall, or shall cause
a Seller Subsidiary to, (i) operate the Nonconsent Franchise in accordance with,
and otherwise comply with, the covenants set forth in Sections 6.1 and 6.2, (ii)
afford Buyer the economic benefits intended to be conferred by such Nonconsent
Franchise, and (iii) pay to Buyer the

                                       35

<PAGE>
 
Nonconsent Franchise Cash Flow Amount. Such Nonconsent Franchise Cash Flow
Amount shall be paid to Buyer as soon as reasonably practicable after the end of
each month during the term of such Beneficial Arrangement, and Buyer shall (and
Seller or the Seller Subsidiaries shall not) report for federal and state income
tax purposes, the income, gain, loss and deductions with respect to such
Nonconsent Franchise. In the event there is negative Nonconsent Franchise Cash
Flow Amount in any month, such negative amounts shall be subtracted from the
Nonconsent Franchise Cash Flow Amount otherwise to be paid or assigned to Buyer
by Seller for subsequent months, pursuant to this Section 6.18(c). Seller shall
allow representatives of Buyer reasonable access to its books and records
relating to the calculation of Nonconsent Franchise Cash Flow Amount for the
purpose of performing an audit of such calculations every six months, and the
parties shall use their best good faith efforts to promptly resolve any
discrepancies believed to exist in such calculations within 30 days of delivery
by Buyer of its audit report to Buyer. Any disputes which are not resolved
within such 30-day period shall be referred to a Qualified Auditor whose
determination shall be binding upon both parties. Once consent to transfer such
Nonconsent Franchise is obtained, Seller shall, or shall cause the Seller
Subsidiary to, promptly take such steps as shall be necessary to assign the
Nonconsent Franchise to Buyer, free and clear of all Liens except Permitted
Liens, and Buyer shall reimburse to Seller an amount equal to the cumulative
negative Nonconsent Franchise Cash Flow Amount, if any, existing and unpaid on
the date of transfer plus interest on such amount at a rate equal to the prime
rate of interest of The Chase Manhattan Bank plus 2.0%.

            (d) During the period Seller is operating the Nonconsent Franchise
under a Beneficial Arrangement or Buyer is operating the Nonconsent Franchise
under a Management Agreement, Seller shall not, and shall not permit any Seller
Subsidiary to, transfer legal title to, mortgage, pledge or otherwise encumber,
any Nonconsent Franchise without the prior written consent of Buyer.

         (e) In the event the parties reasonably determine at or prior to
Closing that the terms of the Nonconsent Franchise or any Legal Requirement
would prevent both management and operation of the Nonconsent Franchise under
the Management Agreement and the Beneficial Arrangement, the Nonconsent
Franchise and the area, Subscribers and Assets covered thereby shall, unless the
parties agree to continue to use their respective commercially reasonable
efforts to obtain the Franchise transfer consent and on the terms and conditions
relating thereto, be retained by Seller at Closing and the Equity Value shall be
reduced by an amount equal to the product of (i) the Subscriber Valuation times
(ii) the Subscriber Total covered by such Nonconsent Franchise as of September
30, 1997 and, to the extent such reduction exceeds the Equity Value, the Cash
Consideration shall be reduced by such excess amount.

         (f)    If, as of the third anniversary of the Closing Date, (i) the
consent required with respect to the transfer of a Nonconsent Franchise has not
been obtained, and (ii) Buyer is then managing the area, Subscribers and Assets
covered by such Nonconsent Franchise under a Management Agreement, or Seller or
a Seller Subsidiary is then holding the Nonconsent Franchise for the use and
benefit of Buyer under a

                                       36

<PAGE>
 
Beneficial Arrangement, Buyer shall elect, within 30 days after the third
anniversary of the Closing Date, whether to continue or to terminate the
Management Agreement or Beneficial Arrangement. If Buyer elects to continue the
Management Agreement or Beneficial Arrangement, the Equity Value shall be
reduced by an amount equal to the product of (A) 20% times (B) the Subscriber
Valuation times (C) the Subscriber Total covered by such Nonconsent Franchise as
of September 30, 1997, and Seller shall, on such date as shall be designated by
Buyer but in any event no later than the seventh anniversary of the Closing
Date, transfer that percentage of the LLC Interest to Buyer as shall be
necessary to reflect such reduction in Equity Value or, if Seller then owns an
insufficient percentage LLC Interest, Seller shall transfer its entire LLC
Interest to Buyer and pay Buyer an amount in cash equal to the difference
between the Equity Value of the LLC Interest conveyed and the amount so owed
pursuant to this Section 6.18(f).

         (g)    If (i) Buyer elects under subsection (f) to terminate the
Management Agreement or the Beneficial Arrangement, or (ii) at any time after
Closing (A) Buyer or Seller is advised in writing by any Governmental Authority
that continued operation or management of the Nonconsent Franchise under the
Management Agreement, or the existence of the Beneficial Arrangement, violates a
Franchise, System Contract or Legal Requirement and Buyer's counsel concurs with
such advice, (B) any Governmental Authority revokes the Nonconsent Franchise, or
(C) Buyer is not receiving and has not for a period of 90 days been receiving
cash flow to which it is entitled hereunder (positive or negative) attributable
to the Nonconsent Franchise through no fault of its own, and (D) such violation,
revocation or loss of Nonconsent Franchise Cash Flow Amounts are not
attributable to an act or omission of Buyer in violation of its agreements
hereunder or under the Management Agreement, and (E) Buyer thereafter elects to
terminate the Management Agreement or Beneficial Arrangement, the Equity Value
shall be reduced by an amount equal to the sum of (1) the amount of interest
which accrues on unpaid positive cash flow, if any, to which Buyer is entitled
hereunder (between the date on which Buyer is entitled to receive such cash flow
and the date of such termination) at a rate equal to the prime rate of interest
of The Chase Manhattan Bank plus 2.0%, and (2) the product of (aa) the
Subscriber Valuation times (bb) (X) the lesser of (yy) the Subscriber Total
covered by such Nonconsent Franchise as of September 30, 1997 or (zz) the
Subscriber Total covered by such Nonconsent Franchise as of the date the
Management Agreement is terminated, in the event Buyer has operated the
Nonconsent Franchise under a Management Agreement, (Y) the Subscriber Total
covered by such Nonconsent Franchise as of September 30, 1997, in the event
Seller has operated the Nonconsent Franchise for the use and benefit of Buyer
under a Beneficial Arrangement, or (Z) notwithstanding (x) or (y) and
irrespective of whether the Nonconsent Franchise is operated by Buyer under a
Management Agreement or by Seller for the use and benefit of Buyer under a
beneficial arrangement, the average of (yy) the Subscriber Total covered by such
Nonconsent Franchise as of September 30, 1997 and (zz) the Subscriber Total
covered by such Nonconsent Franchise as of the date the Management Agreement or
beneficial arrangement is terminated, in the event (yy) exceeds (zz) due to
conditions affecting the cable television industry generally, either nationally
or regionally. In such events Seller shall, on such date as shall be designated

                                       37

<PAGE>
 
by Buyer but in any event no later than the seventh anniversary of the Closing
Date, transfer that percentage of the LLC Interest to Buyer as shall be
necessary to reflect such reduction in Equity Value or, if Seller than owns an
insufficient percentage LLC Interest, Seller shall transfer its entire LLC
Interest to Buyer and pay Buyer an amount in cash equal to the difference
between the Equity Value of the LLC Interest conveyed and the amount so owed to
Buyer pursuant to this Section 6.18(g). In addition, if Buyer has so elected to
terminate the Management Agreement, Seller shall reimburse Buyer an amount equal
to the aggregate of all capital expenditures actually made by Buyer after the
Closing Date (plus interest on such capital expenditure amount at a rate equal
to the prime rate of interest of The Chase Manhattan Bank plus 2.0%) in (i)
maintaining the cable plant covered by such Nonconsent Franchise, (ii)
constructing extensions to such cable plant, but only to the extent such
extensions were approved by Seller, which consent shall not unreasonably be
withheld, and (iii) upgrading such cable plant, but only to the extent such
upgrades are required under the Social Contract. If Buyer has so elected to
terminate the Beneficial Arrangement, Seller shall reimburse to Buyer an amount
equal to all capital expenditures included in the Nonconsent Franchise Cash Flow
Amount (plus interest on such capital expenditure amount at a rate equal to the
prime rate of interest of The Chase Manhattan Bank plus 2.0%), and an amount
equal to the unremitted cumulative Nonconsent Franchise Cash Flow Amount
(calculated without taking into account capital expenditures), if any, existing
on the date of termination.

         (h)    The parties agree to cooperate in the negotiation, execution and
delivery of such signal sharing or similar agreements on commercially reasonable
terms as may be necessary or appropriate due to the existence of a Nonconsent
Franchise and any nontransfer of Tangible Personal Property or Real Property
associated therewith.


                                  Article 7.

                             Conditions Precedent
                             --------------------

     Section 7.1 Conditions to Buyer's Obligations. The obligations of Buyer to
                 ---------------------------------
consummate the transactions contemplated by this Agreement shall be subject to
the following conditions, any one or more of which may be waived by Buyer, in
its sole discretion:

         (a)    Accuracy of Representations and Warranties. The representations
                ------------------------------------------
and warranties of Seller in this Agreement (disregarding all qualifications and
exceptions contained therein relating to materiality, however phrased) shall be
true and accurate in all material respects at and as of Closing with the same
effect as if made at and as of Closing, except for changes contemplated under
this Agreement and except for representations and warranties made only at and as
of a certain date which shall have been true and accurate in all material
respects as of such date.

         (b)    Performance of Agreements. Seller shall have performed in all
                -------------------------
material respects all obligations and agreements and complied in all material
respects with all covenants in this Agreement to be performed and complied with
by it at or before Closing, the Seller Subsidiaries shall have performed in all
material respects their

                                       38

<PAGE>
 
obligations hereunder to consummate the transactions
contemplated hereby, and no event which would constitute a material breach of
the terms of this Agreement on the part of Seller or a Seller Subsidiary shall
have occurred or be continuing.

         (c)    Officer's Certificate. Buyer shall have received a certificate
                ---------------------
executed by an executive officer of Seller, dated as of Closing, reasonably
satisfactory in form and substance to Buyer, certifying that the conditions
specified in Sections 7.1(a) and (b) have been satisfied.

         (d)    Legal Proceedings. There shall be no Legal Requirement, and no
                -----------------
Judgment shall have been entered and not vacated by any Governmental Authority
asserting competent jurisdiction in any Litigation or arising therefrom, which
enjoins, restrains, makes illegal, or prohibits consummation of the transactions
contemplated by this Agreement, and there shall be no Litigation pending or
threatened seeking, or which if successful would have the effect of, any of the
foregoing.

         (e)    HSR Act Compliance. All waiting periods under the HSR Act
                ------------------
applicable to the transactions contemplated hereby shall have expired or been
terminated.

         (f)    Seller's Counsel Opinion. Buyer shall have received an opinion
                ------------------------
of Mary Carroll Huey, counsel to Seller, dated as of Closing, in the form of
Exhibit C.
- --------- 

         (g)    Seller's FCC Counsel Opinion. Buyer shall have received an
                ----------------------------
opinion of Bryan Cave, special communications counsel to Seller, dated as of
Closing, in the form of Exhibit D.
                        --------- 

         (h)    Consents.
                -------- 
               (i) Buyer shall have received evidence, in form and substance
reasonably satisfactory to it, that there have been obtained all consents,
approvals and authorizations identified on Schedule 5.3 as "Material Consents",
                                           ------------
such consents to be final and effective in accordance with applicable Legal
Requirements, no longer subject to any statutory, administrative, judicial or
other waiting, appeal, reconsideration, publication or similar periods and to
otherwise be in form and substance reasonably satisfactory to Buyer and shall
not contain any changes, modifications, additions or conditions not consistent
with the provisions of Section 6.3(b); provided, however, that if this condition
has not been satisfied due solely to the failure to obtain all Material Consents
that are consents by the FCC to assignments of Licenses (other than CARS
Licenses), this condition shall be deemed to be satisfied if such consents to
assignment have been requested prior to Closing and Buyer is entitled to operate
such Licenses pursuant to conditional use authorizations until the FCC's consent
is received; and provided further that if this condition has not been satisfied
due solely to the failure to obtain all Material Consents with respect to
Franchises but (a) Material Consents with respect to Franchises have been
obtained which, when combined with Franchises for which transfer consent is not
required, cover at least 95% of the Subscriber Total as of

                                       39

<PAGE>
 
the Closing Date, and (b) Material Consents with respect to Franchises listed on
Schedule 5.3 as Material Franchises have been obtained, then this condition
- ------------
shall be deemed to be satisfied.

                (ii) Buyer shall have received the consent of the FCC to have
the provisions of the Social Contract apply to the Systems after Closing, on
terms and conditions reasonably satisfactory to Buyer that shall be materially
consistent with the existing terms of the Social Contract, as reasonably applied
to Buyer and the Systems.

         (i)    Subscribers. As of Closing, the Systems shall serve, in the
                ----------- 
aggregate, a Subscriber Total of at least 114,002.

         (j)    Evidence of Necessary Actions. Seller shall have delivered to
                -----------------------------
Buyer evidence reasonably satisfactory to Buyer to the effect that Seller has
taken and has caused the Seller Subsidiaries to have taken all action necessary
to authorize the execution of this Agreement and the consummation of the
transactions contemplated hereby.

         (k)    Other Documents. All other documents and other items required to
                ---------------
be delivered under this Agreement to Buyer at or prior to Closing shall have
been delivered or shall be tendered at Closing.

     Section 7.2 Conditions to Seller's Obligations. The obligations of Seller
                 ----------------------------------
to consummate the transactions contemplated by this Agreement shall be subject
to the following conditions, any one or more of which may be waived by Seller,
in its sole discretion:

         (a)    Accuracy of Representations and Warranties. The representations
                ------------------------------------------
and warranties of Buyer in this Agreement (disregarding all qualifications and
exceptions contained therein relating to materiality, however phrased) shall be
true and accurate in all material respects at and as of Closing with the same
effect as if made at and as of Closing. except for changes contemplated under
this Agreement and except for representations and warranties made only at and as
of a certain date which shall have been true and correct in all material
respects as of such date.

         (b)    Performance of Agreements. Buyer shall have performed in all
                -------------------------
material respects all obligations and agreements and complied in all material
respects with all covenants in this Agreement to be performed and complied with
by it at or before Closing and no event which would constitute a material breach
of the terms of this Agreement on the part of Buyer shall have occurred and is
continuing.

         (c)    Officer's Certificate. Seller shall have received a certificate
                ---------------------
executed by an executive officer of Buyer, dated as of Closing, reasonably
satisfactory in form and substance to Seller, certifying that the conditions
specified in Sections 7.2(a) and (b) have been satisfied.

                                       40

<PAGE>
 
         (d)    Legal Proceedings. There shall be no Legal Requirement, and no
                ----------------- 
Judgment shall have been entered and not vacated by any Governmental Authority
asserting competent jurisdiction in any Litigation or arising therefrom, which
enjoins, restrains, makes illegal, or prohibits consummation of the transactions
contemplated hereby, and there shall be no Litigation pending or threatened
seeking or which if successful would have the effect of, any of the foregoing.

         (e)    HSR Act Compliance. All waiting periods under the HSR Act
                ------------------
applicable to the transactions contemplated hereby shall have expired or been
terminated.

         (f)    Buyer's Counsel Opinion. Seller shall have received an opinion
                -----------------------
of Dow, Lohnes & Albertson, counsel to Buyer, dated as of Closing, in the form
of Exhibit E.
   --------- 

         (g)    Consents.
                -------- 

                (i)  Seller shall have received evidence, in form and substance
reasonably satisfactory to it, that there have been obtained all consents,
approvals and authorizations identified on Schedule 4.3 as Material Consents;
                                           ------------
provided, however, if this condition is not satisfied due solely to the failure
to obtain all Material Consents with respect to Franchises but Material Consents
with respect to Franchises have been obtained which, when combined with
Franchises for which transfer consent is not required, cover at least 95% of the
Subscriber Total as of the Closing Date, then this condition shall be deemed
satisfied.

                (ii) Buyer shall have received the consent of the FCC to have
the provisions of the Social Contract apply to the Systems after Closing, on
terms and conditions reasonably satisfactory to Seller that shall be materially
consistent with the existing terms of the Social Contract.

         (h)    Evidence of Necessary Actions. Buyer shall have delivered to
                -----------------------------
Seller evidence reasonably satisfactory to Seller to the effect that Buyer has
taken all necessary action to authorize the execution of this Agreement and the
consummation of the transactions contemplated hereby.

         (i)    Other Documents. All other documents and other items required to
                ---------------
be delivered under this Agreement to Seller at or prior to Closing shall have
been delivered or shall be tendered at Closing.


                                  Article 8.

                                    Closing
                                    -------

         Section 8.1 Closing; Time and Place. Subject to (i) the satisfaction
                     -----------------------
or, to the extent permissible by law, waiver (by the party for whose benefit the
Closing condition is imposed) on or prior to the date scheduled for Closing of
the Closing conditions

                                       41

<PAGE>
 
described in Section 7 hereof and (ii) the provisions of Article 9 hereof, the
closing of the transactions contemplated by this Agreement ("Closing") shall
take place on a date and at a time and location mutually determined by Seller
and Buyer that is within 10 business days after the date on which the conditions
to Closing set forth in Sections 7.1(e) and (h) and Section 7.2(e) and (g) have
been satisfied, or by mutual agreement, the last business day of the month
within or immediately after such 10-business-day period. Notwithstanding the
foregoing, to the extent that on the date otherwise scheduled for Closing, the
conditions precedent set forth in Sections 7.1(d) or 7.2(d) are not satisfied
(other than as a result of a permanent, non-appealable injunction prohibiting
the consummation of this Agreement), the Closing Date shall be postponed to a
date chosen mutually by Seller and Buyer not less than 5 nor more than 10 days
after the date on which the circumstances preventing such conditions from being
satisfied are no longer applicable. Subject to extension pursuant to the last
sentence of Section 9.1 and to Section 12.12, in no event shall the Closing take
place later than the date that is nine months from the date of this Agreement
(the "Outside Closing Date").

     Section 8.2 Seller's Obligations. At Closing, Seller shall deliver or cause
                 --------------------
to be delivered to Buyer the following:

         (a)    Bill of Sale, Assignment and Assumption Agreement. Executed
                -------------------------------------------------
counterparts of a Bill of Sale, Assignment and Assumption Agreement relating to
the Assets from each of Seller and each Seller Subsidiary in the form of Exhibit
                                                                         -------
F;
- -
    
         (b)    Deeds. Deeds in form and substance reasonably satisfactory to
                ----- 
Buyer conveying to Buyer the Owned Real Property free and clear of all Liens
(except for Permitted Liens);

         (c)    FIRPTA Affidavit. FIRPTA Non-Foreign Seller Affidavit certifying
                ----------------
that Seller is not a foreign person within the meaning of Section 1445 of the
Code, reasonably satisfactory in form and substance to Buyer.

         (d)    Officer's Certificate. The certificate described in Section
                ---------------------
7.1(c);

         (e)    Seller's Counsel Opinion. Seller's counsel opinion described in
                ------------------------
Section 7.1(f);

         (f)    Seller's FCC Counsel Opinion. Seller's FCC counsel opinion
                ----------------------------
described in Section 7.1(g);

         (g)    Vehicle Titles. Title certificates to all vehicles included
                --------------
among the Assets, endorsed for transfer of title to Buyer, and separate bills of
sale therefor, if required by the laws of the states in which such vehicles are
titled;

         (h)    Operating Agreement. Executed counterparts of the Operating
                -------------------
Agreement.

                                       42

<PAGE>
 
         (i)    Programming Agreement; CSG Assignments. If Buyer has elected to
                --------------------- 
enter into the Programming Agreement and/or CSG Assignments, executed
counterparts thereof.

         (j)    Possession. Actual possession and operating control of the
                ----------
Systems;

         (k)    Conditions Precedent. To the extent not described above, all
                --------------------
items set forth in Section 7.1;

         (l)    Evidence of Necessary Actions. Evidence reasonably satisfactory
                -----------------------------
to Buyer that Seller and the Seller Subsidiaries have taken all action necessary
to authorize the execution of this Agreement and the consummation of the
transactions contemplated hereby; and

         (m)    Other. Such other documents and instruments as shall be
                -----
necessary or reasonably requested by Buyer to effect the intent of this
Agreement and consummate the transactions contemplated hereby.

     Section 8.3 Buyer's Obligations. At Closing Buyer shall deliver or cause to
                 -------------------
be delivered to Seller the following:

         (a)    Purchase Price. The Purchase Price, as adjusted in accordance
                --------------
with Section 2.5 of this Agreement;

         (b)    Officer's Certificate. The certificate described in Section
                ---------------------
7.2(c);

         (c)    Buyer's Counsel Opinion. Buyer's counsel opinion described in
                -----------------------
Section 7.2(f);

         (d)    Operating Agreement. Executed counterparts of the Operating
                -------------------
Agreement.

         (e)    Programming Agreement; CSG Assignments. If Buyer has elected to
                --------------------------------------
enter into the Programming Agreement and/or CSG Assignments, executed
counterparts thereof.

         (f)    Conditions Precedent. To the extent not described above, all
                --------------------
items set forth in Section 7.2;

         (g)    Evidence of Necessary Actions. Evidence reasonably satisfactory
                -----------------------------
to Seller that Buyer has taken all necessary action necessary to authorize the
execution of this Agreement and the consummation of the transactions
contemplated hereby; and

                                       43

<PAGE>
 
         (h)    Other. Such other documents and instruments as shall be
                -----
necessary or reasonably requested by Seller to effect the intent of this
Agreement and consummate the transactions contemplated hereby.


                                  Article 9.

                                  Termination
                                  -----------

     Section 9.1  Termination Events.  This Agreement may be terminated and the
                  ------------------
transactions contemplated hereby may be abandoned:

         (a)    at any time, by the mutual written agreement of Buyer and
Seller;

         (b)    by either Buyer or Seller upon written notice to the other, if
the other (the "Breaching Party") is in material breach or default of its
respective covenants, agreements, or other obligations herein, or if any of its
representations herein are not true and accurate in all material respects when
made or when otherwise required by this Agreement to be true and accurate;
provided, however, that (i) the Breaching Party is given prompt written notice
which provides a reasonably detailed explanation of the facts and circumstances
surrounding such breach or default and (ii) the Breaching Party is given 30 days
after receipt of such notice within which to cure such breach or default to the
reasonable satisfaction of the non-Breaching Party;

         (c)    by either Buyer or Seller upon written notice to the other, if
any conditions (other than those referred to in Section 9.1(b)) to its
obligations set forth in Sections 7.1 and 7.2, respectively, shall not have been
satisfied on or before the Outside Closing Date, for any reason other than a
material breach or default by such terminating party of its respective
covenants, agreements, or other obligations hereunder, or any of its
representations herein not being true and accurate in all material respects when
made or when otherwise required by this Agreement to be true and accurate;

         (d)    by either party if the terminating party is not in material
breach or default of the obligations hereunder and if Closing shall have not
occurred by the Outside Closing Date, upon written notice to the non-terminating
party at any time following such date; or

         (e)    as otherwise provided herein.

     Notwithstanding anything in this Section 9.1 to the contrary, if on the
Outside Closing Date, the Closing has not occurred solely because any required
notice period for Closing has not lapsed, such date shall be extended until the
lapse of such period.

     Section 9.2  Effect of Termination.
                  ---------------------

         (a)    Notwithstanding any other provision of this Section 9.2, if the
transactions contemplated by this Agreement are terminated and abandoned as
provided herein: (i) each party shall pay the costs and expenses incurred by it
in connection with

                                       44

<PAGE>
 
this Agreement, and no party (or any of its officers, directors, employees,
agents (or representatives or shareholders) shall be liable to any other party
for any costs, expenses or damages except as expressly specified herein; (ii)
each party shall redeliver all documents, work papers and other material of the
other party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing the same;
(iii) all confidential information received by either party hereto with respect
to the business of the other party or any of its Affiliates shall be treated in
accordance with Section 6.10 hereof; and (iv) neither party hereto shall have
any liability or further obligation to the other party to this Agreement except
(x) as stated in Sections 6.10, 9.2, 10.2, 12.1 and 12.8; (y) as stated in
subparagraphs (i) and (ii) of this Section 9.2(a); and (z) to the extent
applicable, as set forth in Sections 9.2(b) and (c) below.

         (b)    If both (i) this Agreement is terminated pursuant to Section 9.1
by any party for any reason and (ii) (a) if Seller shall be in breach in a
material respect of any of its representations and warranties made herein or its
covenants or agreements made herein or (b) neither Buyer nor Seller shall be in
breach in a material respect of any of their representations and warranties made
herein or their covenants or agreements made herein, then and in that event, the
Escrow Deposit (and all interest and earnings thereon) shall be returned to
Buyer and if Seller shall be in breach in a material respect of any of its
representations and warranties made herein or its covenants or agreements made
herein, then and in that event, Buyer shall have the right to seek all remedies
available to it at law or equity, including the right to seek specific
performance and/or monetary damages. In recognition of the unique character of
the property to be sold hereunder and the damages which Buyer will suffer in the
event of a breach by Seller, Seller hereby waives any defense that Buyer has any
adequate remedy at law for the breach of this Agreement by Seller. In the event
of such breach by Seller which results in the filing of a lawsuit by Buyer for
damages, and Buyer shall prevail in such lawsuit, Buyer shall be entitled to
reimbursement by the Seller of reasonable legal fees and expenses actually
incurred by Buyer.

         (c)    If both (i) this Agreement is terminated pursuant to Section 9.1
by any party for any reason and (ii) if Buyer shall be in breach in a material
respect of its representations and warranties made herein or its covenants or
agreements made herein, all conditions precedent set forth in Section 7.1 have
been satisfied, and Seller stands ready, willing and able to perform its
obligations under this Agreement, then and in that event, Seller shall have the
right to receive the Escrow Deposit (and interest and earnings thereon) as
liquidated damages and as the exclusive remedy of Seller (which aggregate amount
the parties agree is a reasonable estimate of the damages that will be suffered
by Seller and does not constitute a penalty, the parties hereby acknowledging
the inconvenience and nonfeasibility of otherwise obtaining an adequate remedy).
Notwithstanding anything in this Agreement to the contrary, except for the right
to receive the Escrow Deposit (and interest and earnings) in accordance with and
subject to the provisions of this Agreement, Seller shall not have any right
against Buyer (or any of its officers, directors, shareholders, employees,
agents, representatives or Affiliates) and neither Buyer nor any of its
officers, directors, shareholders, employees, partners,

                                       45

<PAGE>
 
agents or Affiliates shall have any liability to the Seller for any breach of
this Agreement by Buyer.

                                  Article 10.

                                   Remedies
                                   --------

     Section 10.1 Remedies Cumulative. Subject to the other provisions of this
                  -------------------
Agreement limiting any remedies of the parties under certain circumstances,
including Section 9.2(c) hereof, prior to Closing, all rights and remedies under
this Agreement are cumulative of, and not exclusive of, any rights or remedies
otherwise available, and the exercise of any of such rights or remedies shall
not bar the exercise of any other rights or remedies. After Closing, the
parties' respective rights and remedies with respect to any material breach or
default of the covenants, agreements or obligations hereunder shall be limited
to those set forth in Article 11 of this Agreement.

     Section 10.2 Attorneys' Fees. Subject to the other provisions of this
                  ---------------
Agreement limiting any remedies of the parties under certain circumstances,
including Section 9.2(c) hereof, in the event of any Litigation between Seller
and Buyer with respect to this Agreement or the transactions contemplated
hereby, the party prevailing under such Litigation shall be entitled, as part of
the Judgment rendered in such Litigation, to recover from the other party its
reasonable attorneys' fees and costs and expenses in such litigation.


                                  Article 11.

                                Indemnification
                                ---------------

     Section 11.1 Indemnification by Seller. From and after Closing, Seller
                  -------------------------
shall indemnify and hold harmless Buyer, its Affiliates, and their respective
members, partners, shareholders, officers and directors, employees, agents, and
representatives, and any Person claiming by or through any of them, as the case
may be, from and against any and all Losses arising out of or resulting from:

         (a)    any representations and warranties made by Seller in this
Agreement or in any document, instrument or certificate delivered in connection
herewith not being true and accurate in all material respects when made or when
required by this Agreement to be true and accurate;

         (b)    any failure by Seller to perform, or to cause any Seller
Subsidiary to perform, in all material respects any of its covenants,
agreements, or obligations in this Agreement or in any document, instrument or
certificate delivered in connection herewith;

         (c)    all liabilities and obligations arising out of or relating to
     the operation of the Systems prior to the Adjustment Time;

                                       46

<PAGE>
  
         (d)    except in each case as may expressly constitute Assumed
Obligations and Liabilities pursuant to Section 2.3(d) and except in each case
as provided in Section 6.9 (if and to the extent applicable), any rate refund
liability to subscribers of the Systems arising out of or attributable to rates
for cable service to subscribers charged by Seller or any Seller Subsidiary
prior to the Adjustment Time and any losses arising out of or attributable to
Seller's or any Seller Subsidiary's failure to fully and timely perform its
obligations under the Social Contract which are required to be performed prior
to the Adjustment Time;

         (e)    the Employee Obligations;

         (f)    Taxes for which Seller is liable under Section 3.3 hereof; and

         (g)    the employment by Seller or any Affiliate of Seller, or services
rendered to Seller or any Affiliate of Seller by, any finder, broker, agency or
other intermediary, in connection with the transactions contemplated hereby, or
any allegation of any such employment or services.

     Section 11.2 Indemnification by Buyer. From and after Closing, Buyer shall
                  ------------------------
indemnify and hold harmless Seller, its Affiliates, and their respective
shareholders, partners, officers and directors, employees, agents, and
representatives, and any Person claiming by or through any of them, as the case
may be, from and against any and all Losses arising out of or resulting from:

         (a)    any representations and warranties made by Buyer in this
Agreement or in any document, instrument or certificate delivered in connection
herewith not being true and accurate in all material respects when made or when
required by this Agreement to be true and accurate;

         (b)    any failure by Buyer to perform in all material respects any of
its covenants, agreements, or obligations in this Agreement or in any document,
instrument or certificate delivered in connection herewith;

         (c)    the Assumed Obligations and Liabilities;

         (d)    Taxes for which Buyer is liable under Section 3.3 hereof; and

         (e)    the employment by Buyer or any Affiliate of Buyer, or services
rendered to Buyer or any Affiliate of Buyer by, any finder, broker, agency or
other intermediary, in connection with the transactions contemplated hereby, or
any allegation of any such employment or services.

     Section 11.3  Indemnified Third Party Claim.
                   -----------------------------   

         (a)    If any Person not a party to this Agreement shall make any
demand or claim or file or threaten to file or continue any Litigation with
respect to which Buyer or Seller is entitled to indemnification pursuant to
Sections 11.1 or 11.2, respectively,

                                       47

<PAGE>
 
then within ten days after notice (the "Notice") by the party entitled to such
indemnification (the "Indemnitee") to the other (the "Indemnitor") of such
demand, claim or Litigation, the Indemnitor shall have the option, at its sole
cost and expense, to retain counsel for the Indemnitee (which counsel shall be
reasonably satisfactory to the Indemnitee), to defend any such Litigation.
Thereafter, the Indemnitee shall be permitted to participate in such defense at
its own expense, provided that, if the named parties to any such Litigation
(including any impleaded parties) include both the Indemnitor and the Indemnitee
or, if the Indemnitor proposes that the same counsel represent both the
Indemnitee and the Indemnitor and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them, then the Indemnitee shall have the right to retain its own counsel
at the cost and expense of the Indemnitor, unless the Indemnitor shall
acknowledge in writing its indemnity obligation, in which event the retention by
Indemnitee of its own counsel shall be at its cost and expense. If the
Indemnitor shall fail to respond within ten days after receipt of the Notice,
the Indemnitee may retain counsel and conduct the defense of such Litigation as
it may in its sole discretion deem proper, at the sole cost and expense of the
Indemnitor.

         (b)    The Indemnitee shall provide reasonable assistance to the
Indemnitor and provide access to its books, records and personnel as the
Indemnitor reasonably requests in connection with the investigation or defense
of the indemnified Losses. The Indemnitor shall promptly upon receipt of
reasonable supporting documentation reimburse the Indemnitee for out-of-pocket
costs and expenses incurred by the latter in providing the requested assistance.

         (c)    With regard to Litigation of third parties for which Buyer or
Seller is entitled to indemnification under Sections 11.1 or 11.2, such
indemnification shall be paid by the indemnifying party upon: (i) the entry of a
Judgment against the Indemnitee and the expiration of any applicable appeal
period; (ii) the entry of an unappealable Judgment or final appellate Judgment
against the Indemnitee; or (iii) a settlement with the consent of the
Indemnitor, which consent shall not be unreasonably withheld, provided that no
such consent need be obtained if the Indemnitor fails to respond to the Notice
as provided in Section 11.3(a). Notwithstanding the foregoing, provided that
there is no dispute as to the applicability of indemnification, expenses of
counsel to the Indemnitee shall be reimbursed on a current basis by the
Indemnitor if such expenses are a liability of the Indemnitor.

     Section 11.4 Determination of Indemnification Amounts and Related Matters.
                  ------------------------------------------------------------

         (a)    Seller's liability under Section 11.1(a) shall be limited to
Losses exceeding $500,000 in the aggregate, and Seller's liability under
Sections 11.1(b), 11.1(c), 11.1(d) and 11.1(e) shall be limited to Losses
exceeding $100,000 in the aggregate (each, a "Deductible"), and Seller shall
have no liability under Section 11.1 for Losses constituting the Deductible.
Seller's liability under Section 11.1(a) shall be limited to Losses not
exceeding $26,000,000 in the aggregate. Notwithstanding anything to the contrary
in the foregoing, such limitations in this Section 11.4(a) shall

                                       48

<PAGE>
 
not apply to claims made by Buyer with respect to or pursuant to
adjustments to the Purchase Price.

         (b)    In calculating amounts payable to an Indemnitee hereunder, the
amount of the indemnified Losses shall be reduced by the amount of any insurance
proceeds paid to the Indemnitee for such Losses.

         (c)    Subject to the provisions of Section 11.3, all amounts payable
by the Indemnitor to the Indemnitee in respect of any Losses under Sections 11.1
or 11.2 shall be payable by the Indemnitor as incurred by the Indemnitee.

     Section 11.5 Time and Manner of Certain Claims . The representations and
                  ---------------------------------
warranties, and covenants and agreements that are to be performed on or prior to
Closing, of Buyer and Seller in this Agreement shall survive Closing for a
period of twelve months (the "Survival Period") except for representations,
warranties and covenants relating to title, ownership and Taxes, which shall
survive until the expiration of the applicable statute of limitations, and other
covenants and agreements which shall survive until fully performed, and Buyer's
and Seller's rights to make claims based thereon shall likewise expire and be
extinguished on such dates. Neither Seller nor Buyer shall have any liability
under Sections 11.1(a) or 11.2(a), respectively, unless a claim for Losses for
which indemnification is sought thereunder is asserted by the party seeking
indemnification by written notice to the party from whom indemnification is
sought within the Survival Period.

                                  Article 12.

                           Miscellaneous Provisions
                           ------------------------

     Section 12.1 Expenses. Except as otherwise specifically contemplated
                  --------
hereunder, each of the parties shall pay its own expenses and the fees and
expenses of its counsel, accountants, other experts and consultants in
connection with this Agreement.

     Section 12.2 Waivers. No action taken pursuant to this Agreement, including
any investigation by or on behalf of any party hereto, shall be deemed to
constitute a waiver by the party taking the action of compliance with any
representation, warranty, covenant or agreement contained herein or in any
document delivered pursuant hereto. The waiver by any party hereto of any
condition or of a breach of another provision of this Agreement shall be in
writing and shall not operate or be construed as a waiver of any other condition
or subsequent breach. The waiver by any party of any of the conditions precedent
to its obligations under this Agreement shall not preclude it from seeking
redress for breach of this Agreement other than with respect to the condition so
waived.

     Section 12.3 Notices. All notices, requests, demands, applications,
                  -------
services of process, and other communications which are required to be or may be
given under this

                                       49

<PAGE>
 
Agreement shall be in writing and shall be deemed to have been duly given if
sent by facsimile transmission, answer back requested, delivered by overnight or
other courier service, or mailed, certified first class mail, postage prepaid,
return receipt requested, to the parties hereto at the following addresses:


<TABLE>
     <S>                      <C>

     To Seller:               TWI Cable Inc.
                              290 Harbor Drive
                              Stamford, CT  06902
                              Attn: Bonnie J. Blecha
                              Facsimile:  (203) 328-0691

     Copies:                  Holland & Hart
                              P.O. Box  8749
                              555 17th Street
                              Suite 3200
                              Denver, CO  80201-8749 (Mail)
                              80202 (Delivery)
                              Attn: Davis O. O'Connor, Esq.
                              Facsimile:  (303) 295-8261

     Buyer:                   Renaissance Media Holdings LLC
                              One Cablevision Center, Suite 100
                              Ferndale, NY  12734
                              Attn: Mr. Frederick Schulte
                              Facsimile:  (914) 295-2601

     Copies:                  Dow Lohnes & Albertson PLCC
                              1200 New Hampshire Avenue, N.W.
                              Suite 800
                              Washington, D.C.  20036
                              Attn:  John T. Byrnes, Esq.
                              Facsimile:  (202) 776-2222

                              Morgan Stanley Capital Partners
                              1221 Avenue of the Americas
                              New York, NY  10020
                              Attn:  Mr. Lawrence B. Sorrel
                              Facsimile:  (212) 762-8282

                              Davis Polk & Wardwell
                              450 Lexington Avenue
                              New York, NY  10017
                              Attn:  John W. Buttrick, Esq.
                              Facsimile:  (212) 450-4800
</TABLE>


                                       50

<PAGE>
 
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section.  Such notice shall be effective,
(i) if sent by facsimile transmission, when answer back is received, or (ii) if
mailed or sent by courier, upon the date of delivery or refusal as shown by the
return receipt therefor.

     Section 12.4 Entire Agreement; Amendments. This Agreement and the Schedules
                  ----------------------------
and Exhibits hereto embody the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect thereto. This Agreement may not be
modified orally, but only by an agreement in writing signed by the party or
parties against whom any waiver, change, amendment, modification, or discharge
may be sought to be enforced.

     Section 12.5 Binding Effect; Benefits; Assignments. This Agreement shall
                  -------------------------------------
inure to the benefit of and shall be binding upon the parties hereto and their
respective heirs, legal representatives, successors, and permitted assigns.
Neither Buyer nor Seller shall assign this Agreement or delegate any of its
duties hereunder to any other Person without the prior written consent of the
other, except that (a) Seller may assign this Agreement and delegate its duties
hereunder to any Affiliate without the consent of Buyer, provided that such
assignment shall not be permitted without the consent of Buyer if such
assignment would impair, hinder or delay the consummation of the transactions
contemplated hereby; and further provided that no such assignment shall relieve
Seller or Guarantor, as appropriate, of liability hereunder, and (b) Buyer (1)
may assign its obligations and rights under this Agreement, including the
obligations in respect of the Assumed Obligations and Liabilities and the rights
to receive the Bill of Sale and Assignment, Deeds, title certificates and bills
of sale relating to vehicles, and other instruments of conveyance hereunder, and
possession of the Assets, and the rights to indemnity, to one or more direct or
indirect wholly-owned Affiliates without the consent of Seller; provided that
such Affiliate or Affiliates agree(s) in writing to assume, pay, perform and
discharge the Assumed Obligations and Liabilities and to otherwise be bound by
the terms and conditions hereof; provided further that no such assignment shall
relieve Buyer of liability hereunder prior to Closing, but such assignment shall
relieve Buyer of all liabilities hereunder on and after the Closing; and
provided further that Buyer may not assign its obligation to issue the LLC
Interest to Seller or the right to receive a portion of the Assets from Seller
in consideration of the LLC Interest, and (2) may assign and/or delegate all or
any portion of its rights under this Agreement as collateral without the consent
of Seller.

     Section 12.6 Headings. The Section and other headings contained in this
                  --------
Agreement are for reference purposes only and will not affect the meaning of
interpretation of this Agreement.

     Section 12.7 Counterparts. This Agreement may be executed in any number of
                  ------------
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.

                                       51

<PAGE>
 
     Section 12.8 Publicity. Seller and Buyer shall consult with and cooperate
                  ---------
with the other with respect to the content and timing of all press releases and
other public announcements, and any oral or written statements to Seller's
employees concerning this Agreement and the transactions contemplated hereby.
Neither Seller nor Buyer shall make any such release, announcement, or
statements without the prior written consent of the other, which shall not be
unreasonably withheld or delayed; provided, however, that Seller or Buyer may at
any time make any announcement required by Legal Requirements so long as such
party, promptly upon learning of such requirement, notifies the other of such
requirement and consults with the other in good faith with respect to the
wording of such announcement.

     Section 12.9 Governing Law. The validity, performance, and enforcement of
                  -------------
this Agreement and all transaction documents, unless expressly provided to the
contrary, shall be governed by the laws of the State of New York without giving
effect to the principles of conflicts of law of such state. Buyer and Seller
agree that the federal and state courts located in the State of New York shall
have subject matter jurisdiction to entertain any action in connection with this
Agreement and, by execution hereof, voluntarily submit to personal jurisdiction
of such courts.

     Section 12.10 Third Parties; Joint Ventures. This Agreement constitutes an
                   -----------------------------
agreement solely among the parties hereto, and, except as otherwise provided
herein, is not intended to and will not confer any rights, remedies,
obligations, or liabilities, legal or equitable, including any right of
employment, on any Person (including any employee or former employee of Seller
or any Seller Subsidiary) other than the parties hereto and their respective
successors, or assigns, or otherwise constitute any Person, including any of
Seller or any Seller Subsidiary's employees, a third party beneficiary under or
by reason of this Agreement. Nothing in this Agreement, expressed or implied, is
intended to or shall constitute the parties hereto partners or participants in a
joint venture.

     Section 12.11 Construction. This Agreement has been negotiated by Buyer
                   ------------
and Seller and their respective legal counsel, and legal or equitable principles
that might require the construction of this Agreement or any provision of this
Agreement against the party drafting this Agreement shall not apply in any
construction or interpretation of this Agreement.

     Section 12.12  Risk of Loss.
                    ------------ 

         (a)    The risk of any loss, damage or destruction to the Assets
resulting from fire, theft or any other casualty (except reasonable wear and
tear) shall be borne by Seller at all times prior to the Adjustment Time. It is
expressly understood and agreed that in the event of any material loss or damage
to any material portion of the Assets from fire, theft or any other casualty
(except reasonable wear and tear), Seller shall notify Buyer of same in writing
immediately. Such notice shall specify with particularity the loss or damage
incurred, the cause thereof, if known or reasonably ascertainable, and the
insurance coverage related thereto.

                                       52

<PAGE>
 
         (b)    Notwithstanding any other provision contained in this Agreement:

                (i)   in the event there is damage to the Assets which exceeds
$3,000,000 and which is not repaired, replaced or restored prior to a date which
is 90 days after the Outside Closing Date, Buyer, at its sole option upon
written notice to Seller: (A) may elect to consummate the Closing and accept the
Assets in their then current condition, in which event Seller shall assign or
pay to Buyer all proceeds of insurance theretofore received or to be received
covering the damaged Assets, and the Cash Consideration shall be reduced by an
amount equal to any applicable insurance deductible or retention, or (B)
terminate this Agreement, in which event Buyer and Seller shall stand fully
released and discharged of and from any and all obligations hereunder, except as
provided in Section 9.2.

              (ii)   in the event there is damage to the Assets which is less
than $3,000,000, Seller shall have the right to postpone Closing for a period of
up to 60 days and take steps to repair, replace or restore the damaged Assets.
At the end of such 60-day period or such earlier date as the parties may agree,
the parties shall, subject to satisfaction or waiver of the conditions set forth
in Article 7, proceed to Closing. If the damage to the Assets has not been fully
repaired, replaced or restored to the reasonable satisfaction of Buyer as of the
postponed Closing Date, Seller shall (A) reimburse Buyer, promptly after receipt
of invoices with supporting documentation, for all expenses reasonably incurred
by Buyer after Closing in using its commercially reasonable efforts to repair,
replace or restore such damaged Assets, and (B) pay Buyer an amount equal to the
product of (y) the Subscriber Valuation multiplied by (z) the number of Lost
Subscribers, if any. In determining whether the expenses referenced in
subsection (b)(ii)(A) of this Section 12.12 were reasonably incurred, the
parties shall take into account that time is of the essence in effecting such
repair, replacement or restoration and shall include extraordinary items such as
overtime. For purposes of this subsection, this purpose, a "Lost Subscriber"
shall mean a Subscriber (C) whose cable television service is adversely affected
by the damage to the Assets, (D) at whom Buyer has directed commercially
reasonable marketing efforts, and (E) who is not a Subscriber as of a date which
is 60 days after the date Buyer has fully repaired, restored or replaced the
damaged Assets; provided that for the purpose of this Section 12.12(b)(ii)(E),
subsection (i) of the definition of Individual Subscriber and subsection
(iii)(a) of the definition of Subscriber Equivalent shall be amended to delete
the requirement that a Subscriber must have been a subscriber for at least one
full month.


                     [This space intentionally left blank.]

                                       53

<PAGE>
 
     Buyer and Seller have executed this Agreement as of the date first written
above.


                              BUYER

                              RENAISSANCE MEDIA HOLDINGS LLC,
                              a Delaware limited liability company

                              By:  Morgan Stanley Capital Partners III,
                                   L.P., Member

                              By:  MSCP III, L.P., its general partner

                              By:  Morgan Stanley Capital Partners III,
                                   Inc., a general partner

                              By:  /s/ Lawrence B. Sorrel
                                   ------------------------------------
                                   Name:  Lawrence B. Sorrel
                                   Title: Managing Director

                              By:  /s/ Michael M. Janson
                                   ------------------------------------
                                   Name:   Michael Janson
                                   Title:  Managing Director



                              SELLER


                              TWI CABLE INC., A DELAWARE CORPORATION


                              BY: /s/ David E. O'Hayre
                                  -------------------------------------
                                  NAME:   David E. O'Hayre
                                  TITLE:  President

<PAGE>
 
                        LIST OF SCHEDULES AND EXHIBITS

Schedule 1.2            Additional Permitted Liens
Schedule 2.1(a)         Tangible Personal Property
Schedule 2.1(b)         Real Property
Schedule 2.1(c)         Franchises
Schedule 2.1(d)         Licenses
Schedule 2.1(e)         System Contracts
Schedule 2.2            Excluded Assets
Schedule 4.3            Buyer No Conflicts; Consents
Schedule 5.3            Seller No Conflicts; Consents
Schedule 5.4            Title to Assets
Schedule 5.5            Franchises, Licenses, and System Contracts
Schedule 5.6            Litigation
Schedule 5.8            System Information
Schedule 5.9            Compliance with Legal Requirements
Schedule 5.10           Financial Information
Schedule 5.12           Employees
Schedule 5.14           Environmental Matters
Schedule 6.1(g)         Rates

Exhibit A               LLC Terms Sheet
Exhibit B               Form of CSG Assignment
Exhibit C               Form of Seller's Counsel Opinion
Exhibit D               Form of Seller's FCC Counsel Opinion
Exhibit E               Form of Buyer's Counsel Opinion
Exhibit F               Form of Bill of Sale, Assignment and Assumption
                          Agreement