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S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/01/1999
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                                                                  Exhibit 10.39 


                                                             September 29, 1999




Charter Communications Holding Company, LLC
12444 Powerscourt Drive, Suite 400
St. Louis, Missouri 63131

Attention:  Eloise Engman

                  Re: Proposed Financing

Ladies and Gentlemen:

                  Charter Communications Holding Company, LLC ("CHARTER") has
advised Bank of Montreal, Chicago Branch ("BANK OF MONTREAL") that in connection
with Charter's acquisition (the "ACQUISITION") of all of the membership
interests in Avalon Cable LLC, a Delaware limited liability company
("HOLDINGS"), which in turn owns all of the membership interests in Avalon Cable
of New England LLC, a Delaware limited liability company ("AVALON NEW ENGLAND"),
and Avalon Cable of Michigan LLC, a Delaware limited liability company ("AVALON
MICHIGAN"; jointly and severally with Avalon New England (or their respective
successors), the "BORROWERS"), the Borrowers wish to obtain $300,000,000 of
credit facilities (such credit facilities, as described in the Senior Facilities
Term Sheet (the "SENIOR FACILITIES TERM SHEET") attached hereto and incorporated
herein by this reference, are the "SENIOR FACILITIES"). The proceeds of the
Senior Facilities will be used in connection with the Acquisition, to pay
related fees and expenses and for other
 general purposes.

                  Bank of Montreal is pleased to advise you that it is willing
to act as the lead arranger and administrative agent (in such capacity,
"ADMINISTRATIVE AGENT") for the Lenders in respect of the Senior Facilities, and
will perform the duties and exercise the authority customarily performed and
exercised by it in such roles. Such duties shall include the use of commercially
reasonable efforts to assemble a syndicate of financial institutions other than
Bank of Montreal identified by us in consultation with you (together with Bank
of Montreal, the "LENDERS") to provide the necessary commitments for the Senior
Facilities. You agree that no other agents, co-agents or arrangers will be
appointed and no other titles will be awarded in connection with the Senior
Facilities (except as otherwise provided in the Senior Facilities Term Sheet)
unless you and we shall so agree. You further agree to promptly inform each of
Loan 


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Pricing Corporation and Securities Data Corp. that Mercantile Bank shall not be
entitled to receive league table credit in connection with the Senior
Facilities.

                  Bank of Montreal is pleased to advise you of its commitment to
provide up to $50,000,000 of the entire $300,000,000 of Senior Facilities all
subject to the terms and conditions set forth herein. The Senior Facilities Term
Sheet sets forth the principal terms and conditions on and subject to which Bank
of Montreal is willing to make available its portion of the Senior Facilities.
It is a condition to Bank of Montreal's commitment hereunder that the portion of
the Senior Facilities not being provided by Bank of Montreal shall be provided
by the other Lenders.

                  We intend to commence syndication efforts immediately, and you
agree actively to assist us in completing a syndication satisfactory to us. Such
assistance shall include (a) your using commercially reasonable efforts to
ensure that the syndication efforts benefit materially from the existing lending
relationships of Charter and its affiliates, (b) direct contact between the
proposed Lenders and senior management and advisors of Charter and its
affiliates, (c) assistance in the preparation of a Confidential Information
Memorandum and other marketing materials to be used in connection with the
syndication and (d) the hosting, with us, of one or more conference calls or
meetings with prospective Lenders.

                  Bank of Montreal will manage all aspects of the syndication,
including decisions as to the selection of institutions to be approached and
when they will be approached, when their commitments will be accepted, which
institutions will participate, the allocations of the commitments among the
Lenders and the amount and distribution of fees among the Lenders, in each case
in consultation with you. To assist us in our syndication efforts, you have
provided to us on or prior to the date hereof certain information (including
financial information and financial projections (as supplemented in the manner
referred to in this sentence, such financial projections are referred to herein
as the "PROJECTIONS")) with respect to the cable systems (collectively, the
"SYSTEMS") currently owned by the Borrowers and the transactions contemplated
hereby, and you hereby agree promptly to prepare and provide to us all
additional information with respect thereto as Bank of Montreal may reasonably
request in connection with the arrangement and syndication of the Senior
Facilities. You hereby represent and covenant that (a) all information other
than the Projections (the "INFORMATION") that has been or will be made available
to any of us by you or any of your representatives, as supplemented from time to
time prior to the Closing Date (as defined in the Senior Facilities Term Sheet),
shall be complete and correct in all material respects and does not or will not,
as so supplemented, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements are made and (b) the Projections that have been or will be made
available to any of us by you or any of your representatives have been or will
be prepared in good faith based upon reasonable assumptions, it being recognized
by Bank of Montreal that the Projections are not to be viewed as fact and that
actual results during the period or periods covered by the Projections may
differ from the projected results set forth therein by a material amount. You
understand that in arranging and syndicating the Senior Facilities Bank of
Montreal may use and rely on the Information and Projections without independent
verification thereof.


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                  As consideration for our commitments hereunder and our
agreements to perform the services described herein, you agree to pay to us the
nonrefundable fees as set forth in the Senior Facilities Term Sheet and in the
Fee Schedule (the "FEE SCHEDULE") attached hereto and incorporated herein by
reference, in the amounts and at the times set forth therein.

                  Bank of Montreal shall be entitled, with your consent (which
shall not be unreasonably withheld), to change the pricing, terms and structure
of the Senior Facilities if Bank of Montreal determines that such changes are
advisable to insure a successful syndication of the Senior Facilities. The
commitment hereunder is subject to the agreements in this paragraph.

                  Bank of Montreal's commitment hereunder and agreement to
perform the services described herein are subject to (i) Bank of Montreal's
completion of and satisfaction in all respects with a due diligence
investigation of Holdings, Borrowers and the Systems, (ii) there not occurring
or becoming known to Bank of Montreal any change, occurrence or development that
could reasonably be expected to have a material adverse effect on the business,
operations, property or condition (financial or otherwise) of Holdings,
Borrowers and the Systems, (iii) Bank of Montreal not becoming aware after the
date hereof of any information or other matter (including any matter relating to
financial models and underlying assumptions relating to the Projections) that in
Bank of Montreal's judgment is inconsistent in a material and adverse manner
with any information or other matter disclosed to Bank of Montreal prior to the
date hereof, (iv) there not having occurred a material disruption of or material
adverse change in conditions in the financial, banking or capital markets that,
in Bank of Montreal's judgment, could impair the syndication of the Senior
Facilities, (v) Bank of Montreal's satisfaction that prior to and during the
syndication of the Senior Facilities, except as otherwise agreed by Bank of
Montreal, there shall be no competing offering, placement or arrangement of any
debt securities or bank financing by or on behalf of Charter, or by any of its
affiliates on behalf or in respect of Charter, other than the contemplated
credit facilities for CC VI Operating Company, LLC so long as the syndication
thereof is coordinated with the syndication of the Senior Facilities in a manner
reasonably satisfactory to Bank of Montreal, (vi) the negotiation, execution and
delivery on or before March 1, 2000 of definitive documentation with respect to
the Senior Facilities satisfactory to Bank of Montreal, and (vii) the other
conditions set forth or referred to in the Senior Facilities Term Sheet. The
terms and conditions of Bank of Montreal's commitment hereunder and of the
Senior Facilities are not limited to those set forth herein and in the Senior
Facilities Term Sheet. Those matters that are not covered by the provisions
hereof and of the Senior Facilities Term Sheet are subject to the approval and
agreement of Bank of Montreal and Borrowers.

                  You agree (a) to indemnify and hold harmless Bank of Montreal,
their affiliates and their respective officers, directors, employees, advisors,
and agents (each, an "INDEMNIFIED PERSON") from and against any and all losses,
claims, damages and liabilities to which any such indemnified person may become
subject arising out of or in connection with this letter (this "COMMITMENT
LETTER"), the Senior Facilities, the use of the proceeds thereof, the
Acquisition or any related transaction or any claim, litigation, investigation
or proceeding relating to any of the foregoing, regardless of whether any
indemnified person is a party thereto, and to reimburse each indemnified person
upon demand for any legal or other expenses incurred in connection with


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investigating or defending any of the foregoing, provided that the foregoing
indemnity will not, as to any indemnified person, apply to losses, claims,
damages, liabilities or related expenses to the extent they are found by a
final, non-appealable judgment of a court to arise from the willful misconduct
or gross negligence of such indemnified person, and (b) to reimburse Bank of
Montreal and their affiliates on demand for all reasonable out-of-pocket
expenses (including due diligence expenses, syndication expenses, rating agency
fees and expenses, and reasonable fees, charges and disbursements of counsel)
incurred directly in connection with the Senior Facilities and any related
documentation (including this Commitment Letter and the definitive financing
documentation) or the administration, amendment, modification or waiver thereof.
No indemnified person shall be liable for any damages arising from the
unauthorized interception by others of Information or other materials obtained
through electronic, telecommunications or other information transmission systems
or for any special, indirect, consequential or punitive damages in connection
with the Senior Facilities.

                  You acknowledge that Bank of Montreal and its affiliates (the
term "BANK OF MONTREAL" as used below in this paragraph being understood to
include such affiliates) may be providing debt financing, equity capital or
other services (including financial advisory services) to other companies in
respect of which you may have conflicting interests regarding the transactions
described herein and otherwise. Bank of Montreal shall not use confidential
information obtained from you by virtue of the transactions contemplated by this
Commitment Letter or its other relationships with you in connection with the
performance by Bank of Montreal of services for other companies, and Bank of
Montreal will not furnish any such information to other companies. You also
acknowledge that Bank of Montreal has no obligation to use in connection with
the transactions contemplated by this Commitment Letter, or to furnish to you,
confidential information obtained from other companies.

                  This Commitment Letter shall not be assignable by you without
the prior written consent of Bank of Montreal (and any purported assignment
without such consent shall be null and void), is intended to be solely for the
benefit of the parties hereto and Borrowers and is not intended to confer any
benefits upon, or create any rights in favor of, any person other than the
parties hereto and Borrowers. This Commitment Letter may not be amended or
waived except by an instrument in writing signed by you and Bank of Montreal.
This Commitment Letter may be executed in any number of counterparts, each of
which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. This Commitment Letter shall be governed
by, and construed in accordance with, the laws of the State of New York.

                  This Commitment Letter is delivered to you on the
understanding that neither this Commitment Letter, the Senior Facilities Term
Sheet or the Fee Schedule nor any of their terms or substance shall be
disclosed, directly or indirectly, to any other person except (a) to the
officers, agents and advisors of Charter and Borrowers who are directly involved
in the consideration of this matter or (b) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law (in which case you
agree to inform us prior thereto), provided that the foregoing restrictions
shall cease to apply (except in respect of the Fee Schedule and its terms and
substance) after this Commitment Letter has been accepted by you.


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                  Bank of Montreal agrees to keep confidential all non-public
information provided to it by you pursuant to the transactions described herein
that is designated by you as confidential; provided that the foregoing shall not
prevent Bank of Montreal from disclosing any such information (a) on a
confidential basis, to any prospective Lender or any affiliate of any
prospective Lender, (b) to the officers, agents and advisors of Bank of Montreal
who are directly involved in the consideration of this matter, (c) to rating
agencies in connection with the rating of the Senior Facilities or (d) as may be
compelled in a judicial or administrative proceeding or as otherwise required by
law or by regulatory authorities (in which case Bank of Montreal agrees to
inform you prior thereto). We understand that you have asked us to regard as
confidential all non-public information previously provided to Bank of Montreal,
other than general information regarding the cable television industry.

                  The compensation, reimbursement, indemnification and
confidentiality provisions contained herein and in the Fee Schedule shall remain
in full force and effect regardless of whether definitive financing
documentation shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or any of the commitments hereunder,
provided that the immediately preceding paragraph shall be superseded by the
definitive documentation for the Senior Facilities.

                  If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Senior Facilities Term
Sheet and the Fee Schedule by returning to us executed counterparts hereof, not
later than 5:00 p.m., New York City time, on September 30, 1999. This offer will
automatically expire at such time in the event we have not received such
executed counterparts in accordance with the immediately preceding sentence.


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                  We are pleased to have been given the opportunity to assist
you in connection with this important financing.


                                       Very truly yours,

                                       BANK OF MONTREAL,
                                       CHICAGO BRANCH


                                       By  /s/ Mike Silverman
                                           _____________________________________
                                           Name:  Mike Silverman
                                           Title: Director



ACCEPTED AND AGREED TO AS OF
THE DATE FIRST ABOVE WRITTEN:

CHARTER COMMUNICATIONS
HOLDING COMPANY, LLC



By /s/ Eloise Engman
   ____________________________________
   Name:  Eloise Engman
   Title: Vice President, Finance & Acquisition 


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                                  FEE SCHEDULE



STRUCTURING FEE:    [text omitted pursuant to confidential treatment request
                    and filed separately with the Commission] payable to Bank of
                    Montreal, earned upon the date of your acceptance of the
                    Commitment Letter to which this Fee Schedule is attached and
                    payable on the Closing Date.

UPFRONT FEE:        (i) For Administrative Agent and each Co-Arranger (as such
                    terms are defined in the Senior Facilities Term Sheet; each,
                    an "AGENT"), the sum of (x) [text omitted pursuant to
                    confidential treatment request and filed separately with the
                    Commission] multiplied by such Agent's final allocated
                    commitment amount of the Senior Facilities on the Closing
                    Date plus (y) [text omitted pursuant to confidential
                    treatment request and filed separately with the Commission],
                    earned and payable to such Agent on the Closing Date, and
                    (ii) for each Lender (other than the Agents) that commits to
                    provide a portion of the Senior Facilities, a fee to be
                    determined which shall be earned and payable to such Lender
                    on its allocated commitment on the Closing Date.

AGENT'S FEE:        [text omitted pursuant to confidential treatment request
                    and filed separately with the Commission] annual fee payable
                    to the Administrative Agent in advance on the Closing Date
                    and each anniversary thereof.

All fees (or portions thereof), once paid, are non-refundable. Fees set forth
above are in addition to any fees, indemnities or reimbursements described in
the Senior Facilities Term Sheet or the Commitment Letter. All fees shall be
paid to the Administrative Agent for its own account or for distribution, as
appropriate, to the other Agents and Lenders, in each case as set forth on this
Fee Schedule.


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                         $300,000,000 CREDIT FACILITIES
                         AVALON CABLE OF NEW ENGLAND LLC
                          AVALON CABLE OF MICHIGAN LLC

                    Summary of Proposed Terms and Conditions

I.     Parties                      Avalon Cable of New England LLC, a Delaware
                                    limited liability company ("Avalon
                                    Borrowers: New England"), and Avalon Cable
                                    of Michigan LLC, a Delaware limited
                                    liability company ("Avalon Michigan"), or
                                    their respective successors, as joint and
                                    several borrowers (collectively, the
                                    "Borrowers").

Guarantors:                         Avalon Cable LLC, a Delaware limited
                                    liability company ("Holdings"), and each
                                    Borrower's direct and indirect domestic
                                    subsidiaries, other than "non-recourse"
                                    subsidiaries described in clause (e) under
                                    the heading "Negative Covenants" below
                                    (collectively, the "Guarantors"; the
                                    Borrowers and the Guarantors, collectively,
                                    are the "Loan Parties").

Lead Arranger and Book Runner:      Bank of Montreal (in such capacity, "Lead
                                    Arranger").

Administrative Agent:               Bank of Montreal (in such capacity, the
                                    "Administrative Agent").

Syndication Agents:                 First Union National Bank and PNC Bank,
                                    National Association (in such capacity,
                                    collectively, the "Syndication Agents").

Co-Documentation Agents:            Mercantile Bank and Bank of Montreal (in
                                    such capacity, collectively, the
                                    "Co-Documentation Agents").

Co-Arrangers:                       First Union National Bank, PNC Bank,
                                    National Association and Mercantile Bank (in
                                    such capacity, collectively, the
                                    "Co-Arrangers").

Lenders:                            A syndicate of banks, financial institutions
                                    and other entities selected in the
                                    syndication process (collectively, the
                                    "Lenders").



II.   Types and Amounts
      of Facilities

    1.  Term B Facilities

Amount and Tenor:                   Term B Loan Facility: A 9-year term loan
                                    facility (the "Term B Loan Facility") in an
                                    aggregate principal amount equal to
                                    $125,000,000 (the loans thereunder being the
                                    "Term B Loans"). The Term B Loans shall be
                                    repayable in quarterly installments in
                                    aggregate amounts for each year the Term B
                                    Loan Facility is outstanding (expressed as a
                                    percentage of the aggregate amount borrowed)
                                    as set forth below:


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<TABLE>
<CAPTION>
                Year                                   Amount
                ----                                   ------
<S>                                                    <C> 
                  4                                      1.0%
                  5                                      1.0%
                  6                                      1.0%
                  7                                      1.0%
                  8                                      1.0%
                  9                                     95.0%
</TABLE>


                                    In addition to the foregoing, the Credit
                                    Documentation (as defined below) will
                                    provide for additional term loans and/or
                                    revolving loan facilities, at the election
                                    of Borrowers (collectively, the "Incremental
                                    Facility"), in an aggregate principal amount
                                    of up to $75,000,000 (the loans thereunder
                                    are the "Incremental Loans"). The
                                    Incremental Facility shall not initially be
                                    effective but may be activated, in whole or
                                    in part, subject to certain limits, at any
                                    time prior to December 31, 2003 at the
                                    request of the Borrowers with consent
                                    required only from those Lenders (including
                                    new Lenders that are reasonably acceptable
                                    to the Administrative Agent and the
                                    Borrowers) that agree, in their sole
                                    discretion, to participate in such
                                    Incremental Facility. In the event that the
                                    Term B Loans are optionally prepaid or the
                                    Revolving Facility (as defined below) is
                                    optionally permanently reduced, up to
                                    $37,500,000 of the amount so prepaid or
                                    reduced may be applied to increase the
                                    $75,000,000 of incremental capacity
                                    described above. The Incremental Facility
                                    will be governed by the covenants,
                                    conditions to borrowing, interest periods,
                                    representations and warranties and events of
                                    default contained in the Credit
                                    Documentation; provided, however, that the
                                    weighted average life and final maturity
                                    shall not be less than that of the Revolving
                                    Facility.

Availability:                       The Term B Loans shall be made in a single
                                    drawing on the Closing Date (as defined
                                    below). If the Borrowers have not refinanced
                                    (with subordination terms satisfactory to
                                    the Lead Arranger) by March 31, 2008 their
                                    currently outstanding 9.375% Senior
                                    Subordinated Notes due December 1, 2008 (the
                                    "Senior Subordinated Notes") or Holdings'
                                    11.875% Senior Discount Notes due December
                                    1, 2008 (the "Senior Discount Notes"), the
                                    Term B Loan maturity will be accelerated to
                                    June 30, 2008.

Maturity:                           9 years from the Closing Date (subject to
                                    acceleration as described under the heading
                                    "Availability" above).


Purpose:                            The proceeds of the Term B Loans shall be
                                    used in connection with the Acquisition (as
                                    defined below) and for general purposes.

     2.  Revolving Facility

Amount and Tenor:                   8-1/2 year reducing revolving loan facility
                                    (the "Revolving Facility"; the commitments
                                    thereunder are the "Revolving Commitments";
                                    the Revolving Facility, the Term B
                                    Facilities and the Incremental Facility, if
                                    any, collectively, are the "Credit
                                    Facilities") in the amount of $175,000,000
                                    (the loans thereunder, together with (unless
                                    the context otherwise requires) the
                                    Swingline Loans referred to below, being the
                                    "Revolving Loans"). The Revolving
                                    Commitments shall be permanently reduced in
                                    quarterly installments in the aggregate
                                    amounts for each year 


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                                    the Revolving Facility is outstanding
                                    (expressed as a percentage of the aggregate
                                    amount of the original Revolving
                                    Commitments) as set forth below:


<TABLE>
<CAPTION>
                                             Year             Reduction
                                             ----             ---------
<S>                                                           <C> 
                                             4                   5.0%
                                             5                  15.0%
                                             6                  20.0%
                                             7                  22.0%
                                             8                  24.0%
                                             8-1/2              14.0%
</TABLE>


                                    The extensions of credit under the Revolving
                                    Facility shall be prepaid to the extent that
                                    the aggregate amount thereof exceeds the
                                    aggregate amount of the Revolving
                                    Commitments as so reduced. Subject to the
                                    terms and conditions described above,
                                    Lenders may make available to the Borrowers,
                                    at the Borrowers' request, one or more
                                    additional revolving loan facilities as part
                                    of the Incremental Facility.

Availability:                       The Revolving Facility shall be available on
                                    a revolving basis during the period
                                    commencing on the Closing Date and ending on
                                    the date that is 8-1/2 years after the
                                    Closing Date (subject to the following
                                    proviso, the "Revolving Termination Date"),
                                    subject to the Borrowers' compliance with
                                    the terms and conditions contained herein;
                                    provided that if the Borrowers have not
                                    refinanced (with subordination terms
                                    satisfactory to the Lead Arranger) by March
                                    31, 2008 their currently outstanding Senior
                                    Subordinated Notes or Senior Discount Notes,
                                    the Revolving Facility shall immediately
                                    become due and payable on such date.

Swingline Loans:                    A portion of the Revolving Facility not in
                                    excess of $15,000,000 shall be available for
                                    swing line loans (the "Swingline Loans")
                                    from the Administrative Agent on same-day
                                    notice. Any such Swingline Loans will reduce
                                    availability under the Revolving Facility on
                                    a dollar-for-dollar basis. Each Lender under
                                    the Revolving Facility shall acquire, under
                                    certain circumstances, an irrevocable and
                                    unconditional pro rata participation in each
                                    Swingline Loan.

Maturity:                           The Revolving Termination Date.

Purpose:                            The proceeds of the Revolving Loans shall be
                                    used in connection with the Acquisition and
                                    for general purposes, including permitted
                                    acquisitions.


III.    Certain Payment
        Provisions

Fees and Interest Rates:            As set forth on Annex I.

Optional Prepayments and            Loans may be prepaid on 3 business days'    
Commitment Reductions:              prior written notice in minimum amounts of  
                                    $500,000 for ABR Loans (as defined in Annex 
                                    I) and $1,000,000 for Eurodollar Loans (as  
                                    defined in Annex I). Revolving Commitments  
                                    may be reduced on 3 business days' prior    
                                    written notice in minimum amounts of        
                                    $1,000,000. Optional prepayments and        
                                    optional commitment reductions of each of   
                                    the Term B Loan Facility, the 

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                                    Revolving Facility and the Incremental
                                    Facility shall be applied ratably to the
                                    respective scheduled installments and
                                    scheduled reductions (as applicable)
                                    thereof. Optional prepayments of any term
                                    loans may not be reborrowed.
                                    
Mandatory Prepayments:              Loans shall be prepaid with 100% of the net
                                    cash proceeds of any sale or other
                                    disposition (including as a result of
                                    casualty or condemnation) by the Borrowers
                                    or any of their respective subsidiaries of
                                    any assets, excluding permitted asset
                                    exchanges where no cash consideration is
                                    received, sales of inventory or obsolete or
                                    worn-out property in the ordinary course of
                                    business and certain other exceptions.
                                    Proceeds described in this paragraph shall
                                    not be required to be applied to make
                                    prepayments if (i) the Borrowers identify a
                                    potential acquisition of assets in a
                                    permitted line of business and notify the
                                    Administrative Agent in writing of such
                                    acquisition within 12 months of the relevant
                                    disposition, (ii) such identified
                                    acquisition is consummated within 18 months
                                    of such disposition, and (iii) if such net
                                    cash proceeds arise from insurance
                                    settlements, the Borrowers redeploy such net
                                    cash proceeds within 270 days of receipt.

                                    Mandatory prepayments and mandatory
                                    commitment reductions of each of the Term B
                                    Loan Facility, the Revolving Facility and
                                    the Incremental Facility shall be applied
                                    ratably to the respective scheduled
                                    installments and scheduled reductions (as
                                    applicable) thereof. Mandatory prepayments
                                    of any term loans may not be reborrowed.

IV.   Collateral                    The obligations of each Loan Party in
                                    respect of the Credit Facilities, any
                                    interest rate protection agreements in
                                    respect thereof provided by any Lender (or
                                    any affiliate of a Lender) and any letters
                                    of credit provided by any Lender (or any
                                    affiliate of a Lender) outside of the Credit
                                    Facilities (subject, in the case of such
                                    letters of credit, to the limit referred to
                                    in clause (c) under the heading "Negative
                                    Covenants" below) shall be secured by a
                                    perfected first priority security interest
                                    in all equity interests or intercompany
                                    obligations held by Holdings, the Borrowers
                                    or any of the Guarantors (limited to equity
                                    interests and intercompany obligations of
                                    the Borrowers in the case of pledges made by
                                    Holdings and 66% of the equity interests of
                                    foreign subsidiaries).

V.    Certain Conditions

Initial Conditions:                 The initial funding under the Credit
                                    Facilities shall be subject to the
                                    satisfaction of the following conditions
                                    (the date upon which such conditions are
                                    satisfied being the "Closing Date").

                                    (a) Each Loan Party shall have executed and
                                    delivered satisfactory definitive credit
                                    documentation (the "Credit Documentation").

                                    (b) The acquisition (the "Acquisition") of
                                    Holdings and the Borrowers, and of the cable
                                    systems currently owned by the Borrowers,
                                    shall have been consummated; the Borrowers
                                    shall hold all of such cable systems upon
                                    and after consummation of the Acquisition;
                                    and the debt assumed or retained by the
                                    Borrowers and their respective subsidiaries
                                    in connection therewith (other than the
                                    Senior Subordinated Notes and the Credit
                                    Facilities) shall not exceed an amount to be
                                    agreed upon.

                                    (c) The Lenders, the Administrative Agent
                                    and the Lead Arranger shall 


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                                    have received all fees required to be paid,
                                    and all expenses for which invoices have
                                    been presented, on or before the Closing
                                    Date.

                                    (d) All material governmental and third
                                    party approvals necessary in connection with
                                    the financings contemplated by the Credit
                                    Facilities shall have been obtained and be
                                    in full force and effect.

                                    (e) The Lenders shall have received (i) the
                                    audited financial statements of the
                                    Borrowers for the fiscal year ended December
                                    31, 1998 and the unaudited financial
                                    statements of the Borrowers for the fiscal
                                    quarter ended June 30, 1999 and (ii) all
                                    other available audited and unaudited
                                    financial statements for the Borrowers for
                                    the most recent fiscal quarter or fiscal
                                    year, as the case may be, for which such
                                    financial statements are available.

                                    (f) The Lenders shall have received
                                    satisfactory projections for the period from
                                    the Closing Date through the final maturity
                                    of the Term B Loans.

                                    (g) All documents and instruments required
                                    to perfect the Administrative Agent's first
                                    priority security interest in the collateral
                                    under the Credit Facilities shall have been
                                    executed.

                                    (h) Holdings and its affiliates and
                                    subsidiaries shall not be subject to
                                    contractual or other restrictions of a
                                    material nature that would be violated by
                                    the financings contemplated hereby.

                                    (i) The Borrowers shall have delivered such
                                    legal opinions, documents and other
                                    instruments as are customary for
                                    transactions of this type.

On-Going Conditions:                The making of each extension of credit shall
                                    be conditioned upon (a) the accuracy in all
                                    material respects of all representations and
                                    warranties in the Credit Documentation
                                    (including, without limitation, the material
                                    adverse change and litigation
                                    representations) and (b) there being no
                                    default or event of default in existence at
                                    the time of, or after giving effect to the
                                    making of, such extension of credit. As used
                                    herein and in the Credit Documentation, a
                                    "material adverse change" shall mean any
                                    event, development or circumstance that has
                                    had or could reasonably be expected to have
                                    a material adverse effect on (a) the
                                    business, operations, property or condition
                                    (financial or otherwise) of the Borrowers
                                    and their respective subsidiaries, taken as
                                    a whole, or (b) the validity or
                                    enforceability of any material provision of
                                    the Credit Documentation or the rights and
                                    remedies of the Administrative Agent and the
                                    Lenders thereunder.


VI.   Certain Documentation         The Credit Documentation shall contain    
      Matters                       representations, warranties, covenants and
                                    events of default customary for financings
                                    of this type and other terms deemed       
                                    appropriate by the Lenders, including,    
                                    without limitation:                       
                                    
Representations and Warranties:     Financial statements (including pro forma
                                    financial statements); absence of material
                                    undisclosed liabilities; no material adverse
                                    change; existence; material compliance with
                                    law; power and authority; enforceability of
                                    Credit Documentation; no conflict with law
                                    or material contractual obligations; no
                                    material litigation; no default; ownership
                                    of property; 


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                                       5

<PAGE>   13
--------------------------------------------------------------------------------


                                    liens; intellectual property; taxes; Federal
                                    Reserve regulations; ERISA; Investment
                                    Company Act; subsidiaries; environmental
                                    matters; solvency; labor matters; year 2000
                                    matters; accuracy of disclosure; and
                                    creation and perfection of security
                                    interests.

Affirmative Covenants:              Delivery of unaudited quarterly financial
                                    statements within 60 days of quarter end,
                                    audited annual financial statements with 120
                                    days of year end, reports, annual
                                    accountants' "no default" certificate,
                                    accountants' letters (if submitted),
                                    subscriber reports, annual budget (within 60
                                    days after the beginning of each fiscal
                                    year), officers' certificates and other
                                    information requested by the Lenders;
                                    payment of other obligations; continuation
                                    of business and maintenance of existence and
                                    material rights and privileges; compliance
                                    with laws and material contractual
                                    obligations; maintenance of property and
                                    insurance; maintenance of books and records;
                                    right of the Lenders to inspect property and
                                    books and records; notices of defaults,
                                    litigation and other material events;
                                    material compliance with environmental laws;
                                    further assurances (including, without
                                    limitation, with respect to security
                                    interests in after-acquired equity interests
                                    and intercompany obligations); and agreement
                                    to obtain interest rate protection to the
                                    extent necessary to provide that at least
                                    50% of the principal amount of term
                                    indebtedness of Holdings and its
                                    subsidiaries is effectively subject to a
                                    fixed rate, on terms satisfactory to the
                                    Administrative Agent, at all times following
                                    the date which is 90 days after the Closing
                                    Date during which the Leverage Ratio (as
                                    defined below) is greater than 4.50 to 1.00.

Financial Covenants:                Maximum ratio of Total Debt (as defined in
                                    Annex II) to annualized Operating Cash Flow
                                    (as defined in Annex II) (the "Leverage
                                    Ratio") as follows:


<TABLE>
<CAPTION>
                                    Period                      Leverage Ratio
                                    ------                      --------------
<S>                                                             <C>
                                    Closing Date to 12/30/01      6.25:1.00
                                    12/31/01 to 12/30/02          6.00:1.00
                                    12/31/02 to 12/30/03          5.50:1.00
                                    12/31/03 to 12/30/04          5.00:1.00
                                    12/31/04 to 12/30/05          4.75:1.00
                                    12/31/05 and thereafter       4.50:1.00
</TABLE>


                                    Maximum ratio of Senior Debt to annualized
                                    Operating Cash Flow (the "Senior Leverage
                                    Ratio") of 4.75 to 1.00 (such maximum ratio
                                    only being required to be complied with
                                    until the Leverage Ratio is less than 5:00
                                    to 1.00).

                                    Minimum ratio of Operating Cash Flow to cash
                                    interest expense (the "Interest Coverage
                                    Ratio") of 1.75 to 1.0.

                                    Minimum ratio of annualized Operating Cash
                                    Flow to pro forma debt service (the "Debt
                                    Service Coverage Ratio") of 1.25 to 1.0.

                                    For the purposes of the financial covenants,
                                    (i) all calculations will be made with
                                    respect to the Borrowers and their
                                    respective consolidated subsidiaries, (ii)
                                    Operating Cash Flow for the purposes of the
                                    Interest Coverage Ratio shall be determined
                                    on a rolling four-quarter basis, 


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

                                       6

<PAGE>   14
--------------------------------------------------------------------------------


                                    (iii) annualized Operating Cash Flow shall
                                    equal Operating Cash Flow for the most
                                    recent quarter multiplied by four, (iv) all
                                    determinations of Operating Cash Flow shall
                                    be made before giving effect to the payment
                                    of management fees, (v) cash interest
                                    expense shall be determined on a rolling
                                    four-quarter basis, except that until four
                                    fiscal quarters have passed since the
                                    Closing Date, such amount shall be
                                    determined for the number of full fiscal
                                    quarters subsequent to the Closing Date and
                                    then annualized, (vi) pro forma debt service
                                    shall be determined on the basis of
                                    scheduled principal for the four-quarter
                                    period commencing after the last day of the
                                    most recent fiscal period and historical
                                    interest expense calculated in the manner
                                    described in clause (v) above and (vii)
                                    interest expense (including interest expense
                                    for purposes of calculating pro forma debt
                                    service) shall include distributions made by
                                    the Borrowers used to pay debt service of
                                    Holdings or any of their respective
                                    affiliates, including but not limited to
                                    payment of interest on the Senior Discount
                                    Notes and payment of the Mandatory Payment
                                    of Accrued Interest.


Negative Covenants:                 Limitations on: (i) indebtedness; (ii)
                                    liens; (iii) guarantee obligations; (iv)
                                    mergers, consolidations, liquidations and
                                    dissolutions; (v) sales of assets; (vi)
                                    distributions and other payments in respect
                                    of equity interests and subordinated
                                    indebtedness; (vii) investments, loans and
                                    advances; (viii) optional payments and
                                    modifications of certain debt instruments;
                                    (ix) transactions with affiliates; (x)
                                    sale-leasebacks; (xi) changes in fiscal
                                    year; (xii) negative pledge clauses and
                                    clauses restricting subsidiary
                                    distributions; (xiii) changes in lines of
                                    business; (xiv) certain intercompany
                                    transactions (primarily relating to
                                    corporate separateness and tax sharing
                                    arrangements); and (xv) changes in passive
                                    holding company status of Holdings. Only
                                    those negative covenants described in
                                    clauses (i), (ii), (iii), (iv), (x), (xii),
                                    (xiv) and (xv) above will apply to Holdings.

                                    The negative covenants shall be subject to
                                    various exceptions, including the following:

                                    (a) The Borrowers will be permitted to incur
                                    (i) indebtedness under the Credit
                                    Facilities, (ii) unsecured subordinated
                                    indebtedness incurred to refinance the
                                    Senior Subordinated Notes, so long as such
                                    indebtedness has no scheduled amortization
                                    prior to the date that is one year after the
                                    final maturity of the Credit Facilities, and
                                    (iii) additional unsecured indebtedness not
                                    exceeding an amount to be determined, so
                                    long as (x) both before and after giving
                                    effect to the incurrence thereof, no default
                                    (including, on a pro forma basis, under the
                                    financial covenants) shall be in effect, (y)
                                    no subsidiary of any Borrower will be
                                    permitted to guarantee such indebtedness and
                                    (z) the covenants and default provisions
                                    applicable to such indebtedness shall be no
                                    more restrictive than those applicable to
                                    the Credit Facilities.

                                    (b) The Borrowers may issue subordinated
                                    notes to Paul G. Allen and his affiliates on
                                    terms customary for intercompany
                                    subordinated debt and satisfactory to the
                                    Administrative Agent (the "Affiliate
                                    Subordinated Debt"), and such Affiliate
                                    Subordinated Debt may be prepaid with Loans
                                    or indebtedness of the type described in
                                    clause (a) above.

                                    (c) The Borrowers and their respective
                                    subsidiaries may obtain letters of 


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

                                       7

<PAGE>   15
                                    credit outside of the Credit Facilities
                                    (secured by the same collateral that secures
                                    the Credit Facilities) in an aggregate face
                                    amount of up to $10,000,000.

                                    (d) So long as no default shall be in
                                    existence or would result therefrom, the
                                    Borrowers and their respective subsidiaries
                                    will be permitted to (i) consummate asset
                                    swaps ("Asset Swaps") for fair market value,
                                    so long as (x) the assets received are held
                                    by the Borrowers or any of their respective
                                    wholly owned subsidiaries, and (y) the
                                    properties to be swapped do not account for
                                    more than 25% of Operating Cash Flow for the
                                    preceding 12 months in any one instance or
                                    35% of Operating Cash Flow during the term
                                    of the Credit Facilities, and (ii)
                                    consummate asset dispositions ("Asset
                                    Sales") not exceeding, in the aggregate, 25%
                                    of Operating Cash Flow for the preceding 12
                                    months in any one instance or 35% of
                                    Operating Cash Flow during the term of the
                                    Credit Facilities. Asset Sales and Asset
                                    Swaps that are in excess of the respective
                                    thresholds require the prior written
                                    approval of Required Lenders (as defined
                                    below). Asset Sales in excess of $40 million
                                    and Asset Swaps of property generating cash
                                    flow in excess of 10% of Operating Cash Flow
                                    for the preceding 12 months require that the
                                    Borrowers submit evidence of pro forma
                                    covenant compliance for the contemplated
                                    transaction(s). In addition, dispositions of
                                    assets acquired after the Closing Date shall
                                    be permitted, and shall be disregarded for
                                    the purposes of the limitations set forth in
                                    the preceding sentences, so long as (i) a
                                    definitive agreement to consummate each such
                                    disposition is executed no later than twelve
                                    months after the relevant assets are
                                    acquired and (ii) each such disposition is
                                    consummated within eighteen months after the
                                    relevant assets are acquired. Excess cash
                                    received in any one swap or series of
                                    related swaps shall be counted against the
                                    limitation on Asset Sales and shall be
                                    subject to the same reinvestment provisions.
                                    Excess cash paid for any one swap or series
                                    of related swaps shall be counted against
                                    the limitation on Permitted Acquisitions
                                    described in clause (f) below.

                                    (e) Cable systems may be contributed to
                                    joint ventures constituting "non-recourse"
                                    subsidiaries so long as (i) such disposition
                                    is permitted pursuant to clause (d) above,
                                    (ii) both before and after giving effect
                                    thereto, no default (including, on a pro
                                    forma basis, under the financial covenants)
                                    shall be in effect, (iii) after giving
                                    effect thereto, the Leverage Ratio shall be
                                    equal to or lower than the Leverage Ratio in
                                    effect immediately prior thereto, (iv) no
                                    operating cash flow (except to the extent
                                    that dividends are received in cash) or
                                    indebtedness of such joint venture shall be
                                    included for the purposes of calculating
                                    Operating Cash Flow or indebtedness of the
                                    Borrowers and their respective subsidiaries
                                    and (v) the equity interest received in
                                    connection therewith shall be pledged as
                                    collateral. Non-recourse subsidiaries shall
                                    not be subject to the covenants contained in
                                    the Credit Documentation.

                                    (f) Up to $100,000,000 may be expended (with
                                    assumption of debt being included as an
                                    expenditure) in connection with acquisitions
                                    ("Permitted Acquisitions") of cable systems
                                    (including through purchases of 100% of the
                                    equity interests of any entity whose assets
                                    consist of cable systems), in each case
                                    subject to pro forma compliance with the
                                    financial covenants with pro forma covenant
                                    calculations provided for acquisitions in
                                    which the amount expended exceeds
                                    $40,000,000 (provided that such 


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

                                       8

<PAGE>   16
--------------------------------------------------------------------------------


                                    $100,000,000 limit will not apply if either
                                    (i) both before and after giving effect to
                                    an acquisition, the Interest Coverage Ratio
                                    is greater than 2.10 to 1 or (ii) the
                                    relevant acquisition is financed with the
                                    proceeds of a capital contribution made
                                    directly or indirectly by Paul G. Allen).
                                    The Borrowers will be required to execute
                                    any documentation necessary or advisable to
                                    perfect the Lenders' security interest in
                                    any new collateral.

                                    (g) So long as no default shall be in
                                    existence or would result therefrom, the
                                    Borrowers may make distributions to any
                                    direct or indirect parent of the Borrowers
                                    (i) for the purpose of paying interest
                                    (including the Mandatory Payment of Accrued
                                    Interest) on any notes issued by such parent
                                    (to the extent required to be paid in cash),
                                    so long as, after giving effect to any such
                                    dividend, the Interest Coverage Ratio is
                                    greater than 2.10 to 1.0, (ii) for any
                                    purpose so long as, after giving effect to
                                    any such dividend, the Leverage Ratio is
                                    less than 3.50 to 1.0, (iii) for the purpose
                                    of making payments of principal and interest
                                    on Affiliate Subordinated Debt, (iv) for the
                                    purpose of paying management fees in
                                    accordance with the provisions outlined
                                    under clause (i) below, (v) for the purpose
                                    of paying interest on indebtedness of
                                    Holdings (x) incurred to refinance the
                                    Senior Discount Notes or (y) the proceeds of
                                    which are contributed to the Borrowers, and
                                    (vi) for the purpose of paying
                                    "pass-through" tax obligations of the
                                    holders of equity interests in the Borrowers
                                    and Holdings.

                                    (h) So long as no default shall be in
                                    existence or would result therefrom, the
                                    Borrowers may make and maintain (i)
                                    customary cash and cash equivalent
                                    investments, (ii) investments in existence
                                    on the Closing Date, and (iii) additional
                                    investments in an aggregate maximum amount
                                    to be determined.

                                    (i) So long as no default shall be in
                                    existence or would result therefrom, the
                                    Borrowers may pay, or make distributions to
                                    Holdings to pay, to certain affiliates in
                                    respect of any permitted investment made
                                    after the Closing Date up to 1.0% of the
                                    aggregate enterprise value of such permitted
                                    investment.

                                    (j) So long as no default shall be in
                                    existence or would result therefrom, up to
                                    3.50% of annual gross operating revenues may
                                    be expensed by the Borrowers in respect of
                                    management fees, with up to 2.0% payable in
                                    cash with the remainder deferred. Amounts
                                    previously deferred may be paid when the
                                    Leverage Ratio is less than 4.5 to 1.0,
                                    subject to pro forma covenant compliance.
                                    The obligation of the Borrowers to pay such
                                    management fees shall be contractually
                                    subordinated to their obligation to repay
                                    the Loans.

                                    (k) Holdings shall be permitted to incur any
                                    indebtedness, so long as such indebtedness
                                    has no scheduled amortization prior to the
                                    date that is one year after the final
                                    maturity of the Credit Facilities and either
                                    (1) such indebtedness is incurred to
                                    refinance the Senior Discount Notes or (2)
                                    the proceeds of such indebtedness are
                                    contributed to the Borrowers.

Events of Default:                  Nonpayment of principal when due; nonpayment
                                    of interest, fees or other amounts after a
                                    grace period to be agreed upon; material
                                    inaccuracy of representations and
                                    warranties; violation of covenants (subject,
                                    in the 


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

                                       9

<PAGE>   17
                                    case of certain affirmative covenants, to a
                                    grace period to be agreed upon);
                                    cross-default to indebtedness in an
                                    aggregate amount in excess of $20,000,000;
                                    bankruptcy events; certain ERISA events;
                                    termination or suspension of material
                                    licenses; material judgments; actual or
                                    asserted invalidity of any guarantee,
                                    security document or security interest; and
                                    a Change of Control. "Change of Control"
                                    shall be defined as (a) the failure of Paul
                                    G. Allen (including his estate, heirs and
                                    certain other related entities) to maintain
                                    a 25% economic interest in the Borrowers or
                                    to maintain voting control of the Borrowers,
                                    (b) the failure of any of the Borrowers to
                                    be an indirect subsidiary of Charter
                                    Communications Holding Company, LLC, (c) (i)
                                    the failure of any of the Borrowers to be a
                                    direct wholly owned subsidiary of (x)
                                    Holdings, (y) a wholly owned subsidiary of
                                    Holdings or (z) a wholly owned subsidiary of
                                    a successor Holdings or (ii) the failure of
                                    any such parent referred to in clause (i)
                                    above to execute and deliver a guaranty and
                                    equity pledge agreement securing the Credit
                                    Facilities within a time period to be agreed
                                    upon.

Voting:                             Amendments and waivers with respect to the
                                    Credit Documentation shall require the
                                    approval of Lenders holding more than 50%
                                    (the "Required Lenders") of the aggregate
                                    amount of the Term B Loans, Revolving
                                    Commitments and the loans and unused
                                    commitments, if any, under the Incremental
                                    Facility (with each Lender and its related
                                    "approved funds," if any, voting as a single
                                    unit), except that (a) the consent of each
                                    Lender directly affected thereby shall be
                                    required with respect to (i) reductions in
                                    the amount or extensions of the scheduled
                                    date of amortization or maturity of any
                                    Loan, (ii) reductions in the rate of
                                    interest or any fee or extensions of any due
                                    date thereof and (iii) increases in the
                                    amount or extensions of the expiry date of
                                    any Lender's commitment and (b) the consent
                                    of 100% of the Lenders shall be required
                                    with respect to (i) modifications to any of
                                    the voting percentages and (ii) releases of
                                    material subsidiary Guarantors or all or
                                    substantially all of the collateral (other
                                    than pursuant to permitted asset
                                    dispositions).

Assignments and Participations:     The Lenders shall be permitted to assign and
                                    sell participations in their Loans and
                                    commitments, subject, in the case of
                                    assignments (other than to another Lender or
                                    to an affiliate of a Lender), to the consent
                                    of the Administrative Agent and the
                                    Borrowers (which consent in each case shall
                                    not be unreasonably withheld). Non-pro rata
                                    assignments shall be permitted. In the case
                                    of partial assignments (other than to
                                    another Lender or to an affiliate of a
                                    Lender), unless otherwise agreed by the
                                    Borrowers and the Administrative Agent, (i)
                                    the minimum assignment amount shall be
                                    $5,000,000 and (ii) the minimum amount
                                    retained by the assigning Lender shall be
                                    $3,000,000 (with the amounts described
                                    herein being aggregated in respect of each
                                    Lender and its related "approved funds," if
                                    any). Each assignment shall be subject to
                                    the payment of a $3,500 processing fee to
                                    the Administrative Agent. Participants shall
                                    have the same benefits as the Lenders with
                                    respect to yield protection and increased
                                    cost provisions. Voting rights of
                                    participants shall be limited to those
                                    matters set forth in clause (a) under the
                                    heading "Voting" above with respect to which
                                    the affirmative vote of the Lender from
                                    which it purchased its participation would
                                    be required. Pledges of Loans in accordance
                                    with applicable law shall be permitted
                                    without restriction.

Yield Protection:                   The Credit Documentation shall contain
                                    customary provisions (a) 


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

                                       10

<PAGE>   18
                                    protecting the Lenders against increased
                                    costs or loss of yield resulting from
                                    changes in reserve, tax, capital adequacy
                                    and other requirements of law and from the
                                    imposition of or changes in withholding or
                                    other taxes and (b) indemnifying the Lenders
                                    for "breakage costs" incurred in connection
                                    with, among other things, any prepayment of
                                    a Eurodollar Loan on a day other than the
                                    last day of an interest period with respect
                                    thereto.

Expenses and Indemnification:       The Borrowers shall pay (a) all reasonable
                                    out-of-pocket expenses of the Administrative
                                    Agent and the Lead Arranger associated with
                                    the syndication of the Credit Facilities and
                                    the preparation, execution, delivery and
                                    administration of the Credit Documentation
                                    and any amendment or waiver with respect
                                    thereto (including the reasonable fees,
                                    disbursements and other charges of counsel
                                    to the Administrative Agent) and (b) all
                                    out-of-pocket expenses of the Administrative
                                    Agent and the Lenders (including the fees,
                                    disbursements and other charges of one firm
                                    of counsel to the Administrative Agent and
                                    one additional firm of counsel to the
                                    Lenders) in connection with the enforcement
                                    of the Credit Documentation.

                                    The Administrative Agent, the Lead Arranger
                                    and the Lenders (and their affiliates and
                                    their respective officers, directors,
                                    employees, advisors and agents) will have no
                                    liability for, and will be indemnified and
                                    held harmless against, any losses, claims,
                                    damages, liabilities or expenses incurred in
                                    respect of the financing contemplated hereby
                                    or the use or the proposed use of proceeds
                                    thereof, except to the extent they are found
                                    by a final, non-appealable judgment of a
                                    court to arise from the willful misconduct
                                    or gross negligence of the relevant
                                    indemnified person.

Governing Law and Forum:            State of New York.

Counsel to the Administrative       O'Melveny and Myers LLP.
Agent and the Lead Arranger:


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

                                       11

<PAGE>   19
--------------------------------------------------------------------------------


      Annex I to Term Sheet
      ---------------------

                            Interest and Certain Fees
                            -------------------------


Interest                            Rate Options: The Borrowers may elect that
                                    the Loans comprising each borrowing bear
                                    interest at a rate per annum equal to the
                                    ABR plus the Applicable Margin or the
                                    Eurodollar Rate plus the Applicable Margin,
                                    provided, that all Swingline Loans shall
                                    bear interest based upon the ABR.

                                    As used herein:

                                    "ABR" means the higher of (i) the rate of
                                    interest publicly announced by the
                                    Administrative Agent as its prime rate in
                                    effect (the "Prime Rate") and (ii) the
                                    federal funds effective rate from time to
                                    time plus 0.5%.

                                    "Applicable Margin" means the rate
                                    determined pursuant to the pricing grid set
                                    forth below:


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                            Applicable                                                         
                                            Margin for        Applicable       Applicable        Applicable
                                            Eurodollar      Margin for ABR     Margin for      Margin for ABR
   Leverage Ratio                              Loans            Loans          Eurodollar      Loans (Term B
                                            (Revolving        (Revolving      Loans (Term B        Loans)
                                              Loans)            Loans)           Loans)
---------------------------------------------------------------------------------------------------------------
<S>                                         <C>             <C>               <C>              <C>   
Greater than or Equal to 6.00 to 1.00         1.875%           0.875%            2.750%           1.750%

Greater than or Equal to 5.50 to 1.00         1.625%           0.625%            2.750%           1.750%

Less than 6.00 to 1.00

Greater than or Equal to 5.00 to 1.00         1.500%           0.500%            2.750%           1.750%

Less than 5.50 to 1.00

Greater than or Equal to 4.50 to 1.00         1.375%           0.375%            2.500%           1.500%

Less than 5.00 to 1.00

Greater than or Equal to 4.00 to 1.00         1.250%           0.250%            2.500%           1.500%

Less than 4.50 to 1.00

Less than 4.00 to 1.00                        1.000%           0.000%            2.500%           1.500%
---------------------------------------------------------------------------------------------------------------
</TABLE>


                                    With respect to the pricing grid, (i)
                                    pricing corresponding to a Leverage Ratio of
                                    less than 6.00 to 1.0 will not be available
                                    until the date (the "Adjustment Date") on
                                    which financial statements have been
                                    delivered in respect of the fiscal quarter
                                    ending March 31, 2000 and (ii) while an
                                    event of default is in existence, pricing
                                    shall revert to the highest grid rates.

                                    "Eurodollar Rate" means the rate (adjusted
                                    for statutory reserve requirements for
                                    eurocurrency liabilities) for eurodollar
                                    deposits for a period equal to one, two,
                                    three or six months (or twelve months, with
                                    consent of all Lenders), as selected by the
                                    Borrowers, appearing on Page 3750 of the Dow
                                    Jones Markets screen.


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

                                      I-1

<PAGE>   20
--------------------------------------------------------------------------------


Interest Payment Dates:             In the case of Loans bearing interest based
                                    upon the ABR ("ABR Loans"), quarterly in
                                    arrears.

                                    In the case of Loans bearing interest based
                                    upon the Eurodollar Rate ("Eurodollar
                                    Loans"), on the last day of each relevant
                                    interest period and, in the case of any
                                    interest period longer than three months, on
                                    each successive date three months after the
                                    first day of such interest period.

Commitment Fees:                    The Borrowers shall pay a commitment fee
                                    calculated at the rate of 0.375% per annum
                                    on the average daily unused portion of the
                                    Revolving Facility, payable quarterly in
                                    arrears, provided that, from and after the
                                    Adjustment Date, such rate shall be reduced
                                    to 0.250% per annum at any time when the
                                    Leverage Ratio is less than 5.00 to 1.0 (so
                                    long as no event of default is in
                                    existence). Swingline Loans shall, for
                                    purposes of the commitment fee calculations
                                    only, not be deemed to be a utilization of
                                    the Revolving Facility.

Default                             Rate: At any time when the Borrowers are in
                                    default in the payment of any amount of
                                    principal due under the Credit Facilities,
                                    all outstanding Loans shall bear interest at
                                    2% above the rate otherwise applicable
                                    thereto. Overdue interest, fees and other
                                    amounts shall bear interest at 2% above the
                                    rate applicable to the relevant ABR Loans.

Rate and Fee Basis:                 All per annum rates shall be calculated on
                                    the basis of a year of 360 days (or 365/366
                                    days, in the case of ABR Loans the interest
                                    rate payable on which is then based on the
                                    Prime Rate) for actual days elapsed.


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                                      I-2

<PAGE>   21
--------------------------------------------------------------------------------


Annex II To Term Sheet
----------------------
                                   Definitions
                                   -----------


Mandatory Payment of                Prior to December 1, 2003, interest on the  
Accrued Interest:                   Senior Discount Notes will accrete at an    
                                    annual rate of 11 7/8% per annum, compounded
                                    semi-annually, but will not be paid until   
                                    December 1, 2003. On December 1, 2003, the  
                                    "Issuers" (as defined in the Section        
                                    Discount Notes) will be required to redeem  
                                    an amount equal to $369.79 per $1,000       
                                    principal amount at maturity of each Senior 
                                    Discount Note then outstanding ($72,479,000,
                                    the "Accreted Interest Redemption Amount"). 
                                    The Accreted Interest Redemption Amount     
                                    represents (i) the excess of the aggregate  
                                    accreted principal amount of all Senior     
                                    Discount Notes outstanding on December 1,   
                                    2003 over the aggregate issue price thereof 
                                    less (ii) an amount equal to one year's     
                                    simple uncompounded interest on the         
                                    aggregate issue price of such Senior        
                                    Discount Notes at a rate per annum equal to 
                                    the stated interest rate on the Senior      
                                    Discount Notes.                             
                                    
Operating Cash Flow:                Operating Cash Flow for any period shall
                                    mean pre-tax income (excluding any
                                    extraordinary gains and losses) plus (a)
                                    depreciation, amortization and other
                                    non-cash charges; (b) interest expense; and
                                    (c) management fees (whether or not they are
                                    paid); minus (d) other non-cash income. For
                                    purposes of calculating the Leverage Ratio
                                    and the Senior Leverage Ratio, Operating
                                    Cash Flow shall be adjusted for acquisitions
                                    and dispositions as if such acquisitions
                                    and/or dispositions had occurred on the
                                    first day of such period.

Total Debt:                         Total Debt shall mean the sum of all
                                    indebtedness for borrowed money, guarantees
                                    and letters of credit to the extent that
                                    they support third-party indebtedness,
                                    seller paper and capitalized lease
                                    obligations of Borrowers and their
                                    subsidiaries. Total Debt does not include
                                    the Senior Discount Notes.


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