FRONTIERVISION OPERATING PARTNERS LP, S-1/A, 1996-09-11

FRONTIERVISION OPERATING PARTNERS LP
S-1/A, 1996-09-11
CABLE & OTHER PAY TELEVISION SERVICES

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<PAGE> 1

As filed with the Securities and Exchange Commission on September 11, 1996

REGISTRATION NO. 333-09535
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

AMENDMENT NO. 2

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION
(Exact name of Registrants as specified in their charters)

<TABLE>
<S> <C> <C>
DELAWARE 4841 84-1316775
DELAWARE 4841 84-1353734
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code Number) Numbers)
</TABLE>

1777 SOUTH HARRISON STREET, SUITE P-200, DENVER, COLORADO 80210 (303) 757-1588
(Address, including Zip Code, and telephone number, including area code, of
Registrants' principal executive offices)

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

JAMES C. VAUGHN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FrontierVision Inc.
1777 South Harrison Street, Suite P-200
Denver, Colorado 80210
(303) 757-1588
(Name, address, including Zip Code, and telephone number, including area code,
of Registrants' agent for service)

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

Please address a copy of all communications to:

<TABLE>
<S> <C>
LEONARD J. BAXT, ESQ. GERALD S. TANENBAUM, ESQ.
Dow, Lohnes & Albertson, PLLC Cahill Gordon & Reindel
1200 New Hampshire Avenue, N.W. 80 Pine Street
Washington, D.C. 20036 New York, New York 10005
(202) 776-2000 (212) 701-3000
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.

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

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

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

THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.

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<PAGE> 2

EXPLANATORY NOTE

This Registration Statement covers the registration of $200,000,000 aggregate
principal amount of % Senior Subordinated Notes due 2006 (the "Notes")
which are being issued by FrontierVision Operating Partners, L.P. and
FrontierVision Capital Corporation (collectively, the "Issuers"). The complete
Prospectus contained herein relates to the primary offering of the Notes by the
Issuers. Immediately following the complete Prospectus are certain alternate
pages of the Prospectus relating to the sale of the Notes by J.P. Morgan
Securities Inc. and First Union Capital Markets Corp. in market making
transactions, including an alternate front cover page and a section entitled
"Plan of Distribution."
<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

PROSPECTUS SUBJECT TO COMPLETION

DATED SEPTEMBER 11, 1996

(FRONTIERVISION FRONTIERVISION OPERATING PARTNERS, L.P.
LOGO) FRONTIERVISION CAPITAL CORPORATION

$200,000,000
% Senior Subordinated Notes due 2006
Interest payable and
ISSUE PRICE: %

The % Senior Subordinated Notes due 2006 (the "Notes") are being offered
(the "Offering") by FrontierVision Operating Partners, L.P., a Delaware limited
partnership ("FVOP" or the "Company"), and FrontierVision Capital Corporation, a
Delaware corporation ("Capital") which is a wholly owned subsidiary of FVOP. The
Notes are the joint and several obligations of FVOP and Capital (collectively,
the "Issuers"). The Company will receive all of the net proceeds of the
Offering. Capital has nominal assets and does not conduct any operations.

The Notes mature on , 2006, unless previously redeemed. Interest
on the Notes is payable semiannually on each and ,
commencing , 1997. The Notes are not redeemable prior to
, 2001, except as set forth below. The Notes will be redeemable
at the option of the Issuers, in whole or in part, at any time on or after
, 2001, at the redemption prices set forth herein, together with
accrued and unpaid interest to the redemption date. In addition, prior to
, 1999, the Issuers may redeem up to 35% of the principal amount
of the Notes with the net cash proceeds received from one or more Public Equity
Offerings or Strategic Equity Investments (as such terms are defined) at a
redemption price of % of the principal amount thereof, together with
accrued and unpaid interest to the redemption date; provided, however, that at
least 65% in aggregate principal amount of the Notes originally issued remains
outstanding immediately after any such redemption.

Upon a Change of Control (as defined), the Issuers will be required to make an
offer to purchase all outstanding Notes at 101% of the principal amount thereof,
together with accrued and unpaid interest to the purchase date.

The Notes will be general unsecured obligations of the Issuers and will rank
subordinate in right of payment to all existing and future Senior Indebtedness
(as defined) of the Issuers. The Notes will rank pari passu in right of payment
with any other senior subordinated indebtedness of the Issuers. At June 30,
1996, as adjusted to give effect to the Transactions (as defined herein), the
Company would have had approximately $193.3 million of Senior Indebtedness
outstanding.

SEE "RISK FACTORS" BEGINNING ON PAGE 14 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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===============================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) COMPANY (1)(3)
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<S> <C> <C> <C>
Per Note % % %
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Total $ $ $
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</TABLE>

(1) Plus accrued interest, if any, from the date of issuance.
(2) The Issuers have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $1,000,000.

The Notes are being offered by the Underwriters, subject to prior sale, when, as
and if delivered to and accepted by the Underwriters, and subject to approval of
certain legal matters by Cahill Gordon & Reindel, counsel for the Underwriters,
and certain other conditions. The Underwriters withhold the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It is
expected that delivery of the Notes will be made through the book-entry
facilities of the Depository Trust Company, against payment therefor on or about
, 1996.

J.P. MORGAN & CO.
CHASE SECURITIES INC.
CIBC WOOD GUNDY SECURITIES CORP.
, 1996 FIRST UNION CAPITAL MARKETS CORP.
<PAGE> 4

[INSIDE FRONT COVER PAGE]

[MAP OF FRONTIERVISION SYSTEMS, INCLUDING EXISTING SYSTEMS, ACQUISITION
SYSTEMS (ACE, TRIAX, GRASSROOTS AND PENN/OHIO), AND DISPOSITION SYSTEMS]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE> 5

No person has been authorized to give any information or to make any
representation not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Issuers or any Underwriter. This Prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy, the Notes in any jurisdiction in
which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it
is unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information contained herein is correct as of any date
subsequent to the date hereof or that there has been no change in the affairs of
the Issuers since the date hereof.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information.................. 4
Prospectus Summary..................... 5
Risk Factors........................... 14
Use of Proceeds........................ 19
Capitalization......................... 20
Selected Financial Data................ 21
Summary Combined Selected Historical
Financial Data of Certain Existing
Systems and Acquisition Systems...... 23
Pro Forma Financial Data............... 25
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 33
Business............................... 37

<CAPTION>
PAGE
<S> <C>
Legislation and Regulation............. 51
Management............................. 59
Certain Relationships and Related
Transactions......................... 62
Principal Security Holders............. 63
Ownership Structure.................... 64
The Partnership Agreements............. 65
Credit Arrangements of the Company..... 74
Description of the Notes............... 75
Underwriting........................... 104
Legal Matters.......................... 106
Experts................................ 106
Glossary............................... 107
Index to Financial Statements.......... F-1
</TABLE>

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

UNTIL , 1997 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE NOTES, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

3
<PAGE> 6

AVAILABLE INFORMATION

The Issuers have filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (of which this Prospectus is a part and
which term shall encompass any amendments thereto) on Form S-1, pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Notes offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the information set forth in
the Registration Statement and the exhibits and schedules thereto. For further
information about the Issuers and the Notes, reference is hereby made to the
Registration Statement and to such exhibits and schedules. Statements contained
herein concerning the provisions of any documents filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.

In addition, as a result of the Offering, the Issuers will be subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and, in accordance therewith, will file reports and other
information with the Commission. In addition, under the Indenture governing the
Notes, the Issuers will be required to furnish to the Trustee and to registered
holders of the Notes audited annual consolidated financial statements, unaudited
quarterly consolidated financial reports and certain other reports. The
Registration Statement, the exhibits and schedules forming a part thereof and
the reports and other information filed by the Issuers with the Commission
pursuant to the informational requirements of the Exchange Act may be inspected
without charge and copied upon payment of certain fees at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: New York Regional Office, Seven World Trade Center, 13th Floor,
New York, New York 10048, and Chicago Regional Office, Northwestern Atrium, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission also
maintains a World Wide Web site on the Internet at http://www.sec.gov that
contains reports and other information regarding registrants that file
electronically with the Commission.

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

FVOP was organized as a Delaware limited partnership in 1995. Capital is a newly
created Delaware corporation formed solely for the purpose of serving as an
Issuer of the Notes and is wholly owned by FVOP. The principal office of each of
the Issuers is located at 1777 South Harrison Street, Suite P-200, Denver,
Colorado 80210, and their telephone number is (303) 757-1588.

4
<PAGE> 7

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus. The information set forth in this Prospectus gives effect to
the organization of Capital, a newly created corporation, as a wholly owned
subsidiary of FVOP. As used in this Prospectus, the term "Acquisition Systems"
includes the cable television systems acquired from Phoenix Grassroots Cable
Systems, L.L.C. on August 30, 1996 and the term "Acquisition Transactions"
includes the purchase of such systems. See "Risk Factors" for a discussion of
certain risks associated with an investment in the Notes. See "Glossary" for the
definitions of certain terms used herein.

THE COMPANY

The Company owns, operates and develops cable television systems in small and
medium-sized suburban and exurban communities, primarily concentrated in two
operating regions -- New England and Ohio/Kentucky -- with a third, smaller
group of cable television systems in the Southeast. To date, the Company has
acquired strategically located cable television systems at historically
attractive values, thus establishing its core geographic base and building
subscriber mass. Since closing its initial acquisition in November 1995, the
Company has become one of the 35 largest multiple system cable operators
("MSOs") in the United States. The cable television systems owned by the Company
on June 30, 1996 (the "Existing Systems") passed approximately 304,700 homes in
six states and served approximately 217,900 basic subscribers as of such date.

The Company has recently acquired or entered into agreements to acquire, for an
aggregate purchase price of approximately $244.4 million (subject to
adjustment), additional systems (the "Acquisition Systems") which passed
approximately 202,800 homes and served approximately 146,700 basic subscribers
as of June 30, 1996. The Acquisition Systems primarily consist of certain
significant cable television systems to be acquired from American Cable
Entertainment of Kentucky-Indiana, Inc. ("ACE") and from an affiliate of Triax
Communications Corp. ("Triax"). The ACE systems, serving approximately 82,400
subscribers in Kentucky and Indiana, and the Triax systems, serving
approximately 53,200 subscribers in Ohio/Kentucky and the Southeast, are
contiguous or in close proximity to the Existing Systems, consistent with the
Company's strategy of clustering its cable television systems to achieve
economies of scale and operating efficiencies. The Company intends to continue
to pursue, on an opportunistic basis, additional strategic acquisitions and
smaller "fill-in" acquisitions within its existing operating regions to further
enhance their operational and financial performance. In addition, the Company
has sold or entered into agreements to sell three systems in the Southeast (the
"Disposition Systems") for an aggregate sales price of approximately $17.0
million, representing a per subscriber sales price that is over 30% more than
the average per subscriber acquisition cost of the Existing Systems in the
Southeast.

As of June 30, 1996, after giving pro forma effect to the purchase of the
Acquisition Systems and the sale of the Disposition Systems, the Company's cable
television systems passed approximately 494,300 homes and served approximately
353,800 basic subscribers, representing a basic penetration level of 71.6%. On
such a pro forma basis, as of June 30, 1996, the Company would be one of the 25
largest MSOs in the United States and a dominant cable operator in its two
primary operating regions. On the same pro forma basis, for the six months ended
June 30, 1996 and for the year ended December 31, 1995, the Company had revenues
of approximately $60.6 million and $117.0 million, respectively, and EBITDA (as
defined) of approximately $29.3 million and $53.3 million, respectively.

In order to execute the Company's business strategy, James C. Vaughn and John S.
Koo, the Company's co-founders, have assembled a senior management group of six
individuals with over 85 years of collective experience in the cable industry.
The equity investors in the Company include affiliates of J.P. Morgan & Co.
Incorporated, Brown Brothers Harriman & Co., Olympus Partners and First Union
Capital Partners, Inc. After giving pro forma effect to a $76.0 million rights
offering (the "Rights Offering"), which is expected to be consummated
concurrently with or prior to the Offering, the Company will have obtained
aggregate equity capital commitments of approximately $195.7 million, of which
$115.6 million has been invested in the Company.

5
<PAGE> 8

established significant subscriber mass and positioned itself as a dominant
cable operator in each of its primary operating regions. The Company is
currently the second largest MSO in Maine, and, after giving pro forma effect to
the purchase of the Acquisition Systems, as of June 30, 1996, the Company would
be the second largest MSO in Kentucky and one of the largest operators of cable
systems in small and medium-sized markets in southern Ohio. In the Southeast,
the Company has accumulated attractive systems which it expects either to
consolidate with subsequent system acquisitions, trade for systems within the
Company's primary operating regions or divest at favorable prices. The next
phase of the Company's business plan will focus on increasing subscriber density
within its primary operating regions through selective acquisitions, integrating
and streamlining business operations, making significant investment and
improvements in technical plant and developing existing and new cable and
broadband telecommunications services.

BUSINESS STRATEGY

The Company's objective is to increase its operating cash flow and the value of
its systems by utilizing its expertise in acquiring and managing cable systems.
Through strategic acquisitions and internal growth, the Company seeks to own and
operate cable television systems serving at least 500,000 subscribers in
geographically concentrated clusters serving 100,000 or more subscribers. To
achieve its objective, the Company pursues the following business strategies:

TARGET CLUSTERS IN SMALL AND MEDIUM-SIZED MARKETS. The Company has acquired
clusters of cable television systems serving small and medium-sized suburban and
exurban markets which are generally within 50 to 100 miles of larger urban and
suburban communities. The Company believes that such markets have many of the
beneficial attributes of larger urban and suburban markets -- moderate to high
household growth, economic stability, attractive subscriber demographics and
favorable potential for additional clustering. Moreover, in such markets, the
Company believes that (i) it will face less direct competition given the lower
population densities and higher costs per subscriber of installing cable plant,
(ii) it will maintain higher subscriber penetration levels and lower customer
turnover based on fewer competing entertainment alternatives, and (iii) its
overhead and certain operating costs will generally be lower than those in
larger markets.

GROW THROUGH STRATEGIC AND OPPORTUNISTIC ACQUISITIONS. Beginning with its
initial acquisition in November 1995 of systems in Maine and Ohio, the Company
has systematically implemented a focused acquisition and consolidation strategy
within its two primary operating regions of New England and Ohio/Kentucky and
its systems group in the Southeast. Going forward, the Company will seek to
acquire systems that can be readily integrated into its primary operating
regions in order to maximize operating efficiencies. As a consolidator of
systems within its primary operating regions, the Company will pursue both
"fill-in" acquisitions of smaller systems as well as strategic acquisitions. The
Company believes that such acquisition targets will have diminished strategic
value to other prospective buyers given its geographic prominence in these
regions. Consequently, the Company believes these systems can be purchased at
favorable prices. The Company also opportunistically pursues acquisitions
outside of its primary operating regions that can either be resold at higher
prices or exchanged for systems that are contiguous to its primary operating
regions. The Company has begun to execute this strategy with its Southeast
systems.

IMPLEMENT OPERATING EFFICIENCIES. Upon acquiring a system, the Company
implements extensive management, operational and technical changes designed to
improve operating efficiencies, enhance operating cash flow and operating
margins and reduce overhead through economies of scale. Within each of its
operating regions, the Company has begun to streamline field operations by
establishing centralized customer service facilities, installing
state-of-the-art telephone systems, management information systems ("MIS") and
billing systems and eliminating duplicative functions. These changes have
resulted in lower administrative costs, better trained employees and a higher
level of customer service. Lastly, the Company seeks to reduce technical
operating costs and capital expenditures associated with the implementation of
new channels and services by consolidating headends. By serving more subscribers
from a single distribution point, the Company has begun to decrease ongoing
technical maintenance expenses, improve system reliability and enhance cost
efficiencies in adding new channels and services.

6
<PAGE> 9

PROMOTE AND EXPAND SERVICE OFFERINGS. The Company aggressively promotes and
expands services to add and retain customers and increase revenue per customer.
The Company employs a coordinated array of marketing techniques, including
door-to-door sales, telemarketing, direct mail, print and broadcast advertising,
flyers and billing inserts and cross-channel promotion. Many of the Company's
customers received limited service offerings prior to acquisition and,
accordingly, the Company has begun to expand and repackage the basic and premium
services it offers. The Company believes that significant opportunity exists to
increase service revenue by expanding the programming and pricing options
available to its customers. For example, the Company introduced between three
and seven new tiered and premium channels to 89% of the New England subscribers
in May and June of 1996, including lower priced premium services such as The
Disney Channel, Starz! and Encore. The new service launch was accompanied by an
aggressive direct mail and telemarketing campaign and an average basic service
rate increase. By July 1996, monthly basic subscribers and pay units in the New
England operating region increased by 1.6% and 9.7%, respectively. The Company
is in the process of implementing similar new programming launches and marketing
campaigns in its other primary service areas. As systems are consolidated and
technically enhanced, the Company will also expand addressability, currently
accessed by only 27.6% of the subscribers in the Existing Systems and the
Acquisition Systems. Addressability will enable the Company to increase revenues
derived from pay-per-view movies and events and new pay services such as
interactive video games, including The Sega Channel. In addition, with the
expanded advertising market delivery afforded by larger, contiguous system
clusters, the Company plans to intensify local spot advertising sales efforts.

STRATEGICALLY UPGRADE SYSTEMS. The Company will selectively upgrade its cable
systems to increase channel capacity, enhance signal quality and improve
technical reliability. The Company believes such technical upgrades will not
only enhance the potential for increasing revenues, but also will improve
customer and community relations and further solidify the Company's position as
the preeminent local provider of video services in its operating regions. In
addition, by implementing a hybrid fiber optic-backbone/coaxial cable design
across the portions of its cable plant that serve its highest subscriber
densities, the Company will effectively position itself for the introduction of
new broadband and interactive services. In its primary operating regions of New
England and Ohio/Kentucky, the Company intends to invest up to $49 million over
the next five years to establish a technical platform of at least 400 MHz to 450
MHz (54 to 62 channels) in a majority of its systems and 550 MHz to 750 MHz (78
to 100 channels) in certain of its larger markets. Over the same period, the
Company plans to invest up to an additional $11 million for addressable
converters in its two primary operating regions.

FOCUS ON THE CUSTOMER. The Company continually seeks to provide superior
customer service and improve programming and service choices for its
subscribers. By centralizing customer service at the regional level, all
functions that directly impact subscribers -- sales and marketing, customer
service and administration and technical support -- are implemented more quickly
and effectively. In addition, as a result of its consolidation efforts, the
Company has been able to enhance its customer service by increasing hours of
operations for its customer service functions, better coordinating service
calls, increasing responsiveness to customer inquiries and standardizing
maintenance procedures. While centralizing and improving customer service, the
Company has retained local payment and technical offices to maintain its
presence and visibility within its communities.

7
<PAGE> 10

THE EXISTING SYSTEMS AND THE ACQUISITION SYSTEMS

The following table illustrates certain subscriber and operating statistics for
the Company as of June 30, 1996 on a pro forma basis giving effect to the
purchase of the Acquisition Systems and the sale of the Disposition Systems (see
"--Summary Financial and Operating Data of the Company" for a description of
certain terms used in the following table):

<TABLE>
<CAPTION>
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AVG. MONTHLY
REVENUE PER
HOMES BASIC BASIC PREMIUM BASIC
CABLE SYSTEMS PASSED SUBSCRIBERS PENETRATION PENETRATION SUBSCRIBER(1)
-------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Existing Systems(2):
New England.............................. 82,985 60,747 73.2% 35.3% $28.01
Ohio/Kentucky............................ 159,662 116,261 72.8% 45.0% 29.73
Southeast................................ 62,082 40,898 65.9% 42.9% 24.23
-------- ----------- ----------- ----------- -------------
Total Existing Systems................. 304,729 217,906 71.5% 41.9% 28.22
Acquisition Systems(3):
ACE...................................... 107,073 82,415 77.0% 34.2% 30.37
Triax.................................... 79,237 53,159 67.1% 56.5% 30.28
Other.................................... 16,512 11,115 67.3% 43.5% 28.74
-------- ----------- ----------- ----------- -------------
Total Acquisition Systems.............. 202,822 146,689 72.3% 43.0% 30.21
Disposition Systems(4):.................... (13,233) (10,784) 81.5% 43.1% 25.20
-------- ----------- ----------- ----------- -------------
Total Systems.......................... 494,318 353,811 71.6% 42.3% $29.02
======== =========== =========== =========== ============
</TABLE>

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

(1) Average monthly revenue per basic subscriber equals revenue for the month
ended June 30, 1996 divided by the number of basic subscribers as of the end of
such period.

(2) The Existing Systems include cable television systems acquired from (i)
United Video Cablevision, Inc. ("UVC"), (ii) Longfellow Cable Company, Inc. and
two of its affiliates ("Longfellow"), (iii) C4 Media Cable Southeast, Limited
Partnership and County Cable Company, L.P. ("C4"), (iv) Americable International
Maine, Inc. ("Americable") and (v) affiliates of Cox Communications, Inc.
("Cox").

(3) The Acquisition Systems include the ACE Systems, Triax Systems, Grassroots
Systems and Penn/Ohio Systems. See "--The Acquisition Systems."

(4) The Disposition Systems include certain systems acquired from C4 in the
Southeast region. See "--The Disposition Systems."

8
<PAGE> 11

THE ACQUISITION SYSTEMS

ACE Systems. The Company has entered into an agreement with ACE to acquire
systems (the "ACE Systems") serving approximately 82,400 subscribers as of June
30, 1996 in Kentucky and Indiana for $146.0 million. The Company intends to
operate all of the ACE Systems as part of its Ohio/Kentucky cluster. It is
anticipated that this acquisition will be completed concurrently with or
promptly following the consummation of the Offering, although there can be no
assurances that this transaction will be consummated. The transaction is subject
to the approval of a bankruptcy court considering ACE's proposed plan of
reorganization. All classes of ACE's creditors whose approval is necessary have
approved the plan, and the Company expects the bankruptcy court to approve the
plan, including the ACE transaction.

Triax Systems. The Company has also entered into an agreement with Triax to
acquire systems (the "Triax Systems") serving approximately 53,200 subscribers
as of June 30, 1996 in Ohio, Kentucky, Virginia, West Virginia, Pennsylvania,
Maryland and North Carolina for $85.0 million. The Company intends to operate
the systems in Kentucky, Ohio and West Virginia, serving approximately 28,700
basic subscribers, as part of its Ohio/Kentucky cluster. The Company intends to
operate the systems in North Carolina, Virginia, Pennsylvania and Maryland,
serving approximately 24,500 basic subscribers, as part of its Southeast region.
It is anticipated that this acquisition will be completed in the third or fourth
quarter of 1996, although there can be no assurances that this transaction will
be consummated.

Upon acquisition and the subsequent integration of the ACE Systems and the Triax
Systems with the Existing Systems, the Company will serve over 200,000
subscribers in communities south of Columbus, Ohio to the southern perimeter of
Lexington, Kentucky. Within this region are ten county service areas along the
Interstate 75 "growth corridor," which is among the fastest growing areas in the
region. By 1997, it is anticipated that 30% of the Company's subscribers within
this region will be served by fiber-to-the-feeder 550 MHz or 750 MHz technical
plant.

Other Acquisitions. In addition to the acquisition of the ACE Systems and the
Triax Systems, the Company has recently acquired or entered into agreements to
acquire systems serving an aggregate of approximately 11,100 basic subscribers
as of June 30, 1996 for approximately $13.4 million. On August 30, 1996, the
Company purchased from Phoenix Grassroots Cable Systems, L.L.C. ("Grassroots")
systems (the "Grassroots Systems") serving approximately 7,800 basic subscribers
as of June 30, 1996 in Maine and New Hampshire for $9.6 million. In August 1996,
the Company entered into an agreement with SRW, Inc.'s Penn/Ohio Cablevision,
L.P. ("Penn/Ohio") to acquire systems (the "Penn/Ohio Systems") serving
approximately 3,300 subscribers as of June 30, 1996 in Ohio and Pennsylvania for
$3.8 million. It is anticipated that this acquisition will be completed in the
third or fourth quarter of 1996, although there can be no assurances that this
transaction will be consummated.

The Company believes that other acquisition opportunities exist, and the Company
is continuously engaged in discussions with other cable television system owners
and operators to explore such potential opportunities. Some of these potential
opportunities may involve systems serving substantial numbers of subscribers.
Although the Company does not currently have definitive agreements to acquire
systems other than those described herein, the Company intends to continue to
pursue, on an opportunistic basis, additional strategic acquisitions and smaller
"fill-in" acquisitions within its existing operating regions to enhance further
their operational and financial performance.

THE DISPOSITION SYSTEMS

On July 24, 1996, the Company sold its Chatsworth, Georgia system, representing
approximately 5,600 basic subscribers as of June 30, 1996, to an affiliate of
Helicon Partners for approximately $8.7 million. The Company also has entered
into an agreement to sell its Woodstock and New Market, Virginia systems,
representing approximately 5,100 subscribers, to Shenandoah Cable Television
Company, an affiliate of Shenandoah Telephone Company, for approximately $8.3
million. It is anticipated that this sale will be completed in the third or
fourth quarter of 1996, although there can be no assurances that this
transaction will be consummated. The aggregate sales price of approximately
$17.0 million for the Disposition Systems represents a per subscriber sales
price that is over 30% more than the average per subscriber acquisition cost of
the Existing Systems in the Southeast.

9
<PAGE> 12

THE TRANSACTIONS

Concurrently with or prior to the completion of the Offering, it is anticipated
that FrontierVision Partners, L.P. ("FVP"), the sole general partner and the
owner, directly and indirectly, of substantially all of the partnership
interests of the Company, will consummate a $76.0 million Rights Offering, the
net proceeds of which will be contributed as equity to the Company over time to
fund future acquisitions. The Company will use (i) $34.4 million of the proceeds
from the Rights Offering, (ii) $193.0 million of net proceeds from the Offering,
(iii) $16.9 million of proceeds (net of transaction costs) from the sale of the
Disposition Systems and (iv) $5.3 million of net working capital adjustment
related to the Acquisition Systems to (i) pay the purchase prices for the
Acquisition Systems, (ii) pay estimated transaction costs associated with the
purchase of the Acquisition Systems and (iii) repay existing indebtedness of
$4.9 million outstanding under the Senior Credit Facility. The Rights Offering,
the Offering, the sale of the Disposition Systems, the purchase of the
Acquisition Systems and such repayment of indebtedness under the Senior Credit
Facility are collectively referred to as the "Acquisition Transactions." To the
extent that there is any delay in consummating the purchase of any of the
Acquisition Systems, a portion of the net proceeds of the Offering corresponding
to the purchase price of such system may be applied to reduce temporarily
indebtedness for borrowings under the Senior Credit Facility. To the extent the
purchase of any of the Acquisition Systems is consummated prior to the
consummation of the Offering (as has already occurred in the case of the
Grassroots Systems), additional borrowings under the Senior Credit Facility may
be used to pay a portion of the purchase price therefor, in which event a
portion of the net proceeds of the Offering will be used to repay such
borrowings. See "Use of Proceeds," "The Partnership Agreements" and "Credit
Arrangements of the Company."

The following table sets forth the sources and uses of the proceeds to be
received by the Company in connection with the Acquisition Transactions
(determined as of June 30, 1996):

<TABLE>
<CAPTION>
--------
In thousands AMOUNT
--------
<S> <C>
SOURCES OF FUNDS:
Rights Offering(1).......................................................................... $ 34,400
% Senior Subordinated Notes due 2006(2)................................................... 193,000
Sale of Disposition Systems(3).............................................................. 16,860
Net working capital adjustment.............................................................. 5,312
--------
Total sources of funds.................................................................. $249,572
=========
USES OF FUNDS:
Purchase Acquisition Systems:
ACE....................................................................................... $146,000
Triax..................................................................................... 85,000
Grassroots and Penn/Ohio(4)............................................................... 13,400
--------
Total................................................................................... 244,400
Estimated purchase price adjustments(5)..................................................... (900)
Estimated transaction costs for Acquisition Systems......................................... 1,200
Repayment of Senior Credit Facility indebtedness............................................ 4,872
--------
Total uses of funds..................................................................... $249,572
=========
</TABLE>

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

(1) The approximately $41.4 million of net proceeds remaining from the Rights
Offering will be used to fund additional acquisitions. The size of the equity
commitments to be made available to FVOP through the Rights Offering may be
reduced if no later than six months after the closing of the Rights Offering,
the General Partner and the Advisory Committee of FVP determine that the
remaining equity commitments exceed the Company's projected requirements. Such
remaining equity commitments will expire on June 30, 1997, subject to the
election by the General Partner and approval by the Advisory Committee to extend
the commitment period to June 30, 1998. See "Management" and "The Partnership
Agreements."

(2) Aggregate proceeds of $200.0 million reduced by underwriting discounts of
$6.0 million and estimated Offering expenses of $1.0 million.

(3) Aggregate proceeds of $17.0 million reduced by approximately $0.1 million of
transaction costs.

(4) On August 30, 1996, the Company acquired the Grassroots Systems for
approximately $9.3 million, approximately $8.6 million of which was funded with
additional borrowings under the Senior Credit Facility, approximately $0.5
million of which was funded with proceeds from equity contributions and
approximately $0.2 million of which is represented by a net working capital
adjustment.

(5) Represents estimated contractual purchase price reductions that would be
effective if the purchase of the Acquisition Systems were consummated at June
30, 1996.

Effective as of April 9, 1996, and in conjunction with the acquisition of
systems from Cox, the Company amended and restated its credit facility to effect
an increase in the amount available to be borrowed thereunder from $130.0
million to $265.0 million (the "Credit Agreement Restatement"). The Company
received an additional $10.6 million from a draw down during August 1996 by FVP
(the "Equity Call") of equity commitments in place prior to the Rights Offering.
Concurrently with or prior to the consummation of the Offering, it is
anticipated that a subordinated note (the "UVC Note") in the aggregate principal
amount of $7.2 million issued by the Company in connection with the acquisition
of the systems from UVC, which UVC Note has accreted to $7.7 million as of June
30, 1996, will be converted into $5.0 million of Class A limited partnership
interests in the Company (the "Class A Partnership Interests"), with the balance
of the aggregate accreted principal amount of the UVC Note to be repaid in cash
(the "UVC Note Conversion"). See "Business--Development of the Systems--The
Existing Systems--UVC Systems" and "The Partnership Agreements--The Company
Partnership Agreement--Class A Partnership Interests." It is also anticipated
that the outstanding indebtedness under the Senior Credit Facility will be
reduced by $16.7 million (including the $4.9 million repayment listed in the
table above) from the aggregate of approximately $210.0 million outstanding at
June 30, 1996 (the "Credit Agreement Repayment"). The Credit Agreement
Restatement, the Equity Call, the UVC Note Conversion and the Credit Agreement
Repayment are collectively referred to herein as the "Other Transactions," and
the Acquisition Transactions and the Other Transactions are collectively
referred to herein as the "Transactions."

10
<PAGE> 13

THE OFFERING

SECURITIES OFFERED.................. $200.0 million aggregate principal
amount of % Senior Subordinated
Notes due 2006.

MATURITY DATE....................... , 2006.

INTEREST PAYMENT DATES.............. and , commencing
, 1997.

ISSUERS............................. The Notes are the joint and several
obligations of FVOP and Capital.

OPTIONAL REDEMPTION BY THE
ISSUERS............................. The Notes are not redeemable prior to
, 2001, except as set forth
below. The Notes will be redeemable at
the option of the Issuers, in whole or
in part, at any time on or after
, 2001, at the redemption prices
set forth herein, together with accrued
and unpaid interest to the redemption
date. In addition, prior to ,
1999, the Issuers may redeem up to 35%
of the principal amount of the Notes
with the net cash proceeds from one or
more Public Equity Offerings or
Strategic Equity Investments (as
defined in the Indenture governing the
Notes (the "Indenture")) at a
redemption price of % of the
principal amount thereof, together with
accrued and unpaid interest to the
redemption date; provided, however,
that at least 65% in aggregate
principal amount of the Notes
originally issued remains outstanding
immediately after any such redemption.

MANDATORY REDEMPTION BY THE
ISSUERS............................. None.

CHANGE OF CONTROL OFFER............. Upon a Change of Control, the Issuers
will be required to make an offer to
purchase all outstanding Notes at 101%
of the principal amount thereof,
together with accrued and unpaid
interest to the purchase date.

RANKING............................. The Notes are general unsecured
obligations of the Issuers and will
rank subordinate in right of payment to
all existing and future Senior
Indebtedness (as defined in the
Indenture) of the Issuers, including
indebtedness under the Senior Credit
Facility. The Notes will rank pari
passu in right of payment with any
other senior subordinated indebtedness
of the Issuers.

CERTAIN COVENANTS................... The Indenture will contain certain
covenants that, among other things,
limit the ability of each Issuer and
certain of its Subsidiaries to incur
additional Indebtedness, create certain
Liens, make certain Restricted
Payments, enter into certain
transactions with Affiliates, permit
dividend or other payment restrictions
to apply to certain Subsidiaries or
consummate certain merger,
consolidation or similar transactions.
In addition, in certain circumstances,
the Issuers will be required to offer
to purchase Notes at 100% of the
principal amount thereof with the net
proceeds of certain asset sales. These
covenants are subject to a number of
significant exceptions and
qualifications. See "Description of the
Notes."

RISK FACTORS

Prior to purchasing any of the Notes offered hereby, prospective investors
should consider carefully the risks set forth under "Risk Factors," in addition
to the other information contained in this Prospectus.

11
<PAGE> 14

SUMMARY FINANCIAL AND OPERATING DATA OF THE COMPANY

The following tables present summary financial data derived from the Company's
financial statements as of and for the period from inception (April 17, 1995)
through December 31, 1995 which have been audited by Arthur Andersen LLP,
independent public accountants, and summary operating data for such period. The
following tables also present unaudited summary financial data as of and for the
six months ended June 30, 1996 derived from the unaudited financial statements
of the Company and summary operating data for such period. In the opinion of
management, the unaudited interim financial statements have been prepared on the
same basis as the audited financial statements and include all adjustments,
which consist only of normal recurring adjustments, necessary to present fairly
the financial position and the results of operations for the interim period.
Financial and operating results for the six months ended June 30, 1996 are not
necessarily indicative of the results that may be expected for the full year.

In addition, the following tables present unaudited pro forma summary financial
and operating data for the Company as of and for the six months ended June 30,
1996 and the year ended December 31, 1995, as adjusted to give pro forma effect
to (i) in the case of statement of operations data, (a) the Offering and the
purchase of the Existing Systems as if such transactions had been consummated on
January 1, 1995 and (b) the purchase of the Existing Systems and the
Transactions as if such transactions had been consummated on January 1, 1995 and
(ii) in the case of balance sheet data, (a) the Offering as if it had been
consummated on June 30, 1996 and (b) the Transactions as if each Transaction had
been consummated on June 30, 1996. See "Pro Forma Financial Data." The unaudited
pro forma financial and operating data presented below are based upon the
historical financial statements of the Company and certain of the Existing
Systems and the Acquisition Systems. The unaudited pro forma data give effect to
the acquisitions under the purchase method of accounting and certain other
operating assumptions. See "Pro Forma Financial Data."

The unaudited summary pro forma financial data do not purport to represent what
the Company's results of operations or financial condition would have actually
been or operations of the Company in any future period would be if the
transactions that give rise to the pro forma adjustments had occurred on the
dates assumed. The following information is qualified by reference to and should
be read in conjunction with "Pro Forma Financial Data," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the audited
financial statements and related notes thereto of the Company and certain of the
Existing Systems and the Acquisition Systems included elsewhere in this
Prospectus.

12
<PAGE> 15

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30 YEAR ENDED DECEMBER 31
--------------------------------------------- -----------------------------
PRO FORMA FOR PRO FORMA FOR PRO FORMA FOR PRO FORMA FOR APRIL 17 TO
TRANSACTIONS THE OFFERING TRANSACTIONS THE OFFERING DECEMBER 31
AND EXISTING AND EXISTING AND EXISTING AND EXISTING -----------
In thousands, except ratios and SYSTEMS SYSTEMS ACTUAL SYSTEMS SYSTEMS ACTUAL
operating statistical data 1996 1996 1996 1995 1995 1995
------------- ------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................. $ 60,573 $ 35,463 $ 27,539 $ 116,962 $ 70,827 $ 4,369
Operating expenses................... 29,707 17,551 13,668 59,726 35,860 2,311
Corporate administrative expenses.... 1,605 940 1,265 3,029 1,905 127
Depreciation and amortization........ 30,906 18,109 13,595 59,720 35,041 2,308
Pre-acquisition expenses............. -- -- -- 940 940 940
------------ ------------- ----------- ------------- ------------- -----------
Operating income (loss).............. (1,645) (1,137) (989) (6,453) (2,919) (1,317)
Interest expense, net(1)............. (20,650) (13,529) (7,304) (41,289) (27,050) (1,386)
------------ ------------- ----------- ------------- ------------- -----------
Net income (loss).................... $ (22,295) $ (14,666) $ (8,293) $ (47,742) $ (29,969) $ (2,703)
============ ============= =========== ============= ============= ===========
BALANCE SHEET DATA
(END OF PERIOD):
Total assets......................... $ 553,082 $ 327,511 $ 320,511 $ 143,512
Total debt........................... 393,347 224,286 217,286 93,159
Partners' capital.................... 144,181 93,981 93,981 46,407
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(2)............................ $ 29,261 $ 16,972 $ 12,606 $ 53,267 $ 32,122 $ 991
EBITDA margin........................ 48.3% 47.9% 45.8% 45.5% 45.4% 22.7%
Total debt to EBITDA(3).............. 6.69 6.66
EBITDA to interest expense........... 1.40 1.23
Deficiency of earnings to fixed
charges(4)......................... $ 22,305 $ 14,666 $ 8,293 $ 47,766 $ 29,969 $ 2,703
OPERATING STATISTICAL DATA (END OF
PERIOD EXCEPT AVERAGE):
Homes passed......................... 494,318 304,729 304,729 490,610 288,428 125,295
Basic subscribers.................... 353,811 217,906 217,906 350,936 203,525 92,736
Basic penetration.................... 71.6% 71.5% 71.5% 71.5% 70.6% 74.0%
Premium units........................ 149,662 91,303 91,303 146,216 77,557 35,677
Premium penetration.................. 42.3% 41.9% 41.9% 41.7% 38.1% 38.5%
Average monthly revenue per basic
subscriber(5)...................... $ 29.02 $ 28.22 $ 28.22 $ 27.77 $ 29.00 $ 27.76
</TABLE>

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

(1) Pro forma interest expense is calculated assuming that all indebtedness
incurred to effect the purchase of the Existing Systems and all other debt
outstanding at June 30, 1996, to the extent deemed to be outstanding for
purposes of the pro forma presentation, accrued interest at the rates in effect
at June 30, 1996 and that the interest rate on the Notes was 11.5%. If the
actual interest rate were to increase or decrease by 25 basis points, pro forma
interest expense on the Notes would increase or decrease by $500,000 per annum.
Interest expense of $20,650, $13,529, $7,304, $41,289, $27,050 and $1,386 was
net of interest income of $257, $257, $257, $120, $120 and $120, respectively
(dollars in thousands).

(2) EBITDA is defined as net income before interest, taxes, depreciation and
amortization. The Company believes that EBITDA is a meaningful measure of
performance because it is commonly used in the cable television industry to
analyze and compare cable television companies on the basis of operating
performance, leverage and liquidity. In addition, the Senior Credit Facility and
the Indenture contain certain covenants, compliance with which is measured by
computations substantially similar to those used in determining EBITDA. See
"Credit Arrangements of the Company" and "Description of the Notes." However,
EBITDA is not intended to be a performance measure that should be regarded as an
alternative either to operating income or net income as an indicator of
operating performance or to cash flows as a measure of liquidity, as determined
in accordance with generally accepted accounting principles.

(3) For purposes of this computation, EBITDA is annualized for the quarter ended
June 30, 1996. This presentation is consistent with the incurrence of
indebtedness test in the Indenture. In addition, this ratio is commonly used in
the cable television industry as a measure of leverage.

(4) For purposes of this computation, earnings are defined as income (loss)
before income taxes and fixed charges. Fixed charges are defined as the sum of
(i) interest costs (including capitalized interest expense) and (ii)
amortization of deferred financing costs.

(5) Average monthly revenue per basic subscriber (i) for the period ended June
30, 1996 and for the period from inception (April 17, 1995) to December 31, 1995
equals revenue for the last month of the period divided by the number of basic
subscribers as of the end of such period and (ii) for all other periods equals
average monthly revenue for such period divided by the number of basic
subscribers as of the end of such period.

13
<PAGE> 16

RISK FACTORS

Prior to purchasing any of the Notes offered hereby, prospective investors
should consider carefully the following factors in addition to the other
information contained in this Prospectus. This Prospectus contains
forward-looking statements, within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act, which are inherently uncertain. Actual
results and events may differ significantly from those discussed in such
forward-looking statements. In addition to the other information set forth in
this Prospectus, factors that might cause or contribute to such differences
include, but are not limited to, the following risk factors.

SUBSTANTIAL LEVERAGE; INSUFFICIENCY OF EARNINGS TO COVER FIXED CHARGES

The Company is, and will continue to be, highly leveraged as a result of the
substantial indebtedness it has incurred, and intends to incur, to finance
acquisitions and expand its operations. As of June 30, 1996, the Company's total
indebtedness outstanding was approximately $217.3 million. As of June 30, 1996,
after giving pro forma effect to the Offering, the Company would have had
approximately $224.3 million of total indebtedness outstanding and after giving
pro forma effect to the Transactions, the Company would have had approximately
$393.3 million of total indebtedness outstanding. In addition, subject to the
restrictions in the Senior Credit Facility and the Indenture, the Company may
incur additional indebtedness, including indebtedness constituting Senior
Indebtedness, from time to time, to finance acquisitions in the future, for
capital expenditures or for general business purposes. The Company anticipates
that, in light of the amount of its existing indebtedness, it will continue to
have substantial leverage for the foreseeable future. The degree to which the
Company is leveraged could adversely affect the Company's ability to (i) service
the Notes, (ii) finance its operations and fund its capital expenditure
requirements, (iii) compete effectively, (iv) expand its business, (v) comply
with its obligations under its franchise agreements or (vi) operate under
adverse economic conditions. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources."

After giving pro forma effect to the Transactions and the acquisition of the
Existing Systems as if such transactions had occurred at January 1, 1995, the
Company's earnings before income taxes and fixed charges would have been
insufficient to cover its fixed charges for the six months ended June 30, 1996
and for the year ended December 31, 1995 by $22.3 million and $47.7 million,
respectively. Pro forma for the Offering and the purchase of the Existing
Systems as if each occurred on January 1, 1995, earnings before income taxes and
fixed charges were inadequate to cover fixed charges for the six months ended
June 30, 1996 and for the year ended December 31, 1995 by $14.7 million and
$30.0 million, respectively. However, for both periods, earnings are reduced by
substantial non-cash charges, principally consisting of depreciation and
amortization.

Since its founding in 1995, the Company has received from FVP aggregate capital
commitments of approximately $119.9 million and, as of June 30, 1996, the
Company had an aggregate of $210.0 million in bank indebtedness outstanding. The
Company's cash from these sources has been sufficient to finance its
acquisitions and, together with cash generated from operating activities, also
has been sufficient to meet the Company's debt service, working capital and
capital expenditure requirements. The ability of the Company to meet its debt
service and other obligations will depend upon the future performance of the
Company which, in turn, is subject to general economic conditions and to
financial, political, competitive, regulatory and other factors, many of which
are beyond the Company's control. The Company's ability to meet its debt service
and other obligations also may be affected by changes in prevailing interest
rates, as borrowings under the Senior Credit Facility will bear interest at
floating rates, subject to certain interest rate protection agreements. The
Company believes that it will continue to generate cash and obtain financing
sufficient to meet such requirements in the future; however, there can be no
assurances that the Company will be able to meet its debt service and other
obligations. If the Company were unable to do so, it would have to refinance its
indebtedness or obtain new financing. Although in the past the Company has been
able to obtain financing through equity investments and bank borrowings, there
can be no assurances that the Company will be able to do so in the future or
that, if the Company were able to do so, the terms available will be favorable
to the Company. See "Selected Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Credit Arrangements
of the Company" and "Description of the Notes."

14
<PAGE> 17

SUBORDINATION OF THE NOTES

The Notes will be general unsecured obligations of the Issuers and will rank
subordinate in right of payment to all existing and future Senior Indebtedness
of the Issuers, including the Company's obligations under the Senior Credit
Facility. The Notes will rank pari passu in right of payment with any other
senior subordinated indebtedness of the Issuers, other than indebtedness, if
any, that by its terms is expressly subordinated in right and priority of
payment to the Notes. At June 30, 1996, on a pro forma basis after giving effect
to the Transactions, the Company would have had approximately $193.3 million of
Senior Indebtedness (including $86,000 outstanding under capital leases and
excluding unused commitments of approximately $71.7 million under the Senior
Credit Facility) and Capital would have had no Senior Indebtedness. Additional
Senior Indebtedness may be incurred by the Issuers from time to time subject to
restrictions in the Senior Credit Facility and the Indenture. The lenders under
the Senior Credit Facility have a security interest in substantially all the
assets of, and partnership interests in, the Company and thereby have available
to them all of the remedies available to a secured creditor under applicable
law. See "--Substantial Leverage; Insufficiency of Earnings to Cover Fixed
Charges" and "Credit Arrangements of the Company." In the event of a bankruptcy,
insolvency or liquidation of the Company, there may not be sufficient assets
remaining to pay amounts due on any or all of the Notes then outstanding. See
"Description of the Notes-- Subordination."

RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS

The Indenture and the Senior Credit Facility impose restrictions that, among
other things, limit the amount of additional indebtedness that may be incurred
by the Company and impose limitations on, among other things, investments, loans
and other payments, certain transactions with affiliates and certain mergers and
acquisitions. The Senior Credit Facility also requires the Company to maintain
specified financial ratios and meet certain financial tests. The ability of the
Company to comply with such covenants and restrictions can be affected by events
beyond its control, and there can be no assurances that the Company will achieve
operating results that would permit compliance with such provisions. The breach
of any of the provisions of the Senior Credit Facility would, under certain
circumstances, result in defaults thereunder, permitting the lenders under the
Senior Credit Facility to accelerate the indebtedness under the Senior Credit
Facility. If the Company were unable to pay the amounts due in respect of the
Senior Credit Facility, the lenders thereunder could foreclose upon the assets
pledged to secure such payment. In such event, the holders of the Notes might
not be able to receive any payments, if ever, until the payment default was
cured or waived, any such acceleration was rescinded or the indebtedness under
the Senior Credit Facility was discharged or paid in full. Any of such events
would adversely affect the Issuers' ability to service the Notes.

KEY PERSONNEL

The Company's business is substantially dependent upon the performance of
certain key individuals, including Mr. Vaughn and Mr. Koo. Although the Company
maintains a strong management team, the loss of the services of Mr. Vaughn or
Mr. Koo could have a material adverse effect on the Company.

LIMITED OPERATING HISTORY

The Company was formed in July 1995 and has grown principally through
acquisitions. Prospective investors, therefore, have limited historical
financial information about the Company, and about the results that can be
achieved by the Company in managing the cable systems not previously managed by
the Company, upon which to base an evaluation of its performance and an
investment in the Notes. In addition, as a result of the Company's rapid growth
through acquisitions, past operating history is not necessarily indicative of
future results.

SIGNIFICANT CAPITAL EXPENDITURES

Consistent with its business strategy, the Company expects to upgrade a
significant portion of its cable television distribution systems over the next
several years to, among other things, increase bandwidth and channel capacity.
The Company's inability to upgrade its cable television systems could have a
material adverse effect on its operations and competitive position. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "Business."

15
<PAGE> 18

SIGNIFICANT COMPETITION IN THE CABLE TELEVISION INDUSTRY

Cable television systems face competition from alternative methods of receiving
and distributing television signals and from other sources of news, information
and entertainment, such as off-air television broadcast programming, newspapers,
movie theaters, live sporting events, online computer services and home video
products, including videotape cassette recorders. Because the Company's
franchises are generally non-exclusive, there is the potential for competition
with the Company's systems from other operators of cable television systems,
including systems operated by local governmental authorities, and from other
distribution systems capable of delivering programming to homes or businesses,
including direct broadcast satellite ("DBS") systems and multichannel,
multipoint distribution service ("MMDS") systems. In recent years, there has
been significant national growth in the number of subscribers to DBS services.
Subscribership to MMDS also is increasing and can be expected to grow as a
result of recent significant investments in and acquisitions of MMDS companies
by local telephone companies. Additionally, recent changes in federal law and
recent administrative and judicial decisions have removed certain of the
restrictions that have limited entry into the cable television business by
potential competitors such as telephone companies, registered utility holding
companies and their subsidiaries. Such developments will enable local telephone
companies to provide a wide variety of video services in the telephone company's
own service area which will be directly competitive with services provided by
cable television systems.

Many of the Company's potential competitors have substantially greater resources
than the Company, and the Company cannot predict the extent to which competition
will materialize in its franchise areas from other cable television operators,
other distribution systems for delivering video programming and other broadband
telecommunications services to the home, or from other potential competitors,
or, if such competition materializes, the extent of its effect on the Company.
See "Business--Competition" and "Legislation and Regulation."

NON-EXCLUSIVE FRANCHISES; NON-RENEWAL OR TERMINATION OF FRANCHISES

Cable television companies operate under franchises granted by local authorities
which are subject to renewal and renegotiation from time to time. The Company's
business is dependent upon the retention and renewal of its local franchises. A
franchise is generally granted for a fixed term ranging from five to 15 years
but in many cases is terminable if the franchisee fails to comply with the
material provisions thereof. The Company's franchises typically impose
conditions relating to the use and operation of the cable television system,
including requirements relating to the payment of fees, system bandwidth
capacity, customer service requirements, franchise renewal and termination. The
Cable Television Consumer Protection and Competition Act of 1992 (the "1992
Cable Act") prohibits franchising authorities from granting exclusive cable
television franchises and from unreasonably refusing to award additional
competitive franchises; it also permits municipal authorities to operate cable
television systems in their communities without franchises. The Cable
Communications Policy Act of 1984 (the "1984 Cable Act" and collectively with
the 1992 Cable Act, the "Cable Acts") provides, among other things, for an
orderly franchise renewal process in which franchise renewal will not be
unreasonably withheld or, if renewal is withheld, the franchising authority must
pay the operator the "fair market value" for the system covered by such
franchise. Although the Company believes that it generally has good
relationships with its franchise authorities, no assurances can be given that
the Company will be able to retain or renew such franchises or that the terms of
any such renewals will be on terms as favorable to the Company as the Company's
existing franchises. The non-renewal or termination of franchises relating to a
significant portion of the Company's subscribers could have a material adverse
effect on the Company's results of operations. See "Business--Franchises."

REGULATION IN THE CABLE TELEVISION INDUSTRY

The cable television industry is subject to extensive regulation by federal,
local and, in some instances, state governmental agencies. The Cable Acts, both
of which amended the Communications Act of 1934 (as amended, the "Communications
Act"), established a national policy to guide the development and regulation of
cable television systems. The Communications Act was recently substantially
amended by the Telecommunications Act of 1996 (the "1996 Telecom Act").
Principal responsibility for implementing the policies of the Cable Acts and the
1996 Telecom Act has been allocated between the Federal Communications
Commission (the "FCC") and state or local franchising authorities.

16
<PAGE> 19

Federal Law and Regulation. The 1992 Cable Act and the FCC's rules implementing
that Act generally have increased the administrative and operational expenses of
cable television systems and have resulted in additional regulatory oversight by
the FCC and local or state franchise authorities. The Cable Acts and the
corresponding FCC regulations have established, among other things, (i) rate
regulations, (ii) mandatory carriage and retransmission consent requirements
that require a cable system under certain circumstances to carry a local
broadcast station or to obtain consent to carry a local or distant broadcast
station, (iii) rules for franchise renewals and transfers, and (iv) other
requirements covering a variety of operational areas such as equal employment
opportunity and technical standards and customer service requirements.

The 1996 Telecom Act deregulates rates for certain cable programming services
tiers ("CPSTs") in 1999 for most MSOs (including the Company) and, for certain
small cable operators, immediately eliminates rate regulation of CPSTs, and, in
certain circumstances, basic services and equipment. The FCC is currently
developing permanent regulations to implement the rate deregulation provisions
of the 1996 Telecom Act. The Company is currently unable to predict the ultimate
effect of the 1992 Cable Act or the 1996 Telecom Act, the ultimate outcome of
the various FCC rulemaking proceedings, or the litigation challenging various
aspects of this federal legislation and the FCC's regulations implementing the
legislation.

State and Local Regulation. Cable television systems generally operate pursuant
to non-exclusive franchises, permits or licenses granted by a municipality or
other state or local governmental entity. The terms and conditions of franchises
vary materially from jurisdiction to jurisdiction. A number of states subject
cable systems to the jurisdiction of centralized state governmental agencies. To
date, no state in which the Company operates has enacted state level regulation.
The Company cannot predict whether any of the states in which it currently
operates will engage in such regulation in the future. See "Legislation and
Regulation."

RISKS RELATING TO ACQUISITION STRATEGY

A significant element of the Company's acquisition strategy is to expand in
certain regions of the United States by acquiring cable television systems
located in reasonable proximity to existing systems or of a sufficient size to
enable the acquired system to serve as the basis for a new local cluster. Any
acquisition may have an adverse effect upon the Company's operating results or
cash flow, particularly for acquisitions of new systems which must be integrated
with the Company's existing operations. There can be no assurances that the
Company will be able to integrate successfully any acquired business with its
existing operations or realize any efficiencies therefrom. There can also be no
assurances that any such acquisition, if consummated, will be profitable or that
the Company will be able to obtain any required financing to acquire additional
systems in the future. In addition, the Company's purchase of the Acquisition
Systems is subject to, among other things, the satisfaction of customary closing
conditions and the receipt of certain third-party or governmental approvals,
including the consent of franchising authorities and, in the case of the
Acquisition Systems to be purchased from ACE, the satisfactory conclusion of
certain voluntary bankruptcy proceedings involving ACE. There can be no
assurances that such closing conditions will be satisfied or that the
consummation of the purchase of any of the Acquisition Systems will not
otherwise be unduly delayed. See "Business--Business Strategy."

ABILITY TO PURCHASE NOTES UPON A CHANGE OF CONTROL

In order to purchase the Notes upon the occurrence of a Change of Control (as
defined in the Indenture governing the Notes), the Issuers may be required to
seek additional financings or engage in asset sales or similar transactions.
There can be no assurance that the Issuers will have sufficient funds to
purchase the Notes upon a Change of Control. In addition, the Senior Credit
Facility includes "change of control" provisions that permit the bank lenders
thereunder to accelerate the repayment of indebtedness under the Senior Credit
Facility (which is senior in right of payment to the Notes), as well as other
provisions that restrict the ability of the Issuers to consummate an offer to
purchase outstanding Notes in connection with a Change of Control. See "Credit
Arrangements of the Company" and "Description of the Notes."

17
<PAGE> 20

ABSENCE OF PUBLIC MARKET FOR THE NOTES

The Notes are a new issue of securities for which there is currently no
established market. If the Notes are traded after their initial issuance, they
may trade at a discount from their initial offering price, depending upon
prevailing interest rates, the market for similar securities and other factors.
The Underwriters have informed the Issuers that, subject to applicable laws and
regulations, they currently intend to make a market in the Notes. However, the
Underwriters are not obligated to do so, and any such market making may be
discontinued at any time without notice. Therefore, no assurances can be given
as to whether an active trading market will develop for the Notes. The Issuers
do not intend to apply for listing of the Notes on any securities exchange. See
"Underwriting."

18
<PAGE> 21

USE OF PROCEEDS

The net proceeds to be received by the Company from the Offering are estimated
to be approximately $193.0 million. The Company will use such net proceeds,
together with (i) $34.4 million of the proceeds from the Rights Offering, (ii)
$16.9 million of proceeds (net of transaction costs) from the sale of the
Disposition Systems and (iii) $5.3 million of net working capital adjustment
related to the Acquisition Systems to (i) pay the purchase prices for the
Acquisition Systems, (ii) pay estimated transaction costs associated with the
purchase of the Acquisition Systems and (iii) repay existing indebtedness of
$4.9 million outstanding under the Senior Credit Facility. To the extent that
there is any delay in consummating the purchase of any of the Acquisition
Systems, a portion of the net proceeds of the Offering corresponding to the
purchase price of such system may be applied to reduce temporarily indebtedness
for borrowings under the Senior Credit Facility. To the extent the purchase of
any of the Acquisition Systems is consummated prior to the consummation of the
Offering (as has already occurred in the case of the Grassroots Systems),
additional borrowings under the Senior Credit Facility may be used to pay a
portion of the purchase price therefor, in which event a portion of the net
proceeds of the Offering will be used to repay such borrowings. See "Prospectus
Summary--The Transactions," "The Partnership Agreements" and "Credit
Arrangements of the Company."

The following table sets forth the sources and uses of the proceeds to be
received by the Company in connection with the Acquisition Transactions
(determined as of June 30, 1996):

<TABLE>
<CAPTION>
--------
In thousands AMOUNT
--------
<S> <C>
SOURCES OF FUNDS:
Rights Offering(1)................................................................ $ 34,400
% Senior Subordinated Notes due 2006(2)......................................... 193,000
Sale of Disposition Systems(3).................................................... 16,860
Net working capital adjustment.................................................... 5,312
--------
Total sources of funds....................................................... $249,572
========
USES OF FUNDS:
Purchase Acquisition Systems:
ACE............................................................................. $146,000
Triax........................................................................... 85,000
Grassroots and Penn/Ohio(4)..................................................... 13,400
--------
Total........................................................................ 244,400
Estimated purchase price adjustments(5)........................................... (900)
Estimated transaction costs for Acquisition Systems............................... 1,200
Repayment of Senior Credit Facility indebtedness.................................. 4,872
--------
Total uses of funds.......................................................... $249,572
========
</TABLE>

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

(2) Aggregate proceeds of $200.0 million reduced by underwriting discounts of
$6.0 million and estimated Offering expenses of $1.0 million.

(3) Aggregate proceeds of $17.0 million reduced by approximately $0.1 million of
transaction costs.

(5) Represents estimated contractual purchase price reductions that would be
effective if the purchase of the Acquisition Systems were consummated at June
30, 1996.

19
<PAGE> 22

CAPITALIZATION

The following table sets forth (i) the actual capitalization of the Company at
June 30, 1996, (ii) the Company's capitalization at June 30, 1996 as adjusted to
give effect to the Offering as if such transaction had been consummated as of
June 30, 1996, and (iii) the Company's capitalization on a pro forma basis to
give effect to the Transactions as if each Transaction had been consummated as
of June 30, 1996. See "Use of Proceeds" and "Pro Forma Financial Data."

<TABLE>
<CAPTION>
-----------------------------------
AS OF JUNE 30, 1996
------------------------------------
ACTUAL
In thousands ACTUAL AS ADJUSTED PRO FORMA
-------- ----------- ---------
<S> <C> <C> <C>
INDEBTEDNESS:
Senior Credit Facility(1).................................. $210,000 $ 17,000 $193,261
% Senior Subordinated Notes due 2006..................... -- 200,000 200,000
Capital leases............................................. 86 86 86
UVC Note(2)................................................ 7,200 7,200 --
-------- ----------- ---------
Total indebtedness...................................... 217,286 224,286 393,347
PARTNERS' CAPITAL:
Class A Partnership Interests(2)........................... -- -- 5,000
Other partnership interests................................ 93,981 93,981 139,181
-------- ----------- ---------
Total partners' capital................................. 93,981 93,981 144,181
-------- ----------- ---------
Total capitalization.................................... $311,267 $ 318,267 $537,528
======== ======== ========
</TABLE>

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

(1) On a pro forma basis, after giving effect to the Transactions, $71.7 million
aggregate principal amount will be unused and available for borrowing.

(2) Concurrently with or prior to the consummation of the Offering, it is
anticipated that UVC will convert $5.0 million aggregate principal amount of the
UVC Note into Class A Partnership Interests and the balance of accrued and
unpaid interest and principal under the UVC Note will be repaid. See "The
Partnership Agreements--The Company Partnership Agreement--Class A Partnership
Interests."

20
<PAGE> 23

SELECTED FINANCIAL DATA

The following tables present selected financial data derived from the Company's
financial statements as of and for the period from inception (April 17, 1995)
through December 31, 1995 which have been audited by Arthur Andersen LLP,
independent public accountants, and selected operating data for such period. The
following tables also present selected financial data as of and for the six
months ended June 30, 1996 derived from the unaudited financial statements of
the Company and selected operating data for such period. In the opinion of
management, the unaudited financial statements have been prepared on the same
basis as the audited financial statements and include all adjustments, which
consist only of normal recurring adjustments, necessary to present fairly the
financial position and the results of operations for the interim period.
Financial and operating results for the six months ended June 30, 1996 are not
necessarily indicative of the results that may be expected for the full year.

In addition, the following tables present unaudited pro forma selected financial
and operating data for the Company as of and for the six months ended June 30,
1996 and the year ended December 31, 1995, as adjusted to give pro forma effect
to (i) in the case of statement of operations data, (a) the Offering and the
purchase of the Existing Systems as if such transactions had been consummated on
January 1, 1995 and (b) the purchase of the Existing Systems and the
Transactions as if such transactions had been consummated on January 1, 1995 and
(ii) in the case of balance sheet data, (a) the Offering as if such had been
consummated on June 30, 1996 and (b) the Transactions as if each Transaction had
been consummated on June 30, 1996. See "Pro Forma Financial Data." The unaudited
pro forma data give pro forma effect to the acquisitions under the purchase
method of accounting and certain other operating assumptions. See "Pro Forma
Financial Data."

The unaudited pro forma financial data do not purport to represent what the
Company's results of operations or financial condition would have actually been
or operations of the Company in any future period would be if the transactions
that give rise to the pro forma adjustments had occurred on the dates assumed.
The following information is qualified by reference to and should be read in
conjunction with "Pro Forma Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the audited
financial statements and related notes thereto of the Company and certain of the
Existing Systems and the Acquisition Systems included elsewhere in this
Prospectus.

21
<PAGE> 24

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30 YEAR ENDED DECEMBER 31
--------------------------------------------- -----------------------------
PRO FORMA FOR PRO FORMA FOR PRO FORMA FOR PRO FORMA FOR APRIL 17 TO
TRANSACTIONS THE OFFERING TRANSACTIONS THE OFFERING DECEMBER 31
AND EXISTING AND EXISTING AND EXISTING AND EXISTING -----------
In thousands, except ratios and SYSTEMS SYSTEMS ACTUAL SYSTEMS SYSTEMS ACTUAL
operating statistical data 1996 1996 1996 1995 1995 1995
-------------- ------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................. $ 60,573 $ 35,463 $ 27,539 $ 116,962 $ 70,827 $ 4,369
Operating expenses................... 29,707 17,551 13,668 59,726 35,860 2,311
Corporate administrative expenses.... 1,605 940 1,265 3,029 1,905 127
Depreciation and amortization........ 30,906 18,109 13,595 59,720 35,041 2,308
Pre-acquisition expenses............. -- -- -- 940 940 940
-------------- ------------- ----------- ------------- ------------- -----------
Operating income (loss).............. (1,645) (1,137) (989) (6,453) (2,919) (1,317)
Interest expense, net(1)............. (20,650) (13,529) (7,304) (41,289) (27,050) (1,386)
-------------- ------------- ----------- ------------- ------------- -----------
Net income (loss).................... $ (22,295) $ (14,666) $ (8,293) $ (47,742) $ (29,969) $ (2,703)
============== ============= =========== ============= ============= ===========
BALANCE SHEET DATA
(END OF PERIOD):
Total assets......................... $ 553,082 $ 327,511 $ 320,511 $ 143,512
Total debt........................... 393,347 224,286 217,286 93,159
Partners' capital.................... 144,181 93,981 93,981 46,407
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(2)............................ $ 29,261 $ 16,972 $ 12,606 $ 53,267 $ 32,122 $ 991
EBITDA margin........................ 48.3% 47.9% 45.8% 45.5% 45.4% 22.7%
Total debt to EBITDA(3).............. 6.69 6.66
EBITDA to interest expense........... 1.40 1.23
Deficiency of earnings to fixed
charges(4)......................... $ 22,305 $ 14,666 $ 8,293 $ 47,766 $ 29,969 $ 2,703
OPERATING STATISTICAL DATA (END OF
PERIOD EXCEPT AVERAGE):
Homes passed......................... 494,318 304,729 304,729 490,610 288,428 125,295
Basic subscribers.................... 353,811 217,906 217,906 350,936 203,525 92,736
Basic penetration.................... 71.6% 71.5% 71.5% 71.5% 70.6% 74.0%
Premium units........................ 149,662 91,303 91,303 146,216 77,557 35,677
Premium penetration.................. 42.3% 41.9% 41.9% 41.7% 38.1% 38.5%
Average monthly revenue per basic
subscriber(5)...................... $ 29.02 $ 28.22 $ 28.22 $ 27.77 $ 29.00 $ 27.76
</TABLE>

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

(2) EBITDA is defined as net income before interest, taxes, depreciation and
amortization. The Company believes that EBITDA is a meaningful measure of
performance because it is commonly used in the cable television industry to
analyze and compare cable television companies on the basis of operating
performance, leverage and liquidity. In addition the Senior Credit Facility and
the Indenture contain certain covenants, compliance with which is measured by
computations substantially similar to those used in determining EBITDA. See
"Credit Arrangements of the Company" and "Description of the Notes." However,
EBITDA is not intended to be a performance measure that should be regarded as an
alternative either to operating income or net income as an indicator of
operating performance or to cash flows as a measure of liquidity, as determined
in accordance with generally accepted accounting principles.

22
<PAGE> 25

SUMMARY COMBINED SELECTED HISTORICAL FINANCIAL DATA OF
CERTAIN EXISTING SYSTEMS AND ACQUISITION SYSTEMS

The summary combined selected historical financial data presented below
represent the combined historical financial data of certain of the Existing
Systems and the Acquisition Systems. Combined financial data do not include
results of operations of the systems purchased from UVC and Longfellow during
the period in 1995 when such systems were owned by the Company. The presentation
is made on two bases for both the Existing Systems and the Acquisition Systems.
First, information for the Existing Systems is provided on a combined basis as
of and for the year ended December 31, 1995. Second, combined historical
financial data is presented as of and for the years ended December 31, 1995,
1994 and 1993 for certain of the Existing Systems, which represented
approximately 96% of the Existing Systems in terms of number of basic
subscribers, on a pro forma basis as of June 30, 1996 and include only the
systems purchased from UVC, C4 and Cox (collectively the "Acquired Predecessor
Systems"). Similarly, information for the Acquisition Systems is provided on a
combined basis as of and for the year ended December 31, 1995. In addition,
combined historical financial data is presented as of and for the years ended
December 31, 1995, 1994 and 1993 for the ACE and Triax systems (collectively the
"Probable Predecessor Acquisition Systems"), which represented approximately 93%
of the Acquisition Systems in terms of the number of basic subscribers, on a pro
forma basis as of June 30, 1996.

The summary unaudited combined selected historical financial data presented
below are derived from the audited and unaudited historical financial statements
of the Existing Systems and the Acquisition Systems and should be read in
conjunction with the audited financial statements and related notes thereto of
the Acquired Predecessor Systems and the Probable Predecessor Acquisition
Systems and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus. The combined
selected financial data set forth below represent the combined results of
operations for the systems for periods during which the systems were not owned
by the Company and, accordingly, do not reflect any purchase accounting
adjustments or any changes in the operation or management of the systems that
the Company has made since the date of acquisition or that it intends to make in
the future. Accordingly, the Company does not believe that such operating
results are indicative of future operating results of the Company.

<TABLE>
<CAPTION>
----------------------------------------------------------
EXISTING SYSTEMS
----------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------
EXISTING SYSTEMS ACQUIRED PREDECESSOR SYSTEMS
---------------- --------------------------------------
In thousands 1995(1)(2) 1995(3)(4) 1994(5)(6) 1993(5)(6)
---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................................... $ 66,458 $ 63,897 $ 64,431 $ 63,383
Operating expenses............................ 37,829 35,820 35,443 34,647
Depreciation and amortization................. 24,080 23,726 22,038 20,324
---------------- ---------- ---------- ----------
Operating income.............................. 4,549 4,351 6,950 8,412
Interest expense.............................. (12,251) (12,216) (11,905) (11,763)
Other expenses................................ (3,898) (3,898) (3,836) (3,450)
---------------- ---------- ---------- ----------
Net loss...................................... $ (11,600) $ (11,763) $ (8,791) $ (6,801)
================ ========== ========== ==========
BALANCE SHEET DATA (END OF PERIOD):
Total assets.................................. $204,657 $195,341 $132,016 $ 70,399
Total debt.................................... 68,545 60,166 60,166 60,166
</TABLE>

23
<PAGE> 26

<TABLE>
<CAPTION>
----------------------------------------------------------------
ACQUISITION SYSTEMS
----------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------
ACQUISITION SYSTEMS PROBABLE PREDECESSOR ACQUISITION SYSTEMS
------------------- -----------------------------------------
In thousands 1995(7)(8) 1995(9)(10) 1994(9)(10) 1993(9)(10)
------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................. $ 49,696 $ 45,868 $ 40,937 $ 32,788
Operating expenses....................... 28,940 26,278 23,200 18,055
Depreciation and amortization............ 19,939 18,628 24,307 21,539
------------------- ----------- ----------- -----------
Operating income......................... 817 962 (6,570) (6,806)
Interest expense......................... (26,397) (25,682) (22,601) (19,467)
Other expense............................ (510) (510) 1,266 --
------------------- ----------- ----------- -----------
Net loss................................. $ (26,090) $ (25,230) $ (27,905) $ (26,273)
=================== =========== =========== ===========
BALANCE SHEET DATA (END OF PERIOD):
Total assets............................. $ 97,121 $ 92,912 $ 96,804 $111,500
Total debt............................... 220,296 210,252 206,131 195,153
</TABLE>

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

(1) Includes the combined results of operations of systems purchased from UVC,
Longfellow, C4, Americable and Cox for the period ended December 31, 1995
(except for UVC and Longfellow, which is for the period ended November 8, 1995
and November 20, 1995, respectively). As the results of operations of systems
purchased from UVC and Longfellow are included in the Company's historical
results of operations subsequent to the date of the Company's acquisition
(November 9, 1995 and November 21, 1995, respectively), the amounts do not
include $4.4 million in revenues, $2.4 million in operating expenses and $2.3
million in depreciation and amortization (computed after the application of
purchase accounting adjustments) attributable to such systems.

(2) Includes combined balance sheet data for systems purchased from UVC and
Longfellow as of November 9, 1995 and November 21, 1995, the dates of the
Company's acquisition thereof, and combined balance sheet data for systems
purchased from C4, Americable and Cox as of December 31, 1995, because such
acquisitions occurred after December 31, 1995.

(3) Includes the combined results of operations of systems purchased from UVC,
C4 and Cox for the year ended December 31, 1995 (except for UVC, which is for
the period ended November 8, 1995). As the results of operations of systems
purchased from UVC are included in the Company's historical results of
operations subsequent to the date of the Company's acquisition thereof (November
9, 1995), the amounts do not include $4.2 million in revenues, $2.4 million in
operating expenses and $2.2 million in depreciation and amortization (computed
after the application of purchase accounting adjustments) attributable to such
systems.

(4) Includes combined balance sheet data for systems purchased from UVC as of
November 9, 1995, the date of the Company's acquisition thereof, and combined
balance sheet data for systems purchased from C4 and Cox as of December 31,
1995, because such acquisitions occurred after that date.

(5) Includes the combined results of operations of systems purchased from UVC,
C4 and Cox for the years ended December 31, 1994 and 1993.

(6) Includes combined balance sheet data for systems purchased from UVC, C4 and
Cox as of December 31, 1994 and 1993.

(7) Includes the combined results of operations of systems purchased or expected
to be purchased from ACE, Triax, Grassroots and Penn/Ohio for the year ended
December 31, 1995.

(8) Includes combined balance sheet data for systems purchased or expected to be
purchased from ACE, Triax, Grassroots and Penn/Ohio.

(9) Includes the combined results of operations of systems expected to be
purchased from ACE and Triax for the years ended December 31, 1995, 1994 and
1993.

(10) Includes combined balance sheet data for systems expected to be purchased
from ACE and Triax as of December 31, 1995, 1994 and 1993.

24
<PAGE> 27

PRO FORMA FINANCIAL DATA

The unaudited pro forma financial data presented below are derived from the
historical financial statements of the Company and the Existing Systems and the
Acquisition Systems. The unaudited pro forma consolidated statement of
operations data for the six months ended June 30, 1996 and for the year ended
December 31, 1995 give pro forma effect to (a) the Offering and the purchase of
the Existing Systems as if such transactions had been consummated on January 1,
1995 and (b) the Transactions and the purchase of the Existing Systems as if
such transactions had been consummated on January 1, 1995. The unaudited pro
forma balance sheet data as of June 30, 1996 give pro forma effect to (a) the
Offering as if it had been consummated on June 30, 1996 and (b) the Transactions
as if each Transaction had been consummated on June 30, 1996. The Transactions
consist of the Rights Offering, the Offering, the sale of the Disposition
Systems, the purchase of the Acquisition Systems, the Credit Agreement
Restatement, the Equity Call, the UVC Note Conversion and the Credit Agreement
Repayment. The Rights Offering and the UVC Note Conversion are expected to be
consummated concurrently with or prior to the closing of the Offering.

The unaudited pro forma financial data give effect to the acquisitions described
above under the purchase method of accounting and are based upon the assumptions
and adjustments described in the accompanying notes to the unaudited pro forma
financial statements presented on the following pages. The allocations of the
total purchase price for certain of the Existing Systems as well as each of the
Acquisition Systems are based on preliminary estimates and are subject to final
allocation adjustments.

The unaudited pro forma financial statements may not be indicative of the
results that actually would have occurred if the acquisitions and other
transactions described above had been completed and in effect for the periods
indicated or the results that may be obtained in the future. The unaudited pro
forma financial data presented below should be read in conjunction with the
audited and unaudited historical financial statements and related notes thereto
of the Company and certain of the Existing Systems and the Acquisition Systems
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Prospectus.

25
<PAGE> 28

FRONTIERVISION OPERATING PARTNERS, L.P.

UNAUDITED PRO FORMA
FINANCIAL STATEMENTS
(FOR THE SIX MONTHS ENDED AND AS OF JUNE 30, 1996)

(In $ thousands)

<TABLE>
<CAPTION>
----------------------------------------------
<S> <C> <C> <C>
EXISTING SYSTEMS
----------------------------------------------

<CAPTION>
AMERICABLE
C4 SYSTEMS SYSTEMS
ACTUAL ACQUISITION(A) ACQUISITION(B)
-------- -------------- --------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
Revenues.......................... 27,539 945 284
Expenses..........................
System operations............... 13,668 579 181
Corporate administrative
expense........................ 1,265 67 41
Depreciation and amortization... 13,595 463 148
Pre-acquisition expenses........
-------- -------------- --------------
Operating income (loss)........... (989) (164) (86)
Interest expense, net............. (7,304) (684) (12)
Other income (expense)............
Minority interest in loss of
subsidiary...................... 10
-------- -------------- --------------
Net income (loss) before income
taxes........................... (8,293) (838) (98)
Provision for income taxes........
-------- -------------- --------------
Net income (loss)................. (8,293) (838) (98)
======== =========== ===========
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents......... 1,409
Accounts receivable, net.......... 3,399
Prepaid expenses.................. 904
Property and equipment, net....... 120,403
Franchise costs, net.............. 103,722
Covenant not to compete, net...... 15,999
Subscriber lists, net............. 53,106
Goodwill, net..................... 12,832
Deferred financing costs and
other, net...................... 5,737
Earnest money deposits............ 3,000
--------
Total assets...................... 320,511
========
Accounts payable.................. 795
Accrued liabilities............... 4,351
Subscriber prepayments and
deposits........................ 1,483
Accrued interest payable.......... 2,615
Debt.............................. 217,286
Partners' capital................. 93,981
--------
Total liabilities and partners'
capital......................... 320,511
========

PRO FORMA
ADJUSTMENTS FOR
EXISTING SYSTEMS
COX SYSTEMS AND SENIOR
ACQUISITION(C) CREDIT FACILITY
-------------- ----------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
Revenues.......................... 6,695
Expenses..........................
System operations............... 3,250 (127)(d)
Corporate administrative
expense........................ 321 (754)(e)
Depreciation and amortization... 1,044 2,859(f)
Pre-acquisition expenses........
-------------- ----------------
Operating income (loss)........... 2,080 (1,978)
Interest expense, net............. (5) (1,852)(g)
Other income (expense)............
Minority interest in loss of
subsidiary...................... (10)(h)
-------------- ----------------
Net income (loss) before income
taxes........................... 2,075 (3,840)
Provision for income taxes........
-------------- ----------------
Net income (loss)................. 2,075 (3,840)
=========== ==============
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents.........
Accounts receivable, net..........
Prepaid expenses..................
Property and equipment, net.......
Franchise costs, net..............
Covenant not to compete, net......
Subscriber lists, net.............
Goodwill, net.....................
Deferred financing costs and
other, net......................

Earnest money deposits............

Total assets......................

Accounts payable..................
Accrued liabilities...............
Subscriber prepayments and
deposits........................
Accrued interest payable..........
Debt..............................

Partners' capital.................

Total liabilities and partners'
capital.........................

PRO FORMA SUBTOTAL
ADJUSTMENTS PRO FORMA
FOR THE OFFERING AND
OFFERING(I) EXISTING SYSTEMS
----------- -----------------
STATEMENT OF OPERATIONS
Revenues.......................... 35,463
Expenses..........................
System operations............... 17,551
Corporate administrative
expense........................ 940
Depreciation and amortization... 18,109
Pre-acquisition expenses........ 0
----------- -----------------
Operating income (loss)........... 0 (1,137)
Interest expense, net............. (3,672)(j) (13,529)
Other income (expense)............ 0
Minority interest in loss of
subsidiary...................... 0
----------- -----------------
Net income (loss) before income
taxes........................... (3,672) (14,666)
Provision for income taxes........ 0
----------- -----------------
Net income (loss)................. (3,672) (14,666)
========== ==============
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents......... 1,409
Accounts receivable, net.......... 3,399
Prepaid expenses.................. 904
Property and equipment, net....... 120,403
Franchise costs, net.............. 103,722
Covenant not to compete, net...... 15,999
Subscriber lists, net............. 53,106
Goodwill, net..................... 12,832
Deferred financing costs and
other, net...................... 7,000(k) 12,737

Earnest money deposits............ 3,000
----------- -----------------
Total assets...................... 7,000 327,511
========== ==============
Accounts payable.................. 795
Accrued liabilities............... 4,351
Subscriber prepayments and
deposits........................ 1,483
Accrued interest payable.......... 2,615
Debt.............................. (193,000)(k) 224,286
200,000(k)
Partners' capital................. 93,981

----------- -----------------
Total liabilities and partners'
capital......................... 7,000 327,511
========== ==============

ACQUISITION SYSTEMS
-------------------------------------------

GRASSROOTS
AND PRO FORMA
ACE TRIAX PENN/OHIO ADJUSTMENTS
SYSTEMS SYSTEMS SYSTEMS FOR ACQUISITION
ACQUISITION ACQUISITION ACQUISITIONS SYSTEMS
------- ------- -------------- ----------------
STATEMENT OF OPERATIONS
Revenues.......................... 15,241 9,603 1,897
Expenses..........................
System operations............... 8,037 4,773 896 (724)(l)
Corporate administrative
expense........................ 582 627 97 (559)(m)
Depreciation and amortization... 5,503 3,699 655 3,260(n)
Pre-acquisition expenses........
------- ------- -------------- ----------------
Operating income (loss)........... 1,119 504 249 (1,977)
Interest expense, net............. (12,643) (1,524) (589) 6,639(o)
Other income (expense)............ (581) 581(p)
Minority interest in loss of
subsidiary......................
------- ------- -------------- ----------------
Net income (loss) before income
taxes........................... (12,105) (1,020) (340) 5,243
Provision for income taxes........
------- ------- -------------- ----------------
Net income (loss)................. (12,105) (1,020) (340) 5,243
========= ========= ========== =============
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents......... 1,536 3,169 599 (5,304)(n)
Accounts receivable, net.......... 359 577 224
Prepaid expenses.................. 198 168 5
Property and equipment, net....... 25,906 36,786 8,152 30,960(n)
Franchise costs, net.............. 1,114 8,703 310 77,077(n)
Covenant not to compete, net...... 32 10 8,225(n)
Subscriber lists, net............. 617 2,045 36,185(n)
Goodwill, net..................... 3,527 3,851(n)
Deferred financing costs and
other, net...................... 214 836 17 1,200(n)
(1,067)(n)
Earnest money deposits............ (3,000)(n)
------- ------- -------------- ----------------
Total assets...................... 33,503 50,239 11,362 148,127
========= ========= ========== =============
Accounts payable.................. 3,968 1,617 721
Accrued liabilities............... 154 159 1
Subscriber prepayments and
deposits........................ 129 77 17
Accrued interest payable.......... 6,022 223 15 (6,260)(q)
Debt.............................. 187,473 40,277 1,857 191,388(n)
(229,607)(q)
Partners' capital................. (164,243) 7,886 8,751 45,000(r)
147,606(q)
------- ------- -------------- ----------------
Total liabilities and partners'
capital......................... 33,503 50,239 11,362 148,127
========= ========= ========== =============

PRO FORMA
EFFECT OF
PROPOSED
SALE OF
PRO FORMA THE
EFFECT OF THE DISPOSITION PRO FORMA
UVC NOTE SYSTEMS(U) COMBINED
------------- --------- ---------
STATEMENT OF OPERATIONS
Revenues.......................... (1,631) 60,573
Expenses..........................
System operations............... (826) 29,707
Corporate administrative
expense........................ (82) 1,605
Depreciation and amortization... (320) 30,906
Pre-acquisition expenses........ 0
------------- --------- ---------
Operating income (loss)........... 0 (403) (1,645)
Interest expense, net............. 347(s) 649(v) (20,650)
Other income (expense)............ 0
Minority interest in loss of
subsidiary...................... 0
------------- --------- ---------
Net income (loss) before income
taxes........................... 347 246 (22,295)
Provision for income taxes........ 0
------------- --------- ---------
Net income (loss)................. 347 246 (22,295)
=========== ========= =========
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents......... (1,000)(t) 409
Accounts receivable, net.......... 4,559
Prepaid expenses.................. 1,275
Property and equipment, net....... (5,264) 216,943
Franchise costs, net.............. (9,711) 181,215
Covenant not to compete, net...... (1,108) 23,158
Subscriber lists, net............. 91,953
Goodwill, net..................... (577) 19,633
Deferred financing costs and
other, net...................... 13,937

Earnest money deposits............ 0
------------- --------- ---------
Total assets...................... (1,000) (16,660) 553,082
=========== ========= =========
Accounts payable.................. 7,101
Accrued liabilities............... 4,665
Subscriber prepayments and
deposits........................ 1,706
Accrued interest payable.......... (533)(t) 2,082
Debt.............................. (7,200)(t) (16,860) 393,347
1,733(t)
Partners' capital................. 5,000(t) 200 144,181

------------- --------- ---------
Total liabilities and partners'
capital......................... (1,000) (16,660) 553,082
=========== ========= =========
</TABLE>

26
<PAGE> 29

FOOTNOTES TO THE PRO FORMA FINANCIAL INFORMATION AS OF JUNE 30, 1996

(In thousands)

(a) The C4 systems were acquired on February 1, 1996, and, therefore, the
balance sheet data for such systems are included in the Company's June 30, 1996
historical balance sheet.

(b) The Americable systems were acquired on March 29, 1996, and, therefore, the
balance sheet data for such systems are included in the Company's June 30, 1996
historical balance sheet.

(c) The Cox systems were acquired on April 9, 1996, and, therefore, the balance
sheet data for such systems are included in the Company's June 30, 1996
historical balance sheet.

(d) Represents the estimated cost savings of $127 due to the elimination of
duplicative functions and personnel attributable to the C4, Americable and Cox
systems.

(e) Represents the elimination of management fees and allocated overhead costs
of $429 and the inclusion of the Company's estimated overhead cost savings of
$325 attributable to the C4, Americable and Cox systems.

(f) Represents additional depreciation and amortization attributable to the C4,
Americable and Cox systems as if such systems had been acquired on January 1,
1995.

(g) Adjustments to interest expense are calculated as if all indebtedness
incurred to effect the acquisition of the Existing Systems and all other
indebtedness outstanding as of June 30, 1996 had been outstanding for the entire
period. Interest expense is calculated assuming indebtedness accrues interest as
follows:

<TABLE>
<CAPTION>
----------------------------------------
PRO FORMA
PRINCIPAL INTEREST RATE EXPENSE
---------- ------------- ---------
<S> <C> <C> <C>
Outstanding Senior Credit Facility--revolving facility..................... $ 20,000.0 8.19% $ 819.0
Outstanding Senior Credit Facility--tranche A.............................. 100,000.0 8.25% 4,125.0
Outstanding Senior Credit Facility--tranche B.............................. 90,000.0 8.75% 3,937.5
Outstanding UVC Note....................................................... 7,200.0 11.50% 414.0
Obligation under capital leases............................................ 86.0 3.8
----------
Total indebtedness--Existing Systems....................................... 217,286.0
Amortization of deferred financing fees.................................... 5,876.0 7 year avg 419.7
Unused Senior Credit Facility fees......................................... 55,000.0 0.50% 137.5
---------
Total pro forma interest expense........................................... 9,856.5
Total actual interest expense--Existing Systems............................ (8,005.0)
---------
Pro forma interest expense adjustment...................................... $ 1,851.5
=========
</TABLE>

(h) Represents the elimination of the minority interest in loss of the C4
systems prior to acquisition.

(i) Represents the effects of the Offering, assuming that proceeds thereof are
utilized to repay a portion of the existing indebtedness under the Senior Credit
Facility.

(j) Adjustments to interest expense are calculated as if $200,000 of Offering
proceeds had been outstanding during the entire period and $193,000 of Offering
proceeds had been applied to repay a portion of the indebtedness under the
Senior Credit Facility. Interest expense is calculated assuming indebtedness
accrues interest as follows:

<TABLE>
<CAPTION>
----------------------------------------
PRO FORMA
PRINCIPAL INTEREST RATE EXPENSE
---------- ------------- ---------
<S> <C> <C> <C>
Outstanding Senior Credit Facility--revolving facility..................... $ 17,000.0 8.19% $ 696.2
Outstanding Senior Subordinated Notes...................................... 200,000.0 11.50% 11,500.0
Outstanding UVC Note....................................................... 7,200.0 11.50% 414.0
Obligation under capital leases............................................ 86.0 3.8
----------
Total indebtedness--Existing Systems....................................... 224,286.0
Amortization of deferred financing fees.................................... 5,876.0 7 year avg 419.7
Amortization of deferred financing fees--Offering.......................... 7,000.0 10 year life 350.0
Unused Senior Credit Facility fees......................................... 58,000.0 0.50% 145.0
---------
Total pro forma interest expense........................................... 13,528.7
Total pro forma interest expense--Existing Systems......................... (9,856.5)
---------
Pro forma interest expense adjustment...................................... $ 3,672.2
=========
</TABLE>

(k) Pro forma effect of the Offering and use of the proceeds thereof to repay a
portion of the existing indebtedness under the Senior Credit Facility and to pay
Offering expenses.

(l) Represents the estimated cost savings of $438 due to the elimination of
duplicative functions and personnel attributable to the ACE, Triax, Grassroots
and Penn/Ohio systems and the reversal of $286 of inventory write-down
attributable to Triax.

(m) Represents the elimination of management fees and allocated overhead costs
of $1,306 and the inclusion of the Company's estimated incremental overhead
costs of $747 attributable to the ACE, Triax, Grassroots and Penn/Ohio systems.

27
<PAGE> 30

(n) Represents the balance sheet and income statement effect of the purchase of
the Acquisition Systems, including the accounting for an estimated $1.2 million
of transaction costs, incremental indebtedness of approximately $197.2 million
and additional depreciation and amortization as if such systems had been
acquired on January 1, 1995. Pro forma depreciation and amortization is
calculated based on preliminary asset appraisals as follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------
PURCHASE
HISTORICAL PRICE PRELIMINARY PRO FORMA
ACE SYSTEMS BALANCE ADJUSTMENTS ALLOCATION ASSET LIFE EXPENSE
- ------------------------------------------------- ---------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Property and equipment........................... $25,906 $32,494 $ 58,400 8 $ 3,650
Franchise costs.................................. 1,114 49,986 51,100 15 1,703
Covenant not to compete.......................... 32 7,268 7,300 5 730
Subscriber lists................................. 617 21,283 21,900 7 1,564
Goodwill......................................... 3,527 3,423 6,950 15 232
Deferred financing costs and other............... 214 (214) 0
----------- ------------
Total ACE systems pro forma.................... $145,650 7,879
ACE systems historical amount.................. (5,503)
------------
ACE systems pro forma adjustment............... $ 2,376
============
</TABLE>

<TABLE>
<CAPTION>
TRIAX SYSTEMS
- -------------------------------------------------
<S> <C> <C> <C> <C> <C>
Property and equipment........................... $36,786 $ 1,975 $ 38,761 8 $ 2,423
Franchise costs.................................. 8,703 22,411 31,114 15 1,037
Covenant not to compete.......................... 0 100 100 5 10
Subscriber lists................................. 0 14,725 14,725 7 1,052
Goodwill......................................... 0 0 0 15 0
Deferred financing costs and other............... 836 (836) 0
----------- ------------
Total Triax systems pro forma.................. $ 84,700 4,522
Triax systems historical amount................ (3,699)
------------
Triax systems pro forma adjustment............. $ 823
============

<CAPTION>
GRASSROOTS AND PENN/OHIO SYSTEMS
- -------------------------------------------------
<S> <C> <C> <C> <C> <C>
Property and equipment........................... $ 8,152 $(3,509) $ 4,643 8 $ 290
Franchise costs.................................. 310 4,680 4,990 15 166
Covenant not to compete.......................... 10 857 867 5 87
Subscriber lists................................. 2,045 177 2,222 7 159
Goodwill......................................... 0 428 428 15 14
Deferred financing costs and other............... 17 (17) 0
----------- ------------
Total Grassroots and Penn/Ohio systems pro
forma........................................ $ 13,150 716
Grassroots and Penn/Ohio systems historical
amount....................................... (655)
------------
Grassroots and Penn/Ohio systems pro forma
adjustment................................... $ 61
============
<CAPTION>
TOTAL ACQUISITION SYSTEMS
- -------------------------------------------------
<S> <C> <C> <C> <C> <C>
Property and equipment........................... $70,844 $30,960 $101,804 $ 6,363
Franchise costs.................................. 10,127 77,077 87,204 2,906
Covenant not to compete.......................... 42 8,225 8,267 827
Subscriber lists................................. 2,662 36,185 38,847 2,775
Goodwill......................................... 3,527 3,851 7,378 246
Deferred financing costs and other............... 1,067 (1,067) 0
----------- ------------
Total Acquisition Systems pro forma............ $243,500 13,117
Total Acquisition Systems historical amount.... (9,857)
------------
Total Acquisition Systems pro forma
adjustment................................... $ 3,260
============
</TABLE>

(o) Represents reconciliation of the interest expense on the net incremental
indebtedness needed to purchase the Acquisition Systems, including the effect of
the receipt of $34.4 million under the Rights Offering, the receipt of equity
contributions of $10.6 million pursuant to the Equity Call and the elimination
of indebtedness of the Acquisition Systems.

<TABLE>
<CAPTION>
----------------------------------------
PRO FORMA
PRINCIPAL INTEREST RATE EXPENSE
---------- ------------- ---------
<S> <C> <C> <C>
Outstanding Senior Credit Facility--revolving facility..................... $ 18,388.0 8.19% $ 753.9
Outstanding Senior Credit Facility--tranche A.............................. 100,000.0 8.25% 4,125.0
Outstanding Senior Credit Facility--tranche B.............................. 90,000.0 8.75% 3,937.5
Outstanding Senior Subordinated Notes...................................... 200,000.0 11.50% 11,500.0
Outstanding UVC Note....................................................... 7,200.0 11.50% 414.0
Obligation under capital leases............................................ 86.0 3.8
----------
Total indebtedness--Existing Systems....................................... 415,674.0
Amortization of deferred financing fees.................................... 5,876.0 7 year avg 419.7
Amortization of deferred financing fees--Offering.......................... 7,000.0 10 year life 350.0
Unused Senior Credit Facility fees......................................... 56,612.0 0.50% 141.6
---------
Total pro forma interest expense........................................... 21,645.5
Total pro forma interest expense--Existing Systems......................... (13,528.7)
Historical interest expense--Acquisition Systems........................... (14,756.0)
---------
Pro forma interest expense adjustment...................................... $ (6,639.2)
==========
</TABLE>

28
<PAGE> 31

(p) Represents reversal of forbearance costs of ACE prior to acquisition.

(q) Represents the reversal of the combined equity accounts, the historical debt
balance and applicable accrued interest related to the Acquisition Systems.

(r) Represents the receipt of approximately $10.6 million of equity
contributions pursuant to the Equity Call used primarily to fund earnest money
deposits with respect to certain of the Acquisition Systems and the receipt of
$34.4 million under the Rights Offering.

(s) Represents pro forma reduction in interest expense due to the effect of the
conversion and repayment of the UVC Note and accrued interest thereon.

<TABLE>
<CAPTION>
-----------------------------------------
PRO FORMA
PRINCIPAL INTEREST RATE EXPENSE
---------- ------------- ----------
<S> <C> <C> <C>
Outstanding Senior Credit Facility--revolving facility..................... $ 20,121.0 8.19% $ 825.0
Outstanding Senior Credit Facility--tranche A.............................. 100,000.0 8.25% 4,125.0
Outstanding Senior Credit Facility--tranche B.............................. 90,000.0 8.75% 3,937.5
Outstanding Senior Subordinated Notes...................................... 200,000.0 11.50% 11,500.0
Obligation under capital leases............................................ 86.0 3.8
----------
Total indebtedness--Existing Systems....................................... 410,207.0
Amortization of deferred financing fees.................................... 5,876.0 7 year avg 419.7
Amortization of deferred financing fees--Offering.......................... 7,000.0 10 year life 350.0
Unused Senior Credit Facility fees......................................... 54,879.0 0.50% 137.2
----------
Total pro forma interest expense........................................... 21,298.2
Total pro forma interest expense--Existing Systems......................... (13,528.7)
Pro forma interest expense--Acquisition Systems............................ (8,116.8)
----------
Pro forma interest expense adjustment...................................... $ (347.3)
==========
</TABLE>

(t) Represents the effect of the conversion of the UVC Note into $5.0 million of
Class A Partnership Interests and the use of approximately $1.0 million of cash
on hand and incremental borrowings under the Senior Credit Facility of $1.7
million to repay remaining principal and accrued and unpaid interest thereon.

(u) Represents the operations of the Chatsworth, Georgia system and the
Woodstock and New Market, Virginia systems.

(v) Represents pro forma reduction in interest expense due to the effect of the
sale of the Disposition Systems and the use of net proceeds of approximately
$16.9 million to repay a portion of the existing indebtedness under the Senior
Credit Facility.

<TABLE>
<CAPTION>
----------------------------------------
PRO FORMA
PRINCIPAL INTEREST RATE EXPENSE
---------- ------------- ---------
<S> <C> <C> <C>
Outstanding Senior Credit Facility--revolving facility..................... $ 3,261.0 8.19% $ 133.5
Outstanding Senior Credit Facility--tranche A.............................. 100,000.0 8.25% 4,125.0
Outstanding Senior Credit Facility--tranche B.............................. 90,000.0 8.75% 3,937.5
Outstanding Senior Subordinated Notes...................................... 200,000.0 11.50% 11,500.0
Obligation under capital leases............................................ 86.0 3.8
----------
Total indebtedness Existing Systems........................................ 393,347.0
Amortization of deferred financing fees.................................... 5,876.0 7 year avg 419.7
Amortization of deferred financing fees--Offering.......................... 7,000.0 10 year life 350.0
Unused Senior Credit Facility fees......................................... 71,739.0 0.50% 179.3
---------
Total pro forma interest expense........................................... 20,648.8
Total pro forma interest expense--Existing Systems......................... (13,528.7)
Pro forma interest expense--Acquisition Systems............................ (8,116.8)
Pro forma effect of the UVC Note........................................... 347.3
---------
Pro forma interest expense adjustment...................................... $ (649.4)
==========
</TABLE>

29
<PAGE> 32

FRONTIERVISION OPERATING PARTNERS, L.P.

UNAUDITED PRO FORMA
FINANCIAL STATEMENTS
(FOR THE YEAR ENDED DECEMBER 31, 1995)
(In $ thousands)

<TABLE>
<CAPTION>
----------------------------------------------------------------------
EXISTING SYSTEMS
----------------------------------------------------------------------
ACTUAL FOR THE LONGFELLOW
PERIOD FROM SYSTEMS AND
INCEPTION AMERICABLE
(APRIL 17) TO UVC SYSTEMS C4 SYSTEMS SYSTEMS
DECEMBER 31(a) ACQUISITION(b) ACQUISITION ACQUISITIONS(c)
--------------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Revenues........................ 4,369 25,417 11,756 2,561
Expenses
System operations............. 2,311 13,123 6,735 1,662
Corporate administrative
expense...................... 127 1,270 546 347
Depreciation and
amortization................. 2,308 9,625 5,552 354
Pre-acquisition expenses...... 940
--------------- -------------- ------------ --------------
Operating income (loss)......... (1,317) 1,399 (1,077) 198
Interest expense, net........... (1,386) (4,087) (8,208) (35)
Other income (expense).......... 25
Minority interest in loss of
subsidiary.................... 103
--------------- -------------- ------------ --------------
Net income (loss) before income
taxes......................... (2,703) (2,663) (9,182) 163
Provision for income taxes......
--------------- -------------- ------------ --------------
Net income (loss)............... (2,703) (2,663) (9,182) 163
=============== =========== ========== ============

<CAPTION>
----------------------------------------------------------------------
EXISTING SYSTEMS
----------------------------------------------------------------------
PRO FORMA SUBTOTAL
ADJUSTMENTS FOR PRO FORMA PRO FORMA
EXISTING SYSTEMS ADJUSTMENTS OFFERING AND
COX SYSTEMS AND SENIOR FOR THE EXISTING
ACQUISITION CREDIT FACILITY OFFERING(j) SYSTEMS
----------- ---------------- ----------- ------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Revenues........................ 26,724 70,827
Expenses
System operations............. 12,545 (491)(d) 35,885
Corporate administrative
expense...................... 1,630 (2,015)(e) 1,905
Depreciation and
amortization................. 8,549 8,653(f) 35,041
Pre-acquisition expenses...... 940
----------- ---------------- ----------- ------------
Operating income (loss)......... 4,000 (6,147) (2,944)
Interest expense, net........... 79 (6,069)(g) (7,344)(k) (27,050)
Other income (expense).......... 25

Minority interest in loss of
subsidiary.................... (103)(h)
----------- ---------------- ----------- ------------
Net income (loss) before income
taxes......................... 4,079 (12,319) (7,344) (29,969)
Provision for income taxes...... (3,997) 3,997(i)
----------- ---------------- ----------- ------------
Net income (loss)............... 82 (8,322) (7,344) (29,969)
========= ============== ========== ===========

ACQUISITION SYSTEMS
-----------------------------------------------------------------------
GRASSROOTS
AND PRO FORMA
ACE TRIAX PENN/OHIO ADJUSTMENTS
SYSTEMS SYSTEMS SYSTEMS FOR ACQUISITION
ACQUISITION ACQUISITION ACQUISITIONS SYSTEMS
----------- ------------ ------------ ---------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Revenues........................ 28,088 17,780 3,828
Expenses
System operations............. 15,829 8,438 2,415 (993)(l)
Corporate administrative
expense...................... 843 1,168 247 (955)(m)
Depreciation and
amortization................. 11,284 7,344 1,311 6,295(n)
Pre-acquisition expenses......
----------- ------------ ------------ ---------------
Operating income (loss)......... 132 830 (145) (4,347)
Interest expense, net........... (22,366) (3,316) (715) 10,167(o)
Other income (expense).......... (558) 558(p)
48 (48)(q)
Minority interest in loss of
subsidiary....................
----------- ------------ ------------ ---------------
Net income (loss) before income
taxes......................... (22,744) (2,486) (860) 6,330
Provision for income taxes......
----------- ------------ ------------ ---------------
Net income (loss)............... (22,744) (2,486) (860) 6,330
========= ========== ========== ============

PRO FORMA
EFFECT OF
PROPOSED
SALE OF
PRO FORMA THE
EFFECT OF THE DISPOSITION PRO FORMA
UVC NOTE(r) SYSTEMS(t) COMBINED
------------- --------- ---------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS
Revenues........................ (3,561) 116,962
Expenses
System operations............. (1,823) 59,751
Corporate administrative
expense...................... (179) 3,029
Depreciation and
amortization................. (1,555) 59,720
Pre-acquisition expenses...... 940
------------- --------- ---------
Operating income (loss)......... (4) (6,478)
Interest expense, net........... 694(s) 1,297(u) (41,289)
Other income (expense).......... 25

Minority interest in loss of
subsidiary....................
------------- --------- ---------
Net income (loss) before income
taxes......................... 694 1,293 (47,742)
Provision for income taxes......
------------- --------- ---------
Net income (loss)............... 694 1,293 (47,742)
============ ========= =========
</TABLE>

30
<PAGE> 33

FOOTNOTES TO PRO FORMA FINANCIAL INFORMATION AS OF DECEMBER 31, 1995
(In thousands)

(a) Includes the results of operations of the systems purchased from UVC from
and including November 9, 1995 and the results of operations of the systems
purchased from Longfellow from and including November, 21, 1995.

(b) Historical results for the period prior to acquisition (January 1, 1995 to
November 8, 1995).
(c) Historical results for the systems purchased from Longfellow for the period
from January 1, 1995 to November 20, 1995 and of the systems purchased from
Americable for the year ended December 31, 1995.

(d) Represents the estimated cost savings of $491 due to the elimination of
duplicative functions and personnel attributable to the C4, Americable and Cox
systems.

(e) Represents the elimination of management fees and allocated overhead costs
of $3,793 and the inclusion of the Company's estimated incremental overhead
costs of $1,778 attributable to the C4, Americable and Cox systems.

(f) Represents additional depreciation and amortization of $8,653 resulting from
the application of purchase accounting to the purchase of the Existing Systems.

(g) Adjustments to interest expense are calculated as if all indebtedness
incurred to effect the purchase of the Existing Systems and all other
indebtedness outstanding as of June 30, 1996 had been outstanding since January
1, 1995. Interest expense is calculated assuming indebtedness accrues interest
as follows:

(h) Represents the elimination of the minority interest in earnings of C4 prior
to acquisition.
(i) Represents the elimination of the provision for income taxes of Cox prior
to acquisition.

(j) Represents the effect of the Offering, assuming that proceeds thereof are
utilized to repay a portion of the existing indebtedness under the Senior Credit
Facility.

(k) Adjustments to interest expense are calculated as if the Offering had been
consummated on January 1, 1995 and $193,000 of Offering net proceeds had been
applied to repay a portion of the indebtedness under the Senior Credit Facility.
Interest expense is calculated assuming indebtedness accrues interest as
follows:

<TABLE>
<CAPTION>
------------------------------------------
PRO FORMA
PRINCIPAL INTEREST RATE EXPENSE
---------- ------------- -----------
<S> <C> <C> <C>
Outstanding Senior Credit Facility--revolving facility..... $ 17,000.0 8.19% $ 1,392.1
Outstanding Senior Subordinated Notes...................... 200,000.0 11.50% 23,000.0
Outstanding UVC Note....................................... 7,200.0 11.50% 828.0
Obligation under capital leases............................ 72.0 0.9
----------
Total indebtedness--Existing Systems....................... 224,272.0
Amortization of deferred financing fees.................... 5,876.0 7 year avg 839.4
Amortization of deferred financing fees--Offering.......... 7,000.0 10 year life 700.0
Unused Senior Credit Facility fees......................... 58,000.0 0.50% 290.0
-----------
Total pro forma interest expense 27,050.4
Pro forma interest expense--Existing Systems (19,706.3)
-----------
Pro forma interest expense adjustment $ 7,344.1
==========
</TABLE>

(l) Represents the estimated cost savings of $993 due to the elimination of
duplicative functions and personnel attributable to the ACE, Triax, Grassroots
and Penn/Ohio systems.

(m) Represents the elimination of management fees and allocated overhead costs
of $2,258 and the inclusion of the Company's estimated incremental overhead
costs of $1,303 attributable to the ACE, Triax, Grassroots and Penn/Ohio
systems.

(n) Represents additional depreciation and amortization of $6,295 resulting from
the application of purchase accounting to the purchase of the Acquisition
Systems.

31
<PAGE> 34

(o) Represents reconciliation of the interest expense on the net incremental
indebtedness used to purchase the Acquisition Systems, including the effect of
the receipt of approximately $10.6 million of equity commitments pursuant to the
Equity Call, the elimination of indebtedness of the Acquisition Systems and the
receipt of approximately $34.4 million of equity contributions under the Rights
Offering.

<TABLE>
<CAPTION>
-------------------------------------------
PRO FORMA
PRINCIPAL INTEREST RATE EXPENSE
----------- ------------- ------------
<S> <C> <C> <C>
Outstanding Senior Credit Facility--revolving facility..... $ 18,388.0 8.19% $ 1,505.9
Outstanding Senior Credit Facility--tranche A.............. 100,000.0 8.25% 8,250.0
Outstanding Senior Credit Facility--tranche B.............. 90,000.0 8.75% 7,875.0
Outstanding Senior Subordinated Notes...................... 200,000.0 11.50% 23,000.0
Outstanding UVC Note....................................... 7,200.0 11.50% 828.0
Obligation under capital leases............................ 72.0 0.9
-----------
Total indebtedness--pro forma all systems.................. 415,660.0
Amortization of deferred financing fees.................... 5,876.0 7 year avg 839.4
Amortization of deferred financing fees--Offering.......... 7,000.0 10 year life 700.0
Unused Senior Credit Facility fees......................... 56,612.0 0.50% 283.1
------------
Total pro forma interest expense 43,282.3
Total pro forma interest expense--Existing Systems (27,050.9)
------------
Historical interest expense--Acquisition Systems (26,397.0)
------------
Pro forma interest expense adjustment $(10,165.6)
==========
</TABLE>

(p) Represents the elimination of forbearance costs of ACE prior to acquisition.
(q) Represents the elimination of the minority interest in earnings of ACE prior
to acquisition.

(r) Represents the effect of the conversion of the UVC Note into $5.0 million of
Class A Partnership Interests and the repayment of the approximately $2.5
million remaining principal and accrued and unpaid interest thereon.

(s) Represents pro forma reduction of interest expense due to the effect of the
conversion and repayment of the UVC Note and accrued and unpaid interest
thereon.

<TABLE>
<CAPTION>
------------------------------------------
PRO FORMA
PRINCIPAL INTEREST RATE EXPENSE
----------- ------------- -----------
<S> <C> <C> <C>
Outstanding Senior Credit Facility--revolving facility..... $ 20,121.0 8.19% $ 1,647.9
Outstanding Senior Credit Facility--tranche A.............. 100,000.0 8.25% 8,250.0
Outstanding Senior Credit Facility--tranche B.............. 90,000.0 8.75% 7,875.0
Outstanding Senior Subordinated Notes...................... 200,000.0 11.50% 23,000.0
Obligation under capital leases............................ 72.0 0.9
-----------
Total indebtedness--Existing Systems....................... 410,193.0
Amortization of deferred financing fees.................... 5,876.0 7 year avg 839.4
Amortization of deferred financing fees--Offering.......... 7,000.0 10 year life 700.0
Unused Senior Credit Facility fees......................... 54,879.0 0.50% 274.4
-----------
Total pro forma interest expense 42,587.6
Total pro forma interest expense--Existing Systems (27,050.4)
Pro forma interest expense--Acquisition Systems (16,231.4)
-----------
Pro forma interest expense adjustment $ (694.2)
==========
</TABLE>

(t) Represents the operations of the Chatsworth, Georgia system and the
Woodstock and New Market, Virginia systems.

(u) Represents pro forma reduction of interest expense due to the effect of the
sale of the Disposition Systems and the use of net proceeds of approximately
$16.9 million to repay a portion of the existing indebtedness under the Senior
Credit Facility.

<TABLE>
<CAPTION>
------------------------------------------
PRO FORMA
PRINCIPAL INTEREST RATE EXPENSE
----------- ------------- -----------
<S> <C> <C> <C>
Outstanding Senior Credit Facility--revolving facility..... $ 3,261.0 8.19% $ 267.1
Outstanding Senior Credit Facility--tranche A.............. 100,000.0 8.25% 8,250.0
Outstanding Senior Credit Facility--tranche B.............. 90,000.0 8.75% 7,875.0
Outstanding Senior Subordinated Notes...................... 200,000.0 11.50% 23,000.0
Obligation under capital leases............................ 72.0 0.9
-----------
Total Indebtedness Existing Systems........................ 393,333.0
Amortization of deferred financing fees.................... 5,876.0 7 year avg 839.4
Amortization of deferred financing fees--Offering.......... 7,000.0 10 year life 700.0
Unused Senior Credit Facility fees......................... 71,739.0 0.50% 358.7
-----------
Total pro forma interest expense 41,291.1
Total pro forma interest expense--Existing Systems (27,050.4)
Pro forma interest expense--Acquisition Systems (16,231.4)
Pro forma effect of the UVC Note 694.2
-----------
Pro forma interest expense adjustment $ (1,296.5)
==========
</TABLE>

32
<PAGE> 35

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The Company commenced operations in November 1995. The Company acquired certain
cable television systems from UVC on November 9, 1995 (the "UVC Systems") and
certain other cable systems from Longfellow on November 21, 1995 (the
"Longfellow Systems"), from C4 on February 1, 1996 (the "C4 Systems"), from
Americable on March 29, 1996 (the "Americable Systems") and from Cox on April 9,
1996 (the "Cox Systems"), for aggregate consideration of $315.7 million. See
"Business--Development of the Systems--The Existing Systems" for a description
of the Existing Systems. The Company has operated the Existing Systems for a
limited period of time and had no operations prior to November 9, 1995. All
acquisitions have been accounted for under the purchase method of accounting
and, therefore, the Company's historical results of operations include the
results of operations for each acquired system subsequent to its respective
acquisition date.

The Company has recently acquired or entered into definitive agreements to
acquire cable system assets of ACE, Triax, Grassroots and Penn/Ohio for
aggregate consideration of approximately $244.4 million (subject to adjustment).
See "Business--Development of the Systems--The Acquisition Systems" for a
description of the Acquisition Systems. If consummated, the purchase of the
Acquisition Systems will result in a substantial increase in the number of
subscribers and the revenues and expenses of the Company. As a result of the
Company's limited operating history and the expected effect of the purchase of
the Acquisition Systems, the Company believes that its results of operations for
the period ended December 31, 1995 and for the six months ended June 30, 1996
are not indicative of the Company's results of operations in the future.

RESULTS OF OPERATIONS

Actual

The following table sets forth, for the periods indicated, certain statements of
operations and other data of the Company expressed in dollar amounts (in
thousands) and as a percentage of revenue.

<TABLE>
<CAPTION>
-------------------------------------------
APRIL 17 TO
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1996 1995(1)
-------------------- --------------------
% OF % OF
In thousands AMOUNT REVENUE AMOUNT REVENUE
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues................................................ $27,539 100.0% $ 4,369 100.0%
Expenses
Operating expenses.................................... 13,668 49.6 2,311 52.9
Corporate expenses.................................... 1,265 4.6 127 2.9
Depreciation and amortization......................... 13,595 49.4 2,308 52.8
Pre-acquisition expenses.............................. -- -- 940 21.5
--------- -------- --------- --------
Total expenses.......................................... 28,528 103.6 5,686 130.1%
--------- -------- --------- --------
Operating income (loss)................................. (989) (3.6) (1,317) (30.1)
Interest expense, net................................... (7,304) (26.5) (1,386) (31.7)
--------- -------- --------- --------
Net loss................................................ $(8,293) (30.1) $(2,703) (61.9)
======= ====== ======= ======
Other Data:
EBITDA(2)............................................... $12,606 45.8% $ 991 22.7%
</TABLE>

- ---------------
(1) Reflects the historical financial statements for the period from inception
(April 17, 1995) through December 31, 1995.

(2) EBITDA represents operating income (loss) before depreciation and
amortization. The Company believes that EBITDA is a meaningful measure of
performance because it is commonly used in the cable television industry to
analyze and compare cable television companies on the basis of operating
performance, leverage and liquidity. In addition, the Senior Credit Facility and
the Indenture contain certain covenants, compliance with which is measured by
computations substantially similar to those used in determining EBITDA. See
"Credit Arrangements of the Company" and "Description of the Notes." However,
EBITDA is not intended to be a performance measure that should be regarded as an
alternative either to operating income or net income as an indicator of
operating performance or to cash flows as a measure of liquidity, as determined
in accordance with generally accepted accounting principles.

33
<PAGE> 36

Actual

Six months ended June 30, 1996 compared with the year ended December 31, 1995

Revenues increased 530.3% to $27.5 million in the six months ended June 30, 1996
from $4.4 million in 1995. These increases were attributable to the commencement
of operations in November 1995 with the acquisition of the UVC Systems on
November 9, 1995 and of the Longfellow Systems on November 21, 1995. Revenues
for the six months ended June 30, 1996 reflect full period operations of the UVC
Systems and the Longfellow Systems, as well as the acquisition of the C4 Systems
on February 1, 1996, the Americable Systems on March 29, 1996 and the Cox
Systems on April 9, 1996.

Operating and corporate expenses were reduced to 54.2% of revenues in the first
six months of 1996 from 55.8% of revenues in 1995 due to initial cost-cutting
measures implemented by the Company. These efforts included the establishment of
centralized regional service centers in Rockland, Maine and Greeneville,
Tennessee and the elimination of ten customer service offices. Employee staffing
was reduced by 9.0% from pre-acquisition levels. Other cost reductions have been
realized through the elimination of duplicative expenses, such as customer
billing, accounting, accounts payable and payroll administration.

As a result of such cost efficiencies, EBITDA increased to 45.8% of revenues in
the six months ended June 30, 1996 from 22.7% of revenues in 1995.

Combined Historical Acquired Predecessor Systems

The discussion of the results of operations for the years ended December 31,
1993, 1994 and 1995 is based on the combined historical results of the Acquired
Predecessor Systems (UVC, Cox and C4), which do not reflect changes in the
operation or management of the Acquired Predecessor Systems that the Company has
made or intends to make and are not necessarily indicative of the results that
would have been achieved had such systems been owned and operated by the Company
during the periods presented.

Year ended December 31, 1995 compared to the year ended December 31, 1994

Revenues increased to $68.1 million (including $4.2 million attributable to the
operations of the UVC Systems for the period after acquisition by the Company)
in the year ended December 31, 1995 from $64.4 million in the year ended
December 31, 1994 due to increases in service rates and internal subscriber
growth. During this period, basic subscribers increased by approximately 2.9%,
primarily in the Cox Systems and the C4 Systems, which grew by 1,800 and 1,200
subscribers, respectively. Basic penetration improved to 71.1% at year-end 1995
from 69.7% at year-end 1994. Premium penetration over the period declined to
42.1% at year-end 1995 from 45.9% at year-end 1994. Operating expenses grew at
rates generally approximating revenue growth, increasing to $38.3 million
(including $2.4 million attributable to the operations of the UVC Systems for
the period after acquisition by the Company) in the year ended December 31, 1995
from $35.4 million in the year ended December 31, 1994. EBITDA increased to
$29.8 million in 1995 (including $1.8 million attributable to the operations of
the UVC Systems for the period after acquisition by the Company) from $29.0
million in 1994.

Year ended December 31, 1994 compared to the year ended December 31, 1993

Revenues increased to $64.4 million in the year ended December 31, 1994 from
$63.4 million in the year ended December 31, 1993, primarily due to growth in
the number of basic subscribers and premium units, which increased over the
period by approximately 2.9% and 20.9%, respectively. Basic penetration improved
to 70.1% at year-end 1994 from 69.0% at year-end 1993, while premium penetration
increased to 45.9% from 42.1% over the same period. In spite of these increases,
revenue growth was inhibited by regulations relating to basic service rates
which were instituted by the 1992 Cable Act. See "Legislation and Regulation"
for a further discussion of recent cable television regulation. Operating
expenses increased to $35.4 million in the year ended December 31, 1994 from
$34.6 million in the year ended December 31, 1993. Increases in expenses were
partially attributable to higher administrative costs of complying with
regulatory reporting requirements under the 1992 Cable Act, as well as the
addition of new services and shifting of service tiers in response to
regulation. As a result, EBITDA increased modestly to $29.0 million in 1994 from
$28.7 million in 1993.

34
<PAGE> 37

Combined Historical Probable Predecessor Acquisition Systems

The discussion of the results of operations for the years ended December 31,
1993, 1994 and 1995 is based on the combined historical results of the Probable
Predecessor Acquisition Systems (ACE and Triax), which do not reflect changes in
the operation or management of the Probable Predecessor Acquisition Systems that
the Company has made or intends to make and are not necessarily indicative of
the results that would have been achieved had such systems been owned and
operated by the Company during the periods presented.

Year ended December 31, 1995 compared to the year ended December 31, 1994

Revenues increased to $45.9 million in the year ended December 31, 1995 from
$40.9 million in the year ended December 31, 1994, primarily due to increases in
service rates, internal subscriber growth and the acquisition of approximately
9,000 subscribers in the Triax Systems during the first quarter of 1995. Over
this period, the number of basic subscribers and premium units increased by
approximately 7.1% and 13.1%, respectively. Basic penetration improved to
approximately 73.2% at year-end 1995 from approximately 71.9% at year-end 1994.
Premium penetration increased to 44.9% at year-end 1995 from 42.5% at year-end
1994. Operating expenses increased 13.4% to $26.3 million in 1995 from $23.2
million in 1994. EBITDA increased to $19.6 million in 1995 from $17.7 million in
1994.

Year ended December 31, 1994 compared to the year ended December 31, 1993

Revenues increased to $40.9 million in the year ended December 31, 1994 from
$32.8 million in the year ended December 31, 1993, primarily due to internal
subscriber growth and the integration of system acquisitions. In 1993, the Triax
Systems completed three acquisitions, totaling over 23,000 subscribers, 90% of
which were acquired in December 1993. The increase in revenues from 1993 to 1994
was largely attributable to the full period of operations of the acquired
properties and a 5.0% increase in subscribers at ACE. Basic subscribers and
premium units in the Acquisition Systems increased over the period by
approximately 4.1% and 17.2%, respectively. Basic penetration improved to 71.9%
at year-end 1994 from 69.3% at year-end 1993, while premium penetration
increased to 42.5% from 36.4% over the same period. Operating expenses grew
28.5% to $23.2 million in 1994, an increase of 28.5% from $18.1 million in 1993,
due in part to regulatory related expenses. EBITDA increased to $17.7 million in
1994 from $14.7 million in 1993.

LIQUIDITY AND CAPITAL RESOURCES

The cable television business generally requires substantial capital for the
construction, expansion and maintenance of the delivery system. In addition, the
Company has pursued, and intends to pursue in the future, a business strategy
which includes selective acquisitions. The Company has financed these
expenditures through a combination of cash from operations, indebtedness from
outside sources and equity capital from its partners. On a pro forma basis for
the Existing Systems, for the six months ended June 30, 1996, the Company's
EBITDA totaled $17.0 million and was sufficient to meet the Company's debt
service obligations, working capital and capital expenditure requirements with
the exception of the acquisition of the C4 Systems and the Cox Systems, which
were funded by borrowings under the Senior Credit Facility. As of June 30, 1996,
the Company had outstanding indebtedness under the Senior Credit Facility of
$210.0 million. This debt was used principally for the acquisition of the
Existing Systems. In addition to this debt, the Company had additional
availability of $55.0 million under the Senior Credit Facility. Pro forma for
the Transactions, the Company would have had $193.3 million outstanding and
availability of $71.7 million under the Senior Credit Facility. See "Credit
Arrangements of the Company" for a further discussion of the Company's credit
facilities. From November 1995 to June 30, 1996, in connection with the
acquisitions of the Existing Systems, the Company received aggregate equity
contributions of approximately $105.0 million of the initial $119.9 million of
commitments for equity contributions from existing partners of FVP available for
use by the Company. The Company has received an additional $10.6 million of
equity contributions pursuant to the Equity Call. Concurrently with or prior to
the closing of the Offering, the Company will complete the Rights Offering
pursuant to which it is expected that $75.8 million in further equity will be
available. It is anticipated that following consummation of the Transactions,
approximately $41.4 million of proceeds from the Rights Offering will be
available to fund additional acquisitions. The size of the equity commitments to
be made available to the Company through the Rights Offering may be reduced if
no later than six months after the closing

35
<PAGE> 38

of the Rights Offering, the General Partner and the Advisory Committee of FVP
determine that the remaining equity commitments exceed the Company's projected
requirements. Such remaining equity commitments will expire on June 30, 1997,
subject to the election by the General Partner and approval by the Advisory
Committee to extend the commitment period to June 30, 1998. See "Management" and
"The Partnership Agreements." On an actual basis, representing solely the
Company's results for the six months ended June 30, 1996, EBITDA was $12.6
million with outstanding indebtedness at June 30, 1996 of $217.3 million.

Historically, the combined EBITDA of substantially all of the Existing Systems
totaled approximately $28.7 million, $29.0 million and $28.1 million for the
years ended December 31, 1993, 1994 and 1995, respectively. For the same
periods, the combined EBITDA of substantially all of the Acquisition Systems was
$14.7 million, $17.7 million and $19.6 million, respectively.

CAPITAL EXPENDITURES

From November 9, 1995 to June 30, 1996, the Company had capital expenditures
(exclusive of system acquisitions) of approximately $3.9 million which were
financed through cash flows from operations. Capital expenditures included
expansion and improvements of existing cable properties, plant and equipment,
maintenance of existing equipment and the addition of new subscribers
necessitating cable line drops and extension of cable plant facilities and
installations.

During the first six months of 1996, the Company's capital expenditures were
approximately $3.4 million. These expenditures were incurred primarily to
establish and equip regional service centers, to upgrade existing plant and
facilities and to build out facilities to previously unserved areas. On a pro
forma basis for that period, the Existing Systems and the Acquisition Systems
expended approximately $10.0 million in capital expenditures, primarily for
extensions of cable plant facilities and for system rebuilds. Pro forma for the
purchase of the Acquisition Systems, the Company expects capital expenditures to
total approximately $117 million over the period ending December 31, 2001. Of
that amount, approximately $59 million will be used to upgrade the technical
platform of substantially all of the Company's systems to at least 400 MHz to
450 MHz, approximately $13 million will be invested in addressable converters,
primarily for its two primary operating regions, approximately $19 million will
be used to build out the system to new homes and the balance of approximately
$26 million will be used for repair and maintenance. In general, the Company
expects to expend approximately $126 per subscriber over the two years ending
December 31, 1998. The Company intends to finance such capital expenditures
through operating cash flow. See "Business--Business Strategy" for a discussion
of the Company's capital improvement strategy.

36
<PAGE> 39

BUSINESS

GENERAL

The Company owns, operates and develops cable television systems in small and
medium-sized suburban and exurban communities, primarily concentrated in two
operating regions--New England and Ohio/Kentucky--with a third, smaller group of
cable television systems in the Southeast. To date, the Company has acquired
strategically located cable television systems at historically attractive
values, thus establishing its core geographic base and building subscriber mass.
Since closing its initial acquisition in November 1995, the Company has become
one of the 35 largest MSOs in the United States. The Existing Systems passed
approximately 304,700 homes in six states and served approximately 217,900 basic
subscribers as of June 30, 1996.

The Company has recently acquired or entered into agreements to acquire, for an
aggregate purchase price of approximately $244.4 million (subject to
adjustment), the Acquisition Systems which passed approximately 202,800 homes
and served approximately 146,700 basic subscribers as of June 30, 1996. The
Acquisition Systems primarily consist of certain significant cable television
systems to be acquired from ACE and from Triax. The ACE systems, serving
approximately 82,400 subscribers in Kentucky and Indiana, and the Triax systems,
serving approximately 53,200 subscribers in Ohio/Kentucky and the Southeast, are
contiguous or in close proximity to the Existing Systems, consistent with the
Company's strategy of clustering its cable television systems to achieve
economies of scale and operating efficiencies. In addition, the Company has sold
or entered into agreements to sell the Disposition Systems in the Southeast for
an aggregate sales price of approximately $17.0 million, representing a per
subscriber sales price that is over 30% more than the average per subscriber
acquisition cost of the Existing Systems in the Southeast.

As of June 30, 1996, after giving pro forma effect to the purchase of the
Acquisition Systems and the sale of the Disposition Systems, the Company's cable
television systems passed approximately 494,300 homes and served approximately
353,800 basic subscribers, representing basic penetration of 71.6%. On such a
pro forma basis, as of June 30, 1996, the Company would be one of the 25 largest
MSOs in the United States and a dominant cable operator in its two primary
operating regions. On the same pro forma basis, for the six months ended June
30, 1996 and for the year ended December 31, 1995, the Company had revenues of
approximately $60.6 million and $117.0 million, respectively, and EBITDA of
approximately $29.3 million and $53.3 million, respectively.

The Company focuses on cable television systems in small and medium-sized
suburban and exurban markets in order to exploit unique acquisition
opportunities in the cable television marketplace created by the confluence of
several economic, regulatory, competitive and technical forces. The cable
television industry has experienced rapid and continuing consolidation over the
last several years. Operators also have been faced with the need for increased
levels of capital expenditures to expand channel capacity and to provide new
broadband services. In addition, in recent years cable operators have begun to
face the threat of competition from new market entrants, including telephone
company video programming services and DBS services. Many smaller MSOs,
particularly those that were acquisitive during the late 1980's and purchased
systems at significantly higher prices, are either seeking liquidity for their
investors or are constrained from accessing additional capital to upgrade or
rebuild aging plant to remain competitive with other video programming
providers. At the same time that "financial players" and smaller operators are
seeking to exit the cable television business, larger MSOs are directing their
finite human and financial resources to the major urban and suburban markets,
which industry analysts expect to be the first battlefield between cable
television and telephone companies for "information superhighway" related
services. Large MSOs are divesting less strategic systems or are trading for
other assets in an effort to conserve capital, to rationalize their own
geographic clusters and to increase subscriber density in their larger urban and
suburban systems.

The convergence of these market forces has resulted in a large inventory of
cable systems for sale in small to medium-sized markets, combined with a
relatively small pool of capable buyers. As a result of this supply and demand
anomaly, the Company has been able to acquire selectively cable properties at
historically attractive prices. The aggregate purchase price paid by the Company
for the Existing Systems was approximately $315.7 million, representing an
average of 8.7 times the pro forma acquisition cash flow (as defined) of the
Existing Systems.

37
<PAGE> 40

The Company believes that other acquisition opportunities exist, and the Company
is continuously engaged in discussions with other cable television system owners
and operators to explore such potential opportunities. Some of these potential
opportunities may involve systems serving substantial numbers of subscribers.
Although the Company does not currently have definitive agreements to acquire
systems other than those described herein, the Company intends to continue to
pursue, on an opportunistic basis, additional strategic acquisitions and smaller
"fill-in" acquisitions within its existing operating regions to further enhance
their operational and financial performance.

The Existing Systems and the Acquisition Systems represent the substantial
completion of the first phase of the Company's business plan. Through its core
acquisitions in New England and Ohio/Kentucky, the Company has established
significant subscriber mass and positioned itself as a dominant cable operator
in each of its primary operating regions. The Company is currently the second
largest MSO in Maine, and, after giving pro forma effect to the purchase of the
Acquisition Systems, as of June 30, 1996, the Company would be the second
largest MSO in Kentucky and one of the largest operators of cable systems in
small and medium-sized markets in southern Ohio. In the Southeast, the Company
has accumulated attractive systems, which it expects either to consolidate with
subsequent system acquisitions, trade for systems within the Company's primary
operating regions or divest at favorable prices. The next phase of the Company's
business plan will focus on increasing subscriber density within its primary
operating regions through selective acquisitions, integrating and streamlining
business operations, making significant investment and improvements in technical
plant and developing existing and new cable and broadband telecommunications
services.

BUSINESS STRATEGY

TARGET CLUSTERS IN SMALL AND MEDIUM-SIZED MARKETS. The Company has acquired
clusters of cable television systems serving small and medium-sized suburban and
exurban markets which are generally within 50 to 100 miles of larger urban and
suburban communities. The Company believes that such markets have many of the
beneficial attributes of larger urban and suburban markets--moderate to high
household growth, economic stability, attractive subscriber demographics and
favorable potential for additional clustering. Moreover, in such markets, the
Company believes that (i) it will face less direct competition given the lower
population densities and higher costs per subscriber of installing cable plant,
(ii) it will maintain higher subscriber penetration levels and lower customer
turnover based on fewer competing entertainment alternatives, and (iii) its
overhead and certain operating costs will generally be lower than those in
larger markets.

GROW THROUGH STRATEGIC AND OPPORTUNISTIC ACQUISITIONS. Beginning with its
initial acquisition in November 1995 of systems in Maine and Ohio, the Company
has systematically implemented a focused acquisition and consolidation strategy
within its two primary operating regions of New England and Ohio/Kentucky and
its systems group in the Southeast. Going forward, the Company will seek to
acquire systems that can be readily integrated into its primary operating
regions, in order to maximize operating efficiencies. As a consolidator of
systems within its operating regions, the Company will pursue both "fill-in"
acquisitions of smaller systems as well as strategic acquisitions. The Company
believes that such acquisition targets will have diminished strategic value to
other prospective buyers given its geographic prominence in these regions.
Consequently, the Company believes these systems can be purchased at favorable
prices. The Company also opportunistically pursues acquisitions outside of its
primary operating regions that can either be resold at higher prices or
exchanged for systems that are contiguous to its primary operating regions. The
Company has begun to execute this strategy with its Southeast systems.

38
<PAGE> 41

Company has begun to streamline field operations by establishing centralized
customer service facilities, installing state-of-the-art telephone systems, MIS
and billing systems and eliminating duplicative functions. These changes have
resulted in lower administrative costs, better trained employees and a higher
level of customer service. Within the Existing Systems and the Acquisition
Systems, the Company plans to consolidate up to 31 customer service and sales
offices into four regional service centers and seven local payment offices.
Lastly, the Company seeks to reduce technical operating costs and capital
expenditures by consolidating headend facilities. In the Existing Systems and
the Acquisition Systems, the Company plans to eliminate up to 59 of 202
headends. By serving more subscribers from a single distribution point, the
Company has begun to decrease ongoing technical maintenance expenses, improve
system reliability and enhance cost efficiencies in adding new channels and
services.

PROMOTE AND EXPAND SERVICE OFFERINGS. The Company aggressively promotes and
expands services to add and retain customers and increase revenue per customer.
The Company employs a coordinated array of marketing techniques, including
door-to-door sales, telemarketing, direct mail, print and broadcast advertising,
flyers and billing inserts and cross-channel promotion. Many of the Company's
customers received limited service offerings prior to acquisition and,
accordingly, the Company has begun to expand and repackage the basic and premium
services it offers. The Company believes that significant opportunity exists to
increase service revenue by expanding the programming and pricing options
available to its customers. For example, the Company introduced between three
and seven new tiered and premium channels to 89% of the New England subscribers
in May and June of 1996, including lower priced premium services such as The
Disney Channel, Starz! and Encore. The new service launch was accompanied by an
aggressive direct mail and telemarketing campaign and an average basic service
rate increase. By July 1996, monthly basic subscribers and pay units in the New
England operating region increased by 1.6% and 9.7%, respectively. The Company
is in the process of implementing similar new programming launches and marketing
campaigns in its other primary service areas. As systems are consolidated and
technically enhanced, the Company will also seek to expand addressable
penetration. Only approximately 27.6% of the subscribers in the Existing Systems
and the Acquisition Systems access addressable technology. Addressability will
enable the Company to increase revenues derived from pay-per-view movies and
events and new pay services such as interactive video games, including The Sega
Channel. In addition, with the expanded advertising market delivery afforded by
larger, contiguous system clusters, the Company plans to intensify local spot
advertising sales efforts.

STRATEGICALLY UPGRADE SYSTEMS. The Company will selectively upgrade its cable
systems to increase channel capacity, enhance signal quality and improve
technical reliability. The Company believes such technical upgrades will not
only enhance the potential for increasing revenues, but also will improve
customer and community relations and further solidify the Company's position as
the preeminent local provider of video services in its operating regions. In
addition, by implementing a hybrid fiber optic-backbone/coaxial cable design
across the portions of its cable plant that serve its highest subscriber
densities, the Company will effectively position itself for the introduction of
new broadband and interactive services. In its primary operating regions in New
England and Ohio/Kentucky, the Company intends to invest up to $49 million over
the next five years to establish a technical platform of at least 400 MHz to 450
MHz (54 to 62 channels) in a majority of its systems and 550 MHz to 750 MHz (78
to 100 channels) in certain of its larger markets. Over the same period, the
Company plans to invest up to an additional $11 million for addressable
converters in its two primary operating regions.

Additional potential for increased revenues will result as the Company develops
broadband service capability for the transmission of video, voice and data
services. Creating full service broadband terrestrial and satellite networks
interconnecting contiguous cable systems will enable the Company's regional
systems to offer a wide range of new services. These service offerings will
include multi-channel pay-per-view, interactive video games, advertising
insertion and the delivery of videotext or other information services. The
Company's regional systems could then be interconnected, creating potential
opportunities to utilize the network for services such as Internet access,
regional advertising, distance learning and telemedicine. Over the longer term,
potential applications for fiber interconnected networks include competitive
telephone access, long distance telephone backhaul, PCS and ESMR interconnection
and energy management and monitoring.

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<PAGE> 42

functions that directly impact subscribers--sales and marketing, customer
service and administration and technical support--are implemented more quickly
and effectively. In addition, as a result of its consolidation efforts, the
Company has been able to enhance its customer service by increasing hours of
operations for its customer service functions, better coordinating service
calls, increasing responsiveness to customer inquiries and standardizing
maintenance procedures. While centralizing and improving customer service, the
Company has retained local payment and technical offices to maintain its
presence and visibility within its communities.

THE CABLE TELEVISION INDUSTRY

A cable television system receives television, radio and data signals that are
transmitted to the system's headend site by means of off-air antennas, microwave
relay systems and satellite earth stations. These signals are then modulated,
amplified and distributed, primarily through coaxial, and in some instances,
fiber optic cable, to customers who pay a fee for this service. Cable television
systems may also originate their own television programming and other
information services for distribution through the system. Cable television
systems generally are constructed and operated pursuant to non-exclusive
franchises or similar licenses granted by local governmental authorities for a
specified term of years, generally for extended periods of up to 15 years.

The cable television industry developed in the United States in the late 1940's
and early 1950's in response to the needs of residents in predominantly rural
and mountainous areas of the country where the quality of off-air television
reception was inadequate due to factors such as topography and remoteness from
television broadcast towers. In the 1960's, cable television systems also
developed in small and medium-sized cities and suburban areas that had a limited
availability of clear off-air television station signals. All of these markets
are regarded within the cable industry as "classic" cable television system
markets. In more recent years, cable television systems have been constructed in
large urban cities and nearby suburban areas, where good off-air reception from
multiple television stations usually is already available, in order to receive
the numerous, satellite-delivered channels carried by cable television systems
which are not otherwise available via broadcast television reception.

Cable television systems offer customers various levels (or "tiers") of basic
cable services consisting of (i) off-air television signals of local network,
independent and educational stations, (ii) a limited number of television
signals from so-called "superstations" originating from distant cities (such as
WTBS, WGN and WWOR), (iii) various satellite-delivered, non-broadcast channels
(such as Cable News Network ("CNN"), MTV: Music Television, the USA Network
("USA"), Entertainment and Sports Programming Network ("ESPN") and Turner
Network Television ("TNT")), (iv) certain programming originated locally by the
cable television system (such as public, governmental and educational access
programs) and (v) informational displays featuring news, weather, stock market
and financial reports and public service announcements. For an extra monthly
charge, cable television systems also offer premium television services to their
customers. These services (such as Home Box Office ("HBO"), Showtime and
regional sports networks) are satellite-delivered channels consisting
principally of feature films, live sports events, concerts and other special
entertainment features, usually presented without commercial interruption.

A customer generally pays an initial installation charge and fixed monthly fees
for basic and premium television services and for other services (such as the
rental of converters and remote control devices). Such monthly service fees
constitute the primary source of revenues for cable television systems. In
addition to customer revenues from these services, cable television systems
generate revenues from additional fees paid by customers for pay-per-view
programming of movies and special events and from the sale of available
advertising spots on advertiser-supported programming. Cable television systems
frequently also offer to their customers home shopping services, which pay the
systems a share of revenues from sales of products in the systems' service
areas. See "--Programming, Services and Rates."

DEVELOPMENT OF THE SYSTEMS

The Existing Systems. The Company's Existing Systems include cable television
systems acquired in five separate asset purchase transactions since the
Company's inception. The aggregate purchase price paid by the Company for the
Existing Systems was approximately $315.7 million, representing an average of
8.7 times the pro forma acquisition cash flow of such systems. As of June 30,
1996, the Company's Existing Systems passed approximately 304,700 homes and
served approximately 217,900 basic subscribers and 91,300 premium units,
representing basic

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<PAGE> 43

penetration of 71.5% and premium penetration of 41.9%. The information set forth
below briefly describes the five acquisitions that comprise the Existing
Systems, which are organized into two primary operating regions--New England and
Ohio/Kentucky--and a third, smaller group of systems in the Southeast.

UVC Systems. On November 9, 1995, the Company completed its first acquisition
by acquiring the UVC Systems in Maine and Ohio for an aggregate purchase price
of $120.7 million, an 8.3 times multiple of pro forma acquisition cash flow. At
the date of acquisition, the UVC Systems passed approximately 116,600 homes and
served approximately 87,700 basic subscribers. Approximately 50,600 subscribers
in Maine formed the initial systems in the Company's New England cluster and
approximately 37,100 subscribers in Ohio formed the initial systems in the
Company's Ohio/Kentucky cluster.

Longfellow Systems. On November 21, 1995, the Company completed a "fill-in"
acquisition by purchasing the Longfellow Systems in central Maine for an
aggregate purchase price of $6.1 million, a 7.4 times multiple of pro forma
acquisition cash flow. At the date of acquisition, the Longfellow Systems passed
approximately 8,700 homes and served approximately 5,100 basic subscribers, all
of which were integrated into the Company's New England cluster.

C4 Systems. On February 1, 1996, the Company completed the acquisition of the
C4 Systems for an aggregate purchase price of $47.6 million, an 8.2 times
multiple of pro forma acquisition cash flow. At the date of acquisition, the C4
Systems passed approximately 60,300 homes and served approximately 40,700 basic
subscribers. The C4 Systems, which are located in Virginia and Tennessee, formed
the initial systems in the Company's Southeast region.

Americable Systems. On March 29, 1996, the Company completed a second "fill-in"
acquisition by purchasing the Americable Systems in Maine for $4.7 million, a
6.5 times multiple of pro forma acquisition cash flow. At the date of
acquisition, the Americable Systems passed approximately 5,200 homes and served
approximately 3,400 basic subscribers. The Americable Systems have also been
integrated into the Company's New England cluster.

Cox Systems. On April 9, 1996, the Company completed the acquisition of the Cox
Systems in Ohio and Kentucky for an aggregate purchase price of $136.2 million,
a 9.5 times multiple of pro forma acquisition cash flow. At the date of
acquisition, the Cox Systems passed approximately 110,900 homes and served
approximately 78,300 basic subscribers. The Cox Systems have been integrated
into the Ohio/Kentucky cluster.

The Acquisition Systems. The Company has recently acquired or entered into
agreements to acquire the Acquisition Systems for an aggregate purchase price of
approximately $244.4 million (subject to adjustment). As of June 30, 1996, the
Acquisition Systems passed approximately 202,800 homes and served approximately
146,700 basic subscribers and 63,000 premium units, representing basic
penetration of 72.3% and premium penetration of 43.0%. As described below, many
of the Acquisitions Systems are in close proximity to the Existing Systems,
consistent with the Company's strategy of clustering its cable television
systems to achieve operating efficiencies. It is anticipated that these
acquisitions will be completed in the third or fourth quarter of 1996, but there
can be no assurances that any of these transactions will be consummated.

ACE Systems. On July 15, 1996, the Company entered into an agreement with ACE
to purchase substantially all of the assets comprising the 19 ACE Systems
located in the central and northern Bluegrass region of Kentucky and adjacent
southern Indiana for a purchase price of $146.0 million. The purchase price is
subject to reduction in the event the number of basic subscribers or operating
revenues do not meet a specified target at closing. As of June 30, 1996, the ACE
Systems passed approximately 107,100 homes and served approximately 82,400 basic
subscribers (75,400 in Kentucky and 7,000 in Indiana) who purchased
approximately 28,100 premium service units, representing basic penetration of
77.0% and premium penetration of 34.2%. At June 30, 1996, the average monthly
revenue per subscriber was $30.37. The Company intends to operate all of the ACE
Systems as part of its Ohio/Kentucky cluster. The transaction is subject to the
approval of a bankruptcy court considering ACE's proposed plan of
reorganization. All classes of ACE's creditors whose approval is necessary have
approved the plan, and the Company expects the bankruptcy court to approve the
plan, including the ACE transaction.

Triax Systems. On May 16, 1996, the Company entered into an agreement with
Triax to purchase substantially all of the assets comprising the 59 Triax
Systems serving approximately 53,200 basic subscribers in Ohio, Kentucky,
Virginia, West Virginia, Pennsylvania, Maryland and North Carolina for a
purchase price of $85.0 million. The

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<PAGE> 44

purchase price is subject to reduction in the event the operating revenues of
the Triax Systems do not meet a specified target for the two calendar month
period prior to closing. As of June 30, 1996, the Triax Systems operated at a
67.1% basic penetration and 56.5% premium penetration and generated average
monthly revenue per basic subscriber of $30.28. The Company intends to operate
the Kentucky, Ohio and West Virginia systems, serving approximately 28,700 basic
subscribers, as part of its Ohio/Kentucky cluster. The Company intends to
operate the North Carolina, Virginia, Pennsylvania and Maryland systems, serving
approximately 24,500 basic subscribers, as part of its Southeast region.

Upon acquisition and the subsequent integration of the ACE Systems and the Triax
Systems with the Existing Systems, the Company will serve over 200,000
subscribers in communities south of Columbus, Ohio to the southern perimeter of
Lexington, Kentucky. Within this region are ten county service areas along the
Interstate 75 "growth corridor," which runs from Cincinnati through Lexington to
Atlanta, Georgia and is among the fastest growing areas in the region. After
completion of several capital projects by 1997, it is anticipated that 30% of
the Company's subscribers within this region will be served by
fiber-to-the-feeder 500 MHz or 750 MHz technical plant.

Grassroots Systems. On August 30, 1996, the Company acquired the Grassroots
Systems for a purchase price of $9.6 million. As of June 30, 1996, the
Grassroots Systems passed approximately 12,400 homes and served approximately
7,800 basic subscribers (5,400 in New Hampshire and 2,400 in Maine),
representing basic penetration of 63.1%. The Company intends to operate the
Grassroots Systems as part of its New England cluster.

Penn/Ohio Systems. On August 6, 1996, the Company entered into an agreement
with SRW Penn/Ohio to purchase substantially all the assets comprising two cable
television systems in Ohio and Pennsylvania (the "Penn/Ohio Systems") for a
purchase price of $3.8 million. The purchase price is subject to reduction in
the event that minimum subscriber thresholds are not met at closing. As of June
30, 1996, the Penn/Ohio Systems passed approximately 4,100 homes and served
approximately 3,300 basic subscribers (1,700 in Ohio and 1,600 in Pennsylvania),
representing basic penetration of 80.1%. The Company intends to operate the Ohio
system as part of its Ohio/Kentucky cluster. The Pennsylvania system will be
interconnected with the Triax Systems' Rockwood, Pennsylvania system and
operated as part of the Southeast region.

The Disposition Systems. On July 24, 1996, the Company sold its Chatsworth,
Georgia system, representing approximately 5,700 basic subscribers, to an
affiliate of Helicon Partners for $8.7 million. The Company also has entered
into an agreement to sell its Woodstock and New Market, Virginia systems,
representing approximately 5,100 subscribers, to Shenandoah Cable Television
Company, an affiliate of Shenandoah Telephone Company, for $8.3 million. It is
anticipated that this sale will be completed in the third or fourth quarter of
1996. The aggregate $17.0 million sales price for the Disposition Systems
represents a per subscriber sales price that is over 30% more than the average
per subscriber acquisition cost of the Existing Systems in the Southeast. There
can be no assurances that the Company will be able to achieve similar results in
connection with any future dispositions of Existing Systems in the Southeast.

SYSTEM DESCRIPTIONS

After giving effect to the purchase of the Acquisition Systems and the sale of
the Disposition Systems, the Company's cable television systems will consist of
two primary operating regions--New England and Ohio/Kentucky--with a third,
smaller group of systems in the Southeast. The following chart provides certain
pro forma operating statistics as of and for the six-month period ended June 30,
1996:

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<PAGE> 45

COMBINED EXISTING SYSTEMS AND ACQUISITION SYSTEMS

<TABLE>
<CAPTION>
------------------------------------------------------
NEW ENGLAND OHIO/KENTUCKY SOUTHEAST COMBINED
CLUSTER CLUSTER REGION SYSTEMS
----------- ------------- --------- ---------
<S> <C> <C> <C> <C>
Homes passed.................................. 95,414 306,639 92,255 494,308
Basic subscribers............................. 68,591 229,097 56,124 353,812
Basic penetration............................. 71.9% 74.7% 60.8% 71.6%
Premium units................................. 25,073 95,358 29,243 149,674
Premium penetration........................... 36.6% 41.6% 52.1% 42.3%
Avg. monthly revenue per basic subscriber..... $28.32 $29.98 $26.43 $29.02
----------- ------------- --------- ---------
</TABLE>

New England Cluster. As of June 30, 1996, after giving pro forma effect to the
purchase of the Acquisition Systems, the Company passed approximately 95,400
homes and served approximately 68,600 basic subscribers and 25,100 premium units
in the New England cluster, which is comprised of communities primarily in
southern and coastal Maine and central New Hampshire. The majority of the Maine
systems are located within a 30-60 minute driving radius of the cities of
Portland and Bangor in predominantly blue-collar, middle income bedroom
communities. In addition, the Company serves resort communities in Maine's
Carrabassett Valley that include Sugarloaf/USA and Sunday River. Most of the
approximately 5,400 subscribers in New Hampshire are within commuting distance
of Laconia, Plymouth and Littleton. The 1996 median household income and
projected household growth rates (from 1996 to 2001) in the New England cluster
meet or exceed U.S. averages for counties with less than 100,000 households
("Comparable Counties"), according to Equifax National Decision Systems, 1996.
After giving pro forma effect to the purchase of the Acquisition Systems,
approximately 87% of the counties in which the Company has systems have fewer
than 100,000 households.

The New England systems are currently served by 70 headends, of which up to 19
are scheduled to be eliminated over the next three years by the Company as part
of its consolidation efforts. Prior to acquisition, the New England cluster was
served by seven customer service locations, which the Company will consolidate
over the next six months into a single regional service center in Rockland,
Maine and a local payment office in Madawaska, Maine. More than 66.5% of the
current plant design for the New England Systems is at 54 channels (400 MHz) or
higher. Upon completion of the plant rebuild projects to fiber-to-the-feeder
design by year-end 1996 in Rockland and Thomaston, Maine, 10.0% of the plant in
the New England cluster will have channel capacities of 78 channels (550 MHz) or
higher. Over the next five years, the Company expects to invest up to $11
million selectively to rebuild or upgrade the majority of the New England
systems to at least a 54 channel technical platform to position the systems for
business opportunities in advertising insertion, impulse pay-per-view, high
speed data networking and Internet access. In addition, the Company plans to
complete several line extension projects, which are expected to add
approximately 1,000 homes passed to the New England systems by year-end 1996.

To date, the Company has added between three and seven tiered programming or
premium channels to over 89.0% of its New England systems. In conjunction with
the channel line-up improvements, direct mail promotions and follow-up
telemarketing campaigns have enabled the Company to raise its average combined
basic and tier service rates in those systems from $23.21 per month in May 1996
to $25.44 per month in June 1996. By the end of July 1996, monthly basic
subscribers and pay units increased by approximately 1.6% and 9.7%,
respectively. Moreover, the Company has begun to introduce addressability in the
New England systems to improve revenues derived from pay-per-view and other
interactive services such as video games, including The Sega Channel. As of June
30, 1996, none of the New England systems were addressable. As systems are
interconnected and consolidated, the Company will more aggressively pursue spot
advertising revenues, which accounted for only $0.17 per subscriber per month in
June 1996.

Ohio/Kentucky Cluster. As of June 30, 1996, after giving effect to the purchase
of the Acquisition Systems, the Company passed approximately 306,600 homes and
served approximately 229,100 subscribers and 92,300 premium units in the
Ohio/Kentucky cluster in communities primarily in southern Ohio and northern and
central Kentucky. The majority of the Ohio systems are located within a 60
minute driving distance of Cincinnati, Columbus or Toledo. The majority of the
Company's Kentucky subscribers reside in the outlying communities surrounding
Lexington and Ashland, Kentucky. The Company's Madison, Indiana system, which
served approxi-

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mately 7,000 subscribers as of June 30, 1996, is near Cincinnati. The Company's
approximately 240 West Virginia subscribers reside along the Ohio River and are
served from the Ohio/Kentucky systems. The 1996 median household income in the
Ohio/Kentucky cluster exceeds U.S. averages for Comparable Counties, according
to Equifax National Decision Systems, 1996. However, growth in the number of
households in the Ohio/Kentucky cluster is projected to lag that of Comparable
Counties over the next five years.

Over the next three years, the Company plans to eliminate up to 32 of the 90
headends that currently serve the Ohio/Kentucky systems, which will increase the
cluster's average system size to over 4,000 subscribers per headend. The
Ohio/Kentucky cluster's fifteen customer service offices will be consolidated by
the Company by early 1997 into two regional service centers, in Chillicothe,
Ohio and Richmond, Kentucky, and five local payment offices. Over 40.0% of the
current plant design for the Ohio/Kentucky systems is at 54 channels or higher,
including fiber-to-the-feeder 550 MHz and 750 MHz systems in Delhi and Ironton,
Ohio, Nicholasville and Cynthiana, Kentucky and Madison, Indiana. Upon
completion of its current rebuild of the Chillicothe and Jackson, Ohio and
Winchester, Kentucky systems by 1997, the Company will serve 26.0% of its
subscribers with at least 78 channel plant. Similar to the New England cluster,
the Company plans to invest significant capital selectively to rebuild or
upgrade the majority of the Ohio/Kentucky systems to at least a 54 channel
technical platform to position the systems for additional cable and broadband
telecommunications service revenues. Over the next five years, the Company
expects to invest $38 million in connection with its plant improvement program
for these systems.

Currently, the Company is in the process of adding between three and six tiered
programming or premium channels to its systems. Average combined basic and tier
service rates in those systems are also being increased in conjunction with
direct mail and telemarketing campaigns, as in the New England cluster. Similar
new channel launches, rate increases and marketing programs are planned to be
instituted by the Company in the majority of the Ohio systems by the end of
1996. As part of its technical improvement program, the Company plans to
increase the deployment of addressable converters, which served only 42.0% of
the Ohio/Kentucky subscribers as of June 30, 1996, and more aggressively market
pay-per-view and other interactive services such as video games. In addition,
the systems acquired from Cox and those to be acquired from ACE generated
significant spot advertising revenues, averaging $0.76 and $1.32 per subscriber
per month, respectively, in 1995. The Company plans to leverage these
advertising sales efforts in the remaining Ohio/Kentucky systems, which averaged
only $0.71 per month per subscriber in June 1996.

Southeast Region. As of June 30, 1996, after giving effect to the purchase of
the Acquisition Systems and the sale of the Disposition Systems, the Company
passed approximately 92,300 homes and served approximately 56,100 subscribers
and 29,200 premium units in the Southeast region. The Southeast region is
comprised of four groups of systems located in the following states: (i)
Tennessee, which served approximately 16,700 basic subscribers as of June 30,
1996; (ii) North Carolina, which served approximately 15,400 basic subscribers;
(iii) Virginia/West Virginia, which served approximately 19,200 basic
subscribers; and (iv) Maryland/Pennsylvania, which served approximately 4,800
basic subscribers. The Tennessee systems are located primarily in Greeneville,
Tennessee and surrounding communities in Eastern Tennessee. The North Carolina
systems are located between Raleigh and Rocky Mount, North Carolina. The
majority of the Virginia systems are located in north central Virginia between
Charlottesville and Winchester and in Eastern Virginia near Richmond and the
Chesapeake Bay. The Maryland/Pennsylvania systems are located at the Maryland
and Pennsylvania border. The 1996 median household income and actual and
projected growth rate in the number of households (from 1990 to 2001) in the
Southeast region exceed U.S. averages for Comparable Counties, according to
Equifax National Decision Systems, 1996.

As noted above, the Company plans either to consolidate further the Southeast
region systems through acquisitions, trade the systems for properties within its
primary operating regions in New England and Ohio/Kentucky, or sell the systems
outright. To date, the Company has received expressions of interest to trade or
sell all four system groups in this region. As such, the Company's operating and
capital expenditure plans for the Southeast region will be limited to
maintenance and discretionary projects that will increase the value of the
systems to a potential buyer or trading partner. The Southeast systems are
currently served by 41 headends. The Company has identified at least seven
headends that could be eliminated by interconnected plant. Prior to the
acquisitions, the Southeast region consisted of nine customer service locations.
The Company has consolidated five offices from the Existing Systems into a
regional service center in Greeneville, Tennessee and a local payment office in
Matthews, Virginia. The Company believes that the remaining four offices of the
Acquisition Systems can also be integrated into the

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<PAGE> 47

Greeneville facility. Approximately 30% of the current plant design for the
Southeast systems is at 54 channels (400 MHz) or higher. The Company will
continue to evaluate capital expenditures to rebuild and upgrade plant based on
the sales or trading status of the Southeast systems.

PROGRAMMING, SERVICES AND RATES

The Company has various contracts to obtain basic and premium programming for
its systems from program suppliers whose compensation is typically based on a
fixed fee per customer. The Company's programming contracts are generally for a
fixed period of time and are subject to negotiated renewal. Some program
suppliers provide volume discount pricing structures or offer marketing support
to the Company. In particular, the Company has negotiated programming agreements
with premium service suppliers that offer cost incentives to the Company under
which premium service unit prices decline as certain premium service growth
thresholds are met. The Company's successful marketing of multiple premium
service packages emphasizing customer value has enabled the Company to take
advantage of such cost incentives. In addition, the Company is a member of a
programming consortium consisting of small to medium-sized MSOs serving, in the
aggregate, over three million cable subscribers. The consortium was formed to
help create efficiencies in the areas of securing and administering programming
contracts, as well as to establish more favorable programming rates and contract
terms for small to medium-sized operators. Going forward, the Company intends to
negotiate programming contract renewals both directly and through the consortium
to obtain the best possible contract terms. The Company also has various
retransmission consent arrangements with commercial broadcast stations. Some of
these consents require direct payment of nominal fees for carriage. In some
other instances no payment is required; however, the Company has entered into
agreements with certain stations to carry satellite-delivered cable programming
which is affiliated with the network carried by such stations. A substantial
portion of these retransmission consent agreements are required to be renewed
before October 1996. There can be no assurances that such agreements can or will
be renewed under similar terms. See "Legislation and Regulation."

Although services vary from system to system due to differences in channel
capacity, viewer interests and community demographics, the majority of the
Company's systems offer a "basic service tier," consisting of local television
channels (network and independent stations) available over-the-air and local
public, governmental, home-shopping and leased access channels. The majority of
the Company's systems offers, for a monthly fee, an expanded basic tier of
"superstations" originating from distant cities (such as WTBS, WGN and WWOR),
various satellite-delivered, non-broadcast channels (such as CNN, MTV, USA, ESPN
and TNT) and certain programming originated locally by the cable system (such as
public, governmental and educational access programs) providing information with
respect to news, time, weather and the stock market. In addition to these
services, the Company's systems typically provide one or more premium services
purchased from independent suppliers and combined in different formats to appeal
to the various segments of the viewing audience, such as HBO, Cinemax, Showtime,
The Movie Channel, Starz! and The Disney Channel. These services are
satellite-delivered channels consisting principally of feature films, original
programming, live sports events, concerts and other special entertainment
features, usually presented without commercial interruption. Such premium
programming services are offered by the Company's systems both on an a la carte
basis and as part of premium service packages designed to enhance customer value
and to enable the Company's systems to take advantage of programming agreements
offering cost incentives based on premium unit growth. Subscribers may subscribe
for one or more premium units. Additionally, the Company plans to upgrade
certain of its systems with fiber optic cable, which will allow the Company to
expand its ability to use "tiered" packaging strategies for marketing premium
services and promoting niche programming services. The Company believes that
this ability will increase basic and premium penetration as well as revenue per
subscriber.

Rates to subscribers vary from market to market and in accordance with the type
of service selected. As of June 30, 1996, the average monthly basic fees for the
Existing Systems was $9.09 for the basic service tier and $22.52 for the
expanded basic service tier. These rates reflect reductions effected in response
to the 1992 Cable Act's re-regulation of cable television industry rates, and in
particular, the FCC's rate regulations implementing the 1992 Cable Act, which
became effective in 1993. A one-time installation fee, which may be waived in
part during certain promotional periods, is charged to new subscribers.
Management believes that the Company's rate practices are generally consistent
with the current practices in the industry. See "Legislation and Regulation."

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MARKETING, CUSTOMER SERVICE AND COMMUNITY RELATIONS

The Company aggressively markets and promotes its cable television services with
the objective of adding and retaining customers and increasing revenue per
customer. The Company actively markets its basic and premium program packages
through a number of coordinated marketing techniques, which include (i) direct
door-to-door sales in targeted areas where subscriber concentration and
efficiencies provide a reasonable cost of sale, (ii) telemarketing primarily for
pay unit acquisition and customer satisfaction, quality control and retention,
(iii) direct mail for promotional and targeted service offers, (iv) monthly
billing statement inserts and flyers for major basic subscriber campaigns, (v)
local newspaper and broadcast television and radio advertising where population
densities are sufficient to provide a reasonable cost of sale, and (vi)
cross-channel promotion of new services such as pay-per-view.

The Company is dedicated to providing superior customer service. To meet this
objective, the Company provides its customers with a full line-up of
programming, a wide variety of programming options and packages, timely and
reliable service and improved technical quality. The Company's employees receive
ongoing training in customer service, sales and subscriber retention and
technical support. In general, following a new installation, customer service
representatives will follow up by telephone contact with the subscriber to
assess the quality of installation and the service the subscriber is receiving
and to ensure overall subscriber satisfaction. Customer service representatives
and technicians are also trained to market upgrades or cross-sell services at
the point of sale or service. As part of its consolidation efforts, the Company
has established centralized customer service facilities, increased hours of
operation, and installed state-of-the-art telephone, information and billing
systems to improve responsiveness to customer needs. In addition, the Company
has retained local payment and technical offices to maintain its local presence
and visibility within its communities.

Recognizing that strong governmental, franchise and public relations are crucial
to the overall success of the Company, an aggressive initiative has been
undertaken to maintain and improve the working relationships with all
governmental entities within the franchise areas. Regional managers are required
to meet regularly with local officials for the purposes of keeping them advised
on the Company's activities within the communities, to receive information and
feedback on the Company's standing with officials and customers alike and to
ensure that the Company can maximize its growth potential in areas where new
housing development is occurring or where significant technical plant
improvement is underway. The regional managers are also responsible for all
franchise renewal negotiations as well as the maintenance of Company visibility
through involvement in various community and civic organizations and charities.

TECHNOLOGICAL DEVELOPMENTS

As part of its commitment to customer service, the Company maintains high
technical performance standards in all of its cable systems. Acquired and
existing systems are selectively upgraded to increase channel capacity and
improve picture quality and reliability for the delivery of additional
programming and new services. Before committing the capital to upgrade a system,
Company management carefully assesses (i) subscribers' demand for more channels,
(ii) upgrade requirements in connection with franchise renewals, (iii) which
competing technologies are currently available, (iv) the likely subscriber
demand for other cable and broadband telecommunications services, (v) the extent
to which system improvements will increase the attractiveness of the property to
a future buyer and (vi) the cost effectiveness of any such upgrades.

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<PAGE> 49

The following table sets forth certain information regarding the channel
capacities and miles of plant for the Existing Systems and the Acquisition
Systems as of June 30, 1996.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
UP TO 36 37 TO 42 43 TO 54 55 TO 62 63 TO 78 79 TO 100
CHANNELS CHANNELS CHANNELS CHANNELS CHANNELS CHANNELS TOTAL
-------- -------- -------- -------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
EXISTING SYSTEMS:
Number of systems.............. 14.4 38.5 23.7 22.7 1.8 0.0 101.0
Miles of plant................. 538 3,541 1,739 1,863 880 0 8,561
% miles of plant............... 6.3% 41.4% 20.3% 21.8% 10.3% 0.0% 100.0%
ACQUISITION SYSTEMS:
Number of systems.............. 10.5 59.0 0.5 26.0 2.0 2.0 100.0
Miles of plant................. 1,030 3,228 179 1,169 152 261 6,019
% miles of plant............... 17.1% 53.6% 3.0% 19.4% 2.5% 4.3% 100.0%
TOTAL:
Number of systems.............. 24.9 97.5 24.2 48.7 3.8 2.0 201.0
Miles of plant................. 1,568 6,769 1,918 3,032 1,032 261 14,580
% miles of plant............... 10.8% 46.4% 13.2% 20.8% 7.1% 1.8% 100.0%
</TABLE>

The Company's systems have an average capacity of approximately 49 channels and
approximately 27.6% of the Company's subscribers currently access addressable
technology. Addressable technology enables the Company, from the office or
headend, to change the premium channels being delivered to each subscriber or to
activate pay-per-view services. These service level changes can be effectuated
without the delay or expense associated with dispatching a technician to the
subscriber's home. Addressable technology also reduces premium service theft and
allows the Company automatically to disconnect delinquent accounts
electronically from the customer service center.

The use of fiber optic technology in concert with coaxial cable has
significantly enhanced cable system performance. Fiber optics strands are
capable of carrying hundreds of video, data and voice channels over extended
distances without the extensive signal amplification typically required for
coaxial cable. To date, the Company has used fiber to interconnect headends, to
eliminate headends by installing fiber backbones and to reduce amplifier
cascades, thereby improving both picture quality and system reliability and
gaining operational efficiencies.

Digital compression and high capacity data modems may become commercially viable
within the next few years. These developments may enable an increase in system
channel capacity and may allow the introduction of alternative communications
delivery systems for data and voice. The Company does not currently plan to
deploy digital technology, as it believes such technologies will not become
cost-effective for its systems in the near term. However, the Company will
continue to monitor the development of such technology and its utilization by
other cable operators to assess the cost-effectiveness of widespread deployment
of such technology.

FRANCHISES

Cable television systems are generally constructed and operated under
non-exclusive franchises granted by local governmental authorities. These
franchises typically contain many conditions, such as time limitations on
commencement and completion of construction; conditions of service, including
number of channels, types of programming and the provision of free service to
schools and certain other public institutions; and the maintenance of insurance
and indemnity bonds. The provisions of local franchises are subject to federal
regulation under the Cable Acts. See "Legislation and Regulation."

As of June 30, 1996, the Company held 249 franchises. These franchises, the
majority of which are non-exclusive, provide for the payment of fees to the
issuing authority. In all of the Existing Systems, such franchise fees are
passed through directly to the customers. The Cable Acts prohibit franchising
authorities from imposing franchise fees in excess of 5% of gross revenues and
also permit the cable system operator to seek renegotiation and modification of
franchise requirements if warranted by changed circumstances. See "Legislation
and Regulation."

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<PAGE> 50

More than 80.0% of the Company's basic subscribers are in service areas that
require a franchise. The table below groups the franchises of the Existing
Systems by date of expiration and presents the approximate number and percentage
of basic subscribers for each group of franchises as of June 30, 1996.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------
NUMBER OF PERCENTAGE OF NUMBER OF PERCENTAGE OF
YEAR OF FRANCHISE EXPIRATION FRANCHISES TOTAL FRANCHISES SUBSCRIBERS FRANCHISED SUBSCRIBERS
- ------------------------------------ --------- ---------------- ----------- ----------------------
<S> <C> <C> <C> <C>
1996-2000........................... 92 36.9% 70,472 38.5%
2001 and after...................... 157 63.1% 112,389 61.5%
--------- ---------------- ----------- ----------------------
Total.......................... 249 100.0% 182,861 100.0%
</TABLE>

The Cable Acts provide, among other things, for an orderly franchise renewal
process in which franchise renewal will not be unreasonably withheld or, if
renewal is withheld, the franchising authority must pay the operator the "fair
market value" for the system covered by such franchise. In addition, the Cable
Acts established comprehensive renewal procedures which require that an
incumbent franchisee's renewal application be assessed on its own merits and not
as part of a comparative process with competing applications. See "Legislation
and Regulation."

The Company believes that it generally has very good relationships with its
franchising communities. The Company has never had a franchise revoked or failed
to have a franchise renewed. In addition, all of the franchises of the Company
eligible for renewal have been renewed or extended at or prior to their stated
expirations, and no franchise community has refused to consent to a franchise
transfer to the Company.

COMPETITION

Cable television systems generally operate pursuant to franchises granted on a
nonexclusive basis. The 1992 Cable Act prohibits franchising authorities from
unreasonably denying requests for additional franchises and permits franchising
authorities to operate cable television systems without a franchise. It is
possible that a franchising authority might grant a second franchise to another
company containing terms and conditions more favorable than those afforded the
Company. Well-financed businesses from outside the cable industry (such as the
public utilities that own the poles to which cable is attached) may become
competitors for franchises or providers of competing services. In a limited
number of the Company's franchise areas, the Company faces direct competition
from another franchised cable television system.

Cable operators also face competition from private satellite master antenna
television ("SMATV") systems that serve condominiums, apartment and office
complexes and private residential developments. SMATV systems offer both
improved reception of local television stations and many of the same
satellite-delivered program services offered by franchised cable television
systems. SMATV operators often enter into exclusive agreements with building
owners or homeowners' associations, although some states have enacted laws that
authorize franchised cable operators access to such private complexes. These
laws have been challenged in the courts with varying results. The ability of the
Company to compete for customers in residential and commercial developments
served by SMATV operators is uncertain.

In recent years, the FCC and the Congress have adopted policies providing a more
favorable operating environment for new and existing technologies that provide,
or have the potential to provide, substantial competition to cable television
systems. These technologies include, among others, DBS service, whereby signals
are transmitted by satellite to receiving facilities located on customer
premises. Programming is currently available to the owners of DBS dishes through
conventional, medium and high-powered satellites. DBS systems are expected to
increase channel capacity and thus to provide movies, broadcast stations, and
other program services comparable to those of

48
<PAGE> 51

cable television systems. Digital satellite service ("DSS") offered by DBS
systems has certain advantages over cable systems with respect to programming
and digital quality, as well as disadvantages that include high upfront costs
and a lack of local programming, service and equipment distribution.

While DSS presents a potential competitive threat, the Company currently has
excess channel capacity available in most of its systems, as well as strong
local customer service and technical support, which will enhance its ability to
compete. By selectively increasing channel capacities of systems to between 54
and 100 channels and introducing new premium channels, pay-per-view and other
services, the Company will seek to maintain programming parity with DSS and
magnify competitive service price points. Based on internal tracking of
subscriber disconnects, the Company believes it has lost less than one percent
of its customers to date to DSS providers. The Company will continue to monitor
closely the activity level and the product and service needs of its customer
base to counter potential erosion of its market position or unit growth to DSS.

Cable television systems also compete with wireless program distribution
services such as MMDS, which uses low power microwave frequencies to transmit
video programming over the air to customers. Additionally, the FCC recently
adopted new regulations allocating frequencies in the 28 GHz band for a new
multichannel wireless video service similar to MMDS. Wireless distribution
services generally provide many of the programming services provided by cable
systems, and digital compression technology is likely to increase significantly
the channel capacity of their systems. Because MMDS service requires
unobstructed "line of sight" transmission paths, the ability of MMDS systems to
compete may be hampered in some areas by physical terrain and large buildings.
In the majority of the Company's franchise service areas, prohibitive topography
and limited "line of sight" access has limited, and is likely to continue to
limit, competition from MMDS systems. The Company is not aware of any
significant MMDS operation currently within its cable franchise service areas.

The 1996 Telecom Act eliminated the previous prohibition on the provision of
video programming by local exchange telephone companies ("LECs") in their
telephone service areas. Various LECs currently are seeking to provide video
programming services within their telephone service areas through a variety of
distribution methods, including both the deployment of broadband wire facilities
and the use of wireless (MMDS) transmission. Cable television systems could be
placed at a competitive disadvantage if the delivery of video programming
services by LECs becomes widespread, since LECs may not be required, under
certain circumstance, to obtain local franchises to deliver such video services
or to comply with the variety of obligations imposed upon cable television
systems under such franchises. Issues of cross-subsidization by LECs of video
and telephony services also pose strategic disadvantages for cable operators
seeking to compete with LECs that provide video services. The Company believes,
however, that the small to medium-sized markets in which it provides or expects
to provide cable services are unlikely to support competition in the provision
of video and telecommunications broadband services given the lower population
densities and higher costs per subscriber of installing plant. The 1996 Telecom
Act's provisions promoting facilities-based broadband competition are primarily
targeted at larger markets, and its prohibition on buy outs and joint ventures
between incumbent cable operators and LECs exempts small operators and carriers
meeting certain criteria. See "Legislation and Regulation." The Company believes
that significant growth opportunities exist for the Company by establishing
cooperative rather than competitive relationships with LECs within its service
areas, to the extent permitted by law. The Company has initiated discussions
with such carriers regarding possible joint ventures.

Other new technologies may become competitive with non-entertainment services
that cable television systems can offer. The FCC has authorized television
broadcast stations to transmit textual and graphic information useful both to
consumers and businesses. The FCC also permits commercial and noncommercial FM
stations to use their subcarrier frequencies to provide nonbroadcast services
including data transmissions. The FCC established an over-the-air Interactive
Video and Data Service that will permit two-way interaction with commercial and
educational programming along with informational and data services. The
expansion of fiber optic systems by LECs and other common carriers is providing
facilities for the transmission and distribution to homes and businesses of
video services, including interactive computer-based services like the Internet,
data and other nonvideo services. The FCC has held spectrum auctions for
licenses to provide PCS. PCS will enable license holders, including cable
operators, to provide voice and data services.

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<PAGE> 52

Advances in communications technology as well as changes in the marketplace and
the regulatory and legislative environments are constantly occurring. Thus, it
is not possible to predict the effect that ongoing or future developments might
have on the cable industry or on the operations of the Company.

PROPERTIES

The Company's principal physical assets consist of cable television operating
plant and equipment, including signal receiving, encoding and decoding devices,
headends and distribution systems and customer house drop equipment for each of
its cable television systems. The signal receiving apparatus typically includes
a tower, antenna, ancillary electronic equipment and earth stations for
reception of satellite signals. Headends, consisting of associated electronic
equipment necessary for the reception, amplification and modulation of signals,
are located near the receiving devices. The Company's distribution system
consists primarily of coaxial and fiber optic cables and related electronic
equipment. Customer devices consist of decoding converters, which expand channel
capacity to permit reception of more than twelve channels of programming. Some
of the Existing Systems utilize converters that can be addressed by sending
coded signals from the headend over the cable network. See "--Technological
Developments."

The Company owns or leases parcels of real property for signal reception sites
(antenna towers and headends), microwave facilities and business offices, and
owns most of its service vehicles. The Company believes that its properties,
both owned and leased, are in good condition and are suitable and adequate for
the Company's business operations.

The Company's cables generally are attached to utility poles under pole rental
agreements with local public utilities, although in some areas the distribution
cable is buried in underground ducts or trenches. The physical components of the
Company's systems require maintenance and periodic upgrading to keep pace with
technological advances.

LITIGATION

There are no material pending legal proceedings to which the Company is a party
or to which any of its properties are subject.

EMPLOYEES

At June 30, 1996, the Company had approximately 300 equivalent full-time
employees, nine of whom belonged to a collective bargaining unit. The Company
considers its relations with its employees to be good.

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<PAGE> 53

LEGISLATION AND REGULATION

The cable television industry currently is regulated by the FCC and certain
state and local governments. In addition, legislative and regulatory proposals
under consideration by the Congress and federal agencies may materially affect
the cable television industry.

The Cable Acts and the 1996 Telecom Act amended the Communications Act and
established a national policy to guide the development and regulation of cable
television systems. Principal responsibility for implementing the policies of
the Cable Acts and the 1996 Telecom Act is allocated between the FCC and state
or local franchising authorities. The FCC and state regulatory agencies are
required to conduct numerous rulemaking and regulatory proceedings to implement
the 1996 Telecom Act and such proceedings may materially affect the cable
television industry. The following is a summary of federal laws and regulations
materially affecting the growth and operation of the cable television industry
and a description of certain state and local laws.

THE TELECOMMUNICATIONS ACT OF 1996

The 1996 Telecom Act, which became effective on February 8, 1996, is the most
comprehensive reform of the nation's telecommunications laws since the
Communications Act. The 1996 Telecom Act is expected to cause significant
changes in the marketplace for cable, telephone and other telecommunications
services. Although the long term goal of the 1996 Telecom Act is to promote
competition and decrease regulation of various communications industries, in the
short term, the law delegates to the FCC (and in some cases to the states) broad
new rulemaking authority. The new law requires many of these rulemakings to be
completed in a very limited period of time. The following is a brief summary of
the important features of the 1996 Telecom Act that will affect the cable and
telephone industries.

Cable Communications. The 1996 Telecom Act deregulates CPST rates for most MSOs
(including the Company) after March 31, 1999, except that such rates are
immediately deregulated for certain small operators. Deregulation will occur
sooner for systems in markets where comparable video programming services, other
than DBS, are offered by local telephone companies, or their affiliates, or by
third parties using the local telephone company's facilities, or where
"effective competition" is established under the 1992 Cable Act. The 1996
Telecom Act also modifies the uniform rate provisions of the 1992 Cable Act by
prohibiting regulation of bulk discount rates offered to multiple dwelling units
(except that a cable operator may not charge predatory prices to a multiple
dwelling unit) and permits regulated equipment rates to be computed by
aggregating costs of broad categories of equipment at the franchise, system,
regional or company level. The 1996 Telecom Act eliminates the right of
individual customers to file rate complaints with the FCC concerning certain
CPSTs and requires the FCC to issue a final order within 90 days after receipt
of CPST rate complaints filed by any franchising authority after the date of
enactment of the 1996 Telecom Act. The 1996 Telecom Act also modifies the
existing statutory provisions governing cable system technical standards,
equipment compatibility, customer notice requirements and program access,
permits certain operators to include losses incurred prior to September 1992 in
setting regulated rates and repeals the three-year anti-trafficking prohibition
adopted in the 1992 Cable Act.

The 1996 Telecom Act eliminates the requirement that LECs obtain FCC approval
under Section 214 of the Communications Act before providing video services in
their telephone service areas and removes the telephone company/cable television
cross-ownership prohibition that had been codified by the 1984 Cable Act,
thereby allowing LECs to offer video services in their telephone service areas.
LECs may provide service as traditional cable operators with local franchises or
they may opt to provide their programming over unfranchised "open video
systems," subject to certain conditions, including, but not limited to, setting
aside a portion of their channel capacity for use by unaffiliated program
distributors on a nondiscriminatory basis. Under certain circumstances, cable
operators also will be able to offer services through open video systems. The
1996 Telecom Act also prohibits a local telephone company from acquiring a cable
operator in its telephone service area except in limited circumstances, such as
where a nonurbanized franchise area has a population of less than 35,000 or
pursuant to an FCC waiver.

Telephone. The 1996 Telecom Act removes barriers to entry in the local
telephone exchange market that is now monopolized by the seven Regional Bell
Operating Companies ("RBOCs") and other LECs by preempting state and

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<PAGE> 54

local laws that restrict competition and by requiring LECs to provide
nondiscriminatory access and interconnection to potential competitors, such as
cable operators and long distance companies. At the same time, the new law
eliminates the prospective effects of the AT&T, GTE and McCaw consent decrees
and permits the RBOCs to enter the market for long distance services (through a
separate subsidiary) after they satisfy certain competitive requirements
intended to open the local telephone markets to competition. The 1996 Telecom
Act also permits interstate utility companies to enter the telecommunications
market for the first time.

While the 1996 Telecom Act imposes new requirements with regard to
interconnection, it also directs the FCC to substantially relax much of its
regulation of telecommunications providers. The FCC may, for example, forbear
from applying any regulation if it finds, inter alia, that forbearance would be
consistent with the public interest and would promote competition. The new law
also eliminates or streamlines many of the requirements applicable to local
exchange carriers, such as the requirement to obtain prior approval of the
extension or construction of telephone plant. In addition, the 1996 Telecom Act
requires the FCC and states to review universal service programs and to
encourage access to advanced telecommunications services by schools, libraries
and other public institutions.

Other Communications Services. In addition to these provisions governing
regulation of specific segments of the market, the 1996 Telecom Act also
contains provisions regulating the content of video programming and computer
services. Specifically, the new law prohibits the use of computer services to
transmit "indecent" material to minors. Several special three-judge federal
district courts have issued preliminary injunctions enjoining the enforcement of
these provisions as unconstitutional to the extent they regulated the
transmission of indecent material. The 1996 Telecom Act also requires the FCC to
prescribe guidelines for a ratings system for violent and indecent video
programming (unless video programming distributors adopt voluntary guidelines)
and requires all new television sets to contain a so-called "V-chip" capable of
blocking all programs with a given rating. The new law also substantially
relaxes current broadcast ownership rules by eliminating, among other things,
the statutory broadcast/cable television cross-ownership restriction that had
been codified by the 1984 Cable Act and by directing the FCC to eliminate its
network/cable cross-ownership regulation and review the need for its rule
prohibiting broadcast/cable cross-ownership.

Rate Regulation. Prior to April 1, 1993, virtually all cable systems were free
to adjust cable service rates without obtaining local governmental approval. The
1992 Cable Act authorized rate regulation for certain cable communications
services and equipment in communities that are not subject to "effective
competition" as defined by federal law. Under the 1992 Cable Act virtually all
cable television systems were subject to rate regulation for basic cable service
and equipment by local officials under the oversight of the FCC, which
prescribed detailed guidelines for such rate regulation. The 1992 Cable Act also
required the FCC to resolve complaints about rates for nonbasic cable
programming services (other than programming offered on a per channel or per
program basis) and to reduce any such rates found to be unreasonable. The 1992
Cable Act limited the ability of cable television systems to raise rates for
basic and certain cable programming services (collectively the "Regulated
Services") and eliminated the 5% annual basic service rate increase permitted by
the 1984 Cable Act without local approval. Cable services offered on a per
channel (a la carte) or per program (pay-per-view) basis are not subject to rate
regulation by either local franchising authorities or the FCC.

The 1996 Telecom Act deregulates rates for CPSTs after March 31, 1999 for most
MSOs (including the Company) and, for certain small cable operators, immediately
eliminates rate regulation of CPSTs and, in certain circumstances, basic
services and equipment. The deregulation of a smaller cable operator's rates
only applies in franchise areas in which the small cable operator serves 50,000
or fewer subscribers. To qualify for the "small cable operator" rate
deregulation under the 1996 Telecom Act, the operator (and its affiliates) must
serve in the aggregate less than one percent (currently estimated by the FCC to
be approximately 617,000 subscribers) of all U.S. cable television subscribers
and may not be affiliated with an entity or group of entities that in the
aggregate has annual gross revenues exceeding $250 million. The FCC has adopted
interim rules in which it has defined "affiliate" as any entity that has a 20%
or greater equity interest in the small cable operator (active or passive) or
that holds de jure or de facto control over the small cable operator. The FCC is
currently conducting a rulemaking to implement the 1996 Telecom Act's "small
cable operator" rate deregulation, including adoption of permanent affiliation
standards.

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<PAGE> 55

On April 1, 1993, the FCC adopted regulations pursuant to the 1992 Cable Act
governing the rates charged to customers for Regulated Services and ordered an
interim freeze on these rates effective April 5, 1993. The FCC's rate
regulations became effective on September 1, 1993 and the FCC's rate freeze was
extended until the earlier of May 15, 1994 or the date on which a cable system's
basic service rate was regulated by a franchising authority.

In implementing the 1992 Cable Act, the FCC adopted a benchmark method of
regulating rates for Regulated Services. Cable operators with rates above the
allowable level under the FCC's benchmark methodology may justify such rates
using a cost-of-service methodology. As of September 1, 1993, cable operators
subject to rate regulation whose then current rates were above FCC benchmark
levels were required, absent a successful cost-of-service showing, to reduce
those rates to the benchmark level or by up to 10% of the rates in effect on
September 30, 1992, whichever reduction was less, adjusted for equipment costs
and inflation and programming modifications occurring subsequent to September
30, 1992. Effective May 15, 1994, the FCC modified its benchmark methodology to
require reductions of up to 17% of the rates for Regulated Services in effect on
September 30, 1992, adjusted for inflation, channel modifications, equipment
costs and increases in certain operating costs. The FCC's modified benchmark
regulations were designed to cause an additional 7% reduction in the rates for
Regulated Services on top of any rate reductions implemented under the FCC's
initial benchmark regulations.

The FCC's initial "going-forward" regulations limited rate increases for
Regulated Services after the establishment of an initial regulated rate to an
inflation-indexed amount plus increases for channel additions and certain
external costs beyond the cable operator's control, such as franchise fees,
taxes and increased programming costs. Under these regulations, cable operators
are entitled to take a 7.5% markup on certain programming cost increases. In
November 1994, the FCC modified these regulations and instituted an alternative
three-year flat fee markup plan for charges relating to new channels added to
the CPST. As of January 1, 1995, cable operators may charge customers for
channels added to the CPST after May 14, 1994 at a monthly rate of up to $0.20
per added channel, up to a total of $1.20 plus an additional $0.30 for
programming license fees per customer over the first two years of the three-year
period. Cable operators may charge an additional $0.20 plus the cost of the
programming in the third year (1997) for one additional channel added in that
year. Alternatively, operators may increase rates by the amount of any
programming license fees in connection with such added channels, provided that
the total monthly rate increase per customer for the added channels, including
license fees, does not exceed $1.50 over the first two years, and $1.70, plus
any increase in the license fees for the added channels, in the third year.
Operators must make a one-time election to use either the $0.20 per channel
adjustment or the 7.5% markup on programming cost increases for all channels
added after December 31, 1994. The FCC is currently considering whether to
modify or eliminate the regulation allowing operators to receive the 7.5% markup
on increases in existing programming license fees.

In November 1994, the FCC adopted regulations permitting cable operators to
create new product tiers ("NPTs") that will not be subject to rate regulation if
certain conditions are met. The FCC also revised its previously adopted policy
and concluded that packages of a la carte services are subject to rate
regulation by the FCC as CPSTs. Because of the uncertainty created by the FCC's
prior a la carte package guidelines, the FCC allows cable operators, under
certain circumstances, to treat previously offered a la carte packages as NPTs.

In September 1995, the FCC authorized a new, alternative method of implementing
rate adjustments which allows cable operators to increase rates for Regulated
Services annually on the basis of projected increases in external costs
(inflation, costs of programming, franchise-related obligations and changes in
the number of regulated channels) rather than on the basis of cost increases
incurred in the preceding calendar quarter. Operators electing not to recover
all of their accrued external costs and inflation pass-throughs each year may
recover them (with interest) in subsequent years.

In addition to rate deregulation for certain small cable operators under the
1996 Telecom Act, the FCC adopted regulations in June 1995 ("Small System
Regulations") pursuant to the 1992 Cable Act that were designed to reduce the
substantive and procedural burdens of rate regulation on "small cable systems."
For purposes of these FCC regulations, a "small cable system" is a system
serving 15,000 or fewer subscribers that is owned by or affiliated with a cable
company which serves, in the aggregate, 400,000 or fewer subscribers. Under the
FCC's Small System Regulations, qualifying systems may justify their regulated
service and equipment rates using a simplified cost-of-service formula. The
regulatory benefits accruing to qualified small cable systems under certain
circum-

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<PAGE> 56

stances remain effective even if such systems are later acquired by a larger
cable operator that serves in excess of 400,000 subscribers. Various franchising
authorities and municipal groups have requested the FCC to reconsider its Small
System Regulations. The FCC recently determined that the 1996 Telecom Act does
not require modification of its Small System Regulations. The Company believes
that many of the Existing Systems and the Acquisition Systems currently satisfy
the eligibility criteria under the FCC's Small System Regulations and would
therefore be eligible to use the FCC's simplified cost-of-service methodology to
justify basic service, CPST and equipment rates if regulated by a franchising
authority or the FCC.

Franchising authorities are empowered to regulate the rates charged for
additional outlets and for the installation, lease and sale of equipment used by
customers to receive the basic service tier, such as converter boxes and remote
control units. The FCC's rules require franchising authorities to regulate these
rates on the basis of actual cost plus a reasonable profit as defined by the
FCC. The 1996 Telecom Act requires the FCC to revise its regulations to permit
operators to compute regulated equipment rates by aggregating costs of broad
categories of equipment at the franchise, system, regional or company level. In
November 1995, the FCC initiated a general rulemaking proposal that permits
cable operators to price services uniformly across multiple franchise areas, as
well as regional areas. If the FCC adopts the proposals, cable operators that
provide service to clusters of systems would be permitted to charge uniform
rates across large geographic areas. Because the proposal is designed to be
revenue neutral, it would not affect the overall revenue that operators receive,
but administrative and marketing costs could be reduced.

Cable operators required to reduce rates may also be required to refund
overcharges with interest. Rate reductions will not be required where a cable
operator can demonstrate that rates for Regulated Services are justified and
reasonable using cost-of-service guidelines. In November 1993, the FCC ruled
that operators choosing to justify above-benchmark rates through a
cost-of-service submission must do so for all Regulated Services. In February
1994, the FCC adopted interim cost-of-service regulations establishing, among
other things, an industry-wide 11.25% after-tax rate of return on an operator's
allowable rate base and a rebuttable presumption that acquisition costs above
original historic book value of tangible assets should be excluded from the
allowable base. In December 1995, the FCC adopted final cost-of-service rate
regulations requiring, among other things, cable operators to exclude 34% of
system acquisition costs related to intangible and tangible assets used to
provide Regulated Services. The FCC also reaffirmed the industry-wide 11.25%
after-tax rate of return on an operator's allowable rate base, but initiated a
further rulemaking in which it proposes to use an operator's actual debt cost
and capital structure to determine an operator's cost of capital or rate of
return.

"Anti-Buy Through" Provisions. The 1992 Cable Act also requires cable systems
to permit customers to purchase video programming offered by the operator on a
per channel or a per program basis without the necessity of subscribing to any
tier of service, other than the basic service tier, unless the system's lack of
addressable converter boxes or other technological limitations does not permit
it to do so. The statutory exemption for cable systems that do not have the
technological capacity to offer programming in the manner required by the
statute is available until a system obtains such capability, but not later than
December 2002. The FCC may waive such time periods, if deemed necessary. Most of
the Company's cable systems do not have the technological capability to offer
programming in the manner required by the statute and currently are exempt from
complying with the requirement. The Company cannot predict the extent to which
this provision of the 1992 Cable Act and the corresponding FCC rules may cause
customers to discontinue optional nonbasic service tiers in favor of the less
expensive basic cable service.

Must Carry/Retransmission Consent. The 1992 Cable Act contains broadcast signal
carriage requirements that allow local commercial television broadcast stations
to elect once every three years to require a cable system to carry the station,
subject to certain exceptions, or to negotiate for "retransmission consent" to
carry the station. A cable system generally is required to devote up to
one-third of its activated channel capacity for the carriage of local commercial
television stations whether pursuant to the mandatory carriage or retransmission
consent requirements of the 1992 Cable Act. Local noncommercial television
stations are also given mandatory carriage rights; however, such stations are
not given the option to negotiate retransmission consent for the carriage of
their signals by cable systems. Additionally, cable systems are required to
obtain retransmission consent for all "distant" commercial television stations
(except for commercial satellite-delivered independent "superstations" such as
WTBS), commercial radio stations and certain low power television stations
carried by such systems after October 6,

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<PAGE> 57

1993. In April 1993, a special three-judge federal district court issued a
decision upholding the constitutional validity of the mandatory signal carriage
requirements. In June 1994, the United States Supreme Court vacated this
decision and remanded it to the district court to determine, among other
matters, whether the statutory carriage requirements are necessary to preserve
the economic viability of the broadcast industry. In December 1995, the district
court upheld the mandatory carriage requirements of the 1992 Cable Act. In
February 1996, the United States Supreme Court agreed to review this decision.
The Company cannot predict the ultimate outcome of this litigation. Pending
final action by the Supreme Court, the mandatory broadcast signal carriage
requirements remain in effect.

As a result of the mandatory carriage rules, some of the Company's systems have
been required to carry television broadcast stations that otherwise would not
have been carried and have caused displacement of possibly more attractive
programming. The retransmission consent rules have resulted in the deletion of
certain local and distant televisions broadcast stations which various Company
systems were carrying. To the extent retransmission consent fees must be paid
for the continued carriage of certain television stations, the Company's cost of
doing business will increase with no assurance that such fees can be recovered
through rate increases.

Designated Channels. The 1984 Cable Act permits franchising authorities to
require cable operators to set aside certain channels for public, educational
and governmental access programming. The 1984 Cable Act also requires a cable
system with 36 or more channels to designate a portion of its channel capacity
for commercial leased access by third parties to provide programming that may
compete with services offered by the cable operator. In August 1996, a federal
appellate court generally upheld the constitutionality of these designated
channel provisions, but indicated that in certain situations the requirement to
provide such channels might be found unconstitutional. The FCC has adopted rules
regulating: (i) the maximum reasonable rate a cable operator may charge for
commercial use of the designated channel capacity; (ii) the terms and conditions
for commercial use of such channels; and (iii) the procedures for the expedited
resolution of disputes concerning rates or commercial use of the designated
channel capacity. The FCC is currently conducting a further rulemaking to
consider adoption of a cost-based methodology to compute the maximum reasonable
rate a cable operator may charge for commercial use of the designated channel
capacity.

Franchise Procedures. The 1984 Cable Act affirms the right of franchising
authorities (state or local, depending on the practice in individual states) to
award one or more franchises within their jurisdictions and prohibits non-
grandfathered cable systems from operating without a franchise in such
jurisdictions. The 1992 Cable Act encourages competition with existing cable
systems by (i) allowing municipalities to operate their own cable systems
without franchises, (ii) preventing franchising authorities from granting
exclusive franchises or unreasonably refusing to award additional franchises
covering an existing cable system's service area, and (iii) prohibiting (with
limited exceptions) the common ownership of cable systems and co-located MMDS or
SMATV systems. In January 1995, the FCC relaxed its restrictions on ownership of
SMATV systems to permit a cable operator to acquire SMATV systems in the
operator's existing franchise area so long as the programming services provided
through the SMATV system are offered according to the terms and conditions of
the cable operator's local franchise agreement. The 1996 Telecom Act provides
that the cable/SMATV and cable/MMDS cross-ownership rules do not apply in any
franchise area where the cable operator faces "effective competition" as defined
by federal law. The 1996 Telecom Act also permits local telephone companies to
provide video programming services as traditional cable operators with local
franchises.

The 1984 Cable Act also provides that in granting or renewing franchises, local
authorities may establish requirements for cable-related facilities and
equipment, but not for video programming or information services other than in
broad categories. Among the more significant provisions, the Cable Act limits
franchise fees to 5% of cable system revenues and permits cable operators to
obtain modification of franchise requirements by the franchising authority or
judicial action if warranted by changed circumstances. The Company's franchises
typically provide for payment of fees to franchising authorities in the range of
3% to 5% of "revenues" (as defined by each franchise agreement).

The 1984 Cable Act contains renewal procedures designed to protect incumbent
franchisees against arbitrary denials of renewal. The 1992 Cable Act makes
several changes to the renewal process which could make it easier for a
franchising authority to deny renewal. Moreover, even if the franchise is
renewed, the franchising authority

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<PAGE> 58

may seek to impose new and more onerous requirements such as significant
upgrades in facilities and services or increased franchise fees as a condition
of renewal. Similarly, if a franchising authority's consent is required for the
purchase or sale of a cable system or franchise, such authority may attempt to
impose more burdensome or onerous franchise requirements in connection with a
request for such consent. Historically, franchises have been renewed for cable
operators that have provided satisfactory services and have complied with the
terms of their franchises. The Company believes that it has generally met the
terms of its franchises and has provided quality levels of service, and it
anticipates that its future franchise renewal prospects generally will be
favorable.

Various courts have considered whether franchising authorities have the legal
right to limit franchise awards to a single cable operator and to impose certain
substantive franchise requirements (i.e., access channels, universal service and
other technical requirements). These decisions have been somewhat inconsistent
and, until the United States Supreme Court rules definitively on the scope of
cable operators' First Amendment protections, the legality of the franchising
process generally and of various specific franchise requirements is likely to be
in a state of flux.

Ownership Limitations. Pursuant to the 1992 Cable Act, the FCC adopted rules
prescribing national customer limits and limits on the number of channels that
can be occupied on a cable system by a video programmer in which the cable
operator has an attributable interest. The FCC's horizontal ownership limits
have been stayed because a federal district court found the statutory limitation
to be unconstitutional. An appeal of that decision is pending and has been
consolidated with an appeal of the FCC's regulations which implemented the
national customer and channel limitation provisions of the 1992 Cable Act. The
1996 Telecom Act eliminates the statutory prohibition on the common ownership,
operation or control of a cable system and a television broadcast station in the
same service area and directs the FCC to eliminate its regulatory restrictions
on cross-ownership of cable systems and national broadcasting networks and to
review its broadcast-cable ownership restrictions to determine if they are
necessary in the public interest.

Telephone Company Ownership of Cable Systems. The 1984 Cable Act, FCC
regulations and the 1982 federal court consent decree that settled the AT&T
antitrust suit regulated the provision of video programming and other
information services by telephone companies. The statutory provision and
corresponding FCC regulations are of particular competitive importance because
telephone companies already own much of the plant necessary for cable
communications operations, such as poles, underground conduit and associated
rights-of-way. The 1996 Telecom Act makes far-reaching changes in the regulation
of telephone companies that provide video programming services. The new law
eliminates current legal barriers to competition in the local telephone and
cable communications businesses, preempts legal barriers to competition that
previously existed in state and local laws and regulation and sets basic
standards for relationships between telecommunications providers. The 1996
Telecom Act generally limits acquisitions and prohibits certain joint ventures
between LECs and cable operators in the same market. LECs or their affiliates
generally are prohibited from holding greater than a 10% financial interest or
any management interest in a cable operator providing cable service within the
LEC's telephone service area. Similarly, cable operators and their affiliates
generally are prohibited from holding greater than a 10% financial interest or
any management interest in an LEC which provides telephone service in the cable
operator's franchise area. An LEC and cable operator who are operating in the
same market may not enter into any joint venture or partnership to provide video
programming directly to subscribers or to provide telecommunications services to
households within that market. There are some statutory exceptions to the buy
out and joint venture prohibitions, including exceptions for certain small cable
systems (as defined by federal law) and for cable systems or telephone
facilities serving certain rural areas, and the FCC is authorized to grant
waivers of the prohibitions under certain circumstances. The FCC and, in some
cases, states are required to conduct numerous rulemaking proceedings to
implement the 1996 Telecom Act. The ultimate outcome of these rulemakings, and
the ultimate impact of the 1996 Telecom Act or any final regulations adopted
pursuant to the new law on the Company or its business, cannot be determined at
this time.

Pole Attachment. The Communications Act requires the FCC to regulate the rates,
terms and conditions imposed by public utilities for cable systems' use of
utility pole and conduit space unless state authorities can demonstrate that
they adequately regulate pole attachment rates. In the absence of state
regulation, the FCC administers pole attachment rates through the use of a
formula that it has devised. In some cases, utility companies have increased
pole attachment fees for cable systems that have installed fiber optic cables
and that are using such cables for the distribution of nonvideo services. The
FCC concluded that, in the absence of state regulation, it has jurisdiction to

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<PAGE> 59

determine whether utility companies have justified their demand for additional
rental fees and that the Communications Act does not permit disparate rates
based on the type of service provided over the equipment attached to the
utility's pole.

The 1996 Telecom Act modifies the current pole attachment provisions of the
Communications Act by immediately permitting certain providers of
telecommunications services to rely upon the protections of the current law and
by requiring that utilities provide cable systems and telecommunications
carriers with nondiscriminatory access to any pole, conduit or right-of-way
controlled by the utility. Additionally, within two years of enactment of the
1996 Telecom Act, the FCC is required to adopt new regulations to govern the
charges for pole attachments used by companies providing telecommunications
services, including cable operators. These new pole attachment regulations will
become effective five years after enactment of the 1996 Telecom Act, and any
increase in attachment rates resulting from the FCC's new regulations will be
phased in equal annual increments over a period of five years beginning on the
effective date of the new FCC regulations.

Other Statutory Provisions. The 1992 Cable Act and the 1996 Telecom Act
preclude video programmers affiliated with cable companies or common carriers
providing video programming directly to customers from favoring the affiliated
company over competitors and require such programmers to sell their programming
to other multichannel video distributors. These provisions limit the ability of
cable program suppliers affiliated with cable companies or common carriers
providing video programming to offer exclusive programming arrangements to their
affiliates. The Communications Act also includes provisions, among others,
concerning horizontal and vertical ownership of cable systems, customer service,
customer privacy, commercial leased access channels, marketing practices, equal
employment opportunity, franchise renewal and transfer, award of franchises,
technical standards, consumer equipment compatibility and obscene or indecent
programming. The United States Supreme Court recently held parts of the 1992
Cable Act regulating "indecent" programming on local access channels to be
unconstitutional, but upheld the statutory right of cable operators to prohibit
or limit the provision of "indecent" programming on commercial leased access
channels.

Other FCC Regulations. The FCC has numerous rulemaking proceedings pending that
will implement various provisions of the 1996 Telecom Act; it also has adopted
regulations implementing various provisions of the 1992 Cable Act and the 1996
Telecom Act that are the subject of petitions requesting reconsideration of
various aspects of its rulemaking proceedings. In addition to the FCC
regulations noted above, there are other FCC regulations covering such areas as
equal employment opportunity, syndicated program exclusivity, network program
nonduplication, registration of cable systems, maintenance of various records
and public inspection files, microwave frequency usage, lockbox availability,
origination cablecasting and sponsorship identification, antenna structure
notification, marking and lighting, carriage of local sports programming,
application of the fairness doctrine and rules governing political broadcasts,
limitations on advertising contained in nonbroadcast children's programming,
consumer protection and customer service, leased commercial access, ownership of
home wiring, indecent programming, programmer access to cable systems,
programming agreements, technical standards, consumer electronics equipment
compatibility and DBS implementation. The FCC has the authority to enforce its
regulations through the imposition of substantial fines, the issuance of cease
and desist orders and/or the imposition of other administrative sanctions, such
as the revocation of FCC licenses needed to operate certain transmission
facilities often used in connection with cable operations.

The 1992 Cable Act and the FCC's rules implementing it generally have increased
the administrative and operational expenses of cable systems and have resulted
in additional regulatory oversight by the FCC and local franchise authorities.
The Company will continue to develop strategies to minimize the adverse impact
the FCC's regulations and the other provisions of the 1992 Cable Act and the
1996 Telecom Act have on the Company's business. However, no assurances can be
given that the Company will be able to develop and successfully implement such
strategies to minimize the adverse impact of the FCC's rate regulations, or the
1992 Cable Act or the 1996 Telecom Act on the Company's business.

Cable systems are subject to federal copyright licensing covering carriage of
television and radio broadcast signals. In exchange for filing certain reports
and contributing a percentage of their revenues to a federal copyright royalty

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<PAGE> 60

pool, cable operators can obtain blanket permission to retransmit copyrighted
material on broadcast signals. The nature and amount of future payments for
broadcast signal carriage cannot be predicted at this time. The possible
simplification, modification or elimination of the compulsory copyright license
is the subject of continuing legislative review. The elimination or substantial
modification of the cable compulsory license could adversely affect the
Company's ability to obtain suitable programming and could substantially
increase the cost of programming that remained available for distribution to the
Company's customers. The Company cannot predict the outcome of this legislative
activity.

Cable operators may produce programming and advertising that use music
controlled by the two major music performing rights organizations, ASCAP and
BMI. In October 1989, the special rate court of the United States District Court
for the Southern District of New York imposed interim rates on the cable
industry's use of ASCAP-controlled music. The same federal district court
recently established a special rate court for BMI. BMI and certain cable
industry representatives recently concluded negotiations for a standard
licensing agreement covering the usage of BMI music contained in advertising and
other information inserted by operators into cable programming and on certain
local access and origination channels carried on cable systems. ASCAP and cable
industry representatives have met to discuss the development of a standard
licensing agreement covering ASCAP music in local origination and an access
licensing agreement covering ASCAP music in local origination and access
channels and pay-per-view programming. Although the Company cannot predict the
ultimate outcome of these industry negotiations or the amount of any license
fees it may be required to pay for past and future use of ASCAP-controlled
music, it does not believe such license fees will be material to the Company's
operations.

STATE AND LOCAL REGULATION

Cable systems are subject to state and local regulation, typically imposed
through the franchising processing because they use local streets and
rights-of-way. Regulatory responsibility for essentially local aspects of the
cable business such as franchisee selection, billing practices, system design
and construction, and safety and consumer protection remains with either state
or local officials and, in some jurisdictions, with both.

Cable systems generally are operated pursuant to nonexclusive franchises,
permits or licenses granted by a municipality or other state or local government
entity. Franchises generally are granted for fixed terms and in many cases are
terminable if the franchisee fails to comply with material provisions. The terms
and conditions of franchises vary materially from jurisdiction to jurisdiction.
Each franchise generally contains provisions governing payment of franchise
fees, franchise term, system construction and maintenance obligations, system
channel capacity, design and technical performance, customer service standards,
franchise renewal, sale or transfer of the franchise, territory of the
franchisee, indemnification of the franchising authority, use and occupancy of
public streets and types of cable services provided. A number of states subject
cable systems to the jurisdiction of centralized state governmental agencies,
some of which impose regulation of a character similar to that of a public
utility. Attempts in other states to regulate cable systems are continuing and
can be expected to increase. To date, no state in which the Company operates has
enacted such state level regulation. The Company cannot predict whether any of
the states in which it currently operates will engage in such regulation in the
future. State and local franchising jurisdiction is not unlimited, however, and
must be exercised consistently with federal law. The 1992 Cable Act immunizes
franchising authorities from monetary damage awards arising from regulation of
cable systems or decisions made on franchise grants, renewals, transfers and
amendments.

The foregoing does not purport to describe all present and proposed federal,
state, and local regulations and legislation affecting the cable industry. Other
existing federal regulations, copyright licensing, and, in many jurisdictions,
state and local franchise requirements, are currently the subject of judicial
proceedings, legislative hearings and administrative and legislative proposals
which could change, in varying degrees, the manner in which cable systems
operate. Neither the outcome of these proceedings nor the impact on the cable
communications industry or the Company can be predicted at this time.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS OF FRONTIERVISION INC.

FVOP's sole general partner is FVP, whose sole general partner is FVP GP, L.P.
("FVP GP"). FVP GP's sole general partner is FrontierVision Inc. Information
with respect to the directors and executive officers of FrontierVision Inc. and
Capital, respectively, is set forth below.

FRONTIERVISION INC.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------ --- ------------------------------------------
<S> <C> <C>
James C. Vaughn 50 President, Chief Executive Officer and
Director
John S. Koo 35 Senior Vice President, Chief Financial
Officer, Secretary and Director
William Mahon 55 Vice President of Operations
Gary T. Crosby 44 Vice President of Development
James W. McHose 32 Vice President and Treasurer
Todd E. Padgett 30 Director of Finance
</TABLE>

FRONTIERVISION CAPITAL CORPORATION

<TABLE>
<CAPTION>
<S> <C> <C>
NAME AGE POSITION
- ------------------------------------------ --- ------------------------------------------

<CAPTION>
<S> <C> <C>
James C. Vaughn 50 President, Chief Executive Officer and
Director
John S. Koo 35 Senior Vice President, Chief Financial
Officer, Secretary and Director
James W. McHose 32 Vice President and Treasurer
</TABLE>

JAMES C. VAUGHN, President, Chief Executive Officer and a Director of
FrontierVision Inc. and Capital and a founder of the Company, is a cable
television system operator and manager with over 30 years of experience in the
cable television industry. From 1987 to 1995, he served as Senior Vice President
of Operations for Triax Communications Corp., a top 40 MSO, where he was
responsible for managing all aspects of small and medium-sized cable television
systems. These systems grew from serving 57,000 subscribers to over 376,000
subscribers during Mr. Vaughn's tenure. Prior to joining Triax Communications,
Mr. Vaughn served as Director of Operations for Tele-Communications, Inc. from
1986 to 1987, with responsibility for managing the development of Chicago-area
cable television systems. From 1985 to 1986, Mr. Vaughn was Division Manager for
Harte-Hanks Communications. From 1983 to 1985, Mr. Vaughn served as Vice
President of Operations for Bycom, Inc. From 1979 to 1983, Mr. Vaughn served as
Director of Engineering for the Development Division of Cox Cable Communications
Corp. From 1970 to 1979, Mr. Vaughn served as Senior Staff Engineer for Viacom,
Inc.'s cable division, and as Director of Engineering for Showtime, a division
of Viacom International, Inc.

JOHN S. KOO, Senior Vice President, Chief Financial Officer, Secretary and a
Director of FrontierVision Inc. and Capital and a founder of the Company, has
over 11 years of banking experience in the telecommunications industry. From
1990 to 1995, Mr. Koo served as a Vice President at Canadian Imperial Bank of
Commerce ("CIBC"), where he co-founded CIBC's Mezzanine Finance Group, targeted
at emerging media and telecommunications businesses. From 1986 to 1990, Mr. Koo
was a Vice President at Bank of New England specializing in media finance. From
1984 to 1986, he was a management consultant to the financial services industry.

WILLIAM MAHON, Vice President of Operations of FrontierVision Inc. since
December 1995, has over 15 years of cable television operations management
experience. Prior to joining FrontierVision Inc., Mr. Mahon served as Vice
President of Operations for UVC, a top 50 MSO, from 1990 to 1995, where he was
responsible for the day-to-day operations of approximately 130 cable systems
located in twelve states. From 1983 to 1989, Mr. Mahon served as President and
General Manager of Heritage Cable Vision, a 90,000 subscriber MSO.

Mr. Mahon is a member of the Society of Cable Engineers and serves on the Board
of Directors of the New England Cable Television Association.

GARY T. CROSBY, Vice President of Development of FrontierVision Inc. since
October 1995, has over 22 years of experience in the cable television industry.
Mr. Crosby served as Regional Manager for Triax Communications Corp., a top 40
MSO, from 1988 to 1995, where he managed 130 cable systems representing 233
franchising

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authorities. From 1982 to 1988, Mr. Crosby served as Regional Manager for Dowden
Communications, Inc., an Atlanta-based MSO. From 1978 to 1982, he served as Vice
President for Crosby Cable Company, where he was responsible for day-to-day
operations. Mr. Crosby has been actively involved in the Illinois Cable
Television Association (ICTA), where he served as Chairman.

JAMES W. MCHOSE, Vice President and Treasurer of FrontierVision Inc. and Capital
since July 1996, has over 10 years of accounting and tax experience, including
during the past six years providing tax, accounting and consulting services to
companies engaged in the cable television industry. Prior to joining the
Company, Mr. McHose was a Senior Manager in the Information, Communications, and
Entertainment practice of KPMG Peat Marwick, LLP, where he specialized in
taxation of companies in the cable television industry. In this capacity, Mr.
McHose served MSOs with over 14 million subscribers in the aggregate. Mr. McHose
is a member of the Cable Television Tax Professional's Institute and is a
Certified Public Accountant.

TODD E. PADGETT, Director of Finance of FrontierVision Inc. since July 1995, has
over five years of project management and corporate finance experience in the
natural gas transmission and marketing industry, where he specialized in
developing, evaluating, negotiating and financing natural gas pipeline and
international power projects. From 1990 to 1995, Mr. Padgett served as Project
Manager for Natural Gas Pipeline Company of America, a subsidiary of MidCon
Corp., which is a division of Occidental Petroleum Corporation. Mr. Padgett is a
Certified Public Accountant and has an MBA from the University of Chicago.

ADVISORY COMMITTEE

The partnership agreement of FVP provides for the establishment of an Advisory
Committee to consult with and advise FVP GP, the general partner of FVP, with
respect to FVP's business and overall strategy. The Advisory Committee has broad
authority to review and approve or disapprove matters relating to all material
aspects of FVP's business. The approval of seventy-five percent (75%) of the
members of the Advisory Committee that are entitled to vote on the matter is
required in order for the Company to effect any cable television system
acquisition. The Advisory Committee consists of four representatives of the
Attributable Class A Limited Partners of FVP and one representative of FVP GP.
Subject to certain conditions, each of the four Attributable Class A Limited
Partners of FVP listed in "Principal Security Holders" is entitled to designate
(directly or indirectly) one of the four Attributable Class A Limited Partner
representatives on the Advisory Committee. The designees of J.P. Morgan
Investment Corporation, 1818 II Cable Corp. (whose designee is selected by two
affiliated individuals specified in the FVP Partnership Agreement), Olympus
Cable Corp. and First Union Capital Partners Inc. are John W. Watkins, Richard
H. Witmer, Jr., James A. Conroy and L. Watts Hamrick, III, respectively. FVP
GP's designee is Mr. Vaughn.

EXECUTIVE COMPENSATION

The following table summarizes the compensation paid to FrontierVision Inc.'s
Chief Executive Officer and to each of its other most highly compensated
officers receiving compensation in excess of $100,000 for services rendered
during the fiscal year ended December 31, 1995.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
----------------------------
ANNUAL COMPENSATION
NAME AND ----------------------------
PRINCIPAL POSITION YEAR SALARY BONUS(1)
- ----------------------------------------------------------------- ---- -------- --------
<S> <C> <C> <C>
James C. Vaughn 1995 $169,635 $110,000
President and Chief Executive Officer
John S. Koo 1995 93,416 90,000
Senior Vice President, Chief Financial Officer and Secretary
</TABLE>

- ---------------
(1) Bonus paid for the employment contract year ending April 16, 1996. Mr.
Vaughn and Mr. Koo deferred $35,000 and $50,000, respectively, of the bonus to
the Deferred Compensation Plan described below.

401(k) PLAN

The Company established the FrontierVision Operating Partners 401(k) Plan (the
"401(k) Plan") effective January 1, 1996. In general, all employees of the
Company, except certain employees covered by a collective bargaining agreement,
may participate in the 401(k) Plan immediately upon employment with the Company.
Employees who participate in the 401(k) Plan may elect to defer and have
contributed to the 401(k) Plan an amount up to 15% of

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<PAGE> 63

such employees' eligible compensation, on a pre-tax basis. The Company makes a
matching contribution to a participating employee's account under the 401(k)
Plan in an amount equal to 100% of the amount of eligible compensation deferred
and contributed to the employee's account, up to a maximum of 3% of such
employee's eligible compensation. The Company in its discretion may also make an
additional company contribution for any year. The Company's matching
contribution and any additional contribution to the 401(k) Plan are subject to a
five-year vesting schedule, based upon each participating employee's years of
employment with the Company. Such contributions vest at the rate of 20% per year
of service, so that an employee's account will be fully (100%) vested after five
years of service.

DEFERRED COMPENSATION PLAN

FVP established the FrontierVision Partners, L.P. Executive Deferred
Compensation Plan (the "Deferred Compensation Plan") effective January 1, 1996
to allow key employees the opportunity to defer the payment of compensation to a
later date and to participate in any appreciation of FVP's business. The
Deferred Compensation Plan is administered by FVP's Advisory Committee.
Participation in the Deferred Compensation Plan is limited to James C. Vaughn,
John S. Koo and other key executives of FVP or its affiliates approved by the
Compensation Committee of the Advisory Committee (the "Compensation Committee").

Under the Deferred Compensation Plan, eligible employees may elect to defer the
payment of a portion of their compensation each year up to an amount determined
by the Compensation Committee. Any amount deferred is credited to a bookkeeping
account, which is credited with interest at the rate of 12% per annum. Each
participant's account also has a phantom equity component through which the
account will be credited with earnings in excess of 12% per annum to the extent
the Net Equity Value of FVP appreciates in excess of 12% per annum during the
term of the deferral. Net Equity Value of FVP is determined by multiplying each
cable television system's EBITDA for the most recent fiscal quarter by the
weighted average multiple of EBITDA paid by FVP to acquire each cable television
system; provided that if substantially all of the assets or partnership
interests of FVP are sold, Net Equity Value shall be based upon such actual sale
price adjusted to reflect any prior distributions to the partners and any
payments during the term of the deferral to the holders of certain subordinated
notes issued to the limited partners of FVP. Accounts shall be paid following
(i) the sale of all of FVP's partnership interests or upon liquidation of FVP,
other than sales or liquidations which are part of a reorganization, or (ii) the
death or disability of the participant prior to termination of employment with
FVP. The Compensation Committee may agree to pay the account in the event the
participant incurs a severe financial hardship or if the participant agrees to
an earlier payment. There are four employees currently participating in the
Deferred Compensation Plan, including Messrs. Vaughn and Koo.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

A Compensation Committee of the Advisory Committee of FVP, consisting of Messrs.
Watkins and Witmer, as representatives of J.P. Morgan Investment Corporation and
1818 II Cable Corp., respectively, sets the compensation of the executive
officers of the Company. See "Certain Relationships and Related Transactions."

EMPLOYMENT AGREEMENT

James C. Vaughn has entered into an employment agreement with FVP, dated as of
April 17, 1995 (the "Employment Agreement"). The agreement provides that Mr.
Vaughn will be employed as President and Chief Executive Officer of FVP. The
agreement establishes a base salary to be paid to Mr. Vaughn each year which is
subject to annual adjustment to reflect increases in the Consumer Price Index
for All Urban Consumers, as published by the Bureau of Labor Statistics of the
United States Department of Labor (or, in the event of the discontinuance
thereof, another appropriate index selected by FVP, with the approval of the
Advisory Committee). Mr. Vaughn's base salary may from time to time be increased
if FVP shall deem it advisable to do so. For 1995, Mr. Vaughn's base salary was
$275,000. In addition, he is entitled to annual bonuses up to $75,000, subject
to the attainment of certain performance objectives set forth in the Employment
Agreement. Pursuant to the Employment Agreement, for 1995, Mr. Vaughn received a
$75,000 bonus. If FVP terminates Mr. Vaughn's employment without "cause" (as
defined in the Employment Agreement), then Mr. Vaughn is entitled to receive a
severance payment equal to 25% of his then base salary. Mr. Vaughn has agreed
not to compete with FVP for the term of his employment with FVP and for an
additional period of two years thereafter and to keep certain information in
connection with FVP confidential.

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<PAGE> 64

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company's sole general partner (owning 99.9% of the partnership interests
therein) is FVP. The Company's sole limited partner (owning 0.1% of the
partnership interests therein) is FrontierVision Operating Partners, Inc., which
is a wholly owned subsidiary of FVP. FVP's sole general partner (owning 1% of
the partnership interests therein) is FVP GP. FVP's limited partners (owning 99%
of the partnership interests therein) consist of J.P. Morgan Investment
Corporation, an affiliate of J.P. Morgan Securities Inc., First Union Capital
Partners, Inc., an affiliate of First Union Capital Markets Corp., and various
institutional investors and accredited investors. FVP GP's sole general partner
(owning 1% of the partnership interests therein) is FrontierVision Inc., which
is owned by James C. Vaughn and John S. Koo. FVP GP's limited partners (owning
99% of the partnership interests therein) consist of J.P. Morgan Investment
Corporation, First Union Capital Partners, Inc., various institutional
investors, James C. Vaughn and John S. Koo. See "Principal Security Holders."

As of June 30, 1996, J.P. Morgan Investment Corporation and First Union Capital
Partners, Inc. have committed approximately $25,339,224 and $15,203,534,
respectively, to FVP. As of June 30, 1996, FrontierVision Inc. has committed
approximately $12,335 to FVP, representing commitments of approximately $8,224
and $4,112 by James C. Vaughn and John S. Koo, respectively, who are directors
of FrontierVision Inc. Such capital commitments are contributed as equity to
FVOP in connection with the closing of acquisitions by FVOP. As of June 30,
1996, J.P. Morgan Investment Corporation and First Union Capital Partners, Inc.
have paid $22,966,588 and $13,779,953 of such commitments, respectively, to fund
the closing of acquisitions by FVOP, for escrow deposits for acquisitions by
FVOP under contract and for FVOP working capital requirements. In addition,
concurrently with or prior to the completion of the Offering, FVP will
consummate the Rights Offering, pursuant to which it is anticipated that J.P.
Morgan Investment Corporation and First Union Capital Partners, Inc. will
acquire additional partnership interests in FVP.

J.P. Morgan Investment Corporation and First Union Capital Partners, Inc. are
"Special Class A" limited partners of FVP. Upon the termination of FVP and in
connection with distributions to its partners in respect of their partnership
interests, J.P. Morgan Investment Corporation, First Union Capital Partners,
Inc. and FVP GP will be entitled to receive "carried interest" distributions or
will be allocated a portion of 15% of any remaining capital to be distributed by
FVP after certain other distributions are made. See "The Partnership
Agreements." J.P. Morgan Securities Inc. acted as placement agent for the
initial offering of limited partnership interests of FVP (other than with
respect to the investment made by J.P. Morgan Investment Corporation) and the
placement of debt securities of FVP and in connection with those activities
received customary fees and reimbursement of expenses.

Morgan Guaranty Trust Company of New York, an affiliate of J.P. Morgan
Securities Inc., The Chase Manhattan Bank, an affiliate of Chase Securities
Inc., and CIBC Inc., an affiliate of CIBC Wood Gundy Securities Corp., are
agents and lenders under the Senior Credit Facility and have received customary
fees for acting in such capacities.

In addition, the Underwriters will receive the compensation described under the
caption "Underwriting" in connection with the Offering. There are no other
arrangements between the Underwriters and their affiliates and the Company or
any of its affiliates pursuant to which the Underwriters or their affiliates
will receive any additional compensation from the Company or any of its
affiliates.

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PRINCIPAL SECURITY HOLDERS

The following table sets forth, as of June 30, 1996, (i) the units of general
partnership interest and limited partnership interest of the Company
beneficially owned by the directors and executive officers of FrontierVision
Inc. and each person who is known to the Company to own beneficially more than
5.0% of any class of the Company's partnership interests and (ii) the units of
the equity securities of FrontierVision Inc., FVP GP, FVP and the Company owned
by each director or executive officer of FrontierVision Inc. named in the
Summary Compensation Table and by all executive officers of the Company as a
group. For a more detailed discussion of the ownership of the Company, see
"Certain Relationships and Related Transactions."

<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL
OWNERS TYPE OF INTEREST % OF CLASS
- ----------------------------------- ----------------------------------------- ----------
<S> <C> <C>
FrontierVision Partners, L.P.(1) General Partner Interest in the Company 99.90%
1777 South Harrison Street, Suite
P-200
Denver, Colorado 80210
FVP GP, L.P.(1) General Partner Interest in FVP 1.00%
1777 South Harrison Street, Suite
P-200
Denver, Colorado 80210
J.P. Morgan Investment Corporation Limited Partnership Interest in FVP 20.47%
101 California Street, Suite 3800 (Attributable Class A Limited Partner)
San Francisco, CA 94111 Limited Partnership Interest in FVP GP 13.62%
1818 II Cable Corp. Limited Partnership Interest in FVP 20.18%
c/o Brown Brothers Harriman & Co. (Attributable Class A Limited Partner)
59 Wall Street Limited Partnership Interest in FVP GP 13.62%
New York, NY 10005
Olympus Cable Corp. Limited Partnership Interest in FVP 20.18%
Metro Center--One Station Place (Attributable Class A Limited Partner)
Stamford, CT 06920 Limited Partnership Interest in FVP GP 13.62%
First Union Capital Partners, Inc. Limited Partnership Interest in FVP 12.28%
One First Union Center, 18th Floor (Attributable Class A Limited Partner)
Charlotte, NC 28288 Limited Partnership Interest in FVP GP 8.17%
James C. Vaughn Stockholder of FrontierVision Inc. 66.67%
1777 South Harrison Street, Suite Limited Partnership Interest in FVP GP 39.20%
P-200
Denver, Colorado 80210
John S. Koo Stockholder of FrontierVision Inc. 33.33%
1777 South Harrison Street, Suite Limited Partnership Interest in FVP GP 11.76%
P-200
Denver, Colorado 80210
All other executive officers and
directors as a group 0.00%
</TABLE>

- ---------------
(1) FVOP's sole general partner (owning 99.9% of the partnership interests
therein) is FVP, a Delaware limited partnership, and FVOP's sole limited partner
(owning 0.1% of the partnership interests therein) is FrontierVision Operating
Partners, Inc., a Delaware corporation which is a wholly owned subsidiary of
FVP. FVP's sole general partner (owning 1% of the partnership interests therein)
is FVP GP, a Delaware limited partnership, and FVP's limited partners (owning
99% of the partnership interests therein) are various institutional investors
and accredited investors. FVP GP's sole general partner (owning 1% of the
partnership interests therein) is FrontierVision Inc., which is owned by James
C. Vaughn and John S. Koo, and FVP GP's limited partners (owning 99% of the
partnership interests therein) consist of various institutional investors, James
C. Vaughn and John S. Koo. See "The Partnership Agreements--FVP Partnership
Agreement."

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<PAGE> 66

OWNERSHIP STRUCTURE

The following chart illustrates the ownership structure of the Company.

FLOWCHART

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<PAGE> 67

THE PARTNERSHIP AGREEMENTS

The following is a summary of certain material terms of the Agreement of Limited
Partnership of FVOP, as amended (the "Company Partnership Agreement"), the First
Amended and Restated Agreement of Limited Partnership of FVP, as amended (the
"FVP Partnership Agreement") and the First Amended and Restated Agreement of
Limited Partnership of FVP GP, as amended (the "FVP GP Partnership Agreement"
and together with the Company Partnership Agreement and FVP Partnership
Agreement, the "Partnership Agreements"). This summary reflects certain
amendments to certain of the Partnership Agreements which will be made at or
prior to the closing of the Offering. The statements under this caption are
summaries and do not purport to be complete, and where reference is made to
particular provisions of the Partnership Agreements, such provisions, including
the definitions of certain terms, are incorporated by reference as a part of
such summaries or terms, which are qualified in their entirety by such
reference. Complete copies of the form of Partnership Agreements have been filed
as exhibits to the Registration Statement of which this Prospectus is a part and
are available in the manner described in "Additional Information." All
capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the respective Partnership Agreement.

THE COMPANY PARTNERSHIP AGREEMENT

Organization and Duration. The Company was formed as a limited partnership
pursuant to the provisions of the Delaware Revised Uniform Limited Partnership
Act, as amended (the "Delaware Act"), and a certificate of limited partnership
of the Company was filed with the Secretary of State of Delaware on July 14,
1995. The purpose of the Company, as set forth in the Company Partnership
Agreement, is to conduct and promote the business of acquiring, investing in,
disposing of, operating, managing and financing cable systems and to engage in
all activities necessary, desirable or incidental for such purpose.

The Company will be dissolved and its affairs shall be wound up upon the
earliest to occur of the following: (i) June 30, 2007; (ii) all of the partners
of the Company approve such action in writing; (iii) the Company sells or
otherwise disposes of its interest in all or substantially all of its property;
(iv) an event of withdrawal of the General Partner has occurred under the
Delaware Act; or (v) an entry of a decree of judicial dissolution has occurred
under the Delaware Act.

Control of Operations. The Company Partnership Agreement provides that the
powers of the General Partner include all powers, statutory and otherwise,
possessed by general partners under the laws of Delaware, including the right
and power to manage and control the business and affairs of the Company and to
delegate to one or more other persons such right and power. Upon the occurrence
and continuance of any Event of Default under and as defined in the Senior
Credit Facility, Chase Manhattan Bank, N.A. (the "Administrative Agent") shall
be entitled to be admitted (or to have a designee of its choice admitted) as a
new general partner of the Company (the "New General Partner"). On and after the
admission of the New General Partner to the Company, the New General Partner
shall have all powers, statutory and otherwise, possessed by general partners
under the laws of Delaware and shall have the authority to manage the business
and affairs of the Company and the General Partner shall have no further powers
or privileges with respect to the management of the Company.

Capital Contributions. Under the Company Partnership Agreement, the partners
have made certain capital contributions to the Company. Each partner of the
Company may, but is not required to, make additional capital contributions to
the Company. The Company Partnership Agreement provides that upon the admission
of any additional Limited Partners or Substituted Limited Partners to the
Company, the Company's Limited Partner shall withdraw from the Company and shall
be entitled to receive the return of its capital contribution, without interest
or deduction. In the event of the admission of the New General Partner to the
Company, no capital contribution by the New General Partner shall be required.
Following the admission of the New General Partner to the Company, if requested
by the Administrative Agent, the partnership interest held by the General
Partner shall be converted into a limited partnership interest and in that
connection, the New General Partner may make such additional capital
contributions and alter the allocation of the Company profits and losses among
the partners in such manner as it determines to be appropriate to preserve the
status of the Company as a partnership for federal income tax purposes.

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<PAGE> 68

Withdrawal or Removal of Partners. In general, no right is given to any partner
of the Company to withdraw from the Company. The General Partner may admit (i)
additional Limited Partners, (ii) an assignee of the Limited Partner's
partnership interest in the Company as a Substituted Limited Partner of the
Company and (iii) one or more additional general partners to the Company. In
addition, upon the occurrence and continuance of any Event of Default under and
as defined in the Senior Credit Facility, the Administrative Agent shall be
entitled to be admitted (or to have a designee of its choice admitted) as a New
General Partner.

Assignment of Partnership Interests. Under the Company Partnership Agreement,
the Limited Partner may assign all or any part of its partnership interest in
the Company only with the consent of the General Partner. The Limited Partner
has no right to grant an assignee of its partnership interest in the Company the
right to become a Substituted Limited Partner of the Company. Following the
admission of the New General Partner to the Company, neither the General Partner
nor the Limited Partner may transfer its partnership interest in the Company
without the prior written consent of the New General Partner.

Class A Partnership Interests. Concurrently with or prior to the consummation
of the Offering, it is anticipated that UVC will convert $5.0 million aggregate
principal amount of the UVC Note into limited partnership interests of the
Company represented by the Class A Partnership Interests and the balance of the
UVC Note will be repaid. Such conversion and repayment of the UVC Note are both
included as part of the Transactions. The Class A Partnership Interests will be
redeemable in whole or in part, at the option of the Company at any time, at a
redemption price equal to 100% of the aggregate capital contribution represented
thereby plus a return on the undistributed portion thereof at a rate of 17% per
annum, compounded annually (the "Liquidation Value"). The Class A Partnership
Interests also will be redeemable in full at their Liquidation Value upon
consummation of the sale of all or substantially all of the Company's assets
following repayment of all of the Company's indebtedness. In addition, the Class
A Partnership Interests will be redeemable in full at their Liquidation Value,
at the option of the holders thereof (within six months of notice to the
Company) following the earlier to occur of (i) the twelfth anniversary of the
issue date of such Interests or (ii) the fifth anniversary of the issue date if,
as of such date, the Company has no unmatured indebtedness for borrowed money
outstanding (which indebtedness was part of a major senior or subordinated debt
financing).

FVP PARTNERSHIP AGREEMENT

Organization and Duration. FVP was formed as a limited partnership pursuant to
the provisions of the Delaware Act, and a certificate of limited partnership of
FVP was filed with the Secretary of State of Delaware on April 17, 1995. The
principal purpose of FVP, as set forth in the FVP Partnership Agreement, is to
(i) acquire, invest in, own, finance, operate, improve, develop, maintain,
promote, sell, dispose of and otherwise exploit cable television systems and
properties and interests therein, (ii) conduct related business activities,
including telephony and other communications businesses and activities that are
related to FVP's cable television businesses and activities, directly or
indirectly through other entities, alone or with others, and (iii) do any and
all acts necessary, desirable or incidental to the accomplishment of such
purpose.

FVP will be dissolved and its affairs wound up upon the earliest to occur of the
following: (i) June 30, 2007; (ii) the Incapacity, withdrawal, removal or other
event of withdrawal (as defined in the Delaware Act) of a General Partner; (iii)
on or after the time when all of the Capital Commitments and Loan Amounts have
been paid, upon the sale or other disposition by FVP of all or substantially all
of the Investments it then owns; or (iv) the entry of a decree of judicial
dissolution under the Delaware Act. In the case of dissolution described in
clause (ii), if at such time there is at least one remaining General Partner,
the remaining General Partner(s) may unanimously elect to carry on the business
of FVP. In addition, within 90 days thereafter, Class A Limited Partners
representing at least a majority in Interest of the remaining partners (based on
their profits interests and capital interests), or such greater percentage in
Interest as may be required under the Delaware Act, may agree to continue the
business of FVP and to the appointment of one or more additional general
partners to be effective as of the date of such event.

Control of Operations. The FVP Partnership Agreement provides that the General
Partner has the full, exclusive and complete right, power and discretion to
operate, manage and control the affairs and business of FVP and to make all
decisions affecting FVP's affairs and business, subject to the terms and
provisions of the FVP Partnership Agreement. Among, but not limited to, the
limitations on its power, the General Partner does not have

66
<PAGE> 69

the right: (i) to possess any FVP property or assign rights to such property for
other than a partnership purpose; (ii) to perform any act or employ any assets
of FVP in contravention of the FVP Partnership Agreement; (iii) to take any
action which requires approval of the Advisory Committee, unless such action
shall first have been so approved; (iv) to permit FVP to take any action or
operate in any manner as would cause FVP to be classified as an "investment
company" for purposes of the Investment Company Act of 1940, as amended, or as
would cause all or any portion of the assets of FVP to constitute "plan assets"
for federal income tax purposes; (v) to admit a person as a Partner except as
otherwise provided in the FVP Partnership Agreement; (vi) to transfer its
Interest as General Partner, or (vii) to amend the FVP Partnership Agreement,
except as provided by the FVP Partnership Agreement.

Advisory Committee. The FVP Partnership Agreement provides for the
establishment of an Advisory Committee to consult with and advise the General
Partner with respect to FVP's business and overall strategy. Under the FVP
Partnership Agreement, the Advisory Committee has broad authority to review and
approve or disapprove matters relating to all material aspects of FVP's
business, including, but not limited to, determinations with respect to (i) the
acquisition by FVP of any Investment (including any cable television system
acquisition), (ii) the sale, exchange or other disposition by FVP of
Investments, (iii) financing or refinancing of FVP or any Operating Entity, (iv)
borrowings, loans or guarantees by FVP or any Operating Entity relating to
indebtedness for borrowed money, (v) capital calls under the FVP Partnership
Agreement, (vi) the admission of additional partners to FVP or additional
partners to the General Partner and their obligations and liabilities thereto,
(vii) the issuance of additional Interests in the General Partner and the
amendment of the allocation provisions of the FVP GP Partnership Agreement,
(viii) the issuance of additional shares or transfer of capital stock of
FrontierVision Inc. or the merger or consolidation of FrontierVision Inc., (ix)
the creation and issuance of additional classes or series of Limited Partnership
Interests and (x) the termination of the Vaughn Employment Agreement. Upon
termination of the Vaughn Employment Agreement, the General Partner may be
removed from FVP. In addition, the failure of the General Partner to follow any
such direction of the Advisory Committee in connection with such determinations
shall constitute a material breach of the FVP Partnership Agreement whereby the
General Partner may be removed from FVP. As provided in the FVP Partnership
Agreement, the approval of seventy-five percent (75%) of the members of the
Advisory Committee that are entitled to vote on the matter is required in order
for the Company to effect any cable television system acquisition. The Advisory
Committee consists of four representatives of the Attributable Class A Limited
Partners of FVP and one representative of the General Partner. Subject to
certain conditions, each of the four Attributable Class A Limited Partners
listed in "Principal Security Holders" is entitled to designate (directly or
indirectly) one of the four Attributable Class A Limited Partner representatives
on the Advisory Committee.

Voting Rights. Except as to matters for which consent or approval is expressly
required under the FVP Partnership Agreement, the Limited Partners of FVP have
no right to vote on any partnership matters. Where consent of a majority or
specified percentage in Interest of the Limited Partners of FVP or of a class or
classes of Limited Partners is required, such consent will be determined by
reference to the aggregate Capital Commitments of the Limited Partners entitled
to approve the act or thing for which approval is sought in accordance with the
terms of the FVP Partnership Agreement.

Amendments and Modifications. In general, the FVP Partnership Agreement is
subject to modification or amendment only with the written consent of the
General Partner and a majority in Interest of the Class A and Class B Limited
Partners of FVP; provided, however, the FVP Partnership Agreement may be amended
from time to time by the General Partner without the consent of any of the
Limited Partners to (i) add to the representations, duties or obligations of the
General Partner or surrender any right or power granted to the General Partner
by the FVP Partnership Agreement, (ii) admit one or more additional Limited
Partners or Substituted Limited Partners, or withdraw one or more Limited
Partners in accordance with the FVP Partnership Agreement, (iii) provide any
necessary information regarding any Partner, (iv) adjust certain allocations of
net profit and loss with the approval of the Advisory Committee and (v) reflect
any change in the amount of the Capital Commitments of any Partner in accordance
with the terms of the FVP Partnership Agreement; provided, however, such
amendment shall not be adopted if, in the opinion of counsel for FVP, such
amendment alters, or results in the alteration of, the limited liability of the
Limited Partners or the status of FVP as a partnership for federal income tax
purposes.

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Notwithstanding the foregoing, no amendment to the FVP Partnership Agreement may
add to, detract from or otherwise modify the purposes of FVP. In addition,
amendments with respect to certain liabilities or responsibilities of certain
Limited Partners require the consent of certain Limited Partners.

Capitalization and Certain Distributions. In connection with its initial
formation, FVP issued to its Limited Partners units consisting of limited
partnership interests in FVP, 12% Senior Subordinated Notes due 2004 and 14%
Junior Subordinated Notes due 2004. Pursuant to such transaction, and under the
FVP Partnership Agreement, each General Partner and Limited Partner of FVP has
made certain capital contributions and loans to FVP. The General Partner is
required under the FVP Partnership Agreement to make such Capital Commitments to
FVP as are necessary to maintain at all times a Capital Commitment equal to not
less than one percent (1%) of the total Capital Commitments of all Partners. The
Limited Partners are not required to make additional capital contributions to
FVP in excess of their respective Capital Commitments. Except for provisions
allowing for the return of capital to Partners upon dissolution of FVP, the FVP
Partnership Agreement provides that no Partner of FVP shall have the right to
withdraw or demand return of its capital contribution.

The FVP Partnership Agreement provides that certain "Special" Limited Partners,
in consideration of significant Capital Commitments to FVP during its initial
formation, and the General Partner are entitled to receive a portion of 15% of
any remaining distributions to be distributed by FVP after certain distributions
are made to the Class A Limited Partners and Class B Limited Partners and the
General Partner in accordance with the FVP Partnership Agreement. The Special
Class A Limited Partners and the Special Class B Limited Partners will be
allocated 8% (in the aggregate) of such remaining capital, in proportion to the
amount of their respective Capital Commitments. The General Partner will be
allocated 7% (in the aggregate) of such remaining capital; provided, however,
that such percentage shall be subject to adjustment by the General Partner, with
the approval of the Advisory Committee, under certain circumstances pursuant to
the terms of the FVP Partnership Agreement.

Admission of Additional Partners. The General Partner is authorized, subject to
certain conditions and the approval of the Advisory Committee, to cause FVP to
(i) admit additional Limited Partners to the partnership, (ii) permit any
existing Limited Partner to increase its Capital Commitment or (iii) create and
issue such additional classes or series of Limited Partnership Interests having
such designations, preferences and relative, participating or other special
rights, powers and duties as the General Partner, with the approval of the
Advisory Committee, shall determine.

Preemptive Rights. The FVP Partnership Agreement provides that, except under
certain circumstances, the General Partner, without the consent of a majority in
Interest of the Class A Limited Partners, shall not be able to (i) issue, sell
or grant (x) Limited Partnership Interests in FVP, (y) warrants, options, or
other rights to purchase Limited Partnership Interests in FVP or (z) securities
convertible or exchangeable for Limited Partnership Interests in FVP or (ii)
permit any Limited Partner to increase its Capital Commitment to FVP until the
Capital Commitments of all of the Class A Limited Partners and Class B Limited
Partners have been fully drawn upon or expired. Except under certain
circumstances, after the Capital Commitments of all of the Class A Limited
Partners and Class B Limited Partners have been fully drawn upon or have
expired, if FVP proposes to admit additional Limited Partners to the partnership
or permit any Limited Partner to increase its Capital Commitment to the
partnership pursuant to the FVP Partnership Agreement, the General Partner must
give notice to each Limited Partner of such proposed action. Thereafter, each
Limited Partner will have the right to acquire its pro rata share of any such
additional Limited Partnership Interests or increase its Capital Commitment
subject to the provisions of the FVP Partnership Agreement.

Rights of First Refusal; Tag-Along Rights. The FVP Partnership Agreement
provides that in the event of a proposed transfer of a Limited Partnership
Interest or Note by a Limited Partner (to the extent permitted under the FVP
Partnership Agreement), such Limited Partner must provide 45 days' written
notice to the General Partner and to all of the Class A Limited Partners and
Class B Limited Partners of such proposed transfer and the proposed cash
purchase price. During the first 30 days of such period, the General Partner and
each of the Class A Limited Partners and Class B Limited Partners (other than
any Defaulting Partner) will have the right to propose to acquire such Interest
or Note, or some portion thereof, for the proposed cash purchase price. If the
Partners as a group propose to acquire more than the Interest or Note, then each
such Partner shall have the right to propose to acquire its pro rata portion of
the Interest or Note; provided, however, that the Limited Partner that proposes
such transfer

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<PAGE> 71

shall not be obligated to sell any portion of the Interest or Note to any
Partner unless the Partners have collectively proposed to purchase all of the
Interest or Note.

In the case of a proposed transfer in a single transaction or a series of
related transactions of fifty percent (50%) or more of the outstanding Limited
Partnership Interests, if the Partners do not exercise their rights of first
refusal, then, as a further condition to the transfer by a Limited Partner, such
Limited Partner shall obtain for each other Class A Limited Partner and Class B
Limited Partner the right to sell the same proportion of its Limited Partnership
Interests as that being sold by the selling Limited Partner at the same purchase
price, subject to certain adjustments.

Liability of General Partner. In general, under the FVP Partnership Agreement,
FVP will indemnify and hold harmless, out of its assets, the General Partner,
its partners and their respective officers, directors, employees, agents or
stockholders (including when any of the foregoing is serving at the request of
the General Partner on behalf of FVP as a partner, officer, director, employee
or agent of any other Person) against losses, damages, expenses (including
reasonable attorneys' fees), judgments and settlement amounts incurred by such
party by reason of actions or omissions in connection with activities performed
on behalf of FVP and not constituting fraud, breach of fiduciary duty, willful
misconduct or gross negligence. In the event that the General Partner of FVP
ceases to be a General Partner, it shall remain liable for obligations and
liabilities incurred on account of its activities as General Partner prior to
the time it ceased to be a General Partner, but shall be free of any obligation
or liability as a General Partner incurred on account of the activities of FVP
from and after the time it ceased to be a General Partner.

Withdrawal or Removal of Partners. The General Partner may not voluntarily
dissolve, retire or withdraw as a General Partner of FVP. In addition, the
General Partner may not directly or indirectly assign, sell, exchange, transfer,
pledge, hypothecate or otherwise dispose of all or any fraction of its Interest
as a General Partner of FVP. Subject to certain procedures, the General Partner
may be removed at any time after the occurrence of a Vaughn Expiration Date (as
defined below) or for "cause," in each case with the consent of a majority in
Interest of the Attributable Class A Limited Partners with the approval of the
Advisory Committee. In addition, in the event that FVP shall or would suffer an
FCC Regulatory Issue due to a GP Principal or any of its Affiliates, at the
request of the Advisory Committee, the General Partner shall cause the GP
Principal to divest all direct and indirect Interests in FVP.

Under the FVP Partnership Agreement, "cause" is defined as one or more of the
following: (i) any action by the General Partner or GP Principal which
constitutes dishonesty, a violation of law or a fraud against FVP; (ii) the
indictment of the General Partner or GP Principal for a felony; (iii) willful
misconduct, drunkenness or abuse of any controlled substance by the General
Partner or any GP Principal; (iv) any material violation by the General Partner
or any GP Principal of its fiduciary obligations to FVP or the Partners; (v) any
material breach by the General Partner or any GP Principal of the FVP
Partnership Agreement or any material breach by FrontierVision Inc. or any GP
Principal of the General Partner Partnership Agreement or (vi) in the event that
FVP shall or would suffer an FCC Regulatory Issue due to the General Partner,
any GP Principal or any of their Affiliates, unless such FCC Regulatory Issue is
cured within 15 days after the General Partner becomes aware thereof. Under the
FVP Partnership Agreement, "Vaughn Expiration Date" means the earliest of the
following dates: (i) the date on which Mr. Vaughn is neither a General Partner
nor a GP Principal; (ii) the date on which the Vaughn Employment Agreement is
terminated pursuant to its terms, and (iii) the date on which Mr. Vaughn ceases
to own beneficially for his own account, directly or indirectly, at least one of
the following: (x) at least two-thirds of the General Partner's share of
distributions under the FVP Partnership Agreement or (y) at least two-thirds of
the Interests of the General Partner that correlate to the General Partner's
share of distributions pursuant to the FVP Partnership Agreement.

Upon the removal of the General Partner, at the election of a majority in
Interest of the Attributable Class A Limited Partners with the approval of the
Advisory Committee, FVP shall redeem the Interest of the removed General Partner
for a price equal to the fair market value thereof as determined pursuant to the
FVP Partnership Agreement. In the absence of such election and approval, the
General Partner's Interest in FVP shall be converted to a nonvoting,
nonconvertible Limited Partnership Interest. Upon the removal of the General
Partner, a majority in Interest of the Attributable Class A Limited Partners
with the approval of the Advisory Committee shall have the power to appoint a
new General Partner.

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Mandatory Transfers. In the event of the Incapacity of a Limited Partner, to
the fullest extent permitted by law, the General Partner may require the
transfer of the Interest in and/or certain debt securities of FVP held by such
Limited Partner. The General Partner shall provide at least 60 days' notice of
such transfer. "Incapacity" is defined by the FVP Partnership Agreement to mean,
as to any person, (i) the adjudication of incompetence or insanity of such
person, or the Bankruptcy of such person, or (ii) the death, dissolution or
termination (other than by merger or consolidation), as the case may be, of such
person. In addition, the General Partner, with the approval of the Advisory
Committee, shall also have the right to cause any Defaulting Partner to transfer
its Limited Partnership Interest in accordance with the FVP Partnership
Agreement.

Under certain circumstances where FVP would suffer an FCC Regulatory Issue due
to a Limited Partner or an Attributable Person through such Limited Partner,
such Limited Partner may be required to use all commercially reasonable efforts
to sell such portion of its Limited Partnership Interests as may be necessary to
cure such FCC Regulatory Issue. If such Limited Partner is unable to sell its
Limited Partnership Interest within 180 days of the date that the General
Partner requests that such Interest be sold (or within the time established by
the FCC), then for a specified period, the General Partner, with the approval of
the Advisory Committee, may elect on behalf of FVP to make Buyout Payments to
such Limited Partner in accordance with the FVP Partnership Agreement. The
economic interest of such Limited Partner shall be deemed to have been converted
into debt and such Limited Partner shall immediately cease to be a Partner.

Liability of Limited Partners. Limited Partners of FVP do not have any personal
liability for the repayment or discharge of the debts and obligations of FVP;
provided, however, that each Limited Partner shall be liable to FVP for its
Unused Capital Commitment and Loan Amount in accordance with the terms of the
FVP Partnership Agreement.

Assignment of Partnership Interests. Under the FVP Partnership Agreement, the
General Partner may not directly or indirectly assign, sell, exchange, transfer,
pledge, hypothecate or otherwise dispose of all or any fraction of its Interest
as a General Partner of FVP.

A Limited Partner may transfer all or any fraction of such Limited Partner's
Limited Partnership Interest (subject in certain cases to the rights of first
refusal discussed above and more fully set forth in the FVP Partnership
Agreement) to another person only if such transfer meets the conditions set
forth in the FVP Partnership Agreement.

FVP GP PARTNERSHIP AGREEMENT

Organization and Duration. FVP GP was formed as a limited partnership pursuant
to the provisions of the Delaware Act and a certificate of limited partnership
of FVP GP was filed with the Secretary of State of Delaware on April 17, 1995.
The purpose of FVP GP, as set forth in the FVP GP Partnership Agreement, is to
(i) serve as general partner of FVP and (ii) do all other lawful things
necessary, desirable or incidental to the accomplishment of such purposes.

FVP GP will be dissolved and its affairs wound up upon the earliest to occur of
the following: (i) June 30, 2007; (ii) the Incapacity, withdrawal, removal or
other event of withdrawal (as defined in the Delaware Act) of the General
Partner; or (iii) the entry of a decree of judicial dissolution under the Act.
In the case of dissolution described in clause (ii), if at such time there is at
least one remaining General Partner, the remaining General Partner(s) may
unanimously elect to carry on the business of FVP GP. In addition, within 90
days thereafter, Class X Limited Partners and Class Y Limited Partners
representing at least a majority in Interest of the remaining Partners (based on
their profits interests and capital interests), or such greater percentage in
Interest as may be required under the Delaware Act, may agree to continue the
business of FVP GP and to the appointment of one or more additional general
partners to be effective as of the date of such event.

Control of Operations. The FVP GP Partnership Agreement provides that the
General Partner has the full, exclusive and complete right, power and discretion
to operate, manage and control the affairs and business of FVP GP and to make
all decisions affecting FVP GP's affairs and business, subject to certain
customary exceptions specified in the FVP GP Partnership Agreement.

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<PAGE> 73

Voting Rights. Except as to matters for which consent or approval is expressly
required under the FVP GP Partnership Agreement, the Limited Partners of FVP GP
have no right to vote on any partnership matters. Where consent of a majority or
specified percentage in Interest of the Limited Partners of FVP GP or of a class
or classes of Limited Partners is required, such consent will be determined by
reference to the aggregate capital commitments of the Limited Partners entitled
to approve the act or thing for which approval is sought in accordance with the
terms of the FVP GP Partnership Agreement.

Amendments and Modifications. In general, the FVP GP Partnership Agreement is
subject to modification or amendment only with the written consent of the
General Partner and a majority in Interest of the Class X and Class Z Limited
Partners of FVP GP and a majority in Interest of the Class Y Limited Partners;
provided, however, the FVP GP Partnership Agreement may be amended from time to
time by the General Partner without the consent of any of the Limited Partners
to (i) add to the representations, duties or obligations of the General Partner
or surrender any right or power granted to the General Partner by the FVP GP
Partnership Agreement, (ii) admit one or more additional Limited Partners or
Substituted Limited Partners, or withdraw one or more Limited Partners in
accordance with the FVP GP Partnership Agreement, (iii) provide any necessary
information regarding any Partner, (iv) adjust certain allocations of net profit
and loss with the consent of a majority in Interest of the Class X Limited
Partners and (v) reflect any change in the amount of the Capital Commitments of
any Partner in accordance with the terms of the FVP GP Partnership Agreement;
provided, however, such amendment shall not be adopted if, in the opinion of
counsel for FVP GP, such amendment alters, or results in the alteration of, the
limited liability of the Limited Partners or the status of FVP GP as a
partnership for federal income tax purposes.

Notwithstanding the foregoing, no amendment to the FVP GP Partnership Agreement
may add to, detract from or otherwise modify the purposes of FVP GP. In
addition, amendments with respect to certain liabilities or responsibilities of
certain Limited Partners require the consent of certain Limited Partners.

Capital Contributions. Under the FVP GP Partnership Agreement, the Partners
have made certain capital contributions to FVP GP. The General Partner is
required under the FVP GP Partnership Agreement to make such Capital Commitments
to FVP GP as are necessary to maintain at all times a Capital Commitment equal
to not less than one percent (1%) of the total Capital Commitments of all
Partners. The Limited Partners are not required to make additional capital
contributions to FVP GP. Except for provisions allowing for the return of
capital to Partners upon dissolution of FVP GP, the FVP GP Partnership Agreement
provides that no Partner of FVP GP shall have the right to withdraw or demand
return of its capital contribution.

Rights of First Refusal. The FVP GP Partnership Agreement provides that in the
event of a proposed transfer of a Limited Partnership Interest by a Limited
Partner (to the extent permitted by the FVP GP Partnership Agreement), such
Limited Partner must provide 45 days' written notice to the General Partner and
to all of the Limited Partners of such proposed transfer and the proposed cash
purchase price. During the first 30 days of such period, the General Partner and
each of the Limited Partners (other than any Defaulting Partner) will have the
right to propose to acquire such Interest or some portion thereof for the
proposed cash purchase price. If the Partners as a group propose to acquire more
than the Interest, then each such Partner shall have the right to propose to
acquire its pro rata portion of the Interest; provided, however, that the
Limited Partner that proposes such transfer shall not be obligated to sell any
portion of the Interest to any Partner unless the Partners have collectively
proposed to purchase all of the Interest.

Liability of General Partner. In general, under the FVP GP Partnership
Agreement, FVP GP will indemnify and hold harmless, out of its assets, the
General Partner, its partners and their respective officers, directors,
employees, agents or stockholders (including when any of the foregoing is
serving at the request of the General Partner on behalf of FVP GP or FVP as a
partner, officer, director, employee or agent of any other Person) against
losses, damages, expenses (including reasonable attorneys' fees), judgments and
settlement amounts incurred by such party by reason of actions or omissions in
connection with activities performed on behalf of FVP GP and not constituting
fraud, breach of fiduciary duty, willful misconduct or gross negligence. In the
event that the General Partner of FVP GP ceases to be a General Partner, it
shall remain liable for obligations and liabilities incurred on account of its
activities as General Partner prior to the time it ceased to be a General
Partner, but shall be free of any obligation or liability as a General Partner
incurred on account of the activities of FVP GP from and after the time it
ceased to be a General Partner.

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Withdrawal or Removal of Partners. The General Partner may not voluntarily
dissolve, retire or withdraw as a General Partner of FVP GP. In addition, the
General Partner may not directly or indirectly assign, sell, exchange, transfer,
pledge, hypothecate or otherwise dispose of all or any fraction of its Interest
as a General Partner of FVP GP. Subject to certain procedures, the General
Partner may be removed at any time after the occurrence of a Vaughn Expiration
Date or for "cause," in each case by the consent of a majority in Interest of
the Attributable Class X and Class Y Limited Partners. In addition, in the event
that FVP GP shall or would suffer an FCC Regulatory Issue due to a GP Principal
or any of its Affiliates, the General Partner shall cause the GP Principal to
divest all direct or indirect Interests in FVP GP.

Under the FVP GP Partnership Agreement, "cause" is defined as under the FVP
Partnership Agreement. Under the FVP GP Partnership Agreement, "Vaughn
Expiration Date" means the earliest of the following dates: (i) the date on
which Mr. Vaughn is neither a General Partner nor a GP Principal, (ii) the date
on which the Vaughn Employment Agreement is terminated pursuant to its terms and
(iii) the date on which Mr. Vaughn ceases to own beneficially for his own
account, directly or indirectly, at least one of the following: (x) at least
two-thirds of the Special Distribution (as defined in the FVP GP Partnership
Agreement) or (y) at least two-thirds of the Interests in FVP GP that correlate
to the Special Distribution.

Upon the removal of the General Partner, at the election of a majority in
Interest of the Attributable Class X Limited Partners, FVP GP shall redeem the
Interest of the removed General Partner for a price equal to the fair market
value thereof as determined pursuant to the FVP GP Partnership Agreement. In the
absence of such election and approval, the General Partner's Interest in FVP
shall be converted to that of a nonvoting, nonconvertible Limited Partnership
Interest. Upon the removal of the General Partner, a majority in Interest of the
Attributable Class X Limited Partners shall have the power to appoint a new
General Partner.

Mandatory Transfers. In the event of the Incapacity of a Limited Partner, to
the fullest extent permitted by law, the General Partner may require the
transfer of the Interest of such Limited Partner. The General Partner shall
provide at least 60 days' notice of such transfer. "Incapacity" is defined by
the FVP GP Partnership Agreement to mean, as to any person, (i) the adjudication
of incompetence or insanity of such person, or the Bankruptcy of such person or
(ii) the death, dissolution or termination (other than by merger or
consolidation), as the case may be, of such person. In addition, the General
Partner shall also have the right to cause any Defaulting Partner (in the case
of a default by a Class X Limited Partner or Class Z Limited Partner) to
transfer its Limited Partnership Interest in accordance with the FVP GP
Partnership Agreement. A majority in Interest of the Class X Limited Partners
shall have the right to cause any Defaulting Partner (in the case of a default
by a Class Y Limited Partner) to transfer its Limited Partnership Interest in
accordance with the FVP GP Partnership Agreement.

Under certain circumstances where FVP GP would suffer an FCC Regulatory Issue
due to a Limited Partner or an Attributable Person through such Limited Partner,
such Limited Partner may be required to use all commercially reasonable efforts
to sell such portion of its Limited Partnership Interests as may be necessary to
cure such FCC Regulatory Issue. If such Limited Partner is unable to sell its
Limited Partnership Interest within 180 days of the date that the General
Partner requests that such Interest be sold (or within the time established by
the FCC), then for a specified period, the General Partner (with the consent of
a majority in Interest of the Class X Limited Partners if the Limited Partner is
a Class Y Limited Partner) may elect on behalf of FVP GP to make Buyout Payments
to such Limited Partner in accordance with the FVP GP Partnership Agreement. The
economic interest of such Limited Partner shall be deemed to have been converted
into debt and such Limited Partner shall immediately cease to be a partner.

Liability of Limited Partners. Limited Partners of FVP GP do not have any
personal liability for the repayment or discharge of the debts and obligations
of FVP GP; provided, however, that Limited Partners shall be liable to FVP GP
for their Unused Capital Commitments in accordance with the terms of the FVP GP
Partnership Agreement.

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Assignment of Partnership Interests. Under the FVP GP Partnership Agreement,
the General Partner may not directly or indirectly assign, sell, exchange,
transfer, pledge, hypothecate or otherwise dispose of all or any fraction of its
Interest as a General Partner of FVP GP.

A Limited Partner may transfer all or any fraction of such Limited Partner's
Limited Partnership Interest (subject in certain cases to the rights of first
refusal discussed above and more fully set forth in the FVP GP Partnership
Agreement) to another person only if such transfer meets the conditions set
forth in the FVP GP Partnership Agreement.

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CREDIT ARRANGEMENTS OF THE COMPANY

THE SENIOR CREDIT FACILITY

On April 9, 1996, the Company entered into the $265.0 million Amended and
Restated Credit Agreement with The Chase Manhattan Bank, as Administrative
Agent, J.P. Morgan Securities Inc., as Syndication Agent, CIBC Inc., as Managing
Agent, and the other lenders signatory thereto. The Company used these proceeds
to refinance an existing $130.0 million senior credit facility, to finance the
purchase of the Cox Systems and for general business purposes. As of June 30,
1996, borrowings under the Senior Credit Facility totaled approximately $210.0
million and are expected to be approximately $193.3 million after giving pro
forma effect to the Transactions.

The Senior Credit Facility includes a $75.0 million, 8.25-year reducing
revolving credit facility ("Revolving Credit Facility"), a $100.0 million,
8.25-year term loan ("Senior Term Loan") and a $90.0 million, 9.25-year term
loan ("Tranche B Loan"). The Company had outstanding borrowings of $20.0 million
as of June 30, 1996 under the Revolving Credit Facility bearing interest at
varying rates, based upon different borrowing options and financial ratios, and
maturing on June 30, 2004. The weighted average interest rate at June 30, 1996
on the outstanding borrowings under the Revolving Credit Facility was
approximately 8.19%. The Company has outstanding borrowings of $100.0 million
under the Senior Term Loan bearing interest at varying rates, based upon
different borrowing options and financial ratios, and maturing on June 30, 2004.
The weighted average interest rate at June 30, 1996 on the outstanding
borrowings under the Senior Term Loan was approximately 8.25%. The Company has
outstanding borrowings of $90.0 million under the Tranche B Loan bearing
interest at varying rates, based upon different borrowing options and financial
ratios, and maturing on June 30, 2005. The weighted average interest rate at
June 30, 1996 on the outstanding borrowings under the Tranche B Loan was
approximately 8.75%. The Company has entered into interest rate protection
agreements to hedge its underlying Treasury rate exposure for $110.0 million of
borrowings through November 1999.

In general, the Senior Credit Facility requires the Company to use the proceeds
from any equity or debt issuance or any cable system disposition to reduce
indebtedness for borrowings under the Senior Credit Facility and to reduce
permanently commitments thereunder unless the Company holds such proceeds in a
special account pending a permitted reinvestment in a subsequent acquisition of
cable systems. However, in the event of a continuing event of default under the
Senior Credit Facility, the lenders thereunder are not required to release such
proceeds from such account for use for reinvestment in subsequent acquisitions.

The Senior Credit Facility is secured by a pledge of all limited and general
partnership interests in the Company and in any subsidiaries of the Company and
a first priority lien on all the tangible and intangible assets of the Company
and each of its subsidiaries. In addition, in the event of the occurrence and
continuance of an event of default under the Senior Credit Facility, the
Administrative Agent is entitled to replace the general partner of the Company
with its designee. See "The Partnership Agreements--The Company Partnership
Agreement."

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DESCRIPTION OF THE NOTES

As used below in this "Description of the Notes" section, the "Company" means
FrontierVision Operating Partners, L.P., but not any of its subsidiaries, unless
otherwise specified. The Notes are to be issued under an Indenture, to be dated
as of , 1996 (the "Indenture"), among the Issuers and Colorado
National Bank, as Trustee (the "Trustee"). The Indenture is subject to and
governed by the Trust Indenture Act of 1939, as amended. The statements under
this caption relating to the Notes and the Indenture are summaries and do not
purport to be complete, and where reference is made to particular provisions of
the Indenture, such provisions, including the definitions of certain terms, are
incorporated by reference as a part of such summaries or terms, which are
qualified in their entirety by such reference. A copy of the proposed form of
Indenture has been filed with the Commission as an exhibit to the Registration
Statement of which this Prospectus is a part.

GENERAL

The Notes are joint and several obligations of the Company and Capital. The
Notes will be general unsecured senior subordinated obligations of the Issuers,
will be limited to $200 million aggregate principal amount and will rank
subordinate in right of payment to all existing and future Senior Indebtedness.
The Notes will rank pari passu in right of payment with all other senior
subordinated indebtedness of the Company. At June 30, 1996, as adjusted to give
effect to the Rights Offering, the borrowings under the Senior Credit Facility
and the transactions described herein under "Use of Proceeds" and the other
Transactions, the Company would have had approximately $193.3 million of Senior
Indebtedness outstanding (including $86,000 outstanding under capital leases and
excluding unused commitments of approximately $71.7 million under the Senior
Credit Facility). Secured creditors of the Company will have a claim on the
assets which secure such obligations prior to claims of the holders of the Notes
against those assets. Capital has nominal assets and does not conduct any
operations.

The Notes will mature on , 2006 and will bear interest at the rate per
annum shown on the front cover of this Prospectus from the date of issuance or
from the most recent interest payment date to which interest has been paid or
provided for. Interest will be payable semiannually on and
of each year, commencing , 1997, to the Person in whose name a Note is
registered at the close of business on the preceding or (each, a
"Record Date"), as the case may be. Interest on the Notes will be computed on
the basis of a 360-day year of twelve 30-day months. Holders must surrender the
Notes to the paying agent for the Notes to collect principal payments. The
Issuers will pay principal and interest by check and may mail interest checks to
a holder's registered address.

The Notes will be issued only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof. No service charge
will be made for any registration of transfer or exchange of Notes, but the
Issuers may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Initially, the Trustee will
act as paying agent and registrar for the Notes. The Notes may be presented for
registration of transfer and exchange at the offices of the registrar for the
Notes.

OPTIONAL REDEMPTION

The Notes are not redeemable prior to , 2001, except as set forth
below. The Notes will be subject to redemption, at the option of the Issuers, in
whole or in part, at any time on or after , 2001 and prior to
maturity, upon not less than 30 nor more than 60 days' notice mailed to each
holder of Notes to be redeemed at his address appearing in the register for the
Notes, in amounts of $1,000 or an integral multiple of $1,000, at the following
redemption prices (expressed as percentages of principal amount) plus accrued
and unpaid interest to but excluding the date fixed for redemption (subject to
the right of holders of record on the relevant Record Date to

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receive interest due on an interest payment date that is on or prior to the date
fixed for redemption), if redeemed during the 12-month period beginning on
of the years indicated:

<TABLE>
<CAPTION>
----------
YEAR PERCENTAGE
----------------------------------------------------------------- ----------
<S> <C>
2001............................................................. %
2002............................................................. %
2003............................................................. %
2004 and thereafter.............................................. 100.00%
</TABLE>

In addition, prior to , 1999, the Issuers may redeem up to 35% of the
principal amount of the Notes with the net cash proceeds received by the Company
from one or more Public Equity Offerings or Strategic Equity Investments, at a
redemption price (expressed as a percentage of the principal amount) of %
of the principal amount thereof, plus accrued and unpaid interest to the date
fixed for redemption; provided, however, that at least 65% in aggregate
principal amount of the Notes originally issued remains outstanding immediately
after any such redemption (excluding any Notes owned by the Issuers or any of
their Affiliates). Notice of redemption pursuant to this paragraph must be
mailed to holders of Notes not later than 60 days following the consummation of
such Public Equity Offering or Strategic Equity Investment.

Selection of Notes for any partial redemption shall be made by the Trustee, in
accordance with the rules of any national securities exchange on which the Notes
may be listed or, if the Notes are not so listed, pro rata or by lot or in such
other manner as the Trustee shall deem appropriate and fair. Notes in
denominations larger than $1,000 may be redeemed in part but only in integral
multiples of $1,000. Notice of redemption will be mailed before the date fixed
for redemption to each holder of Notes to be redeemed at his registered address.
On and after the date fixed for redemption, interest will cease to accrue on
Notes or portions thereof called for redemption.

The Notes will not have the benefit of any sinking fund.

SUBORDINATION

The payment of the principal of, premium, if any, and interest on the Notes is
subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment in full in cash of all Senior Indebtedness.

Upon any payment or distribution of assets or securities of either of the
Issuers of any kind or character, whether in cash, property or securities
(including any payment made to the holders of the Notes under the terms of
Indebtedness subordinated to the Notes, but excluding any payment or
distribution of Permitted Junior Securities), upon any dissolution or winding-up
or total liquidation or reorganization of either of the Issuers, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all Senior Indebtedness shall first be paid in full in cash before
the holders of the Notes or the Trustee on behalf of such holders shall be
entitled to receive any payment by the Issuers of the principal of, premium, if
any, or interest on the Notes, or any payment to acquire any of the Notes for
cash, property or securities, or any distribution with respect to the Notes of
any cash, property or securities. Before any payment may be made by, or on
behalf of, the Issuers of the principal of, premium, if any, or interest on the
Notes upon any such dissolution or winding-up or liquidation or reorganization,
any payment or distribution of assets or securities of either of the Issuers of
any kind or character, whether in cash, property or securities (including any
payment made to the holders of the Notes under the terms of Indebtedness
subordinated to the Notes, but excluding any payment or distribution of
Permitted Junior Securities), to which the holders of the Notes or the Trustee
on their behalf would be entitled, but for the subordination provisions of the
Indenture, shall be made by the Issuers or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of the Senior Indebtedness (pro rata to
such holders on the basis of the respective amounts of Senior Indebtedness held
by such holders) or their representatives or to the trustee or trustees under
any indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, to the extent necessary to pay
all such Senior Indebtedness in full in cash after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.

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No direct or indirect payment (including any payment made to the holders of the
Notes under the terms of Indebtedness subordinated to the Notes, but excluding
any payment or distribution of Permitted Junior Securities) by or on behalf of
the Issuers of principal of, premium, if any, or interest on the Notes, whether
pursuant to the terms of the Notes, upon acceleration or otherwise, will be made
if, at the time of such payment, there exists a default in the payment of all or
any portion of the obligations on any Designated Senior Indebtedness, whether at
maturity, on account of mandatory redemption or prepayment, acceleration or
otherwise, and such default shall not have been cured or waived or the benefits
of this sentence waived by or on behalf of the holders of such Designated Senior
Indebtedness. In addition, during the continuance of any non-payment default or
non-payment event of default with respect to any Designated Senior Indebtedness
pursuant to which the maturity thereof may be immediately accelerated, and upon
receipt by the Trustee of written notice (a "Payment Blockage Notice") from the
holder or holders of such Designated Senior Indebtedness or the trustee or agent
acting on behalf of such Designated Senior Indebtedness, then, unless and until
such default or event of default has been cured or waived or has ceased to exist
or such Designated Senior Indebtedness has been discharged or repaid in full, no
direct or indirect payment (including any payment made to the holders of the
Notes under the terms of Indebtedness subordinated to the Notes, but excluding
any payment or distribution of Permitted Junior Securities) will be made by or
on behalf of the Issuers of principal of, premium, if any, or interest on the
Notes, except from those funds held in trust for the benefit of the holders of
any Notes, pursuant to the procedures set forth under "--Satisfaction and
Discharge of Indenture; Defeasance" below, to such holders, during a period (a
"Payment Blockage Period") commencing on the date of receipt of such notice by
the Trustee and ending 179 days thereafter. Notwithstanding anything in the
subordination provisions of the Indenture or the Notes to the contrary, in no
event will a Payment Blockage Period extend beyond 179 days from the date the
Payment Blockage Notice in respect thereof was given. Not more than one Payment
Blockage Period may be commenced with respect to the Notes during any period of
360 consecutive days. No default or event of default that existed or was
continuing on the date of commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness initiating such Payment Blockage
Period (to the extent the holder of Designated Senior Indebtedness, or trustee
or agent, giving notice commencing such Payment Blockage Period had knowledge of
such existing or continuing default or event of default) may be, or be made, the
basis for the commencement of any other Payment Blockage Period by the holder or
holders of such Designated Senior Indebtedness or the trustee or agent acting on
behalf of such Designated Senior Indebtedness, whether or not within a period of
360 consecutive days, unless such default or event of default has been cured or
waived for a period of not less than 90 consecutive days.

The failure to make any payment or distribution for or on account of the Notes
by reason of the provisions of the Indenture described under this
"Subordination" heading will not be construed as preventing the occurrence of an
Event of Default described in clause (a) or (b) of the first paragraph under
"--Events of Default."

By reason of the subordination provisions described above, in the event of
insolvency of either of the Issuers, funds which would otherwise be payable to
holders of the Notes will be paid to the holders of Senior Indebtedness to the
extent necessary to pay the Senior Indebtedness in full in cash, and the Issuers
may be unable to fully meet their obligations with respect to the Notes. Subject
to the restrictions set forth in the Indenture, in the future the Issuers may
issue additional Senior Indebtedness.

COVENANTS

The Indenture contains, among others, the following covenants:

Limitation on Indebtedness. The Indenture will provide that the Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, Incur any Indebtedness (including Acquired Indebtedness) or
issue any Disqualified Equity Interests except for Permitted Indebtedness;
provided, however, that the Company or any Restricted Subsidiary may Incur
Indebtedness and the Company or any Restricted Subsidiary may issue
Disqualified Equity Interests if, at the time of and immediately after
giving pro forma effect to such Incurrence of Indebtedness or issuance of
Disqualified Equity Interests and the application of the proceeds
therefrom, the Debt to Operating Cash Flow Ratio would be less than or
equal to (i) 7.0 to 1.0 if the date of such Incurrence is on or before
December 31, 1997 and (ii) 6.75 to 1.0 thereafter.

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The foregoing limitations will not apply to the Incurrence of any of the
following (collectively, "Permitted Indebtedness"), each of which shall be
given independent effect:

(a) Indebtedness under the Notes and the Indenture;

(b) Indebtedness and Disqualified Equity Interests of the Company and
the Restricted Subsidiaries outstanding on the Issue Date;

(c) Indebtedness under the Senior Credit Facility in an aggregate
principal amount at any one time outstanding not to exceed the sum
of (A) $ million, which amount shall be reduced by (x) any
permanent reduction of commitments thereunder and (y) any other
repayment accompanied by a permanent reduction of commitments
thereunder (other than in connection with any refinancing thereof)
plus (B) any amounts outstanding under the Senior Credit Facility
that utilizes subparagraph (i) below;

(d) (x) Indebtedness of any Restricted Subsidiary owed to and held by
the Company or any Wholly Owned Restricted Subsidiary and (y)
Indebtedness of the Company owed to and held by any Wholly Owned
Restricted Subsidiary which is unsecured and subordinated in right
of payment to the payment and performance of the Issuers'
obligations under any Senior Indebtedness, the Indenture and the
Notes; provided, however, that an Incurrence of Indebtedness that is
not permitted by this clause (d) shall be deemed to have occurred
upon (i) any sale or other disposition of any Indebtedness of the
Company or a Wholly Owned Restricted Subsidiary referred to in this
clause (d) to a Person (other than the Company or a Wholly Owned
Restricted Subsidiary), (ii) any sale or other disposition of Equity
Interests of a Wholly Owned Restricted Subsidiary which holds
Indebtedness of the Company or another Wholly Owned Restricted
Subsidiary such that such Wholly Owned Restricted Subsidiary ceases
to be a Wholly Owned Restricted Subsidiary or (iii) designation of a
Wholly Owned Restricted Subsidiary which holds Indebtedness of the
Company as an Unrestricted Subsidiary;

(e) guarantees by any Restricted Subsidiary of Indebtedness of the
Company;

(f) Interest Rate Protection Obligations of the Company or any
Restricted Subsidiary relating to Indebtedness of the Company or
such Restricted Subsidiary, as the case may be (which Indebtedness
(i) bears interest at fluctuating interest rates and (ii) is
otherwise permitted to be Incurred under this covenant); provided,
however, that the notional principal amount of such Interest Rate
Protection Obligations does not exceed the principal amount of the
Indebtedness to which such Interest Rate Protection Obligations
relate;

(g) Purchase Money Indebtedness and Capitalized Lease Obligations of the
Company or any Restricted Subsidiary which do not exceed
$ million in the aggregate at any one time outstanding;

(h) Indebtedness or Disqualified Equity Interests of the Company or any
Restricted Subsidiary to the extent representing a replacement,
renewal, refinancing or extension (collectively, a "refinancing") of
outstanding Indebtedness or Disqualified Equity Interests of the
Company or any Restricted Subsidiary Incurred in compliance with the
Debt to Operating Cash Flow Ratio of the first paragraph of this
covenant or clause (a) or (b) of this paragraph of this covenant;
provided, however, that (i) Indebtedness or Disqualified Equity
Interests of the Company may not be refinanced under this clause (h)
with Indebtedness or Disqualified Equity Interests of any Restricted
Subsidiary, (ii) any such refinancing shall not exceed the sum of
the principal amount (or, if such Indebtedness or Disqualified
Equity Interests provide for a lesser amount to be due and payable
upon a declaration of acceleration thereof at the time of such
refinancing, an amount no greater than such lesser amount) of the
Indebtedness or Disqualified Equity Interests being refinanced plus
the amount of accrued interest or dividends thereon and the amount
of any reasonably determined prepayment premium necessary to
accomplish such refinancing and such reasonable fees and expenses
incurred in connection therewith, (iii) Indebtedness representing a
refinancing of Indebtedness other than Senior Indebtedness shall
have a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of the Indebtedness being
refinanced, and (iv) Indebtedness that is pari passu with the Notes
may only be refinanced with Indebtedness that is made pari passu
with or

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subordinate in right of payment to the Notes and Subordinated
Indebtedness or Disqualified Equity Interests may only be refinanced
with Subordinated Indebtedness or Disqualified Equity Interests; and

(i) in addition to the items referred to in clauses (a) through (h)
above, Indebtedness of the Company (including any Indebtedness
under the Senior Credit Facility that utilizes this subparagraph
(i)) having an aggregate principal amount not to exceed
$ million at any time outstanding.

Limitation on Senior Subordinated Indebtedness. The Indenture will provide that
(i) the Issuers will not, directly or indirectly, Incur any Indebtedness that by
its terms would expressly rank senior in right of payment to the Notes and
expressly rank subordinate in right of payment to any Senior Indebtedness and
(ii) the Company will not permit any Subsidiary Guarantor to and no Subsidiary
Guarantor will, directly or indirectly, Incur any Indebtedness that by its terms
would expressly rank senior in right of payment to the Subsidiary Guarantee of
such Subsidiary Guarantor and expressly rank subordinate in right of payment to
any Guarantor Senior Indebtedness of such Subsidiary Guarantor.

Limitation on Restricted Payments. The Indenture will provide that the Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly,

(i) declare or pay any dividend or any other distribution on any Equity
Interests of the Company or any Restricted Subsidiary or make any
payment or distribution to the direct or indirect holders (in their
capacities as such) of Equity Interests of the Company or any
Restricted Subsidiary (other than payments or distributions made to
the Company or a Wholly Owned Restricted Subsidiary and dividends or
distributions payable solely in Qualified Equity Interests of the
Company or in options, warrants or other rights to purchase Qualified
Equity Interests of the Company);

(ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company or any Restricted Subsidiary (other than any
such Equity Interests owned by the Company or a Wholly Owned
Restricted Subsidiary);

(iii) purchase, redeem, defease or retire for value more than one year
prior to the stated maturity thereof any Subordinated Indebtedness
(other than any Subordinated Indebtedness held by a Wholly Owned
Restricted Subsidiary); or

(iv) make any Investment (other than Permitted Investments) in any Person
(other than in the Company, a Wholly Owned Restricted Subsidiary or a
Person that becomes a Wholly Owned Restricted Subsidiary, or is
merged with or into or consolidated with the Company or a Wholly
Owned Restricted Subsidiary (provided the Company or a Wholly Owned
Restricted Subsidiary is the survivor), as a result of or in
connection with such Investment)

(such payments or any other actions (other than Permitted Investments) described
in (i), (ii), (iii) and (iv) collectively, "Restricted Payments"), unless

(a) no Default or Event of Default shall have occurred and be continuing
at the time or after giving effect to such Restricted Payment;

(b) immediately after giving effect to such Restricted Payment, the
Company would be able to Incur $1.00 of Indebtedness (other than
Permitted Indebtedness) under the Debt to Operating Cash Flow Ratio
of the first paragraph of "--Limitation on Indebtedness" above; and

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either (x) as capital contributions to the Company after the Issue Date
or (y) from the issue and sale (other than to a Restricted Subsidiary)
of its Qualified Equity Interests after the Issue Date (excluding the
net proceeds from any issuance and sale of Qualified Equity Interests
financed, directly or indirectly, using funds borrowed from the Company
or any Restricted Subsidiary until and to the extent such borrowing is
repaid), plus (3) the principal amount (or accrued or accreted amount,
if less) of any Indebtedness of the Company or any Restricted
Subsidiary Incurred after the Issue Date which has been converted into
or exchanged for Qualified Equity Interests of the Company, plus (4) in
the case of the disposition or repayment of any Investment constituting
a Restricted Payment made after the Issue Date, an amount (to the
extent not included in the computation of Cumulative Available Cash
Flow) equal to the lesser of: (i) the return of capital with respect to
such Investment and (ii) the amount of such Investment which was
treated as a Restricted Payment, in either case, less the cost of the
disposition of such Investment, plus (5) the Company's proportionate
interest in the lesser of the Fair Market Value or the net worth of any
Unrestricted Subsidiary that has been redesignated as a Restricted
Subsidiary after the Issue Date in accordance with "--Designation of
Unrestricted Subsidiaries" below not to exceed in any case the
Designation Amount with respect to such Restricted Subsidiary upon its
Designation, minus (6) the Designation Amount with respect to any
Subsidiary of the Company which has been designated as an Unrestricted
Subsidiary after the Issue Date in accordance with "--Designation of
Unrestricted Subsidiaries" below.

The foregoing provisions will not prevent (i) the payment of any dividend or
distribution on, or redemption of, Equity Interests within 60 days after the
date of declaration of such dividend or distribution or the giving of formal
notice of such redemption, if at the date of such declaration or giving of
formal notice such payment or redemption would comply with the provisions of the
Indenture, (ii) so long as no Default or Event of Default shall have occurred
and be continuing, the retirement of any Equity Interests of the Company in
exchange for, or out of the net cash proceeds of the substantially concurrent
issue and sale (other than to a Restricted Subsidiary) of, Qualified Equity
Interests of the Company; provided, however, that any such net cash proceeds and
the value of any Equity Interests issued in exchange for such retired Equity
Interests are excluded from clause (c)(2) of the preceding paragraph (and were
not included therein at any time), (iii) so long as no Default or Event of
Default shall have occurred and be continuing, the purchase, redemption,
retirement or other acquisition of Subordinated Indebtedness made in exchange
for, or out of the net cash proceeds of, a substantially concurrent issue and
sale (other than to a Restricted Subsidiary) of (x) Qualified Equity Interests
of the Company; provided, however, that any such net cash proceeds and the value
of any Equity Interests issued in exchange for Subordinated Indebtedness are
excluded from clauses (c)(2) and (c)(3) of the preceding paragraph (and were not
included therein at any time) or (y) other Subordinated Indebtedness having no
stated maturity for the payment of principal thereof prior to the final stated
maturity of the Notes, (iv) the payment of any dividend or distribution on
Equity Interests of the Company or any Restricted Subsidiary to the extent
necessary to permit the direct or indirect beneficial owners of such Equity
Interests to pay federal and state income tax liabilities arising from income of
the Company or such Restricted Subsidiary and attributable to them solely as a
result of the Company or such Restricted Subsidiary (and any intermediate entity
through which such holder owns such Equity Interests) being a partnership or
similar pass-through entity for federal income tax purposes, (v) so long as no
Default or Event of Default has occurred and is continuing, any Investment made
out of the net cash proceeds of the substantially concurrent issue and sale
(other than to a Restricted Subsidiary) of Qualified Equity Interests of the
Company; provided, however, that any such net cash proceeds are excluded from
clause (c)(2) of the preceding paragraph (and were not included therein at any
time) or (vi) the purchase, redemption or other acquisition, cancellation or
retirement for value of Equity Interests, or options, warrants, equity
appreciation rights or other rights to purchase or acquire Equity Interests, of
the Company or any Restricted Subsidiary, or similar securities, held by
officers or employees or former officers or employees of the Company or any
Restricted Subsidiary (or their estates or beneficiaries under their estates),
upon death, disability, retirement or termination of employment not to exceed
$ in any calendar year.

In determining the amount of Restricted Payments permissible under this
covenant, amounts expended pursuant to clauses (i) and (vi) of the immediately
preceding paragraph shall be included as Restricted Payments and amounts
expended pursuant to clauses (ii) through (v) shall be excluded. The amount of
any non-cash Restricted Payment shall be deemed to be equal to the Fair Market
Value thereof at the date of the making of such Restricted Payment.

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Limitation on Guarantees of Indebtedness by Restricted Subsidiaries. The
Indenture will provide that in the event that any Restricted Subsidiary (other
than a Subsidiary Guarantor), directly or indirectly, guarantees any
Indebtedness of the Company other than the Notes (the "Other Indebtedness") the
Company shall cause such Restricted Subsidiary to concurrently guarantee (a
"Subsidiary Guarantee") the Company's Obligations under the Indenture and the
Notes to the same extent that such Restricted Subsidiary guaranteed the
Company's Obligations under the Other Indebtedness (including waiver of
subrogation, if any); provided, however, that if such Other Indebtedness is (i)
Senior Indebtedness, the Subsidiary Guarantee shall be subordinated in right of
payment to all Guarantor Senior Indebtedness (which shall include such guarantee
of such Other Indebtedness) pursuant to the subordination provisions of the
Indenture (which subordination shall be substantially identical to the
subordination provisions of the Indenture applicable to the Notes), (ii) Senior
Subordinated Indebtedness, the Subsidiary Guarantee shall be pari passu in right
of payment with the guarantee of the Other Indebtedness, or (iii) Subordinated
Indebtedness, the Subsidiary Guarantee shall be senior in right of payment to
the guarantee of the Other Indebtedness (which guarantee of such Subordinated
Indebtedness shall provide that such guarantee is subordinated to the Subsidiary
Guarantees to the same extent and in the same manner as the Notes are
subordinated to Senior Indebtedness); provided, further, however, that each
Subsidiary issuing a Subsidiary Guarantee will be automatically and
unconditionally released and discharged from its obligations under such
Subsidiary Guarantee upon the release or discharge of the guarantee of the Other
Indebtedness that resulted in the creation of such Subsidiary Guarantee, except
a discharge or release by, or as a result of, any payment under the guarantee of
such Other Indebtedness by such Subsidiary Guarantor. The Company shall cause
each Restricted Subsidiary issuing a Subsidiary Guarantee to (i) execute and
deliver to the Trustee a supplemental indenture in form reasonably satisfactory
to the Trustee pursuant to which such Restricted Subsidiary shall
unconditionally guarantee all of the Company's obligations under the Notes and
the Indenture on the terms set forth in the Indenture and (ii) deliver to the
Trustee an opinion of counsel that such supplemental indenture has been duly
authorized, executed and delivered by such Restricted Subsidiary and constitutes
a legal, valid, binding and enforceable obligation of such Restricted Subsidiary
(which opinion may be subject to customary assumptions and qualifications).
Thereafter, such Restricted Subsidiary shall (unless released in accordance with
the terms of the Indenture) be a Subsidiary Guarantor for all purposes of the
Indenture.

Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Indenture will provide that the Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) pay dividends or
make any other distributions to the Company or any other Restricted Subsidiary
on its Equity Interests or with respect to any other interest or participation
in, or measured by, its profits, or pay any Indebtedness owed to the Company or
any other Restricted Subsidiary, (b) make loans or advances to, or guarantee any
Indebtedness or other obligations of, the Company or any other Restricted
Subsidiary or (c) transfer any of its properties or assets to the Company or any
other Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) the Senior Credit Facility or other
agreements of the Company or the Restricted Subsidiaries outstanding on the
Issue Date, in each case as in effect on the Issue Date, and any amendments,
restatements, renewals, replacements or refinancings (collectively, a
"refinancing") thereof; provided, however, that such refinancings are no more
restrictive in the aggregate with respect to such encumbrances or restrictions
than those contained in the Senior Credit Facility on the Issue Date or in the
Indenture, (ii) applicable law, (iii) any instrument governing Indebtedness or
Equity Interests of an Acquired Person acquired by the Company or any Restricted
Subsidiary as in effect at the time of such acquisition (except to the extent
such Indebtedness was Incurred by such Acquired Person in connection with, as a
result of or in contemplation of such acquisition); provided, however, that such
encumbrances and restrictions are not applicable to the Company or any
Restricted Subsidiary, or the properties or assets of the Company or any
Restricted Subsidiary, other than the Acquired Person, (iv) customary
non-assignment provisions in leases or cable television franchises entered into
in the ordinary course of business and consistent with past practices, (v)
Purchase Money Indebtedness for property acquired in the ordinary course of
business that only imposes encumbrances and restrictions on the property so
acquired, (vi) any agreement for the sale or disposition of the Equity Interests
or assets of any Restricted Subsidiary; provided, however, that such
encumbrances and restrictions described in this clause (vi) are only applicable
to such Restricted Subsidiary or assets, as applicable, and any such sale or
disposition is made in compliance with "--Disposition of Proceeds of Asset
Sales" below to the extent applicable thereto, (vii) refinancing

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Indebtedness permitted under clause (h) of "--Limitation on Indebtedness" above;
provided, however, that the encumbrances and restrictions contained in the
agreements governing such Indebtedness are no more restrictive in the aggregate
than those contained in the agreements governing the Indebtedness being
refinanced immediately prior to such refinancing, (viii) the Indenture or (ix)
any such encumbrance or restriction existing under any other agreement,
instrument or document hereafter in effect; provided, however, that the terms
and conditions of any such encumbrance or restriction are not more restrictive
than those contained in the Senior Credit Facility as in effect on the Issue
Date.

Limitation on Liens. The Indenture will provide that the Company will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, Incur any
Liens of any kind against or upon any of their respective properties or assets
now owned or hereafter acquired, or any proceeds therefrom or any income or
profits therefrom, to secure any Indebtedness unless contemporaneously therewith
effective provision is made to secure the Notes equally and ratably with such
Indebtedness with a Lien on the same properties and assets securing such
Indebtedness for so long as such Indebtedness is secured by such Lien, except
for (i) Liens securing Senior Indebtedness or any guarantee of Senior
Indebtedness by any Restricted Subsidiary and (ii) Permitted Liens.

Disposition of Proceeds of Asset Sales. The Indenture will provide that the
Company will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, make any Asset Sale, unless (a) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the assets sold or otherwise
disposed of and (b) either (i) at least 75% of such consideration consists of
cash or Cash Equivalents or (ii) at least 75% of such consideration consists of
(x) properties and capital assets (including franchises and licenses required to
own or operate such properties) to be used in the same lines of business being
conducted by the Company or any Restricted Subsidiary at such time or (y) Equity
Interests in one or more Persons which thereby become Wholly Owned Restricted
Subsidiaries whose assets consist primarily of such properties and capital
assets. The amount of any (i) liabilities of the Company or any Restricted
Subsidiary that are actually assumed by the transferee in such Asset Sale and
from which the Company and the Restricted Subsidiaries are fully released shall
be deemed to be cash for purposes of determining the percentage of cash
consideration received by the Company or the Restricted Subsidiaries and (ii)
notes or other similar obligations received by the Company or the Restricted
Subsidiaries from such transferee that are immediately converted (or are
converted within thirty days of the related Asset Sale) by the Company or the
Restricted Subsidiaries into cash shall be deemed to be cash, in an amount equal
to the net cash proceeds realized upon such conversion, for purposes of
determining the percentage of cash consideration received by the Company or the
Restricted Subsidiaries.

The Company or such Restricted Subsidiary, as the case may be, may (i) apply the
Net Cash Proceeds of any Asset Sale within 365 days of receipt thereof to repay
Senior Indebtedness and permanently reduce any related commitment; provided,
however, that if Indebtedness under the revolving credit portion of the Senior
Credit Facility is repaid, the Company need not reduce the commitments for such
revolving credit portion, or (ii) commit in writing to acquire, construct or
improve properties and capital assets (including franchises and licenses
required to own or operate any such assets or properties) to be used in the same
line of business being conducted by the Company or any Restricted Subsidiary at
such time and so apply such Net Cash Proceeds within 365 days of the receipt
thereof.

To the extent all or part of the Net Cash Proceeds of any Asset Sale are not so
applied within 365 days of such Asset Sale (such Net Cash Proceeds, the
"Unutilized Net Cash Proceeds"), the Company shall, within 30 days of such 365th
day, make an Offer to Purchase from all holders of Notes up to a maximum
principal amount (expressed as a multiple of $1,000) of Notes equal to such
Unutilized Net Cash Proceeds, at a purchase price in cash equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the date of purchase; provided, however, that the Offer to Purchase may be
deferred until there are aggregate Unutilized Net Cash Proceeds equal to or in
excess of $5.0 million, at which time the entire amount of such Unutilized Net
Cash Proceeds, and not just the amount in excess of $5.0 million, shall be
applied as required pursuant to this paragraph. In the event that any other
Indebtedness of the Company which ranks pari passu with the Notes requires the
repayment or prepayment thereof, or an offer to purchase to be made to
repurchase such Indebtedness, upon the consummation of any Asset Sale, the
Company may apply the Unutilized Net Cash Proceeds otherwise required to be
applied to an Offer to Purchase to repay, prepay or offer to purchase such other
Indebtedness and to an Offer to Purchase pro rata based upon the aggregate
principal amount of the Notes then outstanding and the aggregate

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principal amount (or accreted amount, if less) of such other Indebtedness then
outstanding. The Offer to Purchase shall remain open for a period of 20 Business
Days or such longer period as may be required by law. To the extent the
aggregate amount of Notes tendered pursuant to the Offer to Purchase exceeds the
Unutilized Net Cash Proceeds, Notes shall be purchased among holders on a
proportionate basis (based on the relative aggregate principal amounts validly
tendered for purchase by holders thereof). To the extent the Unutilized Net Cash
Proceeds exceed the aggregate amount of Notes tendered by the holders of the
Notes pursuant to the Offer to Purchase, the Company may retain and utilize any
portion of the Unutilized Net Cash Proceeds not applied to repurchase the Notes
for any purpose consistent with the other terms of the Indenture.

In the event that the Company makes an Offer to Purchase the Notes, the Company
shall comply with any applicable securities laws and regulations, including any
applicable requirements of Section 14(e) of, and Rule 14e-1 under, the Exchange
Act and any violation of the provisions of the Indenture relating to such Offer
to Purchase occurring as a result of such compliance shall not be deemed an
Event of Default or an event that with the passing of time or giving of notice,
or both, would constitute an Event of Default.

Limitation on Transactions with Affiliates and Related Persons. The Indenture
will provide that the Company will not, and will not permit, cause or suffer any
Restricted Subsidiary to, directly or indirectly, conduct any business or enter
into any transaction (or series of related transactions) with or for the benefit
of any of their respective Affiliates or any beneficial holder of 10% or more of
the Equity Interests of the Company or any officer, director or employee of the
Company or any Restricted Subsidiary (each an "Affiliate Transaction"), unless
(a) such Affiliate Transaction is on terms which are no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than would be
available in a comparable transaction with an unaffiliated third party, (b) if
such Affiliate Transaction (or series of related Affiliate Transactions)
involves aggregate payments or other consideration having a Fair Market Value in
excess of $5.0 million, a majority of the disinterested members of the Board of
Directors of FV Inc. shall have approved such transaction and determined that
such transaction complies with the foregoing provisions and (c) if such
Affiliate Transaction (or series of related Affiliate Transactions) involves
aggregate payments or other consideration having a Fair Market Value of $25.0
million or more, the Company has obtained a written opinion from an Independent
Financial Advisor stating that the terms of such Affiliate Transaction are fair
to the Company or the Restricted Subsidiary, as the case may be, from a
financial point of view.

Notwithstanding the foregoing, the restrictions set forth in this covenant shall
not apply to (i) transactions with or among the Company and the Wholly Owned
Restricted Subsidiaries, (ii) customary directors' fees, indemnification and
similar arrangements, consulting fees, employee salaries, bonuses, or employment
agreements, compensation or employee benefit arrangements, and incentive
arrangements with any officer, director or employee of the Company entered into
in the ordinary course of business (including customary benefits thereunder) and
payments under any indemnification arrangements permitted by applicable law,
(iii) the Agreement of Limited Partnership of the Company as in effect on the
Issue Date, including any amendment or extension thereof that does not otherwise
violate any other covenant set forth in the Indenture, and any transactions
undertaken pursuant to any other contractual obligations in existence on the
Issue Date (as in effect on the Issue Date), (iv) the issue and sale by the
Company to its partners or stockholders of Qualified Equity Interests, (v) any
Restricted Payments made in compliance with "--Limitation on Restricted
Payments" above (including without limitation the making of any payments or
distributions permitted to be made in accordance with clauses (i) through (vi)
of the penultimate paragraph of "--Limitation on Restricted Payments"), (vi)
loans and advances to officers, directors and employees of the Company and the
Restricted Subsidiaries for travel, entertainment, moving and other relocation
expenses, in each case made in the ordinary course of business and consistent
with past business practices, (vii) customary commercial banking, investment
banking, underwriting, placement agent or financial advisory fees paid in
connection with services rendered to the Company and its Subsidiaries in the
ordinary course, (viii) the Incurrence of intercompany Indebtedness permitted
pursuant to clause (d) under the definition of "Permitted Indebtedness" set
forth under "--Limitation on Indebtedness," (ix) the pledge of Equity Interests
of Unrestricted Subsidiaries to support the Indebtedness thereof and (x) the
Senior Credit Facility.

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Designation of Unrestricted Subsidiaries. The Indenture will provide that the
Company may designate any Subsidiary of the Company as an "Unrestricted
Subsidiary" under the Indenture (a "Designation") only if:

(a) no Default or Event of Default shall have occurred and be continuing at
the time of or after giving effect to such Designation;

(b) at the time of and after giving effect to such Designation, the Company
could incur $1.00 of additional Indebtedness under the Debt to
Operating Cash Flow Ratio of the first paragraph of "--Limitation on
Indebtedness" above; and

(c) the Company would be permitted to make an Investment (other than a
Permitted Investment) at the time of Designation (assuming the
effectiveness of such Designation) pursuant to the first paragraph of
"--Limitation on Restricted Payments" above in an amount (the
"Designation Amount") equal to the Company's proportionate interest in
the Fair Market Value of such Subsidiary on such date.

Neither the Company nor any Restricted Subsidiary shall at any time (x) provide
credit support for, subject any of its property or assets (other than the Equity
Interests of any Unrestricted Subsidiary) to the satisfaction of, or guarantee,
any Indebtedness of any Unrestricted Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness), (y) be directly or
indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z) be
directly or indirectly liable for any Indebtedness which provides that the
holder thereof may (upon notice, lapse of time or both) declare a default
thereon or cause the payment thereof to be accelerated or payable prior to its
final scheduled maturity upon the occurrence of a default with respect to any
Indebtedness of any Unrestricted Subsidiary, except, in the case of clause (x)
or (y), to the extent otherwise permitted under the terms of the Indenture,
including, without limitation, pursuant to "--Limitation on Restricted Payments"
and "--Limitation on Indebtedness" above.

The Company may revoke any Designation of a Subsidiary as an Unrestricted
Subsidiary (a "Revocation") if:

(a) no Default or Event of Default shall have occurred and be continuing at
the time of and after giving effect to such Revocation; and

(b) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time,
have been permitted to be Incurred for all purposes of the Indenture.

All Designations and Revocations must be evidenced by resolutions of the Company
delivered to the Trustee certifying compliance with the foregoing provisions.

Limitation on Conduct of Business of Capital. The Indenture will provide that
Capital will not own any operating assets or other properties or conduct any
business other than to serve as an Issuer and an obligor on the Notes.

CHANGE OF CONTROL

The Indenture will provide that within 30 days following the date of
consummation of a transaction resulting in a Change of Control, the Company will
commence an Offer to Purchase all outstanding Notes at a purchase price in cash
equal to 101% of their principal amount plus accrued and unpaid interest to the
Purchase Date. Each holder shall be entitled to tender all or any portion of the
Notes owned by such holder pursuant to the Offer to Purchase, subject to the
requirement that any portion of a Note tendered must bear an integral multiple
of $1,000 principal amount.

With respect to the sale of assets referred to in the definition of "Change of
Control," the phrase "all or substantially all" of the assets of the Company or
the General Partner will likely be interpreted under applicable state law and
will be dependent upon particular facts and circumstances. As a result, there
may be a degree of uncertainty in

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ascertaining whether a sale or transfer of "all or substantially all" of the
assets of the Company or the General Partner has occurred. In addition, no
assurances can be given that the Company will be able to acquire Notes tendered
upon the occurrence of a Change of Control. The ability of the Company to pay
cash to the holders of Notes upon a Change of Control may be limited by its then
existing financial resources. The Senior Credit Facility contains certain
covenants prohibiting, or requiring waiver or consent of the lenders thereunder
prior to, the repurchase of the Notes upon a Change of Control, and future debt
agreements of the Company may provide the same. If the Company does not obtain
such waiver or consent or repay such Indebtedness, the Company will remain
prohibited from repurchasing the Notes. In such event, the Company's failure to
purchase tendered Notes would constitute an Event of Default under the Indenture
which would in turn constitute a default under the Senior Credit Facility and
possibly other Senior Indebtedness. In such circumstances, the subordination
provisions of the Indenture would likely restrict payments to the holders of the
Notes. None of the provisions relating to a repurchase upon a Change of Control
are waivable by the Board of Directors of FV Inc. or the Trustee.

The foregoing provisions will not prevent the Issuers from entering into a
transaction of the types described under the definition of "Change of Control"
with management or their affiliates. In addition, such provisions may not
necessarily afford the holders of the Notes protection in the event of a highly
leveraged transaction, including a reorganization, restructuring, merger or
similar transaction involving the Issuers that may adversely affect the holders
of the Notes because such transactions may not involve a shift in voting power
or beneficial ownership, or, even if they do, may not involve a shift of the
magnitude required under the definition of Change of Control to trigger the
provisions.

PROVISION OF FINANCIAL INFORMATION

The Indenture will provide that whether or not the Issuers are subject to
Section 13(a) or 15(d) of the Exchange Act, or any successor provision thereto,
the Issuers shall file with the Commission the annual reports, quarterly reports
and other documents which the Issuers would have been required to file with the
Commission pursuant to such Section 13(a) or 15(d) or any successor provision
thereto if the Issuers were so required, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates") by
which the Issuers would have been required so to file such documents if the
Issuers were so required. The Issuers shall also in any event (a) within 15 days
of each Required Filing Date (whether or not permitted or required to file with
the Commission) (i) transmit by mail to all holders of Notes, as their names and
addresses appear in the note register, without cost to such holders, and (ii)
file with the Trustee, copies of the annual reports, quarterly reports and other
documents which the Issuers are required to file with the Commission pursuant to
the preceding sentence, or, if such filing is not so permitted, information and
data of a similar nature, and (b) if, notwithstanding the preceding sentence,
filing such documents by the Issuers with the Commission is not permitted under
the Exchange Act, promptly upon written request supply copies of such documents
to any prospective holder of Notes. The Issuers shall not be obligated to file
any such reports with the Commission if the Commission does not permit such
filings for all companies similarly situated other than due to any action or
inaction by the Issuers.

MERGER, SALE OF ASSETS, ETC.

The Indenture will provide that the Issuers will not consolidate with or merge
with or into (whether or not such Issuer is the Surviving Person) any other
entity and the Issuers will not and will not permit any of their respective
Restricted Subsidiaries to sell, convey, assign, transfer, lease or otherwise
dispose of all or substantially all of such Issuer's properties and assets
(determined, in the case of the Company, on a consolidated basis for the Company
and the Restricted Subsidiaries) to any entity in a single transaction or series
of related transactions, unless: (a) either (i) such Issuer shall be the
Surviving Person or (ii) the Surviving Person (if other than such Issuer) shall
be, in the case of Capital, a corporation or, in any other case, a corporation,
partnership, limited liability company, limited liability limited partnership or
trust organized and validly existing under the laws of the United States of
America or any State thereof or the District of Columbia, and shall, in any such
case, expressly assume by a supplemental indenture the due and punctual payment
of the principal of, premium, if any, and interest on all the Notes and the
performance and observance of every covenant of the Indenture to be performed or
observed on the part of the Issuers; (b) immediately thereafter, no Default or
Event of Default shall have occurred and be continuing; (c) immediately after
giving effect to any such transaction involving the Incurrence by the Company or

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any Restricted Subsidiary, directly or indirectly, of additional Indebtedness
(and treating any Indebtedness not previously an obligation of the Company or
any Restricted Subsidiary in connection with or as a result of such transaction
as having been Incurred at the time of such transaction), the Surviving Person
could Incur, on a pro forma basis after giving effect to such transaction as if
it had occurred at the beginning of the latest fiscal quarter for which
consolidated financial statements of the Company are available, at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) under the Debt to
Operating Cash Flow Ratio of the first paragraph of "-- Limitation on
Indebtedness" above; and (d) immediately thereafter the Surviving Person shall
have a Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of such Issuer immediately prior to such transaction.

The Indenture will provide that, subject to the requirements of the immediately
preceding paragraph, in the event of a sale of all or substantially all of the
assets of any Subsidiary Guarantor or all of the Equity Interests of any
Subsidiary Guarantor, by way of merger, consolidation or otherwise, then the
Surviving Person of any such merger or consolidation, or such Subsidiary
Guarantor, if all of its Equity Interests are sold, shall be released and
relieved of any and all obligations under the Subsidiary Guarantee of such
Subsidiary Guarantor if (i) the Person or entity surviving such merger or
consolidation or acquiring the Equity Interests of such Subsidiary Guarantor is
not a Restricted Subsidiary, and (ii) the Net Cash Proceeds from such sale are
used after such sale in a manner that complies with the provisions of
"--Covenants--Disposition of Proceeds of Asset Sales" above. Except as provided
in the preceding sentence, the Indenture will provide that no Subsidiary
Guarantor shall consolidate with or merge with or into another Person, whether
or not such Person is affiliated with such Subsidiary Guarantor and whether or
not such Subsidiary Guarantor is the Surviving Person, unless (i) the Surviving
Person is a corporation, partnership, limited liability company, limited
liability limited partnership or trust organized or existing under the laws of
the United States, any State thereof or the District of Columbia, (ii) the
Surviving Person (if other than such Subsidiary Guarantor) assumes all the
Obligations of such Subsidiary Guarantor under the Notes and the Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee, (iii) at the time of and immediately after such Disposition, no Default
or Event of Default shall have occurred and be continuing, and (iv) the
Surviving Person will have Consolidated Net Worth (immediately after giving pro
forma effect to the Disposition) equal to or greater than the Consolidated Net
Worth of such Subsidiary Guarantor immediately preceding the transaction;
provided, however, that clause (iv) of this paragraph shall not be a condition
to a merger or consolidation of a Subsidiary Guarantor if such merger or
consolidation only involves the Company and/or one or more Wholly Owned
Restricted Subsidiaries.

In the event of any transaction (other than a lease) described in and complying
with the conditions listed in the immediately preceding paragraphs in which an
Issuer or any Subsidiary Guarantor is not the Surviving Person and the Surviving
Person is to assume all the Obligations of such Issuer or any such Subsidiary
Guarantor under the Notes and the Indenture pursuant to a supplemental
indenture, such Surviving Person shall succeed to, and be substituted for, and
may exercise every right and power of, such Issuer or such Subsidiary Guarantor,
as the case may be, and such Issuer or such Subsidiary Guarantor, as the case
may be, shall be discharged from its Obligations under the Indenture, the Notes
or its Subsidiary Guarantee, as the case may be.

EVENTS OF DEFAULT

The following will be Events of Default under the Indenture:

(a) failure to pay interest on any Note when due and payable, continued for
30 days (whether or not prohibited by the provisions of the Indenture
described under "--Subordination" above);

(b) failure to pay principal of (or premium, if any, on) any Note when due
and payable at maturity, upon redemption or otherwise (whether or not
prohibited by the provisions of the Indenture described under
"--Subordination" above);

(c) failure to perform or comply with any of the provisions described under
"--Merger, Sale of Assets, etc.," "--Change of Control" and
"--Covenants--Disposition of Proceeds of Asset Sales" above;

(d) failure to observe or perform any other covenant, warranty or agreement
of the Issuers or any Subsidiary Guarantor under the Indenture or the
Notes continued for 30 days after written notice to the Issuers by the
Trustee or holders of at least 25% in aggregate principal amount of
outstanding Notes;

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(e) default under the terms of one or more instruments evidencing or
securing Indebtedness of the Company or any Restricted Subsidiary
having an outstanding principal amount of $10 million or more
individually or in the aggregate that has resulted in the acceleration
of the payment of such Indebtedness or failure to pay principal when
due at the stated maturity of any such Indebtedness;

(f) the rendering of a final judgment or judgments (not subject to appeal)
against the Company or any Restricted Subsidiary in an amount of $10
million or more (net of any amounts covered by reputable and
creditworthy insurance companies) which remains undischarged or
unstayed for a period of 60 days after the date on which the right to
appeal has expired;

(g) any holder or holders of at least $10 million in aggregate principal
amount of Indebtedness of the Company or any Restricted Subsidiary,
after a default under such Indebtedness, shall notify the Trustee of
the intended sale or disposition of any assets of the Company or any
Restricted Subsidiary with an aggregate Fair Market Value (as
determined in good faith by the Board of Directors of FV Inc.) of at
least $2 million that have been pledged to or for the benefit of such
holder or holders to secure such Indebtedness or shall commence
proceedings, or take any action (including by way of setoff), to retain
in satisfaction of such Indebtedness or to collect on, seize, dispose
of or apply in satisfaction of such Indebtedness, such assets of the
Company or any Restricted Subsidiary (including funds on deposit or
held pursuant to lock-box and other similar arrangements) which
continues for five business days after notice has been given to the
Company and the representative of such Indebtedness and Indebtedness
under the Senior Credit Facility;

(h) certain events of bankruptcy, insolvency or reorganization affecting
either of the Issuers or any Significant Restricted Subsidiary; and

(i) other than as provided in or pursuant to any Subsidiary Guarantee or
the Indenture, such Subsidiary Guarantee ceases to be in full force and
effect or is declared null and void and unenforceable or found to be
invalid or any Subsidiary Guarantor denies its liability under its
Subsidiary Guarantee (other than by reason of a release of such
Subsidiary Guarantor from its Subsidiary Guarantee in accordance with
the terms of the Indenture and such Subsidiary Guarantee).

Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default (as defined) shall occur and be continuing,
the Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the holders, unless
such holders shall have offered to the Trustee reasonable indemnity. Subject to
such provisions for the indemnification of the Trustee, the holders of a
majority in aggregate principal amount of the outstanding Notes will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee.

If an Event of Default (other than an Event of Default with respect to either of
the Issuers described in clause (h) above) shall occur and be continuing, the
Trustee or the holders of at least 25% in aggregate principal amount of the
outstanding Notes by notice in writing to the Issuers (and to the Trustee if
given by the holders) may declare the unpaid principal of and accrued and unpaid
interest to the date of acceleration on all the outstanding Notes to be due and
payable immediately and, upon any such declaration, such principal amount and
accrued and unpaid interest shall become immediately due and payable; provided,
however, that so long as the Senior Credit Facility shall be in full force and
effect, if an Event of Default shall have occurred and be continuing (other than
as specified in clause (h) above), the Notes shall not become due and payable
until the earlier to occur of (x) five business days following delivery of a
written notice of such acceleration of the Notes to the agent under the Senior
Credit Facility and (y) the acceleration of any Indebtedness under the Senior
Credit Facility. If an Event of Default specified in clause (h) above with
respect to either of the Issuers occurs, all unpaid principal of and accrued and
unpaid interest on the outstanding Notes will ipso facto become immediately due
and payable without any declaration or other act on the part of the Trustee or
any holder.

After such acceleration, but before a judgment or decree based on acceleration
has been obtained, the holders of not less than a majority in aggregate
principal amount of then outstanding Notes may, under certain circumstances,
rescind and annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal

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and interest, have been cured or waived as provided in the Indenture. For
information as to waiver of defaults, see "--Modification and Waiver" below.

The Indenture provides that the Trustee shall, within 30 days after the
occurrence of any Default or Event of Default with respect to the Notes, give
the holders thereof notice of all uncured Defaults or Events of Default known to
it; provided, however, that, except in the case of an Event of Default or a
Default in payment with respect to the Notes or a Default or Event of Default in
complying with "--Covenants--Merger, Sale of Assets, Etc." above, the Trustee
shall be protected in withholding such notice if and so long as the Board of
Directors or responsible officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the holders of the Notes.

No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless the holders of at least 25% in aggregate principal amount of
the outstanding Notes shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as Trustee, and the
Trustee shall not have received from the holders of a majority in aggregate
principal amount of the outstanding Notes a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a holder of a
Note for enforcement of payment of the principal of and premium, if any, or
interest on such Note on or after the respective due dates expressed in such
Note.

The Issuers will be required to furnish to the Trustee annually a statement as
to the performance by them of certain of their obligations under the Indenture
and as to any default in such performance.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND PARTNERS

The Indenture will provide that no director, officer, employee, incorporator, or
limited or general partner of the Issuers or any of their Subsidiaries shall
have any liability for any obligation of the Issuers or any of their
Subsidiaries under the Indenture or the Notes or for any claim based on, in
respect of, or by reason of, any such obligation or the creation of any such
obligation. Each holder by accepting a Note waives and releases such Persons
from all such liability and such waiver and release is part of the consideration
for the issuance of the Notes.

SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE

The Issuers may terminate their and the Subsidiary Guarantors' substantive
obligations in respect of the Notes by delivering all outstanding Notes to the
Trustee for cancellation and paying all sums payable by them on account of
principal of, premium, if any, and interest on all Notes or otherwise. In
addition to the foregoing, the Issuers may, provided that no Default or Event of
Default has occurred and is continuing or would arise therefrom (or, with
respect to a Default or Event of Default specified in clause (h) of "--Events of
Default" above, any time on or prior to the 91st calendar day after the date of
such deposit (it being understood that this condition shall not be deemed
satisfied until after such 91st day)) and provided that no default under any
Senior Indebtedness would result therefrom, terminate their and the Subsidiary
Guarantors' substantive obligations in respect of the Notes (except for their
obligations to pay the principal of (and premium, if any, on) and the interest
on the Notes and the Subsidiary Guarantors' guarantee thereof) by (i) depositing
with the Trustee, under the terms of an irrevocable trust agreement, money or
United States Government Obligations sufficient (without reinvestment) to pay
all remaining Indebtedness on the Notes, (ii) delivering to the Trustee either
an Opinion of Counsel or a ruling directed to the Trustee from the Internal
Revenue Service to the effect that the holders of the Notes will not recognize
income, gain or loss for federal income tax purposes solely as a result of such
deposit and termination of obligations, (iii) delivering to the Trustee an
Opinion of Counsel to the effect that the Issuers' exercise of their option
under this paragraph will not result in any of the Issuers, the Trustee or the
trust created by the Issuers' deposit of funds pursuant to this provision
becoming or being deemed to be an "investment company" under the Investment
Company Act of 1940, as amended, and (iv) complying with certain other
requirements set forth in the Indenture. In addition, the Issuers may, provided
that no Default or Event of Default has occurred and is continuing or would
arise therefrom (or, with respect to a Default or Event of Default specified in
clause (h) of "--Events of Default" above, any time on or prior to the 91st
calendar day after the date of such deposit (it being understood that this

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condition shall not be deemed satisfied until after such 91st day)) and provided
that no default under any Senior Indebtedness would result therefrom, terminate
all of their and the Subsidiary Guarantors' substantive obligations in respect
of the Notes (including their obligations to pay the principal of (and premium,
if any, on) and interest on the Notes and the Subsidiary Guarantors' guarantee
thereof) by (i) depositing with the Trustee, under the terms of an irrevocable
trust agreement, money or United States Government Obligations sufficient
(without reinvestment) to pay all remaining Indebtedness on the Notes, (ii)
delivering to the Trustee either a ruling directed to the Trustee from the
Internal Revenue Service to the effect that the holders of the Notes will not
recognize income, gain or loss for federal income tax purposes solely as a
result of such deposit and termination of obligations or an Opinion of Counsel
based upon such a ruling addressed to the Trustee or a change in the applicable
Federal tax law since the date of the Indenture to such effect, (iii) delivering
to the Trustee an Opinion of Counsel to the effect that the Issuers' exercise of
their option under this paragraph will not result in any of the Issuers, the
Trustee or the trust created by the Issuers' deposit of funds pursuant to this
provision becoming or being deemed to be an "investment company" under the
Investment Company Act of 1940, as amended, and (iv) complying with certain
other requirements set forth in the Indenture.

The Issuers may make an irrevocable deposit pursuant to this provision only if
at such time they are not prohibited from doing so under the subordination
provisions of the Indenture or certain covenants in the Senior Indebtedness and
the Issuers have delivered to the Trustee and any Paying Agent an Officers'
Certificate to that effect.

GOVERNING LAW

The Indenture and the Notes will be governed by the laws of the State of New
York without regard to principles of conflicts of laws.

MODIFICATION AND WAIVER

The Issuers and the Subsidiary Guarantors, when authorized by a resolution of
their respective Boards of Directors, and the Trustee may amend or supplement
the Indenture or the Notes without notice to or consent of any holder: (i) to
cure any ambiguity, defect or inconsistency; provided, however, that such
amendment or supplement does not adversely affect the rights of any holder; (ii)
to effect the assumption by a successor Person of all obligations of the Issuers
under the Notes and the Indenture in connection with any transaction complying
with "--Merger, Sale of Assets, Etc." above; (iii) to provide for uncertificated
Notes in addition to or in place of certificated Notes; (iv) to comply with any
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act; (v) to make any change that
would provide any additional benefit or rights to the holders; (vi) to make any
other change that does not adversely affect the rights of any holder under the
Indenture; (vii) to evidence the succession of another Person to any Subsidiary
Guarantor and the assumption by any such successor of the covenants of such
Subsidiary Guarantor in the Subsidiary Guarantee; (viii) to add to the covenants
of the Issuers or the Subsidiary Guarantors for the benefit of the holders, or
to surrender any right or power conferred upon the Issuers or any Subsidiary
Guarantor under the Indenture; (ix) to secure the Notes pursuant to the
requirements of "--Covenants--Limitation on Liens" above or otherwise; or (x) to
reflect the release of a Subsidiary Guarantor from its obligations with respect
to its Subsidiary Guarantee in accordance with the provisions of the Indenture
and to add a Subsidiary Guarantor pursuant to the requirements of the Indenture;
provided, however, that the Issuers have delivered to the Trustee an opinion of
counsel stating that such amendment or supplement complies with the provisions
of the Indenture.

Modifications and amendments of the Indenture and the Notes may be made by the
Issuers and the Subsidiary Guarantors when authorized by a resolution of their
respective Boards of Directors and the Trustee with the consent of the holders
of a majority in aggregate principal amount of the outstanding Notes; provided,
however, that no such modification or amendment may, without the consent of the
holder of each Note affected thereby, (a) change the Stated Maturity of the
principal of or any installment of interest on any Note or alter the optional
redemption or repurchase provisions of any Note or the Indenture in a manner
adverse to the holders of the Notes, (b) reduce the principal amount (or the
premium) of any Note, (c) reduce the rate of or extend the time for payment of
interest on any Note, (d) change the place or currency of payment of principal
of (or premium) or interest on any Note, (e) modify any provisions of the
Indenture relating to the waiver of past defaults (other than to add sections of
the Indenture subject thereto) or the right of the holders to institute suit for
the enforcement of any payment on or with

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respect to any Note or the modification and amendment of the Indenture and the
Notes (other than to add sections of the Indenture or the Notes which may not be
amended, supplemented or waived without the consent of each holder affected),
(f) reduce the percentage of the principal amount of outstanding Notes necessary
for amendment to or waiver of compliance with any provision of the Indenture or
the Notes or for waiver of any Default, (g) waive a default in the payment of
principal of, interest on, or redemption payment with respect to, any Note
(except a recision of acceleration of the Notes by the holders as provided in
the Indenture and a waiver of the payment default that resulted from such
acceleration), (h) modify the ranking or priority of the Notes or the Subsidiary
Guarantee of any Subsidiary Guarantor or modify the definition of Senior
Indebtedness or Guarantor Senior Indebtedness or amend or modify the
subordination provisions of the Indenture in any manner adverse to the holders,
(i) release any Subsidiary Guarantor from any of its obligations under its
Subsidiary Guarantee or the Indenture otherwise than in accordance with the
Indenture, or (j) modify the provisions relating to any Offer to Purchase
required under the covenants described under "--Covenants--Disposition of
Proceeds of Asset Sales" or "--Change of Control" above in a manner materially
adverse to the holders.

The holders of a majority in aggregate principal amount of the outstanding
Notes, on behalf of all holders of Notes, may waive compliance by the Issuers
with certain restrictive provisions of the Indenture. Subject to certain rights
of the Trustee, as provided in the Indenture, the holders of a majority in
aggregate principal amount of the outstanding Notes, on behalf of all holders of
Notes, may waive any past default under the Indenture, except a default in the
payment of principal, premium or interest or a default arising from failure to
purchase any Note tendered pursuant to an Offer to Purchase, or a default in
respect of a provision that under the Indenture cannot be modified or amended
without the consent of the holder of each outstanding Note affected.

THE TRUSTEE

The Indenture provides that, except during the continuance of a Default, the
Trustee will perform only such duties as are specifically set forth in the
Indenture. During the existence of a Default, the Trustee will exercise such
rights and powers vested in it under the Indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs. The Indenture and
provisions of the Trust Indenture Act incorporated by reference therein contain
limitations on the rights of the Trustee, should it become a creditor of either
of the Issuers, any Subsidiary Guarantor or any other obligor upon the Notes, to
obtain payment of claims in certain cases or to realize on certain property
received by it in respect of any such claim as security or otherwise. The
Trustee is permitted to engage in other transactions with the Issuers or an
Affiliate of either of the Issuers; provided, however, that if it acquires any
conflicting interest (as defined in the Indenture or in the Trust Indenture
Act), it must eliminate such conflict or resign.

BOOK-ENTRY; DELIVERY AND FORM

The Notes will be represented by one or more fully registered global notes (each
a "Global Note"). Each Global Note will be deposited on the date of the closing
of the sale of the Notes offered hereby with, or on behalf of, The Depository
Trust Company ("DTC") and registered in the name of a nominee of DTC.

THE GLOBAL NOTE

Ownership of beneficial interests in a Global Note will be limited to persons
that have accounts with DTC ("participants") or persons that may hold interests
through participants. The Issuers expect that pursuant to procedures established
by DTC (i) upon deposit of a Global Note, DTC will credit the accounts of
participants designated by the Underwriters with the respective principal amount
of the Global Note beneficially owned by such participant and (ii) ownership of
the Notes will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC or its nominee (with respect to
interests of participants) and the records of participants (with respect to
interests of persons holding through participants).

So long as DTC, or its nominee, is the registered owner or holder of the Notes,
DTC or such nominee will be considered the sole owner or holder of the Notes
represented by the Global Note for all purposes under the Indenture. No
beneficial owner of an interest in the Global Note will be able to transfer such
interest except in

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accordance with DTC's applicable procedures, in addition to those provided for
under the Indenture with respect to the Notes.

Payments of the principal of, premium, if any, and interest on the Global Note
will be made to DTC or its nominee, as the case may be, as the registered owner
thereof. None of the Issuers, the Trustee nor any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interest.

The Issuers expect that DTC or its nominee, upon receipt of any payment of the
principal of, premium, if any, and interest on the Global Note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Note as
shown on the records of DTC or its nominee. The Issuers also expect that
payments by participants to owners of beneficial interests in any such Global
Note held through such participants will be governed by standing instructions
and customary practice, as is now the case with securities held for the accounts
of customers registered to the names of nominees for such customers. Such
payments will be the responsibility of such participants.

Transfers between participants in DTC will be effected in the ordinary way in
accordance with DTC rules and will be settled in same day funds. The laws of
some states may require that certain purchases of securities take physical
delivery of such securities in certificated form. Such laws may impair the
ability to own, transfer or pledge beneficial interests in a Global Note. If a
holder requires physical delivery of a certificated note for any reason,
including to sell Notes to persons in states which require physical delivery of
such securities or to pledge such securities, such holder must transfer its
interest in the applicable Global Note in accordance with the normal procedures
of DTC and, with respect to the Notes, with the procedures set forth in the
Indenture.

DTC has advised the Issuers that it will take any action permitted to be taken
by a holder of Notes only at the direction of one or more participants to whose
account interests in the Global Note are credited and only in respect of such
portion of the aggregate principal amount of Notes as to which such participant
or participants has or have given such direction. However, if there is an Event
of Default under the Indenture, DTC will exchange the Global Note for
certificated notes representing the Notes, which it will distribute to its
participants.

DTC has advised the Issuers as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code and a "Clearing Agency" registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created
to hold securities for its participants and facilitate the clearance and
settlement of securities transactions between participants through electronic
book-entry changes in accounts of its participants, thereby eliminating the need
for physical movement of certificates. Participants include securities brokers
and dealers, banks, trust companies and clearing corporations and certain other
organizations. Indirect access to the DTC system is available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly
("indirect participants").

Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Note among participants of DTC, it is under
no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither the Issuers nor the Trustee will have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.

CERTIFICATED NOTES

If DTC is at any time unwilling or unable to continue as a depositary for any
Global Note and a successor depositary is not appointed by the Issuers within 30
days, certificated notes will be issued in exchange for Global Notes.

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CERTAIN DEFINITIONS

Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.

"Acquired Indebtedness" means Indebtedness of a Person (a) assumed in connection
with an Asset Acquisition from such Person or (b) existing at the time such
Person becomes a Restricted Subsidiary.

"Acquired Person" means, with respect to any specified Person, any other Person
which merges with or into or becomes a Subsidiary of such specified Person.

"Advisory Committee" means the Advisory Committee of the General Partner
established pursuant to the provisions of Article VI of the First Amended and
Restated Agreement of Limited Partnership of the General Partner, as amended to
the date of issuance of the Notes.

"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

"Asset Acquisition" means (i) any capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) by the Company or any Restricted
Subsidiary in any other Person, or any acquisition or purchase of Equity
Interests of any other Person by the Company or any Restricted Subsidiary, in
either case pursuant to which such Person shall become a Restricted Subsidiary
or shall be consolidated, merged with or into the Company or any Restricted
Subsidiary or (ii) any acquisition by the Company or any Restricted Subsidiary
of the assets of any Person which constitute substantially all of an operating
unit or line of business of such Person or which is otherwise outside of the
ordinary course of business.

"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
(that has the effect of a disposition) or other disposition (including, without
limitation, any merger, consolidation or sale-leaseback transaction) to any
Person other than the Company or a Wholly Owned Restricted Subsidiary, in one
transaction or a series of related transactions, of (i) any Equity Interest of
any Restricted Subsidiary, (ii) any material license, franchise or other
authorization of the Company or any Restricted Subsidiary, (iii) any assets of
the Company or any Restricted Subsidiary which constitute substantially all of
an operating unit or line of business of the Company or any Restricted
Subsidiary or (iv) any other property or asset of the Company or any Restricted
Subsidiary outside of the ordinary course of business. For the purposes of this
definition, the term "Asset Sale" shall not include (i) any transaction
consummated in compliance with "--Merger, Sale of Assets, etc." above and the
creation of any Lien not prohibited by the provisions described under
"--Covenants--Limitation on Liens" above, (ii) sales of property or equipment
that have become worn out, obsolete or damaged or otherwise unsuitable for use
in connection with the business of the Company or any Restricted Subsidiary, as
the case may be, and (iii) any transaction consummated in compliance with
"--Covenants--Limitation on Restricted Payments" above. In addition, solely for
purposes of "--Covenants--Disposition of Proceeds of Asset Sales" above, any
sale, conveyance, transfer, lease or other disposition of any property or asset,
whether in one transaction or a series of related transactions involving assets
with a Fair Market Value not in excess of $ individually or $ in any
fiscal year shall be deemed not to be an Asset Sale.

"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.

"Board of Directors" means (i) in the case of a Person that is a partnership,
the board of directors of such Person's corporate general partner (or if such
general partner is itself a partnership, the board of directors of such general
partner's corporate general partner), (ii) in the case of a Person that is a
corporation, the board of directors of such Person and (iii) in the case of any
other Person, the board of directors, management committee or similar governing
body or any authorized committee thereof responsible for the management of the
business and affairs of such

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Person. By way of illustration, as of the date of the Indenture, any reference
herein to the Board of Directors of any of the Company, FVP or FVP GP means the
board of directors of FV Inc.

"Capitalized Lease Obligation" means, with respect to any Person for any period,
an obligation of such Person to pay rent or other amounts under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of such obligation shall be the capitalized amount shown on
the balance sheet of such Person as determined in accordance with GAAP.

"Cash Equivalents" means (i) any security, maturing not more than six months
after the date of acquisition, issued by the United States of America or an
instrumentality or agency thereof and guaranteed fully as to principal, premium,
if any, and interest by the United States of America, (ii) any certificate of
deposit, time deposit, money market account or bankers' acceptance maturing not
more than six months after the date of acquisition issued by any commercial
banking institution that is a member of the Federal Reserve System and that has
combined capital and surplus and undivided profits of not less than $500.0
million, whose debt has a rating, at the time as of which any investment therein
is made, of "P-1" (or higher) according to Moody's Investors Service, Inc. or
any successor rating agency, or "A-1" (or higher) according to Standard & Poor's
Rating Services, a division of the McGraw-Hill Companies, Inc. or any successor
rating agency and (iii) commercial paper maturing not more than three months
after the date of acquisition issued by any corporation (other than an Affiliate
of the Company) organized and existing under the laws of the United States of
America with a rating, at the time as of which any investment therein is made,
of "P-1" (or higher) according to Moody's Investors Service, Inc. or any
successor rating agency, or "A-1" (or higher) according to Standard & Poor's
Rating Services, a division of the McGraw-Hill Companies, Inc., or any successor
rating agency.

"Change of Control" means the occurrence of any of the following events: (a) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Permitted Holders, is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 50%
or more of the total voting power of the outstanding Voting Equity Interests of
the Company, the General Partner, FVP GP or FV Inc., as the case may be; (b) the
Company, the General Partner, FVP GP or FV Inc., as the case may be,
consolidates with, or merges with or into, another Person or sells, assigns,
conveys, transfers, leases or otherwise disposes of all or substantially all of
its assets to any Person, or any Person consolidates with, or merges with or
into, the Company, the General Partner, FVP GP or FV Inc., as the case may be,
in any such event pursuant to a transaction in which the outstanding Voting
Equity Interests of the Company, the General Partner, FVP GP or FV Inc., as the
case may be, are converted into or exchanged for cash, securities or other
property, other than any such transaction where the outstanding Voting Equity
Interests of the Company, the General Partner, FVP GP or FV Inc., as the case
may be, are converted into or exchanged for Voting Equity Interests (other than
Disqualified Equity Interests) of the surviving or transferee Person and,
immediately after such transaction, the Permitted Holders or the holders of the
Voting Equity Interests of the Company, the General Partner, FVP GP or FV Inc.,
as the case may be, immediately prior thereto own, directly or indirectly, more
than 50% of the total voting power of the outstanding Voting Equity Interests of
the surviving or transferee Person; (c) during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company, the General Partner, FVP GP or FV Inc., as the case
may be (together with any new directors whose election to such Board of
Directors was approved by the Permitted Holders or by a vote of at least a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved), cease for any reason (other than by action of the
Permitted Holders) to constitute a majority of the Board of Directors of the
Company, the General Partner, FVP GP or FV Inc., as the case may be, then in
office in any such case in connection with any actual or threatened solicitation
to which Rule 14a-11 of Regulation 14A promulgated under the Exchange Act
applies or other actual or threatened solicitation of proxies or consents; (d)
any Person or Persons other than Permitted Holders is or becomes entitled to
appoint or designate more than 25% of the members of the Advisory Committee; or
(e) the admission of any Person as a general partner of the Company, the General
Partner or FVP GP, as the case may be, after which the General Partner, FVP GP
or FV Inc., as the case may be, does not have the sole power to take all of the
actions it is entitled or required to take under the limited partnership
agreement of the Company, the General Partner or FVP GP, as the case may be, as
in

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effect on the Issue Date; provided, however, that a Change of Control will be
deemed not to have occurred in any of the foregoing circumstances (i) with
respect to FV Inc. (either in its own capacity or in its capacity as a direct or
indirect corporate general partner of any other Person), (ii) with respect to or
as a result of the conversion of the general partnership interest of FVP GP in
the General Partner into a limited partnership interest, or (iii) with respect
to the events in clause (e) if the change, event or condition giving rise
thereto has been approved by the Permitted Holders holding a majority in
interest of the total outstanding Equity Interests of the General Partner held
by the Permitted Holders.

"Consolidated Income Tax Expense" means, with respect to the Company for any
period, the provision for federal, state, local and foreign income taxes payable
by the Company and the Restricted Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP.

"Consolidated Interest Expense" means, with respect to the Company for any
period, without duplication, the sum of (i) the interest expense of the Company
and the Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Interest Rate Protection
Obligations (including any amortization of discounts), (c) the interest portion
of any deferred payment obligation, (d) all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and (e) all capitalized interest and all accrued interest, (ii) the
interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by the Company and the Restricted Subsidiaries
during such period as determined on a consolidated basis in accordance with GAAP
and (iii) dividends and distributions in respect of Disqualified Equity
Interests actually paid in cash by the Company during such period as determined
on a consolidated basis in accordance with GAAP.

"Consolidated Net Income" means, with respect to any period, the net income of
the Company and the Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, adjusted, to the extent included in
calculating such net income, by excluding, without duplication, (i) all
extraordinary gains or losses and all gains and losses from the sales or other
dispositions of assets out of the ordinary course of business (net of taxes,
fees and expenses relating to the transaction giving rise thereto) for such
period, (ii) that portion of such net income derived from or in respect of
investments in Persons other than Restricted Subsidiaries, except to the extent
actually received in cash by the Company or any Restricted Subsidiary (subject,
in the case of any Restricted Subsidiary, to the provisions of clause (v) of
this definition), (iii) the portion of such net income (or loss) allocable to
minority interests in unconsolidated Persons for such period, except to the
extent actually received in cash by the Company or any Restricted Subsidiary
(subject, in the case of any Restricted Subsidiary, to the provisions of clause
(v) of this definition), (iv) net income (or loss) of any other Person combined
with the Company or any Restricted Subsidiary on a "pooling of interests" basis
attributable to any period prior to the date of combination and (v) the net
income of any Restricted Subsidiary to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is not at the time (regardless of any waiver) permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulations applicable to that
Restricted Subsidiary or its Equity Interest holders.

"Consolidated Net Worth" with respect to any Person means the equity of the
holders of Qualified Equity Interests of such Person and its Restricted
Subsidiaries, as reflected in a balance sheet of such Person determined on a
consolidated basis and in accordance with GAAP.

"Consolidated Operating Cash Flow" means, with respect to any period,
Consolidated Net Income for such period increased (without duplication) by the
sum of (i) Consolidated Income Tax Expense accrued according to GAAP for such
period to the extent deducted in determining Consolidated Net Income for such
period, (ii) Consolidated Interest Expense (other than dividends on Preferred
Equity Interests) for such period to the extent deducted in determining
Consolidated Net Income for such period, and (iii) depreciation, amortization
and any other non-cash items for such period to the extent deducted in
determining Consolidated Net Income for such period (other than any non-cash
item which requires the accrual of, or a reserve for, cash charges for any
future period) of the Company and the Restricted Subsidiaries, including,
without limitation, amortization of capitalized debt issuance costs for such
period, all of the foregoing determined on a consolidated basis in accordance
with GAAP minus non-

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cash items to the extent they increase Consolidated Net Income (including the
partial or entire reversal of reserves taken in prior periods) for such period.

"Cumulative Available Cash Flow" means, as at any date of determination, the
positive cumulative Consolidated Operating Cash Flow realized during the period
commencing on the Issue Date and ending on the last day of the most recent
fiscal quarter immediately preceding the date of determination for which
consolidated financial information of the Company is available or, if such
cumulative Consolidated Operating Cash Flow for such period is negative, the
negative amount by which cumulative Consolidated Operating Cash Flow is less
than zero.

"Debt to Operating Cash Flow Ratio" means the ratio of (i) the Total
Consolidated Indebtedness as of the date of calculation (the "Determination
Date") to (ii) four times the Consolidated Operating Cash Flow for the latest
fiscal quarter for which financial information is available immediately
preceding such Determination Date (the "Measurement Period"). For purposes of
calculating Consolidated Operating Cash Flow for the Measurement Period
immediately prior to the relevant Determination Date, (I) any Person that is a
Restricted Subsidiary on the Determination Date (or would become a Restricted
Subsidiary on such Determination Date in connection with the transaction that
requires the determination of such Consolidated Operating Cash Flow) will be
deemed to have been a Restricted Subsidiary at all times during such Measurement
Period, (II) any Person that is not a Restricted Subsidiary on such
Determination Date (or would cease to be a Restricted Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed not to
have been a Restricted Subsidiary at any time during such Measurement Period,
and (III) if the Company or any Restricted Subsidiary shall have in any manner
(x) acquired (including through an Asset Acquisition or the commencement of
activities constituting such operating business) or (y) disposed of (including
by way of an Asset Sale or the termination or discontinuance of activities
constituting such operating business) any operating business during such
Measurement Period or after the end of such period and on or prior to such
Determination Date, such calculation will be made on a pro forma basis in
accordance with GAAP as if, in the case of an Asset Acquisition or the
commencement of activities constituting such operating business, all such
transactions had been consummated on the first day of such Measurement Period
and, in the case of an Asset Sale or termination or discontinuance of activities
constituting such operating business, all such transactions had been consummated
prior to the first day of such Measurement Period; provided, however, that such
pro forma adjustment shall not give effect to the Operating Cash Flow of any
Acquired Person to the extent that such Person's net income would be excluded
pursuant to clause (v) of the definition of Consolidated Net Income.

"Default" means any event that is or with the passing of time or giving of
notice or both would be an Event of Default.

"Designated Senior Indebtedness" means (i) any Indebtedness outstanding under
the Senior Credit Facility and (ii) any other Senior Indebtedness which, at the
time of determination, has an aggregate principal amount outstanding, together
with any commitments to lend additional amounts, of at least $25.0 million.

"Designation" has the meaning set forth under "--Covenants--Designation of
Unrestricted Subsidiaries" above.

"Designation Amount" has the meaning set forth under "--Covenants--Designation
of Unrestricted Subsidiaries" above.

"Disposition" means, with respect to any Person, any merger, consolidation or
other business combination involving such Person (whether or not such Person is
the Surviving Person) or the sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of such Person's assets.

"Disqualified Equity Interest" means any Equity Interest which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable, at the option of the holder thereof, in
whole or in part, or exchangeable into Indebtedness on or prior to the earlier
of the maturity date of the Notes or the date on which no Notes remain
outstanding.

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including partnership interests, whether general or limited, in such Person,
including any Preferred Equity Interests.

"Equity Market Capitalization" of any Person, means the aggregate market value
of the outstanding Equity Interests (other than Preferred Equity Interests and
excluding any such Equity Interests held in treasury by such Person) of such
Person of a class that is listed or admitted to unlisted trading privileges on a
United States national securities exchange or included for trading on the Nasdaq
National Market System. For purposes of this definition the "market value" of
any such Equity Interest shall be the average of the high and low sale prices,
or if no sales are reported, the average of the closing bid and ask prices, as
reported in the composite transactions of the principal national securities
exchange on which such Equity Interests are listed or admitted to trading or, if
such Equity Interests are not listed or admitted to trading on a national
securities exchange, as reported by Nasdaq, for each trading day in a 20
consecutive trading day period ending not more than 45 days prior to the date
such Person commits to make an investment in the Equity Interests of the
Company.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission thereunder.

"Fair Market Value" means, with respect to any asset, the price (after taking
into account any liabilities relating to such assets) which could be negotiated
in an arm's-length free market transaction, for cash, between a willing seller
and a willing and able buyer, neither of which is under pressure or compulsion
to complete the transaction; provided, however, that the Fair Market Value of
any such asset or assets shall be determined by the Board of Directors of FV
Inc., acting in good faith and shall be evidenced by resolutions of the Board of
Directors of FV Inc. delivered to the Trustee.

"FV Inc." means FrontierVision Inc., a Delaware corporation.

"FVP GP" means FVP GP, L.P., a Delaware limited partnership.

"GAAP" means, at any date of determination, generally accepted accounting
principles in effect in the United States which are applicable at the date of
determination and which are consistently applied for all applicable periods.

"General Partner" means FrontierVision Partners, L.P., a Delaware limited
partnership.

"guarantee" means, as applied to any obligation, (i) a guarantee (other than by
endorsement of negotiable instruments for collection in the ordinary course of
business), direct or indirect, in any manner, of any part or all of such
obligation and (ii) an agreement, direct or indirect, contingent or otherwise,
the practical effect of which is to assure in any way the payment or performance
(or payment of damages in the event of non-performance) of all or any part of
such obligation, including, without limiting the foregoing, the payment of
amounts drawn down by letters of credit. A guarantee shall include, without
limitation, any agreement to maintain or preserve any other Person's financial
condition or to cause any other Person to achieve certain levels of operating
results.

"Guarantor Senior Indebtedness" means, with respect to any Subsidiary Guarantor,
at any date, (i) all Obligations of such Subsidiary Guarantor under the Senior
Credit Facility, (ii) all Interest Rate Protection Obligations of such
Subsidiary Guarantor, (iii) all Obligations of such Subsidiary Guarantor under
stand-by letters of credit and (iv) all other Indebtedness of such Subsidiary
Guarantor for borrowed money, including principal, premium, if any, and interest
(including Post-Petition Interest) on such Indebtedness, unless the instrument
under which such Indebtedness of such Subsidiary Guarantor for money borrowed is
Incurred expressly provides that such Indebtedness for money borrowed is not
senior or superior in right of payment to such Subsidiary Guarantor's Subsidiary
Guarantee, and all renewals, extensions, modifications, amendments or
refinancings thereof. Notwithstanding the foregoing, Guarantor Senior
Indebtedness shall not include (i) to the extent that it may constitute
Indebtedness, any Obligation for federal, state, local or other taxes, (ii) any
Indebtedness among or between such Subsidiary Guarantor and the Company or any
Subsidiary of such Subsidiary Guarantor or the Company, (iii) to the extent that
it may constitute Indebtedness, any Obligation in respect of any trade payable
Incurred for the purchase of goods or materials, or for services obtained, in
the ordinary course of business, (iv) that portion of any Indebtedness that is
Incurred in violation of the Indenture; provided, however, that such
Indebtedness shall be deemed not to have been Incurred in violation of the
Indenture for purposes of this clause (iv) if (I) the holder(s) of such
Indebtedness or their representative or such Subsidiary Guarantor shall have
furnished to the Trustee an opinion of independent

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legal counsel, unqualified in all material respects, addressed to the Trustee
(which legal counsel may, as to matters of fact, rely upon an officers'
certificate of such Subsidiary Guarantor) to the effect that the Incurrence of
such Indebtedness does not violate the provisions of the Indenture or (II) in
the case of any Obligations under the Senior Credit Facility, the holder(s) of
such Obligations or their agent or representative shall have received a
representation from such Subsidiary Guarantor to the effect that the Incurrence
of such Indebtedness does not violate the provisions of the Indenture, (v)
Indebtedness evidenced by the Subsidiary Guarantee, (vi) Indebtedness of such
Subsidiary Guarantor that is expressly subordinate or junior in right of payment
to any other Indebtedness of such Subsidiary Guarantor, (vii) to the extent that
it may constitute Indebtedness, any obligation owing under leases (other than
Capitalized Lease Obligations) or management agreements and (viii) any
obligation that by operation of law is subordinate to any general unsecured
obligations of such Subsidiary Guarantor.

"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of any Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary
(or is merged into or consolidates with the Company or any Restricted
Subsidiary), whether or not such Indebtedness was incurred in connection with,
or in contemplation of, such Person becoming a Restricted Subsidiary (or being
merged into or consolidated with the Company or any Restricted Subsidiary),
shall be deemed Incurred at the time any such Person becomes a Restricted
Subsidiary or merges into or consolidates with the Company or any Restricted
Subsidiary.

"Indebtedness" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations Incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable incurred in the ordinary course of
business and payable in accordance with industry practices, or other accrued
liabilities arising in the ordinary course of business which are not overdue or
which are being contested in good faith), (v) every Capitalized Lease Obligation
of such Person, (vi) every net obligation under interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements of such
Person, (vii) every obligation of the type referred to in clauses (i) through
(vi) of another Person and all dividends of another Person the payment of which,
in either case, such Person has guaranteed or is responsible or liable for,
directly or indirectly, as obligor, guarantor or otherwise, and (viii) any and
all deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (i) through (vii) above. Indebtedness (i) shall never be
calculated taking into account any cash and cash equivalents held by such
Person, (ii) shall not include obligations of any Person (x) arising from the
honoring by a bank or other financial institution of a check, draft or similar
instrument inadvertently drawn against insufficient funds in the ordinary course
of business, provided that such obligations are extinguished within two Business
Days of their incurrence unless covered by an overdraft line, (y) resulting from
the endorsement of negotiable instruments for collection in the ordinary course
of business and consistent with past business practices and (z) under stand-by
letters of credit to the extent collateralized by cash or Cash Equivalents,
(iii) which provides that an amount less than the principal amount thereof shall
be due upon any declaration of acceleration thereof shall be deemed to be
Incurred or outstanding in an amount equal to the accreted value thereof at the
date of determination, (iv) shall include the liquidation preference and any
mandatory redemption payment obligations in respect of any Disqualified Equity
Interests of the Company or any Restricted Subsidiary and (v) shall not include
obligations under performance bonds, performance guarantees, surety bonds and
appeal bonds, letters of credit or similar obligations, incurred in the ordinary
course of business, including in connection with the requirements of cable
television franchising authorities, and otherwise consistent with industry
practice.

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Company and (ii) which, in the judgment of the Board of Directors of FV Inc., is
otherwise independent and qualified to perform the task for which it is to be
engaged.

"Insolvency or Liquidation Proceeding" means, with respect to any Person, any
liquidation, dissolution or winding up of such Person, or any bankruptcy,
reorganization, insolvency, receivership or similar proceeding with respect to
such Person, whether voluntary or involuntary.

"Interest Rate Protection Obligations" means, with respect to any Person, the
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.

"Investment" means, with respect to any Person, any advance, loan, account
receivable (other than an account receivable arising in the ordinary course of
business), or other extension of credit (including, without limitation, by means
of any guarantee) or any capital contribution to (by means of transfers of
property to others, payments for property or services for the account or use of
others, or otherwise) or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person.

"Issue Date" means the date of original issuance of the Notes under the
Indenture.

"Lien" means any lien, mortgage, charge, security interest, hypothecation,
assignment for security or encumbrances of any kind (including any conditional
sale or capital lease or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest).

"Net Cash Proceeds" means the aggregate proceeds in the form of cash or Cash
Equivalents received by the Company or any Restricted Subsidiary in respect of
any Asset Sale, including all cash or Cash Equivalents received upon any sale,
liquidation or other exchange of proceeds of Asset Sales received in a form
other than cash or Cash Equivalents, net of (i) the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees, and sales commissions) and any relocation expenses Incurred as a
result thereof, (ii) taxes paid or payable as a result thereof (after taking
into account any available tax credits or deductions and any tax sharing
arrangements), (iii) amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale, (iv) amounts deemed, in good faith, appropriate by the Board of
Directors of FV Inc. to be provided as a reserve, in accordance with GAAP,
against any liabilities associated with such assets which are the subject of
such Asset Sale (provided that the amount of any such reserves shall be deemed
to constitute Net Cash Proceeds at the time such reserves shall have been
released or are not otherwise required to be retained as a reserve) and (v) with
respect to Asset Sales by Subsidiaries, the portion of such cash payments
attributable to Persons holding a minority interest in such Subsidiary.

"Obligations" means any principal, interest (including, without limitation,
Post-Petition Interest), penalties, fees, indemnifications, reimbursement
obligations, damages and other liabilities payable under the documentation
governing any Indebtedness.

"Offer to Purchase" means a written offer (the "Offer") sent by or on behalf of
the Company by first class mail, postage prepaid, to each holder at his address
appearing in the register for the Notes on the date of the Offer offering to
purchase up to the principal amount of Notes specified in such Offer at the
purchase price specified in such Offer (as determined pursuant to the
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase, which shall
be not less than 20 Business Days nor more than 60 days after the date of such
Offer and a settlement date (the "Purchase Date") for purchase of Notes to occur
no later than five Business Days after the Expiration Date. The Company shall
notify the Trustee at least 15 Business Days (or such shorter period as is
acceptable to the Trustee) prior to the mailing of the Offer of the Company's
obligation to make an Offer to Purchase, and the Offer shall be mailed by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company. The Offer shall contain all the information required by
applicable law to be included therein. The Offer shall contain all instructions
and materials necessary to enable such holders to tender Notes pursuant to the
Offer to Purchase. The Offer shall also state:

(1) the Section of the Indenture pursuant to which the Offer to Purchase
is being made;

(2) the Expiration Date and the Purchase Date;

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(3) the aggregate principal amount of the outstanding Notes offered to be
purchased by the Company pursuant to the Offer to Purchase (including,
if less than 100%, the manner by which such amount has been determined
pursuant to the Section of the Indenture requiring the Offer to
Purchase) (the "Purchase Amount");

(4) the purchase price to be paid by the Company for each $1,000 aggregate
principal amount of Notes accepted for payment (as specified pursuant
to the Indenture) (the "Purchase Price");

(5) that the holder may tender all or any portion of the Notes registered
in the name of such holder and that any portion of a Note tendered
must be tendered in an integral multiple of $1,000 principal amount;

(6) the place or places where Notes are to be surrendered for tender
pursuant to the Offer to Purchase;

(7) that interest on any Note not tendered or tendered but not purchased
by the Company pursuant to the Offer to Purchase will continue to
accrue;

(8) that on the Purchase Date the Purchase Price will become due and
payable upon each Note being accepted for payment pursuant to the
Offer to Purchase and that interest thereon shall cease to accrue on
and after the Purchase Date;

(9) that each holder electing to tender all or any portion of a Note
pursuant to the Offer to Purchase will be required to surrender such
Note at the place or places specified in the Offer prior to the close
of business on the Expiration Date (such Note being, if the Company or
the Trustee so requires, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the holder thereof or his attorney duly
authorized in writing);

(10) that holders will be entitled to withdraw all or any portion of Notes
tendered if the Company (or its Paying Agent) receives, not later than
the close of business on the fifth Business Day next preceding the
Expiration Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the holder, the principal amount of the Note
the holder tendered, the certificate number of the Note the holder
tendered and a statement that such holder is withdrawing all or a
portion of his tender;

(11) that (a) if Notes in an aggregate principal amount less than or equal
to the Purchase Amount are duly tendered and not withdrawn pursuant to
the Offer to Purchase, the Company shall purchase all such Notes and
(b) if Notes in an aggregate principal amount in excess of the
Purchase Amount are tendered and not withdrawn pursuant to the Offer
to Purchase, the Company shall purchase Notes having an aggregate
principal amount equal to the Purchase Amount on a pro rata basis
(with such adjustments as may be deemed appropriate so that only Notes
in denominations of $1,000 or integral multiples thereof shall be
purchased); and

(12) that in the case of any holder whose Note is purchased only in part,
the Company shall execute and the Trustee shall authenticate and
deliver to the holder of such Note without service charge, a new Note
or Notes, of any authorized denomination as requested by such holder,
in an aggregate principal amount equal to and in exchange for the
unpurchased portion of the Note so tendered.

An Offer to Purchase shall be governed by and effected in accordance with the
provisions above pertaining to any Offer.

"Permitted Holders" means any of (a) the General Partner, FVP GP or FV Inc. for
so long as a majority of the voting power of the Voting Equity Interests of such
Person is beneficially owned by any of the Persons listed in the other clauses
of this definition, (b) James C. Vaughn, the President and Chief Executive
Officer of FV Inc. on the Issue Date, (c) John S. Koo, the Senior Vice President
and Chief Financial Officer of FV Inc. on the Issue Date, (d) any of J.P. Morgan
Investment Corporation, a Delaware corporation, Olympus Cable Corp., a Delaware
corporation, First Union Capital Partners, Inc., a Virginia corporation, and
1818 II Cable Corp., a Delaware corporation, (e) any Person controlling,
controlled by or under common control with any other Person described in clauses
(a) - (d) of this definition and (f) (i) the spouse or children of any Person
named in clause (b) or (c) of this definition and any trust for the benefit of
any such Persons or their respective spouses or children; provided, however,
that with respect to

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any such trust, such Persons have the sole right to direct and control such
trust and any Voting Equity Interest owned by such trust, and (ii) any such
Person's estate, executor, administrator and heirs.

"Permitted Investments" means (a) Cash Equivalents, (b) Investments in prepaid
expenses, negotiable instruments held for collection and lease, utility and
workers' compensation, performance and other similar deposits, (c) loans and
advances to employees made in the ordinary course of business not to exceed $1
million in the aggregate at any one time outstanding, (d) Interest Rate
Protection Obligations, (e) bonds, notes, debentures or other securities
received as a result of Asset Sales permitted under "--Covenants--Disposition of
Proceeds of Asset Sales" above not to exceed 25% of the total consideration for
such Asset Sales, (f) transactions with officers, directors and employees of the
Company, the General Partner, FVP GP, FV Inc. or any Restricted Subsidiary
entered into in ordinary course of business (including compensation or employee
benefit arrangements with any such director or employee) and consistent with
past business practices, (g) Investments existing as of the Issue Date and any
amendment, extension, renewal or modification thereof to the extent that any
such amendment, extension, renewal or modification does not require the Company
or any Restricted Subsidiary to make any additional cash or non-cash payments or
provide additional services in connection therewith, (h) any Investment for
which the sole consideration provided is Qualified Equity Interests of the
Company and (i) any Investment consisting of a guarantee by a Restricted
Subsidiary of Senior Indebtedness or any guarantee permitted under clause (e) of
"Covenants--Limitation on Indebtedness" above.

"Permitted Junior Securities" means any securities of the Company or any other
Person that are (i) equity securities without special covenants or (ii)
subordinated in right of payment to all Senior Indebtedness or Guarantor Senior
Indebtedness, as the case may be, that may at the time be outstanding, to
substantially the same extent as, or to a greater extent than, the Notes are
subordinated as provided in the Indenture, in any event pursuant to a court
order so providing and as to which (a) the rate of interest on such securities
shall not exceed the effective rate of interest on the Notes on the date of the
Indenture, (b) such securities shall not be entitled to the benefits of
covenants or defaults materially more beneficial to the holders of such
securities than those in effect with respect to the Notes on the date of the
Indenture and (c) such securities shall not provide for amortization (including
sinking fund and mandatory prepayment provisions) commencing prior to the date
six months following the final scheduled maturity date of the Senior
Indebtedness or Guarantor Senior Indebtedness, as the case may be, (as modified
by the plan of reorganization or readjustment pursuant to which such securities
are issued).

"Permitted Liens" means (a) Liens on property of a Person existing at the time
such Person is merged into or consolidated with the Company or any Restricted
Subsidiary; provided, however, that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not secure any property or
assets of the Company or any Restricted Subsidiary other than the property or
assets subject to the Liens prior to such merger or consolidation, (b) Liens
imposed by law such as carriers', warehousemen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business which secure payment of
obligations not more than sixty (60) days past due or which are being contested
in good faith and by appropriate proceedings, (c) Liens existing on the Issue
Date, (d) Liens securing only the Notes, (e) Liens in favor of the Company or
any Restricted Subsidiary, (f) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
concluded; provided, however, that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made therefor, (g)
easements, reservation of rights-of-way, restrictions and other similar
easements, licenses, restrictions on the use of properties, or minor
imperfections of title that in the aggregate are not material in amount and do
not in any case materially detract from the properties subject thereto or
interfere with the ordinary conduct of the business of the Company and the
Restricted Subsidiaries, (h) Liens resulting from the deposit of cash or
securities in connection with contracts, tenders or expropriation proceedings,
or to secure workers' compensation, surety or appeal bonds, costs of litigation
when required by law and public and statutory obligations or obligations under
franchise arrangements entered into in the ordinary course of business, (i)
Liens securing Indebtedness consisting of Capitalized Lease Obligations,
Purchase Money Indebtedness, mortgage financings, industrial revenue bonds or
other monetary obligations, in each case Incurred solely for the purpose of
financing all or any part of the purchase price or cost of construction or
installation of assets used in the business of the Company or the Restricted
Subsidiaries, or repairs, additions or improvements to such assets, provided,
however, that (I) such Liens secure Indebtedness in an amount not in excess of
the original purchase price or the original cost of any such assets or

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repair, addition or improvement thereto (plus an amount equal to the reasonable
fees and expenses in connection with the incurrence of such Indebtedness), (II)
such Liens do not extend to any other assets of the Company or the Restricted
Subsidiaries (and, in the case of repair, addition or improvements to any such
assets, such Lien extends only to the assets (and improvements thereto or
thereon) repaired, added to or improved), (III) the Incurrence of such
Indebtedness is permitted by "--Covenants--Limitation on Indebtedness" above and
(IV) such Liens attach within 90 days of such purchase, construction,
installation, repair, addition or improvement, (j) Liens to secure any
refinancings, renewals, extensions, modifications or replacements (collectively,
"refinancing") (or successive refinancings), in whole or in part, of any
Indebtedness secured by Liens referred to in the clauses above so long as such
Lien does not extend to any other property (other than improvements thereto),
and (k) Liens securing letters of credit entered into in the ordinary course of
business and consistent with past business practice.

"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, limited liability
limited partnership, trust, unincorporated organization or government or any
agency or political subdivision thereof.

"Post-Petition Interest" means, with respect to any Indebtedness of any Person,
all interest accrued or accruing on such Indebtedness after the commencement of
any Insolvency or Liquidation Proceeding against such Person in accordance with
and at the contract rate (including, without limitation, any rate applicable
upon default) specified in the agreement or instrument creating, evidencing or
governing such Indebtedness, whether or not, pursuant to applicable law or
otherwise, the claim for such interest is allowed as a claim in such Insolvency
or Liquidation Proceeding.

"Preferred Equity Interest," in any Person, means an Equity Interest of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over Equity
Interests of any other class in such Person.

"Public Equity Offering" means, with respect to any Person, a public offering by
such Person of some or all of its Qualified Equity Interests, the net proceeds
of which (after deducting any underwriting discounts and commissions) exceed
$25.0 million.

"Purchase Money Indebtedness" means Indebtedness of the Company or any
Restricted Subsidiary Incurred for the purpose of financing all or any part of
the purchase price or the cost of construction or improvement of any property,
provided that the aggregate principal amount of such Indebtedness does not
exceed the lesser of the Fair Market Value of such property or such purchase
price or cost.

"Qualified Equity Interest" in any Person means any Equity Interest in such
Person other than any Disqualified Equity Interest.

"Restricted Investment" means any Investment other than a Permitted Investment.

"Restricted Subsidiary" means any Subsidiary of the Company that has not been
designated by the Board of Directors of FV Inc. by a resolution of the Board of
Directors of FV Inc. delivered to the Trustee, as an Unrestricted Subsidiary
pursuant to "--Covenants--Designation of Unrestricted Subsidiaries" above. Any
such designation may be revoked by a resolution of the Board of Directors of FV
Inc. delivered to the Trustee, subject to the provisions of such covenant.

"Senior Credit Facility" means the Amended and Restated Credit Agreement, dated
as of April 9, 1996, between the Company, the lenders named therein, The Chase
Manhattan Bank, as Administrative Agent, J.P. Morgan Securities Inc., as
Syndication Agent, and CIBC Inc., as Managing Agent, including any deferrals,
renewals, extensions, replacements, refinancings or refundings thereof, or
amendments, modifications or supplements thereto and any agreement providing
therefor, whether by or with the same or any other lender, creditor, group of
lenders or group of creditors, and including related notes, guarantee and
security agreements and other instruments and agreements executed in connection
therewith.

"Senior Indebtedness" means, at any date, (i) all Obligations of the Company
under the Senior Credit Facility, (ii) all Interest Rate Protection Obligations
of the Company, (iii) all obligations of the Company under stand-by letters of
credit and (iv) all other Indebtedness of the Company for borrowed money,
including principal, premium, if any,

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and interest (including Post-Petition Interest) on such Indebtedness, unless the
instrument under which such Indebtedness of the Company for money borrowed is
Incurred expressly provides that such Indebtedness for money borrowed is not
senior or superior in right of payment to the Notes, and all renewals,
extensions, modifications, amendments or refinancings thereof. Notwithstanding
the foregoing, Senior Indebtedness shall not include (i) to the extent that it
may constitute Indebtedness, any Obligation for federal, state, local or other
taxes, (ii) any Indebtedness among or between the Company and any Subsidiary of
the Company, (iii) to the extent that it may constitute Indebtedness, any
Obligation in respect of any trade payable Incurred for the purchase of goods or
materials, or for services obtained, in the ordinary course of business, (iv)
that portion of any Indebtedness that is Incurred in violation of the Indenture;
provided, however, that such Indebtedness shall be deemed not to have been
Incurred in violation of the Indenture for purposes of this clause (iv) if (I)
the holder(s) of such Indebtedness or their representative or the Company shall
have furnished to the Trustee an opinion of recognized independent legal
counsel, unqualified in all material respects, addressed to the Trustee (which
legal counsel may, as to matters of fact, rely upon an officers' certificate of
the Company) to the effect that the Incurrence of such Indebtedness does not
violate the provisions of the Indenture or (II) in the case of any Obligations
under the Senior Credit Facility, the holder(s) of such Obligations or their
agent or representative shall have received a representation from the Company to
the effect that the Incurrence of such Indebtedness does not violate the
provisions of the Indenture, (v) Indebtedness evidenced by the Notes, (vi)
Indebtedness of the Company that is expressly subordinate or junior in right of
payment to any other Indebtedness of the Company, (vii) to the extent that it
may constitute Indebtedness, any obligation owing under leases (other than
Capitalized Lease Obligations) or management agreements and (viii) any
obligation that by operation of law is subordinate to any general unsecured
obligations of the Company.

"Significant Restricted Subsidiary" means, at any date of determination, (a) any
Restricted Subsidiary that, together with its Subsidiaries that constitute
Restricted Subsidiaries (i) for the most recent fiscal year of the Company
accounted for more than 10.0% of the consolidated revenues of the Company and
the Restricted Subsidiaries or (ii) as of the end of such fiscal year, owned
more than 10.0% of the consolidated assets of the Company and the Restricted
Subsidiaries, all as set forth on the consolidated financial statements of the
Company and the Restricted Subsidiaries for such year prepared in conformity
with GAAP, and (b) any Restricted Subsidiary which, when aggregated with all
other Restricted Subsidiaries that are not otherwise Significant Restricted
Subsidiaries and as to which any event described in clause (h) of "--Events of
Default" above has occurred, would constitute a Significant Restricted
Subsidiary under clause (a) of this definition.

"Stated Maturity," when used with respect to any Note or any installment of
interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.

"Strategic Equity Investment" means the issuance and sale of Qualified Equity
Interests of the Company for net proceeds to the Company of at least $25.0
million to a Person engaged primarily in the cable television, wireless cable
television, telephone, or interactive television business that has an Equity
Market Capitalization of at least $ million.

"Subordinated Indebtedness" means any Indebtedness of the Company which is
expressly subordinated in right of payment to the Notes.

"Subsidiary" means, with respect to any Person, (i) any corporation of which the
outstanding Voting Equity Interests having at least a majority of the votes
entitled to be cast in the election of directors shall at the time be owned,
directly or indirectly, by such Person, or (ii) any other Person of which at
least a majority of Voting Equity Interests are at the time, directly or
indirectly, owned by such first named Person.

"Subsidiary Guarantee" means any guarantee of the Issuers' obligations under the
Indenture and the Notes issued after the Issue Date pursuant to
"--Covenants--Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries" above.

"Subsidiary Guarantor" means any Subsidiary of the Company that guarantees the
Issuers' obligations under the Indenture and the Notes issued after the Issue
Date pursuant to "--Covenants--Limitation on Guarantees of Indebtedness by
Restricted Subsidiaries" above.

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<PAGE> 105

"Surviving Person" means, with respect to any Person involved in or that makes
any Disposition, the Person formed by or surviving such Disposition or the
Person to which such Disposition is made.

"Total Consolidated Indebtedness" means, as at any date of determination, an
amount equal to the aggregate amount of all Indebtedness and Disqualified Equity
Interests of the Company and the Restricted Subsidiaries outstanding as of such
date of determination.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

"Unrestricted Subsidiary" means any Subsidiary of the Company designated as such
pursuant to the provisions of "--Covenants--Designation of Unrestricted
Subsidiaries" above. Any such designation may be revoked by a resolution of the
Board of Directors of the Company delivered to the Trustee, subject to the
provisions of such covenant.

"Voting Equity Interests" means Equity Interests in a corporation or other
Person with voting power under ordinary circumstances entitling the holders
thereof to elect the Board of Directors or other governing body of such
corporation or Person.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness at
any date, the number of years obtained by dividing (i) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required scheduled payment of principal,
including payment of final maturity, in respect thereof, by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment, by (ii) the then outstanding aggregate principal
amount of such Indebtedness.

"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary all of the
outstanding Voting Equity Interests (other than directors' qualifying shares) of
which are owned, directly or indirectly, by the Company.

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UNDERWRITING

Under the terms and subject to the conditions contained in the Underwriting
Agreement dated , 1996 (the "Underwriting Agreement"), J.P. Morgan
Securities Inc., Chase Securities Inc., CIBC Wood Gundy Securities Corp. and
First Union Capital Markets Corp. (collectively, the "Underwriters") have
severally agreed to purchase from the Issuers, and the Issuers have agreed to
sell to them, severally, the principal amount of Notes set forth opposite their
names below. Under the terms and conditions of the Underwriting Agreement, the
Underwriters are obligated to take and pay for the entire principal amount of
the Notes, if any Notes are purchased.

<TABLE>
<CAPTION>
------------
PRINCIPAL
AMOUNT
------------
<S> <C>
J.P. Morgan Securities Inc. $
Chase Securities Inc.
CIBC Wood Gundy Securities Corp.
First Union Capital Markets Corp.
------------
Total $200,000,000
============
</TABLE>

The Underwriters propose initially to offer the Notes directly to the public at
the price set forth on the cover page of this Prospectus and to certain dealers
at such price less a concession not in excess of % of the principal
amount of the Notes. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of % of the principal amount of the Notes to
certain other dealers. After the initial public offering of the Notes, the
initial public offering price and such concessions may be changed.

The Issuers have agreed to indemnify jointly and severally the Underwriters
against certain liabilities, including liabilities under the Securities Act, or
to contribute to payments that the Underwriters may be required to make in
respect thereof.

There is currently no trading market for the Notes, and the Issuers do not
intend to apply for listing of the Notes on a national securities exchange. The
Issuers have been advised by the Underwriters that the Underwriters currently
intend to make a market in the Notes; however, the Underwriters are not
obligated to do so and may discontinue any such market making at any time
without notice. No assurance can be given as to the development or liquidity of
any trading market for the Notes.

Subject to certain conditions, each of J.P. Morgan Investment Corporation, an
affiliate of J.P. Morgan Securities Inc., and First Union Capital Partners,
Inc., an affiliate of First Union Capital Markets Corp., is entitled to
designate one member of the Advisory Committee of FVP. See "Management--The
Advisory Committee," "Principal Security Holders" and "The Partnership
Agreements." Their respective designees are John W. Watkins and L. Watts
Hamrick, III. Mr. Watkins is Manager and a director of each of J.P. Morgan
Investment Corporation and J.P. Morgan Capital Corporation, which are affiliates
of J.P. Morgan Securities Inc. Mr. Hamrick is Senior Vice President of First
Union Corporation and First Union Capital Partners, Inc., each an affiliate of
First Union Capital Markets Corp.

Certain of the Underwriters or their affiliates have provided investment banking
and other financial services to the Company in the past and may do so in the
future. In addition, affiliates of each of the Underwriters (except for First
Union Capital Markets Corp.) serve as lenders and agents under the Senior Credit
Facility and have received customary fees for acting in such capacities. Each of
such affiliates will receive its proportionate share of any repayment by the
Company of amounts outstanding under the Senior Credit Facility from the
proceeds of the Offering. See "Use of Proceeds" and "Certain Relationships and
Related Transactions."

Because J.P. Morgan Investment Corporation and First Union Capital Partners,
Inc. each beneficially owns in excess of 10% of the partnership interests of the
Company, the underwriting arrangements for the Offering must be made in
compliance with certain requirements of Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc. (the "NASD"). In this regard,
Chase Securities Inc. will act as "qualified independent underwriter" within the
meaning of the NASD's Conduct Rules and is assuming the responsibilities of
acting as a qualified independent underwriter in pricing the Offering and
conducting due diligence.

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<PAGE> 107

Pursuant to the requirements of Rule 2720 of the Conduct Rules of the NASD, the
Underwriters will not confirm sales of the Notes to any accounts over which they
exercise discretionary authority without the prior written approval of the
transaction by the customer.

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<PAGE> 108

LEGAL MATTERS

The validity of the Notes will be passed upon for the Issuers by Dow, Lohnes &
Albertson, PLLC, Washington, D.C. Certain legal matters in connection with the
Notes offered hereby will be passed upon for the Underwriters by Cahill Gordon &
Reindel (a partnership including a professional corporation), New York, New
York.

EXPERTS

The financial statements of FrontierVision Operating Partners, L.P., included
elsewhere in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto. The financial statements referred to above are included in the
Prospectus in reliance upon the authority of said firm as experts in giving said
reports.

The balance sheet of FrontierVision Capital Corporation included elsewhere in
this Prospectus has been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto. The balance
sheet referred to above is included in the Prospectus in reliance upon the
authority of said firm as experts in giving said reports.

The consolidated balance sheet for FrontierVision Partners, L.P. included
elsewhere in this Prospectus has been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto. The balance sheet referred to above is included in the Prospectus in
reliance upon the authority of said firm as experts in giving said reports.

The financial statements for United Video Cablevision, Inc. included elsewhere
in this Prospectus have been audited by Piaker & Lyons, P.C., independent public
accountants, as indicated in their report with respect thereto. The financial
statements referred to above are included in the Prospectus in reliance upon the
authority of said firm as experts in giving said reports.

The financial statements for Ashland and Defiance Clusters included elsewhere in
this Prospectus have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein and elsewhere in the
registration statement and are included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.

The consolidated financial statements for C4 Media Cable Southeast, Limited
Partnership included elsewhere in this Prospectus have been audited by Williams,
Rogers, Lewis & Co., P.C., independent public accountants, as indicated in their
report with respect thereto. The consolidated financial statements referred to
above are included in the Prospectus in reliance upon the authority of said firm
as experts in giving said reports.

The financial statements of Triax Southeast Associates, L.P. included elsewhere
in this Prospectus have been audited by Arthur Andersen LLP, independent
auditors, as stated in their report appearing herein and elsewhere in the
registration statement and are included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.

The financial statements of American Cable Entertainment of Kentucky-Indiana,
Inc. included elsewhere in this Prospectus have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report appearing herein and
elsewhere in the registration statement and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.

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<PAGE> 109

GLOSSARY

The following is a description of certain terms used in this Prospectus.

A LA CARTE -- The purchase of programming services on a per-channel or
per-program basis.

ADDRESSABILITY -- "Addressable" technology permits the cable operator to
activate remotely the cable television services to be delivered to subscribers
who are equipped with addressable converters. With addressable technology, a
cable operator can add to or reduce services provided to a subscriber from the
headend site without dispatching a service technician to the subscriber's home.

BASIC PENETRATION -- Basic subscribers as a percentage of the total number of
homes passed in the system.

BASIC SERVICE -- A package of over-the-air broadcast stations, local access
channels and certain satellite-delivered cable television services (other than
premium services).

BASIC SUBSCRIBER -- A subscriber to a cable or other television distribution
system who receives the basic level of television service and who is usually
charged a flat monthly rate for a number of channels. A home with one or more
television sets connected to a cable system is counted as one basic subscriber.
Bulk accounts are included on a "basic customer equivalent" basis in which the
total monthly bill for the account is divided by the basic monthly charge for a
single outlet in the area.

CABLE PLANT -- A network of coaxial and/or fiber optic cables that transmit
multiple channels carrying videoprogramming, sound and data between a central
facility and an individual customer's television set. Networks may allow one-way
(from a headend to a residence and/or business) or two-way (from a headend to a
residence and/or business with a data return path to the headend) transmission.

CHANNEL CAPACITY -- The number of video programming channels that can be carried
over a communications system.

CLASSIC CABLE TELEVISION SYSTEMS -- Cable television systems that serve
primarily smaller communities where customers generally require cable television
to receive television signals as a result of an inadequate over-the-air
television signal reception due to topography or remoteness of broadcast towers.

CLUSTERING -- A general term used to describe the strategy of operating cable
television systems in a specific geographic region, thus allowing for the
achievement of economies of scale and operating efficiencies in such areas as
system management, marketing and technical functions.

COAXIAL PLANT -- Cable consisting of a central conductor surrounded by and
insulated from another conductor. It is the standard material used in
traditional cable systems. Signals are transmitted through it at different
frequencies, giving greater channel capacity than is possible with twisted pair
copper wire, but less than is possible with optical fiber.

COST-OF-SERVICE -- A general term used to refer to the regulation of prices
charged to a customer. Existing prices are set and price increases are regulated
by allowing a company to earn a reasonable rate of return, as determined by the
regulatory authority.

DENSITY -- A general term used to describe the number of homes passed per mile
of cable plant.

DIGITAL COMPRESSION -- The conversion of the standard analog video signal into a
digital signal, and the compression of that signal so as to facilitate multiple
channel transmission through a single channel's bandwidth.

DIRECT BROADCAST SATELLITE (DBS) -- A service by which packages of
satellite-delivered television programming are transmitted directly to
individual homes, each serviced by a single satellite dish.

ESMR -- Enhanced specialized mobile radio, a wireless telecommunications service
using digital technology to provide enhanced mobile telecommunications services,
including two-way radio dispatch and paging services. ESMR services may be
interconnected with the public switched telephone network.

EXPANDED BASIC SERVICE -- A package of satellite-delivered cable programming
services available only for additional subscription over and above the basic
level of television service.

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<PAGE> 110

FCC -- Federal Communications Commission.

FIBER OPTICS -- Technology that involves sending laser light pulses across glass
strands to transmit digital information; fiber is virtually immune to electrical
interference and most environmental factors that affect copper wiring and
satellite transmissions. Use of fiber optic technology reduces noise on the
cable system, improves signal quality and increases system channel capacity and
reliability.

FIBER OPTIC BACKBONE CABLE -- The principal fiber optic trunk lines for a cable
system which is using a hybrid fiber-coaxial architecture to deliver signals to
customers.

FIBER OPTIC TRUNK LINES -- Cables made of glass fibers through which signals are
transmitted as pulses of light to the distribution portion of the cable
television system which in turn goes to the customer's home. Capacity for a very
large number of channels can be more easily provided.

FIBER-TO-THE-FEEDER -- Network topology/architecture using a combination of
fiber optic cable and coaxial cable transmission lines to deliver signals to
customers. Initially signals are transmitted from the headend on fiber optic
trunk lines into neighborhood nodes and then from the nodes to the end user on a
combination of coaxial cable distribution/feeder and drop lines. The coaxial
feeder and drop lines typically represent the operator's "last mile" of plant to
the end user.

HEADEND -- A collection of hardware, typically including satellite receivers,
modulators, amplifiers and video cassette playback machines, within which
signals are processed and then combined for distribution within the cable
network.

HOMES PASSED -- Homes that can be connected to a cable distribution system
without further extension of the distribution network.

HSD -- Home Satellite Dish Earth Station. A large dish-shaped antenna that is
connected to an individual home in order to receive a wide variety of television
programming signals from a number of satellites.

LONG DISTANCE BACKHAUL -- Utilization of an alternate access network, provided
by a cable system or other carrier, to link long distance telephone calls with a
long distance carrier's network.

MICROWAVE LINKS -- The transmission of voice, video or data using microwave
radio frequencies, generally above 1 GHz, from one location to another.

MMDS -- Multichannel Multipoint Distribution Service. A one-way radio
transmission of programming over microwave frequencies from a fixed station
transmitting to multiple receiving facilities located at fixed points.

MSO -- A term used to describe cable television companies that are "multiple
system operators."

NEW PRODUCT TIERS -- A general term used to describe unregulated cable
television services.

NODES -- An individual point of origination and termination or intersection on
the network, usually where electronics are housed.

OVERBUILD -- The construction of a second cable television system in a franchise
area in which such a system had previously been constructed.

OVER-THE-AIR BROADCAST STATIONS -- A general term used to describe signals
transmitted by local television broadcast stations, including network affiliates
or independent television stations, that can be received directly through the
air by the use of a standard rooftop receiving antenna.

PAY-PER-VIEW -- Payment made for individual movies, programs or events as
opposed to a monthly subscription for a whole channel or group of channels.

PCS -- Personal Communications Services, or PCS, is the name given to a new
generation of cellular-like telecommunications services which are expected to
provide customers new choices in wireless mobile telecommunications using
digital technology for voice and data service compared to traditional analog
technology.

PREMIUM PENETRATION -- Premium service units as a percentage of the total number
of basic service subscribers. A customer may purchase more than one premium
service, each of which is counted as a separate premium service

108
<PAGE> 111

unit. This ratio may be greater than 100% if the average customer subscribes to
more than one premium service unit.

PREMIUM SERVICE -- An individual cable programming service available only for
additional subscription over and above the basic or expanded basic levels of
television service.

PREMIUM UNITS -- The number of subscriptions to premium services which are paid
for on an individual basis.

PRO FORMA ACQUISITION CASH FLOW -- Net income of a system, as of the date of
acquisition of such system, before interest, taxes, depreciation, amortization
and corporate general and administrative expenses.

SMATV -- Satellite Master Antenna Television system. A video programming
delivery system to multiple dwelling units utilizing satellite transmissions.

TELEPHONY -- The provision of telephone service.

TIERS -- Varying levels of cable services consisting of differing combinations
of several over-the-air broadcast and satellite-delivered cable television
programming services.

VIDEO DIALTONE -- A general term used to describe a video programming delivery
system through telephone lines.

109
<PAGE> 112

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FrontierVision Operating Partners, L.P.
Report of Independent Public Accountants......................................... F-3
Balance Sheets as of June 30, 1996 (unaudited) and December 31, 1995............. F-4
Statements of Operations for the six months ended June 30, 1996 and 1995
(unaudited) and for the period from inception (April 17, 1995) through December
31, 1995........................................................................ F-5
Statements of Partner's Capital for the six months ended June 30, 1996
(unaudited) and for the period from inception (April 17, 1995) through December
31, 1995........................................................................ F-6
Statements of Cash Flows for the six months ended June 30, 1996 and 1995
(unaudited) and for the period from inception (April 17, 1995) through December
31, 1995........................................................................ F-7
Notes to Financial Statements.................................................... F-8
FrontierVision Capital Corporation
Report of Independent Public Accountants......................................... F-17
Balance Sheet as of July 26, 1996................................................ F-18
Notes to Balance Sheet........................................................... F-19
FrontierVision Partners, L.P.
Report of Independent Public Accountants......................................... F-20
Consolidated Balance Sheet as of December 31, 1995............................... F-21
Notes to Consolidated Balance Sheet.............................................. F-22
United Video Cablevision, Inc. (Selected Assets Acquired by FVOP)
Independent Auditors' Report..................................................... F-28
Divisional Balance Sheets as of June 30, 1995 (unaudited), November 8, 1995 and
December 31, 1994............................................................... F-29
Statements of Divisional Operations for the six-month period ended June 30, 1995
(unaudited), for the period from January 1, 1995 through November 8, 1995 and
for the years ended December 31, 1994 and 1993.................................. F-30
Statements of Divisional Equity for the period from January 1, 1995 through
November 8, 1995 and for the years ended December 31, 1994 and 1993............. F-31
Statements of Divisional Cash Flows for the six-month period ended June 30, 1995
(unaudited), for the period from January 1, 1995 through November 8, 1995 and
for the years ended December 31, 1994 and 1993.................................. F-32
Notes to Divisional Financial Statements......................................... F-33
Ashland and Defiance Clusters (Selected Assets Acquired From Cox Communications, Inc.
by FVOP) Independent Auditors' Report............................................ F-36
Combined Statements of Net Assets as of December 31, 1995 and December 31,
1994............................................................................ F-37
Combined Statements of Operations for the eleven-month period ended December 31,
1995, for the one-month period ended January 31, 1995 and for the years ended
December 31, 1994 and 1993...................................................... F-38
Statements of Changes in Net Assets for the eleven-month period ended December
31, 1995, for the one-month period ended January 31, 1995 and for the years
ended December 31, 1994 and 1993................................................ F-39
Combined Statements of Cash Flows for the eleven-month period ended December 31,
1995, for the one-month period ended January 31, 1995 and for the years ended
December 31, 1994 and 1993...................................................... F-40
Notes to Combined Financial Statements........................................... F-41
C4 Media Cable Southeast, Limited Partnership
Independent Auditors' Report..................................................... F-48
Consolidated Balance Sheets as of December 31, 1995 and 1994..................... F-49
Consolidated Statements of Loss for the years ended December 31, 1995 and 1994... F-50
Consolidated Statements of Partners' Deficit for the years ended December 31,
1995 and 1994................................................................... F-51
</TABLE>

F-1
<PAGE> 113

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Statements of Cash Flows for the years ended December 31, 1995 and
1994............................................................................ F-52
Notes to Consolidated Financial Statements....................................... F-53
American Cable Entertainment of Kentucky-Indiana, Inc.
Independent Auditors' Report..................................................... F-58
Balance Sheets as of June 30, 1996 (unaudited) and December 31, 1995 and 1994.... F-59
Statements of Operations for the six-month periods ended June 30, 1996 and 1995
(unaudited) and for the years ended December 31, 1995, 1994 and 1993............ F-60
Statements of Shareholders' Deficiency for the six-month period ended June 30,
1996 (unaudited) and for the years ended December 31, 1995, 1994 and 1993....... F-61
Statements of Cash Flows for the six-month periods ended June 30, 1996 and 1995
(unaudited) and for the years ended December 31, 1995, 1994 and 1993............ F-62
Notes to Financial Statements.................................................... F-63
Triax Southeast Associates, L.P.
Report of Independent Public Accountants......................................... F-69
Balance Sheets as of June 30, 1996 (unaudited) and December 31, 1995 and 1994.... F-70
Statements of Operations for the six-month periods ended June 30, 1996 and 1995
(unaudited) and for the years ended December 31, 1995, 1994 and 1993............ F-71
Statements of Partners' Capital for the six-month period ended June 30, 1996
(unaudited) and for the years ended December 31, 1995, 1994 and 1993............ F-72
Statements of Cash Flows for the six-month periods ended June 30, 1996 and 1995
(unaudited) and for the years ended December 31, 1995, 1994 and 1993............ F-73
Notes to Financial Statements.................................................... F-74
</TABLE>

F-2
<PAGE> 114

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To FrontierVision Operating Partners, L.P.:

We have audited the accompanying balance sheet of FrontierVision Operating
Partners, L.P. (a Delaware partnership) as of December 31, 1995, and the related
statements of operations, partners' capital and cash flows for the period from
inception (April 17, 1995 -- see Note 1) through December 31, 1995. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FrontierVision Operating
Partners, L.P. as of December 31, 1995, and the results of its operations and
its cash flows for the period from inception (April 17, 1995 -- see Note 1)
through December 31, 1995, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Denver, Colorado,
April 9, 1996.

F-3
<PAGE> 115

FRONTIERVISION OPERATING PARTNERS, L.P.
BALANCE SHEETS
In Thousands

<TABLE>
<CAPTION>
---------------------------
AS OF AS OF
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
Unaudited
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 1,409 $ 2,650
Accounts receivable, net of allowance for doubtful accounts of
$42 and $40 3,177 358
Receivable from seller 222 1,667
Prepaid expenses and other 904 201
Investment in cable television systems, net:
Property and equipment 120,403 42,917
Franchise costs 103,722 50,184
Covenant not to compete 15,999 --
Subscriber lists 53,106 29,000
Goodwill 12,832 4,094
--------- ----------
Total investment in cable television systems, net 306,062 126,195
--------- ----------
Deferred financing costs, net 5,568 2,853
Earnest money deposits 3,000 9,502
Other, net 169 86
--------- ----------
Total assets $320,511 $143,512
========= ==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 795 $ 1,606
Accrued liabilities 4,351 1,558
Subscriber prepayments and deposits 1,483 362
Accrued interest payable 2,615 420
Debt 217,286 93,159
--------- ----------
Total liabilities 226,530 97,105
--------- ----------
Commitments
Partners' capital:
FrontierVision Partners, L.P. 93,887 46,361
FrontierVision Operating Partners, Inc. 94 46
--------- ----------
Total partners' capital 93,981 46,407
--------- ----------
Total liabilities and partners' capital $320,511 $143,512
========= ==========
</TABLE>

The accompanying notes to financial statements are an integral part of these
balance sheets.

F-4
<PAGE> 116

FRONTIERVISION OPERATING PARTNERS, L.P.
STATEMENTS OF OPERATIONS
In Thousands

The accompanying notes to financial statements are an integral part of these
statements.

F-5
<PAGE> 117

FRONTIERVISION OPERATING PARTNERS, L.P.
STATEMENTS OF PARTNERS' CAPITAL
In Thousands

<TABLE>
<CAPTION>
-----------------------------------------------
FRONTIERVISION
FRONTIERVISION OPERATING
PARTNERS, L.P. PARTNERS, INC.
(GENERAL PARTNER) (LIMITED PARTNER) TOTAL
----------------- ----------------- -------
<S> <C> <C> <C>
BALANCE, AT INCEPTION
(April 17, 1995 -- see Note 1) $ -- $ -- $ --
Capital contributions 49,061 49 49,110
Net loss (2,700) (3) (2,703)
-------- --- -------
BALANCE, DECEMBER 31, 1995 46,361 46 46,407
Capital contributions (Unaudited) 55,811 56 55,867
Net loss (Unaudited) (8,285) (8) (8,293)
-------- --- -------
BALANCE, JUNE 30, 1996 (Unaudited) $(93,887) $94 $93,981
======== === =======
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-6
<PAGE> 118

FRONTIERVISION OPERATING PARTNERS, L.P.
STATEMENTS OF CASH FLOWS
In Thousands

<TABLE>
<CAPTION>
--------------------------------------------------------
FOR THE PERIOD FOR THE PERIOD
FROM INCEPTION FROM INCEPTION
FOR THE SIX (APRIL 17, 1995 -- (APRIL 17, 1995 --
MONTHS ENDED SEE NOTE 1) THROUGH SEE NOTE 1) THROUGH
JUNE 30, JUNE 30, DECEMBER 31,
1996 1995 1995
------------ ------------------- -------------------
Unaudited Unaudited
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (8,293) $(141) $ (2,703)
Adjustments to reconcile net loss to net
cash flows from operating activities
Depreciation and amortization 13,595 -- 2,377
(Increase) decrease in accounts
receivable (988) -- (261)
(Increase) decrease in prepaid expenses
and other (536) -- 75
Increase (decrease) in accounts payable
and accrued liabilities 1,322 -- 1,637
Increase (decrease) in subscriber
prepayments and deposits (129) -- 362
Increase in accrued interest payable 2,195 10 420
---------- ----- ----------
Total adjustments 15,459 10 4,610
---------- ----- ----------
Net cash flows from operating
activities 7,166 (131) 1,907
---------- ----- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for capital expenditures (3,369) -- (573)
Pending acquisition costs (89) -- 0
Earnest money deposits (3,000) -- (9,502)
Acquisition of cable television systems,
including purchased intangibles (178,791) -- (121,270)
---------- ----- ----------
Net cash flows from investing
activities (185,249) -- (131,345)
---------- ----- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt borrowings 124,100 -- 85,900
Payments on capital leases (13) -- --
Increase in deferred financing fees (3,112) -- (2,922)
Partner capital contributions 55,867 131 49,110
---------- ----- ----------
Net cash flows from financing
activities 176,842 131 132,088
---------- ----- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (1,241) -- 2,650
---------- ----- ----------
CASH AND CASH EQUIVALENTS, at beginning of
period 2,650 -- --
---------- ----- ----------
CASH AND CASH EQUIVALENTS, end of period $ 1,409 $ -- $ 2,650
========== ===== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 4,902 $ -- $ 957
========== ===== ==========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-7
<PAGE> 119

FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995
Amounts In Thousands

(1) THE PARTNERSHIP

Organization and Capitalization

FrontierVision Operating Partners, L.P. (the "Partnership") is a Delaware
partnership formed on July 14, 1995 for the purpose of acquiring and operating
cable television systems. As of December 31, 1995, the Partnership had acquired
operating cable television systems in Maine and Ohio (see Note 3). The
Partnership was initially capitalized in November 1995 with approximately $38
from its sole limited partner, FrontierVision Operating Partners, Inc. ("FVOP
Inc."), a Delaware corporation, and approximately $38,300 from its sole general
partner, FrontierVision Partners, L.P. ("FVP"), a Delaware partnership. FVOP
Inc. is a wholly owned subsidiary of FVP. During the period from January 1, 1996
to April 9, 1996, the Partnership received additional capital contributions of
approximately $55,900 from its partners.

Allocation of Profits, Losses and Distributions

Generally, the Partnership agreement provides that profits, losses and
distributions will be allocated to the general partner and the limited partner
pro rata based on capital contributions.

Pre-Acquisition Expenses

The Partnership had no substantive operations of its own until the date of the
acquisitions described in Note 3. However, FVP, which was formed on April 17,
1995, incurred certain general and administrative costs deemed attributable to
FVOP prior to the Partnership's legal formation. Such expenditures have been
reflected in the accompanying financial statements as pre-acquisition expenses
as if the Partnership had incurred those costs directly. In addition, the
accompanying balance sheet as of December 31, 1995 reflects earnest money
deposits paid by FVP on behalf of the Partnership related to planned
acquisitions (see Note 8). All such amounts have been reflected as capital
contributions in the accompanying financial statements.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Revenue Recognition

Revenues are recognized in the period in which the related services are provided
to the subscribers.

Property and Equipment

Property and equipment are stated at cost. Replacements, renewals and
improvements are capitalized and costs for repairs and maintenance are charged
to expense when incurred. The Partnership capitalized a portion of salaries and
overhead related to installation activities of approximately $39 for the period
ended December 31, 1995.

F-8
<PAGE> 120

FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Amounts In Thousands

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Depreciation and amortization are computed using the straight-line method over
the following estimated useful lives:

<TABLE>
<CAPTION>
----------------------------------------
AS OF AS OF
JUNE 30, DECEMBER 31,
1996 1995 LIFE
----------- ------------ ----------
Unaudited
<S> <C> <C> <C>
Property and equipment $127,528 $43,906 5-20 years
Less -- Accumulated depreciation (7,125) (989)
--------- --------
$120,403 $42,917
========= ========
</TABLE>

Franchise Costs, Subscriber Lists and Goodwill

Franchise costs, subscriber lists and goodwill are being amortized using the
straight-line method over the following estimated useful lives:

<TABLE>
<CAPTION>
-------------------------------------
AS OF
AS OF DECEMBER
JUNE 30, 31,
1996 1995 LIFE
----------- ----------- --------
Unaudited
<S> <C> <C> <C>
Franchise costs $107,078 $50,748 15 years
Less -- Accumulated amortization (3,356) (564)
--------- --------
$103,722 $50,184
========= ========
Covenant not to compete $ 16,954 $ -- 5 years
Less -- Accumulated amortization (955) --
--------- --------
$ 15,999 $ --
========= ========
Subscriber lists $ 56,907 $29,707 7 years
Less -- Accumulated amortization (3,801) (707)
--------- --------
$ 53,106 $29,000
========= ========
Goodwill $ 13,182 $ 4,140 15 years
Less -- Accumulated amortization (350) (46)
--------- --------
$ 12,832 $ 4,094
========= ========
</TABLE>

Deferred Financing Costs

Deferred financing costs are being amortized using the effective interest method
over the life of the loans:

<TABLE>
<CAPTION>
---------------------------------------
AS OF AS OF
JUNE 30, DECEMBER 31,
1996 1995 LIFE
----------- ------------ ---------
Unaudited
<S> <C> <C> <C>
Deferred financing costs $5,876 $2,922 1-9 years
Less -- Accumulated amortization (308) (69)
------ ------
$5,568 $2,853
====== ======
</TABLE>

F-9
<PAGE> 121

FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Amounts In Thousands

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents

For purposes of the financial statements, the Partnership considers all highly
liquid investments with original maturities of three months or less to be cash
equivalents.

Income Taxes

No provision has been made for federal, state or local income taxes related to
the Partnership because they are the responsibility of the individual partners.
The principal difference between results reported for financial reporting
purposes and for income tax purposes results from differences in depreciable
lives and amortization methods utilized for tangible and intangible assets.

Interim Financial Statements

The financial statements and related footnote disclosures as of June 30, 1996,
for the six months ended June 30, 1996 and for the period from inception (April
17, 1995) to June 30, 1995 are unaudited. In management's opinion, the unaudited
financial statements as of June 30, 1996 and for the six months ended June 30,
1996 and for the period from inception (April 17, 1995) to June 30, 1995 include
all adjustments necessary for a fair presentation. Such adjustments were of a
normal recurring nature.

New Accounting Principles

The Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121"), which is
required to be adopted by affected companies for fiscal years beginning after
December 15, 1995. SFAS 121 requires that long-lived assets and certain
identifiable intangibles to be held and used by the Company be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Partnership adopted the
principles of this statement on January 1, 1996. The provisions of SFAS 121 did
not have an effect on the Company's reported results of operations or financial
condition through June 30, 1996.

The FASB issued Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" ("SFAS 123"), which is required to be adopted by
affected companies for fiscal years beginning after December 15, 1995. The
Partnership does not believe that the provisions of SFAS 123 will have a
material effect on the Company's reported results of operations.

(3) ACQUISITIONS

On November 9, 1995, the Partnership purchased certain cable television system
assets, primarily in Maine and Ohio, from United Video Cablevision, Inc. ("UVC")
for approximately $113,485 in cash plus a note payable to the seller of $7,200
and the assumption of certain liabilities of the acquired business. The
acquisition was financed with the partner contributions and loans noted above,
together with a portion of a $130,000 credit facility (see Note 5).

F-10
<PAGE> 122

FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Amounts In Thousands

(3) ACQUISITIONS (CONTINUED)
The Partnership has recorded a receivable from UVC related to certain estimated
post closing adjustments to be made to the cash paid to UVC. The purchase price
was allocated to the acquired assets and liabilities as follows:

<TABLE>
<S> <C>
Current assets $ 379
Receivable from seller 1,667
Property, plant and equipment 39,828
Franchise costs 49,785
Subscriber lists 28,139
Goodwill 4,026
--------
Subtotal 123,824
Less -- Current liabilities assumed (1,472)
--------
122,352
Less -- Subordinated promissory note to seller (7,200)
--------
Total cash paid $115,152
========
</TABLE>

On November 21, 1995, the Partnership acquired the net assets of Longfellow
Cable Company, Inc. ("Longfellow") in Maine for approximately $6,118 in cash.
The purchase price was allocated to the acquired assets and liabilities as
follows:

<TABLE>
<S> <C>
Current assets $ 22
Property, plant and equipment 3,505
Franchise costs 963
Subscriber lists 1,568
Goodwill 114
------
Subtotal 6,172
Less -- Current liabilities assumed (54)
------
Total cash paid $6,118
======
</TABLE>

F-11
<PAGE> 123

FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Amounts In Thousands

(3) ACQUISITIONS (CONTINUED)
The Partnership has reported the operating results of its acquired cable systems
from the dates of acquisition. The following table shows the unaudited pro forma
results of operations as if the Partnership had acquired the UVC and Longfellow
properties on January 1, 1995. The fiscal 1995 pre-acquisition results for
Longfellow have not been audited and were provided to the Partnership by the
seller.

<TABLE>
<CAPTION>
-----------------------------------------------------------
PRO FORMA ADJUSTMENTS
-------------------------------- UNAUDITED
HISTORICAL UVC LONGFELLOW PRO FORMA
RESULTS ACQUISITION(A) ACQUISITION(B) RESULTS
---------- -------------- -------------- ---------
Unaudited
<S> <C> <C> <C> <C>
Revenues $ 4,369 $ 25,417 $ 1,470 $ 31,256
Operating, selling, general and administrative
expenses (2,438) (14,393) (1,047) (17,878)
Depreciation and amortization (2,308) (11,829) (585) (14,722)
Pre-acquisition expenses (940) -- -- (940)
------- -------- ------- --------
Operating income (loss) (1,317) (805) (162) (2,284)
Interest and other expense (1,386) (10,681) (336) (12,403)
------- -------- ------- --------
Net loss $(2,703) $ (11,486) $ (498) $(14,687)
======= ======== ======= ========
</TABLE>

- ---------------
(A) Period from January 1, 1995 through November 8, 1995. Includes additional
depreciation and amortization expense of $2,204, as well as additional interest
expense of $6,594 related to the UVC acquisition.
(B) Period from January 1, 1995 through November 20, 1995. Includes additional
depreciation and amortization expense of $207, as well as additional interest
expense of $336 related to the Longfellow acquisition.

(4) COMMITMENTS

The Partnership is committed to annual pole rentals of approximately $1,077 as
of December 31, 1995, to various utilities. These agreements are subject to
termination rights by both parties.

The Partnership leases the land upon which certain of its towers and antennae
are constructed. The annual rental commitments under these leases amount to
approximately $59 as of December 31, 1995.

The Partnership leases office space pursuant to which its commitments under
these leases are approximately $124 per year.

F-12
<PAGE> 124

FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Amounts In Thousands

(5) DEBT

The Partnership's debt was comprised of the following:

<TABLE>
<CAPTION>
------------------------
AS OF AS OF
JUNE 30, DECEMBER 31,
1996 1995
--------- ------------
Unaudited
<S> <C> <C>
Bank Credit Facility --
Revolving credit loan, due June 30, 2004, interest based on
various floating rate options (8.69% on $50,000 and
8.50% on $5,900 at December 31, 1995), payable monthly $ 20,000 $55,900
Term loans, due June 30, 2004, interest based on various
floating rate options (8.69% at December 31, 1995),
payable monthly 190,000 30,000
Subordinated promissory note to seller, due December 31,
2004, with interest as described below 7,200 7,200
Capital lease obligations, monthly payments of $2, including
interest at 9%, due November 1998 86 59
--------- --------
Total debt $217,286 $93,159
========= ========
</TABLE>

The Partnership has entered into a credit agreement with a maximum availability
of $130,000. The Partnership has drawn $30,000 in the form of term loans with
the remainder of $100,000 available as a revolving line of credit, of which
$55,900 had been drawn as of December 31, 1995. Escalating principal payments
are due, quarterly, beginning March 31, 1998 on these term loans. The credit
facility has a termination date of June 30, 2004. The maximum amount available
under the revolving line of credit reduces over time, beginning March 31, 1998.

Under the terms of the credit agreement, the Partnership has a mandatory
prepayment obligation upon any sale of new partnership interests and the sale of
any of its operating systems. Further, beginning with the year ended December
31, 1998, the Partnership is required to make prepayments equal to 50% of its
excess cash flow, as defined in the credit agreement.

The agreement also requires the Partnership to maintain compliance with various
financial covenants including, but not limited to total indebtedness, debt
ratios, interest coverage ratios and earnings before interest, taxes,
depreciation and amortization.

In connection with the revolving credit loan and the term loan, the Partnership
has entered into an interest rate swap agreement, which expires November 15,
1999. Under the terms of the agreement, the Partnership has agreed to pay the
lender interest at a rate of 5.912% on a notional amount totaling $65,000. In
turn, the lender has agreed to pay the Partnership interest on a three-month
maturity basis based upon various available floating rate options on the same
notional amount. The effect of this swap agreement is to convert a portion of
the Partnership's floating rate exposure to a fixed rate facility. Through
December 31, 1995, the Partnership has recognized a reduction in interest
expense of approximately $18 as a result of this agreement.

On April 9, 1996, the Partnership increased its bank credit facility by
$135,000, for a total availability of $265,000. A total of $190,000 of the new
bank credit facility is available as a term loan, with the remainder available
as a revolving credit facility. The revolver and $100,000 of the term loan
matures June 30, 2004. The remaining $90,000 of the term loan matures on June
30, 2005.

F-13
<PAGE> 125

FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Amounts In Thousands

(5) DEBT (CONTINUED)
Partnership's leverage ratio exceeds defined amounts, the interest rate also
increases by 2%. Under the terms of the subordinated promissory note, the
Partnership can prepay the balance at any time.

The debt of the Partnership matures as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 --
-------------------------------------------------------------------
<S> <C>
1996 $ 19
1997 20
1998 5,174
1999 6,872
2000 10,308
Thereafter 70,766
-------
$93,159
=======
</TABLE>

(6) REGULATORY MATTERS

In October 1992, Congress enacted the Cable Television Consumer and Competition
Act of 1992 (the "1992 Cable Act") which greatly expanded federal and local
regulation of the cable television industry. In April 1993, the Federal
Communications Commission ("FCC") adopted comprehensive regulations, effective
September 1, 1993, governing rates charged to subscribers for basic cable and
cable programming services which allowed cable operators to justify regulated
rates in excess of the FCC benchmarks through cost of service showings at both
the franchising authority level for basic service and to the FCC in response to
complaints on rates for cable programming services.

On February 22, 1994, the FCC issued further regulations which modified the
FCC's previous benchmark approach, adopted interim rules to govern cost of
service proceedings initiated by cable operators, and lifted the stay of rate
regulations for small cable systems, which were defined as all systems serving
1,000 or fewer subscribers.

On November 10, 1994, the FCC adopted "going forward" rules that provided cable
operators with the ability to offer new product tiers priced as operators elect,
provided certain limited conditions are met, permit cable operators to add new
channels at reasonable prices to existing cable programming service tiers, and
created an additional option pursuant to which small cable operators may add
channels to cable programming service tiers.

In May 1995, the FCC adopted small company rules that provided small systems
regulatory relief by implementing an abbreviated cost of service rate
calculation method. Using this methodology, for small systems seeking to
establish rates no higher than $1.24 per channel, the rates are deemed to be
reasonable.

In February 1996, the Telecommunications Act of 1996 was enacted which, among
other things, deregulated cable rates for small systems on their programming
tiers.

(7) INCOME TAXES

Income taxes have not been recorded in the accompanying financial statements
because they accrue directly to the partners. Taxable losses reported to the
partners are different from that reported in the accompanying statements of
operations due primarily to differences in depreciation methods and estimated
useful lives under regulations prescribed by the Internal Revenue Service.

F-14
<PAGE> 126

FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Amounts In Thousands

(7) INCOME TAXES (CONTINUED)
A reconciliation between the net loss reported for financial reporting purposes
and the net loss reported for federal income tax purposes is as follows:

<TABLE>
<S> <C>
Net loss for financial reporting purposes $(2,703)
Excess depreciation and amortization recorded for income tax
purposes (192)
Other temporary differences 186
-------
Net loss for federal income tax purposes $(2,709)
======
</TABLE>

(8) FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents approximate their fair value
due to the nature and length of maturity of the investments.

The estimated fair value of the Partnership's debt instruments is based on
borrowing rates that approximate existing rates at December 31, 1995; therefore,
there is no material difference in the fair market value and the carrying value
of such debt instruments.

(9) SUBSEQUENT EVENTS

On February 1, 1996, the Partnership acquired certain cable television assets,
primarily in Virginia and Tennessee, from C4 Media Cable Southeast L.P. ("C4"),
resulting in a cash purchase price of approximately $48,000 and the assumption
of certain related liabilities. As of December 31, 1995, the Partnership had
advanced $2,502 as an earnest money deposit related to this transaction.

On March 29, 1996, the Partnership acquired certain cable television assets,
primarily in Maine, from Americable International Maine, Inc. for approximately
$4,750 in cash and the assumption of certain related liabilities.

On April 9, 1996, the Partnership acquired certain cable television system
assets, primarily in Ohio, from Cox Communications resulting in a cash purchase
price of approximately $136,000 and the assumption of certain related
liabilities. As of December 31, 1995, the Partnership had advanced $7,000 as an
earnest money deposit related to this transaction.

F-15
<PAGE> 127

FRONTIERVISION OPERATING PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Amounts In Thousands

(9) SUBSEQUENT EVENTS (CONTINUED)

The Partnership has reported the operating results of C4 and Cox from the date
of their respective acquisition. The following table shows the unaudited pro
forma results of operations as if the Partnership had acquired C4 and Cox as of
January 1, 1996:

<TABLE>
<CAPTION>
--------------------------------------------------------------
FOR THE SIX
MONTHS ENDED UNAUDITED
JUNE 30, 1996 C4 COX PRO FORMA
HISTORICAL ACQUISITION(A) ACQUISITION(B) RESULTS
------------- -------------- -------------- ---------
Unaudited Unaudited Unaudited
<S> <C> <C> <C> <C>
Revenues $ 27,539 $ 945 $ 6,695 $ 35,179
Operating, selling, general and
administrative expenses (14,933) (646) (3,571) (19,150)
Depreciation and amortization (13,595) (443) (3,941) (17,979)
-------- ----- ------- --------
Operating income (loss) (989) (144) (817) (1,950)
Interest and other expenses (7,304) (831) (1,908) (10,043)
-------- ----- ------- --------
Net loss $ (8,293) $(975) $(2,725) $(11,993)
======== ===== ======= ========
</TABLE>

- ---------------
(A) Period from January 1, 1996 through January 31, 1996. Includes decreased
depreciation and amortization expenses of $20, as well as additional interest
expense of $147.

(B) Period from January 1, 1996 through March 31, 1996. Includes increased
depreciation and amortization expense of $2,897, as well as additional interest
expense of $1,903.

(10) EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT Unaudited

During May, 1996, the Partnership agreed to acquire certain cable television
assets, primarily in Kentucky and Ohio, from Triax Southeast Associates, L.P.
("Triax"), for approximately $85,000 in cash and the assumption of certain
related liabilities. The Triax acquisition is expected to close in the third or
fourth quarter of 1996.

During July 1996, the Partnership agreed to acquire certain cable television
assets, primarily in Kentucky and Ohio, from American Cable Entertainment
("ACE") for approximately $146,000 and the assumption of certain liabilities.
The ACE acquisition is expected to close in the third or fourth quarter of 1996.

In addition, the Partnership has filed a registration statement with respect to
$200,000 of Senior Subordinated Notes due 2006.

F-16
<PAGE> 128

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Shareholder of
FrontierVision Capital Corporation:

We have audited the accompanying balance sheet of FrontierVision Capital
Corporation as of July 26, 1996. This financial statement is the responsibility
of the Company's management. Our responsibility is to express an opinion on this
financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of FrontierVision Capital Corporation
as of July 26, 1996, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Denver, Colorado,

September 5, 1996.

F-17
<PAGE> 129

FRONTIERVISION CAPITAL CORPORATION
BALANCE SHEET
JULY 26, 1996

<TABLE>
<S> <C>
Asset -- Receivable from affiliate for issuance of common stock -- collected
subsequent to balance sheet date................................................... $100
====
Equity -- Common stock, par value $0.01; 1,000 shares authorized; 100 shares issued
and outstanding.................................................................... $100
====
</TABLE>

The accompanying note is an integral part of this balance sheet.

F-18
<PAGE> 130

FRONTIERVISION CAPITAL CORPORATION
NOTE TO THE BALANCE SHEET
JULY 26, 1996

FrontierVision Capital Corporation (the "Company"), a Delaware corporation, is a
wholly owned subsidiary of FrontierVision Operating Partners, L.P., and was
organized on July 26, 1996 for the purpose of acting as co-issuer with
FrontierVision Operating Partners, L.P. of $200 million of senior subordinated
notes. The Company has no operations.

F-19
<PAGE> 131

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To FrontierVision Partners, L.P.:

We have audited the accompanying consolidated balance sheet of FrontierVision
Partners, L.P. (a Delaware partnership) and subsidiaries as of December 31,
1995. This financial statement is the responsibility of the Partnership's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material respects, the financial position of FrontierVision
Partners, L.P. and subsidiaries as of December 31, 1995, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Denver, Colorado,

April 9, 1996.

F-20
<PAGE> 132

FRONTIERVISION PARTNERS, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1995
(in thousands)

<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents $ 5,906
Accounts receivable, net of allowance for doubtful accounts of $40 358
Receivable from seller 1,667
Prepaid expenses and other 201
Investment in cable television systems, net
Property and equipment 42,917
Franchise costs 50,184
Subscriber lists 29,000
Goodwill 4,094
--------
Total investment in cable television systems, net 126,195
--------
Deferred financing costs, net 3,787
Organization costs, net 604
Earnest money deposits 9,502
Other, net 86
--------
Total assets $148,306
========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 1,606
Accrued liabilities 1,563
Subscriber prepayments and deposits 362
Accrued interest payable 420
Senior subordinated notes due to partners 4,972
Junior subordinated notes due to partners 33,330
Other debt 93,159
--------
Total liabilities 135,412
--------
Commitments
Partners' capital
General Partner 128
Limited Partners--
Special Class A 9,361
Class A 3,405
--------
Total partners' capital 12,894
--------
Total liabilities and partners' capital $148,306
========
</TABLE>

The accompanying notes to consolidated balance sheet
are an integral part of this consolidated balance sheet.

F-21
<PAGE> 133

FRONTIERVISION PARTNERS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 1995

(In thousands)

(1) THE PARTNERSHIP

Organization and Capitalization:

FrontierVision Partners, L.P. ("FVP" or the "Partnership") is a Delaware limited
partnership formed April 17, 1995, for the purpose of acquiring and operating
cable television systems. The Partnership was capitalized in August 1995 with
approximately $16,600 of limited partner contributions, and approximately $168
from its sole general partner, FVP GP, L.P., a Delaware partnership. FVP's
limited partners include individuals, corporations and partnerships.

FVP's partners have committed to provide debt and equity capital commitments
totaling approximately $123,400. As of December 31, 1995, FVP had received
approximately $54,200 of these commitments. Of the total capital contributed to
FVP by December 31, 1995, approximately $16,800 is in the form of general and
limited partner capital contributions, approximately $32,800 in the form of 14%
junior subordinated notes (the "Junior Notes") and approximately $4,600 in the
form of 12% senior subordinated notes (the 'Senior Notes"). Subsequent to
December 31, 1995, FVP received an additional $58,500 in loans from its
partners, all in the form of Senior Notes.

Under the terms of the FVP partnership agreement, the Partnership has agreed to
issue partnership interests, Senior Notes and Junior Notes to an investment
bank, which is also a limited partner, in an amount equal to 3% of total limited
partner debt and equity commitments as a syndication fee. As of December 31,
1995, the Partnership has credited the capital account of the investment bank
with $390 related to limited partner capital contributions received, and issued
Senior Notes and Junior Notes totaling $866 related to this arrangement. The
amount issued related to the Senior Notes and the Junior Notes is reflected as a
deferred financing cost in the accompanying consolidated financial statements
and the amount issued related to limited partnership interests is reflected as a
partners' capital syndication fee.

Allocation of Profits, Losses and Distributions:

The Partnership may issue Class A, Special Class A, Class B, Special Class B and
Class C limited partnership interests. As of December 31, 1995, the Partnership
had only issued Class A and Special Class A limited partnership interests.

Net losses are allocated to the partners in proportion to their capital
contributions until the limited partners have been allocated amounts equal to
their capital contributions, except no losses shall be allocated to any limited
partner which would cause the limited partner's capital account to become
negative by an amount greater than the limited partner's share of the
Partnership's "minimum gain" (the excess of the Partnership's nonrecourse debt
over its adjusted basis in the assets encumbered by nonrecourse debt).
Thereafter, losses are allocated to the general partner.

Profits are allocated first to the general partner to the extent of its negative
capital account; then to the general and limited partners to the extent of their
capital contributions; then to the general and limited partners until the Class
A and Class B limited partners receive a 12% preferred return on their capital
contributions; thereafter, 85% to the Class A and Class B limited partners and
the general partner in proportion to their capital contributions, 7% to the
general partner (the "General Partner Special Allocation"), and 8% to the
Special Class A and Special Class B limited partners.

Distributions are made first, 99% to the Class A and Class B limited partners
and 1% to the general partner until the Class A and Class B limited partners
have received a return of their contributed capital; second, 99% to the Class A
and Class B limited partners and 1% to the general partner until the Class A and
Class B limited partners receive a 12% preferred annual rate of return on their
capital contributions; thereafter, 85% to the Class A and Class B limited
partners and the general partner in proportion to their capital contributions,
7% to the general partner (the "general partner special allocation") and 8% to
the Special Class A and Special Class B limited

F-22
<PAGE> 134

FRONTIERVISION PARTNERS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET (CONTINUED)

(In thousands)

(1) THE PARTNERSHIP (CONTINUED)

partners. Under the terms of the FVP partnership agreement, the general partner
may issue Class C limited partnership interests to employees of the Partnership
which entitle the holder to receive distributions from the Partnership. However,
in no event shall the Class C limited partners be entitled to receive more than
1% of the aggregate distributions made. The percentage of the aggregate
distributions made to the Class C limited partners shall result in a reduction
to the General Partner's Special Allocation percentage. As of April 9, 1996, the
Partnership had investment commitments from its Class A limited partners
totaling $32,830 and $89,291 from its Special Class A limited partners.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:

The consolidated financial statements include the accounts of the Partnership
and its direct and indirect wholly owned subsidiaries, FrontierVision Operating
Partners, L.P. ("FVOP") and FrontierVision Operating Partners, Inc. ("FVOP
Inc."). All significant intercompany accounts and transactions have been
eliminated in consolidation. FVOP Inc. holds a 0.01% limited partnership
interest in FVOP as its only asset. FVOP owns and operates cable television
properties, primarily in Maine and Ohio.

Basis of Presentation:

New Accounting Principles

Property and Equipment:

Property and equipment are stated at cost. Replacements, renewals and
improvements are capitalized and costs for repairs and maintenance are charged
to expense when incurred. The Partnership capitalized a portion of salaries
related to installation activities of approximately $39 for the period ended
December 31, 1995. Depreciation and amortization are computed using the
straight-line method over the following estimated useful lives;

<TABLE>
<CAPTION>
----------------------
1995 LIFE
------- -----------
<S> <C> <C>
Property and equipment $43,906 5-20 years
Less -- Accumulated depreciation (989)
-------
$42,917
=======
</TABLE>

F-23
<PAGE> 135

FRONTIERVISION PARTNERS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET (CONTINUED)

(In thousands)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Franchise Costs, Subscriber Lists and Goodwill:

Franchise costs, subscriber lists and goodwill are being amortized using the
straight-line method over the following estimated useful lives:

<TABLE>
<CAPTION>
----------------------
1995 LIFE
------- -----------
<S> <C> <C>
Franchise costs $50,748 15 years
Less -- Accumulated amortization (564)
-------
$50,184
=======
Subscriber lists $29,707 7 years
Less -- Accumulated amortization (707)
-------
$29,000
=======
Goodwill $ 4,140 15 years
Less -- Accumulated amortization (46)
-------
$ 4,094
=======

</TABLE>

Deferred Financing Costs and Organization Costs:

Deferred financing costs are being amortized using the effective interest method
over the life of the loans. Organization costs are being amortized using the
straight-line method over five years:

<TABLE>
<CAPTION>
--------------------
1995 LIFE
------ -----------
<S> <C> <C>
Deferred financing costs $3,874 1-9 years
Less -- Accumulated amortization (87)
------
$3,787
======
Organization costs $ 625 5 years
Less -- Accumulated amortization (21)
------
$ 604
======
</TABLE>

Cash and Cash Equivalents:

For purposes of the consolidated financial statements, the Partnership considers
all highly liquid investments with original maturities of three months or less
to be cash equivalents.

(3) ACQUISITIONS

On November 9, 1995, FVOP purchased certain cable television systems assets,
primarily in Maine and Ohio, from United Video Cablevision, Inc. ("UVC") for
approximately $113,485 in cash plus a note payable to the seller of $7,200 and
the assumption of certain liabilities of the acquired business. The acquisition
was financed with the partner contributions and loans noted above, together with
a portion of a $130,000 credit facility (see Note 5). The

F-24
<PAGE> 136

FRONTIERVISION PARTNERS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET (CONTINUED)

(In thousands)

(3) ACQUISITIONS (CONTINUED)

Partnership has recorded a receivable from UVC related to certain estimated
post-closing adjustments to be made to the cash paid to UVC. The purchase price
was allocated to the acquired assets and liabilities as follows:

<TABLE>
<S> <C>
Current assets $ 379
Receivable from seller 1,667
Property, plant and equipment 39,828
Franchise costs 49,785
Subscriber lists 28,139
Goodwill 4,026
--------
Subtotal 123,824
Less -- Current liabilities assumed (1,472)
--------
122,352
Less -- Subordinated promissory note to
seller (7,200)
--------
Total cash paid $115,152
========
</TABLE>

On November 21, 1995, FVOP acquired the net assets of Longfellow Cable Company,
Inc. ("Longfellow") in Maine for approximately $6,118 in cash. The purchase
price was allocated to the acquired assets and liabilities as follows:

(4) COMMITMENTS

The Partnership is committed to annual pole rentals of approximately $1,077 as
of December 31, 1995, to various utilities. These agreements are subject to
termination rights by both parties.

The Partnership leases the land upon which certain of its towers and antennae
are constructed. The annual rental commitments under these leases amount to
approximately $59 as of December 31, 1995.

The Partnership leases office space and its commitments under these leases is
approximately $124 per year.

F-25
<PAGE> 137

FRONTIERVISION PARTNERS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET (CONTINUED)

(In thousands)

(5) DEBT

As of December 31, 1995, the Partnership's debt was comprised of the following:

<TABLE>
<S> <C>
Bank Credit Facility--
Revolving credit loan, due June 30, 2004, interest based on various
floating rate options, payable monthly $ 55,900
Term loans, due June 30, 2004, interest based on various floating
rate options, payable monthly 30,000
Senior subordinated notes 4,972
Junior subordinated notes 33,330
Subordinated promissory note to seller, due December 31, 2004, with
interest as described below 7,200
Capital lease obligations, monthly payments of $1,886, including interest
at 9%, due November 1998 59
--------
$131,461
========
</TABLE>

The Partnership has entered into a credit agreement with a maximum availability
of $130,000 (see Note 6). The Partnership has drawn $30,000 in the form of term
loans with the remainder of $100,000 available as a revolving line of credit, of
which $55,900 had been drawn as of December 31, 1995. Escalating principal
payments are due, on a quarterly basis, beginning March 31, 1998 on these term
loans. The credit facility has a termination date of June 30, 2004. The maximum
amount available under the revolving line of credit reduces over time, beginning
March 31, 1998.

The Senior Notes bear interest at a rate of 12% per annum, compounded annually,
and is payable June 30, 2004. The Junior Notes bear interest at a rate of 14%
per annum, compounded annually, and is payable June 30, 2004. Under the terms of
the Senior Notes and the Junior Notes, no cash interest payments are required.

The subordinated promissory note to seller bears interest at 9% for the first
three years. At the end of each subsequent year, the annual interest rate
increases 2% per year. Under the terms of the subordinated promissory note, the
Partnership may issue additional subordinated promissory notes rather than
making cash interest payments. In this event, the subordinated promissory note
bears interest at 11.5%. Further, in the event the Partnership's leverage ratio
exceeds defined amounts, the interest rate also increases by 2% per year. Under
the terms of the subordinated promissory note, the Partnership can prepay the
balance at any time.

F-26
<PAGE> 138

FRONTIERVISION PARTNERS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET (CONTINUED)

(In thousands)

(5) DEBT (CONTINUED)

The debt of the Partnership matures as follows:

<TABLE>
<S> <C>
Year ended December 31--
1996 $ 19
1997 20
1998 5,174
1999 6,872
2000 10,308
Thereafter 109,068
---------
$131,461
=========
</TABLE>

(6) SUBSEQUENT EVENTS

On February 1, 1996, the Partnership acquired certain cable television system
assets, primarily in Virginia and Tennessee, from C4 Media Cable Southeast, L.P.
for a cash purchase price of approximately $48,000 and the assumption of certain
related liabilities. As of December 31, 1995, the Partnership had advanced an
earnest money deposit of $2,502 related to this transaction.

On March 29, 1996, the Partnership acquired certain cable television system
assets, primarily in Maine, from Americable International Maine, Inc. for
approximately $4,750 in cash and the assumption of certain related liabilities.

On April 9, 1996, the Partnership increased its bank facility by $135,000 for a
total availability of $265,000. A total of $190,000 of the new bank credit
facility is available as a term loan, with the remainder available as a
revolving credit facility. The revolver and $100,000 of the term loan matures
June 30, 2004. The remaining $90,000 of the term loan matures June 30, 2005.

On April 9, 1996, the Partnership acquired certain cable television system
assets, primarily in Ohio, from Cox Communications, Inc. for a cash purchase
price of approximately $136,000 and the assumption of certain related
liabilities. As of December 31, 1995, the Partnership had advanced $7,000 as an
earnest money deposit related to this transaction.

(7) FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents approximate their fair value
due to the nature and length of maturity of the investments.

F-27
<PAGE> 139

INDEPENDENT AUDITORS' REPORT
MAY 7, 1996

To the Board of Directors and Stockholders of
United Video Cablevision, Inc.:

We have audited the accompanying divisional balance sheet of UNITED VIDEO
CABLEVISION, INC. -- MAINE AND OHIO DIVISIONS as of November 8, 1995 and
December 31, 1994 and the related statements of divisional operations, cash
flows and equity for the period of January 1, 1995 through November 8, 1995 and
for the years ended December 31, 1994 and 1993. These financial statements are
the responsibility of the Divisions' management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the divisional financial position of United Video
Cablevision, Inc. -- Maine and Ohio Divisions as of November 8, 1995 and
December 31, 1994, and the results of its divisional operations and its cash
flows for the period ending November 8, 1895, and the years ending December 31,
1994 and 1993 in conformity with generally accepted accounting principles.

PIAKER & LYONS, P.C.

May 7, 1996
Vestal, NY

F-28
<PAGE> 140

UNITED VIDEO CABLEVISION, INC.
MAINE AND OHIO DIVISIONS
DIVISIONAL BALANCE SHEETS

<TABLE>
<CAPTION>
----------------------------
NOVEMBER 8, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 75,100 $ 35,461
------------ ------------
ACCOUNTS RECEIVABLE (1)
Accounts Receivable, Trade 143,673 206,676
Accounts Receivable, Other 25,980 31,034
Less: Allowance for Doubtful Accounts (53,994) (34,928)
------------ ------------
NET ACCOUNTS RECEIVABLE 115,659 202,682
------------ ------------
Prepaid Expenses 165,080 108,045
------------ ------------
TOTAL CURRENT ASSETS 355,839 346,188
PROPERTY, PLANT AND EQUIPMENT -- At Cost
Land 61,556 61,223
Buildings and Improvements 1,586,150 1,570,888
Vehicles 2,608,730 2,282,936
Cable Television Distribution Systems 85,010,454 83,296,885
Office Furniture, Tools and Equipment 1,386,288 1,363,828
Less: Accumulated Depreciation (1) (68,243,467) (59,163,656)
------------ ------------
NET PROPERTY, PLANT AND EQUIPMENT 22,409,711 29,758,104
------------ ------------
INTANGIBLE ASSETS
Franchise Rights 1,994,336 1,984,349
Non Compete Agreements 71,753 71,753
Other Intangible Assets 1,943,836 1,943,836
Less: Accumulated Amortization (1) (2,930,019) (2,550,708)
------------ ------------
NET INTANGIBLE ASSETS 1,079,906 1,449,230
------------ ------------
TOTAL ASSETS $ 23,845,456 $ 31,553,522
=========== ===========
LIABILITIES AND DIVISIONAL EQUITY
LIABILITIES
Accounts Payable $ -- $ 684,264
Subscriber Deposits and Unearned Income 341,263 401,608
Accrued Franchise Fees 424,312 469,578
Accrued Programming Fees 686,599 513,151
Other Accrued Expenses 1,596,134 1,154,024
------------ ------------
TOTAL CURRENT LIABILITIES 3,048,308 3,222,623
DIVISIONAL EQUITY 20,797,148 28,330,899
------------ ------------
TOTAL LIABILITIES AND DIVISIONAL EQUITY $ 23,845,456 $ 31,553,522
=========== ===========
</TABLE>

See the accompanying notes to divisional financial statements.

F-29
<PAGE> 141

UNITED VIDEO CABLEVISION, INC.
MAINE AND OHIO DIVISIONS
STATEMENTS OF DIVISIONAL OPERATIONS

<TABLE>
<CAPTION>
----------------------------------------------------------
PERIOD FROM
FOR THE JANUARY 1,
SIX MONTHS 1995 FOR THE FOR THE
ENDED THROUGH YEAR ENDED YEAR ENDED
JUNE 30, NOVEMBER 8, DECEMBER 31, DECEMBER 31,
1995 1995 1994 1993
----------- ----------- ------------ ------------
Unaudited
<S> <C> <C> <C> <C>
REVENUES (1) $14,663,637 $25,417,064 $27,964,550 $27,917,090
----------- ----------- ------------ ------------
OPERATING EXPENSES
Programming 3,079,560 5,350,664 5,717,160 5,361,127
Plant and Operation 2,157,243 3,741,207 4,185,894 3,902,847
General and Administrative 2,232,284 3,754,474 4,415,919 4,628,442
Marketing and Advertising 204,951 276,712 248,572 409,890
Corporate Overhead (3) 646,217 1,270,072 1,327,127 1,470,702
Depreciation and Amortization (1) 5,408,877 9,625,116 11,225,978 9,960,536
----------- ----------- ------------ ------------
TOTAL EXPENSES 13,729,132 24,018,245 27,120,650 25,733,544
----------- ----------- ------------ ------------
OPERATING INCOME 934,505 1,398,819 843,900 2,183,546
----------- ----------- ------------ ------------
OTHER (INCOME) EXPENSE
Interest Expense (1) 2,503,103 4,086,738 4,892,250 4,960,032
Gain on Sale of Fixed Assets (23,009) (25,034) (33,835) (3,810)
----------- ----------- ------------ ------------
TOTAL OTHER (INCOME) EXPENSE 2,480,094 4,061,704 4,858,415 4,926,222
----------- ----------- ------------ ------------
NET LOSS $(1,545,589) $(2,662,885) $(4,014,515) $(2,742,676)
=========== =========== =========== ===========
</TABLE>

See the accompanying notes to divisional financial statements.

F-30
<PAGE> 142

UNITED VIDEO CABLEVISION, INC.
MAINE AND OHIO DIVISIONS
STATEMENTS OF DIVISIONAL EQUITY

<TABLE>
<CAPTION>
-----------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
BALANCE, JANUARY 1, $28,330,899 $32,700,089 $37,526,944
Net Loss (2,662,885) (4,014,515) (2,742,676)
Payments to Corporate Division, Net (4,870,866) (354,675) (2,084,179)
----------- ----------- -----------
BALANCE, NOVEMBER 8, 1995 $20,797,148
==========
BALANCE, DECEMBER 31, $28,330,899 $32,700,089
========== ==========
</TABLE>

See the accompanying notes to divisional financial statements.

F-31
<PAGE> 143

UNITED VIDEO CABLEVISION, INC.
MAINE AND OHIO DIVISIONS
STATEMENTS OF DIVISIONAL CASH FLOWS

<TABLE>
<CAPTION>
---------------------------------------------------------
PERIOD FROM
FOR THE JANUARY 1,
SIX MONTHS 1995 FOR THE FOR THE
ENDED THROUGH YEAR ENDED YEAR ENDED
JUNE 30, NOVEMBER 8, DECEMBER 31, DECEMBER 31,
1995 1995 1994 1993
----------- ----------- ------------ ------------
Unaudited
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
OPERATING ACTIVITIES
Net Loss $(1,545,616) $(2,662,885) $(4,014,515) $(2,742,676)
----------- ----------- ------------ ------------
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY OPERATIONS:
Depreciation 5,187,107 9,245,805 10,771,263 9,497,062
Amortization of Intangibles 221,770 379,311 454,715 463,474
Allowance for Doubtful Accounts -- 19,066 6,124 (3,007)
Gain on Sale of Assets 23,009 (25,034) (33,835) (33,810)
CHANGES IN OPERATING ASSETS AND LIABILITIES,
NET OF EFFECTS FROM ACQUISITION OF CORPORATE
ENTITIES:
Accounts Receivable and Other Receivables 131,341 67,957 (132,182) 122,248
Prepaid Expenses (201,024) (57,035) 13,897 (158,603)
Accounts Payable and Accrued Expenses (621,915) (113,972) (846,244) (52,046)
Subscriber Deposits and Unearned Income (41,804) (60,343) (45,895) (72,253)
----------- ----------- ------------ ------------
TOTAL ADJUSTMENTS 4,698,484 9,455,755 10,187,843 9,762,995
----------- ----------- ------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,152,868 6,792,870 6,173,328 7,002,319
----------- ----------- ------------ ------------
INVESTING ACTIVITIES
Purchase of Property, Plant and Equipment 1,112,478 (2,037,144) (5,712,592) (5,024,998)
Acquisition of Intangible Assets -- (9,987) (216,154) (1,928)
Proceeds from Sale of Assets 67,432 164,766 41,789 37,600
----------- ----------- ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (1,045,046) (1,882,365) (5,886,957) (4,989,266)
----------- ----------- ------------ ------------
FINANCING ACTIVITIES
Payments to Corporate Division, Net (1,926,311) (4,870,866) (354,675) (2,084,179)
----------- ----------- ------------ ------------
NET INCREASE (DECREASE) IN CASH EQUIVALENTS 181,511 39,639 (68,304) (53,126)
Cash and Cash Equivalents at Beginning of
Period 35,461 35,461 103,765 156,891
----------- ----------- ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 146,050 $ 75,100 $ 35,461 $ 103,765
=========== =========== ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest Paid $ 2,503,103 $4,086,738 $ 4,892,250 $ 4,960,032
Income Taxes Paid -- -- -- --
</TABLE>

DISCLOSURE OF ACCOUNTING POLICY:

For purposes of the statement of cash flows, the Divisions consider all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.

See the accompanying notes to divisional financial statements.

F-32
<PAGE> 144

UNITED VIDEO CABLEVISION, INC.
MAINE AND OHIO DIVISIONS
NOTES TO DIVISIONAL FINANCIAL STATEMENTS
NOVEMBER 8, 1995

(1) SUMMARY OF SIGNIFICANT ACCOUNTING, POLICIES

Business Activity

The accompanying divisional financial statements include the Maine and Ohio
Divisions of United Video Cablevision, Inc. (the "Divisions"). The Divisions are
engaged in providing cable television programming services to subscribers in
their franchised areas. The Corporate division allocates debt to the operating
divisions based upon the respective acquisition and construction costs relative
to the debt incurred. Accordingly, interest has been allocated to the operating
divisions by the Corporate division in the same manner. For the purpose of the
divisional financial statements, debt has been reflected as division equity in
the accompanying financial statements under the terms of the agreement with
FrontierVision Operating Partners, L.P., as no such debt will be assumed.

Concentrations of Credit Risk

The Divisions' trade receivables are comprised of amounts due from subscribers
in varying regions throughout the states. Concentrations of credit risk with
respect to trade receivables are limited due to the large number of customers
comprising the Divisions' customer base and geographic dispersion.

Revenue Recognition

The Divisions recognize service revenues on the accrual basis in the month in
which the service is to be provided. Payments received in advance are included
in deferred revenue until the month they become due at which time they are
recognized as income.

Capitalization and Depreciation

In accordance with Statement No. #51 of the Financial Accounting Standards
Board, the Divisions have adopted the policy of capitalizing certain expenses
applicable to the construction and operating of a cable television system during
the period while the cable television system is partially under construction and
partially in service. For the period ended November 8, 1995, the total
capitalized costs amounted to $314,347. During 1994 and 1993, the total
capitalized costs amounted to $244,276 and $300,429, respectively.

The Divisions, for financial reporting purposes, provide depreciation on the
straight-line method, which is considered adequate for the recovery of the cost
of the properties over their estimated useful lives. For income tax purposes,
however, the Divisions utilize both accelerated methods and the accelerated cost
recovery system. For the period ended November 8, 1995, the provision for
depreciation in the accompanying statements of operations amounted to
$9,245,805. For the years ended December 31, 1994 and 1993, the provision
amounted to $10,771,263 and $9,497,062, respectively.

F-33
<PAGE> 145

UNITED VIDEO CABLEVISION, INC.
MAINE AND OHIO DIVISIONS
NOTES TO DIVISIONAL FINANCIAL STATEMENTS (CONTINUED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING, POLICIES (CONTINUED)
Depreciation lives for financial statement purposes are as follows:

<TABLE>
<S> <C>
Headend Equipment
Tower 12 Years
Antennae 7 Years
Other Headend Equipment 8 Years
Trunk and Distribution Equipment
Traps, Descramblers, Converters, Decoders 5 Years
Other Trunk and Distribution Equipment 8 Years
Test Equipment 5 Years
Local Origination Equipment 8 Years
Vehicles 3 Years
Furniture and Fixtures 10 Years
Leasehold Improvements 8 Years
Computer and EDP Equipment 5 Years
</TABLE>

Amortization

The Divisions are amortizing various intangible assets acquired and incurred on
a straight-line basis, generally from 5 to 40 years. For the period ended
November 8, 1995, the provision for amortization in the accompanying statements
of operations amounted to $379,311. For the years ended December 31, 1994 and
1993, the provision amounted to $454,715 and $463,474, respectively.

Income Taxes

The Divisions are a part of United Video Cablevision, Inc. which has elected to
be taxed as a small business corporation under "Sub-Chapter S" of the Internal
Revenue Code effective January 1, 1987, wherein the stockholders of United Video
Cablevision, Inc. are taxed on any earnings or losses of the Company.

Bad Debts

The Divisions have adopted the reserve method for recognizing bad debts for
financial statement purposes and continue to utilize the direct write-off method
for tax purposes.

Use of Estimates

Management uses estimates and assumptions in preparing financial statements.
Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses.

(2) COMMITMENTS

The Divisions were committed to annual pole rentals of approximately $823,000 at
November 8, 1995 and $830,000 and $832,000 at December 31, 1994 and 1993,
respectively, to various utilities. These agreements are subject to termination
rights by both parties.

The Divisions lease in various systems the land upon which their towers and
antennae are constructed. The annual rental payments under these leases amounted
to approximately $37,000 at November 8, 1995, approximately $32,000 at December
31, 1994 and approximately $46,000 at December 31, 1993.

F-34
<PAGE> 146

UNITED VIDEO CABLEVISION, INC.
MAINE AND OHIO DIVISIONS
NOTES TO DIVISIONAL FINANCIAL STATEMENTS (CONTINUED)

(3) MANAGEMENT AGREEMENT WITH RELATED PARTY

The Divisions are being provided with certain management and technical services
by a related party by means of a management agreement. For the period ended
November 8, 1995, the allocated billings amounted to $1,270,072, and for the
years ended December 31, 1994 and 1993, billings amounted to $1,327,127 and
$1,470,702, respectively.

(4) SALE OF DIVISIONS

On November 9, 1995, United Video Cablevision, Inc. consummated an agreement by
which it sold substantially all of the net assets and associated current
liabilities in its Maine and Ohio franchise areas (the Divisions) for
approximately $120,500,000. Upon the completion of the transaction, United Video
Cablevision, Inc. realized a gain of approximately $100,000,000.

F-35
<PAGE> 147

INDEPENDENT AUDITORS' REPORT

Cox Communications, Inc.:

We have audited the accompanying combined statements of net assets of the
combined operations of Cox Communications, Inc.'s ("CCI") cable television
systems serving 57 communities in Ashland, Kentucky and Defiance, Ohio
(collectively referred to as the "Ashland and Defiance Clusters" or "Successor")
whose assets and certain liabilities were acquired by FrontierVision Operating
Partners, L.P. on April 9, 1996, as of December 31, 1994 ("Predecessor") and
1995 ("Successor"), and the related combined statements of operations, changes
in net assets, and cash flows for the years ended December 31, 1993 and 1994
(Predecessor), for the one-month period ended January 31, 1995 (Predecessor),
and for the eleven-month period ended December 31, 1995 (Successor). These
financial statements are the responsibility of the Ashland and Defiance
Clusters' management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of the Ashland and
Defiance Clusters at December 31, 1994 (Predecessor) and 1995 (Successor), and
the combined results of its operations and its cash flows for years ended
December 31, 1993 and 1994 (Predecessor), for the one-month period ended January
31, 1995 (Predecessor), and for the eleven-month period ended December 31, 1995
(Successor), in conformity with generally accepted accounting principles.

As discussed in Note 1, effective February 1, 1995, CCI acquired the Ashland and
Defiance Clusters in connection with the acquisition of Times Mirror Cable
Television, Inc.

DELOITTE & TOUCHE LLP

Atlanta, GA
April 10, 1996

F-36
<PAGE> 148

ASHLAND AND DEFIANCE CLUSTERS
COMBINED STATEMENTS OF NET ASSETS
In Thousands

<TABLE>
<CAPTION>
----------------------------
SUCCESSOR PREDECESSOR
------------ ------------
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Cash $188
Accounts Receivable -- Less allowance for doubtful accounts
of $43 and $37 $1,784 1,563
Amounts Due From Affiliate 5,848
Intercompany Income Taxes Receivable 1,182
Net Plant and Equipment 25,621 18,096
Intangible Assets 110,796 51,210
Other Assets 1,149 580
--------- --------
$146,380 $71,637
========= ========
LIABILITIES AND NET ASSETS
Accounts Payable $580 $692
Accrued Expenses 966 915
Intercompany Income Taxes Payable 2,160
Deferred Income 1,355 1,142
Deferred Income Taxes 7,644 3,147
Other Liabilities 146 99
Amounts Due to Affiliate 52,317
--------- --------
Total liabilities 10,691 60,472
NET ASSETS 135,689 11,165
--------- --------
$146,380 $71,637
========= ========
</TABLE>

See notes to combined financial statements.

F-37
<PAGE> 149

ASHLAND AND DEFIANCE CLUSTERS
COMBINED STATEMENTS OF OPERATIONS
In Thousands

<CAPTION>
<S> <C> <C> <C> <C>
REVENUES $24,628 $2,096 $ 25,235 $ 24,679
COSTS AND EXPENSES
OPERATING 8,035 689 7,188 6,773
Selling, general, and administrative 4,919 503 5,507 5,398
Depreciation 5,480 214 3,293 3,413
Amortization 2,727 128 1,830 2,129
-------- ------ ----------- -----------
Total costs and expenses 21,161 1,534 17,818 17,713
-------- ------ ----------- -----------
OPERATING INCOME 3,467 562 7,417 6,966
INTEREST INCOME -- NET 79 434 133
OTHER -- NET (29) (3) (4)
-------- ------ ----------- -----------
INCOME BEFORE INCOME TAXES 3,438 641 7,848 7,095
INCOME TAXES 3,749 248 3,982 3,559
-------- ------ ----------- -----------
NET INCOME (LOSS) $ (311) $ 393 $ 3,866 $ 3,536
======== ====== =========== ===========
</TABLE>

See notes to combined financial statements.

F-38
<PAGE> 150

ASHLAND AND DEFIANCE CLUSTERS
COMBINED STATEMENTS OF CHANGES IN NET ASSETS
In Thousands

<TABLE>
<S> <C>
PREDECESSOR
- ----------------------------------------------------------------------------------
BALANCE, JANUARY 1, 1993 $ 11,303
Net income for the year ended December 31, 1993 3,536
Dividends to Affiliate (1,570)
--------
BALANCE, DECEMBER 31, 1993 13,269
Net income for the year ended December 31, 1994 3,866
Dividends to Affiliate (5,970)
--------
BALANCE, DECEMBER 31, 1994 11,165
Net income for the one month ended January 31, 1995 393
--------
BALANCE, JANUARY 31, 1995 $ 11,558
========
SUCCESSOR
- ----------------------------------------------------------------------------------
FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED FROM
TIMES MIRROR CABLE TELEVISION, INC. ON FEBRUARY 1, 1995 $136,000
Net loss for the eleven months ended December 31, 1995 (311)
--------
BALANCE, DECEMBER 31, 1995 $135,689
========
</TABLE>

See notes to combined financial statements.

F-39
<PAGE> 151

ASHLAND AND DEFIANCE CLUSTERS
COMBINED STATEMENTS OF CASH FLOWS
In Thousands

<TABLE>
<CAPTION>
-----------------------------------------------------------
SUCCESSOR PREDECESSOR
-------------- -----------------------------------------
ELEVEN MONTHS ONE MONTH YEAR ENDED
ENDED ENDED DECEMBER 31,
DECEMBER 31, JANUARY 31, --------------------------
1995 1995 1994 1993
-------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (311) $ 393 $ 3,866 $ 3,536
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 8,207 342 5,123 5,542
Deferred income taxes (142) (70) 298 293
(Increase) decrease in accounts receivable (287) 66 114 (45)
Increase (decrease) in accounts payable and
accrued expenses 467 (360) (214) (92)
Income taxes payable (1,182) 31 1,914 (906)
Other, net 274 45 162 (61)
------- ----- ----------- -----------
Net cash provided by operating activities 7,026 447 11,263 8,267
INVESTING ACTIVITIES:
Capital expenditures (1,362) (65) (3,795) (6,075)
Advances to Affiliate (5,848)
------- ----- ----------- -----------
Net cash used in investing activities (7,210) (65) (3,795) (6,075)
FINANCING ACTIVITIES:
Net change in amounts due to Affiliate (386) (1,466) (580)
Dividends paid (5,970) (1,570)
------- ----- ----------- -----------
Net cash used in financing activities (386) (7,436) (2,150)
------- ----- ----------- -----------
NET INCREASE (DECREASE) IN CASH (184) )(4 32 42
CASH AT BEGINNING OF PERIOD 184 188 156 114
------- ----- ----------- -----------
CASH AT END OF PERIOD $ 184 $ 156
------- ----- ----------- -----------
CASH PAID DURING THE PERIOD FOR:
Interest $ -- $ 79 $ 434 $ 133
------- ----- ----------- -----------
</TABLE>

See notes to combined financial statements.

F-40
<PAGE> 152

ASHLAND AND DEFIANCE CLUSTERS
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993 AND 1994,
ONE MONTH ENDED JANUARY 31, 1995, AND
ELEVEN MONTHS ENDED DECEMBER 31, 1995

(1) ORGANIZATION AND BASIS OF PRESENTATION

These combined financial statements represent the combined operations of Cox
Communications, Inc.'s ("CCI") cable television systems serving 57 communities
in Ashland, Kentucky and Defiance, Ohio (collectively referred to as the
"Ashland and Defiance Clusters") whose assets and certain liabilities were
acquired by FrontierVision Operating Partners, L.P. on April 9, 1996. These
cable television systems were acquired by CCI, a majority owned subsidiary of
Cox Enterprises, Inc. ("CEI"), from The Times Mirror Company ("Times Mirror") in
connection with CCI's acquisition of Times Mirror Cable Television, Inc.
("TMCT") on February 1, 1995. The operations of the Ashland and Defiance
Clusters prior to February 1, 1995 are referred to as "Predecessor" and as
"Successor" after February 1, 1995.

All significant intercompany accounts and transactions have been eliminated in
combination. The acquisition of the Ashland and Defiance Clusters was accounted
for by the purchase method of accounting, whereby the allocable share of the
TMCT purchase price was pushed down to the assets acquired and liabilities
assumed based on their fair values at the date of acquisition as follows
(thousands of dollars):

<TABLE>
<S> <C>
Net working capital $ (2,836)
Plant and equipment 30,022
Deferred taxes related to plant and equipment write-up (4,709)
Intangible Assets 113,523
---------------
$136,000
===============
</TABLE>

The historical combined financial statements do not necessarily reflect the
results of operations or financial position that would have existed had the
Ashland and Defiance Clusters been an independent company.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

The Ashland and Defiance Clusters bill their customers in advance; however,
revenue is recognized as cable television services are provided. Receivables are
generally collected within 30 days. Credit risk is managed by disconnecting
services to customers who are delinquent generally greater than 60 days. Other
revenues are recognized as services are provided. Revenues obtained from the
connection of customers to the cable television systems are less than related
direct selling costs; therefore, such revenues are recognized as received.

Plant and Equipment

Depreciation is computed using principally the straight-line method at rates
based upon estimated useful lives of 5 to 20 years for buildings and building
improvements, 5 to 12 years for cable television systems, and 3 to 10 years for
other plant and equipment.

The costs of initial cable television connections are capitalized as cable plant
at standard rates for the Ashland and Defiance Clusters' labor and at actual
costs for materials and outside labor. Expenditures for maintenance and repairs
are charged to operating expense as incurred. At the time of retirements, sales
or other dispositions of property, the original cost and related accumulated
depreciation are written off.

Intangible Assets

Intangible assets consist primarily of goodwill and franchise costs recorded in
business combinations which is amortized on a straight-line basis over 40 years.
The Ashland and Defiance Clusters assess on an on-going basis the

F-41
<PAGE> 153

ASHLAND AND DEFIANCE CLUSTERS
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
recoverability of intangible assets based on estimates of future undiscounted
cash flows for the applicable business acquired compared to net book value.

Income Taxes

Through January 31, 1995, the accounts of the Ashland and Defiance Clusters were
included in the consolidated federal income tax returns and certain state income
tax returns of Times Mirror. Beginning on February 1, 1995, the accounts of the
Ashland and Defiance Clusters were included in the consolidated federal income
tax returns and certain state income tax returns of CEI. Current federal and
state income tax expenses and benefits are allocated on a separate return basis
to the Ashland and Defiance Clusters based on the current year tax effects of
the inclusion of their income, expenses, and credits in the consolidated income
tax returns of Times Mirror, CEI, or based on separate state income tax returns.

Deferred income taxes arise from temporary differences between income taxes and
financial reporting and principally relate to depreciation and amortization.

Fees and Taxes

The Ashland and Defiance Clusters incur various fees and taxes in connection
with the operation of their cable television systems, including franchise fees
paid to various franchise authorities, copyright fees paid to the U.S. Copyright
Tribunal, and business and franchise taxes paid to the States of Ohio and
Kentucky. A portion of these fees and taxes are passed through to the Ashland
and Defiance Clusters' subscribers. Amounts collected from subscribers are
recorded as a reduction of operating expenses.

Pension and Postretirement Benefits

CCI generally provides defined pension benefits to all employees based on years
of service and compensation during those years. CEI provides certain health care
and life insurance benefits to substantially all retirees and employees. For
employees and retirees of the Ashland and Defiance Clusters, these benefits are
provided through the CCI plans. Expense related to these plans is allocated to
the Ashland and Defiance Clusters through the intercompany account. The amount
of the allocations is generally based on actuarial determinations of the effects
of the Ashland and Defiance Clusters employees' participation in the plans.

Times Mirror Cable generally provides defined pension benefits to all employees
based on years of service and the employee's compensation during the last five
years of employment. Prior to December 31, 1992, these benefits were primarily
provided under the Times Mirror Cable Television, Inc. Pension Plan (the "Times
Mirror Cable Plan") in conjunction with the Times Mirror Employee Stock
Ownership Plan. On December 31, 1992, the Times Mirror Cable Plan was merged
with the Times Mirror Pension Plan.

Net periodic pension expense for 1993 and 1994 was estimated by an actuary under
the assumption that the Times Mirror Cable Plan continued to be a stand-alone
plan. This expense was allocated to the Ashland and Defiance Clusters based on
its salary expense as a percentage of total TMCT salary expense.

Use of Estimates

F-42
<PAGE> 154

ASHLAND AND DEFIANCE CLUSTERS
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recently Issued Accounting Pronouncements

In March 1995, SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and Long-Lived Assets to Be Disposed of," was issued. This Statement requires
that long-lived assets and certain intangibles be reviewed for impairment when
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable, with any impairment losses being reported in the period
in which the recognition criteria are first applied based on the fair value of
the asset. Long-lived assets and certain intangibles to be disposed of are
required to be reported at the lower of carrying amount or fair value less cost
to sell. CCI, including the Ashland and Defiance Clusters, adopted SFAS No. 121
in the first quarter of 1996. The effect on the combined financial statements
upon adoption of SFAS No. 121 was not significant.

(3) CASH MANAGEMENT SYSTEM

The Ashland and Defiance Clusters participate in CEI's cash management system,
whereby the bank sends daily notification of checks presented for payment. CEI
transfers funds from other sources to cover the checks presented for payment.
Prior to February 1, 1995, the Ashland and Defiance Clusters participated in a
similar cash management system with Times Mirror.

(4) PLANT AND EQUIPMENT

Plant and equipment is summarized as follows (Thousands of Dollars):

<TABLE>
<CAPTION>
----------------------------
SUCCESSOR PREDECESSOR
------------ ------------
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
Land $ 5 $ 10
Buildings and building improvements 207 646
Transmission and distribution plant 30,235 34,543
Miscellaneous equipment 343 472
Construction in progress 3 59
-------- --------
Plant and equipment, at cost 30,793 35,730
Less accumulated depreciation (5,172) (17,634)
-------- --------
Net plant and equipment $25,621 $ 18,096
======== ========
</TABLE>

(5) INTANGIBLE ASSETS

Intangible assets are summarized as follows (Thousands of Dollars):

<TABLE>
<CAPTION>
----------------------------
SUCCESSOR PREDECESSOR
------------ ------------
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
Goodwill $113,523 $60,907
Other 134
-------- ---------
Total 113,523 61,041
Less accumulated amortization (2,727) (9,831)
-------- ---------
Net intangible assets $110,796 $51,210
======== =========
</TABLE>

F-43
<PAGE> 155

ASHLAND AND DEFIANCE CLUSTERS
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(6) INCOME TAXES

Income tax expense (benefit) is summarized as follows (Thousands of Dollars):

The tax effects of significant temporary differences which comprise the net
deferred tax liabilities are as follows (Thousands of Dollars):

<TABLE>
<CAPTION>
----------------
DECEMBER 31,
----------------
1995 1994
------ ------
<S> <C> <C>
Plant and equipment $7,942 $3,408
Other (298) (261)
------ ------
Net deferred tax liability $7,644 $3,147
====== ======
</TABLE>

Income tax expense computed using the United States federal statutory rates is
reconciled to the reported income tax provisions as follows:

(7) RETIREMENT PLANS

As a result of the acquisition of TMCT by CCI, effective January 1, 1996, CEI
established the Cox Communications, Inc. Pension Plan (the "CCI Plan"), a
noncontributory defined benefit plan for substantially all of CCI's employees
including Ashland and Defiance Clusters' employees. The Ashland and Defiance
Clusters employees will become

F-44
<PAGE> 156

ASHLAND AND DEFIANCE CLUSTERS
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(7) RETIREMENT PLANS (CONTINUED)
participants in the CCI Plan retroactive to the Merger date of February 1, 1995.
The CCI Plan will be established with a transfer of plan assets from CEI and
Times Mirror. The CCI Plan assets are expected to have an estimated fair value
equal to or greater than the projected benefit obligation attributable to
substantially all of the Ashland and Defiance Clusters employees. Prior to
February 1, 1995, substantially all of the Ashland and Defiance Clusters'
employees participated in a similar defined benefit plan provided by TMCT.
Several of the Ashland and Defiance Clusters' employees were covered under a
separate defined benefit plan funded by the Communication Workers of America.

Assumptions used in the actuarial computations were:

<TABLE>
<CAPTION>
----------------------
DECEMBER 31,
----------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Discount rate 7.25% 8.25% 7.50%
Rate of increase in compensation levels 5.00 6.00 6.25
Expected long-term rate of return on assets 9.00 9.50 9.75
</TABLE>

Total pension expense allocated to the Ashland and Defiance Clusters was
$53,000, $44,000, $0, and $64,000 for the years ended December 31, 1993 and
1994, for the one-month period ended January 31, 1995, and the eleven-month
period ended December 31, 1995, respectively.

Beginning February 1, 1995, CEI provides certain health care and life insurance
benefits to substantially all retirees of CEI and its subsidiaries,
Postretirement expense allocated to the Ashland and Defiance Clusters by CEI was
$14,000 for the eleven months ended December 31, 1995.

The funded status of the portion of the postretirement plan covering the
employees of the Ashland and Defiance Clusters is not determinable. The
accumulated postretirement benefit obligation for the postretirement plan of CEI
substantially exceeded the fair value of assets held in the plan at December 31,
1995.

Beginning February 1, 1995, substantially all of the Ashland and Defiance
Clusters employees were eligible to participate in the savings and investment
plan of CEI. Under the terms of the plan, the Ashland and Defiance Clusters
match 50% of employee contributions up to a maximum of 6% of the employee's base
salary. Prior to February 1, 1995, the Ashland and Defiance Clusters employees
were eligible to participate in a similar savings and investment plan with Times
Mirror. The Ashland and Defiance Clusters' expense under the plan was $39,000,
$43,000, $3,000, and $44,000 for the years ended December 31, 1993 and 1994, for
the one-month period ended January 31, 1995, and the eleven-month period ended
December 31, 1996, respectively.

(8) TRANSACTIONS WITH AFFILIATED COMPANIES

The Ashland and Defiance Clusters borrow funds for working capital and other
needs from CEI. Certain management services are provided to the Ashland and
Defiance Clusters by CCI and CEI. Such services include legal, corporate
secretarial, tax, treasury, internal audit, risk management, benefits
administration, and other support services. Prior to February 1, 1995, the
Ashland and Defiance Clusters had similar arrangements with Times Mirror. The
Ashland and Defiance Clusters were allocated expenses for the years ended
December 31, 1993 and 1994, for the one-month period ended January 31, 1995, and
the eleven-month period ended December 31, 1995 of approximately $1,040,000,
$1,298,000, $117,000, and $1,513,000, respectively, related to these services.
Such expenses are estimated by management and are generally allocated based on
the number of customers served. Management believes that these allocations were
made, on a reasonable basis. However, the allocations are not necessarily
indicative of the level of expenses that might have been incurred had the
Ashland and Defiance Clusters contracted directly with third parties. Management
has not made a study or any attempt to obtain quotes from third-parties to
determine what the cost of obtaining such services from third parties would have
been. The fees and expenses to be paid by the Ashland and Defiance Clusters are
subject to change.

F-45
<PAGE> 157

ASHLAND AND DEFIANCE CLUSTERS
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(8) TRANSACTIONS WITH AFFILIATED COMPANIES (CONTINUED)

The amounts due from affiliate represent the net of various transactions,
including those described above. Prior to February 1, 1995, amounts due from/to
Times Mirror bore interest at Times Mirror's estimated ten-year financing rate
and ranged between 6% and 8% between 1993 and 1994. Interest income for 1993 and
1994 was $133,000 and $434,000, respectively. Effective February 1, 1995,
advances to affiliate are noninterest-bearing.

In accordance with the requirements of SFAS No. 107, "Disclosures About Fair
Value of Financial Instruments," the Ashland and Defiance Clusters have
estimated the fair value of its intercompany advances. Given the short-term
nature of these advances, the carrying amounts reported in the balance sheets
approximate fair value.

(9) COMMITMENTS AND CONTINGENCIES

The Ashland and Defiance Clusters lease office facilities and various items of
equipment under noncancelable operating leases. Rental expense under operating
leases amounted to $119,000 and $122,000 for the years ended December 31, 1993
and 1994 and $163,000 for the eleven-month period ended December 31, 1995.
Future minimum lease payments as of December 31, 1995 for all noncancelable
operating leases are as follows (Thousands of Dollars),

<TABLE>
<S> <C>
1996 $126
1997 103
1998 59
1999 50
2000 42
Thereafter 4
----
Total $383
====
</TABLE>

At December 31, 1995, the Ashland and Defiance Clusters had outstanding purchase
commitments totaling approximately $2,000.

The Ashland and Defiance Clusters are a party to various legal proceedings that
are ordinary and incidental to its business. Management does not expect that any
legal proceedings currently pending will have a material adverse impact on the
Ashland and Defiance Clusters' combined financial position or combined results
of operations.

(10) RATE REGULATION AND OTHER DEVELOPMENTS

In 1993 and 1994, the FCC adopted rate regulations required by the Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act"), which utilized a benchmark price cap system, or alternatively a
cost-of-service regime, for establishing the reasonableness of existing basic
and cable programming service rates. The regulations resulted in, among other
things, an overall reduction of up to 17% in basic rates and other charges in
effect on September 30, 1992, before inflationary and other allowable
adjustments, if those rates exceeded the revised per-channel benchmarks
established by the FCC and could not otherwise be justified under a
cost-of-service showing.

In September 1995, the FCC authorized a new, alternative method of implementing
rate adjustments which will allow cable operators to increase rates for
programming annually on the basis of projected increases in external costs
rather than on the basis of cost increases incurred in the preceding quarter.

Many franchising authorities have become certified by the FCC to regulate rates
charged by the Ashland and Defiance Clusters for basic cable service and
associated basic cable service equipment. Some local franchising authority
decisions have been rendered that were adverse to the Ashland and Defiance
Clusters. In addition, a number of such franchising authorities and customers of
the Ashland and Defiance Clusters filed complaints with the FCC regarding the
rates charged for cable programming services.

F-46
<PAGE> 158

ASHLAND AND DEFIANCE CLUSTERS
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(10) RATE REGULATION AND OTHER DEVELOPMENTS (CONTINUED)
In September 1995, CCI and the Cable Services Bureau of the FCC reached a
settlement in the form of a resolution of all outstanding rate complaints
covering the CCI, the Ashland and Defiance Clusters, and the former Times Mirror
cable television systems. In December 1995, the FCC approved the Resolution
which, among other things, provided for refunds ($115,000 to the Ashland and
Defiance Clusters' customers) in January 1996, and the removal of additional
outlet charges for regulated services from all of the Times Mirror cable
television systems, which accounts for a majority of the refund amounts. The
resolution also finds that the Ashland and Defiance Clusters' cable programming
services tier rates as of June 30, 1995 are not unreasonable. At December 31,
1995, refunds under the resolution were fully provided for in the Ashland and
Defiance Clusters' financial statements.

On February 1, 1996, Congress passed the Telecommunications Competition and
Deregulation Act of 1996 ("the 1996 Act") which was signed into law by the
President on February 8, 1996, The 1996 Act is intended to promote substantial
competition in the delivery of video and other services by local telephone
companies (also known as local exchange carriers or "LECs") and other service
providers, and permits cable television operators to provide telephone services.

Among other provisions, the 1996 Act deregulates the Cable Programming Services
("CPS") tier of large cable television operators on March 31, 1999 and upon
enactment, the CPS rates of small cable television operators where a small cable
operator serves 50,000 or fewer subscribers, revises the procedures for filing a
CPS complaint, and adds a new effective competition test.

The 1996 Act establishes local exchange competition as a national policy by
preempting laws that prohibit competition in the telephone local exchange and by
establishing uniform requirements and standards for entry, competitive carrier
interconnection, and unbundling of LEC monopoly services. Both the FCC and state
commissions have substantial new responsibilities to promote the 1996 Act's
competition policy. Depending on the degree and form of regulatory flexibility
afforded the LECs as part of the 1996 Act's implementation, the Ashland and
Defiance Clusters' ability to offer competitive telephony services may be
adversely affected.

The 1996 Act repeals the cable television/telephone cross-ownership ban and
allows LECs and other common carriers, as well as cable systems providing local
exchange service, to provide video programming services as either cable
operators or as open video system ("OVS") operators within their service areas
upon certification from the FCC and pursuant to regulations which the FCC is
required to adopt. The 1996 Act exempts OVS operators from many of the
regulatory obligations that currently apply to cable operators such as rate
regulation and franchise fees, although other requirements are still applicable.
OVS operators, although not subject to franchise fees as defined by the 1992
Cable Act may be subject to fees charged by local franchising authorities or
other governmental entities in lieu of franchise fees.

F-47
<PAGE> 159

INDEPENDENT AUDITORS' REPORT

The Partners
C4 Media Cable Southeast, Limited Partnership
Lockney, Texas 79241

We have audited the consolidated balance sheets of C4 Media Cable Southeast,
Limited Partnership and its subsidiary (the Partnership) as of December 31,
1995, and 1994, and the related consolidated statements of loss, partners'
deficit, and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our report.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of C4 Media Cable
Southeast Limited Partnership and its subsidiary as of December 31, 1995 and
1994, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Partnership will continue as a going concern. As discussed in Note 7 to
the consolidated financial statements, the Partnership sold substantially all
assets on February 1, 1996. The sales price was not sufficient to satisfy the
liabilities of the Partnership. The remaining unpaid principal and interest on
Senior and Junior loans have been due and payable since September 30, 1990.
These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plans regarding those matters also are
described in Note 7. The historical consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

Williams, Rogers, Lewis & Co., P.C.

Plainview, Texas
March 11, 1996

F-48
<PAGE> 160

C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
----------------------------
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 203,955 $ 204,255
Accounts Receivable, Net 168,823 141,025
Prepaid Expense and Other 211,289 201,952
------------ ------------
Total Current Assets 584,067 547,232
------------ ------------
PROPERTY, PLANT AND EQUIPMENT
Plant and Equipment 41,057,969 39,251,506
Less: Accumulated Depreciation (20,386,652) (16,172,050)
------------ ------------
Net Property, Plant and Equipment 20,671,317 23,079,456
------------ ------------
OTHER ASSETS
Deposits and Other 17,314 17,899
Franchises, Net 2,967,669 4,031,170
Acquisition Costs, Net 874,863 1,148,913
Covenant Not to Compete -0- -0-
------------ ------------
Total Other Assets 3,859,846 5,197,982
------------ ------------
Total Assets $ 25,115,230 $ 28,824,670
============ ============
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES
Accounts Payable $ 735,138 $ 691,305
Other Current Liabilities 393,423 568,455
Accrued Interest Payable 30,022,386 24,315,384
Notes Payable 60,165,844 60,165,844
------------ ------------
Total Current Liabilities 91,316,791 85,740,988
------------ ------------
MINORITY INTEREST (371,926) (268,729)
------------ ------------
PARTNERS' DEFICIT
General Partners (65,829,635) (56,647,589)
------------ ------------
Total Liabilities and Partners' Deficit $ 25,115,230 $ 28,824,670
============ ============
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-49
<PAGE> 161

C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF LOSS
DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
-------------------------
1995 1994
----------- ----------
<S> <C> <C>
REVENUE
Cable Service $11,755,860 11,231,123
----------- ----------
EXPENSE
Programming Costs 3,003,682 2,602,692
Salaries 1,124,203 1,046,895
Other Operating Expenses 2,607,023 2,642,777
Management Fees 545,641 561,114
Depreciation 4,214,602 4,113,809
Amortization 1,337,551 1,575,551
Interest 8,208,401 7,447,251
----------- ----------
21,041,103 19,990,089
----------- ----------
Loss Before Minority Interest (9,285,243) (8,758,966)
Minority Interest in Loss of Subsidiary 103,197 116,472
----------- ----------
NET LOSS $(9,182,046) (8,642,494)
========== =========
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-50
<PAGE> 162

C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNER'S DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
--------------------------------------------------
CLASS A
GENERAL GENERAL LIMITED
PARTNERS PARTNERS PARTNERS TOTAL
--------- ----------- -------- -----------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1993 (539,910) (47,465,185) -0- (48,005,095)
Loss, 1994 (86,425) (8,556,069) -0- (8,642,494)
--
--------- ----------- -----------
BALANCE, DECEMBER 31, 1994 (626,335) (56,021,254) -0- (56,647,589)
Loss, 1995 (91,820) (9,090,226) -0- (9,182,046)
--
--------- ----------- -----------
BALANCE, DECEMBER 31, 1995 $(718,155) (65,111,480) -0- (65,829,635)
--
========= =========== ==== ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-51
<PAGE> 163

C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $(9,182,046) $(8,642,494)
Adjustments to reconcile net loss to net cash:
Minority interest in loss of subsidiary (103,197) (116,472)
Depreciation 4,214,602 4,113,809
Amortization 1,337,551 1,575,551
Changes in Assets and Liabilities:
Accounts receivable (27,798) 2,330
Prepaid expenses and other (8,752) (7,701)
Accounts payable 43,833 20,388
Other liabilities (175,032) 51,392
Accrued interest 5,707,002 3,928,106
----------- -----------
Net cash provided by operating activities 1,806,163 924,909
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of plant, equipment and other assets (1,806,463) (854,999)
----------- -----------
Net cash used in investing activities (1,806,463) (854,999)
----------- -----------
Net Increase (Decrease) in Cash (300) 69,910
Cash, Beginning of Year 204,255 134,345
----------- -----------
Cash, End of Year $ 203,955 $ 204,255
=========== ===========
Supplemental Disclosure for Statements of Cash Flows:
Cash Paid for Interest 2,470,936 3,519,145
Non-Cash Investing Activities:
Deposit added to cost of plant and equipment -0- 39,622
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-52
<PAGE> 164

C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994

(1) SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

Entities:

C4 Media Cable Southeast, Limited Partnership and its subsidiary (the
"Partnership") is a Delaware limited partnership organized to own and operate
cable television systems in various communities throughout Virginia, Tennessee,
and Georgia. The Partnership provides basic and pay cable television service to
approximately 40,500 subscribers in these states. General partners are C4 Media
Cable, Inc. and C4 Media Cable Employees Investment Corporation. C4 Media Cable,
Inc. also participates as a limited partner. Under a letter agreement dated May
9, 1992, Philips Credit Corporation ("Philips") has exercised its rights under
certain pledge agreements to exercise voting control over all partnership
interests. Accordingly, effective October 30, 1992, C4 Media Cable, Inc. was
replaced by Southeast Cable, Inc., a corporate affiliate of Philips, as the
managing general partner. The managing general partner utilized Doucette
Management Company ("DMC") as the business manager for the Partnership until
December 30, 1993 at which time the management agreement was assigned to
Cablevision of Texas III, LP ("CAB III"). See note 4.

Principles of Consolidation:

The consolidated financial statements include the accounts of C4 Media Cable
Southeast, Limited Partnership and County Cable Company, Limited Partnership of
which the Partnership is an 80% owner and general partner. All significant
intercompany transactions have been eliminated.

Revenue Recognition:

The Partnership recognizes cable service revenue on the accrual basis in the
month the cable service is provided. Payments received in advance are included
in deferred revenue until the month the service is provided at which time they
are recognized as income.

Property, Plant, Equipment and Depreciation:

Property, plant and equipment used in the business are stated at cost and
depreciated over estimated useful lives generally on the straight line method
for financial statement purposes. Expenditures which significantly increase
asset values or extend useful lives are capitalized, limited by projected
recoverability of such current year expenditures in the ordinary course of
business from expected future revenue.

The useful lives of property, plant and equipment for purposes of computing
depreciation range from 3 to 10 years.

Franchises:

The company has been granted rights to operate within the locations wherein it
has cable television systems. Such franchises grant certain operating rights and
impose certain costs and restrictions. The Partnership pays its franchise fees
annually on most of its locations based upon either gross or basic service
revenues. Franchise fee expense for the years ended December 31, 1995 and 1994
was $327,088 and $303,375, respectively.

Such franchises have varying lives and are renewable at the discretion of the
franchise's governing boards. For financial statement purposes, franchise costs
acquired in connection with the purchase of cable systems are being amortized
over the remaining average lives of the related cable television franchises at
the date of acquisition, which approximates 7 to 13 years. Franchise
amortization expense for the years ended December 31, 1995 and 1994 was
$1,063,501 in each year.

F-53
<PAGE> 165

C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)
Acquisition Costs:

Acquisition costs are those costs incurred related to the acquisition of new
systems. For financial statement purposes, such costs are amortized by using the
straight-line method over 10 years. Amortization expense for acquisition costs
for the years ended December 31, 1995 and 1994 was $274,050, and $274,050,
respectively.

Covenants Not to Compete:

The portion of the purchase price of systems allocated to non-competition
agreements with former owners is capitalized and amortized by using the
straight-line method over the life of the agreements. Amortization expense for
non-competition agreements for the year ended December 31, 1994 was $238,000.

Income Taxes:

The partnership does not pay federal income tax, but is a pass through entity so
that partners are taxed on their share of partnership earnings. Partnership net
income or loss is allocated to each partner under a formula established in the
partnership agreement.

Cash Equivalents:

For cash flow purposes, cash equivalents are cash and cash items with a maturity
of less than 90 days.

Use of Estimates:

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

(2) ACCOUNTS RECEIVABLE, NET

Following is a summary of accounts receivable at December 31, 1995 and 1994:

<TABLE>
<CAPTION>
---------------------
1995 1994
-------- ---------
<S> <C> <C>
Trade Accounts $175,671 $ 146,239
Other 281 642
Related Parties (4) -0- 194,873
Less: Allowance for Doubtful Accounts (4) (7,129) (200,729)
-------- ---------
$168,823 $ 141,025
======== =========
</TABLE>

F-54
<PAGE> 166

C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(3) NOTES PAYABLE

Following is a summary of notes payable at December 31, 1995 and 1994:

<TABLE>
<CAPTION>
---------------------------
1995 1994
------------ ------------
<S> <C> <C>
Senior loan payable to Philips, due
September 30, 1990, interest due at prime +
2.25%, secured by substantially all assets
of the partnership and the pledge of
partnership interests. In addition, the
loan is collateralized by the pledge of all
stock held in C4 Media Cable, Inc. and C4
Media Cable, Employees Investment
Corporation by the President and Chairman
of C4 Media Cable, Inc. $44,185,831 $44,185,831
Junior Loan payable to Philips, due
September 30, 1990 interest due at 20%,
secured by substantially all assets of the
partnership and the pledge of partnership
interests. In addition, the loan is
collateralized by the pledge of all stock
held in C4 Media Cable, Inc. and C4 Media
Cable Employees Investment Corporation by
the President and Chairman of C4 Media
Cable, Inc. 15,980,013 15,980,013
------------ ------------
Total $60,165,844 $60,165,844
============ ============
</TABLE>

The Philips notes contain performance covenants concerning homes passed,
subscriber levels, miles of plant, etc., some of which the Partnership had
violated as of December 31, 1995 and 1994. Philips has not waived compliance
with these provisions.

All notes payable and accrued interest to Philips were due September 30, 1990.
Philips has not extended the due date of the notes and has the right to demand
payment at any time. A significant amount of accrued interest and principle was
paid when substantially all operating assets of the Partnership were sold
February 1, 1996. See note 7.

(4) RELATED PARTY TRANSACTIONS

Effective October 30, 1992, C4 Media Cable, Inc. was replaced by Southeast
Cable, Inc., a corporate affiliate of Philips, as the managing general partner.
Effective May 10, 1992 under the provisions of an agreement with Philips, the
Partnership terminated its management agreement with C4 Media Cable, Inc. and
entered into a management agreement with DMC for a term extending to December
30, 1993. At December 30, 1993 the management agreement was assigned to CAB III.
The agreement provides for fixed fees and the reimbursement of direct expenses
incurred on behalf of the Partnership as defined in the agreement. Management
fees paid under these agreements for the years ended December 31, 1995 and 1994
were $545,641 and $550,214, respectively. Other fees and expense reimbursements
paid under the agreements for the years ended December 31, 1995 and 1994 were
$120,000 and are included in Other Operating Expenses.

Other related parties include Caribbean Cable TV ("CCTV") and MCT Cablevision
("MCT"). Related party lending was done without independent business judgment,
terms, collateral or a method of settlement. Due to the manner in which this
lending was done and questions surrounding the collectability of these accounts,
all the related party

F-55
<PAGE> 167

C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(4) RELATED PARTY TRANSACTIONS (CONTINUED)
receivables were reserved in the allowance for doubtful accounts prior to 1994
and were written off in 1995. See note 2. Related party receivables at December
31, 1994 were as follows:

<TABLE>
<CAPTION>
---------
1994
---------
<S> <C>
CCTV $ 23,965
MCT 35,968
C4 Media Cable, Inc. 134,940
---------
$194,873
=========
</TABLE>

The Partnership purchased leasehold improvements from J-D Partnership, Ltd.
("J-D") for the Lockney, Texas office of $5,366 on April 24, 1995. J-D is a
limited partnership 99% owned by James and Denise Doucette (Doucette). Doucette
is also the managing general partner and owns 62% of CAB III, as well as being
the sole stockholder of DMC, an S-Corporation. The Partnership paid a management
fee to Doucette of $10,900 for the year ended December 31, 1994.

(5) COMMITMENTS

The Company has certain obligations under pole rental agreements, tower site
leases, etc. for assets utilized in the operation of the systems. These are
mostly short term agreements. Expenses charged to operations for the periods
ended December 31, 1995 and 1994 were $536,368 and $518,837, respectively, and
are included in Other Operating Expenses.

(6) CONTINGENCIES

The Company is to a significant degree self-insured for risks consisting
primarily of physical loss to property and plant. The headend equipment is
insured, but the plant itself is not and represents a potential exposure for the
Company. Management is of the opinion that the various systems' distance from
each other make the likelihood of a complete loss to the plant unlikely.

(7) SUBSEQUENT EVENT AND CONSIDERATION OF ABILITY TO CONTINUE AS A GOING CONCERN

The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business.

On February 1, 1996 substantially all assets of the Partnership were sold to
FrontierVision Operating Partners, L.P. The agreement had a stated sales price
of $48,000,000 and a net payment amount of $46,237,708 after escrow holdback of
$1,375,200 and other adjustments. At the date of the auditors' report the
Partnership was still liable for the remaining balance of the note payable to
Philips with no significant assets to satisfy that liability, and the escrow
items remain open.

F-56
<PAGE> 168

C4 MEDIA CABLE SOUTHEAST, LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(7) SUBSEQUENT EVENT AND CONSIDERATION OF ABILITY TO CONTINUE AS A GOING
CONCERN (CONTINUED)
An unaudited pro forma consolidated balance sheet is presented below giving
effect to the sale as if it had occurred December 31, 1995 including escrowed
items. The pro forma information is presented for the purpose of additional
analysis and is not a required part of the basic consolidated financial
statements.

<TABLE>
<CAPTION>
------------
PRO FORMA
UNAUDITED
1995
------------
<S> <C>
Current Assets $ 685,773
Other Assets 1,392,514
------------
Total Assets $ 2,078,287
============
Current Liabilities $ 45,303,939
Partners' Deficit (43,225,652)
------------
Total Liabilities and Partners' Deficit $ 2,078,287
============
</TABLE>

The Partnership has been unable to pay all of its principle and interest as
required under its loan agreements since the loans matured September 30, 1990.

These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. The historical consolidated financial statements do
not include any adjustments that might result from this sale of assets or this
uncertainty. Management has not fully evaluated the options for the Partnership
subsequent to the sale.

F-57
<PAGE> 169

INDEPENDENT AUDITORS' REPORT

American Cable Entertainment of Kentucky-Indiana, Inc.

We have audited the accompanying balance sheets of American Cable Entertainment
of Kentucky-Indiana, Inc. (the "Company") as of December 31, 1995 and 1994 and
the related statements of operations, shareholders' deficiency and cash flows
for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of American Cable Entertainment of
Kentucky-Indiana, Inc. as of December 31, 1995 and 1994 and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that American
Cable Entertainment of Kentucky-Indiana, Inc. will continue as a going concern.
As discussed in Note 1 to the financial statements, the Company is unable to
meet its scheduled debt maturity repayments which raises substantial doubt about
the Company's ability to continue as a going concern. Consequently, the Company
has entered into an agreement to sell all of its assets, has entered into
agreements with its creditors who have consented, under certain circumstances,
to forbear taking any action against the Company pending the sale of the Company
and has filed a prepackaged bankruptcy under Chapter 11 of the Federal
Bankruptcy Code. Management's plans in regard to these matters are described
further in Note 1. The accompanying financial statements do not purport to
reflect or provide for the consequences of the sale of the Company or the filing
of the prepackaged bankruptcy. In particular, such financial statements do not
purport to show the realizable value of assets or liabilities on a liquidation
basis nor do they include any adjustments that might result from the outcome of
these uncertainties.

DELOITTE & TOUCHE LLP

Stamford, CT

March 15, 1996 (Except for Note 1, as to
which the date is August 1, 1996.)

F-58
<PAGE> 170

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
BALANCE SHEETS

<TABLE>
<CAPTION>
-----------------------------------------------
JUNE 30, DECEMBER 31, DECEMBER 31,
1996 1995 1994
------------- ------------- -------------
Unaudited
<S> <C> <C> <C>
ASSETS
INVESTMENT IN CABLE TELEVISION SYSTEMS:
Land and land improvements $ 247,561 $ 247,561 $ 247,561
Vehicles 1,811,309 1,702,997 1,507,850
Buildings and improvements 1,007,624 998,414 967,794
Office furniture and equipment 809,022 802,377 733,465
CATV distribution systems and related
equipment 53,549,816 51,757,161 49,161,506
------------- ------------- -------------
Total Fixed Assets 57,425,332 55,508,510 52,618,176
Less accumulated depreciation 31,518,834 28,897,790 23,683,730
------------- ------------- -------------
Total Fixed Assets -- net 25,906,498 26,610,720 28,934,446
Franchise costs -- net 1,114,311 2,785,425 5,964,805
Subscriber lists -- net 617,323 1,543,307 3,531,021
Covenant not to compete -- net 32,273 80,682 242,045
------------- ------------- -------------
Investment in cable television systems -- net 27,670,405 31,020,134 38,672,317
GOODWILL -- net 3,526,526 3,579,784 3,686,299
DEFERRED CHARGES -- net 213,742 371,691 963,949
CASH AND CASH EQUIVALENTS 1,535,899 3,704,823 3,427,849
ACCOUNTS RECEIVABLE -- less allowance for doubtful
accounts of $278,438 in 1996, $240,212 in 1995
and $195,736 in 1994 358,587 304,734 276,709
PREPAID AND OTHER 197,743 197,802 194,514
------------- ------------- -------------
TOTAL ASSETS $ 35,502,902 $ 39,178,968 $ 47,221,637
============= ============= =============
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
LIABILITIES:
Notes and loans payable $ 187,472,783 $ 182,430,902 $ 167,707,411
Accrued interest -- Senior debt 0 1,314,032 329,004
Accrued interest -- Senior/Junior Subordinated
Debentures 6,021,941 3,068,862 4,345,047
Accounts payable and accrued expenses 3,968,270 4,244,348 3,973,224
Unearned income 154,143 124,109 124,344
Converter deposits 128,842 134,366 136,588
------------- ------------- -------------
Total Liabilities 197,745,979 191,316,619 176,615,618
------------- ------------- -------------
COMMITMENTS (7)
SHAREHOLDERS' DEFICIENCY:
Capital stock -- all series 10,000 10,000 26
Additional paid-in capital 1,490,000 1,490,000 1,499,974
Deficit (165,743,077) (153,637,651) (130,893,981)
------------- ------------- -------------
Total shareholders' deficiency (164,243,077) (152,137,651) (129,393,981)
------------- ------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY $ 33,502,902 $ 39,178,968 $ 47,221,637
============= ============= =============
</TABLE>

See notes to financial statements

F-59
<PAGE> 171

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
FOR THE FOR THE
SIX MONTHS SIX MONTHS FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1995 1994 1993
------------ ------------ ------------ ------------ ------------
Unaudited Unaudited
<S> <C> <C> <C> <C> <C>
Revenue $ 15,240,807 $ 13,746,936 $ 28,088,127 $ 25,879,525 $ 24,976,818
------------ ------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Operating expenses 5,688,861 5,290,737 10,880,854 9,388,813 8,699,878
Selling, general and
administrative expenses 2,473,298 2,437,860 4,948,493 4,912,150 4,743,783
Management fees 457,225 412,408 842,644 819,095 749,305
Depreciation and amortization 5,502,659 5,775,966 11,284,315 18,054,371 18,231,734
Expenses incurred in
connection with override
and forbearance agreements 580,819 0 557,664 0 0
------------ ------------ ------------ ------------ ------------
Total costs and expenses 14,702,862 13,916,971 28,513,970 33,174,429 32,424,700
------------ ------------ ------------ ------------ ------------
Operating income (loss) 537,945 (170,035) (425,843) (7,294,904) (7,447,882)
Interest expense -- net 12,643,371 10,679,557 22,366,189 20,241,202 18,410,503
Net gain on sale of cable
television system and
marketable securities 0 0 48,362 1,266,020 0
------------ ------------ ------------ ------------ ------------
NET LOSS $(12,105,426) $(10,849,592) $(22,743,670) $(26,270,086) $(25,858,385)
=========== =========== =========== =========== ===========
</TABLE>

See notes to financial statements.

F-60
<PAGE> 172

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
STATEMENTS OF SHAREHOLDERS' DEFICIENCY

FOR THE SIX MONTHS ENDED JUNE 30, 1996 Unaudited

AND THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
COMMON STOCK
-----------------------------------------------
NUMBER OF
SHARES ADDITIONAL TOTAL
ISSUED AND PAR PAID-IN SHAREHOLDERS'
OUTSTANDING VALUE CAPITAL DEFICIT DEFICIENCY
-------------- --------------- ---------- ------------- -------------
CLASS CLASS
-------------- ---------------
A D A D
---- ------ ---- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1993 255 $ 26 $1,499,974 $ (78,765,510) $ (77,265,510)
Net Loss (25,858,385) (25,858,385)
---- ---- ---------- ------------- -------------
BALANCE AT DECEMBER 31, 1993 255 26 1,499,974 (104,623,895) (103,123,895)
Net Loss (26,270,086) (26,270,086)
---- ---- ---------- ------------- -------------
BALANCE AT DECEMBER 31, 1994 255 26 1,499,974 (130,893,981) (129,393,981)
Net Loss (22,743,670) (22,743,670)
RECAPITALIZATION OF COMMON STOCK (254) 99,999 (26) $10,000 (9,974)
---- ------ ---- ------- ---------- ------------- -------------
BALANCE AT DECEMBER 31, 1995 1 99,999 0 10,000 1,490,000 (153,637,651) (152,137,651)
Net Loss Unaudited (12,105,426) (12,105,426)
---- ------ ---- ------- ---------- ------------- -------------
BALANCE AT JUNE 30, 1996
Unaudited 1 99,999 $ 0 $10,000 $1,490,000 $(165,743,077) $(164,243,077)
==== ====== ==== ======== ========== ============= =============
</TABLE>

See notes to financial statements

F-61
<PAGE> 173

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
------------------------------------------------------------------------------
FOR THE FOR THE FOR THE YEAR FOR THE YEAR FOR THE YEAR
SIX MONTHS SIX MONTHS ENDED ENDED ENDED
ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31,
JUNE 30, 1996 JUNE 30, 1995 1995 1994 1993
------------- ------------- ------------ ------------ ------------
Unaudited Unaudited
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(12,105,426) $(10,849,592) $(22,743,670) $(26,270,086) $(25,858,385)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Depreciation 2,645,945 2,649,397 5,257,085 6,397,956 5,452,940
Amortization 2,856,714 3,126,569 6,027,230 11,656,415 12,778,794
Accretion of discount on step coupon
senior subordinated notes 5,543,911 5,258,029 10,171,124 9,519,095 8,189,478
Accretion of discount on junior
subordinated debentures 2,953,079 2,626,620 5,416,469 4,820,269 4,231,918
Net gain on sale of cable television
system, marketable securities, and other
assets (48,362) (1,266,020)
Change in assets and liabilities:
Decrease (increase) in accounts
receivable (53,853) 2,224 (28,025) (94,868) 23,917
Decrease (increase) in prepaid and other
assets 59 (49,631) (3,288) 51,799 (59,414)
(Decrease) increase in accounts payable
and accrued expenses (276,078) (765,063) 271,124 (414,333) 169,808
(Decrease) increase in accrued
interest-senior debt (1,314,032) 71,672 985,028 129,505
Increase (decrease) in converter
deposits (5,524) (2,038) (2,222) (237) (9,384)
Increase (decrease) in unearned income 30,034 34,878 (235) (91,827) 9,518
------------- ------------- ------------ ------------ ------------
Net cash (used in) provided by operating
activities 274,829 2,103,065 5,302,258 4,437,668 4,929,190
------------- ------------- ------------ ------------ ------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Additions to reception and distribution
facilities and equipment (1,941,722) (1,348,126) (2,933,359) (3,605,498) (5,083,401)
Net proceeds from sale of assets 48,362 1,523,137
------------- ------------- ------------ ------------ ------------
Net cash used in investing activities (1,941,722) (1,348,126) (2,884,997) (2,082,361) (5,083,401)
------------- ------------- ------------ ------------ ------------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Payments on senior bank loan (190,848) (832,112) (1,262,542) (309,165)
Payments on senior revolving credit
facility (46,552) (131,616) (131,616) (3,668)
Payments on senior secured notes (262,601) (742,447) (742,447) (20,712)
Increase in deferred charges 0 (26,858) (186,563) (598)
(Decrease) increase in obligations under
capital lease (2,030) (2,030) (3,682) 7,281
------------- ------------- ------------ ------------ ------------
Net cash used in financing activities (502,031) (1,735,063) (2,140,287) (512,827) (598)
------------- ------------- ------------ ------------ ------------
Net (decrease) increase in cash and cash
equivalents (2,168,924) (980,124) 276,974 1,842,480 (154,809)
Cash and cash equivalents at beginning of
period 3,704,823 3,427,849 3,427,849 1,585,369 1,740,178
------------- ------------- ------------ ------------ ------------
Cash and cash equivalents at end of period $ 1,535,899 $ 2,447,725 $ 3,704,823 $ 3,427,849 $ 1,585,369
============ ============ =========== =========== ===========
Supplemental disclosures of cash flow
information:
Cash paid during the period for interest $ 3,995,594 $ 3,851,198 $ 6,900,613 $ 5,952,791 $ 6,038,557
============ ============ =========== =========== ===========
</TABLE>

See notes to financial statements

F-62
<PAGE> 174

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
NOTES TO FINANCIAL STATEMENTS

Unaudited AS TO JUNE 30, 1996 AND 1995

(1) DEBT MATURITIES AND THE SALE OF THE COMPANY

During the fourth quarter of 1995 the Company's senior debt obligations matured
without being paid. In addition, the Company failed to make the full payment of
interest on the Step Coupon Senior Subordinated Notes which became due in 1995.

Prompted by these payment defaults, effective December 31, 1995, the Company,
its shareholders, and Kentucky-Indiana Management Company, Inc. ("KYMC"), which
acts as manager for the Company, entered into two agreements: a "Forbearance
Agreement" with its senior lenders; and an "Override Agreement" with the holders
of its Senior Subordinated and Junior Subordinated Notes.

Under the terms of the Forbearance Agreement the senior lenders have agreed to
forebear in the exercise of their rights and remedies with respect to the
payment default described above as well as defaults with respect to certain
specified financial covenants, through September 30, 1996 which allows the
Company time to sell its assets in an orderly manner. It contains certain
financial covenants as well as procedures that the Company and KYMC have agreed
to follow during the sales process. Subsequent to September 30, 1996, certain
financial covenants, which the Company is currently in default upon, revert back
to the terms in the original agreements.

The Override Agreement requires that the Company undertake to sell substantially
all of its assets, and to enter into a contract for sale and to consummate that
sale in accordance with an agreed upon time schedule. It also contains certain
financial covenants and procedures to be followed.

Effective July 15, 1996, the Company entered into an asset purchase agreement
with FrontierVision Operating Partners, L.P. ("FrontierVision") for the sale of
the assets of the Company for $146 million, subject to certain purchase price
adjustments. Due to the expected shortfall of payments to existing creditors
from the sale proceeds, the Company filed a prepackaged bankruptcy under Chapter
11 of the Federal Bankruptcy code with the Federal Bankruptcy court on August 1,
1996. Management anticipates the sale to FrontierVision to be consummated in the
fourth quarter of 1996, subject to the required regulatory approvals and the
approval of the bankruptcy court. There are no assurances that this sale will be
consummated.

As a result of the matters discussed above, Management does not believe that it
is practical to estimate the fair value of the Company's debt facilities.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basic of Presentation

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. Accordingly, the financial statements do not
reflect adjustments or provide for the potential consequences of the sale of the
Company's assets. In particular, the financial statements do not purport to show
the realizable value of assets on a liquidation basis or their availability to
satisfy liabilities.

Formation of Company

On November 7, 1989 cable systems were purchased from Centel Cable Television
Company to form Simmons Cable TV of Kentucky-Indiana, Inc. (the "Company"). The
Company owns and operates cable systems in Kentucky and Indiana. On April 12,
1994 the Company changed its name to American Cable Entertainment of Kentucky-
Indiana, Inc.

Management Estimates

F-63
<PAGE> 175

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
periods. Actual results could differ from those estimates.

Investment in Cable Television Systems

Reception and distribution facilities and equipment additions are stated at
cost. Depreciation is provided using the straight-line method over the useful
lives of the assets (four to ten years for CATV distribution facilities and
related equipment, vehicles, building improvements and office furniture and
equipment; forty years for buildings). Included in depreciation expense for the
year ended December 31, 1994 were write-offs related to a rebuilt cable system
of $942,850.

Franchise acquisition costs are amortized over the average remaining term of the
franchises as of November 7, 1989 of seven years using the straight-line method,
Accumulated amortization of franchise costs at June 30, 1996, December 31, 1995
and 1994 aggregated $21,141,347, $19,470,233 and $16,290,853, respectively.

Covenants not to compete are amortized over the life of the agreements (five
years). Accumulated amortization of such covenants at June 30, 1996 December 31,
1995, and 1994 aggregated $774,724, $726,315 and $564,772, respectively.

Subscriber lists are amortized over seven years. Accumulated amortization of
subscriber lists at June 30, 1996, December 31, 1995 and 1994 aggregated
$13,296,677, $12,370,693 and $10,382,979, respectively.

Deferred charges consist of $882,408 of organizational costs and $3,616,230 of
loan acquisition costs at December 31, 1995. The loan acquisition costs are
amortized over the average life of the related debt, and organizational costs
are amortized over five years. Accumulated amortization at June 30, 1996,
December 31, 1995 and 1994 was $4,284,896, $4,126,947 and $3,534,689,
respectively.

Goodwill is amortized over forty years. Accumulated amortization of goodwill at
June 30, 1996, December 31, 1995 and 1994 aggregated $734,083, $680,825 and
$574,310, respectively.

Valuation of Intangible Assets

The Company, on an annual basis, undertakes a review and valuation of the net
carrying value, recoverability and write-off of all categories of its intangible
assets. The Company in its valuation considers current market values of its
properties, competition, prevailing economic conditions, government policy
including taxation, and the Company's and the industry's historical and current
growth patterns, as well as the recoverability of the cost of its intangible
assets based on a comparison of estimated undiscounted operating cash flows.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and liquid investments with a maturity
of three months or less from the date of purchase.

Income Taxes

The Company has elected to be taxed as an S Corporation under the Internal
Revenue Code and, accordingly, pays no federal income taxes. The income or loss
of the Company for its tax year is passed through to its shareholder(s) and
reported in the income tax returns of the shareholder(s).

Subscription Revenues

Subscription revenues received in advance of services rendered are deferred and
recorded in income in the period in which the related services are provided.

F-64
<PAGE> 176

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations or
credit risk consist principally of trade receivables. Concentrations of credit
risk with respect to trade receivables are limited due to the large number of
customers comprising the Company's customer base.

Disclosure of Fair Value of Financial Instruments

The carrying amount reported in the balance sheets for cash and cash
equivalents, accounts receivable, accounts payable and accrued expenses
approximates fair value because of the immediate or short-term maturity of these
financial instruments. Management does not believe it is practicable to estimate
the fair value of the Company's debt facilities. (See Note 4).

(3) DISPOSITIONS

On June 30, 1994 the Company sold its cable television system serving Jackson
County, Kentucky. The carrying value of the assets sold at the date of sale, net
of accumulated depreciation and amortization was as follows:

<TABLE>
<S> <C>
Reception and distribution facilities and equipment $69,527
Franchise cost 55,714
Goodwill and other intangible assets 50,300
</TABLE>

The net loss on this transaction was $157,630, recognized in 1994. Additional
proceeds of $48,362 were received in 1995 and recorded as a gain.

On October 17, 1994 the Company tendered all of its holding in QVC, Inc., which
resulted in a gain of $1,423,650.

These transactions are reflected in the statements of operations for the years
ended December 31, 1995 and 1994.

(4) NOTES AND LOANS PAYABLE

Notes and loans payable at June 30, 1996 and December 31, 1995 and 1994 are
comprised of the following:

<TABLE>
<CAPTION>
--------------------------------------------
JUNE 30, DECEMBER 31, DECEMBER 31,
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Senior Debt
Bank Credit Agreement (a) $ 23,237,446 $ 23,428,293 $ 24,690,835
Revolving Credit Facility (b) 5,668,164 5,714,716 5,846,332
Senior Secured Notes (c) 31,974,240 32,236,841 32,979,288
Step Coupon Senior Subordinated Notes (d) 83,560,575 78,016,664 66,137,000
Junior Subordinated Debentures (e) 43,030,789 43,030,789 38,046,675
Capitalized lease obligation 1,569 3,599 7,281
------------ ------------ ------------
$187,472,783 $182,430,902 $167,707,411
=========== =========== ===========
</TABLE>

(a) The Company has a credit agreement with Crestar Bank providing for total
borrowings of $25,000,000. This agreement provided for interest up to 1.5
percentage points over the bank's prime rate (or from 1.0 to 2.5 percentage
points over LIBOR). Interest only was payable quarterly in arrears on the
last day of March, June, September and December, and at the end of any LIBOR
borrowing period. The total commitment terminated at its maturity date of
October 31, 1995. Upon the payment default at maturity, the default rate of
prime plus 4% was charged. Upon the effective date of the Override
Agreement, interest is payable monthly at the rate of 11.75% per annum.

F-65
<PAGE> 177

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(4) NOTES AND LOANS PAYABLE (CONTINUED)
(b) The Company has a revolving credit facility with Sanwa Business Credit
Corporation which originally provided for borrowings of up to $15,000,000.
The total commitment was reduced to $7,000,000 in early 1994, and in
December 1994, the balance of the unused commitment was terminated. The
agreement provided for interest of up to 1.5 points over the Sanwa's prime
rate (or from 1.0 to 2.5 percentage points over LIBOR). Interest was payable
quarterly in arrears on the last day of March, June, September and December,
and at the end of any LIBOR borrowing period. The total commitment
terminated at its maturity date of October 31, 1995. Upon the payment
default at maturity, the default rate of prime plus 4% was charged. Upon the
effective date of the Override Agreement, interest is payable monthly at the
rate of 11.75% per annum.

(c) Senior Secured Notes were issued on November 7, 1989 bearing interest at
10.125% and matured November 7, 1995. The interest rate increased to 10.225%
effective January 1, 1991. Interest only was payable quarterly in arrears on
the last day of March, June, September and December. Upon the payment
default at maturity, interest was charged at 12.25%. Upon the effective date
of the Override Agreement, interest is payable monthly at the rate of 11.75%
per annum.

(d) Step Coupon Senior Subordinated Notes due April 30, 1996 were issued on
November 7, 1989 in the principal amount of $66,137,000 with a stated
interest rate of 15.7472%. Interest accreted and compounded semi-annually
through October 31, 1994. Although interest payments of $5,125,618 were
payable semi-annually beginning April 30, 1995 until maturity, only
$1,300,000 of interest has been paid. These notes were issued with warrants
to purchase up to 150 shares of Class C Non-voting Common Stock for an
aggregate exercise price of $330,000. As a result of the recapitalization
(See Note 5), the number of shares the warrant holders were entitled to
purchase was increased to 58,531 shares of the Class C stock. There are
certain restrictions as to when the warrants may be exercised, and they
expire on November 7, 2001. Total proceeds from the issuance of these
warrants amounted to $200,000. Accreted interest was $17,423,575,
$11,879,664 and $1,708,540 at June 30, 1996, December 31, 1995 and December
31, 1994, respectively.

(e) Junior Subordinated Debentures due October 31, 1997, were issued on November
7, 1989 for $20,800,000, bearing interest at 13.1%. Interest is deferred and
compounds annually on September 30 of each year and is payable on the
maturity date. On the maturity date, the Company shall pay as additional
interest on the Notes, an amount equal to the greater of 4% of net operating
income of the Company from November 7, 1989 through and including the
maturity date, or 15% of the fair market value of the Company, but in no
event shall the amount exceed $2,153,000. Accreted and accrued interest was
$28,252,730, $25,299,651 and $19,883,183 at June 30, 1996, December 31, 1995
and December 31, 1994, respectively. These notes were issued with warrants
to purchase up to 595 shares of common stock and up to 1,000 shares of 6%
non-cumulative preferred stock. These warrants are exercisable in whole or
in part through November 7, 1999 for an aggregate exercise price of
$2,000,000. Upon exercise, the warrants can be converted into either Class A
Voting Stock or Class B Non-Voting Stock at the option of the warrant
holder. Shares will be issued in the ratio of .595 shares of common stock to
each share of preferred stock. As a result of the recapitalization (See Note
5), the number of shares the warrant holders were entitled to purchase was
increased to 233,359 shares of common stock, in the ratio of 233.359 shares
of common stock to each share of preferred stock. Total proceeds from the
issuance of these warrants amounted to $1,200,000.

The Senior Subordinated and Junior Subordinated Notes will continue to earn
interest at the rate of 15.5% and 13.1%, respectively, although, unless any of
certain specified defaults occur, net proceeds of a sale will be distributed as
provided for in the Override Agreement. The Company leased equipment under a
lease agreement which is classified as a capital lease. The lease term is 3
years and expires in December, 1996.

In 1989 the Company entered into an interest cap agreement and an interest floor
agreement covering $25,000,000 of borrowings which expired November 1, 1994.
Under the cap agreement, Fleet Bank, (as successor to Bank of New England), made
payments to the Company on a quarterly basis in an amount equal to $25,000,000
multiplied by the excess of the then current three month LIBOR rate over 9%.
Under the floor agreement, the Company made

F-66
<PAGE> 178

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(4) NOTES AND LOANS PAYABLE (CONTINUED)
payments to Crestar Bank on a quarterly basis in an amount equal to $25,000,000
multiplied by the difference between the then current three month LIBOR rate and
8%, to the extent that the three month LIBOR rate is less than 8%. Approximately
793,000 was charged to interest expense and paid in 1994 relating to the floor
agreement.

The Senior Debt and Senior Subordinated Notes are secured by substantially all
the assets of the Company. The Company's debt agreements contain certain
restrictive covenants requiring the maintenance of minimum subscriber levels and
certain financial ratios. The Company has not been in compliance with certain
covenants in its debt agreements, including the timely payment of principal and
interest. (See Note 1).

Debt Maturities

All of the Company's debt is due upon the consummation of the sale of the
Company in accordance with the Forbearance and Override Agreements. (see Note
1).

(5) CAPITAL STOCK

The Company's Board of Directors adopted a resolution on December 31, 1995
which, among other things, established a new class of common stock (Class D),
and authorized the exchange of the outstanding Class A shares for one share of
Class A and 99,999 shares of Class D. Additional shares of Class B and Class C
stock were authorized as well. The Company's Certificate of Incorporation was
amended on February 29, 1996 to reflect these changes.

Capital stock of the Company at December 31, 1994 and prior to the December 31,
1995 resolution noted above, consisted of the following:

<TABLE>
<CAPTION>
-----------------------
NUMBER OF SHARES
-------------------------
ISSUED AND
AUTHORIZED OUTSTANDING
---------- -----------
<S> <C> <C>
Common Stock
Class A -- $.10 par value 850 255
Class B -- $.10 par value 595
Class C -- $.10 par value 150
6% Non-cumulative Preferred
Stock $1,000 par value 1,000
</TABLE>

Capital stock of the Company after the recapitalization consists of the
following at June 30, 1996 and December 31, 1995:

<TABLE>
<CAPTION>
-----------------------
NUMBER OF SHARES
-------------------------
ISSUED AND
AUTHORIZED OUTSTANDING
---------- -----------
<S> <C> <C>
Common Stock
Class A -- $.10 par value 233,360 1
Class B -- $.10 par value 231,940
Class C -- $.10 par value 58,531
Class D -- $.10 par value 99,999 99,999
6% Non-cumulative Preferred
Stock $1,000 par value 1,000
</TABLE>

F-67
<PAGE> 179

AMERICAN CABLE ENTERTAINMENT OF KENTUCKY-INDIANA, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(5) CAPITAL STOCK (CONTINUED)

The Class A common stock is voting. The Class B, Class C and Class D shares are
non-voting. Class B shares are convertible into Class A shares at a rate of one
for one. See Note 4 for disclosure of warrants for unissued capital stock at
June 30, 1996, December 31, 1995 and 1994.

(6) TRANSACTIONS WITH RELATED PARTIES

KYMC acts as manager for the Company. In accordance with the management
agreement, KYMC is paid a management fee equal to 3% of total revenue (as
defined in the management agreement) plus out-of-pocket expenses not to exceed
1% of total revenue. The management fee for the six months ended June 30, 1996
and 1995 and the years ended December 31, 1995, 1994 and 1993 was $457,225,
$412,408, $842,644, $819,095 and $749,305 respectively.

Included in accounts payable and accrued expenses at December 31, 1994 is a
payable in the amount of $151,190 to Scott Cable Communications, Inc. ("Scott"),
an affiliated Company, for certain administrative costs paid by Scott on behalf
of the Company.

(7) COMMITMENTS

The Company rents pole space, office space and equipment under operating leases.
Future minimum payments, by year and in the aggregate, under noncancelable
operating leases with terms of one year or more are as follows:

<TABLE>
<S> <C>
1996 $132,081
1997 104,417
1998 59,412
1999 56,006
2000 45,182
Thereafter 53,675
---------
Total $450,773
=========
</TABLE>

Rent expense for the six months ended June 30, 1996 and 1995 and the years ended
December 31, 1995, 1994 and 1993 was $114,615, $101,572, $202,652, $204,164 and
$207,901 respectively.

(8) 401K RETIREMENT/SAVINGS PLAN

The Company's employees are covered by a 401(k) retirement/savings plan covering
all employees who meet service requirements. Total plan expenses for the six
months ended June 30, 1996 and 1995 and the years ended December 31, 1995, 1994
and 1993 was $4,302, $5,281, $7,660, $5,769 and $7,099, respectively.

(9) REGULATORY MATTERS

On October 5, 1992, Congress enacted the Cable Television Consumer Protection
and Competition Act of 1992 (the "1992 Cable Act") which regulates the cable
television industry. Pursuant to the 1992 Cable Act, the Federal Communications
Commission (the "FCC") has issued numerous regulations which include provisions
regarding rates and other matters. As a result of these rules, the Company was
required to reduce many of its basic service rates effective September 1, 1993,
and again on August 1, 1994.

On June 5, 1995, the FCC extended regulatory relief to small cable operators.
All of the Company's cable systems qualified for this regulatory relief, which
allows for greater flexibility in establishing rates (including increases). On
February 8, 1996, Congress enacted the 1996 Telecommunications Act which, among
other things, immediately deregulated all levels of service except broadcast
basic service for small cable operators for which all of the Company's cable
systems qualified.

F-68
<PAGE> 180

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Triax Southeast Associates, L.P.:

We have audited the accompanying balance sheets of Triax Southeast Associates,
L.P. (a Delaware limited partnership) as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital and cash flows for the years
ended December 31, 1995, 1994 and 1993. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Triax Southeast Associates,
L.P. as of December 31, 1995 and 1994, and the results of its operations and its
cash flows for the years ended December 31, 1995, 1994 and 1993, in conformity
with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Denver, Colorado,
February 27, 1996.

F-69
<PAGE> 181

TRIAX SOUTHEAST ASSOCIATES, L.P.
BALANCE SHEETS

<TABLE>
<CAPTION>
-----------------------------------------
DECEMBER 31,
JUNE 30, --------------------------
1996 1995 1994
----------- ----------- -----------
Unaudited
<S> <C> <C> <C>
ASSETS
CASH $ 3,168,693 $ 3,380,723 $ 699,077
RECEIVABLES, net of allowance of $5,844, $29,985 and
$52,302 at June 30, 1996 and December 31, 1995 and
1994, respectively 576,897 600,866 542,832
PREPAID EXPENSES 123,758 167,908 174,821
INVENTORY 44,012 346,274 444,624
PROPERTY, PLANT AND EQUIPMENT, net 36,786,462 38,761,227 36,496,820
PURCHASED INTANGIBLES, net 8,703,234 9,542,002 10,105,115
OTHER ASSETS, net 835,897 933,591 1,118,718
----------- ----------- -----------
TOTAL ASSETS $50,238,953 $53,732,591 $49,582,007
========== ========== ==========
LIABILITIES AND PARTNERS' CAPITAL
ACCRUED INTEREST EXPENSE $ 222,944 $ 258,223 $ 168,559
ACCOUNTS PAYABLE AND OTHER ACCRUED EXPENSES 1,616,598 1,710,636 1,962,757
SUBSCRIBER PREPAYMENTS AND DEPOSITS 77,069 71,105 42,470
PAYABLE TO AFFILIATES 158,641 239,021 227,355
DEBT 40,276,715 42,546,539 35,787,218
----------- ----------- -----------
TOTAL LIABILITIES 42,351,967 44,825,524 38,188,359
PARTNERS' CAPITAL:
General Partner (61,130) (50,929) (26,063)
Limited Partners 7,948,116 8,957,996 11,419,711
----------- ----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $50,238,953 $53,732,591 $49,582,007
========== ========== ==========
</TABLE>

The accompanying notes to financial statements are an integral part of these
balance sheets.

F-70
<PAGE> 182

TRIAX SOUTHEAST ASSOCIATES, L.P.
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
----------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
-------------------------- ----------------------------------------
1996 1995 1995 1994 1993
----------- ----------- ----------- ----------- ----------
Unaudited
<S> <C> <C> <C> <C> <C>
REVENUES $ 9,602,887 $ 8,581,062 $17,780,041 $15,057,652 $7,810,891
----------- ----------- ----------- ----------- ----------
EXPENSES:
Programming 1,916,197 1,649,407 3,400,604 2,661,058 1,128,730
Operating, selling, general
and administrative 2,892,796 2,465,703 5,104,803 4,489,003 2,268,325
Overhead expenses paid to
affiliate 111,218 103,567 211,993 176,705 74,393
Management fees paid to
affiliate 480,144 429,052 888,996 752,882 390,545
Depreciation and amortization 3,698,247 3,763,761 7,344,035 6,252,573 3,307,310
----------- ----------- ----------- ----------- ----------
9,098,602 8,411,490 16,950,431 14,332,221 7,169,303
Operating Income 504,285 169,572 829,610 725,431 641,588
Interest Expense, net 1,524,366 1,640,977 3,316,191 2,359,980 1,056,256
----------- ----------- ----------- ----------- ----------
NET LOSS $(1,020,081) $(1,471,405) $(2,486,581) $(1,634,549) $ (414,668)
========== ========== ========== ========== =========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-71
<PAGE> 183

TRIAX SOUTHEAST ASSOCIATES, L.P.
STATEMENTS OF PARTNERS' CAPITAL

<TABLE>
<CAPTION>
--------------------------------------
GENERAL LIMITED
PARTNER PARTNERS TOTAL
-------- ----------- -----------
<S> <C> <C> <C>
BALANCES, DECEMBER 31, 1992 $ (5,571) $ 6,448,436 $ 6,442,865
Contributions -- 7,000,000 7,000,000
Net loss (4,147) (410,521) (414,668)
-------- ----------- -----------
BALANCES, DECEMBER 31, 1993 (9,718) 13,037,915 13,028,197
Net loss (16,345) (1,618,204) (1,634,549)
-------- ----------- -----------
BALANCES, DECEMBER 31, 1994 (26,063) 11,419,711 11,393,648
Net loss (24,866) (2,461,715) (2,486,581)
-------- ----------- -----------
BALANCES, DECEMBER 31, 1995 (50,929) 8,957,996 8,907,067
Net loss unaudited (10,201) (1,009,880) (1,020,081)
-------- ----------- -----------
BALANCES, JUNE 30, 1996 unaudited $(61,130) $ 7,948,116 $ 7,886,986
======= ========== ==========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-72
<PAGE> 184

TRIAX SOUTHEAST ASSOCIATES, L.P.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
------------------------- --------------------------------------------
1996 1995 1995 1994 1993
---------- ----------- ------------ ------------ ------------
Unaudited)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,020,081) $(1,471,405) $ (2,486,581) $ (1,634,549) $ (414,668)
Adjustments to reconcile net loss to net
cash flows from operating activities:
Depreciation and amortization 3,698,247 3,763,761 7,344,035 6,252,573 3,307,310
(Increase) decrease in receivables, net 23,969 30,593 (58,034) 6,042 (345,197)
(Increase) decrease in prepaid expenses 44,150 (54,531) 6,913 (128,309) (20,657)
(Decrease) increase in accrued interest
expense (35,279) (40,014) 89,664 26,923 (45,894)
(Decrease) increase in accounts payable
and other accrued expenses (94,038) (148,725) (252,121) 803,714 274,125
(Decrease) increase in subscriber
prepayments and deposits 5,964 46,562 28,635 (3,886) 17,495
(Decrease) increase in payable to
affiliates (80,380) (10,786) 11,666 72,286 30,849
---------- ----------- ------------ ------------ ------------
Net cash flows from operating activities 2,542,552 2,115,455 4,684,177 5,394,794 2,803,363
---------- ----------- ------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of properties, including
purchased intangibles -- (6,065,116) (6,065,116) (74,203) (25,342,487)
Purchase of property, plant and equipment (887,472) (1,257,397) (2,369,183) (3,643,894) (1,269,346)
Proceeds from sale of property, plant and
equipment 108,042 -- -- -- --
(Increase) decrease in inventory 302,262 88,748 98,350 263,815 (610,502)
Increase in franchise costs and other assets (7,590) (47,230) (10,387) (121,663) --
---------- ----------- ------------ ------------ ------------
Net cash flows from investing activities (484,758) (7,280,995) (8,346,336) (3,575,945) (27,222,335)
---------- ----------- ------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings -- 5,400,000 9,400,000 1,000,000 19,400,000
Repayment of borrowings (2,204,000) (600,000) (2,880,000) (2,500,000) (1,400,000)
Partners' contributions -- -- -- -- 7,000,000
Cash paid for loan costs -- (22,660) (66,520) (117,107) (340,789)
Repayment of capital lease obligations (65,824) (44,788) (109,675) (60,007) (24,725)
---------- ----------- ------------ ------------ ------------
Net cash flows from financing activities (2,269,824) 4,732,552 6,343,805 (1,677,114) 24,634,486
---------- ----------- ------------ ------------ ------------
NET INCREASE IN CASH (212,030) (432,988) 2,681,646 141,735 215,514
CASH, beginning of period 3,380,723 699,077 699,077 557,342 341,828
---------- ----------- ------------ ------------ ------------
CASH, end of period $3,168,693 $ 266,089 $ 3,380,723 $ 699,077 $ 557,342
========== =========== =========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for interest $1,626,196 $ 1,680,991 $ 3,268,546 $ 2,333,057 $ 1,102,150
========== =========== =========== =========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Acquisitions with capital leases $ -- $ -- $ 164,996 $ 233,047 $ 66,236
========== =========== =========== =========== ===========
Note issued for acquisition of properties $ -- $ 184,000 $ 184,000 $ -- $ --
========== =========== =========== =========== ===========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-73
<PAGE> 185

TRIAX SOUTHEAST ASSOCIATES, L.P.
NOTES TO FINANCIAL STATEMENTS

(1) THE PARTNERSHIP

Organization and Capitalization

Triax Southeast Associates, L.P. (the "Partnership") is a Delaware limited
partnership formed January 23, 1992 for the purpose of acquiring, constructing,
owning, and operating cable television systems, located primarily in Kentucky,
North Carolina, West Virginia and Ohio. The Partnership was capitalized and
commenced operations on July 28, 1992, with $7,000,000 of limited partner
contributions and a $70,000 demand non-interest bearing note from its general
partner, Triax Southeast General Partner, L.P. ("Southeast, G.P."). Triax
Investors Southeast, L.P. ("Investors"), a limited partnership in which Triax
Southeast Associates, Inc. ("Southeast Inc."), a Delaware corporation, is the
general partner, contributed $1,000,000 to the Partnership.

Southeast Inc. is a wholly owned subsidiary of Triax Communications Corporation
("TCC"), a Delaware corporation. Southeast Inc. contributed capital of
$1,000,000 and a $59,500 demand non-interest bearing note to Investors for a
general partnership interest. In addition, Southeast Inc. contributed a $700
demand non-interest bearing note to Southeast, G.P. for a general partnership
interest. Investors contributed a $59,500 demand non-interest bearing note for a
limited partner interest in Southeast, G.P.

On December 15, 1993, the Partnership Agreement was amended to reflect
additional capital contributions of $7,000,000 by certain limited partners.
Southeast Inc. contributed $1,250,000 to Investors, who in turn contributed an
additional $1,250,000 to the Partnership.

The Partnership Agreement, as amended, provides that at any time after April 30,
1997, upon notice from a majority of the limited partners that they desire to
cause a sale of the Partnership's assets and business (or all of the interests
in the Partnership), TCC may purchase all of the Partnership's assets and
business (or all of the interests in the Partnership), subject to the approval
of the majority of limited partners. In addition, after July 31, 1998, each
limited partner who has made capital contributions in excess of $1,000,000 may
cause the sale of the Partnership's assets and business and liquidation of the
Partnership. The above dates may be extended to 1998 or 1999 to coincide with
the revised termination date of one of the limited partner's partnership
agreement, if and when the limited partner extends the termination date.

Allocation of Profits, Losses and Distributions

Profits

The Partnership Agreement, as amended, provides that profits will be allocated
as follows: (i) 1% to the general partner and 99% to the limited partners until
profits allocated to them equal losses previously allocated; (ii) to the limited
partners until the limited partners have been allocated profits equal to a 12%
per annum cumulative preferred return on their capital contributions plus the
amount of losses previously allocated; then, (iii) 20% to the general partner
and 80% to the limited partners.

Losses

The Partnership Agreement, as amended, provides that losses will be allocated 1%
to the general partner and 99% to the limited partners, except no losses shall
be allocated to any limited partner which would cause the limited partner's
capital account to become negative by an amount greater than the limited
partner's share of the Partnership's "minimum gain" (the excess of the
Partnership's nonrecourse debt over its adjusted basis in the assets encumbered
by nonrecourse debt), as defined, plus any amount of Partnership debt assumed by
the limited partner or any amount the limited partner is obligated to contribute
to the Partnership; then 100% to the general partner.

Distributions

The Partnership Agreement, as amended, provides that Distributable Cash, as
defined, will be distributed as follows: (i) to the partners in proportion to
their Capital Contribution Accounts, as defined, until the balances are

F-74
<PAGE> 186

TRIAX SOUTHEAST ASSOCIATES, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(1) THE PARTNERSHIP (CONTINUED)
Allocation of Profits, Losses and Distributions (continued)
reduced to zero; (ii) to the limited partners until the limited partners have
received a 12% per annum cumulative preferred return on their capital
contributions and then, (iii) 20% to the general partner and 80% to the limited
partners.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Interim Financial Statements

The financial statements and related footnote disclosures as of June 30, 1996
and for the three months ended June 30, 1996 and 1995 are unaudited. In
management's opinion, the unaudited financial statements as of June 30, 1996 and
for the three months ended June 30, 1996 and 1995 include all adjustments
necessary for a fair presentation. Such adjustments were of a normal recurring
nature.

Revenue Recognition

Revenues are recognized in the period the related services are provided to the
subscribers.

Income Taxes

No provision has been made for federal, state or local income taxes because they
are the responsibility of the individual partners. The principal difference
between net income or loss for income tax and financial reporting purposes
results from the use of accelerated depreciation for tax purposes.

Inventory

Inventory is carried at historical cost, which approximates market value, and
consists primarily of installation materials and addressable trap changers.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Replacements, renewals and
improvements are capitalized and costs for repairs and maintenance are charged
directly to expense when incurred. The Partnership capitalized a portion of
technician and installer salaries to property , plant, and equipment which
amounted to approximately $207,000 for the six months ended June 30, 1996 and
$283,000 and $422,000 for the years ended December 31,

F-75
<PAGE> 187

TRIAX SOUTHEAST ASSOCIATES, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1995 and 1994, respectively. Depreciation and amortization are computed using
the straightline method over the following estimated useful lives:

<TABLE>
<CAPTION>
----------------------------------------------------------
DECEMBER 31,
JUNE 30, ---------------------------
1996 1995 1994 LIFE
------------ ------------ ----------- -----------
Unaudited
<S> <C> <C> <C> <C>
Property, plant and equipment $ 51,876,708 $ 51,188,466 $43,704,363 5-10 years
Less: Accumulated depreciation (15,090,246) (12,427,239) (7,207,543)
------------ ------------ -----------
$ 36,786,462 $ 38,761,227 $36,496,820
=========== =========== ==========
</TABLE>

Purchased Intangibles

Purchased intangibles are being amortized using the straight-line method over
the following estimated useful lives:

<TABLE>
<CAPTION>
-------------------------------------------------------
DECEMBER 31,
MARCH 31, --------------------------
1996 1995 1994 LIFE
----------- ----------- ----------- -----------
Unaudited
<S> <C> <C> <C> <C>
Franchise costs $13,026,848 $13,026,720 $11,832,807 10 years
Noncompete agreements 850,000 850,000 1,700,000 3 years
----------- ----------- -----------
13,876,848 13,876,720 13,532,807
Less: Accumulated amortization (5,173,614) (4,334,718) (3,427,692)
----------- ----------- -----------
$ 8,703,234 $ 9,542,002 $10,105,115
========== ========== ==========
</TABLE>

During 1995, the Partnership wrote-off approximately $1,000,000 of noncompete
agreements, and the associated accumulated amortization, as the noncompete
agreements had expired.

Impairment of Long-Lived Assets

The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Standards No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets To Be Disposed Of" ("SFAS 121"). SFAS 121 requires
that long-lived assets and certain identifiable intangibles to be held and used
by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. SFAS 121 is required to be adopted by the Company in fiscal 1996.
Management believes the adoption of SFAS 121 will not have a material impact on
the financial statements.

F-76
<PAGE> 188

TRIAX SOUTHEAST ASSOCIATES, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Other Assets

Other assets are being amortized using the straight-line method over the
following estimated useful lives:

<TABLE>
<CAPTION>
---------------------------------------------------
DECEMBER 31,
JUNE 30, --------------------------
1996 1995 1994 LIFE
----------- ----------- ----------- -----------
Unaudited
<S> <C> <C> <C> <C>
Loan costs $ 1,111,608 $ 1,111,608 $ 1,084,999 5 years
Organization costs 441,435 441,435 441,435 5 years
Other 11,337 3,875 -- 10 years
----------- ----------- -----------
1,564,380 1,556,918 1,526,434
Less: Accumulated
amortization (728,483) (623,327) (407,716)
----------- ----------- -----------
$ 835,897 $ 933,591 $ 1,118,718
========= ========= =========
</TABLE>

(3) ACQUISITIONS

On February 28, 1995, the Partnership acquired certain cable television systems
and related assets of Rodgers Cable TV, Inc. ("Rodgers"). The purchase price of
approximately $5,700,000, including closing costs, was accounted for by the
purchase method of accounting and allocated as follows:

<TABLE>
<S> <C>
Property, plant and equipment $4,580,000
Franchise costs 1,019,400
Non-compete 100,600
----------
Total cash paid $5,700,000
=========
</TABLE>

On March 31, 1995, the Partnership acquired cable television systems and related
assets of Green Tree Cable T.V., Inc. The purchase price of approximately
$570,000, including closing costs, was accounted for by the purchase method of
accounting and allocated as follows:

<TABLE>
<S> <C>
Property, plant and equipment $4,580,000
Franchise costs 1,019,400
Non-compete 100,600
----------
Total cash paid $5,700,000
=========
</TABLE>

On December 15, 1993, the Partnership acquired cable television systems and
related assets of C4 Media Cable South, L.P. for approximately $17 million, and
on December 21, 1993, acquired additional cable television system assets and
related liabilities of Charter Cable, Inc. for approximately $6.5 million.
Acquisition-related fees totalled approximately $700,000. The acquisitions were
financed by additional limited partners' contributions of $7 million, the
drawdown by the Partnership of $17.6 million under its amended Revolving Credit
and Term Loan and available cash of $750,000. The acquisitions were accounted
for by the purchase method of accounting and allocated as follows:

<TABLE>
<S> <C>
Property, plant and equipment $20,144,000
Franchise costs 2,756,000
Non-compete 600,000
-----------
Total cash paid $23,500,000
==========
</TABLE>

F-77
<PAGE> 189

TRIAX SOUTHEAST ASSOCIATES, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(4) DEBT

Debt consisted of the following at June 30, 1996, and December 31, 1995 and
1994, respectively.

<TABLE>
<CAPTION>
-----------------------------------------
DECEMBER 31,
JUNE 30, --------------------------
1996 1995 1994
----------- ----------- -----------
Unaudited
<S> <C> <C> <C>
Revolving Credit and Term Loan, interest
payable quarterly based on varying interest
rate options $40,000,000 $42,020,000 $35,500,000
Note Payable to seller -- 184,000 --
Vehicle leases 276,715 342,539 287,218
----------- ----------- -----------
$40,276,715 $42,546,539 $35,787,218
========== ========== ==========
</TABLE>

The Revolving Credit and Term Loan Agreement, as amended through February 28,
1995 (the "Revolver"), is collateralized by all property, plant and equipment,
inventory and accounts receivable of the Partnership and all rights under
present and future permits, licenses and franchises. On September 30, 1995, the
outstanding principal was converted into a term loan with quarterly payments
from December 31, 1995 through June 30, 2002. Commencing in 1996, within 120
days after the close of the fiscal year, the Partnership must make a mandatory
prepayment in an amount equal to 50% of the excess cash flow, as defined, for
the prior year. A commitment fee of 1/2% per annum is charged on the daily
unused portion of the commitment amount.

The Partnership entered into LIBOR interest rate agreements with the banks
related to the Revolver. The Partnership fixed the interest rate on $40 million
at 7.21% for the period from June 4, 1996 to August 5, 1996. The remaining
outstanding balance bears interest at prime plus 1%.

On July 1, 1994 the Partnership paid $135,000 for an interest rate cap of 7% on
the LIBOR rate on $18 million effective July 1, 1994 through July 1, 1996, and
on March 27, 1995, paid $62,000 for an interest rate cap of 7.5% on the LIBOR
rate on $10 million effective March 27, 1995 through March 27, 1997.

The loan agreement contains certain covenants, the more significant of which
include leverage and interest coverage ratios and limitations on capital
expenditures.

Debt maturities required as of December 31, 1995 are as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
- ---------------------------------- ---------------
<S> <C>
1996 $ 3,174,759
1997 4,731,241
1998 5,578,235
1999 6,842,304
2000 7,920,000
Thereafter 14,300,000
----------
$ 42,546,539
==========
</TABLE>

(5) RELATED PARTY TRANSACTIONS

TCC provides management services to the Partnership for a fee equal to 5% of
gross revenues, as defined. The Partnership incurred management fees totaling
$480,144 and $429,052 for the six months ended June 30, 1996 and 1995,
respectively, and $888,996, $752,882 and $390,545 in 1995, 1994 and 1993,
respectively.

TCC also allocates certain overhead expenses to the Partnership, based on
proportionate subscriber revenues, which primarily relate to employment costs,
which expenses are limited to 1.25% of gross revenues. These overhead

F-78
<PAGE> 190

TRIAX SOUTHEAST ASSOCIATES, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(5) RELATED PARTY TRANSACTIONS (CONTINUED)

expenses amounted to $111,218 and $103,567 for the six months ended June 30,
1996 and 1995, respectively, and $211,993, $176,705 and $74,393 in 1995, 1994
and in 1993, respectively.

TCC was paid acquisition fees of $235,000 in 1993 related to the acquisition of
certain assets. Such fees are included in purchased intangibles in the
accompanying balance sheets. TCC may be paid a disposition fee of 1% of the
sales price of the Partnership after certain approvals of the limited partners,
and after certain other conditions are met.

The Partnership purchases programming from TCC at TCC's cost, which includes
volume discounts TCC might earn.

(6) FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents approximates fair value
because of the nature of the investments and the length of maturity of the
investments.

The estimated fair value of the Partnership's debt instruments are based on
borrowing rates that would be equal to existing rates, therefore, there is no
material difference in the fair market value and the current value.

(7) REGULATORY MATTERS

In October 1992, Congress enacted the Cable Television Consumer and Competition
Act of 1992 (the "1992 Cable Act") which greatly expanded federal and local
regulation of the cable television industry. In April 1993, the Federal
Communications Commission ("FCC") adopted comprehensive regulations, effective
September 1, 1993, governing rates charged to subscribers for basic cable and
cable programming services (other than programming offered on a per-channel or
per-program basis). The FCC implemented regulation which allowed cable operators
to justify regulated rates in excess of the FCC benchmarks through cost of
service showings at both the franchising authority level for basic service and
to the FCC in response to complaints on rates for cable programming services.

In February 1996, the Telecommunications Act of 1996 was enacted which, among
other things, deregulated cable rates for small systems on their programming
tiers.

To date, the FCC's regulations have not had a material adverse effect on the
Partnership due to the lack of certifications by the local franchising
authorities.

F-79
<PAGE> 191

PROSPECTUS SUBJECT TO COMPLETION

[FRONTIERVISION LOGO] DATED SEPTEMBER 11, 1996 ALTERNATE

FRONTIERVISION OPERATING PARTNERS, L.P.

FRONTIERVISION CAPITAL CORPORATION

$
% Senior Subordinated Notes due 2006
Interest payable and
ISSUE PRICE: %

This Prospectus relates to offers and sales by J.P. Morgan Securities Inc. of
% Senior Subordinated Notes due 2006 (the "Notes") which have been issued
by FrontierVision Operating Partners, a Delaware limited partnership ("FVOP" or
the "Company"), and FrontierVision Capital Corporation, a Delaware corporation
("Capital") which is a wholly owned subsidiary of FVOP. The Notes are the joint
and several obligations of FVOP and Capital (collectively, the "Issuers"). The
Notes were originally purchased by J.P. Morgan Securities Inc. directly from the
Issuers as part of the original offering of the Notes described herein.

The Notes mature on , 2006, unless previously redeemed. Interest on the
Notes is payable semiannually on each and , commencing
, 1997. The Notes are not redeemable prior to , 2001, except as
set forth below. The Notes will be redeemable at the option of the Issuers, in
whole or in part, at any time on or after , 2001, at the redemption
prices set forth herein, together with accrued and unpaid interest to the
redemption date. In addition, prior to , 1999, the Issuers may
redeem up to 35% of the principal amount of the Notes with the net cash proceeds
received from one or more Public Equity Offerings or Strategic Equity
Investments (as such terms are defined) at a redemption price of % of the
principal amount thereof, together with accrued and unpaid interest to the
redemption date; provided, however, that at least 65% in aggregate principal
amount of the Notes originally issued remains outstanding immediately after any
such redemption.

The Notes will be general unsecured obligations of the Issuers and will rank
subordinate in right of payment to all existing and future Senior Indebtedness
(as defined) of the Issuers. The Notes will rank pari passu in right of payment
with any other senior subordinated indebtedness of the Issuers. At June 30,
1996, as adjusted to give effect to the Rights Offering (as defined) and to the
Transactions (as defined herein) the Company would have had approximately $193.3
million of Senior Indebtedness outstanding.

SEE "RISK FACTORS" BEGINNING ON PAGE 14 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

This Prospectus has been prepared for and is to be used by J.P. Morgan
Securities Inc. in connection with offers and sales of the Notes related to
market-making transactions in the over-the-counter market at negotiated prices
related to prevailing market prices at the time of sale. J.P. Morgan Securities
Inc. may act as principal or agent in such transactions. See "Plan of
Distribution."

J.P. MORGAN & CO.
, 1996

A-1
<PAGE> 192

ALTERNATE

PLAN OF DISTRIBUTION

This Prospectus is to be used by J.P. Morgan Securities Inc. in connection with
offers and sales of the Notes in market-making transactions in the
over-the-counter market at negotiated prices related to prevailing market prices
at the time of sale. J.P. Morgan Securities Inc. may act as principal or agent
in such transactions and has no obligation to make a market in the Notes and may
discontinue its market-making activities at any time without notice, at its sole
discretion. The Issuers have agreed to indemnify J.P. Morgan Securities Inc.
against certain liabilities, including liabilities under the Securities Act, or
to contribute to payments that J.P. Morgan Securities Inc. may be required to
make in respect thereof.

An affiliate of J.P. Morgan Securities Inc. beneficially owns approximately
20.47% of the partnership interests of the Company. See "Certain Relationships
and Related Transactions," "Principal Security Holders" and "The Partnership
Agreement."

A-2
<PAGE> 193

PROSPECTUS SUBJECT TO COMPLETION

[FRONTIERVISION LOGO] DATED SEPTEMBER 11, 1996 ALTERNATE

FRONTIERVISION OPERATING PARTNERS, L.P.

FRONTIERVISION CAPITAL CORPORATION

$
% Senior Subordinated Notes due 2006
Interest payable and
ISSUE PRICE: %

This Prospectus relates to offers and sales by First Union Capital Markets Corp.
of % Senior Subordinated Notes due 2006 (the "Notes") which have been
issued by FrontierVision Operating Partners, a Delaware limited partnership
("FVOP" or the "Company"), and FrontierVision Capital Corporation, a Delaware
corporation ("Capital") which is a wholly owned subsidiary of FVOP. The Notes
are the joint and several obligations of FVOP and Capital (collectively, the
"Issuers"). The Notes were originally purchased by First Union Capital Markets
Corp. directly from the Issuers as part of the original offering of the Notes
described herein.

The Notes mature on , 2006, unless previously redeemed. Interest on the
Notes is payable semiannually on each and , commencing
, 1997. The Notes are not redeemable prior to , 2001, except as
set forth below. The Notes will be redeemable at the option of the Issuers, in
whole or in part, at any time on or after , 2001, at the redemption
prices set forth herein, together with accrued and unpaid interest to the
redemption date. In addition, prior to , 1999, the Issuers may
redeem up to 35% of the principal amount of the Notes with the net cash proceeds
received from one or more Public Equity Offerings or Strategic Equity
Investments (as such terms are defined) at a redemption price of % of the
principal amount thereof, together with accrued and unpaid interest to the
redemption date; provided, however, that at least 65% in aggregate principal
amount of the Notes originally issued remains outstanding immediately after any
such redemption.

The Notes will be general unsecured obligations of the Issuers and will rank
subordinate in right of payment to all existing and future Senior Indebtedness
(as defined) of the Issuers. The Notes will rank pari passu in right of payment
with any other senior subordinated indebtedness of the Issuers. At June 30,
1996, as adjusted to give effect to the Rights Offering (as defined) and to the
Transactions (as defined herein) the Company would have had approximately $193.3
million of Senior Indebtedness outstanding.

SEE "RISK FACTORS" BEGINNING ON PAGE 14 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

This Prospectus has been prepared for and is to be used by First Union Capital
Markets Corp. in connection with offers and sales of the Notes related to
market-making transactions in the over-the-counter market at negotiated prices
related to prevailing market prices at the time of sale. First Union Capital
Markets Corp. may act as principal or agent in such transactions. See "Plan of
Distribution."

FIRST UNION CAPITAL MARKETS CORP.
, 1996

A-3
<PAGE> 194

ALTERNATE

PLAN OF DISTRIBUTION

This Prospectus is to be used by First Union Capital Markets Corp. in connection
with offers and sales of the Notes in market-making transactions in the
over-the-counter market at negotiated prices related to prevailing market prices
at the time of sale. First Union Capital Markets Corp. may act as principal or
agent in such transactions and has no obligation to make a market in the Notes
and may discontinue its market-making activities at any time without notice, at
its sole discretion. The Issuers have agreed to indemnify First Union Capital
Markets Corp. against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments that First Union Capital Markets
Corp. may be required to make in respect thereof.

An affiliate of First Union Capital Markets Corp. beneficially owns
approximately 12.28% of the partnership interests of the Company. See "Certain
Relationships and Related Transactions," "Principal Security Holders" and "The
Partnership Agreement."

A-4
<PAGE> 195

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate of the fees and expenses, other than underwriting
discounts and commissions, payable by the Registrants in connection with the
Offering. All amounts are estimated except the filing fees:

<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............. $ 68,966
NASD Filing Fee................................................. 20,500
Printing and Engraving Fees..................................... 250,000
Blue Sky Fees and Expenses...................................... 45,000
Rating Agency Fees.............................................. 145,000
Fees of Trustee................................................. 7,500
Legal Fees and Expenses......................................... 352,000
Accounting Fees and Expenses.................................... 100,000
Miscellaneous................................................... 11,034
----------
Total...................................................... $1,000,000
=========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 5.6 of the First Amended and Restated Agreement of Limited Partnership
of FVP, dated as of August 11, 1995 (the "FVP Partnership Agreement"), provides
that in the absence of fraud, breach of fiduciary duty, willful misconduct or
gross negligence, FVP GP, its partners, their respective officers, directors,
employees, agents or stockholders (including when any of the foregoing is
serving at the request of FVP GP on behalf of FVP as a partner, officer,
director, employee or agent of any other Person) (as such term is defined in the
FVP Partnership Agreement) (in each case, the "Indemnitee") shall not be liable
to any other partner of FVP or FVP (i) for any mistake in judgment, (ii) for any
action taken or omitted to be taken in good faith and in a manner reasonably
believed by such Person to be in the best interests of FVP and to be within the
scope of its authority under the FVP Partnership Agreement, or (iii) for any
loss due to the mistake, action, inaction, negligence, dishonesty, fraud or bad
faith of any broker or other agent, provided that such broker or other agent
shall have been selected and supervised by FVP GP or other Indemnitee with
reasonable care. In addition, Indemnitees will be indemnified and held harmless
by FVP against losses, damages and expenses for which such Person has not
otherwise been reimbursed actually and reasonably incurred by such Person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding (other than any action by or in the name
of FVP), by reason of any action taken or omitted to be taken in connection with
or arising out of such Person's activities on behalf of FVP or in furtherance of
FVP, if such actions were taken or omitted to be taken in good faith and in a
manner reasonably believed by such Person to be in the best interests of FVP and
within the scope of the FVP Partnership Agreement, provided, that any Person
entitled to indemnification shall obtain the written consent of FVP GP (which
consent will not be given without the approval of the Advisory Committee) prior
to entering into any compromise or settlement which would result in an
obligation of FVP to indemnify such Person.

Section 5.6 of the First Amended and Restated Agreement of Limited Partnership
of FVP GP, dated as of August 11, 1995 (the "FVP GP Partnership Agreement"),
provides that in the absence of fraud, breach of fiduciary duty, willful
misconduct or gross negligence, FrontierVision Inc., its officers, directors,
employees, agents or stockholders (including when any of the foregoing is
serving at the request of FrontierVision Inc. on behalf of FVP GP or FVP as a
partner, officer, director, employee or agent of any other Person) (as such term
is defined in the FVP GP Partnership Agreement) (in each case, the "Indemnitee")
shall not be liable to any other partner of FVP GP or FVP GP (i) for any mistake
in judgment, (ii) for any action taken or omitted to be taken in good faith and
in a manner reasonably believed by such Person to be in the best interests of
FVP GP and to be within the scope of its authority under the FVP GP Partnership
Agreement, or (iii) for any loss due to the mistake, action, inaction negligence
dishonesty, fraud or bad faith of any broker or other agent, provided that such
broker or other agent shall have been selected and supervised by FrontierVision
Inc. or other Indemnitee with reasonable care. In addition,

II-1
<PAGE> 196

Indemnitees will be indemnified and held harmless by FVP GP against losses,
damages and expenses for which such person has not otherwise been reimbursed
actually and reasonably incurred by such Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than any action by or in the name of FVP GP), by
reason of any action taken or omitted to be taken in connection with or arising
out of such Person's activities on behalf of FVP GP or in furtherance of FVP GP,
if such actions were taken or omitted to be taken in good faith and in a manner
reasonably believed by such person to be in the best interests of FVP GP and
within the scope of the FVP GP Partnership Agreement, provided, that any Person
entitled to indemnification shall obtain the written consent of FrontierVision
Inc. (which consent will not be given without the consent of a majority in
interest of the Class X Limited Partners (as such term is defined in the FVP GP
Partnership Agreement)) prior to entering into any compromise or settlement
which would result in an obligation of FVP GP to indemnify such person.

Section 102(b)(7) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a corporation (in its original certificate of
incorporation or an amendment thereto) may eliminate or limit the personal
liability of a director (or certain persons who, pursuant to the provisions of
the certificate of incorporation, exercise or perform duties conferred or
imposed upon directors by the DGCL) to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provisions shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(providing for liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions) or (iv) for any transaction from which
the director derived an improper personal benefit. Article Tenth of
FrontierVision Inc.'s Certificate of Incorporation and Article Eleventh of
Capital's Certificate of Incorporation each limit the liability of directors
thereof to the extent permitted by Section 102(b)(7) of the DGCL.

Under Section 145 of the DGCL, in general, a corporation may indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties to which they may be made parties by reason of their being or
having been directors, officers, employees or agents and shall so indemnify such
persons if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The following is a summary of securities sold by the Registrants during the past
three years without registration under the Act:

1. On July 15, 1995, in connection with the formation of the Company,
the Company issued to FVP a 99.9% general partner interest in the Company
for cash consideration of $99.90. Simultaneously, the Company issued to
FrontierVision Operating Partners, Inc. a 0.1% limited partnership interest
for cash consideration of $.10.

2. On July 26, 1996, in connection with the formation of Capital,
Capital issued to the Company 100 shares of the voting common stock of
Capital, one cent ($.01) par value per share, for cash consideration of
$100.00.

In the foregoing instances, the issuance of the general partner interest in the
Company and the limited partnership interest in the Company and the issuance of
the voting common stock of Capital were deemed to be exempt from the
registration requirements of the Act as a transaction not involving any public
offering, pursuant to Section 4(2) of the Act. The recipients of securities in
each such transaction represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof. All recipients had adequate access, through their
relationships with the Company and Capital, to information about the Company and
Capital.

II-2
<PAGE> 197

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

<TABLE>
<C> <C> <S>
1 -- Form of Underwriting Agreement.
**3.1 -- The Company's Agreement of Limited Partnership.
**3.2 -- Certificate of Limited Partnership of the Company.
**3.3 -- First Amended and Restated Agreement of Limited Partnership of FVP.
**3.4 -- Certificate of Limited Partnership of FVP.
**3.5 -- First Amended and Restated Agreement of Limited Partnership of FVP GP.
**3.6 -- Certificate of Limited Partnership of FVP GP.
**3.7 -- Certificate of Incorporation of FrontierVision Inc.
**3.8 -- Bylaws of FrontierVision Inc.
**3.9 -- Certificate of Incorporation of FrontierVision Capital Corporation.
**3.10 -- Bylaws of FrontierVision Capital Corporation.
4.1 -- Form of Indenture by and among the Registrants and Colorado National Bank, as
Trustee, relating to the Notes.
4.2 -- Form of Note (included as part of Exhibit 4.1).
5 -- Opinion of Dow, Lohnes & Albertson.
**10.1 -- Senior Credit Facility.
**10.2 -- Employment Agreement of James C. Vaughn.
**10.3 -- Asset Purchase Agreement dated July 20, 1995 between United Video Cablevision,
Inc. and FrontierVision Operating Partners, L.P.
10.4 -- Asset Acquisition Agreement (July 27, 1995 Auction Sale) dated as of July 27,
1995 among Stephen S. Gray in his capacity as Receiver of Longfellow Cable
Company, Inc., Carrabassett Electronics and Carrabassett Cable Company, Inc. and
FrontierVision Operating Partners, L.P.
**10.5 -- Asset Purchase Agreement dated October 27, 1995 among C4 Media Cable Southeast,
Limited Partnership, County Cable Company, L.P. and FrontierVision Operating
Partners, L.P.
**10.6 -- Asset Purchase Agreement dated November 17, 1995 among Cox Communications Ohio,
Inc., Times Mirror Cable Television of Defiance, Inc., Chillicothe Cablevision,
Inc., Cox Communications Eastern Kentucky, Inc. and FrontierVision Operating
Partners, L.P.
**10.7 -- Asset Purchase Agreement dated February 27, 1996 between Americable
International Maine, Inc. and FrontierVision Operating Partners, L.P.
**10.8 -- Asset Purchase Agreement dated May 16, 1996 among Triax Southeast Associates,
L.P., Triax Southeast General Partner, L.P. and FrontierVision Operating
Partners, L.P.
**10.9 -- Asset Purchase and Sale Agreement dated June 21, 1996 between HPI Acquisition
Co. LLC (assignee of Helicon Partners I, LP) and FrontierVision Operating
Partners, L.P.
**10.10 -- Asset Purchase Agreement dated July 15, 1996 between American Cable
Entertainment of Kentucky-Indiana, Inc. and FrontierVision Operating Partners,
L.P.
**10.11 -- Asset Purchase Agreement dated as of July 30, 1996 between Shenandoah Cable
Television Company and FrontierVision Operating Partners, L.P.
10.12 -- Purchase Agreement dated as of August 6, 1996 between Penn/Ohio Cablevision,
L.P. and FrontierVision Operating Partners, L.P.
**10.13 -- Asset Purchase Agreement dated July 19, 1996 between Phoenix Grassroots Cable
Systems, L.L.C. and FrontierVision Operating Partners, L.P. FrontierVision
Operating Partners, L.P.
10.14 -- Amendment No. 1 to Senior Credit Facility
12 -- Statement of Computation of Ratios.
23.1 -- Consent of Arthur Andersen LLP (FrontierVision Operating Partners, L.P.).
23.2 -- Consent of Arthur Andersen LLP (FrontierVision Capital Corporation).
23.3 -- Consent of Arthur Andersen LLP (FrontierVision Partners, L.P.).
23.4 -- Consent of Piaker & Lyons, P.C. (United Video Cablevision, Inc.).
23.5 -- Consent of Williams, Rogers, Lewis & Co., I.C. (C4 Media Cable Southeast,
Limited Partnership).
23.6 -- Consent of Arthur Andersen LLP (Triax Southeast Associates, L.P.).
23.7 -- Consent of Deloitte & Touche LLP (American Cable Entertainment of
Kentucky-Indiana, Inc.).
23.8 -- Consent of Deloitte & Touche LLP (Ashland and Defiance, Ohio Clusters).
23.9 -- Consent of Dow, Lohnes & Albertson (contained in Exhibit 5).
**25 -- Powers of attorney (included on signature page to this Registration Statement).
</TABLE>

II-3
<PAGE> 198

<TABLE>
<C> <C> <S>
26 -- Statement of Eligibility on Form T-1 of Colorado National Bank, as Trustee.
27 -- Financial Data Schedule.
</TABLE>

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

** Previously filed.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company, FVP,
FVP GP, FrontierVision Inc. and Capital pursuant to the provisions described
under Item 14 above or otherwise, the Registrants have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrants of expenses incurred or paid by a director,
officer or controlling person of the Registrants in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrants will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by them is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

Each of the Registrants hereby undertakes that:

(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed part of this Registration Statement as
of the time it was declared effective.

(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at such time shall be deemed
to be the initial bona fide offering thereof.

II-4
<PAGE> 199

Signatures

Pursuant to the requirements of the Securities Act of 1933, as amended,
FrontierVision Operating Partners, L.P. has duly caused this Amendment No. 2 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 11th day of September 1996.

FRONTIERVISION OPERATING PARTNERS, L.P.

By: FrontierVision Partners, L.P., its
general partner,

By: FVP GP, L.P., its general partner

By: FrontierVision Inc., its general
partner

By: /s/ JAMES C. VAUGHN
-----------------------------------
JAMES C. VAUGHN
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 2 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ ------------------------------ -------------------
<S> <C> <C>
/s/ JAMES C. VAUGHN President, Chief Executive September 11, 1996
- ------------------------------------------ Officer, and Director of
JAMES C. VAUGHN FrontierVision Inc. (Principal
Executive Officer)

* Senior Vice President, Chief September 11, 1996
- ------------------------------------------ Financial Officer, Secretary
JOHN S. KOO and Director of FrontierVision
Inc. (Principal Financial
Officer)

* Vice President and Treasurer September 11, 1996
- ------------------------------------------ of FrontierVision Inc.
JAMES W. MCHOSE (Principal Accounting Officer)
</TABLE>

* James C. Vaughn, by signing his name hereto, does sign this document on behalf
of each of the persons indicated above for whom he is attorney-in-fact
pursuant to a power of attorney duly executed by such person and filed with
the Securities and Exchange Commission.

By: /s/ JAMES C. VAUGHN
-----------------------------------
JAMES C. VAUGHN
Attorney-In-Fact

II-5
<PAGE> 200

Signatures

Pursuant to the requirements of the securities Act of 1933, as amended,
FrontierVision Capital Corporation has duly caused this Amendment No. 2 to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, on the 11th day of September, 1996.

FRONTIERVISION CAPITAL CORPORATION

By: /s/ JAMES C. VAUGHN
-------------------------------------
JAMES C. VAUGHN
President

Pursuant to the requirements of the securities Act of 1933, as amended,
this Amendment No. 2 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------ ------------------------------ -------------------
<S> <C> <C>
/s/ JAMES C. VAUGHN President and Director of September 11, 1996
- ------------------------------------------ FrontierVision Capital
JAMES C. VAUGHN Corporation (Principal
Executive Officer)

* Senior Vice President, Chief September 11, 1996
- ------------------------------------------ Financial Officer, Secretary
JOHN S. KOO and Director of FrontierVision
Capital Corporation (Principal
Financial Officer)

* Vice President and Treasurer September 11, 1996
- ------------------------------------------ of FrontierVision Capital
JAMES W. MCHOSE Corporation (Principal
Accounting Officer)
</TABLE>

By: /s/ JAMES C. VAUGHN
-----------------------------------
JAMES C. VAUGHN
Attorney-In-Fact

II-6
<PAGE> 201

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------ -------------
<C> <S> <C>
1 Form of Underwriting Agreement. ........................................
**3.1 The Company's Agreement of Limited Partnership. ........................
**3.2 Certificate of Limited Partnership of the Company. .....................
**3.3 First Amended and Restated Agreement of Limited Partnership of FVP. ....
**3.4 Certificate of Limited Partnership of FVP. .............................
**3.5 First Amended and Restated Agreement of Limited Partnership of FVP
GP. ....................................................................
**3.6 Certificate of Limited Partnership of FVP GP. ..........................
**3.7 Certificate of Incorporation of FrontierVision Inc. ....................
**3.8 Bylaws of FrontierVision Inc. ..........................................
**3.9 Certificate of Incorporation of FrontierVision Capital Corporation. ....
**3.10 Bylaws of FrontierVision Capital Corporation. ..........................
4.1 Form of Indenture by and among the Registrants and Colorado National
Bank, as Trustee, relating to the Notes. ...............................
4.2 Form of Note (included as part of Exhibit 4.1). ........................
5 Opinion of Dow, Lohnes & Albertson. ....................................
**10.1 Senior Credit Facility. ................................................
**10.2 Employment Agreement of James C. Vaughn. ...............................
**10.3 Asset Purchase Agreement dated July 20, 1995 between United Video
Cablevision, Inc. and FrontierVision Operating Partners, L.P. ..........
10.4 Asset Acquisition Agreement (July 27, 1995 Auction Sale) dated as of
July 27, 1995 among Stephen S. Gray in his capacity as Receiver of
Longfellow Cable Company, Inc., Carrabassett Electronics and
Carrabassett Cable Company, Inc. and FrontierVision Operating Partners,
L.P. ...................................................................
**10.5 Asset Purchase Agreement dated October 27, 1995 among C4 Media Cable
Southeast, Limited Partnership, County Cable Company, L.P. and
FrontierVision Operating Partners, L.P. ................................
**10.6 Asset Purchase Agreement dated November 17, 1995 among Cox
Communications Ohio, Inc., Times Mirror Cable Television of Defiance,
Inc., Chillicothe Cablevision, Inc., Cox Communications Eastern
Kentucky, Inc. and FrontierVision Operating Partners, L.P. .............
**10.7 Asset Purchase Agreement dated February 27, 1996 between Americable
International Maine, Inc. and FrontierVision Operating Partners,
L.P. ...................................................................
**10.8 Asset Purchase Agreement dated May 16, 1996 among Triax Southeast
Associates, L.P., Triax Southeast General Partner, L.P. and
FrontierVision Operating
Partners, L.P. .........................................................
**10.9 Asset Purchase and Sale Agreement dated June 21, 1996 between HPI
Acquisition Co. LLC (assignee of Helicon Partners I, LP) and
FrontierVision Operating Partners, L.P. ................................
**10.10 Asset Purchase Agreement dated July 15, 1996 between American Cable
Entertainment of Kentucky-Indiana, Inc. and FrontierVision Operating
Partners, L.P. .........................................................
**10.11 Asset Purchase Agreement dated as of July 30, 1996 between Shenandoah
Cable Television Company and FrontierVision Operating Partners, L.P. ...
10.12 Purchase Agreement dated as of August 6, 1996 between Penn/Ohio
Cablevision, L.P. and FrontierVision Operating Partners, L.P. ..........
**10.13 Asset Purchase Agreement dated July 19, 1996 between Phoenix Grassroots
Cable Systems, L.L.C. and FrontierVision Operating Partners, L.P. ......
10.14 Amendment No. 1 to Senior Credit Facility...............................
12 Statement of Computation of Ratios. ....................................
23.1 Consent of Arthur Andersen LLP (FrontierVision Operating Partners,
L.P.). .................................................................
23.2 Consent of Arthur Andersen LLP (FrontierVision Capital Corporation). ...
</TABLE>

<PAGE> 202

<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------ -------------
<C> <S> <C>
23.3 Consent of Arthur Andersen LLP (FrontierVision Partners, L.P.). ........
23.4 Consent of Piaker & Lyons, P.C. (United Video Cablevision, Inc.). ......
23.5 Consent of Williams, Rogers, Lewis & Co., P.C., (C4 Media Cable
Southeast, Limited Partnership). .......................................
23.6 Consent of Arthur Andersen LLP (Triax Southeast Associates, L.P.). .....
23.7 Consent of Deloitte & Touche LLP (American Cable Entertainment of
Kentucky-Indiana, Inc.). ...............................................
23.8 Consent of Deloitte & Touche LLP (Ashland and Defiance, Ohio
Clusters). .............................................................
23.9 Consent of Dow, Lohnes & Albertson (contained in Exhibit 5). ...........
**25 Powers of attorney (included on signature page to this Registration
Statement). ............................................................
26 Statement of Eligibility on Form T-1 of Colorado National Bank, as
Trustee. ...............................................................
27 Financial Data Schedule. ...............................................
</TABLE>

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

** Previously filed.

<PAGE> 1

EXHIBIT 1

$ 200,000,000

FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION

_____% Senior Subordinated Notes due 2006

Underwriting Agreement

October ___, 1996

J.P. Morgan Securities Inc.
Chase Securities Inc.
CIBC Wood Gundy Securities Corp.
First Union Capital Markets Corp.
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060

Ladies and Gentlemen:

FrontierVision Operating Partners, L.P., a Delaware limited
partnership (the "Company"), and FrontierVision Capital Corporation, a Delaware
corporation and a wholly owned subsidiary of the Company ("Capital" and,
together with the Company, the "Issuers"), propose to issue and sell to the
several Underwriters listed in Schedule I hereto (the "Underwriters")
$200,000,000 aggregate principal amount of their _____% Senior Subordinated
Notes due 2006 (the "Securities"). The Securities will be issued pursuant to
the provisions of an Indenture (the "Indenture") to be dated as of October __,
1996 between the Issuers and Colorado National Bank, as Trustee (the
"Trustee").

The Issuers have prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Securities. The
registration statement as amended at the time when it shall become effective,
or, if a post-effective amendment is filed with respect thereto, as amended by
such post-effective amendment at the time of its effectiveness, including in
each case information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "Registration Statement," and the
prospectus in the form first used to confirm sales of Securities is referred to
in this Agreement as the "Prospectus." If the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration
<PAGE> 2
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement.

The Issuers hereby agree with the Underwriters as follows:

1. The Issuers agree to issue and sell the Securities to the several
Underwriters as hereinafter provided, and each Underwriter, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Issuers the respective principal amount of Securities set forth
opposite such Underwriter's name in Schedule I hereto at a price (the "Purchase
Price") equal to ______% of their principal amount plus accrued interest, if
any, from ______________, 1996 to the date of payment and delivery.

Each of the Issuers shall have joint and several liability in respect
of all obligations hereunder and under the Securities and the Indenture. Each
of the Issuers hereby acknowledges that this Agreement is the independent and
several obligation of each of the Issuers and may be enforced against either of
the Issuers separately, whether or not enforcement of any right or remedy
hereunder has been sought against the other Issuer. Each of the Issuers hereby
expressly waives, with respect to any of the amounts owing hereunder by the
other Issuer in respect of the obligations (collectively, the "Other Issuer
Obligations"), diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that the Underwriters exhaust any
right, power or remedy or proceed against such other Issuer under this
Agreement, the Securities or the Indenture or any other agreement or instrument
referred to herein or therein, or against any other person with respect to any
of such Other Issuer Obligations.

2. The Issuers understand that the Underwriters intend (i) to make a
public offering of their respective portions of the Securities as soon after
(A) the Registration Statement has become effective and (B) the parties hereto
have executed and delivered this Agreement, as in the judgment of the
Underwriters is advisable and (ii) initially to offer the Securities upon the
terms set forth in the Prospectus.

3. Payment for the Securities shall be made on the Closing Date (as
defined below) by wire transfer in immediately available funds to the account
specified by the Issuers to the Underwriters, no later than noon on the
Business Day (as defined below) prior to the Closing Date, on ____________,
1996, or at such other time on the same or such other date, not later than the
fifth Business Day thereafter, as the Underwriters and the Issuers may agree
upon in writing. The time and date of such payment are referred to herein as
the "Closing Date." As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City.

Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the respective accounts of the
several Underwriters of the Securities of one or more global notes (the "Global
Note") representing the Securities, with

-2-
<PAGE> 3
any transfer taxes payable in connection with the transfer to the Underwriters
of the Securities duly paid by the Issuers. The Global Note will be made
available for inspection by the Underwriters at the office of J.P. Morgan
Securities Inc. at the address set forth above not later than 1:00 P.M., New
York City time, on the Business Day prior to the Closing Date.

4. The Issuers, jointly and severally, represent and warrant to each
Underwriter that:

(a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and each
preliminary prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the Securities Act, and did not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Issuers in writing by such Underwriter expressly for use therein;

(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Issuers,
threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented prior to the Closing Date if
the Issuers shall have furnished any amendments or supplements
thereto) comply, or will comply, as the case may be, in all material
respects with the Securities Act and the Trust Indenture Act of 1939,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Trust Indenture Act") and do not and will not, as
of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the date of the Prospectus and any
amendment or supplement thereto, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they were
made) not misleading, and the Prospectus, as amended or supplemented,
if applicable, at the Closing Date will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the foregoing representations and warranties shall not apply to (i)
that part of the Registration Statement which constitutes the
Statement of Eligibility and Qualification (Form T-1) of the Trustee
under the Trust Indenture Act, and (ii) statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Issuers in writing by such Underwriter expressly for use therein;

-3-
<PAGE> 4
(c) the financial statements, and the related notes thereto,
included in the Registration Statement and the Prospectus present
fairly the financial position of (i) the Company, (ii) Capital, (iii)
the General Partner (as defined herein), (iv) the Maine and Ohio
Divisions of United Video Cablevision, Inc. (selected assets acquired
by the Company), (v) the Ashland and Defiance Clusters (as defined in
the Prospectus) of Cox Communications, Inc. (selected assets acquired
by the Company), (vi) C4 Media Cable Southeast, Limited Partnership,
(vii) Triax Southeast Associates, L.P. and (viii) American Cable
Entertainment of Kentucky-Indiana, Inc. (the entities specified in
clauses (iv) through (viii) collectively, the "Other Entities") as of
the dates indicated and the results of operations of the Company and
each of the Other Entities and the changes in their cash flows for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis, and the supporting schedules included in the
Registration Statement present fairly in all material respects the
information required to be stated therein; and the pro forma financial
information, and the related notes thereto, included in the
Registration Statement and the Prospectus has been prepared in
accordance with the applicable requirements of the Securities Act and
is based upon good faith estimates and assumptions believed by the
Issuers to be reasonable;

(d) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change in the equity interests or long-term debt of either of
the Issuers, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, business, management, financial position, partners'
equity, stockholders' equity or results of operations of the Issuers,
taken as a whole, otherwise than as expressly set forth or
contemplated in the Prospectus; and except as expressly set forth or
contemplated in the Prospectus neither of the Issuers has entered into
any transaction or agreement material to the Issuers, taken as a
whole;

(e) each of the Issuers has been duly organized or
incorporated, as the case may be, and is validly existing as a limited
partnership or corporation, as the case may be, in good standing under
the laws of the State of Delaware, with corporate or partnership
power, as the case may be, and authority and all necessary material
authorizations, approvals, orders, licenses, certificates and permits
of and from regulatory or governmental officials, bodies and tribunals
to (i) own its properties and conduct its business in all material
respects as described in the Prospectus, and (ii) enter into, deliver,
incur and perform its obligations under this Agreement, the Indenture
and the Securities; and each of the Issuers has been duly qualified as
a foreign limited partnership or foreign corporation, as the case may
be, for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, other
than where the failure to be so qualified or in good standing would
not reasonably be expected to have a Material Adverse Effect (as
defined herein);

-4-
<PAGE> 5
(f) the only subsidiary of the Company as of the date hereof
is Capital and all of the issued and outstanding capital stock of
Capital is owned by the Company and has been duly authorized and
validly issued and is owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity (other than pursuant to the Senior Credit Facility (as defined
in the Prospectus)); and Capital was formed by the Company for the
sole purpose of serving as a co-obligor on the Securities and does not
and will not engage in any other activities;

(g) the general partner of the Company is FrontierVision
Partners, L.P., a Delaware limited partnership (the "General
Partner"), which has been duly organized and is validly existing as a
limited partnership in good standing under the laws of the State of
Delaware with full partnership power and authority to own its
properties and to conduct its business as described in the Prospectus,
and has been duly qualified as a foreign limited partnership for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases property or conducts any
business so as to require such qualification other than where the
failure to be so qualified or in good standing would not reasonably be
expected to have a Material Adverse Effect;

(h) the general partner of the General Partner is FVP GP,
L.P., a Delaware limited partnership ("FVPGP"), which has been duly
organized and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware with full partnership
power and authority to own its properties and to conduct its business
as described in the Prospectus, and has been duly qualified as a
foreign limited partnership for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it
owns or leases property or conducts any business so as to require such
qualification other than where the failure to be so qualified or in
good standing would not reasonably be expected to have a Material
Adverse Effect;

(i) the general partner of FVPGP is FrontierVision Inc., a
Delaware corporation ("FV Inc."), which has been duly organized and is
validly existing as a corporation in good standing under the laws of
the State of Delaware with full corporate power and authority to own
its properties and to conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases property or
conducts any business so as to require such qualification other than
where the failure to be so qualified or in good standing would not
reasonably be expected to have a Material Adverse Effect;

(j) the capitalization of the Company is as set forth in the
Prospectus under the caption "Capitalization" under the subheading
"Actual," [except that ]; neither of the Issuers owns,
directly or indirectly, any shares or any other equity or long-term
debt securities or has any equity interest in any firm, partnership,
joint venture or other entity, other than the Company's equity
interest in Capital; and no holder of any

-5-
<PAGE> 6
securities of either Issuer is entitled to have such securities
registered under the Registration Statement;

(k) this Agreement has been duly authorized, executed and
delivered by each of the Issuers;

(l) the Securities have been duly authorized by each of the
Issuers, and, when issued and delivered pursuant to this Agreement
against payment therefor as provided herein and duly authenticated by
the Trustee, will have been duly executed, authenticated, issued and
delivered and will constitute valid and binding obligations of each of
the Issuers, entitled to the benefits provided by the Indenture,
except (a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium (whether general or specific),
fraudulent conveyance or similar laws relating to or affecting the
enforcement of creditors' rights generally, (b) the enforceability
thereof may be subject to the application of general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and (c) no representation is made herein concerning
the enforceability of (i) waivers of notice or of any other
constitutional, statutory or common law rights, including, without
limitation, waiver of stay, extension or usury laws, (ii)
indemnification provisions to the extent such provisions are deemed to
violate public policy or federal or state securities laws, and (iii)
submissions to the personal jurisdiction of any particular court; the
Indenture has been duly authorized by each of the Issuers and upon
effectiveness of the Registration Statement will have been duly
qualified under the Trust Indenture Act and, when executed and
delivered by the Issuers and the Trustee (assuming due authorization,
execution and delivery by the Trustee), the Indenture will constitute
a valid and binding instrument; and the Securities and the Indenture
will conform in all material respects to the descriptions thereof in
the Prospectus;

(m) the agreements, documents and instruments executed and
delivered in connection with the Rights Offering (as defined in the
Prospectus) as in effect as of the date of the Prospectus
(collectively, the "Rights Offering Documents") are in effect
substantially on the terms described in the Prospectus; and the
description in the Prospectus of the Rights Offering Documents is
accurate and complete in all material respects;

(n) neither of the Issuers is, or with the giving of notice
or lapse of time or both would be, in violation of or in default under
its respective Certificate of Limited Partnership, Limited Partnership
Agreement, Certificate of Incorporation or By-Laws (each an
"Organizational Document"), as the case may be, or any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which either of the Issuers is a party or by which
either of them or any of their respective properties is bound, except
for violations and defaults which would not reasonably be expected to
have a Material Adverse Effect; the issue and sale of the Securities
and the

-6-
<PAGE> 7
performance by each of the Issuers of all of its obligations under
this Agreement, the Securities and the Indenture and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default (including any default resulting after notice or
lapse of time or both) under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which either of the
Issuers is a party or by which either of them is bound or to which any
of the property or assets of either of them is subject, nor will any
such action result in any violation of the provisions of the
Organizational Documents of either of the Issuers or any applicable
law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over either of them or
any of their respective properties, including, without limitation, any
law, statute, rule or regulation, or any judgment, decree or order
applicable to the cable television industry in general except for
conflicts, breaches, defaults and violations which would not
reasonably be expected to have a Material Adverse Effect; and no
consent, approval, authorization, order, license, registration or
qualification of or with any such court or governmental agency or
body, including, without limitation, under the Communications Act of
1934, as amended (the "Communications Act"), the Cable Communications
Policy Act of 1984 (the "1984 Cable Act"), the Cable Television
Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act"), the Telecommunications Act of 1996 (the "1996 Telecom Act" and,
together with the 1984 Cable Act and the 1992 Cable Act, the "Cable
Acts") or any order, rule or regulation of the Federal Communications
Commission ("FCC"), is required for the issue and sale of the
Securities, the execution and delivery by each of the Issuers of, and
the performance by each of the Issuers of its obligations under, this
Agreement and the Indenture or the consummation by each of the Issuers
of the transactions contemplated by this Agreement and the Indenture
except (i) such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained and are in full
force and effect under the Securities Act, the Trust Indenture Act,
the Communications Act, the Cable Acts or any order, rule or
regulation of the FCC and such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters or (ii) where the
failure to obtain such consents, approvals, authorizations, orders,
licenses, registrations or qualifications would not reasonably be
expected to have a Material Adverse Effect;

(o) other than as set forth or contemplated in the Prospectus
(including those matters referred to therein relating to general
rulemakings and similar matters relating generally to the cable
television industry, in each case on a national, regional, state or
county basis), there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best knowledge of
each of the Issuers, threatened against or affecting either of the
Issuers or any of their respective properties or to which either of
the Issuers is or may be a party or to which any property of either of
the Issuers is or may be subject which, if determined adversely to
either of the Issuers, would individually or in the aggregate have, or
would reasonably be expected to have,

-7-
<PAGE> 8
a material adverse effect on the general affairs, business, prospects,
management, financial position, partners' equity, stockholders' equity
or results of operations of the Issuers, taken as a whole (any such
event, a "Material Adverse Effect"), and, to the best of each of the
Issuers' knowledge, no such proceedings are threatened by governmental
authorities or by others; and there are no statutes, regulations,
contracts or other documents that are required to be filed as an
exhibit to the Registration Statement or required to be described in
the Registration Statement or the Prospectus which are not filed or
described as required;

(p) Arthur Andersen, LLP, who have certified certain
financial statements of the Company, Capital, the General Partner and
Triax Southeast Associates, L.P., Piaker & Lyons, P.C., Williams,
Rogers, Lewis & Co., P.C. and Deloitte & Touche LLP, who have
certified certain financial statements of the Maine and Ohio Divisions
of United Video Cablevision, Inc. (selected assets acquired by the
Company), C4 Media Cable Southeast, Limited Partnership, American
Cable Entertainment of Kentucky-Indiana, Inc. and the Ashland and
Defiance Clusters of Cox Communications, Inc. (selected assets
acquired by the Company), respectively, are each independent public
accountants as required by the Securities Act;

(q) each of the Issuers has good and marketable title in fee
simple to all material items of real property owned by it and good and
marketable title to all material items of personal property owned by
it, in each case free and clear of all liens, encumbrances and
defects, except such as are described or referred to in the Prospectus
and except for any lien securing the obligations under the Senior
Credit Facility, liens otherwise permitted under the Senior Credit
Facility or such liens, encumbrances or defects as do not materially
affect the value of such property and do not interfere with the use
made or proposed to be made of such property by such Issuer in such a
manner as would reasonably be expected to result in a Material Adverse
Effect; and any real property and buildings held under lease by either
of the Issuers are held by such Issuer under valid, existing and
enforceable leases with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property
and buildings by such Issuer in such a manner as would reasonably be
expected to result in a Material Adverse Effect;

(r) no relationship, direct or indirect, exists between or
among either of the Issuers, on the one hand, and the directors,
officers, stockholders, holders of units of partnership interest,
customers or suppliers of either of the Issuers, on the other hand,
which is required by the Securities Act to be described in the
Registration Statement and the Prospectus which is not so described;

(s) neither of the Issuers is or, after giving effect to the
offering and sale of the Securities, will be an "investment company"
or entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");

-8-
<PAGE> 9
(t) each of the Issuers has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida)
relating to doing business with the Government of Cuba or with any
person or affiliate located in Cuba or is exempt therefrom;

(u) each of the Issuers owns or possesses, or can acquire on
reasonable terms, adequate licenses, trademarks, service marks, trade
names, copyrights and know-how (including trade secrets and other
proprietary or confidential information, systems or procedures)
(collectively, "intellectual property") necessary to conduct the
business of the Existing Systems and the Grassroots Systems now or
proposed to be operated by it as described in the Prospectus, except
where the failure to own, possess or have the ability to acquire any
such intellectual property would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect;
and, except as disclosed in the Prospectus, neither of the Issuers has
received any notice of infringement of or conflict with (and neither
knows of any such infringement of or conflict with) asserted rights of
others with respect to any of such intellectual property which, if any
such assertions of infringement or conflict were sustained,
individually or in the aggregate, would reasonably be expected to have
a Material Adverse Effect;

(v) each of the Issuers owns, possesses or has obtained all
franchises, licenses, permits, certificates, consents, orders,
approvals and other authorizations (collectively, "Permits") from, and
has made all declarations and filings (collectively, "Filings") with,
all federal, state, local and other governmental authorities including
the FCC, and all courts and other tribunals (collectively, the
"Governmental Authorities") required to own or lease, as the case may
be, and to operate the Existing Systems and the Grassroots Systems (as
such terms are defined in the Prospectus) and to carry on the
business of the Existing Systems and the Grassroots Systems in the
manner and to the full extent now operated or proposed to be operated
as described in the Prospectus, except where the failure to obtain
such Permits or make such Filings, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect;
such Permits contain no materially burdensome restrictions not
customarily imposed by Governmental Authorities on cable television
systems of the same class and type as those owned by the Issuers other
than such as would not have a Material Adverse Effect; the execution
and delivery by each of the Issuers of, and the performance by each of
the Issuers of its obligations under, this Agreement and the
Indenture, the consummation of the transactions contemplated hereby
and thereby, and the operation of the Existing Systems and the
Grassroots Systems in the manner and to the full extent now operated
or proposed to be operated as described in the Prospectus, did not or
will not result in a violation of the Communications Act, the Cable
Acts or any order, rule or regulation of the FCC or any other
Governmental Authority except for violations that, individually or in
the aggregate, would not reasonably be expected to have a Material
Adverse Effect; the business and operations of the Issuers comply in
all respects with the Communications Act, the Cable Acts and all
published orders, rules and regulations of the FCC except for any such
non-compliance as would not reasonably be expected to have a Material

-9-
<PAGE> 10
Adverse Effect, and to the best of each of the Issuers' knowledge, no
event has occurred which permits, or with notice or lapse of time or
both would permit, the revocation or non-renewal of any Permits or
Filings, or which might result in any other material impairment of the
rights of the Issuers in the Permits except for any such revocation,
non-renewal or impairment which would not reasonably be expected to
have a Material Adverse Effect; and, other than matters described in
the Prospectus and except as to any other matters relating generally
to the cable television industry (in each case on a national,
regional, state or county basis), there is no proceeding pending or,
to each of the Issuers' best knowledge, threatened before the FCC or
any other Governmental Authority that has or would be reasonably
expected to have a Material Adverse Effect; and each of the Issuers is
in compliance with all laws and regulations relating to the conduct of
its business as conducted as of the date hereof except for any such
non-compliance as would not reasonably be expected to have a Material
Adverse Effect;

(w) the statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources which the Issuers believe to be reliable and accurate;

(x) to the best knowledge of either of the Issuers, there are
no existing or threatened labor disputes with the employees of either
of the Issuers which reasonably are likely to have a Material Adverse
Effect;

(y) each of the Issuers (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to
conduct its respective businesses and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect; and

(z) each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), that is maintained, administered or contributed
to by either of the Issuers or any of their affiliates for employees
or former employees of either of the Issuers and their affiliates has
been maintained in compliance in all material respects with its terms
and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative
exemption; and for each such plan

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<PAGE> 11
which is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and
the present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions does not materially exceed the
fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions).

5. Each of the Issuers, jointly and severally, covenants and agrees
with each of the several Underwriters as follows:

(a) to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
required, to file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act; and to furnish copies of the Prospectus to the
Underwriters in New York City prior to 10:00 a.m., New York City time,
on the Business Day next succeeding the date of this Agreement, or as
soon thereafter as possible, in such quantities as the Underwriters
may reasonably request;

(b) to deliver, at the expense of the Issuers, to the
Underwriters, four signed copies of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits, and, during the period mentioned in paragraph (e) below, to
each of the Underwriters as many copies of the Prospectus (including
all amendments and supplements thereto) as the Underwriters may
reasonably request;

(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the
time the Registration Statement becomes effective, to furnish to the
Underwriters a reasonable time prior to the proposed filing thereof a
copy of the proposed amendment or supplement for review and not to
file any such proposed amendment or supplement to which the
Underwriters reasonably object;

(d) to advise the Underwriters promptly, and to confirm such
advice in writing, (i) when the Registration Statement has become
effective, (ii) when any amendment to the Registration Statement has
been filed or becomes effective, (iii) when any supplement to the
Prospectus or any amendment to the Prospectus has been filed and to
furnish the Underwriters with copies thereof, (iv) of any request by
the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus
or the Prospectus or the initiation or threatening of any proceeding
for that purpose, (vi) of the occurrence of any event or any
information becoming known, within the period referenced in paragraph
(e) below of this Section 5, as a result of which the Prospectus as
then amended or supplemented would include an untrue

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<PAGE> 12
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, and (vii) of the receipt by either of the Issuers of any
notification with respect to any suspension of the qualification of
the Securities for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and to
use its best efforts to prevent the issuance of any such stop order,
or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any order suspending any such
qualification of the Securities, or notification of any such order
thereof and, if issued, to obtain as soon as possible the withdrawal
thereof;

(e) if, during such period of time after the first date of
the public offering of the Securities as in the opinion of counsel for
the Underwriters a prospectus relating to the Securities is required
by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or information become known as a result
of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare (subject to
paragraph (c) above of this Section 5) and furnish, at the expense of
the Issuers, to the Underwriters and to the dealers (whose names and
addresses the Underwriters will furnish to the Issuers) to which
Securities may have been sold by the Underwriters and to any other
dealers upon request, such amendments or supplements to the Prospectus
as may be necessary so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus will comply with law;

(f) to endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Underwriters shall reasonably request and to continue such
qualification in effect so long as reasonably required for
distribution of the Securities; provided, however, that neither of the
Issuers shall be required to file a general consent to service of
process in any jurisdiction or to qualify as a foreign limited
partnership or corporation, as the case may be, or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject;

(g) to make generally available to its security holders and
to the Underwriters as soon as practicable earnings statements
covering a period of at least twelve months beginning with the first
fiscal quarter of each of the Issuers occurring after the effective
date of the Registration Statement which shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder;

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<PAGE> 13
(h) so long as the Securities are outstanding, to furnish to
the Underwriters copies of all reports or other communications
(financial or other) furnished to holders of the Securities, and
copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange;

(i) to use the net proceeds received by the Issuers from the
sale of the Securities pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds";

(j) to file with the Commission such reports on Form SR as
may be required by Rule 463 under the Securities Act;

(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all costs and expenses incident to the performance of
its obligations hereunder, including without limiting the generality
of the foregoing, all costs and expenses (i) incident to the
preparation, issuance, execution, authentication and delivery of the
Securities, including any expenses of the Trustee (including
reasonable legal fees and disbursements of counsel to the Trustee),
(ii) incident to the preparation, printing and filing under the
Securities Act of the Registration Statement, the Prospectus and any
preliminary prospectus (including in each case all exhibits,
amendments and supplements thereto), (iii) incurred in connection with
the registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as
the Underwriters may designate (including reasonable fees of counsel
for the Underwriters and their disbursements), (iv) related to any
filing with the National Association of Securities Dealers, Inc. (the
"NASD") and any fees and expenses (including reasonable legal fees and
disbursements) of any "qualified independent underwriter" required by
the NASD, (v) in connection with the printing (including word
processing and duplication costs) and delivery of the Preliminary and
Supplemental Blue Sky Memoranda and any Legal Investment Survey and
the furnishing to Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and
shipping, as herein provided, (vi) payable to rating agencies in
connection with the rating of the Securities, and (vii) any expenses
incurred by the Issuers in connection with a "road show" presentation
to potential investors; provided, however, that, except as provided in
this Section 5 or otherwise provided in Section 7 or 11 hereof, the
Underwriters will pay all of their own costs and expenses, including
without limitation the fees of their counsel and any advertising
expenses associated with any offers they may make.

The Underwriters also agree with the Issuers that (i) if instructed by
the Company, the Underwriters shall refrain from delivering to any person or
entity any Prospectus during such period as may reasonably be necessary for the
Issuers to prepare any necessary amendment or supplement to the Registration
Statement or Prospectus in accordance with the terms of this

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<PAGE> 14
Agreement, and (ii) in connection with secondary transactions, each Underwriter
shall deliver at any time only the Prospectus as most recently amended or
supplemented. The Issuers agree, promptly upon the amendment or supplement of
the Prospectus, to furnish to the Underwriters as many copies of the
Prospectus, as so amended or supplemented, as the Underwriters may reasonably
request.

6. The several obligations of the Underwriters hereunder to
purchase the Securities on the Closing Date are subject to the performance by
the Issuers of their obligations hereunder and to the following additional
conditions:

(a) the Registration Statement shall have become effective
(or if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:30 P.M., New York City time, on the date
hereof; and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; the Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under
the Securities Act and in accordance with Section 5(a) hereof; and all
requests from the Commission for additional information shall have
been complied with to the reasonable satisfaction of the Underwriters;

(b) the representations and warranties of the Issuers
contained herein shall be true and correct on and as of the Closing
Date as if made on and as of the Closing Date and the Issuers shall
have complied with all agreements and all conditions on their part to
be performed or satisfied hereunder at or prior to the Closing Date;

(c) subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
downgrading, (ii) any intended or potential downgrading or (iii) any
review or possible change that does not indicate an improvement, in
the rating accorded any securities of or guaranteed by either of the
Issuers by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act;

(d) since the respective dates as of which information is
given in the Prospectus, there shall not have been any change in the
equity interests or long-term debt of either of the Issuers or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
business, management, financial position, stockholders' equity,
partners' equity or results of operations of the Issuers, taken as a
whole, otherwise than as expressly set forth or contemplated in the
Prospectus, the effect of which in the reasonable judgment of the
Underwriters makes it impracticable or inadvisable to proceed with the
public

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<PAGE> 15
offering or the delivery of the Securities on the Closing Date on the
terms and in the manner contemplated in the Prospectus;

(e) the Underwriters shall have received on and as of the
Closing Date certificates of an executive officer of each of the
Issuers, with specific knowledge about the applicable Issuer's
financial matters, reasonably satisfactory to the Underwriters to the
effect set forth in subsections (a) through (c) (with respect to the
respective representations, warranties, agreements and conditions of
each of the Issuers) of this Section and to the further effect that
there has not occurred any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, business, management, financial position,
stockholders' equity, partners' equity or results of operations of the
Issuers, taken as a whole, from that set forth or contemplated in the
Registration Statement;

(f) Dow, Lohnes & Albertson, counsel for the Issuers, shall
have furnished to the Underwriters their written opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the
Underwriters, to the effect that:

(i) the Company has been duly organized and is
validly existing as a limited partnership in good standing
under the laws of the State of Delaware, with partnership
power and authority to own its properties and conduct its
business as described in the Prospectus;

(ii) Capital has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware with corporate power and authority to
own its properties and conduct its business as described in
the Prospectus;

(iii) based solely on a review of certificates from the
appropriate governmental authorities in each jurisdiction
listed below, the Company has been duly qualified as a foreign
limited partnership for the transaction of business and is in
good standing under the laws of Colorado, Georgia, Indiana,
Kentucky, Maine, Maryland, North Carolina, Ohio, Pennsylvania,
Tennessee, Virginia and West Virginia;

(iv) the General Partner has been duly organized and
is validly existing as a limited partnership in good standing
under the laws of the State of Delaware with full partnership
power and authority to own its properties and to conduct its
business as described in the Prospectus, and, based solely on
a review of certificates from the appropriate governmental
authorities in such jurisdictions, has been duly qualified as
a foreign limited partnership for the transaction of business
and is in good standing under the laws of Colorado, Georgia,
Maine, Maryland, North Carolina, Ohio, Pennsylvania,
Tennessee, Virginia and West Virginia;

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<PAGE> 16
(v) FVPGP has been duly organized and is validly
existing as a limited partnership in good standing under the
laws of the State of Delaware with full partnership power and
authority to own its properties and to conduct its business as
described in the Prospectus, and, based solely on a review of
certificates from the appropriate governmental authorities in
such jurisdictions, has been duly qualified as a foreign
limited partnership for the transaction of business and is in
good standing under the laws of Colorado, Georgia, Maine,
Maryland, North Carolina, Pennsylvania, Tennessee, Virginia
and West Virginia;

(vi) FV Inc. has been duly organized and is validly
existing as a corporation in good standing under the laws of
the State of Delaware with full corporate power and authority
to own its properties and to conduct its business as described
in the Prospectus, and, based solely on a review of
certificates from the appropriate governmental authorities in
such jurisdictions, has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of Colorado, Georgia, Maine, Maryland,
North Carolina, Pennsylvania, Tennessee, Virginia and West
Virginia;

(vii) to such counsel's knowledge, based solely upon
its review of the publicly available records of the FCC and
upon inquiry of the Company's management, and only with respect
to the period that the Existing Systems and the Grassroots
Systems have been owned by the Company, other than as set
forth or contemplated in the Prospectus (including those
matters referred to therein relating to general rulemakings
and similar matters relating generally to the cable television
industry (in each case on a national, regional, state or
county basis)), there are no legal or governmental
investigations, actions, suits or proceedings pending or
threatened against or affecting specifically either of the
Issuers or any of their respective properties or to which
either of the Issuers is or may be a party or to which any
property of either of the Issuers is or may be subject which,
if determined adversely to either of the Issuers, would
individually or in the aggregate have, or reasonably be
expected to have, a Material Adverse Effect;

(viii) this Agreement has been duly authorized, executed
and delivered by each of the Issuers;

(ix) assuming due authorization, execution and
delivery of the Indenture by the Trustee, the Securities have
been duly authorized, executed and delivered by each of the
Issuers and, when duly authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement,
will constitute valid and binding obligations of each of the
Issuers entitled to the benefits provided by the Indenture,
enforceable in accordance with the terms thereof except (a)
the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium (whether general or
specific), fraudulent conveyance or similar laws relating to
or affecting the enforcement of creditors' rights generally,
(b) the

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<PAGE> 17
enforceability thereof may be subject to the application of
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and
(c) no opinion shall be expressed concerning the
enforceability of (i) waivers of notice or of any other
constitutional, statutory or common law rights, including,
without limitation, waiver of stay, extension or usury laws,
(ii) indemnification provisions to the extent such provisions
are deemed to violate public policy or federal or state
securities laws, and (iii) submission to the personal
jurisdiction of any particular court;

(x) the Indenture has been duly authorized, executed
and delivered by each of the Issuers and (assuming the due
authorization, execution and delivery thereof by the Trustee)
constitutes a valid and binding instrument of each of the
Issuers, enforceable against each of the Issuers in accordance
with its terms, except (a) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium
(whether general or specific), fraudulent conveyance or other
similar laws relating to or affecting creditors' rights
generally, (b) the enforceability thereof may be subject to
the application of general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law) and (c) no opinion shall be expressed concerning the
enforceability of (i) waivers of notice or of any other
constitutional, statutory or common law rights, including,
without limitation, waiver of stay, extension or usury laws,
(ii) indemnification provisions to the extent such provisions
are deemed to violate public policy or federal or state
securities laws, and (iii) submission to the personal
jurisdiction of any particular court; and the Indenture has
been duly qualified under the Trust Indenture Act;

(xi) the Securities and the Indenture conform in all
material respects to the descriptions thereof in the
Prospectus under the caption "Description of the Notes";

(xii) the execution and delivery of this Agreement and
the Indenture; the issuance and sale of the Securities and
the performance by each of the Issuers of its obligations
under the Securities, this Agreement and the Indenture and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default
(including any default resulting after notice or lapse of time
or both) under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument that has been filed
as an exhibit to the Registration Statement, nor will any such
action result in any violation of

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<PAGE> 18
the provisions of the Organizational Documents of
either of the Issuers or the Communications Act, the Cable
Acts, any rule or regulation of the FCC or any other law or
statute customarily applicable to transactions of the type
contemplated by this Agreement or the Indenture or to such
counsel's knowledge, any other applicable law or statute or to
such counsel's knowledge, any order, rule or regulation of any
court or governmental agency or body having jurisdiction over
either of them or any of their respective properties,
including, without limitation, any federal law, statute, rule
or regulation, or to such counsel's knowledge, any judgment,
decree or order generally applicable to the cable television
industry (in each case on a national, regional, state or
county basis), except for conflicts, breaches, defaults and
violations which individually and in the aggregate would not
reasonably be expected to have a Material Adverse Effect;

(xiii) no consent, approval, authorization, order,
license, registration or qualification of or with any court or
governmental agency or body, including, without limitation,
under the Communications Act, the Cable Acts or any order,
rule or regulation of the FCC, is required for the issuance
and sale of the Securities, the execution and delivery by each
of the Issuers of, and the performance by each of the Issuers
of its obligations under, this Agreement and the Indenture or
the consummation by each of the Issuers of the transactions
contemplated by this Agreement and the Indenture, except such
consents, approvals, authorizations, orders, licenses,
registrations or qualifications (i) as have been obtained and
in full force and effect under the Securities Act, the Trust
Indenture Act, the Communications Act, the Cable Acts or any
order, rule or regulation of the FCC and such as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the
Underwriters and (ii) that may be required in the future due
to the operations or actions of the Issuers, the Company's
cable systems or affiliated parties;

(xiv) the statements in the Prospectus under the
captions "Risk Factors -- Regulation in the Cable Television
Industry" and "Legislation and Regulation," insofar as such
statements summarize applicable provisions of the
Communications Act, the Cable Acts and the published orders,
rules and regulations of the FCC promulgated thereunder, are
accurate summaries in all material respects of the provisions
purported to be summarized under such captions in the
Prospectus; and the FCC statutes and regulations summarized
under such captions are the FCC statutes and regulations that
are material to the Issuers' business as described in the
Prospectus and which are required to be described pursuant to
the Securities Act;

(xv) neither of the Issuers is or, after giving effect
to the offering and sale of the Securities, will be an
"investment company" or entity "controlled" by an "investment
company", as such terms are defined in the Investment Company
Act;

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<PAGE> 19

(xvi) nothing has come to such counsel's attention that
leads such counsel to believe (i) that the Registration
Statement or any amendment or supplement thereto made by the
Issuers prior to the Closing Date (except for financial
statements and schedules and other financial and statistical
data included therein or omitted therefrom and any information
contained in any Form T-1 prepared by the Trustee under the
Indenture, as to which such counsel need make no statement),
at the time the Registration Statement or any such amendment
or supplement thereto became effective, contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) that the Prospectus or
any amendment or supplement thereto (except for financial
statements and schedules and other financial and statistical
data included therein or omitted therefrom and any information
contained in any Form T-1 prepared by the Trustee under the
Indenture, as to which such counsel need make no statement),
as of the date of the Prospectus, as of the date of any such
amended or supplemented prospectus or as of the Closing Date,
included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
(iii) that the Registration Statement, the Prospectus and each
amendment or supplement to the Registration Statement and the
Prospectus as of their respective effective time or issue
dates (other than the financial statements and schedules and
other financial and statistical data included therein or
omitted therefrom and any information contained in any Form
T-1 prepared by the Trustee under the Indenture, as to which
such counsel need make no statement) did not comply as to form
in all material respects with the requirements of the
Securities Act.

In rendering such opinions, such counsel may rely as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Issuers and certificates
or other written statements of public officials. With respect to the
matters to be covered in subparagraph (xvi) above such counsel's
opinion may state

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<PAGE> 20
that their opinion and belief expressed therein is based upon their
participation in conferences with officers and other representatives
of the Issuers, representatives of the independent certified public
accountants of the Issuers, and representatives and counsel of the
Underwriters, at which conferences the contents of the Registration
Statement and the Prospectus and related matters where discussed and,
that such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus
and has not made an independent investigation, check or verification
of facts for the purpose of rendering their opinion.

The opinion of Dow, Lohnes & Albertson described above shall
be rendered to the Underwriters at the request of the Issuers and
shall so state therein;

(g) on the effective date of the Registration Statement and
the effective date of the most recently filed post-effective amendment
to the Registration Statement and also on the Closing Date, Arthur
Andersen, LLP, Piaker & Lyons, P.C., Williams, Rogers, Lewis & Co.,
P.C. and Deloitte & Touche LLP shall have furnished to you letters,
dated the respective dates of delivery thereof, in form and substance
reasonably satisfactory to you, containing statements and information
of the type customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus;

(h) the Underwriters shall have received on and as of the
Closing Date an opinion of Cahill Gordon & Reindel, counsel to the
Underwriters, with respect to the validity of the Indenture and the
Securities, the Registration Statement, the Prospectus and other
related matters as the Underwriters may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;

(i) on the Closing Date the Senior Credit Facility shall be
in full force and effect with respect to the Company on the terms
described in the Prospectus and no breach or violation of any of the
material terms or provisions thereof or Event of Default (as defined
in the Senior Credit Facility) (or an event which, with notice or
lapse of time or both, would constitute an Event of Default)
thereunder shall exist;

(j) on the Closing Date the Rights Offering Documents shall
be in full force and effect with respect to the General Partner on the
terms described in the Prospectus and in form and substance reasonably
acceptable to the Underwriters and shall provide that not less than
$76 million of cash equity investment in the General Partner are
irrevocably committed by the investors thereunder, subject to certain
reductions as described in the Prospectus (which the General Partner
shall have committed, on terms reasonably acceptable to the
Underwriters, to provide as capital contributions to the Company); and

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<PAGE> 21
(k) on or prior to the Closing Date the Issuers shall have
furnished to the Underwriters such further certificates and documents
as the Underwriters shall reasonably request.

7. The Issuers agree, jointly and severally, to indemnify and
hold harmless each Underwriter (including, without limitation, Chase Securities
Inc. in its capacity as "qualified independent underwriter" within the meaning
of Rule 2720 of the Conduct Rules of the NASD (the "QIU")) and each person, if
any, who controls any Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against (i) any
and all losses, claims, damages and liabilities (including, without limitation,
the reasonable legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Issuers shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Issuers in
writing by such Underwriter expressly for use therein and (ii) in the case of
the QIU without limiting the exception in (i), any and all other losses,
claims, damages and liabilities (including, without limitation, any such
reasonable legal fees and other expenses) to which the QIU may become subject
insofar as such losses, claims, damages or liabilities arise out of, or are
based upon, the QIU having acted, failed to act or alleged to have failed to
act in its capacity as the "qualified independent underwriter" with respect to
the offering and sale of the Securities; provided, however, that neither of the
Issuers shall be liable to the Underwriters or any other person affiliated or
associated therewith under the indemnification provided for in this Section 7
to the extent that any such loss, claim, damage or liability of such
Underwriter or other person results from the fact that such Underwriter sold
Securities to a person or entity as to whom it shall be established that there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus or of the Prospectus as then amended or supplemented in
any case where such delivery is required by the Securities Act if the Company
has previously furnished copies thereof in sufficient quantity to the
Underwriters, and the Prospectus or the Prospectus as then amended or
supplemented would have cured the defect giving rise to such loss, claim,
damage or liability.

Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless each of the Issuers, its directors, its officers who sign the
Registration Statement and each person who controls either of the Issuers
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Issuers to
each Underwriter, but only with reference to information relating to such
Underwriter furnished to the Issuers in writing by such Underwriter expressly
for use in the Registration Statement, the Prospectus, any amendment or
supplement thereto, or any preliminary prospectus.

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<PAGE> 22
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of
the two preceding paragraphs, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel (or, if any such proceeding shall include any claim
against the QIU in its capacity as "qualified independent underwriter",
representation of both the QIU and all other Indemnified Persons by the same
counsel) would be inappropriate due to actual or potential differing interests
between them. It is understood that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons (unless any such proceeding
shall include any claim against the QIU in its capacity as "qualified
independent underwriter", in which case the Indemnifying Person shall be liable
for the fees and expenses of not more than one additional separate firm (in
addition to any local counsel) to represent the QIU solely with respect to such
claim), and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for the Underwriters and such control persons
of Underwriters shall be designated in writing by J.P. Morgan Securities Inc.,
any such separate firm for the QIU and its control persons shall be designated
by the QIU and any such separate firm for the Issuers, their respective
directors, their respective officers who sign the Registration Statement and
such control persons of either of the Issuers shall be designated in writing by
the Issuers. The Indemnifying Person shall not be liable for any settlement of
any proceeding effected without its written consent (not to be unreasonably
withheld or delayed), but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment to the extent provided in this Section 7.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person
shall have requested an Indemnifying Person to reimburse the Indemnified Person
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not
have reimbursed the Indemnified Person in accordance with said third sentence
prior to the date of such settlement to the extent it considers such request to
be reasonable or to provide written notice to the

-22-
<PAGE> 23
Indemnified Person substantiating the unpaid balance as unreasonable. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person (not to be unreasonably withheld or delayed), effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
written release, in form and substance reasonably satisfactory to such
Indemnified Person, of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.

If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable
by such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuers on the one hand and the Underwriters (or the
QIU, as the case may be) on the other hand from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Issuers on the one hand and the Underwriters (or the QIU, as the case
may be) on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Issuers on the one hand and the Underwriters (or the QIU, as the case may be)
on the other hand shall be deemed to be in the same respective proportions as
the net proceeds from the offering (before deducting expenses but after
deducting the underwriting discounts and commissions) received by the Issuers
and the total underwriting discounts and the commissions received by the
Underwriters (or the QIU, as the case may be), in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate public offering
price of the Securities. The relative fault of the Issuers on the one hand and
the Underwriters (or the QIU, as the case may be) on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Issuers or by the
Underwriters (or the QIU, as the case may be) and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

The Issuers and the Underwriters including the QIU agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any reasonable legal or other expenses incurred by
such Indemnified Person in connection with

-23-
<PAGE> 24
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Underwriter (or the QIU, as
the case may be) be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter (or the QIU, as the case may be) has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' (and the QIU's) obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
principal amount of Securities set forth opposite their names in Schedule I
hereto, and not joint.

The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.

The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Issuers set forth in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter (or by or on
behalf of the QIU and its control persons) or by or on behalf of the Issuers,
their respective officers or directors or any other person controlling either
of the Issuers and (iii) acceptance of and payment for any of the Securities.

8. Notwithstanding anything herein contained, this Agreement may
be terminated in the absolute discretion of the Underwriters, by notice given
to either of the Issuers, if after the execution and delivery of this Agreement
and prior to the Closing Date (i) trading generally shall have been suspended
or materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the National Association of Securities
Dealers, Inc., (ii) trading of any securities of or guaranteed by either of the
Issuers shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Underwriters, is material and adverse and which, in the judgment of the
Underwriters, makes it impracticable to market the Securities on the terms and
in the manner contemplated in the Prospectus.

9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.

-24-
<PAGE> 25
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase Securities which it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I bears to the aggregate
principal amount of Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Underwriters
may specify, to purchase the Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided,
however, that in no event shall the principal amount of Securities that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 9 by an amount in excess of one-ninth of such principal amount
of Securities without the written consent of such Underwriter. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Securities which it or they have agreed to purchase hereunder on such date, and
the aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities
to be purchased on such date, and arrangements satisfactory to the Underwriters
and the Issuers for the purchase of such Securities are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Issuers. In any such case
either you or the Issuers shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.

10. Each of the Issuers will, for the benefit of J.P. Morgan
Securities Inc. ("JPMS") and First Union Capital Markets Corp. ("First Union")
and for so long as any of the Securities are outstanding and JPMS, First Union
or any of their respective affiliates (as defined in the Securities Act) is
required by applicable law to deliver a prospectus in connection with sales of
the Securities (the "Undertaking Period"), (i)(a) periodically amend the
Registration Statement so that the information contained in the Registration
Statement complies with the requirements of Section 10(a) under the Securities
Act; (b) amend the Registration Statement within 90 days following the end of
the Company's most recent fiscal year so that the information contained in the
Registration Statement complies with the requirements of Section 10(a) under
the Securities Act; (c) if requested by JPMS or First Union, within 45 days
following the end of the Company's most recent fiscal quarter (except for the
fourth fiscal quarter of any fiscal year), file a supplement to the Prospectus
which sets forth the consolidated financial results of the Issuers for the
previous quarter; and (d) promptly amend the Registration Statement or
supplement the Prospectus when reasonably requested by JPMS or First Union or
when necessary to reflect pro forma financial information set forth in the most
recent Form 8-K filed by the Company or to reflect any material changes in the
information provided therein or to reflect the occurrence of any fact or
information becoming known that should be set forth in an amendment to the
Registration Statement or a

-25-
<PAGE> 26
supplement to the Prospectus so that the Prospectus when delivered to a
purchaser will comply with applicable law; provided, however, that (x) prior to
filing any amendment to the Registration Statement or any supplement to the
Prospectus, the Issuers will furnish for a reasonable period of time prior to
the proposed filing thereof to each of Cahill Gordon & Reindel, acting as
counsel to JPMS and First Union, and JPMS and First Union copies of all such
documents proposed to be filed, which documents will be subject to the review
of such counsel and JPMS and First Union, (y) the Issuers will not file any
amendment to the Registration Statement or any supplement to the Prospectus to
which such counsel or JPMS or First Union shall reasonably object, and (z) the
Issuers will provide such counsel and JPMS and First Union with such number of
copies of each amendment or supplement filed as JPMS and First Union shall
reasonably request; and (ii) indemnify JPMS and First Union, and if applicable,
contribute to JPMS and First Union, in a manner substantially identical to that
specified in Section 7 hereof in connection with sales of the Securities.

11. If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of either of the
Issuers to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason either of the Issuers shall be unable to
perform its obligations under this Agreement or any condition of the
Underwriters' obligations cannot be fulfilled, the Issuers agree, jointly and
severally, to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the reasonable fees and expenses of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder, but the Issuers shall then be
under no further liability to the Underwriters except as provided in Section
5(k) and Section 7 hereof.

12. This Agreement shall inure to the benefit of and be binding
upon each of the Issuers, the Underwriters, any controlling persons referred to
herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.

13. Any action by the Underwriters hereunder may be taken by J.P.
Morgan Securities Inc. alone on behalf of the Underwriters, and any such action
taken by J.P. Morgan Securities Inc. alone shall be binding upon the
Underwriters. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
given to the Underwriters c/o J.P. Morgan Securities Inc., 60 Wall Street, New
York, New York 10260-0060 (telefax: 212-648-5705); Attention: Syndicate
Department. Notices to the Issuers shall be given at FrontierVision Operating
Partners, L.P., 1777 South Harrison Street, Suite P-200, Denver, CO 80210
(telefax: 303-757-6105); Attention: Mr. John S. Koo, Senior Vice President and
Chief Financial Officer.

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<PAGE> 27
14. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.

15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.

[Signature Page Follows]

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<PAGE> 28
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.

Very truly yours,

FRONTIERVISION OPERATING
PARTNERS, L.P.

By: FrontierVision Partners, L.P.,
its general partner

By: FVP GP, L.P.,
its general partner

By: FrontierVision Inc.,
its general partner

By:
----------------------------
Title:

FRONTIERVISION CAPITAL
CORPORATION

By:
----------------------------
Title:

Accepted: , 1996
----------

J.P. Morgan Securities Inc.
Chase Securities Inc.
CIBC Wood Gundy Securities Corp.
First Union Capital Markets Corp.

By: J.P. Morgan Securities Inc.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.

By:
---------------------------
Title:

-28-
<PAGE> 29
Schedule I

<TABLE>
<CAPTION>
Principal Amount
of Securities
Underwriter to Be Purchased
- ----------- -----------------
<S> <C>
J.P. Morgan Securities Inc. . . . . . . . . . . . . . . . . . . . $
Chase Securities Inc. . . . . . . . . . . . . . . . . . . . . . .
CIBC Wood Gundy Securities Corp. . . . . . . . . . . . . . . . .
First Union Capital Markets Corp. . . . . . . . . . . . . . . . .
------------

Total . . . . . . . . . . . . . . . . . . . . . . . . $200,000,000
===========
</TABLE>

<PAGE> 1
EXHIBIT 4.1

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

INDENTURE

Dated as of October __, 1996

Among

FRONTIERVISION OPERATING PARTNERS, L.P.

and

FRONTIERVISION CAPITAL CORPORATION, as Issuers,

and

COLORADO NATIONAL BANK, as Trustee

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

$200,000,000
___% Senior Subordinated Notes due 2006

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

<PAGE> 2
CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
Indenture
Trust Indenture Act Section Section
- --------------------------- --------
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 10; 13.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 06; 13.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11; 4.12; 13.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05; 13.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
Section 316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.04
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
</TABLE>

- --------------------
N.A. means Not Applicable.

NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.

<PAGE> 3
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

ARTICLE TWO

THE SECURITIES

SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.02. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.03. Registrar; Paying Agent; Depository . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.04. Paying Agent To Hold Money in Trust . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.05. Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.07. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.08. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.09. Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.10. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.13. Book-Entry Provisions for Global
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

ARTICLE THREE

REDEMPTION

SECTION 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.02. Selection of Securities To Be Redeemed . . . . . . . . . . . . . . . . . . 34
SECTION 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . 36

ARTICLE FOUR

COVENANTS

SECTION 4.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>

-i-

<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 4.03. Limitation on Transactions with
Affiliates and Related Persons . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.04. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.05. Disposition of Proceeds of Asset Sales . . . . . . . . . . . . . . . . . . 41
SECTION 4.06. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.07. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 4.08. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.09. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.10. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.11. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 4.12. Provision of Financial Information . . . . . . . . . . . . . . . . . . . . 49
SECTION 4.13. Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . 50
SECTION 4.14. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 4.15. Limitation on Senior Subordinated
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 4.16. Limitations on Dividends and Other Payment
Restrictions Affecting Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 4.17. Designation of Unrestricted Subsidiaries . . . . . . . . . . . . . . . . . 53
SECTION 4.18. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.19. Limitation on Guarantees of Indebtedness
by Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.20. Limitation on Conduct of Business of
Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

ARTICLE FIVE

MERGERS; SUCCESSOR CORPORATION

SECTION 5.01. Merger, Sale of Assets, etc. . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 5.02. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . 57

ARTICLE SIX

DEFAULT AND REMEDIES

SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.04. Waiver of Past Default . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.07. Rights of Holders To Receive Payment . . . . . . . . . . . . . . . . . . . 63
SECTION 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . 64
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
</TABLE>

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ARTICLE SEVEN

TRUSTEE

SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 7.09. Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . 71
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 7.11. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

ARTICLE EIGHT

SUBORDINATION OF SECURITIES

SECTION 8.01. Securities Subordinated to Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 8.02. No Payment on Securities in Certain
Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 8.03. Payment Over of Proceeds upon Dissolution,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.04. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 8.05. Obligations of Issuers Unconditional . . . . . . . . . . . . . . . . . . . 76
SECTION 8.06. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 8.07. Reliance on Judicial Order or Certificate
of Liquidating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 8.08. Trustee's Relation to Senior Indebtedness . . . . . . . . . . . . . . . . . 78
SECTION 8.09. Subordination Rights Not Impaired by Acts
or Omissions of the Issuers or Holders
of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 8.10. Securityholders Authorize Trustee To
Effectuate Subordination of Securities . . . . . . . . . . . . . . . . . 79
SECTION 8.11. This Article Not To Prevent Events of
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 8.12. Trustee's Compensation Not Prejudiced . . . . . . . . . . . . . . . . . . . 79
SECTION 8.13. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . 79
SECTION 8.14. Subordination Provisions Not Applicable to
Money Held in Trust for Securityholders;
Payments May Be Paid Prior to
Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 8.15. Acceleration of Securities . . . . . . . . . . . . . . . . . . . . . . . . 80
</TABLE>

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ARTICLE NINE

DISCHARGE OF INDENTURE

SECTION 9.01. Termination of Issuers' Obligations . . . . . . . . . . . . . . . . . . . . 80
SECTION 9.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 9.03. Repayment to Issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 9.04. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

ARTICLE TEN

AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 10.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 10.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.03. Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.04. Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.05. Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . 87
SECTION 10.06. Trustee To Sign Amendments, etc. . . . . . . . . . . . . . . . . . . . . . 87

ARTICLE ELEVEN

SUBSIDIARY GUARANTEE

SECTION 11.01. Unconditional Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 11.02. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 11.03. Release of a Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 11.04. Limitation of Subsidiary Guarantor's
Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.05. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 11.06. Execution of Subsidiary Guarantee . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.07. Additional Subsidiary Guarantors . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.08. Subordination of Subrogation and Other
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

ARTICLE TWELVE

SUBORDINATION OF GUARANTEE

SECTION 12.01. Guarantee Obligations Subordinated to
Subsidiary Guarantor Senior Debt . . . . . . . . . . . . . . . . . . . . 92
SECTION 12.02. No Payment on Subsidiary Guarantees in
Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 12.03. Payment Over of Proceeds upon Dissolution,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 12.04. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 12.05. Obligations of Subsidiary Guarantors
Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 12.06. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
</TABLE>

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SECTION 12.07. Reliance on Judicial Order or Certificate
of Liquidating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 12.08. Trustee's Relation to Guarantor Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 12.09. Subordination Rights Not Impaired by Acts
or Omissions of the Subsidiary Guarantors
or Holders of Guarantor Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 12.10. Securityholders Authorize Trustee To
Effectuate Subordination of Guarantee . . . . . . . . . . . . . . . . . 99
SECTION 12.11. This Article Not To Prevent Events of
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 12.12. Trustee's Compensation Not Prejudiced . . . . . . . . . . . . . . . . . . . 100
SECTION 12.13. No Waiver of Subsidiary Guarantee
Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 12.14. Payments May Be Paid Prior to Dissolution . . . . . . . . . . . . . . . . . 100

ARTICLE THIRTEEN

MISCELLANEOUS

SECTION 13.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 13.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 13.03. Communications by Holders with Other
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 13.05. Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar . . . . . . . . . . . . . . . . . 104
SECTION 13.07. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 13.08. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 13.09. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 13.10. Counterpart Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 13.11. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 13.12. No Adverse Interpretation of Other
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 13.13. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

EXHIBIT A - Form of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B - Form of Subsidiary Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C - Form of Book Entry Legend and
Schedule for Exchanges of Global
Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
</TABLE>

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NOTE: This Table of Contents shall not, for any purpose, be deemed to be a
part of the Indenture.

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<PAGE> 8

INDENTURE dated as of October __, 1996, among FRONTIERVISION
OPERATING PARTNERS, L.P., a Delaware limited partnership (the "Company"),
FRONTIERVISION CAPITAL CORPORATION, a Delaware corporation ("Capital" and
together with the Company, the "Issuers"), and COLORADO NATIONAL BANK, as
trustee.

Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the ______%
Senior Subordinated Notes due 2006 of the Issuers:

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

"Acquired Indebtedness" means Indebtedness of a Person (a)
assumed in connection with an Asset Acquisition from such Person or (b)
existing at the time such Person becomes a Restricted Subsidiary.

"Acquired Person" means, with respect to any specified Person,
any other Person which merges with or into or becomes a Subsidiary of such
specified Person.

"Advisory Committee" means the Advisory Committee of the
General Partner established pursuant to the provisions of Article VI of the
First Amended and Restated Agreement of Limited Partnership of the General
Partner, as amended to the date of issuance of the Securities.

"Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For purposes of
this definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

"Agent" means any Registrar, Paying Agent or co-Registrar.
See Section 2.03.

"Asset Acquisition" means (i) any capital contribution (by
means of transfers of cash or other property to others or payments for property
or services for the account or use of

<PAGE> 9
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others, or otherwise) by the Company or any Restricted Subsidiary in any other
Person, or any acquisition or purchase of Equity Interests of any other Person
by the Company or any Restricted Subsidiary, in either case pursuant to which
such Person shall become a Restricted Subsidiary or shall be consolidated,
merged with or into the Company or any Restricted Subsidiary or (ii) any
acquisition by the Company or any Restricted Subsidiary of the assets of any
Person which constitute substantially all of an operating unit or line of
business of such Person or which is otherwise outside of the ordinary course of
business.

"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than the Company or a Wholly Owned Restricted
Subsidiary, in one transaction or a series of related transactions, of (i) any
Equity Interest of any Restricted Subsidiary, (ii) any material license,
franchise or other authorization of the Company or any Restricted Subsidiary,
(iii) any assets of the Company or any Restricted Subsidiary which constitute
substantially all of an operating unit or line of business of the Company or
any Restricted Subsidiary or (iv) any other property or asset of the Company or
any Restricted Subsidiary outside of the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include (i) any
transaction consummated in compliance with Section 5.01 and the creation of any
Lien not prohibited by Section 4.18, (ii) sales of property or equipment that
have become worn out, obsolete or damaged or otherwise unsuitable for use in
connection with the business of the Company or any Restricted Subsidiary, as
the case may be, and (iii) any transaction consummated in compliance with
Section 4.06. In addition, solely for purposes of Section 4.05, any sale,
conveyance, transfer, lease or other disposition of any property or asset,
whether in one transaction or a series of related transactions involving assets
with a Fair Market Value not in excess of $ shall be deemed not to be an
Asset Sale.

"Board of Directors" means (i) in the case of a Person that is
a partnership, the board of directors of such Person's corporate general
partner (or if such general partner is itself a partnership, the board of
directors of such general partner's corporate general partner), (ii) in the
case of a Person that is a corporation, the board of directors of such Person
and (iii) in the case of any other Person, the board of directors, management
committee or similar governing body or any authorized committee thereof
responsible for the management of the business and affairs of such Person. By
way of illustration, as of the date of this Indenture, any reference herein to
the Board of Directors of any of the Company, FVP or FVP GP means the board of
directors of FV Inc.

"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.

<PAGE> 10
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"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in the City of New
York are authorized or obligated by law, resolution or executive order to
close.

"Capitalized Lease Obligation" means, with respect to any
Person for any period, an obligation of such Person to pay rent or other
amounts under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP; and the amount of such obligation
shall be the capitalized amount shown on the balance sheet of such person as
determined in accordance with GAAP.

"Cash Equivalents" means (i) any security, maturing not more
than six months after the date of acquisition, issued by the United States of
America, or an instrumentality or agency thereof and guaranteed fully as to
principal, premium, if any, and interest by the United States of America, (ii)
any certificate of deposit, time deposit, money market account or bankers'
acceptance maturing not more than six months after the date of acquisition
issued by any commercial banking institution that is a member of the Federal
Reserve System and that has combined capital and surplus and undivided profits
of not less than $500.0 million, whose debt has a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's
Investors Service, Inc. or any successor rating agency, or "A-1" (or higher)
according to Standard & Poor's Rating Services, a division of the McGraw-Hill
Companies, Inc., or any successor rating agency and (iii) commercial paper
maturing not more than three months after the date of acquisition issued by any
corporation (other than an Affiliate of the Company) organized and existing
under the laws of the United States of America with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's
Investors Service, Inc. or any successor rating agency, or "A-1" (or higher)
according to Standard & Poor's Rating Services, a division of the McGraw-Hill
Companies, Inc., or any successor rating agency.

<PAGE> 11
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voting power of the outstanding Voting Equity Interests of the Company, the
General Partner, FVP GP or FV Inc., as the case may be; (b) the Company, the
General Partner, FVP GP or FV Inc., as the case may be, consolidates with, or
merges with or into, another Person or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its assets to any
Person, or any Person consolidates with, or merges with or into, the Company,
the General Partner, FVP GP or FV Inc., as the case may be, in any such event
pursuant to a transaction in which the outstanding Voting Equity Interests of
the Company, the General Partner, FVP GP or FV Inc., as the case may be, are
converted into or exchanged for cash, securities or other property, other than
any such transaction where the outstanding Voting Equity Interests of the
Company, the General Partner, FVP GP or FV Inc., as the case may be, are
converted into or exchanged for Voting Equity Interests (other than
Disqualified Equity Interests) of the surviving or transferee Person and,
immediately after such transaction, the Permitted Holders or the holders of the
Voting Equity Interests of the Company, the General Partner, FVP GP or FV Inc.,
as the case may be, immediately prior thereto own, directly or indirectly, more
than 50% of the total voting power of the outstanding Voting Equity Interests
of the surviving or transferee Person; (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board
of Directors of the Company, the General Partner, FVP GP or FV Inc., as the
case may be (together with any new directors whose election to such Board of
Directors was approved by the Permitted Holders or by a vote of at least a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason (other than by action of the
Permitted Holders) to constitute a majority of the Board of Directors of the
Company, the General Partner, FVP GP or FV Inc., as the case may be, then in
office in any such case in connection with any actual or threatened
solicitation to which Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act applies or other actual or threatened solicitation of proxies or
consents; (d) any Person or Persons, other than Permitted Holders, is or
becomes entitled to appoint or designate 25% or more of the members of the
Advisory Committee; or (e) the admission of any Person as a general partner of
the Company, the General Partner or FVP GP, as the case may be, after which the
General Partner, FVP GP or FV Inc., as the case may be, does not have the sole
power to take all of the actions it is entitled or required to take under the
limited partnership agreement of the Company, the General Partner or FVP GP, as
the case may be, as in effect on the Issue Date; provided, however, that a
Change of Control will

<PAGE> 12
-5-

be deemed not to have occurred in any of the foregoing circumstances (i) with
respect to FV Inc. (either in its own capacity or in its capacity as a direct
or indirect corporate general partner of any other Person), (ii) with respect
to or as a result of the conversion of the general partnership interest of FVP
GP in the General Partner into a limited partnership interest, or (iii) with
respect to the events in clause (e) if the change, event or condition giving
rise thereto has been approved by the Permitted Holders holding a majority in
interest of the total outstanding Equity Interests of the General Partner held
by the Permitted Holders.

"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor.

"Consolidated Income Tax Expense" means, with respect to the
Company for any period, the provision for federal, state, local and foreign
income taxes payable by the Company and the Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP.

"Consolidated Interest Expense" means, with respect to the
Company for any period, without duplication, the sum of (i) the interest
expense of the Company and the Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP, including, without
limitation, (a) any amortization of debt discount, (b) the net cost under
Interest Rate Protection Obligations (including any amortization of discounts),
(c) the interest portion of any deferred payment obligation, (d) all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and (e) all capitalized interest
and all accrued interest, (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by the Company
and the Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP and (iii) dividends and
distributions in respect of Disqualified Equity Interests actually paid in cash
by the Company during such period as determined on a consolidated basis in
accordance with GAAP.

"Consolidated Net Income" means with respect to any period,
the net income of the Company and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, adjusted, to the
extent included in calculating such net income, by excluding, without
duplication, (i) all extraordinary gains or losses and all gains and losses
from the sales or other dispositions of assets out of the ordinary course of
business (net of taxes, fees and expenses relating to the transaction giving
rise thereto) for such period, (ii) that portion of such net income derived
from or in respect of investments in Persons other than Restricted
Subsidiaries, except to the extent actually received in cash by the Company or
any Restricted Subsidiary (subject, in the case of any Restricted

<PAGE> 13
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Subsidiary, to the provisions of clause (v) of this definition), (iii) the
portion of such net income (or loss) allocable to minority interests in
unconsolidated Persons for such period, except to the extent actually received
in cash by the Company or any Restricted Subsidiary (subject, in the case of
any Restricted Subsidiary, to the provisions of clause (v) of this definition),
(iv) net income (or loss) of any other Person combined with the Company or any
Restricted Subsidiary on a "pooling of interests" basis attributable to any
period prior to the date of combination and (v) the net income of any
Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is not at
the time (regardless of any waiver) permitted, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulations applicable to that
Restricted Subsidiary or its Equity Interest holders.

"Consolidated Net Worth" with respect to any Person means the
equity of the holders of Qualified Equity Interests of such Person and its
Restricted Subsidiaries, as reflected in a balance sheet of such Person
determined on a consolidated basis and in accordance with GAAP.

"Consolidated Operating Cash Flow" means, with respect to any
period, Consolidated Net Income for such period increased (without duplication)
by the sum of (i) Consolidated Income Tax Expense accrued according to GAAP for
such period to the extent deducted in determining Consolidated Net Income for
such period; (ii) Consolidated Interest Expense (other than dividends on
Preferred Equity Interests) for such period to the extent deducted in
determining Consolidated Net Income for such period; and (iii) depreciation,
amortization and any other non- cash items for such period to the extent
deducted in determining Consolidated Net Income for such period (other than any
non-cash item which requires the accrual of, or a reserve for, cash charges for
any future period) of the Company and the Restricted Subsidiaries, including,
without limitation, amortization of capitalized debt issuance costs for such
period, all of the foregoing determined on a consolidated basis in accordance
with GAAP minus non-cash items to the extent they increase Consolidated Net
Income (including the partial or entire reversal of reserves taken in prior
periods) for such period.

"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 13.02 or such other address as the
Trustee may give notice to the Issuers.

<PAGE> 14
-7-

"Cumulative Available Cash Flow" means, as at any date of
determination, the positive cumulative Consolidated Operating Cash Flow
realized during the period commencing on the Issue Date and ending on the last
day of the most recent fiscal quarter immediately preceding the date of
determination for which consolidated financial information of the Company is
available or, if such cumulative Consolidated Operating Cash Flow for such
period is negative, the negative amount by which cumulative Consolidated
Operating Cash Flow is less than zero.

"Debt to Operating Cash Flow Ratio" means the ratio of (i) the
Total Consolidated Indebtedness as of the date of calculation (the
"Determination Date") to (ii) four times the Consolidated Operating Cash Flow
for the latest fiscal quarter for which financial information is available
immediately preceding such Determination Date (the "Measurement Period"). For
purposes of calculating Consolidated Operating Cash Flow for the Measurement
Period immediately prior to the relevant Determination Date, (I) any Person
that is a Restricted Subsidiary on the Determination Date (or would become a
Restricted Subsidiary on such Determination Date in connection with the
transaction that requires the determination of such Consolidated Operating Cash
Flow) will be deemed to have been a Restricted Subsidiary at all times during
such Measurement Period, (II) any Person that is not a Restricted Subsidiary on
such Determination Date (or would cease to be a Restricted Subsidiary on such
Determination Date in connection with the transaction that requires the
determination of such Consolidated Operating Cash Flow) will be deemed not to
have been a Restricted Subsidiary at any time during such Measurement Period,
and (III) if the Company or any Restricted Subsidiary shall have in any manner
(x) acquired (including through an Asset Acquisition or the commencement of
activities constituting such operating business) or (y) disposed of (including
by way of an Asset Sale or the termination or discontinuance of activities
constituting such operating business) any operating business during such
Measurement Period or after the end of such period and on or prior to such
Determination Date, such calculation will be made on a pro forma basis in
accordance with GAAP as if, in the case of an Asset Acquisition or the
commencement of activities constituting such operating business, all such
transactions had been consummated on the first day of such Measurement Period
and, in the case of an Asset Sale or termination or discontinuance of
activities constituting such operating business, all such transactions had been
consummated prior to the first day of such Measurement Period; provided,
however, that such pro forma adjustment shall not give effect to the Operating
Cash Flow of any Acquired Person to the extent that such Person's net income

<PAGE> 15
-8-

would be excluded pursuant to clause (v) of the definition of Consolidated Net
Income.

"Default" means any event that is or with the passing of time
or giving of notice or both would be an Event of Default.

"Depository" means, with respect to Securities issued in the
form of one or more Global Securities, DTC or another Person designated as
Depository by the Issuers, which Person must be a clearing agency registered
under Section 17A of the Exchange Act.

"Designated Guarantor Senior Indebtedness" means, with respect
to any Subsidiary Guarantor, (i) any Indebtedness of such Subsidiary Guarantor
outstanding under the Senior Credit Facility and (ii) any other Guarantor
Senior Indebtedness of such Subsidiary Guarantor which, at the time of
determination, has an aggregate principal amount outstanding, together with any
commitments to lend additional amounts, of at least $25.0 million.

"Designated Senior Indebtedness" means (i) any Indebtedness
outstanding under the Senior Credit Facility and (ii) any other Senior
Indebtedness which, at the time of determination, has an aggregate principal
amount outstanding, together with any commitments to lend additional amounts,
of at least $25.0 million.

"Designation" has the meaning set forth in Section 4.17.

"Designation Amount" has the meaning set forth in Section
4.17.

"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.

"Disqualified Equity Interest" means any Equity Interest
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable,
at the option of the holder thereof, in whole or in part, or exchangeable into
Indebtedness on or prior to the earlier of the

<PAGE> 16
-9-

maturity date of the Securities or the date on which no Securities remain
outstanding.

"DTC" means The Depository Trust Company.

"Equity Interest" in any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership interests, whether general or
limited, in such Person, including any Preferred Equity Interests.

"Equity Market Capitalization" of any Person, means the
aggregate market value of the outstanding Equity Interests (other than
Preferred Equity Interests and excluding any such Equity Interests held in
treasury by such Person) of such Person of a class that is listed or admitted
to unlisted trading privileges on a United States national securities exchange
or included for trading on the Nasdaq National Market System. For purposes of
this definition the "market value" of any such Equity Interest shall be the
average of the high and low sale prices, or if no sales are reported, the
average of the closing bid and ask prices, as reported in the composite
transactions or the principal national securities exchange on which such Equity
Interests are listed or admitted to trading or, if such Equity Interests are
not listed or admitted to trading on a national securities exchange, as
reported by Nasdaq, for each trading day in a 20 consecutive trading day period
ending not more than 45 days prior to the date such Person commits to make an
investment in the Equity Interests of the Company.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission
thereunder.

"Expiration Date" has the meaning set forth in the definition
of "Offer to Purchase" below.

"Fair Market Value" means, with respect to any asset, the
price (after taking into account any liabilities relating to such assets) which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of which is
under pressure or compulsion to complete the transaction; provided, however,
that the Fair Market Value of any such asset or assets shall be determined by
the Board of Directors of FV Inc., acting in good faith, and shall be evidenced
by resolutions of the Board of Directors of FV Inc. delivered to the Trustee.

<PAGE> 17
-10-

"FV Inc." means FrontierVision Inc., a Delaware corporation.

"FVP GP" means FVP GP, L.P., a Delaware limited partnership.

"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States which are applicable at
the date of determination and which are consistently applied for all applicable
periods.

"General Partner" means FrontierVision Partners, L.P., a
Delaware limited partnership.

"Global Security" means a Security evidencing all or part of
the Securities issued to the Depository in accordance with Section 2.13 and
bearing the legend described in Exhibit C.

"guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection
in the ordinary course of business), direct or indirect, in any manner, of any
part or all of such obligation and (ii) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation, including, without
limiting the foregoing, the payment of amounts drawn down by letters of credit.
A guarantee shall include, without limitation, any agreement to maintain or
preserve any other person's financial condition or to cause any other Person to
achieve certain levels of operating results.

<PAGE> 18
-11-

Indebtedness, any Obligation for federal, state, local or other taxes, (ii) any
Indebtedness among or between such Subsidiary Guarantor and the Company or any
Subsidiary of such Subsidiary Guarantor or the Company, (iii) to the extent
that it may constitute Indebtedness, any Obligation in respect of any trade
payable Incurred for the purchase of goods or materials, or for services
obtained, in the ordinary course of business, (iv) that portion of any
Indebtedness that is Incurred in violation of this Indenture; provided,
however, that such Indebtedness shall be deemed not to have been Incurred in
violation of this Indenture for purposes of this clause (iv) if (I) the
holder(s) of such Indebtedness or their representative or such Subsidiary
Guarantor shall have furnished to the Trustee an opinion of independent legal
counsel, unqualified in all material respects, addressed to the Trustee (which
legal counsel may, as to matters of fact, rely upon an officers' certificate of
such Subsidiary Guarantor) to the effect that the Incurrence of such
Indebtedness does not violate the provisions of this Indenture or (II) in the
case of any Obligations under the Senior Credit Facility, the holder(s) of
such Obligations or their agent or representative shall have received a
representation from such Subsidiary Guarantor to the effect that the Incurrence
of such Indebtedness does not violate the provisions of this Indenture, (v)
Indebtedness evidenced by the Subsidiary Guarantee, (vi) Indebtedness of such
Subsidiary Guarantor that is expressly subordinate or junior in right of
payment to any other Indebtedness of such Subsidiary Guarantor, (vii) to the
extent that it may constitute Indebtedness, any obligation owing under leases
(other than Capitalized Lease Obligations) or management agreements and (viii)
any obligation that by operation of law is subordinate to any general unsecured
obligations of such Subsidiary Guarantor.

"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the books of the Registrar or any co-Registrar.

<PAGE> 19
-12-

Indebtedness was incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary (or being merged into or consolidated
with the Company or any Restricted Subsidiary), shall be deemed Incurred at the
time any such Person becomes a Restricted Subsidiary or merges into or
consolidates with the Company or any Restricted Subsidiary.

"Indebtedness" means (without duplication), with respect to
any Person, whether recourse is to all or a portion of the assets of such
Person and whether or not contingent, (i) every obligation of such Person for
money borrowed, (ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses, (iii)
every reimbursement obligation of such Person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account of
such Person, (iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (but excluding trade accounts
payable incurred in the ordinary course of business and payable in accordance
with industry practices, or other accrued liabilities arising in the ordinary
course of business which are not overdue or which are being contested in good
faith), (v) every Capital Lease Obligation of such Person, (vi) every net
obligation under interest rate swap or similar agreements or foreign currency
hedge, exchange or similar agreements of such Person, (vii) every obligation of
the type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable for, directly or indirectly, as
obligor, guarantor or otherwise, and (viii) any and all deferrals, renewals,
extensions and refundings of, or amendments, modifications or supplements to,
any liability of the kind described in any of the preceding clauses (i) through
(vii) above. Indebtedness (i) shall never be calculated taking into account
any cash and cash equivalents held by such Person, (ii) shall not include
obligations of any Person (x) arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business, provided
that such obligations are extinguished within two Business Days of their
incurrence unless covered by an overdraft line, (y) resulting from the
endorsement of negotiable instruments for collection in the ordinary course of
business and consistent with past business practices and (z) under stand-by
letters of credit to the extent collateralized by cash or Cash Equivalents,
(iii) which provides that an amount less than the principal amount thereof
shall be due upon any declaration of acceleration thereof

<PAGE> 20
-13-

shall be deemed to be incurred or outstanding in an amount equal to the
accreted value thereof at the date of determination, (iv) shall include the
liquidation preference and any mandatory redemption payment obligations in
respect of any Disqualified Equity Interests of the Company or any Restricted
Subsidiary and (v) shall not include obligations under performance bonds,
performance guarantees, surety bonds and appeal bonds, letters of credit or
similar obligations, incurred in the ordinary course of business, including in
connection with the requirements of cable television franchising authorities,
and otherwise consistent with industry practice.

"Indenture" means this Indenture as amended or supplemented
from time to time.

"Independent Financial Advisor" means a nationally recognized
investment banking firm (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
the Company and (ii) which, in the judgment of the Board of Directors of FV
Inc., is otherwise independent and qualified to perform the task for which it
is to be engaged.

"Insolvency or Liquidation Proceeding" means, with respect to
any Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.

"Interest Payment Date" means the stated maturity of an
installment of interest on the Securities.

"Interest Rate Protection Obligations" means, with respect to
any Person, the Obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
and (ii) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.

"Investment" means, with respect to any Person, any advance,
loan, account receivable (other than an account receivable arising in the
ordinary course of business), or other extension of credit (including, without
limitation, by means of any guarantee) or any capital contribution to (by means
of transfers of property to others, payments for property or services for the
account or use of others, or otherwise) or any purchase or ownership of any
stocks, bonds, notes, debentures or other securities of, any other Person.

<PAGE> 21
-14-

"Issue Date" means the original issue date of the Securities,
October [ ], 1996.

"Issuer Request" or "Issuer Order" means a written request or
order signed in the name of each of the Issuers by its respective Chairman of
the Board, Vice Chairman of the Board, President or a Vice President, and by
its respective Treasurer, an Assistant Treasurer, Secretary or an Assistant
Secretary, and delivered to the Trustee.

"Lien" means any lien, mortgage, charge, security interest,
hypothecation, assignment for security or encumbrances of any kind (including
any conditional sale or capital lease or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest).

"Material Subsidiary" means any Subsidiary of the Company
which would constitute a "significant subsidiary" of the Company as defined in
Rule 1.02 of Regulation S-X promulgated by the SEC.

"Maturity Date" means the date, which is set forth on the face
of the Securities, on which the Securities will mature.

"Net Cash Proceeds" means the aggregate proceeds in the form
of cash or Cash Equivalents received by the Company or any Restricted
Subsidiary in respect of any Asset Sale, including all cash or Cash Equivalents
received upon any sale, liquidation or other exchange of proceeds of Asset
Sales received in a form other than cash or Cash Equivalents, net of (i) the
direct costs relating to such Asset Sale (including, without limitation, legal
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, (ii) taxes paid or payable as
a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), (iii) amounts required to be
applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that were the subject of such Asset Sale, (iv) amounts deemed, in good
faith, appropriate by the Board of Directors of FV Inc. to be provided as a
reserve, in accordance with GAAP, against any liabilities associated with such
assets which are the subject of such Asset Sale (provided that the amount of
any such reserves shall be deemed to constitute Net Cash Proceeds at the time
such reserves shall have been released or are not otherwise required to be
retained as a reserve) and (v) with respect to Asset Sales by Subsidiaries, the
portion of such cash payments attributable to Persons holding a minority
interest in such Subsidiary.

<PAGE> 22
-15-

"Obligations" means any principal, interest (including,
without limitation, Post-Petition Interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing any Indebtedness.

"Offer" has the meaning set forth in the definition of "Offer
to Purchase" below.

"Offer to Purchase" means a written offer (the "Offer") sent
by or on behalf of the Company by first-class mail, postage prepaid, to each
holder at his address appearing in the register for the Securities on the date
of the Offer offering to purchase up to the principal amount of Securities
specified in such Offer at the purchase price specified in such Offer (as
determined pursuant to this Indenture). Unless otherwise required by
applicable law, the Offer shall specify an expiration date (the "Expiration
Date") of the Offer to Purchase, which shall be not less than 20 Business Days
nor more than 60 days after the date of such Offer, and a settlement date (the
"Purchase Date") for purchase of Securities to occur no later than five
Business Days after the Expiration Date. The Company shall notify the Trustee
at least 15 Business Days (or such shorter period as is acceptable to the
Trustee) prior to the mailing of the Offer of the Company's obligation to make
an Offer to Purchase, and the Offer shall be mailed by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the
Company. The Offer shall contain all the information required by applicable
law to be included therein. The Offer shall contain all instructions and
materials necessary to enable such holders to tender Securities pursuant to the
Offer to Purchase. The Offer shall also state:

(1) the Section of this Indenture pursuant to which the Offer to Purchase
is being made;

(2) the Expiration Date and the Purchase Date;

(3) the aggregate principal amount of the outstanding Securities offered
to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has
been determined pursuant to the Section of this Indenture requiring
the Offer to Purchase) (the "Purchase Amount");

(4) the purchase price to be paid by the Company for each $1,000 aggregate
principal amount of Securities accepted for

<PAGE> 23
-16-

payment (as specified pursuant to this Indenture) (the "Purchase
Price");

(5) that the holder may tender all or any portion of the Securities
registered in the name of such holder and that any portion of a
Security tendered must be tendered in an integral multiple of $1,000
principal amount;

(6) the place or places where Securities are to be surrendered for tender
pursuant to the Offer to Purchase;

(7) that interest on any Security not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;

(8) that on the Purchase Date the Purchase Price will become due and
payable upon each Security being accepted for payment pursuant to the
Offer to Purchase and that interest thereon shall cease to accrue on
and after the Purchase Date;

(9) that each holder electing to tender all or any portion of a Security
pursuant to the Offer to Purchase will be required to surrender such
Security at the place or places specified in the Offer prior to the
close of business on the Expiration Date (such Security being, if the
Company or the Trustee so requires, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the holder thereof or his
attorney duly authorized in writing);

(10) that holders will be entitled to withdraw all or any portion of
Securities tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the fifth Business Day next
preceding the Expiration Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the holder, the
principal amount of the Security the holder tendered, the certificate
number of the Security the holder tendered and a statement that such
holder is withdrawing all or a portion of his tender;

(11) that (a) if Securities in an aggregate principal amount less than or
equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Securities and (b) if Securities in an aggregate principal amount in
excess of the Purchase Amount are tendered and not withdrawn pursuant
to the Offer to Purchase, the Company shall purchase Securities having
an aggregate principal amount equal to the Purchase Amount on a

<PAGE> 24
-17-

pro rata basis (with such adjustments as may be deemed appropriate so
that only Securities in denominations of $1,000 or integral multiples
thereof shall be purchased); and

(12) that in the case of any holder whose Security is purchased only in
part, the Company shall execute and the Trustee shall authenticate and
deliver to the holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by
such holder, in an aggregate principal amount equal to and in exchange
for the unpurchased portion of the Security so tendered.

An Offer to Purchase shall be governed by and effected in accordance with the
provisions above pertaining to any Offer.

"Officer" means, with respect to any Person, the Chairman of
the Board of Directors, the President, any Vice President, the Chief Financial
Officer, the Treasurer, or the Secretary of such Person.

"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
each of FV Inc. and Capital complying with Sections 13.04 and 13.05; provided,
however, that when the terms of this Indenture require the delivery of an
Officers' Certificate of the Company only, such Officers' Certificate shall
mean a certificate signed by two Officers or by an Officer and an Assistant
Treasurer or Assistant Secretary of FV Inc. complying with Sections 13.04 and
13.05.

"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Issuers or the Trustee.

<PAGE> 25
-18-

common control with any other Person described in clauses (a) - (d) of this
definition and (f) (i) the spouse or children of any Person named in clause (b)
or (c) of this definition and any trust for the benefit of any such Persons or
their respective spouses or children; provided, however, that with respect to
any such trust, such Persons have the sole right to direct and control such
trust and any Voting Equity Interest owned by such trust, and (ii) any such
Person's estate, executor, administrator and heirs.

"Permitted Investments" means (a) Cash Equivalents; (b)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (c) loans and advances to employees made in the ordinary course of
business not to exceed $1 million in the aggregate at any one time outstanding;
(d) Interest Rate Protection Obligations; (e) bonds, notes, debentures or other
securities received as a result of Asset Sales permitted under Section 4.05 not
to exceed 25% of the total consideration for such Asset Sales; (f) transactions
with officers, directors and employees of the Company, the General Partner, FVP
GP, FV Inc. or any Restricted Subsidiary entered into in ordinary course of
business (including compensation or employee benefit arrangements with any such
director or employee) and consistent with past business practices; (g)
Investments existing as of the Issue Date and any amendment, extension, renewal
or modification thereof to the extent that any such amendment, extension,
renewal or modification does not require the Company or any Restricted
Subsidiary to make any additional cash or non-cash payments or provide
additional services in connection therewith; (h) any Investment for which the
sole consideration provided is Qualified Equity Interests of the Company; and
(i) any Investment consisting of a guarantee by a Restricted Subsidiary of
Senior Indebtedness or any guarantee permitted under clause (e) of Section
4.04.

<PAGE> 26
-19-

beneficial to the holders of such securities than those in effect with respect
to the Securities on the date of this Indenture and (c) such securities shall
not provide for amortization (including sinking fund and mandatory prepayment
provisions) commencing prior to the date six months following the final
scheduled maturity date of the Senior Indebtedness or Guarantor Senior
Indebtedness, as the case may be (as modified by the plan of reorganization of
readjustment pursuant to which such securities are issued).

"Permitted Liens" means (a) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the
Company or any Restricted Subsidiary; provided, however, that such Liens were
in existence prior to the contemplation of such merger or consolidation and do
not secure any property or assets of the Company or any Restricted Subsidiary
other than the property or assets subject to the Liens prior to such merger or
consolidation; (b) Liens imposed by law such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary course of
business which secure payment of obligations not more than sixty (60) days past
due or which are being contested in good faith and by appropriate proceedings;
(c) Liens existing on the Issue Date; (d) Liens securing only the Securities;
(e) Liens in favor of the Company or any Restricted Subsidiary; (f) Liens for
taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; provided, however, that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; (g) easements, reservation of rights of
way, restrictions and other similar easements, licenses, restrictions on the
use of properties, or minor imperfections of title that in the aggregate are
not material in amount and do not in any case materially detract from the
properties subject thereto or interfere with the ordinary conduct of the
business of the Company and the Restricted Subsidiaries; (h) Liens resulting
from the deposit of cash or securities in connection with contracts, tenders or
expropriation proceedings, or to secure workers' compensation, surety or appeal
bonds, costs of litigation when required by law and public and statutory
obligations or obligations under franchise arrangements entered into in the
ordinary course of business; (i) Liens securing Indebtedness consisting of
Capitalized Lease Obligations, Purchase Money Indebtedness, mortgage
financings, industrial revenue bonds or other monetary obligations, in each
case incurred solely for the purpose of financing all or any part of the
purchase price or cost of construction or installation of assets used in the
business of

<PAGE> 27
-20-

the Company or the Restricted Subsidiaries, or repairs, additions or
improvements to such assets, provided, however, that (I) such Liens secure
Indebtedness in an amount not in excess of the original purchase price or the
original cost of any such assets or repair, addition or improvement thereto
(plus an amount equal to the reasonable fees and expenses in connection with
the incurrence of such Indebtedness), (II) such Liens do not extend to any
other assets of the Company or the Restricted Subsidiaries (and, in the case of
repair, addition or improvements to any such assets, such Lien extends only to
the assets (and improvements thereto or thereon) repaired, added to or
improved), (III) the Incurrence of such Indebtedness is permitted by Section
4.04 and (IV) such Liens attach within 90 days of such purchase, construction,
installation, repair, addition or improvement; (j) Liens to secure any
refinancings, renewals, extensions, modifications or replacements
(collectively, "refinancing") (or successive refinancings), in whole or in
part, of any Indebtedness secured by Liens referred to in the clauses above so
long as such Lien does not extend to any other property (other than
improvements thereto); and (k) Liens securing letters of credit entered into in
the ordinary course of business and consistent with past business practice.

"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, limited
liability limited partnership, trust, unincorporated organization or government
or any agency or political subdivision thereof.

"Post-Petition Interest" means, with respect to any
Indebtedness of any Person, all interest accrued or accruing on such
Indebtedness after the commencement of any Insolvency or Liquidation Proceeding
against such Person in accordance with and at the contract rate (including,
without limitation, any rate applicable upon default) specified in the
agreement or instrument creating, evidencing or governing such Indebtedness,
whether or not, pursuant to applicable law or otherwise, the claim for such
interest is allowed as a claim in such Insolvency or Liquidation Proceeding.

"Preferred Equity Interest," in any Person, means an Equity
Interest of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person.

<PAGE> 28
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"principal" of a debt security means the principal of the
security plus, when appropriate, the premium, if any, on the security.

"Public Equity Offering" means, with respect to any Person, a
public offering by such Person of some or all of its Qualified Equity
Interests, the net proceeds of which (after deducting any underwriting
discounts and commissions) exceed $25.0 million.

"Purchase Amount" has the meaning set forth in the definition
of "Offer to Purchase" above.

"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" above.

"Purchase Money Indebtedness" means Indebtedness of the
Company or any Restricted Subsidiary Incurred for the purpose of financing all
or any part of the purchase price or the cost of construction or improvement of
any property, provided that the aggregate principal amount of such Indebtedness
does not exceed the lesser of the Fair Market Value of such property or such
purchase price or cost.

"Purchase Price" has the meaning set forth in the definition
of "Offer to Purchase" above.

"Qualified Equity Interest" in any Person means any Equity
Interest in such Person other than any Disqualified Equity Interest.

"redemption date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.

"redemption price," when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture as set forth in the form of Security annexed as Exhibit A.

"Restricted Investment" means any Investment other than a
Permitted Investment.

"Restricted Subsidiary" means any Subsidiary of the Company
that has not been designated by the Board of Directors of FV Inc., by a
resolution of the Board of Directors of FV Inc. delivered to the Trustee, as an
Unrestricted Subsidiary pursuant to Section 4.17. Any such designation may be
revoked by a

<PAGE> 29
-22-

resolution of the Board of Directors of FV Inc. delivered to the Trustee,
subject to the provisions of such covenant.

"SEC" means the Securities and Exchange Commission.

"Securities" means the ______% Senior Subordinated Notes due
2006, as amended or supplemented from time to time pursuant to the terms of
this Indenture, that are issued under this Indenture.

"Securities Custodian" means Colorado National Bank, as
custodian with respect to the Securities in global form, or any successor
entity thereto.

"Senior Credit Facility" means the Amended and Restated Credit
Agreement, dated as of April 9, 1996, between the Company, the lenders named
therein, The Chase Manhattan Bank, as Administrative Agent, J.P. Morgan
Securities Inc., as Syndication Agent, and CIBC Inc., as Managing Agent,
including any deferrals, renewals, extensions, replacements, refinancings or
refundings thereof, or amendments, modifications or supplements thereto and any
agreement providing therefor, whether by or with the same or any other lender,
creditor, group of lenders or group of creditors, and including related notes,
guarantee and security agreements and other instruments and agreements executed
in connection therewith.

"Senior Indebtedness" means, at any date, (i) all Obligations
of the Company under the Senior Credit Facility, (ii) all Interest Rate
Protection Obligations, (iii) all Obligations of the Company under stand-by
letters of credit and (iv) all other Indebtedness of the Company for borrowed
money, including principal, premium, if any, and interest (including
Post-Petition Interest) on such Indebtedness, unless the instrument under which
such Indebtedness of the Company for money borrowed is Incurred expressly
provides that such Indebtedness for money borrowed is not senior or superior in
right of payment to the Securities, and all renewals, extensions,
modifications, amendments or refinancings thereof. Notwithstanding the
foregoing, Senior Indebtedness shall not include (i) to the extent that it may
constitute Indebtedness, any Obligation for federal, state, local or other
taxes, (ii) any Indebtedness among or between the Company and any Subsidiary of
the Company, (iii) to the extent that it may constitute Indebtedness, any
Obligation in respect of any trade payable Incurred for the purchase of goods
or materials, or for services obtained, in the ordinary course of business,
(iv) that portion of any Indebtedness that is Incurred in violation of this
Indenture; provided, however, that such

<PAGE> 30
-23-

Indebtedness shall be deemed not to have been Incurred in violation of this
Indenture for purposes of this clause (iv) if (I) the holder(s) of such
Indebtedness or their representative or the Company shall have furnished to the
Trustee an opinion of independent legal counsel, unqualified in all material
respects, addressed to the Trustee (which legal counsel may, as to matters of
fact, rely upon an Officers' Certificate of the Company) to the effect that the
Incurrence of such Indebtedness does not violate the provisions of this
Indenture or (II) in the case of any Obligations under the Senior Credit
Facility, the holder(s) of such Obligations or their agent or representative
shall have received a representation from the Company to the effect that the
Incurrence of such Indebtedness does not violate the provisions of this
Indenture, (v) Indebtedness evidenced by the Securities, (vi) Indebtedness of
the Company that is expressly subordinate or junior in right of payment to any
other Indebtedness of the Company, (vii) to the extent that it may constitute
Indebtedness, any obligation owing under leases (other than Capitalized Lease
Obligations) or management agreements and (viii) any obligation that by
operation of law is subordinate to any general unsecured obligations of the
Company.

"Significant Restricted Subsidiary" means, at any date of
determination, (a) any Restricted Subsidiary that, together with its
Subsidiaries that constitute Restricted Subsidiaries (i) for the most recent
fiscal year of the Company accounted for more than 10.0% of the consolidated
revenues of the Company and the Restricted Subsidiaries or (ii) as of the end
of such fiscal year, owned more than 10.0% of the consolidated assets of the
Company and the Restricted Subsidiaries, all as set forth on the consolidated
financial statements of the Company and the Restricted Subsidiaries for such
year prepared in conformity with GAAP, and (b) any Restricted Subsidiary which,
when aggregated with all other Restricted Subsidiaries that are not otherwise
Significant Restricted Subsidiaries and as to which any event described in
clause (8) of Section 6.01 has occurred, would constitute a Significant
Restricted Subsidiary under clause (a) of this definition.

"Stated Maturity", when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment
of interest is due and payable.

"Strategic Equity Investment" means the issuance and sale of
Qualified Equity Interests of the Company for net proceeds to the Company of at
least $25.0 million to a Person

<PAGE> 31
-24-

engaged primarily in the cable television, wireless cable television,
telephone, or interactive television business that has an Equity Market
Capitalization of at least $_____ million.

"Subordinated Indebtedness" means any Indebtedness of the
Company which is expressly subordinated in right of payment to the Securities.

"Subsidiary" means, with respect to any Person, (i) any
corporation of which the outstanding Voting Equity Interests having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (ii) any other
Person of which at least a majority of Voting Equity Interests are at the time,
directly or indirectly, owned by such first named Person.

"Subsidiary Guarantee" has the meaning set forth in Section
4.19.

"Subsidiary Guarantor" means any Subsidiary of the Company
that enters into a Subsidiary Guarantee.

"Surviving Person" means, with respect to any Person involved
in or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.

"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture, except as
provided in Section 10.03.

"Total Consolidated Indebtedness" means, as at any date of
determination, an amount equal to the aggregate amount of all Indebtedness and
Disqualified Equity Interests of the Company and the Restricted Subsidiaries
outstanding as of such date of determination.

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

"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice
president, assistant vice president, assistant secretary or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers,

<PAGE> 32
-25-

and also means, with respect to a particular corporate trust matter, any other
officer to whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.

"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 4.17. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of Section 4.17.

"Voting Equity Interests" means Equity Interests in a
corporation or other Person with voting power under ordinary circumstances
entitling the holders thereof to elect the Board of Directors or other
governing body of such corporation or Person.

"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
aggregate principal amount of such Indebtedness.

"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the outstanding Voting Equity Interests (other than
directors' qualifying shares) of which are owned, directly or indirectly, by
the Company.

SECTION 1.02. Other Definitions.

<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
"Affiliate Transaction" 4.03
"Bankruptcy Law" 6.01
"Custodian" 6.01
"Event of Default" 6.01
"Funding Guarantor" 11.05
"Guarantor Blockage Period" 12.02(a)
"Guarantor Payment Blockage Notice" 12.02(a)
"Other Indebtedness" 4.19
"Participants" 2.13
"Paying Agent" 2.03
"Payment Blockage Notice" 8.02(a)
"Payment Blockage Period" 8.02(a)
</TABLE>

<PAGE> 33
-26-

<TABLE>
<S> <C>
"Permitted Indebtedness" 4.04
"Physical Securities" 2.13
"Registrar" 2.03
"Required Filing Date" 4.12
"Restricted Payment" 4.06
"Revocation" 4.17
"United States Government Obligation" 9.01
"Unutilized Net Cash Proceeds" 4.05
</TABLE>

SECTION 1.03. Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:

"Commission" means the SEC.

"indenture securities" means the Securities.

"indenture security holder" means a Securityholder.

"indenture to be qualified" means this Indenture.

"indenture trustee" or "institutional trustee" means the
Trustee.

"obligor" or "obligors" on the indenture securities means the
Issuers or any other obligor on the Securities.

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

SECTION 1.04. Rules of Construction.

Unless the context otherwise requires:

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

(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles in effect from time to time, and any other
reference in this Indenture to "generally accepted accounting
principles" refers to GAAP;

<PAGE> 34
-27-

(3) "or" is not exclusive;

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

(5) provisions apply to successive events and
transactions; and

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

ARTICLE TWO

THE SECURITIES

SECTION 2.01. Form and Dating.

The Securities and the Trustee's certificates of
authentication shall be substantially in the form of Exhibit A. The Securities
may have notations, legends or endorsements required by law, stock exchange
rule or usage. Any notations, legends or endorsements not contained in the
form of Security contained in Exhibit A shall be delivered in writing to the
Trustee. The Issuers shall approve the form of the Securities and any
notation, legend or endorsement on them. Each Security shall be dated the date
of its authentication.

The terms and provisions contained in the form of the
Securities, annexed hereto as Exhibit A, shall constitute, and are hereby
expressly made, a part of this Indenture.

SECTION 2.02. Execution and Authentication.

Two Officers shall sign the Securities for each of the
Issuers by facsimile signature.

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

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

The Trustee shall authenticate Securities for original issue
in the aggregate principal amount of up to $200,000,000,

<PAGE> 35
-28-

upon a written order signed by two Officers or by an Officer and an Assistant
Treasurer or Assistant Secretary of each of the Issuers. The order shall
specify the amount of Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed $200,000,000 except
as provided in Section 2.07.

The Securities shall initially be issued in the form of one or
more permanent Global Securities, substantially in the form set forth in
Exhibit A. Global Securities shall be registered in the name of a nominee of
the Depository and deposited with the Trustee, at its office, in its
capacity as Securities Custodian, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Each Global Security
shall evidence such of the outstanding Securities as shall be specified therein
and each shall provide that it shall evidence the aggregate principal amount of
outstanding Securities from time to time endorsed thereon, and that the
aggregate principal amount of outstanding Securities represented thereby may
from time to time be reduced or increased, as applicable, to reflect exchanges,
redemptions, and other similar transactions. Any endorsement of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Securities represented thereby shall be made by the Trustee or the
Securities Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof.

The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.

SECTION 2.03. Registrar; Paying Agent; Depository.

The Issuers shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Securities may be presented for
payment ("Paying Agent"). The Issuers may have one or more co-Registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.

The Issuers shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement
the provisions of this Indenture that relate to such Agent and shall, if
required, incorporate the provisions of the TIA. The Issuers shall notify the
Trustee of

<PAGE> 36
-29-

the name and address of any such Agent. If the Issuers fail to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation in accordance with the provisions of Section 7.07.

The Issuers initially appoint the Trustee as Registrar and
Paying Agent. The Issuers shall give written notice to the Trustee in the
event that either of the Issuers decides to act as Registrar or Paying Agent.

The Issuers initially appoint DTC to act as Depository with
respect to any Global Securities and initially appoint the Trustee to act as
Securities Custodian with respect to any Global Securities.

SECTION 2.04. Paying Agent To Hold Money in Trust.

The Issuers shall require each Paying Agent to agree in
writing to hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Securities (whether such money has been paid to it by the Issuers or any
other obligor on the Securities), and the Issuers and the Paying Agent shall
each notify the Trustee of any default by either of the Issuers (or any other
obligor on the Securities) in making any such payment. If either of the
Issuers or a Subsidiary of either of the Issuers acts as Paying Agent, it shall
segregate the money and hold it as a separate trust fund. The Issuers at any
time may require a Paying Agent to pay all money held by it to the Trustee and
account for any funds disbursed and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon making such payment the Paying Agent
shall have no further liability for the money delivered to the Trustee.

SECTION 2.05. Securityholder Lists.

The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders. If the Trustee is not the Registrar, the Issuers
shall furnish to the Trustee at least five Business Days before each Interest
Payment Date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.

<PAGE> 37
-30-

SECTION 2.06. Transfer and Exchange.

Subject to the provisions of Section 2.13, when Securities are
presented to the Registrar or a co-Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Securities of
other authorized denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such transactions are
met. To permit registrations of transfers and exchanges, the Issuers shall
execute and the Trustee shall authenticate Securities. The date of any
Security issued pursuant to this Section 2.06 shall be the date of such
transfer or exchange. No service charge shall be made to the Securityholder
for any registration of transfer or exchange, but the Issuers may require from
the Securityholder payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon exchanges
pursuant to an Offer to Purchase or Section 2.10, 3.06 or 10.05, in which event
the Issuers shall be responsible for the payment of such taxes).

Any Holder of the Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interests in such Global
Security may be effected only through a book-entry system (as described in
Section 2.13) maintained by the Depository (or its agent), and that ownership
of a beneficial interest in the Global Security shall be required to be
reflected in a book entry.

SECTION 2.07. Replacement Securities.

If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements are met. An indemnity bond
in an amount sufficient in the judgment of the Issuers and the Trustee to
protect the Issuers, the Trustee or any Agent from any loss which any of them
may suffer if a Security is replaced may be required by the Trustee or the
Issuers. The Issuers and the Trustee each may charge such Holder for its
expenses in replacing such Security.

Every replacement Security is an additional obligation of the
Issuers.

<PAGE> 38
-31-

SECTION 2.08. Outstanding Securities.

Securities outstanding at any time are all Securities that
have been authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. Except as provided in paragraph 5(b) of the Securities, a
Security does not cease to be outstanding because either of the Issuers or an
Affiliate of either of the Issuers holds the Security.

If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

If the Paying Agent (other than either of the Issuers, a
Subsidiary of either of the Issuers or an Affiliate of either of the Issuers)
holds on a redemption date or Maturity Date money sufficient to pay the
principal of, and interest on Securities payable on that date, then on and
after that date such Securities cease to be outstanding and interest on them
ceases to accrue.

SECTION 2.09. Treasury Securities.

In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by either of the Issuers, any Subsidiary Guarantor or any of
their respective Affiliates shall be disregarded, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that the Trustee actually knows
are so owned shall be so disregarded.

SECTION 2.10. Temporary Securities.

Until definitive Securities are ready for delivery, the
Issuers may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Issuers consider appropriate for
temporary Securities. Without unreasonable delay, the Issuers shall prepare
and the Trustee shall authenticate definitive Securities in exchange for
temporary Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as definitive Securities.

<PAGE> 39
-32-

SECTION 2.11. Cancellation.

The Issuers at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee and no one else shall cancel all Securities surrendered for
transfer, exchange, payment or cancellation. Except as provided in Section
2.07, the Issuers may not issue new Securities to replace, or reissue or
resell, Securities which the Issuers have redeemed, paid, purchased on the open
market or otherwise, or otherwise acquired or have been delivered to the
Trustee for cancellation. The Trustee (subject to the record-retention
requirements of the Exchange Act) may, but shall not be required to destroy
cancelled Securities.

SECTION 2.12. Defaulted Interest.

If the Issuers default in a payment of interest on the
Securities, they shall pay the defaulted interest, plus any interest payable on
the defaulted interest pursuant to Section 4.01 hereof, to the persons who are
Securityholders on a subsequent special record date, and such term, as used in
this Section 2.12 with respect to the payment of any defaulted interest, shall
mean the fifteenth day next preceding the date fixed by the Issuers for the
payment of defaulted interest, whether or not such day is a Business Day. At
least 15 days before such special record date, the Issuers shall mail to each
Securityholder and to the Trustee a notice that states such special record
date, the payment date and the amount of defaulted interest to be paid.

SECTION 2.13. Book-Entry Provisions for Global Securities.

(a) The Global Securities initially shall (i) be
registered in the name of the Depository or the nominee of such Depository,
(ii) be delivered to the Trustee as custodian for such Depository and (iii)
bear legends as set forth in Exhibit C.

Members of, or participants in, the Depository
("Participants") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Security, and the Depository may be treated by
the Issuers, the Trustee and any agent of the Issuers or the Trustee as the
absolute owner of the Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the
Trustee or any agent of the Issuers or

<PAGE> 40
-33-

the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.

(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the Global Securities
may be transferred or exchanged for certificated Securities ("Physical
Securities") in accordance with the rules and procedures of the Depository. In
addition, Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Issuers that it is unwilling or unable to continue as
Depository for any Global Security and a successor depositary is not appointed
by the Issuers within 30 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.

(c) In connection with any transfer or exchange of a
portion of the beneficial interest in any Global Security to beneficial owners
pursuant to paragraph (b), the Registrar shall (if one or more Physical
Securities are to be issued) reflect on its books and records the date and a
decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred or exchanged, and the Issuers shall execute (and any Subsidiary
Guarantor shall execute the Subsidiary Guarantee endorsed thereon), and the
Trustee, pursuant to instructions set forth in an Officers' Certificate from
each of the Issuers, shall authenticate and deliver, one or more Physical
Securities of like tenor and amount.

(d) In connection with the transfer or exchange of Global
Securities as an entirety to beneficial owners pursuant to paragraph (b), the
Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuers shall execute (and any Subsidiary Guarantor shall
execute the Subsidiary Guarantee endorsed thereon), and the Trustee, pursuant
to instructions set forth in an Officers' Certificate from each of the Issuers,
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the Global Securities, an
equal aggregate principal amount of Physical Securities of authorized
denominations.

<PAGE> 41
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(e) The Holder of any Global Security may grant proxies
and otherwise authorize any person, including Participants and persons that may
hold interests through Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.

ARTICLE THREE

REDEMPTION

SECTION 3.01. Notices to Trustee.

If the Issuers are to effect the redemption of any Securities
pursuant to paragraph 5 of the Securities at the applicable redemption price
set forth therein, they shall notify the Trustee in writing of the redemption
date and the principal amount of Securities to be redeemed.

The Issuers shall give the notice provided for in this Section
3.01 at least 45 days before the redemption date (unless a shorter notice shall
be agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.

SECTION 3.02. Selection of Securities To Be Redeemed.

If less than all of the Securities are to be redeemed pursuant
to paragraph 5 thereof, the Trustee shall select the Securities to be redeemed
pro rata or by lot or in such other manner as the Trustee shall deem
appropriate and fair. The Trustee shall make the selection from the Securities
then outstanding, subject to redemption and not previously called for
redemption. The Trustee may select for redemption portions (equal to $1,000 or
any integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption.

SECTION 3.03. Notice of Redemption.

At least 30 days but not more than 60 days before a redemption
date, the Issuers shall mail a notice of redemption by first-class mail to each
Holder whose Securities are to be redeemed at such Holder's registered address.

The notice shall identify the Securities to be redeemed and
shall state:

<PAGE> 42
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(1) the redemption date;

(2) the redemption price;

(3) the CUSIP number;

(4) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;

(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;

(6) that, unless the Issuers default in making the
redemption payment, interest on Securities called for redemption
ceases to accrue on and after the redemption date and the only
remaining right of the Holders is to receive payment of the redemption
price upon surrender of such Securities to the Paying Agent; and

(7) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and
that, after the redemption date, upon surrender of such Security, a
new Security or Securities in principal amount equal to the unredeemed
portion thereof will be issued.

At the Issuers' request, the Trustee shall give the notice of
redemption on behalf of the Issuers, in the Issuers' name and at the Issuers'
expense.

SECTION 3.04. Effect of Notice of Redemption.

Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price, plus accrued interest thereon to the redemption date, but
interest installments whose maturity is on or prior to such redemption date
shall be payable to the Holders of record at the close of business on the
relevant record dates referred to in the Securities. The Trustee shall not be
required to (i) issue, authenticate, register the transfer of or exchange any
Security during a period beginning 15 days before the date a notice of
redemption is mailed and ending at the close of business on the date the
redemption notice is mailed, or (ii) register the transfer or exchange of any
Security so selected for redemption

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in whole or in part, except the unredeemed portion of any Security being
redeemed in part.

SECTION 3.05. Deposit of Redemption Price.

At least one Business Day before the redemption date, the
Issuers shall deposit with the Paying Agent (or if either of the Issuers is the
Paying Agent, such Issuer shall, on or before the redemption date, segregate
and hold in trust) money sufficient to pay the redemption price of and accrued
and unpaid interest on all Securities to be redeemed on that date other than
Securities or portions thereof called for redemption on that date which have
been delivered by the Issuers to the Trustee for cancellation.

SECTION 3.06. Securities Redeemed in Part.

Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.

ARTICLE FOUR

COVENANTS

SECTION 4.01. Payment of Securities.

The Issuers shall pay the principal of and interest on the
Securities in the manner provided in the Securities. An installment of
principal or interest shall be considered paid on the date due if the Trustee
or Paying Agent (other than the Issuers, a Subsidiary or an Affiliate of the
Issuers) holds on that date money designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
of the Securities pursuant to the terms of this Indenture.

The Issuers shall pay interest on overdue principal at the
same rate per annum borne by the Securities. The Issuers shall pay interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful.

Payments of the principal of and interest on any Global
Securities will be made to the Depository or its nominee, as the case may be,
as the registered owner thereof. None of the Issuers, the Trustee nor any
Paying Agent will have any

<PAGE> 44
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responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in any Global
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interest.

SECTION 4.02. Maintenance of Office or Agency.

The Issuers shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Issuers in respect of the Securities and
this Indenture may be served. The Issuers shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuers shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 13.02.

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

SECTION 4.03. Limitation on Transactions with
Affiliates and Related Persons.

The Company will not, and will not permit, cause or suffer any
Restricted Subsidiary to, directly or indirectly, conduct any business or enter
into any transaction (or series of related transactions) with or for the
benefit of any of their respective Affiliates or any beneficial holder of 10%
or more of the Equity Interests of the Company or any officer, director or
employee of the Company or any Restricted Subsidiary (each an "Affiliate
Transaction"), unless (a) such Affiliate Transaction is on terms which are no
less favorable to the Company or such Restricted Subsidiary, as the case may
be, than would be available in a comparable transaction with an unaffiliated
third party, (b) if such Affiliate Transaction (or series of related Affiliate
Transactions) involves aggregate payments or other

<PAGE> 45
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consideration having a Fair Market Value in excess of $5.0 million, a majority
of the disinterested members of the Board of Directors of FV Inc. shall have
approved such transaction and determined that such transaction complies with
the foregoing provisions and (c) if such Affiliate Transaction (or series of
related Affiliate Transactions) involves aggregate payments or other
consideration having a Fair Market Value of $25.0 million or more, the Company
shall have obtained a written opinion from an Independent Financial Advisor
stating that the terms of such Affiliate Transaction are fair to the Company or
the Restricted Subsidiary, as the case may be, from a financial point of view.

Notwithstanding the foregoing, the restrictions set forth in
this Section 4.03 shall not apply to (i) transactions with or among the Company
and the Wholly Owned Restricted Subsidiaries, (ii) customary directors' fees,
indemnification and similar arrangements, consulting fees, employee salaries,
bonuses or employment agreements, compensation or employee benefit arrangements
and incentive arrangements with any officer, director or employee of the
Company entered into in the ordinary course of business (including customary
benefits thereunder) and payments under any indemnification arrangements
permitted by applicable law, (iii) the Agreement of Limited Partnership of the
Company as in effect on the Issue Date, including any amendment or extension
thereof that does not otherwise violate any other covenant set forth in this
Indenture, and any transactions undertaken pursuant to any other contractual
obligations in existence on the Issue Date (as in effect on the Issue Date),
(iv) the issue and sale by the Company to its partners or stockholders of
Qualified Equity Interests, (v) any Restricted Payments made in compliance with
Section 4.06 (including without limitation the making of any payments or
distributions permitted to be made in accordance with clauses (i) through (vi)
of the penultimate paragraph of Section 4.06), (vi) loans and advances to
officers, directors and employees of the Company and the Restricted
Subsidiaries for travel, entertainment, moving and other relocation expenses,
in each case made in the ordinary course of business and consistent with past
business practices, (vii) customary commercial banking, investment banking,
underwriting, placement agent or financial advisory fees paid in connection
with services rendered to the Company and its Subsidiaries in the ordinary
course, (viii) the Incurrence of intercompany Indebtedness permitted pursuant
to clause (d) under the definition of "Permitted Indebtedness" set forth in
Section 4.04 and (ix) the pledge of Equity Interests of Unrestricted
Subsidiaries to support the Indebtedness thereof and (x) the Senior Credit
Facility.

<PAGE> 46
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SECTION 4.04. Limitation on Indebtedness.

The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness) or issue any Disqualified Equity Interests except for
Permitted Indebtedness; provided, however, that the Company or any Restricted
Subsidiary may Incur Indebtedness and the Company or any Restricted Subsidiary
may issue Disqualified Equity Interests if, at the time of and immediately
after giving pro forma effect to such Incurrence of Indebtedness or issuance
of Disqualified Equity Interests and the application of the proceeds therefrom,
the Debt to Operating Cash Flow Ratio would be less than or equal to (i) 7.0 to
1.0 if the date of such Incurrence is on or before December 31, 1997 and (ii)
6.75 to 1.0 thereafter.

The foregoing limitations will not apply to the Incurrence of
any of the following (collectively, "Permitted Indebtedness"), each of which
shall be given independent effect:

(a) Indebtedness under the Securities and this Indenture;

(b) Indebtedness and Disqualified Equity Interests of the
Company and the Restricted Subsidiaries outstanding on the Issue Date;

(c) Indebtedness under the Senior Credit Facility in an
aggregate principal amount at any one time outstanding not to exceed
the sum of (A) $ million, which amount shall be reduced by (x)
any permanent reduction of commitments thereunder and (y) any other
repayment accompanied by a permanent reduction of commitments
thereunder (other than in connection with any refinancing thereof),
plus (B) any amounts outstanding under the Senior Credit Facility that
utilize subparagraph (i) of this paragraph of Section 4.04;

<PAGE> 47
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Indebtedness of the Company or a Wholly Owned Restricted Subsidiary
referred to in this clause (d) to a Person (other than the Company or
a Wholly Owned Restricted Subsidiary), (ii) any sale or other
disposition of Equity Interests of a Wholly Owned Restricted
Subsidiary which holds Indebtedness of the Company or another Wholly
Owned Restricted Subsidiary such that such Wholly Owned Restricted
Subsidiary ceases to be a Wholly Owned Restricted Subsidiary or (iii)
designation of a Wholly Owned Restricted Subsidiary which holds
Indebtedness of the Company as an Unrestricted Subsidiary;

(e) guarantees by any Restricted Subsidiary of
Indebtedness of the Company;

(f) Interest Rate Protection Obligations of the Company
or any Restricted Subsidiary relating to Indebtedness of the Company
or such Restricted Subsidiary, as the case may be (which Indebtedness
(i) bears interest at fluctuating interest rates and (ii) is otherwise
permitted to be Incurred under this Section 4.04); provided, however,
that the notional principal amount of such Interest Rate Protection
Obligations does not exceed the principal amount of the Indebtedness
to which such Interest Rate Protection Obligations relate;

(g) Purchase Money Indebtedness and Capitalized Lease
Obligations of the Company or any Restricted Subsidiary which do not
exceed $ million in the aggregate at any one time outstanding;

<PAGE> 48
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Interests being refinanced plus the amount of accrued interest or
dividends thereon and the amount of any reasonably determined
prepayment premium necessary to accomplish such refinancing and such
reasonable fees and expenses incurred in connection therewith, (iii)
Indebtedness representing a refinancing of Indebtedness other than
Senior Indebtedness shall have a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of the
Indebtedness being refinanced, and (iv) Indebtedness that is pari
passu with the Securities may only be refinanced with Indebtedness
that is made pari passu with or subordinate in right of payment to the
Securities and Subordinated Indebtedness or Disqualified Equity
Interests may only be refinanced with Subordinated Indebtedness or
Disqualified Equity Interests; and

(i) in addition to the items referred to in clauses (a)
through (h) above, Indebtedness of the Company (including any
Indebtedness under the Senior Credit Facility that utilizes this
clause (i)) having an aggregate principal amount not to exceed $
million at any time outstanding.

SECTION 4.05. Disposition of Proceeds of Asset Sales.

(a) The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, make any Asset Sale, unless
(i) the Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed of and (ii) either (A) at least
75% of such consideration consists of cash or Cash Equivalents or (B) at least
75% of such consideration consists of (x) properties and capital assets
(including franchises and licenses required to own or operate such properties)
to be used in the same lines of business being conducted by the Company or any
Restricted Subsidiary at such time or (y) Equity Interests in one or more
Persons which thereby become Wholly Owned Restricted Subsidiaries whose assets
consist primarily of such properties and capital assets. The amount of any (i)
liabilities of the Company or any Restricted Subsidiary that are actually
assumed by the transferee in such Asset Sale and from which the Company and the
Restricted Subsidiaries are fully released shall be deemed to be cash for
purposes of determining the percentage of cash consideration received by the
Company or the Restricted Subsidiaries and (ii) notes or other similar
obligations received by the Company or the Restricted Subsidiaries from such
transferee that are immediately converted (or are converted within thirty days
of the

<PAGE> 49
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related Asset Sale) by the Company or the Restricted Subsidiaries into cash
shall be deemed to be cash, in an amount equal to the net cash proceeds
realized upon such conversion, for purposes of determining the percentage of
cash consideration received by the Company or the Restricted Subsidiaries.

The Company or such Restricted Subsidiary, as the case may be,
may (i) apply the Net Cash Proceeds of any Asset Sale within 365 days of
receipt thereof to repay Senior Indebtedness and permanently reduce any related
commitment; provided, however, that if Indebtedness under the revolving credit
portion of the Senior Credit Facility is repaid, the Company need not reduce
the commitments for such revolving credit portion, or (ii) commit in writing to
acquire, construct or improve properties and capital assets (including
franchises and licenses required to own or operate any such assets or
properties) to be used in the same line of business being conducted by the
Company or any Restricted Subsidiary at such time and so apply such Net Cash
Proceeds within 365 days of the receipt thereof.

To the extent all or part of the Net Cash Proceeds of any
Asset Sale are not so applied within 365 days of such Asset Sale (such Net Cash
Proceeds, the "Unutilized Net Cash Proceeds"), the Company shall, within 30
days of such 365th day, make an Offer to Purchase from all Holders of
Securities up to a maximum principal amount (expressed as a multiple of $1,000)
of Securities equal to such Unutilized Net Cash Proceeds, at a purchase price
in cash equal to 100% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the date of purchase; provided, however, that the
Offer to Purchase may be deferred until there are aggregate Unutilized Net Cash
Proceeds equal to or in excess of $5.0 million, at which time the entire amount
of such Unutilized Net Cash Proceeds, and not just the amount in excess of $5.0
million, shall be applied as required pursuant to this paragraph. In the event
that any other Indebtedness of the Company which ranks pari passu with the
Securities requires the repayment or prepayment thereof, or an offer to
purchase to be made to repurchase such Indebtedness, upon the consummation of
any Asset Sale, the Company may apply the Unutilized Net Cash Proceeds
otherwise required to be applied to an Offer to Purchase to repay, prepay or
offer to purchase such other Indebtedness and to an Offer to Purchase pro rata
based upon the aggregate principal amount of the Securities then outstanding
and the aggregate principal amount (or accreted amount, if less) of such other
Indebtedness then outstanding. The Offer to Purchase shall remain open for a
period of 20 Business Days or such longer period as may be required by law. To
the extent the aggregate amount of Securities tendered

<PAGE> 50
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pursuant to the Offer to Purchase exceeds the Unutilized Net Cash Proceeds,
Securities shall be purchased among Holders on a proportionate basis (based on
the relative aggregate principal amounts validly tendered for purchase by
Holders thereof). To the extent the Unutilized Net Cash Proceeds exceeds the
aggregate amount of Securities tendered by the Holders of the Securities
pursuant to the Offer to Purchase, the Company may retain and utilize any
portion of the Unutilized Net Cash Proceeds not applied to repurchase the
Securities for any purpose consistent with the other terms of this Indenture.

In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and
Rule 14e-1 under, the Exchange Act and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed an Event of Default or an event that with the
passing of time or giving of notice, or both, would constitute an Event of
Default.

(b) The Company will mail the Offer for an Offer to
Purchase required pursuant to Section 4.05(a) not more than 395 days after
consummation of the Asset Sale resulting in the Offer to Purchase. Each Holder
shall be entitled to tender all or any portion of the Securities owned by such
Holder pursuant to the Offer to Purchase, subject to the requirement that any
portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount and subject to any proration of the Offer among
tendering Holders if the aggregate amount of Securities tendered exceeds the
Unutilized Net Cash Proceeds.

(c) Not later than the date of the Offer with respect to
an Offer to Purchase pursuant to this Section 4.05, the Company shall deliver
to the Trustee an Officers' Certificate as to the Purchase Amount.

On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment (on a pro rata basis, if
necessary) Securities or portions thereof validly tendered pursuant to such
Offer, (ii) deposit with the Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 2.04)
money sufficient to pay the Purchase Price of all Securities or portions
thereof so accepted and (iii) deliver or cause to be delivered to the Trustee
for cancellation all Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof accepted for payment by
the

<PAGE> 51
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Company. The Paying Agent (or the Company, if so acting) shall promptly mail
or deliver to Holders of Securities so accepted payment in an amount equal to
the Purchase Price for such Securities, and the Trustee shall promptly
authenticate and mail or deliver to each Holder a new Security or Securities
equal in principal amount to any unpurchased portion of the Security
surrendered as requested by the Holder. Any Security not accepted for payment
shall be promptly mailed or delivered by the Company to the Holder thereof.
The Company shall publicly announce the results of the Offer on or as soon as
practicable after the Purchase Date.

SECTION 4.06. Limitation on Restricted Payments.

The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly,

(i) declare or pay any dividend or any other distribution
on any Equity Interests of the Company or any Restricted Subsidiary or
make any payment or distribution to the direct or indirect holders (in
their capacities as such) of Equity Interests of the Company or any
Restricted Subsidiary (other than payments or distributions made to
the Company or a Wholly Owned Restricted Subsidiary and dividends or
distributions payable solely in Qualified Equity Interests of the
Company or in options, warrants or other rights to purchase Qualified
Equity Interests of the Company);

(ii) purchase, redeem or otherwise acquire or retire for
value any Equity Interests of the Company or any Restricted Subsidiary
(other than any such Equity Interests owned by the Company or a Wholly
Owned Restricted Subsidiary);

(iii) purchase, redeem, defease or retire for value more
than one year prior to the stated maturity thereof any Subordinated
Indebtedness (other than any Subordinated Indebtedness held by a
Wholly Owned Restricted Subsidiary); or

(iv) make any Investment (other than Permitted
Investments) in any Person (other than in the Company, a Wholly Owned
Restricted Subsidiary or a Person that becomes a Wholly Owned
Restricted Subsidiary, or is merged with or into or consolidated with
the Company or a Wholly Owned Restricted Subsidiary (provided the
Company or a Wholly

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Owned Restricted Subsidiary is the survivor), as a result of or in
connection with such Investment)

(such payments or any other actions (other than Permitted Investments)
described in (i), (ii), (iii) and (iv) collectively, "Restricted Payments"),
unless

(a) no Default or Event of Default shall have occurred
and be continuing at the time or after giving effect to such
Restricted Payment;

(b) immediately after giving effect to such Restricted
Payment, the Company would be able to Incur $1.00 of Indebtedness
(other than Permitted Indebtedness) under the Debt to Operating Cash
Flow Ratio of the first paragraph of Section 4.04; and

(c) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments declared or
made on or after the Issue Date does not exceed an amount equal to the
sum of (1) the difference between (x) the Cumulative Available Cash
Flow determined at the time of such Restricted Payment and (y) 140% of
cumulative Consolidated Interest Expense of the Company determined for
the period commencing on the Issue Date and ending on the last day of
the latest fiscal quarter for which consolidated financial statements
of the Company are available preceding the date of such Restricted
Payment, plus (2) the aggregate net proceeds (with the value of any
non-cash proceeds to be the Fair Market Value thereof as determined by
an Independent Financial Advisor) received by the Company either (x)
as capital contributions to the Company after the Issue Date or (y)
from the issue and sale (other than to a Restricted Subsidiary) of its
Qualified Equity Interests after the Issue Date (excluding the net
proceeds from any issuance and sale of Qualified Equity Interests
financed, directly or indirectly, using funds borrowed from the
Company or any Restricted Subsidiary until and to the extent such
borrowing is repaid), plus (3) the principal amount (or accrued or
accreted amount, if less) of any Indebtedness of the Company or any
Restricted Subsidiary Incurred after the Issue Date which has been
converted into or exchanged for Qualified Equity Interests of the
Company, plus (4) in the case of the disposition or repayment of any
Investment constituting a Restricted Payment made after the Issue
Date, an amount (to the extent not included in the computation of
Cumulative Available Cash Flow) equal to the lesser of: (i) the
return of capital with respect to such Investment and

<PAGE> 53
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(ii) the amount of such Investment which was treated as a Restricted
Payment, in either case, less the cost of the disposition of such
Investment, plus (5) the Company's proportionate interest in the
lesser of the Fair Market Value or the net worth of any Unrestricted
Subsidiary that has been redesignated as a Restricted Subsidiary after
the Issue Date in accordance with Section 4.17 not to exceed in any
case the Designation Amount with respect to such Restricted Subsidiary
upon its Designation, minus (6) the Designation Amount with respect to
any Subsidiary of the Company which has been designated as an
Unrestricted Subsidiary after the Issue Date in accordance with
Section 4.17.

<PAGE> 54
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of the Company or such Restricted Subsidiary (and any intermediate entity
through which such holder owns such Equity Interests) being a partnership or
similar pass-through entity for federal income tax purposes; (v) so long as no
Default or Event of Default has occurred and is continuing, any Investment made
out of the net cash proceeds of the substantially concurrent issue and sale
(other than to a Restricted Subsidiary) of Qualified Equity Interests of the
Company; provided, however, that any such net cash proceeds are excluded from
clause (c)(2) of the preceding paragraph (and were not included therein at any
time); or (vi) the purchase, redemption or other acquisition, cancellation or
retirement for value of Equity Interests, or options, warrants, equity
appreciation rights or other rights to purchase or acquire Equity Interests, of
the Company or any Restricted Subsidiary, or similar securities, held by
officers or employees or former officers or employees of the Company or any
Restricted Subsidiary (or their estates or beneficiaries under their estates),
upon death, disability, retirement or termination of employment, not to exceed
$ in any calendar year.

In determining the amount of Restricted Payments permissible
under this Section 4.06, amounts expended pursuant to clauses (i) and (vi) of
the immediately preceding paragraph shall be included as Restricted Payments
and amounts expended pursuant to clauses (ii) through (v) shall be excluded.
The amount of any non-cash Restricted Payment shall be deemed to be equal to
the Fair Market Value thereof at the date of the making of such Restricted
Payment.

SECTION 4.07. Corporate Existence.

Subject to Article Five, the Issuers shall do or shall cause
to be done all things necessary to preserve and keep in full force and effect
their respective corporate or partnership existence, as the case may be, and
the corporate, partnership or other existence of each of the Restricted
Subsidiaries in accordance with the respective organizational documents of each
such Restricted Subsidiary and the rights (charter and statutory), licences and
franchises of the Issuers and the Restricted Subsidiaries; provided, however,
that the Issuers shall not be required to preserve any such right, license or
franchise, or the corporate or partnership existence of any Restricted
Subsidiary, if the Board of Directors of FV Inc. shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Issuers and the Restricted Subsidiaries, taken as a whole, and that the
loss thereof is not, and will not be, adverse in any material respect to the
Holders; provided, further, however, that a determination of the Board of

<PAGE> 55
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Directors of FV Inc. shall not be required in the event of a merger of one or
more Wholly Owned Restricted Subsidiaries of the Company with or into another
Wholly Owned Restricted Subsidiary of the Company or another Person, if the
surviving Person is a Wholly Owned Restricted Subsidiary of the Company
organized under the laws of the United States or a State thereof or of the
District of Columbia.

SECTION 4.08. Payment of Taxes and Other Claims.

The Issuers shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon either of the
Issuers or any of their Restricted Subsidiaries or upon the income, profits or
property of either of the Issuers or any of their Restricted Subsidiaries and
(2) all lawful claims for labor, materials and supplies which, in each case, if
unpaid, might by law become a material liability, or Lien (other than a
Permitted Lien) upon the property, of either Issuer or any of their Restricted
Subsidiaries; provided, however, that the Issuers shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings and for which appropriate reserves or other
provision has been made.

SECTION 4.09. Notice of Defaults.

(1) In the event that any Indebtedness of either of the
Issuers or any of their Restricted Subsidiaries is declared due and payable
before its maturity because of the occurrence of any default (or any event
which, with notice or lapse of time, or both, would constitute such a default)
under such Indebtedness, the Issuers shall promptly give written notice to the
Trustee of such declaration, the status of such default or event and what
action the Issuers are taking or propose to take with respect thereto.

(2) Upon becoming aware of any Default or Event of
Default, the Issuers shall promptly deliver an Officers' Certificate to the
Trustee specifying the Default or Event of Default.

SECTION 4.10. Maintenance of Properties.

The Company shall cause all material properties owned by or
leased to it or any of its Restricted Subsidiaries and used

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or useful in the conduct of its business or the business of any of its
Restricted Subsidiaries to be maintained and kept in normal condition, repair
and working order and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary,
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company or any of its Restricted Subsidiaries from
discontinuing the use, operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the
judgment of the Board of Directors of FV Inc. or of the board of directors of
the Restricted Subsidiary concerned, or of an officer (or other agent employed
by the Company or of any of its Restricted Subsidiaries) of the Company or such
Restricted Subsidiary having responsibility for any such property, desirable in
the conduct of the business of the Company or any of its Restricted
Subsidiaries, and if such discontinuance or disposal is not adverse in any
material respect to the Holders.

SECTION 4.11. Compliance Certificate.

The Issuers shall deliver to the Trustee within 100 days after
the close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer of each of
the Issuers stating that a review of the activities of the Issuers has been
made under the supervision of the signing officers with a view to determining
whether a Default or Event of Default has occurred and whether or not the
signers know of any Default or Event of Default that occurred during such
fiscal year. If they do know of such a Default or Event of Default, the
certificate shall describe all such Defaults or Events of Default, their status
and the action the Issuers are taking or propose to take with respect thereto.
The first certificate to be delivered by the Issuers pursuant to this Section
4.11 shall be for the fiscal year ending December 31, 1996.

SECTION 4.12. Provision of Financial Information.

Whether or not the Issuers are subject to Section 13(a) or
15(d) of the Exchange Act, or any successor provision thereto, the Issuers
shall file with the SEC the annual reports, quarterly reports and other
documents which the Issuers would have been required to file with the SEC
pursuant to such Section 13(a) or 15(d) or any successor provision thereto if
the Issuers were so required, such documents to be filed with the Commission on
or

<PAGE> 57
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prior to the respective dates (the "Required Filing Dates") by which the
Issuers would have been required so to file such documents if the Issuers were
so required. The Issuers shall also in any event (a) within 15 days of each
Required Filing Date (whether or not permitted or required to file with the
SEC) (i) transmit by mail to all holders of Securities, as their names and
addresses appear in the note register, without cost to such holders, and (ii)
file with the Trustee, copies of the annual reports, quarterly reports and
other documents which the Issuers are required to file with the SEC pursuant to
the preceding sentence or, if such filing is not so permitted, information and
data of a similar nature, and (b) if, notwithstanding the preceding sentence,
filing such documents by the Issuers with the SEC is not permitted under the
Exchange Act, promptly upon written request supply copies of such documents to
any prospective Holder. The Issuers shall not be obligated to file any such
reports with the SEC if the SEC does not permit such filings for all companies
similarly situated other than due to any action or inaction by the Issuers.
The Issuers will also comply with Section 314(a) of the TIA.

SECTION 4.13. Waiver of Stay, Extension or Usury Laws.

Each of the Issuers and the Subsidiary Guarantors covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law, which would
prohibit or forgive either of the Issuers or such Subsidiary Guarantor from
paying all or any portion of the principal of and/or interest on the
Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each of the
Issuers and the Subsidiary Guarantors hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.

SECTION 4.14. Change of Control.

(a) The Company shall, within 30 days following the date
of consummation of a transaction resulting in a Change of Control, commence an
Offer to Purchase all outstanding Securities at a purchase price in cash equal
to 101% of their principal amount plus accrued and unpaid interest to the
Purchase Date. Such Offer to Purchase will be consummated not earlier than

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30 days and not later than 65 days after the commencement thereof. Each Holder
shall be entitled to tender all or any portion of the Securities owned by such
Holder pursuant to the Offer to Purchase, subject to the requirement that any
portion of a Security tendered must bear an integral multiple of $1,000
principal amount.

(b) On or prior to the Purchase Date specified in the
Offer to Purchase, the Company shall (i) accept for payment all Securities or
portions thereof validly tendered pursuant to the Offer, (ii) deposit with the
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 2.04) money sufficient to pay the
Purchase Price of all Securities or portions thereof so accepted and (iii)
deliver or cause to be delivered to the Trustee for cancellation all Securities
so accepted together with an Officers' Certificate stating the Securities or
portions thereof accepted for payment by the Company. The Paying Agent (or the
Company, if so acting) shall promptly mail or deliver to Holders of Securities
so accepted payment in an amount equal to the Purchase Price for such
Securities, and the Trustee shall promptly authenticate and mail or deliver to
each Holder a new Security or Securities equal in principal amount to any
unpurchased portion of the Security surrendered as requested by the Holder.
Any Security not accepted for payment shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Offer on or as soon as practicable after the Purchase Date.

SECTION 4.15. Limitation on Senior Subordinated Indebtedness.

(a) The Issuers shall not directly or indirectly Incur
any Indebtedness that by its terms would expressly rank senior in right of
payment to the Securities and expressly rank subordinate in right of payment to
any Senior Indebtedness.

(b) The Company shall not permit any Subsidiary Guarantor
to and no Subsidiary Guarantor will, directly or

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indirectly, Incur any Indebtedness that by its terms would expressly rank
senior in right of payment to the Subsidiary Guarantee of such Subsidiary
Guarantor and expressly rank subordinate in right of payment to any Guarantor
Senior Indebtedness of such Subsidiary Guarantor.

SECTION 4.16. Limitations on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries.

The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions to
the Company or any other Restricted Subsidiary on its Equity Interests or with
respect to any other interest or participation in, or measured by, its profits,
or pay any Indebtedness owed to the Company or any other Restricted Subsidiary,
(b) make loans or advances to, or guarantee any Indebtedness or other
obligations of, the Company or any other Restricted Subsidiary or (c) transfer
any of its properties or assets to the Company or any other Restricted
Subsidiary, except for such encumbrances or restrictions existing under or by
reason of (i) the Senior Credit Facility or other agreements of the Company or
the Restricted Subsidiaries outstanding on the Issue Date, in each case as in
effect on the Issue Date, and any amendments, restatements, renewals,
replacements or refinancings (collectively, a "refinancing") thereof; provided,
however, that such refinancings are no more restrictive in the aggregate with
respect to such encumbrances or restrictions than those contained in the Senior
Credit Facility on the Issue Date, (ii) applicable law, (iii) any instrument
governing Indebtedness or Equity Interests of an Acquired Person acquired by
the Company or any Restricted Subsidiary as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred by such
Acquired Person in connection with, as a result of or in contemplation of such
acquisition); provided, however, that such encumbrances and restrictions are
not applicable to the Company or any Restricted Subsidiary, or the properties
or assets of the Company or any Restricted Subsidiary, other than the Acquired
Person, (iv) customary non-assignment provisions in leases or cable television
franchises entered into in the ordinary course of business and consistent with
past practices, (v) Purchase Money Indebtedness for property acquired in the
ordinary course of business that only imposes encumbrances and restrictions on
the property so acquired, (vi) any agreement for the sale or disposition of the
Equity Interests or assets of any Restricted Subsidiary; provided, however,
that such encumbrances and

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restrictions described in this clause (vi) are only applicable to such
Restricted Subsidiary or assets, as applicable, and any such sale or
disposition is made in compliance with Section 4.05 to the extent applicable
thereto, (vii) refinancing Indebtedness permitted under clause (h) of Section
4.04; provided, however, that the encumbrances and restrictions contained in
the agreements governing such Indebtedness are no more restrictive in the
aggregate than those contained in the agreements governing the Indebtedness
being refinanced immediately prior to such refinancing, (viii) this Indenture
or (ix) any such encumbrance or restriction existing under any other agreement,
instrument or document hereafter in effect; provided, however, that the terms
and conditions of any such encumbrance or restriction are not more restrictive
than those contained in the Senior Credit Facility as in effect on the Issue
Date.

SECTION 4.17. Designation of Unrestricted Subsidiaries.

The Company may designate any Subsidiary of the Company as an
"Unrestricted Subsidiary" under this Indenture (a "Designation") only if:

(a) no Default or Event of Default shall have occurred
and be continuing at the time of or after giving effect to such
Designation;

(b) at the time of and after giving effect to such
Designation, the Company could Incur $1.00 of additional Indebtedness
under the Debt to Operating Cash Flow Ratio of the first paragraph of
Section 4.04; and

(c) the Company would be permitted to make an Investment
(other than a Permitted Investment) at the time of Designation
(assuming the effectiveness of such Designation) pursuant to the first
paragraph of Section 4.06 in an amount (the "Designation Amount")
equal to the Company's proportionate interest in the Fair Market Value
of such Subsidiary on such date.

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holder thereof may (upon notice, lapse of time or both) declare a default
thereon or cause the payment thereof to be accelerated or payable prior to its
final scheduled maturity upon the occurrence of a default with respect to any
Indebtedness of any Unrestricted Subsidiary, except, in the case of clause (x)
or (y), to the extent otherwise permitted under the terms of this Indenture,
including, without limitation, pursuant to Sections 4.04 and 4.06.

The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:

(a) no Default or Event of Default shall have occurred
and be continuing at the time of and after giving effect to such
Revocation; and

(b) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation would, if
Incurred at such time, have been permitted to be Incurred for all
purposes of this Indenture.

All Designations and Revocations must be evidenced by
resolutions of the Board of Directors of FV Inc., on behalf of the Company,
delivered to the Trustee certifying compliance with the foregoing provisions.

SECTION 4.18. Limitation on Liens.

The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Liens of any kind against or
upon any of their respective properties or assets now owned or hereafter
acquired, or any proceeds therefrom or any income or profits therefrom, to
secure any Indebtedness unless contemporaneously therewith effective provision
is made to secure the Securities equally and ratably with such Indebtedness
with a Lien on the same properties and assets securing Indebtedness for so long
as such Indebtedness is secured by such Lien, except for (i) Liens securing
Senior Indebtedness or any guarantee of Senior Indebtedness by any Restricted
Subsidiary and (ii) Permitted Liens.

SECTION 4.19. Limitation on Guarantees of Indebtedness
by Restricted Subsidiaries.

In the event that any Restricted Subsidiary (other than a
Subsidiary Guarantor), directly or indirectly, guarantees any Indebtedness of
the Company other than the Securities (the "Other Indebtedness"), the Company
shall cause such Restricted

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Subsidiary to concurrently guarantee (a "Subsidiary Guarantee") the Company's
Obligations under this Indenture and the Securities to the same extent that
such Restricted Subsidiary guaranteed the Company's Obligations under the Other
Indebtedness (including waiver of subrogation, if any); provided, however, that
if such Other Indebtedness is (i) Senior Indebtedness, the Subsidiary Guarantee
shall be subordinated in right of payment to all Guarantor Senior Indebtedness
(which shall include such guarantee of such Other Indebtedness) pursuant to the
subordination provisions of Article Twelve, (ii) Senior Subordinated
Indebtedness, the Subsidiary Guarantee shall be pari passu in right of payment
with the guarantee of the Other Indebtedness, or (iii) Subordinated
Indebtedness, the Subsidiary Guarantee shall be senior in right of payment to
the guarantee of the Other Indebtedness (which guarantee of such Subordinated
Indebtedness shall provide that such guarantee is subordinated to the
Subsidiary Guarantees to the same extent and in the same manner as the
Securities are subordinated to Senior Indebtedness); provided, further,
however, that each Subsidiary issuing a Subsidiary Guarantee will be
automatically and unconditionally released and discharged from its obligations
under such Subsidiary Guarantee upon the release or discharge of the guarantee
of the Other Indebtedness that resulted in the creation of such Subsidiary
Guarantee, except a discharge or release by, or as a result of, any payment
under the guarantee of such Other Indebtedness by such Subsidiary Guarantor.
The Company shall cause each Restricted Subsidiary issuing a Subsidiary
Guarantee to (i) execute and deliver to the Trustee a supplemental indenture in
form reasonably satisfactory to the Trustee pursuant to which such Restricted
Subsidiary shall unconditionally guarantee all of the Company's obligations
under the Securities and this Indenture on the terms set forth in Article
Eleven and Article Twelve, (ii) execute and deliver a Subsidiary Guarantee
substantially in the form of Exhibit B hereto and (iii) deliver to the Trustee
an opinion of counsel that such supplemental indenture has been duly
authorized, executed and delivered by such Restricted Subsidiary and
constitutes a legal, valid, binding and enforceable obligation of such
Restricted Subsidiary (which opinion may be subject to customary assumptions
and qualifications). Thereafter, such Restricted Subsidiary shall (unless
released in accordance with the terms of this Indenture) be a Subsidiary
Guarantor for all purposes of this Indenture.

SECTION 4.20. Limitation on Conduct of Business of Capital.

Capital will not own any operating assets or other properties
or conduct any business other than to serve as an Issuer and an obligor on the
Securities.

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ARTICLE FIVE

MERGERS; SUCCESSOR CORPORATION

SECTION 5.01. Merger, Sale of Assets, etc.

(a) The Issuers will not consolidate with or merge with
or into (whether or not such Issuer is the Surviving Person) any other entity
and the Issuers will not and will not permit any of their respective Restricted
Subsidiaries to sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of such Issuer's properties and assets (determined, in
the case of the Company, on a consolidated basis for the Company and the
Restricted Subsidiaries) to any entity in a single transaction or series of
related transactions, unless: (i) either (x) such Issuer shall be the
Surviving Person or (y) the Surviving Person (if other than such Issuer) shall
be, in the case of Capital, a corporation or, in any other case, a corporation,
partnership, limited liability company, limited liability limited partnership
or trust organized and validly existing under the laws of the United States of
America or any State thereof or the District of Columbia, and shall, in any
such case, expressly assume by a supplemental indenture, the due and punctual
payment of the principal of, premium, if any, and interest on all the
Securities and the performance and observance of every covenant of this
Indenture to be performed or observed on the part of the Issuers; (ii)
immediately thereafter, no Default or Event of Default shall have occurred and
be continuing; (iii) immediately after giving effect to any such transaction
involving the Incurrence by the Company or any Restricted Subsidiary, directly
or indirectly, of additional Indebtedness (and treating any Indebtedness not
previously an obligation of the Company or any Restricted Subsidiary in
connection with or as a result of such transaction as having been Incurred at
the time of such transaction), the Surviving Person could Incur, on a pro forma
basis after giving effect to such transaction as if it had occurred at the
beginning of the latest fiscal quarter for which consolidated financial
statements of the Company are available, at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under the Debt to Operating
Cash Flow Ratio of the first paragraph of Section 4.04; and (iv) immediately
thereafter the Surviving Person shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of such Issuer immediately prior to
such transaction.

(b) Subject to the requirements of the immediately
preceding paragraph, in the event of a sale of all or substantially all of the
assets of any Subsidiary Guarantor or

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all of the Equity Interests of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise, then the Surviving Person of any such merger or
consolidation, or such Subsidiary Guarantor, if all of its Equity Interests are
sold, shall be released and relieved of any and all obligations under the
Subsidiary Guarantee of such Subsidiary Guarantor if (i) the Person or entity
surviving such merger or consolidation or acquiring the Equity Interests of
such Subsidiary Guarantor is not a Restricted Subsidiary, and (ii) the Net Cash
Proceeds from such sale are used after such sale in a manner that complies
with the provisions of Section 4.05. Except as provided in the preceding
sentence, no Subsidiary Guarantor shall consolidate with or merge with or into
another Person, whether or not such Person is affiliated with such Subsidiary
Guarantor and whether or not such Subsidiary Guarantor is the Surviving Person,
unless (i) the Surviving Person is a corporation, partnership, limited
liability company, limited liability limited partnership or trust organized or
existing under the laws of the United States, any State thereof or the District
of Columbia, (ii) the Surviving Person (if other than such Subsidiary
Guarantor) assumes all the obligations of such Subsidiary Guarantor under the
Securities and this Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee, (iii) at the time of and immediately
after such Disposition, no Default or Event of Default shall have occurred and
be continuing, and (iv) the Surviving Person will have Consolidated Net Worth
(immediately after giving pro forma effect to the Disposition) equal to or
greater than the Consolidated Net Worth of such Subsidiary Guarantor
immediately preceding the transaction; provided, however, that clause (iv) of
this paragraph shall not be a condition to a merger or consolidation of a
Subsidiary Guarantor if such merger or consolidation only involves the Company
and/or one or more Wholly Owned Restricted Subsidiaries.

SECTION 5.02. Successor Corporation Substituted.

In the event of any transaction (other than a lease) described
in and complying with the conditions listed in Section 5.01 in which an Issuer
or any Subsidiary Guarantor is not the Surviving Person and the Surviving
Person is to assume all the obligations of such Issuer or any such Subsidiary
Guarantor under the Securities and this Indenture pursuant to a supplemental
indenture, such Surviving Person shall succeed to, and be substituted for, and
may exercise every right and power of, such Issuer or such Subsidiary
Guarantor, as the case may be, and such Issuer or such Subsidiary Guarantor, as
the case may be, shall be discharged from its obligations under this Indenture,
the Securities or its Subsidiary Guarantee, as the case may be.

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ARTICLE SIX

DEFAULT AND REMEDIES

SECTION 6.01. Events of Default.

Each of the following shall be an "Event of Default":

(1) failure to pay interest on any Securities when the
same becomes due and payable and such Default continues for a period
of 30 days, whether or not such payment is prohibited by Article Eight
hereof;

(2) failure to pay the principal of any Securities when
the same becomes due and payable at maturity, upon redemption or
otherwise, whether or not such payment is prohibited by Article Eight
hereof;

(3) failure to perform or comply with any of the
provisions of Section 4.05, 4.14 or 5.01;

(4) failure to observe or perform any other covenant,
warranty or agreement contained in the Securities or this Indenture,
and the Default continues for the period and after the notice
specified in the last paragraph of this Section 6.01;

(5) a default or defaults under the terms of one or more
instruments evidencing or securing Indebtedness of the Company or any
Restricted Subsidiary having an outstanding principal amount of $10
million or more individually or in the aggregate that has resulted in
the acceleration of the payment of such Indebtedness or the failure to
pay principal when due at the stated maturity of any such
Indebtedness;

(6) there shall have been any final judgment or judgments
(not subject to appeal) against the Company or any Restricted
Subsidiary in an amount of $10 million or more (net of any amounts
covered by reputable and creditworthy insurance companies) which
remains undischarged or unstayed for a period of 60 days after the
date on which the right to appeal has expired;

(7) any holder or holders of at least $10 million in
aggregate principal amount of Indebtedness of the Company or any
Restricted Subsidiary, after a default under such Indebtedness, shall
notify the Trustee of the intended sale or disposition of any assets
of the Company or any

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Restricted Subsidiary with an aggregate Fair Market Value (as
determined in good faith by the Board of Directors of FV Inc.) of at
least $2 million that have been pledged to or for the benefit of such
holder or holders to secure such Indebtedness or shall commence
proceedings, or take any action (including by way of setoff), to
retain in satisfaction of such Indebtedness or to collect on, seize,
dispose of or apply in satisfaction of such Indebtedness, such assets
of the Company or any Restricted Subsidiary (including funds on
deposit or held pursuant to lock-box and other similar arrangements)
which continues for five Business Days after notice has been given to
the Company and the representative of such Indebtedness and
Indebtedness under the Senior Credit Facility;

(8) either of the Issuers or any Significant Restricted
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

(A) commences a voluntary case or proceeding,

(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding,

(D) makes a general assignment for the benefit of
its creditors;

(9) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:

(A) is for relief against either of the Issuers
or any Significant Restricted Subsidiary in an involuntary
case or proceeding,

(B) appoints a Custodian of either of the Issuers
or any Significant Restricted Subsidiary or for all or
substantially all of its property, or

and in each case the order or decree remains unstayed and in effect for 60
consecutive days; provided, however, that if the entry of such order or decree
is appealed and dismissed on appeal

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then the Event of Default hereunder by reason of the entry of such order or
decree shall be deemed to have been cured; or

(10) any Subsidiary Guarantee ceases to be in full force
and effect (other than in accordance with the terms of such Subsidiary
Guarantee and this Indenture) or is declared null and void and
unenforceable or found to be invalid or any Subsidiary Guarantor
denies its liability under its Subsidiary Guarantee (other than by
reason of a release of such Subsidiary Guarantor from its Subsidiary
Guarantee in accordance with the terms of this Indenture and such
Subsidiary Guarantee).

The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.

A Default under clause (4) is not an Event of Default until
the Trustee notifies the Issuers, or the Holders of at least 25% in aggregate
principal amount of the outstanding Securities notify the Issuers and the
Trustee, of the Default in writing and the Issuers do not cure the Default
within 30 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." Such notice shall be given by the Trustee if so requested by the
Holders of at least 25% in aggregate principal amount of the Securities then
outstanding. When a Default is cured, it ceases.

SECTION 6.02. Acceleration.

If an Event of Default with respect to the Securities (other
than an Event of Default specified in clause (8) or (9) of Section 6.01 with
respect to either of the Issuers) occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the outstanding
Securities by notice in writing to the Issuers (and to the Trustee if given by
the Holders) may declare the unpaid principal of and accrued and unpaid
interest to the date of acceleration on all the outstanding Securities to be
due and payable immediately and, upon any such declaration, such principal
amount and accrued and unpaid interest shall become immediately due and
payable; provided, however, that so long as the Senior Credit Facility shall be
in full force and effect, if an Event of Default shall have occurred and be
continuing (other than as specified in clause (8) or (9) of Section 6.01), the
Securities shall not

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become due and payable until the earlier to occur of (x) five Business Days
following delivery of a written notice of such acceleration of the Securities
to the agent under the Senior Credit Facility and (y) the acceleration of any
Indebtedness under the Senior Credit Facility.

If an Event of Default specified in clause (8) or (9) of
Section 6.01 with respect to either of the Issuers occurs all unpaid principal
of and accrued and unpaid interest on the outstanding Securities shall ipso
facto become immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder thereof.

After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Securities has been obtained, the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if all existing Events of Default (other than
the nonpayment of principal of and interest on the Securities which has become
due solely by virtue of such acceleration) have been cured or waived and if the
rescission would not conflict with any judgment or decree. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.

SECTION 6.03. Other Remedies.

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

The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy maturing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.

SECTION 6.04. Waiver of Past Default.

Subject to Sections 2.09, 6.07 and 10.02, prior to the
declaration of acceleration of the Securities, the Holders of not less than a
majority in aggregate principal amount of the then outstanding Securities, on
behalf of all the Holders, by written

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notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on
any Security as specified in clauses (1) and (2) of Section 6.01 or a Default
in respect of any term or provision of this Indenture that may not be amended
or modified without the consent of each Holder affected as provided in Section
10.02. The Issuers shall deliver to the Trustee an Officers' Certificate
stating that the requisite percentage of Holders have consented to such waiver
and attaching copies of such consents. In case of any such waiver, the
Issuers, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Securities, respectively. This
paragraph of this Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the
TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Securities, as permitted by the TIA.

Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.

SECTION 6.05. Control by Majority.

Subject to Section 2.09, the Holders of a majority in
principal amount of the then outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that
the Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction. In the event the
Trustee takes any action or follows any direction pursuant to this Indenture,
the Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against any loss or expense caused by taking such action or
following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.

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SECTION 6.06. Limitation on Suits.

A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:

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

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

(3) such Holder or Holders offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;

(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and

(5) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Securities (excluding
Affiliates of either of the Issuers) do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with
the request.

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

SECTION 6.07. Rights of Holders To Receive Payment.

Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder.

SECTION 6.08. Collection Suit by Trustee.

If an Event of Default in payment of interest or principal
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuers or any other obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest overdue
on principal and to the extent that payment of such interest is

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lawful, interest on overdue installments of interest, in each case at the rate
per annum borne by the Securities and such further amount as shall be
sufficient to cover the reasonable costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.

SECTION 6.09. Trustee May File Proofs of Claim.

The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Issuers (or
any other obligor upon the Securities), their creditors or its property and
shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.

SECTION 6.10. Priorities.

If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:

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

Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and

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Third: to the Issuers.

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

SECTION 6.11. Undertaking for Costs.

All parties to this Indenture agree, and each holder of any
Security by his acceptance thereof shall be deemed to have agreed, that in any
suit for the enforcement of any right or remedy under this Indenture or in any
suit against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant. This Section
6.11 shall not apply to a suit by the Trustee, a suit by a Holder or group of
Holders of more than 10% in aggregate principal amount of the outstanding
Securities, or to any suit instituted by any Holder for the enforcement or the
payment of the principal or interest on any Securities on or after the
respective due dates expressed in the Security.

ARTICLE SEVEN

TRUSTEE

SECTION 7.01. Duties of Trustee.

(a) If a Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

(b) Except during the continuance of a Default:

(1) The Trustee shall not be liable except for the
performance of such duties as are specifically set forth herein; and

(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions conforming to the

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requirements of this Indenture; however, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.

(c) The Trustee shall not be relieved from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

(1) This paragraph does not limit the effect of paragraph
(b) of this Section 7.01;

(2) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.

(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or to take or omit
to take any action under this Indenture or take any action at the request or
direction of Holders if it shall have reasonable grounds for believing that
repayment of such funds is not assured to it or it does not receive an
indemnity reasonably satisfactory to it against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.

(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this
Section 7.01.

(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree with the Issuers. Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.

SECTION 7.02. Rights of Trustee.

Subject to Section 7.01:

(a) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in
the document.

(b) The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on an Officers'
Certificate or Opinion of Counsel.

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(c) The Trustee may consult with counsel and the advice
or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.

(d) Any request or direction of the Issuers mentioned
herein shall be sufficiently evidenced by an Issuer Request or Issuer
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.

(e) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Securityholders pursuant to this
Indenture, unless such Securithyholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction.

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

SECTION 7.03. Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Issuers or
their Affiliates with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10 and 7.11.

SECTION 7.04. Trustee's Disclaimer.

The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Issuers' use of the proceeds
from the Securities, and it shall not be

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responsible for any statement of the Issuers in this Indenture or any document
issued in connection with the sale of Securities or any statement in the
Securities other than the Trustee's certificate of authentication.

SECTION 7.05. Notice of Defaults.

If a Default or an Event of Default occurs and is continuing
and the Trustee knows of such Defaults or Events of Default, the Trustee shall
mail to each Securityholder notice of the Default or Event of Default within 30
days after the occurrence thereof. Except in the case of a Default or an Event
of Default in payment of principal of or interest on any Security or a Default
or Event of Default in complying with Section 5.01, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of Securityholders.
This Section 7.05 shall be in lieu of the proviso to Section 315(b) of the TIA
and such proviso to Section 315(b) of the TIA is hereby expressly excluded
from this Indenture and the Securities, as permitted by the TIA.

SECTION 7.06. Reports by Trustee to Holders.

If required by TIA Section 313(a), within 60 days after each
June 15 beginning with the June 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a report dated as of such June 15
that complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b), (c) and (d).

A copy of each such report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange, if any, on
which the Securities are listed.

The Issuers shall promptly notify the Trustee in writing if
the Securities become listed on any stock exchange or of any delisting thereof.

SECTION 7.07. Compensation and Indemnity.

The Issuers shall pay to the Trustee from time to time such
compensation as the Issuers and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Issuers shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including reasonable fees, disbursements and expenses of its
agents and counsel) incurred or

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made by it in addition to the compensation for its services except any such
disbursements, expenses and advances as may be attributable to the Trustee's
negligence or bad faith. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel and any taxes or other expenses incurred by a trust created
pursuant to Section 9.01 hereof.

The Issuers shall indemnify the Trustee for, and hold it
harmless against any and all loss, damage, claims, liability or expense,
including taxes (other than franchise taxes imposed on the Trustee and taxes
based upon, measured by or determined by the income of the Trustee), arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent that such loss, damage,
claim, liability or expense is due to its own negligence or bad faith. The
Trustee shall notify the Issuers promptly of any claim asserted against the
Trustee for which it may seek indemnity. However, the failure by the Trustee
to so notify the Issuers promptly shall not relieve the Issuers of their
obligations hereunder except to the extent that the Issuers are materially
prejudiced thereby. The Issuers shall defend the claim and the Trustee shall
cooperate in the defense (and may employ its own counsel) at the Issuers'
expense; provided, however, that the Issuers' reimbursement obligation with
respect to counsel employed by the Trustee will be limited to the reasonable
fees of such counsel. The Issuers need not pay for any settlement made without
their written consent, which consent shall not be unreasonably withheld. The
Issuers need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee as a result of the violation of this
Indenture by the Trustee.

To secure the Issuers' payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Securities against all money
or property held or collected by the Trustee, in its capacity as Trustee,
except money or property held in trust to pay principal of or interest on
particular Securities.

When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(8) or (9) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute
expenses

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of administration under any Bankruptcy Law. The Issuers' obligations under
this Section 7.07 and any claim arising hereunder shall survive the resignation
or removal of any Trustee, the discharge of the Issuers' obligations pursuant
to Article Eight and any rejection or termination under any Bankruptcy Law.

SECTION 7.08. Replacement of Trustee.

The Trustee may resign at any time by so notifying the Issuers
in writing. The Holders of a majority in principal amount of the then
outstanding Securities may remove the Trustee by so notifying the Trustee and
the Issuers in writing and may appoint a successor Trustee with the Issuers'
consent. The Issuers may remove the Trustee if:

(1) the Trustee fails to comply with Section 7.10;

(2) the Trustee is adjudged a bankrupt or an insolvent
under any Bankruptcy Law;

(3) a custodian or other public officer takes charge of
the Trustee or its property; or

(4) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Issuers shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.

A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties
of the Trustee under this Indenture. A successor Trustee shall mail notice of
its succession to each Securityholder.

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If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuers or the Holders of at least 10% in principal amount of the then
outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.

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

SECTION 7.09. Successor Trustee by Merger, etc.

If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee, provided such corporation shall be otherwise qualified and
eligible under this Article Seven.

SECTION 7.10. Eligibility; Disqualification.

This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. If the
Trustee has or shall acquire any "conflicting interest" within the meaning of
TIA Section 310(b), the Trustee and the Issuers shall comply with the
provisions of TIA Section 310(b). If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect hereinbefore specified in
this Article Seven.

SECTION 7.11. Preferential Collection of Claims
Against Company.

The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.

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ARTICLE EIGHT

SUBORDINATION OF SECURITIES

SECTION 8.01. Securities Subordinated to Senior Indebtedness.

The Issuers covenant and agree, and the Trustee and each
Holder of the Securities by his acceptance thereof likewise covenant and agree,
that all Securities shall be issued subject to the provisions of this Article;
and each person holding any Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that all payments
of the principal of and interest on the Securities by the Issuers shall, to the
extent and in the manner set forth in this Article, be subordinated and junior
in right of payment to the prior payment in full of all amounts payable under
Senior Indebtedness.

SECTION 8.02. No Payment on Securities in
Certain Circumstances.

(a) No direct or indirect payment (including any payment
made to Securityholders under the terms of Indebtedness subordinated to the
Securities, but excluding any payment or distribution of Permitted Junior
Securities) by or on behalf of the Issuers of principal of or interest on the
Securities, whether pursuant to the terms of the Securities, upon acceleration
or otherwise, shall be made if, at the time of such payment, there exists a
default in the payment of all or any portion of the obligations on any
Designated Senior Indebtedness, whether at maturity, on account of mandatory
redemption or prepayment, acceleration or otherwise, and such default shall not
have been cured or waived or the benefits of this sentence waived by or on
behalf of the holders of such Designated Senior Indebtedness. In addition,
during the continuance of any non-payment default or non-payment event of
default with respect to any Designated Senior Indebtedness pursuant to which
the maturity thereof may be immediately accelerated, and upon receipt by the
Trustee of written notice (a "Payment Blockage Notice") from the holder or
holders of such Designated Senior Indebtedness or the trustee or agent acting
on behalf of such Designated Senior Indebtedness, then, unless and until such
default or event of default has been cured or waived or has ceased to exist or
such Designated Senior Indebtedness has been discharged or repaid in full, no
direct or indirect payment (including any payment made to Securityholders under
the terms of Indebtedness subordinated to the Securities, but excluding any
payment or distribution of Permitted Junior Securities) shall be made by or

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on behalf of the Issuers of principal of or interest on the Securities, except
from those funds held in trust for the benefit of the Holders of any Securities
pursuant to Article Nine, to such Holders, during a period (a "Payment Blockage
Period") commencing on the date of receipt of such notice by the Trustee and
ending 179 days thereafter.

Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Payment Blockage Period extend beyond 179
days from the date the Payment Blockage Notice in respect thereof was given and
(y) in no event shall a Payment Blockage Notice be effective for purposes of
this Section 8.02(a) unless and until 360 days shall have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice. Not more than
one Payment Blockage Period may be commenced with respect to the Securities
during any period of 360 consecutive days. No default or event of default that
existed or was continuing on the date of commencement of any Payment Blockage
Period with respect to the Designated Senior Indebtedness initiating such
Payment Blockage Period (to the extent the holder of Designated Senior
Indebtedness, or trustee or agent, giving notice commencing such Payment
Blockage Period had, or should have had, knowledge of such existing or
continuing default or event of default) may be, or be made, the basis for the
commencement of any other Payment Blockage Period by the holder or holders of
such Designated Senior Indebtedness or the trustee or agent acting on behalf of
such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default has been cured or
waived for a period of not less than 90 consecutive days.

(b) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by Section 8.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Designated
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Designated Senior
Indebtedness may have been issued, as their respective interests may appear,
but only to the extent that, upon notice from the Trustee to the holders of
Designated Senior Indebtedness that such prohibited payment has been made, the
holders of the Designated Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing of the amounts then
due and owing on the Designated Senior Indebtedness, if any, and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Designated Senior Indebtedness.

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SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.

(a) Upon any payment or distribution of assets or
securities of either of the Issuers of any kind or character, whether in cash,
property or securities (including any payment made to Securityholders under the
terms of Indebtedness subordinated to the Securities, but excluding any
payment or distribution of Permitted Junior Securities), upon any dissolution
or winding-up or total liquidation or reorganization of either of the Issuers,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all Senior Indebtedness shall first be paid in full in cash
before the Holders of the Securities or the Trustee on behalf of such Holders
shall be entitled to receive any payment by the Issuers of the principal of or
interest on the Securities, or any payment to acquire any of the Securities for
cash, property or securities, or any distribution with respect to the
Securities of any cash, property or securities. Before any payment may be made
by, or on behalf of, the Issuers of the principal of or interest on the
Securities upon any such dissolution or winding-up or liquidation or
reorganization, any payment or distribution of assets or securities of either
of the Issuers of any kind or character, whether in cash, property or
securities (excluding any payment or distribution of Permitted Junior
Securities), to which the Holders of the Securities or the Trustee on their
behalf would be entitled, but for the subordination provisions of this
Indenture, shall be made by the Issuers or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of the Senior Indebtedness (pro rata to
such holders on the basis of the respective amounts of Senior Indebtedness held
by such holders) or their representatives or to the trustee or trustees under
any indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, to the extent necessary to
pay all such Senior Indebtedness in full in cash after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.

(b) In the event that, notwithstanding the foregoing
provision prohibiting such payment or distribution, any payment or distribution
of assets or securities of either of the Issuers of any kind or character,
whether in cash, property or securities, shall be received by the Trustee or
any Holder of Securities at a time when such payment or distribution is
prohibited by Section 8.03(a) and before all obligations in respect of Senior
Indebtedness are paid in full, or payment provided for, such payment or
distribution shall be received and

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held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as
their respective interests may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Indebtedness.

The consolidation of either of the Issuers with, or the merger
of either of the Issuers with or into, another corporation or the liquidation
or dissolution of either of the Issuers following the conveyance or transfer of
its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided in Article Five shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article Five.

SECTION 8.04. Subrogation.

Upon the payment in full of all Senior Indebtedness, or
provision for payment, the Holders of the Securities shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Issuers made on such
Senior Indebtedness until the principal of and interest on the Securities shall
be paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property
or securities to which the Holders of the Securities or the Trustee on their
behalf would be entitled except for the provisions of this Article, and no
payment over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Securities or the Trustee on their behalf
shall, as between the Issuers, their creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment by
the Issuers to or on account of the Senior Indebtedness. It is understood that
the provisions of this Article are, and are intended, solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.

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If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article shall have been applied, pursuant to the provisions of this Article, to
the payment of all amounts payable under Senior Indebtedness, then and in such
case, the Holders of the Securities shall be entitled to receive from the
holders of such Senior Indebtedness any payments or distributions received by
such holders of Senior Indebtedness in excess of the amount required to make
payment in full, or provision for payment, of such Senior Indebtedness.

SECTION 8.05. Obligations of Issuers Unconditional.

Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Issuers and the Holders of the Securities, the obligation of the Issuers, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal of and interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Securities and creditors of
the Issuers other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Holder of any Security or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of the Senior Indebtedness in respect of cash, property
or securities of the Issuers received upon the exercise of any such remedy.

Without limiting the generality of the foregoing, nothing
contained in this Article shall restrict the right of the Trustee or the
Holders of Securities to take any action to declare the Securities to be due
and payable prior to their stated maturity pursuant to Section 6.01 or to
pursue any rights or remedies hereunder; provided, however, that all Senior
Indebtedness then due and payable shall first be paid in full before the
Holders of the Securities or the Trustee are entitled to receive any direct or
indirect payment from the Issuers of principal of or interest on the
Securities.

SECTION 8.06. Notice to Trustee.

The Issuers shall give prompt written notice to the Trustee of
any fact known to the Issuers which would prohibit the making of any payment to
or by the Trustee in respect of the Securities pursuant to the provisions of
this Article. The Trustee shall not be charged with knowledge of the existence
of

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any default or event of default with respect to any Senior Indebtedness or of
any other facts which would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing at
its Corporate Trust Office to that effect signed by an Officer of each of FV
Inc. and Capital, or by a holder of Senior Indebtedness or trustee or agent
therefor; and prior to the receipt of any such written notice, the Trustee
shall, subject to Article Seven, be entitled to assume that no such facts
exist; provided that if the Trustee shall not have received the notice provided
for in this Section at least two Business Days prior to the date upon which by
the terms of this Indenture any moneys shall become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Security), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from the Issuers and
to apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date. Nothing contained in this Section 8.06 shall limit the right
of the holders of Senior Indebtedness to recover payments as contemplated by
Section 8.03. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Senior Indebtedness (or a trustee on behalf of, or other representative of,
such holder) to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee or representative on behalf of any such
holder.

In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.

SECTION 8.07. Reliance on Judicial Order or
Certificate of Liquidating Agent.

Upon any payment or distribution of assets or securities
referred to in this Article, the Trustee and the Holders of the Securities
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in

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which bankruptcy, dissolution, winding-up, liquidation or reorganization
proceedings are pending, or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, delivered to the Trustee or to the Holders of the Securities for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Issuers, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article.

SECTION 8.08. Trustee's Relation to Senior Indebtedness.

The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.

With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness
(except as provided in Section 8.03(b)).

SECTION 8.09. Subordination Rights Not Impaired
by Acts or Omissions of the Issuers
or Holders of Senior Indebtedness.

No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Issuers or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Issuers with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with. The provisions of this Article are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness.

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SECTION 8.10. Securityholders Authorize Trustee To
Effectuate Subordination of Securities.

Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of either of the Issuers (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of either of the Issuers, the filing of a claim for the
unpaid balance of its or his Securities in the form required in those
proceedings.

SECTION 8.11. This Article Not To Prevent Events of Default.

The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article shall not
be construed as preventing the occurrence of an Event of Default specified in
clause (1) or (2) of Section 6.01.

SECTION 8.12. Trustee's Compensation Not Prejudiced.

Nothing in this Article shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.

SECTION 8.13. No Waiver of Subordination Provisions.

Without in any way limiting the generality of Section 8.09,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (a) change the
manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness and (d) exercise or refrain

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from exercising any rights against the Issuers and any other Person.

SECTION 8.14. Subordination Provisions Not Applicable
to Money Held in Trust for Securityholders;
Payments May Be Paid Prior to Dissolution.

All money and United States Government Obligations deposited
in trust with the Trustee pursuant to and in accordance with Article Nine shall
be for the sole benefit of the Holders and shall not be subject to this Article
Eight.

Nothing contained in this Article or elsewhere in this
Indenture shall prevent (i) the Issuers, except under the conditions described
in Section 8.02, from making payments of principal of and interest on the
Securities, or from depositing with the Trustee any moneys for such payments or
from effecting a termination of the Issuers' and the Subsidiary Guarantors'
obligations under the Securities and this Indenture as provided in Article
Nine, or (ii) the application by the Trustee of any moneys deposited with it
for the purpose of making such payments of principal of and interest on the
Securities, to the holders entitled thereto unless at least two Business Days
prior to the date upon which such payment becomes due and payable, the Trustee
shall have received the written notice provided for in Section 8.02(b) or in
Section 8.06. The Issuers shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of either of the
Issuers.

SECTION 8.15. Acceleration of Securities.

If payment of the Securities is accelerated because of an
Event of Default, the Issuers shall promptly notify holders of the Senior
Indebtedness of the acceleration.

ARTICLE NINE

DISCHARGE OF INDENTURE

SECTION 9.01. Termination of Issuers' Obligations.

Subject to the provisions of Article Eight, the Issuers may
terminate their and the Subsidiary Guarantors' substantive obligations in
respect of the Securities by delivering all outstanding Securities to the
Trustee for cancellation and paying all sums payable by them on account of
principal of and interest on all Securities or otherwise. In addition to the
foregoing, the Issuers may, provided that no Default or Event of Default has

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occurred and is continuing or would arise therefrom (or, with respect to a
Default or Event of Default specified in Section 6.01(8) or (9), any time on or
prior to the 91st calendar day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after such
91st day)) and provided that no default under any Senior Indebtedness would
result therefrom, terminate their and the Subsidiary Guarantors' substantive
obligations in respect of the Securities (except for their obligations to pay
the principal of and interest on the Securities and the Subsidiary Guarantors'
guarantee thereof) by (i) depositing with the Trustee, under the terms of an
irrevocable trust agreement, money or direct non-callable obligations of the
United States of America for the payment of which the full faith and credit of
the United States is pledged ("United States Government Obligations")
sufficient (without reinvestment) to pay all remaining indebtedness on the
Securities, (ii) delivering to the Trustee either an Opinion of Counsel or a
ruling directed to the Trustee from the Internal Revenue Service to the effect
that the Holders of the Securities will not recognize income, gain or loss for
federal income tax purposes solely as a result of such deposit and termination
of obligations, (iii) delivering to the Trustee an Opinion of Counsel to the
effect that the Issuers' exercise of their option under this paragraph will not
result in any of the Issuers, the Trustee or the trust created by the Issuers'
deposit of funds pursuant to this provision becoming or being deemed to be an
"investment company" under the Investment Company Act of 1940, as amended, and
(iv) delivering to the Trustee an Officers' Certificate and an Opinion of
Counsel each stating compliance with all conditions precedent provided for
herein. In addition, subject to the provisions of Article Eight with respect
to the creation of the defeasance trust provided for in the following clause
(i), the Issuers may, provided that no Default or Event of Default has
occurred and is continuing or would arise therefrom (or, with respect to a
Default or Event of Default specified in Section 6.01(8) or (9), any time on or
prior to the 91st calendar day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after such
91st day)) and provided that no default under any Senior Indebtedness would
result therefrom, terminate all of their and the Subsidiary Guarantors'
substantive obligations in respect of the Securities (including their
obligations to pay the principal of and interest on the Securities and the
Subsidiary Guarantors' guarantee thereof) by (i) depositing with the Trustee,
under the terms of an irrevocable trust agreement, money or United States
Government Obligations sufficient (without reinvestment) to pay all remaining
indebtedness on the Securities, (ii) delivering to the Trustee either a ruling

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directed to the Trustee from the Internal Revenue Service to the effect that
the Holders of the Securities will not recognize income, gain or loss for
federal income tax purposes solely as a result of such deposit and termination
of obligations or an Opinion of Counsel based upon such a ruling addressed to
the Trustee or a change in the applicable Federal tax law since the date of
this Indenture to such effect, (iii) delivering to the Trustee an Opinion of
Counsel to the effect that the Issuers' exercise of their option under this
paragraph will not result in any of the Issuers, the Trustee or the trust
created by the Issuers' deposit of funds pursuant to this provision becoming or
being deemed to be an "investment company" under the Investment Company Act of
1940, as amended, and (iv) delivering to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating compliance with all conditions precedent
provided for herein.

Notwithstanding the foregoing paragraph, the Issuers'
obligations in Sections 2.03, 2.05, 2.06, 2.07, 4.01 (but not with respect to
termination of substantive obligations pursuant to the third sentence of the
foregoing paragraph), 4.02, 7.07, 7.08, 9.03 and 9.04 shall survive until the
Securities are no longer outstanding. Thereafter the Issuers' obligations in
Sections 7.07, 9.03 and 9.04 shall survive.

After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Issuers' and the Subsidiary
Guarantors' obligations under the Securities and this Indenture except for
those surviving obligations specified above.

SECTION 9.02. Application of Trust Money.

The Trustee shall hold in trust money or United States
Government Obligations deposited with it pursuant to Section 9.01, and shall
apply the deposited money and the money from United States Government
Obligations in accordance with this Indenture solely to the payment of
principal of and interest on the Securities.

SECTION 9.03. Repayment to Issuers.

Subject to Sections 7.07 and 9.01, the Trustee shall promptly
pay to the Issuers upon written request any excess money held by it at any
time. The Trustee shall pay to the Issuers upon written request any money held
by it for the payment of principal or interest that remains unclaimed for two
years;

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provided, however, that the Trustee before being required to make any payment
may at the expense of the Issuers cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining
shall be repaid to the Issuers. After payment to the Issuers, Securityholders
entitled to money must look to the Issuers for payment as general creditors
unless an applicable abandoned property law designates another person and all
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.

SECTION 9.04. Reinstatement.

If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 9.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Issuers' and the Subsidiary Guarantors' obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Section 9.01 until such time as the Trustee is permitted
to apply all such money or United States Government Obligations in accordance
with Section 9.01; provided, however, that if the Issuers have made any payment
of interest on or principal of any Securities because of the reinstatement of
their obligations, the Issuers shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money or United States
Government Obligations held by the Trustee.

ARTICLE TEN

AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 10.01. Without Consent of Holders.

The Issuers and the Subsidiary Guarantors, when authorized by
a resolution of their respective Boards of Directors (which, in the case of the
Company, shall mean the Board of Directors of FV Inc. for so long as the
Company remains a partnership), and the Trustee may amend or supplement this
Indenture or the Securities without notice to or consent of any Securityholder:

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(i) to cure any ambiguity, defect or inconsistency;
provided, however, that such amendment or supplement does not
materially adversely affect the rights of any Holder under this
Indenture or the Securities;

(ii) to effect the assumption by a successor Person of all
obligations of either of the Issuers under the Securities and this
Indenture in connection with any transaction complying with Article
Five of this Indenture;

(iii) to provide for uncertificated Securities in addition
to or in place of certificated Securities;

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

(v) to make any change that would provide any additional
benefit or rights to the Holders;

(vi) to make any other change that does not materially
adversely affect the rights of any Holder under this Indenture or the
Securities;

(vii) to evidence the succession of another Person to any
Subsidiary Guarantor and the assumption by any such successor of the
covenants of such Subsidiary Guarantor herein and in the Subsidiary
Guarantee;

(viii) to add to the covenants of the Issuers or the
Subsidiary Guarantors for the benefit of the Holders, or to surrender
any right or power herein conferred upon the Issuers or any Subsidiary
Guarantor;

(ix) to secure the Securities pursuant to the requirements
of Section 4.18 or otherwise; or

(x) to reflect the release of a Subsidiary Guarantor from
its obligations with respect to its Subsidiary Guarantee in accordance
with the provisions of Section 11.03 and to add a Guarantor pursuant
to the requirements of Sections 4.19 and 11.07;

provided, however, that the Issuers have delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.

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SECTION 10.02. With Consent of Holders.

Subject to Section 6.07, the Issuers and the Subsidiary
Guarantors, when authorized by a resolution of their respective Boards of
Directors, and the Trustee may amend or supplement this Indenture or the
Securities with the written consent of the Holders of at least a majority in
aggregate principal amount of the then outstanding Securities. Subject to
Section 6.07, the Holders of a majority in aggregate principal amount of the
then outstanding Securities, on behalf of all Holders, may waive compliance by
the Issuers or any Subsidiary Guarantor with any provision of this Indenture or
the Securities. However, without the consent of each Securityholder affected,
an amendment, supplement or waiver, including a waiver pursuant to Section
6.04, may not:

(1) change the Stated Maturity of the principal of or any
installment of interest on any Security or alter the optional
redemption or repurchase provisions of any Security or this Indenture
in a manner adverse to the holders of the Securities;

(2) reduce the principal amount of any Security;

(3) reduce the rate or extend the time for payment of
interest on any Security;

(4) change the place or currency of payment of the
principal of or interest on any Security;

(5) modify any provisions of Section 6.04 (other than to
add sections of this Indenture or the Securities subject thereto) or
6.07 or this Section 10.02 (other than to add sections of this
Indenture or the Securities which may not be amended, supplemented or
waived without the consent of each Securityholder affected);

(6) reduce the percentage of the principal amount of
outstanding Securities necessary for amendment to or waiver of
compliance with any provision of this Indenture or the Securities or
for waiver of any Default;

(7) waive a default in the payment of the principal of,
interest on, or redemption payment with respect to, any Security
(except a recision of acceleration of the Securities by the Holders as
provided in Section 6.02 and a waiver of the payment of default that
resulted from such acceleration);

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(8) modify the ranking or priority of the Securities or
the Subsidiary Guarantee of any Subsidiary Guarantor, or modify the
definition of Senior Indebtedness or Guarantor Senior Indebtedness, or
amend or modify any of the provisions of Article Eight or Article
Twelve in any manner adverse to the Holders;

(9) release any Subsidiary Guarantor from any of its
obligations under its Guarantee or this Indenture otherwise than in
accordance with this Indenture; or

(10) modify the provisions relating to any Offer to
Purchase required pursuant to Section 4.05 or 4.14 in a manner
materially adverse to the Holders.

An amendment under this Section 10.02 may not make any change
under Article Eight, Article Nine, Article Eleven or Article Twelve hereof that
adversely affects in any material respect the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any representative thereof authorized to give a consent) shall have
consented to such change.

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

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

SECTION 10.03. Compliance with Trust Indenture Act.

Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.

SECTION 10.04. Effect of Consents.

Until an amendment or waiver becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent
Holder of that Security or portion of that Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is
not made on any Security.

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

After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (10) of Section 10.02. In that case the amendment,
supplement or waiver shall bind each Holder of a Security who has consented to
it and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.

SECTION 10.05. Notation on or Exchange of Securities.

If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Issuers or the Trustee so determines, the Issuers in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment, supplement
or waiver.

SECTION 10.06. Trustee To Sign Amendments, etc.

The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver constitutes the legal, valid and binding obligation of the Issuers
and the Subsidiary Guarantors, enforceable in accordance with its terms
(subject to customary exceptions). The Trustee may, but shall not (except to
the extent required in the case of a supplemental indenture entered into
pursuant to Section 10.01(iv)) be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.

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ARTICLE ELEVEN

SUBSIDIARY GUARANTEE

SECTION 11.01. Unconditional Guarantee.

Each Subsidiary Guarantor hereby unconditionally, jointly and
severally, guarantees to each Holder of a Security authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns that: the
principal of and interest on the Securities will be promptly paid in full when
due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal and interest
on any overdue interest on the Securities and all other obligations of the
Company to the Holders or the Trustee hereunder or under the Securities will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; subject, however, to the limitations set forth in Section 11.04. Each
Subsidiary Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder of the Securities with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. Each
Subsidiary Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenants that the Subsidiary Guarantee
will not be discharged except by complete performance of the obligations
contained in the Securities, this Indenture, and this Subsidiary Guarantee. If
any Holder or the Trustee is required by any court or otherwise to return to
the Company, any Subsidiary Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Company or any Subsidiary
Guarantor, any amount paid by the Company or any Subsidiary Guarantor to the
Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Subsidiary
Guarantor further agrees that, as between each Subsidiary Guarantor, on the one
hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article Six
for the purpose of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in

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respect of the obligations guaranteed hereby, and (y) in the event of any
acceleration of such obligations as provided in Article Six, with such
obligations (whether or not due and payable) shall forth become due and payable
by each Subsidiary Guarantor for the purpose of this Subsidiary Guarantee.

SECTION 11.02. Severability.

In case any provision of this Subsidiary Guarantee shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 11.03. Release of a Guarantor.

(a) In the event that each holder of Other Indebtedness
which resulted in the creation of a Subsidiary Guarantee unconditionally
releases a Subsidiary Guarantor of all of its obligations under its guarantee
of such Other Indebtedness pursuant to a written agreement in form and
substance satisfactory to the Trustee (other than a release resulting from
payment under such guarantee) such Subsidiary Guarantor shall be automatically
and unconditionally released from all obligations under its Subsidiary
Guarantee.

(b) Additionally, if the Securities are defeased in
accordance with the terms of this Indenture, or if all or substantially all of
the assets of any Subsidiary Guarantor or all of the Equity Interests of any
Subsidiary Guarantor is sold (including by issuance or otherwise) by the
Company or any of its Subsidiaries in a transaction constituting an Asset Sale
and if (x) the Net Cash Proceeds from such Asset Sale are used in accordance
with Section 4.05 or (y) the Company delivers to the Trustee an Officers'
Certificate covenanting that the Net Cash Proceeds from such Asset Sale shall
be used in accordance with Section 4.05 and within the time limits specified by
such Section 4.05, then such Subsidiary Guarantor (in the event of a sale or
other disposition of all of the Equity Interests of such Subsidiary Guarantor)
or the corporation acquiring such assets (in the event of a sale or other
disposition of all or substantially all of the assets of such Subsidiary
Guarantor), shall be deemed released from all obligations under this Article
Eleven without any further action required on the part of the Trustee or any
Holder.

(c) The Trustee shall, at the sole cost and expense of
the Company, upon receipt of a request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with

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this Section and, with respect to clause (b) of this Section 11.03, upon
receipt at the reasonable request of the Trustee of an Opinion of Counsel that
the provisions of this Section 11.03 have been complied with, deliver an
appropriate instrument evidencing such release. Any Subsidiary Guarantor not
so released remains liable for the full amount of principal of and interest on
the Securities and the other obligations of the Company hereunder as provided
in this Article Eleven.

SECTION 11.04. Limitation of Subsidiary Guarantor's Liability.

Each Subsidiary Guarantor, and by its acceptance hereof each
Holder and the Trustee, hereby confirms that it is the intention of all such
parties that the guarantee by such Subsidiary Guarantor pursuant to its
Subsidiary Guarantee not constitute a fraudulent transfer or conveyance for
purposes of title 11 of the United States Code, as amended, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
U.S. Federal or state or other applicable law. To effectuate the foregoing
intention, the Holders and such Subsidiary Guarantor hereby irrevocably agree
that the obligations of such Subsidiary Guarantor under the Subsidiary
Guarantee shall be limited to the maximum amount as will, after giving effect
to all other contingent and fixed liabilities of such Subsidiary Guarantor and
after giving effect to any collections from or payments made by or on behalf of
any other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to Section
11.05, result in the obligations of such Subsidiary Guarantor under the
Subsidiary Guarantee not constituting such fraudulent transfer or conveyance.

SECTION 11.05. Contribution.

In order to provide for just and equitable contribution among
the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in
the event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under the Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from all other Subsidiary Guarantors in a
pro rata amount, based on the net assets of each Subsidiary Guarantor
(including the Funding Guarantor), determined in accordance with GAAP, subject
to Section 11.04, for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Subsidiary Guarantor's obligations with respect to the
Subsidiary Guarantee.

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SECTION 11.06. Execution of Subsidiary Guarantee.

To further evidence their Subsidiary Guarantee to the Holders,
the Subsidiary Guarantors hereby agree to execute the Subsidiary Guarantee in
substantially the form set forth in Exhibit B to be endorsed on each Security
authenticated and delivered by the Trustee after such Subsidiary Guarantee is
executed. Each Guarantor hereby agrees that its Subsidiary Guarantee set forth
in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on any particular Security a notation of such Subsidiary
Guarantee. Each such Subsidiary Guarantee shall be signed on behalf of each
Subsidiary Guarantor by its Chairman of the Board of Directors, its President
or one of its Vice Presidents prior to the authentication of the Security on
which it is endorsed, and the delivery of such Security by the Trustee, after
the authentication thereof hereunder, shall constitute due delivery of such
Subsidiary Guarantee on behalf of such Subsidiary Guarantor. Such signature
upon the Subsidiary Guarantee may be the manual or facsimile signature of such
officer and may be imprinted or otherwise reproduced on the Subsidiary
Guarantee, and in case such officer who shall have signed the Subsidiary
Guarantee shall cease to be such officer before the Security on which such
Subsidiary Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Company, such Security nevertheless may be
authenticated and delivered or disposed of as though the Person who signed the
Subsidiary Guarantee had not ceased to be such officer of the Subsidiary
Guarantor.

SECTION 11.07. Additional Subsidiary Guarantors.

Any Restricted Subsidiary of the Company which is required
pursuant to Section 4.19 to become a Subsidiary Guarantor shall execute and
deliver to the Trustee (a) a supplemental indenture in form and substance
reasonably satisfactory to the Trustee which subjects such Restricted
Subsidiary to the provisions of this Indenture as a Subsidiary Guarantor, and
(b) an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized and executed by such Restricted Subsidiary and constitutes
the legal, valid, binding and enforceable obligation of such Restricted
Subsidiary (subject to such customary exceptions concerning fraudulent
conveyance laws, creditors' rights and equitable principles).

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SECTION 11.08. Subordination of Subrogation and Other Rights.

Each Subsidiary Guarantor hereby agrees that any claim against
the Company that arises from the payment, performance or enforcement of such
Subsidiary Guarantor's obligations under its Subsidiary Guarantee or this
Indenture, including, without limitation, any right of subrogation, shall be
subject and subordinate to, and no payment with respect to any such claim of
such Subsidiary Guarantor shall be made before, the payment in full in cash of
all outstanding Securities in accordance with the provisions provided therefor
in this Indenture.

ARTICLE TWELVE

SUBORDINATION OF GUARANTEE

SECTION 12.01. Guarantee Obligations Subordinated
to Subsidiary Guarantor Senior Debt.

Each Subsidiary Guarantor covenants and agrees, and the
Trustee and each Holder of the Securities by his acceptance thereof likewise
covenant and agree, that the Subsidiary Guarantees shall be issued subject to
the provisions of this Article; and each person holding any Security, whether
upon original issue or upon transfer, assignment or exchange thereof, accepts
and agrees that all payments of the principal of and interest on the Securities
pursuant to the Subsidiary Guarantee made by or on behalf of any Subsidiary
Guarantor shall, to the extent and in the manner set forth in this Article, be
subordinated and junior in right of payment to the prior payment in full of all
amounts payable under Guarantor Senior Indebtedness of such Subsidiary
Guarantor.

SECTION 12.02. No Payment on Subsidiary Guarantees
in Certain Circumstances.

<PAGE> 100
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waived by or on behalf of the holders of such Designated Guarantor Senior
Indebtedness. In addition, during the continuance of any non-payment default
or event of default with respect to any Designated Guarantor Senior
Indebtedness pursuant to which the maturity thereof may be immediately
accelerated, and upon receipt by the Trustee of written notice (the "Guarantor
Payment Blockage Notice") from the holder or holders of such Designated
Guarantor Senior Indebtedness or the trustee or agent acting on behalf of such
Designated Guarantor Senior Indebtedness, then, unless and until such default
or event of default has been cured or waived or has ceased to exist or such
Designated Guarantor Senior Indebtedness has been discharged or paid in full,
no direct or indirect payment (including any payment made to Securityholders
under the terms of Indebtedness subordinated to the Securities, but excluding
any payment or distribution of Permitted Junior Securities) shall be made by or
on behalf of such Subsidiary Guarantor of principal or interest on the
Securities, except from those funds held in trust for the benefit of the
Holders of any Securities pursuant to Article Nine, to such Holders, during a
period (a "Guarantor Blockage Period") commencing on the date of receipt of
such notice by the Trustee and ending 179 days thereafter.

Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Guarantor Blockage Period extend beyond 179
days from the date the Guarantor Payment Blockage Notice was given and (y) in
no event shall a Guarantor Blockage Notice be effective for purposes of this
Section 12.02(a) unless and until 360 days shall have elapsed since the
effectiveness of the immediately prior Guarantor Payment Blockage Notice. Not
more than one Guarantor Blockage Period may be commenced with respect to any
Subsidiary Guarantor during any period of 360 consecutive days. No default or
event of default that existed or was continuing on the date of commencement of
any other Guarantor Blockage Period with respect to the Designated Guarantor
Senior Indebtedness initiating such Guarantor Payment Blockage Period (to the
extent the holder of Designated Guarantor Senior Indebtedness, or trustee or
agent, giving notice commencing such Guarantor Payment Blockage Period had, or
should have had, knowledge of such existing or continuing default or event of
default) may be, or be made, the basis for the commencement of any other
Guarantor Blockage Period by the holder or holders of such Designated Guarantor
Senior Indebtedness or the trustee or agent acting on behalf of such Designated
Guarantor Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default has been cured or
waived for a period of not less than 90 consecutive days.

<PAGE> 101
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(b) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by Section 12.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of such
Designated Guarantor Senior Indebtedness or their respective representatives,
or to the trustee or trustees under any indenture pursuant to which any of such
Designated Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that, upon notice from
the Trustee to the holders of such Designated Guarantor Senior Indebtedness
that such prohibited payment has been made, the holders of such Designated
Guarantor Senior Indebtedness (or their representative or representatives or a
trustee) notify the Trustee in writing of the amounts then due and owing on
such Designated Guarantor Senior Indebtedness, if any, and only the amounts
specified in such notice to the Trustee shall be paid to the holders of such
Designated Guarantor Senior Indebtedness.

SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.

(a) Upon any payment or distribution of assets or
securities of any Subsidiary Guarantor of any kind or character, whether in
cash, property or securities excluding any payment or distribution of Permitted
Junior Securities, upon any dissolution or winding-up or total liquidation or
reorganization of such Subsidiary Guarantor, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all amounts
due or to become due with respect to all Guarantor Senior Indebtedness of such
Subsidiary Guarantor shall first be paid in full in cash, or payment provided
for, before the Holders of the Securities or the Trustee on behalf of such
Holders shall be entitled to receive any payment by such Subsidiary Guarantor
of the principal of or interest on the Securities pursuant to such Subsidiary
Guarantor's Subsidiary Guarantee, or any payment to acquire any of the
Securities for cash, property or securities, or any distribution with respect
to the Securities of any cash, property or securities. Before any payment may
be made by, or on behalf of, any Subsidiary Guarantor of the principal of or
interest on the Securities upon any such dissolution or winding-up or
liquidation or reorganization, any payment or distribution of assets or
securities of such Subsidiary Guarantor of any kind or character, whether in
cash, property or securities, to which the Holders of the Securities or the
Trustee on their behalf would be entitled, but for the subordination provisions
of this Indenture, shall be made by such Subsidiary Guarantor or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, directly to the

<PAGE> 102
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holders of the Guarantor Senior Indebtedness of such Subsidiary Guarantor (pro
rata to such holders on the basis of the respective amounts of such Guarantor
Senior Indebtedness held by such holders) or their representatives or to the
trustee or trustees under any indenture pursuant to which any of such Guarantor
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all such Guarantor Senior Indebtedness
in full in cash after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.

(b) In the event that, notwithstanding the foregoing
provision prohibiting such payment or distribution, any payment or distribution
of assets or securities of any Subsidiary Guarantor of any kind or character,
whether in cash, property or securities, shall be received by the Trustee or
any Holder of Securities at a time when such payment or distribution is
prohibited by Section 12.03(a) and before all obligations in respect of the
Guarantor Senior Indebtedness of such Subsidiary Guarantor are paid in full, or
payment provided for, such payment or distribution shall be received and held
in trust for the benefit of, and shall be paid over or delivered to, the
holders of such Guarantor Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of such Guarantor Senior Indebtedness held by
such holders) or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear,
for application to the payment of such Guarantor Senior Indebtedness remaining
unpaid until all such Guarantor Senior Indebtedness has been paid in full after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of such Guarantor Senior Indebtedness.

The consolidation of any Subsidiary Guarantor with, or the
merger of any Subsidiary Guarantor with or into, another corporation or the
liquidation or dissolution of any Subsidiary Guarantor following the conveyance
or transfer of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided in Article Five
shall not be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article Five.

<PAGE> 103
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SECTION 12.04. Subrogation.

Upon the payment in full of all Guarantor Senior Indebtedness
of a Subsidiary Guarantor, or provision for payment, the Holders of the
Securities shall be subrogated to the rights of the holders of such Guarantor
Senior Indebtedness to receive payments or distributions of cash, property or
securities of such Subsidiary Guarantor made on such Guarantor Senior
Indebtedness until the principal of and interest on the Securities shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Guarantor Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee on
their behalf would be entitled except for the provisions of this Article, and
no payment over pursuant to the provisions of this Article to the holders of
such Guarantor Senior Indebtedness by Holders of the Securities or the Trustee
on their behalf shall, as between such Subsidiary Guarantor, its creditors
other than holders of such Guarantor Senior Indebtedness, and the Holders of
the Securities, be deemed to be a payment by such Subsidiary Guarantor to or on
account of such Guarantor Senior Indebtedness. It is understood that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Guarantor Senior Indebtedness of each Subsidiary Guarantor,
on the other hand.

If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article shall have been applied, pursuant to the provisions of this Article, to
the payment of all amounts payable under Guarantor Senior Indebtedness, then
and in such case, the Holders of the Securities shall be entitled to receive
from the holders of such Guarantor Senior Indebtedness any payments or
distributions received by such holders of Guarantor Senior Indebtedness in
excess of the amount required to make payment in full, or provision for
payment, of such Guarantor Senior Indebtedness.

SECTION 12.05. Obligations of Subsidiary Guarantors
Unconditional.

Nothing contained in this Article or elsewhere in this
Indenture or in the Securities or the Subsidiary Guarantee is intended to or
shall impair, as among the Subsidiary Guarantors and the Holders of the
Securities, the obligation of each Subsidiary Guarantor, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest on

<PAGE> 104
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the Securities as and when the same shall become due and payable in accordance
with the terms of the Subsidiary Guarantee, or is intended to or shall affect
the relative rights of the Holders of the Securities and creditors of any
Subsidiary Guarantor other than the holders of Guarantor Senior Indebtedness,
nor shall anything herein or therein prevent the Holder of any Security or the
Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article of the holders of Guarantor Senior Indebtedness in
respect of cash, property or securities of any Subsidiary Guarantor received
upon the exercise of any such remedy.

Without limiting the generality of the foregoing, nothing
contained in this Article shall restrict the right of the Trustee or the
Holders of Securities to take any action to declare the Securities to be due
and payable prior to their stated maturity pursuant to Section 6.01 or to
pursue any rights or remedies hereunder; provided, however, that all Guarantor
Senior Indebtedness of any Subsidiary Guarantor then due and payable shall
first be paid in full before the Holders of the Securities or the Trustee are
entitled to receive any direct or indirect payment from such Subsidiary
Guarantor of principal of or interest on the Securities pursuant to such
Subsidiary Guarantor's Subsidiary Guarantee.

SECTION 12.06. Notice to Trustee.

Each Subsidiary Guarantor shall give prompt written notice to
the Trustee of any fact known to such Subsidiary Guarantor which would prohibit
the making of any payment to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article. The Trustee shall not be charged
with knowledge of the existence of any default or event of default with respect
to any Guarantor Senior Indebtedness or of any other facts which would prohibit
the making of any payment to or by the Trustee unless and until the Trustee
shall have received notice in writing at its Corporate Trust Office to that
effect signed by an Officer of such Subsidiary Guarantor, or by a holder of
Guarantor Senior Indebtedness or trustee or agent therefor; and prior to the
receipt of any such written notice, the Trustee shall, subject to Article
Seven, be entitled to assume that no such facts exist; provided that if the
Trustee shall not have received the notice provided for in this Section at
least two Business Days prior to the date upon which by the terms of this
Indenture any moneys shall become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Security), then,
regardless of

<PAGE> 105
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anything herein to the contrary, the Trustee shall have full power and
authority to receive any moneys from any Subsidiary Guarantor and to apply the
same to the purpose for which they were received, and shall not be affected by
any notice to the contrary which may be received by it on or after such prior
date. Nothing contained in this Section 12.06 shall limit the right of the
holders of Guarantor Senior Indebtedness to recover payments as contemplated by
Section 12.03. The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself or itself to be a holder of
any Guarantor Senior Indebtedness (or a trustee on behalf of, or other
representative of, such holder) to establish that such notice has been given by
a holder of such Guarantor Senior Indebtedness or a trustee or representative
on behalf of any such holder.

In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.

SECTION 12.07. Reliance on Judicial Order or
Certificate of Liquidating Agent.

Upon any payment or distribution of assets or securities of a
Subsidiary Guarantor referred to in this Article, the Trustee and the Holders
of the Securities shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee
or to the Holders of the Securities for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of Guarantor
Senior Indebtedness of such Subsidiary Guarantor and other indebtedness of such
Subsidiary Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article.

<PAGE> 106
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SECTION 12.08. Trustee's Relation to Guarantor
Senior Indebtedness.

The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article with respect to any Guarantor Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder.

With respect to the holders of Guarantor Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of
Guarantor Senior Indebtedness (except as provided in Section 12.03(b)).

SECTION 12.09. Subordination Rights Not Impaired by
Acts or Omissions of the Subsidiary
Guarantors or Holders of Guarantor Senior
Indebtedness.

No right of any present or future holders of any Guarantor
Senior Indebtedness to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Subsidiary Guarantor or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by any Subsidiary Guarantor
with the terms of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with. The provisions of this
Article are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Guarantor Senior Indebtedness.

SECTION 12.10. Securityholders Authorize Trustee To
Effectuate Subordination of Guarantee.

<PAGE> 107
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(whether in bankruptcy, insolvency, receivership, reorganization or similar
proceedings or upon an assignment for the benefit of creditors or otherwise)
tending towards liquidation of the business and assets of such Subsidiary
Guarantor, the filing of a claim for the unpaid balance of its or his
Securities in the form required in those proceedings.

SECTION 12.11. This Article Not To Prevent Events of Default.

SECTION 12.12. Trustee's Compensation Not Prejudiced.

Nothing in this Article shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.

SECTION 12.13. No Waiver of Subsidiary Guarantee
Subordination Provisions.

Without in any way limiting the generality of Section 12.09,
the holders of Guarantor Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Securities to the holders of
Guarantor Senior Indebtedness, do any one or more of the following: (a) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, Guarantor Senior Indebtedness or any instrument evidencing the
same or any agreement under which Guarantor Senior Indebtedness is outstanding
or secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Guarantor Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Guarantor Senior
Indebtedness and (d) exercise or refrain from exercising any rights against any
Subsidiary Guarantor and any other Person.

SECTION 12.14. Payments May Be Paid Prior to Dissolution.

Nothing contained in this Article or elsewhere in this
Indenture shall prevent (i) a Subsidiary Guarantor, except under the conditions
described in Section 12.02, from making payments of principal of and interest
on the Securities, or from

<PAGE> 108
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depositing with the Trustee any moneys for such payments, or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Securities, to the
holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have
received the written notice provided for in Section 12.02(b) or in Section
12.06. A Subsidiary Guarantor shall give prompt written notice to the Trustee
of any dissolution, winding-up, liquidation or reorganization of such
Subsidiary Guarantor.

ARTICLE THIRTEEN

MISCELLANEOUS

SECTION 13.01. Trust Indenture Act Controls.

This Indenture is subject to the provisions of the TIA that
are required to be a part of this Indenture, and shall, to the extent
applicable, be governed by such provisions. If any provision of this Indenture
modifies any TIA provision that may be so modified, such TIA provision shall be
deemed to apply to this Indenture as so modified. If any provision of this
Indenture excludes any TIA provision that may be so excluded, such TIA
provision shall be excluded from this Indenture.

The provisions of TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.

SECTION 13.02. Notices.

Any notice or communication required or permitted to be given
under this Indenture shall be sufficiently given if in writing and delivered in
person, by facsimile and confirmed by overnight courier, or mailed by
first-class mail addressed as follows:

if to the Issuers:

FrontierVision Operating Partners, L.P.
1777 South Harrison Street, Suite P-2000
Denver, Colorado 80210

Attention: Mr. John S. Koo, Senior Vice
President and Chief Financial Officer

<PAGE> 109
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Facsimile: (303) 757-6115
Telephone: (303) 757-1588

with a copy to:

Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Washington, D.C. 20036

Attention: Leonard J. Baxt, Esq.

Facsimile: (202) 776-2222
Telephone: (202) 776-2000

if to the Trustee:

Colorado National Bank
950 17th Street, Suite 2410
Denver, Colorado 80202

Attention: Facsimile: Telephone:

The Issuers or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.

Any notice or communication mailed, first class, postage
prepaid, to a Securityholder, including any notice delivered in connection with
TIA Section 310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section
315(b), shall be mailed to him at his address as set forth on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed. To the extent required by the TIA, any notice or
communication shall also be mailed to any Person described in TIA Section
313(c).

Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. Except for a notice to the Trustee, which is deemed given
only when received, if a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.

SECTION 13.03. Communications by Holders with Other Holders.

Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights

<PAGE> 110
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under this Indenture or the Securities. The Issuers, the Trustee, the
Registrar and any other person shall have the protection of TIA Section 312(c).

SECTION 13.04. Certificate and Opinion as to Conditions
Precedent.

Upon any request or application by the Issuers to the Trustee
to take or refrain from taking any action under this Indenture, the Issuers
shall furnish to the Trustee at the request of the Trustee:

(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and

(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.

SECTION 13.05. Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

(1) a statement that the person making such certificate
or opinion has read such covenant or condition;

(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

(3) a statement that, in the opinion of such person, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and

(4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.

<PAGE> 111
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SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.

The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.

SECTION 13.07. Governing Law.

The laws of the State of New York shall govern this Indenture,
the Securities and the Subsidiary Guarantee without regard to principles of
conflicts of law.

SECTION 13.08. No Recourse Against Others.

A director, officer, employee or stockholder, as such, of the
Issuers or any Subsidiary Guarantor shall not have any liability for any
obligations of the Issuers or any Subsidiary Guarantor under the Securities,
any Subsidiary Guarantee or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such liability.

SECTION 13.09. Successors.

All agreements of the Issuers in this Indenture and the
Securities shall bind their successors. All agreements of each Subsidiary
Guarantor in this Indenture and Securities shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.

SECTION 13.10. Counterpart Originals.

The parties may sign any number of counterparts of this
Indenture. Each signed counterpart shall be an original, but all of them
together represent the same agreement.

SECTION 13.11. Severability.

In case any provision in this Indenture, in the Securities or
in the Subsidiary Guarantee shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and a Holder shall have no claim
therefor against any party hereto.

<PAGE> 112
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SECTION 13.12. No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret another indenture,
loan or debt agreement of either of the Issuers or a Subsidiary of either of
Issuers. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

SECTION 13.13. Legal Holidays.

If a payment date occurs on a day that is not a Business Day
at a place of payment, payment may be made at that place on the next succeeding
day that is a Business Day, and no interest shall accrue for the intervening
period.

[Signature Pages Follow]

<PAGE> 113
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SIGNATURES

IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.

FRONTIERVISION OPERATING
PARTNERS, L.P.

By: FrontierVision Partners, L.P.,
its general partner

By: FVP GP, L.P.,
its general partner

By: FrontierVision Inc.,
its general partner

By:
----------------------------------
Name:
Title:

FRONTIERVISION CAPITAL CORPORATION

By:
----------------------------------
Name:
Title:

COLORADO NATIONAL BANK, as Trustee

By:
----------------------------------
Name:
Title:

<PAGE> 114
[FORM OF NOTE]
(Face of Note)

EXHIBIT A

CUSIP No.
-----------

FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION

% SENIOR SUBORDINATED NOTE DUE 2006
No. $

FrontierVision Operating Partners, L.P. and FrontierVision
Capital Corporation hereby jointly and severally promise to pay to

or registered assigns the principal sum of

Dollars on the Maturity Date of ________, 2006.

Interest Payment Dates: _______ and ______________, commencing
________________, 1997

Record Dates: _________ and _____________

IN WITNESS WHEREOF, FRONTIERVISION OPERATING PARTNERS, L.P.
and FRONTIERVISION CAPITAL CORPORATION have caused this instrument to be signed
manually or by facsimile by each of their respective duly authorized officers.

FRONTIERVISION OPERATING
PARTNERS, L.P.

By: FrontierVision Partners, L.P.,
its general partner

By: FVP G.P., L.P.,
its general partner

By: FrontierVision Inc.,
its general partner

By:
------------------------------
Title:

<PAGE> 115
A-2

Dated: By:
-------------------------------
Title:

FRONTIERVISION CAPITAL CORPORATION

By:
-------------------------------
Title:

Dated:
By:
-------------------------------
Title:

Certificate of Authentication:

This is one of the % Senior Subordinated Notes due 2006
referred to in the within-mentioned Indenture.

COLORADO NATIONAL BANK, as Trustee

By Date:
--------------------
Authorized Signatory

<PAGE> 116
A-3

(REVERSE OF SECURITY)

FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION

% Senior Subordinated Note due 2006

1. Interest.

FrontierVision Operating Partners, L.P., a Delaware limited
partnership (the "Company"), and FrontierVision Capital Corporation, a Delaware
corporation ("Capital" and together with the Company, the "Issuers"), jointly
and severally promise to pay interest at the rate of _____% per annum on the
principal amount of this Security semiannually commencing on _________, 1997,
until the principal hereof is paid or made available for payment. Interest on
the Securities will accrue from and including the most recent date to which
interest has been paid or, if no interest has been paid, from and including
October [ ], 1996, through but excluding the date on which interest is paid.
If an Interest Payment Date falls on a day that is not a Business Day, the
interest payment to be made on such Interest Payment Date will be made on the
next succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.

2. Method of Payment.

The interest payable on the Securities, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security is registered at
the close of business on the regular record date, which shall be the ______ or
___________ (whether or not a Business Day) next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly provided for,
and any interest payable on such defaulted interest (to the extent lawful),
will forthwith cease to be payable to the Holder on such regular record date
and shall be paid to the person in whose name this Security is registered at
the close of business on a special record date for the payment of such
defaulted interest to be fixed by the Issuers, notice of which shall be given
to Holders not less than 15 days prior to such special record date. Payment of
the principal of and interest on this Security will be made at the agency of
the Issuers maintained for that purpose in New York, New York and at any

<PAGE> 117
A-4

other office or agency maintained by the Issuers for such purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Issuers payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the
Security register.

3. Paying Agent and Registrar.

Initially, Colorado National Bank (the "Trustee") will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders of Securities. The Issuers or
any of their Subsidiaries may act as Registrar, co-Registrar or, except in
certain circumstances specified in the Indenture, Paying Agent.

4. Indenture.

This Security is one of a duly authorized issue of Securities
of the Issuers, designated as their ____% Senior Subordinated Notes due 2006
(the "Securities"), limited in aggregate principal amount to $200,000,000
(except for Securities issued in substitution for destroyed, lost or stolen
Securities) issuable under an indenture dated as of October [ ], 1996 (the
"Indenture"), among the Issuers and the Trustee. The terms of the Securities
include those stated in the Indenture and those required to be made part of the
Indenture by the Trust Indenture Act of 1939 (the "Act") (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the Indenture and the date the
Indenture is qualified under the Act. The Securities are subject to all such
terms, and Holders of Securities are referred to the Indenture and the Act for
a statement of them. Each Securityholder, by accepting a Security, agrees to
be bound by all of the terms and provisions of the Indenture, as the same may
be amended from time to time.

The Securities are subordinated in right of payment to all
Senior Indebtedness of the Issuers to the extent and in the manner provided in
the Indenture. Each Holder of a Security, by accepting a Security, agrees to
such subordination, authorizes the Trustee to give effect to such subordination
and appoints the Trustee as attorney-in-fact for such purpose.

Capitalized terms contained in this Security to the extent not
defined herein shall have the meanings assigned to them in the Indenture.

<PAGE> 118
A-5

5. Optional Redemption.

(a) The Securities are not redeemable prior to ______,
2001, except as provided in clause (b) below of this paragraph 5. On and after
such date, the Securities may be redeemed at any time, in whole or in part, at
the option of the Issuers, at redemption prices (expressed as percentages of
the principal amount) set forth below, if redeemed during the 12-month period
beginning __________ of the year indicated below, in each case together with
interest accrued and unpaid to but excluding the date fixed for redemption:

<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . %
2002 . . . . . . . . . . . . . . . . . . . . . . . . . .
2003 . . . . . . . . . . . . . . . . . . . . . . . . . .
2004 and thereafter . . . . . . . . . . . . . . . . . . 100.0000
</TABLE>

(b) At any time prior to _______, 1999, the Issuers may
redeem up to 35% of the principal amount of the Securities with the net cash
proceeds received by the Company from one or more Public Equity Offerings or
Strategic Equity Investments, at a redemption price (expressed as a percentage
of the principal amount) of _______% of the principal amount thereof, plus
accrued and unpaid interest to the date fixed for redemption; provided,
however, that at least 65% in aggregate principal amount of the Securities
originally issued remains outstanding immediately after any such redemption
(excluding any Securities owned by the Issuers or any of their Affiliates).
Notice of redemption pursuant to this paragraph must be mailed to Holders of
Securities not later than 60 days following consummation of such Public Equity
Offering.

6. Notice of Redemption.

Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part. On and after the
redemption date, interest ceases to accrue on those Securities or portion of
them called for redemption.

<PAGE> 119
A-6

7. Purchase upon Occurrence of a
Change of Control.

Within 30 days of the occurrence of a Change of Control, the
Company will offer to purchase the Securities, in whole and not in part, at a
purchase price equal to 101% of the principal amount thereof plus any accrued
and unpaid interest thereon.

8. Denominations; Transfer; Exchange.

The Securities are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption.

9. Persons Deemed Owners.

The registered Holder of a Security may be treated as the
owner of it for all purposes.

10. Unclaimed Funds.

If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee or Paying Agent will repay the funds to
the Issuers at their request. After such repayment Holders of Securities
entitled to such funds must look to the Issuers for payment unless an abandoned
property law designates another person.

11. Discharge Prior to Redemption or Maturity.

The Indenture will be discharged and cancelled except for
certain Sections thereof, subject to the terms of the Indenture, upon the
payment of all the Securities or upon the irrevocable deposit with the Trustee
of funds or United States Government Obligations sufficient for such payment or
redemption.

12. Amendment; Supplement; Waiver.

Subject to certain exceptions, the Indenture or the Securities
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the outstanding Securities, and any past
default or compliance with

<PAGE> 120
A-7

any provision may be waived with the consent of the Holders of a majority in
principal amount of the outstanding Securities. Without notice to or the
consent of any Holder, the Issuers, any Subsidiary Guarantors and the Trustee
may amend or supplement the Indenture or the Securities to cure any ambiguity,
defect or inconsistency, or to make any change that does not adversely affect
the rights of any Holder of Securities.

13. Restrictive Covenants.

The Securities are general unsecured senior subordinated
obligations of the Issuers limited to the aggregate principal amount of
$200,000,000. The Indenture restricts, among other things, the ability of the
Company or any of its Restricted Subsidiaries to permit any Liens to be imposed
on their assets, to make certain payments and investments, limits the
Indebtedness which the Company and its Restricted Subsidiaries may incur and
limits the terms on which the Company may engage in Asset Sales. The Company
is also obligated under certain circumstances to make an offer to purchase
Securities with the net cash proceeds of certain Asset Sales. The Issuers must
report quarterly to the Trustee on compliance with certain covenants in the
Indenture.

14. Successor Corporation.

Pursuant to the Indenture, the ability of the Issuers to
consolidate with, merge with or into or transfer their assets to another person
is conditioned upon certain requirements, including certain financial
requirements applicable to the surviving Person.

15. Defaults and Remedies.

If an Event of Default shall occur and be continuing, the
principal of all of the outstanding Securities, plus all accrued and unpaid
interest, if any, to the date the Securities become due and payable, may be
declared due and payable in the manner and with the effect provided in the
Indenture.

16. Trustee Dealings with Issuers.

The Trustee in its individual or any other capacity, may
become the owner or pledgee of Securities and make loans to, accept deposits
from, and perform services for either of the Issuers or their Affiliates, and
may otherwise deal with the Issuers or their Affiliates, as if it were not
Trustee.

<PAGE> 121
A-8

17. No Recourse Against Others.

A director, officer, employee, incorporator, limited or
general partner or stockholder, as such, of either of the Issuers or any
Subsidiary Guarantor shall not have any liability for any obligations of the
Issuers or any Subsidiary Guarantor under the Securities, the Subsidiary
Guarantee or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.

18. Authentication.

This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.

19. Abbreviations.

Customary abbreviations may be used in the name of
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).

20. CUSIP Numbers.

Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Securities and have directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.

21. Governing Law.

The laws of the State of New York shall govern the Indenture,
this Security and the Guarantee without regard to principles of conflicts of
law.

<PAGE> 122
A-9

22. Guarantees.

This Security may after the date hereof be entitled to certain
Subsidiary Guarantees made for the benefit of the Holders. Reference is hereby
made to the Indenture for the terms of any Subsidiary Guarantee (including any
terms of subordination of such Subsidiary Guarantee that may apply).

The Issuers will furnish to any Holder of record of Securities
upon written request and without charge a copy of the Indenture.

<PAGE> 123
A-10

ASSIGNMENT FORM

If you the Holder want to assign this Security, fill in the
form below and have your signature guaranteed:

I or we assign and transfer this Security to:

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

- -------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)

and irrevocably appoint ,
-------------------------------------------------------
agent to transfer this Security on the books of the Issuers. The agent may
substitute another to act for him.

Dated: Signed:
------------------ ----------------------------
(Sign exactly as
name appears on the
other side of this
Security)

Signature Guarantee:
---------------------------------------------------------

<PAGE> 124
A-11

OPTION OF HOLDER TO ELECT PURCHASE

If you the Holder want to elect to have this Security purchased by the Company,
check the box: / /

If you want to elect to have only part of this Security purchased by the
Company, state the amount: $___________

Dated: Your signature:
----------- ----------------------------
(Sign exactly as
name appears on the
other side of this
Security)

Signature Guarantee:
---------------------------------------------------------

<PAGE> 125
EXHIBIT B

[FORM OF SUBSIDIARY GUARANTEE]

SENIOR SUBORDINATED GUARANTEE

The Subsidiary Guarantors (as defined in the Indenture
referred to in the Security upon which this notation is endorsed) hereby,
jointly and severally, unconditionally guarantee on a senior subordinated basis
(such guarantee by each Subsidiary Guarantor being referred to herein as the
"Subsidiary Guarantee") the due and punctual payment of the principal of,
premium, if any, and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal, premium and interest, if any, on the Securities, and the due
and punctual performance of all other obligations of the Issuers to the Holders
or the Trustee, all in accordance with the terms set forth in Article Eleven of
the Indenture.

The obligations of each Subsidiary Guarantor to the Holders of
Securities and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth, and are expressly subordinated and subject
in right of payment to the prior payment in full of all Guarantor Senior
Indebtedness of such Subsidiary Guarantor, to the extent and in the manner
provided, in Article Twelve of the Indenture, and reference is hereby made to
such Indenture for the precise terms of the Subsidiary Guarantee therein made.

This Subsidiary Guarantee shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of law.

This Subsidiary Guarantee is subject to release upon the terms
set forth in the Indenture.

[Subsidiary Guarantor]

By:
------------------------
Name:
Title:

<PAGE> 126
EXHIBIT C

FORM OF LEGEND FOR BOOK-ENTRY SECURITIES

Any Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.

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

<PAGE> 127
SCHEDULE OF EXCHANGES

The following exchanges of a part of this Global Security for
Physical Securities have been made:

<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of Amount of of this Global authorized
decrease in increase Security officer of
Principal Amount in Principal following such Trustee or
Date of of this Global Amount of this decrease Securities
Exchange Security Global Security (or increase) Custodian
- -------- ---------------- --------------- ---------------- ------------
<S> <C> <C> <C> <C>
</TABLE>

<PAGE> 1
EXHIBIT 5

[DOW, LOHNES & ALBERTSON, PLLC
LETTERHEAD]

September 11, 1996

FrontierVision Operating Partners, L.P.
FrontierVision Capital Corporation
1777 South Harrison Street
Suite P-200
Denver, CO 90210-3925

Ladies and Gentlemen:

We refer to the Registration Statement (the "Registration
Statement") on Form S-1 (File No. 333-09535), filed by FrontierVision Operating
Partners, L.P. ("FVOP") and FrontierVision Capital Corporation ("Capital" and,
together with FVOP, the "Issuers"), with the Securities and Exchange Commission
(the "Commission"), for the purpose of registering under the Securities Act of
1933, as amended (the "Securities Act"), the Issuers' Senior Subordinated Notes
due 2006 (the "Notes"), to be offered to the public pursuant to an Underwriting
Agreement (the "Underwriting Agreement") by and among the Issuers and J.P.
Morgan Securities Inc., Chase Securities Inc., CIBC Wood Gundy Securities Corp.
and First Union Capital Markets Corp. as underwriters. Capitalized terms used
herein that are not otherwise defined herein shall have the same meaning as in
the Underwriting Agreement.

In connection with the foregoing registration, we have acted
as special counsel for the Issuers, and have examined originals or copies,
certified or otherwise identified to our satisfaction, of all such records of
the Issuers and all such agreements, certificates of public officials,
certificates of officers or representatives of the Issuers and others, and such
other documents, certificates and corporate or other records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein. In our
examination we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the originals
of such latter documents. As to any facts relevant to the opinion expressed
herein (including, without limitation, representations as to the consents of
senior lenders to be obtained by FVOP at or prior to consummation of the
offering of the Notes), we have relied upon statements and representations of
officers and other representatives of the Issuers and others (all of which we
assume to be true, complete and accurate in all respects).
<PAGE> 2
FrontierVision Operating Partners, L.P.
FrontierVision Capital Corporation
September , 1996
Page 2

We are members of the Bar of the District of Columbia and do
not purport to be experts on, or generally familiar with, or certified to
express legal conclusions based upon, the laws of any other jurisdiction, other
than the Delaware General Corporation Law, the Delaware Revised Uniform Limited
Partnership Act and the laws of the United States to the extent applicable
hereto. Accordingly, as to matters of law set forth below, our opinion is
limited to matters of law under the laws of the District of Columbia, the laws
of the United States to the extent applicable hereto, the Delaware General
Corporation Law and the Delaware Revised Uniform Limited Partnership Act, and
we express no opinion as to conflicts of law rules, or the laws of any states
or jurisdictions other than as specified above.

Based upon the foregoing and subject to the other
qualifications stated herein, we are of the opinion that the Notes have been
duly authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the underwriters
pursuant to the Underwriting Agreement, will be binding obligations of the
Issuers enforceable against the Issuers in accordance with their terms, except
to the extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium (whether general or specific),
fraudulent conveyance or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights and remedies generally, (b) the
remedy of specific performance and injunctive and other forms of equitable
relief may be limited by equitable defenses and the discretion of the court
before which any proceeding therefor may be brought (whether such proceeding is
at law or in equity or in a bankruptcy proceeding) or limited by other
equitable principles of general applicability, and (c) the waiver as to usury,
stay or extension laws may be unenforceable.

We hereby consent to the filing of this opinion as Exhibit 5
to the Registration Statement and any abbrieviated registration statements
relating thereto that may be filed to register additional securities identical
to those covered by the Registration Statement (including a registration
statement filed pursuant to Rule 462(b) under the Securities Act), and to the
reference to this firm under the caption "Legal Matters" contained in the
prospectus filed as a part thereof. In giving
<PAGE> 3
FrontierVision Operating Partners, L.P.
FrontierVision Capital Corporation
September , 1996
Page 3

such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act.

Very truly yours,

DOW, LOHNES & ALBERTSON, PLLC

By:
-------------------
Edward J. O'Connell
Member

<PAGE> 1
EXHIBIT 10.4

ASSET ACQUISITION AGREEMENT
(JULY 27, 1995 AUCTION SALE)

THIS ASSET ACQUISITION AGREEMENT (July 27, 1996 Auction Sale)
("Agreement") is made and entered into as of July 27, 1996 by and between
STEPHEN S. GRAY in his capacity as Receiver ("Seller") of LONGFELLOW CABLE
COMPANY, INC. ("Longfellow"), CARRABASSETT ELECTRONICS and CARRABASSETT CABLE
COMPANY, INC. ("Carrabassett") and the undersigned Purchaser (the "Purchaser").

RECITALS:

A. Carrabassett and Longfellow have for a number of
years owned and operated cable television systems located in and around the
following towns and cities in the State of Maine: Anson, Avon, Belgrade,
Carrabassett Valley, Coplin, Embden, Eustis, Kingfield, Mount Vernon, North New
Portland, New Vineyard, Norridgewock, Phillips, Readfield, Rome, Smithfield,
Solon, Strong and Wyman (said cities, towns and villages are referred to
collectively herein as the "Municipalities" and all areas served by such cable
systems are herein referred to as the "Service Area").

B. The cable television systems, and all assets,
equipment, vehicles, machinery, real estate, contracts, leases, franchises and
licenses relating to or used or useful in the operation thereof are hereinafter
referred to as the "Systems".

C. Seller has been duly appointed by the Franklin County
(Maine) Superior Court as the receiver of the assets of Carrabassett and
Longfellow in the civil proceeding commenced by Fleet Bank of Maine and State
Street Bank and Trust ("Banks") Civ. No . CV-93-20 ("Receivership Proceeding").

D. Seller has obtained from the Superior Court
authorization to sell the assets pursuant to a final, non-appealable order
("Sale Order") dated June 7,1994 and pursuant to the Sale Order conducted an
auction sale on July 27,1995 ("Auction Sale").

E. Purchaser was selected as the winning bidder at the
Auction Sale.

F. Subject to the terms hereof, Seller desires to sell
and Purchaser desires to purchase the Systems, including the real estate
interests, franchises, licenses, permits, equipment, certain contract rights,
and other real and personal property of the Seller (but excluding cash, stock
and certain books and records) used or useful in connection with the Systems.

<PAGE> 2

NOW, THEREFORE, in consideration of the premises and of the mutual
agreements hereinafter set forth, the parties hereto hereby agree as follows:

1. SALE AND PURCHASE OF ASSETS

1.1 Sale of Assets. Subject to the conditions
hereinafter set forth (including Section 1.2), Seller shall sell, transfer,
convey, assign and deliver to Purchaser and Purchaser shall purchase and
acquire from Seller on the Closing Date (as hereinafter defined) by quitclaim
deed and bill of sale, without representation or warranty, all of Seller's
right, title and interest, if any, in the following:

(a) the cable television franchises, permits,
licenses and agreements issued to Seller by the Municipalities (the
"Franchises") including the Franchises listed on Schedule 1. 1 (a) attached
hereto;

(b) all of Seller's right, title and interest in
real property, whether owned, leased or otherwise used in connection with the
operation of the Systems, described on Schedule 1.1(b) attached hereto; and any
real property interests relating to the Systems that may be acquired by Seller
after the date of this Agreement and on or before the Closing Date, which shall
be added to Schedule 1.l(b) at or prior to Closing;

(c) all equipment and other tangible personal
property relating to or used in the Systems, including, without limitation,
receivers, amplifiers, test equipment, descramblers, satellite dishes and
mounts, modulators, headend equipment, towers, taps, traps, pedestals,
conduits, converters, test equipment, tools and inventory, spare parts,
materials and supplies, billing computer and printer, billing forms, and
addressable converters and related computers, including, without limitation,
such property listed on Schedule 1. l(c) attached hereto, the Inventory set
forth on Schedule 1.1(c) attached hereto, and all such tangible personal
property relating to the Systems that may be acquired after the date of this
Agreement and on or before the Closing Date (excluding, however, any property
owned by Pine State Management Company);

(d) the licenses and permits issued by the
Federal Communications Commission ("FCC"), if any, with respect to the Systems,
including any earth station, CARS, and business radio licenses, all as listed
on Schedule 1.1(d) attached hereto, subject in each case to the consent of the
FCC (the "FCC Licenses");

(e) intangible rights of any kind utilized in
connection with or generated by the operation of the Systems, including, but
not limited to, accounts receivable subscriber and customer lists, subscription
agreements, patents, copyrights, trade names and service names owned or used by
the Systems or the Seller in connection with the operation of the Systems;

- 2 -
<PAGE> 3
(f) all strand maps, as-built maps, plans,
diagrams, blueprints, schematics, promotional materials, including without
limitation, art work, maps, plates, negatives and other graphics, and marketing
material developed for the Systems, files, and books and records relating to
the Systems, and personnel files for employees of the Systems;

(g) all copier leases, vehicle lease, licenses,
railroad and highway crossing agreements, property access agreements, private
cable agreements and permits and other personal property leases and agreements
(the "Contracts and Leases") listed on Schedule 1. l(g) hereof;

(h) the motor vehicles described on Schedule
1.1(h) attached hereto (the "Vehicles"); and

(i) subject to Section 2.10, the pole attachment
agreements ("PA Agreements") listed on Schedule 1.1(i), provided, however,
Seller shall have no obligation other than as provided in Section 2.10 to
obtain any consent to the transfer of the PA Agreements.

Collectively, all of the foregoing are hereinafter referred to as the
"Transferred Assets".

1.2 Excluded Assets. Excluded from the assets being
conveyed pursuant to this Agreement: cash, corporate stock, the minute books
and stock books and similar corporate records of the Seller (the aforesaid
being hereinafter referred to as the "Excluded Assets ").

1.3 Transfer and Access to Records. Seller may retain
such financial books and records as are necessary to administer the
Receivership Estate, such period of retention to be not more than the later of
(a) 90 days after Closing Date or (b) upon resolution of disputes under Section
1.8. During that period, Purchaser shall have access to and Seller shall allow
Purchaser to make copies of such records. Upon expiration of such retention
period, Seller shall transfer such records to Purchaser. Seller shall have
access to, and Purchaser shall allow Seller to make copies of, financial books
and records transferred hereunder for the period of six years following the
Closing Date. Purchaser shall give Seller 30 days' advance written notice
prior to destroying any such records.

1.4 As is, Where is. The sale and transfer hereunder
shall be AS IS, WHERE IS without representation of warranty of any kind or
nature whatsoever including nature, extent, existence, quantity or quality of
any of the Transferred Assets. SELLER DISCLAIMS ALL WARRANTIES OF ANY KIND OR
NATURE, AND SELLER DISCLAIMS ALL WARRANTIES EXPRESSED, IMPLIED OR STATUTORY
INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. Seller shall have no obligation to obtain consents of any
person or entity including any governmental unit with respect to the transfer
of

- 3 -
<PAGE> 4
any or all of the Transferred Assets except as provided in Section 5.6 hereof
or to cure or pay arrearages owed with respect to any contract, lease, permit
or license (provided however this provision shall not impair Purchaser's rights
under the closing conditions contained herein at Section 2, or impair
Purchaser's rights to acquire the Transferred Assets free and clear of all
liens and encumbrances except those set forth on Schedule 1.1(h) and as
provided in Section 2.2).

1.5 Liabilities. Unless otherwise agreed by Purchaser in
writing, Purchaser shall not assume or be liable or responsible for any
liabilities or obligations of Seller except (i) all obligations and liabilities
accruing after the Closing Date under the Franchises, (ii) all obligations and
liabilities under real estate easements and leases described on Schedule 1.1(b)
accruing after the Closing Date, (iii) all obligations and liabilities accruing
after the Closing Date with respect to the FCC Licenses listed on Schedule 1.
l(d) that are assigned to the Purchaser, (iv) all obligations to subscribers of
the Systems as of the Closing Date to provide cable television service after
the Closing Date, (v) all Seller's liability to subscribers of the Systems as
of the Closing Date for subscriber deposits, (vi) all obligations and
liabilities under the Contracts and Leases listed on Schedule 1.1(g) accruing
after the Closing Date, and (vii) all obligations and liabilities under the PA
Agreements listed on Schedule 1.1(i) accruing after the Closing Date and as
provided in Section 2.10. Nothing in this Agreement shall be construed to
constitute an assumption by Purchaser of any liabilities or obligations of
Seller not specifically enumerated in this Section 1.5.

1.6 Purchase Price and Allocation. The total purchase
price for the Transferred Assets, (the "Purchase Price"), shall be as follows:

(a) The Purchase Price shall be $6,150,000

The Purchase Price shall be payable as set forth in Section 1.7. The Purchase
Price shall be allocated among the Transferred Assets in such manner and in
such amounts as Purchaser shall reasonably determine.

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<PAGE> 5
1.7 Manner of Payment of Purchase Price. The Purchase
Price shall be paid as follows:

(a) The Purchaser has previously paid the sum of
Two Hundred Fifty Thousand Dollars ($250,000) into escrow with the Seller prior
to the Auction Sale (together with the earnings thereon from time to time, the
"Deposit"). The Seller shall hold the Deposit in a separate account determined
and invested as provided in the Deposit Escrow Agreement in the form attached
hereto as Exhibit 1.7(a), and at the Closing the Deposit shall be released from
escrow and applied toward the Purchase Price. In the event this Agreement is
terminated pursuant to Section 7 hereof; then the Deposit together with the
earnings thereon shall be returned to the Purchaser, within two (2) business
days after notice to the Deposit Escrow Agent. In all other events, Seller
shall keep and retain the Deposit as liquidated damages, which shall be
Seller's sole remedy at law and in equity for any breach of this Agreement by
the Purchaser.

(b) On the Closing Date the remainder of the
Purchase Price, after giving effect to the payment of the Deposit under Section
1.7(a) and subject to any adjustments pursuant to Section 1.8 hereof, shall be
paid by wire transfer of funds or certified check to the account of Seller.

(c) From the Purchase Price which includes the
$250,000 deposit as defined in Section 1.7(a), the Seller shall deposit $50,000
(together with earnings thereon from time to time, the "Holdback Amount") in
escrow pursuant to Section 1.8 hereof.

1.8 Adjustments to Purchase Price and Claims Against
Holdback Amount.

(a) There shall be prorated as of the Closing
Date in favor of Seller or Purchaser, as the case may be, franchise fees,
copyright fees, pole rental charges, bonds, utility charges, municipal
assessments, property taxes, rents, sales and service charges, programming
costs, copyright royalty payments and all other operating expenses of the
Systems; provided that no credit shall be given Seller for a prepaid expense
with respect to which Purchaser will not receive a commensurate economic
benefit, and nothing contained herein is intended to create any obligation on
the part of Seller to pay arrearages on any claim, except as otherwise provided
herein. No adjustment shall be owed by Seller with respect to obligations and
liabilities to the extent assumed by Purchaser under Section 1.5.

(b) Notwithstanding subsection (a) or other
provisions of this Agreement, Seller shall have no obligations to Purchaser to
pay any amount owing with respect to any Programming or Pole Attachment
Agreements notwithstanding that Purchaser may be assigned such agreements.

(c) The Purchase Price shall be reduced by the
amount of any payments received by Seller prior to Closing for service to be
provided after the Closing Date.

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<PAGE> 6
(d) In the event Seller is owed an amount as a
result of prorations, adjustments or amounts payable set forth in Sections 1.6,
1.8(a) and (c), 2.3(b), 2.10(a), 2.10(c) or 5.2(c), the Purchase Price shall be
increased accordingly ("Underpayment"). In the event Purchaser is owed an
amount as a result of these prorations, adjustments or amounts payable, or the
Transferred Assets are not transferred free and clear of all liens and
encumbrances other than those specified in Section 2.2, the Purchase Price
shall be reduced accordingly ("Overpayment") as provided in this Section 1.8.
The Holdback Amount shall be held in escrow pursuant to the Holdback Escrow
Agreement attached hereto as Exhibit 1.8(d). A good faith estimate of the
prorations, adjustments and amounts payable, including a computation of Bona
Fide Subscribers (the "Initial Settlement Statement") will be prepared by
Seller and delivered to Purchaser at least two (2) business days prior to the
Closing Date and, absent manifest error, shall be the basis for preliminary
adjustments and prorations on the Closing Date. Ten (10) days after the
Closing Date, Seller shall deliver to Purchaser in writing, a final settlement
statement (the "Final Settlement Statement") showing any changes from the
Initial Settlement Statement, which shall contain reasonable detail of the
nature extent of any changes from the Initial Settlement Statement, and
Purchaser shall within thirty (30) days after the receipt thereof notify Seller
of any disagreement with the proposed Final Settlement Statement stating with
particularity the dollar amount in dispute with respect to any such proration,
adjustment or amounts payable and the basis for the dispute ("Purchaser Notice
of Claim"). The date Purchaser timely notifies Seller shall be referred to
herein as the "Purchaser Notice Date". Thereafter, Purchaser and Seller shall
negotiate in good faith to resolve any timely raised disagreement regarding the
adjustments in the Final Settlement Statement. If the parties are unable to
resolve such disagreement within thirty (30) days after the Purchaser Notice
Date, then 45 days after the Purchaser Notice Date the matter shall be
submitted for determination to a "Big Six" accounting firm office in Boston,
Massachusetts reasonably acceptable to Purchaser and Seller, whose
determination shall be binding on Purchaser and Seller. Each party shall bear
the fees and expenses of its own representatives, including its independent
accountants, if any, and the fees and expenses of any firm selected to resolve
any disagreement between the parties shall be borne equally by Purchaser and
Seller. If within 45 days after the Purchaser Notice Date, Purchaser and
Seller cannot agree on an accounting firm (or a method for selecting an
accounting firm), or the selected accounting firm is unwilling or unable to
serve, then any aggrieved party shall within 60 days after the Purchaser Notice
Date refer the matter to binding commercial arbitration before a single
arbitrator in Boston, MA to be conducted under the rules of the American
Arbitration Association.

(e) If, within six months following the Closing
Date, Purchaser notifies Seller in reasonable detail of the existence of any
lien, claim, encumbrance or other circumstance which would cause the condition
set forth in Section 2.2 not to have been satisfied as of the Closing
("Purchase Notice of Claim"), then in such event the Purchase Price shall be
adjusted downward by the total amount of all damages, losses, costs and
expenses (including reasonable attorneys' fees) reasonably and in good faith
incurred or suffered by Purchaser as a result of such circumstance. The
arbitration provisions of Section 1.8(d) shall govern all adjustments

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<PAGE> 7
under this Section 1.8(e). Seller shall be given prompt notice of any claim
against Purchaser that may give rise to a claim under this section.

(f) Purchaser shall also have a claim against the
Holdback Amount if, within six months following the Closing Date, Purchaser
notifies Seller in reasonable detail of a claim under and as provided in
Section 2.10(c) ("Purchase Notice of Claim"). The arbitration provisions of
Section 1.8(d) shall govern all disputes under this Section 1.8(f).

(g) Within two (2) business days following a
final determination (whether as a result of Purchaser failing to give timely
written notice of its disagreement with the Final Settlement Statement or a
claim under Section 1.8(e) or (f), a resolution by Purchaser and Seller of any
disagreement, a determination by an accounting firm selected to resolve any
disagreement between the parties, a party failing to timely refer a dispute to
arbitration, or an arbitrator's decision), Purchaser shall pay to Seller the
amount of any Underpayment or the Seller shall pay to Purchaser the amount of
any Overpayment, as appropriate. The amount of any Overpayment shall be paid
to Purchaser by Seller first from the Holdback Amount and then if and only if
such claim arises under Section 1.6, from assets remaining in the Receivership
Estate. If no unsatisfied or unresolved claims under Section 2.10(c) or for a
downward adjustment to the Purchase Price shall have been asserted by the
Purchaser, within six months following the Closing Date, the Holdback Amount
may be released from escrow to Seller at the expiration of such six month
period.

(h) Purchaser shall not oppose, contest or
interfere with any proposed or actual distribution of assets of the
Receivership Estate other than (i) the Holdback Amount, (ii) to reserve for
claims timely raised under Section 1.6, and (iii) to reserve against payment of
receivership expenses as provided in Section 2.16.

1.9 Closing Date and Place. The closing of the purchase
and sale of the Transferred Assets (the "Closing") shall take place at the
offices of the attorneys for the Seller in Boston, Massachusetts; (a) on the
second business day immediately after the last of the following to occur: (i)
sixty days after the Auction Sale; (ii) the Sale Confirmation Order (as defined
in Section 2.1) has become final and nonappealable; and (iii) the consents
required for the transfer of Franchises have been obtained; but, (b) if the
conditions set forth in Section 2 of this Agreement have not by that time been
satisfied (or waived by Purchaser), then the Closing shall take place on a date
designated by Purchaser, which shall not be later than ten (10) business days
following the date on which the conditions set forth in Section 2 of this
Agreement have been satisfied (or, if not satisfied, waived by Purchaser). If
all such conditions have not been satisfied or waived by September 30, 1995,
Purchaser may, at its option, terminate the Agreement if Purchaser is not then
in material default hereunder, or if all such conditions have not been
satisfied by November 1, 1995, then either Purchaser or Seller may, at its
option, terminate this Agreement if the terminating party is not then in
material default hereunder. Provided, however, (x) if the conditions set forth
in Section 2 of this Agreement (other than the condition in Section 2.1 that
the Sale Confirmation Order has

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<PAGE> 8
diligently become final and nonappealable) have been satisfied by September 30,
1995 (as if closing occurred on such date) or are otherwise waived and (y) if a
motion seeking approval of the Sale Confirmation Order is filed within five
business days after the Auction Sale and prosecuted, (z) then such optional
termination dates shall be tolled during the period in which the motion seeking
approval of the Sale Confirmation Order is pending before the Superior Court
and during any appeal period relating to such Sale Confirmation Order, but in
no event shall such optional termination dates be later than November 30, 1995.
If the Agreement is terminated in accordance with this Section, and if
Purchaser is not then in default of its obligations under this Agreement, then
the Deposit and all interest and earnings thereon shall be returned to
Purchaser and neither party shall have any further obligation to the other.
The date on which the Closing takes place is hereinafter referred to as the
"Closing Date". The deadlines set forth herein may be extended by mutual
agreement.

1.10 Documents to be Delivered at Closing By Seller. At
the Closing the following documents shall be delivered to the Purchaser (the
delivery of items which must be obtained from third parties shall constitute a
condition precedent to Purchaser's obligation to close but shall not constitute
obligations of the Seller other than as provided in Section 5.6):

(a) Bills of Sale. etc. A secured party's bill
of sale substantially in the form of Exhibit 1. 10(a). Seller's quitclaim
deeds, bills of sale, assignments, endorsements and other good and sufficient
instruments of transfer and conveyance as shall be necessary in the reasonable
opinion of counsel to Purchaser, to transfer all of the Seller's right, title
and interest in the Transferred Assets.

(b) Consents of Landlords. Consents (or new
leases on substantially identical terms in the name of the Purchaser) of real
estate landlords and other third parties whose consent is required for the
transfer and assignment to the Purchaser of the real estate leases and
easements described on Schedule 1.1(b) except for any consents, the lack of
which will not adversely affect the operations of the Systems of the rights of
Purchaser as the assignee of Seller.

(c) Customer Lists and Records. All existing
customer lists, the original Franchises and any amendments thereto, all
original Contracts and Leases and any amendments thereto, and all employee
lists, accounts receivable lists, strand maps, as-built maps, blue prints,
construction and system design documents, FCC records, copyright records,
property and sales tax records, and other documents relating to the Systems,
but only to the extent any of the foregoing are in the Seller's actual
possession and are not part of the Excluded Assets.

(d) Closing Certificate. Seller shall deliver to
Purchaser a certificate in such form as the Purchaser may reasonably request as
to the fulfillment by the Seller of the terms, conditions and covenants hereof.

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<PAGE> 9
(e) Lien Releases. Lien releases of all persons
holding mortgages, security interests, judgment liens, tax liens or other
encumbrances not permitted by this Agreement, to the extent such liens or
encumbrances are not extinguished as a result of the Auction Sale or any
secured party and/or mortgagee sale held in connection with the Auction Sale.

(f) Holdback Escrow. An executed copy of the
Holdback Escrow Agreement in the form attached hereto as Exhibit 1.8(d).

1.11 Documents to be delivered by Purchaser at Closing.
At the Closing the following documents shall be delivered by Purchaser:

(a) Assumption Agreement. Purchaser shall
deliver an assumption agreement by which it shall assume certain obligations of
the Seller as set forth at Section 1.5 hereof as shall be necessary in the
reasonable opinion of Seller's counsel.

(b) Purchase Price. Purchaser shall deliver the
Purchase Price as set forth at Sections 1.6 and 1.7 hereof.

(c) Closing Certificate. Purchaser shall deliver
to Seller a certificate in such form as the Seller may reasonably request as to
the fulfillment by the Purchaser of the terms, conditions and covenants hereof.

(d) Holdback Agreement. Purchaser shall deliver
to Seller an executed Holdback Escrow Agreement as set forth in Section 1.8(d)
hereof.

2. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS TO CLOSE

Purchaser's obligation to close hereunder shall be conditioned on the
fulfillment of the following conditions (any of which may be waived by
Purchaser):

2.1 Authority. Seller shall have authorization by the
Franklin County Superior Court to sell the Systems to Purchaser on the terms
and conditions contained herein and after the Auction Date the Court shall have
confirmed such authorization in an Order Confirming Sale ("Sale Confirmation
Order") in a form substantially similar to that attached hereto as Exhibit 2.1.
The Sale Confirmation Order shall be a final non-appealable order and be in
full force and effect without modification adverse to Purchaser.

2.2 Title to Property. Purchaser shall have received at
Closing good and marketable title to the Transferred Assets free and clear of
liens, claims and encumbrances except (a) those that will not adversely impact
Purchaser's use and enjoyment of the Transferred Assets or value of such assets
to the Purchaser and (b) those assumed, or those securing obligations assumed,
by Purchaser under Section 1.5.

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<PAGE> 10
2.3 Franchises.

(a) Schedule 1.1(a) attached hereto shall contain
to the Receiver's knowledge a true and complete list of all Franchises held by
the Seller.

(b) Seller shall not be responsible to pay
franchise fees or taxes not due prior to Closing per current payment schedule.

(c) The Franchises as amended shall be duly
issued by the Municipalities and be in full force and effect without any
amendments (other than those described on Schedule 1.1(a)) and binding upon the
Municipalities. No event shall have occurred, which with notice or lapse of
time or both, would constitute a default by the Seller, under the terms of the
Franchises, or would affect the validity or enforceability thereof.

2.4 [Intentionally Left Blank]

2.5 [Intentionally Left Blank]

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<PAGE> 11
2.6 Compliance with Law. The Purchaser shall be
reasonably satisfied that all Statements of Account, supplements and other
documents required under Section III of the Copyright Act and under the rule of
the Copyright Office with respect to the carriage of off-air signals by the
Systems shall have been duly filed, and the proper amount of copyright fees
shall have been paid on a timely basis, and the Systems qualify for the
compulsory license under Section III of the Copyright Act of 1976. Seller
shall deliver to Purchaser true and complete copies of all of its copyright
Statements of Account for the most recent four (4) semi-annual reporting
periods.

2.7 Violation of Law. The Purchaser shall be reasonably
satisfied that the execution and delivery of this Agreement by either party
hereto and the purchase of the Transferred Assets by the Purchaser does not
violate any material provision of law including, without limitation, the
Communications Act of 1934, as amended, the Cable Communications Policy Act of
1984, and the Cable Television Consumer Protection and Competition Act of 1992.

2.8 [Intentionally Left Blank}

2.9 Performance. Seller shall have performed and
complied with all covenants and agreements required to be performed by it prior
to or at the Closing.

2.10 Consents and Pole Agreements.

(a) All consents of third parties required for
transfer to Purchaser of the Municipal Franchises listed on Schedule 1.1(a) and
the headend leases and Sugarloaf Agreement listed on Schedule 1.1(b) shall have
been obtained. Consent to the transfer of the Sugarloaf Agreement may be
conditional on the Purchaser relocating certain transmitting equipment to
another location on the leased premises after the Closing Date, and any cost
related thereto shall be a cost or obligation of Seller, or shall result in a
downward adjustment to the Purchase Price at the election of the Purchaser
unless such costs have already been paid. The Municipalities, in approving
transfer of the Franchises, as amended, shall have confirmed that the
Franchises are in full force and effect.

(b) Purchaser shall have received at Closing from
each headend lessor and office lessor (including Sommerset) an estoppel
certificate substantially in the form attached hereto as Exhibit 2.10(a). The
certificate from the office lessor shall also include an agreement by such
lessor to extend the lease term for a period of one year from the Closing Date.

(d) At the Closing New England Telephone and
Telegraph Company ("NET"), Community Service Telephone Company ("Community"),
Central Maine Power ('CMP") and Sommerset shall have consented to the transfer
of pole attachment agreements to Purchaser on the terms and conditions
described, and shall have otherwise reaffirmed the statements by them, in their
respective Consent to Assignment as listed as follows:

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<PAGE> 12
<TABLE>
<CAPTION>
Utility Date of Consent to Assignment
------- -----------------------------
<S> <C>
NET June 16,1995
Community May 31,1995
CMP June 20,1995
Sommerset June 19, 1995
</TABLE>

Purchaser shall have a claim against the Holdback Amount for costs and expenses
reasonably and in good faith incurred by Purchaser to cure any default under
the PA Agreements based on obligations of Seller or its predecessor in interest
thereunder arising prior to the Closing provided NET, Community, Sommerset or
CMP has given notice to and made demand in writing on Purchaser to cure such
default. Purchaser shall give Seller prompt notice of any such demand or
default.

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<PAGE> 13
2.11 No Liens. The Purchaser shall be reasonably
satisfied that upon Closing, it owns good and marketable title to the
Transferred Assets free and clear of liens, claims and encumbrances except (a)
those that will not adversely impact Purchaser's use and enjoyment of the
Transferred Assets or their value to Purchaser and (b) those assumed or those
securing obligations assumed by Purchaser under Section 1.5.

2.12 Delivery of Closing Documents. Seller shall have
entered into and delivered to Purchaser all closing documents required to be
delivered by Seller to Purchaser pursuant to Section 1.10 hereof.

2.13 Litigation. No action or proceeding shall have been
instituted (by a person other than Purchaser or affiliates) which has not been
dismissed before any court or governmental agency to restrain or prohibit or to
obtain damages in respect of, or which is related to or arises out of, this
Agreement or the transactions contemplated herein.

2.14 [Intentionally Left Blank]

2.15 The Banks have consented to the sale substantially in
the form of Exhibit 2.15 attached hereto.

2.16 Receivership Expenses. Purchaser receives reasonably
satisfactory evidence that expenses incurred by the Receiver after his
appointment (including without limitation trade payables incurred after his
appointment but excluding claims arising under this Agreement) and all taxes
(whether incurred prior to or following the appointment of the Receiver) have
or will be paid.

2.17 [Intentionally Left Blank].

2.18 [Intentionally Left Blank]

3. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS

3.1 Seller's obligations hereunder are subject to the
fulfillment prior to or at the Closing of each of the following conditions (any
of which may be waived by Seller):

(a) Performance. Purchaser shall have performed
and complied with all covenants and agreements required to be performed by
Purchaser prior to or at the Closing, including payment of Purchase Price.

(b) Delivery of Closing Documents. Purchaser
shall have delivered all closing documents required to be delivered by
Purchaser to Seller pursuant to Section 1.10 hereof.

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<PAGE> 14
(c) Winning Bid. Purchaser is selected as the
winning bidder at the Auction Sale referred to in Section 4 hereof.

(d) Litigation. This Agreement or the
transactions contemplated herein are not then restrained, enjoined or
prohibited by any court or governmental authority but such restriction shall
suspend performance only until such restriction is removed.

3.2 Seller's obligations hereunder are subject to
obtaining the consent of the Banks in the form of Exhibit 2.15 hereto.

4. [INTENTIONALLY LEFT BLANK]

5. CONDUCT OF BUSINESS OF SELLER PENDING CLOSING AND ADDITIONAL
COVENANTS OF SELLER

As a further condition to Purchaser's Obligations, except as otherwise
expressly provided herein, between the date hereof and the Closing:

5.1 Continuation of Past Practices. The business and
affairs of the Systems shall have been conducted in the ordinary course, in a
manner consistent with prior practices, including payment of current
liabilities when due and past due liabilities in accordance with the Seller's
practice at the time of the execution of this Agreement, and maintenance of
equipment to keep the Systems in good working order.

5.2 Conduct of Business in Ordinary Course. From and
after the date hereof, and until the Closing Date, Seller will conduct the
business of the Systems only in the ordinary course and will not do any of the
following:

(a) Sell, transfer, lease to others, or otherwise
dispose of any of the assets material to the operation or maintenance of the
Systems except for inventory and/or services sold in the ordinary course of
business or for assets sold or disposed of that are replaced by other assets of
comparable utility and value, or waive, compromise, or release any right of
material value; or

(b) Transfer, amend or grant any right under, or
enter into any settlement regarding the breach of infringement of, any license,
patent, copyright, trademark, trade name, invention, franchise, or similar
rights, contracts which will be assumed by Purchaser hereunder, or modified, in
any material sense, any existing right with respect thereto relating to the
Systems.

(c) Grant any pay increases to any employees
other than one-time premiums or bonuses to induce employees to remain until
Closing or alter the rates charged to subscribers other than write-off of late
charges and interest as may be reasonably necessary or

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<PAGE> 15
appropriate to satisfy subscriber count requirements hereunder but the amount
of any such write off shall be downward adjustment to the Purchase Price.

5.3 [Intentionally Left Blank]

5.4 [Intentionally Left Blank]

5.5 Access to Information. It will provide to Purchaser,
its officers, agents, employees, counsel, accountants, engineers, and other
representatives full access to all the premises and books and records of the
Systems and, to the extent permitted by law, to cause the officers and
employees of Seller to furnish to Purchaser all information in connection with
the business and properties of the Seller as Purchaser shall from time to time
reasonably request, provided, however, that any such investigation shall be
conducted during normal business hours and in such a manner as to not
unreasonably interfere with the operation of the business of the Systems and
Purchaser shall keep such information confidential.

5.6 Reasonable Efforts to Close Transaction. Seller and
Purchaser will use reasonable efforts to cause the closing contemplated hereby
to occur, including without limitation, Seller's reasonable good faith efforts
to assist Purchaser in causing all required third party consents for transfer
of the Transferred Assets to be obtained.

5.7 Employees. Purchaser shall pay any employees not
hired by it after the Closing, all amounts owed to them, whether in respect of
salary, accrued vacation or sick pay, severance or otherwise. Purchaser shall
have no obligation to hire any of such employees.

6. RISK OF LOSS

Any loss by reason of fire, flood, snow, ice, windstorm or other
weather related casualty, explosion, earthquake, accident, act of God, war,
seizure or activities of the armed forces, or other casualty, ordinary wear and
tear excepted, of any of the Transferred Assets until the Closing Date shall be
the responsibility of the Seller. If such loss or damage shall be sufficiently
substantial to preclude the resumption of normal operation to ten percent (10%)
or more of subscribers or a substantially complete restoration of any part of
the system consisting of ten percent (10%) or more of the homes passed within
thirty (30) days, or if such loss or damage materially and adversely affects
the value of the Transferred Assets as a going concern

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<PAGE> 16
to the extent of more than Twenty-Five Thousand Dollars ($25,000), Seller shall
immediately notify Purchaser in writing. Purchaser, at any time within fifteen
(15) days after receipt of such notice, may elect to either (a) consummate the
transactions contemplated by this Agreement at a purchase price reduced by the
amount of any insurance proceeds paid or payable to the Seller or its loss
payees/mortgagees and any related deductible or (b) terminate this Agreement.
In the latter event, all parties hereto shall stand fully released and
discharged from any and all obligations under this Agreement, and the Earnest
Money Deposit shall be forthwith returned to the Purchaser. If Purchaser
elects to consummate the transactions contemplated by this Agreement, the
Purchase Price shall be reduced by the amount of such loss or damage not
compensated by insurance proceeds accepted by Purchaser on or before the
Closing Date.

7. TERMINATION

Purchaser may terminate this Agreement prior to Closing if Purchaser
is then in material compliance with its obligations and covenants under this
Agreement and:

(a) Seller breaches or fails to satisfy any
covenant set forth herein, and such failure or breach continues for thirty (30)
days after notice thereof by Purchaser to Seller or a condition precedent to
Purchaser's obligation to close has not been satisfied by the date required by
this Agreement; or

(b) The Closing has not occurred on or before
September 30, 1995 subject to the tolling provisions of Section 1.9.

Upon any such termination by Purchaser, the Deposit and interest
thereon shall be returned to the Purchaser.

8. NOTICES

All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given when either
personally served or mailed via Federal Express or other next day delivery
service, at the addresses set forth below, or to such other address or to such
other persons as Purchaser or Seller shall have last designated by written
notice to the other parties.

Address for Seller: Mr. Stephen Gray, Receiver
The Recovery Group
270 Congress Street
Boston, MA 02210

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<PAGE> 17

with a copy to: Christopher T. Katucki, P.C.
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109

Address for Purchaser: As listed on signature page
hereof

9. MISCELLANEOUS

9.1 [Intentionally Left Blank]

9.2 Benefits. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective successors and assigns,
except that Seller may not assign any of its rights or duties hereunder.
Purchaser may assign its rights and obligations hereunder to any entity which
shall not be, or affiliated with, an officer, director or shareholder of
Carrabassett or Longfellow; in addition, Purchaser may assign its rights
hereunder to one or more lenders making loans to it. Purchaser shall not
collusively bid at any auction sale.

9.3 Further Assurances. The parties agree that they
shall execute and deliver any and all additional writings, instruments, and
other documents contemplated hereby or referred to herein and shall take such
further action as shall be reasonably required in order to effectuate the terms
and conditions of this Agreement.

9.4 Governing Law. This Agreement shall be governed by
and construed according to the laws of the State of Maine.

9.5 Transfer Taxes. All sales and other taxes due on
account of the sale of the Transferred Assets, including any Maine sales tax,
shall be paid by the Seller.

9.6 Modification. This Agreement shall not be amended,
modified or supplemented at any time unless by writing executed by the parties
hereto, provided, however, the Purchaser may assign its rights and obligations
under this Agreement to any affiliate or nominee prior to the Closing and shall
designate such assignee promptly following the date hereof so as not to hinder
the Transferred Assets hereunder. No amendment, supplement or termination of
this Agreement shall affect or impair any rights or obligations which have
heretofore matured hereunder.

9.7 Article Headings. The article headings contained in
this Agreement are for reference purposes only, and shall not affect the
meaning or interpretation of this Agreement.

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<PAGE> 18
9.8 Specific Performance and Liquidated Damages

(a) Both Purchaser and Seller agree that damages
would be an inadequate remedy for breach by Seller of its obligations set forth
in this Agreement, and that, in addition to any claim for damages, Purchaser
may have specific performance as a remedy for any breach by the Seller of its
obligations under this Agreement. Without limiting the foregoing, Purchaser
may have specific performance of the Seller's obligation to consummate the
purchase and sale contemplated hereby.

(b) If Purchaser shall default in the observance
or performance of any of the terms of this Agreement, the parties stipulate and
agree that actual damages are difficult, if not impossible, to compute, and the
Deposit plus earnings thereon, if any, shall be paid to and retained by Seller
as liquidated damages as its sole and exclusive remedy and not as a penalty.

9.9 Costs and Expenses. Purchaser and Seller shall each
pay any and all of their own costs and expenses, including attorneys' fees,
relating to the execution and delivery of this Agreement and the consummation
of all transactions contemplated herein.

9.10 Due Diligence. Purchaser has made its own analysis
of the Systems and assets and has independently reviewed all documents and
information it deems necessary to evaluate the merits and risks of purchasing
and to make an informed and reasoned decision to purchase the Systems and
Transferred Assets.

9.11 Cumulative Rights/Waiver. Each and every right
granted to a party hereunder, or in any other documents contemplated hereby, or
delivered hereunder or executed concurrently herewith or by law or equity,
shall be cumulative and may be exercised at any time, or from time to time. No
failure on the part of any party to exercise, and no delay in exercising any
right shall operate as a waiver thereof, nor shall any single or partial
exercise by any party for any right preclude any other or future exercise
thereof or the exercise of any other right. The failure of any party at any
time, or from time to time, to require performance by any other party of any
term, condition or provision of this Agreement, shall in no way after or
otherwise affect the right of such party at a later time to enforce the same.
No waiver by any party of any condition or of the breach of any term, covenant
or provision at any time or from time to time, shall be deemed to be or be
construed as a further or continuing waiver of any such condition or breach or
as a waiver of any other condition or of any other or subsequent breach of the
same or any other term, covenant or provision.

9.12 Schedules and Exhibits. Each Schedule and Exhibit
attached hereto shall be incorporated into and shall be deemed a part of this
Agreement.

9.13 Seller's Obligations. Seller's obligations hereunder
are subject to court approval and obtaining the consent of the Banks.

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<PAGE> 19
9 14 Receiver. This agreement is entered into by the
Receiver solely in his capacity as Receiver, and he shall have no personal
liability hereunder.

9.15 No Brokers. Seller and Purchaser agree that they have
not incurred any liability to brokers in connection with the purchase and sale
of the Transferred Assets.

9.16 [Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have caused these presents to
be signed, sealed and delivered as of the date first above written.

<TABLE>
<S> <C>
PURCHASER:
FrontierVision Partners, L.P.

By: /s/ Galan F. Fernandes
-------------------------------------------------
Name: GALAN F. FERNANDES
Title: Director of Business Administration
Notice Address: 1777 South Harrison Street
Suite P-200
Denver, CO 80210-3925

SELLER:

By: /s/ Stephen S. Gray
-------------------------------------------------
Stephen S. Gray
Receiver for Longfellow Cable Co., Inc.
and Carrabassett Cable Systems, Inc.
and not individually
</TABLE>

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<PAGE> 1

EXHIBIT 10.12

PURCHASE AGREEMENT

This Purchase Agreement (this "Agreement") is entered into as of
August 6, 1996, between PENN/OHIO CABLEVISION, L.P., a Pennsylvania limited
partnership, whose address is 71 Cedar Avenue, Hershey, Pennsylvania 17033
(hereinafter called the "Seller") and FrontierVision Operating Partners, L.P.,
a Delaware limited partnership, whose address is 1777 South Harrison Street,
Suite P-200, Denver, Colorado 80210-3925 (said limited partnership or its
assignee hereunder is hereinafter called the "Purchaser").

WHEREAS, the Seller owns and operates the cable television system and
related assets serving Summit Township (located in Somerset County, including
Glade City), Pennsylvania and the towns of Meyersdale and Garrett, Pennsylvania
and the cable television system and related assets serving portions of Athens
County, Ohio and the town of Albany and Waterloo Township (including New
Marshfield), Ohio (each a "System" and, collectively, the "Systems"; and each
granting authority of a Franchise (as hereinafter defined) with respect to such
service areas being hereinafter referred to as a "Municipality" and,
collectively, the "Municipalities"), and desires to sell the Systems to
Purchaser on the terms set forth herein; and

WHEREAS, the Purchaser desires to purchase the Systems on the terms
set forth below;

NOW, THEREFORE, the Purchaser and the Seller, intending to be legally
bound, do hereby agree as follows:

1. Sale. On the terms set forth in this Agreement Seller shall
sell to Purchaser and Purchaser shall buy from Seller on the Closing Date all
of the assets used or useful in connection with the ownership and conduct of
the business or operations of the Systems, together with any additions thereto
between the date of this Agreement and the Closing Date, free and clear of all
liens, mortgages, restrictions, encumbrances, claims and obligations of any
kind (a "Lien"), including the following assets:

(a) All tangible personal property used or useful in
connection with the ownership or operation of either or both of the Systems,
including all cable, strand, fittings, amplifiers, modulators, receivers,
converters, descramblers, antennae, racks, taps, traps, and electronic devices
used in the Systems (the "Equipment") including, without limitation, the
equipment, vehicles and inventory listed on Schedule 1 attached hereto,
together with any additions thereto between the date of this Agreement and the
Closing Date. With respect to the Equipment listed on Schedule 1, the Seller
gives (i) no express warranties other than those specifically stated in this
Purchase Agreement and (ii) no implied warranties, including without
limitation, warranties of merchantability and fitness for a particular purpose.

(b) All of the Contracts (as defined hereinafter in
Section 4.11) including without limitation the Contracts listed on Schedule 2
(exclusive of the Contracts listed on Schedule 13) insofar as and only insofar
as such Contracts relate to the Systems..
<PAGE> 2

(c) All interests (the "Real Property Interests") of
Seller in any of the real property, and all buildings and improvements thereon,
used in connection with the business or operations of either or both of the
Systems (the "Real Property"), including fee estates, leaseholds,
subleaseholds, purchase options, licenses, easements, rights to access, and
rights of way, including without limitation the items listed on Schedule 3,
together with any additions thereto between the date of this Agreement and the
Closing Date.

(d) All initial authorizations, or amendments or renewals
thereof, issued by the Municipalities, whether such authorizations are
designated as franchises, permits, licenses, resolutions, contracts,
certificates, agreements or otherwise, in connection with the construction,
operation or maintenance of either of the Systems (the "Franchises"), including
without limitation the authorizations listed on Schedule 4.

(e) All licenses, permits and other authorizations (other
than the Franchises) issued by the Federal Communications Commission ("FCC"),
the Federal Aviation Administration ("FAA"), or any other federal, state or
local governmental authority and held by Seller in connection with the conduct
of the business or operations of either or both of the Systems ("Governmental
Licenses") including without limitation the items listed on Schedule 5,
together with any additions thereto between the date of this Agreement and the
Closing Date.

(f) all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, proprietary information,
technical information and data, machinery and equipment warranties, and other
similar intangible property rights and interests (and any goodwill associated
with any of the foregoing) applied for, issued to, transferred to, or owned by
Seller or under which Seller is licensed or franchised and which are used or
useful in connection with the business and operations of either or both of the
Systems, together with any additions thereto between the date of this Agreement
and the Closing Date (the "Intangibles") and the goodwill of the Systems, if
any.

(g) all of Sellers proprietary information, technical
information and data, subscriber lists, machinery and equipment warranties,
maps, computer discs and tapes, plans, diagrams, blueprints and schematics
relating to the business and operation of either or both of the Systems.

(h) all accounts receivable of the Systems as of the
Closing.

(i) all choses in action of Seller relating to either or
both of the Systems.

(j) all books and records relating to the business or
operations of either or both of the Systems.

All of the foregoing property is referred to in this Agreement as the
"Transferred Assets." Notwithstanding the foregoing, the Transferred Assets do
not include any cash of

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<PAGE> 3
Seller, any pension, profit-sharing or employee benefit plans, any collective
bargaining agreements or any of the assets listed on Schedule 13 hereto (the
"Excluded Assets").

2. Purchase Price.

2.1 Amount. The "Purchase Price" for the Transferred
Assets shall equal the sum of (A) Three Million Eight Hundred Thousand Dollars
($3,800,000), as adjusted pursuant to Sections 2.5 and 2.6 plus (B) one-half
(1/2) of the outstanding loan balance as of the Closing Date on a 1996 Ford
Ranger Super Cab pickup truck purchased by the Seller in December, 1995. The
Purchase Price will be allocated in a manner agreed to by the parties at or
prior to Closing.

2.2 Escrow Deposit. Within five days of the execution
and delivery of this Agreement, Purchaser shall deposit the amount of
Seventy-Five Thousand Dollars ($75,000) (the "Escrow Deposit") in an account
designated by Colorado National Bank, N.A. (the "Escrow Agent"). The Escrow
Deposit shall be held, administered and distributed for the respective benefits
of the parties hereto in accordance with the terms of this Agreement and the
Escrow Agreement substantially in the form attached hereto as Exhibit A
("Escrow Agreement") to be entered into within five days of the execution and
delivery of this Agreement. If the Closing occurs, at Closing Seller and
Purchaser shall direct the Escrow Agent to disburse the Escrow Deposit
(together with the interest and earnings thereon) to Seller, or Seller's
designee, in accordance with the procedures set forth in the Escrow Agreement.
If the Closing does not occur, Seller and Purchaser shall direct the Escrow
Agent to disburse the Escrow Deposit (together with the interest and earnings
thereon) in accordance with Sections 13.4 and 13.5 of this Agreement, as
applicable, in accordance with the procedures set forth in the Escrow
Agreement.

2.3 Indemnity Escrow Deposit. At Closing, Purchaser
shall deposit the amount of Two Hundred Fifty Thousand Dollars ($250,000) (the
"Indemnity Escrow Deposit") in an account designated by the Escrow Agent, to be
held, administered and distributed in accordance with the terms of this
Agreement and the Indemnity Escrow Agreement (as hereinafter defined).

2.4 Manner of Payment. On the Closing Date, Purchaser
shall pay or cause to be paid to Seller or Seller's designee the Purchase
Price, less (i) the amount paid to Seller as provided in Section 2.2 above, and
(ii) the Indemnity Escrow Deposit, in cash by means of a wire transfer or
interbank transfer in immediately available funds to an account designated by
Seller in writing at least two business days prior to the Closing.

2.5 Adjustments to Purchase Price. The Purchase Price
shall be adjusted on the Closing Date as follows:

(a) As of the Closing Date:

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<PAGE> 4
(i) there shall be a reduction in the
Purchase Price for prepaid subscription revenues for
cable television service to be provided after the
Closing Date;

(ii) there shall be prorated as of the
Closing Date in favor of Seller or Purchaser, as the
case may be, in accordance with generally accepted
accounting principles and accrual accounting and in
accordance with the principle that Seller shall be
responsible for all expenses, costs, and liabilities
allocable to the period prior to the Closing Date,
and Purchaser shall be responsible for all expenses,
costs, and obligations allocable to the period on and
after the Closing Date, including franchise fees,
copyright fees, pole rental charges, utility charges,
municipal assessments, property taxes, rents, sales
and service charges, FCC fees, copyright royalty
payments and other properly proratable operating
expenses of the Systems, provided that no credit
shall be given Seller for a prepaid expense with
respect to which Purchaser will receive no business
benefit and provided further that there shall be no
adjustment for, and Seller shall remain solely liable
with respect to, any Contracts and any other
obligation or liability not being assumed by
Purchaser pursuant to this Agreement, including,
without limitation, any liability or obligation for
salaries, wages or other employee compensation or
benefits relating to any employees or former employee
of the Systems, it being understood that all such
employee-related expenses and benefits shall be the
sole responsibility of Seller.

(iii) there shall be a reduction in the
Purchase Price for any subscriber deposits, including
converter deposits.

(iv) the Purchase Price shall be
increased by 100% of the face amount of Good Basic
Subscriber (as defined in Section 4.9 hereof)
accounts receivable of the Systems on the Closing
Date that are not more than 30 days past due on such
date and 95% of the face amount of Good Basic
Subscriber accounts receivable of the Systems on the
Closing Date that are not more than 60 days past due
on such date (for this purpose payment for cable
television service provided in any calendar month or
portion thereof shall be deemed due on the first day
of that month); and

(v) in the event the number of Good
Basic Subscribers of the Systems is less then 3,275
as of the Closing Date, the Purchase Price shall be
decreased by the product of (A) $1,145 and (B) 3,275
less the actual number of Good Basic Subscribers on
the Closing Date.

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<PAGE> 5
2.6 In the event Purchaser is owed an amount as a result
of the foregoing prorations and adjustments, the Purchase Price shall be
reduced accordingly. In the event Seller is owed an amount as a result of
these prorations and adjustments, the Purchase Price shall be increased
accordingly. The initial statement of prorations and adjustments (the "Initial
Settlement Statement") will be prepared by Seller and delivered to Purchaser at
least three but not more than six days before the Closing Date. If any item of
expense subject to proration or adjustment hereunder cannot be finally
ascertained or the proration or adjustment cannot be finally calculated by the
Closing Date, then it shall be estimated for purposes of the Initial Settlement
Statement and a final adjustment shall be made not more than sixty (60) days
after the Closing Date in accordance with a final settlement statement ("Final
Settlement Statement") to be prepared by Purchaser and delivered to Seller, and
appropriate payments shall be made in satisfaction thereof within five (5) days
after final adjustments are agreed upon. If the parties are unable to resolve
any disagreement with respect to the Final Settlement Statement within such
sixty (60) day period, then at the option of either party the matter shall be
submitted to an accounting firm which shall be knowledgeable and experienced in
the operations of cable television systems and reasonably acceptable to
Purchaser and Seller, whose determination shall be binding on Purchaser and
Seller. Each party shall bear the fees and expenses of its own
representatives, including its independent accountants, if any, and the fees
and expenses of any firm selected to resolve any disagreement between the
parties shall be borne by the parties in proportion to the amount by which the
determination of all matters submitted to such accounting firm varies from the
positions of Purchaser and Seller on all such matters. Within five (5)
business days following a final determination (whether as a result of a
resolution by Purchaser and Seller of any such disagreement, or a determination
by an accounting firm selected to resolve any disagreement between the
parties), Purchaser shall pay to Seller the amount of any underpayment, or
Seller shall refund to Purchaser the amount of any overpayment, as the case may
be, of the Purchase Price (as adjusted to reflect such determination).

3. Liabilities. Purchaser shall not assume or be liable or
responsible for any liabilities or obligations of Seller except (i) obligations
arising under the Franchises and Governmental Licenses that are assigned to
Purchaser at Closing, (ii) obligations under real estate easements, licenses
and leases described on Schedule 3 that are assigned to Purchaser at Closing,
(iii) obligations arising under the Contracts listed on Schedule 2 that are
assigned to the Purchaser at Closing, (iv) obligations to subscribers of the
Systems to provide cable television service, and (v) Seller's liability for
subscriber deposits, in each case, insofar as such obligations and liabilities
relate to the time on or after the Closing Date and arise out of events related
to Purchaser's ownership of the Transferred Assets or its operation of the
Systems on or after the Closing Date or the Purchase Price was reduced pursuant
to Section 2 as a result of such obligation or liability. Purchaser shall not
assume any other obligations or liabilities of Seller, including without
limitation (i) any obligations or liabilities under any programming agreement
or any Contract, Governmental License or Franchise not assigned to Purchaser at
Closing or relating to any Excluded Asset, (ii) any claims or pending
litigation or proceedings relating to the operation of the Systems prior to the
Closing, (iii) any obligations or liabilities arising under capitalized leases
or other financing agreements, (iv) any obligations or liabilities arising
under agreements entered into other than in the ordinary

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<PAGE> 6
course of business or in violation of Seller's covenants made in this
Agreement, (v) any obligations or liabilities of the Seller under any employee
pension, retirement, or other benefit plans or collective bargaining
agreements, (vi) any obligation to any employee or former employee of the
Systems for salary, wages or other employee compensation or benefits, including
without limitation, severance benefits, vacation time and sick leave, however
arising, or (vii) any obligations or liabilities caused by, arising out of, or
resulting from any action or omission of the Seller prior to the Closing, and
all such obligations and liabilities shall remain and be the obligations and
liabilities solely of the Seller.

4. Seller's Representations and Warranties. Seller represents
and warrants to Purchaser (which representations and warranties shall survive
the Closing) that:

4.1 Seller in Good Standing. The Seller is a limited
partnership duly organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania and as of the Closing Date will be
duly qualified to do business as a foreign limited partnership and be in good
standing under the laws of the State of Ohio. Schedule 8 sets forth (i) all of
the fictitious and trade names which Seller has used or is currently using in
connection with the business of the Systems and, to Seller's knowledge, all
fictitious and trade names used by any prior owner or operator of the Systems
in the past five (5) years in connection with the business of the Systems, and
(ii) the location(s) of the chief executive office(s) of Seller and, to
Seller's knowledge, such prior owners and operators.

4.2 Due Authorization. Seller has all requisite power
and authority (i) to own, lease, and use the Transferred Assets as now owned,
leased, and used, (ii) to conduct the business and operations of the Systems as
now conducted, and (iii) to execute, deliver and perform this Agreement and the
documents contemplated hereby. The execution, delivery and performance of this
Purchase Agreement and the transactions contemplated hereby have been duly
authorized by all required partnership action of Seller, with all required
approvals of Seller's partners.

4.3 Binding Obligation. This Agreement has been duly
executed and delivered by Seller and constitutes the legal, valid and binding
obligation of the Seller, enforceable against it in accordance with its terms,
except as the enforceability of this Agreement and the documents contemplated
hereby may be affected by bankruptcy, insolvency, or similar laws affecting
creditors' rights generally and by judicial discretion in the enforcement of
equitable remedies.

4.4 Title to Assets. Seller has, and at Closing
Purchaser will receive, good title to the Transferred Assets, free and clear of
all Liens of any kind. The Transferred Assets are all of the assets required
for the lawful conduct of the business and operation of the Systems in the
manner and to the full extent they are now conducted. None of the Transferred
Assets is subject to any restriction or condition that would limit the full
operation of the Systems as now operated, and each Transferred Asset is
available for immediate use in the business and operations of the Systems. All
tangible Transferred Assets are in good condition and repair.

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<PAGE> 7
4.5 Real Estate.

(a) Schedule 3 attached hereto accurately
describes all Real Property and all Real Property Interests with respect
thereto. Seller has delivered to Purchaser true and complete copies of all
deeds, leases, easements, rights-of-way and other instruments pertaining to the
Real Property Interests required to be disclosed in Schedule 3 (including any
and all amendments and other modifications of such instruments). All such
leases, easements and licenses are in full force and effect, and no default by
Seller or, to Seller's knowledge, by any other party exists under any such
lease, easement or license. To the Seller's knowledge, the Seller's use of
Real Property is not in violation of any zoning, building code, or similar laws
affecting land use. All fees due under all material easements, leases and
crossing permits have been paid and will be paid in full at Closing for periods
ending on or before the Closing Date. Seller's facilities located on the Real
Property are supplied with utilities and other services necessary for Seller's
operation of such facilities. Seller has full legal and practical access to
all of the Real Property.

(b) Seller has not received any notice and has no
knowledge of any condemnation or rezoning or other proceeding pending or
threatened with reference to the Real Property and, in addition, Seller knows
of no structural defects in any of the premises in which Seller conducts
operations. No unresolved claims of trespass for service drop components of
the Systems (for example, between a distribution cable tap and a subscriber's
television set) are known to the Seller.

(c) To the Seller's knowledge, neither the Seller
nor any of the Real Property owned, leased or otherwise used by Seller is in
violation of any laws or regulations relating to storage or disposal or
treatment of waste products, or any other laws relating to land use or
protection of the environment. To Seller's knowledge, after due inquiry, there
are no tanks on or below the surface of the Real Property, there is no
hazardous or toxic waste, substance or material or other contaminant or
pollutant (as determined under federal, state or local law) present on or below
the surface of the Real Property in "reportable levels," including, without
limitation, in the soil, subsoil, groundwater or surface water, and the Real
Property has never been used by Seller or, to the knowledge of Seller, by any
previous owner or operator to generate, manufacture, refine, produce, store,
handle, transfer, process, dispose of or transport any hazardous or toxic
waste, substance or material or other contaminant or pollutant. To Seller's
knowledge, the Real Property is free from all asbestos.

4.6 Compliance With Law. The Seller and the Systems are
in substantial compliance with all material terms of all Franchises and all
applicable federal, state and local laws, rules, regulations and published and
generally available written policies, and Seller has not received any notice
claiming a violation by Seller or the Systems of any such Franchise, law, rule
or regulation, nor is Seller aware of any basis for any person or governmental
authority to claim that any such violation exists. Neither the ownership or
use of the properties of the Systems nor the conduct of the business or
operations of the Systems conflicts with the rights of any other person or
entity, other than such conflicts as would not

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<PAGE> 8
have a material adverse effect, either individually or in the aggregate, on the
business, operations, condition (financial or otherwise), properties, assets or
liabilities of the Transferred Assets or either System (a "Material Adverse
Effect").

4.7 Copyright, FCC and FAA Compliance.

(a) As of the Closing Date, all Notices, Statements of Accounts,
supplements and other documents required under Section 111 of the Copyright Act
of 1976, as amended (the "Copyright Act"), and under the rules, regulations and
published and generally available written policies of the United States
Copyright Office ("Copyright Office") with respect to the carriage of broadcast
signals by the Systems have been duly filed, and the required amount of
copyright fees have been paid on a timely basis, or will be fully paid, with
all required interest and penalties (if any), by the Closing Date and the
Systems qualify for the compulsory license under Section 111 of the Copyright
Act and the Copyright Office's rules, regulations and published and generally
available written policies. There is no inquiry, claim, action or demand
before the Copyright Office or any court or by any third party which questions
the copyright filings or payments made by Seller with respect to any of the
Systems.

(b) All required authorizations, certificates, licenses, permits
and clearances from governmental agencies (including the FCC and FAA) with
respect to the Systems' operations, including all of Seller's towers, earth
stations, business radios and frequencies utilized and carried by the Systems,
have been obtained and are currently valid and in full force and effect.
Seller is authorized to use all restricted frequencies used by the Systems in
accordance with FCC rules and regulations.

(c) All reports, applications, registrations statements and other
documents required to be filed in connection with the ownership and operation
of the Systems have been filed with the FCC for the last three (3) years. Each
employment unit operated by the Seller with respect to the Systems is currently
in compliance with the equal opportunity requirements of the Communications Act
and the FCC's rules, regulations and published and generally available written
policies.

(d) Except as described in this Section 4.7(d), Seller has
received no request or demand to lease channel capacity on either of the
Systems pursuant to Section 612 of the Communications Act and corresponding FCC
regulations and policies. Seller received a verbal request on July 25, 1996
from Mr. James Crigger to lease channel space on the Ohio system, which request
Seller requested be submitted in writing. As of the date of this Agreement,
Seller has not received such request in writing.

4.8 Homes passed, miles of plant, etc. The Systems pass
and on the Closing Date will pass at least 3,975 residential dwelling units
that can be served from activated plant to include active commercial accounts
in good standing subscribing to basic or broadcast basic service. The Systems
consist of approximately 103 miles of total plant from two (2) headends. The
Systems are spaced at 350 MHz and operate at 350 MHz except for

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<PAGE> 9
feeder sections of Myersdale which pass only 250 MHz. Each System is in good
working order and does not require an upgrade or rebuild to comply with the
Franchises or applicable laws or regulations. Except as disclosed on Schedule
14, the Systems comply with all technical standards promulgated by the FCC,
including, without limitation, requirements set forth in the Report And Order
adopted February 13, 1992. Seller agrees to disclose to Purchaser any
noncompliance with FCC technical requirements and any nonconformance with any
other laws, ordinances, orders, or regulations to the extent Seller becomes
aware of any such noncompliance or nonconformance at any time prior to the
Closing.

4.9 Subscribers. As of June 30, 1996 the Systems serve
at least 3,246 Good Basic Subscribers (as defined below) and 1,221 pay units
subscribed to by Good Basic Subscribers at the rates indicated on the rate
schedule attached as Schedule 9. As of Closing, the Systems will serve at
least 3,275 Good Basic Subscribers and 1,300 pay units subscribed to by Good
Basic Subscribers at the rates indicated on the rate schedule attached as
Schedule 9. A Good Basic Subscriber is a person, household or commercial
account (exclusive of "additional outlets" or "second outlets," as such terms
are commonly understood in the cable television industry) who (i) is an active
subscriber to basic or broadcast basic cable television services provided by
the Systems (ii) pays the Seller's standard rate indicated by the attached rate
schedules for basic and broadcast basic service (iii) has paid for all services
subscribed to 60 days or more prior to the date of determination of the number
of Good Basic Subscribers, (iv) has made at least one regular monthly payment
to the Seller prior to the date of determination of the number of Good Basic
Subscribers at the standard rates, (v) whose service is not pending
disconnection for any reason, (vi) have no outstanding balance more than two
billing periods past due from the earliest date for which basic service has
been provided, and (vii) were not solicited by Seller within 90 days prior to
the date of determination of the number of Good Basic Subscribers by any
promotion or by offers of discounts other than in the ordinary course of
business consistent with Seller's past practices; provided that in computing
the number of Good Basic Subscribers hereunder as to all commercial or bulk
billing accounts of either System, such number of Good Basic Subscribers shall
be the result obtained by dividing the aggregate of the gross billings from
such accounts from the provision of basic service (excluding any installation
or non-recurring charge, any charge for equipment, and any pass-through charge)
for the calendar month immediately preceding the Closing by the average
standard monthly rate charged to single-family households for basic service for
that System as set forth on the rate schedule attached as part of Schedule 9.

4.10 Franchises.

(a) The Franchises are valid, in full force and
effect, and duly and legally held by Seller, and constitute the only
governmental permits, franchises or authorizations required by law to own and
operate the Systems as presently operated and contemplated by the Seller to be
operated. True and complete copies of the Franchises have been delivered by
the Seller to the Purchaser. No event has occurred, which, with notice or
lapse of time or both, would constitute a default by the Seller or, to the best
knowledge of the Seller, by any party thereto, under the terms of the
Franchises or would affect the

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<PAGE> 10
validity or enforceability thereof. The Franchises were duly issued by the
applicable Municipality and are in full force and effect. Seller has paid in
full all currently due franchise fees and other fees currently due under the
Franchises in connection with the operation of the Systems and is validly and
lawfully operating each System under the applicable Franchises. Seller has no
reason to believe that any of the Franchises would not be renewed by the
granting authority in the ordinary course. Seller has not made, and to the
best of Seller's knowledge no prior owner of the Systems has made, any
commitments (oral or written) to any Municipality or other governmental
authority with respect to any of the Systems other than those contained in the
Franchises.

(b) Seller has not submitted timely renewal
notices under subsection (a) through (g) of Section 626(a) of the
Communications Act of 1984, as amended (47 U.S.C. Section 546(a)) initiating
formal renewal proceedings for any of its cable television franchises having a
remaining term of thirty-six (36) months or less as of the date of this
Agreement and as of the date of Closing. Seller has provided and will provide
the Purchaser with copies of any proposals for renewal, preliminary assessments
and franchisor determinations described in Subsection (c) of said Section 626
if any have been so prepared.

4.11 Contracts. Schedule 2 sets forth all
non-governmental permits and authorizations, leases, pole attachment contracts,
retransmission consent agreements, crossing agreements, apartment access
agreements, other multiple unit dwelling access agreements, private cable
agreements, equipment leasing agreements and all other material
non-governmental contracts to which Seller is a party or which are binding on
Seller and that are used or useful in connection with operation of the Systems
or relating to the operation of the Systems which are in effect on the date of
this Agreement (together with any such agreement or contract entered into by
Seller between the date of this Agreement and the Closing Date, the
"Contracts"), true and complete copies of which Seller has delivered to
Purchaser. All such Contracts are in full force and effect, and no default
exists under any such Contract. Except for the Contracts described on Schedule
2, the leases set forth on Schedule 3, the Franchises and the Governmental
Licenses, no other material contracts, agreements, permits or licenses are
required to own and operate the Systems as now operated other than agreements
for which the failure to hold the same would not have a Material Adverse
Effect. There are no material violations of any regulations relating to pole
attachments in the Systems, and all pole attachments comply in all material
respects with applicable laws and regulations, and comply in all material
respects with all requirements of the pole attachment contracts and the
National Electric Safety Code, and the Seller has not received any demand or
request from any utility or other pole owner to move, replace or change any of
its cable television plant; provided, however, The Pennsylvania Department of
Transportation has notified the Seller that it will begin to rebuild Route 219
around Myersdale, Pennsylvania, to Garrett, Pennsylvania, beginning in July,
1996. This will require the rebuilding of approximately 1.5 miles of cable
north of Myersdale toward Garrett. However utility pole owners have not
contacted the Seller because of uncertainty as to where to move the poles. It
is believed by the Seller that some of the expenses will be reimbursable.

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4.12 Access Agreements. The Seller has all required
authority to serve private developments and multiple dwelling units served by
the Systems, some of which are oral agreements. All written and oral
agreements to serve multiple dwelling units and private developments are valid
and in full force and effect. All such written or oral agreements are listed
or described on Schedule 2 hereof. No homeowners association, tenant's
association or multiple dwelling unit owner has provided any intention to
terminate any such agreement.

4.13 Rates. All rates charged by the Systems are lawfully
charged. No rate order is in effect or threatened, and no complaints have been
filed with the FCC regarding rates charged. None of the municipalities served
by the Systems has been certified to regulate rates charged by the Systems, or
has made any effort to regulate such rates.

4.14 Retransmission Consent. All broadcast signals
carried by the Systems are carried either pursuant to must-carry elections by
the broadcaster or pursuant to a written retransmission consent agreement
between the broadcaster and the Seller that will be properly assigned to
Purchaser on the Closing Date. No retransmission consent agreement requires a
cash payment by Seller or imposes other material onerous conditions. All
retransmission consent agreements are described on Schedule 2, copies of which
have been delivered by Seller to Purchaser.

4.15 Litigation. There is no judgment or order
outstanding, or any action, suit, proceedings or investigation by or before any
court or other governmental authority or any arbitrator pending, or to Seller's
knowledge, threatened, relating to the Seller or the Systems. Seller knows of
no intention of any person to revoke or modify any of the Franchises, Leases,
Governmental Licenses, or Contracts included in the Transferred Assets, to
bring any lawsuit relating to the Systems or to otherwise take any action that
could adversely affect the Systems, and Seller knows of no basis for any such
action by any person.

4.16 Taxes. Seller has properly filed all tax returns and
paid in full all taxes of every kind, including, without limitation, property
taxes, relating to the Systems, and all franchise fees. There are no legal,
administrative or tax proceedings pursuant to which Seller is or could be made
liable for any taxes, penalties, interest or other charges, the liability of
which could extend to Purchaser as transferee of the Systems and Transferred
Assets, and no event has occurred that could impose on Purchaser any transferee
liability for any taxes, penalties or interest due or to become due from
Seller.

4.17 Employment. Attached hereto as Schedule 6 is a
schedule showing the name and address of each person employed in the operation
of the Systems along with such person's current annual salary and any amounts
paid or payable to each such person as bonus payments, indirect and/or deferred
compensation or similar additional compensation payments for the fiscal year
ending December 31, 1995, and for the current period. Except as set forth in
Schedule 6 annexed hereto, Seller is not a party to and does not administer,
sponsor, maintain or contribute to:

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<PAGE> 12
(a) any union collective bargaining or similar
agreement involving employees of the Systems;

(b) any plan providing for pension benefits,
medical benefits, hospitalization, life insurance or other insurance, or any
other benefits to employees of the Systems;

(d) any similar arrangement for the benefit of
employees, whether for selected individuals or otherwise, of Seller or to which
Seller has contributed or is under an obligation to fund; or

(e) any "employee benefit plan" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").

Each employee benefit plan listed on Schedule 6 has been
administered in compliance with its own terms and with the provisions of ERISA,
the Internal Revenue Code of 1986, as amended (the "Code"), the Age
Discrimination in Employment Act, as amended, and any other laws applicable to
such plans. Without material exception, to the Seller's knowledge Seller has
complied and will comply with all applicable laws and regulations relating to
the employment of labor, including those related to wages, hours, collective
bargaining, discrimination, and the payment of Social Security or similar
taxes. To the Seller's knowledge, there are no unfair labor practice charges
or claims pending or threatened against Seller, nor to Seller's knowledge any
pending or threatened charges against Seller with respect to any wage and hour,
employment discrimination, or other statutory violation. To the best knowledge
of Seller, there is no union campaign being conducted to solicit cards from
employees to authorize a union to request an NLRB certification election with
respect to any employees of either System.

4.18 Overbuilds. None of the homes passed by the Systems
are (i) passed by cable television plant owned or operated by an entity other
than Seller or (ii) served by an MMDS or other wireless cable television system
(other than DBS); provided however, off Radford Road, there are approximately
six (6) pole spans utilized as transportation trunks only and there are no taps
in this line to feed customers and on Route 56 there are three (3) poles due to
change in the pole line. To the knowledge of Seller, there are no plans of any
Municipality or third party for the establishment of any additional community
antennae television systems, cable television stations or systems, multipoint
distribution systems, or other video distribution systems (other than national
DBS services) within the areas served by the Systems, and such areas are not
now served with cable television by any person or entity other than Seller.

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<PAGE> 13
4.19 Recent Developments; Conduct Through Closing. Since
December 31, 1994, Seller has conducted its business relative to the Systems
only in the ordinary course and substantially in the manner as heretofore and
has not and at the Closing Date will not have:

(a) Sold, transferred, leased to others, or
otherwise disposed of any of its assets material to the operation or
maintenance of the Systems except for inventory and/or services sold in the
ordinary course of business or for assets sold or disposed of and replaced by
other assets of comparable utility; canceled or compromised any debt or claim
relating to the Systems of material value; or waived, compromised or released
any right of material value;

(b) Suffered any damage, destruction or loss,
whether or not covered by insurance, which has materially and adversely
affected any of its assets or the Systems or their respective business
prospects; subject, however, to the proviso set forth in Section 4.11 hereof.

(c) Transferred or granted any right under, or
entered into any settlement regarding the breach or infringement of, any
license, patent, copyright, trademark, trade name, invention, franchise, or
similar rights, or modified, in any material respect, any existing right with
respect thereto relating to the Systems;

(d) Instituted, been named as a party to,
settled, or agreed to settle any litigation, action, or proceeding before any
court or governmental body relating to the Systems or its assets;

(e) Suffered any change, event, or condition
which has materially and adversely affected the condition (financial or
otherwise), properties, assets, liabilities, business, or prospects of Seller
or the Systems;

(f) Made any general uniform increase in the
compensation of employees of Seller employed at the Systems except for
increases made in the ordinary course of business consistent with Seller's past
practices.

4.20 Financial Statements. The fiscal year of Seller ends
December 31. True and correct copies of the financial statements of Seller as
of December 31, 1994 and 1995 are attached hereto as Schedule 7. Quarterly
internally prepared financial statements for the three months ended March 31,
1996 are also attached hereto as Schedule 7 (collectively the "Financial
Statements"). The Financial Statements have been prepared from and accurately
reflect the books, records and accounts of Seller with respect to the Systems
(which books, records and accounts are complete and correct and will properly
and accurately record the transactions and activities which they purport to
record through the Closing Date) and have been prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
that of prior years or periods and fairly present the financial position and
results of operation of the Systems on a consolidated basis as of said date and
for the period indicated in accordance with generally accepted accounting

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<PAGE> 14
principles. No event has occurred since the preparation of the statements
which would render any of them misleading in any material respect. None of the
Financial Statements understates the true costs and expenses of conducting the
business or operations of the Systems, fails to disclose any material
contingent liabilities or inflates the revenues of the Systems. Except to the
extent reflected or reserved against or otherwise disclosed in the foregoing
Financial Statements, Seller will not have any liabilities, debts or
obligations of any nature, whether absolute, accrued, contingent, known or
otherwise, whether due or to become due including, without limitation,
liabilities for taxes, except as incurred in the ordinary course of the
business of Seller or as set forth on Schedule 7. Since December 31, 1994,
Seller has not incurred any liabilities, debts or obligations other than in the
ordinary course of business and has properly recorded in its books of account
all items of income, expense and all other proper charges and accruals required
to be made in accordance with generally accepted accounting principles.

4.21 Brokerage. No broker has been engaged by Seller in
connection with the transaction contemplated hereby except Communication Equity
Associates, whose fees will be paid by Seller.

4.22 No Material Omission. There is no material
information concerning the Systems that could adversely affect the Systems
known by Seller that Seller has not disclosed to Purchaser in this Agreement.
No representation or warranty made by Seller in this Agreement or in any
certificate, document, agreement or other instrument furnished or to be
furnished by Seller pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
that is required to make any statement made herein or therein not misleading.

4.23 Consents; Absence of Conflicting Agreements. Subject
to obtaining the Consents listed on Schedule 10 or as otherwise disclosed on
Schedule 10, the execution, delivery, and performance of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (a) do not require the consent of, notice to or filing with
any governmental authority or any third party; (b) will not conflict with any
provision of the certificate of limited partnership or partnership agreement of
Seller; (c) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, ordinance, injunction, decree, rule,
regulation or ruling of any court or governmental instrumentality other than
such conflicts, breaches or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect, (d) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license or permit to which
Seller is a party or by which Seller or any of the Transferred Assets may be
bound; and (e) will not create any Lien upon any of the Transferred Assets.

4.24 Governmental Licenses. Each Governmental License is
listed in Schedule 5 hereto (including a description of such Governmental
License, and the issue and expiration dates thereof). Seller is the authorized
legal holder of each Governmental

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<PAGE> 15
License, each of which is valid and in full force and effect. Seller has
delivered to Purchaser true and complete copies of all such Governmental
Licenses, including any amendments thereto. No default exists under any
Governmental License, and Seller has no reason to believe that any of the
Governmental Licenses will not be renewed by the FCC or other granting
authority in the ordinary course.

4.25 Equipment. Schedule 1 lists all material items of
Equipment.

4.26 Intangibles. Schedule 11 is a true and complete list
of the Intangibles, all of which are valid and in full force and effect and
uncontested. Seller has delivered to Purchaser copies of all existing
documents that establish or evidence any of the Intangibles.

4.27 Insurance. Schedule 12 is a true and complete list
of all insurance policies of Seller that insure any part of the Transferred
Assets or the business of the Systems, all of which policies are in full force
and effect.

4.28 Transactions with Affiliates. Seller has not been
involved in any business arrangement or relationship relating to the Systems
with any affiliate of Seller, and no affiliate of Seller owns any property or
right, tangible or intangible, which is used in the business of the Systems.
As used in this paragraph, "affiliate" has the meaning given to such term in
Rule 12b-2 promulgated under the Securities and Exchange Act of 1934, as
amended.

5. Purchaser's Representations and Warranties. Purchaser
represents and warrants to Seller (which representations and warranties shall
survive the Closing) that:

5.1 Purchaser in good standing. The Purchaser is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware and is or on the Closing Date will be duly
qualified to do business as a foreign limited partnership in Ohio and
Pennsylvania.

5.2 Due Authorization. Purchaser has all requisite power
and authority (i) to own, lease, and use its properties and assets as now
owned, leased, and used and to conduct its business and operations as now
conducted, and (ii) to execute, deliver and perform this Agreement and the
documents contemplated hereby. The execution, delivery and performance of this
Purchase Agreement and the transactions contemplated hereby have been duly
authorized by all required partnership action of Purchaser, with all required
approvals of the Purchaser's partners.

5.3 Binding Obligation. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal, valid and
binding obligation of the Purchaser, enforceable against it in accordance with
its terms, except as the enforceability of this Agreement and the documents
contemplated hereby may be affected by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies.

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<PAGE> 16
6. Closing Date. The closing of the sale contemplated by this
Agreement (the "Closing") shall take place ten (10) days after the conditions
to Closing set forth at Section 8 below have been satisfied or waived (to the
extent permitted) and Purchaser has received a written notice from Seller to
that effect, or on such other date as the parties may mutually agree (the
"Closing Date"). The Closing shall be held at the offices of Dow, Lohnes &
Albertson, 1200 New Hampshire Avenue, N.W., Suite 800, Washington, D.C. 20036,
or any other place or by any other means (including by mail) that is agreed
upon by Purchaser and Seller. If all such conditions are not satisfied on or
before the 150th day following the date of this Agreement, Purchaser may, at
its option, terminate this Agreement pursuant to Section 13.3(a)(iii) of this
Agreement.

7. Closing Documents. Prior to or on the Closing Date, Seller
shall deliver or caused to be delivered to Purchaser the following, in form and
substance reasonably satisfactory to Purchaser and its counsel:

(a) Transfer Documents. Duly executed special warranty
deeds, bills of sale, motor vehicle titles, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Transferred Assets in the name of Purchaser, free and clear of all Liens.

(b) Consents and Estoppel Certificates. A manually
executed copy of any instrument evidencing receipt of any third-party or
governmental authority consent or approval; and estoppel certificates of the
lessors of leasehold or subleasehold interests included in the Real Property
Interests and estoppel certificates of the Municipalities issuing each
Franchise in form and substance reasonably satisfactory to Purchaser to the
effect that such Lease or Franchise, as the case may be, (i) is valid, in full
force and effect and not in default, (ii) to the extent required by such Lease
or Franchise, has been approved for assignment to Purchaser and (iii) may be
pledged as collateral to any present or future lender to Purchaser to secure
indebtedness.

(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Seller by the President of the
corporate general partner of Seller, certifying that the representations and
warranties of Seller contained in this Agreement are true and complete in all
respects at and as of the Closing Date as though made at and as of that date;
and (2) that Seller has performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date.

(d) Accounts Receivable. A complete and accurate list of
the Systems' accounts receivable as of a date no more than five business days
prior to the Closing Date, including, with respect to each of the accounts
receivable, the account number, date of issuance, name and address of account
debtor, aggregate amount, and balance due.

(e) Opinions of Counsel. Opinion of Seller's counsel,
addressed to Purchaser and its lender(s), dated as of the Closing Date,
substantially in the form of Exhibit

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<PAGE> 17
B attached hereto, and Opinion of Seller's FCC Counsel, addressed to Purchaser
and its lender(s), dated as of the Closing Date, substantially in the form of
Exhibit C attached hereto.

(f) Lien Searches and Releases. Satisfactory UCC, tax
and judgment searches dated as of a recent date prior to the Closing Date for
filings in those jurisdictions where the Transferred Assets are located and/or
where a filing would be required to perfect an interest or priority against the
Transferred Assets; and duly executed UCC-3 termination statements, mortgage
releases and such other release and termination instruments as Purchaser shall
reasonably request to release any Liens on the Transferred Assets.

(g) Secretary's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Seller by the Secretary of Seller's
general partner certifying that the resolutions, as attached to such
certificate, authorizing and approving the execution of this Agreement and the
consummation of the transaction contemplated hereby were duly adopted by the
Board of Directors of Seller's general partner and that such resolutions have
not been amended, rescinded or modified since their adoption and remain in full
force and effect.

(h) Indemnity Escrow Agreement. The Indemnity Escrow
Agreement duly executed by Seller.

(i) Noncompetition Agreements. Duly executed
Noncompetition Agreements as contemplated by Section 9.

(j) Good Standing Certificates. Copy of Good Standing
Certificate issued by the Secretary of State of the Commonwealth of
Pennsylvania certifying that Seller is in good standing and a copy of a Good
Standing Certificate issued by the Secretary of State of Ohio certifying that
Seller is duly qualified and in good standing as a foreign limited partnership
in such state.

8. Conditions to Purchaser's Obligations. Purchaser shall not be
obligated to close the purchase contemplated hereby unless the following
conditions (any of which may be waived by Purchaser in its sole discretion) are
satisfied:

(a) All required consents for the sale of the Transferred
Assets to Purchaser (regardless of whether such consent is listed on Schedule
10) shall have been duly obtained and shall contain no condition materially
adverse to Purchaser, including without limitation, (i) the consents of the
Municipalities, if legally required, for transfer of the Franchises, (ii) the
consent of the FCC, to the extent legally required, to the transfer of the
Governmental Licenses to Purchaser (and the time period for filing petitions
for reconsideration for such consent shall have passed), and (iii) the consents
of all landlords and Contract parties and other relevant parties.

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<PAGE> 18
(b) No material adverse change in the business,
operations, condition (financial or otherwise), properties, assets or
liabilities of the Transferred Assets or either System shall have occurred;

(d) Seller shall have delivered to Purchaser the closing
documents set forth in Section 7 of this Agreement;

(e) All representations and warranties of Seller set
forth in Section 4 above shall be true and complete as of the Closing Date as
if made again on such date, and Seller shall have performed and complied with
all of its obligations, covenants, and agreements set forth in this Agreement
to be performed and complied with on or prior to the Closing Date; and

(f) The Transferred Assets shall be free and clear of all
Liens, and all leases on equipment and vehicles shall have been paid off such
that clear title to such equipment and vehicles is delivered to Purchaser at
Closing.

Any one or more of the foregoing conditions may be waived by the Purchaser in
its discretion.

9. Noncompetition. As an inducement to cause Purchaser to enter
into this Agreement and to complete the transactions contemplated hereby, the
Seller and its general partners (and each officer and controlling stockholder
of any corporate general partner(s)) agree for the benefit of Purchaser and its
successors and assigns that they will not engage in any aspect of the video
distribution business (including cable television, MMDS, DBS, MDS, SMATV
anywhere in the areas served by the Systems or within 20 miles thereof for a
period of seven (7) years after the Closing Date, either as owner, employee,
investor, consultant, manager or otherwise. Each such person shall execute at
Closing in favor of Purchaser a non-competition agreement substantially in the
form attached hereto as Exhibit D reflecting the foregoing.

10. Access to Systems and Other Seller Covenants. From the date
hereof through the Closing Date, Seller shall permit Purchaser and its
representatives complete access to the Systems and the Seller's books and
records relating thereto, and will notify Purchaser promptly of any material or
unusual developments relating thereto and of any material change in any of the
information contained in Seller's representations and warranties contained in
Section 4 of this Agreement. All such information shall be confidential and
will not be divulged to any person or entity except the Purchaser's
professional advisors or as required by applicable law. From the date hereof
through Closing Seller will not make any change in the operation of the
Systems, will not change any rates charged by the Systems, and will operate the
Systems in the ordinary course of business in accordance with past practice,
such that all representations and warranties of Seller contained in this
Agreement

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<PAGE> 19
will be true and complete in all respects at and as of the Closing Date as
though made at and as of that date and in accordance with the following
covenants:

(a) Compensation. Seller shall not increase the
compensation, bonuses, or other benefits payable or to be payable to any person
employed in connection with the conduct of the business or operations of the
Systems, except in accordance with past practices.

(b) Contracts. Seller will not enter into any contract
or commitment relating to the Systems or the Transferred Assets, or amend or
terminate any Contract (or waive any material right thereunder), or incur any
obligation (including obligations relating to the borrowing of money or the
guaranteeing of indebtedness) that will be binding on Purchaser after Closing.

(c) Disposition of Assets; Liens. Seller shall not sell,
assign, lease, or otherwise transfer or dispose of any of the Transferred
Assets or create, assume or permit to exist any Lien whatsoever upon the
Transferred Assets.

11. Special Covenants and Agreements.

11.1 Filings with the FCC and Municipalities. As soon as
practicable, but in no event later than 15 days after the date of this
Agreement, the parties shall file with the FCC and any Municipalities from
which consent to the transactions contemplated by this Agreement is legally
required, all legally required applications requesting consent to such
transactions, and Purchaser and Seller shall take with due diligence all
reasonable steps necessary to expedite the processing of the application(s) and
to secure such consent or approval. Seller and Purchaser shall furnish each
other with any correspondence from or to, and notify each other of any other
communications with, the FCC and the Municipalities that relate to the
obtaining of such consents and approvals, and each party shall have the right
to participate in any hearings or proceedings before the FCC and the
Municipalities with respect to such consents and approvals. Each party shall
bear its own costs and expenses (including the fees and disbursements of its
counsel) in connection with the preparation of the portion of any such
application to be prepared by it and in connection with the processing of that
application. Notwithstanding the foregoing, the Purchaser shall have no
obligation to make any payment to any Municipality in assisting the Seller in
obtaining any of the consents or approvals described in this Section 11.1 or to
agree to any materially adverse change in any Franchise to be assigned to the
Purchaser. Any application to any Municipality or any other governmental
authority for any authorization, consent, order, or approval necessary for the
transfer of any Franchise shall be reasonably acceptable to the Purchaser.
Seller will not agree to any adverse change in any Franchise as a condition to
obtaining any authorization, consent, order or approval necessary for the
transfer of such Franchise without Purchaser's consent.

11.2 Other Consents. Seller shall use its best efforts,
and Purchaser shall assist Seller in all reasonable respects to obtain all
consents and approvals of third parties

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<PAGE> 20
required for the transfer to Purchaser of any of the Transferred Assets.
Notwithstanding the foregoing, the Purchaser shall have no obligation to make
any payment to any other party to any agreement in assisting Seller in
obtaining any of the consents, amendments, releases or agreements described in
this Section 11.2 or to agree to any adverse change in any agreement to be
assigned to the Purchaser.

11.3 Confidentiality. Except for such disclosure to
attorneys, accountants, bankers and investors as may be necessary for the
consummation of the transaction contemplated by this Agreement, and except as
and to the extent required by applicable law, each party will keep confidential
any confidential information obtained from the other party in connection with
the transactions contemplated by this Agreement. If this Agreement is
terminated, each party will return to the other party all documents,
information and other materials obtained by such party from the other party in
connection with the transactions contemplated by this Agreement. Any press
releases or other publicity relating to the transaction contemplated by this
Agreement shall be subject to prior review and coordination between Seller and
Purchaser, subject to their respective disclosure obligations under applicable
laws.

11.4 Cooperation. Purchaser and Seller shall cooperate
fully with each other and their respective counsel, accountants and other
representatives in connection with any actions required to be taken as part of
their respective obligations under this Agreement, and Purchaser and Seller
shall execute such other documents as may be necessary and desirable to the
implementation and consummation of this Agreement, and otherwise use their
reasonable best efforts to consummate the transaction contemplated hereby and
to fulfill their obligations under this Agreement. After Closing, Seller shall
deliver to Purchaser, as received from time to time, any cash or other property
that it may receive relating to the business and operations of the Systems and
Transferred Assets arising on or after the Closing Date and in respect of the
accounts receivable.

11.5 Other Negotiations. From the date of this Agreement
until the earlier of the Closing or the termination of this Agreement in
accordance with its terms, (a) Seller shall not solicit any offer from any
other person for any form of business combination or acquisition or disposition
of all or any material part of the Transferred Assets or the Systems, nor shall
Seller initiate or enter into any negotiations or provide confidential
information with respect to any such business combination or acquisition
without the consent of Purchaser, (b) Seller shall not solicit any offer from
any other person for any transaction involving Seller that would preclude or in
any way interfere with the consummation of the transactions contemplated by
this Agreement, nor shall Seller initiate or enter into any negotiations or
provide confidential information with respect to any such transaction without
the consent of Purchaser, and (c) Seller shall not authorize any
representative, agent, officer, director or partner to take, and Seller shall
use its best efforts to prevent any such person or entity from taking, any of
the actions prohibited in this paragraph. Nothing contained in this Section
11.5 shall prohibit Seller from responding to any unsolicited proposal or
inquiry by advising the person or entity making such proposal or inquiry of the
terms of this Section 11.5.

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<PAGE> 21
11.6 Employee Transition. Purchaser shall not become the
employer of, nor shall Purchaser assume any liability or obligation to or in
connection with, any employee or former employee of either System, and nothing
in this Agreement shall be construed as a commitment or obligation of Purchaser
to accept, or otherwise continue, the employment of any employees of the
Systems. Without limiting the generality of the foregoing, Seller shall remain
solely responsible for any and all obligations and liabilities, including,
without limitation, those pursuant to the Code, ERISA and any and all federal,
state and local discrimination laws, in respect of any of the employees or
former employees of either System and their respective beneficiaries and
dependants, relating to or arising in connection with, during the course of or
as a result of (i) the employment or the actual or constructive termination of
employment of any such employee by such employee's current employer (including,
without limitation, in connection with the consummation of this Agreement);
(ii) the participation in or accrual of benefits or compensation under, or the
failure to participate in or to accrue compensation or benefits under, any
Employee Benefit Plan (as such term is defined in ERISA) of such employee's
current employer or any of its affiliates; (iii) accrued but unpaid salaries,
wages, bonuses, incentive compensation, vacation or sick pay or other
compensation or payroll items (including, without limitation, deferred
compensation). This Section 11.6 shall operate exclusively for the benefit of
the parties to this Agreement and not for the benefit of any other person or
entity, including without limitation, any employee or former employee of either
System.

11.7 Delivery of Financial Information. Seller shall
furnish to Purchaser within 45 days after the end of each month ending between
the date of this Agreement and the Closing Date a statement of income and
expense for the month just ended for the Systems on a consolidated basis and
such other financial information (including information on payables and
receivables) as Purchaser may reasonably request. The income statements
delivered by Seller to Purchaser pursuant to this Section 11.7 shall be
prepared from the books and records of Seller with respect to the Systems in
accordance with generally accepted accounting principles consistently applied,
shall accurately reflect the books, records and accounts of the Systems, shall
be complete and correct in all material respects, and shall present fairly the
results of operations of the Systems on a consolidated basis for the periods
then ended. Promptly after the preparation thereof, Seller shall deliver to
Purchaser copies of any other financial statements, subscriber counts and other
operational data regularly prepared by Seller for its internal use. Seller
shall also provide Purchaser on a periodic basis with reports of capital
expenditures made with respect to the Systems.

11.8 Additional Financial Information.

(a) To the extent requested by Purchaser and
required by Securities and Exchange Commission ("SEC") Regulations S-K and S-X
to be included in any registration statement or other offering document (each a
"Registration Statement") proposed to be prepared by Purchaser, Seller agrees
to prepare or cause Seller's independent accountants to prepare the following
financial statements with respect to the Systems, and related management
discussions and analyses (collectively, the "Additional Financial Statements"),
conforming with the requirements specified in this Section 11.8:

- 21 -
<PAGE> 22
(i) Balance sheets as at December 31, 1994
and 1995, and income statements and statements of cash flows and changes in
equity for the years ended December 31, 1993, 1994, and 1995, together with the
required footnotes and the auditor's report thereon.

(ii) A balance sheet, income statement, and
statement of cash flows as of and for the quarter ended March 31, 1996,
together with the required footnotes.

(iii) A balance sheet, income statement, and
statement of cash flows as of and for each fiscal quarter subsequent to the
quarter ended March 31, 1996 and ending prior to the Closing Date, together
with the required footnotes.

(b) Seller shall prepare or cause Seller's
independent accountants to prepare the Additional Financial Statements within
forty-five days after Purchaser's request therefor.

(c) The Additional Financial Statements shall be
prepared from the books and records of Seller in accordance with generally
accepted accounting principles, consistently applied, and in the form required
by SEC Regulations S-K and S-X, so as to fairly present the financial
condition, results of operations, and cash flows of Seller for the periods
indicated, and, with respect to the quarterly financial statements required by
this Section 11.8, subject to normal year-end adjustments.

(d) To the extent required by SEC Regulation S-X,
the Additional Financial Statements shall be audited by Seller's independent
accountants. The cost of preparing all Additional Financial Statements and all
audits and reviews thereof shall be paid by Purchaser.

(e) Seller agrees to provide one or more audit
representation letters as to the information provided by Seller to its
independent accountants in connection with any audit required under this
Section 11.8. The representation letter will be in such form and make the
representations reasonably required by such independent accountants to enable
them to issue an opinion acceptable to the SEC for purposes of any Registration
Statement with respect to the audit of those Additional Financial Statements
required to be audited by SEC Regulations S-K and S-X and to be included in
such Registration Statement. Seller will cause its independent accountants to
provide all consents that are necessary for the inclusion of their opinion and
the Additional Financial Statements in any such Registration Statement.

- 22 -
<PAGE> 23
12. INDEMNIFICATION

12.1 Indemnification by the Seller.

The Seller shall indemnify the Purchaser against and hold it
harmless from any and all liabilities in respect of suits, proceedings,
demands, judgments, damages, expenses and costs (including, without limitation,
reasonable counsel fees and costs and expenses incurred in the investigation,
defense or settlement of any claims covered by this indemnity) (collectively,
the "Indemnifiable Damages") which the Purchaser may suffer or incur by reason
of (i) the inaccuracy or untruth of any of the representations and warranties
or breach of warranty or nonperformance of any covenant or agreement of the
Seller contained in this Agreement, or any document, certificate or agreement
delivered by Seller or its representatives pursuant hereto; (ii) any and all
liabilities or obligations of Seller resulting from its operation or ownership
of the Systems or the Transferred Assets prior to the Closing, including any
liabilities under the Franchises, Governmental Licenses or Contracts
transferred to Purchaser at Closing which relate to events occurring during
Seller's operation or ownership of the Systems prior to the Closing; (iii) any
liabilities of the Seller not being expressly assumed by the Purchaser pursuant
to Section 3 of this Agreement; (iv) any rate refund ordered for periods prior
to the Closing; (v) the failure of the parties to comply with the provisions of
any bulk sales law applicable to the transfer of the Transferred Assets, or
(vi) any claim for brokerage or agent's or finder's commissions or compensation
in respect of the transactions contemplated by this Agreement by any person
purporting to act on behalf of Seller. Without limiting the generality of the
foregoing, with respect to the measurement of Indemnifiable Damages, the
Purchaser shall have the right to be put in the same financial position as it
would have been in had each of the representations and warranties of the Seller
been true and correct or had the Seller not breached any such covenants,
representations, warranties or agreements.

12.2 Indemnification by the Purchaser.

The Purchaser shall indemnify the Seller against and hold it
harmless from any and all liabilities in respect of suits, proceedings,
demands, judgments, damages, expenses and costs (including, without limitation,
reasonable counsel fees and costs and expenses incurred in the investigation,
defense or settlement of any claims covered by this indemnity) (collectively,
the "Indemnifiable Damages") which the Seller may suffer or incur by reason of
(i) the inaccuracy or untruth of any of the representations and warranties or
breach of warranty of the Purchaser contained in this Agreement, or any
document, certificate or agreement delivered pursuant hereto; (ii) any
liability for claims made by third parties against the Seller resulting from
Purchaser's operation and ownership of the Systems after the Closing, or (iii)
by reason of the Purchaser's failure to satisfy the liabilities specifically
assumed by it pursuant to this Agreement. Without limiting the generality of
the foregoing, with respect to the measurement of the Indemnifiable Damages,
the Seller shall have the right to be put in the same financial position as
Seller would have been in had each of the

- 23 -
<PAGE> 24
representations and warranties of the Purchaser been true and correct or had
the Purchaser not breached any such covenants, warranties or agreements.

12.3 Notice and Right to Defend Third Party Claims.
Promptly, upon receipt of notice of any third party claim, demand or assessment
or the commencement of any suit, action or proceedings in respect of which
indemnity may be sought on account of an indemnity obligation contained in this
Section, the party seeking indemnification (the "Indemnitee") will promptly
notify the party from whom indemnification is sought (the "Indemnitor"), in
writing thereof. Except to the extent that the Indemnitor demonstrates that
the defense of such action is prejudiced thereby, the omission by such
Indemnitee to notify promptly the Indemnitor of any such claim or action shall
not relieve such Indemnitor from any liability which it may have to such
Indemnitee in connection therewith; on account of the indemnity obligations
contained in this Section. In case any claim, demand or assessment shall be
asserted or suit, action or proceeding commenced against an Indemnitee, and it
shall notify the Indemnitor of the commencement thereof, the Indemnitor, after
giving written notice to the Indemnitee acknowledging its potential liability
to the Indemnitee on account of its indemnity obligations hereunder and of its
election to assume the defense, conduct or settlement thereof, will be entitled
to participate therein, and to the extent that it may wish, to assume the
defense, conduct or settlement thereof, with counsel reasonably satisfactory to
the Indemnitee. After such notice from the Indemnitor to the Indemnitee of its
election to assume the defense, conduct, or settlement thereof, the Indemnitee
shall have the right to participate in the defense, conduct or settlement of
any such claim at its own expense, and the Indemnitor will not be liable to the
Indemnitee for any legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense, conduct or settlement thereof,
subject to reimbursement for actual out-of-pocket expenses incurred by the
Indemnitee as a result of a request by the Indemnitor. The Indemnitee will
cooperate with the Indemnitor in connection with any such claim, make
personnel, books and records relevant to the claim available to the Indemnitor,
and grant such authorization of power of attorney to the agents,
representatives and counsel of the Indemnitor as such Indemnitor may reasonably
consider desirable in connection with the defense of such claim. In the event
that the Indemnitor does not assume the defense, conduct or settlement of any
claim, demand, or assessment, or, within a reasonable time after notice from
the Indemnitee of any such claim for Indemnifiable Damages, shall fail to
defend such claim, the Indemnitee shall have the right to undertake the
defense, compromise or settlement of such claim, by counsel or other
representatives of its own choosing, on behalf of and for the account and risk
of the Indemnitor, and the Indemnitor shall be bound by the results obtained by
the Indemnitee with respect to such claim. In such event, the Indemnitor shall
pay to the Indemnitee, in addition to the other sums required to be paid
hereunder, any costs and expenses incurred by the Indemnitee in connection with
such defense, compromise or settlement as and when such costs and expenses are
so incurred. Anything in this Section 12.3 to the contrary notwithstanding,
with respect to any third party claim, (i) the Indemnitor shall not, without
the Indemnitee's written consent, settle or compromise any such claim or
consent to entry of any judgment which does not include as an unconditional
term thereof the giving by the third party claimant or the plaintiff to the
Indemnitee of a release from all liability in respect of such claim in form and
substance reasonably satisfactory to the Indemnitee, (ii) in the event

- 24 -
<PAGE> 25
that the Indemnitor undertakes defense of any such claim, the Indemnitor shall
have an obligation to keep the Indemnitee informed of the status of the defense
of such claim and furnish the Indemnitee with all documents, instruments and
information that the Indemnitee shall reasonably request in connection
therewith, and (iii) neither party shall dispose of, compromise or settle any
claim or action in a manner that is not reasonable under the circumstances and
in good faith.

12.4 Indemnity Escrow. On the Closing Date, Purchaser, Seller and
the Escrow Agent shall execute an Indemnity Escrow Agreement substantially in
the form attached hereto as Exhibit E (the "Indemnity Escrow Agreement"), in
accordance with which, on the Closing Date, Purchaser shall deposit Two Hundred
Fifty Thousand Dollars ($250,000) of the Purchase Price with the Escrow Agent
(all amounts held from time to time by the Escrow Agent pursuant to the
Indemnity Escrow Agreement in respect of such ($250,000), including any
interest or other earnings in respect of such deposits, the "Indemnity Funds")
in order to provide a fund for the payment of any claims for which Purchaser is
entitled to indemnification as provided in this Section 12. All funds and
documents deposited with the Escrow Agent pursuant to this Section 12.4 shall
be held and disbursed in accordance with the terms of the Indemnity Escrow
Agreement and the following provisions: (a) one-half of the Indemnity Funds not
then subject to outstanding indemnification claims of Purchaser under this
Agreement shall be released by the Escrow Agent to Seller on the first business
day following the three-month anniversary of the Closing Date; and (b) any
remaining Indemnity Funds not then subject to outstanding indemnification
claims of Purchaser under this Agreement shall be released by the Escrow Agent
to Seller on the first business day following the one year anniversary of the
Closing Date. Purchaser and Seller acknowledge that if Purchaser's claims for
Indemnifiable Damages exceed the Indemnity Funds, Seller and its successors and
assigns shall remain liable for such excess.

13. RISK OF LOSS; SURVIVAL OF WARRANTIES; TERMINATION

13.1 Risk of Loss. Any loss by reason of fire, explosion,
earthquake, windstorm, accident, flood, act of God, war, seizure or activities
of the armed forces, or other casualty, ordinary wear and tear excepted, of any
of the Transferred Assets at any time prior to the Closing shall be the
responsibility of Seller. If any such loss or damage is so substantial as to
prevent normal operation of any material portion of either System, Seller shall
immediately notify Purchaser in writing of that fact and shall apply the
proceeds of any insurance policy, judgment or award with respect thereto and
take all other commercially reasonable steps to repair, replace and/or restore
such property as soon as possible after the loss. If such loss or damage shall
be sufficiently substantial to preclude the restoration of any substantial part
of the Systems within thirty (30) days, or if such loss or damage materially
and adversely affects the value of the Transferred Assets to the extent of more
than Fifty Thousand Dollars ($50,000.00), Seller shall immediately notify
Purchaser in writing. Purchaser, at any time within fifteen (15) days after
receipt of such notice may elect to either (a) accept the proceeds of any
insurance coverage and consummate the transactions contemplated by this
Agreement, or (b) terminate this Agreement. If Purchaser elects to consummate
the transactions contemplated by this Agreement, the Purchase Price

- 25 -
<PAGE> 26
shall be reduced by the amount of such loss or damage not compensated by
insurance proceeds accepted by Purchaser on or before the Closing Date,
provided that Seller shall not be obligated to close if the loss exceeds
$200,000 unless Purchaser agrees to limit the price reduction to $200,000.

13.2 Survival of Warranties. All representations and
warranties and pre-closing covenants made by Seller and Purchaser in this
Agreement shall survive the Closing until twelve (12) months after the Closing
Date, except that the representations in Section 4.4 (title) and 4.16 (taxes)
hereof shall survive for the applicable period of limitations, in each case
regardless of any investigation that may have been made or may be made at any
time by or on behalf of Purchaser and regardless of any notice or information
that may have been delivered or may be delivered to Purchaser. Any
representation or warranty which is the subject of a claim or dispute asserted
in writing prior to the expiration of the applicable of the above-stated
periods shall survive with respect to such claim or dispute until the final
resolution thereof.

13.3 Termination Rights.

(a) This Agreement may be terminated by either
Purchaser or Seller, if the party seeking to terminate is not in material
default or breach of this Agreement, upon written notice to the other party
specifying such termination upon the occurrence of any of the following:

(i) if, prior to the Closing Date, the
other party hereto breaches any of its
representations or warranties (or any such
representation or warranty shall become untrue) or
defaults in any material respect in the observance or
in the due and timely performance of any of its
covenants or agreements herein contained and such
breach or default shall not be cured within thirty
(30) days of the date of notice of default served by
the party claiming such breach or material default.

(ii) if there shall be in effect any
final judgment, decree or order that would prevent or
make unlawful the Closing contemplated by this
Agreement;

(iii) if the Closing shall not have
occurred on or before the 150th day following the
date of this Agreement.

(b) This Agreement may be terminated by Purchaser
pursuant to Section 13.1.

(c) This Agreement may be terminated by Purchaser
on or prior to the thirtieth (30th) day following the date of this Agreement if
Purchaser is not satisfied in its reasonable discretion with the results of its
due diligence review of the Systems, the

- 26 -
<PAGE> 27
Transferred Assets and the accounting records and financial data of Seller with
respect to the Systems and Transferred Assets.

13.4 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 13.3, all obligations of the
parties hereunder shall terminate, except for the respective obligations of the
parties under Section 2.2 and Section 11.3; provided, however, that no
termination of this Agreement shall (a) except as set forth in Section 13.5,
relieve a defaulting or breaching party from any liability to the other party
for or in respect of such default or breach or (b) result in the rescission of
any transaction theretofore consummated hereunder. Upon termination of this
Agreement, except as provided in Section 13.5, Purchaser shall be entitled to
the Escrow Deposit (together with all interest and earnings thereon) and
Purchaser and Seller shall instruct the Escrow Agent to pay the Escrow Deposit
and such interest and earnings to Purchaser.

13.5 Liquidated Damages. In the event of the termination
of this Agreement by Seller pursuant to Section 13.3(a)(i) or pursuant to
Section 13.3(a)(iii) (provided, in the case of termination pursuant to Section
13.3(a)(iii), that the Closing failed to occur on or before the 150th day
following the date of this Agreement, solely by reason of Purchaser's material
breach or material default of this Agreement) and if Seller is not then in
breach or default of this Agreement, Seller shall receive as liquidated
damages, for the breach by Purchaser and as full settlement of any damages of
any nature or kind that Seller may suffer or allege to have suffered as a
result of any such breach by Purchaser, and not as a penalty, the Escrow
Deposit. In the event Seller is entitled to receive the Escrow Deposit as
liquidated damages as set forth in this Section 13.5, Seller shall be precluded
from exercising any other right or remedy available under this Agreement,
applicable law or otherwise. Seller and Purchaser agree in advance that actual
damages would be difficult to ascertain and that the amount of $75,000 is a
fair and equitable amount to reimburse Seller for damages sustained due to
Purchaser's breach of this Agreement.

13.6 Attorney's Fees. In any action or proceeding brought
by a party to the Agreement to enforce any provision of this Agreement, the
prevailing party shall be entitled to recover all reasonable costs and expenses
incurred, including reasonable attorney's fees, in connection with that action
or proceeding and including all appellate proceedings.

14. MISCELLANEOUS

14.1 Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when received by personal delivery, commercial overnight delivery
service or certified or registered mail or telecopy at the addresses set forth
on the first page of this Agreement or to such other address or to such other
persons as Purchaser or Seller shall have last designated by written notice to
the other parties in accordance with this provision.

14.2 Benefits. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective successors and assigns,
except that Seller may not assign

- 27 -
<PAGE> 28
any of its rights or duties hereunder. Purchaser may assign its rights
hereunder to an affiliated entity or to one or more lenders making loans to it
and may assign its rights under Article 12 to any person or entity to whom
Purchaser sells all or any material part of the Transferred Assets or Systems.

14.3 Further Assurances. The parties agree that they
shall execute and deliver any and all additional writings, instruments, and
other documents contemplated hereby or referred to herein and shall take such
further action as shall be reasonably required in order to effectuate the terms
and conditions of this Agreement.

14.4 Governing Law. This Agreement shall be governed by
and construed according to the laws of the Commonwealth of Pennsylvania.

14.5 Transfer Taxes. All sales and other taxes due on
account of the sale of the Transferred Assets, including any sales tax, and
fifty percent (50%) of real estate transfer taxes, shall be paid by the Seller.

14.6 Modification. This Agreement shall not be amended,
modified or supplemented at any time unless by writing executed by the parties
hereto, provided, however, the Purchaser may assign its rights and obligations
under this Agreement to any affiliate or nominee prior to the Closing and shall
designate such assignee promptly following the date hereof so as not to hinder
the transfer of the Transferred Assets hereunder. No amendment, supplement or
termination of this Agreement shall affect or impair any rights or obligations
which have heretofore matured hereunder.

14.7 Article Headings. The article headings contained in
this Agreement are for reference purposes only, and shall not affect the
meaning or interpretation of this Agreement.

14.8 Specific Performance. Both Purchaser and Seller
agree that damages would be inadequate remedy for breach by Seller of its
representations, warranties, covenants and obligations set forth in this
Agreement, and that Purchaser may have specific performance as a remedy for any
breach by Seller of its obligations under this Agreement. This Section 14.8
shall not limit Purchaser's remedies at law or in equity.

14.9 Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements, oral or written.

14.10 Costs and Expenses. Except as otherwise contemplated
by this Agreement, Purchaser and Seller shall each pay any and all of their own
costs and expenses, including attorneys' fees, relating to the execution and
delivery of this Agreement and the consummation of all transactions
contemplated herein. Except as provided in Section 14.5, each party will also
pay any non-tax fees imposed by law upon it in connection with the transactions
pursuant hereto. Purchaser and Seller shall each pay one-half of all Escrow

- 28 -
<PAGE> 29
Agent fees. Purchaser shall pay the costs of obtaining the tax, lien and
judgment searches to be delivered by Seller pursuant to Section 7.

14.11 Cumulative Rights; Waiver. Except as set forth in
Section 13.5, each and every right granted to a party hereunder, or in any
other documents contemplated hereby, or delivered hereunder or executed
concurrently herewith, or by law or equity, shall be cumulative and may be
exercised at any time, or from time to time, and no failure on the part of any
party to exercise, and no delay in exercising, any right shall operate as a
waiver thereof, nor shall any single or partial exercise by any party of any
right preclude any other or future exercise thereof or the exercise of any
other right. The failure of any party at any time, or from time to time, to
require performance by any other party of any term, condition or provision of
this Agreement shall in no way alter or otherwise affect the right of such
party at a later time to enforce the same. This Agreement and any of its
provisions may not be waived except in writing. No waiver by any part of any
condition or of the breach of any term, covenant or provision at any time or
from time to time, shall be deemed to be or be construed as a further or
continuing waiver of any such condition or breach or as a waiver of any other
condition or of any other or subsequent breach of the same or any other term,
covenant or provision.

14.12 Counterparts. This Agreement may be executed in two
counterparts, each of which will be deemed an original, but both of which
together shall constitute one and the same instrument.

- 29 -
<PAGE> 30
IN WITNESS WHEREOF, the parties have entered this Purchase Agreement
as of the day and year first written on the first page hereof.

<TABLE>
<S> <C>
SELLER:
------

ATTEST: PENN/OHIO CABLEVISION, L.P.
- ------

By: SRW, Inc., its general partner

/s/ JOHN P. WEIDMAN, SEC.
- ------------------------------------
John P. Weidman, Secretary
By: /s/ RICHARD L. SNYDER, PRES.
---------------------------------------
Richard L. Snyder, President

PURCHASER:
---------

FRONTIERVISION OPERATING
PARTNERS, L.P.
ATTEST: By: FrontierVision Partners, L.P., its
- ------ general partner
By: FVP GP, L.P., its general partner
By: FrontierVision Inc., its general partner

/s/ JAMES W. MCHOSE
- ------------------------------------
James W. McHose, VP & Treasurer
By: /s/ JAMES C. VAUGHN
---------------------------------------
James C. Vaughn, President
</TABLE>

- 30 -
<PAGE> 31
Schedules

Schedule 1 - Equipment
Schedule 2 - Contracts
Schedule 3 - Real Property
Schedule 4 - Franchises
Schedule 5 - Governmental Licenses
Schedule 6 - Employees; Employment Matters
Schedule 7 - Financial Statements
Schedule 8 - Fictitious and Trade Names
Schedule 9 - Rate Schedule
Schedule 10 - Consents
Schedule 11 - Intangibles
Schedule 12 - Insurance
Schedule 13 - Excluded Assets
Schedule 14 - FCC Compliance

Exhibits

Exhibit A - Form of Escrow Agreement
Exhibit B - Form of Opinion of Counsel to Seller
Exhibit C - Form of Opinion of FCC Counsel to Seller
Exhibit D - Form of Noncompetition Agreement
Exhibit E - Form of Indemnity Escrow Agreement

- 31 -

<PAGE> 1
EXHIBIT 10.14

AMENDMENT NO. 1

AMENDMENT NO. 1 dated as of July 23, 1996, between FRONTIERVISION
OPERATING PARTNERS, L.P., a limited partnership duly organized and validly
existing under the laws of the State of Delaware (the "Company"), and each of
the lenders that is a signatory hereto identified under the caption "Lenders"
on the signature pages hereto.

The Company, certain lenders, The Chase Manhattan Bank, as
Administrative Agent, J.P. Morgan Securities Inc., as Syndication Agent and
CIBC Inc., as Managing Agent are parties to an Amended and Restated Credit
Agreement dated as of April 9, 1996 (the "Credit Agreement"), providing,
subject to the terms and conditions thereof, for loans to be made by said
Lenders to the Company in an aggregate principal or face amount not exceeding
$265,000,000.

The Company has requested that the Credit Agreement be modified in
certain respects and, accordingly, the parties hereto hereby agree as follows:

Section 1. Definitions. Except as otherwise defined in this
Amendment No. 1, terms defined in the Credit Agreement are used herein as
defined therein.

Section 2. Amendment. Subject to the execution and delivery of this
Amendment No. 1 by the Company and Lenders constituting the "Majority Lenders"
under the Credit Agreement, Section 8.05(c)(vi) of the Credit Agreement is
hereby amended by deleting the reference therein to "May 31, 1996" and
inserting "December 31, 1996" in its place.

Section 3. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 1 may be executed in any number of counterparts, all of which taken
together shall constitute one and the same amendatory instrument and any of the
parties hereto may execute this Amendment No. 1 by signing any such
counterpart. This Amendment No. 1 shall be governed by, and construed in
accordance with, the law of the State of New York.

<PAGE> 2
- 2 -

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
1 to be duly executed and delivered as of the day and year first above written.

FRONTIERVISION OPERATING
PARTNERS, L.P.

By: FrontierVision Partners, L.P., as general
partner of FrontierVision Operating Partners,
L.P.

By: FVP GP, L.P., as general partner of
FrontierVision Partners, L.P.

By: FrontierVision Inc., as
general partner of FVP GP,
L.P.

By: /s/ John S. Koo
-------------------------------
Title: Senior Vice President and
Chief Financial Officer

<PAGE> 3
- 3 -

LENDERS

THE CHASE MANHATTAN BANK MORGAN GUARANTY TRUST COMPANY
OF NEW YORK

By /s/ Constance M. Coleman By
------------------------- ----------------------------
Title: Vice President Title:

CIBC INC. FIRST NATIONAL BANK OF CHICAGO

By /s/ Martin Friedman By /s/ Jeffrey A. Bakalar
------------------------- ----------------------------
Title: Managing Director, Title: Vice President
CIBC
Wood Gundy Securities
Corp., as Agent
for CIBC Inc.

UNION BANK, a division of Union BANK OF MONTREAL
Bank of California, N.A

By /s/ B. Adam Trout By /s/ Yvonne Bos
------------------------- ----------------------------
Title: Assistant Vice President Title: Senior Vice President

FLEET NATIONAL BANK VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST

By /s/ illegible By /s/ Jeffrey W. Maillet
------------------------- ----------------------------
Title: Title: Senior Vice
President Portfolio
Manager

CHL HIGH YIELD LOAN PORTFOLIO, THE LONG-TERM CREDIT BANK OF
a unit of The Chase Manhattan JAPAN, LTD., LOS ANGELES
Bank AGENCY

By /s/ Andrew D. Gordon By /s/ Morgan Edwards
------------------------- ----------------------------
Title: Managing Director Title: Deputy General Manager

<PAGE> 4
- 4 -

PILGRIM PRIME RATE TRUST BANQUE FRANCAIS DU COMMERCE
EXTERIEUR

By /s/ Thomas C. Hunt By /s/ Brian Cumberland
------------------------- ----------------------------
Title: Portfolio Analyst Title:

By /s/ Frederick K. Kammler
----------------------------
Title: Vice President

MERRILL LYNCH SENIOR FLOATING PROTECTIVE LIFE INSURANCE
RATE FUND, INC. COMPANY

By /s/ R. Douglas Henderson By /s/ Mark K. Okada
------------------------- ----------------------------
Title: Authorized Secretary Title: Principal
Protective Asset
Management Co.

CITIZEN'S BANK INDOSUEZ CAPITAL FUNDING II,
LIMITED

By Indosuez Capital as
Portfolio Advisor
By /s/ Edward C. Thaute
-------------------------
Title: Vice President
By /s/ Andrew Marshak
----------------------------
Title: Authorized Secretary

MERRILL LYNCH PRIME RATE COOPERATIVE CENTRALE
PORTFOLIO RAIFFEISEN-BOERENLEENBANK
By: Merrill Lynch Asset B.A., "RABOBANK NEDERLAND",
Management, L.P., as NEW YORK BRANCH
Investment Advisor

By: /s/ Michel de Konkoly Thege
-----------------------------
Deputy General Manager

By: /s/ R. Douglas Henderson By: /s/ William H. Welch
------------------------- ---------------------------
Title: Authorized Secretary Title: Vice President and
Manager

<PAGE> 1

EXHIBIT 12

FrontierVision Operating Partners, L.P.
Computation of Ratio of Earnings to Fixed Charges
(Dollars in thousands)

<TABLE>
<CAPTION>
PRO FORMA FOR THE
TRANSACTIONS AND PRO FORMA FOR THE
THE EXISTING AND TRANSACTIONS AND
ACQUISITION SYSTEMS FOR THE PERIOD THE EXISTING AND
FOR THE SIX FOR THE SIX FROM INCEPTION ACQUISITION SYSTEMS
MONTHS ENDED MONTHS ENDED (APRIL 17, 1995) TO FOR THE YEAR ENDED
JUNE, 30 1996 JUNE 30, 1996 DECEMBER 31, 1995 DECEMBER 31, 1995
-------------- ------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Net Income (Loss) $ (8,293) $ (22,305) $ (2,703) $ (47,766)

Add (Deduct): - - - -
Income Tax Provision (Benefit)

Less: Minority Interest - - - -
----------- ------------ ------------- --------------

Pre Tax Income (Loss) (8,293) (22,305) (2,703) (47,766)
----------- ------------ ------------- --------------
Add: Fixed Charges
Interest 6,990 19,880 2,488 39,750

Amortization of debt offering
expenses 314 770 69 1,539
----------- ------------ ------------- --------------

Total fixed charges 7,304 20,650 2,557 41,289
----------- ------------ ------------- --------------

$ (989) $ (1,655) $ (146) $ (6,477)
=========== ============ ============= ==============

Fixed Charges $ 7,304 $ 20,650 $ 2,557 $ 41,289
=========== ============ ============= ==============

Ratio of Earnings to Fixed
Charges N/A N/A N/A

Deficiency of Earnings to Fixed
Charges $ 8,293 22,305 $ 2,703 $ 47,766
</TABLE>

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated April 9, 1996 on the financial statements of FrontierVision Operating
Partners, L.P., included in or made part of this Form S-1 registration
statement.

ARTHUR ANDERSEN LLP

Denver, Colorado,
September 10, 1996

<PAGE> 1
EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated September 5, 1996 on the balance sheet of FrontierVision Capital
Corporation, included in or made part of this Form S-1 registration statement.

ARTHUR ANDERSEN LLP

Denver, Colorado
September 10, 1996

<PAGE> 1
EXHIBIT 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated April 9, 1996 on the consolidated balance sheet of FrontierVision
Partners, L.P., included in or made part of this Form S-1 registration
statement.

ARTHUR ANDERSEN LLP

Denver, Colorado
September 10, 1996

<PAGE> 1

EXHIBIT 23.4

[PIAKER & LYONS, P.C. LETTERHEAD]

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report dated May 7, 1996 on the financial statements of United Video
Cablevision, Inc. - Main and Ohio Divisions included in or made part of
FrontierVision Operating Partners, L.P.'s Form S-1 registration statement.

/s/ Piaker & Lyons, P.C.
PIAKER & LYONS, P.C.

Vestal, New York
September 10, 1996

<PAGE> 1
EXHIBIT 23.5

[WILLIAMS, ROGERS, LEWIS LETTERHEAD]

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the
use of our report dated March 11, 1996 on the financial
statements of C4 Media Cable Southeast, Limited Partnership
included in or made part of FrontierVision Operating Partners,
LP's Form S-1 registration statement.

/s/ WILLLIAMS, ROGERS, LEWIS & CO.
-----------------------------------
Williams, Rogers, Lewis & Co., P.C.
September 10, 1996

<PAGE> 1
EXHIBIT 23.6

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated February 27, 1996 on the financial statements of Triax Southeast
Associates, L.P. included in or made part of FrontierVision Operating Partners,
L.P.'s Form S-1 registration statement.

ARTHUR ANDERSEN LLP

Denver, Colorado,
September 10, 1996

<PAGE> 1

EXHIBIT 23.7

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 2 to Registration Statement
No. 333-09535 of FrontierVision Operating Partners, L.P. on Form S-1 of our
report dated March 15, 1996 (Except as to Note 1 which is dated August 1,
1996), relating to the financial statements of American Cable Entertainment of
Kentucky-Indiana, Inc. appearing in the Prospectus which is part of this
Registration Statement, and to the reference to us under the heading "Experts"
in such Prospectus.

Deloitte & Touche LLP

Stamford, Connecticut
September 10, 1996

<PAGE> 1

EXHIBIT 23.8

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 2 to Registration Statement
No. 333-09535 of FrontierVision Operating Partners, L.P. and FrontierVision
Capital Corporation of our report dated April 10, 1996 (relating to the
combined financial statements of the Ashland and Defiance Clusters), appearing
in the Prospectus, which is part of this Registration Statement, and to the
reference to us under the heading "Experts" in such Prospectus.

/s/Deloitte & Touche LLP

Atlanta, Georgia
September 10, 1996

<PAGE> 1

EXHIBIT 26

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

-----------------------
FORM T-1

STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

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

COLORADO NATIONAL BANK
(Exact name of trustee as specified in its charter)

NOT APPLICABLE 84-0173545
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. National Bank) Identification No.)

950 17TH STREET 80202
DENVER, COLORADO (Zip Code)
(Address of principal executive offices)

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

FRONTIERVISION OPERATING PARTNERS, L.P.
FRONTIERVISION CAPITAL CORPORATION
(Exact name of obligor as specified in its charter)

DELAWARE 84-1316775
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1777 SOUTH HARRISON STREET, SUITE P-200 80210
DENVER, COLORADO (Zip Code)
(Address of principal executive offices)

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

SENIOR SUBORDINATED NOTES
(Title of the indenture securities)
<PAGE> 2

1. GENERAL INFORMATION Furnish the following information as to the Trustee.

(a) Name and address of each examining or supervising authority to
which it is subject.

Comptroller of the Currency
Washington, D.C.

(b) Whether it is authorized to exercise corporate trust powers.

Yes

2. AFFILIATIONS WITH THE OBLIGOR If the obligor is an affiliate of the
Trustee, describe each such affiliation.

None

Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which
the Trustee acts as Trustee.

16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility.

Each of the exhibits listed below, other than Exhibit 6 and 7, are filed
with Securities and Exchange Commission as exhibits to Statement of
Eligibility under the Trust Indenture Act of 1939, as amended, in
connection with the Registration Statement of Ultimate Electronics, Inc.
File No. 33-88740, under the same exhibit number and are incorporated
herein by reference.

1. Copy of Articles of Association.

2. Copy of Certificate of Authority to Commence Business.

3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).

4. Copy of existing By-Laws.

5. Copy of each Indenture referred to in Item 4. N/A.

6. The consents of the Trustee required by Section 321(b) of the Act.

7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
<PAGE> 3

NOTE

The answers to this statement insofar as such answers relate
to what person have been underwriters for any securities of the obligor within
three years prior to the date of filing this statement, or what persons are
owners of 10% or more of the voting securities of the obligor, or affiliates,
are based upon information furnished to the Trustee by the obligor. While the
Trustee has no reason to doubt the accuracy of any such information, it cannot
accept any responsibility therefor.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of
1939, the Trustee, Colorado National Bank, an Association organized and
existing under the laws of the United States, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, and its seal to be hereunto affixed and attested on the 6th day of
September, 1996.

COLORADO NATIONAL BANK

[SEAL]

/s/ Gretchen L. Middents
------------------------
Gretchen L. Middents
Assistant Vice President

/s/ William W. MacMillan
- ------------------------
William W. MacMillan
Assistant Secretary
<PAGE> 4

EXHIBIT 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act
of 1939, the undersigned, COLORADO NATIONAL BANK hereby consents that reports
of examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.

Dated: September 6, 1996

COLORADO NATIONAL BANK

/s/ Gretchen L. Middents
------------------------
Gretchen L. Middents
Assistant Vice President
<PAGE> 5
EXHIBIT 7

<TABLE>
<S> <C> <C> <C>
COLORADO NATIONAL BANK Call Date: 06/30/96 ST-BK: 08-0380 FFIEC 032
P.O. BOX 5168 Page RC-1
DENVER, CO 80217 Vendor ID: D CERT: 03010 9

Transit Number: 10200002
</TABLE>

Consolidated Report of Condition for Insured
Commercial and State-Chartered Savings Banks for June 30, 1996

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.

Schedule RC - Balance Sheet

<TABLE>
<CAPTION>
C300
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCON
-------
a. Noninterest-bearing balances and currency and coin (1)___________________________0081. . 431,099 1.a
b. Interest-bearing BALANCES (2)____________________________________________________0071. . 0 1.b

2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A)_______________________1754. . 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)_____________________1773. . 548,752 2.b

3. Federal funds sold and securities purchased under agreements to resell:
a. Federal funds sold_______________________________________________________________0276. . 4,035 3.a
b. Securities purchased under agreements to resell__________________________________0277. . 0 3.b

4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCON
----
(from Schedule RC-C___________________________________2122. . 5,600,384 . . . . . 4.a
b. LESS: Allowance for loan and lease losses_____________3123. . 94,575 . . . . . 4.b
c. LESS: Allocated transfer risk reserve________________3128. . 0 . . . . . 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c)______________________________2125. . 5,505,809 4.d

5. Trading assets (from Schedule RC-D)__________________________________________________3545. . 0 5.

6. Premises and fixed assets (including capitalized leases)_____________________________2145. . 67,243 6.

7. Other real estate owned (from Schedule RC-M)_________________________________________2150. . 3,012 7.

8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M)_______________________________________________________________________2130. . 0 8.

9. Customers' liability to this bank on acceptances outstanding_________________________2155. . 3,336 9.

10. Intangible assets (from Schedule RC-M)_______________________________________________2143. . 14,904 10.

11. Other assets (from Schedule RC-F)____________________________________________________2160. . 113,098 11.

12. Total assets (sum of items 1 through 11)_____________________________________________2170. . 6,691,288 12.
</TABLE>

- --------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading

<PAGE> 6
<TABLE>
<S> <C> <C> <C>
COLORADO NATIONAL BANK Call Date: 06/30/96 ST-BK: 08-0380 FFIEC 032
P.O. BOX 5168 Page RC-2
DENVER, CO 80217 Vendor ID: D CERT: 03010 10

Transit Number: 10200002
</TABLE>

Schedule RC - Continued

<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of ----
columns A and C from Schedule RC-E)_______________________________________2200. . 5,109,723 13.a
RCON
----
(1) Noninterest-bearing (1)_______________________6631. . 1,432,033 . . . . 13.a.1
(2) Interest-bearing______________________________6636. . 3,677,690 . . . . 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs_____________ . . . .
(1) Noninterest-bearing__________________________________________________ . . . .
(2) Interest-bearing_____________________________________________________ . . . .
14. Federal funds purchased and securities sold under agreements to repurchase:
a. Federal funds purchased___________________________________________________0278. . 404,780 14.a
b. Securities sold under agreements to repurchase____________________________0279. . 28,595 14.b

15. a. Demand notes issued to the U.S. Treasury__________________________________2840. . 0 15.a
b. Trading liabilities (from Schedule RC-D)__________________________________3548. . 0 15.b

16. Other borrowed money:
a. With a REMAINING maturity of one year or less_____________________________2332. . 301,373 16.a
b. With a REMAINING maturity of more than one year___________________________2333. . 102,479 16.b

17. Mortgage indebtedness and obligations under capitalized leases________________2910. . 2,603 17.

18. Bank's liability on acceptances executed and outstanding______________________2920. . 3,336 18.

19. Subordinated notes and debentures_____________________________________________3200. . 172,400 19.

20. Other liabilities (from Schedule RC-G)________________________________________2930. . 137,669 20.

21. Total liabilities (sum of items 13 through 20)________________________________2948. . 6,262,958 21.

22. Limited-life preferred stock and related surplus______________________________3282. . 0 22.

EQUITY CAPITAL
23. Perpetual preferred stock and related surplus_________________________________3838. . 0 23.

24. Common Stock__________________________________________________________________3230. . 89,977 24.

25. Surplus (exclude all surplus related to preferred stock)______________________3839. . 172,200 25.

26. a. Undivided profits and capital reserves____________________________________3632. . 167,798 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities____8434. . ( 1,645) 26.b

27. Cumulative foreign currency translation adjustments___________________________ . . . .

28. Total equity capital (sum of items 23 through 27)_____________________________3210. . 428,330 28.

29. Total liabilities, limited-life preferred stock, and equity capital
(sum of items 21, 22, and 28)_________________________________________________3300. . 6,691,288 29.

MEMORANDUM

TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external auditors as of any
date during 1995________________________________________________________________6724. . N/A M.1
</TABLE>

1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work

- -----------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.

<ARTICLE> 5
<CIK> 0001020291
<NAME> FVOP
<MULTIPLIER> 1,000

<S> <C> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996 DEC-31-1995
<PERIOD-START> JUL-14-1995 JAN-01-1996 JAN-01-1995
<PERIOD-END> DEC-31-1995 JUN-30-1996 JUN-30-1995
<CASH> 2650 1409 0
<SECURITIES> 0 0 0
<RECEIVABLES> 2065 3441 0
<ALLOWANCES> (40) (42) 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 2226 4303 0
<PP&E> 42917 120403 0
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 143512 320511 0
<CURRENT-LIABILITIES> 3526 6629 0
<BONDS> 97105 226530 0
0 0 0
0 0 0
<COMMON> 0 0 0
<OTHER-SE> 46407 93981 0
<TOTAL-LIABILITY-AND-EQUITY> 143512 320511 0
<SALES> 4369 27539 0
<TOTAL-REVENUES> 4369 27539 0
<CGS> 0 0 0
<TOTAL-COSTS> 2311 13668 0
<OTHER-EXPENSES> 127 1265 0
<LOSS-PROVISION> 940 0 131
<INTEREST-EXPENSE> 1386 7304 0
<INCOME-PRETAX> (2703) (8293) (131)
<INCOME-TAX> 0 0 0
<INCOME-CONTINUING> (2703) (8293) (131)
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (2703) (8293) (131)
<EPS-PRIMARY> 0 0 0
<EPS-DILUTED> 0 0 0

</TABLE>