Exhibit 10.7

 

KNOLOGY, INC.

 

SERIES AA PREFERRED STOCK PURCHASE AGREEMENT

 

This Series AA Preferred Stock Purchase Agreement (this “Agreement”) is entered
into as of May 4, 2005, by and among Knology, Inc., a Delaware corporation (the
“Company”), and each of those persons and entities, severally and not jointly,
whose names are set forth on the Schedule of Purchasers attached hereto as
Exhibit A (collectively, the “Original Purchasers” and individually an “Original
Purchaser”).

 

The parties hereto acknowledge and agree that additional purchasers may execute
counterpart signature pages to this Agreement after the date hereof but prior to
the Closing (collectively, the “Additional Purchasers” and individually an
“Additional Purchaser”) and Exhibit A shall be updated at the Closing to include
the names of such Additional Purchasers. The term “Purchasers” as used in this
Agreement shall include the Original Purchasers and the Additional Purchasers,
if any.

 

In consideration of the mutual promises hereinafter set forth, the parties
hereto agree as follows:

 

1 AGREEMENT TO SELL AND PURCHASE

 

1.1 Authorization of Shares.

 

On or prior to the Closing (as defined in Section 2 below), the Company shall
have authorized the sale and issuance to the Purchasers of shares of its Series
AA Convertible Preferred Stock, par value $0.01 per share (“Series AA Preferred
Stock”), having the rights, preferences, limitations, and restrictions as
substantially set forth in the Certificate of Designations attached hereto as
Exhibit B, together with such changes as the Company may negotiate with any
Additional Purchasers prior to the Closing, subject to the approval of the Board
of Directors of the Company (the “Certificate”). The Series AA Preferred Stock
is convertible into shares of the Company’s Common Stock, par value $0.01 per
share (“Common Stock”), as provided in the Certificate. The shares of Series AA
Preferred Stock sold and issued hereunder are referred to herein as the
“Shares.”

 

1.2 Sale and Purchase.

 

Subject to the terms and conditions hereof, the Company hereby agrees to issue
and sell to each Purchaser, and each Purchaser severally and not jointly agrees
to purchase from the Company, the number of Shares set forth opposite such
Purchaser’s name on Exhibit A under the heading “Total Number of Shares,” for a
purchase price of ten dollars ($10.00) per Share (the “Purchase Price”).

 

2 CLOSING, DELIVERY AND PAYMENT

 

2.1 Closing.

 

The closing of the sale and purchase of the Shares under this Agreement (the
“Closing”) shall take place at 10:00 a.m. on the date that the conditions set
forth in Sections 5.1 and 5.2 have been satisfied or, if waivable, waived by the
appropriate party to this Agreement, at the offices of Alston & Bird LLP, One
Atlantic Center, 1201 West Peachtree Street, Atlanta, Georgia 30309-3424, or at
such other time or place as the Company and the Purchasers may mutually agree
(such date is hereinafter referred to as the “Closing Date”).

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2.2 Delivery and Payment

 

At the Closing, subject to the terms and conditions hereof, the Company will
deliver to each Purchaser certificates, in form reasonably satisfactory to the
Purchasers, representing the number of Shares to be purchased by each such
Purchaser against payment of the Purchase Price therefor by wire transfer of
immediately available funds.

 

3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents and warrants to each Purchaser as follows:

 

3.1 Organization, Good Standing and Qualification.

 

The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and the
Registration Rights Agreement and Joinder Agreement contemplated by Section
5.1(j) hereof, to issue and sell the Shares and the shares of Common Stock
issuable upon conversion of the Shares (the “Conversion Shares”), to carry out
the other provisions of this Agreement, the Registration Rights Agreement and
the Joinder Agreement, and to own, lease and operate its assets and to carry on
its business as presently conducted. The Company is duly qualified or licensed
to transact business as a foreign corporation in good standing in the States of
the United States and foreign jurisdictions where the character of its assets or
the nature or conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to be so qualified
or licensed is not reasonably likely to have, individually or in the aggregate,
a Company Material Adverse Effect. For purposes of this Agreement, a “Company
Material Adverse Effect” shall mean an event, occurrence or circumstance
(including without limitation, any breach of a representation or warranty
contained herein) which would materially impair or delay the ability of the
Company to timely consummate the transactions contemplated by this Agreement or
which has a material adverse change in, or material adverse effect on, the
business, results of operations or financial condition of the Company and its
Subsidiaries, taken as a whole, but excluding any such change or effect
resulting from (a) general economic or securities market conditions, (b) any
occurrence or condition affecting generally the industries in which the Company
and its Subsidiaries operate that does not have a materially more adverse effect
than that experienced by similarly situated companies in such industries, (c)
the execution or announcement of this Agreement or the transactions contemplated
hereby, or (d) any acts taken with the consent or direction of the Purchasers.
“Company Subsidiaries” means all those corporations or other entities of which
the Company owns or controls 50% or more of the outstanding equity securities
entitled to vote generally in the election of directors either directly or
through an unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities entitled to vote generally in the election of
directors is owned or controlled directly or indirectly by the Company.

 

3.2 Capitalization.

 

The authorized capital stock of the Company as of the date of this Agreement
consists of (i) 200,000,000 shares of Common Stock, (ii) 199,000,000 shares of
Preferred Stock, par value $0.01 per share, and (iii) 25,000,000 shares of
Non-Voting Common Stock. As of the date of this Agreement, approximately
23,697,787 shares of Common Stock are outstanding, no shares of Preferred Stock
are outstanding and no shares of Non-Voting Common Stock are outstanding. As of
the date of this Agreement, approximately 4,090,733 shares of Common Stock are
reserved for issuance pursuant to the exercise of currently outstanding options
and warrants. Except as disclosed in this Section 3.2, there are no other
options, warrants, or convertible securities or other rights, agreements,
arrangements or commitments of any character relating to the issuance or sale of
capital stock of the Company, or

 

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obligating the Company to issue or sell any shares of capital stock, or any
other equity interest in the Company. There are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any shares
of its capital stock. All of the outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and nonassessable and
the issuance of the foregoing has not been made in violation of any preemptive
rights in favor of others.

 

3.3 Company Subsidiaries.

 

The Company has disclosed in Exhibit 21.1 to its Annual Report on Form 10-K for
the year ended December 31, 2004 (including the other documents incorporated by
reference therein, the “2004 Annual Report”) all of the Company Subsidiaries (as
defined below) as of the date of this Agreement. The Company or one of the
Company Subsidiaries owns all of the issued and outstanding shares of capital
stock of each Company Subsidiary. No equity securities of any Company Subsidiary
are or may become required to be issued (other than to the Company or another
Company Subsidiary) by reason of any rights, agreements, arrangements or
commitments of any character and there are no contracts by which any Company
Subsidiary is bound to issue (other than to the Company or another Company
Subsidiary) additional shares of its capital stock or rights or by which the
Company or any Company Subsidiary is or may be bound to transfer any shares of
the capital stock of any Company Subsidiary (other than to the Company or
another Company Subsidiary). There are no contracts relating to the rights of
the Company or any Company Subsidiary to vote or to dispose of any shares of the
capital stock of any Company Subsidiary. All of the shares of capital stock of
each Company Subsidiary held by the Company or a Company Subsidiary are duly
authorized, validly issued, fully paid and nonassessable and the issuance of the
foregoing has not been made in violation of any preemptive rights in favor of
others under the applicable corporation law of the jurisdiction in which such
Company Subsidiary is incorporated or organized and are owned by the Company or
the Company Subsidiary free and clear of any lien. Each Company Subsidiary is a
corporation and is duly organized, validly existing, and in good standing under
the laws of the jurisdiction in which it is incorporated or organized, and has
the corporate power and authority necessary for it to own, lease, and operate
its assets and to carry on its business as now conducted. Each Company
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect.

 

3.4 Authorization; Binding Obligation.

 

All corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization of this Agreement, the Registration
Rights Agreement and the Joinder Agreement, the performance of all obligations
of the Company hereunder and thereunder and for the sale, issuance and delivery
of the Shares has been taken or will be taken prior to the Closing. When issued
in compliance with the provisions of this Agreement, the Shares will be duly
authorized, validly issued, fully paid and non-assessable. The Conversion Shares
have been duly and validly reserved for issuance and, when issued upon
conversion of the Shares, will be duly authorized, validly issued, fully paid
and non-assessable. The issuance of the Shares and the Conversion Shares will
not be made in violation of preemptive rights in favor of others and will not
result in the issuance of any additional shares of Common Stock or the
triggering of any anti-dilution or similar rights contained in any options,
warrants, debentures or other securities or agreements of the Company. Upon
consummation of the transactions contemplated by this Agreement, the Purchasers
will own their respective shares free and clear of all security interests,
liens, encumbrances or adverse claims other than those created by a Purchaser
applicable only to its Shares and those created by this Agreement. This
Agreement, the Registration Rights Agreement and the Joinder Agreement have been
duly executed by the Company and constitutes the valid and binding obligation of
the Company enforceable in accordance with its terms.

 

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3.5 Consents and Approvals.

 

Except for the filing of the Certificate with the Secretary of State of the
State of Delaware, no filings with, notices to, or approvals of any governmental
or regulatory body are required to be obtained or made by the Company nor must
any waiting period required by any governmental or regulatory body lapse or
expire in connection with the consummation, execution and delivery of this
Agreement, the Registration Rights Agreement or the Joinder Agreement or of the
transactions contemplated hereby in connection with the Closing.

 

3.6 No Violations.

 

The execution and delivery of this Agreement, the Registration Rights Agreement
and the Joinder Agreement and the performance by the Company of its obligations
hereunder and thereunder (i) do not and will not conflict with or violate any
provision of the amended and restated certificate of incorporation as in effect
as of the date hereof, the Certificate or the bylaws of the Company and (ii) do
not and will not (A) conflict with or result in a breach of the terms,
conditions or provisions of, (B) constitute a default (or event which, with the
giving of notice or lapse of time or both, would become a default) under, (C)
result in the creation of any encumbrance upon the capital stock or assets of
the Company or any of the Company Subsidiaries pursuant to, (D) give any third
party the right to modify, terminate, suspend or accelerate any obligation
under, (E) result in a violation of, or (F) require any authorization, consent,
approval, exemption or other action by or notice to any court or administrative
or governmental body or other third party pursuant to, any law, statute, rule or
regulation or any material agreement or instrument or any order, judgment or
decree to which the Company or any of the Company Subsidiaries is subject or by
which any of their respective assets are bound.

 

3.7 Proprietary Rights.

 

Neither the Company nor any of the Company Subsidiaries has received any
communications alleging that it has violated, or by continuing to conduct its
business as currently conducted would violate, any proprietary rights of any
other person, nor is the Company aware of any basis for the foregoing.

 

3.8 Actions Pending.

 

Except as disclosed in the 2004 Annual Report, there is no action, suit or
proceeding pending or, to the best knowledge of the Company, threatened against
or affecting the Company or any Company Subsidiary or any of their respective
properties or rights before any court or by or before any governmental body or
arbitration board or tribunal that is reasonably likely to have a Company
Material Adverse Effect or could reasonably be expected to affect the legality,
validity or enforceability of this Agreement or the consummation of the
transactions contemplated hereby. None of the Company, any Company Subsidiary
nor any of their respective properties or rights are subject to an existing or
threatened order, writ, judgment, injunction, decree, stipulation, determination
or award entered by or with any United States federal, state or local or foreign
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, judicial or arbitral body that is reasonably
likely to have a Company Material Adverse Effect or could reasonably be expected
to affect the legality, validity or enforceability of this Agreement or the
consummation of the transactions contemplated hereby.

 

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3.9 Financial Statements; Interim Changes.

 

The 2004 Annual Report includes the Company’s audited consolidated balance sheet
as of December 31, 2003 and 2004, and audited consolidated statements of
operations, stockholders’ equity and cash flows for the years ended December 31,
2002, 2003 and 2004 and the related notes thereto (collectively, the “Company
Financial Statements”). The Company Financial Statements have been prepared (i)
in accordance with the books and records of the Company and the Company
Subsidiaries, which are complete and correct and which have been maintained in
accordance with past practices, and (ii) present fairly in all material respects
the consolidated financial position of the Company as of the dates indicated and
the consolidated results of operations, changes in stockholders’ equity and cash
flows of the Company for the periods indicated, in accordance with generally
accepted accounting principles consistently applied (subject in the case of
interim financial statements to normal recurring year-end adjustments which are
not expected individually or in the aggregate to be material in amount and the
absence of footnote disclosures). The Company and the Company Subsidiaries,
taken as a whole, have no material liabilities or obligations of any nature
(absolute, accrued, contingent or otherwise) that are not either reflected or
fully reserved against on the balance sheet dated as of December 31, 2004
included in the Company Financial Statements or incurred in the ordinary course
of the business of the Company subsequent to December 31, 2004. Since December
31, 2004, the businesses of the Company and the Company Subsidiaries have been
conducted in the ordinary course and there has not been any material adverse
change in the business, operations, financial condition or prospects of the
Company and the Company Subsidiaries taken as a whole.

 

3.10 SEC Filings; Corporate Governance; Internal Controls.

 

(a) The Company has timely filed all statements, reports, schedules, and other
documents filed, or required to be filed during the 12 calendar months preceding
the date of this Agreement (as such statements, reports, schedules and documents
have been amended from time to time, collectively, the “SEC Documents”), by the
Company with the Securities and Exchange Commission (the “Commission”) pursuant
to the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (as the same may be amended from time to time, the
“Securities Act”), and the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (as the same may be amended from
time to time, the “Exchange Act” and collectively with the Securities Act, the
“Securities Laws”). The SEC Documents (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Laws and
(ii) did not, at the time they were filed (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing or,
in the case of registration statements, at the effective date thereof) contain
any untrue statement of a material fact or omit to state a material fact
required to be stated in such SEC Document or necessary in order to make the
statements in such SEC Documents, in the light of the circumstances under which
they were made, not misleading. The Company has filed all SEC Documents required
to be filed to meet the requirements of SEC Rule 144(c) under the Securities
Act. The Company has complied in all material respects with the listing
requirements of the Nasdaq National Market.

 

(b) The Company and the Company Subsidiary maintain accurate books and records
reflecting their assets and liabilities and maintain proper and adequate
internal accounting controls which provide assurance that (i) transactions are
executed in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of the Company’s
consolidated financial statements and to maintain accountability for the
Company’s consolidated assets; (iii) access to the Company’s and the Company
Subsidiaries’ assets is permitted only in accordance with management’s
authorization; (iv) the reporting of the Company’s and Company Subsidiaries’
assets is compared with existing assets at regular intervals; and (v) accounts,
notes and other receivables are recorded accurately, and proper and adequate
procedures are implemented to effect the collection thereof on a current and
timely basis.

 

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3.11 Compliance with Laws.

 

The business of the Company and each of the Company Subsidiaries has been
conducted in compliance with all applicable laws and regulations of governmental
authorities, except for such violations that have been cured without a Company
Material Adverse Effect or that, individually or in the aggregate, may not
reasonably be expected to have a Company Material Adverse Effect.

 

3.12 Material Contracts.

 

Except as disclosed in the 2004 Annual Report, neither the Company nor any
Company Subsidiary is a party to (or otherwise bound by) any of the following:
(i) any employment or consulting contract not terminable on 30 days or less
notice, (ii) any agreement providing for the issuance or repurchase of any
securities of the Company other than this Agreement, (iii) any agreement in
respect of registration rights, preemptive rights, rights of first refusal,
voting rights or other rights of security holders, (iv) any agreement evidencing
or providing for any indebtedness for borrowed money, (v) any other agreement
that would be required to be filed as an exhibit to a Registration Statement on
Form S-1 pursuant to Item 601 of Regulation S-K under the Securities Act of
1933.

 

3.13 Personal Property and Leases.

 

The Company and each of the Company Subsidiaries has good and marketable title
to its properties and assets free and clear of all mortgages, deeds of trust,
liens, encumbrances, security interests and claims except for liens,
encumbrances and security interests which arise in the ordinary course of
business or which do not materially impair the use or value of such properties
and assets of the Company or the Company Subsidiaries. With respect to the
property and assets they lease, the Company and each of the Company Subsidiaries
is in material compliance with such leases and, to the best of the Company’s
knowledge, the Company and the Company Subsidiaries hold valid leasehold
interests in such assets free of any liens, encumbrances, security interests or
claims of any party other than the lessors of such property and assets.

 

3.14 Certain Transactions.

 

Except as disclosed in the 2004 Annual Report or as contemplated by this
Agreement, none of the current directors, officers, or 10% or greater
stockholders of the Company is a party to any transaction with the Company,
other than compensation arrangements of such officers in the ordinary course of
the Company’s business and purchases of securities, that would be required to be
disclosed pursuant to Item 404 of Regulation S-K under the Securities Act.

 

3.15 Employees.

 

Neither the Company nor any of the Company Subsidiaries is a party to any
pending, or to the Company’s knowledge, threatened, labor dispute. The Company
and the Company Subsidiaries have complied in all material respects with all
applicable federal, state, and local laws, ordinances, rules and regulations and
requirements relating to the employment of labor, including but not limited to
the provisions thereof relating to wages, hours, collective bargaining, payment
of Social Security, unemployment and withholding taxes, and ensuring equality of
opportunity for employment and advancement of minorities and women. There are no
claims pending, or threatened to be brought, in any court or administrative
agency by any former or current employees of the Company or any of the

 

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Company Subsidiaries for compensation, pending severance benefits, vacation
time, vacation pay or pension benefits, or any other claim pending from any
current or former employee or any other person arising out of the status of the
Company or any Company Subsidiary as employer, whether in the form of claims for
employment discrimination, harassment, unfair labor practices, grievances,
wrongful discharge or otherwise which could reasonably be expected, individually
or in the aggregate, to have a Company Material Adverse Effect.

 

3.16 Tax Returns and Audits.

 

All required federal, state and local tax returns or appropriate extension
requests of the Company and the Company Subsidiaries have been filed within the
period required for such filings and any extensions granted therefor and within
the period that the same may be filed without interest or penalties, and all
federal, state and local taxes required to be paid with respect to such returns
have been paid or due provision for payment thereof has been made. The Company
and the Company Subsidiaries have not received notice of any tax deficiency
proposed or assessed against it, and has not signed any waiver of any statute of
limitations on the assessment or collection of any tax. None of the tax returns
of the Company or any of Company Subsidiaries has been audited by governmental
authorities in a manner to bring such audits to the attention of the Company or
any of the Company Subsidiaries.

 

3.17 Intellectual Property Rights.

 

The Company and each of the Company Subsidiaries owns, has licenses to, or can
obtain on commercially reasonable terms rights to, all material patents,
trademarks, copyrights, service marks, and applications and registrations
therefor, and all trade names, customer lists, trade secrets, proprietary
processes and formulae, inventions, know-how, other confidential and proprietary
information, and other industrial and intellectual property rights necessary to
permit the Company to carry on its business as currently conducted. All
registered copyrights, trademarks, and service marks owned by the Company or the
Company Subsidiaries are in full force and effect and are not subject to any
taxes or maintenance fees. There is no pending or, to the knowledge of the
Company, threatened claim or litigation against the Company or any of the
Company Subsidiaries contesting the right to use its intellectual property
rights, asserting the misuse of any thereof, or asserting the infringement or
other violation of any intellectual property right of a third party. The Company
and each Company Subsidiary has taken all reasonable security measures to
protect the secrecy, confidentiality, and value of its trade secrets,
proprietary processes and formulae, inventions, know-how and other confidential
and proprietary information.

 

3.18 Insurance.

 

The Company and each Company Subsidiary maintains adequate insurance covering
the respective risks of the Company and of each Company Subsidiary of such types
and in such amounts and with such deductibles as are customary for other
companies of similar size engaged in similar lines of business. All insurance
held by the Company and each Company Subsidiary is in full force and effect and
is issued by insurers of recognized responsibility.

 

3.19 Private Placement.

 

Assuming the accuracy of the representations and warranties of the Purchasers
contained in Section 4.2, the offer and the sale of the Shares to the Purchasers
pursuant to this Agreement is exempt from registration under the Securities Act.

 

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4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

 

Each Purchaser, severally and not jointly, hereby represents and warrants to the
Company as follows:

 

4.1 Requisite Power and Authority.

 

Such Purchaser has all necessary power and authority under all applicable
provisions of law to execute and deliver this Agreement and to carry out its
provisions. All actions on such Purchaser’s part required for the lawful
execution and delivery of this Agreement have been or will be effectively taken
prior to the Closing. Upon its execution and delivery by such Purchaser, this
Agreement will be valid and binding obligation of such Purchaser, enforceable in
accordance with its terms.

 

4.2 Investment Representations.

 

Such Purchaser understands that neither the Shares nor the Conversion Shares
have been registered under the Securities Act. Such Purchaser also understands
that the Shares are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon the Purchaser’s
representations contained in this Agreement. Such Purchaser hereby represents
and warrants as follows:

 

(a) Purchaser Bears Economic Risk.

 

Such Purchaser has substantial experience in evaluating and investing in private
placement transactions of securities in companies similar to the Company so that
it is capable of evaluating the merits and risks of its investment in the
Company and has the capacity to protect its own interests. Such Purchaser
understands that an investment in the Shares acquired pursuant to this Agreement
is highly speculative and involves substantial economic risk. Such Purchaser
understands that it must bear the economic risk of this investment indefinitely
unless the Shares (or the Conversion Shares) are registered pursuant to the
Securities Act, or an exemption from registration is available, and that such
Purchaser may sustain, and is financially able to sustain, a complete loss of
its investment pursuant to this Agreement. Such Purchaser understands that the
Company has no present intention of registering the Shares, the Conversion
Shares or any shares of its Common Stock. Such Purchaser also understands that
there is no assurance that any exemption from registration under the Securities
Act will be available and that, even if available, such exemption may not allow
such Purchaser to transfer all or any portion of the Shares or the Conversion
Shares under the circumstances, in the amounts or at the times such Purchaser
might propose.

 

(b) Acquisition for Own Account.

 

Such Purchaser is acquiring the Shares and the Conversion Shares for its own
account for investment only, and not with a view toward their distribution in
violation of applicable securities laws.

 

(c) Purchaser Can Protect Its Interest.

 

Such Purchaser represents that, by reason of its or of its management’s business
or financial experience, such Purchaser has the capacity to protect its own
interests in connection with the transactions contemplated in this Agreement.
Further, such Purchaser is aware of no publication of any advertisement in
connection with the transactions contemplated by the Agreement.

 

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(d) Accredited Investor.

 

Such Purchaser represents that it is an accredited investor within the meaning
of Regulation D under the Securities Act.

 

(e) Company Information.

 

Such Purchaser has had an opportunity to discuss the Company’s business,
management and financial affairs with directors, officers and management of the
Company. Such Purchaser has also had the opportunity to ask questions of, and
receive answers from, the Company and its management regarding the terms and
conditions of this investment.

 

(f) Transfer Restrictions.

 

Such Purchaser acknowledges and agrees that the Shares and, if issued, the
Conversion Shares are subject to restrictions on transfer under the Securities
Act and may not be sold or offered for sale in the absence of (i) an effective
registration statement for the shares under such act and any applicable state
securities law, (ii) a “no action” letter of the securities and exchange
commission with respect to such sale or offer, or (iii) an opinion of counsel
reasonably satisfactory to the corporation that registration under such act and
any applicable state securities law is not required with respect to such sale or
offer.

 

(g) Rule 144.

 

Such Purchaser has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act, which permits limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain current
public information about the Company, the resale occurring not less than one
year after a party has purchased and paid for the security to be sold, the sale
being through an unsolicited “broker’s transaction” or in transactions directly
with a market maker (as said term is defined under the Exchange Act) and the
number of shares being sold during any three-month period not exceeding
specified limitations.

 

(h) Residence.

 

If such Purchaser is an individual, then such Purchaser resides in the
jurisdiction identified in the address of such Purchaser set forth on Exhibit A;
if such Purchaser is a partnership, corporation, limited liability company or
other entity, then the office or offices of such Purchaser in which its
investment decision was made is located at the address or addresses set forth on
Exhibit A.

 

(i) No Reliance.

 

Such Purchaser acknowledges and agrees that, in making such Purchaser’s decision
to purchase the Shares, such Purchaser (1) has not relied on any information
other than (a) the information provided to such Purchaser by the Company in this
Agreement, and (b) the information contained in the SEC Documents, and (2) has
only relied on the advice of its own legal counsel and financial advisors and
has not relied on the advice of the legal counsel or financial advisors for the
Company or any other Purchaser.

 

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5 CONDITIONS TO CLOSING

 

5.1 Conditions to the Purchasers’ Obligations.

 

Each Purchaser’s obligation to purchase the Shares at the Closing is subject to
the satisfaction, at or prior to the Closing, of the following conditions, any
of which may be waived in whole or in part by each such Purchaser as to such
Purchaser:

 

(a) Representations and Warranties.

 

The representations and warranties of the Company contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date.

 

(b) Legal Proceedings.

 

On the Closing Date, the sale and issuance of the Shares to be issued at the
Closing shall not be legally prohibited by any laws or regulations to which the
Purchasers and the Company are subject. No law, regulation, order, judgment or
injunction of any court or governmental authority of competent jurisdiction
shall be in effect which prohibits the consummation of the transactions
contemplated hereby nor shall any action be pending which would result in any
such order, judgment or injunction.

 

(c) Simultaneous Purchase.

 

All other Purchasers shall have concurrently purchased the Shares to be
purchased by them at the Closing pursuant to this Agreement.

 

(d) Compliance with Agreement.

 

The Company shall have performed and complied with in all material respects all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.

 

(e) Notices and Approvals.

 

All authorizations, approvals, or permits, if any, of, or filings with any
governmental authority or regulatory body of the United States or of any State
of the United States that are required in connection with the lawful issuance
and sale of the Shares pursuant to this Agreement and the other transactions
contemplated hereby shall be duly obtained and all waiting periods required by
law shall have expired effective as of the Closing.

 

(f) Certificate of Designations.

 

The Certificate shall have been duly approved and adopted by the Board of
Directors of the Company and shall have been duly filed with and accepted by the
Secretary of State of the State of Delaware.

 

(g) Officer’s Certificate.

 

The President of the Company shall deliver at the Closing a certificate stating
that the conditions specified in Section 5.1 have been fulfilled and stating
that there shall have been no material adverse change in the business, assets or
financial condition of the Company and the Company Subsidiaries taken as a whole
since December 31, 2004.

 

- 10 -

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(h) Secretary’s Certificate.

 

The Company’s Secretary shall execute and deliver at the Closing a certificate
attaching the resolutions authorizing the transactions contemplated hereby and
bylaws as exhibits.

 

(i) Legal Opinion.

 

The Purchasers shall have received the legal opinion of Alston & Bird LLP,
counsel to the Company, and the legal opinion of Chad S. Wachter, the Company’s
General Counsel, each in form and substance reasonably satisfactory to the
Purchasers, as to the matters set forth in Exhibits C-1 and C-2, respectively.

 

(j) Registration Rights Agreement; Joinder Agreement.

 

Concurrent with the Closing, the Company and the Purchasers shall have entered
into a registration rights agreement in a form reasonably acceptable to the
Company and the Additional Purchasers, which shall provide that (i) so long as
the Company is eligible to file a registration statement under the Securities
Act on Form S-3 (“S-3 Eligible”) and subject to customary blackout rights, the
Company shall maintain an effective “shelf” registration statement for the
resale of the Conversion Shares at all times from and after the 120-day
anniversary of the Closing so long as any Shares remain outstanding and for a
period of at least 180 days following an automatic conversion of the Shares as
provided in the Certificate; (ii) the Company shall use its commercially
reasonable efforts to file such “shelf” resale registration statement on or
before the 60-day anniversary of the Closing; and (iii) in the event that the
Company ceases to be S-3 Eligible, the Purchasers shall have demand and
piggyback registration rights at the Company’s expense (with limitations on the
duration of “shelf” registrations to be agreed) (the “Registration Rights
Agreement”). Further, concurrent with the Closing, the Company and the
Purchasers who are not parties to the Stockholders Agreement, dated as of
February 7, 2000, as amended as of January 12, 2001 and October 18, 2002 (as the
same may be hereafter amended from time to time (the “Stockholders Agreement”)
shall have entered into a joinder agreement (the “Joinder Agreement”)
substantially in the form attached hereto as Exhibit F, joining such Purchasers
as parties to the Stockholders Agreement.

 

5.2 Conditions to the Company’s Obligations.

 

The Company’s obligation to issue and sell the Shares at the Closing is subject
to the satisfaction of the following conditions on or prior to the Closing:

 

(a) Representations and Warranties.

 

The representations and warranties of each of the Purchasers contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date.

 

(b) Legal Proceedings.

 

On the Closing Date, the sale and issuance of the Shares to be issued at the
Closing shall not be legally prohibited by any laws or regulations to which the
Purchasers and the Company are subject. No law, regulation, order, judgment or
injunction of any court or governmental authority of competent jurisdiction
shall be in effect which prohibits the consummation of the transactions
contemplated hereby nor shall any action be pending which would result in any
such order, judgment or injunction.

 

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(c) Simultaneous Purchase.

 

All Purchasers shall have concurrently purchased the Shares to be purchased by
them at the Closing pursuant to this Agreement.

 

(d) Compliance with Agreement.

 

Each Purchaser shall have performed and complied with in all material respects
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.

 

(e) Notices and Approvals.

 

All authorizations, approvals, or permits, if any, of, or filings with any
governmental authority or regulatory body of the United States or of any State
of the United States that are required in connection with the lawful issuance
and sale of the Shares pursuant to this Agreement shall be duly obtained and all
waiting periods required by law shall have expired effective as of the Closing.

 

(f) Certificate of Designations.

 

The Certificate shall have been duly approved and adopted by the Board of
Directors of the Company and shall have been duly filed with and accepted by the
Secretary of State of the State of Delaware.

 

(g) Registration Rights Agreement; Joinder Agreement.

 

Concurrent with the Closing, (1) the Company and the Purchasers shall have
entered into the Registration Rights Agreement and (2) the Company and the
Purchasers who are not parties to the Stockholders Agreement shall have entered
into the Joinder Agreement, joining such Purchasers as parties to the
Stockholders Agreement.

 

6 LEGEND

 

Each certificate representing Shares shall bear a legend substantially in the
following form:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAW. THE SHARES MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SHARES UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAW, (II) A
“NO ACTION” LETTER OF THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO
SUCH SALE OR OFFER, OR (III) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE CORPORATION THAT REGISTRATION UNDER SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAW IS NOT REQUIRED WITH RESPECT TO SUCH SALE OR OFFER.

 

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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
PROVISIONS OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF KNOLOGY,
INC., AS IT MAY BE AMENDED HEREAFTER, AND A CERTIFICATE OF DESIGNATIONS, COPIES
OF WHICH ARE ON FILE WITH THE SECRETARY OF THE CORPORATION AND WILL BE PROVIDED
FREE OF CHARGE UPON REQUEST.

 

7 POST-CLOSING COVENANT

 

7.1 Rights Reoffering.

 

As soon as reasonably practicable following the Closing, the Purchasers listed
on Exhibit D to this Agreement (the “Reofferors”) agree to take all actions
reasonably necessary, including executing and delivering any and all documents
or instruments deemed necessary by the Company to effectuate the intent of this
Section 7, to reoffer their respective Excess Reoffer Shares (as defined below),
pursuant to a “rights offering” registered under the Securities Act to existing
stockholders of the Company at $10.00 per Share (the “Rights Reoffering”). Each
Purchaser listed in Exhibit E agrees to waive its right to purchase Shares in
the Rights Reoffering. For each Reofferor, such Reofferor’s “Excess Backstop
Shares” shall mean a number of Shares equal to (i) the total number of Shares
acquired by such Reofferor minus (ii) the product of (x) such Reofferor’s
percentage beneficial ownership of the Common Stock prior to giving effect to
the issuance of Shares at Closing and (y) the total number of Shares acquired by
such Reofferor.

 

7.2 Optional Rights Offering.

 

The Company may, but is not required to, offer up to an additional 1,080,000
shares of Series AA Preferred Stock, or up to 1,080,000 shares of a newly
created Series BB Preferred Stock, which shall rank pari passu with the Series
AA Preferred Stock and have terms substantially identical to, or more favorable
to the Company than, the Series AA Preferred Stock (the “Series BB Preferred
Stock”), in a “rights offering” to existing stockholders at $10.00 per share
(the “Rights Offering”). The number of Shares held by Purchasers will not be
reduced as a result of the Rights Offering. Each Purchaser listed in Exhibit E
agrees to waive its right to purchase Shares in the Rights Offering; provided,
that if the Company undertakes the Rights Offering and fewer than 500,000 of the
shares offered in the Rights Offering are purchased by existing stockholders,
the Purchasers listed on Exhibit E (or their designees reasonably acceptable to
the Company) will have the right to purchase an amount of shares offered in the
Rights Offering (on a pro rata basis based on their respective subscription
amounts) sufficient to increase the number of shares sold in the Rights Offering
to 500,000.

 

8 TERMINATION

 

8.1 Events of Termination. This Agreement may be terminated at any time before
the Closing Date:

 

(a) by mutual written agreement of the Company and the Purchasers;

 

(b) by the Company (i) upon a breach of any covenant or agreement on the part of
any of the Purchasers set forth in this Agreement or if any representation or
warranty of any Purchaser set forth in this Agreement shall not be true and
correct, in either case such that the conditions set forth in Section 5.2 would
not be satisfied (a “Purchaser Termination Breach”); provided, that such
Purchaser Termination Breach shall not have been waived or cured within 30 days
after written notice of the Purchaser Termination Breach is given to the
Purchaser by the Company; or (ii) if any condition to the

 

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Company’s obligations to close at the Closing set forth in Section 5.2 has not
been satisfied as of the Closing Date or satisfaction of such a condition is or
becomes impossible (other than because of the failure of the Company to comply
with its obligations under this Agreement), and the Company has not waived such
condition;

 

(c) by any of the Purchasers (i) upon a breach of any covenant or agreement on
the part of the Company set forth in this Agreement or if any representation or
warranty of the Company set forth in this Agreement shall not be true and
correct, in either case such that the conditions set forth in Section 5.1 would
not be satisfied (a “Company Termination Breach”); provided, that such Company
Termination Breach shall not have been waived or cured within 30 days after
written notice of such Company Termination Breach is given to the Company by
such Purchaser; or (ii) if any condition to such Purchaser’s obligations to
close set forth in Section 5.1 has not been satisfied as of the Closing Date or
satisfaction of such a condition is or becomes impossible (other than because of
the failure of the Purchaser to comply with its obligations under this
Agreement), and such Purchaser has not waived such condition; or

 

(d) by the Company or any Purchaser, if the Closing has not occurred on or
before July 31, 2005.

 

8.2 Effect of Termination

 

If this Agreement is terminated by either the Company or a Purchaser pursuant to
the provisions of Section 8.1, this Agreement shall forthwith become void and
there shall be no further obligations with respect to the sale and purchase of
the Shares on the part of the Company or the Purchasers or their respective
stockholders, directors, officers, employees, agents or representatives, except
for the Section 9, all of which shall survive any termination of this Agreement;
provided, that nothing in this Section 8.2 shall relieve either party from
liability for any willful breach of this Agreement.

 

9 MISCELLANEOUS

 

9.1 Knowledge of a Party.

 

As used in this Agreement, the terms “knowledge”, “know” or “known” means with
respect to a party hereto, with respect to a matter in question, that any
executive officer of such party has actual knowledge of such matter.

 

9.2 Governing Law.

 

This Agreement shall be governed in all respects by the laws of the State of
Georgia as such laws are applied to agreements between Georgia residents entered
into and performed entirely in Georgia, except that the General Corporation Law
of the State of Delaware shall govern as to matters of corporate law.

 

9.3 Survival.

 

The representations, warranties, covenants and agreements made herein shall
survive any investigation made by any Purchaser and the closing of the
transactions contemplated hereby. All statements as to factual matters contained
in any certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties by the Company hereunder solely as
of the date of such certificate or instrument.

 

- 14 -

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9.4 Successors and Assigns.

 

No Purchaser may assign such Purchaser’s rights and obligations under this
Agreement unless the assignee agrees to be bound by the terms and conditions of
this Agreement, including the representations and warranties included in Article
4, by executing a counterpart to this Agreement; provided that such Purchaser
shall not be released from its obligations hereunder as a result of such
assignment. Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each person who shall be a holder of the Shares
from time to time.

 

9.5 Entire Agreement.

 

This Agreement, the Exhibits and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.

 

9.6 Severability.

 

In case any provision of the Agreement 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.

 

9.7 Amendment and Waiver.

 

This Agreement and any provision hereof may be amended, modified or waived only
upon the mutual written consent of the Company and Purchasers purchasing 60% of
the outstanding Shares, except as otherwise provided herein. Any such amendment,
modification or waiver, whether retroactively or prospectively effective, shall
be binding upon the Company and all Purchasers.

 

9.8 Notices.

 

All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (i) upon personal delivery to the party to be
notified; (ii) when sent by confirmed telex, facsimile or electronic mail if
sent during normal business hours of the recipient, if not, then on the next
business day, (iii) five business days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one business
day after deposit with a nationally recognized overnight courier, special next
day delivery, with verification of receipt. All communications shall be sent to
the Company at 1241 O. G. Skinner Drive, West Point, Georgia 31833, Attention:
Rodger L. Johnson, President, email address: rodger.johnson@knology.com, with a
copy to Alston & Bird LLP, 601 Pennsylvania Avenue, N.W., North Building, 10th
Floor, Washington, DC 20004-2601, Attention: David E. Brown, Jr., email address:
dbrown@alston.com, and to a Purchaser at the address set forth on Exhibit A
attached hereto or at such other address as the Company or Purchaser may
designate by ten days advance written notice to the other parties hereto.

 

9.9 Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.

 

- 15 -

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9.10 Broker’s Fees.

 

Each party hereto represents and warrants that no agent, broker, investment
banker, person or firm acting on behalf of or under the authority of such party
hereto is or will be entitled to a broker’s or finder’s fee or any other
commission directly or indirectly in connection with the transactions
contemplated herein. Each party hereto further agrees to indemnify each other
party for any claims, losses or expenses incurred by such other party as a
result of its representation in this Section 9.10 being untrue.

 

9.11 Delays or Omissions.

 

No delay or omission to exercise any right, power or remedy accruing to any
party under this Agreement shall impair any such right, power or remedy of such
party nor shall it be construed to be a waiver of any breach or default, or an
acquiescence therein, or a waiver of or acquiescence in any similar breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or
default under this Agreement must be made in writing and shall be effective only
to the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.

 

9.12 Press Releases.

 

Prior to the Closing Date, the parties shall consult with each other as to the
form and substance of any press release or other public disclosure materially
related to this Agreement or any other transaction contemplated hereby;
provided, that nothing in this Section 9.12 shall be deemed to prohibit any
party from making any disclosure which its counsel deems necessary or advisable
in order to satisfy such party’s disclosure obligations imposed by law.
Notwithstanding the foregoing, each of the Purchasers and their respective
affiliates may list the Company’s name and logo and describe the Company’s
business, in a manner generally consistent with the Company’s publicly available
filings with the Securities and Exchange Commission, in their marketing
materials and may post such information on their website.

 

9.13 Expenses.

 

Each of the parties shall bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereby,
except that the Company shall reimburse the expenses of the Purchasers,
including legal fees, out-of-pocket expenses and filing fees required by any
regulatory filings in connection with the transactions contemplated hereby,
actually incurred by such Purchasers in an amount not to exceed $30,000 in the
aggregate.

 

[SIGNATURE PAGES INTENTIONALLY OMITTED]

 

- 16 -

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Exhibit A

 

Schedule of Purchasers

 

Series AA Preferred Stock

 

Name and Address

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

   Total Number of Shares

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

   Aggregate Purchase Price

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

Campbell B. Lanier, III

c/o PRE Holdings, Inc.

P. O. Box 510

West Point, GA 31833

   143,750    $ 1,437,500

J. Smith Lanier II

c/o J. Smith Lanier and Company

P. O. Box 70

West Point, GA 31833

   143,750      1,437,500

AT&T Venture Fund II, LP

c/o VMS Group

47 Hulfish Street Suite 300

Princeton, NJ 08542

Attention: Dom Turiano

   31,860      318,600

Special Partners Fund, LP

c/o VMS Group

47 Hulfish Street Suite 300

Princeton, NJ 08542

Attention: Dom Turiano

   2,000      20,000

Special Partners Fund International, LP

c/o VMS Group

47 Hulfish Street Suite 300

Princeton, NJ 08542

Attention: Dom Turiano

   11,140      111,400

The Burton Partnership (QP), Limited Partnership

614 W. Bay Street

Tampa, FL 33606

Attn: Laurie Ann Burton

   140,625      1,406,250

The Burton Partnership, Limited Partnership

614 W. Bay Street

Tampa, FL 33606

Attn: Laurie Ann Burton

   46,875      468,750

O. Gene Gabbard

102 Marseille Place

Cary, North Carolina 27511

   25,000      250,000

SGL Investments Limited Partnership I

140 Fountain Parkway, Suite 420

St. Petersburg, FL 33716

   50,000      500,000

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

Ballast Point Ventures, L.P.

880 Carillon Parkway

St. Petersburg, FL 33716

   237,288      2,372,880

Ballast Point Ventures EF, L.P.

880 Carillon Parkway

St. Petersburg, FL 33716

   12,712      127,120

PNC Venture Corp

3150 CNG Tower

Pittsburgh, PA 15222

Attn: David Hillman

   75,000      750,000

Total

   920,000    $ 9,200,00

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

Exhibit B

 

Certificate of Designations

 

[See Exhibit 3.1 to Knology’s Current Report on Form 8-K filed May 27, 2005]

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

Exhibit C-1

 

Form of Alston & Bird LLP Opinion

 

1. Each of the Company and the Company Subsidiaries is a corporation existing
and in good standing under the laws of the state of its incorporation. The
Company and each of the Company Subsidiaries has the requisite corporate power
to own and operate its properties and assets, and to carry on its business as it
is currently being conducted. The Company or one of the Company Subsidiaries
owns all of the issued and outstanding shares of capital stock of the Company
Subsidiaries, which shares are free and clear of any liens, charges or
encumbrances and are duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding options, warrants, conversion rights,
preemptive rights, subscription rights, rights of first refusal or other rights
to purchase or acquire any shares of the capital stock of any of the Company
Subsidiaries.

 

2. The Company has the corporate power and authority to execute and deliver each
of the Transaction Documents, and to perform its obligations thereunder. The
Company has the corporate power and authority to sell and issue the Shares and
to issue the common stock, $.01 par value, of the Company (the “Common Stock”)
issuable upon conversion of the Shares.

 

3. Each of the Agreement, the Registration Rights Agreement and the Joinder
Agreement (the “Transaction Documents”) has been duly and validly authorized,
executed and delivered by the Company. The Certificate has been filed with the
Secretary of State of the State of Delaware and is effective as of             
    , 2005.

 

4. Each of the Transaction Documents constitutes a valid and binding agreement
of the Company enforceable against the Company in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors’ rights, and subject to general equity principles and to limitations
on availability of equitable relief, including specific performance.

 

5. The execution, delivery and performance by the Company of each of the
Transaction Documents do not: (A) conflict with or violate any provision of the
Certificate or bylaws of the Company and all consents required by the
Certificate or bylaws of the Company have been obtained; (B) conflict with or
violate any provision of any law, rule or regulation of general applicability,
any order, writ, judgment, injunction, decree, determination or award currently
in effect applicable to the Company, the Company Subsidiaries or their
respective properties or by which they are bound or affected; or (C) result in
the creation or imposition of any lien, charge, mortgage, security interest or
encumbrance of any nature whatsoever upon any property or asset of the Company
or any Company Subsidiary.

 

6. Except such as have been obtained, no authorization, consent, approval,
order, license or exemption of, or notice to or filing, qualification or
registration with, any court or governmental department, commission, board,
bureau, agency or instrumentality is or will be necessary for the valid
execution, delivery or performance by the Company of the Transaction Documents
or the consummation of the transactions contemplated thereby, including, without
limitation, the issuance of the Shares or the shares of Common Stock upon
conversion of the Shares, or for the enforcement against the Company of the
Transaction Documents.

 

7. The Shares, when paid for and issued as provided in the Agreement, and the
shares of Common Stock issuable upon conversion of the Shares, when issued in
accordance with the terms of the Shares, will be duly authorized, validly
issued, fully paid and non-assessable and the issuance thereof will not be
subject to preemptive rights in favor of any person under the Certificate, the
amended and restated

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

certificate of incorporation or the bylaws of the Company and will not result in
the issuance of additional shares of Common Stock or the triggering of any
anti-dilution of similar rights of any person under the Certificate, the amended
and restated certificate of incorporation or the or bylaws of the Company. The
designations, powers, preferences, rights, qualifications, limitations and
restrictions in respect of each class or series of authorized capital stock of
the Company are as set forth in the Certificate and the amended and restated
certificate of incorporation of the Company and all such designations, powers,
preferences, rights, qualifications, limitations and restrictions are valid,
binding and enforceable and in accordance with all applicable laws, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting creditors’ rights, and
subject to general equity principles and to limitations on availability of
equitable relief, including specific performance.

 

8. The representation contained in the first paragraph of Section 3.2 of the
Agreement regarding the authorized capital stock of the Company as of the date
of the Agreement is true and correct. All issued and outstanding shares of
capital stock of the Company are, and the shares of Common Stock issuable upon
exercise of outstanding options and warrants and issuable upon conversion of the
issued and outstanding shares of Series AA Preferred Stock when issued will be,
duly authorized, validly issued, fully paid and nonassessable. The shares of
Series AA Preferred Stock issued and outstanding as of the Closing are not, and
the issuance of the shares of Common Stock issuable upon exercise of outstanding
options and warrants and issuable upon conversion of the issued and outstanding
shares of Series AA Preferred Stock will not be, subject to preemptive rights in
favor of any person and will not result in the issuance of additional shares of
Common Stock or the triggering of any anti-dilution or similar rights under the
Certificate, the amended and restated certificate of incorporation or the bylaws
of the Company, in each case that has not been waived. Other than as set forth
in Section 3.2 of the Agreement, there are no outstanding options, warrants,
conversion rights, preemptive rights, subscription rights, rights of first
refusal or other rights (whether by law, pursuant to the Company’s amended and
restated certificate of incorporation or otherwise) to purchase or acquire any
shares of the capital stock of the Company.

 

9. The offer, sale and delivery of the Shares, and the shares of Common Stock to
be issued upon the conversion of the Shares, do not require registration under
the Securities Act or registration or qualification under the blue sky laws of
Georgia.

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

Exhibit C-2

 

Form of Chad S. Wachter’s Opinion

 

1. There is no pending, or, to my knowledge, threatened, action, suit,
proceeding or investigation before any court, governmental or regulatory agency
or authority or self-regulatory agency by, against or involving the Company or
any of the Company Subsidiaries that is reasonably likely to have a Company
Material Adverse Effect.

 

2. There is no judgment, injunction, order or decree of any court, governmental
agency or instrumentality or self-regulatory agency against the Company or any
of the Company Subsidiaries that is reasonably likely to have a Company Material
Adverse Effect.

 

3. The execution, delivery and performance by the Company of each of the
Agreement, the Registration Rights Agreement and the Joinder Agreement do not
conflict with or result in a breach or violation of, or constitute a default
under, any agreement, undertaking, contract, indenture, mortgage, deed of trust,
lease or other instrument to which the Company or any Company Subsidiary is a
party or by which it is bound.

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

Exhibit D

 

Reofferors

 

Campbell B. Lanier III

 

The Burton Partnership (QP), Limited Partnership

 

The Burton Partnership, Limited Partnership

 

O. Gene Gabbard

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

Exhibit E

 

Purchasers Waiving Rights in Rights Reoffering and Rights Offering

 

Ballast Point Ventures, L.P.

 

Ballast Point Ventures EF, L.P.

 

SGL Investments Limited Partnership I

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

Exhibit F

 

Joinder Agreement

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

STOCKHOLDER JOINDER AGREEMENT

 

THIS STOCKHOLDER JOINDER AGREEMENT (this “Agreement”) is made and entered into
as of the      day of May, 2005, by and between Knology, Inc., a Delaware
corporation (the “Company”) and the undersigned purchaser (the “New
Stockholder”) of shares of Series AA Convertible Preferred Stock, par value $.01
per share, of the Company (“Series AA Preferred”).

 

Premises

 

Pursuant to a Series AA Preferred Stock Purchase Agreement, dated as of May 4,
2005 (the “Purchase Agreement”), by and among the Company, the New Stockholder
and other parties thereto, the New Stockholder is purchasing shares of Series AA
Preferred. As a result, the New Stockholder will become a stockholder of the
Company and desires to derive the benefits and burdens associated therewith.

 

The Company is party to a Stockholders Agreement, dated as of February 7, 2000,
as amended as of January 12, 2001, and October 18, 2002 (as the same may
hereafter be amended from time to time, the “Stockholders Agreement”), with
certain of the Company’s existing stockholders (“Existing Stockholders”)
governing certain rights and obligations of the Existing Stockholders as
stockholders of the Company. Capitalized terms used and not otherwise defined
herein shall have the respective meanings ascribed thereto in the Stockholders
Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the New Stockholder hereby agree as follows:

 

1. From and after the issuance of the shares of the Series AA Preferred pursuant
to the Purchase Agreement, by virtue of the New Stockholder’s execution of a
counterpart to this Agreement, (x) the New Stockholder shall, without any
further action on the part of the Company or any of the Existing Stockholders or
any other party to the Purchase Agreement, become party to the Stockholders
Agreement subject to and bound by, and entitled to the benefits of, all the
terms and conditions of the Stockholders Agreement applicable to an Investor,
(y) the shares of Series AA Preferred received by the New Stockholder pursuant
to the Purchase Agreement shall be “Investor Stock” for all purposes under the
Stockholders Agreement, and (z) the New Stockholder shall be an “Other Investor”
for all purposes under the Stockholders Agreement.

 

2. A legend in substantially the form required by Section 6.02 of the
Stockholders Agreement shall appear on each certificate representing the shares
of Series AA Preferred issued to the New Stockholder pursuant to the Purchase
Agreement.

 

3. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.

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

IN WITNESS WHEREOF, each of the parties hereto has executed or caused this
Agreement to be executed by its duly authorized representative as of the date
first above written.

 

KNOLOGY, INC. By:  

 

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Name:  

 

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Title:  

 

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[NAME OF PURCHASER] By:  

 

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Name:  

 

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Title:  

 

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