EXHIBIT 10.4

 

EXECUTION COPY

 

$98,958,333

 

SECOND LIEN CREDIT AGREEMENT

 

Dated as of June 29, 2005

 

among

 

KNOLOGY, INC.

as Borrower

 

and

 

THE LENDERS PARTY HERETO

 

and

 

CREDIT SUISSE, CAYMAN ISLANDS BRANCH

as Administrative Agent and Collateral Agent

 

and

 

CREDIT SUISSE, CAYMAN ISLANDS BRANCH

as Sole Bookrunner and Sole Lead Arranger

 

WEIL, GOTSHAL & MANGES LLP

767 FIFTH AVENUE

NEW YORK, NEW YORK 10153-0119

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TABLE OF CONTENTS

 

Section 1.1

     Defined Terms    1

Section 1.2

     Computation of Time Periods    32

Section 1.3

     Accounting Terms and Principles    32

Section 1.4

     Conversion of Foreign Currencies    33

Section 1.5

     Certain Terms    33

Section 2.1

     The Commitments    34

Section 2.2

     Borrowing Procedures    34

Section 2.3

     Repayment of Loans    35

Section 2.4

     Evidence of Debt    35

Section 2.5

     Optional Prepayments    36

Section 2.6

     Mandatory Prepayments    37

Section 2.7

     Interest    39

Section 2.8

     Conversion/Continuation Option    40

Section 2.9

     Fees    41

Section 2.10

     Payments and Computations    41

Section 2.11

     Special Provisions Governing Eurodollar Rate Loans    43

Section 2.12

     Capital Adequacy    45

Section 2.13

     Taxes    45

Section 2.14

     Substitution of Lenders    47

Section 3.1

     Conditions Precedent to Initial Loans    48

Section 3.2

     Determinations of Initial Borrowing Conditions    53

Section 4.1

     Corporate Existence; Compliance with Law    53

Section 4.2

     Corporate Power; Authorization; Enforceable Obligations    54

Section 4.3

     Ownership of Borrower; Subsidiaries    54

Section 4.4

     Financial Statements    55

Section 4.5

     Material Adverse Change    56

Section 4.6

     Solvency    56

Section 4.7

     Litigation    56

Section 4.8

     Taxes    56

Section 4.9

     Full Disclosure    57

Section 4.10

     Margin Regulations    57

 

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Section 4.11

     No Burdensome Restrictions; No Defaults    57

Section 4.12

     Investment Company Act; Public Utility Holding Company Act    58

Section 4.13

     Use of Proceeds    58

Section 4.14

     Insurance    58

Section 4.15

     Labor Matters    58

Section 4.16

     ERISA    59

Section 4.17

     Environmental Matters    59

Section 4.18

     Intellectual Property    60

Section 4.19

     Title; Real Property    60

Section 4.20

     Interactive Broadband Networks and Communications Law Matters    61

Section 4.21

     Prohibited Persons; Trade Restrictions    63

Section 5.1

     Maximum Leverage Ratio    64

Section 5.2

     Minimum Interest Coverage Ratio    65

Section 5.3

     Capital Expenditures    65

Section 6.1

     Financial Statements    66

Section 6.2

     Default Notices    68

Section 6.3

     Litigation and Regulatory Matters    68

Section 6.4

     Asset Sales    69

Section 6.5

     Notices under First Lien Loan Documents    69

Section 6.6

     SEC Filings; Press Releases    69

Section 6.7

     Labor Relations    69

Section 6.8

     Tax Returns    69

Section 6.9

     Insurance    69

Section 6.10

     ERISA Matters    70

Section 6.11

     Environmental Matters    70

Section 6.12

     Customer Contracts    71

Section 6.13

     New Markets    71

Section 6.14

     Other Information    71

Section 7.1

     Preservation of Corporate Existence, Etc    72

Section 7.2

     Compliance with Laws, Etc    72

Section 7.3

     Conduct of Business    72

 

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Section 7.4

     Payment of Taxes, Etc    72

Section 7.5

     Maintenance of Insurance    72

Section 7.6

     Access    72

Section 7.7

     Keeping of Books    73

Section 7.8

     Maintenance of Properties, Etc    73

Section 7.9

     Application of Proceeds    73

Section 7.10

     Environmental    73

Section 7.11

     Additional Collateral and Guaranties    74

Section 7.12

     Regulatory Consents for Guaranties and Security    75

Section 7.13

     Control Accounts, Approved Deposit Accounts    76

Section 7.14

     Real Property    76

Section 7.15

     Interest Rate Contracts    77

Section 7.16

     Ratings    77

Section 7.17

     Post-Closing Obligations    77

Section 8.1

     Indebtedness    78

Section 8.2

     Liens, Etc    79

Section 8.3

     Investments    80

Section 8.4

     Sale of Assets    81

Section 8.5

     Restricted Payments    82

Section 8.6

     Prepayment and Cancellation of Indebtedness    83

Section 8.7

     Restriction on Fundamental Changes; Permitted Acquisitions    83

Section 8.8

     Change in Nature of Business    84

Section 8.9

     Transactions with Affiliates    84

Section 8.10

     Limitations on Restrictions on Subsidiary Distributions; No New Negative
Pledge; Restricted Subsidiaries    84

Section 8.11

     Modification of Constituent Documents    85

Section 8.12

     Modification of First Lien Loan Documents    85

Section 8.13

     Accounting Changes; Fiscal Year    85

Section 8.14

     Margin Regulations    85

Section 8.15

     Sale/Leasebacks    85

Section 8.16

     No Speculative Transactions    86

Section 8.17

     Compliance with ERISA    86

 

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Section 8.18

     Environmental    86

Section 8.19

     Patriot Act    86

Section 9.1

     Events of Default    86

Section 9.2

     Remedies    88

Section 9.3

     Regulatory Approvals    89

Section 9.4

     Rescission    89

Section 10.1

     Authorization and Action    89

Section 10.2

     Reliance by Agents, Etc    90

Section 10.3

     Posting of Approved Electronic Communications    91

Section 10.4

     The Agents Individually    92

Section 10.5

     Lender Credit Decision    92

Section 10.6

     Indemnification    92

Section 10.7

     Successor Agents    93

Section 10.8

     Concerning the Collateral and the Collateral Documents    93

Section 10.9

     Actions by the Collateral Agent    94

Section 10.10

     Collateral Matters Relating to Related Obligations    95

Section 11.1

     Amendments, Waivers, Etc    96

Section 11.2

     Assignments and Participations    98

Section 11.3

     Costs and Expenses    100

Section 11.4

     Indemnities    101

Section 11.5

     Limitation of Liability    103

Section 11.6

     Right of Set-off    103

Section 11.7

     Sharing of Payments, Etc    104

Section 11.8

     Notices, Etc    104

Section 11.9

     No Waiver; Remedies    106

Section 11.10

     Binding Effect    106

Section 11.11

     Governing Law    106

Section 11.12

     Submission to Jurisdiction; Service of Process    106

Section 11.13

     Waiver of Jury Trial    107

Section 11.14

     Marshaling; Payments Set Aside    107

Section 11.15

     Section Titles    107

Section 11.16

     Execution in Counterparts    108

 

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Section 11.17

     Entire Agreement    108

Section 11.18

     Confidentiality    108

 

Schedules

 

Schedule I    –      Commitments Schedule II    –      Applicable Lending
Offices and Addresses for Notices Schedule 4.2    –      Consents Schedule 4.3
   –      Ownership of Subsidiaries Schedule 4.7    –      Litigation Schedule
4.11    –      Build Out Obligations Schedule 4.15    –      Labor Matters
Schedule 4.16    –      List of Plans Schedule 4.17    –      Environmental
Matters Schedule 4.19    –      Real Property Schedule 4.20    –      Regulatory
Schedules Schedule 7.12    –      Regulatory Consents Schedule 7.14    –     
Mortgage Documents Schedule 8.1    –      Existing Indebtedness Schedule 8.1(d)
   –      Capital Leases Schedule 8.2    –      Existing Liens Schedule 8.3    –
     Existing Investments Schedule 8.10(b)    –      Restricted Subsidiaries

 

Exhibits

 

Exhibit A    –      Form of Assignment and Acceptance Exhibit B    –      Form
of Term Note Exhibit C    –      Form of Notice of Borrowing Exhibit D    –     
Form of Notice of Conversion or Continuation Exhibit E    –      Form of
Guaranty Exhibit F    –      Form of Pledge and Security Agreement Exhibit G   
–      Form of Intercreditor Agreement

 

v

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CREDIT AGREEMENT, dated as of June 29, 2005, among KNOLOGY, INC., a Delaware
corporation (the “Borrower”), the Lenders (as defined below) and CREDIT SUISSE,
acting through one or more of its branches, as agent for the Lenders (in such
capacity, the “Administrative Agent”) and as agent for the Secured Parties (as
defined below) under the Collateral Documents (as defined below) (in such
capacity, the “Collateral Agent”).

 

W I T N E S S E T H

 

WHEREAS, the Borrower has requested that the Lenders make available for the
purposes specified in this Agreement a term loan;

 

WHEREAS, the Lenders are willing to make available to the Borrower such term
loan upon the terms and subject to the conditions set forth herein; and

 

WHEREAS, contemporaneously herewith, the Borrower will obtain a first lien term
loan in an aggregate principal amount of $185,000,000 and a first lien revolving
loan and letter of credit facility in an aggregate principal amount of
$25,000,000 pursuant to the First Lien Credit Agreement (as defined below);

 

NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

 

Section 1.1 Defined Terms

 

As used in this Agreement, the following terms have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):

 

“Account” has the meaning given to such term in the UCC.

 

“Account Debtor” has the meaning given to such term in the UCC.

 

“Adjusted Treasury Rate” means, with respect to any calculation date, (a) (i)
the yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated “H.15(519)” or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States treasury securities adjusted to constant
maturity under the caption “Treasury Constant Maturities,” for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after June 28, 2008, yields for the two published maturities
most closely corresponding to the Comparable Treasury Issue shall be determined
and the Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per year equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such calculation date, in each case calculated on the third
Business Day immediately preceding the calculation date plus (b) 0.50%.

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2ND LIEN CREDIT AGREEMENT

KNOLOGY, INC.

 

“Administrative Agent” has the meaning specified in the preamble to this
Agreement.

 

“Affected Lender” has the meaning specified in Section 2.14 (Substitution of
Lenders).

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling or that is controlled by or is under common control with
such Person, each officer, director, general partner or joint-venturer of such
Person, and each Person that is the beneficial owner of 5% or more of any class
of Voting Stock of such Person. For the purposes of this definition, “control”
means the possession of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Agent Affiliate” has the meaning specified in Section 10.3 (Posting of Approved
Electronic Communications).

 

“Agents” means each of the Administrative Agent and the Collateral Agent.

 

“Agreement” means this Credit Agreement.

 

“Annualized” means for purposes of calculating EBITDA in connection with
determining the Leverage Ratio, (a) with respect to any amount of EBITDA
attributable to one Fiscal Quarter, such amount multiplied by four, (b) with
respect to any amount of EBITDA attributable to two Fiscal Quarters, such amount
multiplied by two, and (c) with respect to any amount of EBITDA attributable to
three Fiscal Quarters, such amount divided by 0.75.

 

“Applicable Lending Office” means, with respect to each Lender, its Domestic
Lending Office in the case of a Base Rate Term Loan, and its Eurodollar Lending
Office in the case of a Eurodollar Rate Term Loan.

 

“Applicable Margin” means, with respect to Term Loans maintained (a) as Base
Rate Loans, a rate equal to 9.0% per annum and (b) as Eurodollar Rate Loans, a
rate equal to 10.0% per annum. Notwithstanding the foregoing, the Applicable
Margin shall be successively increased on each date set forth below by the
corresponding amount set forth below under “Margin Increase” if, on such date,
the Borrower shall have failed to cause each Subsidiary listed on Schedule
8.10(b) (Restricted Subsidiaries) to (i) obtain the PUC Authorizations required
by Section 8.10(b) (Limitations on Restrictions on Subsidiary Distributions; No
New Negative Pledge; Restricted Subsidiaries) and (ii) satisfy Subsidiary
Guaranty Requirements:

 

DATE

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MARGIN INCREASE

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

September 1, 2005

   25 basis points

November 1, 2005

   25 basis points

April 1, 2006

   25 basis points

 

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2ND LIEN CREDIT AGREEMENT

KNOLOGY, INC.

 

On the date on which all of the foregoing requirements have been satisfied, the
Applicable Margin shall, from and after such date, revert to the rates set forth
in clauses (a) and (b) above.

 

“Applicable Prepayment Premium” means, with respect to any optional prepayment
of the Term Loans pursuant to Section 2.5(a) (Optional Prepayments) or any
purchase of Term Loans of a Non-Consenting Lender pursuant to Section 11.1(c)
(Amendments, Waivers, Etc.), an amount determined by multiplying (as applicable)
the principal amount of the Term Loans being prepaid or purchased, as the case
may be, (i) the Applicable Treasury Premium for any such prepayment, termination
or purchase made on or before June 29, 2008 or (ii) on any date thereafter, the
applicable percentage set forth below under the caption “Prepayment Percentage”
opposite the then applicable period set forth below:

 

PERIOD

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

  

APPLICABLE PREPAYMENT

PERCENTAGE

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After June 29, 2008 but on or before June 29, 2009

   3.0%

After June 29 ,2009 but on or before June 29, 2010

   2.0%

After June 29, 2010

   1.0%

 

“Applicable Treasury Premium” means, with respect to any optional prepayment of
the Term Loans pursuant to Section 2.5(a) (Optional Prepayments) or any purchase
or Term Loans of a Non-Consenting Lender pursuant to Section 11.1(c)
(Amendments, Waivers, Etc.), the greater of (a) 3% of the principal amount of
such prepayment or purchase and (b) the excess of (i) the present value at such
time of (A) the principal amount of such prepayment or purchase multiplied by
the applicable “Prepayment Percentage” (as set forth in the definition of
“Applicable Prepayment Premium”) of such Loan on June 29, 2008 (exclusive of any
accrued interest) plus (B) all required remaining scheduled interest payments
due on the Term Loans subject to prepayment or purchases, as the case may be,
through June 29, 2008 (assuming, for such calculation, that the interest rate in
effect shall be fixed at the weighted average of all interest rates applicable
to the corresponding Loans outstanding on the date of such calculation) (but
excluding accrued and unpaid interest to the calculation date), computed using a
discount rate equal to the Adjusted Treasury Rate, over (ii) the principal
amount of such Term Loans on such calculation date.

 

“Approved Deposit Account” means a Deposit Account that is the subject of an
effective Deposit Account Control Agreement and that is maintained by any Loan
Party with a Deposit Account Bank. “Approved Deposit Account” includes all
monies on deposit in a Deposit Account and all certificates and instruments, if
any, representing or evidencing such Deposit Account.

 

“Approved Electronic Communications” means each notice, demand, communication,
information, document and other material that any Loan Party is obligated to, or
otherwise chooses to, provide to the Administrative Agent pursuant to any Loan
Document or the transactions contemplated therein, including (a) any supplement
to the Guaranty, any joinder to the Pledge and Security Agreement and any other
written Contractual Obligation delivered or required to be delivered in respect
of any Loan Document or the transactions contemplated therein and (b) any
Financial Statement, financial and other report, notice, request, certificate
and other information material; provided, however, that, “Approved Electronic
Communication” shall

 

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2ND LIEN CREDIT AGREEMENT

KNOLOGY, INC.

 

exclude (i) any Notice of Borrowing, Notice of Conversion or Continuation, and
any other notice, demand, communication, information, document and other
material relating to a request for a new, or a conversion of an existing,
Borrowing, (ii) any notice pursuant to Section 2.5 (Optional Prepayments) and
Section 2.6 (Mandatory Prepayments) and any other notice relating to the payment
of any principal or other amount due under any Loan Document prior to the
scheduled date therefor, (iii) all notices of any Default or Event of Default
and (iv) any notice, demand, communication, information, document and other
material required to be delivered to satisfy any condition to any Borrowing or
other extension of credit hereunder or any condition precedent to the
effectiveness of this Agreement.

 

“Approved Electronic Platform” has the meaning specified in Section 10.3
(Posting of Approved Electronic Communications).

 

“Approved Fund” means any Fund that is advised or managed by (a) a Lender, (b)
an Affiliate of a Lender or (c) an entity or Affiliate of an entity that
advises, administers or manages a Lender or another Fund.

 

“Approved Securities Intermediary” means a “securities intermediary” or
“commodity intermediary” (as such terms are defined in the UCC) selected or
approved by the Administrative Agent.

 

“Arranger” means CSFB.

 

“Asset Sale” has the meaning specified in Section 8.4 (Sale of Assets).

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit A (Form of Assignment and Acceptance).

 

“Bankruptcy Code” means title 11, United States Code.

 

“Base Rate” means, for any period, a rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus ½ of 1%. For purposes hereof: “Prime Rate” shall mean the rate of
interest determined from time to time by the Administrative Agent as being its
reference rate then in effect for determining interest rates on Dollar
denominated commercial loans made by it in the U.S. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually available. Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, or the Federal
Funds Effective Rate, respectively.

 

“Base Rate Loan” means any Term Loan during any period in which it bears
interest based on the Base Rate.

 

“Borrower” has the meaning specified in the preamble to this Agreement.

 

“Borrower’s Accountants” means Deloitte & Touche LLP or other independent
nationally-recognized public accountants acceptable to the Administrative Agent.

 

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2ND LIEN CREDIT AGREEMENT

KNOLOGY, INC.

 

“Borrowing” means a Term Loan Borrowing.

 

“Broadband Account” means the treasury liquidity account #3404914806 maintained
by Knology Broadband, Inc. at Capital City Bank.

 

“Broadband Services” means all broadband communication services, including
Broadband Carrier Services, cable television, telephone, other
telecommunications and high-speed internet access service, provided by any
Person to residential, business or other customers.

 

“Broadband Carrier Services” means, collectively, the provision of certain
wholesale telecommunication transport services over the broadband hybrid-fiber
coax network (“Broadband Network”), primarily to Interexchange Carriers (“IXC”),
Internet Service Providers (“ISP”) and large multi-location commercial
enterprises desiring high capacity connectivity within a Metropolitan Service
Area (“MSA”). These services are termed (a) Internal Local Transport (“ILT”) by
which ISP’s are connected from their point-of-presence (“POP”) to end-users at
wholesale transport revenue rates per customer (as distinguished from the
provision of high-speed Internet access at retail revenue rates using the
Olobahn brand name), (b) Local Exchange Transport (“LET”) by which IXCs are
connected to end-users, Local Exchange Carriers (“LEC”) or other IXCs via the
Broadband Network and/or twisted pair cabling, (c) Private Line Services by
which carriers or commercial businesses operating in multiple locations within
the MSA are interconnected via point-to-point facilities owned or leased by any
Person and (d) Special Access Services by which corporate locations or central
offices are directly connected to an IXS point-of-presence.

 

“Business Day” means a day of the year on which banks are not required or
authorized to close in New York City and, if the applicable Business Day relates
to notices, determinations, fundings and payments in connection with the
Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar
deposits are also carried on in the London interbank market.

 

“Cable Act” means the Cable Television Communications Policy Act of 1984, as
amended by the Consumer Protection and Competition Act of 1992, and the
Telecommunications Act of 1996, and as further amended or supplemented from time
to time.

 

“Capital Expenditures” means, with respect to the Borrower and its Subsidiaries,
for any period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a Consolidated balance sheet of such Person and
its Subsidiaries (in accordance with GAAP) but excluding (a) interest
capitalized during construction, (b) expenditures on such property, plant or
equipment funded with Net Cash Proceeds from any Asset Sale, Equity Issuance or
Property Loss Event or funded from Excess Cash Flow and (c) expenditures in
connection with Permitted MDU Transactions and Permitted CIU Transactions, in
each case, to the extent treated as Capital Lease Obligations in accordance with
GAAP (except, in the case of expenditures under this clause (c), expenditures
funded from available cash of the Borrower or its Subsidiaries).

 

“Capital Lease” means, with respect to any Person, any lease of, or other
arrangement conveying the right to use, property by such Person as lessee that
would be accounted for as a capital lease on a balance sheet of such Person
prepared in conformity with GAAP.

 

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2ND LIEN CREDIT AGREEMENT

KNOLOGY, INC.

 

“Capital Lease Obligations” means, with respect to any Person, the capitalized
amount of all Consolidated obligations of such Person or any of its Subsidiaries
under Capital Leases.

 

“Cash Collateral Account” means any Deposit Account or Securities Account that
is established (a) by the Administrative Agent or Collateral Agent from time to
time in its sole discretion to receive cash and Cash Equivalents (or purchase
cash or Cash Equivalents with funds received) from the Loan Parties or Persons
acting on their behalf pursuant to the Loan Documents, (b) with such
depositaries and securities intermediaries as the Administrative Agent may
determine in its sole discretion, (c) in the name of the Administrative Agent or
Collateral Agent (although such account may also have words referring to the
Borrower and the account’s purpose), (d) under the control of the Administrative
Agent or Collateral Agent and (e) as a Securities Account, with respect to which
the Administrative Agent or Collateral Agent shall be the Entitlement Holder and
the only Person authorized to give Entitlement Orders with respect thereto.

 

“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States of America or issued by any
agency thereof and backed by the full faith and credit of the United States of
America or any agency, state or territory thereof, in each case maturing within
one year from the date of acquisition; (b) certificates of deposit, time
deposits or overnight bank deposits having maturities of 364 days or less from
the date of acquisition issued by any Lender or by any commercial bank or trust
company organized under the laws of the United States of America or any state
thereof and having combined capital and surplus of not less than $500,000,000;
(c) commercial paper, bonds, notes or debentures of an issuer rated at least
“A-2” by S&P or “P-2” by Moody’s or carrying an equivalent rating by a
nationally recognized rating agency, if all of the three named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within 364 days from the date of acquisition; (d) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause (b) of
this definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States of
America; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States of America, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least “A” by S&P, or “A” by Moody’s; (f) securities with maturities of
364 days or less from the date of acquisition backed by standby letters of
credit issued by any Lender or any commercial bank satisfying the requirements
of clause (b) of this definition; and (g) shares of money market mutual or
similar funds which invest exclusively in assets satisfying the requirements of
any of clauses (a) through (f) of this definition.

 

“Cash Interest Expense” means, with respect to the Borrower for any period, the
sum of the Interest Expense of the Borrower for such period less the Non-Cash
Interest Expense of the Borrower for such period and (b) the amount of dividends
paid in cash during such period in respect of the New Preferred Stock and any
other Stock of the Borrower with terms substantially similar to the New
Preferred Stock.

 

“CATV Franchise” means (a) any franchise, license, permit, wire agreement or
easement granted by any local Governmental Authority, including any local
franchising authority, pursuant to which any Person has the right or license to
provide Broadband Services or to operate

 

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2ND LIEN CREDIT AGREEMENT

KNOLOGY, INC.

 

any cable distribution system for the purpose of receiving and distributing
audio, video, digital, other broadcast signals or information or
telecommunications by cable, optical, antenna, microwave or satellite
transmission and (b) any law, regulation, ordinance, agreement or other
instrument or document expressly setting forth all or any part of the terms of
any franchise, license, permit, wire agreement or easement described in clause
(a) of this definition (excluding any law, regulation, ordinance, agreement,
instrument or document which relates to but does not expressly set forth any
terms of any such franchise, license, permit, wire agreement or easement).

 

“Cerritos Sale” the sale of substantially all of the assets of Knology Broadband
of California, Inc., a Delaware corporation, pursuant to the Asset Purchase
Agreement, dated March 24th, 2005, between Knology Broadband of California, Inc.
and WaveDivision Holdings LLC, a Delaware limited liability company or any
replacement agreement with any Person (other than an Affiliate of the Borrower)
containing substantially the same economic terms and otherwise reasonably
satisfactory to the Administrative Agent.

 

“Change of Control” means the occurrence of any of the following:

 

(a) any person or group of persons (within the meaning of the Exchange Act)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Exchange Act) of 50% or more of
the issued and outstanding Voting Stock of Borrower;

 

(b) during any period of twelve consecutive calendar months, individuals who, at
the beginning of such period, constituted the board of directors of Borrower
(together with any new directors whose election by the board of directors of
Borrower or whose nomination for election by the stockholders of Borrower was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose elections or
nomination for election was previously so approved) cease for any reason other
than death or disability to constitute a majority of the directors then in
office; or

 

(c) any “Change of Control” or equivalent term as defined in any Constituent
Document relating to the New Preferred Stock of the Borrower or any additional
preferred stock of the Borrower.

 

“Closing Date” means the first date on which any Term Loan is made.

 

“Code” means the U.S. Internal Revenue Code of 1986, as currently amended.

 

“Collateral” means all property and interests in property and proceeds thereof
now owned or hereafter acquired by any Loan Party in or upon which a Lien is
granted under any Collateral Document.

 

“Collateral Agent” has the meaning specified in the preamble to the Agreement.

 

“Collateral Documents” means the Pledge and Security Agreement, the Mortgages,
the Deposit Account Control Agreements, the Securities Account Control
Agreements and any other document executed and delivered by a Loan Party
granting a Lien on any of its property to secure payment of the Secured
Obligations.

 

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“Commitment” means, with respect to each Term Loan Lender, the commitment of
such Lender to make Term Loans to the Borrower in the aggregate principal amount
outstanding not to exceed the amount set forth opposite such Lender’s name on
Schedule I (Commitments) under the caption “Term Loan Commitment” as amended to
reflect each Assignment and Acceptance executed by such Lender and as such
amount may be reduced pursuant to this Agreement and “Commitments” means the
aggregate Commitments of all Lenders.

 

“Commodity Account” has the meaning given to such term in the UCC.

 

“Communications License” means any local telecommunications, long distance
telecommunications, or other license, permit, consent, certificate of
compliance, franchise, approval, waiver or authorization granted or issued by
the FCC or other applicable federal Governmental Authority pertaining to the
provision of Broadband Services, including any of the foregoing authorizing or
permitting the acquisition, construction or operation of any Interactive
Broadband Network.

 

“Comparable Treasury Issue” means, with respect to any prepayment date, the
United States treasury security selected by the Administrative Agent as having a
maturity comparable to the remaining term of the applicable Term Loans from such
prepayment date to June 29, 2008, that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of a maturity most nearly equal to June 29,
2008.

 

“Comparable Treasury Price” means, with respect to any prepayment date, if
clause (ii) of the Adjusted Treasury Rate is applicable, the average of three,
or such lesser number as is obtained by the Administrative Agent, Reference
Treasury Dealer Quotations for such prepayment date.

 

“Compliance Certificate” has the meaning specified in Section 6.1(d) (Financial
Statements).

 

“Confidential Information Memorandum” means the Confidential Information
Memorandum, dated as of May 2005, prepared by the Borrower in connection with
the syndication of the Term Loan Facility.

 

“Consolidated” means, with respect to any Person, the consolidation of accounts
of such Person and its Subsidiaries in accordance with GAAP.

 

“Consolidated Current Assets” means, with respect to any Person at any date, the
total Consolidated current assets (other than cash and Cash Equivalents) of such
Person and its Subsidiaries at such date.

 

“Consolidated Current Liabilities” means, with respect to any Person at any
date, all liabilities of such Person and its Subsidiaries at such date that
should be classified as current liabilities on a Consolidated balance sheet of
such Person and its Subsidiaries, but excluding, in the case of the Borrower the
sum of (a) the principal amount of any current portion of long-term Financial
Covenant Debt and (b) (without duplication of clause (a) above) the then
outstanding principal amount of the Term Loans.

 

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2ND LIEN CREDIT AGREEMENT

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“Consolidated Net Income” means, for any Person, for any period, the
Consolidated net income (or loss) of such Person and its Subsidiaries for such
period; provided, however, that (a) the net income of any other Person in which
such Person or one of its Subsidiaries has a joint interest with a third party
(which interest does not cause the net income of such other Person to be
Consolidated into the net income of such Person) shall be included only to the
extent of the amount of dividends or distributions paid to such Person or
Subsidiary, (b) the net income of any Subsidiary of such Person that is subject
to any restriction or limitation on the payment of dividends or the making of
other distributions shall be excluded to the extent of such restriction or
limitation, (c) extraordinary and non-recurring gains and losses and any
one-time increase or decrease to net income that is required to be recorded
because of the adoption of new accounting policies, practices or standards
required by GAAP shall be excluded and (d) net income from or attributable to
discontinued operations of such Person and its Subsidiaries shall be excluded.

 

“Constituent Documents” means, with respect to any Person, (a) the articles of
incorporation, certificate of incorporation, constitution or certificate of
formation (or the equivalent organizational documents) of such Person, (b) the
by-laws, operating agreement (or the equivalent governing documents) of such
Person and (c) any document setting forth the manner of election or duties of
the directors or managing members of such Person (if any) and the designation,
amount or relative rights, limitations and preferences of any class or series of
such Person’s Stock.

 

“Contaminant” means any material, substance or waste that is classified,
regulated or otherwise characterized under any Environmental Law as hazardous,
toxic, a contaminant or a pollutant or by other words of similar meaning or
regulatory effect, including any petroleum or petroleum-derived substance or
waste, asbestos and polychlorinated biphenyls.

 

“Contractual Obligation” of any Person means any obligation, agreement,
undertaking or similar provision of any Security issued by such Person or of any
agreement, undertaking, contract, lease, indenture, mortgage, deed of trust or
other instrument (excluding a Loan Document) to which such Person is a party or
by which it or any of its property is bound or to which any of its property is
subject.

 

“Control Account” means a Securities Account or Commodity Account that is the
subject of an effective Securities Account Control Agreement and that is
maintained by any Loan Party with an Approved Securities Intermediary. “Control
Account” includes all Financial Assets held in a Securities Account or a
Commodity Account and all certificates and instruments, if any, representing or
evidencing the Financial Assets contained therein.

 

“Corporate Chart” means a corporate organizational chart, list or other similar
document in each case in form reasonably acceptable to the Administrative Agent
and setting forth, for each Person that is a Loan Party, that is subject to
Section 7.11 (Additional Collateral and Guaranties) or that is a Subsidiary of
any of them, (a) the full legal name of such Person (and any trade name,
fictitious name or other name such Person may have had or operated under), (b)
the jurisdiction of organization, the organizational number (if any) and the tax
identification number (if any) of such Person, (c) the location of such Person’s
chief executive office (or sole place of business) and (d) the number of shares
of each class of such Person’s Stock authorized (if applicable), the number
outstanding as of the date of delivery and the number and percentage of such
outstanding shares for each such class owned (directly or indirectly) by any
Loan Party or any Subsidiary of any of them.

 

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2ND LIEN CREDIT AGREEMENT

KNOLOGY, INC.

 

“CSFB” means Credit Suisse, acting through one or more of its branches and any
Affiliate thereof.

 

“Customary Permitted Liens” means, with respect to any Person, any of the
following Liens:

 

(a) Liens with respect to the payment of taxes, assessments or governmental
charges in each case that are not yet due or that are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained to the extent required by
GAAP;

 

(b) Liens of landlords arising by statute and liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens, in each
case (i) imposed by law or arising in the ordinary course of business, (ii) for
amounts not yet due or that are being contested in good faith by appropriate
proceedings and (iii) with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP;

 

(c) deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance or other types of social security benefits
or to secure the performance of bids, tenders, sales, contracts (other than for
the repayment of borrowed money) and surety, appeal, customs or performance
bonds entered into in the ordinary course of business;

 

(d) encumbrances arising by reason of zoning restrictions, easements, licenses,
reservations, covenants, rights-of-way, utility easements, building restrictions
and other similar encumbrances on the use of real property not materially
detracting from the value of such real property or not materially interfering
with the ordinary conduct of the business conducted and proposed to be conducted
at such real property;

 

(e) encumbrances arising under leases or subleases of real property that do not,
in the aggregate, materially detract from the value of such real property or
interfere with the ordinary conduct of the business conducted and proposed to be
conducted at such real property;

 

(f) financing statements with respect to a lessor’s rights in and to personal
property leased to such Person in the ordinary course of such Person’s business
other than through a Capital Lease;

 

(g) Liens created in the ordinary course of business on assets subject to
rights-of-way, pole attachment, use of conduit, use of trenches or similar
agreements securing any Loan Party’s obligations under such agreements;
provided, however, that such Liens apply only to the assets subject to any of
the foregoing agreements;

 

(h) judgment Liens in existence for less than 45 days after the entry thereof or
with respect to which execution has been stayed or the payment of which is
covered in full (subject to a customary deductible) by insurance maintained with
nationally recognized insurance companies and which do not otherwise result in a
Default or Event of Default; and

 

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(i) Liens consisting of rights of set-off of a customary nature or bankers’
liens on an amount of deposit, whether arising by contract or operation of law,
incurred in the ordinary course of business so long as such deposits are not
intended as collateral for any obligation.

 

“Debt Issuance” means the incurrence of Indebtedness of the type specified in
clause (a) or (b) of the definition of “Indebtedness” by the Borrower or any of
its Subsidiaries.

 

“Declining Lender” has the meaning specified in Section 2.6(e) (Mandatory
Prepayments).

 

“Declining Second Lien Term Lender” has the meaning specified in Section 2.6(d)
(Mandatory Prepayments).

 

“Default” means any event that, with the passing of time or the giving of notice
or both, would become an Event of Default.

 

“Deposit Account” has the meaning given to such term in the UCC.

 

“Deposit Account Bank” means a financial institution selected or approved by the
Administrative Agent.

 

“Deposit Account Control Agreement” has the meaning specified in the Pledge and
Security Agreement.

 

“Disclosure Documents” means, collectively, the Form 10-K, Form 10-Q and Form
8-K filed by the Borrower with the Securities and Exchange Commission, as
amended from time to time.

 

“Dollar Equivalent” of any amount means, at the time of determination thereof,
(a) if such amount is expressed in Dollars, such amount, (b) if such amount is
expressed in a currency other than Dollars, the equivalent of such amount in
Dollars determined by using the rate of exchange quoted by CSFB in New York, New
York at 10:00 a.m. (New York time) on the date of determination (or, if such
date is not a Business Day, the last Business Day prior thereto) to prime banks
in New York for the spot purchase in the New York foreign exchange market of
such amount of Dollars with such other currency and (c) if such amount is
denominated in any currency not quoted by CSFB in New York, the equivalent of
such amount in Dollars as determined by the Administrative Agent using any
method of determination it deems appropriate.

 

“Dollars” and the sign “$” each mean the lawful money of the United States of
America.

 

“Domestic Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” opposite its name on Schedule
II (Applicable Lending Offices and Addresses for Notices) or on the Assignment
and Acceptance by which it became a Lender or such other office of such Lender
as such Lender may from time to time specify to the Borrower and the
Administrative Agent.

 

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2ND LIEN CREDIT AGREEMENT

KNOLOGY, INC.

 

“Domestic Person” means any “United States person” under and as defined in
Section 770 l(a)(30) of the Code.

 

“Domestic Subsidiary” means any Subsidiary of the Borrower organized under the
laws of any state of the United States of America or the District of Columbia.

 

“EBITDA” means, with respect to any Person for any period, (a) Consolidated Net
Income of such Person for such period plus (b) the sum of, in each case to the
extent included in the calculation of such Consolidated Net Income but without
duplication, (i) any provision for income taxes, (ii) Interest Expense, (iii)
loss from extraordinary items, litigation expenses not exceeding $1,000,000 in
the aggregate over the term of this Agreement, cash charges resulting from
hurricanes, floods, tornadoes, earthquakes or other natural disasters, (iv)
depreciation, depletion and amortization expenses, (v) all other non-cash
charges and non-cash losses for such period, including the amount of any
compensation deduction as the result of any grant of Stock or Stock Equivalents
to employees, officers, directors or consultants; provided, that to the extent
any amount of non-cash charges for any period are subsequently paid in cash,
EBITDA shall be reduced by such cash payment for that period, (vi) with respect
to the first Fiscal Quarter of 2005, a one-time severance benefit charge of
$198,027, (vii) all cash expenses incurred in connection with (A) the Term Loan
Facility, the First Lien Facilities, the issuance of New Preferred Stock and the
refinancing of the Existing Indebtedness (B) any capital markets transaction
(including any merger or acquisition transaction) for the issuance of any debt,
equity or convertible security, whether or not such transaction is completed and
(C) any Asset Sale, whether or not such Asset Sale is completed; provided, that,
with respect to transactions specified in clauses (B) and (C) above that are not
completed, the aggregate amount of such cash expenses shall not exceed $500,000
during any Fiscal Year, (viii) fees and costs associated with the early
extinguishment of Indebtedness and (ix) non-cash losses from Asset Sales minus
(c) the sum of, in each case to the extent included in the calculation of such
Consolidated Net Income but without duplication, (i) any credit for income
taxes, (ii) interest income, (iii) gains from extraordinary items for such
period, (iv) any aggregate net gain from the sale, exchange or other disposition
of capital assets by such Person and (v) any other non-cash gains or other items
which have been added in determining Consolidated Net Income, including any
reversal of a change referred to in clause (b)(v) above by reason of a decrease
in the value of any Stock or Stock Equivalent.

 

“Eligible Assignee” means (a) a Lender or an Affiliate or Approved Fund of any
Lender, (b) a commercial bank having total assets whose Dollar Equivalent
exceeds $5,000,000,000, (c) a finance company, insurance company or any other
financial institution or Fund, in each case reasonably acceptable to the
Administrative Agent and regularly engaged in making, purchasing or investing in
loans and (d) a savings and loan association or savings bank organized under the
laws of the United States or any state thereof having a net worth, determined in
accordance with GAAP, whose Dollar Equivalent exceeds $250,000,000.

 

“Entitlement Holder” has the meaning given to such term in the UCC.

 

“Entitlement Order” has the meaning given to such term in the UCC.

 

“Environmental Laws” means all applicable Requirements of Law now or hereafter
in effect and as amended or supplemented from time to time, relating to
pollution or the regulation and protection of human or animal health, safety,
the environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. § 9601
et seq.); the Hazardous Material Transportation Act, as amended

 

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KNOLOGY, INC.

 

(49 U.S.C. § 5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide
Act, as amended (7 U.S.C. § 136 et seq.); the Resource Conservation and Recovery
Act, as amended (42 U.S.C. § 6901 et seq.); the Toxic Substance Control Act, as
amended (15 U.S.C. § 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. §
7401 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C. §
1251 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. §
651 et seq.); the Safe Drinking Water Act, as amended (42 U.S.C. § 300f et
seq.); and each of their state and local counterparts or equivalents and any
transfer of ownership notification or approval statute, including the Industrial
Site Recovery Act (N.J. Stat. Ann. § 13:1K-6 et seq.).

 

“Environmental Liabilities and Costs” means, with respect to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and
consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute and whether arising under any
Environmental Law, Permit, order or agreement with any Governmental Authority or
other Person, in each case relating to any environmental, health or safety
condition or to any Release or threatened Release and resulting from the past,
present or future operations of, or ownership of property by, such Person or any
of its Subsidiaries.

 

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

 

“Equipment” has the meaning given to such term in the UCC.

 

“Equity Issuance” means the issue or sale of any Stock of the Borrower or any
Subsidiary of the Borrower by the Borrower or any Subsidiary of the Borrower to
any Person other than the Borrower or any Subsidiary of the Borrower.

 

“ERISA” means the United States Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control or treated as a single employer with the Borrower or any of
its Subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the
Code.

 

“ERISA Event” means (a) a reportable event described in Section 4043(b) or
4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a Title IV
Plan or a Multiemployer Plan, (b) the withdrawal of the Borrower, any of its
Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA, (c) the complete or partial withdrawal of the
Borrower, any of its Subsidiaries or any ERISA Affiliate from any Multiemployer
Plan, (d) notice of reorganization or insolvency of a Multiemployer Plan, (e)
the filing of a notice of intent to terminate a Title IV Plan or the treatment
of a plan amendment as a termination under Section 4041 of ERISA, (f) the
institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by
the PBGC, (g) the failure to make any required contribution to a Title IV Plan
or Multiemployer Plan, (h) the imposition of a lien under Section 412 of the
Code or Section 302 of ERISA on the Borrower or any of its Subsidiaries or any
ERISA Affiliate or (i) any other event or condition that might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Title IV Plan or
Multiemployer Plan or the imposition of any liability under Title IV of ERISA,
other than for PBGC premiums due but not delinquent under Section 4007 of ERISA.

 

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KNOLOGY, INC.

 

“Escrow Agreement” means the escrow agreement, dated as of the date hereof, by
and among the Borrower, the Administrative Agent, and CSFB, as escrow agent.

 

“Eurocurrency Reserve Requirements” means, for any period, the aggregate
(without duplication) of the maximum rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves) under any regulations of
the Federal Reserve Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.

 

“Eurodollar Base Rate” means, with respect to each day during each Interest
Period, the rate per annum determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the first day
of such Interest Period by reference to the British Bankers’ Association
Interest Settlement Rates for deposits in Dollars (as set forth by the Bloomberg
Information Service or any successor thereto or any other service selected by
the Administrative Agent which has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) as of 11:00 A.M., London time, two Business Days prior to the
beginning of such Interest Period. In the event that such rate is not
ascertainable pursuant to the foregoing provisions of this definition, the
“Eurodollar Base Rate” for purposes of this definition shall be determined by
reference to such other comparable publicly available service for displaying
Eurodollar rates as may be selected by the Administrative Agent.

 

“Eurodollar Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Eurodollar Lending Office” opposite its name on
Schedule II (Applicable Lending Offices and Addresses for Notices) or on the
Assignment and Acceptance by which it became a Lender (or, if no such office is
specified, its Domestic Lending Office) or such other office of such Lender as
such Lender may from time to time specify to the Borrower and the Administrative
Agent.

 

“Eurodollar Rate” means, with respect to any Interest Period for any Eurodollar
Rate Loan, an interest rate per annum determined for such day in accordance with
the following formula:

 

   

Eurodollar Base Rate

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

1.00 - Eurocurrency Reserve Requirements

   

 

“Eurodollar Rate Loan” means any Term Loan that, for an Interest Period, bears
interest based on the Eurodollar Rate.

 

“Event of Default” has the meaning specified in Section 9.1 (Events of Default).

 

“Excess Cash Flow” means, for the Borrower for any period, (a) EBITDA of the
Borrower for such period plus (b) the excess, if any, of the Working Capital of
the Borrower at the beginning of such period over the Working Capital of the
Borrower at the end of such period

 

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KNOLOGY, INC.

 

minus (c) the sum of (without duplication) (i) Cash Interest Expense (including
fees and costs associated with the early extinguishment of Indebtedness and
amounts under Capital Lease Obligations allocable as an interest component),
(ii) scheduled cash principal payments in respect of the First Lien Facilities
and on the Term Loans during such period and optional cash principal payments in
respect of the First Lien Facilities and on the Term Loans during such period
(but only, in the case of any payment in respect of the First Lien Revolving
Facility, to the extent that the “Revolving Credit Commitments” (as such term is
defined in the Credit Agreement) are permanently reduced by the amount of such
payments), (iii) scheduled cash principal payments made by the Borrower or any
of its Subsidiaries during such period on other Indebtedness to the extent such
other Indebtedness and payments are permitted by this Agreement, (iv) scheduled
payments made by the Borrower or any of its Subsidiaries on Capital Lease
Obligations to the extent such Capital Lease Obligations and payments are
permitted by this Agreement, (v) Capital Expenditures made by the Borrower or
any of its Subsidiaries during such period to the extent permitted by this
Agreement, (vi) the excess, if any, of the Working Capital of the Borrower at
the end of such period over the Working Capital of the Borrower at the beginning
of such period, (vii) cash income taxes paid during such period and (viii) cash
payments (other than from proceeds of Equity Issuances) with respect to
Investments made during such period and permitted under Section 8.3
(Investments) (other than investments pursuant to clause (b) thereof).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Foreign Subsidiary” means any Subsidiary that is not a Domestic
Subsidiary in respect of which either (a) the pledge of all of the Stock of such
Subsidiary as Collateral to secure payment of the Obligations of the Borrower,
(b) the grant of a Lien on any of its property as Collateral to secure payment
of the Obligations of the Borrower or (c) the guaranteeing by such Subsidiary of
the Obligations of the Borrower, would, in the good faith judgment of the
Borrower based on an analysis reasonably satisfactory to the Administrative
Agent, result in materially adverse tax consequences to the Loan Parties and
their Subsidiaries, taken as a whole.

 

“Existing CoBank Credit Agreement” means the Master Loan Agreement, dated as of
June 6, 2002, as amended and supplemented, among Interstate Telephone Company,
Inc. and Valley Telephone Company LLC, as borrowers, and CoBank, ACB, as lender.

 

“Existing Credit Agreements” means, collectively, the Existing CoBank Credit
Agreement and Existing Wachovia Credit Agreement.

 

“Existing Indebtedness” means all amounts outstanding or owed, including
principal, accrued and unpaid interest, fees and expenses, under or in
connection with the Existing Notes and the Existing Credit Agreements.

 

“Existing Indenture” means the Indenture, dated November 6, 2002, as amended and
supplemented, between the Borrower, as issuer, and Wilmington Trust Company, as
trustee.

 

“Existing Notes” means the 12% senior notes due 2009 issued pursuant to the
Existing Indenture.

 

“Existing Wachovia Credit Agreement” means the Amended and Restated Credit
Agreement, dated as of October 22, 2002, as amended, among Knology Broadband, as
guarantor, certain subsidiaries of Knology Broadband named therein, as
borrowers, the institutions party thereto as lenders and issuing banks and the
administrative agent named therein.

 

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2ND LIEN CREDIT AGREEMENT

KNOLOGY, INC.

 

“Fair Market Value” means (a) with respect to any asset or group of assets
(other than a marketable Security) at any date, the value of the consideration
obtainable in a sale of such asset at such date assuming a sale by a willing
seller to a willing purchaser dealing at arm’s length and arranged in an orderly
manner over a reasonable period of time having regard to the nature and
characteristics of such asset, as reasonably determined by the board of
directors of the Borrower or, if such asset shall have been the subject of a
relatively contemporaneous appraisal by an independent third party appraiser,
the basic assumptions underlying which have not materially changed since its
date, the value set forth in such appraisal and (b) with respect to any
marketable Security at any date, the closing sale price of such Security on the
Business Day next preceding such date, as appearing in any published list of any
national securities exchange or the NASDAQ Stock Market or, if there is no such
closing sale price of such Security, the final price for the purchase of such
Security at face value quoted on such Business Day by a financial institution of
recognized standing regularly dealing in Securities of such type and selected by
the Administrative Agent.

 

“FCC” means the Federal Communications Commission or any successor Governmental
Authority.

 

“Federal Funds Rate” means, for any period, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it.

 

“Federal Reserve Board” means the Board of Governors of the United States
Federal Reserve System, or any successor thereto.

 

“Fee Letter” shall mean the letter, dated as of May 4, 2005, addressed to the
Borrower from the Arranger and accepted by the Borrower on May 4, 2005, with
respect to certain fees to be paid from time to time to CSFB.

 

“Financial Asset” has the meaning given to such term in the UCC.

 

“Financial Covenant Debt” means, as of any date of determination, the aggregate
amount of the Indebtedness of the Borrower and its Subsidiaries of the type
specified, without duplication, in (i) clauses (a), (b), (d), (e), (f), (g) and
(h) of the definition of “Indebtedness”, (ii) non-contingent obligations of the
type specified in clause (c) of such definition and (iii) obligations of the
type specified in clauses (i) and (j) of such definition to the extent such
obligations constitute balance sheet indebtedness under GAAP (but excluding (x)
Indebtedness under any notes permitted pursuant to clause (j) of the Section
8.1(Indebtedness) and (y) Indebtedness in respect of the Existing Notes to the
extent an amount equal to such Indebtedness is deposited by the Borrower with
CSFB pursuant to the Escrow Agreement).

 

“Financial Statements” means the financial statements of the Borrower and its
Subsidiaries delivered in accordance with Section 4.4 (Financial Statements) and
Section 6.1 (Financial Statements).

 

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“First Lien Covenant Debt” means, as of any date of determination, the aggregate
amount of Consolidated Financial Covenant Debt outstanding on such date minus
the aggregate amount of Indebtedness outstanding under this Agreement on such
date.

 

“First Lien Credit Agreement” means the $210,000,000 First Lien Credit
Agreement, dated the date hereof, among the Borrower, the lenders from time to
time party thereto, Credit Suisse First Boston, acting through one or more of
its branches, as Administrative Agent and Collateral Agent, and Credit Suisse
First Boston, acting through one or more of its branches, as Sole Bookrunner and
Sole Lead Arranger, as it may be, subject to the terms of the Intercreditor
Agreement, amended, restated, supplemented or otherwise modified from time to
time.

 

“First Lien Facilities” means, collectively, the First Lien Revolving Facility
together with the First Lien Term Facility.

 

“First Lien Loan Documents” means the First Lien Credit Agreement, the
“Guaranty” and the “Pledge and Security Agreement”, each as defined in the First
Lien Credit Agreement, and any other agreements, mortgages or other documents
executed by the Borrower or any of its Subsidiaries in connection with the First
Lien Credit Agreement.

 

“First Lien Revolving Facility” means the first priority senior secured
revolving loan and letter of credit facility made to the Borrower pursuant to
the First Lien Credit Agreement in an aggregate principal amount not exceeding
$25,000,000.

 

“First Lien Term Facility” means the first priority senior secured term loan
facility made to the Borrower pursuant to the First Lien Credit Agreement in an
aggregate principal amount not exceeding $185,000,000.

 

“First Lien Term Lender” means each lender under the First Lien Term Facility.

 

“Fiscal Quarter” means each of the three-month fiscal periods of the Borrower
ending on March 31, June 30, September 30 and December 31.

 

“Fiscal Year” means the twelve-month fiscal period of the Borrower ending on
December 31.

 

“Fund” means any Person (other than a natural Person) that is or will be engaged
in making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its operations.

 

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, that are applicable to the circumstances as of the date of
determination.

 

“General Intangible” has the meaning given to such term in the UCC.

 

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“Governmental Authority” means any nation, sovereign or government, any state or
other political subdivision thereof and any entity or authority exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including any central bank or stock exchange and
including the FCC and each PUC.

 

“Guarantor” means each Subsidiary of the Borrower party to or that becomes party
to the Guaranty.

 

“Guaranty” means the guaranty, in substantially the form of Exhibit E (Form of
Guaranty), executed by the Guarantors.

 

“Guaranty Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, that any
agreement relating thereto will be complied with, or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof, including (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor or to
provide funds for the payment or discharge of such Indebtedness (whether in the
form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss or (v) to supply funds to, or in any other manner
invest in, such other Person (including to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under clause (b)(i), (ii),
(iii), (iv) or (v) above the primary purpose or intent thereof is to provide
assurance that Indebtedness of another Person will be paid or discharged, that
any agreement relating thereto will be complied with or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof. The amount of any Guaranty Obligation shall be equal to the amount of
the Indebtedness so guaranteed or otherwise supported.

 

“Hedging Contracts” means all Interest Rate Contracts, foreign exchange
contracts, currency swap or option agreements, forward contracts, commodity
swap, purchase or option agreements, other commodity price hedging arrangements
and all other similar agreements or arrangements designed to alter the risks of
any Person arising from fluctuations in interest rates, currency values or
commodity prices.

 

“Indebtedness” of any Person means without duplication (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person evidenced by
notes, bonds, debentures or similar instruments or that bear interest, (c) all
reimbursement and all obligations with respect to letters of credit, bankers’
acceptances, surety bonds and performance bonds, whether or not matured, (d) all
indebtedness for the deferred purchase price of property or services, other than
trade payables incurred in the ordinary course of business that are not more
than 60 days overdue, (e) all indebtedness of such Person created or arising
under any conditional

 

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sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (f) all Capital Lease Obligations of such Person and the present
value of future rental payments under all synthetic leases, (g) all Guaranty
Obligations of such Person, (h) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value any Stock or Stock
Equivalents of such Person, valued, in the case of redeemable preferred stock,
at the greater of its voluntary liquidation preference and its involuntary
liquidation preference plus accrued and unpaid dividends, in each case, if such
obligation is (or may be) required to be paid on or prior to the Maturity Date
(except for the New Preferred Stock or preferred stock of the Borrower having
substantially the same redemption terms as such New Preferred Stock), (i) all
payments that such Person would have to make in the event of an early
termination on the date Indebtedness of such Person is being determined in
respect of Hedging Contracts of such Person and (j) all Indebtedness of the type
referred to above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including Accounts and General Intangibles) owned by such Person,
even though such Person has not assumed or become liable for the payment of such
Indebtedness.

 

“Indemnified Matter” has the meaning specified in Section 11.4 (Indemnities).

 

“Indemnitee” has the meaning specified in Section 11.4 (Indemnities).

 

“Interactive Broadband Network” means any two-way, interactive, high-capacity
hybrid fiber-coaxial networks (including networks being constructed or to be
converted or upgraded to meet such criteria) owned or leased or operated by any
Person which provides Broadband Services.

 

“Intercreditor Agreement” means the Intercreditor Agreement in substantially the
form of Exhibit G (Form of Intercreditor Agreement), to be executed and
delivered by the Borrower, the Administrative Agent, the Collateral Agent and
the administrative agent and collateral agent under the First Lien Credit
Agreement.

 

“Interest Coverage Ratio” means, with respect to the Borrower and its
Subsidiaries on a Consolidated basis, for any period of determination, the ratio
of (a) EBITDA to (b) Cash Interest Expense for such period (excluding Interest
Expense in respect of Indebtedness outstanding under the Existing Notes to the
extent that such Indebtedness is fully deposited by the Borrower with CSFB
pursuant to the Escrow Agreement).

 

“Interest Expense” means, for any Person for any period, (a) Consolidated total
interest expense of such Person and its Subsidiaries for such period and
including, in any event, interest capitalized during such period and net costs
under Interest Rate Contracts for such period (excluding fees and costs
associated with the early extinguishment of Indebtedness) minus (b) Consolidated
net gains of such Person and its Subsidiaries under Interest Rate Contracts for
such period and minus (c) any Consolidated interest income of such Person and
its Subsidiaries for such period.

 

“Interest Payable In Cash” means, with respect to Term Loans maintained (a) as
Base Rate Loans, a rate equal to the Base Rate plus 7.5% per annum and (b) as
Eurodollar Rate Loans, a rate equal to the Eurodollar Rate plus 8.5% per annum.

 

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“Interest Period” means, in the case of any Eurodollar Rate Loan, (a) initially,
the period commencing on the date such Eurodollar Rate Loan is made, on the date
of conversion of a Base Rate Loan to such Eurodollar Rate Loan, or on the date
of the continuation of a Eurodollar Rate Loan as a Eurodollar Rate Loan and
ending one, two, three or six months thereafter, as selected by the Borrower in
its Notice of Borrowing or Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.2 (Borrowing Procedures) or Section
2.8 (Conversion/Continuation Option); provided, however, that (notwithstanding
the foregoing) prior to the Syndication Completion Date, no such period shall
exceed one month unless the Administrative Agent otherwise consents and
provided, further that all of the foregoing provisions relating to Interest
Periods in respect of Eurodollar Rate Loans are subject to the following:

 

(i) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day,
unless the result of such extension would be to extend such Interest Period into
another calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day;

 

(ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;

 

(iii) the Borrower may not select any Interest Period that ends after the date
of a scheduled principal payment on the Term Loans as set forth in Article II
(The Facilities) unless, after giving effect to such selection, the aggregate
unpaid principal amount of the Term Loans for which Interest Periods end after
such scheduled principal payment shall be equal to or less than the principal
amount to which the Term Loans are required to be reduced after such scheduled
principal payment is made;

 

(iv) the Borrower may not select any Interest Period in respect of Term Loans
having an aggregate principal amount of less than $1,000,000; and

 

(v) there shall be outstanding at any one time no more than six Interest Periods
in the aggregate.

 

“Interest Rate Contracts” means all interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements and interest rate insurance.

 

“Interstate Account” means the money market account #3404717501 maintained by
Interstate Telephone Co. at Capital City Bank.

 

“Inventory” has the meaning given to such term in the UCC.

 

“Investment” means, with respect to any Person, (a) any purchase or other
acquisition by such Person of (i) any Security issued by, (ii) a beneficial
interest in any Security issued by, or (iii) any other equity ownership interest
in, any other Person, (b) any purchase by such Person of all or a significant
part of the assets of a business conducted by any other Person, or all or
substantially all of the assets constituting the business of a division, branch
or other unit operation of any other Person, (c) any loan, advance (other than
deposits with financial

 

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institutions available for withdrawal on demand, prepaid expenses, accounts
receivable and similar items made or incurred in the ordinary course of business
as presently conducted) or capital contribution by such Person to any other
Person, including all Indebtedness of any other Person to such Person arising
from a sale of property by such Person other than in the ordinary course of its
business, and (d) any Guaranty Obligation incurred by such Person in respect of
Indebtedness of any other Person.

 

“IRS” means the Internal Revenue Service of the United States or any successor
thereto.

 

“Knology Broadband” means Knology Broadband, Inc., a Delaware corporation.

 

“Knology Georgia” means Knology of Georgia Inc., a Delaware corporation.

 

“Land” of any Person means all of those plots, pieces or parcels of land now
owned, leased or hereafter acquired or leased or purported to be owned, leased
or hereafter acquired or leased (including, in respect of the Loan Parties, as
reflected in the most recent Financial Statements) by such Person.

 

“Leases” means, with respect to any Person, all of those leasehold estates in
real property of such Person, as lessee, as such may be amended, supplemented or
otherwise modified from time to time.

 

“Lender” means each financial institution or other entity that (a) is listed on
the signature pages hereof as a “Lender” or (b) from time to time becomes a
party hereto by execution of an Assignment and Acceptance.

 

“Leverage Ratio” means, with respect to the Borrower and its Subsidiaries on a
Consolidated basis, as of any date of determination, the ratio of (a)
Consolidated Financial Covenant Debt outstanding as of such date to (b) EBITDA
for the last full four Fiscal Quarter period ending on or before such date;
provided, however, that (i) if on such date the number of Fiscal Quarters which
have ended subsequent to the Closing Date is less than four, EBITDA used for
determining such ratio shall be Annualized based on the number of Fiscal
Quarters which have then ended subsequent to the Closing Date and (ii) on any
date of calculation, the amount of Financial Covenant Debt consisting of
principal under the Term Loans shall be deemed to equal (A) (x) the original
face amount of Term Loans (i.e. $98,958,333) minus any principal repayments of
the Term Loans from the Closing Date to the date of calculation multiplied by
(y) a percentage equal to (1) 96% plus (2) 0.1667% for each successive Fiscal
Quarter following the Closing Date elapsed as of the date of such calculation
plus (B) any interest on the Term Loans which has been paid-in-kind (to the
extent outstanding).

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, lien (statutory or other), security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever intended to assure payment of any
Indebtedness or the performance of any other obligation, including any
conditional sale or other title retention agreement, the interest of a lessor
under a Capital Lease and any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the UCC or comparable law of any jurisdiction naming the owner
of the asset to which such Lien relates as debtor.

 

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“Loan Documents” means, collectively, this Agreement, the Notes (if any), the
Guaranty, the Fee Letter, the Intercreditor Agreement, each Hedging Contract
between any Loan Party and any Person that is a Lender, an Agent or an Affiliate
of an Agent at the time it enters into such Hedging Contract, the Collateral
Documents, the Escrow Agreement and each certificate, agreement or document
executed by a Loan Party and delivered to any Agent or any Lender in connection
with or pursuant to any of the foregoing.

 

“Loan Party” means each of the Borrower, each Guarantor and each other
Subsidiary of the Borrower that executes and delivers a Loan Document.

 

“Material Adverse Change” means a material adverse change in any of (a) the
business, assets, liabilities, operations, condition (financial or otherwise),
operations, results or Projections of the Borrower or the Borrower and its
Subsidiaries taken as a whole, (b) the legality, validity or enforceability of
any Loan Document or any First Lien Loan Document, (c) the perfection or
priority of the Liens granted pursuant to the Collateral Documents, (d) the
ability of the Borrower to repay the Obligations or of the other Loan Parties to
perform their respective obligations under the Loan Documents or (e) the rights
and remedies of the Agents, or the Lenders under the Loan Documents.

 

“Material Adverse Effect” means an effect that results in or causes, or could
reasonably be expected to result in or cause, a Material Adverse Change.

 

“Maturity Date” means June 29, 2011.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgage Supporting Documents” means, with respect to each Mortgage for a
parcel of Real Property: (a) a mortgagee’s title insurance policy or marked-up
and signed unconditional binder for such insurance which shall: (i) be in an
amount satisfactory to the Administrative Agent; (ii) insure that the Mortgage
insured thereby creates a valid lien on such Real Property free and clear of all
defects and encumbrances except as disclosed therein, which defects and
encumbrances shall be reasonably acceptable to the Administrative Agent; (iii)
name the Administrative Agent for the benefit of the Secured Parties as the
insured thereunder; (iv) be in the form of ALTA Loan Policy - 1992 (or
equivalent policies); (v) contain such endorsements and affirmative coverage as
the Administrative Agent may reasonably request; and (vi) be issued by a title
company satisfactory to the Administrative Agent; (b) copies of all recorded
document referred to, or listed as exceptions to title in, the title policy
refereed to in clause (a) above and a copy of all other material documents
affecting the Real Property; (c) a current ALTA survey of the Real Property (in
form that is sufficiently acceptable to the title insurer issuing title
insurance to the Administrative Agent for such title insurer to deliver
endorsements to such title insurance as reasonably requested by the
Administrative Agent), together with a surveyor’s certificate reasonably
acceptable to the Administrative Agent; (d) any consents or estoppels reasonably
deemed necessary or advisable by the Administrate Agent in connection with such
Mortgage in form and substance reasonably satisfactory to the Administrative
Agent; (e) legal opinions delivered to the Administrative Agent relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent; and (f) evidence
satisfactory to the Administrative Agent that all premiums in respect of the
title policy, all charges for mortgage recording tax, and all related expenses,
if any, have been paid.

 

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“Mortgages” means the mortgages, deeds of trust or other real estate security
documents made or required herein to be made by the Borrower or any other Loan
Party, each in form and substance satisfactory to the Administrative Agent.

 

“Multiemployer Plan” means a multiemployer plan, as defined in Section
400l(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or any ERISA
Affiliate has any obligation or liability, contingent or otherwise.

 

“Net Cash Proceeds” means proceeds received by the Borrower or any of its
Subsidiaries after the Closing Date in cash or Cash Equivalents from any (a)
Asset Sale made pursuant to Section 8.4 (Sale of Assets) (other than clauses (a)
through (e) thereof) net of (i) the reasonable cash costs of sale, assignment or
other disposition, (ii) taxes paid or reasonably estimated to be payable as a
result thereof, (iii) any amount required to be paid or prepaid on Indebtedness
(other than the Obligations) secured by the assets subject to such Asset Sale
and (iv) amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations or purchase price adjustments
associated with any disposition or any liabilities retained by the Borrower or
any of its Subsidiaries associated with assets sold in such disposition
(provided that, to the extent and at the time any such amounts are released from
such reserve, such amounts shall constitute Net Cash Proceeds); provided,
however, that evidence of each of clauses (i), (ii) and (iii) above is provided
to the Administrative Agent in form and substance reasonably satisfactory to it,
(b) Property Loss Event or (c)(i) Equity Issuance (other than any such issuance
of common Stock of Borrower occurring in the ordinary course of business to any
director, member of the management or employee of the Borrower or its
Subsidiaries) or (ii) any Debt Issuance other than Debt Issuances permitted
under Section 8.1(i)(Indebtedness), in each case, net of brokers’ and advisors’
fees and other costs incurred in connection with such transaction; provided,
however, that in the case of this clause (c), evidence of such costs is provided
to the Administrative Agent in form and substance satisfactory to it.

 

“Network Agreement” means any document or agreement entered into by any Loan
Party or any Subsidiary of a Loan Party regarding the use, operation or
maintenance of, or otherwise concerning, any Interactive Broadband Network.

 

“New Preferred Stock” means the preferred stock of the Borrower, to be issued
before the Closing Date, in an aggregate amount of at least $9,200,000.

 

“New Preferred Rights Offering” means any Rights Offering or Rights Offerings by
the Borrower after the Closing Date resulting in the first $10,800,000 in
proceeds to the Borrower from Rights Offerings.

 

“Non-Cash Interest Expense” means, with respect to any Person for any period,
the sum of the following amounts to the extent included in the definition of
Interest Expense (a) the amount of debt discount and debt issuance costs
amortized, (b) charges relating to write-ups or write-downs in the book or
carrying value of existing Financial Covenant Debt, (c) interest payable in
evidences of Indebtedness or by addition to the principal of the related
Indebtedness and (d) other non-cash interest.

 

“Non-Consenting Lender” has the meaning specified in Section 11.1(c)
(Amendments, Waivers, Etc.).

 

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“Non-Funding Lender” has the meaning specified in Section 2.2(d) (Borrowing
Procedures).

 

“Non-U.S. Lender” means each Lender (or the Administrative Agent) that is a
Non-U.S. Person.

 

“Non-U.S. Person” means any Person that is not a Domestic Person.

 

“Note” means any Term Loan Note.

 

“Notice of Borrowing” has the meaning specified in Section 2.2(a) Borrowing
Procedures).

 

“Notice of Conversion or Continuation” has the meaning specified in Section 2.8
(Conversion/Continuation Option).

 

“Obligations” means the Term Loans and all other amounts, obligations, covenants
and duties owing by the Borrower to the Administrative Agent, any Lender, any
Affiliate of any of them or any Indemnitee, of every type and description
(whether by reason of an extension of credit, issuance or amendment of a letter
of credit or payment of any draft drawn or other payment thereunder, loan,
guaranty, indemnification, foreign exchange or currency swap transaction,
interest rate hedging transaction or otherwise), present or future, arising
under this Agreement, any other Loan Document (including Hedging Contracts that
are Loan Documents), whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired and whether or not evidenced by any note,
guaranty or other instrument or for the payment of money, including all cash
management and other fees, interest, charges, expenses, attorneys’ fees and
disbursements and other sums chargeable to the Borrower under this Agreement or
any other Loan Document (including Hedging Contracts that are Loan Documents).

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“Permit” means any permit, approval, authorization, license, variance or
permission required from a Governmental Authority under an applicable
Requirement of Law.

 

“Permitted Acquisition” means any Proposed Acquisition subject to the
satisfaction of each of the following conditions:

 

(a) the Administrative Agent shall receive at least 30 days’ prior written
notice of such Proposed Acquisition, which notice shall include a reasonably
detailed description of such Proposed Acquisition;

 

(b) such Proposed Acquisition shall only involve assets located in the United
States and comprising a business, or those assets of a business, of the type
engaged in by the Borrower and its Subsidiaries as of the Closing Date (or any
business reasonably related or ancillary thereto, as determined in good faith by
the board of directors);

 

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(c) such Proposed Acquisition shall be consensual and shall have been approved
by the Proposed Acquisition Target’s board of directors;

 

(d) no additional Indebtedness or other liabilities shall be incurred, assumed
or otherwise be reflected on a Consolidated balance sheet of the Borrower and
Proposed Acquisition Target after giving effect to such Proposed Acquisition,
except (i) Term Loans made hereunder, (ii) ordinary course trade payables and
accrued expenses and (iii) Indebtedness of the Proposed Acquisition Target;
provided, that, after giving effect to such Permitted Acquisition, (A) such
Indebtedness (together with all other Indebtedness of the Borrower and its
Subsidiaries) is permitted under Section 8.1 (Indebtedness) and (B) the Leverage
Ratio is, on a pro forma basis, no greater than prior to such Proposed
Acquisition.

 

(e) the Dollar Equivalent of the sum of all amounts payable in connection with
such Proposed Acquisition and all other Permitted Acquisitions consummated on or
prior to the date of the consummation of such Proposed Acquisition (including
all transaction costs and all Indebtedness, liabilities and Guaranty Obligations
incurred or assumed in connection therewith or otherwise reflected in a
Consolidated balance sheet of the Borrower and Target) shall not in aggregate
exceed $4,000,000 in any Fiscal Year and $10,000,000 during the term of this
Agreement; provided, however, that neither of the foregoing limits shall apply
to the extent the purchase consideration for such Proposed Acquisition (i) is in
the form of an Equity Issuance or is funded with the Net Cash Proceeds of any
Equity Issuance not used to prepay Term Loans under Section 2.6 (Mandatory
Prepayments) or (ii) is funded with the Net Cash Proceeds of an Asset Sale
permitted by Section 8.4 (Sale of Assets) and subject to a Reinvestment Event;
provided, that such Proposed Acquisition is consummated by the corresponding
Reinvestment Prepayment Date;

 

(f) within 30 days of the closing of such Proposed Acquisition, the Borrower (or
the Subsidiary making such Proposed Acquisition) and the Proposed Acquisition
Target shall have executed such documents and taken such actions as may be
required under Section 7.11 (Additional Collateral and Guaranties) and Section
7.14 (Real Property);

 

(g) the Borrower shall have delivered to the Administrative Agent, in form and
substance satisfactory to the Administrative Agent and sufficiently in advance
and in any case no later than 21 days prior to such Proposed Acquisition, such
other financial information, financial analysis, documentation or other
information relating to such Proposed Acquisition and the pro forma
certifications required by clause (h) below, in each case, as the Administrative
Agent or any Lender shall reasonably request;

 

(h) (i) such Proposed Acquisition Target’s EBITDA for the most recent four
fiscal quarter period is greater than zero; and (ii) on or prior to the date of
such Proposed Acquisition, the Administrative Agent shall have received, in form
and substance reasonably satisfactory to the Administrative Agent, a certificate
of the chief financial officer of the Borrower demonstrating pro forma (A) that
at the time of such Proposed Acquisition and after giving effect thereto,

 

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(1) compliance with the financial covenants set forth in Article V (Financial
Covenants), (2) compliance with the other terms of the Loan Documents, and (3)
the aggregate amount of the Borrower’s cash and Cash Equivalents (which in each
case are subject to a perfected Lien (other than the liens created to secure the
obligations under the First Lien Facilities and are otherwise permitted under
the Intercreditor Agreement) of the Collateral Agent) and the Available Credit
shall equal at least $10,000,000, (B) copies of the acquisition agreement,
related Contractual Obligations and instruments and (C) all opinions,
certificates, lien search results and other documents reasonably requested by
the Administrative Agent;

 

(i) at the time of such Proposed Acquisition and after giving effect thereto,
(A) no Default or Event of Default shall have occurred and be continuing and (B)
all representations and warranties contained in Article IV (Representations and
Warranties) and in the other Loan Documents shall be true and correct in all
material respects.

 

“Permitted CIU Transactions” means any agreement for a fixed term entered into
by the Borrower or any of its Subsidiaries with a Person with respect to the
construction, operation and maintenance of communications networks to provide
telecommunications, cable, broadband or other communications services in
commercial buildings or developments which transaction or agreement is not
entered into for the purpose of raising financing.

 

“Permitted MDU Transaction” means any agreement for a fixed term entered into by
the Borrower or any of its Subsidiaries with a Person with respect to the
construction, operation and maintenance of communications networks to provide
telecommunications, cable, broadband or other communications services in
residential buildings or developments, or other sites containing multiple
dwelling units, which transaction or agreement is not entered into for the
purpose of raising financing.

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity or a Governmental
Authority.

 

“PIK Amounts” means the remaining interest payable with respect to the Term
Loans in excess of the Interest Payable In Cash, which shall be payable-in-kind.

 

“Pledge and Security Agreement” means an agreement, in substantially the form of
Exhibit F (Form of Pledge and Security Agreement), executed by the Borrower and
each Guarantor.

 

“Pledged Stock” has the meaning specified in the Pledge and Security Agreement.

 

“Pole Agreement” means any pole attachment agreement or underground conduit use
agreement entered into in connection with the operation of any Interactive
Broadband Network.

 

“Proceeds” has the meaning given to such term in the UCC.

 

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“Prohibited Person” shall mean any Person:

 

(a) listed in the Annex to, or otherwise subject to the provisions of, the
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001,
and relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism;

 

(b) that is owned or controlled by, or acting for or on behalf of, any person or
entity that is listed to the Annex to, or is otherwise subject to the provisions
of, such Executive Order;

 

(c) that is named as a “specially designated national and blocked person” on the
most current list published by the U.S. Treasury Department Office of Foreign
Assets Control at its official website, http://www.treas.gov.ofac/t11sdn.pdf or
at any replacement website or other replacement official publication of such
list; or

 

(d) who is an Affiliate of, or affiliated with, a Person listed above.

 

“Projections” means the detailed business plan or projections of the Borrower
and its Subsidiaries, dated May     , 2005, for the Fiscal Years 2005 through
2009 and for the Fiscal Quarters beginning with the second Fiscal Quarter of
2005 and through the fourth Fiscal Quarter of 2006.

 

“Property Loss Event” means (a) any loss of or damage to property of the
Borrower or any of its Subsidiaries that results in the receipt by such Person
of proceeds of insurance which exceed $500,000 (individually or in the
aggregate) or (b) any taking of property of the Borrower or any of its
Subsidiaries that results in the receipt by such Person of proceeds in respect
thereof which exceed $500,000 (individually or in the aggregate).

 

“Proposed Acquisition” means the proposed acquisition by the Borrower or any of
its Subsidiaries of all or substantially all of the assets or Stock of any
Proposed Acquisition Target, or the merger of any Proposed Acquisition Target
with or into the Borrower or any Subsidiary of the Borrower (and, in the case of
a merger with the Borrower, with the Borrower being the surviving corporation).

 

“Proposed Acquisition Target” means any Person or any operating division thereof
subject to a Proposed Acquisition.

 

“PUC” means any state, provincial or other regulatory agency or body that
exercises jurisdiction over (a) the rates, services or provision of Broadband
Services or (b) the ownership, construction or operation of any Interactive
Broadband Network or long distance telecommunications system or (c) Persons who
own, construct or operate any Interactive Broadband Network or long distance
telecommunications systems, in each case, by reason of the nature or type of the
business subject to regulation and not pursuant to laws and regulations of
general applicability to Persons conducting business in any such jurisdiction.

 

“PUC Authorization” means any registration with, and any written validation,
exemption, franchise, waiver, approval, order or authorization, consent,
license, certificate and permit, regarding the provision of Broadband Services,
issued to any Person from any PUC.

 

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“Purchasing Lender” has the meaning specified in Section 11.7 (Sharing of
Payments, Etc.).

 

“Ratable Portion” or (other than in the expression “equally and ratably”)
“ratably” means, with respect to any Lender, the percentage obtained by dividing
(a) the Commitment of such Lender by (b) the aggregate Commitments of all
Lenders (or, at any time after the Closing Date, the percentage obtained by
dividing the principal amount of such Lender’s Term Loans by the aggregate Term
Loans of all Lenders).

 

“Real Property” of any Person means the Land of such Person, together with the
right, title and interest of such Person, if any, in and to the streets, the
Land lying in the bed of any streets, roads or avenues, opened or proposed, in
front of, the air space and development rights pertaining to the Land and the
right to use such air space and development rights, all rights of way,
privileges, liberties, tenements, hereditaments and appurtenances belonging or
in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land, including all alley, vault, drainage, mineral, water, oil
and gas rights, together with all of the buildings and other improvements now or
hereafter erected on the Land and any fixtures appurtenant thereto.

 

“Reference Treasury Dealer” CSFB and its respective successors and assigns and
one other nationally recognized investment banking firm selected by the
Administrative Agent that is a primary U.S. government securities dealer.

 

“Reference Treasury Dealer Quotations” means, with respect to any Reference
Treasury Dealer and any prepayment date, the average, as determined by the
Administrative Agent, of the bid and asked prices for the Comparable Treasury
Issue, expressed in each case as a percentage of its principal amount, quoted in
writing to the Administrative Agent by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day immediately preceding such
prepayment date.

 

“Register” has the meaning specified in Section 2.4(b) (Evidence of Debt).

 

“Reinvestment Deferred Amount” means, with respect to any Net Cash Proceeds of
any Reinvestment Event, the portion of such Net Cash Proceeds subject to a
Reinvestment Notice.

 

“Reinvestment Event” means the receipt of Net Cash Proceeds with respect to any
Asset Sale or Property Loss Event in respect of which the Borrower has delivered
a Reinvestment Notice.

 

“Reinvestment Notice” means a written notice executed by a Responsible Officer
of the Borrower stating that no Default or Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through one of its
Subsidiaries) intends and expects to use all or a specified portion of the Net
Cash Proceeds of an Asset Sale or Property Loss Event to acquire assets
(including a Permitted Acquisition of 100% of the equity interests of another
Person) useful in its or one of its Subsidiaries’ businesses or, in the case of
a Property Loss Event, to effect repairs.

 

“Reinvestment Prepayment Date” means, with respect to any Net Cash Proceeds of
any Reinvestment Event, the earlier of (a) the date occurring 360 days after
such Reinvestment

 

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Event and (b) the date that is five Business Days after the date on which the
Borrower shall have notified the Administrative Agent of the Borrower’s
determination not to acquire assets useful in the Borrower’s or a Subsidiary’s
business (or, in the case of a Property Loss Event, not to effect repairs) with
all or any portion of the relevant Reinvestment Deferred Amount for such Net
Cash Proceeds.

 

“Release” means, with respect to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration, in each case, of any Contaminant into the indoor or outdoor
environment or into or out of any property owned, leased or operated by such
Person, including the movement of Contaminants through or in the air, soil,
surface water, ground water or property.

 

“Remedial Action” means all actions required to (a) clean up, remove, treat or
in any other way address any Contaminant in the indoor or outdoor environment,
(b) prevent the Release or threat of Release or minimize the further Release so
that a Contaminant does not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment or (c) perform
pre-remedial studies and investigations and post-remedial monitoring and care.

 

“Requirement of Law” means, with respect to any Person, the common law and all
federal, state, local and foreign laws, treaties, rules and regulations, orders,
judgments, decrees and other determinations of, concessions, grants, franchises,
licenses and other Contractual Obligations with, any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

 

“Requisite Lenders” means, collectively, Lenders having (a) on and prior to the
Closing Date, more than fifty percent (50%) of the aggregate outstanding amount
of the Commitments, and (b) after the Closing Date more than fifty percent (50%)
of the principal amount of all Term Loans then outstanding (including PIK
Amounts). A Non-Funding Lender shall not be included in the calculation of
“Requisite Lenders.”

 

“Responsible Officer” means, with respect to any Person, any of the principal
executive officers, managing members or general partners of such Person but, in
any event, with respect to financial matters, the chief financial officer,
treasurer or controller of such Person.

 

“Restricted Payment” means (a) any dividend, distribution or any other payment
whether direct or indirect, on account of any Stock or Stock Equivalent of the
Borrower or any of its Subsidiaries now or hereafter outstanding and (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalent of
the Borrower or any of its Subsidiaries now or hereafter outstanding.

 

“Rights Offering” means any offer to the Borrower’s existing equity holders, by
or on behalf of the Borrower of any rights to purchase Stock or Stock
Equivalents in the Borrower, including any such Stock or Stock Equivalents
purchased or assumed by a financial intermediary in connection with a standby
commitment or similar arrangement.

 

“S&P” means Standard & Poor’s Rating Services.

 

“Sarbanes-Oxley Act” means the United States Sarbanes-Oxley Act of 2002.

 

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“Secured Obligations” means, in the case of the Borrower, the Obligations, and,
in the case of any other Loan Party, the obligations of such Loan Party under
the Guaranty and the other Loan Documents to which it is a party.

 

“Secured Parties” means the Lenders, the Administrative Agent and any other
holder of any Secured Obligation.

 

“Securities Account” has the meaning given to such term in the UCC.

 

“Securities Account Control Agreement” has the meaning specified in the Pledge
and Security Agreement.

 

“Security” means any Stock, Stock Equivalent, voting trust certificate, bond,
debenture, note or other evidence of Indebtedness, whether secured, unsecured,
convertible or subordinated, or any certificate of interest, share or
participation in, any temporary or interim certificate for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing, but shall not include any evidence of the Obligations.

 

“Selling Lender” has the meaning specified in Section 11.7 (Sharing of Payments,
Etc.).

 

“Solvent” means, with respect to any Person as of any date of determination,
that, as of such date, (a) the value of the assets of such Person (both at fair
value and present fair saleable value) is greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person,
(b) such Person is able to pay all liabilities of such Person as such
liabilities mature and (c) such Person does not have unreasonably small capital.
In computing the amount of contingent or unliquidated liabilities at any time,
such liabilities shall be computed at the amount that, in light of all the facts
and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.

 

“Special Purpose Vehicle” means any special purpose funding vehicle identified
as such in writing by any Lender to the Administrative Agent.

 

“Stock” means shares of capital stock (whether denominated as common stock or
preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.

 

“Stock Equivalents” means all securities convertible into or exchangeable for
Stock and all warrants, options or other rights to purchase or subscribe for any
Stock, whether or not presently convertible, exchangeable or exercisable.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company or other business entity of which an aggregate of 50%
or more of the outstanding Voting Stock is, at the time, directly or indirectly,
owned or controlled by such Person or one or more Subsidiaries of such Person.

 

“Subsidiary Guaranty Requirements” means, the entering by a Subsidiary of the
Borrower into a “Guaranty Supplement” (as such term is defined in the Guaranty),
a joinder agreement to the Pledge and Security Agreement and all other
Collateral Documents required by

 

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Sections 7.11 (Additional Collateral and Guaranties) and 7.14 (Real Property)
and the delivery to the Administrative Agent of such legal opinions in
connection therewith which are, in each case, in form and substance and from
counsel reasonably satisfactory to the Administrative Agent.

 

“Substitute Institution” has the meaning specified in Section 2.14 (Substitution
of Lenders).

 

“Substitution Notice” has the meaning specified in Section 2.14 (Substitution of
Lenders).

 

“Syndication Completion Date” means the earlier to occur of (a) the 60th day
following the Closing Date and (b) the date upon which the Arranger determines
in its sole discretion that the primary syndication of the Term Loans has been
completed.

 

“Tax Affiliate” means, with respect to any Person, (a) any Subsidiary of such
Person and (b) any Affiliate of such Person with which such Person files or is
eligible to file consolidated, combined or unitary tax returns.

 

“Tax Return” has the meaning specified in Section 4.8(a) (Taxes).

 

“Taxes” has the meaning specified in Section 2.13(a) (Taxes).

 

“Term Loan” has the meaning specified in Section 2.1 (The Commitments).

 

“Term Loan Borrowing” means a borrowing consisting of Term Loans made on the
same day by the Lenders ratably according to their respective Commitments.

 

“Term Loan Facility” means the Commitments and the provisions herein related to
the Term Loans.

 

“Term Loan Note” means a promissory note of the Borrower payable to the order of
any Lender in a principal amount equal to the amount of the Term Loan owing to
such Lender.

 

“Title IV Plan” means a pension plan, other than a Multiemployer Plan, covered
by Title IV of ERISA and to which the Borrower, any of its Subsidiaries or any
ERISA Affiliate has any obligation or liability, contingent or otherwise.

 

“UCC” has the meaning specified in the Pledge and Security Agreement.

 

“Unfunded Pension Liability” means, with respect to the Borrower or any of its
Subsidiaries at any time, the sum of (a) the amount, if any, by which the
present value of all accrued benefits under each Title IV Plan (other than any
Title IV Plan subject to Section 4063 of ERISA) exceeds the fair market value of
all assets of such Title IV Plan allocable to such benefits in accordance with
Title IV of ERISA, as determined as of the most recent valuation date for such
Title IV Plan using the actuarial assumptions in effect under such Title IV
Plan, (b) the aggregate amount of withdrawal liability that could be assessed
under Section 4063 with respect to each Title IV Plan subject to such section,
separately calculated for each such Title IV Plan as of its most recent
valuation date and (c) for a period of five years following a transaction
reasonably likely to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by the Borrower, any of its
Subsidiaries or any ERISA Affiliate as a result of such transaction.

 

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“U.S. Lender” means each Lender (or the Administrative Agent) that is a Domestic
Person.

 

“Voting Stock” means Stock of any Person having ordinary power to vote in the
election of members of the board of directors, managers, trustees or other
controlling Persons, of such Person (irrespective of whether, at the time, Stock
of any other class or classes of such entity shall have or might have voting
power by reason of the happening of any contingency).

 

“Wholly-Owned Subsidiary” of any Person means any Subsidiary of such Person, all
of the Stock of which (other than director’s qualifying shares, as may be
required by law) is owned by such Person, either directly or indirectly through
one or more Wholly-Owned Subsidiaries of such Person.

 

“Withdrawal Liability” means, with respect to the Borrower or any of its
Subsidiaries at any time, the aggregate liability incurred (whether or not
assessed) with respect to all Multiemployer Plans pursuant to Section 4201 of
ERISA or for increases in contributions required to be made pursuant to Section
4243 of ERISA.

 

“Working Capital” means, for any Person at any date, the amount, if any, by
which the Consolidated Current Assets of such Person at such date exceeds the
Consolidated Current Liabilities of such Person at such date.

 

Section 1.2 Computation of Time Periods

 

In this Agreement, in the computation of periods of time from a specified date
to a later specified date, the word “from” means “from and including” and the
words “to” and “until” each mean “to but excluding” and the word “through” means
“to and including.”

 

Section 1.3 Accounting Terms and Principles

 

(a) Except as set forth below, all accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto (including for purpose of
measuring compliance with Article V (Financial Covenants) shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.

 

(b) If any change in the accounting principles used in the preparation of the
most recent Financial Statements referred to in Section 6.1 (Financial
Statements) is hereafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or any successors thereto)
and such change is adopted by the Borrower with the agreement of the Borrower’s
Accountants and results in a change in any of the calculations required by
Article V (Financial Covenants) or VIII (Negative Covenants) that would not have
resulted had such accounting change not occurred, the parties hereto agree to
enter into negotiations in order to amend such provisions so as to equitably
reflect such change such that the criteria for evaluating compliance with such
covenants by the Borrower shall be the same after such change as if such change
had not been made; provided, however, that no change in GAAP that would affect a

 

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calculation that measures compliance with any covenant contained in Article V
(Financial Covenants) or VIII (Negative Covenants) shall be given effect until
such provisions are amended to reflect such changes in GAAP.

 

(c) For purposes of making all financial calculations to determine compliance
with Article V (Financial Covenants), all components of such calculations shall
be adjusted to include or exclude, as the case may be, without duplication, such
components of such calculations attributable to any business or assets that have
been acquired by the Borrower or any of its Subsidiaries (including through
Permitted Acquisitions) after the first day of the applicable period of
determination and prior to the end of such period, as determined in good faith
by the Borrower on a pro forma basis.

 

Section 1.4 Conversion of Foreign Currencies

 

(a) Financial Covenant Debt. Financial Covenant Debt denominated in any currency
other than Dollars shall be calculated using the Dollar Equivalent thereof as of
the date of the Financial Statements on which such Financial Covenant Debt is
reflected.

 

(b) Dollar Equivalents. The Administrative Agent shall determine the Dollar
Equivalent of any amount as required hereby, and a determination thereof by the
Administrative Agent shall be conclusive absent manifest error. The
Administrative Agent may, but shall not be obligated to, rely on any
determination made by any Loan Party in any document delivered to the
Administrative Agent. The Administrative Agent may determine or redetermine the
Dollar Equivalent of any amount on any date either in its own discretion or upon
the request of any Lender.

 

(c) Rounding-Off. The Administrative Agent may set up appropriate rounding off
mechanisms or otherwise round-off amounts hereunder to the nearest higher or
lower amount in whole Dollar or cent to ensure amounts owing by any party
hereunder or that otherwise need to be calculated or converted hereunder are
expressed in whole Dollars or in whole cents, as may be necessary or
appropriate.

 

Section 1.5 Certain Terms

 

(a) The terms “herein,” “hereof,” “hereto” and “hereunder” and similar terms
refer to this Agreement as a whole and not to any particular Article, Section,
subsection or clause in, this Agreement.

 

(b) Unless otherwise expressly indicated herein, (i) references in this
Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause refer
to the appropriate Exhibit or Schedule to, or Article, Section, clause or
sub-clause in this Agreement and (ii) the words “above” and “below”, when
following a reference to a clause or a sub-clause of any Loan Document, refer to
a clause or sub-clause within, respectively, the same Section or clause.

 

(c) Each agreement defined in this Article I shall include all appendices,
exhibits and schedules thereto. Unless the prior written consent of the
Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is not
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.

 

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(d) References in this Agreement to any statute shall be to such statute as
amended or modified from time to time and to any successor legislation thereto,
in each case as in effect at the time any such reference is operative.

 

(e) The term “including” when used in any Loan Document means “including without
limitation” except when used in the computation of time periods.

 

(f) The terms “Lender” and “Administrative Agent” include their respective
successors.

 

(g) Upon the appointment of any successor Administrative Agent pursuant to
Section 10.7 (Successor Agent), references to CSFB in Section 10.4 (The Agents
Individually) in the definitions of Base Rate, Dollar Equivalent, and Eurodollar
Rate shall be deemed to refer to the financial institution then acting as the
Administrative Agent or one of its Affiliates if it so designates.

 

ARTICLE II

 

THE FACILITIES

 

Section 2.1 The Commitments

 

On the terms and subject to the conditions contained in this Agreement, each
Lender severally agrees to make a loan (each a “Term Loan”) in Dollars to the
Borrower on the Closing Date, in an amount not to exceed such Lender’s
Commitment. Amounts of Term Loans repaid or prepaid may not be reborrowed.

 

Section 2.2 Borrowing Procedures

 

(a) Each Borrowing shall be made on notice given by the Borrower to the
Administrative Agent not later than 11:00 a.m. (New York time) (i) one Business
Day, in the case of a Borrowing of Base Rate Loans and (ii) three Business Days,
in the case of a Borrowing of Eurodollar Rate Loans, prior to the date of the
proposed Borrowing. Each such notice shall be in substantially the form of
Exhibit C (Form of Notice of Borrowing) (a “Notice of Borrowing”), specifying,
(A) the date of such proposed Borrowing (which shall be the Closing Date), (B)
the aggregate amount of such proposed Borrowing, (C) whether any portion of the
proposed Borrowing will be of Base Rate Loans or Eurodollar Rate Loans, (D) for
each Eurodollar Rate Loan, the initial Interest Period or Periods thereof. Loans
shall be made as Base Rate Loans unless, subject to Section 2.14 (Special
Provisions Governing Eurodollar Rate Loans), the Notice of Borrowing specifies
that all or a portion thereof shall be Eurodollar Rate Loans and (E) remittance
instructions.

 

(b) The Administrative Agent shall give to each Lender prompt notice of the
Administrative Agent’s receipt of a Notice of Borrowing and, if Eurodollar Rate
Loans are properly requested in such Notice of Borrowing, the applicable
interest rate determined pursuant to Section 2.11(a) (Determination of Interest
Rate). Each Lender shall, before 1:00 p.m. (New York time) on the date of the
proposed Borrowing, make available to the Administrative Agent at its address
referred to in Section 11.8 (Notices, Etc.), in immediately available funds,
such Lender’s Ratable Portion of such proposed Borrowing. Upon fulfillment (or
due waiver in accordance with Section 11.1 (Amendments, Waivers, Etc.)) on the
Closing Date of the applicable conditions set forth in Section 3.1 (Conditions
Precedent to Initial Loans) and after the Administrative Agent’s receipt of such
funds, the Administrative Agent shall make such funds available to the Borrower.

 

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(c) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any proposed Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s Ratable Portion of such
Borrowing (or any portion thereof), the Administrative Agent may assume that
such Lender has made such Ratable Portion available to the Administrative Agent
on the date of such Borrowing in accordance with this Section 2.2 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such Ratable Portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to the Term Loans comprising such Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate for the first Business Day and thereafter at the
interest rate applicable at the time to the Term Loans comprising such
Borrowing. If such Lender shall repay to the Administrative Agent such
corresponding amount, such corresponding amount so repaid shall constitute such
Lender’s Term Loan as part of such Borrowing for purposes of this Agreement. If
the Borrower shall repay to the Administrative Agent such corresponding amount,
such payment shall not relieve such Lender of any obligation it may have
hereunder to the Borrower.

 

(d) The failure of any Lender to make on the date specified any Term Loan or any
payment required by it (such Lender being a “Non-Funding Lender”), shall not
relieve any other Lender of its obligations to make such Term Loan or payment on
such date but no such other Lender shall be responsible for the failure of any
Non-Funding Lender to make a Term Loan or payment required under this Agreement.

 

Section 2.3 Repayment of Loans

 

The Borrower promises to repay the entire unpaid principal amount of the Term
Loans (to the extent not previously repaid) on the Maturity Date.

 

Section 2.4 Evidence of Debt

 

(a) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing Indebtedness of the Borrower to such Lender resulting
from each Term Loan of such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.

 

(b) (i) The Administrative Agent, acting as agent of the Borrower solely for
this purpose and for tax purposes, shall establish and maintain at its address
referred to in Section 11.8 (Notices, Etc.) a record of ownership (the
“Register”) in which the Administrative Agent agrees to register by book entry
the Administrative Agent’s and each Lender’s interest in each Term Loan, and in
the right to receive any payments hereunder and any assignment of any such
interest or rights. In addition, the Administrative Agent, acting as agent of
the Borrower solely for this purpose and for tax purposes, shall establish and
maintain accounts in the Register in accordance with its

 

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usual practice in which it shall record (A) the names and addresses of the
Lenders, (B) the Commitments of each Lender from time to time, (C) the amount of
each Term Loan made and, if a Eurodollar Rate Loan, the Interest Period
applicable thereto, (D) the amount of any principal or interest (including PIK
Amounts) due and payable, and paid, by the Borrower to, or for the account of,
each Lender hereunder, and (E) the amount of any sum received by the
Administrative Agent hereunder from the Borrower, whether such sum constitutes
principal or interest (and the type of Term Loan to which it applies), fees,
expenses or other amounts due under the Loan Documents and each Lender’s share
thereof, if applicable.

 

(ii) Notwithstanding anything to the contrary contained in this Agreement, the
Term Loans (including the Notes evidencing such Term Loans) are registered
obligations and the right, title, and interest of the Lenders and their
assignees in and to such Term Loans shall be transferable only upon notation of
such transfer in the Register. A Note shall only evidence the Lender’s or a
registered assignee’s right, title and interest in and to the related Term Loan.
This Section 2.4(b) and Section 11.2 (Assignments and Participations) shall be
construed so that the Term Loans are at all times maintained in “registered
form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code
and any related regulations (or any successor provisions of the Code or such
regulations).

 

(c) The entries made in the Register and in the accounts therein maintained
pursuant to clauses (a) and (b) above shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Term Loans
in accordance with their terms. In addition, the Loan Parties, the
Administrative Agent, and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender for all purposes of this Agreement.
Information contained in the Register with respect to any Lender shall be
available for inspection by the Borrower, the Administrative Agent or such
Lender at any reasonable time and from time to time upon reasonable prior
notice.

 

(d) Notwithstanding any other provision of the Agreement, in the event that any
Lender requests that the Borrower execute and deliver a promissory note or notes
payable to such Lender in order to evidence the Indebtedness owing to such
Lender by the Borrower hereunder, the Borrower shall promptly execute and
deliver a Note or Notes to such Lender evidencing any Term Loans of such Lender,
substantially in the form of Exhibit B (Form of Term Note).

 

Section 2.5 Optional Prepayments

 

(a) The Borrower may prepay the outstanding principal amount of the Term Loans
(including PIK Amounts, if any), in whole or in part, together with accrued
interest to the date of such prepayment on the principal amount prepaid;
provided, however, the Borrower shall provide the Administrative Agent with
notice stating the proposed date and aggregate principal amount of such
prepayment not later than 11:00 a.m. (New York time) (a) one Business Day, in
the case of a Borrowing of Base Rate Loans and (b) three Business Days, in the
case of a Borrowing of Eurodollar Rate Loans, prior to the date of the proposed
prepayment; provided, further, (i) if any prepayment of any Eurodollar Rate Loan
is made by the Borrower other than on the last day of an Interest Period for
such Term Loan, the Borrower shall also pay any amounts

 

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owing pursuant to Section 2.11(e) (Breakage Costs), (ii) each partial prepayment
shall be in an aggregate amount not less than $5,000,000 or integral multiples
of $1,000,000 in excess thereof, and (iii) no such prepayment shall be permitted
unless paid together with any Applicable Prepayment Premium which is payable
pursuant to Section 2.9(a) (Prepayment Premium). Upon the giving of such notice
of prepayment, the principal amount of the Term Loans specified to be prepaid
shall become due and payable on the date specified for such prepayment.

 

(b) The Borrower shall have no right to prepay the principal amount of any Term
Loan other than as provided in this Section 2.5.

 

Section 2.6 Mandatory Prepayments

 

(a) To the extent not otherwise subject to application of the mandatory
prepayment provisions contained in the First Lien Credit Agreement, upon receipt
by the Borrower or any of its Subsidiaries of Net Cash Proceeds arising (i) from
an Asset Sale (excluding, unless a Default or Event of Default has occurred
which is continuing on the date of receipt, the Net Cash Proceeds received
pursuant to the Cerritos Sale; provided, that such Net Cash Proceeds are used
for working capital requirements and general corporate purposes of the Borrower
and its Subsidiaries), Property Loss Event, New Preferred Rights Offering or
Debt Issuance, the Borrower shall immediately prepay the Term Loans in an amount
equal to 100% of such Net Cash Proceeds (except Net Cash Proceeds subject to a
Reinvestment Event as provided below) and (ii) from an Equity Issuance (other
than a New Preferred Rights Offering or an Equity Issuance to the extent applied
to the purchase consideration for a Permitted Acquisition within 180 days of
such Equity Issuance), the Borrower shall immediately prepay the Term Loans in
an amount equal to 50% of such Net Cash Proceeds; provided, however, that if the
Leverage Ratio as of the last day of the most recently ended Fiscal Quarter is
(A) less than 5.5 to 1.0, then the foregoing percentage with respect to Equity
Issuances shall be reduced to 25% or (B) less than 4.5 to 1.0, then such
percentage shall be reduced to 0%. Any such mandatory prepayment shall be
applied as provided in clause (c) below; provided, however, that, in the case of
any Net Cash Proceeds subject to a Reinvestment Event, the Borrower shall,
pending application of such Net Cash Proceeds, immediately upon receipt of such
Net Cash Proceeds deposit an amount equal to 100% of such Net Cash Proceeds in a
Cash Collateral Account. To the extent not otherwise subject to application of
the mandatory prepayment provisions contained in the First Lien Credit
Agreement, on any Reinvestment Prepayment Date, the Borrower shall prepay the
Term Loans in an amount equal to the remaining Reinvestment Deferred Amount
which has not been reinvested as of such date in accordance with the applicable
Reinvestment Notice, which prepayment shall be applied as provided in clause (c)
below. Notwithstanding the foregoing, for any Fiscal Year, the amount of Net
Cash Proceeds from Asset Sales subject to a Reinvestment Event shall not exceed
$1,000,000.

 

(b) To the extent not otherwise subject to application of the mandatory
prepayment provisions contained in the First Lien Credit Agreement, the Borrower
shall prepay the Term Loans within 95 days after the last day of each Fiscal
Year, in an amount equal to 75% of Excess Cash Flow for such Fiscal Year;
provided, however, that if the Leverage Ratio as of the last day of such Fiscal
Year is less than 5.5 to 1.0, then such percentage shall be reduced to 50% for
such Fiscal Year; provided, further that no such prepayment shall be required
prior to calendar year 2006. Any such mandatory prepayment shall be applied in
accordance with clause (c) below.

 

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(c) Subject to the provisions of Section 2.10(g) (Payments and Computations),
any mandatory prepayments made by the Borrower required to be applied in
accordance with this clause (c) shall be applied (subject, with respect to
mandatory prepayments pursuant to clause (a) above, to clauses (d) and (e)
below) as follows: first, to the prepayment of the First Lien Term Facility to
repay the outstanding principal balance of the term loans made pursuant thereto,
until such term loans shall have been prepaid in full; second, to repay the
outstanding principal balance of the “Swing Loans” (as such term is defined in
the First Lien Credit Agreement) until such Swing Loans shall have been repaid
in full; and third, to repay the outstanding principal balance of the First Lien
Revolving Facility in accordance with the provisions of the First Lien Credit
Agreement.

 

(d) In connection with any mandatory prepayment pursuant to clause (a) above
which is to be made in accordance with clause (c) above at any time the First
Lien Term Loans are outstanding, the Borrower shall give the Administrative
Agent 10 Business Days prior notice of any such mandatory prepayment. In case
any amounts are available to prepay the Term Loans pursuant to clause (a) above,
on the eighth Business Day preceding the date of the applicable mandatory
prepayment, the Administrative Agent shall notify each Lender of an offer of a
mandatory prepayment of the Term Loan in the aggregate amount of the mandatory
prepayments that exceed the amount required to be applied to the First Lien
Facilities or are declined by First Lien Term Lenders electing not to accept
such an offer for prepayment pursuant to Section 2.9(e) (Mandatory Prepayments)
of the First Lien Credit Agreement (any such offer, a “Second Lien Prepayment
Offer”). Any Lender may, at its option, elect not to accept such prepayment of
its Loan (any Lender making such election being a “Declining Second Lien
Lender”); provided that each Declining Second Lien Lender shall give written
notice thereof to the Administrative Agent not later than 11:00 a.m. New York
City time on the Business Day immediately preceding the date of the applicable
mandatory prepayment. On the date of the applicable mandatory prepayment,
proceeds in excess of the portion of the proceeds required to be applied to the
First Lien Facilities by the First Lien Credit Agreement, if any, shall be paid
to each Term Lender that is not a Declining Second Lien Lender in an amount
equal to such Lender’s Ratable Portion of such mandatory prepayment and, if any
Net Cash Proceeds are remaining following such application, such amounts shall
be made available to the Borrower for application for any purpose permitted by
this Agreement and the First Lien Credit Agreement including the prepayment of
PIK Amounts. In the event that the Administrative Agent has not, with respect to
any prepayment, received a notice from a Lender in accordance with this clause
(d), such Lender shall be deemed to have waived its rights under this clause (d)
to decline receipt thereof. The provisions of this clause (d) shall not apply to
mandatory prepayments pursuant to clause (b) above and no Lender shall not have
the right to decline such mandatory prepayments.

 

(e) In connection with any mandatory prepayment pursuant to clause (a) above
which is to be made in accordance with clause (c) above after the termination of
the First Lien Term Loans, the Borrower shall give the Administrative Agent 5
Business Days prior notice of any such mandatory prepayment, whereupon the
Administrative Agent shall promptly notify each Term Loan Lender thereof. Any
Term Loan Lender may, at its option, elect not to accept such prepayment of its
Term Loan (any Term Loan Lender making such election being a “Declining Lender”)
provided that each Declining Lender shall give written notice thereof to the
Administrative Agent not later than 11:00 a.m. New York City time on the third
Business Day preceding the date of the applicable mandatory prepayment. On such
date of prepayment, an amount equal to that portion of the Term Loans then to be
prepaid to the Term Loan Lenders (less the aggregate amount thereof that would
otherwise be payable to Declining Lenders) shall be paid

 

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to the Term Loan Lenders that are not Declining Lenders, in each case, in amount
equal to such Term Loan Lender’s Ratable Portion of such amount. That portion of
the Term Loans that would otherwise be payable to Declining Lenders shall be
retained by the Borrower and applied to any purpose permitted by this Agreement.
In the event that the Administrative Agent has not, with respect to any
prepayment, received a notice from a Term Loan Lender in accordance with this
clause (e), such Term Loan Lender shall be deemed to have waived its rights
under this clause (e) to decline receipt thereof. The provisions of this clause
(d) shall not apply to mandatory prepayments pursuant to clause (b) above and no
Lender shall not have the right to decline such mandatory prepayments.

 

Section 2.7 Interest

 

(a) Rate of Interest. All Term Loans and the outstanding amount of all other
Obligations (other than pursuant to Hedging Contracts that are Loan Documents,
to the extent such Hedging Contracts provide for the accrual of interest on
unpaid obligations) shall bear interest, in the case of Term Loans, on the
unpaid principal amount thereof from the date such Term Loans are made and, in
the case of such other Obligations, from the date such other Obligations are due
and payable until, in all cases, paid in full, except as otherwise provided in
clause (d) below, as follows:

 

(i) if a Base Rate Loan or such other Obligation, at a rate per annum equal to
the sum of (A) the Base Rate as in effect from time to time and (B) the
Applicable Margin; and

 

(ii) if a Eurodollar Rate Loan, at a rate per annum equal to the sum of (A) the
Eurodollar Rate determined for the applicable Interest Period and (B) the
Applicable Margin in effect from time to time during such Eurodollar Interest
Period.

 

(b) Interest Payments. (i) Interest accrued on each Base Rate Loan shall be
payable in arrears (A) in the case of Interest Payable In Cash, on the first
Business Day of each Fiscal Quarter, commencing on the first such day following
the making of such Base Rate Loan, (B) in the case of Base Rate Loans that are
Term Loans, upon the payment or prepayment thereof in full or in part and (C) if
not previously paid in full, at maturity (whether by acceleration or otherwise)
of such Base Rate Loan, (ii) interest accrued on each Eurodollar Rate Loan shall
be payable in arrears (A) in the case of Interest Payable In Cash, on the last
day of each Interest Period applicable to such Term Loan and, if such Interest
Period has a duration of more than three months, on each date during such
Interest Period occurring every three months from the first day of such Interest
Period, (B) upon the payment or prepayment thereof in full or in part and (C) if
not previously paid in full, at maturity (whether by acceleration or otherwise)
of such Eurodollar Rate Loan, (iii) interest accrued on the amount of all other
Obligations shall be payable on demand from and after the time such Obligation
becomes due and payable (whether by acceleration or otherwise) and (iv) interest
accrued on each Base Rate Loan or Eurodollar Rate Loan, and not constituting
Interest Payable In Cash, shall be paid-in-kind as provided in clause (c) below.

 

(c) PIK Amounts. All accrued interest on the Term Loans constituting PIK Amounts
shall, on the last Business Day of each Fiscal Quarter, be consolidated with,
and increase the principal amount of, the Term Loans for all purposes under this
Agreement and the other Loan Documents.

 

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(d) Default Interest. Notwithstanding the rates of interest specified in clause
(a) above or elsewhere herein, effective immediately upon the occurrence of an
Event of Default and for as long thereafter as such Event of Default shall be
continuing, the principal balance of all Term Loans and the amount of all other
Obligations then due and payable shall bear interest at a rate that is two
percent per annum in excess of the rate of interest applicable to such Term
Loans or other Obligations from time to time. Such interest shall be payable on
the date that would otherwise be applicable to such interest pursuant to clause
(b) above or otherwise on demand.

 

Section 2.8 Conversion/Continuation Option

 

(a) The Borrower may elect (i) at any time on any Business Day to convert Base
Rate Loans or any portion thereof to Eurodollar Rate Loans and (ii) at the end
of any applicable Interest Period, to convert Eurodollar Rate Loans or any
portion thereof into Base Rate Loans or to continue such Eurodollar Rate Loans
or any portion thereof for an additional Interest Period; provided, however,
that the aggregate amount of the Eurodollar Loans for each Interest Period must
be in the amount of at least $5,000,000 or an integral multiple of $1,000,000 in
excess thereof. Each conversion or continuation shall be allocated among the
Term Loans of each Lender in accordance with such Lender’s Ratable Portion. Each
such election shall be in substantially the form of Exhibit D (Form of Notice of
Conversion or Continuation) (a “Notice of Conversion or Continuation”) and shall
be made by giving the Administrative Agent at least (x) three Business Days’
prior written notice in the case of a conversion to, or continuation of,
Eurodollar Rate Loans or (y) one Business Day’s prior written notice in the case
of a conversion to Base Rate Loans, each such notice specifying, as applicable,
(A) the amount and type of Term Loan being converted or continued, (B) in the
case of a conversion to, or a continuation of, Eurodollar Rate Loans, the
applicable Interest Period and (C) in the case of a conversion, the date of such
conversion.

 

(b) The Administrative Agent shall promptly notify each Lender of its receipt of
a Notice of Conversion or Continuation and of the options selected therein.
Notwithstanding the foregoing, no conversion in whole or in part of Base Rate
Loans to Eurodollar Rate Loans and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any applicable Interest Period
shall be permitted at any time at which (i) a Default or an Event of Default
shall have occurred and be continuing or (ii) the continuation of, or conversion
into, a Eurodollar Rate Loan would violate any provision of Section 2.11
(Special Provisions Governing Eurodollar Rate Loans). If, within the time period
required under the terms of this Section 2.8, the Administrative Agent does not
receive a Notice of Conversion or Continuation from the Borrower containing a
permitted election to continue any Eurodollar Rate Loans for an additional
Interest Period or to convert any such Term Loans, then, upon the expiration of
the applicable Interest Period, such Term Loans shall be automatically converted
to Base Rate Loans; provided, further, that if any Notice of Conversion or
Continuation (i) fails to specify whether the applicable Term Loans shall be
converted to or continued as Base Rate Loans or as Eurodollar Rate Loans, such
Term Loans shall be converted to or continued as Base Rate Loans and (ii) in the
case of a conversion to or a continuation of Eurodollar Rate Loans, fails to
indicate the term of the applicable Interest Period, such Interest Period shall
be deemed to be for a one-month period. Each Notice of Conversion or
Continuation shall be irrevocable.

 

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Section 2.9 Fees

 

(a) Prepayment Premium. In connection with, and as a condition to any prepayment
of all or a portion of the Term Loans pursuant to Section 2.5(b) (Optional
Prepayments), the Borrower shall pay to the Lenders, in addition to any other
amounts then due on the date of any such prepayment, the Applicable Prepayment
Premium calculated with respect to the Term Loans so prepaid as of the date
thereof.

 

(b) Additional Fees. The Borrower has agreed to pay to the Administrative Agent
and the Arranger additional fees, the amount and dates of payment of which are
embodied in the Fee Letter.

 

Section 2.10 Payments and Computations

 

(a) The Borrower shall make each payment hereunder (including fees and expenses)
not later than 1:00 p.m. (New York time) on the day when due, in Dollars to the
Administrative Agent at its address referred to in Section 11.8 (Notices, Etc.)
in immediately available funds without set-off or counterclaim. The
Administrative Agent shall promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal, interest or
fees to the Lenders ratably, in accordance with the application of payments set
forth in clause (f) or (g) below, as applicable, for the account of their
respective Applicable Lending Offices; provided, however, that amounts payable
pursuant to Section 2.12 (Capital Adequacy), Section 2.13 (Taxes) or Section
2.11(c) or (d)(Special Provisions Governing Eurodollar Rate Loans) shall be paid
only to the affected Lender or Lenders. Payments received by the Administrative
Agent after 1:00 p.m. (New York time) shall be deemed to be received on the next
Business Day (in the Administrative Agent’s sole discretion).

 

(b) All computations of interest and of fees shall be made by the Administrative
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest and fees are payable except for interest in
connection with Base Rate Loans which shall be calculated on the basis of the
actual number of calendar days in the applicable year. Each determination by the
Administrative Agent of a rate of interest hereunder shall be conclusive and
binding for all purposes, absent manifest error.

 

(c) Each payment by the Borrower of any Term Loan (including interest or fees in
respect thereof) and each reimbursement of various costs, expenses or other
Obligation shall be made in the currency in which such Term Loan was made or
such cost, expense or other Obligation was incurred; provided, however, that
other than for payments in respect of a Term Loan, Loan Documents duly executed
by the Administrative Agent or any Hedging Contract may specify other currencies
of payment for Obligations created by or directly related to such Loan Document
or Hedging Contract.

 

(d) Whenever any payment hereunder shall be stated to be due on a day other than
a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
principal of any Eurodollar Rate Loan to be made in the next calendar month,
such payment shall be made on the immediately preceding Business Day. All
repayments of any Term Loans shall be applied pro rata to repay such Term Loans
outstanding as Base Rate Loans and Eurodollar Rate Loans.

 

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(e) Unless the Administrative Agent shall have received notice from the Borrower
to the Lenders prior to the date on which any payment is due hereunder that the
Borrower will not make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent that the Borrower shall not
have made such payment in full to the Administrative Agent, each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed to
such Lender together with interest thereon (at the Federal Funds Rate for the
first Business Day and thereafter, at the rate applicable to Base Rate Loans)
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent.

 

(f) Except for payments and other amounts received by the Administrative Agent
and applied in accordance with the provisions of clause (g) below (or required
to be applied, subject to the terms of the Intercreditor Agreement, in
accordance with Section 2.6(c) (Mandatory Prepayments)), all payments and any
other amounts received by the Administrative Agent from or for the benefit of
the Borrower shall be applied as follows: first, to pay principal of, and
interest on, any portion of the Term Loans the Administrative Agent may have
advanced pursuant to the express provisions of this Agreement on behalf of any
Lender, for which the Administrative Agent has not then been reimbursed by such
Lender or the Borrower, second, to pay all other Obligations then due and
payable and third, as the Borrower so designates. Payments in respect of the
Term Loans received by the Administrative Agent shall be distributed to each
Lender in accordance with such Lender’s Ratable Portion of the Term Loans. All
payments of fees and all other payments in respect of any other Obligation shall
be allocated, among such of the Lenders as are entitled thereto and, for such
payments allocated to the Lenders, in proportion to their respective Ratable
Portions.

 

(g) The Borrower hereby irrevocably waives the right to direct the application
of any and all payments in respect of the Obligations and any proceeds of
Collateral after the occurrence and during the continuance of an Event of
Default and agrees that, notwithstanding the provisions of Section 2.6(c)
(Mandatory Prepayments) and clause (f) above, each Agent may, and, upon either
(A) the written direction of the Requisite Lenders or (B) the acceleration of
the Obligations pursuant to Section 9.2 (Remedies) shall, deliver a blockage
notice to each Deposit Account Bank for each Approved Deposit Account and apply,
subject to the terms of the Intercreditor Agreement, all payments in respect of
any Obligations and all funds on deposit in any Cash Collateral Account
(including all proceeds arising from a Reinvestment Event that are held in the
Cash Collateral Account pending application of such proceeds as specified in a
Reinvestment Notice) and all other proceeds of Collateral in the following
order:

 

(i) first, to pay Secured Obligations in respect of any expense reimbursements
or indemnities then due to the Agents;

 

(ii) second, to pay Secured Obligations in respect of any expense reimbursements
or indemnities then due to the Lenders;

 

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(iii) third, to pay Secured Obligations in respect of any fees then due to the
Administrative Agent, the Collateral Agent and the Lenders;

 

(iv) fourth, to pay interest then due and payable in respect of the Term Loans;

 

(v) fifth, to pay or prepay principal amounts on the Term Loans and amounts
owing with respect to Hedging Contracts which are Loan Documents, ratably to the
aggregate principal amount of such Term Loans and Obligations owing with respect
to Hedging Contracts; and

 

(vi) sixth, to the ratable payment of all other Secured Obligations;

 

provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any Secured Obligation described in any of
clauses (i), (ii), (iii), (iv), (v) and (vi) above, the available funds being
applied with respect to any such Secured Obligation (unless otherwise specified
in such clause) shall be allocated to the payment of such Secured Obligation
ratably, based on the proportion of the Administrative Agent’s and each Lender’s
interest in the aggregate outstanding Secured Obligations described in such
clauses. The order of priority set forth in clauses (i), (ii), (iii), (iv), (v)
and (vi) shall not be changed without the prior consent of the Administrative
Agent, the Requisite Lenders and each Lender adversely affected thereby.

 

Section 2.11 Special Provisions Governing Eurodollar Rate Loans

 

(a) Determination of Interest Rate

 

The Eurodollar Rate for each Interest Period for Eurodollar Rate Loans shall be
determined by the Administrative Agent pursuant to the procedures set forth in
the definition of “Eurodollar Rate.” The Administrative Agent’s determination
shall be presumed to be correct absent manifest error and shall be binding on
the Borrower

 

(b) Interest Rate Unascertainable, Inadequate or Unfair

 

In the event that (i) the Administrative Agent determines that adequate and fair
means do not exist for ascertaining the applicable interest rates by reference
to which the Eurodollar Rate then being determined is to be fixed or (ii) the
Requisite Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period will not adequately reflect the cost to the Lenders of
making or maintaining such Term Loans for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the Lenders,
whereupon each Eurodollar Loan shall automatically, on the last day of the
current Interest Period for such Term Loan, convert into a Base Rate Loan and
the obligations of the Lenders to make Eurodollar Rate Loans or to convert Base
Rate Loans into Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrower that the Requisite Lenders have
determined that the circumstances causing such suspension no longer exist.

 

(c) Increased Costs

 

If at any time any Lender determines that the introduction of, or any change in
or in the interpretation of, any law, treaty or governmental rule, regulation or
order (other than any change by way of imposition or increase of reserve
requirements included in determining the

 

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Eurodollar Rate) or the compliance by such Lender with any guideline, request or
directive from any central bank or other Governmental Authority (whether or not
having the force of law), shall have the effect of increasing the cost to such
Lender of agreeing to make or making, funding or maintaining any Eurodollar Rate
Loans, then the Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.

 

(d) Illegality

 

Notwithstanding any other provision of this Agreement, if any Lender determines
that the introduction of, or any change in or in the interpretation of, any law,
treaty or governmental rule, regulation or order after the date of this
Agreement shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to make Eurodollar Rate Loans or to continue to fund or maintain
Eurodollar Rate Loans, then, on notice thereof and demand therefor by such
Lender to the Borrower through the Administrative Agent, (i) the obligation of
such Lender to make or to continue Eurodollar Rate Loans and to convert Base
Rate Loans into Eurodollar Rate Loans shall be suspended, and each such Lender
shall make a Base Rate Loan as part of any requested Borrowing of Eurodollar
Rate Loans and (ii) if the affected Eurodollar Rate Loans are then outstanding,
the Borrower shall immediately convert each such Term Loan into a Base Rate
Loan. If, at any time after a Lender gives notice under this clause (d), such
Lender determines that it may lawfully make Eurodollar Rate Loans, such Lender
shall promptly give notice of that determination to the Borrower and the
Administrative Agent, and the Administrative Agent shall promptly transmit the
notice to each other Lender. The Borrower’s right to request, and such Lender’s
obligation, if any, to make Eurodollar Rate Loans shall thereupon be restored.

 

(e) Breakage Costs

 

In addition to all amounts required to be paid by the Borrower pursuant to
Section 2.7 (Interest), the Borrower shall compensate each Lender, upon demand,
for all actual losses, expenses and liabilities (including any actual loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such Lender’s Eurodollar
Rate Loans to the Borrower but excluding any loss of the Applicable Margin on
the relevant Term Loans) that such Lender may sustain (i) if for any reason
(other than solely by reason of such Lender being a Non-Funding Lender) a
proposed Borrowing, conversion into or continuation of Eurodollar Rate Loans
does not occur on a date specified therefor in a Notice of Borrowing or a Notice
of Conversion or Continuation given by the Borrower or in a telephonic request
by it for borrowing or conversion or continuation or a successive Interest
Period does not commence after notice therefor is given pursuant to Section 2.8
(Conversion/Continuation Option), (ii) if for any reason any Eurodollar Rate
Loan is prepaid (including mandatorily pursuant to Section 2.6 (Mandatory
Prepayments)) on a date that is not the last day of the applicable Interest
Period, (iii) as a consequence of a required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events indicated in clause
(d) above or (iv) as a consequence of any failure by the Borrower to repay
Eurodollar Rate Loans when required by the terms hereof. The Lender making
demand for such compensation shall deliver to the Borrower concurrently with
such demand a written statement as to such losses, expenses and liabilities, and
this statement shall be conclusive as to the amount of compensation due to such
Lender, absent manifest error.

 

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Section 2.12 Capital Adequacy

 

If at any time any Lender determines that (a) the adoption of, or any change in
or in the interpretation of, any law, treaty or governmental rule, regulation or
order after the date of this Agreement regarding capital adequacy, (b)
compliance with any such law, treaty, rule, regulation or order or (c)
compliance with any guideline or request or directive from any central bank or
other Governmental Authority (whether or not having the force of law) shall have
the effect of reducing the rate of return on such Lender’s (or any corporation
controlling such Lender’s) capital as a consequence of its obligations hereunder
to a level below that which such Lender or such corporation could have achieved
but for such adoption, change, compliance or interpretation, then, upon demand
from time to time by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such reduction. A
certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Lender shall be conclusive and binding for all purposes absent
manifest error.

 

Section 2.13 Taxes

 

(a) Except as otherwise provided in this Section 2.13, any and all payments by
any Loan Party under each Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding (i) in the case of each Lender and the Administrative Agent (A) taxes
measured by its net income, and franchise taxes imposed on it, and similar taxes
imposed by the jurisdiction (or any political subdivision thereof) under the
laws of which such Lender or the Administrative Agent (as the case may be) is
organized and (B) any U.S. withholding taxes payable with respect to payments
under the Loan Documents under laws (including any statute, treaty or
regulation) in effect on the Closing Date (or, in the case of (x) an Eligible
Assignee, the date of the Assignment and Acceptance and (y) a successor
Administrative Agent, the date of the appointment of such Administrative Agent)
applicable to such Lender or the Administrative Agent, as the case may be, but
not excluding any U.S. withholding taxes payable as a result of any change in
such laws occurring after the Closing Date (or the date of such Assignment and
Acceptance or the date of such appointment of such Administrative Agent) and
(ii) in the case of each Lender taxes measured by its net income, and franchise
taxes imposed on it as a result of a present or former connection between such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any taxing authority thereof or therein (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as “Taxes”). If any Taxes shall be required by law to be deducted
from or in respect of any sum payable under any Loan Document to any Lender or
the Administrative Agent (w) the sum payable shall be increased as may be
necessary so that, after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.13, such Lender, such
Issuer or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (x) the
relevant Loan Party shall make such deductions, (y) the relevant Loan Party
shall pay the full amount deducted to the relevant taxing authority or other
authority in accordance with applicable law and (z) the relevant Loan Party
shall deliver to the Administrative Agent evidence of such payment.

 

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(b) In addition, each Loan Party agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, in
each case arising from any payment made under any Loan Document or from the
execution, delivery or registration of, or otherwise with respect to, any Loan
Document (collectively, “Other Taxes”).

 

(c) Each Loan Party shall, jointly and severally, indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.13) paid by such Lender or the Administrative Agent (as the case may
be) and any liability (including for penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30 days
from the date such Lender, or the such Administrative Agent (as the case may be)
makes written demand therefor.

 

(d) Within 30 days after the date of any payment of Taxes or Other Taxes by any
Loan Party, the Borrower shall furnish to the Administrative Agent, at its
address referred to in Section 11.8 (Notices, Etc.), the original or a certified
copy of a receipt evidencing payment thereof.

 

(e) Without prejudice to the survival of any other agreement of any Loan Party
hereunder or under the Guaranty, the agreements and obligations of such Loan
Party contained in this Section 2.13 shall survive the payment in full of the
Obligations.

 

(f) (i) Each Non-U.S. Lender that is entitled to an exemption from U.S.
withholding tax, or that is subject to such tax at a reduced rate under an
applicable tax treaty, shall (v) on or prior to the Closing Date in the case of
each Non-U.S. Lender that is a signatory hereto, (w) on or prior to the date of
the Assignment and Acceptance pursuant to which such Non-U.S. Lender becomes a
Lender or the date a successor Administrative Agent becomes the Administrative
Agent hereunder, (x) on or prior to the date on which any such form or
certification expires or becomes obsolete, (y) after the occurrence of any event
requiring a change in the most recent form or certification previously delivered
by it to the Borrower and the Administrative Agent, and (z) from time to time if
requested by the Borrower or the Administrative Agent, provide the
Administrative Agent and the Borrower with two completed originals of each of
the following, as applicable:

 

(A) Form W-8ECI (claiming exemption from U.S. withholding tax because the income
is effectively connected with a U.S. trade or business) or any successor form;

 

(B) Form W-8BEN (claiming exemption from, or a reduction of, U.S. withholding
tax under an income tax treaty) or any successor form;

 

(C) in the case of a Non-U.S. Lender claiming exemption under Sections 871(h) or
881(c) of the Code, a Form W-8BEN (claiming exemption from U.S. withholding tax
under the portfolio interest exemption) or any successor form; or

 

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(D) any other applicable form, certificate or document prescribed by the IRS
certifying as to such Non-U.S. Lender’s entitlement to such exemption from U.S.
withholding tax or reduced rate with respect to all payments to be made to such
Non-U.S. Lender under the Loan Documents.

 

Unless the Borrower and the Administrative Agent have received forms or other
documents satisfactory to them indicating that payments under any Loan Document
to or for a Non-U.S. Lender are not subject to U.S. withholding tax or are
subject to such tax at a rate reduced by an applicable tax treaty, the Loan
Parties and the Administrative Agent shall withhold amounts required to be
withheld by applicable Requirements of Law from such payments at the applicable
statutory rate.

 

(ii) Each U.S. Lender shall (v) on or prior to the Closing Date in the case of
each U.S. Lender that is a signatory hereto, (w) on or prior to the date of the
Assignment and Acceptance pursuant to which such U.S. Lender becomes a Lender or
the date a successor Administrative Agent becomes the Administrative Agent
hereunder, (x) on or prior to the date on which any such form or certification
expires or becomes obsolete, (y) after the occurrence of any event requiring a
change in the most recent form or certification previously delivered by it to
the Borrower and the Administrative Agent, and (z) from time to time if
requested by the Borrower or the Administrative Agent, provide the
Administrative Agent and the Borrower with two completed originals of Form W-9
(certifying that such U.S. Lender is entitled to an exemption from U.S. backup
withholding tax) or any successor form. Solely for purposes of this Section
2.13(f), a U.S. Lender shall not include a Lender or an Administrative Agent
that may be treated as an exempt recipient based on the indicators described in
Treasury Regulation section 1.6049-4(c)(1)(ii).

 

Any Lender claiming any additional amounts payable pursuant to this Section 2.13
shall use its reasonable efforts (consistent with its internal policies and
Requirements of Law) to change the jurisdiction of its Applicable Lending Office
if the making of such a change would avoid the need for, or reduce the amount
of, any such additional amounts that would be payable or may thereafter accrue
and would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.

 

Section 2.14 Substitution of Lenders

 

(a) In the event that (i)(A) any Lender makes a claim under Section 2.11(c)
(Increased Costs) or Section 2.12 (Capital Adequacy), (B) it becomes illegal for
any Lender to continue to fund or make any Eurodollar Rate Loan and such Lender
notifies the Borrower pursuant to Section 2.11(d) (Illegality), (C) any Loan
Party is required to make any payment pursuant to Section 2.13 (Taxes) that is
attributable to a particular Lender or (D) any Lender becomes a Non-Funding
Lender, (ii) in the case of clause (i)(A) above, as a consequence of increased
costs in respect of which such claim is made, the effective rate of interest
payable to such Lender under this Agreement with respect to its Term Loans
materially exceeds the effective average annual rate of interest payable to the
Requisite Lenders under this Agreement and (iii) in the case of clause
(i)(A),(B) and (C) above, Lenders holding at least 75% of the Commitments are
not subject to such increased costs or illegality, payment or proceedings (any
such Lender, an “Affected Lender”), the Borrower may substitute any Lender and,
if reasonably acceptable to the Administrative Agent, any other Eligible
Assignee (a “Substitute Institution”) for such Affected Lender hereunder, after
delivery of a written notice (a “Substitution Notice”) by the Borrower to

 

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the Administrative Agent and the Affected Lender within a reasonable time (in
any case not to exceed 90 days) following the occurrence of any of the events
described in clause (i) above that the Borrower intends to make such
substitution; provided, however, that, if more than one Lender claims increased
costs, illegality or right to payment arising from the same act or condition and
such claims are received by the Borrower within 30 days of each other, then the
Borrower may substitute all, but not (except to the extent the Borrower has
already substituted one of such Affected Lenders before the Borrower’s receipt
of the other Affected Lenders’ claim) less than all, Lenders making such claims.

 

(b) If the Substitution Notice was properly issued under this Section 2.14, the
Affected Lender shall sell, and the Substitute Institution shall purchase, all
rights and claims of such Affected Lender under the Loan Documents and the
Substitute Institution shall assume, and the Affected Lender shall be relieved
of, all other prior unperformed obligations of the Affected Lender under the
Loan Documents (other than in respect of any damages (which pursuant to Section
11.5 (Limitations of Liability), do not include exemplary or punitive damages,
to the extent permitted by applicable law) in respect of any such unperformed
obligations). Such purchase and sale (and the corresponding assignment of all
rights and claims hereunder) shall be recorded in the Register maintained by the
Administrative Agent and shall be effective on (and not earlier than) the later
of (i) the receipt by the Affected Lender of its Ratable Portion of the Term
Loans, together with any other Obligations owing to it, (ii) the receipt by the
Administrative Agent of an agreement in form and substance satisfactory to it
and the Borrower whereby the Substitute Institution shall agree to be bound by
the terms hereof and (ii) the payment in full to the Affected Lender in cash of
all fees, unreimbursed costs and expenses and indemnities accrued and unpaid
through such effective date. Upon the effectiveness of such sale, purchase and
assumption, the Substitute Institution shall become a “Lender” hereunder for all
purposes of this Agreement having a Commitment in the amount of such Affected
Lender’s Commitment assumed by it and such Commitment of the Affected Lender
shall be terminated; provided, however, that all indemnities under the Loan
Documents shall continue in favor of such Affected Lender.

 

(c) Each Lender agrees that, if it becomes an Affected Lender and its rights and
claims are assigned hereunder to a Substitute Institution pursuant to this
Section 2.14, it shall execute and deliver to the Administrative Agent an
Assignment and Acceptance to evidence such assignment, together with any Note
(if such Term Loans are evidenced by a Note) evidencing the Term Loans subject
to such Assignment and Acceptance; provided, however, that the failure of any
Affected Lender to execute an Assignment and Acceptance shall not render such
assignment invalid.

 

ARTICLE III

 

CONDITIONS TO LOANS

 

Section 3.1 Conditions Precedent to Initial Loans

 

The obligation of each Lender to make the Term Loans requested to be made by it
on the Closing Date is subject to the satisfaction or due waiver in accordance
with Section 11.1 (Amendments, Waivers, Etc.) of each of the following
conditions precedent:

 

(a) Certain Documents. The Administrative Agent shall have received on or prior
to the Closing Date (and, to the extent any Borrowing of any Eurodollar Rate
Loans is

 

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requested to be made on the Closing Date, in respect of the Notice of Borrowing
for such Eurodollar Rate Loans, at least three Business Days prior to the
Closing Date) each of the following, each dated the Closing Date unless
otherwise indicated or agreed to by the Administrative Agent, in form and
substance satisfactory to the Administrative Agent and in sufficient copies for
each Lender:

 

(i) this Agreement, duly executed and delivered by the Borrower and, for the
account of each Lender requesting the same, a Note of the Borrower conforming to
the requirements set forth herein;

 

(ii) the Guaranty, duly executed by each Guarantor;

 

(iii) the Pledge and Security Agreement, duly executed by the Borrower and each
Guarantor, together with each of the following:

 

(A) evidence satisfactory to the Administrative Agent that, upon the filing and
recording of instruments delivered at the Closing, the Collateral Agent (for the
benefit of the Secured Parties) shall have a valid and perfected first priority
security interest in the Collateral, including (x) such documents duly executed
by each Loan Party as the Administrative Agent may request with respect to the
perfection of its security interests in the Collateral (including financing
statements under the UCC, patent, trademark and copyright security agreements
suitable for filing with the Patent and Trademark Office or the Copyright
Office, as the case may be, and other applicable documents under the laws of any
jurisdiction with respect to the perfection of Liens created by the Pledge and
Security Agreement) and (y) copies of UCC search reports as of a recent date
listing all effective financing statements that name any Loan Party as debtor,
together with copies of such financing statements, none of which shall cover the
Collateral except for those that shall be terminated on the Closing Date or are
otherwise permitted hereunder (including financing statements with respect to
the First Lien Credit Agreement);

 

(B) all certificates, instruments and other documents representing all Pledged
Stock being pledged pursuant to such Pledge and Security Agreement and stock
powers for such certificates, instruments and other documents executed in blank
(unless delivered to the First Lien Collateral Agent);

 

(C) all Deposit Account Control Agreements (other than any Deposit Account
Control Agreements subject to Section 7.17 (Post-Closing Obligations), duly
executed by the corresponding Deposit Account Bank and Loan Party, that, in the
reasonable judgment of the Administrative Agent, shall be required for the Loan
Parties to comply with Section 7.13 (Control Accounts, Approved Deposit
Accounts); and

 

(D) Securities Account Control Agreements duly executed by the appropriate Loan
Party and (1) all “securities intermediaries” (as defined in the UCC) with
respect to all Securities Accounts and securities entitlements of the Borrower
and each Guarantor and (2) all “commodities intermediaries” (as defined in the
UCC) with respect to all commodities contracts and commodities accounts held by
the Borrower and each Guarantor;

 

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(iv) the Intercreditor Agreement, duly executed by the Borrower, the
Administrative Agent, the Collateral Agent, and the administrative agent and
collateral agent under the First Lien Credit Agreement;

 

(v) Mortgages for all of the Real Properties of the Loan Parties identified on
Schedule 4.19 (Real Property) together with all Mortgage Supporting Documents
relating thereto (except as may be agreed to by the Administrative Agent);

 

(vi) a favorable opinion of (A) Alston & Bird, LLP, counsel to the Loan Parties,
addressed to the Administrative Agent, the Collateral Agent and the Lenders and
in form satisfactory to the Administrative Agent, (B) Kelley Drye & Warren LLP,
special counsel to the Loan Parties as to FCC matters, addressed to the
Administrative Agent, the Collateral Agent and the Lenders and in form
satisfactory to the Administrative Agent, and (C) counsel to the Loan Parties in
the States of Alabama, Florida, Georgia, South Carolina and Tennessee, in each
case, addressed to the Administrative Agent, the Collateral Agent and the
Lenders and addressing such other matters as any Lender through the
Administrative Agent may reasonably request;

 

(vii) a copy of each First Lien Loan Document, the documents governing the New
Preferred Stock and each redemption notice and each other document executed by
the Borrower, or its Subsidiaries, in connection with the redemption or
repayment of the Existing Indebtedness, in each case, certified as being
complete and correct by a Responsible Officer of the Borrower;

 

(viii) a copy of the articles or certificate of incorporation (or equivalent
Constituent Document) of each Loan Party, certified as of a recent date by the
Secretary of State of the state of organization of such Loan Party, together
with certificates of such official attesting to the good standing of each such
Loan Party;

 

(ix) a certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying (A) the names and true signatures of each officer of such Loan Party
that has been authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or on behalf of such
Loan Party, (B) the by-laws (or equivalent Constituent Document) of such Loan
Party as in effect on the date of such certification, (C) the resolutions of
such Loan Party’s board of directors (or equivalent governing body) approving
and authorizing the execution, delivery and performance of this Agreement and
the other Loan Documents to which it is a party and (D) that there have been no
changes in the certificate of incorporation (or equivalent Constituent Document)
of such Loan Party from the certificate of incorporation (or equivalent
Constituent Document) delivered pursuant to clause (viii) above;

 

(x) a certificate of the chief financial officer of the Borrower, stating that
the Borrower is Solvent after giving effect to the incurrence of Indebtedness
hereunder, the application of the proceeds thereof in accordance with the terms
of this Agreement and the First Lien Credit Agreement and the payment of all
estimated legal, accounting and other fees related thereto;

 

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(xi) a certificate of a Responsible Officer to the effect that (A) the
representations and warranties set forth in Article IV (Representations and
Warranties) and in the other Loan Documents shall be true and correct on and as
of the Closing Date, (B) no Default or Event of Default shall exist or be
continuing on the Closing Date after giving effect to the borrowings hereunder
and under the First Lien Credit Agreement, (C) the making of the Term Loans or
the loans under the First Lien Facilities on such date does not violate any
Requirement of Law on the date of or immediately following such date and is not
enjoined, temporarily, preliminarily or permanently and (D) no litigation not
listed on Schedule 4.7 (Litigation) has been commenced against any Loan Party or
any of its Subsidiaries that would have a Material Adverse Effect;

 

(xii) evidence satisfactory to the Administrative Agent that the insurance
policies required by Section 7.5 (Maintenance of Insurance) and any Collateral
Document are in full force and effect, together with, unless otherwise agreed by
the Administrative Agent, endorsements naming the Collateral Agent, on behalf of
the Secured Parties, as an additional insured or loss payee under all insurance
policies to be maintained with respect to the properties of the Borrower and
each other Loan Party;

 

(xiii) each of the representations and warranties set forth in Article IV
(Representations and Warranties) and in the other Loan Documents shall be true
and correct on and as of the Closing Date;

 

(xiv) Borrower shall have delivered to the Administrative Agent a Notice of
Borrowing substantially in the form of Exhibit C (Notice of Borrowing); and

 

(xv) such other certificates, documents, agreements and information respecting
any Loan Party as any Lender through the Administrative Agent may reasonably
request.

 

(b) Fees and Expenses Paid. There shall have been paid to the Administrative
Agent, for the account of the Administrative Agent and the Lenders, as
applicable, all fees and expenses (including reasonable fees and expenses of
counsel) due and payable on or before the Closing Date (including all such fees
described in the Fee Letter).

 

(c) Refinancing of Existing Indebtedness. Concurrently with the initial
Borrowings hereunder, (i) the Existing Indebtedness under the Existing Wachovia
Credit Agreement shall be paid-in-full and terminated on terms satisfactory to
the Administrative Agent, (ii) the Existing CoBank Credit Agreement shall be
purchased at par by, and assigned to, the Borrower and pledged to the
Administrative Agent for the benefit of Lenders to secure the Obligations, in
each case, on terms satisfactory to the Administrative Agent, (iii) the
Administrative Agent shall have received a payoff letter duly executed and
delivered by the Borrower and the applicable lenders or their agent under each
Existing Credit Agreement and evidence of the release, or arrangements therefor,
of all related Liens and guarantees, in each case, in form and substance
satisfactory to the Administrative Agent and (iv) Borrower shall have deposited
with CSFB an amount sufficient to redeem the Existing Notes in full and such
deposit shall be subject to the terms of the Escrow Agreement.

 

(d) Debt Rating Condition. The Term Loan Facility shall have been rated by S&P
and by Moody’s.

 

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(e) FirstLien Loan Documents. Concurrently with the initial Borrowings
hereunder, the Borrower shall have satisfied each of the conditions under
Section 3.1 (Condition Precedent to Initial Loans) of the First Lien Credit
Agreement and shall have borrowed the term loan in the amount of $185,000,000
under the First Lien Term Facility.

 

(f) Consents, Etc. The Administrative Agent shall have received copies of all
CATV Franchises (and resolutions relating thereto), Pole Agreements,
Communications Licenses, Programming Agreements, Network Agreements in existence
as of the date hereof. each of the Borrower and its Subsidiaries shall have
received all consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
consents and Permits of, and effected all notices to and filings with, any
Governmental Authority, including, in each case, in connection with all
Communications Licenses, CATV Franchises and PUC Authorizations, in each case,
as may be necessary to allow each of the Borrower and its Subsidiaries lawfully
(i) to execute, deliver and perform, in all material respects, their respective
obligations hereunder and under the Loan Documents to which each of them,
respectively, is, or shall be, a party and each other agreement or instrument to
be executed and delivered by each of them, respectively, pursuant thereto or in
connection therewith and (ii) other than those required consents identified in
Schedule 7.12 hereof, to create and perfect the Liens on the Collateral to be
owned by each of them in the manner and for the purpose contemplated by the Loan
Documents.

 

(g) New Preferred Stock Issuance. The Borrower shall have completed its issuance
of the New Preferred Stock prior to the Closing Date on terms and conditions
acceptable to the Administrative Agent and shall have received gross cash
proceeds of not less than $9,200,000 from such issuance.

 

(h) Capitalization. The Administrative Agent shall be reasonably satisfied with
any changes to the capitalization, structure or equity ownership of the Borrower
and its Subsidiaries from, in each case, that described in the Borrower’s annual
report filed on Form 10-K with the Securities and Exchange Commission for the
year ended December 31, 2004; and, after giving effect to the transactions
contemplated to occur on the Closing Date by this Agreement and the First Lien
Credit Agreement, the Borrower and its Subsidiaries shall have no outstanding
Indebtedness or preferred stock other than (i) Indebtedness under this Agreement
and the First Lien Credit Agreement, (ii) the New Preferred Stock and (iii)
other Indebtedness existing on the Closing Date (after giving effect to the
transactions contemplated by this Agreement) as set forth on Schedule 8.1
(Existing Indebtedness).

 

(i) Financial Statements. The Administrative Agent shall have received (i) GAAP
audited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of the Borrower and its Subsidiaries for the
2002, 2003 and 2004 Fiscal Years, (ii) GAAP unaudited consolidated balance
sheets and related statements of income, stockholders’ equity and cash flows of
the Borrower and its Subsidiaries for (x) the Fiscal Quarter ended March 31,
2005 and each subsequent Fiscal Quarter ended 30 days before the Closing Date
and (y) each fiscal month after the most recent Fiscal Quarter for which
financial statements were received by the Administrative Agent and ended 30 days
before the Closing Date, which financial statements, in each case, shall not be
materially inconsistent with the financial statements or forecasts previously
provided to the Administrative Agent and (iii) a certificate of the chief
financial officer of the Borrower stating that the financial statements
delivered pursuant to this clause (i) are accurate and complete in all respects.

 

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(j) EBITDA Certification. The Administrative Agent shall have received (i) a
certificate of the chief financial officer of the Borrower, satisfactory to the
Administrative Agent, certifying that (x) the Borrower and its Subsidiaries, on
a Consolidated basis, have achieved EBITDA equal to at least $9,815,643 for the
Fiscal Quarter ending March 31, 2005 and that EBITDA for the four Fiscal
Quarters ending March 31, 2005 equals at least $33,829,892, and (y) the ratio of
(1) First Lien Covenant Debt outstanding on the Closing Date, after giving
effect to the making of the Term Loans and the application of the proceeds
thereof, to (2) an amount equal to (A) four multiplied by (B) the EBITDA of the
Borrower and its Subsidiaries for the three-month period ending May 31, 2005
does not exceed 4.5 to 1.0 and (ii) the Projections, showing EBITDA equal to at
least $45,000,000 for the Fiscal Year of 2005.

 

(k) Regulatory Compliance. The Administrative Agent shall have received, at
least five Business Days prior to the Closing Date, all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the Patriot
Act.

 

Section 3.2 Determinations of Initial Borrowing Conditions

 

For purposes of determining compliance with the conditions specified in Section
3.1 (Conditions Precedent to Initial Loans), each Lender shall be deemed to have
consented to, approved, accepted or be satisfied with, each document or other
matter required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the initial Borrowing specifying its
objection thereto and such Lender shall not have made available to the
Administrative Agent such Lender’s Ratable Portion of such Borrowing.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders and the Administrative Agent to enter into this Agreement,
the Borrower represents and warrants each of the following to the Lenders and
the Administrative Agent, on and as of the Closing Date and after giving effect
to the making of the Term Loans and the other financial accommodations on the
Closing Date:

 

Section 4.1 Corporate Existence; Compliance with Law

 

The Borrower and each of the Borrower’s Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) is duly qualified to do business as a foreign entity and in
good standing under the laws of each jurisdiction where such qualification is
necessary, except where the failure to be so qualified or in good standing would
not, in the aggregate, have a Material Adverse Effect, (c) has all requisite
power and authority and the legal right to own, pledge, mortgage and operate its
properties, to lease the property it operates under lease and to conduct its
business as now or currently proposed to be conducted, (d) is in compliance with
its Constituent Documents, (e) is in compliance with all applicable Requirements
of Law except where the failure to be in compliance would not, in the aggregate,
have a Material Adverse Effect and (f) has all necessary Permits from or by, has
made all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct,

 

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except for Permits or filings that can be obtained or made by the taking of
ministerial action to secure the grant or transfer thereof or the failure to
obtain or make would not, in the aggregate, have a Material Adverse Effect.

 

Section 4.2 Corporate Power; Authorization; Enforceable Obligations

 

The execution, delivery and performance by each Loan Party of the Loan Documents
to which it is a party and the consummation of the transactions contemplated
thereby:

 

(i) are within such Loan Party’s corporate, limited liability company,
partnership or other powers;

 

(ii) have been or, at the time of delivery thereof pursuant to Article III
(Conditions To Loans) will have been duly authorized by all necessary action,
including the consent of shareholders, partners and members where required;

 

(iii) do not and will not (A) contravene or violate such Loan Party’s or any of
its Subsidiaries’ respective Constituent Documents, (B) violate any other
Requirement of Law applicable to such Loan Party (including Regulations T, U and
X of the Federal Reserve Board), or any order or decree of any Governmental
Authority or arbitrator applicable to such Loan Party, (C) conflict with or
result in the breach of, or constitute a default under, or result in or permit
the termination or acceleration of, any material Contractual Obligation of such
Loan Party or any of its Subsidiaries or (D) result in the creation or
imposition of any Lien upon any property of such Loan Party or any of its
Subsidiaries, other than those in favor of the Secured Parties pursuant to the
Collateral Documents; and

 

(iv) do not require the consent of, authorization by, approval of, notice to, or
filing or registration with, any Governmental Authority or any other Person,
other than those listed on Schedule 4.2 (Consents) and that have been or will
be, prior to the Closing Date, obtained or made, copies of which have been or
will be delivered to the Administrative Agent pursuant to Section 3.1
(Conditions Precedent to Initial Loans), and each of which on the Closing Date
will be in full force and effect and, with respect to the Collateral, filings
required to perfect the Liens created by the Collateral Documents.

 

(b) This Agreement has been, and each of the other Loan Documents will have been
upon delivery thereof pursuant to the terms of this Agreement, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and the other
Loan Documents will be, when delivered hereunder, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan Party
in accordance with its terms.

 

Section 4.3 Ownership of Borrower; Subsidiaries

 

(a) As of the Closing Date, the authorized capital stock of the Borrower
consists of 200,000,000 shares of common stock, $0.01 par value per share, of
which 23,697,787 shares are issued and outstanding. All of the outstanding
capital stock of the Borrower has been validly issued, is fully paid and
non-assessable. As of the Closing Date, no Stock of the Borrower is subject to
any option, warrant, right of conversion or purchase or any similar right except
as disclosed in the Disclosure Documents. As of the Closing Date, there are no
agreements or understandings to which the Borrower is a party with respect to
the voting, sale or transfer of any shares of Stock of the Borrower or any
agreement restricting the transfer or hypothecation of any such shares.

 

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(b) Set forth on Schedule 4.3 (Ownership of Subsidiaries) is a complete and
accurate list showing, as of the Closing Date, all Subsidiaries of the Borrower
and, as to each such Subsidiary, the jurisdiction of its organization, the
number of shares of each class of Stock authorized (if applicable), the number
outstanding on the Closing Date and the number and percentage of the outstanding
shares of each such class owned (directly or indirectly) by the Borrower. No
Stock or any Subsidiary of the Borrower is subject to any outstanding option,
warrant, right of conversion or purchase of any similar right. All of the
outstanding Stock of each Subsidiary of the Borrower owned (directly or
indirectly) by the Borrower has been validly issued, is fully paid and
non-assessable (to the extent applicable) and is owned by the Borrower or a
Subsidiary of the Borrower, free and clear of all Liens (other than the Lien in
favor of the Secured Parties created pursuant to the Pledge and Security
Agreement), options, warrants, rights of conversion or purchase or any similar
rights. Neither the Borrower nor any such Subsidiary is a party to, or has
knowledge of, any agreement restricting the transfer or hypothecation of any
Stock of any such Subsidiary, other than the Loan Documents. Borrower does not
own or hold, directly or indirectly, any Stock of any Person other than such
Subsidiaries and Investments permitted by Section 8.3 (Investments).

 

Section 4.4 Financial Statements

 

(a) The audited Consolidated balance sheets of the Borrower and its Subsidiaries
and related audited Consolidated statements of income, retained earnings and
cash flows of the Borrower and its Subsidiaries delivered to the Administrative
Agent pursuant to Section 3.1(k) (Conditions Precedent to Initial Loans) fairly
present the Consolidated financial condition of the Borrower and its
Subsidiaries as at such dates and the Consolidated results of the operations of
the Borrower and its Subsidiaries for the period ended on such dates, as
applicable, all in conformity with GAAP.

 

(b) Neither the Borrower nor any of the Borrower’s Subsidiaries has any material
obligation, contingent liability or liability for taxes, long-term leases or
unusual forward or long-term commitment that is not reflected in the Financial
Statements referred to in clause (a) above or in the notes thereto and not
otherwise permitted by this Agreement.

 

(c) The Projections have been prepared by the Borrower in light of the past
operations of its business and are based upon estimates and assumptions stated
therein, all of which the Borrower believes to be reasonable and fair in light
of current conditions and current facts known to the Borrower and, as of the
Closing Date, reflect the Borrower’s good faith and reasonable estimates of the
future financial performance of the Borrower and its Subsidiaries and of the
other information projected therein for the periods set forth therein.

 

(d) The unaudited Consolidated balance sheets of the Borrower and its
Subsidiaries and related statements of income, stockholders’ equity and cash
flows of the Borrower and its Subsidiaries delivered to the Administrative Agent
pursuant to Section 3.1(k) (Conditions Precedent to Initial Loans) have been
prepared and reflect, as of the respective dates indicated, the Consolidated
financial condition of the Borrower and its Subsidiaries.

 

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Section 4.5 Material Adverse Change

 

Since December 31, 2004, there has been no Material Adverse Change and there
have been no events or developments that, in the aggregate, have had a Material
Adverse Effect.

 

Section 4.6 Solvency

 

Both before and after giving effect to (a) the extensions of credit under this
Agreement and the First Lien Credit Agreement, in each case, to be made on the
Closing Date or such other date as requested hereunder, (b) the disbursement by
the Borrower of the proceeds thereof as contemplated by this Agreement and the
First Lien Credit Agreement and (c) the payment and accrual of all transaction
costs in connection with the foregoing, each Loan Party is Solvent.

 

Section 4.7 Litigation

 

Except as set forth on Schedule 4.7 (Litigation), there are no pending or, to
the knowledge of the Borrower, threatened actions, investigations or proceedings
affecting the Borrower or any of its Subsidiaries before any court, Governmental
Authority or arbitrator other than those that, in the aggregate, would not have
a Material Adverse Effect. The performance of any action by any Loan Party
required or contemplated by any Loan Document or First Lien Loan Document is not
restrained or enjoined (either temporarily, preliminarily or permanently).

 

Section 4.8 Taxes

 

(a) All federal, state, local and foreign income and franchise and other
material tax returns, reports and statements (collectively, the “Tax Returns”)
required to be filed by the Borrower or any of its Tax Affiliates have been
filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct in all material respects, and all taxes, charges and other
impositions reflected therein or otherwise due and payable have been paid prior
to the date on which any fine, penalty, interest, late charge or loss may be
added thereto for non-payment thereof except where contested in good faith and
by appropriate proceedings if adequate reserves therefor have been established
on the books of the Borrower or such Tax Affiliate in conformity with GAAP. No
Tax Return is under audit or examination by any Governmental Authority and no
notice of such an audit or examination or any assertion of any claim for Taxes
has been given or made by any Governmental Authority. Proper and accurate
amounts have been withheld by the Borrower and each of its Tax Affiliates from
their respective employees for all periods in full and complete compliance with
the tax, social security and unemployment withholding provisions of applicable
Requirements of Law and such withholdings have been timely paid to the
respective Governmental Authorities.

 

(b) None of the Borrower or any of its Tax Affiliates has (i) executed or filed
with the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for the filing of any
Tax Return or the assessment or collection of any charges, (ii) incurred any
obligation under any tax sharing agreement or arrangement other than those of
which the Administrative Agent has received a copy prior to the date hereof or
(iii) been a member of an affiliated, combined or unitary group other than the
group of which the Borrower (or its Tax Affiliate) is the common parent.

 

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Section 4.9 Full Disclosure

 

(a) All information prepared or furnished by or on behalf of the Borrower in
connection with this Agreement or the First Lien Loan Documents or the
consummation of the transactions contemplated hereunder and thereunder taken as
a whole, including the information contained in the Confidential Information
Memorandum and in the Disclosure Documents, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein or herein not misleading. All facts known to
the Borrower and material to an understanding of the financial condition,
business, properties or prospects of the Borrower and its Subsidiaries taken as
one enterprise have been disclosed to the Lenders.

 

(b) The Borrower has delivered to each Lender a true, complete and correct copy
of each Disclosure Document. The Disclosure Documents comply as to form in all
material respects with all applicable requirements of all applicable state and
Federal securities laws.

 

Section 4.10 Margin Regulations

 

The Borrower is not engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulation U of
the Federal Reserve Board), and no proceeds of any Term Loan will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock in contravention of
Regulation T, U or X of the Federal Reserve Board.

 

Section 4.11 No Burdensome Restrictions; No Defaults

 

(a) Neither the Borrower nor any Subsidiary of the Borrower (i) is a party to
any Contractual Obligation the compliance with one or more of which would have,
in the aggregate, a Material Adverse Effect or the performance of which by any
thereof, either unconditionally or upon the happening of an event, would result
in the creation of a Lien (other than a Lien permitted under Section 8.2 (Liens,
Etc.)) on the assets of any thereof or (ii) is subject to one or more charter or
corporate restrictions that would, in the aggregate, have a Material Adverse
Effect.

 

(b) Neither the Borrower nor any Subsidiary of the Borrower is in default under
or with respect to any Contractual Obligation owed by it and, to the knowledge
of the Borrower, no other party is in default under or with respect to any
Contractual Obligation owed to any Loan Party or to any Subsidiary of any Loan
Party, other than, in either case, those defaults that, in the aggregate, would
not have a Material Adverse Effect.

 

(c) No Default or Event of Default has occurred and is continuing.

 

(d) To the best knowledge of the Borrower, there are no Requirements of Law
applicable to any Loan Party or any Subsidiary of any Loan Party the compliance
with which by such Loan Party or such Subsidiary, as the case may be, would, in
the aggregate, have a Material Adverse Effect.

 

(e) Except as set forth on Schedule 4.11 (Build-Out Obligations), neither the
Borrower nor any Subsidiary of the Borrower has any outstanding Contractual
Obligation to make capital expenditures (as defined in accordance with GAAP) in
excess of $2,000,000 in aggregate at any time.

 

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Section 4.12 Investment Company Act; Public Utility Holding Company Act

 

None of the Borrower or any Subsidiary of the Borrower is (a) an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company,” as such terms are defined in the Investment
Company Act of 1940, as amended or (b) a “holding company” or an “affiliate” of
a “holding company” or a “subsidiary company” of a “holding company,” as each
such term is defined and used in the Public Utility Holding Company Act of 1935,
as amended.

 

Section 4.13 Use of Proceeds

 

The proceeds of the Term Loan are being used by the Borrower (and, to the extent
distributed to them by the Borrower, each other Loan Party) solely (a) together
with the proceeds of the First Lien Term Facility and the New Preferred Stock,
to refinance all Existing Indebtedness and related transaction costs, fees and
expenses and for the payment of transaction costs, fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby and (b)
to provide for working capital and for general corporate purposes.

 

Section 4.14 Insurance

 

All policies of insurance of any kind or nature of the Borrower or any of its
Subsidiaries, including policies of life, fire, theft, product liability, public
liability, property damage, other casualty, employee fidelity, workers’
compensation and employee health and welfare insurance, are in full force and
effect and are of a nature and provide such coverage as is sufficient and as is
customarily carried by businesses of the size and character of such Person. None
of the Borrower or any of its Subsidiaries has been refused insurance for any
material coverage for which it had applied or had any policy of insurance
terminated (other than at its request).

 

Section 4.15 Labor Matters

 

(a) There are no strikes, work stoppages, slowdowns or lockouts pending or
threatened against or involving the Borrower or any of its Subsidiaries, other
than those that, in the aggregate, would not have a Material Adverse Effect.

 

(b) There are no unfair labor practices, grievances, complaints or arbitrations
pending, or, to the Borrower’s knowledge, threatened, against or involving the
Borrower or any of its Subsidiaries, nor are there any arbitrations or
grievances threatened involving the Borrower or any of its Subsidiaries, other
than those that, in the aggregate, would not have a Material Adverse Effect.

 

(c) Except as set forth on Schedule 4.15 (Labor Matters), as of the Closing
Date, there is no collective bargaining agreement covering any employee of the
Borrower or its Subsidiaries.

 

(d) Schedule 4.15 (Labor Matters) sets forth, as of the date hereof, all
material consulting agreements, executive employment agreements, executive
compensation plans, deferred compensation agreements, employee stock purchase
and stock option plans and severance plans of the Borrower and any of its
Subsidiaries.

 

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Section 4.16 ERISA

 

(a) Schedule 4.16 (List of Plans) separately identifies as of the date hereof
all Title IV Plans, all Multiemployer Plans and all of the employee benefit
plans within the meaning of Section 3(3) of ERISA to which the Borrower or any
of its Subsidiaries has any obligation or liability, contingent or otherwise.

 

(b) Each employee benefit plan of the Borrower or any of the Borrower’s
Subsidiaries intended to qualify under Section 401 of the Code does so qualify,
and any trust created thereunder is exempt from tax under the provisions of
Section 501 of the Code, except where such failures, in the aggregate, would not
have a Material Adverse Effect.

 

(c) Each Title IV Plan is in compliance in all material respects with applicable
provisions of ERISA, the Code and other Requirements of Law except for
non-compliances that, in the aggregate, would not have a Material Adverse
Effect.

 

(d) There has been no, nor is there reasonably expected to occur, any ERISA
Event other than those that, in the aggregate, would not have a Material Adverse
Effect.

 

(e) Except to the extent set forth on Schedule 4.16 (List of Plans), none of the
Borrower nor any of the Borrower’s Subsidiaries or any ERISA Affiliate would
have any Withdrawal Liability as a result of a complete withdrawal as of the
date hereof from any Multiemployer Plan.

 

Section 4.17 Environmental Matters

 

(a) The operations of the Borrower and each of its Subsidiaries have been and
are in compliance with all Environmental Laws, including obtaining and complying
with all required environmental, health and safety Permits, other than
non-compliances that, in the aggregate, would not have a reasonable likelihood
of the Borrower and its Subsidiaries incurring Environmental Liabilities and
Costs after the date hereof which would exceed $1,000,000.

 

(b) None of the Borrower or any of its Subsidiaries or any Real Property
currently or, to the knowledge of the Borrower, previously owned, operated or
leased by or for the Borrower or any of its Subsidiaries is subject to any
pending or, to the knowledge of the Borrower, threatened, claim, order,
agreement, notice of violation, notice of potential liability or is the subject
of any pending or threatened proceeding or governmental investigation under or
pursuant to Environmental Laws other than those that, in the aggregate, are not
reasonably likely to result in the Borrower and its Subsidiaries incurring
Environmental Liabilities and Costs which would exceed $1,000,000.

 

(c) Except as disclosed on Schedule 4.17 (Environmental Matters), none of the
Borrower or any of its Subsidiaries is a treatment, storage or disposal facility
requiring a Permit under the Resource Conservation and Recovery Act, 42 U.S.C. §
6901 et seq., the regulations thereunder or any state analog.

 

(d) There are no facts, circumstances or conditions arising out of or relating
to the operations or ownership of the Borrower or of Real Property owned,
operated or leased by the Borrower or any of its Subsidiaries that are not
specifically included in the financial information furnished to the Lenders
other than those that, in the aggregate, would not have a reasonable likelihood
of the Borrower and its Subsidiaries incurring Environmental Liabilities and
Costs in excess of $1,000,000.

 

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(e) As of the date hereof, no Environmental Lien has attached to any property of
the Borrower or any of its Subsidiaries and, to the knowledge of the Borrower,
no facts, circumstances or conditions exist that could reasonably be expected to
result in any such Lien attaching to any such property.

 

(f) The Borrower and each of its Subsidiaries has provided the Lenders with
copies of all environmental, health or safety audits, studies, assessments,
inspections, investigations or other environmental health and safety reports
relating to the operations of the Borrower or any of its Subsidiaries or any
Real Property of any of them that are in the possession, custody or control of
the Borrower or any of its Subsidiaries.

 

Section 4.18 Intellectual Property

 

The Borrower and its Subsidiaries own or license or otherwise have the right to
use all licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, copyright applications,
Internet domain names, franchises, authorizations and other intellectual
property rights (including all Intellectual Property as defined in the Pledge
and Security Agreement) that are necessary for the operations of their
respective businesses, without infringement upon or conflict with the rights of
any other Person with respect thereto, including all trade names associated with
any private label brands of the Borrower or any of its Subsidiaries, except
those that would not have a Material Adverse Effect. To the Borrower’s
knowledge, no license, permit, patent, patent application, trademark, trademark
application, service mark, trade name, copyright, copyright application,
Internet domain name, franchise, authorization, other intellectual property
right (including all “Intellectual Property” as defined in the Pledge and
Security Agreement), slogan or other advertising device, product, process,
method, substance, part or component, or other material now employed, or now
contemplated to be employed, by the Borrower or any of its Subsidiaries
infringes upon or conflicts with any rights owned by any other Person, and no
claim or litigation regarding any of the foregoing is pending or threatened.

 

Section 4.19 Title; Real Property

 

(a) Each of the Borrower and its Subsidiaries has good and marketable title to,
or valid leasehold interests in, all Real Property and good title to all
personal property, in each case that is purported to be owned or leased by it,
including those reflected on the most recent Financial Statements delivered by
the Borrower, and none of such properties and assets is subject to any Lien,
except Liens permitted under Section 8.2 (Liens, Etc.). The Borrower and its
Subsidiaries have received all deeds, assignments, waivers, consents,
non-disturbance and recognition or similar agreements, bills of sale and other
documents in respect of, and have duly effected all recordings, filings and
other actions necessary to establish, protect and perfect, the Borrower’s and
its Subsidiaries’ right, title and interest in and to all such property.

 

(b) Set forth on Schedule 4.19 (Real Property) is a complete and accurate list
of all Real Property of each Loan Party and showing, as of the Closing Date, the
current street address (including, where applicable, county, state and other
relevant jurisdictions), record owner and, where applicable, lessee thereof.

 

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(c) As of the Closing Date, no Loan Party nor any of its Subsidiaries owns or
holds, or is obligated under or a party to, any lease, option, right of first
refusal or other contractual right to purchase, acquire, sell, assign, dispose
of or lease any Real Property of such Loan Party or any of its Subsidiaries.

 

(d) As of the Closing Date, no portion of any Real Property of any Loan Party or
any of its Subsidiaries has suffered any material damage by fire or other
casualty loss that has not heretofore been completely repaired and restored to
its original condition. Except as disclosed to the Administrative Agent, no
portion of any Real Property of any Loan Party or any of its Subsidiaries is
located in a special flood hazard area as designated by any federal Governmental
Authority.

 

(e) All Permits required to have been issued or appropriate to enable all Real
Property of the Borrower or any of its Subsidiaries to be lawfully occupied and
used for all of the purposes for which they are currently occupied and used have
been lawfully issued and are in full force and effect, other than those that, in
the aggregate, would not have a Material Adverse Effect.

 

(f) None of the Borrower or any of its Subsidiaries has received any notice, or
has any knowledge, of any pending, threatened or contemplated condemnation
proceeding affecting any Real Property of the Borrower or any of its
Subsidiaries or any part thereof, except those that, in the aggregate, would not
have a Material Adverse Effect.

 

Section 4.20 Interactive Broadband Networks and Communications Law Matters.

 

(a) Interactive Broadband Networks. Schedule 4.20(a) hereto sets forth, as of
the Closing Date, a true and complete list of each Interactive Broadband Network
owned or operated by any Loan Party identified by the jurisdiction served by
such Interactive Broadband Network.

 

(b) CATV Franchises. Schedule 4.20(b) hereto sets forth, as of the Closing Date,
a true and complete list of the CATV Franchises (and expiration dates thereof)
of each Loan Party and the jurisdiction served thereby.

 

(c) Local Authorizations. Schedule 4.20(c) hereto sets forth, as of the Closing
Date, a true and complete list of all Communications Licenses and other PUC
Authorizations (and the expiration dates thereof) of each Loan Party pertaining
to the provision of local telecommunications services and high-speed internet
access and, if applicable, the jurisdiction served thereby.

 

(d) Long Distance Authorizations. Schedule 4.20(d) hereto sets forth, as of the
Closing Date, a true and complete list of all Communications Licenses and other
PUC Authorizations (and the expiration dates thereof) of each Loan Party
pertaining to the provision of long distance telecommunications services and
high-speed internet access and, if applicable, the jurisdiction served thereby.

 

(e) Other Authorizations. Schedule 4.20(e) hereto sets forth, as of the Closing
Date, a true and complete list of all Communications Licenses and other PUC
Authorizations (and the expiration dates thereof) not listed on any other
Schedule hereto of any Loan Party, and, if applicable, the jurisdiction served
thereby.

 

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(f) Network Agreements. Schedule 4.20(f) hereto sets forth, as of the Closing
Date, a true and complete list of the Network Agreements of each Loan Party
which constitute material Contractual Obligations, each of which is in full
force and effect and neither any Loan Party nor, to the best knowledge of any
Loan Party, any of the other parties thereto, is in default of any of the
provisions thereof in any material respect.

 

(g) Communications Law. No Loan Party is in violation of any duty or obligation
required by any Communications Law, the Cable Act or any other Requirement of
Law pertaining to or regulating the operation of any Interactive Broadband
Network or the provision of Broadband Services, except where such violation
could not reasonably be expected to result in a Material Adverse Effect.

 

(h) Broadband Approvals. Except as set forth on Schedule 7.12, each Loan Party
possess approvals from each Governmental Authority necessary (i) to enter into
and perform the respective obligations of each Loan Party under each Loan
Document to which it is a party (including the granting of guarantees and
security interests thereunder) and (ii) to own and operate any Interactive
Broadband Network or any other long distance telecommunications systems
presently operated by such Loan Party or otherwise for the operations of their
businesses and are not in violation thereof, except (in the case of clause (ii)
only) where the failure to so possess could not reasonably be expected to have a
Material Adverse Effect. All material approvals from each Governmental Authority
are in full force and effect and no event has occurred that permits, or after
notice or lapse of time could permit, the revocation, termination or material
and adverse modification of any such approval.

 

(i) Communications Licenses. There is not pending or, to the best knowledge of
any Loan Party, threatened, any action by the FCC or any other Governmental
Authority to revoke, cancel, suspend or refuse to renew any Communications
License, CATV Franchise or PUC Authorization held by any Loan Party or any of
its Subsidiaries. There is not pending or, to the best knowledge of any Loan
Party, threatened, any action by the FCC or any other Governmental Authority to
modify adversely, revoke, cancel, suspend or refuse to renew any other approvals
from any Governmental Authority. To the knowledge of the Loan Parties, no event
has occurred and is continuing which could reasonably be expected to (i) result
in the imposition of a material forfeiture or the revocation, termination or
adverse modification of any such Communications License or PUC Authorization or
(ii) materially and adversely affect any rights of any Loan Party thereunder.
Each Loan Party has no reason to believe and has no knowledge that any of its
Communications Licenses or PUC Authorizations will fail to be renewed in the
ordinary course.

 

(j) Rate Regulation. Except as set forth on Schedule 4.20(j), as of the Closing
Date, no franchising authority has notified any Loan Party of its application to
be certified to regulate rates as provided in Section 76.910 of the FCC rules
implementing the rate regulation provisions of the Cable Act and no Governmental
Authority that has issued a CATV Franchise to any Loan Party has notified any
Loan Party that it has been certified and has adopted regulations required to
commence regulation as provided in Section 76.910(c)(2) of such rate regulation
rules.

 

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(k) Proceedings. There is not issued or outstanding or, to the best knowledge of
any Loan Party, threatened, any notice of any hearing, violation or complaint
against any Loan Party with respect to the provision of Broadband Services by
any Loan Party or with respect to the operation of any portion of any
Interactive Broadband Network, except for any such hearing, violation or
complaint which could not reasonably be expected to have a Material Adverse
Effect and, as of the Closing Date, no Loan Party has any knowledge that any
Person intends to contest renewal of any Communication License, PUC
Authorization, CATV Franchise or other approval from any Governmental Authority
or Pole Agreement.

 

(l) Copyrights. All notices, statements of account, supplements and other
documents required under Section 111 of the Copyright Act of 1976 and under the
rules of the Copyright Office with respect to the carriage of off-air signals by
the Interactive Broadband Networks have been duly filed, and the proper amount
of copyright fees have been paid on a timely basis, and each such Interactive
Broadband Network qualifies for the compulsory license under Section 111 of the
Copyright Act of 1976, except where failure to so file, pay or qualify could not
reasonably be expected to result in a Material Adverse Effect.

 

(m) Off-air Signals. The carriage of all off-air signals by the Interactive
Broadband Networks is permitted by valid retransmission consent agreements or by
must-carry elections by broadcasters, or is otherwise permitted under
Requirement of Law.

 

(n) Condition of Systems. All of the material properties, equipment and systems
of each Loan Party, including the Interactive Broadband Networks, are, and all
those to be added in connection with any contemplated system expansion or
construction will be, in good repair and condition, ordinary wear and tear
excepted, and in working order and condition which is in accordance with
applicable industry standards, and are and will be in compliance with all
standards or rules imposed by any Governmental Authority, except where failure
to be in such condition or to so comply could not reasonably be expected to
result in a Material Adverse Effect.

 

(o) Fees. Each Loan Party has paid all franchise, license or other fees and
charges material to the CATV Franchises, Communications Licenses, PUC
Authorizations, any Interactive Broadband Network and other matters respecting
the operation of its business which have become due pursuant to any approval
from any Governmental Authority or other permit in respect of its business,
except where the failure to so pay could not reasonably be expected to result in
a Material Adverse Effect.

 

Section 4.21 Prohibited Persons; Trade Restrictions

 

No Loan Party nor any of their respective Affiliates is a Prohibited Person.
None of the funds or other assets of any Loan Party constitute property of, or
are beneficially owned, directly or indirectly, by any person, entity or
government subject to trade restrictions under U.S. law, including the
International Emergency Economic Powers Act, The Trading with the Enemy Act, and
any Executive Orders or regulations promulgated thereunder with the result that
any transaction contemplated by this Agreement (whether directly or indirectly),
is prohibited by law or the Term Loans or any extensions of credit hereunder are
in violation of law. None of the funds of any Loan Party have been derived from
any unlawful activity with the result that any transaction contemplated by this
Agreement (whether directly or indirectly), is prohibited by law or the Term
Loans or any extensions of credit hereunder are in violation of law.

 

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ARTICLE V

 

FINANCIAL COVENANTS

 

The Borrower agrees with the Lenders and the Administrative Agent to each of the
following as long as any Obligation remains outstanding and, in each case,
unless the Requisite Lenders otherwise consent in writing:

 

Section 5.1 Maximum Leverage Ratio

 

The Borrower shall maintain, on each day of each Fiscal Quarter set forth below,
a Leverage Ratio of not more than the maximum ratio set forth below opposite
such Fiscal Quarter:

 

FISCAL QUARTER

ENDING

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

  

MAXIMUM

LEVERAGE RATIO

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

June 30, 2005

   7.25 to 1

September 30, 2005

   7.25 to 1

December 31, 2005

   7.25 to 1

March 31, 2006

   7.25 to 1

June 30, 2006

   7.25 to 1

September 30, 2006

   7.25 to 1

December 31, 2006

   7.25 to 1

March 31, 2007

   7.25 to 1

June 30, 2007

   7.10 to 1

September 30, 2007

   7.00 to 1

December 31, 2007

   6.85 to 1

March 31, 2008

   6.70 to 1

June 30, 2008

   6.35 to 1

September 30, 2008

   6.25 to 1

December 31, 2008

   6.20 to 1

March 31, 2009

   6.15 to 1

June 30, 2009

   6.15 to 1

September 30, 2009

   6.15 to 1

December 31, 2009

   6.10 to 1

March 31, 2010

   6.10 to 1

June 30, 2010

   6.10 to 1

September 30, 2010

   6.10 to 1

December 31, 2010

   6.10 to 1

March 31, 2011

   6.10 to 1

 

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Section 5.2 Minimum Interest Coverage Ratio

 

The Borrower shall maintain an Interest Coverage Ratio, as determined as of the
last day of each Fiscal Quarter set forth below, for the four Fiscal Quarters
ending on such day, of at least the minimum ratio set forth below opposite such
Fiscal Quarter:

 

FISCAL QUARTER

ENDING

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

  

MINIMUM

INTEREST

COVERAGE RATIO

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

June 30, 2005

   1.10 to 1

September 30, 2005

   1.10 to 1

December 31, 2005

   1.10 to 1

March 31, 2006

   1.10 to 1

June 30, 2006

   1.10 to 1

September 30, 2006

   1.10 to 1

December 31, 2006

   1.10 to 1

March 31, 2007

   1.10 to 1

June 30, 2007

   1.10 to 1

September 30, 2007

   1.10 to 1

December 31, 2007

   1.15 to 1

March 31, 2008

   1.15 to 1

June 30, 2008

   1.20 to 1

September 30, 2008

   1.20 to 1

December 31, 2008

   1.25 to 1

March 31, 2009

   1.25 to 1

June 30, 2009

   1.35 to 1

September 30, 2009

   1.35 to 1

December 31, 2009

   1.45 to 1

March 31, 2010

   1.45 to 1

June 30, 2010

   1.45 to 1

September 30, 2010

   1.45 to 1

December 31, 2010

   1.45 to 1

March 31, 2011

   1.45 to 1

 

Section 5.3 Capital Expenditures

 

The Borrower, together with its Subsidiaries, shall not make or incur, or permit
to be made or incurred, Capital Expenditures during each of the Fiscal Years set
forth below to be, in the aggregate, in excess of the maximum amount set forth
below for such Fiscal Year:

 

FISCAL YEAR ENDING

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

  

MAXIMUM CAPITAL

EXPENDITURES

(IN MILLIONS)

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

December 31, 2005

   $36.0

December 31, 2006

   $25.0

December 31, 2007

   $25.0

December 31, 2008

   $25.0

December 31, 2009

   $25.0

December 31, 2010

   $25.0

 

Notwithstanding the foregoing, (i) up to 100% of the amount of Capital
Expenditures permitted above for any Fiscal Year, if not expended in the Fiscal
Year for which it is permitted, may be carried over for expenditure in the next
succeeding Fiscal Year and (ii) Capital Expenditures made in any Fiscal Year
shall be deemed to be made, first, in respect of the amounts permitted for such
Fiscal Year as provided above and, second, in respect of amounts carried over
from the prior Fiscal Year pursuant to clause (i) above, (iii) the maximum
amount of Capital Expenditures for

 

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each Fiscal Year following the Fiscal Year ending December 31, 2005 may be
increased by an additional amount not exceeding $3,000,000 to the extent such
Capital Expenditures consist of expenditures by the Borrower and its
Subsidiaries for the construction, operation and maintenance of communications
networks to serve in residential buildings, multiple dwelling units, commercial
buildings or other developments, and (iv) Capital Expenditures shall not include
any items contained in clauses (a), (b) or (c) of the definition thereof.

 

ARTICLE VI

 

REPORTING COVENANTS

 

The Borrower agrees with the Lenders and the Administrative Agent to each of the
following, as long as any Obligation remains outstanding and, in each case,
unless the Requisite Lenders otherwise consent in writing:

 

Section 6.1 Financial Statements

 

The Borrower shall furnish to the Administrative Agent (who will make such
information available to each of the Lenders) each of the following:

 

(a) Monthly Reports. Not later than 30 days after the end of each fiscal month
in each Fiscal Year, financial information regarding the Borrower and its
Subsidiaries consisting of (i) Consolidated unaudited balance sheets as of the
close of such month and the related statements of income and cash flow for such
month and that portion of the current Fiscal Year ending as of the close of such
month, setting forth in comparative form the figures for the corresponding
period in the prior year and the figures contained in the Projections or, if
applicable, the latest business plan provided pursuant to clause (f) below for
the current Fiscal Year and (ii) calculation showing the aggregate amount of
EBITDA for such Fiscal Month and number of access line accounts for the
subsidiaries of the Borrowers that are independent local exchange carriers, in
each case certified by a Responsible Officer of the Borrower as fairly
presenting the Consolidated financial position of the Borrower and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flow for the periods indicated in accordance with GAAP (subject to the
absence of footnote disclosure and normal year-end audit adjustments).

 

(b) Quarterly Reports. Not later than 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year (or such earlier date on which the
Borrower is required to file a Form 10-Q under the Exchange Act), financial
information regarding the Borrower and its Subsidiaries consisting of
Consolidated unaudited balance sheets as of the close of such quarter and the
related statements of income and cash flow for such quarter and that portion of
the Fiscal Year ending as of the close of such quarter, setting forth in
comparative form the figures for the corresponding period in the prior year and
the figures contained in the Projections or, if applicable, the latest business
plan provided pursuant to clause (f) below for the current Fiscal Year, in each
case certified by a Responsible Officer of the Borrower as fairly presenting the
Consolidated financial position of the Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP (subject to the absence of footnote
disclosure and normal year-end audit adjustments).

 

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(c) Annual Reports. Not later than 90 days after the end of each Fiscal Year (or
such earlier date on which the Borrower is required to file a Form 10-K under
the Exchange Act), financial information regarding the Borrower and its
Subsidiaries consisting of Consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such year and related statements
of income and cash flows of the Borrower and its Subsidiaries for such Fiscal
Year, all prepared in conformity with GAAP and certified, in the case of such
Consolidated Financial Statements, without qualification as to the scope of the
audit or as to the Borrower being a going concern by the Borrower’s Accountants,
together with the report of such accounting firm stating that (i) such Financial
Statements fairly present the Consolidated financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for changes with which
the Borrower’s Accountants shall concur and that shall have been disclosed in
the notes to the Financial Statements) and (ii) the examination by the
Borrower’s Accountants in connection with such Consolidated Financial Statements
has been made in accordance with generally accepted auditing standards, and
accompanied by a certificate stating that in the course of the regular audit of
the business of the Borrower and its Subsidiaries such accounting firm has
obtained no knowledge that a Default or Event of Default in respect of the
financial covenants contained in Article V (Financial Covenants) has occurred
and is continuing, or, if in the opinion of such accounting firm, a Default or
Event of Default has occurred and is continuing in respect of such financial
covenants, a statement as to the nature thereof.

 

(d) Compliance Certificate. Together with each delivery of any Financial
Statement pursuant to clause (b) or (c) above, a certificate of a Responsible
Officer of the Borrower (each, a “Compliance Certificate”) (i) demonstrating
compliance with each of the financial covenants contained in Article (V)
(Financial Covenants) that is tested on a quarterly basis and (ii) stating that
no Default or Event of Default has occurred and is continuing or, if a Default
or an Event of Default has occurred and is continuing, stating the nature
thereof and the action that the Borrower proposes to take with respect thereto.

 

(e) Corporate Chart and Other Collateral Updates. Together with each delivery of
any Financial Statement pursuant to clause (b) or (c) above, (i) a certificate
of a Responsible Officer of the Borrower certifying that the Corporate Chart
attached thereto (or the last Corporate Chart delivered pursuant to this clause
(e) is true, correct, complete and current as of the date of such Financial
Statement and (ii) a certificate of a Responsible Officer of the Borrower in
form and substance satisfactory to the Administrative Agent that all
certificates, statements, updates and other documents (including updated
schedules) required to be delivered pursuant to the Pledge and Security
Agreement by any Loan Party in the preceding Fiscal Quarter have been delivered
thereunder (or such delivery requirement was otherwise duly waived or extended).
The reporting requirements set forth in this clause (e) are in addition to, and
are not intended to and shall not replace or otherwise modify, any obligation of
any Loan Party under any Loan Document (including other notice or reporting
requirements). Compliance with the reporting obligations in this clause (e)
shall only provide notice to the Administrative Agent and shall not, by itself,
modify any obligation of any Loan Party under any Loan Document, update any
Schedule to this Agreement or any schedule to any other Loan Document or cure,
or otherwise modify in any way, any failure to comply with any covenant, or any
breach of any representation or warranty, contained in any Loan Document or any
other Default or Event of Default.

 

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(f) Business Plan. Not later than 30 days after the end of each Fiscal Year, and
containing substantially the types of financial information contained in the
Projections, (i) the annual business plan of the Borrower and its Subsidiaries
for the next succeeding Fiscal Year approved by the board of directors of the
Borrower, (ii) forecasts prepared by management of the Borrower for each fiscal
month in the next succeeding Fiscal Year and (iii) forecasts prepared by
management of the Borrower for each of the succeeding Fiscal Years through the
Fiscal Year ending December 31, 2010, including, in each instance described in
clauses (ii) and (iii) above, (x) a projected Fiscal Quarter-end and Fiscal
Year-end Consolidated balance sheet and income statement and statement of cash
flows and (y) a statement of all of the material assumptions on which such
forecasts are based.

 

(g) Management Letters, Etc. Within five Business Days after receipt thereof by
any Loan Party, copies of each management letter, exception report or similar
letter or report received by such Loan Party from its independent certified
public accountants (including the Borrower’s Accountants).

 

(h) Intercompany Loan Balances. Together with each delivery of any Financial
Statement pursuant to clause (a) above, a summary of the outstanding balance of
all intercompany Indebtedness as of the last day of the fiscal month covered by
such Financial Statement, certified by a Responsible Officer of the Borrower.

 

Section 6.2 Default Notices

 

As soon as practicable, and in any event within five Business Days after a
Responsible Officer of any Loan Party has actual knowledge of the existence of
any Default, Event of Default or other event having had a Material Adverse
Effect or having any reasonable likelihood of causing or resulting in a Material
Adverse Change, the Borrower shall give the Administrative Agent notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given by telephone,
shall be promptly confirmed in writing on the next Business Day.

 

Section 6.3 Litigation and Regulatory Matters

 

The Borrower shall provide the Administrative Agent:

 

(a) promptly after the commencement thereof, written notice of the commencement
of all actions, suits and proceedings before any domestic or foreign
Governmental Authority or arbitrator affecting the Borrower or any Subsidiary of
the Borrower that (i) seeks injunctive or similar relief or (ii) in the
reasonable judgment of the Borrower or such Subsidiary expose the Borrower or
such Subsidiary to liability in an amount aggregating $1,000,000 or more or
that, if adversely determined, would have a Material Adverse Effect; and

 

(b) promptly, and in any event within 10 days, after filing, receipt or becoming
aware thereof, copies of any filings or communications sent to and notices or
other communications received by any Borrower or any of its Subsidiaries from
any Governmental Authority, including the Securities and Exchange Commission,
the FCC, any PUC, or any other state utility commission, relating to (i) any
material non-compliance by any Borrower or any of

 

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its Subsidiaries with any laws or regulations or with respect to any matter or
proceeding the effect of which, if adversely determined, would have a Material
Adverse Effect or (ii) any violation by any Borrower or any of its Subsidiaries
of any Communication License, CATV Franchise, PUC Authorization or similar
license, franchise or authorization.

 

Section 6.4 Asset Sales

 

Prior to any Asset Sale, the Borrower shall send the Administrative Agent a
notice (a) describing such Asset Sale or the nature and material terms and
conditions of such transaction and (b) stating the estimated Net Cash Proceeds
anticipated to be received by the Borrower or any of its Subsidiaries.

 

Section 6.5 Notices under First Lien Loan Documents

 

Promptly after the sending or filing thereof, the Borrower shall send the
Administrative Agent copies of all material notices, certificates or reports
delivered pursuant to, or in connection with, any First Lien Loan Document.

 

Section 6.6 SEC Filings; Press Releases

 

Promptly after the sending or filing thereof, the Borrower shall send the
Administrative Agent copies of (a) all reports that Borrower sends to its
security holders generally, (b) all reports and registration statements that
Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission or any national or foreign securities exchange or the National
Association of Securities Dealers, Inc., (c) all press releases and (d) all
other statements concerning material changes or developments in the business of
such Loan Party made available by any Loan Party to the public or any other
creditor.

 

Section 6.7 Labor Relations

 

Promptly after becoming aware of the same, the Borrower shall give the
Administrative Agent written notice of (a) any material labor dispute to which
the Borrower or any of its Subsidiaries is or may become a party, including any
strikes, lockouts or other disputes relating to any of such Person’s plants and
other facilities, and (b) any Worker Adjustment and Retraining Notification Act
or related liability incurred with respect to the closing of any plant or other
facility of any such Person.

 

Section 6.8 Tax Returns

 

Upon the request of any Lender, through the Administrative Agent, the Borrower
shall provide copies of all federal, state, local tax returns and reports filed
by the Borrower or any Subsidiary of the Borrower in respect of taxes measured
by income (excluding sales, use and like taxes).

 

Section 6.9 Insurance

 

As soon as is practicable and in any event within 90 days after the end of each
Fiscal Year, the Borrower shall furnish the Administrative Agent with (a) a
report in form and substance reasonably satisfactory to the Administrative Agent
and the Lenders outlining all material insurance coverage maintained as of the
date of such report by the Borrower or any

 

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Subsidiary of the Borrower and the duration of such coverage and (b) an
insurance broker’s statement that all premiums then due and payable with respect
to such coverage have been paid and confirming, with respect to any insurance
maintained by the Borrower or any Loan Party, that the Administrative Agent has
been named as loss payee or additional insured, as applicable.

 

Section 6.10 ERISA Matters

 

The Borrower shall furnish the Administrative Agent (with sufficient copies for
each of the Lenders) each of the following:

 

(a) promptly and in any event within 30 days after the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate knows or has reason to know that any
ERISA Event has occurred, written notice describing such event;

 

(b) promptly and in any event within 10 days after the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate knows or has reason to know that a
request for a minimum funding waiver under Section 412 of the Code has been
filed with respect to any Title IV Plan or Multiemployer Plan, a written
statement of a Responsible Officer of the Borrower describing such ERISA Event
or waiver request and the action, if any, the Borrower, its Subsidiaries and
ERISA Affiliates propose to take with respect thereto and a copy of any notice
filed with the PBGC or the IRS pertaining thereto; and

 

(c) simultaneously with the date that the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate files a notice of intent to terminate any Title
IV Plan, if such termination would require material additional contributions in
order to be considered a standard termination within the meaning of Section
4041(b) of ERISA, a copy of each notice.

 

Section 6.11 Environmental Matters

 

The Borrower shall provide the Administrative Agent promptly and in any event
within 10 days after the Borrower or any Subsidiary of the Borrower learning of
any of the following, written notice of each of the following:

 

(a) that any Loan Party is or may be liable to any Person as a result of a
Release or threatened Release that could reasonably be expected to subject such
Loan Party to Environmental Liabilities and Costs in excess of $1,000,000;

 

(b) the receipt by any Loan Party of notification that any Real Property or
personal property of such Loan Party is or is reasonably likely to be subject to
any Environmental Lien;

 

(c) the receipt by any Loan Party of any notice of violation of or potential
liability under, or knowledge by such Loan Party that there exists a condition
that could reasonably be expected to result in a violation of or liability
under, any Environmental Law, except for violations and liabilities the
consequence of which, in the aggregate, would not be reasonably likely to
subject the Loan Parties collectively to Environmental Liabilities and Costs in
excess of $1,000,000;

 

(d) the commencement of any judicial or administrative proceeding or
investigation alleging a violation of or liability under any Environmental Law,
that, in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs in excess of $1,000,000;

 

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(e) any proposed acquisition of stock, assets or real estate, any proposed
leasing of property or any other action by any Loan Party or any of its
Subsidiaries other than those the consequences of which, in the aggregate, have
reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs in excess of $1,000,000;

 

(f) any proposed action by any Loan Party or any of its Subsidiaries or any
proposed change in Environmental Laws that, in the aggregate, have a reasonable
likelihood of requiring the Loan Parties to obtain additional environmental,
health or safety Permits or make additional capital improvements to obtain
compliance with Environmental Laws that, in the aggregate, would have cost
$1,000,000 or more or that shall subject the Loan Parties to additional
Environmental Liabilities and Costs in excess of $1,000,000; and

 

(g) upon written request by any Lender through the Administrative Agent, a
report providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
delivered pursuant to this Agreement.

 

Section 6.12 Customer Contracts

 

Promptly after any Loan Party becoming aware of the same, the Borrower shall
give the Administrative Agent written notice of any cancellation, termination or
loss of any material Contractual Obligation or other customer arrangement.

 

Section 6.13 New Markets

 

In advance of (a) the entrance into any new market by the Borrower or any of its
Subsidiaries, (b) any material change of prospective markets by the Borrower or
any of its Subsidiaries or (c) any deferral of any market, the Borrower shall
deliver to the Administrative Agent a revised business plan, in form and
substance reasonably satisfactory to the Administrative Agent, to include such
new market, change in prospective market or deferral of any market, as
applicable.

 

Section 6.14 Other Information

 

The Borrower shall provide the Administrative Agent or any Lender with such
other information respecting the business, properties, condition, financial or
otherwise, or operations of the Borrower or any Subsidiary of the Borrower as
the Administrative Agent or such Lender through the Administrative Agent may
from time to time reasonably request.

 

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ARTICLE VII

 

AFFIRMATIVE COVENANTS

 

The Borrower agrees with the Lenders and the Administrative Agent to each of the
following, as long as any Obligation remains outstanding and, in each case,
unless the Requisite Lenders otherwise consent in writing:

 

Section 7.1 Preservation of Corporate Existence, Etc.

 

The Borrower shall, and shall cause each Subsidiary of the Borrower to, preserve
and maintain its legal existence, rights (charter and statutory) and franchises,
except as permitted by Sections 8.4 (Sale of Assets) and 8.7 (Restriction on
Fundamental Changes; Permitted Acquisitions) and 8.11 (Modification of
Constituent Documents).

 

Section 7.2 Compliance with Laws, Etc.

 

The Borrower shall, and shall cause each Subsidiary of the Borrower to, comply
with all applicable Requirements of Law, Contractual Obligations and Permits,
except where the failure so to comply would not, in the aggregate, have a
Material Adverse Effect.

 

Section 7.3 Conduct of Business

 

The Borrower shall and the Borrower shall cause each Subsidiary of the Borrower
to, use its best efforts, in the ordinary course and consistent with past
practice, to preserve its business and the goodwill and business of the
customers, advertisers, suppliers and others having business relations with the
Borrower or any of its Subsidiaries, except in each case where the failure to
comply with this covenant would not, in the aggregate, have a Material Adverse
Effect.

 

Section 7.4 Payment of Taxes, Etc.

 

The Borrower shall, and shall cause each Subsidiary of the Borrower to, pay and
discharge before the same shall become delinquent, all lawful governmental
claims, taxes, assessments, charges and levies, except where contested in good
faith, by proper proceedings and adequate reserves therefor have been
established on the books of the Borrower or the appropriate Subsidiary in
conformity with GAAP.

 

Section 7.5 Maintenance of Insurance

 

The Borrower shall (a) maintain for itself, and the Borrower shall cause to be
maintained for each Subsidiary of the Borrower, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates, and, in any event, all insurance required by any
Collateral Documents and (b) cause all such insurance relating to any Loan Party
to name the Administrative Agent on behalf of the Secured Parties as additional
insured or loss payee (subject to the terms of the Intercreditor Agreement), as
appropriate, and to provide that no cancellation, material addition in amount or
material change in coverage shall be effective until after 30 days’ written
notice thereof to the Administrative Agent.

 

Section 7.6 Access

 

The Borrower shall, and shall cause each Subsidiary of the Borrower to, from
time to time permit the Administrative Agent and the Lenders, or any agents or
representatives thereof, within two Business Days after written notification of
the same (except that during the continuance of an Event of Default, no such
notice shall be required) to, (a) examine and make copies of and abstracts from
the records and books of account of the Borrower and each

 

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Subsidiary of the Borrower, (b) visit the properties of the Borrower and each
Subsidiary of the Borrower, (c) discuss the affairs, finances and accounts of
the Borrower and each Subsidiary of the Borrower with any of their respective
officers or directors and (d) after prior written notice to the Borrower,
communicate directly with any of its certified public accountants (including the
Borrower’s Accountants); provided, however, that unless an Event of Default has
occurred and is continuing, the Borrower shall only be obligated to pay the
costs and expenses of the Administrative Agent incurred in connection with this
Section 7.6. The Borrower shall authorize its certified public accountants
(including the Borrower’s Accountants), and shall cause the certified public
accountants of any Subsidiary of the Borrower, if any, to disclose to the
Administrative Agent or any Lender any and all financial statements and other
information of any kind, as the Administrative Agent or any Lender reasonably
requests and that such accountants may have with respect to the business,
financial condition, results of operations or other affairs of the Borrower or
any Subsidiary of the Borrower.

 

Section 7.7 Keeping of Books

 

The Borrower shall, and shall cause each Subsidiary of the Borrower to keep,
proper books of record and account, in which full and correct entries shall be
made in conformity with GAAP of all financial transactions and the assets and
business of the Borrower and each such Subsidiary.

 

Section 7.8 Maintenance of Properties, Etc.

 

The Borrower shall, and shall cause each Subsidiary of the Borrower to, maintain
and preserve (a) in good working order and condition all of its properties
necessary in the conduct of its business, (b) all rights, permits, licenses,
approvals and privileges (including all Permits) used or useful or necessary in
the conduct of its business and (c) all registered patents, trademarks, trade
names, copyrights and service marks with respect to its business, except where
failure to so maintain and preserve the items set forth in clauses (a), (b) and
(c) above would not, in the aggregate, have a Material Adverse Effect.

 

Section 7.9 Application of Proceeds

 

The Borrower (and, to the extent distributed to them by the Borrower, each Loan
Party) shall use the entire amount of the proceeds of the Term Loans as provided
in Section 4.13 (Use of Proceeds).

 

Section 7.10 Environmental

 

The Borrower shall, and shall cause each Subsidiary of the Borrower to, comply
in all material respects with Environmental Laws and, without limiting the
foregoing, the Borrower shall, at its sole cost and expense, upon receipt of any
notification or otherwise obtaining knowledge of any Release or other event that
has any reasonable likelihood of the Borrower or any Subsidiary of the Borrower
incurring Environmental Liabilities and Costs in excess of $1,000,000 in the
aggregate, (a) conduct, or pay for consultants to conduct, tests or assessments
of environmental conditions at such operations or properties, including the
investigation and testing of subsurface conditions and (b) take such Remedial
Action and undertake such investigation or other action as required by
Environmental Laws or as any Governmental Authority requires or as is
appropriate and consistent with good business practice to address the Release or
event and otherwise ensure compliance with Environmental Laws.

 

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Section 7.11 Additional Collateral and Guaranties

 

To the extent not delivered to the Administrative Agent on or before the Closing
Date (including in respect of after-acquired property and Persons that become
Subsidiaries of any Loan Party after the Closing Date) and subject to Section
7.12 (Regulatory Consents for Guaranties and Security), the Borrower agrees
promptly to do, or cause each Subsidiary of the Borrower to do, each of the
following, unless otherwise agreed by the Administrative Agent and subject to
the terms of the Intercreditor Agreement:

 

(a) deliver to the Administrative Agent such duly executed supplements and
amendments to the Guaranty (or, in the case of any Subsidiary of any Loan Party
that is not a Domestic Subsidiary or that holds shares in any Person that is not
a Domestic Subsidiary, foreign guarantees and related documents), in each case
in form and substance reasonably satisfactory to the Administrative Agent and as
the Administrative Agent deems necessary or advisable in order to ensure that
each Subsidiary of each Loan Party guaranties, as primary obligor and not as
surety, the full and punctual payment when due of the Obligations or any part
thereof; provided, however, in no event shall any Excluded Foreign Subsidiary be
required to guaranty the payment of the Obligations, unless (x) the Borrower and
the Administrative Agent otherwise agree or (y) such Excluded Foreign Subsidiary
has entered into Guaranty Obligations in respect of other Indebtedness of the
Borrower having substantially similar tax consequences;

 

(b) deliver to the Collateral Agent such duly-executed joinder and amendments to
the Pledge and Security Agreement and, if applicable, other Collateral Documents
(or, in the case of any such Subsidiary of any Loan Party that is not a Domestic
Subsidiary or that holds shares in any Person that is not a Domestic Subsidiary,
foreign charges, pledges, security agreements and other Collateral Documents),
in each case in form and substance reasonably satisfactory to the Administrative
Agent and as the Administrative Agent deems necessary or advisable in order to
(i) effectively grant to the Collateral Agent, for the benefit of the Secured
Parties, a valid, perfected and enforceable security interest in the Stock, and
Stock Equivalents and other debt Securities owned by any Loan Party and (ii)
effectively grant to the Collateral Agent, for the benefit of the Secured
Parties, a valid, perfected and enforceable first-priority security interest in
all property interests and other assets of any Loan Party; provided, however, in
no event shall (x) any Loan Party or any of its Subsidiaries, individually or
collectively, be required to pledge in excess of 66% of the outstanding Voting
Stock of any Excluded Foreign Subsidiary or (y) any assets of any Excluded
Foreign Subsidiary be required to be pledged, unless the Borrower and the
Administrative Agent otherwise agree;

 

(c) subject to the terms of the Intercreditor Agreement, deliver to the
Collateral Agent all certificates, instruments and other documents representing
all Pledged Stock and all other Stock, Stock Equivalents and other debt
Securities being pledged pursuant to the joinders, amendments and foreign
agreements executed pursuant to clause (b) above, together with (i) in the case
of certificated Pledged Stock and other certificated Stock and Stock
Equivalents, undated stock powers endorsed in blank and (ii) in the case of
other certificated debt Securities, endorsed in blank, in each case executed and
delivered by a Responsible Officer of such Loan Party or such Subsidiary
thereof, as the case may be;

 

(d) to take such other actions necessary or advisable to ensure the validity or
continuing validity of the guaranties required to be given pursuant to clause
(a) above or to create, maintain or perfect the security interest required to be
granted pursuant to clause (b) above, including the filing of UCC financing
statements in such jurisdictions as may be required by the Collateral Documents
or by law or as may be reasonably requested by the Administrative Agent or the
Collateral Agent; and

 

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(e) deliver to the Administrative Agent, on the Business Day following the
Closing Date, the legal opinion relating to the matters described above of local
counsel in the State of Alabama, and, if requested by the Administrative Agent,
the legal opinions relating to the matters described above of other local
counsel, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.

 

Section 7.12 Regulatory Consents for Guaranties and Security

 

(a) At the request of the Administrative Agent, the Borrower shall, or cause its
applicable Subsidiary to, use its respective best efforts to obtain each Permit
of the applicable Governmental Authority or third party which is required for
the Collateral Agent to hold a first priority perfected security interest in the
CATV Franchises set forth in Schedule 7.12 (Regulatory Consents) requiring prior
approval of the applicable Government Authority.

 

(b) The Borrower shall, or cause its applicable Subsidiary to, use its
respective best efforts to obtain each Permit of the applicable Governmental
Authority or third party which is required for (i) the Collateral Agent to hold
a first-priority perfected security interest in the rights under the PUC
Authorizations set forth in Schedule 7.12 (Regulatory Consents) requiring prior
approval of the applicable Government Authority or third party and (ii) Knology
Georgia to fully guaranty the Obligations and to grant a first-priority
perfected security interest in favor of the Collateral Agent over all or
substantially all of its assets as security for such Guaranty.

 

(c) Promptly following the acquisition or assumption by or grant to any Loan
Party of any Communications License, CATV Franchise or PUC Authorization, the
Borrower shall, or cause its applicable Subsidiary to, use its respective best
efforts to obtain each Permit of the applicable Governmental Authority or third
party which is required for the Collateral Agent to hold a perfected security
interest in such franchise, authorization or license to the extent permitted by
applicable law.

 

(d) For so long as any Permit set forth in Schedule 7.12 (Regulatory Consents)
or required under clauses (a), (b) or (c) above has not been obtained, the
Borrower shall deliver (i) a written report to the Administrative Agent on the
first Business Day of every calendar month detailing the respective efforts made
by the Borrower and its Subsidiaries to obtain each such Permit from the
applicable Governmental Authority during the preceding calendar month and (ii)
copies of any Permits obtained during such preceding calendar month.

 

(e) Immediately upon obtaining each applicable Permit referred to in clauses (a)
through (c) above, the Borrower shall, or cause its applicable Subsidiary to,
execute and/or deliver such documents and take such other action as may be
required by the Administrative Agent to ensure that the Collateral Agent holds a
perfected security interest in the assets which are subject to such Permit and,
as applicable, to ensure that Knology Georgia has fully guaranteed the
Obligations and granted a perfected security interest, in favor of the
Collateral Agent over all or substantially all of its assets as security for
such Guaranty.

 

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Section 7.13 Control Accounts, Approved Deposit Accounts

 

(a) The Borrower shall, and shall cause each of their respective Subsidiaries,
with the exception of any Excluded Foreign Subsidiary, to (i) deposit in an
Approved Deposit Account all cash they receive, (ii) not establish or maintain
any Securities Account that is not a Control Account (other than any Securities
Accounts maintained as a surety for insurance obligations as long as the
aggregate balance in all such Securities Accounts does not at any time exceed
$2,750,000) and (iii) not establish or maintain any Deposit Account other than
with a Deposit Account Bank; provided, however, that (i) the Borrower and each
of its Subsidiaries shall be permitted to maintain payroll, withholding tax and
other fiduciary accounts as long as the aggregate balance in all such accounts),
does not at any time exceed $2,500,000 and (ii) the provisions of this Section
7.13 shall not apply to deposits or accounts subject to a Deposit Account
Control Agreement subject to Section 7.17 (Post-Closing Obligations).

 

(b) The Administrative Agent may establish one or more Cash Collateral Accounts
with such depositaries and Securities Intermediaries as it in its sole
discretion shall determine; provided, however, that no Cash Collateral Account
shall be established with respect to the assets of any Excluded Foreign
Subsidiary. The Borrower agrees that each such Cash Collateral Account shall
meet the requirements set forth in the definition of “Cash Collateral Account”.
Without limiting the foregoing, funds on deposit in any Cash Collateral Account
may be invested (but the Administrative Agent shall be under no obligation to
make any such investment) in Cash Equivalents at the direction of the
Administrative Agent and, except during the continuance of an Event of Default,
the Administrative Agent agrees with the Borrower to issue Entitlement Orders
for such investments in Cash Equivalents as requested by the Borrower; provided,
however, that the Administrative Agent shall not have any responsibility for, or
bear any risk of loss of, any such investment or income thereon. Neither the
Borrower nor any Subsidiary of the Borrower or any other Loan Party or Person
claiming on behalf of or through the Borrower, any Subsidiary of the Borrower or
any other Loan Party shall have any right to demand payment of any funds held in
any Cash Collateral Account at any time prior to the payment in full of all then
outstanding and payable monetary Obligations. The Administrative Agent shall
apply all funds on deposit in a Cash Collateral Account as provided in Section
2.6 (Mandatory Prepayments).

 

Section 7.14 Real Property

 

(a) The Borrower shall, and shall cause each of its Subsidiaries to, (i) comply
in all material respects with all of their respective obligations under all of
their respective Leases now or hereafter held respectively by them, including
the Leases set forth on Schedule 4.19 (Real Property), the failure to comply
with which would not have a Material Adverse Effect, (ii) not modify, amend,
cancel, extend or otherwise change in any materially adverse manner any term,
covenant or condition of any such Lease if such change would have a Material
Adverse Effect, (iii) not assign or sublet any other Lease if such assignment or
sublet would have a Material Adverse Effect and (iv) provide the Administrative
Agent with a copy of each notice of default under any Lease received by the
Borrower or any Subsidiary of the Borrower immediately upon receipt thereof and
deliver to the Administrative Agent a copy of each notice of default sent by the
Borrower or any Subsidiary of the Borrower under any Lease simultaneously with
its delivery of such notice under such Lease.

 

(b) At least 15 Business Days prior to (i) entering into any Lease (other than a
renewal of an existing Lease) for the principal place of business and chief
executive office of

 

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the Borrower or any other Guarantor or any other Lease (including any renewal)
in which the annual rental payments are anticipated to equal or exceed
$1,000,000 or (ii) acquiring any material owned Real Property, the Borrower
shall, and shall cause such Guarantor to, provide the Administrative Agent
written notice thereof.

 

(c) To the extent not previously delivered to the Administrative Agent, upon
written request of the Administrative Agent, the Borrower shall, and shall cause
each Guarantor to, execute and deliver to the Administrative Agent, for the
benefit of the Secured Parties, promptly and in any event not later than 45 days
(or such later period as the Administrative Agent may approve in its sole
discretion) after receipt of such notice (or, if such notice is given by the
Administrative Agent prior to the acquisition of such Real Property, immediately
upon such acquisition), a Mortgage on any owned Real Property of the Borrower or
such Guarantor, together with (i) if requested by the Administrative Agent and
such Real Property is located in the United States, all Mortgage Supporting
Documents relating thereto or (ii) documents similar to Mortgage Supporting
Documents deemed by the Administrative Agent to be appropriate in the applicable
jurisdiction to obtain the equivalent in such jurisdiction of a mortgage on such
Real Property.

 

(d) To the extent not previously delivered to the Administrative Agent, the
Borrower shall, and shall cause each Guarantor to (except as may be agreed to by
the Administrative Agent), execute and deliver to the Administrative Agent, for
the benefit of the Secured Parties, promptly and in any event not later than 60
days, all Mortgage Supporting Documents relating to each of the owned Real
Properties of the Loan Parties identified on Schedule 7.14 (Mortgage Documents)
and, to the extent requested, an environmental site assessment report prepared
by a consultant acceptable to the Administrative Agent and in a form and scope
satisfactory to the Administrative Agent.

 

Section 7.15 Interest Rate Contracts

 

The Borrower shall, within 30 days after the Closing Date, enter into an
Interest Rate Contract or Contracts, on terms and with counterparties
satisfactory to the Administrative Agent, to the extent necessary to ensure that
no less than 50% of the Borrower’s Consolidated Indebtedness (other than
“Revolving Credit Outstandings” as defined in the First Lien Credit Agreement)
effectively bears interest at a fixed rate for a term of at least three
consecutive years following the date thereof.

 

Section 7.16 Ratings

 

The Borrower shall at all times maintain ratings with respect to the Term Loan
Facility by each of S&P and Moody’s.

 

Section 7.17 Post-Closing Obligations

 

(a) Within 5 Business Days of the Closing Date (or such later date as the
Administrative Agent may agree), the Borrower shall cause the (i) Broadband
Account to become subject to a Deposit Account Control Agreement entered into by
Knology Broadband, Inc. or transfer all amounts on deposit in such account to an
account of the Borrower or a Guarantor which is subject to a Deposit Account
Control Agreement entered into by the Borrower or such Guarantor and (ii)
transfer, to the extent necessary to comply with the requirements of Section
7.13 (Control Accounts; Approved Deposit Accounts), amounts on deposit in the
Interstate Account to an account of the Borrower or a Guarantor that is subject
to a Deposit Account Control Agreement entered into by the Borrower or such
Guarantor.

 

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(b) Within 45 days of the Closing Date (or such later date as the Administrative
Agent may agree), the Borrower shall deliver to the Administrative Agent (i) a
landlord waiver with respect to the leased property at 1701 Boxwood Place,
Columbus, Georgia in form satisfactory to the Administrative Agent and (ii)
evidence of the satisfaction-in-full of the Existing Notes and the related
termination of the Existing Indenture in form satisfactory to the Administrative
Agent.

 

ARTICLE VIII

 

NEGATIVE COVENANTS

 

The Borrower agrees with the Lenders and the Administrative Agent to each of the
following, as long as any Obligation or any Commitment remains outstanding and,
in each case, unless the Requisite Lenders otherwise consent in writing:

 

Section 8.1 Indebtedness

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness except for the
following:

 

(a) the Secured Obligations (other than in respect of Hedging Contracts not
permitted to be incurred pursuant to clause (h) below) and Guaranty Obligations
with respect thereto;

 

(b) (i) Indebtedness existing on the date of this Agreement and disclosed on
Schedule 8.1 (Existing Indebtedness), including Indebtedness in respect of the
First Lien Facilities; and (ii) Indebtedness constituting “First Lien
Obligations” as defined in, and permitted under, the Intercreditor Agreement;

 

(c) Guaranty Obligations incurred by the Borrower or any Guarantor in respect of
Indebtedness of the Borrower or any Guarantor that is otherwise permitted by
this Section 8.1 (other than clause (a) above);

 

(d) Capital Lease Obligations and purchase money Indebtedness (i) set forth in
Schedule 8.1(d) (Capital Leases) or (ii) incurred after the Closing Date by the
Borrower or a Subsidiary of the Borrower to finance the acquisition of fixed
assets; provided, however, that the Capital Expenditure related thereto is
otherwise permitted by Section 5.4 (Capital Expenditures) and that the aggregate
outstanding principal amount of all such Capital Lease Obligations and purchase
money Indebtedness shall not exceed $10,000,000 at any time during the term of
this Agreement;

 

(e) Renewals, extensions, refinancings and refundings of Indebtedness permitted
by clauses (b) and (d) above, clause (k) below or this clause (e); provided,
however, that any such renewal, extension, refinancing or refunding (i) is in an
aggregate principal amount not greater than the principal amount of (and accrued
but unpaid interest on or premium, if any, under), and is on terms no less
favorable to the Borrower or any Subsidiary of the Borrower

 

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obligated thereunder, including as to weighted average maturity and final
maturity, than the Indebtedness being renewed, extended, refinanced or refunded
and (ii), in the case of the First Lien Facilities, complies with the terms of
the Intercreditor Agreement;

 

(f) Indebtedness arising from intercompany loans (i) from the Borrower to any
Guarantor, (ii) from any Guarantor to the Borrower or any other Guarantor or
(iii) from the Borrower or any Guarantor to any Subsidiary of the Borrower that
is not a Guarantor; provided, however, that in each case the Investment in such
intercompany loan is permitted under Section 8.3 (Investments);

 

(g) Indebtedness arising under any performance or surety bond entered into in
the ordinary course of business;

 

(h) Obligations under Interest Rate Contracts mandated by Section 7.15 (Interest
Rate Contract);

 

(i) unsecured Indebtedness not otherwise permitted under this Section 8.1;
provided, however, that the aggregate outstanding principal amount of all such
unsecured Indebtedness shall not exceed $10,000,000 at any time;

 

(j) Indebtedness under unsecured promissory notes issued by the Borrower as
consideration in connection with any Permitted Acquisition; provided, however,
that (x)(i) the obligations under such notes are subordinated to the Obligations
on terms reasonably satisfactory to the Administrative Agent, (ii) no principal
in respect of such notes is, or may be, payable before the first anniversary of
the Maturity Date, and (iii) no interest in respect of such notes is required to
be paid in cash prior to the Maturity Date or (y) the aggregate outstanding
principal amount of all such Indebtedness incurred, shall not exceed $4,000,000
in any Fiscal Year and $10,000,000 at any time during the term of this
Agreement;

 

(k) Indebtedness assumed pursuant to a Permitted Acquisition; provided that (i)
such Indebtedness was not created in contemplation of such Permitted Acquisition
and (ii) the aggregate outstanding principal amount of all such Indebtedness
shall not exceed $7,500,000 at any time.

 

(l) Permitted MDU Transactions and Permitted CIU Transactions, in each case, to
the extent accounted for as Capital Lease Obligations.

 

Section 8.2 Liens, Etc.

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
create or suffer to exist, any Lien upon or with respect to any of its
properties or assets, whether now owned or hereafter acquired, or assign, or
permit any of its Subsidiaries to assign, any right to receive income, except
for the following:

 

(a) Liens created pursuant to the Loan Documents;

 

(b) Liens existing on the date of this Agreement and disclosed on Schedule 8.2
(Existing Liens), including Liens securing the First Lien Facilities;

 

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(c) Customary Permitted Liens on the assets of the Borrower and the Borrower’s
Subsidiaries;

 

(d) purchase money Liens granted by the Borrower or any of its Subsidiaries
(including the interest of a lessor under a Capital Lease and purchase money
Liens to which any property is subject at the time, on or after the date hereof,
of the Borrower’s or such Subsidiary’s acquisition thereof) securing
Indebtedness permitted under Section 8.1(d) (Indebtedness) and limited in each
case to the property purchased with the proceeds of such purchase money
Indebtedness or subject to such Capital Lease;

 

(e) any Lien securing the renewal, extension, refinancing or refunding of any
Indebtedness secured by any Lien permitted by clauses (b) or (d) above, clause
(h) below or this clause (e) without any change in the assets subject to such
Lien and to the extent such renewal, extension, refinancing or refunding is
permitted by Section 8.1(e) (Indebtedness);

 

(f) Liens in favor of lessors securing operating leases to the extent such
operating leases are permitted hereunder and, to the extent such transactions
create a Lien, sale and leaseback transactions permitted by Section 8.4(f)
(Asset Sales);

 

(g) Liens not otherwise permitted by the foregoing clauses of this Section 8.2
securing obligations or other liabilities of any Loan Party; provided, however,
that the aggregate outstanding amount of all such obligations and liabilities
shall not exceed $1,000,000 at any time; and

 

(h) Liens securing Indebtedness permitted under Section 8.1(k) (Indebtedness);
provided that (i) such Liens were not created in contemplation of such Permitted
Acquisitions and (ii) such Liens are purchase money Liens granted by the
Proposed Acquisition Target or its Subsidiaries (including the interest of a
lessor under a Capital Lease and purchase money Liens on any property of
Proposed Acquisition Target or its Subsidiaries) and limited in each case to the
property purchased with the proceeds of such purchase money Indebtedness or
subject to such Capital Lease.

 

Section 8.3 Investments

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to
make or maintain, directly or indirectly, any Investment except for the
following:

 

(a) Investments existing on the date of this Agreement and disclosed on Schedule
8.3 (Existing Investments);

 

(b) Investments in cash and Cash Equivalents held in a Deposit Account or a
Control Account or otherwise in compliance with Section 7.13 (Control Accounts,
Approved Deposit Accounts) or outside such accounts to the extent permitted by
Section 7.13(a) (Control Accounts, Approved Deposit Accounts).

 

(c) Investments in payment intangibles, chattel paper (each as defined in the
UCC) and Accounts, notes receivable and similar items arising or acquired in the
ordinary course of business consistent with the past practice of the Borrower
and its Subsidiaries;

 

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(d) Investments received in settlement of amounts due to the Borrower or any
Subsidiary of the Borrower effected in the ordinary course of business;

 

(e) Investments by (i) the Borrower or any Guarantor in the Borrower or any
other Guarantor (other than Knology Georgia until such time as it has fully
guaranteed the Obligations pursuant to the Guaranty and granted a Lien in favor
of the Collateral Agent over substantially all of its assets as security for
such Guaranty and has obtained all necessary Permits in connection therewith) or
(ii) any Subsidiary of the Borrower that is not a Guarantor in the Borrower or
any other Subsidiary of the Borrower.

 

(f) Investments by the Borrower or any Guarantor in a Permitted Acquisition;

 

(g) loans or advances to employees of the Borrower or any Subsidiaries of the
Borrower in the ordinary course of business as presently conducted other than
any loans or advances that would be in violation of Section 402 of the
Sarbanes-Oxley Act; provided, however, that the aggregate principal amount of
all loans and advances permitted pursuant to this clause (g) shall not exceed
$1,000,000 at any time;

 

(h) Guaranty Obligations permitted by Section 8.1 (Indebtedness);

 

(i) Investments in promissory notes received in consideration for Asset Sales
permitted by Section 8.4(f); and

 

(j) Investments not otherwise permitted hereby; provided, however, that the
aggregate outstanding amount of all such Investments shall not, at any time,
exceed $2,000,000.

 

Section 8.4 Sale of Assets

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
sell, convey, transfer, lease or otherwise dispose of, any of their respective
assets or any interest therein (including the sale or factoring at maturity or
collection of any accounts) to any Person or permit or suffer any other Person
to acquire any interest in any of their respective assets, nor shall the
Borrower permit any of its Subsidiaries to issue or sell any shares of their
Stock or any Stock Equivalents (any such disposition being an “Asset Sale”),
except for the following:

 

(a) the sale or disposition of Cash Equivalents, Inventory, customer premise
equipment and fiber optic cable, in each case, in the ordinary course of
business;

 

(b) the sale or disposition of Equipment that has become obsolete or is replaced
in the ordinary course of business; provided, however, that the aggregate Fair
Market Value of all such equipment disposed of in any Fiscal Year shall not
exceed $1,000,000;

 

(c) a true lease or sublease of Real Property not constituting Indebtedness and
not constituting a sale and leaseback transaction;

 

(d) assignments and licenses of intellectual property of the Borrower and its
Subsidiaries in the ordinary course of business;

 

(e) any Asset Sale to the Borrower or any Guarantor;

 

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(f) as long as no Default or Event of Default is continuing or would result
therefrom, any other Asset Sale(including in the form of a sale and leaseback
transaction) for Fair Market Value, payable at least 75% in cash upon such sale;
provided, however, that with respect to any such Asset Sale pursuant to this
clause (f), (i) the aggregate consideration received (together with the Fair
Market Value of any Asset Sales permitted by clause (h) below) (x) during any
Fiscal Year for all such Asset Sales shall not exceed $15,000,000 (provided that
up to 100% of the amount in this clause (x), if not received in the Fiscal Year
for which it is permitted, may be carried over for receipt in the next
succeeding Fiscal Year; provided, further, that consideration received in any
Fiscal Year shall be deemed received, first, in respect of the amounts permitted
for such Fiscal Year and, second, in respect of amounts carried over from the
prior Fiscal Year) or (y) during the term of this Agreement shall not exceed
$30,000,000 for such Asset Sales and (ii) an amount equal to all Net Cash
Proceeds of such Asset Sale are applied to the payment of the Obligations as set
forth in, and to the extent required by, Section 2.6 (Mandatory Prepayments);

 

(g) the Cerritos Sale; and

 

(h) any Asset Sale in the form of a divestiture of assets acquired after the
Closing Date either in connection with a Permitted Acquisition or an Investment
permitted by clauses (f) or (i) of Section 8.3 (Investments); provided, however,
an amount equal to all Net Cash Proceeds of such Asset Sale are applied to the
payment of the Obligations as set forth in, and to the extent required by,
Section 2.6 (Mandatory Prepayments).

 

Section 8.5 Restricted Payments

 

The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Payment except for the following:

 

(a) Restricted Payments by any Subsidiary of the Borrower to the Borrower or any
Guarantor;

 

(b) dividends and distributions declared and paid on the common Stock of the
Borrower and payable only in common Stock of the Borrower;

 

(c) dividends and distributions declared and paid on New Preferred Stock of the
Borrower and payable only in additional preferred stock with the same terms as
such New Preferred Stock of the Borrower;

 

(d) cash dividends with respect to the New Preferred Stock and other Stock of
the Borrower with terms substantially similar to the New Preferred Stock made in
any Fiscal Year in an amount not to exceed the sum of the amount of (i) Excess
Cash Flow of the Borrower for the preceding Fiscal Year not otherwise used to
prepay Term Loans pursuant to clause (b) of Section 2.6 (Mandatory Prepayments)
plus (ii) Net Cash Proceeds from Equity Issuances received after the Closing
Date not otherwise used for Permitted Acquisitions or to prepay Term Loans under
clause (a) of Section 2.6 (Mandatory Prepayments); provided, that (x) such cash
dividends are funded from Excess Cash Flow and Net Cash Proceeds from Equity
Issuances, (y) prior to the date of any such dividend, all PIK Amounts and
interest accrued and payable-in-kind shall have been paid in full in cash- and
(z) before and after giving effect to the payment of such dividends, the
Leverage Ratio does not exceed 5.5 to 1.0;

 

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(e) the redemption of the New Preferred Stock or other preferred stock of the
Borrower (with terms substantially similar to the New Preferred Stock) with the
Net Cash Proceeds of any Equity Issuance not otherwise used to prepay Term Loans
under Section 2.6 (Mandatory Prepayments) or clause (d) above; provided, that,
prior to the date of any such redemption, all PIK Amounts and interest accrued
and payable-in-kind shall have been paid in full in cash; and

 

(f) cash dividends in lieu of fractional shares of (i) common Stock of the
Borrower payable in connection with the conversion of New Preferred Stock, or
other preferred stock with terms substantially similar to the New Preferred
Stock, into common Stock of the Borrower, or (ii) New Preferred Stock, or other
preferred stock with terms substantially similar to the New Preferred Stock,
payable in connection with scheduled dividend payments not to exceed $200,000 in
the aggregate;

 

provided, however, that such Restricted Payments shall not be permitted if an
Event of Default or Default shall have occurred and be continuing at the date of
declaration or payment thereof or would result therefrom.

 

Section 8.6 Prepayment and Cancellation of Indebtedness

 

(a) The Borrower shall not, nor shall it permit any Subsidiary of the Borrower
to, cancel any claim or Indebtedness owed to any of them except (i) in the
ordinary course of business consistent with past practice and (ii) in respect of
intercompany Indebtedness among the Borrower and the Guarantors that are
Domestic Subsidiaries.

 

(b) The Borrower shall not, nor shall the Borrower permit any of its
Subsidiaries to, prepay, redeem, purchase, defease or otherwise satisfy prior to
the scheduled maturity thereof in any manner, or make any payment in violation
of any subordination terms of any Indebtedness or in violation of the
Intercreditor Agreement; provided, however, that the Borrower and each
Subsidiary of the Borrower may (i) prepay the Obligations in accordance with the
terms of this Agreement, (ii) make regularly scheduled or otherwise required
repayments or redemptions of Indebtedness, (iii) prepay in full the Existing
Indebtedness with the proceeds of the initial Borrowings hereunder or proceeds
from the First Lien Agreement, (iv) make any payments or redemption with respect
of the Second Lien Term Loan expressly permitted by this Agreement, (v) prepay
Indebtedness payable to the Borrower by any of its Subsidiaries, (vi) renew,
extend, refinance and refund Indebtedness, as long as such renewal, extension,
refinancing or refunding is permitted under Section 8.1(e) (Indebtedness), and
(vii) prepay Capital Lease Obligations and purchase money Indebtedness permitted
under Section 8.1(d) (Indebtedness).

 

Section 8.7 Restriction on Fundamental Changes; Permitted Acquisitions

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
(a) except in connection with a Permitted Acquisition, (i) merge or consolidate
with any Person (other than with other Subsidiaries of the Borrower or the
Borrower so long as the Borrower is the surviving Person following such merger
or consolidation), (ii) acquire all or substantially all of the Stock or Stock
Equivalents of any Person or (iii) acquire all or substantially all of the
assets of any Person or all or substantially all of the assets constituting the
business of a division, branch or other unit operation of any Person, (b) enter
into any joint venture or partnership with any Person (except as permitted by
Section 8.3(j) (Investments)) or (c) acquire or create any Subsidiary unless,
after giving effect to such creation or acquisition, such Subsidiary is a
Wholly-

 

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Owned Subsidiary of the Borrower (unless such Subsidiary is permitted under
clause (j) of Section 8.3 (Investments)), the Borrower is in compliance with
Section 7.11 (Additional Collateral and Guaranties) and the Investment in such
Subsidiary is permitted under Section 8.3(c) (Investments).

 

Section 8.8 Change in Nature of Business

 

The Borrower shall not, and shall not permit any of its Subsidiaries to, make
any material change in the nature or conduct of its business as carried on at
the date hereof, whether in connection with a Permitted Acquisition or
otherwise, except for the entry into business reasonably related or ancillary
thereto.

 

Section 8.9 Transactions with Affiliates

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
except as otherwise expressly permitted herein, do any of the following: (a)
make any Investment in an Affiliate of the Borrower that is not a Subsidiary of
the Borrower, (b) transfer, sell, lease, assign or otherwise dispose of any
asset to any Affiliate of the Borrower that is not a Subsidiary of the Borrower,
(c) merge into or consolidate with or purchase or acquire assets from any
Affiliate of the Borrower that is not a Subsidiary of the Borrower, (d) repay
(prior to its scheduled maturity) any Indebtedness, issued or incurred after the
Closing Date, to any Affiliate of the Borrower that is not a Subsidiary of the
Borrower,(e) enter into any other transaction directly or indirectly with or for
the benefit of any Affiliate of the Borrower that is not a Guarantor (including
guaranties and assumptions of obligations of any such Affiliate), except for, in
the case of this clause (e), (i) transactions in the ordinary course of business
on a basis no less favorable to the Borrower or, as the case may be, such
Subsidiary thereof as would be obtained in a comparable arm’s length transaction
with a Person not an Affiliate thereof (as determined in good faith by the board
of directors of the Borrower) and (ii) salaries and other director or employee
compensation to officers or directors of the Borrower or any of its Subsidiaries
commensurate with current compensation levels.

 

Section 8.10 Limitations on Restrictions on Subsidiary Distributions; No New
Negative Pledge; Restricted Subsidiaries

 

(a) Except pursuant to the Loan Documents, agreements governing purchase money
Indebtedness or Capital Lease Obligations permitted by Section 8.1(b), (d), (e)
or (k) (Indebtedness) (in the case of agreements permitted by such clauses, any
prohibition or limitation shall only be effective against the assets financed
thereby) and agreements relating to Asset Sales permitted under Section 8.4
(Sales of Assets) (in the case of such agreements, any prohibition or limitation
shall only be effective against the assets or Stock subject to such Asset Sate),
the Borrower shall not, and shall not permit any of its Subsidiaries to, (i)
agree to enter into or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of such Subsidiary to pay
dividends or make any other distribution or transfer of funds or assets or make
loans or advances to or other Investments in, or pay any Indebtedness owed to,
the Borrower or any other Subsidiary of the Borrower or (ii) enter into or
suffer to exist or become effective any agreement prohibiting or limiting the
ability of the Borrower or any Subsidiary of the Borrower to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, to secure the Obligations, including
any agreement requiring any other Indebtedness or Contractual Obligation to be
equally and ratably secured with the Obligations.

 

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(b) Notwithstanding anything herein to the contrary, until the PUC
Authorizations contemplated Section 7.12(b) (Regulatory Consents) are obtained
and each Subsidiary listed on Schedule 8.10(b) (Restricted Subsidiaries) has
satisfied the Subsidiary Guaranty Requirements, no such Subsidiary of the
Borrower shall (i) conduct any business or engage in any activities other than
the businesses related to the CATV Franchises or PUC Authorizations, as
applicable; (ii) incur any Indebtedness directly or on behalf of the Borrower or
any of its other Subsidiaries (other than the incurrence of accounts payable or
accrued liabilities in the ordinary course of business provided that such
accounts payable or accrued liabilities do not exceed in the aggregate
$5,000,000 for all Subsidiaries listed on Schedule 8.10(b) (Restricted
Subsidiaries)); or (iii) receive, collect, retain or hold any funds, proceeds or
assets (other than such Permits) either directly or on behalf of the Borrower or
any of its other Subsidiaries other than in the ordinary course of business;
provided, that any funds, proceeds or assets are received by such Subsidiary
other than in the ordinary course of business shall be immediately transferred
to the Borrower.

 

Section 8.11 Modification of Constituent Documents

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to
amend its Constituent Documents (including in the terms of its outstanding
Stock), except for changes and amendments that do not materially affect the
rights and privileges of the Borrower or any Subsidiary of the Borrower and do
not materially adversely affect the interests of the Secured Parties under the
Loan Documents or in the Collateral.

 

Section 8.12 Modification of First Lien Loan Documents

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
(a) alter, rescind, terminate, amend, supplement, waive or otherwise modify any
provision of any First Lien Loan Document (except as permitted by the
Intercreditor Agreement) or (b) permit any breach or default to exist under any
First Lien Loan Document or take or fail to take any action thereunder, if to do
so would have a Material Adverse Effect.

 

Section 8.13 Accounting Changes; Fiscal Year

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
change its (a) accounting treatment and reporting practices or tax reporting
treatment, except as required by GAAP or any Requirement of Law and disclosed to
the Lenders and the Administrative Agent or (b) fiscal year.

 

Section 8.14 Margin Regulations

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
use all or any portion of the proceeds of any credit extended hereunder to
purchase or carry margin stock (within the meaning of Regulation U of the
Federal Reserve Board) in contravention of Regulation U of the Federal Reserve
Board.

 

Section 8.15 Sale/Leasebacks

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
enter into any sale and leaseback transaction, except as permitted by Section
8.4(f) (Asset Sales).

 

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Section 8.16 No Speculative Transactions

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
engage in any speculative transaction or in any transaction involving Hedging
Contracts except as required by Section 7.15 (Interest Rate Contract) or for the
sole purpose of hedging in the normal course of business and consistent with
industry practices.

 

Section 8.17 Compliance with ERISA

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower or
any ERISA Affiliate to, cause or permit to occur, (a) an event that could result
in the imposition of a Lien under Section 412 of the Code or Section 302 or 4068
of ERISA or (b) ERISA Events that would have a Material Adverse Effect in the
aggregate.

 

Section 8.18 Environmental

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
allow a Release of any Contaminant in violation of any Environmental Law;
provided, however, that the Borrower shall not be deemed in violation of this
Section 8.18 if all Environmental Liabilities and Costs incurred or reasonably
expected to be incurred by the Loan Parties as the consequence of all such
Releases shall not exceed $2,000,000 in the aggregate.

 

Section 8.19 Patriot Act

 

The Borrower shall not, nor shall it permit any Subsidiary of the Borrower to,
take any action or permit any circumstance (whether directly or indirectly) the
result of which would result in a breach of Section 4.21 (Prohibited Persons;
Trade Restrictions).

 

ARTICLE IX

 

EVENTS OF DEFAULT

 

Section 9.1 Events of Default

 

Each of the following events shall be an Event of Default:

 

(a) the Borrower shall fail to pay any principal of any Term Loan when the same
becomes due and payable; or

 

(b) the Borrower shall fail to pay any interest on any Term Loan, any fee under
any of the Loan Documents or any other Obligation (other than one referred to in
clause (a) above) and such non-payment continues for a period of three Business
Days after the due date therefor; or

 

(c) any representation or warranty made or deemed made by any Loan Party in any
Loan Document or by any Loan Party (or any of its officers) in connection with
any Loan Document shall prove to have been incorrect in any material respect
when made or deemed made; or

 

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(d) any Loan Party shall fail to perform or observe (i) any term, covenant or
agreement contained in Article V (Financial Covenants), Section 6.1 (Financial
Statements), 6.2 (Default Notices), 7.1 (Preservation of Corporate Existence,
Etc.), 7.6 (Access), 7.9 (Application of Proceeds) or Article VIII (Negative
Covenants) or (ii) any other term, covenant or agreement contained in this
Agreement or in any other Loan Document if such failure under this clause (ii)
shall remain unremedied for 30 days after the earlier of (A) the date on which a
Responsible Officer of the Borrower becomes aware of such failure and (B) the
date on which written notice thereof shall have been given to the Borrower by
the Administrative Agent or any Lender; or

 

(e) (i) the Borrower or any Subsidiary of the Borrower shall fail to make any
payment on any Indebtedness of the Borrower or any such Subsidiary (other than
the Obligations) or any Guaranty Obligation in respect of Indebtedness of any
other Person, and, in each case, such failure relates to Indebtedness having a
principal amount of $2,000,000 or more, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), (ii) any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Indebtedness, if the effect of such
event or condition is to accelerate the maturity of such Indebtedness (including
the occurrence of an “Event of Default” pursuant to, and as defined in, the
First Lien Credit Agreement) or (iii) any such Indebtedness shall become or be
declared to be due and payable, or be required to be prepaid or repurchased
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; provided, however, that a default described in clause (i)
through (iii) of this clause (e) in respect of the First Lien Credit Agreement
shall not at any time constitute an Event of Default unless such default, event
or condition is not cured or waived within 45 days after the occurrence of such
default, event or condition; or

 

(f) (i) the Borrower or any Subsidiary of the Borrower shall generally not pay
its debts as such debts become due, shall admit in writing its inability to pay
its debts generally or shall make a general assignment for the benefit of
creditors, (ii) any proceeding shall be instituted by or against the Borrower or
any Subsidiary of the Borrower seeking to adjudicate it bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts, under any Requirement of
Law relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a custodian,
receiver, trustee or other similar official for it or for any substantial part
of its property; provided, however, that, in the case of any such proceedings
instituted against the Borrower or any Subsidiary of the Borrower (but not
instituted by the Borrower or any Subsidiary of the Borrower) either such
proceedings shall remain undismissed or unstayed for a period of 30 days or more
or any action sought in such proceedings shall occur or (iii) the Borrower or
any Subsidiary of the Borrower shall take any corporate action to authorize any
action set forth in clauses (i) and (ii) above; or

 

(g) one or more judgments or orders (or other similar process) involving, in the
case of money judgments, an aggregate amount in excess of $2,000,000, to the
extent not covered by insurance, shall be rendered against one or more of the
Borrower and its Subsidiaries and such judgment or order shall continue for a
period of 30 days without being discharged, stayed or bonded pending appeal; or

 

(h) an ERISA Event shall occur and the amount of all liabilities and
deficiencies resulting therefrom, whether or not assessed, exceeds $2,000,000 in
the aggregate; or

 

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(i) any provision of any Loan Document after delivery thereof shall for any
reason fail or cease to be valid and binding on, or enforceable against, any
Loan Party party thereto, or any Loan Party shall so state in writing; or

 

(j) any Collateral Document shall for any reason fail or cease to create a valid
and enforceable Lien on any Collateral purported to be covered thereby or,
except as permitted by the Loan Documents, such Lien shall fail or cease to be a
perfected and first priority Lien, or any Loan Party shall so state in writing;
or

 

(k) there shall occur any Change of Control; or

 

(l) the Borrower or any Subsidiary of the Borrower shall have entered into one
or more consent or settlement decrees or agreements or similar arrangements with
a Governmental Authority or one or more judgments, orders, decrees or similar
actions shall have been entered against one or more of the Borrower or any
Subsidiary of the Borrower based on or arising from the violation of or pursuant
to any Environmental Law, or the generation, storage, transportation, treatment,
disposal or Release of any Contaminant and, in connection with all the
foregoing, the Borrower or any Subsidiary of the Borrower is likely to incur
Environmental Liabilities and Costs exceeding $2,000,000 in the aggregate that
were not reflected in the Projections or the Financial Statements delivered
pursuant to Section 4.4 (Financial Statements) prior to the date hereof; or

 

(m) the Borrower or any Subsidiary of the Borrower shall (i) default in any
payment or payments (which payment or payments are material either individually
or in the aggregate) when due of any material Contractual Obligation, or in the
performance or observance, of any material obligation or condition of any
material Contractual Obligation, unless, but only as long as, the existence of
such default is being contested by the Borrower or such Subsidiary in good faith
by appropriate proceedings and adequate reserves in respect thereof have been
established to the extent required by GAAP, or (ii) allow any Communications
License, CATV Franchise or PUC Authorization of the Borrower or of any
Subsidiary of the Borrower to be revoked, suspended, cancelled or otherwise
terminated and such revocation, suspension, cancellation or termination would
have a Material Adverse Effect.

 

Section 9.2 Remedies

 

During the continuance of any Event of Default, the Administrative Agent (a)
may, and, at the request of the Requisite Lenders, shall, by notice to the
Borrower declare that all or any portion of the Commitments be terminated,
whereupon the obligation of each Lender to make any Term Loan shall immediately
terminate and (b) may and, at the request of the Requisite Lenders, shall, by
notice to the Borrower, declare the Term Loans, all interest thereon and all
other amounts and Obligations payable under this Agreement to be forthwith due
and payable, whereupon the Term Loans, all such interest and all such amounts
and Obligations shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that upon the
occurrence of the Events of Default specified in Section 9.1(f) (Events of
Default), (x) the Commitments of each Lender to make Term Loans and the
commitments of each Lender shall each automatically be terminated and (y) the
Term Loans, all such interest and all such amounts and Obligations shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower. In addition to the remedies set forth above, the Administrative
Agent may exercise

 

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any remedies provided for by the Collateral Documents in accordance with the
terms thereof or any other remedies provided by applicable law in each case,
subject to the terms of the Intercreditor Agreement.

 

Section 9.3 Regulatory Approvals

 

(a) Upon any action by the Administrative Agent or Collateral Agent to commence
the exercise of remedies hereunder or under the other Loan Documents, the
Borrower hereby undertakes, and agrees to cause each of its Subsidiaries to
undertake, to cooperate and join with the Administrative Agent or Collateral
Agent in any application to any regulatory body (including the FCC or any PUC),
administrative agency, court or other forum, with respect thereto and to provide
such assistance in connection therewith as the Administrative Agent or the
Collateral Agent may request, including the preparation of filings and
appearances of officers and employees of the Borrower or any of its Subsidiaries
before any Governmental Authority, in each case, in support of any such
application made by the Administrative Agent or the Collateral Agent and the
Borrower shall not, nor shall the Borrower permit any of its Subsidiaries to,
directly or indirectly, oppose any such action by the Administrative Agent or
the Collateral Agent before any Governmental Authority.

 

Section 9.4 Rescission

 

If at any time after termination of the Commitments or acceleration of the
maturity of the Term Loans, the Borrower shall pay all arrears of interest and
all payments on account of principal of the Term Loans that shall have become
due otherwise than by acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified herein) and
all Events of Default and Defaults (other than non-payment of principal of and
accrued interest on the Term Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 11.1 (Amendments,
Waivers, Etc.), then upon the written consent of the Requisite Lenders and
written notice to the Borrower, the termination of the Commitments or the
acceleration and their consequences may be rescinded and annulled; provided,
however, that such action shall not affect any subsequent Event of Default or
Default or impair any right or remedy consequent thereon. The provisions of the
preceding sentence are intended merely to bind the Lenders to a decision that
may be made at the election of the Requisite Lenders, and such provisions are
not intended to benefit the Borrower and do not give the Borrower the right to
require the Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT

 

Section 10.1 Authorization and Action

 

(a) Each Lender hereby appoints Credit Suisse, acting through one or more of its
branches, as the Administrative Agent and the Collateral Agent hereunder, and
each Lender authorizes the Administrative Agent and the Collateral Agent to take
such action as agent on their behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Administrative
Agent or the Collateral Agent, as applicable, under such agreements and to
exercise such powers as are reasonably incidental thereto. Without limiting the
foregoing, each Lender hereby authorizes the Administrative Agent and the
Collateral Agent

 

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to execute and deliver, and to perform its respective obligations under, each of
the Loan Documents to which it is a party, to exercise all rights, powers and
remedies that the Administrative Agent or the Collateral Agent, as applicable,
may have under such Loan Documents and, in the case of the Collateral Agent with
respect to the Collateral Documents, to act as agent for the Lenders and the
other Secured Parties under such Collateral Documents. In particular, each
Lender agrees to the terms of the Intercreditor Agreement and to be bound by the
terms thereof as if it were a party thereto (including Section 5.6 thereof).

 

(b) As to any matters not expressly provided for by this Agreement and the other
Loan Documents (including enforcement or collection), the Administrative Agent
and the Collateral Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Requisite Lenders, and such instructions shall be binding
upon all Lenders; provided, however, that the Administrative Agent and the
Collateral Agent shall not be required to take any action that (i) the
Administrative Agent or the Collateral Agent in good faith believes exposes it
to personal liability unless it receives an indemnification satisfactory to it
from the Lenders with respect to such action or (ii) is contrary to this
Agreement or applicable law. The Administrative Agent and the Collateral Agent
each agree to give to each Lender prompt notice of each notice given by any Loan
Party pursuant to Article II hereof or as otherwise expressly required by the
terms of this Agreement or the other Loan Documents.

 

(c) In performing its functions and duties hereunder and under the other Loan
Documents, each of the Administrative Agent and the Collateral Agent is acting
solely on behalf of the Lenders except to the limited extent provided in Section
2.7(b) (Evidence of Debt), and their respective duties are entirely
administrative in nature. Neither the Administrative Agent nor the Collateral
Agent assume and shall not be deemed to have assumed any obligation other than
as expressly set forth herein and in the other Loan Documents or any other
relationship as the agent, fiduciary or trustee of or for any Lender or holder
of any other Obligation. The Administrative Agent and the Collateral Agent may
perform any of its duties under any Loan Document by or through its agents or
employees.

 

(d) The Arranger shall have no obligations or duties whatsoever in such capacity
under this Agreement or any other Loan Document and shall incur no liability
hereunder or thereunder in such capacity.

 

Section 10.2 Reliance by Agents, Etc.

 

None of the Administrative Agent, the Collateral Agent, nor any of their
respective Affiliates or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it,
him, her or them under or in connection with this Agreement or the other Loan
Documents, except for its, his, her or their own gross negligence or willful
misconduct. Without limiting the foregoing, the Administrative Agent and the
Collateral Agent (a) may treat the payee of any Note as its holder until such
Note has been assigned in accordance with Section 2.4 (Evidence of Debt), (b)
may rely on the Register to the extent set forth in Section 11.2 (Assignments
and Participations), (c) may consult with legal counsel (including counsel to
the Borrower or any other Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, (d) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made by or on behalf of the

 

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Borrower or any of its Subsidiaries in or in connection with this Agreement or
any other Loan Document, (e) shall not have any duty to ascertain or to inquire
either as to the performance or observance of any term, covenant or condition of
this Agreement or any other Loan Document, as to the financial condition of any
Loan Party or as to the existence or possible existence of any Default or Event
of Default, (f) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto and (g)
shall incur no liability under or in respect of this Agreement or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which writing may be a telecopy or electronic mail) or any telephone
message believed by it to be genuine and signed or sent by the proper party or
parties.

 

Section 10.3 Posting of Approved Electronic Communications

 

(a) Each of the Lenders and the Borrower agree, and the Borrower shall cause
each Guarantor to agree, that the Administrative Agent and the Collateral Agent
may, but shall not be obligated to, make the Approved Electronic Communications
available to the Lenders by posting such Approved Electronic Communications on
IntraLinks™ or a substantially similar electronic platform chosen by the
Administrative Agent and the Collateral Agent to be its electronic transmission
system (the “Approved Electronic Platform”).

 

(b) Although the Approved Electronic Platform and its primary web portal are
secured with generally-applicable security procedures and policies implemented
or modified by the Administrative Agent from time to time (including, as of the
Closing Date, a dual firewall and a User ID/Password Authorization System) and
the Approved Electronic Platform is secured through a single-user-per-deal
authorization method whereby each user may access the Approved Electronic
Platform only on a deal-by-deal basis, each of the Lenders and the Borrower
acknowledges and agrees, and the Borrower shall cause each Guarantor to
acknowledge and agree, that the distribution of material through an electronic
medium is not necessarily secure and that there are confidentiality and other
risks associated with such distribution. In consideration for the convenience
and other benefits afforded by such distribution and for the other consideration
provided hereunder, the receipt and sufficiency of which is hereby acknowledged,
each of the Lenders and the Borrower hereby approves, and the Borrower shall
cause each Guarantor to approve, distribution of the Approved Electronic
Communications through the Approved Electronic Platform and understands and
assumes, and the Borrower shall cause each Guarantor to understand and assume,
the risks of such distribution.

 

(c) The Approved Electronic Communications and the Approved Electronic Platform
are provided “as is” and “as available”. None of the Administrative Agent, the
Collateral Agent or any of their respective Affiliates or any of their
respective officers, directors, employees, agents, advisors or representatives
(the “Agent Affiliates”) warrant the accuracy, adequacy or completeness of the
Approved Electronic Communications and the Approved Electronic Platform and each
expressly disclaims liability for errors or omissions in the Approved Electronic
Communications and the Approved Electronic Platform. No Warranty of any kind,
express, implied or statutory (including any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects) is made by the agent affiliates in
connection with the approved electronic communications or the approved
electronic platform.

 

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(d) Each of the Lenders and the Borrower agree, and the Borrower shall cause
each Guarantor to agree, that the Administrative Agent and the Collateral Agent
may, but (except as may be required by applicable law) shall not be obligated
to, store the Approved Electronic Communications on the Approved Electronic
Platform in accordance with the Administrative Agent’s generally-applicable
document retention procedures and policies.

 

Section 10.4 The Agents Individually

 

With respect to its Ratable Portion, each Agent that is a Lender shall have and
may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms “Lenders”, “Requisite Lenders” and any similar terms shall,
unless the context clearly otherwise indicates, include each Agent in its
individual capacity as a Lender or as one of the Requisite Lenders. Each Agent
and each of its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with, any Loan
Party as if such Agent were not acting as an Agent.

 

Section 10.5 Lender Credit Decision

 

Each Lender acknowledges that it shall, independently and without reliance upon
any Agent or any other Lender conduct its own independent investigation of the
financial condition and affairs of the Borrower and each other Loan Party in
connection with the making and continuance of the Term Loans. Each Lender also
acknowledges that it shall, independently and without reliance upon the Agents
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and other Loan Documents.

 

Section 10.6 Indemnification

 

Each Lender agrees to indemnify the Administrative Agent, the Collateral Agent
and, in each case, each of its Affiliates, and each of their respective
directors, officers, employees, agents and advisors (to the extent not
reimbursed by the Borrower), from and against such Lender’s aggregate Ratable
Portion of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable fees, expenses and disbursements of financial and legal advisors) of
any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against, the Administrative Agent, the Collateral Agent or any of its
Affiliates, directors, officers, employees, agents and advisors in any way
relating to or arising out of this Agreement or the other Loan Documents or any
action taken or omitted by the Administrative Agent or the Collateral Agent
under this Agreement or the other Loan Documents; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s or Collateral Agent’s or such
Affiliate’s gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse the Administrative Agent and
Collateral Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable fees, expenses and disbursements of financial and
legal advisors) incurred by the Administrative Agent or the Collateral Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of its rights or
responsibilities under, this Agreement or the other Loan Documents, to the
extent that the Administrative Agent or the Collateral Agent is not reimbursed
for such expenses by the Borrower or another Loan Party.

 

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Section 10.7 Successor Agents

 

The Administrative Agent and the Collateral Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Administrative Agent or Collateral Agent, as applicable. If no successor
Administrative Agent or Collateral Agent shall have been so appointed by the
Requisite Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent’s giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Administrative Agent or
Collateral Agent, as applicable, selected from among the Lenders. Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent or as Collateral Agent by a successor Collateral Agent,
such successor Agent shall succeed to, and become vested with, all the rights,
powers, privileges and duties of the applicable retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. Prior to any retiring Agent’s resignation
hereunder as Administrative Agent or Collateral Agent, the retiring Agent shall
take such action as may be reasonably necessary to assign to the successor Agent
its rights as Administrative Agent or Collateral Agent, as applicable, under the
Loan Documents. After such resignation, any retiring Agent shall continue to
have the benefit of this Article X as to any actions taken or omitted to be
taken by it while it was Administrative Agent or Collateral Agent, as
applicable, under this Agreement and the other Loan Documents. If no Person has
accepted the appointment as successor Collateral Agent, as provided above, the
Administrative Agent shall succeed to, and become vested with, all the rights,
powers, privileges and duties of, the applicable retiring Collateral Agent
effective upon its resignation until a successor Collateral Agent has been
appointed in accordance with the terms hereof. If no Person has accepted the
appointment as successor Administrative Agent or the Administrative Agent has
not succeeded a retiring Collateral Agent, in each case, as provided above, the
Requisite Lenders shall succeed to, and become vested with, all the rights,
powers, privileges and duties of, the applicable retiring Agent effective upon
its resignation.

 

Section 10.8 Concerning the Collateral and the Collateral Documents

 

(a) Each Lender agrees that any action taken by the Administrative Agent, the
Collateral Agent or the Requisite Lenders (or, where required by the express
terms of this Agreement, a greater proportion of the Lenders) in accordance with
the provisions of this Agreement, the other Loan Documents and the exercise by
the Administrative Agent, the Collateral Agent or the Requisite Lenders (or,
where so required, such greater proportion) of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders and other Secured
Parties. Without limiting the generality of the foregoing and, in each case,
subject to Section 10.7 (Successor Agents), (i) the Administrative Agent shall
have the sole and exclusive right and authority to act as the disbursing and
collecting agent for the Lenders with respect to all payments and collections
arising in connection herewith and with the Collateral Documents, (ii) the
Collateral Agent shall have the sole and exclusive right and authority to (A)
execute and deliver each Collateral Document and accept delivery of each such
agreement delivered by the Borrower or any of its Subsidiaries, (B) act as
collateral agent for the Lenders and the other Secured Parties for purposes of
the perfection of all security interests and Liens created by such agreements
and all other purposes stated therein, provided, however, that the Collateral
Agent hereby appoints,

 

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authorizes and directs each Lender to act as collateral sub-agent for the
Administrative Agent and the Lenders for purposes of the perfection of all
security interests and Liens with respect to the Collateral, including any
Deposit Accounts maintained by a Loan Party with, and cash and Cash Equivalents
held by, such Lender, (C) manage, supervise and otherwise deal with the
Collateral and (D) take such action as is necessary or desirable to maintain the
perfection and priority of the security interests and Liens created or purported
to be created by the Collateral Documents and (iii) the Administrative Agent,
and the Collateral Agent at the direction of the Administrative Agent, shall
have the exclusive right and authority to (except as may be otherwise
specifically restricted by the terms hereof or of any other Loan Document)
exercise all remedies given to the Administrative Agent, the Lenders and the
other Secured Parties with respect to the Collateral under the Loan Documents
relating thereto, applicable law or otherwise.

 

(b) Each of the Lenders hereby consents to the release and hereby directs, in
accordance with the terms hereof, the Administrative Agent and the Collateral
Agent to release (or, in the case of clause (ii) below, release or subordinate)
any Lien held by the Administrative Agent or the Collateral Agent for the
benefit of the Lenders against any of the following:

 

(i) all of the Collateral and all Loan Parties, upon termination of the
Commitments and payment and satisfaction in full of all Term Loans and all other
Obligations that the Administrative Agent has been notified in writing are then
due and payable;

 

(ii) any assets that are subject to a Lien permitted by Section 8.2(d) or (e)
(Liens, Etc.);

 

(iii) any part of the Collateral sold or disposed of by a Loan Party if such
sale or disposition is permitted by this Agreement (or permitted pursuant to a
waiver of or consent to a transaction otherwise prohibited by this Agreement);
and

 

(iv) any assets, Collateral or Loan Parties to the extent required by the
Intercreditor Agreement.

 

Each of the Administrative Agent and the Lenders hereby directs the Collateral
Agent to execute and deliver or file such termination and partial release
statements and do such other things as are necessary to release Liens to be
released pursuant to this Section 10.8 promptly upon the effectiveness of any
such release.

 

Section 10.9 Actions by the Collateral Agent

 

The Collateral Agent shall take, or refrain from taking, any action as directed
in writing by the Administrative Agent. Notwithstanding anything to the contrary
provided herein or in the Collateral Documents, the Collateral Agent shall not
be obligated to take, or refrain from taking, any action (a) to the extent the
Collateral Agent has received a written advice from its counsel that such action
is in conflict with any applicable law, Collateral Document or order of any
Governmental Authority or (b) with respect to which the Collateral Agent, in its
reasonable judgment, has not received adequate security or indemnity hereunder
or under the Collateral Documents. Nothing in this Section 10.9 shall impair the
right of the Collateral Agent in its discretion to take or omit to take any
action which is deemed proper by the Collateral Agent under the Collateral
Documents or the Intercreditor Agreement and which it believes in good faith is
not inconsistent with any direction of the Administrative Agent delivered
pursuant to this

 

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Section 10.9; provided, however, the Collateral Agent shall not be under any
obligation to take any discretionary action under the provisions of this
Agreement or any other Collateral Document unless so directed by the
Administrative Agent. The Collateral Agent shall be obliged to perform only such
duties as are specifically set forth in this Agreement or any Collateral
Document, and no implied covenants or obligations shall be read into this
Agreement or any Collateral Document against the Collateral Agent. The
Collateral Agent shall, upon receipt of any written direction pursuant to this
Section 10.9, exercise the rights and powers vested in it by any Collateral
Document with respect to such direction, and the Collateral Agent shall not be
liable with respect to any action taken or omitted in accordance with such
direction. If the Collateral Agent shall seek directions from the Administrative
Agent or the Requisite Lenders with respect to any action under any Collateral
Document or the Intercreditor Agreement, the Collateral Agent shall not be
required to take, or refrain from taking, such action until it shall have
received such direction. The Collateral Agent shall not agree to amend or modify
the Intercreditor Agreement without the consent of the Requisite Lenders or, in
the case of any amendment or other modifications to the definition of “Cap
Amount” or “First Lien Obligations” under the Intercreditor Agreement, the
consent of 100% of the Lenders hereunder. The Collateral Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession shall be to deal with it in the same manner as with similar
property for its own account. The powers conferred on the Collateral Agent
hereunder and under the Collateral Documents are solely to protect the
Collateral Agent’s interest in the Collateral (for itself and for the benefit of
the Secured Parties) and, except as expressly set forth herein, shall not impose
any duty upon the Collateral Agent to exercise any such powers. The Collateral
Agent shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers at the direction of the Administrative
Agent, and neither the Collateral Agent nor any of its officers, directors,
employees or agents shall be responsible to any Secured Party or any Loan Party
for any act or failure to act hereunder, except for its own gross negligence or
willful misconduct.

 

Section 10.10 Collateral Matters Relating to Related Obligations

 

The benefit of the Loan Documents and of the provisions of this Agreement
relating to the Collateral shall extend to and be available in respect of any
Secured Obligation arising under any Hedging Contract that is a Loan Document or
that is otherwise owed to Persons other than the Administrative Agent, the
Collateral Agent and the Lenders (collectively, “Related Obligations”) solely on
the condition and understanding, as among the Administrative Agent, the
Collateral Agent and all Secured Parties, that (a) the Related Obligations shall
be entitled to the benefit of the Loan Documents and the Collateral to the
extent expressly set forth in this Agreement and the other Loan Documents and to
such extent the Collateral Agent shall hold, and have the right and power to act
with respect to, the Guaranty and the Collateral on behalf of and as agent for
the holders of the Related Obligations, but the Collateral Agent is otherwise
acting solely as agent for the Lenders and shall have no fiduciary duty, duty of
loyalty, duty of care, duty of disclosure or other obligation whatsoever to any
holder of Related Obligations, (b) all matters, acts and omissions relating in
any manner to the Guaranty, the Collateral, or the omission, creation,
perfection, priority, abandonment or release of any Lien, shall be governed
solely by the provisions of this Agreement and the other Loan Documents and no
separate Lien, right, power or remedy shall arise or exist in favor of any
Secured Party under any separate instrument or agreement or in respect of any
Related Obligation, (c) each Secured Party shall be bound by all actions taken
or omitted, in accordance with the provisions of this Agreement and the other
Loan Documents, by the Administrative Agent, the Collateral Agent and the
Requisite Lenders, each of whom shall be entitled to act at its sole discretion
and exclusively in its own

 

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interest given its own Commitments and its own interest in the Term Loans and
other Obligations to it arising under this Agreement or the other Loan
Documents, without any duty or liability to any other Secured Party or as to any
Related Obligation and without regard to whether any Related Obligation remains
outstanding or is deprived of the benefit of the Collateral or becomes unsecured
or is otherwise affected or put in jeopardy thereby, (d) no holder of Related
Obligations and no other Secured Party (except the Administrative Agent, the
Collateral Agent and the Lenders to the extent set forth in this Agreement)
shall have any right to be notified of, or to direct, require or be heard with
respect to, any action taken or omitted in respect of the Collateral or under
this Agreement or the Loan Documents and (e) no holder of any Related Obligation
shall exercise any right of setoff, banker’s lien or similar right except to the
extent provided in Section 11.6 (Right of Set-off) and then only to the extent
such right is exercised in compliance with Section 11.7 (Sharing of Payments,
Etc.).

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.1 Amendments, Waivers, Etc.

 

(a) No amendment or waiver of any provision of this Agreement or any other Loan
Document nor consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be in writing and (x) in the case of an
amendment to cure any ambiguity, omission, defect or inconsistency, signed by
the Administrative Agent and the Borrower, (y) in the case of any such waiver or
consent, signed by the Requisite Lenders (or by the Administrative Agent with
the consent of the Requisite Lenders) and (z) in the case of any other
amendment, by the Requisite Lenders (or by the Administrative Agent with the
consent of the Requisite Lenders) and the Borrower, and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by each Lender directly affected thereby, in
addition to the Requisite Lenders (or the Administrative Agent with the consent
thereof), do any of the following:

 

(i) waive any condition specified in Section 3.1 (Conditions Precedent to
Initial Loans), except with respect to a condition based upon another provision
hereof, the waiver of which requires only the concurrence of the Requisite
Lenders and, in the case of the conditions specified in Section 3.1 (Conditions
Precedent to Initial Loans), subject to the provisions of Section 3.2
(Determinations of Initial Borrowing Conditions);

 

(ii) increase the Commitment of such Lender or subject such Lender to any
additional obligation;

 

(iii) extend the scheduled final maturity of any Term Loan owing to such Lender,
or waive, reduce or postpone any scheduled date fixed for the payment or
reduction of principal or interest of any such Term Loan or fees owing to such
Lender (it being understood that Section 2.6 (Mandatory Prepayments) does not
provide for scheduled dates fixed for payment) or for the reduction of such
Lender’s Commitment;

 

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(iv) reduce, or release the Borrower from its obligations to repay, the
principal amount of any Term Loan owing to such Lender (other than by the
payment or prepayment thereof);

 

(v) reduce the rate of interest on any Term Loan outstanding and owing to such
Lender or any fee payable hereunder to such Lender;

 

(vi) expressly subordinate any of the Secured Obligations or any Liens securing
the Secured Obligations (other than as provided by the Intercreditor Agreement);

 

(vii) postpone any scheduled date fixed for payment of interest or fees owing to
such Lender or waive any such payment;

 

(viii) change the aggregate Ratable Portions of Lenders required for any or all
Lenders to take any action hereunder;

 

(ix) release all or substantially all of the Collateral except as provided in
Section 10.8(b) (Concerning the Collateral and the Collateral Documents) or
release the Borrower from its payment obligation to such Lender under this
Agreement or the Notes owing to such Lender (if any) or release any Guarantor
from its obligations under the Guaranty except in connection with the sale or
other disposition of a Guarantor (or all or substantially all of the assets
thereof) permitted by this Agreement (or permitted pursuant to a waiver or
consent of a transaction otherwise prohibited by this Agreement) and provided
that any proceeds from such sale or disposition are applied as required hereby;
or

 

(x) amend Section 10.8(b) (Concerning the Collateral and the Collateral
Documents), Section 11.7 (Sharing of Payments, Etc.), this Section 11.1 or
either definition of the terms “Requisite Lenders” or “Ratable Portion”; and
provided, further, that (w) any modification of the application of payments to
the Term Loans pursuant to Section 2.6 (Mandatory Prepayments) shall require the
consent of the Requisite Lenders, (x) no amendment, waiver or consent shall,
unless in writing and signed by any Special Purpose Vehicle that has been
granted an option pursuant to Section 11.2(e) (Assignments and Participations),
affect the grant or nature of such option or the right or duties of such Special
Purpose Vehicle hereunder, and (y) no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or the other Loan Documents; and
provided, further, that the Administrative Agent may, with the consent of the
Borrower, amend, modify or supplement this Agreement to cure any ambiguity,
omission, defect or inconsistency, so long as such amendment, modification or
supplement does not adversely affect the rights of any Lender.

 

(b) The Administrative Agent may, but shall have no obligation to, with the
written concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.

 

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(c) If, in connection with any proposed amendment, modification, waiver or
termination requiring the consent of any Lender whose consent is required is not
obtained when due (each such Lender, a “Non-Consenting Lender”), then, as long
as the Lender acting as the Administrative Agent is not a Non-Consenting Lender,
at the Borrower’s request (and sole cost and expense), an Eligible Assignee
acceptable to the Administrative Agent shall have the right with the
Administrative Agent’s consent and in the Administrative Agent’s sole discretion
(but shall have no obligation) to purchase from such Non-Consenting Lender, and
such Non-Consenting Lender agrees that it shall, upon the Administrative Agent’s
request, sell and assign (at the sole cost and expense of the Borrower) to the
Lender acting as the Administrative Agent or such Eligible Assignee, all or any
portion of the Term Loans of such Non-Consenting Lender for an amount equal to
the principal balance of all Term Loans (including PIK Amounts) held by the
Non-Consenting Lender and all accrued and unpaid interest, fees, unreimbursed
costs and expenses and indemnities with respect thereto through the date of sale
plus an amount equal to the Applicable Prepayment Premium calculated with
respect to the principal amount of the Term Loans (including PIK Amounts) so
purchased as of the date of such purchase; provided, however, that such purchase
and sale shall be recorded in the Register maintained by the Administrative
Agent and not be effective until (x) the Administrative Agent shall have
received from such Eligible Assignee an agreement in form and substance
satisfactory to the Administrative Agent and the Borrower whereby such Eligible
Assignee shall agree to be bound by the terms hereof and (y) such Non-Consenting
Lender shall have received payments of all Term Loans (including PIK Amounts)
held by it and all accrued and unpaid interest, fees, unreimbursed costs and
expenses and indemnities with respect thereto through the date of the sale. Each
Lender agrees that, if it becomes a Non-Consenting Lender, it shall execute and
deliver to the Administrative Agent an Assignment an Acceptance to evidence such
sale and purchase and shall deliver to the Administrative Agent any Note (if the
assigning Lender’s Term Loans are evidenced by Notes) subject to such Assignment
and Acceptance; provided, however, that the failure of any Non-Consenting Lender
to execute an Assignment and Acceptance shall not render such sale and purchase
(and the corresponding assignment) invalid and, such assignment shall be
recorded in the Register and such Non-Consenting Lender shall be deemed to have
executed and delivered such Assignment and Acceptance for all purposes of this
Agreement and the other Loan Documents.

 

Section 11.2 Assignments and Participations

 

(a) Each Lender may sell, transfer, negotiate or assign to one or more Eligible
Assignees all or a portion of its rights and obligations hereunder; provided,
however, that (i) the aggregate amount being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event (if less than the assigning
Lender’s entire interest) be less than $1,000,000 or an integral multiple of
$100,000 in excess thereof (treating multiple, simultaneous assignments by or to
two or more Approved Funds which are Affiliates or share the same (or
affiliated) manager or advisor as a single assignment for purposes of this
clause (a)), except that such minimum amounts shall not apply if (A) the
Borrower and the Administrative Agent consent or (B) if such assignment is being
made to a Lender or an Affiliate or Approved Fund of such Lender, and (ii) if
such Eligible Assignee is not, prior to the date of such assignment, a Lender or
an Affiliate or Approved Fund of a Lender, such assignment shall be subject to
the prior consent of the Administrative Agent (which consent shall not be
unreasonably withheld or delayed); provided, however, that if such assignment
causes any Person (other than CSFB or an Affiliate of CSFB), together with any
Affiliates of such Person, to hold in excess of 50% of the principal amount of
the Obligations, or

 

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such assignment is to a Person (other than CSFB or an Affiliate of CSFB) holding
in excess of 50% of the principal amount of the Obligations, such assignment
shall be subject to the prior consent of the Borrower (which consent shall not
be unreasonably withheld, delayed or conditioned).

 

(b) The parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note (if the assigning Lender’s
Term Loans are evidenced by a Note) subject to such assignment (such new Note or
Notes shall be dated the Closing Date and shall otherwise be in the form of the
Note or Notes replaced thereby) and any administrative questionnaire, tax forms
or other documents required by the Administrative Agent. Upon its receipt of an
Assignment and Acceptance executed by the assigning Lender and the Eligible
Assignee the Lender or Eligible Assignee shall pay to the Administrative Agent a
registration and processing fee of $3,500 for each assignment (except that no
such registration and processing fee shall be payable in the case of (i) an
Assignment and Acceptance which is electronically executed and delivered to the
Administrative Agent via an electronic settlement system (which system shall
initially be ClearPar LLC) or (ii) an Eligible Assignee which is already a
Lender or is an Affiliate of such Lender in respect of any assignment made
pursuant to Section 2.17 (Substitution of Lenders) and Section 11.1(c)
(Amendments, Waivers, Etc.)). Commencing on the effective date specified in such
Assignment and Acceptance, (i) the Eligible Assignee thereunder shall become a
party hereto and, to the extent that rights and obligations under the Loan
Documents have been assigned to such assignee pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender, (ii) the Notes (if any)
corresponding to the Term Loans assigned thereby shall be transferred to such
assignee by notation in the Register and (iii) the assigning Lender thereunder
shall, to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except for those surviving the payment in full of the Obligations) and be
released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender’s rights and obligations under the Loan Documents, such
Lender shall cease to be a party hereto).

 

(c) The Administrative Agent shall maintain at its address referred to in
Section 11.8 (Notices, Etc.) a copy of each Assignment and Acceptance delivered
to and accepted by it and shall record in the Register the names and addresses
of the Lenders and the principal amount of the Term Loans owing to each Lender
from time to time and the Commitments of each Lender. Any assignment pursuant to
this Section 11.2 shall not be effective until such assignment is recorded in
the Register. During the term of this Agreement, the Administrative Agent shall
promptly deliver to the Borrower a report following the end of each calendar
month summarizing all assignments made and recorded in the Register during such
month pursuant to this Section 11.2.

 

(d) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an Eligible Assignee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed, (i) accept such Assignment and
Acceptance, and (ii) record or cause to be recorded the information contained
therein in the Register. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall, if requested by such assignee,
execute and deliver to the Administrative Agent new Notes to the order of such
assignee in an amount equal to the Commitments and Term Loans assumed by it
pursuant to such

 

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Assignment and Acceptance and, if the assigning Lender has surrendered any Note
for exchange in connection with the assignment and has retained Commitments or
Term Loans hereunder, new Notes to the order of the assigning Lender in an
amount equal to the Commitments and Term Loans retained by it hereunder. Such
new Notes shall be dated the same date as the surrendered Notes and be in
substantially the form of Exhibit B (Form of Term Note).

 

(e) Each Lender may sell participations to one or more Persons in or to all or a
portion of its rights and obligations under the Loan Documents. The terms of
such participation shall not, in any event, require the participant’s consent to
any amendments, waivers or other modifications of any provision of any Loan
Documents, the consent to any departure by any Loan Party therefrom, or to the
exercising or refraining from exercising any powers or rights such Lender may
have under or in respect of the Loan Documents (including the right to enforce
the obligations of the Loan Parties), except if any such amendment, waiver or
other modification or consent would (i) reduce the amount, or postpone any date
fixed for, any amount (whether of principal, interest or fees) payable to such
participant under the Loan Documents, to which such participant would otherwise
be entitled under such participation or (ii) result in the release of all or
substantially all of the Collateral other than in accordance with Section
10.8(b) (Concerning the Collateral and the Collateral Documents). In the event
of the sale of any participation by any Lender, (w) such Lender’s obligations
under the Loan Documents shall remain unchanged, (x) such Lender shall remain
solely responsible to the other parties for the performance of such obligations,
(y) such Lender shall remain the holder of such Obligations for all purposes of
this Agreement and (z) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Each
participant shall be entitled to the benefits of Sections 2.15 (Capital
Adequacy) and 2.16 (Taxes) and of 2.14(d) (Illegality) as if it were a Lender;
provided, however, that anything herein to the contrary notwithstanding, the
Borrower shall not, at any time, be obligated to make under Section 2.12
(Capital Adequacy), 2.13 (Taxes) or 2.11(d) (Illegality) to the participants in
the rights and obligations of any Lender (together with such Lender) any payment
in excess of the amount the Borrower would have been obligated to pay to such
Lender in respect of such interest had such participation not been sold;
provided, further, that such participant in the rights and obligations of such
Lender shall have no direct right to enforce any of the terms of this Agreement
against the Borrower, the Administrative Agent or the other Lenders.

 

(f) The parties to this Agreement acknowledge that the provisions of this
Section 11.2 concerning assignments relate only to absolute assignments and that
such provisions do not prohibit pledges or assignments creating security
interests in the Term Loans or Notes, including any such pledge or assignment by
any Lender to any Federal Reserve Bank in accordance with applicable law.

 

Section 11.3 Costs and Expenses

 

(a) The Borrower agrees upon demand to pay, or reimburse the Administrative
Agent and the Collateral Agent for, all of its respective reasonable internal
and external audit, legal, appraisal, valuation, filing, document duplication
and reproduction and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including the
reasonable fees, expenses and disbursements of the Administrative Agent’s and
Collateral Agent’s counsel, Weil, Gotshal & Manges LLP, local legal counsel,
auditors, accountants, appraisers, printers, insurance and environmental
advisors, and other consultants and agents) incurred by the Administrative Agent
or the Collateral Agent in

 

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connection with any of the following: (i) such Agent’s audit and investigation
of the Borrower and its Subsidiaries in connection with the preparation,
negotiation or execution of any Loan Document or Administrative Agent’s periodic
audits of the Borrower or any of its Subsidiaries, as the case may be, (ii) the
preparation, negotiation, execution or interpretation of this Agreement
(including the satisfaction or attempted satisfaction of any condition set forth
in Article III (Conditions To Loans)), any Loan Document or any proposal letter
or commitment letter issued in connection therewith, or the making of the Term
Loans hereunder, (iii) the creation, perfection or protection of the Liens under
any Loan Document (including any reasonable fees, disbursements and expenses for
local counsel in various jurisdictions), (iv) the ongoing administration of this
Agreement and the Term Loans, including consultation with attorneys in
connection therewith and with respect to such Agent’s rights and
responsibilities hereunder and under the other Loan Documents, (v) the
protection, collection or enforcement of any Obligation or the enforcement of
any Loan Document, (vi) the commencement, defense or intervention in any court
proceeding relating in any way to the Obligations, any Loan Party, any of the
Borrower’s Subsidiaries, the First Lien Loan Documents, this Agreement or any
other Loan Document, (vii) the response to, and preparation for, any subpoena or
request for document production with which either such Agent is served or
deposition or other proceeding in which such Agent is called to testify, in each
case, relating in any way to the Obligations, any Loan Party, any of the
Borrower’s Subsidiaries, the First Lien Loan Documents, this Agreement or any
other Loan Document or (viii) any amendment, consent, waiver, assignment,
restatement, or supplement to any Loan Document or the preparation, negotiation
and execution of the same.

 

(b) The Borrower further agrees to pay or reimburse each Agent and each of the
Lenders upon demand for all out-of-pocket costs and expenses, including
reasonable attorneys’ fees (including allocated costs of internal counsel and
costs of settlement), incurred by the such Agent or such Lenders in connection
with any of the following: (i) in enforcing Loan Document or Obligation or any
security therefor or exercising or enforcing any other right or remedy available
by reason of an Event of Default, (ii) refinancing or restructuring of the
credit arrangements provided hereunder in the nature of a “work-out” or in any
insolvency or bankruptcy proceeding, (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer, motion
or other pleadings in any legal proceeding relating to the Obligations, any Loan
Party, any of the Borrower’s Subsidiaries and related to or arising out of the
transactions contemplated hereby or by any other Loan Document or First Lien
Loan Document or (iv) in taking any other action in or with respect to any suit
or proceeding (bankruptcy or otherwise) described in clause (i), (ii) or (iii)
above.

 

Section 11.4 Indemnities

 

(a) The Borrower agrees to indemnify and hold harmless the Administrative Agent,
the Collateral Agent, the Arranger and each Lender (including each Person
obligated on a Hedging Contract that is a Loan Document if such Person was a
Lender, Agent or an Affiliate of an Agent at the time it entered into such
Hedging Contract) and each of their respective Affiliates, and each of the
directors, officers, employees, agents, trustees, shareholders, controlling
persons, members, representatives, attorneys, consultants and advisors of or to
any of the foregoing (including those retained in connection with the
satisfaction or attempted satisfaction of any condition set forth in Article III
(Conditions To Loans) (each such Person being an “Indemnitee”) from and against
any and all claims, damages, liabilities, obligations, losses, penalties,
actions, judgments, suits, costs, disbursements and expenses, joint or several,
of any kind or nature (including reasonable fees, disbursements and expenses of
financial and legal advisors to any

 

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such Indemnitee) that may be imposed on, incurred by or asserted against any
such Indemnitee in connection with or arising out of any investigation,
litigation or proceeding, whether or not such investigation, litigation or
proceeding is brought by the Borrower, an Affiliate of the Borrower, any such
Indemnitee or any of its directors, security holders or creditors or any such
Indemnitee, director, security holder or creditor is a party thereto, whether
direct, indirect, or consequential and whether based on any federal, state or
local law or other statutory regulation, securities or commercial law or
regulation, or under common law or in equity, or on contract, tort or otherwise,
in any manner relating to or arising out of this Agreement, any other Loan
Document, any Obligation, any Disclosure Document, any First Lien Loan Document,
or any act, event or transaction related or attendant to any thereof, or the use
or intended use of the proceeds of the Term Loans or in connection with any
investigation of any potential matter covered hereby (collectively, the
“Indemnified Matters”); provided, however, that the Borrower shall not have any
liability under this Section 11.4 to an Indemnitee with respect to any
Indemnified Matter that has resulted primarily from the gross negligence or
willful misconduct of that Indemnitee, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order. Without limiting the
foregoing, “Indemnified Matters” include (i) all Environmental Liabilities and
Costs arising from or connected with the past, present or future operations of
the Borrower or any of its Subsidiaries involving any property subject to a
Collateral Document, or damage to real or personal property or natural resources
or harm or injury alleged to have resulted from any Release of Contaminants on,
upon or into such property or any contiguous real estate, (ii) any costs or
liabilities incurred in connection with any Remedial Action concerning the
Borrower or any of its Subsidiaries, (iii) any costs or liabilities incurred in
connection with any Environmental Lien and (iv) any costs or liabilities
incurred in connection with any other matter under any Environmental Law,
including the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (49 U.S.C. § 9601 et seq.) and applicable state property transfer
laws, whether, with respect to any such matter, such Indemnitee is a mortgagee
pursuant to any leasehold mortgage, a mortgagee in possession, the successor in
interest to the Borrower or any of its Subsidiaries, or the owner, lessee or
operator of any property of the Borrower or any of its Subsidiaries by virtue of
foreclosure, except, with respect to those matters referred to in clauses (i),
(ii), (iii) and (iv) above, to the extent (x) incurred following foreclosure by
the Administrative Agent, the Collateral Agent or any Lender, or the
Administrative Agent or any Lender having become the successor in interest to
the Borrower or any of its Subsidiaries and (y) attributable solely to acts of
the Administrative Agent, the Collateral Agent or such Lender or any agent on
behalf of such Agent or such Lender.

 

(b) The Borrower shall indemnify the Administrative Agent, the Collateral Agent
and the Lenders for, and hold the Administrative Agent, the Collateral Agent and
the Lenders harmless from and against, any and all claims for brokerage
commissions, fees and other compensation made against the Administrative Agent,
the Collateral Agent and the Lenders for any broker, finder or consultant with
respect to any agreement, arrangement or understanding made by or on behalf of
any Loan Party or any of its Subsidiaries in connection with the transactions
contemplated by this Agreement.

 

(c) The Borrower, at the request of any Indemnitee, shall have the obligation to
defend against any investigation, litigation or proceeding or requested Remedial
Action, in each case contemplated in clause (a) above, and the Borrower, in any
event, may participate in the defense thereof with legal counsel of the
Borrower’s choice. In the event that such indemnitee requests the Borrower to
defend against such investigation, litigation or proceeding or requested
Remedial Action, the Borrower shall promptly do so and such Indemnitee shall
have

 

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the right to have legal counsel of its choice participate in such defense. No
action taken by legal counsel chosen by such Indemnitee in defending against any
such investigation, litigation or proceeding or requested Remedial Action, shall
vitiate or in any way impair the Borrower’s obligation and duty hereunder to
indemnify and hold harmless such Indemnitee.

 

(d) The Borrower agrees that any indemnification or other protection provided to
any Indemnitee pursuant to this Agreement (including pursuant to this Section
11.4) or any other Loan Document shall (i) survive payment in full of the
Obligations and (ii) inure to the benefit of any Person that was at any time an
Indemnitee under this Agreement or any other Loan Document.

 

Section 11.5 Limitation of Liability

 

(a) The Borrower agrees that no Indemnitee shall have any liability (whether in
contract, tort or otherwise) to any Loan Party or any of their respective
Subsidiaries or any of their respective equity holders or creditors for or in
connection with the transactions contemplated hereby and in the other Loan
Documents and First Lien Loan Documents, except to the extent such liability is
determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted primarily from such Indemnitee’s gross negligence
or willful misconduct. In no event, however, shall any Indemnitee be liable on
any theory of liability for any special, indirect, consequential or punitive
damages (including any loss of profits, business or anticipated savings). The
Borrower hereby waives, releases and agrees (each for itself and on behalf of
its Subsidiaries) not to sue upon any such claim for any special, indirect,
consequential or punitive damages, whether or not accrued and whether or not
known or suspected to exist in its favor.

 

(b) IN NO EVENT SHALL ANY AGENT AFFILIATE HAVE ANY LIABILITY TO ANY LOAN PARTY,
LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES
(WHETHER IN TORT OR CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY OR ANY
AGENT AFFILIATE’S TRANSMISSION OF APPROVED ELECTRONIC COMMUNICATIONS THROUGH THE
INTERNET OR ANY USE OF THE APPROVED ELECTRONIC PLATFORM, EXCEPT TO THE EXTENT
SUCH LIABILITY OF ANY AGENT AFFILIATE IS FOUND IN A FINAL NON-APPEALABLE
JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM
SUCH AGENT AFFILIATE’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

Section 11.6 Right of Set-off

 

Upon the occurrence and during the continuance of any Event of Default each
Lender and each Affiliate of a Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other Indebtedness at any time owing by such Lender or its
Affiliates to or for the credit or the account of the Borrower against any and
all of the Obligations now or hereafter existing whether or not such Lender
shall have made any demand under this Agreement or any other Loan Document and
even though such Obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower after any such set-off and application made by such Lender
or its Affiliates; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each
Lender under this Section 11.6 are in addition to the other rights and remedies
(including other rights of set-off) that such Lender may have.

 

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Section 11.7 Sharing of Payments, Etc.

 

(a) If any Lender (directly or through an Affiliate thereof) obtains any payment
(whether voluntary, involuntary, through the exercise of any right of set-off
(including pursuant to Section 11.6 (Right of Set-off) or otherwise) of the Term
Loans owing to it, any interest thereon, fees in respect thereof or amounts due
pursuant to Section 11.3 (Costs and Expenses) or 11.4 (Indemnities) (other than
payments pursuant to Section 2.11 (Special Provisions Governing Eurodollar Rate
Loans), 2.12 (Capital Adequacy) or 2.13 (Taxes) or otherwise receives any
Collateral or any “Proceeds” (as defined in the Pledge and Security Agreement)
of Collateral (other than payments pursuant to Section 2.11 (Special Provisions
Governing Eurodollar Rate Loans), 2.15 (Capital Adequacy) or 2.16 (Taxes) (in
each case, whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise (including pursuant to Section 11.6 (Right of Set-off))) in
excess of its Ratable Portion of all payments of such Obligations obtained by
all the Lenders, such Lender (a “Purchasing Lender”) shall forthwith purchase
from the other Lenders (each, a “Selling Lender”) such participations in their
Term Loans or other Obligations as shall be necessary to cause such Purchasing
Lender to share the excess payment ratably with each of them.

 

(b) If all or any portion of any payment received by a Purchasing Lender is
thereafter recovered from such Purchasing Lender, such purchase from each
Selling Lender shall be rescinded and such Selling Lender shall repay to the
Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender’s ratable share (according to the
proportion of (i) the amount of such Selling Lender’s required repayment in
relation to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the Purchasing Lender in respect
of the total amount so recovered.

 

(c) The Borrower agrees that any Purchasing Lender so purchasing a participation
from a Selling Lender pursuant to this Section 11.7 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.

 

Section 11.8 Notices, Etc.

 

(a) Addresses for Notices. All notices, demands, requests, consents and other
communications provided for in this Agreement shall be given in writing, or by
any telecommunication device capable of creating a written record, and addressed
to the party to be notified as follows:

 

(i)      if to the Borrower:        Knology, Inc.        1241 O.G. Skinner
Driver        West Point, GA 31833        Attention: Robert K. Mills       
Telecopy no:        E-Mail Address:

 

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                with a copy to: Alston & Bird LLP 1201 West Peachtree Street
Atlanta, Georgia 30309 Attention: Richard Grice Telecopy no: 404 881 4777 E-Mail
Address: rgrice@alston.com

 

(ii) if to any Lender, at its Domestic Lending Office specified opposite its
name on Schedule II (Applicable Lending Offices and Addresses for Notices) or on
the signature page of any applicable Assignment and Acceptance;

 

(iii)      if to the Administrative Agent or Collateral Agent:        Credit
Suisse First Boston        Eleven Madison Avenue        New York, New York 10010
       Attention: Agency Loan Administration        Telecopy no: 212 325 8304

 

                with a copy to: Weil, Gotshal & Manges LLP 767 Fifth Avenue, New
York, New York 10153-0119 Attention: Morgan Bale Telecopy no: (212) 310-8007
E-Mail Address: morgan.bale@weil.com

 

or at such other address as shall be notified in writing (x) in the case of the
Borrower, the Administrative Agent and the Collateral Agent, to the other
parties and (y) in the case of all other parties, to the Borrower, the
Administrative Agent and the Collateral Agent.

 

(b) Effectiveness of Notices. All notices, demands, requests, consents and other
communications described in clause (a) above shall be effective (i) if delivered
by hand, including any overnight courier service, upon personal delivery, (ii)
if delivered by posting to an Approved Electronic Platform (to the extent
permitted by Section 10.3 (Posting of Approved Electronic Communications) to be
delivered thereunder), an Internet website or a similar telecommunication device
requiring a user prior access to such Approved Electronic Platform, website or
other device (to the extent permitted by Section 10.3 (Posting of Approved
Electronic Communications) to be delivered thereunder), when such notice,
demand, request, consent and other communication shall have been made generally
available on such Approved Electronic Platform, Internet website or similar
device to the class of Person being notified (regardless of whether any such
Person must accomplish, and whether or not any such Person shall have
accomplished, any action prior to obtaining access to such items, including
registration, disclosure of contact information, compliance with a standard user
agreement or undertaking a duty of confidentiality) and such Person has been
notified that such communication has been posted to the Approved Electronic
Platform, (iii) if approved in advance by the Administrative Agent, if delivered
by electronic mail, when transmitted to an electronic mail address (or by

 

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another means of electronic delivery) as provided in clause (a) above; and (iv)
if delivered by telecopy, when transmitted as provided in clause (a) above;
provided, however, that notices and communications to the Administrative Agent
pursuant to Article II (The Facilities) or Article X (The Administrative Agent)
(A) shall not be effective until received by the Administrative Agent and (B) if
given by telephone, shall not be effective unless confirmed in writing
(including by telecopy) on the next Business Day.

 

(c) Use of Electronic Platform. Notwithstanding clause (a) and (b) above (unless
the Administrative Agent requests that the provisions of clause (a) and (b)
above be followed) and any other provision in this Agreement or any other Loan
Document providing for the delivery of, any Approved Electronic Communication by
any other means, the Loan Parties shall deliver all Approved Electronic
Communications to the Administrative Agent by properly transmitting such
Approved Electronic Communications (in a format acceptable to the Administrative
Agent) to such electronic mail address (or similar means of electronic delivery)
as the Administrative Agent may notify the Borrower. Nothing in this clause (c)
shall prejudice the right of the Administrative Agent or any Lender to deliver
any Approved Electronic Communication to any Loan Party in any manner authorized
in this Agreement or to request that the Borrower effect delivery in such
manner.

 

Section 11.9 No Waiver; Remedies

 

No failure on the part of any Lender or the Administrative Agent to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

 

Section 11.10 Binding Effect

 

This Agreement shall become effective when it shall have been executed by the
Borrower and the Administrative Agent and when the Administrative Agent shall
have been notified by each Lender that such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender and, in each case, their respective
successors and assigns; provided, however, that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.

 

Section 11.11 Governing Law

 

This Agreement and the rights and obligations of the parties hereto shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York.

 

Section 11.12 Submission to Jurisdiction; Service of Process

 

(a) Any legal action or proceeding with respect to this Agreement or any other
Loan Document may be brought in the courts of the State of New York located in
the City of New York or of the United States of America for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Borrower hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties

 

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hereto hereby irrevocably waive any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, that any of
them may now or hereafter have to the bringing of any such action or proceeding
in such respective jurisdictions.

 

(b) Nothing contained in this Section 11.12 shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against the
Borrower or any other Loan Party in any other jurisdiction.

 

(c) If for the purposes of obtaining judgment in any court it is necessary to
convert a sum due hereunder in Dollars into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase Dollars with such other
currency at the spot rate of exchange quoted by the Administrative Agent at
11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.

 

Section 11.13 Waiver of Jury Trial

 

EACH OF THE ADMINISTRATIVE AGENT, THE LENDERS AND THE BORROWER IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT.

 

Section 11.14 Marshaling; Payments Set Aside

 

None of the Administrative Agent or any Lender shall be under any obligation to
marshal any assets in favor of the Borrower or any other party or against or in
payment of any or all of the Obligations. To the extent that the Borrower makes
a payment or payments to the Administrative Agent or the Lenders or any such
Person receives payment from the proceeds of the Collateral or exercise its
right of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
right and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.

 

Section 11.15 Section Titles

 

The section titles contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto, except when used to reference a section.
Any reference to the number of a clause, sub-clause or subsection hereof
immediately followed by a reference in parenthesis to the title of the Section
containing such clause, sub-clause or subsection is a reference to such clause,
sub-clause or subsection and not to the entire Section; provided, however, that,
in case of direct conflict between the reference to the title and the reference
to the number of such Section, the reference to the title shall govern absent
manifest error. If any reference to the number of a Section (but not to any
clause, sub-clause or subsection thereof) is followed immediately by a reference
in parenthesis to the title of a Section, the title reference shall govern in
case of direct conflict absent manifest error.

 

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Section 11.16 Execution in Counterparts

 

This Agreement may be executed in any number of counterparts and by different
parties in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are attached to the same document. Delivery of an executed signature page of
this Agreement by facsimile transmission, electronic mail or by posting on the
Approved Electronic Platform shall be as effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
parties shall be lodged with the Borrower and the Administrative Agent.

 

Section 11.17 Entire Agreement

 

This Agreement, together with all of the other Loan Documents and all
certificates and documents delivered hereunder or thereunder, embodies the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof. In the event of any
conflict between the terms of this Agreement and any other Loan Document, the
terms of this Agreement shall govern.

 

Section 11.18 Confidentiality

 

Each Lender and the Administrative Agent agree to use all reasonable efforts to
keep information obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender’s or the Administrative Agent’s, as
the case may be, customary practices and agrees that it shall only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any such information other than (a) to such Lender’s or the
Administrative Agent’s, as the case may be, employees, representatives,
advisors, attorneys and agents that are or are expected to be involved in the
evaluation of such information in connection with the transactions contemplated
by this Agreement and are advised of the confidential nature of such
information, (b) to the extent such information presently is or hereafter
becomes available to such Lender or the Administrative Agent, as the case may
be, on a non-confidential basis from a source other than the Borrower or any
other Loan Party, (c) to the extent disclosure is required by law, regulation or
judicial order or requested or required by bank regulators or auditors or (d) to
current or prospective pledgees, assignees, participants and Special Purpose
Vehicle grantees of any option described in Section 11.2(f) (Assignments and
Participations), contractual counterparties in any Hedging Contract permitted
hereunder and to their respective legal or financial advisors, in each case and
to the extent such pledgees, assignees, participants, grantees or counterparties
agree to be bound by, and to cause their advisors to comply with, the provisions
of this Section 11.18. Notwithstanding any other provision in this Agreement,
the Administrative Agent hereby agrees that the Borrower (and each of its
officers, directors, employees, accountants, attorneys and other advisors) may
disclose to any and all persons of any kind, the U.S. tax treatment and U.S. tax
structure of the Term Loan Facility and the transactions contemplated hereby and
all materials of any kind (including opinions and other tax analyses) that are
provided to it relating to such U.S. tax treatment and U.S. tax structure.

 

[Signature Pages Follow]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

KNOLOGY, INC.,        as Borrower By:  

 

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

Name:     Title:     CREDIT SUISSE, CAYMAN ISLANDS BRANCH,

       as Administrative Agent, Collateral Agent

       and a Lender

By:  

 

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Name:     Title:     By:  

 

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

Name:     Title:    

 

[SIGNATURE PAGE TO KNOLOGY, INC. CREDIT AGREEMENT]