As Amended Through January 18, 2001

AOL TIME WARNER INC.
1994 STOCK OPTION PLAN

1. PURPOSE OF THE PLAN

The purpose of the AOL Time Warner Inc. 1994 Stock Option Plan (hereinafter the "Plan") is to provide for the granting of nonqualified stock options and stock appreciation rights to certain employees of and consultants and advisors to the Company and its Subsidiaries in recognition of the valuable services provided, and contemplated to be provided, by such employees, consultants and advisors. The general purpose of the Plan is to promote the interests of the Company and its stockholders and to reward dedicated employees, consultants and advisors of the Company and its Subsidiaries by providing them additional incentives to continue and increase their efforts with respect to, and to remain in the employ of, the Company or its Subsidiaries.

2. CERTAIN DEFINITIONS

The following terms (whether used in the singular or plural) have the meanings indicated when used in the Plan:

(a) "Agreement" means the stock option agreement and stock appreciation rights agreement specified in Section 12, both individually and collectively, as the context so requires.

(b) "Affiliate" means any corporation, company or other entity whose financial results are consolidated with those of the Company in accordance with U.S. generally accepted accounting principles.

(c) "AOL Time Warner" means AOL Time Warner Inc., a Delaware corporation, and any successor thereto.

(d) "Approved Transaction" means any transaction in which the Board (or, if approval of the Board is not required as a matter of law, the stockholders of the Company) shall approve (i) any consolidation or merger of the Company in which the

Company is not the continuing or surviving corporation or pursuant to which shares of Common Stock would be converted into cash, securities or other property, other than (x) a merger of Time Warner as contemplated in the Amended and Restated Agreement and Plan of Merger dated as of September 22, 1995 among Time Warner, TW Inc., Time Warner Acquisition Corp., TW Acquisition Corp. and Turner Broadcasting System, Inc., as the same may be amended from time to time, or (y) a merger of the Company in which the holders of Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (ii) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or (iii) the adoption of any plan or proposal for the liquidation or dissolution of the Company.

(e) "Award" means grants of Options and/or SARs under this Plan.

(f) "Board" means the Board of Directors of the Company.

(g) "Board Change" means, during any period of two consecutive years, individuals who at the beginning of such period constituted the entire Board ceased for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period.

(h) "Change in Control" means either a Corporate Change in Control or a Transactional Change in Control.

(i) "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute or statutes thereto. Reference to any specific Code section shall include any successor section.

(j) "Committee" means the Committee appointed pursuant to
Section 4.

(k) "Common Stock" means the common stock, par value $.01 per share, of the Company.

(l) "Company" means (i) with respect to periods prior to January 11, 2001, Time Warner and (ii) with respect to periods on and after January 11, 2001, AOL Time Warner.

(m) "Composite Tape" means the New York Stock Exchange Composite Tape.

(n) "Control Purchase" means any transaction in which any person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than the Company or any employee benefit plan sponsored by the Company or any of its Subsidiaries) (i) shall purchase any Common Stock (or securities convertible into Common Stock) for cash, securities or any other consideration pursuant to a tender offer or exchange offer, without the prior consent of the Board, or (ii) shall become the "beneficial owner" (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the then outstanding securities of the Company ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election of directors (calculated as provided in Rule 13d-3(d) in the case of rights to acquire the Company's securities).

(o) "Corporate Change in Control" means the happening of any of the following events:

(1) the acquisition by any individual, entity or group (an "Entity"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or
(ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); excluding, however, the following: (A) any acquisition directly from the Company (excluding any acquisition by virtue of the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was itself acquired directly from the Company), (B) any acquisition by the Company, or (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or by any corporation controlled by the Company; or

(2) a change in the composition of the Board since January 12, 2001, such that the individuals who, as of such date, constituted the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the

Company subsequent to January 12, 2001 whose election, or nomination for election by the stockholders of the Company, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any person or Entity other than the Board shall not be deemed a member of the Incumbent Board.

(p) "Effective Date" means the date the Plan becomes effective pursuant to Section 15.

(q) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute or statutes thereto. Reference to any specific Exchange Act section shall include any successor section.

(r) "Fair Market Value" of a share of Common Stock means the average of the high and low sales prices of a share of Common Stock on the New York Stock Exchange on the date in question, except as otherwise provided in Section 6.5.

(s) "General SARs" means stock appreciation rights subject to the terms of Section 6.5(b).

(t) "Holder" means an employee of or a consultant or advisor to the Company or any of its Subsidiaries who has received an Award under this Plan.

(u) "Involuntary Employment Action" means any change in the terms and conditions of the Holder's employment with the Company or any successor, without cause (as defined herein), to such extent that:

(1) the Holder shall fail to be vested with power, authority and resources analogous to the Holder's title and/or office prior to the Change in Control, or

(2) the Holder shall lose any significant duties or responsibilities attending such office, or

(3) there shall occur a reduction in the Holder's base compensation or

(4) the Holder's employment with the Company, or its successor, is terminated without cause (as defined herein).

(v) "Limited SARs" means stock appreciation rights subject to the terms of Section 6.5(c).

(w) "Minimum Price Per Share" means the highest gross price (before brokerage commissions, soliciting dealers' fees and similar charges) paid or to be paid for any share of Common Stock (whether by way of exchange, conversion, distribution, liquidation or otherwise) in, or in connection with, any Approved Transaction or Control Purchase which occurs at any time during the period beginning on the sixtieth day prior to the date on which Limited SARs are exercised and ending on the date on which Limited SARs are exercised. If the consideration paid or to be paid in any such Approved Transaction or Control Purchase shall consist, in whole or in part, of consideration other than cash, the Board shall take such action, as in its judgment it deems appropriate, to establish the cash value of such consideration, but such valuation shall not be less than the value, if any, attributed to such consideration by any other party to such Approved Transaction or Control Purchase.

(x) "Option" means any nonqualified stock option granted pursuant to this Plan.

(y) "Plan" has the meaning ascribed thereto in Section 1.

(z) "SARs" means General SARs and Limited SARs.

(aa) "SEC" means the Securities and Exchange Commission.

(bb) "Subsidiary" of a person means any present or future subsidiary of such person as such term is defined in section 425 of the Code and any present or future trade or business, whether or not incorporated, controlled by or under common control with such person. An entity shall be deemed a Subsidiary of a person only for such periods as the requisite ownership or control relationship is maintained.

(cc) "Survivors" means a deceased Holder's legal representatives and/or any person or persons who acquired the Holder's rights to an Option by will or by the laws of descent and distribution.

(dd) "Time Warner Inc." means Time Warner Inc., a Delaware corporation.

(ee) "Total Disability" or "Disability" means a permanent and total disability as defined in section 22(e)(3) of the Code.

(ff) "Transactional Change in Control" means any of the following transactions to which the Company is a party:

(1) a reorganization, recapitalization, merger or consolidation (a "Corporate Transaction") of the Company, unless securities representing 60% or more of either the outstanding shares of common stock or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company or the corporation resulting from such Corporate Transaction (or the parent of such corporation) are held subsequent to such transaction by the person or persons who were the beneficial holders of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction, in substantially the same proportions as their ownership immediately prior to such Corporate Transaction; or

(2) the sale, transfer or other disposition of all or substantially all of the assets of the Company.

3. STOCK SUBJECT TO THE PLAN

3.1. Number of Shares. Subject to the provisions of Section 12 and this
Section 3, the maximum number of shares of Common Stock in respect of which Awards may be granted is (x) 1.5 (one and one-half) times the sum of (a) 1.5% (one and one-half percent) of the number of shares of Common Stock outstanding on December 31, 1993, (b) 1.25% (one and one-quarter percent) of the number of shares of Common Stock outstanding on December 31, 1994, (c) 1% (one percent) of the number of shares of Common Stock outstanding on December 31, 1995, (d) 1.2% (one and two-tenths percent) of the aggregate number of shares of Common Stock and Series LMCN-V Common Stock, par value $.01 per share, outstanding on December 31, 1996, (e) 1.4% (one and four-tenths percent) of the aggregate number of shares of Common Stock and Series LMCN-V Common Stock, par value $.01 per share, outstanding on December 31, 1997, (f) 1.05% (one and five-hundredths percent) of the aggregate number of shares of Common Stock and Series LMCN-V Common Stock, par value $.01 per share, outstanding on December 31, 1998, (g) 1.175% (one and one hundred seventy five thousandths percent) of the aggregate number of shares of Common Stock and Series LMCN-V Common Stock, par value

$.01 per share, outstanding on December 31, 1999, and (h) two million, plus (y) 178,100,000. If and to the extent that an Option shall expire, terminate or be canceled for any reason without having been exercised (or without having been considered to have been exercised as provided in Section 6.5(a)), the shares of Common Stock subject to such expired, terminated or canceled portion of the Option shall again become available for purposes of the Plan.

3.2. Character of Shares. Shares of Common Stock deliverable under the terms of the Plan may be, in whole or in part, authorized and unissued shares of Common Stock or issued shares of Common Stock held in the Company's treasury, or both.

3.3. Reservation of Shares. The Company shall at all times reserve a number of shares of Common Stock (authorized and unissued Common Stock, issued Common Stock held in the Company's treasury, or both) equal to the maximum number of shares that may be subject to outstanding Awards and future Awards under the Plan.

4. ADMINISTRATION

4.1. Powers. The Plan shall be administered by the Board. Subject to the express provisions of the Plan, the Board shall have plenary authority, in its discretion, to grant Awards under the Plan and to determine the terms and conditions (which need not be identical) of all Awards so granted, including without limitation, (a) the individuals to whom, and the time or times at which, Awards shall be granted or awarded, (b) the number of shares to be subject to each Award, (c) when an Option or SAR can be exercised and whether in whole or in installments, and (d) the form, terms and provisions of any Agreement (which terms may be amended, subject to Section 14).

4.2. Factors to Consider. In making determinations hereunder, the Board may take into account the nature of the services rendered by the respective employees, consultants or advisors, their dedication and past contributions to the Company and its Subsidiaries, their present and potential contributions to the success of the Company and its Subsidiaries and such other factors as the Board in its discretion shall deem relevant.

4.3. Interpretation. Subject to the express provisions of the Plan, the Board shall have plenary authority to interpret the Plan, to prescribe, amend and rescind the rules and regulations relating to it and to make all other determinations deemed necessary or advisable for the administration of the Plan. The determinations of the Board on the matters referred to in this Section 4 shall be conclusive. The Board's determinations under the Plan need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive,

Awards under the Plan (whether or not such persons are similarly situated). Without limiting the generality of the foregoing, the Board shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Agreements as to (a) the persons to receive Awards under the Plan, (b) the terms and provisions of Awards under the Plan and
(c) whether a termination of service with the Company or any Subsidiary or Affiliate has occurred.

4.4. Delegation to Committee. Notwithstanding anything to the contrary contained herein, the Board may at any time, or from time to time, appoint a Committee and delegate to such Committee the authority of the Board to administer the Plan, including to the extent provided by the Board, the power to further delegate such authority. Upon such appointment and delegation, any such Committee shall have all the powers, privileges and duties of the Board in the administration of the Plan to the extent provided in such delegation, except for the power to appoint members of the Committee and to terminate, modify or amend the Plan. The Board may from time to time appoint members of any such Committee in substitution for or in addition to members previously appointed, may fill vacancies in such Committee and may discharge such Committee.

Any such Committee shall select one of its members as its chairman and shall hold its meetings at such times and places as it shall deem advisable. A majority of members shall constitute a quorum and all determinations shall be made by a majority of such quorum. Any determination reduced to writing and signed by all of the members shall be fully as effective as if it had been made by a majority vote at a meeting duly called and held.

5. ELIGIBILITY

Prior to January 18, 2001, Awards may be made only to (a) employees of the Company or any of its Subsidiaries (including officers and directors of any of the Company's Subsidiaries), other than officers or directors of the Company who are subject to Section 16 of the Exchange Act, (b) prospective employees of the Company or any of its Subsidiaries and (c) consultants or advisors to the Company or any of its Subsidiaries. On or after January 18, 2001, Awards may be made only to (a) employees of the Company or any of its Affiliates (including officers and directors of any of the Company's Affiliates), other than officers and directors of the Company who are subject to Section 16 of the Exchange Act,
(b) prospective employees of the Company or any of its Affiliates and (c) consultants to the Company or any of its Affiliates. The exercise of Options and SARs granted to a prospective employee shall be conditioned upon such person becoming an employee of the Company or any of its Subsidiaries or Affiliates, as the case may be. For purposes of the Plan, the term "prospective employee"

shall mean any person who holds an outstanding offer of employment on specific terms from the Company or any of its Subsidiaries or Affiliates, as the case may be. Only employees designated by the Board to be eligible to be granted one or more Options or SARs under the Plan shall be eligible to receive Awards and "employee" shall not include any person who is not on the payroll of the Company as a full-time or part-time employee (regardless of whether a government agency, court or other entity subsequently determines that such person is an employee of the Company or any of its Subsidiaries or Affiliates for purposes of employment taxes, benefits or any other purpose). Awards may be made to employees, consultants and advisors who hold or have held Awards under this Plan or any similar or other awards under any other plan of the Company or its Subsidiaries or Affiliates, as the case may be.

6. OPTIONS AND SARS

6.1. Option Prices. The purchase price of the Common Stock under each Option shall be determined by the Board and set forth in the applicable Agreement, but shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant.

6.2. Term of Options. The term of each Option shall be for such period as the Board shall determine, as set forth in the applicable Agreement.

6.3. Exercise of Options. An Option granted under the Plan shall become (and remain) exercisable during the term of the Option to the extent provided in the applicable Agreement and this Plan and, unless the Agreement otherwise provides, may be exercised to the extent exercisable, in whole or in part, at any time and from time to time during such term; provided, however, that subsequent to the grant of an Option, the Board, at any time before complete termination of such Option, may accelerate the time or times at which such Option may be exercised in whole or in part (without reducing the term of such Option). The Agreement may contain conditions precedent to the exercisability of Options, including without limitation, the achievement of minimum performance criteria.

6.4. Manner of Exercise. Payment of the Option purchase price shall be made in cash or in whole shares of Common Stock already owned by the person exercising an Option or, partly in cash and partly in such Common Stock; provided, however, that such payment may be made in whole or in part in shares of Common Stock only if and to the extent permitted by the applicable Agreement. An Option shall be exercised by written notice to the Company upon such terms and conditions as provided in the Agreement. The Company shall effect the transfer of the shares of Common Stock purchased under the Option as soon as practicable, and within a reasonable time thereafter such transfer shall be evidenced on the books of the Company. No

Holder or other person exercising an Option shall have any of the rights of a stockholder of the Company with respect to shares of Common Stock subject to an Option granted under the Plan until due exercise and full payment has been made. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date of such due exercise and full payment.

6.5. SARs. (a) General Conditions. The Board may (but shall not be obligated to) grant General SARs and/or Limited SARs pursuant to the provisions of this Section 6.5 to a Holder of any Option (hereinafter called a "related Option"), with respect to all or a portion of the shares of Common Stock subject to the related Option.

A SAR may be granted either concurrently with the grant of the related Option or at any time thereafter prior to the complete exercise, termination, expiration or cancellation of such related Option. Subject to the terms and provisions of this Section 6.5, each SAR shall be exercisable to the extent the related Option is then exercisable (and may be subject to such additional limitations on exercisability as the Agreement may provide), and in no event after the complete termination or full exercise of the related Option. SARs shall be exercisable in whole or in part upon notice to the Company upon such terms and conditions as provided in the Agreement.

Upon the exercise of SARs, the related Option shall be considered to have been exercised to the extent of the number of shares of Common Stock with respect to which such SARs are exercised and shall be considered to have been exercised to that extent for purposes of determining the number of shares of Common Stock in respect of which other Awards may be granted. Upon the exercise or termination of the related Option, the SARs with respect thereto shall be considered to have been exercised or terminated to the extent of the number of shares of Common Stock with respect to which the related Option was so exercised or terminated.

The provisions of Sections 4 and 6 through 21 (to the extent that such provisions are applicable to Options) shall also be applicable to SARs unless the context otherwise requires.

(b) General SARs. General SARs shall be exercisable only at the time the related Option is exercisable and subject to the terms and provisions of this Section 6.5, upon the exercise of General SARs, the person exercising the General SAR shall be entitled to receive consideration (in the form hereinafter provided) equal in value to the excess of the Fair Market Value on the date of exercise of the shares of Common Stock with respect to which such General SARs have been exercised over the aggregate related Option purchase price for such shares; provided, however, that the Board may, in any Agreement granting General SARs

provide that the appreciation realizable upon exercise thereof shall be measured from a base higher than the related Option purchase price.

Upon the exercise of a General SAR, the person exercising the General SAR may specify the form of consideration to be received by such person exercising the General SAR, which shall be in shares of Common Stock (valued at Fair Market Value on the date of exercise of such General SAR), or in cash, or partly in cash and partly in shares of Common Stock. Any election by the person exercising the General SAR to receive cash in full or partial settlement of such General SAR shall comply with all applicable laws and shall be subject to the discretion of the Board to settle General SARs only in shares of Common Stock if necessary or advisable in the judgment of the Board to preserve pooling of interests accounting treatment for any proposed transaction involving the Company. Unless otherwise specified in the applicable Agreement, the number of General SARs which may be exercised for cash, or partly for cash and partly for shares of Common Stock, during any calendar quarter, may not exceed 20% of the aggregate number of shares of Common Stock originally subject to the related Option (as such original number, without giving effect to the exercise of any portion of the related Option, shall have been retroactively adjusted in accordance with Section 13 or any corresponding provisions of an applicable Agreement).

For purposes of this Section 6.5, the date of exercise of a General SAR shall mean the date on which the Company shall have received notice from the person exercising the General SAR of the exercise of such General SAR.

(c) Limited SARs. Limited SARs may be exercised only during the period
(a) beginning on the first day following either (i) the date of an Approved Transaction, (ii) the date of a Control Purchase, or (iii) the date of a Board Change, and (b) ending on the ninetieth day (or such other date specified in the Agreement) following such date. The effective date of exercise of a Limited SAR shall be deemed to be the date on which the Company shall have received notice from the person exercising the Limited SAR of the exercise thereof.

Upon the exercise of Limited SARs granted in connection with an Option, except as otherwise provided in the Agreement and the immediately succeeding sentence, the person exercising the Limited SAR shall receive in cash an amount equal to the product computed by multiplying (a) the excess of (i) the higher of (A) the Minimum Price Per Share, or (B) the highest reported closing sales price of a share of Common Stock as reported on the Composite Tape at any time during the period beginning on the sixtieth day prior to the date on which such Limited SARs are exercised and ending on the date on which such Limited SARs are exercised over (ii) the per share Option price of the related Nonqualified Stock Option, by (b) the number of shares of Common Stock with respect to which such Limited SARs are being exercised. The

Board shall have the discretion to settle Limited SARs by the delivery of Common Stock rather than cash if in the judgment of the Board such action is necessary or advisable to preserve pooling of interests accounting treatment for any proposed transaction involving the Company.

6.6. Limited Transferability of Options and SARs. Except as set forth in this Section 6.6 and Section 22, Options and SARs shall not be transferable other than by will or the laws of descent and distribution, and Options and SARs may be exercised during the lifetime of the Holder thereof only by such Holder (or his or her court appointed legal representative). The Agreement may provide that Options and SARs are transferable by gift to such persons or entities and upon such terms and conditions specified in the Agreement.

7. ACCELERATION OF OPTIONS AND SARS

7.1 Death, Disability and Total Disability. Unless the applicable Agreement provides otherwise, if a Holder's employment shall terminate by reason of Death, Disability or Total Disability, then notwithstanding any contrary waiting period or installment period in any Agreement or in the Plan, each outstanding Option or SAR granted under the Plan shall immediately become exercisable in full in respect of the aggregate number of shares covered thereby.

7.2 Approved Transaction, Board Change and Control Purchase. For Options and SARs granted prior to January 18, 2001, unless the applicable Agreement provides otherwise, each outstanding Option or SAR granted under the Plan shall immediately become exercisable in full in respect of the aggregate number of shares covered thereby in the event of any Approved Transaction, Board Change or Control Purchase.

7.3 Corporate Changes in Control. For Options and SARs granted on or after January 18, 2001, unless the applicable Agreement provides otherwise, in the event of a Corporate Change in Control,

(a) Each Option or SAR outstanding as of the date such Corporate Change in Control is determined to have occurred, and which is not then exercisable, shall automatically accelerate so that the Option or SAR shall become fully exercisable on the first to occur of (i) the date the Option or SAR becomes exercisable under its original terms (with respect only to such Options or SAR as otherwise would become exercisable during such one-year period under their terms), (ii) the first anniversary of the date such Corporate Change in Control is determined to have occurred, and (iii) the occurrence of an Involuntary Employment Action; and

(b) The Options or SARs so accelerated shall remain so exercisable until the earlier of the original expiration date of the Option or SAR and the earlier termination of the Option or SAR in accordance with the Plan and the Agreement.

7.4 Transactional Changes in Control. For Options and SARs granted on or after January 18, 2001, unless the applicable Agreement provides otherwise, in the event of a Transactional Change in Control,

(a) Each Option or SAR outstanding as of the date such Transactional Change in Control is determined to have occurred shall be (i) assumed by the successor corporation (or its parent) or replaced with a comparable option or stock appreciation right to purchase shares of the capital stock of the successor corporation (or its parent) on an equitable basis, (ii) terminated upon written notice to the Holders stating that all Options or SARs (for purposes of this clause (ii) all Options or SARs then outstanding shall be deemed to be exercisable) must be exercised within a specified number of days (which shall not be less than 15 days) from the date such notice is given, at the end of which period the Options or SARs shall terminate, or (iii) terminated in exchange for a cash payment equal to the excess of the Fair Market Value of the shares subject to such Options or SARs (for purposes of this clause (iii) all Options and SARs then outstanding shall be deemed to be exercisable) over the exercise price thereof; provided, however, that if any of the treatments of Options or SARs pursuant to this Plan set forth in clause (i), (ii) or (iii) above would make a Transactional Change in Control transaction ineligible for pooling-of-interest accounting under APB No. 16 such that but for the nature of such treatment such transaction would otherwise be eligible for such accounting treatment, the Board shall have the ability to substitute for any cash or other consideration payable under such treatment shares of Common Stock with a Fair Market Value or other consideration with value equal to the cash or other consideration that would otherwise be payable pursuant to such treatment. The determination of which of the treatments set forth in clauses (i), (ii) and
(iii) above to provide and of comparability under clause (i) above shall be made by the Board and its determinations shall be final, binding and conclusive.

(b) Each Option or SAR that is assumed or replaced in connection with a Transactional Change in Control shall automatically accelerate so that the Option or SAR shall become fully exercisable on the first to occur of (i) the date the Option or SAR becomes exercisable under its original terms (with respect only to such Options or SARs as otherwise would become exercisable during such one-year period under their terms), (ii) the first anniversary of the date such Transactional Change in Control is determined to have occurred, and (iii) the occurrence of an Involuntary Employment Action. The Options or SARs so accelerated shall remain so exercisable until the earlier of the original expiration date of the

Option or SAR and the earlier termination of the Option or SAR in accordance with the Plan and the Agreement.

7.5 Corporate Transaction. For Options and SARs granted on or after January 18, 2001, unless the applicable Agreement provides otherwise, in the event of a Corporate Transaction that does not constitute a Transactional Change in Control or in the event of a similar event, pursuant to which securities of the Company or of another corporation or entity are issued with respect to the outstanding shares of Common Stock, a Holder upon exercising an Option or SAR shall be entitled to receive for the purchase price paid under such exercise the securities which would have been received if such Option or SAR had been exercised prior to such Corporate Transaction.

7.6 Dissolution or Liquidation of the Company. Upon the dissolution or liquidation of the Company, all Awards granted under this Plan which as of such date shall not have been exercised will terminate and become null and void; provided; however, that if the rights of a Holder have not otherwise terminated and expired, (i) the Holder will have the right immediately prior to such dissolution or liquidation to exercise any Option to the extent that the Option is exercisable as of the date immediately prior to such dissolution or liquidation; and (ii) if a Change in Control shall have occurred within the twelve months immediately prior to the date of such dissolution or liquidation such Holder will have the right immediately prior to such dissolution or liquidation to exercises any Option then outstanding whether or not such Option is exercisable as of such date.

8. TERMINATION OF EMPLOYMENT

8.1. General. If a Holder's employment shall terminate prior to the complete exercise of an Option (or deemed exercise thereof, as provided in
Section 6.5(a)), then such Option shall thereafter be exercisable solely to the extent provided in the applicable Agreement; provided, however, that, unless the applicable Agreement provides otherwise, (a) no Option may be exercised after the scheduled expiration date of such Option; (b) if the Holder's employment terminates by reason of Death, Disability or Total Disability, the Option shall remain exercisable for a period of at least one year following such termination (but not later than the scheduled expiration of such Option); and (c) any termination by the employing company for cause will be treated in accordance with the provisions of Section 8.2.

8.2. Termination for Cause. If a Holder's employment with the Company or any of its Subsidiaries or Affiliates shall be terminated for cause by the Company or such Subsidiary or Affiliate prior to the exercise of any Option, then unless the applicable Agreement provides

otherwise, all Options held by such Holder and any permitted transferee pursuant to Section 6.6. shall terminate one month after the date of a termination for cause; provided, that if such termination for cause is for fraud, misappropriation or embezzlement, all Options shall terminate immediately. For the purposes of Options granted prior to January 18, 2001, cause (a) shall have the meaning provided for in any employment, advisory or consulting agreement to which such Holder and the Company or any Subsidiary or Affiliate are parties or
(b) in the absence thereof, shall mean insubordination, dishonesty, incompetence, moral turpitude, other misconduct of any kind and the refusal to perform such Holder's duties and responsibilities for any reason other than illness or incapacity, except that if the termination occurs within 12 months after an Approved Transaction, Control Purchase or Board Change, cause under this clause (b) shall mean only a felony conviction for fraud, misappropriation or embezzlement. For purposes of Options granted on or after January 18, 2001, except as otherwise provided in the applicable Agreement, (x) cause shall have the meaning provided for in any employment or consulting agreement to which the Holder and the Company or any Subsidiary or Affiliate are parties or (y) in the absence thereof, cause shall include (and is not limited to) dishonesty with respect to the Company or any Affiliate, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information and conduct substantially prejudicial to the business of the Company or any Affiliate. For purposes of Options granted on or after January 18, 2001, cause is not limited to events which have occurred prior to a Holder's termination of service, nor is it necessary that the Board's finding of cause occur prior to termination but rather, if the Board determines, subsequent to a Holder's termination of service but prior to the exercise of an Option, that either prior or subsequent to the Holder's termination the Holder engaged in conduct which could constitute cause, then the right to exercise any Option is forfeited. The determination of the Board as to the existence of cause will be conclusive on the Holder and the Company.

8.3. Special Rule. Notwithstanding any other provision of the Plan, the Board may provide in the applicable Agreement that the Award shall become and/or remain exercisable at rates and times at variance with the rules otherwise herein set forth; provided, however, that any such Agreement provisions at variance with the exercisability rules otherwise set forth herein shall be effective only if reflected in the terms of an employment agreement approved or ratified by the Board.

8.4. Miscellaneous. The Board may determine whether any given leave of absence constitutes a termination of employment and may make other provisions in the applicable Agreement relating to leaves of absence. Awards made under the Plan shall not be affected by any change of employment so long as the Holder continues to be an employee of (a) for Options granted prior to January 18, 2001, the Company or one of its Subsidiaries and (b) for Options granted on or after January 18, 2001, the Company or one of its Affiliates.

9. RIGHT OF COMPANY TO TERMINATE EMPLOYMENT

Nothing contained in the Plan or in any Award shall confer on any Holder any right to continue in the employ of the Company or any of its Subsidiaries or Affiliates or interfere in any way with the right of the Company or a Subsidiary or Affiliate to terminate the employment of the Holder at any time, with or without cause; subject, however, to the provisions of any employment agreement between the Holder and the Company or any of its Subsidiaries or Affiliates.

10. NONALIENATION OF BENEFITS

Except as specifically provided in Section 6.6, no right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the person entitled to such benefits.

11. WRITTEN AGREEMENT

Each grant of an Option shall be evidenced by a stock option agreement and each SAR shall be evidenced by a stock appreciation rights agreement, each in such form and containing such terms and provisions not inconsistent with the provisions of the Plan as the Board from time to time shall approve; provided, however, that such Awards may be evidenced by a single agreement. The effective date of the granting of an Award shall be the date on which the Board approves such grant. Each grantee of an Option or SAR shall be notified promptly of such grant and a written Agreement shall be promptly executed and delivered by the Company and the grantee, provided that for Options granted prior to January 18, 2001, such grant of Options or SARs shall terminate if such written Agreement is not signed by such grantee (or his attorney) and delivered to the Company within 90 days after the date the Agreement is sent to such grantee for signature. Any such written Agreement may contain (but shall not be required to contain) such provisions as the Board deems appropriate to ensure that the penalty provisions of section 4999 of the Code will not apply to any stock or cash received by the Holder or such Holder's permitted transferee pursuant to Section 6.6 from the Company or any of its Subsidiaries or Affiliates.

12. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.

12.1 Options Granted Prior to January 18, 2001. The provisions of this
Section 12.1 shall apply to Options and SARs granted prior to January 18, 2001. In the event of any stock split, dividend, distribution, combination, reclassification or recapitalization that changes the character or amount of the Common Stock while any portion of any Award theretofore granted under the Plan is outstanding but unexercised, the Board shall make such adjustments in the character and number of shares subject to such Award and, in the option price, as shall be applicable, equitable and appropriate in order to make such Award, immediately after any such change, as nearly as may be practicable, equivalent to such Award, immediately prior to any such change. If any merger, consolidation or similar transaction affects the Common Stock subject to any unexercised Award theretofore granted under the Plan, the Board or any surviving or acquiring corporation shall take such action as is equitable and appropriate to substitute a new award for such Award or to assume such Award in order to make such new or assumed Award, as nearly as may be practicable, equivalent to the old Award. If any such change or transaction shall occur, the number and kind of shares for which Awards may thereafter be granted under the Plan shall be adjusted to give effect thereto.

12.2 Options Granted On or After January 18, 2001. The provisions of this Section 12.2 shall apply to Options and SARs granted on or after January 18, 2001. If (a) the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (b) additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock, the number of shares of Common Stock deliverable upon the exercise of an Option or SAR may be appropriately increased or decreased proportionately, and appropriate adjustments may be made in the purchase price per share to reflect such subdivision, combination or stock dividend. The number of Shares subject to options to be granted pursuant to Section 3 of the Plan shall also be proportionately adjusted upon the occurrence of such events, except as the Board shall otherwise determine in its sole discretion.

13. RIGHT OF FIRST REFUSAL

The Agreements may contain such provisions as the Board shall determine to the effect that if a Holder, or such other person exercising an Option, elects to sell all or any shares of Common Stock that such Holder or other person acquired upon the exercise of an Option

awarded under the Plan, then such Holder or other person shall not sell such shares unless such Holder or other person shall have first offered in writing to sell such shares to the Company at Fair Market Value on a date specified in such offer (which date shall be at least three business days and not more than 10 business days following the date of such offer). In any such event, certificates (or other evidence of ownership) representing shares issued upon exercise of Options shall bear a restrictive legend to the effect that transferability of such shares are subject to the restrictions contained in the Plan and the applicable Agreement and the Company may cause the registrar of its Common Stock to place a stop transfer order with respect to such shares.

14. TERMINATION AND AMENDMENT

14.1. General. Unless the Plan shall theretofore have been terminated as hereinafter provided, no Awards may be made under the Plan on or after the tenth anniversary of the Effective Date. The Board may at any time prior to the tenth anniversary of the Effective Date terminate the Plan, and the Board may at any time modify or amend the Plan in such respects as it shall deem advisable; provided, however, that any such modification or amendment shall comply with all applicable laws and stock exchange listing requirements.

14.2. Modification. (a) The following provisions shall apply to Options and SARs granted prior to January 18, 2001. No termination, modification or amendment of the Plan may, without the consent of the person to whom any Award shall theretofore have been granted (or a transferee of such person if the Award, or any part thereof, has been transferred pursuant to Section 6.6), adversely affect the rights of such person with respect to such Award. No modification, extension, renewal or other change in any Award granted under the Plan shall be made after the grant of such Award, unless the same is consistent with the provisions of the Plan. With the consent of the Holder (or a transferee of such Holder if the Award, or any part thereof, has been transferred pursuant to Section 6.6) and subject to the terms and conditions of the Plan (including
Section 14.1), the Board may amend outstanding Agreements with any Holder (or any such transferee), including, without limitation, any amendment which would
(a) accelerate the time or times at which the Award may be exercised and/or (b) extend the scheduled expiration date of the Award. Without limiting the generality of the foregoing, the Board may but solely with the Holder's consent, agree to cancel any Award under the Plan held by such Holder and issue a new Award in substitution therefor, provided that the Award so substituted shall satisfy all of the requirements of the Plan as of the date such new Award is made.

(b) The following provisions shall apply to Options and SARs granted on or after January 18, 2001. The Plan may be amended by the Board, including, without limitation, to the extent necessary to qualify any or all outstanding Options granted under the Plan or Options to be granted under the Plan for favorable federal income tax treatment (including deferral of taxation upon exercise), for as long as the Company has a class of stock registered pursuant to Section 12 of the 1934 Act and to the extent necessary to qualify the shares issuable upon exercise of any outstanding Options granted, or Options to be granted, under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers. Any termination, modification or amendment of the Plan shall not, without the consent of a Holder (or a transferee of such Holder if the Award, or any part thereof, has been transferred pursuant to Section 6.6) materially adversely affect his or her rights under an Option or SAR previously granted to him or her. With the consent of the

affected Holder or any such transferee, the Board may amend outstanding Agreements in a manner which may be materially adverse to the Holder but which is not inconsistent with the Plan. In the discretion of the Board, outstanding Agreements may be amended by the Board in a manner which is not materially adverse to the Holder or any such transferee.

15. EFFECTIVENESS OF THE PLAN

The Plan shall become effective on November 18, 1993.

16. GOVERNMENT AND OTHER REGULATIONS

The obligation of the Company with respect to Awards shall be subject to all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the effectiveness of any registration statement required under the Securities Act of 1933, and the rules and regulations of any securities exchange on which the Common Stock may be listed. For so long as the Common Stock is registered under the Exchange Act, the Company shall use its reasonable efforts to comply with any legal requirements (a) to maintain a registration statement in effect under the Securities Act of 1933 with respect to all shares of Common Stock that may be issued to Holders under the Plan, and (b) to file in a timely manner all reports required to be filed by it under the Exchange Act.

17. WITHHOLDING

The Company's obligation to deliver shares of Common Stock or pay cash in respect of any Award under the Plan shall be subject to applicable federal, state and local tax withholding requirements. Federal, state and local withholding taxes paid upon the exercise of any Option may be paid in shares of Common Stock upon such terms and conditions as the Board shall determine; provided, however, that the Board in its sole discretion may disapprove such payment and require that such taxes be paid in cash.

18. SEPARABILITY

If any of the terms or provisions of this Plan conflict with the requirements of applicable law, then such terms or provisions shall be deemed inoperative to the extent necessary to avoid the conflict with applicable law without invalidating the remaining provisions hereof.

19. NON-EXCLUSIVITY OF THE PLAN

The adoption of the Plan by the Board shall not be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options and the awarding of stock and cash otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

20. EXCLUSION FROM PENSION AND PROFIT-SHARING COMPUTATION

By acceptance of an Award, each Holder shall be deemed to have agreed that such Award is special incentive compensation that will not be taken into account, in any manner, as salary, compensation or bonus in determining the amount of any payment under any pension, retirement or other employee benefit plan of the Company or any of its Subsidiaries or Affiliates. In addition, each beneficiary of a deceased Holder shall be deemed to have agreed that such Award will not affect the amount of any life insurance coverage, if any, provided by the Company or any of its Subsidiaries or Affiliates on the life of the Holder which is payable to such beneficiary under any life insurance plan covering employees of the Company or any of its Subsidiaries or Affiliates.

21. GOVERNING LAW

The Plan shall be governed by, and construed in accordance with, the laws of the State of New York.

22. BENEFICIARIES

Each Holder may designate any person(s) or legal entity(ies), including his or her estate, as his or her beneficiary under the Plan. Such designation shall be made in writing on a form filed with the Secretary of the Company or his or her designee and may be revoked or changed by such Holder at any time by filing written notice of such revocation or change with the Secretary of the Company or his or her designee. If no person shall be designated by a Holder as his or her beneficiary or if no person designated as a beneficiary survives such Holder, the Holder's beneficiary shall be his or her estate.

23. DEFERRAL OF OPTIONS GAINS

The Agreement may contain terms, conditions and procedures permitting Holders to elect to defer the receipt of shares of Common Stock upon the exercise of Options for a specific period or until a specified event.

As amended through January 18, 2001

AOL TIME WARNER INC.

1999 STOCK PLAN

1. PURPOSES OF THE PLAN.

The Plan is intended to encourage ownership of Shares by Key Employees and directors of and certain consultants to the Company or its Affiliates in order to attract and retain such people, to motivate them to work for the benefit of the Company or an Affiliate, and to provide an additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs and Non-Qualified Options and awards of Stock Purchase Rights.

2. DEFINITIONS.

Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this AOL Time Warner Inc. 1999 Stock Plan, have the following meanings:

Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the Administrator means the Committee.

Affiliate, with respect to ISOs, means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect, and, with respect to Non-Qualified Options, means any corporation, company or other entity whose financial results are consolidated with those of the Company in accordance with U.S. generally accepted accounting principles, all as determined by the Administrator.

Board of Directors means the Board of Directors of the Company.

Change in Control means either a Corporate Change in Control or a Transactional Change in Control.

Code means the United States Internal Revenue Code of 1986, as amended.

Committee means the Compensation Committee of the Board of Directors, or its successor, or such other committee of the Board of Directors to which the Board

of Directors has delegated power to act under or pursuant to the provisions of the Plan or a subcommittee of the Compensation Committee established by the Compensation Committee.

Common Stock means shares of the Company's common stock, $.01 par value per share.

Company means (i) with respect to the periods prior to January 11, 2001, America Online, Inc., a Delaware corporation and (ii) with respect to periods on and after January 11, 2001, AOL Time Warner Inc., a Delaware corporation.

Corporate Change in Control means the happening of any of the following events:

(1) the acquisition by any individual, entity or group (an "Entity"), including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); excluding, however, the following: (A) any acquisition directly from the Company (excluding any acquisition by virtue of the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was itself acquired directly from the Company), (B) any acquisition by the Company, or (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or by any corporation controlled by the Company; or

(2) a change in the composition of the Board of Directors since October 28, 1999, such that the individuals who, as of such date, constituted the Board of Directors (the "Incumbent Board") cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the Company subsequent to October 28, 1999 whose election, or nomination for election by the Company's stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any person or Entity other than the Board shall not be deemed a member of the Incumbent Board.

Disability or Disabled means permanent and total disability as defined in Section 22(e)(3) of the Code.

Fair Market Value of a Share of Common Stock means:

(1) If the Common Stock is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly reported for the Common Stock, the average of the high and low sales prices of a share of the Common Stock on the New York Stock Exchange or other comparable reporting system for the applicable date, or if the applicable date is not a trading day, the trading day immediately preceding the applicable date;

(2) If the Common Stock is not traded on a national securities exchange but is traded on the over-the-counter market, if sales prices are not regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in the over-the-counter market on the applicable date, or if the applicable date is not a trading day, on the trading day immediately preceding the applicable date; and

(3) If the Common Stock is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the Administrator, in good faith, shall determine.

Involuntary Employment Action shall mean any change in the terms and conditions of the Participant's employment with the Company or any successor, without cause (as defined herein), to such extent that:

(1) the Participant shall fail to be vested with power, authority and resources analogous to the Participant's title and/or office prior to the Change in Control, or

(2) the Participant shall lose any significant duties or responsibilities attending such office, or

(3) there shall occur a reduction in the Participant's base compensation, or

(4) the Participant's employment with the Company, or its successor, is terminated without cause (as defined herein).

ISO means an option meant to qualify as an incentive stock option under
Section 422 of the Code.

Key Employee means an employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Options or Stock Purchase Rights under the Plan; provided however, that Key Employee shall not include any person who: (i) is not on the payroll of the Company or an Affiliate as a full-time or part-time employee or

directly or indirectly provides services to the Company or an Affiliate pursuant to a contractual or other arrangement, written or otherwise between the Company or an Affiliate and either that person or a third party, which does not designate such person as an employee (regardless of whether a government agency, court or other entity subsequently determines that such person is an employee of the Company or an Affiliate for purposes of employment taxes or for any other purpose). Anything in the prior sentence to the contrary notwithstanding, a person who is providing services pursuant to a contractual or other arrangement may be eligible for participation in the Plan as a consultant who is designated by the Administrator in accordance with Paragraph 5 of the Plan.

Non-Qualified Option means an option which is not intended to qualify as an ISO.

Option means an ISO or Non-Qualified Option granted under the Plan.

Option Agreement means an agreement between the Company and a Participant delivered pursuant to the Plan, in such form as the Administrator shall approve.

Participant means a Key Employee, director or consultant of the Company or of an Affiliate to whom one or more Options are granted under the Plan. As used herein, "Participant" shall include "Participant's Survivors" where the context requires.

Plan means this AOL Time Warner Inc. 1999 Stock Plan.

Restricted Stock means shares of Common Stock acquired pursuant to a grant of Stock Purchase Rights under Paragraph 14 below.

Restricted Stock Purchase Agreement means a written agreement between the Company and a Participant evidencing the terms and restrictions applying to stock purchased under a Stock Purchase Right, in such form as the Administrator shall approve.

Shares means shares of the Common Stock as to which Options or Stock Purchase Rights have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued upon exercise of Options or Stock Purchase Rights granted under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.

Stock Purchase Right means the right to purchase Common Stock pursuant to Paragraph 14 of the Plan, as evidenced by a Restricted Stock Purchase Agreement.

Survivors means a deceased Participant's legal representatives and/or any person or persons who acquired the Participant's rights to an Option or Stock Purchase Right by will or by the laws of descent and distribution.

Transactional Change in Control shall mean any of the following transactions to which the Company is a party:

(1) a reorganization, recapitalization, merger or consolidation (a "Corporate Transaction") of the Company, unless securities representing 60% or more of either the outstanding shares of common stock or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company or the corporation resulting from such Corporate Transaction (or the parent of such corporation) are held subsequent to such transaction by the person or persons who were the beneficial holders of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction, in substantially the same proportions as their ownership immediately prior to such Corporate Transaction; or

(2) the sale, transfer or other disposition of all or substantially all of the assets of the Company.

To Vest means that you have obtained a contingent right to exercise or purchase a defined number of your stock options, as defined by and subject to the terms and conditions set forth in the pertinent Option Agreement and this Plan. Unless and until your stock options Vest pursuant to the terms of the pertinent Option Agreement and this Plan, as well as the vesting schedule included in your notice of grant, you have not obtained any such right to exercise or purchase any of your unvested stock options (except as may be provided in Paragraphs 12 and 13 of this Plan and in the pertinent Option Agreement in the event of Participant's Disability or death, respectively).

3. SHARES SUBJECT TO THE PLAN.

The number of Shares which may be issued from time to time pursuant to this Plan shall be 100,000,000 or the equivalent of such number of Shares after the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 17 of the Plan. No more than 5% of such number of Shares may be issued in connection with grants of Stock Purchase Rights.

If an Option ceases to be "outstanding", in whole or in part, the Shares which were subject to such Option shall be available for the granting of other Options under the Plan. Any Option shall be treated as "outstanding" until such Option is exercised in full, or terminates or expires under the provisions of the Plan, or by agreement of the parties to the pertinent Option Agreement. Shares that have actually been issued under the Plan upon exercise of a Stock

Purchase Right shall not be returned to the Plan and shall not become available for the granting of other Options or Stock Purchase Rights under the Plan.

4. ADMINISTRATION OF THE PLAN.

Subject to the provisions of the Plan, the Administrator is authorized to:

a. Interpret the provisions of the Plan or of any Option, Option Agreement, Stock Purchase Right, or Restricted Stock Purchase Agreement and to make all rules and determinations which it deems necessary or advisable for the administration of the Plan;

b. Determine which employees of the Company or of an Affiliate shall be designated as Key Employees and which of the Key Employees, directors and consultants shall be granted Options or Stock Purchase Rights;

c. Determine the number of Shares for which an Option, Options or Stock Purchase Rights shall be granted, provided, however, that in no event shall Options or Stock Purchase Rights to purchase more than 4,000,000 Shares be granted to any Participant in any fiscal year;

d. Specify the terms and conditions upon which an Option, Options or Stock Purchase Rights may be granted; and

e. Award Options or Stock Purchase Rights to Participants who are foreign nationals or employed or located outside the United States, or both, on such terms and conditions, including imposing conditions on the exercise or Vesting of Options or Stock Purchase Rights, different from those applicable to Options or Stock Purchase Rights granted to Participants employed or located in the United States as may, in the judgment of the Administrator, be necessary or desirable in order to recognize differences in local law, tax policy or customs;

provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of preserving the tax status under Section 422 of the Code of those Options which are designated as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Option or Stock Purchase Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. The Administrator's determinations under the Plan need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Options or Stock Purchase Rights under the Plan (whether or not such persons are similarly situated). Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Option Agreements or Restricted Stock Purchase Agreements as to (a) the persons to receive Options or Stock Purchase Rights under the Plan, (b) the terms and

provisions of Options or Stock Purchase Rights under the Plan, and (c) whether a termination of service with the Company and any Affiliate has occurred.

No member of the Board of Directors or the Administrator shall be liable for any action or determination made in good faith with respect to the Plan or any Option.

5. ELIGIBILITY FOR PARTICIPATION.

The Administrator will, in its sole discretion, name the Participants in the Plan, provided, however, that each Participant must be a Key Employee, director or consultant of the Company or of an Affiliate at the time an Option or Stock Purchase Right is granted. Members of the Company's Board of Directors who are not employees of the Company or of an Affiliate may receive Options or Stock Purchase Rights pursuant to Paragraph 6, Subparagraph A (f), but only pursuant thereto. Notwithstanding any of the foregoing provisions, the Administrator may authorize the grant of an Option or Stock Purchase Right to a person not then a Key Employee, director or consultant of the Company or of an Affiliate. The actual grant of such Option or Stock Purchase Right, however, shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Option Agreement or Restricted Stock Purchase Agreement evidencing such Option or Stock Purchase Right, as applicable. ISOs may be granted only to Key Employees. Non-Qualified Options may be granted to any Key Employee, director or consultant of the Company or an Affiliate. Stock Purchase Rights shall be granted only in connection with the hiring or retention of a Key Employee. The granting of any Option or Stock Purchase Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Options or Stock Purchase Rights.

6. TERMS AND CONDITIONS OF OPTIONS.

Each Option shall be set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions as the Administrator may deem appropriate including, without limitation, subsequent approval by the stockholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the following terms and conditions:

A. Non-Qualified Options: Each Option intended to be a Non-Qualified Option shall be subject to the terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards for any such Non-Qualified Option:

a. Option Price: The option price (per share) of the Shares covered by each Option shall be determined by the Administrator but shall not be less than one hundred percent (100%) of the Fair Market Value (per share) of the Shares on the date of grant of the Option.

b. Each Option Agreement shall state the number of Shares to which it pertains;

c. Each Option Agreement shall state the date or dates on which it first is exercisable and the date after which it may no longer be exercised, and may provide that the Option rights Vest or become exercisable in installments over a period of months or years, or upon the occurrence of certain conditions or the attainment of stated goals or events; and

d. Exercise of any Option may be conditioned upon the Participant's execution of a stock purchase agreement in form satisfactory to the Administrator providing for certain protections for the Company and its other stockholders, including requirements that:

i. The Participant's or the Participant's Survivors' right to sell or transfer the Shares may be restricted; and

ii. The Participant or the Participant's Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions.

e. Limitation on Grant of Non-Qualified Options: No Non-Qualified Option shall be granted after the date provided in Paragraph 23 of this Plan.

f. Directors' Options: Each director of the Company who is not an employee of the Company or any Affiliate, upon first being elected or appointed to the Board of Directors, shall be granted a Non-Qualified Option to purchase 40,000 Shares; provided, however, that the Administrator shall be entitled to grant an Option for such higher number of Shares as may be appropriate (as determined by the Board of Directors) for recruitment purposes. Each director of the Company who is not an employee of the Company or any Affiliate on January 18, 2001, shall be granted on such date a Non-Qualified Option to purchase 52,000 Shares as an initial grant for joining the Board of Directors. Beginning with the annual meeting of stockholders in 2002, on the date following the annual meeting of stockholders of the Company each year, giving effect to the election of any director or directors at such annual meeting of stockholders, each director who is not an employee of the Company or any Affiliate and who has served at least six months as a director shall be granted a Non-Qualified Option to purchase 40,000 Shares. Each Option granted pursuant to this Paragraph 6(A)(f) shall (i) have an exercise price equal to the Fair Market Value
(per share) of the Shares on the date of grant of the Option, (ii) have a term of ten (10) years, and (iii) Vest in installments of 25% annually over a four-year period and on the date of a meeting of

stockholders at which directors are elected if the director does not stand for re-election or is not re-elected at such meeting, unless a different vesting schedule is established by the Administrator in the applicable Option Agreement. The Board of Directors may amend this Paragraph 6(A)(f) to increase, reduce, eliminate, or institute option grants for Board, Committee or other individual or collective service under this Plan.

B. ISOs: Each Option intended to be an ISO shall so state and shall be issued only to a Key Employee and be subject to at least the following terms and conditions, with such additional restrictions or changes as the Administrator determines are appropriate but not in conflict with
Section 422 of the Code and relevant regulations and rulings of the Internal Revenue Service:

a. Minimum standards: The ISO shall meet the minimum standards required of Non-Qualified Options, as described in Paragraph 6(A) above, except clauses (a) and (f) thereunder.

b. Option Price: Immediately before the Option is granted, if the Participant owns, directly or by reason of the applicable attribution rules in Section 424(d) of the Code:

i. Ten percent (10%) or less of the total combined voting power of all classes of stock of the Company or an Affiliate, the Option price per share of the Shares covered by each Option shall not be less than one hundred percent (100%) of the Fair Market Value per share of the Shares on the date of the grant of the Option.

ii. More than ten percent (10%) of the total combined voting power of all classes of stock of the Company or an Affiliate, the Option price per share of the Shares covered by each Option shall not be less than one hundred ten percent (110%) of the Fair Market Value on the date of grant.

c. Term of Option: For Participants who own

i. Ten percent (10%) or less of the total combined voting power of all classes of stock of the Company or an Affiliate, each Option shall terminate ten (10) years from the date of the grant or at such earlier time as the Option Agreement may provide.

ii. More than ten percent (10%) of the total combined voting power of all classes of stock of the Company or an Affiliate, each Option shall terminate five (5) years from the date of the grant or at such earlier time as the Option Agreement may provide.

d. Limitation on Yearly Exercise: The Option Agreements shall restrict the amount of Options which may be exercisable in any calendar year
(under this or any other ISO plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined at the time each ISO is granted) of the stock with respect to which ISOs are exercisable for the first time by the Participant in any calendar year does not exceed one hundred thousand dollars ($100,000), provided that this subparagraph (d) shall have no force or effect if its inclusion in the Plan is not necessary for Options issued as ISOs to qualify as ISOs pursuant to Section 422(d) of the Code.

e. Limitation on Grant of ISOs: No ISOs shall be granted after the date provided in Paragraph 23 of this Plan.

f. To the extent that an Option which is intended to be an ISO fails to so qualify, it shall be treated as a Non-Qualified Option.

7. EXERCISE OF OPTIONS AND ISSUANCE OF SHARES.

An Option (or any part or installment thereof) shall be exercised in accordance with procedures established by the Company by giving written notice to the Company at its principal executive office address, or such other address as the Company shall determine, together with provision for payment of the full purchase price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such written notice shall be signed by the person exercising the Option, shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the purchase price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Option, or (c) at the discretion of the Administrator, by delivery of the grantee's personal recourse note bearing interest payable not less than annually at no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, or (d) at the discretion of the Administrator, in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Administrator, or (e) at the discretion of the Administrator, through such other method of payment approved by the Administrator, or (f) at the discretion of the Administrator, by any combination of (a), (b), (c), (d) and (e) above. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by Section 422 of the Code.

The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant's Survivors, as the case may be). In determining what constitutes "reasonably promptly," it is expressly understood that the delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or "blue sky" laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon

delivery, be evidenced by an appropriate certificate or certificates for fully paid, non-assessable Shares.

The Administrator shall have the right to accelerate the date of exercise of any installment of any Option; provided that the Administrator shall not accelerate the exercise date of any installment of any Option granted to any Key Employee as an ISO (and not previously converted into a Non-Qualified Option pursuant to Paragraph 20) if such acceleration would violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6(B)(d).

The Administrator may, in its discretion, amend any term or condition of an outstanding Option provided (i) such term or condition as amended is permitted by the Plan, (ii) if any amendment is materially adverse to the Participant, any such amendment shall be made only with the consent of the Participant to whom the Option was granted, or in the event of the death of the Participant, the Participant's Survivors, and (iii) any such amendment of any ISO shall be made only after the Administrator, after consulting with counsel for the Company, determines whether such amendment would constitute a "modification" of any Option which is an ISO (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holder of such ISO.

8. RIGHTS AS A STOCKHOLDER.

No Participant to whom an Option has been granted shall have rights as a stockholder with respect to any Shares covered by such Option, except after due exercise of the Option and tender of the full purchase price for the Shares being purchased pursuant to such exercise (and satisfaction of such other conditions for the transfer of Shares as may be required pursuant to the Option) and registration of the Shares in the Company's share register in the name of the Participant. No Participant to whom a Stock Purchase Right has been granted shall have rights as a stockholder with respect to any Shares covered by such Stock Purchase Right, except after tender of the full purchase price for the Shares being purchased (and satisfaction of such other conditions for the transfer of Shares as may be required pursuant to the Stock Purchase Right) and registration of the Shares in the Company's share register in the name of the purchaser. Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Paragraph 17 of this Plan.

9. ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS.

By its terms, an Option or Stock Purchase Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and distribution, or (ii) as otherwise determined by the Administrator and set forth in the applicable Option Agreement or Restricted Stock Purchase Agreement. The designation of a beneficiary of an

Option by a Participant shall not be deemed a transfer prohibited by this Paragraph. Except as provided above, an Option or Stock Purchase Right shall be exercisable, during the Participant's lifetime, only by such Participant (or by his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Option or Stock Purchase Right or of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon an Option or Stock Purchase Right, shall be null and void.

10. EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR DISABILITY.

Except as otherwise provided in the pertinent Option Agreement, in the event of a termination of service (whether as an employee, director or consultant) with the Company or an Affiliate before the Participant has exercised all Options, the following rules apply:

a. A Participant who ceases to be an employee, director or consultant of the Company or of an Affiliate (for any reason other than termination "for cause", Disability, or death for which events there are special rules in Paragraphs 11, 12, and 13, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of service, but only within such term as the Administrator has designated in the pertinent Option Agreement. An Option that is not exercisable on the date of termination of service is canceled on such date and may not be exercised. An Option that is exercisable on the date of termination of service, but not exercised within the term as the Administrator has designated in the pertinent Option Agreement is canceled and may not be exercised thereafter.

b. Except as provided in Paragraph 12, in no event may an Option Agreement provide, if the Option is intended to be an ISO, that the time for exercise be later than three (3) months after the Participant's termination of employment.

c. The provisions of this Paragraph, and not the provisions of Paragraph 12 or 13, shall apply to a Participant who subsequently becomes Disabled or dies after the termination of employment, director status or consultancy, provided, however, in the case of a Participant's Disability or death within three (3) months after the termination of employment, director status or consultancy, the Participant or the Participant's Survivors may exercise the Option within one (1) year after the date of the Participant's termination of employment, but in no event after the date of expiration of the term of the Option.

d. Notwithstanding anything herein to the contrary, if subsequent to a Participant's termination of employment, termination of director status or termination of consultancy, but prior to the exercise of an Option, the Board of Directors

determines that, either prior or subsequent to the Participant's termination, the Participant engaged in conduct which would constitute "cause" (as defined in Paragraph 11 below), then such Participant shall forthwith cease to have any right to exercise any Option, whether or not such Option was previously exercisable.

e. A Participant to whom an Option has been granted under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any disability other than a permanent and total Disability as defined in Paragraph 2 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant's employment, director status or consultancy with the Company or with an Affiliate, except to the extent that the Administrator so determines as Company policy or to the extent that the Option Agreement may otherwise expressly provide.

f. Except as required by law or as set forth in the pertinent Option Agreement, Options granted under the Plan shall not be affected by any change of a Participant's status within or among the Company and any Affiliates, so long as the Participant continues to be a Key Employee, director or consultant of the Company or any Affiliate.

11. EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".

Except as otherwise provided in the pertinent Option Agreement, the following rules apply if the Participant's service (whether as an employee, director or consultant) with the Company or an Affiliate is terminated for "cause" prior to the time that all his or her outstanding Options have been exercised:

a. All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated for "cause" will immediately be forfeited.

b. For purposes of this Plan, except as otherwise provided in the pertinent Option Agreement or Restricted Stock Purchase Agreement, "cause" shall include (and is not limited to) dishonesty with respect to the Company or any Affiliate, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, and conduct substantially prejudicial to the business of the Company or any Affiliate. The determination of the Administrator as to the existence of "cause" will be conclusive on the Participant and the Company.

c. "Cause" is not limited to events which have occurred prior to a Participant's termination of service, nor is it necessary that the Administrator's finding of "cause" occur prior to termination. If the Administrator determines, subsequent to a Participant's termination of service but prior to the exercise of an Option, that

either prior or subsequent to the Participant's termination the Participant engaged in conduct which would constitute "cause," then the right to exercise any Option is forfeited.

d. Any definition in an agreement between the Participant and the Company or an Affiliate, which contains a conflicting definition of "cause" for termination and which is in effect at the time of such termination, shall supersede the definition in this Plan with respect to such Participant.

12. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.

Except as otherwise provided in the pertinent Option Agreement, a Participant who terminates his or her employment, directorship or consultancy with the Company or an Affiliate by reason of Disability may exercise any Option granted to such Participant:

a. To the extent exercisable but not exercised on the date of such cessation; and

b. In the event rights to exercise the Option Vest periodically, to the extent of a pro rata portion of any additional rights as would have Vested had the Participant not terminated his or her employment, directorship or consultancy by reason of such Disability, prior to the end of the Vesting period which next ends following the date of such termination. The proration shall be based upon the number of days of such Vesting period prior to the date of such termination.

Except as otherwise provided in the pertinent Option Agreement, a Disabled Participant may exercise such rights only within the period ending one (1) year after the date of the Participant's termination of employment, directorship or consultancy, as the case may be, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares on a later date if the Participant had not become disabled and had continued to be an employee, director or consultant or, if earlier, within the originally prescribed term of the Option.

The Company shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Company, the cost of which examination shall be paid for by the Company.

13. EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

Except as otherwise provided in the pertinent Option Agreement, in the event of the death of a Participant while the Participant is an employee, director or consultant of the Company or of an Affiliate, such Option may be exercised by the Participant's Survivors:

a. To the extent exercisable but not exercised on the date of death; and

b. In the event rights to exercise the Option Vest periodically, to the extent of a pro rata portion of any additional rights which would have Vested had the Participant not died prior to the end of the Vesting period which next ends following the date of death. The proration shall be based upon the number of days of such Vesting period prior to the Participant's death.

Except as otherwise provided in the pertinent Option Agreement, if the Participant's Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one (1) year after the date of Participant's termination of employment, directorship or consultancy, as the case may be, notwithstanding that the decedent might have been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued to be an employee, director or consultant or, if earlier, within the originally prescribed term of the Option.

14. STOCK PURCHASE RIGHTS.

a. Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing, by means of an Agreement, of the terms, conditions and restrictions related to the offer, including the number of Shares that the offeree shall be entitled to purchase, the price to be paid (which shall not be less than the par value of the Shares), and the time within which the offeree must accept such offer, which shall in no event exceed six (6) months from the date upon which the Administrator made the determination to grant the Stock Purchase Right. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

b. Repurchase Option. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser's employment with the Company for any reason (including death or Disability). The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate determined by the Administrator.

c. Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase Agreements need not be the same with respect to each purchaser.

15. PURCHASE FOR INVESTMENT.

Unless the offering and sale of the Shares to be issued upon the particular exercise of an Option or Stock Purchase Right shall have been effectively registered under the Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"), the Company shall be under no obligation to issue the Shares covered by such exercise unless and until the following conditions have been fulfilled:

a. The person(s) who exercise(s) such Option or Stock Purchase Right shall warrant to the Company, prior to the receipt of such Shares, that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound by the provisions of the following legend which shall be endorsed upon the certificate(s) evidencing their Shares issued pursuant to such exercise of such grant:

"The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws."

b. At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise in compliance with the 1933 Act without registration thereunder.

The Company may delay issuance of the Shares until completion of any action or obtaining of any consent which the Company deems necessary under any applicable law (including, without limitation, state securities or "blue sky" laws.)

16. DISSOLUTION OR LIQUIDATION OF THE COMPANY.

Upon the dissolution or liquidation of the Company, all Options or Stock Purchase Rights granted under this Plan which as of such date shall not have been exercised will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant's Survivors have not otherwise terminated and expired, (i) the Participant or the Participant's Survivors will have the right immediately prior to such dissolution or liquidation to exercise any

Option or Stock Purchase Right to the extent that the Option or Stock Purchase Right is exercisable as of the date immediately prior to such dissolution or liquidation; and (ii) if a Change in Control shall have occurred within the twelve months immediately prior to the date of such dissolution or liquidation, such Participant or such Participant's Survivors will have the right immediately prior to such dissolution or liquidation to exercise any Option or Stock Purchase Right then outstanding whether or not such Option or Stock Purchase Right is exercisable as of such date.

17. ADJUSTMENTS.

Upon the occurrence of any of the following events, the adjustments as hereinafter provided shall be made, unless otherwise specifically provided in a pertinent Option Agreement or Restricted Stock Purchase Agreement:

A. Stock Dividends and Stock Splits. If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock, the number of shares of Common Stock deliverable upon the exercise of an Option or Stock Purchase Right may be appropriately increased or decreased proportionately, and appropriate adjustments may be made in the purchase price per share to reflect such subdivision, combination or stock dividend. The number of Shares subject to options to be granted (i) pursuant to Paragraph 3 or to directors pursuant to Paragraph 6(A)(f) shall also be proportionately adjusted upon the occurrence of such events, except as the Administrator shall otherwise determine in its sole discretion or (ii) pursuant to Paragraph 4(c) shall also be proportionately adjusted upon the occurrence of such events.

B. Corporate Changes in Control. In the event of a Corporate Change in Control,

(i) Each Option or Stock Purchase Right outstanding as of the date such Corporate Change in Control is determined to have occurred, and which is not then exercisable by reason of Vesting requirements, shall automatically accelerate the Vesting so that the Option or Stock Purchase Right shall become fully exercisable and Vested on the first to occur of (x) the date the Option or Stock Purchase Right becomes Vested and exercisable under its original terms (with respect only to such Options or Stock Purchase Rights as otherwise would Vest during such one-year period under their terms), (y) the first anniversary of the date such Corporate Change in Control is determined to have occurred, and
(z) the occurrence of an Involuntary Employment Action; and

(ii) The Options or Stock Purchase Rights so accelerated shall remain so exercisable until the earlier of the original expiration date of the Option or Stock Purchase Right and the earlier termination of the Option or Stock Purchase Right in accordance with the Plan and the Agreement.

C. Transactional Changes in Control. In the event of a Transactional Change in Control,

(i) Each Option or Stock Purchase Right outstanding as of the date such Transactional Change in Control is determined to have occurred shall be: (a) assumed by the successor corporation (or its parent) or replaced with a comparable option or stock purchase right to purchase shares of the capital stock of the successor corporation (or its parent) on an equitable basis, (b) terminated upon written notice to the Participants stating that all Options or Stock Purchase Rights (for purposes of this Subparagraph all Options or Stock Purchase Rights then outstanding shall be deemed to be exercisable) must be exercised within a specified number of days (which shall not be less than 15 days) from the date such notice is given, at the end of which period the Options or Stock Purchase Rights shall terminate, or (c) terminated in exchange for a cash payment equal to the excess of the Fair Market Value of the shares subject to such Options or Stock Purchase Rights (for purposes of this Subparagraph all Options then outstanding shall be deemed to be exercisable) over the exercise price thereof; provided, however, that if any of the treatments of Options or Stock Purchase Rights pursuant to this Plan set forth in clauses (a), (b) or (c) above would make a Transactional Change in Control transaction ineligible for pooling-of-interest accounting under APB No. 16 such that but for the nature of such treatment such transaction would otherwise be eligible for such accounting treatment, the Committee (or the Administrator if no Committee has been appointed) shall have the ability to substitute for any cash or other consideration payable under such treatment shares of Common Stock with a Fair Market Value or other consideration with value equal to the cash or other consideration that would otherwise be payable pursuant to such treatment. The determination of which of the treatments set forth in clauses (a), (b) and (c) above to provide and of comparability under clause (a) above shall be made by the Administrator and its determinations shall be final, binding and conclusive.

(ii) Each Option or Stock Purchase Right that is assumed or replaced in connection with a Transactional Change in Control shall automatically accelerate so that the Option or Stock Purchase Right shall become fully exercisable and Vested on the first to occur of (x) the date the Option becomes Vested and exercisable under its original terms (with respect only to such Options or Stock Purchase Rights as otherwise would Vest during such one-year period under their terms), (y) the first anniversary of the date such Transactional Change in Control is determined to have occurred, and (z) the occurrence of an Involuntary Employment Action. The Options or Stock Purchase Rights so accelerated shall remain so exercisable until the earlier of the original expiration date of the Option and the earlier termination of the Option in accordance with the Plan and the Agreement.

D. Corporate Transaction. In the event of a Corporate Transaction that does not constitute a Transactional Change in Control or in the event of a similar event, pursuant to which securities of the Company or of another corporation or entity are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising an Option or Stock Purchase Right shall be entitled to receive for the purchase price paid upon such exercise the securities which would have been received if such Option or Stock Purchase Right had been exercised prior to such Corporate Transaction.

E. Modification of ISOs. Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph A, B, C, or D with respect to ISOs shall be made only after the Administrator, after consulting with counsel for the Company, determines whether such adjustments would constitute a "modification" of such ISOs (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for the holders of such ISOs. If the Administrator determines that such adjustments made with respect to ISOs would constitute a "modification" of such ISOs, it may refrain from making such adjustments, unless the holder of an ISO specifically requests in writing that such adjustment be made and such writing indicates that the holder has full knowledge of the consequences of such "modification" on his or her income tax treatment with respect to the ISO.

18. ISSUANCES OF SECURITIES.

Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Options or Stock Purchase Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company. The Option Agreement may contain terms, conditions and procedures permitting Participants to elect to defer the receipt of Shares upon the exercise of Non-Qualified Options for a specific period or until a specified event.

19. FRACTIONAL SHARES.

No fractional shares shall be issued under the Plan and the person exercising such right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof.

20. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.

The Administrator, at the written request of any Participant, may in its discretion take such actions as may be necessary to convert such Participant's ISOs (or any portions thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the Participant is an employee of the Company or an Affiliate at the time of such conversion. Such actions may include, but not be limited to, extending the exercise period or reducing the exercise price of the appropriate installments of such Options. At the time of such conversion, the Administrator (with the consent of the Participant) may impose such conditions on the exercise of the resulting Non-Qualified Options as the Administrator in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any Participant the right to have such Participant's ISOs converted into Non-Qualified Options,

and no such conversion shall occur until and unless the Administrator takes appropriate action. The Administrator, with the consent of the Participant, may also terminate any portion of any ISO that has not been exercised at the time of such conversion.

21. WITHHOLDING.

In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other amounts are required by applicable law or regulation to be withheld from the Participant's salary, wages or other remuneration in connection with the exercise of an Option or a Disqualifying Disposition (as defined in Paragraph 22) or the Vesting of Shares issued pursuant to Stock Purchase Rights, the Company may deduct from any amounts due to the Participant, such as compensation or reimbursements, or may require that the Participant advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company's Common Stock or a promissory note, is authorized by the Administrator (and permitted by law), provided, however, that with respect to persons subject to Section 16 of the 1934 Act, any such withholding arrangement shall be in compliance with any applicable provisions of Rule 16b-3 promulgated under Section 16 of the 1934 Act. For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner provided in Paragraph 2 above, as of the most recent practicable date prior to the date of exercise. If the fair market value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or the Affiliate employer. The Administrator in its discretion may condition the exercise of an Option for less than the then Fair Market Value on the Participant's payment of such additional withholding.

22. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

Each Key Employee who receives an ISO must agree to notify the Company in writing immediately after the Key Employee makes a Disqualifying Disposition of any shares acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is any disposition (including any sale) of such shares before the later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the ISO. If the Key Employee has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

23. TERMINATION OF THE PLAN.

Unless sooner terminated by the Board of Directors, the Plan shall terminate on October 28, 2009, and no Options or Stock Purchase Rights shall thereafter be granted under the Plan. All Options or Stock Purchase Rights granted under the Plan prior to that date shall remain in

effect until such Options or Stock Purchase Rights shall have been exercised or terminated in accordance with the terms and provisions of the Plan and the applicable Option Agreements or Restricted Stock Purchase Agreements. The Board of Directors may terminate the Plan at any time; provided, however, that any such termination will not materially impair any rights under any Option or Stock Purchase Right theretofore made under the Plan without the consent of the Participant.

24. AMENDMENT OF THE PLAN AND AGREEMENTS.

The Plan may be amended by the stockholders of the Company. The Plan may also be amended by the Board of Directors or the Administrator, including, without limitation, to the extent necessary to qualify any or all outstanding Options granted under the Plan or Options to be granted under the Plan for favorable federal income tax treatment (including deferral of taxation upon exercise) as may be afforded incentive stock options under Section 422 of the Code, for as long as the Company has a class of stock registered pursuant to
Section 12 of the 1934 Act and to the extent necessary to qualify the shares issuable upon exercise of any outstanding Options granted, or Options to be granted, under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers. Any amendment approved by the Administrator which the Administrator determines is of a scope that requires stockholder approval shall be subject to obtaining such stockholder approval. Any modification or amendment of the Plan shall not, without the consent of a Participant, materially adversely affect his or her rights under an Option or Stock Purchase Right previously granted to him or her. With the consent of the Participant affected, the Administrator may amend outstanding Option Agreements or Restricted Stock Purchase Agreements in a manner which may be materially adverse to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Option Agreements or Restricted Stock Purchase Agreements may be amended by the Administrator in a manner which is not materially adverse to the Participant.

25. EMPLOYMENT OR OTHER RELATIONSHIP.

Nothing in this Plan or any Option Agreement or Restricted Stock Purchase Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period of time.

All Options and Stock Purchase Rights shall constitute a special incentive payment to the Participant and shall not be taken into account in computing the amount of salary or compensation of the Participant for the purpose of determining any benefits under any pension, retirement, profit-sharing, bonus, life insurance or other benefit plan of the Company or under

any agreement between the Company and the Participant, unless such plan or agreement specifically provides otherwise.

26. GOVERNING LAW.

With respect to Options and Stock Purchase Rights granted prior to January 18, 2001, this Plan shall be governed by and construed in accordance with the laws of the State of Delaware, the Company's state of incorporation and, except as otherwise provided in the pertinent Option Agreement or Restricted Stock Purchase Agreement, the United States District Court for the Eastern District of Virginia shall have exclusive jurisdiction over any and all disputes between a Participant and the Company related to or arising out of Options or Restricted Stock Purchase Rights granted under this Plan. With respect to Option and Stock Purchase Rights granted on or after January 18, 2001, this Plan shall be governed by and construed in accordance with the laws of the State of New York and, except as otherwise provided in the pertinent Option Agreement or Restricted Stock Purchase Agreement, any and all disputes between a Participant and the Company related to or arising out of Options or Stock Purchase rights granted under this Plan shall be brought only in a state or federal court of competent jurisdiction sitting in Manhattan, New York.

Exhibit 10.8

As Amended Through
January 18, 2001

TIME WARNER INC.
1988 Restricted Stock Plan For

Non-Employee Directors

1. PURPOSE. The purpose of the Plan is to supplement the compensation paid to Outside Directors and to increase their proprietary interest in the Company and their identification with the interests of the Company's stockholders, by grants of annual awards of Common Stock.

2. CERTAIN DEFINITIONS.

(a) "Average Market Price" shall mean the average (rounded to the nearest cent) of the means between the high and low sales prices of a share of Common Stock as reported on the New York Stock Exchange Composite Tape for the ten consecutive trading days ending on the date of the annual meeting of stockholders of the Company for the year with respect to which an annual grant of Restricted Shares is automatically made pursuant to paragraph 5 of the Plan.

(b) "Board" shall mean the Board of Directors of the Company.

(c) "Commission" shall mean the Securities and Exchange Commission.

(d) "Common Stock" shall mean the Common Stock, par value $1 per share, of the Company.

(e) "Company" shall mean Time Warner Inc., a Delaware corporation.

(f) "Grant Date" shall have the meaning set forth in paragraph 5 of the Plan.

(g) "Outside Director" shall mean a member of the Board of Directors of the Company who, as of the close of business on the date of the annual meeting of stockholders of the Company, is not an employee of the Company or any subsidiary of the Company. For the purposes hereof, a "subsidiary" of the Company shall mean any corporation, partnership or other entity in which the Company owns, directly or indirectly, an equity interest of 50% or more.

(h) "Plan" shall mean this 1988 Restricted Stock Plan for Non-Employee Directors of the Company.

(i) "Retained Distributions" shall mean distributions which are retained by the Company pursuant to paragraph 6(b) of the Plan.

(j) "Restricted Shares" shall mean shares of Common Stock automatically granted to an Outside Director pursuant to paragraph 5 of the Plan.

(k) "Restriction Period" shall mean the period of time specified in paragraph 6(a) hereof applicable to all Restricted Shares granted under the Plan.

3. SHARES SUBJECT TO THE PLAN. Subject to the provisions of paragraph 9 hereof, the maximum aggregate number of Restricted Shares which may be issued under the Plan in any calendar year, commencing with calendar year 1999, shall be equal to .003% of the shares of Common Stock outstanding on December 31st of the preceding calendar year. Any Restricted Shares available for grant in any calendar year which are not granted in that calendar year shall not be available for grant in any subsequent calendar year and any Restricted Shares awarded in any calendar year that are forfeited by the terms of the Plan in any subsequent calendar year shall not again be available for awards. No fractional shares of Common Stock shall be granted or issued under the Plan.

The Restricted Shares may be, in whole or in part, authorized but unissued shares of Common Stock or shares of Common Stock previously issued and outstanding and reacquired by the Company.

4. ELIGIBILITY. Subject to the last sentence of paragraph 5 hereof, the only persons eligible to participate in the Plan shall be Outside Directors.

5. ANNUAL GRANTS. Subject to the provisions of paragraph 3 hereof, each Outside Director shall automatically be granted under the Plan, as of the conclusion of each annual meeting of stockholders of the Company (the "Grant Date"), that number of Restricted Shares equal to (a) for Grant Dates occurring during calendar years 1990 through 1998, $30,000 divided by the Average Market Price of the Common Stock on the Grant Date and (b) for Grant Dates occurring during calendar year 1999 and ending with the annual meeting of stockholders to be held in 2000, that number of Restricted Shares equal to a dollar amount determined by the Board of Directors on or before the Grant Date divided by the Average Market Price of the Common Stock on the Grant Date, and except as hereinafter provided, the Company shall promptly thereafter issue such shares, in each case without any further action required to be taken by the Board or any committee thereof. The Company shall not be required to issue fractions of Restricted Shares and in lieu thereof any fractional Restricted Share shall be rounded to the next whole number. Notwithstanding the foregoing, in the case of an Outside Director who, as of any Grant Date, has not continuously served as

a member of the Board for a period of at least six consecutive months (a "new Outside Director"), the Restricted Shares granted to such new Outside Director on such Grant Date shall not be issued in such new Outside Director's name until six months after such new Outside Director shall have first become a new Outside Director. An individual who shall become an Outside Director subsequent to the date of the annual meeting of stockholders of the Company for any year shall first become eligible to participate in the Plan commencing on the date of the next annual meeting of stockholders of the Company.

6. RESTRICTION PERIOD; RESTRICTIONS APPLICABLE TO RESTRICTED SHARES; CERTIFICATES REPRESENTING RESTRICTED SHARES.

(a) All Restricted Shares granted to an Outside Director pursuant to the Plan shall be subject to the possibility of forfeiture and the restrictions set forth in paragraph 6(b) below for a period (the "Restriction Period") commencing on the date such Restricted Shares shall have been automatically granted to such Outside Director pursuant to paragraph 5 of the Plan and ending on the earliest of the following events:

(i) the date such Outside Director ceases to be a director of the Company by reason of mandatory retirement pursuant to any policy or plan of the Company applicable to Outside Directors;

(ii) the date such Outside Director, having been nominated for reelection, is not reelected by the stockholders of the Company to serve as a member of the Board;

(iii) the date of death of such Outside Director;

(iv) the date such Outside Director terminates service on the Board on account of medical or health reasons which render such Outside Director unable to continue to serve as a member of the Board; or

(v) the occurrence of a Change in Control of the Company (as defined in paragraph 6(c) below).

provided, however, that, in the discretion of the Board on a case by case basis, the Restriction Period applicable to all Restricted Shares granted to an Outside Director shall end and be deemed completed for all purposes of the Plan in the event an Outside Director (a "withdrawing Outside Director") terminates his or her service as a member of the Board (A) for reasons of personal or financial hardship; (B) to serve in any governmental, diplomatic or

any other public service position or capacity; (C) to avoid or protect against a conflict of interest of any kind; (D) on the advice of legal counsel; or (E) for any other extraordinary circumstance that the Board determines to be comparable to the foregoing. The withdrawing Outside Director shall abstain from participating in any determination made by the Board with respect to any matter relating to the foregoing.

(b) Restricted Shares, when issued, will be represented by a stock certificate or certificates registered in the name of the Outside Director to whom such Restricted Shares shall have been granted. Each such certificate shall bear a legend in substantially the following form:

"The shares represented by this certificate are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in the Time Warner Inc. 1988 Restricted Stock Plan for Non-Employee Directors. A copy of such Plan is on file in the Office of the Secretary of Time Warner Inc."

Such certificates shall be deposited by such Outside Director with the Company, together with stock powers or other instruments of assignment, each endorsed in blank, which will permit transfer to the Company of all or any portion of the Restricted Shares and any securities constituting Retained Distributions that shall be forfeited or that shall not become vested in accordance with the Plan. Restricted Shares shall constitute issued and outstanding shares of Common Stock for all corporate purposes. The Outside Director will have the right to vote such Restricted Shares, to receive and retain all regular cash dividends paid on such Restricted Shares and to exercise all other rights, powers and privileges of a holder of Common stock with respect to such Restricted Shares, with the exception that (i) the Outside Director will not be entitled to delivery of the stock certificate or certificates representing such Restricted Shares until the Restriction Period shall have expired and unless all other vesting requirements with respect thereto shall have been fulfilled; (ii) the Company will retain custody of the stock certificate or certificates representing the Restricted Shares during the Restriction Period; (iii) other than regular cash dividends the Company will retain custody of all distributions ("Retained Distributions") made or declared with respect to the Restricted Shares (and such Retained Distributions will be subject to the same restrictions, terms and conditions as are applicable to the Restricted Shares) until such time, if ever, as the Restricted Shares with respect to which such Retained Distributions shall have been made, paid or declared shall have become vested, and such Retained Distributions shall not bear interest or be segregated in separate accounts; (iv) an Outside Director may not sell, assign, transfer, pledge, exchange, encumber or dispose of any Restricted Shares or any Retained Distributions during the Restriction Period; and (v) a breach of any restrictions, terms or conditions provided in the Plan or established by the

Board with respect to any Restricted Shares or Retained Distributions will cause a forfeiture of such Restricted Shares and any Retained Distributions with respect thereto.

(c) A "Change in Control" of the Company shall be deemed to have occurred on the date upon which (i) the board (or, if approval of the Board is not required as a matter of law, the stockholders of the Company) shall approve
(a) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (b) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or (c) the adoption of any plan or proposal for the liquidation or dissolution of the Company, or (ii) any person (as such term is defined in Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), corporation, or other entity shall purchase any Common Stock of the Company (or securities convertible into the Common Stock) for cash, securities or any other consideration pursuant to a tender offer or exchange offer, without the prior consent of the Board, or any such person, corporation or other entity (other than the Company or any benefit plan sponsored by the Company or any subsidiary) shall become the "beneficial owner" (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20 percent or more of the combined voting power of the then outstanding securities of the Company ordinarily (and apart from rights accruing under special circumstances) having the right to vote in the election of directors (calculated as provided in paragraph (d) of such Rule 13d-3 in the case of rights to acquire the Company's securities), or (iii) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directions then still in office who were directors at the beginning of the period; provided, however, that, as to Restricted Shares granted after January 9, 2000, the consummation of the mergers and the other transactions contemplated in the Agreement and Plan of Merger dated as of January 10, 2000 between America Online, Inc. and Time Warner Inc., as the same may be amended from time to time, shall not constitute a Change in Control under the foregoing clauses (ii) or (iii).

7. COMPLETION OF RESTRICTION PERIOD; FORFEITURE. Upon the completion of the Restriction Period with respect to an Outside Director's Restricted Shares, and the satisfaction of any other applicable restrictions, terms and conditions, all Restricted Shares issued to such Outside Director and any Retained Distributions with respect to such Restricted Shares shall become vested. The Company shall promptly thereafter issue and

deliver to the Outside Director new stock certificates or instruments representing the Restricted Shares and other distributions registered in the name of the Outside Director or, if deceased, his or her legatee, personal representative or distributee, which do not contain the legend set forth in paragraph 6(b) hereof.

If an Outside Director ceases to be a member of the Board for any reason other than as set forth in clauses (i) through (v) of paragraph 6(a) hereof or as the Board may otherwise approve in accordance with paragraph 6(a), then all Restricted Shares issued to such Outside Director and all Retained Distributions with respect thereto shall be forfeited to the Company and the Outside Director shall not thereafter have any rights (including dividend and voting rights) with respect to such Restricted Shares and Retained Distributions.

8. STATEMENT OF ACCOUNT. Each Outside Director shall receive an annual statement, on or about June 1st, showing the number of Restricted Shares granted to such Outside Director for that year and the aggregate number of Restricted Shares that have been granted to such Outside Director under the Plan.

9. ADJUSTMENT IN EVENT OF CHANGES IN COMMON STOCK. In the event of a recapitalization, stock split, stock dividend, combination or exchange of shares, merger, consolidation or liquidation or the like, the aggregate number and class of Restricted Shares available for grant under the Plan shall be appropriately adjusted by the Board, whose determination shall be conclusive.

10. NO RIGHT TO NOMINATION. Nothing contained in the Plan shall confer upon any Outside Director the right to be nominated for reelection to the Board.

11. NONALIENATION OF BENEFITS. No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the person entitled to such benefit. If any Outside Director or beneficiary hereunder should become bankrupt or attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge any right or benefit hereunder, then such right or benefit shall, in the discretion of the Board, cease and terminate, and in such event, the Board in its discretion may hold or apply the same or any part thereof for the benefit of the Outside Director, his or her beneficiary, spouse, children or other dependents, or any of them, in such manner and in such proportion as the Board may deem proper.

12. APPOINTMENT OF ATTORNEY-IN-FACT. Upon the issuance of any Restricted Shares hereunder and the delivery by an Outside Director of the stock power referred to in paragraph 6(b) hereof, such Outside Director shall be deemed to have appointed the Company, its successors and assigns, the attorney-in-fact of the Outside Director, with full power of substitution, for the purpose of carrying out the provisions of this Plan and taking any action and executing any instruments which such attorney-in-fact may deem necessary or advisable to accomplish the purposes hereof, which appointment as attorney-in-fact shall be irrevocable and coupled with an interest. The Company as attorney-in-fact for the Outside Director may in the name and stead of the Outside Director make and execute all conveyances, assignments and transfers of the Restricted Shares and Retained Distributions deposited with the Company pursuant to paragraph 6(b) of the Plan and the Outside Director hereby ratifies and confirms all that the Company, as said attorney-in-fact, shall do by virtue thereof.

Nevertheless, the Outside Director shall, if so requested by the Company, execute and deliver to the Company all such instruments as may, in the judgment of the Company, be advisable for the purpose.

13. SECTION 4999 RULES. Notwithstanding any provisions to the contrary contained in the Plan, if the Payment (as hereinafter defined) due to the Outside Director hereunder upon the occurrence of a Change in Control of the Company would be subject to the excise tax imposed by Section 4999 (or any successor thereto) of the Internal Revenue Code of 1986 (the "Code"), then any such Payment hereunder payable to the Outside Director shall be reduced to the largest amount that will result in no portion of the aggregate of the Payments from the Company being subject to such excise tax. The term "Payment" shall mean any transfer of property within the meaning of Section 280G (or any successor thereto) of the Code.

The determination of any reduction in Payments under the Plan shall be made by the Outside Director in good faith, and such determination shall be conclusive and binding on the Company. The Outside Director shall have the right to determine the extent to which the aggregate amount of any such reduction shall be applied against any cash or any shares of stock of the Company or any other securities or property to which the Outside Director would otherwise have been entitled under the Plan, the extent to which the Payments hereunder and any other payments due to the Outside Director from the Company shall be reduced, and whether to waive the right to the acceleration of any portion of the Payment due hereunder or otherwise due to the Outside Director from the Company, and any such determination shall be conclusive and binding on the Company. To the extent that Payments hereunder are not paid as a consequence of the limitation contained in this paragraph 13, then the Restricted Shares and Retained Distributions not so accelerated shall be deemed to

remain outstanding and shall be subject to the provisions of the Plan as if no acceleration had occurred.

If (a) the Company shall make any Payments pursuant to the Plan to the Outside Director, (b) an excise tax under Section 4999 (or any successor thereto) of the Code is in fact paid by the Outside Director (or is claimed by the Internal Revenue Service to be due) as a result of any such Payment, either alone or together with any other Payments received or to be received by the Outside Director from the Company, and (c) if nationally recognized counsel to the Outside Director or the Company shall have given an opinion of counsel that repayment of all or a portion of such Payments would result in such excise tax being refunded to the Outside Director (or, if not paid, in such excise tax not being imposed), then the Outside Director shall repay to the Company all or such portion of such Payments so that such excise tax will be refunded (or will not apply).

The Company shall pay all legal fees and expenses which the Outside Director may incur in any contest of the Outside Director's interpretation of, or determinations under, the provisions of this paragraph 13.

14. WITHHOLDING TAXES.

(a) At the time any Restricted Shares or Retained Distributions become vested or payable, each Outside Director shall pay to the Company the amount of any Federal, state or local taxes of any kind required by law to be withheld with respect thereto.

(b) If an Outside Director properly elects (which, apart from any other notice required by law, shall require that the Outside Director notify the Company of such election at the time it is made) within 30 days after the Company issues the certificate or certificates representing the Restricted Shares to the Outside Director to include in gross income for Federal income tax purposes an amount equal to the fair market value of such Restricted Shares at the time of such issuance, he or she shall pay to the Company in the year of award of such Restricted Shares the amount of any Federal, state or local taxes required to be withheld with respect to such Restricted Shares.

(c) If an Outside Director shall fail to make the payments required hereunder, the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to such Outside Director any Federal, state or local taxes of any kind required by law to be withheld with respect to such Restricted Shares.

15. AMENDMENT AND TERMINATION OF PLAN. The Board may at any time terminate the Plan or make such amendments to the Plan as it shall deem advisable;

provided, however, that no termination or amendment of the Plan shall adversely affect the right of any Outside Director (without his or her consent) under any grant previously made and any amendment shall comply with all applicable laws and regulations and stock exchange listing requirements.

16. GOVERNMENT AND OTHER REGULATIONS. Notwithstanding any other provisions of the Plan, the obligations of the Company with respect to Restricted Shares shall be subject to all applicable laws, rules and regulations, and such approvals by any governmental agencies as may be required or deemed appropriate by the Company. The Company reserves the right to delay or restrict, in whole or in part, the issuance or delivery of Common Stock pursuant to any grants of Restricted Shares under the Plan until such time as:

(a) any legal requirements or regulations shall have been met relating to the issuance of such Restricted Shares or to their registration, qualification or exemption from registration or qualification under the Securities Act of 1933 or any applicable state securities laws; and

(b) satisfactory assurances shall have been received that such Restricted Shares when delivered will be duly listed on any applicable stock exchange.

17. NONEXCLUSIVITY OF PLAN. Neither the adoption of the Plan by the Board nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including without limitation, the awarding of stock otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

18. GOVERNING LAW. The Plan shall be governed by, and construed in accordance with, the laws of the State of New York.

19. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective on a date which is the latter of (i) the date the Plan is approved by the stockholders of the Company entitled to vote at the annual meeting of stockholders of the Company to be held in 1988, or any adjournment thereof; and
(ii) the date on which the Company receives a favorable interpretative letter from the Commission to the effect that (x) the grant of Restricted Shares under the Plan is exempt from the operation of Section 16(b) of the Exchange Act and
(y) Outside Directors who receive Restricted Shares under the Plan will continue to be "disinterested persons" within the meaning of Rule 16b-3 under the Exchange Act with respect to administration of the Company's other stock related plans in which only

employees of the Company (including officers, whether or not they are directors) and its subsidiaries may participate.

20. BENEFICIARIES. Each Outside Director may designate any person(s) or legal entity(ies), including his or her estate, as his or her beneficiary under the Plan. Such designation shall be made in writing on a form filed with the Secretary of the Corporation or his or her designee and may be revoked or changed by an Outside Director at any time by filing written notice of such revocation or change with the Secretary of the Corporation or his or her designee. If no person shall be designated by an Outside Director as his or her beneficiary or if no person designated by such Outside Director as his or her beneficiary survives such Outside Director, the Outside Director's beneficiary shall be his or her estate.

As Amended Through January 18, 2001

TIME WARNER 1996 STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS

1. PURPOSE OF THE PLAN

The purpose of the Time Warner 1996 Stock Option Plan for Non-Employee Directors (hereinafter the "Plan") is to provide for the granting of nonqualified stock options and limited stock appreciation rights to Outside Directors and to increase their proprietary interest in Time Warner and their identification with the interests of Time Warner's stockholders through annual grants of stock options.

2. CERTAIN DEFINITIONS

The following terms (whether used in the singular or plural) have the meanings indicated when used in the Plan:

(a) "Agreement" means the stock option and Limited SARs agreement specified in Section 10.

(b) "Approved Transaction" means any transaction in which the Board (or, if approval of the Board is not required as a matter of law, the stockholders of Time Warner) shall approve (i) any consolidation or merger of Time Warner in which Time Warner is not the continuing or surviving corporation or pursuant to which shares of Common Stock would be converted into cash, securities or other property, other than a merger of Time Warner
(x) as contemplated in the Amended and Restated Agreement and Plan of Merger dated as of September 22, 1995 among Time Warner Inc., TW Inc., Time Warner Acquisition Corp., TW Acquisition Corp. and Turner Broadcasting System, Inc., as the same may be amended from time to time, or (y) in which the holders of Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (ii) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of Time Warner, or (iii) the adoption of any plan or proposal for the liquidation or dissolution of Time Warner.

(c) "Award" means grants of Options and Limited SARs under this Plan.

(d) "Board" means the Board of Directors of Time Warner.

(e) "Board Change" means, during any period of two consecutive years, individuals who at the beginning of such period constituted the entire Board ceased for any reason to constitute a majority thereof unless the election, or the nomination for election by Time Warner's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period.

(f) "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute or statutes thereto. Reference to any specific Code section shall include any successor section.

(g) "Common Stock" means, subject to Section 11 hereof, the common stock, par value $1.00 per share, of Time Warner.

(h) "Composite Tape" means the New York Stock Exchange Composite Tape.

(i) "Control Purchase" means any transaction in which any person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than Time Warner or any employee benefit plan sponsored by Time Warner or any of its Subsidiaries) (i) shall purchase any Common Stock (or securities convertible into Common Stock) for cash, securities or any other consideration pursuant to a tender offer or exchange offer, without the prior consent of the Board, or (ii) shall become the "beneficial owner" (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Time Warner representing 20% or more of the combined voting power of the then outstanding securities of Time Warner ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election of directors (calculated as provided in Rule 13d-3(d) in the case of rights to acquire Time Warner's securities).

(j) "Effective Date" means the date the Plan becomes effective pursuant to Section 13.

(k) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute or statutes thereto. Reference to any specific Exchange Act section shall include any successor section.

(l) "Fair Market Value" of a share of Common Stock means the average of the high

and low sales prices of a share of Common Stock on the Composite Tape on the date in question.

(m) "Holder" means an Outside Director who has received an Award under this Plan.

(n) "Limited SARs" means limited stock appreciation rights subject to the terms of Section 7.6.

(o) "Minimum Price Per Share" means the highest gross price (before brokerage commissions, soliciting dealers' fees and similar charges) paid or to be paid for any share of Common Stock (whether by way of exchange, conversion, distribution, liquidation or otherwise) in, or in connection with, any Approved Transaction or Control Purchase which occurs at any time during the period beginning on the sixtieth day prior to the date on which Limited SARs are exercised and ending on the date on which Limited SARs are exercised. If the consideration paid or to be paid in any such Approved Transaction or Control Purchase shall consist, in whole or in part, of consideration other than cash, the cash value of such consideration shall be the same as established by the Board under the provisions of Time Warner's 1994 Stock Option Plan or any successor thereto.

(p) "Option" means any nonqualified stock option granted pursuant to this Plan.

(q) "Outside Directors" shall mean a member of the Board who, as of the close of business on the date of the grant of any Option hereunder, is not an employee of Time Warner or any Subsidiary.

(r) "Plan" has the meaning ascribed thereto in Section 1.

(s) "Subsidiary" of a person means any present or future subsidiary corporation (as such term is defined in section 424 of the Code) of such person and any present or future trade or business, whether or not incorporated, controlled by or under common control with such person. An entity shall be deemed a Subsidiary of a person only for such periods as the requisite ownership or control relationship is maintained.

(t) "Time Warner" means Time Warner Inc., a Delaware corporation, and any successor thereto.

(u) "Trading Day" means any day on which the New York Stock Exchange is open for business.

(v) "Total Disability" means a permanent and total disability as defined in section 22(e)(3) of the Code.

3. STOCK SUBJECT TO THE PLAN

3.1. Number of Shares. Subject to the provisions of Section 11 and this
Section 3, the maximum number of shares of Common Stock in respect of which Awards may be granted is 250,000. If and to the extent that an Option shall expire, terminate or be cancelled for any reason without having been exercised (or without having been considered to have been exercised as provided in Section 7.6), the shares of Common Stock subject to such expired, terminated or cancelled portion of the Option shall again become available for purposes of the Plan.

3.2. Character of Shares. Shares of Common Stock deliverable under the terms of the Plan may be, in whole or in part, authorized and unissued shares of Common Stock or issued shares of Common Stock held in Time Warner's treasury, or both.

3.3 Reservation of Shares. Time Warner shall at all times reserve a number of shares of Common Stock (authorized and unissued Common Stock, issued Common Stock held in Time Warner's treasury, or both) equal to the maximum number of shares that may be subject to outstanding Awards and future Awards under the Plan.

4. ADMINISTRATION

4.1. Interpretation. Subject to the express provisions of the Plan, the Board shall have plenary authority to interpret the Plan, to prescribe, amend and rescind the rules and regulations relating to it and to make all other determinations deemed necessary or advisable for the administration of the Plan. The determinations of the Board on the matters referred to in this Section 4 shall be conclusive.

4.2. Delegation to Committee. Notwithstanding anything to the contrary contained herein, the Board may at any time, or from time to time, appoint a Committee and delegate to such Committee the authority of the Board to administer the Plan. Upon such appointment and delegation, any such Committee shall have all the powers, privileges and duties of the Board, and shall be substituted for the Board, in the administration of the Plan to the extent provided in such delegation, except for the power to appoint members of the Committee and to terminate, modify or amend the Plan. The Board may from time to time appoint members

of any such Committee in substitution for or in addition to members previously appointed, may fill vacancies in such Committee and may discharge such Committee.

Any such Committee shall select one of its members as its chairman and shall hold its meetings at such times and places as it shall deem advisable. A majority of members shall constitute a quorum and all determinations shall be made by a majority of such quorum. Any determination reduced to writing and signed by all of the members shall be fully as effective as if it had been made by a majority vote at a meeting duly called and held.

5. ELIGIBILITY

The only persons eligible to participate in the Plan shall be Outside Directors.

6. ANNUAL GRANTS

Each Outside Director shall automatically be granted 1,500 Options and related Limited SARs under the Plan on the day that is 10 Trading Days after each annual meeting of stockholders of Time Warner, commencing with the annual meeting to be held in 1996 and ending with the annual meeting of stockholders to be held in 2000, and, except as hereinafter provided, the Company shall promptly thereafter execute and deliver to each Outside Director, an Agreement evidencing the grant of such Options and Limited SARs, in each case without any further action required to be taken by the Board or any committee thereof. An individual who shall become an Outside Director subsequent to the date of the annual meeting of stockholders of Time Warner for any year shall first become eligible to participate in the Plan commencing on the date of the next annual meeting of stockholders of Time Warner.

7. OPTIONS AND LIMITED SARS

7.1. Option Prices. The purchase price of the Common Stock under each Option shall be equal to 100% of the Fair Market Value of the Common Stock on the date of grant.

7.2. Terms of Options. The term of each Option shall be ten years from the date of grant.

7.3. Exercisability of Options. Subject to adjustment as provided in
Section 11, each Option granted under the Plan shall be exercisable (a) on and after the first anniversary of the

date of grant, to the extent of 500 shares, (b) on and after the second anniversary of the date of grant, to the extent of 1,000 shares and (c) on and after the third anniversary of the date of grant, to the extent of 1,500 shares. Notwithstanding the foregoing, each Option granted under the Plan shall become exercisable in full (a) on the date the Holder ceases to be a director of Time Warner for any reason other than as described in Section 7.5(d) and (b) in the event of any Approved Transaction, Board Change or Control Purchase; provided, however, that, as to Options granted after January 9, 2000, the consummation of the mergers and the other transactions contemplated in the Agreement and Plan of Merger dated as of January 10, 2000 between America Online, Inc. and Time Warner Inc., as the same may be amended from time to time, shall not constitute a Board Change or Control Purchase.

7.4. Manner of Exercise. Payment of the Option purchase price shall be made in cash or in whole shares of Common Stock already owned by the Holder or partly in cash and partly in such Common Stock in accordance with the provisions of the Agreement. An Option shall be exercised by written notice to Time Warner upon such terms and conditions as provided in the Agreement. Time Warner shall effect the transfer of the shares of Common Stock purchased under the Option as soon as practicable, and within a reasonable time thereafter such transfer shall be evidenced on the books of Time Warner. No Holder or other person exercising an Option shall have any of the rights of a stockholder of Time Warner with respect to shares of Common Stock subject to an Option granted under the Plan until due exercise and full payment has been made. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date of such due exercise and full payment.

7.5. Termination of Options. The unexercised portion of each Option shall automatically and without notice irrevocably terminate and become null and void at the time of the earliest to occur of (a) ten years from the date of grant of such Option, (b) five years from the date the Holder ceases to be a director of Time Warner by reason of retirement, Total Disability or any reason other than as described in the succeeding clauses (c) and (d), (c) one year from the date the Holder dies or (d) the date the Holder is removed from the Board for cause.

7.6. Limited SARs. Limited SARs shall be granted pursuant to the provisions of this Section 7.6 with respect to each grant of Options under the Plan (hereinafter called a "related Option"). Subject to the terms and provisions of this Section 7.6, each Limited SAR shall be exercisable to the extent the related Option is then exercisable and in no event after the complete termination or full exercise of the related Option. Limited SARs shall be exercisable in whole or in part upon notice to Time Warner upon such terms and conditions as provided in the Agreement.

Upon the exercise of Limited SARs, the related Option shall be considered to have been exercised to the extent of the number of shares of Common Stock with respect to which such Limited SARs are exercised and shall be considered to have been exercised to that extent for purposes of determining the number of shares of Common Stock in respect of which other Awards may be granted. Upon the exercise or termination of the related Option, the Limited SARs with respect thereto shall be considered to have been exercised or terminated to the extent of the number of shares of Common Stock with respect to which the related Option was so exercised or terminated.

The provisions of Sections 7 through 19 (to the extent that such provisions are applicable to Options) shall also be applicable to Limited SARs unless the context otherwise requires.

Limited SARs may be exercised only during the period (a) beginning on the first day following either (i) the date of an Approved Transaction, (ii) the date of a Control Purchase, or (iii) the date of a Board Change, and (b) ending on the ninetieth day following such date. The effective date of exercise of a Limited SAR shall be deemed to be the date on which Time Warner shall have received notice from the Holder of the exercise thereof.

Upon the exercise of Limited SARs granted in connection with an Option, except as otherwise provided in the Agreement and the immediately succeeding sentence, the Holder thereof shall receive in cash an amount equal to the product computed by multiplying (a) the excess of (i) the higher of (A) the Minimum Price Per Share, or (B) the highest reported closing sales price of a share of Common Stock as reported on the Composite Tape at any time during the period beginning on the sixtieth day prior to the date on which such Limited SARs are exercised and ending on the date on which such Limited SARs are exercised over (ii) the per share Option price of the related Option, by (b) the number of shares of Common Stock with respect to which such Limited SARs are being exercised. The Board shall have the discretion to settle Limited SARs by the delivery of Common Stock rather than cash if in the judgment of the Board such action is necessary or advisable to preserve pooling of interests accounting treatment for any proposed transaction involving Time Warner.

7.7. Nontransferability of Options and Limited SARs. Options and Limited SARs shall not be transferable other than by will or the laws of descent and distribution, and Options and Limited SARs may be exercised during the lifetime of the Holder thereof only by such Holder (or his or her court appointed legal representative).

8. NO RIGHT TO NOMINATION

Nothing contained in the Plan or in any Award shall confer on any Outside Director the right to be nominated for reelection to the Board.

9. NONALIENATION OF BENEFITS

No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the person entitled to such benefits.

10. WRITTEN AGREEMENT

Each grant of an Option and Limited SARs shall be evidenced by an Agreement consistent with the terms of the Plan.

11. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.

In the event of any stock split, dividend, distribution, combination, reclassification or recapitalization that changes the character or amount of the Common Stock while any portion of any Award theretofore granted under the Plan is outstanding but unexercised, the character and number of shares subject to such Award and the option price shall be appropriately adjusted by the Board, whose determination shall be conclusive. If any such change or transaction shall occur, the number and kind of shares for which Awards may thereafter be granted under the Plan shall be adjusted to give effect thereto.

Notwithstanding anything to the contrary contained in this Plan, upon consummation of the mergers contemplated by the Amended and Restated Agreement and Plan of Merger dated as of September 22, 1995 among Time Warner, Turner Broadcasting System, Inc., TW Inc. ("New Time Warner"), Time Warner Acquisition Corp. and TW Acquisition Corp. and the assumption of this Plan by New Time Warner: (i) New Time Warner shall be substituted for Time Warner for all purposes of this Plan, (ii) Common Stock as used in this Plan shall mean the common stock, par value $.01 per share, of New Time Warner ("New Time Warner

Common Stock"), (iii) the Board shall mean the Board of New Time Warner, and
(iv) each outstanding Option and Limited SAR shall automatically become an Option to purchase and a Limited SAR with respect to New Time Warner Common Stock on a one-for-one basis at the same exercise price.

12. TERMINATION AND AMENDMENT

The Board may at any time terminate the Plan or make such amendments to the Plan as it shall deem advisable; provided, however, that the Plan may not be amended more than once every six months (other than to comply with changes to the Code or the Employee Retirement Income Security Act of 1974, as amended), and any amendment to the Plan shall comply with all applicable laws and stock exchange listing requirements, including without limitation, Rule 16b-3 under the Exchange Act. No termination, modification or amendment of the Plan may, without the consent of the person to whom any Award shall theretofore have been granted, adversely affect the rights of such person with respect to such Award. No modification, extension, renewal or other change in any Award granted under the Plan shall be made after the grant of such Award, unless the same is consistent with the provisions of the Plan.

13. EFFECTIVENESS OF THE PLAN

The Plan shall become effective upon approval by the stockholders of Time Warner entitled to vote at the annual meeting of such stockholders to be held in 1996, or any adjournment thereof.

14. GOVERNMENT AND OTHER REGULATIONS

The obligation of Time Warner with respect to Awards shall be subject to all applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including, without limitation, the effectiveness of any registration statement required under the Securities Act of 1933, and the rules and regulations of any securities exchange on which the Common Stock may be listed. For so long as the Common Stock is registered under the Exchange Act, Time Warner shall use its reasonable efforts to comply with any legal requirements (a) to maintain a registration statement in effect under the Securities Act of 1933 with respect to all shares of Common Stock that may be issued to Holders under the Plan, and (b) to file in a timely manner all reports required to be filed by it

under the Exchange Act.

15. WITHHOLDING

Time Warner's obligation to deliver shares of Common Stock or pay cash in respect of any Award under the Plan shall be subject to applicable federal, state and local tax withholding requirements. Federal, state and local withholding taxes paid by a Holder upon the exercise of any Option may be paid in shares of Common Stock upon such terms and conditions as the Board shall determine; provided, however, that the Board in its sole discretion may disapprove such payment and require that such taxes be paid in cash.

16. SEPARABILITY

If any of the terms or provisions of this Plan conflict with the requirements of applicable law or Rule 16b-3 under the Exchange Act, then such terms or provisions shall be deemed inoperative to the extent necessary to avoid the conflict with applicable law or such Rule without invalidating the remaining provisions hereof.

17. NON-EXCLUSIVITY OF THE PLAN

Neither the adoption of the Plan by the Board nor the submission of the Plan to the stockholders of Time Warner for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements for Outside Directors as it may deem desirable.

18. GOVERNING LAW

The Plan shall be governed by, and construed in accordance with, the laws of the State of New York.

19. BENEFICIARIES.

Each Outside Director may designate any person(s) or legal entity(ies), including his or her estate, as his or her beneficiary under the Plan. Such designation shall be made in

writing on a form filed with the Secretary of Time Warner or his or her designee and may be revoked or changed by an Outside Director at any time by filing written notice of such revocation or change with the Secretary of Time Warner or his or her designee. If no person shall be designated by an Outside Director as his or her beneficiary or if no person designated by such Outside Director as his or her beneficiary survives such Outside Director, the Outside Director's beneficiary shall be his or her estate.

Exhibit 10.13

AMERICA ONLINE, INC.

EXECUTIVE INCENTIVE PLAN

The America Online, Inc. Executive Incentive Plan (the "Incentive Plan") is intended to satisfy the applicable provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The Incentive Plan shall be administered by the Compensation and Management Development Committee (the "Committee") of the Board of Directors of America Online, Inc. (the "Company"). The Committee shall select those executive officers of the Company with significant operating and financial responsibility and who are likely to be "covered employees" (within the meaning of Section 162(m) of the Code) for the relevant fiscal year, to be eligible to earn annual cash incentive compensation payments to be paid under the Incentive Plan.

The Committee shall establish performance goals within the first 90 days of each fiscal year. The performance goals selected by the Committee shall be based on any one or more of the following: price of the Company's Common Stock, stockholder return, return on equity, return on investment, return on capital, economic profit, economic value added, net income, operating income, sales, free cash flow, earnings per share, operating company contribution or market share.

These goals shall have a minimum performance standard below which no payments will be made, and a maximum performance standard above which no additional payments will be made. Any performance goals established may be based on an analysis of historical performance and growth expectations, financial results of comparable businesses, and progress toward achieving the Company's long-range strategic plan. These performance goals and determination of results shall be based entirely on financially-based measures. The Committee may not use any discretion to modify award results except as permitted under Section 162(m) of the Code.

Annual incentive compensation targets (the "Target Percentage") may be established for eligible executives ranging from 50% to 250% of base salary. Executives may earn their target incentive compensation if the business achieves the pre-established performance goals. The Target Percentage for each executive will be based on the level and functional responsibility of his or her position, size of the business for which the executive is responsible, and competitive practices. The amount of incentive compensation paid to participating executives may range from 0 to 2.0 times their incentive compensation target, based upon the extent to which performance goals are achieved or exceeded. Except as otherwise permitted by Section 162(m) of the Code, the minimum level at which a participating executive will earn any incentive payment, and the level at which an executive will bear the maximum incentive payment of double the target, must be established by the Committee prior to the commencement of each bonus period. Actual payouts must be based on either a straight-line or pre-established graded interpolation based on these minimum and maximum levels and the performance goals.

The maximum dollar amount to be paid for any year under the Incentive Plan to any participant may not exceed $5,000,000.

AMENDMENT NO. 11
TO THE
AOL TIME WARNER INC.
DEFERRED COMPENSATION PLAN

1. Effective January 11, 2001, the name of the Plan is changed to the "AOL Time Warner Inc. Deferred Compensation Plan."

2. Section 1.1 is amended to read as follows:

1.1 Establishment of Plan. Time Warner Inc. has established this plan effective as of November 18, 1998, to be known as the Time Warner Inc. Deferred Compensation Plan. Effective January 11, 2001 AOL Time Warner Inc. (the "Company") became the plan sponsor and the plan was renamed the AOL Time Warner Inc. Deferred Compensation Plan (the "Plan").

3. Section 2.8 is amended to read as follows:

2.8 Company: AOL Time Warner Inc. (Effective January 11, 2001; previously Time Warner Inc.)

4. Section 2.11 is amended by adding "(effective January 11, 2001, the AOL Time Warner Long-Term Disability Plan)" after "The Time Warner Inc. Long- Term Disability Plan."

5. Section 2.21 is amended to read as follows:

2.21 Plan: This plan, the AOL Time Warner Inc. Deferred Compensation Plan as set forth herein and as it may be amended from time to time. (Effective January 11, 2001; previously the Time Warner Inc. Deferred Compensation Plan.)

6. Section 4.2(a) is amended by adding the following parenthetical sentence at the end thereof:

(Effective January 11, 2001 the Time Warner Defined Contribution Plans Master Trust was renamed the "AOL Time Warner Defined Contribution Plans Master Trust", and the Time Warner Inc. Stock Fund became the "AOL Time Warner Inc. Stock Fund.")

7. All items are effective January 11, 2001.

AMENDED AND RESTATED EMPLOYMENT AGREEMENT made as of March 25, 1999, effective as of January 1, 1999 (the "Effective Date"), as amended on October 26, 2000, between AOL Time Warner Inc., a Delaware corporation (the "Company"), as assignee of Time Warner Inc., a Delaware corporation, and Richard D. Parsons (the "Executive").

The Executive is currently employed by the Company pursuant to an Employment Agreement made as of March 18, 1998 (the "Prior Agreement"). The Company wishes to amend and restate the Prior Agreement and secure the services of the Executive on a full-time basis for the period to and including January 31, 2005 (the "Term Date") on and subject to the terms and conditions set forth in this Agreement, and the Executive is willing for the Prior Agreement to be so amended and restated and to provide such services on and subject to the terms and conditions set forth in this Agreement. The parties therefore agree as follows:

1. Term of Employment. The Executive's "term of employment", as this phrase is used throughout this Agreement, shall be for the period beginning on the Effective Date and ending on the Term Date, subject, however, to the terms and conditions set forth in this Agreement.

2. Employment. During the term of employment, the Company shall employ the Executive, and the Executive shall serve, as the Co-Chief Operating Officer of the Company. In such capacity the Executive shall have responsibility for the direction and supervision of the following functions, divisions and subsidiaries of the Company, with the authority, duties and powers appropriate and customary to discharge such responsibility: Warner Bros. (except the WB Television Network), New Line Cinema Corporation, Warner Music Group (both before and after the consummation of the publicly announced proposed transaction with EMI Group, plc), Time Warner Trade Publishing and the legal and human resources or people development corporate staff functions. The chief executive officer of each such division or subsidiary and the Executive or Senior Vice President of each such staff function shall report to the Executive. In addition, the Executive shall have such other authority, functions, duties, powers and responsibilities as the Board of Directors or the Chief Executive Officer of the Company may from time to time delegate to the Executive in addition thereto, consistent with his stature as the Co-Chief Operating Officer of the Company. The Executive shall, subject to his election as such from time to time and without additional compensation, serve during the term of employment in such additional offices of comparable or greater stature and responsibility in the Company and its subsidiaries and as a director and as a member of any committee of the Board of Directors of the Company and its

subsidiaries, to which he may be elected from time to time. During the term of employment, (i) the Executive's services shall be rendered on a substantially full-time, exclusive basis and he will apply on a full-time basis all of his skill and experience to the performance of his duties in such employment, (ii) the Executive shall report only to the Company's Board of Directors and to the Company's Chief Executive Officer, (iii) the Executive shall have no other employment and, without the prior written consent of the Chief Executive Officer of the Company, no outside business activities which require the devotion of substantial amounts of the Executive's time and (iv) the place for the performance of the Executive's services shall be the principal executive offices of the Company which shall be in the New York City metropolitan area, subject to such reasonable travel as may be appropriate or required in the performance of the Executive's duties in the business of the Company. The foregoing shall be subject to the Company's written policies, as in effect from time to time, regarding vacations, holidays, illness and the like and shall not prevent the Executive from devoting such time to his personal affairs as shall not interfere with the performance of his duties hereunder, provided that the Executive complies with the provisions of Sections 9 and 10 and any generally applicable written policies of the Company on conflicts of interest and service as a director of another corporation, partnership, trust or other entity ("Entity").

The Company shall use its best efforts to cause the Executive to be a member of its Board of Directors throughout the term of employment and shall include him in the management slate for election as a director at every stockholders' meeting at which his term as a director would otherwise expire.

3. Compensation.

3.1 Base Salary. The Company shall pay or cause to be paid to the Executive a base salary of not less than $750,000 per annum during the term of employment (the "Base Salary"). The Company may increase, but not decrease, the Base Salary at any time and from time to time during the term of employment and upon each such increase the term "Base Salary" shall mean such increased amount (subject to Section 5). Base Salary shall be payable in monthly or more frequent installments in accordance with the Company's then current practices and policies with respect to senior executives. For the purposes of this Agreement "senior executives" shall mean the executive officers of the Company.

3.2 Bonus. In addition to Base Salary, the Executive shall be eligible to receive during the term of employment an annual cash bonus based on the performance of the Company and of the Executive in an amount commensurate with the position and duties of the Executive relative to other senior executives of the Company. The actual amount of any such annual cash bonus to be paid to the Executive will be determined by the Compensation

Committee of the Company's Board of Directors based upon a recommendation of the Company's Chief Executive Officer. Such determination with respect to the amount, if any, of annual cash bonuses to be paid to the Executive under this Agreement shall be final and conclusive except as specifically provided otherwise in this Agreement. Payments of any bonus compensation under this
Section 3.2 shall be made in accordance with the Company's then current practices and policies with respect to senior executives, but in no event later than 90 days after the end of the period for which the bonus is payable. Notwithstanding the foregoing, determination and payment of any bonus compensation under this Section 3.2 may be made pursuant to a plan intended to assure the deductibility of such bonus compensation pursuant to Section 162(m) of the Internal Revenue Code of 1986 (the "Code").

3.3 Deferred Compensation. In addition to Base Salary and bonus as set forth in Sections 3.1 and 3.2, the Executive shall be credited with a defined contribution which shall be determined and paid out on a deferred basis ("deferred compensation") as provided in this Agreement, including Annex A hereto. Unless the Executive shall make the election described in the last sentence of this Section 3.3, during the term of employment, the Company shall pay to the trustee (the "Trustee") of a Company grantor trust (the "Rabbi Trust") for credit to a special account maintained on the books of the Rabbi Trust for the Executive (the "Trust Account"), monthly, an amount equal to 50% of one-twelfth of the Executive's then current Base Salary. If a lump sum payment is made pursuant to Section 4.2.2, the Company shall pay to the Trustee for credit to the Trust Account at the time of such payment an amount equal to 50% of the Base Salary portion of such lump sum payment; provided, however, that the Executive may elect by written notice to the Company at least 15 days prior to the date of any such lump sum payment, to have such amount credited instead to the Deferred Compensation Plan established by the Company on November 18, 1998, as the same may be amended from time to time (as so amended, the "Deferred Plan"). The Trust Account shall be maintained by the Trustee in accordance with the terms of this Agreement, including Annex A, and the trust agreement (the "Trust Agreement") establishing the Rabbi Trust (which Trust Agreement shall in all respects be in furtherance of, and not inconsistent with, the terms of this Agreement, including Annex A), until the full amount which the Executive is entitled to receive therefrom has been paid in full. The Company shall maintain the Rabbi Trust as a grantor trust within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Code and shall pay all fees and expenses of the Trustee and shall enforce the provisions of the Trust Agreement for the benefit of the Executive. The Executive may elect by written notice delivered to the Company at least 15 days prior to the commencement of any calendar year during the term of employment (except that for calendar year 1999, such election shall be made no later than January 31, 1999) to have (a) all of the payments to be made to the Rabbi Trust pursuant to the second sentence of this Section 3.3 to be credited instead to the Deferred Plan or (b) to have 50% of the payments to be made by the

Company pursuant to the second sentence of this Section 3.3 to be credited instead to the Deferred Plan and the remaining 50% to be paid to the Rabbi Trust.

3.4 Deferred Bonus. In addition to any other deferred bonus plan in which the Executive may be entitled to participate, the Executive may elect by written notice delivered to the Company at least 15 days prior to the commencement of any calendar year during the term of employment during which an annual cash bonus would otherwise accrue or to which it would relate (except that for calendar year 1999, such election shall be made no later than January 31, 1999), to defer payment of and to have the Company credit all or any portion of the Executive's bonus for such year to either the Trust Account or the Deferred Plan, or a combination of both, subject in the case of a deferral to the Deferred Plan to the terms and conditions of the Deferred Plan. Any such election shall only apply to the calendar year during the term of employment with respect to which such election is made and a new election shall be required with respect to each successive calendar year during the term of employment.

3.5 Prior Account. The parties confirm that the Company has maintained a deferred compensation account (the "Prior Account") for the Executive in accordance with the Prior Agreement. The Prior Account shall be promptly transferred to, and shall for all purposes be deemed part of, the Trust Account and shall be maintained by the Trustee in accordance with this Agreement and the Trust Agreement. All prior credits to the Prior Account shall be deemed to be credits made under this Agreement, all "Account Retained Income" thereunder shall be deemed to be Account Retained Income under this Agreement and all increases or decreases to the Prior Account as a result of income, gains, losses and other changes shall be deemed to have been made under this Agreement.

3.6 Reimbursement. The Company shall reasonably promptly pay or reimburse the Executive for all reasonable travel, entertainment and other business expenses actually incurred or paid by the Executive during the term of employment in the performance of his services under this Agreement provided such expenses are incurred or paid in accordance with the Company's then current written practices and policies with respect to senior executives of the Company and upon presentation of expense statements or vouchers or such other supporting information as the Company may customarily require of its senior executives.

3.7 No Anticipatory Assignments. Except as specifically contemplated in Section 12.8 or under the life insurance policies and benefit plans referred to in Sections 7 and 8, respectively, neither the Executive, his legal representative nor any

beneficiary designated by him shall have any right, without the prior written consent of the Company, to assign, transfer, pledge, hypothecate, anticipate or commute to any person or Entity any payment due in the future pursuant to any provision of this Agreement, and any attempt to do so shall be void and shall not be recognized by the Company.

3.8 Indemnification. The Executive shall be entitled throughout the term of employment in his capacity as an officer or director of the Company or any of its subsidiaries or an officer or member of the Board of Representatives or other governing body of any partnership or joint venture in which the Company has an equity interest or as a trustee or fiduciary of any plan, program, trust or other entity established for the benefit of the Company, its subsidiaries or any of their respective employees in connection with the business of the Company (and after the term of employment, to the extent relating to his service as such officer, director, member, trustee or fiduciary) to the benefit of the indemnification provisions contained on the date hereof in the Certificate of Incorporation and By-Laws of the Company (not including any amendments or additions after the date of execution hereof that limit or narrow, but including any that add to or broaden, the protection afforded to the Executive by those provisions), to the extent not prohibited by applicable law at the time of the assertion of any liability against the Executive.

4. Termination.

4.1 Termination for Cause. The Company may terminate the term of employment and all of the Company's obligations hereunder, other than its obligations set forth below in this Section 4.1, for "cause" but only if the term of employment has not previously been terminated pursuant to any other provision of this Agreement. Termination by the Company for "cause" shall mean termination by action of the Company's Board of Directors, or a committee thereof, after a hearing at which the Executive has had the opportunity to address the Board, because of the Executive's conviction (treating a nolo contendere plea as a conviction) of a felony (whether or not any right to appeal has been or may be exercised) or willful refusal without proper cause to perform his obligations under this Agreement or because of the Executive's breach of any of the covenants provided for in Section 9. Such termination shall be effected by written notice thereof delivered by the Company to the Executive and shall be effective as of the date of such notice; provided, however, that if (i) such termination is because of the Executive's willful refusal without proper cause to perform any one or more of his obligations under this Agreement, (ii) such notice is the first such notice of termination for any reason delivered by the Company to the Executive under this Section 4.1, and (iii) within 15 days following the date of such notice the Executive shall cease his refusal and shall use his best efforts to perform such obligations, the termination shall not be effective.

In the event of such termination by the Company for cause, without prejudice to any other rights or remedies that the Company may have at law or in equity, the Company shall have no further obligations to the Executive other than (i) to pay Base Salary and make credits of deferred compensation as provided in Sections 3.1 and 3.3 accrued through the effective date of termination, (ii) to pay any annual bonus pursuant to Section 3.2 to the Executive in respect of the calendar year prior to the calendar year in which such termination is effective, in the event such annual bonus has been determined but not yet paid as of the date of such termination and (iii) with respect to any rights the Executive has in respect of amounts credited to the Trust Account through the effective date of termination or pursuant to any insurance or other benefit plans or arrangements of the Company maintained for the benefit of its senior executives. The Executive hereby disclaims any right to receive a pro rata portion of the Executive's annual bonus with respect to the year in which such termination occurs. The fourth sentence of Section 3.3 and the provisions of Sections 3.8, 8.2, 8.3 and 9 through 12 and Annex A shall survive any termination pursuant to this Section 4.1.

4.2 Termination by Executive for Material Breach by the Company and Termination by the Company Without Cause. Unless previously terminated pursuant to any other provision of this Agreement and unless a Disability Period shall be in effect, the Executive shall have the right, exercisable by written notice to the Company, to terminate the term of employment (other than those provisions that specifically survive such termination) effective 15 days after the giving of such notice, if, at the time of the giving of such notice, the Company shall be in material breach of its obligations under this Agreement; provided, however, that with the exception of clause (i) below, this Agreement shall not so terminate if such notice is the first such notice of termination delivered by the Executive pursuant to this
Section 4.2 and within such 15 day period the Company shall have cured all such material breaches of its obligations under this Agreement. A material breach by the Company shall include, but not be limited to, (i) the Company failing to cause the Executive to retain the title of President or, if the Executive is appointed President and Chief Operating Officer, to thereafter retain such title, (ii) the Executive being required to report to persons other than those specified in Section 2; (iii) the Company violating the provisions of Section 2 or any written delegation from the Chief Executive Officer with respect to the Executive's authority, functions, duties, powers or responsibilities (whether or not accompanied by a change in title); (iv) the Company requiring the Executive's primary services to be rendered at a place other than at the Company's principal executive offices in the New York City metropolitan area;
(v) the Company breaching its obligations under the last paragraph of Section 2; and (vi) the Company failing to cause the successor to all or substantially all of the business and assets of the Company expressly to assume the obligations of the Company under this Agreement.

The Company shall have the right, exercisable by written notice to the Executive, to terminate the Executive's employment under this Agreement without cause, effective at least 30 days after the giving of such notice, which notice shall specify the effective date of such termination.

In the event of a termination pursuant to this Section 4.2, the Executive shall remain an employee of the Company as provided in Section 4.2.2. In such case, the following provisions shall apply:

4.2.1 After the effective date of such termination, the Executive shall have no further obligations or liabilities to the Company whatsoever, except that Sections 3.8, 4.6 and 4.8 and Sections 6 through 12 and Annex A shall survive such termination, and the Executive shall be entitled to receive any earned and unpaid Base Salary and deferred compensation accrued through the effective date of such termination and a pro rata portion of the Executive's annual bonus for the year in which such termination occurs through the date of such termination based on the average of the regular annual bonus amounts (excluding the amount of any special or spot bonuses) in respect of the two calendar years immediately preceding the calendar year in which such termination occurs, all or a portion of which pro rata bonus will be credited to the Trust Account or the Deferred Plan in accordance with any previous election made by the Executive to defer all or any portion of the Executive's bonus for such year pursuant to Section 3.4.

4.2.2 After the effective date of termination pursuant to this Section 4.2, the Executive shall remain an employee of the Company for the period ending on the Term Date, and during such period the Executive shall be entitled to receive, whether or not the Executive becomes disabled during such period but subject to Section 6, (a) salary at an annual rate equal to the Base Salary, (b) an annual bonus (all or a portion of which may be deferred by the Executive pursuant to Section 3.4) in respect of each calendar year or portion thereof (in which case a pro rata portion of such annual bonus will be payable) during such period equal to the average of the regular annual bonus amounts (excluding the amount of any special or spot bonuses) in respect of the two calendar years immediately preceding the calendar year in which such termination occurs (with any partial calendar year bonus appropriately pro rated according to the number of whole or partial months the Executive was employed by the Company in such calendar year) and (c) deferred compensation as provided in Section 3.3. Except as provided in the second succeeding sentence, if the Executive accepts full-time employment with any other Entity during such period or notifies the Company in writing of his intention to terminate his status as an employee during such period, then the Executive shall cease to be an employee of the Company effective upon the commencement of such employment or the effective date of such termination as specified by

the Executive in such notice, whichever is applicable, and the Executive shall be entitled to receive as severance in a lump sum within 30 days after such commencement or such effective date (provided that if the Executive was named in the compensation table in the Company's then most recent proxy statement, such lump sum payment shall be made within 30 days after the end of the calendar year in which such commencement or effective date occurred) an amount (discounted as provided in the immediately following) equal to the balance of the Base Salary, deferred compensation (which shall be credited as provided in the third sentence of Section 3.3) and regular annual bonuses (assuming no deferral pursuant to
Section 3.4) the Executive would have been entitled to receive pursuant to this
Section 4.2.2 had the Executive remained on the Company's payroll until the Term Date. The lump sum payment required to be made to the Executive pursuant to this
Section 4.2.2 shall be discounted to present value as of the date of payment from the times at which such amounts would have become payable absent any such termination at an annual discount rate for the relevant periods equal to 120% of the "applicable Federal rate" (within the meaning of Section 1274(d) of the Code), in effect on the date of such termination, compounded semi-annually. Notwithstanding the foregoing, if the Executive accepts employment with any not-for-profit Entity, then the Executive shall be entitled to remain an employee of the Company and receive the payments as provided in the first sentence of this Section 4.2.2; and if the Executive accepts full-time employment with any affiliate of the Company, then the payments (and credits) provided for in this Section 4.2.2 shall cease and the Executive shall not be entitled to any such lump sum payment. For purposes of this Agreement, the term "affiliate" shall mean any Entity which, directly or indirectly, controls, is controlled by, or is under common control with, the Company.

4.3 Optional Termination by Executive. The Executive shall have the right to elect by delivery of written notice to the Company, which notice may be delivered at any time on or after July 1, 2001, to terminate the term of employment and the Executive's position with the Company effective six months after the delivery of such notice and to serve as an advisor to the Company from the effective date of such notice through January 31, 2005 (the "Advisory Period"). During the Advisory Period, the Executive will remain an employee of the Company and will provide such advisory services concerning the business, affairs and management of the Company as may be required by the Board of Directors or the Chief Executive Officer of the Company, but shall not be required to devote more than five days (up to eight hours per day) each month to such service, which shall be performed at a time and place mutually convenient to both parties and consistent with the Executive's other activities. If at any time during the Advisory Period, the Executive engages in other full-time employment, the Executive shall not be deemed to be in breach of this Section 4.3, but unless such employment consists of the Executive providing services to one or more (i) charitable or non-profit organizations or (ii) family owned corporations, trusts, or partnerships, the

Advisory Period shall terminate, the Executive shall leave the payroll of the Company and the Company shall have no further obligations under this agreement other than with respect to earned and unpaid compensation and benefits. Notwithstanding the foregoing, but subject to Section 9 of this Agreement, during the Advisory Period the Executive may provide part-time services to third parties (including serving as a member of the Board of Directors of any such party). During the Advisory Period, the Executive shall be entitled to receive a Base Salary paid at the rate of $500,000 per annum and shall continue to be entitled to the benefits described in Sections 7 and 8 of the Agreement; provided, however, that the Executive shall not be entitled to deferred compensation, an annual bonus or any additional grants of stock options during the Advisory Period, shall not accrue any vacation time during the Advisory Period and shall not be entitled to any severance pay at the end thereof. In addition, during the Advisory Period, the Company shall provide the Executive with an office, office facilities and a secretary in accordance with the provisions of Section 4.5 of this Agreement.

4.4 After the Term Date. If at the Term Date, the term of employment shall not have been previously terminated pursuant to the provisions of this Agreement, no Disability Period is then in effect and the parties shall not have agreed in writing to an extension or renewal of this Agreement or on the terms of a new written employment agreement, then the term of employment shall continue and the Executive shall continue to be employed by the Company pursuant to the terms of this Agreement, subject to termination by either party hereto on 90 days written notice delivered to the other party. Such 90-day notice may be given by either party on or after October 1, 2004 so that the term of employment may end on the Term Date or any date thereafter. If this Agreement shall be terminated on or after the Term Date for any reason (other than by the Company for cause as defined in Section 4.1, in which case Section 4.1 shall apply), then the Executive shall receive Base Salary, deferred compensation and a pro rata annual bonus through the effective date of termination with the pro rata annual bonus being equal to the portion of the average of the regular annual bonus amounts (excluding the amount of any special or spot bonuses) in respect of the two calendar years immediately preceding the calendar year in which such termination occurs based on the number of whole or partial months in such year prior to the date of termination. At the end of the 90-day notice period provided for in the first sentence of this Section 4.4, the term of employment shall end and the Executive shall cease to be an employee of the Company and the Executive shall have no further obligations or liabilities to the Company whatsoever, except that Sections 3.8, 4.6 and 4.8 and Sections 6 through 12 and Annex A shall survive such termination.

4.5 Office Facilities. In the event of a termination of the Executive's employment pursuant to Section 4.2 , 4.3 or 4.4, then for the period beginning on the effective date of such termination and ending one year thereafter, the Company shall, without charge to

the Executive, make available to the Executive office space at the Executive's principal job location immediately prior to his termination of employment, or other location reasonably close to such location, together with secretarial services, office facilities, services and furnishings, in each case reasonably appropriate to an employee of the Executive's position and responsibilities prior to such termination of employment but taking into account the Executive's reduced need for such office space, secretarial services and office facilities, services and furnishings as a result of the Executive no longer being a full-time employee.

4.6 Release. In partial consideration for the Company's obligation to make the payments described in Section 4.2, the Company shall be entitled to require the Executive to execute and deliver to the Company a release in substantially the form attached hereto as Annex B. If the Company so elects, the Company shall deliver such release to the Executive within 10 days after the written notice of termination is delivered pursuant to Section 4.2 and the Executive shall execute and deliver such release to the Company within 21 days after receipt thereof. Upon receipt by the Company of such release signed by the Executive, the Company shall deliver to the Executive a release substantially in the form attached hereto as Annex C, signed by the Company. If the Company shall request the Executive to execute an Annex B release and the Executive shall fail to execute and deliver such release to the Company within such 21 day period, or if the Executive shall revoke his consent to such release as provided therein, the Company shall have no obligation to deliver the Annex C release and the Executive's term of employment shall terminate as provided in Section 4.2, but the Executive shall receive, in lieu of the payments provided for in said Section 4.2, a lump sum cash payment in an amount determined in accordance with the written personnel policies of the Company relating to notice and severance then generally applicable to senior executives of the Company with length of service and compensation level of the Executive.

4.7 Retirement. Notwithstanding the provisions of Sections 4.2, 4.4 or 5, if the term of employment is in effect and the Executive is still employed by the Company pursuant to this Agreement on the date the Executive first becomes eligible for normal retirement as defined in any applicable retirement plan of the Company or any subsidiary of the Company (the "Retirement Date"), then this Agreement shall terminate automatically on such date and the Executive's employment with the Company shall thereafter be governed by the policies generally applicable to employees of the Company, and the Executive shall not thereafter be entitled to the payments provided in such Sections to the extent not received by the Executive on or prior to the Retirement Date. In addition, no benefits or payments provided in Sections 4.2, 4.4 or 5 shall include any period after the Retirement Date and if the provision of benefits or calculation of payments provided in any such Section would include any period subsequent to the Retirement Date, such provision of

benefits shall end on the Retirement Date and the calculation of payments shall cover only the period ending on the Retirement Date. Notwithstanding the foregoing, the provisions of Annex A and the Trust Agreement shall apply to the investment and payment of deferred compensation after such termination, the provisions of Section 7 of this Agreement shall survive any such termination and the provisions of Sections 12.1 and 12.7 shall apply to any dispute with respect to this Agreement that arises after any such termination.

4.8 Mitigation. The payments provided for in this Agreement in the event of a termination without cause are not subject to mitigation unless the Executive's failure to mitigate would result in the Company losing tax deductions to which it would otherwise have been entitled. In such an event, the Executive will engage in whatsoever mitigation is necessary to preserve the Company's tax deductions. With respect to the preceding sentences, any payments or rights to which the Executive is entitled by reason of the termination of employment without cause shall be considered as damages hereunder. Any obligation of the Executive to mitigate the damages pursuant to this Section 4.8 shall not be a defense or offset to the Company's obligation to pay the Executive in full the amounts provided in this Agreement upon the occurrence of a termination without cause, at the time provided herein, or the timely and full performance of any of the Company's other obligations under this Agreement.

4.9 Payments. So long as the Executive remains on the payroll of the Company or any subsidiary of the Company, payments of salary, deferred compensation and bonus required to be made pursuant to Section 4.2, 4.3 or 4.4 shall be made at the same times as such payments are made to senior executives of the Company or such subsidiary.

5. Disability. If during the term of employment and prior to any termination of this Agreement under Section 4.2, 4.3 or 4.4, the Executive shall become physically or mentally disabled, whether totally or partially, so that he is prevented from performing his usual duties for a period of six consecutive months, or for shorter periods aggregating six months in any twelve-month period, the Company shall, nevertheless, continue to pay the Executive his full compensation and continue to make the deferred compensation credits when otherwise due, as provided in Section 3, through the last day of the sixth consecutive month of disability or the date on which the shorter periods of disability shall have equaled a total of six months in any twelve-month period (such last day or date being referred to herein as the "Disability Date"). If the Executive has not resumed his usual duties on or prior to the Disability Date, the Company shall pay the Executive a pro rata bonus for the portion of the calendar year in which the Disability Date occurs that shall precede such date and shall pay the Executive disability benefits for the period from the Disability Date through the Term Date (the "Disability Period"), in an annual amount equal to 75% of (a) the Base Salary (and

this reduced amount shall also be deemed to be the Base Salary for purposes of determining the amounts to be credited by the Company pursuant to Section 3.3 as further disability benefits) and (b) the average of the regular annual bonuses (excluding the amount of any special or spot bonuses) in respect of the two calendar years immediately preceding the year in which the Disability Date occurs (all or a portion of which may be deferred by the Executive pursuant to
Section 3.4), with the bonus for any partial calendar year pro rated according to the number of whole or partial months the Executive was employed by the Company in such calendar year. If during the Disability Period the Executive shall fully recover from his disability, the Company shall have the right (exercisable within 60 days after notice from the Executive of such recovery), but not the obligation, to restore the Executive to full-time service at full compensation. The Disability Period shall continue during such 60-day period. If the Company elects to restore the Executive to full-time service, then this Agreement shall continue in full force and effect in all respects, including without limitation, the provisions of Section 3 which shall apply in lieu of the Disability provisions of this Section 5, and the Term Date shall not be extended by virtue of the occurrence of the Disability Period. If the Company elects not to restore the Executive to full-time service, the Executive may terminate this Agreement by written notice to the Company within 60 days after the termination of the sixty-day period provided for above, in which case neither party shall have any further obligations hereunder after the date of such termination. If the Company elects not to restore the Executive to full-time service and the Executive does not elect to terminate this Agreement, the Executive shall be entitled to obtain other employment, subject, however, to the following: (i) the Executive shall be obligated to perform advisory services during any balance of the Disability Period; and (ii) the provisions of Sections 9 and 10 shall continue to apply to the Executive during the Disability Period. The advisory services referred to in clause (i) of the immediately preceding sentence shall consist of rendering advice concerning the business, affairs and management of the Company as requested by the Board of Directors or the Chief Executive Officer of the Company but the Executive shall not be required to devote more than five days (up to eight hours per day) each month to such services, which shall be performed at a time and place mutually convenient to both parties. Any income from such other employment shall not be applied to reduce the Company's obligations under this Agreement. The Company shall be entitled to deduct from all payments to be made to the Executive during the Disability Period pursuant to this Section 5 an amount equal to all disability payments received by the Executive during the Disability Period from Workmen's Compensation, Social Security and disability insurance policies maintained by the Company; provided, however, that for so long as, and to the extent that, proceeds paid to the Executive from such disability insurance policies are not includible in his income for federal income tax purposes, the Company's deduction with respect to such payments shall be equal to the product of (i) such payments and (ii) a fraction, the numerator of which is one and the denominator of which is one less the maximum marginal rate of

federal income taxes applicable to individuals at the time of receipt of such payments. All payments made under this Section 5 with respect to periods after the Disability Date are intended to be disability payments, regardless of the manner in which they are computed. Except as otherwise provided in this Section 5, the term of employment shall continue during the Disability Period and the Executive shall be entitled to all of the rights and benefits provided for in this Agreement, except that Section 4.2 shall not apply during the Disability Period (unless the Company terminates this Agreement in breach hereof in which case Section 4.2 shall apply) and unless the Company has restored the Executive to full-time service at full compensation prior to the end of the Disability Period, the term of employment shall end and the Executive shall cease to be an employee of the Company at the end of the Disability Period and shall not be entitled to notice and severance or to receive or be paid for any accrued vacation time or unused sabbatical.

6. Death. Upon the death of the Executive during the term of employment, this Agreement and all obligations of the Company to make any payments under Sections 3, 4 and 5 shall terminate except that (i) the Executive's estate (or a designated beneficiary) shall be entitled to receive, to the extent being received by the Executive immediately prior to his death, Base Salary and deferred compensation to the last day of the month in which his death occurs and bonus compensation (at the time bonuses are normally paid) based on the average of the regular annual bonuses (excluding the amount of any special or spot bonuses) in respect of the two calendar years immediately preceding the calendar year in which such death occurs, but prorated according to the number of whole or partial months the Executive was employed by the Company in such calendar year, and (ii) the Trust Account shall be liquidated and revalued as provided in Annex A as of the date of the Executive's death (except that all taxes shall be computed and charged to the Trust Account as of such date of death to the extent not theretofore so computed and charged) and the entire balance thereof (plus any amount due under the last paragraph of
Section A.7 of Annex A) shall be paid to the Executive's estate (or a designated beneficiary) in a single payment not later than 75 days following such date of death.

7. Life Insurance. Subject to the Executive's satisfactory completion of any applications and other documentation and any physical examinations that may be required by the insurer for any additional insurance, the Company shall obtain $5,000,000 face amount of split ownership life insurance on the life of the Executive, to be owned by the Executive or the trustees of a trust for the benefit of the Executive's spouse and/or descendants. Until the death of the Executive, and irrespective of any termination of this Agreement except pursuant to Section 4.1, the Company shall pay all premiums on such policy and shall maintain such policy (without reduction of the face amount of the coverage). The Company shall not borrow from the cash value of such policy. The Executive shall be entitled to designate the

beneficiary or beneficiaries of such policy, which may include a trust. At the death of the Executive, or on the earlier surrender of such policy by the owner, the Executive agrees that the Executive's estate or the owner of the policy shall promptly pay to the Company an amount equal to the premiums on such policy paid by the Company (net of (i) tax benefits, if any, to the Company in respect of payments of such premiums, (ii) any amounts payable by the Company which had been paid by or on behalf of the Executive with respect to such insurance, (iii) dividends received by the Company in respect of such premiums, but only to the extent such dividends are not used to purchase additional insurance on the life of the Executive, and (iv) any unpaid borrowings by the Company on the policy), whether before, during or after the term of this Agreement but in no event shall such payment to the Company exceed the amount of the death benefit paid under the policy. If other than the Company, the owner of the policy from time to time shall execute, deliver and maintain a customary split dollar insurance and collateral assignment form, assigning to the Company the proceeds of such policy but only to the extent necessary to secure the reimbursement obligation contained in the preceding sentence. In addition to the foregoing, during the Executive's employment with the Company, the Company shall (x) provide the Executive with $50,000 of group life insurance and (y) pay to the Executive annually an amount equal to the premium that the Executive would have to pay to obtain life insurance under the Group Universal Life ("GUL") insurance program made available by the Company in an amount equal to (i) twice the Executive's Base Salary minus (ii) $50,000. The Executive shall be under no obligation to use the payments made by the Company pursuant to the preceding sentence to purchase GUL insurance or to purchase any other life insurance. If the Company discontinues its GUL insurance program, the Company shall nevertheless make the payments required by this Section 7 as if such program were still in effect. The payments made to the Executive pursuant to this Section 7 shall not be considered as "salary" or "compensation" or "bonus" in determining the amount of any payment under any pension, retirement, profit-sharing or other benefit plan of the Company or any subsidiary of the Company.

8. Other Benefits.

8.1 General Availability. To the extent that (a) the Executive is eligible under the general provisions thereof and (b) the Company maintains such plan or program for the benefit of its senior executives, during the term of employment and so long as the Executive is an employee of the Company, the Executive shall be eligible to participate in any pension, profit-sharing, stock option or similar plan or program and in any group life insurance (to the extent set forth in Section 7), hospitalization, medical, dental, accident, disability or similar plan or program of the Company now existing or established hereafter. In addition, the Executive shall be entitled during the term of employment and so long as the Executive is an employee of the Company, to receive other benefits generally available to all

senior executives of the Company to the extent the Executive is eligible under the general provisions thereof, including, without limitation, to the extent maintained in effect by the Company for its senior executives, an automobile allowance and financial services.

In addition to any retirement benefits to which the Executive is entitled under the Time Warner Employees' Pension Plan, any supplemental retirement or excess benefit plan maintained by the Company or any of its affiliates or any successor plans thereto (hereinafter collectively referred to as the "Pension Plan"), the Company will, following the Executive's termination of employment for any reason, except by the Company for cause pursuant to Section 4.1 and except for a termination by the Executive in breach of this Agreement, pay or cause to be paid to the Executive or his beneficiary as the case may be, in accordance with the following provisions, an amount which is equivalent to the excess of (the "Excess Amount") (i) the amount such Executive or beneficiary would be entitled to receive under the Pension Plan assuming the Executive had five additional years of service (as such term is defined in the Pension Plan) taking into account all the provisions of the Pension Plan as are from time to time in effect and applicable to the Executive or his beneficiary over (ii) the amount such Executive or beneficiary would be entitled to receive under the Pension Plan based on actual years of service taking into account all the provisions of the Pension Plan as are from time to time in effect and applicable to the Executive or his beneficiary.

If the Executive or his beneficiary is entitled to an Excess Amount as described in the preceding paragraph, the Company shall pay the Excess Amount to the Executive or his beneficiary as follows. If the Executive is otherwise entitled to benefits under the Pension Plan, then the Excess Amount shall be paid at the same times and in the same manner as shall be elected by the Executive or his beneficiary for payment of amounts under the Pension Plan. If the Executive is not otherwise entitled to benefits under the Pension Plan, then the Excess Amount shall be paid at the time(s) and in one of the forms of payment permitted under the Pension Plan as elected by the Executive or his beneficiary. If the Executive or his beneficiary dies before any payments described above have been made, the payments shall be made to the beneficiary thereof at the same time and in the same manner as they would have been paid if the payments were to be made under the Pension Plan.

8.2 Benefits After a Termination or Disability. During the period the Executive remains on the payroll of the Company after a termination pursuant to Section 4.2 and during the Disability Period, the Executive shall continue to be eligible to participate in the benefit plans and to receive the benefits required to be provided to the Executive under Sections 7 and 8.1 to the extent such benefits are maintained in effect by the Company for its senior executives; provided, however, the Executive shall not be entitled to any additional

awards or grants under any stock option, restricted stock or other stock based incentive plan. The Executive shall continue to be an employee of the Company for purposes of any stock option and restricted shares agreements and any other incentive plan awards during the term of employment and until such time as the Executive shall leave the payroll of the Company. At the time the Executive's term of employment with the Company terminates and he leaves the payroll of the Company pursuant to the provisions of Section 4.1, 4.2, 4.3, 4.4, 5 or 6, the Executive's rights to benefits and payments under any benefit plans, programs or practices or any insurance or other death benefit plans or arrangements of the Company or under any stock option, restricted stock, stock appreciation right, bonus unit, management incentive or other plan of the Company shall be determined, subject to the other terms and provisions of this Agreement, in accordance with the terms and provisions of such plans, programs or practices and any agreements under which such stock options, restricted stock or other awards were granted; provided, however, that notwithstanding the foregoing or any more restrictive provisions of any such plan or agreement, if the Executive leaves the payroll of the Company as a result of a termination pursuant to
Section 4.2 or 4.3, then (i) all stock options granted to the Executive by the Company shall vest and become immediately exercisable at the time the Executive shall leave the payroll of the Company pursuant to Section 4.2 or 4.3, (ii) all stock options granted to the Executive by the Company shall remain exercisable (but not beyond the expiration of the option term) during the remainder of the term of employment and for a period of three months thereafter or such longer period as shall be specified in any applicable stock option agreement and (iii) the Company shall not be permitted to determine that the Executive's employment was terminated for "unsatisfactory performance" within the meaning of any stock option agreement between the Company and the Executive.

8.3 Payments in Lieu of Other Benefits. In the event the term of employment and the Executive's employment with the Company is terminated pursuant to Sections 4.1, 4.2, 4.3, 4.4, 5 or 6, the Executive shall not be entitled to notice and severance or to be paid for any accrued vacation time or unused sabbatical, the payments provided for in such Sections being in lieu thereof.

8.4 Stock Options. During the term of employment, the Executive shall be eligible to receive grants of stock options in the discretion of the Compensation Committee of the Company's Board of Directors. If the term of employment is terminated pursuant to Section 4.3, then all stock options granted to the Executive after the Effective Date shall become immediately exercisable in full on the date of such termination and shall remain exercisable (but not beyond the expiration of the option term) for five years after the date of such termination.

9. Protection of Confidential Information; Non-Compete. The Executive acknowledges that his employment by the Company (which, for purposes of this Section 9 shall mean Time Warner Inc. and its affiliates) will, throughout the term of employment, bring him into close contact with many confidential affairs of the Company, including information about costs, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not readily available to the public, and plans for future development. The Executive further acknowledges that the services to be performed under this Agreement are of a special, unique, unusual, extraordinary and intellectual character. The Executive further acknowledges that the business of the Company is international in scope, that its products are marketed throughout the world, that the Company competes in nearly all of its business activities with other Entities that are or could be located in nearly any part of the world and that the nature of the Executive's services, position and expertise are such that he is capable of competing with the Company from nearly any location in the world. In recognition of the foregoing, the Executive covenants and agrees as set forth below in this Section 9.

9.1 Confidentiality Covenant. The Executive covenants and agrees that (i) through the date he ceases to be an employee of the Company and leaves the payroll of the Company for any reason, and (ii) for twelve months after the effective date of termination of the Executive's employment and of the other provisions of this Agreement pursuant to Section 4.1, 4.2, 4.3 or 4.4, and
(iii) with respect to Sections 9.1.1. and 9.1.2, for an additional 36 months after the later of the dates described in clauses (i) and (ii) above:

9.1.1 The Executive shall keep secret all confidential matters of the Company and shall not intentionally disclose such matters to anyone outside of the Company, either during or after the term of employment, except during the term of employment, in connection with his duties hereunder, or except with the Company's written consent, provided that (i) the Executive shall have no such obligation to the extent such matters are or become publicly known other than as a result of the Executive's breach of his obligations hereunder and (ii) the Executive may, after giving prior notice to the Company to the extent practicable under the circumstances, disclose such matters to the extent required by applicable laws or governmental regulations or judicial or regulatory process.

9.1.2 The Executive shall deliver promptly to the Company on termination of his employment by the Company, or at any other time the Company may so request, at the Company's expense, all memoranda, notes, records, reports and other documents (and all copies thereof) relating to the Company's business, other than publicly available documents or documents relating to the terms and conditions of the Executive's employment, which he obtained while employed by, or otherwise serving or acting on behalf

of, the Company and which he may then possess or have under his control; provided that if the Executive is to continue as a director, consultant or advisor to the Company after such termination, the Executive may retain such documents as are necessary or appropriate to the performance of his duties unless and until the Company requests that such documents be delivered to it; and

9.1.3 If the term of employment is terminated pursuant to Section 4.1, 4.2 , 4.3 or 4.4, the Executive shall not employ, and shall not cause any Entity of which he is an affiliate to employ, without the prior written consent of the Company, any person who was a full-time exempt employee of the Company at the date of such termination or within six months prior thereto.

9.2 Non-Compete. The Executive covenants and agrees that (i) through the date the Executive ceases to be an employee of the Company and leaves the payroll of the Company for any reason, and (ii) with respect to an Entity that is engaged in competition with the Company and that had, or the parent Entity or predecessor Entity of which had, consolidated gross revenues from all sources, including non-competitive businesses, of $2 billion or more for the fiscal year preceding the Executive's commencement of service for such Entity, through the date that is the earlier of (a) twelve months after the effective date of any notice of termination of the Executive's employment with the Company pursuant to Section 4.1 or 4.2 and (b) the Term Date, the Executive shall not, directly or indirectly, without the prior written consent of the Chief Executive Officer of the Company, render any services to any person or Entity or acquire any interest of any type in any Entity, that shall be deemed in competition with the Company; provided, however, that the foregoing shall not be deemed to prohibit the Executive from (a) acquiring, solely as an investment and through market purchases, securities of any Entity which are registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and which are publicly traded, so long as he is not part of any control group of such Entity and such securities, if converted, do not constitute more than one percent (1%) of the outstanding voting power of that Entity or (b) acquiring, solely as an investment, any securities of an Entity (other than an Entity that has outstanding securities covered by the preceding clause (a)) so long as he remains a passive investor in such Entity and does not become part of any control group thereof. Notwithstanding the foregoing, if the term of employment is terminated pursuant to Section 4.3, then the provisions of the preceding sentence shall not apply to the Executive after the effective date of such termination. For purposes of the foregoing, a person or Entity shall be deemed to be in competition with the Company if such person or it engages in any line of business that is substantially the same as either (i) any line of operating business which the Company engages in, conducts or, to the knowledge of the Executive, has definitive plans to engage in or conduct or (ii) any operating business that is engaged in or conducted by the Company and as

to which, to the knowledge of the Executive, the Company covenants in writing, in connection with the disposition of such business, not to compete therewith. Notwithstanding the preceding sentence, following the effective date of any termination under Section 4 of this Agreement (including during the Advisory Period contemplated by Section 4.3), only the following Entities shall be deemed to be in competition with the Company: AT&T Corporation, Bertelsmann A.G., The Walt Disney Company, General Electric Corporation, The News Corporation, The Seagram Company, Ltd., Sony Corporation, Viacom Inc. and their respective subsidiaries and affiliates and any successor to any of the media and entertainment business thereof.

9.3 Specific Remedy. In addition to such other rights and remedies as the Company may have at equity or in law with respect to any breach of this Agreement, if the Executive commits a material breach of any of the provisions of Section 9.1, the Company shall have the right and remedy to have such provisions specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company.

9.4 Liquidated Damages. If the Executive commits a material breach of the provisions of Section 9.2, the Executive shall pay to the Company as liquidated damages an amount equal to three times the Executive's then current Base Salary, or if the Executive is not employed by the Company at the time of such breach, an amount equal to three times the most recent Base Salary paid to the Executive by the Company. The Company shall be entitled to offset any amounts owed by the Executive to the Company under this Section 9.4 against any amounts owed by the Company to the Executive under any provision of this Agreement or otherwise, including without limitation, amounts payable to the Executive under Sections 4.2, 4.3 or 4.4. The Company and the Executive agree that it is impossible to determine with any reasonable accuracy the amount of prospective damages to the Company upon a breach of Section 9.2 by the Executive and further agree that the damages set forth in this Section 9.4 are reasonable, and not a penalty, based upon the facts and circumstances of the parties and with due regard to future expectations.

10. Ownership of Work Product. The Executive acknowledges that during the term of employment, he may conceive of, discover, invent or create inventions, improvements, new contributions, literary property, material, ideas and discoveries, whether patentable or copyrightable or not (all of the foregoing being collectively referred to herein as "Work Product"), and that various business opportunities shall be presented to him by reason of his employment by the Company. The Executive acknowledges that all of the foregoing shall be owned by and belong exclusively to the Company and that he shall have no personal

interest therein, provided that they are either related in any manner to the business (commercial or experimental) of the Company, or are, in the case of Work Product, conceived or made on the Company's time or with the use of the Company's facilities or materials, or, in the case of business opportunities, are presented to him for the possible interest or participation of the Company. The Executive shall (i) promptly disclose any such Work Product and business opportunities to the Company; (ii) assign to the Company, upon request and without additional compensation, the entire rights to such Work Product and business opportunities; (iii) sign all papers necessary to carry out the foregoing; and (iv) give testimony in support of his inventorship or creation in any appropriate case. The Executive agrees that he will not assert any rights to any Work Product or business opportunity as having been made or acquired by him prior to the date of this Agreement except for Work Product or business opportunities, if any, disclosed to and acknowledged by the Company in writing prior to the date hereof. Notwithstanding the foregoing, the Executive may, provided that Section 9.2 is complied with, acquire an interest in any business opportunity presented to the Company hereunder if the Company declines to pursue such business opportunity and if such investment is approved by the Chief Executive Officer of the Company in writing.

11. Notices. All notices, requests, consents and other communications required or permitted to be given under this Agreement shall be effective only if given in writing and shall be deemed to have been duly given if delivered personally or sent by prepaid telegram, or mailed first-class, postage prepaid, by registered or certified mail, as follows (or to such other or additional address as either party shall designate by notice in writing to the other in accordance herewith):

11.1 If to the Company:

Time Warner Inc. 75 Rockefeller Plaza New York, New York 10019 Attention: Chief Executive Officer

(with a copy, similarly addressed but Attention: General Counsel)

11.2 If to the Executive, to his residence address set forth on the records of the Company.

12. General.

12.1 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the substantive laws of the State of New York applicable to agreements made and to be performed entirely in New York.

12.2 Captions. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

12.3 Entire Agreement. This Agreement, including Annexes A, B and C, sets forth the entire agreement and understanding of the parties relating to the subject matter of this Agreement and supersedes all prior agreements, arrangements and understandings, written or oral, between the parties, including without limitation, the Prior Agreement.

12.4 No Other Representations. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or be liable for any alleged representation, promise or inducement not so set forth.

12.5 Assignability. This Agreement and the Executive's rights and obligations hereunder may not be assigned by the Executive. The Company may (but is not obligated to) assign its rights together with its obligations hereunder (a) to AOL Time Warner Inc., or (b) in connection with any sale, transfer or other disposition of all or substantially all of its business and assets; and upon any such assignment, such rights and obligations shall inure to and be binding upon AOL Time Warner Inc. and any successor to all or substantially all of the business and assets of the Company, whether by merger, purchase of stock or assets or otherwise, as the case may be.

12.6 Amendments; Waivers. This Agreement may be amended, modified, superseded, cancelled, renewed or extended and the terms or covenants hereof may be waived only by written instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect such party's right at a later time to enforce the same. No waiver by either party of the breach of any term or covenant contained in this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement.

12.7 Resolution of Disputes. Any dispute or controversy arising with respect to this Agreement shall, at the election of either the Company or the Executive, be submitted to JAMS/ENDISPUTE for resolution in arbitration in accordance with the rules and procedures of JAMS/ENDISPUTE. Either party shall make such election by delivering written notice thereof to the other party at any time (but not later than 45 days after such party receives notice of the commencement of any administrative or regulatory proceeding or the filing of any lawsuit relating to any such dispute or controversy) and thereupon any such dispute or controversy shall be resolved only in accordance with the provisions of this Section 12.7. Any such proceedings shall take place in New York City before a single arbitrator (rather than a panel of arbitrators), pursuant to any streamlined or expedited (rather than a comprehensive) arbitration process, before a nonjudicial (rather than a judicial) arbitrator, and in accordance with an arbitration process which, in the judgment of such arbitrator, shall have the effect of reasonably limiting or reducing the cost of such arbitration. The resolution of any such dispute or controversy by the arbitrator appointed in accordance with the procedures of JAMS/ENDISPUTE shall be final and binding. Judgment upon the award rendered by such arbitrator may be entered in any court having jurisdiction thereof, and the parties consent to the jurisdiction of the New York courts for this purpose. The prevailing party shall be entitled to recover the costs of arbitration (including reasonable attorneys fees and the fees of experts) from the losing party. If at the time any dispute or controversy arises with respect to this Agreement, JAMS/ENDISPUTE is not in business or is no longer providing arbitration services, then the American Arbitration Association shall be substituted for JAMS/ENDISPUTE for the purposes of the foregoing provisions of this Section 12.7. If the Executive shall be the prevailing party in such arbitration, the Company shall promptly pay, upon demand of the Executive, all legal fees, court costs and other costs and expenses incurred by the Executive in any legal action seeking to enforce the award in any court.

12.8 Beneficiaries. Whenever this Agreement provides for any payment to the Executive's estate, such payment may be made instead to such beneficiary or beneficiaries as the Executive may designate by written notice to the Company. The Executive shall have the right to revoke any such designation and to redesignate a beneficiary or beneficiaries by written notice to the Company (and to any applicable insurance company) to such effect.

12.9 No Conflict. The Executive represents and warrants to the Company that this Agreement is legal, valid and binding upon the Executive and the execution of this Agreement and the performance of the Executive's obligations hereunder does not and will not constitute a breach of, or conflict with the terms or provisions of, any agreement or understanding to which the Executive is a party (including, without limitation,

any other employment agreement). The Company represents and warrants to the Executive that this Agreement is legal, valid and binding upon the Company and the execution of this Agreement and the performance of the Company's obligations hereunder does not and will not constitute a breach of, or conflict with the terms or provisions of, any agreement or understanding to which the Company is a party.

12.10 Withholding Taxes. Payments made to the Executive pursuant to this Agreement shall be subject to withholding and social security taxes and other ordinary and customary payroll deductions.

12.11 No Offset. Except as provided in Section 9.4 of this Agreement, neither the Company nor the Executive shall have any right to offset any amounts owed by one party hereunder against amounts owed or claimed to be owed to such party, whether pursuant to this Agreement or otherwise, and the Company and the Executive shall make all the payments provided for in this Agreement in a timely manner.

12.12 Severability. If any provision of this Agreement shall be held invalid, the remainder of this Agreement shall not be affected thereby; provided, however, that the parties shall negotiate in good faith with respect to equitable modification of the provision or application thereof held to be invalid. To the extent that it may effectively do so under applicable law, each party hereby waives any provision of law which renders any provision of this Agreement invalid, illegal or unenforceable in any respect.

12.13 Definitions. The following terms are defined in this Agreement in the places indicated:

Account Retained Income - Section A.6 of Annex A affiliate - Section 4.2.2 Applicable Tax Law - Section A.5 of Annex A Base Salary - Section 3.1 cause - Section 4.1
Code - Section 3.2
Company - the first paragraph on page 1 and Section 9.1 deferred compensation - Section 3.3 Disability Date - Section 5 Disability Period - Section 5 Effective Date - the first paragraph on page 1 eligible securities - Section A.1 of Annex A Entity - Section 2
Excess Amount - Section 8.1

Executive - the first paragraph in page 1 fair market value - Section A.1 of Annex A Investment Advisor - Section A.1 of Annex A Pay-Out Period - Section A.6 of Annex A Pension Plan - Section 8.1 Prior Account - Section 3.5 Prior Agreement - the second paragraph on page 1 Rabbi Trust - Section 3.3 Retirement Date - Section 4.7 senior executives - Section 3.1 Term Date - the second paragraph on page 1 term of employment - Section 1 Trust Account - Section 3.3 Trust Agreement - Section 3.3 Trustee - Section 3.3 Valuation Date - Section A.6 of Annex A Work Product - Section 10

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

TIME WARNER INC.

By  /s/ Gerald M. Levin
    ----------------------------
    Gerald M. Levin
    Chairman and Chief
    Executive Officer


     /s/ Richard D. Parsons
    ----------------------------
     Richard D. Parsons

ANNEX A

Deferred Compensation Account

A.1 Investments. Funds credited to the Trust Account shall be actually invested and reinvested in an account in securities selected from time to time by an investment advisor designated from time to time by the Company (the "Investment Advisor"), substantially all of which securities shall be "eligible securities". The designation from time to time by the Company of an Investment Advisor shall be subject to the approval of the Executive, which approval shall not be withheld unreasonably. "Eligible securities" are common and preferred stocks, warrants to purchase common or preferred stocks, put and call options, and corporate or governmental bonds, notes and debentures, either listed on a national securities exchange or for which price quotations are published in newspapers of general circulation, including The Wall Street Journal, and certificates of deposit. Eligible securities shall not include the common or preferred stock, any warrants, options or rights to purchase common or preferred stock or the notes or debentures of the Company or any corporation or other entity of which the Company owns directly or indirectly 5% or more of any class of outstanding equity securities. The Investment Advisor shall have the right, from time to time, to designate eligible securities which shall be actually purchased and sold for the Trust Account on the date of reference. Such purchases may be made on margin; provided that the Company may, from time to time, by written notice to the Executive, the Trustee and the Investment Advisor, limit or prohibit margin purchases in any manner it deems prudent and, upon three business days written notice to the Executive, the Trustee and the Investment Advisor, cause all eligible securities theretofore purchased on margin to be sold. The Investment Advisor shall send notification to the Executive and the Trustee in writing of each transaction within five business days thereafter and shall render to the Executive and the Trustee written quarterly reports as to the current status of his or her Trust Account. In the case of any purchase, the Trust Account shall be charged with a dollar amount equal to the quantity and kind of securities purchased multiplied by the fair market value of such securities on the date of reference and shall be credited with the quantity and kind of securities so purchased. In the case of any sale, the Trust Account shall be charged with the quantity and kind of securities sold, and shall be credited with a dollar amount equal to the quantity and kind of securities sold multiplied by the fair market value of such securities on the date of reference. Such charges and credits to the Trust Account shall take place immediately upon the consummation of the transactions to which they relate. As used herein "fair market value" means either (i) if the security is actually purchased or sold by the Rabbi Trust on the date of reference, the actual purchase or sale price per security to the Rabbi Trust or (ii) if the security is not purchased or sold on the date of reference, in the case of a listed security, the closing price per security on the date of reference, or if there were no sales on such date, then the

closing price per security on the nearest preceding day on which there were such sales, and, in the case of an unlisted security, the mean between the bid and asked prices per security on the date of reference, or if no such prices are available for such date, then the mean between the bid and asked prices per security on the nearest preceding day for which such prices are available. If no bid or asked price information is available with respect to a particular security, the price quoted to the Trustee as the value of such security on the date of reference (or the nearest preceding date for which such information is available) shall be used for purposes of administering the Trust Account, including determining the fair market value of such security. The Trust Account shall be charged currently with all interest paid by the Trust Account with respect to any credit extended to the Trust Account. Such interest shall be charged to the Trust Account, for margin purchases actually made, at the rates and times actually paid by the Trust Account. The Company may, in the Company's sole discretion, from time to time serve as the lender with respect to any margin transactions by notice to the then Investment Advisor and the Trustee and in such case interest shall be charged at the rate and times then charged by an investment banking firm designated by the Company with which the Company does significant business. Brokerage fees shall be charged to the Trust Account at the rates and times actually paid.

A.2 Dividends and Interest. The Trust Account shall be credited with dollar amounts equal to cash dividends paid from time to time upon the stocks held therein. Dividends shall be credited as of the payment date. The Trust Account shall similarly be credited with interest payable on interest bearing securities held therein. Interest shall be credited as of the payment date, except that in the case of purchases of interest-bearing securities the Trust Account shall be charged with the dollar amount of interest accrued to the date of purchase, and in the case of sales of such interest-bearing securities the Trust Account shall be credited with the dollar amount of interest accrued to the date of sale. All dollar amounts of dividends or interest credited to the Trust Account pursuant to this Section A.2 shall be charged with all taxes thereon deemed payable by the Company (as and when determined pursuant to Section A.5). The Investment Advisor shall have the same right with respect to the investment and reinvestment of net dividends and net interest as he has with respect to the balance of the Trust Account.

A.3 Adjustments. The Trust Account shall be equitably adjusted to reflect stock dividends, stock splits, recapitalizations, mergers, consolidations, reorganizations and other changes affecting the securities held therein.

A.4 Obligation of the Company. Without in any way limiting the obligations of the Company otherwise set forth in the Agreement or this Annex A, the

Company shall have the obligation to establish, maintain and enforce the Rabbi Trust and to make payments to the Trustee for credit to the Trust Account in accordance with the provisions of Section 3.3 of the Agreement, to use due care in selecting the Trustee or any successor trustee and to in all respects work cooperatively with the Trustee to fulfill the obligations of the Company and the Trustee to the Executive. The Trust Account shall be charged with all taxes (including stock transfer taxes), interest, brokerage fees and investment advisory fees, if any, payable by the Company and attributable to the purchase or disposition of securities designated by the Investment Advisor (in all cases net after any tax benefits that the Company would be deemed to derive from the payment thereof, as and when determined pursuant to Section A.5) and only in the event of a default by the Company of its obligation to pay such fees and expenses, the fees and expenses of the Trustee in accordance with the terms of the Trust Agreement, but no other costs of the Company. Subject to the terms of the Trust Agreement, the securities purchased for the Trust Account as designated by the Investment Advisor shall remain the sole property of the Company, subject to the claims of its general creditors, as provided in the Trust Agreement. Neither the Executive nor his legal representative nor any beneficiary designated by the Executive shall have any right, other than the right of an unsecured general creditor, against the Company or the Trust in respect of any portion of the Trust Account.

A.5 Taxes. The Trust Account shall be charged with all federal, state and local taxes deemed payable by the Company with respect to income recognized upon the dividends and interest received by the Trust Account pursuant to Section A.2 and gains recognized upon sales of any of the securities which are sold pursuant to Section A.1, A.6 or A.7. The Trust Account shall be credited with the amount of the tax benefit received by the Company as a result of any payment of interest actually made pursuant to Section A.1 or A.2 and as a result of any payment of brokerage fees and investment advisory fees made pursuant to Section A.1. If any of the sales of the securities which are sold pursuant to Section A.1, A.6 or A.7 results in a loss to the Trust Account, such net loss shall be deemed to offset the income and gains referred to in the second preceding sentence (and thus reduce the charge for taxes referred to therein) to the extent then permitted under the Internal Revenue Code of 1986, as amended from time to time, and under applicable state and local income and franchise tax laws (collectively referred to as "Applicable Tax Law"); provided, however, that for the purposes of this Section A.5 the Trust Account shall, except as provided in the third following sentence, be deemed to be a separate corporate taxpayer and the losses referred to above shall be deemed to offset only the income and gains referred to in the second preceding sentence. Such losses shall be carried back and carried forward within the Trust Account to the extent permitted by Applicable Tax Law in order to minimize the taxes deemed payable on such income and gains within the Trust Account. For the purposes of this Section A.5, all

charges and credits to the Trust Account for taxes shall be deemed to be made as of the end of the Company's taxable year during which the transactions, from which the liabilities for such taxes are deemed to have arisen, are deemed to have occurred. Notwithstanding the foregoing, if and to the extent that in any year there is a net loss in the Trust Account that cannot be offset against income and gains in any prior year, then an amount equal to the tax benefit to the Company of such net loss (after such net loss is reduced by the amount of any net capital loss of the Trust Account for such year) shall be credited to the Trust Account on the last day of such year. If and to the extent that any such net loss of the Trust Account shall be utilized to determine a credit to the Trust Account pursuant to the preceding sentence, it shall not thereafter be carried forward under this Section A.5. For purposes of determining taxes payable by the Company under any provision of this Annex A it shall be assumed that the Company is a taxpayer and pays all taxes at the maximum marginal rate of federal income taxes and state and local income and franchise taxes (net of assumed federal income tax benefits) applicable to business corporations and that all of such dividends, interest, gains and losses are allocable to its corporate headquarters, which are currently located in New York City.

A.6 One-Time Transfer to Deferred Plan. So long as the Executive is an employee of the Company, the Executive shall have the right to elect at any time, but only once during the Executive's lifetime, by written notice to the Company to transfer to the Deferred Plan all or a portion of the Net Transferable Balance (determined as provided in the next sentence) of the Trust Account. If the Executive shall make such an election, the Net Transferable Balance shall be determined as of the end of the calendar quarter following the date of such election (unless such election is made during the ten calendar days following the end of a calendar quarter, in which case such determination shall be made as of the end of such preceding calendar quarter) by adjusting all of the securities held in the Trust Account to their fair market value (net of the tax adjustment that would be made thereon if sold, as estimated by the Company or the Trustee) and by deducting from such value the amount of all outstanding indebtedness and any other amounts payable by the Trust Account. Transfers to the Deferred Plan shall be made in cash as promptly as reasonably practicable after the end of such calendar quarter and the Investment Advisor (or the Company or the Trustee if the Investment Advisor shall fail to act in a timely manner) shall cause securities held in the Trust Account to be sold to provide cash equal to the portion of the Net Transferable Balance of the Trust Account selected to be transferred by the Executive. If the Executive elects to transfer more than 75% of the Net Transferable Balance of the Trust Account to the Deferred Plan, the Company or the Trustee shall be permitted to take such action as they may deem reasonably appropriate, including but not limited to, retaining a portion of such Net Transferable Balance

in the Trust Account, to ensure that the Trust Account will have sufficient assets to pay the Company the amount of taxes payable on such sales of securities at the end of the year in which such sales are made.

A.7 Payments. Payments of deferred compensation shall be made as provided in this Section A.7. Unless the Executive makes the election referred to in the next succeeding sentence, deferred compensation shall be paid bi-weekly for a period of ten years (the "Pay-Out Period") commencing on the first Company payroll date in the month following the later of (i) the Term Date and (ii) the date the Executive ceases to be an employee of the Company and leaves the payroll of the Company for any reason, provided, however, that if the Executive was named in the compensation table in the Company's then most recent proxy statement, such payments shall commence on the first Company payroll date in January of the year following the year in which the latest of such events occurs. The Executive may elect a shorter Pay-Out Period by delivering written notice to the Company or the Trustee at least one-year prior to the commencement of the Pay-Out Period, which notice shall specify the shorter Pay-Out Period. On each payment date, the Trust Account shall be charged with the dollar amount of such payment. On each payment date, the amount of cash held in the Trust Account shall be not less than the payment then due and the Company or the Trustee may select the securities to be sold to provide such cash if the Investment Advisor shall fail to do so on a timely basis. The amount of any taxes payable with respect to any such sales shall be computed, as provided in Section A.5 above, and deducted from the Trust Account, as of the end of the taxable year of the Company during which such sales are deemed to have occurred. Solely for the purpose of determining the amount of payments during the Pay-Out Period, the Trust Account shall be valued on the fifth trading day prior to the end of the month preceding the first payment of each year of the Pay-Out Period, or more frequently at the Company's or the Trustee's election (the "Valuation Date"), by adjusting all of the securities held in the Trust Account to their fair market value (net of the tax adjustment that would be made thereon if sold, as estimated by the Company or the Trustee) and by deducting from the Trust Account the amount of all outstanding indebtedness. The extent, if any, by which the Trust Account, valued as provided in the immediately preceding sentence, plus any amounts that have been transferred to the Deferred Plan pursuant to Section
A.6 hereof and not theretofore distributed or deemed distributed therefrom, exceeds the aggregate amount of credits to the Trust Account pursuant to Sections 3.3, 3.4 and 3.5 of the Agreement as of each Valuation Date and not theretofore distributed or deemed distributed pursuant to this Section A.6 is herein called "Account Retained Income". The amount of each payment for the year, or such shorter period as may be determined by the Company or the Trustee, of the Pay-Out Period immediately succeeding such Valuation Date, including the payment then due, shall be determined by dividing the aggregate value of the Trust Account, as valued and adjusted pursuant to the second preceding sentence, by the number of payments remaining to be paid in the Pay-Out

Period, including the payment then due; provided that each payment made shall be deemed made first out of Account Retained Income (to the extent remaining after all prior distributions thereof since the last Valuation Date). The balance of the Trust Account, after all the securities held therein have been sold and all indebtedness liquidated, shall be paid to the Executive in the final payment, which shall be decreased by deducting therefrom the amount of all taxes attributable to the sale of any securities held in the Trust Account since the end of the preceding taxable year of the Company, which taxes shall be computed as of the date of such payment.

If this Agreement is terminated by the Company pursuant to
Section 4.1 or if the Executive terminates this Agreement or the term of employment in breach of this Agreement, the Trust Account shall be valued as of the later of (i) the Term Date or (ii) twelve months after termination of the Executive's employment with the Company, and the balance of the Trust Account, after the securities held therein have been sold and all related indebtedness liquidated, shall be paid to the Executive as soon as practicable and in any event within 75 days following the later of such dates in a final lump sum payment, which shall be decreased by deducting therefrom the amount of all taxes attributable to the sale of any securities held in the Trust Account since the end of the preceding taxable year of the Company, which taxes shall be computed as of the date of such payment. Payments made pursuant to this paragraph shall be deemed made first out of Account Retained Income.

If the Executive becomes disabled within the meaning of
Section 5 of the Agreement and is not thereafter returned to full-time employment with the Company as provided in said Section 5, then deferred compensation shall be paid bi-weekly during the Pay-Out Period commencing on the first Company payroll date in the month following the end of the Disability Period in accordance with the provisions of the first paragraph of this Section
A.7.

If the Executive shall die at any time whether during or after the term of employment, the Trust Account shall be valued as of the date of the Executive's death and the balance of the Trust Account shall be paid to the Executive's estate or beneficiary within 75 days of such death in accordance with the provisions of the second preceding paragraph.

Notwithstanding the foregoing provisions of this Section A.7, if the Rabbi Trust shall terminate in accordance with the provisions of the Trust Agreement, the Trust Account shall be valued as of the date of such termination and the balance of the Trust Account shall be paid to the Executive within 15 days of such termination in accordance with the provisions of the third preceding paragraph.

If a transfer to the Deferred Plan has been made pursuant to
Section A.6 hereof, payments made to the Executive from the Deferred Plan (a) shall be deemed made first from the amounts transferred to the Deferred Plan pursuant to Section A.6 and (b) shall be deemed made first out of Account Retained Income.

Within 90 days after the end of each taxable year of the Company in which payments are made, directly or indirectly, to the Executive from the Trust Account or from the Deferred Plan with respect to amounts transferred to the Deferred Plan from the Trust Account pursuant to Section A.6 and at the time of the final payment from the Trust Account, the Company or the Trustee shall compute and the Company shall pay to the Trustee for credit to the Trust Account, the amount of the tax benefit assumed to be received by the Company from the payment to the Executive of amounts of Account Retained Income during such taxable year or since the end of the last taxable year, as the case may be. No additional credits shall be made to the Trust Account pursuant to the preceding sentence in respect of the amounts credited to the Trust Account pursuant to the preceding sentence. Notwithstanding any provision of this
Section A.7, the Executive shall not be entitled to receive pursuant to this Annex A (including any amounts that have been transferred to the Deferred Plan pursuant to Section A.6 hereof) an aggregate amount that shall exceed the sum of
(i) all credits made to the Trust Account pursuant to Sections 3.3, 3.4 and 3.5 of the Agreement, (ii) the net cumulative amount (positive or negative) of all income, gains, losses, interest and expenses charged or credited to the Trust Account pursuant to this Annex A (excluding credits made pursuant to the second preceding sentence), after all credits and charges to the Trust Account with respect to the tax benefits or burdens thereof, and (iii) an amount equal to the tax benefit to the Company from the payment of the amount (if positive) determined under clause (ii) above; and the final payment(s) otherwise due may be adjusted or eliminated accordingly. In determining the tax benefit to the Company under clause (iii) above, the Company shall be deemed to have made the payments under clause (ii) above with respect to the same taxable years and in the same proportions as payments of Account Retained Income were actually made from the Trust Account. Except as otherwise provided in this paragraph, the computation of all taxes and tax benefits referred to in this Section A.7 shall be determined in accordance with Section A.5 above.

ANNEX B

RELEASE

Pursuant to the terms of the Employment Agreement made as of _____________, between TIME WARNER INC., a Delaware corporation (the "Company"), 75 Rockefeller Plaza, New York, New York 10019 and the undersigned (the "Agreement"), and in consideration of the payments made to me and other benefits to be received by me pursuant thereto, I, [Name], being of lawful age, do hereby release and forever discharge the Company and its officers, shareholders, subsidiaries, agents, and employees, from any and all actions, causes of action, claims, or demands for general, special or punitive damages, attorney's fees, expenses, or other compensation, which in any way relate to or arise out of my employment with the Company or any of its subsidiaries or the termination of such employment, which I may now or hereafter have under any federal, state or local law, regulation or order, including without limitation, under the Age Discrimination in Employment Act, as amended, through and including the date of this Release; provided, however, that the execution of this Release shall not prevent the undersigned from bringing a lawsuit against the Company to enforce its obligations under the Agreement.

I acknowledge that I have been given at least 21 days from the day I received a copy of this Release to sign it and that I have been advised to consult an attorney. I understand that I have the right to revoke my consent to this Release for seven days following my signing. This Release shall not become effective or enforceable until the expiration of the seven-day period following the date it is signed by me.

I further state that I have read this document and the Agreement referred to herein, that I know the contents of both and that I have executed the same as my own free act.

WITNESS my hand this ____ day of ___________ , ____.

ANNEX C

RELEASE

In connection with the Employment Agreement made as of , between TIME WARNER INC., (the "Company"), and [TK] (the "Agreement"), the Company does hereby release and forever discharge [TK] and his estate, heirs, beneficiaries and representatives, from any and all actions, causes of action, claims, or demands for general, special or punitive damages, attorney's fees, expenses, or other compensation, which in any way relate to or arise out of his employment with the Company or any of its affiliates or the termination of such employment, which the Company may now or hereafter have under any federal, state or local law, regulation or order, through and including the date of this Release; provided, however, that the execution of this Release shall not prevent the Company from bringing a lawsuit against [TK] (x) to enforce his obligations under [Section 9] of the Agreement or (y) to seek damages or reimbursement for fraud or embezzlement committed by him during his employment with the Company.

IN WITNESS WHEREOF the Company has caused this Release to be executed on its behalf by a duly authorized officer this day of , 199 .

TIME WARNER INC.

AMENDED AND RESTATED PARTNERSHIP AGREEMENT

OF

TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP

Dated as of February 1, 2001

AMENDED AND RESTATED PARTNERSHIP AGREEMENT
OF
TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP

TABLE OF CONTENTS

                                                                                         Page
                                                                                         ----
SECTION 1   DEFINITIONS....................................................................1
1.1      Terms Defined in this Section.....................................................1
1.2      Terms Defined Elsewhere in this Agreement........................................22

SECTION 2   THE PARTNERSHIP AND ITS BUSINESS..............................................24
2.1      Formation........................................................................24
2.2      Partnership Name and Trade Names.................................................24
2.3      Term of the Partnership..........................................................25
2.4      Purposes.........................................................................25
2.5      Principal Office and Other Offices...............................................26
2.6      Foreign Qualification............................................................26
2.7      Fiscal Year......................................................................26
2.8      Addresses of the Partners........................................................26
2.9      Property.........................................................................26
2.10     Certain Operating Policies.......................................................27

SECTION 3   MANAGEMENT OF THE PARTNERSHIP.................................................27
3.1      Generally........................................................................27
3.2      Limitations On Managing Partner..................................................34
3.3      Business Plans...................................................................37

SECTION 4   PARTNERSHIP CAPITAL...........................................................38
4.1      Capital Contributions............................................................38
4.2      Partnership Units................................................................42
4.3      Indebtedness.....................................................................44

SECTION 5   CASH DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES.........................45
5.1      Distributions....................................................................45
5.2      Redemption of Preferred Partnership Units........................................50
5.3      Allocations of Preferred Profit; Preferred Loss; Net Profit and Net Loss.........51
5.4      Section 754 Adjustment...........................................................54
5.5      Other Allocation Rules...........................................................54
5.6      Tax Allocations..................................................................56
5.7      Allocation in Event of Transfer..................................................56
5.8      Beneficial Assets and Subsidiary Beneficial Assets...............................56
5.9      Set-off..........................................................................57

SECTION 6   TRANSFERS OF PARTNERSHIP INTERESTS............................................58
6.1      Restrictions on Transfer.........................................................58

SECTION 7   ADVANCE/NEWHOUSE REPRESENTATION ON TWE COMMITTEE..............................59
7.1      TWE Full Service Network Management Committee....................................59

SECTION 8   RESTRUCTURING OF PARTNERSHIP AT ELECTION OF EITHER PARTNER....................59
8.1      Election by Partner..............................................................59
8.2      Restructuring of Partnership.....................................................60
8.3      Provision of Interim Services by TWE.............................................64
8.4      TWE Right of First Refusal.......................................................66

SECTION 9   ADVANCE/NEWHOUSE PUT OPTION...................................................66

SECTION 10  OTHER BUSINESS ACTIVITIES.....................................................72
10.1     Cable Television Systems.........................................................72
10.2     Programming Opportunities........................................................74
10.3     Other Services...................................................................75
10.4     Programming Carriage Commitment..................................................76
10.5     Advance/Newhouse Right of First Offer............................................76

SECTION 11  BOOKS AND RECORDS; ACCOUNTING; FISCAL YEAR....................................77
11.1     Books and Records................................................................77
11.2     Annual Financial Statements......................................................77
11.3     Additional Financial Information.................................................78
11.4     Tax Return Information...........................................................78
11.5     Other Information................................................................78
11.6     Bank Accounts....................................................................79
11.7     Other Audit Procedures...........................................................79
11.8     Tax Allocations..................................................................79

SECTION 12  DISSOLUTION...................................................................80
12.1     Causes of Dissolution............................................................80
12.2     Effect of Dissolution............................................................80
12.3     Winding Up and Liquidation.......................................................81

SECTION 13  INDEMNIFICATION...............................................................81
13.1     Indemnification by Partnership...................................................81
13.2     Indemnification by Partners......................................................82
13.3     Procedures.......................................................................82
13.4     Survival.........................................................................83

SECTION 14  REPRESENTATIONS...............................................................83
14.1     Organization, Standing, and Authority............................................83
14.2     Absence of Conflicting Agreements................................................83
14.3     Claims and Legal Actions.........................................................83

SECTION 15  MISCELLANEOUS.................................................................84
15.1     Acknowledgments..................................................................84
15.2     Bill for Partition...............................................................84

15.3     Notices..........................................................................84
15.4     Amendments.......................................................................84
15.5     Waivers and Further Assurances; Entire Agreement.................................84
15.6     Severability.....................................................................85
15.7     Specific Enforcement; Attorneys  Fees............................................85
15.8     Counterparts.....................................................................85
15.9     Captions; Gender.................................................................85
15.10    Governing Law; Venue; Disputes...................................................85
15.11    Binding Effect...................................................................85
15.12    Third Parties....................................................................86
15.13    Confidentiality..................................................................86
15.14    Liability of Partners............................................................86

AMENDED AND RESTATED PARTNERSHIP AGREEMENT

OF

TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP

This Amended and Restated Partnership Agreement (this "Agreement") was entered into as of February 1, 2001 by and between Advance/Newhouse Partnership, a New York general partnership ("Advance/Newhouse"), Time Warner Entertainment Company, L.P., a Delaware limited partnership ("TWE"), and Paragon Communications, a Colorado general partnership ("Paragon").

PRELIMINARY STATEMENT

The Partnership was formed pursuant to a Partnership Agreement dated as of September 9, 1994 (the "Original Agreement") between Advance/Newhouse and TWE, pursuant to which, and in accordance with the Contribution Agreement (as defined below), Advance/Newhouse and TWE each agreed, subject to certain conditions, to contribute or to cause to be contributed certain cable television systems and other assets to the Partnership. The parties hereto amended the Original Agreement pursuant to the First Amendment, dated as of February 12, 1998, the Second Amendment, dated as of December 31, 1998, and the Third Amendment, dated as of March 1, 1999 (collectively the "Prior Amendments"), pursuant to which, among other things, Paragon became a Partner. The parties desire to enter into this Agreement to continue the Partnership, and to provide for the allocation of profit and loss, cash flow, and other proceeds of the Partnership among the Partners, the respective rights, obligations, and interests of the Partners to each other and to the Partnership, and certain other matters.

AGREEMENTS

In consideration of the mutual covenants and agreements set forth in this Agreement, the parties, intending to be bound legally, agree as follows.

SECTION 1 DEFINITIONS

1.1 Terms Defined in this Section. As used in this Agreement, the following terms have the following meanings:

"Act" means the New York Uniform Partnership Law, as from time to time in effect.

"Adjusted Tax Amount" means, for any year, with respect to any Partner, the product of (i) such Partner's Percentage Interest, and (ii) the amount determined by dividing (a) the product of (I) the Special Tax Amount of Advance/Newhouse for such year, and (II) the Rate Differential, by (b) the Advance/Newhouse Percentage Interest.

"Advance" means Advance Publications, Inc., a New York corporation.

"Advance/Newhouse Accountants" means the independent auditors or other auditors selected by Advance/Newhouse.

"Advance/Newhouse Loss Amount" means, with respect to a Fiscal Year, an estimate of the maximum amount of Taxable Loss of the Partnership for such Fiscal Year that is utilizable to offset other income, whether from the Partnership or any other source, of Advance/Newhouse or the Persons that are the taxpayers with respect to income of Advance/Newhouse (after taking into account the Special Income of Advance/Newhouse for such Fiscal Year).

"Advance/Newhouse Owner" means any Person owning a direct or indirect equity interest in Advance/Newhouse or any Affiliate of such Person.

"Advance/Newhouse Percentage Interest" means a fraction (expressed as a percentage) the numerator of which is the number of Common Partnership Units owned by Advance/Newhouse and the denominator of which is the total number of Common Partnership Units owned by all Partners.

"Advance/Newhouse Redemption Event" means:

(i) the death of any individual that requires Advance or Newhouse to redeem stock to pay estate taxes or other expenses described in Section 303 of the Code;

(ii) any action by the Board of Directors or other body or Person exercising similar management authority of Advance/Newhouse, any Advance/Newhouse Owner, or any Affiliate of Advance/Newhouse obligating Advance/Newhouse, such Advance/Newhouse Owner, or such Affiliate to make capital expenditures for aggregate consideration in excess of $10 million in any single transaction or series of transactions;

(iii) the decision by the Board of Directors or other body or Person exercising similar management authority of Advance/Newhouse, any Advance/Newhouse Owner, or any Affiliate of Advance/Newhouse to reduce indebtedness of Advance/Newhouse, such Advance/Newhouse Owner, or such Affiliate by an amount in excess of $10 million;

(iv) receipt by Advance/Newhouse of notice from the Partnership that it is obligated to contribute cash to the Partnership pursuant to the Contribution Agreement subsequent to the Initial Closing Date;

(v) the failure of the Partnership to maintain a ratio of Indebtedness to EBITDA that is less than or equal to 6:1;

(vi) the failure of the Partnership to maintain a ratio of net worth to Indebtedness that is greater than 1:1;

(vii) the failure of the Partnership to maintain a ratio of (A) EBITDA for the preceding four full fiscal quarters minus aggregate capital expenditures for such period, to (B) interest expense that is greater than 4:1;

(viii) the entry of a judgment or any other determination of liability in excess of $10 million by a court or other governmental authority against Advance/Newhouse, any Advance/Newhouse Owner, or any Affiliate of Advance/Newhouse; or

(ix) the receipt by Advance/Newhouse of an Indebtedness Notice pursuant to Section 4.3(c) which indicates that the Indebtedness intended to be incurred, created or assumed by the Partnership would restrict in any manner distributions by the Partnership with respect to any Preferred Partnership Units.

"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such Person, except that:

(i) neither the Partnership nor any Person controlled by the Partnership shall be deemed to be an Affiliate of a Partner or of any Affiliate of such Partner solely by virtue of such Partner's Partnership Interest;

(ii) no Partner nor any Affiliate of any Partner shall be deemed to be an Affiliate of the other Partners or of any Affiliate of the other Partners solely by virtue of the Partners' Partnership Interests; and

(iii) neither Paragon nor USW shall be deemed an Affiliate of TWE, the TWE Cable Division or TWX.

"Agreement" means this Partnership Agreement, as it may be amended, modified, or supplemented from time to time in accordance with its terms.

"Applicable Contribution Period" means, with respect to any asset contributed to the Partnership, (a) if for Federal income tax purposes such asset was deemed contributed to the Partnership on or before June 8, 1997, five years, (b) if for Federal income tax purposes such asset was deemed contributed to the Partnership after June 8, 1997, seven years, and (c) in the event that the time period specified in Section 704(c)(1)(B) of the Code (or any successor provision) is amended, then for any asset deemed for Federal income tax purposes to be contributed on or after the effective date of such amendment, the time period specified in such amendment.

"Beneficial Asset" has the meaning ascribed thereto in the Contribution Agreement.

"Capital Account" means an account to be maintained for each Partner which, subject to any contrary requirements of the Code, shall equal the aggregate value of such Partner's Partnership Interest on the Fourth Effective Date,

(A) increased by (i) the amount of cash contributed by such Partner to the Partnership after the Fourth Effective Date (not including interest paid by such Partner pursuant to Section 4.1(b)(ii), Section 4.1(b)(iii), Section 4.1(b)(iv), Section 4.1(b)(v), Section 5.1(a)(iii)(z) or Section 5.1(b)(iii)(z) and not including cash deemed contributed by any Partner pursuant to Section 4.1(e)); (ii) the fair market value without regard to Code Section 7701(g) of property contributed by such Partner to the Partnership after the Fourth Effective Date (net of liabilities secured by such contributed property that the Partnership is considered to assume or take subject to under Code Section 752) (treating any Subsidiary Beneficial Assets and other Beneficial Assets as if they had been contributed on the Initial Closing Date, the First Effective Date, the Second Effective Date, the Third Effective Date or the Fourth Effective Date, as applicable, and disregarding any subsequent actual contribution of such Subsidiary Beneficial Assets and other Beneficial Assets and any cash flow related thereto); (iii) allocations to it after the Fourth Effective Date of Preferred Profit, Gross Profit and Net Profit pursuant to Section 5; (iv) the amount of any liabilities of the Partnership that are assumed by such Partner pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(c); and (v) other additions made in accordance with the Code and the provisions of Treasury Regulations
Section 1.704-1(b)(2)(iv); and

(B) decreased by (i) the amount of cash distributed to such Partner by the Partnership after the Fourth Effective Date; (ii) allocations to the Partner after the Fourth Effective Date of Preferred Loss, Gross Loss and Net Loss pursuant to Section 5; (iii) the fair market value without regard to Code Section 7701(g) of property distributed to such Partner by the Partnership after the Fourth Effective Date (net of liabilities secured by such distributed property or that such Partner is considered to assume or take subject to under Code Section 752) (taking into account any deemed distributions of Subsidiary Beneficial Assets and other Beneficial Assets); (iv) the amount of such Partner's individual liabilities that are assumed by the Partnership after the Fourth Effective Date pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(c); and (v) other deductions made in accordance with the Code and the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv).

Notwithstanding the foregoing, for purposes of determining Capital Accounts, (u) all of the adjustments, contributions or distributions required pursuant to the Contribution Agreement to be made subsequent to the Initial Closing Date and the contribution of TWE pursuant to Section 4.1(c)(ii) hereof shall be treated as if they had been made on the Initial Closing Date, (v) the Paragon Adjustment Amount and the TWE Adjustment Amount (as such terms are defined in Section 10 of the First Transaction Agreement)

shall be treated as if they had been made on the First Effective Date, (w) all of the adjustments, contributions or distributions required pursuant to the Second Transaction Agreement or the TCI Contribution Agreement shall be treated as if they had been made on the Second Effective Date, (x) all of the adjustments, contributions or distributions required pursuant to the Third Transaction Agreement shall be treated as if they had been made on the Third Effective Date, (y) all of the adjustments, contributions or distributions required pursuant to the Fourth Transaction Agreement shall be treated as if they had been made on the Fourth Effective Date and (z) such adjustments, contributions, distributions, and Adjustment Amounts shall not give rise to any adjustments to Capital Account balances or redetermination of amounts contributed by or distributed to any Partner.

"Capital Contribution" means either a Common Capital Contribution, a Preferred Capital Contribution, a Series A Preferred Capital Contribution, a Series B Preferred Capital Contribution or a Series C Preferred Capital Contribution.

"Code" means the Internal Revenue Code of 1986, as amended from time to time, and any subsequent federal law of similar import, and, to the extent applicable, the Treasury Regulations.

"Common Capital Contribution" means, (i) with respect to Advance/Newhouse, the amount of cash contributed by such Partner to the Partnership pursuant to this Agreement (other than cash deemed contributed in exchange for Preferred Partnership Units pursuant to Section 4.1(e)) plus the fair market value without regard to Code Section 7701(g) of property contributed by such Partner to the Partnership pursuant to this Agreement (net of liabilities that are secured by such contributed property or that either Partner is considered to assume under Code Section 752); and (ii) with respect to each of Paragon and TWE, the excess of (A) the amount of cash contributed by such Partner to the Partnership pursuant to this Agreement (other than cash deemed contributed in exchange for Preferred Partnership Units pursuant to Section 4.1(e)) plus the fair market value without regard to Code Section 7701(g) of property contributed by such Partner to the Partnership pursuant to this Agreement (net of liabilities that are secured by such contributed property or that either Partner is considered to assume under Code Section 752), over (B) in the case of Paragon, the sum of the Series A Preferred Capital Contribution and the Series B Preferred Capital Contribution and the Series C Preferred Capital Contribution of such Partner and, in the case of TWE, the Series C Preferred Capital Contribution of such Partner; and (iii) with respect to all Partners treating any Subsidiary Beneficial Assets and other Beneficial Assets as if they had been contributed on the Initial Closing Date, the First Effective Date, the Second Effective Date, the Third Effective Date or the Fourth Effective Date, as applicable, and disregarding any subsequent actual contribution of such Subsidiary Beneficial Assets or other Beneficial Assets and any cash flow related thereto.

"Common Partnership Unit" means the measure of a Partner's right to certain distributions and allocations, as specified in Section 5.

"Common Tax Amount" means, for any year, with respect to any Partner, the amount obtained by multiplying (a) the Effective Tax Rate for such year by (b) the excess, if any, of (i) the sum of the Net Profit or Gross Profit allocated to such Partner for such year (other than pursuant to Sections 5.3(b)(i), 5.3(b)(ii), 5.3(b)(iii), 5.3(d)(i) and 5.3(d)(ii)), over (ii) the Net Loss or Gross Loss allocated to such Partner for each prior year (other than pursuant to
Section 5.3(d)(ii) and 5.3(c)(ii)) but only to the extent that the amounts set forth in this clause (ii) were not used in reducing the Common Tax Amount for such prior year or any intervening year.

"Contribution Agreement" means the Contribution Agreement, dated as of September 9, 1994, as amended from time to time, among the Partnership, the Partners, Advance and Newhouse.

"control" (including the terms "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

"Controlled Affiliate" means, with respect to any Person, any Affiliate of such Person that is controlled by such Person, directly or indirectly through one or more intermediaries.

"Debt Shift Tax Amount" means, in the case of Paragon and TWE, with respect to a restructuring pursuant to Section 8.2, the sum of :

(i) the product of (a) the Special Effective Tax Rate for the year in which such restructuring occurs, and (b) the excess, if any, of (I) the amount of the Partnership's liabilities at the time of such restructuring that prior to such restructuring was allocated to such Partner pursuant to Section 752 of the Code and that are assumed by Advance/Newhouse pursuant to Section 8.2(b)(iv), over (II) the sum of (x) the tax basis of such Partner in its Partnership Interest immediately prior to such restructuring (taking into account adjustments required by Section 704(c)(1)(B) of the Code, if any), and (y) the amount of the Partnership's liabilities at the time of such restructuring guaranteed by such Partner pursuant to Section 8.2(b)(iv), and

(ii) the present value, using the Discount Rate, of an amount for each of the Remaining Years equal to the product of (a) the Special Effective Tax Rate for the year in which such restructuring occurs, and (b) the product of
(I)(y) the amount determined under clause (i)(b) above with respect to such Partner divided by (z) the number of Remaining Years, and (II) the Tax Adjustment Percentage for such year of restructuring.

"Depreciation" means, for each fiscal period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such fiscal period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes Depreciation shall be determined as set forth in Treasury Regulations Section 1.704-3(d).

"Determined Percentage" means 35%.

"Discount Rate" means the product of (a) the sum of (i) the rate on outstanding obligations of the United States with remaining periods to maturity equal to the weighted average of the remaining useful lives at the time of determination of the assets contributed to the Partnership and (ii) one and one-half percentage points, and (b) the excess of one (1) over the effective combined rate of Federal, state and local income and franchise tax applicable to corporations at the time of determination, assuming the combined state and local income and franchise tax is 2.5% (after benefit of Federal taxes).

"Distributable Cash" means, at any time, all cash of the Partnership other than cash attributable to the Preferred Investment Pool that, in the judgment of the Managing Partner, can then be distributed to the Partners without violating any contractual restriction to which the Partnership or any Subsidiary is subject and that is not otherwise necessary for the operation of the Partnership (including any reserves of such cash established by the Partnership for any Partnership purpose).

"DMA" means "Designated Market Area" in the Code of Federal Regulations at 47 C.F.R. 76.55.

"EBITDA" means, for any period, operating income before interest, income taxes, depreciation and amortization for such period determined in accordance with the prior practices of the Managing Partner, consistently applied, or as the Partners shall mutually agree.

"Effective Tax Rate" means, at any time, and from time to time, the percentage determined by the Managing Partner to be a reasonable estimate of the highest marginal combined Federal, state, and local income tax rate (giving effect to the deduction of state and local income taxes, as applicable, for Federal and state income tax purposes), applicable to corporations doing business in New York City or individuals residing in New York City (whichever is higher), with respect to taxable income allocated to the Partners by the Partnership for Federal income tax purposes.

"Excess Debt Shift Tax Amount" means, in the case of Paragon and TWE with respect to a restructuring pursuant to Section 8.2 and with respect to the assets contributed by Paragon and TWE, respectively and specified in calculating the Restructuring Deferred Tax Amount, the excess, if any, of (a) the Debt Shift Tax Amount with respect to such Partner over (b) the product of (y) the Special Effective Tax Rate for the year in which such restructuring occurs, and (z) the sum of (1) such Partner's Special Income attributable to such assets for each Fiscal Year (or portion thereof) subsequent to such restructuring (assuming that such restructuring did not occur), and (2) such Partner's Maximum Income Amount for each such subsequent Fiscal Year (or portion thereof) based on the Special Income determined in clause (1).

"Final Determination" means (i) a decision, judgment, decree or other order by a court of original jurisdiction which has become final (i.e., the time for filing an appeal

shall have expired), (ii) a closing agreement made under Section 7121 of the Code or any other settlement agreement entered into in connection with an administrative or judicial proceeding, provided, however, that any refund claim shall be deemed approved without regard to any required approval by the Joint Committee on Taxation, (iii) the expiration of the time for instituting a claim for refund, or if a claim was filed, the expiration of the time for instituting suit with respect thereto or (iv) in any case where judicial review shall be unavailable, a decision, judgment, decree or other order of an administrative official or agency which has become final.

"First Advance/Newhouse Contribution Amount" has the meaning ascribed to "Advance/Newhouse Contribution Amount" in Section 5 of the First Transaction Agreement.

"First Effective Date" means February 12, 1998.

"First Transaction Agreement" means the Amended and Restated Transaction Agreement, dated as of October 27, 1997, among Advance, Newhouse, Advance/Newhouse, TWE, TW Holding Co. and the Partnership.

"Fourth Advance/Newhouse Contribution Amount" has the meaning ascribed to "Advance/Newhouse Contribution Amount" in Section 4 of the Fourth Transaction Agreement.

"Fourth Effective Date" means February 1, 2001.

"Fourth Transaction Agreement" means the Amended and Restated Transaction Agreement, dated as of February 1, 2001, among Advance, Newhouse, Advance/Newhouse, TWE, Paragon and the Partnership.

"GAAP" means generally accepted accounting principles, consistently applied.

"Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:

(i) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership (including the Beneficial Assets and Subsidiary Beneficial Assets) shall be the gross fair market value of such asset, as determined in accordance with Sections 4.1(b), 4.1(c) and 4.1(d);

(ii) The Gross Asset Value of all assets of the Partnership (including the Beneficial Assets and Subsidiary Beneficial Assets) shall be adjusted to equal their respective gross fair market values, as agreed to by the Partners, as of the following times: (a) the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Common Capital Contribution (other than any Common Capital Contribution made pursuant to the Contribution Agreement or the proviso of Section 4.1(d)(ii)); (b) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property as consideration for an interest in the Partnership (other than any redemption of Preferred Partnership Units

pursuant to Section 5.2); and (c) the liquidation of the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that the adjustments pursuant to clauses (a) and (b) above shall be made only if the Partners agree that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;

(iii) The Gross Asset Value of any asset distributed by the Partnership (including the Beneficial Assets and Subsidiary Beneficial Assets) to any Partner shall be the gross fair market value of such asset on the date of distribution as determined by such Partner and the Partnership; and

(iv) The Gross Asset Value of the assets of the Partnership (including the Beneficial Assets and Subsidiary Beneficial Assets) shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and Section 5.4; provided, however, that Gross Asset Value shall not be adjusted pursuant to this paragraph (iv) to the extent that an adjustment was made pursuant to paragraph
(ii) of this definition in connection with any transaction that would otherwise have resulted in an adjustment pursuant to this paragraph (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to paragraph (i), (ii), or (iv) of this definition, the Gross Asset Value of such asset shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Profit and Net Loss. In the event that, pursuant to the Contribution Agreement, any adjustment, contribution or distribution is made subsequent to the Initial Closing Date, the Gross Asset Values of the assets of the Partnership shall be adjusted, as of the first day of the Fiscal Year in which such adjustment, contribution or distribution occurs, so as to reflect the gross fair market values of such assets on a basis consistent with the determinations giving rise to such adjustment, contribution or distribution, as determined by the Managing Partner in any manner that reasonably reflects the purpose and intention of this Agreement.

"Gross Loss" means, with respect to any year, the items of deduction or loss of the Partnership computed on the same basis that Net Profit and Net Loss are computed for purposes of this Agreement.

"Gross Profit" means, with respect to any year, the items of income and gain of the Partnership computed on the same basis that Net Profit and Net Loss are computed for purposes of this Agreement.

"Indebtedness" means (i) debt for money borrowed and similar monetary obligations evidenced by bonds, notes, debentures, or other similar instruments, other than trade accounts payable in the ordinary course of business, (ii) obligations with respect to letters of credit, and (iii) guaranties, endorsements, and other contingent obligations whether direct or indirect in respect of liabilities of others of any of the types

described in clauses (i) and (ii) above (other than endorsements for collection or deposit in the ordinary course of business).

"Initial Closing Date" means April 1, 1995.

"Maximum Income Amount" means, for any year, with respect to any Partner, an amount equal to the product of (i) the Tax Adjustment Percentage for such year, and (ii) the Special Income of such Partner for such year.

"Modification of Final Judgment" means the Modification of Final Judgment entered on August 24, 1982, in U.S. v. American Telephone and Telegraph Company, 552 F. Supp. 131 (D.D.C. 1982), or any of its terms which may have been statutorily codified, as amended or modified to date and from time to time hereafter.

"Negative Put Deferred Tax Amount" means, with respect to a sale of Advance/Newhouse Common Partnership Units pursuant to Section 9, the product of
(x) the Advance/Newhouse Percentage Interest at the time of such sale and (y) the sum of the amounts determined as follows with respect to each of TWE and Paragon with respect to the assets of the Partnership at the time of the Advance/Newhouse Common Put Closing that were contributed by TWE and Paragon, respectively:

(a) the product of (i) the Special Effective Tax Rate for the year in which such sale occurs, and (ii) the sum of (A) the Special Income attributable to such assets for the Fiscal Year (or portion thereof) in which such sale occurs, (B) the excess of (y) the Maximum Income Amount of such Fiscal Year (or portion thereof) (based on the Special Income determined in clause (A)) and for all prior years, over (z) the Net Profit allocated to such Partner pursuant to
Section 5.3(b)(iii) for such Fiscal Year (or portion thereof) and all prior Fiscal Years, and (C) to the extent any Net Loss or Gross Loss allocated to such Partner for any prior year was used to reduce such Partner's Special Tax Amount for any prior year (pursuant to clause (b)(ii)(y) of the definition of Special Tax Amount) and was not subsequently used to increase such Partner's Special Tax Amount (pursuant to clause (b)(i)(z) of such definition), an amount (expressed as a positive number) equal to the sum of such Net Loss and Gross Loss, and

(b) the present value, using the Discount Rate, of an amount for each Fiscal Year (or portion thereof) subsequent to such sale equal to the product of
(I) the Special Effective Tax Rate of such Partner for the year in which such sale occurs, and (II) the sum of (A) the Special Income attributable to such assets for each such subsequent Fiscal Year (or portion thereof), and (B) the Maximum Income Amount for each such subsequent Fiscal Year (or portion thereof) based on the Special Income determined in clause (A)).

"Net Cumulative Preferred Taxable Income" means, with respect to a distribution pursuant to Section 5.1(a)(i), the net cumulative income, gain, deduction and loss realized by the Partnership for Federal income tax purposes with respect to the Preferred Investment Pool during the period commencing on the Initial Closing Date and ending on the last day of the fiscal quarter immediately preceding the date of such distribution.

"Net Profit" and "Net Loss" mean, for each Fiscal Year or other period, an amount equal to the Partnership's taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

(i) Any income of the Partnership that is exempt from Federal income tax and not otherwise taken into account in computing Net Profit or Net Loss shall be added to such taxable income or loss;

(ii) Any expenditures of the Partnership described in Code Section
705(a)(2)(B), or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), that are not otherwise taken into account in computing Net Profit or Net Loss shall be subtracted from such taxable income or loss;

(iii) If the Gross Asset Value of any asset of the Partnership is adjusted pursuant to paragraph (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Profit or Net Loss;

(iv) Gain or loss resulting from any disposition of Partnership property with respect to which gain or loss is recognized for Federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year or other period;

(vi) To the extent any adjustment to the adjusted tax basis of any asset of the Partnership pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner's interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Profit and Net Loss;

(vii) For purposes of this Agreement, any deduction for a loss on a sale or exchange of Partnership property that is disallowed to the Partnership under Code Section 267(a)(1) or Code Section 707(b) shall be treated as a Code
Section 705(a)(2)(B) expenditure;

(viii) Net Profit and Net Loss shall be calculated after eliminating any amounts of Preferred Profit or Preferred Loss for any Fiscal Year or other period; and

(ix) Net Profit and Net Loss shall be calculated as if the Subsidiary Beneficial Assets had been contributed to the Partnership on the Initial Closing Date, the First Effective Date, the Second Effective Date, the Third Effective Date or the Fourth Effective Date, as applicable, and the amount of taxes subtracted in determining the Free Cash Flow Amount pursuant to Section 6.7 of the Contribution Agreement shall be subtracted from the Partnership's taxable income or taxable loss for such year or period.

"Net Tax Amount" means, for any year, with respect to any Partner, the sum of (i) the Common Tax Amount of such Partner for such year, (ii) the Special Tax Amount of such Partner for such year, and (iii) the Adjusted Tax Amount of such Partner for such year.

"Newhouse" means Newhouse Broadcasting Corporation, a New York corporation.

"Paragon" means Paragon Communications, a Colorado general partnership (or any successor).

"Paragon 704(c)(1)(B) Tax Amount" means, on a restructuring and with respect to assets described in Section 8.2(b)(vii)(A)(I), the sum of:

(i) the product of (a) the Special Effective Tax Rate for the year in which such restructuring occurs, and (b) the gain recognized as a result of such restructuring by Paragon with respect to such assets pursuant to Section 704(c)(1)(B) of the Code (taking into account Section 704(c)(2) and assuming, for purposes of calculating such gain, that the fair market value of such assets is equal to their Gross Asset Value at the time of such restructuring), and

(ii) the present value, using the Discount Rate, of an amount for each of the Remaining Years equal to the product of (a) the Special Effective Tax Rate for the year in which such restructuring occurs, and (b) the product of (I)
(y) the amount determined under clause (i)(b) above divided by (z) the number of Remaining Years, and (II) the Tax Adjustment Percentage for such year of restructuring.

"Paragon Percentage Interest" means a fraction (expressed as a percentage) the numerator of which is the number of Common Partnership Units owned by Paragon and the denominator of which is the total number of Common Partnership Units owned by all Partners.

"Paragon Redemption Event" means the delivery of a written notice by Paragon to the Partnership indicating that it wishes the Partnership to redeem its Preferred Partnership Units.

"Partners" means Advance/Newhouse, TWE and Paragon and their respective successors-in-interest as Partners under this Agreement, and "Partner" means any of such Partners.

"Partnership" means the partnership created by the Partners pursuant to this Agreement.

"Partnership Interest" means, as to any Partner or as to any other Person subsequently admitted as a partner of the Partnership, all of the interest of such Person in the Partnership, including such Person's (i) right to a distributive share of the income, gain, losses, and deductions of the Partnership in accordance with this Agreement, which shall be measured by the number and type of Partnership Units held by such Person under this Agreement,
(ii) right to a distributive share of the Partnership's assets, which shall be measured by the number and type of Partnership Units held by such Person under this Agreement, (iii) obligations as a partner, and (iv) rights with respect to the management of the business and affairs of the Partnership, as provided herein or by law.

"Partnership Systems" means the cable television systems now owned or hereafter acquired, directly or indirectly, by the Partnership including, without limitation, the Beneficial Assets and Subsidiary Beneficial Assets (other than cable television systems owned by Paragon).

"Partnership Unit" means either a "Common Partnership Unit," a "Preferred Partnership Unit," a "Series A Preferred Partnership Unit," a "Series B Preferred Partnership Unit" or a "Series C Preferred Partnership Unit," as defined in this Agreement.

"Percentage Interests" means the Advance/Newhouse Percentage Interest, the TWE Percentage Interest and the Paragon Percentage Interest.

"Person" means any natural person, corporation, general or limited partnership, limited liability company, joint venture, trust, association, unincorporated entity of any kind, or a government or any department or agency thereof.

"Positive Put Deferred Tax Amount" means, with respect to a sale of Advance/Newhouse Common Partnership Units pursuant to Section 9, the product of
(x) one (1) minus the Advance/Newhouse Percentage Interest at the time of such sale and (y) the sum of the amounts determined as follows with respect to the assets of the Partnership at the time of the Advance/Newhouse Common Put Closing that were contributed by Advance/Newhouse:

(a) the product of (i) the Special Effective Tax Rate for the year in which such sale occurs, and (ii) the sum of (A) the Special Income attributable to such assets for the Fiscal Year (or portion thereof) in which such sale occurs, (B) the excess of (y) the Maximum Income Amount of such Fiscal Year (or portion thereof) (based on the Special Income determined in clause (A)) and for all prior years, over (z) the Net Profit allocated to such Partner pursuant to
Section 5.3(b)(iii) for such Fiscal Year (or portion

thereof) and all prior Fiscal Years, and (C) to the extent any Net Loss or Gross Loss allocated to such Partner for any prior year was used to reduce such Partner's Special Tax Amount for any prior year (pursuant to clause (b)(ii)(y) of the definition of Special Tax Amount) and was not subsequently used to increase such Partner's Special Tax Amount (pursuant to clause (b)(i)(z) of such definition), an amount (expressed as a positive number) equal to the sum of such Net Loss and Gross Loss, and

(b) the present value, using the Discount Rate, of an amount for each Fiscal Year (or portion thereof) subsequent to such sale equal to the product of
(I) the Special Effective Tax Rate of such Partner for the year in which such sale occurs, and (II) the sum of (A) the Special Income attributable to such assets for each such subsequent Fiscal Year (or portion thereof), and (B) the Maximum Income Amount for each such subsequent Fiscal Year (or portion thereof) based on the Special Income determined in clause (A).

"Preferred Capital Contribution" means, with respect to any Partner, the contribution that a Partner is treated as having made to the Partnership in exchange for Preferred Partnership Units pursuant to Section 4.1(e).

"Preferred Cluster Area" means the areas described on Schedule 3.2 hereto and such other areas designated as Preferred Cluster Areas by the Executive Committee in accordance with Section 3.2.

"Preferred Partnership Unit" means a Partner's right to distributions of that portion of the Preferred Investment Pool relating to such Preferred Partnership Unit together with all allocations of Preferred Profit and Preferred Loss attributable thereto.

"Preferred Profit" and "Preferred Loss" mean, for each Fiscal Year or other period, an amount equal to the Partnership's taxable income or loss for such year or period determined by taking into account only items of income, gain, deduction or loss directly attributable to the Preferred Investment Pool, with the same type of adjustments set forth in the definition of Net Profit and Net Loss except for clauses (viii) and (ix) thereof.

"Priority Return" shall mean the sum of the Series A Priority Return, the Series B Priority Return and the Series C Priority Return.

"Rate Differential" means, for any year, (i) the excess, if any, of (a) the Effective Tax Rate for such year, over (b) the Special Effective Tax Rate for such year, divided by (ii) the Special Effective Tax Rate for such year.

"Remaining Years" means the number of years following a restructuring pursuant to Section 8 equal to the remaining useful lives as of the time of such restructuring of the assets contributed to the Partnership.

"Restructuring Deferred Tax Amount" means, on a restructuring pursuant to
Section 8.2 and with respect to the assets specified in such Section, and (i) with respect to Paragon and TWE:

(1) if there is an Excess Debt Shift Tax Amount with respect to the assets contributed by such Partner, the excess of:

(a) the product of (I) the Special Effective Tax Rate for the year in which such restructuring occurs, and (II) the sum of (A) the Special Income, attributable to such assets that were contributed by such Partner for the Fiscal Year (or portion thereof) in which such restructuring occurs (assuming that such restructuring did not occur), (B) the excess of (y) the Maximum Income Amount for such Fiscal Year (or portion thereof) (based on the Special Income determined in clause (A)) and the Maximum Income Amount of such Partner for all prior years with respect to all assets contributed by such Partner, over (z) the Net Profit allocated to such Partner pursuant to Section 5.3(b)(iii) for such Fiscal Year (or portion thereof) and all prior Fiscal Years, and (C) to the extent any Net Loss or Gross Loss allocated to such Partner for any prior year was used to reduce such Partner's Special Tax Amount for any prior year (pursuant to clause (b)(ii)(y) of the definition of Special Tax Amount) and was not subsequently used to increase such Partner's Special Tax Amount (pursuant to clause (b)(i)(z) of such definition), an amount (expressed as a positive number) equal to the sum of such Net Loss and Gross Loss, over

(b) such Excess Debt Shift Tax Amount; or

(2) if there is not an Excess Debt Shift Tax Amount with respect to the assets contributed by such Partner, the sum of:

(a) the product of (I) the Special Effective Tax Rate for the year in which such restructuring occurs, and (II) the sum of (A) the Special Income, attributable to such assets that were contributed by such Partner, for the Fiscal Year (or portion thereof) in which such restructuring occurs (assuming that such restructuring did not occur), (B) the excess of (y) the Maximum Income Amount for such Fiscal Year (or portion thereof) (based on the Special Income determined in clause (A)) and the Maximum Income Amount of such Partner, for all prior years with respect to all assets contributed by such Partner, over (z) the Net Profit allocated to such Partner, pursuant to Section 5.3(b)(iii) for such Fiscal Year (or portion thereof) and all prior Fiscal Years, and (C) to the extent any Net Loss or Gross Loss allocated to such Partner for any prior year was used to reduce such Partner's Special Tax Amount for any prior year (pursuant to clause (b)(ii)(y) of the definition of Special Tax Amount) and was not subsequently used to increase such Partner's Special Tax Amount (pursuant to clause (b)(i)(z) of such definition), an amount (expressed as a positive number) equal to the sum of such Net Loss and Gross Loss, and

(b) the present value, using the Discount Rate, of an amount for each Fiscal Year (or portion thereof) subsequent to such restructuring equal to the excess of (y) the product of (I) the Special Effective Tax Rate for the year in which such restructuring occurs, and (II) the sum of (A) the Special Income, attributable to such assets that were contributed by such Partner, for each such subsequent Fiscal Year (or portion thereof) (assuming that such restructuring did not occur), and (B) the Maximum Income Amount for each such subsequent Fiscal Year (or portion thereof) based on the Special Income determined in clause (A)), over (z) for each such subsequent Fiscal Year (or portion thereof), a proportionate share (based on the ratio of the Special Income for such Fiscal Year (or portion thereof) to total Special Income for all such subsequent Fiscal Years (or portion thereof) of the Debt Shift Tax Amount; and

(ii) with respect to Advance/Newhouse, the sum of:

(a) the product of (I) the Special Effective Tax Rate for the year in which such restructuring occurs, and (II) the sum of (A) the Special Income, attributable to such assets that were contributed by such Partner, for the Fiscal Year (or portion thereof) in which such restructuring occurs (assuming that such restructuring did not occur), (B) the excess of (y) the Maximum Income Amount for such Fiscal Year (or portion thereof) (based on the Special Income determined in clause (A)) and the Maximum Income Amount of such Partner for all prior years with respect to all assets contributed by such Partner, over (z) the Net Profit allocated to such Partner pursuant to Section 5.3(b)(iii) for such Fiscal Year (or portion thereof) and all prior Fiscal Years, and (C) to the extent any Net Loss or Gross Loss allocated to such Partner for any prior year was used to reduce such Partner's Special Tax Amount for any prior year (pursuant to clause (b)(ii)(y) of the definition of Special Tax Amount) and was not subsequently used to increase such Partner's Special Tax Amount (pursuant to clause (b)(i)(z) of such definition), an amount (expressed as a positive number) equal to the sum of such Net Loss and Gross Loss, and

(b) the present value, using the Discount Rate, of an amount for each Fiscal Year (or portion thereof) subsequent to such restructuring equal to the product of (I) the Special Effective Tax Rate of such Partner for the year in which such restructuring occurs, and (II) the sum of (A) the Special Income, attributable to such assets that were contributed by such Partner, for each such subsequent Fiscal Year (or portion thereof) (assuming that such restructuring did not occur), and (B) the Maximum Income Amount for each such subsequent Fiscal Year (or portion thereof) based on the Special Income determined in clause (A)).

"Second Advance/Newhouse Contribution Amount" has the meaning ascribed to "Advance/Newhouse Contribution Amount" in Section 4 of the Second Transaction Agreement.

"Second Effective Date" means December 31, 1998.

"Second Transaction Agreement" means the Transaction Agreement No. 2, dated as of June 23, 1998, among Advance, Newhouse, Advance/Newhouse, TWE, Paragon and the Partnership.

"Series A Preferred Capital Contribution" means, with respect to Paragon, a Capital Contribution by Paragon pursuant to this Agreement (other than cash deemed contributed in exchange for Preferred Partnership Units pursuant to
Section 4.1(e)) of assets having a fair market value of $1,000 for each Series A Preferred Partnership Unit issued to Paragon pursuant to Section 4.2(b)(i).

"Series A Preferred Partnership Unit" means Paragon's right to distributions in an amount equal to the Series A Priority Return allocable to the Series A Preferred Capital Contribution of $1,000 and the right to a return of such Series A Preferred Capital Contribution in redemption thereof, all of which shall be payable in accordance with Section 5, together with all allocations of income attributable thereto, as specified in Section 5.

"Series A Priority Return" means, with respect to each outstanding Series A Preferred Partnership Unit, a sum equal to 10 1/4 percent for the actual number of days in the period for which the Series A Priority Return is being calculated, cumulative and compounded annually, on the amount of $1,000 plus any accrued and unpaid Series A Priority Return with respect to such Series A Preferred Partnership Unit, commencing on the First Effective Date.

"Series B Preferred Capital Contribution" means with respect to Paragon, a Capital Contribution by Paragon pursuant to this Agreement (other than cash deemed contributed in exchange for Preferred Partnership Units pursuant to
Section 4.1(e)) of assets having a fair market value of $1,000 for each Series B Preferred Partnership Unit issued to Paragon pursuant to Sections 4.2(b)(ii) and 4.2(b)(iii).

"Series B Preferred Partnership Unit" means, with respect to Paragon, such Partner's right to distributions in an amount equal to the Series B Priority Return allocable to such Partner's Series B Preferred Capital Contribution of $1,000 and the right to a return of such Series B Preferred Capital Contribution in redemption thereof, all of which shall be payable in accordance with Section 5, together with all allocations of income attributable thereto, as specified in
Section 5.

"Series B Priority Return" means, with respect to each outstanding Series B Preferred Partnership Unit, a sum equal to 2% plus the Partnership's cost of borrowing under its senior credit facility for the actual number of days in the period for which the Series B Priority Return is being calculated, cumulative and compounded annually, on the amount of $1,000 plus any accrued and unpaid Series B Priority Return with respect to such Series B Preferred Partnership Unit, commencing on the (i) Second Effective Date, in the case of Series B Preferred Partnership Units issued pursuant to Section 4.2(b)(ii) or (ii) the Third Effective Date, in the case of Series B Preferred Partnership Units issued pursuant to Section 4.2(b)(iii).

"Series C Preferred Capital Contribution" means with respect to TWE and Paragon, a Capital Contribution by such Partner pursuant to this Agreement (other than cash deemed contributed in exchange for Preferred Partnership Units pursuant to Section 4.1(e)) of assets having a fair market value of $1,000 for each Series C Preferred Partnership Unit issued to such Partner pursuant to
Section 4.2(a)(v)(B) or Section 4.2(b)(iv).

"Series C Preferred Partnership Unit" means, with respect to TWE and Paragon, such Partner's right to distributions in an amount equal to the Series C Priority Return allocable to such Partner's Series C Preferred Capital Contribution of $1,000 and the right to a return of such Series C Preferred Capital Contribution in redemption thereof, all of which shall be payable in accordance with Section 5, together with all allocations of income attributable thereto, as specified in Section 5.

"Series C Priority Return" means, with respect to each outstanding Series C Preferred Partnership Unit, a sum equal to 2% plus the Partnership's cost of borrowing under its Senior Credit facility for the actual number of days in the period for which the Series C Priority Return is being calculated, cumulative and compounded annually, on the amount of $1,000 plus any accrued and unpaid Series C Priority Return with respect to such Series C Preferred Partnership Unit, commencing on the Fourth Effective Date.

"Special Effective Tax Rate" means, at any time, and from time to time, the effective combined rate of Federal, state and local income and franchise tax that the Partnership would be required to pay, if it were a corporation, on its taxable income for such year, for Federal income tax purposes.

"Special Income" means, for any year, with respect to any Partner, the sum of:

(i) the excess, if any, of (a) such Partner's distributive share of Depreciation and loss determined as provided in clause (iv) of the definition of Net Profit and Net Loss for such year, over (b) such Partner's distributive share of depreciation, amortization, and other cost recovery deductions and loss for such year for Federal income tax purposes, to the extent such excess results from a difference between the basis for Federal income tax purposes of any assets contributed to the Partnership by any Partner and the Gross Asset Value of such assets;

(ii) the excess, if any, of (a) such Partner's distributive share of gain for Federal income tax purposes for such year, over (b) such Partner's distributive share of gain determined as provided in clause (iv) of the definition of Net Profit and Net Loss for such year, to the extent such excess results from a difference between the basis for Federal income tax purposes of any assets contributed to the Partnership by any Partner and the Gross Asset Value of such assets;

(iii) any remedial items allocated to such Partner pursuant to Treasury Regulations Section 1.704-3(d) for such year; and

(iv) any income or loss for Federal income tax purposes recognized by such Partner with respect to any of such Partner's Subsidiary Beneficial Assets (or recognized by an Affiliate of such Partner which holds any of such Partner's Subsidiary Beneficial Assets).

"Special Tax Amount" means, for any year, with respect to any Partner, the amount obtained by multiplying (a) the Special Effective Tax Rate for such year, by (b) the excess, if any, of (i) the sum of (x) the sum of the Net Profit and Gross Profit allocated to such Partner pursuant to Sections 5.3(b)(iii) and 5.3(d)(ii) for such year, (y) the Special Income, if any, allocated to such Partner for such year, and (z) to the extent that the Common Tax Amount of such Partner for such year is reduced by any Net Loss or Gross Loss allocated to such Partner for any prior year which was used to reduce such Partner's Special Tax Amount for any prior year, an amount (expressed as a positive number) equal to the sum of such Net Loss and Gross Loss, over (ii) the sum of (x) the Gross Loss allocated to such Partner pursuant to Section 5.3(d)(ii) for the current year, and (y) the Net Loss or Gross Loss allocated to such Partner for the current or prior year (other than pursuant to Section 5.3(c)(ii) and 5.3(d)(ii)) but only to the extent that the amounts set forth in this clause (y) were not used in reducing the Common Tax Amount for the current year or the Special Tax Amount for any prior year.

"Spin-Off Restructuring Notice" means a Restructuring Notice delivered by Advance/Newhouse no later than ninety (90) days following a change in the Chief Executive Officer of the Time Warner Cable Division, or the installment as the Chief Executive Officer of TWE or its corporate successor of someone other than a member at such time of the senior management of TWX or the Chief Executive Officer of the Time Warner Cable Division, as contemplated by a "spin off" or other distribution of TWE or its corporate successor to the shareholders of TWX; provided as to such a change in management (following such a spin-off or other distribution) prior to April 1, 2000, the ninety (90) days period shall be deemed to begin on April 1, 2000.

"Subscriber" means a subscriber to basic cable television service on the applicable cable television system.

"Subsidiary" means, with respect to any Person, any other Person controlled by such first Person.

"Subsidiary Beneficial Asset" has the meaning ascribed thereto in the Contribution Agreement.

"Tax Adjustment Percentage" means, with respect to any year, the amount obtained by dividing (A) the Special Effective Tax Rate for such year by (B) the excess of one (1) over such Special Effective Tax Rate.

"Taxable Income" or "Taxable Loss" means net income or loss of the Partnership as determined for Federal income tax purposes.

"TCI Contribution Agreement" has the meaning ascribed thereto in the Second Transaction Agreement.

"Third Advance/Newhouse Contribution Amount" has the meaning ascribed to "Advance/Newhouse Contribution Amount" in Section 4 of the Third Transaction Agreement.

"Third Effective Date" means March 1, 1999.

"Third Transaction Agreement" means the Transaction Agreement No. 3, dated as of September 15, 1998 among Advance, Newhouse, Advance/Newhouse, TWE, Paragon and the Partnership.

"Transaction Agreements" means, collectively, the First Transaction Agreement, the Second Transaction Agreement, the Third Transaction Agreement and the Fourth Transaction Agreement.

"Treasury Regulations" means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

"TWE Accountants" means the independent auditors or other auditors selected by TWE.

"TWE Cable Division" means the Cable Division of TWE.

"TWE Partnership Agreement" means the Agreement of Limited Partnership, dated as of October 29, 1991, as amended from time to time, among TWX, Itochu Corporation, Toshiba Corporation, USW and certain of their respective subsidiaries.

"TWE Percentage Interest" means a fraction (expressed as a percentage) the numerator of which is the number of Common Partnership Units owned by TWE and the denominator of which is the total number of Common Partnership Units owned by all Partners.

"TWE Redemption Event" means the delivery of a written notice by TWE to the Partnership indicating that it wishes the Partnership to redeem its Preferred Partnership Units.

"TWE 704(c)(1)(B) Tax Amount" means, on a restructuring and with respect to assets described in Section 8.2(b)(vii)(A)(II), the sum of:

(i) the product of (a) the Special Effective Tax Rate for the year in which such restructuring occurs, and (b) the gain recognized as a result of such restructuring by TWE with respect to such assets pursuant to Section 704(c)(1)(B) of the Code (taking into account Section 704(c)(2) and assuming, for purposes of calculating such gain, that the fair market value of such assets is equal to their Gross Asset Value at the time of such restructuring), and

(ii) the present value, using the Discount Rate, of an amount for each of the Remaining Years equal to the product of (a) the Special Effective Tax Rate for the year in which such restructuring occurs, and (b) the product of (I)
(y) the amount determined under clause (i)(b) above divided by (z) the number of Remaining Years, and (II) the Tax Adjustment Percentage for such year of restructuring.

"TWX" means Time Warner Inc., a Delaware corporation.

"USW" means U S WEST, Inc., a Colorado corporation, and its successors and assigns in respect of its interests under the TWE Partnership Agreement.

1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the following terms have the meanings set forth in the sections indicated:

Term                                              Section
----                                              -------
Acceleration Notice                               9(f)(iii)
Advance/Newhouse Asset Pool                       8.2(b)(ii)
Advance/Newhouse Cable Affiliates                 10.3(a)
Advance/Newhouse Common Put Closing               9(g)(ii)
Advance/Newhouse Common Put Price                 9(a)
Advance/Newhouse Preferred  Put Price             9(a)
Advance/Newhouse Put Event                        9(a)
Ancillary Business Opportunity                    10.3(a)
Asset Pool Criteria                               8.2(b)
Asset Pool Notice                                 8.2(b)(i)
Appraiser                                         9(d)
Asset Pools                                       8.2(b)
Cash Purchase Notice                              9(f)(iii)
Closing Price                                     3.1(h)(iii)
Consideration Notice                              9(e)
Cost Notice                                       9(f)(iii)
Eligible Option Holder                            3.1(h)(iii)
Election Notice                                   9(c)
Executive Committee                               3.1(c)
Exercise Notice                                   9(b)
Fiscal Year                                       2.7
Indebtedness/EBITDA Ratio                         3.2(e)
Indebtedness Notice                               4.3(d)

Term                                              Section
----                                              -------
Liquidator                                        12.3(a)
Long Term Strategic Plan                          3.3(a)(i)
Managed Systems                                   3.1(h)(i)
Managing Partner                                  3.1(a)
Newhouse Family Member                            6.1(a)
Notifying Partner                                 10.1(a)
NYSE                                              3.1(h)(iii)
Opportunity Notice                                10.1(a)
Other Programming Investors                       10.2(b)
Other TWE Systems                                 3.1(d)
Partnership Financial Statements                  11.2(a)
Partnership Value                                 9(d)
Preferred Investment Pool                         4.1(e)(iii)
Programming Opportunity                           10.2(a)
Pro Rata Assets                                   8.2(b)(i)
Put Note                                          9(f)(iii)
Qualified Assets                                  9(e)
Redeemed Preferred Partnership Units              5.2
Redemption Notice                                 5.2
Refusal Period                                    8.4
Rejection Notice                                  9(f)(i)
Restructuring Notice                              8.1
Sale Notice                                       10.5
Sale Taxes                                        9(f)(iii)
Sale Terms                                        10.5
Subject System                                    10.5
System Opportunity                                10.1(a)
Taxable Consideration                             9(c)
Tax Deferred Consideration                        9(c)
Tax Matters Partner                               3.1(g)
Third Party Programming                           3.1(h)(ii)
Transfer Assets                                   8.4

Term                                              Section
----                                              -------
Transfer Notice                                   8.4
Transfer Terms                                    8.4
TWE Asset Pools                                   8.2(b)(ii)
TWE Cable Expenses                                3.1(h)(i)
TWX Securities                                    3.1(h)(iii)
Valuation Notice                                  9(d)
Wholly-Owned Affiliates                           3.1(h)(ii)

SECTION 2 THE PARTNERSHIP AND ITS BUSINESS

2.1 Formation. The Partnership was initially formed as a general partnership as of September 9, 1994 pursuant to the provisions of the Act. The Partners hereby expressly agree to continue the Partnership. Except as provided in this Agreement, all rights, liabilities, and obligations of the Partners (in their capacities as such), both as among themselves and with respect to Persons not parties to this Agreement, shall be as provided in the Act, and this Agreement shall be construed in accordance with the provisions of the Act. To the extent that the rights or obligations of any Partner are different by reason of any provision of this Agreement from what they would be under the Act in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.

2.2 Partnership Name and Trade Names.

(a) Partnership Name. The name of the Partnership shall be "Time Warner Entertainment-Advance/Newhouse Partnership" or such other name(s) as may from time to time be agreed to by each of the Partners. In using its name in any written material, the Partnership shall, to the extent appropriate and feasible, identify itself as "a Time Warner Entertainment-Advance/Newhouse partnership" or such other name(s) as may from time to time be agreed to by each of the Partners.

(b) Trade Names. The business of each of the cable television systems contributed to the Partnership by Advance/Newhouse shall be conducted under the trade names agreed to by the parties. In using its trade name in any written material, each cable television system owned by the Partnership shall, to the extent appropriate and feasible, identify itself as a division of the Partnership. Each other business of the Partnership shall be conducted under the name of the Partnership or, upon compliance with applicable laws, any other name that the Managing Partner deems appropriate or advisable.

(c) Change of Names. The name of the Partnership may be changed at any time by the Executive Committee in accordance with Section 3.2(q) hereof. Any decision to change the name of the Partnership shall be based on such market research and other information as the Executive Committee deems appropriate.

(d) Assumed Name Filings. The Partnership shall file any assumed name certificates and similar filings, and any amendments thereto, that the Managing Partner considers appropriate or advisable.

2.3 Term of the Partnership. The term of the Partnership commenced on September 9, 1994 and, unless the Partnership is earlier terminated pursuant to
Section 12 of this Agreement or otherwise, shall continue until December 31, 2045.

2.4 Purposes.

(a) Generally. The purposes of the Partnership shall be, to the extent permitted under applicable law, to engage in the business, directly or indirectly through interests in one or more Subsidiaries, of:

(i) acquiring, developing, owning, operating, managing, and selling the cable television systems and other assets from time to time contributed to the Partnership by the Partners pursuant to the Contribution Agreement and the Transaction Agreements;

(ii) acquiring, developing, owning, operating, managing and selling additional cable television systems, with the goal of operating clusters of cable television systems, and with particular emphasis on developing and expanding systems in the Preferred Cluster Areas;

(iii) acquiring, developing, owning, operating, managing, and selling, or investing in, businesses related to the operation of cable television systems, including without limitation programming and information services, personal communications and cable advertising businesses;

(iv) developing, owning, operating, managing, and selling residential and business telephony services associated with such cable television systems, including alternative access services, personal communications services and other similar services;

(v) developing, owning, operating, managing, and selling other businesses that utilize broadband distribution facilities, in addition to residential and business telephony services;

(vi) managing cable television systems;

(vii) selling at the retail level equipment and other goods used or useful in connection with the businesses described in clauses (i) through (vi) above;

(viii) conducting other businesses contemplated by the Long Term Strategic Plan or otherwise agreed to by the Partners; and

(ix) engaging in all activities and transactions incidental to the foregoing (including owning or leasing real property and incurring Indebtedness).

(b) Effect on Powers of Partners. The listing of the purposes of the Partnership in this Section 2.4 shall not be construed to impair the limitations on the powers of the Managing Partner set forth in Section 3.2 or any of the other limitations expressly set forth in this Agreement.

2.5 Principal Office and Other Offices. The principal office of the Partnership shall be located at 300 First Stamford Place, Stamford, Connecticut. The Partnership may maintain other offices at other places as the Managing Partner deems advisable.

2.6 Foreign Qualification. The Partners shall take all necessary actions to cause the Partnership to be authorized to conduct business legally in all appropriate jurisdictions, including registration or qualification of the Partnership in those jurisdictions that provide for registration or qualification.

2.7 Fiscal Year. The Partnership's fiscal year (each, a "Fiscal Year") shall be the calendar year. The Partnership shall have the same Fiscal Year for income tax purposes and for financial and partnership accounting purposes.

2.8 Addresses of the Partners. The respective addresses of the Partners are set forth on the signature page to this Agreement.

2.9 Property. Except as otherwise contemplated herein or in the Contribution Agreement, all assets and property, whether real, personal, or mixed, tangible or intangible, including contractual rights, owned or possessed by the Partnership shall be held or possessed in the name of the Partnership or in the name of an appropriate nominee, and such assets, property, and rights shall be deemed to be owned or possessed by the Partnership as an entity; and no Partner shall have any separate ownership interest in such assets, property, or rights. Each Partner's interest in the Partnership is personal property for all purposes.

2.10 Certain Operating Policies.

(a) Activities Prior to Initial Closing Date. Except as agreed to by the Partners, the Partnership did not conduct any business activities prior to the Initial Closing Date except as necessary or appropriate in connection with the formation and qualification of the Partnership or to consummate the contribution by Advance/Newhouse and TWE to the Partnership of certain cable television systems and other assets in accordance with the Contribution Agreement.

(b) Proprietary Interests. The Partnership shall use all reasonable efforts to develop and protect a proprietary interest in any discovery, development, idea, improvement, innovation, invention, process, program, system, technique, or other intellectual property right, whether or not patentable, arising in the course of the Partnership's business, and the Partnership shall use all commercially reasonable efforts to exploit any such proprietary interest throughout the world.

(c) Compliance With Modification of Final Judgment. The Partnership will conduct its business and operations in such a manner so as to comply with the Modification of Final Judgment, to the extent applicable. The Partners shall consult and cooperate with each other in furtherance of the foregoing.

SECTION 3 MANAGEMENT OF THE PARTNERSHIP

3.1 Generally.

(a) Appointment of Managing Partner. TWE is hereby appointed to act as the Managing Partner of the Partnership ("Managing Partner").

(b) Rights, Powers, and Duties. The Managing Partner shall be responsible for the management and operations of the Partnership and shall have all powers necessary to manage and control the Partnership, to conduct its business, and to implement any decision of the Partners adopted pursuant to this Agreement, and all powers possessed by general partners under the Act. Notwithstanding the preceding sentence, the exercise by the Managing Partner of any of the powers described in the preceding sentence or listed below in this
Section 3.1(b) is subject to Section 3.1(c), Section 3.2 and the other limitations set forth in this Agreement. Except as expressly provided herein, no Partner other than the Managing Partner shall have any right to vote on, or consent to, any action of any nature whatsoever taken or proposed to be taken by the Partnership and no Partner other than the Managing Partner shall give any consent on any matter or take any action as a Partner, including, without limitation, acting on behalf of or binding the Partnership, unless such matter or action shall first have been approved or consented to by the Managing Partner or the Executive Committee. Subject to the foregoing, the powers of the Managing Partner include, without limitation, the power on behalf of the Partnership, for itself or on behalf of any Subsidiary of the Partnership, to:

(i) construct, operate, maintain, improve, expand, buy, own, sell, convey, assign, mortgage, finance, refinance, rent, or lease real or personal property, which may be held in the name of the Partnership or any Subsidiary of the Partnership;

(ii) enter into, perform, and carry out contracts and agreements of any kind necessary to, in connection with, or incidental to accomplishing the purposes of the Partnership;

(iii) negotiate for and conclude agreements for the sale, exchange, or other disposition of all or any part of the property of the Partnership or of any Subsidiary of the Partnership, for property, cash, or on terms, or any combination thereof, or for the purchase or lease of additional property of the Partnership or any Subsidiary of the Partnership;

(iv) bring and defend actions in law and equity;

(v) execute and modify leases and other agreements (including leases and agreements for terms extending beyond the term of the Partnership or the term

of any Subsidiary of the Partnership), and execute and modify options, licenses, or agreements with respect to any of the assets or the business of the Partnership or any Subsidiary;

(vi) obtain loans, secured and unsecured, for the Partnership or any Subsidiary of the Partnership and secure the same by mortgaging, assigning for security purposes, pledging, or otherwise hypothecating, all or any part of the property and assets of the Partnership or of any Subsidiary of the Partnership (and in connection therewith to place record title to any such property or assets in the name or names of a nominee or nominees);

(vii) prepay in whole or in part, refinance, recast, increase, decrease, modify, amend, restate, or extend any such mortgage, security assignment, pledge, or other security instrument, and in connection therewith to execute and deliver, for and on behalf of the Partnership or any Subsidiary of the Partnership, any extensions, renewals, or modifications thereof, any new mortgage, security assignment, pledge, or other security instrument in lieu thereof;

(viii) draw, make, accept, endorse, sign, and deliver any notes, drafts, or other negotiable instruments or commercial paper;

(ix) establish, maintain, and draw upon checking, savings, and other accounts in the name or any trade name of the Partnership or any Subsidiary of the Partnership in such banks or other financial institutions as the Managing Partner may from time to time select;

(x) employ, fix the compensation of, oversee, and discharge agents and employees of the Partnership and of any Subsidiary of the Partnership as the Managing Partner deems advisable in the operation and management of the business of the Partnership, including accountants (pursuant to Section 11.2 and otherwise), attorneys, architects, consultants, engineers, and appraisers, on such terms and for such compensation, as the Managing Partner shall determine;

(xi) enter into management agreements with third parties pursuant to which the management, supervision, or control of the business or assets of the Partnership may be delegated to third parties for reasonable compensation;

(xii) enter into joint ventures, general or limited partnerships, or other agreements relating to the Partnership's purposes;

(xiii) compromise any claim or liability due to the Partnership or any Subsidiary of the Partnership;

execute, acknowledge, verify, and file any notifications, applications, statements, and other filings that the Managing Partner considers necessary or desirable to be filed with any state or federal securities administrator or commission;

(xiv) execute, acknowledge, verify, and file any and all certificates, documents, and instruments that the Managing Partner considers necessary or desirable to permit the Partnership or any Subsidiary of the Partnership to conduct business in any state;

(xv) do any or all of the foregoing, discretionary or otherwise, through agents selected by the Managing Partner and compensated or uncompensated by the Partnership; and

(xvi) take any other actions and execute any other contracts, documents, and instruments that the Managing Partner deems appropriate to carry out the intents and purposes of this Agreement.

(c) Executive Committee. The Managing Partner also shall act upon the advice of a committee (the "Executive Committee") which shall be composed of from three to five individuals. The Executive Committee shall oversee the management and operations of the Partnership, shall make significant business decisions of the Partnership (including without limitation those set forth in
Section 3.2 hereof) and shall participate regularly in the overall supervision, direction and control of the Partnership and its employees. Up to two of the members of the Executive Committee shall be designated from time to time by TWE, up to two of the members of the Executive Committee shall be designated from time to time by Advance/Newhouse, and one of the members of the Executive Committee shall be designated from time to time by Paragon. Any member of the Executive Committee may be removed and replaced at any time, and from time to time, by the Partner that originally designated such member. The Executive Committee shall hold regular meetings quarterly or at more frequent intervals as determined by the Executive Committee. At each meeting of the Executive Committee, the Managing Partner shall report on its ongoing efforts to acquire on behalf of the Partnership, by swap or otherwise, cable television systems located within the Preferred Cluster Areas. Any Partner, or at least two members of the Executive Committee, may call a special meeting of the Executive Committee upon no less than 48 hours' notice to each member. The designees of each of the Partners on the Executive Committee shall in the aggregate have voting power proportional to their respective Percentage Interests. Except as otherwise provided herein (including without limitation Section 3.2 hereof) or by applicable law, the affirmative vote (or written consent) of a majority of the voting power of all members of the Executive Committee (whether or not present) shall constitute action by the Executive Committee. Regular or special meetings of the Executive Committee may be held in person or telephonically. Each member of the Executive Committee entitled to vote at any meeting of the Executive Committee may authorize another person to act for him by proxy (provided that such proxy must be signed by such member or his attorney-in-fact and shall be revocable by such member at any time prior to such meeting).

(d) Conduct of Partnership Business. The day-to-day operations of the Partnership shall be the responsibility of the Managing Partner, who shall report regularly to the Executive Committee. The Managing Partner shall devote such time and resources to the management of the Partnership as are reasonably necessary or desirable to the

prudent operation and development of the business of the Partnership, and shall treat the Partnership Systems using the same general standard of care that it uses in the operation of the cable television systems owned by TWE or its Affiliates other than the Partnership Systems (the "Other TWE Systems").

(e) Executive Officers. The Managing Partner may delegate that part of its day-to-day operational responsibility for the Partnership as the Managing Partner deems reasonable and prudent to individuals, who will be the Executive Officers of the Partnership.

(f) Fiduciary Obligations. A Partner shall be liable under this Agreement for benefits improperly received, willful misconduct, recklessness and gross negligence with respect to the business of the Partnership, but shall not be liable to the Partnership or the other Partners for errors in judgment or for any acts or omissions that do not constitute the improper receipt of benefits, willful misconduct, recklessness or gross negligence with respect to the business of the Partnership.

(g) Tax Matters Partner. The tax matters partner of the Partnership pursuant to Code Section 6231(a)(7) (the "Tax Matters Partner") shall be TWE or any successor tax matters partner designated by agreement of all Partners. The Tax Matters Partner shall have all powers necessary to perform fully its responsibilities under the Code. To the extent and in the same manner as provided by applicable law, the Tax Matters Partner (i) shall furnish the name, address, and taxpayer identification number of each Partner to the Secretary of the Treasury or his delegate and (ii) shall keep each Partner informed of any administrative and judicial proceedings for the adjustment at the Partnership level of any items required to be taken into account by a Partner for income tax purposes. The Tax Matters Partner shall give notice to each Partner of a Partnership audit. The Tax Matters Partner shall prepare and file, or cause to be prepared and filed, all tax returns (including amended tax returns) filed by the Partnership. The Tax Matters Partner shall be reimbursed by the Partnership for all out-of-pocket costs and expenses incurred by it in connection with any administrative or judicial proceeding with respect to any tax matter involving the Partnership or the Partners in their capacity as Partners.

(h) Compensation of Partners and Reimbursement of Expenses.

(i) TWE shall be compensated by the Partnership for its services as Managing Partner in an amount equal to (A) the Partnership's pro rata share, based on the ratio of the number of Subscribers served by the Partnership Systems to the total number of Subscribers served by the Partnership Systems and the Other TWE Systems, of the following: (1) TWE Cable Expenses (as defined below), (2) after receipt of evidence reasonably satisfactory to Advance/Newhouse of services received by the TWE Cable Division therefor, the management fees payable by TWE to USW pursuant to Section 8(h) of the Admission Agreement, dated as of May 16, 1993, between TWE and USW, attributable to such services, and (3) TWE's obligations under Section 17.7(b) of the TWE Partnership Agreement to reimburse TWX with respect to options exercised by employees of TWE's Cable Division (other than (x) Eligible Option Holders (who are covered by paragraph (iii) below) and (y) system-level employees of TWE who perform

substantially all of their duties on behalf of one or more Other TWE Systems), and (B) all specific costs and expenses incurred by TWE and its Affiliates on behalf of the Partnership. For purposes of the foregoing, "TWE Cable Expenses" shall mean all expenses incurred in connection with managing and operating the TWE Cable Division (other than direct and identifiable costs or expenses relating to the Other TWE Systems, which would not be appropriately allocated to the Partnership); provided that such expenses shall be calculated net of any management fees received by TWE with respect to the management of partially owned cable television systems ("Managed Systems"), it being understood that in determining the Partnership's pro rata share of any costs or expenses described in this Section 3.1(h), the Subscribers served by the Managed Systems shall be excluded from the number of Subscribers served by the Partnership Systems and the number of Subscribers served by the Other TWE Systems. By way of example, TWE Cable Expenses include, without limitation, the general costs and expenses incurred by or allocated to the TWE Cable Division in connection with the development of the Full Service Network and telephony service and legal expenses incurred by the TWE Cable Division in connection with legal proceedings (such as "test cases") which generally affect the TWE Cable Division, but do not include expenses incurred in connection with the current operations of NY 1. Notwithstanding the foregoing, to the extent that any TWE Cable Expenses are paid more than one year beyond the end of the year in which such expenses arise, the Partnership shall reimburse TWE for such expenses when such expenses are paid; and to the extent that any TWE Cable Expenses are paid more than one year in advance of the year in which they arise, the Partnership shall reimburse TWE for such expenses when they are paid. The Partnership shall reimburse TWE for all costs and expenses for each calendar month for which TWE is entitled to reimbursement hereunder on the fifteenth day of such month based on TWE's reasonable estimate thereof; provided that any discrepancies between actual costs (as set forth in a certificate signed by an appropriate officer of TWE) and estimated costs and expenses shall be settled quarterly in arrears by payment by the Partnership to TWE of the amount of any underpayment for such quarter or by allocating to the Partnership a credit against future payments required by this paragraph in the amount of any overpayment for such quarter. The Advance/Newhouse Accountants shall have the right to audit annually TWE's records relevant to reimbursements from the Partnership pursuant to this subparagraph. The costs and expenses of such audit shall be borne by Advance/Newhouse. TWE and Advance/Newhouse agree that no adjustment shall be made to any annual reimbursement in the event that the extent of any disagreement between the parties shall be, as to such year, less than $1,500,000.

(ii) TWE, as Managing Partner, shall make all programming and any other service or product decisions with respect to the Partnership Systems, and shall use reasonable best efforts to cause such systems to be included in all programming and other relevant agreements to which the TWE Cable Division or any of its Controlled Affiliates is a party. TWE shall be compensated by the Partnership for such programming as follows (whether or not the Partnership Systems are included within such programming or other agreements):

(A) With respect to Third Party Programming (as defined below), the Partnership shall pay TWE for such programming at a net

effective rate (taking into account the appropriate economic benefit and/or detriment to TWE, if any, including, without limitation, discounts, credits, marketing support, rate reimbursement, advertising support, channel position fees, rebates, prepayment loans, deductions for unallocated accounts and other incentives) equal to the net effective rate per subscriber paid or accrued for such programming by the TWE Cable Division or its Controlled Affiliate pursuant to the master programming agreement or similar agreement between the provider of such programming and the TWE Cable Division or such Controlled Affiliate.

(B) With respect to any other programming, the Partnership shall pay TWE for such programming at a rate equal to the pro rata portion of the costs to TWE or such Affiliate of producing such programming (such pro rata portion to be determined based on the ratio of the number of Subscribers served by the Partnership Systems offering such programming to the total number of Subscribers served by the Partnership Systems and the Other TWE Systems offering such programming, or, in the case of a la carte programming, the ratio of the number of Partnership System Subscribers subscribing to such programming to the number of Subscribers of the Partnership Systems and the Other TWE Systems subscribing to such programming).

For the purpose of the foregoing, "Third Party Programming" shall mean
(x) any programming purchased by the TWE Cable Division or any of its Controlled Affiliates from any person that is not a Wholly-Owned Affiliate (as defined below) of TWE and (y) any programming (including, without limitation, HBO and Cinemax) purchased by the TWE Cable Division or its Controlled Affiliates from TWE or any of its Wholly-Owned Affiliates (as defined below), provided, with respect to this clause (y), that (1) such programming is offered by TWE or such Affiliate to unaffiliated third parties for use on cable television systems, and
(2) the amount paid by the TWE Cable Division or its Controlled Affiliates for such programming is consistent with the amount paid for such programming by similarly situated third parties and is otherwise consistent with the principles previously agreed to by the parties. "Wholly-Owned Affiliate" of TWE shall mean
(x) any division or subdivision of TWE or (y) any direct or indirect subsidiary of TWE all of the capital stock or other equity interests of which are owned, directly or indirectly, by TWE.

(iii) Upon exercise by any Eligible Option Holder (as defined below) of options to purchase securities of TWX or any of its Affiliates ("TWX Securities"), the Partnership shall pay to TWE for each share of stock or each $1,000 principal amount of debt securities, as the case may be (such share or $1,000 principal amount being referred to herein as a "unit" of TWX Securities), issuable upon exercise of such options an amount equal to the excess of (A) the Closing Price (as defined below) of a unit of such TWX Securities as of the date of exercise, over (B) either (1) for options issued prior to the Initial Closing Date, the greater of (x) the exercise price paid by such Eligible Option Holder for each such unit of TWX Securities and (y) the Closing Price of a unit of such TWX Securities on the Initial Closing Date, or (2) for options issued after the Initial Closing Date, the exercise price paid by such Eligible Option Holder for each such unit of TWX Securities.

For the purpose of this Section 3.1(h)(iii), the term "Eligible Option Holder" shall mean any officer or other employee of the Partnership or of TWE or any of its Subsidiaries who (x) in such capacity performs substantially all of his or her duties on behalf of the Partnership and (y) has been, or from time to time is, issued options to purchase units of TWX Securities; and the term "Closing Price" shall mean, with respect to any TWX Securities on any day, the last reported sale price of a unit of such TWX Securities (regular way) on such day as shown on the New York Stock Exchange ("NYSE") Composite Transaction Tape, or in case no such sale takes place on such day, the average of the closing bid and asked prices of a unit of such TWX Securities on such day on the NYSE, or, if such TWX Securities are not listed or admitted to trading on the NYSE, on the principal national securities exchange on which such TWX Securities are listed or admitted to trading, or, if they are not listed or admitted to trading on any national securities exchange, the average of the closing bid and asked prices of such TWX Securities on such day as reported by NASDAQ, or if such TWX Securities are not so reported, the average of the closing bid and asked prices of a unit of such TWX Securities on such day as furnished by any member of the National Association of Securities Dealers, Inc. selected from time to time by TWX for that purpose; provided that in each case, the Closing Price shall be equitably adjusted to take into account any recapitalizations, reclassifications, mergers, consolidations, spin-offs, extraordinary dividends or distributions, subdivisions or combinations or the like affecting the TWX Securities.

(iv) Except as expressly provided herein, including without limitation Section 3.1(g), Section 3.1(h) and Section 13.1 of this Agreement, or in the Contribution Agreement, no Partner shall be entitled, without the prior written consent of the other Partners, to compensation for its services on behalf of the Partnership or to be reimbursed for any costs or expenses incurred by such Partner or any of its Affiliates, agents, or representatives.

(v) Each of the Partners shall bear its own expenses, including fees and expenses of legal counsel, financial advisors, brokers or finders, and consultants incurred by it or its Affiliates in the negotiation and preparation of this Agreement.

3.2 Limitations On Managing Partner. Notwithstanding any provision in this Agreement to the contrary, and in addition to any other consent or approval that may be required by the express terms of this Agreement, neither the Partnership nor any of its Subsidiaries shall, and neither the Managing Partner nor any Partner individually shall have the authority to cause the Partnership or any of its Subsidiaries to, take any of the following actions without (i) the consent of the Partners or (ii) the unanimous consent (in person or by proxy) of all members of the Executive Committee:

(a) sell, assign, or otherwise dispose of all or substantially all of the assets of the Partnership and its Subsidiaries (including without limitation the Beneficial Assets and Subsidiary Beneficial Assets), taken as a whole, except upon the liquidation and dissolution of the Partnership in accordance with Section 8 or Section 12;

(b) merge or consolidate with any other Person, other than the merger or consolidation of a Subsidiary of the Partnership with and into another Subsidiary of the Partnership or the Partnership;

(c) liquidate or dissolve, except in accordance with Section 8,
Section 12 or as otherwise may be required by the Act, and except for any liquidation or dissolution of a Subsidiary of the Partnership permitted by clause (b) above;

(d) admit any new partner to the Partnership (other than pursuant to
Section 6.1), or establish the terms and conditions of the admission of any new partner to the Partnership;

(e) incur, create, or assume any additional Indebtedness (including any Indebtedness relating to a Beneficial Asset or Subsidiary Beneficial Asset) if the ratio of (i) Indebtedness of the Partnership (including such additional Indebtedness and any Indebtedness relating to a Beneficial Asset or Subsidiary Beneficial Asset), to (ii) EBITDA of the Partnership for the last four fiscal quarters for which financial statements are available (the "Indebtedness/EBITDA Ratio"), would exceed 5:1; provided that for purposes of calculating the Indebtedness/EBITDA Ratio of the Partnership throughout this Agreement, both the Indebtedness and the EBITDA of Paragon Communications shall be excluded; and provided further that if the Partnership shall incur, create or assume any additional Indebtedness prior to the date on which financial statements for the first four fiscal quarters of the Partnership shall be available, then the Indebtedness/EBITDA Ratio shall be calculated on a pro forma basis assuming that the Partnership had operated the Partnership Systems since the beginning of the most recent four fiscal quarter period for which financial statements of the Partners are available, which pro forma calculation shall be subject to the approval of the Advance/Newhouse Accountants, which approval shall not be unreasonably withheld.

(f) subject to Section 3.2(e), incur, create or assume any additional Indebtedness (including any Indebtedness relating to a Beneficial Asset or Subsidiary Beneficial Asset), the proceeds of which are to be distributed to the Partners pursuant to Section 5.1, if the Indebtedness/EBITDA Ratio, calculated without taking into account any Indebtedness incurred by the Partnership for purposes other than distributions to the Partners, would exceed 2:1; provided that if the Partnership shall incur, create or assume any additional Indebtedness prior to the date on which financial statements for the first four fiscal quarters of the Partnership shall be available, then the Indebtedness/EBITDA Ratio shall be calculated on a pro forma basis assuming that the Partnership had operated the Partnership Systems since the beginning of the most recent four fiscal quarter period for which financial statements of the Partners are available, which pro forma calculation shall be subject to the approval of the Advance/Newhouse Accountants, which approval shall not be unreasonably withheld.

(g) enter into any agreement restricting the ability of the Partnership to make distributions to the Partners with respect to their Partnership Interests, except for reasonable restrictions contained in agreements entered into by the Partnership in connection with the incurrence of Indebtedness of the Partnership permitted by this

Agreement (provided that no such restrictions prohibit distributions in connection with the redemption of Preferred Partnership Units by the Partnership unless there exists a default or a circumstance which with notice or lapse of time or both would constitute a default under the agreement governing such Indebtedness);

(h) dispose of any Partnership System serving more than 25,000 Subscribers for any consideration other than cash, dispose of any Partnership System with more than 10,000 Subscribers in a Preferred Cluster Area, or dispose of one or more Partnership Systems for aggregate cash consideration in excess of $50,000,000, in each case in any transaction or series of related transactions;

(i) except as provided in Section 10.1, acquire one or more cable television systems (other than cable television systems acquired pursuant to the Contribution Agreement) with more than 25,000 Subscribers for any consideration other than cash, or acquire one or more cable television systems for aggregate cash consideration in excess of $50,000,000, in either case in any transaction or series of related transactions;

(j) except as provided in Section 10, acquire any assets (other than cable television systems in accordance with paragraph (i) above, assets acquired pursuant to the Contribution Agreement, or assets acquired in the ordinary course of business or otherwise in accordance with the Long Term Strategic Plan) for aggregate consideration in excess of $50,000,000, or enter into a new line of business that is reasonably expected to require an investment in excess of $50,000,000 (other than as contemplated by the Long Term Strategic Plan), in either case in any transaction or series of related transactions;

(k) dispose of any assets (including any assets represented by a Beneficial Asset or Subsidiary Beneficial Asset) (other than in the ordinary course of business and other than cable television systems in accordance with paragraph (h) above) for aggregate consideration in excess of $50,000,000 in any transaction or series of related transactions;

(l) except as specifically set forth in this Agreement, enter into any contract (or series of related contracts) or engage in any transaction (or series of related transactions) with a Partner or any Affiliate of a Partner other than on an arm's length basis;

(m) designate any additional area as a Preferred Cluster Area;

(n) make material amendments or modifications to the Long Term Strategic Plan (as defined below);

(o) make any material deviations from the Long Term Strategic Plan taken as a whole;

(p) require additional Capital Contributions by any Partner; or

(q) change the name of the Partnership.

3.3 Business Plans.

(a) Long Term Strategic Plan.

(i) On or about March 6, 1995, TWE presented to Advance/Newhouse a statement of the Partnership's strategic objectives for the first five years of the Partnership's operations (the "Long Term Strategic Plan"), which plan included the Partnership's strategic objectives with respect to acquisitions and investments, asset dispositions, capital expenditures and the entry into or withdrawal from any material line of business as well as overall timing and numerical parameters with respect thereto. The Long Term Strategic Plan was prepared in a manner materially consistent with the long term strategic plan of TWE's Cable Division. On March 9, 1995 Advance/ Newhouse approved the Long Term Strategic Plan.

(ii) On August 18, 1998, TWE presented a successor Long Term Strategic Plan as required by Section 11(a) of the First Transaction Agreement. On October 21, 1998, Advance/Newhouse approved such successor Long Term Strategic Plan.

(iii) Prior to September 30, 2001 and within three years following the adoption and approval of each successor long term strategic plan in accordance with this paragraph (iii), the Managing Partner shall present to Advance/Newhouse a new long term strategic plan for the five year period beginning no later than the first day of the calendar year following the date which is three years following the adoption of the previous Long Term Strategic Plan. Such long term strategic plan shall be prepared in a manner materially consistent with the long term strategic plan of TWE's Cable Division and shall be subject to the approval of Advance/Newhouse. Any long term strategic plan approved by Advance/Newhouse and adopted by the Partnership shall upon the effective date stated in such plan be the Long Term Strategic Plan for all purposes of this Agreement. Until a successor Long Term Strategic Plan is approved by Advance/Newhouse, the Long Term Strategic Plan then in effect shall continue in effect; provided that upon the expiration of the five year period covered by such Long Term Strategic Plan, such Long Term Strategic Plan shall remain in effect as if it applied to such fiscal year, but shall be appropriately adjusted to provide for any capital expenditures required to be incurred by the Partnership by the terms of any franchise agreement or other requirement of law or to enable the Partnership to continue or complete any project or activity in progress that was contemplated by a previously approved Long Term Strategic Plan or was approved by the Executive Committee with the consent of Advance/Newhouse's representatives.

(b) Divisional Budget. Within a reasonable period of time prior to the beginning of each Fiscal Year, the Managing Partner shall provide to Advance/Newhouse division-by-division annual budgets for each group of Partnership Systems comprising a management division, which budgets shall not be materially inconsistent with the Long Term Strategic Plan without the written consent of Advance/Newhouse or its

representatives on the Executive Committee. The Managing Partner shall provide Advance/Newhouse's representatives on the Executive Committee reasonable opportunity to consult with the Managing Partner with respect to such plans.

(c) Other Business Plans. If TWE prepares other business plans with respect to the operation of TWE's Cable Division, then TWE shall provide such plans to Advance/Newhouse. The Managing Partner shall provide Advance/Newhouse's representatives on the Executive Committee reasonable opportunity to consult with the Managing Partner with respect to such plans.

SECTION 4 PARTNERSHIP CAPITAL

4.1 Capital Contributions.

(a) Initial Contributions. Upon the execution of the Original Agreement, Advance/Newhouse contributed to the Partnership cash in the amount of $30.00 and TWE contributed to the Partnership cash in the amount of $60.00.

(b) Additional Contributions by Advance/Newhouse.

(i) On the Initial Closing Date and from time to time thereafter as provided in the Contribution Agreement, and in accordance with the terms and conditions of the Contribution Agreement, Advance/Newhouse contributed or caused to be contributed to the Partnership those assets (including the Beneficial Assets and the Subsidiary Beneficial Assets) specified to be so contributed in the Contribution Agreement. As of the Initial Closing Date the fair market value of the assets contributed by Advance/Newhouse pursuant to this Section 4.1(b) was determined in accordance with Section 2.4 of the Contribution Agreement and included in the Partnership's records.

(ii) At any time after the date that is six months following the First Effective Date and on or before the earlier of the fourth anniversary of the First Effective Date, a restructuring of the Partnership pursuant to Section 8.2, or the purchase and sale of Common Partnership Units pursuant to Section
9(g)(ii), Advance/Newhouse shall contribute to the Partnership cash in the amount of the First Advance/Newhouse Contribution Amount. In addition, Advance/Newhouse shall pay interest on the First Advance/Newhouse Contribution Amount at the Interest Rate (as defined in Section 5 of the First Transaction Agreement) compounded (to the extent not paid) on a quarterly basis, from July 1, 1996 until the date on which the First Advance/Newhouse Contribution Amount is paid. On the First Effective Date, Advance/Newhouse executed the Advance/Newhouse Note (as defined in Section 5 of the First Transaction Agreement) which is not an asset of the Partnership but secures Advance/Newhouse's obligation to contribute the First Advance/Newhouse Contribution Amount to the Partnership, plus interest, as provided in this
Section 4.1(b)(ii).

(iii) At any time after the date that is six months following the Second Effective Date and on or before the earlier of the fourth anniversary of the Second Effective Date, a restructuring of the Partnership pursuant to
Section 8.2, or the

purchase and sale of Common Partnership Units pursuant to Section 9(g)(ii), Advance/Newhouse shall contribute to the Partnership cash in the amount of the Second Advance/Newhouse Contribution Amount. In addition, Advance/Newhouse shall pay interest on the Second Advance/Newhouse Contribution Amount at the Interest Rate (as defined in Section 4 of the Second Transaction Agreement) compounded (to the extent not paid) on a quarterly basis, from the Second Effective Date until the date on which the Second Advance/Newhouse Contribution Amount is paid. On the Second Effective Date, Advance/Newhouse shall execute the Advance/Newhouse Note (as defined in Section 4 of the Second Transaction Agreement) which shall not be an asset of the Partnership but shall secure Advance/Newhouse's obligation to contribute the Second Advance/Newhouse Contribution Amount to the Partnership, plus interest, as provided in this
Section 4.1(b)(iii).

(iv) At any time after the date that is six months following the Third Effective Date and on or before the earlier of July 1, 2000, a restructuring of the Partnership pursuant to Section 8.2, or the purchase and sale of Common Partnership Units pursuant to Section 9(g)(ii), Advance/Newhouse shall contribute to the Partnership cash in the amount of the Third Advance/Newhouse Contribution Amount. In addition, Advance/Newhouse shall pay interest on the Third Advance/Newhouse Contribution Amount at the Interest Rate (as defined in Section 4 of the Third Transaction Agreement) compounded (to the extent not paid) on a quarterly basis, from July 1, 1998 until the date on which the Third Advance/Newhouse Contribution Amount is paid in full, subject to a prepayment penalty if paid prior to July 1, 2000 as described in Section 4 of the Third Transaction Agreement. On the Third Effective Date, Advance/Newhouse shall execute the Advance/Newhouse Note (as defined in Section 4 of the Third Transaction Agreement) which shall not be an asset of the Partnership but shall secure Advance/Newhouse's obligation to contribute the Third Advance/Newhouse Contribution Amount to the Partnership, plus interest, as provided in this
Section 4.1(b)(iv).

(v) On or before the fourth anniversary of the Fourth Effective Date a restructuring of the Partnership pursuant to Section 8.2, or the purchase and sale of Common Partnership Units pursuant to Section 9(g)(ii), Advance/Newhouse shall contribute to the Partnership cash in the amount of the Fourth Advance/Newhouse Contribution Amount. In addition, Advance/Newhouse shall pay interest on the Fourth Advance/Newhouse Contribution Amount at the Interest Rate (as defined in Section 4 of the Fourth Transaction Agreement) compounded (to the extent not paid) on a quarterly basis, from the Fourth Effective Date until the date on which the Fourth Advance/Newhouse Contribution Amount is paid in full, as described in Section 4 of the Fourth Transaction Agreement. On the Fourth Effective Date, Advance/Newhouse shall execute the Advance/Newhouse Note (as defined in Section 4 of the Fourth Transaction Agreement) which shall not be an asset of the Partnership but shall secure Advance/Newhouse's obligation to contribute the Fourth Advance/Newhouse Contribution Amount to the Partnership, plus interest, as provided in this Section 4.1(b)(v).

(c) Additional Contributions by TWE.

(i) On the Initial Closing Date and from time to time thereafter as provided in the Contribution Agreement, and in accordance with the terms and conditions of the Contribution Agreement, TWE contributed to the Partnership those assets (including the Beneficial Assets and the Subsidiary Beneficial Assets) specified to be so contributed in the Contribution Agreement. As of the Initial Closing Date the fair market value of the assets contributed by TWE pursuant to this Section 4.1(c) was determined in accordance with Section 2.4 of the Contribution Agreement and included in the Partnership's records.

(ii) On the First Effective Date and from time to time thereafter as provided in the First Transaction Agreement and in accordance with the terms and conditions of the First Transaction Agreement, TWE contributed to the Partnership those assets specified in Section 2(a) of the First Transaction Agreement, subject to the liabilities set forth in the First Transaction Agreement. Such contribution by TWE was in satisfaction of certain of its obligations, including under the Contribution Agreement, as provided in Section 2(d) of the First Transaction Agreement.

(iii) On the Fourth Effective Date and from time to time thereafter as provided in the Fourth Transaction Agreement and in accordance with the terms and conditions of the Fourth Transaction Agreement, TWE shall contribute to the Partnership those assets specified in Section 1(a)(i) and Section 1(a)(ii) of the Fourth Transaction Agreement, subject to liabilities as set forth in the Fourth Transaction Agreement. For purposes of establishing Capital Accounts, the Partners agree that as of the Fourth Effective Date, the fair market value of the assets contributed by TWE pursuant to this Section 4.1(c)(iii) shall be determined in accordance with the Fourth Transaction Agreement.

(d) Contributions by Paragon.

(i) On the First Effective Date and from time to time thereafter as provided in the First Transaction Agreement and in accordance with the terms and conditions of the First Transaction Agreement, Paragon contributed to the Partnership those assets specified on Schedule 1 of the First Transaction Agreement and in Section 2(b) of the First Transaction Agreement, subject to the liabilities set forth in the First Transaction Agreement. For purposes of establishing Capital Accounts, the Partners agree that as of the First Effective Date, the fair market value of the assets contributed by Paragon pursuant to this Section 4.1(d)(i) was determined in accordance with the First Transaction Agreement.

(ii) On the Second Effective Date and from time to time thereafter as provided in the Second Transaction Agreement and in accordance with the terms and conditions of the Second Transaction Agreement, Paragon contributed to the Partnership those assets specified on Schedule 1 of the Second Transaction Agreement, subject to the liabilities set forth in the Second Transaction Agreement. For purposes of establishing Capital Accounts, the Partners agree that as of the Second Effective Date, the fair market value of the assets contributed by Paragon pursuant to this Section 4.1(d)(ii) shall be determined in accordance with the Second Transaction Agreement.

(iii) On the Third Effective Date and from time to time thereafter as provided in the Third Transaction Agreement and in accordance with the terms and conditions of the Third Transaction Agreement, Paragon shall contribute to the Partnership those assets specified on Schedule 1 of the Third Transaction Agreement, subject to the liabilities set forth in the Third Transaction Agreement. For purposes of establishing Capital Accounts, the Partners agree that as of the Third Effective Date, the fair market value of the assets contributed by Paragon pursuant to this Section 4.1(d)(iii) was determined in accordance with the Third Transaction Agreement.

(iv) On the Fourth Effective Date and from time to time thereafter as provided in the Fourth Transaction Agreement and in accordance with the terms and conditions of the Fourth Transaction Agreement, Paragon shall contribute to the Partnership those assets specified in Section 1(a)(iii) of the Fourth Transaction Agreement, subject to liabilities as described in the Fourth Transaction. For purposes of establishing Capital Accounts, the Partners agree that as of the Fourth Effective Date, the fair market value of the assets contributed by Paragon pursuant to this Section 4.1(d)(iv) was determined in accordance with the Fourth Transaction Agreement.

(e) Preferred Capital Contributions.

(i) Prior to the Fourth Effective Date, no Preferred Partnership Units were issued to Advance/Newhouse in exchange for Preferred Capital Contributions pursuant to Section 4.2(c).

(ii) At any time that TWE, Advance/Newhouse or Paragon elects not to receive a proposed distribution from the Partnership pursuant to Section 5.1(c), the amount of such proposed distribution shall be treated as a contribution to the Partnership, in increments of $1,000, in exchange for Preferred Partnership Units as provided in Section 4.2(c); provided, however, that, notwithstanding the foregoing, if at such time TWE, Advance/Newhouse and Paragon are all treated as having made a concurrent contribution to the Partnership in accordance with this Section 4.1(e)(ii), then the amount of the proposed distribution to TWE, Advance/Newhouse and Paragon shall be treated as Common Capital Contributions and no Preferred Partnership Units shall be issued therefor.

(iii) Any Distributable Cash retained by the Partnership and treated as a Preferred Capital Contribution in accordance with Section 4.1(e)(i) or 4.1(e)(ii) shall be invested by the Partnership in debt securities in the manner directed by the holder of the applicable Preferred Partnership Units and any amounts received on such debt securities (as interest or otherwise), to the extent not distributed pursuant to Sections 5.1(a)(i), 5.1(b)(i) or 5.2, shall be reinvested in debt securities in the manner directed by the holder of the applicable Preferred Partnership Units. All such debt securities, together with any uninvested amounts received thereon, shall be referred to herein as the "Preferred Investment Pool" with respect to the Preferred Partnership Units held by such Partner.

(f) Other Additional Capital Contributions. Except as agreed to by the Partners in accordance with Section 3.2 hereof, there shall be no further assessments for additional Common Capital Contributions, Series A Preferred Capital Contributions, Series B Preferred Capital Contributions or Series C Preferred Capital Contributions by the Partners to the Partnership.

4.2 Partnership Units.

(a) Advance/Newhouse and TWE.

(i) On September 9, 1994, the Partnership issued:

(A) to Advance/Newhouse, 300 Common Partnership Units in exchange for Advance/Newhouse's agreement to make the Common Capital Contributions described in Section 4.1(a) and Section 4.1(b)(i); and

(B) to TWE, 600 Common Partnership Units in exchange for TWE's agreement to make the Common Capital Contributions described in Section 4.1(a) and Section 4.1(c).

(ii) As of the First Effective Date, the Partnership issued to Advance/Newhouse the number of Common Partnership Units equal to fifty percent (50%) of the number of Common Partnership Units issued to Paragon pursuant to
Section 4.2(b)(i) hereof. Such Common Partnership Units were issued to Advance/Newhouse in exchange for Advance/Newhouse's agreement to make the Capital Contribution described in Section 4.1(b)(ii).

(iii) As of the Second Effective Date, the Partnership issued to Advance/Newhouse the number of Common Partnership Units equal to fifty percent (50%) of the number of Common Partnership Units issued to Paragon pursuant to
Section 4.2(b)(ii) hereof. Such Common Partnership Units were issued to Advance/Newhouse in exchange for Advance/Newhouse's agreement to make the Capital Contribution described in Section 4.1(b)(iii).

(iv) As of the Third Effective Date, the Partnership issued to Advance/Newhouse the number of Common Partnership Units equal to fifty percent (50%) of the number of Common Partnership Units issued to Paragon pursuant to
Section 4.2(b)(iii) hereof. Such Common Partnership Units were issued to Advance/Newhouse in exchange for Advance/Newhouse's agreement to make the Capital Contribution described in Section 4.1(b)(iv).

(v) On the Fourth Effective Date, the Partnership shall issue:

(A) to Advance/Newhouse, the number of Common Partnership Units equal to fifty percent (50%) of the aggregate number of Common Partnership Units issued to TWE pursuant to Section 4.2(a)(v)(B) hereof and issued to Paragon pursuant to Section 4.2(b)(iv) hereof. Such Common Partnership Units shall be issued to Advance/Newhouse in exchange for

Advance/Newhouse's agreement to make the Capital Contribution described in
Section 4.1(b)(v); and

(B) to TWE, the number of Series C Preferred Partnership Units and Common Partnership Units provided in Section 1(c) of the Fourth Transaction Agreement. Such Series C Preferred Partnership Units and Common Partnership Units shall be issued to TWE in exchange for its agreement to make the Capital Contribution described in Section 4.1(c)(iii).

(b) Paragon.

(i) As of the First Effective Date, the Partnership issued to Paragon the number of Series A Preferred Partnership Units and the number of Common Partnership Units provided in Sections 1(c) and 2(d) of the First Transaction Agreement. Such Series A Preferred Partnership Units and Common Partnership Units were issued to Paragon in exchange for Paragon's agreement to make the Capital Contribution described in Section 4.1(d)(i).

(ii) As of the Second Effective Date, the Partnership issued to Paragon the number of Series B Preferred Partnership Units and the number of Common Partnership Units provided in Section 1(c) of the Second Transaction Agreement. Such Series B Preferred Partnership Units and Common Partnership Units were issued to Paragon in exchange for Paragon's agreement to make the Capital Contribution described in Section 4.1(d)(ii).

(iii) As of the Third Effective Date, the Partnership issued to Paragon the number of Series B Preferred Partnership Units and the number of Common Partnership Units provided in Section 1(c) of the Third Transaction Agreement. Such Series B Preferred Partnership Units and Common Partnership Units were issued to Paragon in exchange for Paragon's agreement to make the Capital Contribution described in Section 4.1(d)(iii).

(iv) On the Fourth Effective Date, the Partnership shall issue to Paragon the number of Series C Preferred Partnership Units and Common Partnership Units provided in Section 1(d) of the Fourth Transaction Agreement. Such Series C Preferred Partnership Units and Common Partnership Units shall be issued to Paragon in exchange for its agreement to make the Capital Contribution described in Section 4.1(d)(iv).

(c) Preferred Partnership Units. At any time that a Partner is treated as having made a contribution to the Partnership pursuant to Section 4.1(e) (unless all Partners are treated as having made such a contribution as provided in the proviso to Section 4.1(e)(ii)), the Partnership shall issue to such Partner, on the date on which such contribution is deemed made, one Preferred Partnership Unit for each $1,000 deemed contributed by such Partner on such date.

4.3 Indebtedness.

(a) (i) In accordance with the First Transaction Agreement, the Partnership assumed and otherwise took subject to, the Assumed CVI Liabilities and the Assumed Paragon Liabilities (as such terms are defined in Sections 1(a) and 2(b) of the First Transaction Agreement).

(ii) In accordance with the Second Transaction Agreement, the Partnership assumed or otherwise took subject to, the Assumed Second Liabilities (as such terms are defined in Section 1(a) of the Second Transaction Agreement).

(iii) In accordance with the Third Transaction Agreement, the Partnership assumed or otherwise took subject to, the Assumed Third Liabilities (as such terms are defined in Section 1(a) of the Third Transaction Agreement).

(iv) In accordance with the Fourth Transaction Agreement, the Partnership shall assume or otherwise take subject to, the Assumed Fourth Transaction Liabilities (as such terms are defined in Section 1(a) of the Fourth Transaction Agreement).

(b) Subject to Sections 3.2(e) and 3.2(f), from time to time upon the written request of any Partner, the Partnership shall incur Indebtedness which, in the good faith judgment of the Managing Partner is available on commercially reasonable terms, provided such Indebtedness expressly is non-recourse to any Partner.

(c) Subject to the limitation in Section 5.1(a)(iv), in the event the Partnership incurs Indebtedness pursuant to this Section 4.3, the proceeds of such Indebtedness shall be distributed to the Partners in accordance with
Section 5.1 below.

(d) As promptly as practicable after the Managing Partner determines to cause the Partnership to incur, create or assume any Indebtedness, but not less than 10 days before the incurrence, creation or assumption by the Partnership of such Indebtedness, the Managing Partner shall give Advance/Newhouse notice and a reasonably detailed description thereof, including a description of any restrictions on distributions of the type referred to in the next sentence contained in the agreement governing such Indebtedness (the "Indebtedness Notice"). The Managing Partner shall use reasonable best efforts in negotiating such agreement to exclude from the credit (or other) agreement(s) entered into by the Partnership in connection with such Indebtedness any restrictions on distributions by the Partnership with respect to any Preferred Partnership Units (it being understood that, subject to Section 3.2(g), the Partnership shall not be required to exclude any restrictions on distributions with respect to any Preferred Partnership Units from any such agreement if as a result of such exclusion the Indebtedness governed by such agreement would bear a higher rate of interest or such agreement would contain more restrictive covenants than if such agreement did not exclude such restrictions, assuming for such purpose that the Partnership did not own the assets held in the Preferred Investment Pool).

SECTION 5 CASH DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES

5.1 Distributions.

(a) Distributions Prior to Sixth Anniversary. Except as provided in Sections 5.1(d), 5.1(e), 5.2 and 8.2, prior to the sixth anniversary of the First Effective Date, all distributions by the Partnership shall be made as follows:

(i) The Partnership shall, at least quarterly, distribute (to the extent not prohibited by any applicable contractual restrictions) to the holders of the Preferred Partnership Units all cash received with respect to the Preferred Investment Pool associated with such Preferred Partnership Units, until each holder of Preferred Partnership Units shall have received aggregate distributions pursuant to this Section 5.1(a)(i) in an amount equal to the product of the Effective Tax Rate times the Net Cumulative Preferred Taxable Income allocated to such holder of Preferred Partnership Units during the period commencing on the Initial Closing Date and ending on the last day of the fiscal quarter immediately preceding the date of distribution.

(ii) With respect to any Fiscal Year in which Paragon and TWE are expected (based on the Managing Partner's good faith estimate) to be allocated Net Profit pursuant to Section 5.3(b)(ii), the Partnership shall, at least quarterly, distribute (to the extent not prohibited by any applicable contractual restrictions) all Distributable Cash to Paragon and TWE (on a pari passu basis in proportion to the excess amounts calculated for each of them in clauses (A) and (B) below, respectively):

(A) until Paragon shall have received distributions, with respect to the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by it in an amount equal to the excess of (I) the sum of (x) such estimated Net Profit expected to be allocated to such Partner pursuant to Section 5.3(b)(ii)(A) and (y) the Net Profit allocated to such Partner pursuant to Section 5.3(b)(ii)(A) for all prior Fiscal Years, over (II) the distributions to Paragon pursuant to this Section 5.1(a)(ii)(A) for all prior Fiscal Years, which distributions shall be allocated among the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by Paragon, pari passu, in proportion to such excess amount calculated for each of them; and

(B) until TWE shall have received distributions with respect to the Series C Preferred Partnership Units held by it in an amount equal to the excess of (I) the sum of (x) such estimated Net Profit expected to be allocated to such Partner pursuant to Section 5.3(b)(ii)(B) and (y) the Net Profit allocated to such Partner pursuant to Section 5.3(b)(ii)(B) for all prior Fiscal Years, over (II) the distributions to TWE pursuant to this Section 5.1(a)(ii)(B) for all prior Fiscal Years.

(iii) After the Partnership has made distributions with respect to the Preferred Partnership Units, the Series A Preferred Partnership Units, Series B Preferred Partnership Units and Series C Preferred Partnership Units in accordance with clauses (i) and (ii), the Partnership shall, at least quarterly, distribute (to the extent not

prohibited by any applicable contractual restrictions) to the Partners Distributable Cash, in proportion to the respective amounts required to be distributed to each such Partner pursuant to this Section 5.1(a)(iii), in an amount equal to 25 percent of such Partner's Net Tax Amount for the taxable year that includes such calendar quarter (as estimated in good faith by the Managing Partner). The Managing Partner's estimate of such Partner's Net Tax Amount for such year shall be revised prior to each distribution for such year and upon the filing of the Partnership's Federal income tax return for such year, and following such revision, (y) the Partnership shall distribute to such Partner the excess (if any) of the amount that should have been distributed to such Partner pursuant to this Section 5.1(a)(iii) based on such revised estimate, over the amount actually distributed to such Partner pursuant to this Section 5.1(a)(iii), plus interest thereon at the rate paid by the Partnership on its senior Indebtedness, or (z) such Partner shall contribute to the Partnership the excess (if any) of the amount actually distributed to such Partner pursuant to this Section 5.1(a)(iii) over the amount that should have been distributed to such Partner pursuant to this Section 5.1(a)(iii) based on such revised estimate, plus interest thereon at the rate paid by the Partnership on its senior Indebtedness. To the extent there is insufficient available cash to make distributions pursuant to this Section 5.1(a)(iii) at the time required, the Partnership shall pay interest on such shortfall at the rate paid by the Partnership on its senior Indebtedness, and such interest shall be paid out of the Partnership's first available Distributable Cash.

(iv) After the Partnership has made the distributions required by clauses (i), (ii) and (iii), any remaining Distributable Cash shall, at least quarterly, be distributed to the Partners in accordance with their Percentage Interests, unless they make the election provided in Section 5.1(c); provided, however, that during the period ending on the third anniversary of the Fourth Effective Date, distributions to any Partner pursuant to this Section 5.1(a)(iv) shall not, without the consent of TWE, exceed an amount which, when added to the distributions to such Partner pursuant to Section 5.1(a)(iii), exceed the sum of (x) such Partner's permitted "operating cash flow distribution," as determined pursuant to Treasury Regulation Section 1.707-4(b), and (y) the amount of Partnership indebtedness incurred by the Partnership during the taxable year that includes such calendar quarter and the proceeds of which are distributed to the Partners, to the extent such indebtedness is included in such Partner's basis in its interest in the Partnership pursuant to Code Section 752 and Treasury Regulation Section 1.707-5(a)(2).

(b) Distributions After Sixth Anniversary. Except as provided in Sections 5.1(d), 5.1(e), 5.2 and 8.2, on and after the sixth anniversary of the First Effective Date, all distributions by the Partnership shall be made as follows:

(i) The Partnership shall, at least quarterly, distribute (to the extent not prohibited by any applicable contractual restrictions) to the holders of the Preferred Partnership Units all cash received with respect to the Preferred Investment Pool associated with such Preferred Partnership Units, until each holder of Preferred Partnership Units shall have received aggregate distributions pursuant to Section 5.1(a)(i) and this Section 5.1(b)(i) in an amount equal to the product of the Effective Tax Rate times the Net Cumulative Preferred Taxable Income allocated to such holder of Preferred

Partnership Units during the period commencing on the Initial Closing Date and ending on the last day of the fiscal quarter immediately preceding the date of distribution.

(ii) With respect to any Fiscal Year in which Paragon and TWE are expected (based on the Managing Partner's good faith estimate) to be allocated Net Profit pursuant to Section 5.3(b)(ii), the Partnership shall, at least quarterly, distribute (to the extent not prohibited by any applicable contractual restrictions) all Distributable Cash to Paragon and TWE (on a pari passu basis in proportion to the excess amounts calculated for each of them in clauses (A) and (B) below, respectively):

(A) until Paragon shall have received distributions, with respect to the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by it in an amount equal to the excess of (I) the sum of (x) such estimated Net Profit expected to be allocated to such Partner pursuant to Section 5.3(b)(ii)(A) and (y) the Net Profit allocated to such Partner pursuant to Section 5.3(b)(ii)(A) for all prior Fiscal Years, over (II) the distributions to Paragon pursuant to this Section 5.1(b)(ii)(A) and Section 5.1(a)(ii)(A) for all prior Fiscal Years, which distributions shall be allocated among the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by Paragon, pari passu, in proportion to such excess amount calculated for each of them; and

(B) until TWE shall have received distributions with respect to the Series C Preferred Partnership Units held by it in an amount equal to the excess of (I) the sum of (x) such estimated Net Profit expected to be allocated to such Partner pursuant to Section 5.3(b)(ii)(B) and (y) the Net Profit allocated to such Partner pursuant to Section 5.3(b)(ii)(B) for all prior Fiscal Years, over (II) the distributions to TWE pursuant to this Section 5.1(b)(ii)(B) and Section 5.1(a)(ii)(B) for all prior Fiscal Years.

(iii) After the Partnership has made distributions with respect to the Preferred Partnership Units, the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units in accordance with clauses (i) and (ii), the Partnership shall, at least quarterly, distribute (to the extent not prohibited by any applicable contractual restrictions) to the Partners Distributable Cash, in proportion to the respective amounts required to be distributed to each such Partner pursuant to this Section 5.1(b)(iii), in an amount equal to 25 percent of such Partner's Net Tax Amount for the taxable year that includes such calendar quarter (as estimated in good faith by the Managing Partner). The Managing Partner's estimate of such Partner's Net Tax Amount for such year shall be revised prior to each distribution for such year and upon the filing of the Partnership's Federal income tax return for such year, and following such revision, (y) the Partnership shall distribute to such Partner the excess (if any) of the amount that should have been distributed to such Partner pursuant to this Section 5.1(b)(iii) based on such revised estimate, over the amount actually distributed to such Partner pursuant to this Section 5.1(b)(iii), plus interest thereon at the rate paid by the Partnership on its senior Indebtedness, or (z) such Partner shall contribute

to the Partnership the excess (if any) of the amount actually distributed to such Partner pursuant to this Section 5.1(b)(iii) over the amount that should have been distributed to such Partner pursuant to this Section 5.1(b)(iii) based on such revised estimate, plus interest thereon at the rate paid by the Partnership on its senior Indebtedness. To the extent there is insufficient available cash to make distributions pursuant to this Section 5.1(b)(iii) at the time required, the Partnership shall pay interest on such shortfall at the rate paid by the Partnership on its senior Indebtedness, and such interest shall be paid out of the Partnership's first available Distributable Cash.

(iv) After the Partnership has made the distributions required by clauses (i), (ii) and (iii), the Partnership shall distribute (to the extent not prohibited by any applicable contractual restrictions) any remaining Distributable Cash to Paragon and TWE on a pari passu basis in redemption of outstanding Series A Preferred Partnership Units, Series B Preferred Partnership Units and Series C Preferred Partnership Units, at a redemption price of $1,000 per Series A Preferred Partnership Unit, Series B Preferred Partnership Unit or Series C Preferred Partnership Unit, as the case may be, so that the Partnership shall have redeemed such Series A Preferred Partnership Units, Series B Preferred Partnership Units and Series C Preferred Partnership Units in accordance with the following:

(A) Prior to the seventh anniversary of the First Effective Date, the Partnership shall have redeemed one-third of the number of Series A Preferred Partnership Units and Series B Preferred Partnership Units originally issued pursuant to Section 4.2(a)(v)(B) or Section 4.2(b);

(B) Prior to the eighth anniversary of the First Effective Date, the Partnership shall have redeemed, in the aggregate, two-thirds of the number of Series A Preferred Partnership Units and Series B Preferred Partnership Units, plus one-third of the number of Series C Preferred Partnership Units, in each case that were originally issued pursuant to Sections 4.2(a)(v)(B) and 4.2(b); and

(C) Prior to the ninth anniversary of the First Effective Date, the Partnership shall have redeemed, in the aggregate, all of the outstanding number of Series A Preferred Partnership Units and Series B Preferred Partnership Units, plus two-thirds of the number of Series C Preferred Partnership Units, in each case that were originally issued pursuant to Sections 4.2(a)(v)(B) and 4.2(b); and

(D) On and after the tenth anniversary of the First Effective Date, the Partnership shall have redeemed all outstanding Series A Preferred Partnership Units, Series B Preferred Partnership Units and Series C Preferred Partnership Units.

Each distribution pursuant to this Section 5.1(b)(iv) shall be made with respect to the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and

Series C Preferred Partnership Units, as applicable, held by Paragon and TWE, pari passu, in proportion to the number of each outstanding.

(v) After the Partnership shall have made all distributions required by clauses (i), (ii), (iii) and (iv), any remaining Distributable Cash shall, at least quarterly, be distributed to the Partners in accordance with their Percentage Interests, unless they make the election provided in Section 5.1(c).

(c) Election Not to Receive Distribution. Notwithstanding
Section 5.1(a)(iv) or Section 5.1(b)(v), at any time that the Partnership proposes to make distributions to the Partners pursuant to Section 5.1(a)(iv) or
Section 5.1(b)(v), any of such Partners may elect not to receive the distribution proposed to be distributed to it, and the amount of such proposed distribution shall be treated as a contribution to the Partnership by such Partner pursuant to Section 4.1(d), and shall no longer be considered to be part of Distributable Cash for purposes of Section 5.1.

(d) Net Proceeds of Sale. Following the sale, exchange, or other disposition of all or substantially all of the assets of the Partnership, or upon the liquidation of the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g), and after payment of, or adequate provision for, the debts and obligations of the Partnership, the remaining assets of the Partnership shall be distributed to the Partners (after giving effect to all contributions, distributions, allocations, and other Capital Account adjustments for all taxable years, including the year during which such liquidation occurs) as follows:

(i) First, the applicable Preferred Investment Pool shall be distributed to the holder of Preferred Partnership Units in redemption of all such Preferred Partnership Units;

(ii) Second, the Priority Return accrued and unpaid as of the date of liquidation shall be distributed to Paragon and TWE in respect of the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by each of them, as applicable, on a pari passu basis in proportion to the amounts of such returns;

(iii) Third, all outstanding Series A Preferred Partnership Units, Series B Preferred Partnership Units and Series C Partnership Units shall be redeemed at a redemption price of $1,000 per Series A Preferred Partnership Unit, Series B Partnership Unit or Series C Partnership Unit, as the case may be; and

(iv) Finally, the remaining assets of the Partnership shall be distributed to the Partners so as to effectuate the agreement among the Partners that the distributions remaining after paying taxes on the Partners' Special Income and Gross Profit and Gross Loss allocated under Section 5.3(d)(ii) with respect to the year of such distribution are in proportion to their respective Percentage Interests, assuming all Partners are taxed at the Special Effective Tax Rate and taking into account any

additional tax paid by Advance/Newhouse due to the inability of it (or the Persons that are the taxpayers with respect to income of it) to use all Taxable Loss allocable to it.

(e) Withholding. All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment or distribution to a Partner shall be treated as amounts distributed to such Partner pursuant to Section 5.1 for all purposes of this Agreement.

5.2 Redemption of Preferred Partnership Units. Upon an Advance/Newhouse Redemption Event, TWE Redemption Event, or Paragon Redemption Event, Advance/Newhouse, TWE or Paragon, respectively, shall have the option to require the Partnership to redeem all or some of the Preferred Partnership Units held by such Partner. Such redemption option shall be exercisable by delivery of a written notice (the "Redemption Notice") to the Partnership indicating that an Advance/Newhouse Redemption Event, TWE Redemption Event, or Paragon Redemption Event, as applicable, has occurred, and setting forth the number of Preferred Partnership Units to be redeemed by the Partnership (the "Redeemed Preferred Partnership Units"). As soon as reasonably practicable, but no later than five business days following the delivery of the Redemption Notice, the Partnership shall distribute to Advance/Newhouse, TWE or Paragon, as applicable, the applicable Preferred Investment Pool (or pro rata portion thereof based on the ratio of the number of Redeemed Preferred Partnership Units to the total number of Preferred Partnership Units held by Advance/Newhouse, TWE or Paragon, as applicable).

5.3 Allocations of Preferred Profit; Preferred Loss; Net Profit and Net Loss.

(a) Priority Allocations. All Preferred Profit and Preferred Loss with respect to a Preferred Investment Pool for any Fiscal Year (or portion thereof) shall be allocated to the holder of Preferred Partnership Units to which such Preferred Investment Pool relates.

(b) Allocations of Net Profit. Except as otherwise provided in Sections 5.3(d) and 5.3(e), after giving effect to the allocations provided in Sections 5.3(a), 5.5 and 5.8, the Net Profit for each Fiscal Year (or portion thereof) shall be allocated to the Partners as follows:

(i) First, Net Profit shall be allocated to Paragon and TWE (on a pari passu basis in proportion to the excess amounts calculated in clauses (A) and (B) below, respectively):

(A) until Paragon shall have been allocated, with respect to the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by it, Net Profit in an amount equal to the excess, if any, of (I) the aggregate Net Loss allocated to Paragon pursuant to Section 5.3(c)(ii)(A) for all prior Fiscal Years over (II) the aggregate Net Profit allocated to such Partnership Units pursuant to this Section 5.3(b)(i)(A) for all prior Fiscal Years, which allocation shall be divided

among the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by Paragon, pari passu, in proportion to such excess amount calculated for each of them; and

(B) until TWE shall have been allocated, with respect to the Series C Preferred Partnership Units held by it, Net Profit in an amount equal to the excess, if any, of (I) the aggregate Net Loss allocated to TWE pursuant to Section 5.3(c)(ii)(B) for all prior Fiscal Years over (II) the aggregate Net Profit allocated to such Partnership Units pursuant to this Section 5.3(b)(i)(B) for all prior Fiscal Years.

(ii) Second, Net Profit shall be allocated to Paragon and TWE (on a pari passu basis in proportion to the excess amounts calculated in clauses (A) and (B) below, respectively):

(A) until Paragon shall have been allocated, with respect to the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by it, Net Profit in an amount equal to the excess, if any, of (I) the cumulative Series A Priority Return, the cumulative Series B Priority Return and the cumulative Series C Priority Return, in each case accrued through the end of such Fiscal Year (or portion thereof) over (II) the aggregate Net Profit allocated to such Partner pursuant to this Section 5.3(b)(ii)(A) for all prior Fiscal Years, which amount of Net Profit shall be allocated among the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by Paragon, pari passu, in proportion to such excess amount calculated for each of them; and

(B) until TWE shall have been allocated with respect to the Series C Partnership Units held by it, Net Profit in an amount equal to the excess, if any, of (I) the cumulative Series C Priority Return accrued through the end of such Fiscal Year (or portion thereof) over (II) the aggregate Net Profit allocated to such Partner pursuant to this Section 5.3(b)(ii)(B) for all prior Fiscal Years.

(iii) Third, Net Profit shall be allocated to the Partners, in proportion to and to the extent of the amount required to be allocated pursuant to this Section 5.3(b)(iii), until each such Partner has been allocated Net Profit pursuant to this Section 5.3(b)(iii) in an amount equal to the excess of (y) such Partner's aggregate Maximum Income Amount for such Fiscal Year and all prior Fiscal Years, over (z) the aggregate Net Profit allocated to such Partner pursuant to this Section 5.3(b)(iii) for all prior Fiscal Years; and

(iv) Thereafter, Net Profit shall be allocated to the Partners in accordance with their Percentage Interests.

(c) Allocations of Net Loss. Except as otherwise provided in Sections 5.3(d) and 5.3(e), after giving effect to the allocations provided in Sections 5.3(a), 5.5 and 5.8, Net Loss for each Fiscal Year (or portion thereof) shall be allocated as follows:

(i) First, Net Loss for such Fiscal Year (or portion thereof) shall be allocated to the Partners in accordance with their Percentage Interests until Advance/Newhouse's Capital Account is reduced to the excess, if any, of the aggregate Net Profit allocated to such Partner pursuant to Section 5.3(b)(iii) for all prior Fiscal Years, over the aggregate Special Tax Amounts distributed to such Partner pursuant to Sections 5.1(a)(iii) and 5.1(b)(iii) for all prior Fiscal Years.

(ii) Second, Net Loss for such Fiscal Year (or portion thereof) shall be allocated to Paragon and TWE (on a pari passu basis in proportion to the excess amounts calculated in clauses (A) and (B) below, respectively):

(A) with respect to the Series A Preferred Partnership Units and the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by Paragon, until Paragon's Capital Account has been reduced to the excess, if any, of the aggregate Net Profit allocated to Paragon pursuant to Section 5.3(b)(iii) for all prior Fiscal Years, over the aggregate Special Tax Amounts distributed to pursuant to Sections 5.1(a)(iii) and 5.1(b)(iii) for all prior Fiscal Years, which allocation shall be divided among the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by Paragon, pari passu, in proportion the amount calculated with respect to each of them; and

(B) with respect to the Series C Preferred Partnership Units held by TWE, until TWE's Capital Account has been reduced to the excess, if any, of the aggregate Net Profit allocated to TWE pursuant to Section 5.3(b)(iii) for all prior Fiscal Years, over the aggregate Special Tax Amounts distributed to pursuant to Sections 5.1(a)(iii) and 5.1(b)(iii) for all prior Fiscal Years.

(iii) Thereafter, Net Loss for such Fiscal Year (or portion thereof) shall be allocated to the Partners in accordance with their Percentage Interests.

(d) Allocation of Gain or Loss Upon Sale. Notwithstanding
Section 5.3(b) and Section 5.3(c), and after giving effect to the allocations provided in Section 5.3(a), in the event of a sale, exchange, or other disposition of all or substantially all of the assets of the Partnership, or upon the liquidation of the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g), beginning in the year in which the contract or agreement for such sale is entered into or, if such contract or agreement is entered into on or prior to the date on which the Partnership's Federal income tax return with respect to the prior year is required to be filed (not including any extensions), beginning in such prior year:

(i) First, Gross Profit shall be allocated to Paragon and TWE (on a pari passu basis in proportion to the excess amounts calculated in clauses (A) and (B) below, respectively):

(A) until Paragon shall have been allocated Gross Profit in an amount equal to the excess, if any, of (I) the sum of (x) the aggregate Net Loss allocated to Paragon pursuant to Section 5.3(c)(ii)(A) for all prior Fiscal Years, and (y) the cumulative Series A Priority Return, Series B Priority Return and Series C Priority Return accrued through the end of such Fiscal Year (or portion thereof), over (II) the aggregate Net Profit allocated to Paragon pursuant to Sections 5.3(b)(i)(A) and Section 5.3(b)(ii)(A) for all prior Fiscal Years, which allocation shall be divided among the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units held by Paragon, pari passu, in proportion to such excess amount calculated for each of them; and

(B) Until TWE shall have been allocated Gross Profit in an amount equal to the excess, if any, of (I) the sum of (x) the aggregate Net Loss allocated to TWE pursuant to Section 5.3(c)(ii)(B) for all prior Fiscal Years, and (y) the cumulative Series C Priority Return accrued through the end of such Fiscal Year (or portion thereof), over (II) the aggregate Net Profit allocated to TWE pursuant to Sections 5.3(b)(i)(B) and Section 5.3(b)(ii)(B) for all prior Fiscal Years.

(ii) Finally, Gross Profit and Gross Loss shall be allocated to the Partners so as to cause the credit balance in each Partner's Capital Account to equal, as nearly as possible, the amount each Partner would receive in a distribution on dissolution, if the distribution were made in accordance with Section 5.1(d).

In the event that such sale or liquidation does not take place within the year following the year of the signing of the contract or agreement, or upon the termination of such contract or agreement, if earlier, allocations of Gross Profit or Gross Loss shall be made to reverse, as rapidly as possible, the effect of any such allocations made pursuant to this Section 5.3(d).

5.4 Section 754 Adjustment. To the extent any adjustment to the adjusted tax basis of any asset of the Partnership pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations. Any Partner may cause the Partnership to make any election permitted under Code Section 754.

5.5 Other Allocation Rules.

(a) In the event that the Partnership is entitled to an income tax deduction for the excess of the Closing Price of a unit of TWX Securities on the Initial Closing Date over the exercise price paid by the Eligible Option Holder for such unit of TWX Securities, such deduction and an equal amount of Gross Loss shall be specifically allocated to TWE or Paragon, as appropriate, and TWE or Paragon, as appropriate, shall be deemed to have made a capital contribution to the Partnership in the same amount.

(b) In the event that, pursuant to any Final Determination of the Partnership's Taxable Income or Taxable Loss or the Partner's distributive shares thereof, (i) the Partnership's Taxable Income or Taxable Loss is adjusted or (ii) the Partners' distributive shares of the Partnership's Taxable Income or Taxable Loss are adjusted, Gross Profit or Gross Loss shall be allocated to the Partners to reflect the adjustments to the Partnership's Taxable Income or Taxable Loss or the Partners' distributive shares thereof so as to place the Partners as rapidly as possible, in conjunction with any distribution or contribution pursuant to Section 5.1(a)(iii) and Section 5.1(b)(iii), in the same relative positions they would have been in had the Taxable Income or Taxable Loss or distributive shares thereof as adjusted been taken into account originally (including any interest with respect to any deficiency or any refund).

(c) In the event that interest is paid by the Partnership to a Partner pursuant to Section 5.1(a)(iii) or Section 5.1(b)(iii), a special allocation of Gross Profit shall be made to such Partner in an amount equal to the amount of such interest.

(d) If any fees or other payments deducted for federal income tax purposes by the Partnership are recharacterized by a final determination of the Internal Revenue Service as nondeductible distributions to any Partner, then, notwithstanding all other allocation provisions, Gross Profit shall be allocated to such Partner (for each Fiscal Year in which such recharacterization occurs) in an amount equal to the fees or payments recharacterized.

(e) All items of Partnership income, gain, loss, deduction, and any other allocations not otherwise provided for shall be allocated among the Partners in the same proportion as they share the Preferred Profits, Preferred Losses, Net Profits, Net Losses, Gross Profits or Gross Loss to which such items relate for the Fiscal Year. Any credits against income tax shall be allocated among the Partners in accordance with their Percentage Interests.

(f) For any year with respect to which the Partnership is required to pay New York City Unincorporated Business Tax, such tax shall be allocated among the Partners in a manner so that the benefit of any deduction, credit, exemption or exclusion that is available to the Partnership as a result of the activities, income or status of or payments by a particular Partner (a "Credit Partner") shall be allocated entirely to such Credit Partner. The foregoing shall be accomplished by charging the amount of such tax to the Capital Account of any Partner that is not a Credit Partner and by distributing to any Credit Partner an amount that bears the same proportion to such tax as such Credit Partner's Percentage Interest bears to the Percentage Interests of the Partners that are not Credit Partners.

(g) Notwithstanding Section 5.3(b), in the event that the Net Profit allocated to the Partners pursuant to Section 5.3(b)(iii) results in an allocation of Taxable Loss to Advance/Newhouse, then Net Profit shall be reallocated among the Partners so as to effectuate the agreement of the Partners that on an annual basis the distributions pursuant to Sections 5.1(a)(iii), 5.1(a)(iv), 5.1(b)(iii) and 5.1(b)(v) remaining after paying taxes on Special Income and Net Profit allocated pursuant to Sections 5.3(b)(iii) and 5.3(b)(iv) shall be in proportion to their respective Percentage Interests, assuming all Partners are taxed at the Special Effective Tax Rate and taking into account any additional tax paid by Advance/Newhouse due to the inability of it (or the Persons that are the taxpayers with respect to income of it) to use all Taxable Loss allocable to it.

5.6 Tax Allocations.

(a) Income, gain, loss, and deduction with respect to any property contributed to the capital of the Partnership, including property purchased with cash contributed to the capital of the Partnership by a Partner shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for Federal income tax purposes and its initial Gross Asset Value in accordance with the remedial allocation method set forth in Treasury Regulations
Section 1.704-3(d).

(b) If the Gross Asset Value of any asset of the Partnership is adjusted pursuant to paragraph (ii) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for Federal income tax purposes and its Gross Asset Value in accordance with Section 704(c) and the Treasury Regulations promulgated thereunder, including Treasury Regulations Sections 1.704-1(b)(4)(i) and 1.704-3(d).

(c) Subject to Section 11.8, any election or other decision relating to any allocations pursuant to this Section 5.6 shall be made by the Partnership, upon the approval of such election or other decision by the Managing Partner, in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 5.6 are solely for purposes of Federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of Net Profit, Net Loss, other items, or distributions pursuant to any provision of this Agreement.

(d) For purposes of Sections 5.1(d) and 5.5, within 45 days after the end of each Fiscal Year, Advance/Newhouse shall provide the Managing Partner with the Advance/Newhouse Loss Amount for such Fiscal Year.

5.7 Allocation in Event of Transfer. If any Partnership Units are transferred in accordance with Section 6.1, the Preferred Profit, Preferred Loss, Net Profit and Net Loss of the Partnership shall be allocated between the periods before and after the transfer by the closing of the books method. As of the date of such transfer, the transferee shall succeed to the Capital Account, Common Capital Contribution, Preferred Capital

Contribution, Series A Preferred Capital Contribution, Series B Preferred Capital Contribution and Series C Preferred Capital Contribution of the transferor Partner, to the extent that the transferor's Capital Account, Common Capital Contribution, Preferred Capital Contribution, Series A Preferred Capital Contribution, Series B Preferred Capital Contribution and Series C Preferred Capital Contribution relate to the transferred interest. This Section shall apply for purposes of computing a Partner's Capital Account and for federal income tax purposes.

5.8 Beneficial Assets and Subsidiary Beneficial Assets. The Partnership shall (and the Partners shall not, except as Partners of the Partnership) report, for Federal income tax purposes, the income, gain, deduction and loss with respect to the Beneficial Assets that are not Subsidiary Beneficial Assets, and the Partners shall (and the Partnership shall not) report, for Federal income tax purposes, the income, gain, deduction and loss with respect to the Subsidiary Beneficial Assets. In the event that, pursuant to any Final Determination (as defined below), the Partnership either (x) is treated as the beneficial owner of any of the Subsidiary Beneficial Assets prior to the actual contribution of such Subsidiary Beneficial Assets to the Partnership or (y) is treated as not the beneficial owner of any of the Beneficial Assets that are not Subsidiary Beneficial Assets prior to the actual contribution of such Beneficial Assets to the Partnership, to the extent necessary, appropriate adjustments shall be made to the distributions provided for in Section 5.1 so as to place the Partners and the Partnership in the same positions they would have been in had the Partnership's beneficial ownership of the Subsidiary Beneficial Assets or lack of beneficial ownership of such other Beneficial Assets been taken into account originally.

5.9 Set-off. If (a) by the earlier of the fourth anniversary of the First Effective Date, a restructuring of the Partnership pursuant to Section 8.2, or the purchase and sale of Common Partnership Units pursuant to Section
9(g)(ii), Advance/Newhouse shall not have contributed to the Partnership cash in an amount equal to the First Advance/Newhouse Contribution Amount plus interest thereon in accordance with Section 4.1(b)(ii), (b) by the earlier of the fourth anniversary of the Second Effective Date, a restructuring of the Partnership pursuant to Section 8.2, or the purchase and sale of Common Partnership Units pursuant to Section 9(g)(ii), Advance/Newhouse shall not have contributed to the Partnership cash in an amount equal to the Second Advance/Newhouse Contribution Amount plus interest thereon in accordance with Section 4.1(b)(iii), or (c) by the earlier of July 1, 2000, a restructuring of the Partnership pursuant to
Section 8.2 or the purchase and sale of Common Partnership Units pursuant to
Section 9(g)(ii), Advance/Newhouse shall not have contributed to the Partnership cash in the amount equal to the Third Advance/Newhouse Contribution Amount plus interest thereon in accordance with Section 4.1(b)(iv), or (d) by the earlier of the fourth anniversary of the Fourth Effective Date, a restructuring of the Partnership pursuant to Section 8.2 or the purchase and sale of Common Partnership Units pursuant to Section 9(g)(ii), Advance/Newhouse shall not have contributed to the Partnership cash in the amount equal to the Fourth Advance/Newhouse Contribution Amount plus interest thereon in accordance with
Section 4.1(b)(v), then, in addition to any other rights and remedies which the Partnership may have, the Partnership is hereby authorized at any time and from time to time, to the fullest extent permitted by law and without prior notice

to Advance/Newhouse (or any successor to or transferee of its Partnership Interests), to recoup, set-off and apply any and all amounts at any time owing or otherwise payable by the Partnership to Advance/Newhouse (or any successor to or transferee of its Partnership Interests), including, without limitation, any distributions payable in accordance with Section 5 and any distributions to, or Partnership liabilities assumed by, Advance/Newhouse in accordance with Section 8.2, and any amounts payable to Advance/Newhouse pursuant to Section 9, to satisfy Advance/Newhouse's obligations to make such contribution. To the extent that any amounts distributable in accordance with Section 5 or Section 8.2 are applied in accordance with the preceding sentence rather than distributed to Advance/Newhouse (or any successor to or transferee of its Partnership Interests), then such amounts shall be deemed distributed by the Partnership to Advance/Newhouse (or such successor or transferee) and recontributed by Advance/Newhouse (or such successor or transferee) to the Partnership and the Capital Account of Advance/Newhouse (or such successor or transferee) shall be adjusted to reflect such deemed distribution and recontribution.

SECTION 6 TRANSFERS OF PARTNERSHIP INTERESTS

6.1 Restrictions on Transfer.

(a) Transfers Generally Prohibited. No Partner shall, directly or indirectly, sell, transfer, assign, grant a participation in, or otherwise dispose of all or any part of its Partnership Interest (including through the issuance of equity interests in such Partner) unless:

(i) the transaction complies with all agreements entered into by the Partnership with third parties to which transfers of Partnership Interests are subject; and

(ii) the transferee of the Partner's Partnership Interest is admitted to the Partnership as a Partner and agrees to be bound by all the provisions of this Agreement; and

(iii) the transaction is (A) a transfer of all of a Partner's Partnership Interest (1) to a Newhouse Family Member, or to an Affiliate of Advance/Newhouse so long as at least 80% of the equity of such Affiliate is owned directly or indirectly by one or more Newhouse Family Members, in the case of Advance/Newhouse, (2) to a Wholly-Owned Affiliate of TWE, in the case of TWE, or (3) to TWE, TWX or a Wholly-Owned Affiliate of TWE or TWX, in the case of Paragon, (B) a transfer to the partners of TWE pursuant to a liquidation of TWE in which TWX or one or more of its Affiliates receives a majority of the Common Partnership Units owned by TWE, and TWX or such Affiliates agree to assume all the obligations of Managing Partner of the Partnership hereunder, (C) a transfer in connection with the incorporation of TWE (including any public offering of the stock of the corporate successor of TWE) pursuant to Article XIII of the TWE Partnership Agreement or otherwise, provided that TWX (or its Affiliates) exercises control over the corporate successor to TWE, and such corporate successor agrees to assume all the obligations of Managing Partner of the

Partnership hereunder, (D) a transfer in connection with the incorporation of Advance/Newhouse or pursuant to a public offering of partnership units in Advance/Newhouse (or of stock in the corporate successor of Advance/Newhouse) so long as, after giving effect to such public offering, Newhouse Family Members would own directly or indirectly at least 20% of the equity interests, and a majority of the voting interests, in Advance/Newhouse (or its corporate successor); (E) an issuance by TWE of any partnership interest in TWE so long as, after giving effect to such issuance, TWX would directly or indirectly own an interest at least equal to the TWI Minimum Interest (as defined in the TWE Partnership Agreement as in effect on September 9, 1994); (F) a "spinoff" or other distribution of TWE or its corporate successor to the shareholders of TWX; or (G) a pledge by any Partner of all or any portion of its Partnership Interests to a bank or other financial institution in connection with securing a bona fide loan made to such Partner; and

(iv) the transferee of such Partner's Partnership Interests is a domestically incorporated corporation or a partnership, all of the partners of which are domestically incorporated corporations.

For the purposes of the foregoing, "Newhouse Family Member" shall mean any Person who is a lineal descendant (including adoptees) of Meyer and Rose Newhouse, or any entity which is wholly-owned directly or indirectly by one or more of such lineal descendants, or any trust established for the sole benefit of one or more of such lineal descendants or their spouses.

(b) Ownership. Except as expressly permitted by this Agreement, each Partner shall (i) be the owner of the Partnership Interest indicated in the Partnership's records as being owned by such Partner, and (ii) have sole voting power with respect to its Partnership Interest and will not grant any proxy with respect to such Partnership Interest, enter into any voting trust or other voting agreement or arrangement with respect to such Partnership Interest, or grant any other rights to vote such Partnership Interest; provided, however, that the foregoing shall not limit the ability of a Partner to enter into agreements not inconsistent with this Agreement that restrict such Partner's ability to transfer its Partnership Interest.

(c) Transferees Bound. After any sale, assignment, transfer, or other conveyance of a Partnership Interest in accordance with the provisions of this Agreement, the transferred Partnership Interest shall continue to be subject to all of the provisions of this Agreement, including the provisions of this Section 6.

SECTION 7 ADVANCE/NEWHOUSE REPRESENTATION ON TWE COMMITTEE

7.1 TWE Full Service Network Management Committee. TWE shall cause one individual designated from time to time by Advance/Newhouse to be appointed a member of the Full Service Network Management Committee of TWE. Such Advance/Newhouse designee shall have the same rights and privileges as the members of the Full Service Network Management Committee of TWE that the Class A Partners (as

defined in the TWE Partnership Agreement) other than USW are entitled to designate (it being understood that such designee shall not be entitled to vote on matters before such committee).

SECTION 8 RESTRUCTURING OF PARTNERSHIP AT ELECTION OF EITHER PARTNER

8.1 Election by Partner. Advance/Newhouse or TWE, on and after the third anniversary of the Initial Closing Date, and Advance/Newhouse, on and after the occurrence of a "spin off" or other distribution of TWE or its corporate successor to the shareholders of TWX, may upon written notice (the "Restructuring Notice") to the other Partner, state its intention to cause a restructuring of the Partnership.

8.2 Restructuring of Partnership.

(a) Upon delivery of a Restructuring Notice in accordance with
Section 8.1 above, Advance/Newhouse and TWE shall negotiate in good faith the restructuring of the Partnership in a manner intended to minimize federal, state and local taxes. Within 60 days after delivery of a Restructuring Notice, upon the request of any Partner, the Managing Partner shall provide all Partners with a report listing all assets of the Partnership, including all projects in development and/or for which the Partnership has been charged.

(b) If, after a period of three months from the date of delivery of the Restructuring Notice, Advance/Newhouse and TWE have failed to agree on the terms of the restructuring of the Partnership, the Partnership shall be restructured by the withdrawal of Advance/Newhouse from the Partnership as follows:

(i) Within 15 days following the expiration of such three-month period, (A) if at such time Advance/Newhouse holds Preferred Partnership Units the Partnership shall distribute the Preferred Investment Pool attributable to such Preferred Partnership Units in redemption of all Preferred Partnership Units then held by Advance/Newhouse, (B) the Partnership shall calculate the "Restructuring Indebtedness Amount" (as defined in Section 8.2(b)(v) and the "Excess Tax Amount" (as defined in Section 8.2(b)(vi)) of Advance/Newhouse, if any, (C) subject to obtaining any required governmental or other third-party consents or approvals, the Partnership shall distribute 33 1/3% of the Pro Rata Assets (as defined below) to Advance/Newhouse, and (D) TWE shall (1) divide the remaining assets (and related liabilities) of the Partnership into three pools (the "Asset Pools") which shall meet the Asset Pool Criteria (as defined below) but which shall in any event be of equal value (in TWE's judgment), and (2) deliver a written notice to Advance/Newhouse setting forth the cable television systems and other assets contained in each such Asset Pool (the "Asset Pool Notice"). To the extent physically possible without impairing their inherent operability, assets of the Partnership which relate to more than one cable television system or to the Partnership as a whole shall be allocated either equally to every pool or on a 2/3:1/3 basis to the Partnership and Advance/Newhouse, respectively. Prior to making any distribution under this
Section 8.2(b) or delivering the Asset Pool Notice, the Partnership or TWE, as applicable,

shall contribute the assets comprising all developmental projects in which the Partnership has an interest and/or for which the Partnership has been charged (subject to the associated liabilities) to a separate legal entity or otherwise reconstitute such assets (subject to the associated liabilities) in a form (on terms agreed upon by each of the Partners) that allows an allocation of such assets (subject to the associated liabilities) to Advance/Newhouse and the Partnership as described in the previous sentence. For the purposes of the foregoing, "Pro Rata Assets" shall mean those assets of the Partnership, including without limitation those Beneficial Assets and Subsidiary Beneficial Assets, that are readily divisible into three identical pools without any material diminution in the aggregate value of such assets resulting from such division (such as stock, partnership interests and similar investments). For purposes of the foregoing, "Asset Pool Criteria" shall mean (I) no Preferred Cluster Area may be allocated to more than one Asset Pool, except in accordance with the following: (A) if the number of Subscribers in the Preferred Cluster Area having the largest number of Subscribers exceeds the product of the Determined Percentage and the number of all Subscribers in all Preferred Cluster Areas, then such excess may be allocated to more than one Asset Pool; and (B) if the Preferred Cluster Area having the largest number of Subscribers has been allocated to more than one Asset Pool, and if the number of Subscribers in the Preferred Cluster Area having the second largest number of Subscribers exceeds 33% of all Subscribers of all the Partnership Systems, then such excess may be allocated to more than one Asset Pool, and (II) (A) Subscribers in the same DMA in a Preferred Cluster Area may not be allocated to more than one pool, except to the extent that any one DMA in a Preferred Cluster Area is permitted to be split under clause (I) above, and (B) to the extent any DMA's are split they shall be split only along the lines of operable units.

(ii) Within 30 days following the delivery by TWE of the Asset Pool Notice, Advance/Newhouse shall select and retain ownership of one of the Asset Pools and the Partnership shall retain ownership of the remaining Asset Pools; provided that if Advance/Newhouse fails to make such selection within such 30-day period, then the Partnership shall be entitled to select and retain ownership of two of the Asset Pools and Advance/Newhouse shall retain ownership of the remaining Asset Pool. The Asset Pools allocated to Advance/Newhouse and the Partnership in accordance with this paragraph (ii) are referred to herein as the "Advance/Newhouse Asset Pool" and the "TWE Asset Pools," respectively.

(iii) As promptly as practical following the determination of the Advance/Newhouse Asset Pool and the TWE Asset Pools in accordance with paragraph (ii), subject to obtaining any required governmental or other third-party consents or approvals, the Partnership shall distribute the cable television systems and other assets comprising the Advance/Newhouse Asset Pool to Advance/Newhouse in complete liquidation of its Common Partnership Units; provided that with respect to any assets in the Advance/Newhouse Pool that for Federal income tax purposes were deemed contributed to the Partnership within the immediately preceding Applicable Contribution Period by TWE, or Paragon, and with respect to any assets in the TWE Asset Pools that for Federal income tax purposes were deemed contributed to the Partnership within the immediately preceding Applicable Contribution Period by Advance/Newhouse, the Partners shall cooperate to cause such liquidation of the Advance/Newhouse Common

Partnership Units to be effectuated in a manner, and agree to defer the distribution of assets to such time, as will minimize the taxes payable in connection with such liquidation.

(iv) As the cable television systems and other assets comprising the Advance/Newhouse Asset Pool are distributed or deemed distributed for Federal income tax purposes, (A) if there is an Excess Tax Amount with respect to Advance/Newhouse, the Partnership shall be allocated liabilities otherwise allocable to the Advance/Newhouse Pool (the "Excess Tax Amount Indebtedness") equal to the product of (y) one (1) minus the Advance/Newhouse Percentage Interest, and (z) such Excess Tax Amount of Advance/Newhouse, (B) Advance/Newhouse shall execute an assumption agreement pursuant to which it will assume (or to the extent necessary, in the case of clause (II) below, will refinance or repay) (I) all liabilities relating to, arising out of or otherwise attributable to the Advance/Newhouse Asset Pool (as reduced by the Excess Tax Amount Indebtedness, if any), and (II) liabilities otherwise allocable to the TWE Asset Pools (the "Restructuring Indebtedness") in an amount equal to the Restructuring Indebtedness Amount and will further agree to indemnify the Partnership for any losses the Partnership might suffer with respect to any of such liabilities, and (C) the Partnership shall agree to indemnify Advance/Newhouse for any losses Advance/Newhouse might suffer with respect to any liabilities relating to, arising out of or otherwise attributable to the TWE Asset Pools or the Excess Tax Amount Indebtedness. The assumption agreement to be executed by Advance/Newhouse shall contain the terms contained in the Assumption Agreement executed by the Partnership in accordance with Section 3.4(a) of the Contribution Agreement and the indemnity of Advance/Newhouse and the Partnership shall be in the form of Sections 8.2 and 8.3 of the Contribution Agreement. As Advance/Newhouse assumes liabilities relating to, arising out of or otherwise attributable to the Advance/Newhouse Asset Pool, Paragon and/or TWE shall guarantee remaining liabilities of the Partnership and take other steps reasonably necessary so as to reduce, to the greatest extent possible, each such Partner's Debt Shift Tax Amount arising from the restructuring; provided however, that such Partners shall not be required to guarantee remaining liabilities of the Partnership to the extent such guarantee would cause the other of such Partners to recognize income pursuant to Code Sections 731 and
752. To the extent possible, liabilities assumed by Advance/Newhouse shall be qualified liabilities (as defined in Treasury Regulation Section 1.707-6(b)(2)) of the Partnership.

(v) The "Restructuring Indebtedness Amount" shall equal the product of (A) the Advance/Newhouse Percentage Interest, and (B) the sum of (i) the Priority Return accrued and unpaid as of the date of distribution with respect to the Series A Preferred Partnership Units, the Series B Preferred Partnership Units and the Series C Preferred Partnership Units, respectively, held by Paragon and TWE, (ii) the redemption price for all outstanding Series A Preferred Partnership Units, Series B Preferred Partnership Units and Series C Preferred Partnership Units held by Paragon and TWE, and (iii) the sum of the Excess Tax Amount for the Partners other than Advance/Newhouse and other than the Satisfied Partner.

(vi) The "Excess Tax Amount" means, for each of two Partners, the Tax Amount that would be remaining for such Partners if the Partnership were to distribute the aggregate Tax Amounts of all Partners to the Partners in accordance with their Percentage Interests until one Partner (the "Satisfied Partner") shall have received its entire Tax Amount.

(vii) The "Tax Amount" means, for any Partner, the sum of the following amounts determined for such Partner, as applicable:

(A) If the restructuring has occurred as a result of the delivery by Advance/Newhouse of a Restructuring Notice that is not a Spin-Off Restructuring Notice:

(I) with respect to Paragon, the Paragon 704(c)(1)(B) Tax Amount with respect to assets deemed for Federal income tax purposes contributed to the Partnership within the immediately preceding Applicable Contribution Period by Paragon that are allocated to the Advance/Newhouse Asset Pool,

(II) with respect to TWE, the TWE
704(c)(1)(B) Tax Amount with respect to assets deemed for Federal income tax purposes contributed to the Partnership by TWE pursuant to the First Transaction Agreement or the Fourth Transaction Agreement within the immediately preceding Applicable Contribution Period that are allocated to the Advance/Newhouse Asset Pool,

(III) with respect to each Partner, the Restructuring Deferred Tax Amount with respect to assets contributed by such Partner (other than, in the case of TWE and Paragon, the assets referred to in clauses (I) and (II), and

(IV) with respect to Paragon and TWE, such Partner's Debt Shift Tax Amount.

(B) If the restructuring has occurred as a result of the delivery by TWE of the Restructuring Notice or the delivery by Advance/Newhouse of a Restructuring Notice that is a Spin-Off Restructuring Notice:

(I) with respect to Paragon, the Paragon 704(c)(1)(B) Tax Amount with respect to assets deemed for Federal income tax purposes contributed to the Partnership within the immediately preceding Applicable Contribution Period by Paragon that are allocated to the Advance/Newhouse Asset Pool,

(II) with respect to TWE, the TWE
704(c)(1)(B) Tax Amount with respect to assets deemed for Federal income tax purposes contributed to the Partnership by such Partner pursuant to the

Fourth Transaction Agreement within the immediately preceding Applicable Contribution Period that are allocated to the Advance/Newhouse Asset Pool,

(III) with respect to each Partner, the Restructuring Deferred Tax Amount with respect to assets contributed by such Partner (other than, in the case of Paragon and TWE the assets referred to in clauses (I) and (II) above), and

(IV) with respect to Paragon and TWE, such Partner's Debt Shift Tax Amount.

(c) During the period from the date of delivery of a Restructuring Notice in accordance with Section 8.1 to the date of determination of the Advance/Newhouse Asset Pool and TWE Asset Pools in accordance with
Section 8.2(b)(ii), the Partnership shall conduct its business in the ordinary course, consistent with past practice, and shall not engage in any extraordinary transactions that were not contemplated by a previously approved Long Term Strategic Plan or approved by the Executive Committee with the consent of Advance/Newhouse's representatives. Following the determination of the Advance/Newhouse Asset Pool and the TWE Asset Pools in accordance with Section 8.2(b)(ii), to the extent permitted by law, (i) the assets comprising such Asset Pools shall for all purposes be deemed to be owned by Advance/Newhouse and the Partnership, respectively, (ii) the Restructuring Indebtedness shall for all purposes be deemed to be an obligation of Advance/Newhouse and Advance/Newhouse shall have no obligation with respect to the Excess Tax Amount Indebtedness which shall for all purposes be deemed to be an obligation of TWE and Paragon as Partners of the Partnership following the restructuring of the Partnership hereunder, and (iii) until the Advance/Newhouse Asset Pool is actually distributed to Advance/Newhouse, (1) Advance/Newhouse's Partnership Interest shall entitle it only to (A) a distributive share of the income, gain, losses and deductions related to the Advance/Newhouse Asset Pool, (B) a distributive share of the assets comprising the Advance/Newhouse Asset Pool (subject to the related liabilities and the Restructuring Indebtedness) and (C) management rights relating to the business and affairs of the Advance/Newhouse Asset Pool, and (2) TWE's and Paragon's Partnership Interests shall entitle them only to (A) a distributive share of the income, gain, losses and deductions related to the TWE Asset Pools, (B) a distributive share of the assets comprising the TWE Asset Pools (subject to the related liabilities and the Excess Tax Amount Indebtedness) and (C) management rights relating to the business and affairs of the TWE Asset Pools.

8.3 Provision of Interim Services by TWE.

(a) In connection with a restructuring of the Partnership pursuant to Section 8.2(b), from and after the determination of the Advance/Newhouse Asset Pool and the TWE Asset Pools in accordance with Section 8.2(b)(ii), TWE shall use reasonable best efforts to ensure that the Advance/Newhouse Asset Pool continues to receive all of the services and benefits previously provided while part of the Partnership,

including but not limited to receiving from TWE and/or its Affiliates (i) management, operational and marketing services, and in particular, TWE shall encourage all Partnership employees whose duties primarily concern the operation of the cable television systems and other businesses included in the Advance/Newhouse Asset Pool to continue working for such systems and businesses and neither TWE nor any of its Affiliates shall employ any of such employees without the consent of Advance/Newhouse if Advance/ Newhouse intends in good faith to employ the applicable employees at such time, (ii) purchasing services, including to the extent possible and to the extent it would not require TWE or its Affiliates to engage in conduct for which monetary compensation to be paid hereunder would be inadequate, the maintenance of the cable television systems and businesses of the Advance/Newhouse Asset Pool under the programming, equipment and other purchasing agreements and arrangements of the TWE Cable Division and its Controlled Affiliates, so that such systems and businesses receive the benefits of the purchasing power of the TWE Cable Division and its Controlled Affiliates, and any equipment and other products procured by the TWE Cable Division shall be provided to the Advance/Newhouse Asset Pool on a pro-rata basis as from time to time provided to TWE's systems and businesses,
(iii) access to the expertise, knowledge and other services as may be rendered by the TWE Cable Division or its Controlled Affiliates as respects the Full Service Network, telephony (including personal communications services) and other businesses or services which the cable television systems and businesses of the Advance/Newhouse Asset Pool may be providing to their customers and (iv) such other services as Advance/Newhouse may reasonably request with respect to the Advance/Newhouse Asset Pool, all so that the businesses comprising such Advance/Newhouse Asset Pool may be operated in the ordinary course and until such time as Advance/Newhouse gives TWE written notice that it is in a position to assume full operational responsibility for the Advance/Newhouse Asset Pool; provided that TWE shall not be obligated to provide such services after the earlier of (1) the date on which Advance/Newhouse or its Affiliates shall no longer own the relevant assets comprising the Advance/Newhouse Asset Pool and
(2) the third anniversary of the transfer to Advance/Newhouse of franchises representing 70% of the Subscribers to the cable television systems represented by the Advance/Newhouse Asset Pool, unless TWE and Advance/Newhouse determine that the continuation of such arrangements would be beneficial to both parties. TWE and Advance/Newhouse shall in all instances cooperate with one another to obtain any and all consents necessary to transfer all assets in the Advance/Newhouse Asset Pool and the TWE Asset Pools to Advance/Newhouse and TWE, respectively. During the period referred to above, TWE shall use its reasonable best efforts in performing its obligations under this Section 8.3(a) to maintain the business, relationships and value of the Advance/Newhouse Asset Pool.

(b) TWE shall be compensated for its provision of such interim services in accordance with Section 3.1(h). TWE shall not be required to incur additional costs in connection with the provision of such interim services if such costs are not reimbursed by Advance/Newhouse pursuant hereto.

(c) In the event that TWE has acted in bad faith to frustrate the transfer to Advance/Newhouse of the franchises related to the Advance/Newhouse Asset

Pool, and does not cease such conduct immediately following receipt of notice thereof from Advance/Newhouse and correct the results of such conduct within a reasonable period of time but in no event more than 90 days following delivery of notice thereof by Advance/Newhouse, Advance/Newhouse, at its option, may either (i) recover from TWE any and all damages, costs or expenses suffered by Advance/Newhouse as a result of such breach, including, without limitation, loss in value of the Advance/Newhouse Asset Pool, direct or indirect damages, or (ii) have the put option set forth in Section 9 hereof. Further, each of the TWE Cable Division (on behalf of itself and its Controlled Affiliates) and Advance/Newhouse (on behalf of itself and its Controlled Affiliates) agrees not to own or operate a cable television system, MMDS, video dial tone or other multichannel video programming service in the franchise areas of the cable television systems of Advance/Newhouse and TWE, respectively, for so long as TWE continues to provide services under this Section 8.3 and for a period of five years following the expiration of the period referred to in Section 8.3(a) above (provided that the foregoing shall not prohibit any party from providing services of the type that are logically provided on a national or regional basis (such as direct broadcast satellite services)).

(d) Advance/Newhouse shall use its best efforts to assume full operational responsibility for the Advance/Newhouse Asset Pool as promptly as practicable.

8.4 TWE Right of First Refusal. If during the four-year period following the transfer to Advance/Newhouse of franchises representing 70% of the Subscribers to the cable television systems represented by the Advance/Newhouse Asset Pool (the "Refusal Period"), Advance/Newhouse or any of its Affiliates that succeed to its interest in the Advance/Newhouse Asset Pool desires to sell or otherwise dispose of all or any portion of the assets of the Advance/Newhouse Asset Pool or any equity interest therein (the "Transfer Assets"), Advance/Newhouse shall give TWE written notice thereof (the "Transfer Notice") and the price (which shall be payable in cash or debt issued by the purchaser of the Transfer Assets) and other material terms, which terms are reasonably capable of being satisfied by TWE (the "Transfer Terms"), on which it is willing to sell the Transfer Assets. For a period of 180 days from delivery of the Transfer Notice, TWE may elect to purchase the Transfer Assets from Advance/Newhouse on the Transfer Terms. In the event TWE fails to elect to purchase the Transfer Assets within such period, or if TWE elects to purchase the Transfer Assets but such purchase fails to be consummated within one year from delivery of the Transfer Notice, subject to extension if reasonably necessary to obtain regulatory consents (provided that if such necessary regulatory consents shall not have been obtained by the date which is nine months following the expiration of such one-year period, the parties shall negotiate in good faith alternative arrangements intended to achieve the economic effects of the foregoing transaction), Advance/Newhouse may sell the Transfer Assets to a third party at a price and on other terms no more favorable to such third party than the Transfer Terms at any time within 180 days following the expiration of the applicable period specified above. If Advance/Newhouse does not complete such sale on such terms within such 180-day period, then the provisions of this Section 8.4 shall again be applicable. The restrictions contained in this Section 8.4 shall expire at the end of the Refusal Period, and

Advance/Newhouse thereafter shall be free to sell any or all of the assets of the Advance/Newhouse Asset Pool to any third party free from TWE's right of first refusal set forth herein.

SECTION 9 ADVANCE/NEWHOUSE PUT OPTION

(a) On and after the occurrence of the death of both Samuel I. Newhouse, Jr. and Donald E. Newhouse (the "Advance/Newhouse Put Event"), Advance/Newhouse shall have the option, at each of the times set forth below, to require (i) the Partnership to purchase all of Advance/Newhouse's Preferred Partnership Units, if any, at a price payable as specified in paragraph (g) below (the "Advance/Newhouse Preferred Put Price"), and (ii) TWE to purchase all of Advance/Newhouse's Common Partnership Units at a price, payable as specified below, equal to the product of (A) the Partnership Value, determined in accordance with paragraph (d) below, and (B) the Advance/Newhouse Percentage Interest (the "Advance/Newhouse Common Put Price").

(b) Advance/Newhouse shall be entitled to exercise the put option described in this Section 9 during the 30-day period immediately following each of the first, seventh, thirteenth and nineteenth anniversaries of the Advance/Newhouse Put Event, and TWE shall consummate the purchase of the Partnership Units owned by Advance/Newhouse within one year from notice of the exercise by Advance/Newhouse of the put rights set forth in this Section 9, subject to extension if reasonably necessary to obtain regulatory consents (provided that if any such necessary regulatory consents shall not have been obtained by the date which is nine months following the expiration of such one-year period, the parties shall negotiate in good faith alternative arrangements intended to achieve the economic effects of the foregoing transaction), all as more fully described below. The Advance/Newhouse Put Option shall be exercisable by Advance/Newhouse by delivery of a written notice (an "Exercise Notice") to TWE on any of the exercise dates referred to above.

(c) Within 20 business days following the delivery by Advance/Newhouse of the Exercise Notice to TWE, TWE shall deliver to Advance/Newhouse a generic description of the types of consideration available to TWE under then applicable law which it may use in satisfaction of the Advance/Newhouse Common Put Price (i) if Advance/Newhouse elects to receive consideration that is reasonably designed to result in tax deferred treatment upon receipt thereof ("Tax Deferred Consideration") and (ii) if Advance/Newhouse elects to receive consideration that is not so designed ("Taxable Consideration"). Within 20 business days following receipt of such description, Advance/Newhouse shall deliver a written notice (the "Election Notice") to TWE specifying whether it elects to receive Tax Deferred Consideration or Taxable Consideration in satisfaction of the Advance/Newhouse Common Put Price.

(d) Within 60 days following the delivery by Advance/Newhouse of the Election Notice to TWE, an appraiser selected in accordance with paragraph (h) below (an "Appraiser") shall determine the Partnership Value (as defined below) for purposes of determining the Advance/Newhouse Common Put Price and shall deliver a

written notice (the "Valuation Notice") to each of Advance/Newhouse and TWE setting forth such determination, which shall be final and binding on the parties. "Partnership Value" shall mean the fair market value, as of the date of valuation, of the business of the Partnership (including the Beneficial Assets and the Subsidiary Beneficial Assets) as a going concern taking into account whether Advance/Newhouse has elected to receive Tax Deferred Consideration or Taxable Consideration in satisfaction of the Advance/Newhouse Common Put Price, reduced by the sum of the Priority Return accrued and unpaid as of the anticipated Advance/Newhouse Common Put Closing (as defined below) and the redemption price for all Series A Preferred Partnership Units, Series B Preferred Partnership Units and Series C Preferred Partnership Units outstanding as of the anticipated Advance/Newhouse Common Put Closing, and assuming that the Preferred Investment Pool shall have been distributed by the Partnership to the holder of any outstanding Preferred Partnership Units immediately prior to such valuation.

(e) Within 30 business days following the delivery of the Valuation Notice to each of Advance/Newhouse and TWE, TWE shall deliver to Advance/ Newhouse a written notice (the "Consideration Notice") setting forth the nature of the consideration to be paid in satisfaction of the Advance/Newhouse Common Put Price, which consideration shall be Taxable Consideration or Tax Deferred Consideration, as specified in the Election Notice. If such consideration is Taxable Consideration, it shall consist of cash or Qualified Assets (as defined below) or any combination thereof, as determined by TWE. If such consideration is Tax Deferred Consideration, it shall consist of Qualified Assets, as determined by TWE. The Consideration Notice shall specify
(i) the terms of each type of non-cash consideration to be paid in satisfaction of the Advance/Newhouse Common Put Price and (ii) the percentage of the total Advance/ Newhouse Common Put Price to be comprised of each type of consideration. For purposes of this Section 9, "Qualified Assets" shall mean (i) any debt or equity securities that are (or with respect to which depositary receipts are) listed on a national securities exchange or quoted on the National Association of Securities Dealers Automated Quotation System (NASDAQ) or (ii) other assets (including securities). In the event Advance/Newhouse, in the Election Notice, elects to receive Tax Deferred Consideration and accepts the Tax Deferred Consideration set forth in the Consideration Notice, TWE and its Affiliates shall indemnify Advance/Newhouse for taxes (and interest) attributable to any action by TWE and/or its Affiliates that causes the put transaction described in this Section 9 to be taxable.

(f) (i) Within 60 days following delivery of the Consideration Notice, an Appraiser shall determine the quantity (e.g., number of shares of stock or aggregate principal amount of debt securities) of each type of noncash consideration, if any, specified in the Consideration Notice, in the relative percentages set forth in the Consideration Notice, such that the value of such noncash consideration on a fully distributed basis, when added to any cash to be paid as part of the Advance/Newhouse Common Put Price, shall equal the Advance/Newhouse Common Put Price, and shall deliver a written notice of such determination to each of Advance/Newhouse and TWE.

(ii) Within 20 business days following delivery of the Appraiser's notice described in Section 9(f)(i), Advance/Newhouse shall have the right (exercisable by delivery of a written notice to TWE (a "Rejection Notice")) to elect not to accept the consideration set forth in the Consideration Notice and, in lieu of receiving such consideration, to elect to restructure the Partnership in accordance with Section 8.2; provided, however, that following such a restructuring TWE shall not be entitled to the right of first offer set forth in Section 8.4 with respect to sales of the Advance/Newhouse Asset Pool. If Advance/Newhouse fails to deliver a Rejection Notice within such 20 business day period, Advance/Newhouse shall be deemed to have accepted the consideration set forth in the Consideration Notice and the package of noncash consideration determined by such Appraiser plus any cash specified in the Consideration Notice shall be paid by TWE to Advance/Newhouse in satisfaction of the Advance/Newhouse Common Put Price in accordance with paragraph (g) below.

(iii) If Advance/Newhouse delivers a Rejection Notice, then TWE shall have the right, exercisable by delivery of a written notice to Advance/ Newhouse (a "Cash Purchase Notice") within 20 business days following delivery by Advance/Newhouse of such Rejection Notice, to purchase Advance/Newhouse's Common Partnership Units at a price equal to the Advance/Newhouse Common Put Price, payable in cash, as evidenced by a promissory note to be delivered by TWE to Advance/Newhouse (the "Put Note"). The Put Note shall be payable in three equal installments on the first, second and third anniversaries of the closing as provided in paragraph (g) below, with interest accrued on the unpaid principal amount of the Put Note and interest not paid when due, if any, (at the rate determined below) payable on such anniversaries. Notwithstanding the foregoing, payments under the Put Note may be accelerated, at the option of Advance/Newhouse on not less than 90 days prior notice to TWE (or, if fewer, the number of days in the period beginning 10 days after the closing and ending on the date on which any payment of Sale Taxes (as defined below) are due) (the "Acceleration Notice"), so that such payments shall provide Advance/Newhouse sufficient funds to pay when due all applicable federal, state and local income taxes (including estimated taxes and any interest on deferred tax liability required to be paid under Section 453A of the Code) as a result of the sale of Advance/Newhouse's Common Partnership Units (the "Sale Taxes"); provided, that in determining the amount necessary to provide Advance/Newhouse with sufficient funds to pay taxes, any amounts paid with respect to the Put Note in advance of the due date for such taxes shall be deemed available in full for such tax payments. In connection with any such acceleration of payments under the Put Note, Advance/Newhouse shall make any election to defer the payment of Sale Taxes reasonably requested by TWE; provided that no such election shall defer the payment of taxes to a period after the third anniversary of the closing. No later than the earlier of (i) the date of the Acceleration Notice and (ii) 20 business days prior to the date on which an election to defer the payment of Sale Taxes must be made, Advance/Newhouse shall provide TWE with information regarding the amount of Sale Taxes; the taxable year of the Persons incurring the Sale Taxes; the tax rate applicable to such Persons; the dates on which Sale Taxes (including estimated taxes) are due and the amount of taxes due on each such date; the estimated amounts of any costs imposed by the Code as a result of an election to defer the Sale Taxes, the nature of such estimated costs and the dates when such estimated costs are expected to be incurred; the date(s) by

which any such deferral election(s) must be made; and other information reasonably requested by TWE to enable TWE to determine whether to request that Advance/Newhouse make an election to defer the payment of Sale Taxes. If TWE requests that Advance/Newhouse make such an election, then not less than 10 business days prior to each of the anniversary dates of the closing, Advance/Newhouse shall provide TWE with a notice (each, a "Cost Notice") setting forth (x) the value discounted from the date of payment to the immediately prior anniversary date (or, in the case of a Cost Notice provided prior to the first anniversary date, the closing) of actual costs paid (or to be paid) during the one year period ending on the anniversary date with respect to which the Cost Notice is provided for any direct costs arising solely as a result of such election to defer the payment of Sale Taxes for a period ending on or before the third anniversary of the closing made at TWE's request, and (y) the value discounted from the date of payment to the immediately prior anniversary date (or, in the case of a Cost Notice provided prior to the first anniversary date, the closing) of interest to be paid on the anniversary date with respect to which the Cost Notice is provided with respect to the portion of the principal amount of the Put Note equal to the amount of tax deferred pursuant to such election. On the anniversary date with respect to which the Cost Notice is provided, TWE shall pay to Advance/Newhouse an amount equal to 50% of the excess, if any, of the amount determined in clause (x) of the preceding sentence over the amount determined in clause (y) of the preceding sentence; provided that to the extent the amount calculated in clause (y) for any prior year exceeds the amount calculated in clause (x) for such year, then such excess (increased by an amount equal to interest thereon from the prior anniversary date through the anniversary date which respect to which the Cost Notice is given calculated at a rate equal to the interest rate on the Put Note) shall be added to the amount calculated in clause (y) for the subsequent year. For purposes of determining discounted value, a rate equal to the interest rate paid with respect to the Put Note shall be applied. Advance/Newhouse agrees that it will take reasonable efforts to minimize the costs arising as a result of the election to defer the payment of Sale Taxes. In the event of such acceleration, payments otherwise due under the Put Note shall be reduced in direct order of maturity. The Put Note shall bear interest at a market rate (as agreed to by TWE and Advance/Newhouse or, if they are unable to agree, then at the election of either party, by an Appraiser selected in a manner consistent with that described in paragraph (h) below). If TWE delivers a Cash Purchase Notice within the 20 business day period referred to above, then the Partnership shall not be restructured and TWE shall purchase Advance/Newhouse's Common Partnership Units on the terms described above. If TWE fails to deliver a Cash Purchase Notice within such 20 business day period, then the provisions of this Section 9 shall terminate and the Partnership shall be restructured in accordance with Section 8.2; provided, however, that following such restructuring TWE shall not be entitled to the right of first offer set forth in Section 8.4 with respect to sales of the Advance/Newhouse Asset Pool.

(g) (i) Any purchase and sale of Preferred Partnership Units effected pursuant to this Section 9 shall be consummated at a closing at the offices of TWE on a business day specified by TWE (upon at least five days' notice by TWE to Advance/Newhouse) which shall be no later than 10 days following the delivery by Advance/Newhouse of the Exercise Notice or on such later date as may be agreed to by the parties. At such closing, the Partnership shall distribute to Advance/Newhouse the

Preferred Investment Pool relating to its Preferred Partnership Units, and Advance/Newhouse shall, pursuant to such instruments as may be reasonably requested by the Partnership, deliver to the Partnership all of its Preferred Partnership Units in appropriate form for transfer, free and clear of any lien or other encumbrances.

(ii) Any purchase and sale of Common Partnership Units effected pursuant to this Section 9 shall be consummated at a closing (the "Advance/Newhouse Common Put Closing") at the offices of TWE on a business day specified by TWE (upon at least five days' notice by TWE to Advance/Newhouse) which shall be no later than one year following the delivery by Advance/Newhouse of the Exercise Notice subject to extension if reasonably necessary to obtain regulatory consents (provided that if any such necessary regulatory consents shall not have been obtained by the date which is nine months following the expiration of such one-year period, the parties shall negotiate in good faith alternative arrangements intended to achieve the economic effects of the foregoing). At the Advance/Newhouse Common Put Closing, TWE shall pay to Advance/Newhouse the Advance/Newhouse Common Put Price, reduced by the Negative Put Deferred Tax Amount and increased by the Positive Put Deferred Tax Amount, and Advance/Newhouse shall, pursuant to such instruments as may be reasonably requested by TWE, deliver to TWE all of its Common Partnership Units in appropriate form for transfer, free and clear of any lien or other encumbrance. TWE may, with the consent of such assignee, assign to TWX or any of its Affiliates its rights and obligations under this Section 9; provided that such assignment shall not relieve TWE of its obligations to Advance/Newhouse.

(h) For purposes of this Section 9, an Appraiser shall be a nationally recognized investment banking firm selected by two other nationally recognized investment banking firms, one selected by Advance/Newhouse and one selected by TWE; provided that if one party fails to notify the other party of its selection within the time period specified below, the Appraiser shall be the investment banking firm selected by the party that has so notified the other party of its selection. Each of Advance/Newhouse and TWE shall notify the other of its selection of an investment banking firm (which notice shall identify such firm) within ten business days following the delivery by Advance/Newhouse of the Election Notice if the Appraiser is being selected for purposes of paragraph
(d), or within five business days following the delivery by TWE of the Consideration Notice if the Appraiser is being selected for purposes of paragraph (f), and each of TWE and Advance/Newhouse shall instruct the investment banking firms so selected to select the third investment banking firm within twenty business days following delivery of the Election Notice or the Consideration Notice, as applicable. The fees, costs and expenses of the investment banking firm so selected shall be borne equally by the parties and each party shall bear the fees, costs and expenses of the investment banking firm selected by such party.

(i) Notwithstanding anything to the contrary contained in this Agreement, upon exercise of the put option in accordance with this Section 9, Advance/Newhouse's representatives on the Executive Committee and on the TWE FSN Management Committee shall resign effective immediately, and Advance/Newhouse shall cease to have any rights with respect to the management of the Partnership or with

respect to its Partnership Units, other than the right to receive the Advance/Newhouse Preferred Put Price and the Advance/Newhouse Common Put Price in accordance with paragraph (g).

(j) Notwithstanding the foregoing, the put option set forth in this Section 9 shall expire upon the occurrence of a public offering of the partnership units of Advance/Newhouse (or stock of any corporate successor to Advance/Newhouse) in an amount of no less than 33% of the common equity and the listing of such partnership units (or stock) on a national securities exchange or the NASDAQ National Market System (it being understood that upon a public offering of such partnership units (or stock), Advance/Newhouse (or such corporate successor) shall use its reasonable best efforts to cause such partnership units (or stock) to be so listed or quoted.

SECTION 10 OTHER BUSINESS ACTIVITIES

10.1 Cable Television Systems.

(a) Subject to paragraphs (f) and (g), in the event Advance/Newhouse or TWE or their respective Affiliates desire to pursue any opportunity to acquire or make an investment in any business, (i) the majority of the revenues of which are derived from the operation of cable television systems or (ii) consisting of cable television systems serving more than 25,000 Subscribers (a "System Opportunity"), then such Partner (the "Notifying Partner") shall notify the other Partner and the Partnership in writing of such System Opportunity and describe such System Opportunity in reasonable detail (an "Opportunity Notice").

(b) Subject to paragraphs (f) and (g), in the event the System Opportunity is within the DMA of the Partnership Systems and not in the DMA of the Other TWE Systems (including, for this purpose only, any cable television systems owned by TWX, Paragon and USW), then the Partnership shall have the first right, exercisable by delivery of written notice to the Notifying Partner within ten business days following delivery of the Opportunity Notice, to pursue such System Opportunity. If either (x) the Partnership does not elect to pursue such System Opportunity within such period on account of Advance/Newhouse's Executive Committee representatives not approving such acquisition, or (y) if the Partnership elects to pursue such System Opportunity but fails to consummate the acquisition of, or investment in, such System Opportunity within one year of such election, then TWE or its Affiliates shall have the right to pursue such System Opportunity. If either (x) the Partnership does not elect to pursue such System Opportunity within such period on account of TWE's Executive Committee representatives not approving such acquisition, or (y) the Partnership elects to pursue such System Opportunity but fails to consummate the acquisition of, or investment in, such System Opportunity within one year of such election, then Advance/Newhouse shall have the right to pursue such System Opportunity. In the event the System Opportunity (i) is within a Preferred Cluster Area, or (ii) is within the DMA of the Partnership Systems and is owned by a multiple system cable operator acquired by TWE or Advance/Newhouse (or an Affiliate of either), then the Partnership must acquire

or invest in such System Opportunity unless such acquisition cannot be effected on financially reasonable terms.

(c) In the event the System Opportunity is within the DMA of the Other TWE Systems (including for this purpose any cable television systems owned by TWX, Paragon Communications or USW), then TWE or a TWE Affiliate shall have the first right, exercisable by delivery of written notice to the Notifying Partner within 10 business days following delivery of the Opportunity Notice, to pursue such System Opportunity. If TWE or such Affiliate does not elect to pursue such System Opportunity within such period, or if TWE or such Affiliate elects to pursue such System Opportunity but fails to consummate the acquisition of, or investment in, such System Opportunity within one year of such election, then the Partnership shall have the right to pursue such System Opportunity. If the Partnership does not elect to pursue such System Opportunity on account of TWE's Executive Committee representatives not approving such acquisition, then Advance/Newhouse shall have the right to pursue such System Opportunity not pursued by TWE or the Partnership, as the case may be.

(d) Subject to paragraphs (f) and (g), in the event the System Opportunity is in a geographic area other than those described in paragraphs (b) and (c) above, then each of TWE or a TWE Affiliate and the Partnership shall have the right, exercisable by delivery of written notice to the Notifying Partner within ten business days following delivery of the Opportunity Notice, to pursue such System Opportunity pro rata based on the number of Subscribers to the Other TWE Systems and the Partnership Systems, respectively. If either TWE or such Affiliate or the Partnership (on account of TWE's representatives on the Executive Committee not approving such acquisition) does not elect to pursue such System Opportunity within such period, and Advance/Newhouse elects to so pursue such opportunity, or if TWE or such Affiliate or the Partnership elects to pursue such System Opportunity but fails to consummate the acquisition of, or investment in, such System Opportunity within one year of such election, then Advance/Newhouse shall have the right to pursue the System Opportunity not pursued by TWE or the Partnership, as the case may be.

(e) Subject to paragraphs (f) and (g), in the event a System Opportunity includes cable television systems in more than one of the geographic areas described in paragraphs (b), (c) and (d) above, then such cable television systems shall be grouped in the appropriate category, and such groups of cable television systems shall be treated in the manner described in paragraph (b),
(c) or (d), as applicable.

(f) Notwithstanding the foregoing, TWE and its Affiliates shall be permitted to pursue and acquire or invest in any System Opportunity without the consent of the Partnership; provided that if, in accordance with this Section 10.1, (i) the Partnership shall be required to pursue such System Opportunity (or a portion thereof) and/or (ii) the Partnership shall have the right to pursue such System Opportunity (or a portion thereof) and shall elect so to pursue such System Opportunity (or such portion thereof), then TWE or its Affiliates shall use reasonable best efforts to transfer or assign as promptly as practicable, and shall assign after receipt of any necessary regulatory

consents, the economic benefits of the System Opportunity (or such portion thereof) to the Partnership (in a manner and at a time intended to preserve any deferral of tax on such acquisition and otherwise minimize the taxes payable in connection with such transaction) at a price, payable in tax efficient consideration equal to the fair market value of the System Opportunity (or such portion thereof) transferred or assigned to the Partnership; provided that if the Partnership shall have the right to pursue such System Opportunity (or portion thereof), but shall elect not to pursue such System Opportunity (or portion thereof) on account of TWE's Executive Committee representatives not approving the pursuit of such opportunity, and Advance/Newhouse shall elect to pursue such System Opportunity (or portion thereof), then TWE or its Affiliates shall use reasonable best efforts to transfer or assign to Advance/Newhouse its pro rata share of such System Opportunity (or portion thereof) on the terms described above.

(g) Notwithstanding the foregoing, Advance/Newhouse and its Affiliates shall be permitted to pursue and acquire or invest in any System Opportunity without the consent of the Partnership; provided that if, in accordance with Section 10.1, (i) the Partnership shall be required to pursue such System Opportunity (or a portion thereof) and/or (ii) the Partnership and/or TWE shall have the right to pursue such System Opportunity (or a portion thereof) and shall elect to pursue such System Opportunity (or such portion thereof), then Advance/Newhouse or its Affiliates shall use reasonable best efforts to transfer or assign as promptly as practicable, and shall assign to the Partnership and/or TWE after receipt of any necessary regulatory consents, the economic benefits of the System Opportunity (or such portion thereof) to the Partnership (in a manner and at time intended to preserve any deferral of tax on such acquisition and otherwise minimize the taxes payable in connection with such transaction) at a price, payable in tax efficient consideration equal to the fair market value of the System Opportunity (or such portion thereof) transferred or assigned to the Partnership and/or TWE; provided that if the Partnership shall have the right to pursue such System Opportunity (or portion thereof), but shall elect not to pursue such System Opportunity (or portion thereof) on account of Advance/Newhouse's Executive Committee representatives not approving the pursuit of such opportunity, and TWE shall elect to pursue such System Opportunity (or portion thereof), then Advance/Newhouse or its Affiliates shall use reasonable best efforts to transfer or assign to TWE its pro rata share of such System Opportunity (or portion thereof) (in addition to any portion thereof otherwise assigned to TWE pursuant to this Section 10.1(g)) on the terms described above.

10.2 Programming Opportunities.

(a) In the event the TWE Cable Division or its Controlled Affiliates desire to pursue any opportunity to acquire or make an equity investment in any programming business that is distributed or distributable through the facilities of cable television systems, by direct-to-home satellite or video dial-tone, microwave, or other telephony distribution mechanism (a "Programming Opportunity"), then TWE and the Partnership shall participate in such Programming Opportunity pro rata based on the number of Subscribers of the Other TWE Systems and the Partnership Systems,

respectively, and, with respect to regional programming, based on the number of Subscribers to the Partnership Systems and Other TWE Systems, respectively, in the region targeted by such programming. Notwithstanding the foregoing, TWE and its Affiliates shall be permitted to pursue and acquire or invest in any Programming Opportunity without the consent of the Partnership provided that TWE and its Affiliates shall use reasonable best efforts to transfer or assign as promptly as practicable, and shall assign after receipt of any necessary regulatory consents, the economic benefit to the Partnership of its pro rata share of such Programming Opportunity (in a manner and at a time intended to preserve any deferral of tax on such acquisition and otherwise minimize the taxes payable in connection with such transaction) at a price, payable in tax efficient consideration, equal to the Partnership's pro rata portion of the fair market value of such Programming Opportunity.

(b) In the event Advance/Newhouse or TWE or their respective Affiliates develop a Programming Opportunity that is offered to and invested in by other multiple system cable operators ("Other Programming Investors"), then, except for the interest therein held by Advance/Newhouse or TWE on account of such development activities, subject to the approval of both Partners, the Partnership shall be entitled to participate in such Programming Opportunity, at least pro rata with the Other Programming Investors, based on the relative carriage commitments, with respect to such programming, of the Partnership Systems and the cable television systems operated by the Other Programming Investors, respectively (or if such investment opportunity is not offered in exchange for carriage commitments, then on some other equitable basis).

10.3 Other Services.

(a) In the event Advance/Newhouse or any of its Affiliates engaging in activities that are similar to activities engaged in by the TWE Cable Division or that are in the Long Term Strategic Plan (any "Advance Newhouse Cable Affiliate") or the TWE Cable Division or its Controlled Affiliates desire to pursue any opportunity to acquire or make an investment in any business relating to video, programming, data, telephony or other services that are to be offered substantially through cable television systems (an "Ancillary Business Opportunity") in the franchise area of the Partnership Systems, then the Partnership shall have the first right to pursue such Ancillary Business Opportunity. In the event the Partnership rejects any such Ancillary Business Opportunity (on account of TWE's representatives on the Executive Committee not approving such participation), then Advance/Newhouse shall have the next right, at its option, to pursue such Ancillary Business Opportunity. In the event the Partnership rejects any such Ancillary Business Opportunity (on account of Advance/Newhouse's representatives on the Executive Committee not approving such participation), then TWE shall have the right, at its option, to pursue such Ancillary Business Opportunity. In the event Advance/Newhouse or any Advance/Newhouse Cable Affiliate or the TWE Cable Division or its Controlled Affiliates desire to pursue any Ancillary Business Opportunity in the franchise area of the Other TWE Systems, then TWE shall have the first right to pursue such Ancillary Business Opportunity.

(b) In the event Advance/Newhouse or any Advance/Newhouse Cable Affiliate or the TWE Cable Division or its Controlled Affiliates desire to pursue any Ancillary Business Opportunity in a franchise area not covered by
Section 10.3(a), then each of TWE and the Partnership shall have the right to participate in such Ancillary Business Opportunity pro rata based on the number of Subscribers to the Other TWE Systems and the Partnership Systems, respectively. If the TWE Cable Division or any of its Controlled Affiliates elects to participate in an Ancillary Business Opportunity that the Partnership rejects (on account of TWE's representatives on the Executive Committee not approving such participation), then Advance/Newhouse shall have the right, at its option, to participate in the Ancillary Business Opportunity pro rata as set forth above.

(c) In the event the Partnership is foreclosed from participating in any Ancillary Business Opportunity by virtue of any of the restrictions contained in the Modification of Final Judgment or any regulatory restrictions imposed by the FCC, or other restrictions arising out of USW's ownership interest in TWE, including its participation in the TWE Full Service Network Management Committee, then one of the Service Partnerships (as defined in the Contribution Agreement) shall have the right to participate in such Ancillary Business Opportunity to the same extent as the Partnership would have had but for the restrictions contained in the Modification of Final Judgment.

(d) Notwithstanding paragraphs (a) and (b) above, TWE and its Affiliates shall be permitted to pursue and acquire or invest in any Ancillary Business Opportunity without the consent of the Partnership; provided that if, in accordance with this Section 10.3, the Partnership shall have the right to pursue such Ancillary Business Opportunity (or a portion thereof) and shall elect so to pursue such Ancillary Business Opportunity (or such portion thereof), then TWE and its Affiliates shall use reasonable best efforts to transfer or assign as promptly as practicable, and shall assign after receipt of any necessary regulatory consents, the economic benefits of the Ancillary Business Opportunity (or such portion thereof) to the Partnership (in a manner and at a time intended to preserve any deferral of tax on such acquisition and otherwise minimize the taxes payable in connection with such transaction) at a price, payable in tax efficient consideration equal to the fair market value of the Ancillary Business Opportunity (or such portion thereof) transferred or assigned to the Partnership; provided that if the Partnership shall have the right to pursue such Ancillary Business Opportunity (or portion thereof), but shall elect not to pursue such Ancillary Business Opportunity (or portion thereof) on account of TWE's Executive Committee representatives not approving the pursuit of such opportunity, and Advance/Newhouse shall elect to pursue such Ancillary Business Opportunity (or portion thereof), then TWE or its Affiliates shall use reasonable best efforts to transfer or assign to Advance/Newhouse its appropriate share of such Ancillary Business Opportunity (or portion thereof) to Advance/Newhouse on the terms described above.

10.4 Programming Carriage Commitment. During the term of the Partnership, TWE shall cause the distribution of programming services developed and primarily owned by Advance/Newhouse or its Affiliates to a number of Subscribers equal to at least one-third of the total Subscribers to the Partnership Systems. In addition, the

Partnership will provide equal distribution over the Partnership Systems to any programming services developed and primarily owned by TWE and to any similarly situated (in content, targeted viewers, notoriety, etc.) programming services developed and primarily owned by Advance/Newhouse. For the purposes of the foregoing, to the extent technologically feasible, TWE will afford similar treatment to data, video, on-line and other similar services.

10.5 Advance/Newhouse Right of First Offer. If at any time during the term of the Partnership, the Partnership seeks to sell any cable television system (a "Subject System") for consideration consisting exclusively of cash and/or debt issued by the purchaser of the Subject System, the Partnership shall give Advance/Newhouse written notice thereof (a "Sale Notice"), which notice shall specify the price and other material terms (collectively, the "Sale Terms") on which it would be willing to sell such cable television systems. For a period of 60 days (or 90 days with respect to sales of cable television systems for which consent is not required pursuant to Section 3.2(h)) following delivery of the Sale Notice, Advance/Newhouse shall have the right to elect to purchase the Subject System from the Partnership on the Sale Terms. If Advance/Newhouse fails to elect to purchase the Subject System within such 60-day (or 90-day, as applicable) period, or if Advance/Newhouse elects to purchase the Subject System but fails to consummate such purchase within one year from delivery of the Sale Notice, subject to extension if reasonably necessary to obtain regulatory consents (provided that if such necessary regulatory consents shall not have been obtained by the date which is nine months following the expiration of such one-year period, the parties shall negotiate in good faith alternative arrangements intended to achieve the economic effects of the foregoing transaction), the Partnership may sell the Subject System to a third party at a price and on other material terms no more favorable to such third party than the Sale Terms.

SECTION 11 BOOKS AND RECORDS; ACCOUNTING; FISCAL YEAR

11.1 Books and Records. The Partnership's books and records, including a register showing the names and addresses of the Partners, shall be maintained at the principal office of the Partnership at the location specified in Section
2.5. The Partnership shall keep current and complete records and books of account in which shall be entered fully and accurately all transactions of the Partnership. All such books and records shall be available for inspection and copying by the Partners or their duly authorized representatives during ordinary business hours. The books of the Partnership shall be kept on an accrual basis of accounting and in accordance with generally accepted accounting principles consistently applied.

11.2 Annual Financial Statements.

(a) Within ninety (90) days after the end of each Fiscal Year of the Partnership (but in any event as soon as prepared) the Partnership shall furnish to each Partner audited financial statements, including an audited balance sheet and an audited income statement, showing the financial condition of the Partnership as of the close of such Fiscal Year and the results of its operations during such Fiscal Year, together with a

statement of cash flow and additional statements, schedules and footnotes as are customary in a complete accountant's report (all of the foregoing referred to hereinafter collectively as the "Partnership Financial Statements"). The Partnership Financial Statements shall include a report of the independent auditors of the Partnership, which shall only contain the unqualified opinion of such independent auditors.

(b) The Advance/Newhouse Accountants shall participate with the TWE Accountants in the audit of the Partnership financial records. TWE and Advance/Newhouse shall cause the TWE Accountants and the Advance/Newhouse Accountants, respectively, to cooperate fully with each other in the audit of the Partnership financial records. The Partnership shall grant both the TWE Accountants and the Advance/Newhouse Accountants complete access to the Partnership's books and records, and to the Partnership's employees, in connection therewith. Nothing contained in the foregoing shall be construed to limit the performance by the TWE Accountants of the tasks such accountants believe need to be performed by them in order to render an opinion with respect to the Partnership's financial statements. Notwithstanding the foregoing, any audited financial statements of the Partnership contained in public filings (including filings with the Securities and Exchange Commission) made by TWX and TWE shall only contain audit reports of the TWE Accountants.

(c) One-third of the total amount paid by the Partnership with respect to its regular audits for the applicable Fiscal Year for fees and expenses to its independent auditors shall be paid to the Advance/Newhouse Accountants. Any fees and expenses of the TWE Accountants with respect to such audits in excess of two-thirds of such total amount shall be paid by TWE, and any fees and expenses of the Advance/Newhouse Accountants with respect to such audits in excess of one-third of such total amount shall be paid by Advance/Newhouse.

11.3 Additional Financial Information. The Managing Partner shall deliver to each Partner the following financial information, all of which shall be prepared in accordance with GAAP (except as otherwise specifically noted) and shall set forth information regarding the operations of the Partnership (including the Beneficial Assets and Subsidiary Beneficial Assets) as a whole:

(a) Within 45 business days after the end of each quarter, beginning with the quarter in which the Initial Closing Date occurs, a balance sheet as of the end of such quarter and the related statements of income or loss, Partner's capital (deficiency), and cash flows for the interim period through the end of such quarter and for the quarter then ended, and setting forth in each case in comparative form the figures for the comparable period of the previous Fiscal Year; and

(b) Within 15 business days after such information is prepared, beginning on the Initial Closing Date, any other financial information with respect to the Partnership that is provided to senior management including, without limitation, division-by-division monthly cash flow statements.

11.4 Tax Return Information. As soon as reasonably practicable following the end of each fiscal year, but in no event later than July 31 following the end of such Fiscal Year, the Partnership shall furnish to each Partner a preliminary draft Schedule K-1 of the Partnership. As soon as practicable thereafter, the Partnership shall furnish to each Partner a final report of the Preferred Profit or Preferred Loss, and the Net Profit or Net Loss, and distributions, if any, for such Fiscal Year, a schedule setting forth each Partner's Capital Account as at the end of the period covered by such statements and a Schedule K-1 for each Partner, a copy of the Partnership's federal and state tax returns, and other information required by applicable tax regulations or necessary for each Partner to prepare its federal, state, and local tax returns.

11.5 Other Information. The Managing Partner promptly shall deliver to each Partner all internally prepared and distributed management and other reports with respect to the operations of the Partnership that are delivered to members of a board of directors or senior management. Any information or report furnished to one Partner (in its capacity as such) shall simultaneously be furnished to the other Partners. In addition, the Managing Partner promptly shall deliver to each Partner any report, appraisal or document prepared for the Partnership by any accountant, appraiser, attorney, management consultant, engineer or other third party that is delivered to members of a board of directors or senior management and any such report, appraisal or document reasonably requested by Advance/Newhouse. For purposes of the foregoing, "senior management" shall mean the following officers of the TWE Cable Division (or persons having comparable responsibilities): the Chairman and Chief Executive Officer (currently, Joseph J. Collins), the President (currently, Glenn A. Britt), the Senior Executive Vice President (currently, Thomas M. Rutledge), the Chief Financial Officer (currently, Tommy J. Harris), the Executive Vice Presidents responsible for telephony (currently, Ann Burr) and for cable television systems owned by the Partnership (currently, John Bickham, Theodore J. Cutler, Jim Fellhauer and Carl Rossetti), the Senior Vice Presidents whose responsibilities significantly relate to the operations of the Partnership (currently, David E. O'Hayre, James Chiddix, Kevin Leddy, John Newton, Lynn Yaeger, Rick Davies and Fred Dressler), the Vice President of Marketing (currently, Brian Kelley), the Senior Vice President of Information Technology (currently, Roger Workman) and the Presidents of the operating divisions, if any, of the Time Warner Cable Division (currently, none). Further, the term "reports" shall include any correspondence to or from such senior management individuals which relate to the operations of the Partnership, except it shall not include preliminary drafts or material prepared in connection with or in preparation for adversarial proceedings between TWE and Advance/Newhouse.

11.6 Bank Accounts. The Partnership shall maintain bank accounts in such banks or institutions as the Managing Partner from time to time shall select, and such accounts shall be drawn upon by check signed by such person or persons, and in such manner, as may be designated by the Managing Partner. All moneys of the Partnership shall be deposited in the bank or other financial institution account or accounts of the Partnership. Partnership funds shall not be commingled with those of any other Person without the consent of all Partners.

11.7 Other Audit Procedures. Advance/Newhouse shall have the right, at its cost and expense, to cause the Advance/Newhouse Accountants to audit any Partnership activities and to perform the audit procedures that it deems advisable in its sole and absolute discretion. TWE shall cause the TWE Accountants and the Partnership to cooperate fully with the Advance/Newhouse Accountants and shall grant the Advance/Newhouse Accountants complete access to the Partnership's books and records, and to the Partnership's employees, in connection therewith.

11.8 Tax Allocations. No later than 45 days prior to the filing of the Partnership's federal information return and Schedules K-1 thereto, the Managing Partner shall deliver a draft of such return to the Advance/Newhouse Accountants, together with such workpapers as are necessary for the Advance/Newhouse Accountants to review the proposed determinations of Special Income, Maximum Income Amount, and Net Tax Amount of each of the Partners, together with the allocations required by Sections 5.3(b)(iii) and 5.3(d)(ii). The Advance/Newhouse Accountants shall promptly review such proposed determinations and allocations and shall deliver, within 30 days after receipt of the draft return and necessary workpapers, a report ("Adjustment Report") setting forth in reasonable detail the determinations and allocations with which such Accountants disagree. Thereafter, the Managing Partner and the Advance/Newhouse Accountants shall endeavor in good faith to agree to such determinations and allocations prior to the filing of the Partnership's information returns. If any dispute cannot be resolved by the Managing Partner and the Advance/Newhouse Accountants within 10 days after the delivery of the Adjustment Report, the disputed matters shall be referred to a mutually satisfactory independent public accounting firm of national stature which has not been employed by any Partner for the two year preceding the date of such referral, such firm to be selected by the TWE Accountants and the Advance/Newhouse Accountants. In settling any disputed matter (other than a disputed matter arising in connection with a restructuring pursuant to Section 8.2 or a put of the Advance/Newhouse interest pursuant to Section 9), such independent public accounting firm shall apply the understanding of the Partners that on an annual basis the after-tax positions of the Partners with respect to the contributed assets are to be in proportion to their respective Percentage Interests (assuming all Partners are taxable at the Special Effective Tax Rate). The fees of such firm shall be paid by the Partners in accordance with their Percentage Interests.

SECTION 12 DISSOLUTION

12.1 Causes of Dissolution. To the extent permitted by the Act, the Partnership shall dissolve upon the first to occur of the following dates or events:

(a) the termination of the Contribution Agreement, prior to the Initial Closing Date, in accordance with its terms;

(b) the sale, exchange, involuntary conversion, or other disposition of all or substantially all of the assets of the Partnership (including the Beneficial Assets and the Subsidiary Beneficial Assets);

(c) the expiration of the term of the Partnership as specified in Section 2.3 or the restructuring of the Partnership pursuant to Section 8; or

(d) the bankruptcy (within the meaning of Section 1531(5), or any successor provision, of the Act) of any Partner.

12.2 Effect of Dissolution. Upon the dissolution of the Partnership, the Partnership shall cease its regular business operations, except for the taking of such actions as shall be necessary for the performance and discharge of the Partnership's obligations, the winding-up of its affairs, and the liquidation and distribution of its assets in accordance with the provisions of this Agreement.

12.3 Winding Up and Liquidation.

(a) Liquidator. Upon the dissolution of the Partnership, the Managing Partner shall act as liquidator (the "Liquidator") to wind up the Partnership; provided, however, if the Managing Partner is the subject of a bankruptcy proceeding, the other Partners shall act as Liquidator. The Liquidator shall have full power and authority, subject to Section 3.2, to sell, assign, and encumber any or all of the Partnership's assets and to wind up and liquidate the affairs of the Partnership in an orderly and businesslike manner.

(b) Application of Proceeds. The proceeds of liquidation shall be applied first to the payment of the debts and liabilities of the Partnership (including any loans to the Partnership made by any Partner), the expenses of liquidation, and the establishment of any reserves that the Liquidator deems necessary for potential or contingent liabilities of the Partnership. In the event that Section 8.2 is applicable, the remaining assets of the Partnership shall be distributed in accordance with Section 8.2. In the event that Section 8.2 is not applicable the remaining assets of the Partnership shall be distributed to the Partners as provided in Section 5.1(d).

(c) Final Accounting. Upon the dissolution and winding up of the Partnership, a proper accounting shall be made from the date of the last previous accounting to the date of winding up.

(d) Statement of Liquidation. Within a reasonable time following the completion of the liquidation of the Partnership, the Liquidator shall submit a statement (which need not be audited) to each Partner setting forth the assets and liabilities of the Partnership as of the date of liquidation and the amount of the distribution to each Partner pursuant to
Section 5.1(c).

(e) Effect of Withdrawal of a Partner. To the extent permitted by the Act, the withdrawal of a Partner shall not alter the allocations and distributions to be made to the Partners pursuant to this Agreement.

(f) Termination of Partnership. Upon the completion of the distribution of the Partnership's assets and the proceeds of liquidation as provided in this Section 12.3, the Partnership shall be terminated.

SECTION 13 INDEMNIFICATION

13.1 Indemnification by Partnership. The Partnership shall indemnify and save harmless each Partner, the officers, directors, and stockholders of each Partner and its Affiliates, and the officers and employees of the Partnership, from any loss, damage, or expense incurred by any of them by reason of any act or omission to act on behalf of the Partnership (including any action or omission by the Partner acting as Tax Matters Partner), performed by any of them in good faith and without gross negligence, willful misconduct, or breach of this Agreement. Any reasonable expenses incurred by any indemnified person pursuant to this Section 13.1 in defending any civil or criminal action, suit or proceeding (or the threat thereof), other than a claim, action, suit, or proceeding brought by the Partnership, which is based, in whole or in part, upon any alleged act or omission to act on behalf of the Partnership shall be borne and paid by the Partnership in advance of the final disposition of such action, suit, or proceeding (or the threat thereof) upon receipt of a reasonably satisfactory undertaking by or on behalf of the indemnified person to repay to the Partnership the amount of such expenses if it shall ultimately be determined that such person is not entitled to the indemnification provided for under this
Section 13.1. Any indemnity under this Section 13.1 shall be provided out of and to the extent of the Partnership's assets only.

13.2 Indemnification by Partners. Each Partner shall indemnify and save harmless the Partnership and each other Partner and former Partner, the officers, directors, and stockholders of each other Partner and former Partner, and any of their respective officers, directors, shareholders, partners, employees, agents, and Affiliates, from any loss, damage, or expense incurred by any of them by reason of or resulting from any unauthorized act taken by such Partner in the name of the Partnership or the other Partner. Any reasonable expenses incurred by any Person entitled to indemnification pursuant to this
Section 13.2 in defending any civil or criminal action, suit, or proceeding (or the threat thereof) by reason of or resulting from any such indemnified matter shall be borne and paid by the indemnifying Partner in advance of the final disposition of such action, suit or proceeding (or the threat thereof) upon receipt of a reasonably satisfactory undertaking by or on behalf of the indemnified Person to repay to the indemnifying Partner the amount of such expenses if it shall ultimately be determined that such Person is not entitled to the indemnification provided for under this Section 13.2.

13.3 Procedures. With respect to the indemnities provided above in this
Section 13, an indemnified party shall, with respect to any claim made against such indemnified party for which indemnification is available, notify the indemnifying party in writing of the nature of the claim as soon as practicable but not more than ten days after the indemnified party shall have received notice of the assertion thereof before any court or governmental authority. The failure by an indemnified party to give notice as provided in the foregoing sentence shall not relieve the indemnifying party of its obligations under this
Section except to the extent that the failure results in the failure of

actual notice to the indemnifying party and the indemnifying party is damaged as a result of the failure to give notice. Upon receipt of notice by an indemnifying party from an indemnified party of the assertion of any such claim, the indemnifying party shall employ counsel reasonably acceptable to the indemnified party and shall assume the defense of such claim. The indemnified party shall have the right to employ separate counsel and to participate in (but not control) any such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (a) the employment of counsel by the indemnified party has been authorized by the indemnifying party, (b) the indemnified party shall have been advised by its counsel in writing that there is a conflict of interest between the indemnifying party and the indemnified party in the conduct of the defense of such action (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the indemnified party), or (c) the indemnifying party shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of such counsel shall be at the expense of the indemnifying party. An indemnifying party shall not be liable for any settlement of an action effected without its written consent (which consent shall not be unreasonably withheld). No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such action. Whether or not the Partnership chooses to defend or prosecute a claim, each Partner shall, to the extent requested by the Partnership and at the Partnership's expense, cooperate in the prosecution or defense of such claim and shall furnish such records, information, and testimony and attend such conferences, discovery proceedings, hearings, trials, and appeals as may reasonably be requested in connection therewith.

13.4 Survival. The provisions of this Section 13 shall survive the withdrawal of any Partner from the Partnership and the dissolution of the Partnership.

SECTION 14 REPRESENTATIONS

Each Partner represents and warrants to the other Partners as follows:

14.1 Organization, Standing, and Authority. Such Partner is a partnership duly organized, validly existing, and in good standing under the laws of its state of organization. Such Partner has all requisite power and authority to execute and deliver this Agreement and the documents contemplated hereby, and to perform and comply with all of the terms, covenants, and conditions to be performed and complied with by it hereunder and thereunder.

14.2 Absence of Conflicting Agreements. Except as disclosed in the Contribution Agreement, the execution, delivery, and performance of this Agreement and the documents contemplated hereby by such Partner (with or without the giving of notice, the lapse of time, or both): (a) do not require the consent of any third party; (b) do not and will not conflict with any provision of the partnership agreement or other organizational document of such Partner;
(c) do not and will not conflict with, result in a breach of, or constitute a default under, any law, judgment, order, ordinance, injunction, decree, rule,

regulation, or ruling of any court or governmental instrumentality; and (d) do not and will not conflict with, constitute grounds for termination of, result in a breach of, constitute a default under, or accelerate or permit the acceleration of any performance required by the terms of, any agreement, instrument, license, or permit to which either such Partner or any of its Affiliates is a party or by which either such Partner or any of its Affiliates may be bound.

14.3 Claims and Legal Actions. There is no claim, legal action, counterclaim, suit, arbitration, governmental investigation or other legal, administrative, or tax proceeding, in progress or pending, or to the knowledge of such Partner, threatened, against or relating to such Partner or any of its Affiliates, and no order, decree, or judgment has been issued against such Partner or any of its Affiliates, that may impair such Partner's ability to perform and comply with all of the terms, covenants, and conditions to be performed and complied with by it under this Agreement and the documents contemplated hereby.

SECTION 15 MISCELLANEOUS

15.1 Acknowledgments. Each Partner affirms and acknowledges that no representations, warranties, or statements have been made to it by any party to this Agreement other than those expressly set forth in this Agreement and the Contribution Agreement and that, in entering into this Agreement, it has not relied upon anything done or said with respect to this Agreement or with respect to the relationship between the parties, other than as expressly set forth in this Agreement and the Contribution Agreement.

15.2 Bill for Partition. Each of the Partners covenants that neither it nor any Person claiming through or under it will file a bill for partition of the Partnership property.

15.3 Notices. All notices and other communications hereunder shall be
(a) in writing (except to the extent otherwise expressly provided hereunder);
(b) delivered by telecopy, by commercial overnight or same-day delivery service with all delivery costs paid by sender, or by registered or certified mail with postage prepaid, return receipt requested; (c) deemed given on the date and at the time shown on the telecopy confirmation of receipt (if delivered by telecopy), on the date and at the time (if recorded) of delivery by the commercial delivery service, as shown in the records thereof (if delivered by commercial overnight or same-day delivery service), or on the date shown on the return receipt (if delivered by registered or certified mail); and (d) addressed to the parties at their addresses specified on the signature page to this Agreement (or at such other address for a party as shall be specified by like notice).

15.4 Amendments. This Agreement may not be amended nor shall any waiver, change, modification, consent, or discharge be effected, except by an instrument in writing signed by each Partner; provided that Advance/Newhouse hereby agrees to any amendments or modifications to this Agreement necessitated by (i) the distribution by TWE of its Partnership Interest to the partners of TWE (upon a liquidation of TWE

otherwise permitted by Section 6.1) or (ii) the incorporation of TWE pursuant to Article XIII of the TWE Partnership Agreement or otherwise, provided such amendments or modifications do not adversely affect Advance/Newhouse.

15.5 Waivers and Further Assurances; Entire Agreement. Any waiver of any terms or conditions of this Agreement shall be in writing and shall not operate as a waiver of any other breach of such terms or conditions or any other term or condition, nor shall any failure to enforce any provision of this Agreement operate as a waiver of such provision or of any other provision of this Agreement. Each of the Partners agrees to execute all such further instruments and documents and to take all such further action as the other Partners may reasonably require in order to effectuate the terms and purposes of this Agreement. The Partners agree that this Agreement, including the Exhibits to this Agreement, and the other agreements expressly contemplated hereby constitutes the entire agreement between them with respect to the subject matter of the Partnership (other than the Contribution Agreement and the exhibits and schedules thereto) and supersedes all prior agreements and understandings between them as to such subject matter, and there are no restrictions, agreements, arrangements, or undertakings, oral or written, between the Partners relating to the Partnership which are not fully expressed or referred to herein.

15.6 Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the parties to this Agreement shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the greatest extent possible.

15.7 Specific Enforcement; Attorneys Fees. The Partners agree that the remedy at law for damages upon violation of the terms of this Agreement would be inadequate because the Partnership Interests and the business of the Partnership are unique. Therefore, the Partners agree that the provisions of this Agreement may be specifically enforced by any court of competent jurisdiction, and each Partner and its respective transferees agree to submit to the jurisdiction of the court where any such action for specific performance is brought. If any Partner defaults in its performance of any of the terms and conditions of this Agreement and if, as a result of such default, a lawsuit seeking damages, specific performance, or any other remedy is filed by the other Partner, then, in that event, the prevailing party in such a lawsuit shall be entitled to obtain attorney's fees from the losing party in such amount as shall be determined by the court to be reasonable under the circumstances.

15.8 Counterparts. This Agreement may be executed in counterparts each of which shall be deemed an original and all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement, it shall not be necessary to produce more than one complete set of such counterparts.

15.9 Captions; Gender. Section headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. Whenever used herein the singular number shall include the plural, the plural shall include the singular, and the use of any gender shall include all genders.

15.10 Governing Law; Venue; Disputes. This Agreement shall be governed by the internal laws of the State of New York. Any action, suit or proceeding shall be prosecuted as to any party hereto in the County of New York, State of New York.

15.11 Binding Effect. This Agreement shall bind and inure to the benefit of each of the Partners and their successors and permitted assigns.

15.12 Third Parties. None of the provisions of this Agreement shall be for the benefit of, or enforceable by, any creditor of the Partnership or any Person other than a Partner.

15.13 Confidentiality. Each Partner agrees that it shall not, directly or indirectly, without the prior written consent of any other Partner, use for its own benefit (except as a Partner of the Partnership) or disclose to any Person any information, trade secrets, confidential customer information, patents, patent rights, technical data, or know-how relating to the products, processes, methods, equipment, or business practices of the Partnership, except
(a) to the extent any of the foregoing is or becomes available to the public other than as a result of disclosure by such Partner or any of its Affiliates or the directors, officers, employees, agents, advisors, and controlling persons of it or any of its Affiliates, (b) subject to the terms of an appropriate confidentiality agreement, as necessary to effect a transaction under Section 6,
(c) as may be required by law (including without limitation the federal and state securities laws and the rules and regulations of applicable stock exchanges or comparable market systems), and (d) as any Partner may disclose to its lenders, rating agencies, and business and financial advisors. If any Partner is required by applicable law or regulation or by legal process to disclose any of the foregoing, it will provide any other Partner with prompt notice thereof, to the extent practicable under the circumstances, to enable it to seek an appropriate protective order.

15.14 Liability of Partners. No Partner shall have any liability for the debts or obligations of the Partnership owed to any other Partner or its Affiliates arising under this Agreement or the Contribution Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

ADVANCE/NEWHOUSE PARTNERSHIP
5015 Campuswood Drive
East Syracuse, New York 13057

By: Advance Cable Holdings Corp.
General Partner

By: /s/ Robert J. Miron
    _________________________________________
    Name:  Robert J. Miron
    Title: President

By: Newhouse Broadcasting Corporation, General Partner

By: /s/ Robert J. Miron
    _________________________________________
    Name: Robert J. Miron
    Title: Vice President

TIME WARNER ENTERTAINMENT COMPANY, L.P.
75 Rockefeller Plaza
New York, New York 10019

By: /s/ Spencer B. Hays
    _________________________________________
    Name: Spencer B. Hays
    Title: Vice President

PARAGON COMMUNICATIONS
75 Rockefeller Plaza
New York, New York 10019

By: KBL COMMUNICATIONS, INC., as
General Manager

By: /s/ Spencer B. Hays
    _________________________________________
    Name: Spencer B. Hays
    Title: Executive Vice President

EXHIBIT A
(to Transaction Agreement No. 4)

AMENDED AND RESTATED PARTNERSHIP AGREEMENT

OF

TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP

Dated as of February 1, 2001

[SEE TAB 9]

NY

1.       Albany -Schenectady -Troy (52) (excluding VT)

2.       Binghamton (154)

3.       Buffalo (Jamestown) (40)

4.       Burlington, VT -Plattsburgh, NY (Hartford, VT) (91) [3 NY counties only]

5.       Elmira (170)

6.       Rochester (75)

7.       Syracuse (72)

8.       Utica (169)

9.       Watertown -Carthage (174)

NC, SC

1.       Charlotte (Hickory) (28)

2.       Greensboro - Winston-Salem - High Point (Burlington) (46)

3.       Greenville -New Bern -Washington (Morehead City) (106)

4.       Raleigh -Durham (Fayetteville, Goldsboro & Rocky Mount) (29)

5.       Wilmington (152)

6.       Columbia S.C. (88)

7.       Florence - Myrtle Beach S.C. (111)(1)


FL

1.       Orlando -Daytona Beach -Melbourne (22)

2.       Tampa -St. Petersburg (Lakeland) (15)

FIRST AMENDMENT
TO THE
AMENDED AND RESTATED PARTNERSHIP AGREEMENT
OF
TIME WARNER ENTERTAINMENT-ADVANCE NEWHOUSE PARTNERSHIP

FIRST AMENDMENT TO THE AMENDED AND RESTATED PARTNERSHIP AGREEMENT OF TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP, dated as of March 2,
2001 (this "Amendment") among Time Warner Entertainment Company, L.P., a Delaware limited partnership ("TWE"), Advance/Newhouse Partnership, a New York general partnership ("Advance/Newhouse), and Paragon Communications, a Colorado general partnership ("Paragon").

WHEREAS, Time Warner Entertainment-Advance/Newhouse Partnership, a New York general partnership (the "Partnership"), was formed between TWE and Advance/Newhouse pursuant to a Partnership Agreement dated as of September 9, 1994 (the "Original Agreement"), as amended by the First Amendment to the Partnership Agreement of the Partnership dated as of February 12, 1998 (the "First Amendment"), the Second Amendment to the Partnership Agreement dated as of December 31, 1998 (the "Second Amendment") and the Third Amendment to the Partnership Agreement dated as of March 1, 1999 (the "Third Amendment") (the Original Agreement, together with such amendments, the "Original Partnership Agreement").

WHEREAS, the Original Partnership Agreement was amended and restated in its entirety pursuant to the Amended and Restated Partnership Agreement dated as of February 1, 2001 (the "Partnership Agreement").

WHEREAS, pursuant to Section 15.4 of the Partnership Agreement, the Partnership Agreement may be amended by an instrument in writing signed by TWE, Advance/Newhouse and Paragon; and

WHEREAS, the parties hereto desire to enter into this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

I.

(1) The following definitions are hereby added to the Partnership Agreement:

"ATW" means AOL Time Warner, Inc.

"ATW Change of Control" means the occurrence of any one or more of the following events after the Merger Closing Date (as defined in Section 8.2):

(i) any person (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act") and as defined in Section 3(a)(9) of the Exchange Act), after the Merger Closing Date becomes the beneficial owner, as defined in Rules 13d-3 and 13d-5 promulgated under the Exchange Act, directly or indirectly, of more than 35% of the total voting power of ATW's Voting Equity, other than in connection with (x) a Reorganization Transaction or (y) any other merger, consolidation, combination, liquidation or dissolution transaction that in each case of clauses (x) or (y) does not constitute an ATW Change of Control under clause (iii), (iv) or (vi) below; provided, that for purposes hereof such person shall be deemed to have beneficial ownership of all shares that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time or upon the occurrence or satisfaction of any condition;

(ii) individuals who at the Merger Closing Date, constituted ATW's Board of Directors, together with any new directors whose election by ATWs' Board of Directors or whose nomination for election by ATW shareholders was approved by a vote of majority of ATW's directors then still in office who were either directors at the Merger Closing Date or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the ATW Board of Directors then in office;

(iii) ATW's merger or consolidation with or into another Person (or group of Persons acting in concert) or the merger of another Person (or group of Persons acting in concert) with or into ATW, if ATW's securities that are outstanding immediately prior to such transaction and which represent 100% of the aggregate voting power of ATW Voting Equity are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities are changed into or exchanged for, in addition to any other consideration, securities of the surviving or transferee Person that represent immediately after such transaction, more than fifty percent (50%) of the aggregate voting power of the Voting Equity of the surviving or transferee Person;

(iv) any other merger, consolidation, business combination or other transaction or series of related transactions ("Reorganization Transactions") involving ATW and/or its shareholders, directly or indirectly, such that immediately following consummation of such Reorganization Transactions, the shareholders of ATW prior to such Reorganization Transactions own, directly or indirectly, less than fifty and one-tenth percent (50.1%) of the Voting Equity of ATW (or other surviving or transferee Person resulting from such Reorganization Transactions);

(v) the sale, transfer, conveyance or other disposition in one or a series of related transactions, of all or substantially all of the assets of AOL and its Subsidiaries taken as a whole to any Person (or group of Persons acting in concert) other than to any Controlled Affiliates of ATW; or

(vi) the adoption of a plan relating to the liquidation or dissolution of ATW other than in connection with (x) a Reorganization Transaction or (y) other merger, consolidation or combination that in each case of clauses (x) or (y) does not constitute an ATW Change of Control pursuant to clause (iii) or (iv) above.

"Cable Change of Control" means the occurrence of any one or more of the following events after the Merger Closing Date:

(i) Any Person (or group of Persons acting in concert), other than ATW or an Affiliate of ATW, has the power to control, by voting power, contract or otherwise, the actions of TWE (if at the time it owns the TWE Cable Division) or the TWE-Cable Division; or

(ii) Any merger, consolidation, business combination, joint venture, sale, exchange, transfer or other transaction pursuant to which all or substantially all of the cable television systems owned by TWE Cable are after such transaction under the direction and control of a Person (or group of Persons acting in concert) that is not ATW or an Affiliate of ATW.

"Voting Equity" of a Person means all classes of capital stock, or other interests, of such Person then outstanding and normally entitled, without regard to the occurrence of any contingency, to vote in the election of directors, managers or trustees thereof, or, in the case of a partnership, the general partnership interests.

(2) The following defined term is amended to read as follows:

"TWX" means, for the period prior to the Merger Closing Date, Time Warner Inc. and for the period after the Merger Closing Date, ATW.

(3) The last sentence of the definition of "Capital Account" is deleted in its entirety and the following substituted therefor:

Notwithstanding the foregoing, for purposes of determining Capital Accounts, (I) (u) all of the adjustments, contributions or distributions required pursuant to the Contribution Agreement to be made subsequent to the Initial Closing Date and the contribution of TWE pursuant to Section 4.1(c)(ii) hereof shall be treated as if they had been made on the Initial Closing Date, (v) the Paragon Adjustment Amount and the TWE Adjustment Amount (as such terms are defined in
Section 10 of the First Transaction Agreement) shall be treated as if they had been made on the First Effective Date, (w) all of the adjustments, contributions or distributions required pursuant to the Second Transaction Agreement or the TCI Contribution Agreement shall be treated as if they had been made on the Second Effective Date, (x) all of the adjustments, contributions or distributions required pursuant to the Third Transaction Agreement or the TCI Contribution Agreement shall be treated as if they had been made on the Third Effective Date, (y) all of the adjustments, contributions or distributions required pursuant to the Fourth

Transaction Agreement shall be treated as if they had been made on the Fourth Effective Date, and (z) such adjustments, contributions, distributions, and Adjustment Amounts shall not give rise to any adjustments to Capital Account balances or redetermination of amounts contributed by or distributed to any Partner; and (II) any payment made by TWE pursuant to Section 3.4 hereof shall not be treated as a Capital Contribution or otherwise give rise to any adjustments to Capital Account balances (other than to the extent such payment is included in Net Profit or Net Loss or redetermination of amounts contributed by TWE).

(4) The definition of "Common Tax Amount" is amended by adding the following at the end thereof:

For purposes of determining the Common Tax Amount, Net Profit, Gross Profit, Net Loss and Gross Loss, shall be calculated without taking into account the items described in clause (i), clause (ii), clause
(iii), clause (vi), clause (vii), and clause (ix) of the definition of "Net Profit" and "Net Loss."

(5) The definition of "Special Tax Amount" is amended by adding the following at the end thereof:

For purposes of determining the Special Tax Amount, Net Profit, Gross Profit, Net Loss and Gross Loss, shall be calculated without taking into account the items described in clause (i), clause (ii), clause
(iii), clause (vi), clause (vii), and clause (ix) of the definition of "Net Profit" and "Net Loss."

(6) The definitions of "Excess Debt Shift Tax Amount," "Restructuring Deferred Tax Amount," and "Special Income" are hereby deleted in their entirety and amended and restated in the form attached hereto as Exhibit A.

II.

(1) The fifth sentence of Section 3.1(c) of the Partnership Agreement is hereby amended to provide for monthly, rather than quarterly, Executive Committee meetings. Section 3.1(c) is also hereby amended by adding the following after the fifth sentence of Section 3.1(c):

The Managing Partner agrees to provide to Advance/Newhouse the agenda for such meetings at least one week in advance of such meeting in order to provide time for Advance/Newhouse to submit additions and/or comments to such agenda. Such Executive Committee meetings will include, without limitation, a review of any planned committees or working groups that will address issues affecting the Partnership, whether such committees or working groups are to be at the TWE Cable Division level or at the ATW level if one or more persons on the list attached hereto as Schedule 1 (or their successors or persons holding the same or similar positions exercising comparable

responsibilities) are to participate on such committees or working groups; provided, however, that with respect to committees or working groups at the ATW level, if ATW determines, in the exercise of its reasonable judgment, that it would be inappropriate for Advance/Newhouse to have representation on any such committee or working groups based on the composition of such committee or group, then TWE shall notify Advance/Newhouse of such judgment and the reasons therefor. Such Executive Committee meetings shall also include, without limitation, a review by the Managing Partner of the substance of any significant communications between ATW senior management and senior management of the TWE Cable Division regarding matters relating to the Partnership. Advance/Newhouse shall be notified and consulted in advance regarding changes in "senior management," of TWE Cable as hereinafter defined, but Advance/Newhouse shall have no right to veto or otherwise delay such changes. For purposes hereof, "Senior Management" of TWE Cable means the Chairman and CEO, the President and COO, the Executive Vice President/Operations, the Senior Vice President/Engineering and the Executive Vice Presidents responsible for the cable television systems owned by the Partnership and persons who may hereafter hold the same or similar positions exercising comparable responsibilities.

(2) Section 3.1(h) of the Partnership Agreement is hereby amended by adding the following subsection (vi):

(vi) Notwithstanding any provision in this Agreement to the contrary, the aggregate payments to be made by the Partnership to TWE for management fees and reimbursement for exercise of options with respect to any Fiscal Year pursuant to Section 3.1(h)(i) and Section 3.1(h)(iii) shall not exceed three percent (3%) of the Partnership's revenues for such Fiscal Year. The limitations set forth in this
Section 3.1(h)(vi) shall be applied separately with respect to each Fiscal Year.

(3) The Partnership Agreement is hereby amended by deleting Section 3.2(l) requiring approval of affiliated transactions or contracts on other than an arm's length basis.

(4) Section 3.3(a) of the Partnership Agreement is hereby deleted in its entirety and the following substituted therefor:

3.3 Business Plans.

(a) Long Term Strategic Plan.

(i) On or about March 6, 1995, TWE presented to Advance/Newhouse a statement of the Partnership's strategic objectives for the first five years of the Partnership's operations (the "Long Term Strategic Plan"), which plan included the Partnership's strategic objectives with respect to acquisitions and investments, asset dispositions, capital expenditures and the entry into or withdrawal from any material line of business as well as overall timing and numerical parameters with respect thereto. The Long Term Strategic Plan was prepared in a manner materially consistent with the long term strategic plan of TWE's Cable Division. On March 9, 1995 Advance/Newhouse approved the Long Term Strategic Plan.

(ii) On August 18, 1998, TWE presented a successor Long Term Strategic Plan as required by Section 11(a) of the First Transaction Agreement. On October 21, 1998, Advance/Newhouse approved such successor Long Term Strategic Plan.

(iii) Prior to September 30, 2001, and within three years following the adoption and approval of each successor long term strategic plan in accordance with this paragraph (iii), the Managing Partner shall present to Advance/Newhouse a new long term strategic plan for the five year period beginning no later than the first day of the calendar year following the date which is three years following the adoption of the previous Long Term Strategic Plan. Such long term strategic plan shall be prepared in a manner materially consistent with the long term strategic plan of TWE's Cable Division and shall be subject to the approval of Advance/Newhouse. Any long term strategic plan approved by Advance/Newhouse and adopted by the Partnership shall upon the effective date stated in such plan be the Long Term Strategic Plan for all purposes of this Agreement. Until a successor Long Term Strategic Plan is approved by Advance/Newhouse, the Long Term Strategic Plan then in effect shall continue in effect; provided that upon the expiration of the five year period covered by such Long Term Strategic Plan, such Long Term Strategic Plan shall remain in effect as if it applied to such fiscal year, but shall be appropriately adjusted to provide for any capital expenditures required to be incurred by the Partnership by the terms of any franchise agreement or other requirement of law or to enable the Partnership to continue or complete any project or activity in progress that was contemplated by a previously approved Long Term Strategic Plan or was approved by the Executive Committee with the consent of Advance/Newhouse's representatives.

(5) The Partnership Agreement is hereby amended by adding a new Section 3.4, to read as follows:

Section 3.4 Affiliate Transactions.

(a) With respect to any contract (or series of related contracts) or transaction (or series of related transactions) entered into by the Managing Partner or any Affiliate of the Managing Partner with the Partnership or any of its Subsidiaries after the Merger Closing Date, other than immaterial transactions (defined for purposes hereof as contracts or transactions that individually involve less than $750,000 and do not involve significant non-monetary obligations) (hereinafter, individually or collectively, "Affiliate Transactions"), the Managing Partner agrees to notify Advance/Newhouse in writing of entry into such Affiliate Transactions and the terms of such Affiliate Transactions not later than 10 business days after entering into such contract(s) or transaction(s). The Managing Partner agrees to provide Advance/Newhouse, within 10 days of request from Advance/Newhouse, with all financial information relating to the Affiliate Transactions and all documents evidencing or executed in connection with such Affiliate Transactions including copies of the relevant contracts, agreements or transaction documents. For purposes of clarification and not by way of limitation of the scope of the term "Affiliate Transactions," it is agreed that for purposes of all relevant provisions of this Partnership Agreement the term "Affiliate Transactions" shall include: (i) reimbursement arrangements by the Partnership with HBO and Turner in respect of Fox programming agreements entered into in December 1999;
(ii) any amendment, renewal, extension, modification or waiver of the AOL-TWC High Speed Service Agreement, dated as of January 31, 2001, by and among America Online, Inc. and Time Warner Cable (the "ISP Agreement") and any agreement replacing or substituting for the ISP Agreement; and (iii) the Implementation Plan (as defined in the ISP Agreement) and any amendments, modifications or waivers thereof or replacements or substitutions therefor.

(b) If the Managing Partner on behalf of the Partnership or any of its Subsidiaries enters into any Affiliate Transactions contemplated by Section 3.4(a) without the approval of Advance/Newhouse, at its option, Advance/Newhouse may elect to initiate negotiation and arbitration to determine (i) whether such Affiliate Transactions were on arm's-length terms and (ii) if not, the loss, damage or diminution in value, if any, suffered by the Partnership or its Subsidiaries as a result of such Affiliate Transactions failing to be on arm's-length terms. Alternatively, Advance/Newhouse may elect instead to exercise its rights in respect of such Affiliate Transactions by having such Affiliate Transactions taken into account by the Appraiser in connection with a Restructuring, as contemplated under Section 8.2, or a Put Event, as contemplated under Section 9, as the case may be. In order to elect negotiation and arbitration, Advance/Newhouse must give written notice to TWE of its election within 45 days of receiving the financial information and documents relating to the Affiliate Transactions from the Managing Partner under Section 3.4(a); provided that if at the time of receiving such information there are no comparable agreements or transactions by the Partnership or its Subsidiaries with independent third parties, or between Affiliates of the Managing Partner and independent third parties, Advance/Newhouse shall have the right to postpone its election

to initiate negotiation or arbitration until 45 days after it is notified by the Managing Partner of entry by the Managing Partner or its Affiliates into such comparable transactions or agreements with at least two separate independent third parties each of which must be one of the five largest multiple system cable operators in the United States at such time (unless the terms of such Affiliate Transaction expressly provide that the Partnership and its Subsidiaries, automatically and without further action by them, will be treated, viewing the material terms as a whole, on terms at least as favorable as those to be provided to any independent third party, in which case Advance/Newhouse shall not have the right to postpone its election). If Advance/Newhouse elects to initiate negotiation and arbitration pursuant to this Section 3.4(b), TWE and Advance/Newhouse agree to attempt in good faith to resolve through negotiation whether the subject Affiliate Transactions were arm's length and, if not, the loss, damage or diminution in value, if any, suffered by the Partnership or any of its Subsidiaries as a result of such Affiliate Transactions. If the dispute is not resolved by negotiation within 60 days of Advance/Newhouse giving notice to TWE of its election (or such additional period of time to which Advance/Newhouse and TWE agree), the matter will be resolved as set forth in Section 3.4(e) below.

(c) All Affiliate Transactions, shall, unless otherwise approved by Advance/Newhouse, treat the Partnership and its Subsidiaries on no less favorable terms than those applicable generally to the TWE Cable Division, as a whole, i.e., the Managing Partner shall not enter into any transaction or agreement that treats one cable system differently from another cable system, except for a transaction or agreement that warrants different treatment based upon legitimate business considerations that are entirely unrelated to whether the Partnership (or a Subsidiary thereof) rather than an Affiliate of the Partnership owns such cable system. If Advance/Newhouse disputes that the different treatment of the Partnership or its Subsidiaries in regard to a particular transaction or agreement was based on such legitimate business considerations entirely unrelated to whether the Partnership (or a Subsidiary thereof) rather than an Affiliate of the Partnership owns such cable system, Advance/Newhouse may initiate negotiation and arbitration to determine (i) whether the different treatment of the Partnership or its Subsidiaries in regard to the transaction or agreement was based on legitimate business considerations entirely unrelated to whether the Partnership (or a Subsidiary thereof) rather than an Affiliate of the Partnership owns such cable system and (ii) if not, the loss, damage or diminution in value suffered by the Partnership or its Subsidiaries as a result of such transaction or agreement. In order to elect negotiation and arbitration, Advance/Newhouse must give written notice to TWE of its election within 45 days of receiving the financial information and documents related to the Affiliate Transactions from the Managing Partner under Section 3.4(a). If Advance/Newhouse elects to initiate negotiation and arbitration pursuant to this Section 3.4(c), TWE and Advance/Newhouse agree to attempt in good faith to resolve through negotiation whether the different treatment of the Partnership or its Subsidiaries in regards to the transaction or agreement was based on legitimate business considerations entirely unrelated to whether the Partnership (or a Subsidiary thereof) rather than an Affiliate of the Partnership owns such cable system and, if it was not, the loss, damage or diminution in value suffered by the Partnership or any of its Subsidiaries as a result of such transaction or agreement. If the

dispute is not resolved by negotiation within 60 days of Advance/Newhouse giving notice to TWE of its election (or such additional period of time to which Advance/Newhouse and TWE agree), the matter will be resolved as set forth in Section 3.4(f) below.

(d) If it is determined, either by agreement of the parties or by arbitration, that a loss, damage or diminution in value was suffered by the Partnership or its Subsidiaries as a result of any Affiliate Transactions covered by Sections 3.4(b) or (c), TWE shall make a cash payment to the Partnership of the determined amount within 10 days of the parties' agreement or the issuance of the arbitration award, whichever is applicable; provided, however, it is expressly understood that any loss, damage or diminution in value relating to or arising from periods following such determination shall only be payable as and when incurred (in a series of recurring payments, rather than a single payment, at the times agreed by the parties or ordered by the arbitrators). It is understood and agreed that, notwithstanding anything to the contrary contained herein, so long as the Managing Partner complied in all material respects with the disclosure obligations required pursuant to Section 3.4(a) above, the sole remedy of Advance/Newhouse in respect of such Affiliate Transactions with the Partnership or any of its Subsidiaries that was not approved by Advance/Newhouse is (i) the payment of money damages as provided for in this Section 3.4 or (ii) if Advance/Newhouse does not elect to initiate negotiation and arbitration under this Section 3.4, the exercise by Advance/Newhouse of its rights pursuant to Section 8.2 or Section 9, as the case may be, to have such Affiliate Transactions taken into account by the Appraiser. Nothing herein shall limit the Managing Partner's ability to amend or terminate any Affiliate Transaction in order to mitigate or eliminate any future loss, damage or diminution in value, subject, however to the following: (x) any action to amend or terminate such Affiliate Transaction will itself be an Affiliate Transaction and subject to the provisions of this Section 3.4, including without limitation, whether and to what extent such amendment or termination mitigates or eliminates the future loss, damage or diminution in value; and (y) if the Managing Partner takes such action following an adverse arbitration determination to it and Advance/Newhouse challenges any such action in a subsequent arbitration, the Managing Partner shall promptly reimburse (A) Advance/Newhouse for its reasonable out-of-pocket costs incurred in connection with the initial arbitration of the Affiliate Transaction, including the fees and expenses of counsel, other advisors and witnesses or experts and (B) the Partnership for the expenses borne by it in connection with such initial arbitration.

(e) (i) If Advance/Newhouse elects negotiation and arbitration pursuant to Sections 3.4(b) or (c) and the dispute is not resolved through negotiation, the parties agree that such dispute shall be settled by arbitration administered by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules and its Optional Procedures for Large, Complex Commercial Disputes, or other rules agreed to by the parties, by three arbitrators. Any decision by such arbitrators shall be final and binding on the parties, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The parties' agreement to arbitrate is with respect to only those disputes set forth in this Section 3.4.

(ii) Any arbitration shall take place in New York, New York. Advance/Newhouse shall initiate the arbitration in accordance with the procedures set forth in Rule 4 of the AAA Commercial Arbitration Rules.

(iii) The arbitrators shall be selected from the Large, Complex Commercial Case Panel in accordance with the procedures in Rule 13(a) and (b) of the Commercial Arbitration Rules, and Rule 13(c) shall not apply. At least one of the arbitrators shall be experienced in commercial matters related to the cable television industry.

(iv) As part of discovery and the exchange of information and documents between the parties in an arbitration of a dispute under Section 3.4(b), TWE and its Affiliates shall be required to produce to Advance/Newhouse, inter alia, all documents and information relating to the contract or transaction at issue, as well as documents or information relating to comparable contracts or transactions with non-affiliated parties; provided that the production of third party agreements that contain competitively sensitive information or that are subject to confidentiality restrictions shall be subject to such protections as the arbitrators may determine are adequate to protect the legitimate confidentiality concerns of TWE and its Affiliates taking into account the need for Advance/Newhouse to review such agreements as part of its preparation of its presentation in the arbitration. It is agreed that as part of such protections the arbitrators may direct that in lieu of such agreements being provided to Advance/Newhouse directly that such agreements may be delivered to Advance/Newhouse's legal counsel and other advisors. As part of discovery and the exchange of information and documents between the parties in an arbitration of a dispute under Section 3.4(c), TWE shall be required to produce to Advance/Newhouse, inter alia, all documents and information relating to the transaction or agreement at issue, including all documents relating to the business considerations for the terms of the transaction or agreement at issue, as well as all documents and information relating to the treatment of other cable systems in the TWE Cable Division in comparable circumstances. Advance/Newhouse and TWE may submit to the arbitrators prior to the hearing any written information and may make any oral presentation at the hearing that Advance/Newhouse or TWE deem appropriate to support their respective positions with respect to the disputed matter. At any hearing before the arbitrators at which witnesses present testimony either in person or telephonically, Advance/Newhouse and TWE shall be entitled to cross examine the witnesses; provided, however, that this provision shall not be deemed to preclude the ability of either party to present testimony by affidavit in the arbitration hearing.

(v) The arbitrators shall render their written decision and award (which shall be limited to money damages), including a statement of reasons upon which such award is based (which shall include a statement of the elements of an Affiliate Transaction that are not arm's length, but which need not include a statement of modifications necessary to cure such elements), within thirty days from the date of the closing of the arbitration hearing. The merits of the dispute and the legal relations between Advance/Newhouse and TWE shall be determined under and in accordance with the substantive laws of the State of New York as provided for in Section 15.10 of this

Partnership Agreement. The agreement to arbitrate set forth in this
Section 3.4 shall be construed and enforced pursuant to the United States Arbitration Act, 9 U.S.C. 'SS''SS' 1 et seq.

(vi) Except as provided in Section 3.4(d) above, each party shall bear the fees and expenses of its own attorneys, other advisors, experts, witnesses or cost of proof (in each case other than those produced at the request of the arbitrators) in connection with the negotiation or arbitration. Except as provided in Section 3.4(d) above, all other expenses of any arbitration pursuant to this Section 3.4, including fees and expenses of the AAA, fees and expenses of the arbitrators, and fees and expenses of any expert, witness or the cost of any proof (in each case produced at the request of the arbitrators), shall be borne by the Partnership.

(vii) It is expressly understood and agreed that Advance/Newhouse and TWE shall each be entitled to provide the arbitrators with more information than is requested by the arbitrators, in accordance with procedures established by the arbitrators, and that the parties intend for the arbitrators to consider, to the extent they deem appropriate, all such information; provided that it is also understood and agreed that the other party shall be entitled to receive copies of such additional information furnished to the arbitrators, subject to the same confidentiality procedures referenced in this
Section 3.4.

(f) Advance/Newhouse is required to maintain as confidential, unless otherwise required by law or judicial decision: (i) all documents and information provided by TWE under Section 3.4(a) designated by TWE as "confidential," and (ii) all documents or information provided by TWE or its Affiliates to Advance/Newhouse in connection with any negotiation or arbitration that are designated by TWE as "confidential." TWE is required to maintain as confidential, unless otherwise required by law or judicial decision, all documents or information provided by Advance/Newhouse to TWE in connection with any negotiation or arbitration that are designated by Advance/Newhouse as "confidential." Advance/Newhouse and TWE are required to maintain as confidential, unless otherwise required by law or judicial decision:
(i) any arbitration proceedings, including any hearings, and (ii) any arbitration award, except as necessary in connection with judicial enforcement of an award. The arbitrators in any arbitration also may issue orders to protect the confidentiality of proprietary information, competitively sensitive information, information subject to confidentiality agreements with third parties, trade secrets, or other sensitive information.

(6) Section 5.5 of the Partnership Agreement is hereby amended by adding the following subsection (h) at the end thereof:

(h) In the event that any item or items of income, gain, loss or deduction of the Partnership or any Partner is reallocated between the Partnership and any Partner, then the allocations of the income, gain , loss or deduction of the Company for the year in which such reallocation occurs shall be made in such a fashion that the Capital Accounts of all Partners, after taking into account any deemed contributions or

distributions arising in connection with such reallocation, shall be, to the greatest extent possible, in the same amounts as they would have been in had such reallocation not occurred.

(7) Section 8 of the Partnership Agreement is hereby deleted in its entirety and new Section 8 in the form attached hereto as Exhibit B shall be substituted therefor.

(8) Section 9 of the Partnership Agreement is hereby deleted in its entirety and new Section 9 in the form attached hereto as Exhibit C shall be substituted therefor.

(9) Section 11.5 of the Partnership Agreement is hereby amended as follows:

(i) by adding the following immediately following the first sentence of Section 11.5:

Advance/Newhouse shall have the right to receive (promptly after such reports are available) copies of all reports on matters affecting the Partnership provided to, or sent from, the following persons in the TWE Cable Division (or persons who may hereafter hold similar positions or have comparable responsibilities): Chairman and CEO; President and COO; Executive Vice President/Operations; Senior Vice President/Engineering; and Executive Vice Presidents responsible for the cable television systems owned by the Partnership.

(ii) by adding the following immediately following the second sentence of Section 11.5:

Without limiting any other information requirements set forth in this
Section 11.5 or elsewhere in the Partnership Agreement, TWE shall cause to be delivered within 5 days of the preparation of such reports and information, the reports and information referred to in the memoranda attached hereto as Exhibit D. It is understood and agreed that the Managing Partner may elect to exclude information otherwise to be provided pursuant to this Section 11.5 if the Managing Partner furnishes to Advance/Newhouse a legal opinion from the general counsel of ATW or the TWE Cable Division or outside counsel that states that furnishing such information would reasonably be expected to violate applicable antitrust law, rules or regulations or would reasonably be expected to result in the loss of any applicable attorney-client privilege. It is further understood and agreed that the Managing Partner shall have the right to redact material unrelated to the Partnership from any information to be provided to Advance/Newhouse pursuant to this Section 11.5.

(iii) by adding the following sentence at the end of
Section 11.5:

The Managing Partner shall designate an employee of the Managing Partner knowledgeable concerning the information to be provided to Advance/Newhouse (and notify Advance/Newhouse of such designation) who will be charged with the authority to insure, and the responsibility for implementing and enforcing of the provisions of this

Section 11.5 and other provisions of this Partnership Agreement relating to provision of information to Advance/Newhouse. The Managing Partner agrees that such employee's compensation will, in part, be based on compliance by the Managing Partner with such provisions, and such employee's compensation shall be subject to review with Advance/Newhouse.

III.

(1) Governing Law; Venue; Disputes. This Amendment shall be governed by the internal laws of the State of New York. Any action, suit or proceeding shall be prosecuted as to any party hereto in the County of New York, State of New York.

(2) Captions. Section headings contained in this Amendment are for reference purposes only and shall not in any way affect the meaning or interpretation of this Amendment.

(3) Effectiveness. The amendments to the Partnership Agreement set forth in sections (4), (5) and (6) of Article I shall be effective as of February 12, 1998. All other amendments to the Partnership Agreement contained in this First Amendment shall be effective as of the date hereof.

(4) Other Provisions. Except as amended hereby, the Partnership Agreement shall in all respects continue in full force and effect and the parties ratify and confirm that they continue to be bound by the terms and conditions thereof.

(5) Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be an original and all of which, when taken together, shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

ADVANCE/NEWHOUSE PARTNERSHIP

By: Advance Cable Holdings Corp.,
General Partner

By:      /s/ Robert J. Miron
         -------------------
         Name:  Robert J. Miron
         Title: President

By: Newhouse Broadcasting Corporation, General Partner

By:      /s/ Robert J. Miron
         -------------------
         Name:  Robert J. Miron
         Title: Vice President

TIME WARNER ENTERTAINMENT COMPANY, L.P.

By:      /s/ Spencer B. Hays
         -------------------
         Name:  Spencer B. Hays
         Title: Vice President

PARAGON COMMUNICATIONS

By: KBL Communications, Inc.
Managing General Partner

By:      /s/ Spencer B. Hays
         -------------------
         Name:  Spencer B. Hays
         Title: Executive Vice President

AMENDED AND RESTATED
TRANSACTION AGREEMENT NO. 4

AMENDED AND RESTATED TRANSACTION AGREEMENT NO. 4, dated as of February 1, 2001 (this "Agreement"), among ADVANCE PUBLICATIONS, INC., a New York corporation ("Advance"), NEWHOUSE BROADCASTING CORPORATION, a New York corporation ("Newhouse"), ADVANCE/NEWHOUSE PARTNERSHIP, a New York general partnership ("Advance/Newhouse"), TIME WARNER ENTERTAINMENT COMPANY, L.P., a Delaware limited partnership ("TWE"), PARAGON COMMUNICATIONS, a Colorado general partnership ("Paragon"), and TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP, a New York general partnership (the "Partnership").

WHEREAS, Advance/Newhouse and TWE entered into a Partnership Agreement, dated as of September 9, 1994, as amended, pursuant to which they formed the Partnership (the "Partnership Agreement");

WHEREAS, Advance, Newhouse, Advance/Newhouse, TWE and the Partnership entered into a Contribution Agreement, dated as of September 9, 1994, as amended (the "Contribution Agreement"), pursuant to which each of Advance/Newhouse and TWE contributed certain specified assets to the Partnership;

WHEREAS, in connection with the Amended and Restated Transaction Agreement, dated as of October 27, 1997 (the "First Transaction Agreement"), among Advance, Newhouse, Advance/Newhouse, TWE, TW Holding Co. and the Partnership, TWE, Advance/Newhouse and Paragon entered into the First Amendment to the Partnership Agreement, dated as of February 12, 1998 (the "First Amendment"), pursuant to which, among other things, Paragon became a partner of the Partnership;

WHEREAS, the Partnership, TWE-A/N Texas Cable Partners General Partner LLC, TCI Texas Cable Holdings LLC, TCI Texas Cable, Inc. and Texas Cable Partners, L.P., a Delaware limited partnership (the "TCI Joint Venture"), entered into a Contribution Agreement, dated as of June 23, 1998 (the "TCI Contribution Agreement"), pursuant to which, among other things, the Partnership contributed certain assets to the TCI Joint Venture;

WHEREAS, in connection with the TCI Contribution Agreement the parties hereto entered into Transaction Agreement No. 2, dated as of June 23, 1998 (the "Second Transaction Agreement"), pursuant to which, among other things, the parties entered into the Second Amendment to the Partnership Agreement, dated as of December 31, 1998 (the "Second Amendment"), to further amend the Partnership Agreement;

WHEREAS, in connection with the Transaction Agreement No. 3, dated as of September 15, 1998 (the "Third Transaction Agreement"), among Advance, Newhouse, Advance/Newhouse, TWE, Paragon and the Partnership, TWE,

Advance/Newhouse and Paragon entered into the Third Amendment to the Partnership Agreement, dated as of March 1, 1999 (the "Third Amendment"), pursuant to which, among other things, Paragon contributed certain assets to the Partnership;

WHEREAS, currently the cable television systems described on Part A of Schedule 1 hereto (the "Fanch I Systems"), are owned by TWFanch-one Co. ("Fanch I"), the cable television systems described on Part B of Schedule 1 hereto (the "Fanch II Systems") are owned by TWFanch-two Co. ("Fanch II"), the cable television systems described on Part C of Schedule 1 hereto (the "TWE Owned Systems") are owned by TWE and the cable television systems described on Part D of Schedule 1 hereto (the "Watertown Systems") are owned by CAT Holdings LLC, a recently formed Delaware limited liability company ("CAT LLC");

WHEREAS, prior to the Closing (as defined below), the Fanch I Systems will be transferred by Fanch I to TWE and the Fanch II Systems will be transferred by Fanch II to TWE, and pursuant to this Agreement, TWE will transfer the Fanch I Systems, Fanch II Systems and TWE Owned Systems (the "TWE Contributed Assets") to the Partnership;

WHEREAS, the entire outstanding limited liability company interests in the CAT LLC (the "Watertown Interests") are owned of record 50% by KBL Communications, Inc. ("KBL") and 50% by TWE and, pursuant to a letter agreement dated January 30, 1996 between TWE and the Partnership, TWE has previously assigned to the Partnership a one-sixth beneficial interest in the Watertown Systems;

WHEREAS, prior to Closing, all of KBL's Watertown Interests will be transferred to Paragon, and pursuant to this Agreement, Paragon and TWE will each transfer all of their Watertown Interests to the Partnership;

WHEREAS, the parties hereto executed a Transaction Agreement, dated as of July 12, 2000 (the "Original Fourth Transaction Agreement"), setting forth the terms on which certain of the TWE Contributed Assets were to be contributed to the Partnership;

WHEREAS, by letter agreement, dated as of July 12, 2000 (the "Watertown Side Letter"), the parties hereto also agreed that all beneficial ownership of the Watertown Systems that are not already owned by the Partnership would be contributed to the Partnership upon the occurrence of certain events; and

WHEREAS, the parties now desire to amend and restate the Original Fourth Transaction Agreement and the Watertown Side Letter in their entirety as set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Contribution of Fourth Transaction Systems.

(a) Subject to the conditions set forth in Section 3, at the Closing (as defined below), (i) TWE shall contribute, assign, convey, transfer and deliver to the Partnership its right, title and interest in and to all of the assets and properties, real, personal, mixed, tangible or intangible, owned, leased, licensed, that are principally used or held for use in connection with the ownership and operation of the TWE Contributed Assets, (ii) TWE shall contribute, assign, convey, transfer and deliver to the Partnership all of its right, title and interest in and to Watertown Interests (the "TWE Contributed Equity" and, together with the TWE Contributed Assets, the "TWE Contributed Systems"), (iii) Paragon shall contribute, assign, convey, transfer and deliver to the Partnership its right, title and interest in and to Watertown Interests (the "Paragon Contributed Systems" and, together with the TWE Contributed Systems, the "Fourth Transaction Systems"), and (iv) the Partnership shall assume, and agree to pay and discharge, as and when they become due, or otherwise take subject to the indebtedness and other liabilities associated with the Systems that are described on Schedule 2 hereto (the "Assumed Fourth Transaction Liabilities").

(b) At the Closing, (i) each of TWE and Paragon shall deliver instruments executed by it and in form and substance reasonably satisfactory to the Partnership contributing, assigning, conveying, transferring and delivering to the Partnership its right, title and interest in and to the Fourth Transaction Systems and (ii) the Partnership shall deliver instruments executed by it and in form and substance reasonably satisfactory to TWE and Paragon by which it shall assume and agree to pay and discharge the Assumed Fourth Transaction Liabilities.

(c) In exchange for the contributions contemplated by Section 1(a), TWE shall receive (i) Common Partnership Units (as defined in the Amended Partnership Agreement described below) having a value equal to 50% of the Net TWE Contribution and (ii) Series C Preferred Partnership Units (as defined in the Amended Partnership Agreement (defined below) having a value equal to 50% of the Net TWE Contribution. For purposes of the foregoing, "Net TWE Contribution" means the excess of (A) the TWE Contributed System Value determined in accordance with Section 7 over (B) the Assumed TWE Indebtedness (as defined on Schedule 2 hereof).

(d) In exchange for the contributions contemplated by Section 1(a), Paragon shall receive (i) Common Partnership Units (as defined in the Amended Partnership Agreement described below) having a value equal to 50% of the Net Paragon Contribution and (ii) Series C Preferred Partnership Units (as defined in the Amended Partnership Agreement (defined below) having a value equal to 50% of the Net Paragon Contribution. For purposes of the foregoing, "Net Paragon Contribution" means the excess of (A) the Paragon Contributed System Value determined in accordance with Section 7 over (B) the Assumed Paragon Indebtedness (as defined on Schedule 2 hereof).

2. Beneficial Assets and Subsidiary Beneficial Assets. If any consent or approval is required in connection with the contribution to the Partnership pursuant to this Agreement of any ownership interest in a cable television system (or the

franchise pursuant to which such cable television system is operated) and such consent or approval is not obtained prior to the Closing, then in lieu of contributing (and pending the actual contribution of) such ownership interest in a cable television system to the Partnership, TWE or Paragon, as applicable, will hold such ownership interest (or cause such interest be held) for the use and benefit of the Partnership. Such interest shall be treated as Beneficial Assets (as defined in the Contribution Agreement) or Subsidiary Beneficial Assets (as defined in the Contribution Agreement) in either case in accordance with Section 5.8 of the Amended Partnership Agreement (defined below) and
Section 6.7 of the Contribution Agreement. In accordance with Section 6.7 of the Contribution Agreement, following the Effective Date, TWE or Paragon, as applicable shall continue to use its reasonable best efforts to obtain any consent or approval necessary to effectuate the contribution to the Partnership of any Beneficial Asset or Subsidiary Beneficial Asset not contributed to the Partnership on the Effective Date, and shall take all reasonable actions to effectuate the contribution of such Beneficial Asset or Subsidiary Beneficial Asset after such consent or approval is obtained; provided, however, that no cable television franchise comprising a Beneficial Asset or Subsidiary Beneficial Asset (or owned by an entity whose equity interests comprises a Beneficial Asset or Subsidiary Beneficial Asset) shall be required to be contributed to the Partnership until consents or approvals shall have been obtained with respect to the contribution of all cable television franchises in the same cable television system as such franchise.

3. Closing Conditions. The obligations of TWE, Paragon and the Partnership to effect the transactions contemplated by this Agreement, shall be subject to the satisfaction at or prior to the Closing of the following conditions, the imposition of which are solely for the benefit of such parties and any one or more of which may be waived by such parties in their discretion:

(a) each of TWE, Advance/Newhouse and Paragon shall have executed and delivered the Amended and Restated Partnership Agreement substantially in the form of Exhibit A (the "Amended Partnership Agreement");

(b) with respect to the assumption by the Partnership of the Assumed Fourth Transaction Liabilities, each of the conditions to Assumption, as defined in the Credit Agreement dated as of November 10, 1997 (the "Credit Agreement") among Time Warner Inc. ("TWX"), Time Warner Companies, Inc., TWE, Turner Broadcasting System, Inc., the Partnership, TWI Cable Inc., the Lenders Party thereto and The Chase Manhattan Bank, as Administrative Agent, shall have been satisfied (or waived by the parties entitled to waive same);

(c) the consents and approvals required in connection with the contribution of the franchises pursuant to which the Fourth Transaction Systems are operated shall have been obtained or not required with respect to franchises having at least 85% of the total number of subscribers in the Fourth Transaction Systems, as set forth on Schedule 1 hereto;

(d) the board of directors of TWX and the Management Committee of TWE shall have approved the transactions contemplated by this Agreement;

(e) the waiting periods (and any extensions thereof), if any, applicable to the transactions contemplated by this Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") shall have been terminated or shall have expired (it being understood that as soon as practicable after the execution of this Agreement, the parties will complete and file, or cause to be completed and filed, any notification and report required to be filed under the HSR Act and each such filing shall request early termination of the waiting period imposed by the HSR Act); and

(f) no temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the transactions contemplated hereby shall be in effect; and

(g) the Closing under, and as defined in, the Asset Exchange Agreement, dated as of July 12, 2000, between the Partnership and Fanch I shall occur concurrently with the Closing hereunder.

4. Advance/Newhouse Contribution. Subject to the consummation of the transfer or beneficial assignment of the Fourth Transaction Systems to the Partnership, on or prior to the fourth anniversary of the Effective Date (the "Maturity Date"), Advance/Newhouse shall contribute to the Partnership cash in an amount equal to the Advance/Newhouse Contribution Amount, plus interest thereon at the Interest Rate compounded (to the extent not paid) on a quarterly basis, from the Effective Date until the date such contribution is made in full. For the purposes of the foregoing, (i) "Advance/Newhouse Contribution Amount" means an amount equal to 50% of the aggregate value of the Common Partnership Units received by TWE and Paragon in exchange for their contribution of the Fourth Transaction Systems and (ii) "Interest Rate" shall mean a rate per annum equal to the average interest rate applicable from time to time to borrowings by the Partnership under the senior revolving credit facility of the Partnership. At the Closing, Advance/Newhouse shall execute and deliver to the Partnership a promissory note (the "Advance/Newhouse Note") substantially in the form of Exhibit B hereto having a principal amount equal to the Advance/Newhouse Contribution Amount, as security for its obligation to contribute to the Partnership the Advance/Newhouse Contribution Amount, plus interest as provided in this Section 4. Advance/Newhouse shall take any and all actions and execute and deliver all documents or agreements reasonably requested by the Partnership to enable the Partnership to perfect its security interest in the Advance/Newhouse Note. Advance/Newhouse and the Partnership acknowledge and agree that the Advance/Newhouse Note shall not be deemed an asset of the Partnership unless and until the Partnership seeks to realize upon its security interest therein. In exchange for its agreement to contribute the Advance/Newhouse Contribution Amount, Advance/Newhouse shall receive Common Partnership Units having a value equal to

50% of the aggregate value of the Common Partnership Units received by TWE and Paragon in exchange for their contribution of the Fourth Transaction Systems.

5. Time and Place of Closing. Subject to the satisfaction (or waiver) of each of the conditions set forth in Section 3, the closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New York 10019-6064 (or such other place as the parties may mutually agree), at 10:00 a.m. (New York City time) on the last day of the month following the date that is the fifth business day following satisfaction or waiver of the conditions set forth in Section 3, or such earlier date as TWE and Paragon may determine (upon 2 business days' notice to Advance/Newhouse), or such later date as the parties may mutually agree. The date on which the Closing occurs is referred to herein as the "Effective Date."

6. Representations and Warranties; Indemnification. TWE and Paragon hereby represent and warrant to Advance/Newhouse that CAT LLC has not conducted any operations or assumed any liabilities other than in connection with its ownership and operation of the Watertown Systems. Subject to the Closing having occurred, each of TWE and Paragon (i) shall use commercially reasonable efforts, at the Partnership's expense, to enforce its rights with respect to the representations and warranties set forth in the Acquisition Agreements to the extent such representations and warranties relate to the Fourth Transaction Systems, including by way of seeking indemnification in accordance with the terms of the Acquisition Agreements, and (ii) shall grant to the Partnership the benefits, if any, obtained as a result of the enforcement of such rights. For purposes of the foregoing, "Acquisition Agreements" means, collectively, the Asset Exchange Agreement dated as of April 6, 1998 between TWE and A-R Cable Services, Inc.; the Asset Purchase Agreement dated December 28, 1998 between TWE and OUR Cable Systems, Inc.; the Asset Purchase Agreement dated as of April 19, 1999, as amended, among TWE, J. Feeney Associates, Inc. and PCI One Incorporated; and the Redemption Agreement dated as of July 17, 2000 among CAT Partnership, TWE, KBL, TCI Holdings II, Inc. and Comcast Hattieburg Holding Company, Inc.

7. Valuation of Fourth Transaction Systems.

(a) Fourth Transaction Systems. The gross value of the TWE Contributed Systems (the "TWE Contributed System Value") shall equal $205,642,030, as adjusted pursuant to Section 8. The gross value of the Paragon Contributed Systems (the "Paragon Contributed System Value") shall equal $21,875,433 as adjusted pursuant to Section 8.

(b) Procedure; Dispute Resolution. (i) Within 60 days following the Effective Date, TWE and Paragon shall jointly deliver to the Partnership Advance/Newhouse a certificate (the "Valuation Certificate"), signed by appropriate officers of TWE and Paragon after due inquiry by such officers, but without any personal liability to such officers, setting forth the TWE Contributed System Value, the Paragon Contributed System Value, the Net TWE Contribution, and the Paragon Net Contribution

and the calculation thereof in accordance with Section 1(c), Section 1(d),
Section 8 and this Section 7. At the request of Advance/Newhouse, TWE and Paragon shall provide the requesting party with prompt and complete access to all working papers and relevant supporting documentation as well as appropriate TWE and Paragon personnel, in each case reasonably necessary in connection with such party's review of the information set forth in the Valuation Certificate. If Advance/Newhouse shall conclude that the Valuation Certificate is not accurate, then Advance/Newhouse, within 90 days of receipt of such Valuation Certificate, shall furnish TWE and Paragon with a written statement of any discrepancy or discrepancies believed to exist (the "Discrepancy Certificate"). Advance/Newhouse, TWE and Paragon shall attempt jointly to resolve any discrepancy set forth in the Discrepancy Certificate within 30 days after receipt thereof, which resolution, if achieved, shall be binding upon all parties to this Agreement and not subject to dispute or review. If Advance/Newhouse, TWE and Paragon cannot resolve the discrepancy to their mutual satisfaction within such 30-day period, Advance/Newhouse, TWE and Paragon shall within 10 days following the expiration of such 30-day period, jointly designate a nationally known independent certified public accounting firm to review the Valuation Certificate, together with the Discrepancy Certificate, and any other relevant documents. If Advance/Newhouse, TWE and Paragon do not agree upon a nationally known independent certified public accounting firm in accordance with the preceding sentence within such 10-day period, then such review shall be performed by a nationally known independent certified public accounting firm selected by two other nationally known certified public accounting firms, one selected by Advance/Newhouse and one selected by TWE; provided that if one party fails to notify the other party of its selection within five days following receipt from another party of its selection, the accounting firm selected by the other party or parties shall perform such review. The cost of retaining such independent public accounting firm shall be borne one-half by Advance Newhouse and one-half by TWE and Paragon (to be shared in proportion to the relative adjustments affecting TWE and Paragon). Such firm shall report its conclusions and such report shall be conclusive and binding on all parties to this Agreement and not subject to dispute or review. The TWE Contributed System Value, the Paragon Contributed System Value, the Net TWE Contribution, the Net Paragon Contribution, the Advance/Newhouse Contribution Amount and the Assumed Fourth Transaction Liabilities, shall be adjusted, if necessary, to reflect any such resolution.

8. Closing Adjustments.

(a) At the Closing, TWE shall deliver to the Partnership a certificate setting forth the estimated TWE Adjustment Amount (as defined below), which shall be determined in good faith by TWE. If the estimated TWE Adjustment Amount is greater than zero, then the TWE Contributed System Value shall be increased by an amount equal to such estimated TWE Adjustment Amount. If the estimated TWE Adjustment Amount is less than zero, then the TWE Contributed System Value shall be reduced by an amount equal to the absolute value of such TWE Adjustment Amount. The Valuation Certificate delivered by TWE pursuant to Section 7(b) shall set forth the final TWE Adjustment Amount and, to the extent necessary, the TWE Contributed System Value, the Net TWE Contribution, the Advance/Newhouse Contribution Amount and the Assumed Fourth Transaction Liabilities shall be adjusted to reflect the difference

between the final TWE Adjustment Amount and the estimated TWE Adjustment Amount.

(b) At the Closing, Paragon shall deliver to the Partnership a certificate setting forth the estimated Paragon Adjustment Amount (as defined below), which shall be determined in good faith by Paragon. If the estimated Paragon Adjustment Amount is greater than zero, then the Paragon Contributed System Value shall be increased by an amount equal to such estimated Paragon Adjustment Amount. If the estimated Paragon Adjustment Amount is less than zero, then the Paragon Contributed System Value shall be reduced by an amount equal to the absolute value of such Paragon Adjustment Amount. The Valuation Certificate delivered by Paragon pursuant to Section 7(b) shall set forth the final Paragon Adjustment Amount and, to the extent necessary, the Paragon System Value, the Net Paragon Contribution, the Advance/Newhouse Contribution Amount and the Assumed Fourth Transaction Liabilities shall be adjusted to reflect the difference between the final Paragon Adjustment Amount and the estimated Paragon Adjustment Amount.

(c) For purposes of the foregoing, "TWE Adjustment Amount" means all capital expenditures in respect of the TWE Contributed Systems during the period from April 1, 2000 to the Effective Date, plus any positive working capital existing at the end of such period or minus the absolute value of any negative working capital existing at the end of such period.

(d) For purposes of the foregoing, "Paragon Adjustment Amount" means all capital expenditures in respect of the Paragon Contributed Systems during the period from April 1, 2000 to the Effective Date, plus any positive working capital existing at the end of such period or minus the absolute value of any negative working capital existing at the end of such period.

(e) The adjustments made pursuant to this Section 8 are already reflected in the capital account balances of the partners of the Partnership and, accordingly, no additional adjustments to the partners' capital account balances shall be made in respect of such adjustments.

9. Miscellaneous.

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York (other than its rules of conflicts of law to the extent the application of the law of another jurisdiction would be required thereby).

(b) The parties hereto shall cooperate with each other and their respective counsel and accountants in connection with any steps required to be taken as part of their respective obligations under this Agreement and will each use reasonable best efforts to perform or fulfill all conditions and obligations to be performed or fulfilled

by them under this Agreement so that the transactions contemplated hereby shall be consummated.

(c) Section headings contained in this Agreement are inserted only as a matter of convenience and reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions hereof.

(d) This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which, when taken together, shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

ADVANCE PUBLICATIONS, INC.

By: /s/ S.I. Newhouse, Jr.
    ----------------------
    Name: S.I. Newhouse, Jr.
    Title: Chairman/Vice President

NEWHOUSE BROADCASTING
CORPORATION

By: /s/ Robert J. Miron
    ----------------------
    Name: Robert J. Miron
    Title: Vice President

ADVANCE/NEWHOUSE PARTNERSHIP

By: ADVANCE CABLE HOLDINGS
CORP., General Partner

By: /s/ Robert J. Miron
    ----------------------
    Name: Robert J. Miron
    Title: President

By: NEWHOUSE BROADCASTING
CORPORATION, General Partner

By: /s/ Robert J. Miron
    ----------------------
    Name: Robert J. Miron
    Title: Vice President

TIME WARNER ENTERTAINMENT
COMPANY, L.P., through its
TIME WARNER CABLE DIVISION

By: /s/ David E. O'Hayre
    ----------------------
    Name: David E. O'Hayre
    Title: Senior Vice President
           -- Investments

PARAGON COMMUNICATIONS

By: KBL COMMUNICATIONS, INC.,
Managing General Partner

By: /s/ David E. O'Hayre
    ----------------------
    Name: David E. O'Hayre
    Title: Vice President

TIME WARNER ENTERTAINMENT -
ADVANCE/NEWHOUSE PARTNERSHIP

By: TIME WARNER ENTERTAINMENT
COMPANY, L.P., Managing General
Partner, through its TIME WARNER
CABLE DIVISION

By: /s/ David E. O'Hayre
    ----------------------
    Name: David E. O'Hayre
    Title: Senior Vice President
           -- Investments

By: ADVANCE/NEWHOUSE
PARTNERSHIP, General Partner

By: ADVANCE CABLE HOLDINGS CORP.,
General Partner

By: /s/ Robert J. Miron
    ----------------------
    Name: Robert J. Miron
    Title: President

By: NEWHOUSE BROADCASTING CORPORATION,
General Partner

By: /s/ Robert J. Miron
    ----------------------
    Name: Robert J. Miron
    Title: Vice President

By: PARAGON COMMUNICATIONS

By: KBL COMMUNICATIONS, INC.,
Managing General Partner

By: /s/ David E. O'Hayre
    ----------------------
    Name: David E. O'Hayre
    Title: Vice President