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HomeMy WebLinkAbout1999-215Section 5 Purchase and Contribution Agreement RECEIVED AUG 111999 CLERK TO THE BOARD IV Bp S CO;yfA9�3SipN9iY m owvmmraF . PURCHASE AND CONTRIBUTION AGREEMENT DATED AS OF MAY 26,1999 BY AND AMONG CHARTER COMMUNICATIONS, INC., FALCON COMMUNICATIONS, L.P., FALCON HOLDING GROUP, L.P., TCI FALCON HOLDINGS, LLC, FALCON CABLE TRUST, FALCON HOLDING GROUP, INC., AND DHN INC. PURCHASE AND CONTRIBUTION AGREEMENT DATED AS OF MAY 26,1999 BY AND AMONG CHARTER COMMUNICATIONS, INC., FALCON COMMUNICATIONS, L.P., FALCON HOLDING GROUP, L.P., TCI FALCON HOLDINGS, LLC, FALCON CABLE TRUST, FALCON HOLDING GROUP, INC., AND DHN INC. INDEX Description TAh _ Purchase Agreement dated as of May 26, 1999 1 Disclosure Schedules to the Purchase Agreement 2 Exhibit A—Adjustment Escrow Agreement 3 Exhibit B—Put Agreement 4 Exhibit C—Registration Rights Agreement 5 Exhibit D—Terms of Charter LLC Operating Agreement 6 Exhibit E—Terms of Exchange Agreement 7 _ Exhibit F—Form of Allocation Notice S Exhibit O—Form of Opinions of Counsel to Falcon and Sellers 9 Exhibit H—Fora of Seller Release 10 Exhibit I—Farm of Opinion of Counsel to Buyer 11 11makl PURCHASE AND CONTRIBUTION AGREEMENT DATED AS OF MAY 26,1999 BY AND AMONG CHARTER COMMUNICATIONS, INC., FALCON COMMUNICATIONS, L.P., FALCON HOLDING GROUP, L.P., TCI FALCON HOLDINGS, LLC, FALCON CABLE TRUST, FALCON HOLDING GROUP, INC., AND DHN INC. C1.91/U]A! EAF.CUI'10N PURCHASE AND CONTRIBUTION AGREEMENT DATED AS OF MAY 26,1999 TABLE OF CONTENTS PaRe SECTION 1 CERTAIN DEFINITIONS...........................................1 1.1 Terms Defined in this Section..................................1 "Adjustment Escrow Agent"...................................1 "Adjustment Escrow Agreement"...............................1 "Adjustment Tirne.. ..........................................2 "Affiliate,...................................................2 "Assets"...................................................2 "Basic Subscriber"...........................................2 "Bulk Subscriber"............................................2 "Cable Act".................................................2 "Chaser Holdings"...........................................2 "Charter LLC"..............................................2 "Charter LLC Operating Agreement" ............................. 2 "Charters Disclosure Schedules"................................3 "Closing"..................................................3 "Closing Date"..............................................3 "Code"....................................................3 "Commercial Bulk Subscriber' ...... ........................... 3 "Compensation Arrangement"..................................3 "Consents ................................................. "Contracts".................................................3 "Copyright Act".............................................3 "Credit Ameement".......................................... 3 "Debt Documents"...........................................4 "Employee Plan"...........:................................4 "Encumbrances..............................................4 "Enforceability Exceptions"....................................4 "Easter Credit Agreement".....................................4 "Em Debt Documents".....................................4 "Environmental Claim".......................................4 "Environmental Law".........................................4 "Equity Interests"............................................5 "Equivalent Subscribers"......................................5 "ERISA"...................................................5 anvmmaxecvna+ r MVVIR[rr IstacranON "ERISA Affiliate"............................................5 „Exchange Act".............................................5 fitAgreement" ......................... ..............5 1 "Falcon Companies"..........................................5 "Falcon's Disclosure Schedules" ................................ 6 I'FCC, . ...................................................6 „FCC Licenses" ...................... .......................6 .,FCC Regulations"...........................................6 "FFI................ ........................................6 ..Franchise".................................................6 "Franchise Area"............................................6 "Franchising Authorities" ...................................... 6 "GAAP"...................................................6 ,Governmental Authority .................. .....................6 "Hazardous Substance".......................................6 "Headquatters Employees" ..................................... 6 ,.HSR Act".................................................7 ,.Indebtedness" ..............................................7 „Indenture".................................................7 .,Intangibles"................................................ 7 "Knowledge"...............................................7 "Legal Restrictions" .......................................... 7 "Legal Requirements"........................................7 "Licenses"..................................................8 „Loss" ............................................. ........$ "Material Adverse Effect".....................................8 "Material Contract" .......................................... 8 "Material FCC Consent"......................................8 ,.MONY Agreement".........................................8 „MONY Notes".............................................8 "Nathanson Agreement.........................................8 'vrganizmtionai Documents" ................................... 8 "Permitted Encumbrances"....................................9 .,Person"...................................................9 "Pre -Closing Tax Period"......................................9 "Put Agreement"............................................9 .,Rate Regulatory Matter'......................................9 "Real Property ....................................... I....... 10 "Registration Rights Agreement" ............ I .................. 10 "Released Parties" ................................... ....... 10 "Residential Bulk Subscriber" ................................. 10 "SEC" .................................................... 10 MVVIR[rr IstacranON i "Securities Act" ............................................ 10 "Senior Debentures" ......................................... 10 "Senior Debentures Amount" .................................. 10 ,.. "Senior Debt" .............................................. 10 "Senior Debt Amount" ....................................... 10 "Senior Discount Debentures" ....................... I......... 10 "Senior Discount Debentures Accreted Value" .................... 10 "Subscriber.' ............................................... 11 "Subsidiary" ............................................... 11 "System ................................................... 11 °Tangible Personal Property ................................... 11 "Tax" .................................................... 11 "Tax Return" ................. I....................... I.... 11 "TC1 Systems" ............................................. I] "Transaction Documents" .................................... I1 "Transferable Franchise Area" ................................. 12 "Upset Date" ..................................... .......... 12 1.2 To= Defined Elsewhere in this Agreement ...................... 12 1.3 Rules of Construction ........................................ 14 SECTION 2 SALE AND PURCHASE OF PURCHASED INTERESTS; CONTRIBUTION , OF CONTRIBUTED INTEREST; ASSUh1PTION OF LIABILITIES; CONSIDERATION ............................................... 14 2.1 Agreement to Sell and Buy Purchased Interests and to Contribute Contributed Interest ......................................... 14 2.2 Assumption of Obligations; Effect on Partnership Agreement of Falcon.................................................... 16 .. 23 Consideration for Purchased Interests and Contributed Interest ........ 17 2.4 Adjustments ............................................... 17 2.5 Payments at Closing ......................................... 20- 2.6 Post -Closing Payment of Aggregate Consideration Adjustments...... 21 SECTION 3: REPRESENTATIONS AND WARRANTIES OF FALCON ............... 23 3.1 Organization and Authority ................................... 23 3.2 Authorization and Binding Obligation ........................... 23 3.3 Organization and Ownership of Falcon Companies ................ 24 3.4 Absence of Confliefing Agreements; Consents .................... 24 3.5 Financial Statements ........................................ 25 3.6 Absence of Undisclosed Liabilities ............................. 25 — 3.7 Absence of Certain Changes .................................. 26 3.8 Franchises, Licenses, Material Contracts ......................... 26 a. i 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 Title to and Condition of Real Property and Tangible Personal 38 Property.................................................. 27 28 Intangibles................................................ 28 Information Regarding the Systems ............................. Taxes....................................................29 Absence of Conflicting Agreements; Consents ....................36 Employee Plans ............................................ 31 Environmental laws........................................33 Claims and Litigation........................................33 Claims and Litigation........................................37 Compliance With Laws......................................33 4.6 Transactions with Affiliates ................................... 34 Certain Fees ............................................... 34 inventory ................................................. 34 Overbuilds; Competition.....................................34 38 Disconnections ................... ..........................35 Financial Statements ........................................ Year2000..........................4......................35 5.10 Budgets.........................................4.........35 41 SECReports.........................................4....435 Cure ..................................................... Foreign Comipt Practices Act.................................35 Cure....................................4..........4.....35 SECTION 4: REPRESENTATIONS AND WARRANTIES OF SELLERS ............... 38 4.1 Organization ............................................. . 36 36 4.2 Authorization and Binding Obligation ........................... 4.3 Absence of Conflicting Agreements; Consents ....................36 4.4 Title to Purchased Interests...................................37 4.5 Claims and Litigation........................................37 4.6 Certain Fees...............................................37 40 4.7 Investment Purpose; Investment Company ....................... 37 4.8 Cure ..................................................... 38 SECTION 5: REPRESENTATIONS AND WARRANTIES OF BUYER ................ 38 5.1 Organization ............................................. 38 5.2 Authorization and Binding Obligation ........................... 5.3 Absence of Conflicting Agreements; Consents ....................39 5.4 Claims and Litigation........................................39 5.5 Investment purpose; Investment Company .......................39 5.6 Ownership of Buyer and its Subsidiaries ......................... 40 5.7 Certain Fees ............................................... 40 .. 5.8 AvailabilityofFunds................. .... .................... 40 5.9 Financial Statements ........................................ 40 5.10 Private Offering Memorandum and S-4 .......................... 41 _ 5.11 Cure ..................................................... 41 ocmmrus ei¢cuna+ Y McZI US E%ECUnON V r r SECTION 6: SPECIAL COVENANTS AND AGREEMENTS ........................ 41 6.1 Operation of Business Prior to Closing .......................... 41 6.2 Confidentiality; Press Release ................................. 44 6.3 Cooperation; Commercially Reasonable Efforts ................... 45 6.4 Consents and Notices ........................................ 45 6.5 HSRAct Filing ............................................. 48 6.6 No Inconsistent Actions; Charter LLC ........................... 48 6.7 Falcon Company and EnstarDebt Obligations .................... 49 6.8 Retention and Access to the Falcon Companies' Records ............ 50 6.9 Employee Matters .......................................... 51 6.10 Tax Matters ............................................... 52 6.11 Falcon Name ............................................... 55 6.12 No Recourse; Release of Claims ............................... 55 6.13 Exculpation and Indemnification ............................... 56 6.14 Rate Regulatory Matters ...................................... 56 6.15 Disclosure Schedules . ....................................... 57 6.16 Environmental Reports ....................................... 57 6.17 Year 2000 Matters .......................................... 57 6.18 TCI Arrangements .......................................... 57 6.19 Restructuring .............................................. 57 SECTION 7: CONDITIONS TO OBLIGATIONS .................................. 58 7.1 Conditions to Obligations of the Buyer .......................... 58 7.2 Conditions to Obligations of Sellers ............................ 59 SECTION 8: CLOSING AND CLOSING DELIVERIES ............................. 60 ._ 8.1 Closing . .................................................. 60 8.2 Deliveries by Sellers ......................................... 61 8.3 Deliveries by Buyer ......................................... 62 ... SECTION 9- TERXINe TTOM................................................. 63 9.1 Agreement between Sellers and Buyer ........................... 63 �- 9.2 Termination by Sellers ....................................... 63 9.3 Termination by Buyer ........................................ 64 9.4 Effect of Temunation........................................ 64 9.5 Attorneys' Fees ............................................. 65 SECTION 10: SURVIVAL ..................................................... 66 `. 10.1 Survival .................................................. 66 Y McZI US E%ECUnON V r r SECTION ll: MISCELLANEOUS ............................................... 66 11.1 Fees and Expenses .......................................... 66 .,... 11.2 Notices ................................................... 66 11.3 Benefit and Binding Effect .................................... 68 11.4 Further Assureaces.......................................... 69 11.5 GOVERNINGLAW........................................ 69 11.6 WAIVER OF JURY TRIAL .................................. 69 11.7 Severability ............................................... 69 11.8 Entire Agreement ........................................... 69 11.9 Amendments; Waiver of Compliance; Consents ................... 69 11.10 Counterparts ............................................... 70 11.11 Specific Performance ........................................ 70 11.12 Tax Consequences .......................................... 70 ,Kull... FM:CVn.N TABLE OF SCHEDULES Schedule Descriotion Schedule 11(s) Falcon Companies Schedule 1.1(b) Headquarters Employees Schedule l.l(c) Buyer Knowledge Schedule 1.1(d) Falcon Knowledge Schedule I.1(e) Material FCC Consent Schedule l.l(f) Designated Franchises Schedule 3.1 Organization and Authority Schedule 3.3 Organization and Ownership of the Falcon Companies Schedule 3.4 Absence of Conflicting Agreements; Consents Schedule 3.6 Absence of Undisclosed Liabilities Schedule 3.7 Absence of Certain Changes Schedule 3.8 Franchises, Licenses, Material Contracts Schedule 3.9 Title to and Condition of Real Property and Tangible personal Property Schedule 3.10 Intangibles Schedule 3.11 Information Regarding the Systems Schedule 3.12 Taxes Schedule 3.13 Employee Plans Schedule 3.14 Environmental Laws Schedule 3.15 Claims and Litigation Schedule 3.16 Compliance with laws Schedule 3.17 Transactions with Affiliates Schedule 3.20 Overbuilds; Competition Schedule 3.21 Disconnections or,....... P.xECUnDN vii Schedule Description Schedule 3.23 Budgets Schedule 4.3 Absence of Conflicting Agreements; Consents Schedule 4.4 Title to Purchased Interests and Contributed Interest Schedule 4.5 Claims and Litigation Schedule 4.6 Certain Fees Schedule 5.4 Claims and Litigation Schedule 5.6 Charter Ownership Chan Schedule 5.9 Chatter Financial Statements Schedule 6.1 Operation of Business Prior to Closing Schedule 6.18 TCI Arrangements CNIR]StlI ENECUmON VIII TABLE OF EMIMITS Exhibi Description Exhibit Adjustment Escrow Agreement Exhibit Put Agreement Exhibit C Registration Rights Agreement Exhibit Terms of Charter LLC Operating Agreement Exhibit Terms of Exchange Agreement Exhibit Form of Allocation Notice Exhibit G Form of Opinions of Counsel to Falcon and Sellers Exhibit H Form of Seller Release Exhibit I Form of Opinion of Counsel to Buyer M.M,vas rxactmorr ix w PURCHASE AND CONTRIBUTION AGREEMENT _ This PURCHASE AND CONTRIBUTION AGREEMENT (this "Agreement") is dated as of May 26, 1999, by and among Charter Communications, Inc., a Delaware corporation ("Buyer"), Falcon Communications, L.P., a California limited partnership ("Falcon'), Falcon Holding Group, L.P., a Delaware limited partnership ("FHGLP"), TCI Falcon Holdings, LLC, a Delaware limited liability company ("TCI"), Falcon Cable Trust, a California tout ("FC Trust'), Falcon Holding Group, Inc., a California corporation ("FHGP), and DHN Inc., a California corporation COON") (FHGLP, TCI, FC Trust, FHGI and DIRJ sometimes referred to herein as "Sellers'). RECITALS: A. FHGLP and TCl hold all of the outstanding partnership interests in Falcon. FC Trust said FHGI hold partnership interests in certain other Falcon Companies. FHGLP holds certain equity interests in Enstar Communications Corporation ("Enstar") and Enstar Finance Company, LLC ("Enstar Finance'). DHN holds certain equity interests in Adlink Cable Advertising LLC ("Adlink'). B. Buyer desires to acquire from FHGLP and TO all of the partnership interests in Falcon, the specified partnership interests in certain Falcon Companies held by FC Trust and FHGI, the specified interests in Enter and Enstar Finance held by FHGLP, and the specified interests in Adlink held by DHN. C. The parties hereto desire to set forth the terms in accordance with which Buyer shall acquire the above-described interests from the Sellers for the consideration and on the terms and conditions set forth in this Agreement. AGREEMENTS: In consideration of the above recitals and of the mutual agreements and covenants contained in this Agreement, the patties to this Agreement, intending to be bound legally, agree as follows: SECTION I CERTAIN DEFINITIONS. 1.1 TermisDafinedinthisSecti The following terms, as used in this Agreement, have the meanings set forth in this Section: "Adjustment Escrow Agent" means the Escrow Agent to be seamed in the Adjustment Escrow Agreement "Adjustment Escrow Agreement" means the Adjustment Escrow Agreement that may, subject to the terms of this Agreement, be executed and delivered by Buyer, FHGLP and the Adjustment Escrow Agent, substantially in the form ofExhibit A hereto. =1412WE%ECmNJN "Adjustment Time" means 11:59 p.m., California time, on the Closing Data "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 the specified Person. "Assets" means all of the tangible and intangible assets that are owned, leased or held by the Falcon Companies and that are used or held for use in connection with the conduct of the business or operations of the Systems, and less any such Assets that are sold, transferred or otherwise conveyed by die Falcon Companies to third Persons prior to the Closing in accordance with the provisions of this Agreement,rop vided that with respect to any assets that are leased by the Falcon Companies or otherwise not owned by the Falcon Companies, "Assets" includes only the interest, title and rights in such assets held by the Falcon Companies. "Basic Subscriber" means, with respect to any System, any Subscriber to a System at the regular basic monthly subscription rate (including discounted rates offered in the ordinary course of business consistent with past practice) for at least broadcast basic cable service (either alone or in combination with any other service) for such System, who has rendered payment for at least one month's service and who does not have more than Five Dollars (85.00) (excluding late charges and fees and amounts subject to a bona fide dispute) that is more than two months past due from the last day of the period to which any outstanding bill relates. "Bulk Subscriber" means, with respect to any System, any Subscriber, other than a Basic Subscriber, to at least broadcast basic cable service (either alone or in combination with any other service) for such System which is billed to such Subscriber on a bulk basis to bulk commercial accounts, such as hotels, motels and hospitals and bulk residential accounts, such as condominiums, railer parks, apartment houses and similar multiple dwelling units or other commercial accounts and who has rendered payment for at least one month's service at such customer's regular basic monthly subscription rate for such service and who does not have more than Five Dollars ($5.00) (excluding late charges and fees and amounts subject to a bona fide dispute) that is more turn two months past due from the but day ofthe period to which any outstanding bill relates. "Cable Act" means Title VI of the Communications Act of 1934, as amended. 47 IIS r_ Section X21 atm., all otherprovisions of the Cable Communications Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992, and the provisions of the Telecommunications Act of 1996 amending Title VI of the Communications Act of 1934, in each case as amended and in effect from time to time. "Chatter Holdings" means Charter Communications Holdings, LLC. "Charter ILC" means a limited liability company to be formed pursuant to the Charter LLC Operating Agreement as contemplated by Section 6.6. MWap Al f]txWLR- r "Charter LLC Operating Agreement' means the operating agreement of Charter LLC containing the provisions set forth in Exhibit D hereto and such other provisions as contemplated in Section 6.6, which agreement shall be executed and delivered on the Closing Date. "Charter's Disclosure Schedules" means the Disclosure Schedules referred to in Section 5 of this Agreement and attached to this Agreement. "Closing" means the purchase and sale of the Purchased Interests pursuant to this Agreement. "Closing Date" means the date on which the Closing occurs. "Code" means the Intemal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder, m amended and in effect from time to time. "Commercial Bulk Subscriber" means a Bulk Subscriber that is a commercial or business bulk account such as ahotel, motel or hospital, as reflected in the records of the Falcon Companies. "Compensation Arrangement" means any plan or compensation arrangement other than an Employee Plan, whether written or unwritten, which provides to employees, former employees, officers, directors and shareholders of any Falcon Company or any ERISA Affiliate any compensation or other benefits, whether deferred or not, in excess of base salary or wages, including, but not limited to, any bonus or incentive plan, stock rights plan, deferred compensation arrangement, life insurance, stock purchase plan, severance pay plan and any other employee fringe benefit plan. "Consents" means the consents, permits, approvals and authorizations of Governmental Authorities and other Persons necessary to transfer the Purchased Interests to Buyer and to consummate the other transactions contemplated by this Agreement. "Contracts" means all leases, easements, rights-of-way, rights of entry, programming agreements, pole attachment and conduit agreements, customer agreements and other agreements (other than Franchises), written or oral (including any amendments and other modifications thereto), to which arty Falcon Company is" parry or which are hicdi :^ ---- arty Falcon Com _ .r, upon my pan±' "Copyright Act" means the Copyright Act of 1976, as amended and in effect from time to time. "Credit Agreement" means the Credit Agreement dated as of June 30, 1998, as amended, among certain of the Falcon Companies named therein and the Lenders (as defrted therein), including NationsBank, N.A., as Syndication Agent, Bank of America, N.T. & S.A., as Agent, The Chace Manhattan Bank, as Co -Syndication Agent, BankBoston, N.A., as Documentation Agent and Toronto Dominion (Texas) Inc., as Administrative Agent, as the same may be amended and in effect from time to time. owinnr II.Conox 3 e1 "Debt Documents" means the Indenture and the Credit Agreement and the MONY Agreement and all documents or instruments delivered in connection therewith or pursuant thereto, including any placement agreement or registration rights agreement executed and delivered in connection with the issuance of the securities subject to the Indenture. "Employee Plan" means any pension, retirement, profit-sharing, defamed compensation, vacation, severance, bonus, incentive, medical, vision, dental, disability, life insurance or my other employee benefit plan as defined in Section 3(3) of ERISA to which any Falcon Company or any ERISA Affiliate of my Falcon Company contributes or is required to contribute or which any Falcon Company or any such ERISA Affiliate sponsors or maintains. "Encumbrances" means my pledge, claim, mortgage, lien, charge, encumbrance, attachment, exception to or defect in title or other ownership interest or security interest of any kind or nature whatsoever. "Enforceability Exceptions" means the exceptions or limitations to the enforceability of contracts under bankruptcy, insolvency, or similar laws affecting creditors' rights generally or by judicial discretion in the enforcement of equitable remedies and by public policies generally. "Enstar Credit Agreement" means the Credit Agreement dated as of September 30, 1997 among Easter Finance, Banque Paribas, as Administrative Agent, Bank of America National Trust and Savings Association, as Documentation Agent, and the other financial institutions parry thereto, as the same may be amended and in effect from time to time. "Enstar Debt Documents" means the Easter Credit Agreement and all documents or instruments delivered in connection therewith or pursuant thereto. "Environmental Claim" means any written claim, complaint, action, suit, proceeding, investigation or notice, including without limitation any proceeding before any federal, stare or local administrative body by any Person, agent or agency of federal, state or local government alleging potential liability arising out of, based on or resulting from (A) the release or disposal into, or the Presence in the environmem, including, without limitation, the indoor environment, soil, subsurface, surface or groundwater, of my pollutant, contaminant, waste, toxic substance, hazardous substance, petmleem or petroleum derivative at any iVUatiun, whether or not owned by the Falcon Companies, or (B) circumstances forming the basis of my violation, or alleged violation, of my Environmental Law. "Environmental law" means any and all federal, state or local laws, statues, miss, regulations, ordinances, orders, decrees or other binding obligations (A) related to releases or threatened releases of my Hazardous Substance to soil, surface water, groundwater, air or any other environmental media; (B) governing the use, treatment, storage, disposal, transport, or handling of Hazardous Substance; or (C) related to the protection of the environment and human health. Such L-nvimnmental Laws shall include, but are not limited to, RCRA, CERCLA, EPCRA, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act. the Toxic Substances Control Act, the Endangered Species Act. and say other federal, state or local laws, statutes, ordinances, rules, nnllaIlNla%aRrrrON orders, permit conditions, licenses or any terms or provisions thereof related to clauses (A), (B), or (C) above. "Equity Interests" means any and all shares, interests, or other equivalent interests (however designated) in the equity of any Person, including capital stock, partnership interests and membership interests, and including any rights, options or warrants with respect thereto. "Equivalent Subscribers" means, with respect to any System, as of any date ofdetennination, the sum of. (A) the number of Basic Subscribers served by such System as of such date; (B) the number of Basic Subscribers represented by the Commercial Bulk Subscribers served by such System as of such date, which number of Commercial Bulk Subscribers shall be calculated by dividing (1) the monthly billings attribumble to such System's Commercial Bulk Subscribers for full basic cable service provided by such System for the calendar month immediately preceding the dam on which such calculation is made, by (2) the full, non-discounted monthly rate charged by such System for full basic cable service (excluding pass-through charges for sales was, line-itemized franchise fees, fees charged by the FCC and other similar line-itemized charges); and (C) the number of Basic Subscribers represented by the Residential Bulk Subscribers served by such System as of such date, which number of Residential Bulk Subscribers shall be calculated by determining the number of individual dwelling units in such Residential Bulk Subscriber (e.g., for an apartment building, the number of individual apartments in such building)as of such date. For purposes of the foregoing, monthly billings shall exclude billings for a la carte or optional service tiers and for pmmu m services, pass-through charges for sales taxes, line-itemized franchise fees, fees charged by the FCC and other similar line-itemized charges, and nonrecurring charges or credits which include those relating to installation, connection, relocation and disconnection fees and miscellaneous rental charges for equipment such as remote control devices and converters. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations thereunder, as amended and in effect from time to time. "ERISA Affiliate" means a trade or business affiliated within the meaning of Sections 414(b), (c) or (m) of the Code. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the Hiles and agdadOnS Ofttc SEC pmvwlgaicd'lrcmundeq as in effect -von time to tine. "Exchange Agreement" means the Exchange Agreement by and among the parties named therein, containing the provisions set forth in Exhibit E hereto and such other provisions as contemplated in Section 6.6, which agreement shall be executed and delivered on the Closing Date. "Falcon Companies" means, collectively, the companies listed on Schedule I.ltal hereto, each of which may be referred to herein individually as a "Falcon Company," and specifically excludes Ensor and Eason Finance and the other Ensmr partnerships listed on Schedule 4.4, Adlink, and all other Investment Persons. MIgrLr1EVotImON "Falcon's Disclosure Schedules" means the Disclosure Schedules referred to in Sections 3, 4 and 6.1 of this Agreement and attached to this Agreement. "FCC" means the Federal Communications Commission, or any successor agency thereof. "FCC Licenses" means any domestic satellite, business radio or other Licenses issued by the FCC with respect to the Systems. "FCC Regulations" means the rules, regulations and published policies and decisions of the FCC promulgated by the FCC with respect to the Cable Act, as in effect from time to time. "FFl" means Falcon First, Inc. "Franchise" means any cable television franchise and related agreements, ordinances, permits, instruments or other authorizations issued or granted to a Falcon Company by any Franchising Authority, including all amendments thereto and renewals or modifications thereof, authorizing the construction or operation of a cable television system. "Franchise Area" means any geographic area in which a Falcon Company is authorized to provide cable television service pursuant to a Franchise (including any area pursuant to which a Falcon Company is operating under an expired Franchise) or otherwise provides cable television service for which area a Franchise is being negotiated or is not required pursuant to applicable Legal Requirements. "Franchising Authorities" means all Governmental Authorities that have issued or granted any Franchises relating to the operation ofa System. "GAAP" means generally accepted accounting principles as in effect in the United States from time to time. "Governmental Authority" means any federal, state, or local governmental authority or instrumentality, including any court, Tribunal or administrative or regulatory agency, department, bureau, commission or board. "Hazardous Substance" means any substance, hazardous material, or other substance or compound regulated under Environmental Laws, including, without limitation, petroleum or any refined product or fraction or derivative thereof. "Headquarters Employees" means the employees of the Falcon Companies set forth in Schedule I.I(b). less any such employe" who are no longer employed by the Falcon Companies at the Closing (other than as a result of the transactions contemplated by this Agreement), plus any employees hired in the ordinary course of business to replace any such Headquarters Employees. ocoimruscxscunon 6 SSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the regulations promulgated by the Federal Trade Commission with respect thereto, as amended and in effect from time to time. "Indebtedness" of any Person means, without duplication, (A) all indebtedness for borrowed money; (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables and accrued liabilities entered into in the ordinary course of business on ordinary terms); (C) all non -contingent reimbursement or payment obligations with respect to surety instruments; (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to property acquired by the Person (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property); (F) all capitalized lease obligations; (G) all net obligations with respect to swap or interest rate hedge Contracts; (14) all indebtedness referred to in clauses (A) through (G) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; and (1) all guaranty obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; provided, however, that "Indebtedness" shall not include any obligations such as letters of credit, surety bonds or performance bonds or similar obligations entered into in the ordinary course of business. "Indenture" means the Indenture dated as of April 3, 1996 among FHGLP (and assumed by Falcon) and Falcon Funding Corporation and United States Trust Company of New York, as Trustee, as the same may be amended and in effect from time to time. "Intangibles" means all copyrights, trademarks, trade names, service marks, service names, patents, permits, proprietary information, technical information and data, machinery and equipment warranties, and other similar intangible property rights and interests (which shall in no event include Franchises, Licenses or Contracts) issued to or owned by any of the Falcon Companies. "Knowledge" means the actual knowledge of the persons listed in Schedule I. Ito) with respect to Buyer and the actual knowledge of the persons listed in Schedule I.1M with respect to Falcon. "Legal Restrictions" means restrictions on transfer arising under the securities laws, the Cable Act, FCC Regulations, the Franchises and the Licenses. "Legal Requirements" means applicable common law and any applicable statute, permit, ordinance, code or other law, mle, regulation, order. technical or other standard, requirement or procedure enacted, adopted, promulgated or applied by any Governmental Authority (including the FCC), including any applicable order, decree or judgment which may have been handed down, adopted or imposed by any Governmental Authority, all as in effect from time to time. orotnmaeumma+ 7 "Licenses" means all domestic satellite, business radio and other FCC Licenses, and all other Iiceaus, authorizations and permits issued by any Governmental Authority that are held by a Falcon Company in the business and operations of the Systems, excluding the Franchises. "Loss" means any claim, losses, liabilities, damages, penalties, costs and expenses (excluding any and all consequential, incidental and special damages). "Material Adverse Effect" means a material adverse effect on the business, results of operations, assets, liabilities or financial condition of the Falcon Companies, taken as a whole or the Systems, taken as a whole, but without giving effect to any effect resulting from (i) changes in conditions (including economic conditions, Rate Regulatory Matters and other federal or sate governmental actions, proposed or enacted legislation or proposed or enacted regulations) that are applicable to the economy or the cable television industry in general on a national, regional or sate basis or (ii) any changes in competition affecting the business of the Falcon Companies. "Material Contract" means any Contract that requires payments by a Falcon Company in the aggregate of more than $150,000 per year, any Contract containing a noncompete covenant binding on any of the Falcon Companies, any Contract relating to the business of providing Internet access or telephony services, any Contract relating to a pending purchase or sale of cable television systems, and any partnership agreement, limited liability operating agreement or similar agreement pursuant to which any Falcon Company has made an investment in an Investment Person, but "Material Contract" specifically excludes all subscription agreements with customers (including, multiple dwelling unit agreements and Contracts with Bulk Subscribers), pole attachment agreements and conduit agreements, and construction contracts. "Material FCC Consent" means any Consent of the FCC that is necessary for the transfer of control to Buyer in connection with the consummation of the transactions contemplated by this Agreement with respect to the Licenses identified in Schedule 1.1(e). "MONY Agreement" means the Now purchase and Exchange Agreement dated as of October 21,1991, among Falcon Telecable, a California Limited Partnership, AUER & CO., and J. Romeo & Co., relating to the 11.56010 Series A Subordinated Notes due March 31, 2001 and 11.56% Series B Subordinated Notes due March 31, 2001, as the same may be amended and in effect frnm time to time. "MONY Notes" means the Notes issued pursuant to the MONY Agreement. "Nathanson Agreement" shall mean the agreement relating to the appointment of Marc Nathanson as ViceChainamt ofChaner and as a director of my public entity formed by Charter and related items relating to such appointment, including office space and staff assistance for Mr. Nathanson, that has been entered into concurrently with the execution of this Agreement "Organizational Documents" means, with respect to any Person (other than an individual), the articles or certificate of incorporation, bylaws, certificate of limited partnership, partnership oroinnmrt¢mmou agreement, certificate of formation, limited liability company operating agreement, and all other organizational documents of such Person. "Permitted Encumbrances" means each of the following; (A) liens for current taxes and other governmental charges that are not yet due and payable; (B) New for nixes, assessments, governmental charges or levies, or claims the non-payment of which is being diligently contested in good faith or New arising out ofjudgments or awards against the Falcon Companies with respect to which at the time there shall be a prosecution for appeal or there shall be a proceeding to review or the time limit has not yet ma for such an appeal or review with respect to such judgment or award; provided that with respect to the foregoing New in this clause (B), adequate reserves shall have been set aside on the Falcon Companies books, and no foreclosure, distraint, sale or similar proceedings shall have been commenced with respect thereto that remain unstayed for a period of 60 days after thea commencement; (C) liens of carriers, warehousemen, mechanics, laborers, and materialmen and other similar statutory liens incurred in the ordinary course of business for sums not yet due or being diligently contested in good faith, and for which adequate reserves have been set aside on the Falcon Companies' books; (D) liens intoned in the ordinary course of business in con tecdon with workers compensation and unemployment insurance or similar laws; (E) statutory landlords' liens; (hj with respect to the Real Property, leases, easements, rights to access, rights-of-- way, mineral rights or other similar reservations and restrictions, defects of title, which are either of record or set forth in Schedule 3.9 or in the deeds or leases to such Real Property or which, either individually or in the aggregate, do not materially and adversely affect or interfere with the ownership or use of such Real Property in the business and operation of the Systems as presently conducted; (G) Encumbrances arising under or in respect of the Senior Debt and the Credit Agreement and the Enstar Credit Agreement and the documents and instruments delivered in connection therewith or pursuant thereto; and (ff) any other claims or encumbrances that are described in Schedule 3.9 and that relate to liabilities and obligations that are to he discharged in full at the Closing or that will be removed prior to or at Closing. "Person" means an individual, corporation, association, partnership, joint venture, bust, estate, limited liability company, limited liability partnership, Governmental Authority, or other entity or organization. "Pre -Closing Tax Period" means any Tax period (or portion thereof) ending on or before the Closing Date. "Put Agreement" means the Put Agreement by and among the patties named therein, substantially in the form of Exhibit B hereto, which agreement shall be executed and delivered on the Closing Date. "Rate Regulatory Matter" means, with respect to any cable television system, any matter or any effect on such system or the business or operations thereof, arising out of or related to the Cable Act, any FCC Regulations heretofore adopted thereunder, or any other present or future Legal Requirement dealing with, limiting or affecting the rates which can be charged by cable television systems to thea customers (whether for programming, equipment, installation, service or otherwise). r':�lassrsrla'rs . "Real Property" means all of the fee and leasehold estates that are owned or held by any of the Falcon Companies and used or held for use in the business or operations of the Systems, and, to the extent of the interest title, and rights of the Falcon Companies in the following: buildings and other improvements thereon, easements, licenses, rights to access, rights-of-way, and other real property interests that are owned or held by any of the Falcon Companies and used or held for use in the business or operations of the Systems, plus in each case such additions thereto and less such deletions therefrom arising between the data hereof and the Closing Date in accordance with this Agreement. "Released Parties" means, collectively, Sellers and thew Affiliates and their respective officers, directors, shareholders, members, partners, employees and agents. "Registration Rights Agreement" means the Registration Rights Agreement by and among the parties named therein, substantially in the form of Exhibit C hereto, which agreement shall be executed and delivered at the time contemplated in such agreement. "Residential Bulk Subscriber' means a Bulk Subscriber that is a residential bulk account, such as an apartment, condominium or nailer park, as reflected in the records of the Falcon Companies. "SEC" means the U.S. Securities and Exchange Commission or any successor agency thereto. "Securities Act" means the SecuritietAct of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder, as in effect from time to time. "Senior Debentures" means the Series A and Series B 8.3 75%Senior Debentures due 2010 issued by FHGLP (and assumed by Falcon) and Falcon Funding Corporation. "Senior Debentures Amount" means the aggregate principal amount, plus accrued and unpaid interest, outstanding in respect of the Senior Debentures as of the Closing Date. "Senior Debt" means the outstanding indebtedness of the Falcon Companies under the Credit AFrccroca,. "Senior Debt Amount" means the aggregate principal amount, plus accrued and unpaid interest, outstanding in respect of the Senior Debt pursuant to the Credit Agreement as of the Closing Date. "Senior Discount Debentures" means the Series A and Series B 9.285% Senior Discount Debentures due 2010 issued by FHGLP (and assumed by Falcon) and Falcon Funding Corporation. "Senior Discount Debentures Accreted Value" means the Accreted Value (as defined in the Indenurre) of the Senior Discount Debentures as of the Closing Date. ocoIn Mcunou 10 j "Subscriber" means any Person to whom any Falcon Company provides cable television programming orotherservice through the Systems into a single household, a multiple dwelling unit, a hotel or motel unit, a commercial business or any other real property improvement. "Subsidiary" means, with respect to any Person, any other Person of which the outstanding voting Equity Interests sufficient to elect at least a majority of its board of directors or other goveming body (or, if there are no such voting interests, of which 50% or more of the Equity Interests) are owned (beneficially or otherwise) directly or indirectly by such first Person or any Subsidiary thereof. "Systems" means the cable television systems owned and operated by any Falcon Company or any combination of any of them, each of which may be referred to herein individually as a "System," but excluding the cable television systems owned, operated or managed, directly or indirectly, by Enstar and the other Investment Persons. "Tangible Personal Property" means all of the equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, converters, spare parts, and other tangible personal property which are owned or leased by any of the Falcon Companies and used or held for use in the conduct of the business or operations of the Systems, plus such additions thereto and less such deletions therefrom arising between the date hereof and the Closing Date in accordance with this Agreement. "Tax" means my and all taxes, fees, levies, dmies, tariffs, imposts and other charges of any kind imposed by my government or taxing authority, including: federal, state, local, or foreign gross income, gross receipts, net income, ad valorem, value added, possessory interest, alternative or add-on minimum, windfall profits, severance, property, production, sales, use, license, excise, franchise, capital, stamp, occupation, premium, environmental, transfer, payroll, employment, withholding, or other taxes, charges, fees, liens, customs, duties, licenses or other governmental assessments, together with my interest, additions, or penalties with respect thereto and my interest in respect of such additions or penalties, but excluding Franchise fees, FCC payments and fees, and copyright payments and fees. "Tax Return" mems my tax return, declaration of estimated tax, tax report or other tax statement, or my other similar filing, including my schedule or attachment thereto, and including any Yoncri.mcra .draws Nu4vd w be submined to any uovemmental Authority with respect to my Tax. "TCI Systems" means the Systems contributed to the Falcon Companies by TO pursuant to the Contribution and Purchase Agreement referred to in the Amended and Restated Agreement of Limited Partnership of Falcon dated as of December 30,1997, as amended. "Transaction Documents" means this Agreement, the Adjustment Escrow Agreement (if applicable), the Put Agreement, the Registration Rights Agreement, the Exchange Agreement, the Charter LLC Operating Agreement, the Amended Falcon Partnership Agreement, and the other documents, agreements, certificates and other iYamemenls to be executed, delivered and performed by the parties in connection with the transactions contemplated by this Agreement MoilleAExEComON "Transferable Franchise Arca" means any Franchise Area with respect to which (A) any Consent necessary under a Franchise (including an expired Franchise pursuant to which a Falcon Company is operating) in connection with the consummation of the transactions contemplated by this Agreement shall have been obtained or shall have been deemed obtained by operation of law in accordance with the provisions of the Cable Act, or (B) no Consent is necessary under a Franchise in connection with the consummation of the transactions contemplated by this Agreement, provided that, with respect to any expired Franchise for which, as of the date hereof, the Franchising Authority has not granted to the applicable Falcon Company continuing operation authority and the Franchise Area serves greater than 350 Subscribers and pursuant to which Consent was not required prior to its expiration, a me and complete list of which is set forth on Schedule 1.1(1), the corresponding Franchise Area shall not be a Transferable Franchise Area unless and until the applicable Franchising Authority has either (i) consented to the consummation of the transactions contemplated by this Agreement, (ii) renewed such Franchise, or (iii) granted to the applicable Falcon Company continuing operating authority to the effect that such Falcon Company has authority to operate under such Franchise until such time as a fuel decision has been made with respect to the renewal of such Franchise, such consent, renewal or continuing operating authority being referred to as a "Designated Consent'), or (C) no Franchise is required to provide cable television service pursuant to applicable Legal Requirements, which Franchise Areas referred to in this clause (C) me listed on Schedule 3.8, or (D) with respect to the Franchises marked with an asterisk on Schedule 3.8 the applicable Franchising Authority has either (i) evidenced its acknowledgment and approval of the consummation of the transactions contemplated by this Agreement, or (ii) has not requested additional information from Falcon or Buyer regarding such transactions within 30 days of receiving the notification referred to in Section 6.4(h). "Upset Date" means November 30, 2000, subject to extension as provided in Section S.I(a)(3) and 8.1(a)(4). 1.2 Terms Defined Elsewhere in this Asamingnt. For purposes of this Agreement, and in addition to (i) the definitions set forth in the first paragraph hereof and in Section 1.1, and (ii) certain defined terms that are used solely within the section in which they are defined, the following terms have the meanings set forth in the sections indicated: jam Sectio Admsu—hit Esuow. wnvmt Section 2.5(a)(2) Adlird: Recital A Aggregate Consideration Section 2.3(a) Allocation Agreements Sation6.10(h) Allocation Notice Section2.1(b) Antitrust Division Section 6.5 Amended Falcon partnership Agreement Section 6.6(c) Assumed Liabilities Section 2.2(a) r orninnne execunon 12 Capital Expenditure Budget Cause Charter Allocation Agreement Chatter Corporate Subsidiary Cash Consideration Charter Financial Statements Closing Cash Payment Closing Equivalent Subscribers Closing Net Liabilities Closing Payment Confidentiality Agreement Contributed Interest Current Assets Current Liabilities Designated Consent DOL Ensmr Enstar Finance Equity Consideration Equity Value Falcon 401(k) Plan Fnlcnn Allocation Agreement Falcon Financial Statements Fee Properties Final Closing Statement FfC Inventory Investment Perron Minimum Contributed Interest ocownrssaxecurwu 13 Section 3.23 Section 6.9(c) Section6.10(h) Section 6.10(h) Section 2.3 Section 5.9(a) Section 2.5 Section 2A(a) Section 2A(b) Section2.5(b) Section 6.2(a) Section 2.1(b) Section 2A(b)(2) Section 2.4(6)(3) Definition of Transferable Franchise Area Section 3.13(d)(ix) Recital A Recital A Section2.1(b) Section 2.3(6) Section 6.9(g) S.ctlnn 6.Ivla) Section 3.5(a) Section 3.9 Section 2.6(a) Section 6.5 Section 3.19 Section 3.3(a) Section2.1(b) Net Closing Payment Section2.5(b) NYNEX Litigation Section2.1(c) Options Section 8.2(h) Pending Acquisitions Section 6.1(e)(3) Preliminary Closing Statement Section 2.5(a) Preliminary Dispute Notice Section 2.5(a) Purchased Interests Section 2.1 Referee Section 2.5(a)(1) Tax Partnership Section 3.12(b)(9) Transferred Headquarters Employees Section 6.9(b) Working Capital Section2A(b)(1) Year 2000 Matters Section 3.22 Year 2000 Plan Section 3.22 1.3 Rules of Construction. Words used in this Agreement, regardless of the gender and number specifically used, shall be deemed and construed to include any other gender and any otter number as the context requires. As used in this Agreement, the word "including" is not limiting, and the word "or' is not exclusive. Except as specifically otherwise provided in this Agreement in a particular Instance, a reference to a Section is a reference to a Section of this Agreement, a reference to an Exhibit is a reference to an Exhibit to this Agreement, and the terms "hereof," "herein," and other like terms refer to this Agreement as a whole, including the Disclosure Schedules and the Exhibits alas Agreement, and not solely to any particular part of this Agreement. The descriptive headings in this Agreement are inserted for convenience of reference only and are not intended to be pan of or to affect the meaning or interpretation of this Agreement. SECTION 2 SALE AND PURCHASE OF PURCHASED INTERESTS- CONTRIBUTION OF .ED ^.EREST, ASSUMPTION OF LIABBfFIES CONSIDERATION, 2.1 Acre ti to SII and Buy Pu,cbncd Interests and to Contribute Contrib ted Interest. Subject to the terms and conditions set forth in this Agreement, (a) Sellers hereby agree to sell, transfer, convey and deliver to Buyer at the Closing, and Buyer hereby agrees to purchase at the Closing, the Equity Interests specified below (the "Purchased Interests"), free and clear of all Encumbrances, other than the pledges disclosed on Schedule 4.3 and subject to the Legal Restrictions: (1) fiom M. its entire partnership interest in Falcon; ocovurmsh¢cunou 14 W (2) firm FHGLP, that portion of its partnership interest in Falcon that is not represented by the Contributed Internal; (3) from FC Trust, its entire partnership interest in Falcon Video Communications Investors, L.P.; (4) from FHGL its entire partnership interest in each of Falcon Media Investors Group, a California Limited Partnership, Falcon Community Investors, L.P., Falcon Telecable Investors Group, a California Limited Partnership, and Falcon Investors Group, Ltd. a California Limited Partnership; (5) from FHGLP, all of the capital stock in Enstar and its entire membership interest in Enstar Finance Company, LLC; and (6) from DHN, its entire membership interest in Adlink. (b) FHGLP agrees to contribute to Charter LLC, free and clear of all Encumbrances, other than the pledges disclosed on Schedule 4.3 and subject to the Legal Restrictions, a portion of its partnership interest in Falcon (the "Contributed Interest"). The percentage of FHGLP's partnership interest in Falcon represented by the Contributed Interest shall be set forth in Part I of a written notice delivered to Buyer at least two days prior to Closing substantially in the form set forth in Exhibit F (the "Allocation Notice"). In exchange for such contribution to Charter LLC, FHGLP shall receive Units in Chaser LLC as provided in the Charter LLC Operating Agreement (the "Equity Consideration"). The Contributed Interest shall not be less than 44.5% of FHGLP's partnership interest in Falcon (the "Minimum Contributed Interest") and it shall not be greater than that percentage of FHGLP's partnership interest in Falcon that would cause the Equity Value to equal Five Hundred Fifty Million Dollars ($550,000,000) provided Wever (i) if receipt of the Equity Consideration may result in Taxes being recognized by the equity owners of FHGLP, as reasonably determined by counsel to FHGLP, then FHGLP may elect to contribute to Chaser LLC a portion of its partnership interest in Falcon that is less than the Minimum Contributed Interest, or may elect to not contribute any portion of its partnership interest in Falcon to Charter LLC, in which event FHGLP's entire partnership interest in Falcon (or the portion not so contributed) shall be sold to Buyer pursuant to Section 2.1(a) hereof and otherwise treated as a Purchased Interest hereunder, (it) ifprior to the Closing Buyer, Charter LLC, or Charter Holdings takes an action (other than dispositions of obsolete equipment or other equipment deemed W be unnecessary in the ordinary operations of Charter Holdings' business) that results in a reduction in the assets ufChartar LLC or Chaser Holdings, then (in addition to the right of FHGLP and Buyer to mutually agree to an appropriate adjustment to the number of units in Charter LLC received by FHGLP as set forth in Exhibit D) FHGLP may elect not to contribute my portion of its partnership interest in Falcon to Charter LLC, in which event FHGLP's entire partnership interest in Falcon shall be sold to Buyer pursuant to Section 2.1(a) hereof and otherwise treated as a Purchased Interest hereunder; and (iii) if FHGLP makes the election to receive a cash payment pursuant to Section 6.6(c) hereof, FHGLP's entire partnership interest in Falcon shall be sold to Buyer pursuant to =1421121 aracunou Section 2.1(a) hereof and otherwise treated as a Purchased Interest hereunder. If the status or qualification of the recipient of the Equity Consideration from FHGLP would cause the issuance of the Equity Consideration hereunder to require public registration of the Equity Consideration, as reasonably delemrined by Buyer, Buyer may elect to require FHGLP to not distribute the Equity Consideration to such recipient. (c) FHGLP hereby agrees to assign or cause to be assigned to Buyer at the Closing all of its rights and interest in Cele No. 13CI93800, Superior Cow of the State of California, County of Los Angeles, Falcon Britannia, L.P. and Camelot Cable, Inc. v. NYNEX Corporation, NYNEX U.K. Telephone and Cable T.V. Holding Company Limited, and Cable & Wireless Communications plc, and all related rights and claims (the "NYNEX Litigation"). (d) Subject to the terms and conditions set forth in Section 6.4(t) and (Itis Agreement, FHGLP and TO hereby agree to cause 1000% of the joint venture interests in Pacific Microwave Joint Vcnture to be assigned to Falcon at or prior to the Closing. 2.2 assumption fObligations- 6ff t nPaim bin Agreement ofFal (a) In consideration of the sale of the Purchased Interests and the contribution of the Contributed Interest, concurrently with the Closing, Buyer shall assume and be responsible for (and shall indemnify and hold Sellers harmless from and against) all obligations and liabilities associated with the Purchased Interests purchased by Buyer and the Contributed Interest contributed to Charter LLC by FHGLP, whether such obligations and liabilities arose prior to Closing or arise after the Closing, including (and notwithstanding any provision of applicable law to the contrary) all obligations and liabilities arising out of the ownership of a general parmcrship interest in any Falcon Company (collectively, the "Assumed Liabilities"), it being the intent of rhe paries that Sellers be protected against liabilities of the Falcon Companies as if the Sellers were stockholders in a corporation or members in a limited liability company; provided that Buyer shall not be deemed to have assumed directly any obligations and liabilities of the Falcon Companies vis-a-vis any Person that is not a party to this Agreement, and no such Person shall have any greater rights vis-a- vis Buyer or any of the Falcon Companies than as a result of Buyer's and the Falcon Companies, status as a general partner of the Falcon Companies. (o) It is understood and agreed by Buyer that from and after the Closing none of Sellers or thein partners or Shareholders or TCI Communications, Inc. (or any successor thereto) shall have any further rights (subject to and without limiting thein indemnification and exculpation rights as provided in Section 6.13), obligations or responsibilities of my nature whatsoever pursuant to the provisions of the Amended and Restated Agreement of Limited Partnership of Falcon Communications, L.P. dated as of December 30, 1997, as amended, or the Contribution and Purchase Agreement dated as of December 30, 1997 among Falcon, FHGLP, TO and certain other Parties, as amended, irrespective of when such obligations or responsibilities may have arisen or be deemed to have arisen. MI=3 eaEcmw.0 16 2.3 Consideration for Purchased Interests and Contributed Int est. (a) The consideration for the Purchased Interests and the Contributed Interest shall be Three Billion Four Hundred Eighty -One Million Dollars ($3,481,000,000) in the aggregate, subject to adjustment in accordance with Sections 2.4, 2.5 and 2.6 (the "Aggregate Consideration"). The Aggregate Consideration shall be determined by Falcon based on the Preliminary Closing Statement and set forth in Part 11 of the Allocation Notice. The Buyer shall pay a portion of the Aggregate Consideration in cash (the "Cash Consideration"), and the balance of the Aggregate Consideration shall be represented by the Equity Consideration delivered to FHGLP pursuant to Section 2.1(b). The value of the Aggregate Consideration shall be allocated among the Sellers as determined by the Sellers and set forth in Part ID of the Allocation Notice. (b) The amount of the Cash Consideration shall equal the Aggregate Considemtion reduced by the "Equity Value", which shall equal the product of (i) the value of the Aggregate Consideration allocated to FHGLP in Pan III of the Allocation Notice, and (ii) the percentage of FHGLP's partnership interest in Falcon that is contributed to Charter LLC pursuant to Section 2.l(b). The Equity Value shall be set forth in Part IV of the Allocation Notice. (c) Each Seller acknowledges that upon payment of the Aggregate Consideration to the accounts or persons designated by the Sellers in accordance with this Agreement, Buyer shall have no additional liability or obligation to the Sellers with respect to the allocation of the Aggregate Consideration among the Purchased Interests and the Contributed Interest and the Sellers, and each Seller agrees to indemnify and hold Buyer harmless from and against any claim by a Seller (or a partner, shareholder or member of such Seller) arising out of the allocation of the Aggregate Consideration. (d) The Sellers and Buyer agree to allocate the Cash Consideration among the Sellers of the Purchased interests as follows: (1) $1 shall be paid to FHGLP for all of its capital stock in Emu, (2) $1 shag be paid to DHN for its entire membership interest in Adlink, and (3) the balance of the Cash Consideration allocated to each Seller of the other Purchased Interests shall equal the sum of(x) the cash portion ofthe Net Closing Payment paid to such Seller as set forth in Part V ofthe Allocation Notice, plus (y) the portion ofthe Adjustment Escrow Amount paid to such Seller pursuant to Section 2.6(b)(1)(B) hereof(ifany). 2.4 Adiustments. (a) Closing Equivalent Subscribers. The Aggregate Consideration shall be decreased by the number, if any, by which the number of Closing Equivalent Subscribers is less than 979,700 multiplied by $3,516. For purposes of this Agreement, "Closing Equivalent IXtl.=--EMECnnON Subscribers" means the total number of Equivalent Subscribers for all of the Systems as of the Closing Date, subject to the provisions of Sections 2.4(c) and 6.1(c)(3). (b) Closlnn Net Liabilities. The Aggregate Consideration shall be decreased by the amount of the Closing Net Liabilities. For purposes of this Agreement,"Closing Net Liabilities" means: (i) the Senior Discount Debentures Accreted Value; plus (ii) the Senior Debentures Amount; plus (iii) the Senior Debt Amount; plus (iv) the principal meant and any accrued but unpaid interest as of the Adjustment Time in respect of my other indebtedness for borrowed money (not included in the foregoing clauses (b)(i), (ii) and (iii) of this Section 2.4), if any, of the Falcon Companies as of the Adjustment Time (in each case of the foregoing clauses (b)(i), (ii), (iii) and (iv) of this Section 2.4, prior to giving effect to any repayment of such indebtedness by Buyer at the Closing); plus (v) the absolute value of Working Capital if such number is less than sero; plus (vi) expenses of the Falcon Companies relating to the consummation of the transactions contemplated by this Agreement, including fees and expenses of attorneys, accountants, financial advisors and broker fees, if such fees and expenses are paid after the Closing Date and were not otherwise reflected as a Current Liability or Closing Net Liability in the computation of Aggregate Consideration or paid by the Sellers, but excluding any expenses that Buyer agrees to pay or is obligated to pay pursuant to this Agreement; plus (vii) without limiting Falcon's obligations under Section 6.9, all amounts to be paid by Falcon or the Falcon Companies at or before the Closing pursuant to Section 6.9(h) if such sunnumc are not so paid on or prior to the Closing Date and aro not otherwise reflected as a Current Liability or Closing Net -' Liability in the computation of Aggregate Consideration or paid by the Sellers; minus (viii) one-half of the amount paid by Falcon at or before the Closing in respect of severance to the Headquarters Employees pursuant to Section 6.9(b), provided that the maximum adjustment pursuant to this clause (viii) shall be 54,500,000 and Buyer shall have no other obligation in respect of such payments other than the adjustment provided in this clause (viii); minus (ix) Working Capital if such number is greater than zem; minus 1 r KVI/L`SLEENECVnON lg of (x) the amount provided for in Section 6.1(c)(3) (Pending Acquisitions); minus (xi) the $2,500,000 investment made by Falcon Community Cable, L.P. in the Bend, Oregon joint venture; minus (xii) that portion of the capital expenditures provided for in Section 6.1(b)(1) (Capital Expenditures). (1) Subject to the other provisions of this Section 2.4(b), "Working Capital' means Current Assets as of the Adjustment Time minus Current Liabilities as of the Adjustment Time. (2) Subject to the other provisions of this Section 2.4(b), "Correct Assets' means the total current assets of the Falcon Companies as defined for purposes of GAAP, and prepayments in respect of performance bonds and long term rights of way with a maturity in excess of one year, computed for the Falcon Companies as of the Adjustment Time on a consolidated basis and without duplication in accordance with GAAP. (3) Subject to the other provisions of this Section 2A(b) and Section 3.12(a), "Current Liabilities' means the total current liabilities of the Falcon Companies as defined for purposes of GAAP, including vacation pay and sick pay, computed for the Falcon Companies as of the Adjustment Time on a consolidated basis and without duplication in accordance with GAAP; provided, however, that notwithstanding GAAP, or anything to the contrary in this Agreement, Current Liabilities shall not include and no adjustment to the Aggregate Consideration shall be made in respect of. (A) any amount payable in respect of or pursuant to the Debt Documents or any indebtedness. for borrowed money referred to in clause (b)(iv) above; (B) any prepayment penalty or premium, breakage costs, change of control penalty or premium or other payment arising out of or resulting from the consummation of the transactions contemplated by this Agreement, including the termination of any Contract, under or pursuant to the Debt Documents or any other Contract or other obligation to which any of the Falcon Companies is a party or by which it may be bound, including any swap or interest rate hedge Contract; (C) any Taxes to be paid by the Buyer pursuant to Section 6.10; (D) any amounts paid or to be paid by Falcon or the Falcon Companies in respect of severance to the Headquarters Employees pursuant to the provisions of Section 6.9 herrnfexcent a� pnvided in Lhe p ^>d+^ _... nftFls Sectio.. ^t.): and ku) amr' liability that is otherwise included in Closing Net Liabilities. (c) Right ofFirst Refusal Sal e.Ifprior to the Closing hereunder any Franchising Authority notifies any Falcon Company or Buyer in writing of such Franchising Authority's intent to purchase the assets of my System (or portion thereof) that serves the Franchise Area covered by the Franchise granted by such Franchising Authority pursuant to any right of first refusal or similar right in such Franchise that is triggered by the consummation of die purchase and sale of the Purchased Interests and contribution ofthe Contributed Interest, and the Franchising Authority does not rescind such notice prior to the Closing, then (1) at the Closing the amount of the Aggregate Consideration shall be reduced by an amount equal to the product of (A) the number of Closing Equivalent Subscribers represented by the Subscribers served in such Franchise Area (determined as ifthe effeefive time of the consummation ofrhe respective sale of such system to the Franchising OCOm] FJORCMON 19 Authority were the Adjustment Time herewrder) multiplied by (B) $3,516, and the target number of 979,700 Closing Equivalent Subscribers referred to in Section 2.4(s) shall be reduced by the number of Closing Equivalent Subscribers referred to in clause (A) above; (2) upon consummation of such purchase by the Franchising Authority prior to the date the Aggregate Consideration is finally determined pursuant to Section 2.6(a), Buyer shall promptly remit (or cause the Falcon Companies to remit) to Sellers the aggregate amount of sale proceeds received by Buyer or the Falcon Companies; and (3) if the Aggregate Consideration is finally detennined pursuant to Section 2.6(a) prior to the consummation of such purchase by the Franchising Authority, Buyer shall pay to the Sellers in cash the amount by which the Aggregate Consideration was reduced pursuant to clause (1) above within three business days after the date on which the amount of the Aggregate Consideration is finally determined. 2.5 Payments at Closing. (a) No later than ten (10) days prior to the date scheduled for the Closing, Falcon shall prepare and deliver to Buyer a written report (the "Preliminary Closing Statement") setting forth Falcon's estimates of Closing Net Liabilities, Closing Equivalent Subscribers, and the Aggregate Consideration, determined in accordance with Section 2.4. The Preliminary Closing Statement shall be prepared by Falcon in good faith and shall be certified by Falcon to be its good faith estimate of the Closing Net Liabilities, Closing Equivalent Subscribers and the Aggregate Consideration as of the date thereof. Falcon shall make available to Buyer such information as Buyer shall reasonably request relating to the matters ret forth in the Preliminary Closing Statement. If Buyer does not agree with the Closing Net Liabilities, Closing Equivalent Subscribers or Aggregate Consideration set forth in the Preliminary Closing Statement, then on or prior to the third (3rd) day prior to the date scheduled for the Closing, Buyer may deliver to Falcon a written report (the "Preliminary Dispute Notice") setting forth in reasonable detail Buyer's good faith estimates (supported by substantial evidence) of any amount set forth in the Preliminary Closing Statement with which Buyer disagrees. In the case of my such estimated amount set forth in the Preliminary Dispute Notice, Falcon and Buyer shall endeavor in good faith to agree prior to the Closing on the appropriate amount of such estimates to be used in calculating the Closing Payment (as defined below). If Falcon and Buyer do not agree on any such amounts by the business day prior to the date scheduled forthe Closing, Falcon, at its election, may either: (l) Elect to postpone the Closing and retain Price Waterhouse Coopers (Los Angeles, California office) (the "Referee") to make a determination as to the appropriate treaunent forpurposes ofagreeing on estimates to be made at Closing of any amounts under dispute and the Closing shall thereafter take place on the third business day following resolution of such dispute, subject o satisfaction or waiver of all applicable conditions precedent. The Referee shall endeavor to resolve the dispute as promptly as practicable and the Referee's resolution of the dispute shall be final and binding on the parties for purposes of the estimates to be made at Closing; provided, however, that in no event shall such resolution result in (i) amounts less than the amounts therefor (in the case of liabilities) or greater than the amounts therefor (in the case of assets) set forth in the Preliminary Closing Statement or (ii) amounts greater than the amounts therefor (in the case ... of liabilities) or less than the amounts therefor (in the case of assets) act forth in the Preliminary r ocalmwrsaEamou 20 r Dispute Notice. The costs and expenses of the Referee and its services rendered pursuant to this Section 2.5 shall be home one-half by Buyer and one-half by Sellers; or (2) Elea to proceed to Closing and cause Buyer, at the Closing, to deposit an amount in cash equal to the difference (the "Adjustment Escrow Amount") between the Aggregate Consideration, adjusted pursuant to Section 2.4(a) and (b) that would be calculated using the estimates ser forth in the Preliminary Closing Statement (with any changes thereto mutually agreed to by Buyer and Falcon) and the Aggregate Consideration adjusted pursuant to Section 2A(a) and (b) that would be calculated using the estimates set forth in the Preliminary Dispute Notice (with any changes thereto mutually agreed to by Buyer and Falcon), to the Adjustment Escrow Agent, to be held and disbursed in accordance with the terms of the Adjustment Escrow Agreement and Section 2.6. (b) At Closing, Buyer shall pay cash and FHGLP shall receive the Equity Consideration as follows: (1) ifFalcon has made the election in Section 2.5(a)(2) above, Buyer shall pay cash to the Adjustment Escrow Agent in an amount equal to the Adjustment Escrow Amount, such cash to be held by the Adjustment Escrow Agent in escrow on behalf of the parties in accordance with the terms of the Adjustment Escrow Agreement and Section 2.6; (2) Buyer shall pay cash to the Sellers in an aggregate amount equal to the excess of (i) the amount of the Aggregate Consideration pursuant to Section 2.4(a) and (b), as determined pursuant to this Section 2.5 (including as determined pursuant to Section 2.5(a) and as mutually agreed by Buyer and Falcon) over (ii) the sum of (x) the amount of the Equity Value (as set forth in Part IV of the Allocation Notice), and (y) the aggregate amount paid under clause (1), if applicable, to the Adjustment Escrow Agent; and (3) FHGLP shall contribute the Contributed Interest to Charter LLC in exchange for the Equity Consideration. The sum of the cash paid to Sellers pursuant to clause (2) above and the Equity Value represented by the Equity Consideration received by FHGLP pursuant to clause (1) ahovr is referred to as the "Net Closing Payment" and the sum of the Net Closing Payment and the Adjustment Escrow Amount is referred to as the "Closing Payment.'- (c) ayment"(c) None of the Adjustment Escrow Amount will be available for any purpose, other than as described in Section 2.6(b), and the Adjustment Escrow Amount shall not be available to satisfy any other obligations of Sellers under this Agreement or otherwise. 2.6 Post-Closine Post-CIPamml of Aemagate Consideration Ad' un t. (a) Final Closing Statement. Witldn ninety (90) days after the Closing Date, Buyer shall prepare and deliver to FHGLP a written report (the "Final Closing Statement") setting forth Buyer's foal estimates of Closing Net Liabilities, Closing Equivalent Subscribers and the ocanvmaxrcunou 21 Aggregate Consideration, determined in accordance with Section 2.4. The Final Closing Statement shall be prepared by Buyer in good faith and shall be certified by Buyer to he, as of the date prepared, its good faith estimate of the Closing Net Liabilities, Closing Equivalent Subscribers and Aggregate Consideration. Buyer shall allow FHGLP and its agents access at all reasonable times after the Closing Date to copies of the books, records and accounts of the Falcon Companies and make available to FHGLP such information as FHGLP reasonably requests to allow FHGLP to examine the accuracy of the Final Closing Statement. Within thirty (30) days after the date that the Final Closing Statement is delivered by Buyer to FHGLP, FHGLP shall complete its examination thereof and may deliver to Buyer a written report setting forth any proposed adjustments to any amounts set forth in the Final Closing Statement; provided, however, that if Buyer does not comply with its obligations pursuant to the preceding sentence, such thirty (3 0) day period shall ran from the day afterthe data on which Buyer complies with such obligations. After submission of the Final Closing Statement, Buyer shall have no right to raise further adjustments in its favor and after submission of FHGLP's report of any proposed adjustments, FHGLP shall have no right to raise further adjustments in Sellers' favor. If FHGLP notifies Buyer of its acceptance of the amounts set forth in the Final Closing Statement, or if FHGLP fails to deliver its report of any proposed adjustments within the period specified in the second preceding sentence, the amounts set forth in the Final Closing Statement shall be conclusive, final and binding on the patties as of the last day of such period. Buyer and FHGLP shall use good faith efforts to resolve any dispute involving the amounts set forth in the Final Closing Statement. If FHGLP and Buyer fail to agree on any amount set forth in the Final Closing Statement within fifteen (15) days after Buyer receives FHGLP's' report pursuant to this Section 2.6, then FHGLP shall retain the Referee to make the final determination, under the terms of this Agreement, of any amounts under dispute. The Referee shall endeavor to resolve the dispute as promptly as practicable and the Referee's resolution of the dispute shall be final and binding on the parties, and a judgment may be entered thereon in any court of competentjurisdiction; provided that in no event shall such resolution result in (i) amounts less than the amounts therefor (in the case of liabilities) or more than the amounts therefor (in the case of assets) set forth in FHGLP's written report pursuant to this Section 2.6(a) or (ii) amounts greater than the amounts therefor (in the case of liabilities) or less than the amounts therefor (in the case of assets) set forth in the Final Closing Statement. The costs and expenses of the Referee and its services tendered pursuant to this Section 2.6 shall be home one-half by Bu -ver and one-half by Sellers.. (b} Egment OfARUCRate Considepation Ad' t 1. (1) After the meant of the Aggregate Consideration is finally determined pursuant to Section 2.6(a), payments shall be madeas follows: (A) If the amount of the Aggregate Consideration as finally determined pursuant m Section 2.6(a) exceeds the Closing Payment, then within three business days after the date the amount of Aggregate Consideration is finally determined pursuant to Section 2.6(a), (i) Buyer will pay to Sellers in cash the amount of such excess by wire or accounts transfer of immediately available funds to an account or accounts designated by FHGLP by written notice to Buyer and (ii) Buyer and FHGLP will direct the Adjustment Escrow Agent to pay to Sellers in tXx)QMCr E%ECM. 22 cash the Adjustment Escrow Amount, if any, to an account of accounts designated by FHGLP by written notice to the Adjustment Escrow Agent. (B) If the amount of the Closing Payment exceeds the amount of the Aggregate Consideration as finally detemdned pursuant to Section 2.6(a), then within three business days after the date on which the amount of the Aggregate Consideration is finally determined pursuanrto Section 2.6(a), (i) FHGLP will direct the Adjustment Escrow Agent to pay to Buyer in cash the amount of such excess to the went of the Adjustment Escrow Amount, if my, and (ii) if such excess is greater than the amount paid to Buyer from the Adjustment Escrow Amount, Sellers will pay to Buyer in cash the amount of such excess to the extent not paid from the Adjustment Escrow Amount, by wire or accounts transfer of immediately available funds to an account designated by Buyer by written notice to FHGLP. If any portion ofthe Adjustment Escrow Amount, if my, remains after payment to Buyer of any amounts pursuant to the preceding sentence, Buyer and FHOLP will direct the Adjustment Escrow Agent to promptly pay such amounts to Sellers in accordance with the percentage interests set forth in Part VI of the Allocation Notice.. (2) Any mount which becomes payable pursuant to this Section 2.6 will constitute an adjustment to the Purchase Consideration for all purposes. SECTION 3: REPRESENTATIONS AND WARRANTIES OF FALCON Subject to any provisions of this Agreement limiting, qualifying or excluding any of the representations or warranties made herein, and to the disclosures set forth in Falcon's Disclosure Schedules, as such schedules are referenced herein, Falcon hereby represents and warrants to Buyer as set forth in this Section 3. 3.1 Organization and Authority. Each of the Falcon Companies was duly formed and is validly existing and in good standing under the laws of the state of its organization or formation. Each of the Falcon Companies has the requisite partnership, limited liability company or corporate (as the case may be) power and authority to own, lease and operate its properties, to carry on its business in the places where such properties we now owned, leased or operated and in the manner in which such business is now conducted, and, in the case of Falcon, to execute, deliver and perform this Agreement and the other Transaction Documents to which it is a party according to their respective terms. 3.2 Authorization and Binding Obligation. The execution, delivery and performance by Falcon of this Agreement and the other Transaction Documents to which it is a party have been duly authorized by all necessary partnership action on its part. This Agreement and the other Transaction Documents to which Falcon is a party has been duly executed and delivered by Falcon (or in the case of Transaction Documents to be executed and delivered at Closing, when executed and delivered will be duly executed and delivered) and constitute (or, in the case of Transaction Documents to be executed and delivered at Closing, when executed and delivered will constitute) the legal, valid, and binding obligation of Falcon in accordance with their terms, except as the enforceability of this Agreement and such other Transaction Documents may be limited by Enforceability Exceptions. eNVr3UlIa%ECUnoN 23 3.3 Ortumizaticnt Ed 0,grishir, of Falcon Criumanigs. (a) Schedule 3.3 sets forth the time of each Falcon Company, including the jurisdiction of incorporation or formation (as the case may be) of each. Each Falcon Company is duty qualified, validly existing and in good standing as a foreign corporation, partnership or limited liability company, as the case may be, in each jurisdiction listed in Schedule 3.3which me all jurisdictions in which such qualification is required. Except ss disclosed in Schedule 3.3, no Falcon Company, directly or indirectly, owns, of record or beneficially, any outstanding securities or other interest in any Person (each such Person described in Schedule 3.3 other than a company listed on Schedule 1 1(a). an "Investment Person") or has the right or obligation to acquire, any Equity Interests, outstanding securities or other interest in any Person. Except as set forth in Schedule 3.3. the owner of the Equity Interests of each Investment Person owns such Equity Interests free and clear of all Encumbrances, but subject to the Legal Restrictions (except that no representation is made in this Section 3 as to the Purchased Interests held by Sellers). (b) Schedule 3.3 sets forth the record and beneficial owner of each issued and outstanding Equity Interest of each of the Falcon Companies, and the ownership chart of Falcon and the other Falcon Companies included in Schedule 3.3 is true and correct in all material respects. Uponthe Closing, Buyer will acquire, directly or indirectly, beneficial ownership of all of the issued and outstanding Equity Interests of all of the Falcon Companies, tree and clew of all Encumbrances and options to purchase, other than the pledges disclosed in Schedule 3.3 and Encumbrances created by the Buyer and subject to the Legal Restrictions. All of such issued and outstanding Equity Interests of the Falcon Companies have been validly issued, are fully paid and non -assessable and have not been issued in violation of any federal or state securities laws. Except as set forth in Schedule 3.3 the owner of the Equity Interests of each Falcon Company owns such Equity Interests free and clear of all Encumbrances and options to purchase, but subject to the Legal Restrictions (except that no representation is made in this Section 3 as to the Purchased Interests held by Sellers). Except as disclosed in Schedule 3.3, them are no (1) outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings or (2) outstanding stock appreciation, phantom equity or similar rights of my kind to which any Falcon Company is a party or by which my of them is bound obligating such Falcon Company to issue, deliver or sell, or cause to be issued, delivered or sold. aryadditional Fquiry interests of such Falcon Compa^.y or cb gating such Falcon Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. The Falcon Companies have delivered to Buyer complete and correct copies of the Organizational Documents of each Falcon Company as in effect on the date hereof. 3.4 Absence of Conflicting Agreements, C te. Except for the expiration or termination of any applicable waiting period under the HSR Act, or as set forth in Schedule 3.4 or Schedule 3 8 or as would not impair the ability of Falcon to perform its obligations under the Transaction Documents to which it is a party, the execution, delivery and performance by Falcon and Sellers of this Agreement and the other Transaction Documents to which they are a patty (with or without the giving of notice, the lapse of time, or both): (a) do not require any Consent of, declaration to , notice to, or filing with any Governmental Authority or any other Person under any ornimuraaxecmtou 24 Franchise, FCC License or Material Contract; (b) will not conflict with any provision of the Organizational Documents ofany, Falcon Company, each as currently in effect; (c) assuming receipt of all Consents listed in Schedillq3 4 or Schedule 3 8 will not conflict with, in any material way, result in a material breach of, or consdmte a material default under any Legal Requirement to which my Falcon Company is bound; (d) assuming receipt of all Consents listed in Schedule 3.4 or Schedule 3.8 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 Franchise, FCC License, or Material Contract; and (e) assuming receipt of all Consents, will not result in the creation of any Encumbrance upon the Assets or the Purchased Interests. Notwithstanding the foregoing, Falcon makes no representation or warranty regarding any ofthe foregoing that may result from the specific legal or regulatory status of Buyer or its Affiliates or as a result of any other facts that specifically relate to the business or activities in which Buyer or its Affiliates is or proposes to be engaged other than the cable television business. 3.5 Financial Stateroom . (a) Falcon has delivered to Buyer nue and complete copies of the audited consolidated financial statements of Falcon (including the notes thereto) for the year ended December 31, 1998 and the unaudited consolidated financial statements of Falcon for the three months ended March 31, 1999 (collectively, the "Falcon Financial Statements"). (b) The Falcon Financial Statements; (1) have been prepared from the books and records of the Falcon Companies to which they relate; (2) have been prepared in accordance with GAAP consistently applied (except as indicated in the notes thereto and except, in the case of the unaudited Falcon Financial Statements, for the omission of footnotes and changes resulting from customary and recurring yearend adjustments); and (3) subject to the addition of footnotes and changes resulting from customary and retuning year-end adjustments in the case of the unaudited Falcon Financial Statements which in the aggregate are not expected to be material, present fairly in all material respects the financial condition of the Falcon Companies to which they relate as at December 31, 1998, or March 31, 1999, as the case may be, and the results of operations for the period then ended. 3.6 Absencoaf Undisclosed I inhilines. (a) None of the Falcon Companies has any indebtedness, liability or obligation of a type required by GAAP to be reflected on a balance sheet that is not reflected or reserved against in the balance sheet of the Falcon Companies included in the Falcon Financial Statements, other than indebtedness, liabilities and obligations that were incurred in the ordinary course of business after December 31, 1998, or that would not, in the aggregate, reasonably be expected to be material in accordance with GAAP. (b) As of the date hereof, except u provided in or arising pursuant to the loan or credit agreements, notes, bonds, indentures and other agreements and instruments listed in Schedule 3& or under certain of the property leases listed in Schedule 3 8, the Falcon Companies have no Indebtedness. X01WIENE%ECUmal 25 3.7 Absence of Certain Chances. Between December 31, 1998 and the date of this Agreement, except as disclosed in Schedule 3.7 and except for matters occurring after the date hereof that are permitted by the provisions of this Agreement or consented to by Buyer, no Falcon Company has: (a) made any sale, assignment, lease or other transfer of assets other than in the ordinary course of business; (b) issued any note, bond or other debt security or created, incurred, assumed or guaranteed any Indebtedness; (c) made or promised any material increase in the salary or other compensation payable or to become payable to any executive officer or other employee of any Falcon Company other than in the ordinary course of business or as contemplated under any employment or bonus arrangement currently in effect; (d) entered into any transaction, other than transactions entered into in the ordinary course of business, which would be required to be presented in the audited financial statements of the Falcon Companies and the notes thereto prepared in conformity with GAAP, applied in a manner consistent with the past practices of the Falcon Companies relating to the preparation of audited financial statements of the Falcon Companies; (e) amended or terminated any Material Contract, or any material License, agreement or understanding to which any Falcon Company is a party, except in the ordinary course of business; (f) waived or released any material right or claim relating to any Falcon Company or the Systems except in the ordinary course of business; p vr�, however that all material rights or claims related to any Falcon Company or the Systems waived or released between December 31, 1998 and the date of this Agreement are or forth on Schedule 3.7; or (g) entered into an agreement to do any of the things described in the precedina clauses (a) through (f). 3.8 Franchises, Licenses, Material Contracts. Schedule 3.8 contains a list of the Franchises (including the Franchising Authority which granted each Franchise and the stated expiration date of each Franchise), the System to which the Franchise applies, FCC Licenses and Material Contracts in effect on the date hereof, each pending application for a Franchise and a list ofany System or portion thereof owned or operated by the Falcon Company which does not require a Franchise authorizing the installation, construction, development, ownership or operation of the same in such Franchise Area; which list is true, correct and complete. Except as set forth on Schedule 3.8. the Falcon Companies possess all Franchises and FCC Licenses necessary to operate their business as currently conducted. Without material exception, except as set forth on $ hedul U the Falcon Companies possess all other Licenses necessary to operate their business as currently nrelmrtlraNEctmon 26 conducted. Falcon has delivered or made available to Buyer true and complete copies of all Francldsea, FCC Licenses and Material Contracts as in effect on the date hereof. Except as set forth on Schedule 3.8. the Franchises, FCC Licenses and Material Contracts are in full fame and effect (subject to Franchises which have already expired and expiration at the and of their current term, which expired Franchises are identified on Schedule 3.8 together with the approximate number of Subscribers served in the Franchise Areas related to such Franchises) and, subject to such expiration, arrvafid, binding and enforceable upon the Falcon Company that is a party thereto and, to Falcon's Knowledge, the other parties thereto in accordance with their terms, except to the extent such enforceability may be affected by Enforceability Exceptions. Except as disclosed in Schedule 3.8 the Falcon Companies are in compliance with the terns of the Franchises, FCC Licenses and Material Contracts, except for such noncompliance which in the aggregate is immaterial to the Falcon Companies, taken as a whole, or would not prevent the operation of the business of the Falcon ComPaniesas currently conducted, and, as of the date of this Agreement, none of the Falcon Companies has received any written notice from a Franchising Authority, a consultant representing a Franchising Authority, any state cable regulatory authority or the FCC to the effect that any of the Falcon Companies are not currently in compliance with the terms of the Franchise granted by such Franchising Authorityorwith any FCC License. Except as set forth in Schedule 3.8, a valid request for renewal has been timely filed under Section 626(a) of the Cable Act with the proper Franchising Authority with respect to each Franchise that has expired prior to, or will expire within thirty months after, the date of this Agreement. 3.9 Title to and Condition f Real P orty and Tangible Pmgnal Prow Schedule 3,9 will, when delivered to Buyer no later than 60 days after the execution of this Agreement list the street address for all Real Property owned in fee by any of the Falcon Companies as of the date of this Agreement (excluding easements, rights-uf--way, and similar authorizations) (the "I've Properties'). Aone and correct copy of(i)each deed pursuant to which any of the Falcon Companies acquired any Fee Property, any survey and title insurance policies issued to such Falcon Company, (G) any leases under which any Falcon Company is the lessor affecting such Fee Property or (iii) any other easements, tights -of -way, covenants, conditions and restrictions, document or agreement affecting title to such Fee Property (and, in the case of this clause (iii), in the possession ofthe Falcon Companies) will have been delivered or made available to Buyer within 60 days after the execution of this Agreement (or, in the case of deeds, will be made available or delivered to Buyer prior to Closing). Schedule 3.9 will, when delivered to Buyer within 60 days after the --5m, u, this Agreement, list me street address for the material Real Property sites leased by any of the Falcon Companies, as lessee, as of the date of this Agreement and will set form the parties to the applicable lease and anyamendments, supplement or modifications thereto. Exceptasdisclosed in Schedule 3.9: (a) the Falcon Company that owns a fee estate in a Real Property parcel has good and marketable title thereto; (b) the Falcon Company that owns any material item of Tangible Personal Property has good and valid title thereto; (c) the Falcon Company that lenses any material Real Property site has a valid leasehold interest therein (subject to expiration of such lease in accordance with its terms), except to the extent that the failure to have any such valid leasehold interests would not impair the operation of the Systems in any material respect: and (d) the Falcon Company that leases any material item of Tangible Petsonal Properly has a valid leasehold interest therein (subject to expiration of such lease in accordance with its terms), in each case of (a). (b), (c) and (d) above, free and clear of all Encumbrances, other than Permitted Encumbrances and subject r M^ IRSlll1 Fb.CVr10N 27 Y to the Legal Restrictions. Except as disclosed on Schedule 3.9. the Falcon Companies own, lease or otherwise have rights to use all real property (excluding easements, rights-of-way and similar authorizations) and tangible personal property necessary to operate the Systems as presently operated by the Falcon Companies in all material respects. Notwithstanding the express language of this Section 3.9 or as may otherwise be provided in this Agreement, no representation or warranty is being made as in title to the internal wiring, house drops and unrecorded dwelling -unit easements, rights of entry or rights-of-way held or used by the Falcon Companies. 3.10 Intani le . Schedule 3.10 contains a true and correct description and list of the Intangibles (exclusive of those required to be listed in Schedule 3.g), that are owned or leased by any of the Falcon Companies and that are necessary for the conduct of the business or operations of the Systems as currently conducted. Except as to potential copyright liability raising from the performance, exhibition or carriage of my music on the Systems or as disclosed in Schedule 3.10 no Falcon Company is infringing upon any trademarks, trade names, copyrights or similar intellectual property rights of others. 3.11 Information Reeardine the Systems. (a) Subscribers. Schedule 3.11 sets forth the approximate number of Equivalent Subscribers as of the date indicated therein (including the approximate number of Equivalent Subscribers served by each headend) and sets forth a me, complete and correct statement of all Subscribers'rates, tariffs and other charges for cable television and other services provided by any Falcon Company, and a fist ofall free, discount or other promotional service obligations (other than those obligations which are regularly offered or arise in the ordinary course of the business and operations ofthe Falcon Companies and free accounts offered to lessors under Real Property [ewes) of any Falcon Company, with respect to the Systems as ofthe date ofthis Agreement. TheFalcon Companies' billing records are prepared by Cable Services Group, Inc. in accordance with its customary practices. (b) Certain Systems Information Schedule 3.11 sets forth the approximate number of plant miles (aerial and underground) for each headend, the approximate bandwidth capability ofeach headend, the channel lineup for each headend, and the monthly rates charged for each class of service offered by each headend, the stations and signals carried by each headend and the channel position of each such signal and station, which information is nue and correct in all material respects, in each case as of the applicable dates specified therein and subject to any qualifications set forth therein. Except as described in Schedule 3.11 each ofthe respective channel lineups set forth in Schedule 3.11 is capable of being viewed in its entirety by each Subscriber in the applicable System (subject to ordinary course service interruptions). (c) Franchise and FCC Masers. Except as set forth in Schedule 3.11, all reports or other documents, payments or submissions required to be filed by any ofthe Falcon Companies with any of the Franchising Authorities or the FCC have been duly filed and were correct in all material respects when filed. Except as set forth in Schedule 3.11. the Falcon Companies are permitted under all applicable Franchises and FCC Regulations to disuibute the television bmadcast signals distributed by the Systems and to utilize all carrier frequencies generated by die operations owuuransxacunou 28 of the Systems, and are licensed to operate in all material respects all the facilities of the Systems requited by Legal Requirements to be licensed. (d) RRqucit for Sitmal Caniaae. Except for nonduplication and blackout notices received in the ordinary course of business, none of the Falcon Companies has received any FCC order requiring any System to carry a television broadcast signal or to terminate carriage of a television broadcast signal with which it has not complied, and, except as disclosed in SchOule 3.11. the Falcon Companies have complied in all material respects with all written and bona fide requests or demands received from television broadcast stations to carry or to terminate carriage of a television broadcast signal on a System. (e) Rate Ramdatory Matters. Schedule 3.11 sets forth a list of all Governmental Authorities that are certified to regulate rates of the Systems pursuant to the Cable Act and FCC Regulations as of the date ofthis Agreement. Except as disclosed in Schedule 3.11nopendingrate complaints have been filed withthe FCC against the Systems. Except as disclosed in Schedule 3.11. as ofthe data of this Agreemen5 none of the Falcon Companies has received any written notice and, to Falcon's Knowledge, any notice (other data written notice) from any Governmental Authority that it has any obligation or liability to refund to subscribers of the Systems any porton of the revenue received by such Falcon Company from subscribers of the Systems (excluding revenue with respect to deposits for converters, encoders, decoders and related equipment and other prepaid items) that has not been resolved. (f) The Systems and Assets are insured against claims, loss or damage in amounts generally customary in the cable television industry and consistent with the Falcon Companies' past preetices. All such policies we with financially sound insurers and are each outstanding and in fall force and effect on the date hereof Except as set forth on Schedule 3.11, as of the date hereof, within the past two (2) years no insurance carrier has denied any claim for insurance made by any Falcon Company in respect of my of the Systems and Assets or refused to renew any policy issued in respect of my of the Systems and Assets. (g) Right ofFirst Refusal. No Person (excluding Governmental Authorities) has any right to acquire any interest in any of the Systems (including any right of fust refusal or similar right). Except as will be disclosed in Schedule 3.11 (which will be delivered to Buyer within 30 days Ow die execution of this Agreement), no Governmental Authority has any right to acquire any interest in any of the Systems (including any right of first refusal or similar right), other than rights ofcondamnation or eminent domain afforded by law or upon the termination of or default under my Franchise. 3.12 Taxes. (a) William material exception, the Falcon Companies have filed or have caused to be filed in a timely manner all required Tax Returns with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed by the Falcon Companies (except Tax Returns for which the filing date has not expired or has been extended and such extension period has not expired). All Taxes shown on any Tax Returns required to be filed DOXCU LEXECITUM 29 by the Falcon Companies (other than sales, use and property Taxes in an aggregate amount not to exceed $350,000) have been properly accrued or paid to the extent such Taxes have became due and payable. Schedule 3.12 lists all jurisdictions where material Tax Returns are required to be filed with respect to the Falcon Companies. Falcon has delivered or made available to Buyer =a, correct and complete copies of such Tax Returns (in the form filed) for fiscal years ending after December 31, 1992. The Falcon Financial Statements reflect an adequate reserve in accordance with GAAP (without regard to any amounts reserved for deferred taxes) for all material unpaid Taxes payable by the Falcon Companies for all Tax periods and portions thereof through the date of such Financial Statements. All material unpaid Taxes of the Falcon Companies (other than (i) any Taxes referred to in Section 6.10(d) and (ii) Taxes attributable to Buyer's actions on the Closing Date that are not in the ordinary course of business) for all Pre -Closing Tax Periods shall be included as Current Liabilities in the computation of Closing Net Liabilities to the extent that such unpaid Taxes are not reflected on the Falcon Financial Statements. There are no material Tax liens on any assets of the Falcon Companies, other than liens for current Taxes not yet due and payable and liens for Taxes that are being contested in good faith by appropriate proceedings and are disclosed on Schedule 3.12. (b) Except as disclosed in Schedule 3.12, (1) none of the Falcon Companies has executed any waiver or extension of any statute of limitations on the assessment or collection of any Tax or with respect to any liability arising therefrom; (2) none of the federal, state or local income Tax Returns filed by the Falcon Companies with respect to fiscal years ending after December 31, 1992 have been audited by any taxing authority; (3) neither the Internal Revenue Service nor any other taxing authority has asserted, or to Falcon's Knowledge, threatened to assert any deficiency or claim for additional Taxes (other than sales, use and property Taxes in an aggregate amount not to exceed $350,000) against, or my adjustment of Taxes (other than sales, use and property Taxes in an aggregate amount not to exceed $350,000) relating to, any of the Falcon Companies and, to Falcon's Knowledge, no basis exists for any such deficiency, claim or adiumment: (4) there are no proposed reassessments of any property owned by my of the Falcon Companies that would affect the Taxes of any of the Falcon Companies; (5) none of the Falcon Companies has any liability for the Taxes of any person (other than any Falcon Company) pursuant to Section 1.1502-6 of the Treasury Regulations promulgated under the Code or comparable provisions of any taxing authority in respect of a consolidated, combined or unitary Tax Return; (6) none of the Falcon Companies was included or is includible in any consolidated, combined or unitary Tax Return with any entity; an�nawexacunon 30 (7) no consent under Section 341(1) of the Code has been filed with respect to any of the Falcon Companies; (8) each of the Falcon Companies has had since its inception and will continue to have through the Closing Date the federal tax status (i.e. partnership or C corporation) such entity reported on its 1997 federal Tax Returns except as results from any actions taken pursuant to this Agreement; (9) none of the Falcon Companies bas been at any time a member of my partnership, joint venture or other arrangement or contract which is treated as a partnership for federal, slate, local or foreign tax purposes (a "Tax Partnership") or the holder of a beneficial interest in any mast for any period for which the statute of limitations for any Tax has not expired, except for a Tax Parmership which is a Falcon Company; (10) there are no tax sharing agreements or similar arrangements with respect to or involving any of the Falcon Companies; (11) none of the Falcon Companies has any (a) income reportable for a period ending after the Closing Date but attributable to a transaction (e.g., an installment sale) occurring in or a change in accounting method made for a period ending on or prior to the Closing Date which resulted in a deferred reporting of income from such transaction or from such change in accounting method (other than a deferred intercompany transaction), or (b) deferred gain or loss arising out of my deferred intercompany transaction; (12) each Falcon Company that is a Tax Partnership has a valid section 754 election in effect; and (13) None of the Falcon Companies has entered into any compensatory agreements with respect to the performance of services which payment thereunder would result in a nondeductible expense to any Falcon Company pursuant to Section 28OG of the Code or an excise Tax to the recipient of such payment pursuant to Section 4999 of the Code. 3.13 Employee Plans. (a) Employee Plans. Schedule 3.13 contains a list of all Employee Plans and material Compensation Arrangements. The Falcon Companies have delivered ormade available to Buyer (or, in accordance with Section 6.1(b), will deliver or make available to Buyer following execution of this Agreement) true, complete and correct copies of each Employee Plan and each Compensation Arrangement, if any, together with any other material documents relating to such Employce Plan or Compensation Arrangement, including, without limitation, any governmental filings, all annual reports together with any schedules or attachments thereto, each auditors report, if any, and all other material documents relating to such Employee Plan or Compensation Arrangement. Except as disclosed in Schedule 3.13 none of the Falcon Companies or any of their ERISA Affiliates is or has been required to contribute to any "muldemployer plan," as defined in ERISA Section 3(37), nor has my Falcon Company or any such ERISA Affiliate experienced a orninuur execurrou 31 I complete or partial withdrawal, within the meaning of ERISA Section 4203 or 4205, from such a "multiemployer plan." Except as disclosed on Schedule 3.13 or as required under Code Section 4980B or ERISA Sections 601-609, no Employee Plan provides health, life insurance or medical coverage to former employees of the Falcon Companies. (b) Qualified Plans, Except as disclosed in Schedule 3.13with respect to each Employee Plan, and slier taking into consideration the effect of the payments to be made with respect to the Employee Plans: (1) each such Employee Plan that is intended to be tax -qualified is the subject of favorable determination letter, and no such determination letter has been revoked, and to the best of Falctnis Knowledge, no revocation has been threatened, no event has occurred and no circumstances exist that would adversely affect the tax -qualification of such Employee Plan; (2) no Employee Plan is , or within the past six years has been, subject to Section 302 or Tide N of ERISA or Section 412 of the Code; (3) no nonexempt prohibited transaction, within the definition of Section 4975 of the Code or Title 1, Pan 4 of ERISA, has occurred which would subject the Falcon Companies to any material liability; (4) there is no termination or penial termination, or requirement to provide security with respect to any Employee Plan; (5) the fair market value of the assets of my Employee Plan would equal or exceed the value of all liabilities and obligations of such Employee Plan if such plan were to terminate on the Closing Date; and (6) the transactions contemplated by this Agreement will not result in liability under ERISA to any Falcon Companies or Buyer, or any of their respective ERISA Affiliates, or any entitlement to any additional benefits or any acceleration of the time of payment or vesting of my benefits under any Employee Plan of any Falcon Company for any employee of my Falcon Company. (c) Plan Administration. Each Employee Plan and each Compensation Arrangement has been operated and administered in all material respect in accordance with its terms and all applicable laws, including ERISA and the Code. No Falcon Company has received notice of any investigations by my governmental agency or other claims (except claims for benefits payable in the normal operation of my Employee Plan), suits or proceedings against or involving any Employee Plan or asserting my rights to or claims for benefits under my Employee Plan that could give rise to my material liability, and there are not my facts that could give rise to my material liability in the event of such investigation, claim, suit or proceeding. (d) Welfare Plan Fundine. The list ofEmployee Plans in Schedule 3.13 discloses whether each Pian that is an "employee weltare benefit plan" as defined in section 3(q of ERISA is (i) unfunded, (ii) funded through a "welfare benefit fund," as such term is defined in section 419(e) of the Code, or other funding mechanism or (iii) insured. (e) Employee Classification. Each of the Falcon Companies and their ERISA Affiliates have properly classified individuals providing services to my Falcon Company or any ERISA Afliatu sasemployees ornon-employees except to the extent that a misclassification would not be material. (f) Labor Unions. As of the date of this Agreement, other than as disclosed in Schedule 3.13none of the Falcon Companies is party to or bound by my collective bargaining agreement. As of the date of this Agreement, other than as disclosed in Schedule 3.13. to Falcon's oc..U3amxCmron 32 Knowledge, (1) none of the employees of the Falcon Companies is presently a member of any collective bargaining unit related to his or her employment and (2) no collective bargaining unit has filed a petition for representation of my of the employees of the Falcon Companies. (g) FRIVIOMent Contra; rs. The Falcon Companies do not have any employment agreements with any employee of the Falcon Companies. 3.14 Environmental Laws. Except as disclosed in Schedule 3.14: (a) the Falcon Companies operations with respect to the Systems comply in all material respects with all applicable Environmental Laws as in effect on the Closing Date; and (b) none of the Falcon Companies has used the Real Property for the manufacture, transportation, treatment, storage or disposal of Hazardous Substances except for gasoline and diesel fuel and such use of Hazardous Substances (in cleaning fluids, solvents and other similar substances) customary in the construction, maintenance and operation of a cable television system and in amounts or under circumstances that would not reasonably be expected to give rise to material liability for remediation. Except as disclosed in Schedule 3.14, as of the date of this Agreement, no Environmental Claim has been filed or issued against the Falcon Companies and Falcon does not have Knowledge of any matter that would reasonably be expected to give rise to material liability for remediation. To Falcon's Knowledge, the Falcon Companies' operations with respect to the Systems have complied with all applicable Environmental Laws, except such non-compliance that would not reasonably be expected to have a Material Adverse Effect. 3.15 Claims and Lii cation. Except as disclosed in Schedule 3.15- as of the date of this Agreement, there is no claim, legal action, arbitration or other legal, administrative or tax proceeding, order, decree, or judgment or complaint or, to Falcon's Knowledge, investigation, dispute or controversy, reasonably likely to result in, or, to Falcon's Knowledge, any other reasonable basis for, litigation against or relating to the Falcon Companies (or any of their respective Affiliates, directors, officers, employees or agents related to the business or operations of any Falcon Companies) or the business or operations of any of the Systems (other than FCC and other proceedings generally affecting the cable television industry and not specific to the Falcon Companies and other than rale complaints or certifications filed by customers or Franchising Authorities), other than routine collection matters or ordinary counts matters expected to be covered by insurance policies maintained by the Falcon Companies, subieet to aoolicahle deductibles. 3.16 CgIfirliance With laws. Except as disclosed in Schedule 3.16 and except for any such noncompliance as has been remedied, each of the Falcon Companies, the Systems and the Assets are in compliance in all material respects with all Legal Requirements (including, without limitation, (i) the Code, ERISA, the National Labor Relations Act, the Cable Act, FCC Regulations, and the CopytightAct and (fi)the FCC's Cumulative Leakage Index). Falcon has delivered or made available to Buyer complete end contact copies of all FCC forms relating to rete regulation filed by the Falcon Companies with any Governmental Authority with respect to the Systems and copies of all correspondence from or to the Falcon Companies with any Govenomenml Authority relating to rate regulation generally and any other Rate Regulatory Matter or specific rates charged to subscribers of the Systems, and any other documentation prepared by the Falcon Companies supporting an exemption from the rate regulaiion provisions of the Cable Act claimed by any Falcon rK01/YL1t E%2CN1nN 33 Company with respect to any of the Systems. Falcon has made available to Buyer, to the extent in the possession of the Falcon Companies, copies of all FCC forms relating to ram regulation filed with any Governmental Authority with respect to the Systems by parties other than the Falcon Companies and copies of all correspondence from or to parties other than the Falcon Companies with any Govemmemal Authority relating to rate regulation generally and any other Rate Regulatory Matter or specific rates charged to subscribers of the Systems, and any other documentation supporting any exemption from the rate regulation provisions of the Cable Act claimed by the Systems by parties other than the Falcon Companies, 3.17 Transactions with Affiliates. Except to the extent disclosed in the Falcon Financial Statements and the notes thereto or Schedu e 3_1 7, none of the Falcon Companies is involved in any business arrangement or business relationship or is a party to any agreement, contract, commitment or transaction with any Affiliate of any of the Falcon Companies (other than another Falcon Company), and no Affiliate of my of the Falcon Companies (other than another Falcon Company) owns any property or right, tangible or intangible, that is used in the business of the Falcon Companies (other than in its capacity as a direct or indirect equity or debt holder of the Falcon Companies). 3.18 Certain Fees. No finder, broker, agent, financial advisor or other intermediary has acted on behalf of any Falcon Company in connection with this Agreemenq any Transaction Document or the transactions contemplated hereby or thereby, or is entitled to any payment in commotion herewith or therewith which, in either case, would result in any obligation or liability to Buyer or any Falcon Company. 3.19 Inventory. Each Falcon Company has inventory, spare parts and materials relating to the Systems of the type and nature sad maintained at a level consistent with past practice (the "Inventory"), and such Inventory will be sufficient to operate their respective businesses in the ordinary course for at least thirty (30) days after the Closing. 3.20 Overbuilds Competition. Except as set forth in Schedule 3.20, as ofthe date of this Agreement, (i) no construction programs have been undertaken by any Governments] Authority or other person or other active cable television, multichannel multipoint distribution system (as defined by the rules and regulations of FCC), or multipoint distribution system provider in anv of the Franchise Areas and, to Falcons Knowledge, without investigation but upon inquiry of its regional managers and m should reasonably be known to a reasonable cable television operator, no such construction programs are proposed or threatened to be undertaken; (ii) no franchise or other applications or requests of any Person to provide cable television service in the Franchise Areas have been filed more then two (2) weeks prior to the date hereof or, to Falcon's Knowledge (subject to the same limitation referred to in clause (i) above), have been filed less than two (2) weeks prior to the date hereof or aro pending, threatened, or proposed; (iii) them is no other cable television or other vides, services provider within any of the Franchise Areas which is providing or, to Falcon's Knowledge (subject to the same limitation referred to in clause (1) above), has applied for a franchise to provide cable television services or other video services to any of the Franchise Areas in competition with any afthe Falcon Companies; and (iv) none of the Falcon Companies has received any written notice that any other provider ofmbte television services or other existing or prospective =14211!-E%ECtnM 34 video service provider intends to provide such cable television or other video service in competition With any Falcon Company. Notwithstanding the foregoing, it is understood that Falcon makes no representation or warranty in this Section 3.20 or this Agreement regarding competition or potential competition by satellite master antenna television systems or direct broadcast satellite systems. Except as set forth in Schedule 3.20, no Falcon Company is, nor is any Affiliate of any Falcon Company, a party to any agreement restricting the ability of any Falcon Company or Buyer to operate cable television systems or any other video programming distribution business within any ofthe Franchise Areas. 3.21 Disconnections. Schedule 3.23 sets forth (i) the approximate aggregate number of Subscribers which the Falcon Companies have disconnected from service during each of the months specified thereon and (ii) a general description of the Falcon Companies' policies relating to the disconnection of Subscribers from service. 3.22 a 2000. Each Falcon Company has (i) initiated a review and assessment of all areas within its business that would reasonably be expected to be adversely affected by "Yea 2000 Matters" (that is, the risk that computer applications used by such Falcon Company may be unable to recognize and perform properly date -sensitive functions involving certain dates prior to and any date after December 31, 1999), (ii) developed a plan (the "Yea 2000 Plan") for addressing You 2000 Matters on a timely basis, and (iii) to date, implemented the You 2000 Plan. 3.23 Budgets. Schedule 3.23 sets forth true, correct and complete copies of the Falcon Companies capital expenditure budgets for the period from Jane 1, 1999 to December 31, 1999 (the "Capital Expenditure Budget"); it being understood that the obligations of the parties with respect to capital expenditures is subject to Section 6.1(b)(7). 3.24 SEC Reoorts. The statements made by Falcon in the public documents previously Sled by it with the SEC were true and correct in all material respects as of the date made in light of the circumstances in which they were made. 3.25 FWjsm CQmrgRt Practices Act. No Falcon Company has, directly or indirectly, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, made arty adawful payment to foreign or domestic government officials -vi caupluycca or to foreign or domestic political parties or campaigns from corporate funds, violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment. 3.26 Cure. For all purposes under this Agreement, the existence or cocurrance of any events or circumstances which constitute or cause a breach of a representation or warranty of Falcon (as modified by Falcon's Disclosure Schedules) on the date such representation or warranty is made shall be deemed not to constitute a breach of such representation or warranty if such event or circumstance is cured on or prior to the Closing Date or the earlier termination of this Agreement. Mlmas.mmmon 35 SECTION 4: REPRESENTATIONS AND WARRANTIES OF SE Subject to any provisions of this Agreement Smiting, qualifying or excluding any of the representations or warranties made herein, and to the disclosures set forth in Falcon's Disclosure Schedules, as such Schedules are referenced herein, each Seller severally represents and warrants to Buyer (with respect to such Seller and not with respect to my other Seller, and only FHGLP makes the representations and warranties in Sections 4.4(b) and 4.7) as set forth in this Section 4. 4.1 Oaanization. Such Seller is a corporation, partnership or limited liability company (as the case maybe) dulyorgamzcx, validly existing and in good standing under the laws ofthe state ofits organization or formation. 4.2 A.thQriwtiQn and Bindine Obligatim. Such Seller has the requisite partnership, limited liability company or corporate (as the case may be) power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is a party according to their respective terms. The execution, delivery, and performance by such Seller of this Agreement and the other Transaction Documents to which such Seller is a party have been duly authorized by all necessary action on the pm of such Seller. This Agreement and the other Transaction Documents to which such Seller is a party have been duly executed and delivered by such Seller (or, in the case ofTimeacdon Documents to be executed and delivered at Closing, when executed and delivered will be duly executed and delivered) and constitute (or, in the case of Transaction Documents to be executed and delivered at Closing, when executed and delivered will constitute) the legal, valid, and binding obligation ofsuch Seller enforceable against such Seller in accordance with their terms, except as the enforceability of this Agreement and such other Transaction Documents may be limited by Enforceability Exceptions. 4.3 Absence of Conflici nt✓Aueements• Consents. Except for the expiration or termination ofmy applicable waiting period under the HSR Act, or as set forth in Schedule 4.3 or as would not impairthe ability of such Seller to perform its obligations under this Agreement and the Transaction Documents to which it is a party, the execution, delivery and performance by Seller of this Agreement and the other Transaction Documents to which it is a party (with or without the giving ofnotiee, the lapse oftime, or both): (a) do not require my consent of, decimation to, notice to, or filing with my Governmental Authority or my other person under my material agreement or instrument to which such Seller is bound; (b) will not conflict with my prevision of the Organizational Documents ofsuch Seller as currently in effect; (c) assuming receipt of all Consents, will not conflict in my material way with, result in my material breach of, or constitute a default in my material respect under my Legal Requirement to which such Seller is bound; (d) assorting receipt of all Consents, 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 my performance required by the terms of my material agreement or instrument to which such Seller is bound; and (e) assuming receipt of all Consents, will not result in the creation ofmy, Encumbrance, but subject to the Legal Restrictions, upon the Pachased Interests held by such Seller. Notwithstanding the foregoing no Seller makes any representation or warranty regarding my of the foregoing that may result from the specific legal or regulatory status of Buyer or is Affiliates or as a result of my other umnn mcurtou 36 facts that specifically relate to the business or activities in which any of Buyer or its Affiliates is or Proposes to be engaged other than the cable television business, 4.4 Tltle to Pu h red Interest, (a) Such Seller holds all legal and beneficial rights to the Purchased Interests held by such Seller, free and clear of all Encumbrances and options to purchase, other than the pledges disclosed in Schedule 4.4 and subject to the Legal Restrictions, and upon the Closing Buyer will acquire legal and beneficial ownership of such Purchased Interests, free and clear of all Encumbrances and options to purchase, other than the pledges disclosed in Schedule 4A and subject to the Legal Restrictions and any Encumbrances created by Buyer. (b) Except as disclosed in Schedule 4 4. Enda r does not directly or indirectly own, ofrecom or beneficially, any outstanding securities or other interest in any person or have the right or obligation to acquire, any Equity Interests, outstanding securities or other interest in any Person. Except as set forth in Schedule 4 4, Enstar owns such Equity Interests free and clear of all Encumbrances, but subject to the Legal Restrictions. 4.5 ICIRWISAnd-Liligglion. Except as disclosed in Schedule 4.5 as of the date of this Agreement there is no claim, legal action, arbitration or other legal, administrative or tax proceeding Pending or threatened in writing or, to such Seller's Knowledge, threatened (other than in writing), nor is there outstanding any order, decree or judgment against such Seller that if adversely determined, would materially impair such Seller's ability to perform its obligations under this Agreement. 4.6 Certain Fees. Except as disclosed irlSchedule 4.6, no finder, broker, agent, financial advisor or other intermediary has acted on behalf of such Seller in connection with this Agreement or the transactions contemplated by this Agreement or is entitled to any payment in monecdon herewith or therewith which, in either case, would result in any obligation or liability to Buyer or any Falcon Company. 4.7 Iii-yestment Pumsm Investment Company. FHGLP is acquiring the Equity Consideration for investment for its own accon, and not with a view to dun Cala,. AVe,.:6..c.._ _c any part Ihereoi within the meaning of the Securities Act (other than traders by FHGLPto its Panthers). FHGLP (either alone or together with its advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Equity Consideration and is capable of bearing the economic risks of such investment. FHGLP is an informed and sophisticated purchaser, and has engaged "pen advisors, experienced in the evaluation and purchase of equity interests such as contemplated hereunder. FHGLP has undertaken such investigation and bas been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement. FHGLP acknowledges that Buyer has given FHGLP complain and open access to the key employees, documents and facilities of Buyer and its Subsidiaries. FHGLP will undertake prior to .. Closing such further investigation and request such additional documents and information as it ncmnrrmew;c m 37 deems necessary. FHGLP agrees to accept the Equity Consideration based upon its own inspection, examination and dctetmination with respect thereto as to all matters, and without reliance upon any express or implied representations or wanowties of any nature made by or on behalf of or imputed to Buyer, except as expressly set forth in this Agreement. FHGLP will not be an '$invesmxnt company" as defined in the Investment Company Act of 1940, as amended. 4.8 Lure. For all purposes trader this Agreement, the existence or occurrence of any events or circumstances which constitute or cause a breach of representation or warranty of such Seller (as modified by Falcon's Disclosure Schedules) on the date such representation or warranty is made shall be deemed not to constitute a breach of such representation or wantonly if such event or circumstance is cured on or prior to the Closing Date or the earlier termination of this Agreement. SECTION 5: REPRESENTATIONS AND WARRANTIES OF RTIYER. Buyer represents and warrants to Falcon and Sellers as set forth in this Section 5. 5.1 Cmuuzation. Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Buyer has the requisite corporate power and authority to own, lease and operate its properties, to carry on its business in the places where such properties are now owned, leased or operated and such business is now conducted and to execute, deliver and perform this Agreement and the other Transaction Documents to which Buyer is a parry according to their respective terms. Buyer is duly qualified and in good standing as a foreign corporation in each jurisdiction in which such qualification is required. Charter LLC will be a limited liability company formed under the laws of the State of Delaware. When formed Charter LLC will have the requisite limited liability company power and authority to perform this Apeemeat and the other Transaction Documents to which it is a patty according to their respective terms. 5.2 Authgdation and Binding Obligation. The execution, defiveryandperfolmanceby Buyer of this Agreement and the other Transaction Documents to which it is a party have been duly authorized by all necessary corporate, shareholder or other action on the part of Buyer. This Agreement and the other Transaction Documents to which Buyer is a patty have been duly executed and delivered by Buyer (or, in the case of Transaction Documents to be executed and delivered at Cluiiug, wimp executed and delivered will be duty executed and delivered) and constitute (or, in the case of Transaction Documents to be executed and delivered at Closing, when executed and delivered will emissions) the legal, valid, and binding obligation ofBuyey enforceable against Buyer in accordance with their terms, except as the enforceability of this Agreement and such other Transection Docmtents may be limited by Enforceability Exceptions. When executed and delivered by Charter LLC, the Transaction Documents to be executed and delivered by Charter LLC will have been duly authorized by all necessary limited liability company action on the part of Charter LLC and will be duly executed said delivered and will constitute the legal, valid, and binding obligation of Charter LLC, enforceable against Charter LLC in accordance with Weir tenths, exccDt as the eriforeca0ility u: such Transaction Documents may be limited by Enforceability Exceptions. ornirsamoactmav 38 5.3 Absence of _CDOflicling Agreements: C t , Except for the expiration or termination of any applicable waiting period under the HSR Act, and the filing by Buyer with the SEC of any reports required to be filed in connection with the communication of the transactions contemplated hereby, the execution, delivery and performance by Buyer of this Agreement and the other Transaction Documents to which Buyer is a party, and the execution, delivery and performance by Chatter LLC of the Transaction Documents to which Charter LLC will be a party (with or without the giving of notice, the lapse of time, or both): (a) do not require any Consent, declaration to, or filing with any Govemmental Authority or any other Person that has not been obtained; (b) will not conflict with any provision of the Organizational Documents of Buyer as currently in effect or the Organizational Documents of Charter LLC as then in effect; (c) will not conflict with, result in a material breach of, or constitute a default in any material respect under any Legal Requirement to which Buyer is bound or Charter LLC will be bound; and (d) will not conflict with, constitute grounds for terndnation of, result in a breach of, constitute a default under, or accelerate or permit the acceleration of any performance required by the terms of my material agreement or instrument to which Buyer is a party or bound or Charter LLC will be a party or bound. Notwithstanding the foregoing, Buyer makes no representation or warranty regarding any ofthe foregoing that may result from the specific legal or regulatory status of my Falcon Company or my Seller or as a result of my other facts that specifically relate to the business or activities in which my Falcon Company or Seller is or proposes to be engaged other than the cable television business. 5.4 Claims and Litigation. Except as disclosed in Schedule 5 4 as of the date of this Agreement, there is no claim, legal action, arbitration, govemimund investigation or other legal, administrative or tax proceeding pending, or threatened in writing or, to Buyers Knowledge, threatened (other than in writing), nor is there outstanding my order, decree orjudgment against Buyer that, if adversely determined, would materially impair Buyers or Charter LLC's ability to Perform its obligations under this Agreement. 5.5 Investme t P s I t C pan , Buyer is acquiring the Purchased Interests and Charter LLC is acquiring the Contributed Interest for investment for its own account and not with a view to the sale or distribution of my part thereof within the meaning of the Securities Act. Buyer (either alone or together with its advisors) has sufficient knowledge and experience in financial and business matters sn es in b,. c,r Me ofe::demtiag'u`e maria and risks of its investment in the Purchased Interests and Chaner LLC's investment in the Contributed Interest and is capable of hearing the economic risks of such investment. Buyer is an informed and sophisticated purchaser, and has engaged expert advisors, experienced in the evaluation and Purchase of companies such as the Falcon Companies as contemplated hereunder. Buyer has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement. Buyer acknowledges that Falcon and Sellers have given Buyer complete and open access to the key employees, documents and facilities of the Falcon Companies. Buyer will undertake prior to Clwing such fuller investigation and request such additional documents and information as it deem; necessary. Buyer agrees for itself and Charter LLC to accept the Purchased hnemsts and the Contributed Interest and the Systems in the condition they art in on the Closing Date based upon its own w ocomnvur sxcrtmon 39 inspection, examination and detemnination with respecltherew as to all matters, and without reliance upon any express or implied representations or warranties of any nature made by or on behalf of or imputed to Falcon or Sellers, except as expressly set forth in this Agreement. Buyer is not and Charter LLC will not be an "investment company" as defined in the Investment Company Act of 1940, as amended. 5.6 Ownership of Buyer and its Subsidiaries. The ownership chart of Buyer and its Subsidiaries included as Schedule 5.6 is (or, with respect to CCI's ownership of Charter Holdings, will be within five days after execution of this Agreement) true and correct in all material respects. Without limiting the generality of the foregoing, Buyer is or will be within five days after execution of this Agreement, and as of the Closing either Buyer or Charter LLC will be, the record and beneficial owner of all of the issued and outstanding Equity Interests of Charter Holdings, and as of the formation of Charter LLC and as of the Closing, Buyer will be the record and beneficial owner of all of the issued and outstanding Equity interests of Charter LLC. 5.7 Certain Fees. No finder, broker, agent, financial advisor or other intermediary has acted on behalf of Buyer in connection with this Agreement or the transactions contemplated by this Agreement or is entitled to any payment in connection herewith or therewith which, in either case, would result in any obligation or liability to Falcon or Sellers. 5.8 AvvailabilitvofFunds. Buyer has, as of the data hereof, the ability to obtain, and will have, as of the Closing Date, sufficient cash, lines of credit or other immediately available funds to enable it to consummate the transactions contemplated hereby. 5.9 Financial Statements. (a) Buyer has delivered to Falcon true and complete copies of the audited consolidated financial statements of Charter Holdings (including the notes thereto) for the year ended December 31, 1998 (by inclusion of such financial statements in the Form S4 referred to in Section 5.10) and the unaudited consolidated financial statements of Charter Holdings for the three months ended March 31, 1999, in each case that are described on Schedule 5.9 (collectively, the "Charter Financial Statements'). (b) Except as disclosed in Schedule 5.9, the Charter Financial Statements: (1) have been prepared from the books and records of the Buyer and its Subsidiaries to which they relate; (2) have been prepared in accordance with GAAP consistently applied (except as indicated in the notes thereto and except, in the case of the unaudited Charter Financial Statements, for the omission of foomotes and changes resulting from customary and retuning year-end adjustments); and (3) subject to the addition of foomotes and changes resulting from customary and recurring year- end adjustments in the case of the unaudited Charter Financial Statements which in the aggregate are not expected to be material, present fairly in all material respects the financial condition of Buyer and its Subsidiaries to which they relate as at December 31, 1998, or March 31, 1999, as the case may be, and the results of operations for the period then ended. ommucrII u (u 40 5.10 Private Offering Memorandum and S-4. Buyer has delivered to Falcon true and complete copies of each of the Offering Circular dated March 12, 1999 relating m the offering by Charter Holdings and Charter Communicatiom Holdings Capital Corporation of 8.25% Senior Notes due 2007, 8.625% Senior Notes due 2009, and 9.920% Senior Discount Notes due 2011 and the Form S-0 dated May 12, 1999 relating to an exchange offer in respect of such securities. The statements made by Charter Holdings in each of the Offering Circular and Form S-4 referred to in the previous sentence were true and correct in all material respects as of the date made in light of the circumstances in which they were made. 5.11 CIM. For all purposes under this Agreement, the existence or occurrence of any events or chcumstances which constitute or cause a breach of a representation or warranty of Buyer on the data such representation or warranty is made shall be deemed not to constitute a breach of such representation or warranty if such event or circumstance is cured on or prior to the Closing Date or the earlier temdnation of this Agreement. SECTION 6: SPECIAL COVENANTS AND AGREEMENTS 6.1 Operation of Business Prior to Closin¢. Except as required by applicable Legal Requirements or as contemplated by Schedule 6.1 or Section 6.1(c), and subject to Falcon's obligation to comply with the terms and conditions hereof and the operation of the Falcon Companies' business in the ordinary course, and except as consented to by Buyer, between the date hereofand the Closing Date, Falcon will cause the Falcon Companies to operate the Systems in the ordinary course of business (subject to, and except as modified by, compliance with the following negative and affirmative covenants) and abide by the following negative and affirmative covenants: (a) Negative Covenants. The Falcon Companies shall not do any of the following between the date hereof and the Closing Date: (1) Franchises. Fail to timely file a valid request for renewal in accordance with Section 626(a) of the Cable Act, or fail to use commercially reasonable efforts to renew on substantially the same or on other commercially reasonable terms any Franchise that has expired or will expire after the date hereof and prior to the date which is thirty (30) months after the Closing Date in accordance with its terms (it being understood that the Falcon Companies shall par be required to take any steps necessary to obtain renewals of any Franchise earlier than such steps are required to be taken by applicable FCC Regulations, and obtaining renewals of any Franchise shall not be a condition precedent to Buyers or Falcon's obligations hereunder). (2) Contracts. Modify or amend in any material respect, except in the ordinary course of business or in connection with payments to employees as provided in Section 6.9(a), any Contract that shall survive the Closing; or enter into any new Contracts that will be binding on the Falcon Companies following the Closing except: (A) agreements for the provision of services to customers; (B) the renewal or extension of my existing Contact on its existing terms, in all material respects, In dte ordinary course of business; (C) with respect to utility pole attachment agreements, Contracts with tem¢ as customarily required by the utility whose poles are utilized; (D) Contracts in connection with capital expenditures made in accordance with Section 6.1(6)(7); or r ocmnusuarscmroN 41 r (E) my other contracts or commitments entered into in the ordinary course of business that are terminable on not more than sixty days prior notice without the payment of my penalty or that do not involve post -Closing obligations in excess of One Hundred Fifty Thousand Dollars ($150,000) per year in any one case or in excess of One Million Dollars ($1,000,000) per year in the aggregate; provided that the Falcon Companies shall not enter into any employment agreements or new Contracts for the acquisition or disposition of cable television systems without the prior consent of Buyer or amend any existing employment agreement or Contract for the acquisition or disposition of cable television systems without the prior consent of Buyer, such consent with respect to amendments not to be unreasonably withheld or delayed. (3) Di�posithtn of Assets. Sell, assign, lease, swap or otherwise transfer or dispose of my of the Assets, except for Assets consumed or disposed of in the ordinary course of business. (4) Encumbrances. Create, assume or permit to exist any Encumbrance upon the Assets, except for permitted Encumbrances or other Encumbrances disclosed in Schedule 32 and subject to the Legal Restrictions on any Equity Interests awned by the Falcon Companies. (5) Indebtedness. permit the Falcon Companies to incur any additional indebtedness for borrowed money, except to the extent (if not repaid at or prior to the Closing) included in the computation of Closing Net Liabilities; provided that any such incurrence shall be in the ordinary course of business and the Falcon Companies shall give Buyer prior notice of such borrowing; (6) Compensation. Increase annually recurring compensation by more than 50/6, on average, for the Falcon Companies' employees retained in connection with the conduct of the business or operation of the Systems, except for customary merit or time -in -grade increases for qualifying employes or otherwise in accordance with the Falcon Companies employee policies. (7) Waivers. Waive any material right misting to the Systems or the Assets. (8) MAdetng plan. Implement anv new marketing nlnnc that am materially different Som marketing plans previously implemented by the Falcon Companies, except as consented to by Buyer, such consent not to be unreasonably withheld. (9) Affiliate Transactions. Enter into any new business arrangements or business relationships that would be required to be disclosed on Schedule 3.17 or modify, revise or alter any existing such arrangements or relationships if it would have an adverse economic effect on the Falcon Companies or would be binding on the Falcon Companies after the Closing. (b) Affirmative Covenants. Falcon shall, and shall cause the Falcon Companies to, do the following between the date hereof and the Closing Date: apiouusssscunou 42 (1) Access to Information. Subject to Buyees and Chances obligations hereunder and under the Coafidentiality Agreement with respect to confidentiality, allow Buyer and its authorized representatives reasonable access during normal business hours to the Assets and the physical plant, offices, properties and records of the Falcon Companies for the purpose of inspection, and furnish or cause to be furnished to Buyer or its authorized representatives all information with respect to the Assets or the Falcon Companies that Buyer may reasonably request. Any investigation or request for information shall be conducted in such a manner as not to interfere with the business or operations of the Falcon Companies and the Systems. (2) Insurance. Maintain the existing insurance policies on the Systems and the Assets (or comparable replacement policies). (3) Books and Records. Maintain the Falcon Companies' books and records substantially in accordance with past practices. (4) Financial Information. Furnish to Buyer (i) within forty-five days after the end of each calendar quarter between the date hereof and the Closing Date, an unaudited consolidated balance sheet and statement of operations for the Falcon Companies for each such calendar quarter and (ii) any other information (including management notes) furnished to the Falcon Companies' senior lenders or filed by the Falcon Companies with the SEC, which financial information shall be prepared from the Falcon Companies' books and records maintained in the ordinary course of business substantially in accordance with past practices; (5) Compliance with Laws. Comply with all Legal Requirements applicable to the Falcon Companies and the operation of the Systems, except to the extent of matters ofnon-compliance which in the aggregate would not be material to the Falcon Companies taken as a whole. (6) Keep Oreanivai on Intact. Except with respect to any departure of any of the Falcon Companies' employees between the date hereof and Closing, or the termination of employmentofcermin Falcon Company employees as provided in Section 6.9(a), use commercially reasonable efforts to preserve intact the Falcon Companies' business and organization relating to the Systems and preserve for Buyer the goodwill of the Falcon Companies' suppliers, customers and uthms having business relations with them. (7) Capital Expenditure Prostum. After the execution of this Agreement Falcon will cause the Falcon Companies to use commercially reasonable efforts to make capital expenditures, including maintenance and rebuild and upgrade expenditures, materially consistent with the Capital Expenditure Budget, subject to applicable contractual restrictions. If requested by Buys, subject to applicable contractual restrictions and Falcon's approval, which approval will not be utuemo tablywithheld, Falcon will cause the Falcon Companies to use commercially reasonable efforts to make capital expenditures in excess of the Capital Expenditure Budget at the written request of Buyer, so long as the timing and manner of the expenditures so requested by Buyer arc reasonable. As provided for in Section 2.4(bXxii), at the Closing, the Closing Net Liabilities shall be decreased by the total amount of capital expenditures made by the Falcon Compania after the u wroiarsrvrFrs�vnaav 43 date of this Agreement (other than routine maintenance capital expenditures), but only to the extent the Falcon Companies have made an actual payment in respect thereof or a liability for payment is reflected in the computation of Closing Net Liabilities. (c) Certain Permitted Actions. Notwithstanding anything in this Agreement (including Sections 6.l(a) and (b) above) to the contrary, Buyer consents and agrees as follows: (1) Contractual Commitments. The Falcon Companies may comply with all ofthehcontractual commitments under their existing Contracts and under any Contracts entered into after the date of this Agreement in compliance with Section 6.1(a)(2) or with Buyer's (in each case, as such Contracts may be in effect from time to time in accordance with Section 6.1(a)(2) or with Buyers and Charter's consent). The Falcon Companies may take such actions as are contemplated by the other Sections of this Agreement and otherwise comply with their obligations under the other Sections of Us Agreement. (2) Excluded Assets. Buyer acknowledges that the artwork and photography throughout Falcon's Westwood and Pasadena corporate offices and the furniture and furnishings in Marc Nathanson's office and certain other furniture in Falcons Westwood and Pasadena corporate offices are personal assets of Marc Nathanson that will be retained by him and are not and will not become assets of Buyer or the Falcon Companies. (3) Pendine Acquisitions. The Falcon Companies may consummatethe transactions contemplated by the acquisition agreements set forth in Schedule 6.1 of Falcon's Disclosure Schedule substantially in accordance with such acquisition agreements as currently in effect (such transactions, the "Pending Acquisitions"). As provided for in Section 2.4(b)(x), at the Closing, the Closing Net Liabilities shall be decreased by the amounts paid by the Falcon Companies to the sellers under such agreements (plus reasonable out-of-pocket costs and expenses incurred in connection with consummating such transactions), but only to the extent the Falcon Companies have made an actual payment in respect thereof or a liability for payment is reflected in the computation of Closing Net Liabilities. Buyer acknowledges that none of the representations and warranties made by Falcon or any Seller in this Agreement applies to the assets, systems, or liabilities acquired in the Pending Acquisitions or any other matter relating to such risers, systems, and liabilities, other than the representations and warranties made by Falcon in Section 3A with respeci in ivimeriai Contacts. The parties agree and acknowledge that the subscribers acquired in the Pending Acquisitions shall not be cowled for purposes of determining the subscriber adjustment portant to Section 2A(s) or for purposes of determining whether the condition in Section 7.1(c) has been satisfied. (4) Other Maners. The Falcon Companies may take the other actions contemplated in Schedule 6.1 of Falcon's Disclosure Schedule. [2'mar•TTrffiffm1[pA.7'3SP__# (a) Buyer and Falcon are parties to a Confidentiality Agreement dated May 4, 1999(the"Confrdenfielity Agreement"). Notwithstanding the execution, delivery and performance nNIrl—.EXWtMoN 44 of this Agreement, or the termination of this Agreement prior to Closing, the Confidentiality Agreement shall remain in full force and effect in accordance with its terms, but shall expire concurrently with the Closing hereunder. (b) No party will issue any press release or make any other public amouncements concerning this Agreement or the transactions contemplated hereby except with the prior approval (not to be unreasonably withheld) of the other parties, except that if any such disclosure is required by law, no party will make such disclosure without first providing to the other parties an advance copy of any such disclosure and a reasonable opportunity to review and comment. 6.3 Coopemtiore Commercially Reasonable Efforts. Without limiting any of the Obligations of the parties hereunder, the parties shall cooperate with each other and their respective counsel, accountants, agents and other representatives in all commercially reasonable respects in connection with any actions required to be taken as part of their respective obligations under this Agreement, and otherwise use their commercially reasonable efforts to consummate the transactions contemplated hereby and to fulfill their obligations hereunder as expeditiously as practicable. Buyer shag provide to Falcon such information relating to Buyer and its Subsidiaries and their businesses and operations as Falcon shall reasonably request. 6.4 Consents and Notices. (a) Following the execution hereof, until the Closing Date, Falcon shall use its commercially reasonable efforts, and shall cause the Falcon Companies to use their commercially reasonable efforts, and Buyer shall use its commercially reasonable efforts, to obtain as expeditiously as possible all Consents and Designated Consents required to be obtained by the Falcon Companies, including Consents and Designated Consents under the Franchises, FCC Licenses and Contracts of the Falcon Companies. Falcon shall, and shall cause the Falcon Companies to, and Buyer shall, prepare and file, or cause to be prepared and filed, within thirty (30) days after the date hereof (subject to extension for a period of up to an additional fifteen (15) days, if reasonably necessary for a parry to complete its application), all applications (including FCC Forms 394 or other appropriate forms) required to be filed with the FCC and any Franchising Authority that me necessary for the transfer of control to Buyer in connection with the consummation of the transactions contemplated by this Agreement of the Franchises and the FCC Licenses identified in Schedule 3.4. The parties shall also make appropriate requests, as soon as _ practicable after the date hereof, for my Consents required under my Contract (other than the Debt Documents, which shall be governed by Section 6.7). If, notwithstanding their commercially reasonable efforts, Falcon and the other Falcon Companies are unable to obtain my of the Consents . or Designated Consents, none of the Falcon Companies nor Sellers shall be liable to Buyer for my breach of covenant, and, for the avoidance of doubq after the Closing, Sellers shall not have any obligation or my liability for the failure of such Consents or Designated Consents to be obtained. Except as expressly provided herein, nothing herein shall require the expenditure or payment of my funds (other than in respect of nomial and usual attome,+ fees, filing fees or other normal costs of doing business) or the giving of my other consideration by Sellers or the Falcon Companies. .. 0001Wrn E%ECUMN 45 (b) Buyer agrees that if in connection with the process of obtaining any Consent or Designated Consent, a Governmental Authority or other Person purports to require any condition, change or additional or different terms to a Franchise, License or Contract to which such Consent or Designated Consent relates that would be applicable to any of Buyer or any Falcon Company as a requirement for granting its Consent or Designated Consent, Buyer may negotiate jointly with Falcon with such Governmental Authority or other Person, as appropriate, with respect to such condition or change, and each agrees that neither Sellers, the Falcon Companies nor Buyer shall have any obligation to bear any monetary obligations to a Governmental Authority or other Person as a condition to obtaining any required Consent or Designated Consent therefrom; Mlisjded, however that either Sellers or Buyer may elect, in its sole discretion, to satisfy such monetary obligations, in which case, Buyer will accept (and agree that Falcon may cause any Falcon Company to accept) any condition or change in the Franchise, License or Contract m which such Consent or Designated Consent relates to the extent provided herein (but, in the case of Sellers electing to satisfy any such monetary obligations, Buyer and the Falcon Companies will be deemed to have accepted such condition or change only to the extent Sellers reimburse the Falcon Companies or give Buyer credit against the Aggregate Consideration at the Closing for the amount of such monetary obligations, as determined by the mutual agreement of Buyer and Sellers, each acting reasonably); and provided further that Buyer will accept and comply with any commercially reasonable non. monetary obligation imposed by any such Governmental Authority or other Person. (c) Each of Falcon and Buyer shall make its representatives available (at its own expense) to attend one or more meetings of a Governmental Authority from whom a Consent is requested and shall promptly famish to any Governmental Authority or other Person from whom a Consent is requested such accurate and complete information regarding it and its Subsidiaries, including financial information concerning Buyer and other information relating to the cable and other media operations of Buyer, as a Governmental Authority or other Person may reasonably require in connection with obtaining any Consent. The parties shall promptly consult with each other regarding any prospective meeting or information request and promptly famish to each other a copy of any such information provided to a Governmental Authority or other Person, and any other information concerning Buyer as Falcon may reasonably request in connection with obtaining any Consent. To the extent Falcon is required to supply such information as to Buyer and its Subsidiaries to Persons from whom Consents are sought, Falcon may supply such information and Pen ..^.o ob!iga:iaa to Buyer v.;h`, respect to arc discno me or use of such information by such Personsns.. (d) It is understood and agreed that nothing herein shall prevent Buyer (or Weir employees, agents, representatives and any other Person acting on behalf of Buyer) from making statements or inquiries to, attending meetings of, making presentations to, or from responding to requests initiated by, Governmental Authorities or other Persons from which a Consent is sought, and Buyer shall use commercially reasonable efforts to apprise Falcon of all such requests. (a) After the Closing, Sellers will cooperate in all reasonable respects with Buyer and the Falcon Companies to obtain any of the Consents that were not obtained prior to the Closing, provided that such coopemuon will not require the Sellers to make any expenditure or payment of otnirsvusrxacmwu 46 any funds and Buyer will reimburse Sellers for any expenditure or payment that Sellers voluntarily make. (f) Following the execution hereof, mail the Closing Date, FHGLP and TO shall use their commercially reasonable efforts to obtain as expeditiously as possible all consents necessary for thejoint venue interests in Pacific Microwave Joint Ventre to be assigned to Falcon, it being understood that receipt of such consents and the assignment of such joint venture interests shall not be a condition precedent to Buyers obligation to consummate the transactions to be consummated hereunder and that, if such consents shall not have been obtained prior to the Closing, suchjoint venture interests will not be assigned to Falcon at the Closing, but provided that in such event FHGLP and TO shall continue to use Weir commercially reasonable efforts after the Closing to obtain such consents and until such time as the joint venture interests are assigned to Falcon they shall cause the benefits that are currently made available to the Systems by the Pacific Microwave Joint Venture to be made available to Buyer at no cost to Buyer. (g) Following the execution hereof, until the Closing Date, FHGLP shall use its commercially reasonable efforts, and shall cause the Enstar Partnerships to use their commercially reasonable efforts, and Buyer shall use its commercially reasonable efforts, to obtain as expeditiously as possible all Franchise Consents that FHGLP and Buyer mutually agree, each acting reasonably, are required to be obtained by the Enstar Partnerships in connection with the transfer of control to Buyer in connection with the consummation of the transactions contemplated by this Agreement. FHGLP shall, and shall cause the Enstar Partnerships to, and Buyer shall, prepare and file, or cause to be prepared and filed, within thirty (30) days after the date hereof (subject to extension for a period of up to an additional fifteen (15) days, if reasonably necessary for a party to complete its application), all FCC Fortes 394 required to be filed in accordance with the preceding sentence. it is expressly understood that the receipt of such Consents is not a condition precedent to Buyers obligation to consummate the transactions contemplated by this Agreement and that if, notwithstanding their commercially reasonable efforts, FHGLP and the Ens m Partnerships are unable to obtain any of such Consents, FHGLP shall not be liable to Buyer for any breach of covenant, and, for the avoidance of doubt, after the Closing, FHGLP shall not have any obligation or any liability for the failure of such Consents to be obtained. Nothing herein shall require the expenditure or payment of my funds (other than in respect of normal and usual attorneys fees, filing fees or other normal costs of doing business) or the giving of any pryer y ^^^• ^ uvu or the other Sellers or the Enstar Partnerships or the Falcon Companies. (h) Following the execution hereof, without acknowledging that any notice or consent is required with respect to such Franchises, Falcon shall, and shall cause the Falcon Companies to, and Buyer shall, prepare and file, or cause to be prepared and filed, within thirty (3o) days after the date hereof (subject to extension for a period of up to an additional fifteen (15) days, if reasonably necessary for the patties to complete such notices), a notification to the appropriate Franchising Authority with respect to each Franchise marked with an asterisk in Schedule 3.8,such notification to be in a form mutually and reasonably satisfactory to Falcon and Buyer. Each of Falcon and Buyer shall promptly famish to any of such Franchising Authorities such additional information as it may reasonably require in connection with the transactions contemplated by this Agreement. r M14Mtrr EXECUTION 47 W 6.5 HSR Act Filim As soon as practicable after the execution of this Agreement, but in any event no later than thirty (30) days after such execution (subject to extension fora period of up to an additional ten (10) days, if reasonably necessary for a party in complete its notification and report if not filed by the expiration of such thirty (30) day period) the parties will each 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 temdnation of the waiting period imposed by the HSR Act. The parties shall use commercially reasonable efforts to respond as promptly as reasonably practicable to any inquiries received from the Federal Trade Commission (the "FTC") and the Antitrust Division of the Deparnmem of Justice (the "Antitrust Division") for additional information or documentation and to respond as promptly as reasonably practicable to all inquiries and requests received from any other Governmental Authority in connection with antitrust matters. The parties shall use commercially reasonable efforts to overcome any objections which may he raised by the FTC, the Antitrust Division or any other Governmental Authority havingjmisdiction over antitrust matters. 6.6 No Inconsistent Actions- Charter LLC. (a) No parry hereto, nor my oftheir respective Affiliates, will take any action that is inconsistent with its obligations under this Agreement or which does, or would reasonably be expected to, hinder or delay the consummation of the transaction contemplated by this Agreement. Without limiting the generality of the foregoing, at all times between the date hereof and the Closing Date, Buyer will take all necessary or advisable actions to ensure, and Buyer will ensure, that Buyer is able to deliver the Cash Consideration and the Equity Consideration at Closing. (b) Buyer shall form Charter LLC as a Delaware limited liability company as soon as practicable after the execution of this Agreement and in any event prior to the filing of my Consent applications to be filed pursuant to Section 6.4. Buyer shall cause Charter LLC to execute such applications as the transitive as appropriate and to take all appropriate actions with respect to any such applications. Buyer shall cause Charter LLC to take all appropriate actions necessary for Buyer and Charter LLC to perform their obligations under this Agreement and the other Transaction Documents. (c) Within 60 days after die date hereof, Buyer and FHGLP shall negotiate in good faith (1) the definitive Charter LLC Operating Agreement to be effecfive upon the Closing in accordance with the terns set forth on Exhibit D and such additional terms es Buyer and FHGLP may mutually agree, (2) the definitive Exchange Agreement in accordance with the terms set forth on Exhibit E and such additional terms as Buyer and FHGLP may mutually agree, (3) a form of amended and restated limited partnership agreement of Falcon Communications, L.P. to be effective immediately after the Closing (the "Amended Falcon Partnership Agreement"), which agreement shall provide for pro rata and nondiscriminatory treatment of its partners and shall otherwise be reasonably acceptable to FHGLP, (4) the definitive Put Agreement to be effective upon the Closing in accordance with Exhibit Band such additional terms as Buyer and FHGLP may mutually agreement, and (5) the definitive Registration Rights Agreement to be effective in accordance with Exhibit C and such additional terms as FHGLP and Buyer may mutually agree. If Buyer and ncnnmrur axsnmou 48 FHGLP do not agree on a definitive Charter LLC Agreement and/or a definitive Exchange Agreement and/or a definitive Amended Falcon Partnership Agreement and/or a definitive Put Agreement and/or a definitive Registration Rights Agreement prior to the Closing, the terms set forth in Exhibits B, C, D and E and the preceding sentence (with respect to the Amended Falcon Partnership Agreement) shall be binding on each of Buyer, Charter LLC and FHGLP, except that FHGLP may elect at its sole option to receive a cash payment in lieu of the Equity Consideration andnot to contribute anyportion of its partnership interest in Falcon to Charter LLC, in which event FHGLP's entire partnership interest in Falcon shall be sold to Buyer pursuant to Section 2.1(a) hereof and otherwise heated as a Purchased Interest hereunder and the terns set forth in Exhibits B, C, D and E and the preceding sentence (with respect to the Amended Falcon Partnership Agreement) shall not be binding on any of Buyer, Charter LLC or FHGLP. (d) On or prior to the Closing, Buyer shall contribute all of its interest in Charter Holdings to Charter LLC in accordance with the terms of Exhibit D hereto and the Charter LLC Operating Agreement. (e) Prior to the Closing and issuance of the Equity Consideration to FHGLP, Buyer shall not cause or permit Charter Holdings or Charter II.0 to dispose of its assets other than in the ordinary course of its business or other than for fair mazkct value. (f) If the entity defined as "Charter" in the Registration Rights Agreement ("PublicCo") is formed prior to the Closing, Buyer shall cause PublicCo to execute and deliver the Regutradon Rights Agreement and the Exchange Agreement at the Closing. IfPublicCo is formed after the Closing, Buyer will cause PublicCo to execute and deliver the Registration Rights Agreement and the Exchange Agreement at the time of the formation of PublicCo. 6.7 Falcon Comoanv and Eman, Debt Obligations. (a) Buyer acknowledges and agrees that all obligations of the Falcon Companies with respect to Indebtedness, including the Senior Discount Debentures, the Senior Debentures, the Senior Debt, the MONY Notes, and swap and interest rate hedging Contracts (including all principal, accrued and unpaid interest and all other amounts), shall remain obligations of the Falcon Companies through and after Closing, and Buyer will cooperate with the Falcon Companies with respect many udonnation relating to Buyer that shall he reasonably requested by any of the holders ofthe Senior Debt or MONY Notes. (b) After the Closing, Buyer agrees to cause the Falcon Companies to continence an Offer to Purchase (as defined in the Indenture) in accordance with the terms and conditions of the Indenture and to discharge all of their obligations under the Indenture in accordance with its terms, and Buyer agrees that Sellers shall not have any liability or obligation in respect thereof, including any change of control penalty or premium or other payment arising out of or resulting from the consummation of the mausactions contemplated by this Agreement under or pursuant to the Indenture, the Senior Debentures or the Senior Discount Debentures. 1 aoinuas sx2Cmtou 49 r (c) Buyer will either (I) prior to the Closing procure from the lenders under the Credit Agreement and from the purchasers under the MONY Agreement a written waiver, in form and substance reasonably satisfactory to Sellers, that will permit the transactions contemplated by this Agreement to be consummated without a default or an event of default thereunder being caused thereby, that will permit the sale and transfer of the Purchased Interests and the Contributed Interest to Buyer and Chanter LLC as contemplated by this Agreement and the receipt by the Sellers of the Aggregate Consideration therefor free and clear of the pledges under the Credit Agreement, and that will release Sellers firom any obligations and restrictions they may have under the Senior Debt and the Credit Agreement and the MONY Notes and the MONY Agreement and related Debt Documents, or (2) simultaneously with the Closing mid without limiting any other obligations of Buyer, satisfy and discharge all obligations of the Falcon Companies in respect of the Senior Debt and the Credit Agreement and the MONY Notes and the MONY Agreement and related Debt Documents (including all principal, acemed and unpaid interest and all other amounts, including any prepayment penalty or premium or any breakage casts) that become due and payable concurrently with, or as a result of, the consummation of the Closing. (d) Buyer acknowledges and agrees that all obligations of Enstar Finance with respect to Indebtedness, including the Enwar Credit Agreement (including all principal and unpaid interest and all other amounts) shall remain obligations of Enstar Finance through and after the Closing, and Buyer will cooperate with Enster Finance with respect to any information relating to Buyer that shall be reasonably requested by the lenders under the Enstar Credit Agreement. (e) Buyer will either (1) prior to the Closing procure from the lenders under the EnstarCredit Agreement a written waiver, in form and substance reasonably satisfactory to Falcon, that will permit the receipt by the applicable Sellers of the Aggregate Consideration therefor free and clear of the pledges under the Enstar Credit Agreement, and that will release the applicable Sellers from any obligations and restrictions they may have under the Enstar Credit Agreement and related Emmr Debt Documents, or (2) simultaneously with the Closing and without limiting any other obligations of Buyer, satisfy and discharge all obligations of Boater Finance in respect of the Enstm Credit Agreement and related Enstar Debt Documents (including all principal, accrued and unpaid interest and all other amounts, including any prepayment penalty or premium or any breakage costs) that become due and payable concurrently with, or as a result of, the consummation of the Closing. 6.8 Retention and Access to the Falcon e Records. Except as provided in Section 6.10(exl), Sellers shall, for a period of four years from the Closing Date, have access to, and the right to copy, at its expense, during usual business hours upon reasonable prior notice to Buyer, all of the books and records relating to the Falcon Companies, Assets and Systems that were transferred to Buyerpursuant to this Agreement. Buyer shall retain and preserve all such books and records for such four year period. Subsequent to such four year period, Buyer shall only destroy such books and records ifthere is no ongoing litigation, gmvemmenml audit or other proceeding, and subsequent to thirty days' notice to Sellers of their right to remove and retain such books and records or to copy such books and records prior to their destruction. MIA"e-EXECUTION 50 6.9 Employee Maners. (a) Falcon shall temdnate, effective as of the Adjustment Time, the employment of each Headquarters Employee who remains in employment as of the Closing other than those Headquarters Employees designated in a written notice delivered by Buyer to Sellers not later am 60 days afterthe data ofthis Agreement. Seller shall provide affected Headquarters Employees, and otherpardes entitled to receive notice, such notice "my be required under the Worker Adjustment and Retraining Notification Act promptly following receipt of written notice from Buyer described in the preceding sentence. Buyer shall indemnify and hold harmless Sellers from and against my and all liability arising out ofeither Buyer's failure to provide such notice not later than 60 days after the date of this Agreement or the termination of the employment of any Headquarters Employee, except for the payment of compensation and severance benefits, as provided in Section 6.9(b) below, (b) On or prior to Closing, Falcon shall pay any and all compensation owing to Headquarters Employees for my time period prior to and indnding the Casing, including my wages, salaries, bonuses and payments under my Compensation Arrangement owing to such employees. On orpriorto the Closing, subject to the adjustment provided in 2A(b)(viii), Falcon will pay each ofthe Headquarters Employees (including Headquarters Employees who decline continued employment with Buyer), other than (i) those employees identified an Schedule 6.9 and (ii) those Headquarters Employees whose employment will not be terminated in accordance with Section 6.9(a) above (the "Transferred Headquarters Employees"), severance pay on such terms and in such amounts as Falcon may determine in its sole discretion. On or prior to the Closing, Falcon will terminate the Falcon Communications, L.P. 1993 Incentive Performance Plan and provide for the payment ofall benefits due under the terms ofsuch plan and provide for the payment of my amounts due under the Falcon Communications, L.P. Key Executive Equity Program and my such program sponsored by my Falcon Company. (c) At Closing, Falcon shall provide Buyer a schedule setting forth a severance pay amount for each Transferred Headquarters Employee. Upon the termination ofemployment for my reason other than for Cause ofany Transferred Headquarters Employee within six months after the Closing, Buyer shall pay such Transferred Headquarters Employee severance pay in an amount not less than the severance pay amount identified in the schedule of severance pay described in the foregoing sentence. For purposes of this Section, "Cause" shall mem (i) conviction ofa felony or a crime involving moral turpitude, or (it) engaging in acts constituting willful dishonesty, fraud and/or willful failure to carry out the employse'sjob responsibilities. (d) Except as otherwise required in this Section 6.9, all employees of the Falcon Companies who continue in employment following the Closing shall be employed on such terms and conditions as are substantially similar in the aggregate to the terms and conditions of employment ofBuyees and Charter's employees. Each such employee shall receive credit for all purposes other than benefit accrual purposes under my retirement plan or program under my Employee Plan or Compensation Arrangement of the Buyer for past service with my Falcon Company and, to the extent credited under my Employee Plan or Compensation Arrangement ofmy Falcon Company, for past service with my predecessor employer. txvimrnaaxecmroN (e) Buyer shall offer group health plan coverage to all of the employees of the Falcon Companies and to the spouse and dependents of such employees who become employed by the Buyer or any ERISA Affiliate of the Buyer as of the Closing on terms and conditions generally applicable to all of Buyers similarly situated employees. For purposes of providing such coverage, Buyer shall waive all preexisting condition limitations for all such employees covered by the health care plan of any Falcon Company as of the Closing and shall provide such health care coverage effective as of the Closing without the application of any eligibility period for coverage. In addition, Buyer shall credit all employee payments toward deductible, out-of-pocket and copayment obligation limits under the Falcon Companies' health care plans for the plan you which includes the Closing Date as if such payments had been made for similar purposes under Buyers health care plans during the plan year which includes the Closing Date, with respect to employees of the Falcon Companies and the spouse and any dependents of such employees who become employed by Buyer as of the Closing Date. (f) Buyer shall assume full responsibility and liability for offering and providine "continuation coverage" to any "covered employee" and any "qualified beneficiary" who is covered by a "group health plan" sponsored or contributed to by any of the Falcon Companies who has experienced a "qualifying event" or is receiving "continuation coverage" on or prior in the Closing. "Continuation coverage," "covered employee," "qualified beneficiary," "qualifying event" and "group health plan" all shall have the meanings given such terms under Section 4980B ofthe Code and Section 601 et mq. of ERISA. (g) Notwithstanding anything in this Agreement to the contrary, on or prior to the Closing Date, Falcon shall take such action as may be necessary or appropriate to cause each participant in the Falcon Communications, L.P. "Smart" 401(k) Plan and each participant in the Enttar Cable Corporation "Smart" 401(k) Plan (the "Falcon 401(k) Plans") to become fully vested in his or her benefit under such plans. Notwithstanding the foregoing oranything in this Agreement to the contrary, Sellers will take such actions as may be necessary to adopt resolutions to terminate the Falcon 401(k) Plans effective on or prior to the Closing Date; provided after the Closing Buyer shall take such actions as may be necessary or appropriate to complete the termination of the Falcon 401(k) Plans and provide for the distribution of benefits thereunder. Upon distributional! benefits following the termination of the Falcon 401(k) plans, a tax -qualified retirement plan sponsored by Buyer or an entity required to be combined with Buyer under Code Sections 414(b) or (c) shall accept rollover contributions with respect many person who remains an employee of any Falcon Company following the Closing and as of the date of distribution of cash and promissory notes that relate to loans made to participants from the Falcon 401(k) plans. 6.10 Tax Matters, (a) Tm Wgda Ending Before Illee QIgsinems. FHGLP shall prepare or cause to be prepared and file or cause to be filed all Tax Returns for the Falcon Companies (i) that are due on or before the Closing Date, or (ii) that relate to taxable periods ending on or prior to the Closing Date but are required to be filed after the Closing Date. Such Tax Returns shall be prepared in accordance with each Falcon Companys past custom and practice, and allocations of items of Mnxo..� 52 income and gain and loss and deduction shall be made using the closing -of -the -books method. In the case of any Falcon Company that is a partnership or a limited liability company, such Tax Returns shall be prepared in accordance with the Organizational Documents of such Falcon Company as in effect immediately prior to the Closing. In preparing each Falcon Company's Tax Reruns, FHGLP shall consult with Buyer in good faith and shall provide Buyer with drafts of such Tax Reruns (together with the relevant back-up information) for review and consent (which consent shell not be unreasonably withheld) at least twenty days prior to filing; provided, however, if Buyer has not provided comments on such Tax Returns to FHGLP within such twenty -day period, then such consent shall be deemed to be given and, if Buyer's comments or refusal to provide such consent results in any penalties imposed upon FHGLP or any Falcon Company for failing to file a timely Tax Return, then Buyer shall be liable for and shall pay, such penalties; provided further, however, if my such penalties for failure to file a timely Tax Return could be avoided by filing an extension to file such Tax Return with the applicable Governmental Authority, FHGLP shall, or shall cause the appropriate Falcon Company to, timely file such extension. After the Closing, Buyer shall not prepare or cause to be prepared or file or cause to be filed any Tax Return for the Falcon Companies for any period ending on or prior to the Closing Date. (b) Tax PeriodPeriodit Beginning Before d Ending After the Closing Date. Buyer shall prepare or cause to be prepared and file or cause to be filed arty Tax Returns of the Falcon Companies for Tax periods which begin before the Closing Date and end after the Closing Date. Such Tax Returns shall be prepared in accordance with each Falcon Company's past custom and practice but, except as otherwise provided in this Agreement, allocations of items of income and gain and loss and deduction shall be made using the closing -of -the -hooks method. In preparing such Tax Returns, Buyer shall consult with FHGLP in good faith and shall provide FHGLP with drafts of such Tax Rotuma (together with the relevant back-up information) for review at least ten days prior to filing. (c) Cooperation on Tax Matters. (1) Buyer and FHGLP shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Retums pursuant to this Section 6.10 and any audit, litigation, or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of my material provided hereunder. Buyer and FHGLP agree (A) to retain all books and records with respect to Tax matters pertinent to the Falcon Companies relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Buyer or FHGLP, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other party reasonable wrinen notice prior to moistening, destroying or discarding any such books and records and, if the other party so requests, Buyer or FHGLP, as the case may be, shall allow the other party to take possession of such books and records to the extent they would otherwise be destroyed or discarded, subject to a confidentiality agreement provided by the party testing over such books and records and reasonably acceptable to the other party. ocowmerxi'cuttary (2) Buyer and FHGLP further agree, upon request, to use commercially reasonable efforts to obtain any certificate or other document from any Governmental Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including Taxes with respect to the transactions contemplated hereby). (d) Certain Taxes. All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with the transactions consummated pursuant to this Agreement shall be paid by Buyer. Buyer and FHGLP will cooperate in all reasonable respects to prepare and file all necessary Test Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees. Buyer shall be liable for any Taxes attributable to my election made by Buyer or my Affiliate of Buyer with respect to any of the Falcon Companies under Section 338 of the Code or any comparable provision of state or local law. (c) Buyer covenants that it will not- and it will not cause or nermit any Falope Company or any Affiliate of Buyer, (i) to take any action on or after the Closing Data, including the distribution of any dividend or the effectuation of any redemption, that could give rise to any not liability of any Seller or any direct or indirect holder of equity interests in any Seller or (it) to make or change any tax election, amend any Tax Remm or take any tax position on any Tax Return, take any action, omit to take any action or enter into any transaction that results in any increased tax liability of any Seller or any direct or indirect holder of equity interests in any Seller in respect of any Pre -Closing Tax Period. (f) Except to the extent taken into account in Closing Net Liabilities, Buyer shall promptly pay or cause to be paid to Sellers all refunds of taxes and interest thereon received by Buyer, any Affiliate of Buyer, or any Falcon Company attributable to taxes paid by Sellers or any Falcon Company with respect to any Pru -Closing Tax Period. (g) From and after the date of this Agreement, Sellers and each Falcon Company shall not without the prior written consent of the Buyer (which consent shall not be unreasonably withheld) make, or cause or permit to be made, any Tax election that would adversely affect my of the Falcon Companies or Buyer. (h) AllocationofPurchase Priee. The aura of (i) the Cash Consideration allocable (pursuant to Section 2.3(d)) to the partnership interests in Falcon other than the Contributed Interest, (u) the Equity Value, and (iii) liabilities of the Falcon Companies allocable pursuant to Section 752 of the Code to the partnership interests in Falcon, shall be allocated among the assets of the Falcon Companies that are Tax Partnerships in accordance with an agreement (the "Falcon Allocation Agreement"), and the aggregate gross value of all the membership interests in Charter Holdings (including liabilities of Charter Holdings and its Subsidiaries) shall be allocated among the assets of Charter Holdings and its Subsidiaries in accordance with an agreement ("the Charter Allocation Agreement" and together with the Falcon Allocation Agreement, the "Allocation Agreements"). Each of the Allocation Agreements shall be prepared in accordance with the rules under Section 704(c). 743(b), 751 and 755 of the Code, as applicable. Buyer shall deliver a draft of the Allocation ocotnuna sst•:cmrou 54 Agreements to Falcon within 90 days after the execution of the Purchase and Contribution Agreement for approval and convent, and Buyerand Falcon shall mutually agree upon the Allocation Agreements prior to the Closing Date. In this regard, Buyer and Falcon agree that (x) forpurposes of the Falcon Allocation Agreement, each asset of any Falcon Company that is a Tax Partnership that is a Class I Asset, Class II Asset, or Class IR Asset (as defined in Treasury Regulation § 1.338(b)-21) (other than the stock of FFI) shall be allocated value equal to its net book value, the stock of FFI shall be allocated value equal to the value determined by the mutual agreement of Buyer and Falcon, and any remaining value shall be allocated to Franchises of the Falcon Companies that are Tax Partnerships, and (y) for purposes of the Chatter Allocation Agreement, each asset of Charter Holdings and its Subsidiaries that is a Class I Asset, Class B Asset, or Class IB Asset (other than the Equity Interests in any Subsidiary of Charter Holdings that is not a Tax Partnership or a disregarded entity for federal income tax purposes (a "Charter Corporate Subsidiary")) shall be allocated value equal to its net book value, the Equity Interests in any Charter Corporate Subsidiary shall be allocated value equal to the value determined by the mutual agreement of Buyer and Falcon, and any remaining value shall be allocated to Franchises of Charter Holdings and its Subsidiaries (other than Franchises of Charter Corporate Subsidiaries), Neither Falcon nor Buyer shall unreasonably withhold its approval and consent with respect to the Allocation Agreements. Unless otherwise required by applicable law. Buyer and Sellers agree to act and cause their respective affiliates to act, in accordance with the Allocation Agreements in any relevant Tax Remain or similar filings, and shall make any filings required by Code Sections 704(c), 743(6), 751, 755 and 1060 (if any) in accordance with the Allocation Agreements. (i) Buyer will cause Charter LLC to file a Section 754 election with respect to its fast taxable year. Buyer will not revoke, and will not cause to be revoked, the Section 754 election in effect for itself or for any of the Falcon Companies and will administer, or cause to be administered, the elections so as to reflect (A) gain recognized by the Sellers with respect to the sale of the Purchased Interests and the contribution of the Contributed Interest, and (B) gain recognized by holders of membership interests in Chatter LLC arising from dispositions of their interests. 6.11 Falcon Name. The parties agree that the Falcon Companies shall retain the right to use the names "Falcon" and "Falcon Cable TP' and any and all derivations thereof with respect to the domestic U.S. cable television and related businesses conducted by the Falcon Companies from mid after the Closing and that the Sellers shall retain die rieht muse the name "Falcon" and "Falcon International" and any and all derivatives thereof with respect to the non-U.S. cable television and related businesses conducted by certain Falcon entities. 6.12 No Become, Rcleasis of Claims. Anything in this Agreement or applicable law to the contrary notwithstanding, other than claims against Sellers as and to the extent expressly provided for in Section 9.4 and Section 10 of this Agreement (and other than any claim for fraud or criminal conduct), neither Buyer nor any ofNc Falcou Companies will have any claim or recourse against any of the Released Parties as a result of the breach of any representation, warranty, cove um oragreemwt of Falcon or Sellers contained herein or otherwise arising in connection with the transactions contemplated by the Transaction Documents or the business or operations of the Falcon Companies prior to the Closing. Eflective as of the Closing, Buyer and each of its Subsidiaries hereby releases and forever discharges each of the Released Paries from all actions, nrotnvut axatvnon 55 comes of action, salts, debts and claims (other than claims for fraud or criminal conduct) arising out of fact or circumstances prior to the Closing, whether at law or in equity or otherwise, which Buyer aanyofthe Falcon Companies ever had or now or hereafter may have for, upon or by reason of my matter, cause or thing whatsoever related to the Falcon Companies, whether, contingent, accrued or otherwise arising out of facts or circumstances prior to the Closing; provided that the foregoing shall not limit Buyers rights provided for in Section 10. 6.13 Exculpation and indemnificai on After the Closing, Buyer and the Falcon Companies will be bound by and will assume the same obligations to satisfy (and Buyer will cause the Falcon Companies to continue to satisfy) the rights of exculpation, indemnification and advancement of expenses to which the present and former partners, members, stockholders, directors, representatives, officers, employees and agents of the Falcon Companies and any of their respective Affiliates are entitled with respect to any matter existing or occurring prior to the Closing and/or with respect to this Agreement and the Transaction Documents, under each such Falcon Company's Orgardmtional Documents, by contract or agreement or by resolution of the Board of Representatives or Board of Dire=tors or other similar governing entity (as the case may ba) of such Falcon Company, in accordance with the terms and conditions of any such exculpation and indemnification provisions as in effect on the date of this Agreement. Without limiting the foregoing Buyer agrees to maintain in place for a period of not less than six years firm the Closing, forthe benefit of the parties mentioned in the foregoing sentence, directors' and officers' insurance, on substantially the same terms and to the same extent as presently in effect for the Falcon Companies; provided that Buyers obligation pursuant to this sentence only shall lapse on the third madverr ry of the Closing ifthe cast ofmaintaining such insurance has increased more than twofold since the Closing Date and the beneficiaries of such insurance do not elect to reimburse Buyer for the amount of any such cost increase. 6.14 Rate Regulatory Matters. Buyer acknowledges that, except as expressly represented and warranted in Section 3.11(e) and Section 3.16, Falcon is not making any representation or warranty regarding any Rate Regulatory Mauer (including with respect to compliance with any Legal Requirements dealing with, limiting or affecting the rates which can be charged by cable television systems to their customers (whether for programming, equipment, installation, service or otherwise)). Accordingly, except for any right or remedy that Buyer may have arising out of a breach of the reoresentatioac and warratie< made by Falcon in eecdon 3,r t (.) ad eee fon 3.16 no Rate Regulatory Matter and no manor relating to, in connection with or restating or arising from any Rate Regulatory Matter, or my actions taken prior to or after We date hereof by any Falcon Company to comply with or in a good faith attempt to comply with any Rate Regulatory Mauer (including my rate reduction, refund, penalty or similar action having the effect of reducing the rates previously or subsequently paid by subscribers, whether instituted or implemented by or imposed on my Falcon Company and changes to rate practices instituted or implemented by or imposed on my Falcon Company), shall: (a) cause or emutmate, directly or indirectly, a breach by Falcon or Sellers of my of their representations, warranties, covenants or agreements contained in this Agreement or my other Transaction Document (and such representations, warranties, covenants, and agreements shall hereby be deemed to be modified appropriately to reflect and permit the impact and existence of such Rate Regulatory Matters and to permit my action by my Falcon Company to comply with or attempt in good faith to comply with such Rate Regulatory Matters); (b) otherwise ATlnlrrlr ExECVoQN 56 cause or constitute, directly or indirectly, a default or breach by any Falcon Company or Sellers under this Agreement or any other Transaction Document; (c) result in the failure of any condition precedentm the obligations of Buyer under this Agreement or any other Transaction Document; (d) otherwise excuse Buyees performance of its obligations under this Agreement or any other Transaction Document; or (e) give rise to any claim for (i) any adjustment to the Aggregate Consideration or other compensation or (ii) indemnification or other claim. 6.15 jjEjgagg Scltedulea.'Ihe parties aclmowledge and agree that (i) Falcon's Disclosure Schedules and Charter's Disclosure Schedules may include certain items and information solely for informational purposes for the convenience of the parties hereto and (ii) the disclosure of my matter in Falcon's Disclosure Schedules or Chances Disclosure Schedules shall not be deemed to constitute an acknowledgment by Falcon or Sellers, in the case of Falcon's Disclosure Schedules, or Buyer in the case of Charter's Disclosure Schedules, that the matter is material. 6.16 Environmental Reports. At any time after the date hereof, Buyer shall have the right to engage an environmental consultant to conduct a Phase T environmental audit and to prepare a Phase I environmental report, and if recommended in such Pbase I environmental report, a Phase 11 environmental audit and Phase B environmental report for any Real Property site. The tort of Phase I and Phase B environmental audits and reports shall be home by Buyer. The Falcon Companies shall cooperate with Buyer in all reasonable respects in connection with such Phase I and Phase B environmental audits and reports, including providing all reasonable access to their respective properties and facilities. 6.17 Year2000Matters. The Falcon Companies shall have taken commercially reasonable actions to implement the Year 2000 Plan and to complete implementation of the Year2000 Plan as soon as is reasonably practicable. The Falcon Companies shall cooperate with Buyer prior to the Closing with respect m the Year2000 Matters. Such cooperation shall include providing Buyer with status reports as Buyer may reasonably request regarding Year 2000 Matters, assisting Buyer in the refinement and implementation of the Year 2000 Plan, assisting Buyer in developing and implementing plans for Buyer to continue the Year 2000 Plan after the Closing, and using commercially reasonable efforts to implement all solutions identified as reasonably necessary to the implementation of the Year 2000 Plan by vendors, distributors and manufacturers of the Falcon Companies' computer applications. 6.18 TO Amengcments. Al the Closing, the business arrangements specified on Schedule ¢,j¢ between the Falcon Companies and TO or Affiliates of TCI will be terminated except as provided in Schedule 6.18. 6.19 Restructuring. Falcon will in good faith cooperate with Buyer in examining a restructuring to be effected at or after Closing of Falcon and certain Falcon Companies, as contemplated by Buyer; provided that neither Falcon nor any of the Falcon Companies will be required to undertake any actions that would, or could reasonably be expected to (as dommuned by Falcon in its mawnable discretion): (i) have an adverse economic effect on Falcon, any of the Falcon Companies, any Seller or any direct or indirect equity holder of any Seller for which Buyer does not make any such party economically whole, or (ii) more than manaterially delay the Closing. Mt.'--ExECUrtq! 57 SECTION 7: CONDITIONS TO OBLIGATION 7.1 Conditions to Oblinations of the B . All obligations of Buyer at the Closing hereunder are subject to the fulfillment (or waiver at the option of Buyer) prior to or at the Closing of each of the following conditions: (a) Representations and Warranties f Falcon and Sellers As to the representations and warranties of Falcon set forth in Section 3 and of Sellers set forth in Section 4, (1) those representations and warranties set forth in Section 3 and Section 4 which we expressly stated to be made solely as of the date of this Agreement or mother specified date shall be true and correct in all respects as of such date (without regard to the materiality or material adverse effect qualifiers set forth therein), and (2) all other representations and warranties of Falcon or Sellers set forth in Section 3 and Section 4 respectively, shall be true and correct in all respects at and as of the time of the Closing as though made at and as of that time (without regard to the materiality or material adverse effect qualifiers at forth therein); pmv:,'.cd that for purposes of each of clauses (1) and (2) above, the representations and warranties shall be deemed=a and correct in all respects to the extent that the aggregate effect of the inaccuracies in such representations and warranties as of the applicable times does not constitute a Material Adverse Effect. (b) Covenants. Falcon and Sellers shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by them prior to or at the Closing. (c) Consents. The Material FCC Consents shall have been obtained. The aggregate number of Equivalent Subscribers as of any applicable date, in those Franchise Areas that are Transferable Franchise Areas shall be at least eighty-seven and one-half percent (8722%) of the aggregate number of Equivalent Subscribers in all Franchise Areas as of the most recent month ended prior to satisfaction of this condition. (d) Har -Scott -Rodin. The requisite waiting period under the HER Act shall have expired or been terminated, without the FTC or the Antitrust Division, as applicable, taking any action which has not been terminated or resolved. (e) Judgingnc There shall not be in effect on the date on which the Closing is to occur my judgment, decree, order or other prohibition of a court of competent jurisdiction having the force of law that would prevent the Closing, provided that Buyer shall have used commeminlly reasonable efforts to prevent the entry of my such judgment, decree, order or other prohibition and to appeal as expeditiously as possible any such judgment, decree, order or other prohibition that may be entered. (t) Deliveries. Falcon and Sellers shall have made or sand willing to make all the deliveries to Buyer described in Section 8.2. acawrmr � 59 (g) Compliance with FIRPIA. Sellers shall have provided the Buyer with a statement, in a form reasonably satisfactoryto the Buyer, pursuant to Section 1.1445-2(b)(2) of the Treasury Regulations, certifying that Sellers are not foreign persons. (h) Material Adverse Effect From and after the date of this Agreement until the Closing Date, no event shall have occurred which has had a Material Adverse Effect. (i) Falcon Franchise Notice. Falcon shall have delivered to Buyer a notice that the condition set forth in the second sentence of Section 7.1(c) has been satisfied at least two (2) business days prior to the date scheduled for Closing. 7.2 Conditions to Obligations of Sellers. All obligations of Sellers at the Closing hereunder are subject to the fulfillment (or waiver at the option of Sellers) prior to or at the Closing of each of the following conditions: (a) Representations and Wm ami . As to the representations and warranties of Buyer set forth in Section 5, (1) those representations and warranties set forth in Section 5 which are expressly stated to be made solely as of the date of this Agreement or another specified date shall be true and correct in all material respects as of such date, and (2) all other representations and warranties shall be me and correct in all material respects at and as of the Closing as though made at and as of that time. (b) Covenants. Buyer shall have performed and complied with in all material respects all covenants and agreements required by this Agreement to be performed or complied with by them prior to or at the Closing. (c) Hert-Scon-Rodino. The requisite waiting period underthe HSR Act shall have expired or been terminated, without the FTC or the Antitrust Division, as applicable, taking any action which has not been terminated or resolved. (d) Judgingt There shall not be in effect on the date on which the Closing is to occur my judgment, decree, order or other prohibition of a corm of competent jurisdiction having the force of law that would prevent the Closing, provided that Falcon and Sellers shall have used commercially reasonable efforts to prevent the entry of any such judgment, decree, order or other prohibition and to appeal as expeditiously as possible any such judgment, decree, order or other prohibition that may be entered. (e)"Deliveries. Buyershall have made or stand willing to make all the deliveries described in Section 8.3. (f) Release. Sellers shall have been released from any obligations they may have under the Debt Documents and Emtar Debt Documents, pursuant to documents in form and substance reasonably satisfactory to Sellers. ocotnnm n¢cinron 59 SECTION 8: CLOSING AND CLOSING DELNERIES 8.1 Closing. (a) ClosingDate. (1) Subject to satisfaction or, to the extent permitted by law, waiver, of the closing conditions described in Section 7, and subject to Section 8.1(x)(2), 8.1(a)(3) and 8.1(a)(4), the Closing shall take place on the date specified by FHGLP by notice to Buyer, which specified date shall be no culler than two business days and no later than five business days after satisfaction or waiver of the conditions set forth in Sections 7.1(c) and (d) and Sections 7.2(c), or on such earlier or later date as FHGLP and Buyer shall mutually agree; provided, however, (A) if pursuant to Section 2.1(b) and 6.6(b), Sellers elect a cash payment, the Closing will take place on at least 10 days notice from FHGLP, and (B) subject to Section 8.1(a)(3) and 8.1(a)(4), the Closing shall not take place beyond the Upset Date. (2) If on the date on which the Closing would otherwise be required to take place pursuant to Section 8.l(a)(1) (A) there shall be in effect anyjudgment, decree, order or otherprohibition of a court of competentjurisdiction having the force of law that would prevent or make unlawful the Closing, or (B) any other circumstance beyond the reasonable control of the Falcon Companies, Sellers, or Buyer (which shall in no event include any matters relating to financing of the transactions contemplated hereby) shall exist that would prevent the Closing or the satisfaction of any of the conditions precedent to any party set forth in Section 7, then either Sellers or Buyer may, at its option, postpone the date on which the Closing is required to take place until such date, to be set by the party that elects to postpone the date for Closing pursuant to this subsection (2) on at least five business days' written notice to the other party, as soon as practicable after such judgment, decree, order or other prohibition ceases to be in effect, or such other circumstance ceases to exist;roo vided. hover that any postponement of the date on which the Closing is required to take place to a date beyond the Upset Date shall require the consent of both Sellers and Buyer (it being agreed that the Upset Date shall be extended one day for each day up to one year that ajudgment, decree, order or other prohibition referenced in clause (A) above remains in effect). (3) Notwithstanding anything in this Agreement to the contrary, if on the date scheduled for Closing, the Closing has not occurred because any notice period required by Section 8.1(a$I) or (2) has not lapsed, the Upset Date shall be extended until one business day after the lapse of such period. (4) If the date on which the Closing would otherwise be required to take place pursuant to Section 8.1(axl), 8.1(a)(2) or S.I(a)(3) the Referee shall not have completed its determination pursuant to Section 2.5(a) of my of the amounts disputed by FHGLP and Buyer, then FHGLP may, at its option. postpone the date on which the Closing is required to take place until the third (3rd) business day after the date the Referee makes its final determination pursuant to Section 2.5(a); provided, however, that if such postponement results in the Closing taking place on a date txo=, racunou 60 after the Upset Date, the Upset Date shall be extended until one business day after the date of the Closing as postponed pursuent to this Section 8.1(a)(4). (b) Closi�ac , The Closing shall be held at the offices of hell & Marcella, LLP, 1800 Avenue of the Stars, Suite 900, Los Angeles, California, or any other place or time az FHGLP and Buyer shall mutually agree. 8.2 Deliveries_, Sellers shall deliver or cause to be delivered to Buyer the following; (a) purchased L tete is d C hib ted i M assignment agreement providing for the assignment of the Purchased Interests and Contributed Interest (if applicable) by Sellers to Buyer, in a form reasonably satisfactory to Buyer. An assignment agreement providing for the assignment of all ofFHGLP's rights and interest in the NYNEX Litigation. (b) —CenJf'cate Of Falcon. A certificate executed by a duly authorized representative on behalf of Falcon, dated as of the Closing Date, certifying that the closing conditions specified in Sections 7.1(a) and (b) have been satisfied az to Falcon, except m disclosed in said certificate. (e) Certificates a Of Sellers. A certificate executed by each Seller dated as of the Closing Date, certifying that the closing conditions specified in Sections 7.1(a) and (b) have been satisfied as to such Seller, except as disclosed in such certificate. (d) Secretaries' Certificate. A certificate executed by a duly authorized representative on behalf ofFalcon, dated as of the Closing Date, providing, as attachments thereto, m the extent available, certificates of Good Standing for each of the Falcon Companies certified by an appropriate state official of the State of their organization, all certified by such state officials as of date not more than fifteen days before the Closing Date. (e) Consents. Copies of Consents which have been obtained by Falcon or my Of me Faleon Companies prior to the Closing. (') �' °^--n� An opinion of Dow, Lohnes & Albertson, PLLC, counsel to Sellers (other than TCn, dated as of the Closing Date, substantially in the form of Exhibit hereto; an opinion of Fleischman and Walsh, L.L.P., counsel to Falcou, dated as of the Closing Data, substantially in the form of Exhibit G-2 hereto; and an opinion ofShuman &Howard L.L.C„ counsel to TCI, dated as of the Closing Date, substantially in the tomo of Er hibit -3 (S) MiRS11110 BRiew Amemeat.The Adjustment Escrow Agreement, duly executed by Sellers and the Adjustment Fact— Agent, if required pursuant to Section 2.5(b). (h) 03. B; as of the Closing Date, there are outstanding any options, wanmty or other similar claims or securides in respect of the Equity Interests of the Falcon Companies (collectively, "Options"), other than Options held by my Falcon Company, releases, in rxztnrrv+axacunw 61 form and substance reasonably acceptable to Buyer, executed by each holder of such Options, releasing and terminating such Options and all rights of such holder thereunder. (i) Releases, A release, duly executed by each Seller, substantially in the form of Exhibit H hereto. 6) OtherTmmaction Documents.IfFHGLP contributes the Contributed interest to Charter LLC pursuant to Section 2.1(b), the Put Agreement, the Registration Rights Agreement, the Charter LLC Operating Agreement, and the Exchange Agreement (to the extent each is agreed to prior to Closing), each duly executed by FHGLP or the appropriate distributee of FHGLP. 8.3 Deliveries by Buser. Prior to or at the Closing, Buyer shall deliver, or cause to be delivered, to Sellers the following: (a) Aggregate Consideration. (1) An assumption agreement providing for the assumption by Buyer of the Assumed Liabilities, in a form reasonably satisfactory to Sellers. (2) As provided in Section 2.6, the cash portion of the Net Closing Payment to Sellers, by wire or accounts transfer of immediately available funds to one or more accounts designated by FHGLP in Part V of the Allocation Notice. (3) As and to the extent provided by Section 2.5(b), the Adjusted Escrow Amount to the Adjustment Escrow Agent, by wire or accounts transfer of immediately available funds to the account specified in the Adjustment Escrow Agreement. (4) As provided in Section 6.7, if applicable, satisfaction and discharge of all obligations of the Falcon Companies and the Sellers in respect of the Senior Debt and the Credit Agreement, the MONY Notes and the MONY Agreement, and the related Debt Documents, and the Enstar Credit Agreement, and the related Enstar Debt Documents. (b) Officers Certificate. A certificate executed by Buyer, dated as ofrhe Clod — Date, certifying that the closing conditions specified in Sections 7.2(a) and (b) have been satisfied, except as disclosed in said certificate. (c) Sccretaries' Certificate. A certificate executed by Buyer, dated as of the Closing Date, (1) certifying that the resolutions, as attached to said certificate, were duly adopted by the Board of Directors and shareholders (if applicable) of Buyer, authoriang and approving the execution by Buyer of this Agreement and the other Transaction Documents to which it is a party and the consummation of the trvtsacdons contemplated hereby and thereby and that such resolutions remain in full force and effect; and (2) providing, as attachments thereto, a Certificate of Good Standing for Buyer certified by an appropriate slate official of the State of Delaware, certified by such state official as of a date not more than fifieen days before the Closing Date. rcnvuwsgxtcmrn+ 62 (d) Opinion of Counsel. An opinion of counsel to Buyer, dated as of the Closing Date, substantially in the form of Exhibit I hereto. (e) Adjustment Escrow Ameement. The Adjustment Fscrow Agreement, duly executed by Buyer and the Adjustment Escrow Agent if required pursuant to Section 2.*). (f) Releases. The releases of Sellers under the Debt Documents and Enamor Debt Documents refound to in Section 6.7 ad 7.2. (g) Other Transaction Documents. If FHGLP contributes the Contributed Interests to Charter LLC pursuant to Section 2.1(b), the Put Agreement, duly executed by Paul Allen, the Registration Bights Agreement, duly executed by PublicCo if required at the Closing by Section 6.6(f), the Charter LLC Operating Agreement duly executed by Buyer and Charter LLC (if agreed to prior to Closing) and the Exchange Agreement, duly executed by PublicCo if required at the Closing by Section 6.6(f) (to the extent each is agreed to prior to Closing); and the Amended Falcon Partnership Agreement, duly executed by Buyer and Charter LLC, in a form reasonably acceptable to FHGLP. , SECTION 9: TERMWATION 9.1 Agreement between Sellers and Buver. This Agreement may be terminated at any time prior to the Closing and the purchase and sale of the Purchased Interests abandoned, by written agreement among the parties hereto. 9.2 Termination by Sellers. This Agreement may be terminated at any time prior to the Closing by Sellers and the purchase and sale of the Purchased Interests abandoned, upon written notice to Buyer, upon the occurrence of my of the following: (a) Conditions. If on any date determined for the Closing in accordance with Section 8. 1, each condition set forth in Section 7.1 has been satisfied (or will be satisfied by the delivery of documents at the Closing) or waived in writing by Buyer on such date and either (i) a condition set forth in Section 7.2 has not been satisfied (or will not be satisfied by the delivery of documents athe Closing) or waived in writing by Sellers on such date or (ii) Buver has nonethelmc refused to consummate the Closing, provided that Buyer shall have five days to cure such matter alterreceipt of notice ofSellet's intent to terminate pursuant to this Section 9.2(a). Notwithstanding the foregoing, Sellers may not rely on the failure of any condition set forth in Section 7.2 to be satisfied if such failure was principally caused by Sellers' or any Falcon Company's failure to act in good faith or a breach of or failure to perform any of its representations, wanonties, covenants or other obligations in accordance with the terms of this Agreement. (b) Unsel Dat . If the Closing shall not have occurred on or prior to the Upset Date as extended as provided in Section 8.1(a)(3) or Section 8.1(aH4), unless the failure of the Closing to occur was principally caused by Sellers' or any Falcon Company's failure to act in good faith or a breach of or failure to perform any of its mprcsenmdons, wmrenties, covenants or other obligations in accordance with the terms of this Agreement. txvvmrrarxr<vnou 63 9.3 Termination by Buver. This Agreement may be terminated at any time prior to the Closing by Buyer and the purchase and sale of the Purchased Interests abandoned, upon written notice to Sellers, upon the occurrence of any of the following: (a) Conditions. If on any date determined for the Closing in accordance with Section 8.1, each condition set forth in Section 7.2 has been satisfied (or will be satisfied by the delivery of documents at the Closing) or waived in writing by Sellers on such date and either (i) a condition set forth in Section 7.1 has not been satisfied (or will not be satisfied by the delivery of documents at the Closing) or waived in writing by Buyer on such date or (ii) Sellers have nonetheless refused to consummate the Closing; provided that Sellers shall have five days to core such matter after receipt of notice of Buyers intent to terminate pursuant to this Section 9.3(a). Notwithstanding Ute foregoing, Buyer may not rely on the failure of any condition set forth in Section 7.1 to be satisfied if such failure was principally caused by Buyers or Charters failure to act in good faith or a breach ofor failure to perform any of its representations, warranties, covenants or other obligations in accordance with the terms of this Agreement. (b) Upset Date. If the Closing shall not have occurred on or prior to the Upset Date as extended as provided in Section 8.1(a)(3) or Section 8.1(a)(4), unless the failure of the Closing to occur was principally caused by any Buyers or Chances failure to act in good faith or abreach of or failure to perform any of its representations, warranties, covenants or other obligations in accordance with the terms of this Agreement. 9.4 Effect of Temtination. If this Agreement is terminated as provided in this Section 9, then this Agreement will forthwith become null and void and there will be no liability on the part ofany party to any other parry or any other Person in respect thereof, provided that: (a) Survivine Obligations. The obligations of the patties described in Sections 6.2, 9.4, 9.5 and 11.1 (and all other provisions of this Agreement relating to expenses) will survive any such termination. (b) Withdrawal ofAmlications. All filings, applications and other submissions relating to the consummation ofthe transaction contemplated hereby shall, to the extent practicable; be withdrawn from the Governmental Authority or other person to whom made. (c) Willful Breach by Buver. No such termination will relieve Buyer from liability for a willful breach by Buyer ofthis Agreement (which shall in all events include, without limitation, a failure to pay the Cash Consideration or the Equity Consideration and discharge the Senior Debt and the Credit Agreement). If Sellers terminate this Agreement pursuant to Section 9.2(a) because Buyer wrongfully refuses to close after all conditions precedent to its obligations have been satisfied, (i) Buyer shall, immediately upon written notice from Sellers of such breach, make a payment in cash (by wire transfer of immediately available foods to an account or accounts designated by Sellers) to Sellers of Two Hundred Million Dollars ($200,000,000); and (ii) in addition to such payment. Sellers and Falcon shall have all rights and remedies available at law and equity, including additional monetary damages (for example, to compensate the Sellers for any ucol."n"I atvnoN 64 diminution in the market value of the Falcon Companies). Buyer agrees that the foregoing payment referred to in clause (i) of the forgoing sentence is a reasonable estimate of the damages that will be suffered by Sellers and the Falcon Companies in the event of such a breach by Buyer as a result of the foregone opportunity to complete an initial public offering and other commercial, partnership and corporate opportunities foregone as a result of entering into the Purchase Agreement, that such payment does not include amounts in respect of the category of damages referred to in clause (ii) above relating to diminution in value and does not constitute a penalty, and Buyer hereby waives any defense that such amount is a penalty or is otherwise not enforceable. Sellers agree that notwithstandingthe foregoing, any amounts paid in respect of damages described in clause (i) above will be credited against any payment required for damages described in clause (it) above. (d) Willful Breach by Falcon or Sellers. No such termination will relieve Seller or Falcon from liability for a willful breach of this Agreement. If Buyer terminates this Agreement pursuant to Section 9.3(a) because Falcon wrongfully refuses to close after all conditions precedent to its obligations have been satisfied, Buyer shall have all rights and remedies available at law or equity, including the remedy of specific performance, against Falcon. No such termination will relieve any Seller from liability for its willful breach of this Agreement. If Buyer terminates this Agreement pursuant to Section 9.3(a) because any Seller wrongfully refuses to close after all conditions precedent to its obligations have been satisfied, Buyer shall have all rights and remedies available at law or equity, including the remedy of specific performance against such breaching Seller. (e) No Recourse. Anything in this Agreement or applicable law to the contrary notwithstanding, in the event this Agreement is terminated as provided in this Section 9: (1) Buyer will not have any claim or recourse against any of the Sellers, or any of their respective officers, directors, shareholders, members, partners, employees, agents or Affiliates (other than Falcon) as a result of the breach of my representation, warranty, covenant or agreement of Falcon contained herein or otherwise arising out of or in connection with the transactions contemplated by this Agreement or the business or operations of the Falcon Companies prior to the Closing. Buyer's sole recourse shall be against Falcon. (2) No Seller or Falcon Company will have any claim or recourse against Buyers respective officers, directors, shareholders, members, partners, employees, agents or Affiliates as a result of the breach of my representation, warranty, covenant or agreement of Buyer contained herein or otherwise arising out of or in connection with the transections contemplated by this Agreement or the compliance by Buyer with its covenants prior to the Closing. The Sellers and Falcon's sole recourse shall be against Buyer. 9.5 Attomm! Fees. Notwithstanding my provision in this Agreement that may limit or qualify a partys remedies, in the dent of a default by arty party that results in a lawsuit or other proceeding for any remedy available under this Agreement, the prevailing party shall be entitled to reimbursement from the defaulting party of its reasonable legal fees and expenses (whether incurred in arbitration, at vial, or on appeal). oca3avuaannctrrxw 65 If to Falcon or Sellers: Falcon Cable TV 10900 Wilshire Boulevard 15th Floor Los Angeles, CA 90024 Attention: Mm B. Nathanson, CEO and Stanley itskowiteb, Executive Vice President and General Counsel Telephone: (310)209-7313 Telecopier: (310)209-7239 and TCI Falcon Holdings, LLC 9197 South Peoria Street Englewood, Colorado 80112 Attention: Derek Chang Telephone: (720)875-5241 Telecopier: (720)875-5396 with a copy (which shall not constitute notice) to: Dow, Lohnes & Albertson 1200 New Hampshire Avenue, N.W. Suite 800 Washington, D.C. 20036-6802 Attention: Leonard J. BaM, Esq. and John T. Byrnes, Esq, Telephone: (202)776-2000 Telecopier: (202)776-2222 and Goldman & Ragon 1801 Century Park East - Suite 2222 Los Angeles, California 90067 Attention: Richard D. Goldman, Esq Telephone: (310) 552-1707 Telecopier: (310)552-7938 and r IXvw)al eo-nnpH 67 m 11.3 Benefit and Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto (and, in the one of Sections 6.9, 6.12 and 6.13, the parties specified therein) and their respective successors and permitted assigns; provided that (a) neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by Falcon or Sellers without the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed), and (b) neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by Buyer without the prior written consent of Sellers (which consent shall not be unreasonably withheld or delayed), except (i) Buyer may, upon notice to Sellers, assign all or a portion of is rights, but not its obligations, hereunder to an Affiliate of Buyer, as long as such assignment does not hinder ordelay the consummation of the transactions contemplated hereby and by the other Transaction Documents. Content shall be deemed to be reasonably withheld if the consenting party reasonably determines that the assignment would be reasonably likely to hinder or delay the Closing or adversely affect the payment of the Aggregate Consideration at the Closing or the performance of any covenants or agreements of Buyer. Buyer also agrees, that Sellers may distribute the Purchase Consideration or their right to receive the Purchase Consideration to their respective stockholders, partners and members. This Agreement is not intended to roofer upon any Person other than the parties hereto (and, in the case of Sections 6.9, 6.12 and 6.13, the ponies specified therein) any rights or remedies hereunder. oroirsuvr.exscvnora 68 Sherman & Howard 633 17th Street Suite 3000 Denver, Colorado 80202 Attention: Peggy Knight, Esq, Telephone: (303)299.8140 Telecopier: (303)298-0940 If to Buyer: Charter Communications, Inc. 12444 Powersomm Drive, Suite 100 St. Louis, Missouri 63131 Attention: Jerald L. Kent, President & C.E.O. (with a copy to Curtis S. Shaw, Senior Vice President and General Counsel) Telephone: (314) 965-0555 Telecopier: (314)965-8793 with a copy (which should not constitute notice) to: bell & Manella LLP 1800 Avenue of the Start, Suite 900 Los Angeles, California 90067-4276 Attention: Alvin G. Segel, Esq. Telephone: (310)277-1010 Telecopier: (310) 203-7199 11.3 Benefit and Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto (and, in the one of Sections 6.9, 6.12 and 6.13, the parties specified therein) and their respective successors and permitted assigns; provided that (a) neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by Falcon or Sellers without the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed), and (b) neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by Buyer without the prior written consent of Sellers (which consent shall not be unreasonably withheld or delayed), except (i) Buyer may, upon notice to Sellers, assign all or a portion of is rights, but not its obligations, hereunder to an Affiliate of Buyer, as long as such assignment does not hinder ordelay the consummation of the transactions contemplated hereby and by the other Transaction Documents. Content shall be deemed to be reasonably withheld if the consenting party reasonably determines that the assignment would be reasonably likely to hinder or delay the Closing or adversely affect the payment of the Aggregate Consideration at the Closing or the performance of any covenants or agreements of Buyer. Buyer also agrees, that Sellers may distribute the Purchase Consideration or their right to receive the Purchase Consideration to their respective stockholders, partners and members. This Agreement is not intended to roofer upon any Person other than the parties hereto (and, in the case of Sections 6.9, 6.12 and 6.13, the ponies specified therein) any rights or remedies hereunder. oroirsuvr.exscvnora 68 11.4 Further Assurances. After the Closing the parties shall take any actions and execute any other documents that may be necessary or desirable to the implementation and consummation of this Agreement upon the reasonable request of any other party, at the expense of the requesting pang 11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF). 11.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BYRY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF. 11.7 Sevembili . Any prevision (or portiontherml) of this Agreement that is prohibited or unenforceable in enyjudsdicdon shall, as to suchjurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portion ofsuch nrovisinn or the otherprovisions hereof and any such prohibition or unenforceability in anyjurisdiction shall (m the finl extent permitted by applicable law) not invalidate or render unenforceable such provision in any otherjurisdiction. Notwithstanding the foregoing, in the event of any such determination the effect of which is to affect materially and adversely any party, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled and consummated to the maximum extent possible. 11.8 Entire Agreement. This Agreement, the Disclosure Schedules and the Exhibits hereto, the other Transaction Documents to be delivered by the parties pursuant to this Agreement and the Confidentiality Agreement collectively represent the entire understanding and agreement between Buyer, Falcon and Sellers with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations between the parties. Buyer acknowledges that none of Falcon or Sellers has made any, or makes any, promises, representations, warranties, covenants orundertaldngs, express or implied, other than those expressly set forth in this Agreement, the other Transaction Documents and the Confidentiality Agreement. 11.9 Amendments, Waiver of Compliance, Copse nts. This Agreement may be amended and any provision of Ods Agreement may be waived; provided that any such amendment or waiver (a) will be binding upon Falcon or Sellers prior to the Closing only if such amendment or waiver is set forth in a writing executed by Falcon and Sellers, (b) will be binding upon Sellers after the Closing only if such amendment or waiver is set forth in a writing executed by Sellers and (c) will be binding upon Buyer only ifsuch amendment or waiver is set forth in a writing executed by Buyer. Y pcovuam axmmrory 69 4 11.10 Countemarts. This Agreement may be signed in counterparts with the same effect as if the signature on each counterpart were upon the same instrument. 11.11 Specific Performance. The partes recognize that in the event Sellers should refuse to perform at the Closing any of its obligations under the provisions of this Agreement, monetary damages alone will not be adequate. Buyer shall therefore be entitled, in addition to any other remedies which may be available, including money damages, to obtain specific performance of any of the obligations of the Sellers under the provisions of this Agreement to be performed at Closing, without the requirement of posting a bond or other security. In the event of any action to enforce this Agreement specifically pummant to this Section 11.12, Sellers hereby waive the defense that there is an adequate remedy at law. 11.12 Tax Consequences. No party to this Agreement makes my representation or warranty, express or implied, with respect to the Tax implications of my aspect of this Agreement on any other party to this Agreement, and all parties expressly disclaim any such representation or wmrantywith respect to any Tax consequences arising under this Agreement. Each party has relied solely on its own Tax advisors with respect to the Tax implications oft his Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURES ON FOLLOWING PAGES] rKavuauaeu�:vna+ 70 IN WITNESS WHEREOF, this Agreement has been executed by each of Buyer, Falcon and Sellers as of the date Cost written above. BUYER: SELLEU FALCON HOLDING GROUP, L.P. CHARTER COMMUNICATIONS, INC. By: Falcon Holding Group, Inc., By: General Partner Name: Canis S. Shaw 15 By: 1 Title: Senior Vice President Name: Stanley S. Itskowilch Title: Executive Vice President TCI FALCON HOLDINGS, LLC By: Name: Derek Chang Tide: Vice President FALCON NHHOLDING (GROUP, INC. By: C� 1c...—J.f . Name: Stamey S. Itskowitch Tide: Executive Vice President FALCON, ETRUST By: Nab e: 11. B. Nathanson Tide: Trustee DHN, INC. By: Name: Stamey S. Itskowitch Title: Executive Vice President FALCON: FALCON COMMUNICATIONS, L.P. By: Falcon Holding Group, L.P., General Partner By: Falcon Holding Group, Inc. General Partner By: a aL Name: Stanley S. Itskowitch Title: Executive Vice President By: TCI Falcon Holdings, LLC, General Partner By: Name: Derek Chang Title: Vice President (THIS IS A SIGNATURE PAGE TO THE PURCHASE AGREEMENT] IN WITNESS WHEREOF, this Agreement has been executed by each of Buyer, Falcon and Sellers as of the date first written above. SELLERS: BAYER: FALCON HOLDING GROUP, L.P. CHARTER COMMUNICATIONS, INC. By: Falcon Holding Group, Inc., By: General Partner Name: Curtis S. Shaw Title: Senior Vice President By: Name: Stanley S. Itskowitch Title: Executive Vice President TCI FALCON INGS, LLC By: Name: Derek Chan Title: Vice President FALCON HOLDING GROUP, INC. By: Name: Stanley S. liskowitch Title: Executive Vice President FALCON CABLE TRUST By Name: Marc B. Nathanson Title: Trustee DHN, INC. By: Name: Stanley S. Itskowitch Title: Executive Vice President FALL : FALCON COMMUNICATIONS, L.P By: Falcon Holding Group, L.P., General Partner By: Falcon Holding Group, Inc. General Partner By: Name: Stanley S. Itskowitch Title: Executive Vice President By: TCI Falcon Holdings, LLC, Gene Panner By: Name: Derek Cba Title: Vice President [THIS IS A SIGNATURE PAGE TO THE PURCHASE AGREEMENT) IN WITNESS WHEREOF, this Agreement has been executed by each of Buyer. Falcon and S,dm as of%be date fust written above, BUY FALCON HOLDING GROUP, L.P. CHARTER C MI JIC IS, INC. Falcon Holding Group, Inc., By: BY: Name: Sums General PermVice Title: Senior P[esidem By: Name: Stanley S. Itskowiich Title: Executive Vice Presiders FALCON TCI FALCON HOLDINGS, LLC FALCON COMMUNICATIONS, L.P. By: Falcon Holding GrenP, L.P ., By. General Partner Name: Derek Chang Title: Vice Presidem By Falcon Holding Croup, Inc. General Partner FALCON HOLDING GROUP, INC. By: Stanleyli S. jF.By Stanley S. Itskowirch Vice Prescient Title Exttutive Vice P[e>tdem Title Nem.: Title: Execudvc Vice President By: TCI Falcon Holdings, LLC, General Partner FALCON CABLE TRUST By .. Name: Derek Chang By, Name: Mar. B. Nathanson Tale, Title: Trwcc DHN, INC. By: Name: Stardey S. Itskowitch Title: Execmivc Vice President [MIS IS A SIGNATURE PAGE TO TTIE PURCHASE AGREEMENT] FIRST AMENDMENT TO PURCHASE AND CONTRIBUTION AGREEMENT THIS FIRST AMENDMENT TO PURCHASE AND CONTRIBUTION AGREEMENT ("Amendment") is made and entered into as of June 22, 1999 by and among Charter Communications, hie., a Delaware corporation ("CCI"), Charter Communications Holding Company, LLC, a Delaware limited liability company ("Chatter LLC"), Falcon Communications, L.P., a California limited partnership ("Falcon'), Falcon Holding Group, L.P., a Delaware limited partnership C FHGLP"), TCI Falcon Holdings, LLC, a Delaware limited liability company ('"fCr'), Falcon Cable Trust, a California trust ("FC Trust"), Falcon Holding Group, Inc., a California corporation ("FHGI" ), and DHN Inc., a California corporation (" DHN") (FHGLP, TCI, FC Trust, FHGI and DHN are sometimes referred to herein as "Sellers"). PRELIMINARY STATEMENT A. CCI, Falcon, and Sellers entered into the Purchase and Contribution Agreement on May 26, 1999 (the "Purchase and Contribution Agreement"). B. The parties hereto desire to modify the Purchase and Contribution Agreement in certain respects as described herein. Section 11.9 of the Purchase and Contribution Agreement provides that the Purchase and Contribution Agreement may be amended; provided that any such amendment will be binding on the parties prior to Closing only if set forth in a writing executed by them. C. Section 11.3 of the Purchaseand Contribution Agreement permits CCI to assign its rights, but not its obligations, under the Purchase and Contribution Agreement to an Affiliate of CCI under certain circumstances. CCI desires to assign its rights to purchase the Purchased Interests under the Purchase and Contribution Agreement to Charter LLC, and Charter LLC is willing to accept such assignment and assume the obligations of CCI under the Purchase and Contribution Agreement. Sellers consent to such assignment of CCI's rights to Charter LLC on the terms and conditions set forth herein. NOW, THEREFORE, the parties hereto agree as follows: 1. Except as otherwise provided in this Amendment, all capitalized terms used herein and not otherwise defined herein shall have the same meanings assigned to them in the Purchase and Contribution Agreement. As used in the Purchase and Contribution Agreement, the tens "Charter LLC" shall have the meaning given to it in this Amendment. 2. Subject to the terms set forth herein, (a) CCI assigns, transfers and conveys to Charter LLC any and all rights of CCI under the Purchase and Contribution Agreement to purchase the Purchased Imerests; (b) Charter LLC accepts such assignment and assumes and undertakes to discharge, satisfy and perform all obligations of CCI under the Purchase and Contribution Agreement; and (c) Sellers consent to such assignment. This assignment and assumption shall not (i) relieve CCI ofany liability or obligation as Buyer under the Purchase and Contribution Agreement; or (it) deprive Sellers of any rights or benefits under the Purchase and Contribution Agreement. Upon such assigmnem, the term's.ye' as used in the Purchase and Contribution Agreement shall include Charter LLC, to the extent applicable as purchaser of the Purchased Interests, as well as CCI. Charter LLC's assumption of the obligations of CCI under the Purchase and Contribution Agreement is intended to be for the benefit of, and shall be enforceable by, Sellers. 3. Clause (5) of Section 2.1(a) of the Purchase and Contribution Agreement is hereby amended to read in its entirety as follows: from FHGLP, all of the capital stock in Enstar, its entire membership interest in Eater Finance Company, LLC, and its entire membership interest in CC VII, LLC, a Delaware limited liability company ("CC VII, LLC"); and 4. The term "Minimum Contributed interest" as defined in the fourth sentence of Section 2.1(b) of the purchase and Contribution Agreement is hereby amended to be not less than 45.3% of FHGLP's partnership interest in Falwn. 5. Clause (i) of Section 2.3(b) of the Purchase and Contribution Agreement is hereby amended to read in its entirety w follows: the value of the Aggregate Consideration allocated to FHGLP with respect to its partnership interest in Falcon in Part III of the Allocation Notice, and 6. Section 4 of the Purchase and Contribution Agreement is hereby amended as follows: (a) by amending the parenthetical clause of the first paragraph of such Section to read in its entirety as follows: (with respect to such Seller and not with respect to any other Seller, and only FHGLP makes the representations and warranties in Sections 4.4(b), 4.7 and 4.9) (b) by adding the following new subsection 4.9 to the end of such Section: 4.9 CC VII, LLC was duly formed as a limited liability company under the laws of the State of Delaware and is validly existing and in good standine under me laws of the State of Delaware. FHGLP is the record and beneficial owner of each issued and outstanding Equity Interest of CC VII, LLC. FHGLP has formed CC VH, LLC solely to hold the interest in Falcon to be transferred to it pursuant to Section 6.6(g) hereof and to exercise all rights and perform all obligations pertaining thereto. At no time prior to Closing will CC VH, LLC conduct any business activities or other operations of any kind, or hold any asset other than the interest in Falcon, or become liable for any obligation except its obligation under the Agreement. At all times since its formation, CC VH, LLC has been treated for federal income tax purposes as a disregarded entity under Treasury Regulations § 301.7701-3(b)(1)(ii). 3 10 7. Section 5.6 of the Purchase and Contribution Agreement is hereby amended to read in its entirety as follows: The ownership chert of CCI and its Subsidiaties included as Schedule 5.6 is true and correct in all material respects. Without limiting the generality of the foregoing, CCI is, and as of the Closing either CCI or Charter LLC will be, the record and beneficial owner of all of the issued and outstanding Equity Interests of Charter Holdings, and CCI is, and as of the Closing CCI will be, the record and beneficial owner of all of the issued and outstanding Equity Interests of Charter LLC. 8. Section 6.1(a) is hereby amended by adding the following new subparagraph (1): (10) Tax Status of CC VB. LLC. Take any action that would cause CC VH, LLC to be treated for federal income tax purposes as an entity other than a disregarded entity under Treasury Regulations § 301.7701-3(b)(1)(ii). 9. Clause (I) of Section 6.6(c) of the Purchase and Contribution Agreement is hereby amended to read in its entirety as follows: the definitive Charter LLC Operating Agreement to be effective upon the Closing in accordance with the terms set forth on Exhibit D, with such changes as are appropriate to reflect the assignment by CCI to Chatter LLC of the right to acquire the Purchased Interests, and such additional terms as Buyer and FHGLP may mutually agree, 10. Section 6.6 of the Purchase and Contribution Agreement is hereby amended by adding the following new paragraph (g): (g) On or prior to the Closing, FHGLP shall contribute a one percent (1%) limited partnership interest in Falcon to CC VII, LLC, free and clear of all Encumbrances and subject to the Legal Restrictions. 11. Clause (i) of Section 6.10(h) of the Purchase and Contribution Agreement is hereby amended to read in its entirety as follows: the Cash Consideration allocable (pursuant to Section 2.3(d)) to the membership interest in CC VIL LLC and to the partnership interests in Falcon other than the Contributed Interest, 12. For purposes of this paragraph 12, each of CCI and Charter LLC is refered to as a'Buyer" and CCI and Charter LLC are referred to collectively as the "Buyers." CCI and Charter LLC agree that all obligations specified in the Pumbase and Contribution Agreement as obligations of CCI, including the obligation to pay the Aggregate Consideration and any other amounts payable to Sellers, whether to be performed at, before or after Closing, shall be joint and several obligations of CCI and Charter LLC. All such obligations, including those to pay money, including, without limitation, the Cash Consideration, may be enforced by Sellers against either Buyer individually, and such enforcement shall not be conditioned or contingent upon the -3- pursuit of my remedies against the other Buyer. Each Buyer hereby waives diligence, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the other Buyer, any right to require a proceeding fust against the other Buyer, the benefit of discussion, protest or notice and all demands whatsoever, and covenants that this agreement will not be discharged as to any obligation except by satisfaction of such obligation in full. Until Sellers have been paid in full any amounts due and owing to them under this Amendment and the Purchase and Contribution Agreement, each Buyer hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against the other Buyer that arise from the existence, payment, performance or enforcement of its obligations under this Amendment or the Purchase and Contribution Agreement, including, without limitation, any right of reimbursement, exoneration, contribution, indemnification, any right to participate in any claim or remedy of any Seller against the other Buyer or any collateral that any Seller hereafter acquires, whether or not such clam, remedy or right arises in equity, or under contact, statute or common law, including, without limltedon, the right to take or receive from the other Buyer, directly or indirectly, in cash or other property or by set-off in any other manner, payment or security on account of such claim or other rights. To the fullest extent permitted by applicable law, the obligations of each Buyer under this Amendment and the Purchase and Contribution Agreement shall not be affected by (a) the failure of rhe applicable obligee to assert any claim or demand or to enforce any right or remedy against the other Buyer pursuant to the provisions of this Amendment or the Purchase and Contribution Agreement or otherwise, (b) any rescission, waiver, amendment or modification of, or any release from any ofthe terms or provisions ofthis Amendment or the Purchase and Contribution Agreement or the invalidity or unenforceability (in whole or in pan) of this Amendment or the Purchase and Contribution Agreement, unless consented to in writing by Sellers, each Buyer, and Falcon and (e) any change in the existence (corporate or otherwise) of either Buyer or any Seller or any insolvency, bankruptcy, reorganization or similar proceeding affecting any of them or their assets. 13. Exhibit F to the Purchase and Contribution Agreement is hereby amended in its entirety as set forth on the attached Exhibit 1. 14. The parties hereby agree that the Purchase and Contribution Agreement is hereby deemed amended in all respects necessary to give effect to the consents, agreements and waivers contained in this Amendment, whether or not a particular Section or provision of the Purchase and Contribution Agreement has been referred to in this Amendment. Except as amended hereby, the Purchase and Contribution Agreement shall remain unchanged and in full force and effect, and this Amendment shall be governed by and subject to the terms of the Purchase and Contribution Agreement, as amended hereby. From and after the date of this Amendment, each reference in the Purchase and Contribution Agreement to "this Agreement, "hereof," "hereunder"or words of like import, and all references to the Purchase and Contribution Agreement in any and all agreements, instruments, documents, notes, certificates and other writings of every kind and nature (other than in this Amendment or as otherwise expressly provided) shall be deemed to mean the Purchase and Contribution Agreement, as amended by this Amendment, whether or not such Amendment is expressly referenced. (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK: SIGNATURES ON FOLLOWING PAGES] -4. IN WITNESS WHEREOF, this Amendment hasbeca executed by each ofCC4 Ch,WLLC, Palo= and Sellers m ofthe data fast written above. E rM M: FALCON HOLDING GROUP, L.P. CHARTER CONWUNICATIONS, INC. By: Falcon Holding Group, Inc., By: Name: Curds S. Shaw General Partner ` Title: Senior Vice President By: c4 Name: Stanley .ltakowitch CHARTER LLC: Title: Executive Vice President CHARTER cowWUNICATIONS TCI FALCON HOLDINGS, LLC HOLDING COMPANY, LLC BY: B Name: Derek Chang By: Nam e: Cortfs S. Shaw Title: Vico President Title: SeoiorVice President FALCON HOLDING GROUP, INC. By: �JFC Name: Stanley Ibkowitch Title: Executive Vic.Presidmt FALCON LE By: N p. are B. Nathaman Tit : Trustee DHN, INC. By: Nam St . Wkowlteh Title: Executive Vice President FALCON: FALCON COMMUNICATIONS, L.P. By: Falcon Holding Group. L.P., GenvalPazm.r By: Falcon Holding Group, Inc. General Paage By: k Name: Staple S. Itskowitch Title: Executive Vice President By: TCI Falcon Holdings, LLC, General partner By: Nane: Derek Chang Title: Vice President [THIS IS A SIGNATURE PAGE TO THE AMENDMENT] IN WITNESS WHEREOF, this Awmdmant bas bcca executed by each of CCI. Chem LLC, Falcon rad SCUM as of the due Em written above. SELL FRS:' FALCON COMMUNICATIONS, L.P. FALCON HOLDING GROUP, L.P. CHARTER COMMUNICATIONS, INC. By: FalconHoldiag Group, lM, By: General Puma Name: Cunis S. Shaw Title: Sector Via President By: Name: Stanley S. Itskowirch Name: Stanley S. lukowitch Title: EXMLLt1Ve Via Pmidmi S26RjEAAJJ.C: By: CHARTER COMMUNICATIONS TCI FALCON HOLDINGS, LLC HOLDINO COMPANY, LLC By. BY: SM Namc: Derck Chang Name: Cmri Title: Vice Presideu Tide: Seedor Vicapadeat FALCON HOLDING GROUP, INC. By: Name: Stanley S. hskowitch Tide: Executive VicePreideni FALCON CABLE TRUST By: Name: Mutt B. NamansoR Lde: Trance DHN. INC. By: N.mr C,.nbe a I, ec;;tiCe Tide: Eaecuuva Vice Presi l m FALCON: FALCON COMMUNICATIONS, L.P. By: Falcon Holding Group, L.P.. Oenual Pamec By: Falcon Holding Group, Inc. Genual Panner By: Name: Stanley S. lukowitch Tide: Executive Vice President By: TCI Falcon Holdings. LLC. General Palmer By: Nems: Detek Cheng Tide. Via President [THIS IS A SIGNATURE PAGE TO THE AAffNDMFNT) IN WITNESS WHEREOF, this AmeAnetbubem excvtedby eachofCCI, Charter LLC, Moon and Sellas as ofrhe date &St written above. SELLERS' FALCON HOLDING GROUP, LP. CHARTER COMMUNICATIONS, INC. By-, FMcanBoldmg Gmup,loo., By: GmesM Panner Name: Curtis S. Sbaw Title: Senior Vim Presidem By: Name: Smaley S. hskowiteh Title Executive VicePresidem TCIFALCO }Qk�IN�S,J C By. G�/vf\' C_ Nmne: Derck Tide: Vice Aesdeat FALCON HOLDING GROUP, INC. By. Name: Stanley S. hskowitch Title: ExewtiveVicaPreaidmt FALCON CABLE TRUST By Name: Marc B.Nathansoa Tide. Trustee DUN, INC. By Namc. Stanley S. lUkowitch Tide: ExecudveVicePresideot _SaA CHARTER COMMUNICATIONS HOLDING COMPANY. LLC BY Name Curtis S. Shaw Title: Smor Vioe reri(IMU FALCON: FALCON COMMUNICATIONS, LP. By: Falcon Holding Group, LP., Gmeml Paha By: FMwaHolding Group,luc. GenerMParmer BY• Name: Stanley S. I skwitch ice press Title: Exavli.e Vice president By; Faiw-1111 idii,aw LLC. Gm By: Name: Derek Chang Title: VicePraddem [TH[S IS A SIGNATURE PAGE TOTHBAhdMWMWTI Exbikitl — MMU FORM OF ALLOCATIONNOTICE (ExmPle) I. PertentageofFHGLFsPnmer,hip int in Felmn npfeaennd by the Contribmeil Innen: IL Aggngage Considention basal on P liminary Clasm6 Sotmonn Las payment n Encore Escrow Aggregate Con,idemtion payable to Shceto III. Allacmion ofAggregaw Considcntion based on 0eliminary Closing slelement FHGLP, with respect to the nock ofEn9ar: I DHH, with nrpect to in intaren in Adlink: 1 All,opttinn of Penta Shan Remaining fd A_n,,g_aq' AA,,00 Con:idenron Cnnsmennan FHGLP: Wit], Ta ct to its membenhip unionist N CC VII, LLC With eespoa to in Paamenhip ints tin Faleon Total to FHGLP TCI FC Try t % % FHGI Total IW.WWW%° IV. Equity Valuc V. Paymem of Cash Panion of Closing Paymenb FHGLP [win instructions) TCI [wiminmctions) FCTmn Jwwe inmunions] FHGI [win insnuawitil Tow VI. P.Mint to StIlen of Fwd, from Adjusenem Escrow A...: FHGLP % TO % FCTmn % FHGI % Total lotr(K)()00ooa Schedule Description Schedule l.l(a) Falcon Companies Schedule 1.1(b) Headquarters Employees Schedule l.l(c) Buyer Knowledge Schedule l.l(d) Falcon Knowledge Schedule 1.1(e) Material FCC Consent Schedule 1.1(f) Designated Franchises Schedule 3.3 Organization and Ownership of the Falcon Companies Schedule 3.4 Absence of Conflicting Agreements; Consents Schedule 3.6 Absence of Undisclosed Liabilities Schedule 3.7 Absence of Certain Changes Schedule 3.8 Franchises, Licenses, Material Contracts Schedule 3.9 Title to and Condition of Real Property and Tangible Personal Property Schedule 3.10 Intangibles Schedule 3.11 Information Regarding the Systems Schedule 3.12 Taxes Schedule 3.13 Employee Plans Schedule 3.14 Environmental Laws Schedule 3.15 Claims and Litigation Schedule 3.16 Compliance with Laws Schedule 3.17 Transactions with Affiliates Schedule 3.20 Overbuilds; Competition Cchedule3.21 Disconnections Schedule 323 Budgets Schedule 4.3 Absence of Conflicting Agreements; Consents Schedule 4.4 Title to Purchased Interest and Contributed interest Schedule4.5 Claims and Litigation Schedule4.6 Certain Fees Schedule 5.4 Claims and Litigation InI DISCLOSURE SCHEDULES TO THE PURCHASE AGREEMENT DATED AS OF MAY 26,1999 BY AND AMONG CHARTER COMMUNICATIONS, INC., FALCON COMMUNICATIONS, L.P., FALCON HOLDING GROUP, L.P., TCI FALCON HOLDINGS, LLC, ,. FALCON CABLE TRUST, FALCON HOLDING GROUP, INC., y AND DHN, INC. r 1. 2. 3. 4. 5. 6. 7. S. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. SCHEDULE 1.1(a) Falcon Companies Falcon Communications, L.P. Falcon Cable Communications, LLC Falcon Funding Corporation Falcon Media Investors Group, a California Limited Partnership Falcon Cable Media, a California Limited Partnership Falcon Community Investors, L.P., a California Limited Partnership Falcon Community Cable, L.P., a Delaware Limited Partnership Falcon Community Ventures I Limited Partnership Falcon Telecable Investors Group, a California Limited Partnership Falcon Telecable, a California Limited Partnership Falcon Telecom, L.P. Falcon Cablevision, a California Limited Partnership Falcon Investors Group, Ltd., a California Limited Partnership Falcon Cable Systems Company II, L.P. Falcon Video Communications Investors, L.P. Falcon View Communications, L.P. Wilcat Transmission Co., Inc. Falcon First Inc. Falcon First Cable of New York, Inc. Plattsburgh Cablevision, Inc. Ausable Cable TV, Inc. Falcon First Cable of the Southeast, Inc. Falcon First Holdings, Inc. FF Cable Holdings, Inc. Cedar Bluff Cablevision, Inc. Eastern Mississippi Cablevision, Inc. Lauderdale Cablevision, Inc. Scottsboro Cablevision, Inc. Athens Cablevision, Inc. Dalton Cablevision, Inc. Multivision of Commerce, Inc. Multivision Northeast, Inc. Scottsboro TV Cable, 1 . Athens Acquisitions, Inc. Falcon Equipment Company, LLC 212 Seventh Street, Inc. SCHEDULE 1.1(a)- Page I Schedule Description Schedule 5.6 Charter Ownership Chart Schedule 5.9 Charter Financial Statements Schedule6.1 Operation of Business Prior to Closing Schedule 6.18 TO Arrangements r SCHEDULE I.1(b) Headauwm Emplovegs Attached hereto is a list of Headquarters Employees w of the date of the Agreement. SCHEDULE I.1(b)—Page 1 HAY -24-99 HON 04:02 Ph FAX NO. FALCON COMMUNICATIONS L.P. CORPORATE EMPLOYEES PASADENA OFFICE AS OF 5123199 NAME Adams, Donna Made CASH MANAGEMENT COORDINATOR Alvarez, Erwin Benner PROJECT MANAGER -MIS Barrio, Patricia Evelyn ACCOUNTS PAYABLE FILE CLERK Benton, Harlan D. IS TECHNICIAN Berry, Karen Lynn DATABASE MANAGER Slevin, Donna Elaine COMPUTER OPERATOR Brims". Patricia C. STAFF ACCOUNTANT Grew, Johnny E. CASH ACCOUNTING CLERK Cao, Julia K. TAX MANAGER Chavez, Christina T ACCOUNTS PAYABLE SUPERVISOR Cho, Frances Y. REGIONAL ACCOUNTING MANAGER Chong, Pee Y CONTROLLER Chau, Julie U Hua REGIONAL ACCOUNTING MANAGER Cooke, Les Anne SR. CONT ROLLEWDIRECTOR OF FINANCIAL REPORTING Crespo, Abel C WACORPORATE CONTROLLER Do, Dan Thien DIRECTOR OF INVESTOR RELATIONS Ellis, Chrislopher D. CORPORATE OFFICE MANAGER Fadly, Ihab PROJECTS MANAGER Frits, Phoenicia C STAFFACCOUNTANT Fox, James LEGAL LIBRARIAN Gomez. Gilberto N DIRECTOR OF BUDGETING Goren, Glenn H. MAIL ROOM STOCK CLERK Gcen9m, David MAIL ROOM STOCK CLERK Guevara, Raul Fernando CORPORATE CASH ACCOUNTANT Hale, Jamal R. DOCUMENT COMPLIANCE COORDINATOR Hogue, Veronica A REGIONAL ACCOUNTING MANAGER Hong, John S. DATABASE ANALYST Hsu. Ms. Yen M. STAFFACCOUNTANT Jester, Michael Kent RATE REGULATION MANAGER Jungers, ENzabeth Ann REGIONAL ACCOUNTING MANAGER Khooda. Raymond TECHNICAL SPECIALIST Lam=Uy, Tina M. PAYROLLSUPERVISOR Lee, Keiherine Mo -Chino_ REGIONAL ACCre INTINGMA IAS -R Lecm, Sylula M ACCOUNTS PAYABLE CLERK Louie, Tracy Yrp PAYROLL CLERK Maclas,Victor R. BUDGET ANALYST Wider, Donald P. CONTROLLER Mede], Eno RATEREGULATIONANALYST Mendoza, Josofino B. REGIONALACCOUNTING MANAGER Menesey, Michael Kevin EXEC. VPICFO Meyerhotrer, Layne S. PAYROLL CLERK Navarro, Noel REGIONAL ACCOUNTING MANAGER Ng,Kwok Mei ADMINISTRATIVEASST. Ng, CheukK DIRECTOROFTAX Nghe, Kehi STAFF ACCOUNTANT Nickson. Pamela C. RECEPTIONIST Nome, Gloria SR. CONTROLLER/DIRECTOR OF PAYROLL Opsrow i. Anile L PROGRAM ACCOUNTANT Oebome, Eliubeth ADMINISTRATiVEASST. Ie+f-24-1999 19:03 P. 02 ' ed r MAY -24-99 NON 04:02 PN FAX NO. P. 03 FALCON COMMUNICATIONS L.P. CORPORATE EMPLOYEES PASADENA OFFICE AS OF 5=155 NAME Oscar, Francine N. Paremzan, Robert E. Phiong,Cynthia Pilapil, Maia Joyce Polchanalayperuk, Nisand Reyes, Sylvia Victoria Richter, Douglas Philip Rodriguez. Loretta Rodriguez, Magdalena M. Saanz,Judilh Sarkisslan, Silva Sditrtino, Laura Slovaxava, Hama Taylor, Judith M. Teguh, Meliana D. Thompson, Robin Goose TON. Joseph Steven Walla, Bhupinder Singh Wang, Michelle Hsueh Shu Wu, Lomnne Tuyet Yang, Judy Yilma, Senait Yip, Syne I" PC -AN TECH.SPECIAUST STAFF ACCOUNTANT REGIONAL ACCOUNTING MANAGER PAYROLL CLERK PURCHASING ACCOUNTANT MIS MANAGER CONTRACT PROGRAMMING CLERK ACCOUNTS PAYABLE CLERK LEAD AIP CLERK BENEFITS COORDINATOR ACCOUNTS PAYABLE CLERK TAX CLERK CORPORATE TAX ACCOUNTANT REGIONAL ACCOUNTING MANAGER ADMINISTRATIVEASST. DIRECTOR OF MIS PROGRAMMERIANALYST STAFF ACCOUNTANT REGIONAL ACCOUNTING MANAGER STAFF ACCOUNTANT CONTROLLER REGIONAL ACCOUNTING MANAGER NAV -24-99 NON 04.02 PN FAX NO. P• 04 puFpxcOMMut PONS Ll. CC/ MUMEMKOYEM V2SM'COU OFf%S A4 CFSRN3 TI11'�iM13 r Jerald L. Kent Kent D. Kal swarf Curtis S. Shaw SCHEDULE 1.1(c) B ver Ka led SCHEDILE 1.1(c)— Per 1 Marc B. Nathanson Frank J. Intiso Stanley S. Itskowitch Michael K. Menerey Joe A. Johnson Thomas J. Hatchell Raymond J. Tyndall Howard J. Gan Martin B. Schwartz SCHEDULE LI(d) mon Knowleft w r SCHEDULE I.1(d) — Page l r SCHEDULE 1.1(e) Material FCC Consent Consents for the transfer of control of the CARS licenses on Schedule 3.8. SCHEDUIX 1.1(e)—Nage 1 SCHEDULE LI(I) Desimtated Fra nhiaea Franchise sure Subscribers Belmont MS 629 Castroville TX 645 Cedartown GA 3159 Chincoteague VA 2067 Cohutta GA 402 College Place WA 1680 Dalton GA 8004 EI Dorado Springs MO 1176 Eldon MO 1176 Galled TX 652 Ironton MO 558 Kitty Hawk NC 2311 Kure Beach NC 911 Lake Ozark MO 695 Lakeview OR 863 Lincoln County (Eubank) KY 450 New Madrid MO 1006 Palacios TX 1252 Pleasanton TX 1224 Polk County (Cedartown) GA 4237 Pulaski Co. (Burnside) KY 5037 Ringgold GA 691 Three Rivers TX 404 Toledo OR 1056 Warsaw MO 929 White Salmon WA 594 Whitfield County GA 12935 Schedule 1.1(f)—Page 1 Y } ( � ; ƒ , { . - $! 7:!»»f pips,, :4 b -» / G© WOM ee�®Ceg2m NotJ00% e, d! !wG none Hy - /\S&///// \;E |q. 9!! _« \EWHNS2;§ ,G= ( i//\ta |{Eg{/ \ R { « ! ! Y r �u m m 3n 12 3d En I ; p, a; 88 88 S _i. g= < DD p a` 3 S' � D D ffl� fes) A A O n n f) 30 g G a 3 3a Ez a fz a n x En <3a a;a � <�p a t ya aop aop oy on o3� 03 o n is z� z� �e na % 00 e a o Wei3, S p3_r.3 33 ry3,ne �n9� � 3S'3 ,na30 33`_'n 3? r33 39n 3 �n $ 95'95' F.g OR Y r !; �!■ami=�. .loam, � / `z5z; � : (.•�RRw.\` E!/ ( ƒ �K|§ f{| : ! � A !!!§!!f !! f § \ � / § . | . \ ( : A !! f § . | . ( SCHEDULE 3.4 Absence of Conflicting Agreements- Consents CONFLICTING AGREEMENTS: 1. Consummation of the sale of the Purchased Interests and the Contributed Interest will require Falcon to commence an Offer to Repurchase under the Indenture within 30 days after the Closing at a purchase price equal to 101%of the principle meant thereof in the case of the Senior Debenture and 101%of the Accreted Value thereof in the case of the Senior Discount Debentures in each case plus accused and unpaid interest (if any). 2. Consummation of the We of the Purchase Interests and the Contributed Interest will result in an Event of Default under the Credit Agreement. 3. Traza neva Limited Partnership has a right to purchase the interest held by Falcon Telecable in Falcon Lake Las Vegas Cablevision, L.P. in the event that Falcon Telecable is not controlled by Marc Nathanson. 4. Consmmnation of the sale of the Purchased Interests and the Contributed interest will result in a Termination Event, as defined in the Interest Rate Swap Agreement described in Schedule 3.6, item 6(u), and may result in a Termination Event, as defined in the other Interest Rate Swap Agreements described in Schedule 3.6. 5. Unless CSG consents to the Falcon CSG Billing Agreement (See Schedule 3.8, Contracts, Item 2) continuing in full force and effect after the Closing, the Falcon CSG Billing Agreement will be terminated concurrent with the Closing. CONSENTS: 1. Certain Franchises See attached list. CARS Licenses listed on Schedule 3.8 Material Contracts a. Nntiee �n the randlnryt_.;derthe Lease Agree=-, deed as o1jun; 25 119,2'by and between Sumitomo Life Realty (N.Y.), Inc. and Falcon Communications, L.P. b. Notice to landlord under the Office Lease, dated as of December, 1998, by and between Raymond Business Center and Falcon Cable Communications, LLC C. Consent of limited partners owning more than 50% of the total outstanding units held by limited partners is required under the Amended and Restated Agreement of Limited Partnership ofFalcon/Capital Cable Partners, L.P. d. Consent of the Purchasers of the MONY Notes is required to consummate the purchase and sale of the Purchased Interests and the Contributed Interests and to release FHGI and FHGLP from the related Second Restated Subordination Agreement. SCHEDULE 3.4 — Page 1 (M. SCHEDULE 3.4 FRANCHISE CONSENTS a NO _.... . Gnnon OeacM1 - - 00. Gpe CM1arks VA Gpe GirSN::u _ NA _ _ Qnlrevllk MC LleUumas C_o_uny__-- CR Co eman MI COIIugejG.Cfty OR OR._—_ SCHEDULE 3.4 FRANCHISE CONSENTS KiOaosvllb NC Kam Counry._. _ __a.. c avalUManna 9lallon KMDs WA _ l Hlas NO Mmh Fees .t CR_ r Mau (Naval PoslBna. $oll Moss CA _ _ LeawmxatlM1 � • _ • . WA Lewis Linwln Cky— .•—.._._._ ..—... __ .. OR Loa Myelas Co(HWden Hills) CA -- �G - Lm"Counry(MeEbu)-- -- M,noM ..... Mallett CA Minlee NC SCHEDULE3.4 FRANCHISE CONSENTS Pellet Caunry PeiMMbn PoIeFkI Ce_(_NeM) �... __ puaen MnW CcuiM1y 4404._. MO - _. -_. RlN WA WA lekntl-� - Rook kls WA 0444_. _.._..__.__ R.HBaacn _.. _. _.. R .6. HAI41 NC _ _ _ _ ftuNnRetC CalNge_ � NC San 9enXO Cauery _,_ San Sam C..(naoa.LMNXeIan) CA San Bim. CO. (C.Bam) CF San Bam. Cc.(U-An& CA 0000 San Bam. Ce. (SI CA 0044 ., Lakej Sen Bim. Co. (SIN., bke) G 0444—.. _._.._._...._._ San Dem. CO. (NnpXMootl) CA _ Sen Juan CA sen bi po 0000 ...__._._.. s rwa- -os Sella Ba%92 Co. (Lm Rlemos) .G NY BNusw. FeYS _ .__ NY _ 0000_ _ 4444._. 4400 ._. .. _ $COMbm A $BWellan___.., 004,4 _.FL OR _ __. 0040. 0404 0004 __.-DR _ r SCHEDULE 3.4 FRANCHISE CONSENTS VA ... weniMgw WA wwp6m _. AM W .iiwt -... . Ni mswm-" __ 4x County wo - NL- -mo wlwwiON9s WnoElkke CA _ YeWc CR Yekbn. wA .... SCHEDULE 3.6 Absence of Undisclosed Liabilities 1. Series A and Series B 8.375% Senior Debentures, due 2010 and Series A and Series B 9.285% Senior Discount Debentures, due 2010 and related Indenture, dated as of April 3, 1998, by and among Falcon Holding Group, L.P., Falcon Funding Corporation and United States Trust Company ofNew York. 2. Credit Agreement, dated as of lune 30,1998, by and among Falcon Cable Communications, LLC, Falcon Cable Media, a California Limited Partnership, Falcon Cable Systems Company R, L.P., Falcon Cablevision, a California Limited Partnership, Falcon Community Cable, L.P., Falcon Community Ventures I Limited Partnership, Falcon First, Inc., Falcon Telecable, a California Limited Partnership, Falcon Telecom, L.P., BancBoston, N.A., The Chase Manhattan Bank, NationsBank, N.A., Toronto Dominion (Texas) Inc. and Bank of America, N.T. & S.A. 3. 11.56% Series A Subordinated Notes, due March 31, 2001 and 11.56% Series B Subordinated Notes, due March 31, 2001 issued to AUSA Life Insurance Company, Inc. ("AUSA") and MONY Life Insurance Company of America ("MONY") issued under that certain Note Purchase and Exchange Agreement, dated as of October 21, 1991, between Falcon Telecable, a California limited partnership, AUSA and MONY, as amended. 4. Intercompany Indebtedness among the Falcon Companies. 5. The Financial Statements together with the notes attached thereto, are incorporated herein by this reference. 6. Interest Rate Swap Agreements a. International Swap Dealers Association, Inc. Master Agreement, dated as of September 30, 1998, by and between Falcon Cable Communications, LLC and ABN AMRO Bank N.V. b. International Swap Dealers Association, Inc. Mazter Agreement, dated as of October 2, 1998, by and between Falcon Cable Communications LLC, and 7muaiu Dominion (Texas), Inc. C. Falcon Cable Media Et. Al. (Toronto -Dominion), date unavailable d. International Swap Dealers Association, Inc. Master Agreement, dated as of February 18, 1988, by and between Falcon Cable Media and BankBoston, f/k/a/ The First National Bank of Boston e. Falcon Cable Media LP (Toronto -Dominion), 2/18/88 E International Swap Dealers Association, Inc. Master Agreement, dated as of October 4, 1996, by and between ABN AMRO Bank N.V., Falcon Cable Media, Falcon Cable Systems Company II, L.P., Falcon Cablevision, Falcon SCHEDULE 3.6 —Page 1 Community Cable, L.P., Falcon Community Ventures I Limited Partnership, Falcon First, Inc., Falcon Telecable and Falcon Telecom, L.P. g. International Swap Dealers Association, Inc. Master Agreement, dated as of August 9, 1996, by and between The Chase Manhattan Bank and Falcon Cable Systems Company h. International Swap Dealers Association, Inc. Master Agreement, dated as of November 19, 1996, by and between Falcon Cable Systems Company II, L.P. and NationsBank of Texas, N.A. L International Swap Dealers Association, Inc. Master Agreement, dated as of October 13, 1987, by and between The Toronto -Dominion Bank New York Bank, New York Branch and Falcon Cable Systems Company j. International Swap Dealers Association, Inc. Master Agreement, dated as of October 13, 1987, by and between Falcon Cablevision and BancIdoston fWa The First National Bank of Boston k. International Swap Dealers Association, Inc. Master Agreement, dated December 28, 1995, by and between Falcon Cablevision and Chase Manhattan Bank 1. International Swap Dealers Association, Inc. Master Agreement, dated as of October 26, 1995, by and between Falcon Community Ventures I Limited Partnership and Canadian Imperial Bank of Commerce M. International Swap Dealers Association, Inc. Master Agreement, dated December 20, 1995, by and between Falcon First Inc. and Chase Manhattan Bank n. International Swap Dealers Association, Inc. Master Agreement, dated as of October 21, 1996 by and between Falcon First Inc. and Fleet National Bank o. International Swap Dealers Association, Inc. Master Agreement, dated as of iviay 12, 1995, by and between Falcon Telecable, a California limited partnembip and NationsBank, N.A. (Carolinas) P. International Swap Dealers Association, Inc. Master Agreement, dated as of January 29, 1993, by and between NationsBank of Texas, N.A. and Falcon Video Communications, L.P. q. International Swap Dealers Association, Inc. Master Agreement, dated as of January 29, 1993, by and between Falcon Video Communications, Limited Partnership and Canadian Imperial Bank of Commerce r. International Swap Dealers Association, Inc. Master Agreement, dated as of September 27, 1992, by and between Falcon Video Communications LP and y Credit Lyonnais New York Branch SCHEDULE 3.6 —Page 2 s. International Swap Dealers Association, Inc. Master Agreement, dated as of September 29, 1998, by and between Falcon Video Communications, L.P. and Union Bank of California, N.A. t. International Swap Dealers Association, Inc. Master Agreement, dated as of October 6, 1998, by and between Falcon Cable Communications, LLC and Union Bank of California, N.A. U. International Swap Dealers Association, Inc. Master Agreement, dated as of October 6, 1998, by and between Falcon Cable Communications, LLC and The Fuji Bank, Limited, Los Angeles Agency. V. International Swap Dealers Association, Inc. Master Agreement, dated as of October 2, 1998, by and between NationsBank, N.A. and Falcon Cable Communications, LLC W. International Swap Dealers Association, Inc. Master Agreement, dated as of October 5, 1998 by and between Fleet Bank, N.A. and Falcon Cable Cormaunications, LLC X. international Swap Dealers Association, Inc. Master Agreement, dated as of the Trade Date of the First Transaction, by and between Rabo Capital Services, Inc. and Falcon Cable LLC SCHEDULE 3.6 —Page 3 SCHEDULE 3.7 Absence of Certain Chance=. 1. Pursuant to an Asset Purchase Agreement, effective as of September 11, 1998, by and between Falcon Cablevision and Carson Communications, L.L.C., certain tangible and intangible assets of its cable systems located in Elwood, Hiawatha, Highland, Troy and Wathena, Kansas were sold. 2. Pursuant to a Formation and Contribution Agreement entered into as of October, 1998, by and among Bend Communications, Inc. ('Bend'), Central Oregon Cable Advertising, Inc. ("COCA") and Falcon Community Cable, L.P. ('Falcon Community"): (i) Falcon Community and BCC formed a new limited liability company and contributed to such limited liability company their respective cable television systems serving the Bend, OR and Redmond, OR areas, and (ii) Falcon Community and COCA formed a new limited liability company and contributed to such limited liability company their respective contracts with advertisers (in the case of Falcon Community, only those relating to the cable television system serving the city of Redmond, OR) to provide advertising services in the cable systems in Bend, OR and Redmond, OR and their equipment related to production and input of vi -deo material. 3. Pursuant to an Asset Exchange Agreement, dated as of March 22, 1999, by and between Falcon Cablevision, a California limited partnership and Insight Communications Company, L.P., certain tangible and intangible assets of the Scottsburg, W system were exchanged for a cable system located in Fmnldin, VA. 4. Pursuant to an Asset Purchase Agreement, effective as of Match 2, 1999, by and between Ence Communications, Inc. and Falcon Telecablc, a California limited partnership, Falcon Telecable acquired certain tangible and intangible assets of a cable television system in the City of St. George, UT. 5. Pursuant to an Asset Purchase Agreement, dated as of December 1, 1998, by and between David P. Johnson and Helene B. Johnson d/b/a/ Sumyside Cable TV and Falcon Cable Systems Company II, L.P., Falcon Cable Systems Company 11, L.P. acquired the cable television system of Ruch, OR. u Outstanding borowsngs under the Credit Agreement as permitted in accordance with its terms. SCHEDULE 3.7 -- Page 1 y SCHEDULE3.8 Franchises,Licenses Ma[ 'al Cpntraet - - See attached. The matters described on Schedules 3.11 and 3.16 are incorporated herein by this reference. M',LICENSES See attached. CONTRACTS 1. MCI Hyperstream Frame Relay Pricing Plan Enrollment Form and Agreement, dated January 12,1998. 2. @Home Network Solutions 1pmsuanno the Letter Agreement, referenced as Item 3 below, the following Letters of Intent will be terminated as of the date of the Agreement.) a. Distribution Term Sheet, dated March 31, 1999, by and between At Home Network Solutions, Inc. and Falcon Cable Communications, LLC. b. Convertible Note Tam Sheet, dated March 31, 1999, by and between At Home Corporation, Falcon Cable Communications, LLC, certain other cable system operators and certain suppliers of computing and networking equipment. c. Joint Venture Term Sheet, dated March 31, 1999, by and between At Home Corporation, Falcon Cable Communications, LLC, certain cable system operators and certain suppliers of computing and networking equipment. 3. Master Distribution Agreement, among Q Home Corporation, Tele-Communications, Inc. and other parties thereto and the Letter Agreement, dated as of May 25, 1999, by Falcon Cable Communications, IJ.0 to At Hnme Cnrpnmfinn snd At Home Network Solutions. 4. Non -Competition Agreement, dated as of September 11, 1998, by and between Falcon Cablevision, a California limited partnership and Carson Communications, L.L.C. relating to cable systems located in Elwood, Hiawatha, Highland, Troy and Wathena, Kansas. 5. Article 4 of the Operating Agreements of COC, LLC and ECC, LLC provide that the Members of the respective limited liability companies not engage in any business within Deschutes or Crook Counties, Oregon which is competitive with the respective businesses of the limited liability companies. 6. Section 7.13 of the Asset Exchange Agreement, dated as of March 22,1999, by and between Insight Communications, L.P. and Falcon Cablevision, a California limited SCHEDULE 3.8 — Page I partnership provides that the parties thereto shall not, nor shall any of its affiliates, oven manage, operate, control or engage, directly or indirectly in the business of operating a multichannel wireline video cable television system, multipoint distribution system, multichannel multipoint distribution system, cable satellite master antenna television system or direct broadcast satellite system within Scousburg, IN system, for Falcon Cablevision and Franklin, VA for insight Communications, L.P. 7. Contracts relating to the transfer of all Enstar Six -B's cable television assets to certain of the Falcon Companies and the purchase of assets described as items 1 and 2 on Schedule 6.1 are incorporated herein by this reference. 8. The agreements relating to Indebtedness more further described on Schedule 3.6 am incorporated herein by this reference. 9. Lease Agreement, dated as of June 25,1992, by and between Sumitomo Life Realty (N.Y.), Inc. and Falcon Communications, L.P. 10. Office Lease, dated December 1989, between Raymond Business Center and Falcon Communications, L.P. 11. Office lease dated June 14, 1994 by and between William C. Nelson, Barbara J. Nelson and Barbil, Inc. and TCI Cablevision of Washington, Inc. 12. Letter Agreement, dated March 31, 1998, by Falcon Communications, L.P. and Falcon Holding Group, L.P. to CSG Systems, Inc. relating to billing services, accepted and agreed by CSG on April 28, 1998 and by TCI Management Corporation on May 5, 1998, as amended by the Letter Agreement, dated October 30, 1998 13. The Employee Plans listed on Schedule 3.13 are incorporated herein by this reference. PROGRAMMING CONTRACTS 1. AMC - Letter Agreement, dated as of September 1, 1995, by and between American _. Movie Classics Company and certain of the Falcon Companies 2. BRAVO - License Agreement, dated as of January 1, 1998, as amended, by and between .. Bravo Company and Falcon Cable Communications, LLC 3. C -SPAN — Affiliation Agreement, dated as of June 30, 1992, by and between National -- Cable Satellite Corporation and Falcon Cable Communications, LLC 4. CNBC/MSNBC - Affiliation Agreement, dated as of October 8, 1993, as extended, by and between Falcon Cable Communications, LLC, CNBC, Inc., MSNBC Cable L.L.C. and National Broadcasting Company, Inc. 5. DISNEY - Affiliation Agreement, dated as of April 2, 1996, by and between The Disney J Channel and certain of the Falcon Companies. 1 LY SCHEDULE 3.8—Paget r 6. ENCORE - Letter Agreement, dated February 11, 1999, by Encore Media Group to Falcon Communications, L.P. 7, ESPN- Cable Television Affiliation Agreement, dated as of August 1, 1993, by and among ESPN, Inc. and certain of the Falcon Companies, S. ESPN2 - Cable Television Affiliation Agreement (ESPN2), dated as of August 4,1993, by and among ESPN, Inc. and certain of the Falcon Companies. 9. FSW - License Agreement, dated as of lune 28, 1998, by and among Prime Ticket Networks, L.P., a limited partnership formed =der the laws of the State of CA, d/b/a "Fox Sports West" and Falcon Cable Communications, LLC, a Delaware limited liability company, Falcon Cable Systems Company 11, L.P., a California lirdted partnership, Falcon Classic Cable Income Properties, L.P., a California ILnited partnership. 10. FOX NEWS - Letter Agreement, dated as October 4, 1996, by and among Fox News Network, L.L.0 and Falcon Cable Communications, LLC and its affiliated entities 11. FX - Affiliation Agreement, dated November 8, 1993, by and between Fox Basic Cable, Inc. and Falcon Cable Communications, LLC 12. HSN - Home Shoppng Club, Inc. Affiliation Agreement, dated as of July 22, 1994, by and between Home Shopping Club, Inc. and Falcon Cable Communications, LLC 13. MTV/NICKELODOEN/VHI - Cable Affiliation Agreement, dated October 30, 1997, by and between MTV Networks, a division of Viacom International Inc. and Falcon Cable Communications, LLC 14. NW NEWS - Agreement, dated November 1, 1995, by and between King News Corporation d/b/a Northwest Cable News and Falcon Cable Communications, LLC 15. TBS - Agreement, dated November 14, 1997, by and among Turner Network Sales, Inc. and Falcon Cable Communications, LLC and Enstm Communications Corporation. 16. TNT - Affiliate Agreement for Turner Network Television, dated u of August 17, 1998, by and between Turner Network Television, Inc., certain Falcon Companies and the other parties thereto. 17. UNIVISION - Oral Agreement 18. USA - Agreement, dated as of January 1, 1995, by and between USA Networks, a New York partnership and Falcon Cable TV (defined as the entities set forth on the signature pages thereto). The inial tens of this agrecment has expired bowever, the parties continue operations under the terms of the agreement. SCHEDULE 3.8 — Page 3 INVESTMENT PERSON INVESTMENT AGREEMENTS �. 1. Amended and Restated Agreement of Limited Partnership, dated as of December 23, 1988, by and between Falcon/Capital Cable, a General Partnership and FMB Enterprises, Inc. relating to Falcon Capital Cable Partners, L.P. The non -compete provision contained in Section 18.2 therein is incorporated herein by this reference _ 2. Agreement of General Partnership of Falcon/Capital Cable, dated as of November 17, 1988 by and between Capital Cable, L.P. and Falcon Telecable, a California limited partnership 3. Falcon Lake Las Vegas Cablevision, L.P. Agreement of Limited Partnership, dated as of September 7, 1993, by and between Falcon Teltmble, a California limited partnership and Tramneva Limited Partnership. 4. Joint Venture Agreement, dated as of April 17, 1986, by and among Sonic Cable Television of San Luis Obispo, Falcon Cable Systems Company and Cox Cable Santa Barbara, Inc. relating to SFC Transmissions 5. Operating Agreement of COC, LLC, dated as of March 1, 1999, by and between Central Oregon Cable Advertising, Inc and Falcon Community Cable, L.P. and the other entities that thereafter become party thereto. 6. Operating Agreement of BCC, LLC, dated as of March 1, 1999, by and between Bend Cable Communications, Inc and Falcon Community Cable, L.P. and the other entities that thereafter become party thereto. TCI ARRANGEMENTS 1. Reference is made to Schedule 6.18 and Section 6.18 of the Purchase Agreement for certain contractual arrangements being assumed by Buyer, Exception 1. The franchise renewal request for Athena Oregon which was due m he, pled between March 11, 1998 and September 11, 1998 was Sled December 9,1998. 2. The franchise renewal request for Osage Beach, Missouri was due to be filed between July 29, 1997 and January 29,1998 has not been filed. u 11 r SCHEDULE 3.8 —Page 4 SCHEDULE 3.8 FRANCHISES -- __ y,pa MIS AnnaFclla Nagt+n � ArwOia • rlavJ •. AsnlaM As •AlesczEem Athena ANena AOanla it Sy ST :Tovm 1d19n901 0V012011 Fekon m4 IL SIKESTON GN 0]IOb1996 W/02/2011 -F 'f Ial NO SINESTON City 12/0)119]0WMk A.A'.kak FaIWnTaNa016 _________ ._______ GA-CSDPRTOWN Cly 11/t5't90B I]n5H950 FaIWn Carsnvniry VenNrosl MO MARSHAL Gry 01/11/1999 6tn62014 FZT=Telecable IA MARSHALL TM, . ..08/0311 ISGO03F owC s _ e Comp YII OR ASOFORD city 03101WWI Fal C ble3ysyVern,.. OR AITASCA COy07AWIS05 0]/04)2001 Fal Can N1y V¢d sI Ca yll LP. CA ATASCPDERO CIN Wltd/1980 07/142061F I C bk 6tabms anp _. OR WPllA WALLA GN 63112/1981 031112081 Filwn ViOW CommunlwWW_LA_ 0310311988 051032003 F.T. FiRl.-W. AL ATHENS GN .._ _. .._..____ TX MARSHALL Gry 0 7 /93119 9 5..,. 0710512005 FM.W •nmlla lv Gtea AUGm Tomsnlp AL AU GRE OWN MI AU GRES MI AUTRES Clly - Cry TovmsMp 0]11311992. OW0911902 ofjo-IA982 CWI rile 0]1152001 FZIwn T.WONO -DeQj0107 0026 IWn Telepde__ 01/0]/2002 Fal=Tim.IWa FusaWe - Baker NY PLATTSSURGN - OR T Cly iL2]/1895 ft2)Y2W5F1 Rim. _ 09282069E Iwn canmwilly Cable LP. _ . . 8an0W Balgor Nxval GRANOERENDLET GF ....._._.._..—_.__..—. OR COOS BAY ON- wA FORT ORCHARD Nxval Base __ 112311994 6720%1899 _.___—_ _--.—_— .— 112311599 FaIWn CaOb Syalenn Company ll, L. P. 07252009 Fir Y0eo TpmnpnlWOau. L.P. Subranne_Sace 9xltiay _ _ Ba10ENlle aeudla _... bEN]FEVILLE _ TX PLEASAN)ON AN OENrON _.._._.._..___— Town - 0311&1909 0351312009 FaIWn Cable Melva --- _ _ __ Tovm 09117/1900 01/ 1512000 FaISm Jsxpole :Tvm .1 OdD)I19B2 OBro>/199]FaIWn CaBb McEb mmH.As .5I312000Fe WnTelgbb 9eaulat CaunN BWubO Na1^al Indicates that the Franchise Agreement has expired by Its terms however, the Franchising Authority has formally granted an open�ended renewal. SCHEDULE 3.8 FRANCHISES _....._.__—______..-W%tL19W MO 31KESTON Gry �FaImn TeleuNe �..----- BeMM OK SHAWNEE Tovm it/B218B3, 11N5rz008 Falcon GNe a EeNelAaes-- '-"-- -MD CENIIEVI IF Torn p0ItY1889 Ow132W1 FaICm Ca0la MatlH BeMrlon ECuhMlle _ _ NC OPROLINR 9FACH _. Tam OZgwas 03101/ZOOBFaImn Gbla MCP. _ •&enMlle Pansn LAMANSMALL Pansh OY1Q'1990'. OY10.201I Faker TabaeM -----"6- CA LAKE_____ Gy 03/31/1999 0MI0003FMca G,sNesn -� EIB Beer Lake _.. _.TX PLEASANTDN Gry OW,tB99_Fal¢n Ta4aNe EIBWaIIs-... ENpnn HO CD RIVER ,052&19]9 p&1M1681 0,14rz001.Falmn G8lavhkn WA ;Gry i BGCa Bmok NP PLATTSSURGH Tam f0I1tT1B02 09101/1999 Fa1wn FlnL lx -' -' Bbxan VA SUFFOLX Town OB)1Z1B]3 06'112009 Falmn G0leMMN 9msierPerisA LA MARSHPll PansO OYI,1066 0&1N20W Falaon Tela bk (Banter) _ _ EOaBIBr P3rbh(%21n1A MR -SHALL- 01.400311)/1B0S 11Na200]Falan TeWzbk ---� NO WASHINGTON Gry __ ___ __..._.._ OYO&1832 0]rzaM990 Fakon Tele®bM Bouton _ ___ 1&18�N01 Fal Gel Bayaina VA _RY TO«n 1,9H909 -0&1]/138) Fal CwnmunlN GNe, ,,I.Oovnt, SOMERSET Count' OYtiR00i ,__ _ •Brat%eMllle --P T% PLEASPMON -- Gy OWJWj03T 0015/300] F.h. TekaeN _._._. . ..___ ...._._. _ KT SOMERSET GN _ 0&1511908 0&152009 FaIPln tanmuniy GEla_LP _ Brzdlddsvllle Tuan 0,1111909 09110rzE00 Falcc BmnaMille -�� - felm3 Vq Ccmmunlph LP Bremean WA PORT ORCHAnO W Gy 1&08/1998 1Z06R008 as,.W Gwnry FL SEBASTIAN Cary 072YI991 0&302008 Fal Gb1e MaEla_ SK.Ic Bs - OR CRESCEM CITY Gy 11/1011803 OTId3I1988 Falwn TalxBNe _ BTmavllle OR SPRINGFIELD Gry 07WI9114 071006a Fakan ,,,c sr I C pan It. I. _ _. .... ._. —. AR BENiON _ Cly 09Rd2W1 Fabmcowt, W _ Brynnl B.M. Cant' NC N.WILITk Cii- .....908 __. _...._.._ _ _ 090311063 0&3,1993 FN ii OR FFLLO a7 mGNe Fakan Gda Syelelln Company Bum. �� vcwapfHFATLS KY -SOMERSET —city —0mv-I9e0 ��OBTZ1800 CBIONXPOfeIWn GxnnluPy Cable, lP EumaiUe ME ATHENS Tavm _. OZOY1980 01/082005 Fakan FpeL lnc. Bumstille MN.IEU --- __Cly - _� -0&03/1E91 - Oes. FaImn GNeNslm ! -. Cpteeeus(Lov1 0A Hilo) GWEaua IMalieul � CA MKIBU Glry 0 111 111 8 8 8 Ol/112000 Faun GNevkla GC__n_s—vlul.tl-laem._.-.-._"-.. To-weia5z "Clly _ 0,111VINI WA WERATCHE'Cry LPJ._ ' GaBaAM T%_PLEAeaNTON __'Gy __ O1MY18Bi' 0&B&1886Feloan TaleaW ___ N #pN# Indicates that the Franchise Agreement has expired by its tens however, the Franchising Authority has V formally granted an opemended renewal. SCHEDULE 3.8 FRANCHISES Chelan County WA WENATCHEE Conry p1YY/rz009 FNmn VIEeo CanmuNntlona, LP. 6,- VA BUFPo Tarn 09p11819 0105197Falcm Cherokee N. ATHENS --Tam U8'11%f891-06I1113W1 Fxkon Fbal, .—___— Ge�akee'dllayn AR bli(EETON VAepa _--__._.— eVtwt891 01/10rz006 Falcon Teleade _ LIIesNdeH W. PtATTBBURGH Tarn IT/2T/1995 112b2001 FalaJn FlrsLFT .._ _. _.., Chowel ._.._.____.. Mb CENTREWLLE _.—._. Town _._.__ 01103,1991 018&1891 Fa1¢a ChewelN-� WA COLVILLE Gb O11O21991 TW0 O110F200t Falcon Tebwde Chinni@a9ue VA BUFFOLN Tam 10.g1/t811 10,0111991 F95n Cable Me4la ________.__ _ ___ - Tam 05101/1989 Tlepde_.. .. ...__ O"=009 mO hx C�ulM 1411 M CEkTRN.L MO CENTREVILLE Tam 10NL2008 Fal _cn Gbb Metld Fa ClaWmv Guary OR -HOOD _tONwf999 09101'1881 OMOS'�O6 Falcon GOleNebn_,.______..._. Clerk Co. O.RW IN aT. GEORGE ...Conry Caunb 03IWI1809 10/119001 Falao Tek0ade (Bunken9lel__._ . ___.__--.__—..__.—_.__ CMk G.(O+e�lon) NV ST. GEORGE Cuunry_ %H11e11 10`10001 Fakm Teleodery __ CleWwnie OR ASTORIA 01fa2002 Felon Canm+N VenWwl ..Cy_.. Cib 03IO9A901 WI0920%Eelam NEao Gvmm,Inl atlpu,L.P. Qe Elum WN ELLEN69URG indicates that the Franchise Agreement has expired by its terms however, the Franchising Authority has formally granted an open-ended renewal. SCHEDULE 3.8 FRANCHISES ' GMWok Cu GWna Tx NrON G N 11/00/19]9 MJ1S1B80 Falmn Tel9ada Oixle lnn anti U MNi01WLL Tam 0910//1902 091012000 FeIcOn Tele®de Dwgias ID'WERAT Cty 03101/1909 BOIM?FWMVWm LP. Lauplea Crony W'A�WENATCHEE County _ 00129/1908 G—Wtm figs, 00131200]Felmn YWeo Communicpeow. L.P. Dain- OR SPRINGPI UD Cly 09/07198/ 090i2009Fakm Gble 6,W.Company llI.P. - - 'DRa61� � _ NC N. WILKE590R0 Trow 02OLt9&3 020L2005fabpn Cable Meala -OR 6046S MY Oly - - 092L1980 W2]2003 Fmmo Cable eyedma Company ll. L.P. mprwI)WosBfy Wplln Gamy NC Gunry 02Mm19m GEIe MBEia Cagfep m hl.-PTHENS ATHENS Twm 0]/1&t901 oflma000FBIan 01ro1(AtO Falmry FlnL lnu Ea918Pdn1 OK MEOFORD city- 9&O8H9B1 ______ 09MMM1Fm.GbNOyebms Cwnpeny ll. LP. Eadsbdo OK SMNWNEE Tom tV1V1991 t110 Falcon GWBMetlb Ea51 P2ine MO e1KE5TON Clry Oy1N19&S 03101RW5 FaIcan Tab 2da a 005 Eaeh91a VA SUFFOLK Tam 6Y1Y1905 000Felcpn Gda MeI Edro OR U Cly Couny Gde. L.P. O9roT2FaIWnmm Wdfa006 GPANDEIPENOLET ENOISCou mo LORRE Cony _ 00129/1908 _ 00292003FaImn Gda Maple 'EIGaaEO Spnnps S, MO S 'Clty 1 019 111 9 9 1 GGeaI5 'EWm IRRENSBURG MO WARREN59URG CM BN11/1991 W1111995Falmn .. ON11/1998 Falmn oam.wWn Elmtt Gly #### indicates that the Franchise Agreement has expired by its terns however, the Franchising Authority has homely granted an open-ended renewal. I' r GaWHHill Galen..._— SCHEDULE 3.8 FRANCHISES __.__.CcuaN NL ATHENS OR LINCOLN( wry KY SO\IEFSE _ - GN__ - bil0tn985 NG SUFFOLK county OR ASTORU iy... 10 GILROY 051101882 CA OILROY I -MO SIKESTOP le Nc N.WILBEP GaWHHill Galen..._— SCHEDULE 3.8 FRANCHISES __.__.CcuaN Tpm 09Id4H999 _ - GN__ - bil0tn985 county O1195H99B Cly 051101882 -- 1111411983 6080 Twm _ TonfiAm t CITY Lit U1/UY1889 _.--_.. qty.. ._ Tovm 91/eS1909 ION- City-pS111188] .BURG- City M. 5v #M Indicates that the Franchise Agreement has expired by Its terns however, the Frarwhising Authority has formally granted an open-ended renewal. m SCHEDULE 3.8 FRANCHISES gtlBas .ower -Ana 2) �ELLENSBUB—G CwnN "—" OBI9412021 Falan Vltlw CommunipYons, LP. l ea9) rGea3) WA ELLENeBURG -County -1N392029 Falcon YWea CommunigOwa, L.P. , ambs Gouny T.W L4_wNea 4) ePlia __ WA fLLEN80URG _ __LK. County -� 082]!!002 Felpn Valeo Communip9ws. Od_ Cowry Lwnr-Area 5) ._.-_. iia2 Falaw Ytlw Canmunip0ona. L.P.-�-- ti191asCounry WA ELLENBBURG county LMQ(r as e) ��� """"-�--'- _ ___.—.—._...___._ ... 0l2920be Falcon w0eo CanmuNpOwa, LP. ptlilas County WA ELLENSaVRG Count' L..,.k.7) pltilas County ' WA EILENSBURG CWny iNSL1988 iM62019 Falcp YMw Cammunlpuona. LP. ;Upper! _ _ NC .__. Toem 0]/OeI1982 . ,. . - 0wllQ99] Falcon Vdw Comm 'v Manythw nAmTANKS '- --" -� psLP_--_ - 0911l1U0]fdICp GObBysbme Cdnperyll, L.P. KbmaN County OR KLAMATH FALLe ' fAuly "'� CiN - _ _ ..__.._ .__ ...,. 011O1r20oa Falcn Caob Sysbma Canpanyll. L.P. Kmb OR MATX FALLe _, _ _ __ _. —._ ._... W,ftella KmE No9ler NE MO NEVADA CNy. 006V1988 a 082012W1F Ipn CaMeWkn __ ' K re Beach NO CMO4NA 9EACH Tawn 102dI19a5 101t31199a Fakan Gde Mala 1120.2005 F.I. Communlry CaEle L. UG Grz a OR g C DVPENDLET Falcn Cade Sysbms CompwYII. LP. -r•A ."ROY Naval aaee OSNN1838 O4N52011 M#M indicates that the Frenchlse Agreement has expired by Its terms however, the Franchising Authodty has tonally granted an open ended renewal. SCHEDULE 3.8 FRANCHISES (Eubank). —., unwin cwnN (MGOnwy) HINa) G MIBB 16..160__N1_909021 200/ —l—w.--- Labl9Ndw (Haden Hlb) LoegnpN¢lGmnNCAMALI9U- -Cwnry 01111/1965. O1fli2040 Fa1mn CdbleWSlOn (Malibul 1616 _ Ewell OR SPRINGFIELD _ Lit' .16.. 1616_.0 091..— 10/ty1990 1]/.1991 FaIwn Cade Gysla—m9 Gwnpany ll, L.P. 1616. ...... LoxnOeaCwnry 1616. GA LOWNDE6 ._. __. Cwn1Y .—__'__._-.__ 062<11901Falwn WOle MeaW _ _ _ Lytl U PIFASANTON CIN mN91980 OSI1Di996 Felwn TeleO6b- 1616 _ _ _ _ _ .. MaE1a 1616 _ Wp YAKIMA diry ._. .. 01912011 Faltw vueo Cammunlw0ou LP. ... Magadla __— NC CAROLINA BFALN Twm 0121/t99B 01202m0F iw Gda Media _ _.. Malibu _ .16..16_.._ LA MWSB .AW M 01/11/1905 '1/112040 F Iwn bn _ MammarnP AR 50(ESTAL CIN TAMC TD0Y20aLF Telec' 1616 1616 _ _ .16...16 gh m LA MtFlERBL CRY-- ON Mw D=W1906 @Nwt999- O'LON301<Falwn Teletlbb Manlro NC OUTER BANNS Tam 1616 11/01/1992 t1Na12CO2F I VW_ep CwmnuN2tlMa .. _ _ MawnlN- _ OR LINCOLN CIV Clry . 19 _ ._ OL09/199] 06902002 Falew TObwbb 1616_ 1616__ Mahle Hill _ 1616 1616. 1616_ MO ... 1616 ... 1L2L1B69 1&012001 Falmn TebwOb _ ._.--1616. 11ALLAON OR OALUS -- Ccunry-- 12,30/1998 1&291X06 FaIwn Gde Syakm9Cwpa0Y I1. L_P.__ Marion County Man�611 16.16__ TX MARSHALL UN 0029/1998 0939"M11 Falcon Telewbla 1616__ Menbm ....1616__-1616. MO BINE$TON Ctry 092f 0Falwn TabadElO _1616__, Macon Lwnrybl _ WA PORT ORCHNW Count' 98910 0&Ot/1901 093NiBe6 Felwn VWw CommOdwtlan, L.P. Maven Gounryp2 �WA PORTORCHANO �Lcunry OBm&1900 0092000 Falml Yaw LwnmunlalMa, LP. l AZ #M Indicates that the Franchise Agreement has expired by its terms however, the Franchising Authority, has formally granted an open-ended renewal. ` SCHEDULE 3.8 FRANCHISES ba Matlatl MO WEE S A City 'in' uin,«e- - .. fly_.__ ------- -- - - _ - - LINCOLN Jawpat OR LINCOLN CIiY Vax90mf _ _ -614 COOS _ __ ''"—BAY -' -- VOM Gna Gy VOMCwNantl AL ATHENS Tam Ulem MO SIKESiON- W49e NOM ou NN&VI992119+xa INC CMOLINAtteto TO. 'NwN WIkuEmO NO N. WILKESBORO Tam NON:6ampbn VA SUFFOLK 'Cw+y =j...992 WIp1/1000 Falun T+bad+ -.CfJYr't6i: Lw`10r"id Falcon Vaso Camw _____—.' ' s+ � Falcm Tebp0le •• bW2&1909 0&OOrzOW FdaImn GOle Sys4ma ConpanYll, .__._ _ - 11/----- 011012010 Fal= T010M 0. 10161/1990 0&JW200B Fa Cn eleade 11/1011990 III 601200a F+ICm GOIe -OY03/1992,..02/6LMVL F BCle OtI2b1e02 119W FiGm e1wn GEle MWI- UtRB C iv,(NwN)__.._ NON:hampbn VA SUFFOLK- CWnty .. .. ._. VI14MdfFl 191IR9BB FeIWn Gde Mea4 Guny(S.e) .. HoMpal- -- .._ WA COLVILL Torn _. __ _—_ --.---.__ ii9l 92 ULH2612 F+I_pm 4tlewele GkRitl9e - OdaenE O+adtl9e OYanepen- - N MARSHPII OR ROSE911(t0 OR SPRINGFIELD WA WENATCHEE---',Wy Wlaq 'Cly OBI2Wt802 oo GW002Fal= Teleade___ __ 010M198B 03N02006 Falmn Canmudy Venbn4l O8I<W1905 OWJOI2000 Felwn Gde Sye4m0CwnpanY It. L.P. -.Oly - - Ot OWFaImn W. COmm+AOaa.. L. P. I —'—'_" "-"'—" nv,nnr -mmPltBB191/OYA31 Falun calm (9unmgnl Mqn• • #W# Indicates that the Franchise Agreement has expired by its terms however, the Franchising AUthor6y has formally granted an open ended renewal. SCHEDULE 3.8 � FRANCHISES PenyAb .. MO $MESTON Gh 03101/1888 OSb120W ftlmn Tebade Peau NY PIATTSeURGH T ---M 122885 112B200r Fabon Psi Inc. PM1aenR 'OR MEOFORO - Gy ___ �--Ot202008 FaImn Gde Syebms CampMyII, LP. PI¢Emont AL CEDARTOWN city 0207/1985 05/062000 FeIwn Gdevbn ____ Ribt Xnob MO SIKESTON Gy e ON&19811%MNlMFtloOn Tleada Pilot Rock __ Oft L4 'may 11NTI1S¢1 fM�muniry Cibb. LP.� GRANDE/PENOLET pWln pealing LA MAR -SMALL Gry .. 1QIiwim .wl t0itd200i Ftl- T---- _ ._. _ ___—_.___.__._ __ .. _... PlalnfiaM TOwMdp _.. . __........._ MI AU GRES TmxnSM1lP W/121984 OtnL1968 Falcon Telaada (Hab)_ ..._ ... . __.. ._.. ...___.—_._ _. PbbaW2 __ _. MO WARRENSRGH ___ . _ Cly 0&0511096 OBMM5 Falwncable1i PlaNbwgh NT PIATTSEFURGH Cory 1&8]H895 ftlnfi;&n FlM, . PIaRSWp_M1 NY PLATTSBUROH TWm 1ZR21995 Wlikr_W5 11/182_WS Fa1Cn Pint, 1 PWIbWryb AFB NY A.F_B. _ 10/OV19B9 In IDN12000 FakM Plnl, Inc. Plewnbn KlEASNTON- TX PLFASMWjj CI(y IdON1B]9 p8nW18B]Fal¢n TabWde _____ Pdx County GA CEDARTOWN Count' tt/08/1981 19/00/1885 Ftldm GdeNdm ' arty '"------ pdk Count' GA CEDARTOWN � coYnp' - 190LtO69 1231H999 Fatmn Canmunby VenFmel ptpdmanl Pammay - VIP WAIlA WIO.0 _ .__ OVOldi S FaFWVWeo COmmunlnllms. LP. Pal Mnau TX PORTLAND .CIh 12fY1B9c 01I1d12405 Falwn TebaOb ' PwlOrcbarO WA'PORT ORCHRRO CHy L.P. F indimtes Nat the Franchise Agreement has expired by its terms however, the Franchising Authority has fomlaliy granted an open-ended renewal. r SCHEDULE 3.8 FRANCHISES NrAIeM PoOeO U MARSHALL Pad4l 0510&1801 05106200], Fal[on Telatlde ' team____ ._._. _._______—______—_.._---_ RIMIanLe __.__... _ _. _ NC CAROLINA BEACH .._. Tnan b91 IMM 0!/11/f038FaIccn came .....__._. RMcmdlla --A- Pl GkLf6t4 :^:^1 0&14118"78 051011'A03 Fa1wn W Rkn GA City P!/M08a Fakm r, IrQ, AN Rock Hall CENWTCHELE CEWRE T n TW=1W6 1�SSH881 QAW TN16&261F1 Bede M_Mle RNh laluA WA WENATCHEE WA L'b 08'OY1008F I YMaeG imuNtltlMa. L.P. . ..... RMYawayB .__. OR LINCOLNCITY Cily ... . ___.. W188i _ l .. __ ._ ___ Falwn r RMkj etl-Cmnty Lmnry be O62w1906 aMeO00l Oimmua Oa282011 Falmn Canmunib Cade.sI BpCgrun GA CERMTET GA CEOARTOwN Gy OYfLtBMI ty31(100O FaIwn CPTmunly Ventures ROtkGal Tx PORTLANDCly 09IOb1pdY O4/o62OJi Fdlmn TeleoCk ______ Ro4W110 Ut ST. GEORGE Tawn 1111&1983 fLiLMOS Falam Tehmde AL ATHENS Toim OrJOFJt8E0 OS'W3005 FaImn Fl9L ln[. IWurlle Ryue Nva! OR GRANTSPA35 Olry OGR6R015 FaImn GEN Syabmf Compan II, LP. 'Rm�tle NC N. WILNESSORO Tvm OL1d/1893 W11(1Wd Falmn Gde Mttlla _� _ ____ ROaa Xlll NC G4ROLIN4 BEACH Tom 0&11/1905 08/10.2003 FaIcm GOIe MCEIa _ RofeOuq OR RG Rb Oim99i PL312000 FaImn Gmmumb VenNRal RoxLwa V0lpe AU GRE MI AU GRES - Yllape iNt311880 101132001 Falmn TolemEle CA ##Mk indicates that Ne Franchise Agreement has expired by its terms however, Na Franchising Authority has tornally granted an opeo-ended renewal. SCHEDULE 3.5 FRANCHISES SM—.W—Hi—b AR BENiON '§miaow C0u=1y_ _ _ CA 6 REOOIN SimilelaFe bF RECOING __.._.--" 6havmn _. .. _ OH BENTEE Sherxme BENiO AN Sbilm ALL ATHFNS 6Mnar Tx 'Sikeabn MO SIKE97 61KEBTON Sllreelui OR UALIAa eD CA GILROT ' Semereel Kl' sOMERSET scmeueCCdiny" -MC SUFFOLK ---- ______ _ SauN GO EWm WA ELLEN99UR0 6wNamPlon •_ . VA fiouMem Stroma NC OUTER BArvi(8 / 1Yte11986 1YtY1001 Falmn Cade 6yekma Cwmm�Yll, LP. tY1NiB96 tYLJL001 Falwn Cad66YeUmaCmmpanY il, LP. 01/1Yt996 OYfOrR00i FBlmn Cabo Mm4 OB2YlO8fi 06'312U01 Falcon GM1le Metlla O9lO/1981 Ot/Ot(20t0 Falmn Flrsl. InG 0]/01/1989 0]/01/1999 FaImn Teleabme ___ __ FaImn TeleaMe IMM991 1P/]1119W IWI/1999 1bi1/t689Farme Cable SYalems Gompen_Y II, F9 - No OB/1MiB02 O6'tIR003 FaImn TelBnble 05/tbi68'% -` `" to/ivisee O1/1C/1991 IL231001 Films CR4ev FT - 0561 -a003 05612003 Falcon YNec C maxi ml . L.P. w 9bvem Co. (Aden)WF CGLVILLE �CamyOL81/1888 05131/2003 Falmn Telembk W fibven Co. WA COLV UEo,Crony OY31/1968' wl.00]Falmn Taknde . (GwvYM1I I d #M indicates that Ne Franchise Agreement has expired by Its terms however, the Franchising Authority has 1 formally granted an open-ended renewal. 14 SCHEDULE 3.8 FRANCHISES Un1wWp '--- #M indicates that the Franchise Agreement has expired by its terms however, the Franchising Authority has formally granted an opelnended renewal. ND CAROLINABEACH Tam 05241188] fa— GW' _OW"W2. 11111/1832 MMMNM.WV Febm GdeLi5M OR RORTLMO City 10111/1980 011 Falwn Cemm_In Vanbm0l SOMedn - - O111N1998 _ _ _; 11tH Falw CBmmunl tl LP SwwnY T% PORTLAND L N __ TaIEOICwnN MD CENTREVRLE Gu N 03'Y911881 6522001 OSI21,206F GOI McOb C _ 01%154006 Falam MIS SYsama CB nY 11. LP_._ f261 OR MEOFORD Cin _ Tee9lerlelane VA SUFFOLK wage Meda_ O&OY1001 F I ca Teaniiy - NC CPADLINA BEACH T. O1N0/1386 Woulf9gi Me 0110e2406F1a Cade Ma0le _ 'Teame6 CN W/ll/1991 0I12MM1 Fa. Cable MCEla_ __ TBlume CwnN CA REDDNG CA REODINO Canty 0721,1809 0]202001 Fal Gde SyaNnn CBmpanY ll, L.P. TempNNllO MO Tan OSIOL1980 OMOMZOUB Fil. GNBMadN SIKES7EVILLE MO SINESTON Cry 00'ONt800 O0b'L2000F I Tde08EN -"-'- TM ONka OR HOOD RIVER Cry 05111,1938 OSAI2WS B Ynity Ve Wreal ._ Th n00aka CA MALIBU Cly 11211198.5 C. 11212005 Fa6b0n CedeuvWn mm w.en T% PLEASOMN Oly ON1N19]3 /1093 Fa1(aTacai. TIIBm T% PLFASMTON Tam Ntla/1983 11/22003 FaImn TBbOble I-Ipl Tlllamadt OR LINCOLN CItt CIN 112011931 12/ 19/1933 Te10_PBIa _ __.. - _.. Tlpbn _ . _ MO BUftG _ .. Moll1932 Fa1wn n _. 0, F,4w T;FwM7-a ATHENS MS ATHENS - Tam if. 01MM1990 m..t. Z Ot1002008Flan Fiml.Ma rw6b2 Tdeld OR LINCOLN CItt_ 051-0FalGOn TdeoON Tauakel ---�WR WENfSLHEE-_---- _ 01,1112112W9FaKan V10ao Camnunl®tlau, LP, Un1wWp '--- #M indicates that the Franchise Agreement has expired by its terms however, the Franchising Authority has formally granted an opelnended renewal. SCHEDULE 3.8 �• FRANCHISES Wdtllaprewue VR.SUFFM Tam 01/1YlaTe 01N912W8 Fekxm Cable Media WBTWm- WA WgLtA WgL1A gill&"1020Falwnvbw CanmunlgtlW,LP. WaMefielE Waldpon OR'LINLOLN GN---CQy Fakan Telegbla Walla A'alla- WA WN.IA WP31A—GIY ,_ __OYtY1998 0]ll11N10 Felmn VMeo Commenlgtlans, L,. Walla Walla County WA WALtAWALN Ccuny 06'OVNIto Faican YWw Ganmunigwns. L.P. Walla Walla Copnb WA KENNEWICI( Count' 08N1rz010 felmn VMw Lanmvnlggwro, L.P. 18ueewk7 .. Wlleq NC LgRO_M.WBEM:H O_1411 898 08112081126103 Fal.¢n Gble V.6 WalnulGmvO AL CEOART Tovm OMOeH908 OBI0112g1b Falces GNevlebn Wapeb WA YPIfIMA- Cly 09120t988 OBRQ12013 Falcon VMeo CommunlgOpq, LP. Watnnbvii p MI AU To+mBMp 00.eMBe0 OR^vO12aw Falgn TelwaMe _ _ WcnensEuq WARRES MO WSTORIA BURG Gy ON511999 Yw]1(1000 Fakan GbM�Hiw Wartenlm -� _ OR ASTORIA - --�Ciy 03NY188a 041052W1 FOlgn Convnunl VwMml Wanaw MO 8BEAC T. 0e12411B85 OYtw1896 Falcon CBblevMlq Wersaw- CARQL NC CAROLINA BEACH TorndL0911698 U>%OB2008 Fmgn GMe Meda Waew Cunt' _ ..—_. OR NOOn RIVER_ County - OSN1I1000 Falcon Camnunny VenMml VhSnInBlon MO Gy 0312411981 Felow TalegMe _ —_ WaebllNbn ST.GENCTON UT ST.6EORGE Gry 04Fldl/1888 0121QJ05 Fal n-TelenNe __ . __. WBBhwMu _. _ WA WALLA WALLA _ Cly 1a2fi1201]Felgn Ytlw CmnmYNpBmB. L.P. .____.. y_.__- _.._..._.... WM1iYman AFa 40 WE 'CI OYPL1998 gY01RgOJ.Fekan GNaWabn #M indlwteS that the Franchise Agreement has expired by its terms however, the Franchising Authority has formally granted an open-ended renewal. SCHEDULE3,8 FRANCHISES indicates that the Franchise Agreement has expired by its terms however, the Franchising Authority has focally granted an open-ended renewal. SCHEDULE 3.8 UNFRANCHISED AREAS w V d SCHEDULE 3.8 UNRRANCHISED AREAS Schedule 5.8 Expired Franchises BllmMi MS BPB %/191888 ATKENS Fol Flnl.11w. BID MO P]J _ 01MY109951KESTON Falcon Tomode wo BI9Wells TM 109 093011880 PLFASPM0N Falcon TdeoNe _ GaIYWIIIa tg 055 Fdmn Tabot,! ___, riwc,b--Fw A 009I1a08 CE0PRT0_W6 FlwGelBn 092W1980 CENIFEVILLE Fekm Cabl<IN". dMneolosau CNnroleague VA 2315 VA -P315 tOM1HBW,SUFfOLN Falcnn Cable Metlle Cohu0a 6A 102 12/1211895 hALTDN FeImM1 F9al lnc. CdleBa Pbm Wq 1799 �� 093111080 WAL1A WPLLA Felmn Weo Communloeona, LP. 6295 19191980 DA1T0N FNom FaaLlna. Caw, e Gyn Tx ]30 Tx O& Falcon tilewtifCaRiai! EI DonEO MO 1281 Ees WASUVNSBU 12N91995 WAARENSBURG FxIwnGWeNegn Edlo NO 1216 0&1V1998WARREN59URG Falcon CooPoA.0n KY JOJ O&09199950MERSET Falcon Cammunlq Cable, LP Gilroy Gilroy CA I69 OlRel1999 GILROY Falcon Cable Systema Company J. L.P, Gien AlOn< NO 117 10131/1838 N. WILKESBOR0 F.IWn Gale AMA Gdlatl Tx BBI 091111080 PLEASPM0N Feloan Telomde Greenevere NC 0 O40711697 CAROLINA BEACH Felfgn Gde Mptlla Holden WOO 98109HBB0 WPARENSBURG FA.GdeWlpen Hdlleler CF 0a99 �. 0&f&18D0 GILR0Y Falun Labia Systems Gmpeny ll. LP. Ironron NO fi12 %Mt/199851KESTON Palm. Telepd< Junction CiN MO iB 11I01I1095SIKEST0N _ - F31mn T.l Kelao MO 153 O7 &1096 Falcon Telamde •. 4" NC 24"852 OUTER0N OV16MMOARRENSWKS CW_W--omniu 1ptlons, LP. - Fc. Lak. OunKill, Lake OVA MO 852 OL1N1599WMRENSBIIRG 6913 Falcon CabeWNm Lakeview OR Bfi.1 ONIM1BPo NlAAUTH FALLS _ Fallon Caale Syabma Gmpeny ll, L.P. UncMn Counts KY asp ; 09109tB08_864ERSET Falcon Commonly Gei, LP LoaNgales Cls B4 01MT110%MAdeU Falcon Coulivlebn (CIN) lowell OR 315 95ITTIMI;5PRINGFIELD Facon Gab Syabma Company ll. LP.� LYOe—... _Tl(.30].___ ... ....OY12I1998 PLFASNiTON — FaconTeleode Moon Count, WA:310 — -----0=01I 8PORTORCIIARD Falcon Woo Cmlmunlm0ona, L.P. v W _ Monbrey __ CA '4735 _1&01I180061LROY Falcon Cable Syabms CwnWnY II, LP., tAonbrcY WnW.y CA 73U — 0&01n99]GILROV-- Falcon Gde Synbms CompenY ll, L.P. ' Tx 178 01M&-0_95- E44NTON Falcon Tel<tade _ ...__....... Web_R New MCEtltl .. _ MO 101J .._. .. _. %N4/190fi SIKE3TON _ Falcon TeletlWe _ L Schedule 8.8 l5 pired Franchises NAME_FR _F BubncNbem � EFp Date GMLOC OR - pSHIP FV n Cxble Metlle NaMbamptan VA ;502 9128�1959.SUFFGLK Guny/Nwml NN,hempIM VA 109 1114119985UFFOlJ( Fticpn Gble MMle CounH ISONnI TX 12& t1W'!/1999 PORTLFND .. _ .. ._ .: falcon Teletlbla �___ Paled0e _ _ OtwtggmA.. O Fa'mn TeknW PNasenbn T% 1201 11011%S CEOAIaTOWN FFlpon Gblevbbn Pok Count' GF 4331 Queen Anne's MD 8918 OBg111BBT CEMREVILLE Felmn Cable MMle Count' _ 242 02.D1I199B MnR5HALL M.N.T paean Ciry T% - -1Nl1I1080 UALTGN _Feloan Faloan FNet lna RIn00dd GA 143 12milM GILROY _._ii. LP. F.I.CebI.S �Cmapa" San Benim CA SO .. FW. Cabe SO—CanpanY ll. L.P. San Jvan GA 390 8840I18BT GILROV B ecu... tIHYID96 HAPRENBBU G __ _. ._.. F CbMaWiwi Sea Iia .0]146 OY11I18Oi CENTREMLIX FMR GEN MC SL MIcbaMa MO 591 pkjN1O1CWOLINA6EACH FaImn GEle Me5le Sod CiH NO 1888 TX 422 011,1095 PLF ANION F.I. Tele®bW TIIrte Riven OR 1058 OMWINO LINCOLN CITY Falcon Tele<BNe Toleep 0§ 66 001111095 LINCOLN CITY Falwn Td.bie WalepA MO eal 011&1808 WARRENSBURG Falc Cablevie. Warsaw µTlte 561mcn VIA 59G t1101I1B35HDODRIVER Falcon GbleNalan WEIMeW GA 12954 G32118950ALTON Falm Fnl lna. FCC LICENSES FALCON CABLE SYSTEMS COMPANY H, L.P. Business Radio KCB286 925/01 Business Radio KD23552 1/11/03 Business Radio KDX682 8/16/99 Business Radio KEA369 7/31/01 Business Radio KFC878 9/15/02 Business Radio KFC879 925/02 Business Radio KGH888 321/00 Business Radio KGK779 10/16/02 Business Radio KTN514 8/17/00 Business Radio WNNS923 528/03 Business Radio WNPM615 10/02/01 Business Radio WQC569 12/12/99 Business Radio WQM878 1022/02 Business Radio WSP393 9/26/99 CARS WAM-603 5/1/00 CARS WAM-609 8/1/00 CARS WBW-21 5/1/02 CARS WGV-505 8/1/99 CARS WGV-933 8/1/00 CARS WGV-934 8/1/00 CARS WHZ-255 3/1/00 CARS WHZ-509 84/01 CARS WHZ-510 1211/01 CARS WHZ-511 12/1/01 DCWssau TVRO E900587 1/4/01 TYRO E910119 125/01 TVRO E910243 4/12/01 TVRO E910245 4/12/01 TVRO E930082 1120/02 TVRO E9535 8/30/05 TVRO E960504 8/19/06 TVRO KF76 12/16/00 TVRO KH93 8/7/OI TYRO K720 8/14/01 TYRO KL51 3/17/00 FALCON CABLEVISION, a California Limited Partnership Business Radio KDQ768 10/7/02 Business Radio KOK462 9/15/02 Business Radio KE800 7/14/03 Business Radio KNAO 9/12/01 Business Radio KNCA805 12/10/02 Business Radia KNffi241 3/31/03 Business Radio KNIK242 6121/99 Business Radio KNIK243 10/02/00 Business Radio WNHV269 729/99 Business Radio WNHV270 92/02 Business Radio WNLX688 6/16/03 Business Radio WNMX500 10/31/03 Business Radio WNPE989 4/26/04 uwvnsa96-3/1 Business Radio WNQZ837 1/5/00 Business Radio WSG713 3/9/02 CARS WHZ-202 6/1/00 CARS WHZ-405 3/1/03 CARS WHZ-503 11/01/01 CARS WRZ-553 7/1/99 CARS WHZ-637 11/1/02 CARS WRZ-764 9/1/03 CARS WHZ-787 11/01/03 CARS WLY-385 11/01/02 TYRO E2401 11/19/00 TVRO E2516 10/29/00 TVRO E2517 10/29/00 TYRO E4215 4/23/02 TVRO E6812 5/9/06 TVRO E881108 2/3/09 TVRO E891006 11 /99 TVRO E940178 2/2/04 TVRO KQ38 4/30/02 TVRO KW63 11/13/99 TYRO WE54 9/2/00 TVRO WN90 3/19/02 TVRO WR85 7/16/02 TVRO WS94 8/20/02 TVRO WU63 10/22/99 TVRO WU65 10/15/02 ocairo Wll FALCON TELECABLE, A CALIFORNIA LIMITED PARTNERSHIP Business Radio KBE763 10/27/02 Business Radio KJQ415 1/22/02 Business Radia KLP511 5/14/03 Business Radio KNCD696 3/9/03 Business Radio KNFY514 10/16/01 Business Radio KTM737 12/15/01 Business Radio WNAV508 5/4/04 Business Radio WNCP254 621/03 Business Radio WNJM795 9/3/02 Business Radia WNNV779 3/15/04 Business Radio WSV227 624/99 Business Radio WZW230 12/9/02 Business Radio WZY550 11/07/00 CARS WAD -857 7/1/99 CARS WAL-980 7/1/00 CARS WAM-200 9/1/01 CARS WGK-641 1/l/04 CARS WGV-556 2/1/04 CARS WHZ-564 5/1/07. CARS WHZ-908 9/1/99 CARS WLY-396 2/1/03 CARS WAW802 9/l/02 CARS WJA64 7/1/00 CARS WDY77 7/01/00 TYRO E2052 62/00 owia W/l TVRO E2401 11/19/00 TVRO E2460 9/29/00 TVRO E2463 10/06/00 TVRO E2515 9/10/02 TVRO E2516 10/29/00 TVRO E2566 9/10/02 TYRO E2612 9/10/02 TVRO E3535 1/14/07 TVRO E3573 10/9/01 TYRO E3682 11/13/01 'NRO E3768 11/30/01 TVRO E3958 11/05/02 TVRO E5277 2/18/03 TVRO E5619 5/13/03 TYRO E7608 6/21/05 TVRO E9219 8/2/05 TVRO E8773 9/30/08 TVRO KJ42 8/21/01 TVRO KM30 12/18/01 TVRO KR55 6/25/02 TVRO KT61 8/13/02 TVRO KV71 10/22/99 TVRO KX64 ❑/5/02 TYRO KX82 12/26/99 molm3 311 FALCON COMMUNITY VENTURES I LRYUM PARTNERSHIP Business Radio KFC877 8/23/01 Business Radio KOL633 11/29/00 Business Radio KON394 10/5/02 Business Radio KON395 7/13/02 Business Radio KSW277 3/6/00 Business Radio WNGM900 725/01 Business Radio WNH1578 6/6/01 Business Radio WNYE205 1/8/02 CARS WAY -753 7/1/03 CARS WCK610 2/1/03 CARS WDT-757 611/99 (renewal pending) CARS WHZ-602 7/1/02 CARS WHZ-603 7/1/02 CARS WLY-441 3/1/04 CARS WLY-446 4/1/04 CARS WLY-620 2/1/03 CARS WLY216 9/1/00 CARS WLY229 10/1/00 TVRO E2494 1020/00 1 VRO F2578 11/12/00 TVRO E859928 10/11/05 TYRO E940202 228/04 TVRO KM70 12/18/01 TYRO 187 1/2/02 7VA0 K.88 12/02 TVRO KP47 326/02 W ocoimsassan 7 H 1 r FALCON CONDAUNDTN CABLE, L.P., A DELAWARE LMIITED PARTNERSIO TYRO E870982 5/8/07 TYRO WN83 19114104 FALCON viDEO COMMUNICATIONS, L.P. Business Radia 1B-KOL754 6/1/02 Business Radio KNDP857 8/28/00 Business Radio KNGE988 8/21/02 Business Radio KNID580 1/13/04 Business Radio KOM265 10/2/99 Business Radio WNLQ845 4/23/00 Business Radio WNMN232 4/18/00 Business Radio WPAB533 7/20/02 Business Radio WZC901 5/7/01 CARS CARS-WAE654 6/1/00 CARS CARS-WAM550 8p/00 CARS KB60107 6/1/99 (ren pending) CARS KXN486 5/1/00 CARS WAE652 6/l/00 CARS WAE653 6/1/00 CARS WAM549 8/1/00 CARS WG1868 8/1/03 CARS WHZ-283 6/1/00 CARS WHZ-646 11/01/02 CARS WLY-363 6/1/02 Common Carrier Microwave WLM-843 2/1/01 ncoia Mfl a Common Carrier Microwave WLM-844 2/1101 Common Cartier Mimowave WLV-873 2/1/01 TVRO E2046 6/2/00 TYRO E5158 I/7/03 TVRO E7475 8/10/04 TVRO E874153 11/13/07 TVRO E880890 3/17/09 TYRO E910347 6/14/01 TYRO E910402 7/19/01 TVRO E920551 8/4/02 TVRO E920552 8/4/02 TVRO E920553 8/4/02 TVRO E930039 10/30/02 TVRO E930040 10/30/02 TVRO E930041 10/30/02 TVRO E930042 10/30/02 TVRO E930277 4/23/03 TVRO E930278 4/23/03 TVRO E930279 4/23/03 TVRO E940432 7/7/04 TYRO ES -E930206 3/9/03 ES-E930207 3/9/03 ES -E930208 3/9/03 tTVRO ES-KO73 5/18/01 ES-KT50 8/6/02 KE61 7/18/00 OCOVt1 MM v W r TYRO KM58 12/18/01 TVRO KQ82 5/29/02 TVRO KV64 10/15/02 TYRO WP30 3/19/02 FALCON FIRST, INC. o KNBC240 3/02 io KNIE731 2/01 io WNAR203 21/00 io FTVRO "E69863/301M4 22/02 Business Radio WRF532 /18!03 Business Radio WZY700 /04 CARS WGV-511 30/04 TVRO 1 WV28 11/05/99 FALCON CABLE MEDIA, A CALIFORNIA LASTED PARTNERSHIP Business Radio KNBC240 9/15/02 Business Radio KNIE731 724/01 Business Radia WNAR203 3/31/03 Business Radio WNYN546 226/02 Business Radio WRF532 '!8!03 Business Radio WZY700 10/6/02 CARS WGV-511 2/1/03 CARS WHX-896 8/1/99 TVRO E3329 8/31/01 TVRO E3995 12/31/01 TVRO E4072 226/02 TVRO E5824 6/17/03 nN1n3] 3/I 10 TVRO E6028 7/29/03 TVRO E6404 11/11/03 TYRO E6414 11125/03 TVRO E7385 7/13/04 TYRO E7992 11/16/04 TYRO E850260 12/6/05 TYRO E860281 5/2/06 TYRO E900115 3/16/00 TVRO KV29 8/13/02 TVRO W059 2128/01 TVRO NF57 8/18100 TYRO W758 7/31/01 TVRO WL28 1128/01 TYRO WU58 10/15/02 SCHEDULE 3.9 Title to end CaditionorgeRIE pem d I=Sjbic Personal Property ADDRESSES OF OPINED REAL PROPERTY: To be provided within 60 days after execution of the Agreement. ADDRESSES AND DESCRIPTIONS OF LEASES RELATING TO LEASED REAL PROPERTY: To be provided within 60 days atter execution of the Agreement. EXCEPTIONS: 1. Pacific Microwave joint Venture, ajoint venture between Falcon Pacific Microwave, Inc. and TCI -Pacific Microwave, Inc. operates a microwave relay system servicing cable television systems in California and Oregon pursuant to a Lease and Management Agreement with Western Tele-Communications, Inc., a wholly-owned subsidiary of TCI SCHEDULE 3.9 -- Page I SCHEDULE 3.10 Intangibles . 1. FALCON YOUR ACCESS TO ENTERTAINMENT, INFORMATION AND BEYOND and Design: Pending Application Serial No. 74/696,301 filed June 30, 1995, based on intent to use. 2. YOUR ACCESS TO ENTERTAINMENT, INFORMATION AND BEYOND (in plain block lettering): Pending application Serial No. 74/696,302 filed June 20, 1995. 3. FALCON (in plain block lettering): Pending application Serial No. 74/695,800 filed June 20, 1995. 4. FALCON and Design: Pending application Serial No. 74/696,303 filed June 20, 1995. 5. FALCON YOUR ACCESS TO ENTERTAINMENT, INFORMATION AND BEYOND, and design Reg. No. 2,111,054 issued October 28, 1997. 6. YOUR ACCESS TO ENTERTAINMENT, INFORMATION AND BEYOND, Reg. No. 2,111,458 issued November 4, 1997. 7. FALCON: Reg. No. 2,111,457 issued November 4, 1997. S. FALCON and Design: Reg, No. 2,110,055 issued October 28, 1997. 9. FALCON CABLE TV and Design: Reg, No. 1,758,772 issued March 16, 1993. 10. VALUEPAC: Reg. No. 1,758,876 issued March 16, 1993 11. FALCON CABLE FOCUS and Design: Reg. No. 1,756,832 issued March 9, 1993. _. 12. PRIME TIME PICS and Design: Reg. No. 1,781,317 issued July 13, 1993. J J J J ,1 SCHEDULE 3.10 — Page 1 SCHEDULE 3.11 Information Re ardinc the Systems A. Subscribers Approximate Equivalent Subscribers: See attached. Subscriber Rates: See attached B. Certain System I f t o Approximate Plant Miles: See attached. Bandwith capability: See attached. Rates charged by class of service: See attached. C. Foutchise, andFCC Matters 1. An audit by the city of Suffolk, VA contends that customer service reports were not submitted to show compliance per 47 CFR 76.309. 2. Correspondence was received, dated May 6, 1999, from Los Angeles County alleging noncompliance related to late franchise fee payments and certain technical issues. 3. The Company has had ongoing discussions with Los Angeles County concerning an isolated area called Box Canyon, regarding noncompliance with certain safety codes. The area is primarily two mobile home parks located on solid rock and wherecertain coaxial is strong across the rock. A previous settlement agreement has been entered into with the County, under which it was agreed that certain steps would be taken to resolve these concerns. Efforts to resolve these issues continue. Y None E. RXLRSVIBto Mattes 1. Governmental Authorities certified to regulate rates ofthe Systems: see attached list. 2. Pending rate matters: See attached. F. Insurance None. The matters described on Schedules 3.15 and 3.16 aze incorporated herein by this reference. SCHEDULE 3.11-- Page I FALCON CABLE N Statistical Summary by Region March 1999 Plant Mlles k>, HEADEgM BASIC EHU TOTAL QH Ufi MRZ RM R09ue Va0ay, OR MEDFORO,OR 18,684 1,393 20.077 210.15 137.06 060 MEOFORO,OR 9.625 718 10,393 10836 70.01 T50 SubbMl bf MeekN HE 28309 2= 90920 31891 20742 GRANT$PASS. OR 15,475 52 15.527 Mom 70.11 330 MEDFORD (118), WA 7,118 99 7,217 117.90 5041 330 GAVE JUNCTION, OR 680 30 710 25.50 IN 450 MEDFORD (SUNNYSIOE), WA 644 0 5S 330 52.160 2,292 $_.492 60].82 33619 Wanembua, NO MADE BEACH, MO 14.05 2,2% 17,200 58211 139.11 330 SEDALA. NO 0,124 197 0.321 143.17 28.09 450 WARMNSBURG, NO 8,606 ST 8,733 85.52 34.74 400 NEVADA, NO 3.541 0 3,641 0.00 ON 330 CUNTON,MO 3.524 0 3.524 330 KNOB NOSIER, NO 2,336 0 2,330 19.60 29.60 330 HARRISONVILIE.MO 1.626 49 7675 42.33 3.72 300 EL DORADO SPRMGS, NO 1,176 55 1,231 23.35 4.38 300 OALIGOT9IA, NO 1.077 35 1.112 21.72 0.15 90 WINDSOR. MO 995 14 1.009 20.03 0.94 SW WAFSAW.M0 929 62 901 17.53 1.50 300 VERSAILLES. NO 770 32 802 15.00 1.58 270 TIFTON. MO 665 30 703 10.00 4.08 270 PLATTSBURG, NO 567 12 $79 15.10 1.20 300 HOLDEN. MO 400 0 400 15.02 0.50 300 GOWER, MO 336 0 838 10.03 1.34 am MAYSVILLE. NO 170 0 179 8.04 ON 300 47645 2920 50672 1029.32 296.00 Lake Mm .,CA LAKE ARROWHEAD. CA 12.053 179 13.032 24147 28.29 300 OIG BEAR LAX E. CA 12,435 715 13,150 168.25 27.35 300 HESPERIA, CA 11,035 32 11.067 350.00 69.11 330 ADEIAMO, CA 3.452 11 3,463 28.58 75.98 330 ' MOJAVEMOSAMONO, CA 3,414 $ 3,420 04.80 00.55 330 NORTH EDWARDS, CA 1,919 0 1,910 79.02 11.10 330 PHELAN,CA 1,626 14 1,640 80.08 11A2 300 .., NORTH EDWARDS. CA 643 10 602 27.00 1.15 330 NORTH EDWARDS,M l06 0 MRS ula 5.09 360 47.586 979 4e.541 tbnee 26456 SlkestOn/Cape Girzreeau, NO CAPE GIRARDEAU. NO 14,207 0 14,207 240.87 1139 330 SIKESTON, MO 0.432 84 0,516 187.51 44.25 330 w SIKESTON, NO 2911 0 2539 6250 1975 750 Sub.UIW$ik..HE 11.243 112 11.3S6 250.01 59.00 WEST PINNS, NO 21985 170 3,135 90.20 16.00 330 PERRWILLE, NO 2,289 75 2,354 53.94 4.62 400 NEWMADRIO.MO 1.772 7 1.719 49.50 2.85 330 ANNA. IL 1,715 19 1.734 34.Oo 950 300 HARDY. AN 1,847 46 1,692 104]0 5.10 750 'u SEMON, KY 1.569 25 1,599 41.20 5.95 30 IRONTON. NO 1.101 25 1.509 7SW 3.51 460 FREDERICKTOWN, MO 1.483 57 1,520 44.16 O.6B 220 r ST. GENEVIEVE. NO 11336 SB 1,372 42.01 430 4W THAYER, NO 1,099 29 1,120 42.70 7.70 330 CALVERT CRY, KY 780 0 T80 20.50 2.50 3011 I WILLOW SPRINGS, MO 476 24 500 34.30 2.00 330 619 FALCON CABLE N Stag93pal Summary by Region March 1999 MARBLE HILL. MO 376 6 384 28.00 1.10 41 ALTON, NO 201 0 .Ao .•- .... ___ LESTERWLLE, NO 178 2 180 18.00 0.00 220 ANNAPOLIS, NO 72 0 72 3.00 0.00 220 BELL CITY. NO 55 4 0 355 00 300 ALM 542 99X38 119518 Z= D Wr7A51fim, AL DECATUR AL 18.932 392 17,329 325.90 51.84 300 ATHENS, AL 7.535 0 7,05 401.62 17.62 750 SCOIISSORO.AL 4.109 0 4.100 202.28 9.70 550 ELGIN.AL SAW 0 3.188 200.01 2279 400 LEIGWON.AL 2,050 0 2,050 112.51 4.09 40,0 RAINSVILL&AL 1.829 0 1,829 115.55 9.10 40 BEWOW. MB 894 0 894 55.57 5.61 400 CEDAR BLUFF, AL 720 0 728 32.83 200 330 CHEROKEE. AL 675 0 675 42.14 290 330 GURLEY. AL 358 0 30 18.00 1.00 300 BURNSVILLE, MB 205 0 2fifi 10.28 0.0 400 a&% 291. U= 1323.72 125145 K.n.AIO. WA KENNEWICK.WA 39105 0 34.700 43862 397.:9 450 39X09 0 24X55 47997 35134 CANADA, CA 21,924 129 22.053 0.16 276.30 300 Gilroy, CA 5.254 76 5.330 135A1 44.74 30 CANADA CA SOLEDAD PEAK. CA 3.339 26 3.365 19.84 26.14 300 KING CRY, CA 2.350 109 2,459 45&1 WAS See GREENFIEW.CA 1^ 5 1.405 1916 22.52 San CANADA CA 315 0 11H 0.01 10.25 300 34,553 393 34930 320.12 ,E. Eo RWdIn9, CA REDOING. CA 29,109 2.705 31,014 368.63 237143 330 RED BLUFF, CA 4.378 380 4.350 5225 1LAB 330 33951 3.253 35.772 433.91 20.51 YBMBIa, WA YAKIMA, WA 23.616 429 24,045 451.29 180.75 30 GRANDVIEW. WA 2,757 31 2,70 5339 13.28 220 TOPPENISKWA 2.725 88 21793 77.20 11.79 300 6UNNYSIOE, WA 2.044 7 2.051 29.20 9.74 220 ___SSEEn WA rnv 1.338 B ]933 2111 ZJ➢ 550 32.460 02 3].010 W= 2x149 So0areel. KY BURNSIDE. KY 13,892 188 14.080 511.00 17.00 330 CORBIN. KY 7.419 209 7,625 197.30 3.80 270 COLUMBIA, KY 2,598 29 2,625 104.00 0.00 400 LONDON, KY 1.80 0 1.858 119.50 am 270 MT. VERNON, KY 1,472 84 1,50 80.10 0.0 270 PINEVILLE. KY 1,119 0 1,119 709D 0.00 270 EUBANK,KY 876 0 678 57.50 1.00 270 GREENSBURG, KY 657 0 657 7D.90 am WD BOYLE COUNTY. KY We 0 360 40.00 0.00 270 GARRARD COUNTY. KY 344 12 3% 0.60 0.50 270 MCKINNEY, KY 291 0 291 19.00 0.00 400 BRADFORDSVILLE, KY II 0 II 590 090 210 30,951 02 31,483 1355.90 2210 FALCON CABLE N Statistical SDmmary by Reglan March 1999 Dawn, GA DALTON, GA 22,501 253 22,754 601,01 70.90 RINGGOLD. GA 0 5.952 399.93 2211 28.313 331 28.708 1901 To Sam SUOOIWF,CrWin, VA SUFFOLK.VA 6.083 67 6.750 257,25 10.02 SUFFOLK.VA 743 7 750 20.50 10.20 Sublolol for Suffolk HE ] 426 1.4 1309 28593 18202 FRANKLIN,VA 3.741 0 3,741 MASS 24.58 FRPNKLIN,VA 07 0 99T 30.56 6.55 FRANKLIN. VA 269 0 249 R. 1.64 Subloml for Frznklh HE d9ar 0 1552 192.81 +z 7r ACCOMACK, VA 2,970 40 3.010 150,93 1408 ACCOMACK, VA 1.599 21 1.620 102.01 7.58 Sublonl for A.odk HE 9369 JUL 4330 293. 2159 SMITHFIELD. VA 2,222 0 2.222 82.00 MAR SMITHFIELD,VA 953 0 953 36.14 16.50 SubloWl for SmIareld HE 3125 2 5.11:1 137.14 5959 CHINCOTEAGUE.VA 2.087 248 8,315 33.90 22.05 BELLF HAVEN, ve_ 1,195 43 1538 56.05 328 CRISFIELD, MD 1.198 10 1,206 33.72 1926 CRISFIELD. NO 790 7 005 22A0 1284 Subloual for Cnsrela HE 1991 11 2.011 5620 32.15 WAVERLY.VA 880 0 660 30.00 13.20 CAPE CHARLES. VA 470 3 473 29]7 3]8 CAPE CWNLES, VA 232 2 234 14.66 1.84 Sulaolal for Cape CbadeS HE m 5 OR 44 a GATES COUNTY. NC 240 0 240 0.00 7,60 TANGIER bi-AND, VA 113 0 113 3.08 = 27." 995 28.096 111210 33625 Portland, TX ROCKPORT. TX 5,639 791 6,430 150.00 31.20 PORRAND,TX 3.398 0 3.466 7.00 28.0 PORT ARANSAS,TX 3,062 432 3.494 20.0 24.0 W TON,TX 2,341 115 2,656 G0.0 10.50 HONDO.TX 1.263 57 1.320 28.40 90 ^ 1,252 42 7.,7.94 2&0 200 DEVINE, TX 1.249 30 1,207 03.10 11.90 PLEASAMON, TX 1,224 57 1.281 5070 2.0 WEST COLUMBIA, TX 1,187 56 1.243 7.00 50.00 SINTON, TX 11053 7 100 37.00 1.00 BRACKETTVILLE. TX 995 12 1,007 43.00 5.00 SWEENY,TX 941 19 90 25.50 2.00 CASTROVILLE, TX 733 10 PAS 10.0 4.00 SHINER,TX 705 2 707 30.0 0,00 GOLIAD, TX 652 32 6& 21.0 1.0 THREE RIVERS. TX 404 16 422 45.00 0.00 ROCKPORT. TX 296 51 347 SARINAL,TX 226 9 235 12.00 ISO IA FRVOR.TX 264 0 204 13.0 0.00 BIG WELLS, TX 180 0 188 7.0 0.00 BATESVILLE, TX 147 0 147 7.00 0.00 TILDEN, TX 51 0 51 3.00 050 m= im 25936 dILM 116.60 450 300 AM 550 300 40 550 4A 330 300 550 AM 300 300 450 300 330 450 750 550 40 450 30 450 300 300 30 300 220 300 30 AM 330 320 SW V 300 30 300 30 30 V FALCON CABLE N Statistical Summary by Region March 1999 N CrUaN, WA PORT ORCHARD, WA 1],088 235 17,333 452.27 204.91 T PVR, VXl:.. WT - Subtotal to Pad Ord®ra HE 35.305 a81 26.562 GmA. 21824 HOLLY, WA U ➢ a 192 2,52 0 26,374 i6i 26.792 59711 nM SL Geo.9e, Ur ST. GEORGE, Ur 19,913 903 20,816 190.43 309.11 750 HURRICANE. UT 2.09 142 2.781 54.19 28.01 4% MESQUITE, NV 1.051 144 1.211 12.0 31.10 750 LOGANOALE, NV BID 62 672 10.13 18.86 40 GREEN RIVER UT 214 70 281 8.96 1.62 210 HARRISBURG. Ur 170 8 170 10YI 20 270 ROCKVILLE. UT AA 74 .162 1785 205 270 24 Ton 3.964 25.169 29466 29163 Outer Ba.",NC MANTEO. NC 17.976 1,30 19,329 107.71 274.60 450 WAVES, NO 3,573 33 3,08 0.0 14.71 40 COROLIA NO 2162 a 2.179 0.0 52.22 450 23,714 LAU 25139 191.61 A= WenalClae. WA WENATCHEE. WA 19.40 0 19,40 356.93 10.0 40 OKANOGAN, WA 3,287 B 3,207 110.28 12.15 30 EWER CRY. WA M4 ➢ PA9 26.60 23➢ 30 22.621 ➢ 23,621 562.8.1 .169W os Bay. OR CODE BAY, OR 10221 236 10.459 Mal 38.25 450 FLORENCE, OR 3.516 10 3.610 98.0 35.42 450 REEDSPORT, OR 2.476 61 2,537 61.14 11.93 30 COQUILLE, OR 1.620 21 1,849 43.30 1.50 450 BANDON, OR 1.208 97 1.305 15.0 0.48 450 BANDON. OR 05 0 870 10.0 Lee 70 S.Woul tar BaId.n HE 2.019 161 2175 2896 14.14 CWUILLE,OR 672 21 693 25.53 2.08 450 POWERS, OR 157 2 10 5.53 1.0 30 MAPLETON, OR 190 ➢ 14.4 6.0 C0 220 26622 HM 21.437 497.46 162,26 Uncoln Gy, OR NEWPORT, OR 0,997 3 7.00 LINCOLN CITY, OR 61518 1,733 8.281 227.81 3575 750 TILIAMOOK, OR 4.592 427 51019 157.0 38.30 70 TILIAMOOK. OR .2205 M 2296 27.9➢ 710 70 24.392 2359 22.595 767.64 M16 N. WlkaSboro, NO HIGH PEAR MOUNTAIN, NO 1040 0 10.533 473.21 287.94 00 NORTH WILKESBORO, NC 8,050 154 8,204 659.42 0.25 750 ROPAING GAP, NO 5S➢ 22 SA6 BBAA 5.6B 750 19.060 257 19.317 2190.71 MN Cardin BaaU, NO CAROLINA BEACH, NO T.913 919 8,872 102.77 18.97 300 HOLLY RIDGE. NO 3109 40 4,097 196.42 45.06 330 CHINQUAPIN, NO 3,514 81 3,678 150.31 197.00 300 HOLLYRIDGE,NC 2,233 13 2.246 13.67 12.09 30 HOLLY RIDGE, NO 829 2 01 30.69 2720 339 WARSAW, NO 40 1D 476 20.0 14.75 303 FAISON, NO 159 ➢ ]55 6.0 SCM BOB 36.882 3.976 20,358 526.86 279.96 FALCON CABLE N StatisHoW Summary by Region March 1999 ... Natatoria W PLATTSBURGK NY 6,392 205 8,591 135.34 11.54 330 PI.X788URGH.NY 4.729 109 4,838 IWAS 29.90 750 PLATTSBURGH. NY 2,027 47 2,074 72.51 12.82 300 Ss hHE 9$vl9` 599 LM 24170 4212 JAY, NY 758 61 619 51.51 ON 300 WE6TPORT, NY 750 31 735 48.89 1.33 330 LONG IPXE, NY 301 17 11E 74M = 3W 14511 479 15301 SM 9035 PORTERVILLE.fA 14,631 233 14.084 505.15 158.77 330 Tulare, CA M. HOT SPRINGS, CA 126 0 126 73.00 0.57 330 JACK RANCH. CA az 9 u ]258 QJW me 1"939 277 15575 Mm JAM Walla Wena, WA WA WALLA. WA 10.979 644 41.023 Joan 41.51 330 300 MILTCNFREEWATER,OR 1.925 96 21023 AI.65 8.71 POMEROY.WA 591 7 590 19.00 0.50 220 WESTON, WA 498 0 498 8.64 5.60 220 WNTSOURG. WA 475 20 495 7.84 280 330 PRESCOTT, WA 104 0 101 4.30 0.10 220 WASHTUCNA, WA 84 0 84 4.20 0.10 300 STARBUCK WA 0 0 06 239 858 300 19112 709 15591 WM 50.71 ilia, MO WYE MILLS. MO 12,100 310 12.410 457.43 147.16 450 lists WYE MILLS. MO 1544 K 1370 A= ]634 750 SuOWWI for Wye Mills HE 13.444 346 13199 888.26 16331 13.444 254 173&4 55940 163.51 Washori M0 WASHINGTON. MO SAW 46 5,506 150.70 64.90 450 SULLIVAN. NO 2,016 07 2.103 46.80 7.50 550 PACIFIC. MO 1,503 22 1,825 59.80 36.70 450 ST. JAMES, MO 1.201 05 1,286 23.40 1.20 550 PWOSI,MO 1,192 6 1,198 38.60 7.30 550 ST. CLAIR, MO am 35 I.Wo 4250 11.30 450 STEELVILLE, MO 921 17 93fl ]5.50 ].99 450 130" 790 19.975 15539 129,99 Mini TX MARSHALL 4,458 101 4,640 225.70 4.82 400 CARNAGE, TX 2,066 57 2.125 82.00 4.00 400 Ai TX 1.330 50 1.386 70.59 3.25 300 COMANCHE, TX 1,126 19 1,147 50.00 0.00 300 BEWON, LA 1,082 a 1.002 37AO 12A5 300 ARLAOIq, LA 841 27 668 36.00 000 400 HALLSVILLE.TX 638 0 630 16.83 0.41 300 JEFFERSON, TX 513 10 523 25.06 0.52 330 PLAIN DEALING, LA 271 17 288 18.75 0.00 300 GREENSBUl150 16 174 10.20 0.19 300 OHOUGRA26 M, IA 1 0 128 6.40 0.00 270 START, LA 122 0 122 14.65 ON 270 MANGHAM LA g8 0 96 6.80 0.00 270 DIXIE INN. LA W 0 W 1.85 0.15 270 OAK RIDGE. LA 15 9 n S99 9.A 270 12711 901 13 a" RUM 2579 FALCON CABLE N Statlatical Summary by Region March 1999 The Dallea, OR THE OALLES, OR 4,409 140 4,549 89.50 27.80 450 GINGEN, WA 4,057 146 4,203 12360 17.40 T50 SANDY.OR 2.930 2a fa'+ 110.2,1 na 330 11396 3118 11205 33220 7990 Cental Ougm, OR BEAR MOUNTAIN, OR 8.956 327 7,283 44].30 Saw 300 COTTAGE GROVE, OR 1,620 113 1,742 48.40 7.90 400 VENETA OR 1,353 27 1.380 65.00 790 450 BROWNSVILLE.OR 490 5 495 49.30 100 me 10,316 972 39966 610.09 4996 ScIaala, FL SEBASTIAN, FL Sale SEE 9.615 26035 75.10 330 PAM BAY, FL ].0`9 A 1972 060 19.3$ 330 1093 113 1066 290.26 8060 B9adcr. Be BEAUFORT. BC 10,379 8.9 SL094 166.29 5931 750 10376 666 11.064 18920 9021 SM, OK SHAWNEE.OK R7u 331 9,092 376.13 81.01 390 PRAGUE, OK 451 Y2 479 1B.W 1.50 330 6HAWNEE,OK 310 0 310 8.40 US 750 STRATFORD. OK 258 9 265 11A0 130 400 SHAVMEEOK 215 0 215 330 MEEKER,OK 189 0 109 lam O.B2 330 EARLSBORO.OK 64 0 50 939 119 400 19',149 396 10.614 43933 9942 cra*VtoIY,CA SMITH RIVER, CA 5.565 373 6.506 214.97 4530 750 SMITH RIVER, CA 313M In 3.553 133.78 60.13 400 GOLD BEACH. OR 1609 lyl ]yq9 7y{y 9,77 750 9350 721 10,697 41079 11420 DOE,OR OAI-As.OR 7.418 140 7.550 120.20 62.40 300 SILVERTON.OR 1.&5 18 LINO 9099 1279 300 " 9351 164 6936 16110 8020 EJlQMbUV0e Elum. WA ELLENSBURG. WA 5.013 0 51943 6060 57.60 270 CLE GLUM. WA =➢.iu 33V 8946 a 0395 0000 9000 L Rosebur9.OR ROSEBURG, OR .6,374 313 6,607 10.579100 750 StROR 1912 aHERUN, bi 1911 54.14. mila270 8.199 379 LWLW22227.71MU Z1 89,92 LvmEea County, GA LAKE PARK, GA 3.265 89 3,354 non 46.40 300 MOODY AFS, GA 1199 1r9 2.305 Wlti 93.91 300 54]1 198 8.554 25936 69.80 W.I., 10 EMMETT, ID 1,033 35 1,560 83.20 12.0 300 MCCALL, ID 1,291 238 1,529 31.55 tam 300 d WEISER. 10 1,230 53 1253 24.6 5.83 300 CASCADE, ID 304 27 331 6.16 2.10 900 COUNCIL, ID 247 4 251 12.00 0.03 900 HALFWAY, OR 107 10 117 6.00 0.00 300 III NEW MEADOWS, ID 00 9 W 6.00 0.05 300 DONNELLY, ID 11 9 71 3.35 am 300 UU 373 4.412 17890 an IN FALCON CABLE N statistical summary by Region March 1999 Py Grey Ml SIMSTOWNSHIP,MI 1,405 13 1,418 59.74 1446 300 FRASERTOWHSHIP,MI 862 0 682 4.67 2.03 300 H E(PIAINFIELD). MI 650 6 S58 47.86 3.73 300 COIEMAf CITY, MI 3P 0 377 10.36 1.50 WU AHRON TOWNSHIP. MI IN 0 191 13.70 0.43 300 ROSEBUSH VILLAGE, M1 17a 3 In 7.86 0.65 300 UNIOWILLE VRI -AGE. MI 120 0 120 4.72 0.28 O STERUNGVILLAGE.MI ll0 0 110 =53 0.O NO 9.212 22 9.115 ULU 2256 COLVILLE, WA 2,374 141 2.515 32.02 46.46 330 Comil.. WA LOON IARE. WA am 4d 1,024 25.63 31.55 450 NORTIPORT. WA 86 5 0 220 311I 144 ].442 54.44 295.1 GRAND TOTAL 049.110 31730 1,440.454 25513.18 7,59464 SUBSCRIBER RATES Delivered Separately Copies me available from Dow, Lohnes & Albertson, PLLC upon request W I" I CHANNEL LINE UPS Delivered Separately Copies are available from Dow, Lohnes & Albertson, rLLC upon request FALCON CABLE TV CERTIFIED FRANCHISES AS OF MAY 1, 1999 WKCotls _..= Re Ion.=^��� `- Cedlfied Frznchise Areas - - rS �e AST006 ASTORIA Aston MI AUG058 AU GRES Rosebush Village AR BEN071 BENTON Maumelle NC SUR127 BURKE Burke County NC CAR133 CAROLINA BEACH Holly Ridge NO CAR134 CAROLINA BEACH North Topsail Beach CAR135 CAROLINA BEACH Onslow County NO CAR136 CAROLINA BEACH Sud City NC NC CAR137 CAROLINA BEACH Topsail Beach NO CAR142 CAROLINA BEACH Richlands CAR145 CAROLINA BEACH Wallace NO NO CAR160 CAROLINA BEACH Carolina Beach NO CA 152 CAROLINA BEACH Kure Beach NC CM153 CAROLINASEACH New Hanover County CAR837 CAROLINA BEACH Onslow County (Bud CKY) NC CE0154 CEDARTOWN Cedadown GA GA CED163 CEDARTOWN Cave Spring WA COL181 COLVILLE Chewelah KY COR191 CORRIN Corbin OR C06203 COOS BAY Reedspad OR CRE216 CRESCENT CITY Brookings OR OR CRE218 CRESCENTCITY Curry County CRE219 CRESCENTCITY Del Node County CRE220 CRESCENT CITY Curry County OR OR CRE222 CRESCENTCITY Curry County OA DAU27 DALTON Dalton GA DAL230 DALTON Whitfield County GA DAL232 DALTON Ringgold OR OR DLS254 DALLAS, OR. Mt. Angel OR DLS255 DAAS, OR. LL RiNannn OR OLS256 DALLAS, OR. Dallas OR DLS258 DALLAS, OR. Independence OR DLS261 DALLAS, OR. Monmouth OR DLS263 DALLAS, OR. Bay City OR OLS264 DALLAS, OR. Cannon Beach DLS265 DALLAS, OR. Garibaldi OR ELL001 ELLENSBURG Ellensburg WA FLR271 FLORENCE Duna City OR FLR272 FLORENCE Florence OR FLR273 FLORENCE Lane County(Florence) OR GIL275 GILROY Gilroy CA CA GIL276 GILROY Hollister CAA GIL277 GILROY Monterey County GIL27S GILROY Morgan HILI GIU80 GILROY San Juan Saullsto CA GIU82 GILROY King City CA GIU83 GILROY Monterey County CA GIU85 GILROY Monterey County CA GIL287 GILROY La Mesa Naval Poet Graduate School CA GIL288 GILROY Monterey County(Laguna SBcaIRTG) CA GIL290 GILROY Monterey County CA GIR001 GIRARDEAU Cape Girardeau MO HOD356 HOOD RIVER Hood River OR HOD360 HOOD RIVER Clackamas County OR HO0361 HOOD RIVER Sandy OR KLA003 KLAMATH FALLS Lakeview OR LIN384 LINCOLN CITY Lincoln City OR LIN385 LINCOLN CITY Lincoln County OR LOW389 LOWNDES Leve Park OA LOW390 LOWNDES Lowndes County GA LOW391 LOWNDES Lowndes County GA MAL393 MALIBU Los Angeles CA MAL394 MALIBU Los Angeles County CA MAL847 MALIBU Malibu CA MAL848 MALIBU Calabasas CA MAL865 MALIBU Hidden Hills CA MALS69 MALIBU Lost Hills CA MAR398 MARSHALL Marshall TX MAR402 MARSHALL Atlanta TX MAR413 MARSHALL Hallsville MAR414 MARSHALL Jefferson TX MED001 MEDFORD Medford OR NEV001 NEVADA Nevada MO NEW001 NEWPORT Lincoln OR ORC439 PORTORCHARD Bremerton WA ORC441 PORT ORCHARD Kilsap County#1 WA ORC836 PORTORCHARD Kitsep County (Holy) WA OSA453 OSAGE BEACH Osage Beach MO PLA469 PLATTSBURGH Ausable NY PLA470 PLATTSBURGH Chesterfield NY PLA471 PLATTSBURGH Dannemora Township NY PLA472 PLATTSBURGH Keesevma NY PLA473 PLATTSBURGH Peru NY PIA474 PLATTSBURGH Plattsburgh NY PLA475 PLATTSBURGH Saranac NY PLA476 PLATTSBURGH Schuyler Falls NY PLA477 PLATTSBURGH Beekmantown NY PLA478 PLATTSBURGH Plattsburgh NY PLA849 PLATTSBURGH Dannemora Village NY PLE495 PLEASANTON Shiner TX PLE496 PLEASANTON Hondo TX POR531 PORTLAND Sinton TX POR532 PORTLAND Part Aransas TX R00540 ROCKMART Rockmart GA ROS641 ROSEBURG Roseburg OR SCT547 SCOTTSBURG Scotlsburg IN SEB554 SEBASTIAN Fellsmere FL SEB556 SEBASTIAN Indian River FL SEB556 SEBASTIAN Sebastian FL SEB557 SEBASTIAN Palm Bay FL SHA569 SHAWNEE Shawnee OK SIK571 SIKESTON Sikeston MO SIK575 SIKESTON Marston MO SIK585 SIKESTON Benton KY SIK586 SIKESTON Calvert City KY SLO611 SLO San Luis Obispo County CA SOM614 SOMERSET Pulaski Co. (North) KV SOM616 SOMERSET Somerset KY SOM618 SOMERSET Columbia KY SOM621 SOMERSET Pulaski Co,(NUM) KY SOM625 SOMERSET Burnside KY SOM620 SOMERSET Ferguson KY SOM627 SOMERSET Pulaski Co. (Bumside) KY SPR628 CENTRAL Drain OR SPR629 CENTRAL Yoncalla OR SPRIGS CENTRAL Brownsville OR SPR639 CENTRAL Coburg OR SPR640 CENTRAL Creswell OR _ SPR642 CENTRAL Lowell OR SPR643 CENTRAL Oakridge OR SPR644 CENTRAL West Fir OR SPR645 CENTRAL Collage Grove OR SPR648 CENTRAL Veneta OR STG856 STGEORGE Clark Co.(Bunkerville) NV STG660 STGEORGE Clark Co. (Overdo) NV - SUF668 SUFFOLK Chincoteague VA SUF670 SUFFOLK Accomack County VA THE719 THE GALLES The Dallas OR WAL005 WALLA WALLA Adams OR WAL007 WALLA WALLA Wellsburg WA WAL008 WALLA WALLA Pomeroy WA .., WAR738 WARRENSBURG Warrensburg MO WAR743 WARRENSBURG El Dorado Springs MO 'WER003 WENATCHEE Grand Coulee WA WEN004 WENATCHEE Leavenworth WA WEN006 WENATCHEE East Wenatchee WA WEN007 WENATCHEE Toreson WA WEN008 WENATCHEE Orovllle WA WEN011 WENATCHEE Omak WA WES777 WESTPLAINS West Plains MO WIL791 NORTH WILKESBORO NaM Wilkesboro NC ., WIL792 NORTH WILKESBORO Wilkes County NC WIL793 NORTH WILKESBORO Wilkesboro NC WIL794 NORTH WILKESBORO Wilkes County NO YAH001 YAKIMA Sunnyside WA YAK009 YAKIMA Yakima WA rr FRANCHIS BASIC RkTEDEDM Meta Ce0a0own Caresp019 Ballon Musi0 County W0I4Ie10C m Cannon 8.0 GaObalOi Duro City Fsaane, T ..Od Cam Malibu Marshall Marsbxll ROO"" Oman TOOalla Brom Wle Coburg Creswell Creswell Lowell Lowell Co"'. Grove V.nava CPSTRO�COMPLAINTS Bunke County Allelle Bell County Coo, CO. (Coos BoyMonb BON). OR Baton Calaoaa County Monterey Co. MmBan Hill LInoon City Malibu Los Angeles Co. (HIC6en HIII,) Manu Bare County IGI DONT Hills Sou%em Sbmes Aa .d. Sen Luis OMepo Count' Pulaski Co. (NOM) O.aidge Wenervshu5 TIME PERIOD CRIB r.OVER90 OR0011 1096-197 CUMN52 1197-0490 GND213 SIM -797 GA0051 794.1296 GMMIT 1097-499 C,M)M7 0794-09196 ORO042 1096-797 OROOB7 1098-797 OR186. 014198 794-12196 OR0058 794-890 CA0650 794.1296 CA0249 imal-Cu"m 7X0209 794-12196 7X0203 992-794 GA0087 7104.1296 OR0052 795-1296 0140202 MI5 -1258 OR0214 1096.797 OR0176 1096497 OR0321, 0140322 100- W OR0321.OR0322 1096-797 OM206 1096-797 OR0206 1096-797 OR0340 1856-797 OR0209 10196-797 NC0569 794.12198 ALMS 7194.1296 "Im.1 Y1052, MOSS. W1054, 1 Y1055, Rri058. Nn057. VIOSS. MMM037 794.1396 OR002O 295.1286 GA0051 1098-1286 GA0173 195-1296 CA0690. CA1013. CA1040. CA1118, CAii69. CA1190, t✓.05le 199-599 CA0184 199-59G OR0072 794 -12196 CAM49 790-1298 CA1406 11190-499 TX0506 1195-1296 NC0544, NC0975, NC0723, NCW93, NC0049. NC0047, NC0SM 744. IM6 NC0047 7104.1296 NCW40 993-Cunent CA0631 794-1296 CAO 794-997 M i32 795-12196 OR0079 795-1296 M00024 595-1296 Schedule 3.11 fel Information Regarding the Systems Goveromental Authority's Right to Acquire Interests in Any System Centre, Alabama Coleman, Michigan Fellsmare, Florida Franklin County (East) (Weso, Missouri Greenevers, North Carolina Hidden Hills, California Ironton, Missoun Kill Devil Hills, North Carolina Mameo, North Carolina Nags Head, North Carolina Pacific, Missouri Pointer County, North Carolina Piedmont, Alabama Sikeston, Missouri Southern Shows, North Carolina St. Clair, Missouri Ste. Genevieve, Missouri Surf City, North Carolina Union, Missouri Village of Four Seasons, Missouri Wakefield, Virginia Washington, Missouri Waverly, Virginia West Plains, Missouri Anderson, California Bums, Oregon Calabasas (Malibu), California Calabasas (Loss Hills), California Gilroy, California Hollister, California Los Angeles County (Hidden Hills), California Los Angeles County (Malibu), California Malibu, California Osage Beacb, Missouri Redding, California Shasta County, California n SCHEDULE 3.12 Taxes TAX F'E.ING.tURISDICTfONS In addition to the federal and state income tax filings listed below, the Falcon Companies file and real property returns with various local filing jurisdictions. personal Falcon Communications, L.P. Federal, AL, AR CA, FL, GA. ID, IL, IN, U, KS, KY, LA, MD. MO. NC, OK, OR SC, Irf, Falcon Funding Corporation Federal, CA Falcov Cable Cammuvicatic ns, LLC CA, TX Falcon Media Iaveston Group, A California Lwimd Partnership Federal, AR CA, FL, GA, MD. NC, OK Falcon Cable Media, Federal, AR CA, FL, OA. MD, NC, OR A California Limited Partnership Falcon Community Investors, L.P. Federal, CA. GA, KY, OR A California Limited Parmersldp Falcon Community Cable, L.P. Federal, CA, GA. KY. OR A Delaware Limited Partnership Falcon Community Ventres I Limited Partnership Federal, CA. GA, OR Falcon Tdeable Inverner Group, Federal, AR CA, IL, IN, U, KS, KY, LA, MO, OR A California Limited Parmersbip DT Falcov Telecable, A California Limited Pmmership Federal, AR. CA, IL, IN. U, KS, KY, LA, MI (SST), MO, OR llT Falcon Telecom, L.P. Federal, CA Falcon Investors Group, Ltd. Federal, AL, CA, GA, IN. KS, MO, OR A California Limited Partnership (Final Returns in 1999 for IN & KS due to sale of ayatemt) Falcon Cablevision, A California Limited Partnership Fedenl,AL, CA, GA, IN, KS, MO, OR (Final Returns to 1999 for IN & KS due In sale of systems) 212 sa,crah Suet. lea. Fedesai, MO, MO (Faavcldse) L' Falcon Cable Systems Company 11, L.P. Federal, CA, OR Falo=Equipment Company, LLC Federal, CA L Falcon Video Cvnunuvicatiem Imcsrors, L.P. Federal, CA, ID, NC, OR SC 1CA, Falcon Video Conmruvi<etiovs, L.P. Federal, ID, NC, OR SC wilvat Transmissions Co., Inc. Federal, NC SCHEDULE 3.12 — Page 1 Federal California indiv. (Consolidated) (Combined) State Falcon First Ino. X x Falcon First Cable of New York, Inc. X X Plattsburgh Cablevision, Inc. x x NY Ausable Cable TV, Inc. X x NY Falcon Fiat Cable of the Southeast x AL (Frmclase) Falcon First Holdings, We. % FF Cable Holdings, lot. R Ceder Wall Cablevision, Ine. x Eastern Mississippi Cablevision, Inc. X MS Lauderdale Cablevision, loo x Scottsboro Cablevision, Inc. X Athens Cablevision, Inc. x X AL AL (Fauchim) Dalton Cablevision, Inc. X X GA Multivision of Comment, Inc. x GA Mullivisien NOMeast, na x GA Scottsboro TV Cable, Inc. X X AL, MS AL (Fanchice) AtOens Acquisition, Inc. X AL (Franchise) Additional Tax Filings described on the attached list. -- TAX PROCEEDINGS 1. Scheduled property tax audits with various counties in North Carolina, Georgia and — Washington. 2. Scheduled Sales and Use Tax Audit in New York state. 3. The City of Los Angeles, CA is evaluating the imposition of business tax against Falcon Cablevision in addition to franchise fee assessments. SCHEDULE 3.12 -- Page 2 M 4. Pending audit of Falcon Cable Media by Florida Department of Revenue for Sales and Use and Intangible Personal Property Tax. 5. The federal retuma of Falcon Video Communications, L.P. for fiscal years 1993,1994 and 1995 were audited. TAX PARTNERSHIPS 1. Falcon Telecable, a California Limited Partnership is a general partner of. (i) Falcon/Capital Cable General Partnership which, in tum, holds a general partnership interest in Falcon Capital/Cable Partners, L.P. and (ii) Falcon Lake Las Vegas Cablevision, L.P. 2. Falcon Community Cable, L.P. is a member of COC, LLC and BCC, LLC 3. Falcon Cable Systems Company B, L.P. holds an interest in SFC Transmissions. DEFERRED INCOME 1. The sale described in Schedule 3.7, Item 1, and the acquisition described in Schedule 6.1, Item 2, are to be effected as a Section 1031 like -kind exchange under the Imcmal Revenue Code. SCHEDULE 3.12 — Page 3 W SCHEDULE 3.13 EmajoymPlans I. Falcon Communications, L.P. Group Insurance Plan (insured by Blue Crass) (formerly known as the Falcon Holding Group L.P. Group Insurance Plan) 2, Falcon Communications, L.P. Life Insurance Plan (insured by Mutual of Omaha) e. I tines annual salary & 1 times accidental death and dismemberment b. 2 times annual salary & 2 tines accidental death and dismemberment 3. Falcon Communications, L.P. Long Term Disability (Insured by Unum) 4. Falcon Communications, L.P. "Smart" 40l(k) Plan 5. Falcon Communications, L.P. Cafeteria Plan a. Group medical, employee contribution b. Reimbursed out of pocket medical c. Dependent Care 6. Falcon Communications, L.P. Dependent Life (insured by Mutual of Omaha) 7. 1993 Amended Employee Incentive Plan S. Falcon Communications, L.P. Key Executive Equity Program 9. Vacation and Sick Leave Policy. V SCHEDULE 3.13 —Page I p SCHEDULE 3.14 Ewi=gntal Laws Nane. SCHEDULE 3.14 —Page 1 SCHEDULE 3.15 Claims and Litiamion 1. Connie 1, Wooslev. Plaintiff is a former employee who alleges breach of implied contract, wrongfid termination, and age discrimination. Employee was hived in 1989 by Falcon Holding Group, Inc. and worked for Falcon Holding Group, L.P., until August 1994, when herposition was eliminated. Falcon Holding Group, Inc. is a defendam, but Falcon Holding Group, L.P. is not. Plaintiff has filed an Application for Reconsideration of Denial of Motion for Relief. A hearing is scheduled for June 2nd. 2. Craie Westlinn. Plaintiff is a terminated former employee of Falcon Telecable, Inc. who alleges tortious discharge in violation of public policy; breach of contract; breach of the covenant of good faith and fair dealing; defamation; and intentional or negligent infliction of emotional distress. Plaintiff alleges that he was directed to falsify CLI reports. Discovery is proceeding in this action. 3. lenniferWhiteside v. David I Gand Falcon Cablevision. Plaintiffs vehicle was allegedly struck by Falcon vehicle driven without authorization, not in the course or scope of employment duties and while driver was allegedly under the influence of alcohol. 4. Swofford v. Falcon First. Plaintiff (Homeowner) suing Falcon, GTE and Scottsboro Electric Board for fire which allegedly destroyed Plaintiffs home following power companyjumper cable failure. Discovery stared. 5. The matters described on Schedules 3.1 l(C) and (D) and 3.16 are incorporated herein by Us reference. 6. TCI Cablevision of Washington Inc. settled a class action filed in May, 1994 pertaining to processing fees related to the late payment of monthly bills. The settlement terms apply to late fees for certain of the Systems in the State of Washington. 7. The following matters were pending with respect to certain of the assets contributed by the Subsidiaries of Tele-Communications, Inc. under the Contribution and Purchase Agreement, dated as of December 30, 1997, by and among Falcon Holding Group, L.P., Falcon Communications, L.P., Falenn Holding Group, ._y TCI Fakm, Hcidings, LLC. halo Ventures, Inc, and the other entities signatory thererett o: thereto: a. Pullam at al v TCI Cablevision ofAI 6 Inc.Civil Action No. CV 97-300, Circuit Colne of Dallas County,Alabama. Action filed on October 3, 1997 on behalf of all Alabama subscribers challenging the legality of late fees charged to cable subscribers. TCIC-AL's response was filed on December 1, 1997. No class has been certified, and the Action is currently in discovery (Sub Birmingham and Decatur, AL system). b. Collins and Henderson, or al v TCI Cablevision of Alabama Inc et al Civil Action No, CV 97 07783, Circuit Cour of Jefferson County, Alabama. Action filed y on December 10, 1997 on behalf of Alabama subscribers challenging the legality of late fees charged to cable subscribers. No class has been certified, and the case is in 1 a preliminary stage. (Sub Birmingham and Decatur, AL system). Lg SCHEDULE 3.15 —Page 1 W rb c. M".ks, at al C ast Cablevision Co".f Alabarag, at al Civil Action No. CV -97-137, Circuit Court of Jefferson County, Alabama. Action filed on October 23, 1997 or behalf of Alabama subscribers challenging the legality of late fees charged to cable subscribers. No class has been certified, and the case is in a preliminary stage. (Sub Bitmingham and Decatur, AL system). d. Redding, Califgmi Fourseparate workers'compensation injury claims with total combined amount incurred of approximately $82,000 with total combined amount remaining to be paid of approximately $32,000 (Redding, CA system). e. 1996/1 Statement of Account filing: On July 2, 1997, the Copyright Office inquired regarding carriage of distant Actions WTBS and KTVU. On September 15, 1997, Tele-Vue Systems, lac. responded to the Copyright Office (Redding, CA system). f Bernstein, at al, v, TCI CAblevision of St Louis at Al,Civil Action No. CV -97-29276, Circuit Court, 22nd Circuit, St. Louis, Missouri. Action filed on October 30, 1997 on behalf of Missouri subscribers challenging the legality of late fees charged to cable subscribers. No class has been certified, and the case is in a preliminary Stage. (Nevada and Cape Girardeau, MO) g J. T 1 -C Inc.,at al. Civil Action No. CV -97-29146, Circuit Court, 22nd Circuit, St. Louis, Missouri. Action filed on October 16, 1997 on behalf of Missouri subscribers challenging the legality of late fees charged to cable subscribers. No class has been certified, and the one is in a preliminary stage. (Nevada and Cape Girardeau, MO) h. 19952 Statement of Account filing: On February 10, 1997, the Copyright Office inquired regarding carriage of KKFf licensed to Ft. Scott. On May 28, 1997, TCI Cablevision of Missouri, Inc. responded to the Copyright Office (Nevada, MO system) i. 1996/1 Statement of Account filing: On July 30, 1997, the Copyright Office inquired reaardin? rarriage. of KKFTlieeneed to Ft$rntt_ On September 12, 1997, TCI Cablevision of Missouri, Inc. responded to the Copyright Office (Nevada, MO system) j. 1996/1 Statement of Account filing: On March 17, 1997, the Copyright Office inquired regarding carriage of WTBS. On September 12, 1997, TCI Cablevision of Oregon, Inc. responded to the Copyright Office (Medford, OR ,,. system) le. DarecrGrob, at al, Tele-Communications Inc.. et al. Civil Action No. ,.._ CV -97P-1304, Circuit Court, Polk County, Oregon. Action filed on November 26,1997 on behalf of Oregon subscribers challenging the legality of late fees charged to cable subscribers. No class bas been certified, and the case is in a preliminary stage. (Oregon systems.) SCHEDULE 3.15 — Page 2 1. 1995/1 Statement of Account: On July 1, 1996, the Copyright Office inquired regarding the classification of station KSTW. On September 12, 1997, TCI Cablevision of Yakima, Inc. responded to the Copyright Office (Walla Walla, WA system) or, 1995/1 Statement of Account: On July 2,1996, the Copyright Office inquired regarding carriage of station KXLY or its associated translator K30AJ and KSPS. On September 12,1997, TCI Cablevision of Washington, Inc. responded to the Copyright Office (Wenatchee, WA system). n. 1996/1 Statement of Account: On July 17, 1997, the Copyright Office inquired regarding the local classification of educational television station KSPS. On September 12, 1997, TCI Cablevision of Washington, Inc. responded to the Copyright Office (Wenatchee, WA system). o. In re Complaint iifth Centel Wh' etn Association for Public Telecommunications e ' H TCI Cablevision of Wenatchee Inc Request for Carriage filed with Federal Communications Commission, CSR -3752, WA0116 Pursuant to the Memorandum Opinion and Order Adopted by the FCC on June 10, 1993 and Released on Jane 24, 1993, the Request for Carriage by Central Washington Association for Public Telecommunications, licensee of Station KYVE-TV (Educ. Channel 47) was granted (Wenatchee, WA system). p. Thompson vTCI Cablevision of Washington. Inc.. Case No. 94-2-00243- 2, Superior Court for the County of Okanogan, Washington. Action filed against TCIC-WA challenging the legality of late fees charged to cable subscribers. The matter has been settled. The Washington Appellate Court entered its approval order on May 7, 1999. The terms of the settlement must be implemented by August 5,1999 (Washington systems). q. PacifiCorp has conducted pole attachment audits and is asserting that there are numerous unauthorized attachments by the cable companies. PacifiCorp is distributing the results of the audits for review (Grants Pass, OR, Medford, OR, Walla Walla, WA and Takima. WA). 8. Robert Kem, at al. v. Falcon Cable Media. Plaintiffs have filed a class action proceeding against Falcon Cable Media, Falcon Media Investors Group, and FHGLP fn New Hanover Coumy,North Carolina. The Complaint alleges breach of contract and breach of the franchise agreements (of which plaintiffs claim they are third party beneficiaries), with the purported breaches consisting of the failure to deliver a clear picture to subscribers and to timely respond to service interruptions. The class certification motion has not yet been decided. 9. Felton and Jo Ann Marcell v. Scott Long (a Falcon/Enstar employee), John Goforth, Falcon lW Cable Company and Diversified Cable Company, Falcon Holding Group and Enstar Income Program 1984-1, L.P. Plaintiffs have filed actions both in the U.S. District Court for the Western District ofTennessee and in the Hardcmare County, Tennessee District Court. Both Complaints allege false arrest arising out ofinistaken report by a Falcon employee that SCHEDULE 3.15 -- Page 3 m P Plaintiffs had an illegal cable hookup. Part of the defense case is that the mistaken report was based upon a wrong address Provided by Mr. Marcell at, and subsequent to, a request for new service. 10. Homer and Carlile Enterprises v. Linda Wray; Ron Arnold; and Falcon First Communications, L.P. Plaintiff has filed an action in Jackson County, Alabama Circuit Court to enforce an alleged agreement to pay advertising commissions. Part of the defense case is that the contract with the Plaintiffs was terminated pursuant to its touts prior to the placement of the advertisements in question. A defense motion for summaryjudgment recently was denied. Trial presently is scheduled to commence on August 2,1999. 11. Matters described on Schedule 3.16 are incorporated herein by this reference. SCfJEDULH 3,15 -- Page 4 SCHEDULE 3.16 Compliance with Laws 1. Processing Fee Litigation a. Missouri -Jerry Stewart, individually and n class representative vs. Falcon Cable Holding Group, L.P., Falcon Holding Group, Inc., Ewer Communications Corp., Enter Cable Corp. and David Huntsman. Filed in Circuit Court, City of St. Louis, MO (later moved to U.S. District Court East in the District of Missouri, filed January 28, 1998. Class Action seeking declaratory and injunctive relief claiming the defendants alleged late charge for cable bills after the due date is a penalty, and is illegal. b. Illinois -Don Trambley and Nona Trambley on behalf of themselves and others similarly situated vs. Falcon Holding Group, L.P. Falcon Holding Group, Inc. Enstar Communications Corp. and Ensmr Cable Corp. filed in U.S. District Court, Southern District of Illinois, December 28,1998. Class Action compliant alleging defendants unlawfully assessed charges. Plaintiffs petitioned for declaritoryjudgementfording that the late charge imposed by defendant's void and unlawful, and, at penalty, the defendant be enjoined from continuing to assess the late charge on plaintiffs, c. Oregon- Sonny Dickey on behalfof himself and other subscribers in Oregon vs. Falcon Cable Systems Company Il, L.P. filed in the Circuit Court of Douglas County, Oregon on February 4, 1999. The action seeks restitution and injunctive relief in connection with the Company's imposition of late fees. Discovery has not commenced. 2. A matter is pending with the Santa Clam County (San Jose) District Attorney's office that relates to complaints, raised by subscribers, relating to certain procedures followed by Signal Audit Services ("SAS"), a contractor of Falcon upon discovering an illegal black box in a subscriber's home. 3. The Smte of Washington has commenced an administrative action arising out of the failure of Falcon Telecable to register as a contractor with Washington Contractors Board. V SCHEDULE 3.16 —Page 1 SCHEDULE 3.17 Transactions with Affiliates 1. Falcon Companies have certain arrangements with affiliates ofTele-Communications, Inc. that are addressed in Section 63S and Schedule 6.18 of the Purchase Agreement. This disclosure is informational and is not an acknowledgment that Tele-Communications, Inc. is an affiliate of the Falcon Companies within the meaning of"Affiliate" as defined in the Purchase Agreement. 2. Management Services Agreement, dated as of September 30,1998, by and between Hester Cable Corporation and Falcon Communications, L.P. 3. Consulting Agreement, dated as of September 30, 1998 by and between Falcon Communications, L.P. and Easter Communications Corporation. 4. Services Agreement, dated as of September 30, 1998, by and among Falcon Communications, L.P., Enstar Communications Corporation and Easter Cable Corporation. 5. Tele-Communications, lac. holds an equity interest in CSG Systems, Inc., which provides billing services to the Falcon Companies. 6. Pacific Microwave Joint Venture, ajoint venture between Falcon Pacific Microwave, Inc. and TCI - Pacific Microwave, Inc. operates a microwave relay system servicing cable television systems in California and Oregon pursuant to a Lease and Management Agreement with Western Tele-Communications, Inc., a wholly-owned subsidiary of TCI. 7. The arrangement described in Schedule 6.1, Item 1 is incorporated herein by this reference. SCHEDULE 3.17 —Page 1 See attached. SCHEDULE 3.20 Overbuilds, om a itin SCHEDULE 3.20 —Page 1 \§)§\BGIM \ j ! \!\§ ) /( \ } &.yy , a; .. � \\/\t\ #! !/!! - \ \ \\ \ | \ )! j| R\© H b� ) !/ »a§\aa§!\\\\§\)! \§)§\BGIM \ j ! \!\§ ) /( \ } &.yy , a; .. � \\/\t\ #! !/!! \§)§\BGIM \ \!\§ /( | &.yy , a; .. � \\/\t\ #! SCHEDULE 3.21 Disconnections DISCONNECTIONS: 10/31/98: 31,903 IV30/98: 31,901 12/31/98: 28,054 1/31/99: 22,216 228/99: 29,577 3/31/99: 30,066 DISCONNECT POLICY: Non -pay Disconnects — Every attempt should be made to adhere to the following timing, given available personnel and non -controllable circumstances. Stec I) Approximately 45 to 60 days - Accounts are worked by office personnel Sten 21 Approximately 60 to 65 days - Accounts sent to field for collection or disconnection. Stec 3) Approximately 65 to 70 days - work orders are closed out in CSG. Sten 1 — Office personnel attempt to contact customer to collect the delinquent amount or set up payment schedule. Accounts not contacted or who miss the payment schedule move to step 2. Step — Field personnel attempt to collect delinquent amount by contacting available customers. Accounts not contacted are disconnected. At the disconnection, a door hanger should be left instructing customer to contact our office. Step 3 — All non -pay work orders should be closed out in CSG in order to stop further billing to customer account. Voluntary Disconnects — Every attempt should be made to adhere to the following timing, -_ given available personnel and non -controllable circumstances. Dav 1 — Customer notifies office of disconnect. CSSR schedules per customer. „1 CSSR attempts to save customer. - Eegionine on Dav 2 — Unsuccessful saves, to extent possible, are pre -called by r_ CSSR to confirm schedule of disconnect and attempt to save customer, Beginning 2a.DaK 4— Disconnect sent to field where technician attempts to contact customer to confirm disconnect and possible save. Unsuccessful saves are disconnected. Work order is closed out in CSG to stop billing to customer account. u V SCHEDULE 3.21 --Page t SCHEDULE3.23 Budget See attached SCHEDULE 3.23 — Page I R Oi R� a ('—SHRs A ass sea 2 a of P =a c c a c c==nee=is ^ ao a e e e e e e e ae g R 9 ee==e a e=e a as g e o o e a a a e e e ee els S, ae e e a a o e e a e eees aaee R:caA^"Agvo===W=R^eRaRR� a==ee==^= =s '„�atla keep _ RRaRa i ee e e e e e e e==r ea e i R�$@&RRR&@&$$�RRRRRRRRR RRRRRRR�RRRRRR SY RS^'uI a^��3R.eaa2e gae6}2A ol=3'95a=RFaa== �_�= 2aaP nP=RaRa�3=cePcytae9F Ay ('—SHRs A ass sea 2 a of P =a c c a c c==nee=is ^ ao a e e e e e e e ae g R 9 ee==e a e=e a as g e o o e a a a e e e ee els S, ae e e a a o e e a e eees aaee R:caA^"Agvo===W=R^eRaRR� a==ee==^= =s '„�atla keep _ RRaRa i ee e e e e e e e==r ea e i R�$@&RRR&@&$$�RRRRRRRRR RRRRRRR�RRRRRR §; 8 g a 2 a !!| ) ! \ ! | � � All ] Q � ; )§ { �) ; R| � | ws■§ A (AA;1A k ] Q � SCHEDULE 4.3 Absence ofC B'eC Amoments,C •• is CONFLICTING AGREEMENTS: 1. The Pledge Agreement relating to the Credit Agreement prohibits FHGI from transferring the Purchased Interests in the Falcon Companies held by it unless the Buyer agrees to pledge such interests on the same basis as currently Pledged. 2. Consummation of die Sale of the Purchased Interests and the Contributed Interest will result in an Event of Default under the Fnstar Credit Agteemetd. CONSENTS: I. Conant of Bank of America National Trutt and Savings Association ("BoW) under that certain Pledge Agreement, dated as of September 30, 1997, by and betwcen Falcon Holding Group, L.P. and Bo[A is required for FHGLP to transfer its 20Y membership interest in Enstar Finance Company, LLC. 2. Consent of BofA under that certain Pledge Agro mmt, dared . of September 30, 1997, by and between Falcon Cablevision (assumed by FHGLP per October S. 1998 amendment) and Hof A is required for FHGLP to transfer its interest in Enstar. 3. Adlink members must consent to DHN's transfer of its interest in Adliok. SCHEDULE 43 — Page 1 ! \ / \ �2%�, »~t / / \OUOQQ $§ !! v ��,# , ■!§ ! ! ! ! §§ �] § Q!!! „( q qR ad IN , \ \ )|!|■ / _ ! &! | /| |) i!gA1919 ES6 v $2!}§ !! - SCHEDULE4.5 Claims and Litigation None. l+1 J SCHEDULE 4.5—Pagel SCHEDULE 4.6 Cerwn FSSS None. SCHEDULE 4.6—Pagel SCHEDULE 5.4 Claim emd Lddgation None. W SCHEDULE 5.4 —Page I `� SCHEDULE 5.6 Tarte•Ov enhjpChi See attached. SCHEDULE 5.6 —Page 1 "CY1 Eet w r SCHEDULE 5.9 Ch_rter Fitt Bial Slalemgm None SCHEDULE 5.9 —Page l 1, The liquidation of Easter (ncome/Chowlh Program Six -B, L.P.("Eatlar Six-B")which includes (i) the sale ofall Eostar Six -B's cable television systems for SIB,473;200 in cash to Falcon Cablevision and Falcon Telecable each of which ism affiliate of Ensmr Communications, (ii) the amendment of Enstar Six -B's partnership agreement to pemdt: (a) the purchase ofEnsmr Six -B's cable television systems by affiliates of Erstar Communications and (b) the completion of a liquidation plan by Erumr Communications on behalf of Ensar Six -B, and (iii) one or more liquidating distributions to the partners and, acr provision for the payment of all Emmr Six -B's obligadoru, the dissoludon, termim6en and liquidation of Enstar Six -B. 2. The Pumhase of all the assets used in the operation of cable television systems located in the cities of Myrtle Creek, Winston, Riddle and Canyonville and in certain unincorporated amens of Douglas County, all in the state of Omgon pursuant wan Asset Purchase Agreement effective m of September 9, 1998, by and between Jones Cable Income Fund I-B/C Venue, Jonas hdciuwic, Inc. and Falcon Community Ventures i Limited Partnership and resigned to and assumed by Falcon Cablevision. 3. Make the payments referred min Section 6.9 of the Agreement. J I r SCHEDULE 6.1— Page 1 SCHEDULE 6.9 -PAGE 1 5CHEDULE6.9 Emolovee Matters I. Marc B. Nathanson 26. Douglas P. Richter 2. Frank J. Indso 27. Paul Graves 3. Stanley Itskowitch 28. Came D. Pierce 4. Michael K. Mcnemy 29. Perry Daniel S. Joe A. Johnson 30. LillianTamer 6. Thomas J. Hatchell 31. Emerson G. Yearwood 7. Robert W. Harris 32. Gloria J.Norris S. Howard J. Gen 33. Les A. Cooke 9. Raymond J. Tyndall 34. Gregory A. Boucher 10. Lyme A. Burning 35. David P. Jones 11. Ovando J. Cowles 36. Gerald A. Brown 12. Joan Scully 37. Teresa S. Hopper 13. Michael D. Singpiel 38. Julie K. Can 14. Michael E. Kc nph 39. Arthur W. Maulsby 15. Robw Srid% 40. Jabber A. Siddiq I6. Ron Hall 41. Gilberto N. Goma 17. William Booher 42. Michael D. Korytowski 18. Ronald S. Hmn 43. Senait Ylhna 19. Daniel H. Delaney 44. Lauri A. McGsrrigan 20. Abel C. Crespo 45. Jeremy Bernard 21. Martin B. Schwann 46. Dan T. Do 22. Cheuk K. Ng 47. Donald P. Magin 23. Joseph S. Toth 48. Pete Y. Chong 24, Jacqueline L. Smith 49. Stephen Frantela 25. Richard D. Olson 50. Kathleen O'Connor SCHEDULE 6.9 -PAGE 1 SCHEDULE 6.18 TO Arrsnaemenu 1. Programming Supply Agreement, dated December 30, 1997, between Satellite Services, Inc. and Falcon, and the Levier Agreement, dated December 30, 1997 between TCl- Communications, Inc., Falcon and FHGLP, as amended, will be terminated, and no obligations arising thereunder will survive the termination, except that Buyer has agreed to the matters set forth herein. 2. After the Closing Buyer shall cause the Falcon Companies to continue to carry on the TCI Systems, during the period for which the Falcon Companies were contractually bound, the programming services offered by Encore Media Croup LLC to the extent such programming services were carried on the TO Systems on September 30, 1998 and shall pay Encore Media Group LLC on the last day of each calendar month a fixed monthly fee as previously provided in Buyer. 3. After the Closing Buyer shall cause the TCI Systems to be included under existing agreements between Buyer (or its AffiliaLn) end die providers of the fcllmsing programming services (to the extent that such programming service-, were carried on the TO Systems on September 30,1998): American Movie Classics. Bravo, Romance Classics. 4. Buyer agrees that after the Closing the TO Systems shall become subject in an At Home Corporation distribution agreement containing term and conditions that are no less favorable to Buyer than the terms and conditions of Buyes (or it affiliates) existing @Home Network Distribution Agreement covering its Fon Worth, Texas cable system, except that At Home Corporation shall remain the exclusive Internet service provider for the TCI SYtems for a period ending no earlier than June 4, 2002. Schedule 6.18 — Page I Ltl .- EXHIBIT A [To be entered into and delivered in accordance with Sections 8.2(g) and 8.3(e) of the Purchase Agreement, if applicable.] FORM OF ADJUSTMENT ESCROW AGREEMENT This ADJUSTMENT ESCROW AGREEMENT (this "Agreement")is dated , 1999, by and =ong CHARTER COMMUNICATIONS, INC., a Delaware corporation ('Buyer"), FALCON HOLDING GROUP, L.P., a Delaware limited partnership ("FHGLP'), and [Escrow Agent] ("Escrow, Agent"). RECITALS: Buyer and FHGLP arc parties to a Purchase Agreement dated as of , 1999 ([he 'Purchase Agreement"), pursuant to which the Sellers thereunder have agreed to sell, transfer and deliver to Buyer all of the partnership interests in Falcon Communications, L.P. held by FHOLP and TCI Falcon Holdings, LLC and certain other specified interem held by the Sellers thereunder, for the consideration set foM in the Purchase Agreement. Pursuant to Section 2.5(a)(2) of the Purchase Agreement, Buyer and Sellers have agreed that linsert Adiustirim EJcrow Amount3 Dallars(S_(the'Adjusmlen[ Deposit') shall be deposited in escrow with the Escrow Agent as set forth in this Agreement in order to provide a fund_ which shall be a source for any payment to be made by Sellers to Buyer pursuant to Section 2.6(6)(1)(8) of the Purchase Agreement subject to the terms and conditions set forth in the Purchase Agreement Capitalized teens used, but not defined herein, have the meanings ascribed to such terms in the Purchase Agreement. In consideration of the above recitals and of the covenants and agreements contained herein, Buyer, FHGLP and Escrow Agent agree as follows: AGREEMENTS: SECTION l: 1.1 P-divety. Buyer hereby delivers to the Escrow Agent, by accounts or wire transfer of immediately available funds to the account designated by the Escrow Agent, the Adjustment Deposit. The Adjustment Fund (as defined herein) shall be held by the Escrow Agent pursuant to the terms of this Agreement. The Adjustment Deposit, and all income. interest and other earnings thereon, shall be referred to collectively herein as the "Adjustment MIMM494 11 -2. Fund,- The Adjustment Fund shall be a source for any payment to be made by Sellers m Buyer pursuant to Section 2.6(6)(1 HB) of the Purchase Agreement, in each case, subject to the terms, conditions and limitations set forth in the Purchase Agreement. 1.2 Reetint. The Escrow Agent hereby acknowledges receipt ofthe Adjustment Deposit. The Escrow Agent shall deposit, upon receipt. the Adjustment Deposit into a separate interest bearing account established for such purpose. the sole signatory of which shall be the Escrow Agent, The Escrow Agent agrees to hold and disburse the Adjustment Fund in accordance with the terns and conditions of this Agreement and for the uses and purposes stated herein. 1.3 Investment and Income. Upon receipt of the Adjustment Deposit, the Escrow Agent shall, pending the disbursement thereof pursuant to this Agreement, invest the Adjustment Fund in accordance with FHGLP's instructions in (a) direct obligations of. or obligations fully guaranteed by, the United States of America or any agency thereof, (b) certificates of deposit issued by commercial banks having a combined capital, surplus and =divided profits of not less than Five Hundred Million Dollars (S500,000,000). (c) repurchase agreements collateralized by securities issued by the United States of America or any agency thereof, or by any private corporation the obligations ofwhich are guaranteed by the full faith and credit of the United States of America, (d) prime bankers acceptances. (e) money market funds investing in any of the above, or (0 other investments of equal or greater security and liquidity. The Escrow Agent shall dispose of or distribute the Adjustment Fund only in accordance with this Section 2. The procedure set forth in this Section 2 shall govem the application of the Adjustment Fund to satisfy, any payment by Sellers to be made pursuant to Section 2.6(bX I$B) of the Purchase Agreement, in each case, asset forth therein. Notwithstanding the foregoing, the basis for claims for such payment, and any limitations thereon, shall be governed by the Purchase Agreement, which shall be controlling between Buyer and FHGLP for all purposes of this Agreement and shall be applicable between Buyer and FHGLP to the extent inconsistent with env provision of this Agreement 2.1 Claims Procedure. The following procedure shall govem the application of the Adjustment Fund to satisfy any payment by Sellers to be made pursuant to Section 2.6(b)(I)(B) of the Purchase Agreement. �- (a) Each of Buyer and FHGLP shall promptly, but in no event later than three (3) business days, following a determination pursuant to Section 2.6(b)(1)(B) of the Purchase -� Agreement that the amount of the Closing Payment exceeds the amount of the Aggregate Consideration as finally determined pursuant to Section 2.6(a) of the Purchase Agreement, deliver to the Escrow Agent a notice setting forth (i) the aggregate amount from the Adjustment ocamsms<g W W 5111! Fund to be paid by Sellers to Buyer pursuant to Section 2.6(b)(1)(B) of the Purchase Agreement and (ii) ajoint instruction in writing of Buyer and FHGLP to make the payment specified in clause (I) above to Buyer from the Adjustment Fund. Upon receipt of such joint instruction. Escrow Agent shall promptly make such payment to Buyer. (b) The Escrow Agent shall not pay any amount of the Adjustment Fund to FHGLP or Buyer, except (i) in accordance with Section 2.1(a) and Sections 2.2.2.5, 2.6 and 6.8 hereof, (ii) pursuant tojoint instruction in writing from Buyer and FHGLP. or (iii) pursuant to a Court Order (as hereinafter defined). 2.2 Release of Adiustment Fund. On the date on which the Escrow Agent makes the payment to Buyer pursuant To Section 2.1(a) hereof (the Tayment Date"). the Escrow Agent shall pay to FHGLP by way of certified or bank check the balance then remaining of the Adjustment Fund in accordance with Buyers and FHGLP'sjoint inttuction. To the extent that no payment is owing by Sellers pursuant to Section 2.6%1 HB) of the Purchase .Agreement and paid pursuant to Section 2.1(a) hereof, Buyer and FHGLP shall promptly. but in no evert later than three (3) business days after the date the amount of Aggregate Consideration is finally determined pursuant to Section 2.6(a) of the Purchase Agreement, deliver to the Escrow Agent a joint instruction in writing of Buyer and FHGLP to pay the Adjustment Fund to FHGLP. Upon receipt ofsuchjoint instruction, the Escrow Agent shall promptly make such pa)ment to FHGLP by cenified or bank check (or as FHGLP shall have otherwise instructed the Escrow Agent) in accordancewith such joint insmtetions. Prior to the times specifically provided in this Section and Section 6.8, FHGLP shall have no rights to receive, pledge, borrow or otherwise obtain the benefits of the money or other property constituting the Adjustment Fund. 2.3 Dispute. In the event of any dispute among any ofthe parties to this Agreement. the Escrow Agent shall not comply with any claims or demands a9 long as such disagreements may continue, and in so refusing, the Escrow Agent shall make no delivery or other disposition of any property Nen held by it under this Agreement which is the subject of such dispute until it has received a final judgement or final court order from a court of competent jurisdiction directing disposition ofsuch property (a "Court Order"). A judgment or order under any provision of this Agreement shall not be deemed to be final until the time within which an appeal maybe taken therefrom has expired and no appeal has been taken, or until the entry of a judgment or order from which no appeal may be taken. 2.4 MmInstructions. In the event that the Escrow Agent receivesjoint instructions in writing from Buyer and FHGLP, such instructions may only be revoked pursuant to further joint instructions in writing of Buyer and FHGLP or a Court Order. 2.5 Other Disbursements ofthe Ad'ustment Fund. Notwithstanding the provisions of Sections 2.1 through 2.3 above and Section 2.6 below, the Escrow Agent shall disburse the Adjustment Fund, or a portion thereof, in accordance with the following: UCa1=WI 1/ -4- (a) upon receipt of written instructions, signed by Buyer and FHGLP in accordance with such instructions; or (b) in accordance with Section 6.9 of this Agreement. 2.6 TAM. Buyer shall be deemed to be the owner ofthe Adjustment Fond for tax purposes. Buyer shall provide the Escrow Agent with a correct taxpayer identification number on a substitute Form W-9 within 90 days following the date hereof and indicate thereon that It is not subject to backup withholding on income earned on any amounts received hereunder. To the extent that the Escrow Agent becomes liable for the payment of taxes on behalf ofmoth" parry hereunder, including withholding Wes, in respect of interest. income and other earnings from the investment of the Adjustment Fund held hereunder or any payment made hereunder, the Escrow Agent may pay such nixes on behalfofsuch parry. The Escrow Agent may withhold from any payment of monies to the party on whose behalf the taxes were paid, such amount as the Escrow Agent reasonably estimates to be sufficient to provide for the payment of such tams not yet paid, and shall use, the starts withheld solely for that purpose. The Escrow Agent shall be indemnified and held harmless again any liability for taxes and for any penalties or interest in respect of saxes on such interest, income or other earnings in the manner provided in Section 3.3. The Escrow Agent shall, promptly following the end of each taxable period in which the Adjustment Fund remains in existence, make distributions to Buyer from the interest. income or other earnings of the Adjustment Fond in an amount equal to forty percent (40%) ofsuch interest, income or other earnings to they extent they constitute taxable income. 2.7 Pumose. None of the Adjustment Fund will be available for any purpose. other than as described in Section 2.6(b)of the Purchase Agreement, and the Adjustment Fund shall not be available to satisfy any obligwions of Sellers pursuant to Section 10 of the Purchase Agreement. SECTION 3: ESCROW AGENT 3.1 Anwimment and Duties. Buyer and FHGLP hereby appoint the Escrow Agent m serve hereunder and the Escrow Agent hereby accents such appointment and n- in _.form all duties which are expressly set forth in this Agreement. 3.2 Compensation. Compensation will be paid to the Escrow Agent one-half by Buyer and one-half by FHGLP as specified in Schedule A annexed hereto. 3.3 Indemnification, Buyer and FHGLP will, at their expense, indemnify the Escrow Agent, hold it harmless, at theirjoint and several expense, from any and all claims, regardless of nature, arising out of or because of this Agreement, and exonerate the Escrow Agent from any liability in connection with this Agreement, at theirjoint and several expense, except as such may wise because of the Escrow Agent's gross negligence or willful misconduct. Promptly after ocotaaMa 94e -5 - the receipt by the Escrow Agent of notice of my claim, the Escrow Agent shall, if claim in respect thereof is to be made against any of the other parties hereto, notify such other parties in writing. Notwithstanding the foregoing, but provided that such notice shall have been given, the failure by the Escrow Agent to give such notice promptly shell not relieve the parties from any liability which such panics may have to the Escrow Agent hereunder except to the extent the defense of such action is prejudiced thereby. Any payment to the Escrow Agent pursuant to this Section 3.3, as between Buyer, on the one hand, and FHGLP, on the other hand, shad be bome equally by Buyer, on the one hand, and FHGLP, on the other hand, an all such matters; provided, however, that any expense or loss incurred by the Escrow Agent w a result ofpanicipating in any proceeding brought by Buyer against FHGLP or by FHGLP against Buyer shall be paid by the party against whom judgment is tendered in such proceeding. Nothing in this Section 3.3 shall constitute a waiver of my claim which Buyer, on the one hand, or FHGLP, on the other hand, may have againn the other party for contribmica s arising from theirjoint obligation to indemnify and hold the Escrow Agent harmless hereunder. 3.4 Resimsi on. fhe Escrow Agent may resign at any time upon giving the panics hereto thirty (30) days' prior written notice to that effect. In such event, the successor shall be such person, firm or corporation as shall be mutually selected by Buyer and FHGLP. It is understood and agreed that such resignation shall not be effective until a successor agrees to act hereunder, provided, however, if no successor is appointed and acting hereunder within thirty (30) days after such notice is given, the Escrow Agent may pay and deliver the Adjustment Fund into a coup of competent jurisdiction. 4.1 Lyng. The Escrow Agent shall be liable only to accept, hold and deliver the Adjustment Fund in accordance with the provisions of this Agreement and amendments thereto; provided, however, that the Escrow Agent shall not incur any liability with respect to (a) any action taken or omined in good faith upon the advice of its counsel given with respect to any questions relating to its duties and responsibilities as Escrow Agent under this Agreement. so long as such action is consistent with the terns of this Agreement or (b) any action taken or omitted in reliance upon my instrument which he Furow Agent shall in good ficith believe to b-- genuine egenuine (including the execution, the identity or authority of my person executing such instrument, its validity and effectiveness, and the truth and accuracy of my information contained therein), to have been signed by a proper person or persons and to conform to the provisions of this Agreement. The Escrow Agent shall exercise the same degree of care toward the Adjustment Fund w it would exercise toward its own similar property. 4.2 Collateral Agreements. The Escrow Agent shall not be bound in any way by any contract or agreement between other parties hereto, whether or not it has knowledge of any such contract or agreement or of its terms or conditions. -6 - SECTION 5: TERMINATION This Agreement shall be terminated (i) upon disbursement or release of the entire or remaining Adjustment Fund by the Escrow Agent, (ii) by written mutual consent signed by all parties, or (iii) payment of the Adjustment Fund into a court ofcompetent jurisdiction in accordance with Section 3.4 hereof. This Agreement shall not be otherwise terminated. SECTION 6: OTHER PROVISIONS 6.1 Notices• All notices, demands and requests required or petmined to be given under the provisions of this Agreement shall be (a) in writing, (b) sent by telecopy (with receipt personally confirmed by telephone), delivered by personal delivery, or sent by commercial delivery smite or certified mail, return receipt requested, (c) deemed to have been given on the date telecopied with receipt confirmed, the date of personal delivery, or the date set forth in the records of the delivery service or on the return receipt. and (d) addressed as follows: If to FHGLP: Falcon Cable TV 10900 Wilshire Boulevard 15th Floor Los Angeles, CA 90024 Attention: Mare B. Nathanson, CEO and Stanley Itskowitch. Executive Vice President and General Counsel Telephone: (310)209-7313 Telecopier. (310)209-7239 with a copy (which shall not constitute notice) to: TCI Falcon Holdings, LLC 9197 South Peoria Street Englewood, Colorado 80112 Attention: Derek Chang Telephone: (720)875-5241 Telecopier: (720) 875-5396 with a copy (which shall not constitute notice) to: Dow, Lohnes & Albertson 1200 New Hampshire Avenue, N.W. Suite 800 Washington, D.C. 20036.6802 Attention: Leonard 1. Haunt. Esq. and sa ocainrasaa L -7. John T. Byrnes, Esq Telephone: (202) 776-2000 Telecopier: (202)776-2222 and Sherman & Howard 633 17th Street Suite 3000 Denver, Colorado 90202 Attention: Peggy Knight, Esq, Telephone: (303)299-8140 Telecopier. (303)299.0940 If to Buyer. Charter Communications, Inc. 12444 Poweracotm Drive. Suite 100 St. Louis, Missouri 63131 Attention: Jerald L. Kent. President & C.E.O. (with a copy to Curtis S. Shaw. General Counsel) Telephone: (314)965.0555 Telecopier. (314)965.8793 with a copy (which should not constitute notice) to: hill & Manella LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, California 90067-4276 Attention: Alvin G. Segel, Esq. Telephone: (310)277-1010 Telecopier: (310) 203-7199 Ifto Escrow Agent: Attention: Telephone: Telecopier. 6.2 Benefit and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided that (a) neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by FHGLP without the prior written consent of Buyer (which consent shall not be nC01n21M9i// unreasonably withheld or delayed), (b) neither this Agreement nor arty of the rights, interests or obligations hereunder may be assigned by Buyer without the prior written consent of FHGLP (which consent shall not be unreasonably withheld or delayed) and (c) neither this Agreement not any of the rights, interests or obligations hereunder may be assigned by the Escrow Agent without the prior written consent of Buyer and FHGLP (which consent shall not be unreasonably withheld or delayed), except as otherwise expressly provided herein. This Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. 6.3 Entire Agamcill, Amendment. T tis Agreement and the Purchase Agreement contain all the terms agreed upon by the parties with respect to the subject matter hereof. This Agreement may be amended or modified only by written agreement executed by Buyer and FHGLP and if the amendment in any way affects the compensation. duties and/or responsibilities of the Escrow Agent. by a duly authorized representative of the Escmw Agent. No waiver of any provision hereof or rights hereunder shall be binding upon a party unless evidenced by a writing si(prcd by such party. 6.4 Headlaas The headings ofthe sections and subsections of this Agreement arefor ease of reference only and do not evidence the intentions of the parties. 6.5 Govemine Law. THIS AGREE.'�ffNf SHALL BE GOVERNED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF). 6.6 Waiver ofJury Trial. EACH OF THE PARTIES HERETO HEREBY ' IRREVOCABLY WANES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT. TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION. PERFORMANCE OR ENFORCEMENT HEREOF. 6.7 Counremans. This Agreement may be signed upon env numberrofcounternarris with the same effect as if the signatures on all counterparts were upon the same instrument. 6.9 Famine. All interest, income and other earnings upon my ofthe Adjustment Deposit or the Adjustment Fund (after reduction for any amounts paid or withheld by the Escrow Agent or distributed to Buyer with respect to taxes pursuant to Section 2.6) shall be paid to the party or parties receiving the principal portion of such funds pro rata based on the amount of such funds received by such patty or patties. All income and earnings upon the Adjustment Deposit or the Adjustment Fund not distributed as of the and of any taxable period shall be deemed for tax repining purposes to have seemed for the account of Buyer. nCDIMM49,i/ IN WfINESS WHEREOF, this Agreement has been executed by each of Buyer. FHGLP, and Escrow Agent as of the date first written above. BUYEs: CHARTER COMMUNICATIONS, INC. By: Name: Title: EH91.F: FALCON HOLDING GROUP. L.P. By: Falcon Holding Gmup. Inc.. General Partner BY, Name: Title: ESCROW AGENT: [ESCROW AGEN7� By: Name: Title: nl01/ 9.1 xmrznw>sn EXHIBff B This Put Agreement ("Agreement") is made as of the _ day of _ by and between Paul G. Allen, an individual ("Allen"), and Falcon Holding Group, L.R. a Delaware corporation (the "Holder"). with reference to the following facts: A Charter Communications, Inc. ("Charter) is a party to that certain Purchase and Contribution Agreement (the "Purchase and Contribution Agreement'), dated May _, 1999, pursuant to which Charter and its affiliates have acquired all of the outstanding equity of Falcon Communications, L.P., and certain of its affiliated entities. Allen is the controlling stockholder of Charter and expects to derive benefit from the transactions contemplated by the Purchase and Contribution Agreement. B Under the Purchase and Contribution Agreement. the Holder has acquired units of limited liability company interests in ("Charter LLC'), which are exchangeable for shares of common stock of ("Publicce'). C. As an inducement for the Holder to enter into the Purchase and Contribution Agreement, Charter agreed that Allen would grant the Halder the Put Option provided for herein, and the execution and delivery of this Agreement by Allen was a condition to the Holder's performance of its obligations order the Purchase and Contribution Agreement. NOW, THEREFORE, in consideration of the respective covenants and agreements of the parties and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each party), the parties hereby agree m follows: I. Definitions. As used in this Agreement, the following terms have the following meanings: "Closing Price" means, with respect to a share of PublicCo common stock, (I) the last reported sales price, regular way, as reported on the principal national securities exchange on which shares of PublicCo common stock ere listed or admitted for trading or (ii) if shares of PublicCo common stock are not listed or adntitted for trading on any nslion=_t sem._"c"e exchange, the last reported sales price, regular way, as reported on the Nasdaq National Market or, if shares of PublicCo common stock are not listed on the Nasdaq National Market, the average of the highest bid and lowest asked prices as reported on the Nasdaq Stock Market. "Interests" means all limited liability company interests in Charter LLC issued to the Holder pursuant to the Purchase and Contribution Agreemmy all shares of common stock of PublicCo issued in exchange for such limited liability company interests in Charter LLC, and all other securities that connitme'Interests" in accordance with Section 5 of this Agreement. "IPO Price" means the price per share at which shares of common stock of PublieCo are sold to the price in PublicCo's initial public offering (without reduction for underwriters' fees, discounts, commissions, and other selling expenses). ocuamauuss� "Issuer" means the issuer of the Interests. "Minimum Amount" means the least of (i) Interests for which the Purchase Price under this Agreement is at least 550,000,000, (ii) Interests representing at least 50% of the equity represented by all Interests issued to the Holder pursuant to the Purchase and Contribution Agreement, or (iii) all Interests that are subject to the Holder a Put Option under this Agreement. 2. Put Option. Allen hereby grants to the Holder the right and option (the "Put Option'), exercisable from the date hereof through and including the date of termination of the Put Option under Section 7 by written notice delivered to Allen, to sell to Allen or his designee, from time to time, on one or more occasions, all or my portion of the Holder's Interests that represents at least the Minimum Amount. Upon the giving of such notice, Allen shall be obligated to buy or to cause his designee to buy and, subject to Section 5.4, the Holder shall be obligated to sell, the amount of the Holder's Interests specified in the Holder's notice pursuant to this Section 2, at the price and upon the terms and conditions specified in Section 3. 3.1 The pur_hase price to be paid upon any exercise of the Put Option (the "Purchase Price") shall be equal to S_ per unit of limited liability company interests in Charter LLC t represented by the Interests to be purchased and said (calculated in accordance with Section 5, if applicable), plus interest thereon at a rate of four and one-half percent (4.5%) per year, compounded aunually, for the period from the date of the closing under the Purchase and Contribution Agreement through the closing of the purchase and sale of the Interests hereunder (the "Closing'). 3.2 At each Closing, (a) Allen or his designee shall pay to the Holder the Purchase Price in immediately available funds by wire transfer or entified bank check; and (b) the Holder shall deliver to Allen or his designee one or more certificates evidencing the Interests to be purchased and sold at such Closing (if such Interests we certificated securities), together with duly executed assignments separate from certificate in forth and substance sufficient to effectuate the transfer of such Interests to Allen or his designee, together with a certificate of the Holder and its Permitted Transferee, if applicable, reaRuming the representations in Section 4; provided, however, that the Holder shall not be required to take any actions or deliver any documents to satlsfV env restrictions imposed by the 15rner nn the „mEL—r of!IA In(..rc-= 3.3 Each Closing shall be held at the offices of bell & Manella in Los Angeles, California, on the tenth business day after the Holder delivers the written notice described above, or at such other time and place as the Holder and Allen may agree. The Holder and Allen will cooperate so as to pemnt all documents required to be delivered at the Closing to be delivered by mail, delivery service or courier without requiring either party or his or its representatives to be physically present at the Closing. t The amount per unit will be inserted upon execution and will equal the Equity Value (as defined in the Purchase and Contribution Agreement) divided by the total number of units issued to Falcon Holding Group, L.P. at the closing under the Purchase and Contribution Agreement. ocueor.tuussa -2- .., 4. R,mesmtwions oflhe Holder. The Holder represents and wmrma to Allen and any of his designees or assignees that on the date hereof and at each Closing: (a) the Holder has full power and authority to execute and deliver this Agreement and consummate the transactions contemplated hereby; (b) this Agreement is the legal, valid and binding obligation of the Holder, enforceable against the Holder in accordance with its terms; (c) at each Closing, the Holder will own ail of the Interests required to be purchased and sold at such Closing, both of record and beneficially, free and clear of all liens, encumbrances or adverse interests of any kind or nature whatsoever (including any restriction on the right to vote, sell or otherwise dispose of the Interests), other dun those arising under applicable law and those arising under the organizational documents of the Issuer, (d) upon the transfer of the Interests pursuant to Section 3, Allen or his designee will receive good title to the Interests, free and clear of all liens, encumbrances and adverse interests anted by the Holder, other than those arising under applicable law or those arising under the organvational doeumems of the Issuer. 5.1 Upon the exchange of Internet consisting of units of limited liability company interests in Charter LLC for Interests consisting of sbares of common stock of PublicCo, the Purchase Price per share for such shares of common stock of PublicCo shall equal the aggregate Purchase Price for all Interests immediately prior to such exchange, as specified in Section 3.1, as it may have been adjusted pursuant to this Section 5, divided by the number of shares efcommon stock or PublicCo issued in exchange for such uniu, subject to further adjustment pursuant to this Section 5. 5.2 If the Interests are increased, decreased, changed into, or exchanged for a different number or kind of shares or securities of the Issuer through reorganization, recapitalization, reclassification. stock dividend, stock split or reverse stock split, or other similar transaction, an appropriate adjustment shall be made with respect to number and kind of shares or securities subject to the Put Option, without change in the total price applicable to the unexercised portion of the Put Option but with a corresponding adjustment in the price for unit of my security covered by the Put Option. Any shares or securities that become subject to the Put Option pursuant to this Section 5.2 shall constitute "Interests" for purposes of Nis Agreement. 5.3 Upon a reorganization, merger or consolidation of the Issuer with one or od'16-- i -oros q uiiii—(mof u¢ foregoing, a'Business Combination') pursuant to which the outstanding Interests we convened into or exchanged for my other security ("Replacement Securities), the Put Option shall cease to be exercisable with respect to the securities that previously constituted "Interests" and shall instead be automatically converted into an option to sell such number of shares or units of Replacement Securities issued in exchange for the Interests pursuant to such Business Combination at a price per share or unit of Replacement Securities equal to the aggregate Purchase Price for all interests immediately prior to such effectiveness divided by the number ofshares or units of Replacement Securities subject to the Put Option immediately following such effectiveness. Any Replacement Securities that become subject to the Put Option pursuant to this Section 5.3 shall constitute "Interests" for purposes of this Agreement. KLMON02584 -3- 5.4 In the event of any proposed Business Combination pursuant to which the outstanding Interests will be converted into a light to receive consideration other then securities of the Issuer or Replacement Securities, (i) Allen will provide notice thereof to the Holder at least ten (10) days prior to consummation of such Business Combination and (ii) the Put Option will expire two days prior to such consummation except with respect to any Interests that are specified in a notice delivered by the Holder pursuant to Section 2 prior to such date. If the Holder delivers a notice pureuml to Section 2 after its receipt of a notice from Allen pursuant to this Section 5.4, the purchase and sale of any of the Interests specified in the Holder's notice may be conditioned at the Holder's option on the consummation of the Business Combination described in Allen's notice pursuant to this Section 5.4. 6. Reamsenufons of Allen. Allen represents and coma is to the Holder and each Permitted Transferee that on the date hereof and at all times it"caft" through the Closing: (a) Allen has full power and authority to execute and deliver this Agreement and consummate the transactions contemplated hereby; and (b) this Agreement comtimtes the legal, valid and binding obligation of Allen, enforceable against Allen in accordance with its terms. 7.1 The Put Option shall terminate on the earliest of the following dates, except with respect to any Interests that are specified in a notice delivered by the Halder pursmnl to Section 2 prior to such earliest date: (a) the second anniversary of the date of the closing under the Purchase and Contribution Agreement; (b) the date specified in Section 5.4; and (e) the first date on which both of the following conditions are satisfied: (i) the Closing Price ofPublicCo common stock has exceeded 115% of the IPO Price for my 90 trading days during the preceding 100 consecutive trading days (which period of 100 trading days shall not have commenced prior to the closing under the Purchase and Contribution Agreement)- end (it) all shares ofPublicCo common stock then held by the Halder and subject to the Put Option (or all shares ofPublicCo common stock that the Holder may then acquire in exchange for limited liability company interests in Charter LLC that us held by the Holder and subject to the Put Option) may be sold to the public in their entirety on such date (x) without registration under the Securities Act of 1933, as amended (the "Act"), pursuant to Rule 144 under the Act or another comparable provision or (y) pursuant to a then effective registration statement under the Act. 7.2 The Put Option shall terminate as to any Interests on the date on which such Interests are first transferred by the Holder to a person or entity that is not a "Pernined Transferee." ocue01:113245ea -4- 7.3 For purposes of determining whether the condition in Section 7.1(c)(i) is satisfied, appropriate adjustments will be made to take into account any subdivision (by stock split or otherwise) or combination (by reverse stock split or otherwise) of outstanding shares of PublicCo common stock occurring after the comummation ofPublicCo's initial public offering. 8. Miscella eau 8.1 CQM2191C Aneemcra Mod 'fi I' s. This Agreement conalim es the paries' entire agreement with respect to the subject matter hereof and supersedes all other agreements, representations, warranties, statements, promises and understandings, whether oral or written, with respect to the subject matter hereof This Agreement may not be amended, altered or modified except by a writing signed by both parties. 8.2 Addidonal Document. Each party hereto agrees to execute any and all further documents and writings and to perform such other actions which may be or become necessary or expedient to effectuate and carry out this Agreement. 8.3 Notiees. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be sufficiently given if delivered in person or transmitted by telecopy or similar means ofrewrded electronic wmmunieation to the relevant party, addressed as follows (or at such other address as either parry shall have designated by notice as herein provided to the other parry): if to the Holder. Falcon Holding Group, L.P. 10900 Wilshire Blvd., 1511, Floor Los Angeles, California 90024 Attention: Marc B. Nathanson Telecopy:(310) 208-3655 with a copy to: Dow, Loh -es & Albertson 1200 New Hampshire Avenue, N. W, Suite 800 Washington, D.C. 20036.6802 Attention: Leonard J. Baxt Telecopy:(202) 776-2222 If to Allen: Paul G. Allen C/O William D. Savoy B Vulcalr Northwest 110 110th Avenue Northwest Bellevue, Washington 98004 Telecopy:(425) 453-1985 MLINI:113245M with a copy to: h'eil & Mmella LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, California 900674276 Attention: Alvin G. Segel Telecopy:(310) 203-7199 Any such notice or other communication shall be deemed to have been given and received on the day on which it is delivered or telecopied (or, if such day is not a business day or if the notice or other communication is not lelecopied during business hours, at the place of receipt, on the next following business day); provided, however, that my such notice or other communication shall be deemed to have been given and received on the day on which it is sent if delivery thereof is refused or if delivery thereof in the manner described above is not possible because of the intended recipient's failure to advise the sending party of a change in the intended recipient's address or telecopy number. 8.4 No Third -Parry Bmelim None of the provisions of this Agreement shall be for the benefit of, or enforceable by, any person or entity that is nor a party to this Agreementr, other than any Permitted Tranafarees of the Holder. 8.3 Waivers tricty Construed. With regard to any power, remedy or right provided herein or otherwise available to any party hereunder (a) no waiver or extension of time shall be effective unless expressly contained in a writing signed by the waiving party; and (b) no altercation, modification or impairment shall be implied by reason of any previous waiver, extension of time, delay or omission in exercise or other indulgence. 8.6 Sevembility. The validity. legality or enforceability ofthe remainder of this Agreement shall not be affected even if one or more of the provisions of Itis Agreement shall be held to be invalid, illegal or unenforceable in any respect. 8.7 Undertakings. All authority herein conferred or agreed to be conferred upon a party to this Agreement aid all agreements of a party contained herein shall survive the death or incapacity of such party (or any of them). 8.8 Successors and Assign. Except as provided herein to the contrary, this Agreement shall be binding upon and shall inure to the benefit of the patties, thew respective heirs, estates, personal representatives, conservators, successors and permitted assigns. 8.9 Assignments. (a) The Holder may transfer some or all of its Interests to any person or entity that is a partner of the Holder at the time of the transfer (each such person or entity, a "Permitted Transferee"), and the Holder may assign its rights under this Agreement with respect to the transferred Interests, without the consent of Allen, to such Permitted Transferee. u (b) Upon the transfer of Interests to any Permitted Transferee and the assignment to such Permitted Transferee of the Holder's rights under this Agreement with v DCIa9a1:I18A584 -6- a1 respect to the transferred Interests, Allen and the Permitted Transferee will enter into a Put Agreement in the form of Attachment A-1 or Attachment A-2 to this Agreement, and Allen and the Permitted Transferee will thereupon have the rights and be subject to the obligations set forth in such Put Agreement. (c) Allen is entitled, in his sole discretion, to sssign his rights to purchase any Interests under this Agreement to one or more entities controlled by Allen, but no such assignment will relieve Allen of any of his obligations under this Agreement. 8.10 Govern nv La . This Agreement shall be governed by the laws ofthe Sate of Delaware, without regard to any choice of law provisions of that state or the laws of any other jurisdiction. 8.11 Headings. The Section headings in this Agreement are inserted only as a matter ofconvenience and in no way define, limit, extend or interpret the scope of this Agreement or of any particular Section. 8.12 Number and Gender. Throughout his Agreement, as the context may require, (a) the masculine gender includes the feminine and neuter; and the neuter gender includes the masculine and feminine; and (b) the singular tense and number includes the plural, and the plural tense and number includes the singular. 8.13 Gountemarts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.14 CRM. Except as otherwise provided in this Agreemen4 each party will bear his or its own costs in connection with the exercise of the Holder's right under this Agreement and the purchase and sale of any Interests pursuant to this Agreement. 8.15 Default. In the event of any legal action between the paries arising out of or in relation to this Agreement, the prevailing parry in such legal action shall be entitled to recover, in addition to any other legal remedies, all of his or its costs and expenses, including reasonable attorney's fees, from the non -prevailing party, regardless ofwhether such legal action is prosecuted to comoletion. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date JIM set forth above. Paul G. Allen, by William D. Savoy, attomey-in-fact ocue01;113245se -7- HOLDER Falcon Holding Group, L.P. By: Falcon Holding Group, Inc., its general partner Title: aCL®ei:11J]GSed -B- ATTACHMENT A -Ir PUT AGREEMENT This Put Agreement ("Agreement") is made as of the _ day of_, by and between Paul G. Allen, an individual ("Allen"), and (the "Holder), with reference to the following facts: A Charter Communications, Inc. ("Charter) is a parry to that certain Purchase and Contribution Agreement (the "Purchase and Contribution Agreement ), dated May _, 1999, pursuant to which Charter and its affiliates have acquired all of the outstanding equity of Falcon Communications, L.P., and certain of its affiliated entities. Alin is the controlling stockholder of Charter and expects to derive benefit from the transactions contemplated by the Purchase and Contribution Agreement. H Under the Purchase and Contribution Agreement, Falcon Holding Group, L.P. acquired units of limited liability company interests in ("Charter LLC'), which are exchangeable for shares of common stock of ('PublicCo'). C. [Falcon Holding Group, L.P. has distributed of such units to the Holder.] [Falcon Holding Group, L.P. has exchanged of such units for shares of common stock of PublicCo and has distributed such shares to the Holder.] D. As an inducement for Falcon Holding Group, L.P. to enter into the Purchase and Contribution Agreement, Charter agreed that Allen would grant the Holder the Put Option provided for herein. NOW, THEREFORE, in consideration of the respective covenants and agreements of the parties and for other good and valuable consideration (the receipt and sufficiency of which arc hereby acknowledged by each party), the parties hereby agree w follows: 1. Definitions. As used in this Agreement, the following terms have the following meanings: "Closing Price"means, with respect to a share of PublicCo common nock. (i) the last reported sales price, regular way, as reported on the principal national securities exchange on which shares of PublicCo common stock are listed or admitted for trading or (ii) if shares of PublicCo common stock are not listed or admitted for trading on any national securities exchange, the last reported sales price, regular way, as reported on the Nasdaq National Market or, if shares of PublicCo common stock are not listed on the Nasdaq National Market, the average of the highest bid and lowest asked prices as reported on the Nasdaq Stock Market. Interests" means all limited liability company interests in Charter LLC or shares of common stock of PublicCo distributed to the Holder by Falcon Holding Group, L.P., if limited t To be entered into individually by each partner of Falcon Holding Group, L.P. that is not named in the first paragraph of Attachment A-2. DCueoutumsa.s liability company interests in Charter LLC were distributed to the Holder by Falcon Holding Croup, L.P., all shares of common stock of PublicCo issued in exchange for such limited liability company interests in Charter LLC, and all other securities that constitute "Interests" in accordance with Section 5 of this Agreement.2 "IPO Price' means the price per share at which shares of common stock of PublicCo are sold to the price in PublicCo's initial public offering (without reduction for underwriters' fees, discounts, commissions, and other selling expenses). "Issuer" means the issuer of the Interests. "Minimum Amount"mearm the least of (i) Interests for which the Purchase Price under this Agreement is at least $50,000,000, (ii) Interests representing at least S05/g of the equity represented by all Interests distributed to the Holder by Falcon Holding Group, L.P., or (iii) all Interests that are subject to the Holder's Put Option under this Agreement. 2. Put Option. Allen hereby grams to the Holder the right and option (the'Put Option"), exercisable from the dale hereof through and including the date of termination of the Put Option under Section 7 by written notice delivered to.411en, to sell and to permit any of the Holder's Permitted Transferees to sell to Allen or his designee, from time to time, on one or more occasions, all or any portion of the Interests held by the Holder and its Permitted Transferees that represents at lean the Minimum Amount. Upon the giving of such notice, Allen shall be obligated to buy or to came his designee to buy and, subject to Section 5.4, the Holder and the Permitted Transferees identified in the Holder's nonce pursuant this Section 2 shall be obligated to sell, the amount of the Interests held by the Holder and its Permitted Transferees that is specified in the Holder's notice pursuant to this Section 2, at the price and upon the terms and conditions specified in Section 3. 3. Pgrchasc Pricy losing. 3.1 The purchase price to be paid upon any exercise of the Put Option (the "Purchase Price") shall be equal to S_ per unit of limited liability company interests in Charter LLC' represented by the Imttests to be purchased and sold (calculated in accordance with Section 5, if applicable), plus interest thereon at a rate of four and one-halfpercent (4.5%) per Year, compounded annnally r. r rh. period from na the te ofthe doi.:g .W,dcr fic Ppscbw e and Contribution Agreement through the closing of the purchase and sale ofthe Interests hereunder (the "Closing"). 3.2 At each Closing, (a) Allen or his designee shall pay to the Halder (for itself and on behalf of its Permitted Transferees, if applicable) the Purchase Price in immediately s The Put Agreement with Stanley S. Itskowitch will also include as "Interests" any ... Interests distributed to him by the Holders under the Put Agreement in the form of Attachment A-2 and their Permitted Transferees. t a The amount per wit will be inserted upon execution and will equal the Equity Value (as tai defined in the purchase and Contribution Agreement) divided by the total number of units issued r to Falcon Holding Group, L.P. at the closing under the Purchase and Contribution Agreement. MUNi:1132au.5 -2- available funds by wire transfer or certified bank check; and (b) the Holder shall deliver or cause to be delivered to Allen or Ids designee one or more certificates evidencing the Interests to be purchased and sold at such Closing (if such Interests are certificated securities), together with duly executed assignments separate from certificate in form and substance reasonably to effectuate the transfer of such Interests to Allm or his designee, together with a certificate of the Holder and its Permitted Transferee, if applicable, reaffirming the representations in Section 4; provided, however, that neither the Holder nor any Permitted Transferee shall be required to take any actions or deliver any documents to satisfy, any restrictions imposed by the Issuer on the transfer of the Interests. 3.3 Each Closing shall be held at the offices of hell & Manella in Los Angeles, California, on the tenth business day alter the Holder delivers the written notice described above, or at such other time and place as the Holder and Allen may agree. The Holder and Allen will cooperate an as to permit all doctumms required to be delivered at the Closing to be delivered by mail, delivery smite or courier without requiring either party or his or its representatives to be physically present at the Closing. 4. Representations ofthe Holder. The Holder represents and warrants to Allen and any ofhis designees or assignees that on the date hereofand at each Closing: (a)the Holder has full power and authority to execute and deliver this Agreement and consummate the traosactions contemplated hereby; (b) this Agreement is the legal, valid and binding obligation ofthe Holder, enforceable against the Holder in accordance with its terms: (e) at each Closing, the Holder or one of its Permitted Transferees will own all of the Interests required to be purchased and sold at such Closing, both of record and beneficially, free and clear of all liens, encumbrances or adverse interests of any kind or nature whatsoever (including any restriction on the right to vote, sell or otherwise dispose of the Interests), other than those arising under applicable law and those arising under the organizational documents of the Issuer, (d) upon the transfer of the Interests pursuant to Section 3, All. or his designee will receive good title to the Interests, free and clear of all liens, encumbrances and adverse interests created by the Holder, any Permitted Transferee, or any of their respective predecessors -in -interest. other than those arising under applicable law or those arising under the organizational documents of the Issuer. 5. Adiustment for Exchange Reormnizations Stock Splits. etc. 5.1 Upon the exchange of Interests consisting of units of limited liability company interests in Charter LLC for Interests consisting of shares of common stock of PublicCo, the Purchase Price per share for such shares of common stock of PublicCo shall equal the aggregate Purchase Price for all Interests immediately prior to such exchange, m specified in Section 3. 1, as it may have been adjusted pursuant to this Section 5, divided by the number of shares of common stock ofPublicCo issued in exchange for such units, subject to further adjustment pursuant to this Section 5. 5.2 If the Interests are increased, decreased, changed into, or exchanged for a different number or kind of shares or securities of the Issuer through reorganization, recapitalization, reclassification, stock dividend, stock split or reverse stock split, or other similar transaction, an appropriate adjustment shall be made with respect to number and kind of shares or securities subject to the Put Option, without change in the total price applicable to the ocuno1:113u64.5 - 3 - unexercised portion of the Put Option but with a corresponding adjustment in the price for unit of any security covered by the Put OPtiom Any shares or securities that become subject to the Put Option pursuant to this Section 5.2 shall constimte'Mterests" for purposes of this Agreement. 5.3 Upon a reorgmdi tion, merger or consolidation of the Issuer with one or more other corporations or enfities (any of the foregoing a "Business Combination") pursuant to which the outstanding Interests are convened into or exchanged for my other security ("Replacement Securities"), the Put Option shall Beau to be exercisable with respect to the securities that previously conatimted "Interests' and shall instead be automatically convened into an option to sell such number of shares or units of Replacement Securities issued in exchange for the Interests pursuant to such Business Combination at a price per share or unit of Replacement Securities equal to the aggregate Purchase Price for all Interests immediately prior to such effectiveness divided by the number of shares or units of Replacement Securities subject to the Put Option immediately following such effectiveness. Any Replacement Securities that become subject to the Put Option pursuant to this Section 5.3 shall consfinde'7naennns" for purposes of this Agreement. 5.4 In the event of any proposed Business Combination pursuant to which the outstanding Interests will be convened into a right to receive consideration other than securities of the Issuer or Replacement Securities. (i) Allen will provide notice thereofto the Holder at iesst ten (10) days prior to consummation of such Business Combination and (ii) the Put Option will expire two days prior to such consummation except with respect to any Interests that arc specified in a notice delivered by the Holder pursuant to Section 2 prior to such date. If the Holder delivers a notice pursuant to Section 2 after its receipt of a notice from Allen pursuant to this Section 5.4, the purchase and sale of any of the bacteria specified in the Holder's notice may be conditioned at the Holdei s option on the consummation of the Business Combination described in Allen's notice pursuant to this Section 5.4. 6. Reuresentations of Allen. Allen represents and warrents to the Holder and each Permitted Transferee that on the date hereof and at all tines hereafter through the Closing: (a) Allen has full power and authority to execute and deliver this Agreement and consummate the transactions contemplated hereby; and (b) this Agreement constitutes the legal, valid and binding obligation of Allen, enforceable against Allen in accordance with its terms. 7. Termination of Put Option. 7.1 The Put Option shall terminate on the earliest of the following dates, except with respect to any Interests that are specified in a notice delivered by the Holder pursuant to Section 2 prior to such earliest date: (a) the second anniversary of the date of the closing under the Purchase and Contribution Agreement; (b) the date specified in Section 5.4; and J (c) the first date on which both of the following conditions are satisfied: nCG1611:1132164d -4- (i) the Closing Price of PublicCo common stock has exceeded 115% of the TO Price for any 90 trading days during the preceding 100 consecutive trading days (which period of 100 trading days shall not have commenced prior to the closing under the Purchase and Contribution Agreement); and (ii) all shares of PublicCo common stock then held by the Holder or any Permitted Transferee and subject to the Put Option (or all shares of PublicCo common stock dust the Holder and all Permitted Transferees may then acquire in exchange for limited liability company interests in Charter LLC that are held by the Holder and its Pertained Transferees and subject to the Put Option) may be sold to the public in their entirety on such date (x) without registration under the Securities Act of 1933, as amended (the "Act"), pursuant to Rule 144 under the Act or another comparable provision or (y) pursuant to a then effective registration statement under the Act. 7.2 The Put Option shall temfl : c as to any Interests on the date on which such interests are first transfered by the Holder or my Permitted Transferee to a person or entity that is not a "Permitted Transferee." 7.3 For purposes of determining whether the condition in Section 7.1(c)(i)is satisfied, appropriate adjustments will be made to take into account my subdivision (by stock split or otherwise) or combination (by merle stock split or otherwise) of outstanding shares of PublicCo common stock occurring after the consummation ofPublicCo's initial public offering. 8.1 Complete Agmement- Modifications. This Agreement constitutes the parries' entire agreement with respect to the subject matter hereof and supersedes all other agreements, representations, warranties, statements, promises and understandings, whether oral or written, with respect to the subject matter hereof This Agreement may not be amended, altered or modified except by a writing signed by both parties. 8.2 Additional Documents. Each parry hereto agrees to execute my and all further documents and writings and to perform such other actions which may be or become necessary or expedient to effectuate and carry out this Agreement. 8.3 Not cgE. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be sufficiently given if delivered in person or dr milled by telecopy or similar means of recorded electronic communication to the relevant party, addressed as follows (or at such other address as either party shall have designated by notice as herein provided to the other patty): If to the Holder: with a copy to: ocuamu 13Ns 5 _5_ If to Allen: Paul G. Allen do William D. Savoy B Vulcan Northwest 110 110th Avenue Northwest Bellevue, Washington 98004 Telecopy: (425) 453.1985 with a copy to: Irell & Maaella LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, California 90067-0276 Attention: Alvin G. Segel Telecup1':(310) 203.7199 Any such notice or other communication shall be deemed to have been given and received on the day no which it is delivered or nelecopied (or, if such day is not a business day or if the notice or other communication is not telecepied during business boors, at the place of receipt, on the next following business day); provided, however, that any such notice or other communication shall be deemed to have been given and received on the day on which it is sent if delivery thereof is refused or if delivery thereof in the manner described above is not possible because of the intended recipient's failure to advise the sending party ofa change in the intended recipient's address or telecopy number. 8.4 No Third -Party Benefits. Noneofthepmvisiomofthis Agreementshall be for the benefit of, or enforceable by, any person or entity that is not a party to this Agreement, other than any Permitted Transforms of the Holder. 8.5 Waivers Strictly Construed. With regard to any power, remedy or right provided herein or otherwise available to any party hereunder (a) no waiver or extension of time shall be effective unless expressly contained in a writing signed by the waiving party; and (b) no alternation, modification or impairment shall be implied by reason of any previous waiver, extension of time, delay or omission in exercise or other indulgence. 8.6 Severability. The validity, legality or enforceability of the remainder of this Agreement shall not be affected even if one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable in any respect. 8.7 Undertakings. All authority herein conferred or agreed to be conferred upon a party to this Agreement and all agreements of a party contained herein shall survive the death or incapacity of such party (or any of them). 8.8 Successors and Assigns. Except as provided herein to the contrary, this Agreement shall be binding upon and shall inure to the benefit of the parties, their respective t. heirs, estates, personal representatives, conservators, successors and permitted assigns. ocueout324M.5 6 8.9 Ass (a) The Holder and any Permitted Transferee may transfer some or all of its Interests to any of the following persons or entities (each such person or entity, a 'Permitted Transferee'), and the Permitted Transferee shall thereupon have the rights provided in this Agreement; (i) any person or entity that has entered into a Put Agreement substantially similar to this Agreement upon the distribution to such person or entity by Falcon Holding Group, L.P. of Interests; (ii) any person or entity than, directly or indirectly, through the ownership of voting securities, controls, is controlled by, or is commonly controlled with the Holder, (iii) any investment fund formed by an affiliate of the Halder that is commonly controlled with the Holder, (iv) a most for the benefit of the equity owners of the Holder and of which the misme or trustees are one or more persons or entities that either control, or arc commonly controlled with, the Holder or are banks, trust companies, or similar entities; (v) any person or entity for which the Holder is acting as nominee or any trust controlled by or under common control with such person or entity; (vi) if the Holder is an individual, any charitable foundation, charitable trust, or similar entity, the estate, heirs, or legatees of the Holder upon the Holder's death, my member of the Holder's family, any tout or similar entity for the benefit of the Holder or one or more members of the Holder's family, or any entity controlled by the Holder or one or more members of the Holder's family. (b) The Holder may assign all its rights and delegate all its obligations under this Agreement to any Permitted Transferee, and such Permitted Transferee shall thereupon be deemed to be the "Holder' for purposes of this Agreement. (c) Allen is entitled, in his sole discretion, to assign his rights to purchase any Interests under this Agreement to one or more entities controlled by Allen, but no such assignment will relieve Allen of any of his obligations under this Agreement. 8.10 Govemine Law. This Agreement shall be governed by the laws ofthe State of Delaware, without regard to any choice of law provisions of that slate or the laws of any otherjurisdiction. 8.11 Headings. The Section headings in this Agreement are inserted only as a matter ofconvenience and in no way define, limit, extend or interpret the scope of this Agreement or of any particular Section. CCLI6a1:11324.5 _ T 8.12 Number mud Gender. Throughout this Agreemenl, ss the context may require, (a) the masculine gender includes the feminine and neuter, and the neuter gender includes the masculine end feminine; and (b) the singular tense and number includes the plural, and the plural tense and number includes the singular. 8.13 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same imarumcm. 8.14 Costs. Except as otherwise provided in this Agreement, each party will bear his or its own costs in connection with the exercise of the Holder's right under this Agreement rand the purchase and sale of my Interests pursuant to this Agreement. 8.15 Default. In the event of any legal action between the parties arising out of or in relation to this Agreement, the prevailing party in such legal action shall be entitled to recover, in addition to any other legal remedies, all of his or its costs and expenses, including reasonable anomcy's fees, from the non -prevailing party, regardless of whether such legal action is prnsean.d to —'pinion_ IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first set forth above. Paul G. Allen, by William D. Savoy, anomey-in-fact HOLDER onaest:11324aa-5 -8. ATTACHMENT A -2t PUT AGREEMENT This Put Agreement ("Agrtm¢nt") is made as of the day of- by and between Paul G. Allen, an individual ("Allen"), and Falcon Holding Group, Inc., Falcon Cable Tnrs; Nathanson Family Trust, Blackhawk Holding Company, Inc., Advance Company, Ltd., Advance TV of California, Inc., Greg Nathanson, and Lillian Vladimisschi (each, a "Holder." and. collectively. the "Holders % with reference to the following facts: A Charter Communications, Inc. ("Charter') is a party to that certain Purchase and Contribution Agreement hh<'Purchase and Contribution Agreement'), dated May _, 1999, pursuant to which Charter and its affiliates have acquired all of the outstanding equity of Falcon Communicatioms,L.P., and certain of its affiliated entities. Allen is the controlling stockholder of Charier and expects to derive benfit from the+ransactions contemplated by the Purchase and Contribution Agreement. P tender the Pmcha: and Falcon Holding Croup, L.P. acquired units of limited liability company interests in ("Charter LLC'), which aro exchangeable for shares ofcommon stock of ("PublieCo•), and has distributed (or will distributes of such units in the Holden. C. As an inducement for Falcon Holding Croup, L.P. to enter into the Purchase and Contribution Agreement, Charter agreed that Also would grant the Holden the Put Option provided for herein. NOW, THEREFORE, in consideration of the respective covenants and agreements of the parties and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each parry), the parties hereby agree as follows: I. DefInitto As used in this Agreement, the following terms have the following meanings: "Closing Price' mcama, with respect to a share of PublicCo common stock. (i) the last reported sales price; mmdar wav, a•, n.n on the pm_ ipal cxcsge no. which share of PublieCo wmmoa stock ere fisted or admitted for trading or (ii) if shares of PublicCo common stock are not listed or admitted for trading on any national securities exchange, the last reported sales price, regular way, as reported on the Nasdaq National Market or, if shares of PublicCa common stock are not listed on the Nasdaq National Market, the average of the highest bid and lowest asked prices as reported on the Nasdaq Stock Market. "Interests" means all limited liability company interests in Charter LLC distributed to the Holders by Falcon Holding Group, L.P., all shares of common stock of PublicCo issued in 'To be entered into by the partners of Falcon Holding Group, L.P. that are named in the first paragraph. nCu M:1132nas ATTACHMNT A -2r This Put Agreement ("Agrc. cont") is made as of the day of _, by and between Paul G. Allen, an individual ("Alice), and Falcon Holding Group, Inc., Falcon Cable Trust, Nathanson Family Trust, Blackhawk Holding Company, Inc., Advance Company, Ltd., Advance TV of California, Inc., Greg Nathanson, and Lillian Vladitnitschi (each, a "Halder;' and, collectively, the "Holders'), with tefeence to the following facts: A Charter Communicetiom, Inc. ("Charter') is a patty to that certain Purchase and Contribution Agreement (the "Purchase and Contribution Agmem nt'), dated May _, 1999, pursuant to which Charter and its affiliates have acquired all of the outstanding equity of Falcon Communications, L.P., and certain of its affiliated entities. Alen is the controlling stockholder of Charter and crpmm to derive benefit from the Inumetions comemplaw by the Purchase and Contribution Agreement B Under the Purchase aha Conmbution .Agr emmt, Falcon Holding Group. LP. acquired units of lunited liability company interests in ("Chatter LLC), which are exchangeable for sham of comnon nock of ("PublicCo'), and has distributed (or will distribute) of such units to the Holders. C. As an inducement for Falcon Holding Group, LP. to enter into the Purchase and Contribution Agreement. Charter agreed that Allen would grant the Holders the Put Option provided for herein. NOW, THEREFORE, in consideration of the respective covenants and agreements of the parties and for other good and valuable consideration (the teceipt and sufficiency of which are hereby acknowledged by each patty), the patties hereby agree as follows: I. Definitions. As used in this Agreement. the following tenor have the following meanings: "Closing Price' mean, with respect to a sham of PublicCo common stock. (i) the last reported sales price, regdar wap v< rrpnnrd on the p! rtciny -_.aryl =--ri1G exchange an which sham of PublicCo common stock are listed or admitted for trading or (ii) if shares of PublicCo common stock are not listed or admitted for trading on any national securities exchange, the last reported sales price, regular way, as reported on the Nasdaq National Market or, if shares of PublicCo common stock are not listed on the Nasdaq National Market, the average of the highest bid and lowest asked prices as reported on the Nasdaq Stock Market. "Inleress" means all limited liability company interests in Chane LLC distributed to the Holders by Falcon Holding Group, L.P., all shares of common stock of PublicCo issued in n To be entered into by the partners of Falcon Holding Group, L.P. that are named in the first paragraph. ncusoeunaas exchange for such limited liability company interests in Charter LLC and all other securities then constitute "Interests" in accordance with Section 5 of this Agreement. "IPO Price" means the price per share at which shares of common stock of PublicCo arc sold to the price in PublicCo's initial public offering (without reduction for underwriters' fees, discounts, commissions, and other selling expenses). "Issuer" means the hunter of the Interests. "Minimum Amount" means the least of (i) Interests for which the Purchase Price order this Agreement is at least 550,000,000, (it) Interests representing at lean 50%of the equity represented by all Interests distributed to the Holders by Falcon Holding Group, L.P., or (di) all Interests that are subject to the HoldenPut Option under ttds Agreement. "Representative' mean Falcon Holding Group, Inc. or any other Holder designated from time to time by the Holders as the Representative. 2. Put Option. Allen hereby grants to the Holden the right and option (the "Put Option"). exercisable from the date herrof through and including the date of termination of the Put Option Irder Section 7 by written notice defiverd to Allen by the Representative, to sell and to permit any of each Holder's Permitted Transferees to sell to Allen or his designee, from time to time, on one or more occasions, all or any portion of the Imants held by the Holden and their respective Permitted Transferees that represents at least the Minimum Amount. Upon the giving of such notice, Allen shall be obligated to buy or to cause his design= to buy and, subject to Section 5A, the Holden and Permitted Transferees identified in the Reptesenutive's notice pursuant to this Section 2 shall be obligated to salt, the amount of the Inlesests held by the Holders and their reepective Permitted Tnmferees that is specified in the Repres r ative's notice pursuant to this Section 2, at the price and upon the taints and conditions specified in Section 3. 3.1 The purchase price to be paid upon any exercise of the Put Option (the "Purchase Price") shall be equal to S_ per unit of limited liability company interests in Charter LLC' represented by the Interests to be purchased and sold (calculated in accordance per year, compounded annually, for the period from the date of the closing under the Purchase and Contribution Agreement through the closing of the purchase and We of the Interests hereunder (the "Closing"). 3.2 At each Closing. (a) Allen or his design= shall pay to each selling Hold" (for itself and on behalf of its Permitted Transferees, if applicable) the Purchase Price in immediately available tands by wire transfer or certified bank chink; and (b) each selling Holder shall deliver or cause to be delivered to Allen or his designee one or more certificates evidencing ' The amount per unit will be inserted upon execution and will equal the Equity Value (as defined in the Purchase and Contribution Agreement) divided by the total number of units issued to Falcon Holding Group, L.P. at the closing under the Purchase and Contribution Agreement. aCLUMN132474.5 _ 2 the Imemsts to be purchased from such Holder or its Permitted Transferees at such Closing (if such Interests are certificated securities), together with duly executed assignments separate from certificate in forn and substance sufficient to effectuate the transfer of such Interests to Allen or his designee, together with a certificate of the selling Holder and its permitted Transferee, if applicable, reaffirming the representations in Section 4; provided, however. that no Holder or Permitted Transferee shall be required to take any actions or deliver my documents to satisfy any restrictions imposed by the Issuer on the transfer of the Interest. 3.3 Each Closing shall be held at the offices of hell & hfanella in Los Angeles, Cali forms, on the tenth business day after the Representative delivers the written notice described above, or at such other time and place as the Represemttve and Allen may agree. The selling Holders and Allen will cooperate to as to permit all documents required to be delivered at the Closing to be delivered by mail, delivery service or courier without requiring either parry or his or its representatives to be physically present at the Closing 4. &presmm ons of the Holders. Each Holdv represenu and warranu to Allen and any of his designees or assignees that on the date hereof and at each Closing- (a) such Holder has full power and authtinty lac execute and deliver this Agrmncnt end wmmuvatc Nc transactions contemplated hereby; (b) this Agreement is the legal. valid and binding obligation of such Holder, enforceable against such Holder in accordance with its terms; (c) at each Closing in which Interests held by such Holder or my of its Permitted Transferees ere to be purchased and sold, such Holder or one of its Permitted Transferees, as applicable, will owm all of the Interests required to be purchased from and sold by such Holder and its Permitted Transferees at such Closing, both of record and beneficially, free and clear of all liens, encumbrances or adverse interests of any kind or nature whatsoever (including any restriction on the right to vote, sell or otherwise dispose of the Interests), other than those arising under applicable law and those arising under the organizational documents of the Wow,, (d) upon the trartsfer of any Interests required to be purchased from and sold by such Holder and its Permitted Transferees at any Closing pursuant to Section 3. Allen or his designee will receive good title to the Interests. free and clear of all liens. encumbrances and adverse interests created by such Holder, any Permitted Transferee, or any of their respective predecessors -in -interest, other than those arising under applicable law or those arising under the organizational document of the Issuer. 5. Adiustmemr, for Fxchanve. Rmr vatinnc qt k Cnmw n', 5.1 Upon the exchange of Interests consisting of units of limited liability company interests in Charter LLC for Interests consisting of shares of common stock of PublieCo, the Purchase Price per share for such shares of common stock of PublicCo shall equal the aggregate Purchase Price for all Interests immediately prior to such exchange, as specified in Section 3. 1, as it may have been adjusted pursuant to this Section 5, divided by the number of shares of common stock of PublicCo issued in exchange for such units, subject to further adjustment pursuant to this Section S. 5.2 If the Interests are increased, decreased, changed into, or exchanged for a different number or kind of shares or securities of the Issuer through reorganization, recapitalization, reclassification, stock dividend, stock split or reverse stock split, or other similar transaction, an appropriate adjustment shall be made with respect to number and kind of shares nCuoolJ 0]474-5 - 3 - or securities subject to the Put Option, without change in the total price applicable to the unexercised portion of the Put Option but with a corresponding adjustment in the price for unit of any security covered by the Put Option. Any shares or securities that become subject to the Put Option pursuant to this Section 5.2 shall consUmte'Tnterests" for purposes of this Agreement. 5.3 Upon a reorganization, merger or consolidation of the Issuer with one or more other corporations or entities (any of the foregoing, a'Business CombinatiW) pursuant to which the outstanding Interests are convened into or exchanged for any other security ("Replacement Securities'), the Put Option shall Beau to be exercisable with respect to the securities that previously communed "interests" and shall instead be automatically convened into an option to sell such number of shares m units of Replacement Securities issued in exchange for the Interests pursuant o such Business Combination at a price per share or unit of Replacement Securities equal In the aggregate Purchase Price for all Interests immediately prior to such effectiveness divided by the number of shares or units of Replacement Securities subject to the Put Option immediately following such effectiveness. Any Replacement Securities that become subject to the Put Option pursuant to this Section 5.3 shall constitute "Interests" for purposes of this Agreement. 5.4 In the event of any proposed Business Combination pursuant to which the outstanding Intaests will be convened into a right to receive consideration other than securities ofthe Issuer or Replacement Securities, (i) Allen will provide notice thercofto the Representative at least ten (10) days prior o consummation of such Business Combination and (ii) the Put Option will expire two days prior to such commination except with respect to any Interests that are specified in a notice delivered by the Representative pursuant to Section 2 prior to each date. If the Representative delivers a notice pursuant to Section 2 after its receipt of a notice ham Allen pursuant to this Section 5.4, the purchase and sale of any of the Interests specified in the Representative's entice may be conditioned at the Holder's option on the consummation of the Business Combination described in Allen a notice pursuant (a this Section 5.4. 6. Rei resentai ons of Allen. Allen represents and warrants to each Holder and each Permitted Transience that on the date hereof and at all times hereafter through the Closing: (a) Allen has full power and authority to execute and deliver this Agreement and consummate the tmn.car.tinn" rnn1Pmp!med herby, and Ch) this Agreement cowUrutzs the legal, valid and binding obligation of Allen, enforceable against Allen in accordance with its terms. 7.1 The Pal Option shall terminate on the earliest of the following dates, except with respect to any Interests that are specified in a notice delivered by the Repres mialive pursuant to Section 2 prior to such earliest date: (a) the second anniversary of the date of the closing under the Purchase and Contribution Agreement; (b) the date specified in Section 5.4 and octm01 11e247s5 . q _ (c) the first date on which both of the following conditions are satisfied: (i) the Closing Price of PublicCo common stock has exceeded I15% of the IPO Price for any 90 trading days during the preceding 100 conucutive trading days (which period of 100 trading days shall not have commenced prior to the closing under the Purchase and Contribution Agreemrn); and (ii) all shares of PublicCo common stock Wen held by any Holder or any of their respective Prorated Transferees and subject to the Put Option (or all shares of PublicCo common stock that the Holders and their respective Pertained Transferees may then acquire in exchange for limited liability company interests in Charter LLC that are held by the Holders and their Permitted Transferee and subject to the Put Option) may be sold to the public in thew entirety on such date (x) without registration under the Securities Act of 1933, as amended (the 'Act-), pursuant to Rule I" under the Act or another comparable provision or (y) pursuant to a then effective registration statement under the Act. 7.2 The Put Option shall terminate as to env Interests on the date on which such Interests are first transferred by any Holder or any Permitted Transferee to a person or entity that is not a "Pemtined Transfaee." 7.3 For purposes of determining whether the condition in Section 7.1(c)(i) is satisfied, appropriate adjusmlents will be made to take into account any subdivision (by stock split or otherwise) or combination (by reverse sock split or otherwise) of outstanding shares of PublicCo common stock occurring after the consummation of PublicCo's initial public offaing. {;EME_dt IMIPi 8.1 Complete Am oncrit Slod'fcai ons. This Agreement consimtes the parties' entire agreement with respect W the subject matter hereof and supersedes all other agreements, reprearnUtions, wammies, statemems, promises and undernandings, whether oral or written, with respect to the subject maner hereof Thu Agreement may not be amended, altered or modified except by a writing signed by all the parties. ...2 Additional .^,—sarins. r", h puty :mdv agnsxa nu exam a my and att further documents and writings and to perform such other actions which may be or become necessary or expedient to effectuate and carry out this Agreement. 8.3 Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be sufficiently given ifdelivered in person or transmitted by telecopy or similar means of recorded electronic communication to the relevant party, addressed as follows (or at such other address as either party shall have designated by notice as herein provided to the other parry): If to any Halder: mCLMI:11)24)45 -5- with a copy to: If w Allen: Paul G. Allen Jo William D. Savoy @ Vulcan Northwest 110 110th Avenue Northwest Bellevue, Washington 98004 Telecopy: (425) 453-1985 with a Copy to: hell & Manana LLP 1800 Avenue of the Sinus. Suite 900 Los Angeles, California 90067-4276 Attention: Alvin G. Segel Telecopy:(310) 203.7199 Any such notice or other communication shall be deemed to have been given and received on the day on which it'll delivered or teleeopied (or, if such day is not a business day or if the notice or other communication Is MI teleenpled during bashes, ham. at the place of receipt, on the nag following business day): Provided. however, thin any such notice or other communication shall be deemed to have hem given and received on the day on which it is fent if delivery thereof is refused or if delivery thereof in the mauner described above is not possible because of the intended recipient's failure to advise the sending party of a change in the intended recipient's address or telecopy number. 9.4 No Third -Pam Benefits. None ofthe provisions ofthis Agreement shall be for the benefit of, or enforceable by, any person or army that is not a parry to this Agreement, other than any Permitted Trartsfereea of the Holders. 8.5 Waivers Strictly Construed. With regard to any power, remedy or right viA.A F..[?.^. C: CLEC^: G: c (I.SIC :J -_ F �mp:..j Luewu:u (v) nw waiver or exueasion of time shall be effective unless expressly contained in a writing signed by the waiving party; and (b) no altercation, modification or impairment shall be implied by reason of any previous waiver, extension oftime, delay or omission in exercise or other indulgence. 8.6 Severability. The validity, legality or enforceability ofthe remainder of this Agreement shall not be affected even if one or rdon s ofthe provisions of this Agreement shall be held to be invalid, illegal or unenforceable in any respect. 8.7 Undertaltines. All authority herein conferred or agreed to be conferred upon a party to this Agreement and all agreements of a party contained herein shall survive the death or incapacity of such party (or any of them). CCLIMI:114045 -6- J 8.8 c , c ssors nd «i a Except as provided herein to the contrary, this Agreement shall be binding upon and shall inure to the bm0fit of the parties, their respective hews, estates, personal representatives, conservators, successors and permitted assigns. 8.9 Ass (a) Any Holden and any Permitted Transferee may transfer some or all of its Interests to any of the following persons or entities (each such person or entity, a "Permitted Transferee'), and the Permitted Transferee shall thereupon have the rights provided in this Agreement: (i) subject to Section 8.9(d), any person or entity that has entered into a Put Agreement mbstmually similar to this Agreement upon the dismbudon to such person or muty by Falcon Holding Group. LP. of bneresu; (u) subject to Section 8.9(d), my person or entity that owns a equity interest in the Transience al the time of the transfer, (fill my pawn or entity that, directly or indirectly, through the ownership of voting securities, eomols, is eoomlld by, w is commonly wmmlld with my Holds; and ut (rv) my charitable foundation, charitable m. or similar rntity; (v) if the vansferor(whether a Holder or a Permitted Transferee) ism individual, the mate, heirs, or legatees of the transferor upon the transferor's death, my member of the umsfaoi s family, my mut or similar muty for the benefit ofthe, umsferor or one or more members of the transferor a family, or my entity conmolld by the transferor or one or more membra of the tranrferor's faintly. (b) Any Hold" may assign all i4 rights and delegate all its obligations under this Agreement to my Permitted Transferee, and such Permitted Transfaeo shall thermpon be dermd to be the "Holder' for purpos" of this Agrmnent. (c) Allen is "tided, in his wit discretion, to assign his rights to purchase my Interests under this Agreement to one or more entities controlled by Allen, but no such assignmmt will relieve Allen of my of his obligations =der this Agreement. (d) if my Holder or my Permitted Transferee trenafers my Interests to Stanley S. Itskowitch (or my successor to Simlcy, S. Itskowirch as the "Holder' pursuant to the Put Agreement entered into between Stanley S. Iukowilch and Allen), such Interests shall no longer be subject to subject to the Holders' Put Option unda this Agreement but shall be subject to the Put Option under the Put Agreement entered into between Stanley S. Itskowitch and Allen. 8.10 o min Law. This Agreement shall be governed by the laws of the State of Delaware, without regard to my choice of law Provisions of that state or the laws of any otherjurisdiction. PCUB01:1Uraus -7- 8.11 Headings. The Section headings in this Agreement are inserted only as a matter of convenience and in no way define, [unit, extend or interpret the scope of this Agreement or of arty particular Section. 8.12 Number and Gender. Throughout this Agrec ecru, as the context may require, (a) the masculine gender includes the feminine and neuter,and the neuter gender includes the masculine and feminine; and (b) the singular tense and number includes the plural, and the plural temse and number includes the singular. 8.13 Countemarts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.14 Cysts. Except as otherwise provided in this Agreement, each parry will bear his or its own costs in connection with the exercise of the Holder's right under Ibis Agreertlrnt and the purchase and sale of any Interests pursuant to thn Agreement. 8.15 Default. In the event of any legal action between the parties ansmg out of or in relation to this Agreement, the prevailing party in such legal action shall be entitled to recover, in addition to any other legal remedies, all of his or its costs and cxpensn, including reasonable anomey's fees, from the non -prevailing parry, regardless of whether such legal action is prosecuted to completion. IN WITNESS WHEREOF, the parties hereto have necuted this Agreement on the date first set forth above. Paul G. Allen, by Wiliam D. Savoy, stlamey-to-fact HOLDERS .,,,wn..a!,:::.a Cmtir, L -r.. By: Name: Marc B. Nathamon Tile: Chief Executive Officer Falcon Cable Trost w By: Marc B. Nathanson, trustee J nCLIBOi:I1314149 -8- r Blackhawk Holding Company, Inc. By: Marc B. Nathanon Preaidmi Advance Company, Ltd. By: Marc B. Nadh n president Advaoee TV of California, Inc. By: Mare B. Natlu President Nat6auon Family Tenn By: Ned Robertson, ounn Lillian Vladiminchi Greg Nathanson rKUMN1324I45 -9- EXHIBIT C REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of . is entered into by and among (Chatter), a Delaware corporation ("Charter") and the Other Persons executing this Agreement. PRELIMINARY STATEMENTS In connection with the consummation of the twowtio" contemplated by the Purchase and Contribution Agreement, dated as of May _, 1999 (the Vomhase Agrcemenf), among Chatter Communications, Inc., Falcon Holding Group, L.P., and certain other parties, Falcon Holding Group, L.P. acquired membership imaeats in [New Charter LLC). Falcon Holding Group, L.P. subsequently distributed the membership interests in [New Chaser LLC) to the Parties to this Agreement (other than (itself and) Charter). Pursuant to the Exchange Agreement. the holder of a membership interest in [New Cbaner LLCI may nchaugc ila membership inimst for shares of Common SuxL As a result of such trmvclums, each of the Parties to this Agreement (other than Charter), either holds a membership interest in [New Charter LLCJ and has the right to exchange its membership interest in [New Chane LLCJ for shares of Common Stock or holds shares of Common Stock that were issued in exchange for a membership interest , (New Charter LLCJ. In the Purchase Agreement. Cheney Communications, Inc. agreed dust Chane would enter into this Agreement to provide for certain registration rights with respect to the shares of Common Stock issued or issuable in exchange for membership interests in [New Chane LLC). NOW, THEREFORE, in consideration of the premises and of the mutual agreement and covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which we hereby acknowledged, the parties hereto agree as follows: following terms have the following meanings: tion. For purposes of this Agreement. the "Business Day" means my day other than a Saturday, Sunday, or other day on which commercial banking institutions in New York, New York are required or authorized by law to remain closed. "Charter Indemnified Parties" means Charter, its officers, directors, employees, and agents, and each Person, if my, who controls Charter within the meaning of either the Securities Act or the Exchange Act, and the officers, directors, employees, and agents of the foregoing paries. MUNIaunzu "Common Stack" means the [Series —1 Common Stock, par value S per share, of Charter and any securities into or for which such securifies ere converted or exchanged by Charter. "Exchange Act" means the Securities Exchange Act of 1934, or any successor federal statute, and the rules and regulations of the SEC promulgated thereunder, in each case as amended from time to time. "Exchange Agreement" means "Indemnified Party' means a person claiming a right to indemnification pursuant to Section 6 of this Agreement. "Indemnifying Parry" means a Person required to provide indemnification pursuant to Section 6 of this Agreement. "IPO" means the initial primary underwritten public offering of shares of Common Stock by Charter. "Lassa" means soy losses, claims, damages, or liabilities, and any related legal or other fees and expenses. "Nathaaon Stockholder Group" means a group of Stockholders consisting of each of the following Persons (so long as it is a Stockholder): (i) Falcon Holding Group, Inc., Falcon Cable Trust, Nathanson Family Trust, Blackhawk Holding Company. Inc., Advance Company, Ltd., Advance TV of California. Inc., Greg Nathanson, Lillian Vladimirschi, Marc B. Nadsnsan, any member of Marc B. Nathanson's family, any Person controlled by Marc B. Nathanson or one or mom members of his family, and any trust or similar entity for the benefit of Men: B. Nathanson or one or more members of his family, and (ii) any Person (other than Stanley S. Iskowitch) to whom my Registrable Securities or rights to acquire Registrable Securities arc imasfened by my Person that was, immediately prior in such transfer, a member of the Nathanson Stockholder Group. "Non -Nathanson Stockholder Group" means a group of Stockholders consisting of all Stockholders other than the members of the Nathanson Stockholder Group. "Person" mems my individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, trust, association, organization, or other entity. "Prospectus" means the prospectus included in a Registration Statement as of the date it becomes effective under the Securities Act and, in the case of references to the Prospectus as of a date subsequent to the effective dale of the Registration Statement, as amended or supplemented as of such date, including all documents incorporated by reference therein, each as amended, and each applicable prospectus supplement relating to the offering and sale of my of the Registrable Securities pursuant to such Registration Statement. o UNNINIMA -2- "Registrable Securities" means: (i) any shares of Common Stock that are issued or issuable to a Stockholder in exchange for membership interests in [New Charter LLC], Pursuant to the Exchange Agreement, and (it) MY securities of Charter or its successors issued or issuable with respect w any shares referred to in paragraph (i) whether by way of conversion, exchange, dividend, or stock split or in cooneetion with a combination of shares, recapitalization, merger, comolidmon, or other reorganization or otherwise. Securities that are Registrable Securities will cease to be Registrable Securities: (i) when a regianstion Butemmt with respect m the sale of such securities has become effective under the Securities Am and such securities have been disposed of in accordance with such registration sutement, (ii) when such securities shall have been sold pursuant 10 Rule 144 or Rule 145 (or any successor provlsiom) under the Securities Act or in my other transection in which the applicable purchaser does not receive "restricted securities" (as aui term is defined for purposas of Rule 144 under the Securities Act), (iii) on the fiat date on which such securities can be sold without regard to the volume and manner of sale )imitations set forth in Rule 144 (Or my successor provision), or (iv) when such securities cease to be outstanding. "Registration Statement" meant a registration statement (including the related Prospectus) of Charter under the Securities Act on my Pone selected by Charter for which Chmer then qualifies and which permits the We thereunder of the number and type of Registrable Securities (and my other securities of Chmer) to be included therein in accordance with this Agreement by the applicable sellers in the manner described therein. The term "Registration Statement" shall also include all exhibits, financial statements, and schedules and all documents incorporated by reference in such Registration S,,mmu when it becomes effective under the Securities Act, and in the cam of the references to the Rmissatinn cues.,,,._,,._ v of a date subsequent to the etl'ecli's date, as amended or supplemented as of such date. "Rule 144 -Eligible Securities" means Registrable Securities that can then be sold by the Stockholder owning such Registrable Securities without registration Order the Securities Act pursuant to Rule 144 (or my successor provision) Order the Securities Act. Except as provided in Section 3.1(d), my reference in this Agreement to 'Registrable Securities" that does not expressly exclude Rule 144 -Eligible Securities shall be interpreted as a reference to all Registrable Securities, including all Rule 144 -Eligible Securities. "SEC" mems the Securities and Exchange Commission, or my other federal agency at the time administering the Securities Act or the Exchange Act. ocuumutzasxas 3 "Securities Act" mcmS the Securities Act of 1933, or any successor federal statute, and the rules and regulations of the SEC promulgated thereunder, in each case as amended from time to time. "Selling Stockholder" means any Stockholder whose Registrable Securities are included at the request of such Stockholder in any Registration Statement pursuant to Section 2 or Section 3. "Stockholder" means each party to this Agreement who owns Registrable Securities or has the right to acquire Registrable Securities pursumn to the Exchange Agreement and airy other Person: (i) to whom any Registrable Securities or any rights to acquire any Registrable Securities are tmnsfened by any Person that was, immediately prior to such transfer, a Stockholder, (ii) who continues to hold such Registrable Securities or the right to acquire such Registrable Securities, (iii) to whom the transferring Stockholder has assigned any of its rights muter this Agreement, in whole or in W. in accordance with the provisions of Section 8.6 of this Agreement with respect to such Registrable Securities, and (iv) who has executed a counterpart hereof in connection with the nmufer of such Registrable Secunties. "Stockholder Group" meats the Nathanson Stockholder Group or the Non -Nathanson Stockholder Gmup. "Stockholder Indemnified Ponies" means each Selling Stockholder, its officers, diremors, employees, and agents, each Person (if any) who controls such Selling Stockholder within the meaning of either the Securities Am or the Exchange Act, and the officers, directon, employees, and agents of the foregoing parties. "7ltiM-Party Demand Stockholder" means any Person having the right to rmnim. that Chats: titccl a tegiaustion unser me Securities Act of securities owned by such Person, other than pursuant to this Agreement. 1.2 'terms Defined Fl., purposes of this Agreement, the following terms have me meanings set forth sections indicated: TAM SSrdiga Demand Registration Section 2.1 Demanding Stockholders Section 2.2(c) Incidental Registration Section Ilia) Initiating Stockholder Section 2.2(a) Material Event Section 2.6(a) Minimum Condition Section 2.2(d) vutututsrs:se •4- as RReg=stration Expenses Section Registration 5.1 1.3 Tams Generally. The definitions in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context requires, any pronoun includes the corresponding masculine, feminine, and neuter forms. The words "include, "'includes," and "including" are not limiting. Any reference in this Agreement to a "day" or number of "days" (without the explicit qualification of "Business') shall be interpreted as a reference to a calendar day or number of calendar days. If my action or notice is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, than such action or notice shall be deferred until, or may be taken or given on. the next Business Day, 2. Dema.d Real=r.= 1.1 Dema d Re¢'.trai=R�„h� At any time on or after the 180th day following the consummation of the IPO, each Stockholder shall have the right to require that Cliatter register under the Securities Act the offer or sale of all or a portion of the Registrable Securities held by such Stockholder on the terns and "him! to the conditions and limiatons bet forth herein. The registration of Registrable Securities under the Securities Act in accordance with this Section 2 is refer:d to in this Agreement as a'Demaml Registration.' The number of Demand Registrations to which the Stockholders shall be entitled shall be u follows: (a) the Stockholders who are membra of the Nathanson Stockholder Group shall be entitled to two Demand Registrations in the aggregate, plus, if the Stockholders who are membra of the Non -Nathanson Stockholder Group no longer own sufficient Registrable Securities (excluding my Rule 144 -Eligible Securities) to satisfy the Minimum Condition and the number of Demand Registrations effected at the request of such Stockholders is less then two, the Stockholders who are membra of the Nathanson Stockholder Group shall be entitled to a number of additional Demand Registrations in the aggregate equal to Two minus the number of Demand Registrations effected at the request of the Stockholders who are members of the Nor. NathansonStockholder Group; and (b) the Stockholdm who arc membra of the Non -Nathanson Stockholder Group shall be entitled to two Demand Registrations in the aggregate, plus, if the Stockholders who are members of the Nathanson Stockholder Group no lon_per nwn eufE,j_ Reg -441e Securities (excluding any Rule 144 -Eligible Securities) to satisfy the Minimmn Condition and the number of Demand Registrations effected at the request of such Stockholders is less than two, the Stockholders who are membra of the Non -Nathanson Stockholder Group shall be entitled to a number of additional Demand Registrations in the aggregate equal to two minus the number of Demand Registrations effected at the request of the Stockholders who are members of the Nathanson Stockholder Group. (a) A Stockholder holding Registrable Securities may elect to initiate a _ Demand Registration pursuant to this Section 21.3 by furnishing Charter and such Stockholder's - Stockholder Group with a written notice specifying the number of Registrable Securities that nCLIa0:11251244 -5- such Stockholder desires to have registered, whether any of such Registrable Securities are Rule 144 -Eligible Securities, and such Stockholder's intended method or methods of distribution of all such Registrable Securities. The Stockholder delivering a notice pursuant to the preceding sentence is referred to as the 'Initiating Stockholder." The Registrable Securities that the Initiating Stockholder desires to have registered, as specified in its notice pursuant to this Section 2.2(a), must include some Registrable Securities that are not Rule 144 -Eligible Securities. If the number of Registrable Securities (excluding any Rule 144-Efigible Securities) that the Initiating Stockholder desires to have registered, u specified in its notice pursuant to this Section 2.2(a), does not satisfy the Minimum Condition, then, any member of the Stockholder Group of which the Initiating Stockholder is a member may, within twenty days atter its receipt of the Initiating Stockholder's notice pursuant to this Section 2.2(a), deliver a written notice to Charter and such Stockholder's Stockholder Group specifying the number of Registrable Securities that such Stockholder desires to have registered, whether an/ of such Registrable Securities are Rule 144 - Eligible Securities, and such Smckholdces intended method or methods of distribution of such Registrable Securities. (b) If the number of Registrable Securities (excluding any Rule 144. Eligible Securities) that the Stockholders in a Stockholder Group desire to have registered, as specified in their notices pursuant to Section 2.2(a), does not satisfy the Minimum Condition, then Charter will have no obligation to effect a Demand Registration in response to such ounces pursuant to Section 2.2(a), but nothing herein will limit the rights of the Stockholders in such Stockholder Group to require on a subsequent occasion that Charter effect a Demand Registration to which the Stockholders in such Stockholder Group are entitled under Section 2.1. (c) If the number of Registrable Securities (excluding any Rule 144 - Eligible Securities) that the Stockholders in a Stockholder Group desire to have registered, as specified in their notices pursuant to Section 2.2(a), sarisfiea the Minimum Condition, then Charter will notify such Stockholder Group that the Minimum Condition was satisfied. Any member of that Stockholder Group may elect. by written octiu delivered to Charter within ten days after its receipt of Charter's notice pursuant to this Section 2.2(c). to include any or all of iu Registrable Securities in the Demand Registration. A Stockholder's notice pursuant to this Section 2.2(c) will specify (i) the amount of such Stockholder's Registrable Securities to be included the Demand Registration, (ii) whether any of such Registrable Securities are Rule 144 - Eligible Securities, (iii) such Stockholder's intended method or methods of diadhndnn of ire Registrable Securities, and (iv) any other information that Charter reasonably requests. The Stockholders in a Stockholder Group that deliver notices pursuant to Section 2.2(a) or this Section 2.2(c) are referred to as the "Demanding Stockholders." (d) The "Minimum Condition" means that we number of Registrable Securities (other than any Rule 144 -Eligible Securities) that the Stockholders in a Stockholder Group desire to have registered, as specified in their notices pursuant to Section 1.2(a), (i) have an aggregate market value on the date of the delivery of the Initiating Stockholder's notice pursuant to Section 2.2(a) (before any underwriting or brokerage discounts and commissions) of not less than $40,000,000; or pcuu01:112812sa -6- (9) have an aggregate value at the price to the public of share of Common Stock in the IPO (before any underwriting or brokerage discounts and commissions, and adjusted as necessary for any events described in Section 2.9(d) occurring between the consummation of the ffO and the calculation of the Minimum Condition) of not leu than $60,000,000. (e) Following the effectiveness of a Registration Statement filed in connection with a Demand Registration, Charter will not be required to file a Registration Ststemenl for a subsequent Demand Registration within six months after the date on which it received the Initiating Stockholder's rmuce purmam to Section 2.2(a) for the immediately preceding Demand Registration (regardless of whether the subsequent Demand Registration is requested by Stockholders in the same Stockholder Group as the immediately preceding Demand Registration). (q As soon as reasonably practicable after the Stockholders in a Stockholder Group have noufied Charter that they desire to have registered a number of Registrable Smunties (excluding any Rule 144 -Eligible Securities) that satisfies the Minimum Condition, subject to Section 2.6(a) and Section 2.6(e), Charter will file with the SEC and use its reasonable best effort to cause to become effective ex promptly as practicable a Registration Statement that covers the Registrable Securities requested to be segistned in the manner act forth above. Subject to the provisions of Section 23 below, each Registration Statement tray also include securities to be sold for the account of Charter, for Stockholders who do not participate as Demanding Stockholders but who exemise their rights under Section 3 below, or for any stockholder of Charter not holding Registrable Securities. 2.3 Underwriters. One or more Demanding Stockholders owning more than 50% of the Registrable Securities to be included in a Demand Registration shall collectively have the right to select the land book running managing underwriter for any underwritten public offering in connection with a Demand Registration, which lead managing underwriter shall be reasonably acceptable to Charter. Each Demanding Stockholder electing to participate in a Demand Registration involving an underwrinen public offering shall. as a condition to Chances obligation under this Section 2 to include such Demanding Stockholde x Registrable Securities in the Demand Registration, enter into and perform its obligations under an underwriting agreement or other similar arrangement in customary form with the lead underwriter of such oGering. 2.4 Shelf Registration. If at the time the Minimum Condition is satisfied. Charter is eligible to file a registration statement on Forts S-3 (or any equivalent successor Room), then one or more Demanding Stockholders owning more than 50% of the Registrable Securities to be included in a Demand Registration may elect to require that the Demand Registration be effected pursuant to a shelf registration under Rule 415 of the Securities Act; provided, however, that (a) Charter will not be required to effect the Demand Registration pursuant to a shelf registration under Rule 415 of the Securities Act if Charter has been advised by an independent investment banking firm of nationally recognized standing that such method of distribution could reasonably be expected to materially and adversely affect the public market for the Common Stock or materially and adversely affect any financing then being contemplated by Charter; (b) the Demanding Stockholders may not elect to require that the Demand r mCL18a1:111883aA .7. r Registration be effected pursuant to a shelf registration under Rule 415 of the Securities Act unless the Registrable Securities to be included in the Demand Registration have an aggregate market value on the date of the Demanding Stockholders' election (before any underwriting or brokerage discounts and commissions) of at least SI00,000,000; and (c) during the time any such shelf registration is effective, Charter may require from time to time that the Selling Stockholders refrain from selling pursuant to such registration under the circumstances, in the manner, and for the time period described in Section 2.6. Charter will use its reasonable best efforts to cause any Demand Regi nation effected u a shelf registration under Rule 415 of the Securities Act to remain effective for a period ending on the earlier of (i) the date that is a number of days after the effective date of the Registration Statement equal to 365 plus the number of days that the Setting Stockholdm most refrain from selling pursuant to Section 2b, and (ii) the date on which all Registrable Securities covered by the Registration Statement have been sold pursuant to the Demand Registration; and (d) Charter will am be required under this Section 2.4 to effect more than one Demand Registration as a shelf registration under Rule 415 of the Securities Act. 2.5 I imt =tion on In I ,6 on of R tiaimbit Satuni .. (a) If the book running managing underwriter of any underwritten public offering in connection with s Demand Registration determines in good faith that the aggregate number of Registrable Securities to be offered exceeds the number of shun that could be sold without having an advme effect on such offering (including the price at which the Registrable Securities may be sold), then the number of Registrable Securities to be offered for the account of the Demanding Stockholders in such offering shill be reduced or limited on a pro rata basis, based on the respective numbers of Registrable Securities requested to be included in such offering by all Demanding Stockholdm, to the extent necessary to reduce the total number of shares to be included in such offering to the amount recommended by the book naming managing underwriter, provided. however, that if such registration includes securities other than Registrable Securities of the Demanding Stockholders (whether for the account of Chaser or for any stockholder of Charter not exercising rights =der this Section 21.3), such reduction shall be made: (i) first, from securities held by Persons who are not Stockholders and from securities being offered for the acenum of fs,an.. •h!MstM bebv:en Chatter and such otter Persons u Charter may determine, subject to any agream=ta between Charter and such other Persons; (fi) second, from the number of Registrable Securities requested m be included in such offering by Stockholders pursuant to their rights =des Section 3, on a pro rare basis, hazed on the number of Registrable Securities requested to be included in the registration by Stockholders pursu=t to their rights under Section 3; and (iii) tu% from the number of Registrable Securities requested to be included in such offering by the Demanding Stockholders, on a pro rata basis, based on the number of Registrable Securities requested to be included in the registration by the Demanding Stockholders. MMI:IIlaBlai -8- (b) One or more Demanding Stockholders owning more than 50% of the Registrable Securities to be included in a requested Demand Registration may elect not to proceed with the registration if less than 75% of the Registrable Securities requested to be registered by each of the Demanding Stockholders are included in such regutradon. If Demanding Stockholders owning more than 50%ofthe Registrable Securities to be included in a requested Demand Registration elect not to proceed with the registration pursuant to this Section 2.5(b), the Registration Statement for such registration shall be promptly withdrawn, a Demand Registration shall not be deemed to have been affected for purposes of this Agreement (including the limitations on the number of Demand Registrations of each Stockholder Group set forth in Section 2.1 above), and the Demanding Stockholders shall pay all out-of-pocket Registration Expenses incurred by Chaner in connection with such Registration Statement. 2.6 (a) Charter shall have the right, exercisable by giving notice of the exercise of such right m the applicable Selling Stockholders, subject to Section 2.6(b), at my time and from time to time, m delay filing or the declaration of effectiveness of a Registration Statement or to require the applicable Selling Stockbrokers rot to sell my Registrable Securities pursuant to an efRetive Registration Statement for a period not in excess of 120 days beginning use the date on which such notice is givcm, or such shorter period of time as may be specified in such notice or in a subsequent notice delivered by Charter to such effect prior to or during the effectiveness of the Registration Statamem, if: (i) Charter is engaged in discussions or negotiations with respect to, or there otherwise is pending• my merger, acquisition. or other forth of business combination that is "probable" (widen the meaning of the Securities Act), any divestiture, tender after, financing, or other event that, in my such case, is material to Charter (my such activity or event, a "Material Event'). (ti) such Material Event would, in the judgment of Charter's board of directors (after consultation with counsel), require disclosure an as to permit the Registrable Securities to be mid in compliance with law, and (tai) disclosure of such Material Event would, in the judgment of Charter's board ofdir^mr(a.?a cznzuha:ica- — Co..;). i. mire.. m iu imeresu. (b) Chaney may not delay the filing of a Registration Statement or the sale of my Registrable Securities, whether pursumt to one or more notices pursuant m Section 2.6(a), for more than an aggregate of 120 lays within my 12 -month period. (c) If Charter postpones its obligations under this Agreement by reason of a Material Event as described in Section 2.6(a), my Selling Stockholder will have the _ right to withdraw its Registrable Securities from the applicable Demand Registration or Incidental Registration, by giving notice to Chmer at my time following delivery of Chmer's notice pursuant to Section 2.6(a). (d) No Stockholder may deliver a notice pursuant to the first sentence of Section 2.2(a) during the period of my postponement pursuant to Section 2.6(a) until Charter y XUBOU11381244 -9- r notifies all Stockholders of the end of such Material Event or the expiration of the 120 -day period described in Section 2.6(a). (e) Charter shall have the right, exercisable by giving notice of the exercise of such right to the applicable Selling Stockholders, to delay filing or the declaration of effectiveness of a Registration Statement during any period in which, as a result of Charter's failure to satisfy the conditions in Rule 3.01(c) of Regulation S -X, Charter is required to include in the Registration Statement audited financial statements of Chatter prior to the date on which such audited financial statemenu would normally have been prepared in accordance with Charter's past practices and the SEC's periodic repening requirements. 2.7 Withdrawal (a) If (i) a Registration Statement riled pursuant to this Section 2 does not remain effective under the Securities Am fm the period specified in Section 2.8(a) due to a stop order, injunction, or other order of the SEC or other govemmenral agency. arta (ii) each of the Demanding Stockholders has nm sold at least two-thirds of its Registrable Securities registered under such Registration Statement, then the Demanding Stockholders may elect to withdraw such Registration Statement by written notice to Chartcr:ard, in such an event, such registration shall not be deemed to have been a Demand Registration for purposes of the limiumons on the number of Demand Registrations contained in Section 2. 1, and Charter shall bear the Registration Expenses incurred in connection with such registration. (b) Each Selling Stockholder may, no less than five Business Days before any Registration Statement becomes effective, withdraw wine or all of its Registrable Securities fora inclusion in the Registration Statement. If such withdrawal& result in the Minimum Condition not being satisfied. then Chesser may withdraw such Registration Statement unless the remaining Demanding Stockholders agree to include additional Registrable Securities (excluding any Rule I4 Eligiblc Securities) in the registration such that the Mmimum Condition would be satisfied or agree to bear the Registration Expenses incurred by Charter in connection with such registration. (c) If Charter withdraws a Registration Statement pursuant to Section 2.7(b), then the requested registration shall be deemed to have been a Demand Registration for purposes of rine limitations on me mouser a Demard Registrations contained in Section 2.1 unless (i) at the time of a Stockholder's withdrawal of Registrable Securities pursuant to Section 2.7(b), there has been a material adverse change in the operating results, financial condition, or business of Charter that was not publicly known at the time that the Minimum Condition was originally satisfied; or (ii) Charter has postponed its obligations under this Agreement by reason of a Material Event as described in Section 2.6(a). ocueauiussxa< -10- (a) In connection with any Demand Registration pursuant to this Section 21.3, subject to Section 2.6, Charter will use its best efforts to prepare and file with the SEC any amendment and supplements to the Registration Statement and the Prospectus used in connection therewith, and to take any other actions, that may be necessary to keep the Registration Statement and the Prospectus effective, cm ml, and in compliance with the provisions of the Securities Act, until the sooner to occur of (i) the sale of all of the Registrable Securities covered by such Registration Statement in accordance with the intended methods of distribution thereof or (ii) the 90th day following the effective date of such Registration Statement. (b) A Demand Registration shall not be deemed n have been effected for purposes of this ASrement (including the (imitations on the number of Demand Registration of each Stockholder Group s fond in Section 2.1 above) until the Registration Statement therefor &hall have been declared effective under the Securities Act by the SEC (and is not then subject to any stop order, injunction, or other order or requirement of the SEC or other governmental agency or court for my reason) for the period specified in Section 2.8. 2.9 Ri ht to Purchase Shares. In lieu of undertaking to effect a Demand Registration at any time that Charter would otherwise be required to do so under this Agreetnmt, Charter may instead elect to purchase, or cause to be purchased, all Registrable Smarties that the Demanding Stockholders desire to have rgistered, as specified in their notices pursuant to Section 2.2(a), and in my notice pursuant to Section 2.2(c), on the following terms: (a) Charier may elect to purchase all, but not leu dun all, of such Registrable Securitim by delivering written wtice of it election m the Demanding Stockholders within five Business Days after the deadline for a Stockholder's delivery of a nonce pursuant to Section 22(c). (b) Charter may not make an election pursuant to this Section 2.9 unless all Registrable Securities specified in the Demanding Stockholden' notices parmamt to Section 2.2(a) and Section 2.2(e) are securities for which the "avenge trading price" can be determined in accordance with Section 2.9(d). Charter may not make an election pursuant to this Sective 2.9 if such P=hao-c 'would require any waiver. consent, or approval of any Peron that could impede or materially delay the closing of the purchase and sale of the Registrable Securities required to be purchased. (c) Upon Charter's delivery of notice of it election pursuant to Section 2.9(a), Charter shall be obligated to purchase, or to cause to be purchased, and each Demanding Stockholder shall be obligated to sell, the Registrable Securities specified in the Demanding Stockholder's notice pursuant to Section 2.2(a) or Section 2.2(c), m applicable. (d) The ptuchase price per share for such Registrable Securities shall I be the "average trading price' (determined as provided below) as of the date on which the Initiating Stockholder sent its notice pursuant to Section 2.2(a) of a share of the same classas such Registrable Securities and shall be payable to each selling Stockholder in immediately j r ocuutausuaa 'I -11• r available funds at the closing. The "average trading price' as of any date of any securities will be the average for the twenty full trading days preceding such date of (i) the last reported sales prices, regular way, as reported on the principal national securities exchange on which such securities are listed or admitted for trading or (ii) if such securities are not listed or admitted for trading on any national securities exchange, the last reported sales prices, regular way, as reported on the Nasdaq National Market or, if such securities are not listed on the Nasdaq National Marker, the average of the highest bid and lowest asked prices on each such trading day as reported on the Nasdaq Stock Market, or (iii) if such securities are not listed or admitted to trading on any national securities exchange, the Nasdaq National Market or the Nasdaq Stock Market, the average of the highest bid and lowest asked prices on each such trading day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization. For purposes of this Section 2.9(d), a "trading day" means a day on which the principal national securities exchange on which such securities are fisted or admitted to trading, or the Nasdaq National Market or the Nasdaq Stock Market, as applicable, if such securities are not listed or admitted to trading on any national securities exchange, is open for the transaction of business (unless such trading shall have been suspended for the entire day) or, if such securities are not listed or admitted to trading on any national securities exchange, the Nasdaq National Market or the Nasdaq Stock Market, any Business Day. For purposes of determining the "average trading prier of any securities, (i) the applicable sales price or bid and asked prices of such securities on any day prior to any "ex -dividend" date or any similar date occurring prior to the closing of the purchase of Registrable Securities pursuant to this Section 2.9 for any dividend or distribution (other than a dividend or distribution contemplated by clause (ii)(B) of this sentence) paid or to be paid with respect to such securities shall be reduced by the fair value of the per share amount of such dividend or distribution and (ii) the applicable sales price or bid and asked prices of such securities on any day prior to (A) the effective date of any subdivision (by stock split or otherwise) or combination (by reverse stock split or otherwise) of outstanding shares of such securities occurring prior to the closing of the purchase of Registrable Securities pursuant to this Section 2.9 or (B) any "ex -dividend" date or any similar date occurring prior to the closing of the purchase of Registrable Securities pursuant to this Section 2.9 for any dividend or distribution with respect to such securities to be made in shares of such securities or securities that are convertible, exchangeable, or exemisable for shares of Common Stock shall be appropriately adjusted, as determined by the Board of Directors of Charter, to reflect such subdivision, combination, dividend, or distribution. (e) The closing of the purchase and sale of such Registrable Securities shall take place on a date determined by Charter and set forth in the notice of its election pursuant to Section 2.9(a) which shall not be fewer than seven nor more than thirty days after the date of Charter's notice of its election pursuant to Section 2.9(a) (t) An election by Charter pursuant to this Section 2,9 shall not affect the number of Demand Registrations to which the Stockholders are entitled under Section 2.1. ocuaoJm12e8rae -12- Incidental Registration. 3.1 Notice of incidental Re 'stmtion. (a) Subject to Section 3.1(b) and Section 3. Ile), if Charter at any time proposes to register under the Securities Act any shares of the same class as any of the Registrable Securities (whether in an underwritten public offering or otherwise and whether or not for the account of Charter or for any stockholder of Charter, including Selling Stockholders registering Registrable Shares in a Demand Registration pursuant to Section 21.3), in a manner that would Pencil the registration under the Securities Act of Registrable Securities for sale to the public, Charter will give written notice to each Stockholder of its intention to do so not later than ten days prior to the anticipated filing dale of the applicable Registration Statement. If the proposed registration is intended to be a Demand Registration, Charter shall give the notice described in the preceding sentence but only to the Stockholders that did not previously elect to become Demanding Stockholders pursuant to Section 21.3 with respect to such registration. Any Stockholder may elect to participate in such registration on the same basis as the planned method of distribution contemplated by the proposed registration by delivering written notice of its election to Charter within five days after its receipt of Charter's notice pursuant to this Section 3.1(a). A Stockholder's election pursuant to this Section 3.1(a) must !i) specify the amount of Registrable Securities desired to be included in such registration by such Stockholder and (ii) include any other information that Charter reasonably requests be included in such registration statement. Upon its receipt of a Stockholder's election pursuant to this Section 3.1(a), Charter will, subject to Section 3.2, use its reasonable best efforts to include in such registration all Registrable Securities requested to be included. Any registration of Registrable Securities pursuant to this Section 3 is referred to as an "Incidental Registration." (b) Charter shall have no obligation under this Section 3 with respect to any registration effected pursuant to a registration statement on Form S4 (or any other registration statement registering shares issued in a merger, consolidation, acquisition, or similar transaction) or Form S-8 or any successor or comparable forms, or a registration statement filed in connection with an exchange offer or any offering of securities solely to Charters existing stockholders or otherwise pursuant to a dividend reinvestment plan, stock purchase plan, or other employee benefit plan. - (c) Charter shall have no obligation under this Section 3 with respect to any registration initiated by one or more Third -Parry. Demand Stockholders pursuant to one or more registration rights agreements under which the rights of all of such Third -Party Demand Stockholders are pari passu, if.. (i) the applicable registration rights agreement between Charter and such Third -Party Demand Stockholders prohibits the inclusion in such registration of securities other than those offered by such Third -Party Demand Stockholders and Charter; and ` (ii) no securities other than those offered by such Third -Party Demand Stockholders are included in such registration. W W ocusoi:iussus -13- u (d) Solely for purposes of this Section 3, Rule 144 -Eligible Securities will not be deemed to be Registrable Securities, and any Stockholder owning any Rule 144 - Eligible Securities will have no rights to require an Incidental Registration of its Rule 144- Eligible 44Eligible Securities, in the case of any registration in which no stockholder of Charter has the right to include any securities that could then be sold by such stockholder without registration under the Securities Act pursuant to Rule 144 (or any successor provision) under the Securities Act (regardless of whether any such stockholder elects to include such securities in such registration). 3.2 Limitation on Inclusion of Registrable Securities, Priories. If the proposed method of distribution in connection with an Incidental Registration is an underwritten public offering and the lead managing underwriter thereof determines in good faith that the amount of securities to be included in such offering would adversely affect such offering (including an adverse effect on the price at which the securities proposed to be registered may be sold), the amount of securities to be offered may be reduced or limited to the extent necessary to reduce the total number of securities to be included in such offering to the amount recommended by the lead managing underwriter as follows: (a) in connection with an offering initiated by Charter, if securities me being offered for the account of other Persons (including any Stockholders) such reduction shall be made: (i) first, from the securities intended to be offered by such other Persons (including any Stockholders), on a pro ram basis, based on the number of Registrable Securities and other securities that are requested to be included in such offering; and (ii) last, from the number of securities to be offered for the account of Charter; (b) in connection with an offering initiated by a Third -Party Demand Stockholder, such reduction shall be made: (i) fust, from securities held by Persons who me not Stockholders, Third -Party Demand Stockholders, or other stockholders entitled under any bm vee ; ;hem and o pd ,Pato pari paiauuulc , lag Sock wldcrs in such Incidental Registration, and from securities being offered for the account of Charter, allocated between Charter and such other Persons as Charter may determine, subject to any agreements between Charter and such other Persons; (ii) second, from the number of Registrable Securities requested to be included in such offering by the Selling Stockholders and any other stockholders entitled under any agreements between them and Charter to participate pari passu with the Selling Stockholders in such Incidental Registration, on a pro rata basis, based on the number of Registrable Securities and other securities which are requested to be included in the registration; and (iii) last, from securities being offered by the Third -Party Demand Stockholders. ML1001:112992H 14- 3.3 Delay or Withdrawal of Registration. Charter may, without the consent of any Stockholder, delay, suspend, abandon, or withdraw any proposed registration in which any Stockholder has requested inclusion of such Stockholder's Registrable Securities pursuant to this Section 3. 3.4 W'lixi I by Selling t trn Id . Each Selling Stockholder may, no less than five Business Days before the anticipated effective date of the applicable Registration Statement for an Incidental Registration, withdraw some or all of its Registrable Securities from inclusion in the Registration Statement. No such withdrawal shall relieve any withdrawing Selling Stockholder of its obligation to pay expenses under Section S. 3.5 U d itera- Undenaliting Amement. In connection with any Incidental Registration involving an onderwrinea public offering of securities for the account of Charter or a Third -Patty Demand Stockholder, (a) the managing and lead underwriters shall be selected by Charter, unless otherwise provided in any agreement between Charter and any Third - Party Demand Stockholder, and (b) each Selling Stockholder electing to participate in the Incidental Registration shall, as a condition to Charter's obligation under this Section 3 to include such Selling Stockholder's Registrable Securities in such Incidental Registration, enter into and perform its obligations under an underwriting agreement or other similar arrangement in customary form with the managing underwriter of such offering. 4. Obl' iwith Respect t Registration. 4.1 Oblieations of Charter. Whenever Charter is obligated by the provisions ofthis Agreement to effect the registration of any Registrable Securities under the Securities Act, Charter shall: (a) Subject to the provisions of Section 4.2, use its reasonable best efforts to cause the applicable Registration Statement to become effective as promptly as practicable, and to prepare and file with the SEC any amendments and supplements to the Registration Statement and to the Prospectus used in connection therewith w may be necessary to keep the Registration Statement and the Prospectus effective, current, and in compliance with the provisions of the Securities Act, during the periods when Charter is required by [his Agreement to keep the Registration Statement effective and current. (b) Within a reasonable time not re exceed ten Business Days prior to filing a Registration Statement or Prospectus or any amendment or supplement thereto (other than any amendment or supplement in the form of a filing that Charter makes pursuant to the Exchange Act), famish to each Selling Stockholder and each underwriter, if any, of the Registrable Securities covered by such Registration Statement copies of such Registration Statement or Prospectus as proposed to be filed, which documents will be subject to the reasonable review and comments of the Selling Stockholders (and their respective counsel) during such period, and Charter will not file any Registration Statement or any Prospectus or any amendment or supplement thereto ormaining any statements with respect to any Selling Stockholder or the distribution of the Registrable Securities to be included in such Registration Statement for sale by such Selling Stockholder if such Selling Stockholder reasonably objects in writing. Thereafter, Charter will furnish to each Selling Stockholder and each underwriter, if ocuamaussra-a .15- any, such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as such Selling Stockholder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Selling Stockholder. (c) After the filing of the Registration Statement, promptly notify each Selling Stockholder of the effectiveness thereof and of any stop order issued or threatened by the SEC and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered and promptly notify each Selling Stockholder of the lifting or withdrawal of any such order. (d) Immediately notify each Selling Stockholder holding Registrable Securities covered by the applicable Registration Statement at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of (i) the determination that a Material Event exists or (ii) the occurrence of an event requiring the preparation of a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus will not contain an untie statement of a material fact or omit to state any material fact required to be stated therein or necessary to make Etre statements therein, in light of the circumstances in which they were made, not misleading and promptly make available to such Selling Stockholder any such supplement or amendment, and subject to the provisions of this Agreement regarding the existence of a Material Event, Charter will promptly prepare and furnish to each such Selling Stockholder a supplement to or an amendment of such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus will not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in fight of the circumstances in which they were made, not misleading. (e) Enter into customary agreements (including an underwriting agreement in customary form including customary indemnification provisions) and perform its obligations under any such agreements and shall take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities. (f) Make available for inspection by anv Saltine Stockholder covered by such Registration Statement, any underwriter selected by a Selling Stockholder pursuant to Section 2.3 participating in any disposition pursuant to such Registration Statement, and any attorney, accountant, or other professional retained by any such Selling Stockholder or underwriter, all financial and other records, pertinent corporate documents, and properties of Charter as shall be reasonably necessary to enable them to exercise their due diligence responsibility in connection therewith, and cause Charter's officers, directors, and employees to supply all information reasonably requested by any of such Persons in connection with such Registration Statement. Information that Charter determines, in good faith, to be confidential and notifies such Persons is confidential shall not be disclosed by such persons unless (i) the release of such information is ordered pursuant to a subpoena or other order from a court, or other governmental agency or tribunal, of competent jurisdiction or (ii) such information becomes public other than through a breach by such Persons of the confidentiality obligations of such Persons. Each Selling Stockholder agrees that information obtained by it as a result of such ocueowiassxa.a -16- inspections shall be deemed confidential and shall not be used by it as the basis for any transactions in the securities of Charter or for any other purpose unless and until such information is made generally available to the public. (g) Furnish, in die case of an underwritten public offering, to each Selling Stockholder and to each underwriter a signed counterpart of (i) an opinion or opinions of in-house counsel or outside counsel to Charter addressed to such Selling Stockholder and underwriters (on which opinion both such Selling Stockholder and each such underwriter shall be entitled to rely) and (ii) a comfort letter or comfort letters from Charters independent public accountants, each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the holders of a majority of the Registrable Securities included in such Registration Statement or the managing underwriter therefor reasonably requests. (h) Register or qualify the Registrable Securities covered by a Registration Statement under the securities or blue sky laws of such United Statesjurisdictions as the Selling Stockholders shall reasonably request, and do any and all other acts and things which may be necessary to enable each Selling Stockholder to consummate the disposition in such jurisdictions of such Registrable Securities in accordance with the method of distribution described in such Registration Statement; provided, however, that Charter shall not be required (i) to qualify to do business as a foreign corporation in anyjurisdiction where it is not otherwise required to be so qualified, (ii) to conform its capitalization or the composition of its assets at the time to the securities or blue sky laws of such jurisdiction, (iii) to execute or file any general consent to service of process under the laws of any jurisdiction, or (iv) to subject itself to taxation in any jurisdiction where it has not theretofore done so. (i) Use its reasonable best efforts to cause such Registrable Securities covered by a Registration Statement to be listed on the principal exchange or exchanges or qualified for trading on the principal over-the-counter market or listed on the automated quotation market on which securities of the same class and series as the Registrable Securities (or into which such Registrable Securities will be or have been converted) are then listed, traded, or quoted upon the sale of such Registrable Securities pursuant to such Registration Statement. Q) Make and keep information publicly available relatine to Charles su as to satisfy the requirements of Rule 144 under the Securities Act (or any successor or corresponding rule) and file with the SEC all reports and other documents required of Charter under the Securities Act and the Exchange Act in a timely mamer. (k) Make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, which earnings statement shall satisfy the provisions of Section I l(a) of the Securities Act (provided that Charter shall not be deemed in violation of this paragraph so long as it files customary quarterly reports with the SEC for such period), and not file any amendment or supplement to such Registration Statement or Prospectus to which any of the Selling Stockholders shall have reasonably objected on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the Securities Act. DCLlaa11128824i -17- 4.2 Selling Stockholders' Obligations. Charters obligations under this Agreement to a Selling Stockholder shall be conditioned upon such Selling Stockholders compliance with the following: (a) Such Selling Stockholder shall cooperate with Charter in connection with the preparation of the Registration Statement, and for so long as Charter is obligated to keep the Registration Statement effective, such Selling Stockholder will provide to Charter, in writing, for use in the Registration Statement, all information regarding such Selling Stockholder, its intended method of disposition of the applicable Registrable Securities, and such other information as Charter may reasonably request to prepare the Registration Statement and Prospectus covering the Registrable Securities and to maintain the currency and effectiveness thereof. (b) Such Selling Stockholder agrees that, upon receipt of any notice from Charter of the happening of any event of the kind described in Section 4.1(d), such Selling Stockholder will discontinue its offering and sale of Registrable Securities pursuant to the applicable Registration Statement until such Selling Stockholders receipt of either (i) notice from barter that a Material Event no longer exists (but for no longer than the end of the 120 -day period described in Section 2.6) or (ii) the copies of the supplemented or amended Prospectus contemplated by Section 4.1(d), and, in either case, if so directed by Charter, such Stockholder will deliver to Charter all copies in its possession of the most recent Prospectus covering such Registrable Securities at the time of receipt of such notice. 4.3 Underwriting Agoeennect. Neither Charter nor any other Person may participate in any underwritten public offering in connection with a Demand Registration or an Incidental Registration unless such person (i) agrees to sell its securities on the basis provided in any underwriting arrangements approved by the Person or persons selecting the lead managing underwriters for such offering and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, and other documents reasonably required under the terms of such underwriting arrangements and this Agreement. 4.4 Holdback by Charter. Charter agrees not to engage in any public sale or distribution by it of any securities of the same class or series as the Registrable Securities or securities convertible into, or exchangeable or exercisable for, or the value of which relates to or is based upon, such securities during me ten days pnor to, and during the 45 -day period beginning on, the effective date of any Registration Statement filed with respect to any public offering of Registrable Securities to the extent the lead book naming managing underwriter for such offering advises Charter in writing that a public sale or distribution during such 45 -day period (including a sale pursuant to Rule 144 under the Securities Act) of Registrable Securities by Charter other than pursuant to the underwritten public offering contemplated by such registration statement would materially adversely impact such underwritten public offering), except as part of such registration; provided, however, that the limitation set forth in this Section 4.4 shall not apply: (a) to registrations by Charter on Form S4 or any other registration of shares issued in a merger, consolidation, acquisition, or similar transaction or on Form S -S, or any successor or comparable forms, or a registration statement filed in connection with an exchange offer of securities of Charter made solely to Charters existing stockholders or otherwise pursuant to a dividend reinvestment plan, stock purchase plan, or other employee benefit plan; (b) to sales DCIIBal:l1389244 -18- by Charter upon exercise or exchange, by the holder thereof, of options, warrants or convertible securities; (e) to any employee benefit plan (if necessary to allow such plan to fulfill its funding obligations in the ordinary course); or (d) to any Demand Registration effected as a shelf registration under Rule 415 of the Securities Act. This Section 4.4 shall not limit any public sale or distribution of any securities of Charter by any Third -Party Demand Stockholder or any Person having the right to require that Charter include its securities in any registration initiated by any Third -Party Demand Stockholder. 5. Expenses of Registration. 5.1 Registration Ex en nsea. Except as provided in Section 5.2 and Section 5.3, all Registration Expenses incurred in connection with any Demand Registration or Incidental Registration and the distribution of any Registrable Securities in connection therewith shall be borne by Charter. For purposes of this Agreement, the term "Registration Expenses" means all: (a) registration, application, filing, listing, transfer, and registrar fees, (b) NASD fees and fees and expenses of registration or qualification of Registrable Securities under state securities or blue sky laws (c) printing expenses (or comparable duplication expenses), delivery charges, and escrow, fees, (d) fees and disbursements of counsel for Chartcr, (e) fees Pad expenses for independent certified public accountants retained by Charter (including the expenses of any comfort letters or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters), (f) fees and expenses of any special experts retained by Charter in connection with such registration; (g) reasonable fees and disbursements of underwriters and broker- dealers customarily paid by issuers or sellers of securities, and (h) fees and expenses of listing the Registrable Securities on a securities exchange or over-the-counter market. 5.2 Selling Stockholder Expenses. Each Selling Stockholder shall pay all stock transfer fees or expenses (including the cost of all transfer tax stamps), if any, all underwriting or brokerage discounts and commissions and all fees and disbursements of counsel for such Selling Stockholder attributable to the distribution of the Registrable Securities of such Selling Stockholder included in such registration. 5.3 Internal Expenses f Charter. Notwithstanding any other provision of this Agreement, Chester shall be obligated to bear all internal expenses of Charter in connection with any Demand Registration or Incidental Registration (including all salaries and expenses of its officers and employees performing accounting and legal functions and related expenses). txveaivaee:aa -19- Ill P 6. Indemnificalion. 6.1 By Charter. Charter agrees to indemnify and hold harmless each Stockholder Indemnified Party from and against any Losses, joint or several, to which such Stockholder Indemnified Party may become subject under the Securities Act, the Exchange Act, state securities or blue sky laws, common law or otherwise, insofar as such Losses (or actions in respect thereof) arise out of or are based upon any nine statement or alleged untrue statement of a material fact contained in the applicable Registration Statement or Prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and Charter will reimburse each such Stockholder Indemnified Party for any reasonable fees and expenses of outside legal counsel for such Stockholder Indemnified Parties, or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such claims; provided, however, that Charter will not indemnify or hold harmless any Stockholder Indemnified Party from or against any such Losses (including any related expenses) to the extent such Losses (including any related expenses) result from an untrue statement, omission or allegation thereof which were (a) made in reliance upon and in conformity with written information provided by or on behalf of the applicable Selling Stockholder specifically and expressly for use or inclusion in the applicable Registration Statement or Prospectus or (b) made in any Prospectus used after such time as Charter advised such Selling Stockholder that the filing of a post -effective amendment or supplement thereto was required, except that this proviso shall not apply if the untrue statement, omission, or allegation thereof is contained in the Prospectus as so amended or supplemented. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Stockholder Indemnified Parties and shall survive the transfer of such securities by the Selling Stockholders. 6.2 By Selling Stockholders. Each Selling Stockholder, individually and not jointly, agrees to indemnify and hold harmless each Charter Indemnified Party and each other Stockholder Indemnified Party from and against any Losses, joint or several, to which such Chatter Indemnified Party or any other Stockholder Indemnified Party may become subject, insofar as such Losses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the applicable Registration Statement or the Prospectus, or any omission or alleged omission to state therein a materini r rt required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, if the statement or omission was made in reliance upon and in conformity with written information provided by or on behalf of such Selling Stockholder or any Person who controls such Selling Stockholder specifically and expressly for use or inclusion in the applicable Registration Statement or Prospectus; provided, however, that such Selling Stockholder will not indemnify or hold harmless any Charter Indemnified Party or other Stockholder Indemnified Parry from or against any such Losses (including any related expenses) (a) to the extent the untrue statement, omission, or allegation thereof upon which such Losses (including any related expenses) are based was made in any Prospectus used after such time as such Selling Stockholder advised Charter that the filing of a post -effective amendment or supplement thereto was required, except the Prospectus as so amended or supplemented, or (b) in an amount that exceeds the net proceeds received by such Selling Stockholder from the sale of Registrable Securities pursuant to such Registration octtecuursexaa -20- Statement. Such indemnity shall remain in full force and effect regardless of any investigation by or on behalf of Charter Indemnified Parties or the Stockholder Indemnified Parties, and shall survive the transfer of such securities by the Selling Stockholder. 6.3 Procedures. Each Indemnified Party shall give notice to each Indemnifying Party promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and the Indemnifying Party may participate at its own expense in the defense, or if it so elects, assume the defense of any such claim and any action or proceeding resulting therefrom, including the employment of counsel and the payment of all expenses. The failure of any Indemnified Party to give notice as provided in this Section 6.3 shall not relieve the Indemnifying Party from its obligations to indemnify such Indemnified Party, except to the extent the indemnified Parry's failure to so notify actually prejudices the Indemnifying Partys ability to defend against such claim, action, or proceeding. If the Indemnifying Party elects to assume the defense in any action or proceeding, an Indemnified Parry shall have the right to employ separate counsel in such action or proceeding and to participate in the defense thereof, but such Indemnified Party shall pay the fees and expenses of such separate counsel unless (a) the Indemnifying Pony has agreed to pay such fees and expenses or (b) the named parties to any such action or proceeding (including any impleaded parties) include such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that there is or would be a conflict of interest between such Indemnified Party and the Indemnifying Party in the conduct of the defense of such action (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not assume the defense of such action or proceeding on such Indemnified Pony's behalf). No Indemnifying Party, in the defense of any such claim or litigation, shall, except with lire consent of the Indemnified Party (which consent will not be unreasonably withheld), consent to entry of any judgment, or enter into any settlement that 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 to such claim or litigation. 6.4 Contribution. If the indemnification provided for under this Section 6 is unavailable to or insufficient to hold the Indemnified Party harmless under Section 6.1 or Section 6.2 above in respect of any Losses referred to therein for any reason other than as specified therein, then the Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Parry as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the Indenutifying Parry, on the one hand, and such Indemnified Parry, on the other, in connection with the statements or omissions that resulted in such Losses. The relative fault of each Indemnifying Party or Indemnified Party, as the case may be, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by (or that was failed to be supplied by) such Indemnifying Party or Indemnified Party, such party's relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. If contribution based upon the relative fault of the Indemnifying Party, on the one hand, and the Indemnified Parry, on the other hand, is not available, then the Indemnifying Party shall contribute to the amount paid or payable by Indemnified Parry as a result of Losses in such proportion as is appropriate to reflect the relative benefits received by the Indemnifying Party, on the one hand, and such Indemnified Party, on the other, from the subject V ocusol:mrsszas -21. V offering or distribution. The relative benefits received by the Indemnifying Party, on the one hand, and the Indemnified Party, on the other, shall be deemed to be in the same proportion as the net proceeds of the offering or other distribution received by the Indemnifying Party bears to the net proceeds of the offering or other distribution received by the Indemnified Party. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(0 of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 7. Limitation on Other Registration RieIns. Charter shall not grant to any Person any demand registration right, incidental registration right, or other right that would conflict with any of the tights granted to Stockholders herein. Miscellaneous. 8.1 Notices. (a) All notices, requests, demands, waivers, and other communications under this Agreement shall be in writing and shall be deemed to have been duty given if delivered personally, mailed, certified or registered mail with postage prepaid, or sen by reliable overnight courier, or facsimile transmission, to the address or facsimile number specified for the applicable party on Schedule A attached to this Agreement, or to such other Person, address, or facsimile number as any party shall specify by notice in writing to the other parties. (b) Any notice or other communication to a party in accordance with the provisions of this Agreement shall be deemed to have been given (i) three Business Days after it is sent by certified or registered mail, postage prepaid, return receipt requested, (ii) upon receipt when delivered by hand or transmitted by facsimile (confirmation received), or (iii) one Business Day after it is sent by a reliable overnight courier service, with acknowledgment of receipt requested. Notwithstanding the preceding sentence, notice of change of address shall be effective only upon acetal receipt thereof. (c) Any requirement in this Agreement that notice be given to a Stockholder Group means that notice must be given separately to each member of the Stockholder Group. 8.2 Amendment. Any provision of this Agreement may be amended or modified in whole or in part at any time by an agreement in writing among Charter and each Stockholder, executed in the same manner as this Agreement. No consent, waiver, or similar act shall be effective unless in writing. 8.3 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes all prior agreements and understandings, oral and written, among the parties hereto with respect to the subject matter hereof. 8.4 Counterparts. This Agreement may be executed in we or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. ocusou1128e244 -22- 8.5 Governing Law. This Agreement shall be governed by and interpreted in accordance with the internal laws of the State of [New York], without giving effect to principles of conflicts of laws. 8.6 Assignment. (a) Except n expressly provided in this Section 8.6, the rights of the parties hereto cannot be transferred or assigned and any purported assignment or transfer to the contrary shall be void ab inido. So long as the terms of this Section 8.6 are followed, any Stockholder may transfer any of its rights under this Agreement, without the consent of Charter, to any Person to whom such holder transfers any Registrable Securities or any rights to acquire Registrable Securities, whether such transfer is by sale, gift, assignment, pledge, or otherwise, so long as: (i) such transfer is not made pursuant to an effective Registration Statement or pursuant to Rule 144 or Rule 145 (or any successor provisions) under the Securities Act or in any other manner the effect of which is to cause the transferred securities to be freely transferable without regard to the volume and manner of sale limitations am forth in Rule 144 (or any successor provision) in the hands of the transferee as of the date of such transfer; and (if) in the case of a transfer by any member of the Non - Nathanson Stockholder Group [(other than Falcon Holding Group, L.P.)), such transfer is made (A) to another Stockholder; (B) to any Person that, directly or indirectly, through the ownership ofvoting securities, controls, is controlled by, or is commonly controlled with such Stockholder; (C) to any investment fund formed by an Affiliate of such Stockholder that is commonly controlled with such Stockholder; (D) to a trust for the benefit of the equity owners of such Stockholder and of which the trustee or trustees are one or more Persons that either control, or are commonly controlled with, such Stockholder or are banks, trust companies, or similar entities; (E) any Person for which such Stockholder is acting as nominee or any "at controlled by or under common control with such Person; (F) where the transferring Stockholder is an individual, (i) to the estate, heirs, or legatees of such Stockholder upon such Stockholder's death; (ii) to or for the benefit of any member of such Stockholder's family or to any Person controlled by such Stockholder or one or more members of such Stockholder's family- nr MA in An., charitable foundation, charitable trust, or similar entity; and (iii) [in the case of a transfer by Falcon Holding Group, L.P., such transfer is made to any Person that is a partner of Falcon Holding Group, L.P. at the time of the transfer; and] (iv) in the case of a transfer by any member of the Nathanson Stockholder Group, such transfer is made (A) to another Stockholder; (B) to any Person that owns a controlling equity interest in the transferor at the time of the transfer (or, if the transferor is specifically named in clause (i) of the definition of "Nathanson Stockholder Group," to any Person that owns an equity interest in the transferor at the time of the transfer), (C) to or for the benefit of Moe B. Nathanson or any member of his family or to any Person controlled. directly or indirectly, by Marc B. Nathanson, (D) where the transferring Stockholder is an individual, (i) v ocusm:uratru -23WI - to the estate, heirs, or legatees of such Stockholder upon such Stockholder's death; (ii) to or for the benefit of any member of such Stockholder's family or to any person controlled by such Stockholder or one or more members of such Stockholder's family; or (E) to any charitable foundation, charitable trust, or similar entity. (b) Notwithstanding Section 8.6(a), no Stockholder may assign any of its rights under this Agreement to any person to whom such Stockholder transfers any Registrable Securities unless the transfer of such Registrable Securities did not require registration under the Securities Am. (c) The name and extent of any rights assigned shall be as agreed to between the assigning party and the assignee. No person may be assigned any rights under this Agreement unless Charter is given written notice by the assigning party at the time of such assignment stating the name and address of the assignee, identifying the securities of Charter as to which the rights in question ate being assigned, and providing a detailed description of the nature and extent of the rights that are being assigned. Any assignee hereunder shall receive such assigned rights Sub, to -11 the terms and conditions of this Agreement, including the provisions of this Section 8.6. Subject to the foregoing, Us Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 8.7 Bindine Agreement No Third Party Beneficiaries, This Agreement will be binding upon and more to the benefit of the parties hereto and their successors and permitted assigns. Except as set forth herein and by operation of law, no parry to this Agreement may assign or delegate all or any portion of its rights, obligations, or liabilities under this Agreement without the prior written consent of each other party to this Agreement. (Signature page follows.] ocunou12892w -24- IN WITNESS WiIEREOF, Charter and each of the other parties hereto has executed this Agreement as of the date first above written. DCUB01:113883H -25- r - EXHIBIT D TERMS OF CHARTER LLC OPERATING AGREEMENT Formation of Charter LLC Charter Communications, Inc. ("CCP) will form, prior to the filing of franchise transfer applications under the Purchase and Contribution Agreement, a new limited liability company ("Charter LLC'). Prior to or at the Closing, CCI will contribute to Charter LLC all its membership interests in Charter Communications Holdings, LLC ("Charter Holdings'). At the Closing, Falcon Holding Group, L.P. ("FHGLP") will contribute to Charter LLC a portion of the partnership interest owned by it in Falcon Communications, LP ("Falcon') (referred to as the "Contributed Interest" in Section 2.1(b) of the Purchase and Contribution Agreement) in exchange for a membership interest in Charter LLC represented by units (the "Units'). The contribution by FHGLP is intended to be a tax-free contribution to Charter LLC by FHGLP. Calculation of Units Issued to FHGLP at Closing All Units of Charter LLC will have the same rights, except that there may be differences among the Units as to voting rights. The number of Units issued to FHGLP will be a fraction ofall Units in Charter LLC outstanding on the Closing, the numerator ofwhich will equal the Equity Value as determined under Section 2.3(b) of the Purchase and Contribution Agreement, and the denominator of which will equal the sum ofthe Charter Holdings Value and the Enuity Value. An example ofsue.h eaki lannn m ana,hm hereto as Attachment A. The Units issued to members of Charter LLC will be certificated. "Charter Holdings Value"will equal $11,272,700,000. (1) less liabilities (other than deferred taxes) of Charter LLC and its Subsidiaries (determined on a consolidated basis in accordance with Generally Accepted Accounting Principles) at the Closing, W L1901:I Ir6M0.11saNi999 (2) plus, with respect to assets that are acquired by Charter LLC or its Subsidiaries on or before the Closing, (other than assets described in clauses (3) and (4)) the Product of 17 and the projected operating cash flow of such assets for fiscal year ended December 31, 2000, determined in a manner consistent with information provided to Falcon on May 24, 1999 (the "Cash Flow Projections'), (3) plus, the purchase price (including liabilities assumed) of assets that are acquired by Charter LLC from parties related to CCI (other than assets acquired by CCI or any of its affiliates from unrelated third paries and contributed to Charter LLC on or before the Closing) for a purchase price less than $10,000,000 in the aggregate, (4) plus the value of assets that are acquired by Charter LLC from parties related to CCI (other than assets acquired by CCI or any of its affiliates from unrelated third parties and contributed to Charter LL.0 on or before the Closing and other than assets described in clause (3)), which value shall be determined by the Board of Charter LLC and Jerald Kent in good faith, and (5) plus, with respect to assets that are subject to definitive agreements prior to the Closing, but which have not been acquired by Charter LLC or its Subsidiaries on or before Closing, the product of 17 and the projected operating cash flow of such assets for fiscal year ended December 31, 2000, determined in a manner consistent with the Cash Flow Projections. To the extent that the assets described in clause (5), above, have not been acquired by Charter LLC or its Subsidiaries and the "D-.Lmt"C n o ,fill ,.1, assets are subject are terminated, then the Falcon Holders shall be issued additional Units in Charter LLC in an amount sufficient to provide the Falcon Holders with the same economic interests in Charter LLC that they would have had ifthe Charter Holdings Value determined at the Closing had been reduced by the value of such assets determined in clause (5) above (taking into account distributions from Charter LLC to its members and other events occurring after the Closing but prior to the issuance of additional Units to the Falcon Holders). ocusoidtxssaampadross _2_ If prior to Closing CCI, Charter LLC or Charter Holdings takes an action (other than dispositions of obsolete equipment or other equipment deemed to be unnecessary in the ordinary operations of Charter Holdings' business) that results in a reduction in the assets of Charter LLC or Charter Holdings, than, at FHGLP's option, either an appropriate adjustment (as mutually agreed between FHGLP and CCI) will be made to the number of Units in Charter LLC received by FHGLP to reflect such reduction, or FHGLP will sell the Contributed Interest to CCI and receive Cash Consideration therefor in lieu of Equity Consideration, in accordance with the terms of the Purchase and Contribution Agreement. Transfer of FHGLP Units The Units received by FHGLP will be transferable in accordance with the following: FHGLP will have the right to transfer its Units in Charter LLC to its partners, provided, however, that (i) each such transferee must agree to be bound by the terms of the Charter LLC Operating Agreement, and (it) each such transferee must represent that it is an accredited investor and give such other investment representations and other undertakings as are customarily given by persons acquiring securities in a private placement. If any proposed transferee fails to make such agreements and representations or if the Company reasonably determines that the transfer to such individual would require registration under the Securities Act, then such transferee shall receive cash in lieu of such Units, and the Company shall adjust the cash and equity components of the consideration accordingly; provided, however, that if and to the extent such adjustment causes the equity component of the consideration to be less than the Minimum Contributed Interest, FHGLP shall not be requiicd to uwhiimic time Ntnuallm1 Contributed interest. All Units of Charter LLC will be freely transferable without restriction to Paul G. Allen in accordance with any of the various Put Agreements contemplated by the Purchase and Contribution Agreement. In addition, each holder of Units may transfer all or any portion of its Units to any person or entity to which such holder is permitted to assign its rights under the Registration Rights Agreement (in the form of Exhibit C to the Contribution and Purchase Agreement) in accordance with Section 8.6(a) thereof, provided, however, that (i) each such transferee must agree to be bound by the terms of the Chatter LLC Operating Agreement, (it) each such transferee must (x) represent that ocuav:1126940 1111 16 1999 -3- it is an accredited investor and give such other investment representations and other undertakings as no customarily given by persons acquiring securities in a private placement, or (y) must provide Charter LLC with an opinion of counsel reasonably satisfactory to it that such transfer would not result in a violation of the registration requirements ofthe 1933 Act, and (iii) any such transfer will not result in a violation of the registration requirements of the 1933 Act. Holders of the Units received by FHGLP are referred to as the "Falcon Holders." Contribution of Purchased Interests As soon as reasonably practicable following the Closing, CCI will contribute to Charter LLC the Purchased Interests (for these purposes, the "Purchased Interests" include the assets acquired by CCI pursuant to the Purchase and Contribution Agreement, plus the proceeds of my dispositions of Purchased Interests (including assets exchanged for Purchased Interests), plus the cash flow generated by the Purchased Interests subsequent to Closing and on or prior to the contribution to Charter LLC). Prior to the contribution of the Purchased Interests to Charter LLC, CCI will not dispose of the Purchased Interests for less than fair market value (based upon the terms of any arm's length agreement for such disposition negotiated by CCI). IPO It is the current intent of CCI to effect an initial public offering of stock in a corporation ("PublicCo) that will acquire an interest in Charter LLC (an "IPO'). Each of the Falcon Holders may, and under certain circumstances shall, exchange its Units in Charter LLC for stock in PublicCo. on the terms set forth in lhr nrrFa_n_g. A outlined in Exhibit E to the Purchase and Contribution Agreement. If an initial public offering is effected other than through PublicCo (i. e., through CCI or Charter LLC), the Falcon Holders will have rights and protections that will put them in the same economic position as if the IPO had been effected tbrough PublicCo. ocusoidires4ell rrvissa -4- Dilution for Events Prior to IPO If CCI contributes the Purchased Interests to Charter LLC prior to an IPO, the relative interests of CCI and the Falcon Holders will be adjusted, and additional Units will be issued to CCI, so that CCI and the Falcon Holders will have the same relative interests they would have had if the Purchased Interests had been contributed at Closing at a value equal to the Cash Consideration, taking into account liabilities assumed by Charter LLC in connection with such contribution. To the extent that pursuant to the foregoing, either the assets of Charter LLC or the Purchased Interests are "booked -up" (to reflect a value in excess of their book value immediately prior to the contribution), taxable income and loss of Charter LLC allocated under section 704(c) of the Internal Revenue Code with respect to such adjusted assets will be made in accordance with the "remedial"method. An example of the foregoing is attached hereto as Attachment B. After Closing and prior to an IPO, upon the contribution by CCI (or any affiliate of CCI) of assets to Charter LLC (other than the Purchased Interests), the members' interests in Charter LLC will be adjusted, and additional Units will be issued to CCI (or affiliate) based on the valuation of Charter LLC and the contributed assets determined in good faith by the Board of Charter LLC and Jerald Kent. Prior to an IPO (whether before or after Closing), upon the issuance of Units in Charter LLC to an entity unrelated to CCI (or any affiliate of CCI), and upon the issuance of Units in Charter LLC to employees of Charter LLC in their capacity as employees, the Falcon Holders' interest in Charter LLC will be diluted on a proportional basis with CO. Dilution Upon and After IPO In connection with an IPO, the Falcon Holders' interest in Charter LLC will be diluted on a proportional basis with CCI and any affiliate of CCI. If, after an IPO, CCI contributes the Purchased Interests to Charter LLC, then the Falcon Holders' interest in Charter LLC will be adjusted so as to equal the interest they would have had in Charter LLC if the contribution of Purchased Interests had occuumd prior to the IPO. nCLIa01n126140.111t WIM -5- If, after an IPO, CCI or any affiliate of CCI contributes assets to Charter LLC (other than the Purchased Interests), the Falcon Holders' interest in Charter LLC will be diluted on a proportional basis with PublicCo. Upon the issuance of Units in Charter LLC to an entity unrelated to CCI (or any affiliate of CCI), and upon the issuance of Units in Charter LLC to employees of Charter LLC in their capacity as employees, the Falcon Holders' interest in Charter LLC will be diluted on a proportional basis with CCI. Nondiscrimination In any transactions between Charter LLC and any holders of Charter LLC Units in their capacities as such,, the Falcon Holders must be created in a nondiscriminatory manner to the Units held by CCI, Paul Allen or their affiliates. For instance, any proposed redemption of Units held by CCI, Paul Allen and their affiliates must be offered to the Falcon Holders on the same proportionate terms and conditions offered to such other holders of Units. Tagalong Rights Prior to an IPO, ifPaul Allen disposes ofmore than 25% (cumulatively) ofhis current interests in CCI (or control, irrespective of the amount of interests sold), or if CCI disposes of more than 25% (cumulatively) of its current interests in Charter LLC, (or control, irrespective ofthe amount of interests sold), each of the Falcon Holders will have the right to sell a proportionate share ofits Units on the same economic terms and conditions and for proportionate consideration. Distributions Distributions from Charter LLC shall be made in proportion to the number of Units held by each member. Subject o my liMitations'it,ual'.venoms of Charter LLC or its subsidiaries and subject to applicable law, within 90 days after the end of each fiscal year, Charter LLC will distribute to all holders, in proportion to the number of Units held by them, cash in an amount which, in the reasonable judgment of Charter LLC, is sufficient to pay the federal, state, and local income taxes on each holder's share of Charter LLC's taxable income for such fiscal year at the highest combined marginal rate applicable to the ordinary income of an individual residing r in New York City. .J it W oCuaol:u:6uaulsrzdi9w -6- . 1 Tax Allocations Taxable income and loss of Charter LLC will be allocated in accordance with Units, except as provided in section 704(c) of the Internal Revenue Code. Taxable income and loss of Charter LLC that is allocated under section 704(c) of the Code will be made in accordance with the "remedial" method. Charter LLC will file a Section 754 election with respect to its first taxable year. Charter LLC will not revoke the Section 754 election in effect for itself or for any of the Falcon Companies and will administer the elections so as to reflect (i) gain recognized by the Sellers with respect to the sale of the Purchased Interests and the contribution of the Contributed interest to Charter LLC, and (ii) gain recognized by holders of Units in Charter LLC with respect to dispositions of their Units. The sum of (i) the Cash Consideration allocable (pursuant to Section 2.3(d) of the Purchase and Contribution Agreement) to the partnership interests in Falcon other than the Contributed Interest, (ii) the Equity Value, and (iii) liabilities of the Falcon Companies allocable pursuant to Section 752 of the Code to the partnership interests in Falcon, shall be allocated among the assets of the Falcon Companies that are Tax Partnerships in accordance with the Falcon Allocation Agreement (as described in Section 6.10(h) of the Purchase and Contribution Agreement), and the aggregate gross value of all the membership interests in Charter Holdings (including liabilities of Charter Holdings and its Subsidiaries) shall be allocated among the assets of Charter Holdings and its Subsidiaries in accordance with the Charter Allocation Agreement (as described in Section 6.10(h) of the Purchase and Contribution Agreement). Unl-= othervisercquircd by ap„ lie an , ea Falcon Holders agree to act, and cause their respective affiliates to act, in accordance with the allocations provided herein in any relevant Tax Returns or similar filings. The Falcon Holders shall have typical rights with respect to access to Charter LLC's book and records. As soon as reasonably practicable following the end of each fiscal year, but in no event later than July 15, Charter LLC shall furnish to each Falcon Holder Schedule K -I for such Falcon Holder, and Charter LLC shall famish to Marc Nathanson (and to an; other Falcon Holding requesting such information) a complete copy of Charter LLC's wuaouuuuauprswsw -7- w federal information return (Form 1065) for such fiscal year (as filed) and a schedule setting forth each member's capital account balance as of the end of such fiscal year, provided, however, that for the taxable year of Charter LLC in which the Closing occurs, such information must be famished no later than August 15 following the end of such fiscal year. In addition, Charter LLC shall, upon the request of Marc Nathanson (or other Falcon Holder), promptly provide Marc Nathanson (or such Falcon Holder) with copies oftax-related schedules, workpapers, appraisals, and other documents Governance The Falcon Holders will have no voting rights, except that the operating agreement of Charter LLC cannot be amended in a manner that is adverse to the Falcon Holders and that treats the Units of the Falcon Holden in a discriminatory manner vis a vis the Units held by CCI, Paul Allen or their affiliates, without the consent of Holders owning a majority of the Units adversely affected. Charter LLC will be a manager -managed (and not a member -managed) limited liability company, and the manager(s) will be CCI, PublicCo, and/or their affiliates. ocueouusuaiilsrzvis99 . g. Attachment A Equity Value of Contributed Interest 400,000,000 Charter Holdings Value: Enterprise value of Charter Holdings. based on 17 x2000 EBITDAof currently owned systems 11,272,700,000 Liabilities at Closing (including liabilities of companies acquired after signing and before Closing) (6,159,000,000) Enterprise value of systems acquired akar signing and before Closing, based on 17 x 2000 EBITDA 4,901,100,000 Enterprise value of systems subject to definitive agreements not acquired before Closing, based on 17 x 2000 E61TDA 1,252,900.000 Charter Holdings Value: 9,267,700,000 Total Value of Charter LLC at Closing 9,667,700,000 Percent of Units issued to FHGLP 4.14% Percent of Units issued to CCI 95.86% Total 100.00% M6fl999; 4:31 PM 11324 1 Attachment B Ass moron Cash Conaidemtion for Purchased Interests 1,200,000,000 Indebtedness assumed by Charter LLC in connection with Na ron4ibution of Purchased Interests 700,000,000 CCI's net equity in Purchased Interests 500,000,000 Equity Vatue of Contributed Interest 400,000,000 Charter Holdings Value 9,267.700,000 Results of Operations of Purchased Interests for 6 months Six months' Cash Flow (after interest) 80.000,000 Six months' book depreciation (240,000,000) Six months' book loss (160,000,000) Results of Operations of Contdbuted Intoner and Chatter Holdings for 6 months Six months' Cash Flow (after Interest) 475,000,000 Six months' bank depreciation (1,425,000,000) Six months' book loss (950,000,000) all 52611889; 4:31 PM 1 1132482 1 t1 1 I CM1 rt LLG AX 6k h IfP Charter I I C At CIG5199 M1 tll .C91 tlh FHGLP tlb CCI to IOU Starling capital account balances Gross value of Purchased Interests 1,200.000,000 Liabilities assumed by Charter LLC (700,000,000) Charter Holdings Value 9,267,700,000 Equity Value of Contributed Interest 400,000,000 Stating capital account balances 9.787.700,000 400,004000 10.167,700,000 Percentage Interests 96.07% 3.93% 100.00% Share of 6 months' Book Loss ham Purchased Interests (153,705.558) (6,294,442) (160,004000) Share of 6 months' Book Loss from Contributed Interest and Charter Holdings (912,626,749) (37,373,251) (950.000.000) Ending asphalt account balances 8,701,367,693 356,332,307 9.057,704000 Percentage interest 96.07% 3.93% 100.00% Percentagef Purchased 6 Months LCl 3fteEQ199100 FHGLE law Slating capital account balances Charter Holdings Value 9,267,700,000 Equity Value of Contrbuted Interest 400.000,000 Starting capital account balances 9,267700,000 400,000,000 9.667,700.000 Percentage Interests 95.86% 4.14% 100.00% Share of 6 months' Book Loss from Contributed Interest and Charter Holdings (910,693,857) (39,306,143) (950.000,000) Capital account balances before contribution of Purchased Interests 8,357,006,143 360,693,857 8,717,700.000 95.86% 4.14% 100.00% Book value of Purchased Interests at time of Contribution Gross book value of Purchased Interests 1.40,000,000 Liabilities assumed by Charter LLC (700,000.00) Net book value of Purchased Interests 340.000,000 Increase in value rbook�up") to make capital accounts in 9515.00- 110,867,321 Ending capital account balances 8,807,873,464 360.693,857 9,168,567,321 Percentage interests 96.07% 3.93% 100.00% - Section 704(c) allocations with respect to the 'took -up- will be made in accordance with no 'remedial' method 5126/1999:431 PM 2 1132402_1 EXHH3IT E EXCHANGE AGREEMENT TERM SHEET Certain definitions Charter LLC: the limited liability company formed to acquire the Sellers' parmership interests in Falcon Communications, L.P. and to hold all of Charter's other cable television systems. PublicCo: the entity through which Charter effects an initial public offering of indirect equity interests in Charter LLC, and its successors. Right to exchange Any holder of a membership interest in Charter LLC will have the interests right at any time (subject to the conditions specified in "Conditions to exchange" below) to exchange all or part of its membership interest in Charter LLC for shares ofPublicCo common stack. The shares of PublicCo common stock received in the exchange would be: • of the same class as the shares Of PublicCo common stock that are publicly traded • duly authorized, validly issued, fully paid, and nonassessable • freely tradable and transferable, subject only to restrictions imposed by applicable securities laws • "Registrable Securities" at the time of their issuance for purposes of the Registration Rights Agreement to be entered into pursuant to the Purchase Agreement Conditions to exchange A holder's right to exchange its membership interest in Charter LLC for PublicCo's common cruel, wceld be comd.faneG ou the holder's execution and delivery to PublicCo of such investment . . representations and other undertakings as are customarily given by persons acquiring securities in a private placement. In addition, ifPublicCo reasonably determines that, notwithstanding such investment representations and other undertakings, its issuance of common stock in exchange for any holder's membership interest in Charter LLC must be registered under the Securities Act, then, in lieu of issuing common stock in exchange for such membership interest, PublicCo will purchase or L. cause to be purchased such membership interest for a purchase Price in cash equal to the value thereof, as determined under ' i ocueoin urayss r � "Exchange ratio" below. Mandatory exchange Each holder will agree to exchange its membership interest in upon IPO Charter LLC for PublicCo's common stock immediately prior to PublicCo's initial public offering ifi • PublicCo's initial public offering will occur concurrently with or after the closing under the Purchase and Contribution Agreement; and • the holder has received an opinion of counsel to PublicCo, in customary form, subject to customary exceptions and qualifications and based upon reasonable assumptions and representations ofPublicCo, each holder, and thud parties, that the exchange qualifies under Section 351 ofthe Internal Revenue Code Exchange ratio The exchange ratio will be determined in a mama that preserves the exchanging member's relative ownership interest in Charter LLC. To implement the general principle described above, but subject to any modifications that may be appropriate to implement this principle, the value of the shares of PublicCo common stock received in the exchange will be the same w the value of the membership interest in Charter LLC exchanged for such shares, where the value of the exchanged membership interest would be determined by reference to the value of shares ofPublicCo common stock. Shares of PublicCo common stock would be valued as follows: • shares of PublicCo common stock would be valued at the price to the public of such shares in PublicCo's initial public offering (before any urdaarti,g or b,ekcraso dlacuuats and commissions) if the exchange occurs concurrently with PublicCo's initial public offering • shares ofPublicCo common stock would be valued at the average trading price of such shares for the twenty trading days prior to the exchange if the exchange occurs after PublicCo's initial public offering Regardless of which method is used to value shares of PublicCo _. common stock a membership interest in Charter LLC would be valued by reference to the value used for shares of PublicCo common stock. The parties contemplate that: ocuaomuas9•s -2- • the value of a membership interest in Charter LLC would be the product of the percentage interest represented by such membership interest times the aggregate value of Charter LLC • the aggregate value of Charter LLC would equal the value of PublicCo's membership interest in Charter LLC divided by the percentage interest represented by PublicCo's membership interest in Charter LLC • the value ofPublicCo's membership interest in Charter LLC would equal the sum of (i) the aggregate value of all outstanding shares ofPubficCo common stock, with each share valued as described above, plus (ii) the amount by which the aggregate exercise price of all in -the -money options, warrants, and other similar instruments exercisable or convertible for shares of PublicCo common stock is less than the aggregate value of all PubficCo common stack issuable upon the exemise or conversion thereof Modification of formulas This term sheet does not prescribe the capital structure of either for calculating the Charter LLC or PublicCo and, therefore, equity interests (such as exchange ratio preferred or convertible interests) or liabilities of Charter LLC or PublicCo, or assets of PublicCo other than its interest in Charter LLC may exist that prevent the formulas described under "Exchange ratio" above from preserving an exchanging member's relative ownership interest in Charter LLC. The Exchange Agreement will include appropriate provisions to deal with such equity interests, liabilities, or assets. Registration Rights In addition to the Registration Rights provided in the Registration Rights Agreement in the form of Exhibit C to the Purchase and Contribution Agreement, if the exchange of membership interests in Charter LLC for PublicCo common stock is to occur concurrently with PublicCo's initial public offering and sham of PublicCo stock owned by any stockholder of PublicCo will be included in the initial public offering, then each holder of membership interests in Charter LLC will have the right to sell a proportionate number of shares of PublicCo common stack in the initial public offering on substantially the same terns as are described in Section 3 of the Registration Rights Agreement. nCLINIJ111399-5 -3- EXHIBIT F FORM OF ALLOCATION NOTICE I. Percentege of FHGLP's partnership interest in Falcon represented by the Contributed Interest_% 11. Aggregate Consideration based on Prelinninary Closing Statement $ III. Ailoeadon of Aggregate Consideration based on Preliminary Closing Sustement FHGLP, with respect to the stock of Enslec $1.00 DHN with respect to its interest in Adlink: $1.00 IV, Equity Value: V. Payment of Cash Porton of Closing Payment. Seller Allocation of Remaining Aggregate Considerado. Percentage Sbme of Remaining Aggrega¢ COnsidentiom FHGLP % TCI % FC Trust FHGi % Total $ 100.00% IV, Equity Value: V. Payment of Cash Porton of Closing Payment. FHGLP $ ]wire transfer herout ions] TCI $ - [wire m osfer iostrummosj FC NS $ [wire transfer instructions] `[wife a transfer ims"ttions] TOW $ Vl. Payment to Sellers of Funds From Adjustment Escrow Account: XUB01:11281160 Seller Percentage So. of Esemw Foods FHGLP % TCI % FC Trust % FHGI % TOW 100.00% XUB01:11281160 OPINION OF FALCON'S AND FALCON SELLERS' COUNSEL [Subject to Opinion Committee Review] [Closing Date] Charter Communications, Inc. 12444 Powerscourt Drive Suite 100 St. Louis, Missouri 63131-0555 EXHMITG•1 Re: Purchase Agreement dated as of May _, 1999, by and among Charter Communications, hie., Falcon Communications, L.P., Falcon Holding Group, L.P., TCI Falcon Holdings, LLC, Falcon Cable Trust, Falcon Holding Group, Inc., and DHN Inc. Ladies and Gentlemen We have acted as special counsel for Falcon Communications, L.P., a California limited partnership ("Falcon"), Falcon Holding Group, L.P., a Delaware limited partnership ("FHGLP"), Falcon Cable Trust, a California trust ("FC Trust"), Falcon Holding Group, Inc., a California corporation ("FHGI"), and DHN Inc., a California corporation ("DHN") (FHGLP, FC Trust, PHGI and DHN sometimes referred to herein as "Falcon Sellers"), in connection with the transactions contemplated by the Purchase Agreement dated as of May _ 1999 (the "Agreement"), by and among Charter Communications, Inc., a Delaware corporation ("Buyer"), Falcon, TCI Falcon Holdings, LLC, and Falcon Sellers. This opinion is rendered to you in accordance with Section 8.2(f) ofthe Agreement. Capitalized terms used herein without defiriticr that are defined in the Agreement shell have The some meanings as In the Agreement. In our capacity as such counsel, we have examined (a) the Agreement, (b) [the Adjustment Escrow Agreement refected to in the Agreement] [(ifreguired pursuant to Section 2.5 ofthe Agreement)], (c) [the Registration Rights Agreement referred to in the Agreement,] [if entered Into at Closing] (d) the Charter LLC Operating Agreement referred to in the Agreement, [ifentered into at Closing] (e) the Exchange Agreement referred to the Agreement [fentered into at Closing] (together with the Agreement, the Adjustment Escrow Agreement, the Registration Rights Agreement, and the Charier LLC Operating Agreement, the "Transaction Documents"), (f) the certificate oflimited partnership and the partnership agreement of each of Falcon and FHGLP, the trust instrument of FC Trust, and the Certificate of Incorporation and Charter Communications, Inc. [Closh,g Date] Page 2 bylaws of each of FHGI and DHN, in effect as of the date hereof and in the form presented to us by an officer of FHGI (with respect to Falcon, FHGLP, and FHGI), the trustee of FC Trust, and an officer ofDHN, respectively (the "Organizational Documents"), and (g) the records of proceedings and actions of Falcon and Falcon Sellers, in the form certified to us by an officer of FHGI (with respect to Falcon, FHGLP, and FHGI), the m stee of FC Trust, and an officer of DFIN, respectively, to have been duly adopted and to be in full force and effect, without revocation, rescission, amendment or modification. We have assumed without investigation the genuineness of all signatures, the legal capacity of natural persons, Lie authenticity of all documents submitted to us as originals, the conformity with originals of all documentation submitted to us as telecopied, certified, photostatic or reproduced copies and the authenticity of the originals of such documents. We have also assumed, but not verified, that the Transaction Documents and all other documents executed by a party other than Falcon and Falcon Sellers were duly and validly authorized, executed and delivered by each such party, that each such parry has the requisite power and authority to execute, deliver, and perform such documents, and that such documents are legal, valid and binding obligations of each such party and are enforceable against each such party in accordance with their respective terms. With respect to questions of fact, we have relied, without inquiry or verification by us, solely upon (a) written and oral statements ofofficers of Falcon, (b) the representations and warranties ofthe parties and other statements in the Transaction Documents and in the other documents and instruments executed and delivered in connection therewith and (c) certificates of officers of Falcon and of public officials, and we do not opine in any respect as to the accuracy of any such facts. We have conducted no investigation whatsoever of any factual matter. We have not examined the records of any other governmental agency (other than those related to the opinion set forth in paragraph 1 hereof) and have not performed a docket search ofanyjudicial body. Certain of the statements in our opinions given herein are qualified by the phrase "to amknowledge." Such qualification means that none ofthe attorneys in our firm involved in representing Falcon or Falcon Sellers in these tmnsactions ties actual knowledge that the statement is false. Such term does not include any knowledge ofother attorneys or any constructive or imputed notice of any matters or items of information and is not intended to state that we have actual knowledge offacts that support the accuracy of any such statement. The legality, binding effect and enforceability of the Transaction Documents are subject to limitations imposed by (i) bankruptcy, insolvency, reorganization, moratorium, or other laws and related court decisions ofgeneral applicability relating to or affecting creditors' rights generally, and (ii) the application of general equitable principles. MOIMN�3 11 Charter Communications, Inc. [Closing Date] Page 3 In addition, without limitation of my of the foregoing, we express no opinion herein as to (i) any provision of the Transaction Documents that provides for indemnification to the extent such provision may be limited by applicable statutory or decisional law, including federal and state securities laws and the public policies embodied therein, or (ii) any consents of third panics that may be required in connection with the execution, delivery, and performance of the Transaction Documents or the effects of the failure to have obtained any such consents that may be required. Based upon the foregoing, and subject to the additional assumptions, limitations, qualifications and exceptions set forth herein, we are of the opinion that: 1. Falcon is a limited partnership duly farmed, validly existing and in good standing under the laws of the State of California. FHGLP is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware. FC Trust is a trust duly formed and validly existing under the laws of the State of California. FHGI is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California. DFIN is a corporation duly formed, validly existing and in good standing under the laws of the State of California. Based solely upon a review of the Organizational Documents, each of Falcon and Falcon Sellers has all requisite partnership, trust or corporate (as the case may be) power to own, lease and operate each of its properties and to conduct each of its business in all material respects w presently conducted. 2. Each of Falcon and Falcon Sellers has all requisite partnership, trust or corporate (as the case may be) power and authority to execute, deliver and perform the Transaction Documents to which each is a party. 3. The execution, delivery and performance by Falcon of the Transaction Documents to which it is a many and the consurrmstion pf the t'+tsactiens contemplated th,-6} have been duly authorized by all necessary limited partnership action on the part of Falcon. The Transaction Documents to which it is a party have been duly executed and delivered by Falcon and constitute the legal, valid and binding obligation of Falcon enforceable against Falcon in accordance with their respective terms. ._ 4. The execution, delivery and performance by each of the Falcon Sellers of the Transaction Documents to which each is a party and the consummation of the transactions contemplated thereby have been duly authorized by all necessary partnership, trust or corporate (as the case may be) power on the pan of each such Falcon Seller. The Transection Documents ' to which each such Falcon Seller is a party have been duly executed and delivered by each such mcoinzvso-rn Charter Communications, Inc. [Closing Date] Page 4 Falcon Seller and constitute the legal, valid and binding obligations of each such Falcon Seller enforceable against each such Falcon Seller in accordance with their respective terms. 5. The execution, delivery and performance by Falcon of the Transaction Documents to which it is a parry do not conflict with the Organizational Documents of Falcon. The execution, delivery and performance by each Falcon Seller of the Transaction Documents to which it is a party do not conflict with the respective Organizational Documents of each such Falcon Seller. Our opinion is limited to maners arising under the laws of the District of Columbia, the California Revised Limited Partnership Act, the Delaware Revised Uniform Limited Partnership Act, the California General Corporate Law, the California Trust Law, and the federal laws of the United States of America (collectively, the "Applicable Law"); provided, however, that the term "Applicable law" includes only those laws and regulations that a lawyer exercising customary professional diligence would reasonably recognize as being directly applicable to the transactions contemplated by the Agreement and does not include laws of the type described in Section 19 of the Legal Opinion Accord of the American Bar Association Section of Business Law (1991), the Communications Act of 1934, the Cable Television Consumer Protection end Competition Act of 1992, or the Copyright Act of 1976 and the rules and regulations of the Federal Communications Commission and U.S. Copyright Office thereunder. We advise you that we are not admitted to practice law in the State of New York. Our opinions are given as if the Agreement and the Transaction Documents were governed by the laws of the District of Columbia. You recognize that the express terms of such documents provide that they are to be governed by the laws of the State of New York, which may be different from the laws of the District of Columbia in certain relevant respects. We express no opinion whatsoever as to any other laws or regulations or as to laws relating to choice of law or conflicts of law principles. We do not purport to be experts on the laws of the State of Delaware or die Sure of California. This opinion is given to you as of the date hereof and we assume no obligation to advise you of my changes to any matter, fact or event arising subsequent to the date hereof which would cause us to modify our opinion, in whole or in part. Our opinions are based on statutory, and regulatory provisions and judicial decisions in effect at the date hereof, and we do not opine with respect to any law, regulation, role or governmental policy which may be enacted or adopted after the date hereof. This opinion is rendered only to you and is solely for your benefit in connection with the Agreement and the transactions contemplated thereby and is not to be quoted in whole or in part or otherwise referred to in any of your financial statements or public releases, nor is it to be filed with any governmental agency or other person without the ocoinaaw.an Charter Communications, Inc. [Closing Date] Page 5 ... .. _ prior written consent of a member of this firm. This opinion may not be relied upon by any person other than you or for any other purpose without our prior written consent. Very billy yours, DOW, LOHNES & ALBERTSON, PLLC By: Member ocoirzssawrn 1999 (Addressee] Re: Falcon Transaction Ladies and Gentlemen: EXHIBIT G-2 Reference is made to the Purchase Agreement (the "Agreement") dated as of 1999, by and among . This letter is being delivered to you pursuant to Section _ of the Agreement. As communications counsel for Seller, we me engaged in the representation of Seller before the Federal Communications Commission ("FCC") and the U.S. Copyright Office in connection with its cable television business in the communities identified in Schedule A hereto (the "Systems"). We have examined a copy of the Agreement and such records, certificates and other documents and have considered such questions of law as related to Seller and the Systems as we have deemed necessary or appropriate for purposes of this opinion. This opinion is limited to the Communications Act of 1934, as amended (the "Communications Act"), the rales and regulations of the FCC (the "FCC Regulations"), Section 11 I of the Copyright Act of 1976, 0 amended (17 U.S.C. §I11) (the "Copyright Act"), and the rules and regulations of the U.S. Copyright Office pertaining to Section I 13, as applicable to the Systems. In rendering this opinion, we have assumed the genuineness of signatures on documents and the conformity to the original of all copies examined by or submitted to us of photocopies or conformed copies. As to various questions affect in connection with this opinion, we have relied upon examination of available files of our office, those of the FCC and the U.S. Copyright V Office, and pertinent statements and representations of officers, directors and responsible representatives of Seller. We have not undertaken an independent field investigation to verify the accuracy of this information, mid express no opinion regarding technical matters or matters that would require on -scene knowledge of the Systems' operations, technical or engineering matters, or local franchising matters. W Based upon and limited by the foregoing and except as set forth in Schedule D hereto. we are of the opinion that, as of the date set forth above: I . Seller holds all licenses, permits and authorizations required from the FCC to operate the Systems in the manner in which we have been advised by Seller that they are currently being operated, which licenses, permits and authorizations are listed in Schedule B hereto. Each such license, permit and authorization has been issued by the FCC, remains in full force and effect, and the transfer thereof to Buyer has been approved by the FCC, to the extent such approval is required. 2. The Systems have authorization to use the frequencies in the aeronautical and navigational bands (108-137 and 225400 MHZ) set forth in Schedule C. Based on information provided to us by Seller, these are the only aeronautical authorizations necessary at this time to enable the Systems to operate in compliance with FCC regulations. 3. To the extent required, (i) registration statements for the Systems' communities; (ii) the most recent FCC Form 320 reports (showing complying index scores); (iii) Form 325 reports required after January 1, 1999; (iv) 1992-1998 Form 395A reports; and (v) Form 159s and accompanying regulatory fees for the three most recent filing years, are on file with the FCC The Systems have all received EEO certification from the FCC for 1992 through 1998. We express no opinion regarding the accuracy or completeness of any such statements, reports or forms. 4. There is no FCC judgment, decree or order which has been issued against Seller with respect to the ongoing operations of the Systems, nor is there any FCC action, proceeding or investigation (including, but not limited to most carry complaints and commercial leased access complaints, but excluding rate complaints and rate appeals) pending or, to our knowledge, threatened against Seller with respect to the Systems. 5. All Statements of Account required under Section 111 ofthe Copyright Act, together with all royalty fees reported as due thereunder, have been filed by Seller for the Systems for the semi-annual accounting periods of 1996/1 through the date hereof, to the extent due. We have not reviewed the Systems' historic signal carriage, nor have we reviewed the royalty fee treatment, calculation or figures and we express no opinion as to the accuracy thereof. -- aftew a inquiry we are not aware otany court proceedings regarding such Copyright filings. It is possible that there may be matters pending before the Copyright Office relating to Copyright filings, the Systems or the Seller of which we do not have knowledge because such matters have not yet been incorporated into the available public files of the Copyright Office. 6. To the best of our knowledge after due inquiry, there have been no inquiries, which have not been resolved, received from the U.S. Copy fight Office or any other party which question the 199611-199911 Statements of Account or any copyright payment made by the Systems for those accounting periods, nor are we aware of any claim, action, or demand under Section 111 of the Copyright Act, other than matters relating to the cable television industry generally, for copyright infringement or for non-payment for royalties pending against the Systems. 7. Except for my necessary FCC approvals which have been obtained, the execution, delivery and performance of the Agreement does not require the approval of the FCC, will not result in any violation of the rules and regulations of the FCC, and will not cause any forfeiture or impairment of any FCC license, authorization or permit of the Seller, provided that Buyer complies with all FCC regulations, including applicable ownership regulations. This opinion has been prepared solely for your use and the use of your lenders in connection with the closing of transactions under the Agreement and may not be relied upon by, filed with or famished to any other person or entity without the prior written consent of this firm. Fleischman and Walsh, L.L.P. saes". W Y Exhibit G-3 Form of Legal Opinion of Sherman & Howard L.L.C. [Closing Date] Charter Communications, Inc. 12444 Powerscomt Drive St. Louis, Missouri 63131 V. Ladies and Gentlemen: - We have acted as counsel to TCI Falcon Holdings, LLC, a Delaware limited liability company ('TCI"), in connection with the Purchase and Contribution Agreement dated as of May 26, 1999 (the "Purchase Agreement"), between Charter Communications, Inc. ("Chance"), Falcon Communications, L.P., Falcon Holding Group, L.P., TCI, Falcon Cable Trust, Falcon Holding Group, Inc., and DHN, Inc. Capitalized terms not defined but used herein shall have the meanings given to them in the Purchase Agreement. This opinion is delivered at the request of TCI and pursaant to Section 8.2(f) of the Purchase, Agreement. We have examined (a) executed copies of the Purchase Agreement, (b) [specify each instrument of conveyance, assignment or transfer and instrument of assumption required by the Purchase Agreement at Closing] and (c) the certificate of formation and limited liability company agreement of TCI. The documents referred to above in clauses (a) and (b) are hereinafter referred to as the "Transaction Documents." We also have examined such other documents and certificates of public officials and representatives of TCI as we have deemed necessary as a basis for the opinions expressed herein. As to all eacdi.,,� of feet material .o such cy tiens,'a- - - -alis' upon urs ruswupuuns set forth herein and the representations contained in the Transaction Documents and the certificates ._ and representations of representatives of TCI or of public officials. We assume that there are no agrecments, understandings or negotiations between the parties .. not set forth in the Transaction Documents that would modify the terms or rights and obligations of the parties thereunder. We express no opinion as to the laws ofanyjurisdiction other than the State of Colorado and as set forth in the Delaware Limited Liability Company Act. r Based on the foregoing and subject to the qualifications set forth below, it is our opinion that: jY t Charter Communications, Inc. [Closing Date] Page 2 I. TCI is a limited liability company which has been duly formed under the laws of the State of Delaware. TCI has all requisite power and authority to own and use the assets owned or used by it to conduct its business as currently conducted. 2. TCI has all requisite power and authority to execute and deliver, and to perform its obligations under, and to consummate the transactions contemplated by the Purchase Agreement. The execution and delivery by TCI of, the performance by TO of its obligations under, and the consummation by TCI ofthe transactions contemplated by, the Purchase Agreement have been duly and validly authorized by all requisite action by or on behalf of TCI. The Transaction Documents have been duly and validly executed and delivered by TCI. 3. The execution and delivery by TCT, the performance by TO of its obligations under, and the consummation by TCI of the transactions contemplated by, the Purchase Agreement do not and will not conflict with or violate any provision of the certificate of formation or limited liability company agreement of TCI. This opinion is rendered solely for your information in connection with the transaction described above and may not be relied upon by any other person for any purpose without our prior written consent. Very truly yours, [S&H Draft] N:`[ RT our Lr1M lu" EXHIBIT B RELEASE THIS RELEASE (this "Release") is executed as of , 1999, by the persons executing this Release below, pursuant to Section 9.2(i) of the Purchase and Contribution Agreement, by and among the Sellers listed on he signature pages thereto, Falcon Communications, L.P. ('Falcon"), and Charter Communiestiona Inc. ("Buyer") dated as of May '-3999 (the "Purchase Agreement"). Defirms ned teused herein and not otherwise defined herein shall have the meanings at Cath in the Purchase Agreement. Each signory hereto, severally and notjoindy, on behalf of itself or himself and each of its officer directors, stockholder,, affiliates, members and/or partners, hereby releases and discharges each of the Falcon Companies and their respective Subsidiaries and affiliates and each of their respective officers, directors, employees and agents (collectively, the "Released Parties"), from all actions, causes ofaction, suits, debts, sums of money, liabilities and claims, and any past, present or future obligation (other than obligations under the Purchase Agreement or any of the other Transaction Documents, including the release of claims against Sellers pursuant to Section 6.13 of she Purchase Agreement, and obligations accrued on the books and records of the appropriate Falcon Company or Subsidiary in the ordinary course of business), whether known or unknown, in law or in equity (collectively, "Claims"), which such signatory or such signatory's heirs, executors, administrators, successors, assigns and affiliates; ever had, now have or hereafter may have for, upon or by reason Of MY matter, cause, event or thing whatsoever from the beginning of the world to the Closing Date, including, without limitation, any Claims relating to such signatory�s rights or status as an equity holder of any Falcon Company or any Subsidiary of a Falcon Company or any claim of such signatory to a fee or other compensation from any Falcon Company in respect of the transactions contemplated by the purchase Agreement, except as contemplated by the Purchase Agreement at any of the other the Transaction Documents. Notwithstanding anything in this Release to the contrary, Buyer acknowledges and agrees thin nn signatory is releasing any Claim that arises tram any matter, cause, event or thing whatsoever nca,mog ager the Cloelcg Dare 8j4 nothing in raiz release shall be deemed to waive, release, alter or Otherwise impair any signatory's rights under the purchase Agreement (including without limitation, any signatory's right to enface¢ the release of claims against the Released Parties under Section 6.13 ofthe purchase Agreement and its rights b exculpation and indemnification under Section 6.13 ofthe Purchase Agreement) or any ofthe other Transaction Documents (it being understood [bat the Tronsacdan Documents will each be governed by its reapecdve terns). oanm a, u It is expressly understood that Section 1542 ofthe Civil Code ofCslifumia provides as follows: "Section 1542 (Certain Claims Not A?ected by General Release). A gencal release does not extend ro claims which the creditor does not know or ospn, to exist in his favor at the time ofexeculing the release, which if known by him must have materially affected his settlement with the debtor.° The provisions of said Section 1542 ofthe Civil Code of California and the comparable provisions ofosher state law are hereby waived by each ofthe undersigned. [SIGNATURES APPEAR ON FOLLOWING PAGE] nmrm ai -2- Each Seller has caused this Release to be duly executed as of the date first above written. FALCON HOLDING GROUP, LP By: Falcon Holding Group, Inc., General Panner By. _ Title: TCI FALCON HOLDINGS, LLC By: Name — —_— Tide: FALCON HOLDING GROUP, INC. By: Tine: FALCON CABLE TRUST' By: Name: -- Tide: DHN INC By: _ Name: Tile: EXHMIT 1 [FORM OF OPINION—HELL & MANELLA LLP] [Certain portions of this opinion may be delivered by Paul, Hastings, Jauofsly and Walker] To the Sellers listed on the signature pages w the Purchase Agreement Re: Charter Comm mications Inc. Gentlemen We have acted as counsel to Charter Communications, Inc., a Delaware corporation ("Charter"), Charter LLC, a [Delaware] limited liability corporation (the "LLC'), [PublicCo., a [Delaware] corporation ("PublicCo." and collectively with Charter and the LLC, the "Charter bntities" )) and Paul G. Allen, an individual ("Allen"), in connection with the Contribution and Purchase Agreement dated as of May — 1999 (the "Purchase Agreement'), by and among Chartu, Falcon Communications, LP., Falcon Holding Group, LP. ("FHGLP" ), TCI Falcon Holdings, LLC, Falcon Cable Trust, Falcon Holding Group, Inc. and DAN Inc. (collectively, the "Sellers") and the transaction contemplated thereby. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the purchase Agreement. For the purpose of rendering this opinion, we have reviewed such matters of fans and law and such documents as we have deemed necessary or relevant as a basis for this opinion. In our review, we have examined, relied upon and assumed to be complete and correct the representation and warranties contained in the purchase Agreement and in certificates delivered in connection therewith as to matters of fact (orher than facts contiwtine conclusions or law), including the representation and warranties ofFHGLP and its direct and indirect equity holders as to its ortheir status as accredited investors and their investment intentions with respect to the interests and stock ofPublicCo. In making such examination; we have made certain customary assumptions, such as the legal capacity of natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the lack of my undisclosed modification; waivers or amendments to any agreements reviewed by us, the confonnity to authentic originals of all documents submitted to us as certified or photostatic copies and the truth and accuracy of factual statements contained in such documents and certificates. We have also assumed that (a) with respect to all patties to agreements or instruments relevant hereto other than Allen and each Charter Entity, such parties had the requisite power and authority to acetate, deliver and perform such agreements or instrument; that such agreements or insuuments have been duly authorized by all requisite action, executed and delivered by such parties and that such agreements or instruments are the valid, binding and enforceable obligation of In om _,1999 Page 2 such parties, and (b) each such party is duly organized and validly existing under the taws of itsjurisdiction of organization. Our opinions expressed herein are limited to the laws of the State of California, the corporate law of the State of Delaware, each as in effect on the date hereof and we do not express herein any opinion as to any other law. We note that the purchase Agreement purports to be governed by the internal substantive laws ofthe State ofNew York and we express no opinion as to enforceability of that provision. Furthermore, for purposes of rendering the opinions set forth in Paragraphs 5, 7 and 9 below, xve have, at your request, assumed that the laws of the State ofNew York are identical to the corresponding laws of the State of California in all pertinent respects. We note, however, that we have not compared the laws of the State of California with the laws of the State of New York nor are we qualified to do so. Based upon the foregoing and subject to the assumptions, limitations, qualifications and exceptions set forth herein, we are of the opinion that: 1. Charter is a corporation duly incorporated. validly existing and in good standing under the laws of the State of Delaware, and has the corporate power and authority to conduct its business at now being conducted by it. 2. The LLC has been duly organized and is validly existing and in good standing under the laws of the Sate of Delaware, with full power and authority to conduct its business as it is now being conducted. 3. [PublicCo is a corporation duly incorporated, validly existing and in good sanding under the laws ofthe Sate of Delaware, and has the corporate power and authority to conduct its business as now being conducted by it.] 4. The execution and delivery by Charter of the purchase Agreement, the Charter LLC Operating Agreement and each related agreement under the purchase Agreement to which it is a party (collectively, the "Documents") and the performance cf in obligations thereunder will not conflict with, violate or constitute a breach by it of, or _ constitute a breach or default under the Certificate of incorporation or Bylaws of Charter. Charter has the corporate power and authority to enter into each of the Purchase Agreement, the Charter LLC Operating Agreement and the other Documents to which it is a party and to carry out the transactions contemplated thereby. 5. Each of the Purchase Agreement, the Charter LLC Operating Agreement and the other Documents has been duly authorized, executed and delivered by Charter and is enforceable against Charter in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the y enforcement of creditors' rights generally and subject to usual equitable principles, including without limitation: (i) the possible availability of specific performance, injunctive relief or any other equitable remedy and (ii) concepts of materiality, reasonableness, good y faith and fair dealing. isaunt d 1999 Page 3 6. rfhe execution and delivery by PublicCo of the Registration Rights Agreement, the Exchange Agreement and each of the related documents to which it is a parry (collectively, the "PublicCo Documents") and the performance of its obligations thereunder will not conflict with, violate or constitute a breach by it of; or constitute a breach or default under (a) the Certificate of Incorporation or Bylaws of PublicCo, PublicCo has the corporate power and authority to enter into the Registration Rights Agreement. the Exchange Agreement and each of the other PublioCo Documents and to carry out the transactions contemplated thereby.] [If Closed after IPO] 7. Each of the Registration Rights Agreement, the Exchange Agreement and the other PublicCo Documents has been duly authorized, executed and delivered by PublicCo and is enforceable against PublicCo in accordance with its terns, except as may be limited by applicable bardmtptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights generally and subject to usual equitable principles, including without limitation: (i) the possible availability of specific performance, injunctive relief or any other equitable remedy and (ii) concepts of materiality, reasonableness, good faith and fair dealing. 8. Allen has taken all necessary action to appoint, and has appointed, William Savoy as Allen s attorney-in-fact with authority to execute on behalf ofAllen all documents to be executed by Allen in connection with the Purchase Agreement. 9. The Put Agreement has been duly exerted and delivered by or on behalfof Allen and constitutes the valid and binding obligation of Allen and is enforceable against Allen in accordance with its terms, except as may be limited by applicable bardauptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights generally and subject to usual equitable principles, including without limitation: (i) the possible availability ofspecific perfomsance, injunctive relief or any other equitable remedy and (ii) concepts ofmateriality, reasonableness, good faith and fair dealing, 10. The [Equity Consideration] has been duly and validly authorized and, when certificates muster have been duly executed, delivered and paid for in accordance with the Purchase Agreement, will be duly and validly issued, fully paid and nonassessable. For the purposes of our opinion expressed in Paragraphs 1, 2 and 3 above with respect to good sanding, we are relying solely on certificates of seems and good standing issued, within the las thirty days, by the appropriate governmental agencies of the State of Delaware, and we express no opinion with respect to such matters beyond the dates as of which such certificates were issued. The foregoing opinions are subject to the following qualifications: (a) The enforcement of my rights or remedies is or may be subject to an implied duty on the part of the parry seeking to enforce such rights to take action and make iaruor __1999 Page 4 detemtinations on a reasonable basis and in good faith and to act in a commercially reasonable manner, to the extent required by applicable law. (b) We express no opinion as to the enforceability of prospective releases or releases ofunlatown claims. prospective waivers of tights to notice or a hearing or other rights granted by constitution or statute, or provisions purporting to relieve parties of the consequences of their own negligence or misconduct, provisions gmmirxg indemnity rights, rights of contribution or similar rights (or any guaranty thereof), or provisions purporting to establish evidentiary standards, or provisions purporting to establish noncompetition or nonsolicitation wvonmncs. (c) The enforceability of any of the Documents, thePublicCo Documents and the Put Agrement (collectively, the "Transaction Documents") may be limited by general principles of contract; law, which include (i) the unenforceability of provisions to the effect that provisions therein may only be amended or waived in writing to the went that an oral agreement modifying such provisions has been entered into, (it) the general rule that, where less than all of an agreement is enforceable, the balance is enforceable only when the unenforceable portion is not an essential part of the agreed exchange, (iii) the exercise of judicial discretion regarding the determination of damages and entitlement to anomeys' fees and other costs, and (v) the possible right of a parry that bas materially failed to render or offer performance required by a contractw cure that failure, unless pemihting a cure would unreasonably hinder the aggrieved party from malting substitute arrangements Cor performance or it was important in the circumstances to the aggrieved party that performance occur by the date Aged in such contract. (d) We express no opinion as to(1)any choice of law provision contained in any of the Transaction Documents, (2) any provision purporting to consent to the jurisdiction of or venue in any particular court (including a federal court sitting in diversity) contained in any of the Transaction Documents, (3) the provisions of my Transaction DQcument that purport to provide for a method of service of process that is inconsistent with applicable law or rules of the relevant court, (4) any provision of the Transaction Dowmetns urovidinn for the naymem of a higher r••• of'r••--s, _ter a.c.W late charges or similar payments (or any guaranty thereof) to the extent that a court may End that such payments constitute a penalty, or (5) any provision that purports to bind any party to agree to conclude an agreement at a future date. (e) We express no opinion herein as to any matter arising under or involving (1) the Communications Act of 1934 or the Federal Communications Act of 1976 or the rules and regulations promulgated under such Acts, (2) any other cable franchise or cable finnchise authority or related statute or regulation or (3) any sate public utility Iaw or commission or any matters related thereto. We express no opinion with respect to any federal or state antitrust law or unfair competition laws, including, without limitation, the HSR Act. We express no opinion herein with respect to the application ofor compliance with any federal or stare securities laws or regulations (including without limitation any ` t Sling or notice requirement thereunder),and for purposes of this opinion have assumed V compliance by all partes with such laws and regulations. N ussow -1999 Page 5 This opinion is being provided to you pursuam to Section 8.3(d) of the Purchase Agreement and may not be relied upon by any other person for any other purpose or in any other contra without ourprior written consent. This opinion deals only with the speck legal issues it explicitly addresses. Accordingly, the express opinions set forth show concerning a particular legal issue do not address any other matters. vaytruly yours, Ircll @. Manella LLP �svam