Exhibit 10.1

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

CHARTER COMMUNICATIONS HOLDINGS, LLC

a Delaware Limited Liability Company

Dated as of May 18, 2016

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IMPORTANT NOTE

THE UNITS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY OTHER APPLICABLE SECURITIES LAWS. SUCH UNITS MAY NOT BE SOLD, ASSIGNED,
PLEDGED OR OTHERWISE TRANSFERRED AT ANY TIME WITHOUT EFFECTIVE REGISTRATION
UNDER SUCH ACT AND LAWS OR AN EXEMPTION THEREFROM.

THE UNITS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT ARE ALSO
SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED HEREIN, AND THE COMPANY
RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH UNITS UNTIL SUCH TRANSFER IS
IN COMPLIANCE HEREWITH.

 

 

 

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TABLE OF CONTENTS

 

          Page  

Article I - DEFINITIONS

     2   

SECTION 1.1

   Definitions      2   

SECTION 1.2

   Terms Generally      19   

Article II - GENERAL PROVISIONS

     20   

SECTION 2.1

   Formation      20   

SECTION 2.2

   Name      20   

SECTION 2.3

   Term      20   

SECTION 2.4

   Purpose; Powers      21   

SECTION 2.5

   Registered Office; Registered Agent; Principal Office; Other Offices      21
  

SECTION 2.6

   No State-Law Partnership      21   

Article III - UNITS

     21   

SECTION 3.1

   Authorized Units; Certificates      21   

SECTION 3.2

   Capital Structure of the Company and New Charter      23   

SECTION 3.3

   Optional Conversion of Convertible Preferred Units      25   

SECTION 3.4

   Other Conversion or Redemption of Convertible Preferred Units      38   

SECTION 3.5

   Automatic Exchange/Conversion of Units Pursuant to a Foreclosure.      41   

SECTION 3.6

   General      42   

SECTION 3.7

   Voting      42   

Article IV - MANAGEMENT

     42   

SECTION 4.1

   Manager      42   

SECTION 4.2

   Members      43   

SECTION 4.3

   Officers      43   

SECTION 4.4

   Management Matters      45   

SECTION 4.5

   Liability of Members      45   

SECTION 4.6

   Exculpation; Indemnification by the Company      46   

SECTION 4.7

   Manager Expenses      48   

SECTION 4.8

   Exclusivity of Business      48   

 

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Article V - ALLOCATIONS; DISTRIBUTIONS

     50   

SECTION 5.1

   Capital Account Creation      50   

SECTION 5.2

   Capital Account Negative Balance      50   

SECTION 5.3

   Allocations of Net Income and Net Loss      50   

SECTION 5.4

   Distributions      56   

Article VI - RESIGNATION; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS;
ADMISSION OF NEW MEMBERS

     60   

SECTION 6.1

   Member Withdrawal      60   

SECTION 6.2

   Dissolution      61   

SECTION 6.3

   Transfer by Members      62   

SECTION 6.4

   Admission or Substitution of New Members      63   

SECTION 6.5

   Right of First Refusal; Right of First Offer and Matching Right.      64   

Article VII - REPORTS TO MEMBERS; TAX MATTERS

     68   

SECTION 7.1

   Books of Account      68   

SECTION 7.2

   Reports      68   

SECTION 7.3

   Fiscal Year      69   

SECTION 7.4

   Certain Tax Matters      69   

SECTION 7.5

   Certain Business Combinations      74   

Article VIII - MISCELLANEOUS

     74   

SECTION 8.1

   Exhibits      74   

SECTION 8.2

   Governing Law; Severability; Selection of Forum; Waiver of Trial by Jury     
74   

SECTION 8.3

   Successors and Assigns; No Third-Person Beneficiaries      75   

SECTION 8.4

   Confidentiality      75   

SECTION 8.5

   Amendments      75   

SECTION 8.6

   Notices      76   

SECTION 8.7

   Counterparts      76   

SECTION 8.8

   Non-Circumvention      76   

SECTION 8.9

   Entire Agreement      76   

SECTION 8.10

   Specific Performance      76   

SECTION 8.11

   Control of Subsidiaries      77   

 

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Exhibits and Schedules

 

Schedule I    Members Exhibit A    Example Calculation of Assumed Tax Rate
Exhibit B    Form of Convertible Preferred Unit Certificate Exhibit C    Form of
Joinder Agreement Exhibit D    Form of Conversion Notice Exhibit E    Structure
Plan Exhibit F    Common Tax Distribution and Tax Loan Calculation Example
Exhibit G    Transferee Tax Representations Exhibit H    Make-Whole Table
Exhibit I    Preferred Unit Valuation Assumptions

 

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CHARTER COMMUNICATIONS HOLDINGS, LLC

A Delaware Limited Liability Company

 

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

Dated as of May 18, 2016

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (as amended from
time to time in accordance with its terms, this “Agreement”) of Charter
Communications Holdings, LLC, a Delaware limited liability company (the
“Company”), is made as of the date first written above, by and among:

 

  (i) Charter Communications, Inc., a Delaware corporation (formerly known as
CCH I, LLC) (“New Charter”);

 

  (ii) CCH II, LLC, a Delaware limited liability company (together with any
Person or Persons in the Charter Group to whom CCH II, LLC transfers any Units
or who otherwise holds any Units, the “Charter Member”);

 

  (iii) Advance/Newhouse Partnership, a New York partnership (“A/N”);

 

  (iv) the Company; and

 

  (v) each other Person who at any time after the date hereof becomes a Member
in accordance with the terms of this Agreement and the Act.

Any reference in this Agreement to the Charter Member, A/N or any other Member
shall be deemed to include such Member’s successors in interest to the extent
such successors in interest have become Members in accordance with the
provisions of this Agreement.

All capitalized terms used in this Agreement are defined in Article I.

R E C I T A L S

WHEREAS, (i) the Company was formed as a limited liability company under the
Delaware Limited Liability Company Act, Title 6, Sections 18-101 et seq. (as
amended from time to time, the “Act”), by the filing of a Certificate of
Formation with the Secretary of State of the State of Delaware on May 25, 1999
(the “Filing Date”);

WHEREAS, the then-Members of the Company set forth certain agreements governing
the relations among the members in a Limited Liability Company Agreement
originally entered

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into and made effective as of May 25, 1999, as amended and restated thereafter,
most recently by that certain Amended and Restated Limited Liability Company
Agreement dated as of December 31, 2013 (as amended and restated, the “Original
Agreement”);

WHEREAS, prior to the Contribution (as defined in the Contribution Agreement),
in connection with the acquisition of certain assets and entities (including
Time Warner Cable, Inc.), New Charter intends to cause certain assets (including
the assets of Time Warner Cable, Inc. and assets of New Charter) to be acquired
by or transferred to the Company, as outlined in more detail in the structure
plan attached as Exhibit E to this Agreement;

WHEREAS, in connection with the Contribution (as defined in the Contribution
Agreement) pursuant to the terms, and subject to the conditions of, the
Contribution Agreement, the Company, the Charter Member and A/N desire to amend
and restate the Original Agreement in its entirety as set forth herein; and

WHEREAS, the Company, New Charter, Liberty Broadband Corporation, a Delaware
corporation (“Liberty Broadband”), and A/N have entered into the Stockholders
Agreement and, coincident herewith, are entering into the Registration Rights
Agreement and the Company, New Charter, the Charter Member and A/N are entering
into the Exchange Agreement, and such agreements are integral and critical to
the willingness of the Company, the Charter Member and A/N to enter into this
Agreement.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained
in this Agreement, the sufficiency of which is hereby acknowledged, the parties
agree that the Original Agreement is hereby amended and restated in its entirety
as follows:

ARTICLE I - DEFINITIONS

SECTION 1.1 Definitions.

The following terms shall have the following meanings for purposes of this
Agreement:

“A/N Contributed Property” has the meaning set forth in Section 7.4(d)(ii).

“A/N Party” has the meaning set forth in the Stockholders Agreement.

“Acquisition Loan” has the meaning set forth in Section 4.8(b)(i).

“Act” has the meaning set forth in the recitals.

“Adjusted Capital Account” means, with respect to any Member, such Member’s
Capital Account after giving effect to the following adjustments:

(a) Credit to such Capital Account any amounts which such Member is obligated to
restore pursuant to any provision of this Agreement or under applicable Law or
is deemed obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(b) Debit to such Capital Account the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).

 

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The foregoing definition of “Adjusted Capital Account” is intended to comply
with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall
be interpreted and applied by the Manager consistently therewith.

“Adjusted Capital Account Deficit” means, with respect to any Member, the
deficit balance, if any, in such Member’s Adjusted Capital Account as of the end
of the relevant Fiscal Year.

“Affiliate” means, with respect to any Person, any other Person, directly or
indirectly, through one or more intermediaries, controlling, controlled by, or
under common control with, such Person; it being understood that “control” or
any correlative version thereof in this Agreement shall have the meaning
ascribed thereto in Rule 12b-2 under the Exchange Act. Notwithstanding anything
to the contrary set forth in this Agreement, New Charter and its Subsidiaries
shall not be deemed to be Affiliates of A/N or any of its Affiliates.

“Agreement” has the meaning set forth in the preamble.

“A/N” has the meaning set forth in the preamble.

“A/N ROFO Acceptance Notice” has the meaning set forth in Section 6.5(d)(iii).

“Applicable Rate” means, at any date of determination, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) equal to New Charter’s interest rate for Eurodollar loans
under New Charter’s primary revolving credit facility, applied in a manner
consistent with market practice, which, as of the date of this Agreement is 2.0%
plus the London Interbank Offered Rate as published on the applicable Bloomberg
screen page (or such other page as may replace that page on that service or such
other commercially available source providing such quotations as may be
designated by New Charter from time to time in its reasonable discretion) for
deposits in dollars for a period equal to three months as of 11:00 a.m. (New
York time) on the day of determination; provided, that if New Charter’s interest
rate for Eurodollar loans under New Charter’s primary revolving credit facility
is changed, the Applicable Rate shall be changed to such rate.

“Assumed Tax Rate” means, for each Fiscal Year (or portion thereof), the highest
effective marginal income tax rate for a New York City resident individual or
corporation (who is not materially participating in the operations of the
Company within the meaning of Section 469 of the Code), as applicable, for such
Fiscal Year (giving effect to the deductibility of state and local taxes), in
each case applicable to the character of the net taxable income (e.g., capital
gains, dividends and/or ordinary income) allocable to the relevant Member. The
Assumed Tax Rate shall, for the avoidance of doubt, be determined, in the case
of a Member that is a partnership, an “S corporation,” or a partnership which
has an “S corporation as a partner,” at the highest rate applicable to any
partner of such partnership or shareholder in such “S corporation” and shall be
determined by the Manager, in the case of a Member that is a partnership, an “S
corporation,” or a partnership which has an “S corporation as a partner,” by
applying the highest effective marginal income tax rate for a New York City
resident individual that is a

 

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partner of such partnership or shareholder in such “S corporation” (who is not
materially participating in the operations of the Company within the meaning of
Section 469 of the Code) and only one such Assumed Tax Rate shall be applicable
for all Members with respect to each character of net taxable income. An example
calculation of the Assumed Tax Rate (as applicable to ordinary income of an
individual Member) is attached as Exhibit A.

“Board of Directors” means the Board of Directors of New Charter.

“Borrowing” has the meaning set forth in Section 7.4(d)(i).

“Business Day” means a day, other than Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by Law to
close.

“Cap” has the meaning set forth in the Stockholders Agreement.

“Capital Account” means, with respect to any Member, the Capital Account
maintained for such Member in accordance with the following provisions:

(a) The Capital Account of each Member will be increased by:

 

  (i) any Capital Contributions made by such Member;

 

  (ii) allocations to such Member of Net Income (or items of income or gain)
pursuant to Section 5.3(a) and any items in the nature of income or gain that
are specially allocated to such Member pursuant to Section 5.3(c); and

 

  (iii) the amount of any Company liabilities assumed by such Member as provided
in Regulations Section 1.704-1(b)(2)(iv)(c)(1).

(b) The Capital Account of each Member will be decreased by:

 

  (i) the amount of money and the Gross Asset Value of any property distributed
to such Member by the Company in respect of such Member’s Membership Interest;

 

  (ii) allocations to the Member of any Net Loss (or items of loss or deduction)
pursuant to Section 5.3(a) and any items in the nature of loss or deduction that
are specially allocated to such Member pursuant to Section 5.3(c); and

 

  (iii) the amount of any liabilities of such Member assumed by the Company as
provided in Regulations Section 1.704-1(b)(2)(iv)(c)(2).

The foregoing definition and other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Code Section 704(b)
and the Regulations promulgated thereunder and shall be interpreted and applied
by the Company and the

 

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Manager in a manner consistent with such Regulations. The initial Capital
Account of each Member as of the date of this Agreement is as set forth on
Schedule I, and shall be adjusted from time to time in accordance with this
definition.

“Capital Contribution” means, with respect to any Person, the amount of cash and
the initial Gross Asset Value of any property (other than cash) contributed to
the Company (determined in the aggregate with respect to the Contribution (as
defined in the Contribution Agreement) and the contribution of the assets of the
Charter Member no later than fifteen (15) Business Days after the Contribution
and the contribution of the assets of the Charter Member) or any of its
Subsidiaries by such Person (or its predecessors in interest) in respect of a
Membership Interest. If any Member pays any amount which gives rise to a tax
deduction of the Company, such payment shall be treated as a Capital
Contribution by the Member.

“Capital Stock” shall mean any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (in
each case however designated) stock issued by New Charter.

“Certificate” has the meaning set forth in Section 2.1.

“Cash Exchange Payment” has the meaning set forth in the Exchange Agreement.

“Change of Control” means any (i) merger, consolidation or other business
combination of New Charter or the Company (or any of their respective
Subsidiaries that alone or together represent all or substantially all of New
Charter’s or the Company’s consolidated business at that time) or any successor
or other entity owning or holding substantially all of the assets of New Charter
or the Company and their respective Subsidiaries that results in the holders of
Class A Common Stock (in the case of New Charter) or the holders of Common Units
(in the case of the Company) immediately before the consummation of such
transaction, or a series of related transactions, holding, directly or
indirectly, less than 50% of the equity or voting power of New Charter or the
Company (or any such Subsidiary or Subsidiaries) or any successor or other
entity owning or holding substantially all of the assets of New Charter or the
Company and their respective Subsidiaries or the surviving entity thereof, as
applicable, immediately following the consummation of such transaction or series
of related transactions; it being understood that such ownership shall be
evaluated on a combined basis (i.e., on an as-converted, as-exchanged basis and
without regard to any voting power or ownership limitation on A/N, Liberty
Broadband or their respective Affiliates) so that any ownership interest in the
Charter Member shall be aggregated (without duplication) with any ownership
interest in the Company or any such Subsidiary of New Charter, any other member
of the Charter Group or any such successor; (ii) transfer, in one or a series of
related transactions, equity interests representing 50% or more of the equity or
voting power of the Company or New Charter (or any of their respective
Subsidiaries that alone or together represent all or substantially all of New
Charter’s or the Company’s consolidated assets at that time) or any successor or
other entity owning or holding substantially all of the consolidated assets of
New Charter and the Company and their respective Subsidiaries, taken as a whole,
to a Person or Group (other than New Charter or any of its Subsidiaries), or
entitling such Person or Group to elect a majority of the board of directors or
similar governing body of New Charter or the Company (or such

 

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Subsidiary or Subsidiaries) or any such successor or other entity; it being
understood that such ownership shall be evaluated on a combined basis (i.e., on
an as-converted, as-exchanged basis and without regard to any voting power or
ownership limitation on A/N, Liberty Broadband or their respective Affiliates)
so that any ownership interest in the Charter Member shall be aggregated
(without duplication) with any ownership interest in the Company or any such
Subsidiary of New Charter or any such successor; or (iii) sale or other
disposition in one or a series of related transactions of all or substantially
all of the consolidated assets of New Charter and the Company and their
respective Subsidiaries. Notwithstanding anything to the contrary contained
herein, for purposes of determining whether a Change of Control has occurred, it
shall be assumed that all Class B Common Units have been exchanged for shares of
Class A Common Stock (or equity interests of any successor or other entity
owning or holding substantially all of the assets of New Charter and its
Subsidiaries) immediately prior to any such merger, consolidation, other
business combination or transfer and there is no limitation on the voting power
or ownership limitation on A/N and its Affiliates or on Liberty Broadband or its
Affiliates.

“Change of Control Class A Common Stock Price” means, in connection with any
Change of Control (i) the cash amount paid per share of Class A Common Stock if
the holders of Class A Common Stock receive only cash in such Change of Control;
or (ii) in any other situation, the VWAP of the Class A Common Stock over the
three (3) Trading Days immediately preceding, but excluding, the effective date
of a Change of Control.

“Charter Group” means New Charter and all Subsidiaries of New Charter other than
the Company and its Subsidiaries.

“Charter Member” has the meaning set forth in the preamble.

“Chief Financial Officer” has the meaning set forth in Section 4.3(e).

“Class A Common Stock” means the Class A common stock, par value $0.001 per
share, of New Charter, or the common stock or other equity securities of a
successor corporation or entity for which such common stock has been converted
or exchanged.

“Class A Common Units” has the meaning set forth in Section 3.1(a).

“Class B Common Units” has the meaning set forth in Section 3.1(a).

“Close of Business” shall mean 5:00 p.m., Eastern Time, on any Business Day.

“Closing Date” has the meaning set forth in the Contribution Agreement.

“Closing Price” means, with respect to any Trading Day, the price per share of
the final trade of the Class A Common Stock on such day (but not including any
“after hours” trading) on the principal national securities exchange on which
the Class A Common Stock is listed or admitted to trading.

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

 

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“Commission” means the U.S. Securities and Exchange Commission and any successor
thereto.

“Common Annual Adjusted Taxable Income” means, with respect to each Member
holding Common Units for each Fiscal Year (or portion thereof), the difference
(but not below zero) of (a) the total U.S. federal taxable income allocated to
such Member with respect to its Common Units for such Fiscal Year (or portion
thereof), minus (b) the cumulative U.S. federal taxable losses allocated on IRS
Schedule K-1s (or as otherwise finally determined) to the Member with respect to
such Common Units to the extent such prior losses are of a character that would
permit such losses to be deducted against the U.S. federal taxable income of the
Members for the current Fiscal Year and are not taken into account in a prior
Fiscal Year pursuant to this clause (b); provided, that for the avoidance of
doubt, such U.S. federal taxable income shall be computed taking into account
any allocations of items of income, gain, loss or deduction under Section 704(c)
of the Code (excluding adjustments to the amount of depreciation or amortization
allocable to the Members under Section 704(c)(1)(C) resulting from a
contribution to the Company), but without taking into account any special basis
adjustment under Section 743 of the Code.

“Common Cumulative Assumed Tax Liability” means, with respect to each Member at
any given time, the sum, over all Fiscal Years (or the portion of the Fiscal
Year) up to such time, of the product of (a) the Common Annual Adjusted Taxable
Income for such Fiscal Year or portion thereof, multiplied by (b) the Assumed
Tax Rate for such Fiscal Year or portion thereof (applying, in each case, the
tax rate applicable to the character of the net taxable income). Each Member’s
Common Cumulative Assumed Tax Liability shall be appropriately adjusted by the
Manager (1) if at any time there is an audit adjustment or an amended return is
filed by the Company, to reflect any adjustment to assumed taxes due, based on
the Assumed Tax Rate for the affected periods, and (2) to reflect any change in
the number of Common Units held by such Member based on the number of Common
Units held by such Member in each relevant Fiscal Year (or portion thereof).

“Common Excess Cumulative Tax Liability” means, with respect to each Member
holding Common Units at any given time, the difference (but not below zero) of
(a) such Member’s Common Cumulative Assumed Tax Liability as of such time, minus
(b) the total amount of all prior Common Tax Distributions made to such Member
in respect of such Common Units, and minus (c) the total amount of all prior Tax
Loans made to such Member and still outstanding resulting from the waiver by the
Manager of Common Tax Distributions.

“Common Per Unit Excess Cumulative Tax Liability” means, with respect to each
Member holding Common Units at any given time, the quotient of (a) such Member’s
Common Excess Cumulative Tax Liability, divided by (b) the number of Common
Units held by such Member at such time.

“Common Per Unit Tax Distribution Amount” means, for each Fiscal Year (or
portion thereof), the highest Common Per Unit Excess Cumulative Tax Liability of
any Member holding Common Units, as of the end of such Fiscal Year (or portion
thereof).

“Common Tax Distribution” means the aggregate amount of any distribution made to
any Member in respect of such Member’s Common Units, pursuant to Section
5.4(b)(i).

 

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“Common Units” means the Class A Common Units and the Class B Common Units.

“Company” has the meaning set forth in the preamble.

“Company Minimum Gain” has the same meaning as “partnership minimum gain” set
forth in Regulations Sections 1.704-2(b)(2) and 1.704-2(d). A Member’s share of
Company Minimum Gain shall be computed in accordance with the provisions of
Regulations Section 1.704-2(g).

“Company ROFO Offer Notice” has the meaning set forth in Section 6.5(d)(ii).

“Company ROFR Acceptance Notice” has the meaning set forth in
Section 6.5(b)(ii).

“Contribution Agreement” means the Contribution Agreement, dated as of May 23,
2015, by and among the Company, New Charter, Old Charter and A/N (as amended
from time to time in accordance with its terms).

“Conversion Date” means, with respect to any Convertible Preferred Units to be
converted pursuant to Section 3.3(a), Section 3.4(a) or automatically converted
pursuant to Section 3.5(b), the date on which such Convertible Preferred Units
and a duly signed and completed Conversion Notice is received by the Company or
a Conversion Notice is deemed given by the holder of the Convertible Preferred
Units.

“Conversion Notice” has the meaning set forth in Section 3.3(a).

“Conversion Price” means, as of any given time, the quotient of $100 divided by
the Conversion Rate.

“Conversion Rate” means 0.37334, subject to adjustment as set forth in
Section 3.3(c).

“Conversion Rate Adjustment Event” has the meaning set forth in
Section 3.3(c)(xi).

“Convertible Preferred Unallocated Yield” means, for any Taxable Period and with
respect to any Convertible Preferred Unit, the amount equal to (a) the aggregate
Convertible Preferred Yield accrued on such Convertible Preferred Unit through
the last day of such Taxable Period, less (b) the cumulative amount of items of
Company income or gain previously allocated by the Company pursuant to
Section 5.3(c)(i)(H) with respect to such Convertible Preferred Unit.

“Convertible Preferred Unit” has the meaning set forth in Section 3.1(a).

“Convertible Preferred Unitholders” means the holders of record of the
Convertible Preferred Units.

“Convertible Preferred Unit Certificate” means a certificate representing
Convertible Preferred Units substantially in the form set forth in Exhibit B.

“Convertible Preferred Unit Distribution Payment Date” has the meaning set forth
in Section 5.4(a)(i)(A).

 

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“Convertible Preferred Yield” means, with respect to any Convertible Preferred
Unit, an amount equal to 6.0% per annum on an amount equal to the Liquidation
Preference of such Convertible Preferred Unit (equivalent to $6.00 per annum).
Such amount shall be determined on a daily basis computed on the basis of a
360-day year of twelve 30-day months (or actual days elapsed in a month in which
a calculation is made if such calculation is made prior to the last day of such
month), cumulative from the date hereof to the extent not distributed for any
given distribution period pursuant to Section 5.4. Notwithstanding the
foregoing, distributions on the Convertible Preferred Units will accrue whether
or not the terms and provisions of any agreement of the Company at any time
prohibit the current payment of distributions, whether or not the Company has
earnings, whether or not there are funds legally available for the payment of
such distributions and whether or not such distributions are authorized or
otherwise declared. Accrued but unpaid distributions on the Convertible
Preferred Units will accumulate as of the Convertible Preferred Unit
Distribution Payment Date on which they first become payable or shall have been
deemed to become due pursuant to Section 5.4(a)(i)(A).

“Covered Claim” has the meaning set forth in Section 4.6(a).

“Covered Person” means any past, present or future officer, director or employee
of the Charter Member, the Company or its Subsidiaries or the Manager, Tax
Matters Member, or any Affiliate of any of the foregoing (each, in their
capacity as such).

“Covered Proceeding” has the meaning set forth in Section 4.6(b).

“Creditor” has the meaning set forth in Section 4.8(b)(iii).

“Demand Registration” has the meaning set forth in the Registration Rights
Agreement.

“Depreciation” means, for each Fiscal Year or other period for tax purposes, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such Fiscal Year or other period, except
that (i) if the Gross Asset Value of an asset differs from its adjusted basis
for federal income tax purposes at the beginning of such Fiscal Year or other
period, and which difference is being eliminated by use of the “remedial
allocation method” defined by Regulations Section 1.704-3(d), Depreciation with
respect to such asset or portion thereof subject to such method for such Fiscal
Year or other period shall be the amount of book basis recovered for such Fiscal
Year or other period under the rules prescribed by Regulations
Section 1.704-3(d)(2), and (ii) with respect to any other asset whose Gross
Asset Value differs from its adjusted basis for federal income tax purposes at
the beginning of such Fiscal Year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that, in the case of clause (ii) above, if the federal income
tax depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be calculated with reference to such beginning Gross
Asset Value using any reasonable method selected by the Manager.

“Distributed Property” has the meaning set forth in Section 3.3(c)(v).

 

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“Eligible Market” means NASDAQ, NASDAQ Global Market or NYSE.

“Equity Interest” has the meaning set forth in the Stockholders Agreement.

“Equity Linked Financing” has the meaning set forth in the Stockholders
Agreement.

“Ex-Dividend Date” means the first date on which the shares of Class A Common
Stock trade on the applicable exchange or in the applicable market, regular way,
without the right to receive the dividend or distribution in question from New
Charter, or, if applicable, from the seller of the Class A Common Stock on such
exchange or market as determined by such exchange or market.

“Exchange” has the meaning set forth in the Exchange Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder, as amended, or any successor federal statute,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect from time to time.

“Exchange Agreement” means the Exchange Agreement, dated as of the date hereof,
among New Charter, CCH II, LLC, the Company, A/N, and such other holders of
Class B Common Units of the Company from time to time party thereto, as such
agreement may be amended from time to time in accordance with its terms.

“Expenses” has the meaning set forth in Section 4.6(a).

“Filing Date” has the meaning set forth in the recitals.

“Fiscal Quarter” means any fiscal quarter of a Fiscal Year.

“Fiscal Year” has the meaning set forth in Section 7.3.

“Government Entity” means any federal, state, local or foreign government,
governmental subdivision, administrative body or other governmental or
quasi-governmental agency, tribunal, court or other entity of competent
jurisdiction.

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

(a) The initial Gross Asset Value of any asset contributed by a Member to the
Company shall be the gross fair market value of such asset on the date of the
contribution, as reasonably determined by the Manager.

(b) The Gross Asset Values of all Company assets shall be adjusted to equal
their respective gross fair market values, as reasonably determined by the
Manager, as of the following times:

(i) the acquisition of an additional Membership Interest in the Company after
the date of this Agreement by an existing Member or new Member in

 

10

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exchange for more than a de minimis Capital Contribution, if the Manager
reasonably determines that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Members in the Company;

(ii) the distribution by the Company to a Member of more than a de minimis
amount of Company property as consideration for a Membership Interest in the
Company, if the Manager reasonably determines that such adjustment is necessary
or appropriate to reflect the relative economic interests of the Members in the
Company;

(iii) the liquidation of the Company within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g);

(iv) the grant of an interest in the Company (other than a de minimis interest)
as consideration for the provision of services to or for the benefit of the
Company by an existing Member acting in a Member capacity, or by a new Member
acting in a Member capacity or in anticipation of being a Member if the Manager
reasonably determines that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Members in the Company;

(v) upon the conversion of Convertible Preferred Units pursuant to Section 3.3,
applying Regulations Section 1.704-1(b)(2)(iv)(f), taking into account
Regulations Section 1.704-1(b)(2)(iv)(s); and

(vi) such other times as the Manager shall reasonably determine necessary or
advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2.

(c) The Gross Asset Value of any Company asset distributed to a Member shall be
the gross fair market value of such asset on the date of distribution, as
reasonably determined by the Manager.

(d) The Gross Asset Values of Company assets shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset
Values shall not be adjusted pursuant to this subparagraph (d) to the extent
that the Manager reasonably determines that an adjustment pursuant to
subparagraph (b) of this definition of Gross Asset Value is necessary or
appropriate in connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph (d).

(e) The Gross Asset Value of a Company asset shall be adjusted by the
Depreciation, if any, taken into account by the Company with respect to
computing Net Income or Net Loss.

For the purposes of this definition of “Gross Asset Value,” a determination by
the Manager with respect to property contributed on the date hereof shall only
be considered

 

11

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reasonable if (a) the Manager provides the determination in draft form and in
sufficient detail (including any supporting documentation) to A/N reasonably in
advance of any applicable filing or reporting due date (taking into account any
applicable extensions) for A/N’s review; and (b) the Manager considers in good
faith any of A/N’s or its tax advisor’s comments thereon; it being understood
that if the Manager and A/N are unable to reach agreement with respect to such
determination, the Manager’s determination shall control.

“Group” means “group” within the meaning of Section 13(d)(3) of the Exchange
Act.

“IRS” means the United States Internal Revenue Service.

“Joinder Agreement” means a Joinder Agreement in the form attached as Exhibit C.

“Law” means any applicable law, statute, ordinance, rule, regulation, code,
Order, judgment, injunction or decree enacted, issued, promulgated, enforced or
entered by a Government Entity or Self-Regulatory Organization (including, for
the sake of clarity, any policy statement or interpretation that has the force
of law with respect to any of the foregoing, and including common law).

“Liberty Broadband” has the meaning set forth in the recitals.

“Liquidating Distribution” has the meaning set forth in Section 3.3(c)(v).

“Liquidation Preference” means $100 per Convertible Preferred Unit.

“Make-Whole Amount” means a number of shares of Class A Common Stock determined
by reference to the table in Exhibit H, based upon the effective date of the
Change of Control and the Change of Control Class A Common Stock Price.

If the exact Change of Control Class A Common Stock Price and effective date is
not set forth in the table in Exhibit H, then:

(a) if the Change of Control Class A Common Stock Price is between two Change of
Control Class A Common Stock Prices in the table in Exhibit H and/or the
effective date of the Change of Control is between two effective dates set forth
in the table in Exhibit H, the Make-Whole Amount shall be determined by
straight-line interpolation between the Make-Whole Amounts set forth for the
higher and lower Change of Control Class A Common Stock Price and/or the earlier
and later effective dates set forth in the table, as applicable, based on a
365-day year.

(b) If the Change of Control Class A Common Stock Price is in excess of
$1,000.00 (subject to adjustment at the same time and in the same manner as the
Change of Control Class A Common Stock Prices pursuant to clause (d) of this
definition of Make-Whole Amount) the Make-Whole Amount shall be zero.

(c) If the Change of Control Class A Common Stock Price is less than $191.33
(subject to adjustment at the same time and in the same manner as the Change of
Control Class A Common Stock Prices pursuant to clause (d) of this definition of
Make-Whole Amount) the Make-Whole Amount shall be zero.

(d) The Change of Control Class A Common Stock Prices set forth in the table in
Exhibit H shall be adjusted as of any date on which the Conversion Rate is
adjusted pursuant to Section 3.3(c). The adjusted Change of Control Class A
Common Stock Prices shall equal the Change of Control Class A Common Stock
Prices applicable immediately prior to such adjustment multiplied by a fraction,
the numerator of which is the Conversion Rate immediately before the adjustment
and the denominator of which is the adjusted Conversion Rate. Each Make-Whole
Amount set forth in the table shall be adjusted at the same time, in the same
manner in which and for the same events for which the Conversion Rate is
adjusted pursuant to Section 3.3(c).

 

12

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“Manager” means New Charter or any of its successors or permitted assigns, or
any subsequent successor or permitted assign, in its capacity as the Manager.

“Member” means the Charter Member, A/N, and each other Person who is admitted
hereafter as a Member in accordance with the terms of this Agreement, but only
to the extent such Person has not ceased to be a Member pursuant to Section 6.1.
The Members shall comprise the “members” (as that term is defined and used in
the Act) of the Company. The Members shall constitute a single class or group of
members for purposes of the Act.

“Member Minimum Gain” means an amount, with respect to each Member Nonrecourse
Debt, equal to the Company Minimum Gain that would result if such Member
Nonrecourse Debt were treated as a Nonrecourse Liability, determined in
accordance with Regulations Section 1.704-2(i)(3).

“Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse
debt” set forth in Regulations Section 1.704-2(b)(4).

“Member Nonrecourse Deductions” has the same meaning as the term “partner
nonrecourse deductions” set forth in Regulations Sections 1.704-2(i)(1) and
1.704-2(i)(2).

“Membership Interest” means a Member’s ownership interest in the Company at the
relevant time.

“NASDAQ” means the NASDAQ Global Select Market or any successor thereto.

“NASDAQ Global Market” means NASDAQ Global Market or any successor thereto.

 

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

(a) Any income of the Company that is exempt from federal income tax and to the
extent not otherwise taken into account in computing Net Income or Net Loss
pursuant to this definition of Net Income or Net Loss, shall be added to such
income or loss;

(b) Any expenditures of the Company described in Code Section 705(a)(2)(B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations
Section 1.704-1(b)(2)(iv)(i), and to the extent not otherwise taken into account
in computing Net Income or Net Loss pursuant to this definition of Net Income or
Net Loss, shall be subtracted from such taxable income or loss;

(c) In the event the Gross Asset Value of any Company asset is adjusted pursuant
to subparagraph (b) or (c) of the definition of Gross Asset Value in this
Agreement, the amount of such adjustment shall be taken into account as gain (if
the adjustment increases the Gross Asset Value of the asset) or loss (if the
adjustment decreases the Gross Asset Value of the asset) from the disposition of
such asset for purposes of computing Net Income or Net Loss;

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

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

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

(g) Any items that are specially allocated pursuant to the provisions of
Section 5.3(c) shall not be taken into account in computing Net Income or Net
Loss.

“New Charter” has the meaning set forth in the preamble.

“New Charter Certificate” means the Amended and Restated Certificate of
Incorporation of New Charter, as it may be amended from time to time in
accordance with its terms.

“Nonrecourse Deductions” has the meaning set forth in Regulations
Section 1.704-2(b)(1) and 1.704-2(c).

“Nonrecourse Liability” has the meaning set forth in Regulations
Section 1.752-1(a)(2).

 

14

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“Notice of Foreclosure” means a notice of foreclosure in a form agreed among the
Company, A/N and the applicable lender to whom Class B Common Units or
Convertible Preferred Units have been pledged in accordance with Section 4.6(c)
or 4.6(d) of the Stockholders Agreement.

“NYSE” means The New York Stock Exchange and any successor thereto.

“Offered Preferred Units” has the meaning set forth in Section 6.5(b)(i).

“Officer” means each Person designated as an officer of the Company or of any of
its Subsidiaries pursuant to and in accordance with the provisions of
Section 4.3, subject to the determination of the Manager appointing such Person
as an officer or relating to such appointment.

“Old Charter” means Former Charter Communications Parent, Inc., a Delaware
corporation (formerly known as Charter Communications, Inc.).

“Order” means any order, injunction, judgment, decree, writ or other enforcement
action of a Government Entity.

“Original Agreement” has the meaning set forth in the recitals.

“Percentage Interest” means, with respect to any Member, the percentage obtained
by dividing (a) the number of Common Units held by such Member by (b) the total
number of Common Units of all classes then outstanding. The initial Percentage
Interest of each Member as of the date of this Agreement is as set forth on
Schedule I, which may be amended from time to time.

“Per Unit Amount” has the meaning set forth in Section 3.3(b).

“Person” means an individual, a corporation, a partnership, an association, a
limited liability company, a joint venture, a Government Entity, a trust or
other entity or organization.

“Preferred Accrued Distribution Amount” means, with respect to each Convertible
Preferred Unit, the sum of: (i) the amount of the Convertible Preferred Yield on
such Convertible Preferred Unit that has accumulated as described in the
definition of Convertible Preferred Yield but has not yet been paid, plus
(ii) with respect to each distribution to be paid or deemed to have become due
pursuant to Section 5.4 on each Convertible Preferred Unit Distribution Payment
Date, if such distribution is not paid by the next following Convertible
Preferred Unit Distribution Payment Date, additional interest accruing at
6.0% per annum on the amount of such distribution for the period from and after
such following Convertible Preferred Unit Distribution Payment Date until such
time as such distribution has been paid.

“Preferred Annual Adjusted Taxable Income” means, with respect to each Member
holding Convertible Preferred Units for each Fiscal Year (or portion thereof),
the difference (but not below zero) of (a) the total U.S. federal taxable income
allocated to such Member with respect to its Convertible Preferred Units for
such Fiscal Year (or portion thereof), minus (b) the cumulative U.S. federal
taxable losses allocated on IRS Schedule K-1s (or as otherwise finally
determined) to the Member with respect to such Convertible Preferred Units to
the extent such

 

15

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prior losses are of a character that would permit such losses to be deducted
against the U.S. federal taxable income of the Members for the current Fiscal
Year and are not taken into account in a prior Fiscal Year pursuant to this
clause (b); provided, that for the avoidance of doubt, such U.S. federal taxable
income shall be computed taking into account any allocations of items of income,
gain, loss or deduction under Section 704(c) of the Code (excluding adjustments
to the amount of depreciation or amortization allocable to the Members under
Section 704(c)(1)(C) resulting from a contribution to the Company), but without
taking into account any special basis adjustment under Section 743 of the Code.

“Preferred Cumulative Assumed Tax Liability” means, with respect to each Member
holding Convertible Preferred Units at any given time, the sum, over all Fiscal
Years (or the portion of the Fiscal Year) up to such time, of the product of
(a) the Preferred Annual Adjusted Taxable Income for such Fiscal Year or portion
thereof, multiplied by (b) the Assumed Tax Rate for such Fiscal Year or portion
thereof (applying, in each case, the tax rate applicable to the character of the
net taxable income). Each Member’s Preferred Cumulative Assumed Tax Liability
shall be appropriately adjusted by the Manager (1) if at any time there is an
audit adjustment or an amended return is filed by the Company, to reflect any
adjustment to assumed taxes due, based on the Assumed Tax Rate for the affected
periods, and (2) to reflect any change in the number of Convertible Preferred
Units held by such Member based on the number of Convertible Preferred Units
held by such Member in each relevant Fiscal Year (or portion thereof).

“Preferred Excess Cumulative Tax Liability” means, with respect to each Member
holding Convertible Preferred Units at any given time, the difference (but not
below zero) of (a) such Member’s Preferred Cumulative Assumed Tax Liability as
of such time, minus (b) the total amount of all prior distributions made to such
Member in respect of such Convertible Preferred Units (including Preferred Tax
Distributions).

“Preferred Per Unit Excess Cumulative Tax Liability” means, with respect to each
Member holding Convertible Preferred Units at any given time, the quotient of
(a) such Member’s Preferred Excess Cumulative Tax Liability, divided by (b) the
number of Convertible Preferred Units held by such Member at such time.

“Preferred Per Unit Tax Distribution Amount” means, for each Fiscal Year (or
portion thereof), the highest Preferred Per Unit Excess Cumulative Tax Liability
of any Member holding Convertible Preferred Units, as of the end of such Fiscal
Year (or portion thereof).

“Preferred Private Placement Notice” has the meaning set forth in
Section 6.5(c)(i).

“Preferred Private Placement Offering” means any widely distributed private
placement offering of Convertible Preferred Units permitted by the Stockholders
Agreement to qualified institutional buyers, including any such offering that
includes a Shelf Registration requested by A/N of the shares of Class A Common
Stock into which such Convertible Preferred Units are convertible following
their Transfer to a third party.

“Preferred Private Placement Offering Period” has the meaning set forth in
Section 6.5(c)(ii).

“Preferred Private Placement ROFO Period” has the meaning set forth in
Section 6.5(c)(ii).

 

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“Preferred ROFR” has the meaning set forth in Section 6.5(a).

“Preferred ROFR Notice” has the meaning set forth in Section 6.5(b)(i).

“Preferred Tax Distribution” means any Tax Distribution made to any Member in
respect of such Member’s Convertible Preferred Units, pursuant to
Section 5.4(b)(i).

“Preferred Transferor” has the meaning set forth in Section 6.5(a).

“Preferred Updated Valuation” has the meaning set forth in Section 6.5(c)(ii).

“President” has the meaning set forth in Section 4.3(d).

“Private Placement Preferred Units” has the meaning set forth in
Section 6.5(c)(i).

“Proceeding” has the meaning set forth in Section 4.6(b).

“Recapitalization” has the meaning set forth in Section 3.3(c)(xiii).

“Recapitalization Amendment” has the meaning set forth in Section 3.3(c)(xiii).

“Record Date” shall mean, with respect to any dividend, distribution or other
transaction or event in which the holders of Class A Common Stock have the right
to receive any cash, securities or other property or in which the Class A Common
Stock (or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).

“Reference Property” has the meaning set forth in Section 3.3(c)(xiii).

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the date hereof, by and among New Charter, A/N, Liberty Broadband and the
other parties from time to time party thereto, as such agreement may be amended
from time to time in accordance with its terms.

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

“Regulatory Allocations” has the meaning set forth in Section 5.3(c)(ii).

“ROFR Closing” has the meaning set forth in Section 6.5(b)(iii).

“ROFR Covered Transfer” has the meaning set forth in Section 6.5(a).

“ROFR Specified Price” has the meaning set forth in Section 6.5(b)(i).

 

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“Secretary” has the meaning set forth in Section 4.3(g).

“Self-Regulatory Organization” means NASDAQ, the NYSE, any national securities
exchange (as defined in the Exchange Act), any other securities exchange,
futures exchange, contract market, or other exchange or similar self-regulatory
body or organization.

“Specified Documents” means this Agreement, the Exchange Agreement, the
Stockholders Agreement, the Registration Rights Agreement, the Tax Receivables
Agreement and the New Charter Certificate.

“Stand Alone Margin Loan” has the meaning set forth in the Stockholders
Agreement.

“Spin-Off” has the meaning set forth in Section 3.3(c)(iii).

“Stockholders Agreement” means the Second Amended and Restated Stockholders
Agreement, dated as of May 23, 2015, by and among New Charter, Old Charter, A/N
and Liberty Broadband, as such agreement may be amended from time to time in
accordance with its terms.

“Subsidiary” means, with respect to any Person, any other Person of which (i) a
majority of the outstanding share capital, voting securities or other equity
interests are owned, directly or indirectly, by such first Person and/or any
other Subsidiary of such first Person or (ii) such first Person and/or any other
Subsidiary of such first Person is entitled, directly or indirectly, to appoint
a majority of the board of directors or comparable body of such Person.

“Target Capital Account” means, for each Member, the amount that would be
distributed to such Member if, on the last day of the Taxable Period, (a) the
assets of the Company, including cash, were sold for cash equal to their
respective Gross Asset Values, taking into account any adjustments thereto for
such Taxable Period, (b) all Company liabilities were satisfied according to
their terms (limited, with respect to any nonrecourse liability, to the Gross
Asset Value of the property securing such nonrecourse liability), (c) the
Company were to distribute the remaining proceeds from the sale pursuant to
Section 6.2(c)(ii) and (iii), minus the sum of (1) the Member’s share of Company
Minimum Gain and Member Minimum Gain, and (2) the amount, if any, that such
Member is obligated (or deemed obligated) to contribute, in its capacity as a
Member, to the Company; computed immediately prior to the hypothetical sale of
assets.

“Taxable Period” means (i) the period commencing on the date of this Agreement
and ending on December 31, 2016, (ii) any Fiscal Year commencing after
December 31, 2016, or (iii) any portion of the period described in clauses
(i) or (ii) for which the Company is required to allocate Net Income, Net Losses
and other items of Company income, gain, loss or deduction pursuant to
Section 5.3.

“Tax Distribution” means the aggregate amount of any distribution made to any
Member pursuant to Section 5.4(b)(i).

“Tax Loan” has the meaning set forth in Section 5.4(b)(ii).

“Tax Matters Member” has the meaning set forth in Section 7.4(c)(i).

 

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“Tax Receivables Agreement” means the Tax Receivables Agreement, dated as of the
date hereof, by and among A/N, New Charter and CCH II, LLC, as such agreement
may be amended from time to time in accordance with its terms.

“Trading Day” shall mean any Business Day on which the Class A Common Stock is
traded, or able to be traded, on the principal national securities exchange on
which the Class A Common Stock is listed or admitted to trading.

“Transfer” means, with respect to any Units, (i) when used as a verb, to sell,
assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise
transfer such Units or any participation or interest therein, whether directly
or indirectly, or, when used in Section 6.5, enter into any binding agreement to
do any of the foregoing and (ii) when used as a noun, a direct or indirect sale,
assignment, disposition, exchange, pledge, encumbrance, hypothecation or other
transfer of such Units or any participation or interest therein, or, when used
in Section 6.5 hereof, any binding agreement to do any of the foregoing,
including in each case through the Transfer of any interest in any Person
holding such Units or any interest in such Person. Notwithstanding anything to
the contrary in this Agreement, no Transfer of Class A Common Stock or any other
interest in New Charter shall be deemed to constitute a Transfer of Class A
Common Units.

“Transfer Agent” means the bank, trust company or other Person that may be
appointed from time to time by the Company to act as registrar and transfer
agent for the Convertible Preferred Units.

“Trigger Event” has the meaning set forth in Section 3.3(c)(vii).

“Units” has the meaning set forth in Section 3.1(a).

“VWAP” means, for any specified period, with respect to any class of stock, a
price per share equal to the volume-weighted average of the trading prices of
such class of stock, as reported by Bloomberg L.P. (with respect to the Class A
Common Stock, on the screen entitled “CHTR <EQUITY> AQR SEC” or its equivalent
successor if such page is not available) for such period (without regard to
pre-open or after hours trading outside of any regular trading session during
such period).

SECTION 1.2 Terms Generally.

(a) Numbers. The definitions in Section 1.1 shall apply equally to both the
singular and plural forms of the terms defined.

(b) Gender. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.

(c) Including. The words “include,” “includes” and “including” shall be deemed
to be followed by the phrase “without limitation.”

(d) Calculation of Time Period. When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this

 

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Agreement, the date that is the reference date in calculating such period shall
be excluded. If the last day of such period is a non-Business Day, the period in
question shall end on the next succeeding Business Day.

(e) Dollars. Any reference in this Agreement to “dollars” or “$” shall mean the
lawful currency of the United States of America.

(f) Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references to
“Sections” and “Articles” shall refer to Sections and Articles of this Agreement
unless otherwise specified.

(g) Exhibits. The exhibits to this Agreement are hereby incorporated and made a
part of this Agreement and are an integral part of this Agreement. All exhibits
annexed hereto or referred to in this Agreement are hereby incorporated in and
made a part of this Agreement as if set forth in full in this Agreement. Any
capitalized terms used in any exhibit but not otherwise defined therein shall be
defined as set forth in this Agreement.

(h) Negotiation. The parties hereto have participated jointly in the negotiation
and drafting of this Agreement and, in the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as jointly
drafted by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.

ARTICLE II - GENERAL PROVISIONS

SECTION 2.1 Formation. The Company was organized as a Delaware limited liability
company by the execution and filing of a Certificate of Formation on the Filing
Date with the Secretary of State of the State of Delaware (as amended from time
to time, the “Certificate”), under and pursuant to the Act by an “authorized
person” within the meaning of the Act, which filing is hereby authorized,
approved, ratified and confirmed in all respects. The rights, powers, duties,
obligations and liabilities of the Members shall be determined pursuant to the
Act and this Agreement. To the extent that the rights, powers, duties,
obligations and liabilities of any Member are different by reason of any
provision of this Agreement than they would be in the absence of such provision,
this Agreement shall, to the extent permitted by the Act, control.

SECTION 2.2 Name. The name of the Company is “Charter Communications Holdings,
LLC,” and all Company business shall be conducted in that name or in such other
names that comply with applicable Law as the Manager may select from time to
time.

SECTION 2.3 Term. The term of the Company commenced on the Filing Date and shall
continue in existence perpetually until termination or dissolution in accordance
with the provisions of Section 6.2.

 

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SECTION 2.4 Purpose; Powers.

(a) General Powers. The nature of the business or purposes to be conducted or
promoted by the Company is to engage in any act or activity which may be
lawfully conducted by a limited liability company under the Act. The Company may
engage in any and all activities necessary, desirable or incidental to the
accomplishment of the foregoing, subject to the foregoing. Notwithstanding
anything in this Agreement to the contrary, nothing set forth in this Agreement
shall be construed as authorizing the Company to possess any purpose or power,
or to do any act or thing, forbidden by Law to a limited liability company
organized under the Laws of the State of Delaware.

(b) Company Action. Subject to the provisions of this Agreement, except as
prohibited by applicable Law, (i) the Company may, with the approval of the
Manager, enter into and perform any and all documents, agreements and
instruments contemplated by such approval, all without any further act, vote or
approval of any other Member and (ii) the Manager may authorize any Person
(including any other Member or Officer) to enter into and perform any document
on behalf of the Company.

SECTION 2.5 Registered Office; Registered Agent; Principal Office; Other
Offices. The registered office of the Company required by the Act to be
maintained in the State of Delaware shall be the office of the initial
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Manager may designate from time to
time in the manner provided by Law. The registered agent of the Company in the
State of Delaware shall be the initial registered agent named in the Certificate
or such other Person or Persons as the Manager may designate from time to time
in the manner provided by Law. The principal office of the Company shall be at
such place as the Manager may designate from time to time, which need not be in
the State of Delaware, and the Company shall maintain records at such place. The
Company may have such other offices as the Manager may designate from time to
time.

SECTION 2.6 No State-Law Partnership. The Members intend that the Company shall
not be a partnership (including a limited partnership) or joint venture, and
that no Member or Officer shall be a partner or joint venturer of any other
Member or Officer by virtue of this Agreement, for any purposes other than as
set forth in the following sentence, and this Agreement shall not be construed
to the contrary. The Members intend that, effective as of the date of the
Contribution (as defined in the Contribution Agreement), the Company shall be
treated as a partnership for federal, state or local income tax purposes, and
each Member and the Company shall file all tax returns and shall otherwise take
all tax and financial reporting positions in a manner consistent with such
treatment.

ARTICLE III - UNITS

SECTION 3.1 Authorized Units; Certificates.

(a) Authorized Units. The only interests in the Company shall be units
(“Units”). The total number of Units that the Company shall have authority to
issue shall be determined by the Manager. The Units shall be initially
designated as (a) Class A Common

 

21

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Units having the rights, preferences, privileges and restrictions set forth in
this Agreement (each, a “Class A Common Unit,” and collectively, the “Class A
Common Units”), (b) Class B Common Units having the rights, preferences,
privileges and restrictions set forth in this Agreement (each, a “Class B Common
Unit,” and collectively, the “Class B Common Units”), and (c) Convertible
Preferred Units having the rights, preferences, privileges and restrictions
(which, subject to Section 4.2(b) and without prejudice to A/N’s rights under
the Stockholders Agreement, may be junior to, equivalent to or senior to any
existing or future class or series of Units) set forth in this Agreement (each,
a “Convertible Preferred Unit,” and collectively, the “Convertible Preferred
Units”). In addition to the foregoing, but subject to the third sentence of
Section 4.2(b) of this Agreement and, subject to Section 4.8, Section 2.3(a) of
the Exchange Agreement and without prejudice to A/N’s rights under the
Stockholders Agreement, the Manager is hereby expressly authorized to take any
action to create any class of Units that was not previously outstanding,
designated or authorized, each having such relative rights, preferences,
privileges, restrictions, and interests in profits, losses, allocations and
distributions of the Company, including Units to be issued to directors and/or
employees of New Charter, the Company or their respective Subsidiaries for
compensation purposes, as may be determined by the Manager with no further
action required by the Members. This Agreement shall be amended by the Manager
in order to document such new classes of Units and their rights, preferences,
privileges and restrictions and interests in profits, losses, allocations and
distributions of the Company, in each case, with no further action required by
the Members. Class B Common Units automatically shall be convertible only into
Class A Common Units on a one-for-one basis as specified in Section 3.2. The
Company may only issue Class A Common Units to members of the Charter Group. The
initial holdings of Units shall be as set forth on Schedule I.

(b) Convertible Preferred Unit Certificates.

(i) At the request of a Convertible Preferred Unitholder, the Company shall
issue or cause to be issued to such Convertible Preferred Unitholder one or more
duly executed Convertible Preferred Unit Certificates duly countersigned by and
registered on the books of the Company, in the form attached hereto as Exhibit B
in the name of and in such denominations requested by the requesting Convertible
Preferred Unitholder evidencing the Convertible Preferred Units held by such
Convertible Preferred Unitholder.

(ii) If any mutilated original Convertible Preferred Unit Certificate is
surrendered to the Transfer Agent, the appropriate Officers on behalf of the
Company shall execute, and the Transfer Agent shall countersign and deliver in
exchange therefor, a new Convertible Preferred Unit Certificate evidencing the
same number of such Convertible Preferred Units so surrendered. In addition, the
Transfer Agent and the appropriate Officers on behalf of the Company shall
execute and the Transfer Agent shall countersign and deliver, a new Convertible
Preferred Unit Certificate in place of any Convertible Preferred Unit
Certificate previously issued if the record holder of the Units evidenced by the
Convertible Preferred Unit Certificate (i) provides proof by affidavit, in form
and substance satisfactory to the Company and the Transfer Agent (if any), that
a previously issued Convertible Preferred Unit Certificate has been lost,

 

22

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destroyed or stolen; (ii) requests the issuance of a new Convertible Preferred
Unit Certificate before the Company has notice that the Convertible Preferred
Unit Certificate has been acquired by a purchaser for value in good faith and
without notice of an adverse claim; (iii) if requested by the Company or the
Transfer Agent (if any), delivers to the Company a bond, in form and substance
satisfactory to the Company and the Transfer Agent (if any) with surety or
sureties and with fixed or open penalty as the Company may direct to indemnify
the Company and the Transfer Agent against any claim that may be made on account
of the alleged loss, destruction or theft of Convertible Preferred Unit
Certificate; and (iv) satisfies any other reasonable requirements imposed by the
Company or the Transfer Agent (if any). If a transfer of Convertible Preferred
Units evidenced by a lost, stolen or destroyed Convertible Preferred Unit
Certificate is registered before the Transfer Agent receives notification in
writing from the record holder of such loss, destruction or theft, the record
holder shall be precluded from making any claim against the Company or the
Transfer Agent for such transfer or for a new Convertible Preferred Unit
Certificate.

SECTION 3.2 Capital Structure of the Company and New Charter.

(a) Issuance of Class A Common Units. If upon the issuance by New Charter of any
shares of Class A Common Stock, New Charter and a Member agree that New Charter
shall transfer the net proceeds of such issuance directly to a Member in
exchange for a number of Class B Common Units equal to the number of shares of
Class A Common Stock to which such net proceeds relate, as provided in
Section 2.3(b) of the Exchange Agreement, the Class B Common Units so acquired
by New Charter automatically shall be converted, without any action on the part
of any Person, including the holder thereof, into an equal number of Class A
Common Units, and the Class B Common Units so exchanged shall thereby cease to
exist. In such event, subject to Section 4.8, New Charter shall take such other
action as is necessary to preserve the 1:1 Up-C structure between New Charter
and the Company.

(b) Redemption of Common Units. Notwithstanding anything to the contrary herein
or in the Exchange Agreement:

(i) Subject to Section 4.8, the Manager, in its sole discretion, may cause the
Company to distribute to any member of the Charter Group all of the stock of any
wholly owned Subsidiary of the Company in redemption of Class A Common Units
held by the Charter Member, provided, that, as soon as reasonably practicable
following such transfer, such member of the Charter Group shall contribute all
of the assets and liabilities of such Subsidiary to the Company in consideration
of the issuance of an equal number of Class A Common Units to the Charter
Member. Subject to Section 4.8, New Charter shall, in addition, take such other
action as is necessary to preserve the 1:1 Up-C structure between New Charter
and the Company.

(ii) Subject to Section 3.2(b)(iii) and Section 4.8(a), in connection with any
repurchase, redemption or other acquisition of shares of Class A Common Stock by
any member of the Charter Group, the Manager shall cause the Company to make a
distribution to the Charter Member in redemption of a number of Class A Common

 

23

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Units held by such member of the Charter Group equal to the number of shares of
Class A Common Stock to be repurchased, redeemed or otherwise acquired and at
the price per Class A Common Unit equal to the price that will be or is required
to be paid per share of Class A Common Stock in such repurchase, redemption or
other acquisition; provided, that immediately following repurchase, redemption
or other acquisition, A/N’s Equity Interest shall not exceed its Cap. In such
event, subject to Section 4.8, New Charter shall, in addition, take such other
action as is necessary to preserve the 1:1 Up-C structure between New Charter
and the Company.

(iii) To the extent A/N’s Equity Interest equals or exceeds its Cap, in
connection with any repurchase of shares of Class A Common Stock by any member
of the Charter Group, the Manager shall cause the Company to make a distribution
to the Charter Member and a distribution to A/N, pro rata according to the
number of Common Units held by the Charter Member and the number of Common Units
held by A/N (including any Common Units into which Convertible Preferred Units
held by A/N are convertible), respectively, in each case in redemption of a
number of Common Units held by such Person (or Convertible Preferred Units
convertible into a number of Common Units) such that the number of Class A
Common Units so redeemed from the Charter Member is equal to the number of
shares of Class A Common Stock to be repurchased and at the price per Class A
Common Unit equal to the price that will be or is required to be paid per share
of Class A Common Stock in such repurchase(s). In the event that A/N
participates in such distribution in accordance with this Section 3.2(b)(iii),
A/N shall be entitled to elect to surrender its pro rata amount for redemption
in the form of Class B Common Units, Convertible Preferred Units or a
combination of the two that it determines in its sole discretion. Any
Convertible Preferred Units so surrendered by A/N shall be converted into Class
B Common Units immediately prior to the redemption at the applicable Per Unit
Amount. In such event, subject to Section 4.8, New Charter shall, in addition,
take such other action as is necessary to preserve the 1:1 Up-C structure
between New Charter and the Company.

(iv) Notwithstanding and without limiting the foregoing, New Charter may
repurchase shares of Class A Common Stock using proceeds received from any
Common Tax Distribution, in which case the Common Tax Distributions made to each
Member shall be in redemption of Common Units, pro rata according to the number
of Common Units held by each Member, such that the number of Class A Common
Units redeemed from the Charter Member is equal to the number of shares of
Class A Common Stock to be repurchased, and at the price per Class A Common Unit
equal to the price that is actually paid per share of Class A Common Stock in
such repurchase(s). In such event, subject to Section 4.8, New Charter shall, in
addition, take such other action as is necessary to preserve the 1:1 Up-C
structure between New Charter and the Company.

(v) Notice of every redemption pursuant to Section 3.2(b) shall be given in
writing in accordance with Section 8.6 and addressed to the holders of record of
the Units to be redeemed at their respective last addresses appearing on the
books of the Company. Any such notice given in accordance with Section 8.6 shall
be

 

24

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conclusively presumed to have been duly given, whether or not the holder
receives such notice. Each notice of redemption given to a holder shall state:
(i) the redemption date; (ii) the amount of the Class B Common Units to be
redeemed and (iii) the redemption price.

(c) Guiding Principles.

(i) In furtherance and not in limitation of the foregoing, but without prejudice
to A/N’s rights under the Stockholders Agreement, it is the intent of the
parties hereto that the Company shall be a dynamic institution, and, subject to
Sections 3.3(c)(xiv) and 4.2(b) of this Agreement and Section 2.2(b) of the
Exchange Agreement, nothing herein shall prevent the Company from participating
in the capital markets at such times and upon such terms as the Manager shall
reasonably determine.

(ii) Subject to Section 4.8, it is the intent of the parties hereto that New
Charter and the Company shall maintain a 1:1 Up-C structure (except with respect
to Class B Common Units and Convertible Preferred Units), as set forth in
Section 2.3(a) of the Exchange Agreement.

SECTION 3.3 Optional Conversion of Convertible Preferred Units.

(a) Conversion Mechanics. Subject to any restrictions on the acquisition of
Common Units or shares of Class A Common Stock set forth in the Specified
Documents and subject to the Exchange Agreement, the right of conversion
attaching to any Convertible Preferred Units may be exercised at any time, from
time to time, at the option of the holders thereof by delivering to the office
of the General Counsel of the Company a duly signed and completed notice of
conversion (a “Conversion Notice”) substantially in the form attached hereto as
Exhibit D, together with the Convertible Preferred Unit Certificates (if any
such Convertible Preferred Unit Certificates have been issued) representing the
Convertible Preferred Units to be converted. The Person entitled to receive the
Class B Common Units or shares of Class A Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Class B Common Units or shares of Class A Common Stock, as applicable, as
of the Conversion Date and such Person or Persons shall cease to be a record
holder of the Convertible Preferred Units so converted on such date. As promptly
as practicable on or after the Conversion Date (and in any event no later than
three (3) Business Days thereafter), the Company shall issue the number of Class
B Common Units or New Charter shall issue the number of shares of Class A Common
Stock, as applicable, issuable upon conversion, with any fractional shares
(after aggregating all Convertible Preferred Units being converted on such date)
rounded down to the nearest whole number, or the Company or New Charter shall
deliver or cause to be delivered such other consideration as the converting
Convertible Preferred Unitholder is entitled to hereunder. The delivery of Class
B Common Units or Class A Common Stock shall be made, at the option of the
Company or New Charter, in certificated form or by book-entry. Any such
certificate or certificates shall be delivered by the Company or New Charter, as
applicable, to the appropriate holder on a book-entry basis or by mailing
certificates evidencing the shares to the holders at their respective addresses
as set forth in the Conversion Notice (or, with respect to a deemed Conversion
Notice pursuant to

 

25

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Section 3.4(a), to the last address for such holder appearing on the books of
the Company). Upon each conversion of Convertible Preferred Units held by a
Person other than A/N, as of the effective date of such conversion, the Company
shall issue to the Charter Member that number of Class A Common Units equal to
the number of shares of Class A Common Stock to be issued to such Person in such
conversion and, in such event, subject to Section 4.8, New Charter shall take
such other steps as may be necessary to preserve the 1:1 Up-C structure as set
forth in Section 2.3(a) of the Exchange Agreement. In the event that the Class A
Common Stock or Class B Common Units issuable upon a conversion of Convertible
Preferred Units are not delivered or the other consideration payable upon a
conversion of Convertible Preferred Units is not paid to (or as directed by) the
converting Convertible Preferred Unitholder within three (3) Business Days of
the Conversion Date as provided herein, in addition to any other remedies
provided herein or available at law or in equity, the converting Convertible
Preferred Unitholder shall be entitled to receive the Convertible Preferred
Yield as if such holder still held the Convertible Preferred Units surrendered
for conversion and shall have the right to rescind such Conversion Notice until
the date that the shares of Class A Common Stock and Class B Common Units are
delivered and other consideration payable upon a conversion of Convertible
Preferred Units is paid in the manner set forth herein.

(b) Number of Class B Common Units or Shares of Class A Common Stock. In
connection with any conversion pursuant to Section 3.3(a), Section 3.4(a) or
Section 3.5, each Convertible Preferred Unit held by A/N or any A/N Party shall
be convertible into that number of Class B Common Units, and each Convertible
Preferred Unit held by a Person other than A/N (including in connection with a
foreclosure to which Section 3.5 applies) shall be convertible into that number
of shares of Class A Common Stock (as applicable, the “Per Unit Amount”) equal
to the product of (i) the Conversion Rate in effect at such time, multiplied by
(ii) the quotient of (A) the sum of (I) the Liquidation Preference plus (II) an
amount per share equal to the Preferred Accrued Distribution Amount on such
Convertible Preferred Unit up to but excluding the Conversion Date divided by
(B) the Liquidation Preference.

(c) Adjustments to Conversion Rate.

(i) If New Charter shall, at any time or from time to time while any of the
Convertible Preferred Units are outstanding, issue shares of Class A Common
Stock as a dividend or distribution on shares of the Class A Common Stock, or if
New Charter effects a share split or share combination in respect of the Class A
Common Stock, then the Conversion Rate shall be adjusted based on the following
formula:

 

LOGO [g148819ex101pg026.jpg]

where:

 

CR0    =    the Conversion Rate in effect immediately prior to the Close of
Business on the Record Date for such dividend or distribution, or immediately
prior to the effectiveness of such share split or combination, as applicable;

 

26

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CR1    =    the new Conversion Rate in effect immediately after the Close of
Business on the Record Date for such dividend or distribution, or immediately
after the effectiveness of such share split or combination, as applicable; OS0
   =    the number of shares of Class A Common Stock outstanding at the Close of
Business on the Record Date for such dividend or distribution, or at the
effectiveness of such share split or share combination, as applicable, without
giving effect to such dividend, distribution, share split or combination; and
OS1    =    the number of shares of Class A Common Stock outstanding at the
Close of Business on the Record Date for such dividend or distribution, or at
the effectiveness of such share split or share combination, as applicable, after
giving effect to such dividend, distribution, share split or combination.

Any adjustment made under this Section 3.3(c)(i) shall become effective
immediately after the Close of Business on the Record Date for such dividend or
distribution, or immediately after the effectiveness of such share split or
share combination, as applicable. If any adjustment is made under this
Section 3.3(c)(i) due to a dividend or distribution that is declared but not so
paid or made, the Conversion Rate shall be immediately readjusted, effective as
of the date the Board of Directors determines not to pay such dividend or
distribution, to the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared.

(ii) If New Charter shall, at any time or from time to time while any of the
Convertible Preferred Units are outstanding, distribute to all or substantially
all holders of the outstanding shares of Class A Common Stock any options,
rights or warrants entitling them for a period of not more than 60 calendar days
from the Record Date of such distribution to subscribe for or purchase shares of
Class A Common Stock at a price per share less than the VWAP for the Class A
Common Stock for the ten (10) consecutive Trading Days ending on and including
the date immediately preceding the Record Date of such distribution, the
Conversion Rate shall be adjusted based on the following formula:

 

LOGO [g148819ex101pg027.jpg]

where:

 

CR0    =    the Conversion Rate in effect immediately prior to the Close of
Business on the Record Date for such distribution; CR1    =    the new
Conversion Rate in effect immediately after the Close of Business on the Record
Date for such distribution; OS0    =    the number of shares of Class A Common
Stock outstanding immediately prior to the Close of Business on the Record Date
for such distribution;

 

27

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X    =    the total number of shares of Class A Common Stock issuable pursuant
to such options, rights or warrants; and Y    =    the number of shares of Class
A Common Stock equal to the quotient of (a) the aggregate price payable to
exercise such options, rights or warrants divided by (b) the VWAP for the Class
A Common Stock for the ten (10) consecutive Trading Days ending on and including
the Trading Day preceding the Record Date of such distribution.

Any increase made under this Section 3.3(c)(ii) shall be made successively
whenever any such rights, options or warrants are issued and shall become
effective immediately after the Close of Business on the Record Date for such
distribution. To the extent that shares of Class A Common Stock are not
delivered pursuant to any such options, rights or warrants prior to the
expiration or termination of such options, rights or warrants, the Conversion
Rate shall be readjusted to the Conversion Rate which would then be in effect
had the adjustments made upon the distribution of such options, rights or
warrants been made on the basis of the delivery of only the number of shares of
Class A Common Stock actually delivered. In determining the aggregate price
payable to exercise such options, rights or warrants, there shall be taken into
account any amount payable on exercise thereof, with the value of such
consideration, if other than cash, to be determined by the Board of Directors in
good faith.

(iii) If New Charter, at any time or from time to time while any of the
Convertible Preferred Units are outstanding, shall pay or make a dividend or
other distribution on the Class A Common Stock consisting of shares of Capital
Stock of any class or series, or similar equity interest, of or relating to a
Subsidiary or other business unit of the Company that are, or when issued will
be, listed or admitted for trading on a U.S. national securities exchange (a
“Spin-Off”), the Conversion Rate shall be increased based on the following
formula:

 

LOGO [g148819ex101pg028.jpg]

where:

 

CR0    =    the Conversion Rate in effect immediately prior to the Close of
Business on the tenth (10th) Trading Day immediately following, and including,
the Trading Day following the effective date of the Spin-Off; CR1    =    the
new Conversion Rate in effect immediately after the Close of Business on the
tenth (10th) Trading Day immediately following, and including, the Trading Day
following the effective date of the Spin-Off; FMV    =    the VWAP of the
Capital Stock or similar equity interest distributed to holders of Class A
Common Stock for the ten (10) consecutive Trading Days commencing on and
including the Trading Day following the effective date of the Spin-Off,
multiplied by the number of shares of such Capital Stock or similar equity
interest applicable to one such of Class A Common Stock; and SP1    =    the
VWAP of the Class A Common Stock for the ten (10) consecutive Trading Days
commencing on and including the Trading Day following the effective date of the
Spin-Off.

 

28

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The adjustment to the Conversion Rate under the preceding paragraph shall occur
on the 10th Trading Day immediately following, and including, the Trading Day
following the effective date of the Spin-Off; provided, that in respect of any
conversion of Convertible Preferred Units between the effective date of the
Spin-Off and the date of adjustment, references in this Section 3.3(c)(iii) to
ten (10) consecutive Trading Days shall be deemed replaced with such lesser
number of Trading Days as have elapsed from, and including, the Trading Day
following the effective date of the Spin-Off to, and including, the relevant
Conversion Date.

(iv) If New Charter, at any time or from time to time while any of the
Convertible Preferred Units are outstanding, shall distribute to all or
substantially all holders of Class A Common Stock any dividends payable
exclusively in cash (other than dividends distributed in connection with any
Common Tax Distributions), the Conversion Rate shall be adjusted based on the
following formula:

 

LOGO [g148819ex101pg029.jpg]

where:

 

CR0    =    the Conversion Rate in effect immediately prior to the Close of
Business on the Record Date for such distribution; CR1    =    the new
Conversion Rate in effect immediately after the Close of Business on the Record
Date for such distribution; SP0    =    the VWAP of the Class A Common Stock for
the ten (10) consecutive Trading Days ending on and including the Trading Day
immediately preceding the Record Date for such distribution; and C    =    the
amount in cash per share of Class A Common Stock that New Charter distributes to
holders of the Class A Common Stock.

Any adjustment made under this Section 3.3(c)(iv) shall become effective
immediately after the Close of Business on the Record Date for such dividend or
distribution. If any dividend or distribution of the type described in this
Section 3.3(c)(iv) is declared but not so paid or made, the Conversion Rate
shall be immediately readjusted, effective as of the date the Board of Directors
determines not to pay such dividend or distribution, to the Conversion Rate that
would then be in effect if such dividend or distribution had not been declared.
Notwithstanding the foregoing, if C as set forth above is equal to or

 

29

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greater than SP0 as set forth above, then in lieu of the foregoing adjustment,
the Company shall distribute to each holder of Convertible Preferred Units, in
respect of each Convertible Preferred Unit held by such holder, on the date cash
is distributed to holders of Class A Common Stock, but without requiring such
holder to convert its Convertible Preferred Units, the amount of cash such
holder would have received had such holder owned a number of shares of Class A
Common Stock equal to the Per Unit Amount on the Record Date fixed for
determination for stockholders entitled to receive such cash distribution.

(v) If New Charter, at any time or from time to time while any of the
Convertible Preferred Units are outstanding, shall distribute to all or
substantially all holders of the Class A Common Stock shares of any class of
Capital Stock of New Charter, evidences of its indebtedness, assets, property or
rights or warrants to acquire Capital Stock or other securities, but excluding
(A) dividends or distributions as to which an adjustment under Section 3.3(c)(i)
or Section 3.3(c)(ii) shall apply, (B) dividends or distributions paid
exclusively in cash (as to which the provisions set forth in Section 3.3(c)(iv)
shall apply), (C) Spin-Offs (as to which the provisions set forth in
Section 3.3(c)(iii) shall apply) and (D) dividends distributed in connection
with any Common Tax Distributions (any of such shares of Capital Stock,
indebtedness, assets, property or rights or warrants to acquire Capital Stock or
other securities, hereinafter in this Section 3.3(c)(v) called the “Distributed
Property”), then, in each such case the Conversion Rate shall be adjusted based
on the following formula:

 

LOGO [g148819ex101pg030.jpg]

where:

 

CR0    =    the Conversion Rate in effect immediately prior to the Close of
Business on the Record Date for such distribution; CR1    =    the new
Conversion Rate in effect immediately after the Close of Business on the Record
Date for such distribution; SP0    =    the VWAP of the Class A Common Stock for
the ten (10) consecutive Trading Days ending on and including the date preceding
the Record Date for such distribution; and FMV    =    (I) for cash dividends or
distributions, the amount of cash distributed and (II) for other Distributed
Property, the fair market value (as determined by the Board of Directors in good
faith) of the portion of Distributed Property, in each case, with respect to
each outstanding share of Class A Common Stock on the Record Date for such
distribution.

Any increase made under the portion of this Section 3.3(c)(v) shall become
effective immediately after the close of business on the Record Date for such
distribution. If such distribution is not so paid or made, the Conversion Rate
shall be decreased to the

 

30

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Conversion Rate that would then be in effect if such distribution had not been
declared. Notwithstanding the foregoing, if FMV as set forth above is equal to
or greater than SP0 as set forth above (a “Liquidating Distribution”), then in
lieu of the foregoing adjustment, the Company shall distribute to each holder of
Convertible Preferred Units, in respect of each Convertible Preferred Unit held
by such holder, on the date such Distributed Property is distributed to holders
of Class A Common Stock, but without requiring such holder to convert its
Convertible Preferred Units, the amount of Distributed Property such holder
would have received had such holder owned a number of shares of Class A Common
Stock equal to the Per Unit Amount on the Record Date fixed for determination
for stockholders entitled to receive such Liquidating Distribution. If the Board
of Directors determines the fair market value of any distribution for purposes
of this Section 3.3(c)(v) by reference to the actual or when issued trading
market for any securities, it shall in doing so consider the prices in such
market over the same period used in calculating SP0 in the formula in this
Section 3.3(c)(v).

Any dividend or distribution to which this Section 3.3(c)(v) is applicable that
also includes shares of Class A Common Stock, or options, rights or warrants to
subscribe for or purchase shares of Class A Common Stock to which
Section 3.3(c)(i) or Section 3.3(c)(ii) applies (or both) shall be deemed
instead to be (A) a dividend or distribution of the evidences of indebtedness,
assets or shares of Capital Stock other than such shares of Class A Common Stock
or options, rights or warrants to which Section 3.3(c)(i) or Section 3.3(c)(ii)
applies (and any Conversion Rate adjustment required by this Section 3.3(c)(v)
with respect to such dividend or distribution shall then be made) immediately
followed by (B) a dividend or distribution of such shares of Class A Common
Stock or such options, rights or warrants to which Section 3.3(c)(i) or
Section 3.3(c)(ii) applies (and any further Conversion Rate adjustment required
by Section 3.3(c)(i) or Section 3.3(c)(ii) with respect to such dividend or
distribution shall then be made), except (I) the Close of Business on the Record
Date for the distribution under this Section 3.3(c)(v) shall be substituted for
“the Close of Business on the Record Date for such dividend or distribution, or
immediately prior to the effectiveness of such share split or share
combination,” “the Close of Business on the Record Date for such dividend or
distribution, or immediately after the effectiveness of such share split or
share combination” and “the Close of Business on the Record Date for such
distribution” within the meaning of Section 3.3(c)(i) and Section 3.3(c)(ii)
hereof, respectively, and (II) any shares of Class A Common Stock included in
such dividend or distribution shall not be deemed “outstanding immediately prior
to the Close of Business on the Record Date for such dividend or distribution,
or immediately prior to the effectiveness of such share split or combination”
within the meaning of Section 3.3(c)(i) or “outstanding immediately prior to the
Close of Business on the Record Date for such distribution” within the meaning
of Section 3.3(c)(ii).

(vi) If New Charter or any of its Subsidiaries, at any time or from time to time
while any of the Convertible Preferred Units are outstanding, shall make a
payment to holders of Class A Common Stock in respect of a tender or exchange
offer by New Charter for shares of Class A Common Stock, to the extent that the
cash and value

 

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(as determined by the Board of Directors in good faith) of any other
consideration included in the payment per share of Class A Common Stock exceeds
the VWAP of the Class A Common Stock for the ten (10) consecutive Trading Days
commencing on the Trading Day immediately following the last date on which
tenders or exchanges could be validly made pursuant to such tender or exchange
offer (such last date, the “Expiration Date”), the Conversion Rate shall be
adjusted based on the following formula:

 

LOGO [g148819ex101pg032.jpg]

where:

 

CR0    =    the Conversion Rate in effect immediately prior to the Close of
Business on the last Trading Day of the ten (10) consecutive Trading Day period
commencing on, and including, the Trading Day immediately following the
Expiration Date; CR1    =    the new Conversion Rate in effect immediately after
the Close of Business on the last Trading Day of the ten (10) consecutive
Trading Day period commencing on, and including, the Trading Day immediately
following the Expiration Date; FMV    =    the fair market value (as determined
by the Board of Directors in good faith) of the aggregate consideration paid or
payable in such tender or exchange offer (up to any maximum amount specified in
the terms of the tender or exchange offer) for all shares of Class A Common
Stock that New Charter purchases in such tender or exchange offer, such fair
market value to be measured as of the expiration time of the tender or exchange
offer (“Expiration Time”); OS0    =    the number of shares of Class A Common
Stock outstanding immediately prior to the Expiration Time; OS1    =    the
number of shares of Class A Common Stock outstanding immediately after the
Expiration Time (after giving effect to such tender offer or exchange offer);
and SP1    =    the VWAP of the Class A Common Stock for the ten (10)
consecutive Trading Days commencing on and including the Trading Day immediately
following the Expiration Date.

The adjustment to the Conversion Rate under this Section 3.3(c)(vi) shall occur
at the Close of Business on the last Trading Day of the ten (10) consecutive
Trading Day period commencing on, and including, the Trading Day immediately
following the Expiration Date; provided, that, for purposes of determining the
Conversion Rate, in respect of any conversion during the ten (10) Trading Days
immediately following, but excluding, the

 

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Expiration Date, references in this Section 3.3(c)(vi) to ten (10) consecutive
Trading Days shall be deemed to be replaced with such lesser number of
consecutive Trading Days as have elapsed between the date from and immediately
following the Expiration Date and the relevant Conversion Date. Except as set
forth in the following sentence, no adjustment to the Conversion Rate under this
Section 3.3(c)(vi) shall be made if such adjustment would decrease the
Conversion Rate. If the Company or one of its Subsidiaries is obligated to
purchase the Class A Common Stock pursuant to any such tender or exchange offer
but the Company or such Subsidiary is permanently prevented by applicable law
from effecting any such purchase or all such purchases are rescinded, the
Conversion Rate shall be immediately readjusted to the Conversion Rate that
would be in effect if such tender or exchange offer had not been made.

(vii) If New Charter shall, at any time or from time to time while any of the
Convertible Preferred Units are outstanding, distribute options, rights or
warrants to all or substantially all holders of Class A Common Stock entitling
the holders thereof to subscribe for, purchase or convert into shares of Capital
Stock (either initially or under certain circumstances), only upon or after the
occurrence of a specified event or events (“Trigger Event”) and (i) such
options, rights or warrants are deemed to be transferred with such Class A
Common Stock, (ii) are not exercisable and (iii) are also issued in respect of
future issuances of Class A Common Stock, then such options, rights or warrants
shall be deemed not to have been distributed for purposes of Section 3.3(c)(i),
Section 3.3(c)(ii), Section 3.3(c)(iii) or Section 3.3(c)(v) (and no adjustment
to the Conversion Rate under Section 3.3(c)(i), Section 3.3(c)(ii),
Section 3.3(c)(iii) or Section 3.3(c)(v) shall be required) until the occurrence
of the earliest Trigger Event and a distribution or deemed distribution under
the terms of such options, rights or warrants at which time an appropriate
adjustment (if any is required) to the Conversion Rate shall be made in the same
manner as provided for under Section 3.3(c)(i), Section 3.3(c)(ii),
Section 3.3(c)(iii) or Section 3.3(c)(v), as applicable; provided, that
notwithstanding anything herein to the contrary, no adjustment to the Conversion
Rate shall be made with respect to a Trigger Event that relates to the
separation of rights pursuant to a rights plan of New Charter if A/N or any of
its Affiliates (including any of its or their lenders to which any Units have
been pledged) is an “acquiring person” or similar person for which such rights
would not be exercisable pursuant to such rights plan. If any such options,
rights or warrants, including any existing rights, options or warrants
distributed prior to the date of this Agreement, are subject to events, upon the
occurrence of which such options, rights or warrants become exercisable to
purchase different securities, evidences of indebtedness or other assets, then
the date of the occurrence of any and each such event shall be deemed to be the
date of distribution and Record Date with respect to new options, rights or
warrants for purposes of Section 3.3(c)(i), Section 3.3(c)(ii),
Section 3.3(c)(iii) or Section 3.3(c)(v), as applicable (and shall be deemed to
be the date of termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of options, rights or warrants or any
Trigger Event or other event (of the type described in the preceding sentence)
with respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Rate under Section 3.3(c)(i),
Section 3.3(c)(ii), Section 3.3(c)(iii) or

 

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Section 3.3(c)(v) was made, (I) in the case of any such options, rights or
warrants that shall all have been redeemed or repurchased without exercise by
any holders thereof, upon such final redemption or repurchase (x) the Conversion
Rate shall be readjusted as if such rights, options or warrants had not been
issued and (y) the Conversion Rate shall then be readjusted upon such final
redemption or repurchase to give effect to such distribution, deemed
distribution or Trigger Event, as the case may be, as though it were a
distribution under Section 3.3(c)(i), Section 3.3(c)(ii), Section 3.3(c)(iii) or
Section 3.3(c)(v), equal to the per share redemption or repurchase price
received by a holder or holders of Class A Common Stock with respect to such
options, rights or warrants (assuming such holder had retained such options,
rights or warrants), made to all holders of Class A Common Stock as of the date
of such redemption or repurchase, and (II) in the case of such options, rights
or warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such options,
rights or warrants had not been issued.

(viii) Whenever the Conversion Rate is adjusted as provided in this
Section 3.3(c), the Manager shall promptly prepare a notice of such adjustment,
signed by a duly authorized officer of Manager, setting forth the reason for the
adjustment, the adjusted Conversion Rate, the calculation thereof and the date
on which the adjustment becomes effective and shall provide such notice of
adjustment to the Convertible Preferred Unitholders in accordance with
Section 8.6.

(ix) To the extent that New Charter has a rights plan in effect upon any
conversion of Convertible Preferred Units, each share of Class A Common Stock
delivered upon conversion shall be entitled to receive the appropriate number of
rights, if any, and the certificates (if any) representing the Class A Common
Stock delivered upon such conversion shall bear such legends, if any, in each
case as may be provided by the terms of any such stockholder rights plan, as the
same may be amended form time to time.

(x) For the purposes of this Section 3.3(c), the number of Class A Common Stock
outstanding shall not include Class A Common Stock held in the treasury of New
Charter so long as New Charter does not pay any dividend or make any
distribution to the Class A Common Stock held in the treasury of New Charter,
but shall include Class A Common Stock in respect of scrip certificates (if any)
issued in lieu of fractions of such shares.

(xi) If a Conversion Date occurs before the effective time of a Conversion Rate
adjustment under this Section 3.3(c) and (A) in the case that such Conversion
Date relates to a conversion into Class A Common Stock, the Class A Common Stock
received in such conversion would not be entitled to participate in the
dividend, distribution, split, combination, tender offer, exchange offer, or
other event that gave rise to such Conversion Rate adjustment (each such event,
a “Conversion Rate Adjustment Event”), or (B) in the case that such Conversion
Date relates to a conversion into Class B Common Units, the Class B Common Units
received in such conversion would be not be entitled to participate in any pro
rata distribution or dividend or other

 

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event to be made with respect to the Common Units in connection with such
Conversion Rate Adjustment Event, then notwithstanding the provisions of
subsections (i) through (vi) of Section 3.3(c), the effective time of such
Conversion Rate Adjustment shall be accelerated to immediately prior to the
Conversion Date. For the avoidance of doubt, if a Conversion Date occurs before
the effective time of a Conversion Rate adjustment under this Section 3.3(c) and
the conditions set forth in clause (A) or (B) above, as applicable, are not met,
the Conversion Rate in effect for purposes of calculating the Per Unit Amount
under Section 3.3(b) shall not give effect to such Conversion Rate Adjustment
Event.

(xii) If a Conversion Date occurs after the effective time (as may be modified
by operation of Section 3.3(c)(xi)) of a Conversion Rate increase under this
Section 3.3(c) that is subject to readjustment, then notwithstanding Sections
3.3(a) and 3.3(b), the Company shall issue (A) as promptly as practicable on or
after the Conversion Date (and in any event no later than three (3) Business
Days thereafter) such number of Class B Common Units or shares of Class A Common
Stock, as applicable, as would have been issued under Section 3.3(a) if such
Conversion Rate adjustment had not been given effect, and (B) as promptly as
practicable on or after the final readjustment or first date on which the
adjustment is no longer subject to readjustment (and in any event no later than
three (3) Business Days thereafter) a number of Class B Common Units or shares
of Class A Common Stock, as applicable, equal to the excess of (1) the amount
that would be issued under Section 3.3(a) after giving effect to such Conversion
Rate adjustment and any readjustments less (2) the amount issued pursuant to
clause (A).

(xiii) Recapitalizations, Reclassifications and other Transactions

(A) In the case of any recapitalization, reclassification or similar change of
the Class A Common Stock or Class B Common Units (other than changes resulting
from a share split or share combination described in Section 3.3(c)(i) or any
other event for which an adjustment to the Conversion Rate is required pursuant
to the other provisions of this Section 3.3(c)), a consolidation, merger or
combination involving New Charter or the Company, a sale, lease or other
transfer to a third party of all or substantially all of the assets of New
Charter or the Company (or New Charter or the Company and their respective
Subsidiaries on a consolidated basis), or any statutory share exchange, in each
case, as a result of which the Class A Common Stock or Class B Common Units
would be converted into, or exchanged for, stock, other securities or other
property or assets (including cash or a combination thereof) (but, in each case,
excluding a Change of Control (to which Section 3.4(b) will apply) (any of the
foregoing, a “Recapitalization”), then, prior to the effective time of such
Recapitalization, the Manager (or the successor or purchasing Person, as the
case may be) shall effect an amendment to this Agreement (a “Recapitalization
Amendment”) providing that at the effective time of the Recapitalization, the
right to convert each Convertible Preferred Unit will be changed into a right to
convert such Convertible Preferred Unit into the kind and amount of shares of
stock, other securities or other property or assets (including cash or a

 

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combination thereof) (the “Reference Property”) that a holder would have
received in respect of the shares of Class A Common Stock or Class B Common
Units, as applicable, issuable upon conversion of such Convertible Preferred
Units immediately prior to the consummation of such Recapitalization. In the
event that holders of Class A Common Stock or Class B Common Units, as
applicable, have the opportunity to elect the form of consideration to be
received in the Recapitalization, then the Reference Property into which the
Convertible Preferred Units shall be convertible shall be deemed to be the
weighted average of the types and amounts of consideration received by the
holders of Class A Common Stock or Class B Common Units, as applicable. The
Company shall provide written notice to the Convertible Preferred Unitholders of
such weighted average as soon as practicable after such determination is made.

(B) Any Recapitalization Amendment shall provide for anti-dilution and other
adjustments that shall be as nearly equivalent as is practicable to the
adjustments provided for in this Section 3.3(c), it being understood that no
such adjustments shall be required with respect to any portion of the Reference
Property that does not consist of equity interests, partnership interests or
membership units.

(C) If, in the case of any Recapitalization, the Reference Property includes
shares of stock, other securities or other property or assets (including cash or
a combination thereof) of a Person other than New Charter, the Company or the
successor or purchasing Person, as the case may be, then such Recapitalization
Amendment shall contain additional provisions as nearly equivalent as is
practicable to the provisions of this Agreement to protect the interests of the
Convertible Preferred Unitholders, including those set forth in Section 3.4(b).

(D) If, as a result of any Recapitalization, the Company is dissolved or
otherwise ceases to continue in existence, then the term “Recapitalization
Amendment” shall refer to such documentation as is necessary to provide
Convertible Preferred Unitholders with a convertible preferred security that is
substantially equivalent in all respects to the Convertible Preferred Units,
including with respect to coupon, penalty interest, make-whole upon a Change of
Control and consent rights over the issuance of pari passu and senior equity
interests in addition to the other rights to be provided for in such
Recapitalization Amendment set forth in this Section 3.3(c)(xiii).

(E) The provisions of this Section 3.3(c)(xiii) shall apply to successive
Recapitalizations and neither New Charter nor the Company shall become a party
to any Recapitalization unless its terms are consistent with the foregoing.
Nothing in this Section 3.3(c)(xiii) shall affect the ability of a Convertible
Preferred Unitholder to convert a Convertible Preferred Unit prior to the
effective date of a Recapitalization.

 

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(xiv) New Charter shall at all times reserve and keep available out of its
authorized but unissued Class A Common Stock such number of shares of Class A
Common Stock necessary to satisfy its obligations under Section 3.3(a). New
Charter shall be permitted to take any and all actions necessary or desirable to
give effect to the foregoing.

(xv) The Company shall bear its and the Charter Group’s expenses and each
converting holder, or, in the event of an automatic conversion of Convertible
Preferred Units pursuant to Section 3.5, the applicable lender(s) shall bear its
own expenses in connection with the consummation of any conversion of
Convertible Preferred Units, whether or not any such conversion is ultimately
consummated, except that the Company shall bear any transfer taxes, stamp taxes
or duties or other similar taxes in connection with, or arising by reason of,
any conversion; provided, that if any shares of Class A Common Stock or Class B
Common Units are to be delivered in a name other than that of the Convertible
Preferred Unitholder that requested the conversion, then such converting holder
or the Person in whose name such shares or Units are to be delivered shall pay
to the Company the amount of any transfer taxes, stamp taxes or duties or other
similar taxes in connection with, or arising by reason of, such conversion (to
the extent the amount of any such taxes are in excess of what would be required
to be paid by New Charter or the Company in connection with, or arising by
reason of, such conversion if the shares of Class A Common Stock or Class B
Common Units were to be delivered in the name of the Convertible Preferred
Unitholder that requested the conversion) or shall establish to the reasonable
satisfaction of New Charter and the Company that such tax has been paid or is
not payable. For the avoidance of doubt, each converting Convertible Preferred
Unitholder shall bear any and all income or gains taxes imposed on gain realized
by such converting Convertible Preferred Unitholder as a result of any such
conversion.

(xvi) Any shares of Class A Common Stock and/or Class B Common Units, as
applicable, issued upon conversion of Convertible Preferred Units shall be
validly issued, fully paid and non-assessable, free and clear of all liens,
encumbrances, rights of first refusal and similar restrictions and all taxes and
charges with respect to the issue thereof, in each case subject to the Specified
Documents. New Charter, the Company and each converting holder of Convertible
Preferred Units shall use their respective reasonable best efforts to obtain the
approval of any Government Entity required under any Law prior to and comply
with all federal and state securities laws in connection with the issuance of
the shares of Class A Common Stock and/or Class B Common Units upon conversion
of Convertible Preferred Units as provided herein. In addition, New Charter
shall use its reasonable best efforts to have authorized for listing the shares
of Class A Common Stock issuable upon conversion of the Convertible Preferred
Units on NASDAQ (or such other national securities exchange upon which the
Class A Common Stock of New Charter may be listed at such the time, if any)
prior to the delivery thereof to the converting holder.

 

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SECTION 3.4 Other Conversion or Redemption of Convertible Preferred Units.

(a) Optional Conversion by the Company. From and after the fifth anniversary of
the date hereof, if the Closing Price exceeds an amount equal to 1.3 times the
then-applicable Conversion Price for at least twenty (20) days (which need not
be consecutive) during any thirty (30) consecutive-day period, the Manager may
elect, in its sole discretion, to require that the Convertible Preferred Units
held by any or all A/N Parties be converted into Class B Common Units and/or the
Convertible Preferred Units held by a Person other than an A/N Party be
converted into Class A Common Stock, in each case in whole or in part, by notice
of forced conversion at any time within ten (10) Business Days after the last
day of such thirty (30) consecutive-day period. Such forced conversion notice
shall be deemed to be, and shall have the same effect as, a Conversion Notice;
provided, however, that any accrued and unpaid Preferred Accrued Distribution
Amounts on all Convertible Preferred Units being so converted shall be paid in
cash simultaneously with, and as a condition to, the effectiveness of such
forced conversion.

(b) Make-Whole Redemption in Connection with a Change of Control. On the
effective date of a Change of Control, unless otherwise agreed in writing by the
Charter Member and A/N, each Convertible Preferred Unit shall be redeemed for
the consideration that would have been payable in respect of a number of shares
of Class A Common Stock equal to the greater of (i) the sum of (A) the Per Unit
Amount determined as if the conversion occurred immediately prior to the
effective date of the Change of Control plus (B) the Make-Whole Amount and
(ii) $100 divided by the greater of (A) the Change of Control Class A Common
Stock Price and (B) $95.66 per share, subject to adjustment at the times of, and
in a manner inverse to, adjustments to the Conversion Rate, plus, in the case of
clause (ii), all accrued and unpaid Preferred Accrued Distribution Amounts on
the Units being redeemed. Any such redemption pursuant to this Section 3.4(b)
shall be effective as of the consummation of the Change of Control (and, for the
avoidance of doubt, shall not be effective if such Change of Control is not
consummated).

(c) Notice for Certain Actions.

(i) Forced Conversion or Redemption. Notice of every forced conversion or
redemption of Convertible Preferred Units pursuant to Section 3.4(a) or
Section 3.4(b) shall be given by first class mail, postage prepaid, addressed to
the holders of record of the Units to be converted or redeemed at their
respective last addresses appearing on the books of the Company and a copy of
such notice shall be sent by e-mail on the date of mailing to the respective
e-mail addresses of such holders. Any such notice in connection with a
redemption pursuant to Section 3.4(b) shall be given as provided above at least
15 calendar days prior to the effective date of such Change of Control. Each
notice of a forced conversion of Convertible Preferred Units pursuant to
Section 3.4(a) shall state (A) the number of Convertible Preferred Units to be
converted and, if less than all the Convertible Preferred Units held by such
holder are to be converted, the number of such Convertible Preferred Units to be
converted that are held by such holder; and (B) the place or places where
certificates for such Convertible Preferred Units are to be surrendered for
conversion. Each notice of redemption of

 

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Convertible Preferred Units pursuant to Section 3.4(b) shall state (A) the
events constituting the Change of Control, (B) the anticipated effective date of
the Change of Control, (C) the Conversion Rate, and, if applicable, the
Make-Whole Amount, (D) the consideration to be received upon conversion of
Convertible Preferred Units in connection with such Change of Control, and
(E) the name and address of the paying agent and the conversion agent.

(ii) Other Events. Notice of every event that would require an adjustment to the
Conversion Rate pursuant to Section 3.3(c), a Recapitalization or a voluntary or
involuntary dissolution, liquidation or winding-up of New Charter or the Company
(each, an “Other Event”) shall be given by first class mail, postage prepaid,
addressed to the holders of record of the Convertible Preferred Units at their
respective last addresses appearing on the books of the Company at least fifteen
(15) calendar days prior to the date of the consummation of such event, or, if
later, the date of the first public disclosure by New Charter or the Company of
such event and a copy of such notice shall be sent by e-mail on the date of
mailing to the respective e-mail addresses of such holders. Each notice
delivered pursuant to this Section 3.4(c)(i) shall state (A) the events giving
rise to the Other Event, (B) the anticipated Record Date or effective date, as
applicable, of the Other Event, (C) the Conversion Rate following adjustment (if
any) for the Other Event, and (D) if the Other Event constitutes a
Recapitalization, whether any Reference Property will be received in connection
therewith, and if so, specifying such Reference Property.

(iii) Any notice mailed and e-mailed as provided in this Section 3.4(c) shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice, but failure to give such notice by mail or e-mail, or any
defect in such notice or in the mailing or e-mailing thereof, to any holder of
Convertible Preferred Units designated for conversion or redemption shall not
affect the validity of the proceedings for the conversion or redemption of
Convertible Preferred Units of any other holder. Failure to deliver notice as
provided in this Section 3.4(c) shall not affect the legality or validity of the
corporate event which required notice pursuant to this Section 3.4(c). The
Company shall provide to any Convertible Preferred Unitholder such additional
information as such Convertible Preferred Unitholder may reasonably request in
connection with the circumstances giving rise to an obligation for the Company
to provide notice pursuant to this Section 3.4(c).

(d) Partial Conversion. In case of any conversion pursuant to Section 3.4(a) of
part of the Convertible Preferred Units at the time outstanding, the units to be
converted shall be selected by the Company in its sole discretion. In all other
cases of conversion of part of the Convertible Preferred Units at the time
outstanding, the Convertible Preferred Unitholder shall be entitled to select
the Convertible Preferred Units held by such Convertible Preferred Unitholder
which shall be converted by making the appropriate indication in its Conversion
Notice.

(e) Effectiveness of Redemption. If notice of redemption of Convertible
Preferred Units pursuant to Section 3.4(b) has been duly given pursuant to
Section 3.4(c) and if

 

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on or before the redemption date all funds necessary for the redemption have
been deposited by the Company, in trust for the pro rata benefit of the holders
of the Convertible Preferred Units called for redemption, with a bank or trust
company doing business in the Borough of Manhattan, The City of New York, and
having a capital and surplus of at least $100 million and selected by the Board
of Directors, so as to be and continue to be available solely therefor, then,
notwithstanding that any certificate for any Convertible Preferred Unit so
called for redemption has not been surrendered for cancellation, on and after
the date of redemption dividends shall cease to accrue on all Convertible
Preferred Units so called for redemption, all Convertible Preferred Units so
called for redemption shall no longer be deemed outstanding and all rights with
respect to such Convertible Preferred Units shall forthwith on such date of
redemption cease and terminate, except only the right of the holders thereof to
receive the amount payable on such redemption from such bank or trust company,
without interest. Any funds unclaimed at the end of three years from the date of
redemption shall, to the extent permitted by law, be released to the Company,
after which time the holders of the Convertible Preferred Units so called for
redemption shall look only to the Company for payment of the redemption price of
such Convertible Preferred Units.

(f) Effectiveness of Conversion. If notice of forced conversion of Convertible
Preferred Units has been given by the Company, then, notwithstanding that any
certificate for any Convertible Preferred Unit so called for conversion has not
been surrendered for conversion, on and after the Conversion Date dividends
shall cease to accrue on all Convertible Preferred Units so called for
conversion, all Convertible Preferred Units so called for conversion shall no
longer be deemed outstanding and all rights with respect to such Convertible
Preferred Units shall forthwith on such Conversion Date cease and terminate,
except only the right of the holders thereof to receive Class B Common Units or
Class A Common Stock, as applicable.

 

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SECTION 3.5 Automatic Exchange/Conversion of Units Pursuant to a Foreclosure.

(a) Notwithstanding any other provision of this Agreement or the Exchange
Agreement, in the event of a foreclosure by a lender on any Class B Common Units
or Convertible Preferred Units pledged by A/N under a Stand Alone Margin Loan
pursuant to Section 4.6(c) of the Stockholders Agreement or in connection with
an Equity Linked Financing pursuant to Section 4.6(d) of the Stockholders
Agreement, then, whether or not a Notice of Foreclosure is received by New
Charter or the Company, (i) any Class B Common Units underlying such pledge
shall be deemed to be automatically surrendered in exchange for the Cash
Exchange Payment or, at New Charter’s election, shares of Class A Common Stock,
as set forth in Section 2.1(a)(ii) of the Exchange Agreement, and (ii) any
Convertible Preferred Units underlying such pledge shall be deemed to be
automatically converted into shares of Class A Common Stock of New Charter. New
Charter shall deliver such cash or shares of Class A Common Stock to the
applicable lender(s) as soon as reasonably practicable, but in any event within
five (5) Business Days following the date of receipt of the applicable Notice of
Foreclosure. For the avoidance of doubt, no such lender(s) shall be deemed to
have received Class B Common Units or Convertible Preferred Units or to become a
Member through the act of foreclosure.

(b) In the event of an automatic conversion of Convertible Preferred Units as
set forth in Section 3.5(a), the applicable lender(s) entitled to receive the
shares of Class A Common Stock issuable upon such conversion shall be treated
for all purposes as the record holder or holders of such shares of Class A
Common Stock as of the time of foreclosure and the Convertible Preferred Units
so converted shall be automatically deemed cancelled as of such time. Within
three Business Days of the Conversion Date, New Charter shall issue shares of
Class A Common Stock issuable upon conversion (together with any dividend or
distribution to which such lender(s) may be entitled as a holder of Class A
Common Stock at such time). The delivery of Class A Common Stock pursuant to
this Section 3.5 shall be made by book-entry pursuant to instructions received
from the applicable lender(s).

(c) New Charter and the Company shall be entitled to conclusively rely on, and
are authorized and protected in acting upon, any executed Notice of Foreclosure
received pursuant to this Section 3.5 or the absence of any Notice of
Foreclosure, and none of New Charter, the Manager or the Company shall have any
duty to investigate or otherwise determine the authenticity, validity,
enforceability or legality of any Notice of Foreclosure, including any signatory
thereto, or whether any foreclosure is valid, binding, proper, enforceable or
otherwise; provided, however, notwithstanding anything herein to the contrary,
following A/N’s written notice to the Company, which is received by the Company
within one (1) Business Day after receiving such Notice of Foreclosure, that the
Company should disregard such Notice of Foreclosure, the Company, New Charter
and the Manager shall not be required to take any action hereunder or under the
Exchange Agreement with respect to such Notice of Foreclosure or any foreclosure
related thereto and such Notice of Foreclosure shall be deemed to never have
been delivered for all purposes of this Agreement and the Exchange Agreement.
The A/N Parties, each lender that exercises any rights upon a foreclosure and
each holder of Convertible Preferred Units hereby releases and discharges all
claims, liabilities or other

 

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obligations arising out of New Charter’s or the Company’s compliance with this
Section 3.5 or the Exchange Agreement as a result of any foreclosure or in
response to any Notice of Foreclosure.

SECTION 3.6 General. Except as otherwise expressly provided in this Agreement,
all Common Units shall have identical rights and privileges in every respect.

SECTION 3.7 Voting. Holders of Units shall not be entitled to vote or consent
with respect to any matter except as expressly provided in Section 4.2(b)
notwithstanding any provisions in the Act. Each Member shall be entitled to one
vote per Class A Common Unit and one vote per Class B Common Unit that it holds
with respect to any matter as to which the Members holding such Units are
entitled to vote.

ARTICLE IV - MANAGEMENT

SECTION 4.1 Manager.

(a) Management of the Company. The business and affairs of the Company shall be
managed by the Manager consistent with the Specified Documents. Subject to the
express limitations contained in any provision of the Specified Documents, the
Manager shall have complete and absolute control of the affairs and business of
the Company, and shall possess all powers necessary, convenient or appropriate
to carrying out the purposes and business of the Company, including, without
limitation, doing all things and taking all actions necessary to carry out the
terms and provisions of this Agreement. Subject to the rights and powers of the
Manager and the limitations thereon contained in the Specified Documents, the
Manager may delegate to any Person any or all of its powers, rights and
obligations under this Agreement and may appoint, contract or otherwise deal
with any Person to perform any acts or services for the Company as the Manager
may reasonably determine. The Manager is specifically authorized to execute,
sign, seal and deliver in the name of and on behalf of the Company any and all
agreements, certificates, instruments or other documents requisite to carrying
out the intentions and purposes of this Agreement and of the Company.

(b) Necessary Approvals. Any action taken by the Manager pursuant to this
Agreement shall be subject to the necessary approval of the Board of Directors
as and to the extent required by the Specified Documents. All matters material
to the affairs and business of the Company shall be determined by the Board of
Directors. Notwithstanding anything in this Agreement to the contrary, but
subject to Section 4.2(b), the Company and the Manager are expressly permitted
to take any action in furtherance of, or to give effect to, any action or
transaction that is duly approved by the Board of Directors or the stockholders
of New Charter, and this Agreement may be amended to give effect to any such
action or transaction by a writing executed by the Manager on behalf of the
Company, with no further action required by the Members.

(c) Fiduciary Duties. This Agreement is not intended to, and does not, create or
impose any fiduciary duty on any Covered Person. Furthermore, each of the
Members and the Company hereby waives, to the fullest extent permitted by Law,
any and all fiduciary duties that, absent such waiver, may be implied by the Act
or other applicable Law, and in doing so,

 

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acknowledges and agrees that the duties and obligation of each Covered Person
and each Member to each other and to the Company are only as expressly set forth
in this Agreement. The provisions of this Agreement, to the extent that they
restrict or eliminate the duties (including fiduciary duties) and liabilities of
a Covered Person otherwise existing at law or in equity, are agreed by the
Members to replace such other duties and liabilities of such Covered Person.
Whenever in this Agreement a Covered Person is permitted or required to make a
decision (including a decision that is in such Covered Person’s “discretion” or
under a grant of similar authority or latitude), the Covered Person shall be
entitled to consider only such interests and factors as such Covered Person
desires, including its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting the Company or
any other Person. For the avoidance of doubt, this Agreement neither creates nor
limits any fiduciary duties of New Charter’s directors or officers to its
stockholders in their respective capacities as such.

SECTION 4.2 Members.

(a) Meetings. No meetings of the Members shall be held.

(b) Actions Requiring Certain Member Approval. The prior written consent of New
Charter and A/N shall be required for any amendment to this Agreement that
adversely affects the rights of the Class B Common Units as compared to the
Class A Common Units. The prior written consent of the holders of Convertible
Preferred Units holding a majority of the Convertible Preferred Units then
outstanding shall be required for any amendment to this Section 4.2 and Sections
3.3, 3.4, 3.5, 4.5, 5.4 and 6.2 that adversely affects the rights of the
Convertible Preferred Units. So long as the A/N Parties maintain sixty-six and
two-thirds percent (66 2/3%) of the Convertible Preferred Units issued to A/N on
the Closing Date, the prior written consent of A/N shall be required for any
issuance of Units that have a liquidation preference senior to, or pari passu
with, the Convertible Preferred Units. Notwithstanding anything herein to the
contrary, no consent of any Person shall be required for the issuance of Units
(including Units that have a liquidation preference senior to, or pari passu
with, the Convertible Preferred Units), if such Units are issued to a member of
the Charter Group with an aggregate liquidation preference and dividend rate
approximately equal to, and intended to provide funds to service, indebtedness
incurred by the Charter Group; provided, that any such Units shall not be
transferrable to any party that is not a member of the Charter Group and any
member of the Charter Group that holds such Units shall transfer such Units to a
member of the Charter Group prior to such entity’s ceasing to be a member of the
Charter Group.

SECTION 4.3 Officers.

(a) Designation and Appointment. The Manager may, from time to time, employ and
retain Persons as may be necessary or appropriate for the conduct of the
Company’s and its Subsidiaries’ business (subject to the supervision and control
of the Manager), including employees, agents and other Persons (any of whom may
be a Member or any of its Affiliates, or any of their respective employees,
directors or officers) who may be designated as Officers of the Company or of
one or more of the Company’s Subsidiaries, with

 

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titles as and to the extent authorized by the Manager. Any number of offices may
be held by the same Person. In its discretion, the Manager may choose not to
fill any office for any period as it may deem advisable. Officers need not be
residents of the State of Delaware or Members. Any Officers so designated shall
have such authority and perform such duties as the Manager may, from time to
time, delegate to them. The Manager may assign titles to particular Officers.
Each Officer shall hold office at the pleasure of the Manager.

(b) Resignation/Removal. Any Officer may resign his or her office at any time.
Such resignation shall be made in writing and shall take effect at the time
specified therein, or if no time is specified, at the time of its receipt by the
Manager. The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation. Any Officer may be
removed as such, either with or without cause at any time by the Manager.
Designation of an Officer shall not of itself create any contractual or
employment rights.

(c) Chief Executive Officer. The Manager shall appoint a Chief Executive Officer
of the Company and its Subsidiaries (the “CEO”). The CEO (i) shall be in general
and active charge of the entire business and affairs of the Company and
(ii) shall, subject to the powers of the Manager, have the power and authority
to cause the Company to enter into and perform contracts and agreements in the
ordinary course of business without action of the Manager.

(d) President. If at any time a president of the Company (the “President”) is
appointed, the President shall, subject to the powers of the Manager and the
limitations set forth in Section 4.1 and, in the event that the President and
the CEO are not the same person, the CEO, have responsibility for the general
and active management of the business of the Company, and shall see that all
orders and resolutions of the Manager are carried into effect. The President
shall have such other powers and perform such other duties as may be prescribed
by the Manager and, in the event that the President and the CEO are not the same
person, the CEO.

(e) Chief Financial Officer. The chief financial officer of the Company (the
“Chief Financial Officer”) shall have responsibility for keeping and
maintaining, or for causing to be kept and maintained, adequate and correct
books and records of accounts of the properties and business transactions of the
Company, including accounts of its assets, liabilities, receipts, disbursements,
gains, losses and capital. The Chief Financial Officer shall have the custody of
the funds and securities of the Company, and shall have responsibility for
keeping full and accurate accounts of receipts and disbursements in books
belonging to the Company, and for depositing all moneys and other valuable
effects in the name and to the credit of the Company in such depositories as may
be designated by the Manager. The Chief Financial Officer shall have such other
powers and perform such other duties as may from time to time be prescribed by
the CEO or the Manager.

(f) Vice President(s). The vice president(s) of the Company shall have such
duties and such other powers as the Manager may from time to time prescribe.

 

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(g) Secretary.

(i) The secretary of the Company (the “Secretary”) shall have responsibility for
keeping all documents described in Article VII and such other documents as may
be required under the Act. The Secretary shall have such other duties and such
other authority as may be prescribed elsewhere in this Agreement or from time to
time by the CEO or the Manager. The Secretary shall have the general duties,
powers and responsibilities of a secretary of a corporation.

(ii) If the Manager chooses to appoint an assistant secretary or assistant
secretaries, the assistant secretaries, in the order of their seniority, in the
absence, disability or inability to act of the Secretary, shall have the duties
and the powers of the Secretary, and shall have such other duties as the CEO or
the Manager may from time to time prescribe.

(h) Treasurer. The Treasurer shall have custody of the Company funds and
securities and shall have responsibility for keeping or causing to be kept full
and accurate accounts of receipts and disbursements in books of the Company to
be maintained for such purpose; depositing all moneys and other valuable effects
of the Company in the name and to the credit of the Company in depositories
designated by the Manager or the CEO; and disbursing the funds of the Company as
may be ordered by the Manager or the CEO.

SECTION 4.4 Management Matters. The Manager shall take all action which may be
necessary or appropriate for the continuation of the Company’s valid existence
as a limited liability company under the Laws of the State of Delaware (and of
each other jurisdiction in which such existence is necessary to enable the
Company to conduct the business in which it is engaged) in accordance with the
provisions of this Agreement and the Exchange Agreement and applicable Laws and
regulations. The Manager shall file or cause to be filed for recordation in the
office of the appropriate authorities of the State of Delaware, and in the
proper office or offices in each other jurisdiction in which the Company or any
Subsidiary of the Company is formed or qualified, such certificates (including
certificates of limited liability companies and fictitious name certificates)
and other documents as are required by the applicable Laws of any such
jurisdiction or as are required to reflect the identity of the Members and the
amounts of their respective Capital Accounts.

SECTION 4.5 Liability of Members.

(a) No Liability. Except as otherwise required by applicable Law or as expressly
set forth in this Agreement, no Member or Manager shall have any liability
whatsoever in such Person’s capacity as a Member or Manager (as applicable),
whether to the Company, to any of the other Members, to the creditors of the
Company or any Subsidiary of the Company or to any other third party, for the
debts, liabilities, commitments or any other obligations of the Company or any
Subsidiary of the Company or for any losses of the Company or any Subsidiary of
the Company; provided, that nothing contained in this Section 4.5(a) is intended
to release or limit a Member’s liability for a breach by a Member or the Manager
of its obligations hereunder.

 

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(b) Limited Liability of the Member. Without limiting Section 4.5(a), the
liability of each Member, in its capacity as such, cannot exceed (i) the amount
of its Capital Contributions, if any, (ii) its share of any assets and
undistributed profits of the Company and (iii) the amount of any distributions
wrongfully distributed to it to the extent set forth in the Act, except to the
extent such Member has breached this Agreement.

(c) Return of Distributions. In accordance with the Act and the Laws of the
State of Delaware, a member of a limited liability company may, under certain
circumstances, be required to return amounts previously distributed to such
member. It is the intent of the Members that no distribution to any Member
pursuant to Article V of this Agreement shall be deemed a return of money or
other property paid or distributed in violation of the Act. The payment of any
such money or distribution of any such property to a Member shall be deemed to
be a compromise within the meaning of the Act, and the Member receiving any such
money or property shall not be required to return to any Person any such money
or property, except to the extent such Member has breached this Agreement.
However, if any court of competent jurisdiction holds that, notwithstanding the
provisions of this Agreement, any Member is obligated to make any such payment,
such obligation shall be the obligation of such Member and not of any other
Member.

SECTION 4.6 Exculpation; Indemnification by the Company.

(a) Exculpation. To the fullest extent permitted by Law, no Covered Person shall
be liable to the Company or its Subsidiaries or any other Person who is bound by
this Agreement for any or all losses, damages, claims, judgments, penalties
(including excise and similar taxes and punitive damages), fines, settlements
and reasonable expenses (including reasonable attorneys’ fees and expenses)
(collectively, “Expenses”) actually incurred by reason of any act or omission
performed or omitted by such Covered Person on behalf of the Company or its
Subsidiaries and in a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person in accordance with this Agreement,
except to the extent such Expenses are due to the gross negligence or willful
misconduct of, or bad faith breach of this Agreement by, such Covered Person
(each, a “Covered Claim”). The provisions of this Agreement, to the extent that
they restrict, limit or eliminate the duties and liabilities of a Covered Person
to the Company or any Subsidiary of the Company or the Members otherwise
existing at law or in equity, are agreed by the parties hereto to replace such
other duties and liabilities at law or in equity of such Covered Person, and
each Member to the fullest extent permitted by applicable Law, hereby waives any
right to make any claim, bring any action or seek any recovery based on such
other duties or liabilities for breach thereof.

(b) Indemnification. Subject to the limitations and conditions provided in this
Section 4.6, each Covered Person who was or is made a party or is threatened to
be made a party to, or is involved in, any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
arbitrative, with respect to a Covered Claim (a “Proceeding”), or any appeal in
such a Proceeding or any inquiry or investigation that could lead to such a
Proceeding (a “Covered Proceeding”), by reason of the fact that he, she or it,
or a Person of which he, she or it is or was a Covered Person shall be
indemnified by the Company or to the extent applicable a Subsidiary of the
Company to the fullest extent permitted by

 

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applicable Law, as the same exists or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than such Law permitted the
Company to provide prior to such amendment) against all Expenses actually
incurred by such Person in connection with such Covered Proceeding, and
indemnification under this Section 4.6 shall continue as to a Covered Person who
has ceased to serve in the capacity which initially entitled such Covered Person
to indemnity under this Agreement. The indemnification provided in this
Section 4.6 is recoverable only out of the assets of the Company and/or its
Subsidiaries, and no Member, director or Officer or employee of the Company or
any of its Subsidiaries has any personal liability, or obligation to make a
capital contribution, on account thereof.

(c) Reliance. A Covered Person shall be fully protected in relying in good faith
upon the records of the Company and its Subsidiaries and upon such information,
opinions, reports or statements presented to the Company or its Subsidiaries by
any person as to matters the Covered Person reasonably believes are within such
other person’s professional or expert competence, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, Net Income or Net Losses of the Company and its Subsidiaries, or
the value and amount of assets or reserves or contracts, agreements or other
undertakings that would be sufficient to pay claims and obligations of the
Company and its Subsidiaries or to make reasonable provision to pay such claims
and obligations, or any other facts pertinent to the existence and amount of
assets from which distributions to the Members or creditors of the Company and
its Subsidiaries might properly be paid.

(d) Advancement of Expenses. The Company shall advance reasonable expenses
(including reasonable attorneys’ fees) incurred by or on behalf of a Covered
Person in connection with a Covered Proceeding (ignoring for purposes of this
clause (d) the exception contained therein relating to gross negligence or
willful misconduct or bad faith breach of this Agreement) within twenty
(20) days after receipt by the Company from such Covered Person of a statement
requesting such advances from time to time; provided such statement provides
reasonable documentary evidence of such expenses and provides a written
undertaking by the Covered Person to repay any and all advanced expenses in the
event such Covered Person is ultimately determined not to be entitled hereunder
to indemnification by the Company.

(e) Indemnification Agreements and D&O Insurance. The Company may enter into
agreements with the Manager or any Officer to provide for indemnification
consistent with the terms and conditions set forth in this Section 4.6. New
Charter, the Company and/or its Subsidiaries, as deemed appropriate by the
Manager, will purchase and maintain director and officer liability insurance at
appropriate levels of coverage as determined by the Manager. New Charter, the
Company and/or its Subsidiaries may, as deemed appropriate by the Manager, in
lieu of or in addition to the policy referred to in the prior sentence, purchase
a tail insurance policy with respect to its director and officer liability
insurance with appropriate levels of coverage (as determined by the Manager) for
past periods.

(f) Nature of Rights. The rights granted pursuant to this Section 4.6 shall be
deemed contract rights, and no amendment, modification or repeal of this
Section 4.6 shall have the effect of limiting or denying any such rights with
respect to actions taken or Covered Proceedings arising prior to any amendment,
modification or repeal.

 

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(g) Third-Party Beneficiaries. Notwithstanding anything to the contrary in this
Agreement, each of the Members and the Company acknowledges and agrees that the
Covered Persons have relied on this Section 4.6 and are express third-party
beneficiaries of Section 4.6 with the express right and ability to enforce the
Company’s obligations under Section 4.6 directly against the Company to the full
extent of such obligations. The Company and each Member shall not in any way
hinder, compromise or delay the rights and ability of the Covered Persons to
enforce any of the Company’s obligations under this Section 4.6 directly against
the Company to the full extent of such obligations. Notwithstanding anything to
the contrary in this Agreement, (a) this Section 4.6 may not be amended,
modified, supplemented or waived in any manner, and (b) the other provisions of
this Agreement may not be amended, modified, supplemented or waived in any
manner that adversely affects any Covered Person’s rights to enforce any of the
Company’s obligations under this Section 4.6 directly against the Company
without the prior written consent of each of the Members, which consent may be
withheld, conditioned or delayed for any reason in their sole discretion.

(h) Survival. This Section 4.6 shall survive any termination or restatement of
this Agreement. It is expressly acknowledged that the indemnification provided
in this Section 4.6 could involve indemnification for negligence or under
theories of strict liability.

SECTION 4.7 Manager Expenses. All liabilities, costs and expenses incurred by
New Charter in connection with or relating to its activities as the Manager
hereunder, incurred by the Charter Group in connection with the management of
its business or the maintenance and continuity of its continued corporate
existence, or incurred or suffered by the Charter Group shall be paid (or
reimbursed to the Charter Group, if paid by the Charter Group) by the Company,
and the Company shall indemnify, defend and hold harmless the Charter Group (and
their respective directors, officers, personnel, advisors, agents and other
representatives) for the same to the fullest extent permitted by Law; the
foregoing shall include for the avoidance of doubt the costs and expenses of
compensation for the directors, officers, personnel, advisors, agents and other
representatives of the Charter Group.

SECTION 4.8 Exclusivity of Business.

(a) For so long as the Exchange Agreement is in effect, New Charter may not hold
assets or liabilities outside of the Company and its Subsidiaries, other than
any assets and liabilities that the Manager reasonably determines should be held
outside the Company and its Subsidiaries for financing, tax, regulatory or
similar or related reasons, and only if (i) such assets and liabilities, in the
aggregate, together with all other assets and liabilities held outside of the
Company and its Subsidiaries have a combined value less than or equal to 3% of
the total consolidated assets of New Charter and its Subsidiaries at the time of
such determination and (ii) the amount of cash and cash equivalents held outside
of the Company and its Subsidiaries does not exceed the amount of cash and cash
equivalents reasonably necessary to satisfy the ordinary needs of the business
associated with the assets and liabilities held outside of the Company and its
Subsidiaries or to comply with applicable Law, in each case, excluding cash or

 

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cash equivalents funded (or previously funded) by a Common Tax Distribution or
other pro rata distribution by the Company on the Common Units. The Manager
shall promptly prepare a notice of any assets or liabilities to be held outside
the Company and its Subsidiaries and shall provide such notice to A/N at least
five (5) Business Days prior to the completion thereof. For the avoidance of
doubt, the fact that assets or liabilities are held by New Charter outside of
the Company and its Subsidiaries shall not affect the number of shares of
Class A Common Stock to be delivered to any A/N Party under the Exchange
Agreement.

(b) Notwithstanding anything in this Agreement to the contrary, but subject to
Section 4.2(b), and without prejudice to A/N’s rights under the Stockholders
Agreement, it is the intent of the parties hereto that the Company shall be a
dynamic institution and may engage in such transactions as the Manager shall
reasonably determine are advisable to and in the best interests of the Company.
In furtherance and not in limitation of the foregoing, but subject to
Section 4.2(b):

(i) The Manager may, in its sole discretion, cause the Company to lend cash to
any member of the Charter Group to finance the acquisition, by merger,
consolidation, acquisition of stock or assets, or otherwise, of any Person or
business (an “Acquisition Loan”); provided, that (A) the interest rate on any
Acquisition Loan shall not be less than that which would apply to any concurrent
Tax Loan and (B) as soon as reasonably practicable following such acquisition,
such member of the Charter Group shall contribute all of the assets and
liabilities of such Person or business to the Company, such contribution to be
deemed in full satisfaction of such Acquisition Loan.

(ii) The Charter Group may issue shares of capital stock in consideration of the
acquisition, by merger, consolidation, acquisition of stock or assets, or
otherwise, of any Person or business; provided, that as soon as reasonably
practicable following such acquisition, the Charter Group shall contribute all
of the assets and liabilities of such Person or business to the Company in
exchange for the Charter Member’s receipt of an equivalent number of Class A
Common Units. In such event, subject to Section 4.8, New Charter shall, in
addition, take such other action as is necessary to preserve the 1:1 Up-C
structure between New Charter and the Company.

(iii) The Charter Group may issue debt to any Person (a “Creditor”); provided,
that as soon as reasonably practicable following such debt issuance, the Charter
Group shall either (1) contribute all of the net proceeds of such debt issuance
to the Company, which contribution may be in exchange for units of a new class
of Units with such rights, preferences, privileges and restrictions as the
Manager shall designate in order that the obligations of the Company to the
Charter Group resulting from the Charter Group’s ownership of such Units shall
match, to the extent reasonably practicable, the obligations of the Charter
Group to the Creditor resulting from such debt issuance, or (2) lend the net
proceeds of such debt issuance to any member of the Charter Group on terms
designed to mirror such debt.

(iv) Notwithstanding clauses (i)-(iii) above, but subject to the requirements of
Section 4.8(a), the Manager may withhold from contribution to the

 

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Company any assets and liabilities that the Manager reasonably determines should
be withheld for financing, tax, regulatory or similar or related reasons. The
Manager shall promptly prepare and provide to A/N a notice of any such withheld
contribution in accordance with the requirements of Section 4.8(a).

(v) In furtherance and not in limitation of the foregoing, and subject to this
Section 4.8, it is the intent of the parties hereto that New Charter and the
Company shall maintain a 1:1 Up-C structure (except with respect to Class B
Common Units and Convertible Preferred Units), as set forth in Section 2.3(a) of
the Exchange Agreement.

ARTICLE V - ALLOCATIONS; DISTRIBUTIONS

SECTION 5.1 Capital Account Creation. There shall be established for each Member
on the books of the Company a Capital Account, which shall be increased or
decreased in the manner set forth in this Agreement. Each Member’s Capital
Account shall be divided into components corresponding with such Member’s Common
Units and Convertible Preferred Units, respectively, and all adjustments
hereunder to Capital Accounts shall be made to the appropriate component, as the
case may be.

SECTION 5.2 Capital Account Negative Balance. A Member shall not have any
obligation to the Company or to any other Member to restore any negative balance
in the Capital Account of such Member. The Company shall not request any
additional capital contribution from A/N or its Affiliates or their transferees
in its or their capacity as a Member.

SECTION 5.3 Allocations of Net Income and Net Loss.

(a) Allocations of Net Income and Net Loss. After giving effect to the special
allocations set forth in Section 5.3(c) for the Taxable Period and all capital
contributions by and distributions to the Members for the Taxable Period, the
Company shall allocate Net Income and Net Loss (and, if necessary, individual
items of gross income or gross deduction) for the Taxable Period to the Members
in a manner such that, after such allocations have been made, the balance of
each Member’s Capital Account shall, to the extent possible, be equal to each
Member’s Target Capital Account.

(b) Tax Allocations.

(i) In accordance with Section 704(c) of the Code and the Regulations
promulgated thereunder, each item of income, gain, loss and deduction with
respect to any property contributed to the capital of the Company shall, solely
for tax purposes, be allocated among the Members so as to take account of any
variation between the adjusted basis of such property to the Company for U.S.
federal income tax purposes and its initial Gross Asset Value using the
“traditional method” pursuant to Regulations Section 1.704-3(b), provided, that
to the extent permitted under the Code and Regulations, with respect to any
Company asset that was contributed to the Company by the Charter Member or A/N
on the date hereof, the remaining amount of contributed tax basis in such asset
shall be allocated entirely to the forward Section 704(c) layer, if

 

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any, that is attributable to such contributed asset and no portion of such tax
basis shall be allocated to any reverse Section 704(c) layer that is
attributable to such contributed asset in the event the Gross Asset Value of
such Company asset is subsequently adjusted pursuant to Sections 5.3(b)(ii) and
5.3(b)(iii).

(ii) In the event the Gross Asset Value of any Company asset is adjusted
pursuant to clause (b) of the definition of “Gross Asset Value,” subsequent
allocations of income, gain, loss and deduction with respect to such asset shall
take account of any variation between the adjusted basis of such asset for
United States federal income tax purposes and its Gross Asset Value in the same
manner as under Section 704(c) of the Code and the Regulations promulgated
thereunder using any method permitted under Regulations Section 1.704-3 as
reasonably determined by the Manager.

(iii) In the event of the exercise of the conversion right of any Convertible
Preferred Units pursuant to Section 3.3(a) by any Member and if and to the
extent of a corresponding re-allocation of the Members’ Capital Account balances
under Regulations Section 1.704-1(b)(2)(iv)(s)(3), the Company shall, beginning
with the Taxable Period in which the conversion right is exercised and in all
succeeding Taxable Periods until the required allocations are fully taken into
account, make corrective allocations of items of income, gain, loss, deduction
and credit solely for tax purposes to adjust for such capital account
re-allocation, as required under Regulations Section 1.704-1(b)(4)(x).

(iv) Subject to the provisions of Section 5.3(b)(i), (ii) and (iii), items of
Company income, gain, loss, deduction and credit to be allocated for tax
purposes shall, for each Taxable Period, be allocated among the Members in the
same manner and in the same proportion as such items are allocated among the
Members’ respective Adjusted Capital Accounts.

(v) Allocations pursuant to this Section 5.3(b) are solely for U.S. federal,
state and local income tax purposes, and shall not affect, or in any way be
taken into account in computing, any Member’s Capital Account or share of Net
Income, Net Loss, other items, or distributions pursuant to any provision of
this Agreement.

(c) Special Allocations.

(i) Certain Special Allocations. Notwithstanding anything to the contrary set
forth in this Agreement, the following special allocations, if applicable, shall
be made in the order set forth below.

(A) Company Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(f), notwithstanding any other provision of this Section 5.3, if
there is a net decrease in Company Minimum Gain during any Taxable Period, each
Member shall be specially allocated items of Company income and gain for such
Taxable Period (and, if necessary, subsequent Taxable Periods) in an amount
equal to such Member’s share of such

 

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net decrease in Company Minimum Gain during such Taxable Period, determined in
accordance with Regulations Section 1.704-2(g). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Member pursuant thereto. The items to be so allocated
shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and
1.704-2(j)(2). This Section 5.3(c)(i)(A) is intended to comply with the minimum
gain chargeback requirements set forth in Regulations Section 1.704-2(f) and
shall be interpreted consistently therewith.

(B) Member Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(i)(4), notwithstanding any other provision of this Section 5.3,
if there is a net decrease in Member Minimum Gain attributable to a Member
Nonrecourse Debt during any Taxable Period, each Member that has a share of the
Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated
items of Company income and gain for such Taxable Period (and, if necessary,
subsequent Taxable Periods) in an amount equal to such Member’s share of such
net decrease in Member Minimum Gain attributable to such Member Nonrecourse Debt
during such Taxable Period, determined in accordance with Regulations
Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be
made in proportion to the respective amounts required to be allocated to each
Member pursuant thereto. The items to be so allocated shall be determined in
accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This
Section 5.3(c)(i)(B) is intended to comply with the minimum gain chargeback
requirement set forth in Regulations Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.

(C) Qualified Income Offset. In the event any Member unexpectedly receives any
adjustments, allocations or distributions described in subparagraphs (4), (5) or
(6) of Regulations Section 1.704-1(b)(2)(ii)(d), items of Company income and
gain shall be specially allocated to such Member in an amount and manner
sufficient to eliminate, to the extent required by such Regulations, such
Member’s Adjusted Capital Account Deficit as possible; provided, that an
allocation pursuant to this Section 5.3(c)(i)(C) shall be made only if and to
the extent that such Member would have an Adjusted Capital Account Deficit after
all other allocations provided for in this Section 5.3 have been tentatively
made as if this Section 5.3(c)(i)(C) were not in this Agreement. This
Section 5.3(c)(i)(C) is intended to comply with the “qualified income offset”
requirements set forth in Regulations Section 1.704-1(b)(2)(ii)(d)(3) and shall
be interpreted consistently therewith.

(D) Gross Income Allocation. In the event any Member has a deficit Capital
Account at the end of any Taxable Period that is in excess of the sum of (i) the
amount such Member is obligated to restore, if any, pursuant to any provision of
this Agreement, and (ii) the amount such Member is obligated to restore pursuant
to the penultimate sentences of Regulations Sections 1.704-2(g)(1)

 

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and 1.704-2(i)(5), each such Member shall be specially allocated items of
Company income and gain in the amount of such excess, as quickly as possible;
provided, that an allocation pursuant to this Section 5.3(c)(i)(D) shall be made
only if and to the extent that such Member would have a deficit Capital Account
in excess of such sum after all other allocations provided for in this
Section 5.3 have been tentatively made as if Section 5.3(c)(i)(C) and this
Section 5.3(c)(i)(D) were not in this Agreement.

(E) Nonrecourse Deductions. Nonrecourse Deductions for any Taxable Period shall
be specially allocated among the Members in accordance with a Member’s share of
Company profits under Regulations Section 1.752-3(a)(3).

(F) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any
Taxable Period shall be specially allocated to the Member that bears the
economic risk of loss with respect to the Member Nonrecourse Debt to which such
Member Nonrecourse Deductions are attributable in accordance with Regulations
Section 1.704-2(i)(1).

(G) Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis for U.S. federal income tax purposes of any Company asset pursuant to
Section 734(b) or 743(b) of the Code is required, pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into
account in determining Capital Accounts as the result of a distribution to a
Member in complete liquidation of such Member’s Membership Interest, the amount
of such adjustment to Capital Accounts shall be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such gain or loss shall be specially allocated to the
Members pro rata in accordance with the manner in which it would be allocated
under Section 5.3(a) in the event Regulations Section 1.704-1(b)(2)(iv)(m)(2)
applies, or to the Member to whom such distribution was made, in the event
Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(H) For each Taxable Period, items of Company gross income and gain shall be
allocated to the Members holding Convertible Preferred Units at the beginning of
such Taxable Period in an amount equal to the aggregate Convertible Preferred
Unallocated Yield with respect to all Convertible Preferred Units held by such
Member during the Taxable Period, pro rata in proportion to the aggregate
Convertible Preferred Unallocated Yield with respect to the Convertible
Preferred Units held by each such Member during the Taxable Period. For the
avoidance of doubt, any Member who exercises its conversion right in respect of
Convertible Preferred Units pursuant to Section 3.3(a) during the current
Taxable Period will be allocated gross income and gain in the current Taxable
Period pursuant to the prior sentence with respect to the Convertible Preferred
Units so converted.

 

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(I) In the event of the exercise of the conversion right of any Convertible
Preferred Units pursuant to Section 3.3(a) by any Member during the current
Taxable Period (“Current Period Converted Units”), after giving effect to the
allocations in Section 5.3(c)(i)(A)-(H), the Company shall make allocations in
respect of the Current Period Converted Units in accordance with the principles
outlined in Regulations Section 1.704-1(b)(2)(iv)(s). For the avoidance of
doubt, the portion of a Member’s Capital Account that is attributable to such
Member’s Current Period Converted Units will be increased or decreased under
this Section 5.3(c)(i)(I) to an amount that represents such Member’s rights to
partnership capital in respect of the Units received by such Member in respect
of the Current Period Converted Units. If a Member’s Capital Account is to be
increased under this Section 5.3(c)(i)(I), such Member shall be specially
allocated a pro-rata share of all items of gain attributable to increases in the
Gross Asset Values of Company property resulting from adjustments to the Gross
Asset Value of Company property for the current Taxable Period in an amount
equal to such increase. If a Member’s Capital Account is to be reduced under
this Section 5.3(c)(i)(I), such Member shall be specially allocated a pro-rata
share of all items of loss attributable to decreases in the Gross Asset Values
of Company property resulting from adjustments to the Gross Asset Value of
Company property for the current Taxable Period in an amount equal to such
decrease. To the extent that there are insufficient items of gain or loss to
make the allocations required by this Section 5.3(c)(i)(I), the Company will
re-allocate amounts among the Capital Accounts of the Members in the manner
outlined in Regulations Section 1.704-1(b)(2)(iv)(s)(3).

(ii) Curative Allocations. The allocations set forth in Section 5.3(c)(i)(A)–(G)
(the “Regulatory Allocations”) are intended to comply with certain requirements
of the Regulations. It is the intent of the Members that, to the extent
possible, all Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items of Company
income, gain, loss or deduction pursuant to this Section 5.3(c)(ii). Therefore,
notwithstanding any other provision of this Section 5.3 (other than the
Regulatory Allocations), the Company shall make such offsetting special
allocations of Company income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made, each
Member’s Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Member would have had if the Regulatory Allocations
were not part of this Agreement and all Company items were allocated pursuant to
Section 5.3(a) and Section 5.3(d) of this Agreement. For the avoidance of doubt,
in making allocations pursuant to this Section 5.3(c)(ii), the Company shall
take into account future Regulatory Allocations under Section 5.3(c)(i)(A) and
Section 5.3(c)(i)(B) that, although not yet made, are likely to offset other
Regulatory Allocations previously made under Section 5.3(c)(i)(E) and
Section 5.3(c)(i)(F) of this Agreement.

 

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(d) Other Allocation Rules.

(i) The allocation provisions set forth in this Section 5.3 and other provisions
of this Agreement relating to maintenance of Capital Accounts are intended to
comply with Regulations Section 1.704-1(b) and shall be interpreted and applied
in a manner consistent with such Regulations.

(ii) For purposes of determining the Net Income, Net Loss or any other items
allocable to any period, Net Income, Net Loss and any such other items shall be
determined on a daily, monthly or other basis, as determined by the Tax Matters
Member using any permissible method under Section 706 of the Code and the
Regulations thereunder.

(iii) If the Percentage Interest of any one or more Members changes during the
Fiscal Year, all items of Company income, loss, deduction and credit shall be
allocated among the Members for such Fiscal Year in a reasonable manner, as
determined by the Manager, that takes into account the varying Percentage
Interests of the Members in the Company during such Fiscal year in accordance
with Section 706 of the Code.

(iv) The Members are aware of the income tax consequences of the allocations
made hereby and hereby agree to be bound by the provisions of this Agreement in
reporting their shares of Company income and loss for income tax purposes.

(v) The Manager shall determine, in its reasonable discretion, the methodology
for determining the allocation of “excess nonrecourse liabilities” of the
Company (within the meaning of Regulations Section 1.752-3(a)(3)) among the
Members and the methodology for allocating “nonrecourse liabilities” among
assets of the Company for purposes of Regulations Section 1.752-3(b); provided,
however, that in exercising its discretion, the Manager shall seek to minimize,
to the extent possible, (A) the amount of any Section 731(a) of the Code gains
recognized by a Member due to deemed distributions under Section 752(b) of the
Code, and (B) any limitation on the allowance of Company losses under
Section 704(d) of the Code due to a Member having insufficient basis in its
Units to claim its distributive share of losses of the Company. Consistent with
the foregoing, if a Member transfers less than all of its Units, the Manager
shall use its discretion in determining methodologies for the year of the
transfer so that, to the greatest extent reasonably possible, (X) the
transferring Member’s share of Company liabilities under Section 752 of the Code
immediately after such transfer, divided by such Member’s share of Company
liabilities under Section 752 of the Code immediately prior to such transfer,
equals (Y) the proportion of the transferring Member’s Capital Account
immediately prior to such transfer (determined as if the Members’ Capital
Accounts were revalued pursuant to Regulations Section 1.704-1(b)(2)(iv)(f)
immediately prior to such transfer) that is attributable to the Units retained
by the transferring Member.

 

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SECTION 5.4 Distributions.

(a) Distributions Generally.

(i) Subject to and in accordance with this Section 5.4 (including, for the
avoidance of doubt, subject to and in accordance with the limitations set forth
in Section 5.4(c)), the Company shall make distributions to the Members as
follows:

(A) to the Members holding Convertible Preferred Units, when, as and if declared
by the Manager, cumulative preferential cash distributions in an amount equal to
the Convertible Preferred Yield per Convertible Preferred Unit. If declared,
such distributions will be payable quarterly in arrears, and, if not declared,
shall be deemed to have become due quarterly and in arrears, on the last
calendar day of March, June, September and December of each year (each a
“Convertible Preferred Unit Distribution Payment Date”), commencing on the first
of such payment dates to occur following the original date of issuance each such
Convertible Preferred Unit. If any date on which distributions are to be made on
the Convertible Preferred Units is not a Business Day, then payment of the
distribution to be made on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. The
Members holding Convertible Preferred Units shall not be entitled to any
distributions in respect of such Convertible Preferred Units, whether payable in
cash, other property or otherwise, in excess of the full cumulative
distributions described in this Section 5.4(a)(i)(A), which full cumulative
distributions include any unpaid Preferred Accrued Distribution Amounts. For the
avoidance of doubt, all Preferred Tax Distributions shall be considered
distributions paid pursuant to this Section 5.4(a)(i)(A) for purposes of this
Agreement. Any distribution payment made on the Convertible Preferred Units
shall first be credited against the earliest accrued but unpaid Preferred
Accrued Distribution Amount due with respect to such Convertible Preferred Units
which remain payable, and

(B) to the Members holding Common Units, pro rata in accordance with their
respective Percentage Interests, at the times and in the aggregate amounts
determined by the Manager; provided, that so long as any Convertible Preferred
Units are outstanding, no distribution of cash or other property shall be
authorized, declared, paid or set apart for payment on or with respect to the
Common Units, nor shall any Common Units be redeemed, purchased or otherwise
acquired for any consideration (or any monies be paid to or made available for a
sinking fund for the redemption of any such Common Units) by the Company (except
for the exchange of Class B Common Units for shares of Class A Common Stock
pursuant to the Exchange Agreement) unless, in each case, all unpaid Preferred
Accrued Distribution Amounts have been or contemporaneously are authorized and
paid. The foregoing sentence will not prohibit the payment of Tax Distributions
pursuant to Section 5.4(b).

 

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(ii) The Company may offset damages for a judicially and finally determined
breach of this Agreement by a Member whose Membership Interest is liquidated
(either upon the resignation of the Member or the liquidation of the Company)
against any amount otherwise distributable to the Member.

(iii) Distributions made upon liquidation of the Company shall be made as
provided in Section 6.2(c).

(b) Tax Distributions.

(i) Anything to the contrary in this Agreement notwithstanding, subject, in each
case, to Section 5.4(c):

(A) At least five (5) days prior to the due date prescribed by the Code for
corporations to pay quarterly installments of estimated tax, the Company shall
distribute in cash (1) to each Member holding Common Units, for each Common Unit
held at such time, the estimated Common Per Unit Tax Distribution Amount for the
Fiscal Quarter with respect to which such quarterly installments of estimated
tax are due, and (2) to each Member holding Convertible Preferred Units, for
each Convertible Preferred Unit held at such time, the estimated Preferred Per
Unit Tax Distribution Amount for the Fiscal Quarter with respect to which such
quarterly installments of estimated tax are due.

(B) As promptly as practicable after the end of each Fiscal Year, but in no
event later than five (5) days prior to the estimated tax due date of the
succeeding fiscal quarter (or, if earlier, any date on which taxes are due in
connection with an application for an extension of time to file any tax returns)
the Company shall distribute in cash (1) to each Member holding Common Units,
for each Common Unit held at such time, the Common Per Unit Tax Distribution
Amount for such Fiscal Year, and (2) to each Member holding Convertible
Preferred Units, for each Convertible Preferred Unit held at such time, the
Preferred Per Unit Tax Distribution Amount for such Fiscal Year.

(ii) Notwithstanding anything in this Section 5.4(b) to the contrary, the
Manager may waive, in whole or in part, any or all Common Tax Distributions to
which the Charter Member is entitled, provided such waiver shall be allowed
solely to the extent a Common Tax Distribution to the Charter Member would
exceed the tax payable in respect of the Charter Member’s Common Units for the
applicable estimated, extension, tax return or other tax liability (taking into
account cash or cash equivalents available for the paying of any such taxes in
accordance with Section 4.8(a) and net operating loss carryforwards, tax
credits, or other tax attributes available to offset such tax liability). To the
extent that the Manager elects to waive Common Tax Distributions pursuant to
this Section 5.4(b)(ii):

(A) Such waiver shall reduce the total Common Tax Distribution to the Charter
Member, under Section 5.4(b)(i) and shall reduce Common Tax Distributions made
to all other Members in the same amount per Common Unit.

 

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(B) Each Member that is not a member of the Charter Group shall receive an
advance (a “Tax Loan”) from the Company equal to the lesser of (1) the amount by
which such Member’s Common Tax Distribution is decreased in the aggregate under
this Section 5.4(b)(ii), and (2) such Member’s Common Excess Cumulative Tax
Liability. All Tax Loans shall accrue interest at the Applicable Rate
(calculated as of the first day of each Fiscal Quarter or, for the Fiscal
Quarter during which a Tax Loan is made, the day on which such Tax Loan is
made). All accrued and unpaid interest on Tax Loans shall be capitalized and
added to the unpaid principal amount of such Tax Loans on the last day of each
Fiscal Quarter. Tax Loans may be repaid at any time and from time to time
without premium or penalty. Tax Loans shall be recourse to the Class B Common
Units, Convertible Preferred Units and Class A Common Stock held by such Member.

(C) Without limiting the last sentece of Section 5.4(b)(ii)(B), to the extent
that any Member owes any Tax Loans (or accrued and unpaid interest thereon)
either (x) at the time that such Member exchanges Class B Common Units for
shares of Class A Common Stock or cash, or (y) as of the effective date of a
dissolution pursuant to Section 6.2, then, subject to Section 5.4(b)(ii)(D),
immediately prior to such exchange or the distribution of the Company’s assets
pursuant to such dissolution, as applicable, an amount of Common Units owned by
such Member equal to the lesser of (1) the quotient of (A) the product of
(i) the outstanding amount of such Member’s Tax Loans (including accrued and
unpaid interest thereon) multiplied by (ii) (x) in the case of an exchange, a
fraction, the numerator of which is the amount of such Member’s Class B Common
Units being exchanged and the denominator of which is the number of Class B
Common Units held by such Member immediately prior to the applicable Date of
Exchange or (y) in the case of a dissolution, 1, divided by (B) in the event of
a dissolution, the VWAP of the Class A Common Stock for the twenty
(20) consecutive Trading Days ending on the date preceding the date of the
dissolution, or, in the event of an Exchange, the two-day VWAP as set forth in
the definition of Cash Exchange Payment, as applicable, and (2) the amount of
Class B Common Units that such Member holds, shall be automatically cancelled in
satisfaction of an amount of such Member’s Tax Loans (including accrued and
unpaid interest thereon) equal to (x) (i) the number of Common Units so
cancelled multiplied by (ii) in the event of a dissolution, the VWAP of the
Class A Common Stock for the twenty (20) consecutive Trading Days ending on the
date preceding the date of the dissolution, or, in the event of an Exchange, the
two-day VWAP as set forth in the definition of Cash Exchange Payment, as
applicable. Any deemed payment pursuant to this Section 5.4(b)(ii)(C) shall be
applied first to the amount of a Member’s Tax Loans and second to the accrued
interest thereon. Such cancellation shall not require any action on the part of
any Person, including New Charter or the Company.

 

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(D) In the event a Member to which Section 5.4(b)(ii)(C) would otherwise be
applicable, exchanges Class B Common Units for shares of Class A Common Stock or
cash in connection with an Exchange in connection with, and immediately prior
to, a Change of Control, then “the VWAP of the Class A Common Stock for the
twenty (20) consecutive Trading Days ending on the date preceding the date of
the dissolution” or “the two-day VWAP as set forth in the definition of Cash
Exchange Payment”, as applicable, shall be replaced with “the fair market value,
as determined by the Board of Directors in good faith, of the per share
consideration to be received by the holders of the Class A Common Stock in
connection with the Change of Control.”

(E) To the extent that any holder of Class B Common Units owes any Tax Loans (or
accrued and unpaid interest thereon), such holder shall keep available, free and
clear of all liens, encumbrances, rights of first refusal and similar
restrictions such number of its Class B Common Units as would be required to
repay such Tax Loans (including accrued and unpaid interest thereon) in an
exchange of such Class B Common Units for cash under the Exchange Agreement,
provided, however, that such obligation shall not arise with respect to any
given Tax Loan until the fifth (5th) Business Day following the date such Tax
Loan is made. To the extent that, at the close of business on any Trading Day,
the amount of Tax Loans (including accrued and unpaid interest thereon) owed by
a Member exceeds the amount of cash that such Class B Common Units would be
exchanged for in an exchange for cash under the Exchange Agreement, then, such
Member shall be required to pay down such excess portion of its Tax Loans in
cash within five (5) Business Days.

(iii) In the event that the Company pays any Preferred Tax Distribution, the
amount treated as distributed shall be deducted from the next succeeding
distribution payable pursuant to Section 5.4(a)(i)(A) with respect to such
Member’s Convertible Preferred Units (and, if necessary, from any succeeding
distributions thereafter), until such amounts have been fully deducted from such
distribution(s) pursuant to Section 5.4(a)(i)(A). All Preferred Tax
Distributions shall be treated for purposes of this Agreement as having been
distributed pursuant to Section 5.4(a)(i)(A), whether or not deducted from a
succeeding distribution pursuant to this Section 5.4(b)(iii).

(iv) Common Tax Distributions shall have priority over (and shall be made
before) any distributions under Section 5.4(a). For the avoidance of doubt,
rights to Tax Distributions shall apply to all Members holding Units and with
respect to all Units.

An example of the Common Tax Distribution and Tax Loan calculation is attached
as Exhibit F.

 

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(c) Limitations on Distributions. Notwithstanding any provision to the contrary
contained in this Agreement, the Company shall not make a distribution to any
Member on account of its interest in the Company if such distribution would
violate the Act or other applicable law. A Member that receives a distribution
(i) in violation of this Agreement or (ii) that is required to be returned to
the Company under the Act shall return such distribution immediately upon demand
therefor by the Manager or the Board of Directors.

(d) Form of Distributions. Except as otherwise set forth in this Agreement,
distributions to the Members may be made in cash or in kind, or partly in cash
and partly in kind, as determined by the Manager, provided that the form of any
distribution shall be identical for all Common Unitholders.

(e) Withholding of Certain Amounts. The Company may withhold from any
distributions otherwise payable to a Member under this Agreement any amount
sufficient to satisfy any current or estimated future federal, state, local and
foreign withholding tax requirements relating thereto; and any amounts so
withheld, and any payment made by the Company or credit received by the Company
resulting in items that the Member may use to satisfy the Member’s current or
estimated future federal state, local and foreign tax liability, shall be
treated as if an amount equal to such withheld amounts or items had been
distributed to such Member. If such amount is not withheld and the Company is
required to pay an amount to any taxing authority, each Member agrees to
promptly remit such amount to the Company upon request.

(f) Distributions Made Solely With Respect to Membership Interests. Nothing in
this Section 5.4 shall be applied to release any Member from its obligations
pursuant to any relationship between the Company and such Member acting in a
capacity other than as a Member.

(g) Successors. For purposes of determining the amount of distributions under
this Section 5.4, each Member shall be treated as having received amounts
received by its predecessors in respect of any of such Member’s Units.
Notwithstanding anything in this Agreement to the contrary, any transferee that
receives Common Units shall be treated as if such transferee had received any
Tax Loans previously advanced and currently outstanding with respect to such
Common Units, including for purposes of Section 5.4(b)(ii)(C).

ARTICLE VI - RESIGNATION; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS;
ADMISSION OF NEW MEMBERS

SECTION 6.1 Member Withdrawal. No Member shall have the power or right to
withdraw, otherwise resign, or require the repayment of its Capital Contribution
(if any) or the redemption of its Units, prior to the dissolution and winding up
of the Company, except pursuant to a Transfer of Units permitted under this
Agreement as provided in Section 6.3. Notwithstanding the foregoing, the Manager
shall not have the power or right to withdraw or otherwise resign without the
consent the holders of a majority of the Class B Common Units.

 

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SECTION 6.2 Dissolution.

(a) Events. To the fullest extent permitted by Law, so long as the Exchange
Agreement is in effect, the Company shall not be dissolved. Following such time,
the Company shall be dissolved and its affairs shall be wound up on the first to
occur of the following:

(i) the termination of the legal existence or the membership in the Company of
the last remaining Member (unless within ninety (90) days, (x) such Member’s
personal representative or nominee agrees in writing to continue the Company and
to be admitted as a Member, or (y) a Member is otherwise admitted in accordance
with this Agreement, in each case, effective as of the occurrence of the event
that terminated the continued membership of such Member);

(ii) any event that makes it unlawful for all or substantially all of the
business of the Company and its Subsidiaries to continue; and

(iii) the entry of a decree of judicial dissolution of the Company under
Section 18-802 of the Act, provided, however, that no Member or its Affiliates
or agents shall apply for entry of a decree of judicial dissolution of the
Company under Section 18-802 of the Act at any time that the Exchange Agreement
is in effect.

Except as provided in Section 6.2(a), the death, retirement, resignation,
expulsion, bankruptcy or dissolution of a Member or the occurrence of any other
event that terminates the continued membership of a Member in the Company shall
not cause a dissolution of the Company, and the Company shall continue in
existence subject to the terms and conditions of this Agreement.

(b) Actions Upon Dissolution. When the Company is dissolved, the business and
property of the Company and its Subsidiaries shall be wound up and liquidated by
the Manager or, in the event of the unavailability of the Manager, such other
Member or other liquidating trustee as shall be named by the Manager. In such
event, the Manager (or such other Member or liquidating trustee, as applicable)
shall have the full right and discretion to manage such process, including the
power to prosecute and defend suits, collect debts, dispose of property, settle
and close the business of the Company and its Subsidiaries, discharge the
liabilities of the Company and its Subsidiaries, pay reasonable costs and
expenses incurred in the winding up, distribute remaining assets to Members in
accordance with this Agreement and execute and file a certificate of
cancellation under the Act.

(c) Priority. After the effective date of dissolution of the Company, the assets
of the Company shall be distributed in the following manner and order:

(i) first, to the satisfaction (whether by payment or the reasonable provision
for payment) of the liabilities of the Company to creditors, in the order of
priority established by the instruments creating or governing such obligations
and to the extent otherwise permitted by Law, including to the establishment of
reserves which the Manager or other liquidating trustee as may be selected
considers necessary for the reasonable provision for payment for (A) any known
contingent, conditional or unmatured contractual claims against the Company,
(B) any claim against the Company

 

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that is the subject of a pending action, suit or proceeding to which the Company
is a party and (C) any claim that is not known to the Company or has not arising
but that, based on the facts known to the Company, are likely to arise or to
become known to the Company within ten (10) years after the date of dissolution,
which reserves shall be held by the Manager (or other liquidating trustee if
applicable) for the purpose of disbursing such reserves in payment in respect of
any of the aforementioned claims (provided that at the expiration of such period
as the Manager (or other liquidating trustee, if applicable) shall deem
advisable, any balance of any such reserves not required to discharge such
liabilities or obligations shall be distributed as provided in
Section 6.2(c)(ii));

(ii) second, to the holders of Convertible Preferred Units pro rata according to
the number of Convertible Preferred Units held by each such holder until such
holder has received the aggregate Liquidation Preference of such Convertible
Preferred Units and any unpaid Preferred Accrued Distribution Amounts, after
giving effect to all contributions, distributions and allocations for all
periods (through the time of such distribution); and

(iii) third, to the Members pro rata in accordance with their respective
Percentage Interests as of the effective date of such dissolution.

(d) No Recourse. Each Member shall look solely to the assets of the Company for
all distributions with respect to the Company and shall have no recourse
therefor, upon dissolution or otherwise, against any Member or the Manager,
except to the extent otherwise provided in the Act, the Exchange Agreement or in
this Agreement, including in the event of the breach of this Agreement by the
Manager. No Member shall have any right to demand or receive property other than
cash upon dissolution of the Company; provided that, for the sake of clarity,
the Manager shall have the right to cause the Company to make distributions of
property other than cash upon dissolution of the Company based upon the fair
market value of such property on the date of distribution, as reasonably
determined by the Manager.

(e) Cancellation of Certificate. On completion of the distribution of the
Company assets as provided in this Agreement, the Company shall file a
certificate of cancellation with the Secretary of State of the State of Delaware
and take such other actions as may be necessary to terminate the Company, and
the Company shall at such time be terminated.

SECTION 6.3 Transfer by Members.

(a) No Member may Transfer any Units (or any part of its Membership Interest),
except as expressly provided in this Section 6.3. A/N may Transfer Units if and
to the extent such Transfer is (i) made in compliance with the Stockholders
Agreement and Section 6.3(c), Section 6.3(d) and Section 6.5 of this Agreement
or (ii) in the case of Common Units, required under the Exchange Agreement. Any
member of the Charter Group may Transfer any Class A Common Units to any other
member of the Charter Group. All Transfers required by the Exchange Agreement
shall be permitted Transfers hereunder.

 

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(b) Any Member who Transfers any Units in accordance with this Section 6.3 shall
cease to be a Member with respect to the Units so Transferred and shall no
longer have any rights or privileges of a Member with respect to the Units so
Transferred.

(c) Except with respect to Transfers of Units required pursuant to the Exchange
Agreement, any Person who acquires any Units in accordance with this Section 6.3
that is not an existing Member of the Company shall agree to be subject to, and
bound by, all of the terms and conditions of this Agreement to which the
predecessor in such Units was subject, and by which such predecessor was bound
by executing the Joinder Agreement in the form set forth in Exhibit C. In the
event that such Person fails to do so entirely or fails to do so in a timely
manner, such Person shall be deemed by its acceptance of the benefits of the
acquisition of such Units to have agreed to be subject to, and bound by, all of
the terms and conditions of this Agreement to which the predecessor in such
Units was subject, and by which such predecessor was bound, and, only with
respect to a Transfer to another A/N Party, for all purposes shall be deemed to
be a Member.

(d) Except with respect to Transfers of Units required pursuant to the Exchange
Agreement or Transfers of Units allowed under the second sentence of
Section 6.3(a) above, no Transfer shall be given effect and no Member may
Transfer any of such Member’s Units unless (in addition to such Transfer being
otherwise permitted under this Section 6.3) the transferee delivers to the
Company the representations set forth in Exhibit G, and the Manager determines,
in its reasonable discretion (including obtaining an opinion of counsel, if
deemed appropriate by the Manager), that such Transfer or attempted Transfer
would not cause the Company to be treated as a “publicly traded partnership”
within the meaning of Code Section 7704; it being understood that such
determination shall be made reasonably promptly.

(e) Notwithstanding any provision of this Agreement to the contrary, no Transfer
of Units may be made (i) except in compliance with all federal, state and other
applicable Laws, including federal and state securities Laws and “blue sky” Laws
(other than Transfers to the Company or New Charter as required by the Exchange
Agreement), (ii) if such Transfer would cause the Company to become subject to
the reporting obligations under the Exchange Act, or (iii) other than with the
prior written consent of the Manager, if such Transfer would result in a
termination of the Company for purposes of Section 708(b) of the Code.

(f) Any attempted Transfer of Units by any Member not permitted by or made in
accordance with this Section 6.3 and Section 6.5 shall, to the fullest extent
permitted by Law, be ineffective, null and void.

SECTION 6.4 Admission or Substitution of New Members.

(a) Admission. The Manager shall have the right, but not the obligation, to
admit as a new Member, any Person who acquires Units from a Member or from the
Company, respectively. Concurrently with the admission of a new Member, the
Manager shall forthwith cause any necessary papers to be filed and recorded and
notice to be given wherever and to the extent required showing the substitution
of a transferee as a Member in place of the transferring Member, or the
admission of an new Member, all at the expense, including payment of any
professional and filing fees incurred, of the new Member.

 

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(b) Registration of Transfer. In furtherance of the foregoing, with respect to
the Convertible Preferred Units, the Company shall maintain a register which,
subject to such reasonable regulations as the Manager may prescribe, will
provide for the registration and Transfer of Convertible Preferred Units
Transferred in accordance with Section 6.3. The Manager may appoint the Transfer
Agent to be the registrar and transfer agent for the purposes of registration of
the Convertible Preferred Units and Transfers of such Convertible Preferred
Units as provided herein. In the absence of manifest error, the register kept by
or on behalf of the Company shall be conclusive as to the identity of the
holders of the Convertible Preferred Units. Upon surrender of any Convertible
Preferred Unit Certificate for registration of Transfer of any Convertible
Preferred Units evidenced by Convertible Preferred Unit Certificate in
accordance with Section 6.3, the Company shall deliver or cause to be delivered,
in the name of the holder of record thereof (or the designated transferee or
transferees) one or more new Convertible Preferred Unit Certificate(s)
evidencing the same aggregate number of Convertible Preferred Units evidenced by
the Convertible Preferred Unit Certificate so surrendered. In the case of any
Transfer of Convertible Preferred Units permitted pursuant to Section 6.3, the
transferor shall provide the address and other contact information for each
transferee as contemplated by Section 8.6. No charge shall be imposed by the
Company for such Transfer; provided, that as a condition to the issuance of any
new Convertible Preferred Unit Certificate or the registration of any such
Transfer, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed with respect thereto.

(c) Conditions. Subject to Section 6.3(c), the admission of any Person as a new
Member shall be conditioned upon such Person’s written acceptance of and
adoption of all of the terms and provisions of this Agreement by execution and
delivery of the Joinder Agreement to this Agreement in the form set forth in
Exhibit C.

SECTION 6.5 Right of First Refusal; Right of First Offer and Matching Right.

(a) Grant of Right of First Refusal. For as long as any Convertible Preferred
Units remain outstanding, and subject to the terms and procedures set forth in
Section 6.5(b) below, each A/N Party (as applicable, the “Preferred Transferor”)
hereby grants to the Company a right of first refusal (the “Preferred ROFR”)
over any Transfer of Convertible Preferred Units proposed to be Transferred
(including to any Liberty Party (as defined in the Stockholders Agreement)) by
any A/N Party (other than (i) a Transfer to any other A/N Party, (ii) a Transfer
(or deemed Transfer) effected by an A/N Party in compliance with Section 4.6(c)
or Section 4.6(d) of the Stockholders Agreement, or (iii) a Preferred Private
Placement Offering that is conducted in compliance with this Section 6.5) (a
“ROFR Covered Transfer”).

(b) Terms and Procedures. For as long as any Convertible Preferred Units remain
outstanding, the Preferred Transferor shall not effect a ROFR Covered Transfer,
unless it shall first comply with the following provisions:

(i) If at any time a Preferred Transferor proposes to effect, or receives an
offer to effect, a ROFR Covered Transfer, then such Preferred Transferor shall
promptly give the Company written notice of the Preferred Transferor’s intention

 

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to make a ROFR Covered Transfer (the “Preferred ROFR Notice”). The Preferred
ROFR Notice shall specify (i) the number of Convertible Preferred Units to be
Transferred (“Offered Preferred Units”), (ii) the name(s) and address(es) of the
prospective transferee(s), (iii) the consideration per each Offered Preferred
Unit, which shall include the cash reasonable fair market value of any non-cash
consideration (the “ROFR Specified Price”), and (iv) the other material terms
and conditions upon which the proposed Transfer is to be made. The Preferred
ROFR Notice shall certify that the Preferred Transferor has received a bona fide
firm offer from the prospective transferee(s) and in good faith believes a
binding agreement for the Transfer is obtainable on the terms set forth in the
Preferred ROFR Notice. The Preferred ROFR Notice shall also include a copy of
any written proposal, term sheet or letter of intent or other agreement relating
to the proposed Transfer. The Preferred Transferor may also enter into a
definitive agreement for the proposed Transfer that is conditioned on the
Company not exercising its Preferred ROFR with respect to such Transfer, and in
such case the Preferred ROFR Notice shall include a copy of such definitive
agreement.

(ii) Within ten (10) Business Days following the Company’s receipt of a
Preferred ROFR Notice, the Company may irrevocably accept, by written notice to
the Preferred Transferor (the “Company ROFR Acceptance Notice”), to acquire all
or any portion of the Offered Preferred Units specified in the Preferred ROFR
Notice at the ROFR Specified Price and on the other terms and conditions set
forth in the Preferred ROFR Notice. If a Company ROFR Acceptance Notice is not
delivered by the Company to the Preferred Transferor within such ten
(10) Business Day period, then the Company will be deemed to have waived the
Preferred ROFR with respect to the Offered Preferred Units to the extent set
forth in Section 6.5(b)(iv). For the avoidance of doubt, during such ten
(10) Business Day period, the Preferred Transferor may not effect a ROFR Covered
Transfer (unless prior to the expiration thereof, the Company provides written
notice to the Preferred Transferor that it is expressly waiving the Preferred
ROFR with respect to the Offered Preferred Units).

(iii) Upon delivery of a Company ROFR Acceptance Notice, the Company will be
obligated to buy, and the Preferred Transferor will be obligated to sell, the
Offered Preferred Units specified in the Preferred ROFR Notice at the ROFR
Specified Price. The closing of such sale and purchase (the “ROFR Closing”)
shall occur at such time and place as the parties thereto may agree, but in any
event no later than the tenth (10th) Business Day after the Company ROFR
Acceptance Notice is delivered to the Preferred Transferor, or, if later, five
(5) Business Days after receipt of all material required governmental and
regulatory approvals for such sale and purchase. For the avoidance of doubt,
during such period, the Preferred Transferor may not effect a ROFR Covered
Transfer to anyone except for the Company. If any ROFR Closing does not occur
within the time limits set forth in this Section 6.5(b)(iii) as a result of bad
faith actions or inactions of the Company, New Charter or any of their
respective Subsidiaries, or the receipt of any such governmental or regulatory
approval, if any, is materially delayed due to the failure by the Company, New
Charter or any of their respective Subsidiaries to use reasonable best efforts
to obtain such approvals, then the Preferred Transferor shall be free to effect
a ROFR Covered Transfer of any or all of the

 

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Offered Preferred Units subject to the associated Company ROFR Acceptance Notice
at any price and clauses (a) and (b) of this Section 6.5 will terminate and be
of no force or effect with respect to any future Transfer of Convertible
Preferred Units by any A/N Party.

(iv) If the Company has waived, or is deemed to have waived, the Preferred ROFR,
the Preferred Transferor shall be free to effect a ROFR Covered Transfer of all
of the Offered Preferred Units with respect to which the Company has, or is
deemed to have, waived the Preferred ROFR during the period of thirty
(30) Business Days following the expiration of the ten (10) Business Day period
specified in clause (ii) above for a price that is equal to or greater than the
ROFR Specified Price. Any such Offered Preferred Units in respect of which the
Preferred Transferor has not effected a ROFR Covered Transfer prior to the
expiration of such thirty (30) Business Day period shall thereafter again be
subject to all of the terms and conditions of this Section 6.5 with respect to
any ROFR Covered Transfer.

(c) If at any time a Preferred Transferor proposes to effect a Preferred Private
Placement Offering:

(i) Such Preferred Transferor shall promptly give the Company written notice of
the Preferred Transferor’s intention to do so (the “Preferred Private Placement
Notice”), specifying the number of Convertible Preferred Units to be Transferred
in the Preferred Private Placement Offering (the “Private Placement Preferred
Units”).

(ii) For ten (10) Business Days following the Company’s receipt of a Preferred
Private Placement Notice (the “Preferred Private Placement ROFO Period”), the
Company and the Preferred Transferor(s) will cooperate in good faith and use
their respective reasonable best efforts to agree on updated assumptions in the
categories set out on Exhibit I for the calculation of a then-current per-unit
value of a Convertible Preferred Unit, based on market conditions as of the
applicable time (the “Preferred Updated Valuation”). Other than the agreed
updates to such assumptions set out on Exhibit I, the Preferred Updated
Valuation will be calculated based on the same Black-Scholes methodology used to
produce the valuation that determined the table set forth in Exhibit H.

(iii) Prior to the Expiration of the Preferred Private Placement Offer Period,
the Company may, but is not obligated to, make a binding, irrevocable offer to
purchase the Private Placement Preferred Units entirely for cash, without any
financing or other contingency other than receipt of all material required
governmental and regulatory approvals for such purchase, either (A) in an amount
per unit greater than or equal to the Preferred Updated Valuation (a “Preferred
At the Market Offer”), or (B) in an amount per unit less than the Preferred
Updated Valuation or in any amount if no Preferred Updated Valuation is agreed
(a “Preferred Other Offer”). The amount per unit set forth in any Preferred
Other Offer shall be determined by the Company in good faith, and the Preferred
Other Offer shall include the Company’s reasoning for the amount offered.

 

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(iv) Upon delivery of a Preferred At the Market Offer, the Company will be
obligated to buy, and the Preferred Transferor(s) will be obligated to sell, the
Preferred Private Placement Units at the price specified in such Preferred At
the Market Offer.

(v) Following delivery of a Preferred Other Offer, the Preferred Transferor(s)
shall be permitted to pursue a Preferred Private Placement Offering of the
Preferred Private Placement Units that would provide the Preferred Transferor(s)
with net proceeds per unit greater than the amount per unit set forth in the
Preferred Other Offer for a period of 21 Business Days following such delivery
(the “Preferred Private Placement Offering Period”). Throughout the Preferred
Private Placement Offering Period, the Preferred Transferor(s) shall keep the
Company apprised on a current basis of the progress of the Preferred Private
Placement Offering, including the anticipated time of pricing, and permit the
Company to participate as a potential buyer in the Preferred Private Placement
Offering. At any time prior to 28 hours prior to the anticipated pricing of the
Preferred Private Placement Offering, the Company may, but shall not be
obligated to, deliver an updated Preferred Other Offer on the same terms as the
then-existing Preferred Other Offer except setting forth an all cash amount per
unit higher than the then-existing Preferred Other Offer. If, at the pricing of
the Preferred Private Placement Offering, proceeds (net of any underwriters’
discounts or commissions) per unit to the Preferred Transferor(s) would be less
than or equal to the amount per unit set forth in the Preferred Other Offer
(taking into account any updates made prior to 28 hours prior to such pricing),
then the Preferred Transferor(s) will be obligated to sell, and the Company will
be obligated to buy, the Preferred Private Placement Units at the price
specified in the Preferred Other Offer (taking into account any updates made
prior to 28 hours prior to such pricing). If, at the pricing of the Preferred
Private Placement Offering, proceeds (net of any underwriters’ discounts or
commissions) per unit to the Preferred Transferor(s) would be greater than the
amount per unit set forth in the Preferred Other Offer (taking into account any
updates made prior to 28 hours prior to such pricing), then the Preferred
Transferor(s) shall be permitted to consummate the Preferred Private Placement
Offering at a price (net of underwriters’ discounts and commissions) that is at
or above the price set forth in the Preferred Other Offer. At any time during
the Preferred Private Placement Offering, the Preferred Transferor(s) may, but
are not obligated to, abandon the Preferred Private Placement Offering and
accept the then-existing Preferred Other Offer. If the Company updates its Other
Offer in accordance with this paragraph, the Company will also pay the
reasonable fees and expenses of the advisors of the Preferred Transferor(s) in
the marketing process of the Preferred Private Placement Offering.

(vi) If the Company does not make any Preferred At the Market Offer or Preferred
Other Offer before the expiration of the Preferred Private Placement ROFO
Period, the Preferred Transferors shall be free to pursue and consummate a
Preferred Private Placement Offering for a period of 21 Business Days following
the expiration of

 

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the Preferred Private Placement ROFO Period without any restraint as to pricing.
The Preferred Transferor(s) shall permit the Company to participate as a
potential buyer in the Preferred Private Placement Offering.

(vii) The closing of any sale by Preferred Transferor(s) and purchase by the
Company in accordance with clauses (iv) and (v) of this Section 6.5(c) shall
occur at such time and place as the parties thereto may agree, but as promptly
as reasonably practicable and in any event no later than the tenth
(10th) Business Day after the obligation to purchase and sell becomes effective,
or, if later, five (5) Business Days after receipt of all material required
governmental and regulatory approvals for such sale and purchase. For the
avoidance of doubt, during such period, the Preferred Transferor may not effect
a Preferred Private Placement Offering. If (A) any such purchase and sale does
not occur within the time limits set forth in this Section 6.5(c)(vii) as a
result of bad faith actions or inactions of the Company, New Charter or any of
their respective Subsidiaries, or (B) the receipt of any such governmental or
regulatory approval, if any, is materially delayed due to the failure by the
Company, New Charter or any of their respective Subsidiaries to use reasonable
best efforts to obtain such approvals, then the Preferred Transferor shall be
free to pursue and consummate a Preferred Private Placement Offering of any or
all of the Private Placement Preferred Units that were to be so purchased and
sold without any restraint as to pricing and, in the case of clause (A), this
Section 6.5(c) will terminate and be of no force or effect with respect to any
future Transfer of Convertible Preferred units by any A/N Party.

ARTICLE VII - REPORTS TO MEMBERS; TAX MATTERS

SECTION 7.1 Books of Account. Appropriate books of account shall be kept by the
Company and its Subsidiaries, in accordance with the generally accepted
accounting principles of the United States, at the principal place of business
of the Company, and each Member shall have access to all books, records and
accounts of the Company and its Subsidiaries and the right to make copies
thereof for any purpose reasonably related to the Member’s interest as a member
of the Company, in each case, under such conditions and restrictions as the
Manager may reasonably prescribe.

SECTION 7.2 Reports. All references to Members in this Section 7.2 refer to only
those Members holding at least one percent (1%) of the Common Units then held by
all Members.

(a) Quarterly Tax Reports. As promptly as possible, but in no event later than
fifteen (15) days prior to the estimated tax due date of each fiscal quarter
(i.e., no later than March 31, May 31, August 31 and November 30) the Manager
shall cause to be prepared and delivered to each Member statements of the Common
Per Unit Tax Distribution Amount and the Preferred Per Unit Tax Distribution
Amount for such fiscal quarter, as applicable, as well as a calculation of the
Assumed Tax Rate.

(b) Schedules K-1. Within sixty (60) days after the close of each taxable year,
the Manager shall cause to be provided to each Member an estimate of taxable
income for such

 

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taxable year. Within two hundred and ten (210) days after the close of each
taxable year, the Manager shall cause to be provided any completed IRS Schedule
K-1 and such other financial, tax or other information as reasonably requested
by a Member at such times as may be required to comply with any applicable
public disclosure, external financial reporting, federal, state or local tax
filings or any other legal requirements to which such Member is subject.

(c) Members’ Tax Filings. To the extent permitted by the Code, each Member
agrees to file all tax returns consistently with the treatment of the Company as
a partnership with respect to the determination of the taxable income of the
Company.

(d) Access to Information. The Manager shall not have the authority to withhold
any confidential information from the Members. Any Member shall have the right
to access any information of the Company on a reasonable basis so long as the
Member keeps such information confidential pursuant to Section 8.4.

(e) Determinations. All determinations, valuations and other matters of judgment
required to be made for non-tax accounting purposes under this Agreement shall
be made in the Manager’s sole discretion.

SECTION 7.3 Fiscal Year. The fiscal year of the Company (the “Fiscal Year”)
shall end on December 31 of each calendar year unless otherwise determined by
the Manager in accordance with Section 706 of the Code.

SECTION 7.4 Certain Tax Matters.

(a) Certain Tax Elections.

(i) Partnership Treatment. The Company shall not file any election pursuant to
Regulations Section 301.7701-3(c) to be treated as an entity other than a
partnership. The Company shall not elect, pursuant to Section 761(a) of the
Code, to be excluded from the provisions of subchapter K of the Code. If
requested by the Manager, each Member agrees to provide the Company with such
assistance as would be required (including signing any election forms) to cause
any new direct or indirect Subsidiaries acquired by the Company or any of its
Subsidiaries or organized by the Company or any of its Subsidiaries to elect to
be treated as a partnership or disregarded entity for U.S. federal tax purposes,
such election to be effective on or before the date such new Subsidiary is
acquired or organized.

(ii) Elections by the Company. Except as provided in Section 7.4(a)(i), relating
to the tax classification of the Company, and Section 7.4(a)(v) relating to
Section 754 elections, the Manager may make, but shall not be obligated to make,
any tax election provided under the Code, or any provision of state, local or
foreign tax Law. All decisions and other matters concerning the computation and
allocation of items of income, gain, loss, deduction and credit among the
Members, and accounting procedures not specifically and expressly provided for
by the terms of this Agreement, shall be determined by the Manager. Any
determination made pursuant to this Section 7.4(a)(ii) by the Manager shall be
conclusive and binding on all Members.

 

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(iii) Elections by Members. Without the consent of the Manager, no Member shall
make the election provided by Section 732(d) of the Code, relating to the basis
of property distributed by a Company to certain Members. In the event any Member
makes any tax election that requires the Company to furnish information to such
Member to enable such Member to compute its own tax liability, or requires the
Company to file any tax return or report with any tax authority, or adjust the
basis of Company property, in any case that would not be required in the absence
of such election made by such Member, the Manager may, as a condition to
furnishing such information, or filing such return or report, or making such
basis adjustment, require such member to pay to the Company any incremental
expenses incurred in connection therewith.

(iv) Member Obligations. Promptly upon request, each Member shall provide the
Manager with any information related to such Member necessary to allow the
Company to comply with any tax reporting, tax withholding or tax payment
obligations of the Company.

(v) Section 754 Elections. The Members recognize and agree that a valid election
pursuant to Section 754 of the Code will be made for the first relevant taxable
year during which a distribution of partnership property or transfer of a
partnership interest occurs and shall be in full effect in respect of the
Company, and that no Member shall take any action to affect the effectiveness or
validity of such election. In addition:

(A) the Manager shall make such adjustments to the definition of Gross Asset
Value and Net Income and Net Loss, and to the Regulatory Allocations required by
Section 5.3(c) as are necessary to carry out the provisions of Regulations
Section 1.704-1(b)(2)(iv)(m)(2) and 1.704-1(b)(2)(iv)(m)(4); and

(B) a Member who acquires any Units shall furnish to the Manager such
information as the Manager shall reasonably require to enable it to compute the
adjustments required by Sections 743 and 755 of the Code and the Regulations
thereunder.

(vi) Notice 2015-54. The Charter Group and the Manager shall ensure that (i) the
Company is not treated as a 721(c) partnership and (ii) no foreign person
related to any member of the Charter Group is a direct or indirect partner in
the Company, each within the meaning of IRS Notice 2015-54.

(b) Preparation of Returns. The Manager shall cause to be prepared all federal,
state, and local tax returns of the Company for each year for which such returns
are required to be filed and shall cause such returns to be timely filed. Except
to the extent otherwise expressly provided in this Agreement, the Manager shall
determine the appropriate treatment of each item of income, gain, loss,
deduction and credit of the Company and the accounting methods and conventions
under the tax Laws of the United States, the several states and other relevant
jurisdictions as to the treatment of any such item or any other method or
procedure related to the preparation of such tax returns. Notwithstanding the
foregoing, with

 

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respect to any allocation under Section 704(c) of the Code, (a) the Manager
shall provide the draft allocation and supporting calculations in sufficient
detail to A/N reasonably in advance of any applicable filing due date (taking
into account any applicable extensions) for A/N’s review; and (b) the Manager
shall consider in good faith any of A/N’s comments thereon; it being understood
that if the Manager and A/N are unable to reach an agreement with respect to any
allocation under Section 704(c) of the Code, the Manager’s determination shall
control.

(c) Tax Matters Member.

(i) Designation and Powers. The partnership representative within the meaning of
Section 6223(a) of the Code, and the tax matters partner within the meaning of
Section 6231(a)(7) of the Code prior to the amendment by the Bipartisan Budget
Act of 2015 (the “Pre-Amendment Code”), shall be, in each case, the Manager or
the Manager’s designee (the “Tax Matters Member”). The Tax Matters Member shall
have all of the rights, authority and power, and shall be subject to all of the
obligations, as applicable, of a tax matters partner to the extent provided in
the Pre-Amendment Code and the Regulations relating to the Pre-Amendment Code,
and of a partnership representative to the extent provided in the Code and
Regulations. The Tax Matters Member shall take such action as may be reasonably
necessary to cause each other eligible Member to become a “notice partner”
within the meaning of Section 6231(a)(8) of the Pre-Amendment Code. To the
extent and in the manner provided by applicable Code sections and Regulations
thereunder, the Tax Matters Member (i) shall furnish the name, address, profits
interest and taxpayer identification number of each Member to the IRS and
(ii) shall keep the Members informed of all administrative and judicial
proceedings for the adjustment of Company items required to be taken into
account by a Member for income tax purposes. The Tax Matters Member shall notify
the other Members within forty-five (45) Business Days after it receives notice
from the IRS (or any state and local tax authority), of any administrative
proceeding with respect to an examination of, or proposed adjustment to, any
Company tax items.

(ii) Member Retained Rights. The Tax Matters Member shall notify the other
Members, within ten (10) Business Days after it receives notice from the IRS, of
any administrative proceeding with respect to an examination of, or proposed
adjustment to, any Company tax items. The Tax Matters Member shall provide the
other Members with notice of its intention to extend the statute of limitations
or file a tax claim in any court at least twenty (20) days before taking such
action. In the event that the other Members notify the Tax Matters Member of
their intention to represent themselves, or to obtain independent counsel and
other advisors to represent them, in connection with any such examination,
proceeding or proposed adjustment, the Tax Matters Member agrees to supply the
other Members and their counsel and other advisors, as the case may be, with
copies of all written communications received by the Tax Matters Member with
respect thereto, together with such other information as they may reasonably
request in connection therewith. The Tax Matters Member further agrees, in that
event, to cooperate with the other Members and their counsel and other advisors,
as the case may be, in connection with their separate representation, to the
extent reasonably practicable and at the sole cost and expense of such other
Members.

 

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In addition to the foregoing, the Tax Matters Member shall notify the other
Members at least twenty (20) days prior to submitting a request for
administrative adjustment on behalf of the Company.

(iii) State and Local Tax Law. If any state or local tax Law provides for a tax
matters partner, partnership representative or person having similar rights,
powers, authority or obligations, the Tax Matters Member shall also serve in
such capacity. In all other cases, the Tax Matters Member shall represent the
Company in all tax matters to the extent allowed by Law.

(iv) Expenses of the Tax Matters Member. All reasonable out-of-pocket expenses
incurred by the Tax Matters Member in its capacity as such shall be borne by the
Company as an ordinary expense of its business. Such expenses shall include fees
of attorneys and other tax professionals, accountants, appraisers and experts,
filing fees and reasonable out-of-pocket costs.

(v) Inconsistent Return Positions. No Member shall file a notice with the IRS
under Section 6222(b) of the Pre-Amendment Code in connection with such Member’s
intention to treat an item on such Member’s federal income tax return in a
manner that is inconsistent with the treatment of such item on the Company’s
federal income tax return, unless such Member has, not less than thirty
(30) days prior to the filing of such notice, provided the Tax Matters Member
with a copy of the notice and thereafter in a timely manner provides such other
information related thereto as the Tax Matters Member shall reasonably request.

(vi) Election into TEFRA. In the event that the Company is not subject to the
consolidated audit rules of Sections 6221 through 6234 of the Pre-Amendment
Code, during any Fiscal Year, then so long as such rules remain in effect, each
Person who was a Member at any time during such Fiscal Year hereby agrees to
sign an election pursuant to Section 6231(a)(1)(B)(ii) of the Pre-Amendment Code
and Section 301.6231(a)(1)-1(b)(2) of the Regulations thereunder, to be filed
with the Company’s federal income tax return for such Fiscal Year to have such
consolidated audit rules apply to the Company.

(vii) Bipartisan Budget Act of 2015 Elections. The Company will not elect into
the partnership audit procedures enacted under Section 1101 of the Bipartisan
Budget Act of 2015 (the “BBA Procedures”) for any tax year beginning before
January 1, 2018, and, to the extent permitted by applicable law and regulations,
the Company will annually elect out of the BBA Procedures for tax years
beginning on or after January 1, 2018. For any year in which A/N (or any
Affiliate of A/N) is a member and for which applicable law and regulations do
not permit the Company to elect out of the BBA Procedures, then within
forty-five (45) days of any notice of final partnership adjustment, the Company
will elect the alternative procedure under Section 6226 of the Internal Revenue
Code of 1986, as amended by Section 1101 of the Bipartisan Budget Act of 2015,
and furnish to the Internal Revenue Service and each partner of the Company
during the year or years to which the notice of final partnership adjustment
relates a statement of the partner’s share of any adjustment set forth in the
notice of final partnership adjustment.

 

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(d) Treatment of the Contribution.

(i) The Members agree that the contribution of property by A/N to the Company
pursuant to Section 2.2(a) of the Contribution Agreement and the issuance of
Convertible Preferred Units and Class B Common Units to A/N pursuant to
Section 2.3(a)(i) of the Contribution Agreement shall be deemed to occur on the
Closing Date (the “Effective Time”) in accordance with the sequence as set forth
in Exhibit E, and after such Effective Time on the Closing Date, the Company
will incur a new and separate nonrecourse borrowing which shall be considered a
nonrecourse liability pursuant to Section 752 (which may be in the form of
senior debt, a new term loan or any combination thereof), in an amount of at
least $2,021,497,036 (the “Borrowing”) in a manner such that, for purposes of
Regulations Section 1.707-5(b)(1), $2,021,497,036 of the Cash Consideration (as
defined in the Contribution Agreement and subsequently revised) paid pursuant to
Section 2.3(a)(i) of the Contribution Agreement is allocable to the proceeds of
such borrowing pursuant to Regulations Section 1.163-8T.

(ii) The Members acknowledge that Bright House Networks, LLC is a disregarded
entity pursuant to Regulations Section 301.7701-3, and that for income tax
purposes, the contribution by A/N of its interest in the TWEAN Partnership (as
defined in the Contribution Agreement) to the Company in satisfaction of its
obligation to contribute all of the issued and outstanding limited liability
company membership interests of Bright House Networks, LLC to the Company shall
be treated as a contribution of the Bright House Networks, LLC assets, subject
to the Bright House Networks, LLC liabilities (the “A/N Contributed Property”).

(iii) The Members acknowledge that, for income tax purposes, the receipt of the
Cash Consideration (as defined in the Contribution Agreement and subsequently
revised) by A/N shall be treated (A) as a “debt-financed transfer” to A/N under
Regulations Section 1.707-5(b)(1) to the extent the “debt-financed transfer” is
traceable to A/N’s allocable share, determined under Regulations
Section 1.707-5(b)(2), of the Borrowing, and (B) to the extent not otherwise
treated as a “debt-financed transfer” pursuant to the preceding clause, as a
reimbursement of A/N’s capital expenditures within the meaning of Regulations
Section 1.707-4(d) to the extent of the A/N capital expenditures with respect to
the A/N Contributed Property within the two-year period preceding the transfer
of such property to the Company, but only to the extent that A/N provides
information reasonably satisfactory to the Manager (or the Manager’s
accountants) with respect to such expenditures.

(iv) The Members acknowledge that, for income tax purposes, transfers of money
or other consideration by the Company to members of the Charter Group (including
distributions and deemed distributions) shall be treated as reimbursement for
capital expenditures to the extent permitted by Regulations Section 1.707-4(d)
but only to the extent that the Charter Group provides information reasonably
satisfactory to the Manager (or the Manager’s accountants) with respect to such
expenditures.

 

73

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SECTION 7.5 Certain Business Combinations. Any business combination involving
New Charter, Charter Holdings or any other member of the Charter Group entered
into prior to the fifth anniversary of the date of this Agreement that results
in the imposition of any tax on any A/N Party shall be structured so that any
consideration paid to any A/N Party in respect of such A/N Party’s Class B
Common Units or Convertible Preferred Units shall be at least forty-percent
(40%) cash.

ARTICLE VIII - MISCELLANEOUS

SECTION 8.1 Exhibits. Without in any way limiting the provisions of Section 7.2,
the Manager may from time to time execute on behalf of the Company and deliver
to the Members exhibits which set forth the then-current Capital Account
balances of each Member and any other matters deemed appropriate by the Manager
or required by applicable Law. Such exhibits shall be for information purposes
only and shall not be deemed to be part of this Agreement for any purpose
whatsoever.

SECTION 8.2 Governing Law; Severability; Selection of Forum; Waiver of Trial by
Jury. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR
PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT
TO THE LAW OF ANOTHER JURISDICTION. In the event of a direct conflict between
the provisions of this Agreement and any provision of the Certificate, this
Agreement shall control; in the event of a direct conflict between the
provisions of this Agreement and any mandatory provision of the Act, the
applicable provision of the Act shall control. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Agreement, or the application
thereof to any Person or circumstance, is invalid or unenforceable to any
extent, (a) a suitable and equitable provision shall be substituted therefor in
order to carry out, so far as may be valid and enforceable, the intent and
purpose of such invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability, and
such invalidity or unenforceability shall not affect the validity or
enforceability of such provision, or the application thereof, in any other
jurisdiction. Each party agrees that it shall bring any action, suit, demand or
proceeding (including counterclaims) in respect of any claim arising out of or
related to this Agreement or the transactions contemplated hereby, exclusively
in the Court of Chancery of the State of Delaware or, solely if that court does
not have subject matter jurisdiction, any federal court sitting in the State of
Delaware (the “Chosen Courts”), and solely in connection with claims arising
under this Agreement or the transactions contemplated hereby (i) irrevocably
submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any
objection to laying venue in any such action, suit, demand or proceeding in the
Chosen Courts, (iii) waives any objection that the Chosen Courts are an
inconvenient forum or do not have jurisdiction over any party and (iv) agrees
that service of process upon such party in any such

 

74

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action, suit, demand or proceeding shall be effective if notice is given in
accordance with Section 8.6. Each party irrevocably waives any and all right to
trial by jury in any action, suit, demand or proceeding (including
counterclaims) arising out of or related to this Agreement or the transactions
contemplated hereby.

SECTION 8.3 Successors and Assigns; No Third-Person Beneficiaries. This
Agreement is binding upon the parties to this Agreement and their respective
permitted successors and assigns. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and each of their respective permitted successors and assigns and
other than the Covered Persons with respect to Section 4.6.

SECTION 8.4 Confidentiality. The Company shall use reasonable best efforts to
preserve the confidentiality of the confidential information of the Company and
its Subsidiaries. By executing this Agreement, for the period during which a
Member is a party to this Agreement and for two (2) years thereafter, each
Member expressly agrees to maintain the confidentiality of, and not to disclose
to any Person other than the Company or its Subsidiaries, another Member or any
of their respective financial advisors, accountants, attorneys or other
advisors, without the consent of Manager but subject to the first sentence of
this Section 8.4, any information relating to the business, financial structure,
financial position or financial results, customers, suppliers or affairs of the
Company and its Subsidiaries, except (i) as otherwise required by Law or by any
Government Entity or Self-Regulatory Organization having jurisdiction over such
Members; provided, that the disclosing Member will exercise reasonable best
efforts to minimize disclosure of such information that is confidential or
proprietary and to seek confidential treatment for any such information to the
maximum extent permissible, (ii) the delivery by a Member of financial
statements of the Company and its Subsidiaries to its direct or indirect
partners, stockholders or members, provided that such parties are bound by
appropriate confidentiality provisions, including in their ability to use such
information, (iii) the disclosure of any information that was or becomes
available to such Member on a non-confidential basis from a source other than
the Company or its representatives, financial advisors, accountants, attorneys
or other advisors provided such other source is not known by such Member, after
reasonable inquiry, to be bound by a confidentiality obligation with respect to
such information, or (iv) the disclosure of any information that was or becomes
generally available to the public (other than as a result of a breach by such
Member of this Agreement). This provision shall survive any termination of this
Agreement either generally or in regard to any Member. Each Member agrees that
monetary damages may not be an adequate remedy for a breach of this Section 8.4,
and that, in addition to any other remedies, each Member shall be entitled to
seek injunctive relief to restrain any such breach, whether threatened or
actual, without the necessity of proving the inadequacy of monetary damages as a
remedy.

SECTION 8.5 Amendments. No amendment of any provision of this Agreement shall be
effective against the Company or the Members unless such amendment is approved
by the Manager or holders of a majority of the outstanding Common Units, except
as otherwise expressly provided herein and without limiting Section 4.2(b). This
Agreement and any provision hereof may only be waived by a writing signed by the
party against whom the waiver is to be effective. The failure of any party to
enforce any of the provisions of this Agreement

 

75

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shall in no way be construed as a waiver of such provisions and shall not affect
the right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.

SECTION 8.6 Notices. Whenever notice is required or permitted by this Agreement
to be given, such notice shall be in writing and shall be given to any Member at
its address, telecopy number or email address shown in the Company’s books and
records, or, if given to the Company, at the addresses listed on Schedule I or
such other address as may be designated by the parties from time to time. Each
proper notice shall be effective upon any of the following: (i) personal
delivery to the recipient, (ii) when telecopied or emailed to the recipient if
the telecopy is promptly confirmed by automated or telephone confirmation
thereof or if the email is promptly confirmed by email or telephone confirmation
thereof, or (iii) one (1) Business Day after being sent to the recipient by
reputable overnight courier service (charges prepaid), provided, that, unless
the Company has not been provided with an email address of the applicable party,
no notice telecopied or sent via reputable overnight courier service (charges
prepaid), shall be effective unless the Company shall also send a copy of such
notice by e-mail to the e-mail address shown in the Company’s books and records,
or, if given to the Company, the e-mail addresses listed on Schedule I or such
other e-mail address as may be designated by the parties from time to time.

SECTION 8.7 Counterparts. This Agreement may be executed in any number of
counterparts (including by means of telecopied signature pages), each of which
shall be deemed an original, and all of which together shall constitute one and
the same agreement.

SECTION 8.8 Non-Circumvention. Nothing in this Agreement shall abridge or alter
any rights provided for in the Stockholders Agreement. The Company agrees not
take any action (or omit to take any action) that is prohibited by, or
inconsistent with, the Exchange Agreement.

SECTION 8.9 Entire Agreement. This Agreement, including the Exhibits and
Schedules to this Agreement, the Specified Documents and the Contribution
Agreement embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained in this Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to the subject matter hereof and thereof, other than the Specified
Documents.

SECTION 8.10 Specific Performance. Each party hereto acknowledges that the
remedies at law of the other parties for a breach or threatened breach of this
Agreement would be inadequate and, in recognition of this fact, any party to
this Agreement, without posting any bond or furnishing other security, and in
addition to all other remedies that may be available, shall be entitled to
equitable relief in the form of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy that
may then be available and no party shall oppose the granting of such relief on
the basis that money damages would be sufficient.

 

76

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SECTION 8.11 Control of Subsidiaries. To the extent that this Agreement
obligates the Company or any member of the Charter Group other than New Charter,
New Charter shall take all action necessary to ensure that such party fulfills
its obligations hereunder.

[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY — SIGNATURE PAGES FOLLOW]

 

77

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IN WITNESS WHEREOF, the parties have executed this Amended and Restated Limited
Liability Company Agreement as of the day and year first above written.

 

  THE COMPANY:   CHARTER COMMUNICATIONS HOLDINGS, LLC By:  

/s/ Charles Fisher

  Name:   Charles Fisher   Title:   Senior Vice President, Corporate Finance  
NEW CHARTER:   CHARTER COMMUNICATIONS, INC. By:  

/s/ Charles Fisher

  Name:   Charles Fisher   Title:   Senior Vice President, Corporate Finance  
THE MEMBERS:   CCH II, LLC By:  

/s/ Charles Fisher

  Name:   Charles Fisher   Title:   Senior Vice President, Corporate Finance  
ADVANCE/NEWHOUSE PARTNERSHIP By:  

/s/ Steven A. Miron

  Name:   Steven A. Miron   Title:   Chief Executive Officer

 

Signature Page to the Amended and Restated

Limited Liability Company Agreement of Charter Communications Holdings, LLC

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

SCHEDULE I

Members

 

Members

  

Notice Address

   No. of
Class A
Common
Units Held     No. of
Class B
Common
Units Held      No. of
Convertible
Preferred
Units Held  

CCH II, LLC

  

400 Atlantic Street, 10th Floor

Stamford, Connecticut 06901

Attn: General Counsel

Facsimile: (203) 564-1377

Email: rick.dykhouse@chartercom.com

       *      0         0   

Advance/Newhouse Partnership

  

Advance/Newhouse Partnership

c/o Sabin Bermant & Gould LLP

One World Trade Center, 44th Floor

New York, NY 10007

Attn: Managing Partner

Facsimile: (212) 381-7232

E-Mail: rhuber@sabinfirm.com

     0        30,995,834         25,000,000   

Total

   N/A        *      30,995,834         25,000,000         

 

 

   

 

 

    

 

 

 

 

* To be equal to the number of shares of Class A Common Stock outstanding at the
Close of Business on the Closing Date. Currently estimated at 270.4 million.

 

Schedule I to the Amended and Restated

Limited Liability Company Agreement of Charter Communications Holdings, LLC

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

EXHIBIT A

EXAMPLE CALCULATION OF ASSUMED TAX RATE FOR ORDINARY INCOME OF INDIVIDUAL MEMBER

 

Federal Income Tax Rate

     39.60 % 

Net Investment Income Tax Rate

     3.80 % 

New York State Income Tax Rate

     8.82 % 

New York City Income Tax Rate

     3.88 % 

Itemized Deduction Benefit

     -4.21 %a    

 

 

 

Total Tax Rate

     51.89 %    

 

 

 

 

a. Itemized Deduction Tax Benefit on New York State/City Income Tax

 

New York State Income Tax Rate

     8.82 % 

New York City Income Tax Rate

     3.9 %    

 

 

 

Combined New York State and City Income Tax Rate

     12.70 % 

Less : 3% Reduction in Itemized Deductions

     -3.0 %    

 

 

 

Net State/City Income Tax Deduction

     9.70 % 

Combined Federal Income and Net Investment Income Tax Rate

     -x43.40 %    

 

 

 

Itemized Deduction Benefit

     -4.21 %a    

 

 

 

 

A-1

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

EXHIBIT B

FORM OF CONVERTIBLE PREFERRED UNIT CERTIFICATE

Certificate Evidencing Convertible Preferred Units

in

Charter Communications Holdings, LLC

 

No. Convertible Preferred Units-[            ]    [            ] Units

In accordance with the Amended and Restated Limited Liability Company Agreement,
dated as of May 18, 2016 (as amended, supplemented or restated from time to
time, the “Agreement”) of Charter Communications Holdings, LLC, a Delaware
limited liability company (the “Company”), the Company hereby certifies that
[            ] (the “Holder”) is the registered owner of [            ]
Convertible Preferred Unit(s) in the Company (the “Convertible Preferred Units”)
transferable on the books of the Company, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed. The rights,
preferences and limitations of the Convertible Preferred Units are set forth in,
and this Certificate and the Convertible Preferred Units represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Agreement. The Agreement is on file at, and a copy will be furnished without
charge on delivery of written request to the Company, the principal office of
the Company located at [●], or such other address as may be specified by notice
under the Agreement. Capitalized terms used herein but not defined shall have
the meanings given them in the Agreement.

The holder of this Certificate, by acceptance of this Certificate, shall be
deemed to have to have agreed to be subject to and bound by all of the terms and
conditions of the Agreement. Any attempted transfer of this Certificate or the
Convertible Preferred Units not in accordance with the Agreement shall be null
and void ab initio.

This Certificate is governed by and shall be construed in accordance with the
laws of the State of Delaware, excluding any conflict-of-laws rule or principle
that might refer the governance or the construction of this Agreement to the law
of another jurisdiction.

This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent.

 

Dated: Charter Communications Holdings, LLC By:  

 

  Name:   Title: Countersigned and Registered by:

 

as Transfer Agent

 

B-1

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

(reverse side of certificate)

THE CONVERTIBLE PREFERRED UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY OTHER APPLICABLE SECURITIES LAWS. SUCH UNITS MAY NOT BE SOLD, ASSIGNED,
PLEDGED OR OTHERWISE TRANSFERRED AT ANY TIME WITHOUT EFFECTIVE REGISTRATION
UNDER SUCH ACT AND LAWS OR AN EXEMPTION THEREFROM.

THE CONVERTIBLE PREFERRED UNITS REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT
TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE AGREEMENT, INCLUDING THE
CONDITION THAT SUCH TRANSFER NOT CAUSE THE COMPANY TO BE TREATED AS A “PUBLICLY
TRADED PARTNERSHIP” WITHIN THE MEANING OF SECTION 7704 OF THE CODE. ANY TRANSFER
IN VIOLATION OF SUCH RESTRICTIONS SHALL BE NULL AND VOID.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

 

TEN COM                    Custodian   –   as tenants in common   
UNIF GIFT MIN ACT –    TEN ENT           (Cust)   –   as tenants by the
entireties       (Minor) JT TEN   –  

as joint tenants with right of

survivorship and not as tenants in common

     

under Uniform Transfers/Gifts to Minors Act             

        (State)

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED,              hereby sell, assign and transfer unto

Please insert Social Security or other identifying number of Assignee

 

 

 

(Please print or typewrite name and address, including zip code, of Assignee)

            units represented by the Certificate, and do hereby irrevocably
constitute and appoint             Attorney to transfer the said units on the
books of the Company with full power of substitution in the premises.

Dated                     .

 

NOTE: The signature to any endorsement hereon must correspond with the name as
written upon the face of this Certificate in every particular, without
alteration, enlargement or change.

 

B-2

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

SIGNATURE(S) MUST BE GUARANTEED BY A MEMBER FIRM OF THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST COMPANY    

 

(Signature)

SIGNATURE(S) GUARANTEED        

 

    (Signature)

No transfer of the Convertible Preferred Units evidenced hereby will be
registered on the books of the Company unless the Certificate evidencing the
Convertible Preferred Units to be transferred is surrendered for registration of
transfer. No transfer of the Convertible Preferred Units evidenced hereby will
be registered on the books of the Company unless the transferee executes and
delivers a Joinder Agreement in the form set forth in Exhibit C to the
Agreement, as such form of Joinder Agreement may be amended from time to time.

 

B-3

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

EXHIBIT C

JOINDER AGREEMENT

The undersigned is executing and delivering this Joinder Agreement pursuant to
Section 6.4(c) of the Amended and Restated Limited Liability Company Agreement,
dated as of May 18, 2016 (as amended, supplemented or restated from time to
time, the “Agreement”) of Charter Communications Holdings, LLC, a Delaware
limited liability company (the “Company”). Capitalized terms used herein but not
otherwise defined herein have the meanings ascribed to them in the Agreement.

By executing and delivering this Joinder Agreement to the Agreement, the
undersigned hereby agrees to be bound by, and to comply with the provisions of
the Agreement in the same manner as if the undersigned were an original
signatory to the Agreement and agrees, pursuant to Section 6.3(c) of the
Agreement, to assume the responsibility of the Transferring Member in respect of
the Units Transferred by such Transferring Member.

[Notwithstanding anything to the contrary herein or in the Agreement, the
undersigned shall not become a Member of the Company unless and until agreed to
in writing by the Manager.] [applicable for non-A/N Parties]

[By executing and delivering this Joinder Agreement to the Agreement, the
undersigned hereby agrees to become a Member of the Company.] [only for A/N
Parties]

This Joinder Agreement is governed by and shall be construed in accordance with
the laws of the State of Delaware, excluding any conflict-of-laws rule or
principle that might refer the governance or the construction of this Agreement
to the law of another jurisdiction.

Accordingly, the undersigned has executed and delivered this Joinder Agreement
as of the      day of             , 2        .

 

 

Signature of Unitholder

 

Print Name of Unitholder

 

C-1

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

EXHIBIT D

FORM OF CONVERSION NOTICE

The undersigned holder(s) of Convertible Preferred Units of Charter
Communications Holdings, LLC, a Delaware limited liability company (the
“Company”, such units, the “Convertible Preferred Units” and the holder(s)
thereof, the “Holder(s)”) hereby tenders for conversion [            ]
Convertible Preferred Units [represented by certificate no(s). [    ] which
[has/have] been enclosed with this Conversion Notice] in accordance with the
terms of Section 3.3(a) of the Amended and Restated Limited Liability Company
Agreement, dated as of May 18, 2016 (as amended, supplemented or restated from
time to time, the “Agreement”) of the Company. The undersigned Holder surrenders
such Convertible Preferred Units as of the Conversion Date set forth below.
Capitalized terms used but not otherwise defined herein shall have the meaning
ascribed to them in the Agreement.

 

Name(s) and Address(es) of Registered Holders1

 

  Total number of Convertible Preferred Units owned prior to the Conversion:

 

  Number of Convertible Preferred Units to be converted:

 

  Conversion Rate:

 

  Conversion Date:

 

  [Class A Common Stock/Class B Common Units]2 to be [issued by][Charter/the
Company]:

 

  Total number of Convertible Preferred Units Owned following the Conversion:

 

 

 

1  [Name must be exactly as it appears in on the books and records of the
Company.]

2  [Where the Holder is A/N or any A/N Party, only Class B Common Units may be
designated. Where the Holder is any Person other than A/N or any A/N Party, only
Class A Common Stock may be selected.]

 

D-1

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

The undersigned Holder(s):

(i) directs that the [shares of Class A Common Stock/ Common Units/other
consideration] deliverable pursuant to this Conversion Notice be delivered in
accordance with the following instructions:

[                                         ]

(ii) represents, warrants, certifies and agrees that: (A) it has, and on the
Conversion Date will have, good, valid and marketable title to the Convertible
Preferred Units to be converted pursuant to this Conversion Notice, free and
clear of all liens, encumbrances, rights of first refusal and similar
restrictions; (B) it has, and on the Conversion Date will have, the full right,
power and authority to tender and surrender such Convertible Preferred Units.

[Remainder of Page Intentionally Left Blank]

 

D-2

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

IN WITNESS WHEREOF, the undersigned Holder has caused this Notice of Conversion
to be executed as of the date first written above.

 

[Holder] as Holder of the Convertible Preferred Units subject to this Notice of
Conversion By:  

 

  Name:   Title:

 

D-3

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EXHIBIT E

STRUCTURE PLAN

[Attached]

 

E-1

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

EXHIBIT F

COMMON TAX DISTRIBUTION AND TAX LOAN CALCULATION EXAMPLE

 

F-1

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

Exhibit

Section 5.4(b) Tax Distributions -
Illustration of Tax Distributions/Tax Loan Mechanics

Assumptions for illustrative purposes only

 

1.
Charter Communications Holdings LLC (“CCH LLC”) is formed on January 1, 20X1 with two members,

Charter Communications Inc. (“Charter”) and Advance/Newhouse Partnership (“A/N”), 
and

CCH LLC issues 9,000 common units to Charter and 1,000 common units to A/N.

 

2. Total U.S. federal taxable income post §704 (c) allocated to Charter is
$2,000MM and A/N is $(200)MM in fiscal year 20X1.

Total U.S. federal taxable income post §704 (c) allocated to Charter is $4,000MM
and A/N is $500MM in fiscal year 20X2.

Total U.S. federal taxable income post §704 (c) allocated to Charter is $6,000MM
and A/N is $800MM in fiscal year 20X3.

All taxable income and loss is ordinary in character.

 

3. Assumed Tax Rate for each fiscal year 20X1, 20X2, and 20X3 is 52%

 

4. Manager elects to waive Common Tax Distributions up to the amount of
Charter’s tax liability.

Assume Charter has §382 limited NOLs of $2,000MM available in fiscal year 20X1
and 20X2, and its effective tax rate is 40%.

Assume Charter has no NOLs available in fiscal year 20X3, and its effective tax
rate is 40%.

Computation of Common Per Unit Tax Distribution Amount (In $MM)

 

Step 1

   Fiscal Year 20x1     Fiscal Year 20x2     Fiscal Year 20x3  
Compute Common Annual Adjusted Taxable Income    Charter     A/N     Charter    
A/N     Charter     A/N  

U.S. federal taxable income allocated to each member

     2,000        (200 )      4,000        500        6,000        800  

Less: Cumulative U.S. federal taxable losses allocated to the member

     0        0        0        (200 )      0        

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common Annual Adjusted Taxable Income (not below zero)

     2,000        —         4,000        300       6,000       800      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  Step 2                                     
Compute Common Cumulative Assumed Tax Liability    Charter     A/N     Charter  
  A/N     Charter     A/N  

Common Annual Adjusted Taxable Income

     2,000        —          4,000        300        6,000        800  

Multiplied by Assumed Tax Rate

     52 %      52 %      52 %      52 %      52 %      52 %    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common Annual Assumed Tax Liability

     1,040        0        2,080        156        3,120        416  

Prior Fiscal Years Assumed Tax Liability

     0        0        1,040        0        3,120        156      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common Cumulative Assumed Tax Liability

     1,040        —          3,120        156       6,240       572      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  Step 3    Fiscal Year 20x1     Fiscal Year 20x2     Fiscal Year 20x3  

Compute Common Excess Cumulative Tax Liability

and Common Per Unit Excess Cumulative Tax Liability

   Charter     A/N     Charter     A/N     Charter     A/N  

Common Cumulative Assumed Tax Liability

     1,040        0        3,120        156        6,240        572  

Minus all prior Common Tax Distributions

     0        0        0        0        (800 )      (89 ) 

Minus all prior Tax Loans made resulting from the waiver

     0        0        0        0        —          (67 )    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common Excess Cumulative Tax Liability (not below zero)

     1,040        —          3,120        156       5,440       416      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Divided by the number of Common Units Held by each member

     9,000        1,000       9,000        1,000        9,000        1,000   

Common Per Unit Excess Cumulative Tax Liability

     0.1156        0.0000        0.3467        0.1560        0.6044       
0.4160      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

F-2

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

Step 4

  Fiscal Year 20x1     Fiscal Year 20x2     Fiscal Year 20x3   Compute Common
per Unit Tax Distribution Amount and Common Tax Distributions before the waiver
  Charter     A/N     Charter     A/N     Charter     A/N  

Common Per Unit Tax Distribution Amount

    0.1156        0.1156        0.3467        0.3467        0.6044        0.6044
  

(Highest Common Per Unit Excess Cumulative Tax Liability of any member)

           

Multiply by the number of Common Units held by each member

    9,000       1,000       9,000       1,000       9,000       1,000    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common Tax Distribution before the waiver

    1,040        116       3,120        347       5,440       604     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Step 5

                                    Compute the amount of waiver   Charter      
    Charter           Charter        

Charter Taxable Income

    2,000         4,000         6,000    

Net Operating Loss Utilization

    (2,000 )        (2,000 )        0       

 

 

     

 

 

     

 

 

   

Charter Taxable Income after NOL

    —           2,000         6,000    

Multiply by Charter Tax Rate

    40 %        40 %        40 %     

 

 

     

 

 

     

 

 

   

Charter’s Tax Liability

    0          800          2,400    

Charter’s Annual Common Tax Distribution - Before Waiver

    1,040          3,120          5,440     

Less: Charter’s Tax Liability

    0          (800 )        (2,400 )     

 

 

     

 

 

     

 

 

   

Waiver (Amount Decreased)

    1,040          2,320          3,040     

Divided by the number of Common Units held by Charter

    9,000          9,000          9,000     

Charter’s Common Per Unit Waiver (Amount Decreased)

    0.1156          0.2578          0.3378     

Step 6

                                   
Compute Common Tax Distribution Amount After Waiver   Charter     A/N    
Charter     A/N     Charter     A/N  

Charter’s Common Per Unit Waiver (Before Waiver)

    0.1156          0.3467          0.6044     

Less Charter’s Common Per Unit Waiver (Amount Decreased)

    (0.1156 )        (0.2578 )        (0.3378 )     

 

 

     

 

 

     

 

 

   

Common Per Unit Tax Distribution Amount After Waiver

    0.0000        0.0000        0.0889        0.0889        0.2667        0.2667
  

Multiplied by the number of Common Units

    9,000        1000        9,000        1000        9,000        1000     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common Tax Distribution Amount After Waiver

    —          —          800        89        2,400       267     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Step 7

                                    Compute Tax Loan to A/N         A/N        
  A/N           A/N  

A/N’s Common Tax Distribution Before Waiver

      116         347          604  

Less: A/N’s Annual Common Distribution After Waiver

      —            (89 )        (267 )     

 

 

     

 

 

     

 

 

 

(1) A/N’s Decrease in Tax Distribution

      116         258         337   

A/N’s Common Excess Cumulative Tax Liability Before Waiver

      —            156          416  

Less: A/N’s Annual Common Distribution After Waiver

      —            (89 )        (267 )     

 

 

     

 

 

     

 

 

 

(2) A/N’s Common Excess Cumulative Tax Liability After Common Distribution

      —            67          149   

Tax Loan to A/N - Lesser of (1) or (2)

      —            67          149   

 

F-3

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

EXHIBIT G

TRANSFEREE TAX REPRESENTATIONS

Either:

 

  a. Such transferee (i) is not a flow-through entity within the meaning of
Regulations Section 1.7704-1(h)(3), and (ii) is and will at all times continue
to be, the sole beneficial owner of the interest to be registered in its name
(which shall be interpreted to mean that the transferee is not and will not be
treated as a nominee for, or agent of, another party or as anything other than
the real owner of such interest for federal income tax purposes, at any time);
or

 

  b. (i) Such transferee is a flow-through entity within the meaning of
Regulations Section 1.7704-1(h)(3) and (ii) there is no person (a “Beneficial
Owner”) that owns an interest in such transferee such that (x) substantially all
of the value of the Beneficial Owner’s interest in such transferee will be
attributable to such transferee’s interest (direct or indirect) in the Company;
and (y) a principal purpose of the use of the tiered arrangement is to permit
the Company to satisfy the 100-partner limitation in Regulations
Section 1.7704-1(h)(1)(ii);

Such transferee did not purchase, and will not sell, its interest through (a) a
national, foreign, regional, local or other Securities exchange, (b) PORTAL or
(c) over the counter market (including an interdealer quotation system that
regularly disseminates firm buy or sell quotations by identified brokers or
dealers by electronic means or otherwise);

Such transferee did not purchase, and will not sell, its interest from, to or
through (a) a person, such as a broker or dealer, that makes a market in, or
regularly quotes prices for, such interests or (b) a person that regularly makes
available to the public (including customers or subscribers) bid or offer quotes
with respect to the Interest and stands ready to effect, buy or sell
transactions at the quoted prices for itself or on behalf of others; and

Such transferee will only sell its interest to a buyer who provides the
representations similar to these.

The representations set forth above are intended to ensure that the Company will
not be treated as a corporation for federal income tax purposes as a result of
any transfer. The Manager may waive any or all of the representations set forth
above on the advice of counsel that the transfer of an interest to such
transferee will not cause the Company to be treated as a corporation for federal
income tax purposes, and shall endeavor in good faith to do so if so advised by
counsel to the Company upon request for waiver by a Member proposing to
transfer, or upon receipt of an opinion from legal counsel to the transferee
(provided such legal counsel is of national reputation and specializes in the
legal matters involved in such determination) that such transfer will not cause
the Company to be treated as a publicly traded partnership within the meaning of
Section 7704 of the Code. These representations may from time to time be revised
by the Manager on the advice of counsel to the extent necessary to ensure that a
transfer will not cause the Company to be treated as a corporation for federal
income tax purposes.

 

G-1

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

EXHIBIT H

MAKE-WHOLE TABLE

 

    Change of Control Class A Common Stock Price  

Effective Date

  $ 191.33      $ 225.00      $ 241.07      $ 267.85      $ 275.00      $ 313.39
     $ 348.21      $ 400.00      $ 450.00      $ 500.00      $ 600.00      $
700.00      $ 800.00      $ 900.00      $ 1,000.00   

May 18, 2016

    0.14933        0.14933        0.14235        0.12045        0.11556       
0.09438        0.08058        0.06598        0.05612        0.04884       
0.03878        0.03211        0.02732        0.02367        0.02079   

June 30, 2017

    0.14933        0.14492        0.12829        0.10650        0.10168       
0.08112        0.06808        0.05473        0.04604        0.03981       
0.03146        0.02604        0.02218        0.01924        0.01692   

June 30, 2018

    0.14933        0.13296        0.11588        0.09371        0.08885       
0.06847        0.05598        0.04376        0.03622        0.03105       
0.02441        0.02022        0.01725        0.01499        0.01320   

June 30, 2019

    0.14933        0.12187        0.10385        0.08053        0.07548       
0.05465        0.04251        0.03149        0.02533        0.02144       
0.01679        0.01395        0.01194        0.01040        0.00917   

June 30, 2020

    0.14933        0.11339        0.09365        0.06766        0.06200       
0.03913        0.02678        0.01724        0.01305        0.01091       
0.00864        0.00724        0.00622        0.00542        0.00479   

June 30, 2021 and thereafter

    0.14933        0.11031        0.08952        0.06031        0.05344       
0.02188        —          —          —          —          —          —         
—          —          —     

 

H-1

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

EXHIBIT I

PREFERRED UNIT VALUATION ASSUMPTIONS

 

•   A Black Scholes-based convertible model was used to project the value of the
Convertible Preferred Units at future CHTR share prices and points in time based
on the terms and conditions of the Convertible Preferred Units and certain
current market-based assumptions listed below.

 

•   The projected value of the Convertible Preferred Units was used to determine
the make whole table that is set forth on Exhibit H.

 

•   Market-based assumptions as of the date hereof to be updated in accordance
with Section 6.5(c)(1):

 

  •   30-year reference LIBOR: 2.11%

 

  •   Credit spread: 610 bps

 

  •   Volatility: 23%

 

  •   Borrow Cost: 25bps per annum

 

I-1