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                                                                    Exhbit 10.40

                             FIRST AMENDMENT TO THE
                            PARTNERSHIP AGREEMENT OF
             TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP

      FIRST AMENDMENT TO THE PARTNERSHIP AGREEMENT OF TIME WARNER
ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP, dated as of February 12, 1998 (this
"Amendment") among Time Warner Entertainment Company, L.P., a Delaware limited
partnership ("TWE"), Advance/Newhouse Partnership, a New York general
partnership ("Advance/Newhouse"), and Paragon Communications, a Colorado general
partnership ("Paragon").

      WHEREAS, Time Warner Entertainment-Advance/Newhouse Partnership, a New
York general partnership (the "Partnership"), was formed between TWE and
Advance/Newhouse pursuant to a Partnership Agreement dated as of September 9,
1994, as amended (the "Partnership Agreement");

      WHEREAS, pursuant to an Agreement, dated as of October 27, 1997 among
Advance Publications, Inc., Newhouse Broadcasting Corporation, Advance/Newhouse,
TWE, TW Holding Co. and the Partnership (the "Transaction Agreement"), each of
TWE and TW Holding Co. has agreed to contribute to the Partnership certain
assets and Advance/Newhouse has agreed to contribute to the Partnership
additional cash;

      WHEREAS, in accordance with Section 11(d) of the Transaction Agreement,
pursuant to a notice dated February 11, 1998 from TWE to Advance/Newhouse, TWE
has elected to substitute Paragon for TW Holding Co. and, thus, Paragon has
become obligated to make such contributions or beneficial assignments to the
Partnership;

      WHEREAS, pursuant to Section 15.4 of the Partnership Agreement, the
Partnership Agreement may be amended by an instrument in writing signed by TWE
and Advance/Newhouse; and

      WHEREAS, the parties hereto desire to enter into this Amendment to reflect
the admission of Paragon to the Partnership as a Partner and certain other
amendments in connection with the transactions contemplated by the Transaction
Agreement.

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
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                                       I.

                             AMENDMENTS TO SECTION 1

      (1) The following definitions shall be added to the Partnership
Agreement:

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

            "Advance/Newhouse Contribution Amount" has the meaning ascribed
      thereto in Section 6 of the Transaction Agreement.

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

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

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

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            "Debt Shift Tax Amount" means, with respect to a restructuring
      pursuant to Section 8.2, the sum of :

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

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

            "Determined Percentage" means either (a) 39% if TWE delivers a
      Restructuring Notice at any time or Advance/Newhouse delivers a
      Restructuring Notice after July 1, 2000, unless the Winston-Salem, North
      Carolina cable system owned, as of the date of the Transaction Agreement,
      by Summit Communications Group Inc. is included among the assets to be
      allocated to one of the Asset Pools, such system having been transferred
      to the Partnership at a mutually agreeable price or such transfer at such
      price being probable during the time frame set forth in Section 8, or (b)
      35% (in all other instances).

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

            "Effective Date" has the meaning ascribed thereto in Section 6 of
      the Transaction Agreement.


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

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

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

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

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

            "Negative Put Deferred Tax Amount" means, with respect to a sale of
      Advance/Newhouse Common Partnership Units pursuant to Section 9, the
      product of (x) the Advance/Newhouse Percentage Interest at the time of
      such 


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      sale and (y) the sum of the amounts determined as follows with respect to
      each of TWE and Paragon with respect to the assets of the Partnership at
      the time of the Advance/Newhouse Common Put Closing that were contributed
      by TWE and Paragon, respectively:

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

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

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

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


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

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

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

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

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

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

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


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

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

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

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

            "Priority Return" means, with respect to each outstanding Paragon
      Preferred Partnership Unit, a sum equal to 10 1/4 percent for the actual
      number of days in the period for which the Priority Return is being
      calculated, cumula-


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      tive and compounded annually, on the amount of $1,000 plus any accrued and
      unpaid Priority Return with respect to such Paragon Preferred Partnership
      Unit, commencing on the Effective Date.

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

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

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

                  (1) if there is an Excess Debt Shift Tax Amount, the excess
            of:

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

                        (b) such Excess Debt Shift Tax Amount; or


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                  (2) if there is not an Excess Debt Shift Tax Amount, the sum
            of:

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

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

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


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<PAGE>   10

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

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

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

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


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<PAGE>   11

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

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

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

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

            "Special Tax Amount" means, for any year, with respect to any
      Partner, the amount obtained by multiplying (a) the Special Effective Tax
      Rate for such year, by (b) the excess, if any, of (i) the sum of (x) the
      sum of the Net Profit and Gross Profit allocated to such Partner pursuant
      to Sections 5.3(b)(iii) and 5.3(d)(ii) for such year, (y) the Special
      Income, if any, allocated to such Partner for such year, and (z) to the
      extent that the Common Tax Amount of such Partner for such year is reduced
      by any Net Loss or Gross Loss allocated to such Partner for any prior year
      which was used to reduce such Partner's Special Tax Amount for any prior
      year, an amount (expressed as a positive number) equal to the sum of such
      Net Loss and Gross Loss, over (ii) the sum of (x) the Gross Loss allocated
      to such Partner pursuant to Section 5.3(d)(ii) for the current year, and
      (y) the Net Loss or Gross Loss allocated to such Partner for the current
      or prior year (other than pursuant to Section 5.3(c)(ii) and 5.3(d)(ii))
      but only to the extent that the amounts set 


                                     - 11 -
<PAGE>   12

      forth in this clause (y) were not used in reducing the Common Tax Amount
      for the current year or the Special Tax Amount for any prior year.

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

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

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

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

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

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

                  (ii) the present value, using the Discount Rate, of an amount
      for each of the Remaining Years equal to the product of (a) the Special
      Effective Tax Rate for the year in which such restructuring occurs, and
      (b) the product of 


                                     - 12 -
<PAGE>   13

      (I) (y) the amount determined under clause (i)(b) above divided by (z) the
      number of Remaining Years, and (II) the Tax Adjustment Percentage for such
      year of restructuring.

      (2) The following defined terms shall be deleted in their entirety and the
following substituted therefor:

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

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

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

            (B) decreased by (i) the amount of cash distributed to such Partner
      by the Partnership after the Effective Date; (ii) allocations to the
      Partner after the Effective Date of Preferred Loss, Gross Loss and Net
      Loss pursuant to Section 5; (iii) the fair market value without regard to
      Code 


                                     - 13 -
<PAGE>   14

      Section 7701(g) of property distributed to such Partner by the Partnership
      after the Effective Date (net of liabilities secured by such distributed
      property or that such Partner is considered to assume or take subject to
      under Code Section 752) (taking into account any deemed distributions of
      Subsidiary Beneficial Assets and other Beneficial Assets); (iv) the amount
      of such Partner's individual liabilities that are assumed by the
      Partnership after the Effective Date pursuant to Treasury Regulations
      Section 1.704-1(b)(2)(iv)(c); and (v) other deductions made in accordance
      with the Code and the provisions of Treasury Regulations Section
      1.704-1(b)(2)(iv).

      Notwithstanding the foregoing, for purposes of determining Capital
      Accounts, (x) all of the adjustments, contributions or distributions
      required pursuant to the Contribution Agreement to be made subsequent to
      the Initial Closing Date and the contribution of TWE pursuant to Section
      4.1(c)(ii) hereof shall be treated as if they had been made on the Initial
      Closing Date, (y) the Paragon Adjustment Amount and the TWE Adjustment
      Amount (as such terms are defined in Section 11 of the Transaction
      Agreement) shall be treated as if they had been made on the Effective
      Date, and (z) such adjustments, contributions, distributions, and
      Adjustment Amounts shall not give rise to any adjustments to Capital
      Account balances or redetermination of amounts contributed by or
      distributed to any Partner.

            "Capital Contribution" means either a Common Capital Contribution, a
      Preferred Capital Contribution or a Paragon Preferred Capital
      Contribution.

            "Common Capital Contribution" means, (i) with respect to TWE and
      Advance/Newhouse, the amount of cash contributed by such Partner to the
      Partnership pursuant to this Agreement (other than cash deemed contributed
      in exchange for Preferred Partnership Units pursuant to Section 4.1(e))
      plus the fair market value without regard to Code Section 7701(g) of
      property contributed by such Partner to the Partnership pursuant to this
      Agreement (net of liabilities that are secured by such contributed
      property or that either Partner is considered to assume under Code Section
      752); and (ii) with respect to Paragon, the excess of (A) the amount of
      cash contributed by such Partner to the Partnership pursuant to this
      Agreement (other than cash deemed contributed in exchange for Preferred
      Partnership Units pursuant to Section 4.1(e)) plus the fair market value
      without regard to Code Section 7701(g) of property contributed by such
      Partner to the Partnership pursuant to 


                                     - 14 -
<PAGE>   15

      this Agreement (net of liabilities that are secured by such contributed
      property or that either Partner is considered to assume under Code Section
      752), over (B) the Paragon Preferred Capital Contribution; and (iii) with
      respect to all Partners treating any Subsidiary Beneficial Assets and
      other Beneficial Assets as if they had been contributed on the Initial
      Closing Date or the Effective Date, as applicable, and disregarding any
      subsequent actual contribution of such Subsidiary Beneficial Assets or
      other Beneficial Assets and any cash flow related thereto).

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

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

            "Partnership Unit" means either a "Common Partnership Unit," a
      "Preferred Partnership Unit," or a "Paragon Preferred Partnership Unit,"
      as defined in this Agreement.

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

                                       II.

                              ADMISSION OF PARAGON

      Upon the execution of this Amendment by the parties hereto, Paragon shall
become a Partner of the Partnership and shall become a party to, and be bound by
the applicable terms and provisions of, the Partnership Agreement, as amended
hereby, as if it were an original party thereto, and each of Advance/Newhouse
and TWE shall be deemed to have consented (in accordance with Section 3.2(d) of
the Partnership Agreement) to the admission of Paragon as a Partner upon the
terms and conditions set forth herein.


                                     - 15 -
<PAGE>   16

                                      III.

                             AMENDMENT TO SECTION 3

      Section 3.1(c) shall be deleted in its entirety and the following
substituted therefor:

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


                                     - 16 -
<PAGE>   17

                                       IV.

                         AMENDMENTS TO SECTIONS 4 AND 5

      Sections 4 and 5 of the Partnership Agreement shall be deleted in their
entirety and new Sections 4 and 5 in the form attached hereto as Exhibit A shall
be substituted therefor.

                                       V.

                             AMENDMENT TO SECTION 6

      Section 6.1(a)(iii)(A) shall be deleted in its entirety and the following
substituted therefor:

      (A) a transfer of all of a Partner's Partnership Interest (1) to a
      Newhouse Family Member, or to an Affiliate of Advance/Newhouse so long as
      at least 80% of the equity of such Affiliate is owned directly or
      indirectly by one or more Newhouse Family Members, in the case of
      Advance/Newhouse, (2) to a Wholly-Owned Affiliate of TWE, in the case of
      TWE, or (3) to TWE, TWX or a Wholly-Owned Affiliate of TWE or TWX, in the
      case of Paragon

                                       VI.

                             AMENDMENT TO SECTION 8

      Section 8.2 shall be deleted in its entirety and the following substituted
therefor:

      1.2 Restructuring of Partnership.

            (1) Upon delivery of a Restructuring Notice in accordance with
Section 8.1 above, Advance/Newhouse and TWE shall negotiate in good faith the
restructuring of the Partnership in a manner intended to minimize federal, state
and local taxes. Within 60 days after delivery of a Restructuring Notice, upon
the request of any Partner, the Managing Partner shall provide all Partners with
a report listing all assets of the Partnership, including all projects in
development and/or for which the Partnership has been charged.

            (2) If, after a period of three months from the date of delivery of
the Restructuring Notice, Advance/Newhouse and TWE have failed to agree on the
terms of the restructuring of the 


                                     - 17 -
<PAGE>   18

Partnership, the Partnership shall be restructured by the withdrawal of
Advance/Newhouse from the Partnership as follows:

                  (1) Within 15 days following the expiration of such
three-month period, (A) if at such time Advance/Newhouse holds Preferred
Partnership Units the Partnership shall distribute the Preferred Investment Pool
attributable to such Preferred Partnership Units in redemption of all Preferred
Partnership Units then held by Advance/Newhouse, (B) the Partnership shall
calculate the "Restructuring Indebtedness Amount" (as defined in Section
8.2(b)(v) and the "Excess Tax Amount" (as defined in Section 8.2(b)(vi)) of
Advance/Newhouse, if any, (C) subject to obtaining any required governmental or
other third-party consents or approvals, the Partnership shall distribute 33_%
of the Pro Rata Assets (as defined below) to Advance/Newhouse, and (D) TWE shall
(1) divide the remaining assets (and related liabilities) of the Partnership
into three pools (the "Asset Pools") which shall meet the Asset Pool Criteria
(as defined below) but which shall in any event be of equal value (in TWE's
judgment), and (2) deliver a written notice to Advance/Newhouse setting forth
the cable television systems and other assets contained in each such Asset Pool
(the "Asset Pool Notice"). To the extent physically possible without impairing
their inherent operability, assets of the Partnership which relate to more than
one cable television system or to the Partnership as a whole shall be allocated
either equally to every pool or on a 2/3:1/3 basis to the Partnership and
Advance/Newhouse, respectively. Prior to making any distribution under this
Section 8.2(b) or delivering the Asset Pool Notice, the Partnership or TWE, as
applicable, shall contribute the assets comprising all developmental projects in
which the Partnership has an interest and/or for which the Partnership has been
charged (subject to the associated liabilities) to a separate legal entity or
otherwise reconstitute such assets (subject to the associated liabilities) in a
form (on terms agreed upon by Advance/Newhouse, TWE, and Paragon) that allows an
allocation of such assets (subject to the associated liabilities) to
Advance/Newhouse and the Partnership as described in the previous sentence. For
the purposes of the foregoing, "Pro Rata Assets" shall mean those assets of the
Partnership, including without limitation those Beneficial Assets and Subsidiary
Beneficial Assets, that are readily divisible into three identical pools without
any material diminution in the aggregate value of such assets resulting from
such division (such as stock, partnership interests and similar investments).
For purposes of the foregoing, "Asset Pool Criteria" shall mean (I) no Preferred
Cluster Area may be allocated to more than one Asset Pool, except in accordance
with the following: (A) if the number of Subscribers in the Preferred Cluster
Area having the largest 


                                     - 18 -
<PAGE>   19

number of Subscribers exceeds the product of the Determined Percentage and the
number of all Subscribers in all Preferred Cluster Areas, then such excess may
be allocated to more than one Asset Pool; and (B) if the Preferred Cluster Area
having the largest number of Subscribers has been allocated to more than one
Asset Pool, and if the number of Subscribers in the Preferred Cluster Area
having the second largest number of Subscribers exceeds 33_% of all Subscribers
of all the Partnership Systems, then such excess may be allocated to more than
one Asset Pool, and (II) (A) Subscribers in the same ADI in a Preferred Cluster
Area may not be allocated to more than one pool, except to the extent that any
one ADI in a Preferred Cluster Area is permitted to be split under clause (I)
above, and (B) to the extent any ADI's are split they shall be split only along
the lines of operable units.

                  (2) Within 30 days following the delivery by TWE of the Asset
Pool Notice, Advance/Newhouse shall select and retain ownership of one of the
Asset Pools and the Partnership shall retain ownership of the remaining Asset
Pools; provided that if Advance/Newhouse fails to make such selection within
such 30-day period, then the Partnership shall be entitled to select and retain
ownership of two of the Asset Pools and Advance/Newhouse shall retain ownership
of the remaining Asset Pool. The Asset Pools allocated to Advance/Newhouse and
the Partnership in accordance with this paragraph (ii) are referred to herein as
the "Advance/Newhouse Asset Pool" and the "TWE Asset Pools," respectively.

                  (3) As promptly as practical following the determination of
the Advance/Newhouse Asset Pool and the TWE Asset Pools in accordance with
paragraph (ii), subject to obtaining any required governmental or other
third-party consents or approvals, the Partnership shall distribute the cable
television systems and other assets comprising the Advance/Newhouse Asset Pool
to Advance/Newhouse in complete liquidation of its Common Partnership Units;
provided that with respect to any assets in the Advance/Newhouse Pool that for
Federal income tax purposes were deemed contributed to the Partnership within
the immediately preceding Applicable Contribution Period by TWE or Paragon and
with respect to any assets in the TWE Asset Pools that for Federal income tax
purposes were deemed contributed to the Partnership within the immediately
preceding Applicable Contribution Period by Advance/Newhouse, the Partners shall
cooperate to cause such liquidation of the Advance/Newhouse Common Partnership
Units to be effectuated in a manner, and agree to defer the distribution of
assets to such time, as will minimize the taxes payable in connection with such
liquidation.  


                                     - 19 -
<PAGE>   20

                  (4) As the cable television systems and other assets
comprising the Advance/Newhouse Asset Pool are distributed or deemed distributed
for Federal income tax purposes, (A) if there is an Excess Tax Amount with
respect to Advance/Newhouse, the Partnership shall be allocated liabilities
otherwise allocable to the Advance/Newhouse Pool (the "Excess Tax Amount
Indebtedness") equal to the product of (y) one (1) minus the Advance/Newhouse
Percentage Interest, and (z) such Excess Tax Amount of Advance/Newhouse, (B)
Advance/Newhouse shall execute an assumption agreement pursuant to which it will
assume (or to the extent necessary, in the case of clause (II) below, will
refinance or repay) (I) all liabilities relating to, arising out of or otherwise
attributable to the Advance/Newhouse Asset Pool (as reduced by the Excess Tax
Amount Indebtedness, if any), and (II) liabilities otherwise allocable to the
TWE Asset Pools (the "Restructuring Indebtedness") in an amount equal to the
Restructuring Indebtedness Amount and will further agree to indemnify the
Partnership for any losses the Partnership might suffer with respect to any of
such liabilities, and (C) the Partnership shall agree to indemnify
Advance/Newhouse for any losses Advance/Newhouse might suffer with respect to
any liabilities relating to, arising out of or otherwise attributable to the TWE
Asset Pools or the Excess Tax Amount Indebtedness. The assumption agreement to
be executed by Advance/Newhouse shall contain the terms contained in the
Assumption Agreement executed by the Partnership in accordance with Section
3.4(a) of the Contribution Agreement and the indemnity of Advance/Newhouse and
the Partnership shall be in the form of Sections 8.2 and 8.3 of the Contribution
Agreement. As Advance/Newhouse assumes liabilities relating to, arising out of
or otherwise attributable to the Advance/Newhouse Asset Pool, Paragon shall
guarantee remaining liabilities of the Partnership and take other steps
reasonably necessary so as to reduce, to the greatest extent possible, the Debt
Shift Tax Amount arising from the restructuring; provided however, that Paragon
shall not be required to guarantee remaining liabilities of the Partnership to
the extent such guarantee would cause TWE to recognize income pursuant to Code
Sections 731 and 752. To the extent possible, liabilities assumed by
Advance/Newhouse shall be qualified liabilities (as defined in Treasury
Regulation Section 1.707-6(b)(2)) of the Partnership.

                  (5) The "Restructuring Indebtedness Amount" shall equal the
product of (A) the Advance/Newhouse Percentage Interest, and (B) the sum of (i)
the Priority Return accrued and unpaid as of the date of distribution, (ii) the
redemption price for all outstanding Paragon Preferred Partnership Units, and


                                     - 20 -
<PAGE>   21

(iii) the sum of the Excess Tax Amount for the Partners other than
Advance/Newhouse and other than the Satisfied Partner.

                  (6) The "Excess Tax Amount" means, for each of two Partners,
the Tax Amount that would be remaining for such Partners if the Partnership were
to distribute the aggregate Tax Amounts of all Partners to the Partners in
accordance with their Percentage Interests until one Partner (the "Satisfied
Partner") shall have received its entire Tax Amount.

                  (7) The "Tax Amount" means, for any Partner, the sum of the
following amounts determined for such Partner, as applicable:

                        (1) If the restructuring has occurred as a result of the
delivery by Advance/Newhouse of a Restructuring Notice that is not a Spin-Off
Restructuring Notice:

                              (1) with respect to Paragon, the Paragon
704(c)(1)(B) Tax Amount with respect to assets deemed for Federal income tax
purposes contributed to the Partnership within the immediately preceding
Applicable Contribution Period by Paragon that are allocated to the
Advance/Newhouse Asset Pool,

                              (2) with respect to TWE, if the distribution of
the Advance/Newhouse Asset Pool occurs after April 1, 2000, the TWE 704(c)(1)(B)
Tax Amount with respect to assets deemed for Federal income tax purposes
contributed to the Partnership by TWE pursuant to the Transaction Agreement
within the immediately preceding Applicable Contribution Period that are
allocated to the Advance/Newhouse Asset Pool,

                              (3) with respect to each Partner, the
Restructuring Deferred Tax Amount with respect to assets contributed by such
Partner (other than, in the case of TWE and Paragon, the assets referred to in
clauses (I) and (II)), and

                              (4) with respect to Paragon, the Debt Shift Tax
Amount.

                        (2) If the restructuring has occurred as a result of the
delivery by TWE of the Restructuring Notice or the delivery by Advance/Newhouse
of a Restructuring Notice that is a Spin-Off Restructuring Notice:

                              (1) with respect to Paragon, the Paragon
704(c)(1)(B) Tax Amount with respect to assets deemed for Federal income tax
purposes contributed to the Partnership within 


                                     - 21 -
<PAGE>   22

the immediately preceding Applicable Contribution Period by Paragon that are
allocated to the Advance/Newhouse Asset Pool,

                              (2) with respect to each Partner, the
Restructuring Deferred Tax Amount with respect to assets contributed by such
Partner (other than, in the case of Paragon, the assets referred to in clause
(I) above), and

                              (3) with respect to Paragon, the Debt Shift Tax
Amount.

            (3) During the period from the date of delivery of a Restructuring
Notice in accordance with Section 8.1 to the date of determination of the
Advance/Newhouse Asset Pool and TWE Asset Pools in accordance with Section
8.2(b)(ii), the Partnership shall conduct its business in the ordinary course,
consistent with past practice, and shall not engage in any extraordinary
transactions that were not contemplated by a previously approved Long Term
Strategic Plan or approved by the Executive Committee with the consent of
Advance/Newhouse's representatives. Following the determination of the
Advance/Newhouse Asset Pool and the TWE Asset Pools in accordance with Section
8.2(b)(ii), to the extent permitted by law, (i) the assets comprising such Asset
Pools shall for all purposes be deemed to be owned by Advance/Newhouse and the
Partnership, respectively, (ii) the Restructuring Indebtedness shall for all
purposes be deemed to be an obligation of Advance/Newhouse and Advance Newhouse
shall have no obligation with respect to the Excess Tax Amount Indebtedness
which shall for all purposes be deemed to be an obligation of TWE and Paragon as
Partners of the Partnership following the restructuring of the Partnership
hereunder, and (iii) until the Advance/Newhouse Asset Pool is actually
distributed to Advance/Newhouse, (1) Advance/Newhouse's Partnership Interest
shall entitle it only to (A) a distributive share of the income, gain, losses
and deductions related to the Advance/Newhouse Asset Pool, (B) a distributive
share of the assets comprising the Advance/Newhouse Asset Pool (subject to the
related liabilities and the Restructuring Indebtedness) and (C) management
rights relating to the business and affairs of the Advance/Newhouse Asset Pool,
and (2) TWE's and Paragon's Partnership Interest shall entitle them only to (A)
a distributive share of the income, gain, losses and deductions related to the
TWE Asset Pools, (B) a distributive share of the assets comprising the TWE Asset
Pools (subject to the related liabilities and the Excess Tax Amount
Indebtedness) and (C) management rights relating to the business and affairs of
the TWE Asset Pools.

                                      VII.


                                     - 22 -
<PAGE>   23

                             AMENDMENT TO SECTION 9

      (1) The last sentence of Section 9(d) shall be deleted in its entirety and
the following substituted therefor:

      "Partnership Value" shall mean the fair market value, as of the date of
      valuation, of the business of the Partnership (including the Beneficial
      Assets and the Subsidiary Beneficial Assets) as a going concern taking
      into account whether Advance/Newhouse has elected to receive Tax Deferred
      Consideration or Taxable Consideration in satisfaction of the
      Advance/Newhouse Common Put Price, reduced by the sum of the Priority
      Return accrued and unpaid as of the anticipated Advance/Newhouse Common
      Put Closing (as defined below) and the redemption price for all Paragon
      Preferred Partnership Units outstanding as of the anticipated
      Advance/Newhouse Common Put Closing, and assuming that the Preferred
      Investment Pool shall have been distributed by the Partnership to the
      holder of any outstanding Preferred Partnership Units immediately prior to
      such valuation.

      (2) The penultimate sentence of Section 9(g)(ii) shall be deleted in its
entirety and the following substituted therefor:

      At the Advance/Newhouse Common Put Closing, TWE shall pay to
      Advance/Newhouse the Advance/Newhouse Common Put Price, reduced by the
      Negative Put Deferred Tax Amount and increased by the Positive Put
      Deferred Tax Amount, and Advance/Newhouse shall, pursuant to such
      instruments as may be reasonably requested by TWE, deliver to TWE all of
      its Common Partnership Units in appropriate form for transfer, free and
      clear of any lien or other encumbrance.

                                      VIII.

                             AMENDMENT TO SECTION 11

      (1) Section 11.5 shall be amended by adding the following language to the
end thereof:

      For purposes of the foregoing, "senior management" shall mean the
      following officers of the TWE Cable Division (or persons having comparable
      responsibilities): the Chairman and Chief Executive Officer (currently,
      Joseph J. Collins), the President and Chief Operating Officer (currently,
      James H. Doolittle), the President and Chief Executive Officer of Time
      Warner Cable Ventures (currently, Glenn A. Britt), the President and Chief
      Executive Officer of Time Warner Cable 


                                     - 23 -
<PAGE>   24

      Programming (currently, E. Thayer Bigelow Jr.), the Chief Financial
      Officer (currently, Tommy J. Harris), the Executive Vice Presidents
      responsible for cable television systems owned by the Partnership
      (currently, James P. Cottingham, Theodore J. Cutler and Thomas M.
      Rutledge), the Senior Vice Presidents whose responsibilities significantly
      relate to the operations of the Partnership (currently, David E. O'Hayre,
      James Chiddix, Kevin Leddy, Lynn Yaeger, Carl Rossetti and Fred Dressler)
      and the Presidents of the operating divisions of the Time Warner Cable
      Division (currently, Steve McPhie, President of Time Warner
      Communications, President of Time Warner Satellite Services (position now
      vacant) and Jeff Schwall, President of Time Warner Cable Ventures
      International). Further, the term "reports" shall include any
      correspondence to or from such senior management individuals which relate
      to the operations of the Partnership, except it shall not include
      preliminary drafts or material prepared in connection with or in
      preparation for adversarial proceedings between TWE and Advance/Newhouse.

      (2) Section 11 shall be amended by adding the following as Section 11.8:

            11.8 Tax Allocations. No later than 45 days prior to the filing of
      the Partnership's federal information return and Schedules K-1 thereto,
      the Managing Partner shall deliver a draft of such return to the
      Advance/Newhouse Accountants, together with such workpapers as are
      necessary for the Advance/Newhouse Accountants to review the proposed
      determinations of Special Income, Maximum Income Amount, and Net Tax
      Amount of each of the Partners, together with the allocations required by
      Sections 5.3(b)(iii) and 5.3(d)(ii). The Advance/Newhouse Accountants
      shall promptly review such proposed determinations and allocations and
      shall deliver, within 30 days after receipt of the draft return and
      necessary workpapers, a report ("Adjustment Report") setting forth in
      reasonable detail the determinations and allocations with which such
      Accountants disagree. Thereafter, the Managing Partner and the
      Advance/Newhouse Accountants shall endeavor in good faith to agree to such
      determinations and allocations prior to the filing of the Partnership's
      information returns. If any dispute cannot be resolved by the Managing
      Partner and the Advance/Newhouse Accountants within 10 days after the
      delivery of the Adjustment Report, the disputed matters shall be referred
      to a mutually satisfactory independent public accounting firm of national
      stature which has not been employed by any Partner for the two year
      preceding the date of such 


                                     - 24 -
<PAGE>   25

      referral, such firm to be selected by the TWE Accountants and the
      Advance/Newhouse Accountants. In settling any disputed matter (other than
      a disputed matter arising in connection with a restructuring pursuant to
      Section 8.2 or a put of the Advance/Newhouse interest pursuant to Section
      9), such independent public accounting firm shall apply the understanding
      of the Partners that on an annual basis the after-tax positions of the
      Partners with respect to the contributed assets are to be in proportion to
      their respective Percentage Interests (assuming all Partners are taxable
      at the Special Effective Tax Rate). The fees of such firm shall be paid by
      the Partners in accordance with their Percentage Interests.

                                       IX.

                              TECHNICAL AMENDMENTS

      (1) Clause (ii) of the definition of "Affiliate" shall be deleted in its
entirety and the following substituted therefor:

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

      (2) The definition of the terms "Gross Asset Value," "Partnership
Interest," and "Preferred Capital Contribution" and Sections 2.1, 3.2, 12.1(d),
12.3(b), 13.4, 15.7 and 15.13 shall be amended by deleting the words "either
Partner" from each place in which such words appear therein and inserting in
lieu thereof the words "any Partner".

      (3) Section 2.1 shall be amended by deleting the word "between" from the
second sentence thereof and inserting in lieu thereof the word "among".

      (4) Sections 2.2(a), 2.4(a)(i) and 2.10(c) shall be amended by inserting
the words "Paragon," immediately prior to the words "Advance/Newhouse and TWE"
in each place in which such words appear therein.

      (5) Sections 3.1(g) and 11.6 shall be amended by deleting the words "both
Partners" from each place in which such words appear therein and inserting in
lieu thereof the words "all Partners".


                                     - 25 -
<PAGE>   26

      (6) Sections 2.9, 3.1(h)(iv) and 6.1(a) shall be amended by deleting the
words "neither Partner" from each place in which such words appear therein and
inserting in lieu thereof the words "no Partner".

      (7) Sections 3.1, 11.5, 12.3(a), 14, 15.5 and 15.13 shall be amended by
deleting the words "other Partner" from each place in which such words appear
therein and inserting in lieu thereof the words "other Partners".

      (8) Section 15.7 shall be amended by deleting the words "the other
Partner" from each place in which such words appear therein and inserting in
lieu thereof the words "any other Partner".

                                       X.

                               GENERAL PROVISIONS

      (1) Governing Law; Venue; Disputes. This Agreement shall be governed by
the internal laws of the State of New York. Any action, suit or proceeding shall
be prosecuted as to any party hereto in the County of New York, State of New
York.

      (2) Captions. Section headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

      (3) Other Provisions. Except as amended hereby, the Partnership Agreement
shall in all respects continue in full force and effect and the parties ratify
and confirm that they continue to be bound by the terms and conditions thereof.

      (4) Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one and the same instrument.


                                     - 26 -
<PAGE>   27

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

                                    ADVANCE/NEWHOUSE PARTNERSHIP

                                    By: Advance Communication Corp.,
                                        General Partner

                                    By: /s/ Robert J. Miron
                                        -----------------------------------
                                        Name:  Robert J. Miron
                                        Title:  President

                                    By: Newhouse Broadcasting Corporation,
                                        General Partner

                                    By: /s/ Robert J. Miron
                                        -----------------------------------
                                        Name:  Robert J. Miron
                                        Title:  Vice President


                                    TIME WARNER ENTERTAINMENT COMPANY, L.P.

                                    By: /s/ Spencer B. Hays
                                        -----------------------------------
                                        Name:  Spencer B. Hays
                                        Title: Vice President


                                    PARAGON COMMUNICATIONS

                                    By: KBL Communications Inc.,
                                        General Partner

                                    By: /s/ Spencer B. Hays
                                        -----------------------------------
                                        Name:  Spencer B. Hays
                                        Title: Vice President


                                     - 27 -
<PAGE>   28

                                    EXHIBIT A

SECTION 9 PARTNERSHIP CAPITAL

      9.2 Capital Contributions.

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

            (2) Additional Contributions by Advance/Newhouse.

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

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

                  (3) Additional Contributions by TWE.


                                     - 1 -
<PAGE>   29

                  (1) On the Initial Closing Date and from time to time
thereafter as provided in the Contribution Agreement, and in accordance with the
terms and conditions of the Contribution Agreement, TWE contributed to the
Partnership those assets (including the Beneficial Assets and the Subsidiary
Beneficial Assets) specified to be so contributed in the Contribution Agreement.
The Partners agree that as of the Initial Closing Date the fair market value of
the assets contributed by TWE pursuant to this Section 4.1(c) shall be
determined in accordance with Section 2.4 of the Contribution Agreement, or as
otherwise agreed to by the parties, and included in the Partnership's records.

                  (2) Concurrently with the execution of the Amendment and from
time to time thereafter as provided in the Transaction Agreement and in
accordance with the terms and conditions of the Transaction Agreement, TWE shall
contribute to the Partnership those assets specified in Section 2(a) of the
Transaction Agreement, subject to the liabilities set forth in the Transaction
Agreement. Such contribution by TWE shall be in satisfaction of certain of its
obligations under the Contribution Agreement, as provided in Section 2(d) of the
Transaction Agreement.

            (4) Contribution by Paragon. Concurrently with the execution of the
Amendment and from time to time thereafter as provided in the Transaction
Agreement and in accordance with the terms and conditions of the Transaction
Agreement, Paragon shall contribute to the Partnership those assets specified on
Schedule 1 of the Transaction Agreement and in Section 2(b) of the Transaction
Agreement, subject to the liabilities set forth in the Transaction Agreement.
For purposes of establishing Capital Accounts, the Partners agree that as of the
date of the Amendment, the fair market value of the assets contributed by
Paragon pursuant to this Section 4.1(d) shall be determined in accordance with
the Transaction Agreement.

            (5) Preferred Capital Contributions.

                  (1) Prior to the date of this Amendment, no Preferred
Partnership Units were issued to Advance/Newhouse in exchange for Preferred
Capital Contributions pursuant to Section 4.2(c).

                  (2) At any time that TWE, Advance/Newhouse or Paragon elects
not to receive a proposed distribution from the Partnership pursuant to Section
5.1(c), the amount of such proposed distribution shall be treated as a
contribution to the Partnership, in increments of $1,000, in exchange for
Preferred 


                                     - 2 -
<PAGE>   30

Partnership Units as provided in Section 4.2(c); provided, however, that,
notwithstanding the foregoing, if at such time TWE, Advance/Newhouse and Paragon
are all treated as having made a concurrent contribution to the Partnership in
accordance with this Section 4.1(e)(ii), then the amount of the proposed
distribution to TWE, Advance/Newhouse and Paragon shall be treated as Common
Capital Contributions and no Preferred Partnership Units shall be issued
therefor.

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

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

      9.3 Partnership Units.

            (1) Advance/Newhouse and TWE.

                  (1) On the date of the Partnership Agreement, the Partnership
issued:

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

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

                  (2) As soon as practicable following the determination of the
Advance/Newhouse Contribution Amount pursuant to Section 5 of the Transaction
Agreement, the Partnership shall issue to Advance/Newhouse the number of Common
Partnership Units equal to fifty percent (50%) of the number of Common


                                     - 3 -
<PAGE>   31

Partnership Units issued to Paragon pursuant to Section 4.2(b) hereof. Such
Common Partnership Units shall be issued to Advance/Newhouse in exchange for
Advance/Newhouse's agreement to make the Capital Contribution described in
Section 4.1(b)(ii).

            (2) Paragon As soon as practicable following the determination of
the Net CVI Contribution and the Net Paragon Contribution (as such terms are
defined in Sections 1(c) and 2(d) of the Transaction Agreement), the Partnership
shall issue to Paragon the number of Paragon Preferred Partnership Units and the
number of Common Partnership Units provided in Sections 1(c) and 2(d) of the
Transaction Agreement. Such Paragon Preferred Partnership Units and Common
Partnership Units shall be issued to Paragon in exchange for Paragon's agreement
to make the Capital Contribution described in Section 4.1(d).

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

      9.4 Indebtedness.

            (1) In accordance with the Transaction Agreement, the Partnership
shall assume or otherwise take subject to, the Assumed CVI Liabilities and the
Assumed Paragon Liabilities (as such terms are defined in Sections 1(a) and 2(b)
of the Transaction Agreement).

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

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

            (4) As promptly as practicable after the Managing Partner determines
to cause the Partnership to incur, create or assume any Indebtedness, but not
less than 10 days before the 


                                     - 4 -
<PAGE>   32

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

SECTION 10 CASH DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES

      10.2 Distributions.

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

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

                  (2) With respect to any Fiscal Year in which Paragon is
expected (based on the Managing Partner's good faith estimate) to be allocated
Net Profit pursuant to Section 5.3(b)(ii), the Partnership shall, at least
quarterly, distribute 


                                     - 5 -
<PAGE>   33

(to the extent not prohibited by any applicable contractual restrictions) to
Paragon all Distributable Cash, until Paragon shall have received distributions
with respect to its Paragon Preferred Partnership Units in an amount equal to
the excess of (A) the sum of (I) such estimated Net Profit and (II) the Net
Profit allocated pursuant to Section 5.3(b)(ii) for all prior Fiscal Years, over
(B) the distributions to Paragon pursuant to this Section 5.1(a)(ii) for all
prior Fiscal Years.

                  (3) After the Partnership has made distributions with respect
to the Preferred Partnership Units and the Paragon Preferred Partnership Units
in accordance with clauses (i) and (ii), the Partnership shall, at least
quarterly, distribute (to the extent not prohibited by any applicable
contractual restrictions) to the Partners Distributable Cash, in proportion to
the respective amounts required to be distributed to each such Partner pursuant
to this Section 5.1(a)(iii), in an amount equal to 25 percent of such Partner's
Net Tax Amount for the taxable year that includes such calendar quarter (as
estimated in good faith by the Managing Partner). The Managing Partner's
estimate of such Partner's Net Tax Amount for such year shall be revised prior
to each distribution for such year and upon the filing of the Partnership's
Federal income tax return for such year, and following such revision, (y) the
Partnership shall distribute to such Partner the excess (if any) of the amount
that should have been distributed to such Partner pursuant to this Section
5.1(a)(iii) based on such revised estimate, over the amount actually distributed
to such Partner pursuant to this Section 5.1(a)(iii), plus interest thereon at
the rate paid by the Partnership on its senior Indebtedness, or (z) such Partner
shall contribute to the Partnership the excess (if any) of the amount actually
distributed to such Partner pursuant to this Section 5.1(a)(iii) over the amount
that should have been distributed to such Partner pursuant to this Section
5.1(a)(iii) based on such revised estimate, plus interest thereon at the rate
paid by the Partnership on its senior Indebtedness. To the extent there is
insufficient available cash to make distributions pursuant to this Section
5.1(a)(iii) at the time required, the Partnership shall pay interest on such
shortfall at the rate paid by the Partnership on its senior Indebtedness, and
such interest shall be paid out of the Partnership's first available
Distributable Cash.

                  (4) After the Partnership has made the distributions required
by clauses (i), (ii) and (iii), any remaining Distributable Cash shall, at least
quarterly, be distributed to the Partners in accordance with their Percentage
Interests, unless they make the election provided in Section 5.1(c); provided,
however, that during the period ending on the 


                                     - 6 -
<PAGE>   34

third anniversary of the Effective Date, distributions to any Partner pursuant
to this Section 5.1(a)(iv) shall not, without the consent of TWE, exceed an
amount which, when added to the distributions to such Partner pursuant to
Section 5.1(a)(iii), exceed the sum of (x) such Partner's permitted "operating
cash flow distribution," as determined pursuant to Treasury Regulation Section
1.707-4(b), and (y) the amount of Partnership indebtedness incurred by the
Partnership during the taxable year that includes such calendar quarter and the
proceeds of which are distributed to the Partners, to the extent such
indebtedness is included in such Partner's basis in its interest in the
Partnership pursuant to Code Section 752 and Treasury Regulation Section
1.707-5(a)(2).

            (2) Distributions After Sixth Anniversary. Except as provided in
Sections 5.1(d), 5.1(e), 5.2 and 8.2, on and after the sixth anniversary of the
Effective Date, all distributions by the Partnership shall be made as follows:

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

                  (2) With respect to any Fiscal Year in which Paragon is
expected (based on the Managing Partner's good faith estimate) to be allocated
Net Profit pursuant to Section 5.3(b)(ii), the Partnership shall, at least
quarterly, distribute (to the extent not prohibited by any applicable
contractual restrictions) to Paragon all Distributable Cash, until Paragon shall
have received distributions with respect to its Paragon Preferred Partnership
Units in an amount equal to the excess of (A) the sum of (I) such estimated Net
Profit and (II) the Net Profit allocated pursuant to Section 5.3(b)(ii) for all
prior Fiscal Years, over (B) the distributions to Paragon pursuant to Section
5.1(a)(ii) and this Section 5.1(b)(ii) for all prior Fiscal Years.

                  (3) After the Partnership has made distributions with respect
to the Preferred Partnership Units and the Paragon 


                                     - 7 -
<PAGE>   35

Preferred Partnership Units in accordance with clauses (i) and (ii), the
Partnership shall, at least quarterly, distribute (to the extent not prohibited
by any applicable contractual restrictions) to the Partners Distributable Cash,
in proportion to the respective amounts required to be distributed to each such
Partner pursuant to this Section 5.1(b)(iii), in an amount equal to 25 percent
of such Partner's Net Tax Amount for the taxable year that includes such
calendar quarter (as estimated in good faith by the Managing Partner). The
Managing Partner's estimate of such Partner's Net Tax Amount for such year shall
be revised prior to each distribution for such year and upon the filing of the
Partnership's Federal income tax return for such year, and following such
revision, (y) the Partnership shall distribute to such Partner the excess (if
any) of the amount that should have been distributed to such Partner pursuant to
this Section 5.1(b)(iii) based on such revised estimate, over the amount
actually distributed to such Partner pursuant to this Section 5.1(b)(iii), plus
interest thereon at the rate paid by the Partnership on its senior Indebtedness,
or (z) such Partner shall contribute to the Partnership the excess (if any) of
the amount actually distributed to such Partner pursuant to this Section
5.1(b)(iii) over the amount that should have been distributed to such Partner
pursuant to this Section 5.1(b)(iii) based on such revised estimate, plus
interest thereon at the rate paid by the Partnership on its senior Indebtedness.
To the extent there is insufficient available cash to make distributions
pursuant to this Section 5.1(b)(iii) at the time required, the Partnership shall
pay interest on such shortfall at the rate paid by the Partnership on its senior
Indebtedness, and such interest shall be paid out of the Partnership's first
available Distributable Cash.

                  (4) After the Partnership has made the distributions required
by clauses (i), (ii) and (iii), the Partnership shall distribute (to the extent
not prohibited by any applicable contractual restrictions) any remaining
Distributable Cash to Paragon in redemption of outstanding Paragon Preferred
Partnership Units, at a redemption price of $1,000 per Paragon Preferred
Partnership Unit, so that the Partnership shall have redeemed such Paragon
Preferred Partnership Units in accordance with the following:

                        (1) Prior to the seventh anniversary of the Effective
Date, the Partnership shall have redeemed one-third of the number of Paragon
Preferred Partnership Units originally issued pursuant to Section 4.2(b);

                        (2) Prior to the eighth anniversary of the Effective
Date, the Partnership shall have redeemed, in the 


                                     - 8 -
<PAGE>   36

aggregate, two-thirds of the number of Paragon Preferred Partnership Units
originally issued pursuant to Section 4.2(b); and

                        (3) On and after the eighth anniversary of the Effective
Date, the Partnership shall have redeemed all outstanding Paragon Preferred
Partnership Units.

                  (5) After the Partnership shall have made all distributions
required by clauses (i), (ii), (iii) and (iv), any remaining Distributable Cash
shall, at least quarterly, be distributed to the Partners in accordance with
their Percentage Interests, unless they make the election provided in Section
5.1(c).

            (3) Election Not to Receive Distribution. Notwithstanding Section
5.1(a)(iv) or Section 5.1(b)(v), at any time that the Partnership proposes to
make distributions to Advance/Newhouse, TWE or Paragon pursuant to Section
5.1(a)(iv) or Section 5.1(b)(v), any of such Partners may elect not to receive
the distribution proposed to be distributed to it, and the amount of such
proposed distribution shall be treated as a contribution to the Partnership by
such Partner pursuant to Section 4.1(d), and shall no longer be considered to be
part of Distributable Cash for purposes of Section 5.1.

            (4) Net Proceeds of Sale. Following the sale, exchange, or other
disposition of all or substantially all of the assets of the Partnership, or
upon the liquidation of the Partnership within the meaning of Treasury
Regulations Section 1.704-1(b)(2)(ii)(g), and after payment of, or adequate
provision for, the debts and obligations of the Partnership, the remaining
assets of the Partnership shall be distributed (or deemed distributed in the
event of a termination under Code Section 708(b)(1)(B)) to the Partners (after
giving effect to all contributions, distributions, allocations, and other
Capital Account adjustments for all taxable years, including the year during
which such liquidation occurs) as follows:

                  (1) First, the applicable Preferred Investment Pool shall be
distributed to the holder of Preferred Partnership Units in redemption of all
such Preferred Partnership Units;

                  (2) Second, the Priority Return accrued and unpaid as of the
date of liquidation shall be distributed to 


                                     - 9 -
<PAGE>   37

Paragon;

                  (3) Third, all outstanding Paragon Preferred Partnership Units
shall be redeemed at a redemption price of $1,000 per Paragon Preferred
Partnership Unit; and

                  (4) Finally, the remaining assets of the Partnership shall be
distributed to the Partners so as to effectuate the agreement among the Partners
that the distributions remaining after paying taxes on the Partners' Special
Income and Gross Profit and Gross Loss allocated under Section 5.3(d)(ii) with
respect to the year of such distribution are in proportion to their respective
Percentage Interests, assuming all Partners are taxed at the Special Effective
Tax Rate and taking into account any additional tax paid by Advance/Newhouse due
to the inability of it (or the Persons that are the taxpayers with respect to
income of it) to use all Taxable Loss allocable to it.

            (5) Withholding. All amounts withheld pursuant to the Code or any
provision of any state or local tax law with respect to any payment or
distribution to a Partner shall be treated as amounts distributed to such
Partner pursuant to Section 5.1 for all purposes of this Agreement.

      10.3 Redemption of Preferred Partnership Units. Upon an Advance/Newhouse
Redemption Event, TWE Redemption Event, or Paragon Redemption Event,
Advance/Newhouse, TWE or Paragon, respectively, shall have the option to require
the Partnership to redeem all or some of the Preferred Partnership Units held by
such Partner. Such redemption option shall be exercisable by delivery of a
written notice (the "Redemption Notice") to the Partnership indicating that an
Advance/Newhouse Redemption Event, TWE Redemption Event or Paragon Redemption
Event, as applicable, has occurred, and setting forth the number of Preferred
Partnership Units to be redeemed by the Partnership (the "Redeemed Preferred
Partnership Units"). As soon as reasonably practicable, but no later than five
business days following the delivery of the Redemption Notice, the Partnership
shall distribute to Advance/Newhouse, TWE, or Paragon, as applicable, the
applicable Preferred Investment Pool (or pro rata portion thereof based on the
ratio of the number of Redeemed Preferred Partnership Units to the total number
of Preferred Partnership Units held by Advance/Newhouse, TWE or Paragon, as
applicable).

      10.4 Allocations of Preferred Profit; Preferred Loss; Net Profit and Net
Loss.

            (1) Priority Allocations. All Preferred Profit and Preferred Loss
with respect to a Preferred Investment Pool for any Fiscal Year (or portion
thereof) shall be allocated to the 


                                     - 10 -
<PAGE>   38

holder of Preferred Partnership Units to which such Preferred Investment Pool
relates.

            (2) Allocations of Net Profit. Except as otherwise provided in
Sections 5.3(d) and 5.3(e), after giving effect to the allocations provided in
Sections 5.3(a), 5.5 and 5.8, the Net Profit for each Fiscal Year (or portion
thereof) shall be allocated to the Partners as follows:

                  (1) First, Net Profit shall be allocated to Paragon until
Paragon shall have been allocated Net Profit in an amount equal to the excess,
if any, of (A) the aggregate Net Loss allocated to Paragon pursuant to Section
5.3(c)(ii) for all prior Fiscal Years, over (B) the aggregate Net Profit
allocated to Paragon pursuant to this Section 5.3(b)(i) for all prior Fiscal
Years;

                  (2) Second, Net Profit shall be allocated to Paragon until
Paragon shall have been allocated Net Profit in an amount equal to the excess,
if any, of (A) the cumulative Priority Return accrued through the end of such
Fiscal Year (or portion thereof) over (B) the aggregate Net Profit allocated to
Paragon pursuant to this Section 5.3(b)(ii) for all prior Fiscal Years;

                  (3) Third, Net Profit shall be allocated to the Partners, in
proportion to and to the extent of the amount required to be allocated pursuant
to this Section 5.3(b)(iii), until each such Partner has been allocated Net
Profit pursuant to this Section 5.3(b)(iii) in an amount equal to the excess of
(y) such Partner's aggregate Maximum Income Amount for such Fiscal Year and all
prior Fiscal Years, over (z) the aggregate Net Profit allocated to such Partner
pursuant to this Section 5.3(b)(iii) for all prior Fiscal Years; and

                  (4) Thereafter, Net Profit shall be allocated to the Partners
in accordance with their Percentage Interests.

            (3) Allocations of Net Loss. Except as otherwise provided in
Sections 5.3(d) and 5.3(e), after giving effect to the allocations provided in
Sections 5.3(a), 5.5 and 5.8, Net Loss for each Fiscal Year (or portion thereof)
shall be allocated as follows:

                  (1) First, Net Loss for such Fiscal Year (or portion thereof)
shall be allocated to the Partners in accordance with their Percentage Interests
until Advance/Newhouse's and TWE's Capital Accounts are reduced to the excess,
if any, of the aggregate Net Profit allocated to such Partners pursuant to


                                     - 11 -
<PAGE>   39

Section 5.3(b)(iii) for all prior Fiscal Years, over the aggregate Special Tax
Amounts distributed to such Partners pursuant to Sections 5.1(a)(iii) and
5.1(b)(iii) for all prior Fiscal Years;

                  (2) Second, Net Loss for such Fiscal Year (or portion thereof)
shall be allocated to Paragon until Paragon's Capital Account has been reduced
to the excess, if any, of the aggregate Net Profit allocated to Paragon pursuant
to Section 5.3(b)(iii) for all prior Fiscal Years, over the aggregate Special
Tax Amounts distributed to Paragon pursuant to Sections 5.1(a)(iii) and
5.1(b)(iii) for all prior Fiscal Years; and

                  (3) Thereafter, Net Loss for such Fiscal Year (or portion
thereof) shall be allocated to the Partners in accordance with their Percentage
Interests.

            (4) Allocation of Gain or Loss Upon Sale. Notwithstanding Section
5.3(b) and Section 5.3(c), and after giving effect to the allocations provided
in Section 5.3(a), in the event of a sale, exchange, or other disposition of all
or substantially all of the assets of the Partnership, or upon the liquidation
of the Partnership within the meaning of Treasury Regulations Section
1.704-1(b)(2)(ii)(g), beginning in the year in which the contract or agreement
for such sale is entered into or, if such contract or agreement is entered into
on or prior to the date on which the Partnership's Federal income tax return
with respect to the prior year is required to be filed (not including any
extensions), beginning in such prior year:

                  (1) First, Gross Profit shall be allocated to Paragon until
Paragon shall have been allocated Gross Profit in an amount equal to the excess,
if any, of (A) the sum of (I) the aggregate Net Loss allocated to Paragon
pursuant to Section 5.3(c)(ii) for all prior Fiscal Years, and (II) the
cumulative Priority Return accrued through the end of such Fiscal Year (or
portion thereof), over (B) the aggregate Net Profit allocated to Paragon
pursuant to Sections 5.3(b)(i) and Section 5.3(b)(ii) for all prior Fiscal
Years;

                  (2) Finally, Gross Profit and Gross Loss shall be allocated to
the Partners so as to cause the credit balance in each Partner's Capital Account
to equal, as nearly as possible, the amount each Partner would receive in a
distribution on dissolution, if the distribution were made in accordance with
Section 5.1(d).

In the event that such sale or liquidation does not take place within the year
following the year of the signing of the contract 


                                     - 12 -
<PAGE>   40

or agreement, or upon the termination of such contract or agreement, if earlier,
allocations of Gross Profit or Gross Loss shall be made to reverse, as rapidly
as possible, the effect of any such allocations made pursuant to this Section
5.3(d).

      10.5 Section 754 Adjustment. To the extent any adjustment to the adjusted
tax basis of any asset of the Partnership pursuant to Code Section 734(b) or
Code Section 743(b) is required, pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Treasury
Regulations. Any Partner may cause the Partnership to make any election
permitted under Code Section 754.

      10.6 Other Allocation Rules.

            (1) In the event that the Partnership is entitled to an income tax
deduction for the excess of the Closing Price of a unit of TWX Securities on the
Initial Closing Date over the exercise price paid by the Eligible Option Holder
for such unit of TWX Securities, such deduction and an equal amount of Gross
Loss shall be specifically allocated to TWE or Paragon, as appropriate, and TWE
or Paragon, as appropriate, shall be deemed to have made a capital contribution
to the Partnership in the same amount.

            (2) In the event that, pursuant to any Final Determination of the
Partnership's Taxable Income or Taxable Loss or the Partner's distributive
shares thereof, (i) the Partnership's Taxable Income or Taxable Loss is adjusted
or (ii) the Partners' distributive shares of the Partnership's Taxable Income or
Taxable Loss are adjusted, Gross Profit or Gross Loss shall be allocated to the
Partners to reflect the adjustments to the Partnership's Taxable Income or
Taxable Loss or the Partners' distributive shares thereof so as to place the
Partners as rapidly as possible, in conjunction with any distribution or
contribution pursuant to Section 5.1(a)(iii) and Section 5.1(b)(iii), in the
same relative positions they would have been in had the Taxable Income or
Taxable Loss or distributive shares thereof as adjusted been taken into account
originally (including any interest with respect to any deficiency or any
refund).

            (3) In the event that interest is paid by the Partnership to a
Partner pursuant to Section 5.1(a)(iii) or 


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<PAGE>   41

Section 5.1(b)(iii), a special allocation of Gross Profit shall be made to such
Partner in an amount equal to the amount of such interest.

            (4) If any fees or other payments deducted for federal income tax
purposes by the Partnership are recharacterized by a final determination of the
Internal Revenue Service as nondeductible distributions to any Partner, then,
notwithstanding all other allocation provisions, Gross Profit shall be allocated
to such Partner (for each Fiscal Year in which such recharacterization occurs)
in an amount equal to the fees or payments recharacterized.

            (5) All items of Partnership income, gain, loss, deduction, and any
other allocations not otherwise provided for shall be allocated among the
Partners in the same proportion as they share the Preferred Profits, Preferred
Losses, Net Profits or Net Losses to which such items relate for the Fiscal
Year. Any credits against income tax shall be allocated among the Partners in
accordance with their Percentage Interests.

            (6) For any year with respect to which the Partnership is required
to pay New York City Unincorporated Business Tax, such tax shall be allocated
among the Partners in a manner so that the benefit of any deduction, credit,
exemption or exclusion that is available to the Partnership as a result of the
activities, income or status of or payments by a particular Partner (a "Credit
Partner") shall be allocated entirely to such Credit Partner. The foregoing
shall be accomplished by charging the amount of such tax to the Capital Account
of any Partner that is not a Credit Partner and by distributing to any Credit
Partner an amount that bears the same proportion to such tax as such Credit
Partner's Percentage Interest bears to the Percentage Interests of the Partners
that are not Credit Partners.

            (7) Notwithstanding Section 5.3(b), in the event that the Net Profit
allocated to the Partners pursuant to Section 5.3(b)(iii) results in an
allocation of Taxable Loss to Advance/Newhouse, then Net Profit shall be
reallocated among the Partners so as to effectuate the agreement of the Partners
that on an annual basis the distributions pursuant to Sections 5.1(a)(iii),
5.1(a)(iv), 5.1(b)(iii) and 5.1(b)(v) remaining after paying taxes on Special
Income and Net Profit allocated pursuant to Sections 5.3(b)(iii) and 5.3(b)(iv)
shall be in proportion to their respective Percentage Interests, assuming all
Partners are taxed at the Special Effective Tax Rate and taking into account any
additional tax paid by Advance/Newhouse due to the inability of it (or the
Persons that are the taxpayers with respect to income of it) to use all Taxable
Loss allocable to it.


                                     - 14 -
<PAGE>   42

      10.7 Tax Allocations.

            (1) Income, gain, loss, and deduction with respect to any property
contributed to the capital of the Partnership, including property purchased with
cash contributed to the capital of the Partnership by a Partner shall, solely
for tax purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
Federal income tax purposes and its initial Gross Asset Value in accordance with
the remedial allocation method set forth in Treasury Regulations Section
1.704-3(d).

            (2) If the Gross Asset Value of any asset of the Partnership is
adjusted pursuant to paragraph (ii) of the definition of Gross Asset Value,
subsequent allocations of income, gain, loss, and deduction with respect to such
asset shall take account of any variation between the adjusted basis of such
asset for Federal income tax purposes and its Gross Asset Value in accordance
with Section 704(c) and the Treasury Regulations promulgated thereunder,
including Treasury Regulations Sections 1.704-1(b)(4)(i) and 1.704-3(d).

            (3) Subject to Section 11.8, any election or other decision relating
to any allocations pursuant to this Section 5.6 shall be made by the
Partnership, upon the approval of such election or other decision by the
Managing Partner, in any manner that reasonably reflects the purpose and
intention of this Agreement. Allocations pursuant to this Section 5.6 are solely
for purposes of Federal, state, and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profit, Net Loss, other items, or distributions pursuant to any provision
of this Agreement.

            (4) For purposes of Sections 5.1(d) and 5.5, within 45 days after
the end of each Fiscal Year, Advance/Newhouse shall provide the Managing Partner
with the Advance/Newhouse Loss Amount for such Fiscal Year.

      10.8 Allocation in Event of Transfer. If any Partnership Units are
transferred in accordance with Section 6.1, the Preferred Profit, Preferred
Loss, Net Profit and Net Loss of the Partnership shall be allocated between the
periods before and after the transfer by the closing of the books method. As of
the date of such transfer, the transferee shall succeed to the Capital Account,
Common Capital Contribution and Preferred Capital Contribution of the transferor
Partner, to the extent that the transferor's Capital Account, Common Capital


                                     - 15 -
<PAGE>   43

Contribution and Preferred Capital Contribution relate to the transferred
interest. This Section shall apply for purposes of computing a Partner's Capital
Account and for federal income tax purposes.

      10.9 Beneficial Assets and Subsidiary Beneficial Assets. The Partnership
shall (and the Partners shall not, except as Partners of the Partnership)
report, for Federal income tax purposes, the income, gain, deduction and loss
with respect to the Beneficial Assets that are not Subsidiary Beneficial Assets,
and the Partners shall (and the Partnership shall not) report, for Federal
income tax purposes, the income, gain, deduction and loss with respect to the
Subsidiary Beneficial Assets. In the event that, pursuant to any Final
Determination (as defined below), the Partnership either (x) is treated as the
beneficial owner of any of the Subsidiary Beneficial Assets prior to the actual
contribution of such Subsidiary Beneficial Assets to the Partnership or (y) is
treated as not the beneficial owner of any of the Beneficial Assets that are not
Subsidiary Beneficial Assets prior to the actual contribution of such Beneficial
Assets to the Partnership, to the extent necessary, appropriate adjustments
shall be made to the distributions provided for in Section 5.1 so as to place
the Partners and the Partnership in the same positions they would have been in
had the Partnership's beneficial ownership of the Subsidiary Beneficial Assets
or lack of beneficial ownership of such other Beneficial Assets been taken into
account originally.

      10.10 Set-off. If by the earlier of the fourth anniversary of the
Effective Date, a restructuring of the Partnership pursuant to Section 8.2, or
the purchase and sale of Common Partnership Units pursuant to Section 9(g)(ii),
Advance/Newhouse shall not have contributed to the Partnership cash in an amount
equal to the Advance/Newhouse Contribution Amount plus interest thereon in
accordance with Section 4.1(b)(ii), then, in addition to any other rights and
remedies which the Partnership may have, the Partnership is hereby authorized at
any time and from time to time, to the fullest extent permitted by law and
without prior notice to Advance/Newhouse (or any successor to or transferee of
its Partnership Interests), to recoup, set-off and apply any and all amounts at
any time owing or otherwise payable by the Partnership to Advance/Newhouse (or
any successor to or transferee of its Partnership Interests), including, without
limitation, any distributions payable in accordance with 


                                     - 16 -
<PAGE>   44

Section 5 and any distributions to, or Partnership liabilities assumed by,
Advance/Newhouse in accordance with Section 8.2, and any amounts payable to
Advance/Newhouse pursuant to Section 9, to satisfy Advance/Newhouse's
obligations to make such contribution. To the extent that any amounts
distributable in accordance with Section 5 or Section 8.2 are applied in
accordance with the preceding sentence rather than distributed to
Advance/Newhouse (or any successor to or transferee of its Partnership
Interests), then such amounts shall be deemed distributed by the Partnership to
Advance/Newhouse (or such successor or transferee) and recontributed by
Advance/Newhouse (or such successor or transferee) to the Partnership and the
Capital Account of Advance/Newhouse (or such successor or transferee) shall be
adjusted to reflect such deemed distribution and recontribution.


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