<PAGE>   1

                                                                   Exhibit 10.41

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

            SECOND AMENDMENT TO THE PARTNERSHIP AGREEMENT OF TIME WARNER
ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP, dated as of December 31, 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 (the "Original Agreement"), as amended by the First Amendment to the
Partnership Agreement of the Partnership dated as of February 12, 1998 (the
"First Amendment" and together with the Original Agreement, the "Partnership
Agreement"), pursuant to which, among other things, Paragon became a partner of
the Partnership;

            WHEREAS, pursuant to a Transaction Agreement No. 2, dated as of June
23, 1998 among Advance Publications, Inc., Newhouse Broadcasting Corporation,
Advance/Newhouse, TWE, Paragon and the Partnership (the "Second Transaction
Agreement"), Paragon has agreed to contribute to the Partnership certain assets
and Advance/Newhouse has agreed to contribute to the Partnership additional
cash;

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

            WHEREAS, the parties hereto desire to enter into this Amendment in
connection with the transactions contemplated by the Second 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:

                                       I.

                             AMENDMENTS TO SECTION 1

            (1) The following definitions shall be deleted in their entirety:
            "Advance/Newhouse Contribution Amount"; "Effective Date"; "Paragon
            Preferred Capital Contribution"; "Paragon Preferred Partnership
            Unit"; "Priority Return"; and "Transaction Agreement."

<PAGE>   2
                                                                               2


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

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

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

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

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

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

                  "Second Effective Date" has the meaning ascribed thereto in
            Section 5 of the Second Transaction Agreement.

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

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

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

<PAGE>   3
                                                                               3


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

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

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

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

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

                  "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 Second Effective Date,

                        (A) increased by (i) the amount of cash contributed by
                  such Partner to the Partnership after the Second 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 

<PAGE>   4
                                                                               4


                  regard to Code Section 7701(g) of property contributed by such
                  Partner to the Partnership after the Second 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 First Effective
                  Date or the Second 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 Second 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 Second Effective
                  Date; (ii) allocations to the Partner after the Second
                  Effective Date of Preferred Loss, Gross Loss and Net Loss
                  pursuant to Section 5; (iii) the fair market value without
                  regard to Code Section 7701(g) of property distributed to such
                  Partner by the Partnership after the Second 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 Second 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, (w) 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, (x) the Paragon
            Adjustment Amount and the TWE Adjustment Amount (as such terms are
            defined in Section 11 of the First Transaction Agreement) shall be
            treated as if they had been made on the First Effective Date, (y)
            all of the adjustments, contributions or distributions required
            pursuant to the Second Transaction Agreement or the TCI Contribution
            Agreement shall be treated as if they had been 

<PAGE>   5
                                                                               5


            made on the Second Effective Date, and (z) such adjustments,
            contributions, distributions, and Adjustment Amounts shall not give
            rise to any adjustments to Capital Account balances or
            redetermination of amounts contributed by or distributed to any
            Partner.

                  "Capital Contribution" means either a Common Capital
            Contribution, a Preferred Capital Contribution, a Series A Preferred
            Capital Contribution or a Series B 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 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 sum of the Series A Preferred Capital
            Contribution and the Series B 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, the First Effective Date or
            the Second 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).

                  "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 First
            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).

<PAGE>   6
                                                                               6


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

                                       II.

                                OTHER AMENDMENTS

            (1) Section 4 of the Partnership Agreement shall be deleted in its
entirety and new Section 4 in the form attached hereto as Exhibit A shall be
substituted therefor.

            (2) Section 5 of the Partnership Agreement shall be deleted in its
entirety and new Section 5 in the form attached hereto as Exhibit B shall be
substituted therefor.

            (3) Section 8.2 of the Partnership Agreement shall be deleted in its
entirety and new Section 8.2 in the form attached hereto as Exhibit C shall be
substituted therefor.

            (4) The last sentence of Section 9(d) of the Partnership Agreement
shall be amended by deleting the words "Paragon Preferred Partnership Units" and
substituting therefor the words "Series A Preferred Partnership Units and Series
B Preferred Partnership Units."

            (5) Section 12.3(b) of the Partnership Agreement shall be amended by
deleting "Section 5.1(c)" and substituting therefor the words "Section 5.1(d)."

                                      III.

                               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.

<PAGE>   7
                                                                               7


            (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.

<PAGE>   8
                                                                               8


                  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., as
                                  General Manager

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

<PAGE>   9

                                                                       EXHIBIT A
                                                           (to Second Amendment)

SECTION 4 PARTNERSHIP CAPITAL

            Capital Contributions.

            (a) 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.

            (b) Additional Contributions by Advance/Newhouse.

                  (i) On the Initial Closing Date and from time to time
thereafter as provided in the Contribution Agreement, and in accordance with the
terms and conditions of the Contribution Agreement, Advance/Newhouse contributed
or caused to be contributed to the Partnership those assets (including the
Beneficial Assets and the Subsidiary Beneficial Assets) specified to be so
contributed in the Contribution Agreement. 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.

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

                  (iii) At any time after the date that is six months following
the Second Effective Date and on or before the earlier of the fourth anniversary
of the Second Effective Date, a restructuring of the Partnership pursuant to
Section 8.2, or the purchase and sale of Common Partnership Units pursuant to
Section 9(g)(ii), Advance/Newhouse shall contribute to the Partnership cash in
the amount of the Second Advance/Newhouse Contribution Amount. In addition,
Advance/Newhouse shall pay interest on the Second Advance/Newhouse Contribution
Amount at the 

<PAGE>   10
                                                                               2


Interest Rate (as defined in Section 4 of the Second Transaction Agreement)
compounded (to the extent not paid) on a quarterly basis, from the Second
Effective Date until the date on which the Second Advance/Newhouse Contribution
Amount is paid. On the Second Effective Date, Advance/Newhouse shall execute the
Advance/Newhouse Note (as defined in Section 4 of the Second Transaction
Agreement) which shall not be an asset of the Partnership but shall secure
Advance/Newhouse's obligation to contribute the Second Advance/Newhouse
Contribution Amount to the Partnership, plus interest, as provided in this
Section 4.1(b)(iii).

            (c) Additional Contributions by TWE.

                  (i) On the Initial Closing Date and from time to time
thereafter as provided in the Contribution Agreement, and in accordance with the
terms and conditions of the Contribution Agreement, TWE contributed to the
Partnership those assets (including the Beneficial Assets and the Subsidiary
Beneficial Assets) specified to be so contributed in the Contribution Agreement.
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.

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

            (d) Contributions by Paragon.

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

<PAGE>   11
                                                                               3


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

            (e) Preferred Capital Contributions.

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

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

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

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

<PAGE>   12
                                                                               4


      4.2 Partnership Units.

            (a) Advance/Newhouse and TWE.

                  (i) On September 9, 1994, 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).

            (ii) Following the determination of the First Advance/Newhouse
Contribution Amount pursuant to Section 5 of the First 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 Partnership Units
issued to Paragon pursuant to Section 4.2(b)(i) 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).

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

            (b) Paragon.

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

<PAGE>   13
                                                                               5


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

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

      4.3 Indebtedness.

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

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

            (b) 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.

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

            (d) As promptly as practicable after the Managing Partner determines
to cause the Partnership to incur, create or assume any Indebtedness, but not
less than 10 days before the incurrence, creation or assumption by the
Partnership of such Indebtedness, the Managing Partner shall give
Advance/Newhouse notice and a reasonably detailed description thereof, including
a description of any restrictions on distributions of the type referred to in
the next sentence contained in the agreement governing such Indebtedness (the
"Indebtedness Notice"). The Managing Partner shall use reasonable best efforts
in negotiating such agreement to exclude from the credit (or 

<PAGE>   14
                                                                               6


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).
<PAGE>   15

                                                                       EXHIBIT B
                                                           (to Second Amendment)

SECTION 5 CASH DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES

      5.1 Distributions.

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

                  (i) The Partnership shall, at least quarterly, distribute (to
the extent not prohibited by any applicable contractual restrictions) to the
holders of the Preferred Partnership Units all cash received with respect to the
Preferred Investment Pool associated with such Preferred Partnership Units,
until each holder of Preferred Partnership Units shall have received aggregate
distributions pursuant to this Section 5.1(a)(i) in an amount equal to the
product of the Effective Tax Rate times the Net Cumulative 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.

                  (ii) 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 the Series A Preferred Partnership
Units and the Series B Preferred Partnership Units held by it in an amount equal
to the excess of (A) the sum of (I) such estimated Net Profit expected to be
allocated pursuant to Section 5.3(b)(ii) 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, which distributions shall be allocated among the Series A
Preferred Partnership Units and the Series B Preferred Partnership Units held by
Paragon, pari passu, in proportion to such excess amount calculated for each of
them.

                  (iii) After the Partnership has made distributions with
respect to the Preferred Partnership Units, the Series A Preferred Partnership
Units and Series B 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 

<PAGE>   16
                                                                               2


shall distribute to such Partner the excess (if any) of the amount that should
have been distributed to such Partner pursuant to this Section 5.1(a)(iii) based
on such revised estimate, over the amount actually distributed to such Partner
pursuant to this Section 5.1(a)(iii), plus interest thereon at the rate paid by
the Partnership on its senior Indebtedness, or (z) such Partner shall contribute
to the Partnership the excess (if any) of the amount actually distributed to
such Partner pursuant to this Section 5.1(a)(iii) over the amount that should
have been distributed to such Partner pursuant to this Section 5.1(a)(iii) based
on such revised estimate, plus interest thereon at the rate paid by the
Partnership on its senior Indebtedness. To the extent there is insufficient
available cash to make distributions pursuant to this Section 5.1(a)(iii) at the
time required, the Partnership shall pay interest on such shortfall at the rate
paid by the Partnership on its senior Indebtedness, and such interest shall be
paid out of the Partnership's first available Distributable Cash.

                  (iv) After the Partnership has made the distributions required
by clauses (i), (ii) and (iii), any remaining Distributable Cash shall, at least
quarterly, be distributed to the Partners in accordance with their Percentage
Interests, unless they make the election provided in Section 5.1(c); provided,
however, that during the period ending on the third anniversary of the Second
Effective Date, distributions to any Partner pursuant to this Section 5.1(a)(iv)
shall not, without the consent of TWE, exceed an amount which, when added to the
distributions to such Partner pursuant to Section 5.1(a)(iii), exceed the sum of
(x) such Partner's permitted "operating cash flow distribution," as determined
pursuant to Treasury Regulation Section 1.707-4(b), and (y) the amount of
Partnership indebtedness incurred by the Partnership during the taxable year
that includes such calendar quarter and the proceeds of which are distributed to
the Partners, to the extent such indebtedness is included in such Partner's
basis in its interest in the Partnership pursuant to Code Section 752 and
Treasury Regulation Section 1.707-5(a)(2).

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

                  (i) The Partnership shall, at least quarterly, distribute (to
the extent not prohibited by any applicable contractual restrictions) to the
holders of the Preferred Partnership Units all cash received with respect to the
Preferred Investment Pool associated with such Preferred Partnership Units,
until each holder of Preferred Partnership Units shall have received aggregate
distributions pursuant to Section 5.1(a)(i) and this Section 5.1(b)(i) in an
amount equal to the product of the Effective Tax Rate times the Net Cumulative
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.

<PAGE>   17
                                                                               3


                  (ii) 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 the Series A Preferred Partnership
Units and the Series B Preferred Partnership Units held by it in an amount equal
to the excess of (A) the sum of (I) such estimated Net Profit expected to be
allocated pursuant to Section 5.3(b)(ii) 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(b)(ii) for all prior
Fiscal Years, which distributions shall be allocated among the Series A
Preferred Partnership Units and the Series B Preferred Partnership Units held by
Paragon, pari passu, in proportion to such excess amount calculated for each of
them.

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

                  (iv) After the Partnership has made the distributions required
by clauses (i), (ii) and (iii), the Partnership shall distribute (to the extent
not prohibited by any applicable contractual restrictions) any remaining
Distributable Cash to Paragon in redemption of outstanding Series A Preferred
Partnership Units and Series B Preferred 

<PAGE>   18
                                                                               4


Partnership Units, at a redemption price of $1,000 per Series A Preferred
Partnership Unit or Series B Preferred Partnership Unit, as the case may be, so
that the Partnership shall have redeemed such Series A Preferred Partnership
Units and Series B Preferred Partnership Units in accordance with the following:

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

                        (2) Prior to the eighth anniversary of the First
Effective Date, the Partnership shall have redeemed, in the aggregate,
two-thirds of the number of Series A Preferred Partnership Units and Series B
Preferred Partnership Units originally issued pursuant to Section 4.2(b); and

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

Each distribution pursuant to this Section 5.1(b)(iv) shall be made with respect
to the Series A Preferred Partnership Units and the Series B Preferred
Partnership Units held by Paragon, pari passu, in proportion to the number of
each outstanding.

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

            (c) Election Not to Receive Distribution. Notwithstanding Section
5.1(a)(iv) or Section 5.1(b)(v), at any time that the Partnership proposes to
make distributions to 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.

            (d) Net Proceeds of Sale. Following the sale, exchange, or other
disposition of all or substantially all of the assets of the Partnership, or
upon the liquidation of the Partnership within the meaning of Treasury
Regulations Section 1.704-1(b)(2)(ii)(g), and after payment of, or adequate
provision for, the debts and obligations of the Partnership, the remaining
assets of the Partnership shall be distributed (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 

<PAGE>   19
                                                                               5


Account adjustments for all taxable years, including the year during which such
liquidation occurs) as follows:

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

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

                  (iii) Third, all outstanding Series A Preferred Partnership
Units and Series B Preferred Partnership Units shall be redeemed at a redemption
price of $1,000 per Series A Preferred Partnership Unit or Series B Partnership
Unit, as the case may be; and

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

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

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

<PAGE>   20
                                                                               6


total number of Preferred Partnership Units held by Advance/Newhouse, TWE or
Paragon, as applicable).

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

            (a) Priority Allocations. All Preferred Profit and Preferred Loss
with respect to a Preferred Investment Pool for any Fiscal Year (or portion
thereof) shall be allocated to the holder of Preferred Partnership Units to
which such Preferred Investment Pool relates.

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

                  (i) First, Net Profit shall be allocated to Paragon until
Paragon shall have been allocated, with respect to the Series A Preferred
Partnership Units and the Series B Preferred Partnership Units, 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 them pursuant to this Section 5.3(b)(i) for
all prior Fiscal Years, which allocation shall be divided among the Series A
Preferred Partnership Units and the Series B Preferred Partnership Units held by
Paragon, pari passu, in proportion to such excess amount calculated for each of
them;

                  (ii) Second, Net Profit shall be allocated to Paragon until
Paragon shall have been allocated, with respect to the Series A Preferred
Partnership Units and the Series B Preferred Partnership Units, Net Profit in an
amount equal to the excess, if any, of (A) the cumulative Series A Priority
Return and the cumulative Series B Priority Return, in each case accrued through
the end of such Fiscal Year (or portion thereof) over (B) the aggregate Net
Profit allocated to such Partners pursuant to this Section 5.3(b)(ii) for all
prior Fiscal Years, which amount of Net Profit shall be allocated among the
Series A Preferred Partnership Units and the Series B Preferred Partnership
Units held by Paragon, pari passu, in proportion to such excess amount
calculated for each of them;

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

<PAGE>   21
                                                                               7


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

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

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

                  (ii) Second, Net Loss for such Fiscal Year (or portion
thereof) shall be allocated to Paragon with respect to the Series A Preferred
Partnership Units and the Series B Preferred Partnership Units, until Paragon's
Capital Account has been reduced to the excess, if any, of the aggregate Net
Profit allocated to Paragon pursuant to Section 5.3(b)(iii) for all prior Fiscal
Years, over the aggregate Special Tax Amounts distributed to pursuant to
Sections 5.1(a)(iii) and 5.1(b)(iii) for all prior Fiscal Years, which
allocation shall be divided among the Series A Preferred Partnership Units and
the Series B Preferred Partnership Units held by Paragon, pari passu, in
proportion the amount calculated with respect to each of them; and

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

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

                  (i) First, Gross Profit shall be allocated to Paragon 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 

<PAGE>   22
                                                                               8


prior Fiscal Years, which allocation shall be divided among the Series A
Preferred Partnership Units and the Series B Preferred Partnership Units held by
Paragon, pari passu, in proportion to such excess amount calculated for each of
them;

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

In the event that such sale or liquidation does not take place within the year
following the year of the signing of the contract or agreement, or upon the
termination of such contract or agreement, if earlier, allocations of Gross
Profit or Gross Loss shall be made to reverse, as rapidly as possible, the
effect of any such allocations made pursuant to this Section 5.3(d).

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

      5.5 Other Allocation Rules.

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

            (b) In the event that, pursuant to any Final Determination of the
Partnership's Taxable Income or Taxable Loss or the Partner's distributive
shares thereof, (i) the Partnership's Taxable Income or Taxable Loss is adjusted
or (ii) the Partners' distributive shares of the Partnership's Taxable Income or
Taxable Loss are adjusted, Gross Profit or Gross Loss shall be allocated to the
Partners to reflect the adjustments to the Partnership's Taxable Income or
Taxable Loss or the Partners' distributive shares thereof so as to place the
Partners as rapidly as possible, in conjunction with any distribution or
contribution pursuant to Section 5.1(a)(iii) and 

<PAGE>   23
                                                                               9


Section 5.1(b)(iii), in the same relative positions they would have been in had
the Taxable Income or Taxable Loss or distributive shares thereof as adjusted
been taken into account originally (including any interest with respect to any
deficiency or any refund).

            (c) In the event that interest is paid by the Partnership to a
Partner pursuant to Section 5.1(a)(iii) or Section 5.1(b)(iii), a special
allocation of Gross Profit shall be made to such Partner in an amount equal to
the amount of such interest.

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

            (e) All items of Partnership income, gain, loss, deduction, and any
other allocations not otherwise provided for shall be allocated among the
Partners in the same proportion as they share the Preferred Profits, Preferred
Losses, Net Profits 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.

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

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

<PAGE>   24
                                                                              10


      5.6 Tax Allocations.

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

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

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

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

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

<PAGE>   25
                                                                              11


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

      5.9 Set-off. If (a) by the earlier of the fourth anniversary of the First
Effective Date, a restructuring of the Partnership pursuant to Section 8.2, or
the purchase and sale of Common Partnership Units pursuant to Section 9(g)(ii),
Advance/Newhouse shall not have contributed to the Partnership cash in an amount
equal to the First Advance/Newhouse Contribution Amount plus interest thereon in
accordance with Section 4.1(b)(ii) or (b) by the earlier of the fourth
anniversary of the Second Effective Date, a restructuring of the Partnership
pursuant to Section 8.2, or the purchase and sale of Common Partnership Units
pursuant to Section 9(g)(ii), Advance/Newhouse shall not have contributed to the
Partnership cash in an amount equal to the Second Advance/Newhouse Contribution
Amount, then, in addition to any other rights and remedies which the Partnership
may have, the Partnership is hereby authorized at any time and from time to
time, to the fullest extent permitted by law and without prior notice to
Advance/Newhouse (or any successor to or transferee of its Partnership
Interests), to recoup, set-off and apply any and all amounts at any time owing
or otherwise payable by the Partnership to Advance/Newhouse (or any successor to
or transferee of its Partnership Interests), including, without limitation, any
distributions payable in accordance with Section 5 and any distributions to, or
Partnership liabilities assumed by, Advance/Newhouse in accordance with Section
8.2, and any amounts payable to Advance/Newhouse pursuant to Section 9, to
satisfy Advance/Newhouse's obligations to make such contribution. To the extent
that any amounts distributable in accordance with Section 5 or Section 8.2 are
applied in accordance with the preceding sentence rather than distributed to
Advance/Newhouse (or any successor to or transferee of its Partnership
Interests), then such amounts shall be deemed distributed by the Partnership to
Advance/Newhouse (or such successor or transferee) and recontributed by
Advance/Newhouse (or such successor or transferee) to the Partnership and the
Capital 

<PAGE>   26
                                                                              12


Account of Advance/Newhouse (or such successor or transferee) shall be adjusted
to reflect such deemed distribution and recontribution.
<PAGE>   27

                                                                       EXHIBIT C
                                                           (to Second Amendment)

            8.2 Restructuring of Partnership.

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

                  (b) If, after a period of three months from the date of
      delivery of the Restructuring Notice, Advance/Newhouse and TWE have failed
      to agree on the terms of the restructuring of the Partnership, the
      Partnership shall be restructured by the withdrawal of Advance/Newhouse
      from the Partnership as follows:

                        (i) Within 15 days following the expiration of such
      three-month period, (A) if at such time Advance/Newhouse holds Preferred
      Partnership Units the Partnership shall distribute the Preferred
      Investment Pool attributable to such Preferred Partnership Units in
      redemption of all Preferred Partnership Units then held by
      Advance/Newhouse, (B) the Partnership shall calculate the "Restructuring
      Indebtedness Amount" (as defined in Section 8.2(b)(v) and the "Excess Tax
      Amount" (as defined in Section 8.2(b)(vi)) of Advance/Newhouse, if any,
      (C) subject to obtaining any required governmental or other third-party
      consents or approvals, the Partnership shall distribute 33-1/3% of the Pro
      Rata Assets (as defined below) to Advance/Newhouse, and (D) TWE shall (1)
      divide the remaining assets (and related liabilities) of the Partnership
      into three pools (the "Asset Pools") which shall meet the Asset Pool
      Criteria (as defined below) but which shall in any event be of equal value
      (in TWE's judgment), and (2) deliver a written notice to Advance/Newhouse
      setting forth the cable television systems and other assets contained in
      each such Asset Pool (the "Asset Pool Notice"). To the extent physically
      possible without impairing their inherent operability, assets of the
      Partnership which relate to more than one cable television system or to
      the Partnership as a whole shall be allocated either equally to every pool
      or on a 2/3:1/3 basis to the Partnership and Advance/Newhouse,
      respectively. Prior to making any distribution under this Section 8.2(b)
      or delivering the Asset Pool Notice, the Partnership or TWE, as
      applicable, shall contribute the assets comprising all developmental
      projects in which the Partnership has an interest and/or for which the
      Partnership has been charged (subject to the associated liabilities) to a
      separate legal entity or otherwise reconstitute such assets (subject to
      the associated liabilities) in a form (on terms agreed upon by
      Advance/Newhouse, TWE, and Paragon) that allows an allocation of such
      assets (subject to the associated liabilities) to Advance/Newhouse and the

<PAGE>   28
                                                                               2


      Partnership as described in the previous sentence. For the purposes of the
      foregoing, "Pro Rata Assets" shall mean those assets of the Partnership,
      including without limitation those Beneficial Assets and Subsidiary
      Beneficial Assets, that are readily divisible into three identical pools
      without any material diminution in the aggregate value of such assets
      resulting from such division (such as stock, partnership interests and
      similar investments). For purposes of the foregoing, "Asset Pool Criteria"
      shall mean (I) no Preferred Cluster Area may be allocated to more than one
      Asset Pool, except in accordance with the following: (A) if the number of
      Subscribers in the Preferred Cluster Area having the largest number of
      Subscribers exceeds the product of the Determined Percentage and the
      number of all Subscribers in all Preferred Cluster Areas, then such excess
      may be allocated to more than one Asset Pool; and (B) if the Preferred
      Cluster Area having the largest number of Subscribers has been allocated
      to more than one Asset Pool, and if the number of Subscribers in the
      Preferred Cluster Area having the second largest number of Subscribers
      exceeds 33-1/3% 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.

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

                        (iii) As promptly as practical following the
      determination of the Advance/Newhouse Asset Pool and the TWE Asset Pools
      in accordance with paragraph (ii), subject to obtaining any required
      governmental or other third-party consents or approvals, the Partnership
      shall distribute the cable television systems and other assets comprising
      the Advance/Newhouse Asset Pool to Advance/Newhouse in complete
      liquidation of its Common Partnership Units; provided that with respect to
      any assets in the Advance/Newhouse Pool that for Federal income tax
      purposes were deemed contributed to the Partnership within the immediately
      preceding Applicable Contribution Period by TWE or Paragon and with
      respect to any assets in the TWE Asset Pools that for Federal income tax

<PAGE>   29
                                                                               3


      purposes were deemed contributed to the Partnership within the immediately
      preceding Applicable Contribution Period by Advance/Newhouse, the Partners
      shall cooperate to cause such liquidation of the Advance/Newhouse Common
      Partnership Units to be effectuated in a manner, and agree to defer the
      distribution of assets to such time, as will minimize the taxes payable in
      connection with such liquidation.

                        (iv) As the cable television systems and other assets
      comprising the Advance/Newhouse Asset Pool are distributed or deemed
      distributed for Federal income tax purposes, (A) if there is an Excess Tax
      Amount with respect to Advance/Newhouse, the Partnership shall be
      allocated liabilities otherwise allocable to the Advance/Newhouse Pool
      (the "Excess Tax Amount Indebtedness") equal to the product of (y) one (1)
      minus the Advance/Newhouse Percentage Interest, and (z) such Excess Tax
      Amount of Advance/Newhouse, (B) Advance/Newhouse shall execute an
      assumption agreement pursuant to which it will assume (or to the extent
      necessary, in the case of clause (II) below, will refinance or repay) (I)
      all liabilities relating to, arising out of or otherwise attributable to
      the Advance/Newhouse Asset Pool (as reduced by the Excess Tax Amount
      Indebtedness, if any), and (II) liabilities otherwise allocable to the TWE
      Asset Pools (the "Restructuring Indebtedness") in an amount equal to the
      Restructuring Indebtedness Amount and will further agree to indemnify the
      Partnership for any losses the Partnership might suffer with respect to
      any of such liabilities, and (C) the Partnership shall agree to indemnify
      Advance/Newhouse for any losses Advance/Newhouse might suffer with respect
      to any liabilities relating to, arising out of or otherwise attributable
      to the TWE Asset Pools or the Excess Tax Amount Indebtedness. The
      assumption agreement to be executed by Advance/Newhouse shall contain the
      terms contained in the Assumption Agreement executed by the Partnership in
      accordance with Section 3.4(a) of the Contribution Agreement and the
      indemnity of Advance/Newhouse and the Partnership shall be in the form of
      Sections 8.2 and 8.3 of the Contribution Agreement. As Advance/Newhouse
      assumes liabilities relating to, arising out of or otherwise attributable
      to the Advance/Newhouse Asset Pool, Paragon 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.

                        (v) The "Restructuring Indebtedness Amount" shall equal
      the product of (A) the Advance/Newhouse Percentage Interest, and (B) the

<PAGE>   30
                                                                               4


      sum of (i) the Priority Return accrued and unpaid as of the date of
      distribution with respect to the Series A Preferred Partnership Units and
      the Series B Preferred Partnership Units held by Paragon, (ii) the
      redemption price for all outstanding Series A Preferred Partnership Units
      and Series B Preferred Partnership Units held by Paragon, and (iii) the
      sum of the Excess Tax Amount for the Partners other than Advance/Newhouse
      and other than the Satisfied Partner.

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

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

                              (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:

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

                                    (II) with respect to TWE, 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 First Transaction Agreement within the immediately preceding
      Applicable Contribution Period that are allocated to the Advance/Newhouse
      Asset Pool,

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

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

<PAGE>   31
                                                                               5


                              (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:

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

                                    (II) with respect to 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

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

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

<PAGE>   32
                                                                               6


      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.