S-4/A

As filed with the Securities and Exchange Commission on May 5, 2004

Registration No. 333-111423

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Amendment No. 2 to

Form S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

CCH II, LLC

and

CCH II Capital Corp.

(Exact name of registrants as specified in their charters)

Delaware	4841	030511293
Delaware	4841	134257703
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

12405 Powerscourt Drive

St. Louis, Missouri 63131

(314) 965-0555

(Address, including zip code, and telephone number,

including area code, of registrants’ principal executive offices)

Curtis S. Shaw, Esq.

Executive Vice President, General Counsel

and Secretary

12405 Powerscourt Drive

St. Louis, Missouri 63131

(314) 965-0555

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copies to:

Alvin G. Segel, Esq.

Irell & Manella LLP

1800 Avenue of the Stars, Suite 900

Los Angeles, California 90067-4276

(310) 277-1010

     Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

     If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

     If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

     If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

     The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PROSPECTUS

CCH II, LLC

CCH II Capital Corp.

Offer to Exchange

$1,601,375,000 in Aggregate Principal Amount

of 10.25% Senior Notes due 2010

which have been registered under the Securities Act

for any and all outstanding 10.25% Senior Notes due 2010

Issued by CCH II, LLC and CCH II Capital Corp.

•  This exchange offer expires at 5:00 p.m., New York City time, on                     , 2004, unless extended.

•  No public market currently exists for the original notes or the new notes. We do not intend to list the new notes on any securities exchange or to seek approval for quotation through any automated quotation system.

      CCH II, LLC and CCH II Capital Corp. hereby offer to exchange any and all of their $1,601,375,000 aggregate principal amount of their 10.25% Senior Notes due 2010 (the “new notes”), which have been registered under the Securities Act of 1933, as amended, pursuant to a Registration Statement of which this prospectus is part, for a like principal amount of their 10.25% Senior Notes due 2010 (the “original notes”) outstanding on the date hereof upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal (which together constitute the exchange offer). The terms of the new notes are identical in all material respects to those of the original notes, except for certain transfer restrictions and registration rights relating to the original notes. The new notes will be issued pursuant to, and entitled to the benefits of the indenture, dated as of September 23, 2003, among CCH II, LLC, CCH II Capital Corp. and Wells Fargo Bank, National Association, as trustee.

       You should carefully consider the risk factors beginning on page 13 of this prospectus before deciding whether or not to participate in the exchange offer.

       Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     , 2004.

TABLE OF CONTENTS

	Page
Summary		1
Risk Factors		13
Use of Proceeds		25
Capitalization		26
Unaudited Pro Forma Financial Information		28
Selected Historical Consolidated Financial Data		33
Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Business		61
Regulation and Legislation		80
Management		85
Beneficial Ownership of Securities		99
Certain Relationships and Related Transactions		102
Description of Certain Indebtedness		119
The Exchange Offer		142
Description of the Notes		150
Important United States Federal Income Tax Considerations		186
Plan of Distribution		191
Legal Matters		192
Experts		192
Where You Can Find More Information		192
Index to Financial Statements		F-1
OPINION OF IRELL & MANELLA LLP
OPINION OF IRELL & MANELLA LLP
AMENDED AND RESTATED CREDIT AGREEMENT
INDENTURE
PURCHASE AGREEMENT
INDEPENDENT AUDITORS CONSENT

ADDITIONAL INFORMATION

      We have filed with the Securities and Exchange Commission a registration statement on Form S-4 (File No. 333-111423) with respect to the securities we are offering for exchange. This prospectus, which forms part of this registration statement, does not contain all the information included in the registration statement, including its exhibits and schedules. For further information about us and the securities offered in this prospectus, you should refer to the registration statement and its exhibits and schedules. Statements we make in this prospectus about certain contracts or other documents are not necessarily complete. When we make such statements, we refer you to the copies of the contracts or documents that are filed as exhibits to the registration statement, because those statements are qualified in all respects by reference to those exhibits. The registration statement, including the exhibits and schedules, is on file at the offices of the Securities and Exchange Commission and may be inspected without charge. You may also obtain this information by writing or telephoning us at the following address and phone number: Charter Plaza, 12405 Powerscourt Drive, St. Louis, Missouri 63131. Our telephone number is (314) 965-0555. To obtain timely delivery, you must request this information no later than five business days before the date you must make your investment decision. Therefore, you must request this information no later than                , 2004.

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FORWARD-LOOKING STATEMENTS

      This prospectus includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, our plans, strategies and prospects, both business and financial including without limitation, the forward-looking statements set forth in this prospectus in “Summary — Business Strengths,” “— Business Strategy,” “— Charter Communications Operating, LLC Refinancing,” and “— Recent Events” and in “Business — Focus for 2004,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “— Liquidity and Capital Resources.” Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward-looking statements contained in this prospectus may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated” and “potential,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this prospectus are set forth in “Risk Factors” beginning on page 13. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement.

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SUMMARY

      This summary contains a general discussion of our business, the exchange offer and summary financial information. It does not contain all the information that you should consider before making a decision whether to tender your original notes in exchange for new notes. For a more complete understanding of the exchange offer, you should read this entire prospectus and the related documents to which we refer. Unless otherwise noted, all business data included in this summary is as of December 31, 2003 and does not give effect to subsequent asset dispositions. See “Recent Events — Asset Sales.”

      CCH II, LLC (“CCH II”) is an indirect subsidiary of Charter Communications, Inc. (“Charter”) CCH II is a direct subsidiary of CCH I, LLC, which is a direct subsidiary of Charter Communications Holdings, LLC. CCH II is a holding company with no operations of its own. CCH II Capital Corp. (“CCH II Capital”) is a wholly owned subsidiary of CCH II and was formed in connection with the issuance of the original notes.

      Unless stated otherwise, the discussion in this prospectus of our business and operations includes the business and operations of CCH II and its direct and indirect subsidiaries. The terms “we,” “us” and “our” refer to CCH II and its direct and indirect subsidiaries on a consolidated basis.

Our Business

      We are a broadband communications company operating in the United States, with approximately 12.4 million homes passed and approximately 6.54 million customers (as defined) at December 31, 2003. Through our broadband network of coaxial and fiber optic cable, we offer our customers traditional cable video programming (analog and digital, which we refer to as “video” service), high-speed cable Internet access (which we refer to as “high-speed data service”), advanced broadband cable services (such as video on demand (“VOD”), high definition television service, and interactive television) and, in some of our markets, we offer telephone service (which we refer to as “telephony”). “Homes passed” represents our estimate of the number of living units, such as single family homes, apartment units and condominium units passed by our cable distribution network. Homes passed excludes commercial units passed by our cable distribution network.

      We offer analog video service to all of our homes passed and we offer digital video service to approximately 99% of our homes passed. At December 31, 2003, we served approximately 6.43 million analog video customers, of which approximately 2.67 million are also digital video customers. We offer high-speed data service to approximately 87% of our homes passed and we serve approximately 1.57 million high-speed data customers (including approximately 105,800 who receive only high-speed data services). At December 31, 2003, we offered voice-over-Internet protocol (“VOIP”) telephony to approximately 33,000 homes passed in one market and traditional switch-based telephony to approximately 86,600 homes passed in another market. We provided telephony service to approximately 24,900 customers in these two markets as of that date.

      In March 2004 certain of our affiliates closed on a sale of cable systems serving approximately 230,800 analog video customers, 83,300 digital video customers and 37,800 high-speed data customers at December 31, 2003. See “Summary — Recent Events.”

      Our principal executive offices are located at Charter Plaza, 12405 Powerscourt Drive, St. Louis, Missouri 63131. Our telephone number is (314) 965-0555 and Charter has a website accessible at www.charter.com. The information posted on this website is not part of this prospectus and you should rely solely on the information contained in this prospectus and the related documents to which we refer herein when deciding whether or not to tender your original notes in exchange for new notes.

Business Strengths

Advanced Cable Infrastructure

      Since January 1, 2000, we have invested approximately $4 billion to upgrade the technological quality and capacity of our network. In 2003, we substantially completed the upgrade of our cable systems that we had commenced in 2000. Our systems upgrade increased our bandwidth capacity, enabling us to offer

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digital video service, two-way communication capability and other advanced services. In addition, our upgrade has enabled us to reduce the number of headend control centers, or “headends.” As a result of the upgrade, approximately 88% of our customers were served by headends serving at least 10,000 customers as of December 31, 2003. In 2003, we invested approximately $132 million to upgrade our systems. At December 31, 2003, approximately 92% of our customers were served by bandwidth of 550 megahertz or greater, approximately 87% were served by bandwidth of 750 megahertz or greater and approximately 87% of our plant was two-way enabled. Consequently, our network architecture is able to support our planned offerings of new services such as VOD, high definition television, telephony services, private network services and interactive features. As a result of the advanced design and infrastructure of our network, we do not believe our systems will require comprehensive upgrades in the foreseeable future. We expect that the majority of our future capital expenditures will be driven by revenue growth opportunities and the deployment of new services, including advanced digital set-top terminals with digital video recording capabilities, interactive services, and telephony services.

Attractive Advanced Service Offerings

      As of December 31, 2003, approximately 42% of our analog video customers subscribed to our digital video services, and approximately 15% of our estimated data-enabled homes passed subscribed to our high-speed data services. We expect to continue to expand our offerings of advanced services across our system, such as VOD services, high definition television, telephony, private network services and various interactive features. We believe that our ability to offer multiple service bundles that combine video offerings with high-speed data services and other advanced services will increase customer demand, satisfaction and retention.

Substantial Scale

      We believe that the size of our customer base and our network architecture enable us to rapidly and efficiently offer advanced products and services. We believe that we benefit from economies of scale through efficiently marketing our services, offering an attractive platform to advertisers, leveraging programming partnerships, and aggregating purchasing and procurement activities.

Strong and Experienced Management

      We believe that we have assembled an impressive management team with substantial industry experience and successful track records. This team is led by our President and Chief Executive Officer, Carl Vogel, and supported by our Chief Operating Officer, Maggie Bellville, our Chief Financial Officer, Mike Huseby and our Executive Vice President of Finance and Strategy, Derek Chang, among others. Our senior management team has significant experience in the subscription television industry and in marketing multi-product offerings and managing broadband infrastructures. During 2003, our senior management team undertook a reorganization of our workforce, which we believe has resulted in a more efficient and effective organizational design with significantly lower costs and increased communication, process standardization and operational effectiveness.

Business Strategy

      Our principal financial goal is to maximize our return on invested capital. To do so, we will focus on increasing revenues, improving customer retention and enhancing customer satisfaction by providing reliable, high-quality service offerings, superior customer service and attractive bundled offerings.

      Specifically, in 2004 we are focusing on:

•  increasing our sales and marketing efforts, especially through our national “Get Hooked” campaign, to grow revenues through promoting our advanced services and emphasizing what we believe to be competitive advantages over satellite, including one-stop shopping for video, voice, high-speed data and interactive services;

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•  enhancing our digital service with new content and continued deployment of advanced products such as digital video recorder (“DVR”) service, high definition television service, VOD and subscription video on demand (“SVOD,” VOD service for selected programming categories);

•  implementing what we believe is an attractive and competitive price point strategy for various levels and bundled packages of digital services;

•  continuing to improve customer service and satisfaction;

•  managing our operating costs by exercising discipline in capital and operational spending; and

•  identifying opportunities to continue to improve our balance sheet and liquidity.

      We believe that our high-speed data service will continue to provide a substantial portion of our revenue growth in the near future. We also plan to continue to expand our marketing of our high-speed data service to the business community, which we believe has shown an increasing interest in high-speed data service and private network services.

      We believe we offer our customers an excellent choice of services through an increased variety of bundled packages, particularly with respect to our digital video and high-speed data services. Our digital platform enables us to offer a significant number and variety of channels, and we offer customers the opportunity to choose among groups of channel offerings, including premium channels, and to combine chosen programming with other services such as high-speed data, high definition television (in selected markets) and VOD (in selected markets).

      We plan to continue our efforts to improve customer satisfaction and efficiency of customer service through consolidation of customer contact centers, which we have reduced from over 300 at December 31, 2000 to 53 at December 31, 2003. Our 20 largest customer contact centers now serve approximately 93% of our customers. We anticipate that this initiative will assist us in reducing customer contact rates and call abandonment rates, thereby improving customer satisfaction while reducing costs. We believe that consolidation and standardization of call centers enable us to provide a more consistent experience for our customers and to improve sales through the use of better trained, more efficient and sales-oriented customer service representatives.

      We continue to pursue opportunities to improve our balance sheet and liquidity, and the recent sale of $1.5 billion of senior second lien notes by our indirect subsidiary Charter Communications Operating, LLC (“Charter Operating”), together with the concurrent refinancing of its credit facilities, are our most recent examples of these efforts. See “Recent Events — Charter Communications Operating, LLC Refinancing.” In addition, since September 2003:

•  we sold non-core cable systems for $824 million, the proceeds of which we used to reduce our indebtedness;

•  we, together with our indirect parent companies, Charter and Charter Communications Holdings, LLC (“Charter Holdings”), exchanged approximately $1.9 billion of our parent companies’ outstanding senior notes, senior discount notes and convertible senior notes for approximately $1.6 billion of our new senior notes as a result of private debt-for-debt exchanges, resulting in a $294 million reduction of our parent companies’ consolidated debt outstanding; and

•  our direct subsidiary, CCO Holdings, sold $500 million of senior notes, the net proceeds of which were used to reduce balances under our indirect subsidiaries’ credit facilities.

      Going forward, we plan to continue to pursue opportunities to improve our balance sheet and liquidity when we believe that such opportunities will enhance the long-term strength of our balance sheet and business.

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Recent Events

Charter Communications Operating, LLC Refinancing

      In April 2004, our indirect subsidiary, Charter Operating, sold $1.5 billion of senior second lien notes and amended and restated its existing $5.1 billion credit facilities, among other things, to defer maturities and increase availability under those facilities to approximately $6.5 billion, consisting of a $1.5 billion revolving credit facility, a $2.0 billion 6-year term loan facility and a $3.0 billion 7-year term loan facility. Charter Operating used additional borrowings under the amended and restated credit facilities, together with proceeds from the sale of the notes, to refinance the credit facilities of its subsidiaries, CC VI Operating Company, LLC (“CC VI Operating”), Falcon Cable Communications, LLC (“Falcon”), and CC VIII Operating, LLC (“CC VIII Operating”), all in one concurrent transaction.

Outlook

      Because our first fiscal quarter results are not finalized, the information contained herein is based on preliminary information available to us on the date hereof and is therefore subject to change. See “Forward Looking Statements” on page (ii).

      The customer and financial information is presented on a pro forma basis, adjusted for the impact of divesting cable systems in Port Orchard, Washington, in October 2003, and of divesting cable systems in Florida, Pennsylvania, Maryland, Delaware and West Virginia, on March 1, 2004, as if these transactions had occurred on January 1, 2003. The divested systems, including the Salamanca, New York sale, which closed on April 30, 2004, served a total of approximately 253,000 analog video customers, 96,000 digital video customers and 51,000 high-speed data customers as of their respective dates of disposition or expected disposition. The unaudited pro forma information has been presented for comparative purposes and is not intended to provide any indication of what actual consolidated results of operations or customers would have been had these dispositions been completed as of the date assumed.

      In the first quarter of 2004, Charter increased marketing efforts that began in the third quarter of 2003, implementing new branding and promotional campaigns. The long-term objective of these efforts is to increase our revenues through deeper market penetration and growth in average monthly revenue per customer. First quarter 2004 net losses of analog video customers are expected to be 10,000 to 15,000 compared to a net loss of approximately 49,000 in the first quarter of 2003. First quarter 2004 net gains of digital video customers are expected to be 60,000 to 65,000 compared to net losses of approximately 32,000 in the first quarter of 2003. First quarter 2004 net gains of high-speed data customers are expected to be 120,000 to 125,000 compared to net gains of approximately 125,000 in the first quarter of 2003.

      We expect an increase in actual as-reported revenue of approximately 3% (approaching 5% on the pro forma basis described above) in the first quarter of 2004 compared to the first quarter of 2003.

      We believe capital expenditures for the first quarter of 2004 were $175 million to $200 million, which is lower than the fourth quarter of 2003 and higher than the first quarter 2003. For the full year 2004, capital expenditures are expected to be $850 million to $950 million.

Asset Sales

      In March 2004, Charter Holdings and several of our subsidiaries closed the sale of cable systems in Florida, Pennsylvania, Maryland, Delaware and West Virginia with Atlantic Broadband Finance, LLC. An additional closing for a cable system in Salamanca, New York occurred on April 30, 2004. At December 31, 2003, the systems being sold in these transactions, including the New York system, served approximately 230,800 analog video customers, 83,300 digital video customers and 37,800 high-speed data customers. Subject to post-closing contractual adjustments, the net proceeds from these transactions are expected to be approximately $733 million, of which (i) $10 million is currently held in an indemnity escrow account (with the unused portion thereof expected to be released to us by March 1, 2005) and (ii) approximately $9 million was received upon the consummation of the Salamanca, New York sale. The net proceeds received have been used to repay a portion of our subsidiaries’ credit facilities.

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Organizational Structure

      The chart below sets forth our organizational structure and that of our principal direct and indirect parent companies and subsidiaries. Equity ownership and voting percentages are approximate percentages as of December 31, 2003 on the pro forma basis described in “Unaudited Pro Forma Consolidated Financial Statements” and do not give effect to any exercise, conversion or exchange of options, preferred stock, convertible notes and other convertible or exchangeable securities that occurred after that date.

(1)	Charter acts as the sole manager of Charter Communications Holding Company, LLC and most of its limited liability company subsidiaries, including CCH II.
(2)	These membership units are held by Charter Investment, Inc. and Vulcan Cable III, Inc., each of which is 100% owned by Mr. Allen. They are exchangeable at any time on a one-for-one basis for shares of Charter common stock.
(3)	Represents 100% of the preferred membership interests in CC VIII, LLC, a subsidiary of CC V Holdings, LLC. An issue has arisen regarding the ultimate ownership of such CC VIII, LLC membership interests following Mr. Allen’s acquisition of those interests on June 6, 2003. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.”
(4)	CC V Holdings, LLC, the issuer of $113 million accreted value of senior discount notes, is a direct wholly owned subsidiary of CCO NR Holdings, LLC, and holds 100% of the common membership units of CC VIII, LLC. Mr. Allen through Charter Investment, Inc. holds 100% of the preferred membership units in CC VIII, LLC. CC VIII, LLC holds 100% of the equity of CC VIII Operating, LLC (a borrower at December 31, 2003 of $1.0 billion of bank debt now evidenced by a note issued to Charter Operating), which in turn holds 100% of the equity of a number of operating subsidiaries. One such operating subsidiary (CC Michigan, LLC) is a guarantor of the CC V Holdings senior discount notes.

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The Exchange Offer

Original Notes	10.25% Senior Notes due 2010, which we issued on September 23, 2003.
New Notes	10.25% Senior Notes due 2010, the issuance of which will be (or will have been) registered under the Securities Act of 1933.
Exchange Offer	We are offering to exchange the new notes for the original notes. The original notes may only be exchanged in multiples of $1,000 principal amount. To be exchanged, an original note must be properly tendered and accepted.
Resales Without Further Registration	We believe that the new notes issued pursuant to the exchange offer may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act of 1933, as amended, provided that:
	• you are acquiring the new notes issued in the exchange offer in the ordinary course of your business;
	• you have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, the distribution of the new notes issued to you in the exchange offer, and;
	• you are not our “affiliate,” as defined under Rule 405 of the Securities Act of 1933.
	Each of the participating broker-dealers that receives new notes for its own account in exchange for original notes that were acquired by such broker or dealer as a result of market-making or other activities must acknowledge that it will deliver a prospectus in connection with the resale of the new notes.
Expiration Date	5:00 p.m., New York City time, on                      , 2004 unless we extend the exchange offer.
Exchange and Registration Rights Agreement	You have the right to exchange the original notes that you hold for new notes with substantially identical terms pursuant to an exchange and registration rights agreement. This exchange offer is intended to satisfy these rights. Once the exchange offer is complete, you will no longer be entitled to any exchange or registration rights with respect to your original notes and the new notes will not provide for additional interest in connection with registration defaults.
Accrued Interest on the New Notes and Original Notes	The new senior notes will bear interest from March 15, 2004 (the date of the last interest payment in respect of the original notes). Holders of original notes that are accepted for exchange will be deemed to have waived the right to receive any payment in respect of interest on such original notes accrued to the date of issuance of the new notes.

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Conditions to the Exchange Offer	The exchange offer is conditioned upon certain customary conditions which we may waive and upon compliance with securities laws.
Procedures for Tendering Original Notes	Each holder of original notes wishing to accept the exchange offer must:
	• complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal; or
	• arrange for The Depository Trust Company to transmit certain required information to the exchange agent in connection with a book-entry transfer.
	You must mail or otherwise deliver such documentation together with the original notes to the exchange agent.
Special Procedures for Beneficial Holders	If you beneficially own original notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your original notes in the exchange offer, you should contact such registered holder promptly and instruct them to tender on your behalf. If you wish to tender on your own behalf, you must, before completing and executing the letter of transmittal for the exchange offer and delivering your original notes, either arrange to have your original notes registered in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time.
Guaranteed Delivery Procedures	You must comply with the applicable procedures for tendering if you wish to tender your original notes and:
	• time will not permit your required documents to reach the exchange agent by the expiration date of the exchange offer; or
	• you cannot complete the procedure for book-entry transfer on time; or
	• your original notes are not immediately available.
Withdrawal Rights	You may withdraw your tender of original notes at any time prior to 5:00 p.m., New York City time, on the date the exchange offer expires.
Failure to Exchange Will Affect You Adversely	If you are eligible to participate in the exchange offer and you do not tender your original notes, you will not have further exchange or registration rights and your original notes will continue to be subject to some restrictions on transfer. Accordingly, the liquidity of your original notes will be adversely affected.
Material United States Federal Income Tax Considerations	The disclosure in this prospectus represents our legal counsel’s opinion as to the material United States federal income tax consequences of participating in the exchange offer and in

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connection with the ownership and disposition of the new notes. The exchange of original notes for new notes pursuant to the exchange offer will not result in a taxable event. Accordingly, it is our legal counsel’s opinion that:

	• no gain or loss will be realized by a U.S. holder upon receipt of a new note;
	• a holder’s holding period for new notes will include the holding period for original notes; and
	• the adjusted tax basis of the new notes will be the same as the adjusted tax basis of the original notes exchanged at the time of such exchange.
	Irell & Manella LLP has rendered the above-referenced opinion in connection with the exchange offer. See “Important United States Federal Income Tax Considerations.”
Exchange Agent	Wells Fargo Bank, National Association is serving as exchange agent.
Use of Proceeds	We will not receive any proceeds from the exchange offer.

Summary Terms of the New Notes

Issuers	CCH II and CCH II Capital.
Notes Offered	$1,601,375,000 aggregate principal amount of 10.25% Senior Notes due 2010.
Maturity	September 15, 2010.
Interest Payment Dates	March 15 and September 15 of each year, beginning on September 15, 2004 (the last interest payment date for the original notes having been March 15, 2004).
Forms and Terms	The form and terms of the new notes will be the same as the form and terms of the original notes except that:
	• the new notes will bear a different CUSIP number from the original notes;
	• the new notes have been registered under the Securities Act of 1933 and, therefore, will not bear legends restricting their transfer; and
	• you will not be entitled to any exchange or registration rights with respect to the new notes and the new notes will not provide for additional interest in connection with registration defaults.
	The new notes will evidence the same debt as the original notes. They will be entitled to the benefits of the indenture governing the original notes and will be treated under the indenture as a single class with the original notes.
Ranking	The new notes will be:
	• senior unsecured securities of the issuers;

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	• effectively subordinated to any of the issuers’ secured indebtedness;
	• equal in right of payment with all of the issuers’ existing and future senior unsecured debt;
	• senior in right of payment to all of the issuers’ future subordinated debt; and
	• structurally subordinated to all indebtedness and other liabilities of the issuers’ subsidiaries, including indebtedness under our subsidiaries’ credit facilities, the CCO Holdings notes and the Charter Operating notes.
	As of December 31, 2003, the indebtedness of CCH II and its subsidiaries totaled approximately $9.6 billion.
Optional Redemption	The new notes may be redeemed in whole or in part at our option at any time on or after September 15, 2008 at the redemption prices specified in this prospectus under “Description of Notes — Optional Redemption.”
	At any time prior to September 15, 2006, we may redeem up to 35% of the notes to the extent that we have received proceeds of one or more public equity offerings at a price equal to 110.25% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 65% of the original aggregate principal amount of the notes issued remains outstanding after the redemptions.
Restrictive Covenants	The indenture governing the original notes and the new notes will, among other things, restrict our ability and the ability of certain of our subsidiaries to:

• pay dividends on stock or repurchase stock;

• make investments;

• borrow money;

• grant liens;

• sell all or substantially all of our assets or merge with or into other companies;

• use the proceeds from sales of assets and subsidiaries’ stock;

• in the case of our restricted subsidiaries, create or permit to exist dividend or payment restrictions; and

• engage in certain transactions with affiliates.

	These covenants are subject to important exceptions and qualifications as described under “Description of Notes — Certain Covenants.”
Change of Control	Following a Change of Control, as defined in “Description of Notes — Certain Definitions,” we will be required to offer to purchase all of the new notes at a purchase price of 101% of

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	their principal amount plus accrued and unpaid interest, if any, to the date of purchase thereof.
Absence of Established Markets for the Notes	The new notes are new issues of securities, and currently there are no markets for them. We do not intend to apply for the new notes to be listed on any securities exchange or to arrange for any quotation system to quote them. Accordingly, we cannot assure you that liquid markets will develop for the new notes.

      You should carefully consider all of the information in this prospectus. In particular, you should evaluate the information beginning on page 13 under “Risk Factors” for a discussion of risks associated with an investment in the new notes.

      For more complete information about the new notes, see the “Description of Notes” section of this prospectus.

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Summary Consolidated Financial Data

      In March 2003, CCH II was formed. CCH II is a holding company whose primary assets are equity interests in our cable operating subsidiaries. Charter Holdings entered into a series of transactions and contributions which had the effect of (i) creating CCH II, CCH II Capital, CCH I, LLC, our direct parent, and our subsidiary, CCO Holdings, LLC; and (ii) combining and contributing all of Charter Holdings’ interest in cable operations not previously owned by Charter Communications Operating, LLC to Charter Communications Operating, LLC. These transactions were accounted for as a reorganization of entities under common control. Accordingly, the financial information for CCH II combines the historical financial condition, cash flows and results of operations of Charter Communications Operating, LLC, and the operations of subsidiaries contributed by Charter Holdings for all periods presented.

      The following table presents summary financial and other data for CCH II and its subsidiaries, and has been derived from the audited consolidated financial statements of CCH II and its subsidiaries for each of the three years in the period ended December 31, 2003, which have been audited by KPMG LLP, independent auditors. The following information should be read in conjunction with “Selected Historical Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical consolidated financial statements and related notes included elsewhere in this prospectus.

				Year Ended December 31,
				2001			2002			2003
				(dollars in millions, except per customer data)
Statement of Operations Data:
	Revenues:
		Video		$	2,971		$	3,420		$	3,461
		High-speed data			148			337			556
		Advertising sales			197			302			263
		Commercial			123			161			204
		Other			368			346			335
			Total revenues		3,807			4,566			4,819
	Costs and Expenses:
		Operating (excluding depreciation and amortization)			1,486			1,807			1,952
		Selling, general and administrative			826			963			940
		Depreciation and amortization			2,693			1,439			1,479
		Impairment of franchises			—			4,638			—
		Gain on sale of system			—			—			(21	)
		Option compensation expense (income), net			(5	)		5			4
		Special charges, net			18			36			21
		Unfavorable contracts and other settlements			—			—			(72	)
			Total costs and expenses		5,018			8,888			4,303
	Income (loss) from operations				(1,211	)		(4,322	)		516
	Interest expense, net				(525	)		(512	)		(545	)
	Gain (loss) on derivative instruments and hedging activities, net				(50	)		(115	)		65
	Other, net				(52	)		3			(9	)
	Income (loss) before minority interest, income taxes and cumulative effect of accounting change				(1,838	)		(4,946	)		27
	Minority interest				(16	)		(16	)		(29	)

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		Year Ended December 31,
		2001			2002			2003
		(dollars in millions,
		except per customer data)
	Loss before income taxes and cumulative effect of accounting change		(1,854	)		(4,962	)		(2	)
	Income tax benefit (expense)		27			216			(13	)
	Loss before cumulative effect of accounting change		(1,827	)		(4,746	)		(15	)
	Cumulative effect of accounting change, net of tax		(24	)		(540	)		—
	Net loss	$	(1,851	)	$	(5,286	)	$	(15	)
Other Financial Data:
	Cash flows from operating activities	$	975		$	1,325		$	1,321
	Cash flows from investing activities		(4,629	)		(2,285	)		(757	)
	Cash flows from financing activities		3,532			1,270			(789	)
	Capital expenditures		2,795			2,095			804
	Ratio of earnings to cover fixed charges(a)		NA			NA			1.05
	Deficiency of earnings to cover fixed charges(a)	$	1,838		$	4,946			NA
Operating Data
(end of period, except for average)(b):
Analog video customers						6,578,800			6,431,300
Digital customers						2,682,800			2,671,900
Residential high-speed data customers						1,138,100			1,565,600

(a)	Earnings include net loss plus fixed charges. Fixed charges consist of interest expense and an estimated interest component of rent expense.
(b)	Please see the footnotes to the customer statistics table on pages 63-64 for definitions of the terms contained in this section.
(c)	Average monthly revenue per analog video customer is calculated as total annual revenue divided by twelve divided by the average number of analog video customers during the respective year.

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RISK FACTORS

      An investment in the new notes entails the following risks. You should carefully consider these risk factors, as well as the other information contained in this prospectus, before making a decision to continue your investment in the notes or to tender your original notes for the new notes.

Risks Related to the Exchange Offer and the Notes

      We cannot assure you that active trading markets will develop for the new notes.

      The new notes will be new securities for which there is currently no public market. We do not intend to apply for listing of the new notes on any securities exchange or for quotation through The Nasdaq Stock Market. The liquidity of the trading markets in the new notes, and the market prices quoted for the new notes, may be adversely affected by changes in the overall market for high-yield securities generally or the interest of securities dealers in making markets in the new notes and by changes in our financial performance or prospects or in the prospects for companies in our industry generally. As a result, we cannot assure you that active trading markets will develop for the new notes.

      If you do not exchange your original notes for new notes, you will continue to have restrictions on your ability to resell them.

      The original notes were not registered under the Securities Act of 1933 or under the securities laws of any state and may not be resold, offered for resale or otherwise transferred unless they are subsequently registered or resold pursuant to an exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. If you do not exchange your original notes for new notes pursuant to the exchange offer, you will not be able to resell, offer to resell or otherwise transfer the original notes unless they are registered under the Securities Act of 1933 or unless you resell them, offer to resell them or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act of 1933. In addition, once the exchange offer has terminated, we will no longer be under an obligation to register the original notes under the Securities Act of 1933 except in the limited circumstances provided in the registration rights agreement. In addition, to the extent that original notes are tendered for exchange and accepted in the exchange offer, any trading market for the untendered and tendered but unaccepted original notes could be adversely affected.

Risks Related to Our Significant Indebtedness and that of Our Subsidiaries and Our Parent Companies

          We, our subsidiaries and our parent companies have a significant amount of existing debt and may incur significant additional debt, including secured debt, in the future, which could adversely affect our financial health.

      We, our subsidiaries and our parent companies have a significant amount of debt and may (subject to applicable restrictions in our debt instruments) incur additional debt in the future. As of December 31, 2003, our long-term debt was approximately $9.6 billion, and our member’s equity was approximately $9.0 billion. As of December 31, 2003, on the pro forma basis described in “Unaudited Pro Forma Consolidated Financial Statements,” our long-term debt would have been approximately $9.0 billion, our member’s equity would have been approximately $9.0 billion and the deficiency of earnings to cover fixed charges for the year ended December 31, 2003 would have been approximately $293 million.

      As of December 31, 2003, Charter had outstanding approximately $774 million aggregate principal amount of convertible senior notes, which mature in 2005 and 2006, and Charter Holdings had outstanding approximately $8.9 billion aggregate principal amount of senior notes and senior discount notes, some of which mature in 2007 ($451 million) and the remainder of which mature in 2009 through 2012. The maturities of these obligations are set forth in “Description of Certain Indebtedness — Parent Company Debt.” All of those entities will need to raise additional capital or receive distributions or payments from us in order to satisfy their debt obligations. However, because of their significant indebtedness, the ability of our parent companies to raise additional capital at reasonable rates is uncertain. You should note that

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the indenture governing the notes generally will permit us to provide funds to Charter and Charter Holdings to pay interest on their debt.

      Our ability to service our and our parent companies’ and our subsidiaries’ debt (including payments on the notes), in addition to funding our operations and planned capital expenditures, will depend in part on our ability to generate cash flow. Our ability to generate cash flow is dependent on many factors enumerated elsewhere herein, including:

•  our future operating performance;

•  the demand for our products and services;

•  general economic conditions and conditions affecting customer and advertiser spending;

•  competition; and

•  legal and regulatory factors affecting our business.

      Some of these factors are beyond our control. If we are unable to generate sufficient cash flow, we and our parent companies may not be able to service and repay our and their debt and fund our other liquidity and capital needs.

      The breach of any covenants or obligations in the indenture governing the notes, or in the indentures governing our subsidiaries’ debt or the debt of our parent companies or in the Charter Operating credit facilities will result in a default under the applicable debt agreement or instrument and could trigger acceleration of the related debt, which in turn could trigger defaults under other agreements governing our long-term indebtedness. In addition, the lenders under the Charter Operating credit facilities and the holders of the Charter Operating notes could foreclose on their collateral, which includes equity interests in our subsidiaries, and could also exercise other rights of secured creditors. Any default under the Charter Operating credit facilities or the indenture governing the notes or the indentures governing our subsidiaries’ debt or the debt of our parent companies could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our notes. See “Description of Certain Indebtedness.”

      Any failure by our indirect parent companies to satisfy their significant debt obligations could have a material adverse effect on us.

      Because Charter is our sole manager, and because we are indirectly wholly owned by Charter Holdings, their financial or liquidity problems could cause serious disruption to our business and could have a material adverse effect on our operations and results. A failure by Charter Holdings to satisfy certain debt payment obligations or a bankruptcy filing with respect to Charter Holdings would give the lenders under the Charter Operating credit facilities the right to accelerate the payment obligations under these facilities. Any such acceleration would be a default under the indenture governing the notes. In addition, if Charter or Charter Holdings, were to default under their respective debt obligations and that default were to result in a change of control of any of them (whether through a bankruptcy, receivership or other reorganization, or otherwise), such a change of control could result in an event of default under the Charter Operating credit facilities and our subsidiaries’ outstanding notes and require a change of control repurchase offer under the notes and our parent companies’ and subsidiaries’ outstanding notes.

      Furthermore, the Charter Operating credit facilities provide that an event of default would occur if certain of Charter Operating’s parent companies have indebtedness in excess of $500 million aggregate principal amount which remains undefeased three months prior to its final maturity. The parent company indebtedness subject to this provision will mature in 2009, 2010 and 2011, respectively. If those parent companies are unable to refinance or repay their indebtedness, the lenders under the Charter Operating credit facilities could accelerate the obligations under those credit facilities and exercise other enforcement rights.

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      Our, our parent companies’ and our subsidiaries’ substantial debt could have additional consequences to you by limiting our operations and our ability to react to changes in our business.

      Our, our parent companies’ and our subsidiaries’ significant amounts of debt could have other important consequences to you. For example, the debt could:

•  require us to dedicate a significant portion of our cash flow from operating activities to payments on our, our parent companies’ and our subsidiaries’ debt, which will reduce our funds available for working capital, capital expenditures and other general corporate expenses;

•  limit our flexibility in planning for, or reacting to, changes in our business, the cable and telecommunications industries and the economy at large;

•  place us at a disadvantage compared to our competitors that have proportionately less debt;

•  adversely affect our relationships with customers and suppliers;

•  limit our ability to borrow additional funds in the future, if we need them, due to applicable financial and restrictive covenants; and

•  make us vulnerable to interest rate increases, because a portion of our subsidiaries’ borrowings are, and will continue to be, at variable rates of interest.

      These practical limitations could adversely affect our growth, financial condition and results of operations.

          The agreements and instruments governing our debt and the debt of our subsidiaries and our parent companies contain restrictions and limitations that could significantly affect our ability to operate our business and adversely affect you, as the holders of the original or the new notes.

      The Charter Operating credit facilities, the indentures governing our parent companies’ and subsidiaries’ public debt and the indenture governing the original and the new notes contain a number of significant covenants that could adversely affect the holders of the original and the new notes and our ability to operate our business. These covenants will restrict our and our subsidiaries’ ability to:

•  pay dividends or make other distributions;

•  make certain investments or acquisitions;

•  enter into related party transactions;

•  dispose of assets or merge;

•  incur additional debt;

•  repurchase or redeem equity interests and debt;

•  grant liens; and

•  pledge assets.

      Furthermore, the Charter Operating credit facilities require our subsidiaries to maintain specified financial ratios and meet financial tests. Charter Operating’s ability to comply with these provisions may be affected by events beyond our control.

      The breach of any covenants or obligations in the foregoing indentures or credit facilities will result in a default under the applicable debt agreement or instrument and could trigger acceleration of the related debt, which in turn could trigger defaults under other agreements governing our long-term indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Result of Operations — Liquidity and Capital Resources.” In addition, the lenders under the Charter Operating credit facilities and the holders of the Charter Operating senior second lien notes could foreclose on their collateral, which

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includes equity interests in our subsidiaries, and could also exercise other rights of secured creditors. Any default under the Charter Operating credit facilities or the indenture governing the notes or the indentures governing our subsidiaries’ debt or the debt of our parent companies could adversely affect our growth, our financial condition and our results of operations and our ability to make payments on the notes.

      We may not generate sufficient cash flow to fund our capital expenditures, ongoing operations and debt obligations, including our obligations under the original and the new notes, which could have a material adverse effect on you as the holders of the original or the new notes.

      Our ability to service our debt (including payments on the notes) and to fund our subsidiaries’ planned capital expenditures and our subsidiaries’ ongoing operations will depend on our ability to generate cash flow. Our ability to generate cash flow is dependent on many factors, including:

•  our future operating performance;

•  the demand for our products and services;

•  general economic conditions and conditions affecting customer and advertiser spending;

•  competition; and

•  legal and regulatory factors affecting our business.

      Some of these factors are beyond our control. If we are unable to generate sufficient cash flow, we may not be able to repay our debt, grow our business, respond to competitive challenges or fund our other liquidity and capital needs.

      Charter Operating may not be able to access funds under its credit facilities if it fails to satisfy the covenant restrictions in its credit facilities, which could adversely affect our financial health and our ability to conduct our business.

      Our subsidiaries have historically relied on access to credit facilities in order to fund operations and to service parent company debt, and we expect such reliance to continue in the future. Unused availability under the Charter Operating credit facilities is approximately $1.1 billion as of the closing of the amendment and restatement of such credit facilities on April 27, 2004. See “Summary — Charter Communications Operating, LLC Refinancing.” However, the amount available from time to time in the future will depend on a number of factors, including how much has previously been borrowed under the facilities and our subsidiaries’ ability to comply with financial ratios and other covenants and conditions to borrowing in those facilities. While we expect to remain in compliance with such covenants and conditions, our subsidiaries may not be able to comply with all of the financial ratios and restrictive covenants in those facilities. An event of default, such as the failure to maintain the applicable required financial ratios, would prevent additional borrowing under our subsidiary credit facilities, which could materially adversely impact our ability to operate our business and to make payments under our debt instruments. See “Description of Certain Indebtedness — Credit Facilities.”

      We are essentially a holding company. The notes are structurally subordinated to all liabilities of our subsidiaries.

      Our sole assets are our equity interests in, and intercompany obligations owing to us from, our subsidiaries. Our operating subsidiaries are separate and distinct legal entities and are not obligated to make funds available to us for payment of the notes or other obligations in the form of loans, distributions or otherwise. Our direct or indirect subsidiaries include obligors under other senior notes and the Charter Operating credit facilities. Accordingly, the notes will be structurally subordinated to all of the debt of those subsidiaries. The total principal amount (or, if applicable, accreted amount) of such indebtedness of all our subsidiaries is $7.4 billion on the pro forma basis described in “Unaudited Pro Forma Consolidated Financial Statements.”

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      We may not have the ability to raise the funds necessary to fulfill our obligations under the original and the new notes following a change of control, which would place us in default under the indenture governing the original and the new notes.

      Under the indenture governing the original and the new notes, upon the occurrence of specified change of control events, we will be required to offer to repurchase all of the outstanding original and new notes. However, we may not have sufficient funds at the time of the change of control event to make the required repurchases of the original and the new notes. In addition, a change of control would require the repayment of borrowings under credit facilities and publicly held debt of our subsidiaries and our parent companies. Our failure to make or complete an offer to repurchase the original and the new notes would place us in default under the indenture governing the original and the new notes.

      If we do not fulfill our obligations to you under the new notes, you will not have any recourse against Charter, Charter Communications Holding Company, LLC, Charter Holdings, Mr. Allen or their affiliates.

      None of our direct or indirect equity holders, directors, officers, employees or affiliates, including, without limitation, Charter, Charter Communications Holding Company, LLC (“Charter Holdco”), Charter Holdings, CCH I, LLC and Mr. Allen, will be an obligor or guarantor under the new notes. The indenture governing the original and the new notes expressly provides that these parties will not have any liability for our obligations under the original and the new notes or the indenture governing the original and the new notes. If we do not fulfill our obligations to you under the original or the new notes, you will have no recourse against any of our direct or indirect equity holders, directors, officers, employees or affiliates including, without limitation, Charter, Charter Holdco, Charter Holdings, CCH I, LLC and Mr. Allen.

There is no expectation that Paul G. Allen will fund our operations or obligations in the future.

      In connection with his acquisition of Charter and our subsequent acquisitions, Paul G. Allen and his affiliates have contributed funds or provided other financial support to Charter and Charter Holdco, which have in turn been contributed or lent to us. There is no expectation that Mr. Allen or his affiliates will contribute or lend funds to any of our direct or indirect parent companies, us or any of our subsidiaries in the future.

Risks Related to Our Business

          We operate in a very competitive business environment, which affects our ability to attract and retain customers and can adversely affect our business and operations.

      The industry in which we operate is highly competitive. In some instances, we compete against companies with fewer regulatory burdens, easier access to financing, greater personnel resources, greater brand name recognition and longer-established relationships with regulatory authorities and customers. Increasing consolidation in the cable industry and the repeal of certain ownership rules may provide additional benefits to certain of our competitors, either through access to financing, resources or efficiencies of scale.

      Our principal competitor for video services throughout our territory is direct broadcast satellite television services, or DBS, and, in markets where it is available, our principal competitor for data services is digital subscriber line service, or DSL. Competition from DBS, including intensive marketing efforts and aggressive pricing, has had an adverse impact on our ability to retain customers. Our major DBS competitors continue to offer a greater variety of channel packages than do we, and are especially competitive at the lower end pricing and have been intensively marketing their services. In addition, certain DBS providers are now providing two-way high-speed Internet access services, which are competing with our ability to provide bundled services to our customers. Local telephone companies and electric utilities also are permitted to compete in this area and they may do so in the future. The subscription television industry also faces competition from free broadcast television and from other

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communications and entertainment media. Further loss of customers to DBS or other alternative video and data services could have a material negative impact on our business.

      In order to attract new customers, from time to time we may make promotional offers, including offers of temporarily reduced-price or free service. These promotional programs result in significant advertising, programming and operating expenses, and also require us to make capital expenditures to acquire additional digital set-top terminals. Customers who subscribe to our services as a result of these offerings may not remain customers for any significant period of time following the end of the promotional period. In addition, these customers may be less likely to pay us for our services. A failure to retain customers added through promotional offerings or to collect the amounts they owe us could have an adverse effect on our business and financial results.

      With respect to our high-speed data services, we face competition, including intensive marketing efforts and aggressive pricing, from telephone companies and other providers of “dial-up” and DSL. DSL service is competitive with high-speed data service over cable systems. Several telephone companies (which already have telephone lines into the household, an existing customer base and other operational functions in place) and other companies offer DSL service.

      Mergers, joint ventures and alliances among franchised, wireless or private cable operators, satellite television providers, local exchange carriers and others, and the repeal of certain ownership rules may provide additional benefits to some of our competitors, either through access to financing, resources or efficiencies of scale, or the ability to provide multiple services in direct competition with us.

      We cannot assure you that the recent upgrades of our cable systems will allow us to compete effectively. Additionally, as we expand our offerings to include other telecommunications services, and to introduce new and enhanced services, we will be subject to competition from other providers of the services we offer. We cannot predict the extent to which competition may affect our business and operations in the future. See “Business — Competition.”

      Charter is currently the subject of certain lawsuits and government investigations, the unfavorable outcome of which could adversely affect our business and financial condition.

      A number of putative federal class action lawsuits have been filed against Charter and certain of its former and present officers and directors alleging violations of securities laws, which have been consolidated for pretrial purposes. In addition, a number of other lawsuits have been filed against Charter in other jurisdictions. A shareholders derivative suit was filed in the U.S. District Court for the Eastern District of Missouri, and several class action lawsuits were filed in Delaware state court against Charter and certain of its directors and officers, although orders of dismissal without prejudice have been entered in each of Delaware class actions. Finally, two shareholders derivative suits were filed in Missouri state court against Charter, its then current directors and its former independent auditor; these actions were consolidated during the fourth quarter of 2002. A third substantively identical state court derivative case has been filed which has not yet been consolidated, but which we expect will be consolidated in the future. The federal shareholders derivative suit, the Delaware class actions, the consolidated state derivative suit and the state court derivative suit each allege that the defendants breached their fiduciary duties.

      In August 2002, Charter became aware of a grand jury investigation being conducted by the U.S. Attorney’s Office for the Eastern District of Missouri into certain of its accounting and reporting practices focusing on how Charter reported customer numbers, and its reporting of amounts received from digital set-top terminal suppliers for advertising. The U.S. Attorney’s Office has publicly stated that Charter is not currently a target of the investigation. Charter has also been advised by the U.S. Attorney’s Office that no member of its board of directors, including its Chief Executive Officer, is a target of the investigation. On July 24, 2003, a federal grand jury charged four former officers of Charter with conspiracy and mail and wire fraud, alleging improper accounting and reporting practices focusing on revenue from digital set-top terminal suppliers and inflated customer account numbers. On July 25, 2003, one of the former officers who was indicted entered a guilty plea. Charter has advised us that it is fully cooperating with the investigation.

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      On November 4, 2002, Charter received an informal, non-public inquiry from the staff of the SEC. The SEC has subsequently issued a formal order of investigation dated January 23, 2003, and subsequent document and testimony subpoenas. The investigation and subpoenas generally concern Charter’s prior reports with respect to its determination of the number of customers and various of its accounting policies and practices including its capitalization of certain expenses and dealings with certain vendors, including programmers and digital set-top terminal suppliers. Charter has advised us that it is fully cooperating with the SEC staff. See “Business — Legal Proceedings” for a description of the litigation and investigations.

      Due to the inherent uncertainties of litigation and investigations, Charter is unable to predict the outcome of the lawsuits and the government investigations described above. An unfavorable outcome in any of these lawsuits or the government investigations could have a material adverse effect on our consolidated financial condition, results of operations or our liquidity, including our ability to comply with our debt covenants.

      In addition, Charter’s restatement of its 2000, 2001 and 2002 financial statements may lead to additional allegations in the pending securities class and shareholders derivative actions against Charter, or to additional claims being filed or to investigations being expanded or commenced. To the extent that the foregoing matters are not covered by insurance, CCH II’s limited liability company agreement and management agreements may require us to indemnify or reimburse Charter and its directors and certain current and former officers in connection with such matters. These proceedings, and Charter’s actions in response to these proceedings, could result in significant costs, substantial potential liabilities and the diversion of management’s attention, and could adversely affect our ability to execute our business and financial strategies.

      We have a history of net losses and expect to continue to experience net losses. Consequently, we may not have the ability to finance future operations.

      We have had a history of net losses and expect to continue to report net losses for the foreseeable future. Our net losses are principally attributable to insufficient revenue to cover the interest costs we incur because of our high level of debt, the depreciation expenses that we incur resulting from the capital investments we have made in our cable properties, and the amortization and impairment of our franchise intangibles. We expect that these expenses (other than amortization and impairment of franchises) will remain significant, and we therefore expect to continue to report net losses for the foreseeable future. We reported losses before cumulative effect of accounting change of $1.8 billion for 2001, $4.7 billion for 2002 and $15 million for 2003. Continued losses would reduce our cash available from operations to service our indebtedness, as well as limit our ability to finance our operations in the future.

      We may not have the ability to pass our increasing programming costs on to our customers, which would adversely affect our cash flow and operating margins.

      Programming has been, and is expected to continue to be, our largest operating expense item. In recent years, the cable industry has experienced a rapid escalation in the cost of programming, particularly sports programming. This escalation may continue, and because of market and competitive factors, we may not be able to pass programming cost increases on to our customers. As measured by programming costs, and excluding premium services (substantially all of which were renegotiated and renewed in 2003) as of February 19, 2004, approximately 34% of our current programming contracts are scheduled to expire by the end of 2004, and approximately another 11% by the end of 2005. There can be no assurance that these agreements will be renewed on favorable or comparable terms. The inability to fully pass programming cost increases on to our customers would have an adverse impact on our cash flow and operating margins.

      If our required capital expenditures exceed our projections, we may not have sufficient funding, which could adversely affect our growth, financial condition and results of operations.

      During 2003, we spent approximately $804 million on capital expenditures. During 2004 we expect to spend approximately $850 million to $950 million on capital expenditures. The actual amount of our capital expenditures will depend on the level of growth in high-speed data customers and in the delivery of other advanced services, as well as the cost of introducing any new services. We may need additional

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capital if there is accelerated growth in high-speed data customers or in the delivery of other advanced services. If we cannot obtain such capital from increases in our cash flow from operating activities, additional borrowings or other sources, our growth, financial condition and results of operations could suffer materially.

      Our inability to respond to technological developments and meet customer demand for new products and services could limit our ability to compete effectively.

      Our business is characterized by rapid technological change and the introduction of new products and services. We cannot assure you that we will be able to fund the capital expenditures necessary to keep pace with unanticipated technological developments, or that we will successfully anticipate the demand of our customers for products and services requiring new technology. Our inability to maintain and expand our upgraded systems and provide advanced services in a timely manner, or to anticipate the demands of the marketplace, could adversely affect our ability to attract and retain customers. Consequently, our growth, financial condition and results of operations could suffer materially.

      We may not be able to carry out our strategy to improve operating results by standardizing and streamlining operations and procedures.

      Over the last several years, we have experienced rapid growth through acquisitions of a number of cable operators and the rapid rebuild and rollout of advanced services. Our future success will depend in part on our ability to standardize and streamline our operations. The failure to implement a consistent corporate culture and management, operating or financial systems or procedures necessary to standardize and streamline our operations and effectively operate our enterprise could have a material adverse effect on our business, results of operations and financial condition.

      The loss of any of our key executives could adversely affect our ability to manage our business.

      Our success is substantially dependent upon the retention and the continued performance of our key executives, including Carl Vogel (President and Chief Executive Officer), Mike Huseby (Executive Vice President and Chief Financial Officer), Derek Chang (Executive Vice President of Finance and Strategy), and Maggie Bellville (Executive Vice President and Chief Operating Officer). The loss of the services of any of our key executives could adversely affect our growth, financial condition and results of operations.

      Malicious and abusive Internet practices could impair our high-speed data services.

      Our high-speed data customers utilize our network to access the Internet and, as a consequence, we or they may become victim to common malicious and abusive Internet activities, such as unsolicited mass advertising (i.e., “spam”) and dissemination of viruses, worms and other destructive or disruptive software. These activities could have adverse consequences on our network and our customers, including degradation of service, excessive call volume to call centers and damage to our or our customers’ equipment and data. Significant incidents could lead to customer dissatisfaction and, ultimately, loss of customers or revenue, in addition to increased costs to us to service our customers and protect our network. Any significant loss of high-speed data customers or revenue or significant increase in costs of serving those customers could adversely affect our growth, financial condition and results of operations.

Risks Related to Mr. Allen’s Controlling Position

      The failure by Mr. Allen to maintain a minimum voting and economic interest in us could trigger a change of control default under our subsidiary’s credit facilities.

      The Charter Operating credit facilities provide that the failure by Mr. Allen to maintain a 35% direct or indirect voting interest in the applicable borrower would result in a change of control default. Such a default could result in the acceleration of repayment of the new notes, borrowings under Charter Operating’s credit facilities and publicly held debt of our subsidiaries and our parent companies. See “Risks Related to Our Significant Indebtedness and that of Our Subsidiaries and Our Parent Companies — We may not have the ability to raise the funds necessary to fulfill our obligations under the

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original and the new notes following a change of control, which would place us in default under the indenture governing the original and the new notes.”

      Mr. Allen may have interests that conflict with your interests.

      Mr. Allen has the ability to control us. Through his control of approximately 93% of the voting power of the capital stock of our manager, Charter, Mr. Allen is entitled to elect all but one of its board members and effectively has the voting power to elect the remaining board member as well. Mr. Allen thus has the ability to control fundamental corporate transactions requiring equity holder approval, including, but not limited to, the election of all of Charter’s directors, approval of merger transactions involving us and the sale of all or substantially all of our assets.

      Mr. Allen is not restricted from investing in, and has invested in, and engaged in, other businesses involving or related to the operation of cable television systems, video programming, high-speed data service, telephony or business and financial transactions conducted through broadband interactivity and Internet services. Mr. Allen may also engage in other businesses that compete or may in the future compete with us.

      Mr. Allen’s control over our management and affairs could create conflicts of interest if he is faced with decisions that could have different implications for him, us and the holders of the new notes. Further, Mr. Allen could effectively cause us to enter into contracts with another entity in which he owns an interest or to decline a transaction into which he (or another entity in which he owns an interest) ultimately enters.

      Current or future agreements between us and either Mr. Allen or his affiliates may not be the result of arm’s-length negotiations. Consequently, such agreements may be less favorable to us than agreements that we could otherwise have entered into with unaffiliated third parties. See “Certain Relationships and Related Transactions.”

      We are not permitted to engage in any business activity other than the cable transmission of video, audio and data unless Mr. Allen authorizes us to pursue that particular business activity, which could adversely affect our ability to offer new products and services outside of the cable transmission business and to enter into new businesses, and could adversely affect our growth, financial condition and results of operations.

      Charter’s certificate of incorporation and Charter Holdco’s limited liability company agreement provide that Charter and Charter Holdco and their subsidiaries, including us and our subsidiaries, cannot engage in any business activity outside the cable transmission business except for specified businesses. This will be the case unless we first offer the opportunity to pursue the particular business activity to Mr. Allen, he decides not to pursue it and he consents to our engaging in the business activity. The cable transmission business means the business of transmitting video, audio (including telephone services), and data over cable television systems owned, operated or managed by us from time to time. These provisions may limit our ability to take advantage of attractive business opportunities. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Allocation of Business Opportunities with Mr. Allen.”

      The loss of Mr. Allen’s services could adversely affect our ability to manage our business.

      Mr. Allen is Chairman of Charter’s board of directors and provides strategic guidance and other services to Charter. If Charter were to lose his services, our growth, financial condition and results of operations could be adversely impacted.

21

Risks Related to Regulatory and Legislative Matters

      Our business is subject to extensive governmental legislation and regulation, which could adversely affect our business by increasing our expenses.

      Regulation of the cable industry has increased cable operators’ administrative and operational expenses and limited their revenues. Cable operators are subject to, among other things:

•  rules and regulations relating to subscriber privacy;

•  limited rate regulation;

•  requirements that, under specified circumstances, a cable system carry a local broadcast station or obtain consent to carry a local or distant broadcast station;

•  rules for franchise renewals and transfers; and

•  other requirements covering a variety of operational areas such as equal employment opportunity, technical standards and customer service requirements.

      Additionally, many aspects of these regulations are currently the subject of judicial proceedings and administrative or legislative proposals. There are also ongoing efforts to amend or expand the federal, state and local regulation of some of our cable systems, which may compound the regulatory risks we already face. Certain states and localities are considering new telecommunications taxes that could increase operating expenses.

      Our cable systems are operated under franchises that are subject to non-renewal or termination. The failure to renew a franchise in one or more key markets could adversely affect our business.

      Our cable systems generally operate pursuant to franchises, permits and similar authorizations issued by a state or local governmental authority controlling the public rights-of-way. Many franchises establish comprehensive facilities and service requirements, as well as specific customer service standards and monetary penalties for non-compliance. In many cases, franchises are terminable if the franchisee fails to comply with significant provisions set forth in the franchise agreement governing system operations. Franchises are generally granted for fixed terms and must be periodically renewed. Local franchising authorities may resist granting a renewal if either past performance or the prospective operating proposal is considered inadequate. Franchise authorities often demand concessions or other commitments as a condition to renewal. In some instances, franchises have not been renewed at expiration, and we have operated under either temporary operating agreements or without a license while negotiating renewal terms with the local franchising authorities. Approximately 28% of our franchises, covering approximately 26% of our video customers, expire on or before December 31, 2005.

      We cannot assure you that we will be able to comply with all significant provisions of our franchise agreements and certain of our franchisors have from time to time alleged that we have not complied with these agreements. Additionally, although historically we have renewed our franchises without incurring significant costs, we cannot assure you that we will be able to renew, or to renew as favorably, our franchises in the future. A termination of and/or a sustained failure to renew a franchise in one or more key markets could adversely affect our business in the affected geographic area.

      Our cable systems are operated under franchises that are non-exclusive. Accordingly, local franchising authorities can grant additional franchises and create competition in market areas where none existed previously, resulting in overbuilds, which could adversely affect results of operations.

      Our cable systems are operated under non-exclusive franchises granted by local franchising authorities. Consequently, local franchising authorities can grant additional franchises to competitors in the same geographic area or operate their own cable systems. As a result, competing operators may build systems in areas in which we hold franchises. In some cases municipal utilities may legally compete with us without obtaining a franchise from the local franchising authority. The existence of more than one cable

22

system operating in the same territory is referred to as an overbuild. These overbuilds could adversely affect our growth, financial condition and results of operations by creating or increasing competition. As of December 31, 2003, we are aware of overbuild situations impacting approximately 5% of our homes passed, and potential overbuild situations in areas servicing approximately 1% of our homes passed. Additional overbuild situations may occur in other systems.

      Local franchise authorities have the ability to impose additional regulatory constraints on our business, which could further increase our expenses.

      In addition to the franchise agreement, cable authorities in some jurisdictions have adopted cable regulatory ordinances that further regulate the operation of cable systems. This additional regulation increases our expenses in operating our business. We cannot assure you that the local franchising authorities will not impose new and more restrictive requirements. Local franchising authorities also have the power to reduce rates and order refunds on the rates charged for basic services.

      Further regulation of the cable industry could cause us to delay or cancel service or programming enhancements or impair our ability to raise rates to cover our increasing costs, resulting in increased losses.

      Currently, rate regulation is strictly limited to the basic service tier and associated equipment and installation activities. However, the Federal Communications Commission (“FCC”) and the U.S. Congress continue to be concerned that cable rate increases are exceeding inflation. It is possible that either the FCC or the U.S. Congress will again restrict the ability of cable system operators to implement rate increases. Should this occur, it would impede our ability to raise our rates. If we are unable to raise our rates in response to increasing costs, our losses would increase.

      Actions by pole owners might subject us to significantly increased pole attachment costs.

      Pole attachments are cable wires that are attached to poles. Cable system attachments to public utility poles historically have been regulated at the federal or state level, generally resulting in favorable pole attachment rates for attachments used to provide cable service. The FCC clarified that a cable operator’s favorable pole rates are not endangered by the provision of Internet access, and that approach ultimately was upheld by the Supreme Court of the United States, except that on October 6, 2003, the United States Court of Appeals for the Ninth Circuit held that cable modem service is not “cable service” but is part “telecommunications service” and part “information service,” which possibly could lead to higher pole attachment rates. Despite the existing regulatory regime, utility pole owners in many areas are attempting to raise pole attachment fees and impose additional costs on cable operators and others. In addition, the favorable pole attachment rates afforded cable operators under federal law can be gradually increased by utility companies if the operator provides telecommunications services, as well as cable service, over plant attached to utility poles. Any significant increased costs could have a material adverse impact on our profitability and discourage system upgrades and the introduction of new products and services.

      We may be required to provide access to our networks to other Internet service providers, which could significantly increase our competition and adversely affect our ability to provide new products and services.

      A number of companies, including telephone companies and Internet service providers, or ISPs, have requested local authorities and the FCC to require cable operators to provide non-discriminatory access to cable’s broadband infrastructure, which allows cable to deliver a multitude of channels and/or services, so that these companies may deliver Internet services directly to customers over cable facilities. A federal court in each of California, Virginia and Florida has struck down “open-access” requirements imposed by a variety of franchising authorities as unlawful. Each of these decisions struck down the “open-access” requirements on different legal grounds. On October 6, 2003, however, the United States Court of Appeals for the Ninth Circuit issued a decision holding that cable modem service is part “telecommunications service” and part “information service.” This decision could potentially result in “open access” requirements being imposed on us.

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      We believe that allocating a portion of our bandwidth capacity to other Internet service providers:

•  would impair our ability to use our bandwidth in ways that would generate maximum revenues; and

•  would strengthen our Internet service provider competitors by granting them access and lowering their costs to enter into our markets.

      In addition, if we were required to provide access in this manner, it could have a significant adverse impact on our profitability. This could impact us in many ways, including by:

•  increasing competition;

•  increasing the expenses we incur to maintain our systems; and/or

•  increasing the expense of upgrading and/or expanding our systems.

      Changes in channel carriage regulations could impose significant additional costs on us.

      Cable operators also face significant regulation of their channel carriage. They currently can be required to devote substantial capacity to the carriage of programming that they would not carry voluntarily, including certain local broadcast signals, local public, educational and government access programming, and unaffiliated commercial leased access programming. This carriage burden could increase in the future, particularly if the FCC were to require cable systems to carry both the analog and digital versions of local broadcast signals. The FCC currently is conducting a proceeding in which it is considering this channel usage possibility, although it previously issued a tentative decision against such dual carriage.

      Offering voice communications service may subject us to additional regulatory burdens, causing us to incur additional costs.

      In 2002, we began to offer voice communications services on a limited basis over our broadband network. We continue to explore development and deployment of VOIP services. The regulatory requirements applicable to VOIP service are unclear. The FCC is currently seeking public comment on regulatory issues pertaining to VOIP services. Expanding our offering of these services may require us to obtain certain authorizations, including federal, state and local licenses. We may not be able to obtain such authorizations in a timely manner, or at all, and conditions could be imposed upon such licenses or authorizations that may not be favorable to us. Furthermore, telecommunications companies generally are subject to significant regulation, and it may be difficult or costly for us to comply with such regulations, were it to be determined that they applied to VOIP offerings such as ours. In addition, pole attachment rates are higher for providers of telecommunications services than for providers of cable service. If there were to be a final legal determination by the FCC, a state Public Utility Commission, or appropriate court that VOIP services are subject to these higher rates, our pole attachment costs could increase significantly, which could adversely affect our financial condition and results of operations.

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USE OF PROCEEDS

      This exchange offer is intended to satisfy our obligations under the exchange and registration rights agreement that was executed in connection with the sale of the original notes. We will not receive any proceeds from the exchange offer. You will receive, in exchange for the original notes tendered by you and accepted by us in the exchange offer, new notes in the same principal amount. The original notes surrendered in exchange for the new notes will be retired and will not result in any increase in our outstanding debt. Any tendered-but-unaccepted original notes will be returned to you and will remain outstanding.

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CAPITALIZATION

      The following table sets forth as of December 31, 2003, on a consolidated basis:

•  cash and cash equivalents;

•  the actual (historical) capitalization of CCH II;

•  the capitalization of CCH II, on a pro forma basis to reflect the sale of certain assets to Atlantic Broadband Finance, LLC in March and April 2004, as if the sale had occurred on December 31, 2003, and the use of the net proceeds from such transaction (excluding the $10 million which is currently held in an indemnity escrow account) to repay $723 million of principal amounts outstanding under our subsidiaries’ credit facilities; and

•  the capitalization of CCH II, on a pro forma as adjusted basis to reflect:

(1)	the issuance and sale of the Charter Operating senior second lien notes; and
(2)	an increase in amounts outstanding under the amended and restated $6.5 billion Charter Operating credit facilities by approximately $974 million, for use, together with the proceeds of the sale of the Charter Operating senior second lien notes, to refinance approximately $2.4 billion outstanding principal amount of the credit facilities of CC VI Operating, CC VIII Operating and Falcon.

								Pro forma
						Pro forma		as adjusted
				Historical		(unaudited)		(unaudited)
				(dollars in millions)
Cash and cash equivalents				$	85	$	85	$	85
Long-Term Debt:
	Subsidiary credit facilities(a)			$	7,227	$	6,504	$	5,124
	Charter Operating:
		8% senior second lien notes due 2012			—		—		1,100
		8 3/8% senior second lien notes due 2014			—		—		400
	Renaissance:
		10.000% senior discount notes due 2008			116		116		116
	CC V Holdings:
		11.875% senior discount notes due 2008			113		113		113
	CCH II:
		10.25% senior notes due 2010			1,601		1,601		1,601
	CCO Holdings:
		8 3/4% senior notes due 2013			500		500		500
			Total long-term debt		9,557		8,834		8,954
Loan Payable — Parent Company — Senior					37		37		37
Minority Interest(b)					719		719		719
Member’s Equity					8,951		9,058		9,034
Total Capitalization				$	19,264	$	18,648	$	18,744

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(a)  Amounts outstanding under the credit facilities of our subsidiaries as of December 31, 2003 were as follows (in millions):

		Historical
Charter Operating		$	4,459
CC VI			868
Falcon Cable			856
CC VIII Operating			1,044
	Total subsidiary credit facilities	$	7,227

Unused total potential availability under the credit facilities of our subsidiaries was $1.7 billion as of December 31, 2003, although the actual unused availability at that time was $828 million because of limits imposed by covenant restrictions. On a pro forma, as adjusted basis, our unused availability under our amended and restated Charter Operating credit facilities at December 31, 2003 would have been $1.2 billion.

(b)  Minority interest consists of preferred membership units in CC VIII, LLC, an indirect subsidiary of Charter Holdings, indirectly held by Paul G. Allen as a result of the exercise of put rights in connection with the Bresnan transaction. An issue has arisen as to whether the documentation for the Bresnan transaction was correct and complete with regard to the ultimate ownership of the CC VIII, LLC membership interests following consummation of the Bresnan put transaction. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.” Minority interest also includes $25 million of preferred interest in Charter Helicon, LLC issued in connection with the Helicon acquisition in 1999.

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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

      The following unaudited pro forma consolidated financial statements are based on the historical consolidated financial statements of CCH II, adjusted on a pro forma basis to reflect the following transactions as if they had occurred on December 31, 2003 (for the unaudited pro forma consolidated balance sheet) and on January 1, 2003 (for the unaudited pro forma consolidated statement of operations):

(1)	the sale of certain of our assets in October 2003 and the sale of cable systems to Atlantic Broadband Finance, LLC in March and April 2004;
(2)	the repayment of approximately $723 million of amounts outstanding under our subsidiaries’ credit facilities with the net proceeds from the sale of cable systems to Atlantic Broadband Finance, LLC (excluding the $10 million which is currently held in an indemnity escrow account);
(3)	the issuance and sale of the original notes in September 2003, the CCO Holdings senior notes in November 2003 and the Charter Operating senior second lien notes in April 2004; and
(4)	an increase in amounts outstanding under the Charter Operating credit facilities by approximately $974 million, for use, together with the proceeds of the sale of the Charter Operating senior second lien notes, to refinance approximately $2.4 billion principal amount outstanding under credit facilities of our subsidiaries, CC VI Operating, CC VIII Operating and Falcon.

      The unaudited pro forma adjustments are based on information available to us as of the date of this prospectus and certain assumptions that we believe are reasonable under the circumstances. The Unaudited Pro Forma Consolidated Financial Statements are not intended (a) to provide any indication of what our actual financial position or results of operations would have been had the transactions described above been completed on the dates indicated or (b) to project our results of operations for any future date.

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CCH II, LLC

Unaudited Pro Forma Consolidated Statement of Operations

for the Year Ended December 31, 2003

(dollars in millions)

					Asset			Offering
					dispositions			adjustments
		Historical			(Note A)			(Note B)			Pro forma
Revenues		$	4,819		$	(189	)	$	-		$	4,630
Costs and expenses:
	Operating (excluding depreciation and amortization)		1,952			(71	)		-			1,881
	Selling, general and administrative		940			(26	)		-			914
	Depreciation and amortization		1,479			(40	)		-			1,439
	Gain on sale of system		(21	)		21			-			-
	Option compensation expense, net		4			-			-			4
	Special charges, net		21			-			-			21
	Unfavorable contracts and other settlements		(72	)		-			-			(72	)
			4,303			(116	)		-			4,187
Income from operations			516			(73	)		-			443
Interest expense, net			(545	)		27			(274	)		(792	)
Gain on derivative instruments and hedging activities, net			65			-			-			65
Other, net			(9	)		-			-			(9	)
			(489	)		27			(274	)		(736	)
Income (loss) before minority interest and income taxes			27			(46	)		(274	)		(293	)
Minority interest			(29	)		-			-			(29	)
Loss before income taxes			(2	)		(46	)		(274	)		(322	)
Income tax expense			(13	)		1			-			(12	)
Net loss		$	(15	)	$	(45	)	$	(274	)	$	(334	)

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Notes to CCH II, LLC

Unaudited Pro Forma

Consolidated Statement of Operations

      Note A: Represents the elimination of operating results related to the disposition of certain of our assets in October 2003 and in March 2004 and a reduction of interest expense related to the use of the net proceeds from such sales to repay a portion of our subsidiaries’ credit facilities.

      Note B: Represents adjustment to interest expense as follows (in millions):

		Year ended
		December 31, 2003
Interest on the Charter Operating senior second lien notes and the amended and restated Charter Operating credit facilities at a weighted average rate of 5.1%		$	340
Interest on the CCH II 10.25% senior notes			123
Interest on the CCO Holdings 8 3/4% senior notes			38
Amortization of deferred financing costs(a)			26
Less: historical interest expense on Charter Operating credit facilities and on subsidiary credit facilities repaid			(253	)
	Adjustment	$	274

(a)  The adjustment related to the amortization of deferred financing costs is based on preliminary information available at this time and is subject to change based on the finalization of the amount of financing costs to be deferred.

30

CCH II, LLC

Unaudited Pro Forma Consolidated Balance Sheet

as of December 31, 2003

(dollars in millions)

						Asset			Offering
						disposition			adjustments
			Historical			(Note A)			(Note B)			Pro forma
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	85		$	-		$	-		$	85
	Accounts receivable, net			178			(5	)		-			173
	Receivables from related party			59			-			-			59
	Prepaid expenses and other current assets			21			9			-			30
		Total current assets		343			4			-			347
INVESTMENT IN CABLE PROPERTIES:
	Property, plant and equipment, net			6,808			(139	)		-			6,669
	Franchises, net			13,680			(483	)		-			13,197
		Total investment in cable properties, net		20,488			(622	)		-			19,866
OTHER ASSETS				178			(1	)		96			273
		Total assets	$	21,009		$	(619	)	$	96		$	20,486
LIABILITIES AND MEMBER’S EQUITY
CURRENT LIABILITIES:
	Accounts payable and accrued expenses		$	993		$	-		$	-		$	993
		Total current liabilities		993			-			-			993
LONG-TERM DEBT				9,557			(723	)		120			8,954
LOANS PAYABLE- PARENT COMPANIES				37			-			-			37
DEFERRED MANAGEMENT FEES- PARENT COMPANY				14			-			-			14
OTHER LONG-TERM LIABILITIES				738			(3	)		-			735
MINORITY INTEREST				719			-			-			719
MEMBER’S EQUITY
	Member’s equity			9,008			107			(24	)		9,091
	Accumulated other comprehensive loss			(57	)		-			-			(57	)
		Total member’s equity		8,951			107			(24	)		9,034
		Total liabilities and member’s equity	$	21,009		$	(619	)	$	96		$	20,486

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Notes to CCH II, LLC

Unaudited Pro Forma

Consolidated Balance Sheet

      Note A. Represents the elimination of assets and liabilities related to the sale of certain assets to Atlantic Broadband Finance, LLC and the repayment of approximately $723 million of amounts outstanding under subsidiary credit facilities with the net proceeds from such sale, excluding $10 million which is currently held in an indemnity escrow account and is added to prepaid expenses and other current assets.

      Note B. Represents increase in long-term debt as a result of deferred financing costs in connection with the sale of the Charter Operating notes and the amendment and restatement of the Charter Operating credit facilities and the elimination of the net book value of deferred financing costs associated with the credit facilities of our subsidiaries, Charter Operating, CC VI Operating, CC VIII Operating and Falcon. The amount of financing costs deferred is based on preliminary information available at this time and is subject to adjustment based on final information regarding actual expenses. Sources and uses are as follows (dollars in millions):

Sources of funds:
	Charter Operating senior second lien notes		$	1,500
	Charter Operating credit facilities			5,124
		Total sources	$	6,624
Uses of funds:
	Refinancing of existing credit facilities		$	6,504
	Payment of deferred financing costs(a)			120
		Total uses	$	6,624

     (a) Includes commissions and estimated expenses payable by us in connection with the Charter Operating sale of $1.5 billion senior second lien notes and the amendment and restatement of the Charter Operating credit facilities in April 2004.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

      In March 2003, CCH II was formed. CCH II is a holding company whose primary assets are equity interests in its cable operating subsidiaries. Charter Holdings entered into a series of transactions and contributions which had the effect of (i) creating CCH II, CCH II Capital, CCH I, LLC and CCO Holdings; and (ii) combining and contributing to Charter Operating, all of Charter Holdings’ interest in cable operations not previously owned by Charter Operating. These transactions were accounted for as a reorganization of entities under common control. Accordingly, the financial information for CCH II combines the historical financial condition, cash flows and results of operations of Charter Operating, and the operations of subsidiaries contributed by Charter Holdings for all periods presented.

      The following table presents summary financial and other data for CCH II and its subsidiaries and has been derived from (i) the audited consolidated financial statements of CCH II and its subsidiaries for the four years ended December 31, 2003, and (ii) the unaudited consolidated financial statements of CCH II and its subsidiaries for the year ended December 31, 1999. The consolidated financial statements of CCH II and its subsidiaries for each of the years ended December 31, 2000, 2001, 2002 and 2003 have been audited by KPMG LLP, independent auditors. The following information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical consolidated financial statements and related notes included elsewhere in this prospectus.

		Year Ended December 31,
		1999			2000			2001			2002			2003
		(dollars in millions)
Statement of Operations Data:
Revenues		$	1,428		$	3,141		$	3,807		$	4,566		$	4,819
Costs and Expenses:
	Operating (excluding depreciation and amortization)		461			1,187			1,486			1,807			1,952
	Selling, general and administrative		329			606			826			963			940
	Depreciation and amortization		745			2,387			2,693			1,439			1,479
	Impairment of franchises		—			—			—			4,638			—
	Gain on sale of system		—			—			—			—			(21	)
	Option compensation expense, net		80			38			(5	)		5			4
	Special charges, net		—			—			18			36			21
	Unfavorable contracts and other settlements		—			—			—			—			(72	)
			1,615			4,218			5,018			8,888			4,303
Income (loss) from operations			(187	)		(1,077	)		(1,211	)		(4,322	)		516
Interest expense, net			(243	)		(644	)		(525	)		(512	)		(545	)
Gain (loss) on derivative instruments and hedging activities, net			—			—			(50	)		(115	)		65
Other, net			(8	)		(6	)		(52	)		3			(9	)
Income (loss) before minority interest, income taxes and cumulative effect of accounting change			(438	)		(1,727	)		(1,838	)		(4,946	)		27
Minority interest			—			(13	)		(16	)		(16	)		(29	)
Loss before income taxes and cumulative effect of accounting change			(438	)		(1,740	)		(1,854	)		(4,962	)		(2	)
Income tax benefit (expense)			(1	)		24			27			216			(13	)
Loss before cumulative effect of accounting change			(439	)		(1,716	)		(1,827	)		(4,746	)		(15	)
Cumulative effect of accounting change			—			—			(24	)		(540	)		—
Net loss		$	(439	)	$	(1,716	)	$	(1,851	)	$	(5,286	)	$	(15	)
Other Data:
	Ratio of earnings to cover fixed charges(a)		NA			NA			NA			NA			1.05
	Deficiencies of earnings to cover fixed charges(a)	$	438		$	1,727		$	1,838		$	4,946			NA

	As of December 31,
	1999		2000		2001		2002		2003
	(dollars in millions)
Balance Sheet Data (end of period):
Cash and cash equivalents	$	114	$	122	$	—	$	310	$	85
Total assets		18,939		24,235		26,091		21,984		21,009
Long-term debt		8,936		7,531		6,961		8,066		9,557
Loan payable-parent company		—		446		366		133		37
Minority interest(b)		25		666		680		693		719
Member’s equity		8,048		13,493		15,940		11,040		8,951

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(a)

Earnings include net loss plus fixed charges. Fixed charges consist of interest expense and an estimated interest component of rent expense.

(b)

Minority interest consists of preferred membership units in CC VIII, LLC, an indirect subsidiary of Charter Holdings, indirectly held by Paul G. Allen as a result of the exercise of put rights originally granted in connection with the Bresnan transaction in 2000. An issue has arisen as to whether the documentation for the Bresnan transaction was correct and complete with regard to the ultimate ownership of the CC VIII, LLC membership interests following consummation of the Bresnan put transaction. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.” Minority interest also includes $25 million of preferred interest in Charter Helicon, LLC issued in connection with the Helicon acquisition in 1999.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      Reference is made to the “Risk Factors” section above for a discussion of important factors that could cause actual results to differ from expectations and non-historical information contained herein. In addition, the following discussion should be read in conjunction with the audited consolidated financial statements of CCH II and subsidiaries as of and for the years ended December 31, 2003, 2002 and 2001 contained herein.

      CCH II is a recently formed holding company whose primary assets are equity interests in our cable operating subsidiaries. CCH II was formed in March 2003 and is a wholly owned subsidiary of CCH I, which is a wholly owned subsidiary of Charter Holdings. Charter Holdings is a wholly owned subsidiary of Charter Communications Holding Company, LLC, which is a subsidiary of Charter.

      CCH II is the sole owner of CCO Holdings, which is the sole owner of Charter Communications Operating, LLC (“Charter Operating”). In June and July of 2003, Charter Holdings entered into a series of transactions and contributions which had the effect of (i) creating CCH II, CCH II Capital, CCH I and CCO Holdings, LLC and (ii) combining and contributing all of Charter Holdings’ interest in cable operations not previously owned by Charter Operating to Charter Operating. This transaction was accounted for as a reorganization of entities under common control. Accordingly, the historical financial condition and results of operations of CCH II combine the historical financial condition and results of operations of Charter Operating, and the operations of subsidiaries contributed by Charter Holdings, for all periods presented.

Introduction

      During 2003, we undertook a number of transition activities including reorganizing our workforce, adjusting our video pricing and packages, completing call center consolidations and implementing billing conversions. Due to the focus on such activities and certain financial constraints, we reduced spending on marketing our products and services. The reduced marketing activities and other necessary operational changes negatively impacted customer retention and acquisition, primarily during the first half of the year. During the second half of 2003, we increased our marketing efforts and implemented promotional campaigns to slow the loss of analog video customers, and to accelerate advanced service penetration, specifically in high-speed data.

      In 2003 and the first quarter of 2004, we and our parent companies took a series of steps intended to improve our balance sheet and liquidity. The sale of senior second lien notes by our indirect subsidiary, Charter Operating, together with the concurrent refinancing of its credit facilities in April 2004, are our most recent examples of these efforts. In addition, since September 2003:

•  We, Charter and its subsidiaries exchanged approximately $1.9 billion of indebtedness for $1.6 billion of indebtedness while extending maturities, resulting in a reduction of parent company debt outstanding of approximately $294 million.

•  Our subsidiary, CCO Holdings, sold $500 million total principal amount of 8 3/4% senior notes and used the net proceeds to repay approximately $486 million principal amount of our subsidiaries’ credit facilities, providing additional financial flexibility for use of our subsidiaries’ credit facilities.

•  Our subsidiaries completed the sale of cable systems in Port Orchard, Washington, for a total price of approximately $91 million, subject to adjustments.

•  Charter Holdings and several of our subsidiaries closed the sale of cable systems in Florida, Pennsylvania, Maryland, Delaware, and West Virginia with Atlantic Broadband Finance, LLC. An additional closing for a cable system in New York occurred April 30, 2004. Subject to post-closing contractual adjustments, the net proceeds are expected to be approximately $733 million, of which (i) $10 million is currently held in an indemnity escrow account (with the unused portion thereof expected to be released to us by March 1, 2005) and (ii) approximately $9 million was received

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	upon the closing of the Salamanca, New York sale. The net proceeds received have been used to repay a portion of our subsidiaries’ credit facilities.
•	We significantly reduced capital spending, from approximately $2.1 billion for the year ended December 31, 2002 to approximately $804 million for the year ended December 31, 2003, primarily due to the substantial completion of our network rebuild and upgrade.

      During the years 1999 through 2001, we grew significantly, principally through acquisitions of other cable businesses financed by debt and, to a lesser extent, equity. We have no current plans to pursue any significant acquisitions. However, we may pursue exchanges of non-strategic assets or divestitures, such as the sale of cable systems to Atlantic Broadband Finance, LLC discussed above. We therefore do not believe that our historical growth rates are accurate indicators of future growth.

      Historically, our ability to fund operations and investing activities has depended on our continued access to credit under our subsidiaries’ credit facilities. While our use of cash has changed over time such that the substantial majority of our cash now comes from cash flows from operating activities, we expect we will continue to borrow under our subsidiary’s credit facilities from time to time to fund cash needs. The occurrence of an event of default under our subsidiary’s credit facilities could result in borrowings from these facilities being unavailable to us and could, in the event of a payment default or acceleration, also trigger events of default under our notes and our subsidiaries’ and parent companies’ outstanding notes and would have a material adverse effect on us.

Adoption of New Policies

      Charter is our manager and we have followed and continue to follow Charter’s policies and practices. Commencing in January 2002 and continuing through the first quarter of 2003, Charter’s management elected to implement a number of new policies including:

      Change in Disconnect and Bad Debt Policies. Our estimated customer count is intended to include those people receiving cable service (regardless of payment status), except for complimentary accounts (such as our employees). Our disconnect and bad debt guidelines for slow or nonpaying customers provide that, in general, customers are to be terminated for non-payment after approximately 60-75 days, and written off/referred to collection at approximately 90-110 days. We initially began implementing this policy in January 2002 after we decided to change our past practice under which we did not promptly disconnect these customers on a uniform basis. Effective year-end 2001, we also increased our allowance for doubtful accounts. The number of our customers who are presently more than 90 days overdue and our bad debt expense associated with such customers are lower than they were prior to the institution of these policies.

      Procedures to Ensure Adherence to Disconnect and Customer Count Policies. During Charter’s review of its internal audit findings and in the course of internal investigations, and subsequently in the course of responding to Charter’s governmental investigations, we became concerned that certain employees either were not or had not previously been complying with our customer count and disconnect policies. We have since announced to our employees that a failure to follow these policies will be met with disciplinary action including, in appropriate cases, termination. We have terminated and disciplined employees who have not followed the policies. We have instituted regular review of customer reports by senior employees in an effort to ensure adherence to our policies and consistency of application throughout our various operating divisions, and we have established a telephone hotline number for employees to call and report misconduct relating to the reporting of customer numbers. We have also elected not to provide guidance on expected customer numbers in our public disclosures.

      Corporate Compliance Program. Prior to 2002, Charter did not have a formal compliance program. It has since established a corporate compliance program, pursuant to which it provides a revised Code of Conduct to employees that is incorporated into Charter’s Employee Handbook. The Code and Handbook require that employees report violations of the Code or other behavior which they believe might be unethical or illegal. Employees can report matters to their supervisor, to the Human Resources Department, through a hotline or through a secure website, and may do so anonymously. The compliance

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program is overseen by a compliance committee comprised of high-ranking Charter officers, which meets on a quarterly basis. The head of the committee in turn reports to the Audit Committee.

      Treatment of Data Only Customers. Charter changed its methodology for reporting analog cable video customers to exclude those customers who receive high-speed data service only. This represented a change in Charter’s methodology from prior reports through September 30, 2002, in which high-speed data service only customers (which numbered approximately 55,900 at September 30, 2002) were included within our analog cable video customers. Charter made this change because it determined that a substantial number of those customers who only received high-speed data service were unable to receive our most basic level of analog video service because this service was physically secured or blocked, was unavailable in certain areas or the customers were unaware that this service was available to them. In addition, in light of Charter’s decision to begin marketing of our high-speed data services as a separate product, Charter believed that separate disclosure of this information would assist investors in understanding our current business and in monitoring what we expected to be an increasing number of data only customers. See “Business — Products and Services.”

      Disclosure Committee. Charter established a Disclosure Committee, consisting of senior personnel from the business units, Charter’s internal audit group, and the finance and legal groups, and Charter now follows an extensive review and certification process in connection with our filings with the SEC and other disclosure documents.

      Audit Committee. Charter modified its Audit Committee’s charter to expand the role of the committee and to comply with the Sarbanes-Oxley Act of 2002 and the rules issued thereunder (including Nasdaq rules).

      Accounting Policy Changes. In early 2003, our parent companies and our subsidiaries contributed to us by our parent company in a reorganization of entities under common control (as discussed above) restated their 2002, 2001 and 2000 financial statements. As the financial statements presented in this offering memorandum have not been previously presented, the financial statements have not been restated. As a result of the restatements of our parent companies’ and subsidiaries’ financial statements, a number of accounting policies were revised, including treatment of launch incentives from programmers, recognition of customer incentives and inducements, capitalization of labor and overhead, treatment of customer acquisition costs, accelerated recognition of depreciation in connection with our rebuild and upgrade program and recognition of deferred tax liabilities and franchises related to acquisitions.

      These adjustments reduced revenues previously reported in our parent companies’ and our subsidiaries’ financial statements by a total of $38 million, $146 million and $108 million, for the first three quarters of 2002 and for the years ended December 31, 2001 and 2000, respectively. Such adjustments represented approximately 1%, 4% and 3% of our parent companies’ and our subsidiaries’ previously reported revenues for the respective periods in 2002, 2001 and 2000, respectively. Our parent companies’ and our subsidiaries’ previously reported consolidated net loss increased by a total of $188 million for the first three quarters of 2002 and decreased by $21 million for the year ended December 31, 2001. Our parent companies’ and our subsidiaries’ previously reported net loss increased by $70 million for the year ended December 31, 2000, primarily due to adjustments related to the original accounting for acquisitions and elements of our rebuild and upgrade activities. Net cash flows from operating activities for the years ended December 31, 2001 and 2000 were reduced by $21 million and $302 million, respectively.

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Acquisitions

      The following table sets forth information regarding our acquisitions from January 1, 2001 to December 31, 2002 (none in 2003):

					Purchase Price (Dollars in Millions)
							Securities
			Acquisition		Cash		Issued/Other			Total			Acquired
			Date		Paid		Consideration			Price			Customers
AT&T Systems				6/01	$	1,711	$	25	(a)	$	1,736	(a)		551,100
Cable USA				8/01		45		55	(b)		100			30,600
	Total 2001 Acquisitions					1,756		80			1,836			581,700
High Speed Access Corp.				2/02		78		—			78			N/A
Enstar Limited Partnership Systems				4/02		48		—			48			21,600
Enstar Income Program II-1, L.P.				9/02		15		—			15			6,400
	Total 2002 Acquisitions					141		—			141			28,000
		Total 2001-2002 Acquisitions			$	1,897	$	80		$	1,977			609,700

(a)

Comprised of $1.7 billion, as adjusted, in cash and a cable system located in Florida valued at $25 million, as adjusted.

(b)

In connection with this transaction, at the closing Charter and Charter Holdco acquired all of the outstanding stock of Cable USA and the assets of related affiliates in exchange for cash and 505,664 shares of Charter Series A convertible redeemable preferred stock. In the first quarter of 2003, an additional $0.34 million in cash was paid and 39,595 additional shares of Charter Series A convertible redeemable preferred stock were issued to certain sellers.

      All acquisitions were accounted for under the purchase method of accounting and results of operations were included in Charter Holdings’ consolidated financial statements from their respective dates of acquisition.

      We have no current plans to pursue any significant acquisitions. However, we will continue to evaluate opportunities to consolidate our operations through the sale of cable systems to, or exchange of like-kind assets with, other cable operators as such opportunities arise, and on a very limited basis, consider strategic new acquisitions. Our primary criteria in considering these opportunities are the rationalization of our operations into geographic clusters and the potential financial benefits we expect to ultimately realize as a result of the sale, exchange, or acquisition.

Overview of Operations

      Approximately 86% and 84% of our revenues for the years ended December 31, 2003 and 2002, respectively, are attributable to monthly subscription fees charged to customers for our video, high-speed data, telephone and commercial services provided by our cable systems. Generally, these customer subscriptions may be discontinued by the customer at any time. The remaining 14% and 16%, respectively, of revenue is derived primarily from pay-per-view and VOD programming where users are charged a fee for individual programs viewed, advertising revenues, installation or reconnection fees charged to customers to commence or reinstate service, commissions related to the sale of merchandise by home shopping services and franchise fee revenues, which are collected by us but then paid to local franchising authorities. We have generated increased revenues during the past three years, primarily through the sale of digital video and high-speed data services to new and existing customers, price increases on video services and customer growth from acquisitions. Going forward, our strategy is to grow revenues and improve margins by seeking to stabilize our analog video customer base and increase revenues per customer. To accomplish this, we are increasing prices for certain services and we are offering new bundling of services combining digital video and our advanced services (such as high-speed data service and high definition television) at

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what we believe are attractive price points. In addition, we are increasing our marketing efforts and budget in 2004 to promote our high-speed data services, digital video services and advanced products and services such as digital video recorders, high definition television and telephony using VOIP to our existing customer base and to commercial customers. See “Business — Sales and Marketing” for more details.

      Our success in our efforts to grow revenues and improve margins will be impacted by our ability to compete against companies with often fewer regulatory burdens, easier access to financing, greater personnel resources, greater brand name recognition and long-established relationships with regulatory authorities and customers. Additionally, controlling our cost of operations is critical, particularly cable programming costs, which have historically increased at rates in excess of inflation and are expected to continue to increase. See “Business — Programming” for more details. We are attempting to control our costs of operations by maintaining strict controls on expenses. More specifically, we are focused on managing our cost structure by renegotiating programming agreements to reduce the rate of historical increases in programming cost, managing our workforce to control increases and improve productivity, and leveraging our size in purchasing activities.

      Our expenses primarily consist of operating costs, selling, general and administrative expenses, depreciation and amortization expense and interest expense. Operating costs primarily include programming costs, the cost of our workforce, cable service related expenses, advertising sales costs, franchise fees and expenses related to customer billings. For the year ended December 31, 2003, income from operations was $516 million and for the years ended December 31, 2002 and 2001, our loss from operations was $4.3 billion and $1.2 billion, respectively. Operating margin, which is defined as income (loss) from operations divided by revenues, was 11% for the year ended December 31, 2003, whereas for the years ending December 31, 2002 and 2001, we had negative operating margins of 95% and 32%, respectively. The improvement in income from operations and operating margin from 2002 to 2003 was principally due to a $4.6 billion franchise impairment charge in the fourth quarter of 2002 which did not recur in 2003 and the recognition of gains in 2003 of $93 million related to unfavorable contracts and other settlements and gain on sale of system. The increase in loss from operations and negative operating margins from 2001 to 2002 was primarily a result of a $4.6 billion franchise impairment charge in the fourth quarter of 2002, partially offset by a decrease in amortization expense of $1.5 billion as a result of the adoption of SFAS No. 142, Goodwill and Other Intangible Assets, which eliminated the amortization of franchises determined to have an indefinite life. Although we do not expect charges for impairment in the future of comparable magnitude to the fourth quarter 2002 impairment charge, potential charges could occur due to changes in market conditions.

      We have a history of net losses. Further, we expect to continue to report net losses for the foreseeable future. Our net losses are principally attributable to insufficient revenue to cover the interest costs we incur because of our high level of debt, the depreciation expenses that we incur resulting from the capital investments we have made in our cable properties, and the amortization and impairment of our franchise intangibles. We expect that these expenses (other than amortization and impairment of franchises) will remain significant, and we therefore expect to continue to report net losses for the foreseeable future.

Critical Accounting Policies and Estimates

      Certain of our accounting policies require our management to make difficult, subjective or complex judgments. Management has discussed these policies with the Audit Committee of Charter’s board of directors and the Audit Committee has reviewed the following disclosure. We consider the following policies to be the most critical in understanding the estimates, assumptions and judgments that are involved in preparing our financial statements and the uncertainties that could affect our results of operations, financial condition and cash flows:

•  Capitalization of labor and overhead costs;

•  Useful lives of property, plant and equipment;

•  Impairment of property, plant, and equipment, franchises, and goodwill;

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•  Income taxes; and

•  Litigation.

      In addition, there are other items within our financial statements that require estimates or judgment but are not deemed critical, such as the allowance for doubtful accounts, but changes in judgment, or estimates in these other items could also have a material impact on our financial statements.

Capitalization of labor and overhead costs

      The cable industry is capital intensive, and a large portion of our resources are spent on capital activities associated with extending, rebuilding and upgrading our cable network. As of December 31, 2003 and 2002, the net carrying amount of our property, plant and equipment (consisting primarily of cable network assets) was approximately $6.8 billion (representing 32% of total assets) and $7.5 billion (representing 34% of total assets), respectively. Total capital expenditures for the years ended December 31, 2003, 2002 and 2001 were approximately $804 million, $2.1 billion and $2.8 billion, respectively.

      Costs associated with network construction, initial customer installations, installation refurbishments and the addition of network equipment necessary to provide advanced services are capitalized. Costs capitalized as part of initial customer installations include materials, direct labor, and certain indirect costs. These indirect costs are associated with the activities of personnel who assist in connecting and activating the new service and consist of compensation and overhead costs associated with these support functions. The costs of disconnecting service at a customer’s dwelling or reconnecting service to a previously installed dwelling are charged to operating expense in the period incurred. Costs for repairs and maintenance are charged to operating expense as incurred, while equipment replacement and betterments, including replacement of cable drops from the pole to the dwelling, are capitalized.

      Direct labor costs directly associated with capital projects are capitalized. We capitalize direct labor costs associated with personnel based upon the specific time devoted to network construction and customer installation activities. Capitalizable activities performed in connection with customer installations include:

•  Scheduling a “truck roll” to the customer’s dwelling for service connection;

•  Verification of serviceability to the customer’s dwelling (i.e., determining whether the customer’s dwelling is capable of receiving service by our cable network and/or receiving advanced or data services);

•  Customer premise activities performed by in-house field technicians and third-party contractors in connection with customer installations, installation of network equipment in connection with the installation of expanded services and equipment replacement and betterment; and

•  Verifying the integrity of the customer’s network connection by initiating test signals downstream from the headend to the customer’s digital set-top terminal.

      We capitalized internal direct labor costs of $88 million, $173 million, and $171 million, for the years ended December 31, 2003, 2002 and 2001, respectively. Capitalized internal direct labor costs decreased in 2003 compared to 2002 primarily due to the substantial completion of the upgrade of our systems and a decrease in the amount of capitalizable installation costs.

      Judgment is required to determine the extent to which indirect costs (“overhead”) are incurred as a result of specific capital activities, and therefore should be capitalized. We capitalize overhead using an overhead rate applied to the amount of direct labor capitalized. We have established the overhead rates based on an analysis of the nature of costs incurred in support of capitalizable activities and a determination of the portion of costs that is directly attributable to capitalizable activities. The primary costs that are included in the determination of the overhead rate are (i) employee benefits and payroll taxes associated with capitalized direct labor, (ii) direct variable costs associated with capitalizable activities, consisting primarily of installation and construction vehicle costs, (iii) the cost of support

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personnel, such as dispatch, that directly assist with capitalizable installation activities, and (iv) indirect costs directly attributable to capitalizable activities.

      While we believe our existing capitalization policies are appropriate, a significant change in the nature or extent of our system activities could affect management’s judgment about the extent to which we should capitalize direct labor or overhead in the future. We monitor the appropriateness of our capitalization policies, and perform updates to our internal overhead study on a periodic basis to determine whether facts or circumstances warrant a change to our capitalization policies. We capitalized overhead of $86 million, $162 million and $134 million respectively, for the years ended December 31, 2003, 2002 and 2001.

Useful lives of property, plant and equipment

      We evaluate the appropriateness of estimated useful lives assigned to our property, plant and equipment, and revise such lives to the extent warranted by changing facts and circumstances. Beginning in January 2000, we commenced a significant initiative to rebuild and upgrade portions of our cable network. We reduced the useful lives of certain assets with a book value of $1.1 billion in 2000 and an additional $125 million in 2001. These assets were expected to be replaced and retired through that process in approximately one to three years, representing management’s best estimate of the expected pattern of the retirement from service of such assets. A significant change in assumptions about the extent or timing of future asset usage or retirements could materially affect future depreciation expense.

      Depreciation expense related to property, plant and equipment totaled $1.5 billion, $1.4 billion and $1.2 billion, representing approximately 34%, 16% and 24% of costs and expenses, for the years ended December 31, 2003, 2002 and 2001, respectively. Of these amounts, approximately $183 million and $352 million for the years ended December 31, 2002 and 2001 respectively, relates to network assets which were replaced and retired over the three-year period of the rebuild initiative. Depreciation is recorded using the straight-line method over management’s estimate of the estimated useful lives of the related assets as follows:

Cable distribution systems	7-15 years
Customer equipment and installations	3-5 years
Vehicles and equipment	1-5 years
Buildings and leasehold improvements	5-15 years
Furniture and fixtures	5 years

Impairment of property, plant and equipment, franchises and goodwill

      As discussed above, the net carrying value of our property, plant and equipment is significant. We also have recorded a significant amount of cost related to franchises, pursuant to which we are granted the right to operate our cable distribution network throughout our service areas. The net carrying value of franchises as of December 31, 2003 and 2002 was approximately $13.7 billion (representing 65% of total assets) and $13.7 billion (representing 62% of total assets), respectively. Furthermore, we recorded approximately $52 million of goodwill as a result of the acquisition of High Speed Access in February 2002.

      We adopted SFAS No. 142 on January 1, 2002. SFAS No. 142 requires that franchise intangible assets that meet the indefinite life criteria no longer be amortized against earnings but instead must be tested for impairment annually or more frequently as warranted by events or changes in circumstances. In determining whether our franchises have an indefinite life, we considered the exclusivity of the franchise, the expected costs of franchise renewals, and the technological state of the associated cable systems with a view to whether or not we are in compliance with any technology upgrading requirements. We have concluded that as of January 1, 2002, December 31, 2002 and December 31, 2003 more than 99% of our franchises qualify for indefinite life treatment under SFAS No. 142, and that less than one percent of our franchises do not qualify for indefinite-life treatment due to technological or operational factors that limit their lives. Costs of finite-lived franchises, along with costs associated with franchise renewals, will be amortized on a straight-line basis over 10 years, which represents management’s best estimate of the

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average remaining useful lives of such franchises. Prior to the adoption of SFAS No. 142, our franchises were amortized over an average useful life of 15 years. Franchise amortization expense related to franchises not qualifying for indefinite life treatment totaled $9 million for each of the years ended December 31, 2003 and 2002. Franchise amortization expense was $1.5 billion, representing approximately 29% of costs and expenses, for the year ended December 31, 2001. We expect amortization expense on franchise assets will decrease to approximately $4 million annually based on our ability in 2003 to renew franchise agreements we previously classified as having finite lives without substantial costs. Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions or divestitures, changes in useful lives and other relevant factors. Our goodwill is also deemed to have an indefinite life under SFAS No. 142.

      SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets, requires that we evaluate the recoverability of our property, plant and equipment and franchise assets which did not qualify for indefinite life treatment under SFAS No. 142 upon the occurrence of events or changes in circumstances which indicate that the carrying amount of an asset may not be recoverable. Such events or changes in circumstances could include such factors as changes in technological advances, fluctuations in the fair value of such assets, adverse changes in relationships with local franchise authorities, adverse changes in market conditions or poor operating results. Under SFAS No. 144, a long-lived asset is deemed impaired when the carrying amount of the asset exceeds the projected undiscounted future cash flows associated with the asset. Furthermore, we were required to evaluate the recoverability of our indefinite life franchises, as well as goodwill, as of January 1, 2002 upon adoption of SFAS No. 142, and on an annual basis or more frequently as deemed necessary.

      Under both SFAS No. 144 and SFAS No. 142, if an asset is determined to be impaired, it is required to be written down to its estimated fair market value. We determine fair market value based on estimated discounted future cash flows, using reasonable and appropriate assumptions that are consistent with internal forecasts. Our assumptions include these and other factors: penetration rates for analog and digital video and high-speed data, revenue growth rates, expected operating margins and capital expenditures. Considerable management judgment is necessary to estimate future cash flows, and such estimates include inherent uncertainties, including those relating to the timing and amount of future cash flows and the discount rate used in the calculation. We utilize an independent third-party appraiser with expertise in the cable industry to assist in the determination of the fair value of intangible assets.

      During the first quarter of 2002, we had an independent appraiser perform valuations of our franchises as of January 1, 2002. Based on the guidance prescribed in Emerging Issues Task Force (“EITF”) Issue No. 02-7, Unit of Accounting for Testing of Impairment of Indefinite-Lived Intangible Assets, franchises were aggregated into essentially inseparable asset groups to conduct the valuations. The asset groups generally represent geographic clusters of our cable systems, which management believes represent the highest and best use of those assets. We determined that our franchises were impaired and as a result recorded the cumulative effect of a change in accounting principle of $540 million (net of tax effects of $32 million). As required by SFAS No. 142, the standard has not been retroactively applied to results for the period prior to adoption.

      We performed our annual impairment assessment as of October 1, 2002 using an independent third-party appraiser and following the guidance of EITF Issue 02-17, Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination, which was issued in October 2002 and requires the consideration of assumptions that marketplace participants would consider, such as expectations of future contract renewals and other benefits related to the intangible asset. Revised estimates of future cash flows and the use of a lower projected long-term growth rate in our valuation led to recognition of a $4.6 billion impairment charge in the fourth quarter of 2002.

      The independent third party appraiser’s valuations as of January 1, 2002, October 1, 2002 and October 1, 2003, yielded total enterprise values of approximately $30 billion, $25 billion and $25 billion, respectively, which included approximately $2.4 billion, $3.1 billion and $3.2 billion, respectively, assigned to customer relationships. SFAS No. 142 does not permit the recognition of intangible assets not

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previously recognized. Accordingly, the impairment included approximately $572 million and $3.1 billion, before tax effects, attributable to customer relationships as of January 1, 2002 and October 1, 2002, respectively. The valuation completed at October 1, 2003 showed franchise values in excess of book value and thus resulted in no impairment.

      The valuations involve numerous assumptions as noted above. While the economic conditions at the time of each valuation indicate that the combination of assumptions utilized in the appraisals are reasonable, as market conditions change so will the assumptions with a resulting impact on the valuation.

Income Taxes

      All operations of Charter are held through Charter Holdco and its direct and indirect subsidiaries, including the Issuers and their subsidiaries. Charter Holdco and the majority of its subsidiaries are not subject to income tax. However, certain of these subsidiaries are corporations and are subject to income tax. All of the taxable income, gains, losses, deductions and credits of Charter Holdco are passed through to its members: Charter, Charter Investment, Inc., and Vulcan Cable III, Inc. Charter is responsible for its share of taxable income or loss of Charter Holdco allocated to it in accordance with the Charter Holdco limited liability company agreement (the “LLC Agreement”) and partnership tax rules and regulations.

      The LLC Agreement provides for certain special allocations of net tax profits and net tax losses (such net tax profits and net tax losses being determined under the applicable federal income tax rules for determining capital accounts). Pursuant to the LLC Agreement, through the end of 2003, net tax losses of Charter Holdco that would otherwise have been allocated to Charter based generally on its percentage ownership of outstanding common units were allocated instead to membership units held by Vulcan Cable III, Inc. and Charter Investment, Inc. (the “Special Loss Allocations”) to the extent of their respective capital account balances. After 2003, pursuant to the LLC Agreement, net tax losses of Charter Holdco are to be allocated to Charter, Vulcan Cable III, Inc. and Charter Investment, Inc. based generally on their respective percentage ownership of outstanding common units to the extent of their respective capital account balances. The LLC Agreement further provides that, beginning at the time Charter Holdco generates net tax profits, the net tax profits that would otherwise have been allocated to Charter based generally on its percentage ownership of outstanding common membership units will instead generally be allocated to Vulcan Cable III, Inc. and Charter Investment, Inc. (the “Special Profit Allocations”). The Special Profit Allocations to Vulcan Cable III, Inc. and Charter Investment, Inc. will generally continue until the cumulative amount of the Special Profit Allocations offsets the cumulative amount of the Special Loss Allocations. The amount and timing of the Special Profit Allocations are subject to the potential application of, and interaction with, the Curative Allocation Provisions described in the following paragraph. The LLC Agreement generally provides that any additional net tax profits are to be allocated among the members of Charter Holdco based generally on their respective percentage ownership of Charter Holdco common membership units.

      Because the respective capital account balance of each of Vulcan Cable III, Inc. and Charter Investment, Inc. was reduced to zero by December 31, 2002, certain net tax losses of Charter Holdco that were to be allocated for 2002, 2003 (subject to resolution of the issue described in “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII”) and possibly later years to Vulcan Cable III, Inc. and Charter Investment, Inc. will instead be allocated to Charter (the “Regulatory Allocations”). The LLC Agreement further provides that, to the extent possible, the effect of the Regulatory Allocations is to be offset over time pursuant to certain curative allocation provisions (the “Curative Allocation Provisions”) so that, after certain offsetting adjustments are made, each member’s capital account balance is equal to the capital account balance such member would have had if the Regulatory Allocations had not been part of the LLC Agrement. The cumulative amount of the actual tax losses allocated to Charter as a result of the Regulatory Allocations through the year ended December 31, 2003 is approximately $2.0 billion to $2.6 billion pending the resolution of the issue described in “Certain

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Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.”

      As a result of the Special Loss Allocations and the Regulatory Allocations referred to above, the cumulative amount of losses of Charter Holdco allocated to Vulcan Cable III, Inc. and Charter Investment, Inc. is in excess of the amount that would have been allocated to such entities if the losses of Charter Holdco had been allocated among its members in proportion to their respective percentage ownership of Charter Holdco common membership units. The cumulative amount of such excess losses was approximately $3.1 billion through December 31, 2002 and $2.0 billion to $2.5 billion through December 31, 2003, depending upon the resolution of the issue described in “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.”

      In certain situations, the Special Loss Allocations, Special Profit Allocations, Regulatory Allocations and Curative Allocation Provisions described above could result in Charter paying taxes in an amount that is more or less than if Charter Holdco had allocated net tax profits and net tax losses among its members based generally on the number of common membership units owned by such members. This could occur due to differences in (i) the character of the allocated income (e.g., ordinary versus capital), (ii) the allocated amount and timing of tax depreciation and tax amortization expense due to the application of section 704(c) under the Internal Revenue Code, (iii) the potential interaction between the Special Profit Allocations and the Curative Allocation Provisions, (iv) the amount and timing of alternative minimum taxes paid by Charter, if any, (v) the apportionment of the allocated income or loss among the states in which Charter Holdco does business, and (vi) future federal and state tax laws. Further, in the event of new capital contributions to Charter Holdco, it is possible that the tax effects of the Special Profit Allocations, Special Loss Allocations, Regulatory Allocations and Curative Allocation Provisions will change significantly pursuant to the provisions of the income tax regulations. Such change could defer the actual tax benefits to be derived by Charter with respect to the net tax losses allocated to it or accelerate the actual taxable income to Charter with respect to the net tax profits allocated to it. As a result, it is possible under certain circumstances, that Charter could receive future allocations of taxable income in excess of its currently allocated tax deductions and available tax loss carryforwards.

      In addition, under their exchange agreement with Charter, Vulcan Cable III, Inc. and Charter Investment, Inc. may exchange some or all of their membership units in Charter Holdco for Charter’s Class B common stock, be merged with Charter, or be acquired by Charter in a non-taxable reorganization. If such an exchange were to take place prior to the date that the Special Profit Allocation provisions had fully offset the Special Loss Allocations, Vulcan Cable III, Inc. and Charter Investment, Inc. could elect to cause Charter Holdco to make the remaining Special Profit Allocations to Vulcan Cable III, Inc. and Charter Investment, Inc. immediately prior to the consummation of the exchange. In the event Vulcan Cable III, Inc. and Charter Investment, Inc. choose not to make such election or to the extent such allocations are not possible, Charter would then be allocated tax profits attributable to the membership units received in such exchange pursuant to the Special Profit Allocation provisions. Mr. Allen has generally agreed to reimburse Charter for any incremental income taxes that Charter would owe as a result of such an exchange and any resulting future Special Profit Allocations to Charter.

      As of December 31, 2003 and 2002, we have recorded net deferred income tax liabilities of $267 million and $252 million, respectively. Additionally, as of December 31, 2003 and 2002, we have deferred tax assets of $86 million and $80 million, respectively, which primarily relate to tax net operating loss carryforwards of certain of our indirect corporate subsidiaries. We are required to record a valuation allowance when it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Given the uncertainty surrounding our ability to utilize our deferred tax assets, these items have been offset with a corresponding valuation allowance of $51 million and $25 million at December 31, 2003 and 2002, respectively.

      Charter Holdco is currently under examination by the Internal Revenue Service for the tax years ending December 31, 1999 and 2000. Management does not expect the results of this examination to have

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a material adverse effect on our consolidated financial condition, results of operations or our liquidity, including our ability to comply with our debt covenants.

Litigation

      As described in “Business — Legal Proceedings,” numerous allegations have been made against Charter. The limited liability company agreement of CCH II may require CCH II to indemnify or reimburse Charter and the individual named defendants in connection with these matters. These legal contingencies have a high degree of uncertainty. No reserves have been established for these matters because we are unable to predict the outcome. When a contingency becomes estimable and probable, a reserve is established. We have established reserves for certain other matters. If any of the litigation matters described in “Business — Legal Proceedings” are resolved unfavorably, such resolution could have a material adverse effect on our consolidated financial condition, results of operations or our liquidity, including our ability to comply with our debt covenants.

Year Ended December 31, 2003, December 31, 2002 and December 31, 2001

      The following table sets forth the percentages of revenues that items in the accompanying consolidated statements of operations constitute for the indicated periods (dollars in millions):

		Year Ended December 31,
		2003					2002					2001
Revenues		$	4,819		100	%	$	4,566		100	%	$	3,807		100	%
Costs and expenses:
	Operating (excluding depreciation and amortization)		1,952		40	%		1,807		40	%		1,486		39	%
	Selling, general and administrative		940		19	%		963		21	%		826		22	%
	Depreciation and amortization		1,479		31	%		1,439		31	%		2,693		71	%
	Impairment of franchises		—		—			4,638		102	%		—		—
	Gain on sale of system		(21	)	—			—		—			—		—
	Option compensation expense (income), net		4		—			5		—			(5	)	—
	Special charges, net		21		—			36		1	%		18		—
	Unfavorable contracts and other settlements		(72	)	(1	)%		—		—			—		—
			4,303		89	%		8,888		195	%		5,018		132	%
Income (loss) from operations			516		11	%		(4,322	)	(95	)%		(1,211	)	(32	)%
Interest expense, net			(545	)				(512	)				(525	)
Gain (loss) on derivative instruments and hedging activities, net			65					(115	)				(50	)
Other, net			(9	)				3					(52	)
Income (loss) before minority interest, income taxes and cumulative effect of accounting change			27					(4,946	)				(1,838	)
Minority interest			(29	)				(16	)				(16	)
Loss before income taxes and cumulative effect of accounting change			(2	)				(4,962	)				(1,854	)
Income tax benefit (expense)			(13	)				216					27
Loss before cumulative effect of accounting change			(15	)				(4,746	)				(1,827	)
Cumulative effect of accounting change, net of tax			—					(540	)				(24	)
Net loss		$	(15	)			$	(5,286	)			$	(1,851	)

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Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

      Revenues. Revenues increased by $253 million, or 6%, from $4.6 billion for the year ended December 31, 2002 to $4.8 billion for the year ended December 31, 2003. This increase is principally the result of an increase of 427,500 high-speed data customers, as well as price increases for video and high-speed data services, and is offset partially by a decrease of 147,500 and 10,900 in analog and digital video customers, respectively. Included within the decrease of analog and digital video customers and reducing the increase of high-speed data customers are 25,500 analog video customers, 12,500 digital video customers and 12,200 high-speed data customers sold in the Port Orchard, Washington sale on October 1, 2003. Our goal is to increase revenues by mitigating our past analog video customer losses, implementing limited price increases on certain services and packages and increasing revenues from incremental high-speed data services, digital video and advanced products and services such as digital video recorders, high definition television, VOD and telephony using VOIP to our existing customer base and commercial customers.

      Average monthly revenue per analog video customer increased from $56.91 for the year ended December 31, 2002 to $61.92 for the year ended December 31, 2003. Average monthly revenue per analog video customer represents total annual revenue, divided by twelve, divided by the average number of analog video customers.

      Revenues by service offering are as follows (dollars in millions):

	Year Ended December 31,
	2003					2002					2003 over 2002
			% of					% of
	Revenues		Revenues			Revenues		Revenues			Change			% Change
Video	$	3,461		72	%	$	3,420		75	%	$	41			1	%
High-speed data		556		12	%		337		7	%		219			65	%
Advertising sales		263		5	%		302		7	%		(39	)		(13	)%
Commercial		204		4	%		161		3	%		43			27	%
Other		335		7	%		346		8	%		(11	)		(3	)%
	$	4,819		100	%	$	4,566		100	%	$	253			6	%

      Video revenues consist primarily of revenues from analog and digital video services provided to our non-commercial customers. Video revenues increased by $41 million, or 1%, for the year ended December 31, 2003 compared to the year ended December 31, 2002. The increase was primarily due to price increases partially offset by a decline in analog and digital video customers.

      Revenues from high-speed data services provided to our non-commercial customers increased $219 million, or 65%, from $337 million for the year ended December 31, 2002 to $556 million for the year ended December 31, 2003. Approximately 93% of the increase related to the increase in the average number of customers, whereas approximately 7% related to the increase in average price of the service. The increase was primarily due to the addition of high-speed data customers within our existing service areas. We were also able to offer this service to more of our customers, as the estimated percentage of homes passed that could receive high-speed data service increased from 82% as of December 31, 2002 to 87% as of December 31, 2003 as a result of our system upgrades.

      Advertising sales revenues consist primarily of revenues from commercial advertising customers, programmers and other vendors. Advertising sales decreased $39 million, or 13%, from $302 million for the year ended December 31, 2002, to $263 million for the year ended December 31, 2003 primarily as a result of a decrease in advertising from vendors offset partially by an increase in local advertising sales revenues. For the years ended December 31, 2003 and 2002, we received $15 million and $79 million, respectively, in advertising revenue from vendors.

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      Commercial revenues consist primarily of revenues from video and high-speed data services to our commercial customers. Commercial revenues increased $43 million, or 27%, from $161 million for the year ended December 31, 2002, to $204 million for the year ended December 31, 2003, primarily due to an increase in commercial high-speed data revenues.

      Other revenues consist of revenues from franchise fees, equipment rental, customer installations, home shopping, dial-up Internet service, late payment fees, wire maintenance fees and other miscellaneous revenues. For the year ended December 31, 2003 and 2002, franchise fees represented approximately 48% and 46%, respectively, of total other revenues. Other revenues decreased $11 million, or 3%, from $346 million for the year ended December 31, 2002 to $335 million for the year ended December 31, 2003. The decrease was due primarily to a decrease in franchise fees after an FCC ruling in March 2002, no longer requiring the collection of franchise fees for high-speed data services. Franchise fee revenues are collected from customers and remitted to franchise authorities.

      The decrease in accounts receivable of 29% compared to the increase in revenues of 6% is primarily due to the timing of collection of receivables from programmers for fees associated with the launching of their networks coupled with our tightened credit and collections policy. These fees from programmers are not recorded as revenue but, rather, are recorded as reductions of programming expense on a straight-line basis over the term of the contract. Programmer receivables decreased $40 million, or 57%, from $70 million as of December 31, 2002 to $30 million as of December 31, 2003.

      Operating expenses. Operating expenses increased $145 million, or 8%, from $1.8 billion for the year ended December 31, 2002 to $2.0 billion for the year ended December 31, 2003. Programming costs included in the accompanying consolidated statements of operations were $1.2 billion and $1.2 billion, representing 64% and 65% of total operating expenses for the years ended December 31, 2003 and 2002, respectively. Key expense components as a percentage of revenues are as follows (dollars in millions):

	Year Ended December 31,
	2003					2002					2003 over 2002
			% of					% of					%
	Expenses		Revenues			Expenses		Revenues			Change		Change
Programming	$	1,249		26	%	$	1,166		26	%	$	83		7	%
Advertising sales		88		2	%		87		2	%		1		1	%
Service		615		12	%		554		12	%		61		11	%
	$	1,952		40	%	$	1,807		40	%	$	145		8	%

      Programming costs consist primarily of costs paid to programmers for the provision of analog, premium and digital channels and pay-per-view programs. The increase in programming costs of $83 million, or 7%, was due to price increases, particularly in sports programming, and due to an increased number of channels carried on our systems, partially offset by decreases in analog and digital video customers. Programming costs were offset by the amortization of payments received from programmers in support of launches of new channels against programming costs of $62 million and $57 million for the years ended December 31, 2003 and 2002, respectively.

      Our cable programming costs have increased, in every year we have operated, in excess of customary inflationary and cost-of-living type increases, and we expect them to continue to increase due to a variety of factors, including additional programming being provided to customers as a result of system rebuilds that increase channel capacity, increased costs to produce or purchase cable programming and inflationary or negotiated annual increases. Our increasing programming costs will result in declining video product margins to the extent we are unable to pass on cost increases to our customers. We expect to partially offset any resulting margin compression from our traditional video services with revenue from advanced video services, increased incremental high-speed data revenues, advertising revenues and commercial services revenues.

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      Advertising sales expenses consist of costs related to traditional advertising services provided to advertising customers, including salaries and benefits and commissions. Advertising sales expenses increased $1 million, or 1%, primarily due to increased sales commissions, taxes and benefits. Service costs consist primarily of service personnel salaries and benefits, franchise fees, system utilities, Internet service provider fees, maintenance and pole rent expense. The increase in service costs of $61 million, or 11%, resulted primarily from additional activity associated with ongoing infrastructure maintenance and customer service, including activities associated with our promotional program.

      Selling, general and administrative expenses. Selling, general and administrative expenses decreased by $23 million, or 2%, from $963 million for the year ended December 31, 2002 to $940 million for the year ended December 31, 2003. Key components of expense as a percentage of revenues are as follows (dollars in millions):

	Year Ended December 31,
	2003					2002					2003 over 2002
			% of					% of						%
	Expenses		Revenues			Expenses		Revenues			Change			Change
General and administrative	$	833		17	%	$	810		18	%	$	23			3	%
Marketing		107		2	%		153		3	%		(46	)		(30	)%
	$	940		19	%	$	963		21	%	$	(23	)		(2	)%

      General and administrative expenses consist primarily of salaries and benefits, rent expense, billing costs, call center costs, internal network costs, bad debt expense and property taxes. The increase in general and administrative expenses of $23 million, or 3%, resulted primarily from increases in salaries and benefits of $4 million, call center costs of $25 million and internal network costs of $16 million. These increases were partially offset by a decrease in bad debt and collection expense of $27 million as we continue to realize benefits from our strengthened credit policies.

      Marketing expenses decreased $46 million, or 30%, due to reduced promotional activity related to our service offerings including reductions in advertising, telemarketing and direct sales activities. However, we expect marketing expenses to increase in 2004.

      Depreciation and amortization. Depreciation and amortization expense increased by $40 million, or 3%, from $1.4 billion in 2002 to $1.5 billion in 2003 due primarily to an increase in depreciation expense related to additional capital expenditures in 2003 and 2002.

      Impairment of franchises. We performed our annual impairment assessments on October 1, 2002 and 2003 using an independent third-party appraiser. Revised estimates of future cash flows and the use of a lower projected long-term growth rate in our valuation led to a $4.6 billion impairment charge in the fourth quarter of 2002. Our 2003 assessment performed on October 1, 2003 did not result in an impairment. We do not expect to incur impairment charges of comparable magnitude to the 2002 charge in the future.

      Gain on sale of system. Gain on sale of system of $21 million for the year ended December 31, 2003 represents the gain recognized on the sale of cable systems in Port Orchard, Washington which closed on October 1, 2003.

      Option compensation expense (income), net. Option compensation expense decreased by $1 million for the year ended December 31, 2003 compared to the year ended December 31, 2002. Option compensation expense includes expense related to exercise prices on certain options that were issued prior to Charter’s initial public offering in 1999 that were less than the estimated fair values of Charter’s common stock at the time of grant. Compensation expense is being recognized over the vesting period of such options and will continue to be recorded until the last vesting period lapses in April 2004. On January 1, 2003, we adopted SFAS No. 123, Accounting for Stock-Based Compensation, using the prospective method under which we will recognize compensation expense of a stock-based award to an employee over the vesting period based on the fair value of the award on the grant date.

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      Special charges, net. Special charges of $21 million for the year ended December 31, 2003 represent approximately $26 million of severance and related costs of our ongoing initiative to reduce our workforce partially offset by a $5 million credit from a settlement from the Internet service provider Excite@Home related to the conversion of about 145,000 high-speed data customers to our Charter Pipeline service in 2001. In the fourth quarter of 2002, we recorded a special charge of $35 million, of which $31 million is associated with our workforce reduction program. The remaining $4 million is related to legal and other costs associated with our shareholder lawsuits and governmental investigations. We expect to continue to record additional special charges in 2004 related to the reorganization of our operations and costs of litigation.

      Unfavorable contracts and other settlements. Unfavorable contracts and other settlements of $72 million for the year ended December 31, 2003 represents the settlement of estimated liabilities recorded in connection with prior business combinations. The majority of this benefit (approximately $52 million) is due to the renegotiation in 2003 of a major programming contract, for which a liability had been recorded for the above-market portion of that agreement in conjunction with the Falcon acquisition in 1999 and the Bresnan acquisition in 2000. The remaining benefit relates to the reversal of previously recorded liabilities, which, based on an evaluation of current facts and circumstances, are no longer required.

      Interest expense, net. Net interest expense increased by $33 million, or 6%, from $512 million for the year ended December 31, 2002 to $545 million for the year ended December 31, 2003. The increase in net interest expense was a result of increased average debt outstanding in 2003 of $8.9 billion compared to $7.5 billion in 2002. The increased debt was primarily used for capital expenditures.

      Gain (loss) on derivative instruments and hedging activities, net. Net gain on derivative instruments and hedging activities increased $180 million from a loss of $115 million for the year ended December 31, 2002 to a gain of $65 million for the year ended December 31, 2003. The increase is primarily due to an increase in gains on interest rate agreements, which do not qualify for hedge accounting under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which increased from a loss of $101 million for the year ended December 31, 2002 to a gain of $57 million for the year ended December 31, 2003.

      Other, net. Other expense increased by $12 million from $3 million of income in 2002 to $9 million of expense in 2003. This increase is primarily due to increases in costs associated with amending a revolving credit facility of our subsidiaries and costs associated with terminated debt transactions.

      Minority interest. Minority interest represents the 10% dividend on preferred membership units in our indirect subsidiary, Charter Helicon, LLC and the 2% accretion of the preferred membership interests in our indirect subsidiary, CC VIII, LLC, and since June 6, 2003, the pro rata share of the profits of CC VIII, LLC. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.”

      Income tax benefit (expense). Income tax expense of $13 million was recognized for the year ended December 31, 2003. The income tax expense is realized through increases in deferred tax liabilities and federal and state income taxes related to our indirect corporate subsidiaries. The income tax benefit of $216 million recognized for the year ended December 31, 2002 was the result of changes in deferred tax liabilities of certain of our indirect corporate subsidiaries related to differences in accounting for franchises.

      Cumulative effect of accounting change, net of tax. Cumulative effect of accounting change in 2002 represents the impairment charge recorded as a result of adopting SFAS No. 142.

      Net loss. Net loss decreased by $5.3 billion, or 100%, from $5.3 billion in 2002 to $15 million in 2003 as a result of the factors described above. The impact of the gain on sale of system and unfavorable contracts and settlements, net of income tax impacts, was to decrease net loss by $93 million in 2003. The impact of the impairment of franchises and the cumulative effect of accounting change, net of income tax impacts, was to increase net loss by $5.1 billion in 2002.

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Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Revenues

      Revenues increased by $759 million, or 20%, from $3.8 billion in 2001 to $4.6 billion in 2002. This increase is principally the result of an increase of 538,000 and 585,200 in the number of digital video and high-speed data customers, respectively, as well as price increases, and is offset by a decrease of 357,400 in analog video customers. Average monthly revenue per analog video customer increased from $45.68 in 2001 to $56.91 in 2002. Average monthly revenue per analog video customer represents total annual revenue, divided by twelve, divided by the average number of analog video customers.

      Revenues by service offering are as follows (dollars in millions):

	Year Ended December 31,
	2002					2001					2002 over 2001
			% of					% of						%
	Revenues		Revenues			Revenues		Revenues			Change			Change
Video	$	3,420		75	%	$	2,971		78	%	$	449			15	%
High-speed data		337		7	%		148		4	%		189			128	%
Advertising sales		302		7	%		197		5	%		105			53	%
Commercial		161		3	%		123		3	%		38			31	%
Other		346		8	%		368		10	%		(22	)		(6	)%
	$	4,566		100	%	$	3,807		100	%	$	759			20	%

      Video revenues consist primarily of revenues from analog and digital video services provided to our non-commercial customers. Video revenues increased by $449 million, or 15%, to $3.4 billion in 2002 compared to $3.0 billion in 2001. The increase was due to a full year of revenue from the AT&T Broadband systems acquired in June 2001, general price increases and the addition of approximately 538,000 digital video customers partially offset by a reduction of approximately 357,400 analog video customers. Overall, the net increase in the average number of customers resulted in approximately 7% of the increase in video revenue, whereas approximately 93% resulted from the increase in average price of our video products.

      Revenues from high-speed data services provided to our non-commercial customers increased $189 million, or 128%, from $148 million for the year ended December 31, 2001 to $337 million for the year ended December 31, 2002. Approximately 73% of the increase related to the increase in the average number of customers, whereas approximately 27% related to the increase in average price of the service. The increase was primarily due to the addition of 585,200 high-speed data customers. Between 2001 and 2002, we were able to offer this service to more of our customers, as the estimated percentage of homes passed that could receive high-speed data service increased from 66% to 82% as a result of our ongoing system upgrades.

      Advertising sales revenues consist primarily of revenues from commercial advertising customers, programmers and other vendors. Advertising sales increased $105 million, or 53%, from $197 million in 2001 to $302 million in 2002. The increase was due to an increase of $53 million, from $13 million in 2001 to $66 million in 2002, in advertising contracts with programmers, $40 million of additional sales primarily due to the increased advertising capacity as a result of an increased number of channels carried by our systems and $14 million related to the acquisition of AT&T Broadband systems in June 2001. For the years ended December 31, 2002 and 2001, we received $13 million and $14 million, respectively, in advertising revenues from our two largest suppliers of digital set-top terminals, representing 0.3% and 0.4% of total revenues, respectively. Revenues from advertising provided to vendors and programmers are recognized based upon the fair value of advertising. Vendor advertising purchases are made pursuant to written agreements that are generally consistent with other third-party commercial advertising agreements and at prices that we believe approximate fair value. In some cases we purchased equipment from the vendors at the same time.

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      Commercial revenues consist primarily of revenues from video and high-speed data services to our commercial customers. Commercial revenues increased $38 million, or 31%, from $123 million for the year ended December 31, 2001, to $161 million for the year ended December 31, 2002, primarily due to an increase in commercial high-speed data revenues.

      Other revenues consist of revenues from franchise fees, equipment rental, customer installations, home shopping, dial-up Internet service, late payment fees, wire maintenance fees, and other miscellaneous revenues. For the years ended December 31, 2002 and 2001, franchise fees represented approximately 46% and 39%, respectively, of total other revenues. Other revenues decreased $22 million, or 6%, from $368 million for the year ended December 31, 2001 to $346 million for the year ended December 31, 2002. The decrease was due to decreases in late payment fees charged to customers and other miscellaneous revenues. Franchise fee revenues are collected from customers and remitted to franchise authorities.

      The decrease in accounts receivable of 9% compared to the increase in revenues of 20% is primarily due to the timing of collection of receivables from programmers for fees associated with the launching of their networks, coupled with our tightened credit and collections policy. These fees from programmers are not recorded as revenue but, rather, are recorded as reductions of programming expense on a straight-line basis over the term of the contract. Programmer receivables decreased $27 million, or 28%, from $97 million as of December 31, 2001 to $70 million as of December 31, 2002.

Operating expenses

      Operating expenses increased $321 million, or 22%, from $1.5 billion in 2001 to $1.8 billion in 2002. Programming costs included in the accompanying consolidated statements of operations were $1.2 billion and $963 million, representing 65% of total operating expenses for the years ended December 31, 2002 and 2001, respectively. Key expense components as a percentage of revenues are as follows (dollars in millions):

	Year Ended December 31,
	2002					2001					2002 over 2001
			% of					% of					%
	Expenses		Revenues			Expenses		Revenues			Change		Change
Programming	$	1,166		26	%	$	963		25	%	$	203		21	%
Advertising sales		87		2	%		64		2	%		23		36	%
Service		554		12	%		459		12	%		95		21	%
	$	1,807		40	%	$	1,486		39	%	$	321		22	%

      Programming costs consist primarily of costs paid to programmers for the provision of analog, premium and digital channels and pay-per-view programs. The increase in programming costs of $203 million, or 21%, was primarily due to price increases, particularly in sports programming, an increased number of channels carried on our systems and an increase in digital video customers. In addition, approximately $51 million of the increase results from a full year of costs related to the acquisition of AT&T Broadband systems in June 2001. Programming costs were offset by the amortization of payments received from programmers in support of launches of new channels against programming costs of $57 million and $35 million for the years ended December 31, 2002 and 2001, respectively.

      Advertising sales expenses consist of costs related to traditional advertising services provided to advertising customers, including salaries and benefits and commissions. Advertising sales expenses increased $23 million, or 36%, primarily due to increased sales commissions resulting from the increase in advertising revenues. Service costs consist primarily of service personnel salaries and benefits, franchise fees, system utilities, Internet service provider fees, maintenance and pole rent expense. The increase in service costs of $95 million, or 21%, resulted primarily from our growth in digital video and high-speed data services.

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Selling, general and administrative expenses

      Selling, general and administrative expenses increased by $137 million, or 17%, from $826 million for the year ended December 31, 2001 to $963 million for the year ended December 31, 2002. Key components of expense as a percentage of revenues are as follows (dollars in millions):

	Year Ended December 31,
	2002					2001					2002 over 2001
			% of					% of					%
	Expenses		Revenues			Expenses		Revenues			Change		Change
General and administrative	$	810		18	%	$	689		18	%	$	121		18	%
Marketing		153		3	%		137		4	%		16		12	%
	$	963		21	%	$	826		22	%	$	137		17	%

      General and administrative expenses consist primarily of salaries and benefits, rent expense, billing costs, call center costs, internal network costs, bad debt expense and property taxes. The increase in general and administrative expenses of $121 million, or 18%, resulted primarily from increases in salaries and benefits of $66 million, bad debt and collection expense of $24 million and insurance of $13 million. The increase in bad debt expense resulted primarily from continuing effects of our aggressive discounting of our analog video service during late 2000 and most of 2001 in an effort to grow our customer base and respond to price competition from satellite providers. This practice led to an increase in customers during the discounted period whose service was subsequently disconnected for non-payment or who subsequently cancelled their service without payment for services provided. We also lengthened the period during which we extended credit to customers, which increased exposure to customers whose accounts were subject to cancellation and increased bad debt expense. These increases were partially offset by a decrease in billing expenses of $12 million as a result of renegotiated contracts with third-party billing providers.

      Marketing expenses increased $16 million, or 12%, due to increased costs associated with promotions of our service offerings including advertising, telemarketing and direct sales.

Depreciation and amortization

      Depreciation and amortization expense decreased by $1.3 billion, or 47%, from $2.7 billion in 2001 to $1.4 billion in 2002. This decrease was due primarily to the adoption on January 1, 2002 of SFAS No. 142, which requires that franchise intangible assets that meet the indefinite life criteria of SFAS No. 142 no longer be amortized against earnings but instead be tested for impairment on an annual basis. As a result of this change, total amortization of franchise assets decreased from $1.5 billion in 2001 to $9 million in 2002. The decrease was partially offset by the increase in depreciation expense related to additional capital expenditures in 2002.

Impairment of franchises

      We performed our annual impairment assessment on October 1, 2002 using an independent third-party appraiser. Revised estimates of future cash flows and the use of a lower projected long-term growth rate in our valuation led to a $4.6 billion impairment charge in the fourth quarter of 2002. We do not expect to incur impairment charges of comparable magnitude in the future.

Option compensation expense (income), net

      Option compensation expense increased by $10 million from $5 million of net benefit in 2001 to $5 million of expense in 2002. The net benefit in 2001 was primarily the result of the reversal of $22 million of expense previously recorded in connection with approximately 7 million options for which the rights were waived by our former President and Chief Executive Officer as part of his September 2001 separation agreement. Option compensation expense was recorded in 2002 because exercise prices on certain options issued prior to Charter’s initial public offering in 1999 were less than the estimated fair

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values of Charter’s common stock at the time of grant. Compensation expense is being recognized over the vesting period of such options, which ends in April 2004. On January 1, 2003, we adopted SFAS No. 123 using the prospective method under which we recognize compensation expense of a stock-based award to an employee over the vesting period based on the fair value of the award on the grant date. For more information see “Note 16” to our consolidated financial statements included elsewhere in this prospectus.

Special charges, net

      In the fourth quarter of 2002, we recorded a special charge of $35 million, of which $31 million is associated with our workforce reduction program. The remaining $4 million is related to legal and other costs associated with our shareholder lawsuits and governmental investigations. Special charges of $18 million in 2001 represent charges associated with the transition of approximately 145,000 data customers from the Excite@Home Internet service to our Charter Pipeline service, as well as employee severance costs.

Interest expense, net

      Net interest expense decreased by $13 million, or 2%, from $525 million in 2001 to $512 million in 2002. The decrease in net interest expense was a result of a decrease in our average borrowing rate from 6.8% in 2001 to 5.9% in 2002, partially offset by an increase in average debt outstanding in 2002 of $7.5 billion compared to $6.7 billion in 2001. The increased debt was used for capital expenditures.

Gain (loss) on derivative instruments and hedging activities, net

      Loss on derivative instruments and hedging activities increased $65 million from $50 million for the year ended December 31, 2001 to $115 million for the year ended December 31, 2002. The increase is primarily due to an increase in losses on interest rate agreements which do not qualify for hedge accounting under SFAS No. 133, which increased from $48 million for the year ended December 31, 2001 to $101 million for the year ended December 31, 2002.

Other, net

      Other expense decreased by $55 million from expense of $52 million in 2001 to income of $3 million in 2002. This decrease is primarily due to a decrease of $49 million in losses on equity investments, $38 million of which was related to our investment in High Speed Access, a related party, which is described more fully in “Certain Relationships and Related Transactions.”

Minority interest

      Minority interest expense represents the 10% dividend on preferred membership units in our indirect subsidiary, Charter Helicon, LLC, and the 2% accretion of the preferred membership interests in our indirect subsidiary, CC VIII, LLC, issued to certain sellers of the CC VIII systems. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.”

Income tax benefit

      Income tax benefit of $216 million and $27 million were recognized for the years ended December 31, 2002 and 2001, respectively. The income tax benefits were realized as a result of changes in deferred tax liabilities of certain of our indirect corporate subsidiaries related to differences in accounting for franchises.

Cumulative effect of accounting change, net of tax

      Cumulative effect of accounting change in 2002 represents the impairment charge recorded as a result of adopting SFAS No. 142. Cumulative effect of accounting change in 2001 represents losses incurred upon adoption of SFAS No. 133.

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Net loss

      Net loss increased by $3.4 billion, from $1.9 billion in 2001 to $5.3 billion in 2002 as a result of the combination of factors described above. The impact of the impairment of franchises and the cumulative effect of accounting change, net of income tax impacts, was to increase net loss by $5.1 billion in 2002. This was offset somewhat by the decrease in amortization expense, net of income tax impacts in 2002 versus 2001 of $1.5 billion as a result of the adoption of SFAS No. 142.

Liquidity and Capital Resources

Introduction

      This section contains a discussion of our liquidity and capital resources, including a discussion of our cash position, sources and uses of cash, access to debt facilities and other financing sources, historical financing activities, cash needs, capital expenditures and outstanding debt.

Overview

      Our business requires significant cash to fund capital expenditures, our and our parent companies’ debt service costs and ongoing operations. We have historically funded our operating activities and capital requirements through cash flows from operating activities, borrowings under the credit facilities of our subsidiaries and funds raised by our indirect parent companies, Charter, Charter Holdco and Charter Holdings. The mix of funding sources changes from period to period, but for the year ended December 31, 2003, approximately 85% of our funding requirements were from cash flows from operating activities and 15% was from cash on hand. We expect that our mix of sources of funds will continue to change in the future based on our overall needs relative to our cash flow and on the availability under the credit facilities of our subsidiaries, our access to the debt markets, the ability of our parent companies to access the debt and equity markets and our ability to generate cash flows from operating activities.

      In April, 2004, our indirect subsidiary, Charter Operating, sold $1.5 billion of senior second lien notes and amended and restated its existing $5.1 billion credit facilities, among other things, to defer maturities and increase availability under those facilities to approximately $6.5 billion, consisting of a $1.5 billion revolving credit facility, a $2.0 billion 6-year term loan facility and a $3.0 billion 7-year term loan facility. Charter Operating used additional borrowings under the amended and restated credit facilities, together with proceeds from the sale of its senior second lien notes, to refinance the credit facilities of its subsidiaries, CC VI Operating, Falcon, and CC VIII Operating, all in one concurrent transaction.

      As part of our plan to sell certain non-strategic assets, on October 1, 2003, we completed the sale of our Port Orchard, Washington system for approximately $91 million, subject to adjustments. Additionally, on March 1, 2004, Charter Holdings and several of its subsidiaries closed the sale of cable systems in Florida, Pennsylvania, Maryland, Delaware and West Virginia. An additional closing for a cable system in New York occurred on April 30, 2004. Subject to post-closing contractual adjustments, the net proceeds from these transactions are expected to be approximately $733 million, of which (i) $10 million is currently held in an indemnity escrow account (with the unused portion thereof expected to be released to us by March 1, 2005) and (ii) approximately $9 million was received upon the closing of the Salamanca, New York sale. The net proceeds received have been used to repay a portion of our subsidiaries’ credit facilities.

      In September 2003, CCH II, Charter and Charter Holdings purchased, in a non-monetary transaction, a total of approximately $609 million principal amount of Charter’s convertible senior notes and approximately $1.3 billion principal amount of the senior notes and senior discount notes issued by Charter Holdings from institutional investors in a small number of privately negotiated transactions. As consideration for these securities, CCH II issued approximately $1.6 billion principal amount of 10.25% senior notes due 2010, resulting in a reduction of parent company debt outstanding of approximately $294 million. The transactions were effected through a distribution by CCH II to Charter and Charter Holdings. CCH II also issued an additional $30 million principal amount of 10.25% senior notes

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for cash and used the proceeds for transaction costs and for general corporate purposes. As a result of the transaction, maturities were extended for a majority of the debt exchanged. Also, in November 2003, CCO Holdings sold $500 million total principal amount of 8 3/4% senior notes due 2013, the proceeds of which were used to repay (but not to reduce permanently) amounts outstanding under our subsidiary credit facilities.

      We are currently in compliance with the covenants under the amended and restated Charter Operating credit facilities, our indentures and those of our subsidiaries, and we expect to remain in compliance with those covenants throughout 2004. The sale of $1.5 billion of senior second lien notes by Charter Operating was part of a refinancing plan that included the amendment and restatement of the Charter Operating credit facilities, among other things, to extend maturities and increase availability thereunder and the concurrent use of proceeds to refinance subsidiary credit facilities. As of December 31, 2003, we held $85 million in cash and cash equivalents. Further, at the closing of the Charter Operating offering and the related refinancing, we had unused availability of approximately $1.1 billion under the amended and restated Charter Operating credit facilities. As a result, we expect that our cash on hand, cash flows from operating activities and the amounts available under our amended and restated Charter Operating credit facilities should be sufficient to satisfy our liquidity needs for the foreseeable future. If there is an event of default under the amended and restated Charter Operating credit facilities, such as the failure to maintain the applicable required financial ratios, we would be unable to borrow under these credit facilities, which could materially adversely impact our ability to operate our business and to make payments under our debt instruments.

      Charter’s ability to make interest payments, or principal payments at maturity in 2005 and 2006, on its convertible senior notes is dependent on its ability to obtain additional financing or on Charter Holdings and its other subsidiaries making distributions, loans, or payments to Charter Holdco, and Charter Holdco paying or distributing such funds to Charter. Our parent companies have a substantial amount of debt. Any financial or liquidity problems of our parent companies would likely cause serious disruption to our business and have a material adverse effect on our operations and results.

      In the past, our parent companies have accessed the equity and high-yield bond markets as a source of capital for their subsidiaries’ growth. We believe that our parent companies’ continued access to the debt markets will depend on market conditions in light of general economic conditions, the business condition of the cable, telecommunications and technology industry, their significant levels of debt, and their debt ratings. If they are unable to raise the required capital on reasonable terms, our parent companies may elect to cause us or our operating subsidiaries to distribute or otherwise pay to them (to the extent permitted by the indenture governing the notes and the indentures governing the Charter Holdings notes and CCO Holdings notes) the necessary funds to service or repay Charter’s or Charter Holdings’ debt, thereby impacting our liquidity.

Summary of Outstanding Contractual Obligations

      The following table summarizes our payment obligations as of December 31, 2003 under our long-term debt and certain other contractual obligations and commitments (dollars in millions):

				Payments by Period
				Less than		1-3		3-5		More than
		Total		1 Year		years		years		5 years
Contractual Obligations
Long-Term Debt(1)		$	9,555	$	188	$	1,425	$	5,841	$	2,101
Capital and Operating Lease Obligations(1)			80		19		29		14		18
Programming Minimum Commitments(2)			1,949		320		684		703		242
	Other(3)		282		63		86		49		84
	Total	$	11,866	$	590	$	2,224	$	6,607	$	2,445

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(1)	The tables present maturities of long-term debt outstanding as of December 31, 2003 and does not reflect the effects of the sale of the Charter Operating senior second lien notes and the amendment and restatement of the Charter Operating credit facilities. Refer to “Description of Certain Indebtedness” and Notes 9 and 20 to our consolidated financial statements attached hereto for a description of our long-term debt and other contractual obligations and commitments.
(2)	We pay programming fees under multi-year contracts ranging from three to six years typically based on a flat fee per customer, which may be fixed for the term or may in some cases, escalate over the term. Programming costs included in the accompanying statement of operations were $1.2 billion, $1.2 billion and $963 million for the years ended December 31, 2003, 2002 and 2001, respectively. Certain of our programming agreements are based on a flat fee per month or have guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under our programming contracts.
(3)	“Other” represents other guaranteed minimum commitments, which consist primarily of commitments to our billing services vendors.

      The following items are not included in the contractual obligations table due to various factors discussed below. However, we incur these costs as part of our operations:

•  We also rent utility poles used in our operations. Generally, pole rentals are cancelable on short notice, but we anticipate that such rentals will recur. Rent expense incurred for pole rental attachments for the years ended December 31, 2003, 2002 and 2001, was $40 million, $41 million and $33 million, respectively.

•  We pay franchise fees under multi-year franchise agreements based on a percentage of revenues earned from video service per year. We also pay other franchise-related costs, such as public education grants under multi-year agreements. Franchise fees and other franchise-related costs included in the accompanying statement of operations were $162 million, $160 million and $144 million for the years ended December 31, 2003, 2002 and 2001, respectively.

•  We also have $153 million in letters of credit, primarily to our various worker’s compensation, property casualty and general liability carriers as collateral for reimbursement of claims. These letters of credit reduce the amount we may borrow under our credit facilities.

Historical Operating, Financing and Investing Activities

      We held $85 million in cash and cash equivalents as of December 31, 2003, compared to $310 million as of December 31, 2002. The decrease in cash and cash equivalents reflects the use of cash in funding operations, capital expenditures and debt service cost.

      Operating Activities. Net cash provided by operating activities for the years ended December 31, 2003, 2002 and 2001 was $1.3 billion, $1.3 billion and $975 million, respectively. Net cash flows from operating activities were relatively unchanged for 2003 compared to 2002 primarily due to an increase in revenue over cash costs year over year almost equally offset by changes in operating assets and liabilities that provided $105 million less cash in 2003 than 2002.

      Operating activities provided $350 million more cash in 2002 than in 2001 primarily due to increased revenues of $759 million over 2001 and changes in operating assets and liabilities that provided $39 million more cash in 2002 than in 2001 offset in part by increases in operating expenses and cash interest expense.

      Investing Activities. Net cash used in investing activities for the years ended December 31, 2003, 2002 and 2001 was $757 million, $2.3 billion and $4.6 billion, respectively. Net cash flows from investing activities used $1.5 billion less cash in 2003 than in 2002 primarily as a result of reductions in capital expenditures and acquisitions. Purchases of property, plant and equipment used $1.3 billion less cash in 2003 than in 2002 as a result of reduced rebuild and upgrade activities and our efforts to reduce capital expenditures. Payments for acquisitions used $139 million less cash in 2003 than in 2002.

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      Net cash flows from investing activities used $2.3 billion less cash in 2002 than in 2001 primarily as a result of reductions in capital expenditures and acquisitions. Purchases of property, plant and equipment used $700 million less cash in 2002 than in 2001 as a result of our efforts to reduce capital expenditures. Payments for acquisitions used $1.6 billion less cash in 2002 than in 2001.

      Financing Activities. Net cash used in financing activities was $789 million for the year ended December 31, 2003, whereas net cash provided by financing activities for the years ended December 31, 2002 and 2001 was $1.3 billion and, $3.5 billion, respectively. Net cash flows from financing activities provided $2.1 billion less cash in 2003 than in 2002. The decrease in cash provided in 2003 compared to 2002 was primarily due to decreases in borrowings of long-term debt and capital contributions.

      Net cash flows from financing activities provided $2.3 billion less cash in 2002 than in 2001. The decrease in cash provided in 2002 as compared to 2001 was primarily due to a decrease of $3.4 billion in the proceeds of capital contributions from Charter Holdings in 2002 than in 2001.

Capital Expenditures

      We have significant ongoing capital expenditure requirements. However, we experienced a significant decline in such requirements in 2003, compared to prior years. This decline in 2003 was primarily the result of a substantial reduction in rebuild costs as our network had been largely upgraded and rebuilt in prior years, consumption of inventories, negotiated savings in contract labor and network components including digital set-top terminals and cable modems and reduced volume of installation related activities. Capitalized labor and overhead declined $161 million in 2003 compared to 2002. Capital expenditures, excluding acquisitions of cable systems, were $804 million, $2.1 billion and $2.8 billion for the years ended December 31, 2003, 2002 and 2001, respectively. The majority of the capital expenditures in 2003 related to our customer premise equipment. The majority of the capital expenditures in 2002 related to our rebuild and upgrade program and purchases of customer premise equipment. See table below for more details.

      Upgrading our cable systems has enabled us to offer digital television, high-speed data services, VOD, interactive services, additional channels and tiers, and expanded pay-per-view options to a larger customer base. Our capital expenditures are funded primarily from cash flows from operating activities, the issuance of debt and borrowings under credit facilities. In addition, during the years ended December 31, 2003, 2002 and 2001, our liabilities related to capital expenditures decreased $41 million, $49 million and $103 million, respectively.

      During 2004, we expect to spend a total of $850 million to $950 million on capital expenditures. The nature of these expenditures is expected to continue to migrate from upgrade/rebuild to customer premise equipment and scalable infrastructure. Expected capital expenditures for 2004 are consistent with our total capital expenditures for 2003 and significantly lower than 2002 levels because our rebuild and upgrade plans are largely completed, a greater portion of our work force is focused on maintenance and period related activities, our purchases of digital set-top terminals have declined and the volume of installation related activities has declined. We expect to fund capital expenditures for 2004 primarily from cash flows from operating activities and borrowings under our subsidiary’s credit facilities.

      We have adopted capital expenditure disclosure guidance, which was developed by eleven publicly traded cable system operators, including Charter, with the support of the National Cable & Telecommunications Association (“NCTA”). The new disclosure is intended to provide more consistency in the reporting of operating statistics in capital expenditures and customers among peer companies in the cable industry. These disclosure guidelines are not required disclosure under GAAP, nor do they impact our accounting for capital expenditures under GAAP.

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      The following table presents our major capital expenditures categories in accordance with NCTA disclosure guidelines for the years ended December 31, 2003 and 2002 (dollars in millions):

		Years Ended
		December 31,
		2003		2002
Customer premise equipment(a)		$	380	$	740
Scalable infrastructure(b)			66		259
Line extensions(c)			130		101
Upgrade/ Rebuild(d)			132		775
Support capital(e)			96		220
	Total capital expenditures(f)	$	804	$	2,095

(a)	Customer premise equipment includes costs incurred at the customer residence to secure new customers, revenue units and additional bandwidth revenues. It also includes customer installation costs in accordance with SFAS No. 51 and customer premise equipment (e.g., set-top terminals and cable modems, etc.).
(b)	Scalable infrastructure includes costs, not related to customer premise equipment or our network, to secure growth of new customers, revenue units and additional bandwidth revenues or provide service enhancements (e.g., headend equipment).
(c)	Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
(d)	Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.
(e)	Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles).

(f)  Represents all capital expenditures made in 2003 and 2002, respectively.

Recently Issued Accounting Standards

      In December 2003, the FASB issued FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities (“FIN 46R”), which addresses how a business enterprise should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN 46R replaces FASB Interpretation No. 46, Consolidation of Variable Interest Entities, which was issued in January 2003. We will be required to apply FIN 46R to variable interests in variable interest entities created after December 31, 2003. For variable interests in variable interest entities created before December 31, 2003, FIN 46R will be applied beginning on March 31, 2004. For any variable interest entities that must be consolidated under FIN 46R that were created before December 31, 2003, the assets, liabilities and noncontrolling interests of the variable interest entity initially would be measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN 46R first applies may be used to measure the assets, liabilities and noncontrolling interest of the variable interest entity. We have identified DBroadband Holdings, LLC as a variable interest entity in accordance with FIN 46R. As we are not the primary beneficiary of the variable interest entity (as defined by FIN 46R), DBroadband Holdings, LLC has not been included in our consolidated financial statements. In future periods, we will continue to reassess our relationship with DBroadband Holdings, LLC to ensure proper recognition of the relationship in accordance with FIN 46R. See “Certain Relationships and Related Transactions — Third Party Business Relationships in which Mr. Allen has an Interest — Digeo, Inc.”

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      In December 2003, the SEC issued Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition. SAB No. 104 revises or rescinds portions of interpretative guidance on revenue recognition. SAB No. 104 became effective immediately upon release and requires registrants to either restate prior financial statements or report a change in accounting principle. The adoption of SAB No. 104 did not have a material impact on our consolidated financial statements.

Interest Rate Risk

      We are exposed to various market risks, including fluctuations in interest rates. We use interest rate risk management derivative instruments, such as interest rate swap agreements and interest rate collar agreements (collectively referred to herein as interest rate agreements) as required under the terms of the credit facilities of our subsidiaries. Our policy is to manage interest costs using a mix of fixed and variable rate debt. Using interest rate swap agreements, we agree to exchange, at specified intervals through 2007, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. Interest rate collar agreements are used to limit our exposure to, and to derive benefits from, interest rate fluctuations on variable rate debt to within a certain range of rates. Interest rate risk management agreements are not held or issued for speculative or trading purposes.

      As of December 31, 2003 and 2002, long-term debt totaled approximately $9.6 billion and $8.1 billion, respectively. This debt was comprised of approximately $7.2 billion and $7.8 billion of debt under our subsidiaries’ credit facilities, and $2.3 billion and $277 million of high-yield bonds at December 31, 2003 and 2002, respectively. In addition, amounts owed to parent companies totaled approximately $37 million and $133 million as of December 31, 2003 and 2002, respectively. As of December 31, 2003 and 2002, the weighted average interest rate on the bank debt was approximately 5.4% for both years and the weighted average interest rate on the high-yield debt was approximately 10.0% and 11.1%, respectively, resulting in a blended weighted average interest rate of 6.5% and 5.6%, respectively. Approximately 60% of our debt was effectively fixed including the effects of our interest rate hedge agreements as of December 31, 2003 compared to approximately 51% at December 31, 2002. The fair value of our subsidiaries’ credit facilities was approximately $6.9 billion and approximately $6.4 billion at December 31, 2003 and 2002, respectively. The fair value of our high-yield debt was approximately $2.4 billion and approximately $212 million at December 31, 2003 and 2002, respectively. The fair value of high-yield debt is based on quoted market prices and the fair value of the credit facilities is based on dealer quotations.

      We have certain interest rate derivative instruments that have been designated as cash flow hedging instruments. Such instruments are those which effectively convert variable interest payments on certain debt instruments into fixed payments. For qualifying hedges, SFAS No. 133 allows derivative gains and losses to offset related results on hedged items in the consolidated statement of operations. We have formally documented, designated and assessed the effectiveness of transactions that receive hedge accounting. For the years ended December 31, 2003, 2002 and 2001, net gain (loss) on derivative instruments and hedging activities includes gains of $8 million and losses of $14 million and $2 million, respectively, which represent cash flow hedge ineffectiveness on interest rate hedge agreements arising from differences between the critical terms of the agreements and the related hedged obligations. Changes in the fair value of interest rate agreements designated as hedging instruments of the variability of cash flows associated with floating-rate debt obligations are reported in accumulated other comprehensive loss. For the years ended December 31, 2003, 2002 and 2001, a gain of $48 million and losses of $65 million and $39 million, respectively, related to derivative instruments designated as cash flow hedges was recorded in accumulated other comprehensive loss. The amounts are subsequently reclassified into interest expense as a yield adjustment in the same period in which the related interest on the floating-rate debt obligations affects earnings (losses).

      Certain interest rate derivative instruments are not designated as hedges, as they do not meet the effectiveness criteria specified by SFAS No. 133. However, we believe such instruments are closely correlated with the respective debt, thus managing associated risk. Interest rate derivative instruments not designated as hedges are marked to fair value with the impact recorded as a gain (loss) on derivative

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instruments and hedging activities in our statements of operations. For the years ended December 31, 2003, 2002 and 2001, net gain (loss) on derivative instruments and hedging activities includes gains of $57 million, and losses of $101 million and $48 million, respectively, for interest rate derivative instruments not designated as hedges.

      The table set forth below summarizes the fair values and contract terms of financial instruments subject to interest rate risk maintained by us as of December 31, 2003 (dollars in millions):

																							Fair Value at
																							December 31,
		2004			2005			2006			2007			2008			Thereafter			Total			2003
Debt
Fixed Rate		$	—		$	—		$	—		$	—		$	227		$	2,101		$	2,328		$	2,428
	Average Interest Rate		—			—			—			—			10.93	%		9.89	%		9.99	%
Variable Rate		$	188		$	426		$	999		$	2,080		$	3,534		$	—		$	7,227		$	6,949
	Average Interest Rate		3.40	%		4.99	%		6.12	%		6.85	%		7.91	%		—			7.07	%
Interest Rate Instruments
Variable to Fixed Swaps		$	715		$	990		$	873		$	400		$	—		$	—		$	2,978		$	171
	Average Pay Rate		7.36	%		7.10	%		7.30	%		7.35	%		—			—			7.25	%
	Average Receive Rate		3.68	%		5.28	%		6.43	%		7.00	%		—			—			5.46	%

      The notional amounts of interest rate instruments do not represent amounts exchanged by the parties and, thus, are not a measure of our exposure to credit loss. The amounts exchanged are determined by reference to the notional amount and the other terms of the contracts. The estimated fair value approximates the costs (proceeds) to settle the outstanding contracts. Interest rates on variable debt are estimated using the average implied forward London Interbank Offering Rate (“LIBOR”) rates for the year of maturity based on the yield curve in effect at December 31, 2003.

      At December 31, 2003 and 2002, we had outstanding $3.0 billion and $3.4 billion, respectively, and $520 million and $520 million, respectively, in notional amounts of interest rate swaps and collars, respectively. The collar agreements are structured so that if LIBOR falls below 5.3%, we pay 6.7%. If the LIBOR rate is between 5.3% and 8.0%, we pay LIBOR. If LIBOR falls between 8.0% and 9.9%, the LIBOR rate is capped at 8.0%. If rates go above 9.9%, the cap is removed. The fair value of the collar agreements is a liability of $8 million at December 31, 2003.

      We do not hold collateral for these instruments and are therefore subject to credit loss in the event of nonperformance by the counter party to the interest rate exchange agreement. However the counterparties are banks and we do not anticipate nonperformance by any of them on the interest rate exchange agreement.

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BUSINESS

Overview

      CCH II is an indirect subsidiary of Charter and Charter Holdings and a direct subsidiary of CCH I. We are a broadband communications company operating in the United States, with approximately 12.4 million homes passed and approximately 6.54 million customers. Through our broadband network of coaxial and fiber optic cable, we offer our customers traditional cable video programming (analog and digital, which we refer to as “video” service), high-speed cable Internet access (which we refer to as “high-speed data service”), advanced broadband cable services (such as VOD, high definition television service and interactive television) and, in some of our markets, we offer telephone service (which we refer to as “telephony”). “Homes passed” represents our estimate of the number of living units, such as single family homes, apartment units and condominium units passed by our cable distribution network. Homes passed excludes commercial units passed by our cable distribution network.

      We offer analog video service to all of our homes passed, and we offer digital video service to approximately 99% of our homes passed. At December 31, 2003, we served approximately 6.43 million analog video customers, of which approximately 2.67 million are also digital video customers. We offer high-speed data service to approximately 87% of our homes passed, and we serve approximately 1.57 million high-speed data customers (including approximately 105,800 who receive high-speed data only services). At December 31, 2003, we offered voice-over-Internet protocol (“VOIP”) telephony to approximately 33,000 homes passed in one market and traditional switch-based telephony to approximately 86,600 homes passed in another market. We provided telephony service to approximately 24,900 customers in these two markets as of that date. See “Business — Products and Services.”

      At December 31, 2003, our investment in cable properties, long-term debt and total member’s equity was $20.5 billion, $9.6 billion and $9.0 billion, respectively. Our working capital deficit was $650 million at December 31, 2003. For the year ended December 31, 2003, our revenues were approximately $4.8 billion.

      We have a history of net losses. Further, we expect to continue to report net losses for the foreseeable future. Our net losses are principally attributable to insufficient revenue to cover the interest costs we incur because of our high level of debt, the depreciation expenses that we incur resulting from the capital investments we have made in our cable properties, and the amortization and impairment of our franchise intangibles. We expect that these expenses (other than amortization and impairment of franchises) will remain significant, and we therefore expect to continue to report net losses for the foreseeable future.

      Charter was organized as a Delaware corporation in 1999 and completed an initial public offering of its Class A common stock in November 1999. Charter is a holding company whose principal assets are an approximate 46% equity interest and a 100% voting interest in Charter Holdco, the direct parent of Charter Holdings. Charter’s only business is to act as the sole manager of Charter Holdco and its subsidiaries. As sole manager, Charter controls the affairs of Charter Holdco and its subsidiaries, including us. Certain of our subsidiaries commenced operations under the “Charter Communications” name in 1994, and our growth to date has been primarily due to acquisitions and business combinations, most notably acquisitions completed from 1999 through 2001, pursuant to which we acquired a total of approximately 5.5 million customers. We do not expect to make any significant acquisitions in the foreseeable future, but plan to evaluate opportunities to consolidate our operations through exchanges of cable systems with other cable operators, as they arise. We may also sell certain assets from time to time. Paul G. Allen controls Charter with an as-converted common equity interest of 58% and a beneficial voting control interest of 93%.

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Adoption of New Policies

      Commencing in January 2002 and continuing through the first quarter of 2003, our management elected to implement a number of new policies described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Adoption of New Policies.”

Focus for 2004

      Our principal financial goal is to maximize our return on invested capital. To do so, we will focus on increasing revenues, improving customer retention and enhancing customer satisfaction by providing reliable, high-quality service offerings, superior customer service and attractive bundled offerings.

      Specifically, we are focusing in 2004 on:

•  increasing our sales and marketing efforts, especially through our national “Get Hooked” campaign to grow revenues through promoting our advanced services and emphasizing what we believe to be competitive advantages over satellite, including one-stop shopping for video, voice, high-speed data and interactive services;

•  enhancing our digital service with new content and continued deployment of advanced products such as digital video recorder (“DVR”) service, high definition television service, VOD and subscription video on demand (“SVOD,” VOD service for selected programming categories);

•  implementing what we believe is an attractive and competitive price point strategy for various levels and bundled packages of digital services;

•  continuing to improve customer service and satisfaction;

•  managing our operating costs by exercising discipline in capital and operational spending; and

•  identifying opportunities to continue to improve our balance sheet and liquidity.

      We believe that our high-speed data service has the potential to continue to provide a substantial portion of our revenue growth in the near future. We also plan to continue to expand our marketing of our high-speed data service to the business community, which we believe has shown an increasing interest in high-speed data service and private network services.

      We believe we offer our customers an excellent choice of services through an increased variety of bundled packages, particularly with respect to our digital video and high-speed data services. Our digital platform enables us to offer a significant number and variety of channels, and we offer customers the opportunity to choose among groups of channel offerings, including premium channels, and to combine chosen programming with other services such as high-speed data, high definition television (in selected markets) and VOD (in selected markets).

      We plan to continue our efforts to improve customer satisfaction and efficiency of customer service through consolidation of customer contact centers, which we have reduced from over 300 at December 31, 2000 to 53 at December 31, 2003. Our 20 largest customer contact centers now serve approximately 93% of our customers. We anticipate that this initiative will assist us in reducing customer contact rates and call abandonment rates, thereby improving customer satisfaction while reducing costs. We believe that consolidation and standardization of call centers enable us to provide a more consistent experience for our customers and to improve sales through the use of better trained, more efficient and sales-oriented customer service representatives.

      We continue to pursue opportunities to improve our balance sheet and liquidity, and the recent offering by our indirect subsidiary Charter Operating, together with the concurrent refinancing of its credit facilities, are our most recent examples of these efforts. In addition, since September 2003:

•  we sold non-core cable systems for $824 million, the proceeds of which we used to reduce our indebtedness;

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•  we, together with our indirect parent companies, Charter and Charter Holdings, exchanged approximately $1.9 billion of indebtedness for $1.6 billion of indebtedness as a result of private debt-for-debt exchanges, resulting in a $294 million reduction of our parent companies’ consolidated debt outstanding; and

•  our direct subsidiary, CCO Holdings, sold $500 million of senior notes, the net proceeds of which were used to reduce balances under our subsidiaries’ credit facilities.

      Going forward, we plan to continue to pursue opportunities to improve our liquidity and leverage when we believe that such opportunities will enhance the long-term strength of our balance sheet and business.

Products and Services

      We offer our customers traditional cable video programming (analog and digital video) as well as high-speed data services and in some areas advanced broadband services such as high definition television, VOD and interactive television. We sell our video programming and high-speed data services on a subscription basis, with prices and related charges, that vary primarily based on the types of service selected, whether the services are sold as a “bundle” versus on an “à la carte” basis, and the equipment necessary to receive the services, with some variation in prices depending on geographic location. In addition, we offer telephony service to a limited number of customers.

      The following table summarizes our customer statistics for analog and digital video, high-speed data, and telephony as of December 31, 2003 and December 31, 2002:

		Approximate as of
		December 31,			December 31,
		2003(a)			2002(a)
Cable Video Services:
	Analog Video:
	Residential (non-bulk) analog video customers(b)		6,173,400			6,328,900
	Multi-dwelling (bulk) and commercial unit customers(c)		257,900			249,900
	Analog video customers(b)(c)		6,431,300			6,578,800
	Digital Video:
	Digital video customers(d)		2,671,900			2,682,800
	Digital percentage of analog video customers(b)(c)(d)(e)		42	%		41	%
	Digital set-top terminals deployed		3,751,600			3,772,600
Non-Video Cable Services:
	High-Speed Data Services:
	Residential high-speed data customers(f)		1,565,600			1,138,100
	Dial-up customers		9,600			14,200
	Telephony Customers(g)		24,900			22,800

      Pro forma for the effects of the Port Orchard, Washington sale on October 1, 2003, analog video customers, digital video customers and high-speed data customers would have been 6,552,200, 2,669,800 and 1,128,200, respectively as of December 31, 2002.

      On March 1, 2004, Charter Holdings, and several of its subsidiaries closed on the sale of cable systems with Atlantic Broadband Finance, LLC. An additional closing for a cable system in Salamanca, New York occurred on April 30, 2004. At December 31, 2003, the systems sold in this transaction, including the New York system, served approximately 230,800 analog video customers, 83,300 digital video customers and 37,800 high-speed data customers.

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(a)	“Customers” include all persons our corporate billing records show as receiving service (regardless of their payment status), except for complimentary accounts (such as our employees). Further, “customers” include persons receiving service under promotional programs that offered up to two months of service for free, some of whom had not requested to be disconnected, but had not become paying customers as of December 31, 2003. If such persons do not become paying customers, we do not believe this would have a material impact on our consolidated financial condition or consolidated results of operations. In addition, at December 31, 2003 and 2002, “customers” include approximately 6,500 and 5,400 persons, whose accounts were over 90 days past due in payment and approximately 2,000 and 1,300 of which were over 120 days past due in payment, respectively.
(b)	“Residential (non-bulk) analog video customers” include all residential customers who receive video services, except for complimentary accounts (such as our employees).
(c)	Included within video customers are those in commercial and multi-dwelling structures, which are calculated on an equivalent bulk unit (“EBU”) basis. EBU is calculated for a system by dividing the bulk price charged to accounts in an area by the most prevalent price charged to non-bulk residential customers in that market for the comparable tier of service. The EBU method of estimating analog video customers is consistent with the methodology used in determining costs paid to programmers and has been consistently applied year over year. As we increase our effective analog prices to residential customers without a corresponding increase in the prices charged to commercial service or multi-dwelling customers, our EBU count will decline even if there is no real loss in commercial service or multi-dwelling customers.
(d)	“Digital video customers” include all households that have one or more digital set-top terminals. Included in digital video customers on December 31, 2003 and December 31, 2002 are approximately 12,200 and 27,500 customers, respectively, that receive digital video service directly through satellite transmission.
(e)	Represents the number of digital video customers as a percentage of analog video customers.
(f)	All of these customers also receive video service and are included in the video statistics above, except that the video statistics do not include approximately 105,800, and 55,900 of these customers at December 31, 2003 and December 31, 2002, respectively, who were high-speed data only customers.
(g)	“Telephony customers” include all households receiving telephone service.

   Video Services

      Our video service offerings include the following:

•  Basic Analog Video. All of our video customers receive a package of basic programming, which generally consists of local broadcast television, local community programming, including governmental and public access, and limited satellite-delivered or non-broadcast channels, such as weather, shopping and religious services. Our basic channel line-up generally has between 15 and 30 channels.

•  Expanded Basic Analog Video. This expanded programming level includes a package of satellite-delivered or non-broadcast channels and generally has between 30 and 50 channels in addition to the basic channel line-up.

•  Premium Channels. These channels provide commercial-free movies, sports and other special event entertainment programming. Although we offer subscriptions to premium channels on an individual basis, we offer an increasing number of premium channel packages and offer premium channels with our advanced services.

•  Pay-Per-View. These channels allow customers to pay on a per event basis to view a single showing of a recently released movie, a one-time special sporting event or music concert on a commercial-free basis.

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•  Digital Video. We offer digital video to our customers in several different service combination packages. All of our digital packages include a digital set-top terminal, an interactive electronic programming guide, up to 45 channels of digital music, an expanded menu of pay-per-view channels and the option to also receive digital packages which range from 4 to 30 additional video channels. We also offer our customers certain digital packages with one or more premium channels of their choice with “multiplexes.” Multiplexes give customers access to several different versions of the same premium channel, which are varied as to time of airing (such as east and west coast time slots) or programming content theme (such as westerns or romance). Some digital tier packages focus on the interests of a particular customer demographic and emphasize, for example, sports, movies, family or ethnic programming. In addition to video programming, digital video service enables customers to receive our advanced services such as VOD and high definition television. Other digital packages bundle digital television with our advanced services, such as high-speed data services.

   High-Speed Data Services

      We offer high-speed data services to our residential and commercial customers primarily via cable modems attached to personal computers. We generally offer our high-speed data service as Charter High-Speed Internet^TM, although in certain markets we offer this service in conjunction with a third-party provider. For our Charter High-Speed Internet service customers, we have a custom start page that is co-branded with Microsoft Corporation’s network of websites, known as MSN®, with content modules that we provide, including, among other things, movie trailers, previews of movies on pay-per-view and VOD, and television listings. We also offer traditional dial-up Internet access in a very limited number of our markets.

      In the fall of 2003, we re-priced our high-speed data service, offering faster speed and additional features, both as part of a service bundle and as an “à la carte” offering. We ended 2003 with 15% penetration of high-speed data homes passed, up from the 12% penetration of high-speed data homes passed at year-end 2002. This gave us an annual percentage increase in high-speed data customers of 38% and an increase in high-speed data revenues of 65% in 2003 compared to year-end 2002. As of September 30, 2003, in most of our systems, we migrated high-speed data customers to the fastest residential speed available at no additional charge to our existing high-speed data customers. These customers remained at that speed without additional charge through March 2004. We have recently begun migrating customers to our two-tier offerings with new pricing and new choices of connection speed.

   Advanced Broadband Services

      We continue to test, evaluate and deploy new advanced services that we believe will provide new revenue streams to offset overall increasing programming costs or enhance our appeal to consumers to counter competition. These advanced services include:

•  Video On Demand and Subscription Video on Demand. We offer VOD service, which allows customers to access hundreds of movies and other programming at any time with digital picture quality. In some systems we also offer SVOD for a single monthly fee. As of December 31, 2003, we offered VOD in systems serving approximately 850,000 digital video customers. During 2004, we expect to deploy VOD service in additional systems increasing VOD availability to approximately 1 million digital video customers, or 40% of our digital video customers at year-end 2003. SVOD service was available in systems serving 680,200 digital video customers at year-end 2003 and we expect to make it available in systems serving an additional 421,200 digital video customers in the first half of 2004.

•  High Definition Television. High definition television offers our digital customers video programming at a higher resolution than the standard analog or digital video image. As of December 31, 2003, we offered high definition television in systems serving approximately 1.3 million digital video customers. We anticipate increasing high definition service availability during 2004 to systems serving nearly 2 million digital video customers, or approximately 75% of our digital video

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	customers at year-end 2003. Our objective for 2004 is to provide at least 8-10 broadcast and cable network high definition channels per system, focusing on providing at least two local high definition broadcast channels per system.
•	Telephony Services. We continue to explore development and deployment of voice communications services using VOIP to transmit digital voice signals over our systems. At December 31, 2003, our VOIP telephony service was available to approximately 33,000 homes passed in one market and traditional switch-based telephony was available to approximately 86,600 homes passed in another market. We have identified systems in key markets to expand our VOIP telephony offerings, and we anticipate a growth in our telephony service from just over 120,000 homes passed on January 1, 2004 to nearly 1 million homes passed by year-end.
•	i-TV Service. We ended 2003 with interactive television service (“i-TV”) available to over 1 million digital video customers. In 2004, we expect to increase availability in strategic competitive markets and we are working on making our i-TV channels local-content oriented. Although we do not charge our customers for this service, we believe our ability to enhance our interactive content with local information such as local movie times, local sports and local weather provides us with an important advantage over satellite competition.
•	Commercial Services. We offer integrated network solutions to commercial and institutional customers. These solutions include high-speed data and video services. In addition, we offer high-speed data services to local businesses.

   Digital Video Recorder

      In December 2003, we launched digital video recording capabilities service in four Los Angeles systems serving 121,000 digital video customers at year-end. In April 2004, we launched DVR service in our Rochester, Minnesota market. We expect to further expand DVR deployment in 2004 and we expect to end 2004 with DVR deployment in systems serving approximately 1.38 million digital video customers, which would be approximately 52% of our digital video customers as of December 31, 2003.

   Sale of Advertising

      We receive revenue from the sale of local advertising on satellite-delivered networks such as MTV®, CNN® and ESPN®. In any particular market, we generally insert local advertising on a minimum of four networks, and have covered up to 45 channels. Our system rebuild and digital service launches have increased the number of available channels on which we are able to insert local advertising. We also provide cross-channel advertising to some programmers.

      From time to time, certain of our equipment vendors have purchased advertising from us. For the years ending December 31, 2003, 2002 and 2001, advertising revenue from equipment vendors was recognized in the amounts of $0, $13 million and $14 million, respectively. These revenues resulted from purchases at market rates pursuant to executed binding agreements. However, in connection with Charter’s restatement announced in April 2003, we reversed all advertising revenues, approximately $17 million from two set-top terminal manufacturers recognized in 2000. Based on a reassessment of the underlying structure of the arrangements during 2000, the prices paid for the set-top terminals and the advertising revenue recognized were determined to be in excess of fair value.

Pricing for Our Products and Services

      Our revenues are derived principally from the monthly fees our customers pay for the services we offer. A one-time installation fee, which is often waived during certain promotional periods for a standard installation, is charged to new customers. The prices we charge vary based on the level of service the customer chooses and the particular geographic market. Most of our pricing is reviewed and adjusted on an annual basis.

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      In accordance with the Federal Communications Commission’s rules, the prices we charge for cable-related equipment, such as set-top terminals and remote control devices, and for installation services are based on actual costs plus a permitted rate of return.

      Although our cable service offerings vary across the markets we serve because of various factors including competition and regulatory factors, our services, when offered on a stand-alone basis, are typically offered at monthly price ranges, excluding franchise fees and other taxes, as follows:

	Price Range as of
Service	December 31, 2003
Analog video packages	$	8.00 - $ 54.00
Premium channel	$	10.00 - $ 15.00
Pay-per-view (per movie or event)	$	3.95 - $179.00
Digital video packages (including high-speed data service for higher tiers)	$	34.00 - $106.00
High-speed data service	$	29.99 - $ 39.99
Video on demand (per selection)	$	0.99 - $ 12.99
High definition television	$	3.99 - $  6.99

      In addition, from time to time we offer free service or reduced-price service during promotional periods in order to attract new customers. There is no assurance that these customers will remain as customers when the period of free service expires.

Our Network Technology

      We have substantially completed the build-out of our systems to a minimum bandwidth of 550 megahertz or greater, which enables us to:

•  offer digital television, high-speed data services and other advanced services;

•  offer up to 82 analog channels, and even more channels when our bandwidth is used for digital signal transmission; and

•  permit two-way communication for Internet access and interactive services, and potentially, telephony services.

      As part of the upgrade of our systems during the last several years, we reduced the number of headends that serve our customers from 1,138 at January 1, 2001 to 748 at December 31, 2003. Because headends are the control centers of a cable system, where incoming signals are amplified, converted, processed and combined for transmission to the customer, reducing the number of headends reduces related equipment, service personnel and maintenance expenditures. We expect that headend consolidation, together with our other upgrades, will allow us to provide enhanced picture quality and greater system reliability. As a result of the upgrade, approximately 88% of our customers were served by headends serving at least 10,000 customers as of December 31, 2003.

      The following table sets forth the technological capacity of our systems as of December 31, 2003:

		550 megahertz
Less than		to			750			870			Two-way			Two-way
550 megahertz		660 megahertz			megahertz			megahertz			capability			enabled
	8%		5	%		42	%		45	%		92	%		87	%

      See “— Products and Services” for statistics regarding the approximate number of our customers who purchase the various services enabled by these upgrades.

      As of December 31, 2003, our cable systems consisted of approximately 219,400 strand miles, including approximately 48,300 strand miles of fiber optic cable, passing approximately 12.4 million households and serving approximately 6.54 million customers.

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      We adopted the hybrid fiber coaxial cable (“HFC”) architecture as the standard for our systems upgrades. HFC architecture combines the use of fiber optic cable with coaxial cable. Fiber optic cable is a communication medium that uses glass fibers to transmit signals over long distances with minimum signal loss or distortion. Fiber optic cable has excellent broadband frequency characteristics, noise immunity and physical durability and can carry hundreds of video, data and voice channels over extended distances. Coaxial cable is less expensive and requires a more extensive signal amplification in order to obtain the desired transmission levels for delivering channels. In most systems, we deliver our signals via fiber optic cable from the headend to a group of nodes, and use coaxial cable to deliver the signal from individual nodes to the homes passed served by that node. Our system design enables a maximum of 500 homes passed to be served by a single node. Currently, our average node serves approximately 385 homes passed. Our system design provides for six strands of fiber to each node, with two strands activated and four strands reserved for spares and future services. We believe that this hybrid network design provides high capacity and superior signal quality. The design also provides reserve capacity for the addition of future services.

      The primary advantages of HFC architecture over traditional coaxial-only cable networks include:

•  increased bandwidth capacity, for more channels and other services;

•  dedicated bandwidth for two-way services, which avoids reverse signal interference problems that can occur with two-way communication capability; and

•  improved picture quality and service reliability.

      We currently maintain a national network operations center to monitor our data networks and to further our strategy of providing high quality service. Monitoring previously done by our regional operations centers has been migrated to our national network operations center. Centralized monitoring becomes increasingly important as we increase the number of customers utilizing two-way high-speed data service. Our local dispatch centers focus primarily on monitoring the HFC plant, also replacing our existing regional operating centers.

Management of Our Systems

      Many of the functions associated with our financial management are centralized, including accounting, billing, finance and acquisitions, payroll and benefit administration, information system design and support, internal audit, purchasing, marketing, programming contract administration and Internet service, network and circuits administration.

      To improve efficiency and operational consistency throughout our systems, we have consolidated from three divisions and ten regions to five operating divisions, eliminating certain layers of middle management. Each division is supported by operational, financial, marketing and engineering functions. The reorganization has facilitated the establishment of and adherence to standard practices, Charter branding throughout our systems and improved internal communication. We believe these improvements enhance consistency of service delivery.

Customer Care

      Historically, we have fielded customer service requests, inquiries and complaints through a large number of small customer service centers throughout the country. As a consequence of our aggressive acquisition program in 1999 through 2001, the number of these service centers grew rapidly and in 2000 was in excess of 300 service centers. We believe that maintaining such a large number of service centers hindered our ability to maximize the consistency of our service delivery and related customer satisfaction due to the logistical challenges and poor economies of scale inherent in maintaining and supervising such a large number of service centers.

      In an effort to better serve our customers, we are consolidating our local customer care functions by operating technologically advanced, high-volume customer contact centers, and as a result we have closed

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and expect to continue to close a number of local payment and customer service centers. By establishing regional customer contact centers, we are able to service our customers 24 hours a day, seven days a week and utilize technologically advanced equipment that we believe enhances interactions with our customers. Our customer care specialists receive specialized training to develop customer contact skills and product knowledge that are targeted towards prompt and responsive resolution of customer complaints and customer retention, as well as towards selling additional and higher levels of service to our customers. As of December 31, 2003, we had 53 customer service locations, and our 20 largest customer service locations serviced approximately 93% of our customers.

Sales and Marketing

      Charter and its subsidiaries have a single team responsible for overseeing the sales and marketing strategies of our individual systems. For most of our systems with over 60,000 customers, an assigned marketing manager implements our marketing decisions, while smaller systems are handled at the divisional level. Due to our focus in 2003 on certain other operational matters and due to certain financial constraints, we reduced spending in 2003 on marketing our products and services. For the year ended December 31, 2003, we had marketing expenditures of $107 million. We expect to increase our spending on marketing in 2004.

      Our marketing efforts are intended to promote good interaction, quick information flow and sharing of best practices between our corporate office, which handles programs and administration, and our field offices, which implement our various marketing programs. We monitor government regulation, customer perception, competition, pricing and product preferences, among other factors, to increase our responsiveness to our customers. Our coordinated marketing techniques include door-to-door solicitation, telemarketing, media advertising, e-marketing, direct mail solicitation and retail locations. We also market and sell our services through consumer electronics retailers and other retailers that sell televisions or cable modems.

      In January 2004, we introduced the first national branding campaign in Charter’s history. The “Get Hooked” branding initiative will be a key focal point of our national marketing campaigns throughout the year, designed to promote our long-term objective of increasing our cash flow through deeper market penetration and growth in revenue per customer. Our goal for 2004 is for our corporate team to produce six to eight national marketing campaigns employing our new national “Get Hooked” Charter branding to:

•  Promote customer awareness and loyalty;

•  Attract former customers and households that have never subscribed to our services;

•  Promote our advanced services (such as DVR, high definition television, VOD and SVOD) with the goal that our customers will view their cable connection as one-stop shopping for video, voice, high-speed data and interactive services;

•  Promote our bundling of digital video and high-speed data services and pricing strategies; and

•  Announce the launch of our advanced services as they become available in our systems.

Programming

     General

      We believe that offering a wide variety of programming is an important factor that influences a customer’s decision to subscribe to and retain our cable services. We rely on market research, customer demographics and local programming preferences to determine channel offerings in each of our markets. We obtain basic and premium programming from a number of suppliers, usually pursuant to a written contract. Our programming contracts generally continue for a fixed period of time, usually from three to ten years, and are subject to negotiated renewal. Some program suppliers offer financial incentives to support the launch of a channel and ongoing marketing support or launch fees. We also negotiate volume

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discount pricing structures. Programming costs are usually payable each month based on calculations performed by us and are subject to adjustment based on the results of periodic audits by the programmers.

     Costs

      Programming tends to be made available to us for a license fee, which is generally paid based on the number of customers to whom we make such programming available. Such license fees may include “volume” discounts available for higher numbers of customers, as well as discounts for channel placement or service penetration. Some channels are available without cost to us for a limited period of time, after which we pay for the programming. For home shopping channels, we receive a percentage of the amount our customers spend on home shopping purchases.

      Our cable programming costs have increased, in every year we have operated, in excess of customary inflationary and cost-of-living type increases. We expect them to continue to increase due to a variety of factors, including:

•  annual increases imposed by programmers;

•  additional programming being provided to customers as a result of system rebuilds and bandwidth reallocation, both of which increase channel capacity; and

•  increased cost for certain previously discounted programming.

      In particular, sports programming costs have increased significantly over the past several years. In addition, contracts to purchase sports programming sometimes contain built-in cost increases for programming added during the term of the contract.

      Historically, we have been able to absorb increased programming costs through increased prices to our customers. However, with the impact of competition and other marketplace factors, there is no assurance that we will be able to continue to do so. In order to maintain margins despite increasing programming costs, we plan to continue to migrate certain program services from our analog level of service to our digital tiers. We expect that this migration will result in enhanced quality of programming offered on digital tiers and provide our video customers more value and more choice. Additionally, as we migrate our programming to our digital tier packages certain programming that was previously available to all of our customers via an analog signal, may be part of an elective digital tier package. As a result, the customer base upon which we pay programming fees will proportionately decrease, and the overall expense for providing that service would likewise decrease. Reductions in the size of certain programming customer bases may result in the loss of specific volume discount benefits. We plan to seek to renegotiate the terms of our agreements with certain programmers as these agreements come due for renewal.

      As measured by programming costs, and excluding premium services (substantially all of which were renegotiated and renewed in 2003), as of February 19, 2004 approximately 34% of our current programming contracts are scheduled to expire by the end of 2004, and approximately another 11% by the end of 2005. There can be no assurance that these agreements will be renewed on favorable or comparable terms. To the extent that we are unable to reach agreement with certain programmers on terms that we believe are reasonable, we may be forced to remove such programming channels from our line-up by the programmers, which could result in a further loss of customers. In addition, our inability to fully pass these programming cost increases on to our customers would have an adverse impact on our cash flow and operating margins.

Franchises

      As of December 31, 2003, our systems operated pursuant to a total of approximately 4,400 franchises, permits and similar authorizations issued by local and state governmental authorities. Each franchise is awarded by a governmental authority and such governmental authority often must approve a transfer to another party. Most franchises are subject to termination proceedings in the event of a material breach. In addition, most franchises require us to pay the granting authority a franchise fee of up to 5.0% of revenues as defined in the various agreements, provided that revenue is derived from a “cable service,” which is the

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maximum amount that may be charged under the applicable federal law. We are entitled to and generally do pass this fee through to the customer.

      Prior to the scheduled expiration of most franchises, we initiate renewal proceedings with the granting authorities. This process usually takes three years but can take a longer period of time. The Communications Act provides for an orderly franchise renewal process in which granting authorities may not unreasonably withhold renewals. In connection with the franchise renewal process, many governmental authorities require the cable operator to make certain commitments. Historically we have been able to renew our franchises without incurring significant costs, although any particular franchise may not be renewed on commercially favorable terms or otherwise. Our failure to obtain renewals of our franchises, especially those in the major metropolitan areas where we have the most customers, would have a material adverse effect on our consolidated financial condition, results of operations or our liquidity, including our ability to comply with our debt covenants. Approximately 28% of our franchises covering approximately 26% of our video customers expire on or before December 31, 2005. We expect to renew substantially all of these franchises.

      Under the Telecommunications Act of 1996 (the “1996 Telecom Act”), state and local authorities are prohibited from limiting, restricting or conditioning the provision of telecommunications services. They may, however, impose “competitively neutral” requirements and manage the public rights-of-way. Granting authorities may not require a cable operator to provide telecommunications services or facilities, other than institutional networks, as a condition of an initial franchise grant, a franchise renewal, or a franchise transfer. The 1996 Telecom Act also limits franchise fees to an operator’s cable-related revenues and clarifies that they do not apply to revenues that a cable operator derives from providing new telecommunications services. In a March 2002 decision, the Federal Communications Commission (“FCC”) held that revenue derived from the provision of cable modem service should not be added to franchise fee payments already limited by federal law to 5% of traditional cable service revenue. The same decision tentatively limited local franchising authority regulation of cable modem service. On October 6, 2003, the United States Court of Appeals for the Ninth Circuit vacated in part the FCC’s March 2002 decision and remanded for further proceedings. The Ninth Circuit affirmed the portion of the FCC’s March 2002 decision holding that cable modem service is not a “cable service.” Although the Ninth Circuit’s decision should not subject cable operators to additional cable franchise fee requirements for the provision of cable modem service, it could possibly result in other telecommunications regulation.

Competition

      We face competition in the areas of price, services, and service reliability. We compete with other providers of television signals and other sources of home entertainment. In addition, as we continue to expand into additional services such as high-speed Internet access and telephony, we face competition from other providers of each type of service. We operate in a very competitive business environment, which can adversely affect our business and operations.

      In terms of competition for customers, we view ourselves as a member of the broadband communications industry, which encompasses multi-channel video for television and related broadband services, such as high-speed data and other interactive video services. In the broadband industry, our principal competitor for video services throughout our territory is direct broadcast satellite, (“DBS”) and in markets where it is available, our principal competitor for data services is digital subscriber line (“DSL”). We do not consider other cable operators to be significant one-on-one competitors in the market overall, as traditional overbuilds are infrequent and spotty geographically (although in a particular market, a cable operator overbuilder would likely be a significant competitor at the local level). As of December 31, 2003, we are aware of traditional overbuild situations impacting approximately 5% of our total homes passed and potential overbuilds in areas servicing approximately 1% of our total homes passed.

      Although cable operators tend not to be direct competitors for customers, their relative size may affect the competitive landscape in terms of how a cable company competes against non-cable competitors in the market place as well as in relationships with vendors who deal with cable operators. For example, a

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larger cable operator might have better access to and pricing for the multiple types of services cable companies offer. Also, a larger entity might have different access to financial resources and acquisition opportunities.

Our key competitors include:

     DBS

      Direct broadcast satellite is a significant competitor to cable systems. The DBS industry has grown rapidly over the last several years, far exceeding the growth rate of the cable television industry, and now serves more than 20 million subscribers nationwide. DBS service allows the subscriber to receive video and high-speed Internet access services directly via satellite using a relatively small dish antenna. Consistent with increasing consolidation in the communications industry, News Corp., one of the world’s largest media companies, recently acquired a controlling interest in DIRECTV, Inc. (“DirecTV”), the largest domestic DBS company. This business combination could significantly strengthen DirecTV’s competitive posture, particularly through favorable programming arrangements with various News Corp. affiliates and subsidiaries, such as the Fox television network. In addition to the two established DBS providers, DirecTV and EchoStar Communications Corporation (“EchoStar”), a third DBS provider, Rainbow DBS, a division of Cablevision Systems Corp., commenced offering service in the fall of 2003. Additionally, EchoStar and DirecTV both have entered into joint marketing agreements with major telecommunications companies to offer bundled packages combining phone service, DSL and DBS services.

      Video compression technology and high powered satellites allow DBS providers to offer more than 200 digital channels from a single 32 transponder satellite, thereby surpassing the typical analog cable system. In 2003, major DBS competitors offered a greater variety of channel packages, and were especially competitive at the lower end pricing, such as a monthly price of approximately $30 for 75 channels compared to approximately $40 for the closest comparable package in most of our markets. In addition, while we continue to believe that the initial investment by a DBS customer exceeds that of a cable customer, the initial equipment cost for DBS has decreased substantially, as the DBS providers have aggressively marketed offers to new customers of incentives for discounted or free equipment, installation and multiple units. DBS providers are able to offer service nationwide and are able to establish a national image and branding with standardized offerings, which together with their ability to avoid franchise fees of up to 5% of revenues and property tax, leads to greater efficiencies and lower costs in the lower tiers of service. However, we believe that most consumers continue to prefer our stronger local presence in our markets. We believe that cable-delivered VOD and SVOD service are superior to DBS service because cable headends can store thousands of titles which customers can access and control independently, whereas DBS technology can only make available a much smaller number of titles with DVR-like customer control. We also believe that our higher tier products, particularly our bundled premium packages, are price-competitive with DBS packages and that many consumers prefer our ability to economically bundle video packages with data packages. Further, cable providers have the potential in some areas to provide a more complete “whole house” communications package when combining video, high-speed data and voice. We believe that this, combined with the introduction of more new products that DBS cannot offer (local high definition television and local interactive television) differentiates us from DBS competitors and could enable us to win back some of our former customers who migrated to satellite. Recent joint marketing arrangements between DBS providers and telecommunications carriers allow similar bundling of services in certain areas.

      DBS companies historically were prohibited from retransmitting popular local broadcast programming. However, a change to the copyright laws in 1999 eliminated this legal impediment. As a result, DBS companies now may retransmit such programming, once they have secured retransmission consent from the popular broadcast stations they wish to carry, and honor mandatory carriage obligations of less popular broadcast stations in the same television markets. In response to the legislation, DirecTV and EchoStar have begun carrying the major network stations in the nation’s top television markets. DBS, however, is limited in the local programming it can provide because of the current capacity limitations of satellite

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technology. DBS companies currently offer local broadcast programming only in the larger U.S. markets, although the number of markets covered is increasing.

      DirecTV is now providing two-way high-speed Internet access services. Another satellite company called WildBlue Communications, Inc. (formerly iSKY, Inc.) reports that it plans to deliver two-way high-speed Internet access to residential and small business markets in the contiguous United States and portions of Canada sometime in 2004 using the Ka-band and spot beam technology. EchoStar is offering its video programming services with the Internet services provided by EarthLink, an Internet service provider, using digital subscriber line technology. In addition, EchoStar is using a recently launched satellite to test a dish-based broadband service and Hughes Network Systems is developing a new Ka-band broadband service for enterprise markets.

DSL

      The deployment of DSL allows Internet access to subscribers at data transmission speeds greater than those available over conventional telephone lines. DSL service therefore is competitive with high-speed Internet access over cable systems. Several telephone companies which already have plant, an existing customer base, and other operational functions in place (such as, billing, service personnel, etc.) and other companies offer DSL service. DSL actively markets its service and many providers have offered promotional pricing with a one-year service agreement. The FCC has initiated a rulemaking proceeding that could materially reduce existing regulation of DSL service, essentially freeing such service from traditional telecommunications regulation. It is also possible that federal legislation could reduce regulation of Internet services offered by incumbent telephone companies. Legislative action and the FCC’s decisions and policies in this area are subject to change. We expect DSL to remain a significant competitor to our data services.

      DSL and other forms of high-speed Internet access provide competition to our own provision of Internet access. For example, as discussed above, satellite-based delivery options are in development. In addition, local wireless Internet services have recently begun to operate in many markets using available unlicensed radio spectrum. This service option, popularly known as “wi-fi”, offers another alternative to cable-based Internet access.

      High-speed Internet access facilitates the streaming of video into homes and businesses. As the quality and availability of video streaming over the Internet improves, video streaming may compete with the traditional delivery of video programming services over cable systems. It is possible that programming suppliers will consider bypassing cable operators and market their services directly to the consumer through video streaming over the Internet.

      We believe that pricing for residential and commercial data services on our system is generally comparable to that for similar DSL services and that some residential customers prefer our ability to bundle data services with video services. However, DSL providers may currently be in a better position to offer data services to businesses since their networks tend to be more complete in commercial areas. They also have the ability to bundle telephony with data services for a higher percentage of their customers, and that ability is appealing to many consumers. Recent joint marketing arrangements between DSL providers and DBS providers may allow some additional bundling of services.

Broadcast Television

      Cable television has long competed with broadcast television, which consists of television signals that the viewer is able to receive without charge using an “off-air” antenna. The extent of such competition is dependent upon the quality and quantity of broadcast signals available through “off-air” reception compared to the services provided by the local cable system. Traditionally, cable television has provided a higher picture quality and more channel offerings than broadcast television. However, the recent licensing of digital spectrum by the FCC will provide traditional broadcasters with the ability to deliver high definition television pictures and multiple digital-quality program streams, as well as advanced digital services such as subscription video and data transmission. Walt Disney Co. recently announced the

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launching of a movie service that bypasses cable through direct access to homes by data streams sent over the television broadcast spectrum.

Traditional Overbuilds

      Cable systems are operated under non-exclusive franchises granted by local authorities. More than one cable system may legally be built in the same area. It is possible that a franchising authority might grant a second franchise to another cable operator and that such a franchise might contain terms and conditions more favorable than those afforded us. In addition, entities willing to establish an open video system, under which they offer unaffiliated programmers non-discriminatory access to a portion of the system’s cable system, may be able to avoid local franchising requirements. Well-financed businesses from outside the cable industry, such as public utilities that already possess fiber optic and other transmission lines in the areas they serve, may over time become competitors. There are a number of cities that have constructed their own cable systems, in a manner similar to city-provided utility services. There also has been interest in traditional overbuilds by private companies. Constructing a competing cable system is a capital intensive process which involves a high degree of risk. We believe that in order to be successful, a competitor’s overbuild would need to be able to serve the homes and businesses in the overbuilt area on a more cost-effective basis than we can. Any such overbuild operation would require either significant access to capital or access to facilities already in place that are capable of delivering cable television programming.

      As of December 31, 2003, we are aware of overbuild situations impacting approximately 5% of our total homes passed and potential overbuild situations in areas servicing approximately 1% of our total homes passed, together representing a total of approximately 6% of our homes passed. Additional overbuild situations may occur in other systems. In response to such overbuilds, these systems have been designated priorities for the upgrade of cable plant and the launch of new and enhanced services. As of December 31, 2003, we have upgraded many of these systems to at least 750 megahertz two-way HFC architecture.

Telephone Companies and Utilities

      The competitive environment has been significantly affected by technological developments and regulatory changes enacted under the 1996 Telecom Act, which was designed to enhance competition in the cable television and local telephone markets. Federal cross-ownership restrictions historically limited entry by local telephone companies into the cable business. The 1996 Telecom Act modified this cross-ownership restriction, making it possible for local exchange carriers, who have considerable resources, to provide a wide variety of video services competitive with services offered by cable systems.

      Although telephone companies can lawfully enter the cable television business, activity in this area is currently quite limited. Local exchange carriers do provide facilities for the transmission and distribution of voice and data services, including Internet services, in competition with our existing or potential interactive services ventures and businesses. We cannot predict the likelihood of success of the broadband services offered by our competitors or the impact on us of such competitive ventures. The entry of telephone companies as direct competitors in the video marketplace may become more widespread and could adversely affect the profitability and valuation of established cable systems.

      As we expand our offerings to include Internet access and other telecommunications services, we will be subject to competition from other telecommunications providers. The telecommunications industry is highly competitive and includes competitors with greater financial and personnel resources, who have brand name recognition and long-standing relationships with regulatory authorities and customers. Moreover, mergers, joint ventures and alliances among franchise, wireless or private cable operators, local exchange carriers and others may result in providers capable of offering cable television, Internet, and telecommunications services in direct competition with us. For example, major local exchange carriers have entered into arrangements with EchoStar and DirecTV in which they will market packages combining phone service, DSL and DBS services.

      Additionally, we are subject to competition from utilities which possess fiber optic transmission lines capable of transmitting signals with minimal signal distortion. Utilities are also developing broadband over

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power line technology, which will allow the provision of Internet and other broadband services to homes and offices.

Private Cable

      Additional competition is posed by satellite master antenna television systems, or SMATV systems, serving multiple dwelling units, or MDUs, such as condominiums, apartment complexes, and private residential communities. These private cable systems may enter into exclusive agreements with such MDUs, which may preclude operators of franchise systems from serving residents of such private complexes. Private cable systems can offer both improved reception of local television stations and many of the same satellite-delivered program services that are offered by cable systems. SMATV systems currently benefit from operating advantages not available to franchised cable systems, including fewer regulatory burdens and no requirement to service low density or economically depressed communities. Exemption from regulation may provide a competitive advantage to certain of our current and potential competitors. The FCC ruled in 1998 that private cable operators can lease video distribution capacity from local telephone companies and distribute cable programming services over public rights-of-way without obtaining a cable franchise. In 1999, both the Fifth and Seventh Circuit Courts of Appeals upheld this FCC policy.

Wireless Distribution

      Cable systems also compete with wireless program distribution services such as multi-channel multipoint distribution systems or “wireless cable,” known as MMDS, which uses low-power microwave frequencies to transmit television programming over-the-air to paying customers. Wireless distribution services generally provide many of the programming services provided by cable systems, and digital compression technology increases significantly the channel capacity of their systems. Both analog and digital MMDS services, however, require unobstructed “line of sight” transmission paths and MMDS ventures have been quite limited to date.

      The FCC recently completed its auction of Multichannel Video Distribution & Data Service (“MVDDS”) licenses. MVDDS is a new terrestrial video and data fixed wireless service that the FCC hopes will spur competition in the cable and DBS industries.

Properties

      Our principal physical assets consist of cable distribution plant and equipment, including signal receiving, encoding and decoding devices, headend reception facilities, distribution systems and customer drop equipment for each of our cable systems.

      Our cable plant and related equipment are generally attached to utility poles under pole rental agreements with local public utilities and telephone companies, and in certain locations are buried in underground ducts or trenches. We own or lease real property for signal reception sites and own most of our service vehicles.

      Historically our subsidiaries have owned the real property and buildings for our data centers, customer contact centers and our divisional administrative offices. However, for the foreseeable future, we plan to reduce our number of administrative offices and lease the space, where possible, while attempting to sell those existing locations that we believe are no longer required. Our subsidiaries generally have leased space for business offices throughout our operating divisions. Our headend and tower locations are located on owned or leased parcels of land, and we generally own the towers on which our equipment is located. Charter Holdco owns the real property and building for our principal executive offices.

      The physical components of our cable systems require maintenance as well as periodic upgrades to support the new services and products we introduce. See “Business — Our Network Technology.” We believe that our properties are generally in good operating condition and are suitable for our business operations.

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Employees

      As of December 31, 2003, we had approximately 14,900 full-time equivalent employees, and our parent companies employed approximately 600 full-time employees to manage our operations. At December 31, 2002 these numbers were approximately 17,900 and approximately 700, respectively. At December 31, 2003, approximately 300 of our employees were represented by collective bargaining agreements. We have never experienced a work stoppage.

      The corporate office, which includes employees of Charter and Charter Holdco, is responsible for coordinating and overseeing our operations. The corporate office performs certain financial and administrative functions on a centralized basis such as accounting, billing, finance and acquisitions, payroll and benefit administration, information system design and support, internal audit, purchasing, marketing and programming contract administration. The corporate office performs these services on a cost reimbursement basis pursuant to a management services agreement. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Intercompany Management Arrangements.”

Legal Proceedings

                  Securities Class Actions and Derivative Suits

      Fourteen putative federal class action lawsuits (the “Federal Class Actions”) have been filed against Charter and certain of its former and present officers and directors in various jurisdictions allegedly on behalf of all purchasers of Charter’s securities during the period from either November 8 or November 9, 1999 through July 17 or July 18, 2002. Unspecified damages are sought by the plaintiffs. In general, the lawsuits allege that Charter utilized misleading accounting practices and failed to disclose these accounting practices and/or issued false and misleading financial statements and press releases concerning Charter’s operations and prospects. The Federal Class Actions were specifically and individually identified in public filings made by Charter prior to the date of this prospectus. In October 2002, Charter filed a motion with the Judicial Panel on Multidistrict Litigation (the “Panel”) to transfer the Federal Class Actions to the Eastern District of Missouri. On March 12, 2003, the Panel transferred the six Federal Class Actions not filed in the Eastern District of Missouri to that district for coordinated or consolidated pretrial proceedings with the eight Federal Class Actions already pending there. The Panel’s transfer order assigned the Federal Class Actions to Judge Charles A. Shaw. By virtue of a prior court order, StoneRidge Investment Partners LLC became lead plaintiff upon entry of the Panel’s transfer order. StoneRidge subsequently filed a Consolidated Amended Complaint. The Court subsequently consolidated the Federal Class Actions into a single consolidated action (the “Consolidated Federal Class Action”) for pretrial purposes. On June 19, 2003, following a pretrial conference with the parties, the Court issued a Case Management Order setting forth a schedule for the pretrial phase of the Consolidated Federal Class Action. Motions to dismiss the Consolidated Amended Complaint have been filed. On February 10, 2004, in response to a joint motion made by StoneRidge and defendants, Charter, Vogel and Allen, the court entered an order providing, among other things, that: (1) the parties who filed such motion engage in a mediation within ninety (90) days; and (2) all proceedings in the Consolidated Federal Class Actions are stayed for ninety (90) days.

The Consolidated Federal Class Action is entitled:

•  In re Charter Communications, Inc. Securities Litigation, MDL Docket No. 1506 (All Cases), StoneRidge Investments Partners, LLC, Individually and On Behalf of All Others Similarly Situated, v. Charter Communications, Inc., Paul Allen, Jerald L. Kent, Carl E. Vogel, Kent Kalkwarf, David G. Barford, Paul E. Martin, David L. McCall, Bill Shreffler, Chris Fenger, James H. Smith, III, Scientific-Atlanta, Inc., Motorola, Inc. and Arthur Andersen, LLP, Consolidated Case No. 4:02-CV-1186-CAS.

      On September 12, 2002, a shareholders derivative suit (the “State Derivative Action”) was filed in the Circuit Court of the City of St. Louis, State of Missouri (“Missouri State Court”) against Charter

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and its then current directors, as well as its former auditors. A substantively identical derivative action was later filed and consolidated into the State Derivative Action. The plaintiffs allege that the individual defendants breached their fiduciary duties by failing to establish and maintain adequate internal controls and procedures. Unspecified damages, allegedly on Charter’s behalf, are sought by the plaintiffs.

The State Derivative Action is entitled:

•  Kenneth Stacey, Derivatively on behalf of Nominal Defendant Charter Communications, Inc., v. Ronald L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman, William Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg, Arthur Andersen, LLP and Charter Communications, Inc.

      On March 12, 2004, an action substantively identical to the State Derivative Action was filed in Missouri State Court against Charter and certain of its current and former directors, as well as its former auditors. The plaintiffs allege that the individual defendants breached their fiduciary duties by failing to establish and maintain adequate internal controls and procedures. This case has not yet been consolidated with the State Derivative Action, but we expect that it will be in the future. Unspecified damages, allegedly on Charter’s behalf, are sought by the plaintiffs.

      The action is entitled:

•  Thomas Schimmel, Derivatively on behalf of Nominal Defendant Charter Communications, Inc. v. Ronald L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman, William D. Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg, and Arthur Andersen, LLP, and Charter Communications, Inc.

      Separately, on February 12, 2003, a shareholders derivative suit (the “Federal Derivative Action”), was filed against Charter and its then current directors in the United States District Court for the Eastern District of Missouri. The plaintiff alleges that the individual defendants breached their fiduciary duties and grossly mismanaged Charter by failing to establish and maintain adequate internal controls and procedures. Unspecified damages, allegedly on Charter’s behalf, are sought by the plaintiffs.

The Federal Derivative Action is entitled:

•  Arthur Cohn, Derivatively on behalf of Nominal Defendant Charter Communications, Inc., v. Ronald L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman, William Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg, and Charter Communications, Inc.

      In addition to the Federal Class Actions, the State Derivative Action, the new Missouri state derivative action and the Federal Derivative Action, six putative class action lawsuits have been filed against Charter and certain of its then current directors and officers in the Court of Chancery of the State of Delaware (the “Delaware Class Actions”). The lawsuits were filed after the filing of a Schedule 13D amendment by Mr. Allen indicating that he was exploring a number of possible alternatives with respect to restructuring or expanding his ownership interest in Charter. We believe the plaintiffs speculated that Mr. Allen might have been contemplating an unfair bid for shares of Charter or some other sort of going private transaction on unfair terms and generally alleged that the defendants breached their fiduciary duties by participating in or acquiescing to such a transaction. The lawsuits were brought on behalf of Charter’s securities holders as of July 29, 2002, and seek unspecified damages and possible injunctive relief. The Delaware Class Actions are substantively identical. No such transaction by Mr. Allen has been presented. Orders of dismissal without prejudice have been entered in each of the Delaware Class Actions.

The Delaware Class Actions consist of:

•  Eleanor Leonard, v. Paul G. Allen, Larry W. Wangberg, John H. Tory, Carl E. Vogel, Marc B. Nathanson, Nancy B. Peretsman, Ronald L. Nelson, William Savoy, and Charter Communications, Inc., filed on August 12, 2002;

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•  Helene Giarraputo, on behalf of herself and all others similarly situated, v. Paul G. Allen, Carl E. Vogel, Marc B. Nathanson, Ronald L. Nelson, Nancy B. Peretsman, William Savoy, John H. Tory, Larry W. Wangberg, and Charter Communications, Inc., filed on August 13, 2002;

•  Ronald D. Wells, Whitney Counsil and Manny Varghese, on behalf of themselves and all others similarly situated, v. Charter Communications, Inc., Ronald L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman, William Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg, filed on August 13, 2002;

•  Gilbert Herman, on behalf of himself and all others similarly situated, v. Paul G. Allen, Larry W. Wangberg, John H. Tory, Carl E. Vogel, Marc B. Nathanson, Nancy B. Peretsman, Ronald L. Nelson, William Savoy, and Charter Communications, Inc., filed on August 14, 2002;

•  Stephen Noteboom, on behalf of himself and all others similarly situated, v. Paul G. Allen, Larry W. Wangberg, John H. Tory, Carl E. Vogel, Marc B. Nathanson, Nancy B. Peretsman, Ronald L. Nelson, William Savoy, and Charter Communications, Inc., filed on August 16, 2002; and

•  John Fillmore on behalf of himself and all others similarly situated, v. Paul G. Allen, Larry W. Wangberg, John H. Tory, Carl E. Vogel, Marc B. Nathanson, Nancy B. Peretsman, Ronald L. Nelson, William Savoy, and Charter Communications, Inc., filed on October 18, 2002.

      All of the lawsuits discussed above are each in preliminary stages. No reserves have been established for potential losses or related insurance recoveries on these matters because Charter is unable to predict the outcome. Charter has advised us that it intends to vigorously defend the lawsuits.

Government Investigations

      In August 2002, Charter became aware of a grand jury investigation being conducted by the U.S. Attorney’s Office for the Eastern District of Missouri into certain of its accounting and reporting practices, focusing on how Charter reported customer numbers, and its reporting of amounts received from digital set-top terminal suppliers for advertising. The U.S. Attorney’s Office has publicly stated that Charter is not currently a target of the investigation. Charter has also been advised by the U. S. Attorney’s office that no member of its board of directors, including its Chief Executive Officer, is a target of the investigation. On July 24, 2003, a federal grand jury charged four former officers of Charter with conspiracy and mail and wire fraud, alleging improper accounting and reporting practices focusing on revenue from digital set-top terminal suppliers and inflated customer account numbers. On July 25, 2003 one of the former officers who was indicted entered a guilty plea. Charter has advised us that it is fully cooperating with the investigation.

      On November 4, 2002, Charter received an informal, non-public inquiry from the staff of the SEC. The SEC has subsequently issued a formal order of investigation dated January 23, 2003, and subsequent document and testimony subpoenas. The investigation and subpoenas generally concern Charter’s prior reports with respect to its determination of the number of customers, and various of its accounting policies and practices including its capitalization of certain expenses and dealings with certain vendors, including programmers and digital set-top terminal suppliers. Charter has advised us that it is fully cooperating with the SEC staff.

Indemnification

      Charter is generally required to indemnify each of the named individual defendants in connection with the matters described above pursuant to the terms of its bylaws and (where applicable) such individual defendants’ employment agreements. In accordance with these documents, in connection with the pending grand jury investigation, SEC investigation and the above described lawsuits, some of Charter’s current and former directors and its current and former officers have been advanced certain costs and expenses incurred in connection with their defense. See “Certain Relationships and Related Transactions — Other Miscellaneous Relationships — Indemnification Advances” for greater detail. The limited liability company agreement of CCH II and the bylaws of CCH II Capital may require CCH II and CCH II Capital,

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respectively, to indemnify Charter and the individual named defendants in connection with the matters set forth above.

Insurance

      Charter has liability insurance coverage that it believes is available for the matters described above, where applicable, subject to the terms, conditions and limitations of the respective policies. There is no assurance that current coverage will be sufficient for all claims described above or any future claims that may arise.

Other Litigation

      In October 2001, two customers, Nikki Nicholls and Geraldine M. Barber, filed a class action suit against Charter Holdco in South Carolina Court of Common Pleas (“South Carolina Class Action”), purportedly on behalf of a class of Charter customers, alleging that Charter Holdco improperly charged them a wire maintenance fee without request or permission. They also claimed that Charter Holdco improperly required them to rent analog and/or digital set-top terminals even though their television sets were “cable ready.” Charter Holdco removed this case to the United States District Court for the District of South Carolina in November 2001, and moved to dismiss the suit in December 2001. The federal judge remanded the case to the South Carolina Court of Common Pleas in August 2002 without ruling on the motion to dismiss. The plaintiffs subsequently moved for a default judgment, arguing that upon return to state court, Charter Holdco should have but did not file a new motion to dismiss. The state court judge granted the plaintiff’s motion over Charter Holdco’s objection in September 2002. Charter Holdco immediately appealed that decision to the South Carolina Court of Appeals and the South Carolina Supreme Court, but those courts have ruled that until a final judgment is entered against Charter, they lack jurisdiction to hear the appeal.

      In January 2003, the Court of Common Pleas granted the plaintiffs’ motion for class certification. In October and November 2003, Charter Holdco filed motions (a) asking that court to set aside the default judgment, and (b) seeking dismissal of plaintiffs’ suit for failure to state a claim. In January 2004, the Court of Common Pleas granted in part and denied in part Charter Holdco’s motion to dismiss for failure to state a claim. It also took under advisement Charter Holdco’s motion to set aside the default judgment. On April 12, 2004, the parties participated in a mediation with respect to this and related litigation. The mediator has made a proposal to the parties. Charter Holdco is currently evaluating the mediator’s proposal.

      The South Carolina Class Action is entitled:

•  Nikki Nicholls and Geraldine M. Barber, on behalf of themselves and all others similarly situated v. Charter Communications Holding Company, LLC and City of Spartanburg filed on October 29, 2001.

Outcome

      Charter is unable to predict the outcome of the lawsuits and the government investigations described above. An unfavorable outcome in any of these lawsuits or the government investigations could have a material adverse effect on our consolidated financial condition, results of operations or our liquidity, including our ability to comply with our debt covenants.

      In addition to the matters set forth above, Charter is also party to other lawsuits and claims that arose in the ordinary course of conducting its business. In the opinion of management, after taking into account recorded liabilities, the outcome of these other lawsuits and claims are not expected to have a material adverse effect on our consolidated financial condition, results of operations or our liquidity, including our ability to comply with our debt covenants.

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REGULATION AND LEGISLATION

      The following summary addresses the key regulatory and legislative developments affecting the cable industry.

      Cable system operations are extensively regulated by the FCC, some state governments and most local governments. A failure to comply with these regulations could subject us to substantial penalties.

      Our business can be dramatically impacted by changes to the existing regulatory framework, whether triggered by legislative, administrative, or judicial rulings. Congress and the FCC have expressed a particular interest in increasing competition in the communications field generally and in the cable television field specifically. The 1996 Telecom Act altered the regulatory structure governing the nation’s communications providers. It removed barriers to competition in both the cable television market and the local telephone market. At the same time, the FCC has pursued spectrum licensing options designed to increase competition to the cable industry by wireless multichannel video programming distributors. We could be materially disadvantaged in the future if we are subject to new regulations that do not equally impact our key competitors.

      Congress and the FCC have frequently revisited the subject of communications regulation, and they are likely to do so in the future. In addition, franchise agreements with local governments must be periodically renewed, and new operating terms may be imposed. Future legislative, regulatory, or judicial changes could adversely affect our operations. We can provide no assurance that the already extensive regulation of our business will not be expanded in the future.

Cable Rate Regulation

      The cable industry has operated under a federal rate regulation regime for more than a decade. The regulations currently restrict the prices that cable systems charge for basic service and associated equipment. All other cable offerings are now universally exempt from rate regulation. Although rate regulation operates pursuant to a federal formula, local governments, commonly referred to as local franchising authorities, are primarily responsible for administering this regulation. The majority of our local franchising authorities have never certified to regulate basic cable rates, but they retain the right to do so (and order rate reductions and refunds), except in those specific communities facing “effective competition.” Federal law defines effective competition as existing in a variety of circumstances that historically were rarely satisfied, but are increasingly likely to be satisfied with the recent increase in DBS competition.

      There have been frequent calls to impose expanded rate regulation on the cable industry. Confronted with rapidly increasing cable programming costs, it is possible that Congress may adopt new constraints on the retail pricing or packaging of cable programming. Such constraints could adversely affect our operations.

      The federal rate regulations also require cable operators to maintain a “geographically uniform” rate within each community, except in those communities facing effective competition. As we attempt to respond to a changing marketplace with competitive pricing practices, we may face legal restraints and challenges that impede our ability to compete.

Must Carry/ Retransmission Consent

      Federal law currently includes “must carry” regulations, which require cable systems to carry certain local broadcast television stations that the cable operator would not select voluntarily. Alternatively, popular commercial television stations can prohibit cable carriage unless the cable operator first negotiates for “retransmission consent,” which may be conditioned on significant payments or other concessions. Either option has a potentially adverse effect on our business. The burden associated with must carry could increase significantly if the FCC requires cable systems to simultaneously carry both the analog and digital signals of each television station, as the broadcast industry transitions from an analog to a digital format. The burden could also increase significantly if the FCC requires cable systems to carry multiple program

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streams included within a single digital broadcast transmission. Although the FCC tentatively ruled against this expansion in a 2001 ruling, it is reviewing the issue and could reach a contrary result in the near future. If these expanded must-carry requirements were adopted, we would have less freedom over our distribution capacity.

Access Channels

      Local franchise agreements often require cable operators to set aside certain channels for public, educational and governmental access programming. Federal law also requires cable systems to designate a portion of their channel capacity for commercial leased access by unaffiliated third parties. Increased activity in this area could further burden the channel capacity of our cable systems.

Access to Programming

      The FCC recently extended a regulation prohibiting video programmers affiliated with cable companies from favoring cable operators over new competitors and requiring such programmers to sell their satellite-delivered programming to other multichannel video distributors. This provision limits the ability of vertically integrated cable programmers to offer exclusive programming arrangements to cable companies. DBS providers traditionally had no similar restriction on exclusive programming, but the FCC recently imposed that restriction as part of its approval of the DirecTV-News Corp. merger.

      The FCC has also adopted regulations to avoid unreasonable conduct in retransmission consent negotiations between broadcasters and multichannel video programming distributors, including cable and DBS. It recently imposed special conditions on the DirectTV-News Corp. merger, including a requirement that Fox affiliated broadcast stations enter into commercial arbitration for disputes over retransmission consent. Given the heightened competition and media consolidation that Charter faces, it is possible that we will find it increasingly difficult to gain access to popular programming at favorable terms. Such difficulty could adversely impact our business.

Ownership Restrictions

      Federal regulation of the communications field traditionally included a host of ownership restrictions, which limited the size of certain media entities and restricted their ability to enter into competing enterprises. Through a series of legislative, regulatory, and judicial actions, most of these restrictions recently were eliminated or substantially relaxed. For example, historic restrictions on local exchange carriers offering cable service within their telephone service area, as well as those prohibiting broadcast stations from owning cable systems within their broadcast service area, no longer exist. Changes in this regulatory area, including some still subject to judicial review, could alter the business landscape in which we operate, as formidable new competitors (including electric utilities, local exchange carriers, and broadcast/media companies) may increasingly choose to offer cable services. The relaxation of ownership restrictions could, for example, simplify transactions such as the one that would have resulted from Comcast Corporation’s recent bid for Walt Disney Company had it been accepted, notwithstanding overlapping cable and broadcast properties.

      The FCC previously adopted regulations precluding any cable operator from serving more than 30% of all domestic multichannel video subscribers and from devoting more than 40% of the activated channel capacity of any cable system to the carriage of affiliated national video programming services. These cable ownership restrictions were invalidated by the courts, and the FCC is now considering adoption of replacement regulations.

Internet Service

      Over the past several years, proposals have been advanced at the FCC and Congress that would require cable operators offering Internet service to provide non-discriminatory access to unaffiliated Internet service providers. Several local franchising authorities actually adopted mandatory “open access” requirements, but various federal courts rejected each of these actions, relying on different legal theories.

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      It remains unclear today precisely what regulatory regime ultimately will be applied to the cable industry’s high-speed Internet service. The FCC has ruled that cable modem service is an interstate information service, rather than a cable or telecommunications service. This classification left cable modem service exempt from the burdens associated with traditional cable and telecommunications regulation. However, the United States Court of Appeals for the Ninth Circuit recently vacated in part the FCC’s ruling and remanded for further proceedings. The Ninth Circuit held that cable modem service is not “cable service,” but is part “telecommunications service” and part “information service.”

      Although the FCC previously suggested that regulatory forbearance of cable modem service would be appropriate, regardless of the technical classification ultimately assigned to it, a number of technology companies continue to press the FCC to subject cable modem service to certain “nondiscrimination principles.” The final regulatory status of cable modem service remains uncertain. Its outcome could materially affect our business. It could also affect whether local franchising authorities can collect franchise fees on cable modem service and whether cable systems will have any payment obligations to the federal government’s universal service fund.

      As the Internet has matured, it has become the subject of increasing regulatory interest. There is now a host of federal laws affecting Internet service, including the Digital Millennium Copyright Act, which affords copyright owners certain rights against us that could adversely affect our relationship with any customer accused of violating copyright laws. Recently enacted Anti-Spam legislation also imposes new obligations on our operations. Moreover, Congress has not yet extended the five-year moratorium on state and local taxation of Internet access, which expired in late 2003, although both Houses of Congress have now passed separate extension bills. Taxation of Internet access or the adoption of new Internet regulations could adversely affect our business.

Phone Service

      The 1996 Telecom Act created a more favorable regulatory environment for us to provide telecommunications services. In particular, it limited the regulatory role of local franchising authorities and established requirements ensuring that we could interconnect with other telephone companies to provide a viable service. Many implementation details remain unresolved, and there are substantial regulatory changes being considered that could impact, in both positive and negative ways, our primary telecommunications competitors and our own entry into the field of phone service. The FCC and state regulatory authorities are considering, for example, whether common carrier regulation traditionally applied to incumbent local exchange carriers should be modified and how new alternative technologies, like VOIP, should be regulated. It is unclear how these proceedings will be resolved and how they will affect our potential expansion into phone service.

Pole Attachments

      The Communications Act requires most utilities to provide cable systems with access to poles and conduits and simultaneously regulates the rates charged for this access. The Act specifies that significantly higher rates apply if the cable plant is providing telecommunications service, as well as traditional cable service. The FCC has clarified that a cable operator’s favorable pole rates are not endangered by the provision of Internet access. Although that determination was upheld by the United States Supreme Court, a subsequent decision by the United States Court of Appeals for the Ninth Circuit regarding the proper regulatory classification of Internet service has once again created controversy in this area. It remains possible that the underlying pole attachment formula, or its application to Internet and telecommunications offerings, will be modified in a manner that substantially increases our pole attachment costs.

Cable Equipment

      The FCC has undertaken several steps to promote competition in the delivery of cable equipment and compatibility with new digital technology. The FCC has expressly ruled that cable customers must be allowed to purchase set-top terminals from third parties and established a multi-year phase-in during

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which security functions (which would remain in the operator’s exclusive control) would be unbundled from the basic converter functions, which could then be provided by third party vendors. The first phase of implementation has already passed. A prohibition on cable operators leasing digital set-top terminals that integrate security and basic navigation functions is currently scheduled to go into effect as of July 1, 2006.

      The FCC recently adopted rules implementing an agreement between major cable operators and manufacturers of consumer electronics on “plug and play” specifications for one-way digital televisions. The rules require cable operators to provide “CableCard” security modules and support to customer owned digital televisions and similar devices already equipped with built-in set-top terminal functionality. Cable operators must support basic home recording rights and copy protection rules for digital programming content. The FCC has adopted companion “broadcast flag” rules, requiring cable carriage of a code embedded in digital broadcast programming that will regulate the further use of copyright programming. The FCC is conducting additional related rulemakings, and the cable and consumer electronics industries are currently negotiating an agreement that would establish additional “plug and play” specifications for two-way digital televisions.

      The FCC rules are subject to challenge and inter-industry negotiations are ongoing. It is unclear how this process will develop and how it will affect our offering of cable equipment and our relationship with our customers.

Other Communications Act Provisions and FCC Regulatory Matters

      In addition to the Communications Act provisions and FCC regulations noted above, there are other statutory provisions and FCC regulations affecting our business. The Communications Act, for example, includes cable-specific privacy obligations. The Act carefully limits our ability to collect and disclose personal information.

      FCC regulations include a variety of additional areas, including, among other things: (1) equal employment opportunity obligations; (2) customer service standards; (3) technical service standards; (4) mandatory blackouts of certain network, syndicated and sports programming; (5) restrictions on political advertising; (6) restrictions on advertising in children’s programming; (7) restrictions on origination cablecasting; (8) restrictions on carriage of lottery programming; (9) sponsorship identification obligations; (10) closed captioning of video programming; (11) licensing of systems and facilities; (12) maintenance of public files; and (13) emergency alert systems.

      It is possible that the FCC will expand or modify its regulation of cable systems in the future, and we cannot predict at this time how that might impact our business.

Copyright

      Cable systems are subject to federal copyright licensing covering carriage of television and radio broadcast signals. The possible modification or elimination of this compulsory copyright license is the subject of continuing legislative review and could adversely affect our ability to obtain desired broadcast programming. We cannot predict the outcome of this legislative activity. Moreover, the Copyright Office has not yet provided any guidance as to the how the compulsory copyright license should apply to newly offered digital broadcast signals.

      Copyright clearances for non-broadcast programming services are arranged through private negotiations. Cable operators also must obtain music rights for locally originated programming and advertising from the major music performing rights organizations. These licensing fees have been the source of litigation in the past, and we cannot predict with certainty whether license fee disputes may arise in the future.

Franchise Matters

      Cable systems generally are operated pursuant to nonexclusive franchises granted by a municipality or other state or local government entity in order to cross public rights-of-way. Cable franchises generally are

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granted for fixed terms and in many cases include monetary penalties for noncompliance and may be terminable if the franchisee fails to comply with material provisions.

      The specific terms and conditions of cable franchises vary materially between jurisdictions. Each franchise generally contains provisions governing cable operations, franchise fees, system construction, maintenance, technical performance, and customer service standards. A number of states subject cable systems to the jurisdiction of centralized state government agencies, such as public utility commissions.

      Although local franchising authorities have considerable discretion in establishing franchise terms, there are certain federal protections. For example, federal law caps local franchise fees and includes renewal procedures designed to protect incumbent franchisees from arbitrary denials of renewal. Even if a franchise is renewed, however, the local franchising authority may seek to impose new and more onerous requirements as a condition of renewal. Similarly, if a local franchising authority’s consent is required for the purchase or sale of a cable system, the local franchising authority may attempt to impose more burdensome requirements as a condition for providing its consent.

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MANAGEMENT

Directors

      CCH II is a holding company with no operations. CCH II Capital is a direct, wholly owned finance subsidiary of CCH II that exists solely for the purpose of serving as co-obligor of the original notes and the new notes. Neither CCH II nor CCH II Capital has any employees. We and our direct and indirect subsidiaries are managed by Charter. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Intercompany Management Arrangements.”

      Carl E. Vogel is the sole director of CCH II and CCH II Capital. The persons listed below are directors of Charter, Charter Holdco, Charter Holdings, CCH II or CCH II Capital, as indicated. All of the directors of Charter are elected annually.

Directors	Position(s)
Paul G. Allen	Chairman of the board of directors of Charter and Director of Charter Holdco
Charles M. Lillis	Director of Charter
David C. Merritt	Director of Charter
Marc B. Nathanson	Director of Charter
Jo Allen Patton	Director of Charter
Nancy B. Peretsman	Director of Charter
John H. Tory	Director of Charter
Carl E. Vogel	Director, President and Chief Executive Officer of Charter, Charter Holdco, Charter Holdings, CCH II and CCH II Capital
Larry W. Wangberg	Director of Charter

      The following sets forth certain biographical information as of December 31, 2003 with respect to the directors listed above except with respect to Ms. Patton, who was elected to the board of directors of Charter after the resignation of William D. Savoy in April 2004.

      Paul G. Allen, 50, has been Chairman of the board of directors of Charter since July 1999, and Chairman of the board of directors of Charter Investment, Inc. (a predecessor to, and currently an affiliate of, Charter) since December 1998. Mr. Allen, co-founder of Microsoft Corporation, has been a private investor for more than 15 years, with interests in over 50 technology, telecommunications, content and biotech companies. Mr. Allen’s investments include Vulcan Inc., Vulcan Productions, Inc., the Portland Trail Blazers NBA and Seattle Seahawks NFL franchises, and investments in TechTV, Inc., DreamWorks LLC, and Oxygen Media. In addition, he is a director of TechTV, Inc., Vulcan Programming Inc., Vulcan Ventures, Vulcan Inc. (f/k/a Vulcan Northwest), Vulcan Cable III, Inc. and numerous privately held companies.

      Charles M. Lillis, 62, was elected to the board of directors of Charter in October 2003. Presently, he is the Managing Partner of Lone Tree Capital, which he co-founded in 2002. Mr. Lillis served as Chairman and Chief Executive Officer of MediaOne Group, Inc. from June 1998 to May 2000. He served as Chief Executive Officer of MediaOne while it was a tracking stock company from November 1995 to May 1997. Prior to that, he held various senior management positions at US WEST, MediaOne’s predecessor. Before joining US WEST, he served as Dean of the University of Colorado’s College of Business and as a professor at Washington State University. In addition, he is a director and serves on the audit committees of SuperValu, Inc. and Williams Companies. Mr. Lillis is also Chairman of the University of Washington Business Advisory Board, a member of the University of Washington Foundation Board, and a former member of the University of Colorado Foundation Board. Mr. Lillis is a graduate of the University of Washington, Seattle, with an M.B.A., and he holds a doctorate of Philosophy in Business from the University of Oregon, in Eugene.

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      David C. Merritt, 49, was elected to the board of directors of Charter in July 2003, and was also appointed as Chairman of the Audit Committee at that time. Since October 2003, Mr. Merritt has been a Managing Director of Salem Partners LLC, an investment banking firm. He was a Managing Director in the Entertainment Media Advisory Group at Gerard Klauer Mattison & Co., Inc., a company that provides financial advisory services to the entertainment and media industries from January 2001 through April 2003. Prior to that, he served as Chief Financial Officer of CKE Associates, Ltd., a privately held company with interests in talent management, film production, television production, music and new media from July 1999 to November 2001. He also served as a director of Laser-Pacific Media Corporation from January 2001 until October 2003 and served as Chairman of its audit committee. During December 2003, he became a director of Outdoor Channel Holdings, Inc. Mr. Merritt joined KPMG LLP in 1975 and served in a variety of capacities during his years with the firm, including national partner in charge of the media and entertainment practice and before joining CKE Associates, Mr. Merritt was an audit and consulting partner of KPMG LLP for 14 years Mr. Merritt holds a B.S. degree in Business and Accounting from California State University — Northridge.

      Marc B. Nathanson, 58, has been a director of Charter since January 2000. Mr. Nathanson is the Chairman of Mapleton Investments LLC, an investment vehicle formed in 1999. He also founded and served as Chairman and Chief Executive Officer of Falcon Holding Group, Inc., a cable operator, and its predecessors, from 1975 until 1999. He served as Chairman and Chief Executive Officer of Enstar Communications Corporation, a cable operator, from 1988 until November 1999. Prior to 1975, Mr. Nathanson held executive positions with Teleprompter Corporation, Warner Cable and Cypress Communications Corporation. In 1995, he was appointed by the President of the United States to the Broadcasting Board of Governors, and from 1998 through September 2002, served as its Chairman. Mr. Nathanson served as Vice-Chairman and as a director of Charter pursuant to a letter agreement that expired in November 2002. See “Executive Compensation — Employment Arrangements.”

      Jo Allen Patton, 46, has been a director of Charter since April 2004. Ms. Patton joined Vulcan Inc. as Vice President in 1993, and since that time has served as an officer and director of many affiliates of Mr. Allen, including in her current position as President and Chief Executive Officer of Vulcan Inc. since July 2001. Vulcan Inc. is the investment and project management company founded by Mr. Allen to oversee a diverse multi-billion dollar portfolio of investments, real estate, sports teams, entertainment and charitable projects. Ms. Patton is also President of Vulcan Productions, an independent feature film and documentary production company, Vice Chair of First & Goal, Inc., which developed and operates the Seattle Seahawks NFL stadium, and serves as Executive Director of the six Paul G. Allen Foundations. Ms. Patton is a co-founder of the Experience Music Project museum, as well as the Science Fiction Museum and Hall of Fame. Ms. Patton is the sister of Mr. Allen.

      Nancy B. Peretsman, 49, has been a director of Charter since November 1999. Ms. Peretsman has been a Managing Director and Executive Vice President of Allen & Company, LLC (formerly known as Allen & Company Incorporated), an investment bank unrelated to Paul G. Allen, since 1995. From 1983 to 1995, she was an investment banker at Salomon Brothers Inc., where she was a Managing Director since 1990. She is a director of Priceline.com Incorporated and several privately held companies. She has a B.A. degree from Princeton University and an M.B.A. degree from Yale University.

      John H. Tory, 49, has been a director of Charter since December 2001. Mr. Tory served as the Chief Executive Officer of Rogers Cable Inc., Canada’s largest broadband cable operator, from 1999 until 2003. From 1995 to 1999 Mr. Tory was President and Chief Executive Officer of Rogers Media Inc., a broadcasting and publishing company. Prior to joining Rogers, Mr. Tory was a Managing Partner and member of the executive committee at Tory Tory DesLauriers & Binnington, one of Canada’s largest law firms. Mr. Tory serves on the board of directors of a number of Canadian companies, including Cara Operations Limited. Mr. Tory was educated at University of Toronto Schools, Trinity College (University of Toronto) and Osgoode Hall Law School.

      Carl E. Vogel, 46, has been a director, President and Chief Executive Officer of Charter since October 2001. Mr. Vogel has more than 20 years experience in telecommunications and the subscription

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television business. Prior to joining Charter, he was a Senior Vice President of Liberty Media Corp. from November 1999 until October 2001, and Chief Executive Officer of Liberty Satellite and Technology, a distributor of Internet data and other content via satellite, from April 2000 until October 2001. Prior to joining Liberty, Mr. Vogel was an Executive Vice President and Chief Operating Officer of Field Operations for AT&T Broadband and Internet Services with responsibility for managing operations of all of AT&T’s cable broadband properties from June 1999 until November 1999. From June 1998 to June 1999, when the business of Primestar Inc. was sold, Mr. Vogel served as Chairman and Chief Executive Officer of Primestar Inc., a national provider of subscription television services, and from 1997 to 1998, he served as Chief Executive Officer of Star Choice Communications. From 1994 through 1997, Mr. Vogel served as the President and Chief Operating Officer of EchoStar Communications. He began his career at Jones Intercable in 1983. Mr. Vogel serves as a director and member of the Executive Committee of the National Cable & Telecommunications Association, CableLabs and Digeo, Inc. and serves as a director of Women in Cable and Telecommunications. Mr. Vogel holds a B.S. degree in Finance and Accounting from St. Norbert College. His employment agreement provides that he will serve on the board of directors of Charter. See “— Employment Arrangements.”

      Larry W. Wangberg, 61, has been a director of Charter since January 2002. Mr. Wangberg has been a director of TechTV, Inc., a cable television network controlled by Paul Allen, since August 1997, and also served as its Chairman and Chief Executive Officer from August 1997 through July 2002. Prior to joining TechTV, Inc., Mr. Wangberg was Chairman and Chief Executive Officer of StarSight Telecast Inc., an interactive navigation and program guide company which later merged with Gemstar International, from 1994 to 1997. Mr. Wangberg was Chairman and Chief Executive Officer of Times Mirror Cable Television and Senior Vice President of its corporate parent, Times Mirror Co., from 1983 to 1994. He currently serves on the boards of TechTV, Inc., Autodesk Inc., and ADC Telecommunications. Mr. Wangberg holds a bachelor’s degree in Mechanical Engineering and a master’s degree in Industrial Engineering, both from the University of Minnesota.

Board of Directors and Committees of the Board of Directors

      Charter’s board of directors meets regularly throughout the year on a set schedule. The board may also hold special meetings and act by written consent from time to time if necessary. Meetings of the independent members of the board occur on the same day as regularly scheduled meetings of the full board. Management is not present at these meetings.

      The board of directors delegates authority to act with respect to certain matters to board committees whose members are appointed by the board. The following are the committees of Charter’s board of directors: Audit Committee, Financing Committee, Option Plan Committee, Compensation Committee, Executive Committee and a Special Committee for matters related to the dispute with Mr. Allen regarding his CC VIII, LLC interest. In addition, during 2003, there was a Special Committee related to a financing commitment letter issued by a company controlled by Paul Allen. That committee ceased to exist when the commitment letter was terminated in November 2003.

      The Audit Committee, which has a written charter approved by the board, consists of three directors: Charles Lillis, John Tory and David Merritt, all of whom are believed to be independent in accordance with the applicable corporate governance listing standards of the Nasdaq National Market. Charter’s board of directors has determined that, in its judgment, David Merritt is an audit committee financial expert within the meaning of the applicable federal regulations.

Director Compensation

      Commencing in July 2003, each member of Charter’s board receives an annual retainer of $40,000 in cash plus restricted stock vesting one year after date of grant with a value on the date of grant of $50,000. In addition, Charter’s Audit Committee chair receives $25,000 and each chair of each other committee of Charter receives $10,000 per year. All committee members also receive $1,000 for attendance at each committee meeting.

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      Each director of Charter is entitled to reimbursement for costs incurred in connection with attendance at board and committee meetings. Except as set forth below with respect to Mr. Nathanson, directors who were not employees did not receive additional compensation in 2002 or the first half of 2003. Mr. Vogel, who was President and Chief Executive Officer of Charter in 2003, was the only director who was also an employee during 2003. He did not receive any additional compensation for serving as a director or attending any meeting of the board of directors during 2003. Charter’s bylaws provide that all directors are entitled to indemnification from Charter to the maximum extent permitted by law from and against any claims, damages, liabilities, losses, costs or expenses incurred in connection with or arising out of the performance by them of their duties for Charter and/or its subsidiaries.

Mr. Vogel is party to an employment agreement with Charter, which is summarized in “— Employment Arrangements.”

      Marc B. Nathanson entered into a letter agreement with Charter for a term that expired in November 2002. Under this agreement, Mr. Nathanson served as Vice-Chairman and as a director of Charter. During the term of this agreement, Mr. Nathanson received a benefit equal to approximately $200,000 per year, which Charter paid to a company controlled by Mr. Nathanson. Mr. Nathanson continues to hold the title of Vice-Chairman, a non-salaried non-executive position with Charter.

Executive Officers

      The following persons are executive officers of Charter and other than Mr. Allen, also hold similar positions with Charter Holdco, Charter Holdings, CCH II and CCH II Capital:

Executive Officers	Position
Paul G. Allen	Chairman of the board of directors of Charter
Carl E. Vogel	President and Chief Executive Officer
Margaret “Maggie” A. Bellville	Executive Vice President — Chief Operating Officer
Derek Chang	Executive Vice President of Finance and Strategy
Thomas A. Cullen	Senior Vice President of Advanced Services and Business Development
Wayne H. Davis	Senior Vice President, Engineering and Technical Operations
Michael P. Huseby	Executive Vice President — Chief Financial Officer
Michael J. Lovett	Senior Vice President, Operations Support
Paul E. Martin	Senior Vice President and Principal Accounting Officer
Steven A. Schumm	Executive Vice President — Chief Administrative Officer
Curtis S. Shaw	Executive Vice President, General Counsel and Secretary

      The following sets forth certain biographical information as of December 31, 2003 with respect to the officers listed above (excluding those who also serve as directors of Charter).

      Margaret “Maggie” A. Bellville, 50, Executive Vice President and Chief Operating Officer. Before joining Charter in December, 2002, Ms. Bellville was President and Chief Executive Officer of Incanta Inc., a technology-based streaming content company from 2001 to 2002. Incanta Inc. filed for bankruptcy in April 2002. Prior to that, she worked for six years at Cox Communications, beginning in 1995 as Vice President of Operations, she advanced to Executive Vice President of Operations. Ms. Bellville joined Cox from Century Communications, where she served as Senior Vice President. Before that, Ms. Bellville served seven years with GTE Wireless in a variety of management and executive-level roles. A graduate of the State University of New York in Binghamton, Ms. Bellville is also a graduate of Harvard Business School’s Advanced Management Program. She currently serves on the Cable and Television Association for Marketing Education Foundation.

      Derek Chang, 36, Executive Vice President of Finance and Strategy. Prior to joining Charter, Mr. Chang was Executive Vice President of the Yankees Entertainment and Sports (YES) Network, a

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regional sports programming network in New York where he headed corporate development and financing activities from the company’s inception in 2001 until January 2003. Prior to joining YES, he was the Chief Financial Officer and Co-Chief Operating Officer of GlobalCenter, the web hosting subsidiary of Global Crossing. Mr. Chang worked for TCI Communications/AT&T Broadband in Denver from 1997 to 2000, ultimately as Executive Vice President of Corporate Development, where he directed mergers and acquisitions activities and managed a multibillion dollar portfolio of cable joint ventures. He was with InterMedia Partners in San Francisco from 1994 to 1997 where he held a number of positions and was ultimately Treasurer. Mr. Chang received a B.A. degree from Yale University and an M.B.A. from the Stanford University Graduate School of Business.

      Thomas A. Cullen, 44, Senior Vice President of Advanced Services and Business Development. From January 2001 to October 2002, Mr. Cullen was General Partner of Lone Tree Capital, a private equity partnership focused on investment opportunities in the technology and communications sector. From March 1997 to June 2000, Mr. Cullen was President of MediaOne Ventures. Prior to that, Mr. Cullen served in several capacities with MediaOne Internet Services including Vice President from April 1998 to June 2000 and Vice President of Business Development from September 1995 to March 1997. Mr. Cullen is a member of the board of directors of SportsLine USA, and a member of the Colorado State University Global Leadership Council. Mr. Cullen is a graduate of Northern Arizona University with a B.S. degree in Business Administration. He earned a Master of Business Administration from the University of Colorado, and he participated in a University of Pennsylvania, Wharton School Executive Program.

      Wayne H. Davis, 50, Senior Vice President, Engineering and Technical Operations. Prior to becoming Senior Vice President, Engineering and Technical Operations, Mr. Davis was Assistant to the President/ Vice President of Management Services since July 2002 and prior to that, he was Vice President of Engineering/ Operations for Charter’s National Region from December 2001. Before joining Charter Mr. Davis held the position of Vice President of Engineering for Comcast Corporation, Inc. Prior to that, he held various engineering positions including Vice President of Engineering for Jones Intercable Inc. He began his career in the cable industry in 1980. He attended the State University of New York at Albany. Mr. Davis serves as an advisory board member of Cedar Point Communications, and as a board member of @Security Broadband Corp., a company in which Charter owns an equity investment interest. Mr. Davis is also a member of the Society of Cable Telecommunications Engineers.

      Michael P. Huseby, 49, Executive Vice President and Chief Financial Officer. Mr. Huseby was Executive Vice President of Finance and Administration, and Chief Financial Officer of AT&T Broadband from 1999 until its merger with Comcast in 2002. Prior to joining Charter in January 2004, he served as a consultant to Comcast and to Charter as President and founder of MPH Associates, Inc., a privately held management and information technology firm providing consulting services to broadband industry clients. For ten years prior to joining AT&T, Mr. Huseby was a partner in the professional services firm of Andersen Worldwide. Mr. Huseby graduated from the University of Colorado at Boulder with a degree in Business Administration.

      Michael J. Lovett, 42, Senior Vice President, Operations Support. Mr. Lovett joined Charter in August of 2003. Prior to joining Charter, Mr. Lovett was Chief Operating Officer of Voyant Technologies, Inc., a voice conferencing hardware/software solutions provider, from December 2001 to August 2003. From November 2000 to December 2001, he was Executive Vice President of Operations for OneSource, Inc., a startup delivering management/monitoring of firewalls and virtual private networks. Prior to that, Mr. Lovett was Regional Vice President at AT&T from June 1999 to November 2000 where he was responsible for operations. Mr. Lovett was Senior Vice President at Jones Intercable from October 1989 to June 1999 where he was responsible for operations in nine states. Mr. Lovett began his career in cable television at Centel Corporation where he held a number of positions.

      Paul E. Martin, 43, Senior Vice President — Principal Accounting Officer. Prior to his promotion to his current position in April 2002, Mr. Martin was Vice President and Corporate Controller of Charter from March 2000. Prior to joining Charter in March 2000, Mr. Martin was Vice President and Controller for Operations and Logistics for Fort James Corporation, a manufacturer of paper products. From 1995 to

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February 1999, Mr. Martin was Chief Financial Officer of Rawlings Sporting Goods Company, Inc. Mr. Martin received a B.S. degree with honors in Accounting from the University of Missouri — St. Louis.

      Steven A. Schumm, 51, Executive Vice President and Chief Administrative Officer. Prior to joining Charter Investment, Inc. in 1998, Mr. Schumm was a partner of Ernst & Young LLP for 14 years, where he was Managing Partner of Ernst & Young’s St. Louis office and a member of the Ernst & Young National Tax Committee. Mr. Schumm joined Ernst & Young in 1974 and served in a variety of capacities during his years with the firm. Mr. Schumm earned a B.S. degree in Business Administration from Saint Louis University. Mr. Schumm served as Interim Chief Financial Officer of Charter from December 2002 to January 2004.

      Curtis S. Shaw, 55, Executive Vice President, General Counsel and Secretary. Mr. Shaw was promoted to Executive Vice President in October 2003. Prior to joining Charter Investment as Senior Vice President, General Counsel and Secretary in 1997, Mr. Shaw served as corporate counsel to NYNEX from 1988 through 1996. Since 1973, Mr. Shaw has practiced as a corporate lawyer, specializing in mergers and acquisitions, joint ventures, public offerings, financings, and federal securities and antitrust law. Mr. Shaw received a B.A. degree with honors in Economics from Trinity College and a J.D. degree from Columbia University School of Law.

Compensation Committee Interlocks and Insider Participation

      In 2003, the Compensation Committee of Charter was comprised of Messrs. Paul G. Allen, William D. Savoy, and Marc B. Nathanson. Mr. Savoy resigned from Charter’s Compensation Committee in April 2004. In 2003, Nancy B. Peretsman and Ronald L. Nelson served as the Option Plan Committee that administered the 1999 Charter Communications Option Plan and the Charter Communications, Inc. 2001 Stock Incentive Plan until July 2003 when Mr. Nelson was replaced by David C. Merritt.

      No member of Charter’s Compensation Committee or Option Plan Committee was an officer or employee of Charter or any of its subsidiaries during 2003 except for Mr. Allen, who served as a non-employee chairman. Also, Mr. Nathanson was an officer of certain subsidiaries of Charter prior to their acquisition by Charter in 1999 and held the title of Vice-Chairman, a non-executive, non-salaried position in 2003. Mr. Allen is the 100% owner and a director of Vulcan Inc. and certain of its affiliates, which have employed Mr. Savoy as an executive officer in the past and currently employs Ms. Patton as an executive officer. Mr. Allen also is a director of and indirectly owns 98% of TechTV, of which Mr. Wangberg, one of our directors, is a director. Transactions between Charter and members of the Compensation Committee are more fully described in “— Director Compensation” and in “Certain Relationships and Related Transactions — Other Miscellaneous Relationships.”

      During 2003, (1) none of the executive officers of Charter served on the compensation committee of any other company that has an executive officer currently serving on the board of directors, Compensation Committee or Option Plan Committee of Charter and (2) none of the executive officers of Charter served as a director of another entity, one of whose executive officers served on the Compensation Committee or Option Plan Committee of Charter.

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Executive Compensation

Summary Compensation Table

      Charter is CCH II’s sole manager. The following table sets forth information regarding the compensation to those executive officers of Charter listed below for services rendered for the fiscal years ended December 31, 2001, 2002 and 2003. These officers consist of the Chief Executive Officer, each of the other four most highly compensated executive officers as of December 31, 2003, and one other highly compensated executive officer who served during 2003 but was not an executive officer on December 31, 2003. Pursuant to a mutual services agreement, each of Charter and Charter Holdco, provides its personnel and provides services to the other, including the knowledge and expertise of their respective officers, that are reasonably requested to manage Charter Holdco, CCH II and the cable systems owned by their subsidiaries. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Intercompany Management Arrangements.”

												Long Term
				Annual Compensation								Compensation Award
												Restricted
		Year							Other Annual			Stock		Securities		All Other
		Ended		Salary		Bonus			Compensation			Awards		Underlying		Compensation
Name and Principal Position		Dec. 31		($)		($)(1)			($)			($)(2)		Options(#)		($)(3)
Carl E. Vogel(4)			2003		1,000,000		150,000			30,345	(14)		—		750,000		12,639	(16)
	President and Chief		2002		980,769		330,000	(9)		214,961	(14)		—		1,000,000		10,255	(16)
	Executive Officer		2001		207,692		546,000	(9)		—			513,000		3,400,000		8,996	(16)
Margaret A. Bellville(5)			2003		581,730		203,125			30,810	(15)		—		—		109,139	(17)
	Executive Vice President,		2002		9,615		150,000	(10)		—			—		500,000
	Chief Operating Officer
Steven A. Schumm			2003		448,077		45,000			—			—		250,000		9,889
	Executive Vice President,		2002		436,058		588,000	(11)		—			—		300,000		5,255
	Chief Administrative		2001		435,000		402,000	(11)		—			—		165,000		5,250
	Officer
Curtis S. Shaw(6)			2003		275,782		37,500			—			—		250,000		9,411	(18)
	Executive Vice President,		2002		249,711		281,500	(12)		—			—		100,000		3,096
	General Counsel and		2001		245,000		236,000	(12)		—			—		149,000		5,250
	Secretary
Wayne H. Davis(7)			2003		212,885		47,500			—			—		225,000		581	(19)
	Senior Vice President,
	Engineering and Technical
	Operations
Stephen E. Silva(8)			2003		213,005		—			—			—		—		134,345	(20)
	Former Executive		2002		294,231		196,000	(13)		—			—		150,000		5,255
	Vice President		2001		235,385		380,000	(13)		—			347,760		290,000		5,250
	Corporate Development and Chief Technology Officer

(1)  Includes senior management bonuses for the year 2003 under the 2003 senior management incentive plan. Mr. Vogel’s and Ms. Bellville’s bonuses are determined in accordance with the terms of their respective employment agreements. The bonus amounts for Messrs. Vogel and Silva for 2001 include the value of the vested portion of grants of restricted stock during 2001 under the Charter Communications, Inc. 2001 Stock Incentive Plan, calculated based on the fair market values of the vested shares on the grant date, which pursuant to the terms of the plan is the average of the high and low trading price on the grant date. These restricted stock grants made in 2001 were immediately vested as to twenty-five percent (25%) of the shares, with the remaining shares vesting in 36 equal monthly installments commencing approximately 15 months from the grant date. Also,

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	where indicated in the footnotes below, the bonuses for 2002 and 2001 include “stay” bonuses in the form of principal and interest forgiven under the employee’s promissory note. In 2002, all the remaining principal and accrued interest on these notes was forgiven as provided by the terms of the notes, so that at December 31, 2002, these notes were no longer outstanding.
(2)	Includes the grants of Charter restricted stock made during 2001 under the Charter Communications, Inc. 2001 Stock Incentive Plan, calculated based on the closing market price of the vested shares on the grant date. The total grant amounts, including both vested and unvested portions, were as follows: (i) Carl E. Vogel, 50,000 shares as of October 8, 2001 and (ii) Stephen E. Silva, 36,000 shares as of October 18, 2001. The restricted shares were immediately vested as to twenty-five percent (25%) of the shares, with the remaining shares vesting in 36 equal monthly installments commencing approximately 15 months from the grant date. Pursuant to the terms of these employees’ restricted stock agreement, each is entitled to any cash and/or stock dividends on the unvested restricted shares. The value as of the date of grant based on the closing market price of those shares that were vested immediately is disclosed in the “Bonus” column of the table. At December 31, 2003, based on a per share closing market price of $4.02 for Charter Class A common stock, the total number (and value) of Mr. Vogel’s outstanding unvested restricted stock was 23,959 shares ($96,315). Mr. Silva’s shares of unvested restricted stock were cancelled upon his resignation, effective July 1, 2003.
(3)	Except as noted for Mr. Vogel, Ms. Bellville, Mr. Shaw, Mr. Davis and Mr. Silva in notes 16, 17, 18, 19 and 20 below respectively, these amounts consist of matching contributions under Charter’s 401(k) plan. The 2002 amounts also include premiums for supplemental life insurance available to executives, and the 2003 amounts include long-term disability available to executives.
(4)	Mr. Vogel became the Chief Executive Officer of Charter in October 2001.
(5)	Ms. Bellville became the Chief Operating Officer of Charter in December 2002.
(6)	Mr. Shaw was promoted to Executive Vice President in October 2003.
(7)	Mr. Davis was promoted to Senior Vice President, Engineering and Technical Operations in March 2003.
(8)	Mr. Silva terminated his employment, effective July 1, 2003. See “— Employment Arrangements” for additional information.
(9)	Includes: (i) for 2001, $171,000, representing the value based on the fair market value on October 8, 2001, the original grant date, of 12,500 shares of Charter Class A common stock, the vested portion of Mr. Vogel’s restricted stock grant; (ii) for 2001, a one-time signing bonus of $250,000; and (iii) $330,000 and $125,000 awarded as a bonus for services performed in 2002 and 2001, respectively.

(10)	Includes a one-time signing bonus of $150,000 pursuant to an employment agreement.
(11)	Includes a “stay” bonus representing the principal and interest forgiven under employee’s promissory note, amounting to $363,000 and $342,000, respectively for 2002 and 2001; and $225,000 and $60,000 awarded as a bonus for services performed in 2002 and 2001, respectively.
(12)	Includes a “stay” bonus representing the principal and interest forgiven under employee’s promissory note, amounting to $181,500 and $171,000, respectively, for 2002 and 2001; and $100,000 and $65,000 awarded as a bonus for services performed in 2002 and 2001, respectively.
(13)	Includes: (i) $116,000 for 2001, representing the value based on the fair market value on October 18, 2001, the original grant date, of 9,000 shares of Charter Class A common stock, the vested portion of Mr. Silva’s restricted stock grant; (ii) a “stay” bonus representing the principal and interest forgiven under employee’s promissory note, amounting to $121,000 and $114,000, respectively for 2002 and 2001; and (iii) $75,000 and $150,000 awarded as a bonus for services performed in 2002 and 2001, respectively.

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(14)	Amount attributed to personal use of the corporate airplane in 2003 and $100,000 attributed to personal use and commuting in the corporate airplane in 2002 and $114,961 for purchase of a car in 2002.
(15)	Includes $26,010 attributed to personal use of the corporate airplane and $4,800 for car allowance.
(16)	Includes (i) for 2003, $2,639 paid as premium for long-term disability available for executives and $10,000 as reimbursement for tax advisory services; (ii) for 2002, $255 paid as premiums for supplemental life insurance available for executives and $10,000 as reimbursement for tax advisory services; and (iii) for 2001, $7,500 as reimbursement for legal expenses and $1,496 for COBRA expenses.
(17)	Includes for 2003, $2,955 paid as premium for long-term disability insurance available to executives, $5,000 as reimbursement for tax advisory services, $7,500 for legal services and $93,684 paid in relation to relocation expenses.
(18)	Includes for 2003, $2,287 attributed to personal use of the corporate airplane.
(19)	Includes for 2003, $581 attributed to personal use of the corporate airplane.
(20)	Includes for 2003, $128,769 paid in severance, $5,000 paid in matching contributions under Charter’s 401(k) plan, $576 paid as premium for long-term disability insurance available to executives.

2003 Aggregated Option Exercises and 2003 Option Value Table

      The following table sets forth, for the individuals named in the Summary Compensation Table, (i) information concerning options exercised during 2003, (ii) the number of shares of Charter Class A common stock underlying unexercised options at year-end 2003, and (iii) the value of unexercised “in-the-money” options (i.e., the positive spread between the exercise price of outstanding options and the market value of Charter Class A common stock) on December 31, 2003. The following does not reflect changes in holdings of Messrs. Vogel, Schumm and Davis as a result of their participation in Charter’s recent option exchange program described in “— Option/Stock Incentive Plans — February 2004 Option Exchange.”

					Number of Securities
					Underlying Unexercised				Value of Unexercised
					Options at				In-the-Money Options at
					December 31, 2003(#)(1)				December 31, 2003($)(2)
	Shares
	Acquired on		Value
Name	Exercise(#)		Realized($)		Exercisable		Unexercisable		Exercisable		Unexercisable
Carl E. Vogel		—		—		1,970,833		3,179,167		200,000		800,000
Margaret A. Bellville		—		—		250,000		250,000		250,000		250,000
Steven A. Schumm		—		—		912,136		585,545		60,000		240,000
Curtis S. Shaw		—		—		310,332		413,668		20,000		80,000
Wayne H. Davis		—		—		20,000		295,000		10,000		265,000
Stephen E. Silva		—		—		367,916		277,084		30,000		120,000

(1)

Options granted prior to 2001 and under the 1999 Charter Communications Option Plan, when vested, are exercisable for membership units of Charter Holdco, which are immediately exchanged on a one-for-one basis for shares of Charter Class A common stock upon exercise of the option. Options granted under the Charter Communications, Inc. 2001 Stock Incentive Plan and after 2000 are exercisable for shares of Charter Class A common stock.

(2)

Based on a per share market value (closing price) of $4.02 as of December 31, 2003, for Charter Class A common stock.

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2003 Option Grants

      The following table shows individual grants of options made to individuals named in the Summary Compensation Table during 2003. All such grants were made under the Charter Communications, Inc. 2001 Stock Incentive Plan and the exercise price was based upon the fair market value of Charter’s Class A common stock.

										Potential Realizable
	Number of									Value at Assumed
	Securities		% of Total							Annual Rate of
	Underlying		Options							Stock Price Appreciation
	Options		Granted to			Exercise				For Option Term(2)
	Granted		Employees			Price		Expiration
Name	(#)(1)		in 2003			($/Sh)		Date		5% ($)		10% ($)
Carl E. Vogel		750,000		9.39	%		4.30		10/28/13		2,025,827		5,133,843
Margaret A. Bellville		—		—			—		—		—		—
Steven A. Schumm		250,000		3.13	%		4.13		12/19/13		648,548		1,643,547
Curtis S. Shaw		250,000		3.13	%		4.30		10/28/13		675,276		1,711,281
Wayne H. Davis		225,000		2.82	%		1.60		04/29/13		225,695		571,954
Stephen E. Silva(3)		—		—			—		—		—		—

(1)	Options are transferable under limited conditions, primarily to accommodate estate planning purposes. These options generally vest in four equal installments commencing on the first anniversary following the grant date.
(2)	This column shows the hypothetical gains on the options granted based on assumed annual compound price appreciation of 5% and 10% over the full ten-year term of the options. The assumed rates of 5% and 10% appreciation are mandated by the SEC and do not represent our estimate or projection of future prices.
(3)	Mr. Silva terminated employment in 2003 and received no options in 2003.

Option/ Stock Incentive Plans

      The Plans.  Charter has granted stock options, restricted stock and other incentive compensation pursuant to two plans — the 1999 Charter Communications Option Plan and the Charter Communications, Inc. 2001 Stock Incentive Plan (the “2001 Stock Incentive Plan”). The 1999 Charter Communications Option Plan provided for the grant of options to purchase membership units in Charter Holdco to current and prospective employees and consultants of Charter Holdco and its affiliates and current and prospective non-employee directors of Charter. Membership units received upon exercise of any options are immediately exchanged for shares of Charter Class A common stock on a one-for-one basis.

      The 2001 Stock Incentive Plan provides for the grant of non-qualified stock options, stock appreciation rights, dividend equivalent rights, performance units and performance shares, share awards, phantom stock and/or shares of restricted stock (not to exceed 3,000,000 shares) as each term is defined in the 2001 Stock Incentive Plan. Employees, officers, consultants and directors of Charter and its subsidiaries and affiliates are eligible to receive grants under the 2001 Stock Incentive Plan. Generally, options expire 10 years from the grant date. Unless sooner terminated by the board of directors of Charter, the 2001 Stock Incentive Plan will terminate on February 12, 2011, and no option or award can be granted thereafter.

      Together, the plans allow for the issuance of up to a total of 90,000,000 shares of Charter Class A common stock (or units exchangeable for Charter Class A common stock). Any shares covered by options that are terminated under the 1999 Charter Communications Option Plan will be transferred to the 2001 Stock Incentive Plan, and no new options will be granted under the 1999 Charter Communications Option Plan. At December 31, 2003, 460,572 shares had been issued under the plans upon exercise of options, 91,978 had been issued upon vesting of restricted stock granted under the plans, and 154,562 shares were subject to future vesting under restricted stock agreements. Of the remaining 89,292,888 shares covered by the plans, as of December 31, 2003, 47,882,365 were subject to outstanding options (22,860,936 of which were vested) and 41,410,523 remain eligible for future grant.

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      In July 2003, we amended the plans to authorize the repricing of options, which could include reducing the exercise price per share of any outstanding option, permitting the cancellation, forfeiture or tender of outstanding options in exchange for other awards or for new options with a lower exercise price per share, or repricing or replacing any outstanding options by any other method.

      In January 2004, the Compensation Committee of the board of directors of Charter approved Charter’s Long-Term Incentive Program (“LTIP”) which is a program administered under the 2001 Stock Incentive Plan. Employees of Charter and its subsidiaries whose pay classifications exceed a certain level are eligible to receive stock options, and more senior level employees are eligible to receive stock options and performance shares. Under the LTIP, the stock options vest 25% on each of the first four anniversaries of the date of grant. The performance shares are earned on the third anniversary of the grant date, conditional upon Charter’s performance against financial performance measures and customer growth targets established by Charter’s management and approved by its board of directors as of the time of the award. No awards were made under the LTIP in 2003.

      The Option Plan Committee of the board of directors of Charter administers and authorizes grants and awards under the 2001 Stock Incentive Plan to any eligible individuals. The Option Plan Committee will determine the terms of each stock option grant, restricted stock grant or other award at the time of grant, including the exercise price to be paid for the shares, the vesting schedule for each option, the price, if any, to be paid by the grantee for the restricted stock, the restrictions placed on the shares, and the time or times when the restrictions will lapse. The Option Plan Committee also has the power to accelerate the vesting of any grant or extend the term thereof.

      Upon a change of control of Charter, the Option Plan Committee can shorten the exercise period of any option, have the survivor or successor entity assume the options with appropriate adjustments, or cancel options and pay out in cash. If an optionee’s or grantee’s employment is terminated without “cause” or for “good reason” following a “change in control” (as those terms are defined in the plans), unless otherwise provided in an agreement, with respect to such optionee’s or grantee’s awards under the plans, all outstanding options will become immediately and fully exercisable, all outstanding stock appreciation rights will become immediately and fully exercisable, the restrictions on the outstanding restricted stock will lapse, and all of the outstanding performance shares will vest and the restrictions on all of the outstanding performance shares will lapse as if all performance objectives had been satisfied at the maximum level.

      February 2004 Option Exchange.  In January 2004, Charter commenced an option exchange program in which employees of Charter and its subsidiaries were offered the right to exchange all stock options (vested and unvested) under the 1999 Charter Communications Option Plan and 2001 Stock Incentive Plan that had an exercise price over $10 per share for shares of restricted Charter Class A common stock or, in some instances, cash. Based on a sliding exchange ratio, which varied depending on the exercise price of an employee’s outstanding options, if an employee would have received more than 400 shares of restricted stock in exchange for tendered options, Charter issued to that employee shares of restricted stock in the exchange. If, based on the exchange ratios, an employee would have received 400 or fewer shares of restricted stock in exchange for tendered options, Charter instead paid to the employee cash in an amount equal to the number of shares the employee would have received multiplied by $5.00. The offer applied to options to purchase a total of 22,929,573 shares of Charter Class A common stock, or approximately 48% of Charter’s 47,882,365 total options (vested and unvested) issued and outstanding as of December 31, 2003. Participation by employees was voluntary. Those members of Charter’s board of directors who were not also employees of Charter or any of its subsidiaries were not eligible to participate in the exchange offer.

      In the closing of the exchange offer on February 20, 2004, Charter accepted for cancellation eligible options to purchase approximately 18,137,664 shares of Charter Class A common stock. In exchange, Charter granted approximately 1,966,686 shares of restricted stock, including 460,777 performance shares to eligible employees of the rank of senior vice president and above, and paid a total cash amount of approximately $4 million (which amount includes applicable withholding taxes) to those employees who received cash rather than shares of restricted stock. The grants of restricted stock will be effective as of

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February 25, 2004. Employees tendered approximately 79% of the options eligible to be exchanged under the program.

      Based on the results above, the cost to Charter of the stock option exchange program was approximately $12 million, with a 2004 cash compensation expense of approximately $4 million and a non-cash compensation expense of approximately $8 million to be expensed ratably over the three-year vesting period of the restricted stock in the exchange.

Employment Arrangements

      Mr. Vogel is currently employed by Charter under an employment agreement that was signed in 2001 and terminates on December 31, 2005. Ms. Bellville is employed by Charter under an employment agreement that terminates in September 2007. Of the other individuals named in the Summary Compensation Table, Mr. Silva is no longer an employee of Charter, but served in 2003 under the terms of an employment agreement signed in 2001.

      Mr. Vogel is employed as President and Chief Executive Officer, earning a base annual salary of $1,000,000 and is eligible to receive an annual bonus of up to $500,000, a portion based on personal performance goals and a portion based on company performance measured against criteria established by the board of directors of Charter with Mr. Vogel. Pursuant to his employment agreement, Mr. Vogel was granted 3,400,000 options to purchase Charter Class A common stock and 50,000 shares of restricted stock under the 2001 Stock Incentive Plan. Both the options and restricted shares vested 25% on the grant date, with the remainder vesting in 36 equal monthly installments beginning December 2002. Mr. Vogel’s agreement provides that if Mr. Vogel is terminated without cause or by Mr. Vogel for good reason (including, in the event Mr. Vogel is required to report directly or indirectly, to persons other than the board of directors of Charter), he is entitled to his aggregate base salary due during the remainder of the term and full prorated benefits for the year in which termination occurs. Mr. Vogel’s agreement includes a covenant not to compete for the balance of the initial term or any renewal term, but no more than one year in the event of termination without cause or by employee with good reason. Mr. Vogel’s agreement entitles him to participate in any disability insurance, pensions or other benefit plans afforded to employees generally or to executives of Charter, including Charter’s LTIP. Charter agreed to reimburse Mr. Vogel annually for the cost of term life insurance in the amount of $5 million, although he declined this reimbursement in 2001, 2002 and 2003. Mr. Vogel is entitled to reimbursement of fees and dues for his membership in a country club of his choice, which he declined in 2001, 2002 and 2003 and reimbursement for up to $10,000 per year for tax, legal and financial planning services. His agreement also provides for a car and associated expenses for Mr. Vogel’s use. Mr. Vogel’s agreement provides for automatic one-year renewals and also provides that Charter will cause him to be elected to the Charter board of directors without any additional compensation.

      Ms. Bellville is currently employed by Charter under an employment agreement that was entered into as of April 27, 2003 and terminates on September 1, 2007. Her annual base salary is $625,000 and she is eligible to receive an annual bonus in an amount to be determined by the board of directors of Charter, with a contractual minimum for 2003 of $203,125. Commencing in 2004, Ms. Bellville is eligible to receive a target annual bonus equal to 100% of her base salary for the applicable year at the discretion of the board of directors, 50% to be based on personal performance goals and 50% to be based on overall company performance. Under a prior offer letter dated December 3, 2002, Ms. Bellville was granted 500,000 options to purchase shares of Charter Class A common stock, which vested 25% on the date of the grant (December 9, 2002), with the balance to vest in 36 equal installments commencing January 2003. Ms. Bellville’s employment agreement provides that if she is terminated by Charter without cause or if she terminates the agreement for good reason (including due to a change in control of Charter or if Ms. Bellville is required to report, directly or indirectly, to persons other than the Chief Executive Officer), Charter will pay Ms. Bellville an amount equal to the aggregate base salary due to Ms. Bellville during the remainder of the term, or renewal term and a full prorated bonus for the year in which the termination occurs, within thirty days of termination. Ms. Bellville’s agreement includes a covenant not to compete for the balance of the initial term or any renewal term, but no more than one year, in the event of termination without cause or by employee with good reason. Her agreement further provides that she is

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entitled to participate in any disability insurance, pension or other benefit plan afforded to employees generally or to executives of Charter, including Charter’s LTIP. Ms. Bellville is entitled to a monthly car allowance and reimbursement for all business expenses associated with the use of such car. Ms. Bellville’s agreement provides that she is entitled to the reimbursement of dues for her membership in a country club of her choice, and reimbursement for up to $5,000 per year for tax, legal and financial planning services. Her base salary may be increased at the discretion of the board of directors of Charter. Ms. Bellville’s agreement provides for automatic one-year renewals.

      Mr. Silva was employed as Executive Vice President — Corporate Development and Chief Technology Officer. Until his resignation in July 2003, he received a base salary of $300,000 and was eligible to receive an annual bonus of up to 50% of base, according to Charter’s Executive Bonus Policy in accordance with past practices, and additional bonuses at the discretion of the board of directors of Charter. Pursuant to his employment agreement, Mr. Silva received 36,000 shares of restricted stock under the 2001 Stock Incentive Plan. Under his agreement, Mr. Silva’s restricted shares vested 25% on the grant date, with the remainder to vest in 36 equal monthly installments beginning December 2002. Mr. Silva’s agreement provided that he was eligible for any disability insurance, pension or other benefit plan offered to employees generally or to executives of Charter. Mr. Silva’s agreement also provided that, to the extent Charter does not provide life insurance in an amount at least equal to the unpaid amount of the employee’s base salary through the end of the term of his agreement. Charter would continue to pay his estate an amount equal to his base salary in installments through the end of the term.

      In addition to the indemnification provisions which apply to all employees under our bylaws, each of these agreements provides that Charter will indemnify and hold harmless each employee to the maximum extent permitted by law from and against any claims, damages, liabilities, losses, costs or expenses in connection with or arising out of the performance by the applicable employee of his or her duties. Each of the above agreements also contains confidentiality and non-solicitation provisions.

      Mr. Chang and Mr. Huseby are employed by Charter under the terms contained in offer letters effective December 2, 2003 and January 5, 2004, respectively, each providing for an annual base salary of $400,000 and eligibility for an annual incentive target of 100% of the base salary (based on a combination of personal performance goals and overall company performance). Mr. Chang and Mr. Huseby are also eligible to participate in the 2001 Stock Incentive Plan. Under this plan, Mr. Chang and Mr. Huseby were each granted 350,000 options to purchase Charter Class A common stock of Charter in December and January, respectively and 50,000 restricted shares on December 9, 2003 and January 5, 2004, respectively. Mr. Chang and Mr. Huseby are also entitled to participate in Charter’s LTIP. Mr. Huseby’s and Mr. Chang’s agreements provide that one half of each of their unvested restricted shares would immediately vest, and one half of each of their unvested options of the initial option grant would vest if (1) there is a change in Charter’s current Chief Executive Officer, (2) there is a change in reporting relationship to anyone other than the Chief Executive Officer, (3) there is a requirement that the employee relocate, (4) there is a change of control of Charter or (5) if terminated without cause. In addition, Mr. Chang and Mr. Huseby would be entitled to eighteen months of full severance benefits at their current compensation rate, plus the pro rata portion of their bonus amounts within thirty days after termination because of any of these events.

Limitation of Directors’ Liability and Indemnification Matters

      Charter’s certificate of incorporation limits the liability of directors to the maximum extent permitted by Delaware law. The Delaware General Corporation Law provides that a corporation may eliminate or limit the personal liability of a director for monetary damages for breach of fiduciary duty as a director, except for liability for:

(1)	any breach of the director’s duty of loyalty to the corporation and its shareholders;
(2)	acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

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(3)	unlawful payments of dividends or unlawful stock purchases or redemptions; or
(4)	any transaction from which the director derived an improper personal benefit.

      Charter’s bylaws provide that it will indemnify all persons whom it may indemnify pursuant thereto to the fullest extent permitted by law.

      The limited liability company agreement of CCH II and the bylaws of CCH II Capital may require CCH II and CCH II Capital, respectively, to indemnify Charter and the individual named defendants in connection with the matters set forth in “Business — Legal Proceedings.”

      Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling Charter pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

      Charter has reimbursed certain of its current and former directors, officers and employees in connection with their defense of certain legal actions. See “Certain Relationships and Related Transactions — Other Miscellaneous Relationships — Indemnification Advances.”

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BENEFICIAL OWNERSHIP OF SECURITIES

      The following table sets forth certain information regarding beneficial ownership of Charter’s Class A common stock as of February 29, 2004 by:

•  each person serving as a director of CCH II or Charter;

•  the chief executive officer and the other individuals named in the Summary Compensation Table;

•  all persons serving as directors and officers of CCH II and Charter, as a group; and

•  each person known by us to own beneficially 5% or more of the outstanding Charter Class A common stock.

      With respect to the percentage of voting power set forth in the following table:

•  each holder of Charter Class A common stock is entitled to one vote per share; and

•  each holder of Charter Class B common stock is entitled to (i) ten votes per share of Charter Class B common stock held by such holder and its affiliates and (ii) ten votes per share of Charter Class B common stock for which membership units in Charter Holdco held by such holder and its affiliates are exchangeable.

					Class A
					Shares
			Unvested		Receivable						Class B
			Restricted		on Exercise		Class A				Shares
	Number of		Class A		of Vested		Shares				Issuable
	Class A Shares		Shares		Options or		Receivable on		Number of		upon					% of
	(Voting and		(Voting		Other		Exercise of		Class B		Exchange or		% of			Voting
	Investment		Power		Convertible		Convertible		Shares		Conversion of		Equity			Power
Name and Address of Beneficial Owner	Power)(1)		Only)(2)		Securities(3)		Sr. Notes		Owned		Units(4)		(4)(5)			(5)(6)
Paul G. Allen(7)		29,110,640		9,882		10,000				50,000		339,132,031		58.1	%		92.8	%
Charter Investment, Inc.(8)												222,818,858		43.0	%		*
Vulcan Cable III, Inc.(9)												116,313,173		28.3	%		*
Carl E. Vogel		80,208		699,792		200,000		34,786						*			*
John H. Tory		4,300		9,882		40,000								*			*
Marc B. Nathanson		370,000		9,882		50,000		46,382						*			*
Charles M. Lillis(10)				11,429										*			*
David C. Merritt				9,882										*			*
Nancy B. Peretsman		60,000		9,882		50,000								*			*
William D. Savoy(11)				9,882		50,000								*			*
Larry W. Wangberg		3,000		9,882		40,000								*			*
Margaret A. Bellville						291,666
Curtis S. Shaw		5,000				331,583								*			*
Steven A. Schumm(12)		12,440		108,768		60,000		4,638						*			*
Wayne H. Davis		250		8,000		66,250								*			*
All current directors and executive officers as a group (18 persons)		29,669,338		1,014,377		1,261,999		88,125		50,000		339,132,031		58.3	%		92.8	%
Stephen E. Silva(13)						395,833								*			*
Mark Cuban(14)		19,000,000												6.4	%		*
Wallace R. Weitz & Company(15)		34,100,000												11.6	%
UBS Americas, Inc.(16)		19,520,000												6.6	%		*

* Less than 1%.

(1)  Includes shares for which the named person has:

•  sole voting and investment power; or

•  shared voting and investment power with a spouse.

     Does not include shares that may be acquired through exercise of options.

(2)  Includes unvested shares of restricted stock issued under the 2001 Stock Incentive Plan (including those issued in the February 2004 option exchange, for those eligible employees who elected to

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	participate), as to which the applicable director or employee has sole voting power but not investment power.
(3)	Includes shares of Charter Class A common stock issuable upon exercise of options that have vested or will vest on or before April 29, 2004 under the 1999 Charter Communications Option Plan and the 2001 Stock Incentive Plan.
(4)	Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act. The beneficial owners at February 29, 2004 of Charter Class B common stock, Charter Holdco membership units and convertible senior notes of Charter are deemed to be beneficial owners of an equal number of shares of Charter Class A common stock because such holdings are either convertible into Charter Class A shares (in the case of Charter Class B shares and convertible senior notes) or exchangeable (directly or indirectly) for Charter Class A shares (in the case of the membership units) on a one-for-one basis. Unless otherwise noted, the named holders have sole investment and voting power with respect to the shares listed as beneficially owned. An issue has arisen as to whether the documentation for the Bresnan transaction was correct and complete with regard to the ultimate ownership of the CC VIII, LLC membership interests following the consummation of the Bresnan put transaction on June 6, 2003. See footnote (7) below and see “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter Communications, Inc. and Its Subsidiaries — Equity Put Rights — CC VIII.”
(5)	The calculation of this percentage assumes for each person that:

•	295,136,831 shares of Charter Class A common stock are issued and outstanding as of February 29, 2004;
•	50,000 shares of Charter Class B common stock held by Mr. Allen have been converted into shares of Charter Class A common stock;
•	the acquisition by such person of all shares of Charter Class A common stock that such person or affiliates of such person has the right to acquire upon exchange of membership units in subsidiaries or conversion of Series A Convertible Redeemable Preferred Stock or 5.75% or 4.75% convertible senior notes;
•	the acquisition by such person of all shares that may be acquired upon exercise of options to purchase shares or exchangeable membership units that have vested or will vest by February 29, 2004; and
•	that none of the other listed persons or entities has received any shares of Charter Class A common stock that are issuable to any of such persons pursuant to the exercise of options or otherwise.
	A person is deemed to have the right to acquire shares of Charter Class A common stock with respect to options vested under the 1999 Charter Communications Option Plan. When vested, these options are exercisable for membership units of Charter Holdco, which are immediately exchanged on a one-for-one basis for shares of Charter Class A common stock. A person is also deemed to have the right to acquire shares of Charter Class A common stock issuable upon the exercise of vested options under the 2001 Stock Incentive Plan.

(6)

The calculation of this percentage assumes that Mr. Allen’s equity interests are retained in the form that maximizes voting power (i.e., the 50,000 shares of Charter Class B common stock held by Mr. Allen have not been converted into shares of Charter Class A common stock; that the membership units of Charter Holdco owned by each of Vulcan Cable III, Inc. and Charter Investment, Inc. have not been exchanged for shares of Charter Class A common stock).

(7)

The total listed includes:

•  222,818,858 membership units in Charter Holdco held by Charter Investment, Inc.; and

•  116,313,173 membership units in Charter Holdco held by Vulcan Cable III, Inc.

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The listed total excludes 24,273,943 shares of Charter Class A common stock issuable upon exchange of units of Charter Holdco which may be issuable to Charter Investment, Inc. (which is owned by Mr. Allen) as a consequence of the closing of its acquisition of the membership interests in CC VIII, LLC that were put to Mr. Allen and were purchased by him on June 6, 2003. An issue has arisen regarding the ultimate ownership of such CC VIII, LLC membership interests following the consummation of such put transaction. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter Communications, Inc. and Its Subsidiaries — Equity Put Rights — CC VIII.”

The address of this person is: 505 Fifth Avenue South, Suite 900, Seattle, WA 98104.

(8)	Includes 222,818,858 membership units in Charter Holdco, which are exchangeable for shares of Charter Class B common stock on a one-for-one basis, which are convertible to shares of Charter Class A common stock on a one-for-one basis. The address of this person is Charter Plaza, 12405 Powerscourt Drive, St. Louis, MO 63131.
(9)	Includes 116,313,173 membership units in Charter Holdco, which are exchangeable for shares of Charter Class B common stock on a one-for-one basis, which are convertible to shares of Charter Class A common stock on a one-for-one basis. The address of this person is: 505 Fifth Avenue South, Suite 900, Seattle, WA 98104.

(10)	Mr. Lillis was granted 11,429 shares of restricted Charter Class A common stock on October 3, 2003, which shares will vest fully on the one year anniversary of the grant date.
(11)	Mr. Savoy resigned from the board of directors of Charter in April 2004.
(12)	Includes 1,000 shares for which Mr. Schumm has shared investment and voting power.
(13)	Under the terms of Mr. Silva’s severance, his options will continue to vest until October 15, 2004, and all vested options will be exercisable until 60 days thereafter.
(14)	The equity ownership reported in this table is based upon holder’s Schedule 13G filed with the SEC May 19, 2003. The address of this person is: 5424 Deloache, Dallas, Texas 75220.
(15)	The equity ownership reported in this table, for both the named holder and its president and primary owner, Wallace R. Weitz, is based upon holders’ Schedule 13G/A filed with the SEC on January 23, 2004, and reflects the holders’ ownership in its capacity as an investment advisor and not ownership for its own account. The address of this person is: 1125 South 103rd Street, Suite 600, Omaha, Nebraska 68124-6008.
(16)	The equity ownership reported in this table is based upon holder’s Schedule 13G filed with the SEC February 19, 2004. The address of this person is: 677 Washington Blvd., Stamford, Connecticut 06901.

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Securities Authorized for Issuance Under Equity Compensation Plans

      The following information is provided as of December 31, 2003 with respect to equity compensation plans:

	Number of					Number of
	securities to be			Weighted-average		securities remaining
	issued upon exercise			exercise price of		available for future
	of outstanding options,			outstanding options		issuance under equity
Plan Category	warrants and rights			warrants and rights		compensation plans
Equity compensation plans approved by security holders		47,882,365	(1)	$	12.48		41,410,523
Equity compensation plans not approved by security holders		186,385	(2)	$	20.46		—
TOTAL		48,068,750		$	12.51		41,410,523

(1)

This total does not include 154,562 shares issued pursuant to restricted stock grants made under the 2001 Stock Incentive Plan, which were subject to vesting based on continued employment.

(2)

Includes shares of Charter Class A common stock to be issued upon exercise of options granted pursuant to an individual compensation agreement with a consultant. In addition, in December 2003, subject to certain conditions, Charter agreed (1) to exchange the 186,385 options listed above for 18,638 shares of Charter Class A common stock, and (2) to issue to the holder options to purchase an additional 289,268 shares of Charter Class A common stock for an exercise price of $3.905 per share.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The following sets forth certain transactions in which we are involved and in which our directors, executive officers and affiliates of Charter or us have or may have a material interest. The transactions fall generally into three broad categories:

•  Transactions in which Mr. Allen has an interest that arise directly out of Mr. Allen’s investment in Charter Communications, Inc. and Charter Holdco. A large number of the transactions described below arise out of Mr. Allen’s direct and indirect (through Charter Investment, Inc., or the Vulcan entities, each of which Mr. Allen controls) investment in Charter and its subsidiaries, as well as commitments made as consideration for the investments themselves.

•  Transactions with third party providers of products, services and content in which Mr. Allen has a material interest. Mr. Allen has numerous investments in the areas of technology and media. We have a number of commercial relationships with third parties in which Mr. Allen has an interest.

•  Other Miscellaneous Transactions. We have a limited number of transactions in which certain of the officers, directors and principal shareholders of Charter and its subsidiaries, other than Mr. Allen, have an interest.

      A number of our debt instruments and those of our subsidiaries require delivery of fairness opinions for transactions with Mr. Allen or his affiliates involving more than $50 million. Such fairness opinions have been obtained whenever required. All of our transactions with Mr. Allen or his affiliates have been considered for approval either by the board of directors of Charter or a committee of the board of directors and, in compliance with corporate governance requirements, all related party transactions are considered by Charter’s Audit Committee comprised entirely of independent directors. All of our transactions with Mr. Allen or his affiliates have been deemed by the board of directors or a committee of the board of directors to be in our best interest. Except where noted below, we do not believe that these transactions present any unusual risks for us that would not be present in any similar commercial transaction.

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      The chart below summarizes certain information with respect to these transactions. Additional information regarding these transactions is provided following the chart.

Transaction	Related Party	Description of Transaction
Intercompany Management Arrangements	Paul G. Allen	The subsidiaries of Charter Holdco paid Charter approximately $69 million, $79 million and $84 million for management services rendered in 2001, 2002 and 2003, respectively.
Management Agreement	Paul G. Allen	No fees were paid in 2001, 2002 or 2003, although total management fees payable by our subsidiaries to Charter Investment, Inc., exclusive of interest, were approximately $14 million at December 31, 2001, 2002 and 2003.
Channel Access Agreement	Paul G. Allen	At Vulcan Ventures’ request, we will provide Vulcan Ventures with exclusive rights for carriage on eight of our digital cable channels as partial consideration for a prior capital contribution of $1.3 billion.
Equity Put Rights	Paul G. Allen	Certain sellers of cable systems that we acquired were granted, or previously had, the right, as described below, to put to Paul Allen equity in Charter (in the case of Rifkin and Falcon), Charter Holdco (in the case of Rifkin) and CC VIII, LLC (in the case of Bresnan) issued to such sellers in connection with such acquisitions.
Funding Commitment of Vulcan Inc.	Paul G. Allen	Pursuant to a commitment letter dated April 14, 2003, Vulcan Inc., which is an affiliate of Paul Allen, agreed to lend, under certain circumstances, or cause an affiliate to lend to Charter Holdings or any of its subsidiaries a total amount of up to $300 million, which amount included a subfacility of up to $100 million for the issuance of letters of credit. In November 2003, the commitment was terminated. We incurred expenses to Vulcan Inc. totaling $5 million in connection with the commitment prior to termination.
High Speed Access Corp. Asset Purchase Agreement	Paul G. Allen	In February 2002, our subsidiary purchased certain assets of High Speed Access for approximately $78 million, plus the delivery of 37,000 shares of High Speed Access Series D preferred stock and certain warrants. In connection with the transaction, High Speed Access also purchased 38,000 shares of its Series D preferred stock from Vulcan Ventures for $8 million, and all of Vulcan Ventures’ shares of High Speed Access common stock.
High Speed Access Corp.	Paul G. Allen	In January 2002, we granted a royalty free right to use intellectual property purchased by Charter Holdco, received approximately $4 million in management fees and approximately $17 million in revenues and paid approximately $2 million under agreements that have terminated.

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Transaction	Related Party	Description of Transaction
TechTV Carriage Agreement	Paul G. Allen William D. Savoy Larry W. Wangberg	We recorded approximately $9 million, $4 million and $1 million from TechTV under the affiliation agreement in 2001, 2002 and 2003, respectively related to launch incentives as a reduction of programming expense. We paid TechTV $0, approximately $0.2 million and $80,600 in 2001, 2002 and 2003, respectively.
Oxygen Media Corporation Carriage Agreement	Paul G. Allen	We paid Oxygen Media approximately $3 million, $6 million and $9 million under a carriage agreement in exchange for programming in 2001, 2002 and 2003, respectively. We recorded approximately $2 million in 2002 and approximately $1 million in 2003, from Oxygen Media related to launch incentives as a reduction of programming expense. We hold warrants to purchase 2.4 million shares of Oxygen Media common stock and received the rights to receive unregistered shares of Oxygen Media common stock to be issued on or prior to February 2, 2005 at a guaranteed fair market value of $34 million. We recognized approximately $3 million, $6 million and $9 million as a reduction of programming expense in 2001, 2002 and 2003, respectively, in recognition of the guaranteed value of the investment.
Portland Trail Blazers Carriage Agreement	Paul G. Allen	We paid approximately $1 million for rights to carry the cable broadcast of certain Trail Blazers basketball games in both 2001 and 2002, and approximately $135,200 in 2003.
Action Sports Cable Network Carriage Agreement	Paul G. Allen	We paid approximately $0.4 million, $1 million, and $0 for rights to carry Action Sports programming in 2001, 2002 and 2003, respectively.
Click2learn, Inc. Software License Agreement	Paul G. Allen	We paid approximately $250,000 and $57,100 under a Software License Agreement in 2002 and 2003, respectively.
Digeo, Inc. Broadband Carriage Agreement	Paul G. Allen William D. Savoy Carl E. Vogel	We paid Digeo approximately $4 million for customized development of the i-channels and the local content tool kit in 2003. We entered into a license agreement in 2004 for the Digeo software that runs DVR units purchased from a third party. We executed a binding term sheet in 2004 for the purchase of up to 70,000 DVR units and a related software license, both subject to satisfaction of certain conditions.

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Transaction	Related Party	Description of Transaction
USA Networks/Home Shopping Network	Paul G. Allen William D. Savoy	For the year ended December 31, 2001, we received approximately $12 million from USA Networks under the affiliation agreement and for commissions from USA Networks for home shopping sales generated by its customers and/or promotion of the Home Shopping Network. For the year ended December 31, 2001, we paid USA Networks approximately $39 million for cable television programming.
ADC Telecommunications Inc.	Larry W. Wangberg	We paid approximately $759,600 and $60,100 to purchase certain access/network equipment in 2002 and 2003, respectively.
HDNet and HDNet Movies Network	Mark Cuban	Charter Holdco is a party to an agreement to carry two around-the-clock, high definition networks, HDNet and HDNet Movies. We paid HDNet and HDNet Movies approximately $21,900 in 2003.
Office lease agreement	David L. McCall	We paid approximately $117,600, $117,600 and $189,200 in 2001, 2002 and 2003, respectively under an office lease agreement to a partnership controlled by Mr. McCall.
Construction services	David L. McCall	In 2001, 2002 and 2003, we paid approximately $571,600, $644,800 and $381,300, respectively to a construction company controlled by Mr. McCall’s brother, and approximately $462,100, $3 million and $373,800, respectively to a construction company controlled by Mr. McCall’s son.
Lease arrangements	Marc B. Nathanson	We paid approximately $127,000, $76,000 and $16,600 in 2001, 2002 and 2003, respectively, to companies controlled by Mr. Nathanson under a warehouse lease agreement and in 2001 we paid approximately $204,000 in rent under an office lease agreement and a payment of $639,000 to terminate such lease.
Charter airplane	Howard L. Wood	In 2001, Mr. Wood received a benefit of approximately $118,500 for the cost of two individuals to operate an airplane for a company controlled by Mr. Wood. In addition, Mr. Wood also used Charter’s airplane for occasional personal use in 2001, a benefit valued at $12,500 for the year ended December 31, 2001.

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Transaction	Related Party	Description of Transaction
Payment for relatives’ services	Howard L. Wood Jerald L. Kent	In 1999, one of Mr. Wood’s daughters, received a bonus in the form of a three-year promissory note bearing interest at 7% per year. The amount of principal and interest forgiven on this note for the year ended December 31, 2001, was $85,500, and the outstanding balance on the note was forgiven effective as of February 22, 2002. Another daughter of Mr. Wood received approximately $70,210 during the year ended December 31, 2001 for event planning services performed by her company. In 2001 a travel agency owned and operated by Mr. Kent’s mother-in-law received approximately $132,000 for travel arrangements made for Charter by her company.
Replay TV Joint Venture	Paul G. Allen	Charter Communications Ventures received management fees of $1 million for the year ended December 31, 2001.
Enstar Limited Partnership Systems Purchase and
Management Services	Charter officers who were appointed by a Charter subsidiary (as general partner) to serve as officers of Enstar limited partnerships	Certain of our subsidiaries purchased certain assets of the Enstar Limited Partnerships, for approximately $63 million. We also earned approximately $2 million, $1 million and $469,300 in 2001, 2002 and 2003, respectively by providing management services to the Enstar Limited Partnerships.
Indemnification Advances	Current and former directors of Charter and current and former officers of Charter named in certain legal proceedings	Charter reimbursed certain of its current and former directors and executive officers a total of approximately $3 million and $8 million for costs incurred in connection with litigation matters in 2002 and 2003, respectively.
Intercompany Loans	Charter, Paul G. Allen, Charter Communications Holding Company	In 2001, 2002 and 2003, we and our subsidiaries paid approximately $4 million, $4 million and $2 million, respectively, in interest to Charter Holdco and accrued an additional $3 million, $4 million and $2 million, respectively, in interest on certain indebtedness, the average month end balance of which was approximately $74 million, $92 million and $46 million, in 2001, 2002 and 2003, respectively.

      The following sets forth more details regarding the transactions summarized above.

Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries

      As noted above, a number of our related party transactions arise out of Mr. Allen’s investment in Charter and its subsidiaries, including us. Some of these transactions are with Charter Investment, Inc. and Vulcan Ventures (both owned 100% by Mr. Allen), Charter (controlled by Mr. Allen) and Charter

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Holdco (approximately 46.5% owned by us and 53.5% owned by other affiliates of Mr. Allen). See “Summary — Organizational Structure” for more information regarding the ownership by Mr. Allen and certain of his affiliates.

Intercompany Management Arrangements

      Charter is a party to management arrangements with Charter Holdco and certain of its subsidiaries, including us. Under these agreements, Charter provides management services for the cable systems owned or operated by its subsidiaries, including us. These management agreements provide for reimbursement to Charter for all costs and expenses incurred by it attributable to the ownership and operation of the managed cable systems. In general, the total amount paid by Charter Holdco and all of its subsidiaries is limited to the amount necessary to reimburse Charter for all of its expenses, costs, losses, liabilities and damages paid or incurred by it in connection with the performance of its services under the various management agreements and in connection with its corporate overhead, administration, salary expense and similar items. The expenses subject to reimbursement include fees Charter is obligated to pay under the mutual services agreement with Charter Investment, Inc. Payment of management fees by Charter’s subsidiaries is subject to certain restrictions under the credit facilities and indentures of such subsidiaries. If any portion of the management fee due and payable is not paid, it is deferred by Charter and accrued as a liability of such subsidiaries. Any deferred amount of the management fee will bear interest at the rate of 10% per year, compounded annually, from the date it was due and payable until the date it is paid. For the years ended December 31, 2001, 2002 and 2003, our subsidiaries paid approximately $69 million, $79 million and $84 million, respectively, in management fees to Charter.

Previous Management Agreement with Charter Investment, Inc.

      Prior to November 12, 1999, Charter Investment, Inc. provided management and consulting services to our operating subsidiaries for a fee equal to 3.5% of the gross revenues of the systems then owned, plus reimbursement of expenses. The balance of management fees payable under the previous management agreement was accrued with payment at the discretion of Charter Investment, Inc., with interest payable on unpaid amounts. For the year ended December 31, 2003, Charter’s subsidiaries did not pay any fees to Charter Investment, Inc. to reduce management fees payable. As of December 31, 2001, 2002 and 2003, total management fees payable by our subsidiaries to Charter Investment, Inc. were approximately $14 million, exclusive of any interest that may be charged.

Charter Communications Holding Company, LLC Limited Liability Agreement — Taxes

      The limited liability company agreement of Charter Holdco contains special provisions regarding the allocation of tax losses and profits among its members — Vulcan Cable III, Inc., Charter Investment, Inc. and Charter. In some situations, these provisions may cause us to pay more tax than would otherwise be due if Charter Holdco had allocated profits and losses among its members based generally on the number of common membership units. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Income Taxes.”

Vulcan Ventures Channel Access Agreement

      Vulcan Ventures, an entity controlled by Mr. Allen, Charter, Charter Investment and Charter Holdco are parties to an agreement dated September 21, 1999 granting to Vulcan Ventures the right to use up to eight of our digital cable channels as partial consideration for a prior capital contribution of $1.325 billion.

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Specifically, at Vulcan Ventures’ request, we will provide Vulcan Ventures with exclusive rights for carriage of up to eight digital cable television programming services or channels on each of the digital cable systems with local and to the extent available, national control of the digital product owned, operated, controlled or managed by Charter or its subsidiaries now or in the future of 550 megahertz or more. If the system offers digital services but has less than 550 megahertz of capacity, then the programming services will be equitably reduced. Upon request of Vulcan Ventures, we will attempt to reach a comprehensive programming agreement pursuant to which it will pay the programmer, if possible, a fee per digital video customer. If such fee arrangement is not achieved, then we and the programmer shall enter into a standard programming agreement. The initial term of the channel access agreement was 10 years, and the term extends by one additional year (such that the remaining term continues to be 10 years) on each anniversary date of the agreement unless either party provides the other with notice to the contrary at least 60 days prior to such anniversary date. To date, Vulcan Ventures has not requested to use any of these channels. However, in the future it is possible that Vulcan Ventures could require us to carry programming that is less profitable to us than the programming that we would otherwise carry and our results would suffer accordingly.

Equity Put Rights

      CC VIII. As part of our acquisition of the cable systems owned by Bresnan Communications Company Limited Partnership in February 2000, CC VIII, LLC, our indirect limited liability company subsidiary, issued, after adjustments, 24,279,943 Class A preferred membership units (collectively, the “CC VIII interest”) with a value and an initial capital account of approximately $630 million to certain sellers affiliated with AT&T Broadband, subsequently owned by Comcast Corporation (the “Comcast sellers”). While held by the Comcast sellers, the CC VIII interest was entitled to a 2% priority return on its initial capital account and such priority return was entitled to preferential distributions from available cash and upon liquidation of CC VIII, LLC. While held by the Comcast sellers, the CC VIII interest generally did not share in the profits and losses of CC VIII, LLC. Mr. Allen granted the Comcast sellers the right to sell to him the CC VIII interest for approximately $630 million plus 4.5% interest annually from February 2000 (the “Comcast put right”). In April 2002, the Comcast sellers exercised the Comcast put right in full, and this transaction was consummated on June 6, 2003. Accordingly, Mr. Allen has become the holder of the CC VIII interest, indirectly through an affiliate. Consequently, subject to the matters referenced in the next paragraph, Mr. Allen generally thereafter will be allocated his pro rata share (based on number of membership interests outstanding) of profits or losses of CC VIII, LLC. In the event of a liquidation of CC VIII, LLC, Mr. Allen would be entitled to a priority distribution with respect to the 2% priority return (which will continue to accrete). Any remaining distributions in liquidation would be distributed to CC V Holdings, LLC and Mr. Allen in proportion to CC V Holdings, LLC’s capital account and Mr. Allen’s capital account (which will equal the initial capital account of the Comcast sellers of approximately $630 million, increased or decreased by Mr. Allen’s pro rata share of CC VIII, LLC’s profits or losses (as computed for capital account purposes) after June 6, 2003). The limited liability company agreement of CC VIII, LLC does not provide for a mandatory redemption of the CC VIII interest.

      An issue has arisen as to whether the documentation for the Bresnan transaction was correct and complete with regard to the ultimate ownership of the CC VIII interest following consummation of the Comcast put right. Specifically, under the terms of the Bresnan transaction documents that were entered into in June 1999, the Comcast sellers originally would have received, after adjustments, 24,273,943 Charter Holdco membership units, but due to an FCC regulatory issue raised by the Comcast sellers shortly before closing, the Bresnan transaction was modified to provide that the Comcast sellers instead would receive the preferred equity interests in CC VIII, LLC, represented by the CC VIII interest. As part of the last-minute changes to the Bresnan transaction documents, a draft amended version of the Charter Holdco limited liability company agreement was prepared, and contract provisions were drafted for that agreement that would have required an automatic exchange of the CC VIII interest for 24,273,943 Charter Holdco membership units if the Comcast sellers exercised the Comcast put right and sold the CC VIII interest to Mr. Allen or his affiliates. However, the provisions that would have required this

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automatic exchange did not appear in the final version of the Charter Holdco limited liability company agreement that was delivered and executed at the closing of the Bresnan transaction. The law firm that prepared the documents for the Bresnan transaction brought this matter to the attention of Charter and representatives of Mr. Allen in 2002.

      Thereafter, the board of directors of Charter formed a Special Committee (currently comprised of Messrs. Tory, Wangberg and Merritt) to investigate the matter and take any other appropriate action on behalf of Charter with respect to this matter. After conducting an investigation of the relevant facts and circumstances, the Special Committee determined that a “scrivener’s error” had occurred in February 2000 in connection with the preparation of the last-minute revisions to the Bresnan transaction documents and that, as a result, Charter should seek the reformation of the Charter Holdco limited liability company agreement, or alternative relief, in order to restore and ensure the obligation that the CC VIII interest be automatically exchanged for Charter Holdco units. The Special Committee further determined that, as part of such contract reformation or alternative relief, Mr. Allen should be required to contribute the CC VIII interest to Charter Holdco in exchange for 24,273,943 Charter Holdco membership units. The Special Committee also recommended to the board of directors of Charter that, to the extent the contract reformation is achieved, the board of directors should consider whether the CC VIII interest should ultimately be held by Charter Holdco or Charter Holdings or another entity owned directly or indirectly by them.

      Mr. Allen disagrees with the Special Committee’s determinations described above and has so notified the Special Committee. Mr. Allen contends that the transaction is accurately reflected in the transaction documentation and contemporaneous and subsequent company public disclosures.

      The parties engaged in a process of non-binding mediation to seek to resolve this matter, without success. The Special Committee is evaluating what further actions or processes it may undertake to resolve this dispute. To accommodate further deliberation, each party has agreed to refrain from initiating legal proceedings over this matter until it has given at least ten days’ prior notice to the other. In addition, the Special Committee and Mr. Allen have determined to utilize the Delaware Court of Chancery’s program for mediation of complex business disputes in an effort to resolve the CC VIII interest dispute. If the Special Committee and Mr. Allen are unable to reach a resolution through that mediation process or to agree on an alternative dispute resolution process, the Special Committee intends to seek resolution of this dispute through judicial proceedings in an action that would be commenced, after appropriate notice, in the Delaware Court of Chancery against Mr. Allen and his affiliates seeking contract reformation, declaratory relief as to the respective rights of the parties regarding this dispute and alternative forms of legal and equitable relief. The ultimate resolution and financial impact of the dispute are not determinable at this time.

      Rifkin. On September 14, 1999, Mr. Allen and Charter Holdco entered into a put agreement with certain sellers of the Rifkin cable systems that received a portion of their purchase price in the form of 3,006,202 Class A preferred membership units of Charter Holdco. This put agreement allowed these holders to compel Charter Holdco to redeem their Class A preferred membership units at any time before September 14, 2004 at $1.00 per unit, plus accretion thereon at 8% per year from September 14, 1999. Mr. Allen had guaranteed the redemption obligation of Charter Holdco. These units were put to Charter Holdco for redemption, and were redeemed on April 18, 2003 for a total price of approximately $3.9 million.

      Mr. Allen also was a party to a put agreement with certain sellers of the Rifkin cable systems that received a portion of their purchase price in the form of shares of Class A common stock of Charter. Under this put agreement, such holders have the right to sell to Mr. Allen any or all of such shares of Charter’s Class A common stock at $19 per share (subject to adjustments for stock splits, reorganizations and similar events), plus interest at a rate of 4.5% per year, compounded annually from November 12, 1999. Approximately 4.6 million shares were put to Mr. Allen under these agreements prior to their expiration on November 12, 2003.

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      Falcon. Mr. Allen also was a party to a put agreement with certain sellers of the Falcon cable systems (including Mr. Nathanson, one of our directors) that received a portion of their purchase price in the form of shares of Class A common stock of Charter. Under the Falcon put agreement, such holders had the right to sell to Mr. Allen any or all shares of Class A common stock received in the Falcon acquisition at $25.8548 per share (subject to adjustments for stock splits, reorganizations and similar events), plus interest at a rate of 4.5% per year, compounded annually from November 12, 1999. Approximately 19.4 million shares were put to Mr. Allen under these agreements prior to their expiration on November 12, 2003.

Previous Funding Commitment of Vulcan Inc.

      Effective April 14, 2003, our subsidiary, Charter Communications VII, LLC entered into a commitment letter with Vulcan Inc., which is an affiliate of Paul Allen, under which Vulcan Inc. agreed to lend, under certain circumstances, or cause an affiliate to lend initially to Charter Communications VII, LLC, or another subsidiary of Charter Holdings, up to $300 million, which amount included a subfacility of up to $100 million for the issuance of letters of credit. No amounts were ever drawn under the commitment letter. In November 2003, the commitment was terminated. We incurred expenses to Vulcan Inc. totaling $5 million in connection with the commitment (including an extension fee) prior to termination.

Allocation of Business Opportunities with Mr. Allen

      As described under “— Third Party Business Relationships in which Mr. Allen has an Interest” in this section, Mr. Allen and a number of his affiliates have interests in various entities that provide services or programming to our subsidiaries. Given the diverse nature of Mr. Allen’s investment activities and interests, and to avoid the possibility of future disputes as to potential business, Charter and Charter Holdco, under the terms of their respective organizational documents, may not, and may not allow their subsidiaries, to engage in any business transaction outside the cable transmission business except for the Digeo, Inc. joint venture; a joint venture to develop a digital video recorder set-top terminal; an existing investment in Cable Sports Southeast, LLC, a provider of regional sports programming; as an owner of the business of Interactive Broadcaster Services Corporation or, Chat TV, an investment in @Security Broadband Corp., a company developing broadband security applications; and incidental businesses engaged in as of the closing of Charter’s initial public offering in November 1999. This restriction will remain in effect until all of the shares of Charter’s high-vote Class B common stock have been converted into shares of Charter Class A common stock due to Mr. Allen’s equity ownership falling below specified thresholds.

      Should Charter or Charter Holdco or any of their subsidiaries wish to pursue, or allow their subsidiaries to pursue, a business transaction outside of this scope, it must first offer Mr. Allen the opportunity to pursue the particular business transaction. If he decides not to pursue the business transaction and consents to Charter or its subsidiaries engaging in the business transaction, they will be able to do so. In any such case, the restated certificate of incorporation of Charter and the limited liability company agreement of Charter Holdco would need to be amended accordingly to modify the current restrictions on the ability of such entities to engage in any business other than the cable transmission business. The cable transmission business means the business of transmitting video, audio, including telephony, and data over cable systems owned, operated or managed by Charter, Charter Holdco or any of their subsidiaries from time to time.

      Under Delaware corporate law, each director of Charter, including Mr. Allen, is generally required to present to Charter, any opportunity he or she may have to acquire any cable transmission business or any company whose principal business is the ownership, operation or management of cable transmission businesses, so that we may determine whether we wish to pursue such opportunities. However, Mr. Allen and the other directors generally will not have an obligation to present other types of business opportunities to Charter and they may exploit such opportunities for their own account.

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      Also, conflicts could arise with respect to the allocation of corporate opportunities between us and Mr. Allen and his affiliates in connection with his investments in businesses in which we are permitted to engage under Charter’s restated certificate of incorporation and our limited liability company agreement. Certain of the indentures of Charter and its subsidiaries, including the indenture governing the original notes and the new notes, require the applicable issuer of notes to obtain, under certain circumstances, approval of the board of directors of Charter and, where a transaction is valued at or in excess of $50 million, a fairness opinion with respect to transactions in which Mr. Allen has an interest. See “Description of Notes — Transactions with Affiliates.” We have not instituted any other formal plan or arrangement to address potential conflicts of interest.

      The restrictive provisions of the organizational documents described above may limit our ability to take advantage of attractive business opportunities. Consequently, our ability to offer new products and services outside of the cable transmission business and enter into new businesses could be adversely affected, resulting in an adverse effect on our growth, financial condition and results of operations.

Third Party Business Relationships in which Mr. Allen has an Interest

      As previously noted, Mr. Allen has extensive investments in the areas of media and technology. We have a number of commercial relationships with third parties in which Mr. Allen has an interest. Mr. Allen or his affiliates own equity interests or warrants to purchase equity interests in various entities with which we do business or which provide us with products, services or programming. Mr. Allen owns 100% of the equity of Vulcan Ventures Incorporated and Vulcan Inc. and is the president of Vulcan Ventures. Mr. Savoy serves as a consultant to, and is a former vice president and director of Vulcan Ventures. The various cable, media, Internet and telephony companies in which Mr. Allen has invested may mutually benefit one another. We can give no assurance, nor should you expect, that any of these business relationships will be successful, that we will realize any benefits from these relationships or that we will enter into any business relationships in the future with Mr. Allen’s affiliated companies.

      Mr. Allen and his affiliates have made, and in the future likely will make, numerous investments outside of us and our business. We cannot assure you that, in the event that we or any of our subsidiaries enter into transactions in the future with any affiliate of Mr. Allen, such transactions will be on terms as favorable to us as terms we might have obtained from an unrelated third party.

      In February 2001, Charter entered into certain of the purchase agreements related to the AT&T transactions and in June 2001, it assigned its rights and obligations under these contracts to certain of its subsidiaries which purchased the assets from AT&T. In August 2001, the systems acquired in the Cable USA transaction by Charter and Charter Holdco, were contributed through Charter Holdings to certain of its subsidiaries, which are now our subsidiaries and which own and operate these systems.

High Speed Access

      High Speed Access Corp. has been a provider of high-speed Internet access services over cable modems. During the period from 1997 to 2000, certain Charter Communications entities entered into Internet-access related service agreements, and both Vulcan Ventures, an entity owned by Mr. Allen, and Charter Holdco made equity investments in High Speed Access.

      On February 28, 2002, our subsidiary, CC Systems, purchased from High Speed Access the contracts and associated assets, and assumed related liabilities, that served our customers, including a customer contact center, network operations center and provisioning software. At the closing, certain of our subsidiaries paid $78 million to High Speed Access and delivered 37,000 shares of High Speed Access’s Series D convertible preferred stock and all of the warrants to buy High Speed Access common stock owned by Charter Holdco (which had been acquired pursuant to two network services agreements which

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were cancelled in connection with this transaction, as described below), and High Speed Access purchased 38,000 shares of its Series D Preferred Stock from Vulcan Ventures for $8 million. Additional purchase price adjustments were made as provided in the asset purchase agreement. Charter Holdco obtained a fairness opinion from a qualified investment-banking firm regarding the valuation of the assets purchased. Concurrently with the closing of the transaction, High Speed Access also purchased all of its common stock held by Vulcan Ventures.

      In conjunction with the High Speed Access asset purchase, on February 28, 2002, Charter Communications Holding Company granted High Speed Access the right to use certain intellectual property sold by High Speed Access to Charter Holdco. High Speed Access does not pay any fees under the agreement. The domestic portion of the license terminated on June 30, 2002, and the international portion of the license will expire on February 2, 2005. Prior to closing the asset purchase, Charter performed certain management services formerly performed by High Speed Access, for which it received $4 million in January and February 2002. Concurrently with the asset purchase, all of the other agreements between Charter Holdco and High Speed Access Corp. (other than the license agreement described above), namely the programming content agreement, the services agreement, the systems access agreement, the 1998 network services agreement and the May 2000 network services agreement, were terminated. The revenues we earned from High Speed Access for the year ended December 31, 2002 were approximately $17 million. In addition, for the year ended December 31, 2002, we paid High Speed Access approximately $2 million under the 1998 network services agreement and the 2000 network services agreement, representing a per customer fee to High Speed Access according to agreed pricing terms and compensation for services exceeding certain minimum thresholds.

      Immediately prior to the asset purchase, Vulcan Ventures beneficially owned approximately 37%, and Charter Holdco and its subsidiaries beneficially owned approximately 13%, of the common stock of High Speed Access (including the shares of common stock which could be acquired upon conversion of the Series D preferred stock, and upon exercise of the warrants owned by Charter Holdco). Following the consummation of the asset purchase, neither Charter Holdco, nor Vulcan Ventures beneficially owned any securities of, or were otherwise affiliated with, High Speed Access.

      On May 12, 2000, Charter entered into a five-year network services agreement with High Speed Access, which was assigned by Charter Communications, Inc. to Charter Holdco on August 1, 2000. With respect to each system launched or intended to be launched, we paid a per customer fee to High Speed Access according to agreed pricing terms. In addition, we compensated High Speed Access for services exceeding certain minimum thresholds. For the year ended December 31, 2001, we paid High Speed Access approximately $13 million under this agreement and a 1998 network services agreement.

      In 2001, Charter Holdco was a party to a systems access and investment agreement with Vulcan Ventures and High Speed Access and a related network services agreement with High Speed Access. These agreements provided High Speed Access with exclusive access to certain of our homes passed. The term of the network services agreement was, as to a particular cable system, five years from the date revenue billing commenced for that cable system. The programming content agreement provided each of Vulcan Ventures and High Speed Access with a license to use certain content and materials of the other on a non-exclusive, royalty-free basis. The revenues we earned from High Speed Access for the year ended December 31, 2001 were approximately $8 million.

      Under the above described transactions, we also earned certain warrants to purchase High Speed Access stock. These warrants were cancelled in February 2002 in connection with the asset purchase described above. As a result of the transaction with High Speed Access described above, we neither paid to, nor received, any amounts from High Speed Access in 2003.

TechTV, Inc.

      TechTV, Inc. (“TechTV”) operates a cable television network that offers programming mostly related to technology. Pursuant to an affiliation agreement that originated in 1998 and that terminates in 2008, TechTV has provided us with programming for distribution via our cable systems. The affiliation agreement provides, among other things, that TechTV must offer Charter certain terms and conditions that

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are no less favorable in the affiliation agreement than are given to any other distributor that serves the same number of or fewer TechTV viewing customers. Additionally, pursuant to the affiliation agreement, we are entitled to incentive payments for channel launches through December 31, 2003. For the year ended December 31, 2001, we recorded $9 million from TechTV related to launch incentives as a reduction of programming expense and made no payments to TechTV under the affiliation agreement. For the year ended December 31, 2002, we recorded $4 million from TechTV related to launch incentives as a reduction of programming expense and paid $0.2 million to TechTV under the affiliation agreement. For the year ended December 31, 2003, we recorded approximately $1 million from TechTV related to launch incentives as a reduction of programming expense and paid approximately $80,600 to TechTV in license fees under the affiliation agreement.

      In March 2004, Charter Holdco entered into agreements with Vulcan Programming and TechTV, which provide for (i) Charter Holdco and TechTV to amend the affiliation agreement which, among other things, revises the description of the TechTV network content, provides for Charter Holdco to waive certain claims against TechTV relating to alleged breaches of the affiliation agreement and provides for TechTV to make payment of outstanding launch receivables due to Charter Holdco under the affiliation agreement, (ii) Vulcan Programming to pay approximately $10 million and purchase over a 24-month period, at fair market rates, $2 million of advertising time across various cable networks on Charter cable systems in consideration of the agreements, obligations, releases and waivers under the agreements and in settlement of the aforementioned claims and (iii) TechTV to be a provider of content relating to technology and video gaming for Charter’s interactive television platforms through December 31, 2006 (exclusive for the first year).

      We believe that Vulcan Programming, which is 100% owned by Mr. Allen, owned an approximate 98% equity interest in TechTV as of December 31, 2001, 2002, and 2003. Until September 2003, Mr. Savoy was the president and director of Vulcan Programming and was a director of TechTV. Mr. Wangberg, one of Charter’s directors, was the chairman, chief executive officer and a director of TechTV. Although Mr. Wangberg resigned as the chief executive officer of TechTV in July 2002, he remains a director of TechTV. Mr. Allen is a director of TechTV.

Oxygen Media Corporation

      Oxygen Media LLC (“Oxygen”) provides programming content aimed at the female audience for distribution over cable systems and satellite. On July 22, 2002, Charter Holdco entered into a carriage agreement with Oxygen, whereby Charter Holdco agreed to carry programming content from Oxygen, pursuant to which we currently make Oxygen programming available to approximately 5 million of our customers. The term of the carriage agreement is retroactive to February 1, 2000, the date of launch of Oxygen programming by Charter Holdco and runs for a period of five years from that date. As the number of customers receiving the Oxygen programming increases, Charter Holdco receives volume discounts. For the years ended December 31, 2001 and 2002 and 2003, we paid Oxygen approximately $3 million, $6 million and $9 million, respectively, for programming content.

      In addition, Oxygen pays Charter Holdco marketing support fees for customers launched after the first year of the term of the carriage agreement up to an amount of $4 million. We recorded approximately $2 million and approximately $1 million related to launch incentives as a reduction of programming expense for the years ended December 31, 2002 and December 31, 2003, respectively.

      Concurrently with the execution of the programming agreement, we entered into an equity issuance agreement pursuant to which Oxygen’s parent company, Oxygen Media Corporation (“Oxygen Media”), granted one of our subsidiaries a warrant to purchase 2.4 million shares of common stock of Oxygen Media for an exercise price of $22.00 per share. Charter Holdco will also receive unregistered shares of Oxygen Media common stock with a guaranteed fair market value on the date of issuance of $34 million, on or prior to February 2, 2005, with the exact date to be determined by Oxygen Media. We currently recognize the guaranteed value of the investment over the term of the programming agreement as a reduction of programming expense. For the years ended December 31, 2001, 2002 and 2003, we recorded

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approximately $3 million, $6 million and $9 million, respectively, as a reduction of programming expense. The carrying value of our investment in Oxygen was approximately $10 million and $19 million as of December 31, 2002 and 2003, respectively.

      Mr. William Savoy, a director of Charter, Charter Holdco, and Charter Holdings until his resignation in April 2004, served on the board of directors of Oxygen until September 2003. As of December 31, 2001, 2002 and 2003, through Vulcan Programming, Mr. Allen owned an approximate 31% interest in Oxygen assuming no exercises of outstanding warrants.

      Mr. Marc Nathanson has an indirect beneficial interest of less than 1% in Oxygen.

Portland Trail Blazers and Action Sports Cable Network, Inc.

      On October 7, 1996, the former owner of our Falcon cable systems entered into a letter agreement and a cable television agreement with Trail Blazers Inc. for the cable broadcast in the metropolitan area surrounding Portland, Oregon of pre-season, regular season and playoff basketball games of the Portland Trail Blazers, a National Basketball Association basketball team. Mr. Allen is the 100% owner of the Portland Trail Blazers and Trail Blazers Inc. After the acquisition of the Falcon cable systems in November 1999, we continued to operate under the terms of these agreements until their termination on September 30, 2001. Under the letter agreement, Trail Blazers Inc. was paid a fixed fee for each customer in areas directly served by the Falcon cable systems. Under the cable television agreement, we shared subscription revenues with Trail Blazers Inc. For the years ended December 31, 2001, 2002, and 2003, we paid approximately $1 million, $1 million and $135,200, respectively, in connection with the cable broadcast of Portland Trail Blazers basketball games under the October 1996 cable television agreement.

      On July 1, 2001, Charter Holdco and Action Sports Cable Network, Inc. (“Action Sports”), which is 100% owned by Mr. Allen, entered into a new carriage agreement for a five-year term, which became effective on October 1, 2001 with the expiration of the previous agreement. Under the July 2001 carriage agreement, Charter Holdco pays Action Sports a fixed fee for each customer receiving the Action Sports programming, which covers sporting events in the Pacific Northwest, including the Portland Trail Blazers, the Seattle Seahawks, a National Football League football team, and the Portland Fire, a Women’s National Basketball Association basketball team. On November 5, 2002, Action Sports, which is 100% owned by Mr. Allen, announced that it was discontinuing its business following its failure to obtain an acceptable carriage agreement with AT&T Cable, the cable television provider in Portland, Oregon. Action Sports service was terminated on November 5, 2002 and Charter Holdco ceased carriage of the service. For the years ended December 31, 2001, 2002 and 2003, we paid Action Sports approximately $0.4 million, $1 million and $0, respectively, for rights to carry its programming. We believe that the failure of this network will not materially affect our business or results of operations.

Click2learn, Inc.

      Charter Holdco executed a Software License Agreement with Click2learn, Inc. (“Click2learn”) effective June 30, 2002. Since October 1999, Charter Holdco has purchased professional services, software and maintenance from Click2learn, a company which provides enterprise software for organizations seeking to capture, manage and disseminate knowledge throughout their extended enterprise Mr. Allen is the founder of Click2learn. As of December 31, 2003, Mr. Allen owned an approximate 21% interest in Click2learn through 616,120 shares held of record by Vulcan Ventures and 387,096 shares issuable upon exercise of a warrant issued to Vulcan Ventures. Mr. Allen owns 100% of Vulcan Ventures. For the years ended December 31, 2002 and 2003, we paid approximately $250,000 and $57,100, respectively, to Click2learn.

Digeo, Inc.

      On March 2, 2001, a subsidiary of Charter, Charter Communications Ventures, LLC (“Charter Ventures”) entered into a broadband carriage agreement with Digeo Interactive, LLC (“Digeo Interactive”), a wholly owned subsidiary of Digeo, Inc., (“Digeo”), an entity controlled by Paul Allen.

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The carriage agreement provided that Digeo Interactive would provide to Charter a “portal” product, which would function as the television-based Internet portal (the initial point of entry to the Internet) for Charter’s customers who received Internet access from Charter. The agreement term was for 25 years and Charter agreed to use the Digeo portal exclusively for six years. Before the portal product was delivered to Charter, Digeo terminated development of the portal product.

      On September 27, 2001, Charter and Digeo Interactive amended the broadband carriage agreement. According to the amendment, Digeo Interactive would provide to Charter the content for enhanced “Wink” interactive television services, known as Charter Interactive Channels (“i-channels”). In order to provide the i-channels, Digeo Interactive sublicensed certain Wink technologies to Charter. Charter is entitled to share in the revenues generated by the i-channels. Currently, our digital video customers who receive i-channels receive the service at no additional charge.

      On September 28, 2002, Charter entered into a second amendment to its broadband carriage agreement with Digeo Interactive. This amendment supersedes the amendment of September 27, 2001. It provides for the development by Digeo Interactive of future features to be included in the Basic i-TV service provided by Digeo and for Digeo’s development of an interactive “toolkit” to enable Charter to develop interactive local content. Furthermore, Charter may request that Digeo Interactive manage local content for a fee. The amendment provides for Charter to pay for development of the Basic i-TV service as well as license fees for customers who receive the service, and for Charter and Digeo to split certain revenues earned from the service. In 2003, we paid Digeo Interactive approximately $4 million for customized development of the i-channels and the local content tool kit. We received no revenues under the broadband carriage agreement in 2003. This amendment expired pursuant to its terms on December 31, 2003. Digeo Interactive is continuing to provide the Basic i-TV Service on a month-to-month basis.

      In April 2004, we launched DVR service in our Rochester, Minnesota market using a broadband media center that is an integrated set-top terminal with a cable converter, DVR hard drive and connectivity to other consumer electronics devices (such as stereos, MP3 players, and digital cameras). On June 30, 2003, Charter Holdco entered into an agreement with Motorola for the purchase of 100,000 of these broadband media centers. The software for the set-top terminals is being supplied by Digeo Interactive under a license agreement entered into in April 2004. Under the license agreement, Digeo granted to Charter Holdco the right to use Digeo’s proprietary software for the number of DVR units that Charter deploys from a maximum of 10 headends through year-end 2004. The license granted for each unit deployed under the agreement is valid for five years. In addition, Charter will pay certain other fees, including a per-headend license fee and maintenance fees. Total license and maintenance fees during the term of the agreement are expected to be approximately $3.2 million. The agreement provides that Charter is entitled to receive contract terms, considered on the whole, and license fees, considered apart from other contract terms, no less favorable than those accorded to any other Digeo customer.

      In May 2004, Charter Holdco entered into a binding term sheet with Digeo Interactive for the purchase of 70,000 Digeo PowerKey DVR units. The term sheet provides that the parties will proceed in good faith to negotiate prior to year-end 2004 definitive agreements for the purchase of the DVR units and that the parties will enter into a license agreement for Digeo’s proprietary software on terms substantially similar to the terms of the license agreement described above. Total purchase price and license and maintenance fees during the term of the definitive agreements are expected to be approximately $40.3 million. The term sheet and any definitive agreements will be terminable at no penalty to Charter in certain circumstances.

      In March 2001, Charter Ventures and Vulcan Ventures Incorporated formed DBroadband Holdings, LLC for the sole purpose of purchasing equity interests in Digeo. In connection with the execution of the broadband carriage agreement, DBroadband Holdings, LLC purchased an equity interest in Digeo funded

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by contributions from Vulcan Ventures Incorporated. The equity interest is subject to a priority return of capital to Vulcan Ventures up to the amount contributed by Vulcan Ventures on Charter Ventures’ behalf. Charter Ventures has a 100% profit interest in DBroadband Holdings, LLC. Vulcan Ventures also agreed to make, through January 24, 2004, certain additional contributions through DBroadband Holdings, LLC to acquire additional equity in Digeo as necessary to maintain Charter Ventures’ pro rata interest in Digeo in the event of certain future Digeo equity financings by the founders of Digeo. These additional equity interests are also subject to a priority return of capital to Vulcan Ventures up to amounts contributed by Vulcan Ventures on Charter Ventures’ behalf. DBroadband Holdings, LLC is therefore not included in our consolidated financial statements. Pursuant to an amended version of this arrangement, in 2003, Vulcan Ventures contributed a total of $29 million to Digeo, $7 million of which was contributed on Charter Ventures’ behalf, subject to Vulcan Ventures’ aforementioned priority return. Since the formation of DBroadband Holdings, LLC, Vulcan Ventures has contributed approximately $224 million to Digeo, of which approximately $56 million was contributed on Charter Ventures’ behalf.

      We believe that Vulcan Ventures, an entity controlled by Mr. Allen, owns an approximate 60% equity interest in Digeo, Inc. Messrs. Allen and Vogel are directors of Digeo. Mr. Savoy was a director and served on the compensation committee of Digeo until September 2003. Mr. Vogel owns options to purchase 10,000 shares of Digeo common stock.

Other Miscellaneous Relationships

ADC Telecommunications Inc.

      Charter and Charter Holdco purchase certain equipment for use in our business from ADC Telecommunications, which provides broadband access and network equipment. Mr. Wangberg serves as a director for ADC Telecommunications. For the years ended December 31, 2002 and December 31, 2003, we paid $759,600 and $60,100, respectively, to ADC Telecommunications under this arrangement.

HDNet and HDNet Movies Network

      On January 10, 2003, Charter Holdco signed an agreement to carry two around-the-clock, high-definition networks, HDNet and HDNet Movies. HDNet Movies delivers a commercial-free schedule of full-length feature films converted from 35mm to high-definition, including titles from an extensive library of Warner Bros. Films. HDNet Movies will feature a mix of theatrical releases, made-for-TV movies, independent films and shorts. The HDNet channel features a variety of HDTV programming, including live sports, sitcoms, dramas, action series, documentaries, travel programs, music concerts and shows, special events, and news features including the popular HDNet World Report. HDNet also offers a selection of classic and recent television series. We paid HDNet and HDNet Movies approximately $21,900 in 2003. We believe that entities controlled by Mark Cuban owned approximately 85% of HDNet as of December 31, 2003. As of December 31, 2003, Mr. Cuban, co-founder and president of HDNet, owned approximately 6.4% of the outstanding Class A common stock of Charter.

Affiliate Leases and Agreements

      David L. McCall, who served as Senior Vice President — Operations — Eastern Division during 2002 and through January 2003, is a partner in a partnership that leases office space to us under a lease agreement, which expires December 31, 2010. The partnership received approximately $117,600 pursuant to such lease and related agreements for the years ended December 31, 2001 and 2002, and $189,200 for the year ended December 31, 2003. In addition, during 2001, 2002 and 2003, we paid approximately $571,600, $644,800 and $381,300, respectively, for construction services to a construction company controlled by Mr. McCall’s brother under a construction agreement, which expired on December 31, 2003. We also paid approximately $462,100, $3 million and $373,800 during 2001, 2002 and 2003, respectively, for construction services to a construction company controlled by Mr. McCall’s son under several agreements, the last of which expired January 31, 2004.

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      Companies controlled by Mr. Nathanson, a director of Charter, leased certain office space in Pasadena, California, and warehouse space in Riverside, California, to our subsidiaries. For the Pasadena office lease, which Charter terminated in April 2001 in exchange for a payment of $638,600, total rent of approximately $204,000 was paid from January 1, 2001 to April 2001. For the years ended December 31, 2001, 2002, and 2003, total rent paid for the Riverside warehouse space was approximately $127,000, $76,000 and $16,600, respectively, under a lease agreement, which expired March 15, 2003.

  Charter Airplane

      Howard L. Wood resigned as a director of Charter in December 2001. In 2001, the benefit to a company controlled by Mr. Wood that owned an airplane for the full annual cost of two individuals qualified to operate the plane, who were otherwise available to Charter in connection with its own flight operations, was approximately $118,500 for annual compensation to the pilots. Charter was entitled to reimbursement for these amounts. In addition, Mr. Wood also used Charter’s airplane for occasional personal use in 2001, a benefit valued at $12,500 for the year ended December 31, 2001.

  Promissory Note

      Additionally, in 1999, one of Mr. Wood’s daughters who resigned as a Vice President of Charter Holdco in February 2002, received a bonus in the form of a three-year promissory note bearing interest at 7% per year. One-third of the original outstanding principal amount of the note and interest were forgiven as long as she remained employed by Charter Holdco at the end of each of the first three anniversaries of the issue date in February 1999. The amount of principal and interest forgiven on this note for the year ended December 31, 2001, was $85,500, and the outstanding balance on the note was forgiven effective as of February 22, 2002. Another daughter of Mr. Wood received approximately $70,210 during the year ended December 31, 2001 for event planning services performed by her company.

  Travel Services

      Jerald L. Kent resigned as President, Chief Executive Officer and a Director of Charter in September 2001. In 2001 a travel agency owned and operated by Mr. Kent’s mother-in-law received approximately $132,000 during the year ended 2001 for travel arrangements made for Charter by her company.

  Replay TV Joint Venture

      Charter Communications Ventures was party to a joint venture with General Instrument Corporation (doing business as Broadband Communications Sector of Motorola, Inc.), Replay TV Inc. and Interval Research Corporation, an entity controlled by Mr. Allen, to develop and integrate digital video recording capabilities in advanced digital set-top terminals. The joint venture focused on creating a set-up based digital recording platform designed for storing video, audio and Internet content. Prior to the dissolution of the joint venture in 2001, Charter Communications Ventures received management fees of $1 million for the year ended December 31, 2001, which is included in other revenues in the accompanying consolidated statement of operations.

Purchase of Certain Enstar Limited Partnership Systems; Management Fees

      In April 2002, Interlink Communications Partners, LLC, Rifkin Acquisition Partners, LLC and Charter Communications Entertainment I, LLC, each an indirect, wholly owned subsidiary of ours, completed the cash purchase of certain assets of Enstar Income Program II-2, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar Income Program IV-1, L.P., Enstar Income Program IV-2, L.P., and Enstar Income Program IV-3, L.P., serving in the aggregate approximately 21,600 customers, for a total cash sale price of approximately $48 million. In September 2002, Charter Communications Entertainment I, LLC purchased all of Enstar Income Program II-1, L.P.’s Illinois cable television systems, serving approximately 6,400 customers, for a cash sale price of $15 million. Enstar Communications Corporation, a direct subsidiary of Charter Holdco is a general partner of the Enstar limited partnerships but does not

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exercise control over them. The purchase prices were allocated to assets acquired based on fair values, including $44 million assigned to franchises.

      In addition, Enstar Cable Corporation, the manager of the Enstar limited partnerships through a management agreement, engaged Charter Holdco to manage the Enstar limited partnerships. Pursuant to the management agreement, Charter Holdco provides management services to the Enstar limited partnerships in exchange for management fees. The Enstar limited partnerships also purchase basic and premium programming for their systems at cost from Charter Holdco. For the years ended December 31, 2001, 2002, and 2003, Charter Holdco earned approximately $2 million, $1 million and $469,300, respectively, by providing management services to the Enstar limited partnerships.

      All of the executive officers of Charter (with the exception of Mr. Allen), Charter Holdco and Charter Holdings act as officers of Enstar Communications Corporation.

Indemnification Advances

      Pursuant to Charter’s bylaws (and the employment agreements of certain of our current and former officers), Charter is obligated (subject to certain limitations) to indemnify and hold harmless, to the fullest extent permitted by law, any officer, director or employee against all expense, liability and loss (including, among other things, attorneys’ fees) reasonably incurred or suffered by such officer, director or employee as a result of the fact that he or she is a party or is threatened to be made a party or is otherwise involved in any action, suit or proceeding by reason of the fact that he or she is or was a director, officer or employee of Charter. In addition, Charter is obligated to pay, as an advancement of its indemnification obligation, the expenses (including attorneys’ fees) incurred by any officer, director or employee in defending any such action, suit or proceeding in advance of its final disposition, subject to an obligation to repay those amounts under certain circumstances. Pursuant to these indemnification arrangements and as an advancement of costs, Charter has reimbursed certain of its current and former directors and executive officers a total of approximately $3 million and $8 million in respect of invoices received in 2002 and 2003 respectively, in connection with their defense of certain legal actions described herein “Business — Legal Proceedings.” Those current and former directors and officers include: Paul G. Allen, David C. Andersen, David G. Barford, Mary Pat Blake, J. Christian Fenger, Kent D. Kalkwarf, Ralph G. Kelly, Jerald L. Kent, Paul E. Martin, David C. McCall, Ronald L. Nelson, Nancy B. Peretsman, John C Pietri, William D. Savoy, Steven A. Schumm, Curtis S. Shaw, William J. Shreffler, Stephen E. Silva, James Trey Smith and Carl E. Vogel. These amounts have been submitted to Charter’s director and officer insurance carrier for reimbursement. The carrier has raised various objections to portions of these amounts, and, Charter is in negotiations with the carrier regarding their reimbursement.

Intercompany Loans

      From time to time, there are intercompany borrowings and repayments between or among Charter and its subsidiaries and between or among its subsidiaries. For amounts borrowed, our practice is for the borrowing party to pay interest to the lending party based on the borrower’s cost of funds on its revolving credit facility, which is based on a spread over LIBOR. On occasion, indebtedness between companies has been forgiven in lieu of a contribution to capital. The average month-end outstanding principal balance of indebtedness to Charter Holdco from us during the years ended December 31, 2001, 2002, 2003 was $74 million, $92 million and $46 million, respectively. The total interest paid to Charter Holdco by us for indebtedness was approximately $4 million, $4 million and $2 million for the years ended December 31, 2001, 2002, 2003, respectively, and accrued interest on such debt at December 31, 2001, 2002 and 2003 was approximately $3 million, $4 million and $2 million, respectively.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

      The following description of indebtedness is qualified in its entirety by reference to the relevant credit facilities, indentures and related documents governing such indebtedness.

Description of Our Outstanding Debt

      As of December 31, 2003 and 2002, our total debt was approximately $9.6 billion and $8.1 billion, respectively, and on the pro forma basis described in “Unaudited Pro Forma Financial Statements,” our long-term debt outstanding would have been approximately $9.0 billion, as summarized below (dollars in millions):

		Actual
		December 31,				Pro Forma
		2003(a)				December 31, 2003				December 31, 2002
		Face		Accreted		Face		Accreted		Face		Accreted
		Value		Value(a)		Value		Value		Value		Value(a)
Long-Term Debt(b)
CCH II:
	10.250% senior notes due 2010	$	1,601	$	1,601	$	1,601	$	1,601	$	—	$	—
CCO Holdings:
	8.750% senior notes due 2013		500		500		500		500		—		—
Charter Operating:
	8% senior second lien notes due 2012		—		—		1,100		1,100		—		—
	8 3/8% senior second lien notes due 2014		—		—		400		400		—		—
Renaissance:
	10.000% senior discount notes due 2008		114		116		114		116		114		113
CC V Holdings:
	11.875% senior discount notes due 2008		113		113		113		113		180		163
Other long-term debt			—		—						1		1
Credit Facilities
Charter Operating			4,459		4,459		5,124		5,124		4,542		4,542
CC VI			868		868		—		—		926		926
Falcon Cable			856		856		—		—		1,155		1,155
CC VIII Operating			1,044		1,044		—		—		1,166		1,166
		$	9,555	$	9,557	$	8,952	$	8,954	$	8,084	$	8,066

(a)	The accreted value presented above represents the face value of the notes plus or minus the original issue premium or discount (as applicable) at the time of sale plus the accretion to the balance sheet date.
(b)	Long term debt does not include $37 million owed to parent companies at December 31, 2003.

      In general, the obligors have the right to redeem all of the notes set forth in the above tables in whole or part at their option, beginning at various times prior to their stated maturity dates, subject to certain conditions, upon the payment of the outstanding principal amount (plus a specified redemption premium) and all accrued and unpaid interest. While we are required to redeem the CC V Holdings notes under the circumstances described in “Description of Certain Indebtedness — Existing Notes — CC V Holdings Notes and Charter Operating Notes,” we have no requirement to redeem any of the other notes described above prior to their stated maturity dates. For additional information, see Note 9 to our consolidated financial statements as of December 31, 2003 and 2002 and for each of the three years in the period ended December 31, 2003 included elsewhere in this prospectus.

      As of December 31, 2003 and 2002, long-term debt totaled approximately $9.6 billion and $8.1 billion, respectively. This debt was comprised of approximately $7.2 billion and $7.8 billion of debt under our

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subsidiaries’ credit facilities, and $2.3 billion and $277 million of high-yield notes at December 31, 2003 and 2002, respectively. In addition, amounts owed to parent companies totaled approximately $37 million and $133 million as of December 31, 2003 and 2002, respectively.

      As of December 31, 2003 and 2002, the weighted average interest rate on our subsidiaries’ credit facilities was approximately 5.4% for both years and the weighted average interest rate on the high-yield debt was approximately 10.0% and 11.1%, respectively, resulting in a blended weighted average interest rate of 6.5% and 5.6%, respectively. The interest rate on approximately 60% and 51% of the total principal amount of our debt was effectively fixed, including the effects of our interest rate hedge agreements as of December 31, 2003 and 2002, respectively. The fair value of our subsidiaries’ credit facilities was approximately $6.9 billion and approximately $6.4 billion at December 31, 2003 and 2002, respectively. The fair value of our high-yield debt was $2.4 billion and $212 million at December 31, 2003 and 2002, respectively. The fair value of high-yield debt is based on quoted market prices, and the fair value of the credit facilities is based on dealer quotations.

      The following description is merely a summary of certain material provisions of the amended and restated Charter Operating credit facilities and the public notes of our subsidiaries (collectively, the “Debt Agreements”). The summary does not restate the terms of the Debt Agreements in their entirety, nor does it describe all terms of the Debt Agreements. The agreements and instruments governing each of the Debt Agreements are complicated and you should consult such agreements and instruments for more detailed information regarding the Debt Agreements.

Credit Facilities

Amended and Restated Charter Operating Credit Facilities — General

      The Charter Operating credit facilities were amended and restated concurrently with the sale of $1.5 billion senior second lien notes in April 2004, among other things, to defer maturities and increase availability under these facilities and to enable Charter Operating to acquire the interests of the lenders under the CC VI Operating, CC VIII Operating and Falcon credit facilities.

The amended and restated Charter Operating credit facilities:

•  increase the availability thereunder from $5.1 billion to $6.5 billion; and

•  provide for two term facilities:

      (i) a Term A facility with a total principal amount of $2.0 billion, of which 12.5% matures in 2007, 30% matures in 2008, 37.5% matures in 2009 and 20% matures in 2010; and

      (ii) a Term B facility with a total principal amount of $3.0 billion, which shall be repayable in 27 equal quarterly installments aggregating in each loan year to 1% of the original amount of the Term B facility, with the remaining balance due at final maturity in 2011; and

•  provide for a revolving credit facility, in a total amount of $1.5 billion, with a maturity date in 2010.

      Amounts under the amended and restated Charter Operating credit facilities bear interest, at Charter Operating’s election, at a base rate or the Eurodollar rate, as defined, plus a margin for Eurodollar loans of up to 3.00% for the Term A facility and revolving credit facility, and up to 3.25% for the Term B facility, and for base rate loans of up to 2.00% for the Term A facility and revolving credit facility, and up to 2.25% for the Term B facility. A quarterly commitment fee of up to .75% is payable on the average daily unborrowed balance of the revolving credit facilities.

      Obligations arising under the original $5.1 billion commitment amount (the “Original Obligations”) continue to be guaranteed by CCO Holdings and by Charter Operating’s domestic subsidiaries, other than the non-guarantor subsidiaries (defined below), existing subsidiaries of Charter Operating precluded from so guaranteeing by reason of the provisions of other indebtedness to which they are subject and immaterial subsidiaries. The “non-guarantor subsidiaries,” include CCO NR Holdings, LLC, and subsidiaries contributed to CCO NR Holdings, LLC by Charter Holdings in the organizational restructuring that

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occurred in June of 2003, including CC VI Operating, CC VIII Operating and Falcon and their respective subsidiaries. The Original Obligations continue to be secured by a pledge of the equity interests owned by the subsidiary guarantors, as well as a pledge of CCO Holdings’ equity interests in Charter Operating and its subsidiaries, and intercompany obligations owing to CCO Holdings by Charter Operating and its subsidiaries, and intercompany obligations owing to the subsidiary guarantors. Obligations arising under the amended commitment amount of $6.5 billion (the “Amended Obligations”) are secured by a lien on all assets of Charter Operating, to the extent such lien can be perfected under the Uniform Commercial Code by filing a financing statement, which assets include capital stock owned by Charter Operating and intercompany obligations owing to it from its subsidiaries, CC VI Operating, CC VIII Operating and Falcon.

      At such time as the Charter Holdings Leverage Ratio, as defined in the indentures governing the Charter Holdings senior notes and senior discount notes and as certified by an officer of Charter Holdings, is below 8.75 to 1.0: (i) the guarantors’ guarantees will be amended to increase the amount guaranteed to include all of the Amended Obligations; (ii) most of the non-guarantor subsidiaries will become additional subsidiary guarantors of the Amended Obligations; and (iii) the guarantees of the Amended Obligations will be secured by a lien on all assets of the subsidiary guarantors (including the additional subsidiary guarantors), to the extent such lien can be perfected under the Uniform Commercial Code by filing a financing statement; provided that the guarantee and pledge of such interests by CC V Holdings, LLC and its subsidiaries will not occur until the notes issued by CC V Holdings, LLC are redeemed. The CC V Holdings notes are required to be redeemed within 45 days after the Charter Holdings leverage ratio is below 8.75 to 1.0, provided that such ratio remains below such leverage ratio for the entire 45 day period.

Amended and Restated Charter Operating Credit Facilities — Restrictive Covenants

      The Charter Operating credit facilities contain representations and warranties, and affirmative and negative covenants customary for financings of this type. The financial covenants measure performance against standards set for leverage, debt service coverage, and interest coverage, tested as of the end of each quarter. The maximum allowable leverage ratio is 4.25 to 1.0 until maturity, tested as of the end of each quarter beginning June 30, 2004. Additionally, the Charter Operating credit facilities contain provisions requiring mandatory loan prepayments under specific circumstances, including when significant amounts of assets are sold and the proceeds are not reinvested in assets useful in the business of the borrower within a specified period, and upon the incurrence of certain indebtedness when the ratio of senior first lien debt to operating cash flow is greater than 2.0 to 1.0.

      The Charter Operating credit facilities permit Charter Operating and its subsidiaries to make distributions to pay interest on the Charter Operating senior second lien notes, the CCH II senior notes, the CCO Holdings senior notes, the Charter convertible senior notes and the Charter Holdings senior notes, provided that, among other things, no default has occurred and is continuing under the amended and restated Charter Operating credit facilities. Conditions to future borrowings include absence of a default or an event of default under the amended and restated Charter Operating credit facilities and the continued accuracy in all material respects of the representations and warranties, including the absence since December 31, 2003 of any event, development or circumstance that has had or could reasonably be expected to have a material adverse effect on our business.

      The events of default under the Charter Operating credit facilities include, among other things:

      (i) the failure to make payments when due or within the applicable grace period,

      (ii) the failure to comply with specified covenants,

      (iii) the failure to pay or the occurrence of events that cause or permit the acceleration of other indebtedness owing by CCO Holdings, Charter Operating or Charter Operating’s subsidiaries in amounts in excess of $50 million in aggregate principal amount,

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      (iv) the failure to pay or the occurrence of events that result in the acceleration of other indebtedness owing by certain of CCO Holdings’ direct and indirect parent companies in amounts in excess of $200 million in aggregate principal amount,

      (v) Paul Allen and/or certain of his family members and/or their exclusively owned entities (collectively, the “Paul Allen Group”) ceasing to have the power, directly or indirectly, to vote at least 35% of the ordinary voting power of Charter Operating,

      (vi) the consummation of any transaction resulting in any person or group (other than the Paul Allen Group) having power, directly or indirectly, to vote more than 35% of the ordinary voting power of Charter Operating, unless the Paul Allen Group holds a greater share of ordinary voting power of Charter Operating,

      (vii) certain of Charter Operating’s indirect or direct parent companies having indebtedness in excess of $500 million aggregate principal amount which remains undefeased three months prior to the final maturity of such indebtedness, and

      (viii) Charter Operating ceasing to be a wholly-owned direct subsidiary of CCO Holdings, except in certain very limited circumstances. 

Existing Notes

Original Notes

      In September 2003, we issued an aggregate of approximately $1.6 billion principal amount of 10.25% senior notes due 2010. For additional information about these notes see “Description of Notes.”

CCO Holdings Notes

      In November 2003, CCO Holdings and CCO Holdings Capital Corp. jointly issued $500 million total principal amount of 8 3/4% senior notes due 2013. The CCO Holdings notes are general unsecured obligations of CCO Holdings and CCO Holdings Capital Corp. They rank equally with all other current or future unsubordinated obligations of CCO Holdings and CCO Holdings Capital Corp. The CCO Holdings notes are structurally subordinated to all obligations of subsidiaries of CCO Holdings, including the Renaissance notes, the CC V Holdings notes, the Charter Operating senior second lien notes and the amended and restated Charter Operating credit facilities.

      Interest on the CCO Holdings senior notes accrues at 8 3/4% per year, from November 10, 2003 or, if interest already has been paid, from the date it was most recently paid. Interest is payable semi-annually in arrears on each May 15 and November 15, commencing on May 15, 2004.

      At any time prior to November 15, 2006, the issuers of the CCO Holdings senior notes may redeem up to 35% of the total principal amount of the CCO Holdings senior notes to the extent of public equity proceeds they have received on a pro rata basis at a redemption price equal to 108.75% of the principal amount of CCO Holdings senior notes redeemed, plus any accrued and unpaid interest.

      On or after November 15, 2008, the issuers of the CCO Holdings notes may redeem all or a part of the notes at a redemption price that declines ratably from the initial redemption price of 104.375% to a redemption price on or after November 15, 2011 of 100.0% of the principal amount of the CCO Holdings senior notes redeemed, plus, in each case, any accrued and unpaid interest.

      In the event of specified change of control events, CCO Holdings senior must offer to purchase the outstanding CCO Holdings senior notes from the holders at a purchase price equal to 101% of the total principal amount of the notes, plus any accrued and unpaid interest.

      The indenture governing the CCO Holdings senior notes contains restrictive covenants that limit certain transactions or activities by CCO Holdings and its restricted subsidiaries, including the covenants summarized below. As of the issue date, all but two of CCO Holdings’ direct and indirect subsidiaries were restricted subsidiaries.

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      The covenant in the indenture governing the CCO Holdings senior notes that restricts incurrence of debt and issuance of preferred stock permits CCO Holdings and its subsidiaries to incur or issue specified amounts of debt or preferred stock, if, after giving pro forma effect to the incurrence or issuance, CCO Holdings could meet a leverage ratio (ratio of consolidated debt to four times EBITDA, as defined, from the most recent fiscal quarter for which internal financial reports are available) of 4.5 to 1.0.

      In addition, regardless of whether the leverage ratio could be met, so long as no default exists or would result from the incurrence or issuance, CCO Holdings and its restricted subsidiaries are permitted to incur or issue:

•  up to $9.75 billion of debt under credit facilities, including debt under credit facilities outstanding on the issue date of the CCO Holdings senior notes;

•  up to $75 million of debt incurred to finance the purchase or capital lease of new assets;

•  up to $300 million of additional debt for any purpose; and

•  other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt, and interest rate swaps to provide protection against fluctuation in interest rates.

      The restricted subsidiaries of CCO Holdings are generally not permitted to issue debt securities contractually subordinated to other debt of the issuing subsidiary or preferred stock, in either case in any public or Rule 144A offering.

      The CCO Holdings indenture permits CCO Holdings and its restricted subsidiaries to incur debt under one category, and later reclassify that debt into another category. The amended and restated Charter Operating credit facilities generally impose more restrictive limitations on incurring new debt than CCO Holdings’ indenture, so our subsidiaries that are subject to credit facilities are not permitted to utilize the full debt incurrence that would otherwise be available under the CCO Holdings indenture covenants.

      Generally, under CCO Holdings’ indenture:

•  CCO Holdings and its restricted subsidiaries are permitted to pay dividends on equity interests, repurchase interests, or make other specified restricted payments only if CCO Holdings can incur $1.00 of new debt under the leverage ratio test, which requires that CCO Holdings meet a 4.5 to 1.0 leverage ratio after giving effect to the transaction, and if no default exists or would exist as a consequence of such incurrence. If those conditions are met, restricted payments are permitted in a total amount of up to 100% of CCO Holdings’ consolidated EBITDA, as defined, minus 1.3 times its consolidated interest expense, plus 100% of new cash and appraised non-cash equity proceeds received by CCO Holdings and not allocated to the debt incurrence covenant, all cumulatively from the fiscal quarter commenced on October 1, 2003, plus $100 million.

      In addition, CCO Holdings may make distributions or restricted payments, so long as no default exists or would be caused by the transaction:

•  to repurchase management equity interests in amounts not to exceed $10 million per fiscal year;

•  to pay, regardless of the existence of any default, pass-through tax liabilities in respect of ownership of equity interests in Charter Holdings or its restricted subsidiaries;

•  to pay, regardless of the existence of any default, interest when due on Charter Holdings notes and our notes;

•  to pay, so long as there is no default, interest on the Charter convertible notes;

•  to purchase, redeem or refinance Charter Holdings notes, our notes, Charter notes, and other direct or indirect parent company notes, so long as CCO Holdings could incur $1.00 of indebtedness under the 4.5 to 1.0 leverage ratio test referred to above and there is no default; or

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•  to make other specified restricted payments including merger fees up to 1.25% of the transaction value, repurchases using concurrent new issuances, and certain dividends on existing subsidiary preferred equity interests.

      The indenture governing the CCO Holdings senior notes restricts CCO Holdings and its restricted subsidiaries from making investments, except specified permitted investments, or creating new unrestricted subsidiaries, if there is a default under the indenture or if CCO Holdings could not incur $1.00 of new debt under the 4.5 to 1.0 leverage ratio test described above after giving effect to the transaction.

      Permitted investments include:

•  investments by CCO Holdings and its restricted subsidiaries in CCO Holdings and in other restricted subsidiaries, or entities that become restricted subsidiaries as a result of the investment,

•  investments aggregating up to 100% of new cash equity proceeds received by CCO Holdings since November 10, 2003 to the extent the proceeds have not been allocated to the restricted payments covenant described above,

•  other investments up to $750 million outstanding at any time, and

•  certain specified additional investments, such as investments in customers and suppliers in the ordinary course of business and investments received in connection with permitted asset sales.

      CCO Holdings is not permitted to grant liens on its assets other than specified permitted liens. Permitted liens include liens securing debt and other obligations incurred under our subsidiaries’ credit facilities, liens securing the purchase price of new assets, liens up to $50 million and liens incurred in the ordinary course of business. The lien covenant does not restrict liens on assets of subsidiaries of CCO Holdings.

      CCO Holdings and CCO Holdings Capital, its co-issuer, are generally not permitted to sell all or substantially all of their assets or merge with or into other companies unless their leverage ratio after any such transaction would be no greater than their leverage ratio immediately prior to the transaction, or unless CCO Holdings and its subsidiaries could incur $1.00 of new debt under the 4.50 to 1.0 leverage ratio test described above after giving effect to the transaction, no default exists, and the surviving entity is a U.S. entity that assumes the CCO Holdings senior notes.

      CCO Holdings and its restricted subsidiaries may generally not otherwise sell assets or, in the case of restricted subsidiaries, issue equity interests, unless they receive consideration at least equal to the fair market value of the assets or equity interests, consisting of at least 75% in cash, assumption of liabilities, securities converted into cash within 60 days or productive assets. CCO Holdings and its restricted subsidiaries are then required within 365 days after any asset sale either to commit to use the net cash proceeds over a specified threshold to acquire assets, including current assets, used or useful in their businesses or use the net cash proceeds to repay debt, or to offer to repurchase the CCO Holdings senior notes with any remaining proceeds.

      CCO Holdings and its restricted subsidiaries may generally not engage in sale and leaseback transactions unless, at the time of the transaction, CCO Holdings could have incurred secured indebtedness in an amount equal to the present value of the net rental payments to be made under the lease, and the sale of the assets and application of proceeds is permitted by the covenant restricting asset sales.

      CCO Holdings’ restricted subsidiaries may generally not enter into restrictions on their ability to make dividends or distributions or transfer assets to CCO Holdings on terms that are materially more restrictive than those governing their debt, lien, asset sale, lease and similar agreements existing when they entered into the indenture, unless those restrictions are on customary terms that will not materially impair CCO Holdings’ ability to repay the high-yield notes.

      The restricted subsidiaries of CCO Holdings are generally not permitted to guarantee or pledge assets to secure debt of CCO Holdings, unless the guarantying subsidiary issues a guarantee of the notes of

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comparable priority and tenor, and waives any rights of reimbursement, indemnity or subrogation arising from the guarantee transaction for at least one year.

      The indenture also restricts the ability of CCO Holdings and its restricted subsidiaries to enter into certain transactions with affiliates involving consideration in excess of $15 million without a determination by the board of directors that the transaction is on terms no less favorable than arms-length, or transactions with affiliates involving over $50 million without receiving an independent opinion as to the fairness of the transaction to the holders of the CCO Holdings notes.

     Charter Operating Notes

      On April 27, 2004, Charter Operating and Charter Communications Operating Capital Corp. jointly issued $1.1 billion of 8% senior second lien notes due 2012 and $400 million of 8 3/8% senior second lien notes due 2014, for total gross proceeds of $1.5 billion.

      The Charter Operating notes were sold in a private transaction that was not subject to the registration requirements of the Securities Act of 1933. The Charter Operating notes are not expected to have the benefit of any exchange or other registration rights, except in specified limited circumstances.

      On the issue date of the Charter Operating notes, because of restrictions contained in the Charter Holdings indentures, there were no Charter Operating note guarantees, even though Charter Operating’s immediate parent, CCO Holdings, and certain of our subsidiaries were obligors and/or guarantors under the amended and restated Charter Operating credit facilities. Upon the occurrence of the guarantee and pledge date (generally, the fifth business day after the Charter Holdings leverage ratio is certified to be below 8.75 to 1.0), CCO Holdings and those subsidiaries of Charter Operating that are then guarantors of, or otherwise obligors with respect to, indebtedness under the amended and restated Charter Operating credit facilities and related obligations will be required to guarantee the Charter Operating notes. The note guarantee of each such guarantor will be:

•  a senior obligation of such guarantor;

•  structurally senior to the outstanding senior notes of CCO Holdings and CCO Holdings Capital Corp. (except in the case of CCO Holdings’ note guarantee, which is structurally equivalent with such senior notes), the outstanding senior notes of CCH II and CCH II Capital Corp., the outstanding senior notes and senior discount notes of Charter Holdings and the outstanding convertible senior notes of Charter (but subject to provisions in the Charter Operating indenture that permit interest and, subject to meeting the 4.25 to 1.0 leverage ratio test, principal payments to be made thereon); and

•  senior in right of payment to any future subordinated indebtedness of such guarantor.

      All the subsidiaries of Charter Operating (except CCO NR Sub, LLC, and certain other subsidiaries that are not deemed material and are designated as nonrecourse subsidiaries under the amended and restated Charter Operating credit facilities) are restricted subsidiaries of Charter Operating under the Charter Operating notes. Unrestricted subsidiaries generally will not be subject to the restrictive covenants in the Charter Operating indenture.

      In the event of specified change of control events, Charter Operating must offer to purchase the Charter Operating notes at a purchase price equal to 101% of the total principal amount of the Charter Operating notes repurchased plus any accrued and unpaid interest thereon.

      The limitations on incurrence of debt contained in the indenture governing the Charter Operating notes permit Charter Operating and its restricted subsidiaries that are guarantors of the Charter Operating notes to incur additional debt or issue shares of preferred stock if, after giving pro forma effect to the incurrence, Charter Operating could meet a leverage ratio test (ratio of consolidated debt to four times EBITDA, as defined, from the most recent fiscal quarter for which internal financial reports are available) of 4.25 to 1.0.

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      In addition, regardless of whether the leverage ratio test could be met, so long as no default exists or would result from the incurrence or issuance, Charter Operating and its restricted subsidiaries are permitted to incur or issue:

•  up to $6.5 billion of debt under credit facilities (but such incurrence is permitted only by Charter Operating and its restricted subsidiaries that are guarantors of the Charter Operating notes, so long as there are such guarantors), including debt under credit facilities outstanding on the issue date of the Charter Operating notes;

•  up to $75 million of debt incurred to finance the purchase or capital lease of assets;

•  up to $300 million of additional debt for any purpose, and

•  other items of indebtedness for specific purposes such as refinancing of existing debt and interest rate swaps to provide protection against fluctuation in interest rates and, subject to meeting the leverage ratio test, debt existing at the time of acquisition of a restricted subsidiary.

      The Charter Operating indenture provides that Charter Operating will not pay, or permit its subsidiaries to pay, any interest or principal on $361 million of intercompany loans received by it and its subsidiaries in November 2003 from CCO Holdings, all of which shall become a common equity capital contribution to Charter Operating on the guarantee and pledge date.

      The indenture governing the Charter Operating notes permits Charter Operating to incur debt under one of the categories above, and later reclassify the debt into a different category. The amended and restated Charter Operating credit facilities generally impose more restrictive limitations on incurring new debt than the Charter Operating indenture, so our subsidiaries that are subject to the amended and restated Charter Operating credit facilities are not permitted to utilize the full debt incurrence that would otherwise be available under the Charter Operating indenture covenants.

      Generally, under Charter Operating’s indenture Charter Operating and its restricted subsidiaries are permitted to pay dividends on equity interests, repurchase interests, or make other specified restricted payments only if Charter Operating could incur $1.00 of new debt under the leverage ratio test, which requires that Charter Operating meet a 4.25 to 1.0 leverage ratio after giving effect to the transaction, and if no default exists or would exist as a consequence of such incurrence. If those conditions are met, restricted payments are permitted in a total amount of up to 100% of Charter Operating’s consolidated EBITDA, as defined, minus 1.3 times its consolidated interest expense, plus 100% of new cash and appraised non-cash equity proceeds received by Charter Operating and not allocated to the debt incurrence covenant, all cumulatively from the fiscal quarter commenced April 1, 2004, plus $100 million.

      In addition, Charter Operating may make distributions or restricted payments, so long as no default exists or would be caused by the transaction:

•  to repurchase management equity interests in amounts not to exceed $10 million per fiscal year;

•  regardless of the existence of any default, to pay pass-through tax liabilities in respect of ownership of equity interests in Charter Operating or its restricted subsidiaries;

•  to pay, regardless of the existence of any default, interest when due on the Charter Holdings notes, the CCO Holdings notes, and our notes;

•  to pay, so long as there is no default, interest on the Charter convertible notes;

•  to purchase, redeem or refinance the Charter Holdings notes, our notes, the CCO Holdings notes, the Charter notes, and other direct or indirect parent company notes, so long as Charter Operating could incur $1.00 of indebtedness under the 4.25 to 1.0 leverage ratio test referred to above and there is no default, or

•  to make other specified restricted payments including merger fees up to 1.25% of the transaction value, repurchases using concurrent new issuances, and certain dividends on existing subsidiary preferred equity interests.

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      The indenture governing the Charter Operating notes restricts Charter Operating and its restricted subsidiaries from making investments, except specified permitted investments, or creating new unrestricted subsidiaries, if there is a default under the indenture or if Charter Operating could not incur $1.00 of new debt under the 4.25 to 1.0 leverage ratio test described above after giving effect to the transaction.

      Permitted investments include:

•  investments by Charter Operating and its restricted subsidiaries in Charter Operating and in other restricted subsidiaries, or entities that become restricted subsidiaries as a result of the investment,

•  investments aggregating up to 100% of new cash equity proceeds received by Charter Operating since April 27, 2004 to the extent the proceeds have not been allocated to the restricted payments covenant described above,

•  other investments up to $750 million outstanding at any time, and

•  certain specified additional investments, such as investments in customers and suppliers in the ordinary course of business and investments received in connection with permitted asset sales.

      Charter Operating and its restricted subsidiaries are not permitted to grant liens senior to the liens securing the Charter Operating notes, other than permitted liens, on their assets to secure indebtedness or other obligations, if, after giving effect to such incurrence, the senior secured leverage ratio (generally, the ratio of obligations secured by first priority liens to four times EBITDA, as defined, from the most recent fiscal quarter for which internal financial reports are available) would exceed 3.75 to 1.0. Permitted liens include liens securing indebtedness and other obligations under permitted credit facilities, liens securing the purchase price of new assets, liens securing amounts up to $50 million, and liens incurred in the ordinary course of business.

      Charter Operating and Charter Communications Operating Capital Corp., its co-issuer, are generally not permitted to sell all or substantially all of their assets or merge with or into other companies unless their leverage ratio after any such transaction would be no greater than their leverage ratio immediately prior to the transaction, or unless Charter Operating and its subsidiaries could incur $1.00 of new debt under the 4.25 to 1.0 leverage ratio test described above after giving effect to the transaction, no default exists, and the surviving entity is a U.S. entity that assumes the Charter Operating notes.

      Charter Operating and its restricted subsidiaries generally may not otherwise sell assets or, in the case of restricted subsidiaries, issue equity interests, unless they receive consideration at least equal to the fair market value of the assets or equity interests, consisting of at least 75% in cash, assumption of liabilities, securities converted into cash within 60 days or productive assets. Charter Operating and its restricted subsidiaries are then required within 365 days after any asset sale either to commit to use the net cash proceeds over a specified threshold to acquire assets, including current assets, used or useful in their businesses or use the net cash proceeds to repay debt, or to offer to repurchase the Charter Operating notes with any remaining proceeds.

      Charter Operating and its restricted subsidiaries may generally not engage in sale and leaseback transactions unless, at the time of the transaction, Charter Operating could have incurred secured indebtedness in an amount equal to the present value of the net rental payments to be made under the lease, and the sale of the assets and application of proceeds is permitted by the covenant restricting asset sales.

      Charter Operating’s restricted subsidiaries may generally not enter into restrictions on their ability to make dividends or distributions or transfer assets to Charter Operating on terms that are materially more restrictive than those governing their debt, lien, asset sale, lease and similar agreements existing when Charter Operating entered into the indenture governing the Charter Operating Senior second lien notes unless those restrictions are on customary terms that will not materially impair Charter Operating’s ability to repay the Charter Operating notes.

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      The restricted subsidiaries of Charter Operating are generally not permitted to guarantee or pledge assets to secure debt of Charter Operating, unless the guarantying subsidiary issues a guarantee of the notes of comparable priority and tenor, and waives any rights of reimbursement, indemnity or subrogation arising from the guarantee transaction for at least one year.

      The indenture also restricts the ability of Charter Operating and its restricted subsidiaries to enter into certain transactions with affiliates involving consideration in excess of $15 million without a determination by the board of directors that the transaction is on terms no less favorable than arms-length, or transactions with affiliates involving over $50 million without receiving an independent opinion as to the fairness of the transaction to the holders of the Charter Operating notes.

      Charter Operating and its restricted subsidiaries are generally not permitted to transfer equity interests in restricted subsidiaries unless the transfer is of all of the equity interests in the restricted subsidiary or the restricted subsidiary remains a restricted subsidiary and net proceeds of the equity sale are applied in accordance with the asset sales covenant.

      Until the guarantee and pledge date, the Charter Operating notes are secured by a second-priority lien on all of Charter Operating’s assets that secure the obligations of Charter Operating under the Charter Operating credit facility and specified related obligations. The collateral secures the obligations of Charter Operating with respect to the 8% senior second lien notes due 2012 and the 8 3/8% senior second lien notes due 2014 on a ratable basis. The collateral consists of substantially all of Charter Operating’s assets in which security interests may be perfected under the Uniform Commercial Code by filing a financing statement (including capital stock and intercompany obligations), including, but not limited to:

•  all of the capital stock of all of Charter Operating’s direct subsidiaries, including, but not limited to, CCO NR Holdings, LLC; and

•  all intercompany obligations owing to Charter Operating including, but not limited to, intercompany notes from CC VI Operating, CC VIII Operating and Falcon, which notes are supported by the same guarantees and collateral that supported these subsidiaries’ credit facilities prior to the amendment and restatement of the Charter Operating credit facilities.

      On and after the guarantee and pledge date, the collateral for the Charter Operating notes will consist of all of Charter Operating’s and its subsidiaries’ assets that secure the obligations of Charter Operating or any subsidiary of Charter Operating with respect to the Charter Operating credit facility and the related obligations or certain other indebtedness on such date. It is currently contemplated that, as of the guarantee and pledge date, such collateral will consist of the capital stock of Charter Operating held by CCO Holdings, all of the intercompany obligations owing to CCO Holdings by Charter Operating or any subsidiary of Charter Operating, and substantially all of Charter Operating’s and the guarantors’ assets (other than the assets of CCO Holdings) in which security interests may be perfected under the Uniform Commercial Code by filing a financing statement (including capital stock and intercompany obligations), including, but not limited to:

•  with certain exceptions, all capital stock (limited in the case of capital stock of foreign subsidiaries, if any, to 66% of the capital stock of first tier foreign Subsidiaries) held by Charter Operating or any guarantor; and

•  with certain exceptions, all intercompany obligations owing to Charter Operating or any guarantor.

      In addition, within a time frame specified under the Charter Operating credit facility (45 days after Charter Holdings satisfies the Leverage Condition, as defined), Charter Operating will be required to redeem, or cause to be redeemed, in full the notes outstanding under the CC V indenture. Within five business days after the redemption, and provided that such Leverage Condition remains satisfied, CC V Holdings, LLC and its subsidiaries will be required to guarantee the Charter Operating credit facility and the related obligations and to secure those guarantees with first-priority liens, and to guarantee the notes and to secure the Charter Operating senior second lien notes with second-priority liens, on substantially all of their assets in which security interests may be perfected under the Uniform

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Commercial Code by filing a financing statement (including capital stock and intercompany obligations). In addition, if Charter Operating or its subsidiaries exercise any option to redeem in full the notes outstanding under the Renaissance indenture, then, provided that the Leverage Condition remains satisfied, the Renaissance entities will be required to provide corresponding guarantees of the amended and restated Charter Operating credit facilities and related obligations and note guarantees and to secure the Charter Operating notes and the amended and restated Charter Operating credit facilities and related obligations with corresponding liens.

      In the event that additional liens are granted by Charter Operating or its subsidiaries to secure obligations under the amended and restated Charter Operating credit facilities or the related obligations, second priority liens on the same assets will be granted to secure the Charter Operating notes, which liens will be subject to the provisions of an intercreditor agreement. Notwithstanding the foregoing sentence, no such second priority liens need be provided if the time such lien would otherwise be granted is not during a guarantee and pledge availability period (when the Leverage Condition is satisfied), but such second priority lien will be required to be provided in accordance with the foregoing sentence on or prior to the fifth business day of the commencement of the next succeeding guarantee and pledge availability period.

     CC V Holdings Notes

      On December 10, 1998, CC V Holdings, LLC, formerly known as Avalon Cable LLC, and CC V Holdings Finance, Inc. (formerly Avalon Cable Holdings Finance, Inc.) (collectively the “CC V Issuers”) jointly issued $196.0 million total principal amount at maturity of 11.875% senior discount notes due 2008. On July 22, 1999, the issuers exchanged $196.0 million of the original issued and outstanding CC V Holdings notes for an equivalent amount of new CC V Holdings notes. The form and terms of the new CC V Holdings notes are substantially identical to the original CC V Holdings notes except that they are registered under the Securities Act and, therefore, are not subject to the same transfer restrictions.

      The CC V Holdings notes are guaranteed by certain subsidiaries of CC V Holdings. The Charter Operating credit facilities require us to redeem the CC V Holdings notes within 45 days after the first date that the Charter Holdings leverage ratio is less than 8.75 to 1.0.

      In the event of specified change of control events, holders of the CC V Holdings notes have the right to sell their CC V Holdings notes to the issuers of the CC V Holdings notes at 101% of the total principal amount of the CC V Holdings notes, plus accrued and unpaid interest, if any, to the date of purchase.

      Our acquisition of Avalon triggered this right. In January 2000, we completed change of control offers in which we repurchased $16.3 million total accreted value of the 11.875% notes at a purchase price of 101% of accreted value as of January 28, 2000. The repurchase price of $11 million was funded with proceeds of the sale of the January 2000 Charter Holdings notes.

      On December 1, 2003, the issuers redeemed at par value an amount equal to $369.79 per $1,000 in principal amount at maturity of each senior discount note then outstanding. Based on the amount outstanding on December 1, 2003, the redemption amount was $67 million.

      There were no current payments of cash interest on the CC V Holdings notes before December 1, 2003. The CC V Holdings notes accreted in value at a rate of 11.875% per year, compounded semi-annually, to a total principal amount of $180 million on December 1, 2003. At December 31, 2003, after principal repayments in the fourth quarter of 2003, the total principal amount outstanding was $113 million. Since December 1, 2003, cash interest on the CC V Holdings notes:

•  accrues at the rate of 11.875% per year on the principal amount at maturity; and

•  is payable semi-annually in arrears on June 1 and December 1 of each year, commencing June 1, 2004.

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      After December 1, 2003, the issuers of the CC V Holdings notes may redeem the CC V Holdings notes, in whole or in part, at a specified premium. The optional redemption price declines to 100% of the principal amount of the CC V Holdings notes redeemed, plus accrued and unpaid interest, if any, for redemptions on or after December 1, 2006.

      The limitations on incurrence of debt contained in the indenture governing the CC V Holdings notes permit the CC V Issuers and their restricted subsidiaries to incur additional debt or issue shares of preferred stock, so long as we are not in default under the CC V Holdings indenture:

•  if, after giving effect to the incurrence, the CC V Issuers could meet a leverage ratio (ratio of consolidated debt to four times consolidated cash flow from the most recent quarter) of 6.5 to 1.0, and, regardless of whether the leverage ratio could be met,

•  up to approximately $346 million of debt under a credit facility,

•  up to $10 million of debt incurred to finance the purchase of new assets,

•  up to $15 million of additional debt, and

•  other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt and interest rate swaps to provide protection against fluctuation in interest rates.

      The indenture governing the CC V Holdings notes permits the CC V Issuers to incur debt under one of the categories above, and reclassify the debt into a different category.

•  Under the indenture governing the CC V Holdings notes, the CC V Issuers and their restricted subsidiaries are permitted to pay dividends on equity interests, repurchase interests, make restricted investments, or make other specified restricted payments only if CC V Holdings could, after giving effect thereto, incur $1.00 of additional debt under the leverage ratio test, which would require that the CC V Issuers meet the 6.5 to 1.0 leverage ratio of the indebtedness covenant and no default would exist or result as a consequence thereof. If those conditions are met, the CC V Issuers and their restricted subsidiaries are permitted to make restricted payments in a total amount not to exceed the result of 100% of the CC V Issuers’ consolidated cash flow, minus 1.4 times their consolidated interest expense, plus 100% of new equity proceeds received by the CC V Issuers, plus returns on certain investments, all cumulatively from January 1, 1999. The CC V Issuers and their restricted subsidiaries may make permitted investments up to $10 million and other specified permitted investments, restricted payments up to $5 million, and other specified restricted payments without meeting the foregoing test.

•  The CC V Issuers and their restricted subsidiaries are not permitted to grant liens on their assets other than specified permitted liens. Permitted liens include liens securing debt permitted by the covenant limiting incurrence of debt, liens securing amounts up to the greater of $15 million or 5% of total assets, certain existing liens and specified liens incurred in the ordinary course of business.

•  The CC V Issuers are generally not permitted to sell or otherwise dispose of all or substantially all of their assets or merge with or into other companies unless the CC V Issuers and their subsidiaries could incur $1.00 of additional debt under the leverage ratio test described above, after giving effect to the transaction.

•  The CC V Issuers and their subsidiaries may generally not otherwise sell assets or, in the case of restricted subsidiaries, equity interests, unless they receive consideration at least equal to the fair market value of the assets or equity interests, with at least 75% of the consideration for such sale consisting of a controlling interest in a permitted business or assets useful in a permitted business or cash, assumption of liabilities or securities promptly converted into cash. The CC V Issuers and their restricted subsidiaries are then required within 360 days after any asset sale either to commit to use the net cash proceeds over a specified threshold either to acquire assets, including controlling assets in permitted businesses, make capital expenditures or use the net cash proceeds to repay debt, or to offer to repurchase the CC V Holdings notes with any remaining proceeds.

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•  The CC V Issuers and their restricted subsidiaries may not engage in sale and leaseback transactions unless, at the time of the transaction, the applicable CC V Issuer or restricted subsidiary could have incurred indebtedness under the leverage ratio test described above in an amount equal to the present value of the net rental payments to be made under the lease, the gross proceeds of the sale are at least equal to the fair market value of the subject property, and the sale of the assets and application of proceeds is permitted by the covenant restricting asset sales.

•  The CC V Issuers’ restricted subsidiaries may not enter into restrictions on their abilities to make dividends or distributions or transfer assets to the CC V Issuers except under documents governing debt, asset sales, leases and like transactions permitted by the indenture.

•  The restricted subsidiaries of the CC V Issuers are generally not permitted to guarantee or pledge assets to secure debt of the CC V Issuers, unless the guarantying subsidiary issues a guarantee of the CC V Holdings notes, and waives any rights of reimbursement, indemnity or subrogation arising from the guarantee transaction.

•  The CC V Issuers and their restricted subsidiaries are generally not permitted to transfer equity interests in restricted subsidiaries unless the transfer is of all of the equity interests in the restricted subsidiary or the restricted subsidiary remains a restricted subsidiary and net proceeds of the equity sale are applied in accordance with the asset sales covenant. Restricted subsidiaries of the CC V Issuers are not permitted to issue equity interests if as a result, the issuing subsidiary would no longer be a restricted subsidiary.

•  The indenture governing the CC V Holdings notes also restricts the ability of the CC V Issuers and their restricted subsidiaries to enter into certain transactions with affiliates involving over $2.5 million without a determination by the board of directors that the transaction is on terms no less favorable than arms-length, or transactions with affiliates involving consideration in excess of $10 million with affiliates without receiving an independent opinion as to the fairness of the transaction to the holders of the CC V Holdings notes.

     Renaissance Notes

      The 10% senior discount notes due 2008 were issued by Renaissance Media (Louisiana) LLC, Renaissance Media (Tennessee) LLC and Renaissance Media Holdings Capital Corporation, with Renaissance Media Group LLC as guarantor and the United States Trust Company of New York as trustee. Renaissance Media Group LLC, which is the direct or indirect parent company of these issuers, is now a subsidiary of Charter Operating. The Renaissance 10% notes and the Renaissance guarantee are unsecured, unsubordinated debt of the issuers and the guarantor, respectively. In October 1998, the issuers of the Renaissance notes exchanged $163 million of the original issued and outstanding Renaissance notes for an equivalent value of new Renaissance notes. The form and terms of the new Renaissance notes are the same in all material respects as the form and terms of the original Renaissance notes except that the issuance of the new Renaissance notes was registered under the Securities Act.

      There was no payment of any interest in respect of the Renaissance notes prior to October 15, 2003. Since October 15, 2003, interest on the Renaissance notes is payable semi-annually in arrears in cash at a rate of 10% per year. On April 15, 2003, the Renaissance notes became redeemable at the option of the issuers thereof, in whole or in part, initially at 105% of their principal amount at maturity, plus accrued interest, declining to 100% of the principal amount at maturity, plus accrued interest, on or after April 15, 2006.

      Our acquisition of Renaissance triggered change of control provisions of the Renaissance notes that required us to offer to purchase the Renaissance notes at a purchase price equal to 101% of their accreted value on the date of the purchase, plus accrued interest, if any. In May 1999, we made an offer to repurchase the Renaissance notes, and holders of Renaissance notes representing 30% of the total principal amount outstanding at maturity tendered their Renaissance notes for repurchase.

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      The limitations on incurrence of debt contained in the indenture governing the Renaissance notes permit Renaissance Media Group and its restricted subsidiaries to incur additional debt, so long as they are not in default under the indenture:

•  if, after giving effect to the incurrence, Renaissance Media Group could meet a leverage ratio (ratio of consolidated debt to four times consolidated EBITDA, as defined, from the most recent quarter) of 6.75 to 1.0, and, regardless of whether the leverage ratio could be met,

•  up to the greater of $200 million or 4.5 times Renaissance Media Group’s consolidated annualized EBITDA, as defined,

•  up to an amount equal to 5% of Renaissance Media Group’s consolidated total assets to finance the purchase of new assets,

•  up to two times the sum of (a) the net cash proceeds of new equity issuances and capital contributions, and (b) 80% of the fair market value of property received by Renaissance Media Group or an issuer as a capital contribution, in each case received after the issue date of the Renaissance notes and not allocated to make restricted payments, and

•  other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt and interest rate swaps to provide protection against fluctuation in interest rates.

      The indenture governing the Renaissance notes permits us to incur debt under one of the categories above, and reclassify the debt into a different category.

•  Under the indenture governing the Renaissance notes, Renaissance Media Group and its restricted subsidiaries are permitted to pay dividends on equity interests, repurchase interests, make restricted investments, or make other specified restricted payments only if Renaissance Media Group could incur $1.00 of additional debt under the debt incurrence test, which requires that Renaissance Media Group meet the 6.75 to 1.0 leverage ratio after giving effect to the transaction of the indebtedness covenant and that no default exists or would occur as a consequence thereof. If those conditions are met, Renaissance Media Group and its restricted subsidiaries are permitted to make restricted payments in a total amount not to exceed the result of 100% of Renaissance Media Group’s consolidated EBITDA, as defined, minus 130% of its consolidated interest expense, plus 100% of new cash equity proceeds received by Renaissance Media Group and not allocated to the indebtedness covenant, plus returns on certain investments, all cumulatively from June 1998. Renaissance Media Group and its restricted subsidiaries may make permitted investments up to $2 million in related businesses and other specified permitted investments, restricted payments up to $10 million, dividends up to 6% each year of the net cash proceeds of public equity offerings, and other specified restricted payments without meeting the foregoing test.

•  Renaissance Media Group and its restricted subsidiaries are not permitted to grant liens on their assets other than specified permitted liens, unless corresponding liens are granted to secure the Renaissance notes. Permitted liens include liens securing debt permitted to be incurred under credit facilities, liens securing debt incurred under the incurrence of indebtedness test, in amounts up to the greater of $200 million or 4.5 times Renaissance Media Group’s consolidated EBITDA, as defined, liens as deposits for acquisitions up to 10% of the estimated purchase price, liens securing permitted financings of new assets, liens securing debt permitted to be incurred by restricted subsidiaries, and specified liens incurred in the ordinary course of business.

•  Renaissance Media Group and the issuers of the Renaissance notes are generally not permitted to sell or otherwise dispose of all or substantially all of their assets or merge with or into other companies unless their consolidated net worth after any such transaction would be equal to or greater than their consolidated net worth immediately prior to the transaction, or unless Renaissance Media Group could incur $1.00 of additional debt under the debt incurrence test, which would require them to meet a leverage ratio of 6.75 to 1.00 after giving effect to the transaction.

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•  Renaissance Media Group and its subsidiaries may generally not otherwise sell assets or, in the case of subsidiaries, equity interests, unless they receive consideration at least equal to the fair market value of the assets, consisting of at least 75% cash, temporary cash investments or assumption of debt. Charter Holdings and its restricted subsidiaries are then required within 12 months after any asset sale either to commit to use the net cash proceeds over a specified threshold either to acquire assets used in their own or related businesses or use the net cash proceeds to repay debt, or to offer to repurchase the Renaissance notes with any remaining proceeds.

•  Renaissance Media Group and its restricted subsidiaries may generally not engage in sale and leaseback transactions unless the lease term does not exceed three years or the proceeds are applied in accordance with the covenant limiting asset sales.

•  Renaissance Media Group’s restricted subsidiaries may generally not enter into restrictions on their abilities to make dividends or distributions or transfer assets to Renaissance Media Group except those not more restrictive than is customary in comparable financings.

•  The restricted subsidiaries of Renaissance Media Group are not permitted to guarantee or pledge assets to secure debt of the Renaissance Media Group or its restricted subsidiaries, unless the guarantying subsidiary issues a guarantee of the Renaissance notes of comparable priority and tenor, and waives any rights of reimbursement, indemnity or subrogation arising from the guarantee transaction.

•  Renaissance Media Group and its restricted subsidiaries are generally not permitted to issue or sell equity interests in restricted subsidiaries, except sales of common stock of restricted subsidiaries so long as the proceeds of the sale are applied in accordance with the asset sale covenant, and issuances as a result of which the restricted subsidiary is no longer a restricted subsidiary and any remaining investment in that subsidiary is permitted by the covenant limiting restricted payments.

•  The indenture governing the Renaissance Notes also restricts the ability of Renaissance Media Group and its restricted subsidiaries to enter into certain transactions with affiliates involving consideration in excess of $2 million without a determination by the disinterested members of the board of directors that the transaction is on terms no less favorable than arms length, or transactions with affiliates involving over $4 million with affiliates without receiving an independent opinion as to the fairness of the transaction to Renaissance Media Group.

      All of these covenants are subject to additional specified exceptions. In general, the covenants of the amended and restated Charter Operating credit facilities are more restrictive than those of our indentures.

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Parent Company Debt

      As of December 31, 2003, the total debt of our direct and indirect parent companies was as summarized below (dollars in millions):

December 31, 2003

Semi-annual

Start date for

interest

interest

Face

Accreted

payment

payment on

Maturity

value

value(a)

dates

discount notes

date(b)

Charter Communications, Inc.:

October and November 2000

5.750% convertible senior notes due 2005(c)

$

618

$

618

4/15 & 10/15

10/15/05

May 2001

4.750% convertible senior notes due 2006(c)

156

156

12/1 & 6/1

6/1/06

Charter Holdings:

March 1999

8.250% senior notes due 2007

451

450

4/1 & 10/1

4/1/07

8.625% senior notes due 2009

1,244

1,242

4/1 & 10/1

4/1/09

9.920% senior discount notes due 2011

1,108

1,082

4/1 & 10/1

10/1/04

4/1/11

January 2000

10.000% senior notes due 2009

640

640

4/1 & 10/1

4/1/09

10.250% senior notes due 2010

318

318

1/15 & 7/15

1/15/10

11.750% senior discount notes due 2010

450

400

1/15 & 7/15

7/15/05

1/15/10

January 2001

10.750% senior notes due 2009

874

873

4/1 & 10/1

10/1/09

11.125% senior notes due 2011

500

500

1/15 & 7/15

1/15/11

13.500% senior discount notes due 2011

675

517

1/15 & 7/15

7/15/06

1/15/11

May 2001

9.625% senior notes due 2009 (includes the January 2002 additional bond issue)

640

638

5/15 & 11/15

11/15/09

10.000% senior notes due 2011 (includes the January 2002 additional bond issue)

710

708

5/15 & 11/15

5/15/11

11.750% senior discount notes due 2011

939

717

5/15 & 11/15

11/15/06

5/15/11

January 2002

12.125% senior discount notes due 2012

330

231

1/15 & 7/15

7/15/07

1/15/12

(a)	The accreted value presented above represents the face value of the notes less the original issue discount at the time of sale plus the accretion to the balance sheet date.
(b)	In general, the obligors have the right to redeem all of the notes set forth in the above table (except the Charter Holdings notes with terms of eight years) in whole or part at their option, beginning at various times prior to their stated maturity dates, subject to certain conditions, upon the payment of the outstanding principal amount (plus a specified redemption premium) and all accrued and unpaid interest. We currently do not intend to redeem any of these notes prior to their stated maturity dates.
(c)	The 5.75% convertible senior notes and the 4.75% convertible senior notes are convertible at the option of the holder into shares of Charter Class A common stock at a conversion rate of 46.3822 and

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38.0952 shares, respectively, per $1,000 principal amount of notes, which is equivalent to a price of $21.56 and $26.25 per share, respectively, subject to certain adjustments.

     5.75% Charter Convertible Notes

      In October and November 2000, Charter issued 5.75% convertible senior notes with a total principal amount at maturity of $750 million. As of December 31, 2003, there was $618 million in total principal amount of these notes outstanding. The 5.75% Charter convertible notes are convertible at the option of the holder into shares of Class A common stock at a conversion rate of 46.3822 shares per $1,000 principal amount of notes, which is equivalent to a price of $21.56 per share, subject to certain adjustments. Specifically, the adjustments include anti-dilutive provisions, which cause adjustments to occur automatically based on the occurrence of specified events to provide protection rights to holders of the notes. Additionally, Charter may adjust the conversion ratio under certain circumstances when deemed appropriate. These notes are redeemable at our option at amounts decreasing from 102.3% to 100% of the principal amount plus accrued and unpaid interest beginning on October 15, 2003, to the date of redemption.

      The 5.75% Charter convertible notes rank equally with any of Charter’s future unsubordinated and unsecured indebtedness, but are structurally subordinated to all existing and future indebtedness and other liabilities of Charter’s subsidiaries. Upon a change of control, subject to certain conditions and restrictions, Charter may be required to repurchase the notes, in whole or in part, at 100% of their principal amount plus accrued interest at the repurchase date.

     4.75% Charter Convertible Notes

      In May 2001, Charter issued 4.75% convertible senior notes with a total principal amount at maturity of $633 million. As of December 31, 2003, there was $156 million in total principal amount of these notes outstanding. The 4.75% Charter convertible notes are convertible at the option of the holder into shares of Class A common stock at a conversion rate of 38.0952 shares per $1,000 principal amount of notes, which is equivalent to a price of $26.25 per share, subject to certain adjustments. Specifically, the adjustments include anti-dilutive provisions, which automatically occur based on the occurrence of specified events to provide protection rights to holders of the notes. Additionally, Charter may adjust the conversion ratio under certain circumstances when deemed appropriate. These notes are redeemable at our option at amounts decreasing from 101.9% to 100% of the principal amount, plus accrued and unpaid interest beginning on June 4, 2004, to the date of redemption.

      The 4.75% Charter convertible notes rank equally with any of Charter’s future unsubordinated and unsecured indebtedness, but are structurally subordinated to all existing and future indebtedness and other liabilities of Charter’s subsidiaries. Upon a change of control, subject to certain conditions and restrictions, Charter may be required to repurchase the notes, in whole or in part, at 100% of their principal amount plus accrued interest at the repurchase date.

     March 1999 Charter Holdings Notes

      The March 1999 Charter Holdings notes were issued under three separate indentures, each dated as of March 17, 1999, among Charter Holdings and Charter Capital, as the issuers, and BNY Midwest Trust Company, as trustee. Charter Holdings and Charter Capital exchanged these notes for new March 1999 Charter Holdings notes with substantially similar terms, except that the new March 1999 Charter Holdings notes are registered under the Securities Act and, therefore, do not bear legends restricting their transfer and are not subject to further registration or special interest obligations.

      The March 1999 Charter Holdings notes are general unsecured obligations of Charter Holdings and Charter Capital. Cash interest on the March 1999 9.920% Charter Holdings notes did not accrue prior to April 1, 2004.

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      The March 1999 Charter Holdings notes are senior debts of Charter Holdings and Charter Capital. They rank equally with all other current and future unsubordinated obligations of Charter Holdings and Charter Capital, including the January 2000, January 2001, May 2001 and January 2002 Charter Holdings notes. They are structurally subordinated to the obligations of Charter Holdings’ subsidiaries, including the CCH II notes, the CCO Holdings notes, the Renaissance notes, the CC V Holdings notes, the Charter Operating notes and the amended and restated Charter Operating credit facilities.

      Charter Holdings and Charter Capital will not have the right to redeem the March 1999 8.250% Charter Holdings notes prior to their maturity date on April 1, 2007. On or after April 1, 2004, Charter Holdings and Charter Capital may redeem some or all of the March 1999 8.625% Charter Holdings notes and the March 1999 9.920% Charter Holdings notes at any time, in each case, at a premium. The optional redemption price declines to 100% of the principal amount of March 1999 Charter Holdings notes redeemed, plus accrued and unpaid interest, if any, for redemption on or after April 1, 2007.

      In the event that a specified change of control event occurs, Charter Holdings and Charter Capital must offer to repurchase any then outstanding March 1999 Charter Holdings notes at 101% of their principal amount or accreted value, as applicable, plus accrued and unpaid interest, if any.

      The indentures governing the March 1999 Charter Holdings senior notes contain restrictive covenants that limit certain transactions or activities by Charter Holdings and its restricted subsidiaries. All but two of Charter Holdings’ direct and indirect subsidiaries are currently restricted subsidiaries.

     January 2000 Charter Holdings Notes

      The January 2000 Charter Holdings notes were issued under three separate indentures, each dated as of January 12, 2000, among Charter Holdings and Charter Capital, as the issuers, and BNY Midwest Trust Company, as trustee. In June 2000, Charter Holdings and Charter Capital exchanged these notes for new January 2000 Charter Holdings notes, with substantially similar terms, except that the new January 2000 Charter Holdings notes are registered under the Securities Act and, therefore, do not bear legends restricting their transfer and are not subject to further registration or special interest obligations.

      The January 2000 Charter Holdings notes are general unsecured obligations of Charter Holdings and Charter Capital. Cash interest on the January 2000 11.75% Charter Holdings notes will not accrue prior to January 15, 2005.

      The January 2000 Charter Holdings notes are senior debts of Charter Holdings and Charter Capital. They rank equally with all other current and future unsubordinated obligations of Charter Holdings and Charter Capital, including the March 1999, January 2001, May 2001 and January 2002 Charter Holdings notes. They are structurally subordinated to the obligations of Charter Holdings’ subsidiaries, including the CCH II notes, the CCO Holdings notes, the Renaissance notes, the CC V Holdings notes, the amended and restated Charter Operating credit facilities and the Charter Operating notes.

      Charter Holdings and Charter Capital will not have the right to redeem the January 2000 10.00% Charter Holdings notes prior to their maturity date on April 1, 2009. On or after January 15, 2005, Charter Holdings and Charter Capital may redeem some or all of the January 2000 10.25% Charter Holdings notes and the January 2000 11.75% Charter Holdings notes at any time, in each case, at a premium. The optional redemption price declines to 100% of the principal amount of the January 2000 Charter Holdings notes redeemed, plus accrued and unpaid interest, if any, for redemption on or after January 15, 2008.

      In the event that a specified change of control event occurs, Charter Holdings and Charter Capital must offer to repurchase any then outstanding January 2000 Charter Holdings notes at 101% of their total principal amount or accreted value, as applicable, plus accrued and unpaid interest, if any.

      The indentures governing the January 2000 Charter Holdings notes contain substantially identical events of default, affirmative covenants and negative covenants as those contained in the indentures

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governing the March 1999 Charter Holdings notes. See “—Summary of restrictive covenants under the Charter Holdings high-yield note indentures.”

     January 2001 Charter Holdings Notes

      The January 2001 Charter Holdings notes were issued under three separate indentures, each dated as of January 10, 2001, each among Charter Holdings and Charter Capital, as the issuers, and BNY Midwest Trust Company, as trustee. In March 2001, Charter Holdings and Charter Capital exchanged these notes for new January 2001 Charter Holdings notes, with substantially similar terms, except that the new January 2001 Charter Holdings notes are registered under the Securities Act and, therefore, do not bear legends restricting their transfer, and are not subject to further registration or special interest obligations.

      The January 2001 Charter Holdings notes are general unsecured obligations of Charter Holdings and Charter Capital. Cash interest on the January 2001 13.500% Charter Holdings notes will not accrue prior to January 15, 2006.

      The January 2001 Charter Holdings notes are senior debts of Charter Holdings and Charter Capital. They rank equally with all other current and future unsubordinated obligations of Charter Holdings and Charter Capital, including the March 1999, January 2000, May 2001 and January 2002 Charter Holdings notes. They are structurally subordinated to the obligations of Charter Holdings’ subsidiaries, including the CCH II notes, the CCO Holdings notes, the Renaissance notes, the CC V Holdings notes, the amended and restated Charter Operating credit facilities and the Charter Operating notes.

      Charter Holdings and Charter Capital will not have the right to redeem the January 2001 10.750% Charter Holdings notes prior to their maturity date on October 1, 2009. On or after January 15, 2006, Charter Holdings and Charter Capital may redeem some or all of the January 2001 11.125% Charter Holdings notes and the January 2001 13.500% Charter Holdings notes at any time, in each case, at a premium. The optional redemption price declines to 100% of the principal amount of the January 2001 Charter Holdings notes redeemed, plus accrued and unpaid interest, if any, for redemption on or after January 15, 2009.

      In the event that a specified change of control event occurs, Charter Holdings and Charter Capital must offer to repurchase any then outstanding January 2001 Charter Holdings notes at 101% of their total principal amount or accreted value, as applicable, plus accrued and unpaid interest, if any.

      The indentures governing the January 2001 Charter Holdings notes contain substantially identical events of default, affirmative covenants and negative covenants as those contained in the indentures governing the March 1999 and January 2000 Charter Holdings notes. See “— Summary of restrictive covenants under the Charter Holdings high-yield note indentures.”

May 2001 Charter Holdings Notes

      The May 2001 Charter Holdings notes were issued under three separate indentures, each among Charter Holdings and Charter Capital, as the issuers, and BNY Midwest Trust Company, as trustee. In September 2001, Charter Holdings and Charter Capital exchanged substantially all of these notes for new May 2001 Charter Holdings notes, with substantially similar terms, except that the new May 2001 Charter Holdings notes are registered under the Securities Act and, therefore, do not bear legends restricting their transfer, and are not subject to further registration or special interest obligations.

      The May 2001 Charter Holdings notes are general unsecured obligations of Charter Holdings and Charter Capital. Cash interest on the May 2001 11.750% Charter Holdings notes will not accrue prior to May 15, 2006.

      The May 2001 Charter Holdings notes are senior debts of Charter Holdings and Charter Capital. They rank equally with all other current and future unsubordinated obligations of Charter Holdings and Charter Capital, including the March 1999, January 2000, January 2001 and January 2002 Charter Holdings notes. They are structurally subordinated to the obligations of Charter Holdings’ subsidiaries,

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including the CCH II notes, the CCO Holdings notes, the Renaissance notes, the CC V Holdings notes, the amended and restated Charter Operating credit facilities and the Charter Operating notes.

      Charter Holdings and Charter Capital will not have the right to redeem the May 2001 9.625% Charter Holdings notes prior to their maturity date on November 15, 2009. Before May 15, 2004, Charter Holdings and Charter Capital may redeem up to 35% of the May 2001 10.000% Charter Holdings notes and the May 2001 11.750% Charter Holdings notes, in each case, at a premium with proceeds of certain offerings of equity securities. In addition, on or after May 15, 2006, Charter Holdings and Charter Capital may redeem some or all of the May 2001 10.000% Charter Holdings notes and the May 2001 11.750% Charter Holdings notes at any time, in each case, at a premium. The optional redemption price declines to 100% of the principal amount of the May 2001 Charter Holdings notes redeemed, plus accrued and unpaid interest, if any, for redemption on or after May 15, 2009.

      In the event that a specified change of control event occurs, Charter Holdings and Charter Capital must offer to repurchase any then outstanding May 2001 Charter Holdings notes at 101% of their total principal amount or accreted value, as applicable, plus accrued and unpaid interest, if any.

      The indentures governing the May 2001 Charter Holdings notes contain substantially identical events of default, affirmative covenants and negative covenants as those contained in the indentures governing the March 1999, January 2000 and January 2001 Charter Holdings notes. See “— Summary of restrictive covenants under the Charter Holdings high-yield note indentures.”

January 2002 Charter Holdings Notes

      The January 2002 Charter Holdings notes were issued under three separate indentures, each among Charter Holdings and Charter Capital, as the issuers, and BNY Midwest Trust Company, as trustee, two of which were supplements to the indentures for the May 2001 Charter Holdings notes. In July 2002, Charter Holdings and Charter Capital exchanged substantially all of these notes for new January 2002 Charter Holdings notes, with substantially similar terms, except that the new January 2002 notes are registered under the Securities Act and, therefore, do not bear legends restricting their transfer and are not subject to further registration or special interest obligations.

      The January 2002 Charter Holdings notes are general unsecured obligations of Charter Holdings and Charter Capital. Cash interest on the January 2002 12.125% Charter Holdings notes will not accrue prior to January 15, 2007.

      The January 2002 Charter Holdings notes are senior debts of Charter Holdings and Charter Capital. They rank equally with the current and future unsecured and unsubordinated debt of Charter Holdings, including the March 1999, January 2000, January 2001 and May 2001 Charter Holdings notes. They are structurally subordinated to the obligations of Charter Holdings’ subsidiaries, including the CCH II notes, the CCO Holdings notes, the Renaissance notes, the CC V Holdings notes, the Charter Operating amended and restated credit facilities and the Charter Operating notes.

      The Charter Holdings 12.125% senior discount notes are redeemable at the option of the issuers at amounts decreasing from 106.063% to 100% of accreted value beginning January 15, 2007. At any time prior to January 15, 2005, the issuers may redeem up to 35% of the total principal amount of the 12.125% senior discount notes at a redemption price of 112.125% of the accreted value under certain conditions.

      In the event that a specified change of control event occurs, Charter Holdings and Charter Capital must offer to repurchase any then outstanding January 2002 Charter Holdings notes at 101% of their total principal amount or accreted value, as applicable, plus accrued and unpaid interest, if any.

      The indentures governing the January 2002 Charter Holdings notes contain substantially identical events of default, affirmative covenants and negative covenants as those contained in the indentures governing the March 1999, January 2000, January 2001 and May 2001 Charter Holdings notes. See “— Summary of restrictive covenants under the Charter Holdings high-yield note indentures.”

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Summary of Restrictive Covenants Under the Charter Holdings High-Yield Note Indentures

      The limitations on incurrence of debt and issuance of preferred stock contained in Charter Holdings’ indentures permit Charter Holdings and its subsidiaries to incur additional debt or issue preferred stock, so long as there is no default under the Charter Holdings indentures. These limitations restrict the incurrence of debt unless, after giving pro forma effect to the incurrence, the Charter Holdings Leverage Ratio would be below 8.75 to 1.0. In addition, regardless of whether that leverage ratio test could be met, so long as no default exists or would result from the incurrence or issuance, Charter Holdings and its restricted subsidiaries are permitted to issue:

•  up to $3.5 billion of debt under credit facilities,

•  up to $75 million of debt incurred to finance the purchase or capital lease of new assets,

•  up to $300 million of additional debt for any purpose,

•  additional debt in an amount equal to 200% of new cash equity proceeds received by Charter Holdings and its restricted subsidiaries since March 1999, the date of our first indenture, and not allocated for restricted payments or permitted investments, and

•  other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt, and interest rate swaps to provide protection against fluctuation in interest rates.

      The restricted subsidiaries of Charter Holdings are generally not permitted to issue debt securities contractually subordinated in right of payment to other debt of the issuing subsidiary or preferred stock, in either case in any public or Rule 144A offering.

      The Charter Holdings indentures permit Charter Holdings and its restricted subsidiaries to incur debt under one category, and later reclassify that debt into another category. The Charter Operating credit facilities generally impose more restrictive limitations on incurring new debt than Charter Holdings’ indentures, so our subsidiaries that are subject to the Charter Operating credit facilities may not be permitted to utilize the full debt incurrence that would otherwise be available under the Charter Holdings indenture covenants.

      Generally, under Charter Holdings’ high-yield indentures:

•  Charter Holdings and its restricted subsidiaries are generally permitted to pay dividends on equity interests, repurchase interests, or make other specified restricted payments only if, after giving pro forma effect to the transaction, the Charter Holdings Leverage Ratio would be below 8.75 to 1.0 and if no default exists or would exist as a consequence of such incurrence. If those conditions are met, restricted payments in a total amount of up to 100% of Charter Holdings’ consolidated EBITDA, as defined, minus 1.2 times its consolidated interest expense, plus 100% of new cash and non-cash equity proceeds received by Charter Holdings and not allocated to the debt incurrence covenant or to permitted investments, all cumulatively from March 1999, the date of the first Charter Holdings indenture, plus $100 million.

      In addition, Charter Holdings may make distributions or restricted payments, so long as no default exists or would be caused by transactions:

•  to repurchase management equity interests in amounts not to exceed $10 million per fiscal year,

•  regardless of the existence of any default, to pay pass-through tax liabilities in respect of ownership of equity interests in Charter Holdings or its restricted subsidiaries, or

•  to make other specified restricted payments including merger fees up to 1.25% of the transaction value, repurchases using concurrent new issuances, and certain dividends on existing subsidiary preferred equity interests.

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      Charter Holdings and its restricted subsidiaries may not make investments except permitted investments if there is a default under the indentures or if, after giving effect to the transaction, the Charter Holdings Leverage Ratio would be below 8.75 to 1.0.

      Permitted investments include:

•  investments by Charter Holdings in restricted subsidiaries or by restricted subsidiaries in Charter Holdings,

•  investments in productive assets (including through equity investments) aggregating up to $150 million since March 1999,

•  investments aggregating up to 100% of new cash equity proceeds received by Charter Holdings since March 1999 and not allocated to the debt incurrence or restricted payments covenant, and

•  other investments aggregating up to $50 million since March 1999.

      Charter Holdings is not permitted to grant liens on its assets other than specified permitted liens. Permitted liens include liens securing debt and other obligations incurred under our and our subsidiaries’ credit facilities, liens securing the purchase price of new assets, and liens of up to $50 million incurred in the ordinary course of business. The lien covenant does not restrict liens on assets of subsidiaries of Charter Holdings.

      Charter Holdings and Charter Capital, its co-issuer, are generally not permitted to sell all or substantially all of their assets or merge with or into other companies unless their leverage ratio after any such transaction would be no greater than their leverage ratio immediately prior to the transaction, or unless after giving effect to the transaction, the Charter Holdings Leverage Ratio would be below 8.75 to 1.0, no default exists, and the surviving entity is a U.S. entity that assumes the Charter Holdings notes.

      Charter Holdings and its restricted subsidiaries may generally not otherwise sell assets or, in the case of restricted subsidiaries, issue equity interests, unless they receive consideration at least equal to the fair market value of the assets or equity interests, consisting of at least 75% in cash, assumption of liabilities, securities converted into cash within 60 days or productive assets. Charter Holdings and its restricted subsidiaries are then required within 365 days after any asset sale either to commit to use the net cash proceeds over a specified threshold to acquire assets, including current assets, used or useful in their businesses or use the net cash proceeds to repay debt, or to offer to repurchase the Charter Holdings notes with any remaining proceeds.

      Charter Holdings and its restricted subsidiaries may generally not engage in sale and leaseback transactions unless, at the time of the transaction, Charter Holdings could have incurred secured indebtedness in an amount equal to the present value of the net rental payments to be made under the lease, and the sale of the assets and application of proceeds is permitted by the covenant restricting asset sales.

      Charter Holdings’ restricted subsidiaries may generally not enter into restrictions on their ability to make dividends or distributions or transfer assets to Charter Holdings on terms that are materially more restrictive than those governing their debt, lien, asset sale, lease and similar agreements existing when they entered into the indentures, unless those restrictions are on customary terms that will not materially impair Charter Holdings’ ability to repay the high-yield notes.

      The restricted subsidiaries of Charter Holdings are generally not permitted to guarantee or pledge assets to secure debt of Charter Holdings, unless the guarantying subsidiary issues a guarantee of the notes of comparable priority and tenor, and waives any rights of reimbursement, indemnity or subrogation arising from the guarantee transaction for at least one year.

      The indentures also restrict the ability of Charter Holdings and its restricted subsidiaries to enter into certain transactions with affiliates involving consideration in excess of $15 million without a determination by the board of directors of Charter Holdings that the transaction is on terms no less favorable than arms

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length, or transactions with affiliates involving over $50 million without receiving an independent opinion as to the fairness of the transaction addressed to the holders of the Charter Holdings notes.

Cross-Defaults

      Our indentures and those of our parent companies and certain of our subsidiaries include various events of default, including cross-default provisions. Under these provisions, a failure by any of the issuers or any of their restricted subsidiaries to pay at the final maturity thereof the principal amount of other indebtedness having a principal amount of $100 million or more (or any other default under any such indebtedness resulting in its acceleration) would result in an event of default under the indenture governing the applicable notes. The CC V Holdings indenture contains events of default that include a cross-default in the event of acceleration of, or failure to make payments when due or within the applicable grace period, by the CC V Issuers or any of their restricted subsidiaries, on any indebtedness of $5 million or more. The Renaissance indenture contains a similar cross-default provision with a $10 million threshold that applies to the issuers of the Renaissance notes and their restricted subsidiaries. As a result, an event of default related to the failure to repay principal at maturity or the acceleration of the indebtedness under the Charter Holdings notes, Charter Operating notes, the Charter Operating credit facilities or the CC V Holdings or Renaissance indentures could cause a cross-default under our subsidiaries’ and parent companies’ indentures.

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THE EXCHANGE OFFER

Terms of the Exchange Offer

      General. We issued the original notes on September 23, 2003 in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended.

      In connection with the sale of original notes, the holders of the original notes became entitled to the benefits of the exchange and registration rights agreement, dated September 23, 2003, among us and the purchasers.

      Under the exchange and registration rights agreements, we became obligated to file a registration statement in connection with an exchange offer within 90 days after September 23, 2003 and to use our reasonable best efforts to have the exchange offer registration statement declared effective within 210 days after September 23, 2003. The exchange offer being made by this prospectus, if consummated within the required time periods, will satisfy our obligations under the exchange and registration rights agreement. This prospectus, together with the letter of transmittal, is being sent to all beneficial holders of original notes known to us.

      Upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, we will accept for exchange all original notes properly tendered and not withdrawn on or prior to the expiration date. We will issue $1,000 principal amount of new notes in exchange for each $1,000 principal amount of outstanding original notes accepted in the exchange offer. Holders may tender some or all of their original notes pursuant to the exchange offer.

      Based on no-action letters issued by the staff of the Securities and Exchange Commission to third parties, we believe that holders of the new notes issued in exchange for original notes may offer for resale, resell and otherwise transfer the new notes, other than any holder that is an affiliate of ours within the meaning of Rule 405 under the Securities Act of 1933, without compliance with the registration and prospectus delivery provisions of the Securities Act of 1933. This is true as long as the new notes are acquired in the ordinary course of the holders’ business, the holder has no arrangement or understanding with any person to participate in the distribution of the new notes and neither the holder nor any other person is engaging in or intends to engage in a distribution of the new notes. A broker-dealer that acquired original notes directly from us cannot exchange the original notes in the exchange offer. Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the new notes cannot rely on the no-action letters of the staff of the Securities and Exchange Commission and must comply with the registration and prospectus delivery requirements of the Securities Act of 1933 in connection with any resale transaction.

      Each broker-dealer that receives new notes for its own account in exchange for original notes, where original notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. See “Plan of Distribution” for additional information.

      We shall be deemed to have accepted validly tendered original notes when, as and if we have given oral or written notice of the acceptance of such notes to the exchange agent. The exchange agent will act as agent for the tendering holders of original notes for the purposes of receiving the new notes from the issuers and delivering new notes to such holders.

      If any tendered original notes are not accepted for exchange because of an invalid tender or the occurrence of the conditions set forth under “— Conditions” without waiver by us, certificates for any such unaccepted original notes will be returned, without expense, to the tendering holder of any such original notes as promptly as practicable after the expiration date.

      Holders of original notes who tender in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, or transfer taxes with respect to the exchange of original notes, pursuant to the exchange offer. We will pay all charges and expenses, other than certain applicable taxes in connection with the exchange offer. See “— Fees and Expenses.”

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      Shelf Registration Statement. Pursuant to the exchange and registration rights agreement, if the exchange offer is not completed prior to the date on which the earliest of any of the following events occurs:

      (a) existing law or applicable policy or interpretations of the staff of the Securities and Exchange Commission do not permit us to effect the exchange offer,

      (b) any holder of notes notifies us that either:

      (1) such holder is not eligible to participate in the exchange offer, or

      (2) such holder participates in the exchange offer and does not receive freely transferable new notes in exchange for tendered original notes, or

      (c) the exchange offer is not completed within 240 days after September 23, 2003, we will, at our cost:

•  file a shelf registration statement covering resales of the original notes,

•  use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act of 1933 at the earliest possible time, but no later than 90 days after the time such obligation to file arises, and

•  use our reasonable best efforts to keep effective the shelf registration statement until the earlier of two years after the date as of which the Securities and Exchange Commission declares such shelf registration statement effective or the shelf registration otherwise becomes effective, or the time when all of the applicable original notes are no longer outstanding.

      If any of the events described occurs, we will refuse to accept any original notes and will return all tendered original notes.

      We will, if and when we file the shelf registration statement, provide to each holder of the original notes copies of the prospectus which is a part of the shelf registration statement, notify each holder when the shelf registration statement has become effective and take other actions as are required to permit unrestricted resales of the original notes. A holder that sells original notes pursuant to the shelf registration statement generally must be named as a selling security holder in the related prospectus and must deliver a prospectus to purchasers, and such a seller will be subject to civil liability provisions under the Securities Act of 1933 in connection with these sales. A seller of the original notes also will be bound by applicable provisions of the registration rights agreements, including indemnification obligations. In addition, each holder of original notes must deliver information to be used in connection with the shelf registration statement and provide comments on the shelf registration statement in order to have its original notes included in the shelf registration statement and benefit from the provisions regarding any liquidated damages in the registration rights agreement.

      Expiration Date; Extensions; Amendment. We will keep the exchange offer open for not less than 20 business days, or longer if required by applicable law, after the date on which notice of the exchange offer is mailed to the holders of the original notes. The term “expiration date” means the expiration date set forth on the cover page of this prospectus, unless we extend the exchange offer, in which case the term “expiration date” means the latest date to which the exchange offer is extended.

      In order to extend the expiration date, we will notify the exchange agent of any extension by oral or written notice and will issue a public announcement of the extension, each prior to 5:00 p.m., New York City time, on the next business day after the previously scheduled expiration date.

      We reserve the right

      (a) to delay accepting any original notes, to extend the exchange offer or to terminate the exchange offer and not accept original notes not previously accepted if any of the conditions set forth under “— Conditions” shall have occurred and shall not have been waived by us, if permitted to be waived by us, by giving oral or written notice of such delay, extension or termination to the exchange agent, or

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      (b) to amend the terms of the exchange offer in any manner deemed by us to be advantageous to the holders of the original notes.

      Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice. If the exchange offer is amended in a manner determined by us to constitute a material change, we promptly will disclose such amendment in a manner reasonably calculated to inform the holders of the original notes of such amendment. Depending upon the significance of the amendment, we may extend the exchange offer if it otherwise would expire during such extension period.

      Without limiting the manner in which we may choose to make a public announcement of any extension, amendment or termination of the exchange offer, we will not be obligated to publish, advertise, or otherwise communicate any such announcement, other than by making a timely release to an appropriate news agency.

Procedures for Tendering

      To tender in the exchange offer, a holder must complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signatures on the letter of transmittal guaranteed if required by instruction 2 of the letter of transmittal, and mail or otherwise deliver such letter of transmittal or such facsimile or an agent’s message in connection with a book entry transfer, together with the original notes and any other required documents. To be validly tendered, such documents must reach the exchange agent before 5:00 p.m., New York City time, on the expiration date. Delivery of the original notes may be made by book-entry transfer in accordance with the procedures described below. Confirmation of such book-entry transfer must be received by the exchange agent prior to the expiration date.

      The term “agent’s message” means a message, transmitted by a book-entry transfer facility to, and received by, the exchange agent, forming a part of a confirmation of a book-entry transfer, which states that such book-entry transfer facility has received an express acknowledgment from the participant in such book-entry transfer facility tendering the original notes that such participant has received and agrees to be bound by the terms of the letter of transmittal and that we may enforce such agreement against such participant.

      The tender by a holder of original notes will constitute an agreement between such holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal.

      Delivery of all documents must be made to the exchange agent at its address set forth below. Holders may also request their respective brokers, dealers, commercial banks, trust companies or nominees to effect such tender for such holders.

      The method of delivery of original notes and the letter of transmittal and all other required documents to the exchange agent is at the election and risk of the holders. Instead of delivery by mail, it is recommended that holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery to the exchange agent before 5:00 p.m., New York City time, on the expiration date. No letter of transmittal or original notes should be sent to us.

      Only a holder of original notes may tender original notes in the exchange offer. The term “holder” with respect to the exchange offer means any person in whose name original notes are registered on our books on                     , 2004 or any other person who has obtained a properly completed bond power from the registered holder prior to                     , 2004.

      Any beneficial holder whose original notes are registered in the name of its broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on its behalf. If such beneficial holder wishes to tender on its own behalf, such registered holder must, prior to completing and executing the letter of transmittal and delivering its original notes, either make appropriate arrangements to register ownership of

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the original notes in such holder’s name or obtain a properly completed bond power from the registered holder. The transfer of record ownership may take considerable time.

      Signatures on a letter of transmittal or a notice of withdrawal, must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States referred to as an “eligible institution”, unless the original notes are tendered

      (a) by a registered holder who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal or

      (b) for the account of an eligible institution. In the event that signatures on a letter of transmittal or a notice of withdrawal, are required to be guaranteed, such guarantee must be by an eligible institution.

      If the letter of transmittal is signed by a person other than the registered holder of any original notes listed therein, such original notes must be endorsed or accompanied by appropriate bond powers and a proxy which authorizes such person to tender the original notes on behalf of the registered holder, in each case signed as the name or names of the registered holder or holders appear on the original notes.

      If the letter of transmittal or any original notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by us, evidence satisfactory to us of their authority so to act must be submitted with the letter of transmittal.

      All questions as to the validity, form, eligibility, including time of receipt, and withdrawal of the tendered original notes will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all original notes not properly tendered or any original notes our acceptance of which, in the opinion of counsel for us, would be unlawful. We also reserve the right to waive any irregularities or conditions of tender as to particular original notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of original notes must be cured within such time as we shall determine. None of us, the exchange agent or any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of original notes, nor shall any of them incur any liability for failure to give such notification. Tenders of original notes will not be deemed to have been made until such irregularities have been cured or waived. Any original notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost to such holder by the exchange agent to the tendering holders of original notes, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

      In addition, we reserve the right in our sole discretion to

      (a) purchase or make offers for any original notes that remain outstanding subsequent to the expiration date or, as set forth under “— Conditions,” to terminate the exchange offer in accordance with the terms of the registration rights agreement and

      (b) to the extent permitted by applicable law, purchase original notes in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers may differ from the terms of the exchange offer.

      By tendering, each holder will represent to us that, among other things,

      (a) the new notes acquired pursuant to the exchange offer are being obtained in the ordinary course of business of such holder or other person,

      (b) neither such holder nor such other person is engaged in or intends to engage in a distribution of the new notes,

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      (c) neither such holder or other person has any arrangement or understanding with any person to participate in the distribution of such new notes, and

      (d) such holder or other person is not our “affiliate,” as defined under Rule 405 of the Securities Act of 1933, or, if such holder or other person is such an affiliate, will comply with the registration and prospectus delivery requirements of the Securities Act of 1933 to the extent applicable.

      We understand that the exchange agent will make a request promptly after the date of this prospectus to establish accounts with respect to the original notes at The Depository Trust Company for the purpose of facilitating the exchange offer, and subject to the establishment of such accounts, any financial institution that is a participant in The Depository Trust Company’s system may make book-entry delivery of original notes by causing The Depository Trust Company to transfer such original notes into the exchange agent’s account with respect to the original notes in accordance with The Depository Trust Company’s procedures for such transfer. Although delivery of the original notes may be effected through book-entry transfer into the exchange agent’s account at The Depository Trust Company, an appropriate letter of transmittal properly completed and duly executed with any required signature guarantee, or an agent’s message in lieu of the letter of transmittal, and all other required documents must in each case be transmitted to and received or confirmed by the exchange agent at its address set forth below on or prior to the expiration date, or, if the guaranteed delivery procedures described below are complied with, within the time period provided under such procedures. Delivery of documents to The Depository Trust Company does not constitute delivery to the exchange agent.

Guaranteed Delivery Procedures

      Holders who wish to tender their original notes and

      (a) whose original notes are not immediately available or

      (b) who cannot deliver their original notes, the letter of transmittal or any other required documents to the exchange agent prior to the expiration date, may effect a tender if:

      (1) The tender is made through an eligible institution;

      (2) prior to the expiration date, the exchange agent receives from such eligible institution a properly completed and duly executed Notice of Guaranteed Delivery, by facsimile transmission, mail or hand delivery, setting forth the name and address of the holder of the original notes, the certificate number or numbers of such original notes and the principal amount of original notes tendered, stating that the tender is being made thereby, and guaranteeing that, within three business days after the expiration date, the letter of transmittal, or facsimile thereof or agent’s message in lieu of the letter of transmittal, together with the certificate(s) representing the original notes to be tendered in proper form for transfer and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and

      (3) such properly completed and executed letter of transmittal (or facsimile thereof) together with the certificate(s) representing all tendered original notes in proper form for transfer and all other documents required by the letter of transmittal are received by the exchange agent within three business days after the expiration date.

Withdrawal of Tenders

      Except as otherwise provided in this prospectus, tenders of original notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date. However, where the expiration date has been extended, tenders of original notes previously accepted for exchange as of the original expiration date may not be withdrawn.

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      To withdraw a tender of original notes in the exchange offer, a written or facsimile transmission notice of withdrawal must be received by the exchange agent as its address set forth in this prospectus prior to 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must:

      (a) specify the name of the depositor, who is the person having deposited the original notes to be withdrawn,

      (b) identify the original notes to be withdrawn, including the certificate number or numbers and principal amount of such original notes or, in the case of original notes transferred by book-entry transfer, the name and number of the account at The Depository Trust Company to be credited,

      (c) be signed by the depositor in the same manner as the original signature on the letter of transmittal by which such original notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee with respect to the original notes register the transfer of such original notes into the name of the depositor withdrawing the tender, and

      (d) Specify the name in which any such original notes are to be registered, if different from that of the depositor. All questions as to the validity, form and eligibility, including time of receipt, of such withdrawal notices will be determined by us, and our determination shall be final and binding on all parties. Any original notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer and no new notes will be issued with respect to the original notes withdrawn unless the original notes so withdrawn are validly retendered. Any original notes which have been tendered but which are not accepted for exchange will be returned to its holder without cost to such holder as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn original notes may be retendered by following one of the procedures described above under “— Procedures for Tendering” at any time prior to the expiration date.

Conditions

      Notwithstanding any other term of the exchange offer, we will not be required to accept for exchange, or exchange, any new notes for any original notes, and may terminate or amend the exchange offer before the expiration date, if the exchange offer violates any applicable law or interpretation by the staff of the Securities and Exchange Commission.

      If we determine in our reasonable discretion that the foregoing condition exists, we may

      (1) refuse to accept any original notes and return all tendered original notes to the tendering holders,

      (2) extend the exchange offer and retain all original notes tendered prior to the expiration of the exchange offer, subject, however, to the rights of holders who tendered such original notes to withdraw their tendered original notes, or

      (3) waive such condition, if permissible, with respect to the exchange offer and accept all properly tendered original notes which have not been withdrawn. If such waiver constitutes a material change to the exchange offer, we will promptly disclose such waiver by means of a prospectus supplement that will be distributed to the holders, and we will extend the exchange offer as required by applicable law.

Exchange Agent

      Wells Fargo Bank, N.A. has been appointed as exchange agent for the exchange offer. Questions and requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal should be directed to Wells Fargo addressed as follows:

For Information by Telephone:

800-344-5128

Wells Fargo Bank, N.A.

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By Regular Mail or Overnight Courier:
Wells Fargo Bank, N.A.
MAC#N9303-121
Corporate Trust Operations
6th and Marquette Avenue
Minneapolis, MN 55479 By Hand:
Wells Fargo Bank, N.A.
608 Second Avenue South
Corporate Operations, 12th floor
Minneapolis, MN 55402

By Registered/Certified Mail:

Wells Fargo Bank, N.A.

MAC#N9303-121

Corporate Trust Operations

P.O. Box 1517

Minneapolis, MN 55480-1517

By Facsimile Transmission:

612-667-9825

(Telephone Confirmation)

800-344-5128

Fees and Expenses

      We have agreed to bear the expenses of the exchange offer pursuant to the exchange and registration rights agreement. We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. We, however, will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection with providing the services.

      The cash expenses to be incurred in connection with the exchange offer will be paid by us. Such expenses include fees and expenses of Wells Fargo Bank, National Association as exchange agent, accounting and legal fees and printing costs, among others.

Accounting Treatment

      The new notes will be recorded at the same carrying value as the original notes as reflected in our accounting records on the date of exchange. Accordingly, no gain or loss for accounting purposes will be recognized by us. The expenses of the exchange offer and the unamortized expenses related to the issuance of the original notes will be amortized over the term of the notes.

Consequences of Failure to Exchange

      Holders of original notes who are eligible to participate in the exchange offer but who do not tender their original notes will not have any further registration rights, and their original notes will continue to be subject to restrictions on transfer. Accordingly, such original notes may be resold only

•  to us, upon redemption of these notes or otherwise,

•  so long as the original notes are eligible for resale pursuant to Rule 144A under the Securities Act of 1933, to a person inside the United States whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A,

•  in accordance with Rule 144 under the Securities Act of 1933, or under another exemption from the registration requirements of the Securities Act of 1933, and based upon an opinion of counsel reasonably acceptable to us,

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•  outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 under the Securities Act of 1933, or

•  under an effective registration statement under the Securities Act of 1933,

in each case in accordance with any applicable securities laws of any state of the United States.

Regulatory Approvals

      We do not believe that the receipt of any material federal or state regulatory approval will be necessary in connection with the exchange offer, other than the effectiveness of the exchange offer registration statement under the Securities Act of 1933.

Other

      Participation in the exchange offer is voluntary and holders of original notes should carefully consider whether to accept the terms and condition of this exchange offer. Holders of the original notes are urged to consult their financial and tax advisors in making their own decision on what action to take with respect to the exchange offer.

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DESCRIPTION OF NOTES

      This description of notes relates to the 10.25% senior notes due 2010 (the “Notes”) of CCH II, LLC and CCH II Capital Corp. We refer to CCH II, LLC and CCH II Capital Corp., which are the co-obligors with respect to the Notes, as the Issuers, and we sometimes refer to them each as an “Issuer.” We may also refer to CCH II, LLC as “CCH II.” You can find the definitions of certain terms used in this description under the subheading “Certain Definitions.”

      The original Notes were and the new Notes will be issued under an indenture, dated on or about the Issue Date (the “Indenture”), among the Issuers and Wells Fargo Bank, National Association, as trustee. The original Notes were issued in a private transaction that was not subject to the registration requirements of the Securities Act of 1933. See “Notice to Investors.” The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939.

      The form and terms of the new Notes will be the same in all material respects as to the form and terms of the original Notes, except that the new Notes will have been registered under the Securities Act of 1933 and, therefore, will not bear legends restricting their transfer and will not provide for additional interest in connection with registration defaults. The original notes have not been registered under the Securities Act of 1933 and are subject to certain transfer restrictions. Any original Notes remaining outstanding after the exchange offer shall be treated as a single class of securities with the new Notes.

      The following description is a summary of the provisions we consider material of the Indenture and the exchange and registration rights agreement with respect to the Notes, dated the Issue Date, among the Issuers and the purchasers. It does not restate those agreements in their entirety. We urge you to read the Indenture and the exchange and registration rights agreement because they, and not this description, define your rights as holders of the respective Notes. Copies of the proposed forms of the Indenture and the exchange and registration rights agreement are available as set forth under “— Additional Information.”

Brief Description of the Notes

      The Notes are:

•  general unsecured obligations of the Issuers;

•  effectively subordinated to any future secured Indebtedness of the Issuers, to the extent of the value of the assets securing such Indebtedness;

•  equal in right of payment to any future unsubordinated, unsecured Indebtedness of the Issuers;

•  structurally senior to the outstanding senior notes and senior discount notes of Charter Holdings and the outstanding convertible senior notes of Charter Communications, Inc.;

•  senior in right of payment to any future subordinated Indebtedness of the Issuers; and

•  structurally subordinated to all indebtedness and other liabilities (including trade payables) of the Issuers’ subsidiaries, including indebtedness under our subsidiaries’ credit facilities and the senior notes of CCO Holdings.

      At December 31, 2003, after giving effect to the issuance and sale of the CCO Holdings senior notes and the application of the net proceeds therefrom to repay subsidiary revolving credit indebtedness, as if those transactions had occurred on that date, the outstanding Indebtedness of CCH II and its subsidiaries would have totaled approximately $9.6 billion, approximately $8.0 billion of which would have been Indebtedness of CCH II’s Subsidiaries and, therefore, structurally senior to the Notes.

      As of the Issue Date, all the Subsidiaries of CCH II (except CCOH Sub, LLC and CCO NR Sub, LLC) were “Restricted Subsidiaries.” Under the circumstances described below under “— Certain Covenants — Investments,” CCH II will be permitted to designate additional Subsidiaries as “Unrestricted

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Subsidiaries.” Unrestricted Subsidiaries will generally not be subject to the restrictive covenants in the Indenture.

Principal, Maturity and Interest

      The new Notes will be issued in denominations of $1,000 and integral multiples of $1,000. The Notes will mature on September 15, 2010.

      Interest on the new Notes will accrue at the rate of 10.25% per year. Interest on the new Notes will accrue from March 15, 2004, the date on which interest was most recently paid. Interest will be payable semi-annually in arrears on March 15 and September 15, commencing on September 15, 2004. The Issuers will make each interest payment to the holders of record of the Notes on the immediately preceding March 1 and September 1. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

      The original Notes were issued initially in the aggregate principal amount of approximately $1.6 billion. Subject to the limitations set forth under “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock,” the Issuers may issue an unlimited principal amount of Additional Notes under the Indenture. The Notes and any Additional Notes subsequently issued under the Indenture, would be treated as a single class of securities for all purposes of the Indenture. For purposes of this description, unless otherwise indicated, references to the Notes include the Notes issued on the Issue Date and any Additional Notes subsequently issued under the Indenture.

Optional Redemption

      At any time prior to September 15, 2006, the Issuers may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of the Notes on a pro rata basis (or nearly as pro rata as practicable), at a redemption price of 110.25% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Equity Offerings; provided that

      (1) at least 65% of the aggregate principal amount of the Notes remain outstanding immediately after the occurrence of such redemption (excluding Notes held by the Issuers and their Subsidiaries), and

      (2) the redemption must occur within 60 days of the date of the closing of such Equity Offering.

      Except pursuant to the preceding paragraph, the Notes will not be redeemable at the option of the Issuers prior to September 15, 2008.

      On or after September 15, 2008, the Issuers may redeem all or a part of the Notes upon not less than 30 nor more than 60 days notice, at the redemption prices (expressed as percentages of principal amount of the Notes) set forth below plus accrued and unpaid interest thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on September 15 of the years indicated below:

Year	Percentage
2008		105.125%
2009 and thereafter		100.000%

Repurchase at the Option of Holders

Change of Control

      If a Change of Control occurs, each holder of Notes will have the right to require the Issuers to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of that holder’s Notes pursuant to a “Change of Control Offer.” In the Change of Control Offer, the Issuers will offer a “Change of Control Payment” in cash equal to 101% of the aggregate principal amount of the Notes repurchased plus accrued and unpaid interest thereon, if any, to the date of purchase.

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      Within ten days following any Change of Control, the Issuers will mail a notice to each holder (with a copy to the trustee) describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on a certain date (the “Change of Control Payment Date”) specified in such notice, pursuant to the procedures required by the Indenture and described in such notice. The Issuers will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934 or any successor rules, and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this covenant, the Issuers’ compliance with such laws and regulations shall not in and of itself cause a breach of their obligations under such covenant.

      On the Change of Control Payment Date, the Issuers will, to the extent lawful:

      (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

      (2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and

      (3) deliver or cause to be delivered to the trustee the Notes so accepted together with an officers’ certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Issuers.

      The paying agent will promptly mail to each holder of Notes so tendered the Change of Control Payment for such Notes, and the trustee will promptly authenticate and mail, or cause to be transferred by book entry, to each holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof.

      The provisions described above that require the Issuers to make a Change of Control Offer following a Change of Control will be applicable regardless of whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture will not contain provisions that permit the holders of the Notes to require that the Issuers repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.

      The Issuers will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuers and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

      The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the assets of CCH II and its Subsidiaries, taken as a whole, or of a Parent and its Subsidiaries, taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of Notes to require the Issuers to repurchase Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of CCH II and its Subsidiaries, taken as a whole, or of a Parent and its Subsidiaries, taken as a whole, to another Person or group may be uncertain.

Asset Sales

      CCH II will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

      (1)     CCH II or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;

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      (2)     such fair market value is determined by the Board of Directors of CCH II and evidenced by a resolution of such Board of Directors set forth in an officers’ certificate delivered to the trustee; and

      (3)     at least 75% of the consideration therefor received by CCH II or such Restricted Subsidiary is in the form of cash, Cash Equivalents or readily marketable securities.

      For purposes of this provision, each of the following shall be deemed to be cash:

      (a) any liabilities (as shown on CCH II’s or such Restricted Subsidiary’s most recent balance sheet) of CCH II or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases CCH II or such Restricted Subsidiary from further liability;

      (b) any securities, notes or other obligations received by CCH II or any such Restricted Subsidiary from such transferee that are converted by the recipient thereof into cash, Cash Equivalents or readily marketable securities within 60 days after receipt thereof (to the extent of the cash, Cash Equivalents or readily marketable securities received in that conversion); and

      (c) Productive Assets.

      Within 365 days after the receipt of any Net Proceeds from an Asset Sale, CCH II or a Restricted Subsidiary of CCH II may apply such Net Proceeds at its option:

      (1) to repay debt under the Credit Facilities or any other Indebtedness of the Restricted Subsidiaries of CCH II (other than Indebtedness represented by a guarantee of a Restricted Subsidiary of CCH II); or

      (2) to invest in Productive Assets; provided that any such amount of Net Proceeds which CCH II or a Restricted Subsidiary has committed to invest in Productive Assets within 365 days of the applicable Asset Sale may be invested in Productive Assets within two years of such Asset Sale.

      The amount of any Net Proceeds received from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds $25 million, CCH II will make an Asset Sale Offer to all holders of Notes and all holders of other Indebtedness that is of equal priority with the Notes containing provisions requiring offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other Indebtedness of equal priority that may be purchased out of the Excess Proceeds, which amount includes the entire amount of the Net Proceeds. The offer price in any Asset Sale Offer will be payable in cash and equal to 100% of the principal amount of the subject Notes plus accrued and unpaid interest, if any, to the date of purchase. If the aggregate principal amount of Notes and such other Indebtedness of equal priority tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the trustee shall select the Notes and such other Indebtedness of equal priority to be purchased on a pro rata basis.

      If any Excess Proceeds remain after consummation of an Asset Sale Offer, then CCH II or any Restricted Subsidiary thereof may use such remaining Excess Proceeds for any purpose not otherwise prohibited by the Indenture. Upon completion of any Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

Selection and Notice

      If less than all of the Notes are to be redeemed at any time, the trustee will select Notes for redemption as follows:

      (1) if any Notes are listed, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

      (2) if the Notes are not so listed, on a pro rata basis, by lot or by such method as the trustee shall deem fair and appropriate.

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      No Notes of $1,000 principal amount or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of Notes to be redeemed at its registered address. Notices of redemption may not be conditional.

      If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the holder thereof upon cancellation of the original Note. Notes called for redemption become irrevocably due and payable on the date fixed for redemption at the redemption price. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.

Certain Covenants

      Set forth in this section are summaries of certain covenants contained in the Indenture.

      During any period of time that (a) any Notes have Investment Grade Ratings from both Rating Agencies and (b) no Default or Event of Default has occurred and is continuing under the Indenture, CCH II and the Restricted Subsidiaries of CCH II will not be subject to the provisions of the Indenture described under:

•  “— Repurchase at the Option of Holders — Asset Sales,”

•  “— Restricted Payments,”

•  “— Investments,”

•  “— Incurrence of Indebtedness and Issuance of Preferred Stock,”

•  “— Dividend and Other Payment Restrictions Affecting Subsidiaries,”

•  clause (D) of the first paragraph of “— Merger, Consolidation, or Sale of Assets,”

•  “— Transactions with Affiliates” and

•  “— Sale and Leaseback Transactions.”

      If CCH II and its Restricted Subsidiaries are not subject to these covenants for any period of time as a result of the previous sentence and, subsequently, one, or both, of the Rating Agencies withdraws its ratings or downgrades the ratings assigned to the applicable Notes below the required Investment Grade Ratings or a Default or Event of Default occurs and is continuing, then CCH II and its Restricted Subsidiaries will thereafter again be subject to these covenants. The ability of CCH II and its Restricted Subsidiaries to make Restricted Payments after the time of such withdrawal, downgrade, Default or Event of Default will be calculated as if the covenant governing Restricted Payments had been in effect during the entire period of time from the Issue Date.

Restricted Payments

      CCH II will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

      (1) declare or pay any dividend or make any other payment or distribution on account of its or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving CCH II or any of its Restricted Subsidiaries) or to the direct or indirect holders of CCH II’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable (x) solely in Equity Interests (other than Disqualified Stock) of CCH II or (y), in the case of CCH II and its Restricted Subsidiaries, to CCH II or a Restricted Subsidiary thereof);

      (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving CCH II or any of its Restricted Subsidiaries) any Equity Interests of CCH II or any direct or indirect Parent of CCH II or any Restricted Subsidiary of

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CCH II (other than, in the case of CCH II and its Restricted Subsidiaries, any such Equity Interests owned by CCH II or any of its Restricted Subsidiaries); or

      (3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness of CCH II that is subordinated to the Notes, except a payment of interest or principal at the Stated Maturity thereof

(all such payments and other actions set forth in clauses (1) through (3) above are collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:

      (1) no Default or Event of Default under the Indenture shall have occurred and be continuing or would occur as a consequence thereof; and

      (2) CCH II would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”; and

      (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by CCH II and its Restricted Subsidiaries from and after the Issue Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7), (8) and (10) of the next succeeding paragraph), shall not exceed, at the date of determination, the sum of:

      (a) an amount equal to 100% of the Consolidated EBITDA of CCH II for the period beginning on the first day of the fiscal quarter commencing July 1, 2003 to the end of CCH II’s most recently ended full fiscal quarter for which internal financial statements are available, taken as a single accounting period, less the product of 1.3 times the Consolidated Interest Expense of CCH II for such period, plus

      (b) an amount equal to 100% of Capital Stock Sale Proceeds less any amount of such Capital Stock Sale Proceeds used in connection with an Investment made on or after the Issue Date pursuant to clause (5) of the definition of “Permitted Investments,” plus

      (c) $100 million.

      So long as no Default under the Indenture has occurred and is continuing or would be caused thereby, the preceding provisions will not prohibit:

      (1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture;

      (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of CCH II in exchange for, or out of the net proceeds of, the substantially concurrent sale (other than to a Subsidiary of CCH II) of Equity Interests of CCH II (other than Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph;

      (3) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of CCH II or any of its Restricted Subsidiaries with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

      (4) regardless of whether a Default then exists, the payment of any dividend or distribution to the extent necessary to permit direct or indirect beneficial owners of shares of Capital Stock of CCH II to pay federal, state or local income tax liabilities that would arise solely from income of CCH II or any of its Restricted Subsidiaries, as the case may be, for the relevant taxable period and attributable to them solely as a result of CCH II (and any intermediate entity through which the holder owns such shares) or any of

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its Restricted Subsidiaries being a limited liability company, partnership or similar entity for federal income tax purposes;

      (5) regardless of whether a Default then exists, the payment of any dividend by a Restricted Subsidiary of CCH II to the holders of its common Equity Interests on a pro rata basis;

      (6) the payment of any dividend on the Helicon Preferred Stock or the redemption, repurchase, retirement or other acquisition of the Helicon Preferred Stock in an amount not in excess of its aggregate liquidation value;

      (7) the repurchase, redemption or other acquisition or retirement for value, or the payment of any dividend or distribution to the extent necessary to permit the repurchase, redemption or other acquisition or retirement for value, of any Equity Interests of CCH II or a Parent of CCH II held by any member of CCH II’s or such Parent’s management pursuant to any management equity subscription agreement or stock option agreement entered into in accordance with the policies of CCH II or any Parent; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $10 million in any fiscal year of CCH II;

      (8) payment of fees in connection with any acquisition, merger or similar transaction in an amount that does not exceed an amount equal to 1.25% of the transaction value of such acquisition, merger or similar transaction;

      (9) additional dividends and distributions directly or indirectly to CCH II or any Parent (i) regardless of whether a Default exists (other than a Default described in paragraphs (1), (2), (7) or (8) under the caption “Events of Default and Remedies”), for the purpose of enabling Charter Holdings, and/or any Charter Refinancing Subsidiary to pay interest when due on Indebtedness under the Charter Holdings Indentures, and/or any Charter Refinancing Indebtedness, (ii) for the purpose of enabling CCI and/or any Charter Refinancing Subsidiary to pay interest when due on Indebtedness under the CCI Indentures and/or any Charter Refinancing Indebtedness and (iii) so long as CCH II would have been permitted, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable quarter period, to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock,” to the extent required to enable Charter Holdings, CCI or any Charter Refinancing Subsidiary to defease, redeem, repurchase, prepay, repay, discharge or otherwise acquire or retire for value Indebtedness under the Charter Holdings Indentures, the CCI Indentures or any Charter Refinancing Indebtedness; and

      (10) dividends or distributions to any Parent to consummate the Private Exchanges.

      The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by CCH II or any of its Restricted Subsidiaries pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant shall be determined by the Board of Directors of CCH II, whose resolution with respect thereto shall be delivered to the trustee. Such Board of Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the fair market value exceeds $100 million.

      Not later than the date of making any Restricted Payment involving an amount or fair market value in excess of $10 million, the Issuers shall deliver to the trustee an officers’ certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this “Restricted Payments” covenant were computed, together with a copy of any fairness opinion or appraisal required by the Indenture.

Investments

      CCH II will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

      (1) make any Restricted Investment; or

      (2) allow any of its Restricted Subsidiaries to become an Unrestricted Subsidiary,

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unless, in each case:

      (a) no Default or Event of Default under the Indenture shall have occurred and be continuing or would occur as a consequence thereof; and

      (b) CCH II would, at the time of, and after giving effect to, such Restricted Investment or such designation of a Restricted Subsidiary as an Unrestricted Subsidiary, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the applicable Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock.”

      An Unrestricted Subsidiary may be redesignated as a Restricted Subsidiary if such redesignation would not cause a Default.

Incurrence of Indebtedness and Issuance of Preferred Stock

      CCH II will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt) and CCH II will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock, provided that CCH II or any of its Restricted Subsidiaries may incur Indebtedness, CCH II may issue Disqualified Stock and subject to the final paragraph of this covenant below, Restricted Subsidiaries of CCH II may incur Preferred Stock if the Leverage Ratio of CCH II and its Restricted Subsidiaries would have been not greater than 5.5 to 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, at the beginning of the most recently ended fiscal quarter.

      So long as no Default under the Indenture shall have occurred and be continuing or would be caused thereby, the first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

      (1) the incurrence by CCH II and its Restricted Subsidiaries of Indebtedness under the Credit Facilities; provided that the aggregate principal amount of all Indebtedness of CCH II and its Restricted Subsidiaries outstanding under this clause (1) for all Credit Facilities of CCH II and its Restricted Subsidiaries after giving effect to such incurrence does not exceed an amount equal to $9.75 billion less the aggregate amount of all Net Proceeds from Asset Sales applied by CCH II or any of its Restricted Subsidiaries to repay Indebtedness under a Credit Facility pursuant to the covenant described under “— Repurchase at the Option of Holders — Asset Sales;”

      (2) the incurrence by CCH II and its Restricted Subsidiaries of Existing Indebtedness (other than under the Credit Facilities);

      (3) the incurrence on the Issue Date by CCH II and its Restricted Subsidiaries of Indebtedness represented by the Notes (other than any Additional Notes);

      (4) the incurrence by CCH II or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement (including, without limitation, the cost of design, development, construction, acquisition, transportation, installation, improvement, and migration) of Productive Assets of CCH II or any of its Restricted Subsidiaries in an aggregate principal amount not to exceed $75 million at any time outstanding pursuant to this clause (4);

      (5) the incurrence by CCH II or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, in whole or in part, Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred under this clause (5), the first paragraph of this covenant or clauses (2) or (3) of this paragraph;

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      (6) the incurrence by CCH II or any of its Restricted Subsidiaries of intercompany Indebtedness between or among CCH II and any of its Restricted Subsidiaries; provided that:

      (a) if CCH II is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes; and

      (b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than CCH II or a Restricted Subsidiary of CCH II and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either CCH II or a Restricted Subsidiary of CCH II, shall be deemed, in each case, to constitute an incurrence of such Indebtedness that was not permitted by this clause (6);

      (7) the incurrence by CCH II or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the Indenture to be outstanding;

      (8) the guarantee by CCH II or any of its Restricted Subsidiaries of Indebtedness of a Restricted Subsidiary that was permitted to be incurred by another provision of this covenant;

      (9) the incurrence by CCH II or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding under this clause (9), not to exceed $300 million; and

      (10) the accretion or amortization of original issue discount and the write up of Indebtedness in accordance with purchase accounting.

      For purposes of determining compliance with this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, any Indebtedness under Credit Facilities outstanding on the Issue Date shall be deemed to have been incurred pursuant to clause (1) above and, in the event that an item of proposed Indebtedness (other than any Indebtedness initially deemed on the Issue Date to be incurred under clause (1) above) (a) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (10) above or (b) is entitled to be incurred pursuant to the first paragraph of this covenant, CCH II will be permitted to classify and from time to time to reclassify such item of Indebtedness in any manner that complies with this covenant. Once any item of Indebtedness is so reclassified, it will no longer be deemed outstanding under the category of Permitted Debt, where initially incurred or previously reclassified. For avoidance of doubt, Indebtedness incurred pursuant to a single agreement, instrument, program, facility or line of credit may be classified as Indebtedness arising in part under one of the clauses listed above or under the first paragraph of this covenant, and in part under any one or more of the clauses listed above, to the extent that such Indebtedness satisfies the criteria for such classification.

      Notwithstanding the foregoing, in no event shall any Restricted Subsidiary of CCH II consummate a Subordinated Debt Financing or a Preferred Stock Financing. A “Subordinated Debt Financing” or a “Preferred Stock Financing,” as the case may be, with respect to any Restricted Subsidiary of CCH II shall mean a public offering or private placement (whether pursuant to Rule 144A under the Securities Act or otherwise) of Subordinated Notes or Preferred Stock (whether or not such Preferred Stock constitutes Disqualified Stock), as the case may be, of such Restricted Subsidiary to one or more purchasers (other than to one or more Affiliates of CCH II). “Subordinated Notes” with respect to any Restricted Subsidiary of CCH II shall mean Indebtedness of such Restricted Subsidiary that is contractually subordinated in right of payment to any other Indebtedness of such Restricted Subsidiary (including, without limitation, Indebtedness under the Credit Facilities). The foregoing limitation shall not apply to

      (a) any Indebtedness or Preferred Stock of any Person existing at the time such Person is merged with or into or becomes a Subsidiary of CCH II; provided that such Indebtedness or Preferred Stock was not incurred or issued in connection with, or in contemplation of, such Person merging with or into, or becoming a Subsidiary of, CCH II, and

      (b) any Indebtedness or Preferred Stock of a Restricted Subsidiary issued in connection with, and as part of the consideration for, an acquisition, whether by stock purchase, asset sale, merger or otherwise, in each case involving such Restricted Subsidiary, which Indebtedness or Preferred Stock is

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issued to the seller or sellers of such stock or assets; provided that such Restricted Subsidiary is not obligated to register such Indebtedness or Preferred Stock under the Securities Act or obligated to provide information pursuant to Rule 144A under the Securities Act.

Liens

      The Indenture provides that CCH II will not, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind securing Indebtedness, Attributable Debt or trade payables on any asset of CCH II, whether owned on the Issue Date or thereafter acquired, except Permitted Liens.

Dividend and Other Payment Restrictions Affecting Subsidiaries

      CCH II will not, directly or indirectly, create or permit to exist or become effective any encumbrance or restriction on the ability of any of its Restricted Subsidiaries to:

      (1) pay dividends or make any other distributions on its Capital Stock to CCH II or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to CCH II or any of its Restricted Subsidiaries;

      (2) make loans or advances to CCH II or any of its Restricted Subsidiaries; or

      (3) transfer any of its properties or assets to CCH II or any of its Restricted Subsidiaries.

      However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

      (1) Existing Indebtedness as in effect on the Issue Date (including, without limitation, the Indebtedness under any of the Credit Facilities, including the Vulcan Backstop Facility, and only with respect to the Vulcan Backstop Facility, whether or not any Indebtedness is outstanding on the Issue Date) and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the most restrictive Existing Indebtedness, as in effect on the Issue Date, including the Vulcan Backstop Facility;

      (2) the Indenture and the Notes;

      (3) applicable law;

      (4) any instrument governing Indebtedness or Capital Stock of a Person acquired by CCH II or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;

      (5) customary non-assignment provisions in leases, franchise agreements and other commercial agreements entered into in the ordinary course of business and consistent with past practices;

      (6) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (3) of the preceding paragraph;

      (7) any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by such Restricted Subsidiary pending its sale or other disposition;

      (8) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

      (9) Liens securing Indebtedness or other obligations otherwise permitted to be incurred pursuant to the provisions of the covenant described above under the caption “— Liens” that limit the right of CCH II or any of its Restricted Subsidiaries to dispose of the assets subject to such Lien;

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      (10) provisions with respect to the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business;

      (11) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

      (12) restrictions contained in the terms of Indebtedness permitted to be incurred under the covenant described under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”; provided that such restrictions are no more restrictive, taken as a whole, than the terms contained in the most restrictive, together or individually, of the Credit Facilities as in effect on the Issue Date; and

      (13) restrictions that are not materially more restrictive, taken as a whole, than customary provisions in comparable financings and that the management of CCH II determines, at the time of such financing, will not materially impair the Issuers’ ability to make payments as required under the Notes.

Merger, Consolidation or Sale of Assets

      Neither Issuer may, directly or indirectly, (1) consolidate or merge with or into another Person (whether or not such Issuer is the surviving Person) or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to another Person; unless:

      (A) either:

      (i) such Issuer is the surviving Person; or

      (ii) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a Person organized or existing under the laws of the United States, any state thereof or the District of Columbia, provided that if the Person formed by or surviving any such consolidation or merger with such Issuer is a limited liability company or a Person other than a corporation, a corporate co-issuer shall also be an obligor with respect to the Notes;

      (B) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of such Issuer under the Notes and the Indenture pursuant to agreements reasonably satisfactory to the trustee;

      (C) immediately after such transaction no Default or Event of Default exists; and

      (D) such Issuer or the Person formed by or surviving any such consolidation or merger (if other than such Issuer) will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period,

      (x) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock;” or

      (y) have a Leverage Ratio immediately after giving effect to such consolidation or merger no greater than the Leverage Ratio immediately prior to such consolidation or merger.

      In addition, neither of the Issuers may, directly or indirectly, lease all or substantially all of their properties or assets, in one or more related transactions, to any other Person. The foregoing clause (D) of this “Merger, Consolidation, or Sale of Assets” covenant will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among an Issuer and any of its Wholly Owned Restricted Subsidiaries or to the consummation of the Private Exchanges.

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Transactions with Affiliates

      CCH II will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an “Affiliate Transaction”), unless:

      (1) such Affiliate Transaction is on terms that are no less favorable to CCH II or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by CCH II or such Restricted Subsidiary with an unrelated Person; and

      (2) CCH II delivers to the trustee:

      (a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration given or received by CCH II or any such Restricted Subsidiary in excess of $15 million, a resolution of the Board of Directors of CCH II set forth in an officers’ certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the members of such Board of Directors; and

      (b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration given or received by CCH II or any such Restricted Subsidiary in excess of $50 million, an opinion as to the fairness to the holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

      The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

      (1) any existing employment agreement entered into by CCH II or any of its Subsidiaries and any employment agreement entered into by CCH II or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of CCH II or such Restricted Subsidiary;

      (2) transactions between or among CCH II and/or its Restricted Subsidiaries;

      (3) payment of reasonable directors fees to Persons who are not otherwise Affiliates of CCH II, and customary indemnification and insurance arrangements in favor of directors, regardless of affiliation with CCH II or any of its Restricted Subsidiaries;

      (4) payment of Management Fees;

      (5) Restricted Payments that are permitted by the provisions of the covenant described above under the caption “— Restricted Payments” and Restricted Investments that are permitted by the provisions of the covenant described above under the caption “— Investments”;

      (6) Permitted Investments;

      (7) the transactions contemplated by the Vulcan Backstop Facility on substantially the same terms as described in Charter’s quarterly report on Form 10-Q for its fiscal quarter ended June 30, 2003 with respect to the commitment letter; and

      (8) transactions pursuant to agreements existing on the Issue Date, as in effect on the Issue Date, or as subsequently modified, supplemented, or amended, to the extent that any such modifications, supplements, or amendments complied with the applicable provisions of the first paragraph of this covenant.

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Sale and Leaseback Transactions

      CCH II will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that CCH II and its Restricted Subsidiaries may enter into a sale and leaseback transaction if:

      (1) CCH II or such Restricted Subsidiary could have

      (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under the Leverage Ratio test in the first paragraph of the covenant described above under the caption “— Incurrence of Additional Indebtedness and Issuance of Preferred Stock”; and

      (b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption “— Liens” or the definition of “Permitted Liens”; and

      (2) the transfer of assets in that sale and leaseback transaction is permitted by, and CCH II or such Restricted Subsidiary applies the proceeds of such transaction in compliance with, the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales.”

      The foregoing restrictions do not apply to a sale and leaseback transaction if the lease is for a period, including renewal rights, of not in excess of three years.

Limitations on Issuances of Guarantees of Indebtedness

      CCH II will not permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of CCH II, except in respect of the Credit Facilities (the “Guaranteed Indebtedness”), unless

      (1) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee (a “Subsidiary Guarantee”) of the payment of the Notes by such Restricted Subsidiary, and

      (2) until one year after all the Notes have been paid in full in cash, such Restricted Subsidiary waives and will not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against CCH II or any other Restricted Subsidiary of CCH II as a result of any payment by such Restricted Subsidiary under its Subsidiary Guarantee; provided that this paragraph shall not be applicable to any Guarantee or any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

      If the Guaranteed Indebtedness is subordinated to the Notes, then the Guarantee of such Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee at least to the extent that the Guaranteed Indebtedness is subordinated to the Notes.

Payments for Consent

      CCH II will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid and is paid to all holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

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Reports

      Whether or not required by the Securities and Exchange Commission, so long as any Notes are outstanding, the Issuers will furnish to the holders of the Notes, within the time periods specified in the Securities and Exchange Commission’s rules and regulations:

      (1) all quarterly and annual financial information that would be required to be contained in a filing with the Securities and Exchange Commission on Forms 10-Q and 10-K if the Issuers were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and, with respect to the annual information only, a report on the annual consolidated financial statements of CCH II by its independent public accountants; and

      (2) all current reports that would be required to be filed with the Securities and Exchange Commission on Form 8-K if the Issuers were required to file such reports.

      If CCH II has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of CCH II and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of CCH II.

      In addition, after consummation of the exchange offer, whether or not required by the Securities and Exchange Commission, the Issuers will file a copy of all of the information and reports referred to in clauses (1) and (2) above with the Securities and Exchange Commission for public availability within the time periods specified in the Securities and Exchange Commission’s rules and regulations, unless the Securities and Exchange Commission will not accept such a filing, and make such information available to securities analysts and prospective investors upon request.

Events of Default and Remedies

      Each of the following is an Event of Default with respect to the Notes:

      (1) default for 30 days in the payment when due of interest on the Notes;

      (2) default in payment when due of the principal of or premium, if any, on the Notes;

      (3)     failure by CCH II or any of its Restricted Subsidiaries to comply with the provisions of the Indenture described under the captions “— Repurchase at the Option of Holders — Change of Control” or “— Certain Covenants — Merger, Consolidation, or Sale of Assets”;

      (4) failure by CCH II or any of its Restricted Subsidiaries for 30 days after written notice thereof has been given to the Issuers by the trustee or to the Issuers and the trustee by holders of at least 25% of the aggregate principal amount of the Notes outstanding to comply with any of their other covenants or agreements in the Indenture;

      (5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by CCH II or any of its Restricted Subsidiaries (or the payment of which is guaranteed by CCH II or any of its Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the Issue Date, if that default:

      (a) is caused by a failure to pay at final stated maturity the principal amount on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or

      (b) results in the acceleration of such Indebtedness prior to its express maturity,

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and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $100 million or more;

      (6) failure by CCH II or any of its Restricted Subsidiaries to pay final judgments which are non-appealable aggregating in excess of $100 million, net of applicable insurance which has not been denied in writing by the insurer, which judgments are not paid, discharged or stayed for a period of 60 days; and

      (7) CCH II or any of its Significant Subsidiaries pursuant to or within the meaning of bankruptcy law:

      (a) commences a voluntary case,

      (b) consents to the entry of an order for relief against it in an involuntary case,

      (c) consents to the appointment of a custodian of it or for all or substantially all of its property, or

      (d) makes a general assignment for the benefit of its creditors; or

      (8) a court of competent jurisdiction enters an order or decree under any bankruptcy law that:

      (a) is for relief against CCH II or any of its Significant Subsidiaries in an involuntary case;

      (b) appoints a custodian of CCH II or any of its Significant Subsidiaries or for all or substantially all of the property of CCH II or any of its Significant Subsidiaries; or

      (c) orders the liquidation of CCH II or any of its Significant Subsidiaries;

      and the order or decree remains unstayed and in effect for 60 consecutive days.

      In the case of an Event of Default described in the foregoing clauses (7) and (8) with respect to CCH II, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding Notes may declare the Notes to be due and payable immediately.

      Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, the holders of a majority in principal amount of the then outstanding Notes may direct the trustee in its exercise of any trust or power. The trustee may withhold from holders of the Notes notice of any continuing Default or Event of Default under the Indenture (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.

      The holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the trustee may on behalf of the holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, or premium, if any, on, the Notes.

      The Issuers will be required to deliver to the trustee annually a statement regarding compliance with the Indenture. Upon becoming aware of any Default or Event of Default, the Issuers will be required to deliver to the trustee a statement specifying such Default or Event of Default and what action the Issuers are taking or propose to take with respect thereto.

No Personal Liability of Directors, Officers, Employees, Members and Stockholders

      No director, officer, employee or incorporator of the Issuers, as such, and no member or stockholder of the Issuers, as such, shall have any liability for any obligations of the Issuers under the Notes or the Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release

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will be part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Legal Defeasance and Covenant Defeasance

      The Issuers may, at their option and at any time, elect to have all of their obligations discharged with respect to any outstanding Notes (“Legal Defeasance”) except for:

      (1) the rights of holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due from the trust referred to below;

      (2) the Issuers’ obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

      (3) the rights, powers, trusts, duties and immunities of the trustee, and the Issuers’ obligations in connection therewith; and

      (4) the Legal Defeasance provisions of the Indenture.

      In addition, the Issuers may, at their option and at any time, elect to have the obligations of the Issuers released with respect to certain covenants that are described in the Indenture (“Covenant Defeasance”) and thereafter any omission to comply with those covenants shall not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under “Events of Default” will no longer constitute an Event of Default with respect to the Notes.

      In order to exercise either Legal Defeasance or Covenant Defeasance:

      (1) the Issuers must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Issuers must specify whether the Notes are being defeased to maturity or to a particular redemption date;

      (2) in the case of Legal Defeasance, the Issuers shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that

      (a) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling or

      (b) since the Issue Date, there has been a change in the applicable federal income tax law,

in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

      (3) in the case of Covenant Defeasance, the Issuers shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that the holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

      (4) no Default or Event of Default under the Indenture shall have occurred and be continuing either:

      (a) on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit); or

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      (b) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit;

      (5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Issuers or any of their Restricted Subsidiaries is a party or by which the Issuers or any of their Restricted Subsidiaries is bound;

      (6) the Issuers must have delivered to the trustee an opinion of counsel to the effect that after the 91st day, assuming no intervening bankruptcy, that no holder is an insider of either of the Issuers following the deposit and that such deposit would not be deemed by a court of competent jurisdiction a transfer for the benefit of the Issuers in their capacities as such, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally;

      (7) the Issuers must deliver to the trustee an officers’ certificate stating that the deposit was not made by the Issuers with the intent of preferring the holders of the Notes over the other creditors of the Issuers with the intent of defeating, hindering, delaying or defrauding creditors of the Issuers or others; and

      (8) the Issuers must deliver to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

      Notwithstanding the foregoing, the opinion of counsel required by clause (2) above with respect to a Legal Defeasance need not be delivered if all applicable Notes not theretofore delivered to the trustee for cancellation

      (a) have become due and payable or

      (b) will become due and payable on the maturity date within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in the name, and at the expense, of the Issuers.

Amendment, Supplement and Waiver

      Except as provided below, the Indenture or Notes may be amended or supplemented with the consent of the holders of at least a majority in aggregate principal amount of the then outstanding Notes. This includes consents obtained in connection with a purchase of Notes, a tender offer for Notes or an exchange offer for Notes. Any existing Default or compliance with any provision of the Indenture or the Notes (other than any provision relating to the right of any holder of a Note to bring suit for the enforcement of any payment of principal, premium, if any, and interest on the Note, on or after the scheduled due dates expressed in the Notes) may be waived with the consent of the holders of a majority in aggregate principal amount of the then outstanding Notes. This includes consents obtained in connection with a purchase of Notes, a tender offer for Notes or an exchange offer for Notes.

      Without the consent of each holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting holder):

      (1) reduce the principal amount of Notes whose holders must consent to an amendment, supplement or waiver;

      (2) reduce the principal of or change the fixed maturity of any Note or alter the payment provisions with respect to the redemption of the Notes (other than provisions relating to the covenants described above under the caption “— Repurchase at the Option of Holders”);

      (3) reduce the rate of or extend the time for payment of interest on any Note;

      (4) waive a Default or an Event of Default in the payment of principal of or premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the holders of at least a majority

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in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);

      (5) make any Note payable in money other than that stated in the Notes;

      (6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of Notes to receive payments of principal of, or premium, if any, or interest on the Notes;

      (7) waive a redemption payment with respect to any Note (other than a payment required by one of the covenants described above under the caption “— Repurchase at the Option of Holders”); or

      (8) make any change in the preceding amendment and waiver provisions.

      Notwithstanding the preceding, without the consent of any holder of Notes, the Issuers and the trustee may amend or supplement the Indenture or the Notes:

      (1) to cure any ambiguity, defect or inconsistency;

      (2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

      (3) to provide for or confirm the issuance of Additional Notes;

      (4) to provide for the assumption of the Issuers’ obligations to holders of Notes in the case of a merger or consolidation or sale of all or substantially all of the Issuers’ assets;

      (5) to make any change that would provide any additional rights or benefits to the holders of Notes or that does not adversely affect the legal rights under the Indenture of any such holder; or

      (6) to comply with requirements of the Securities and Exchange Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act or otherwise as necessary to comply with applicable law.

Governing Law

      The Indenture and the Notes will be governed by the laws of the State of New York.

Concerning the Trustee

      If the trustee becomes a creditor of the Issuers, the Indenture will limit its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Securities and Exchange Commission for permission to continue or resign.

      The holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The Indenture will provide that in case an Event of Default shall occur and be continuing, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any holder of Notes, unless such holder shall have offered to the trustee indemnity satisfactory to it against any loss, liability or expense.

Additional Information

      Anyone who receives this prospectus may obtain a copy of the Indenture and the exchange and registration rights agreement without charge by writing to the Issuers at Charter Plaza, 12405 Powerscourt Drive, St. Louis, Missouri 63131, Attention: Corporate Secretary.

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Book-Entry, Delivery and Form

      Except as set forth below, new Notes will be issued in registered, global form in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof.

      The new Notes initially will be issued in the form of global securities filed in book-entry form. The new Notes will be deposited upon issuance with the trustee, as custodian for The Depository Trust Company (“DTC”), in New York, New York, and registered in the name of DTC or its nominee, Cede & Co., and DTC or its nominee will initially be the sole registered holder of the notes for all purposes under the Indenture. Unless it is exchanged in whole or in part for debt securities in definitive form as described below, a global security may not be transferred. However, transfers of the whole security between DTC and its nominee or their respective successors are permitted.

      Upon the issuance of a global security, DTC or its nominee will credit on its internal system the principal amount at maturity of the individual beneficial interest represented by the global security acquired by the persons in sale of the original notes. Ownership of beneficial interests in a global security will be limited to persons that have accounts with DTC or persons that hold interests through participants. Ownership of beneficial interests will be shown on, and the transfer of such ownership will be effected only through, records maintained by DTC or its nominee with respect to interests of participants and the records of participants with respect to interests of persons other than participants. The laws of some jurisdictions require that some purchasers of securities take physical delivery of the securities in definitive form. These limits and laws may impair the ability to transfer beneficial interests in a global security. Principal and interest payments on global securities registered in the name of DTC’s nominee will be made in immediate available funds to DTC’s nominee as the registered owner of the global securities. The Issuers and the trustee will treat DTC’s nominee as the owner of the global securities for all other purchasers will have no direct responsibility or liability for any aspect of the records relating to payments made on account of beneficial interests in the global securities or for maintaining, supervising or reviewing any records relating to these beneficial interests. It is DTC’s current practice, upon receipt of any payment of principal or interest, to credit direct participants’ accounts on the payment date according to their respective holdings of beneficial interests in the global securities. These payments will be the responsibility of the direct and indirect participants and not of DTC, the Issuers, the trustee or the initial purchasers.

      So long as DTC or its nominee is the registered owner or holder of the global security, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by the global security for the purposes of:

      (1) receiving payment on the Notes;

      (2) receiving notices; and

      (3) for all other purposes under the Indenture and the Notes.

      Beneficial interests in the new Notes will be evidenced only by, and transfers of the Notes will be effected only through records maintained by DTC and its participants.

      Except as described above, owners of beneficial interests in a global security will not be entitled to receive physical delivery of certificated Notes in definitive form and will not be considered the holders of the global security for any purposes under the Indenture. Accordingly, each person owning a beneficial interest in a global security must rely on the procedures of DTC. And, if that person is not a participant, the person must rely on the procedures of the participant through which that person owns its interest, to exercise any rights of a holder under the Indenture. Under existing industry practices, if the issuers request any action of holders or an owner of a beneficial interest in a global security desires to take any action under the Indenture, DTC would authorize the participants holding the relevant beneficial interest to take that action. The participants then would authorize beneficial owners owning through the participants to take the action or would otherwise act upon the instructions of beneficial owners owning through them.

      DTC has advised the Issuers that it will take any action permitted to be taken by a holder of Notes only at the direction of one or more participants to whose account the DTC interests in the global security

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are credited. Further, DTC will take action only as to the portion of the aggregate principal amount of the Notes as to which the participant or participants has or have given the direction.

      DTC has provided the following information to us. DTC is a:

      (1) limited-purpose trust company organized under the New York Banking Law;

      (2) a banking organization within the meaning of the New York Banking Law;

      (3) a member of the United States Federal Reserve System;

      (4) a clearing corporation within the meaning of the New York Uniform Commercial Code; and

      (5) a clearing agency registered under the provisions of Section 17A of the Securities Exchange Act.

DTC has further advised us that:

      (1) DTC holds securities that its direct participants deposit with DTC and facilitates the settlement among direct participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in direct participants’ accounts, thereby eliminating the need for physical movement of securities certificates;

      (2) direct participants include securities brokers and dealers, trust companies, clearing corporations and other organizations;

      (3) DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers, Inc.;

      (4) access to the DTC system is also available to indirect participants such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with direct participants, either directly or indirectly; and

      (5) the rules applicable to DTC and its direct and indirect participants are on file with the SEC.

      Although DTC has agreed to the procedures described above in order to facilitate transfers of interests in global securities among participants of DTC, it is under no obligation to perform these procedures, and the procedures may be discontinued at any time. None of the Issuers, the trustee, any agent of the Issuers or the purchasers of the original notes will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations, including maintaining, supervising or reviewing the records relating to, payments made on account of, or beneficial ownership interests in, global notes.

      According to DTC, the foregoing information with respect to DTC has been provided to its participants and other members of the financial community for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind. We have provided the foregoing descriptions of the operations and procedures of DTC solely as a matter of convenience. DTC’s operations and procedures are solely within DTC’s control and are subject to change by DTC from time to time. Neither we, the initial purchasers nor the trustee take any responsibility for these operations or procedures, and you are urged to contact DTC or its participants directly to discuss these matters.

Exchange of Book-Entry Notes for Certificated Notes

      A Global Note is exchangeable for definitive Notes in registered certificated form (“Certificated Notes”) if (i) DTC (x) notifies the Issuers that it is unwilling or unable to continue as depositary for the Global Notes and the Issuers thereupon fail to appoint a successor depositary or (y) has ceased to be a clearing agency registered under the Exchange Act, (ii) the Issuers, at their option, notify the trustee in writing that they elect to cause the issuance of the Certificated Notes or (iii) there shall have occurred and be continuing a Default or Event of Default with respect to the Notes. In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon request but only upon prior written notice given to the trustee by or on behalf of DTC in accordance with the Indenture and in accordance with the

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certification requirements set forth in the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of DTC (in accordance with its customary procedures) and will bear the applicable restrictive legend referred to in “Notice to Investors,” unless the Issuers determine otherwise in compliance with applicable law.

Exchange of Certificated Notes for Book-Entry Notes

      Notes issued in certificated form may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such Notes. See “Notice to Investors.”

Same-Day Settlement and Payment

      Payments in respect of the Notes represented by the Global Notes (including principal, premium, if any, and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Global Note holder. With respect to Notes in certificated form, the Issuers will make all payments of principal, premium, if any, and interest, by wire transfer of immediately available funds to the accounts specified by the holders thereof or, if no such account is specified, by mailing a check to each such holder’s registered address. The Notes represented by the Global Notes are expected to trade in DTC’s Same-Day Funds Settlement System, and any permitted secondary market trading activity in such Notes will, therefore, be required by DTC to be settled in immediately available funds. The Issuers expect that secondary trading in any certificated Notes will also be settled in immediately available funds.

      Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised the Issuers that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

Certain Definitions

      This section sets forth certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

      “Acquired Debt” means, with respect to any specified Person:

      (1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and

      (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

      “Additional Notes” means the Issuers’ 10.25% Senior Notes due 2010 issued under the Indenture in addition to the original Notes (other than Notes issued in exchange for the original notes and certain original Notes identified in the Indenture).

      “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether

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through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” shall have correlative meanings.

      “Asset Acquisition” means

      (a) an Investment by CCH II or any of its Restricted Subsidiaries in any other Person pursuant to which such Person shall become a Restricted Subsidiary of CCH II or any of its Restricted Subsidiaries or shall be merged with or into CCH II or any of its Restricted Subsidiaries, or

      (b) the acquisition by CCH II or any of its Restricted Subsidiaries of the assets of any Person which constitute all or substantially all of the assets of such Person, any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of business.

      “Asset Sale” means:

      (1) the sale, lease, conveyance or other disposition of any assets or rights, other than sales of inventory in the ordinary course of the Cable Related Business consistent with applicable past practices; provided that the sale, conveyance or other disposition of all or substantially all of the assets of CCH II and its Subsidiaries, taken as a whole, will be governed by the provisions of the Indenture described above under the caption “— Repurchase at the Option of Holders — Change of Control” and/or the provisions described above under the caption “— Certain Covenants — Merger, Consolidation, or Sale of Assets” and not by the provisions of the Asset Sale covenant; and

      (2) the issuance of Equity Interests by any Restricted Subsidiary of CCH II or the sale of Equity Interests in any Restricted Subsidiary of CCH II.

      Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales:

      (1) any single transaction or series of related transactions that:

      (a) involves assets having a fair market value of less than $100 million; or

      (b) results in net proceeds to CCH II and its Restricted Subsidiaries of less than $100 million;

      (2) a transfer of assets between or among CCH II and its Restricted Subsidiaries;

      (3) an issuance of Equity Interests by a Restricted Subsidiary of CCH II to CCH II or to another Wholly Owned Restricted Subsidiary of CCH II;

      (4) a Restricted Payment that is permitted by the covenant described above under the caption “— Certain Covenants — Restricted Payments,” a Restricted Investment that is permitted by the covenant described above under the caption “— Certain Covenants — Investments” or a Permitted Investment;

      (5) the incurrence of Liens not prohibited by the Indenture and the disposition of assets related to such Liens by the secured party pursuant to a foreclosure; and

      (6) any disposition of cash or Cash Equivalents.

      “Attributable Debt” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction, including any period for which such lease has been extended or may, at the option of the lessee, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

      “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as such term is used in Section 13(d)(3) of the Exchange Act) such “person” shall be deemed to have beneficial

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ownership of all securities that such “person” has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition.

      “Board of Directors” means the board of directors or comparable governing body of CCI or if so specified CCH II, in either case, as constituted as of the date of any determination required to be made, or action required to be taken, pursuant to the Indenture.

      “Cable Related Business” means the business of owning cable television systems and businesses ancillary, complementary and related thereto.

      “Capital Corp.” means, CCH II Capital Corp., a Delaware corporation, and any successor Person thereto.

      “Capital Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

      “Capital Stock” means:

      (1) in the case of a corporation, corporate stock;

      (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

      (3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

      (4) any other interest (other than any debt obligation) or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

      “Capital Stock Sale Proceeds” means the aggregate net cash proceeds (including the fair market value of the non-cash proceeds, as determined by an independent appraisal firm) received by CCH II from and after the Issue Date, in each case

      (x) as a contribution to the common equity capital or from the issue or sale of Equity Interests (other than Disqualified Stock and other than issuances or sales to a Subsidiary of CCH II) of CCH II after the Issue Date, or

      (y) from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of CCH II that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of CCH II).

      “Cash Equivalents” means:

      (1) United States dollars;

      (2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition;

      (3) certificates of deposit and eurodollar time deposits with maturities of twelve months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any domestic commercial bank having combined capital and surplus in excess of $500 million and a Thompson Bank Watch Rating at the time of acquisition of “B” or better;

      (4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

      (5) commercial paper having a rating at the time of acquisition of at least “P-1” from Moody’s or at least “A-1” from S&P and in each case maturing within twelve months after the date of acquisition;

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      (6) corporate debt obligations maturing within twelve months after the date of acquisition thereof, rated at the time of acquisition at least “Aaa” or “P-1” by Moody’s or “AAA” or “A-1” by S&P;

      (7) auction-rate Preferred Stocks of any corporation maturing not later than 45 days after the date of acquisition thereof, rated at the time of acquisition at least “Aaa” by Moody’s or “AAA” by S&P;

      (8) securities issued by any state, commonwealth or territory of the United States, or by any political subdivision or taxing authority thereof, maturing not later than six months after the date of acquisition thereof, rated at the time of acquisition at least “A” by Moody’s or S&P; and

      (9) money market or mutual funds at least 90% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (8) of this definition.

      “CCH I” means CCH I, LLC, a Delaware limited liability company, and any successor Person thereto.

      “CCH II” means CCH II, LLC, a Delaware limited liability company, and any successor Person thereto.

      “CCI” means Charter Communications, Inc., a Delaware corporation, and any successor Person thereto.

      “CCI Indentures” means, collectively, the indentures entered into by CCI with respect to its 5.75% Convertible Senior Notes due 2005, its 4.75% Convertible Senior Notes due 2006 and any indentures, note purchase agreements or similar documents entered into by CCI for the purpose of incurring Indebtedness in exchange for, or the proceeds of which are used to refinance, any of the Indebtedness described above, in each case, together with all instruments and other agreements entered into by CCI in connection therewith, as any of the foregoing may be refinanced, replaced, amended, supplemented or otherwise modified from time to time.

      “CCO Holdings” means CCO Holdings, LLC, a Delaware limited liability company, and any successor Person thereto.

      “Change of Control” means the occurrence of any of the following:

      (1) the sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of CCH II and its Subsidiaries, taken as a whole, or of a Parent and its Subsidiaries, taken as a whole, to any “person” (as such term is used in Section 13(d)(3) of the Exchange Act) other than Paul G. Allen or a Related Party;

      (2) the adoption of a plan relating to the liquidation or dissolution of CCH II or a Parent (except the liquidation of any Parent into any other Parent);

      (3) the consummation of any transaction, including, without limitation, any merger or consolidation, the result of which is that any “person” (as defined above) other than Paul G. Allen and Related Parties becomes the Beneficial Owner, directly or indirectly, of more than 35% of the Voting Stock of CCH II or a Parent, measured by voting power rather than the number of shares, unless Paul G. Allen or a Related Party Beneficially Owns, directly or indirectly, a greater percentage of Voting Stock of CCH II or such Parent, as the case may be, measured by voting power rather than the number of shares, than such person;

      (4) after the Issue Date, the first day on which a majority of the members of the board of directors of CCH II or the board of directors of a Parent are not Continuing Directors;

      (5) CCH II or a Parent consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, CCH II or a Parent, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of CCH II or such Parent is converted into or exchanged for cash, securities or other property, other than any such transaction where the Voting Stock of CCH II or such Parent outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the

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outstanding shares of such Voting Stock of such surviving or transferee Person immediately after giving effect to such issuance; or

      (6) (i) Charter Communications Holdings Company, LLC shall cease to own beneficially, directly or indirectly, 100% of the Capital Stock of Charter Holdings or (ii) Charter Holdings shall cease to own beneficially, directly or indirectly, 100% of the Capital Stock of CCH II.

      “Charter Holdings” means Charter Communications Holdings, LLC, a Delaware limited liability company, and any successor Person thereto.

      “Charter Holdings Indentures” means, collectively (a) the indentures entered into by Charter Holdings and Charter Communications Holdings Capital Corporation in connection with the issuance of each 8.250% Senior Notes Due 2007 dated March 1999, 8.625% Senior Notes Due 2009 dated March 1999, 9.920% Senior Discount Notes Due 2011 dated March 1999, 10.000% Senior Notes Due 2009 dated January 2000, 10.250% Senior Notes Due 2010 dated January 2000, 11.750% Senior Discount Notes Due 2010 dated January 2000, 10.750% Senior Notes Due 2009 dated January 2001, 11.125% Senior Notes Due 2011 dated January 2001, 13.500% Senior Discount Notes Due 2011 dated January 2001, 9.625% Senior Notes Due 2009 dated May 2001, 10.000% Senior Notes Due 2011 dated May 2001, 11.750% Senior Discount Notes Due 2011 dated May 2001, 9.625% Senior Notes Due 2009 dated January 2002, 10.000% Senior Notes Due 2011 dated January 2002, and 11.750% Senior Discount Notes Due 2011 dated January 2002, and (b) any indentures, note purchase agreements or similar documents entered into by Charter Holdings and/or Charter Communications Holdings Capital Corporation on or after the Issue Date for the purpose of incurring Indebtedness in exchange for, or proceeds of which are used to refinance, any of the Indebtedness described in the foregoing clause (a), in each case, together with all instruments and other agreements entered into by Charter Holdings or Charter Communications Holdings Capital Corporation in connection therewith, as the same may be refinanced, replaced, amended, supplemented or otherwise modified from time to time.

      “Charter Refinancing Indebtedness” means any Indebtedness of a Charter Refinancing Subsidiary issued in exchange for, or the net proceeds of which are used within 90 days after the date of issuance thereof to extend, refinance, renew, replace, defease, purchase, acquire or refund (including successive extensions, refinancings, renewals, replacements, defeasances, purchases, acquisitions or refunds), Indebtedness initially incurred under any one or more of the Charter Holdings Indentures, the CCI Indentures, or the Indenture; provided that:

      (1) the principal amount (or accreted value, if applicable) of such Charter Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable) plus accrued interest and premium, if any, on the Indebtedness so extended, refinanced, renewed, replaced, defeased, purchased, acquired or refunded (plus the amount of reasonable fees, commissions and expenses incurred in connection therewith); and

      (2) such Charter Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

      “Charter Refinancing Subsidiary” means CCH I, CCH II or any other directly or indirectly wholly owned Subsidiary (and any related corporate co-obligor if such Subsidiary is a limited liability company or other association not taxed as a corporation) of CCI or Charter Communications Holding Company, LLC, which is or becomes a Parent.

      “Consolidated EBITDA” means with respect to any Person, for any period, the net income of such Person and its Restricted Subsidiaries for such period plus, to the extent such amount was deducted in calculating such net income:

      (1) Consolidated Interest Expense;

      (2) income taxes;

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      (3) depreciation expense;

      (4) amortization expense;

      (5) all other non-cash items, extraordinary items, nonrecurring and unusual items and the cumulative effects of changes in accounting principles reducing such net income, less all non-cash items, extraordinary items, nonrecurring and unusual items and cumulative effects of changes in accounting principles increasing such net income, all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in conformity with GAAP;

      (6) amounts actually paid during such period pursuant to a deferred compensation plan; and

      (7) for purposes of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock,” relating to permitted debt (as defined therein), only, Management Fees;

provided that Consolidated EBITDA shall not include:

      (x) the net income (or net loss) of any Person that is not a Restricted Subsidiary (“Other Person”), except

      (i) with respect to net income, to the extent of the amount of dividends or other distributions actually paid to such Person or any of its Restricted Subsidiaries by such Other Person during such period; and

      (ii) with respect to net losses, to the extent of the amount of investments made by such Person or any Restricted Subsidiary of such Person in such Other Person during such period;

      (y) solely for the purposes of calculating the amount of Restricted Payments that may be made pursuant to clause (3) of the covenant described under the caption “— Certain Covenants — Restricted Payments” (and in such case, except to the extent includable pursuant to clause (x) above), the net income (or net loss) of any Other Person accrued prior to the date it becomes a Restricted Subsidiary or is merged into or consolidated with such Person or any Restricted Subsidiaries or all or substantially all of the property and assets of such Other Person are acquired by such Person or any of its Restricted Subsidiaries; and

      (z) the net income of any Restricted Subsidiary of CCH II to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of such net income is not at the time permitted by the operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Restricted Subsidiary (other than any agreement or instrument evidencing Indebtedness or Preferred Stock (i) outstanding on the Issue Date or (ii) incurred or issued thereafter in compliance with the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock;” provided that (a) the terms of any such agreement or instrument restricting the declaration and payment of dividends or similar distributions apply only in the event of a default with respect to a financial covenant or a covenant relating to payment, beyond any applicable period of grace, contained in such agreement or instrument, (b) such terms are determined by such Person to be customary in comparable financings and (c) such restrictions are determined by CCH II not to materially affect the Issuers’ ability to make principal or interest payments on the applicable Notes when due).

      “Consolidated Indebtedness” means, with respect to any Person as of any date of determination, the sum, without duplication, of:

      (1) the total amount of outstanding Indebtedness of such Person and its Restricted Subsidiaries, plus

      (2) the total amount of Indebtedness of any other Person that has been Guaranteed by the referent Person or one or more of its Restricted Subsidiaries, plus

      (3) the aggregate liquidation value of all Disqualified Stock of such Person and all Preferred Stock of Restricted Subsidiaries of such Person, in each case, determined on a consolidated basis in accordance with GAAP.

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      “Consolidated Interest Expense” means, with respect to any Person for any period, without duplication, the sum of:

      (1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization or original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging Obligations); and

      (2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; and

      (3) any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon);

excluding, however, any amount of such interest of any Restricted Subsidiary of the referent Person if the net income of such Restricted Subsidiary is excluded in the calculation of Consolidated EBITDA pursuant to clause (z) of the definition thereof (but only in the same proportion as the net income of such Restricted Subsidiary is excluded from the calculation of Consolidated EBITDA pursuant to clause (z) of the definition thereof), in each case, on a consolidated basis and in accordance with GAAP.

      “Continuing Directors” means, as of any date of determination, any member of the Board of Directors of CCI who:

      (1) was a member of the Board of Directors of CCI on the Issue Date; or

      (2) was nominated for election or elected to the Board of Directors of CCI with the approval of a majority of the Continuing Directors who were members of such Board of Directors of CCI at the time of such nomination or election or whose election or appointment was previously so approved.

      “Credit Facilities” means, with respect to CCH II and/or its Restricted Subsidiaries, one or more debt facilities or commercial paper facilities (including the Vulcan Backstop Facility), in each case with banks or other lenders (other than a Parent of the Issuers, but including the Lenders under the Vulcan Backstop Facility) providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.

      “Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

      “Disposition” means, with respect to any Person, any merger, consolidation or other business combination involving such Person (whether or not such Person is the Surviving Person) or the sale, assignment, transfer, lease or conveyance, or other disposition of all or substantially all of such Person’s assets or Capital Stock.

      “Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof) or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require CCH II to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that CCH II may not repurchase or redeem any such Capital Stock pursuant to such provisions unless

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such repurchase or redemption complies with the covenant described above under the caption “— Certain Covenants — Restricted Payments.”

      “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

      “Equity Offering” means any private or underwritten public offering of Qualified Capital Stock of CCH II or a Parent of which the gross proceeds to CCH II or received by CCH II as a capital contribution from such Parent, as the case may be, are at least $25 million.

      “Existing Indebtedness” means Indebtedness of CCH II and its Restricted Subsidiaries in existence on the Issue Date, until such amounts are repaid.

      “GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date.

      “Guarantee” or “guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness, measured as the lesser of the aggregate outstanding amount of the Indebtedness so guaranteed and the face amount of the guarantee.

      “Hedging Obligations” means, with respect to any Person, the obligations of such Person under:

      (1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements;

      (2) interest rate option agreements, foreign currency exchange agreements, foreign currency swap agreements; and

      (3) other agreements or arrangements designed to protect such Person against fluctuations in interest and currency exchange rates.

      “Helicon Preferred Stock” means the preferred limited liability company interest of Charter-Helicon LLC with an aggregate liquidation value of $25 million.

      “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:

      (1) in respect of borrowed money;

      (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

      (3) in respect of banker’s acceptances;

      (4) representing Capital Lease Obligations;

      (5) in respect of the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or

      (6) representing the notional amount of any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the guarantee by such Person of any indebtedness of any other Person.

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      The amount of any Indebtedness outstanding as of any date shall be:

      (1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and

      (2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

      “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P.

      “Investments” means, with respect to any Person, all investments by such Person in other Persons, including Affiliates, in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business) and purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.

      “Issue Date” means September 23, 2003.

      “Leverage Ratio” means, as to CCH II, as of any date, the ratio of:

      (1) the Consolidated Indebtedness of CCH II on such date to

      (2) the aggregate amount of Consolidated EBITDA for CCH II for the most recently ended fiscal quarter for which internal financial statements are available multiplied by four (the “Reference Period”).

      In addition to the foregoing, for purposes of this definition, “Consolidated EBITDA” shall be calculated on a pro forma basis after giving effect to

      (1) the issuance of the Notes;

      (2) the incurrence of the Indebtedness or the issuance of the Disqualified Stock or Preferred Stock of a Restricted Subsidiary (and the application of the proceeds therefrom) giving rise to the need to make such calculation and any incurrence or issuance (and the application of the proceeds therefrom) or repayment of other Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary, other than the incurrence or repayment of Indebtedness for ordinary working capital purposes, at any time subsequent to the beginning of the Reference Period and on or prior to the date of determination, as if such incurrence (and the application of the proceeds thereof), or the repayment, as the case may be, occurred on the first day of the Reference Period;

      (3) any Dispositions or Asset Acquisitions (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Restricted Subsidiaries (including any person that becomes a Restricted Subsidiary as a result of such Asset Acquisition) incurring, assuming or otherwise becoming liable for or issuing Indebtedness, Disqualified Stock or Preferred Stock) made on or subsequent to the first day of the Reference Period and on or prior to the date of determination, as if such Disposition or Asset Acquisition (including the incurrence, assumption or liability for any such Indebtedness, Disqualified Stock or Preferred Stock and also including any Consolidated EBITDA associated with such Asset Acquisition, including any cost savings adjustments in compliance with Regulation S-X promulgated by the Securities and Exchange Commission) had occurred on the first day of the Reference Period.

      “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

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      “Management Fees” means the fees payable to CCI pursuant to the management and mutual services agreements between any Parent of CCH II and Charter Communications Operating, LLC and between any Parent of CCH II and other Restricted Subsidiaries of CCH II and pursuant to the limited liability company agreements of certain Restricted Subsidiaries as such management, mutual services or limited liability company agreements exist on the Issue Date (or, if later, on the date any new Restricted Subsidiary is acquired or created), including any amendment or replacement thereof, provided, that any such new agreements or amendments or replacements of existing agreements is not more disadvantageous to the holders of the Notes in any material respect than such management agreements existing on the Issue Date and further provided, that such new, amended or replacement management agreements do not provide for percentage fees, taken together with fees under existing agreements, any higher than 3.5% of CCI’s consolidated total revenues for the applicable payment period.

      “Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

      “Net Proceeds” means the aggregate cash proceeds received by CCH II or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result thereof or taxes paid or payable as a result thereof (including amounts distributable in respect of owners’, partners’ or members’ tax liabilities resulting from such sale), in each case after taking into account any available tax credits or deductions and any tax sharing arrangements and amounts required to be applied to the repayment of Indebtedness.

      “Non-Recourse Debt” means Indebtedness:

      (1) as to which neither CCH II nor any of its Restricted Subsidiaries

      (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness);

      (b) is directly or indirectly liable as a guarantor or otherwise; or

      (c) constitutes the lender;

      (2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Notes) of CCH II or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

      (3) as to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of CCH II or any of its Restricted Subsidiaries.

      “Parent” means CCH I, Charter Holdings, Charter Communications Holding Company, LLC, CCI and/or any direct or indirect Subsidiary of the foregoing 100% of the Capital Stock of which is owned directly or indirectly by one or more of the foregoing Persons, as applicable, and that directly or indirectly beneficially owns 100% of the Capital Stock of CCH II, and any successor Person to any of the foregoing.

      “Permitted Investments” means:

      (1) any Investment by CCH II in a Restricted Subsidiary thereof, or any Investment by a Restricted Subsidiary of CCH II in CCH II or in another Restricted Subsidiary of CCH II;

      (2) any Investment in Cash Equivalents;

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      (3) any Investment by CCH II or any of its Restricted Subsidiaries in a Person, if as a result of such Investment:

      (a) such Person becomes a Restricted Subsidiary of CCH II; or

      (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, CCH II or a Restricted Subsidiary of CCH II;

      (4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales”;

      (5) any Investment made out of the net cash proceeds of the issue and sale from and after the Issue Date (other than to a Subsidiary of CCH II) of Equity Interests (other than Disqualified Stock) of CCH II to the extent that such net cash proceeds have not been applied to make a Restricted Payment or to effect other transactions pursuant to the covenant described under “— Restricted Payments”;

      (6) other Investments in any Person (other than any Parent) having an aggregate fair market value when taken together with all other Investments in any Person made by CCH II and its Restricted Subsidiaries (without duplication) pursuant to this clause (6) from and after the Issue Date, not to exceed $750 million (initially measured on the date each such Investment was made and without giving effect to subsequent changes in value, but reducing the amount outstanding by the aggregate amount of principal, interest, dividends, distributions, repayments, proceeds or other value otherwise returned or recovered in respect of any such Investment, but not to exceed the initial amount of such Investment) at any one time outstanding;

      (7) Investments in customers and suppliers in the ordinary course of business which either

      (A) generate accounts receivable, or

      (B) are accepted in settlement of bona fide disputes; and

      (8) Investments resulting from the Private Exchanges.

      “Permitted Liens” means:

      (1) Liens on the assets of CCH II and its Restricted Subsidiaries securing Indebtedness and other obligations under any of the Credit Facilities;

      (2) Liens in favor of CCH II;

      (3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with CCH II or a Restricted Subsidiary thereof; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with CCH II or a Restricted Subsidiary thereof;

      (4) Liens on property existing at the time of acquisition thereof by CCH II or its Restricted Subsidiaries; provided that such Liens were in existence prior to the contemplation of such acquisition;

      (5) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

      (6) purchase money mortgages or other purchase money Liens (including, without limitation, any Capitalized Lease Obligations) incurred by CCH II or its Restricted Subsidiaries upon any fixed or capital assets acquired on or after the Issue Date or purchase money mortgages (including, without limitation, Capital Lease Obligations) on any such assets, whether or not assumed, existing at the time of acquisition of such assets, whether or not assumed, so long as

      (a) such mortgage or lien does not extend to or cover any of the assets of CCH II or any of its Restricted Subsidiaries, except the asset so developed, constructed, or acquired, and directly related

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assets such as enhancements and modifications thereto, substitutions, replacements, proceeds (including insurance proceeds), products, rents and profits thereof, and

      (b) such mortgage or lien secures the obligation to pay all or a portion of the purchase price of such asset, interest thereon and other charges, costs and expenses (including, without limitation, the cost of design, development, construction, acquisition, transportation, installation, improvement, and migration) and is incurred in connection therewith (or the obligation under such Capitalized Lease Obligation) only;

      (7) Liens existing on the Issue Date (other than in connection with the Credit Facilities) and replacement Liens therefor that do not encumber additional property;

      (8) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;

      (9) statutory and common law Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate legal proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made;

      (10) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security;

      (11) Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory or regulatory obligation, bankers’ acceptance, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a similar nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money);

      (12) easements, rights-of-way, municipal and zoning ordinances and similar charges, encumbrances, title defects or other irregularities that do not materially interfere with the ordinary course of business of CCH II or any of its Restricted Subsidiaries;

      (13) Liens of franchisors or other regulatory bodies arising in the ordinary course of business;

      (14) Liens arising from filing Uniform Commercial Code financing statements regarding leases or other Uniform Commercial Code financing statements for precautionary purposes relating to arrangements not constituting Indebtedness;

      (15) Liens arising from the rendering of a final judgment or order against CCH II or any of its Restricted Subsidiaries that does not give rise to an Event of Default;

      (16) Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and the products and proceeds thereof;

      (17) Liens encumbering customary initial deposits and margin deposits, and other Liens that are within the general parameters customary in the industry and incurred in the ordinary course of business, in each case, securing Indebtedness under Hedging Obligations and forward contracts, options, future contracts, future options or similar agreements or arrangements designed solely to protect CCH II or any of its Restricted Subsidiaries from fluctuations in interest rates, currencies or the price of commodities;

      (18) Liens consisting of any interest or title of licensor in the property subject to a license;

      (19) Liens on the Capital Stock of Unrestricted Subsidiaries;

      (20) Liens arising from sales or other transfers of accounts receivable which are past due or otherwise doubtful of collection in the ordinary course of business;

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      (21) Liens incurred in the ordinary course of business of CCH II and its Restricted Subsidiaries with respect to obligations which in the aggregate do not exceed $50 million at any one time outstanding;

      (22) Liens in favor of the trustee arising under the Indenture and similar provisions in favor of trustees or other agents or representatives under indentures or other agreements governing debt instruments entered into after the date hereof;

      (23) Liens in favor of the trustee for its benefit and the benefit of holders of the Notes, as their respective interests appear; and

      (24) Liens securing Permitted Refinancing Indebtedness, to the extent that the Indebtedness being refinanced was secured or was permitted to be secured by such Liens.

      “Permitted Refinancing Indebtedness” means any Indebtedness of CCH II or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used within 60 days after the date of issuance thereof to extend, refinance, renew, replace, defease or refund, other Indebtedness of CCH II or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that unless permitted otherwise by the Indenture, no Indebtedness of any Restricted Subsidiary may be issued in exchange for, nor may the net proceeds of Indebtedness be used to extend, refinance, renew, replace, defease or refund, Indebtedness of the direct or indirect parent of such Restricted Subsidiary; provided further that:

      (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable) plus accrued interest and premium, if any, on the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith), except to the extent that any such excess principal amount would be then permitted to be incurred by other provisions of the covenant described above under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock.”

      (2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

      (3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

      “Person” means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization, government or agency or political subdivision thereof or any other entity.

      “Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which, by its terms, is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

      “Private Exchanges” means, collectively,

      (1) the acquisition by CCH II of certain senior notes and senior discount notes outstanding under the Charter Holdings Indentures, in exchange for Notes, pursuant to one or more Exchange Agreements dated on or after September 18, 2003, as such agreements may be supplemented, modified, extended or amended from time to time;

      (2) the acquisition by CCH II of certain convertible senior notes outstanding under the CCI Indentures in exchange for Notes, pursuant to one or more Exchange Agreements dated on or after

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September 18, 2003, as such agreements may be supplemented, modified, extended or amended from time to time; and

      (3) the distribution, loan or investment of (a) senior notes and senior discount notes accepted in exchange for Notes as contemplated by clause (1) of this definition, (B) convertible notes accepted in exchange for Notes as contemplated by clause (2) of this definition and (c) amounts sufficient to satisfy the expenses incurred by any Parent in connection therewith (including any required payment of accrued interest thereon), in each case, directly or indirectly to or in any Parent.

      “Productive Assets” means assets (including assets of a referent Person owned directly or indirectly through ownership of Capital Stock) of a kind used or useful in the Cable Related Business.

      “Qualified Capital Stock” means any Capital Stock that is not Disqualified Stock.

      “Rating Agencies” means Moody’s and S&P.

      “Related Party” means: (1) the spouse or an immediate family member, estate or heir of Paul G. Allen; or (2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of Paul G. Allen and/or such other Persons referred to in the immediately preceding clause (1).

      “Restricted Investment” means an Investment other than a Permitted Investment.

      “Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

      “S&P” means Standard & Poor’s Ratings Service, a division of the McGraw-Hill Companies, Inc. or any successor to the rating agency business thereof.

      “Significant Subsidiary” means (a) with respect to any Person, any Restricted Subsidiary of such Person which would be considered a “Significant Subsidiary” as defined in Rule 1-02(w) of Regulation S-X under the Securities Act and (b) in addition, with respect to CCH II, Capital Corp.

      “Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness on the Issue Date, or, if none, the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

      “Subsidiary” means, with respect to any Person:

      (1) any corporation, association or other business entity of which at least 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and, in the case of any such entity of which 50% of the total voting power of shares of Capital Stock is so owned or controlled by such Person or one or more of the other Subsidiaries of such Person, such Person and its Subsidiaries also have the right to control the management of such entity pursuant to contract or otherwise; and

      (2) any partnership

      (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person, or

      (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

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      “Unrestricted Subsidiary” means any Subsidiary of CCH II that is designated by the Board of Directors of CCH II as an Unrestricted Subsidiary pursuant to a board resolution, but only to the extent that such Subsidiary:

      (1) has no Indebtedness other than Non-Recourse Debt;

      (2) is not party to any agreement, contract, arrangement or understanding with CCH II or any Restricted Subsidiary of CCH II unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to CCH II or such Restricted Subsidiary of CCH II than those that might be obtained at the time from Persons who are not Affiliates of CCH II unless such terms constitute Investments permitted by the covenant described above under the caption “— Certain Covenants — Investments,” Permitted Investments, Asset Sales permitted under the covenant described above under the caption “— Repurchase at the Option of the Holders — Asset Sales” or sale-leaseback transactions permitted by the covenant described above under the caption “Certain Covenants — Sale and Leaseback Transactions”;

      (3) is a Person with respect to which neither CCH II nor any of its Restricted Subsidiaries has any direct or indirect obligation

      (a) to subscribe for additional Equity Interests or

      (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results;

      (4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of CCH II or any of its Restricted Subsidiaries;

      (5) has at least one director on its board of directors that is not a director or executive officer of CCH II or any of its Restricted Subsidiaries or has at least one executive officer that is not a director or executive officer of CCH II or any of its Restricted Subsidiaries; and

      (6) does not own any Capital Stock of any Restricted Subsidiary of CCH II.

      Any designation of a Subsidiary of CCH II as an Unrestricted Subsidiary shall be evidenced to the trustee by filing with the trustee a certified copy of the board resolution giving effect to such designation and an officers’ certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption “— Certain Covenants — Investments.” If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of CCH II as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock,” CCH II shall be in default of such covenant. The Board of Directors of CCH II may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if:

      (1) such Indebtedness is permitted under the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock,” calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and

      (2) no Default or Event of Default would be in existence immediately following such designation.

      “Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors or comparable governing body of such Person.

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      “Vulcan Backstop Facility” means a credit facility entered into or to be entered into by and among CCO Holdings, LLC, a Delaware limited liability company, CCI, Charter Communications Holding Company, LLC, Charter Holdings, CCH I, CCH II and/or one or more other Subsidiaries of CCH II and the lenders party thereto pursuant to a commitment letter dated March 14, 2003 between Vulcan Inc. and Charter Communications VII, LLC, as amended by an extension letter dated June 30, 2003, by and between Vulcan Inc., CCO Holdings, LLC and Charter Communications VII, LLC, as the same may be further amended, extended, modified, supplemented or replaced from time to time.

      “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

      (1) the sum of the products obtained by multiplying

      (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by

      (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

      (2) the then outstanding principal amount of such Indebtedness.

      “Wholly Owned Restricted Subsidiary” of any Person means a Restricted Subsidiary of such Person all of the outstanding common equity interests or other ownership interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person and/or by one or more Wholly Owned Restricted Subsidiaries of such Person.

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IMPORTANT UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

      The following is a summary of certain U.S. federal income tax consequences of the purchase, ownership, and disposition of the new notes by an investor who acquires the new notes pursuant to this exchange offer.

      This summary assumes that investors will hold their new notes as “capital assets” under the U.S. Internal Revenue Code of 1986, as amended (the “Code”), and does not discuss special situations, such as those of financial institutions, insurance companies, broker-dealers, partnerships or other passthrough entities, tax-exempt organizations, certain former citizens or former long term residents of the United States or persons holding new notes as a part of a hedging or conversion transaction, a straddle, a constructive sale or synthetic security transaction or that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. Furthermore, this summary is based upon provisions of the Code and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked, or modified, possibly with retroactive effect, so as to result in U.S. federal income tax consequences different from those discussed below. In addition, except as otherwise indicated, the following does not consider the effect of any applicable foreign, state or local tax laws or estate or gift tax considerations.

      This summary addresses tax consequences relevant to a holder of new notes that is either a U.S. Holder or a Non-U.S. Holder. A “U.S. Holder” is a beneficial owner of a new note who is for U.S. federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation or other entity taxable as a corporation for U.S. federal income tax purposes created in, or organized under the laws of, the United States or any state or political subdivision thereof, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that was in existence on August 20, 1996, was treated as a U.S. person under the Code on that date and has made a valid election to be treated as a U.S. person under the Code. A “Non-U.S. Holder” is a beneficial owner of a new note that is, for U.S. tax purpose, not a U.S. Holder. If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the new notes, the treatment of a partner in the partnership will generally depend upon the status of the partner and upon the activities of the partnership. A holder of the new notes that is a partnership and partners in such partnership should consult their tax advisors about the U.S. federal income tax consequences of the purchase, ownership, and disposition of the new notes.

Each prospective investor is urged to consult its tax advisor regarding the United States federal, state, local, estate and foreign income and other tax considerations of the purchase, ownership, and disposition of the new notes.

Exchange Offer

      Pursuant to the exchange offer, holders are entitled to exchange the original notes for new notes that will be substantially identical in all material respects to the original notes, except that the new notes will be registered and therefore will not be subject to transfer restrictions, subject to certain conditions set forth in “The Exchange Offer — Terms of the Exchange Offer.” The exchange pursuant to the exchange offer as described above will not result in a taxable exchange to the issuers or any holder exchanging an original note for a new note. Accordingly,

      (1) no gain or loss will be realized by a holder of an original note upon receipt of a new note,

      (2) the holding period of the new notes will include the holding period of the original notes exchanged therefor,

      (3) the adjusted tax basis of the new notes will be the same as the adjusted tax basis of the original notes exchanged therefor at the time of the exchange, and

186

      (4) a holder will continue to take into account income in respect of a new note in the same manner as before the exchange.

United States Federal Income Taxation of U.S. Holders

Payments of Interest

      Interest on the new notes will be taxable to a U.S. Holder as ordinary income at the time it is paid or accrued in accordance with the U.S. Holder’s regular method of accounting for U.S. federal income tax purposes.

Sale, Redemption, Retirement or Other Taxable Disposition of the New Notes

      Unless a non-recognition event applies, upon the sale, redemption, retirement or other taxable disposition of a new note, a U.S. Holder will generally recognize gain or loss in an amount equal to the difference between (1) the amount of cash and the fair market value of other property received in exchange therefor and (2) the holder’s adjusted tax basis in such new note. Amounts attributable to accrued but unpaid interest on the new notes will be treated as ordinary interest income. A U.S. Holder’s adjusted tax basis in a new note will equal the purchase price paid by such U.S. Holder for the new note increased by the amount of any market discount, if any, that the U.S. Holder elected to include in income and decreased by the amount of any amortizable bond premium applied to reduce interest on the new notes.

      Gain or loss realized on the sale, exchange, retirement or other taxable disposition of a new note will be capital gain or loss and will be long-term capital gain or loss if at the time of sale, exchange, retirement, or other taxable disposition, the U.S. Holder’s holding period for the new note is more than 12 months. The deductibility of capital losses is subject to certain limitations.

Additional Payments on the New Notes

      The terms of the new notes provide that under certain circumstances the issuers may, or may be required, to redeem all or a portion of the new notes at redemption prices specified elsewhere herein. See “Description of Notes — Optional Redemption,” “Description of Notes — Repurchase at the Option of Holders.” Computation of the yield and maturity of the new notes is not affected by such redemption rights and obligations if, based on all the facts and circumstances as of the date of issuance, the stated payment schedule of the new notes (that does not reflect these redemptions) is significantly more likely than not to occur. We have determined that, based on all of the facts and circumstances as of the date of issuance, it is significantly more likely than not that the new notes will be paid according to their stated schedule. U.S. Holders may wish to consult their own tax advisors regarding the treatment of such contingencies.

Market Discount

      A U.S. Holder receives a “market discount” when he/she purchases a new note for an amount below the issue price. Under the market discount rules, a U.S. Holder will be required to treat any partial principal payment on, or any gain on the sale, exchange, retirement or other disposition of, a new note as ordinary income to the extent of the market discount which has not previously been included in income and is treated as having accrued on such note at the time of such payment or disposition. In addition, the U.S. Holder may be required to defer, until the maturity of the new note or its earlier disposition in a taxable transaction, the deduction of a portion of the interest expense on any indebtedness incurred or continued to purchase or carry such note.

      Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the new note, unless the U.S. Holder elects to accrue such discount on a constant interest rate method. A U.S. Holder may elect to include market discount in income currently as it accrues, on either a ratable or constant interest rate method. If this election is made, the holder’s

187

basis in the new note will be increased to reflect the amount of income recognized and the rules described above regarding deferral of interest deductions will not apply. This election to include market discount in income currently, once made, applies to all market discount obligations acquired on or after the first taxable year to which the election applies and may not be revoked without the consent of the Internal Revenue Service.

Amortizable Bond Premium

      A U.S. Holder that purchases a new note for an amount in excess of the amount payable on maturity will be considered to have purchased such note with “amortizable bond premium.” A U.S. Holder generally may elect to amortize the premium over the remaining term of the new note on a constant yield method. However, because the new notes could be redeemed for an amount in excess of their principal amount, the amortization of bond premium could be deferred until later in the term of the new note. The amount amortized in any year will be treated as a reduction of the U.S. Holder’s interest income from the new note. Amortizable bond premium on a new note held by a U.S. Holder that does not elect annual amortization will decrease the gain or increase the loss otherwise recognized upon disposition of the new note. The election to amortize premium on a constant yield method, once made, applies to all debt obligations held or subsequently acquired by the electing U.S. Holder on or after the first day of the first taxable year to which the election applies and may not be revoked without the consent of the Internal Revenue Service.

Information Reporting and Backup Withholding

      Backup withholding and information reporting requirements may apply to certain payments of principal, premium, if any, and interest on a new note, and to the proceeds of the sale or redemption of a new note. We or our paying agent, as the case may be, will be required to withhold from any payment that is subject to backup withholding tax at a rate of 28% if a U.S. Holder fails to furnish his United States taxpayer identification number (“TIN”), certify that such TIN is correct, certify that such holder is not subject to backup withholding or otherwise comply with the applicable backup withholding rules. Unless extended by new legislation, however, the reduction in backup withholding rate to 28% expires and the 31% backup withholding rate is reinstated for payments made after December 31, 2010.

United States Federal Income Taxation of Non-U.S. Holders

Payments of Interest

      This discussion assumes, based upon the description of DTC’s book-entry procedures discussed in the section entitled “Description of Notes — Book-Entry, Delivery and Form”, that upon issuance and throughout the term, all the new notes will be in registered form within the meaning of the Code and applicable regulations. The payment of interest to a Non-U.S. Holder will not be subject to U.S. federal income or withholding tax pursuant to the “portfolio interest exception,” provided that the interest is not effectively connected with the conduct of a trade or business in the United States and:

      (i) the Non-U.S. Holder (A) does not actually or constructively own 10% or more of the total combined voting power of all classes of CCH II Capital stock entitled to vote nor 10% or more of the capital or profits interests of Charter Holdco and (B) is neither a controlled foreign corporation that is related to us through stock ownership within the meaning of the Code, nor a bank that received the new notes on an extension of credit in the ordinary course of its trade or business; and

      (ii) either (A) the beneficial owner of the new notes certifies to the issuers or their respective paying agents, under penalties of perjury, that it is not a U.S. Holder and provides its name and address on Internal Revenue Service Form W-8BEN (or a suitable substitute form) or (B) a securities clearing organization, bank or other financial institution that holds the new notes on behalf of such Non-U.S. Holder in the ordinary course of its trade or business (a “financial institution”) certifies under penalties of perjury that such a Form W-8BEN (or a suitable substitute form) has

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been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof.

      If a Non-U.S. Holder cannot satisfy the requirements of the portfolio interest exception described above, payments of interest made to such Non-U.S. Holder will be subject to a 30% withholding tax, unless the beneficial owner of the new note provides the issuers or their respective paying agents with a properly executed (i) Form W-8BEN (or a suitable substitute form) providing a correct TIN and claiming an exemption from or reduction in the rate of withholding under an income tax treaty or (ii) Form W-8ECI (or a suitable substitute form) providing a TIN and stating that interest paid on the new note is effectively connected with the beneficial owner’s conduct of a trade or business in the United States.

      Notwithstanding the foregoing, if a Non-U.S. Holder of a new note is engaged in the conduct of a trade or business in the United States and has filed Form W-8ECI (or a suitable substitute form), interest on the new note that is effectively connected with the conduct of such trade or business and, where an income tax treaty applies, is attributable to a U.S. permanent establishment, or in the case of an individual, a fixed base in the United States, will be taxed on a net basis at applicable graduated individual or corporate rates. Effectively connected interest received by a foreign corporation may, under certain circumstances, be subject as well to a branch profits tax at a rate of 30% or a lower applicable treaty rate.

Sale, Redemption, Retirement or Other Taxable Disposition of the New Notes

      A Non-U.S. Holder generally will not be subject to U.S. federal income tax on gain recognized on a sale, exchange, redemption or other taxable disposition of a Note unless: (i) the gain is effectively connected with the conduct of a trade or business within the United States by the Non-U.S. Holder, and, where an income tax treaty applies, attributable to a U.S. permanent establishment or, in the case of an individual, a fixed base in the United States; or (ii) in the case of a Non-U.S. Holder who is an individual, such holder is present in the United States for 183 or more days during the taxable year of disposition and certain other conditions are met.

      If a Non-U.S. Holder of a new note is engaged in the conduct of a trade or business in the United States, gain on the disposition of the new note that is effectively connected with the conduct of such trade or business and, where an income tax treaty applies, is attributable to a U.S. permanent establishment or, in the case of an individual, a fixed base in the United States, will be taxed on a net basis at applicable capital gain rates. Effectively connected gain of a foreign corporation may, under certain circumstances, be subject as well to a branch profits tax at a rate of 30% or a lower applicable treaty rate.

      If an individual Non-U.S. Holder is present in the United States for 183 days or more in the taxable year of the disposition of the new note and is nonetheless a Non-U.S. Holder, such Non-U.S. Holder generally will be subject to U.S. federal income tax at a rate of 30 percent (or a lower applicable income tax treaty rate) on the amount by which capital gains allocable to U.S. sources (including gain from the sale, exchange, retirement or other disposition of the new note if such gain is allocable to U.S. sources) exceed capital losses which are allocable to U.S. sources and recognized during the same taxable year.

Information Reporting and Backup Withholding

      The issuers must report annually to the Internal Revenue Service and to each Non-U.S. Holder on Form 1042-S the amount of interest paid on a new note, regardless of whether withholding was required, and any tax withheld with respect to the interest. Under the provisions of an income tax treaty and other applicable agreements, copies of these information returns may be made available to the tax authorities of the country in which the Non-U.S. Holder resides.

      Certain Non-U.S. Holders may, under applicable rules, be presumed to be U.S. persons. Unless such persons certify their non-U.S. status and furnish the payor necessary identifying information, interest paid to such holders of new notes generally will be subject to backup withholding at a rate of 28%. Unless extended by new legislation, however, the reduction in backup withholding rate to 28% expires and the

189

31% backup withholding rate is reinstated for payments made after December 31, 2010. Back up withholding will not apply to amounts paid that were subject to the 30% withholding tax (or applicable treaty rate) described above.

      Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against the U.S. Holder’s U.S. federal income tax liability provided that the required information is furnished to the Internal Revenue Service.

      The payment of proceeds from the disposition (including a redemption) of, a new note, effected by or through a U.S. office of a broker is also subject to both backup withholding and information reporting unless a Non-U.S. Holder provides the payor with such Non-U.S. Holder’s name and address and either certifies non-U.S. status or otherwise establishes an exemption. In general, backup withholding and information reporting will not apply to the payment of the proceeds of a sale of a new note by or through a foreign office of a broker. If, however, such broker is, for U.S. federal income tax purposes, a U.S. person, a controlled foreign corporation, a foreign person 50% or more of whose gross income is from a U.S. trade or business for a specified three-year period, or, a foreign partnership that at any time during its tax year either is engaged in the conduct of a trade or business in the United States or has as partners one or more U.S. persons that, in the aggregate, hold more than 50% of the income or capital interest in the partnership, such payments will be subject to information reporting, but not backup withholding, unless such broker has documentary evidence in its records that the holder is a Non-U.S. Holder and certain other conditions are met, or the exemption is otherwise established.

      Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against the Non-U.S. Holder’s U.S. federal income tax liability provided that the required information is furnished to the Internal Revenue Service.

      Investors are urged to consult their tax advisors in determining the tax consequences to them of the purchase, ownership, and disposition of the new notes, including the application to their particular situations of the U.S. federal income tax considerations discussed in this prospectus and the application of state, local, foreign, or other tax laws.

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PLAN OF DISTRIBUTION

      A broker-dealer that is the holder of original notes that were acquired for the account of such broker-dealer as a result of market-making or other trading activities, other than original notes acquired directly from us or any of our affiliates may exchange such original notes for new notes pursuant to the exchange offer. This is true so long as each broker-dealer that receives new notes for its own account in exchange for original notes, where such original notes were acquired by such broker-dealer as a result of market-making or other trading activities acknowledges that it will deliver a prospectus in connection with any resale of such new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for original notes where such original notes were acquired as a result of market-making activities or other trading activities. We have agreed that for a period of 180 days after consummation of the exchange offer or such time as any broker-dealer no longer owns any registrable securities, we will make this prospectus, as it may be amended or supplemented from time to time, available to any broker-dealer for use in connection with any such resale. All dealers effecting transactions in the new notes will be required to deliver a prospectus.

      We will not receive any proceeds from any sale of new notes by broker-dealers or any other holder of new notes. New notes received by broker-dealers for their own account in the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such new notes. Any broker-dealer that resells new notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such new notes may be deemed to be an “underwriter” within the meaning of the Securities Act of 1933, and any profit on any such resale of new notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act of 1933. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933.

      For a period of 180 days after consummation of the exchange offer (or, if earlier, until such time as any broker-dealer no longer owns any registrable securities), we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer and to our performance of, or compliance with, the exchange and registration rights agreement (other than commissions or concessions of any brokers or dealers) and will indemnify the holders of the notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act of 1933.

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LEGAL MATTERS

      The validity of the new notes offered in this prospectus will be passed upon for the issuers by Irell & Manella LLP, Los Angeles, California.

EXPERTS

      The consolidated balance sheet of CCH II, LLC and its subsidiaries as of December 31, 2003 and 2002, and the consolidated statements of operations, changes in member’s equity and cash flows for each of the years in the three year period ended December 31, 2003, included in this prospectus, have been audited by KPMG LLP, independent auditors, as stated in their reports appearing herein, which include an explanatory paragraph regarding the adoption, effective January 1, 2002, of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets and effective January 1, 2003 of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, as amended by Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of FASB Statement No. 123.

WHERE YOU CAN FIND MORE INFORMATION

      The indenture governing the new notes will provide that, regardless of whether they are at any time required to file reports with the SEC, the issuers will file with the SEC and furnish to the holders of the new notes all such reports and other information as would be required to be filed with the SEC if the issuers were subject to the reporting requirements of the Exchange Act.

      While any new notes remain outstanding, the issuers will make available upon request to any holder and any prospective purchaser of new notes the information required pursuant to Rule 144A(d)(4) under the Securities Act during any period in which the issuers are not subject to Section 13 or 15(d) of the Exchange Act. This prospectus contains summaries, believed to be accurate in all material respects, of certain terms of certain agreements regarding this exchange offer and the new notes (including but not limited to the indenture governing your new notes), but reference is hereby made to the actual agreements, copies of which will be made available to you upon request to us, for complete information with respect thereto, and all such summaries are qualified in their entirety by this reference. Any such request for the agreements summarized herein should be directed to Investor Relations, CCH II, LLC, Charter Plaza, 12405 Powerscourt Drive, St. Louis, Missouri 63131, telephone number (314) 965-0555.

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INDEX TO FINANCIAL STATEMENTS

		Page
CCH II, LLC and Subsidiaries:
	Independent Auditors’ Report		F-2
	Consolidated Balance Sheets as of December 31, 2003 and 2002		F-3
	Consolidated Statements of Operations for the Years Ended December 31, 2003, 2002 and 2001		F-4
	Consolidated Statements of Changes in Member’s Equity for the Years Ended December 31, 2003, 2002 and 2001		F-5
	Consolidated Statements of Cash Flows for the Years Ended December 31, 2003, 2002 and 2001		F-6
	Notes to Consolidated Financial Statements		F-7

F-1

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors

CCH II, LLC:

      We have audited the accompanying consolidated balance sheets of CCH II, LLC and subsidiaries (a combination of historical operations of certain Charter Communications Holdings, LLC subsidiaries — Note 1) (the “Company”) as of December 31, 2003 and 2002, and the related consolidated statements of operations, changes in member’s equity and cash flows for each of the three years in the period ended December 31, 2003. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

      We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CCH II, LLC and subsidiaries as of December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

      As discussed in Note 3 to the consolidated financial statements, effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

      As discussed in Note 16 to the consolidated financial statements, effective January 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, as amended by Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of FASB Statement No. 123.

/s/ KPMG LLP

St. Louis, Missouri

March 1, 2004, except as to

Note 24, which is as of

April 27, 2004.

F-2

CCH II, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS — SEE NOTE 1

				December 31,
				2003			2002
				(dollars in millions)
CURRENT ASSETS:
	Cash and cash equivalents			$	85		$	310
	Accounts receivable, less allowance for doubtful accounts of $17 and $19, respectively				178			249
	Receivables from parent company				59			43
	Prepaid expenses and other current assets				21			40
			Total current assets		343			642
INVESTMENT IN CABLE PROPERTIES:
	Property, plant and equipment, net of accumulated depreciation of $3,834 and $2,550, respectively				6,808			7,460
	Franchises, net of accumulated amortization of $3,445 and $3,452, respectively				13,680			13,727
			Total investment in cable properties, net		20,488			21,187
OTHER NONCURRENT ASSETS					178			155
			Total assets	$	21,009		$	21,984
CURRENT LIABILITIES:
	Accounts payable and accrued expenses			$	993		$	1,106
			Total current liabilities		993			1,106
LONG-TERM DEBT					9,557			8,066
LOANS PAYABLE — PARENT COMPANY					37			133
DEFERRED MANAGEMENT FEES — PARENT COMPANY					14			14
OTHER LONG-TERM LIABILITIES					738			932
MINORITY INTEREST					719			693
MEMBER’S EQUITY:
	Member’s equity				9,008			11,145
	Accumulated other comprehensive loss				(57	)		(105	)
		Total member’s equity			8,951			11,040
		Total liabilities and member’s equity		$	21,009		$	21,984

The accompanying notes are an integral part of these consolidated financial statements.

F-3

CCH II, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS — SEE NOTE 1

			Year Ended December 31,
			2003			2002			2001
			(dollars in millions)
REVENUES			$	4,819		$	4,566		$	3,807
COSTS AND EXPENSES:
	Operating (excluding depreciation and amortization)			1,952			1,807			1,486
	Selling, general and administrative			940			963			826
	Depreciation and amortization			1,479			1,439			2,693
	Impairment of franchises			—			4,638			—
	Gain on sale of system			(21	)		—			—
	Option compensation expense (income), net			4			5			(5	)
	Special charges, net			21			36			18
	Unfavorable contracts and other settlements			(72	)		—			—
				4,303			8,888			5,018
		Income (loss) from operations		516			(4,322	)		(1,211	)
OTHER INCOME (EXPENSE):
	Interest expense, net			(545	)		(512	)		(525	)
	Gain (loss) on derivative instruments and hedging activities, net			65			(115	)		(50	)
	Other, net			(9	)		3			(52	)
				(489	)		(624	)		(627	)
		Income (loss) before minority interest, income taxes and cumulative effect of accounting change		27			(4,946	)		(1,838	)
MINORITY INTEREST				(29	)		(16	)		(16	)
		Loss before income taxes and cumulative effect of accounting change		(2	)		(4,962	)		(1,854	)
INCOME TAX BENEFIT (EXPENSE)				(13	)		216			27
		Loss before cumulative effect of accounting change		(15	)		(4,746	)		(1,827	)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX				—			(540	)		(24	)
		Net loss	$	(15	)	$	(5,286	)	$	(1,851	)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

CCH II, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER’S EQUITY — SEE NOTE 1

					Accumulated
					Other
					Comprehensive			Total
		Member’s Equity			Income (Loss)			Member’s Equity
		(dollars in millions)
BALANCE, December 31, 2000		$	13,493		$	—		$	13,493
	Capital contribution		4,767			—			4,767
	Distributions to parent company		(424	)		—			(424	)
	Changes in fair value of interest rate agreements		—			(39	)		(39	)
	Other		(5	)		—			(5	)
	Net loss		(1,851	)		—			(1,851	)
	Unrealized loss on marketable securities available for sale		—			(1	)		(1	)
BALANCE, December 31, 2001			15,980			(40	)		15,940
	Capital contribution		859			—			859
	Distributions to parent company		(413	)		—			(413	)
	Changes in fair value of interest rate agreements		—			(65	)		(65	)
	Other		5			—			5
	Net loss		(5,286	)		—			(5,286	)
BALANCE, December 31, 2002		$	11,145		$	(105	)	$	11,040
	Capital contribution		10			—			10
	Distributions to parent company		(2,133	)		—			(2,133	)
	Changes in fair value of interest rate agreements		—			48			48
	Other		1			—			1
	Net loss		(15	)		—			(15	)
BALANCE, December 31, 2003		$	9,008		$	(57	)	$	8,951

The accompanying notes are an integral part of these consolidated financial statements.

F-5

CCH II, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS — SEE NOTE 1

				Year Ended December 31,
				2003			2002			2001
				(dollars in millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net loss			$	(15	)	$	(5,286	)	$	(1,851	)
	Adjustments to reconcile net loss to net cash flows from operating activities:
		Minority interest			29			16			16
		Depreciation and amortization			1,479			1,439			2,693
		Impairment of franchises			—			4,638			—
		Option compensation expense, net			4			5			(5	)
		Noncash interest expense			38			38			29
		Loss on equity investments			—			—			49
		(Gain) loss on derivative instruments and hedging activities, net			(65	)		115			50
		Gain on sale of system			(21	)		—			—
		Deferred income taxes			13			(216	)		(27	)
		Cumulative effect of accounting change			—			540			24
		Unfavorable contracts and other settlements			(72	)		—			—
	Changes in operating assets and liabilities, net of effects from acquisitions:
		Accounts receivable			69			21			(61	)
		Prepaid expenses and other current assets			12			18			(18	)
		Accounts payable, accrued expenses and other			(103	)		38			69
		Receivables from and payables to parent company, including deferred management fees			(47	)		(42	)		(2	)
		Other operating activities			—			1			9
			Net cash flows from operating activities		1,321			1,325			975
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of property, plant and equipment				(804	)		(2,095	)		(2,795	)
	Changes in accounts payable and accrued expenses related to capital expenditures				(41	)		(49	)		(103	)
	Proceeds from sale of system				91			—			—
	Payments for acquisitions, net of cash acquired				—			(139	)		(1,710	)
	Purchases of investments				—			(3	)		(6	)
	Other investing activities				(3	)		1			(15	)
			Net cash flows from investing activities		(757	)		(2,285	)		(4,629	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Borrowings of long-term debt				739			3,213			3,425
	Repayments of long-term debt				(1,368	)		(2,135	)		(4,018	)
	Borrowings of (repayments to) parent companies				(96	)		(233	)		290
	Proceeds from issuance of debt				530			—			—
	Payments for debt issuance costs				(42	)		(21	)		(12	)
	Capital contributions				10			859			4,271
	Distributions				(562	)		(413	)		(424	)
			Net cash flows from financing activities		(789	)		1,270			3,532
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS					(225	)		310			(122	)
CASH AND CASH EQUIVALENTS, beginning of period					310			—			122
CASH AND CASH EQUIVALENTS, end of period				$	85		$	310		$	—
CASH PAID FOR INTEREST				$	457		$	485		$	548
NONCASH TRANSACTIONS:
	Issuance of debt distributed to retire parent company debt			$	1,571		$	—		$	—
	Exchange of assets for acquisition				—			—			25
	Loan payable forgiveness by parent company				—			—			394
	Transfer of equity interests to the Company				—			—			102

The accompanying notes are an integral part of these consolidated financial statements.

F-6

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2003, 2002 AND 2001

(dollars in millions, except where indicated)

1. Organization and Basis of Presentation

      CCH II, LLC (CCH II) is a holding company whose primary assets are equity interests in its cable operating subsidiaries. CCH II, LLC was formed in March 2003 and is a wholly owned subsidiary of CCH I, LLC (CCH I). CCH I is a wholly owned subsidiary of Charter Communications Holdings, LLC (Charter Holdings). Charter Holdings is a wholly owned subsidiary of Charter Communications Holding Company, LLC (Charter Holdco), which is a subsidiary of Charter Communications, Inc. (Charter).

      CCH II is the sole owner of CCO Holdings, LLC (CCO Holdings), which in turn is sole owner of Charter Communications Operating, LLC (Charter Operating). Charter Operating was formed in February 1999 to own and operate its cable systems. In June and July of 2003, Charter Holdings entered into a series of transactions and contributions which had the effect of i) creating CCH I, CCH II and CCO Holdings and ii) combining/ contributing all of Charter Holdings’ interest in cable operations not previously owned by Charter Operating to Charter Operating (the “Systems Transfer”). The Systems Transfer was accounted for as a reorganization of entities under common control. Accordingly, the accompanying financial statements combine the historical financial condition and results of operations of Charter Operating, and the operations of subsidiaries contributed by Charter Holdings, for 2000, 2001 and 2002. CCH II and its subsidiaries are collectively referred herein as the “Company.” All significant intercompany accounts and transactions among consolidated entities have been eliminated. The Company is a broadband communications company operating in the United States. The Company offers its customers traditional video programming (analog and digital video) as well as high-speed data services and in some areas advanced broadband services such as high definition television, video on demand, telephony and interactive television. The Company sells its video programming, high-speed data and advanced broadband services on a subscription basis.

      The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Areas involving significant judgments and estimates include capitalization of labor and overhead costs; depreciation and amortization costs; impairments of property, plant and equipment, franchises and goodwill; income taxes; and contingencies. Actual results could differ from those estimates.

      Reclassifications.  Certain 2002 and 2001 amounts have been reclassified to conform with the 2003 presentation.

2. Liquidity and Capital Resources

      The Company recognized income from operations of $516 million in 2003 and incurred losses from operations of $4.3 billion and $1.2 billion in 2002 and 2001, respectively. The Company’s net cash flows from operating activities were $1.3 billion, $1.3 billion and $975 million for the years ending December 31, 2003, 2002 and 2001, respectively. The Company has historically required significant cash to fund capital expenditures and debt service costs. Historically the Company has funded these requirements through cash flows from operating activities, borrowing under the credit facilities of the Company’s subsidiaries, equity contributions from its parent and borrowing from parent companies. The mix of funding sources changes from period to period, but for the year ended December 31, 2003, approximately 85% of the Company’s funding requirements were satisfied from cash flows from operating activities and 15% was from cash on hand. For the year ended December 31, 2003, the Company received $91 million from the sale of the Port Orchard, Washington cable system. Additionally, the Company had net cash flows used in financing activities of $789 million, reflecting a net repayment of debt, and reduced cash on hand by $225 million.

F-7

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The Company expects that cash on hand, cash flows from operating activities and the funds available under its subsidiaries’ credit facilities will be adequate to meet its 2004 cash needs. However, these credit facilities are subject to certain restrictive covenants, portions of which are subject to the operating results of the Company’s subsidiaries. The Company expects to maintain compliance with these covenants in 2004. If the Company’s actual operating results do not result in compliance with these covenants, or if other events of noncompliance occur, funding under the credit facilities may not be available and defaults on some or potentially all debt obligations could occur. Additionally, no assurances can be given that the Company will not experience liquidity problems because of adverse market conditions or other unfavorable events. Further, cash flows from operating activities and amounts available under credit facilities may not be sufficient to permit the Company to satisfy its principal repayment obligations that come due in 2005 and thereafter.

      On October 1, 2003 the Company closed on the sale of its Port Orchard, Washington system for approximately $91 million, resulting in a $21 million gain recorded as gain on sale of system in the Company’s consolidated statement of operations. On March 1, 2004, the Company closed the sale of cable systems in Florida, Pennsylvania, Maryland, Delaware and West Virginia with Atlantic Broadband Finance, LLC. The Company anticipates that an additional closing for a cable system in New York will occur during the first half of 2004. After giving effect to the sale of the New York system, net proceeds will be approximately $733 million, subject to post-closing adjustments. The Company will use these proceeds to repay bank debt.

      Charter’s ability to make interest payments, or principal payments at maturity in 2005 and 2006, on its convertible senior notes is dependent on its ability to obtain additional financing and on Charter Holdings and its other subsidiaries making distributions, loans or payments to Charter Holdco, and on Charter Holdco paying or distributing such funds to Charter. The Company’s parent companies have a substantial amount of debt. Any financial or liquidity problems of the parent companies would likely cause serious disruption to the Company’s business and have a material adverse effect on its operations and results.

      The Company’s long-term financing structure as of December 31, 2003 includes $7.2 billion of credit facility debt and $2.3 billion of high-yield notes. Approximately $188 million of this financing matures during 2004, and the Company expects to fund this through availability under its credit facilities. Note 9 summarizes the Company’s current availability under its credit facilities and its long-term debt.

3. Summary of Significant Accounting Policies

Cash Equivalents

      The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. These investments are carried at cost, which approximates market value.

Property, Plant and Equipment

      Property, plant and equipment is recorded at cost, including all material labor and certain indirect costs associated with the construction of cable transmission and distribution facilities. Costs associated with initial customer installations and the additions of network equipment necessary to enable advanced services are capitalized. Costs capitalized as part of initial customer installations include materials, labor, and certain indirect costs. These indirect costs are associated with the activities of the Company’s personnel who assist in connecting and activating the new service and consist of compensation and overhead costs associated with these support functions. Overhead costs primarily include employee benefits and payroll taxes, direct variable costs associated with capitalizable activities, consisting primarily of installation and construction vehicle costs, the cost of dispatch personnel and indirect costs directly attributable to

F-8

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

capitalizable activities. The costs of disconnecting service at a customer’s dwelling or reconnecting service to a previously installed dwelling are charged to operating expense in the period incurred. Costs for repairs and maintenance are charged to operating expense as incurred, while equipment replacement and betterments, including replacement of cable drops from the pole to the dwelling, are capitalized.

      Depreciation is recorded using the straight-line method over management’s estimate of the useful lives of the related assets as follows:

Cable distribution systems	7-15 years
Customer equipment and installations	3-5 years
Vehicles and equipment	1-5 years
Buildings and leasehold improvements	5-15 years
Furniture and fixtures	5 years

Franchises

      Franchise rights represent the value attributed to agreements with local authorities that allow access to homes in cable service areas acquired through the purchase of cable systems. Management estimates the fair value of franchise rights at the date of acquisition and determines if the franchise has a finite life or an indefinite life as defined by Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets. On January 1, 2002, the Company adopted SFAS No. 142, which eliminates the amortization of goodwill and indefinite lived intangible assets. Accordingly, beginning January 1, 2002, all franchises that qualify for indefinite life treatment under SFAS No. 142 are no longer amortized against earnings but instead are tested for impairment annually as of October 1, or more frequently as warranted by events or changes in circumstances (See Note 7). The Company concluded that 99% of its franchises qualify for indefinite-life treatment; however, certain franchises did not qualify for indefinite-life treatment due to technological or operational factors that limit their lives. These franchise costs are amortized on a straight-line basis over 10 years. Costs incurred in renewing cable franchises are deferred and amortized over 10 years.

      Prior to the adoption of SFAS No. 142, costs incurred in obtaining and renewing cable franchises were deferred and amortized using the straight-line method over a period of 15 years. Franchise rights acquired through the purchase of cable systems were generally amortized using the straight-line method over a period of 15 years. The period of 15 years was management’s best estimate of the useful lives of the franchises and assumed that substantially all of those franchises that expired during the period would be renewed but not indefinitely. The Company evaluated the recoverability of franchises for impairment when events or changes in circumstances indicated that the carrying amount of an asset may not be recoverable.

Other Noncurrent Assets

      Other noncurrent assets primarily include goodwill, deferred financing costs and investments in equity securities. Costs related to borrowings are deferred and amortized to interest expense using the effective interest method over the terms of the related borrowings. As of December 31, 2003 and 2002, other noncurrent assets include $81 million and $54 million of deferred financing costs, net of accumulated amortization of $40 million and $28 million, respectively.

      Investments in equity securities are accounted for at cost, under the equity method of accounting or in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. The Company recognizes losses for any decline in value considered to be other than temporary. Certain marketable equity securities are classified as available-for-sale and reported at market value with unrealized gains and losses recorded as accumulated other comprehensive income or loss.

F-9

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following summarizes investment information as of and for the years ended December 31, 2003 and 2002 (in millions):

					Gain (loss)
	Carrying				for the Year
	Value at				Ended
	December 31,				December 31,
	2003		2002		2003			2002
Equity investments, under the cost method	$	11	$	7	$	(2	)	$	—
Equity investments, under the equity method		10		14		2			(2	)
Marketable securities, at market value		—		—		—			2
	$	21	$	21	$	—		$	—

Valuation of Property, Plant and Equipment

      The Company evaluates the recoverability of property, plant and equipment, for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such events or changes in circumstances could include such factors as changes in technological advances, fluctuations in the fair value of such assets, adverse changes in relationships with local franchise authorities, adverse changes in market conditions or poor operating results. If a review indicates that the carrying value of such asset is not recoverable from estimated undiscounted cash flows, the carrying value of such asset is reduced to its estimated fair value. While the Company believes that its estimates of future cash flows are reasonable, different assumptions regarding such cash flows could materially affect its evaluations of asset recoverability. No impairment of property, plant and equipment occurred in 2003, 2002 and 2001.

Derivative Financial Instruments

      The Company accounts for derivative financial instruments in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, which became effective for the Company on January 1, 2001. The Company uses interest rate risk management derivative instruments, such as interest rate swap agreements, interest rate cap agreements and interest rate collar agreements (collectively referred to herein as interest rate agreements) as required under the terms of the credit facilities of the Company’s subsidiaries. The Company’s policy is to manage interest costs using a mix of fixed and variable rate debt. Using interest rate swap agreements, the Company agrees to exchange, at specified intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. Interest rate cap agreements are used to lock in a maximum interest rate should variable rates rise, but enable the Company to otherwise pay lower market rates. Interest rate collar agreements are used to limit exposure to and benefits from interest rate fluctuations on variable rate debt to within a certain range of rates. The Company does not hold or issue any derivative financial instruments for trading purposes.

Revenue Recognition

      Revenues from residential and commercial video and high-speed data services are recognized when the related services are provided. Advertising sales are recognized at estimated realizable values in the period that the advertisements are broadcast. Local governmental authorities impose franchise fees on the Company ranging up to a federally mandated maximum of 5% of gross revenues as defined in the franchise agreement. Such fees are collected on a monthly basis from the Company’s customers and are periodically remitted to local franchise authorities. Franchise fees collected and paid are reported as revenues on a gross basis with a corresponding expense pursuant to Emerging Issues Task Force (“EITF”)

F-10

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Issue No. 01-14, Income Statement Characterization of Reimbursements Received for ’Out of Pocket’ Expenses Incurred.

Programming Costs

      The Company has various contracts to obtain analog, digital and premium video programming from program suppliers whose compensation is typically based on a flat fee per customer. The cost of the right to exhibit network programming under such arrangements is recorded in operating expenses in the month the programming is available for exhibition. Programming costs are paid each month based on calculations performed by the Company and are subject to adjustment based on periodic audits performed by the programmers. Additionally, certain programming contracts contain launch incentives to be paid by the programmers. The Company receives these payments related to the promotion and activation of the programmer’s cable television channel and recognizes the launch incentives on a straight-line basis over the life of the programming agreement as a reduction of programming expense. This offset to programming expense was $62 million, $57 million and $35 million for the years ended December 31, 2003, 2002 and 2001, respectively. Programming costs included in the accompanying statement of operations were $1.2 billion, $1.2 billion and $963 million for the years ended December 31, 2003, 2002 and 2001, respectively. As of December 31, 2003 and 2002, the deferred amount of launch incentives, included in other long-term liabilities, totaled $148 million and $210 million, respectively.

Advertising Costs

      Advertising costs associated with marketing the Company’s products and services are generally expensed as costs are incurred. Such advertising expense was $62 million, $60 million and $43 million for the years ended December 31, 2003, 2002 and 2001, respectively.

Stock-Based Compensation

      The Company has historically accounted for stock-based compensation in accordance with Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, as permitted by SFAS No. 123, Accounting for Stock-Based Compensation. On January 1, 2003, the Company adopted the fair value measurement provisions of SFAS No. 123 using the prospective method under which the Company will recognize compensation expense of a stock-based award to an employee over the vesting period based on the fair value of the award on the grant date consistent with the method described in Financial Accounting Standards Board Interpretation “FIN” No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans. Adoption of these provisions resulted in utilizing a preferable accounting method as the consolidated financial statements will present the estimated fair value of stock-based compensation in expense consistently with other forms of compensation and other expense associated with goods and services received for equity instruments. In accordance with SFAS No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure, the fair value method will be applied only to awards granted or modified after January 1, 2003, whereas awards granted prior to such date will continue to be accounted for under APB No. 25, unless they are modified or settled in cash. Management believes the adoption of these provisions will not have a material impact on the consolidated results of operations or financial condition of the Company. The ongoing effect on consolidated results of operations or financial condition will be dependent upon future stock-based compensation awards granted by the Company.

      SFAS No. 123 requires pro forma disclosure of the impact on earnings as if the compensation expense for these plans had been determined using the fair value method. The following table presents the

F-11

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company’s net loss as reported and the pro forma amounts that would have been reported using the fair value method under SFAS 123 for the years presented (in millions):

	Year Ended December 31,
	2003			2002			2001
Net loss	$	(15	)	$	(5,286	)	$	(1,851	)
Add back stock-based compensation expense (income) related to stock options included in reported net loss		4			5			(5	)
Less employee stock-based compensation expense determined under fair value based method for all employee stock option awards		(30	)		(105	)		(100	)
Pro forma		(41	)		(5,386	)		(1,956	)

      The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model. The following weighted average assumptions were used for grants during the years ended December 31, 2003, 2002 and 2001, respectively: risk-free interest rates of 3.0%, 3.6%, and 4.7%; expected volatility of 93.6%, 64.2% and 56.2%; and expected lives of 3.5 years, 3.3 years and 3.7 years, respectively. The valuations assume no dividends are paid.

Unfavorable Contracts and Other Settlements

      The Company recognized $72 million of benefit for the year ended December 31, 2003 as a result of the settlement of estimated liabilities recorded in connection with prior business combinations. The majority of this benefit (approximately $52 million) is due to the renegotiation of a major programming contract, for which a liability had been recorded for the above market portion of the agreement in conjunction with the Falcon acquisition in 1999 and the Bresnan acquisition in 2000. The remaining benefit relates to the reversal of previously recorded liabilities, which, based on an evaluation of current facts and circumstances, are no longer required.

Income Taxes

      The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities and expected benefits of utilizing net operating loss carryforwards. The impact on deferred taxes of changes in tax rates and tax law, if any, applied to the years during which temporary differences are expected to be settled, are reflected in the consolidated financial statements in the period of enactment. See Note 18.

Minority Interest

      Minority interest on the Company’s consolidated balance sheets represents $694 million and $668 million of preferred membership interests in CC VIII, LLC (“CC VIII”), an indirect subsidiary of CCH II, as of December 31, 2003 and 2002, respectively. The preferred membership interests in CC VIII accrete at 2% per annum and since June 6, 2003, share pro rata in the profits of CC VIII. As more fully described in Note 19, this preferred interest arises from the approximately $630 million of preferred membership units issued by CC VIII in connection with the Bresnan acquisition in February, 2000. As of December 31, 2003 and December 31, 2002, minority interest also includes $25 million of preferred interest in Charter Helicon, LLC issued in connection with the Helicon acquisition. The preferred interest in Charter Helicon, LLC accrues interest at 10% per annum.

Segments

      SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, established standards for reporting information about operating segments in annual financial statements and in interim financial reports issued to shareholders. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief

F-12

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

operating decisionmaker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance of the segment.

      The Company’s operations are managed on the basis of geographic divisional operating segments. The Company has evaluated the criteria for aggregation of the geographic operating segments under paragraph 17 of SFAS No. 131 and believes it meets each of the respective criteria set forth. The Company delivers similar products and services within each of its geographic divisional operations. Each geographic and divisional service area utilizes similar means for delivering the programming of the Company’s services; have similarity in the type or class of customer receiving the products and services; distributes the Company’s services over a unified network; and operates within a consistent regulatory environment. In addition, each of the geographic divisional operating segments has similar economic characteristics. In light of the Company’s similar services, means for delivery, similarity in type of customers, the use of a unified network and other considerations across its geographic divisional operating structure, management has determined that the Company has one reportable segment, broadband services.

4. Acquisitions

      On February 28, 2002, CC Systems, LLC, a subsidiary of the Company, and High Speed Access Corp. (HSA) closed the Company’s acquisition from HSA of the contracts and associated assets, and assumed related liabilities, that served certain of the Company’s high-speed data customers. At closing, the Company paid approximately $78 million in cash and delivered 37,000 shares of HSA’s Series D convertible preferred stock and all the warrants to buy HSA common stock owned by the Company. An additional $2 million of purchase price was retained to secure indemnity claims. The purchase price has been allocated to assets acquired and liabilities assumed based on fair values as determined in the fourth quarter of 2002 by a third-party valuation expert, including approximately $8 million assigned to intangible assets and amortized over an average useful life of three years and approximately $54 million assigned to goodwill. In 2003, as part of the finalization of the HSA acquisition, goodwill was reduced to $52 million. The finalization of the purchase price did not have a material effect on amortization expense previously reported. During the period from 1997 to 2000, certain subsidiaries of the Company entered into Internet-access related service agreements with HSA, and both Vulcan Ventures and certain of the Company’s subsidiaries made equity investments in HSA. (See Note 19).

      In April 2002, Interlink Communications Partners, LLC, Rifkin Acquisition Partners, LLC and Charter Communications Entertainment I, LLC, each an indirect, wholly-owned subsidiary of CCH II, completed the purchase of certain assets of Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar Cable of Macoupin County and Enstar IV/ PBD Systems Venture, serving approximately 21,600 (unaudited) customers, for a total cash purchase price of $48 million. In September 2002, Charter Communications Entertainment I, LLC purchased all of Enstar Income Program II-1, L.P.’s Illinois cable systems, serving approximately 6,400 (unaudited) customers, for a cash purchase price of $15 million. Enstar Communications Corporation, a direct subsidiary of Charter Holdco, is a general partner of the Enstar limited partnerships but does not exercise control over them. The purchase prices were allocated to assets acquired based on fair values, including $41 million assigned to franchises and $4 million assigned to other intangible assets amortized over a useful life of three years.

      The 2002 acquisitions were funded primarily from borrowings under the credit facilities of the Company’s subsidiaries.

      During the second quarter in 2001, the Company acquired cable systems for aggregate cash consideration of $1.7 billion, and a cable system valued at $25 million. In addition, Charter and Charter Holdings completed the acquisition of several cable systems for a total purchase price of $102 million, consisting of $47 million in cash and 505,664 shares of Charter Series A Convertible Redeemable

F-13

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Preferred Stock valued at $51 million, and 39,595 additional shares of Charter Series A Convertible Redeemable Preferred Stock to certain sellers subject to certain holdback provisions of the acquisition agreement valued at $4 million issued in the first quarter of 2003. Subsequent to the acquisition, the acquired assets were contributed to the Company. The purchase prices were allocated to assets acquired and liabilities assumed based on fair values, including amounts assigned to franchises of $1.5 billion.

      The transactions described above were accounted for using the purchase method of accounting, and, accordingly, the results of operations of the acquired assets and assumed liabilities have been included in the consolidated financial statements from their respective dates of acquisition. The purchase prices were allocated to assets acquired and liabilities assumed based on fair values.

      The summarized operating results of the Company that follow are presented on a pro forma basis as if all acquisitions and dispositions completed during 2001 had occurred on January 1, 2001. Adjustments have been made to give effect to amortization of franchises acquired prior to July 1, 2001, interest expense, and certain other adjustments. Pro forma results for the years ended December 31, 2003 and 2002 would not differ significantly from historical results.

	Year Ended
	December 31,
	2001
	(in millions)
Revenues	$	3,969
Loss from operations		(1,211	)
Net loss		(1,841	)

      The unaudited pro forma financial information has been presented for comparative purposes and does not purport to be indicative of the consolidated results of operations had these transactions been completed as of the assumed date or which may be obtained in the future.

5.  Allowance for Doubtful Accounts

      Activity in the allowance for doubtful accounts is summarized as follows for the years presented (in millions):

	Year Ended December 31,
	2003			2002			2001
Balance, beginning of year	$	19		$	33		$	12
Acquisitions of cable systems		—			—			1
Charged to expense		79			108			95
Uncollected balances written off, net of recoveries		(81	)		(122	)		(75	)
Balance, end of year	$	17		$	19		$	33

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

6.  Property, Plant and Equipment

      Property, plant and equipment consists of the following as of December 31, 2003 and 2002 (in millions):

	2003			2002
Cable distribution systems	$	9,461		$	8,910
Land, buildings and leasehold improvements		524			521
Vehicles and equipment		657			579
		10,642			10,010
Less: accumulated depreciation		(3,834	)		(2,550	)
	$	6,808		$	7,460

      The Company periodically evaluates the estimated useful lives used to depreciate its assets and the estimated amount of assets that will be abandoned or have minimal use in the future. A significant change in assumptions about the extent or timing of future asset retirements, or in the Company’s use of new technology and upgrade programs, could materially affect future depreciation expense.

      For the years ended December 31, 2003, 2002 and 2001, depreciation expense was $1.5 billion, $1.4 billion, and $1.2 billion, respectively.

7.  Franchises and Goodwill

      The Company constructs and operates its cable systems under non-exclusive franchises that are granted by state or local government authorities for varying lengths of time. As of December 31, 2003, the Company had approximately 4,400 franchises in areas located throughout the United States. The Company obtained these franchises primarily through acquisitions of cable systems accounted for as purchase business combinations. These acquisitions have primarily been for the purpose of acquiring existing franchises and related infrastructure and, as such, the primary asset acquired by the Company has historically been cable franchises.

      On January 1, 2002, the Company adopted SFAS No. 142, which eliminates the amortization of indefinite lived intangible assets. Accordingly, beginning January 1, 2002, all franchises that qualify for indefinite life treatment under SFAS No. 142 are no longer amortized against earnings but instead will be tested for impairment annually, or more frequently as warranted by events or changes in circumstances. During the first quarter of 2002, the Company had an independent appraiser perform valuations of its franchises as of January 1, 2002. Based on the guidance prescribed in EITF Issue No. 02-7, Unit of Accounting for Testing of Impairment of Indefinite-Lived Intangible Assets, franchises were aggregated into essentially inseparable asset groups to conduct the valuations. The asset groups generally represented geographic clusters of the Company’s cable systems, which management then believed represented the highest and best use of those assets. Fair value was determined based on estimated discounted future cash flows using assumptions that are consistent with internal forecasts. As a result, the Company determined that franchises were impaired and recorded the cumulative effect of a change in accounting principle of $540 million (net of tax effects of $32 million). As required by SFAS No. 142, the standard has not been retroactively applied to the results for the period prior to adoption.

      The Company performed its annual impairment assessment as of October 1, 2002 using an independent third-party appraiser and following the guidance of EITF Issue 02-17, Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination, which was issued in October 2002 and requires the consideration of assumptions that marketplace participants would consider, such as expectations of future contract renewals and other benefits related to the intangible asset. Revised

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

estimates of future cash flows and the use of a lower projected long-term growth rate in the Company’s valuation led to recognition of a $4.6 billion impairment charge in the fourth quarter of 2002.

      The independent third-party appraiser’s valuations as of January 1, 2002, October 1, 2002 and October 1, 2003 yielded total enterprise values of approximately $30 billion, $25 billion and $25 billion, respectively, which included approximately $2.4 billion, $3.1 billion and $3.2 billion, respectively, assigned to customer relationships. SFAS No. 142 does not permit the recognition of intangible assets not previously recognized. Accordingly, the impairment included approximately $572 million and $3.1 billion, before tax effects, attributable to customer relationships as of January 1, 2002 and October 1, 2002, respectively. The valuation completed at October 1, 2003 showed franchise values in excess of book value and thus resulted in no impairment. Additionally, as a result of the sale of the Port Orchard, Washington cable system on October 1, 2003, net carrying value of franchises were reduced by $42 million.

      In determining whether its franchises have an indefinite life, the Company considered the exclusivity of the franchise, its expected costs of franchise renewals, and the technological state of the associated cable systems with a view to whether or not the Company is in compliance with any technology upgrading requirements. Certain franchises did not qualify for indefinite-life treatment due to technological or operational factors that limit their lives. These franchise costs will be amortized on a straight-line basis over 10 years.

      The effect of the adoption of SFAS No. 142 as of December 31, 2003 and 2002 is presented in the following table (in millions):

		December 31,
		2003						2002
		Gross				Net		Gross				Net
		Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
		Amount		Amortization		Amount		Amount		Amortization		Amount
Indefinite-lived intangible assets:
	Franchises with indefinite lives	$	17,018	$	3,412	$	13,606	$	17,076	$	3,428	$	13,648
	Goodwill		52		—		52		54		—		54
		$	17,070	$	3,412	$	13,658	$	17,130	$	3,428	$	13,702
Finite-lived intangible assets:
	Franchises with finite lives	$	107	$	33	$	74	$	103	$	24	$	79

      Franchise amortization expense for each of the years ended December 31, 2003 and 2002 was $9 million which represents the amortization relating to franchises that did not qualify for indefinite-life treatment under SFAS No. 142, including costs associated with franchise renewals. The Company expects amortization expense on franchise assets will decrease to approximately $4 million annually based on its ability in 2003 to renew franchise agreements the Company previously classified as having finite lives without substantial costs. Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions or divestitures, changes in useful lives and other relevant factors. Franchise amortization expense for the year ended December 31, 2001 was $1.5 billion.

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      As required by SFAS No. 142, the standard has not been retroactively applied to the results for the period prior to adoption. A reconciliation of net loss for the years ended December 31, 2003, 2002 and 2001, as if SFAS No. 142 had been adopted as of January 1, 2001, is presented below (in millions):

			Year Ended December 31,
			2003			2002			2001
NET LOSS:
	Reported net loss		$	(15	)	$	(5,286	)	$	(1,851	)
	Add back: amortization of indefinite-lived franchises			—			—			1,453
		Adjusted net loss	$	(15	)	$	(5,286	)	$	(398	)

8.  Accounts Payable and Accrued Expenses

      Accounts payable and accrued expenses consist of the following as of December 31, 2003 and 2002 (in millions):

	2003		2002
Accounts payable	$	144	$	182
Capital expenditures		93		134
Accrued interest		142		92
Programming costs		268		282
Franchise related fees		70		70
State sales tax		61		67
Other accrued expenses		215		279
	$	993	$	1,106

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

9.  Long-Term Debt

      Long-term debt consists of the following as of December 31, 2003 and 2002 (in millions):

		2003				2002
		Face		Accreted		Face		Accreted
		Value		Value		Value		Value
Long-Term Debt
CCH II:
	10.250% senior notes due 2050	$	1,601	$	1,601	$	—	$	—
CCO Holdings:
	8 3/4% senior notes due 2013		500		500		—		—
Renaissance:
	10.00% senior discount notes due 2008		114		116		114		113
CC V Holdings:
	11.875% senior discount notes due 2008		113		113		180		163
Other long-term debt			—		—		1		1
Credit Facilities
Charter Operating			4,459		4,459		4,542		4,542
CC VI			868		868		926		926
Falcon Cable			856		856		1,155		1,155
CC VIII Operating			1,044		1,044		1,166		1,166
		$	9,555	$	9,557	$	8,084	$	8,066

      The accreted values presented above represent the face value of the notes less the original issue discount at the time of sale plus the accretion to the balance sheet date.

      CCH II Notes. In September 2003, CCH II and CCH II Capital Corp. jointly issued $1.6 billion total principal amount of 10.25% senior notes due 2010. The CCH II notes are general unsecured obligations of CCH II and CCH II Capital Corp. They rank equally with all other current or future unsubordinated obligations of CCH II and CCH II Capital Corp. The CCH II notes are structurally subordinated to all obligations of subsidiaries of CCH II, including the CCO Holdings notes and the credit facilities.

      Interest on the CCH II notes accrues at 10.25% per annum, from September 23, 2003 or, if interest already has been paid, from the date it was most recently paid. Interest is payable semi-annually in arrears on each March 15 and September 15, commencing on March 15, 2004.

      At any time prior to September 15, 2006, the issuers of the CCH II notes may redeem up to 35% of the total principal amount of the CCH II notes on a pro rata basis at a redemption price equal to 110.25% of the principal amount of CCH II notes redeemed, plus any accrued and unpaid interest.

      On or after September 15, 2008, the issuers of the CCH II notes may redeem all or a part of the notes at a redemption price that declines ratably from the initial redemption price of 105.125% to a redemption price on or after September 15, 2009 of 100.0% of the principal amount of the CCH II notes redeemed, plus, in each case, any accrued and unpaid interest.

      In the event of specified change of control events, CCH II must offer to purchase the outstanding CCH II notes from the holders at a purchase price equal to 101% of the total principal amount of the notes, plus any accrued and unpaid interest.

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      CCO Holdings Notes. In November 2003, CCO Holdings and CCO Holdings Capital Corp., jointly issued $500 million total principal amount of 8 3/4% senior notes due 2013. The CCO Holdings notes are general unsecured obligations of CCO Holdings and CCO Holdings Capital Corp. They rank equally with all other current or future unsubordinated obligations of CCO Holdings and CCO Holdings Capital Corp. The CCO Holdings notes are structurally subordinated to all obligations of its subsidiaries, including the credit facilities.

      Interest on the CCO Holdings senior notes accrues at 8 3/4% per year, from November 10, 2003 or, if interest already has been paid, from the date it was most recently paid. Interest is payable semi-annually in arrears on each May 15 and November 15, commencing on May 15, 2004.

      At any time prior to November 15, 2006, the issuers of the CCO Holdings senior notes may redeem up to 35% of the total principal amount of the CCO Holdings senior notes to the extent of public equity proceeds they have received on a pro rata basis at a redemption price equal to 108.75% of the principal amount of CCO Holdings senior notes redeemed, plus any accrued and unpaid interest.

      On or after November 15, 2008, the issuers of the CCO Holdings senior notes may redeem all or a part of the notes at a redemption price that declines ratably from the initial redemption price of 104.375% to a redemption price on or after November 15, 2011 of 100.0% of the principal amount of the CCO Holdings senior notes redeemed, plus, in each case, any accrued and unpaid interest.

      In the event of specified change of control events, CCO Holdings must offer to purchase the outstanding CCO Holdings senior notes from the holders at a purchase price equal to 101% of the total principal amount of the notes, plus any accrued and unpaid interest.

      Renaissance Notes. In connection with the acquisition of Renaissance (an indirect subsidiary of CCH II) in April 1999, the Company assumed $163 million principal amount at maturity of 10.000% senior discount notes due 2008 of which $49 million was repurchased in May 1999. The Renaissance notes did not require the payment of interest until April 15, 2003. From and after April 15, 2003, the Renaissance notes bear interest, payable semi-annually in cash, on April 15 and October 15, commencing on October 15, 2003. The Renaissance notes are due on April 15, 2008.

      CC V Holdings Notes. Charter Holdco acquired CC V Holdings (an indirect subsidiary of CCH II) in November 1999 and assumed CC V Holdings’ outstanding 11.875% senior discount notes due 2008 with an accreted value of $113 million as of December 31, 2003. Commencing December 1, 2003, cash interest on the CC V Holdings 11.875% notes will be payable semi-annually on June 1 and December 1 of each year.

      High Yield Restrictive Covenants; Limitation on Indebtedness. The indentures governing the notes of the Company’s subsidiaries contain certain covenants that restrict the ability of the CCH II, CCH II Capital Corp., CCO Holdings, CCO Holdings Capital Corp., the CC V notes issuers, Renaissance Media Group, and all of their restricted subsidiaries to:

•  incur additional debt;

•  pay dividends on equity or repurchase equity;

•  grant liens;

•  make investments;

•  sell all or substantially all of their assets or merge with or into other companies;

•  sell assets;

•  enter into sale-leasebacks;

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

•  in the case of restricted subsidiaries, create or permit to exist dividend or payment restrictions with respect to the bond issuers, guarantee their parent companies debt, or issue specified equity interests; and

•  engage in certain transactions with affiliates.

      Charter Operating Credit Facilities. The Charter Communications Operating, LLC (“Charter Operating”) credit facilities were amended and restated as of June 19, 2003 to allow for the insertion of intermediate holding companies between Charter Holdings and Charter Operating. In exchange for the lenders’ consent to the organizational restructuring, Charter Operating’s pricing increased by 50 basis points across all levels in the pricing grid then in effect under the Charter Operating credit facilities.

      Obligations under the Charter Operating credit facilities are guaranteed by Charter Holdings, CCO Holdings and by Charter Operating’s subsidiaries, other than the non-recourse subsidiaries, subsidiaries precluded from so guaranteeing by reason of the provisions of other indebtedness to which they are subject, and immaterial subsidiaries. The non-recourse subsidiaries include CCO NR Holdings, LLC, and subsidiaries contributed to CCO NR Holdings, LLC by Charter Holdings in the recent organizational restructuring that occurred in June and July of 2003, including the CC V/CC VIII Companies, the CC VI Companies and the CC VII Companies and their respective subsidiaries. The obligations under the Charter Operating credit facilities are secured by pledges of all equity interests in Charter Operating’s direct subsidiaries, all equity interests owned by its guarantor subsidiaries in their respective subsidiaries, and intercompany obligations owing to Charter Operating and/or its guarantor subsidiaries by their affiliates. The obligations are also secured by a pledge of CCO Holdings’ equity interests in all of its direct subsidiaries (including Charter Operating) as collateral under these credit facilities.

      The Charter Operating credit facilities provide for borrowings of up to $5.1 billion and provide for four term facilities: two Term A facilities with a total principal amount of $1.1 billion that matures in September 2007, each with different amortization schedules, one that began in June 2002 and one beginning in September 2005; and two Term B facilities with a total principal amount of $2.7 billion, of which $1.8 billion matures in March 2008 and $884 million matures in September 2008. The amortization of the principal amount of the Term B term loan facilities is substantially “back-ended” with more than 90% of the principal balance due in the year of maturity. The Charter Operating credit facilities also provide for two revolving credit facilities, in a total amount of $1.3 billion, one which will reduce annually beginning in March 2004 and one which will reduce quarterly beginning in September 2005, with a maturity date in September 2007. Supplemental credit facilities in the amount of $100 million may be available from lenders within or outside the lending group that agree to provide it. Amounts under the Charter Operating credit facilities bear interest at the Eurodollar rate or the base rate, each as defined, plus a margin of up to 3.0% for Eurodollar loans (3.15% to 3.92% as of December 31, 2003 and 3.13% to 4.58% as of December 31, 2002) and 2.0% for base rate loans. A quarterly commitment fee of between 0.25% and 0.375% per annum is payable on the unborrowed balance of the revolving credit facilities.

      As of December 31, 2003, outstanding borrowings under the Charter Operating credit facilities were approximately $4.5 billion and the unused total potential availability was $681 million, although financial covenants limited the availability under these facilities to $213 million as of December 31, 2003.

      CC VI Operating Credit Facilities. The obligations under the CC VI Operating credit facilities are guaranteed by CC VI Operating’s parent, CC VI Holdings, LLC, and by the subsidiaries of CC VI Operating other than immaterial subsidiaries. The obligations under the CC VI Operating credit facilities are secured by pledges of all equity interests owned by CC VI Operating and its guarantor subsidiaries in other persons, and by intercompany obligations owing CC VI Operating and/or its guarantor subsidiaries by their affiliates, but are not secured by other assets of CC VI Operating or its subsidiaries. The

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

obligations under the CC VI Operating credit facilities are also secured by pledges by CC VI Holdings of all equity interests it holds in other persons, and intercompany obligations owing to it by its affiliates, but are not secured by the other assets of CC VI Holdings.

      The CC VI Operating credit facilities provide for two term facilities, one with a principal amount of $380 million that matures May 2008 (Term A), and the other with a principal amount of $372 million that matures November 2008 (Term B). The CC VI Operating credit facilities also provide for a $350 million reducing revolving credit facility with a maturity date in May 2008. Supplemental credit facilities in the amount of approximately $300 million may be available until December 31, 2004 from lenders within or outside the lending group that agree to provide it. Amounts under the CC VI Operating credit facilities bear interest at the Eurodollar rate or the base rate, each as defined, plus a margin of up to 2.5% for Eurodollar loans (2.40% to 3.66% as of December 31, 2003 and 2.62% to 4.31% as of December 31, 2002) and 1.5% for base rate loans. A quarterly commitment fee of 0.25% per year is payable on the unborrowed balance of the Term A facility and the revolving facility.

      As of December 31, 2003, outstanding borrowings under the CC VI Operating credit facilities were $868 million and unused total potential availability was $234 million, although financial covenants limited the availability under these facilities to $119 million as of December 31, 2003.

      Falcon Cable Credit Facilities. The obligations under the Falcon credit facilities are guaranteed by the direct parent of Falcon Cable Communications, Charter Communications VII, LLC, and by the subsidiaries of Falcon Cable Communications (except for certain excluded subsidiaries). The obligations under the Falcon credit facilities are secured by pledges of all of the equity interests in the guarantor subsidiaries of Falcon Cable Communications, but are not secured by other assets of Falcon Cable Communications or its subsidiaries. The obligations under the Falcon credit facilities are also secured by a pledge of the equity interests of Charter Communications VII in Falcon Cable Communications and intercompany obligations owing to Charter Communications VII by Falcon Cable Communications and its guarantor subsidiaries, but are not secured by the other assets of Charter Communications VII.

      The Falcon credit facilities provide for two term facilities, one with a principal amount of $190 million that matures June 2007 (Term B), and the other with the principal amount of $285 million that matures December 2007 (Term C). The Falcon credit facilities also provide for a reducing revolving facility of up to approximately $60 million (maturing in December 2006), a reducing supplemental facility of up to approximately $105 million (maturing in December 2007) and a second reducing revolving facility of up to $670 million (maturing in June 2007). Supplemental credit facilities in the amount of up to $486 million may also be available from lenders within or outside the lending group that agree to provide it. Amounts under the Falcon Cable credit facilities bear interest at the Eurodollar rate or the base rate, each as defined, plus a margin of up to 2.25% for Eurodollar loans (2.40% to 3.42% as of December 31, 2003 and 2.69% to 4.07% as of December 31, 2002) and up to 1.25% for base rate loans. A quarterly commitment fee of between 0.25% and 0.375% per year is payable on the unborrowed balance of the revolving facilities.

      As of December 31, 2003, outstanding borrowings were $856 million and unused total potential availability was $454 million, although financial covenants limited the availability under these facilities to $366 million as of December 31, 2003.

      CC VIII Operating Credit Facilities. The obligations under the CC VIII Operating credit facilities are guaranteed by the parent company of CC VIII Operating, CC VIII Holdings, LLC, and by the subsidiaries of CC VIII Operating other than immaterial subsidiaries. The obligations under the CC VIII Operating credit facilities are secured by pledges of all equity interests owned by CC VIII Operating and its guarantor subsidiaries in other persons, and by intercompany obligations owing to CC VIII Operating and/or its guarantor subsidiaries by their affiliates, but are not secured by other assets of CC VIII

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Operating or its subsidiaries. The obligations under the CC VIII Operating credit facilities are also secured by pledges of equity interests owned by CC VIII Holdings in other persons, and by intercompany obligations owing to CC VIII Holdings by its affiliates, but are not secured by the other assets of CC VIII Holdings.

      The CC VIII Operating credit facilities provide for borrowings of up $1.4 billion as of December 31, 2003. The CC VIII Operating credit facilities provide for two term facilities, a Term A facility with a reduced current total principal amount of $375 million, that continues reducing quarterly until it reaches maturity in June 2007, and a Term B facility with a principal amount of $490 million, that continues reducing quarterly until it reaches maturity in February 2008. The amortization of the principal amount of the Term B term loan facilities is substantially “back-ended,” with more than 90% of the principal balance due in the year of maturity. The CC VIII Operating credit facilities also provide for two reducing revolving credit facilities, in the total amount of $542 million, which reduce quarterly beginning in June 2002 and September 2005, respectively, with maturity dates in June 2007. Supplemental facilities in the amount of approximately $300 million may be available from lenders within or outside the lending group that agree to provide it. Amounts under the CC VIII Operating credit facilities bear interest at the Eurodollar rate or the base rate, each as defined, plus a margin of up to 2.50% for Eurodollar loans (2.15% to 3.66% as of December 31, 2003 and 2.89% to 4.54% as of December 31, 2002) and up to 1.50% for base rate loans. A quarterly commitment fee of 0.25% is payable on the unborrowed balance of the revolving credit facilities.

      As of December 31, 2003, outstanding borrowings were $1.0 billion, and unused total potential availability was $363 million although financial covenants limited the availability under these facilities to $130 million.

      Credit Facility Restrictive Covenants. Each of the credit facilities of the Company’s subsidiaries contain representations and warranties, affirmative and negative covenants similar to those described above with respect to the indentures governing the Company’s notes and the notes of the Company’s subsidiaries, information requirements, events of default and financial covenants. The financial covenants, as defined, measure performance against standards set for leverage, debt service coverage, and operating cash flow coverage of cash interest expense on a quarterly basis or as applicable. Additionally, the credit facilities contain provisions requiring mandatory loan prepayments under specific circumstances, including when significant amounts of assets are sold and the proceeds are not promptly reinvested in assets useful in the business of the borrower within a specified period. The Charter Operating credit facility also provides that in the event that any indebtedness of CCO Holdings remains outstanding on the date, which is six months prior to the scheduled final maturity, the term loans under the Charter Operating credit facility will mature and the revolving credit facilities will terminate on such date.

      In the event of a default under the Company’s subsidiaries’ credit facilities or notes, the subsidiaries’ creditors could elect to declare all amounts borrowed, together with accrued and unpaid interest and other fees, to be due and payable. In such event, the subsidiaries’ credit facilities and indentures that were so accelerated or were otherwise in default will not permit the Company’s subsidiaries to distribute funds to Charter Holdco or the Company to pay interest or principal on the notes. A default under the covenants governing any of the Company’s debt instruments could result in the acceleration of its payment obligations under that debt and, under certain circumstances, in cross-defaults under the Company’s other debt obligations, which would have a material adverse effect on the Company’s consolidated financial condition or results of operations. In addition, the lenders under the Company’s credit facilities could foreclose on their collateral, which includes equity interests in the Company’s subsidiaries, and exercise other rights of secured creditors. In any such case, the Company might not be able to repay or make any payments on its notes. Additionally, such a default would cause a cross-default in the indentures governing the Charter Holdings notes and the convertible senior notes and would trigger the cross-default provision

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of the Charter Operating Credit Agreement. Any default under any of the subsidiaries’ credit facilities or notes might adversely affect the holders of the Company’s notes and the Company’s growth, financial condition and results of operations and could force the Company to examine all options, including seeking the protection of the bankruptcy laws.

      Based upon outstanding indebtedness as of December 31, 2003, the amortization of term loans, scheduled reductions in available borrowings of the revolving credit facilities, and the maturity dates for all senior and subordinated notes and debentures, total future principal payments on the total borrowings under all the Company’s debt agreements as of December 31, 2003, are as follows:

Year	Amount
	(in millions)
2004	$	188
2005		426
2006		999
2007		2,080
2008		3,761
Thereafter		2,101
	$	9,555

      For the amounts of debt scheduled to mature during 2004, it is management’s intent to fund the repayments from borrowings on the Company’s subsidiaries’ revolving credit facilities. The accompanying balance sheet reflects this intent by presenting all debt balances as long-term while the table above reflects actual debt maturities as of the stated date.

10.     Comprehensive Income (Loss)

      Certain marketable equity securities are classified as available-for-sale and reported at market value with unrealized gains and losses recorded as accumulated other comprehensive loss on the accompanying consolidated balance sheets. The Company reports changes in the fair value of interest rate agreements designated as hedging instruments of the variability of cash flows associated with floating-rate debt obligations, that meet the effectiveness criteria of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, in accumulated other comprehensive loss. Comprehensive income for the year ended December 31, 2003 was $33 million. Comprehensive loss for the years ended December 31, 2002 and 2001 was $5.4 billion and $1.9 billion, respectively.

11.     Accounting for Derivative Instruments and Hedging Activities

      The Company uses interest rate risk management derivative instruments, such as interest rate swap agreements and interest rate collar agreements (collectively referred to herein as interest rate agreements) as required under the terms of its credit facilities. The Company’s policy is to manage interest costs using a mix of fixed and variable rate debt. Using interest rate swap agreements, the Company agrees to exchange, at specified intervals through 2007, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. Interest rate collar agreements are used to limit the Company’s exposure to and benefits from interest rate fluctuations on variable rate debt to within a certain range of rates.

      Effective January 1, 2001, the Company adopted SFAS No. 133. Interest rate agreements are recorded in the consolidated balance sheet at December 31, 2003 and 2002 as either an asset or liability measured at fair value. In connection with the adoption of SFAS No. 133, the Company recorded a loss of $24 million as the cumulative effect of change in accounting principle.

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The Company does not hold or issue derivative instruments for trading purposes. The Company does however have certain interest rate derivative instruments that have been designated as cash flow hedging instruments. Such instruments are those that effectively convert variable interest payments on certain debt instruments into fixed payments. For qualifying hedges, SFAS No. 133 allows derivative gains and losses to offset related results on hedged items in the consolidated statement of operations. The Company has formally documented, designated and assessed the effectiveness of transactions that receive hedge accounting. For the years ended December 31, 2003, 2002 and 2001, net gain (loss) on derivative instruments and hedging activities includes gains of $8 million and losses of $14 million and $2 million, respectively, which represent cash flow hedge ineffectiveness on interest rate hedge agreements arising from differences between the critical terms of the agreements and the related hedged obligations. Changes in the fair value of interest rate agreements designated as hedging instruments of the variability of cash flows associated with floating-rate debt obligations are reported in accumulated other comprehensive loss. For the years ended December 31, 2003, 2002 and 2001, a gain of $48 million and losses of $65 million and $39 million, respectively, related to derivative instruments designated as cash flow hedges was recorded in accumulated other comprehensive loss. The amounts are subsequently reclassified into interest expense as a yield adjustment in the same period in which the related interest on the floating-rate debt obligations affects earnings (losses).

      Certain interest rate derivative instruments are not designated as hedges as they do not meet the effectiveness criteria specified by SFAS No. 133. However, management believes such instruments are closely correlated with the respective debt, thus managing associated risk. Interest rate derivative instruments not designated as hedges are marked to fair value with the impact recorded as net gain (loss) on derivative instruments and hedging activities in the Company’s statements of operations. For the years ended December 31, 2003, 2002 and 2001, net gain (loss) on derivative instruments and hedging activities includes gains of $57 million and losses of $101 million and $48 million, respectively, for interest rate derivative instruments not designated as hedges.

      As of December 31, 2003, 2002 and 2001, the Company had outstanding $3.0 billion, $3.4 billion and $3.3 billion and $520 million, $520 million and $520 million, respectively, in notional amounts of interest rate swaps and collars, respectively. The notional amounts of interest rate instruments do not represent amounts exchanged by the parties and, thus, are not a measure of exposure to credit loss. The amounts exchanged are determined by reference to the notional amount and the other terms of the contracts.

12.     Fair Value of Financial Instruments

      The Company has estimated the fair value of its financial instruments as of December 31, 2003 and 2002 using available market information or other appropriate valuation methodologies. Considerable judgment, however, is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented in the accompanying consolidated financial statements are not necessarily indicative of the amounts the Company would realize in a current market exchange.

      The carrying amounts of cash, receivables, payables and other current assets and liabilities approximate fair value because of the short maturity of those instruments. The Company is exposed to market price risk volatility with respect to investments in publicly traded and privately held entities.

      The fair value of interest rate agreements represents the estimated amount the Company would receive or pay upon termination of the agreements. Management believes that the sellers of the interest rate agreements will be able to meet their obligations under the agreements. In addition, some of the interest rate agreements are with certain of the participating banks under the Company’s credit facilities, thereby reducing the exposure to credit loss. The Company has policies regarding the financial stability and credit standing of major counterparties. Nonperformance by the counterparties is not anticipated nor

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

would it have a material adverse effect on the Company’s consolidated financial condition or results of operations.

      The estimated fair value of the Company’s notes, credit facilities and interest rate agreements at December 31, 2003 and 2002 are based on quoted market prices, dealer quotations and a discounted cash flow analysis using an incremental borrowing rate for similar types of borrowing arrangements, respectively.

      A summary of the carrying value and fair value of the Company’s debt and related interest rate agreements at December 31, 2003 and 2002 is as follows (in millions):

	2003						2002
	Carrying			Fair			Carrying			Fair
	Value			Value			Value			Value
Debt
CCH II debt	$	1,601		$	1,680		$	—		$	—
CCO Holdings debt		500			510			—			—
Credit facilities		7,227			6,949			7,789			6,367
Other		229			238			277			212
Interest Rate Agreements
Assets (Liabilities) Swaps		(171	)		(171	)		(258	)		(258	)
Collars		(8	)		(8	)		(34	)		(34	)

      The weighted average interest pay rate for the Company’s interest rate swap agreements was 7.25% and 7.40% at December 31, 2003 and 2002, respectively. The Company’s interest rate collar agreements are structured so that if LIBOR falls below 5.3%, the Company pays 6.7%. If the LIBOR rate is between 5.3% and 8.0%, the Company pays LIBOR. The LIBOR rate is capped at 8.0% if LIBOR is between 8.0% and 9.9%. If the LIBOR rate rises above 9.9%, the cap is removed.

13.     Revenues

      Revenues consist of the following for the years presented (in millions):

	Year Ended December 31,
	2003		2002		2001
Video	$	3,461	$	3,420	$	2,971
High-speed data		556		337		148
Advertising sales		263		302		197
Commercial		204		161		123
Other		335		346		368
	$	4,819	$	4,566	$	3,807

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

14.     Operating Expenses

      Operating expenses consist of the following for the years presented (in millions):

	Year Ended December 31,
	2003		2002		2001
Programming	$	1,249	$	1,166	$	963
Advertising sales		88		87		64
Service		615		554		459
	$	1,952	$	1,807	$	1,486

15.     Selling, General and Administrative Expenses

      Selling, general and administrative expenses consist of the following for the years presented (in millions):

	Year Ended December 31,
	2003		2002		2001
General and administrative	$	833	$	810	$	689
Marketing		107		153		137
	$	940	$	963	$	826

16.     Stock Compensation Plans

      The Company grants stock options, restricted stock and other incentive compensation pursuant to the 2001 Stock Incentive Plan of Charter (the “2001 Plan”). Prior to 2001, options were granted under the 1999 Option Plan of Charter Holdco (the “1999 Plan”).

      The 1999 Plan provided for the grant of options to purchase membership units in Charter Holdco to current and prospective employees and consultants of Charter Holdco and its affiliates and current and prospective non-employee directors of Charter. Options granted generally vest over five years from the grant date, with 25% vesting 15 months after the anniversary of the grant date and ratably thereafter. Options not exercised accumulate and are exercisable, in whole or in part, in any subsequent period, but not later than 10 years from the date of grant. Membership units received upon exercise of the options are automatically exchanged into Class A common stock of Charter on a one-for-one basis.

      The 2001 Plan provides for the grant of non-qualified stock options, stock appreciation rights, dividend equivalent rights, performance units and performance shares, share awards, phantom stock and/or shares of restricted stock (not to exceed 3,000,000), as each term is defined in the 2001 Plan. Employees, officers, consultants and directors of Charter and its subsidiaries and affiliates are eligible to receive grants under the 2001 Plan. Options granted generally vest over four years from the grant date, with 25% vesting on the anniversary of the grant date and ratably thereafter. Generally, options expire 10 years from the grant date.

      The 2001 Plan allows for the issuance of up to a total of 90,000,000 shares of Charter Class A common stock (or units convertible into Charter Class A common stock). The total shares available reflect a July 2003 amendment to the 2001 Plan approved by the board of directors and the shareholders of Charter to increase available shares by 30,000,000 shares. In 2001, any shares covered by options that terminated under the 1999 Plan were transferred to the 2001 Plan, and no new options can be granted under the 1999 Plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      During July and October 2003, in connection with new employment agreements and related option agreements entered into by Charter, certain executives and directors were awarded a total of 80,603 shares of restricted Class A common stock. The shares vest monthly over a twelve-month period beginning on the date of grant. During September and October 2001, in connection with new employment agreements and related option agreements entered into by Charter, certain executives of Charter were awarded a total of 256,000 shares of restricted Class A common stock, of which 140,063 shares had been cancelled as of December 31, 2003. The shares vested 25% upon grant, with the remaining shares vesting monthly over a three-year period beginning after the first anniversary of the date of grant. As of December 31, 2003, deferred compensation remaining to be recognized in future periods totaled $0.2 million.

      A summary of the activity for the Company’s stock options, excluding granted shares of restricted Class A common stock of Charter, for the years ended December 31, 2003, 2002 and 2001, is as follows (amounts in thousands, except per share data):

	2003					2002					2001
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Options outstanding, beginning of period		53,632		$	14.22		46,558		$	17.10		28,482		$	19.24
Granted		7,983			3.53		13,122			4.88		29,395			16.01
Exercised		(165	)		3.96		—			—		(278	)		19.23
Cancelled		(13,568	)		14.10		(6,048	)		16.32		(11,041	)		19.59
Options outstanding, end of period		47,882		$	12.48		53,632		$	14.22		46,558		$	17.10
Weighted average remaining contractual life		8 years					8 years					9 years
Options exercisable, end of period		22,861		$	16.36		17,844		$	17.93		9,994		$	18.51
Weighted average fair value of options granted	$	2.71				$	2.89				$	9.15

      The following table summarizes information about stock options outstanding and exercisable as of December 31, 2003:

		Options Outstanding						Options Exercisable
				Weighted-						Weighted-
				Average		Weighted-				Average		Weighted-
				Remaining		Average				Remaining		Average
Range of		Number		Contractual		Exercise		Number		Contractual		Exercise
Exercise Prices		Outstanding		Life		Price		Exercisable		Life		Price
		(in thousands)						(in thousands)
$	1.11-$ 2.85		9,809		9 years	$	2.31		1,718		9 years	$	2.49
$	3.91-$ 9.13		6,309		9 years	$	5.52		319		8 years	$	9.13
$	11.99-$19.47		20,243		7 years	$	14.65		12,191		7 years	$	15.34
$	20.00-$23.09		11,521		6 years	$	21.19		8,633		6 years	$	20.83

      On January 1, 2003, the Company adopted the fair value measurement provisions of SFAS No. 123, under which the Company recognizes compensation expense of a stock-based award to an employee over the vesting period based on the fair value of the award on the grant date. Adoption of these provisions resulted in utilizing a preferable accounting method as the consolidated financial statements present the estimated fair value of stock-based compensation in expense consistently with other forms of compensation and other expense associated with goods and services received for equity instruments. In accordance with

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

SFAS No. 123, the fair value method will be applied only to awards granted or modified after January 1, 2003, whereas awards granted prior to such date will continue to be accounted for under APB No. 25, unless they are modified or settled in cash. The ongoing effect on consolidated results of operations or financial condition will be dependent upon future stock based compensation awards granted. The Company recorded $4 million of option compensation expense for the year ended December 31, 2003.

      Prior to the adoption of SFAS No. 123, the Company used the intrinsic value method prescribed by APB No. 25, Accounting for Stock Issued to Employees, to account for the option plans. Option compensation expense of $5 million and net option compensation benefit of $5 million for the years ended December 31, 2002 and 2001, respectively, was recorded in the consolidated statements of operations since the exercise prices of certain options were less than the estimated fair values of the underlying membership interests on the date of grant. A reversal of previously recognized option compensation expense of $22 million for the year ended December 31, 2001 was recorded in the consolidated statements of operations primarily in connection with the waiver of the right to approximately seven million options by Charter’s former President and Chief Executive Officer as part of his September 2001 separation agreement. This was partially offset by expense recorded because exercise prices on certain options were less than the estimated fair values of Charter’s stock at the time of grant. Estimated fair values were determined by Charter using the valuation inherent in the companies acquired by Paul G. Allen in 1998 and valuations of public companies in the cable television industry adjusted for factors specific to Charter. Compensation expense is being recorded with the method described in FIN 28 over the vesting period of the individual options that varies between four and five years. As of December 31, 2003, no deferred compensation remained to be recognized in future periods. No stock option compensation expense was recorded for the options granted after November 8, 1999, since the exercise price was equal to the estimated fair value of the underlying membership interests or shares of Charter Class A common stock on the date of grant. Since the membership units are exchangeable into Charter Class A common stock on a one-for-one basis, the estimated fair value was equal to the quoted market values of Charter Class A common stock.

      In January 2004, Charter commenced an option exchange program in which employees of Charter and its subsidiaries, including the Company, were offered the right to exchange all stock options (vested and unvested) issued under the 1999 Charter Communications Option Plan and 2001 Stock Incentive Plan that had an exercise price over $10 per share for shares of restricted Charter Class A common stock or, in some instances, cash. Based on a sliding exchange ratio, which varied depending on the exercise price of an employees outstanding options, if an employee would have received more than 400 shares of restricted stock in exchange for tendered options, Charter issued that employee shares of restricted stock in the exchange. If, based on the exchange ratios, an employee would have received 400 or fewer shares of restricted stock in exchange for tendered options, Charter instead paid the employee cash in an amount equal to the number of shares the employee would have received multiplied by $5.00. The offer applied to options (vested and unvested) to purchase a total of 22,929,573 shares of Charter Class A common stock, or approximately 48% of Charter’s 47,882,365 total options issued and outstanding as of December 31, 2003. Participation by employees was voluntary. Those members of the Charter’s board of directors who were not also employees of Charter or any of its subsidiaries were not eligible to participate in the exchange offer.

      In the closing of the exchange offer on February 20, 2004, Charter accepted for cancellation eligible options to purchase approximately 18,137,664 shares of its Class A common stock. In exchange, Charter granted approximately 1,966,686 shares of restricted stock, including 460,777 performance shares to eligible employees of the rank of senior vice president and above, and paid a total cash amount of approximately $4 million (which amount includes applicable withholding taxes) to those employees who received cash rather than shares of restricted stock. The grants of restricted stock were effective as of February 25, 2004. Employees tendered approximately 79% of the options eligible to be exchanged under the program.

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Based on the results above, the cost to the Company of the Stock Option Exchange Program was approximately $12 million, with a 2004 cash compensation expense of approximately $4 million and a non-cash compensation expense of approximately $8 million to be expensed ratably over the three-year vesting period of the restricted stock in the exchange.

      In January 2004, the Compensation Committee of the board of directors of Charter approved Charter’s Long-Term Incentive Program (“LTIP”), which is a program administered under the 2001 Stock Incentive Plan. Employees of Charter and its subsidiaries whose pay classifications exceed a certain level are eligible to receive stock options, and more senior level employees are eligible to receive stock options and performance shares. Under the LTIP, the stock options vest 25% on each of the first four anniversaries of the date of grant. The performance shares are earned on the third anniversary of the grant date, conditional upon Charter’s performance against financial performance measures and customer growth targets established by Charter’s management and approved by its board of directors as of the time of the award. No awards were made under the LTIP in 2003.

17.     Special Charges

      In the fourth quarter of 2002, the Company recorded a special charge of $35 million, of which $31 million was associated with its workforce reduction program and the consolidation of its operations from three divisions and ten regions into five operating divisions, elimination of redundant practices and streamlining its management structure. The remaining $4 million related to legal and other costs associated with Charter’s ongoing grand jury investigation, shareholder lawsuits and SEC investigation. The $31 million charge related to realignment activities, included severance costs of $28 million related to approximately 1,400 employees identified for termination as of December 31, 2002 and lease termination costs of $3 million. During the year ended December 31, 2003, an additional 1,400 employees were identified for termination and additional severance costs of $20 million and additional lease costs of $6 million were recorded in special charges. In total, approximately 2,600 employees were terminated during the year ended December 31, 2003. Severance payments are generally made over a period of up to twelve months with approximately $39 million paid during the year ended December 31, 2003. The Company paid $4 million in lease termination costs during the year ended December 31, 2003. As of December 31, 2003 and December 31, 2002, a liability of approximately $14 million and $31 million, respectively, is recorded on the accompanying consolidated balance sheets related to the realignment activities. For the year ended December 31, 2003, the additional severance costs were offset by a $5 million settlement from the Internet service provider Excite@Home related to the conversion of high-speed data customers to Charter Pipeline service in 2001.

      During the year ended December 31, 2001, the Company recorded $18 million in special charges that represent $15 million of costs associated with the transition of approximately 145,000 (unaudited) data customers from the Excite@Home Internet service to the Charter Pipeline Internet service.

      In December 2001, the Company implemented a restructuring plan to reduce its workforce in certain markets and reorganize its operating divisions from two to three and operating regions from twelve to ten. The restructuring plan was completed during the first quarter of 2002, resulting in the termination of approximately 320 employees and severance costs of $4 million of which $1 million was recorded in the first quarter of 2002 and $3 million was recorded in the fourth quarter of 2001.

18.     Income Taxes

      The Company is a single member limited liability company not subject to income tax. The Company holds all operations through indirect subsidiaries. The majority of these indirect subsidiaries are limited liability companies that are not subject to income tax. However, certain of the Company’s indirect subsidiaries are corporations and are subject to income tax.

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      For the year ended December 31, 2003, the Company recorded income tax expense realized through increases in deferred tax liabilities and federal and state income taxes related to our indirect corporate subsidiaries. For the years ended December 31, 2002 and 2001, the Company recorded income tax benefit for its indirect corporate subsidiaries related to differences in accounting for franchises.

      Current and deferred income tax expense (benefit) is as follows (in millions):

		December 31,
		2003		2002			2001
Current expense:
	Federal income taxes	$	1	$	—		$	—
	State income taxes		1		2			—
Current income tax expense			2		2			—
Deferred benefit:
	Federal income taxes		10		(219	)		(24	)
	State income taxes		1		(31	)		(3	)
Deferred income tax expense (benefit)			11		(250	)		(27	)
Total income tax expense (benefit)		$	13	$	(248	)	$	(27	)

      The Company recorded the portion of the income tax benefit associated with the adoption of SFAS No. 142 as a $32 million reduction of the cumulative effect of accounting change on the accompanying statement of operations for the year ended December 31, 2002.

      The Company’s effective tax rate differs from that derived by applying the applicable federal income tax rate of 35%, and an average state income tax rate of 5% for the years ended December 31, 2003, 2002 and 2001 as follows (in millions):

	December 31,
	2003			2002			2001
Statutory federal income taxes	$	(1	)	$	(1,737	)	$	(649	)
State income taxes, net of federal benefit		—			(248	)		(93	)
Losses allocated to limited liability companies not subject to income taxes		(12	)		1,740			716
Change in valuation allowance		26			(3	)		(1	)
Income tax expense (benefit)	$	13		$	(248	)	$	(27	)

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The tax effects of these temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2003 and 2002 for the indirect corporate subsidiaries of the Company are presented below (in millions):

		December 31,
		2003			2002
Deferred tax assets:
	Net operating loss carryforward	$	80		$	71
	Other		6			9
Total gross deferred tax assets			86			80
Less: valuation allowance			(51	)		(25	)
Net deferred tax assets		$	35		$	55
Deferred tax liabilities:
	Property, plant & equipment	$	(42	)	$	(67	)
	Franchises		(260	)		(240	)
Total gross deferred liabilities			(302	)		(307	)
Net deferred tax liabilities		$	(267	)	$	(252	)

      As of December 31, 2003, the Company has deferred tax assets of $86 million, which primarily relate to tax net operating loss carryforwards of certain of its indirect corporate subsidiaries. These tax net operating loss carryforwards (generally expiring in years 2004 through 2023) of $80 million, are subject to certain return limitations. Valuation allowances of $51 million and $25 million exist with respect to these carryforwards as of December 31, 2003 and 2002, respectively.

      In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management believes that the deferred tax assets will be realized prior to the expiration of the tax net operating loss carryforwards in 2004 through 2023, except for those tax net operating loss carryforwards that may be subject to certain limitations. Because of the uncertainty associated in realizing the deferred tax assets associated with the potentially limited tax net operating loss carryforwards, valuation allowances have been established except for deferred tax assets available to offset deferred tax liabilities.

      The Company is currently under examination by the Internal Revenue Service for the tax years ending December 31, 1999 and 2000. Management does not expect the results of this examination to have a material adverse effect on the Company’s financial condition or results of operations.

19.     Related Party Transactions

      The following sets forth certain transactions in which the Company and the directors, executive officers and affiliates of the Company are involved. Unless otherwise disclosed, management believes that each of the transactions described below was on terms no less favorable to the Company than could have been obtained from independent third parties.

      Charter has entered into management arrangements with Charter Holdco and certain of its subsidiaries. Under these agreements, Charter provides management services for the cable systems owned or operated by its subsidiaries. The management services include such services as centralized customer billing services, data processing and related support, benefits administration and coordination of insurance

F-31

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

coverage and self-insurance programs for medical, dental and workers’ compensation claims. Costs associated with providing these services are billed and charged directly to the Company’s operating subsidiaries and are included within operating costs in the accompanying consolidated statements of operations. Such costs totaled $210 million, $176 million and $119 million for the years ended December 31, 2003, 2002 and 2001, respectively. All other costs incurred on the behalf of the Company’s operating subsidiaries are considered a part of the management fee and are recorded as a component of selling, general and administrative expense, in the accompanying consolidated financial statements. For the years ended December 31, 2003, 2002 and 2001, the management fee charged to the Company’s operating subsidiaries approximated the expenses incurred by Charter Holdco and Charter on behalf of the Company’s operating subsidiaries. The credit facilities of the Company’s operating subsidiaries prohibit payments of management fees in excess of 3.5% of revenues until repayment of the outstanding indebtedness. In the event any portion of the management fee due and payable is not paid, it is deferred by Charter and accrued as a liability of such subsidiaries. Any deferred amount of the management fee will bear interest at the rate of 10% per annum, compounded annually, from the date it was due and payable until the date it is paid.

      Mr. Allen, the controlling shareholder of Charter, and a number of his affiliates have interests in various entities that provide services or programming to Charter’s subsidiaries. Given the diverse nature of Mr. Allen’s investment activities and interests, and to avoid the possibility of future disputes as to potential business, Charter may not, and may not allow its subsidiaries to, engage in any business transaction outside the cable transmission business except for certain existing approved investments. Should Charter or its subsidiaries wish to pursue a business transaction outside of this scope, it must first offer Mr. Allen the opportunity to pursue the particular business transaction. If he decides not to pursue the business transaction and consents to Charter or its subsidiaries to engage in the business transaction, they will be able to do so. The cable transmission business means the business of transmitting video, audio, including telephony, and data over cable systems owned, operated or managed by Charter or its subsidiaries from time to time.

      Mr. Allen or his affiliates own equity interests or warrants to purchase equity interests in various entities with which the Company does business or which provides it with products, services or programming. Among these entities are TechTV, Inc. (“TechTV”), Oxygen Media Corporation (“Oxygen Media”), Digeo, Inc. (“Digeo”), Click2learn, Inc., Trail Blazer Inc., Action Sports Cable Network (“Action Sports”) and Microsoft Corporation. In addition, Mr. Allen and William Savoy were directors of USA Networks, Inc. (“USA Networks”), who operates the USA Network, The Sci-Fi Channel, Trio, World News International and Home Shopping Network, owning approximately 5% and less than 1%, respectively, of the common stock of USA Networks. In 2002, Mr. Allen and Mr. Savoy sold their common stock and are no longer directors of the USA Network. Mr. Allen owns 100% of the equity of Vulcan Ventures Incorporated (“Vulcan Ventures”) and Vulcan Inc. and is the president of Vulcan Ventures. Mr. Savoy was a vice president and a director of Vulcan Ventures until his resignation in September 2003. Mr. Savoy will remain as a member of the board of directors of Charter. The various cable, media, Internet and telephony companies in which Mr. Allen has invested may mutually benefit one another. The agreements governing the Company’s relationship with Digeo are an example of a cooperative business relationship among Mr. Allen’s affiliated companies. The Company can give no assurance that any of these business relationships will be successful, that the Company will realize any benefits from these relationships or that the Company will enter into any business relationships in the future with Mr. Allen’s affiliated companies.

      Mr. Allen and his affiliates have made, and in the future likely will make, numerous investments outside of the Company and its business. The Company cannot assure that, in the event that the Company or any of its subsidiaries enter into transactions in the future with any affiliate of Mr. Allen, such transactions will be on terms as favorable to the Company as terms it might have obtained from an

F-32

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

unrelated third party. Also, conflicts could arise with respect to the allocation of corporate opportunities between the Company and Mr. Allen and his affiliates. The Company has not instituted any formal plan or arrangement to address potential conflicts of interest.

      High Speed Access Corp. (“High Speed Access”) was a provider of high-speed Internet access services over cable modems. During the period from 1997 to 2000, certain Charter entities entered into Internet-access related service agreements, and both Vulcan Ventures and certain of Charter’s subsidiaries made equity investments in High Speed Access.

      On February 28, 2002, Charter’s subsidiary and an affiliate to the Company, CC Systems, purchased from High Speed Access the contracts and associated assets, and assumed related liabilities, that served the Company’s customers, including a customer contact center, network operations center and provisioning software. Immediately prior to the asset purchase, Vulcan Ventures beneficially owned approximately 37%, and Charter Holdco beneficially owned approximately 13%, of the common stock of High Speed Access (including the shares of common stock which could be acquired upon conversion of the Series D preferred stock, and upon exercise of the warrants owned by Charter Communications Holding Company). Following the consummation of the asset purchase, neither the Company nor Vulcan Ventures beneficially owned any securities of, or were otherwise affiliated with, High Speed Access.

      The Company receives or will receive programming for broadcast via its cable systems from TechTV, USA Networks, Oxygen Media and Action Sports. The Company pays a fee for the programming service generally based on the number of customers receiving the service. Such fees for the years ended December 31, 2003, 2002 and 2001 were each less than 1% of total operating expenses with the exception of USA Networks, which was 2%, 2% and 3% of total operating expenses for the years ended December 31, 2003, 2002 and 2001, respectively. In addition, the Company receives commissions from USA Networks for home shopping sales generated by its customers. Such revenues for the years ended December 31, 2003, 2002 and 2001 were less than 1% of total revenues. On November 5, 2002, Action Sports announced that it was discontinuing its business. The Company believes that the failure of Action Sports will not materially affect the Company’s business or results of operations.

      Charter Communications Ventures, LLC (“Charter Ventures”) entered into an equity issuance agreement pursuant to which Oxygen Media granted Charter Ventures a warrant to purchase 2.4 million shares of common stock of Oxygen Media with an exercise price of $22.00 per share. Charter Holdco will also receive unregistered shares of Oxygen Media common stock with a guaranteed fair market value on the date of issuance of $34 million, on or prior to February 2, 2005 with the exact date to be determined by Oxygen Media. The Company currently recognizes the guaranteed value of the investment over the life of the programming agreement as a reduction of programming expense. For the years ended December 31, 2003, 2002 and 2001 the Company recorded approximately $9 million, $6 million and $3 million, respectively as a reduction of programming expense.

      As discussed in Note 4, in April 2002, Interlink Communications Partners, LLC, Rifkin Acquisition Partners, LLC and Charter Communications Entertainment I, LLC, each an indirect, wholly-owned subsidiary of the Company, completed the cash purchase of certain assets of Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar Cable of Macoupin County and Enstar Income IV/ PBD Systems Venture, serving approximately 21,600 (unaudited) customers, for a total cash sale price of approximately $48 million. In September 2002, Charter Communications Entertainment I, LLC purchased all of Enstar Income Program II-1, L.P.’s Illinois cable systems, serving approximately 6,400 (unaudited) customers, for a cash sale price of $15 million. Enstar Communications Corporation, a direct subsidiary of Charter Holdco, is a general partner of the Enstar limited partnerships but does not exercise control over them. All of the executive officers of Charter and Charter Holdco act as officers of Enstar Communications Corporation.

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Charter Communications Ventures, LLC (“Charter Ventures”), the Company’s indirect subsidiary, entered into various broadband carriage agreements with Digeo Interactive, LLC (“Digeo Interactive”), a wholly-owned subsidiary of Digeo. These agreements provide for the development by Digeo Interactive of future features to be included in the Basic i-TV service provided by Digeo and for Digeo’s development of an interactive “toolkit” to enable the Company to develop interactive local content. Furthermore, the Company may request that Digeo Interactive manage local content for a fee. The agreement provides for the Company to pay for development of the Basic i-TV service as well as license fees for customers who receive the service, and for the Company and Digeo to split certain revenues earned from the service. In 2003, the Company paid Digeo Interactive approximately $4 million for customized development of the i-channels and the local content toolkit. The Company received no revenues under the broadband carriage agreement in 2003.

      On June 30, 2003, Charter Holdco entered into an agreement with Motorola for the purchase of 100,000 broadband media centers, subject to the Company’s testing and approval of product performance and functionality. It is contemplated that the software for these broadband media centers would be supplied to Motorola by Digeo. License fees for Digeo to license such software to the Company and support fees for the broadband media centers and relevant content and support services are currently under negotiation.

      In March 2001, Charter Ventures and Vulcan Ventures formed DBroadband Holdings, LLC (“DBroadband”) for the sole purpose of purchasing equity interests in Digeo. In connection with the execution of the broadband carriage agreement, DBroadband purchased an equity interest in Digeo funded by contributions from Vulcan Ventures. The equity interest is subject to a priority return of capital to Vulcan Ventures up to the amount contributed by Vulcan Ventures on Charter Ventures’ behalf. Charter Ventures has a 100% profit interest in DBroadband. Vulcan Ventures also agreed to make, through January 24, 2004, certain additional contributions through DBroadband to acquire additional equity in Digeo as necessary to maintain Charter Ventures’ pro rata interest in Digeo in the event of certain future Digeo equity financings by the founders of Digeo. These additional equity interests are also subject to a priority return of capital to Vulcan Ventures up to amounts contributed by Vulcan Ventures on Charter Ventures’ behalf. DBroadband is therefore not included in the Company’s consolidated financial statements.

      The Company believes that Vulcan Ventures, an entity controlled by Mr. Allen, owns an approximate 60% equity interest in Digeo, Inc. Messrs. Allen and Vogel are directors of Digeo. Mr. Savoy was a director and served on the compensation committee of Digeo until September 2003. Mr. Vogel owns options to purchase 10,000 shares of Digeo common stock.

      On January 10, 2003, Charter signed an agreement to carry two around-the-clock, high-definition networks, HDNet and HDNet Movies. The Company believes that entities controlled by Mr. Mark Cuban, co-founder and president of HDNet, owns 85% of HDNet and HDNet Movies as of December 31, 2003. As of December 31, 2003 Mr. Cuban owns an approximate 6.4% equity interest in Charter.

      As part of the acquisition of the cable systems owned by Bresnan Communications Company Limited Partnership in February 2000, CC VIII, LLC, Charter’s indirect limited liability company subsidiary, issued, after adjustments, 24,279,943 Class A preferred membership units (collectively, the “CC VIII interest”) with a value and an initial capital account of approximately $630 million to certain sellers affiliated with AT&T Broadband, subsequently owned by Comcast Corporation (the “Comcast sellers”). While held by the Comcast sellers, the CC VIII interest was entitled to a 2% priority return on its initial capital account and such priority return was entitled to preferential distributions from available cash and upon liquidation of CC VIII, LLC. While held by the Comcast sellers, the CC VIII interest generally did not share in the profits and losses of CC VIII, LLC. Mr. Allen granted the Comcast sellers the right to sell to him the CC VIII interest for approximately $630 million plus 4.5% interest annually from February

F-34

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2000 (the “Comcast put right”). In April 2002, the Comcast sellers exercised the Comcast put right in full, and this transaction was consummated on June 6, 2003. Accordingly, Mr. Allen has become the holder of the CC VIII interest, indirectly through an affiliate. Consequently, subject to the matters referenced in the next paragraph, Mr. Allen generally thereafter will be allocated his pro rata share (based on number of membership interests outstanding) of profits or losses of CC VIII, LLC. In the event of a liquidation of CC VIII, LLC, Mr. Allen would be entitled to a priority distribution with respect to the 2% priority return (which will continue to accrete). Any remaining distributions in liquidation would be distributed to CC V Holdings, LLC and Mr. Allen in proportion to CC V Holdings, LLC’s capital account and Mr. Allen’s capital account (which will equal the initial capital account of the Comcast sellers of approximately $630 million, increased or decreased by Mr. Allen’s pro rata share of CC VIII, LLC’s profits or losses (as computed for capital account purposes) after June 6, 2003). The limited liability company agreement of CC VIII, LLC does not provide for a mandatory redemption of the CC VIII interest.

      An issue has arisen as to whether the documentation for the Bresnan transaction was correct and complete with regard to the ultimate ownership of the CC VIII interest following consummation of the Comcast put right. Specifically, under the terms of the Bresnan transaction documents that were entered into in June 1999, the Comcast sellers originally would have received, after adjustments, 24,273,943 Charter Holdco membership units, but due to an FCC regulatory issue raised by the Comcast sellers shortly before closing, the Bresnan transaction was modified to provide that the Comcast sellers instead would receive the preferred equity interests in CC VIII, LLC represented by the CC VIII interest. As part of the last-minute changes to the Bresnan transaction documents, a draft amended version of the Charter Holdco limited liability company agreement was prepared, and contract provisions were drafted for that agreement that would have required an automatic exchange of the CC VIII interest for 24,273,943 Charter Holdco membership units if the Comcast sellers exercised the Comcast put right and sold the CC VIII interest to Mr. Allen or his affiliates. However, the provisions that would have required this automatic exchange did not appear in the final version of the Charter Holdco limited liability company agreement that was delivered and executed at the closing of the Bresnan transaction. The law firm that prepared the documents for the Bresnan transaction brought this matter to the attention of Charter and representatives of Mr. Allen in 2002.

      Thereafter, the board of directors of Charter formed a Special Committee (currently comprised of Messrs. Tory, Wangberg and Merritt) to investigate the matter and take any other appropriate action on behalf of Charter with respect to this matter. After conducting an investigation of the relevant facts and circumstances, the Special Committee determined that a “scrivener’s error” had occurred in February 2000 in connection with the preparation of the last-minute revisions to the Bresnan transaction documents and that, as a result, Charter should seek the reformation of the Charter Holdco limited liability company agreement, or alternative relief, in order to restore and ensure the obligation that the CC VIII interest be automatically exchanged for Charter Holdco units. The Special Committee further determined that, as part of such contract reformation or alternative relief, Mr. Allen should be required to contribute the CC VIII interest to Charter Holdco in exchange for 24,273,943 Charter Holdco membership units. The Special Committee also recommended to the board of directors of Charter that, to the extent the contract reformation is achieved, the board of directors should consider whether the CC VIII interest should ultimately be held by Charter Holdco or Charter Holdings or another entity owned directly or indirectly by them.

      Mr. Allen disagrees with the Special Committee’s determinations described above and has so notified the Special Committee. Mr. Allen contends that the transaction is accurately reflected in the transaction documentation and contemporaneous and subsequent company public disclosures.

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The parties engaged in a process of non-binding mediation to seek to resolve this matter, without success. The Special Committee is evaluating what further actions or processes it may undertake to resolve this dispute. To accommodate further deliberation, each party has agreed to refrain from initiating legal proceedings over this matter until it has given at least ten days’ prior notice to the other. In addition, the Special Committee and Mr. Allen have determined to utilize the Delaware Court of Chancery’s program for mediation of complex business disputes in an effort to resolve the CC VIII interest dispute. If the Special Committee and Mr. Allen are unable to reach a resolution through that mediation process or to agree on an alternative dispute resolution process, the Special Committee intends to seek resolution of this dispute through judicial proceedings in an action that would be commenced, after appropriate notice, in the Delaware Court of Chancery against Mr. Allen and his affiliates seeking contract reformation, declaratory relief as to the respective rights of the parties regarding this dispute and alternative forms of legal and equitable relief. The ultimate resolution and financial impact of the dispute are not determinable at this time.

20.     Commitments and Contingencies

Commitments

      The following table summarizes the Company’s payment obligations as of December 31, 2003 for its contractual obligations.

		Total		2004		2005		2006		2007		2008		Thereafter
Contractual Obligations
Operating Lease Obligations(1)		$	70	$	17	$	14	$	11	$	7	$	5	$	16
Programming Minimum Commitments(2)			1,949		320		329		355		386		317		242
Other(3)			282		63		47		39		24		25		84
	Total	$	2,301	$	400	$	390	$	405	$	417	$	347	$	342

(1)	The Company leases certain facilities and equipment under noncancellable operating leases. Leases and rental costs charged to expense for the years ended December 31, 2003, 2002 and 2001, were $28 million, $30 million and $22 million, respectively.
(2)	The Company pays programming fees under multi-year contracts ranging from three to six years typically based on a flat fee per customer, which may be fixed for the term or may in some cases, escalate over the term. Programming costs included in the accompanying statement of operations were $1.2 billion, $1.2 billion and $963 million for the years ended December 31, 2003, 2002 and 2001, respectively. Certain of the Company’s programming agreements are based on a flat fee per month or have guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under the Company’s programming contracts.
(3)	“Other” represents other guaranteed minimum commitments, which consist primarily of commitments to the Company’s billing services vendors.

      The following items are not included in the contractual obligation table due to various factors discussed below. However, the Company incurs these costs as part of its operations:

•  The Company also rents utility poles used in its operations. Generally, pole rentals are cancelable on short notice, but the Company anticipates that such rentals will recur. Rent expense incurred for pole rental attachments for the years ended December 31, 2003, 2002 and 2001, was $40 million, $41 million and $33 million, respectively.

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

•  The Company pays franchise fees under multi-year franchise agreements based on a percentage of revenues earned from video service per year. The Company also pays other franchise-related costs, such as public education grants under multi-year agreements. Franchise fees and other franchise-related costs included in the accompanying statement of operations were $162 million, $160 million and $144 million for the years ended December 31, 2003, 2002 and 2001, respectively.

•  The Company also has $153 million in letters of credit, primarily to its various worker’s compensation, property casualty and general liability carriers as collateral for reimbursement of claims. These letters of credit reduce the amount the Company may borrow under its credit facilities.

Litigation

      Fourteen putative federal class action lawsuits (the “Federal Class Actions”) have been filed against Charter and certain of its former and present officers and directors in various jurisdictions allegedly on behalf of all purchasers of Charter’s securities during the period from either November 8 or November 9, 1999 through July 17 or July 18, 2002. Unspecified damages are sought by the plaintiffs. In general, the lawsuits allege that Charter utilized misleading accounting practices and failed to disclose these accounting practices and/or issued false and misleading financial statements and press releases concerning Charter’s operations and prospects. The Federal Class Actions were specifically and individually identified in public filings made by Charter prior to the date of this prospectus. In October 2002, Charter filed a motion with the Judicial Panel on Multidistrict Litigation (the “Panel”) to transfer the Federal Class Actions to the Eastern District of Missouri. On March 12, 2003, the Panel transferred the six Federal Class Actions not filed in the Eastern District of Missouri to that district for coordinated or consolidated pretrial proceedings with the eight Federal Class Actions already pending there. The Panel’s transfer order assigned the Federal Class Actions to Judge Charles A. Shaw. By virtue of a prior court order, StoneRidge Investment Partners LLC became lead plaintiff upon entry of the Panel’s transfer order. StoneRidge subsequently filed a Consolidated Amended Complaint. The Court subsequently consolidated the Federal Class Actions into a single consolidated action (the “Consolidated Federal Class Action”) for pretrial purposes. On June 19, 2003, following a pretrial conference with the parties, the Court issued a Case Management Order setting forth a schedule for the pretrial phase of the Consolidated Federal Class Action. Motions to dismiss the Consolidated Amended Complaint have been filed. On February 10, 2004, in response to a joint motion made by StoneRidge and defendants, Charter, Vogel and Allen, the court entered an order providing, among other things, that: (1) the parties who filed such motion engage in a mediation within ninety (90) days; and (2) all proceedings in the Consolidated Federal Class Actions are stayed for ninety (90) days.

      On September 12, 2002, a shareholders derivative suit (the “State Derivative Action”) was filed in the Circuit Court of the City of St. Louis, State of Missouri against Charter and its then current directors, as well as its former auditors. A substantively identical derivative action was later filed and consolidated into the State Derivative Action. The plaintiffs allege that the individual defendants breached their fiduciary duties by failing to establish and maintain adequate internal controls and procedures. Unspecified damages, allegedly on Charter’s behalf, are sought by the plaintiffs.

      Separately, on February 12, 2003, a shareholders derivative suit (the “Federal Derivative Action”), was filed against Charter and its then current directors in the United States District Court for the Eastern District of Missouri. The plaintiff alleges that the individual defendants breached their fiduciary duties and grossly mismanaged Charter by failing to establish and maintain adequate internal controls and procedures. Unspecified damages, allegedly on Charter’s behalf, are sought by the plaintiffs.

      In addition to the Federal Class Actions, the State Derivative Action and the Federal Derivative Action, six putative class action lawsuits have been filed against Charter and certain of its then current directors and officers in the Court of Chancery of the State of Delaware (the “Delaware Class Actions”).

F-37

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The lawsuits were filed after the filing of a Schedule 13D amendment by Mr. Allen indicating that he was exploring a number of possible alternatives with respect to restructuring or expanding his ownership interest in Charter. The Company understands that Charter believes the plaintiffs speculated that Mr. Allen might have been contemplating an unfair bid for shares of Charter or some other sort of going private transaction on unfair terms and generally alleged that the defendants breached their fiduciary duties by participating in or acquiescing to such a transaction. The lawsuits were brought on behalf of Charter’s securities holders as of July 29, 2002, and seek unspecified damages and possible injunctive relief. The Delaware Class Actions are substantively identical. No such transaction by Mr. Allen has been presented. Plaintiffs’ counsel has granted the defendants an indefinite extension of time to respond to the only complaint that has been served in the Delaware Class Actions.

      All of the lawsuits discussed above are each in preliminary stages. No reserves have been established for potential losses or related insurance recoveries on these matters because Charter is unable to predict the outcome. Charter has advised the Company that it intends to vigorously defend the lawsuits.

      In August of 2002, Charter became aware of a grand jury investigation being conducted by the United States Attorney’s Office for the Eastern District of Missouri into certain of its accounting and reporting practices, focusing on how Charter reported customer numbers, and its reporting of amounts received from digital set-top terminal suppliers for advertising. The U.S. Attorney’s Office has publicly stated that Charter is not currently a target of the investigation. Charter has also been advised by the U.S. Attorney’s Office that no member of its board of directors, including its Chief Executive Officer, is a target of the investigation. On July 24, 2003, a federal grand jury charged four former officers of Charter with conspiracy and mail and wire fraud, alleging improper accounting and reporting practices focusing on revenue from digital set-top terminal suppliers and inflated customer account numbers. On July 25, 2003, one of the former officers who was indicted entered a guilty plea. Charter has advised the Company that it is fully cooperating with the investigation.

      On November 4, 2002, Charter received an informal, non-public inquiry from the staff of the Securities and Exchange Commission (“SEC”). The SEC has subsequently issued a formal order of investigation dated January 23, 2003, and subsequent document and testimony subpoenas. The investigation and subpoenas generally concern Charter’s prior reports with respect to its determination of the number of customers, and various of its accounting policies and practices including its capitalization of certain expenses and dealings with certain vendors, including programmers and digital set-top terminal suppliers. Charter has advised the Company that it is fully cooperating with the SEC Staff.

      Charter is generally required to indemnify each of the named individual defendants in connection with the matters described above pursuant to the terms of its bylaws and (where applicable) such individual defendants’ employment agreements. In accordance with these documents, in connection with the pending grand jury investigation, SEC investigation and the above described lawsuits, some of Charter’s current directors and its current and former officers have been advanced certain costs and expenses incurred in connection with their defense. The limited liability company agreements of CCH II and the bylaws of CCH II Capital may require CCH II and CCH II Capital, respectively to indemnify Charter and the individual named defendants in connection with the matters set forth above.

      Charter has liability insurance coverage that it believes is available for the matters described above, where applicable, and subject to the terms, conditions and limitations of the respective policies. There is no assurance that current coverage will be sufficient for all claims described above or any future claims that may arise.

      In October 2001, two customers, Nikki Nicholls and Geraldine M. Barber, filed a class action suit against Charter Holdco in South Carolina Court of Common Pleas (“South Carolina Class Action”), purportedly on behalf of a class of Charter customers, alleging that Charter improperly charged them a

F-38

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

wire maintenance fee without request or permission. They also claimed that Charter improperly required them to rent analog and/or digital set-top terminals even though their television sets were “cable ready.” Charter removed this case to the United States District Court for the District of South Carolina in November 2001, and moved to dismiss the suit in December 2001. The federal judge remanded the case to the South Carolina Court of Common Pleas in August 2002 without ruling on the motion to dismiss. The plaintiffs subsequently moved for a default judgment, arguing that upon return to state court, Charter should have but did not file a new motion to dismiss. The state court judge granted the plaintiff’s motion over Charter’s objection in September 2002. Charter immediately appealed that decision to the South Carolina Court of Appeals and the South Carolina Supreme Court, but those courts have ruled that until a final judgment is entered against Charter, they lack jurisdiction to hear the appeal.

      In January 2003, the Court of Common Pleas granted the plaintiffs’ motion for class certification. In October and November 2003, Charter filed motions (a) asking that court to set aside the default judgment, and (b) seeking dismissal of plaintiffs’ suit for failure to state a claim. In January 2004, the Court of Common Pleas granted in part and denied in part Charter’s motion to dismiss for failure to state a claim. It also took under advisement Charter’s motion to set aside the default judgment.

      Charter is unable to predict the outcome of the lawsuits and the government investigations described above. An unfavorable outcome in the lawsuits or the government investigations described above could have a material adverse effect on the Company’s consolidated financial condition, results of operations or its liquidity, including its ability to comply with the Company’s debt covenants.

      In addition to the matters set forth above, Charter is also party to other lawsuits and claims that arose in the ordinary course of conducting its business. In the opinion of management, after taking into account recorded liabilities, the outcome of these other lawsuits and claims will not have a material adverse effect on the Company’s consolidated financial condition, results of operations or our liquidity, including our ability to comply with our debt covenants.

Regulation in the Cable Industry

      The operation of a cable system is extensively regulated by the Federal Communications Commission (“FCC”), some state governments and most local governments. The FCC has the authority to enforce its regulations through the imposition of substantial fines, the issuance of cease and desist orders and/or the imposition of other administrative sanctions, such as the revocation of FCC licenses needed to operate certain transmission facilities used in connection with cable operations. The 1996 Telecom Act altered the regulatory structure governing the nation’s communications providers. It removed barriers to competition in both the cable television market and the local telephone market. Among other things, it reduced the scope of cable rate regulation and encouraged additional competition in the video programming industry by allowing local telephone companies to provide video programming in their own telephone service areas.

      The 1996 Telecom Act required the FCC to undertake a number of implementing rulemakings. Moreover, Congress and the FCC have frequently revisited the subject of cable regulation. Future legislative and regulatory changes could adversely affect the Company’s operations.

21.     Employee Benefit Plan

      The Company’s employees may participate in the Charter Communications, Inc. 401(k) Plan. Employees that qualify for participation can contribute up to 50% of their salary, on a pre-tax basis, subject to a maximum contribution limit as determined by the Internal Revenue Service. The Company matches 50% of the first 5% of participant contributions. The Company made contributions to the 401(k) plan totaling $7 million, $8 million and $9 million for the years ended December 31, 2003, 2002 and 2001, respectively.

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CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

22.     Recently Issued Accounting Standards

      In December 2003, the FASB issued FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities (“FIN 46R”), which addresses how a business enterprise should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN 46R replaces FASB Interpretation No. 46, Consolidation of Variable Interest Entities, which was issued in January 2003. The Company will be required to apply FIN 46R to variable interests in variable interest entities created after December 31, 2003. For variable interests in variable interest entities created before December 31, 2003, FIN 46R will be applied beginning on March 31, 2004. For any variable interest entities that must be consolidated under FIN 46R that were created before December 31, 2003, the assets, liabilities and noncontrolling interests of the variable interest entity initially would be measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN 46R first applies may be used to measure the assets, liabilities and noncontrolling interest of the variable interest entity. The Company has identified DBroadband Holdings, LLC as a variable interest entity in accordance with FIN 46R. As the Company is not the primary beneficiary of the variable interest entity (as defined by FIN 46R), DBroadband Holdings, LLC has not been included in the Company’s consolidated financial statements. In future periods, the Company will continue to reassess its relationship with DBroadband Holdings, LLC to ensure proper recognition of the relationship in accordance with FIN 46R. See Note 19.

      In December 2003, the SEC issued Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition. SAB No. 104 revises or rescinds portions of interpretative guidance on revenue recognition. SAB No. 104 became effective immediately upon release and requires registrants to either restate prior financial statements or report a change in accounting principle. The adoption of SAB No. 104 did not have a material impact on the Company’s consolidated financial statements.

23. Parent Company Only Financial Statements

      As the result of limitations on, and prohibitions of, distributions, substantially all of the net assets of the consolidated subsidiaries are restricted for distribution to CCH II. The following condensed parent-only financial statements of the Company account for the investment in its subsidiaries under the equity method of accounting, as if the formation of CCH II, and the subsidiary contributions (see Note 1) had occurred on January 1, 2000. The financial statements should be read in conjunction with the accompanying consolidated financial statements of the Company and notes thereto.

F-40

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CCH II, LLC (Parent Company Only)

(dollars in millions)

Condensed Balance Sheet

	December 31,
	2003		2002
ASSETS
Other assets	$	16	$	—
Investment in subsidiaries		10,584		11,040
	$	10,600		11,040
LIABILITIES AND MEMBER’S EQUITY
Current liabilities	$	48	$	—
Long-term debt		1,601		—
Member’s equity		8,951		11,040
	$	10,600	$	11,040

Condensed Statement of Operations

	Year Ended December 31,
	2003			2002			2001
Interest expense	$	(45	)	$	—		$	—
Equity in income (losses) of subsidiaries		30			(5,286	)		(1,851	)
Net loss	$	(15	)	$	(5,286	)	$	(1,851	)

F-41

CCH II, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

CCH II, LLC (Parent Company Only)

(dollars in millions)

Condensed Statements of Cash Flows

			Year Ended December 31,
			2003			2002			2001
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net loss		$	(15	)	$	(5,286	)	$	(1,851	)
	Equity in losses (income) of subsidiaries			(30	)		5,286			1,851
	Change in current liabilities			48			—			—
		Net cash flows from operating activities		3			—			—
CASH FLOWS FROM INVESTING ACTIVITIES:
	Investment in subsidiaries			(10	)		(859	)		(4,767	)
	Distributions from subsidiaries			544			413			424
		Net cash flows from investing activities		534			(446	)		(4,343	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from issuance of debt			30			—			—
	Capital contributions			10			859			4,767
	Distributions			(561	)		(413	)		(424	)
	Payments for debt issuance costs			(16	)		—			—
		Net cash flows from financing activities		(537	)		446			4,343
NET INCREASE IN CASH AND CASH EQUIVALENTS				—			—			—
CASH AND CASH EQUIVALENTS, beginning of year				—			—			—
CASH AND CASH EQUIVALENTS, end of year			$	—		$	—		$	—
NON-CASH TRANSACTION
	Issuance of debt distributed to retire parent company debt		$	1,571		$	—		$	—

24.     Subsequent Event

      In April, 2004, Charter Operating sold $1.5 billion senior second lien notes and amended and restated its existing $5.1 billion credit facilities to defer maturities and increase availability under those facilities to approximately $6.5 billion, consisting of a $1.5 billion revolving credit facility, a $2.0 billion 6-year term loan facility and a $3.0 billion 7-year term loan facility. Charter Operating used the additional borrowings under the amended and restated credit facilities, together with proceeds from the private offering of notes, to refinance the credit facilities of its subsidiaries, CC VI Operating, Falcon Cable, and CC VIII Operating all as one concurrent transaction. The effect of the transaction was to substitute Charter Operating as the lender under the subsidiaries’ credit facilities in place of the banks.

F-42

Dealer Prospectus Delivery Obligation

      Until                     , 2004, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20. Indemnification of Directors and Officers

Indemnification Under the Limited Liability Company Agreement of CCH II

      The limited liability company agreement of CCH II provides that the members, the manager, the directors, their affiliates or any person who at any time serves or has served as a director, officer, employee or other agent of any member or any such affiliate, and who, in such capacity, engages or has engaged in activities on behalf of CCH II, shall be indemnified and held harmless by CCH II to the fullest extent permitted by law from and against any losses, damages, expenses, including attorneys’ fees, judgments and amounts paid in settlement actually and reasonably incurred by or in connection with any claim, action, suit or proceeding arising out of or incidental to such indemnifiable person’s acts or omissions on behalf of CCH II. Notwithstanding the foregoing, no indemnification is available under the limited liability company agreement in respect of any such claim adjudged to be primarily the result of bad faith, willful misconduct or fraud of an indemnifiable person. Payment of these indemnification obligations shall be made from the assets of CCH II and the members shall not be personally liable to an indemnifiable person for payment of indemnification.

Indemnification Under the Delaware Limited Liability Company Act

      Section 18-108 of the Delaware Limited Liability Company Act authorizes a limited liability company to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement.

Indemnification Under the By-Laws of CCH II Capital

      The by-laws of CCH II Capital provide that CCH II Capital, to the broadest and maximum extent permitted by applicable law, will indemnify each person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of CCH II Capital, or is or was serving at the request of CCH II Capital as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding. To the extent that a director, officer, employee or agent of CCH II Capital has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in the preceding paragraph, or in defense of any claim, issue or matter, such person will be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by such person. Expenses, including attorneys’ fees, incurred by a director or officer in defending any civil or criminal action, suit or proceeding may be paid by CCH II Capital in advance of the final disposition of such action, suit or proceeding, as authorized by the board of directors of CCH II Capital, upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such director or officer was not entitled to be indemnified by CCH II Capital as authorized in the by-laws of CCH II Capital. The indemnification and advancement of expenses provided by, or granted pursuant to, the by-laws of CCH II Capital will not be deemed exclusive and are declared expressly to be non-exclusive of any other rights to which those seeking indemnification or advancements of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding an office, and, unless otherwise provided when authorized or ratified, will continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person.

1

Indemnification Under the Delaware General Corporation Law

      Section 145 of the Delaware General Corporation Law, authorizes a corporation to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if the person acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. In addition, the Delaware General Corporation Law does not permit indemnification in any threatened, pending or completed action or suit by or in the right of the corporation in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses, which such court shall deem proper. To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter, such person shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by such person. Indemnity is mandatory to the extent a claim, issue or matter has been successfully defended. The Delaware General Corporation Law also allows a corporation to provide for the elimination or limit of the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director

      (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders,

      (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law,

      (iii) for unlawful payments of dividends or unlawful stock purchases or redemptions, or

      (iv) for any transaction from which the director derived an improper personal benefit. These provisions will not limit the liability of directors or officers under the federal securities laws of the United States.

Item 21. Exhibits and Financial Schedules.

Exhibits

      Exhibits are listed by numbers corresponding to the Exhibit Table of Item 601 in Regulation S-K.

Exhibit			Description
	2	.1	Purchase Agreement, dated May 29, 2003, by and between Falcon Video Communications, L.P. and WaveDivision Holdings, LLC (Incorporated by reference to Exhibit 2.1 to Charter Communications, Inc.’s current report on Form 8-K filed on May 30, 2003 (File No. 000-27927)).
	2	.2	Asset Purchase Agreement, dated September 3, 2003, by and between Charter Communications VI, LLC, The Helicon Group, L.P., Hornell Television Service, Inc., Interlink Communications Partners, LLC, Charter Communications Holdings, LLC and Atlantic Broadband Finance, LLC (Incorporated by reference to Exhibit 2.1 to Charter Communications, Inc.’s current report on Form 8-K/ A filed on September 3, 2003 (File No. 000-27927)).

2

Exhibit			Description
	2	.3	Purchase and Contribution Agreement, entered into as of June 1999, by and among BCI (USA), LLC, William Bresnan, Blackstone BC Capital Partners L.P., Blackstone BC Offshore Capital Partners L.P., Blackstone Family Investment Partnership III L.P., TCID of Michigan, Inc. and TCI Bresnan LLC and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 2.11 to Amendment No. 2 to the registration statement on Form S-1 of Charter Communications, Inc. filed on September 28, 1999 (File No. 333-83887)).
	2	.4	First Amendment to Purchase and Contribution Agreement dated as of February 14, 2000, by and among BCI (USA), LLC, William J. Bresnan, Blackstone BC Capital Partners L.P., Blackstone BC Offshore Capital Partners, L.P., Blackstone Family Media III L.P. (as assignee of Blackstone Family Investment III, L.P.), TCID of Michigan, Inc., TCI Bresnan, LLC and Charter Communications Holding Company, LLC. (Incorporated by reference to Exhibit 2.11(a) to the current report on Form 8-K filed by Charter Communications, Inc. on February 29, 2000 (File No. 000-27927)).
	2	.5	Asset Purchase Agreement, dated as of September 28, 2001, between High Speed Access Corp. and Charter Communications Holding Company, LLC (including as Exhibit A, the Form of Voting Agreement, as Exhibit B, the form of Management Agreement, as Exhibit C, the form of License Agreement, and as Exhibit D, the Form of Billing Letter Agreement) (Incorporated by reference to Exhibit 10.1 to Amendment No. 6 to Schedule 13D filed by Charter Communications, Inc. and others with respect to High Speed Access Corp., filed on October 1, 2001 (File No. 005-56431)).
	2	.6(a)	Asset Purchase Agreement, dated August 29, 2001, by and between Charter Communications Entertainment I, LLC, Interlink Communications Partners, LLC, and Rifkin Acquisitions Partners, LLC and Enstar Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture, and Enstar Cable of Macoupin County (Incorporated by reference to Exhibit 2.1 to the current report of Form 8-K filed by Enstar IV-2, L.P. on September 13, 2001 (File No. 000-15706)).
	2	.6(b)	Letter of Amendment, dated September 10, 2001, by and between Charter Communications Entertainment I, LLC, Interlink Communications Partners, LLC, and Rifkin Acquisition Partners, LLC and Enstar Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture, and Enstar Cable of Macoupin County (Incorporated by reference to Exhibit 2.1 to the current report of Form 8-K filed by Enstar IV-2, L.P. on September 13, 2001 (File No. 000-15706)).
	2	.6(c)	Letter of Amendment, dated April 10, 2002, by and between Charter Communications Entertainment I, LLC, Interlink Communications Partners, LLC, and Rifkin Acquisition Partners, LLC and Enstar Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture, and Enstar Cable of Macoupin County (Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed by Enstar Income Program IV-1, L.P. on April 22, 2002 (File No. 000-15705)).
	2	.7	Asset Purchase Agreement, dated April 10, 2002, by and between Charter Communications Entertainment I, LLC, and Enstar Income Program II-1, L.P. (Incorporated by reference to Exhibit 2.2 to the current report on Form 8-K filed by Enstar Income Program II-1, L.P. on April 26, 2002 (File No. 000-14508)).
	3	.1**	Certificate of Formation of CCH II, LLC.
	3	.2**	Amended and Restated Limited Liability Company Agreement of CCH II, LLC, dated as of July 10, 2003.
	3	.3**	Certificate of Incorporation of CCH II Capital Corp.
	3	.4**	Amended and Restated By-Laws of CCH II Capital Corp.
	4	.1	Indenture relating to the 10.25% Senior Notes due 2010, dated as of September 23, 2003, among CCH II, LLC, CCH II Capital Corporation and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications Inc. filed on September 26, 2003 (File No. 000-27927)).

3

Exhibit			Description
	4	.2	Exchange and Registration Rights Agreement relating to 10.25% Senior Notes due 2010, dated as of September 23, 2003, among CCH II, LLC, CCH II Capital Corp., and the purchasers set forth on the signature pages thereto (Incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc. filed on September 26, 2003 (File No. 000-27927)).
	4	.3	CCH II Note Purchase Agreement, dated as of September 18, 2003, by and between CCH II, LLC and CCH II Capital Corp. (Incorporated by reference to Exhibit 10.3 to Charter Communications, Inc.’s current report on Form 8-K filed on September 26, 2003 (File No. 000-27927)).
	4	.4	CCI Senior Notes Exchange Agreement, dated as of September 18, 2003, by and between Charter Communications, Inc., CCH II, LLC and CCH II Capital Corp. (Incorporated by reference to Exhibit 10.4 to Charter Communications, Inc.’s current report on Form 8-K filed on September 26, 2003 (File No. 000-27927)).
	4	.5	Holdings Senior Notes Exchange Agreement, dated as of September 18, 2003, by CCH II, LLC and CCH II Capital Corp. (Incorporated by reference to Exhibit 10.5 to Charter Communications, Inc.’s current report on Form 8-K filed on September 26, 2003 (File No. 000-27927)).
	5	.1*	Opinion of Irell & Manella LLP regarding legality.
	8	.1*	Opinion of Irell & Manella LLP regarding tax matters.
	10	.1	Exchange Agreement, dated as of February 14, 2000, by and among Charter Communications, Inc., BCI (USA), LLC, William J. Bresnan, Blackstone BC Capital Partners, L.P., Blackstone BC Offshore Capital Partners L.P., Blackstone Family Media, III L.P., (as assignee of Blackstone Family Investment III L.P.), TCID of Michigan, Inc., and TCI Bresnan LLC (Incorporated by reference to Exhibit 10.40 to the current report on Form 8-K of Charter Communications, Inc. filed on February 29, 2000 (File No. 000-27927)).
	10	.2(a)	Credit Agreement, among Charter Communications Operating, LLC and certain lenders and agents named therein, dated as of March 18, 1999, (Incorporated by reference to Exhibit 10.1 to Amendment No. 2 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on June 22, 1999 (File No. 333-77499)).
	10	.2(b)	First Amendment to Credit Agreement, among Charter Communications Operating, LLC, Charter Communications Holdings LLC and certain lenders and agents named therein, dated as of June 28, 1999 (Incorporated by reference to Exhibit 10.1(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)).
	10	.2(c)	Second Amendment to Credit Agreement, among Charter Communications Operating, LLC, Charter Communications Holdings LLC and certain lenders and agents named therein dated as of December 14, 1999 (Incorporated by reference to Exhibit 10.1(b) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)).
	10	.2(d)	Third Amendment to Credit Agreement, among Charter Communications Operating, LLC, Charter Communications, LLC and certain lenders and agents named therein, dated as of March 18, 2000 (Incorporated by reference to Exhibit 10.1(c) to the annual report on Form 10-K filed by Charter Communications, Inc. on March 30, 2000 (File No. 000-27927)).
	10	.2(e)	Credit Agreement, among Charter Communications Operating, LLC, Charter Communications Holdings, LLC and certain lenders and agents named therein, dated as of March 18, 1999, as amended and restated as of January 3, 2002 (Incorporated by reference to Exhibit 99.1 to the current report on Form 8-K filed by Charter Communications, Inc. on January 24, 2002 (File No. 000-27927)).
	10	.3(a)	Form of Credit Agreement, among Falcon Cable Communications, LLC, certain guarantors and several financial institutions or entities named therein, dated as of June 30, 1998, as amended and restated as of November 12, 1999, (Incorporated by reference to Exhibit 10.36 to Amendment No. 3 to the registration statement on Form S-1 of Charter Communications, Inc. filed on October 18, 1999 (File No. 333-83887)).

4

Exhibit			Description
	10	.3(b)	Credit Agreement, dated as of June 30, 1998, as amended and restated as of November 12, 1999, as further amended and restated as of September 26, 2001, among Falcon Cable Communications, LLC, certain guarantors, and several financial institutions or entities named therein. (Incorporated by reference to Exhibit 10.8 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)).
	10	.4(a)	Amended and Restated Credit Agreement dated as of February 2, 1999, as amended and restated as of February 14, 2000 by and among CC VIII Operating, LLC, as borrower, CC VIII Holdings, LLC, as guarantor, and several financial institutions or entities named therein (Incorporated by reference to Exhibit 10.18(a) to the annual report on Form 10-K filed by Charter Communications, Inc. on March 30, 2000 (File No. 000-27927)).
	10	.4(b)	Second Amended and Restated Credit Agreement, among CC VIII Operating, LLC, as borrower, CC VIII Holdings, LLC, as guarantor, and several financial institutions or entities named therein, dated as of February 2, 1999, as amended and restated as of January 2, 2001 (Incorporated by reference to Exhibit 10.17 to the annual report on Form 10-K filed by Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation on April 2, 2001 (File No. 333-77499)).
	10	.4(c)	Third Amended and Restated Credit Agreement, among CC VIII Operating, LLC, as borrower, CC VIII Holdings, LLC, as guarantor, and certain lenders and agents named therein, dated as of February 2, 1999, as amended and restated as of January 3, 2002 (Incorporated by reference to Exhibit 99.2 to the current report on Form 8-K filed by Charter Communications, Inc. on January 24, 2002 (File No. 000-27927)).
	10	.5	Credit Agreement, among CC VI Holdings, LLC, CC VI Operating Company, LLC and several financial institutions or entities named therein, dated as of November 12, 1999, (Incorporated by reference to Exhibit 10.41 to the report on Form 8-K of Charter Communications, Inc. filed on November 29, 1999 (File No. 000-27927)).
	10	.6	Second Amended and Restated Credit Agreement, among Charter Communications Operating, LLC, Charter Communications Holdings, LLC and certain lenders and agents named therein, dated as of June 19, 2003 (Incorporated by reference to Exhibit 10.1 to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.7	Amended and Restated Limited Liability Company Agreement of Charter Communications Operating, LLC, dated as of June 19, 2003 (Incorporated by reference to Exhibit 10.2 to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.8(a)	Commitment Letter, dated April 14, 2003, from Vulcan Inc. to Charter Communications VII, LLC (Incorporated by reference to Exhibit 10.3a to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.8(b)	Letter from Vulcan Inc. dated June 30, 2003 amending the Commitment Letter, dated April 14, 2003 (Incorporated by reference to Exhibit 10.3b to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.8(c)	Notice of Termination of Commitment, dated November 14, 2003 (Incorporated by reference to Exhibit 10.8(c) to the registration statement on Form S-4 of CCO Holdings, LLC filed on February 6, 2004 (File No. 333-112593)).
	10	.9	First Amended and Restated Mutual Services Agreement, dated as of December 21, 2000, by and between Charter Communications, Inc., Charter Investment, Inc. and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 10.2(b) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)).
	10	.10	Form of Management Agreement, dated as of November 9, 1999, by and between Charter Communications Holding Company, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.2(d) to Amendment No. 3 to the registration statement on Form S-1 of Charter Communications, Inc. filed on October 18, 1999 (File No. 333-83887)).

5

Exhibit			Description
	10	.11(a)	Amended and Restated Management Agreement, dated March 17, 1999, between Charter Communications Operating, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.2 to Amendment No. 4 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on July 22, 1999 (File No. 333-77499)).
	10	.11(b)	Amendment dated November 8, 1999 to Amended and Restated Management Agreement, dated as of March 17, 1999, by and among Charter Investment, Inc., Charter Communications, Inc. and Charter Communications Operating, LLC (Incorporated by reference to Exhibit 10.5(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.11(c)	Second Amendment to Amended and Restated Management Agreement, dated as of March 17, 1999, as amended as of January 1, 2002, by and between Charter Communications Operating, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.8(c) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927)).
	10	.12	Management Agreement, dated as of November 12, 1999, by and between CC VI Operating Company, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.2(d) to Amendment No. 1 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on April 18, 2000 (File No. 333-77499)).
	10	.13	Management Agreement, dated as of November 12, 1999 by and between Falcon Cable Communications, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.2(e) to Amendment No. 1 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on April 18, 2000 (File No. 333-77499)).
	10	.14	Amended and Restated Management Agreement dated as of June 19, 2003 by and between Charter Communications Operating, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.4 to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.15a	Second Amended and Restated Mutual Services Agreement dated as of June 19, 2003 by and between Charter Communications, Inc. and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 10.5a to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.15b	Letter Agreement regarding Mutual Services Agreement dated June 19, 2003 between Charter Investment, Inc., Charter Communications, Inc. and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 10.5b to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.16(a)†	Charter Communications Holdings, LLC 1999 Option Plan (Incorporated by reference to Exhibit 10.4 to Amendment No. 4 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on July 22, 1999 (File No. 333-77499)).
	10	.16(b)†	Assumption Agreement regarding Option Plan, dated as of May 25, 1999, by and between Charter Communications Holdings, LLC and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 10.13 to Amendment No. 6 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on August 27, 1999 (File No. 333-77499)).
	10	.16(c)†	Form of Amendment No. 1 to the Charter Communications Holdings, LLC 1999 Option Plan (Incorporated by reference to Exhibit 10.10(c) to Amendment No. 4 to the registration statement on Form S-1 of Charter Communications, Inc. filed on November 1, 1999 (File No. 333-83887)).
	10	.16(d)†	Amendment No. 2 to the Charter Communications Holdings, LLC 1999 Option Plan (Incorporated by reference to Exhibit 10.4(c) to the annual report on Form 10-K filed by Charter Communications, Inc. on March 30, 2000 (File No. 000-27927)).
	10	.16(e)†	Amendment No. 3 to the Charter Communications 1999 Option Plan (Incorporated by reference to Exhibit 10.14(e) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927).

6

Exhibit			Description
	10	.16(f)†	Amendment No. 4 to the Charter Communications 1999 Option Plan (Incorporated by reference to Exhibit 10.10(f) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.17(a)†	Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.25 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on May 15, 2001 (File No. 000-27927)).
	10	.17(b)†	Amendment No. 1 to the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.11(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.17(c)†	Amendment No. 2 to the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.10 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927).
	10	.17(d)†	Amendment No. 3 to the Charter Communications, Inc. 2001 Stock Incentive Plan effective January 2, 2002 (Incorporated by reference to Exhibit 10.15(c) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927).
	10	.17(e)†	Amendment No. 4 to the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.11(e) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.17(f)†	Amendment No. 5 to the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.11(f) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.17(g)†	Description of Long-Term Incentive Program under the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.11(g) to the annual report on Form 10-K of Charter Communications, Inc. filed on March 15, 2004 (File No. 000-27927)).
	10	.18†	Employment Agreement between Charter Communications, Inc. and Margaret A. “Maggie” Bellville, entered into as of April 27, 2003 (Incorporated by reference to Exhibit 10.1 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 3, 2003 (File No. 000-27927)).
	10	.19†	Employment Agreement, dated as of October 18, 2001, by and between Stephen E. Silva and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.5 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)).
	10	.20†	Employment Offer Letter, dated December 2, 2003 by and between Charter Communications, Inc. and Derek Chang (Incorporated by reference to Exhibit 10.24 to the annual report on Form 10-K of Charter Communications, Inc. filed on March 15, 2004 (File No. 000-27927)).
	10	.21†	Employment Offer Letter, dated December 17, 2003 by and between Charter Communications, Inc. and Michael Huseby (Incorporated by reference to Exhibit 10.25 to the annual report on Form 10-K of Charter Communications, Inc. filed on March 15, 2004 (File No. 000-27927)).
	10	.22†	Employment Agreement, dated as of October 8, 2001, by and between Carl E. Vogel and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.4 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)).
	10	.23†	Letter Agreement, dated May 25, 1999, between Charter Communications, Inc. and Marc Nathanson (Incorporated by reference to Exhibit 10.36 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)).
	10	.24†	Letter Agreement, dated March 27, 2000, between CC VII Holdings, LLC and Marc Nathanson amending the Letter Agreement dated May 25, 1999 (Incorporated by reference to Exhibit 10.13(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.25*	Amended and Restated Credit Agreement among Charter Communications Operating, LLC, CCO Holdings, LLC and certain lenders and agents named therein dated April 27, 2004.

7

Exhibit			Description
	10	.26	Indenture, dated as of April 9, 1998, by and among Renaissance Media (Louisiana) LLC, Renaissance Media (Tennessee) LLC, Renaissance Media Capital Corporation, Renaissance Media Group LLC and United States Trust Company of New York, as trustee (Incorporated by reference to Exhibit 4.1 to the registration statement on Forms S-4 of Renaissance Media Group LLC, Renaissance Media (Tennessee) LLC, Renaissance Media (Louisiana) LLC and Renaissance Media Capital Corporation filed on June 12, 1998 (File No. 333-56679)).
	10	.27	Indenture, dated as of December 10, 1998, by and among Avalon Cable of Michigan Holdings, Inc., Avalon Cable LLC and Avalon Cable Holdings Finance, Inc., as issuers and The Bank of New York, as trustee (Incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the registration statement on Form S-4 of Avalon Cable LLC, Avalon Cable Holdings Finance, Inc., Avalon Cable of Michigan Holdings, Inc. and Avalon Cable of Michigan, Inc. filed on May 28, 1999 (File Nos. 333-75415 and 333-75453)).
	10	.28	Supplemental Indenture, dated as of March 26, 1999, by and among Avalon Cable of Michigan Holdings, Inc., Avalon Cable LLC and Avalon Cable Holdings Finance, Inc., as issuers, Avalon Cable of Michigan, Inc., as guarantor, and The Bank of New York, as trustee (Incorporated by reference to Exhibit 4.2 to Amendment No. 1 to the registration statement on Form S-4 of Avalon Cable LLC, Avalon Cable Holdings Finance, Inc., Avalon Cable of Michigan Holdings, Inc. and Avalon Cable of Michigan, Inc. filed on May 28, 1999 (File Nos. 333-75415 and 333-75453)).
	10	.29	Indenture relating to the 8 3/4% Senior Notes due 2013, dated as of November 10, 2003, by and among CCO Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo Bank, N.A., as trustee (Incorporated by reference to Exhibit 10.5 to Charter Communications, Inc.’s current report on Form 8-K filed on November 12, 2003 (File No. 000-27927)).
	10	.30	Exchange and Registration Rights Agreement, dated as of November 10, 2003, by and between CCO Holdings, LLC and CCO Holdings Capital Corp. (Incorporated by reference to Exhibit 4.2 to Charter Communications, Inc.’s current report on Form 8-K filed on November 12, 2003 (File No. 000-27927)).
	10	.31	Purchase Agreement, dated as of November 4, 2003, by and between CCO Holdings, LLC and CCO Holdings Capital Corp. (Incorporated by reference to Exhibit 4.3 to Charter Communications, Inc.’s current report on Form 8-K filed on November 12, 2003 (File No. 000-27927)).
	10	.32*	Indenture relating to the 8% senior second lien notes due 2012 and 8 3/8% senior second lien notes due 2014, dated as of April 27, 2004, by and among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp. and Wells Fargo Bank, N.A. as trustee.
	10	.33*	Purchase Agreement, dated April 20, 2004 by and between Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.
	12	.1**	Computation of Ratio of Earnings to Fixed Charges.
	21	.1**	Subsidiaries of CCH II, LLC.
	23	.1*	Consent of Irell & Manella LLP (included with Exhibit 5.1).
	23	.2*	Independent Auditors’ Consent.
	24	.1**	Power of Attorney for Michael J. Huseby for CCH II, LLC (included in the signature pages to Amendment No. 1 to this registration statement).
	24	.2**	Power of Attorney for Michael J. Huseby for CCH II Capital Corp. (included in the signature pages Amendment No. 1 to this registration statement).
	25	.1**	Statement of eligibility of trustee.
	99	.1**	Form of Cover letter to Registered Holders and the Depository Trust Company Participants.
	99	.2**	Form of Broker letter.
	99	.3**	Form of letter of transmittal.
	99	.4**	Form of Notice of Guaranteed Delivery.

*  Document attached

**  Previously filed

†  Management compensatory plan or arrangement

8

Financial Statement Schedules

      Schedules not listed above are omitted because of the absence of the conditions under which they are required or because the information required by such omitted schedules is set forth in the financial statements or the notes thereto.

Item 22. Undertakings

      The undersigned registrants hereby undertake that:

      (1) Prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to the reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

      (2) Every prospectus: (i) that is filed pursuant to the immediately preceding paragraph or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

      The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

      Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

9

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, CCH II, LLC has duly caused this Amendment No. 2 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Louis, State of Missouri on the 5th day of May, 2004.

CCH II, LLC,

Registrant

By: CHARTER COMMUNICATIONS, INC.,

Sole Manager

By:  /s/ MICHAEL P. HUSEBY

Michael P. Huseby

Executive Vice President and

Chief Financial Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 2 to Registration Statement on Form S-4 has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ MICHAEL P. HUSEBY Michael P. Huseby, as attorney-in-fact for Paul G. Allen	Chairman of the Board of Directors, Charter Communications, Inc.	May 5, 2004
/s/ MICHAEL P. HUSEBY Michael P. Huseby as attorney-in-fact for Carl E. Vogel	President, Chief Executive Officer, Director (Principal Executive Officer), Charter Communications, Inc. and CCH II	May 5, 2004
/s/ PAUL E. MARTIN Paul E. Martin	Senior Vice President and Controller (Principal Accounting Officer)	May 5, 2004
/s/ JO ALLEN PATTON Jo Allen Patton	Director, Charter Communications, Inc.	May 5, 2004
/s/ MICHAEL P. HUSEBY Michael P. Huseby, as attorney-in-fact for Charles M. Lillis	Director, Charter Communications, Inc.	May 5, 2004
/s/ MICHAEL P. HUSEBY Michael P. Huseby, as attorney-in-fact for David C. Merritt	Director, Charter Communications, Inc.	May 5, 2004
/s/ MICHAEL P. HUSEBY Michael P. Huseby, as attorney-in-fact for Marc B. Nathanson	Director, Charter Communications, Inc.	May 5, 2004

10

Signature	Title	Date
/s/ MICHAEL P. HUSEBY Michael P. Huseby, as attorney-in-fact for Nancy B. Peretsman	Director, Charter Communications, Inc.	May 5, 2004
/s/ MICHAEL P. HUSEBY Michael P. Huseby	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	May 5, 2004
/s/ MICHAEL P. HUSEBY Michael P. Huseby, as attorney-in-fact for John H. Tory	Director, Charter Communications, Inc.	May 5, 2004
/s/ MICHAEL P. HUSEBY Michael P. Huseby, as attorney-in-fact for Larry W. Wangberg	Director, Charter Communications, Inc.	May 5, 2004

11

      Pursuant to the requirements of the Securities Act of 1933, CCH II Capital Corp. has duly caused this Amendment No. 2 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Louis, State of Missouri on the 5th day of May, 2004.

CCH II CAPITAL CORP.

Registrant

By:  /s/ MICHAEL P. HUSEBY

Michael P. Huseby

Executive Vice President and

Chief Financial Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 2 to Registration Statement on Form S-4 has been signed below by the following persons and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ MICHAEL P. HUSEBY Michael P. Huseby as attorney-in-fact for Carl E. Vogel	President, Chief Executive Officer, (Principal Executive Officer), and sole director of CCH II Capital Corp.		May 5, 2004
/s/ MICHAEL P. HUSEBY Michael P. Huseby	Executive Vice President and Chief Financial Officer (Principal Financial Officer)		May 5, 2004
/s/ PAUL E. MARTIN Paul E. Martin	Senior Vice President and Controller (Principal Accounting Officer)		May 5, 2004

12

EXHIBIT INDEX

Exhibit			Description
	2	.1	Purchase Agreement, dated May 29, 2003, by and between Falcon Video Communications, L.P. and WaveDivision Holdings, LLC (Incorporated by reference to Exhibit 2.1 to Charter Communications, Inc.’s current report on Form 8-K filed on May 30, 2003 (File No. 000-27927)).
	2	.2	Asset Purchase Agreement, dated September 3, 2003, by and between Charter Communications VI, LLC, The Helicon Group, L.P., Hornell Television Service, Inc., Interlink Communications Partners, LLC, Charter Communications Holdings, LLC and Atlantic Broadband Finance, LLC (Incorporated by reference to Exhibit 2.1 to Charter Communications, Inc.’s current report on Form 8-K/ A filed on September 3, 2003 (File No. 000-27927)).
	2	.3	Purchase and Contribution Agreement, entered into as of June 1999, by and among BCI (USA), LLC, William Bresnan, Blackstone BC Capital Partners L.P., Blackstone BC Offshore Capital Partners L.P., Blackstone Family Investment Partnership III L.P., TCID of Michigan, Inc. and TCI Bresnan LLC and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 2.11 to Amendment No. 2 to the registration statement on Form S-1 of Charter Communications, Inc. filed on September 28, 1999 (File No. 333-83887)).
	2	.4	First Amendment to Purchase and Contribution Agreement dated as of February 14, 2000, by and among BCI (USA), LLC, William J. Bresnan, Blackstone BC Capital Partners L.P., Blackstone BC Offshore Capital Partners, L.P., Blackstone Family Media III L.P. (as assignee of Blackstone Family Investment III, L.P.), TCID of Michigan, Inc., TCI Bresnan, LLC and Charter Communications Holding Company, LLC. (Incorporated by reference to Exhibit 2.11(a) to the current report on Form 8-K filed by Charter Communications, Inc. on February 29, 2000 (File No. 000-27927)).
	2	.5	Asset Purchase Agreement, dated as of September 28, 2001, between High Speed Access Corp. and Charter Communications Holding Company, LLC (including as Exhibit A, the Form of Voting Agreement, as Exhibit B, the form of Management Agreement, as Exhibit C, the form of License Agreement, and as Exhibit D, the Form of Billing Letter Agreement) (Incorporated by reference to Exhibit 10.1 to Amendment No. 6 to Schedule 13D filed by Charter Communications, Inc. and others with respect to High Speed Access Corp., filed on October 1, 2001 (File No. 005-56431)).
	2	.6	Asset Purchase Agreement, dated August 29, 2001, by and between Charter Communications Entertainment I, LLC, Interlink Communications Partners, LLC, and Rifkin Acquisitions Partners, LLC and Enstar Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture, and Enstar Cable of Macoupin County (Incorporated by reference to Exhibit 2.1 to the current report of Form 8-K filed by Enstar IV-2, L.P. on September 13, 2001 (File No. 000-15706)).
	2	.6(a)	Letter of Amendment, dated September 10, 2001, by and between Charter Communications Entertainment I, LLC, Interlink Communications Partners, LLC, and Rifkin Acquisition Partners, LLC and Enstar Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture, and Enstar Cable of Macoupin County (Incorporated by reference to Exhibit 2.1 to the current report of Form 8-K filed by Enstar IV-2, L.P. on September 13, 2001 (File No. 000-15706)).
	2	.6(b)	Letter of Amendment, dated April 10, 2002, by and between Charter Communications Entertainment I, LLC, Interlink Communications Partners, LLC, and Rifkin Acquisition Partners, LLC and Enstar Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture, and Enstar Cable of Macoupin County (Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed by Enstar Income Program IV-1, L.P. on April 22, 2002 (File No. 000-15705)).

Exhibit			Description
	2	.7	Asset Purchase Agreement, dated April 10, 2002, by and between Charter Communications Entertainment I, LLC, and Enstar Income Program II-1, L.P. (Incorporated by reference to Exhibit 2.2 to the current report on Form 8-K filed by Enstar Income Program II-1, L.P. on April 26, 2002 (File No. 000-14508)).
	3	.1**	Certificate of Formation of CCH II, LLC.
	3	.2**	Amended and Restated Limited Liability Company Agreement of CCH II, LLC, dated as of July 10, 2003.
	3	.3**	Certificate of Incorporation of CCH II Capital Corp.
	3	.4**	Amended and Restated By-Laws of CCH II Capital Corp.
	4	.1	Indenture relating to the 10.25% Senior Notes due 2010, dated as of September 23, 2003, among CCH II, LLC, CCH II Capital Corporation and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications Inc. filed on September 26, 2003 (File No. 000-27927)).
	4	.2	Exchange and Registration Rights Agreement relating to 10.25% Senior Notes due 2010, dated as of September 23, 2003, among CCH II, LLC, CCH II Capital Corporation, and the purchasers set forth on the signature pages thereto (Incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc. filed on September 25, 2003 (File No. 000-27927)).
	4	.3	CCH II Note Purchase Agreement, dated as of September 18, 2003, by and between CCH II, LLC and CCH II Capital Corp. (Incorporated by reference to Exhibit 10.3 to Charter Communications, Inc.’s current report on Form 8-K filed on September 26, 2003 (File No. 000-27927)).
	4	.4	CCI Senior Notes Exchange Agreement, dated as of September 18, 2003, by and between Charter Communications, Inc., CCH II, LLC and CCH II Capital Corp. (Incorporated by reference to Exhibit 10.4 to Charter Communications, Inc.’s current report on Form 8-K filed on September 26, 2003 (File No. 000-27927)).
	4	.5	Holdings Senior Notes Exchange Agreement, dated as of September 18, 2003, by CCH II, LLC and CCH II Capital Corp. (Incorporated by reference to Exhibit 10.5 to Charter Communications, Inc.’s current report on Form 8-K filed on September 26, 2003 (File No. 000-27927)).
	5	.1*	Opinion of Irell & Manella LLP regarding legality.
	8	.1*	Opinion of Irell & Manella LLP regarding tax matters.
	10	.1	Exchange Agreement, dated as of February 14, 2000, by and among Charter Communications, Inc., BCI (USA), LLC, William J. Bresnan, Blackstone BC Capital Partners L.P., Blackstone BC Offshore Capital Partners L.P., Blackstone Family Media, III L.P. (as assignee of Blackstone Family Investment III L.P.), TCID of Michigan, Inc., and TCI Bresnan LLC (Incorporated by reference to Exhibit 10.40 to the current report on Form 8-K of Charter Communications, Inc. filed on February 29, 2000 (File No. 000-27927)).
	10	.2(a)	Credit Agreement, among Charter Communications Operating, LLC and certain lenders and agents named therein, dated as of March 18, 1999, (Incorporated by reference to Exhibit 10.1 to Amendment No. 2 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on June 22, 1999 (File No. 333-77499)).
	10	.2(b)	First Amendment to Credit Agreement, among Charter Communications Operating, LLC, Charter Communications Holdings LLC and certain lenders and agents named therein, dated as of June 28, 1999 (Incorporated by reference to Exhibit 10.1(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)).
	10	.2(c)	Second Amendment to Credit Agreement, among Charter Communications Operating, LLC, Charter Communications Holdings LLC and certain lenders and agents named therein dated as of December 14, 1999 (Incorporated by reference to Exhibit 10.1(b) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)).

Exhibit			Description
	10	.2(d)	Third Amendment to Credit Agreement, among Charter Communications Operating, LLC, Charter Communications, LLC and certain lenders and agents named therein, dated as of March 18, 2000 (Incorporated by reference to Exhibit 10.1(c) to the annual report on Form 10-K filed by Charter Communications, Inc. on March 30, 2000 (File No. 000-27927)).
	10	.2(e)	Credit Agreement, among Charter Communications Operating, LLC, Charter Communications Holdings, LLC and certain lenders and agents named therein, dated as of March 18, 1999, as amended and restated as of January 3, 2002 (Incorporated by reference to Exhibit 99.1 to the current report on Form 8-K filed by Charter Communications, Inc. on January 24, 2002 (File No. 000-27927)).
	10	.3(a)	Form of Credit Agreement, among Falcon Cable Communications, LLC, certain guarantors and several financial institutions or entities named therein, dated as of June 30, 1998, as amended and restated as of November 12, 1999, (Incorporated by reference to Exhibit 10.36 to Amendment No. 3 to the registration statement on Form S-1 of Charter Communications, Inc. filed on October 18, 1999 (File No. 333-83887)).
	10	.3(b)	Credit Agreement, dated as of June 30, 1998, as amended and restated as of November 12, 1999, as further amended and restated as of September 26, 2001, among Falcon Cable Communications, LLC, certain guarantors, and several financial institutions or entities named therein. (Incorporated by reference to Exhibit 10.8 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)).
	10	.4(a)	Amended and Restated Credit Agreement dated as of February 2, 1999, as amended and restated as of February 14, 2000 by and among CC VIII Operating, LLC, as borrower, CC VIII Holdings, LLC, as guarantor, and several financial institutions or entities named therein (Incorporated by reference to Exhibit 10.18(a) to the annual report on Form 10-K filed by Charter Communications, Inc. on March 30, 2000 (File No. 000-27927)).
	10	.4(b)	Second Amended and Restated Credit Agreement, among CC VIII Operating, LLC, as borrower, CC VIII Holdings, LLC, as guarantor, and several financial institutions or entities named therein, dated as of February 2, 1999, as amended and restated as of January 2, 2001 (Incorporated by reference to Exhibit 10.17 to the annual report on Form 10-K filed by Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation on April 2, 2001 (File No. 333-77499)).
	10	.4(c)	Third Amended and Restated Credit Agreement, among CC VIII Operating, LLC, as borrower, CC VIII Holdings, LLC, as guarantor, and certain lenders and agents named therein, dated as of February 2, 1999, as amended and restated as of January 3, 2002 (Incorporated by reference to Exhibit 99.2 to the current report on Form 8-K filed by Charter Communications, Inc. on January 24, 2002 (File No. 000-27927)).
	10	.5	Credit Agreement, among CC VI Holdings, LLC, CC VI Operating Company, LLC and several financial institutions or entities named therein, dated as of November 12, 1999, (Incorporated by reference to Exhibit 10.41 to the report on Form 8-K of Charter Communications, Inc. filed on November 29, 1999 (File No. 000-27927)).
	10	.6	Second Amended and Restated Credit Agreement, among Charter Communications Operating, LLC, Charter Communications Holdings, LLC and certain lenders and agents named therein, dated as of June 19, 2003 (Incorporated by reference to Exhibit 10.1 to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.7	Amended and Restated Limited Liability Company Agreement of Charter Communications Operating, LLC, dated as of June 19, 2003 (Incorporated by reference to Exhibit 10.2 to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.8(a)	Commitment Letter, dated April 14, 2003, from Vulcan Inc. to Charter Communications VII, LLC (Incorporated by reference to Exhibit 10.3a to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.8(b)	Letter from Vulcan Inc. dated June 30, 2003 amending the Commitment Letter, dated April 14, 2003 (Incorporated by reference to Exhibit 10.3b to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).

Exhibit			Description
	10	.8(c)	Notice of Termination of Commitment, dated November 14, 2003 (Incorporated by reference to Exhibit 10.8(c) to the registration statement on Form S-4 of CCO Holdings, LLC filed on February 6, 2004 (File No. 333-112593)).
	10	.9	First Amended and Restated Mutual Services Agreement, dated as of December 21, 2000, by and between Charter Communications, Inc., Charter Investment, Inc. and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 10.2(b) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)).
	10	.10	Form of Management Agreement, dated as of November 9, 1999, by and between Charter Communications Holding Company, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.2(d) to Amendment No. 3 to the registration statement on Form S-1 of Charter Communications, Inc. filed on October 18, 1999 (File No. 333-83887)).
	10	.11(a)	Amended and Restated Management Agreement, dated March 17, 1999, between Charter Communications Operating, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.2 to Amendment No. 4 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on July 22, 1999 (File No. 333-77499)).
	10	.11(b)	Amendment dated November 8, 1999 to Amended and Restated Management Agreement, dated as of March 17, 1999, by and among Charter Investment, Inc., Charter Communications, Inc. and Charter Communications Operating, LLC (Incorporated by reference to Exhibit 10.5(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.11(c)	Second Amendment to Amended and Restated Management Agreement, dated as of March 17, 1999, as amended as of January 1, 2002, by and between Charter Communications Operating, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.8(c) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927)).
	10	.12	Management Agreement, dated as of November 12, 1999, by and between CC VI Operating Company, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.2(d) to Amendment No. 1 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on April 18, 2000 (File No. 333-77499)).
	10	.13	Management Agreement, dated as of November 12, 1999 by and between Falcon Cable Communications, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.2(e) to Amendment No. 1 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on April 18, 2000 (File No. 333-77499)).
	10	.14	Amended and Restated Management Agreement dated as of June 19, 2003 by and between Charter Communications Operating, LLC and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.4 to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.15a	Second Amended and Restated Mutual Services Agreement dated as of June 19, 2003 by and between Charter Communications, Inc. and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 10.5a to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.15b	Letter Agreement regarding Mutual Services Agreement dated June 19, 2003 between Charter Investment, Inc., Charter Communications, Inc. and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 10.5b to Charter Communications, Inc. quarterly report on Form 10-Q filed on August 5, 2003 (File No. 000-27927)).
	10	.16(a)†	Charter Communications Holdings, LLC 1999 Option Plan (Incorporated by reference to Exhibit 10.4 to Amendment No. 4 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on July 22, 1999 (File No. 333-77499)).

Exhibit			Description
	10	.16(b)†	Assumption Agreement regarding Option Plan, dated as of May 25, 1999, by and between Charter Communications Holdings, LLC and Charter Communications Holding Company, LLC (Incorporated by reference to Exhibit 10.13 to Amendment No. 6 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on August 27, 1999 (File No. 333-77499)).
	10	.16(c)†	Form of Amendment No. 1 to the Charter Communications Holdings, LLC 1999 Option Plan (Incorporated by reference to Exhibit 10.10(c) to Amendment No. 4 to the registration statement on Form S-1 of Charter Communications, Inc. filed on November 1, 1999 (File No. 333-83887)).
	10	.16(d)†	Amendment No. 2 to the Charter Communications Holdings, LLC 1999 Option Plan (Incorporated by reference to Exhibit 10.4(c) to the annual report on Form 10-K filed by Charter Communications, Inc. on March 30, 2000 (File No. 000-27927)).
	10	.16(e)†	Amendment No. 3 to the Charter Communications 1999 Option Plan (Incorporated by reference to Exhibit 10.14(e) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927).
	10	.16(f)†	Amendment No. 4 to the Charter Communications 1999 Option Plan (Incorporated by reference to Exhibit 10.10(f) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.17(a)†	Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.25 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on May 15, 2001 (File No. 000-27927)).
	10	.17(b)†	Amendment No. 1 to the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.11(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.17(c)†	Amendment No. 2 to the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.10 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927).
	10	.17(d)†	Amendment No. 3 to the Charter Communications, Inc. 2001 Stock Incentive Plan effective January 2, 2002 (Incorporated by reference to Exhibit 10.15(c) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927).
	10	.17(e)†	Amendment No. 4 to the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.11(e) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.17(f)†	Amendment No. 5 to the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.11(f) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.17(g)†	Description of Long-Term Incentive Program under the Charter Communications, Inc. 2001 Stock Incentive Plan (Incorporated by reference to Exhibit 10.11(g) to the annual report on Form 10-K of Charter Communications, Inc. filed on March 15, 2004 (File No. 000-27927)).
	10	.18†	Employment Agreement between Charter Communications, Inc. and Margaret A. “Maggie” Bellville, entered into as of April 27, 2003 (Incorporated by reference to Exhibit 10.1 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 3, 2003 (File No. 000-27927)).
	10	.19†	Employment Agreement, dated as of October 18, 2001, by and between Stephen E. Silva and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.5 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)).
	10	.20†	Employment Offer Letter, dated December 2, 2003 by and between Charter Communications, Inc. and Derek Chang (Incorporated by reference to Exhibit 10.24 to the annual report on Form 10-K of Charter Communications, Inc. filed on March 15, 2004 (File No. 000-27927)).
	10	.21†	Employment Offer Letter, dated December 17, 2003 by and between Charter Communications, Inc. and Michael Huseby (Incorporated by reference to Exhibit 10.25 to the annual report on Form 10-K of Charter Communications, Inc. filed on March 15, 2004 (File No. 000-27927)).

Exhibit			Description
	10	.22†	Employment Agreement, dated as of October 8, 2001, by and between Carl E. Vogel and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.4 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)).
	10	.23†	Letter Agreement, dated May 25, 1999, between Charter Communications, Inc. and Marc Nathanson (Incorporated by reference to Exhibit 10.36 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)).
	10	.24†	Letter Agreement, dated March 27, 2000, between CC VII Holdings, LLC and Marc Nathanson amending the Letter Agreement dated May 25, 1999 (Incorporated by reference to Exhibit 10.13(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
	10	.25*	Amended and Restated Credit Agreement among Charter Communications Operating, LLC, CCO Holdings, LLC and certain lenders and agents named therein dated April 27, 2004.
	10	.26	Indenture, dated as of April 9, 1998, by and among Renaissance Media (Louisiana) LLC, Renaissance Media (Tennessee) LLC, Renaissance Media Capital Corporation, Renaissance Media Group LLC and United States Trust Company of New York, as trustee (Incorporated by reference to Exhibit 4.1 to the registration statement on Forms S-4 of Renaissance Media Group LLC, Renaissance Media (Tennessee) LLC, Renaissance Media (Louisiana) LLC and Renaissance Media Capital Corporation filed on June 12, 1998 (File No. 333-56679)).
	10	.27	Indenture, dated as of December 10, 1998, by and among Avalon Cable of Michigan Holdings, Inc., Avalon Cable LLC and Avalon Cable Holdings Finance, Inc., as issuers and The Bank of New York, as trustee (Incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the registration statement on Form S-4 of Avalon Cable LLC, Avalon Cable Holdings Finance, Inc., Avalon Cable of Michigan Holdings, Inc. and Avalon Cable of Michigan, Inc. filed on May 28, 1999 (File Nos. 333-75415 and 333-75453)).
	10	.28	Supplemental Indenture, dated as of March 26, 1999, by and among Avalon Cable of Michigan Holdings, Inc., Avalon Cable LLC and Avalon Cable Holdings Finance, Inc., as issuers, Avalon Cable of Michigan, Inc., as guarantor, and The Bank of New York, as trustee (Incorporated by reference to Exhibit 4.2 to Amendment No. 1 to the registration statement on Form S-4 of Avalon Cable LLC, Avalon Cable Holdings Finance, Inc., Avalon Cable of Michigan Holdings, Inc. and Avalon Cable of Michigan, Inc. filed on May 28, 1999 (File Nos. 333-75415 and 333-75453)).
	10	.29	Indenture relating to the 8 3/4% Senior Notes due 2013, dated as of November 10, 2003, by and among CCO Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo Bank, N.A., as trustee (Incorporated by reference to Exhibit 10.5 to Charter Communications, Inc.’s current report on Form 8-K filed on November 12, 2003 (File No. 000-27927)).
	10	.30	Exchange and Registration Rights Agreement, dated as of November 10, 2003, by and between CCO Holdings, LLC and CCO Holdings Capital Corp. (Incorporated by reference to Exhibit 4.2 to Charter Communications, Inc.’s current report on Form 8-K filed on November 12, 2003 (File No. 000-27927)).
	10	.31	Purchase Agreement, dated as of November 4, 2003, by and between CCO Holdings, LLC and CCO Holdings Capital Corp. (Incorporated by reference to Exhibit 4.3 to Charter Communications, Inc.’s current report on Form 8-K filed on November 12, 2003 (File No. 000-27927)).
	10	.32*	Indenture relating to the 8% senior second lien notes due 2012 and 8 3/8% senior second lien notes due 2014, dated as of April 27, 2004, by and among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp. and Wells Fargo Bank, N.A. as trustee.
	10	.33*	Purchase Agreement, dated April 20, 2004 by and between Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.
	12	.1**	Computation of Ratio of Earnings to Fixed Charges.
	21	.1**	Subsidiaries of CCH II, LLC.

Exhibit			Description
	23	.1*	Consent of Irell & Manella LLP (included with Exhibit 5.1).
	23	.2*	Independent Auditors’ Consent.
	24	.1**	Power of Attorney for Michael J. Huseby for CCH II, LLC (included in the signature pages to Amendment No. 1 to this registration statement).
	24	.2**	Power of Attorney for Michael J. Huseby for CCH II, Capital Corp (included in the signature pages to Amendment No. 1 to this registration statement).
	25	.1**	Statement of eligibility of trustee.
	99	.1**	Form of Cover letter to Registered Holders and the Depository Trust Company Participants.
	99	.2**	Form of Broker letter.
	99	.3**	Form of letter of transmittal.
	99	.4**	Form of Notice of Guaranteed Delivery.

*  Document attached

**  Previously filed

†  Management compensatory plan or arrangement.

EX-5.1 2 c81112a2exv5w1.htm OPINION OF IRELL & MANELLA LLP

Exhibit 5.1

May 5, 2004

CCH II, LLC
CCH II Capital Corp.
12405 Powerscourt Drive
St. Louis, Missouri 63131

Re: CCH II, LLC and CCH II Capital Corp. Registration Statement on Form S-4

Ladies and Gentlemen:

     We are counsel to CCH II, LLC, a Delaware limited liability company (“CCH II”), and CCH II Capital Corp., a Delaware corporation (“CCH II Capital” and, together with CCH II, the “Issuers”), in connection with the filing by the Issuers with the Securities and Exchange Commission (the “SEC”) of a registration statement on Form S-4 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement relates to the proposed issuance by the Issuers of $1,601,375,000 aggregate principal amount of their new 10.25% senior notes due 2010 (the “New Notes”) in connection with the proposed exchange of $1,000 principal amount of the New Notes for each $1,000 principal amount of their outstanding 10.25% senior notes due 2010 (the “Original Notes”). The Original Notes are and the New Notes, upon issuance, will be governed by the Indenture, as defined below, by and between the Issuers and Wells Fargo Bank, National Association, as trustee (the “Trustee”). This opinion letter is delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.

     In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following documents (collectively, the “Transaction Documents”):

1.	The Registration Statement, in the form filed with the SEC;
2.	The Indenture dated as of September 23, 2003 (the “Indenture”) governing the Issuers’ 10.25% Senior Notes; and
3.	The forms of the New Notes.

     We also have examined such other corporate proceedings, documents and matters as we have deemed necessary or appropriate as a basis for this opinion.

CCH II, LLC
CCH II Capital Corp.
May 5, 2004
Page 2

     In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. As to certain facts material to this opinion, we have relied without independent verification upon oral or written statements and factual representations of officers and other representatives of the Issuers, Charter and others.

     Based upon the foregoing, and subject to the assumptions and limitations set forth herein, we are of the opinion that, when (i) the Registration Statement, as finally amended (including all necessary post-effective amendments, if any), shall have become effective under the Securities Act and (ii) the New Notes are duly executed, issued and delivered by duly authorized officers of the Issuers, and authenticated by the Trustee, all in accordance with the terms of the Indenture and the prospectus contained in the Registration Statement, against surrender and cancellation of a like principal amount of Original Notes, the New Notes issued by the Issuers will be legally issued and the New Notes will constitute valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms.

     The opinions expressed herein are subject to the qualification that enforceability of the Transaction Documents may be limited by (i) applicable bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent conveyance and transfer, and other laws and legal principles of general application relating to or affecting the rights and remedies of creditors, and (ii) by general principles of equity (whether applied in a proceeding at law or in equity), including, without limitation, principles of materiality, reasonableness, good faith and fair dealing, and the application of equitable principles to limit the availability of equitable remedies, such as specific performance of remedies granted under the Transaction Documents. Such principles of equity are of general application, and in applying such principles a court, among other things, might not allow a creditor to accelerate maturity of debt under certain circumstances including, without limitation, upon the occurrence of a default deemed immaterial or might decline to order the Issuers to perform covenants.

     Without limiting the paragraph above, certain of the provisions contained in the Transaction Documents may be limited or rendered unenforceable under applicable laws and judicial decisions including but not limited to (i) waivers of notices, defenses, remedies or demands (or the delay or omission in enforcement thereof), (ii) exculpation clauses in favor of the Trustee, (iii) clauses providing for recovery of attorneys’ fees or other expenses of enforcement, (iv) provisions for late payment fees and additional interest after default, (v) liability limitations or liquidated damages, (vi) indemnification provisions, (vii) provisions appointing the Trustee or another agent as attorney-in-fact for various purposes, (viii) provisions that purport to establish evidentiary standards, (ix) provisions that provide that the Transaction Documents may be modified or waived only in writing, and (x) waivers of the right to a jury trial. Nevertheless, subject to compliance with applicable

CCH II, LLC
CCH II Capital Corp.
May 5, 2004
Page 3

procedural requirements, and subject to the other qualifications set forth herein, the application of such laws and judicial decisions would not, in our opinion, make the remedy of acceleration afforded by the Notes and the Indenture inadequate for the practical realization of the essential benefits thereof upon a material default under the Notes and the Indenture.

     We observe that the Indenture and the New Notes purport to be governed by the laws of the State of New York, and our opinion is accordingly limited to such laws.

     We have relied on the Form T-1 and the certificates delivered by the Trustee as to the qualifications, authority, legal power and eligibility of the Trustee to act as trustee under the Indenture and to perform its duties in accordance with the terms of the Indenture.

     This opinion is given in respect of the Indenture and the New Notes only, and we express no opinion as to the legality, validity or binding effect of any related document, instrument or agreement or any other matter beyond the matters expressly set forth herein. This opinion speaks only as of its date, and we affirmatively disclaim any obligation to update this opinion letter to disclose to you facts, events or changes of law or interpretation of law occurring, arising or coming to our attention after the date hereof.

     This opinion is intended to be filed as an exhibit to the Registration Statement for the benefit of the holders of the Original Notes who will be acquiring the New Notes to be issued pursuant thereto and may not be otherwise used or relied upon and may not be otherwise disclosed, quoted, filed with a governmental agency or otherwise referred to without our prior written consent. However, we consent to the use of our name under the caption “Legal Matters” in the Registration Statement and prospectus and any amendments thereto. In giving such consent, we do not admit that we are experts within the meaning of the Securities Act or the rules and regulations thereunder or that this consent is required by Section 7 of the Securities Act.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

CCH II, LLC
CCH II Capital Corp.
May 5, 2004
Page 4

Very truly yours,

IRELL & MANELLA LLP

EX-5.1

OPINION OF IRELL & MANELLA LLP

EX-8.1

		Exhibit 8.1
	May 5, 2004
CCH II, LLC
CCH II Capital Corporation
12405 Powerscourt Drive
St. Louis, Missouri 63131

Ladies and Gentlemen:

     We have acted as your (the “Issuers”) counsel in connection with your proposed offer (the “Exchange Offer”) to issue your 10.25% senior notes due 2010 (the “New Notes”), in exchange for any and all of your outstanding 10.25% senior notes due 2010. We are delivering this opinion in accordance with the requirements of Item 601(b)(8) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”).

     In connection with this opinion, we have reviewed the Registration Statement on Form S-4 filed on May 5, 2004 with the Securities and Exchange Commission (the “Registration Statement”) and such other documents as we have deemed necessary or appropriate for our opinion. In such review, we have (a) relied upon the current and continued accuracy of the factual statements contained therein and (b) assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to the authentic originals of all documents submitted to us as copies. We have further assumed that all transactions pursuant to the Exchange Offer will be carried out in accordance with the terms of the governing documents without any amendments thereto or waiver of any terms thereof, and that such documents represent the entire agreement of the parties thereto.

     It is our opinion, based upon current law and the facts and assumptions stated or referred to in the Registration Statement under the caption “UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS” (the “Discussion”), that the statements of law and legal conclusions contained in the Discussion are correct in all material respects. In expressing this opinion, we mean that, if the Internal Revenue Service (the “IRS”) were to assert a position contrary to the conclusions expressed in the Discussion, the conclusions expressed in the Discussion, if properly presented to a court, should prevail. Nonetheless, the IRS might take positions contrary to such conclusions and there is a risk that such IRS positions might ultimately be sustained by the courts. Our opinion is not binding on the IRS or the courts and should not be construed as a guarantee of ultimate results. We have not sought and will not seek any rulings from the IRS with respect to the matters referred to in the Discussion.

CCH II, LLC
May 5, 2004
Page 2
 

     The opinion set forth herein is based on our interpretation of the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code”), the Income Tax Regulations promulgated thereunder (the “Regulations”), and administrative and judicial interpretations of the Code and the Regulations, all as currently in effect. Any or all of these could change, possibly with retroactive effect, and any such change could require a conclusion or conclusions different from those expressed in the Discussion. We do not undertake to advise you as to any future changes in the Code, the Regulations, or administrative or judicial interpretations of either that may affect our opinion, unless we are specifically retained to do so.

     No opinion is expressed on any matters other than those specifically referred to herein. The opinion expressed herein is for the exclusive benefit of you and the holders of the New Notes and may not be relied upon by any other person for any purpose or in any manner.

     We hereby consent to being named as counsel to the Issuers in the Registration Statement, to the filing of this opinion as Exhibit 8.1 to the Registration Statement and to the use of our name under the caption “UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS” in the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Securities and Exchange Commission thereunder.

Very truly yours,

 
 
Irell & Manella LLP

EX-10.25

                                                                   Exhibit 10.25

                                                                  EXECUTION COPY

================================================================================

                                 $6,500,000,000

                      AMENDED AND RESTATED CREDIT AGREEMENT

                     CHARTER COMMUNICATIONS OPERATING, LLC,
                                  as Borrower,

                               CCO HOLDINGS, LLC,

        J. P. MORGAN SECURITIES INC. and BANC OF AMERICA SECURITIES LLC,
                              as Co-Lead Arrangers

        J. P. MORGAN SECURITIES INC. and BANC OF AMERICA SECURITIES LLC,
                              as Joint Bookrunners

                              JPMORGAN CHASE BANK,
                             as Administrative Agent

                              JPMORGAN CHASE BANK,
                             BANK OF AMERICA, N.A.,
                         CITICORP NORTH AMERICA INC. and
      CREDIT SUISSE FIRST BOSTON, acting through its Cayman Island Branch,
                              as Syndication Agents

                                       and

                      GENERAL ELECTRIC CAPITAL CORPORATION,
                       CREDIT LYONNAIS NEW YORK BRANCH and
                         DEUTSCHE BANK SECURITIES INC.,
                             as Documentation Agents

                           Dated as of March 18, 1999,
                  as Amended and Restated as of April 27, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                                                       PAGE
                                                                                                       ----
                                                                                                    
SECTION 1.   DEFINITIONS...........................................................................      1
    1.1.        Defined Terms......................................................................      1
    1.2.        Other Definitional Provisions; Pro Forma Calculations..............................     27

SECTION 2.   AMOUNT AND TERMS OF COMMITMENTS........................................................    28
    2.1.        Commitments........................................................................     28
    2.2.        Procedure for Borrowing............................................................     29
    2.3.        Repayment of Loans.................................................................     29
    2.4.        Swingline Commitment...............................................................     30
    2.5.        Procedure for Swingline Borrowing; Refunding of Swingline Loans....................     30
    2.6.        Commitment Fees, Etc...............................................................     31
    2.7.        Termination or Reduction of Revolving Commitments..................................     32
    2.8.        Optional Prepayments...............................................................     32
    2.9.        Mandatory Prepayments..............................................................     32
    2.10.       Conversion and Continuation Options................................................     33
    2.11.       Limitations on Eurodollar Tranches.................................................     33
    2.12.       Interest Rates and Payment Dates...................................................     34
    2.13.       Computation of Interest and Fees...................................................     34
    2.14.       Inability to Determine Interest Rate...............................................     34
    2.15.       Pro Rata Treatment and Payments....................................................     35
    2.16.       Requirements of Law................................................................     36
    2.17.       Taxes..............................................................................     37
    2.18.       Indemnity..........................................................................     39
    2.19.       Change of Lending Office...........................................................     39
    2.20.       Replacement of Lenders.............................................................     39

SECTION 3.   LETTERS OF CREDIT.....................................................................     40
    3.1.        L/C Commitment.....................................................................     40
    3.2.        Procedure for Issuance of Letter of Credit.........................................     40
    3.3.        Fees and Other Charges.............................................................     40
    3.4.        L/C Participations.................................................................     41
    3.5.        Reimbursement Obligation of the Borrower...........................................     41
    3.6.        Obligations Absolute...............................................................     42
    3.7.        Letter of Credit Payments..........................................................     42
    3.8.        Applications.......................................................................     42

SECTION 4.   REPRESENTATIONS AND WARRANTIES........................................................     42
    4.1.        Financial Condition................................................................     42
    4.2.        No Change..........................................................................     43
    4.3.        Existence; Compliance with Law.....................................................     43
    4.4.        Power; Authorization; Enforceable Obligations......................................     43
    4.5.        No Legal Bar.......................................................................     43
    4.6.        Litigation.........................................................................     43
    4.7.        No Default.........................................................................     44
    4.8.        Ownership of Property; Liens.......................................................     44
    4.9.        Intellectual Property..............................................................     44
    4.10.       Taxes..............................................................................     44






                                                                                                       Page
                                                                                                       ----
                                                                                                    
    4.11.       Federal Regulations................................................................     44
    4.12.       Labor Matters......................................................................     44
    4.13.       ERISA..............................................................................     44
    4.14.       Investment Company Act; Other Regulations..........................................     45
    4.15.       Subsidiaries.......................................................................     45
    4.16.       Use of Proceeds....................................................................     45
    4.17.       Environmental Matters..............................................................     45
    4.18.       Certain Cable Television Matters...................................................     46
    4.19.       Accuracy of Information, Etc.......................................................     47
    4.20.       Security Interests.................................................................     47
    4.21.       Solvency...........................................................................     47
    4.22.       Certain Tax Matters................................................................     48
    4.23.       No Burdensome Restrictions.........................................................     48

SECTION 5.   CONDITIONS PRECEDENT..................................................................     48
    5.1.        Conditions to Restatement Effective Date...........................................     48
    5.2.        Conditions to Each Extension of Credit.............................................     49

SECTION 6.   AFFIRMATIVE COVENANTS.................................................................     50
    6.1.        Financial Statements...............................................................     50
    6.2.        Certificates; Other Information....................................................     50
    6.3.        Payment of Obligations.............................................................     52
    6.4.        Maintenance of Existence; Compliance...............................................     52
    6.5.        Maintenance of Property; Insurance.................................................     52
    6.6.        Inspection of Property; Books and Records; Discussions.............................     52
    6.7.        Notices............................................................................     52
    6.8.        Environmental Laws.................................................................     53
    6.9.        Additional Collateral..............................................................     53
    6.10.       Additional Credit Support..........................................................     54
    6.11.       Regulated Subsidiaries.............................................................     55

SECTION 7.   NEGATIVE COVENANTS....................................................................     55
    7.1.        Financial Condition Covenants......................................................     55
    7.2.        Indebtedness.......................................................................     56
    7.3.        Liens..............................................................................     57
    7.4.        Fundamental Changes................................................................     59
    7.5.        Disposition of Property............................................................     60
    7.6.        Restricted Payments................................................................     61
    7.7.        Investments........................................................................     63
    7.8.        Certain Payments and Modifications Relating to Indebtedness and Management Fees....     65
    7.9.        Transactions with Affiliates.......................................................     66
    7.10.       Sales and Leasebacks...............................................................     66
    7.11.       Changes in Fiscal Periods..........................................................     66
    7.12.       Negative Pledge Clauses............................................................     66
    7.13.       Clauses Restricting Subsidiary Distributions.......................................     67
    7.14.       Lines of Business; Holding Company Status..........................................     67
    7.15.       Investments in the Borrower........................................................     68

SECTION 8.   EVENTS OF DEFAULT.....................................................................     68

SECTION 9.   THE AGENTS............................................................................     73






                                                                                                       Page
                                                                                                       ----
                                                                                                    
    9.1.        Appointment........................................................................     73
    9.2.        Delegation of Duties...............................................................     73
    9.3.        Exculpatory Provisions.............................................................     74
    9.4.        Reliance by Administrative Agent...................................................     74
    9.5.        Notice of Default..................................................................     74
    9.6.        Non-Reliance on Agents and Other Lenders...........................................     74
    9.7.        Indemnification....................................................................     75
    9.8.        Agent in Its Individual Capacity...................................................     75
    9.9.        Successor Administrative Agent.....................................................     75
    9.10.       Documentation Agents and Syndication Agents........................................     76

SECTION 10.   MISCELLANEOUS........................................................................     76
    10.1.       Amendments and Waivers.............................................................     76
    10.2.       Notices............................................................................     77
    10.3.       No Waiver; Cumulative Remedies.....................................................     77
    10.4.       Survival of Representations and Warranties.........................................     77
    10.5.       Payment of Expenses and Taxes......................................................     78
    10.6.       Successors and Assigns; Participations and Assignments.............................     79
    10.7.       Adjustments; Set-off...............................................................     81
    10.8.       Counterparts.......................................................................     82
    10.9.       Severability.......................................................................     82
    10.10.      Integration........................................................................     82
    10.11.      GOVERNING LAW......................................................................     82
    10.12.      Submission to Jurisdiction; Waivers................................................     82
    10.13.      Acknowledgments....................................................................     83
    10.14.      Release of Guarantees and Liens....................................................     83
    10.15.      Confidentiality....................................................................     83
    10.16.      WAIVERS OF JURY TRIAL..............................................................     84
    10.17.      Master Assignment Agreements.......................................................     84
    10.18.      USA Patriot Act....................................................................     84
    10.19.      Waivers and Consents under the Existing Credit Agreement...........................     84


SCHEDULES:

1.1           Revolving Commitments and Term Loans on Restatement Effective Date
3.1           Existing Letters of Credit
4.15          Subsidiaries
4.20(a)       CCO Guarantee and Collateral Agreement UCC Filing Jurisdictions
4.20(b)       Silo Guarantee and Collateral Agreement UCC Filing Jurisdictions
7.5(i)        Permitted Dispositions

EXHIBITS:

A             Form of CCO Guarantee and Collateral Agreement
B             Form of Compliance Certificate
C             Form of Closing Certificate
D             Form of Addendum
E             Form of Assignment and Assumption
F             Form of Reinvestment Notice
G             Form of Exemption Certificate
H             Form of Specified Subordinated Note


I             Form of Notice of Borrowing
J             Form of Release
K             Forms of Master Assignment Agreements



                  AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 18,
1999, as amended and restated as of April 27, 2004, among CHARTER COMMUNICATIONS
OPERATING, LLC, a Delaware limited liability company (the "Borrower"), CCO
HOLDINGS, LLC, a Delaware limited liability company ("Holdings"), the several
banks and other financial institutions or entities from time to time parties to
this Agreement (the "Lenders"), JPMORGAN CHASE BANK, as Administrative Agent (in
such capacity, together with any successor, the "Administrative Agent"),
JPMORGAN CHASE BANK, BANK OF AMERICA, N.A., CITICORP NORTH AMERICA, INC., and
CREDIT SUISSE FIRST BOSTON, acting through its Cayman Island Branch, as
syndication agents (in such capacity, the "Syndication Agents"), GENERAL
ELECTRIC CAPITAL CORPORATION, CREDIT LYONNAIS NEW YORK BRANCH and DEUTSCHE BANK
SECURITIES INC., as documentation agents (in such capacity, the "Documentation
Agents").

                              W I T N E S S E T H :

                  WHEREAS, the Borrower entered into the Second Amended and
Restated Credit Agreement, dated as of March 18, 1999, as amended and restated
as of January 3, 2002, as further amended and restated as of June 19, 2003 (the
"Existing Credit Agreement"), among the Borrower, CCH (as defined below),
Holdings, the several banks and other financial institutions or entities party
thereto and the agents named therein; and

                  WHEREAS, the parties hereto have agreed to amend and restate
the Existing Credit Agreement as provided in this Agreement, which Agreement
shall become effective upon the satisfaction of the conditions precedent set
forth in Section 5.1 hereof; and

                  WHEREAS, each Exchanging Tranche B Term Lender (as defined
below) has agreed to exchange its "Tranche B Term Loan" (as defined in the
Existing Credit Agreement, the Existing CCVI Credit Agreement or Existing CCVIII
Credit Agreement (each as defined below)) or "Term Loan B" (as defined in the
Existing CCVII Credit Agreement (as defined below)), for Existing Tranche B Term
Loans (as defined below) in a like principal amount; and

                  WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities existing
under the Existing Credit Agreement or evidence repayment of any of such
obligations and liabilities and that this Agreement amend and restate in its
entirety the Existing Credit Agreement and re-evidence the obligations of the
Borrower outstanding thereunder;

                  NOW, THEREFORE, in consideration of the above premises, the
parties hereto hereby agree that on the Restatement Effective Date (as defined
below), the Existing Credit Agreement shall be amended and restated in its
entirety as follows:

                             SECTION 1. DEFINITIONS

                  1.1. Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.

                  "ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/100th of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus -1/2 of 1%. Any change in the ABR due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.



                  "ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.

                  "Addendum": an instrument, substantially in the form of
Exhibit D, by which a Lender consents to the amendment and restatement of the
Existing Credit Agreement pursuant hereto or becomes a party to this Agreement
as of the Restatement Effective Date.

                  "Additional Credit Support Compliance Date": the date on which
the Borrower and its Subsidiaries shall have complied with all of the provisions
of Section 6.10.

                  "Additional Subsidiary Guarantors": each Subsidiary of the
Borrower, other than any Initial Subsidiary Guarantor, any Avalon Subsidiary and
any Specified Excluded Subsidiary.

                  "Adjustment Date": as defined in the definition of "Applicable
Margin".

                  "Administrative Agent": as defined in the preamble hereto.

                  "Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

                  "Agents": the collective reference to the Documentation
Agents, the Syndication Agents and the Administrative Agent.

                  "Aggregate Exposure": with respect to any Lender at any time,
an amount equal to the sum of (a) the aggregate then unpaid principal amount of
such Lender's Term Loans and (b) the amount of such Lender's Revolving
Commitment then in effect or, if the Revolving Commitments have been terminated,
the amount of such Lender's Revolving Extensions of Credit then outstanding.

                  "Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.

                  "Agreement": this Amended and Restated Credit Agreement, as
further amended, supplemented or otherwise modified from time to time.

                  "Allocated Proceeds": as defined in Section 2.9(a).

                  "Annualized Asset Cash Flow Amount": with respect to any
Disposition of assets, an amount equal to the portion of Consolidated Operating
Cash Flow for the most recent Asset Disposition Test Period ending prior to the
date of such Disposition which was contributed by such assets multiplied by
four.

                  "Annualized Operating Cash Flow": for any fiscal quarter, an
amount equal to Consolidated Operating Cash Flow for such period multiplied by
four.

                  "Annualized Pro Forma Operating Cash Flow": an amount,
determined on any Disposition Date or Exchange Date in connection with any
proposed Disposition or Exchange pursuant to Section 7.5(f) or (g), equal to
Consolidated Operating Cash Flow for the most recent Asset Disposition

                                       2


Test Period multiplied by four, calculated in the manner contemplated by Section
1.2(e) but excluding the effect of such Disposition or Exchange.

                  "Applicable Margin": the rate per annum set forth under the
relevant column heading below:



                                       ABR Loans             Eurodollar Loans
                                       ---------             ----------------
                                                       
Revolving Loans                          2.00%                     3.00%
Swingline Loans                          2.00%                      N/A
Tranche A Term Loans                     2.00%                     3.00%
Tranche B Term Loans                     2.25%                     3.25%


; provided, that on and after the first Adjustment Date occurring after the end
of the Borrower's 2004 fiscal year, the Applicable Margin with respect to
Revolving Loans, Swingline Loans and Tranche A Term Loans will be determined
pursuant to the pricing grid set forth below (the "Pricing Grid"):



                                                               Applicable Margin for    Applicable Margin for
           Consolidated Leverage Ratio                           Eurodollar Loans             ABR Loans
           ---------------------------                           ----------------             ---------
                                                                                  
       Greater than or equal to 3.0 to 1.0                             3.00%                    2.00%

Greater than or equal to 2.50 to 1.0 but less than                     2.75%                    1.75%
                    3.0 to 1.0

              Less than 2.50 to 1.0                                    2.50%                    1.50%


For the purposes of the Pricing Grid, changes in the Applicable Margin resulting
from changes in the Consolidated Leverage Ratio shall become effective on the
date (the "Adjustment Date") that is three Business Days after the date on which
financial statements are delivered to the Lenders pursuant to Section 6.1 and
shall remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified in Section 6.1, then, until the date that is
three Business Days after the date on which such financial statements are
delivered, the highest rate set forth in each column of the Pricing Grid shall
apply. In addition, at all times while an Event of Default shall have occurred
and be continuing, the highest rate set forth in each column of the Pricing Grid
shall apply.

                  "Application": an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing Lender to
open a Letter of Credit.

                  "Approved Fund": as defined in Section 10.6.

                  "Asset Disposition Test Period": as of any date of
determination, the most recent fiscal quarter as to which financial statements
have been delivered pursuant to Section 6.1.

                  "Asset Sale": any Disposition of property or series of related
Dispositions of property (excluding (a) Exchanges pursuant to which no cash
consideration is received by the Borrower or any of its Subsidiaries and (b) any
such Disposition permitted by clause (a), (b), (c), (d) or (h) of Section 7.5)
that yields gross cash proceeds to the Borrower or any of its Subsidiaries in
excess of $5,000,000.

                  "Assignee": as defined in Section 10.6(b)(i).

                                       3


                  "Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit E.

                  "Assumption Agreement": an agreement in substantially the form
of the applicable Exhibit to the relevant Guarantee and Collateral Agreement,
pursuant to which a Subsidiary of the Borrower becomes a party thereto.

                  "Attributable Debt": in respect of a sale and leaseback
transaction entered into by the Borrower or any of its Subsidiaries, at the time
of determination, the present value of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction including any period for which such lease has been
extended or may, at the sole option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.

                  "Authorizations": all filings, recordings and registrations
with, and all validations or exemptions, approvals, orders, authorizations,
consents, Licenses, certificates and permits from, the FCC, applicable public
utilities and other Governmental Authorities, including, without limitation,
CATV Franchises, FCC Licenses and Pole Agreements.

                  "Available Liquidity": at any date, the sum of (a) the
Available Revolving Commitments and (b) the aggregate amount of cash and Cash
Equivalents on hand of the Borrower and its Subsidiaries not subject to any Lien
(other than pursuant to the Loan Documents or Liens permitted by Section 7.3(g)
or (o)).

                  "Available Revolving Commitment": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment then in effect over (b) such Lender's Revolving Extensions
of Credit then outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 2.6(a), the aggregate principal amount
of Swingline Loans then outstanding shall be deemed to be zero.

                  "Avalon Guarantee and Pledge Date": the first date after the
Guarantee and Pledge Date on which (i) all principal, premium, if any, interest
and other amounts in respect of the Avalon Notes have been paid in full, (ii)
all covenants contained in the Avalon Indenture applicable to the Avalon
Subsidiaries have ceased to be effective and (iii) (A) the Leverage Condition is
satisfied or (B) the Leverage Condition is no longer applicable (whether as a
result of payment in full, defeasance or otherwise, but not as a result of an
exception not requiring satisfaction of the Leverage Condition) to the ability
of each Avalon Subsidiary to take the actions and enter into the transactions
contemplated by Section 6.10.

                  "Avalon Indenture": the indenture governing the Avalon Notes.

                  "Avalon Notes": the 11-7/8% Senior Discount Notes due 2008
issued by CC V Holdings, LLC, and CC V Holdings Finance, Inc., and outstanding
as of the Restatement Effective Date.

                  "Avalon Subsidiaries": CC V Holdings, LLC and each of its
Subsidiaries, other than any Specified Excluded Subsidiary.

                  "Benefitted Lender": as defined in Section 10.7(a).

                                       4


                  "Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).

                  "Borrower": as defined in the preamble hereto.

                  "Borrowing Date": any Business Day specified by the Borrower
in a Notice of Borrowing as a date on which the Borrower requests the relevant
Lenders to make Loans hereunder.

                  "Budget": as defined in Section 6.2(c).

                  "Business": as defined in Section 4.17(b).

                  "Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close, provided, that with respect to notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
such day is also a day for trading by and between banks in Dollar deposits in
the interbank eurodollar market.

                  "Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.

                  "Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at the time of acquisition at least A-1 by Standard & Poor's Ratings Services
("S&P") or P-1 by Moody's Investors Service, Inc. ("Moody's"), or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (d)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than 30
days, with respect to securities issued or fully guaranteed or insured by the
United States government; (e) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at the time of acquisition at least A by S&P or A by Moody's; (f)
securities with maturities of six months or less from the date of acquisition
backed by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; or (g) shares of
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.

                  "CATV Franchise": collectively, with respect to the Borrower
and its Subsidiaries, (a) any franchise, license, permit, wire agreement or
easement granted by any political jurisdiction or unit or other local, state or
federal franchising authority (other than licenses, permits and easements not
material to the operations of a CATV System) pursuant to which such Person has
the right or license to operate a

                                       5


CATV System and (b) any law, regulation, ordinance, agreement or other
instrument or document setting forth all or any part of the terms of any
franchise, license, permit, wire agreement or easement described in clause (a)
of this definition.

                  "CATV System": any cable distribution system owned or acquired
by the Borrower or any of its Subsidiaries which receives audio, video, digital,
other broadcast signals or information or telecommunications by cable, optical,
antennae, microwave or satellite transmission and which amplifies and transmits
such signals to customers of the Borrower or any of its Subsidiaries.

                  "CCH": Charter Communications Holdings, LLC, a Delaware
limited liability company, together with its successors.

                  "CCHC": Charter Communications Holding Company, LLC, a
Delaware limited liability company, together with its successors.

                  "CCH Senior Note Indenture": the collective reference to the
Indentures entered into by CCH and Charter Communications Holdings Capital
Corporation in connection with the issuance of CCH's senior notes or senior
discount notes, together with all instruments and other agreements entered into
by CCH or Charter Communications Holdings Capital Corporation in connection
therewith.

                  "CCH Senior Notes": the senior notes and senior discount notes
of CCH and Charter Communications Holdings Capital Corporation issued pursuant
to the CCH Senior Note Indenture.

                  "CCI": Charter Communications, Inc., a Delaware corporation,
together with its successors.

                  "CCI Group": the collective reference to CCI, CCHC, CCH and
each of their respective Subsidiaries (including the Borrower and its
Subsidiaries) and any Non-Recourse Subsidiaries.

                  "CCO Guarantee and Collateral Agreement": the Amended and
Restated Guarantee and Collateral Agreement, substantially in the form of
Exhibit A, executed and delivered by Holdings, the Borrower and each Subsidiary
Guarantor, and to which (i) each Additional Subsidiary Guarantor will become a
party upon the occurrence of the Guarantee and Pledge Date and (ii) each Avalon
Subsidiary will become a party upon the occurrence of the Avalon Guarantee and
Pledge Date.

                  "CCO Senior Note Indenture": the Indenture entered into by the
Borrower in connection with the issuance of the CCO Senior Notes, together with
all instruments and other agreements entered into by the Borrower or any of its
Affiliates in connection therewith.

                  "CCO Senior Notes": the $1,500,000,000 aggregate principal
amount at maturity senior second lien notes of the Borrower issued on the
Restatement Effective Date.

                  "CCVI Credit Agreement": the Credit Agreement, dated as of
November 12, 1999, as amended and restated as of the date hereof, among CC VI
Holdings, LLC, CC VI Operating Company, LLC, as borrower, and the Borrower, as
administrative agent and sole lender.

                  "CCVI Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement, dated as November 12, 1999, as reaffirmed as of the date
hereof, made by CC VI Holdings, LLC, CC VI Operating Company, LLC and certain of
its Subsidiaries in favor of the Borrower, as administrative agent.

                                       6


                  "CCVII Credit Agreement": the Credit Agreement, dated as of
June 30, 1998, as amended and restated as of the date hereof, among Falcon Cable
Communications, LLC, as borrower, certain of its affiliates, as guarantors, and
the Borrower, as administrative agent and sole lender.

                  "CCVII Guarantee and Collateral Agreement": the Pledge and
Subordination Agreement, dated as of June 30, 1998, as reaffirmed as of the date
hereof, among Falcon Cable Communications, LLC, certain of its Subsidiaries and
Affiliates and the Borrower, as administrative agent.

                  "CCVIII Credit Agreement": the Credit Agreement, dated as of
February 2, 1999, as amended and restated as of the date hereof, among CC VIII
Holdings, LLC, CC VIII Operating, LLC, as borrower, and the Borrower, as
administrative agent and sole lender.

                  "CCVIII Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement, dated as of February 2, 1999, as reaffirmed as of the date
hereof, made by CC VIII Holdings, LLC, CC VIII Operating Company, LLC, and
certain of its Subsidiaries in favor of the Borrower, as administrative agent.

                  "CCVIII Interest": 100% of the Class A Members' Membership
Interests in CC VIII, LLC, a Delaware limited liability company, under the
Amended and Restated Limited Liability Company Agreement for CC VIII, LLC, made
and entered into effective as of March 31, 2003, as amended and/or restated from
time to time, including any modification in the class, number of units, or other
attributes associated with such Membership Interests; provided, that the CCVIII
Interest shall not include such Membership Interests to the extent that either
the "Adjusted Priority Capital" or the "Priority Rate" (as each such term is
defined under such agreement) exceeds the Adjusted Priority Capital or the
Priority Rate, respectively, as of the Restatement Effective Date.

                  "Charter Group": the collective reference to CCI, CCHC, the
Designated Holding Companies, the Borrower and its Subsidiaries, together with
any member of the Paul Allen Group or any Affiliate of any such member that, in
each case, directly or indirectly owns more than 50% of the Equity Interests
(determined on the basis of economic interests) in the Borrower or any of its
Subsidiaries. Notwithstanding the foregoing, no individual and no entity
organized for estate planning purposes shall be deemed to be a member of the
Charter Group.

                  "Code": the Internal Revenue Code of 1986, as amended from
time to time.

                  "Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any of the
Guarantee and Collateral Agreements.

                  "Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with any Loan Party within the
meaning of Section 4001 of ERISA or is part of a group that includes any Loan
Party and that is treated as a single employer under Section 414 of the Code.

                  "Compliance Certificate": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.

                  "Conduit Lender": any special purpose corporation organized
and administered by any Lender for the purpose of making Loans otherwise
required to be made by such Lender and designated by such Lender in a written
instrument; provided, that the designation by any Lender of a Conduit Lender
shall not relieve the designating Lender of any of its obligations to fund a
Loan under this Agreement if, for any reason, its Conduit Lender fails to fund
any such Loan, and the designating Lender (and not the

                                       7


Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be
entitled to receive any greater amount pursuant to Section 2.16, 2.17, 2.18 or
10.5 than the designating Lender would have been entitled to receive in respect
of the extensions of credit made by such Conduit Lender or (b) be deemed to have
any Revolving Commitment.

                  "Confidential Information Memorandum": the final Confidential
Information Memorandum dated March 2004 and furnished to certain of the Lenders
in connection with the Facilities.

                  "Consideration": with respect to any Investment or
Disposition, (a) any cash or other property (valued at fair market value in the
case of such other property) paid or transferred in connection therewith, (b)
the principal amount of any Indebtedness assumed in connection therewith and (c)
any letters of credit, surety arrangements or security deposits posted in
connection therewith.

                  "Consolidated Debt Service Coverage Ratio": as of the last day
of any period, the ratio of (a) Annualized Operating Cash Flow determined in
respect of the fiscal quarter ending on such day to (b) the sum of (i)
Consolidated Interest Expense for the period of four consecutive fiscal quarters
ending on such day and (ii) scheduled principal payments on Indebtedness of the
Borrower or any of its Subsidiaries for the period of four consecutive fiscal
quarters commencing immediately after such day (or, in the case of any Revolving
Facility, the excess, if any, of the relevant Total Revolving Extensions of
Credit outstanding on such day over the amount of the relevant Total Revolving
Commitments scheduled to be in effect at the end of such period of four
consecutive fiscal quarters); provided, that the final scheduled installment of
principal of the Tranche B Term Facility and any principal payment due under the
Revolving Facility on the Revolving Termination Date shall be excluded from the
calculation of amounts under this clause (ii).

                  "Consolidated First Lien Leverage Ratio": as of the last day
of any period, the ratio of (a) the aggregate amount of Term Loans and Revolving
Extensions of Credit outstanding on such day to (b) Annualized Operating Cash
Flow determined in respect of the fiscal quarter ending on such day.

                  "Consolidated Interest Coverage Ratio": as of the last day of
any period, the ratio of (a) Consolidated Operating Cash Flow for the period of
four consecutive fiscal quarters ending on such day to (b) Consolidated Interest
Expense for the period of four consecutive fiscal quarters ending on such day;
provided, that, for the purposes of this definition only, notwithstanding
anything to the contrary herein, (i) Consolidated Operating Cash Flow for the
period ending on June 30, 2004 shall be deemed to equal Consolidated Operating
Cash Flow for the period of two consecutive fiscal quarters ending on such date
multiplied by 2 and (ii) Consolidated Operating Cash Flow for the period ending
on September 30, 2004 shall be deemed to equal Consolidated Operating Cash Flow
for the period of three consecutive fiscal quarters ending on such date
multiplied by 4/3.

                  "Consolidated Interest Expense": for any period, the sum of
(a) total cash interest expense (including that attributable to Capital Lease
Obligations) of the Borrower and its Subsidiaries for such period with respect
to all outstanding Indebtedness of the Borrower and its Subsidiaries (including
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under Hedge
Agreements in respect of interest rates to the extent such net costs are
allocable to such period in accordance with GAAP) and (b) all Restricted
Payments made by the Borrower during such period in order to enable any of its
Affiliates to pay cash interest expense in respect of Indebtedness of such
Affiliate; provided, that, for the purposes of this definition only,
notwithstanding anything to the contrary herein, (i) Consolidated Interest
Expense for the period ending on June 30, 2004 shall be deemed to equal
Consolidated Interest Expense for the period of two consecutive fiscal quarters
ending on such date multiplied by 2 and (ii) Consolidated Interest Expense for

                                       8


the period of four fiscal quarters ending on September 30, 2004 shall be deemed
to equal Consolidated Interest Expense for the period of three consecutive
fiscal quarters ending on such date multiplied by 4/3 (it being understood that
semiannual interest payments shall not be so multiplied to the extent that two
such payments in respect of the same outstanding Indebtedness are made during
such period).

                  "Consolidated Leverage Ratio": as of the last day of any
period, the ratio of (a) Consolidated Total Debt on such day to (b) Annualized
Operating Cash Flow determined in respect of the fiscal quarter ending on such
day.

                  "Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that, GAAP to the contrary
notwithstanding, there shall be excluded (a) the income (or deficit) of any
Person accrued prior to the date it becomes a Subsidiary of the Borrower or is
merged into or consolidated with the Borrower or any of its Subsidiaries, (b)
the income (or deficit) of any Person (other than a Subsidiary of the Borrower)
in which the Borrower or any of its Subsidiaries has an ownership interest,
except to the extent that any such income is actually received by the Borrower
or such Subsidiary in the form of dividends or similar distributions, (c) the
undistributed earnings of any Subsidiary of the Borrower (including any Excluded
Acquired Subsidiary) to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary is not at the time permitted by the
terms of any Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary and (d) whether or not
distributed, the income of any Non-Recourse Subsidiary.

                  "Consolidated Operating Cash Flow": for any period with
respect to the Borrower and its Subsidiaries, Consolidated Net Income for such
period plus, without duplication and to the extent deducted in computing
Consolidated Net Income for such period, the sum of (i) total income tax
expense, (ii) interest expense, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness, (iii) depreciation and amortization expense, (iv)
management fees expensed during such period, (v) any extraordinary or
non-recurring expenses or losses, (vi) any expenses or losses consisting of
restructuring charges, litigation settlements and judgments and related costs,
(vii) losses on Dispositions of assets outside of the ordinary course of
business and (viii) other non-cash items reducing such Consolidated Net Income
and minus, without duplication and to the extent included in the statement of
Consolidated Net Income for such period, the sum of (i) any extraordinary or
non-recurring income or gains, (ii) gains on Dispositions of assets outside of
the ordinary course of business and (iii) other non-cash items increasing such
Consolidated Net Income, all as determined on a consolidated basis in accordance
with GAAP.

                  "Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness (other than, in the case of contingent
obligations of the type described in clause (f) of the definition of
"Indebtedness", any such obligations not constituting L/C Obligations) of the
Borrower and its Subsidiaries at such date, determined on a consolidated basis
in accordance with GAAP.

                  "Contractual Obligation": as to any Person, any provision of
any debt or equity security issued by such Person or of any agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound.

                  "Debt Repayment": as defined in Section 7.6(c).

                  "Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.

                                       9


                  "Designated Holding Companies": the collective reference to
(i) CCH, (ii) each direct and indirect Subsidiary, whether now existing or
hereafter created or acquired, of CCH of which Holdings is a direct or indirect
Subsidiary and (iii) Holdings.

                  "DHC Debt": the collective reference to all Indebtedness of
the Designated Holding Companies.

                  "DHC Default": with respect to any one or more issues of DHC
Debt aggregating more than $200,000,000, any default (other than a default based
on the failure of the relevant issuer to provide a certificate, report or other
information, until notice of such default is given to such issuer by the
required holders or trustee as specified in the indenture or agreement governing
such DHC Debt) or event of default.

                  "Disposition": with respect to any property, any sale, lease
(other than leases in the ordinary course of business, including leases of
excess office space and fiber leases), sale and leaseback, assignment,
conveyance, transfer or other disposition thereof, including pursuant to an
exchange for other property. The terms "Dispose" and "Disposed of" shall have
correlative meanings.

                  "Disposition Date": as defined in Section 7.5(f).

                  "Documentation Agents": as defined in the preamble hereto.

                  "Dollars" and "$": dollars in lawful currency of the United
States.

                  "Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.

                  "Environmental Laws": any and all foreign, federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

                  "Equity Interests": any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all classes of membership interests in a limited liability
company, any and all classes of partnership interests in a partnership and any
and all other equivalent ownership interests in a Person, and any and all
warrants, rights or options to purchase any of the foregoing.

                  "ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time and the regulations promulgated thereunder.

                  "Eurocurrency Reserve Requirements": for any day, as applied
to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.

                                       10


                  "Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Telerate screen (or otherwise on such
screen), the "Eurodollar Base Rate" shall be determined by reference to such
other comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.

                  "Eurodollar Loans": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.

                  "Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):

                              Eurodollar Base Rate
                    -----------------------------------------
                    1.00 - Eurocurrency Reserve Requirements

                  "Eurodollar Tranche": the collective reference to Eurodollar
Loans under a particular Facility, the then current Interest Periods with
respect to all of which begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same day).

                  "Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.

                  "Exchange": any exchange of operating assets for other
operating assets in a Permitted Line of Business and, subject to the last
sentence of this definition, of comparable value and use to those assets being
exchanged, including exchanges involving the transfer or acquisition (or both
transfer and acquisition) of Equity Interests of a Person so long as 100% of the
Equity Interests of such Person are transferred or acquired, as the case may be.
It is understood that exchanges of the kind described above as to which a
portion of the consideration paid or received is in the form of cash shall
nevertheless constitute "Exchanges" for the purposes of this Agreement.

                  "Exchange Date": the date of consummation of any Exchange;
provided that, with respect to a series of related Dispositions required
pursuant to a plan of Exchange contained in a single agreement, the Exchange
Date shall be the date of the first such Disposition.

                  "Exchange Excess Amount": as defined in Section 7.5(g).

                  "Exchanging Tranche B Term Lender": each Tranche B Term Lender
designated on Schedule 1.1 as an "Exchanging Tranche B Term Lender" and
exchanging its "Tranche B Term Loan" under and as defined in the Existing Credit
Agreement, the Existing CCVI Credit Agreement or the Existing CCVIII Credit
Agreement or its "Term Loan B" under the Existing CCVII Credit Agreement for
Existing Tranche B Term Loans hereunder.

                                       11


                  "Excluded Acquired Subsidiary": any Subsidiary described in
paragraph (g) or (h) of Section 7.2 to the extent that the documentation
governing the Indebtedness referred to in said paragraph prohibits (including by
reason of its inability to satisfy a leverage ratio or other financial covenant
condition under such Indebtedness) such Subsidiary from becoming a Subsidiary
Guarantor, but only so long as such Indebtedness remains outstanding.

                  "Existing CCVI Credit Agreement": the Credit Agreement, dated
as of November 12, 1999, among CC VI Holdings, LLC, CC VI Operating Company,
LLC, the lenders party thereto, the syndication agents and documentation agents
named therein, as borrower, and Toronto Dominion (Texas), Inc., as
administrative agent.

                  "Existing CCVII Credit Agreement": the Credit Agreement, dated
as of June 30, 1998, as amended and restated as of November 12, 1999, as further
amended and restated as of September 26, 2001, among Falcon Cable
Communications, LLC, as borrower, certain of its affiliates as guarantors, the
lenders party thereto, the syndication agent and documentation agents named
therein, and Toronto Dominion (Texas), Inc., as administrative agent.

                  "Existing CVIII Credit Agreement": the Third Amended and
Restated Credit Agreement, dated as of February 2, 1999, as amended and restated
as of January 3, 2002, among CC VIII Holdings, LLC, CC VIII Operating, LLC, as
borrower, the lenders party thereto, the syndication agent and documentation
agents named therein, and Toronto Dominion (Texas), Inc., as administrative
agent.

                  "Existing Credit Agreement": as defined in the recitals
hereto.

                  "Existing Tranche A Term Lender": each Lender that holds an
Existing Tranche A Term Loan.

                  "Existing Tranche A Term Loan": as defined in Section 2.1(a).

                  "Existing Tranche B Term Lender": each Lender that holds an
Existing Tranche B Term Loan.

                  "Existing Tranche B Term Loan": as defined in Section 2.1(a).

                  "Facility": each of (a) the Tranche A Term Loans (the "Tranche
A Term Facility"), (b) the Tranche B Term Loans (the "Tranche B Term Facility")
and (c) the Revolving Commitments and the extensions of credit made thereunder
(the "Revolving Facility").

                  "FCC": the Federal Communications Commission and any successor
thereto.

                  "FCC License": any community antenna relay service, broadcast
auxiliary license, earth station registration, business radio, microwave or
special safety radio service license issued by the FCC pursuant to the
Communications Act of 1934, as amended.

                  "Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.

                                       12


                  "Flow-Through Entity": any Person that is not treated as a
separate tax paying entity for United States federal income tax purposes.

                  "Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.

                  "Funding Office": the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.

                  "GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on December
31, 2003 as applied in the preparation of the most recent audited financial
statements delivered pursuant to Section 6.1 prior to April 1, 2004. In the
event that any "Accounting Change" (as defined below) shall occur and such
change results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then the Borrower and the Administrative
Agent agree to enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Changes with the desired
result that the criteria for evaluating the Borrower's financial condition shall
be the same after such Accounting Changes as if such Accounting Changes had not
been made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Administrative Agent and the Required Lenders,
all financial covenants, standards and terms in this Agreement shall continue to
be calculated or construed as if such Accounting Changes had not occurred.
"Accounting Changes" refers to changes in (a) accounting principles required by
the promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the SEC, (b) the Borrower's manner of
accounting as directed or otherwise required or requested by the SEC (including
such SEC changes affecting a Qualified Parent Company and applicable to the
Borrower), and (c) the Borrower's manner of accounting addressed in a
preferability letter from the Borrower's independent auditors to the Borrower
(or a Qualified Parent Company and applicable to the Borrower) in order for such
auditor to deliver an opinion on the Borrower's financial statements required to
be delivered pursuant to Section 6.1 without qualification.

                  "Governmental Authority": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

                  "Guarantee and Collateral Agreements": the collective
reference to the CCO Guarantee and Collateral Agreement and the Silo Guarantee
and Collateral Agreements.

                  "Guarantee and Pledge Date": the first date on which (a) a
responsible officer of CCH certifies in the certificate required to be delivered
in Section 6.2(e) that, after giving pro forma effect to each Additional
Subsidiary Guarantor becoming a Guarantor, CCH would have been able to satisfy
the Leverage Condition, or (b) the Leverage Condition is no longer applicable
(whether as a result of payment in full, defeasance or otherwise, but not as a
result of an exception not requiring satisfaction of the Leverage Condition) to
the ability of each Additional Subsidiary Guarantor to take the actions and
enter into the transactions contemplated by Section 6.10.

                  "Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a reimbursement, counterindemnity or similar

                                       13


obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term "Guarantee Obligation" shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

                  "Guarantors": the collective reference to Holdings and the
Subsidiary Guarantors.

                  "Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements dealing with interest rates or currency
exchange rates or the exchange of nominal interest obligations, either generally
or under specific contingencies.

                  "Helicon": Charter Helicon, LLC, a Delaware limited liability
company.

                  "Helicon Preferred Stock": 100% of the Class A Preferred
Membership Interest in Helicon, with a dividend rate of 10% per annum and an
aggregate redemption value of $25,000,000, having the terms and conditions in
effect on the Restatement Effective Date.

                  "Holdings": as defined in the preamble hereto, together with
any successor thereto.

                  "Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptances, letters of credit, surety bonds or similar
arrangements, (g) the liquidation value of all redeemable preferred Equity
Interests of such Person (excluding, however, the CCVIII Interest and the
Helicon Preferred Stock), (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above,
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation, and (j) for the
purposes of Sections 8(e) and (f) only, all obligations of such Person in
respect of Hedge Agreements. The Indebtedness of any Person shall

                                       14


include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness expressly
provide that such Person is not liable therefor. It is understood that
"Indebtedness" shall not include obligations under the promissory notes dated
November 10, 2003 issued to Holdings by Charter Communications VII, LLC and CCO
NR Holdings, LLC in the respective principal amounts of $294,000,000 and
$67,000,000 so long as (i) the terms of such notes are not modified from those
in effect on the Restatement Effective Date, (ii) no principal, interest or
other amount is paid in respect of such notes during the term of this Agreement
(unless such payment in concurrently contributed to the Borrower as common
equity) and (iii) such notes are converted into common equity within 5 Business
Days after the Guarantee and Pledge Date.

                  "Initial Subsidiary Guarantor": each Subsidiary of the
Borrower other than any Silo Entity and any Specified Excluded Subsidiary.

                  "Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.

                  "Insolvent": pertaining to a condition of Insolvency.

                  "Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to sue at
law or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.

                  "Intercompany Note": as defined in the relevant Guarantee and
Collateral Agreement.

                  "Intercompany Obligations": as defined in the relevant
Guarantee and Collateral Agreement.

                  "Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Loan that is an ABR Loan
and any Swingline Loan), the date of any repayment or prepayment made in respect
thereof.

                  "Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three, six or, if
consented to by (which consent shall not be unreasonably withheld) each Lender
under the relevant Facility, nine or twelve months thereafter, as selected by
the Borrower in its notice of borrowing or notice of conversion, as the case may
be, given with respect thereto; and (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three, six or, if consented to by (which consent shall
not be unreasonably withheld) each Lender under the relevant Facility, nine or
twelve months thereafter, as selected by the Borrower by irrevocable notice to
the Administrative Agent not less than three Business Days prior to the last day
of the then current Interest Period with respect thereto; provided that, all of
the foregoing provisions relating to Interest Periods are subject to the
following:

                                       15


                  (i)      if any Interest Period would otherwise end on a day
         that is not a Business Day, such Interest Period shall be extended to
         the next succeeding Business Day unless the result of such extension
         would be to carry such Interest Period into another calendar month in
         which event such Interest Period shall end on the immediately preceding
         Business Day;

                  (ii)     the Borrower may not select an Interest Period under
         a particular Facility that would extend beyond the Revolving
         Termination Date or beyond the date final payment is due on the
         relevant Tranche A Term Loans or the Tranche B Term Loans, as the case
         may be;

                  (iii)    any Interest Period that begins on the last Business
         Day of a calendar month (or on a day for which there is no numerically
         corresponding day in the calendar month at the end of such Interest
         Period) shall end on the last Business Day of a calendar month; and

                  (iv)     the Borrower shall select Interest Periods so as not
         to require a payment or prepayment of any Eurodollar Loan during an
         Interest Period for such Loan.

                  "Investments": as defined in Section 7.7.

                  "Issuing Lender": each of JPMorgan Chase Bank, Bank of
America, N.A., The Toronto-Dominion Bank (in its capacity as issuer of any
Letter of Credit listed on Schedule 3.1), and any other Revolving Lender that
has agreed in its sole discretion to act as an "Issuing Lender" hereunder and
that has been approved in writing by the Administrative Agent as an "Issuing
Lender" hereunder, in each case in its capacity as issuer of any Letter of
Credit.

                  "KPMG": KPMG, LLP.

                  "LaGrange Documents": collectively, the LaGrange Indenture,
the LaGrange Sale-Leaseback Agreement, the LaGrange Management Agreement, the
LaGrange Subordination Agreement and the LaGrange Formation Documents and the
other organizational documents of the LaGrange Subsidiaries, in each case as in
effect on the Restatement Effective Date or as amended from time to time
thereafter in a manner that does not materially and adversely affect the
interests of the Lenders and does not result in materially more onerous terms
and conditions with respect to the Borrower and its Subsidiaries.

                  "LaGrange Formation Documents": the Articles of Organization
of Charter LaGrange, L.L.C., dated July 30, 1998 (as corrected by Certificate of
Correction on July 10, 2003), Operating Agreement of Charter-LaGrange, L.L.C.,
dated July 30, 1998, as amended by the First Amendment to Operating Agreement
dated June 19, 2003, the Amended and Restated Articles of Incorporation of CF
Finance LaGrange, Inc., dated August 8, 1998 (as corrected by Certificated of
Correction filed on July 10, 2003), and Bylaws of CF Finance LaGrange, Inc.,
dated August 4, 1998.

                  "LaGrange Indenture": the Trust Indenture and Security
Agreement, dated as of July 1, 1998, between the LaGrange Development Authority
and Reliance Trust Company, as trustee.

                  "LaGrange Management Agreement": the Management Agreement,
dated as of August 4, 1998, between Charter Communications, LLC (formerly known
as Charter Communications, L.P.) and Charter-LaGrange, L.L.C.

                  "LaGrange Sale-Leaseback Agreement": the Lease Agreement,
dated as of July 1, 1998, between the LaGrange Development Authority and Charter
LaGrange, L.L.C.

                                       16


                  "LaGrange Subordination Agreement": the Management Fee
Subordination Agreement, dated as of July 1, 1998, among Charter Communications,
LLC (formerly known as Charter Communications, L.P.), Charter-LaGrange, L.L.C.
and the LaGrange Development Authority.

                  "LaGrange Subsidiaries": collectively, CF Finance LaGrange,
Inc., a Georgia corporation, and Charter LaGrange, L.L.C., a Georgia limited
liability company, and their respective Subsidiaries.

                  "L/C Commitment": $350,000,000.

                  "L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Commitment Period.

                  "L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit that have not then been reimbursed pursuant to Section 3.5.

                  "L/C Participants": with respect to any Letter of Credit, the
collective reference to all Revolving Lenders other than the Issuing Lender that
issued such Letter of Credit.

                  "Lenders": as defined in the preamble hereto.

                  "Letters of Credit": as defined in Section 3.1(a).

                  "Leverage Condition": the condition in the CCH Senior Note
Indenture that permits Holdings and its Restricted Subsidiaries (as defined in
the CCH Senior Note Indenture) to take any action, consummate any transaction,
or suffer any condition to exist if, after giving effect to such action,
transaction or condition, CCH would be permitted to incur at least $1.00 of
additional Indebtedness (as defined in the CCH Senior Note Indenture) pursuant
to the Leverage Ratio (as defined in the CCH Senior Note Indenture) test as set
forth in the first paragraph of Section 4.10 of the CCH Senior Note Indenture.
All references in this definition to the CCH Senior Note Indenture are to such
Indenture as in effect on the Restatement Effective Date.

                  "License": as to any Person, any license, permit, certificate
of need, authorization, certification, accreditation, franchise, approval, or
grant of rights by any Governmental Authority or other Person necessary or
appropriate for such Person to own, maintain, or operate its business or
property, including FCC Licenses.

                  "Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).

                  "Loan": any loan made or held by any Lender pursuant to this
Agreement.

                  "Loan Documents": this Agreement, the Guarantee and Collateral
Agreements (including any reaffirmation agreements in connection therewith), the
Silo Credit Agreements, the Notes and any other agreements, documents or
instruments to which any Loan Party is party and which is designated as a Loan
Document.

                                       17


                  "Loan Parties": Holdings, the Borrower and each Subsidiary of
the Borrower that is a party to a Loan Document (including the Silo Credit
Entities).

                  "Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of any Revolving Facility,
prior to any termination of the Revolving Commitments, the holders of more than
50% of the relevant Total Revolving Commitments).

                  "Management Fee Agreement": the Second Amended and Restated
Management Agreement dated as of June 19, 2003 between the Borrower and CCI.

                  "Master Assignment Agreement": each Master Assignment
Agreement to be entered into on the Restatement Effective Date by the Borrower,
the Funding Agent or Administrative Agent referred to therein and certain other
parties (and to which each relevant Lender becomes a party as provided in
Section 10.17), substantially in the form of Exhibit K.

                  "Material Adverse Effect": a material adverse effect on (a)
the business, property, operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of any material provision of this Agreement or any of the other
Loan Documents or the rights or remedies of the Administrative Agent or the
Lenders hereunder or thereunder.

                  "Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.

                  "Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

                  "Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received), net of
attorneys' fees, accountants' fees, investment banking fees and consultants'
fees (in each case, including costs and disbursements), amounts required to be
applied to the repayment of Indebtedness secured by a Lien expressly permitted
hereunder on any asset that is the subject of such Asset Sale or Recovery Event
(other than any Lien pursuant to any Guarantee and Collateral Agreement) and
other customary fees and expenses actually incurred in connection therewith and
net of taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements) and (b) in connection with any issuance or sale of Equity
Interests or any incurrence of Indebtedness, the cash proceeds received from
such issuance or incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.

                  "New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.

                  "Non-Excluded Taxes": as defined in Section 2.17(a).

                                       18


                  "Non-Recourse Subsidiary": (a) any Subsidiary of the Borrower
designated as a Non-Recourse Subsidiary on Schedule 4.15, (b) any Subsidiary of
the Borrower created or acquired subsequent to the Restatement Effective Date
that is designated as a Non-Recourse Subsidiary by the Borrower or any of its
Subsidiaries substantially concurrently with such creation or acquisition, (c)
any Shell Subsidiary of the Borrower that, at any point following the
Restatement Effective Date, no longer qualifies as a Shell Subsidiary that is
designated as a Non-Recourse Subsidiary by the Borrower or any of its
Subsidiaries substantially concurrently with such failure to qualify as a Shell
Subsidiary and (d) any Subsidiary of any such designated Subsidiary, provided,
that (i) at no time shall any creditor of any such Subsidiary have any claim
(whether pursuant to a Guarantee Obligation or otherwise) against the Borrower
or any of its other Subsidiaries (other than another Non-Recourse Subsidiary) in
respect of any Indebtedness or other obligation (except for obligations arising
by operation of law, including joint and several liability for taxes, ERISA and
similar items) of any such Subsidiary (other than in respect of a non-recourse
pledge of Equity Interests in such Subsidiary); (ii) neither the Borrower nor
any of its Subsidiaries (other than another Non-Recourse Subsidiary) shall
become a general partner of any such Subsidiary; (iii) no default with respect
to any Indebtedness of any such Subsidiary (including any right which the
holders thereof may have to take enforcement action against any such
Subsidiary), shall permit solely as a result of such Indebtedness being in
default or accelerated (upon notice, lapse of time or both) any holder of any
Indebtedness of the Borrower or its other Subsidiaries (other than another
Non-Recourse Subsidiary) to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its final
scheduled maturity; (iv) no such Subsidiary shall own any Equity Interests of,
or own or hold any Lien on any property of, the Borrower or any other Subsidiary
of the Borrower (other than another Non-Recourse Subsidiary); (v) no Investments
may be made in any such Subsidiary by the Borrower or any of its Subsidiaries
(other than by another Non-Recourse Subsidiary) except to the extent permitted
under Section 7.7(g), (h) or (l); (vi) the Borrower shall not directly own any
Equity Interests in such Subsidiary; (vii) at the time of such designation, no
Default or Event of Default shall have occurred and be continuing or would
result therefrom; (viii) such Subsidiary is not a Loan Party; and (ix) such
Subsidiary was not acquired pursuant to Section 7.7(f). It is understood that
Non-Recourse Subsidiaries shall be disregarded for the purposes of any
calculation pursuant to this Agreement relating to financial matters with
respect to the Borrower.

                  "Non-U.S. Lender": as defined in Section 2.17(d).

                  "Notes": the collective reference to any promissory note
evidencing Loans.

                  "Notice of Borrowing": an irrevocable notice of borrowing,
substantially in the form of Exhibit I, to be delivered in connection with each
extension of credit hereunder.

                  "Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.

                  "Participant": as defined in Section 10.6(c)(i).

                  "Paul Allen Group": the collective reference to (a) Paul G.
Allen, (b) his estate, spouse, immediate family members and heirs and (c) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners or other owners of which consist exclusively of Paul G.
Allen or such other Persons referred to in clause (b) above or a combination
thereof.

                  "PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).

                                       19


                  "Permitted Line of Business": as defined in Section 7.14(a).

                  "Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

                  "Plan": at a particular time, any employee benefit plan that
is covered by Title IV of ERISA and in respect of which a Loan Party or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.

                  "Pole Agreement": any pole attachment agreement or underground
conduit use agreement entered into in connection with the operation of any CATV
System.

                  "Pricing Grid": as defined in the definition of "Applicable
Margin".

                  "Prime Rate": the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate in
effect at its principal office in New York City (the Prime Rate not being
intended to be the lowest rate of interest charged by the Administrative Agent
in connection with extensions of credit to debtors).

                  "Properties": as defined in Section 4.17(a).

                  "Qualified Credit Support Limitations": limitations on the
ability of a Subsidiary to become a Guarantor or grant Liens on its assets no
less favorable to the Lenders than those in effect pursuant to the CCH Senior
Note Indenture as in effect on the Restatement Effective Date.

                  "Qualified Indebtedness": (a) with respect to a Qualified
Parent Company, any Indebtedness (i) which is issued in a Rule 144A or other
private placement or registered public offering (including in a Section 3(a)(9)
exchange or any other exchange transaction), (ii) which is not held by any
member of the CCI Group and (iii) to the extent that the Net Cash Proceeds
thereof, if any, are or were used by such Qualified Parent Company to make
Investments in one or more of its Subsidiaries engaged substantially in
businesses of the type described in Section 7.14(a) and/or to refinance other
Qualified Indebtedness or Indebtedness of the Borrower (including by tender or
exchange), and (b) with respect to an Affiliate of the Borrower, any
Indebtedness as to which 100% of the Net Cash Proceeds thereof, if any, are or
were contributed to the Borrower.

                  "Qualified LaGrange Entity": any LaGrange Subsidiary that both
(a) is a party to or otherwise bound by, or formed as a condition to, the
LaGrange Documents and (b) has assets (either directly or through any Subsidiary
or other Equity Interests) as reflected on its balance sheet with an aggregate
value of no more than $25,000,000.

                  "Qualified Parent Company": CCI or any of its direct or
indirect Subsidiaries, in each case provided that the Borrower shall be a direct
or indirect Subsidiary of such Person.

                  "Recovery Event": any settlement of or payment, or series of
related settlements or payments, in respect of any property or casualty
insurance claim or any condemnation proceeding relating to any asset of the
Borrower or any of its Subsidiaries that yields gross cash proceeds to the
Borrower or any of its Subsidiaries in excess of $5,000,000.

                  "Refunded Swingline Loans": as defined in Section 2.5(b).

                                       20


                  "Register": as defined in Section 10.6(b)(iv).

                  "Regulated Subsidiary": any Subsidiary that is prohibited, in
connection with telephony licenses issued to it, from becoming a Loan Party by
reason of the requirement of consent from any Governmental Authority, but only
for so long as such consent has not been obtained; provided, that, until such
Subsidiary becomes a Loan Party and all of the Capital Stock of such Subsidiary
owned by any Loan Party is pledged as Collateral, (a) such Subsidiary owns no
assets other than (i) governmental licenses to operate a telephony business and
leases of infrastructure necessary to operate such licenses and (ii) other
assets (held either directly or through any Subsidiary or other Equity
Interests) with an aggregate value not exceeding $250,000 and (b) the Borrower
shall not directly own any Equity Interests in such Subsidiary.

                  "Regulation U": Regulation U of the Board as in effect from
time to time.

                  "Reimbursement Obligation": the obligation of the Borrower to
reimburse the relevant Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.

                  "Reinvestment Deadline": as defined in the definition of
"Reinvestment Notice".

                  "Reinvestment Deferred Amount": as of any date of
determination, with respect to any Reinvestment Event, the aggregate amount of
Allocated Proceeds received by the Borrower or any of its Subsidiaries in
connection with such Reinvestment Event, that are not applied to prepay the Term
Loans pursuant to Section 2.9(a) as a result of the delivery of a Reinvestment
Notice as such amount may be reduced from time to time by application of such
Allocated Proceeds to acquire assets useful in the Borrower's business.

                  "Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.

                  "Reinvestment Notice": a written notice, in substantially the
form attached as Exhibit F hereto, stating that (a) no Event of Default has
occurred and is continuing, (b) the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of the
Allocated Proceeds of such Asset Sale or Recovery Event to acquire assets useful
in its business, on or prior to the earlier of (i) the date that is eighteen
months from the date of receipt of such Allocated Proceeds and (ii) the Business
Day immediately preceding the date on which such proceeds would be required to
be applied, or to be offered to be applied, to prepay, redeem or defease any
Indebtedness of the Borrower or any of its Affiliates (other than Indebtedness
under this Agreement) if not applied as described above (such earlier date, the
"Reinvestment Deadline"), and (c) such use will not require purchases,
repurchases, redemptions or prepayments (or offers to make purchases,
repurchases, redemptions or prepayments) of any other Indebtedness of the
Borrower or any of its Affiliates.

                  "Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto then
outstanding on the Reinvestment Prepayment Date.

                  "Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earliest of (a) the relevant Reinvestment Deadline (as
defined in the definition of "Reinvestment Notice"), (b) the date on which the
Borrower shall have determined not to, or shall have otherwise ceased to,
acquire assets useful in the Borrower's business with all or any portion of the
relevant Reinvestment Deferred Amount, and (c) the date on which an Event of
Default under Section 8(a) or 8(g) occurs.

                                       21


                  "Release": an authorization of release of specified
Collateral, substantially in the form of Exhibit J.

                  "Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

                  "Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.

                  "Required Lenders": at any time, the holders of more than 50%
of the sum of (a) the aggregate unpaid principal amount of the Term Loans then
outstanding and (b) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.

                  "Required Prepayment Lenders": the Majority Facility Lenders
in respect of each Facility.

                  "Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

                  "Responsible Officer": the chief executive officer, president
or chief financial officer of the Borrower, but in any event, with respect to
financial matters, any of the chief financial officer or any other financial
officer of the Borrower.

                  "Restatement Effective Date": the date on which the conditions
precedent set forth in Section 5.1 hereof shall have been satisfied.

                  "Restatement Tranche A Term Lender": each Lender that makes a
Restatement Tranche A Term Loan.

                  "Restatement Tranche A Term Loan": as defined in Section
2.1(a).

                  "Restatement Tranche B Term Lender": each Lender that makes a
Restatement Tranche B Term Loan.

                  "Restatement Tranche B Term Loan": as defined in Section
2.1(a).

                  "Restricted Payments": as defined in Section 7.6.

                  "Revolving Commitment": as to any Revolving Lender, the
obligation of such Lender to make Revolving Loans and participate in Swingline
Loans and Letters of Credit in an aggregate principal and/or face amount not to
exceed, as applicable, (a) the sum of (i) the amount set forth opposite such
Lender's name under the heading "Existing Revolving Commitment" on Schedule 1.1
(which will include, if applicable, the relevant portion of the revolving
commitments assigned to it under the relevant Master Assignment Agreement), and,
(ii) if applicable, any incremental amount set forth opposite such Lender's name
under the heading "Incremental Revolving Commitment" on Schedule 1.1, or (b) the
amount set forth in any Assignment and Assumption to which such Lender is a
party as an Assignee, in each case as the same may be changed from time to time
pursuant to the terms hereof.

                                       22


                  "Revolving Commitment Period": the period ending on the
Revolving Termination Date.

                  "Revolving Extensions of Credit": as to any Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding and (c) such
Lender's Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.

                  "Revolving Facility": as defined in the definition of
"Facility".

                  "Revolving Lender": each Lender that has a Revolving
Commitment or that holds Revolving Loans or is an Issuing Lender.

                  "Revolving Loans": as defined in Section 2.1(b).

                  "Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then constitutes
of the Total Revolving Commitments (or, at any time after the Revolving
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Loans then outstanding constitutes
of the aggregate principal amount of the Revolving Loans then outstanding).

                  "Revolving Termination Date": April 27, 2010.

                  "SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.

                  "Senior Note Intercreditor Agreement": the Intercreditor
Agreement, dated as of the date hereof, between the Administrative Agent and the
Trustee under the CCO Senior Note Indenture.

                  "Shell Subsidiary": any Subsidiary of the Borrower that is a
"shell" company having (a) assets (either directly or through any Subsidiary or
other Equity Interests) with an aggregate value not exceeding $100,000 and (b)
no operations.

                  "Silo Borrower": each of (a) CC VI Operating Company, LLC, (b)
Falcon Cable Communications, LLC and (c) CC VIII Operating, LLC, and their
successors, so long as such Person is not a Subsidiary Guarantor.

                  "Silo Credit Agreements": collectively, the CCVI Credit
Agreement, the CCVII Credit Agreement and the CCVIII Credit Agreement.

                  "Silo Credit Entity": any Silo Borrower and any other Person
that is a "Grantor" or "Pledgor", as applicable, under a Silo Guarantee and
Collateral Agreement.

                  "Silo Entity": (a) the Silo Holdco, (b) any of the following
entities (so long as it is a direct or indirect Subsidiary of the Silo Holdco),
each a Delaware limited liability company: (i) CC V Holdings, LLC, (ii) CC VI
Holdings, LLC, (iii) Charter Communications VII, LLC and (iv) CC Systems, LLC,
and (c) each of the entities that (whether now existing or hereafter created),
from time to time, are direct or indirect Subsidiaries of any of the foregoing,
and their successors.

                                       23


                  "Silo Guarantee and Collateral Agreements": collectively, the
CCVI Guarantee and Collateral Agreement, the CCVII Guarantee and Collateral
Agreement and the CCVIII Guarantee and Collateral Agreement.

                  "Silo Holdco": CCO NR Holdings, LLC, a direct Wholly Owned
Subsidiary of the Borrower that directly owns each of the Silo Parent Companies.

                  "Silo Parent Company": any Person described in clause (b) of
the definition of "Silo Entity".

                  "Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but that is not a Multiemployer Plan.

                  "Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed or contingent, matured or unmatured, disputed or
undisputed, or secured or unsecured.

                  "Specified Change of Control": a "Change of Control" as
defined in, or any event or condition of the type described in Section 8(k)
contained in, the documentation governing any Indebtedness of Holdings or any
Specified Long-Term Indebtedness having an aggregate outstanding principal
amount in excess of $200,000,000.

                  "Specified Excluded Subsidiary": any Foreign Subsidiary, any
Shell Subsidiary, any Qualified LaGrange Entity, any Excluded Acquired
Subsidiary and any Regulated Subsidiary.

                  "Specified Hedge Agreement": any Hedge Agreement entered into
by the Borrower or any of its Subsidiaries and any Lender or, in the case of any
Hedge Agreement in effect on the Restatement Effective Date, any former Lender
that was a Lender on the Restatement Effective Date, or any of their respective
affiliates, in respect of interest rates or currency exchange rates.

                  "Specified Intracreditor Group": collectively, all Lenders
and, unless otherwise agreed by the Borrower and the Administrative Agent, each
Approved Fund to which any such Lender has assigned a portion of its Commitments
or Loans under any Facility smaller than the minimum assignment specified in
Section 10.6(b)(ii)(A) for Assignees other than Lenders, affiliates of Lenders
and Approved Funds.

                  "Specified Long-Term Indebtedness": any Indebtedness incurred
pursuant to Section 7.2(f).

                                       24


                  "Specified Subordinated Debt": any Indebtedness of the
Borrower issued directly or indirectly to Paul G. Allen or any of his
Affiliates, so long as such Indebtedness (a) qualifies as Specified Long-Term
Indebtedness and (b) has terms and conditions substantially identical to those
set forth in Exhibit H.

                  "Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly, through one
or more intermediaries, or both, by such Person; provided, that Non-Recourse
Subsidiaries shall be deemed not to constitute "Subsidiaries" for the purposes
of this Agreement (other than the definition of "Non-Recourse Subsidiary").
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower.

                  "Subsidiary Guarantor": (i) prior to the Guarantee and Pledge
Date, each Initial Subsidiary Guarantor; (ii) following the Guarantee and Pledge
Date, but prior to the Avalon Guarantee and Pledge Date, each Subsidiary of the
Borrower other than any Avalon Subsidiary and any Specified Excluded Subsidiary;
and (iii) following the Avalon Guarantee and Pledge Date, each Subsidiary of the
Borrower other than any Specified Excluded Subsidiary, in each case to the
extent that such Person has become a "Grantor" under the CCO Guarantee and
Collateral Agreement; provided that, notwithstanding the foregoing, each
Qualified LaGrange Entity shall be treated as a Subsidiary Guarantor for the
purposes of Section 7.

                  "Swingline Commitment": the obligation of the Swingline Lender
to make Swingline Loans pursuant to Section 2.4 in an aggregate principal amount
at any one time outstanding not to exceed $75,000,000.

                  "Swingline Lender": JPMorgan Chase Bank, in its capacity as
the lender of Swingline Loans.

                  "Swingline Loans": as defined in Section 2.4.

                  "Swingline Participation Amount": as defined in Section
2.5(c).

                  "Syndication Agents": as defined in the preamble hereto.

                  "Term Lenders": the collective reference to the Tranche A Term
Lenders and the Tranche B Term Lenders.

                  "Term Loans": the collective reference to the Tranche A Term
Loans and the Tranche B Term Loans.

                  "Threshold Transaction Date": any date on which, both before
and after giving pro forma effect to a particular transaction (including any
Indebtedness incurred in connection therewith), the Consolidated Interest
Coverage Ratio, determined in respect of the most recent period of four
consecutive fiscal quarters for which the relevant financial information is
available, is greater than 1.50 to 1.0.

                  "Total Net Proceeds": in connection with any Asset Sale or any
Recovery Event, the sum, without duplication, of (a) the proceeds thereof in the
form of cash and Cash Equivalents and (b) the

                                       25


amount of any deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise (whether or not
received at the time "Total Net Proceeds" is calculated in connection with such
Asset Sale or Recovery Event), net of attorneys' fees, accountants' fees,
investment banking fees and consultants' fees (in each case, including costs and
disbursements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder on any asset that is the subject
of such Asset Sale or Recovery Event (other than any Lien pursuant to any
Guarantee and Collateral Agreement) and other customary fees and expenses
actually incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements).

                  "Total Revolving Commitments": at any time, the aggregate
amount of the Revolving Commitments then in effect.

                  "Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.

                  "Tranche A Term Facility": as defined in the definition of
"Facility".

                  "Tranche A Term Lender": any Lender that holds a Tranche A
Term Loan.

                  "Tranche A Term Loan": any Existing Tranche A Term Loan or
Restatement Tranche A Term Loan.

                  "Tranche A Term Percentage": as to any Tranche A Term Lender
at any time, the percentage which such Lender's Tranche A Term Loan then
outstanding constitutes of the aggregate principal amount of the Tranche A Term
Loans then outstanding.

                  "Tranche B Term Facility": as defined in the definition of
"Facility".

                  "Tranche B Term Lender": any Lender that holds a Tranche B
Term Loan.

                  "Tranche B Term Loan": any Existing Tranche B Term Loan or
Restatement Tranche B Term Loan.

                  "Tranche B Term Percentage": as to any Tranche B Term Lender
at any time, the percentage which such Lender's Tranche B Term Loan then
outstanding constitutes of the aggregate principal amount of the Tranche B Term
Loans then outstanding.

                  "Transferee": any Assignee or Participant.

                  "Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.

                  "United States": the United States of America.

                  "Wholly Owned Silo Loan Party": any Silo Credit Entity that is
not a Subsidiary Guarantor but is a Wholly Owned Subsidiary.

                  "Wholly Owned Subsidiary": as to any Person, any other Person
all of the Equity Interests of which (other than (i) directors' qualifying
shares required by law, (ii) in the case of Helicon,

                                       26


the Helicon Preferred Stock, or (iii) in the case of CC VIII, LLC, the CCVIII
Interest) are owned by such Person directly or through other Wholly Owned
Subsidiaries or a combination thereof.

                  "Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower; provided that,
notwithstanding the foregoing, each Qualified LaGrange Entity shall be treated
as a Wholly Owned Subsidiary Guarantor for purposes of Section 7.

                  1.2. Other Definitional Provisions; Pro Forma Calculations.
(a) Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the other Loan Documents or any
certificate or other document made or delivered pursuant hereto or thereto.

                  (b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP, (ii) the words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation", (iii) the word "incur" shall be
construed to mean incur, create, issue, assume, become liable in respect of or
suffer to exist (and the words "incurred" and "incurrence" shall have
correlative meanings), (iv) the words "asset" and "property" shall be construed
to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, Equity Interests, securities,
revenues, accounts, leasehold interests, contract rights and any other "assets"
as such term is defined under GAAP and (v) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.

                  (c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.

                  (d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

                  (e) For the purposes of calculating Annualized Operating Cash
Flow, Annualized Pro Forma Operating Cash Flow, Consolidated Operating Cash Flow
and Consolidated Interest Expense for any period (a "Test Period"), (i) if at
any time during the period (a "Pro Forma Period") commencing on the second day
of such Test Period and ending on the last day of such Test Period (or, in the
case of any pro forma calculation made pursuant hereto in respect of a
particular transaction, ending on the date such transaction is consummated and,
unless otherwise expressly provided herein, after giving effect thereto), the
Borrower or any Subsidiary shall have made any Material Disposition, the
Consolidated Operating Cash Flow for such Test Period shall be reduced by an
amount equal to the Consolidated Operating Cash Flow (if positive) attributable
to the property which is the subject of such Material Disposition for such Test
Period or increased by an amount equal to the Consolidated Operating Cash Flow
(if negative) attributable thereto for such Test Period, and Consolidated
Interest Expense for such Test Period shall be reduced by an amount equal to the
Consolidated Interest Expense for such Test Period attributable to any
Indebtedness of the Borrower or any Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Borrower and its Subsidiaries in
connection with such Material Disposition (or, if the Equity Interests of any
Subsidiary are sold, the Consolidated Interest Expense for such Test Period
directly attributable to the Indebtedness of such Subsidiary to the extent the
Borrower and its continuing Subsidiaries are no longer liable for such
Indebtedness after such Disposition); (ii) if, during such Pro Forma Period, the
Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated

                                       27


Operating Cash Flow and Consolidated Interest Expense for such Test Period shall
be calculated after giving pro forma effect thereto (including the incurrence or
assumption of any Indebtedness in connection therewith) as if such Material
Acquisition (and the incurrence or assumption of any such Indebtedness) occurred
on the first day of such Test Period; (iii) if, during such Pro Forma Period,
any Person that subsequently became a Subsidiary or was merged with or into the
Borrower or any Subsidiary during such Pro Forma Period shall have entered into
any disposition or acquisition transaction that would have required an
adjustment pursuant to clause (i) or (ii) above if made by the Borrower or a
Subsidiary during such Pro Forma Period, Consolidated Operating Cash Flow and
Consolidated Interest Expense for such Test Period shall be calculated after
giving pro forma effect thereto as if such transaction occurred on the first day
of such Test Period; and (iv) in the case of determinations in connection with
transactions involving the incurrence of Indebtedness, Consolidated Interest
Expense shall be calculated after giving pro forma effect thereto (and all other
incurrences of Indebtedness during such Pro Forma Period) as if such
Indebtedness was incurred on the first day of such Test Period. For the purposes
of this paragraph, pro forma calculations regarding the amount of income or
earnings relating to any Material Disposition or Material Acquisition and the
amount of Consolidated Interest Expense associated with any discharge or
incurrence of Indebtedness shall in each case be determined in good faith by a
Responsible Officer of the Borrower. If any Indebtedness bears a floating rate
of interest and the incurrence or assumption thereof is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the last day of the relevant Pro Forma Period had been the
applicable rate for the entire relevant Test Period (taking into account any
interest rate protection agreement to the extent allocable to the interest
expense on such Indebtedness; provided that, in the case of Material
Acquisitions, such interest rate protection agreement has a remaining term in
excess of 12 months). As used in this Section 1.2(e), "Material Acquisition"
means any acquisition of property or series of related acquisitions of property
that (i) constitutes assets comprising all or substantially all of an operating
unit of a business or constitutes all or substantially all of the Equity
Interests of a Person and (ii) involves the payment of Consideration by the
Borrower and its Subsidiaries in excess of $1,000,000; and "Material
Disposition" means any Disposition of property or series of related Dispositions
of property that yields gross proceeds to the Borrower or any of its
Subsidiaries in excess of $1,000,000.

                   SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

                  2.1. Commitments. (a) Subject to the terms and conditions
hereof, (i) each Existing Tranche A Term Lender severally agrees to maintain
hereunder an "Existing Tranche A Term Loan" to the extent specified on Schedule
1.1 (including, if applicable, the relevant portion of the loans assigned to it
pursuant to the relevant Master Assignment Agreement), (ii) each Restatement
Tranche A Term Lender severally agrees to make a "Restatement Tranche A Term
Loan" on the Restatement Effective Date, as specified on Schedule 1.1, (iii)
each Existing Tranche B Term Lender severally agrees to maintain hereunder an
"Existing Tranche B Term Loan" to the extent specified on Schedule 1.1
(including, if applicable, the relevant portion of the loans assigned to it
pursuant to the relevant Master Assignment Agreement), (iv) each Restatement
Tranche B Term Lender severally agrees to make a "Restatement Tranche B Term
Loan" on the Restatement Effective Date, as specified on Schedule 1.1 and (iv)
the Borrower hereby offers to each Exchanging Tranche B Term Lender to exchange
its "Tranche B Term Loan" (as defined in the Existing Credit Agreement, the
Existing CCVI Credit Agreement or the Existing CCVIII Credit Agreement) or its
"Term Loan B" (as defined in the Existing CVII Credit Agreement) set forth in
said Schedule for such Exchanging Tranche B Term Lender for an Existing Tranche
B Term Loan in a like principal amount and each such Tranche B Term Lender
agrees on the terms and conditions set forth in this Agreement to exchange such
Tranche B Term Loan or Term Loan B, as applicable, for an Existing Tranche B
Term Loan in a like principal amount. The Term Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.10.

                                       28


                  (b) Subject to the terms and conditions hereof, each Revolving
Lender severally agrees to make revolving credit loans ("Revolving Loans") to
the Borrower from time to time during the Revolving Commitment Period in an
aggregate principal amount at any one time outstanding which, when added to such
Lender's Revolving Percentage of the sum of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the Swingline Loans then
outstanding, does not exceed the amount of such Lender's Revolving Commitment.
During the Revolving Commitment Period, the Borrower may use the Revolving
Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.10.

                  2.2. Procedure for Borrowing. In order to effect a borrowing
hereunder, the Borrower shall give the Administrative Agent a Notice of
Borrowing (which notice must be received by the Administrative Agent prior to
1:00 P.M., New York City time, (a) three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior
to the requested Borrowing Date, in the case of ABR Loans) (provided that any
such Notice of Borrowing of ABR Loans under the Revolving Facility to finance
payments required by Section 3.5 may be given not later than 1:00 P.M. New York
City time, on the date of the proposed borrowing), specifying (i) the Facility
under which such Loan is to be borrowed, (ii) the amount and Type of Loans to be
borrowed, (iii) the requested Borrowing Date and (iv) in the case of Eurodollar
Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Period therefor. Each borrowing shall be in an
aggregate amount equal to (x) in the case of ABR Loans, $5,000,000 or a whole
multiple of $1,000,000 in excess thereof (or, if the then aggregate relevant
Available Revolving Commitments are less than $5,000,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $10,000,000 or a whole multiple of
$1,000,000 in excess thereof; provided, that the Swingline Lender may request,
on behalf of the Borrower, borrowings under the Revolving Commitments that are
ABR Loans in other amounts pursuant to Section 2.5. Upon receipt of any Notice
of Borrowing from the Borrower, the Administrative Agent shall promptly notify
each relevant Lender thereof. Each relevant Lender will make the amount of its
pro rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the Funding Office prior to 12:00 Noon, New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent; provided that, in the event that any
Lender fails to make available to the Administrative Agent any portion of such
amount prior to 12:30 P.M. New York City time on the relevant Borrowing Date,
the Borrower shall be deemed to have provided notice to the Swingline Lender in
accordance with Section 2.5 requesting a Swingline Loan in an amount equal to
the aggregate amount of any such shortfall, rounded up to the applicable whole
multiple of $500,000 (but in no event exceeding, together with all outstanding
Swingline Loans, the Swingline Commitment). Such borrowing (including any such
Swingline Loan) will then be made available not later than 1:00 P.M., New York
City time, to the Borrower by the Administrative Agent crediting the account of
the Borrower on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the relevant Lenders and in like funds
as received by the Administrative Agent.

                  2.3. Repayment of Loans. (a) The Tranche A Term Loans of each
Tranche A Term Lender shall mature in 12 installments, each of which shall be in
an amount equal to such Lender's Tranche A Term Percentage multiplied by the
percentage of the aggregate principal amount as of the Restatement Effective
Date of the Tranche A Term Loans set forth below opposite such installment:



Installment                             Percentage
- -----------                             ----------
                                     
September 30, 2007                        6.25%
December 31, 2007                         6.25%


                                       29


                                       
March 31, 2008                            6.25%
June 30, 2008                             6.25%
September 30, 2008                        8.75%
December 31, 2008                         8.75%
March 31, 2009                            8.75%
June 30, 2009                             8.75%
September 30, 2009                          10%
December 31, 2009                           10%
March 31, 2010                              10%
April 27, 2010                              10%



                  (b) The Tranche B Term Loans of each Tranche B Term Lender
shall mature in 28 installments (each due on the last day of each calendar
quarter, except for the last such installment), commencing on September 30,
2004, each of which shall be in an amount equal to such Lender's Tranche B Term
Percentage multiplied by (i) in the case of the first 27 such installments,
$7,500,000 and (ii) in the case of the last such installment (which shall be due
on April 7, 2011), $2,797,500,000.

                  (c) The Borrower shall repay all outstanding Revolving Loans
on the Revolving Termination Date.

                  2.4. Swingline Commitment. Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swingline loans ("Swingline
Loans") to the Borrower; provided that (a) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans hereunder, may exceed the Swingline Commitment then in effect)
and (b) the Borrower shall not request, and the Swingline Lender shall not make,
any Swingline Loan if, after giving effect to the making of such Swingline Loan,
the aggregate amount of the Available Revolving Commitments would be less than
zero. During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swingline Loans shall be ABR Loans only.

                  2.5. Procedure for Swingline Borrowing; Refunding of Swingline
Loans. (a) Whenever the Borrower desires that the Swingline Lender make
Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swingline Lender not later than 1:00 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date (which shall be a Business Day during the Revolving Commitment
Period). Each borrowing under the Swingline Commitment shall be in an amount
equal to $1,000,000 or a whole multiple of $500,000 in excess thereof. Not later
than 3:00 P.M., New York City time, on the Borrowing Date specified in a notice
in respect of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender. The Administrative Agent shall make the proceeds of such Swingline Loan
available to the Borrower on such Borrowing Date by depositing such proceeds in
the account of the Borrower with the Administrative Agent on such Borrowing Date
in immediately available funds.

                  (b) The Swingline Lender, at any time and from time to time in
its sole and absolute discretion and in consultation with the Borrower (provided
that the failure to so consult shall not affect the ability of the Swingline
Lender to make the following request) may, on behalf of the Borrower (which
hereby irrevocably directs the Swingline Lender to act on its behalf), on one
Business Day's notice given

                                       30


by the Swingline Lender no later than 1:00 P.M., New York City time, request
each Revolving Lender to make, and each Revolving Lender hereby agrees to make,
a Revolving Loan, in an amount equal to such Revolving Lender's Restatement
Percentage of the aggregate amount of the Swingline Loans (the "Refunded
Swingline Loans") outstanding on the date of such notice, to repay the Swingline
Lender. Each Revolving Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 12:00 Noon, New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Loans shall be
immediately made available by the Administrative Agent to the Swingline Lender
for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower's accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Revolving
Lenders are not sufficient to repay in full such Refunded Swingline Loans.

                  (c) If prior to the time a Revolving Loan would have otherwise
been made pursuant to Section 2.5(b), one of the events described in Section
8(g) shall have occurred and be continuing with respect to the Borrower or if
for any other reason, as determined by the Swingline Lender in its sole
discretion, Revolving Loans may not be made as contemplated by Section 2.5(b),
each Revolving Lender shall, on the date such Revolving Loan was to have been
made pursuant to the notice referred to in Section 2.5(b), purchase for cash an
undivided participating interest in the then outstanding Swingline Loans by
paying to the Swingline Lender an amount (the "Swingline Participation Amount")
equal to (i) such Revolving Lender's Revolving Percentage times (ii) the sum of
the aggregate principal amount of Swingline Loans then outstanding that were to
have been repaid with such Revolving Loans.

                  (d) Whenever, at any time after the Swingline Lender has
received from any Revolving Lender such Lender's Swingline Participation Amount,
the Swingline Lender receives any payment on account of the Swingline Loans, the
Swingline Lender will distribute to such Lender its Swingline Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was outstanding
and funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.

                  (e) Each Revolving Lender's obligation to make the Loans
referred to in Section 2.5(b) and to purchase participating interests pursuant
to Section 2.5(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including (i) any setoff, counterclaim, recoupment, defense
or other right that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower; (iv)
any breach of this Agreement or any other Loan Document by the Borrower, any
other Loan Party or any other Revolving Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

                  2.6. Commitment Fees, Etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Lender a
nonrefundable commitment fee through the last day of the Revolving Commitment
Period, computed at (i) 0.50% per annum on the average daily amount of the
relevant Available Revolving Commitment of such Lender, if such average daily
amount is less than 50% of such Lender's Revolving Commitment during the period
for which payment is made and (ii) for all

                                       31


other periods 0.75% per annum on such average daily amount of the relevant
Available Revolving Commitment of such Lender during the period for which
payment is made, in each case payable quarterly in arrears on the last day of
each March, June, September and December and on the Revolving Termination Date.
During any period from an Adjustment Date with respect to which the Consolidated
Leverage Ratio is determined to be less than 2.50 to 1.0 until any succeeding
Adjustment Date with respect to which the Consolidated Leverage Ratio is
determined to be greater than or equal to 2.50 to 1.0, the percentage referred
to in clause (ii) above shall be reduced to 0.50%.

                  (b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Administrative Agent.

                  2.7. Termination or Reduction of Revolving Commitments. The
Borrower shall have the right, upon notice delivered to the Administrative Agent
no later than 1:00 P.M., New York City time, at least three Business Days prior
to the proposed date of termination or reduction, to terminate the Revolving
Commitments or, from time to time, to reduce the amount of the Revolving
Commitments; provided that no such termination or reduction of Revolving
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Loans and Swingline Loans made on the effective
date thereof, the relevant Total Revolving Extensions of Credit would exceed the
relevant Total Revolving Commitments. Any reduction of the Revolving Commitments
shall be allocated to such Revolving Facility as shall be directed by the
Borrower. Any such reduction shall be in an amount equal to $10,000,000, or a
whole multiple of $1,000,000 in excess thereof, shall reduce permanently the
relevant Revolving Commitments then in effect and shall be applied pro rata to
the scheduled reductions thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable, provided that a notice of termination of
the Revolving Commitments delivered by the Borrower may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied.

                  2.8. Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent no later
than 1:00 P.M., New York City time, at least three Business Days prior thereto
in the case of Eurodollar Loans and no later than 1:00 P.M., New York City time,
at least one Business Day prior thereto in the case of ABR Loans, which notice
shall specify the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on
any day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.18. Upon receipt
of any such notice, the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with (except in
the case of Revolving Loans that are ABR Loans and Swingline Loans) accrued
interest to such date on the amount prepaid. Optional prepayments of the Tranche
B Term Loans made prior to the first anniversary of the Restatement Effective
Date shall be accompanied by a prepayment fee, for the account of the Tranche B
Term Lenders, equal to 1.0% of the amount so prepaid. Partial prepayments of
Term Loans and Revolving Loans shall be in an aggregate principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Partial
prepayments of Swingline Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof.

                  2.9. Mandatory Prepayments. (a) Unless the Required Prepayment
Lenders shall otherwise agree, if on any date the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery
Event then, with respect to an amount equal to 75% of such Net Cash Proceeds
("Allocated Proceeds"; provided that the Borrower or such Subsidiary may instead
deem a portion of such Net Cash Proceeds equal to the first 75% of the Total Net
Proceeds to the Borrower or

                                       32


such Subsidiary from such Asset Sale or Recovery Event, when and as received, to
be the Allocated Proceeds of such Asset Sale or Recovery Event), (i) unless a
Reinvestment Notice executed by a Responsible Officer shall be delivered in
respect thereof to the Administrative Agent within five Business Days after any
date that such Allocated Proceeds are received, such Allocated Proceeds shall be
applied on the fifth Business Day after the receipt of such Allocated Proceeds
toward the prepayment of the Term Loans and (ii) on each Reinvestment Prepayment
Date, an amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the Term
Loans.

                  (b) If on any date the Borrower shall receive Net Cash
Proceeds from any incurrence of Indebtedness pursuant to Section 7.2(f) (other
than Specified Subordinated Debt) then an amount equal to 50% of the Net Cash
Proceeds thereof shall be applied promptly, but in any event no later than the
third Business Day following such incurrence, toward the prepayment of the Term
Loans. This paragraph (b) shall not apply if the Consolidated First Lien
Leverage Ratio, determined as at the end of the most recent period prior to the
date of receipt of such Net Cash Proceeds for which the relevant financial
information is available, is less than or equal to 2.0 to 1.0.

                  (c) The application of any prepayment pursuant to this Section
2.9 shall be made first, to ABR Loans and, second, to Eurodollar Loans. Each
prepayment of the Loans under this Section 2.9 shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.

                  2.10. Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent irrevocable notice of such election no later than 1:00
P.M. New York City time, on the third Business Day prior to the proposed
conversion date (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.

                  (b) Any Eurodollar Loan may be continued as such by the
Borrower giving irrevocable notice to the Administrative Agent at least three
Business Days prior to the expiration of the then current Interest Period, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loans, provided that (i) no Eurodollar Loan may be continued as such
when any Event of Default has occurred and is continuing and (ii) if the
Borrower shall fail to give any required notice as described above in this
paragraph, the relevant Eurodollar Loans shall be automatically converted to
Eurodollar Loans having a one-month Interest Period on the last day of the then
expiring Interest Period. Upon receipt of any such notice, the Administrative
Agent shall promptly notify each relevant Lender thereof.

                  2.11. Limitations on Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal
to $10,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no
more than fifteen Eurodollar Tranches shall be outstanding at any one time.

                                       33


                  2.12. Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.

                  (b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.

                  (c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a rate
per annum equal to (x) in the case of the Loans, the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this Section plus
2% or (y) in the case of Reimbursement Obligations, the rate applicable to ABR
Loans under the Revolving Facility plus 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans
under the relevant Facility plus 2% (or, in the case of any such other amounts
that do not relate to a particular Facility, the rate then applicable to ABR
Loans under the Revolving Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (as well after as before judgment).

                  (d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.

                  2.13. Computation of Interest and Fees. (a) Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.

                  (b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.12(a).

                  2.14. Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:

                  (a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or

                  (b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for

                                       34


such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.

                  2.15. Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Revolving Lenders hereunder, each payment by the Borrower
on account of any commitment fee and any reduction of the Revolving Commitments
shall be made pro rata according to the Revolving Commitments of the Revolving
Lenders.

                  (b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders. The amount of each principal prepayment of the Term
Loans shall be applied to reduce the then remaining installments of the Tranche
A Term Loans and Tranche B Term Loans, as the case may be, pro rata based upon
the then remaining principal amount thereof. Notwithstanding the foregoing, the
Borrower shall have the option to allocate any optional prepayment pursuant to
Section 2.8 (up to the aggregate remaining amount of scheduled installments on
the Tranche A Term Loans due within 12 months after the date of such prepayment)
exclusively to the Tranche A Term Loans, and any prepayment so allocated shall
be applied to such installments as directed by the Borrower. Amounts prepaid on
account of the Term Loans may not be reborrowed.

                  (c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Loans shall be made pro
rata according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.

                  (d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 1:00 P.M., New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.

                  (e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in

                                       35


reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this paragraph shall be conclusive in the absence of
manifest error. If such Lender's share of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans under
the relevant Facility, on demand, from the Borrower. Nothing in this paragraph
shall be deemed to limit the rights of the Administrative Agent or the Borrower
against any Lender.

                  (f) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.

                  2.16. Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the Restatement Effective Date:

                  (i)      shall subject any Lender to any tax of any kind
         whatsoever with respect to this Agreement, any Letter of Credit, any
         Application or any Eurodollar Loan made by it, or change the basis of
         taxation of payments to such Lender in respect thereof (except for
         Non-Excluded Taxes covered by Section 2.17 and changes in the rate of
         tax on the overall net income of such Lender);

                  (ii)     shall impose, modify or hold applicable any reserve,
         special deposit, compulsory loan or similar requirement against assets
         held by, deposits or other liabilities in or for the account of,
         advances, loans or other extensions of credit by, or any other
         acquisition of funds by, any office of such Lender that is not
         otherwise included in the determination of the Eurodollar Rate
         hereunder; or

                  (iii)    shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this paragraph, it

                                       36


shall promptly notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.

                  (b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the Restatement Effective Date shall have the
effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder or under or in respect of
any Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
for such reduction; provided that the Borrower shall not be required to
compensate a Lender pursuant to this paragraph for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrower of such
Lender's intention to claim compensation therefor; and provided further that, if
the circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect.

                  (c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

                  2.17. Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
the Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.

                  (b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

                                       37


                  (c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.

                  (d) Each Lender (or Transferee) that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from U.S. federal withholding tax on all payments by the
Borrower under this Agreement and the other Loan Documents. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify the Borrower at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Borrower (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). The inability of a Non-U.S. Lender (or a
Transferee) to deliver any form pursuant to this Section 2.17(d) as a result of
a change in law after the date such Lender (or a Transferee) becomes a Lender
(or a Transferee) hereunder or as a result of a change in circumstances of the
Borrower or the use of proceeds of such Lender's (or Transferee's) Loans shall
not constitute a failure to comply with this Section 2.17(d) and accordingly the
indemnities to which such Person is entitled pursuant to this Section 2.17 shall
not be affected as a result of such inability. If a Lender (or Transferee) as to
which the preceding sentence does not apply is unable to deliver any form
pursuant to this Section 2.17(d), the sole consequence of such failure to
deliver as a result of such inability shall be that the indemnity described in
Section 2.17(a) hereof for any Non-Excluded Taxes shall not be available to such
Lender or Transferee with respect to the period that would otherwise be covered
by such form.

                  (e) A Lender that is entitled to an exemption from non-U.S.
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding, provided that such Lender is legally entitled to
complete, execute and deliver such documentation and in such Lender's judgment
such completion, execution or submission would not materially prejudice the
legal position of such Lender.

                  (f) Any Lender (or Transferee) claiming any indemnity payment
or additional amounts payable pursuant to Section 2.17(a) shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested in writing by the Borrower if the
making of such a filing would avoid the need for or reduce the amount of any
such indemnity payment or additional amounts that may thereafter accrue.

                                       38


                  (g) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

                  2.18. Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

                  2.19. Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.16 or
2.17(a) with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.16 or 2.17(a).

                  2.20. Replacement of Lenders. The Borrower shall be permitted
to replace any Lender that (a) requests reimbursement for amounts owing pursuant
to Section 2.16 or 2.17(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.19 which has eliminated the continued need for payment of
amounts owing pursuant to Section 2.16 or 2.17(a), (iv) the replacement
financial institution shall purchase, at par, all Loans and other amounts owing
to such replaced Lender on or prior to the date of replacement, (v) the Borrower
shall be liable to such replaced Lender under Section 2.18 if any Eurodollar
Loan owing to such replaced Lender shall be purchased other than on the last day
of the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6 (provided that the
Borrower shall be obligated to pay the registration and processing fee referred
to therein), (viii) until such time as such replacement shall be consummated,
the Borrower shall pay all additional amounts (if any) required pursuant to
Section 2.16 or 2.17(a), as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights that the Borrower, the Agents or any
other Lender shall have against the replaced Lender.

                                       39


                          SECTION 3. LETTERS OF CREDIT

                  3.1. L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other
Revolving Lenders set forth in Section 3.4(a), agrees to issue letters of credit
("Letters of Credit") for the account of the Borrower on any Business Day during
the Revolving Commitment Period in such form as may be approved from time to
time by such Issuing Lender; provided that no Issuing Lender shall issue any
Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the
Available Revolving Commitments would be less than zero. Each Letter of Credit
shall (i) be denominated in Dollars, (ii) unless otherwise agreed by the
Administrative Agent and the relevant Issuing Lender, have a face amount of at
least $5,000 and (iii) expire no later than the earlier of (x) the first
anniversary of its date of issuance and (y) the date that is five Business Days
prior to the Revolving Termination Date, provided that any Letter of Credit with
a one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above). It is understood that the letters of credit listed on Schedule 3.1
shall constitute "Letters of Credit" for the purposes of this Agreement and
shall be deemed to have been issued under this Agreement.

                  (b) No Issuing Lender shall be obligated to issue any Letter
of Credit hereunder if such issuance would conflict with, or cause such Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.

                  3.2. Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that any Issuing Lender issue a Letter of Credit
by delivering to such Issuing Lender an Application therefor, completed to the
satisfaction of such Issuing Lender, and such other certificates, documents and
other papers and information as such Issuing Lender may request. Upon receipt of
any Application, the relevant Issuing Lender will process such Application and
the certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall
such Issuing Lender be required to issue any Letter of Credit earlier than three
(3) Business Days after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating thereto)
by issuing the original of such Letter of Credit to the beneficiary thereof or
as otherwise may be agreed to by such Issuing Lender and the Borrower. The
relevant Issuing Lender shall furnish a copy of such Letter of Credit to the
Borrower promptly following the issuance thereof. The relevant Issuing Lender
shall promptly furnish to the Administrative Agent, which shall in turn promptly
furnish to the Lenders, notice of the issuance of each Letter of Credit
(including the amount thereof).

                  3.3. Fees and Other Charges. (a) The Borrower will pay a fee
on all outstanding Letters of Credit at a per annum rate equal to the Applicable
Margin then in effect with respect to Eurodollar Loans under the Revolving
Facility, shared ratably among the Revolving Lenders and payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date. In addition, the
Borrower shall pay to the relevant Issuing Lender for its own account a fronting
fee at a per annum rate of 0.25% or a lower rate separately agreed between the
Borrower and such Issuing Lender on the undrawn and unexpired amount of each
Letter of Credit issued by such Issuing Lender, payable quarterly in arrears on
each L/C Fee Payment Date after the relevant issuance date.

                  (b) In addition to the foregoing fees, unless otherwise agreed
by the relevant Issuing Lender, the Borrower shall pay or reimburse each Issuing
Lender for such normal and customary costs and expenses as are incurred or
charged by such Issuing Lender in issuing, negotiating, effecting payment under,
amending or otherwise administering any Letter of Credit issued by it.

                                       40


                  3.4. L/C Participations. (a) Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lenders to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
each Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Percentage in each Issuing Lender's obligations and
rights under each Letter of Credit issued by it hereunder and the amount of each
draft paid by such Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with each Issuing Lender that, if a draft
is paid under any Letter of Credit issued by such Issuing Lender for which such
Issuing Lender is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such L/C Participant shall pay to such Issuing Lender
upon demand an amount equal to such L/C Participant's Revolving Percentage of
the amount of such draft, or any part thereof, that is not so reimbursed. Each
L/C Participant's obligation to make such payment to such Issuing Lender as
contemplated by this Section 3.4(a), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against such Issuing Lender, the Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default or Event of Default,
or (C) any other occurrence, event or condition, whether or not similar to any
of the foregoing. No such payment by any L/C Participant shall relieve or
otherwise impair the obligation of the Borrower to reimburse such Issuing Lender
for the amount of any payment made by such Issuing Lender under any Letter of
Credit, together with interest as provided herein.

                  (b) If any amount required to be paid by any L/C Participant
to any Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit is
paid to such Issuing Lender within three (3) Business Days after the date such
payment is due, such L/C Participant shall pay to such Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to such Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the relevant Issuing Lender by such L/C
Participant within three (3) Business Days after the date such payment is due,
such Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans under the Revolving Facility. A
certificate of the relevant Issuing Lender submitted to any L/C Participant with
respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.

                  (c) Whenever, at any time after the relevant Issuing Lender
has made payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with Section
3.4(a), such Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by such Issuing Lender), or any payment of interest
on account thereof, such Issuing Lender will distribute to each L/C Participant
its pro rata share thereof; provided, however, that in the event that any such
payment received by such Issuing Lender shall be required to be returned by such
Issuing Lender, such L/C Participant shall return to such Issuing Lender the
portion thereof previously distributed by such Issuing Lender to it.

                  3.5. Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the relevant Issuing Lender on each date on which such
Issuing Lender notifies the Borrower of the date and amount of a draft presented
under any Letter of Credit and paid by such Issuing Lender for the amount of (a)
such draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment. Each such
payment shall be made to the relevant Issuing

                                       41


Lender in lawful money of the United States and in immediately available funds.
Interest shall be payable on any and all amounts remaining unpaid by the
Borrower under this Section from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full at the
rate set forth in (i) until the second Business Day following the date of the
applicable drawing, Section 2.12(b) and (ii) thereafter, Section 2.12(c).

                  3.6. Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with each Issuing Lender and L/C Participant that no Issuing Lender or L/C
Participant shall be responsible for, and the Borrower's Reimbursement
Obligations under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions found by a final non-appealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the relevant Issuing Lender. The Borrower agrees that any
action taken or omitted by any Issuing Lender under or in connection with any
Letter of Credit or the related drafts or documents, if done in the absence of
gross negligence or willful misconduct and in accordance with the standards of
care specified in the New York UCC, shall be binding on the Borrower and shall
not result in any liability of any Issuing Lender to the Borrower.

                  3.7. Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the relevant Issuing Lender
shall promptly notify the Borrower of the date and amount thereof. The
responsibility of each Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.

                  3.8. Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.

                   SECTION 4. REPRESENTATIONS AND WARRANTIES

                  To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, Holdings and the Borrower hereby jointly and severally
represent and warrant to the Administrative Agent and each Lender that:

                  4.1. Financial Condition. The audited consolidated balance
sheet of the Borrower as at December 31, 2003, and the related audited
consolidated statements of operations and cash flows for the fiscal year ended
on such date, have been prepared based on the best information available to the
Borrower as of the date of delivery thereof, and present fairly the consolidated
financial condition of the Borrower as at such date, and the consolidated
results of its operations and its consolidated cash flows for the period then
ended. All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved

                                       42


(except as approved by KPMG and disclosed therein or as otherwise disclosed
therein). The Borrower and its Subsidiaries do not have any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in such financial statements.

                  4.2. No Change. Since December 31, 2003 there has been no
event, development or circumstance that has had or could reasonably be expected
to have a Material Adverse Effect.

                  4.3. Existence; Compliance with Law. Each of Holdings, the
Borrower and its Subsidiaries (a) except in the case of any Shell Subsidiary and
any former Shell Subsidiary until it becomes a Loan Party pursuant to Section
6.9, is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (b) has the power and authority, and the
legal right, to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged, (c) is
duly qualified as a foreign entity and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification and (d) is in compliance with all
Requirements of Law, in each case with respect to clauses (b), (c) and (d),
except as could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

                  4.4. Power; Authorization; Enforceable Obligations. Each Loan
Party has the power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrower, to borrow hereunder. Each Loan Party has taken all necessary action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party and, in the case of the Borrower, to authorize the borrowings on
the terms and conditions of this Agreement. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, other than those
that have been obtained or made and are in full force and effect. Each Loan
Document has been duly executed and delivered on behalf of each Loan Party party
thereto. This Agreement constitutes, and each other Loan Document upon execution
will constitute, a valid and legally binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

                  4.5. No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof, and the
consummation of each of the transactions referred to in Section 5.1 (including
the execution, delivery and performance of each of the agreements referred to
therein), will not violate any Requirement of Law or any material Contractual
Obligation of any Designated Holding Company, the Borrower or any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Guarantee and Collateral Agreements or permitted by Section
7.3(g) or (o)).

                  4.6. Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Holdings or the Borrower, threatened by or against Holdings, the
Borrower or any of its Subsidiaries, or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.

                                       43


                  4.7. No Default. None of Holdings, the Borrower or any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.

                  4.8. Ownership of Property; Liens. Each of Holdings, the
Borrower and its Subsidiaries has marketable title to, or a valid leasehold
interest in, all its material real property, and good title to, or a valid
leasehold interest in, all its other material property, and none of such
property is subject to any Lien except Liens not prohibited by Section 7.3.

                  4.9. Intellectual Property. Each of Holdings, the Borrower and
each of its Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted, except as
could not reasonably be expected to have a Material Adverse Effect. No claim has
been asserted and is pending by any Person challenging or questioning the use,
validity or effectiveness of any Intellectual Property owned or licensed by
Holdings, the Borrower or any of its Subsidiaries that could reasonably be
expected to result in a breach of the representation and warranty set forth in
the first sentence of this Section 4.9, nor does the Borrower know of any valid
basis for any such claim. The use of all Intellectual Property necessary for the
conduct of the business of the Borrower and its Subsidiaries, taken as a whole,
does not infringe on the rights of any Person in such a manner that could
reasonably be expected to result in a breach of the representation and warranty
set forth in the first sentence of this Section 4.9.

                  4.10. Taxes. Each of Holdings, the Borrower and each of its
Subsidiaries (other than Shell Subsidiaries) has filed or caused to be filed all
federal, state and other material tax returns that are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than those with respect to which the amount or validity thereof are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of Holdings, the Borrower or its Subsidiaries, as the case may be); no tax
Lien has been filed, and, to the knowledge of Holdings and the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.

                  4.11. Federal Regulations. No part of the proceeds of any
Loans will be used (a) for "buying" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.

                  4.12. Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against Holdings, the Borrower or any of its
Subsidiaries pending or, to the knowledge of Holdings or the Borrower,
threatened; (b) hours worked by, and payment made to, employees of Holdings, the
Borrower and its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from Holdings, the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of Holdings, the Borrower or the relevant
Subsidiary.

                  4.13. ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-

                                       44


year period prior to the date on which this representation is made or deemed
made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code. No termination of
a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has arisen, during such five-year period. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits by more than $1,000,000.
Neither any Loan Party nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan that has resulted or could
reasonably be expected to result in a material liability under ERISA, and
neither any Loan Party nor, to any Loan Party's knowledge, any Commonly
Controlled Entity would become subject to any material liability under ERISA if
any Loan Party or any Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No Multiemployer Plan
of any Loan Party or any Commonly Controlled Entity is in Reorganization or
Insolvent.

                  4.14. Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.

                  4.15. Subsidiaries. As of the Restatement Effective Date and,
following the Restatement Effective Date, as of the date of the most recently
delivered Compliance Certificate pursuant to Section 6.2(b), (a) Schedule 4.15
(as modified by such Compliance Certificate) sets forth the name and
jurisdiction of organization of each Designated Holding Company, the Borrower
and each of the Borrower's Subsidiaries (except any Shell Subsidiary) and, as to
each such Person, the percentage of each class of Equity Interests owned by
Holdings, the Borrower and each of the Borrower's Subsidiaries, and (b) except
as set forth on Schedule 4.15 (as modified by such Compliance Certificate),
there are no outstanding subscriptions, options, warrants, calls, rights or
other agreements or commitments of any nature relating to any Equity Interests
of the Borrower or any of its Subsidiaries (except any Shell Subsidiary), except
as created by the Loan Documents.

                  4.16. Use of Proceeds. The proceeds of the Loans, and the
Letters of Credit, shall be used for general purposes, including to finance
permitted Investments.

                  4.17. Environmental Matters. Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:

                  (a) the facilities and properties owned, leased or operated by
Holdings, the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability under, any
Environmental Law;

                  (b) neither Holdings, the Borrower nor any of its Subsidiaries
has received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the business operated by Holdings, the Borrower or any of its Subsidiaries (the
"Business"), nor does Holdings or the Borrower have knowledge or reason to
believe that any such notice will be received or is being threatened;

                                       45


                  (c) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location that could give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental
Law;

                  (d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of Holdings and the Borrower, threatened,
under any Environmental Law to which Holdings, the Borrower or any Subsidiary is
or will be named as a party with respect to the Properties or the Business, nor
are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or the
Business;

                  (e) there has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of Holdings, the Borrower or any Subsidiary in
connection with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could give rise to liability
under Environmental Laws;

                  (f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the Business; and

                  (g) neither Holdings, the Borrower nor any of its respective
Subsidiaries has assumed any liability of any other Person under Environmental
Laws.

                  4.18. Certain Cable Television Matters. Except as, in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect:

                  (a) (i) Holdings, the Borrower and its Subsidiaries possess
all Authorizations necessary to own, operate and construct the CATV Systems or
otherwise for the operations of their businesses and are not in violation
thereof and (ii) all such Authorizations are in full force and effect and no
event has occurred that permits, or after notice or lapse of time could permit,
the revocation, termination or material and adverse modification of any such
Authorization;

                  (b) neither Holdings, the Borrower nor any of its Subsidiaries
is in violation of any duty or obligation required by the Communications Act of
1934, as amended, or any FCC rule or regulation applicable to the operation of
any portion of any of the CATV Systems;

                  (c) (i) there is not pending or, to the best knowledge of
Holdings or the Borrower, threatened, any action by the FCC to revoke, cancel,
suspend or refuse to renew any FCC License held by Holdings, the Borrower or any
of its Subsidiaries and (ii) there is not pending or, to the best knowledge of
the Borrower, threatened, any action by the FCC to modify adversely, revoke,
cancel, suspend or refuse to renew any other Authorization; and

                  (d) there is not issued or outstanding or, to the best
knowledge of Holdings and the Borrower, threatened, any notice of any hearing,
violation or complaint against Holdings, the Borrower or any of its Subsidiaries
with respect to the operation of any portion of the CATV Systems and neither
Holdings nor the Borrower has any knowledge that any Person intends to contest
renewal of any Authorization.

                                       46


                  4.19. Accuracy of Information, Etc. No statement or
information contained in this Agreement, any other Loan Document, the
Confidential Information Memorandum or any other document, certificate or
statement furnished by or on behalf of any Loan Party to the Agents or the
Lenders, or any of them, for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, as supplemented from
time to time prior to the date this representation and warranty is made or
deemed made, contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained herein or therein not
misleading. The projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact known
to any Loan Party that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Agents and the Lenders for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.

                  4.20. Security Interests. (a) The CCO Guarantee and Collateral
Agreement is effective to create or continue, as applicable, in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof. In the case of certificated Pledged Stock (constituting securities
within the meaning of Section 8-102(a)(15) of the New York UCC) described in the
CCO Guarantee and Collateral Agreement, when certificates representing such
Pledged Stock are delivered to the Administrative Agent, and in the case of the
other Collateral described in the CCO Guarantee and Collateral Agreement, when
financing statements in appropriate form are filed in the offices specified on
Schedule 4.20(a), the CCO Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the parties thereto in such Collateral and the proceeds thereof, as security
for the Obligations (as defined in the CCO Guarantee and Collateral Agreement),
in each case prior and superior in right to any other Person, other than with
respect to Liens not prohibited by Section 7.3.

                  (b) Each Silo Guarantee and Collateral Agreement is effective
to continue in favor of the Borrower a legal, valid and enforceable security
interest in the Collateral described therein and proceeds thereof. In the case
of certificated Pledged Stock (constituting securities within the meaning of
Section 8-102(a)(15) of the New York UCC) described in the Silo Guarantee and
Collateral Agreements, when certificates representing such Pledged Stock are
delivered to the Borrower, and in the case of the other Collateral described in
such Silo Guarantee and Collateral Agreement, when financing statements in
appropriate form are filed in the offices specified on Schedule 4.20(b), each
Silo Guarantee and Collateral Agreement shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the parties
thereto in such Collateral and the proceeds thereof, as security for the
Obligations (as defined in such Silo Guarantee and Collateral Agreement) with
respect thereto, in each case prior and superior in right to any other Person,
other than with respect to Liens not prohibited by Section 7.3.

                  (c) None of the Equity Interests of the Borrower and its
Subsidiaries which are limited liability companies or partnerships constitutes a
security under Section 8-103 of the New York UCC or the corresponding code or
statute of any other applicable jurisdiction.

                  4.21. Solvency. The Borrower and its Subsidiaries, taken as a
whole, are, and after giving effect to the financing transactions referred to
herein will be and will continue to be, Solvent.

                                       47


                  4.22. Certain Tax Matters. As of the Restatement Effective
Date, each of Holdings, the Borrower and each of its Subsidiaries (other than
any such Subsidiary that is organized as a corporation) is a Flow-Through
Entity.

                  4.23. No Burdensome Restrictions. No Contractual Obligation of
any Loan Party could reasonably be expected to have a Material Adverse Effect.

                        SECTION 5. CONDITIONS PRECEDENT

                  5.1. Conditions to Restatement Effective Date. The
effectiveness of this Agreement is subject to the satisfaction of the following
conditions precedent:

                  (a) Lender Addenda. The Administrative Agent shall have
         received an executed Addendum from each Lender authorizing the
         Administrative Agent to enter into this Agreement for the benefit of
         the Lenders.

                  (b) Credit Agreement; CCO Guarantee and Collateral Agreement.
         This Agreement shall have been executed and delivered by the Agents,
         Holdings and the Borrower. The CCO Guarantee and Collateral Agreement
         shall have been executed and delivered by Holdings, the Borrower and
         the Subsidiary Guarantors.

                  (c) Liquidity. Available Liquidity shall be at least
         $500,000,000.

                  (d) Silo Credit Agreements, etc. Each Silo Credit Agreement
         and Silo Guarantee and Collateral Agreement (including any
         reaffirmation agreement in connection therewith), in form and substance
         reasonably satisfactory to the Administrative Agent, shall be in full
         force and effect.

                  (e) Senior Notes. (i) The Borrower shall have issued the CCO
         Senior Notes and (ii) the Senior Note Intercreditor Agreement, in form
         and substance reasonably satisfactory to the Administrative Agent,
         shall have been executed and delivered by each of the parties thereto.

                  (f) Payment of Fees, Expenses, Etc. The Borrower shall have
         paid all fees and expenses (i) required to be paid herein for which
         invoices have been presented or (ii) as otherwise agreed to be paid on
         the Restatement Effective Date.

                  (g) Pro Forma Capitalization Table; Financial Statements. The
         Lenders shall have received (i) a pro forma capitalization table of the
         Borrower, (ii) audited consolidated financial statements of the
         Borrower for the 2003 fiscal year and (iii) unaudited interim
         consolidated financial statements of the Borrower for each fiscal
         quarter ended 45 or more days after the date of the financial
         statements delivered pursuant to clause (ii) of this paragraph, and
         such financial statements shall not, in the reasonable judgment of the
         Lenders, reflect any material adverse change in the consolidated
         financial condition of the Borrower, as reflected in the financial
         statements or projections contained in the Confidential Information
         Memorandum.

                  (h) Projections. The Borrower shall have delivered
         satisfactory projections through the 2010 fiscal year.

                  (i) Lien Searches. The Administrative Agent shall have
         received, with respect to each Loan Party, the results of a recent lien
         search in such Loan Party's jurisdiction of organization, and such
         search shall reveal no liens on any of its assets except for liens not
         prohibited by

                                       48


         Section 7.3 or discharged on or prior to the Restatement Effective Date
         pursuant to documentation satisfactory to the Administrative Agent.

                  (j) Solvency Certificate. The Administrative Agent shall have
         received a solvency certificate of the Borrower dated the Restatement
         Effective Date, satisfactory to the Administrative Agent.

                  (k) Legal Opinions. On the Restatement Effective Date, the
         Administrative Agent shall have received the legal opinion of Irell &
         Manella LLP, counsel to Holdings and the Borrower, which opinion shall
         be in form and substance reasonably satisfactory to the Administrative
         Agent.

                  (l) Filings. (i) Uniform Commercial Code financing statements
         required by the CCO Guarantee and Collateral Agreement to be filed in
         order to perfect in favor of the Administrative Agent, for the benefit
         of the Lenders, a Lien on the Collateral described therein, prior and
         superior in right to any other Person (other than with respect to Liens
         not prohibited by Section 7.3 (other than pursuant to Section 7.3(o))
         and (ii) Uniform Commercial Code financing statement amendments
         required to be filed in order to maintain in favor of the Borrower a
         perfected Lien on the Collateral described in the relevant Silo
         Guarantee and Collateral Agreement (which Lien shall be assigned by the
         Borrower to the Administrative Agent), prior and superior in right to
         any other Person (other than with respect to Liens not prohibited by
         Section 7.3), shall, in each case, be in proper form for filing.

                  (m) Pledged Stock; Stock Powers; Pledged Notes. The
         Administrative Agent shall have received (i) the certificates
         representing the Equity Interests (constituting securities within the
         meaning of Section 8-102(a)(15) of the New York UCC) pledged pursuant
         to the Guarantee and Collateral Agreements, together with an undated
         power or assignment for each such certificate executed in blank by a
         duly authorized officer of the pledgor thereof, and (ii) each
         promissory note (if any) pledged pursuant to the Guarantee and
         Collateral Agreements endorsed (without recourse) in blank (or
         accompanied by an executed transfer form in blank) by the pledgor
         thereof.

                  (n) Closing Certificate; Certified Certificate of
         Incorporation; Good Standing Certificates. The Administrative Agent
         shall have received (i) a certificate of each Loan Party, dated the
         Closing Date, substantially in the form of Exhibit C, with appropriate
         insertions and attachments, including the certificate of incorporation
         of each Loan Party that is a corporation certified by the relevant
         authority of the jurisdiction of organization of each Loan Party, and
         (ii) a long form good standing certificate for each Loan Party from its
         jurisdiction of organization.

                  5.2. Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including its initial extension of credit) is subject to the satisfaction
of the following conditions precedent:

                  (a) Representations and Warranties. Each of the
         representations and warranties made by any Loan Party in or pursuant to
         the Loan Documents shall be true and correct in all material respects
         on and as of such date as if made on and as of such date (except for
         any representation and warranty that is made as of a specified earlier
         date, in which case such representation and warranty shall have been
         true and correct in all material respects as of such earlier date).

                  (b) No Default. No Default or Event of Default shall have
         occurred and be continuing on such date or after giving effect to the
         extensions of credit requested to be made on such date.

                                       49


Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.

                        SECTION 6. AFFIRMATIVE COVENANTS

                  Holdings and the Borrower hereby agree that, so long as the
Revolving Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender or any Agent hereunder, each
of Holdings and the Borrower shall, and shall cause each Subsidiary of the
Borrower to:

                  6.1. Financial Statements. Furnish to the Administrative Agent
(with sufficient copies for each Lender):

                  (a) as soon as available, but in any event within 90 days
         after the end of each fiscal year of the Borrower, a copy of the
         audited consolidated balance sheet of the Borrower and its consolidated
         Subsidiaries as at the end of such year and the related audited
         consolidated statements of income and of cash flows for such year,
         setting forth in each case in comparative form the figures for the
         previous year, reported on without a "going concern" or like
         qualification or exception, or qualification arising out of the scope
         of the audit, by KPMG or other independent certified public accountants
         of nationally recognized standing;

                  (b) as soon as available, but in any event not later than 45
         days after the end of each of the first three quarterly periods of each
         fiscal year of the Borrower, the unaudited consolidated balance sheets
         of the Borrower and its consolidated Subsidiaries as at the end of such
         quarter and the related unaudited consolidated statements of income and
         of cash flows for such quarter and the portion of the fiscal year
         through the end of such quarter, setting forth in each case in
         comparative form the figures for the previous year, certified by a
         Responsible Officer as being fairly stated in all material respects
         (subject to normal year-end audit adjustments); and

                  (c) if the Guarantee and Pledge Date shall have failed to
         occur on or prior to December 31, 2004, and until the Guarantee and
         Pledge Date has occurred, as soon as available, but in any event not
         later than 90 days after the end of each fiscal year and 45 days after
         the end of each of the first three fiscal quarters of each Silo
         Borrower, beginning with the fiscal year ending on December 31, 2004,
         the unaudited consolidated balance sheets of such Silo Borrower and its
         consolidated Subsidiaries as at the end of such quarter and the related
         unaudited consolidated statements of income and of cash flows for such
         quarter and the portion of the fiscal year through the end of such
         quarter, setting forth in the case of financial statements for any
         fiscal year in comparative form the figures for the previous year,
         certified by a Responsible Officer as being fairly stated in all
         material respects.

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (i) except as approved by such accountants or officer, as the case may
be, and disclosed therein, and (ii) except that the consolidated statements of
the Borrower and its consolidated Subsidiaries described in clauses 6.1(a) and
6.1(b) above will not include the balance sheet and financial results of the
Non-Recourse Subsidiaries.

                  6.2. Certificates; Other Information. Furnish to the
Administrative Agent (with sufficient copies for each Lender) (or, in the case
of clause (f) below, to the relevant Lender):

                                       50


                  (a) concurrently with the delivery of the financial statements
         referred to in Section 6.1(a), a certificate of the independent
         certified public accountants reporting on such financial statements
         stating that in making the examination necessary therefor no knowledge
         was obtained of any Default or Event of Default under Section 7.1,
         except as specified in such certificate;

                  (b) concurrently with the delivery of any financial statements
         pursuant to Section 6.1, (i) a certificate of a Responsible Officer
         stating that, to the best of each such Responsible Officer's knowledge,
         each Loan Party during such period has observed or performed all of its
         covenants and other agreements, and satisfied every condition,
         contained in this Agreement and the other Loan Documents to which it is
         a party to be observed, performed or satisfied by it, and that such
         Responsible Officer has obtained no knowledge of any Default or Event
         of Default except as specified in such certificate and (ii) a
         Compliance Certificate containing all information and calculations
         necessary for determining compliance by Holdings, the Borrower and its
         Subsidiaries with the provisions of this Agreement referred to therein
         as of the last day of the fiscal quarter or fiscal year of the
         Borrower, as the case may be;

                  (c) as soon as available, and in any event no later than 60
         days after the end of each fiscal year of the Borrower, a budget for
         the following fiscal year (which shall include projected Consolidated
         Operating Cash Flow and budgeted capital expenditures), and, as soon as
         available, material revisions, if any, of such budget with respect to
         such fiscal year (collectively, the "Budget"), which Budget shall in
         each case be accompanied by a certificate of a Responsible Officer
         stating that such Budget is based on reasonable estimates, information
         and assumptions and that such Responsible Officer has no reason to
         believe that such Budget is incorrect or misleading in any material
         respect;

                  (d) no later than three Business Days prior to consummating
         any transaction described in Section 7.2(f), 7.2(g) (except where a
         certificate has been provided pursuant to Section 7.7(f) or 7.7(h)),
         7.5(f), 7.5(g), 7.5(h), 7.6(b), 7.6(c), 7.7(f), 7.7(g), 7.7(h) or
         7.8(a)(ii), a certificate of a Responsible Officer providing (i) a
         reasonable description of such transaction and certifying that both
         before and after giving effect to such transaction, no Default or Event
         of Default shall be in effect, and with respect to 7.2(f), 7.5(f),
         7.5(h), 7.6(b), 7.6(c), 7.7(f), 7.7(h), and 7.8(a)(ii), demonstrating
         in reasonable detail on a pro forma basis compliance with Section 7.1,
         and (ii) compliance with any other financial or liquidity tests
         referred to in the relevant Section; provided that, the requirement to
         deliver such certificate shall not apply to any transaction otherwise
         covered hereby where the Consideration or other amount paid or received
         or the amount of Indebtedness incurred, as the case may be, is less
         than $50,000,000;

                  (e) until the Additional Credit Support Compliance Date shall
         have occurred, when (i) CCH files financial statements (or any
         amendments thereto or restatements thereof) with the SEC (commencing
         with financial statements for the fiscal quarter ending September 30,
         2004) or (ii) CCH or any of its "Restricted Subsidiaries" (as defined
         in the CCH Senior Note Indenture) otherwise determines whether the
         Leverage Condition has been satisfied in connection with any
         contemplated action, transaction or incurrence of obligations that
         would be permitted only upon satisfaction of the Leverage Condition,
         the Borrower shall deliver a certificate executed by a responsible
         officer of CCH to the Administrative Agent certifying whether the
         Leverage Condition has been (x) satisfied or (y) is otherwise no longer
         applicable as contemplated under clause (b) of the definition of
         "Guarantee and Pledge Date" and demonstrating the calculation of the
         Leverage Condition in reasonable detail as of the date of the
         occurrence of the events described in clause (i) or (ii) (assuming for
         the purpose of this calculation that the amount of Indebtedness (as
         defined in the CCH Senior Note Indenture) of CCH and its "Restricted

                                       51


         Subsidiaries" as of such date is the amount of such Indebtedness
         outstanding on the date such certificate is delivered); and

                  (f) promptly, such additional financial and other information
         as any Lender may from time to time reasonably request.

                  6.3. Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where failure to do so could
not reasonably be expected to have a Material Adverse Effect or where the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of Holdings, the Borrower or its Subsidiaries, as the case
may be.

                  6.4. Maintenance of Existence; Compliance. (a) (i) Other than
with respect to Shell Subsidiaries, preserve, renew and keep in full force and
effect its existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 7.4 and
except, in the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.

                  6.5. Maintenance of Property; Insurance. (a) Except as in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
keep all property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain with financially
sound and reputable insurance companies insurance on all its material property
in at least such amounts and against at least such risks (but including in any
event public liability, product liability and business interruption) as are
usually insured against in the same general geographic area by companies engaged
in the same or a similar business.

                  6.6. Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
material dealings and transactions in relation to its business and activities
and (b) permit representatives of any Lender, coordinated through the
Administrative Agent, to visit and inspect any of its properties and examine and
make abstracts from any of its books and records at any reasonable time and as
often as may reasonably be desired and to discuss the business, operations,
properties and financial and other condition of Holdings, the Borrower and its
Subsidiaries with officers and employees of Holdings, the Borrower and its
Subsidiaries and with its independent certified public accountants.

                  6.7. Notices. Promptly give notice to the Administrative Agent
and each Lender of:

                  (a) the occurrence of any Default or Event of Default;

                  (b) any (i) default or event of default under any Contractual
         Obligation of Holdings, the Borrower or any of its Subsidiaries or (ii)
         litigation, investigation or proceeding that may exist at any time
         between Holdings, the Borrower or any of its Subsidiaries and any
         Governmental Authority, that, in either case, could reasonably be
         expected to have a Material Adverse Effect;

                  (c) any litigation or proceeding commenced against Holdings,
         the Borrower or any of its Subsidiaries which could reasonably be
         expected to result in a liability of $50,000,000 or more to

                                       52


         the extent not covered by insurance or which could reasonably be
         expected to have a Material Adverse Effect;

                  (d) the following events, as soon as possible and in any event
         within 15 days after any Loan Party knows or has reason to know
         thereof: (i) the occurrence of any Reportable Event with respect to any
         Plan, a failure to make any required contribution to a Plan, the
         creation of any Lien in favor of the PBGC or a Plan or any withdrawal
         from, or the termination, Reorganization or Insolvency of, any
         Multiemployer Plan, (ii) the institution of proceedings or the taking
         of any other action by the PBGC or any Loan Party or any Commonly
         Controlled Entity or any Multiemployer Plan with respect to the
         withdrawal from, or the termination, Reorganization or Insolvency of,
         any Plan or (iii) within five Business Days after the receipt thereof
         by any Loan Party or any Commonly Controlled Entity, a copy of any
         notice from the PBGC stating its intention to terminate a Plan or to
         have a trustee appointed to administer any Plan;

                  (e) any determination by the Borrower to treat the Loans
         and/or Letters of Credit as being a "reportable transaction" (within
         the meaning of Treasury Regulation Section 1.6011-4), and promptly
         thereafter, the Borrower shall deliver a duly completed copy of IRS
         Form 8886 or any successor form to the Administrative Agent; and

                  (f) any other development or event that has had or could
         reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Holdings, the Borrower or the relevant
Subsidiary proposes to take with respect thereto.

                  6.8. Environmental Laws. (a) Except as, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, comply
with, and ensure compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws, and obtain and comply with and maintain, and
ensure that all tenants and subtenants obtain and comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.

                  (b) Except as, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.

                  6.9. Additional Collateral. With respect to any new Subsidiary
(other than any type of Subsidiary referred to in clause (x) or (y) below so
long as it qualifies as such or is subject to the restrictions referred to
therein) created or acquired by the Borrower or any of its Subsidiaries (which
shall be deemed to have occurred in the event that (x) any Non-Recourse
Subsidiary, Shell Subsidiary, Excluded Acquired Subsidiary, Qualified LaGrange
Entity or Regulated Subsidiary ceases to qualify as such, or (y) any Subsidiary
previously prohibited from, or unable to become, a Subsidiary Guarantor pursuant
to Qualified Credit Support Limitations contained in the CCH Senior Note
Indenture or any Qualified Indebtedness of any Qualified Parent Company that is
a member of the CCI Group shall be permitted or able to become a Subsidiary
Guarantor or such Indebtedness shall no longer be outstanding, it being
understood that such Subsidiaries will not be required to become Subsidiary
Guarantors until such time), promptly (a) execute and deliver to the
Administrative Agent such amendments to the relevant Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, or the Borrower, as
the case may be, a perfected first priority security interest, subject to Liens
not prohibited by Section 7.3, in (i) the Equity

                                       53


Interests of such new Subsidiary and all other property of the type that would
constitute Collateral of such new Subsidiary (including Intercompany
Obligations) that are held by Holdings, the Borrower or any of its Subsidiaries,
limited in the case of the Equity Interests of any Foreign Subsidiary, to 66% of
the total outstanding Equity Interests of such Foreign Subsidiary, and (ii) any
Collateral with respect to such new Subsidiary as described in the relevant
Guarantee and Collateral Agreement, (b) deliver to the Administrative Agent the
certificates, if any, representing such Equity Interests (constituting
securities within the meaning of Section 8-102(a)(15) of the New York UCC), and
any intercompany notes or other instruments evidencing Intercompany Obligations
and all other rights and interests constituting Collateral, together with, as
applicable, undated powers, instruments of transfer and endorsements, in blank,
executed and delivered by a duly authorized officer of Holdings, the Borrower or
such Subsidiary, as the case may be, and (c) except in the case of a Foreign
Subsidiary, cause such new Subsidiary (i) to deliver an Assumption Agreement
with respect to the relevant Guarantee and Collateral Agreement and (ii) to take
such actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest, subject to
Liens not prohibited by Section 7.3, in the Collateral described in the relevant
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the CCO Guarantee and Collateral Agreement
or by law or as may be requested by the Administrative Agent.

                  6.10. Additional Credit Support. (a) Upon the occurrence of
the Guarantee and Pledge Date, the Borrower shall, within five Business Days
after the Guarantee and Pledge Date:

                           (i) deliver to the Administrative Agent an Assumption
         Agreement with respect to the CCO Guarantee and Collateral Agreement
         duly authorized and executed by each Additional Subsidiary Guarantor;

                           (ii) to the extent not previously so delivered,
         deliver to the Administrative Agent the certificates, if any,
         representing any Equity Interests (constituting securities within the
         meaning of Section 8-102(a)(15) of the New York UCC) and Intercompany
         Notes required to be pledged by any Additional Subsidiary Guarantor,
         together with, as applicable, undated stock powers, instruments of
         transfer and endorsements, in blank, executed and delivered by a duly
         authorized officer of the relevant Additional Subsidiary Guarantor;

                           (iii) deliver to the Administrative Agent such
         documents and instruments as the Administrative Agent reasonably deems
         necessary or advisable to grant to the Administrative Agent, for the
         benefit of the Lenders, a perfected first priority security interest,
         subject to Liens not prohibited by Section 7.3, in all assets (other
         than assets excluded under Section 3 of the CCO Guarantee and
         Collateral Agreement) owned by each Loan Party (other than Holdings)
         which may be perfected by filing a Uniform Commercial Code financing
         statement with the Secretary of State of the jurisdiction of
         organization of such Loan Party; and

                           (iv) cause an opinion of counsel to be delivered as
         to each Additional Subsidiary Guarantor's due execution, authorization
         and delivery of the relevant Assumption Agreement, the enforceability
         thereof and of the CCO Guarantee and Collateral Agreement as to such
         Additional Subsidiary Guarantor and the creation and perfection of
         security interests pursuant to the CCO Guarantee and Collateral
         Agreement, in form and substance reasonably satisfactory to the
         Administrative Agent.

                  (b) Upon the occurrence of the Avalon Guarantee and Pledge
Date, the Borrower shall, within five Business Days after the Avalon Guarantee
and Pledge Date:

                                       54


                           (i) deliver to the Administrative Agent an Assumption
         Agreement with respect to the CCO Guarantee and Collateral Agreement
         duly authorized and executed by each Avalon Subsidiary;

                           (ii) to the extent not previously so delivered,
         deliver to the Administrative Agent the certificates, if any,
         representing any Equity Interests (constituting securities within the
         meaning of Section 8-102(a)(15) of the New York UCC) and Intercompany
         Notes required to be pledged by any Avalon Subsidiary, together with,
         as applicable, undated stock powers, instruments of transfer and
         endorsements, in blank, executed and delivered by a duly authorized
         officer of the relevant Avalon Subsidiary;

                           (iii) deliver to the Administrative Agent such
         documents and instruments as the Administrative Agent reasonably deems
         necessary or advisable to grant to the Administrative Agent, for the
         benefit of the Lenders, a perfected first priority security interest,
         subject to Liens not prohibited by Section 7.3, in all assets (other
         than assets excluded under Section 3 of the CCO Guarantee and
         Collateral Agreement) owned by each Avalon Subsidiary which may be
         perfected by filing a Uniform Commercial Code financing statement with
         the Secretary of State of the jurisdiction of organization of such
         Avalon Subsidiary; and

                           (iv) cause an opinion of counsel to be delivered as
         to each Avalon Subsidiary's due execution, authorization and delivery
         of the relevant Assumption Agreement, the enforceability thereof and of
         the CCO Guarantee and Collateral Agreement as to such Avalon Subsidiary
         and the creation and perfection of security interests pursuant to the
         CCO Guarantee and Collateral Agreement, in form and substance
         reasonably satisfactory to the Administrative Agent.

                  (c) To the extent, but only to the extent, requested by the
Administrative Agent at any time after compliance with Section 6.10(a) or (b),
as applicable, forgive any amounts owing under the relevant Silo Credit
Agreement or Silo Guarantee and Collateral Agreement and terminate such
agreements and any related documentation, in each case pursuant to documentation
reasonably satisfactory to the Administrative Agent.

                  6.11. Regulated Subsidiaries. With respect to each Regulated
Subsidiary, (a) take reasonable steps to obtain the consents required from any
Governmental Authority to enable such Regulated Subsidiary (unless it is a Shell
Subsidiary) to become a Loan Party and to enable the Loan Parties to pledge as
Collateral all of the Equity Interests of such Regulated Subsidiary owned by
them and (b) cause such Regulated Subsidiary to comply with the proviso
contained in the definition thereof.

                         SECTION 7. NEGATIVE COVENANTS

                  Holdings and the Borrower agree that, so long as the Revolving
Commitments remain in effect, any Letter of Credit remains outstanding or any
Loan or other amount is owing to any Lender or any Agent hereunder, Holdings
(solely with respect to Sections 7.2, 7.3, 7.4, 7.12, 7.14 and 7.15) and the
Borrower shall not, and shall not permit any Subsidiary of the Borrower to,
directly or indirectly:

                  7.1. Financial Condition Covenants.

                  (a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio determined as of the last day of any fiscal quarter of the
Borrower to exceed 4.25 to 1.0.

                                       55


                  (b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio determined as of the last day of any fiscal
quarter of the Borrower to be less than 1.25 to 1.0.

                  (c) Consolidated Debt Service Coverage Ratio. Permit the
Consolidated Debt Service Coverage Ratio determined as of the last day of any
fiscal quarter to be less than 1.05 to 1.0.

                  7.2. Indebtedness. Create, issue, incur, assume, become liable
in respect of or suffer to exist any Indebtedness, except:

                  (a) Indebtedness of any Loan Party pursuant to any Loan
         Document;

                  (b) (i) Indebtedness of the Borrower to any Subsidiary and of
         any Wholly Owned Subsidiary Guarantor to the Borrower or any other
         Subsidiary; (ii) Indebtedness of any Subsidiary of the Borrower that is
         not a Subsidiary Guarantor and that (unless such Indebtedness is
         incurred after the Additional Credit Support Compliance Date) is not a
         Silo Entity to any other Subsidiary of the Borrower that is not a
         Subsidiary Guarantor; (iii) Indebtedness of any Silo Borrower to any
         Subsidiary of such Silo Borrower and of any Wholly Owned Silo Loan
         Party to the Silo Borrower that is its direct or indirect parent or to
         any Wholly Owned Silo Loan Party that is a Subsidiary of such Silo
         Borrower; (iv) Indebtedness of any Subsidiary of a Silo Borrower that
         is not a Silo Credit Entity to any other Subsidiary of such Silo
         Borrower that is not a Silo Credit Entity; and (v) Indebtedness
         incurred by any Subsidiary resulting from Investments made pursuant to
         Section 7.7(h) in the form of intercompany loans;

                  (c) (i) Guarantee Obligations incurred in the ordinary course
         of business by the Borrower or any of its Subsidiaries of obligations
         of any Wholly Owned Subsidiary Guarantor or, if such Subsidiary is a
         Guarantor, obligations of the Borrower; (ii) Guarantee Obligations
         incurred in the ordinary course of business by any Subsidiary of the
         Borrower that is not a Subsidiary Guarantor of obligations of any other
         Subsidiary of the Borrower that is not a Subsidiary Guarantor and that
         (unless such Guarantee Obligation is incurred after the Additional
         Credit Support Compliance Date) is not a Silo Entity; (iii) Guarantee
         Obligations incurred in the ordinary course of business by any Silo
         Borrower or any Subsidiary of such Silo Borrower of obligations of any
         Wholly Owned Silo Loan Party that is a Subsidiary of such Silo Borrower
         or, if such Subsidiary is a Silo Credit Entity, obligations of such
         Silo Borrower; and (iv) Guarantee Obligations incurred in the ordinary
         course of business by any Subsidiary of a Silo Borrower that is not a
         Silo Credit Entity of obligations of any other Subsidiary of such Silo
         Borrower that is not a Silo Credit Entity;

                  (d) the Avalon Notes;

                  (e) Indebtedness of the Borrower and its Subsidiaries
         (including, without limitation, Capital Lease Obligations) secured by
         Liens permitted by Section 7.3(f)(i) in an aggregate principal amount
         not to exceed $400,000,000 at any one time outstanding;

                  (f) Indebtedness of the Borrower and Charter Communications
         Operating Capital Corp. (and Guarantee Obligations of any Guarantor in
         respect thereof) so long as (i) at the time of the incurrence or
         issuance of such Indebtedness, no Default or Event of Default shall
         have occurred and be continuing or would result therefrom, (ii) such
         Indebtedness shall have no scheduled amortization prior to the date
         that is six months after the final maturity of the Term Loans
         outstanding on the date such Indebtedness is incurred and (iii) the
         covenants and default provisions applicable to such Indebtedness shall
         be no more restrictive in any material respect than those contained in
         the CCO Senior Note Indenture;

                                       56


                  (g) Indebtedness of any Person that becomes a Subsidiary
         pursuant to an Investment permitted by Section 7.7 (other than as set
         forth in Section 7.2(h)), so long as (i) at the time of the incurrence
         or issuance of such Indebtedness, no Default or Event of Default shall
         have occurred and be continuing or would result therefrom, (ii) such
         Indebtedness existed at the time of such Investment and was not created
         in anticipation thereof, (iii) the Borrower shall use its best efforts
         to cause such Indebtedness to be repaid no later than 120 days after
         the date of such Investment, (iv) a certificate of a Responsible
         Officer of the Borrower stating whether or not such Indebtedness
         subjects such new Subsidiary to any restriction of the type described
         in Section 7.13 (disregarding any exceptions contained in Section 7.13)
         and setting forth the nature and extent of such restriction shall have
         been delivered to the Administrative Agent and (v) the aggregate
         outstanding principal amount of Indebtedness incurred pursuant to this
         paragraph shall not exceed $400,000,000;

                  (h) Indebtedness of Renaissance Media Group LLC and its
         Subsidiaries outstanding on the Restatement Effective Date, so long as
         the aggregate outstanding principal amount of Indebtedness incurred
         pursuant to this paragraph shall not exceed $116,118,000 plus accrued
         interest;

                  (i) letters of credit for the account of the Borrower or any
         of its Subsidiaries obtained other than pursuant to this Agreement, so
         long as the aggregate undrawn face amount thereof, together with any
         unreimbursed reimbursement obligations in respect thereof, does not
         exceed $75,000,000 at any one time;

                  (j) unsecured Indebtedness of Holdings;

                  (k) Indebtedness incurred pursuant to the LaGrange Documents
         or any other sale and leaseback transaction permitted by Section 7.10;

                  (l) Indebtedness of the Borrower and Charter Communications
         Operating Capital Corp. under the CCO Senior Notes and, from and after
         the Guarantee and Pledge Date, Guarantee Obligations of any Guarantor
         in respect thereof; and

                  (m) additional Indebtedness of the Borrower or any of its
         Subsidiaries in an aggregate principal amount (for the Borrower and all
         Subsidiaries) not to exceed $150,000,000 at any one time outstanding.

                  7.3. Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, whether now owned or hereafter acquired, except:

                  (a) Liens for taxes, assessments and other governmental
         charges not yet due or that are being contested in good faith by
         appropriate proceedings, provided that adequate reserves with respect
         thereto are maintained on the books of Holdings, the Borrower or its
         Subsidiaries, as the case may be, in conformity with GAAP;

                  (b) carriers', warehousemen's, mechanics', materialmen's,
         repairmen's or other like Liens arising in the ordinary course of
         business that are not overdue for a period of more than 30 days or that
         are being contested in good faith by appropriate proceedings;

                  (c) pledges or deposits in connection with workers'
         compensation, unemployment insurance and other social security
         legislation;

                                       57


                  (d) deposits made to secure the performance of bids, tenders,
         trade contracts, leases, statutory or regulatory obligations, surety
         and appeal bonds, bankers acceptances, government contracts,
         performance bonds and other obligations of a like nature incurred in
         the ordinary course of business, in each case excluding obligations for
         borrowed money;

                  (e) easements, rights-of-way, municipal and zoning ordinances,
         title defects, restrictions and other similar encumbrances incurred in
         the ordinary course of business that, in the aggregate, are not
         substantial in amount and that do not in any case materially detract
         from the value of the property subject thereto or materially interfere
         with the ordinary conduct of the business of Holdings, the Borrower or
         any of its Subsidiaries;

                  (f) Liens securing (i) Indebtedness of the Borrower or any of
         its Subsidiaries incurred pursuant to Section 7.2(e) to finance the
         acquisition of fixed or capital assets, provided that (A) such Liens
         shall be created substantially simultaneously with the acquisition of
         such fixed or capital assets, (B) such Liens do not at any time
         encumber any property other than the property financed by such
         Indebtedness and (C) the amount of Indebtedness secured thereby is not
         increased or (ii) Indebtedness of any Excluded Acquired Subsidiary
         permitted under Section 7.2(g) so long as such Liens do not at any time
         encumber any property other than the property of Excluded Acquired
         Subsidiaries;

                  (g) Liens on assets of the Borrower, and, from and after the
         Guarantee and Pledge Date, any Guarantor, in each case constituting
         Collateral under the CCO Guarantee and Collateral Agreement, securing
         Indebtedness of the Borrower or such Guarantor, as the case may be,
         incurred pursuant to Section 7.2(l), subject to the Senior Note
         Intercreditor Agreement;

                  (h) (i) Liens created pursuant to the CCO Guarantee and
         Collateral Agreement securing obligations of the Loan Parties under (x)
         the Loan Documents, (y) Specified Hedge Agreements and (z) letters of
         credit issued pursuant to Section 7.2(i) by any Lender or any Affiliate
         of any Lender and (ii) Liens created pursuant to the Silo Guarantee and
         Collateral Agreements securing obligations of the Loan Parties under
         the Silo Credit Agreements;

                  (i) any landlord's Lien or other interest or title of a lessor
         under any lease or a licensor under a license entered into by the
         Borrower or any of its Subsidiaries in the ordinary course of its
         business and covering only the assets so leased or licensed;

                  (j) Liens created under Pole Agreements on cables and other
         property affixed to transmission poles or contained in underground
         conduits;

                  (k) Liens of or restrictions on the transfer of assets imposed
         by any Governmental Authority or other franchising authority, utilities
         or other regulatory bodies or any federal, state or local statute,
         regulation or ordinance, in each case arising in the ordinary course of
         business in connection with franchise agreements or Pole Agreements;

                  (l) Liens arising from judgments or decrees not constituting
         an Event of Default under Section 8(i);

                  (m) Liens arising under or in connection with the LaGrange
         Documents or any other sale and leaseback transaction permitted by
         Section 7.10;

                                       58


                  (n) Liens consisting of cash collateral in an aggregate amount
         not exceeding $50,000,000 at any time, securing Specified Hedge
         Agreements or letters of credit issued pursuant to Section 7.2(i);

                  (o) second-priority Liens on assets constituting Collateral
         under the CCO Guarantee and Collateral Agreement securing Indebtedness
         of the Borrower or any Guarantor incurred pursuant to Section 7.2(f),
         which Liens shall be on terms and conditions no less favorable to the
         interests of the Loan Parties and the Lenders than those contained in
         the CCO Senior Note Indenture, and in any event subject to an
         intercreditor agreement on terms and conditions satisfactory to the
         Administrative Agent; and

                  (p) Liens not otherwise permitted by this Section so long as
         neither (i) the aggregate outstanding principal amount of the
         obligations secured thereby nor (ii) the aggregate fair market value
         (determined as of the date such Lien is incurred) of the assets subject
         thereto exceeds $50,000,000 at any one time outstanding.

                  7.4. Fundamental Changes. Enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that:

                  (a) (i) any Subsidiary of the Borrower may be merged or
         consolidated with or into any Wholly Owned Subsidiary Guarantor
         (provided that the Wholly Owned Subsidiary Guarantor shall be the
         continuing or surviving entity); (ii) any Wholly Owned Subsidiary of
         the Borrower that is not a Subsidiary Guarantor may be merged or
         consolidated with or into any Wholly Owned Subsidiary of the Borrower
         that (unless such transaction occurs after the Additional Credit
         Support Compliance Date) is not a Silo Entity; (iii) any Subsidiary of
         a Silo Borrower may be merged or consolidated with or into such Silo
         Borrower or any Wholly Owned Silo Loan Party that is a Subsidiary of
         such Silo Borrower (provided that in the case of a merger or
         consolidation with or into a Silo Borrower, such Silo Borrower shall be
         the continuing or surviving entity and, in the case of a merger or
         consolidation with or into a Wholly Owned Silo Loan Party, such Wholly
         Owned Silo Loan Party shall be the continuing or surviving entity); and
         (iv) any Wholly Owned Subsidiary of a Silo Borrower that is not a
         Wholly Owned Silo Loan Party may be merged or consolidated with or into
         such Silo Borrower or any other Wholly Owned Subsidiary of such Silo
         Borrower;

                  (b) any Subsidiary of the Borrower that is a holding company
         with no operations may be merged or consolidated with or into the
         Borrower (provided that the Borrower shall be the continuing or
         surviving entity);

                  (c) (i) any Subsidiary of the Borrower may Dispose of any or
         all of its assets (upon voluntary liquidation or otherwise) to any
         Wholly Owned Subsidiary Guarantor, (ii) any Subsidiary of a Silo
         Borrower may Dispose of any or all of its assets (upon voluntary
         liquidation or otherwise) to any Wholly Owned Silo Loan Party that is a
         Subsidiary of such Silo Borrower and (iii) any Subsidiary may dispose
         of any or all of its assets to any other Subsidiary to effect a
         Disposition permitted by Section 7.5(f);

                  (d) any Shell Subsidiary may be liquidated or dissolved or
         otherwise cease to exist; and

                  (e) so long as no Default or Event of Default has occurred or
         is continuing or would result therefrom, Holdings may be merged or
         consolidated with any Affiliate of the Charter Group (provided that
         either (i) Holdings is

                                       59


         the continuing or surviving entity or (ii) if Holdings is not the
         continuing or surviving entity, such continuing or surviving entity
         assumes the obligations of Holdings under the Loan Documents to which
         it is a party pursuant to an instrument in form and substance
         reasonably satisfactory to the Administrative Agent and, in connection
         therewith, the Administrative Agent shall receive such legal opinions,
         certificates and other documents as they may reasonably request).

                  7.5. Disposition of Property. Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any Equity Interests to any Person, except:

                  (a) the Disposition of obsolete or worn out property in the
         ordinary course of business;

                  (b) Dispositions of cash and Cash Equivalents, and the sale of
         inventory in the ordinary course of business;

                  (c) Dispositions expressly permitted by Section 7.4;

                  (d) (i) the sale or issuance of any Subsidiary's Equity
         Interests to the Borrower or any Wholly Owned Subsidiary Guarantor;
         (ii) the sale or issuance of the Equity Interests of any Subsidiary of
         the Borrower that is not a Subsidiary Guarantor to any other Subsidiary
         of the Borrower that is not a Subsidiary Guarantor and that (unless
         such transaction occurs after the Additional Credit Support Compliance
         Date) is not a Silo Entity; (iii) the sale or issuance of the Equity
         Interests of any Subsidiary of a Silo Borrower to such Silo Borrower or
         any Wholly Owned Silo Loan Party that is a Subsidiary of such Silo
         Borrower; and (iv) the sale or issuance of the Equity Interests of any
         Subsidiary of a Silo Borrower that is not a Silo Credit Entity to any
         other Subsidiary of such Silo Borrower that is not a Silo Credit
         Entity;

                  (e) the sale or issuance of any Subsidiary's Equity Interests
         to a Designated Holding Company; provided that (i) such Equity
         Interests are contributed as a capital contribution to the direct
         parent of such Subsidiary on the date of such sale or issuance (and, if
         such parent is a Wholly Owned Subsidiary such parent shall remain a
         Wholly Owned Subsidiary after such contribution) and (ii) no DHC
         Default shall have occurred and be continuing or would result
         therefrom;

                  (f) the Disposition (directly or indirectly through the
         Disposition of 100% of the Equity Interests of a Subsidiary) of
         operating assets by the Borrower or any of its Subsidiaries (it being
         understood that all Exchange Excess Amounts shall be deemed to
         constitute usage of availability in respect of Dispositions pursuant to
         this Section 7.5(f)), provided that (i) on the date of such Disposition
         (the "Disposition Date"; it being understood that, with respect to a
         series of related Dispositions required pursuant to a plan of
         Dispositions contained in a single agreement, the Disposition Date
         shall be the date of the first such Disposition), no Default or Event
         of Default shall have occurred and be continuing or would result
         therefrom; (ii) in any fiscal year, the Annualized Asset Cash Flow
         Amount attributable to the assets being disposed of, when added to the
         Annualized Asset Cash Flow Amount attributable to all other assets
         previously disposed of pursuant to this Section 7.5(f) in such fiscal
         year, shall not exceed an amount equal to 25% of Annualized Operating
         Cash Flow for the last fiscal quarter of the immediately preceding
         fiscal year; (iii) the Annualized Asset Cash Flow Amount attributable
         to the assets being disposed of, when added to the Annualized Asset
         Cash Flow Amount attributable to all other assets previously disposed
         of pursuant to this Section 7.5(f) during the period from the
         Restatement Effective Date to such Disposition Date, shall not exceed
         an amount equal to 50% of Annualized Pro Forma Operating Cash Flow
         determined as of such Disposition Date; (iv) except in the case of any

                                       60


         Exchange, at least 75% of the proceeds of such Disposition shall be in
         the form of cash; and (v) the Net Cash Proceeds of such Disposition
         shall be applied to prepay the Term Loans to the extent required by
         Section 2.9(a);

                  (g) any Exchange by the Borrower and its Subsidiaries;
         provided that (i) on the relevant Exchange Date, no Default or Event of
         Default shall have occurred and be continuing or would result
         therefrom; (ii) in the event that the Annualized Asset Cash Flow Amount
         attributable to the assets being Exchanged exceeds the annualized asset
         cash flow amount (determined in a manner comparable to the manner in
         which Annualized Asset Cash Flow Amounts are determined hereunder) of
         the assets received in connection with such Exchange (such excess
         amount, an "Exchange Excess Amount"), then, the Disposition of such
         Exchange Excess Amount shall be permitted by clauses (ii) and (iii) of
         Section 7.5(f); and (iii) the Net Cash Proceeds of such Exchange, if
         any, shall be applied to prepay the Term Loans to the extent required
         by Section 2.9(a);

                  (h) Dispositions by the Borrower and its Subsidiaries of
         property acquired after the Restatement Effective Date (other than
         property acquired in connection with Exchanges of property owned on the
         Restatement Effective Date), so long as (i) no Default or Event of
         Default shall have occurred and be continuing or would result
         therefrom, (ii) a definitive agreement to consummate such Disposition
         is executed no later than twelve months after the date on which
         relevant property is acquired and (iii) such Disposition is consummated
         within eighteen months after the date on which the relevant property is
         acquired;

                  (i) Dispositions of Investments listed on Schedule 7.5(i);
         provided that (i) no Default or Event of Default shall have occurred
         and be continuing or would result therefrom and (ii) such Disposition
         is made for fair market value;

                  (j) the Disposition by the Borrower and its Subsidiaries of
         other property having a fair market value not to exceed $10,000,000 in
         the aggregate for any fiscal year of the Borrower; and

                  (k) Dispositions of Investments permitted by Section 7.7(h);
         provided that (i) no Default or Event of Default shall have occurred
         and be continuing or would result therefrom and (ii) such Disposition
         is made for fair market value.

It is understood that this Section 7.5 does not apply to the sale or issuance of
the Equity Interests of the Borrower.

                  7.6. Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Equity Interests of Holdings, the
Borrower or any Subsidiary, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether in
cash or property or in obligations of Holdings, the Borrower or any Subsidiary
(collectively, "Restricted Payments"), except that:

                  (a) (i) any Subsidiary may make Restricted Payments to the
         Borrower or any Wholly Owned Subsidiary Guarantor; (ii) any Subsidiary
         of the Borrower that is not a Subsidiary Guarantor may make Restricted
         Payments to any other Subsidiary of the Borrower that (unless such
         Restricted Payment is made after the Additional Credit Support
         Compliance Date) is not a Silo Entity; (iii) any Subsidiary of a Silo
         Borrower may make Restricted Payments to such Silo Borrower or any
         Wholly Owned Silo Loan Party that is a Subsidiary of such Silo
         Borrower; and

                                       61


         (iv) any Subsidiary of a Silo Borrower that is not a Silo Credit Entity
         may make Restricted Payments to any other Subsidiary of such Silo
         Borrower;

                  (b) the Borrower may make distributions (directly or
         indirectly) to any Qualified Parent Company or any Affiliate of the
         Borrower for the purpose of enabling such Person to make scheduled
         interest payments in respect of its Qualified Indebtedness, provided
         that (i) no Default or Event of Default shall have occurred and be
         continuing or would result therefrom, (ii) no DHC Default shall have
         occurred and be continuing or would result therefrom (unless the use of
         proceeds of such distribution cures all such DHC Defaults) and (iii)
         each such distribution shall be made no earlier than 15 Business Days
         prior to the date the relevant interest payment is due (provided that
         this clause (iii) shall not apply to distributions in an aggregate
         amount not exceeding $50,000,000 (to be refreshed upon the making of
         any interest payment with such distributions in the amount of such
         interest payment) made directly or indirectly to CCHC or CCI for the
         purpose of enabling such Persons to make scheduled interest payments on
         their Indebtedness);

                  (c) the Borrower may make distributions to any Qualified
         Parent Company to be used to repay, repurchase, redeem or otherwise
         acquire or retire for value (collectively, "Debt Repayment") any such
         Person's Indebtedness for borrowed money that is outstanding on the
         Restatement Effective Date; provided that (i) no Default or Event of
         Default shall have occurred and be continuing or would result
         therefrom, (ii) no DHC Default shall have occurred and be continuing or
         would result therefrom (unless the use of proceeds of such distribution
         cures all such DHC Defaults), (iii) Available Liquidity, shall, after
         giving pro forma effect to such distribution, be at least $250,000,000,
         (iv) such distribution shall be made no earlier than 60 days prior to
         the date the relevant Debt Repayment is made and (v) such distribution
         is made on a Threshold Transaction Date;

                  (d) in respect of any calendar year or portion thereof during
         which the Borrower is a Flow-Through Entity, so long as no Default or
         Event of Default has occurred and is continuing or would result
         therefrom, and without duplication of Section 7.7(k), the Borrower may
         make distributions (directly or indirectly) to the direct or indirect
         holders of the Equity Interests of the Borrower that are not
         Flow-Through Entities, in an amount sufficient to permit each such
         holder to pay the actual income taxes (including required estimated tax
         installments) that are required to be paid by it with respect to the
         combined taxable income of the Qualified Parent Companies, the
         Borrower, its Subsidiaries in any calendar year, as estimated by the
         Borrower in good faith;

                  (e) Helicon may make the Restricted Payments consisting of
         distributions or dividends on or redemptions of the Helicon Preferred
         Stock;

                  (f) so long as no Default or Event of Default has occurred and
         is continuing or would result therefrom, the Borrower may make
         distributions to any of its Affiliates for purposes other than Debt
         Repayment; provided that the aggregate of all distributions made under
         this Section 7.6(f) shall not exceed $100,000,000 during the term of
         this Agreement;

                  (g) so long as no Default or Event of Default has occurred and
         is continuing or would result therefrom, the Borrower may make
         distributions to any Qualified Parent Company or direct payments to be
         used to repurchase, redeem or otherwise acquire or retire for value any
         Equity Interests of any Qualified Parent Company held by any member of
         management of Holdings or any other Qualified Parent Company, the
         Borrower or any of its Subsidiaries pursuant to any management equity
         subscription agreement or stock option agreement, provided that the

                                       62


         aggregate amount of such distributions shall not exceed $10,000,000 in
         any fiscal year of the Borrower;

                  (h) the Borrower may make distributions to any Qualified
         Parent Company to permit such Qualified Parent Company to pay (i)
         attorneys' fees, investment banking fees, accountants' fees,
         underwriting discounts and commissions and other customary fees and
         expenses actually incurred for the purpose of any issuance, sale or
         incurrence by such Qualified Parent Company of Equity Interests or
         Indebtedness (including in connection with an exchange of securities or
         a tender for outstanding debt securities) to the extent that such
         Qualified Parent Company does not have a combination of cash on hand
         and the cash proceeds of such issuance, sale or incurrence sufficient
         to pay such amounts, (ii) the costs and expenses of any offer to
         exchange privately placed securities in respect of the foregoing for
         publicly registered securities or any similar concept having a
         comparable purpose, or (iii) other administrative expenses (including
         legal, accounting, other professional fees and costs, printing and
         other such fees and expenses) incurred in the ordinary course of
         business, in an aggregate amount in the case of this clause (iii) not
         to exceed $5,000,000 in any fiscal year; and

                  (i) so long as no Default or Event of Default has occurred and
         is continuing or would result therefrom, the Borrower may make
         Restricted Payments in the amount of any payment or amount received,
         directly or indirectly, by it from any Non-Recourse Subsidiary
         concurrently with the receipt of such payment or amount.

                  7.7. Investments. Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Equity Interests, bonds, notes, debentures or other debt securities of, or any
assets constituting a significant part of a business unit of, or make any other
investment in, any Person (all of the foregoing, "Investments"), except:

                  (a) extensions of trade credit in the ordinary course of
         business;

                  (b) investments in Cash Equivalents;

                  (c) Guarantee Obligations permitted by Section 7.2;

                  (d) loans and advances to employees of the Borrower or any of
         its Subsidiaries in the ordinary course of business (including for
         travel, entertainment and relocation expenses) in an aggregate amount
         not to exceed $5,000,000 at any one time outstanding;

                  (e) Investments (including capital expenditures) (i) by the
         Borrower or any of its Subsidiaries in (x) the Borrower or any
         Subsidiary that, prior to such Investment, is a Wholly Owned Subsidiary
         Guarantor, or (y) any then existing Subsidiary that is not a Subsidiary
         Guarantor if, as a result of such Investment, such Subsidiary becomes a
         Wholly Owned Subsidiary Guarantor concurrently therewith; (ii) by any
         Subsidiary of the Borrower that is not a Subsidiary Guarantor in any
         other Subsidiary of the Borrower that is not a Subsidiary Guarantor and
         that (unless such Investment is made after the Additional Credit
         Support Compliance Date) is not a Silo Entity; (iii) by any Silo
         Borrower or any of its Subsidiaries in (x) such Silo Borrower or any
         Subsidiary of such Silo Borrower that, prior to such Investment, is a
         Wholly Owned Silo Loan Party, or (y) any then existing Subsidiary of
         such Silo Borrower that is not a Wholly Owned Silo Loan Party if, as a
         result of such Investment, such Subsidiary becomes a Wholly Owned Silo
         Loan Party; and (iv) by any Subsidiary of a Silo Borrower that is not a
         Silo Credit Entity in any other Subsidiary of such Silo Borrower that
         is not a Silo Credit Entity;

                                       63


                  (f) acquisitions by the Borrower, any Wholly Owned Subsidiary
         Guarantor or any Wholly Owned Silo Loan Party of operating assets
         (substantially all of which pertain to a Permitted Line of Business),
         directly through an asset acquisition or indirectly through the
         acquisition of 100% of the Equity Interests of a Person substantially
         engaged in a Permitted Line of Business, provided, that (i) no Default
         or Event of Default shall have occurred and be continuing or would
         result therefrom and (ii) at no time shall the aggregate Consideration
         paid during the period from the Restatement Effective Date through such
         time in connection with any such acquisitions of Equity Interests of
         Persons who, together with their Subsidiaries, are not Wholly Owned
         Subsidiary Guarantors at such time, exceed $750,000,000;

                  (g) the Borrower or any of its Subsidiaries may contribute
         operating assets to any Non-Recourse Subsidiary so long as (i) such
         Disposition is permitted pursuant to Section 7.5(f), (ii) no Default or
         Event of Default shall have occurred and be continuing or would result
         therefrom, (iii) after giving effect thereto, the Consolidated Leverage
         Ratio shall be equal to or lower than the Consolidated Leverage Ratio
         in effect immediately prior thereto and (iv) the Equity Interests
         received by the Borrower or any of its Subsidiaries in connection
         therewith shall be pledged as Collateral (either directly or through a
         holding company parent of such Non-Recourse Subsidiary so long as such
         parent is a Wholly Owned Subsidiary Guarantor); and

                  (h) in addition to Investments otherwise expressly permitted
         by this Section, Investments by the Borrower or any of its Subsidiaries
         in an aggregate amount outstanding at any time (initially valued at
         cost and giving effect to all payments received in respect thereof
         whether constituting dividends, prepayment, interest, return on capital
         or principal or otherwise unless such payments are from a Non-Recourse
         Subsidiary and applied to make a Restricted Payment under Section
         7.6(i) or an Investment under Section 7.7 (l) or 7.7(m)), not to exceed
         the sum of $300,000,000 plus the aggregate amount of cash and assets
         (valued at fair market value) contributed by any Designated Holding
         Company to the Borrower after the Restatement Effective Date in the
         form of common equity; provided, that (i) no such Investment may be
         made at any time when Default or Event of Default has occurred and is
         continuing or would result therefrom and (ii) none of the proceeds of
         such Investment may be used directly or indirectly to repay,
         repurchase, redeem or otherwise acquire or retire for value
         Indebtedness of any Qualified Parent Company or otherwise in a manner
         that would be prohibited by Section 7.6 if the Borrower or any
         Subsidiary (directly or indirectly) used such proceeds in such manner;

                  (i) any Excluded Acquired Subsidiary may make investments in
         any other Excluded Acquired Subsidiary;

                  (j) loans made by the Borrower pursuant to any Silo Credit
         Agreement and evidenced by a promissory note that has been pledged as
         Collateral under the CCO Guarantee and Collateral Agreement;

                  (k) in respect of any calendar year or portion thereof during
         which the Borrower or any of its Subsidiaries is a Flow-Through Entity,
         so long as no Default or Event of Default has occurred and is
         continuing or would result therefrom, and without duplication of
         Section 7.6(d), the Borrower and its Subsidiaries may make a loan or
         advance (directly or indirectly) to the direct or indirect holders of
         the Equity Interests of the Borrower or its Subsidiaries that are not
         Flow-Through Entities, in an amount sufficient to permit each such
         holder to pay the actual income taxes (including required estimated tax
         installments) that are required to be paid by it with respect to the
         taxable income of the Qualified Parent Companies, the Borrower or its
         Subsidiaries, as applicable, in any calendar year, as estimated by the
         Borrower in good faith;

                                       64


                  (l) so long as no Default or Event of Default has occurred and
         is continuing or would result therefrom, the Borrower and its
         Subsidiaries may make Investments in any Non-Recourse Subsidiary with
         the proceeds of distributions from any Non-Recourse Subsidiary
         concurrently with the receipt of such proceeds; and

                  (m) the Borrower and its Subsidiaries may contribute operating
         assets to a Wholly Owned Subsidiary, provided that (i) no Default or
         Event of Default has occurred and is continuing or would result
         therefrom, (ii) a binding Contractual Obligation with a counterparty
         other than a member of the Charter Group to Dispose of such assets or
         Wholly Owned Subsidiary is in effect at the time of such contribution,
         (iii) such Disposition is consummated in accordance with Section 7.5(f)
         within five Business Days of such contribution or, if such Disposition
         is not so consummated, then within eight Business Days of such
         contribution such contribution is reversed or such Wholly Owned
         Subsidiary complies with Section 6.9 and (iv) such Wholly Owned
         Subsidiary shall not make any Investments with such assets or the
         proceeds thereof, including pursuant to Section 7.7(e)(ii) or (iv).

Notwithstanding anything to the contrary in this Agreement, in no event shall
the sum of (i) the aggregate amount of letters of credit and surety arrangements
(including unreimbursed reimbursement obligations in respect thereof) and
security deposits posted by the Borrower or any of its Subsidiaries in
connection with potential Investments (including pursuant to letters of intent)
and (ii) the aggregate outstanding amount of L/C Obligations, exceed
$350,000,000 at any one time.

                  7.8. Certain Payments and Modifications Relating to
Indebtedness and Management Fees. (a) Make or offer to make any payment,
prepayment, repurchase, purchase or redemption in respect of, or otherwise
optionally or voluntarily defease or segregate funds with respect to
(collectively, "prepayment"), any Specified Long-Term Indebtedness, the CCO
Senior Notes or, unless otherwise agreed by the Administrative Agent,
Indebtedness under any Silo Credit Agreement, other than (i) the payment of
scheduled interest payments required to be made in cash, (ii) the prepayment of
Specified Subordinated Debt with the proceeds of other Specified Long-Term
Indebtedness or of Loans and (iii) the prepayment of any Specified Long-Term
Indebtedness or the CCO Senior Notes with the proceeds of other Specified
Long-Term Indebtedness, so long as such new Indebtedness has terms no less
favorable to the interests of the Borrower and the Lenders than those applicable
to the Indebtedness being refinanced.

                  (b) Amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to any of the terms
of any Specified Long-Term Indebtedness or the CCO Senior Note Indenture other
than any such amendment, modification, waiver or other change that (i) would
extend the maturity or reduce the amount of any payment of principal thereof or
reduce the rate or extend any date for payment of interest thereon or is
immaterial to the interests of the Lenders and (ii) does not involve the payment
of a consent fee.

                  (c) Make or agree to make any payment in respect of management
fees to any Person, directly or indirectly, other than (i) to the Borrower or a
Wholly Owned Subsidiary Guarantor and (ii) any amounts required to be paid or
reimbursed to the manager under the Management Fee Agreement with respect to
actual costs, fees, expenses, and other similar amounts thereunder, without any
mark-up or premium.

                  (d) Amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the
terms of the Management Fee Agreement, other than any such amendment,
modification, waiver or other change that (i) (x) would extend the due date or
reduce (or increase to the amount permitted by Section 7.8(c)) the amount of any
payment thereunder or (y) does not adversely affect the interests of the Lenders
(it being understood that a change in the manager

                                       65


thereunder to another member of the Charter Group does not adversely affect the
interests of the Lenders) and (ii) does not involve the payment of a consent
fee.

                  (e) (i) Assign any of its rights or obligations, or any
amounts owing to it, under any Silo Credit Agreement or any Silo Guarantee and
Collateral Agreement (other than pursuant to the CCO Guarantee and Collateral
Agreement or the CCO Senior Note Indenture), (ii) release any Collateral or
guarantees thereunder, or (iii) amend, modify, waive or otherwise change any of
the terms thereof in a manner that could materially and adversely affect the
interests of the Lenders, in each case without the prior written consent of the
Administrative Agent.

                  7.9. Transactions with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than transactions between or among Holdings, the Borrower or
any Subsidiary Guarantor) unless such transaction is (a) not prohibited under
this Agreement and (b) upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person that is not an Affiliate. The
foregoing restrictions shall not apply to transactions expressly permitted by
Section 7.6, Section 7.7(h) or Section 7.8(c) or amounts paid under the
Management Fee Agreement.

                  7.10. Sales and Leasebacks. Enter into any arrangement (other
than pursuant to the LaGrange Documents) with any Person (other than
Subsidiaries of the Borrower) providing for the leasing by the Borrower or any
Subsidiary of real or personal property that has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary unless, after giving effect thereto, the aggregate outstanding amount
of Attributable Debt does not exceed $175,000,000.

                  7.11. Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's method
of determining fiscal quarters.

                  7.12. Negative Pledge Clauses. Enter into or suffer to exist
or become effective any agreement that prohibits or limits the ability of
Holdings, the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property or revenues, whether now owned
or hereafter acquired, to secure obligations under this Agreement or the other
Loan Documents (regardless of amount) other than (a) this Agreement and the
other Loan Documents, (b) any agreements governing any purchase money Liens or
Capital Lease Obligations otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective against the assets financed
thereby), (c) pursuant to Contractual Obligations assumed in connection with
Investments (but not created in contemplation thereof) so long as the maximum
aggregate liabilities of Holdings, the Borrower and its Subsidiaries pursuant
thereto do not exceed $10,000,000 at any time, (d) any indenture (or similar
agreement) and any other document or instrument governing Indebtedness of
Holdings permitted hereby, or Indebtedness of a Qualified Parent Company, so
long as such restrictions are no more onerous than those contained in the CCH
Senior Note Indenture (other than restrictions based on satisfying a leverage
ratio condition), (e) the prohibitions and limitations on the LaGrange Entities
pursuant to the LaGrange Documents, (f) pursuant to agreements governing
Indebtedness assumed in connection with the acquisition of any Person that
becomes a Subsidiary pursuant to Section 7.7(f) or (h) so long as such
Indebtedness is permitted under Section 7.2(g) or (m) and such Indebtedness was
not created or incurred in contemplation of such acquisition and such
restrictions apply only to such acquired Subsidiary and its Subsidiaries, (g) as
contained in the documents governing Indebtedness permitted under Section 7.2(h)
as in effect on the Restatement Effective Date, (h) as contained in the CCO
Senior Note Indenture as in effect on the Restatement Effective Date, (i) as
contained in the Avalon Indenture as in effect on the Restatement

                                       66


Effective Date, (j) customary provisions in leases and licenses entered into in
the ordinary course of business consistent with past practices or as required in
any franchise permit and (k) customary restrictions in an agreement to Dispose
of assets in a transaction permitted under Section 7.5 solely to the extent that
such restriction applies solely to the assets to be so Disposed.

                  7.13. Clauses Restricting Subsidiary Distributions. Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary of the Borrower to (a) make Restricted Payments
in respect of any Equity Interests of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower, (b)
make loans or advances to, or other Investments in, the Borrower or any other
Subsidiary of the Borrower or (c) transfer any of its assets to the Borrower or
any other Subsidiary of the Borrower, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents, (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Equity Interests or assets of
such Subsidiary in a transaction otherwise permitted by this Agreement, (iii)
any restrictions referred to in clauses (a), (b) and (c) above contained in the
CCH Senior Note Indenture or in any other document governing the issuance of
notes or other securities in a private placement or a registered securities
offering (including those of a Qualified Parent Company) so long as such
restrictions, are no more onerous than those contained in the CCH Senior Note
Indenture (other than restrictions based on satisfying a leverage ratio
condition or equity proceeds and capital contributions baskets), (iv) the
encumbrances and restrictions on the LaGrange Entities pursuant to the LaGrange
Documents, (v) any restrictions contained in documents governing Indebtedness
permitted under Section 7.2(f), 7.2(j) or 7.2(m) so long as such restrictions
are no more onerous than those contained in the Loan Documents, (vi) any
restrictions contained in agreements governing Indebtedness assumed in
connection with the acquisition of any Person that becomes a Subsidiary pursuant
to Section 7.7(f) or (h) so long as such Indebtedness is permitted under Section
7.2(g) or (m) and such Indebtedness was not created or incurred in contemplation
of such acquisition and such restrictions apply only to such acquired Subsidiary
and its Subsidiaries, (vii) restrictions contained in the documents governing
Indebtedness permitted under Section 7.2(h) as in effect on the Restatement
Effective Date, (viii) restrictions contained in the CCO Senior Note Indenture
as in effect on the Restatement Effective Date, (ix) restrictions contained in
the Avalon Indenture as in effect on the Restatement Effective Date, (x)
restrictions contained in the organizational documents of Helicon and other
documents governing the Helicon Preferred Stock as in effect on the Restatement
Effective Date, (xi) restrictions contained in the organizational documents of
CC VIII, LLC, and other documents governing the CCVIII Interest, (xii) customary
restrictions in an agreement to Dispose of assets in a transaction permitted
under Section 7.5 solely to the extent that such restriction applies solely to
the assets to be so Disposed, (x) customary anti-assignment provisions in leases
and licenses entered into in the ordinary course of business consistent with
past practices or as required in any franchise permit, and (xi) restrictions
governing Indebtedness permitted under Section 7.2(e) to the extent prohibiting
transfers of the assets financed with such Indebtedness.

                  7.14. Lines of Business; Holding Company Status. (a) Enter
into any business, either directly or through any Subsidiary, except for (i)
those businesses in which the Borrower and its Subsidiaries are significantly
engaged on the Restatement Effective Date and (ii) businesses which are
reasonably similar or related thereto or reasonable extensions thereof but not,
in the case of this clause (ii), in the aggregate, material to the overall
business of the Borrower and its Subsidiaries (collectively, "Permitted Lines of
Business"), provided, that, in any event, the Borrower and its Subsidiaries will
continue to be primarily engaged in the businesses in which they are primarily
engaged on the Restatement Effective Date.

                  (b) In the case of the Borrower, (i) conduct, transact or
otherwise engage in, or commit to conduct, transact or otherwise engage in, any
business or operations other than those incidental to its

                                       67


ownership of the Equity Interests of other Persons (including cash management
and related investing activities) or (ii) own, lease, manage or otherwise
operate any properties or assets other than (x) Equity Interests of other
Persons (including cash management and related investing activities), (y)
Intercompany Notes and (z) temporary ownership of assets (pending contribution
to a Subsidiary Guarantor) that constitute Collateral in which the
Administrative Agent has a perfected first priority security interest.

                  (c) In the case of Holdings, (i) conduct, transact or
otherwise engage in, commit to conduct, transact or otherwise engage in any
business or operations other than those incidental to its ownership of the
Equity Interests of the Borrower or of any other Person, (ii) own, lease, manage
or otherwise operate any properties or assets other than Equity Interests of the
Borrower, Intercompany Notes, Indebtedness owing by any Person and the Equity
Interests of any other Person, (iii) incur any obligations or liabilities other
than obligations under the Loan Documents, Indebtedness under Section 7.2(j) or
(l) and other customary obligations incidental to its existence and ownership
and liabilities and obligations related to the purchase or ownership of
Indebtedness that it is not prohibited from purchasing or owning pursuant to any
Loan Document or (iv) use any proceeds or amounts received from the Borrower or
any of its Subsidiaries for purposes of enabling it to effect any transaction
prohibited under Section 7.7(h)(ii).

                  (d) In the case of Charter Communications Operating Capital
Corp., (i) conduct, transact or otherwise engage in, commit to conduct, transact
or otherwise engage in any business or operations, (ii) own, lease, manage or
otherwise operate any properties or assets or (iii) incur any obligations or
liabilities other than obligations under the Loan Documents, Indebtedness under
Section 7.2(f) or (l) and other customary obligations incidental to its
existence.

                  7.15. Investments in the Borrower. In the case of Holdings,
make any Investment in the Borrower other than in the form of a capital
contribution, a loan so long as such loan is evidenced by a note and pledged to
the Administrative Agent pursuant to the CCO Guarantee and Collateral Agreement
or a Guarantee Obligation in respect of any obligation of the Borrower.

                          SECTION 8. EVENTS OF DEFAULT

                  If any of the following events shall occur and be continuing:

                  (a) the Borrower shall fail to pay any principal of any Loan
         or Reimbursement Obligation when due in accordance with the terms
         hereof; or the Borrower shall fail to pay any interest on any Loan or
         Reimbursement Obligation, or any other amount payable hereunder or
         under any other Loan Document, within five days after any such interest
         or other amount becomes due in accordance with the terms hereof; or

                  (b) any representation or warranty made or deemed made by any
         Loan Party herein or in any other Loan Document or that is contained in
         any certificate, document or financial or other statement furnished by
         it at any time under or in connection with this Agreement or any such
         other Loan Document shall prove to have been inaccurate in any material
         respect on or as of the date made or deemed made; or

                  (c) any Loan Party shall default in the observance or
         performance of any agreement contained in clause (i) or (ii) of Section
         6.4(a) (with respect to Holdings and the Borrower only), Section
         6.7(a), Section 6.10 or Section 7 of this Agreement or Sections 6.4 and
         6.5(b) of any Guarantee and Collateral Agreement; or

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                  (d) any Loan Party shall default in the observance or
         performance of any other agreement contained in this Agreement or any
         other Loan Document (other than as provided in paragraphs (a) through
         (c) of this Section), and such default shall continue unremedied for a
         period of 30 days after notice to the Borrower from the Administrative
         Agent or the Required Lenders; or

                  (e) Holdings, the Borrower or any of its Subsidiaries shall
         (i) default in making any payment of any principal of any Indebtedness
         (including, without duplication, any Guarantee Obligation in respect of
         Indebtedness, but excluding the Loans) on the scheduled or original due
         date with respect thereto or (ii) default in making any payment of any
         interest on any such Indebtedness beyond the period of grace, if any,
         provided in the instrument or agreement under which such Indebtedness
         was created; or (iii) default in the observance or performance of any
         other agreement or condition relating to any such Indebtedness or
         contained in any instrument or agreement evidencing, securing or
         relating thereto, or any other event shall occur or condition exist,
         the effect of which default or other event or condition is to cause, or
         to permit the holder or beneficiary of such Indebtedness (or a trustee
         or agent on behalf of such holder or beneficiary) to cause, with the
         giving of notice if required, such Indebtedness to become due prior to
         its stated maturity or (in the case of any such Indebtedness
         constituting a Guarantee Obligation) to become payable; provided, that,
         a default, event or condition described in clause (i), (ii) or (iii) of
         this paragraph (e) shall not at any time constitute an Event of Default
         unless, at such time, one or more defaults, events or conditions of the
         type described in clause (i), (ii) or (iii) of this paragraph (e) shall
         have occurred and be continuing with respect to such Indebtedness the
         outstanding aggregate principal amount of which exceeds $50,000,000; or

                  (f) any Designated Holding Company other than Holdings shall
         (i) default in making any payment of any principal of any Indebtedness
         (including, without duplication, any Guarantee Obligation in respect of
         Indebtedness) on the scheduled or original due date with respect
         thereto or (ii) default in making any payment of any interest on any
         such Indebtedness or default in the observance or performance of any
         other agreement or condition relating to any such Indebtedness or
         contained in any instrument or agreement evidencing, securing or
         relating thereto, or any other event shall occur or condition exist, if
         such default or other event or condition, in each case with respect to
         this clause (ii), results in the acceleration of such Indebtedness
         prior to its stated maturity or (in the case of any such Indebtedness
         constituting a Guarantee Obligation) causes such Indebtedness to become
         payable; provided, that a default, event or condition described in
         clause (i) or (ii) of this paragraph (f) shall not at any time
         constitute an Event of Default unless, at such time, one or more
         defaults, events or conditions of the type described in clause (i) or
         (ii) of this paragraph (f) shall have occurred and be continuing with
         respect to such Indebtedness the outstanding aggregate principal amount
         of which exceeds $200,000,000; or

                  (g) (i) any Designated Holding Company, the Borrower or any of
         its Subsidiaries shall commence any case, proceeding or other action
         (A) under any existing or future law of any jurisdiction, domestic or
         foreign, relating to bankruptcy, insolvency, reorganization or relief
         of debtors, seeking to have an order for relief entered with respect to
         it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
         reorganization, arrangement, adjustment, winding-up, liquidation,
         dissolution, composition or other relief with respect to it or its
         debts, or (B) seeking appointment of a receiver, trustee, custodian,
         conservator or other similar official for it or for all or any
         substantial part of their assets or any Designated Holding Company, the
         Borrower or any of its Subsidiaries shall make a general assignment for
         the benefit of its creditors; or (ii) there shall be commenced against
         any Designated Holding Company, the Borrower or any of its Subsidiaries
         any case, proceeding or other action of a nature referred to in clause
         (i) above that (A) results in the entry of an order for relief or any
         such adjudication or appointment or (B)

                                       69


         remains undismissed, undischarged or unbonded for a period of 60 days;
         or (iii) there shall be commenced against any Designated Holding
         Company, the Borrower or any of its Subsidiaries any case, proceeding
         or other action seeking issuance of a warrant of attachment, execution,
         distraint or similar process against all or any substantial part of its
         assets that results in the entry of an order for any such relief that
         shall not have been vacated, discharged, or stayed or bonded pending
         appeal within 60 days from the entry thereof; or (iv) any Designated
         Holding Company, the Borrower or any of its Subsidiaries shall take any
         action in furtherance of, or indicating its consent to, approval of, or
         acquiescence in, any of the acts set forth in clause (i), (ii), or
         (iii) above; or (v) any Designated Holding Company, the Borrower or any
         of its Subsidiaries shall generally not, or shall be unable to, or
         shall admit in writing its inability to, pay its debts as they become
         due; or

                  (h) (i) any "accumulated funding deficiency" (as defined in
         Section 302 of ERISA), whether or not waived, shall exist with respect
         to any Plan or any Lien in favor of the PBGC or a Plan shall arise on
         the assets of any Loan Party or any Commonly Controlled Entity, (ii) a
         Reportable Event shall occur with respect to, or proceedings shall
         commence to have a trustee appointed, or a trustee shall be appointed,
         to administer or to terminate, any Single Employer Plan, which
         Reportable Event or commencement of proceedings or appointment of a
         trustee is, in the reasonable opinion of the Required Lenders, likely
         to result in the termination of such Plan for purposes of Title IV of
         ERISA, (iii) any Single Employer Plan shall terminate for purposes of
         Title IV of ERISA or (iv) any Loan Party or any Commonly Controlled
         Entity shall, or in the reasonable opinion of the Required Lenders is
         likely to, incur any liability in connection with a withdrawal from, or
         the Insolvency or Reorganization of, a Multiemployer Plan; and in each
         case in clauses (i) through (iv) above, such event or condition,
         together with all other such events or conditions, if any, could, in
         the sole judgment of the Required Lenders, reasonably be expected to
         have a Material Adverse Effect; or

                  (i) one or more judgments or decrees shall be entered against
         Holdings, the Borrower or any of its Subsidiaries involving in the
         aggregate a liability (to the extent not paid or fully covered by
         insurance as to which the relevant insurance company has acknowledged
         coverage) of $50,000,000 or more, and all such judgments or decrees
         shall not have been vacated, discharged, stayed or bonded pending
         appeal within 30 days from the entry thereof; or

                  (j) any Guarantee and Collateral Agreement shall cease, for
         any reason (other than the gross negligence or willful misconduct of
         the Administrative Agent), to be in full force and effect, or any Loan
         Party or any Affiliate of any Loan Party shall so assert, or any Lien
         created by any Guarantee and Collateral Agreement shall cease to be
         enforceable and of the same effect and priority purported to be created
         thereby (other than in connection with releases in accordance with
         Section 10.14); or

                  (k) (i) the Paul Allen Group shall cease to have the power,
         directly or indirectly, to vote or direct the voting of Equity
         Interests having at least 35% (determined on a fully diluted basis) of
         the ordinary voting power for the management of the Borrower; (ii) the
         consummation of any transaction (including, without limitation, any
         merger or consolidation) the result of which is that any "person" or
         "group" (as such terms are used in Section 13(d) and 14(d) of the
         Securities Exchange Act of 1934, as amended), other than the Paul Allen
         Group has the power, directly or indirectly, to vote or direct the
         voting of Equity Interests having more than 35% (determined on a fully
         diluted basis) of the ordinary voting power for the management of the
         Borrower, unless the Paul Allen Group has the power, directly or
         indirectly, to vote or direct the voting of Equity Interests having a
         greater percentage (determined on a fully diluted basis) of the
         ordinary voting power for the management of the Borrower than such
         "person" or "group", (iii) a Specified

                                       70


         Change of Control shall occur; (iv) the Borrower shall cease to be a
         direct Wholly Owned Subsidiary of Holdings (other than in connection
         with an issuance or sale of Equity Interests in the Borrower to CCH;
         provided that (x) such Equity Interests are contributed to Holdings on
         the date of such issuance and (y) no DHC Default shall have occurred
         and be continuing or result therefrom); or (v) prior to the Additional
         Credit Support Compliance Date, Silo Holdco shall cease to be a direct
         Wholly Owned Subsidiary of the Borrower; or

                  (l) the Borrower or any of its Subsidiaries shall have
         received a notice of termination or suspension with respect to any of
         its CATV Franchises or CATV Systems from the FCC or any Governmental
         Authority or other franchising authority or the Borrower or any of its
         Subsidiaries or the grantors of any CATV Franchises or CATV Systems
         shall fail to renew such CATV Franchises or CATV Systems at the stated
         expiration thereof if the percentage represented by such CATV
         Franchises or CATV Systems and any other CATV Franchises or CATV
         Systems which are then so terminated, suspended or not renewed of
         Consolidated Operating Cash Flow for the 12-month period preceding the
         date of the termination, suspension or failure to renew, as the case
         may be, (giving pro forma effect to any acquisitions or Dispositions
         that have occurred since the beginning of such 12-month period as if
         such acquisitions or Dispositions had occurred at the beginning of such
         12-month period), would exceed 10%, unless (i) an alternative CATV
         Franchise or CATV System in form and substance reasonably satisfactory
         to the Required Lenders shall have been procured and come into effect
         prior to or concurrently with the termination or expiration date of
         such terminated, suspended or non-renewed CATV Franchise or CATV System
         or (ii) the Borrower or such Subsidiary continues to operate and retain
         the revenues received from such systems after the stated termination or
         expiration and is engaged in negotiations to renew or extend such
         franchise rights and obtains such renewal or extension within one year
         following the stated termination or expiration, provided that such
         negotiations have not been terminated by either party thereto, such
         franchise rights or the equivalent thereof have not been awarded on an
         exclusive basis to a third Person and no final determination (within
         the meaning of Section 635 of the Communications Act of 1934, as
         amended) has been made that the Borrower or such Subsidiary is not
         entitled to the renewal or extension thereof; or

                  (m) the events described in clauses (i) and (ii) of the
         definition of "Avalon Guarantee and Pledge Date" shall fail to occur on
         the earlier of (i) the date that is 45 days after the Guarantee and
         Pledge Date and (ii) if the Guarantee and Pledge Date occurs in respect
         of financial results for any of the Borrower's first three fiscal
         quarters in any fiscal year, the date that is 10 days prior to the end
         of the next succeeding fiscal quarter; or

                  (n) DHC Debt (excluding any DHC Debt that has been defeased in
         accordance with the terms thereof) in an aggregate amount in excess of
         $500,000,000 shall remain outstanding on the date that is three months
         prior to the stated maturity of such Indebtedness; or

                  (o) except as required or otherwise expressly permitted in
         this Agreement, in the case of any Designated Holding Company, any
         Non-Recourse Subsidiary, the Borrower or any of its Subsidiaries, (i)
         fail to satisfy customary formalities with respect to organizational
         separateness, including, without limitation, (A) the maintenance of
         separate books and records and (B) the maintenance of separate bank
         accounts in its own name; (ii) fail to act solely in their own names or
         the names of their managers and through authorized officers and agents;
         (iii) in the case of the Borrower or any of its Subsidiaries, make or
         agree to make any payment to a creditor of any Designated Holding
         Company or any Non-Recourse Subsidiary in its capacity as such; (iv)
         commingle any money or other assets of any Designated Holding Company
         or any Non-Recourse Subsidiary with any money or other assets of the
         Borrower or any of its Subsidiaries; or (v) take any action, or conduct
         its affairs in a manner, which could reasonably be expected to result
         in the

                                       71


         separate organizational existence of each Designated Holding Company or
         each Non-Recourse Subsidiary from the Borrower and its Subsidiaries
         being ignored under any circumstance, and such failure, action,
         agreement, event, condition or circumstance described in any clause of
         this paragraph (o) shall continue unremedied for a period of 30 days
         after notice to the Borrower from the Administrative Agent or the
         Required Lenders; or

                  (p) prior to the occurrence of the Additional Credit Support
         Compliance Date, CCH, Holdings, the Borrower or any of its Subsidiaries
         shall take any action, engage in any transaction or incur any
         obligation or permit any Restricted Subsidiary (as defined in the CCH
         Senior Note Indenture) of CCH to take any action, engage in any
         transaction or incur any obligation that CCH or any of its Restricted
         Subsidiaries could not take, engage in or incur without having
         satisfied the Leverage Condition;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to the Borrower,
automatically the Revolving Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.

                  Notwithstanding anything to the contrary herein, no Default or
Event of Default shall be deemed to occur pursuant to Section 8(e) or 8(f), and
no DHC Default shall be deemed to occur, due to the existence of (a) a "Default"
or "Event of Default" under any indenture as in effect on the Restatement
Effective Date governing DHC Debt, or any acceleration of, or any attempt to
accelerate, such DHC Debt, in each case resulting solely from the existence of
the provisions contained in Section 7 of the Senior Note Intercreditor
Agreement, or (b) any cross-default, cross-acceleration or similar provision in
any Indebtedness of any Qualified Parent Company that is applicable, or is
invoked, solely as a result of the circumstances described in clause (a) above,
in each case so long as (i) the Borrower is in compliance

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with the provisions of Section 11.04 of the CCO Senior Note Indenture and (ii)
no enforcement action against the assets of Holdings, the Borrower or any of its
Subsidiaries by or on behalf of the holders of any such DHC Debt has occurred in
respect of any judgment, decree or similar pronouncement, interim, final or
otherwise, in connection with the foregoing, unless such enforcement action has
been effectively stayed within 30 days from the entry thereof; provided, that a
Default and an Event of Default shall nevertheless be deemed to be in existence
if (x) the Second Lien Guarantees (as defined in the Senior Note Intercreditor
Agreement) are not automatically released ab initio at the time and in the
manner contemplated by Section 11.04 of the CCO Senior Note Indenture or (y)
substantially concurrently with such release, any acceleration or attempted
acceleration described above is not rescinded. It is understood that this
paragraph does not apply to any cross-default, cross-acceleration or similar
provision in any Indebtedness other than Indebtedness of any Qualified Parent
Company.

                             SECTION 9. THE AGENTS

                  9.1. Appointment. (a) Each Lender hereby agrees that: (i) any
requirement of prior notice under Section 9.9 of the Existing Credit Agreement
for the resignation of Bank of America, N.A. as Funding Agent under the Existing
Credit Agreement and the Loan Documents (as defined therein) is waived and,
immediately upon the occurrence of the Restatement Effective Date, the
resignation of Bank of America, N.A. as Funding Agent and as Swingline Lender
shall be become effective, provided, that notwithstanding the provisions of such
Section 9.9, Bank of America shall continue to be an Issuing Lender as provided
herein; (ii) immediately upon the occurrence of the Restatement Effective Date,
(A) the Funding Agent shall no longer act as "collateral agent" as contemplated
by Section 9.1(c) of the Existing Credit Agreement and each Lender hereby
authorizes and instructs the Funding Agent to assign, transfer and deliver all
Collateral, including all Liens thereon and all rights, responsibilities and
obligations with respect thereto, to the Administrative Agent under the CCO
Guarantee and Collateral Agreement as reasonably requested by the Administrative
Agent, and (B) except as provided in the foregoing clause (A), the Funding Agent
shall be released from all duties, responsibilities, obligations and liabilities
with respect to the Collateral and any other matter relating to its acting or
having acted as "collateral agent"; and (iii) with respect to any matters
arising on or before the Restatement Effective Date or any matters relating to
the amendment and restatement of the Existing Credit Agreement, Bank of America,
N.A., in its capacity as Funding Agent under the Existing Credit Agreement and
the Loan Documents (as defined therein), shall be treated as an Agent for all
purposes of this Section 9 and shall be entitled to all of rights and benefits
of an Agent under this Section 9.

                  (b) Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.

                  9.2. Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys in fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in fact selected by it with reasonable care.

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                  9.3. Exculpatory Provisions. Neither any Agent nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

                  9.4. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to Holdings or the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.

                  9.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent has received notice from a Lender,
Holdings or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.

                  9.6. Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the

                                       74


Agents that it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any Loan Party or any affiliate
of a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

                  9.7. Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by Holdings or the
Borrower and without limiting the obligation of Holdings or the Borrower to do
so), ratably according to their respective Aggregate Exposure Percentages in
effect on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from such Agent's
gross negligence or willful misconduct. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.

                  9.8. Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.

                  9.9. Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(g) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative

                                       75


Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Loans. If no successor agent has accepted appointment as Administrative
Agent by the date that is 30 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time,
if any, as the Required Lenders appoint a successor agent as provided for above.
After any retiring Administrative Agent's resignation as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.

                  9.10. Documentation Agents and Syndication Agents. The
Documentation Agents and Syndication Agents shall have no duties or
responsibilities hereunder in their capacity as such.

                           SECTION 10. MISCELLANEOUS

                  10.1. Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) forgive the
principal amount or extend the final scheduled date of maturity of any Loan,
extend the scheduled date of or reduce the amount of any amortization payment in
respect of any Term Loan, reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of any Lender's Commitment, in each case
without the consent of each Lender directly affected thereby; (ii) eliminate or
reduce any voting rights under this Section 10.1 or reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of the
Collateral or release all or substantially all of the Subsidiary Guarantors from
their obligations under the CCO Guarantee and Collateral Agreement (in each case
except in connection with Dispositions consummated or approved in accordance
with the other terms of this Agreement), in each case without the written
consent of all Lenders; (iii) reduce the percentage specified in the definition
of Majority Facility Lenders with respect to any Facility without the written
consent of all Lenders under such Facility; (iv) amend, modify or waive any
provision of Section 9 without the written consent of the Administrative Agent;
(v) amend, modify or waive any provision of Section 2.4 or 2.5 without the
written consent of the Swingline Lender; or (vi) amend, modify or waive any
provision of Section 3 without the written consent of each affected Issuing
Lender. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan Parties,
the Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. It is understood
that, with respect to any voting required by this Section 10.1, all members of a
particular Specified Intracreditor Group shall vote as a single unit.

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                  In addition, notwithstanding the foregoing, this Agreement may
be amended with the written consent of the Administrative Agent, the Borrower
and the Lenders providing the relevant Replacement Term Loans (as defined below)
to permit the refinancing or modification of all outstanding Tranche B Term
Loans ("Refinanced Term Loans") with a replacement "B" term loan tranche
hereunder ("Replacement Term Loans"), provided that (a) the aggregate principal
amount of such Replacement Term Loans shall not exceed the aggregate principal
amount of such Refinanced Term Loans, (b) the Applicable Margin for such
Replacement Term Loans shall not be higher than the Applicable Margin for such
Refinanced Term Loans, (c) the weighted average life to maturity of such
Replacement Term Loans shall not be shorter than the weighted average life to
maturity of such Refinanced Term Loans at the time of such refinancing and (d)
all other terms applicable to such Replacement Term Loans shall be substantially
identical to, or less favorable to the Lenders providing such Replacement Term
Loans than, those applicable to such Refinanced Term Loans, except to the extent
necessary to provide for covenants and other terms applicable to any period
after the latest final maturity of the Term Loans in effect immediately prior to
such refinancing.

                  10.2. Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three (3) Business Days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of Holdings, the
Borrower and the Administrative Agent, and as set forth in an administrative
questionnaire delivered to the Administrative Agent in the case of the Lenders,
or to such other address as may be hereafter notified by the respective parties
hereto:

        Any Loan Party:                 c/o Charter Communications Holdings, LLC
                                        12405 Powerscourt Drive
                                        St. Louis, Missouri 63131
                                        Attention: Eloise E. Schmitz
                                        Telecopy: (314) 965-6492
                                        Telephone: (314) 543-2474

        The Administrative Agent:       JPMorgan Chase Bank
                                        1111 Fannin Street, 10th Floor
                                        Houston, Texas 77002
                                        Attention: Shadia Aminu
                                        Telecopy: (713) 750-2358
                                        Telephone: (713) 750-7933

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

                  10.3. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of any Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

                  10.4. Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered

                                       77


pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement and the making of the Loans and other extensions of
credit hereunder.

                  10.5. Payment of Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
or waiver or forbearance of, this Agreement and the other Loan Documents and any
other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including the reasonable fees and disbursements of one firm of counsel
to the Administrative Agent and filing and recording fees and expenses, (b) to
pay or reimburse each Lender and each Agent for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights,
privileges, powers or remedies under this Agreement, the other Loan Documents
and any such other documents, including the fees and disbursements of one firm
of counsel selected by the Administrative Agent, together with any special or
local counsel, to the Administrative Agent and not more than one other firm of
counsel to the Lenders, (c) to pay, indemnify, and hold each Lender and each
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, (d) if
any Event of Default shall have occurred, to pay or reimburse all reasonable
fees and expenses of a financial advisor engaged on behalf of, or for the
benefit of, the Agents and the Lenders accruing from and after the occurrence of
such Event of Default, (e) to pay, indemnify, and hold each Lender, each Agent,
their advisors and affiliates and their respective officers, directors,
trustees, employees, agents and controlling persons (each, an "Indemnitee")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of Holdings,
the Borrower any of its Subsidiaries or any of the Properties and the reasonable
fees and expenses of legal counsel in connection with claims, actions or
proceedings by any Indemnitee against any Loan Party under any Loan Document,
and (f) to pay, indemnify, and hold each Indemnitee harmless from and against
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the matters described in clauses (a) through (d) above,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding, and regardless of whether such claim,
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnitee, whether or not any
Indemnitee is a party thereto and whether or not the Restatement Effective Date
has occurred) and the reasonable fees and expenses of legal counsel in
connection with any such claim, litigation, investigation or proceeding (all the
foregoing in clauses (e) and (f), collectively, the "Indemnified Liabilities"),
provided, that the Borrower shall have no obligation hereunder to any Indemnitee
with respect to Indemnified Liabilities to the extent such Indemnified
Liabilities are found by a final non-appealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnitee. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries to so
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee. All amounts due under this Section 10.5 shall be payable not later
than 15 days after written demand therefor. Statements payable by the Borrower

                                       78


pursuant to this Section 10.5 shall be submitted to Eloise E. Schmitz (Telephone
No. (314) 543-2474) (Telecopy No. (314) 965-6492), at the address of the
Borrower set forth in Section 10.2, or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to the Administrative
Agent. The agreements in this Section 10.5 shall survive repayment of the Loans
and all other amounts payable hereunder.

                  10.6. Successors and Assigns; Participations and Assignments.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Lender that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section.

                  (b)(i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees (each, an
"Assignee") all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it) with the prior written consent of:

                  (A) the Borrower (such consent not to be unreasonably
         withheld), provided that no consent of the Borrower shall be required
         for an assignment to (I) a Lender, an affiliate of a Lender, an
         Approved Fund (as defined below), other than in the case of any
         assignment of a Revolving Commitment to an Assignee that is not already
         a Revolving Lender, or (II) if an Event of Default has occurred and is
         continuing, any other Person; and

                  (B) the Administrative Agent (such consent not to be
         unreasonably withheld), provided that no consent of the Administrative
         Agent shall be required for an assignment of all or any portion of a
         Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund.

                  (ii) Assignments shall be subject to the following additional
         conditions:

                  (A) except in the case of an assignment of the entire
         remaining amount of the assigning Lender's Commitments or Loans under
         any Facility, (x) the amount of the Commitments or Loans of the
         assigning Lender subject to each such assignment (determined as of the
         date the Assignment and Assumption with respect to such assignment is
         delivered to the Administrative Agent) shall not be less than
         $5,000,000, in the case of the Revolving Facility ($1,000,000 if the
         Assignee is a Lender, an affiliate of a Lender or an Approved Fund) or,
         $1,000,000 in the case of the Term Facilities ($250,000 if the Assignee
         is a Lender, an affiliate of a Lender or an Approved Fund) and (y) the
         Aggregate Exposure of such assigning Lender shall not fall below
         $3,000,000 in the case of the Revolving Facility ($1,000,000 if the
         Assignee is a Lender, an affiliate of a Lender or an Approved Fund) or
         $1,000,000 in the case of in the case of the Term Facilities ($250,000
         if the Assignee is a Lender, an affiliate of a Lender or an Approved
         Fund), unless, in each case, each of the Borrower and the
         Administrative Agent otherwise consent provided that (1) no such
         consent of the Borrower shall be required if an Event of Default has
         occurred and is continuing and (2) such amounts shall be aggregated in
         respect of each Lender and its affiliates or Approved Funds, if any;

                  (B) the parties to each assignment shall execute and deliver
         to the Administrative Agent an Assignment and Assumption, together with
         a processing and recordation fee of $3,500; and

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                  (C) the Assignee, if it shall not be a Lender, shall deliver
         to the Administrative Agent an administrative questionnaire.

                  For the purposes of this Section 10.6, "Approved Fund" means
any Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

                  (iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.16, 2.17, 2.18 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

                  (iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent, the Issuing
Lender and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary.

                  (v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an Assignee, the Assignee's
completed administrative questionnaire (unless the Assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.

                  (c)(i) Any Lender may, without the consent of the Borrower or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans owing to it); provided that (A) such Lender's obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected thereby
pursuant to the proviso to the second sentence of Section 10.1 and (2) directly
affects such

                                       80


Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.16, 2.17,
2.18 and 10.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.7(b) as though it were a Lender, provided such Participant shall be
subject to Section 10.7(a) as though it were a Lender.

                  (ii) A Participant shall not be entitled to receive any
greater payment under Section 2.16 or 2.17 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. Any Participant that is a Non-U.S.
Lender shall not be entitled to the benefits of Section 2.17 unless such
Participant complies with Section 2.17(d).

                  (d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or Assignee for such Lender
as a party hereto.

                  (e) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (d) above.

                  (f) Notwithstanding the foregoing, any Conduit Lender may
assign any or all of the Loans it may have funded hereunder to its designating
Lender without the consent of the Borrower or the Administrative Agent and
without regard to the limitations set forth in Section 10.6(b). Each of
Holdings, the Borrower, each Lender and the Administrative Agent hereby confirms
that it will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.

                  10.7. Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "Benefitted
Lender") shall receive any payment of all or part of the amounts owing to it
hereunder, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(e), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the amounts owing to such other Lender hereunder, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the amounts owing to each such other Lender hereunder, or shall
provide such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.

                  (b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to
Holdings or the Borrower, any such notice being expressly

                                       81


waived by Holdings and the Borrower to the extent permitted by applicable law,
upon any amount becoming due and payable by Holdings or the Borrower hereunder
(whether at the stated maturity, by acceleration or otherwise), to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of Holdings or the Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.

                  10.8. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.

                  10.9. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                  10.10. Integration. This Agreement and the other Loan
Documents represent the agreement of Holdings, the Borrower, the Agents and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by any Agent or any Lender relative
to the subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.

                  10.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                  10.12. Submission to Jurisdiction; Waivers. Each of Holdings
and the Borrower hereby irrevocably and unconditionally:

                  (a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States for the Southern District of New York,
and appellate courts from any thereof;

                  (b) consents that any such action or proceeding may be brought
         in such courts and waives any objection that it may now or hereafter
         have to the venue of any such action or proceeding in any such court or
         that such action or proceeding was brought in an inconvenient court and
         agrees not to plead or claim the same;

                  (c) agrees that service of process in any such action or
         proceeding may be effected by mailing a copy thereof by registered or
         certified mail (or any substantially similar form of mail),

                                       82


         postage prepaid, to Holdings or the Borrower, as the case may be at its
         address set forth in Section 10.2 or at such other address of which the
         Administrative Agent shall have been notified pursuant thereto;

                  (d) agrees that nothing herein shall affect the right to
         effect service of process in any other manner permitted by law or shall
         limit the right to sue in any other jurisdiction; and

                  (e) waives, to the maximum extent not prohibited by law, any
         right it may have to claim or recover in any legal action or proceeding
         referred to in this Section any special, exemplary, punitive or
         consequential damages.

                  10.13. Acknowledgments. Each of Holdings and the Borrower
hereby acknowledges that:

                  (a) it has been advised by counsel in the negotiation,
         execution and delivery of this Agreement and the other Loan Documents;

                  (b) neither any Agent nor any Lender has any fiduciary
         relationship with or duty to Holdings or the Borrower arising out of or
         in connection with this Agreement or any of the other Loan Documents,
         and the relationship between the Agents and Lenders, on one hand, and
         Holdings and the Borrower, on the other hand, in connection herewith or
         therewith is solely that of debtor and creditor; and

                  (c) no joint venture is created hereby or by the other Loan
         Documents or otherwise exists by virtue of the transactions
         contemplated hereby among the Agents and the Lenders or among Holdings
         the Borrower and the Agents and the Lenders.

                  10.14. Release of Guarantees and Liens. (a) Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 10.1) and is hereby required to promptly take any action requested by
the Borrower having the effect of releasing any Collateral or guarantee
obligations (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to in
accordance with Section 10.1 or (ii) under the circumstances described in
paragraph (b) below. Any such release of Collateral may be effected pursuant to
a Release or such other documentation as shall be reasonably acceptable to the
Administrative Agent.

                  (b) At such time as the Loans, the Reimbursement Obligations
and the other obligations under the Loan Documents (other than (i) obligations
under or in respect of Hedge Agreements and (ii) contingent indemnification
obligations) shall have been paid in full, the Commitments have been terminated
and no Letters of Credit shall be outstanding, the Collateral shall be released
from the Liens created by the Guarantee and Collateral Agreements, and the
Guarantee and Collateral Agreements and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent and
each Loan Party under the Guarantee and Collateral Agreements shall terminate,
all without delivery of any instrument or performance of any act by any Person.

                  10.15. Confidentiality. Each Agent and each Lender agrees to
keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to any Agent, any Lender or any
affiliate of any Lender or any Approved Fund, (b) to any Transferee or
prospective Transferee that agrees to comply with the provisions

                                       83


of this Section, (c) to its employees, directors, agents, attorneys, accountants
and other professional advisors or those of any of its affiliates who have a
need to know, (d) upon the request or demand of any Governmental Authority, (e)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f) if requested or
required to do so in connection with any litigation or similar proceeding, (g)
that has been publicly disclosed, (h) to any nationally recognized rating agency
that requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender, (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document, or
(j) to any creditor or direct or indirect contractual counterparty in swap
agreements or such creditor or contractual counterparty's professional advisor
(so long as such contractual counterparty or professional advisor to such
contractual counterparty agrees to be bound by the provisions of this Section
10.14).

                  10.16. WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE
AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                  10.17. Master Assignment Agreements. Each Lender identified as
an "Assignor" or an "Assignee" in any Master Assignment Agreement hereby agrees
to all of the terms and conditions of such Master Assignment Agreement
applicable to it and, by becoming a party to this Agreement, becomes a party to
such Master Assignment Agreement.

                  10.18. USA Patriot Act. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act"), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the Patriot Act.

                  10.19. Waivers and Consents under the Existing Credit
Agreement. Each Lender hereby waives the provisions of Section 2.7, Section 2.8
and Section 2.15(a), (b) and (c) of the Existing Credit Agreement. In connection
therewith, each Lender consents and agrees that (i) no prior notice shall be
required to be given to Bank of America, N.A. as Funding Agent, to (A) terminate
Revolving Commitments under the Existing Credit Agreement or (B) prepay Loans
under the Existing Credit Agreement so long as the Borrower pays all amounts
required to be paid under Section 2.18 thereof, and (ii) payments of principal,
fees and interest in respect of any Loans or Revolving Commitments and
reductions or terminations of any Revolving Commitments under the Existing
Credit Agreement shall not be required to be made by the Borrower pro rata or
applied by Bank of America, N.A., as Funding Agent, pro rata as set forth in
Section 2.15(a), (b) and (c) thereof.

                                       84


                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                                        CCO HOLDINGS, LLC

                                        By: /s/ Eloise Schmitz
                                           -----------------------------------
                                           Name: Eloise E. Schmitz
                                           Title: Vice President

                                        CHARTER COMMUNICATIONS OPERATING, LLC

                                        By: /s/ Eloise Schmitz
                                           -----------------------------------
                                           Name: Eloise E. Schmitz
                                           Title: Vice President

                                        JPMORGAN CHASE BANK, as Administrative
                                        Agent and as a Syndication Agent

                                        By: /s/ Edmond DeForest
                                           -----------------------------------
                                           Name: Edmond DeForest
                                           Title: Vice President

                                        BANK OF AMERICA, N.A., as a Syndication
                                        Agent

                                        By: /s/ F.A. Zagar
                                           -----------------------------------
                                           Name: F.A. Zagar
                                           Title: Managing Director

                                        CITICORP NORTH AMERICA, INC., as a
                                        Syndication Agent

                                        By: /s/ Maureen Marondy
                                           -----------------------------------
                                           Name: Maureen Marondy
                                           Title: Director



                                        CREDIT SUISSE FIRST BOSTON, acting
                                        through its Cayman Island Branch, as
                                        a Syndication Agent

                                        By: /s/ Bill O'Daly /s/ Doreen Welch
                                           ---------------------------------
                                           Name: Bill O'Daly    Doreen Welch
                                           Title: Director       Associate

                                        GENERAL ELECTRIC CAPITAL CORPORATION,
                                        as a Documentation Agent

                                        By: /s/ Steven J. Hede
                                           ---------------------------------
                                           Name: Steven J. Hede
                                           Title: Duly Authorized Signatory

                                        CREDIT LYONNAIS NEW YORK BRANCH, as a
                                        Documentation Agent

                                        By: /s/ Stephanie Ducroizet
                                           ---------------------------------
                                           Name: Stephanie Ducroizet
                                           Title: Vice President

                                        DEUTSCHE BANK SECURITIES, INC., as a
                                        Documentation Agent

                                        By: /s/ Sun Jan Yung
                                           ---------------------------------
                                           Name: Sun Jan Yung
                                           Title: Director

EX-10.32

                                                                   EXHIBIT 10.32

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

                      CHARTER COMMUNICATIONS OPERATING, LLC

                                       and

                 CHARTER COMMUNICATIONS OPERATING CAPITAL CORP.,

                                   as Issuers,

             EACH OF THE GUARANTORS FROM TIME TO TIME PARTY HERETO,

                                 as Guarantors,

                                       and

                             WELLS FARGO BANK, N.A.,

                                   as Trustee

                                     ------

                                    INDENTURE

                           Dated as of April 27, 2004

                      8% Senior Second Lien Notes due 2012
                    8-3/8% Senior Second Lien Notes due 2014

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



                                TABLE OF CONTENTS



                                                                                                                  Page
                                                                                                                  ----
                                                                                                               
                                                  ARTICLE 1

                                 DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.      Definitions..............................................................................        1
Section 1.02.      Other Definitions........................................................................       27
Section 1.03.      Incorporation by Reference of Trust Indenture Act........................................       28
Section 1.04.      Rules of Construction....................................................................       28

                                                  ARTICLE 2

                                                  THE NOTES

Section 2.01.      Form and Dating..........................................................................       29
Section 2.02.      Execution and Authentication.............................................................       30
Section 2.03.      Registrar and Paying Agent...............................................................       31
Section 2.04.      Paying Agent to Hold Money in Trust......................................................       31
Section 2.05.      Holder Lists.............................................................................       31
Section 2.06.      Transfer and Exchange....................................................................       31
Section 2.07.      Replacement Notes........................................................................       42
Section 2.08.      Outstanding Notes........................................................................       43
Section 2.09.      Treasury Notes...........................................................................       43
Section 2.10.      Temporary Notes..........................................................................       43
Section 2.11.      Cancellation.............................................................................       43
Section 2.12.      Defaulted Interest.......................................................................       44

                                                  ARTICLE 3

                                          REDEMPTION AND PREPAYMENT

Section 3.01.      Notices to Trustee.......................................................................       44
Section 3.02.      Selection of Notes to Be Redeemed........................................................       44
Section 3.03.      Notice of Redemption.....................................................................       45
Section 3.04.      Effect of Notice of Redemption...........................................................       45
Section 3.05.      Deposit of Redemption Price..............................................................       45
Section 3.06.      Notes Redeemed in Part...................................................................       46
Section 3.07.      Optional Redemption......................................................................       46
Section 3.08.      Mandatory Redemption.....................................................................       47
Section 3.09.      Offer to Purchase by Application of Excess Proceeds......................................       47

                                                  ARTICLE 4

                                                  COVENANTS

Section 4.01.      Payment of Notes.........................................................................       49


                                      -i-



                                                                                                                
Section 4.02.      Maintenance of Office or Agency..........................................................       49
Section 4.03.      Reports..................................................................................       50
Section 4.04.      Compliance Certificate...................................................................       50
Section 4.05.      Taxes....................................................................................       51
Section 4.06.      Stay, Extension and Usury Laws...........................................................       51
Section 4.07.      Restricted Payments......................................................................       51
Section 4.08.      Investments..............................................................................       54
Section 4.09.      Dividend and Other Payment Restrictions Affecting Subsidiaries...........................       54
Section 4.10.      Incurrence of Indebtedness and Issuance of Preferred Stock...............................       56
Section 4.11.      Limitation on Asset Sales................................................................       59
Section 4.12.      Sale and Leaseback Transactions..........................................................       60
Section 4.13.      Transactions with Affiliates.............................................................       60
Section 4.14.      Liens....................................................................................       61
Section 4.15.      Existence................................................................................       62
Section 4.16.      Repurchase at the Option of Holders upon a Change of Control.............................       62
Section 4.17.      Note Guarantees; Security................................................................       63
Section 4.18.      Payments for Consent.....................................................................       65
Section 4.19.      Suspension of Covenants..................................................................       65
Section 4.20.      Potential Future Registration Rights.....................................................       66

                                                       ARTICLE 5

                                                      SUCCESSORS

Section 5.01.      Merger, Consolidation, or Sale of Assets.................................................       66
Section 5.02.      Successor Corporation Substituted........................................................       67

                                                       ARTICLE 6

                                                 DEFAULTS AND REMEDIES

Section 6.01.      Events of Default........................................................................       67
Section 6.02.      Acceleration.............................................................................       69
Section 6.03.      Other Remedies...........................................................................       69
Section 6.04.      Waiver of Existing Defaults..............................................................       70
Section 6.05.      Control by Majority......................................................................       70
Section 6.06.      Limitation on Suits......................................................................       70
Section 6.07.      Rights of Holders to Receive Payment.....................................................       70
Section 6.08.      Collection Suit by Trustee...............................................................       71
Section 6.09.      Trustee May File Proofs of Claim.........................................................       71
Section 6.10.      Priorities...............................................................................       71
Section 6.11.      Undertaking for Costs....................................................................       72

                                                       ARTICLE 7

                                                        TRUSTEE

Section 7.01.      Duties of Trustee........................................................................       72
Section 7.02.      Rights of Trustee........................................................................       73
Section 7.03.      Individual Rights of Trustee.............................................................       74



                                      -ii-



                                                                                                                
Section 7.04.      Trustee's Disclaimer.....................................................................       74
Section 7.05.      Notice of Defaults.......................................................................       74
Section 7.06.      Reports by Trustee to Holders............................................................       74
Section 7.07.      Compensation and Indemnity...............................................................       74
Section 7.08.      Replacement of Trustee...................................................................       75
Section 7.09.      Successor Trustee by Merger, etc.........................................................       76
Section 7.10.      Eligibility; Disqualification............................................................       76
Section 7.11.      Preferential Collection of Claims Against the Issuers....................................       76
Section 7.12.      Authorization of the Trustee.............................................................       76

                                                       ARTICLE 8

                                       LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01.      Option to Effect Legal Defeasance or Covenant Defeasance.................................       77
Section 8.02.      Legal Defeasance and Discharge...........................................................       77
Section 8.03.      Covenant Defeasance......................................................................       78
Section 8.04.      Conditions to Legal or Covenant Defeasance...............................................       78
Section 8.05.      Deposited Money and Government Securities to Be Held in Trust; Other
                      Miscellaneous Provisions..............................................................       80
Section 8.06.      Repayment to Issuers.....................................................................       80
Section 8.07.      Reinstatement............................................................................       80

                                                       ARTICLE 9

                                           AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01.      Without Consent of Holders...............................................................       81
Section 9.02.      With Consent of Holders..................................................................       82
Section 9.03.      Compliance with Trust Indenture Act......................................................       83
Section 9.04.      Revocation and Effect of Consents........................................................       83
Section 9.05.      Notation on or Exchange of Notes.........................................................       83
Section 9.06.      Trustee to Sign Amendments, etc..........................................................       84

                                                      ARTICLE 10

                                           COLLATERAL AND SECURITY DOCUMENTS

Section 10.01.     Security Documents; Additional Collateral................................................       84
Section 10.02.     Opinions.................................................................................       84
Section 10.03.     Suits to Protect the Collateral..........................................................       84
Section 10.04.     Release of Collateral....................................................................       85
Section 10.05.     Sufficiency of Release...................................................................       86
Section 10.06.     Actions by the Trustee...................................................................       86



                                     -iii-



                                                                                                                
                                                      ARTICLE 11

                                                       GUARANTEE

Section 11.01.     Unconditional Guarantee..................................................................       86
Section 11.02.     Severability.............................................................................       87
Section 11.03.     Limitation of Guarantor's Liability......................................................       87
Section 11.04.     Release of Guarantor.....................................................................       87
Section 11.05.     Contribution.............................................................................       88
Section 11.06.     Waiver of Subrogation....................................................................       89
Section 11.07.     Execution of Note Guarantee..............................................................       89
Section 11.08.     Waiver of Stay, Extension or Usury Laws..................................................       90

                                                      ARTICLE 12

                                                     MISCELLANEOUS

Section 12.01.     Trust Indenture Act Controls.............................................................       90
Section 12.02.     Notices..................................................................................       90
Section 12.03.     Communication by Holders with Other Holders..............................................       91
Section 12.04.     Certificate and Opinion as to Conditions Precedent.......................................       91
Section 12.05.     Statements Required in Certificate or Opinion............................................       92
Section 12.06.     Rules by Trustee and Agents..............................................................       92
Section 12.07.     No Personal Liability of Directors, Officers, Employees, Managers, Members
                      and Stockholders......................................................................       92
Section 12.08.     Governing Law............................................................................       92
Section 12.09.     No Adverse Interpretation of Other Agreements............................................       92
Section 12.10.     Successors...............................................................................       93
Section 12.11.     Severability.............................................................................       93
Section 12.12.     Counterpart Originals....................................................................       93
Section 12.13.     Table of Contents, Headings, etc.........................................................       93

                                                      ARTICLE 13

                                              SATISFACTION AND DISCHARGE

Section 13.01.     Satisfaction and Discharge of Indenture..................................................       93
Section 13.02.     Application of Trust Money...............................................................       94



Exhibit A-1  -  Form of Eight Year Note
Exhibit A-2  -  Form of Ten Year Note
Exhibit B    -  Form of Certificate of Transfer
Exhibit C    -  Form of Certificate of Exchange
Exhibit D    -  Form of Certificate from Acquiring Institutional Accredited
                Investor
Exhibit E    -  Form of Guarantee
Exhibit F    -  Form of Security Agreement
Exhibit G    -  Form of Supplemental Indenture
Exhibit H    -  Form of Registration Rights Agreement

                                      -iv-



                           INDENTURE dated as of April 27, 2004 among Charter
Communications Operating, LLC, a Delaware limited liability company (as further
defined below, the "Company"), Charter Communications Operating Capital Corp., a
Delaware corporation (as further defined below, "Capital Corp" and together with
the Company, the "Issuers"), and Wells Fargo Bank, N.A., as trustee (the
"Trustee").

                           The Issuers and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders:

                                   ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

                           Section 1.01. Definitions.

                           "Acquired Debt" means, with respect to any specified
Person:

         (1)      Indebtedness of any other Person existing at the time such
         other Person is merged with or into or became a Subsidiary of such
         specified Person, whether or not such Indebtedness is incurred in
         connection with, or in contemplation of, such other Person merging with
         or into, or becoming a Subsidiary of, such specified Person; and

         (2)      Indebtedness secured by a Lien encumbering any asset acquired
         by such specified Person.

                           "Additional Eight Year Notes" means the Issuers'
series of 8% Senior Second Lien Notes due 2012 issued under this Indenture in
addition to the Original Eight Year Notes (other than any Eight Year Notes
issued in respect of Original Eight Year Notes pursuant to Section 2.06, 2.07,
2.10, 3.06, 3.09, 4.16 or 9.05).

                           "Additional Notes" means the Additional Eight Year
Notes and the Additional Ten Year Notes, collectively, or the Additional Eight
Year Notes or the Additional Ten Year Notes, as applicable.

                           "Additional Pari Passu First Priority Indebtedness"
means Pari Passu Indebtedness incurred in compliance with the terms of this
Indenture, including Section 4.14 (other than Indebtedness owed to a Subsidiary
or Affiliate of CCOH), which Indebtedness is secured by a first-priority Lien or
otherwise is pari passu, in terms of sharing of proceeds of Collateral, with
Indebtedness under the CCO Credit Facility, Related Obligations or other Pari
Passu First Priority Indebtedness of the Company or its Restricted Subsidiaries,
as such Indebtedness may be amended or refinanced from time to time.

                           "Additional Pari Passu Second Priority Indebtedness"
means Pari Passu Indebtedness incurred in compliance with the terms of this
Indenture, including Section 4.14 (other than Indebtedness owed to a Subsidiary
or Affiliate of CCOH), which Indebtedness is secured by a second-priority Lien
or otherwise is pari passu, in terms of sharing of proceeds of Collateral, with
Indebtedness under the Notes, as such Indebtedness may be amended or refinanced
from time to time.

                           "Additional Ten Year Notes" means the Issuers' series
of 8-3/8% Senior Second Lien Notes due 2014 issued under this Indenture in
addition to the Original Ten Year Notes (other than any Ten Year Notes issued in
respect of Original Ten Year Notes pursuant to Section 2.06, 2.07, 2.10, 3.06,
3.09, 4.16 or 9.05).



                           "Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control," as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the Voting Stock of a Person shall
be deemed to be control. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.

                           "Agent" means any Registrar or Paying Agent.

                           "Applicable Procedures" means, with respect to any
transfer or transaction involving a Global Note or beneficial interest therein,
the rules and procedures of the Depositary, Euroclear and Clearstream, in each
case to the extent applicable to such transaction and as in effect from time to
time.

                  "Asset Acquisition" means:

         (a)      an Investment by the Company or any of its Restricted
         Subsidiaries in any other Person pursuant to which such Person shall
         become a Restricted Subsidiary of the Company or any of its Restricted
         Subsidiaries or shall be merged with or into the Company or any of its
         Restricted Subsidiaries, or

         (b)      the acquisition by the Company or any of its Restricted
         Subsidiaries of the assets of any Person which constitute all or
         substantially all of the assets of such Person, any division or line of
         business of such Person or any other properties or assets of such
         Person other than in the ordinary course of business.

                           "Asset Sale" means:

         (1)      the sale, lease, conveyance or other disposition of any assets
         or rights, other than sales of inventory in the ordinary course of the
         Cable Related Business consistent with applicable past practices;
         provided, however, that the sale, conveyance or other disposition of
         all or substantially all of the assets of the Company and its
         Subsidiaries, taken as a whole, shall be governed by Section 4.16
         and/or Section 5.01 and not by the provisions of Section 4.11; and

         (2)      the issuance of Equity Interests by any Restricted Subsidiary
         of the Company or the sale of Equity Interests in any Restricted
         Subsidiary of the Company.

Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:

         (1)      any single transaction or series of related transactions that:

                  (a)      involves assets having a fair market value of less
                  than $100 million; or

                  (b)      results in net proceeds to the Company and its
                  Restricted Subsidiaries of less than $100 million;

         (2)      a transfer of assets between or among the Company and/or its
                  Restricted Subsidiaries;

                                      -2-


         (3)      an issuance of Equity Interests by a Restricted Subsidiary of
         the Company to the Company or to another Wholly Owned Restricted
         Subsidiary of the Company;

         (4)      a Restricted Payment that is permitted by Section 4.07, a
         Restricted Investment that is permitted by Section 4.08 or a Permitted
         Investment;

         (5)      the incurrence of Liens not prohibited by this Indenture and
         the disposition of assets related to such Liens by the secured party
         pursuant to a foreclosure; and

         (6)      any disposition of cash or Cash Equivalents.

                           "Attributable Debt" in respect of a sale and
leaseback transaction means, at the time of determination, the present value of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction, including any
period for which such lease has been extended or may, at the option of the
lessee, be extended. Such present value shall be calculated using a discount
rate equal to the rate of interest implicit in such transaction, determined in
accordance with GAAP.

                           "Authority" means any national, federal, state,
municipal or local government or quasi-governmental agency or authority.

                           "Bank Agents" means the Persons acting as the duly
authorized representatives of the Lenders pursuant to any of the Credit
Facilities then outstanding under clause (1) of the definition of "Permitted
Debt."

                           "Bankruptcy Law" means Title 11, U.S. Code or any
federal or state law of any jurisdiction relating to bankruptcy, insolvency,
winding up, liquidation, reorganization or relief of debtors.

                           "Beneficial Owner" has the meaning assigned to such
term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in
calculating the beneficial ownership of any particular "person" (as such term is
used in Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to
have beneficial ownership of all securities that such "person" has the right to
acquire, whether such right is currently exercisable or is exercisable only upon
the occurrence of a subsequent condition.

                           "Board of Directors" means the board of directors or
comparable governing body of CCI or, if so specified, the Company, in either
case, as constituted as of the date of any determination required to be made, or
action required to be taken, pursuant to this Indenture.

                           "Business Day" means any day other than a Legal
Holiday.

                           "Cable Related Business" means the business of owning
cable television systems and businesses ancillary, complementary and related
thereto.

                           "Capital Corp" means Charter Communications Operating
Capital Corp., a Delaware corporation, and any successor Person thereto.

                           "Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a balance
sheet in accordance with GAAP.

                                      -3-


                  "Capital Stock" means:

         (1)      in the case of a corporation, corporate stock;

         (2)      in the case of an association or business entity, any and all
         shares, interests, participations, rights or other equivalents (however
         designated) of corporate stock;

         (3)      in the case of a partnership or limited liability company,
         partnership or membership interests (whether general or limited); and

         (4)      any other interest (other than any debt obligation) or
         participation that confers on a Person the right to receive a share of
         the profits and losses of, or distributions of assets of, the issuing
         Person.

                           "Capital Stock Sale Proceeds" means the aggregate net
cash proceeds (including the fair market value of the non-cash proceeds, as
determined by an independent appraisal firm) received by the Company or its
Restricted Subsidiaries from and after the Issue Date, in each case:

         (x)      as a contribution to the common equity capital or from the
         issue or sale of Equity Interests (other than Disqualified Stock and
         other than issuances or sales to a Subsidiary of the Company) of the
         Company after the Issue Date; or

         (y)      from the issue or sale of convertible or exchangeable
         Disqualified Stock or convertible or exchangeable debt securities of
         the Company that have been converted into or exchanged for such Equity
         Interests (other than Equity Interests (or Disqualified Stock or debt
         securities) sold to a Subsidiary of the Company).

                           "Cash Equivalents" means:

         (1)      United States dollars;

         (2)      securities issued or directly and fully guaranteed or insured
         by the United States government or any agency or instrumentality
         thereof (provided that the full faith and credit of the United States
         is pledged in support thereof) having maturities of not more than
         twelve months from the date of acquisition;

         (3)      certificates of deposit and eurodollar time deposits with
         maturities of twelve months or less from the date of acquisition,
         bankers' acceptances with maturities not exceeding six months and
         overnight bank deposits, in each case, with any domestic commercial
         bank having combined capital and surplus in excess of $500 million and
         a Thomson BankWatch Rating at the time of acquisition of "B" or better;

         (4)      repurchase obligations with a term of not more than seven days
         for underlying securities of the types described in clauses (2) and (3)
         above entered into with any financial institution meeting the
         qualifications specified in clause (3) above;

         (5)      commercial paper having a rating at the time of acquisition of
         at least "P-1" from Moody's or at least "A-1" from S&P and in each case
         maturing within twelve months after the date of acquisition;

                                      -4-


         (6)      corporate debt obligations maturing within twelve months after
         the date of acquisition thereof, rated at the time of acquisition at
         least "Aaa" or "P-1" by Moody's or "AAA" or "A-1" by S&P;

         (7)      auction-rate Preferred Stocks of any corporation maturing not
         later than 45 days after the date of acquisition thereof, rated at the
         time of acquisition at least "Aaa" by Moody's or "AAA" by S&P;

         (8)      securities issued by any state, commonwealth or territory of
         the United States, or by any political subdivision or taxing authority
         thereof, maturing not later than six months after the date of
         acquisition thereof, rated at the time of acquisition at least "A" by
         Moody's or S&P; and

         (9)      money market or mutual funds at least 90% of the assets of
         which constitute Cash Equivalents of the kinds described in clauses (1)
         through (8) of this definition.

                           "Casualty" means, with respect to any Collateral, any
loss of, damage to or destruction of all or any material part of such
Collateral.

                           "CCH I" means CCH I, LLC, a Delaware limited
liability company, and any successor Person thereto.

                           "CCH II" means CCH II, LLC, a Delaware limited
liability company, and any successor Person thereto.

                           "CCH II Indentures" means, collectively, the
indenture entered into by CCH II and CCH II Capital Corp., a Delaware
corporation, with respect to their 10.25% Senior Notes due 2010 and any
indentures, note purchase agreements or similar documents entered into by CCH II
and CCH II Capital Corp. for the purpose of incurring Indebtedness in exchange
for, or the proceeds of which are used to refinance, any of the Indebtedness
described above, in each case, together with all instruments and other
agreements entered into by CCH II and CCH II Capital Corp. in connection
therewith, as any of the foregoing may be refinanced, replaced, amended,
supplemented or otherwise modified from time to time.

                           "CCI" means Charter Communications, Inc., a Delaware
corporation, and any successor Person thereto.

                           "CCI Indentures" means, collectively, the indentures
entered into by CCI with respect to its 5.75% Convertible Senior Notes due 2005
and its 4.75% Convertible Senior Notes due 2006 and any indentures, note
purchase agreements or similar documents entered into by CCI after the Issue
Date for the purpose of incurring Indebtedness in exchange for, or the proceeds
of which are used to refinance, any of the Indebtedness described above, in each
case, together with all instruments and other agreements entered into by CCI in
connection therewith, as any of the foregoing may be refinanced, replaced,
amended, supplemented or otherwise modified from time to time.

                           "CCO Credit Facility" means the Amended and Restated
Credit Agreement, dated as of April 27, 2004, by and among the Company, CCOH,
the Lenders from time to time parties thereto, JPMorgan Chase Bank, as
Administrative Agent, JPMorgan Chase Bank, Bank of America, N.A., Citigroup
North America, Inc. and Credit Suisse First Boston, acting through its Cayman
Islands Branch, as Syndication Agents, and General Electric Capital Corporation,
Credit Lyonnais New York Branch and Deutsche Bank Securities Inc., as
Documentation Agents, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.

                                      -5-


                           "CCOH" means CCO Holdings, LLC, a Delaware limited
liability company, and any successor Person thereto.

                           "CCOH Indentures" means, collectively, the indenture
entered into by CCOH and CCO Holdings Capital Corp., a Delaware corporation,
with respect to their 8 3/4% Senior Notes due 2013 and any indentures, note
purchase agreements or similar documents entered into by CCOH and CCO Holdings
Capital Corp. for the purpose of incurring Indebtedness in exchange for, or the
proceeds of which are used to refinance, any of the Indebtedness described
above, in each case, together with all instruments and other agreements entered
into by CCOH and CCO Holdings Capital Corp. in connection therewith, as any of
the foregoing may be refinanced, replaced, amended, supplemented or otherwise
modified from time to time.

                           "Change of Control" means the occurrence of any of
the following:

         (1)      the sale, transfer, conveyance or other disposition (other
         than by way of merger or consolidation), in one or a series of related
         transactions, of all or substantially all of the assets of the Company
         and its Subsidiaries, taken as a whole, or of a Parent and its
         Subsidiaries, taken as a whole, to any "person" (as such term is used
         in Section 13(d)(3) of the Exchange Act) other than Paul G. Allen or a
         Related Party;

         (2)      the adoption of a plan relating to the liquidation or
         dissolution of the Company or a Parent (except the liquidation of any
         Parent into any other Parent);

         (3)      the consummation of any transaction, including, without
         limitation, any merger or consolidation, the result of which is that
         any "person" (as defined above) other than Paul G. Allen or any of the
         Related Parties becomes the Beneficial Owner, directly or indirectly,
         of more than 35% of the Voting Stock of the Company or a Parent,
         measured by voting power rather than the number of shares, unless Paul
         G. Allen or a Related Party Beneficially Owns, directly or indirectly,
         a greater percentage of Voting Stock of the Company or such Parent, as
         the case may be, measured by voting power rather than the number of
         shares, than such person;

         (4)      after the Issue Date, the first day on which a majority of the
         members of the Board of Directors of CCI are not Continuing Directors;

         (5)      the Company or a Parent consolidates with, or merges with or
         into, any Person, or any Person consolidates with, or merges with or
         into, the Company or a Parent, in any such event pursuant to a
         transaction in which any of the outstanding Voting Stock of the Company
         or such Parent is converted into or exchanged for cash, securities or
         other property, other than any such transaction where the Voting Stock
         of the Company or such Parent outstanding immediately prior to such
         transaction is converted into or exchanged for Voting Stock (other than
         Disqualified Stock) of the surviving or transferee Person constituting
         a majority of the outstanding shares of such Voting Stock of such
         surviving or transferee Person immediately after giving effect to such
         issuance; or

         (6)      (i) Charter Communications Holding Company, LLC shall cease to
         own beneficially, directly or indirectly, 100% of the Capital Stock of
         Charter Holdings or (ii) Charter Holdings shall cease to own
         beneficially, directly or indirectly, 100% of the Capital Stock of the
         Company.

                           "Charter Holdings" means Charter Communications
Holdings, LLC, a Delaware limited liability company, and any successor Person
thereto.

                                      -6-


                           "Charter Holdings Indentures" means, collectively,
(a) the indentures entered into by Charter Holdings and Charter Communications
Holdings Capital Corporation in connection with the issuance of each of the
8.250% Senior Notes Due 2007 dated March 1999, 8.625% Senior Notes Due 2009
dated March 1999, 9.920% Senior Discount Notes Due 2011 dated March 1999,
10.000% Senior Notes Due 2009 dated January 2000, 10.250% Senior Notes Due 2010
dated January 2000, 11.750% Senior Discount Notes Due 2010 dated January 2000,
10.750% Senior Notes Due 2009 dated January 2001, 11.125% Senior Notes Due 2011
dated January 2001, 13.500% Senior Discount Notes Due 2011 dated January 2001,
9.625% Senior Notes Due 2009 dated May 2001, 10.000% Senior Notes Due 2011 dated
May 2001, 11.750% Senior Discount Notes Due 2011 dated May 2001, 9.625% Senior
Notes Due 2009 dated January 2002, 10.000% Senior Notes Due 2011 dated January
2002 and 12.125% Senior Discount Notes Due 2012 dated January 2002, and (b) any
indentures, note purchase agreements or similar documents entered into by
Charter Holdings and/or Charter Communications Holdings Capital Corporation
after the Issue Date for the purpose of incurring Indebtedness in exchange for,
or proceeds of which are used to refinance, any of the Indebtedness described in
the foregoing clause (a), in each case, together with all instruments and other
agreements entered into by Charter Holdings or Charter Communications Holdings
Capital Corporation in connection therewith, as the same may be refinanced,
replaced, amended, supplemented or otherwise modified from time to time.

                           "Charter Refinancing Indebtedness" means any
Indebtedness of a Charter Refinancing Subsidiary issued in exchange for, or the
net proceeds of which are used within 90 days after the date of issuance
thereof, to extend, refinance, renew, replace, defease, purchase, acquire or
refund (including successive extensions, refinancings, renewals, replacements,
defeasances, purchases, acquisitions or refunds) Indebtedness initially incurred
under any one or more of the Charter Holdings Indentures, the CCI Indentures,
the CCH II Indentures, the CCOH Indentures or this Indenture; provided, however,
that:

         (1)      the principal amount (or accreted value, if applicable) of
         such Charter Refinancing Indebtedness does not exceed the principal
         amount of (or accreted value, if applicable) plus accrued interest and
         premium, if any, on the Indebtedness so extended, refinanced, renewed,
         replaced, defeased, purchased, acquired or refunded (plus the amount of
         reasonable fees, commissions and expenses incurred in connection
         therewith); and

         (2)      such Charter Refinancing Indebtedness has a final maturity
         date later than the final maturity date of, and has a Weighted Average
         Life to Maturity equal to or greater than the Weighted Average Life to
         Maturity of, the Indebtedness being extended, refinanced, renewed,
         replaced, defeased or refunded.

                           "Charter Refinancing Subsidiary" means CCH I, CCH II
or any other directly or indirectly wholly owned Subsidiary (and any related
corporate co-obligor if such Subsidiary is a limited liability company or other
association not taxed as a corporation) of CCI or Charter Communications Holding
Company, LLC which is or becomes a Parent.

                           "Clearstream" means Clearstream Banking, societe
anonyme (formerly Cedelbank).

                           "Collateral" means the assets that from time to time
secure the Notes.

                           "Commission" or "SEC" means the Securities and
Exchange Commission.

                           "Company" means Charter Communications Operating,
LLC, a Delaware limited liability company, and any successor Person thereto.

                                      -7-


                           "Condemnation" means any taking of the Collateral or
any material part thereof, in or by condemnation, expropriation or similar
proceedings, eminent domain proceedings, seizure or forfeiture, pursuant to any
law, general or special, or by reason of the temporary requisition of the use or
occupancy of the Collateral, or any part thereof, by any Authority.

                           "Consolidated EBITDA" means, with respect to any
Person, for any period, the net income of such Person and its Restricted
Subsidiaries for such period plus, to the extent such amount was deducted in
calculating such net income:

         (1)      Consolidated Interest Expense;

         (2)      income taxes;

         (3)      depreciation expense;

         (4)      amortization expense;

         (5)      all other non-cash items, extraordinary items, nonrecurring
         and unusual items and the cumulative effects of changes in accounting
         principles reducing such net income, less all non-cash items,
         extraordinary items, nonrecurring and unusual items and cumulative
         effects of changes in accounting principles increasing such net income,
         all as determined on a consolidated basis for such Person and its
         Restricted Subsidiaries in conformity with GAAP, as in effect at
         December 31, 2002;

         (6)      amounts actually paid during such period pursuant to a
         deferred compensation plan; and

         (7)      for purposes of Section 4.10 only, Management Fees;

provided, however, that Consolidated EBITDA shall not include:

         (x)      the net income (or net loss) of any Person that is not a
         Restricted Subsidiary ("Other Person"), except

                  (i)      with respect to net income, to the extent of the
         amount of dividends or other distributions actually paid to such Person
         or any of its Restricted Subsidiaries by such Other Person during such
         period; and

                  (ii)     with respect to net losses, to the extent of the
         amount of investments made by such Person or any Restricted Subsidiary
         of such Person in such Other Person during such period;

         (y)      solely for the purposes of calculating the amount of
         Restricted Payments that may be made pursuant to clause (3) of the
         second paragraph of Section 4.07 (and in such case, except to the
         extent includable pursuant to clause (x) above), the net income (or net
         loss) of any Other Person accrued prior to the date it becomes a
         Restricted Subsidiary or is merged into or consolidated with such
         Person or any Restricted Subsidiaries or all or substantially all of
         the property and assets of such Other Person are acquired by such
         Person or any of its Restricted Subsidiaries; and

         (z)      the net income of any Restricted Subsidiary of the Company to
         the extent that the declaration or payment of dividends or similar
         distributions by such Restricted Subsidiary of such net income is not
         at the time permitted by the operation of the terms of such Restricted
         Subsidiary's

                                      -8-


         charter or any agreement, instrument, judgment, decree, order, statute,
         rule or governmental regulation applicable to such Restricted
         Subsidiary (other than any agreement or instrument evidencing
         Indebtedness or Preferred Stock (i) outstanding on the Issue Date or
         (ii) incurred or issued thereafter in compliance with Section 4.10;
         provided, however, that (a) the terms of any such agreement or
         instrument restricting the declaration and payment of dividends or
         similar distributions apply only in the event of a default with respect
         to a financial covenant or a covenant relating to payment, beyond any
         applicable period of grace, contained in such agreement or instrument,
         (b) such terms are determined by such Person to be customary in
         comparable financings and (c) such restrictions are determined by the
         Company not to materially affect the Issuers' ability to make principal
         or interest payments on the Notes when due).

                           "Consolidated Indebtedness" means, with respect to
any Person as of any date of determination, the sum, without duplication, of:

         (1)      the total amount of outstanding Indebtedness of such Person
         and its Restricted Subsidiaries, plus

         (2)      the total amount of Indebtedness of any other Person that has
         been Guaranteed by the referent Person or one or more of its Restricted
         Subsidiaries, plus

         (3)      the aggregate liquidation value of all Disqualified Stock of
         such Person and all Preferred Stock of Restricted Subsidiaries of such
         Person, in each case, determined on a consolidated basis in accordance
         with GAAP.

                           "Consolidated Interest Expense" means, with respect
to any Person for any period, without duplication, the sum of:

         (1)      the consolidated interest expense of such Person and its
         Restricted Subsidiaries for such period, whether paid or accrued
         (including, without limitation, amortization or original issue
         discount, non-cash interest payments, the interest component of any
         deferred payment obligations, the interest component of all payments
         associated with Capital Lease Obligations, commissions, discounts and
         other fees and charges incurred in respect of letter of credit or
         bankers' acceptance financings, and net payments (if any) pursuant to
         Hedging Obligations);

         (2)      the consolidated interest expense of such Person and its
         Restricted Subsidiaries that was capitalized during such period; and

         (3)      any interest expense on Indebtedness of another Person that is
         guaranteed by such Person or one of its Restricted Subsidiaries or
         secured by a Lien on assets of such Person or one of its Restricted
         Subsidiaries (whether or not such Guarantee or Lien is called upon);

excluding, however, any amount of such interest of any Restricted Subsidiary of
the referent Person if the net income of such Restricted Subsidiary is excluded
in the calculation of Consolidated EBITDA pursuant to clause (z) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Consolidated EBITDA
pursuant to clause (z) of the definition thereof), in each case, on a
consolidated basis and in accordance with GAAP.

                           "Continuing Directors" means, as of any date of
determination, any member of the Board of Directors of CCI who:

         (1)      was a member of the Board of Directors of CCI on the Issue
         Date; or

                                      -9-


         (2)      was nominated for election or elected to the Board of
         Directors of CCI with the approval of a majority of the Continuing
         Directors who were members of such Board of Directors at the time of
         such nomination or election, or whose election or appointment was
         previously so approved.

                           "Corporate Trust Office of the Trustee" shall be at
the address of the Trustee specified in Section 12.02 or such other address as
to which the Trustee may give notice to the Issuers.

                           "Credit Facilities" means, with respect to the
Company and/or its Restricted Subsidiaries, one or more debt facilities or
commercial paper facilities (including, without limitation, the CCO Credit
Facility), in each case with banks or other lenders (other than a Parent of the
Issuers) providing for revolving credit loans, term loans, debt securities,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.

                           "Default" means any event that is, or with the
passage of time or the giving of notice or both would be, an Event of Default.

                           "Definitive Note" means a certificated Note
registered in the name of the Holder thereof and issued in accordance with
Section 2.06, substantially in the form of Exhibit A-1 hereto in the case of
Eight Year Notes and Exhibit A-2 in the case of Ten Year Notes, except that such
Note shall not bear the Global Note Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Note" attached thereto.

                           "Depositary" means, with respect to the Global Notes,
the Person specified in Section 2.03 as the Depositary with respect to the
Notes, and any and all successors thereto appointed as depositary hereunder and
having become such pursuant to the applicable provision of this Indenture.

                           "Disposition" means, with respect to any Person, any
merger, consolidation or other business combination involving such Person
(whether or not such Person is the surviving Person) or the sale, assignment,
transfer, lease or conveyance, or other disposition, of all or substantially all
of such Person's assets or Capital Stock.

                           "Disqualified Stock" means any Capital Stock that, by
its terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder thereof) or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder thereof, in whole or in part, on or prior to the date that is 91 days
after the date on which the Notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
shall not constitute Disqualified Stock if the terms of such Capital Stock
provide that the Company may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
Section 4.07.

                           "Eight Year Note" or "Eight Year Notes" means the
Initial Eight Year Notes, any Additional Eight Year Notes and the Exchange Eight
Year Notes.

                           "Equity Interests" means Capital Stock and all
warrants, options or other rights to acquire Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for, Capital Stock).

                                      -10-


                           "Equity Offering" means any private or underwritten
public offering of Qualified Capital Stock of the Company or a Parent of which
the gross proceeds to the Company or received by the Company as a capital
contribution from such Parent (directly or indirectly), as the case may be, are
at least $25 million.

                           "Euroclear" means Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear system.

                           "Exchange Act" means the Securities Exchange Act of
1934, as amended, or any successor statute or statutes thereto.

                           "Exchange Eight Year Notes" means the Issuers' series
of 8% Senior Second Lien Notes due 2012, containing terms substantially
identical to the Initial Eight Year Notes or any Initial Additional Eight Year
Notes (except that (i) such Exchange Eight Year Notes shall not contain terms
with respect to transfer restrictions and shall be registered under the
Securities Act and (ii) certain provisions relating to an increase in the stated
rate of interest thereon shall be eliminated), that are issued and exchanged for
(a) the Initial Eight Year Notes, as provided for in any Registration Rights
Agreement relating to such Initial Eight Year Notes and this Indenture, or (b)
such Initial Additional Eight Year Notes, as may be provided in any Registration
Rights Agreement relating to such Initial Additional Eight Year Notes and this
Indenture (including any amendment or supplement thereto).

                           "Exchange Notes" means the Exchange Eight Year Notes
and the Exchange Ten Year Notes, collectively, or the Exchange Eight Year Notes
or the Exchange Ten Year Notes, as applicable.

                           "Exchange Ten Year Notes" means the Issuers' series
of 8-3/8% Senior Second Lien Notes due 2014, containing terms substantially
identical to the Initial Ten Year Notes or any Initial Additional Ten Year Notes
(except that (i) such Exchange Ten Year Notes shall not contain terms with
respect to transfer restrictions and shall be registered under the Securities
Act and (ii) certain provisions relating to an increase in the stated rate of
interest thereon shall be eliminated), that are issued and exchanged for (a) the
Initial Ten Year Notes, as provided for in any Registration Rights Agreement
relating to such Initial Ten Year Notes and this Indenture, or (b) such Initial
Additional Ten Year Notes, as may be provided in any Registration Rights
Agreement relating to such Initial Additional Ten Year Notes and this Indenture
(including any amendment or supplement thereto).

                           "Exchange Offer" means an offer to exchange Initial
Notes or Initial Additional Notes, if any, of a particular series for Exchange
Notes of such series pursuant to a Registration Rights Agreement.

                           "Exchange Offer Registration Statement" means a
registration statement relating to an Exchange Offer as may be provided in any
Registration Rights Agreement.

                           "Existing Indebtedness" means Indebtedness of the
Company and its Restricted Subsidiaries in existence on the Issue Date, until
such amounts are repaid.

                           "GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the Issue Date.

                                      -11-


                           "Global Note Legend" means the legend set forth in
Section 2.06(g)(ii), which is required to be placed on all Global Notes issued
under this Indenture.

                           "Global Notes" means, individually and collectively,
each of the Restricted Global Notes and the Unrestricted Global Notes.

                           "Government Securities" means direct obligations of,
or obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.

                           "Guarantee" or "guarantee" means a guarantee other
than by endorsement of negotiable instruments for collection in the ordinary
course of business, direct or indirect, in any manner including, without
limitation, by way of a pledge of assets or through letters of credit or
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness, measured as the lesser of the aggregate outstanding amount of the
Indebtedness so guaranteed and the face amount of the guarantee.

                           "Guarantee and Pledge Availability Period" means any
period during which (a) Charter Holdings satisfies the Leverage Condition or (b)
the Leverage Condition is no longer applicable (whether as a result of payment
in full, defeasance or otherwise, but not as a result of an exception not
requiring satisfaction of the Leverage Condition) to the ability of any
Subsidiary of the Issuers to issue a Note Guarantee or pledge collateral to
secure the Notes.

                           "Guarantee and Pledge Date" means the fifth Business
Day after the first occurrence of the Guarantee and Pledge Availability Period
after the Issue Date.

                           "Guarantor" means:

         (1)      each Restricted Subsidiary that executes and delivers a Note
         Guarantee pursuant to Section 4.17, and

         (2)      each other Person that otherwise executes and delivers a Note
         Guarantee (including CCOH),

in each case, until such time as such Person is released from its Note Guarantee
in accordance with the provisions of this Indenture.

                           "Hedging Obligations" means, with respect to any
Person, the obligations of such Person under:

         (1)      interest rate swap agreements, interest rate cap agreements
         and interest rate collar agreements;

         (2)      interest rate option agreements, foreign currency exchange
         agreements, foreign currency swap agreements; and

         (3)      other agreements or arrangements designed to protect such
         Person against fluctuations in interest and currency exchange rates.

                           "Helicon Preferred Stock" means the preferred limited
liability company interest of Charter-Helicon LLC with an aggregate liquidation
value of $25 million.

                                      -12-


                           "Holder" means a record-holder of the Notes.

                           "Indebtedness" means, with respect to any specified
Person, any indebtedness of such Person, whether or not contingent:

         (1)      in respect of borrowed money;

         (2) evidenced by bonds, notes, debentures or similar instruments or
         letters of credit (or reimbursement agreements in respect thereof);

         (3) in respect of banker's acceptances;

         (4) representing Capital Lease Obligations;

         (5) in respect of the balance deferred and unpaid of the purchase price
         of any property, except any such balance that constitutes an accrued
         expense or trade payable; or

         (6) representing the notional amount of any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the guarantee
by such Person of any indebtedness of any other Person.

                           The amount of any Indebtedness outstanding as of any
date shall be:

         (1)      the accreted value thereof, in the case of any Indebtedness
         issued with original issue discount; and

                  (2)      the principal amount thereof, together with any
         interest thereon that is more than 30 days past due, in the case of any
         other Indebtedness.

                           "Indenture" means this Indenture, as amended or
supplemented from time to time.

                           "Indirect Participant" means a Person who holds a
beneficial interest in a Global Note through a Participant.

                           "Initial Additional Eight Year Notes" means
Additional Eight Year Notes issued in an offering not registered under the
Securities Act.

                           "Initial Additional Notes" means Initial Additional
Eight Year Notes and Initial Additional Ten Year Notes, collectively, or the
Initial Additional Eight Year Notes or the Initial Additional Ten Year Notes, as
applicable.

                           "Initial Additional Ten Year Notes" means Additional
Ten Year Notes issued in an offering not registered under the Securities Act.

                                      -13-


                           "Initial Eight Year Notes" means the Issuers' series
of 8% Senior Second Lien Notes due 2012, issued on the Issue Date (and any Eight
Year Notes issued in respect thereof pursuant to Section 2.06, 2.07, 2.10, 3.06,
3.09, 4.16 or 9.05).

                           "Initial Notes" means the Initial Eight Year Notes
and the Initial Ten Year Notes, collectively, or the Initial Eight Year Notes or
the Initial Ten Year Notes, as applicable.

                           "Initial Ten Year Notes" means the Issuers' series of
8-3/8% Senior Second Lien Notes due 2014, issued on the Issue Date (and any Ten
Year Notes issued in respect thereof pursuant to Section 2.06, 2.07, 2.10, 3.06,
3.09, 4.16 or 9.05).

                           "Insolvency Proceeding" means any proceeding in
respect of bankruptcy, insolvency, winding up, receivership, dissolution or
assignment for the benefit of creditors, in each of the foregoing events whether
under a Bankruptcy Law or otherwise.

                           "Institutional Accredited Investor" means an
institution that is an "accredited investor" as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act that is not also a QIB.

                           "Investment Grade Rating" means a rating equal to or
higher than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by
S&P.

                           "Investments" means, with respect to any Person, all
investments by such Person in other Persons, including Affiliates, in the forms
of direct or indirect loans (including guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business) and purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP.

                           "Issue Date" means April 27, 2004.

                           "Issuers" has the meaning assigned to it in the
preamble to this Indenture.

                           "Legal Holiday" means a Saturday, a Sunday or a day
on which banking institutions in The City of New York or at a place of payment
are authorized by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on such payment for the intervening period.

                           "Lenders" means the lenders from time to time under
the CCO Credit Facility.

                           "Letter of Transmittal" means the letter of
transmittal to be prepared by the Issuers and sent to all Holders of the Initial
Notes or any Initial Additional Notes for use by such Holders in connection with
any Exchange Offer.

                           "Leverage Condition" means the condition in the
Charter Holdings Indentures that Charter Holdings be able to incur an additional
$1.00 of Indebtedness (as defined in the Charter Holdings Indentures) under the
Leverage Ratio (as defined in the Charter Holdings Indentures) test set forth in
the first paragraph of Section 4.10 of each of the Charter Holdings Indentures
as in effect on the Issue Date, calculated in accordance with the terms of the
Charter Holdings Indentures and Charter Holdings' past practice (including, if
applicable, review by Charter Holdings' independent accountants) for

                                      -14-


satisfying such condition, which in any event shall be deemed satisfied if, and
at any time, such condition is deemed satisfied for purposes of any CCO Credit
Facility.

                           "Leverage Ratio" means, as to the Company, as of any
date, the ratio of:

         (1)      the Consolidated Indebtedness of the Company on such date to

         (2)      the aggregate amount of Consolidated EBITDA for the Company
         for the most recently ended fiscal quarter for which internal financial
         statements are available multiplied by four (the "Reference Period").

                           In addition to the foregoing, for purposes of this
definition, "Consolidated EBITDA" shall be calculated on a pro forma basis after
giving effect to:

         (1)      the issuance of the Notes;

         (2)      the incurrence of the Indebtedness or the issuance of the
         Disqualified Stock or other Preferred Stock (and the application of the
         proceeds therefrom) giving rise to the need to make such calculation
         and any incurrence or issuance (and the application of the proceeds
         therefrom) or repayment of other Indebtedness, Disqualified Stock or
         Preferred Stock, other than the incurrence or repayment of Indebtedness
         for ordinary working capital purposes, at any time subsequent to the
         beginning of the Reference Period and on or prior to the date of
         determination, as if such incurrence (and the application of the
         proceeds thereof), or the repayment, as the case may be, occurred on
         the first day of the Reference Period; and

         (3)      any Dispositions or Asset Acquisitions (including, without
         limitation, any Asset Acquisition giving rise to the need to make such
         calculation as a result of such Person or one of its Restricted
         Subsidiaries (including any person that becomes a Restricted Subsidiary
         as a result of such Asset Acquisition) incurring, assuming or otherwise
         becoming liable for or issuing Indebtedness, Disqualified Stock or
         Preferred Stock) made on or subsequent to the first day of the
         Reference Period and on or prior to the date of determination, as if
         such Disposition or Asset Acquisition (including the incurrence,
         assumption or liability for any such Indebtedness, Disqualified Stock
         or Preferred Stock and also including any Consolidated EBITDA
         associated with such Asset Acquisition, including any cost savings
         adjustments in compliance with Regulation S-X promulgated by the
         Commission) had occurred on the first day of the Reference Period.

                           "Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or otherwise perfected
under applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.

                           "Loan Party" means the Company and each direct or
indirect affiliate or shareholder (or equivalent) of the Company or any of its
affiliates that is now or hereafter becomes a party to the CCO Credit Facility
or this Indenture.

                           "Make-Whole Premium" means an amount equal to the
excess of (a) the present value of the remaining interest and principal payments
due on an Eight Year Note to its final maturity date, computed using a discount
rate equal to the Treasury Rate on such date plus 0.50%, over (b) the
outstanding principal amount of such Note.

                                      -15-


                           "Management Fees" means the fees payable to CCI
pursuant to the management and mutual services agreements between or among any
one or more of the Company, its Parents and their Restricted Subsidiaries and
pursuant to the limited liability company agreements of certain Restricted
Subsidiaries as such management, mutual services or limited liability company
agreements exist on the Issue Date (or, if later, on the date any new Restricted
Subsidiary is acquired or created), including any amendment or replacement
thereof; provided, however, that any such new agreements or amendments or
replacements of existing agreements are not more disadvantageous to the Holders
in any material respect than such management agreements existing on the Issue
Date; and provided further, however, that such new, amended or replacement
management agreements do not provide for percentage fees, taken together with
fees under existing agreements, any higher than 3.5% of CCI's consolidated total
revenues for the applicable payment period.

                           "Moody's" means Moody's Investors Service, Inc. or
any successor to the rating agency business thereof.

                           "Net Proceeds" means the aggregate cash proceeds
received by the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof or taxes paid or payable as a
result thereof (including amounts distributable in respect of owners', partners'
or members' tax liabilities resulting from such sale), in each case after taking
into account any available tax credits or deductions and any tax sharing
arrangements and amounts required to be applied to the repayment of
Indebtedness.

                           "Non-Recourse Debt" means Indebtedness:

         (1)      as to which neither the Company nor any of its Restricted
         Subsidiaries

                  (a)      provides credit support of any kind (including any
                  undertaking, agreement or instrument that would constitute
                  Indebtedness);

                  (b)      is directly or indirectly liable as a guarantor or
                  otherwise; or

                  (c)      constitutes the lender;

         (2)      no default with respect to which (including any rights that
         the holders thereof may have to take enforcement action against an
         Unrestricted Subsidiary) would permit upon notice, lapse of time or
         both any holder of any other Indebtedness (other than the Notes) of the
         Company or any of its Restricted Subsidiaries to declare a default on
         such other Indebtedness or cause the payment thereof to be accelerated
         or payable prior to its stated maturity; and

                  (3)      as to which the lenders have been notified in writing
         that they will not have any recourse to the stock or assets of the
         Company or any of its Restricted Subsidiaries.

                           "Non-U.S. Person" means a Person who is not a U.S.
Person.

                           "Note Guarantee" means, individually, any Guarantee
of payment of the Notes by a Guarantor pursuant to the terms of this Indenture
and any supplemental indenture thereto, and, collectively, all such Guarantees.
Each such Note Guarantee shall be in the form prescribed by this Indenture.

                                      -16-


                           "Notes" means the Eight Year Notes and the Ten Year
Notes, collectively, or the Eight Year Notes or the Ten Year Notes, as
applicable.

                           "Officer" means, with respect to any Person, the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Vice-President of such Person.

                           "Officers' Certificate" means a certificate signed on
behalf of the Company or Capital Corp, as the case may be, by two Officers of
the Company or Capital Corp, as the case may be, one of whom must be the
principal executive officer, the chief financial officer or the treasurer of the
Company or Capital Corp, as the case may be, that meets the requirements of
Section 12.05.

                           "Opinion of Counsel" means an opinion from legal
counsel that meets the requirements of Section 12.05. The counsel may be an
employee of or counsel to the Company or any Subsidiary of the Company.

                           "Original Eight Year Notes" means the Initial Eight
Year Notes and any Exchange Eight Year Notes issued in exchange therefor.

                           "Original Ten Year Notes" means the Initial Ten Year
Notes and any Exchange Ten Year Notes issued in exchange therefor.

                           "Original Notes" means the Original Eight Year Notes
and the Original Ten Year Notes, collectively, or the Original Eight Year Notes
or the Original Ten Year Notes, as applicable.

                           "Parent" means CCOH, CCH II, CCH I, Charter Holdings,
Charter Communications Holding Company, LLC, CCI and/or any direct or indirect
Subsidiary of the foregoing 100% of the Capital Stock of which is owned directly
or indirectly by one or more of the foregoing Persons, as applicable, and that
directly or indirectly beneficially owns 100% of the Capital Stock of the
Company, and any successor Person to any of the foregoing.

                           "Pari Passu First Priority Indebtedness" means the
Indebtedness represented by (i) the obligations under a Credit Facility and any
Related Obligations to the extent incurred in compliance with the terms of this
Indenture and (ii) the obligations under any Additional Pari Passu First
Priority Indebtedness to the extent incurred in compliance with the terms of
this Indenture.

                           "Pari Passu First Priority Secured Parties" means
each of (i) the Bank Agents on behalf of themselves and the Lenders and the
Related Obligations Counterparties and (ii) the holders from time to time of any
Additional Pari Passu First Priority Indebtedness and the duly authorized
representative(s) of such holders, if any; provided, however, that each such
Person, or the duly authorized representative thereof, shall have become a party
to the applicable Security Documents.

                           "Pari Passu Indebtedness" means, with respect to any
Person, Indebtedness of such Person unless, with respect to any other item of
Indebtedness of such Person, the instrument creating or evidencing the same or
pursuant to which the same is outstanding or any other agreement governing the
terms of such Indebtedness expressly provides that such Indebtedness shall be
subordinated in right of payment to any other Indebtedness or obligation of such
Person. Notwithstanding the foregoing, "Pari Passu Indebtedness" shall not
include:

                                      -17-


         (i)      Indebtedness of the Company owed to any Restricted Subsidiary
         or Affiliate of the Company or Indebtedness of any such Restricted
         Subsidiary owed to the Company or any other Restricted Subsidiary or
         any Affiliate of such Restricted Subsidiary;

         (ii)     Indebtedness incurred in violation of this Indenture;

         (iii)    Indebtedness represented by Disqualified Stock; and

         (iv)     any Indebtedness to or guaranteed on behalf of any shareholder
         (other than a Parent), director, officer or employee of the Company or
         any Restricted Subsidiary of the Company.

                           "Pari Passu Second Priority Indebtedness" means the
Indebtedness represented by (i) the Notes and the Note Guarantees and (ii) the
obligations under any Additional Pari Passu Second Priority Indebtedness, in
each case, to the extent incurred in compliance with the terms of this
Indenture.

                           "Pari Passu Second Priority Secured Parties" means
each of (i) the Trustee, on behalf of itself and the Holders, and (ii) the
holders from time to time of any Additional Pari Passu Second Priority
Indebtedness and the duly authorized representative(s) of such holders, if any;
provided, however, that each such Person, or the duly authorized representative
thereof, shall have become a party to the applicable Security Documents.

                           "Participant" means, with respect to the Depositary,
Euroclear or Clearstream, a Person who has an account with the Depositary,
Euroclear or Clearstream, respectively (and, with respect to DTC, shall include
Euroclear and Clearstream).

                           "Permitted Investments" means:

         (1)      any Investment by the Company in a Restricted Subsidiary
         thereof, or any Investment by a Restricted Subsidiary of the Company in
         the Company or in another Restricted Subsidiary of the Company;

         (2)      any Investment in Cash Equivalents;

         (3)      any Investment by the Company or any of its Restricted
         Subsidiaries in a Person, if as a result of such Investment:

                  (a)      such Person becomes a Restricted Subsidiary of the
                  Company, or

                  (b)      such Person is merged, consolidated or amalgamated
                  with or into, or transfers or conveys substantially all of its
                  assets to, or is liquidated into, the Company or a Restricted
                  Subsidiary of the Company;

         (4)      any Investment made as a result of the receipt of non-cash
         consideration from an Asset Sale that was made pursuant to and in
         compliance with Section 4.11;

         (5)      any Investment made out of the net cash proceeds of the issue
         and sale after the Issue Date (other than to a Subsidiary of the
         Company) of Equity Interests (other than Disqualified Stock) of the
         Company to the extent that such net cash proceeds have not been applied
         to make a Restricted Payment or to effect other transactions pursuant
         to Section 4.07 hereof;

                                      -18-


         (6)      other Investments in any Person (other than any Parent) having
         an aggregate fair market value, when taken together with all other
         Investments in any Person made by the Company and its Restricted
         Subsidiaries (without duplication) pursuant to this clause (6) from and
         after the Issue Date, not to exceed $750 million (initially measured on
         the date each such Investment was made and without giving effect to
         subsequent changes in value, but reducing the amount outstanding by the
         aggregate amount of principal, interest, dividends, distributions,
         repayments, proceeds or other value otherwise returned or recovered in
         respect of any such Investment, but not to exceed the initial amount of
         such Investment) at any one time outstanding;

         (7) Investments in customers and suppliers in the ordinary course of
         business which either;

                  (A)      generate accounts receivable, or

                  (B)      are accepted in settlement of bona fide disputes;

         (8)      Investments consisting of payments by the Company or any of
         its Subsidiaries of amounts that are neither dividends nor
         distributions but are payments of the kind described in clause (2) of
         the second paragraph of Section 4.07 to the extent such payments
         constitute Investments; and

         (9)      regardless of whether a Default then exists, Investments in
         any Unrestricted Subsidiary made by the Company and/or any of its
         Restricted Subsidiaries with the proceeds of (x) distributions from any
         Unrestricted Subsidiary or (y) capital contributions received from any
         Parent (other than CCI).

                           "Permitted Liens" means;

         (1)      Liens on the assets of the Company and its Restricted
         Subsidiaries securing Indebtedness described under clause (1) of the
         second paragraph of Section 4.10 and other obligations under the
         agreements governing such Indebtedness and Related Obligations or under
         clause (11) of such second paragraph;

         (2)      Liens in favor of the Company;

         (3)      Liens to secure the performance of statutory obligations,
         surety or appeal bonds, performance bonds or other obligations of a
         like nature and that do not constitute Indebtedness, incurred in the
         ordinary course of business;

         (4)      Liens for taxes, assessments or governmental charges or claims
         that are not yet delinquent or that are being contested in good faith
         by appropriate proceedings promptly instituted and diligently
         concluded; provided, however, that any reserve or other appropriate
         provision as shall be required in conformity with GAAP shall have been
         made therefor;

         (5)      statutory and common law Liens of landlords and carriers,
         warehousemen, mechanics, suppliers, materialmen, repairmen or other
         similar Liens arising in the ordinary course of business and with
         respect to amounts not yet delinquent or being contested in good faith
         by appropriate legal proceedings promptly instituted and diligently
         conducted and for which a reserve or other appropriate provision, if
         any, as shall be required in conformity with GAAP shall have been made;

         (6)      Liens incurred or deposits made in the ordinary course of
         business in connection with workers' compensation, unemployment
         insurance and other types of social security;

                                      -19-


         (7)      Liens incurred or deposits made to secure the performance of
         tenders, bids, leases, statutory or regulatory obligation, bankers'
         acceptance, surety and appeal bonds, government contracts, performance
         and return-of-money bonds and other obligations of a similar nature
         incurred in the ordinary course of business (exclusive of obligations
         for the payment of borrowed money);

         (8)      easements, rights-of-way, municipal and zoning ordinances and
         similar charges, encumbrances, title defects or other irregularities
         that do not materially interfere with the ordinary course of business
         of the Company or any of its Restricted Subsidiaries;

         (9)      Liens of franchisors or other regulatory bodies arising in the
         ordinary course of business;

         (10)     Liens arising from filing Uniform Commercial Code financing
         statements regarding leases or other Uniform Commercial Code financing
         statements for precautionary purposes relating to arrangements not
         constituting Indebtedness;

         (11)     Liens arising from the rendering of a final judgment or order
         against the Company or any of its Restricted Subsidiaries that does not
         give rise to an Event of Default;

         (12)     Liens securing reimbursement obligations with respect to
         letters of credit (but not with respect to Indebtedness) that encumber
         documents and other property relating to such letters of credit and the
         products and proceeds thereof;

         (13)     Liens consisting of any interest or title of licensor in the
         property subject to a license;

         (14)     Liens arising from the sales or other transfers of accounts
         receivable which are past due or otherwise doubtful of collection in
         the ordinary course of business;

         (15)     Liens incurred in the ordinary course of business of the
         Company and its Restricted Subsidiaries with respect to obligations
         which in the aggregate do not exceed $50 million at any one time
         outstanding;

         (16)     Liens in favor of the Trustee arising under this Indenture and
         similar provisions in favor of trustees or other agents or
         representatives under indentures or other agreements governing debt
         instruments entered into after the date hereof;

         (17)     Liens in favor of the Trustee for its benefit and the benefit
         of Holders of all of the Notes, as their respective interests appear;

         (18)     purchase money mortgages or other purchase money Liens
         (including, without limitation, any Capital Lease Obligations) incurred
         by the Company or any Restricted Subsidiary upon any fixed or capital
         assets, assets useful in developing a telephony business and/or assets
         useful for general operating financing needs acquired after the Issue
         Date or purchase money mortgages (including, without limitation,
         Capital Lease Obligations) on any such assets, whether or not assumed,
         existing at the time of acquisition of such assets, whether or not
         assumed, so long as:

                  (a)      such mortgage or lien does not extend to or cover any
                  of the assets of the Company or such Restricted Subsidiary,
                  except the asset so developed, constructed or acquired, and
                  directly related assets such as enhancements and modifications
                  thereto, substitutions, replacements, proceeds (including
                  insurance proceeds), products, rents and profits thereof; and

                                      -20-


                  (b)      such mortgage or lien secures the obligation to pay
                  all or a portion of the purchase price of such asset, interest
                  thereon and other charges, costs and expenses (including,
                  without limitation, the cost of design, development,
                  construction, acquisition, transportation, installation,
                  improvement and migration) and is incurred in connection
                  therewith (or the obligation under such Capital Lease
                  Obligation) only; and

         (19)     Liens securing Permitted Refinancing Indebtedness, to the
         extent that the Indebtedness being refinanced was secured or was
         permitted to be secured by such Liens.

                           "Permitted Refinancing Indebtedness" means any
Indebtedness of the Company or any of its Restricted Subsidiaries issued in
exchange for, or the net proceeds of which are used, directly or indirectly,
within 60 days of the date of issuance thereof to extend, refinance, renew,
replace, defease or refund, other Indebtedness of the Company or any of its
Restricted Subsidiaries (other than intercompany Indebtedness); provided,
however, that unless permitted otherwise by this Indenture, no Indebtedness of
any Restricted Subsidiary may be issued in exchange for, nor may the net
proceeds of Indebtedness be used to extend, refinance, renew, replace, defease
or refund, Indebtedness of the direct or indirect parent of such Restricted
Subsidiary; provided further, however, that:

         (1)      the principal amount (or accreted value, if applicable) of
         such Permitted Refinancing Indebtedness does not exceed the principal
         amount of (or accreted value, if applicable) plus accrued interest and
         premium, if any, on the Indebtedness so extended, refinanced, renewed,
         replaced, defeased or refunded (plus the amount of reasonable expenses
         incurred in connection therewith), except to the extent that any such
         excess principal amount would be then permitted to be incurred by other
         provisions of Section 4.10;

         (2)      such Permitted Refinancing Indebtedness has a final maturity
         date later than the final maturity date of, and has a Weighted Average
         Life to Maturity equal to or greater than the Weighted Average Life to
         Maturity of, the Indebtedness being extended, refinanced, renewed,
         replaced, defeased or refunded; and

         (3)      if the Indebtedness being extended, refinanced, renewed,
         replaced, defeased or refunded is subordinated in right of payment to
         the Notes, such Permitted Refinancing Indebtedness has a final maturity
         date later than the final maturity date of, and is subordinated in
         right of payment to, the Notes on terms at least as favorable to the
         Holders as those contained in the documentation governing the
         Indebtedness being extended, refinanced, renewed, replaced, defeased or
         refunded.

                           "Person" means any individual, corporation,
partnership, joint venture, association, limited liability company, joint stock
company, trust, unincorporated organization, government or agency or political
subdivision thereof or any other entity.

                           "Preferred Stock," as applied to the Capital Stock of
any Person, means Capital Stock of any class or classes (however designated)
which, by its terms, is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.

                           "Private Placement Legend" means the legend set forth
in Section 2.06(g)(i)(a) to be placed on all Notes issued under this Indenture
except where otherwise permitted by the provisions of this Indenture.

                                      -21-


                           "Productive Assets" means assets (including assets of
a referent Person owned directly or indirectly through ownership of Capital
Stock) of a kind used or useful in the Cable Related Business.

                           "QIB" means a "qualified institutional buyer" as
defined in Rule 144A.

                           "Qualified Capital Stock" means Capital Stock that is
not Disqualified Stock.

                           "Rating Agencies" means Moody's and S&P.

                           "Registration Rights Agreement" means (a) any
registration rights agreement proposed to Holders on terms and conditions
substantially in the form of Exhibit H hereto with respect to the Notes and (b)
any registration rights agreement among the Issuers and the initial purchasers
named therein with respect to any Initial Additional Notes.

                           "Regulation S" means Regulation S promulgated under
the Securities Act.

                           "Regulation S Global Note" means collectively, a
global note substantially in the form of Exhibit A-1 hereto, in the case of
Eight Year Notes, and in the form of Exhibit A-2, in the case of Ten Year Notes,
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of, and registered in the name of, the Depositary or its
nominee that will be issued in an initial denomination equal to the outstanding
principal amount of the Initial Notes or any Initial Additional Notes of the
applicable series, in each case, initially sold in reliance on Rule 903 of
Regulation S.

                           "Related Cash Management Obligations" means
obligations of the Company or any Restricted Subsidiary arising from treasury,
depository and cash management services provided by one or more of the Bank
Agents or the Lenders or their Affiliates or designees or other parties
permitted under the CCO Credit Facility.

                           "Related Hedging Obligations" means Hedging
Obligations of the Company or any Restricted Subsidiary entered into with one or
more of the Bank Agents or the Lenders or their Affiliates or designees or other
parties permitted under the CCO Credit Facility.

                           "Related Obligations" means, collectively, the
Related Cash Management Obligations and the Related Hedging Obligations.

                           "Related Obligations Counterparties" means the Bank
Agents and/or Lenders and their Affiliates counterparties to the Related
Obligations.

                           "Related Party" means:

         (1)      the spouse or an immediate family member, estate or heir of
         Paul G. Allen; or

         (2)      any trust, corporation, partnership or other entity, the
         beneficiaries, stockholders, partners, owners or Persons beneficially
         holding an 80% or more controlling interest of which consist of Paul G.
         Allen and/or such other Persons referred to in the immediately
         preceding clause (1).

                           "Renaissance Entities" means Renaissance Media
(Louisiana) LLC, Renaissance Media (Tennessee) LLC, Renaissance Media Capital
Corporation, Renaissance Media Group LLC and Renaissance Media LLC.

                                      -22-


                           "Renaissance Indenture" means that certain indenture,
dated as of April 9, 1998, by and among Renaissance Media (Louisiana) LLC,
Renaissance Media (Tennessee) LLC, Renaissance Media Capital Corporation,
Renaissance Media Group LLC and United States Trust Company of New York, as
trustee.

                           "Responsible Officer," when used with respect to the
Trustee, means any officer within the Corporate Trust Administration of the
Trustee (or any successor group of the Trustee) with direct responsibility for
the administration of this Indenture and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

                           "Restricted Definitive Note" means a Definitive Note
bearing the Private Placement Legend.

                           "Restricted Global Note" means a Global Note bearing
the Private Placement Legend.

                           "Restricted Investment" means an Investment other
than a Permitted Investment.

                           "Restricted Subsidiary" of a Person means any
Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

                           "Rule 144" means Rule 144 promulgated under the
Securities Act.

                           "Rule 144A" means Rule 144A promulgated under the
Securities Act.

                           "Rule 144A Global Note" means a global note
substantially in the form of Exhibit A-1 hereto, in the case of Eight Year
Notes, and in the form of Exhibit A-2, in the case of Ten Year Notes, bearing
the Global Note Legend and the Private Placement Legend and deposited with or on
behalf of, and registered in the name of, the Depositary or its nominee that
will be issued in an initial denomination equal to the outstanding principal
amount of the Initial Notes or any Initial Additional Notes of the applicable
series, in each case initially sold in reliance on Rule 144A.

                           "Rule 903" means Rule 903 promulgated under the
Securities Act.

                           "Rule 904" means Rule 904 promulgated under the
Securities Act.

                           "S&P" means Standard & Poor's Ratings Service, a
division of The McGraw-Hill Companies, Inc., or any successor to the rating
agency business thereof.

                           "Secured Parties" means, collectively, the Pari Passu
First Priority Secured Parties and the Pari Passu Second Priority Secured
Parties.

                           "Securities Act" means the Securities Act of 1933, as
amended, or any successor statute or statutes thereto.

                           "Security Documents" means, collectively, all
security agreements, mortgages, deeds of trust, pledges, collateral assignments
and other agreements or instruments evidencing or creating any security in favor
of the Trustees and any Holders in any or all of the Collateral, in each case,
as amended from time to time in accordance with the terms thereof.

                                      -23-


                           "Senior Secured Leverage Ratio" means, as to the
Company, as of any date, the ratio of:

         (1)      the Indebtedness, Attributable Debt or Trade Payables of the
         Company and any of its Subsidiaries that are secured by, or have the
         benefit of, any Lien that is in any respect senior to the Liens in
         favor of the Notes on such date to

         (2)      the aggregate amount of Consolidated EBITDA for the Company
         for the most recently ended fiscal quarter for which internal financial
         statements are available multiplied by four (the "Reference Period").

In addition to the foregoing, for purposes of this definition, "Consolidated
EBITDA" shall be calculated on a pro forma basis after giving effect to

         (1)      the issuance of the Notes;

         (2)      the incurrence of the Indebtedness or the issuance of the
         Disqualified Stock or other Preferred Stock (and the application of the
         proceeds therefrom) giving rise to the need to make such calculation
         and any incurrence or issuance (and the application of the proceeds
         therefrom) or repayment of other Indebtedness, Disqualified Stock or
         Preferred Stock, other than the incurrence or repayment of Indebtedness
         for ordinary working capital purposes, at any time subsequent to the
         beginning of the Reference Period and on or prior to the date of
         determination, as if such incurrence (and the application of the
         proceeds thereof) or the repayment, as the case may be, occurred on the
         first day of the Reference Period; and

         (3)      any Dispositions or Asset Acquisitions (including, without
         limitation, any Asset Acquisition giving rise to the need to make such
         calculation as a result of such Person or one of its Restricted
         Subsidiaries (including any Person that becomes a Restricted Subsidiary
         as a result of such Asset Acquisition) incurring, assuming or otherwise
         becoming liable for or issuing Indebtedness, Disqualified Stock or
         Preferred Stock) made on or subsequent to the first day of the
         Reference Period and on or prior to the date of determination, as if
         such Disposition or Asset Acquisition (including the incurrence,
         assumption or liability for any such Indebtedness, Disqualified Stock
         or Preferred Stock and also including any Consolidated EBITDA
         associated with such Asset Acquisition, including any cost savings
         adjustments in compliance with Regulation S-X promulgated by the
         Commission) had occurred on the first day of the Reference Period.

                           "Shelf Registration Statement" means a "shelf"
registration statement providing for the registration and the sale on a
continuous or delayed basis of the Initial Notes or any Initial Additional Notes
as may be provided in any Registration Rights Agreement.

                           "Significant Subsidiary" means (a) with respect to
any Person, any Restricted Subsidiary of such Person which would be considered a
"Significant Subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and (b) in addition, with respect to the Company, Capital Corp.

                           "Special Interest" means special or additional
interest in respect of the Notes that is payable by the Issuers as liquidated
damages upon specified registration defaults pursuant to any Registration Rights
Agreement.

                           "Stated Maturity" means, with respect to any
installment of interest or principal on any series of Indebtedness, the date on
which such payment of interest or principal was scheduled to

                                      -24-


be paid in the documentation governing such Indebtedness on the Issue Date, or,
if none, the original documentation governing such Indebtedness, and shall not
include any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the payment
thereof.

                           "Subsidiary" means, with respect to any Person:

         (1)      any corporation, association or other business entity of which
         at least 50% of the total voting power of shares of Capital Stock
         entitled (without regard to the occurrence of any contingency) to vote
         in the election of directors, managers or trustees thereof is at the
         time owned or controlled, directly or indirectly, by such Person or one
         or more of the other Subsidiaries of such Person (or a combination
         thereof) and, in the case of any such entity of which 50% of the total
         voting power of shares of Capital Stock is so owned or controlled by
         such Person or one or more of the other Subsidiaries of such Person,
         such Person and its Subsidiaries also have the right to control the
         management of such entity pursuant to contract or otherwise; and

         (2)      any partnership

                  (a)      the sole general partner or the managing general
                  partner of which is such Person or a Subsidiary of such
                  Person, or

                  (b)      the only general partners of which are such Person or
                  one or more Subsidiaries of such Person (or any combination
                  thereof).

                           "Tax" shall mean any tax, duty, levy, impost,
assessment or other governmental charge (including penalties, interest and any
other liabilities related thereto).

                           "Ten Year Note" or "Ten Year Notes" means the Initial
Ten Year Notes, any Additional Ten Year Notes and the Exchange Ten Year Notes.

                           "TIA" means the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture
is qualified under the TIA; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, then "TIA" means, to the
extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.

                           "Treasury Rate" means, for any date, the yield to
maturity at the time of computation of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) that has become publicly available at least two
Business Days prior to the applicable redemption date (or, if such Statistical
Release is no longer published, any publicly available source of similar market
data)) most nearly equal to the period from the applicable redemption date to
April 30, 2012; provided, however, that if the period from the applicable
redemption date is not equal to the constant maturity of a United States
Treasury security for which a weekly average yield is given, the Treasury Rate
shall be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the weekly average yields of United States Treasury securities
for which such yields are given except that if the period from the applicable
redemption date to April 30, 2012 is less than one year, the weekly average
yield on actually traded United States Treasury Securities adjusted to a
constant maturity of one year shall be used.

                           "Trustee" means Wells Fargo Bank, N.A. until a
successor replaces Wells Fargo Bank, N.A. in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.

                                      -25-


                           "Unrestricted Definitive Note" means one or more
Definitive Notes that do not bear and are not required to bear the Private
Placement Legend.

                           "Unrestricted Global Note" means a permanent global
note substantially in the form of Exhibit A-1 attached hereto, in the case of
Eight Year Notes, and in the form of Exhibit A-2 attached hereto, in the case of
Ten Year Notes, that bears the Global Note Legend and that has the "Schedule of
Exchanges of Interests in the Global Note" attached thereto, and that is
deposited with or on behalf of and registered in the name of the Depositary,
representing a series of Notes that do not bear the Private Placement Legend.

                           "Unrestricted Subsidiary" means any Subsidiary of the
Company that is designated by the Board of Directors of the Company or CCI as an
Unrestricted Subsidiary pursuant to a board resolution, but only to the extent
that such Subsidiary:

         (1)      has no Indebtedness other than Non-Recourse Debt;

         (2)      is not party to any agreement, contract, arrangement or
         understanding with the Company or any Restricted Subsidiary of the
         Company unless the terms of any such agreement, contract, arrangement
         or understanding are no less favorable to the Company or any Restricted
         Subsidiary of the Company than those that might be obtained at the time
         from Persons who are not Affiliates of the Company unless such terms
         constitute Investments permitted by Section 4.08, Asset Sales permitted
         by Section 4.11 or sale-leaseback transactions permitted by Section
         4.12;

         (3)      is a Person with respect to which neither the Company nor any
         of its Restricted Subsidiaries has any direct or indirect obligation

                  (a)      to subscribe for additional Equity Interests or

                  (b)      to maintain or preserve such Person's financial
                  condition or to cause such Person to achieve any specified
                  levels of operating results;

         (4)      has not guaranteed or otherwise directly or indirectly
         provided credit support for any Indebtedness of the Company or any of
         its Restricted Subsidiaries;

         (5)      has at least one director on its board of directors that is
         not a director or executive officer of the Company or any of its
         Restricted Subsidiaries or has at least one executive officer that is
         not a director or executive officer of the Company or any of its
         Restricted Subsidiaries; and

         (6)      does not own any Capital Stock of any Restricted Subsidiary of
         the Company.

Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary
shall be evidenced to the Trustee by delivering to the Trustee a certified copy
of the board resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the preceding
conditions and was permitted by Section 4.08. If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Indenture, except in the case of an Unrestricted Subsidiary
that is deemed to become a Restricted Subsidiary on any Reversion Date, and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.10, the Company shall
be in default of Section 4.10. The Board of Directors of the Company or CCI may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that such designation shall be deemed to be

                                      -26-


an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if:

         (1)      such Indebtedness is permitted under Section 4.10, calculated
         on a pro forma basis as if such designation had occurred at the
         beginning of the four-quarter reference period; and

                  (2)      no Default or Event of Default would be in existence
         immediately following such designation.

                           "U.S. Person" means a U.S. person as defined in Rule
902(k) under the Securities Act.

                           "Voting Stock" of any Person as of any date means the
Capital Stock of such Person that is at the time entitled to vote in the
election of the board of directors or comparable governing body of such Person.

                           "Weighted Average Life to Maturity" means, when
applied to any Indebtedness at any date, the number of years obtained by
dividing:

         (1)      the sum of the products obtained by multiplying

                  (a)      the amount of each then remaining installment,
                  sinking fund, serial maturity or other required payments of
                  principal, including payment at final maturity, in respect
                  thereof, by

                  (b)      the number of years (calculated to the nearest
                  one-twelfth) that will elapse between such date and the making
                  of such payment; by

         (2)      the then outstanding principal amount of such Indebtedness.

                           "Wholly Owned Restricted Subsidiary" of any Person
means a Restricted Subsidiary of such Person all of the outstanding common
equity interests or other ownership interests of which (other than directors'
qualifying shares) shall at the time be owned by such Person and/or by one or
more Wholly Owned Restricted Subsidiaries of such Person.

                  Section 1.02. Other Definitions.



                                                                      Defined in
                           Term                                        Section
                           ----                                       ----------
                                                                   
"Adjusted Net Assets" .....................................             11.05
"Affiliate Transaction"....................................              4.13
"Asset Sale Offer".........................................              3.09
"Authentication Order".....................................              2.02
"Change of Control Offer"..................................              4.16
"Change of Control Payment"................................              4.16
"Change of Control Payment Date"...........................              4.16
"Company Notice" ..........................................             10.04
"Covenant Defeasance"......................................              8.03
"DTC"......................................................              2.03
"Event of Default".........................................              6.01
"Excess Proceeds"..........................................              4.11


                                      -27-




                                                                      Defined in
                           Term                                        Section
                           ----                                       ----------
                                                                   
"Funding Guarantor" .......................................             11.05
"incur"....................................................              4.10
"Legal Defeasance".........................................              8.02
"Offer Amount".............................................              3.09
"Offer Period".............................................              3.09
"Paying Agent".............................................              2.03
"Payment Default"..........................................              6.01
"Permitted Debt"...........................................              4.10
"Purchase Date"............................................              3.09
"Ratio Debt" ..............................................              4.10
"Reference Date"...........................................              4.07
"Registrar"................................................              2.03
"Released Collateral" .....................................             10.04
"Representative" ..........................................             11.04
"Restricted Payments"......................................              4.07
"Reversion Date"...........................................              4.19
"Suspended Covenants"......................................              4.19
"Suspension Period" .......................................              4.19


                  Section 1.03. Incorporation by Reference of Trust Indenture
Act.

                           Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture.

                           The following TIA terms used in this Indenture have
the following meanings:

                           "indenture securities" means the Notes;

                           "indenture security holder" means a Holder;

                           "indenture to be qualified" means this Indenture;

                           "indenture trustee" or "institutional trustee" means
the Trustee; and

                           "obligor" on the Notes means the Issuers and any
successor obligor upon the Notes.

                           All other terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
SEC rule under the TIA have the meanings so assigned to them.

                  Section 1.04. Rules of Construction.

                           Unless the context otherwise requires:

                  (i)      a term has the meaning assigned to it;

                  (ii)     an accounting term not otherwise defined has the
         meaning assigned to it in accordance with GAAP;

                                      -28-


                  (iii)    "or" is not exclusive;

                  (iv)     words in the singular include the plural, and in the
         plural include the singular;

                  (v)      provisions apply to successive events and
         transactions;

                  (vi)     references to sections of or rules under the
         Securities Act shall be deemed to include substitute, replacement or
         successor sections or rules adopted by the SEC from time to time;

                  (vii)    references to any statute, law, rule or regulation
         shall be deemed to refer to the same as from time to time amended and
         in effect and to any successor statute, law, rule or regulation;

                  (viii)   references to any contract, agreement or instrument
         shall mean the same as amended, modified, supplemented or amended and
         restated from time to time, in each case, in accordance with any
         applicable restrictions contained in this Indenture; and

                  (ix)     references to a series of Notes mean the Eight Year
         Notes or the Ten Year Notes, as the case may be.

                                   ARTICLE 2

                                    THE NOTES

                  Section 2.01. Form and Dating.

                  (a)      General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 hereto, in the
case of Eight Year Notes, and Exhibit A-2 hereto, in the case of Ten Year Notes.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its authentication.
The Notes shall be in denominations of $1,000 and integral multiples thereof.

                           The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Issuers and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.

                  (b)      Global Notes. Eight Year Notes issued in global form
shall be substantially in the form of Exhibit A-1 attached hereto (including the
Global Note Legend thereon and the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Ten Year Notes issued in global form shall be
substantially in the form of Exhibit A-2 attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Eight Year Notes issued in definitive form shall be
substantially in the form of Exhibit A-1 attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Ten Year Notes issued in definitive form shall
be substantially in the form of Exhibit A-2 attached hereto (but without the
Global Notes Legend thereon and without the "Schedule of Exchanges of Interests
in the Global Note" attached thereto). Each Global Note shall represent such of
the outstanding Notes as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount

                                      -29-


of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06.

                  (c)      Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream (or, in each case,
equivalent documents setting forth the procedures of Euroclear and Clearstream)
shall be applicable to transfers of beneficial interests in the Regulation S
Global Notes that are held by Participants through Euroclear or Clearstream.

                  Section 2.02. Execution and Authentication.

                           Two Officers shall sign the Notes for each Issuer by
manual or facsimile signature.

                           If an Officer whose signature is on a Note no longer
holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid.

                           A Note shall not be valid until authenticated by the
manual signature (which may be by facsimile) of the Trustee. The signature shall
be conclusive evidence that the Note has been authenticated under this
Indenture.

                           At any time and from time to time after the execution
and delivery of this Indenture, the Issuers may deliver Notes executed by the
Issuers to the Trustee for authentication; and the Trustee shall authenticate
and deliver (i) Initial Eight Year Notes for original issue in the aggregate
principal amount of $1,100,000,000, (ii) Initial Ten Year Notes for original
issue in the aggregate principal amount of $400,000,000, (iii) Additional Notes
from time to time for original issue in aggregate principal amount specified by
the Issuers, and (iv) Exchange Notes from time to time for issue in exchange for
a like principal amount of Initial Notes or Initial Additional Notes of the same
series, in each case specified in clauses (i) through (iv) above, upon a written
order of the Issuers signed by an Officer of each of the Issuers (an
"Authentication Order"). Such Authentication Order shall specify the amount of
the applicable series of Notes to be authenticated and the date on which the
Notes are to be authenticated, whether such Notes are to be Initial Notes,
Additional Notes or Exchange Notes and whether the Notes are to be issued as one
or more Global Notes and such other information as the Issuers may include or
the Trustee may reasonably request. The aggregate principal amount of Notes
which may be authenticated and delivered under this Indenture is unlimited.

                           On the Issue Date, the Issuers will issue
$1,100,000,000 aggregate principal amount of Initial Eight Year Notes and
$400,000,000 aggregate principal amount of Initial Ten Year Notes. Initial Notes
and any Initial Additional Notes offered and sold in reliance on the exemption
from registration under the Securities Act provided by Section 4(2) thereunder
or Rule 144A shall be issued as one or more Rule 144A Global Notes. Initial
Notes and any Initial Additional Notes offered and sold in offshore transactions
in reliance on Regulation S shall be issued as one or more Regulation S Global
Notes.

                           The Trustee may appoint an authenticating agent
acceptable to the Issuers to authenticate Notes. An authenticating agent may
authenticate Notes whenever the Trustee may do so. Each

                                      -30-



reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with Holders or an Affiliate of the Issuers.

                  Section 2.03. Registrar and Paying Agent.

                           The Issuers shall maintain an office or agency where
Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Notes may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Issuers may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Issuers
may change any Paying Agent or Registrar without notice to any Holder. The
Issuers shall notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Issuers fail to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.

                           The Issuers initially appoint The Depository Trust
Company ("DTC") to act as Depositary with respect to the Global Notes.

                           The Issuers initially appoint the Trustee to act as
the Registrar and Paying Agent and to act as Custodian with respect to the
Global Notes.

                  Section 2.04. Paying Agent to Hold Money in Trust.

                           The Issuers shall require each Paying Agent other
than the Trustee to agree in writing that the Paying Agent shall hold in trust
for the benefit of Holders or the Trustee all money held by the Paying Agent for
the payment of principal, premium, if any, or interest on the Notes, and shall
notify the Trustee of any default by the Issuers in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Issuers at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall
have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Issuers, the Trustee shall serve
as Paying Agent for the Notes.

                  Section 2.05. Holder Lists.

                           The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Issuers shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders and the Issuers shall otherwise comply with TIA Section 312(a).

                  Section 2.06. Transfer and Exchange.

                  (a)      Transfer and Exchange of Global Notes. A Global Note
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
shall be exchanged by the Issuers for Definitive Notes of the applicable series
if:

                                      -31-


                  (i)      the Issuers deliver to the Trustee notice from the
         Depositary that it is unwilling or unable to continue to act as
         Depositary or that it is no longer a clearing agency registered under
         the Exchange Act and, in either case, a successor Depositary is not
         appointed by the Issuers within 120 days after the date of such notice
         from the Depositary; or

                  (ii)     there shall have occurred and be continuing a Default
         or Event of Default with respect to the Notes.

                           Upon the occurrence of any of the preceding events
referenced in clause (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10. Every Note authenticated and delivered in exchange for, or in lieu of, a
Global Note or any portion thereof, pursuant to this Section 2.06 or Section
2.07 or 2.10, shall be authenticated and delivered in the form of, and shall be,
a Global Note. A Global Note may not be exchanged for another Note other than as
provided in this Section 2.06(a); provided, however, that beneficial interests
in a Global Note may be transferred and exchanged as provided in Section
2.06(b), (c) or (f).

                  (b)      Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Prior to the expiration of the 40-day distribution compliance period set
forth in Regulation S, beneficial interests in any Regulation S Global Notes may
be held only through Euroclear or Clearstream unless transferred in accordance
with Section 2.06(b)(iii). Transfers of beneficial interests in the Global Notes
also shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:

                  (i)      Transfer of Beneficial Interests in the Same Global
         Note. Beneficial interests in any Restricted Global Note may be
         transferred to Persons who take delivery thereof in the form of a
         beneficial interest in the same Restricted Global Note in accordance
         with the transfer restrictions set forth in the Private Placement
         Legend. Beneficial interests in any Unrestricted Global Note may be
         transferred to Persons who take delivery thereof in the form of a
         beneficial interest in an Unrestricted Global Note of the same series.
         No written orders or instructions shall be required to be delivered to
         the Registrar to effect the transfers described in this Section
         2.06(b)(i).

                  (ii)     All Other Transfers and Exchanges of Beneficial
         Interests in Global Notes. In connection with all transfers and
         exchanges of beneficial interests that are not subject to Section
         2.06(b)(i) above, the transferor of such beneficial interest must
         deliver to the Registrar either:

                           (A)      a written order from a Participant or an
                  Indirect Participant given to the Depositary in accordance
                  with the Applicable Procedures directing the Depositary to
                  credit or cause to be credited a beneficial interest in
                  another Global Note of the same series in an amount equal to
                  the beneficial interest to be transferred or exchanged; and

                           (B)      instructions given in accordance with the
                  Applicable Procedures containing information regarding the
                  Participant account to be credited with such increase; or

                           (C)      a written order from a Participant or an
                  Indirect Participant given to the Depositary in accordance
                  with the Applicable Procedures directing the Depositary to
                  cause to be issued a Definitive Note of the same series in an
                  amount equal to the beneficial interest to be transferred or
                  exchanged; and

                                      -32-

                           (D)      instructions given by the Depositary to the
                  Registrar containing information regarding the Person in whose
                  name such Definitive Note shall be registered to effect the
                  transfer or exchange referred to in subparagraph (A) above.

         Upon consummation of an Exchange Offer by the Issuers in accordance
         with Section 2.06(f), the requirements of this Section 2.06(b)(ii)
         shall be deemed to have been satisfied upon receipt by the Registrar of
         the instructions contained in the Letter of Transmittal delivered by
         the holder of such beneficial interests in the Restricted Global Notes.
         Upon satisfaction of all of the requirements for transfer or exchange
         of beneficial interests in Global Notes contained in this Indenture and
         the Notes or otherwise applicable under the Securities Act, the Trustee
         shall adjust the principal amount of the relevant Global Note(s)
         pursuant to Section 2.06(h).

                           (iii)    Transfer of Beneficial Interests to Another
                  Restricted Global Note. A beneficial interest in any
                  Restricted Global Note may be transferred to a Person who
                  takes delivery thereof in the form of a beneficial interest in
                  another Restricted Global Note of the same series if the
                  transfer complies with the requirements of Section 2.06(b)(ii)
                  above and the Registrar receives the following:

                                    (A)      if the transferee will take
                           delivery in the form of a beneficial interest in the
                           Rule 144A Global Note of the same series, then the
                           transferor must deliver a certificate in the form of
                           Exhibit B hereto, including the certifications in
                           item (1) thereof; and

                                    (B)      if the transferee will take
                           delivery in the form of a beneficial interest in the
                           Regulation S Global Note of the same series, then the
                           transferor must deliver a certificate in the form of
                           Exhibit B hereto, including the certifications in
                           item (2) thereof.

                           (iv)     Transfer and Exchange of Beneficial
                  Interests in a Restricted Global Note for Beneficial Interests
                  in an Unrestricted Global Note. A beneficial interest in any
                  Restricted Global Note may be exchanged by any holder thereof
                  for a beneficial interest in an Unrestricted Global Note of
                  the same series or transferred to a Person who takes delivery
                  thereof in the form of a beneficial interest in an
                  Unrestricted Global Note of the same series if the exchange or
                  transfer complies with the requirements of Section 2.06(b)(ii)
                  above and:

                                    (A)      such exchange or transfer is
                           effected pursuant to an Exchange Offer in accordance
                           with a Registration Rights Agreement and the holder
                           of the beneficial interest to be transferred, in the
                           case of an exchange, or the transferee, in the case
                           of a transfer, certifies in the applicable Letter of
                           Transmittal that it is not (1) a broker-dealer, (2) a
                           Person participating in the distribution of the
                           relevant Exchange Notes or (3) a Person who is an
                           affiliate (as defined in Rule 144) of the Issuers;

                                    (B)      such transfer is effected pursuant
                           to a Shelf Registration Statement in accordance with
                           a Registration Rights Agreement;

                                    (C)      such transfer is effected by a
                           broker-dealer pursuant to the Exchange Offer
                           Registration Statement in accordance with a
                           Registration Rights Agreement;

                                    (D)      such exchange or transfer (i) is
                           effected after the expiration of the 40-day
                           distribution compliance period set forth in
                           Regulation S or (ii) is (and together with any
                           subsequent transfer would be) effected pursuant to an
                           exemption from registration under the Securities Act
                           provided by Rule 144 and the Registrar receives the
                           following:

                                      -33-


                                              (1)   if the holder of such
                                    beneficial interest in a Restricted Global
                                    Note proposes to exchange such beneficial
                                    interest for a beneficial interest in an
                                    Unrestricted Global Note of the same series,
                                    a certificate from such holder in the form
                                    of Exhibit C hereto, including the
                                    certifications in item (1)(a) thereof; or

                                              (2)   if the holder of such
                                    beneficial interest in a Restricted Global
                                    Note proposes to transfer such beneficial
                                    interest to a Person who shall take delivery
                                    thereof in the form of a beneficial interest
                                    in an Unrestricted Global Note of the same
                                    series, a certificate from such holder in
                                    the form of Exhibit B hereto, including the
                                    certifications in item (4) thereof;

                           and, in each such case set forth in this subparagraph
                           (D), if the Registrar so requests or if the
                           Applicable Procedures so require, an Opinion of
                           Counsel in form reasonably acceptable to the
                           Registrar to the effect that such exchange or
                           transfer is in compliance with the Securities Act and
                           that the restrictions on transfer contained herein
                           and in the Private Placement Legend are no longer
                           required in order to maintain compliance with the
                           Securities Act; or

                                    (E)      such transfer or exchange is
                           pursuant to an effective registration statement under
                           the Securities Act.

                  If any such transfer is effected pursuant to subparagraph (B)
         or (D) above at a time when an Unrestricted Global Note has not yet
         been issued, the Issuers shall issue and, upon receipt of an
         Authentication Order in accordance with Section 2.02, the Trustee shall
         authenticate one or more Unrestricted Global Notes in an aggregate
         principal amount equal to the aggregate principal amount of beneficial
         interests transferred pursuant to subparagraph (B) or (D) above.

                  Beneficial interests in an Unrestricted Global Note cannot be
         exchanged for, or transferred to Persons who take delivery thereof in
         the form of, a beneficial interest in a Restricted Global Note.

                  (c)      Transfer or Exchange of Beneficial Interests for
         Definitive Notes.

                           (i)      Beneficial Interests in Restricted Global
Notes to Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note of the same series or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Restricted
Definitive Note of the same series, then, upon receipt by the Registrar of the
following documentation:

                           (A)      if the holder of such beneficial interest in
         a Restricted Global Note proposes to exchange such beneficial interest
         for a Restricted Definitive Note, a certificate from such holder in the
         form of Exhibit C hereto, including the certifications in item (2)(a)
         thereof (provided, however, that any such beneficial interest in a
         Regulation S Global Note shall not be so exchangeable until after the
         expiration of the 40-day distribution compliance period set forth in
         Regulation S);

                           (B)      if such beneficial interest is being
         transferred to a QIB in accordance with Rule 144A under the Securities
         Act, a certificate to the effect set forth in Exhibit B hereto,
         including the certifications in item (1) thereof;

                                      -34-


                           (C)      if such beneficial interest is being
         transferred to a Non-U.S. Person in an offshore transaction in
         accordance with Rule 903 or Rule 904 under the Securities Act, a
         certificate to the effect set forth in Exhibit B hereto, including the
         certifications in item (2) thereof;

                           (D)      if such beneficial interest is being
         transferred pursuant to an exemption from the registration requirements
         of the Securities Act in accordance with Rule 144 under the Securities
         Act, a certificate to the effect set forth in Exhibit B hereto,
         including the certifications in item (3)(a) thereof;

                           (E)      if such beneficial interest is being
         transferred to an Institutional Accredited Investor in reliance on an
         exemption from the registration requirements of the Securities Act
         other than those listed in subparagraphs (B) through (D) above, a
         certificate to the effect set forth in Exhibit B hereto, including the
         certifications, certificates and Opinion of Counsel required by item
         (3)(d) thereof, if applicable;

                           (F)      if such beneficial interest is being
         transferred to the Issuers or any of their Subsidiaries, a certificate
         to the effect set forth in Exhibit B hereto, including the
         certifications in item (3)(b) thereof; or

                           (G)      if such beneficial interest is being
         transferred pursuant to an effective registration statement under the
         Securities Act, a certificate to the effect set forth in Exhibit B
         hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h), and the Issuers
shall execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note of the same series in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)
shall be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.

         (ii)     Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted
Global Note may exchange such beneficial interest for an Unrestricted Definitive
Note of the same series or may transfer such beneficial interest to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Note of the
same series only if:

                  (A)      such exchange or transfer is effected pursuant to an
         Exchange Offer in accordance with a Registration Rights Agreement and
         the holder of such beneficial interest, in the case of an exchange, or
         the transferee, in the case of a transfer, certifies in the applicable
         Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
         participating in the distribution of the relevant Exchange Notes or (3)
         a Person who is an affiliate (as defined in Rule 144) of the Issuers;

                  (B)      such transfer is effected pursuant to a Shelf
         Registration Statement in accordance with a Registration Rights
         Agreement;

                                      -35-


                  (C)      such transfer is effected by a broker-dealer pursuant
         to the Exchange Offer Registration Statement in accordance with a
         Registration Rights Agreement;

                  (D)      such exchange or transfer (i) is effected after the
         expiration of the 40-day distribution compliance period set forth in
         Regulation S or (ii) is (and together with any subsequent transfer
         would be) effected pursuant to an exemption from registration under the
         Securities Act provided by Rule 144 and the Registrar receives the
         following:

                           (1)      if the holder of such beneficial interest in
                  a Restricted Global Note proposes to exchange such beneficial
                  interest for a Definitive Note of the same series that does
                  not bear the Private Placement Legend, a certificate from such
                  holder in the form of Exhibit C hereto, including the
                  certifications in item (1)(b) thereof; or

                           (2)      if the holder of such beneficial interest in
                  a Restricted Global Note proposes to transfer such beneficial
                  interest to a Person who shall take delivery thereof in the
                  form of a Definitive Note of the same series that does not
                  bear the Private Placement Legend, a certificate from such
                  holder in the form of Exhibit B hereto, including the
                  certifications in item (4) thereof;

          and, in each such case set forth in this subparagraph (D), if the
          Registrar so requests or if the Applicable Procedures so require, an
          Opinion of Counsel in form reasonably acceptable to the Registrar to
          the effect that such exchange or transfer is in compliance with the
          Securities Act and that the restrictions on transfer contained herein
          and in the Private Placement Legend are no longer required in order to
          maintain compliance with the Securities Act; or

                  (E)      such transfer or exchange is pursuant to an effective
         registration statement under the Securities Act.

         (iii)    Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for a
Definitive Note of the same series or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Definitive Note of the same
series, then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii), the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section 2.06(h),
and the Issuers shall execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions a Definitive Note of the same series
in the appropriate principal amount. Any Definitive Note issued in exchange for
a beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered
in such name or names and in such authorized denomination or denominations as
the holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect Participant.
The Trustee shall deliver such Definitive Notes to the Persons in whose names
such Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall not bear the
Private Placement Legend.

                  (d)      Transfer and Exchange of Definitive Notes for
Beneficial Interests in Global Notes.

         (i)      Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global Note of
the same series or to transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note of the same series, then, upon receipt by the Registrar of the
following documentation:

                                      -36-


                  (A)      if the Holder of such Restricted Definitive Note
         proposes to exchange such Note for a beneficial interest in a
         Restricted Global Note of the same series, a certificate from such
         Holder in the form of Exhibit C hereto, including the certifications in
         item (2)(b) thereof;

                  (B)      if such Restricted Definitive Note is being
         transferred to a QIB in accordance with Rule 144A under the Securities
         Act, a certificate to the effect set forth in Exhibit B hereto,
         including the certifications in item (1) thereof;

                  (C)      if such Restricted Definitive Note is being
         transferred to a Non-U.S. Person in an offshore transaction in
         accordance with Rule 903 or Rule 904 under the Securities Act, a
         certificate to the effect set forth in Exhibit B hereto, including the
         certifications in item (2) thereof;

                  (D)      if such Restricted Definitive Note is being
         transferred pursuant to an exemption from the registration requirements
         of the Securities Act in accordance with Rule 144 under the Securities
         Act, a certificate to the effect set forth in Exhibit B hereto,
         including the certifications in item (3)(a) thereof;

                  (E)      if such Restricted Definitive Note is being
         transferred to an Institutional Accredited Investor in reliance on an
         exemption from the registration requirements of the Securities Act
         other than those listed in subparagraphs (B) through (D) above, a
         certificate to the effect set forth in Exhibit B hereto, including the
         certifications, certificates and Opinion of Counsel required by item
         (3) thereof, if applicable;

                  (F)      if such Restricted Definitive Note is being
         transferred to the Company or any of its Subsidiaries, a certificate to
         the effect set forth in Exhibit B hereto, including the certifications
         in item (3)(b) thereof; or

                  (G)      if such Restricted Definitive Note is being
         transferred pursuant to an effective registration statement under the
         Securities Act, a certificate to the effect set forth in Exhibit B
         hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
Rule 144A Global Note, in the case of clause (C) above, the Regulation S Global
Note.

         (ii)     Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note of the same
series or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note of the same series only if:

                  (A)      such exchange or transfer is effected pursuant to an
         Exchange Offer in accordance with a Registration Rights Agreement and
         the Holder, in the case of an exchange, or the transferee, in the case
         of a transfer, certifies in the applicable Letter of Transmittal that
         it is not (1) a broker-dealer, (2) a Person participating in the
         distribution of the relevant Exchange Notes or (3) a Person who is an
         affiliate (as defined in Rule 144) of the Issuers;

                  (B)      such transfer is effected pursuant to a Shelf
         Registration Statement in accordance with a Registration Rights
         Agreement;

                                      -37-


                  (C)      such transfer is effected by a broker-dealer pursuant
         to the Exchange Offer Registration Statement in accordance with a
         Registration Rights Agreement;

                  (D)      such exchange or transfer (i) is effected after the
         expiration of the 40-day distribution compliance period set forth in
         Regulation S or (ii) is (and together with any subsequent transfer
         would be) effected pursuant to an exemption from registration under the
         Securities Act provided by Rule 144 and the Registrar receives the
         following:

                           (1)      if the Holder of such Definitive Notes
                  proposes to exchange such Notes for a beneficial interest in
                  the Unrestricted Global Note of the same series, a certificate
                  from such Holder in the form of Exhibit C hereto, including
                  the certifications in item (1)(c) thereof; or

                           (2)      if the Holder of such Definitive Notes
                  proposes to transfer such Notes to a Person who shall take
                  delivery thereof in the form of a beneficial interest in the
                  Unrestricted Global Note of the same series, a certificate
                  from such Holder in the form of Exhibit B hereto, including
                  the certifications in item (4) thereof;

          and, in each such case set forth in this subparagraph (D), if the
          Registrar so requests or if the Applicable Procedures so require, an
          Opinion of Counsel in form reasonably acceptable to the Registrar to
          the effect that such exchange or transfer is in compliance with the
          Securities Act and that the restrictions on transfer contained herein
          and in the Private Placement Legend are no longer required in order to
          maintain compliance with the Securities Act; or

                  (E)      such transfer or exchange is pursuant to an effective
         registration statement under the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause
to be increased the aggregate principal amount of the Unrestricted Global Note.

         (iii)    Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note of
the same series or transfer such Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note of
the same series at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note
and increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes of the same series.

                           If any such exchange or transfer from a Definitive
Note to a beneficial interest is effected pursuant to subparagraph (ii)(B),
(ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet
been issued, the Issuers shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.

                  (e)      Transfer and Exchange of Definitive Notes for
Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by its attorney, duly authorized in writing. In
addition, the requesting

                                      -38-


Holder shall provide any additional certifications, documents and information,
as applicable, required pursuant to the following provisions of this Section
2.06(e).

                  (i)      Restricted Definitive Notes to Restricted Definitive
         Notes. Any Restricted Definitive Note may be transferred to and
         registered in the name of Persons who take delivery thereof in the form
         of a Restricted Definitive Note of the same series if the Registrar
         receives the following:

                           (A)      if the transfer will be made pursuant to
                  Rule 144A under the Securities Act, then the transferor must
                  deliver a certificate in the form of Exhibit B hereto,
                  including the certifications in item (1) thereof;

                           (B)      if the transfer will be made pursuant to
                  Rule 903 or Rule 904, then the transferor must deliver a
                  certificate in the form of Exhibit B hereto, including the
                  certifications in item (2) thereof; and

                           (C)      if the transfer will be made pursuant to any
                  other exemption from the registration requirements of the
                  Securities Act, then the transferor must deliver a certificate
                  in the form of Exhibit B hereto, including the certifications,
                  certificates and Opinion of Counsel required by item (3)
                  thereof, if applicable.

                  (ii)     Restricted Definitive Notes to Unrestricted
         Definitive Notes. Any Restricted Definitive Note may be exchanged by
         the Holder thereof for an Unrestricted Definitive Note of the same
         series or transferred to a Person or Persons who take delivery thereof
         in the form of an Unrestricted Definitive Note of the same series if:

                           (A)      such exchange or transfer is effected
                  pursuant to an Exchange Offer in accordance with a
                  Registration Rights Agreement and the Holder, in the case of
                  an exchange, or the transferee, in the case of a transfer,
                  certifies in the applicable Letter of Transmittal that it is
                  not (1) a broker-dealer, (2) a Person participating in the
                  distribution of the relevant Exchange Notes or (3) a Person
                  who is an affiliate (as defined in Rule 144) of the Issuers;

                           (B)      any such transfer is effected pursuant to a
                  Shelf Registration Statement in accordance with a Registration
                  Rights Agreement;

                           (C)      any such transfer is effected by a
                  broker-dealer pursuant to an Exchange Offer Registration
                  Statement in accordance with a Registration Rights Agreement;

                           (D)      such exchange or transfer (i) is effected
                  after the expiration of the 40-day distribution compliance
                  period set forth in Regulation S or (ii) is (and together with
                  any transfer would be) effected pursuant to an exemption from
                  registration under the Securities Act provided by Rule 144 and
                  the Registrar receives the following:

                                    (1)      if the Holder of such Restricted
                           Definitive Notes proposes to exchange such Notes for
                           an Unrestricted Definitive Note of the same series, a
                           certificate from such Holder in the form of Exhibit C
                           hereto, including the certifications in item (1)(d)
                           thereof; or

                                    (2)      if the Holder of such Restricted
                           Definitive Notes proposes to transfer such Notes to a
                           Person who shall take delivery thereof in the form of
                           an

                                      -39-


                           Unrestricted Definitive Note of the same series, a
                           certificate from such Holder in the form of Exhibit B
                           hereto, including the certifications in item (4)
                           thereof;

                  and, in each such case set forth in this subparagraph (D), if
                  the Registrar so requests, an Opinion of Counsel in form
                  reasonably acceptable to the Issuers to the effect that such
                  exchange or transfer is in compliance with the Securities Act
                  and that the restrictions on transfer contained herein and in
                  the Private Placement Legend are no longer required in order
                  to maintain compliance with the Securities Act; or

                           (E)      such exchange or transfer is effected
                  pursuant to an effective registration statement under the
                  Securities Act.

                  (iii)    Unrestricted Definitive Notes to Unrestricted
         Definitive Notes. A Holder of Unrestricted Definitive Notes may
         transfer such Notes to a Person who takes delivery thereof in the form
         of an Unrestricted Definitive Note of the same series. Upon receipt of
         a request to register such a transfer, the Registrar shall register the
         Unrestricted Definitive Notes pursuant to the instructions from the
         Holder thereof.

                  (f)      Exchange Offer. Upon the occurrence of an Exchange
Offer in accordance with a Registration Rights Agreement, the Issuers shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes
in an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes of the same series tendered for
acceptance by Persons that certify in the applicable Letters of Transmittal that
(x) they are not broker-dealers, (y) they are not participating in a
distribution of the relevant Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Issuers, and accepted for exchange in the relevant
Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal
to the principal amount of the Restricted Definitive Notes of the same series
accepted for exchange in the relevant Exchange Offer. Concurrently with the
issuance of such Notes, the Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Notes to be reduced accordingly, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes of the same series in the appropriate principal amount.

                  (g)      Legends. The following legends shall appear on the
face of all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

                  (i)      Private Placement Legend.

                  (A)      Except as permitted by subparagraph (B) below, each
         Global Note and each Definitive Note (and all Notes issued in exchange
         therefor or substitution thereof) shall bear the legend in
         substantially the following form:

                  "THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
                  UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
                  AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
                  EXCEPT (a)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
                  IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
                  144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
                  OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
                  TRANSACTION MEETING THE REQUIREMENTS

                                      -40-


                  OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH
                  RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
                  (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
                  EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
                  ACT, SUBJECT TO THE CERTIFICATION AND DELIVERY REQUIREMENTS OF
                  THE INDENTURE GOVERNING THE NOTES, (4) PURSUANT TO AN
                  EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
                  BY RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN
                  EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
                  (b) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
                  STATES OF THE UNITED STATES."

                  (B)      Notwithstanding the foregoing, any Global Note or
         Definitive Note issued pursuant to subparagraph (b)(iv), (c)(ii),
         (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section
         2.06 (and all Notes issued in exchange therefor or substitution
         thereof) shall not bear the Private Placement Legend.

                  (ii)     Global Note Legend. Each Global Note shall bear a
         legend in substantially the following form:

                  "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
                  INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
                  THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
                  TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
                  (i) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
                  REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (ii) THIS
                  GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
                  TO SECTION 2.06(a) OF THE INDENTURE, (iii) THIS GLOBAL NOTE
                  MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
                  SECTION 2.11 OF THE INDENTURE AND (iv) THIS GLOBAL NOTE MAY BE
                  TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
                  CONSENT OF THE ISSUERS."

                  (iii)    Regulation S Legend. Each temporary Regulation S
         Global Note should bear a legend in substantially the following form:

                  "THE ISSUERS HAVE REQUESTED THE DEPOSITORY TRUST COMPANY NOT
                  TO TRANSFER ANY INTEREST IN THIS GLOBAL NOTE BY EFFECTING
                  BOOK-ENTRY DELIVERIES UNTIL JUNE 6, 2004."

                  (h)      Cancellation and/or Adjustment of Global Notes. At
such time as all beneficial interests in a particular Global Note have been
exchanged for Definitive Notes or a particular Global Note has been redeemed,
repurchased or canceled in whole and not in part, each such Global Note shall be
returned to or retained and canceled by the Trustee in accordance with Section
2.11. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such

                                      -41-


other Global Note shall be increased accordingly and an endorsement shall be
made on such Global Note by the Trustee or by the Depositary at the direction of
the Trustee to reflect such increase.

         (i)      General Provisions Relating to Transfers and Exchanges.

                  (i)      To permit registrations of transfers and exchanges,
the Issuers shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Issuers' order or at the Registrar's request.

                  (ii)     No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Issuers may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.10,
3.09, 4.11, 4.16 and 9.05).

                  (iii)    The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.

                  (iv)     All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes shall
be the valid obligations of the Issuers, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.

                  (v)      The Issuers shall not be required to register the
transfer of or to exchange a Note for a period of 15 days immediately preceding
the redemption of a Note or between a record date and the next succeeding
interest payment date.

                  (vi)     Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Issuers may deem and treat
the Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on such
Notes and for all other purposes, and none of the Trustee, any Agent or the
Issuers shall be affected by notice to the contrary.

                  (vii)    The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02.

                  (viii)   All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by facsimile.

                  Section 2.07. Replacement Notes.

                           If any mutilated Note is surrendered to the Trustee
or the Issuers and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Issuers shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Issuers, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Issuers may charge for their expenses in replacing a
Note.

                                      -42-


                           Every replacement Note is an additional legally
binding obligation of the Issuers and shall be entitled to all of the benefits
of this Indenture equally and proportionately with all other Notes duly issued
hereunder.

                  Section 2.08. Outstanding Notes.

                           The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions of this Indenture, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.

                           If a Note is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.

                           If the principal amount of any Note is considered
paid under Section 4.01, it ceases to be outstanding and interest on it ceases
to accrue.

                           If the Paying Agent (other than an Issuer, a
Subsidiary or an Affiliate of any thereof) holds, on a redemption date or
maturity date, money sufficient to pay Notes payable on that date, then on and
after that date such Notes shall be deemed to be no longer outstanding and shall
cease to accrue interest.

                  Section 2.09. Treasury Notes.

                           In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by an Issuer, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with an Issuer, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee knows are so owned shall be so disregarded.

                  Section 2.10. Temporary Notes.

                           Until certificates representing Notes are ready for
delivery, the Issuers may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes. Temporary Notes shall
be substantially in the form of certificated Notes but may have variations that
the Issuers consider appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Issuers shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes of the same series.

                           Holders of temporary Notes shall be entitled to all
of the benefits of this Indenture.

                  Section 2.11. Cancellation.

                           The Issuers at any time may deliver Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall dispose of such canceled

                                      -43-


Notes in its customary manner. The Issuers may not issue new Notes to replace
Notes that they have paid or that have been delivered to the Trustee for
cancellation.

                  Section 2.12. Defaulted Interest.

                           If the Issuers default in a payment of interest on
the Notes, they shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted interest, to the Persons
who are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01. The Issuers shall notify the Trustee
in writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. The Issuers shall fix or cause to be fixed
each such special record date and payment date; provided, however, that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
the Issuers (or, upon the written request of the Issuers, the Trustee in the
name and at the expense of the Issuers) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.

                                   ARTICLE 3

                            REDEMPTION AND PREPAYMENT

                  Section 3.01. Notices to Trustee.

                           If the Issuers elect to redeem Notes pursuant to the
optional redemption provisions of Section 3.07, they shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the paragraph of the Notes and/or the
clause of this Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the
redemption price.

                  Section 3.02. Selection of Notes to Be Redeemed.

                           If less than all of the Eight Year Notes or Ten Year
Notes, as the case may be, are to be redeemed at any time, the Trustee shall
select the Notes of that series to be redeemed or purchased among the Holders of
the Notes of that series as follows:

         (a)      in compliance with the requirements of the principal national
         securities exchange, if any, on which such Notes are listed; or

         (b)      if such Notes are not so listed, on a pro rata basis, by lot
         or in accordance with any other method the Trustee shall deem fair and
         appropriate.

In the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.

                           The Trustee shall promptly notify the Issuers in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes and portions of Notes selected shall be in amounts of $1,000 or whole
multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if
not a multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.

                                      -44-


                  Section 3.03. Notice of Redemption.

                           Subject to the provisions of Section 3.09, at least
30 days but not more than 60 days before a redemption date, the Issuers shall
mail or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.

                           The notice shall identify the Notes to be redeemed
and shall state:

                  (a)      the redemption date;

                  (b)      the redemption price;

                  (c)      if any Note is being redeemed in part, the portion of
         the principal amount of such Note to be redeemed and that, after the
         redemption date upon surrender of such Note, a new Note or Notes in
         principal amount equal to the unredeemed portion shall be issued upon
         cancellation of the original Note;

                  (d)      the name and address of the Paying Agent;

                  (e)      that Notes called for redemption must be surrendered
         to the Paying Agent to collect the redemption price;

                  (f)      that, unless the Issuers default in making such
         redemption payment, interest on Notes called for redemption, or if any
         Note is being redeemed only in part, interest on a portion of the
         principal amount of such Note to be redeemed, ceases to accrue on and
         after the redemption date;

                  (g)      the paragraph of the Notes and/or Section of this
         Indenture pursuant to which the Notes called for redemption are being
         redeemed; and

                  (h)      that no representation is made as to the correctness
         or accuracy of the CUSIP number, if any, listed in such notice or
         printed on the Notes.

                           At the Issuers' request, the Trustee shall give the
notice of redemption in the Issuers' name and at their expense; provided,
however, that each of the Issuers shall have delivered to the Trustee, at least
45 days prior to the redemption date, an Officers' Certificate requesting that
the Trustee give such notice and setting forth the information to be stated in
such notice as provided in the preceding paragraph.

                  Section 3.04. Effect of Notice of Redemption.

                           Once notice of redemption is mailed in accordance
with Section 3.03, Notes called for redemption, or if any Note is being redeemed
only in part, the portion of the principal amount of such Note to be redeemed,
become irrevocably due and payable on the redemption date at the redemption
price. A notice of redemption may not be conditional.

                  Section 3.05. Deposit of Redemption Price.

                           At or prior to 10:00 a.m., New York City time, on the
redemption date, the Issuers shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued interest on
all Notes to be redeemed on that date. The Trustee or the Paying Agent shall

                                      -45-


promptly return to the Issuers any money deposited with the Trustee or the
Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.

                           If the Issuers comply with the provisions of the
preceding paragraph, on and after the redemption date, interest shall cease to
accrue on the Notes or the portions of Notes called for redemption. If a Note is
redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Note was registered at the close of business on such
record date. If any Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Issuers to comply with
the preceding paragraph, interest shall be paid on the unpaid principal, from
the redemption date until such principal is paid, and to the extent lawful on
any interest not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.01.

                  Section 3.06. Notes Redeemed in Part.

                           Upon surrender of a Note that is redeemed in part,
the Issuers shall issue and, upon the Issuers' written request, the Trustee
shall authenticate for the Holder at the expense of the Issuers a new Note of
the same series equal in principal amount to the unredeemed portion of the Note
surrendered.

                  Section 3.07. Optional Redemption.

                  (a)      Except as set forth in clause (b) of this Section
3.07, the Issuers shall not have the option to redeem the Ten Year Notes prior
to April 30, 2009. Thereafter, the Issuers shall have the option to redeem the
Ten Year Notes, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on April 30 of the years indicated below:



         Year                                     Percentage
         ----                                     ----------
                                               
2009                                               104.188%
2010                                               102.792%
2011                                               101.396%
2012 and thereafter                                100.000%


                  (b)      Notwithstanding the provisions of clause (a) of this
Section 3.07, at any time prior to April 30, 2007, the Issuers may, on any one
or more occasions, redeem up to 35% of the original aggregate principal amount
of the Ten Year Notes (including the principal amount of any Additional Ten Year
Notes) issued under this Indenture on a pro rata basis (or nearly as pro rata as
practicable), at a redemption price of 108.375% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the redemption date, with the net
cash proceeds of one or more Equity Offerings; provided, however, that:

                  (i)      at least 65% of the original aggregate principal
         amount of Ten Year Notes (including the principal amount of any
         Additional Ten Year Notes) issued under this Indenture remains
         outstanding immediately after the occurrence of such redemption
         (excluding Ten Year Notes held by the Company and its Subsidiaries);
         and

                  (ii)     the redemption must occur within 60 days of the date
         of the closing of such Equity Offering.

                                      -46-


                  (c)      The Issuers may, at any time and from time to time,
         at their option, redeem the outstanding Eight Year Notes, in whole or
         in part, at a redemption price equal to 100% of the principal amount
         thereof plus accrued and unpaid interest, if any, to the redemption
         date, plus the Make-Whole Premium.

                  (d)      Notwithstanding the provisions of clause (c) of this
         Section 3.07, at any time prior to April 30, 2007, the Issuers may, on
         any one or more occasions, redeem up to 35% of the original aggregate
         principal amount of the Eight Year Notes issued on the Issue Date
         (including the principal amount of any Additional Eight Year Notes)
         issued under) this Indenture on a pro rata basis (or nearly as pro rata
         as practicable), at a redemption price of 108.000% of the principal
         amount thereof, plus accrued and unpaid interest, if any, to the
         redemption date, with the net cash proceeds of one or more Equity
         Offerings; provided, however, that:

                           (i)      at least 65% of the original aggregate
         principal amount of the Eight Year Notes issued on the Issue Date
         (including the principal amount of any Additional Eight Year Notes
         issued) under this Indenture remains outstanding immediately after the
         occurrence of such redemption (excluding Eight Year Notes held by the
         Issuers and their Subsidiaries); and

                           (ii)     the redemption must occur within 60 days of
         the date of the closing of such Equity Offering.

                  (e)      Any redemption pursuant to this Section 3.07 shall be
         made pursuant to the provisions of Sections 3.01 through 3.06.

                  Section 3.08. Mandatory Redemption.

                           Except as otherwise provided in Section 4.11 or
Section 4.16 below, the Issuers shall not be required to make mandatory
redemption payments with respect to the Notes.

                  Section 3.09. Offer to Purchase by Application of Excess
Proceeds.

                           In the event that the Issuers shall be required to
commence an offer to all Holders to purchase Notes pursuant to Section 4.11 (an
"Asset Sale Offer"), the Issuers shall follow the procedures specified below.

                           The Asset Sale Offer shall remain open for a period
of 20 Business Days following its commencement and no longer, except to the
extent that a longer period is required by applicable law (the "Offer Period").
No later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Issuers shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.11 (the "Offer Amount") or, if
less than the Offer Amount has been tendered, all Notes tendered in response to
the Asset Sale Offer. Payment for any Notes so purchased shall be made in the
same manner as interest payments are made. Unless the Issuers default in making
such payment, any Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrue interest after the Purchase Date.

                           If the Purchase Date is on or after an interest
record date and on or before the related interest payment date, any accrued and
unpaid interest shall be paid to the Person in whose name a Note is registered
at the close of business on such record date, and no Special Interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.

                                      -47-


                           Upon the commencement of an Asset Sale Offer the
Issuers shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice,
which shall govern the terms of the Asset Sale Offer, shall state:

                  (a)      that the Asset Sale Offer is being made pursuant to
         this Section 3.09 and Section 4.11 and the length of time the Asset
         Sale Offer shall remain open;

                  (b)      the Offer Amount, the purchase price and the Purchase
         Date;

                  (c)      that any Note not tendered or accepted for payment
         shall continue to accrue interest;

                  (d)      that, unless the Issuers default in making such
         payment, any Note accepted for payment pursuant to the Asset Sale Offer
         shall cease to accrue interest after the Purchase Date;

                  (e)      that Holders electing to have a Note purchased
         pursuant to an Asset Sale Offer may elect to have Notes purchased in
         integral multiples of $1,000 only;

                  (f)      that Holders electing to have a Note purchased
         pursuant to any Asset Sale Offer shall be required to surrender the
         Note, with the form entitled "Option of Holder to Elect Purchase" on
         the reverse of the Note completed, or transfer by book-entry transfer,
         to the Issuers, a depositary, if appointed by the Issuers, or a Paying
         Agent at the address specified in the notice at least three days before
         the Purchase Date;

                  (g)      that Holders shall be entitled to withdraw their
         election if the Issuers, the depositary or the Paying Agent, as the
         case may be, receives, not later than the expiration of the Offer
         Period, a telegram, telex, facsimile transmission or letter setting
         forth the name of the Holder, the principal amount of the Note the
         Holder delivered for purchase and a statement that such Holder is
         withdrawing his election to have such Note purchased;

                  (h)      that, if the aggregate principal amount of Notes
         surrendered by Holders exceeds the Offer Amount, the Issuers shall
         select the Notes to be purchased on a pro rata basis (with such
         adjustments as may be deemed appropriate by the Issuers so that only
         Notes in denominations of $1,000, or integral multiples thereof, shall
         be purchased); and

                  (i)      that Holders whose Notes were purchased only in part
         shall be issued new Notes equal in principal amount to the unpurchased
         portion of the Notes surrendered (or transferred by book-entry
         transfer).

                           On or before the Purchase Date, the Issuers shall, to
the extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Offer Amount of Notes or portions thereof tendered pursuant to
the Asset Sale Offer or if less than the Offer Amount has been tendered, all
Notes tendered, and shall deliver to the Trustee an Officers' Certificate
stating that such Notes or portions thereof were accepted for payment by the
Issuers in accordance with the terms of this Section 3.09. The Issuers, the
Depositary or the Paying Agent, as the case may be, shall promptly (but in any
case not later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by the Issuers for purchase, and the Issuers shall
promptly issue a new Note of the same series, and the Trustee, upon written
request from the Issuers, shall authenticate and mail or deliver such new Note
to such Holder, in a principal amount equal to any

                                      -48-


unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.

                           Other than as specifically provided in this Section
3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the
provisions of Sections 3.01 through 3.06.

                                   ARTICLE 4

                                    COVENANTS

                  Section 4.01. Payment of Notes.

                           The Issuers shall pay or cause to be paid the
principal, premium, if any, and interest on the Notes on the dates and in the
manner provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Issuers
or a Subsidiary thereof, holds as of 10:00 a.m., New York City time, on the due
date money deposited by the Issuers in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. The Issuers shall pay all Special Interest, if any, in the
same manner on the dates and in the amounts set forth in any Registration Rights
Agreement.

                           The Issuers shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 2% per annum in excess of the then applicable
interest rate on the Notes to the extent lawful; they shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the same rate to the extent lawful.

                  Section 4.02. Maintenance of Office or Agency.

                           The Issuers shall maintain in the Borough of
Manhattan, The City of New York, an office or agency (which may be an office of
the Trustee or an Affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Issuers in respect of the Notes and this
Indenture may be served. The Issuers shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuers shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.

                           The Issuers may also from time to time designate one
or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Issuers of their obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York for such purposes. The
Issuers shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

                           The Issuers hereby designate Wells Fargo Bank, N.A.,
at Corporate Trust Services, MAC N9303-120, Sixth Street and Marquette Avenue,
Minneapolis, MN 55479, as one such office or agency of the Issuers in accordance
with Section 2.03.

                                      -49-


                  Section 4.03. Reports.

                           So long as any Notes are outstanding, the Company
shall furnish to the Holders, within the time periods that such information
would have otherwise been required to have been provided to the Commission if
the rules and regulations applicable to the filing of such information were
applicable to the Company:

                  (1)      all quarterly (commencing with the quarter ended
         March 31, 2004) and annual (commencing with the fiscal year ending
         December 31, 2004) financial and other information that would be
         required to be contained in a filing with the Commission on Forms 10-Q
         and 10-K if the Issuers were required to file such forms, including a
         "Management's Discussion and Analysis of Financial Condition and
         Results of Operations" section (together with the certifications that
         would be required to be filed with the Commission pursuant to Section
         302 of the Sarbanes-Oxley Act of 2002, unless such certifications are
         provided by any Parent in a filing with the Commission) and, with
         respect to the annual information only, a report on the annual
         consolidated financial statements of the Company by its independent
         public accountants; provided, however, that the Company shall not be
         required to furnish separate financial statements for any Guarantor or
         for any Subsidiary, individually or as a group, whose equity securities
         constitute part of the Collateral; and

                  (2)      all current reports that would be required to be
         filed with the Commission on Form 8-K if the Issuers were required to
         file such reports.

                           If the Company has designated any of its Subsidiaries
as Unrestricted Subsidiaries, then the quarterly and annual financial
information required by the preceding paragraph shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in Management's Discussion and Analysis of Financial
Condition and Results of Operations, of the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted Subsidiaries
of the Company.

                           In addition, the Issuers shall cause a copy of all of
the information and reports referred to in clauses (1) and (2) above to be
posted, no later than the date such information is required to be furnished to
registered Holders, on the website of CCI (and remain there for a period of one
year from the date of such posting). So long as any Notes remain outstanding,
the Company will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4).

                           During any period when the rules and regulations of
the Commission applicable to filing of financial reports of the kinds described
in the first paragraph of this Section 4.03 are not applicable to the Company,
the Company shall not be required to comply with the requirements of Section 314
of the TIA except Section 314(b)(2) thereof.

                  Section 4.04. Compliance Certificate.

                  (a)      The Issuers shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Issuers and their Subsidiaries during the
preceding fiscal year have been made under the supervision of the signing
Officers with a view to determining whether the Issuers have kept, observed,
performed and fulfilled their obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Issuers have kept, observed, performed and fulfilled
each and every covenant

                                      -50-


contained in this Indenture and are not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Issuers are taking or propose to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Issuers are taking or propose to
take with respect thereto.

                  (b)      So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
annual financial statements delivered pursuant to Section 4.03 above shall be
accompanied by a written statement of the Company's independent public
accountants (each of whom shall be a firm of established national reputation)
that in making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to believe
that either of the Issuers has violated any provisions of Article 4 or Article 5
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation. In the event that, after the Issuers have used their reasonable
best efforts to obtain the written statement of the Company's independent public
accountants required by the provisions of this paragraph, such statement cannot
be obtained, the Issuers shall deliver, in satisfaction of their obligations
under this Section 4.04, an Officers' Certificate (i) certifying that they have
used their reasonable best efforts to obtain such required statement but were
unable to do so and (ii) attaching the written statement of the Company's
accountants that the Company received in lieu thereof.

                  (c)      The Issuers shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Issuers are taking or propose to
take with respect thereto.

                  Section 4.05. Taxes.

                           The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders.

                           Section 4.06. Stay, Extension and Usury Laws.

                           Each of the Issuers covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and each of the
Issuers (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law has been enacted.

                  Section 4.07. Restricted Payments.

                           The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly:

                                      -51-


                  (1)      declare or pay any dividend or make any other payment
         or distribution on account of its or any of its Restricted
         Subsidiaries' Equity Interests (including, without limitation, any
         payment in connection with any merger or consolidation involving the
         Company or any of its Restricted Subsidiaries) or to the direct or
         indirect holders of the Company's or any of its Restricted
         Subsidiaries' Equity Interests in their capacity as such (other than
         dividends or distributions payable (x) solely in Equity Interests
         (other than Disqualified Stock) of the Company or (y), in the case of
         the Company and its Restricted Subsidiaries, to the Company or a
         Restricted Subsidiary thereof); or

                  (2)      purchase, redeem or otherwise acquire or retire for
         value (including without limitation, in connection with any merger or
         consolidation involving the Company or any of its Restricted
         Subsidiaries) any Equity Interests of the Company or any direct or
         indirect Parent of the Company or any Restricted Subsidiary of the
         Company (other than, in the case of the Company and its Restricted
         Subsidiaries, any such Equity Interests owned by the Company or any of
         its Restricted Subsidiaries)

(all such payments and other actions set forth in clauses (1) and (2) above are
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:

                  (i)      no Default or Event of Default under this Indenture
         shall have occurred and be continuing or would occur as a consequence
         thereof;

                  (ii)     the Company would, at the time of such Restricted
         Payment and after giving pro forma effect thereto as if such Restricted
         Payment had been made at the beginning of the applicable quarter
         period, have been permitted to incur at least $1.00 of additional
         Indebtedness pursuant to the Leverage Ratio test set forth in the first
         paragraph of Section 4.10; and

                  (iii)    such Restricted Payment, together with the aggregate
         amount of all other Restricted Payments made by the Company and its
         Restricted Subsidiaries from and after the Issue Date (excluding
         Restricted Payments permitted by clauses (2), (3), (4), (5), (6) and
         (7) of the next succeeding paragraph), shall not exceed, at the date of
         determination, the sum of:

                           (a)      an amount equal to 100% of the Consolidated
                  EBITDA of the Company for the period beginning on the first
                  day of the fiscal quarter commencing April 1, 2004 to the end
                  of the Company's most recently ended full fiscal quarter for
                  which internal financial statements are available, taken as a
                  single accounting period, less the product of 1.3 times the
                  Consolidated Interest Expense of the Company for such period,
                  plus

                           (b)      an amount equal to 100% of Capital Stock
                  Sale Proceeds less any amount of such Capital Stock Sale
                  Proceeds used in connection with an Investment made on or
                  after the Issue Date and on or prior to the date such
                  Restricted Payment is made (the "Reference Date") pursuant to
                  clause (5) of the definition of "Permitted Investments," plus

                           (c)      $100 million.

                           So long as no Default under this Indenture has
occurred and is continuing or would be caused thereby, the preceding provisions
shall not prohibit:

                                      -52-


                  (1)      the payment of any dividend within 60 days after the
         date of declaration thereof, if at said date of declaration such
         payment would have complied with the provisions of this Indenture;

                  (2)      regardless of whether a Default then exists, the
         payment of any dividend or distribution made in respect of any calendar
         year or portion thereof during which the Company or any of its
         Subsidiaries is a Person that is not treated as a separate tax paying
         entity for United States federal income tax purposes by the Company and
         its Subsidiaries (directly or indirectly) to the direct or indirect
         holders of the Equity Interests of the Company or its Subsidiaries that
         are Persons that are treated as a separate tax paying entity for United
         States federal income tax purposes, in an amount sufficient to permit
         each such holder to pay the actual income taxes (including required
         estimated tax installments) that are required to be paid by it with
         respect to the taxable income of any Parent (through its direct or
         indirect ownership of the Company and/or its Subsidiaries), the
         Company, its Subsidiaries or any Unrestricted Subsidiary, as
         applicable, in any calendar year, as estimated in good faith by the
         Company or its Subsidiaries, as the case may be;

                  (3)      regardless of whether a Default then exists, the
         payment of any dividend by a Restricted Subsidiary of the Company to
         the holders of its common Equity Interests on a pro rata basis;

                  (4)      the payment of any dividend on the Helicon Preferred
         Stock or the redemption, repurchase, retirement or other acquisition of
         the Helicon Preferred Stock in an amount not in excess of its aggregate
         liquidation value;

                  (5)      the repurchase, redemption or other acquisition or
         retirement for value, or the payment of any dividend or distribution to
         the extent necessary to permit the repurchase, redemption or other
         acquisition or retirement for value, of any Equity Interests of the
         Company or a Parent of the Company held by any member of the Company's
         or such Parent's management pursuant to any management equity
         subscription agreement or stock option agreement entered into in
         accordance with the policies of the Company or any Parent; provided,
         however, that the aggregate price paid for all such repurchased,
         redeemed, acquired or retired Equity Interests shall not exceed $10
         million in any fiscal year of the Issuers;

                  (6)      payment of fees in connection with any acquisition,
         merger or similar transaction in an amount that does not exceed an
         amount equal to 1.25% of the transaction value of such acquisition,
         merger or similar transaction; and

                  (7)      additional Restricted Payments directly or indirectly
         to any Parent (i) regardless of whether a Default exists (other than a
         Default under Section 6.01(1), (2), (7) or (8)), for the purpose of
         enabling Charter Holdings, CCOH, CCH II and/or any Charter Refinancing
         Subsidiary to pay interest when due on Indebtedness under the Charter
         Holdings Indentures, the CCOH Indentures, the CCH II Indentures and/or
         any Charter Refinancing Indebtedness, (ii) for the purpose of enabling
         CCI and/or any Charter Refinancing Subsidiary to pay interest when due
         on Indebtedness under the CCI Indentures and/or any Charter Refinancing
         Indebtedness and (iii) so long as the Company would have been
         permitted, at the time of such Restricted Payment and after giving pro
         forma effect thereto as if such Restricted Payment had been made at the
         beginning of the applicable quarter period, to incur at least $1.00 of
         additional Indebtedness pursuant to the Leverage Ratio test set forth
         in the first paragraph of Section 4.10, (A) consisting of dividends or
         distributions to the extent required to enable CCH II, Charter
         Holdings, CCI, CCOH or any Charter Refinancing Subsidiary to defease,
         redeem, repurchase, prepay, repay, discharge or otherwise acquire or
         retire for value Indebtedness under the CCH II Indentures, the Charter
         Holdings

                                      -53-


         Indentures, the CCI Indentures, the CCOH Indentures or any Charter
         Refinancing Indebtedness (including any expenses incurred by any Parent
         in connection therewith) or (B) consisting of purchases, redemptions or
         other acquisitions by the Company or its Restricted Subsidiaries of
         Indebtedness under the CCH II Indentures, the Charter Holdings
         Indentures, the CCI Indentures, the CCOH Indentures or any Charter
         Refinancing Indebtedness (including any expenses incurred by the
         Company and its Restricted Subsidiaries in connection therewith) and
         the distribution, loan or investment to any Parent of Indebtedness so
         purchased, redeemed or acquired.

                           The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued by the Company
or any of its Restricted Subsidiaries pursuant to the Restricted Payment. The
fair market value of any assets or securities that are required to be valued by
this Section 4.07 shall be determined by the Board of Directors of the Company,
whose resolution with respect thereto shall be delivered to the Trustee. Such
Board of Directors' determination must be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if the fair market value exceeds $100 million.

                           Not later than the date of making any Restricted
Payment involving an amount or fair market value in excess of $10 million, the
Issuers shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, together with a copy
of any fairness opinion or appraisal required by this Indenture.

                  Section 4.08. Investments.

                           The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly:

                  (1)      make any Restricted Investment; or

                  (2)      allow any of its Restricted Subsidiaries to become an
         Unrestricted Subsidiary, unless, in each case:

                  (a)      no Default or Event of Default under this Indenture
         shall have occurred and be continuing or would occur as a consequence
         thereof; and

                  (b)      the Company would, at the time of, and after giving
         effect to, such Restricted Investment or such designation of a
         Restricted Subsidiary as an Unrestricted Subsidiary, have been
         permitted to incur at least $1.00 of additional Indebtedness pursuant
         to the Leverage Ratio test set forth in the first paragraph of Section
         4.10.

                           An Unrestricted Subsidiary may be redesignated as a
Restricted Subsidiary if such redesignation would not cause a Default.

                  Section 4.09. Dividend and Other Payment Restrictions
Affecting Subsidiaries.

                           The Company shall not, directly or indirectly, create
or permit to exist or become effective any encumbrance or restriction on the
ability of any of its Restricted Subsidiaries to:

                  (1)      pay dividends or make any other distributions on its
         Capital Stock to the Company or any of its Restricted Subsidiaries, or
         with respect to any other interest or participation in,

                                      -54-


         or measured by, its profits, or pay any Indebtedness owed to the
         Company or any of its Restricted Subsidiaries;

                  (2)      make loans or advances to the Company or any of its
         Restricted Subsidiaries; or

                  (3)      transfer any of its properties or assets to the
         Company or any of its Restricted Subsidiaries.

                           The preceding restrictions shall not apply to
encumbrances or restrictions existing under or by reason of:

                  (1)      Existing Indebtedness as in effect on the Issue Date
         (including, without limitation, Indebtedness under any of the Credit
         Facilities) and any amendments, modifications, restatements, renewals,
         increases, supplements, refundings, replacements or refinancings
         thereof, provided, however, that such amendments, modifications,
         restatements, renewals, increases, supplements, refundings,
         replacements or refinancings are no more restrictive, taken as a whole,
         with respect to such dividend and other payment restrictions than those
         contained in the most restrictive Existing Indebtedness, as in effect
         on the Issue Date;

                  (2)      this Indenture and the Notes;

                  (3)      applicable law;

                  (4)      any instrument governing Indebtedness or Capital
         Stock of a Person acquired by the Company or any of its Restricted
         Subsidiaries as in effect at the time of such acquisition (except to
         the extent such Indebtedness was incurred in connection with or in
         contemplation of such acquisition), which encumbrance or restriction is
         not applicable to any Person, or the properties or assets of any
         Person, other than the Person, or the property or assets of the Person,
         so acquired; provided, however, that, in the case of Indebtedness, such
         Indebtedness was permitted by the terms of this Indenture to be
         incurred;

                  (5)      customary non-assignment provisions in leases,
         franchise agreements and other commercial agreements entered into in
         the ordinary course of business and consistent with past practices;

                  (6)      purchase money obligations for property acquired in
         the ordinary course of business that impose restrictions on the
         property so acquired of the nature described in clause (3) of the
         preceding paragraph;

                  (7)      any agreement for the sale or other disposition of a
         Restricted Subsidiary that restricts distributions by such Restricted
         Subsidiary pending its sale or other disposition;

                  (8)      Permitted Refinancing Indebtedness; provided,
         however, that the restrictions contained in the agreements governing
         such Permitted Refinancing Indebtedness are no more restrictive, taken
         as a whole, than those contained in the agreements governing the
         Indebtedness being refinanced;

                  (9)      Liens securing Indebtedness or other obligations
         otherwise permitted to be incurred under Section 4.14 that limit the
         right of the Company or any of its Restricted Subsidiaries to dispose
         of the assets subject to such Lien;

                                      -55-


                  (10)     provisions with respect to the disposition or
         distribution of assets or property in joint venture agreements and
         other similar agreements entered into in the ordinary course of
         business;

                  (11)     restrictions on cash or other deposits or net worth
         imposed by customers under contracts entered into in the ordinary
         course of business;

                  (12)     restrictions contained in the terms of Indebtedness
         permitted to be incurred under Section 4.10; provided, however, that
         such restrictions are no more restrictive, taken as a whole, than the
         terms contained in the most restrictive, together or individually, of
         the Credit Facilities as in effect on the Issue Date; and

                  (13)     restrictions that are not materially more
         restrictive, taken as a whole, than customary provisions in comparable
         financings and that the management of the Company determines, at the
         time of such financing, will not materially impair the Issuers' ability
         to make payments as required under the Notes.

                  Section 4.10. Incurrence of Indebtedness and Issuance of
Preferred Stock.

                           The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted Subsidiaries to
issue any shares of Disqualified Stock or Preferred Stock; provided, however,
that the Company or any of its Restricted Subsidiaries that are Guarantors may
incur Indebtedness, the Company may issue Disqualified Stock and Restricted
Subsidiaries of the Company that are Guarantors may issue Preferred Stock if the
Leverage Ratio of the Company and its Restricted Subsidiaries would have been
not greater than 4.25 to 1.0 determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had
been issued, as the case may be, at the beginning of the most recently ended
fiscal quarter. Debt incurred under this paragraph, or once incurred under this
paragraph and subsequently refinanced under clause (5) of the next succeeding
paragraph, is collectively referred to as "Ratio Debt").

                           So long as no Default under this Indenture shall have
occurred and be continuing or would be caused thereby, the first paragraph of
this Section 4.10 shall not prohibit the incurrence of any of the following
items of Indebtedness (collectively, "Permitted Debt"):

                  (1)      the incurrence of Indebtedness under the Credit
         Facilities by (x) the Company and any Restricted Subsidiary that is a
         guarantor under the Credit Facilities prior to the Guarantee and Pledge
         Date and (y) the Company and its Restricted Subsidiaries that are
         Guarantors (or by Subsidiaries that cease to be Guarantors as a result
         of the operation of (i) the first paragraph (a) of Section 11.04 or
         (ii) the second paragraph of clause (a) of Section 11.04 and are no
         longer otherwise obligors with respect to the CCO Credit Facility and
         the Related Obligations, except continuing to secure the Company's
         obligations under the CCO Credit Facility and the Related Obligations
         and the Issuers' obligations with respect to the Notes under Article
         10); provided, however, that the aggregate principal amount of all
         Indebtedness of the Company and its Restricted Subsidiaries outstanding
         under this clause (1) for all Credit Facilities after giving effect to
         such incurrence does not exceed an amount equal to $6.8 billion less
         the aggregate amount of all Net Proceeds from Asset Sales applied by
         the Company or any of its Restricted Subsidiaries to repay Indebtedness
         under a Credit Facility pursuant to Section 4.11;

                                      -56-


                  (2)      the incurrence by the Company and its Restricted
         Subsidiaries of Existing Indebtedness (other than under the Credit
         Facilities);

                  (3)      the incurrence on the Issue Date by the Company and
         its Restricted Subsidiaries of Indebtedness represented by the Notes
         (other than any Additional Notes);

                  (4)      the incurrence by the Company or any of its
         Restricted Subsidiaries of Indebtedness represented by Capital Lease
         Obligations, mortgage financings or purchase money obligations, in each
         case, incurred for the purpose of financing all or any part of the
         purchase price or cost of construction or improvement (including,
         without limitation, the cost of design, development, construction,
         acquisition, transportation, installation, improvement and migration)
         of Productive Assets of the Company or any of its Restricted
         Subsidiaries, in an aggregate principal amount not to exceed $75
         million at any time outstanding pursuant to this clause (4);

                  (5)      the incurrence by the Company or any of its
         Restricted Subsidiaries of Permitted Refinancing Indebtedness in
         exchange for, or the net proceeds of which are used to refund,
         refinance or replace, in whole or in part, Indebtedness that was
         permitted by this Indenture to be incurred under this clause (5), the
         first paragraph of this Section 4.10 (but only with respect to such
         first paragraph if by the Company and its Restricted Subsidiaries that
         are Guarantors) or clause (2) or (3) of this paragraph;

                  (6)      the incurrence by the Company or any of its
         Restricted Subsidiaries of intercompany Indebtedness between or among
         the Company and/or any of its Restricted Subsidiaries; provided,
         however, that:

                           (a)      if the Company or a Restricted Subsidiary of
                  the Company that is a Guarantor is the obligor on such
                  Indebtedness, such Indebtedness must be expressly subordinated
                  to the Notes or the Note Guarantee of such Guarantor on the
                  same terms as such Indebtedness is subordinated to the CCO
                  Credit Facility and the Related Obligations; provided,
                  however, that any such Indebtedness owed to CC VI Operating
                  Company, LLC, CC VIII Operating, LLC or Falcon Cable
                  Communications, LLC, for so long as each is a Restricted
                  Subsidiary of the Company, shall not be required to be so
                  subordinated until the Guarantee and Pledge Date; and

                           (b)      (i) any subsequent issuance or transfer of
                  Equity Interests that results in any such Indebtedness being
                  held by a Person other than the Company or a Restricted
                  Subsidiary of the Company and (ii) any sale or other transfer
                  of any such Indebtedness to a Person that is neither the
                  Company nor a Restricted Subsidiary of the Company shall be
                  deemed, in each case, to constitute an incurrence of such
                  Indebtedness that was not permitted by this clause (6);

                  (7)      the incurrence by the Company or any of its
         Restricted Subsidiaries of Hedging Obligations that are incurred for
         the purpose of fixing, hedging or swapping interest rate risk with
         respect to any floating rate Indebtedness that is permitted by the
         terms of this Indenture to be outstanding;

                  (8)      the guarantee by the Company or any of its Restricted
         Subsidiaries of Indebtedness of a Restricted Subsidiary that was
         permitted to be incurred by another provision of this Section 4.10;

                                      -57-


                  (9)      Acquired Debt of a Person that becomes, or is merged
         into, a Restricted Subsidiary that is not a Guarantor; provided,
         however, that (x) such Acquired Debt was not incurred in connection
         with, or in contemplation of, such Person becoming, or being merged
         into, a Restricted Subsidiary and (y) the Company would, at the time
         such Person becomes, or is merged into, a Restricted Subsidiary and
         after giving pro forma effect thereto as if such acquisition or merger
         had been made at the beginning of the applicable quarter period, have
         been permitted to incur at least $1.00 of additional Indebtedness
         pursuant to the Leverage Ratio test set forth in the first paragraph of
         this Section 4.10;

                  (10)     the incurrence by the Company or any of its
         Restricted Subsidiaries of additional Indebtedness in an aggregate
         principal amount at any time outstanding under this clause (10) not to
         exceed $300 million; and

                  (11)     the accretion or amortization of original issue
         discount and the write-up of Indebtedness in accordance with purchase
         accounting.

                           For purposes of determining compliance with this
Section 4.10, any Indebtedness under Credit Facilities outstanding on the Issue
Date shall be deemed to have been incurred pursuant to clause (1) above and, in
the event that an item of proposed Indebtedness (other than any Indebtedness
initially deemed on the Issue Date to be incurred under clause (1) above) (a)
meets the criteria of more than one of the categories of Permitted Debt
described in clauses (1) through (11) above or (b) is entitled to be incurred
pursuant to the first paragraph of this Section 4.10, the Company shall be
permitted to classify and from time to time to reclassify such item of
Indebtedness in any manner that complies with this Section 4.10. Once any item
of Indebtedness is so reclassified, it shall no longer be deemed outstanding
under the category of Permitted Debt, where initially incurred or previously
reclassified. For avoidance of doubt, Indebtedness incurred pursuant to a single
agreement, instrument, program, facility or line of credit may be classified as
Indebtedness arising in part under one of the clauses listed above or under the
first paragraph of this Section 4.10, and in part under any one or more of the
clauses listed above, to the extent that such Indebtedness satisfies the
criteria for such classification.

                           The Company shall not, directly or indirectly, incur,
or permit any of its Restricted Subsidiaries that is a Guarantor to incur, any
Indebtedness which by its contractual terms (or by the contractual terms of any
agreement to which any of the Company or its Restricted Subsidiaries is a party
governing such Indebtedness) is subordinated in right of payment to any other
Indebtedness of the Company or such Guarantor, unless such Indebtedness is also
by its terms (or by the contractual terms of any agreement to which the Company
or such Guarantor is a party governing such Indebtedness) made expressly
subordinate to the Notes (or relevant Note Guarantee) to the same extent and in
the same manner as such Indebtedness is subordinated to other Indebtedness of
the Company or such Restricted Subsidiary, as the case may be (it being
understood that Indebtedness would not be considered subordinated in right of
payment (i) merely by reason of being secured with a lower-priority Lien, (ii)
if such Indebtedness constitutes Additional Pari Passu Second Priority
Indebtedness or (iii) if such Indebtedness is pari passu in right of payment to
the Notes and subject to an agreement the terms of which are substantially
similar to the intercreditor agreement referred to in Section 7.12.

                           Notwithstanding the foregoing, all Indebtedness
incurred during any Suspension Period shall not be deemed to have been incurred
for the purposes of this Section 4.10, but shall be included in the calculation
of outstanding Indebtedness from and after the next succeeding Reversion Date.

                           The Company shall not pay, or permit its Subsidiaries
to pay, any interest or principal on $361 million of intercompany loans received
by it and its Subsidiaries in November 2003

                                      -58-


from CCO Holdings, all of which shall become a common equity capital
contribution to the Company on the Guarantee and Pledge Date.

                  Section 4.11. Limitation on Asset Sales.

                           The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, consummate an Asset Sale unless:

                  (1)      the Company or such Restricted Subsidiary receives
         consideration at the time of such Asset Sale at least equal to the fair
         market value of the assets or Equity Interests issued or sold or
         otherwise disposed of;

                  (2)      such fair market value is determined by the Board of
         Directors of the Company and evidenced by a resolution of such Board of
         Directors set forth in an Officers' Certificate delivered to the
         Trustee; and

                  (3)      at least 75% of the consideration therefor received
         by the Company or such Restricted Subsidiary is in the form of cash,
         Cash Equivalents or readily marketable securities.

                           For purposes of this Section 4.11, each of the
following shall be deemed to be cash:

                  (a)      any liabilities (as shown on the Company's or such
         Restricted Subsidiary's most recent balance sheet) of the Company or
         any Restricted Subsidiary thereof (other than contingent liabilities
         and liabilities that are by their terms subordinated to the Notes) that
         are assumed by the transferee of any such assets pursuant to a
         customary novation agreement that releases the Company or such
         Restricted Subsidiary from further liability;

                  (b)      any securities, notes or other obligations received
         by the Company or any such Restricted Subsidiary from such transferee
         that are converted by the recipient thereof into cash, Cash Equivalents
         or readily marketable securities within 60 days after receipt thereof
         (to the extent of the cash, Cash Equivalents or readily marketable
         securities received in that conversion); and

                  (c)      Productive Assets.

                           Within 365 days after the receipt of any Net Proceeds
from an Asset Sale, the Company or a Restricted Subsidiary of the Company may
apply an amount equal to such Net Proceeds at its option:

                  (1)      to repay debt under the Credit Facilities (other than
         debt securities issued as part of, or to refinance, a Credit Facility
         that are not Pari Passu First Priority Indebtedness) or other Pari
         Passu First Priority Indebtedness or any other Indebtedness of the
         Restricted Subsidiaries of the Company (other than Indebtedness
         represented solely by a guarantee of a Restricted Subsidiary of the
         Company); or

                  (2)      to invest in Productive Assets; provided, however,
         that any such amount of Net Proceeds which the Company or a Restricted
         Subsidiary has committed to invest in Productive Assets within 365 days
         of the applicable Asset Sale may be invested in Productive Assets
         within two years of such Asset Sale.

                                      -59-


                           The amount of any Net Proceeds received from Asset
Sales that are not applied or invested as provided in the preceding paragraph
shall constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $25 million, the Company shall make an Asset Sale Offer to all Holders
and all holders of other Indebtedness that is of equal priority with the Notes
containing provisions requiring offers to purchase or redeem with the proceeds
of sales of assets to purchase the maximum principal amount of Notes and such
other Indebtedness of equal priority that may be purchased out of the Excess
Proceeds, irrespective of the $25 million threshold. The offer price in any
Asset Sale Offer shall be payable in cash and equal to 100% of the principal
amount of the subject Notes plus accrued and unpaid interest, if any, to the
date of purchase. If the aggregate principal amount of Notes and such other
Indebtedness of equal priority tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such other
Indebtedness of equal priority to be purchased on a pro rata basis.

                           If any Excess Proceeds remain after consummation of
an Asset Sale Offer, then the Company or any Restricted Subsidiary thereof may
use such remaining Excess Proceeds for any purpose not otherwise prohibited by
this Indenture. Upon completion of any Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.

                           In the event that the Company shall be required to
commence an offer to Holders to purchase Notes pursuant to this Section 4.11, it
shall follow the procedures specified in Sections 3.01 through 3.09.

                  Section 4.12. Sale and Leaseback Transactions.

                           The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided, however, that the Company and its Restricted Subsidiaries may enter
into a sale and leaseback transaction if:

                  (1)      the Company or such Restricted Subsidiary could have

                           (a)      incurred Indebtedness in an amount equal to
                  the Attributable Debt relating to such sale and leaseback
                  transaction under the Leverage Ratio test in the first
                  paragraph of Section 4.10; and

                           (b)      incurred a Lien to secure such Indebtedness
                  pursuant to Section 4.14 or the definition of "Permitted
                  Liens"; and

                  (2)      the transfer of assets in that sale and leaseback
         transaction is permitted by, and the Company or such Restricted
         Subsidiary applies the proceeds of such transaction in compliance with,
         Section 4.11.

                  Section 4.13. Transactions with Affiliates.

                           The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:

                                      -60-


                  (1)      such Affiliate Transaction is on terms that are no
         less favorable to the Company or the relevant Restricted Subsidiary
         than those that would have been obtained in a comparable transaction by
         the Company or such Restricted Subsidiary with an unrelated Person; and

                  (2)      the Company delivers to the Trustee:

                           (a)      with respect to any Affiliate Transaction or
                  series of related Affiliate Transactions involving aggregate
                  consideration given or received by the Company or any such
                  Restricted Subsidiary in excess of $15 million, a resolution
                  of the Board of Directors of the Company or CCI in its
                  capacity as manager of the Company (other than with respect to
                  an Affiliate Transaction involving CCI) set forth in an
                  Officers' Certificate certifying that such Affiliate
                  Transaction complies with this Section 4.13 and that such
                  Affiliate Transaction has been approved by a majority of the
                  members of such Board of Directors; and

                           (b)      with respect to any Affiliate Transaction or
                  series of related Affiliate Transactions involving aggregate
                  consideration given or received by the Company or any
                  Restricted Subsidiary in excess of $50 million, an opinion as
                  to the fairness to the Holders of such Affiliate Transaction
                  from a financial point of view issued by an accounting,
                  appraisal or investment banking firm of national standing.

                           The following items shall not be deemed to be
Affiliate Transactions and, therefore, shall not be subject to the provisions of
the prior paragraph:

                  (1)      any existing employment agreement entered into by the
         Company or any of its Subsidiaries and any employment agreement entered
         into by the Company or any of its Restricted Subsidiaries in the
         ordinary course of business and consistent with the past practice of
         the Company or any Parent or such Restricted Subsidiary;

                  (2)      transactions between or among the Company and/or its
         Restricted Subsidiaries;

                  (3)      payment of reasonable directors' fees to Persons who
         are not otherwise Affiliates of the Company and customary
         indemnification and insurance arrangements in favor of directors,
         regardless of affiliation with the Company or any of its Restricted
         Subsidiaries;

                  (4)      payment of Management Fees;

                  (5)      Restricted Payments that are permitted by Section
         4.07 and Restricted Investments that are permitted by Section 4.08;

                  (6)      Permitted Investments; and

                  (7)      transactions pursuant to agreements existing on the
         Issue Date, as in effect on the Issue Date, or as subsequently
         modified, supplemented, or amended, to the extent that any such
         modifications, supplements or amendments complied with the applicable
         provisions of the first paragraph of this Section 4.13.

                  Section 4.14. Liens.

                           The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or incur any Lien
of any kind securing Indebtedness, Attributable Debt or

                                      -61-


trade payables on any of their respective assets, whether owned on the Issue
Date or thereafter acquired, if such Lien is to secure such an obligation on a
basis contractually senior, in any respect, to the Liens securing the Notes and
if after giving effect thereto, or after giving effect to the incurrence of such
Indebtedness (including Pari Passu First Priority Indebtedness), Attributable
Debt or trade payables, the Senior Secured Leverage Ratio would exceed 3.75 to
1.0. The foregoing restriction shall not apply to Permitted Liens.

                  Section 4.15. Existence.

                           Subject to Article 5, the Company shall do or cause
to be done all things necessary to preserve and keep in full force and effect
(i) its limited liability company existence, and the corporate, partnership or
other existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Subsidiaries (other than Capital Corp), if the Board of Directors of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders.

                  Section 4.16. Repurchase at the Option of Holders upon a
Change of Control.

                           If a Change of Control occurs, each Holder shall have
the right to require the Issuers to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of that Holder's Notes pursuant to a "Change of
Control Offer." In the Change of Control Offer, the Issuers shall offer a
"Change of Control Payment" in cash equal to 101% of the aggregate principal
amount of Notes repurchased plus accrued and unpaid interest thereon, if any, to
the date of purchase.

                           Within ten days following any Change of Control, the
Issuers shall mail a notice to each Holder (with a copy to the Trustee)
describing the transaction or transactions that constitute the Change of Control
and stating:

                  (1)      the purchase price and the purchase date, which shall
         not exceed 30 Business Days from the date such notice is mailed (the
         "Change of Control Payment Date");

                  (2)      that any Note not tendered shall continue to accrue
         interest;

                  (3)      that, unless the Issuers default in the payment of
         the Change of Control Payment, all Notes accepted for payment pursuant
         to the Change of Control Offer shall cease to accrue interest after the
         Change of Control Payment Date;

                  (4)      that Holders electing to have any Notes purchased
         pursuant to a Change of Control Offer shall be required to surrender
         the Notes, with the form entitled "Option of Holder to Elect Purchase"
         on the reverse of the Notes completed, to the Paying Agent at the
         address specified in the notice prior to the close of business on the
         third Business Day preceding the Change of Control Payment Date;

                  (5)      that Holders shall be entitled to withdraw their
         election if the Paying Agent receives, not later than the close of
         business on the second Business Day preceding the Change of Control
         Payment Date, a telegram, telex, facsimile transmission or letter
         setting forth the name of

                                      -62-


         the Holder, the principal amount of Notes delivered for purchase, and a
         statement that such Holder is withdrawing his election to have the
         Notes purchased; and

                  (6)      that Holders whose Notes are being purchased only in
         part shall be issued new Notes equal in principal amount to the
         unpurchased portion of the Notes surrendered, which unpurchased portion
         must be equal to $1,000 in principal amount or an integral multiple
         thereof.

                           The Issuers shall comply with the requirements of
Rule 14e-1 under the Exchange Act (or any successor rules) and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.16, the Issuers' compliance with such laws and regulations shall not in and of
itself cause a breach of their obligations under this Section 4.16.

                           On the Change of Control Payment Date, the Issuers
shall, to the extent lawful:

                  (1)      accept for payment all Notes or portions thereof
         properly tendered pursuant to the Change of Control Offer;

                  (2)      deposit with the Paying Agent an amount equal to the
         Change of Control Payment in respect of all Notes or portions thereof
         so tendered; and

                  (3)      deliver or cause to be delivered to the Trustee the
         Notes so accepted together with an Officers' Certificate stating the
         aggregate principal amount of Notes or portions thereof being purchased
         by the Issuers.

                           The Paying Agent shall promptly mail to each Holder
so tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided, however, that each such new Note shall
be in a principal amount of $1,000 or an integral multiple thereof. The Issuers
shall publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.

                           The provisions described above that require the
Issuers to make a Change of Control Offer following a Change of Control shall be
applicable regardless of whether or not any other provisions in this Indenture
are applicable. Except as described above with respect to a Change of Control,
this Indenture does not contain provisions that permit the Holders to require
that the Issuers repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.

                           Notwithstanding any other provision of this Section
4.16, the Issuers shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Indenture applicable to a Change of Control Offer made by the Issuers
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.

Section 4.17.     Note Guarantees; Security.

                           The Company shall, and shall cause (x) CCOH and (y)
each Subsidiary of the Company that, directly or indirectly, Guarantees or
pledges any assets to secure the payment of, or otherwise becomes an obligor
with respect to, any Indebtedness under clause (1) of the second paragraph of
Section 4.10 or Related Obligations to:

                                      -63-


                  (1)      to the extent that such Subsidiary Guarantees or
         becomes an obligor with respect to such Indebtedness, execute and
         deliver a supplemental indenture substantially in the form of Exhibit G
         hereto providing for the guarantee of the payment of the Notes by CCOH
         or such Subsidiary, as the case may be, pursuant to a Note Guarantee;

                  (2)      to the extent such Indebtedness is secured by a
         security interest in any assets of CCOH , the Company or such
         Subsidiary, execute one or more Security Documents upon substantially
         the same terms that grants any collateral agent, for the benefit of the
         Trustee and the Holders, a perfected second-priority security interest
         in the assets of CCOH or such Subsidiary, as the case may be, that
         secure Indebtedness under clause (1) of the second paragraph of Section
         4.10 or Related Obligations; and

                  (3)      execute and deliver to the Trustee an Opinion of
         Counsel (which may contain customary exceptions) that such supplemental
         indenture and/or Security Documents have been duly authorized, executed
         and delivered by CCOH, the Company or such Subsidiary, as the case may
         be, and constitute the legal, valid, binding and enforceable
         obligations of CCOH or such Restricted Subsidiary, as the case may be;

provided, however, that no such Note Guarantee or security need be provided if
the time such Note Guarantee and security would otherwise be granted (including
on the Issue Date) is not during a Guarantee and Pledge Availability Period, but
such Note Guarantee and security will be required to be provided in accordance
with the provisions of this Section 4.17 on or prior to the fifth Business Day
after the commencement of the next succeeding Guarantee and Pledge Availability
Period. If, following the release of any Note Guarantee or any Collateral in
accordance with the provisions of this Indenture, such Guarantor again
guarantees, pledges any assets to secure the payment of, or otherwise becomes an
obligor with respect to, the CCO Credit Facility, any other Indebtedness under
clause (1) of the second paragraph of Section 4.10 or Related Obligations then
such Guarantor shall also guarantee the Notes and/or grant the security
interest, to the extent described in, and subject to the provisions of, this
Section 4.17.

                           In the event that additional Liens are granted by CCO
or its Subsidiaries to secure obligations under the CCO Credit Facility, any
other Indebtedness under clause (1) of the second paragraph of Section 4.10 or
Related Obligations, second-priority Liens on the same assets will be granted to
secure the Notes. Notwithstanding the foregoing sentence, no such
second-priority Liens need be provided if the time such Lien would otherwise be
granted is not during a Guarantee and Pledge Availability Period, but such
second-priority Lien shall be required to be provided in accordance with the
foregoing sentence on or prior to the fifth Business Day of the commencement of
the next succeeding Guarantee and Pledge Availability Period.

                           Any Restricted Subsidiary acquired after the Issue
Date that is prohibited from issuing a Note Guarantee pursuant to the
restrictions contained in any debt instrument or other agreement in existence at
the time such Restricted Subsidiary was acquired and not entered into in
anticipation or contemplation of such acquisition shall not be required to
become a Guarantor so long as any such restriction is in existence and to the
extent of such restriction.

                           The Company shall take, and cause each of its
Subsidiaries to take, all action to preserve and protect the security interests
and Liens required to be granted by this Section 4.17 to the extent it (or its
Subsidiaries) takes such action to preserve or protect similar Liens securing
Indebtedness under clause (1) of the second paragraph of Section 4.10 or Related
Obligations.

                           For purposes of this Section 4.17 and Section 11.04
(but without prejudice to the Issuers' right to reclassify among categories of
Indebtedness under Section 4.10), Indebtedness that could

                                      -64-


be characterized as outstanding under clause (1) of the second paragraph of
Section 4.10 shall be deemed to be Indebtedness under such clause (1).

                  Section 4.18. Payments for Consent.

                           The Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes unless such consideration is offered to be paid and is paid to all
Holders that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.

                  Section 4.19. Suspension of Covenants.

                           During any period of time that (a) the applicable
series of Notes has an Investment Grade Rating from both Rating Agencies and (b)
no Default or Event of Default has occurred and is continuing under this
Indenture (the "Suspension Period"), the Company and its Restricted Subsidiaries
shall not, as to such series of Notes, be subject to the provisions of Sections
4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13 and clause (D) of the first
paragraph of Section 5.01 (collectively, the "Suspended Covenants"). The Issuers
shall promptly notify the Trustee of the commencement of a Suspension Period.

                           If the Company and its Restricted Subsidiaries are
not subject to the Suspended Covenants with respect to a series of Notes for any
period of time as a result of the previous sentence and, subsequently, (i) one,
or both, of the Rating Agencies withdraw their ratings or downgrade the ratings
assigned to such series of Notes below the required Investment Grade Ratings or
(ii) a Default or Event of Default occurs and is continuing under such Notes
(each, a "Reversion Date"), then the Company and its Restricted Subsidiaries
shall thereafter again be subject to the Suspended Covenants with respect to
such series of Notes.

                           For purposes of calculating the amount available to
be made as Restricted Payments under clause (iii) of the first paragraph of
Section 4.07, calculations under that clause will be made with reference to the
Reference Date, as set forth in that clause. Accordingly, (x) Restricted
Payments made during the Suspension Period not otherwise permitted pursuant to
any of clauses (1) through (7) of the second paragraph of Section 4.07 will
reduce the amount available to be made as Restricted Payments under clause (iii)
of the second paragraph of Section 4.07; provided, however, that the amount
available to be made as Restricted Payments on the Reversion Date shall not be
reduced below zero solely as a result of such Restricted Payments, but may be
reduced below zero as a result of Consolidated EBITDA for the purpose of clause
(iii)(a) of the second paragraph of Section 4.07 being negative, and (y) the
items specified in subclauses (a) through (c) of clause (iii) of the second
paragraph of Section 4.07 that occur during the Suspension Period will increase
the amount available to be made as Restricted Payments under clause (iii) of the
second paragraph of Section 4.07. Any Unrestricted Subsidiary that was
designated as such during any Suspension Period that is a Subsidiary of the
Company on the Reversion Date shall be deemed to be a Restricted Subsidiary on
the corresponding Reversion Date and such designation shall not be deemed a
Default or Event of Default under this Indenture.

                           For purposes of Sections 3.09 and 4.11, on the
Reversion Date, the unutilized Excess Proceeds will be reset to zero.

                                      -65-


                  Section 4.20. Potential Future Registration Rights.

                           The Issuers shall enter into and provide the
registration and other rights set forth in the registration rights agreement,
the form of which is attached as Exhibit H hereto, in accordance with the terms
thereof, but only if and when none of the Collateral consists of, or by the
terms of this Indenture in the future could consist of, securities (as defined
in Section 3-16 of Regulation S-X under the Securities Act) that would require
the inclusion of financial statements in any registration statement required
under such registration rights agreement of a person other than the Issuers.

                                   ARTICLE 5

                                   SUCCESSORS

                  Section 5.01. Merger, Consolidation, or Sale of Assets.

                           Neither Issuer may, directly or indirectly: (1)
consolidate or merge with or into another Person or (2) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of its properties or
assets, in one or more related transactions, to another Person; unless:

                  (A)      either:

                           (i)      such Issuer is the surviving Person; or

                           (ii)     the Person formed by or surviving any such
                  consolidation or merger (if other than such Issuer) or to
                  which such sale, assignment, transfer, conveyance or other
                  disposition shall have been made is a Person organized or
                  existing under the laws of the United States, any state
                  thereof or the District of Columbia; provided, however, that
                  if the Person formed by or surviving any such consolidation or
                  merger with such Issuer is a limited liability company or a
                  Person other than a corporation, a corporate co-issuer shall
                  also be an obligor with respect to the Notes;

                  (B)      the Person formed by or surviving any such
         consolidation or merger (if other than such Issuer) or the Person to
         which such sale, assignment, transfer, conveyance or other disposition
         shall have been made assumes all the obligations of such Issuer under
         the Notes and this Indenture and the Security Documents pursuant to
         agreements reasonably satisfactory to the Trustee;

                  (C)      immediately after such transaction no Default or
         Event of Default exists; and

                  (D)      such Issuer or the Person formed by or surviving any
         such consolidation or merger (if other than such Issuer) will, on the
         date of such transaction after giving pro forma effect thereto and any
         related financing transactions as if the same had occurred at the
         beginning of the applicable four-quarter period,

                           (x)      be permitted to incur at least $1.00 of
                  additional Indebtedness pursuant to the Leverage Ratio test
                  set forth in the first paragraph of Section 4.10; or

                           (y)      have a Leverage Ratio immediately after
                  giving effect to such consolidation or merger no greater than
                  the Leverage Ratio immediately prior to such consolidation or
                  merger.

                                      -66-


                           In addition, the Company may not, directly or
indirectly, lease all or substantially all of its properties or assets, in one
or more related transactions, to any other Person. The foregoing clause (D)
shall not apply to a sale, assignment, transfer, conveyance or other disposition
of assets between or among the Company and any of its Wholly Owned Restricted
Subsidiaries.

                           Except as provided in paragraph (b) of Section 11.04,
no Guarantor that is a Subsidiary of the Company may, directly or indirectly,
consolidate or merge with or into (whether or not such Subsidiary is the
surviving Person) another Person, unless:

                  (A)      either:

                           (i)      such Subsidiary is the surviving or
                  continuing Person, or

                           (ii)     the Person formed by or surviving any such
                  consolidation or merger is another Guarantor that is a
                  Subsidiary of the Company or assumes, by supplemental
                  indenture in form and substance reasonably satisfactory to the
                  Trustee, all of the obligations of such Subsidiary under the
                  Note Guarantee of such Subsidiary, this Indenture and the
                  Security Documents; and

                  (B)      immediately after such transaction no Default or
         Event of Default exists.

                  Section 5.02. Successor Corporation Substituted.

                           Upon any consolidation or merger, or any sale,
assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the assets of either Issuer in accordance with Section
5.01, the successor Person formed by such consolidation or into which either
Issuer is merged or to which such transfer is made shall succeed to and (except
in the case of a lease) be substituted for, and may exercise every right and
power of, such Issuer under this Indenture with the same effect as if such
successor Person had been named therein as such Issuer, and (except in the case
of a lease) such Issuer shall be released from the obligations under the Notes
and this Indenture, except with respect to any obligations that arise from, or
are related to, such transaction.

                                   ARTICLE 6

                              DEFAULTS AND REMEDIES

                  Section 6.01. Events of Default.

                           Each of the following is an Event of Default with
respect to the Notes:

                  (1)      default for 30 consecutive days in the payment when
         due of interest on a particular series of Notes;

                  (2)      default in payment when due of the principal of or
         premium, if any, on a particular series of Notes;

                  (3)      failure by the Company or any of its Restricted
                           Subsidiaries to comply with the provisions of
         Sections 4.16 and 5.01;

                  (4)      failure by the Company or any of its Restricted
         Subsidiaries for 30 consecutive days after written notice thereof has
         been given to the Company by the Trustee or to the Company

                                      -67-


         and the Trustee by Holders of at least 25% of the aggregate principal
         amount of Notes then outstanding to comply with any of its other
         covenants or agreements in this Indenture;

                  (5)      default under any mortgage, indenture or instrument
         under which there may be issued or by which there may be secured or
         evidenced any Indebtedness for money borrowed by the Company or any of
         its Restricted Subsidiaries (or the payment of which is guaranteed by
         the Company or any of its Restricted Subsidiaries), whether such
         Indebtedness or guarantee now exists or is created after the Issue
         Date, if that default:

                           (a)      is caused by a failure to pay at final
                  stated maturity the principal amount of such Indebtedness
                  prior to the expiration of the grace period provided in such
                  Indebtedness on the date of such default (a "Payment
                  Default"); or

                           (b)      results in the acceleration of such
                  Indebtedness prior to its express maturity,

          and, in each case, the principal amount of any such Indebtedness,
          together with the principal amount of any other such Indebtedness
          under which there has been a Payment Default or the maturity of which
          has been so accelerated, aggregates $100 million or more;

                  (6)      failure by the Company or any of its Restricted
         Subsidiaries to pay final judgments which are non-appealable
         aggregating in excess of $100 million, net of applicable insurance
         which has not been denied in writing by the insurer, which judgments
         are not paid, discharged or stayed for a period of 60 days;

                  (7)      the Company or any of its Significant Subsidiaries
         pursuant to or within the meaning of Bankruptcy Law:

                           (a)      commences a voluntary case,

                           (b)      consents to the entry of an order for relief
                  against it in an involuntary case,

                           (c)      consents to the appointment of a custodian
                  of it or for all or substantially all of its property, or

                           (d)      makes a general assignment for the benefit
                  of its creditors; or

                  (8)      a court of competent jurisdiction enters an order or
         decree under any Bankruptcy Law that:

                           (a)      is for relief against the Company or any of
                  its Significant Subsidiaries in an involuntary case;

                           (b)      appoints a custodian of the Company or any
                  of its Significant Subsidiaries or for all or substantially
                  all of the property of the Company or any of its Significant
                  Subsidiaries; or

                           (c)      orders the liquidation of the Company or any
                  of its Significant Subsidiaries;

                                      -68-


         and the order or decree remains unstayed and in effect for 60
         consecutive days;

                  (9)      any Note Guarantee of any Guarantor that, taken
         together with all other such Guarantors, would be a Significant
         Subsidiary ceases to be in full force and effect (other than in
         accordance with the terms of this Indenture and such Note Guarantee) or
         is declared null and void and unenforceable or found to be invalid or
         any Guarantor denies its liability under its Note Guarantee with
         respect to any series of Notes (other than by reason of release of a
         Guarantor from its Note Guarantee in accordance with the terms of this
         Indenture and such Note Guarantee); and

                  (10)     so long as the Security Documents securing any series
         of Notes have not otherwise been terminated in accordance with their
         terms or the Collateral as a whole has not otherwise been released from
         the Lien of the Security Documents securing any series of Notes in
         accordance with the terms thereof, (a) any default by the Company or
         any Subsidiary in the performance of its obligations under the Security
         Documents securing any series of Notes (after the lapse of any
         applicable grace periods) or this Indenture which adversely affects the
         enforceability, validity, perfection or priority of the Trustee's Lien
         on the Collateral or which adversely affects the condition or value of
         the Collateral, taken as a whole, in any material respect, (b)
         repudiation or disaffirmation by the Company or any Subsidiary of its
         respective obligations under the Security Documents securing any series
         of Notes and (c) the determination in a judicial proceeding that the
         Security Documents securing any series of Notes are unenforceable or
         invalid against the Company or any Subsidiary for any reason.

                  Section 6.02. Acceleration.

                           In the case of an Event of Default arising from
clause (7) or (8) of Section 6.01 with respect to the Company, all of the
outstanding Notes shall become due and payable immediately without further
action or notice. In the case of an Event of Default described in the foregoing
clauses (1) and (2) as to a particular series of Notes, the Trustee or the
Holders of at least 25% in aggregate principal amount of such series of Notes
then outstanding may declare such series of Notes due and payable immediately.
If any other Event of Default occurs and is continuing, the Trustee by notice to
the Issuers or the Holders of at least 25% in aggregate principal amount of the
Notes by notice to the Issuers and the Trustee may declare the Notes to be due
and payable immediately. The Holders of a majority in aggregate principal amount
of the Notes then outstanding by written notice to the Trustee may on behalf of
all of the Holders rescind an acceleration and its consequences (except
nonpayment of principal, interest or premium that has become due solely because
of the acceleration) if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived.

                  Section 6.03. Other Remedies.

                           If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal,
premium, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.

                           The Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon a Default or an Event of Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in a Default or the Event of
Default. All remedies are cumulative to the extent permitted by law.

                                      -69-


                  Section 6.04. Waiver of Existing Defaults.

                           Holders of not less than a majority in aggregate
principal amount of the Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default with
respect to the Notes and its consequences hereunder, except a continuing Default
or Event of Default in the payment of the principal of, premium, if any, or
interest on, the Notes (including in connection with an offer to purchase);
provided, however, that the Holders of a majority in aggregate principal amount
of a then outstanding series of Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

                  Section 6.05. Control by Majority.

                           Holders of a majority in aggregate principal amount
of the Notes then outstanding may direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture that the
Trustee determines may be prejudicial to the rights of other Holders or that may
involve the Trustee in personal liability. The Trustee may take any other action
which it deems proper that is not inconsistent with any such directive.

                  Section 6.06. Limitation on Suits.

                           A Holder may pursue a remedy with respect to this
Indenture or the Notes only if:

                  (a)      the Holder gives to the Trustee written notice of a
         continuing Event of Default with respect to the Notes;

                  (b)      the Holders of at least 25% in principal amount of
         the Notes then outstanding make a written request to the Trustee to
         pursue the remedy;

                  (c)      such Holder or Holders offer and, if requested,
         provide to the Trustee indemnity satisfactory to the Trustee against
         any loss, liability or expense;

                  (d)      the Trustee does not comply with the request within
         60 days after receipt of the request and the offer and, if requested,
         the provision of indemnity; and

                  (e)      during such 60-day period the Holders of a majority
         in aggregate principal amount of the Notes then outstanding do not give
         the Trustee a direction inconsistent with the request.

                           A Holder may not use this Indenture to prejudice the
rights of another Holder or to obtain a preference or priority over another
Holder.

                  Section 6.07. Rights of Holders to Receive Payment.

                           Notwithstanding any other provision of this
Indenture, the right of any Holder to receive payment of principal, premium, if
any, and interest on the Note, on or after the respective due dates expressed in
the Note (including in connection with an offer to purchase), or to bring suit
for the

                                      -70-


enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.

                  Section 6.08. Collection Suit by Trustee.

                           If an Event of Default specified in Section 6.01(1)
or (2) occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Issuers for the
whole amount of principal of, premium, if any, and interest remaining unpaid on
the applicable series of Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

                  Section 6.09. Trustee May File Proofs of Claim.

                           The Trustee is authorized to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders allowed in any judicial proceedings relative to the
Issuers (or any other obligor upon the Notes), their creditors or their property
and shall be entitled and empowered to collect, receive and distribute any money
or other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

                  Section 6.10. Priorities.

                           If the Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order:

         First: to the Trustee, its agents and attorneys for amounts due under
         Section 7.07, including payment of all compensation, expense and
         liabilities incurred, and all advances made, by the Trustee and the
         costs and expenses of collection;

         Second: to Holders for amounts due and unpaid on the Notes for
         principal, premium, if any, and interest, ratably, without preference
         or priority of any kind, according to the amounts due and payable on
         the Notes for principal, premium, if any and interest, respectively;
         and

         Third: to the Issuers or to such party as a court of competent
         jurisdiction shall direct.

                           The Trustee may fix a record date and payment date
for any payment to Holders pursuant to this Section 6.10.

                                      -71-


                  Section 6.11. Undertaking for Costs.

                           In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as a Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07, or a suit by Holders of more than 10%
in principal amount of the then outstanding Notes.

                                   ARTICLE 7

                                     TRUSTEE

                  Section 7.01. Duties of Trustee.

                  (1)      If an Event of Default has occurred and is
         continuing, the Trustee shall, subject to the terms and conditions of
         this Indenture, exercise such of the rights and powers vested in it by
         this Indenture and the Security Documents and use the same degree of
         care and skill in its exercise, as a prudent person would exercise or
         use under the circumstances in the conduct of such person's own
         affairs.

                  (2)      Except during the continuance of an Event of Default:

                           (a)      the duties of the Trustee shall be
                  determined solely by the express provisions of the agreements
                  referred to in clause (1) and the Trustee need perform only
                  those duties that are specifically set forth in such
                  agreements and no others, and no implied covenants or
                  obligations shall be read into such agreements against the
                  Trustee; and

                           (b)      in the absence of bad faith on its part, the
                  Trustee may conclusively rely, as to the truth of the
                  statements and the correctness of the opinions expressed
                  therein, upon certificates or opinions required to be
                  furnished to the Trustee hereunder and conforming to the
                  requirements of such agreements. However, the Trustee shall
                  examine the certificates and opinions to determine whether or
                  not they conform to the requirements of such agreements (but
                  need not confirm or investigate the accuracy of any
                  mathematical calculations or other facts stated therein).

                  (3)      The Trustee may not be relieved from liabilities for
         its own gross negligent action, its own gross negligent failure to act,
         or its own willful misconduct, except that:

                           (a)      This paragraph does not limit the effect of
                  paragraph (2) of this Section 7.01.

                           (b)      The Trustee shall not be liable for any
                  error of judgment made in good faith by a Responsible Officer,
                  unless it is proved that the Trustee was grossly negligent in
                  ascertaining the pertinent facts.

                           (c)      The Trustee shall not be liable with respect
                  to any action it takes or omits to take in good faith in
                  accordance with a direction received by it pursuant to Section
                  6.05.

                           (d)      Whether or not therein expressly so
                  provided, every provision of the agreements referred to in
                  clause (1) that in any way relates to the Trustee is subject
                  to paragraphs (1), (2), and (3) of this Section 7.01.

                                      -72-


                           (e)      No provision of any such agreements shall
                  require the Trustee to expend or risk its own funds or incur
                  any liability. The Trustee shall be under no obligation to
                  exercise any of its rights and powers under this Indenture or
                  the Security Documents at the request of any Holder, unless
                  such Holder shall have offered to the Trustee security and
                  indemnity satisfactory to it against any loss, liability,
                  claim, damage or expense.

                           (f)      The Trustee shall not be liable for interest
                  on any money received by it except as the Trustee may agree in
                  writing with the Issuers. Money held in trust by the Trustee
                  need not be segregated from other funds except to the extent
                  required by law.

                           (g)      The Trustee shall not be bound to make any
                  investigation into the facts or matters stated in any
                  resolution, certificate, statement, instrument, opinion,
                  report, notice, request, direction, consent, order, bond,
                  debenture or other paper or documents.

                  Section 7.02. Rights of Trustee.

                  (1)      The Trustee may conclusively rely upon any document
         (whether in its original or facsimile form) believed by it to be
         genuine and to have been signed or presented by the proper Person. The
         Trustee need not investigate any fact or matter stated in the document.

                  (2)      Before the Trustee acts or refrains from acting, it
         may require an Officers' Certificate or an Opinion of Counsel or both.
         The Trustee shall not be liable for any action it takes or omits to
         take in good faith in reliance on such Officers' Certificate or Opinion
         of Counsel. The Trustee may consult with counsel of its own selection
         and the written advice or opinion of such counsel or any Opinion of
         Counsel shall be full and complete authorization and protection from
         liability in respect of any action taken, suffered or omitted by it
         hereunder in good faith and in reliance thereon.

                  (3)      The Trustee may act through its attorneys and agents
         and shall not be responsible for the misconduct or negligence of any
         agent appointed with due care.

                  (4)      The Trustee shall not be liable for any action it
         takes or omits to take in good faith that it believes to be authorized
         or within the rights or powers conferred upon it by this Indenture or
         the Security Documents.

                  (5)      Unless otherwise specifically provided in this
         Indenture or the Security Documents, any demand, request, direction or
         notice from either of the Issuers shall be sufficient if signed by an
         Officer of such Issuer.

                  (6)      The Trustee shall be under no obligation to exercise
         any of the rights or powers vested in it by this Indenture or the
         Security Documents at the request or direction of any of the Holders
         unless such Holders shall have offered to the Trustee reasonable
         security or indemnity satisfactory to it against the costs, expenses
         and liabilities that might be incurred by it in compliance with such
         request or direction.

                  (7)      The Trustee shall not be charged with knowledge of
         any Default or Event of Default unless either (a) a Responsible Officer
         of the Trustee shall have actual knowledge of such Default or Event of
         Default or (b) written notice of such Default or Event of Default shall
         have been given to and received by a Responsible Officer of the Trustee
         by the Issuers or any Holder.

                                      -73-


                  Section 7.03. Individual Rights of Trustee.

                           The Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the Issuers
or any Affiliate of the Issuers with the same rights it would have if it were
not Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11.

                  Section 7.04. Trustee's Disclaimer.

                           The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Issuers' use of the proceeds from the Notes or
any money paid to the Issuers or upon the Issuers' direction under any provision
of this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.

                  Section 7.05. Notice of Defaults.

                           If a Default or Event of Default occurs and is
continuing and if it is known to a Responsible Officer of the Trustee, the
Trustee shall mail to Holders a notice of the Default or Event of Default within
90 days after the Trustee acquires knowledge thereof. Except in the case of a
Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders.

                  Section 7.06. Reports by Trustee to Holders.

                           By May 15th of each year, and for so long as Notes
remain outstanding, the Trustee shall mail to the Holders a brief report dated
as of such reporting date that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the twelve months preceding
the reporting date, no report need be transmitted). The Trustee also shall
comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA Section 313(c).

                           A copy of each report at the time of its mailing to
the Holders shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Issuers shall promptly notify the Trustee when the Notes are listed on any
stock exchange.

                  Section 7.07. Compensation and Indemnity.

                           The Issuers shall pay to the Trustee from time to
time reasonable compensation for its acceptance of this Indenture, the Security
Documents, any Registration Rights Agreement and any other document delivered in
connection with any of such agreements and its services under any of such
agreements or other documents. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Issuers shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.

                                      -74-


                           The Issuers shall, jointly and severally, indemnify
the Trustee against any and all losses, liabilities, claims, damages or expenses
(including reasonable legal fees and expenses) incurred by the Trustee arising
out of or in connection with the acceptance or administration of its duties
under (or in connection with) this Indenture, including the costs and expenses
of enforcing this Indenture, the Security Documents, any Registration Rights
Agreement and any other document delivered in connection therewith (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Issuers or any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its gross
negligence or willful misconduct. The Trustee shall notify the Issuers promptly
of any claim for which it may seek indemnity. Failure by the Trustee to so
notify the Issuers shall not relieve the Issuers of their obligations hereunder.
The Issuers shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Issuers shall pay the
reasonable fees and expenses of such counsel. The Issuers need not pay for any
settlement made without their consent, which consent shall not be unreasonably
withheld.

                           The obligations of the Issuers this Section 7.07
shall survive resignation or removal of the Trustee and the satisfaction and
discharge of this Indenture.

                           To secure the Issuers' payment obligations in this
Section, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
resignation or removal of the Trustee and the satisfaction and discharge of this
Indenture.

                           When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(7) or (8) occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.

                           The Trustee shall comply with the provisions of TIA
Section 313(b)(2) to the extent applicable.

                  Section 7.08. Replacement of Trustee.

                           A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee's acceptance of appointment as provided in this Section.

                           The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Issuers. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Issuers in writing. The
Issuers may remove the Trustee if:

                  (a)      the Trustee fails to comply with Section 7.10;

                  (b)      the Trustee is adjudged a bankrupt or an insolvent or
         an order for relief is entered with respect to the Trustee under any
         Bankruptcy Law;

                  (c)      a custodian or public officer takes charge of the
         Trustee or its property; or

                  (d)      the Trustee becomes incapable of acting.

                                      -75-


                           If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Issuers shall promptly
appoint a successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee appointed
by the Issuers.

                           If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuers, or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition at the expense of the Issuers any court of
competent jurisdiction for the appointment of a successor Trustee.

                           If the Trustee, after written request by any Holder
who has been a Holder for at least six months, fails to comply with Section
7.10, such Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

                           A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Issuers.
Thereupon, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Holders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee; provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Issuers' obligations under Section 7.07 shall
continue for the benefit of the retiring Trustee.

                  Section 7.09. Successor Trustee by Merger, etc.

                           If the Trustee consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee.

                  Section 7.10. Eligibility; Disqualification.

                           There shall at all times be a Trustee hereunder that
is a corporation organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under such laws to
exercise corporate trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of
at least $100 million as set forth in its most recent published annual report of
condition.

                           This Indenture shall always have a Trustee who
satisfies the requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee
is subject to TIA Section 310(b).

                  Section 7.11. Preferential Collection of Claims Against the
Issuers.

                           The Trustee is subject to TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b). A Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.

                  Section 7.12. Authorization of the Trustee.

         Each present and future Holder hereby (a) authorizes the Trustee, on
such Holder's behalf, to execute and deliver the intercreditor agreement as
referred to in the Issuers' April 20, 2004 Offering Memorandum regarding the
Notes, and (b) agrees that, subject to the penultimate sentence of this Section

                                      -76-


7.12, notwithstanding any other provision to the contrary in this Indenture, (i)
the Trustee shall be authorized to take (or refrain from taking) any and all
actions required, authorized or contemplated by such intercreditor agreement and
(ii) the rights, agreements, obligations, covenants and duties of the Trustee to
or otherwise on behalf of the Holders under this Indenture and the Security
Documents shall be subject to the rights, agreements, obligations, covenants and
duties of the Trustee under such intercreditor agreement to or otherwise on
behalf of the Pari Passu First Priority Secured Parties. The Trustee agrees with
the Holders that the Trustee will not enter into any amendment or supplement to
the above-referenced intercreditor agreement (except to provide for the
inclusion therein of Additional Pari Passu First Priority Indebtedness or
Additional Pari Passu Second Priority Indebtedness) without in each case
obtaining the prior consent of the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes (but without the necessity of any
consent from, or notice to, the Company or any of its Affiliates). Each present
and future Holder in such capacity also acknowledges and agrees that, although
the Issuers and their Affiliates may not be parties thereto or bound thereby,
such Holder will nonetheless be bound by the above-referenced intercreditor
agreement and such intercreditor agreement will be directly enforceable against
such Holder in its capacity as such. None of the Issuers or any of their
Affiliates will be a party to, bound by, or a beneficiary of, any of the
provisions of such intercreditor agreement, nor will the parties to such
intercreditor agreement have any contractual right of enforcement thereunder
against the Issuers or any Guarantor. In addition, the Trustee may enter into
other agreements on behalf of Holders to the extent that such agreements would
be permitted as amendments or supplements under Article 9 of this Indenture.

                                   ARTICLE 8

                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

         Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.

                           The Issuers may, at the option of their respective
boards of directors or the Board of Directors of CCI evidenced by a resolution
set forth in an Officers' Certificate of each of the Issuers, at any time, elect
to have either Section 8.02 or 8.03 applied to any series of outstanding Notes
and the obligations of the Guarantors under the Note Guarantees with respect
thereto upon compliance with the conditions set forth below in this Article 8.

         Section 8.02. Legal Defeasance and Discharge.

                           Upon the Issuers' exercise under Section 8.01 of the
option applicable to this Section 8.02, the Issuers and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04, be
deemed to have been discharged from their obligations with respect to any series
of outstanding Notes and the Note Guarantees with respect thereto on the date
the conditions set forth below are satisfied (hereinafter, "Legal Defeasance").
For this purpose, Legal Defeasance means that the Issuers and the Guarantors
shall be deemed to have paid and discharged the entire Indebtedness represented
by any series of outstanding Notes and the Note Guarantees with respect thereto,
which shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.05 and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all their other obligations under such series of
Notes, such Note Guarantees with respect thereto and this Indenture (and the
Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder:

                  (a)      the rights of Holders of such series of outstanding
         Notes to receive payments in respect of the principal of, premium, if
         any, and interest on such series of Notes when such payments are due
         from the trust referred to below;

                                      -77-


                  (b)      the Issuers' obligations with respect to such series
         of Notes concerning issuing temporary Notes, registration of Notes,
         mutilated, destroyed, lost or stolen Notes and the maintenance of an
         office or agency for payment and money for security payments held in
         trust;

                  (c)      the rights, powers, trusts, duties and immunities of
         the Trustee and the Issuers' obligations in connection therewith; and

                  (d)      the Legal Defeasance provisions of this Indenture;

                           Subject to compliance with this Article 8, the
Issuers may exercise their option under this Section 8.02 notwithstanding the
prior exercise of their option under Section 8.03.

         Section 8.03. Covenant Defeasance.

                           Upon the Issuers' exercise under Section 8.01 of the
option applicable to this Section 8.03, the Issuers and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04, be
released from their obligations under the covenants contained in Article 5 and
Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.19,
4.20, 10.01 and 10.02 with respect to such series of Notes on and after the date
the conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant
Defeasance"), and such series of Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such series of Notes shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Notes, the Issuers may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01, but, except as specified above, the remainder of
this Indenture and such Notes shall be unaffected thereby. In addition, upon the
Issuers' exercise under Section 8.01 of the option applicable to this Section
8.03, subject to the satisfaction of the conditions set forth in Section 8.04,
Sections 6.01(3) through 6.01(6) shall not constitute Events of Default.

         Section 8.04. Conditions to Legal or Covenant Defeasance.

                           The following shall be the conditions to the
application of either Section 8.02 or 8.03 to the outstanding Notes:

                           In order to exercise either Legal Defeasance or
Covenant Defeasance with respect to a series of Notes:

                  (1)      the Issuers must irrevocably deposit with the
         Trustee, in trust, for the benefit of the Holders of such series of
         Notes, cash in U.S. dollars, non-callable Government Securities or a
         combination thereof, in such amounts as will be sufficient, in the
         opinion of a nationally recognized firm of independent public
         accountants, to pay the principal of, premium, if any, and interest on
         the outstanding Notes of such series on the stated maturity or on the
         applicable redemption date, as the case may be, and the Issuers must
         specify whether such series of Notes is being defeased to maturity or
         to a particular redemption date;

                  (2)      in the case of Legal Defeasance, the Issuers shall
         have delivered to the Trustee an Opinion of Counsel reasonably
         acceptable to the Trustee confirming that

                                      -78-


                           (a)      the Issuers have received from, or there has
                  been published by, the Internal Revenue Service a ruling or

                           (b)      since the Issue Date, there has been a
                  change in the applicable federal income tax law,

          in either case to the effect that, and based thereon such Opinion of
          Counsel shall confirm that, the Holders of such series of outstanding
          Notes will not recognize income, gain or loss for federal income tax
          purposes as a result of such Legal Defeasance and will be subject to
          federal income tax on the same amounts, in the same manner and at the
          same times as would have been the case if such Legal Defeasance had
          not occurred;

                  (3)      in the case of Covenant Defeasance, the Issuers shall
         have delivered to the Trustee an Opinion of Counsel reasonably
         acceptable to the Trustee confirming that the Holders of such series of
         outstanding Notes will not recognize income, gain or loss for federal
         income tax purposes as a result of such Covenant Defeasance and will be
         subject to federal income tax on the same amounts, in the same manner
         and at the same times as would have been the case if such Covenant
         Defeasance had not occurred;

                  (4)      no Default or Event of Default shall have occurred
         and be continuing either:

                           (a)      on the date of such deposit (other than a
                  Default or Event of Default resulting from the borrowing of
                  funds to be applied to such deposit); or

                           (b)      insofar as Events of Default from bankruptcy
                  or insolvency events are concerned, at any time in the period
                  ending on the 91st day after the date of deposit;

                  (5)      such Legal Defeasance or Covenant Defeasance will not
         result in a breach or violation of, or constitute a default under, any
         material agreement or instrument (other than this Indenture) to which
         the Company or any of its Restricted Subsidiaries is a party or by
         which the Company or any of its Restricted Subsidiaries is bound;

                  (6)      the Issuers must have delivered to the Trustee an
         Opinion of Counsel to the effect that after the 91st day, assuming no
         intervening bankruptcy, that no Holder is an insider of either of the
         Issuers following the deposit and that such deposit would not be deemed
         by a court of competent jurisdiction a transfer for the benefit of
         either Issuer in its capacity as such, the trust funds will not be
         subject to the effect of any applicable bankruptcy, insolvency,
         reorganization or similar laws affecting creditors' rights generally;

                  (7)      the Issuers must deliver to the Trustee an Officers'
         Certificate stating that the deposit was not made by the Issuers with
         the intent of preferring the Holders of the Notes of such series over
         the other creditors of the Issuers with the intent of defeating,
         hindering, delaying or defrauding creditors of the Issuers or others;
         and

                  (8)      the Issuers must deliver to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent relating to the Legal Defeasance or the Covenant Defeasance
         have been complied with.

                           Notwithstanding the foregoing, the Opinion of Counsel
required by clause (2) above with respect to a Legal Defeasance need not be
delivered if all applicable Notes not theretofore delivered to the Trustee for
cancellation

                                      -79-


                  (a)      have become due and payable; or

                  (b)      will become due and payable on the maturity date
         within one year, under arrangements satisfactory to the Trustee for the
         giving of notice of redemption by the Trustee in the name, and at the
         expense, of the Issuers.

                  Section 8.05. Deposited Money and Government Securities to Be
                                Held in Trust; Other Miscellaneous Provisions.

                           Subject to Section 8.06, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 in respect of the outstanding
Notes of a particular series shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Issuers
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.

                           The Issuers shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or
non-callable Government Securities deposited pursuant to Section 8.04 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.

                           Anything in this Article 8 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Issuers from time to
time upon the request of the Issuers any money or non-callable Government
Securities held by it as provided in Section 8.04 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(1)), are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.

                  Section 8.06. Repayment to Issuers.

                           Any money deposited with the Trustee or any Paying
Agent, or then held by the Issuers, in trust for the payment of the principal
of, premium, if any, or interest on any Note and remaining unclaimed for two
years after such principal, and premium, if any, or interest has become due and
payable shall be paid to the Issuers on their request or (if then held by the
Issuers) shall be discharged from such trust; and the Holder of such Note shall
thereafter look only to the Issuers for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Issuers as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Issuers cause to be published
once, in The New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining shall be
repaid to the Issuers.

                  Section 8.07. Reinstatement.

                           If the Trustee or Paying Agent is unable to apply any
United States dollars or non-callable Government Securities in accordance with
Section 8.02 or 8.03, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise

                                      -80-


prohibiting such application, then the Issuers' obligations under this Indenture
and the Notes, shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02 or 8.03, as
the case may be; provided, however, that, if the Issuers make any payment of
principal of, premium, if any, or interest on any Note following the
reinstatement of their obligations, the Issuers shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent.

                                   ARTICLE 9

                        AMENDMENT, SUPPLEMENT AND WAIVER

                  Section 9.01. Without Consent of Holders.

                           Notwithstanding Section 9.02, the Issuers, the
Guarantors and the Trustee, together, may amend or supplement this Indenture,
the Notes, the Note Guarantees or the Security Documents without the consent of
any Holder:

                  (1)      to cure any ambiguity, defect or inconsistency;

                  (2)      to provide for uncertificated Notes in addition to or
         in place of certificated Notes;

                  (3)      to provide for or confirm the issuance of Additional
         Notes;

                  (4)      to provide for the assumption of either Issuer's
         obligations to Holders in the case of a merger or consolidation or sale
         of all or substantially all of the assets of such Issuer pursuant to
         Article 5;

                  (5)      to make any change that would provide any additional
         rights or benefits to the Holders or that does not adversely affect the
         legal rights under this Indenture of any Holder;

                  (6)      to, if applicable, comply with requirements of the
         SEC in order to, if applicable, effect or maintain the qualification of
         this Indenture under the TIA or otherwise as necessary to comply with
         applicable law;

                  (7)      to release Collateral or a Guarantor, as permitted
         under the terms of this Indenture or the Security Documents;

                  (8)      to add any additional assets as Collateral; or

                  (9)      to add a Guarantor.

                           Upon the request of the Issuers accompanied by a
resolution of their respective boards of directors or the Board of Directors of
CCI authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 7.02, the
Trustee shall join with the Issuers in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture, the Security Documents or otherwise.

                                      -81-


                  Section 9.02. With Consent of Holders.

                           Except as otherwise provided in this Section 9.02,
this Indenture (including Sections 4.11 and 4.16), the Notes, the Note
Guarantees or the Security Documents may be amended or supplemented with the
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or a tender offer or exchange offer for, Notes)
and, subject to Sections 6.04 and 6.07, any existing Default or compliance with
any provision of this Indenture, the Notes (other than any provision relating to
the right of any Holder to bring suit for the enforcement of any payment of
principal, premium, if any, and interest on the Note, on or after the scheduled
due dates expressed in the Notes), the Note Guarantees or the Security Documents
may be waived with the consent of the Holders of a majority in aggregate
principal amount of the Notes then outstanding; provided, however, that if any
such amendment or waiver, by its terms, directly and disproportionately affects
one series of the Notes then outstanding, such amendment or waiver shall require
the consent of the holders of a majority in aggregate principal amount of such
series of Notes, and if any such amendment only affects one series of Notes, the
holders of the other series of Notes shall not be required to consent thereto
(including, without limitation, consents obtained in connection with a purchase
of, or a tender offer or exchange offer for, Notes). Section 2.08 shall
determine which Notes are considered to be "outstanding" for purposes of this
Section 9.02.

                           Upon the request of the Issuers accompanied by a
resolution of their respective boards of directors or the Board of Directors of
CCI authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 7.02, the Trustee shall join with the Issuers in
the execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture directly affects the Trustee's own rights, duties or
immunities under this Indenture, the Security Documents or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture.

                           It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.

                           After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Issuers shall mail to the Holders affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Issuers to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07, the Holders
of a majority in aggregate principal amount of the Notes then outstanding may
waive compliance in a particular instance by the Issuers with any provision of
this Indenture or the Notes. However, without the consent of each Holder
affected, an amendment, supplement or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):

                  (1)      reduce the principal amount of Notes whose Holders
         must consent to an amendment, supplement or waiver;

                  (2)      reduce the principal of or change the fixed maturity,
         or ranking, of any Note or alter the scheduled payment provisions with
         respect to the redemption of the Notes, or payment of principal or
         interest (other than provisions relating to Sections 4.11 and 4.16);

                  (3)      reduce the rate of or extend the time for payment of
         interest on any Note (including Special Interest, if any);

                                      -82-


                  (4)      waive a Default or Event of Default in the payment of
         principal of, or premium, if any, or interest on the Notes (except a
         rescission of acceleration of the Notes by the Holders of at least a
         majority in aggregate principal amount of the Notes and a waiver of the
         payment default that resulted from such acceleration);

                  (5)      make any Note payable in money other than that stated
         in the Notes;

                  (6)      make any change in the provisions of this Indenture
         relating to waivers of past Defaults or the rights of Holders to
         receive payments of principal of, or premium, if any, or interest on
         the Notes;

                  (7)      waive a redemption payment with respect to any Note
         (other than a payment required by Section 4.11 or 4.16);

                  (8)      make any change in this Section 9.02; or

                  (9)      release any Guarantor that is a Significant
         Subsidiary from any of its obligations under its Note Guarantee
         otherwise than in accordance with the terms of this Indenture.

                           Notwithstanding the foregoing provisions of this
Section 9.02, in addition to the release of Collateral expressly permitted by
this Indenture and the Security Documents, all or any portion of the Collateral
may be released under this Indenture and the Security Documents as to the Notes
and any Guarantor may be released from its obligations under its Note Guarantee,
with the consent of the Holders of at least 66 2/3% in aggregate principal
amount of the Notes then outstanding.

                  Section 9.03. Compliance with Trust Indenture Act.

                           Every amendment or supplement to this Indenture or
the Notes shall be set forth in an amended or supplemental Indenture that
complies with the TIA as then in effect.

                  Section 9.04. Revocation and Effect of Consents.

                           Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder is a continuing consent by the Holder and
every subsequent Holder or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as to
its Note if the Trustee receives written notice of revocation before the date
the waiver, supplement or amendment becomes effective. An amendment, supplement
or waiver becomes effective in accordance with its terms and thereafter binds
every Holder.

                  Section 9.05. Notation on or Exchange of Notes.

                           The Trustee may place an appropriate notation about
an amendment, supplement or waiver on any Note thereafter authenticated. The
Issuers in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

                           Failure to make the appropriate notation or issue a
new Note shall not affect the validity and effect of such amendment, supplement
or waiver.

                                      -83-


                  Section 9.06. Trustee to Sign Amendments, etc.

                           The Trustee shall sign any amended or supplemental
Indenture authorized pursuant to this Article 9 if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee under this Indenture, the Security Documents or otherwise. The Issuers
may not sign an amendment or supplemental Indenture until their respective
Boards of Directors approve it. In executing any amended or supplemental
indenture, the Trustee shall be entitled to receive and (subject to Section
7.01) shall be fully protected in relying upon, in addition to the documents
required by Section 12.04, an Officers' Certificate and an Opinion of Counsel,
in each case from each of the Issuers, stating that the execution of such
amended or supplemental indenture is authorized or permitted by this Indenture.

                                   ARTICLE 10

                        COLLATERAL AND SECURITY DOCUMENTS

                  Section 10.01. Security Documents; Additional Collateral.

                           The Company and each Guarantor will execute and
comply with, and cause each of its Subsidiaries to execute and comply with, the
terms of each Security Document to which such Person is, or is required to be, a
party.

                  Section 10.02. Opinions.

                           The Company shall furnish to the Trustee on March 15
of each year, beginning March 15, 2005, an Opinion or Opinions of Counsel, dated
as of such date, either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, registering, filing,
re-recording, re-registering and re-filing of (x) this Indenture, the Security
Documents and all supplemental Indentures and amendments thereto, and (y)
financing statements, continuation statements or other instruments of further
assurances, as is necessary under applicable law to maintain the Lien created by
each such Security Document and reciting the details of such action or referring
to prior Opinions of Counsel in which such details are given, and stating that
all financing statements and continuation statements have been executed and
filed that are necessary to perfect such Lien, or stating that, in the opinion
of such counsel, no such action is necessary to maintain such Liens and such
other statements or certificates as may be required by the Security Documents.

                  Section 10.03. Suits to Protect the Collateral.

                           The Trustee shall have power to institute in its name
and to maintain such suits and proceedings as it may deem expedient to prevent
any impairment of the Collateral by any acts which may be unlawful or in
violation of this Indenture or any of the Security Documents, and such suits and
proceedings as necessary to preserve or protect its interests and the interests
of the Holders in the Collateral, including power to institute and maintain
suits or proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement of, or compliance
with, such enactment, rule or order would impair the security hereunder or under
any of the Security Documents, or be prejudicial to the interests of the Holders
or the Trustee.

                                      -84-


                  Section 10.04. Release of Collateral.

                  (a)      The Trustee shall not at any time release Collateral
from the Liens created by this Indenture and the Security Documents unless such
release is in accordance with the provisions of this Indenture and the Security
Documents.

                  (b)      In the event that (i) all of the Liens on any of the
Collateral securing the CCO Credit Facility and the Related Obligations or any
other Indebtedness under clause (1) of the second paragraph of Section 4.10 are
released for any reason, including, without limitation, in connection with the
repayment in full of all obligations under the CCO Credit Facility and the
Related Obligations or any other Indebtedness under clause (1) of the second
paragraph of Section 4.10, in each case, without the refinancing thereof on a
secured basis, and there is no Event of Default pursuant to clause (1) or (2) of
Section 6.01 hereof then existing (or that would result therefrom), or (ii) any
Collateral is released in accordance with the provisions of Section 9.02, the
Liens on such Collateral securing the Notes will be automatically released and
terminated. In addition, in the event of the Legal Defeasance or Covenant
Defeasance or discharge of a series of Notes, the Liens on all Collateral
securing such series of Notes (except for any Liens required by Article 8) will
be automatically released and terminated.

                  (c)      To evidence any such release and termination, the
Company shall be entitled to such releases, terminations and other documents and
instruments as the Company or any third party entitled to rely thereon may
request, and the Trustee shall, at the Company's expense, execute and deliver
such requested releases, terminations and other documents and instruments, with
respect to items of Collateral subject to release pursuant to clauses (a) and
(b) above (the "Released Collateral") upon compliance with the conditions
precedent that the Company shall have delivered to the Trustee the following:

                  (i)      a notice from the Company requesting release of
         Released Collateral (a "Company Notice") and specifically describing
         the proposed Released Collateral;

                  (ii)     an Officers' Certificate certifying that

                           (1)      the release of such Released Collateral
                  complies with the terms and conditions of this Indenture,

                           (2)      all conditions precedent in this Indenture
                  and the Security Documents to such release have been complied
                  with,

                           (3)      no Default or Event of Default pursuant to
                  clause (1) or (2) of Section 6.01 hereof is in effect or
                  continuing on the date thereof or would result therefrom
                  (including, without limitation, as a result of an Insolvency
                  Proceeding), and

                  (iii)    an Opinion of Counsel substantially to the effect
         that all conditions precedent herein and under any of the Security
         Documents relating to the release of such Collateral have been complied
         with.

                  (d)      The release of any Collateral from the Liens of the
Security Documents or the release, in whole or in part, of the Liens created by
the Security Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to this Indenture or the applicable Security
Documents.

                                      -85-


                  Section 10.05. Sufficiency of Release.

                           All purchasers and grantees of any property or rights
purporting to be released shall be entitled to rely upon any release executed by
the Trustee hereunder as sufficient for the purpose of this Indenture and as
constituting a good and valid release of the property therein described from the
Lien of this Indenture and of the Security Documents.

                  Section 10.06. Actions by the Trustee.

                           Subject to the provisions of the Security Documents
and this Indenture, the Trustee may in its sole discretion and without the
consent of the Holders take all actions that are deemed necessary or appropriate
in order to (i) enforce any of the terms of the Security Documents and (ii) to
collect and receive all amounts payable in respect of the obligations of the
Company and any Guarantors under the Security Documents and this Indenture. The
Trustee shall have the power to institute and maintain such suits and
proceedings as it may deem expedient in order to prevent any impairment of the
Collateral by any act that may be unlawful or in violation of this Indenture or
the Security Documents, and such suits and proceedings as the Trustee may deem
expedient to preserve or protect its interests and those of the Holders in the
Collateral. No duty beyond that set forth in Section 7.01 is imposed on the
Trustee pursuant to this Section 10.06.

                                   ARTICLE 11

                                    GUARANTEE

                           The following provisions shall become applicable to
each Guarantor upon it initially becoming, or being required to become, a
Guarantor:

                  Section 11.01. Unconditional Guarantee.

                           Each Guarantor unconditionally guarantees, on a
senior basis jointly and severally, to each Holder authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, the Notes or
the obligations of the Company hereunder or thereunder, that: (i) the principal
of and interest on the Notes will be promptly paid in full when due, subject to
any applicable grace period, whether at maturity, by acceleration or otherwise,
and interest on the overdue principal, if any, and interest on any interest, to
the extent lawful, of the Notes and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (ii) in case
of any extension of time of payment or renewal of any Notes or of any such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set forth
in Section 11.03. Each Guarantor agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, and action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each Guarantor waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that this Note Guarantee will not be discharged except by complete performance
of the obligations contained in the Notes, this Indenture, the Security
Documents and in this Note Guarantee, and waives any and all defenses available
to a surety (other than payment in full). If any Holder or the Trustee is
required by any

                                      -86-


court or otherwise to return to the Company, any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or any Guarantor, any amount paid by the Company or any Guarantor to the Trustee
or such Holder, this Note Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article 6, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Note Guarantee.

                  Section 11.02. Severability.

                           In case any provision of this Note Guarantee shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

                  Section 11.03. Limitation of Guarantor's Liability.

                           Each Guarantor and by its acceptance hereof each
Holder confirms that it is the intention of all such parties that the guarantee
by such Guarantor pursuant to its Note Guarantee not constitute a fraudulent
transfer or conveyance for purposes of any Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law. To effectuate the foregoing intention, the Holders and
such Guarantor irrevocably agree that the obligations of such Guarantor under
the Note Guarantee shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Guarantor and after
giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under its
Note Guarantee or pursuant to Section 11.05, result in the obligations of such
Guarantor under the Note Guarantee not constituting such fraudulent transfer or
conveyance.

                  Section 11.04. Release of Guarantor.

                  (a)      In the event that all of a Guarantor's obligations
with respect to the CCO Credit Facility and the Related Obligations or other
Indebtedness under clause (1) of the second paragraph of Section 4.10 are
released or discharged, in full, for any reason, including, without limitation,
in connection with the repayment in full of all obligations under the CCO Credit
Facility and the Related Obligations or such other Indebtedness, the Note
Guarantee of such Guarantor will also be automatically released and terminated.
Notwithstanding the preceding sentence, no such release shall be effective
against the Trustee or the Holders if a Default or Event of Default in the
payment of principal of, premium, if any, or interest on the Notes (including in
connection with an offer to purchase) (including as a result of the events
described under clause (7) or (8) of Section 6.01) is in effect or continuing on
the date thereof, or would result therefrom shall have occurred and be
continuing under this Indenture as of the time of such proposed release until
such time as (1) such Default or Event of Default is cured or (2) such release
is consented to by the applicable Holders in accordance with the terms of this
Indenture.

                           The Note Guarantees will be automatically released ab
initio immediately prior to the entry of a Judgment (that remains unstayed) by a
court of competent jurisdiction to the effect that such Note Guarantees (solely
because of the existence of the provisions in the intercreditor agreement to be
entered into between the Trustee on behalf of the Holders and the representative
(the "Representative") of the lenders under the CCO Credit Facility relating to
the Note Guarantees) provide holders of Indebtedness under the CCH II
Indentures, CCI Indentures, CCOH Indentures or Charter Holdings Indentures

                                      -87-


(as in effect on the Issue Date) the right to accelerate (whether by reason of a
violation of a covenant contained therein or as a result of a cross-acceleration
provision therein tied to a covenant violation under any other such indenture)
the maturity of such debt not otherwise then due, unless at such time such
intercreditor agreement provisions are released by the Representative. Upon
either (i) the entry of any subsequent order overruling or reversing any such
Judgment or (ii) the occurrence of a Default in the payment of principal of,
premium, if any, or interest on the Notes (including in connection with an offer
to purchase) during any period in which such Judgment is being contested by any
affected Parent or Guarantor in accordance with the next succeeding paragraph,
the Note Guarantees shall be automatically reinstated, subject to the provisions
of Section 4.17 and this Section 11.04, as if never released.

                           CCO and the Guarantors will take, and will cause each
Parent to take, all commercially reasonable action to contest, including by
seeking all stays of enforcement and appeals of, any non-final Judgment until
entry of a final, non-appealable Judgment, any notice of default or acceleration
or related claim or proceeding brought by holders of Indebtedness under the CCI
Indentures, the Charter Holdings Indentures, the CCH II Indentures or the CCOH
Indentures. For the purposes of this Section 11.04, a settlement requiring
release of Note Guarantees shall not be deemed commercially reasonable. Any such
release under the preceding paragraph shall not affect the obligations of CCOH,
CCO and its Subsidiaries to continue to provide the security interests in the
Collateral for the benefit of the Trustee and the Holders. "Judgment" for
purposes of this Section 11.04 means a judicial order, memorandum or decision.

                  (b)      In addition to release under the circumstances
described in the foregoing clause (a), a Restricted Subsidiary that is a
Guarantor shall be released from its obligations under its Note Guarantee with
respect to a particular series of Notes and its obligations under this Indenture
and the Security Documents:

                  (1)      in the event of the Legal Defeasance or Covenant
         Defeasance or discharge of such series of Notes;

                  (2)      upon the dissolution of a Guarantor which is not
         prohibited by the terms of this Indenture;

                  (3)      in the event of a sale or other disposition of all or
         substantially all of the assets of such Guarantor, by way of merger,
         consolidation or otherwise, or a sale or other disposition of all of
         the Equity Interests of such Guarantor then held by the Issuers and
         their Restricted Subsidiaries; provided, however, that such sale or
         disposition otherwise complies with all of the terms of this Indenture,
         including those of Section 4.11; or

                  (4)      if such Guarantor is designated as an Unrestricted
         Subsidiary in accordance with the provisions of this Indenture, upon
         effectiveness of such designation or when it first ceases to be a
         Restricted Subsidiary, respectively.

                  (c)      The Trustee shall deliver an appropriate instrument
or instruments evidencing such release upon receipt of a request by the Company
accompanied by an Officers' Certificate and an Opinion of Counsel certifying as
to the compliance with this Section 11.04.

                  Section 11.05. Contribution.

                           In order to provide for just and equitable
contribution among the Guarantors, the Guarantors agree, inter se, that in the
event any payment or distribution is made by any Guarantor (a "Funding
Guarantor") under the Note Guarantee, such Funding Guarantor shall be entitled
to a contribution from

                                      -88-


all other Guarantors in a pro rata amount based on the Adjusted Net Assets (as
defined below) of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in discharging
the Company's obligations with respect to the Notes or any other Guarantor's
obligations with respect to its Note Guarantee. "Adjusted Net Assets" of such
Guarantor at any date shall mean the lesser of the amount by which (x) the fair
value of the property of such Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date),
but excluding liabilities under the Note Guarantee of such Guarantor at such
date, and (y) the present fair salable value of the assets of such Guarantor at
such date exceeds the amount that will be required to pay the probable liability
of such Guarantor on its debts (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), excluding debt in
respect of the Note Guarantee of such Guarantor, as they become absolute and
matured.

                  Section 11.06. Waiver of Subrogation.

                           Until one year after all obligations are paid in
full, each Guarantor irrevocably waives any claims or other rights which it may
now or hereafter acquire against the Company that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under its
Note Guarantee and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any Holder against the Company, whether or
not such claim, remedy or right arises in equity, or under contract, statute or
common law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence and the Notes shall not have been paid in full, such amount shall have
been deemed to have been paid to such Guarantor for the benefit of, and held in
trust for the benefit of, the Holders, and shall forthwith be paid to the
Trustee for the benefit of such Holders to be credited and applied upon the
Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 11.06 is knowingly made in contemplation of
such benefits.

                  Section 11.07. Execution of Note Guarantee.

                           To evidence their Note Guarantee to the Holders set
forth in this Article 11, the Guarantors agree on becoming a Guarantor to
execute a Note Guarantee in substantially the form attached hereto as Exhibit E,
which shall be endorsed on each Note ordered to be authenticated and delivered
by the Trustee. Each Guarantor agrees that its Note Guarantee set forth in this
Article 11 shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee. Each such Note Guarantee
shall be signed on behalf of each Guarantor by one of its authorized Officers
prior to the authentication of the Note on which it is endorsed, and the
delivery of such Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of such Note Guarantee on behalf of
such Guarantor. Such signatures upon the Note Guarantee may be by manual or
facsimile signature of such Officer and may be imprinted or otherwise reproduced
on the Note Guarantee, and in case any such Officer who shall have signed the
Note Guarantee shall cease to be such Officer before the Note on which such Note
Guarantee is endorsed shall have been authenticated and delivered by the Trustee
or disposed of by the Company, such Note nevertheless may be authenticated and
delivered or disposed of as though the Person who signed the Note Guarantee had
not ceased to be such Officer of the Guarantor.

                                      -89-


                  Section 11.08. Waiver of Stay, Extension or Usury Laws.

                           Each Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive each
such Guarantor from performing its Note Guarantee as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each such Guarantor hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

                                   ARTICLE 12

                                  MISCELLANEOUS

                  Section 12.01. Trust Indenture Act Controls.

                           If any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.

                  Section 12.02. Notices.

                           Any notice or communication by the Issuers or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:

                          If to the Issuers or any Guarantor:

                  Charter Communications Operating, LLC
                  Charter Communications Operating Capital Corp.
                  c/o Charter Communications, Inc.
                  12405 Powerscourt Drive, Suite 100
                  St. Louis, Missouri 63131
                  Telecopier No.: (314) 965-8793
                  Attention: Secretary

                          With a copy to:

                  Irell & Manella LLP
                  1800 Avenue of the Stars
                  Suite 900
                  Los Angeles, California 90067
                  Telecopier No.: (310) 556-5393
                  Attention: Meredith Jackson, Esq.

                          If to the Trustee:

                  Wells Fargo Bank, N.A.
                  Corporate Trust Services

                                      -90-


                  MAC N9303-120
                  Sixth Street and Marquette Avenue
                  Minneapolis, MN 55479
                  Telecopier No.: 612-667-2160
                  Attention: Michael Lechner

                           The Issuers or the Trustee, by notice to the other,
may designate additional or different addresses for subsequent notices or
communications.

                           All notices and communications (other than those sent
to Holders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.

                           Any notice or communication to a Holder shall be
mailed by first class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address shown
on the register kept by the Registrar. Any notice or communication shall also be
so mailed to any Person described in TIA Section 313(c), to the extent required
by the TIA. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.

                           If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it.

                           If the Issuers mail a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at the same time.

                  Section 12.03. Communication by Holders with Other Holders.

                           Holders may communicate pursuant to TIA Section
312(b) with other Holders with respect to their rights under this Indenture or
the Notes. The Issuers, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).

                  Section 12.04. Certificate and Opinion as to Conditions
                                 Precedent.

                           Upon any request or application by the Issuers to the
Trustee to take any action under this Indenture, the Issuers shall furnish to
the Trustee:

                  (i)      an Officers' Certificate in form and substance
         reasonably satisfactory to the Trustee (which shall include the
         statements set forth in Section 12.05) stating that, in the opinion of
         the signers, all conditions precedent and covenants, if any, provided
         for in this Indenture relating to the proposed action have been
         satisfied; and

                  (ii)     an Opinion of Counsel in form and substance
         reasonably satisfactory to the Trustee (which shall include the
         statements set forth in Section 12.05) stating that, in the opinion of
         such counsel, all such conditions precedent and covenants have been
         satisfied.

                                      -91-


                  Section 12.05. Statements Required in Certificate or Opinion.

                           Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture (other
than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with
the provisions of TIA Section 314(e) and shall include:

                  (i)      a statement that the Person making such certificate
         or opinion has read such covenant or condition;

                  (ii)     a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                  (iii)    a statement that, in the opinion of such Person, he
         or she has made such examination or investigation as is necessary to
         enable him to express an informed opinion as to whether or not such
         covenant or condition has been satisfied; and

                  (iv)     a statement as to whether or not, in the opinion of
         such Person, such condition or covenant has been satisfied.

                  Section 12.06. Rules by Trustee and Agents.

                           The Trustee may make reasonable rules for action by
or at a meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.

                  Section 12.07. No Personal Liability of Directors, Officers,
                                 Employees, Managers, Members and Stockholders.

                           No director, officer, employee, incorporator,
manager, member or stockholder of the Issuers, or director, officer, employee,
incorporator or stockholder of CCI as manager of the Issuers, as such, shall
have any liability for any obligations of the Issuers under the Notes or this
Indenture, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.

                  Section 12.08. Governing Law.

                           THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES AND ANY NOTE
GUARANTEES WITHOUT GIVING EFFECT TO THE APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES OR ANY NOTE GUARANTEE.

                  Section 12.09. No Adverse Interpretation of Other Agreements.

                           This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Issuers or their Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

                                      -92-


                  Section 12.10. Successors.

                           All agreements of the Issuers in this Indenture and
the Notes, as the case may be, shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.

                  Section 12.11. Severability.

                           In case any provision in this Indenture or the Notes,
as the case may be, shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

                  Section 12.12. Counterpart Originals.

                           The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.

                  Section 12.13. Table of Contents, Headings, etc.

                           The Table of Contents, Cross-Reference Table and
Headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part of this Indenture
and shall in no way modify or restrict any of the terms, conditions or
provisions.

                                   ARTICLE 13

                           SATISFACTION AND DISCHARGE

                  Section 13.01. Satisfaction and Discharge of Indenture.

                           This Indenture shall cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Notes herein expressly provided for), and the Trustee, on demand of and at the
expense of the Issuers, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

                  (1)      either

                  (a)      all Notes theretofore authenticated and delivered
         (other than (i) Notes which have been destroyed, lost or stolen and
         which have been replaced or paid as provided in Section 2.07 and (ii)
         Notes for whose payment money has theretofore been deposited in trust
         or segregated and held in trust by the Issuers and thereafter repaid to
         the Issuers or discharged from such trust,) have been delivered to the
         Trustee for cancellation; or

                  (b)      all such Notes not theretofore delivered to the
         Trustee for cancellation

                           (i)      have become due and payable, or

                           (ii)     will become due and payable at their Stated
                  Maturity within one year, or

                                      -93-


                           (iii)    are to be called for redemption within one
                  year under arrangements satisfactory to the Trustee for the
                  giving of notice of redemption by the Trustee in the name, and
                  at the expense, of the Issuers,

         and the Issuers, in the case of (i), (ii) or (iii) above, have
         deposited or caused to be deposited with the Trustee as trust funds in
         trust for the purpose an amount sufficient to pay and discharge the
         entire indebtedness on such Notes not theretofore delivered to the
         Trustee for cancellation, for principal (and premium, if any) and
         interest to the date of such deposit (in the case of Notes which have
         become due and payable) or to the maturity or redemption thereof, as
         the case may be;

                  (2)      the Issuers have paid or caused to be paid all other
         sums payable hereunder by the Issuers; and

                  (3)      each of the Issuers has delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that all
         conditions precedent herein provided for relating to the satisfaction
         and discharge of this Indenture have been complied with.

                           Notwithstanding the satisfaction and discharge of
this Indenture pursuant to this Article 11, the obligations of the Issuers to
the Trustee under Section 7.07, and, if money shall have been deposited with the
Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations
of the Trustee under Section 13.02 shall survive.

                  Section 13.02. Application of Trust Money.

                           All money deposited with the Trustee pursuant to
Section 13.01 shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent as the Trustee may determine, to the Persons entitled
thereto, of the principal (and premium, if any) and interest for whose payment
such money has been deposited with the Trustee.

                         [Signatures on following page]

                                      -94-


                                   SIGNATURES

Dated as of April 27, 2004

                                         CHARTER COMMUNICATIONS OPERATING, LLC,
                                         as an Issuer


                                         By: /s/ Eloise E. Schmitz
                                             ___________________________________
                                             Name: Eloise E. Schmitz
                                             Title: Vice President


                                         CHARTER COMMUNICATIONS OPERATING
                                         CAPITAL CORP., as an Issuer


                                         By: /s/ Derek Chang
                                             ___________________________________
                                             Name: Derek Chang
                                             Title: Executive Vice President




                                         WELLS FARGO BANK, N.A.,
                                         as Trustee

                                         By: /s/ Michael T. Lechner
                                             ----------------------------------
                                             Name: Michael T. Lechner
                                             Title: Assistant Vice President

                                      -2-


                                                                     EXHIBIT A-1

                                 [Face of Note]

                              CUSIP NO. [_________]

                      8% Senior Second Lien Notes due 2012

No.

                               $[________________]

                      CHARTER COMMUNICATIONS OPERATING, LLC

                                       and

                 CHARTER COMMUNICATIONS OPERATING CAPITAL CORP.

promise to pay to ____________________________________________________________,

or registered assigns,

the principal amount of _____________________________________________ Dollars

($______________________________) on April 30, 2012.

Interest Payment Dates: April 30 and October 30

Record Dates: April 15 and October 15

Subject to restrictions set forth in this Note.

                                      A-1-1



                           IN WITNESS WHEREOF, each of Charter Communications
Operating, LLC and Charter Communications Operating Capital Corp. has caused
this instrument to be duly executed.

Dated: [          ], 2004

                                         CHARTER COMMUNICATIONS OPERATING, LLC

                                         By: ___________________________________
                                             Name:
                                             Title:

                                         By: ___________________________________
                                             Name:
                                             Title:

                                         CHARTER COMMUNICATIONS OPERATING
                                         CAPITAL CORP.

                                         By: ___________________________________
                                             Name:
                                             Title:

                                         By: ___________________________________
                                             Name:
                                             Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

WELLS FARGO BANK, N.A.,
as Trustee

By: __________________________________
    Authorized Signatory

                                      A-1-2



                                 [Back of Note]

                      8% Senior Second Lien Notes due 2012

                  "THE ISSUERS HAVE REQUESTED THE DEPOSITORY TRUST COMPANY NOT
                  TO TRANSFER ANY INTEREST IN THIS GLOBAL NOTE BY EFFECTING
                  BOOK-ENTRY DELIVERIES UNTIL JUNE 6, 2004."(1)

                  "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
                  INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
                  THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
                  TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
                  (i) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
                  REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (ii) THIS
                  GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
                  TO SECTION 2.06(a) OF THE INDENTURE, (iii) THIS GLOBAL NOTE
                  MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
                  SECTION 2.11 OF THE INDENTURE AND (iv) THIS GLOBAL NOTE MAY BE
                  TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
                  CONSENT OF THE ISSUERS."(2)

                  "THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
                  UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
                  AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
                  EXCEPT (a) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
                  IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
                  144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
                  OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
                  TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN
                  OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
                  REGULATION S UNDER THE SECURITIES ACT, (3) TO AN INSTITUTIONAL
                  ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
                  REGISTRATION REQUIREMENTS OF THE SECURITIES ACT SUBJECT TO THE
                  CERTIFICATION AND DELIVERY REQUIREMENTS OF THE INDENTURE
                  GOVERNING THE NOTES, (4) PURSUANT TO AN EXEMPTION FROM
                  REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
                  THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE
                  REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (b) IN
                  ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES
                  OF THE UNITED STATES."(3)

- -----------------
(1)      This paragraph should be included only for temporary Regulation S
         Global Notes.

(2)      This paragraph should be included only if the Notes are issued in
         global form.

(3)      This paragraph should be removed upon the exchange of Notes for
         Exchange Notes in an Exchange Offer or upon the registration of the
         Notes pursuant to the terms of a Registration Rights Agreement.

                                      A-1-3



                  Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.

                           1.       INTEREST. Charter Communications Operating,
LLC, a Delaware limited liability company (the "Company"), and Charter
Communications Operating Capital Corp., a Delaware corporation ("Capital Corp"
and, together with the Company, the "Issuers"), promise to pay interest on the
principal amount of this Note at the rate of 8% per annum from the Issue Date
until maturity. The Issuers will pay interest semi-annually in arrears on April
30 and October 30 of each year (each an "Interest Payment Date"), or if any such
day is not a Business Day, on the next succeeding Business Day. Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of issuance; provided that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be October 30, 2004. The Issuers shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
that is 2% per annum in excess of the rate then in effect; they shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

                           2.       METHOD OF PAYMENT. The Issuers shall pay
interest on the Notes (except defaulted interest) to the Persons who are
registered Holders at the close of business on the April 15 or October 15 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium, if any, and interest at the office or
agency of the Issuers maintained for such purpose within or without the City and
State of New York, or, at the option of the Issuers, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium on
all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Issuers or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.

                           3.       PAYING AGENT AND REGISTRAR. Initially, Wells
Fargo Bank, N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

                           4. INDENTURE. The Issuers issued the Notes under an
Indenture dated as of April 27, 2004 (the "Indenture") among the Issuers and the
Trustee. The Notes arise out of and are made in accordance with the Indenture,
including the terms stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code
Sections 77aaa-77bbbb). The Holders are referred to the Indenture and such Act
for a complete statement of such terms.

                           5.       OPTIONAL REDEMPTION.

                           (a)      The Issuers may, at any time and from time
to time, at their option, redeem the outstanding Eight Year Notes, in whole or
in part, at a redemption price equal to 100% of the

                                     A-1-4


principal amount thereof plus accrued and unpaid interest, if any, to the
redemption date, plus the Make-Whole Premium.

                           (b)      Notwithstanding the provisions of clause (a)
of this Paragraph 5, at any time prior to April 30, 2007, the Issuers may, on
any one or more occasions, redeem up to 35% of the original aggregate principal
amount of the Eight Year Notes issued on the Issue Date (including the principal
amount of any Additional Eight Year Notes) issued under the Indenture on a pro
rata basis (or nearly as pro rata as practicable), at a redemption price of
108.000% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the redemption date, with the net cash proceeds of one or more Equity
Offerings; provided, however, that:

                  (i)      at least 65% of the original aggregate principal
         amount of the Eight Year Notes issued on the Issue Date (including the
         principal amount of any Additional Eight Year Notes) issued under the
         Indenture remains outstanding immediately after the occurrence of such
         redemption (excluding Eight Year Notes held by the Issuers and their
         Subsidiaries); and

                  (ii)     the redemption must occur within 60 days of the date
         of the closing of such Equity Offering.

                           6.       MANDATORY REDEMPTION. Except as otherwise
provided in Paragraph 7 below, the Issuers shall not be required to make
mandatory redemption payments with respect to the Notes.

                           7.       REPURCHASE AT OPTION OF HOLDER.

                  (a)      If there is a Change of Control, the Issuers shall
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest thereon, if any, to the date of purchase (the "Change of Control
Payment"). Within 10 days following any Change of Control, the Issuers shall
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes on the Change
of Control Payment Date specified in such notice, pursuant to the procedures
required by the Indenture and described in such notice.

                  (b)      If the Company or a Restricted Subsidiary thereof
consummates any Asset Sale, when the aggregate amount of Excess Proceeds exceeds
$25.0 million, the Issuers shall commence an offer (an "Asset Sale Offer")
pursuant to Section 4.11 of the Indenture to all Holders and all holders of
other Indebtedness that is of equal priority with the Notes containing
provisions requiring offers to purchase or redeem with the proceeds of sales of
assets to purchase the maximum principal amount of Notes and such other
Indebtedness of equal priority that may be purchased out of the Excess Proceeds
(which amount includes the entire amount of the Net Proceeds). The offer price
in any Asset Sale Offer will be payable in cash and equal to 100% of principal
amount plus accrued and unpaid interest, if any, to the date of purchase. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Company
may use such Excess Proceeds for any purpose not otherwise prohibited by the
Indenture. If the aggregate principal amount of Notes and such other
Indebtedness of equal priority tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such other
Indebtedness of equal priority to be purchased on a pro rata basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero. Holders that are the subject of an offer to purchase will receive
an Asset Sale Offer from the Issuers prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.

                                     A-1-5


                           8.       DENOMINATIONS, TRANSFER, EXCHANGE. The Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Issuers may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Issuers need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Issuers need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.

                           9.       PERSONS DEEMED OWNERS. The registered Holder
may be treated as its owner for all purposes.

                           10.      AMENDMENT, SUPPLEMENT AND WAIVER. Subject to
certain exceptions, the Indenture, the Notes, the Note Guarantees or the
Security Documents may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or a tender offer or exchange offer for, Notes)
and, subject to Sections 6.04 and 6.07 of the Indenture, any existing Default or
compliance with any provision of the Indenture, the Notes (other than any
provision relating to the right of any Holder to bring suit for the enforcement
of any payment of principal, premium, if any, and interest on such Note, on or
after the scheduled due dates expressed in the Notes), the Note Guarantees or
the Security Documents may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes (including,
without limitation, consents obtained in connection with a purchase of, or a
tender offer or exchange offer for, Notes). Without the consent of any Holder,
the Issuers and the Trustee may amend or supplement the Indenture, the Notes,
the Note Guarantees or the Security Documents to cure any ambiguity, defect or
inconsistency; to provide for uncertificated Notes in addition to or in place of
certificated Notes; to provide for or confirm the issuance of Additional Notes;
to provide for the assumption of either Issuer's obligations to Holders in the
case of a merger or consolidation or sale of all or substantially all of the
assets of such Issuer pursuant to Article 5 of the Indenture; to make any change
that would provide any additional rights or benefits to the Holders or that does
not adversely affect the legal rights under the Indenture of any Holder; to, if
applicable, comply with requirements of the SEC in order to effect or maintain
the qualification of the Indenture under the TIA or otherwise as necessary to
comply with applicable law; to release Collateral or a Guarantor, as permitted
under the terms of the Indenture or the Security Documents; to add any
additional assets as Collateral; or to add a Guarantor.

                           11.      DEFAULTS AND REMEDIES. Each of the following
is an Event of Default: (i) default for 30 consecutive days in the payment when
due of interest on this series of Notes, (ii) default in payment when due of the
principal of or premium, if any, on this series of Notes, (iii) failure by the
Company or any of its Restricted Subsidiaries to comply with Sections 4.16 and
5.01 of the Indenture, (iv) failure by the Company or any of its Restricted
Subsidiaries for 30 consecutive days after written notice thereof has been given
to the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% of the aggregate principal amount of the Notes outstanding to
comply with any of its other covenants or agreements in the Indenture, (v)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries),
whether such Indebtedness or guarantee now exists or is created after the date
of the Indenture, if that default: (a) is caused by a failure to pay at final
stated maturity the principal amount of such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of such
default (a "Payment Default"); or (b) results

                                     A-1-6


in the acceleration of such Indebtedness prior to its express maturity, and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$100 million or more, (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments which are non-appealable aggregating in
excess of $100 million (net of applicable insurance which has not been denied in
writing by the insurer), which judgments are not paid, discharged or stayed for
a period of 60 days, (vii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Significant Subsidiaries, (viii) any Note
Guarantee of any Guarantor that, taken together with all other such Guarantors,
would be a Significant Subsidiary ceases to be in full force and effect (other
than in accordance with the terms of the Indenture and such Note Guarantee) or
is declared null and void and unenforceable or found to be invalid or any
Guarantor denies its liability under its Note Guarantee with respect to any
series of Notes (other than by reason of release of a Guarantor from its Note
Guarantee in accordance with the terms of the Indenture and such Note
Guarantee), and (ix) so long as the Security Documents securing any series of
Notes have not otherwise been terminated in accordance with their terms or the
Collateral as a whole has not otherwise been released from the Lien of the
Security Documents securing any series of Notes in accordance with the terms
thereof, (a) any default by the Company or any Subsidiary in the performance of
its obligations under the Security Documents securing any series of Notes (after
the lapse of any applicable grace periods) or the Indenture which adversely
affects the enforceability, validity, perfection or priority of the Trustee's
Lien on the Collateral or which adversely affects the condition or value of the
Collateral, taken as a whole, in any material respect, (b) repudiation or
disaffirmation by the Company or any Subsidiary of its respective obligations
under the Security Documents securing any series of Notes and (c) the
determination in a judicial proceeding that the Security Documents securing such
series of Notes are unenforceable or invalid against the Company or any
Subsidiary for any reason. In the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company, all
outstanding Notes will become due and payable without further action or notice.
In the case of an Event of Default described in the foregoing clauses (i) and
(ii) as to this series of Notes, the Trustee or the holders of at least 25% in
aggregate principal amount of such series of Notes then outstanding may declare
such series of Notes due and payable immediately. If any other Event of Default
occurs and is continuing, the Trustee by notice to the Issuers or the Holders of
at least 25% in principal amount of the then outstanding Notes by notice to the
Issuers and the Trustee may declare all the Notes to be due and payable. Holders
may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal, premium, if any, or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
premium, if any, or the principal of, the Notes. The Issuers are required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture. Upon becoming aware of any Default or Event of Default, the Issuers
are required to deliver to the Trustee a statement specifying such Default or
Event of Default.

                           12.      TRUSTEE DEALINGS WITH ISSUERS. The Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuers or any Affiliate of the Issuers with the
same rights it would have if it were not Trustee.

                           13.      NO RECOURSE AGAINST OTHERS. A director,
officer, employee, incorporator, manager, member or stockholder of either of the
Issuers, director, officer or employee incorporator or stockholder of CCI as
manager of the Issuers as such, shall not have any liability for any obligations
of the Issuers under the Notes or the Indenture or for any claim based on, in
respect of, or by

                                     A-1-7


reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.

                           14.      GOVERNING LAW. THE INTERNAL LAWS OF THE
STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE AND THE
INDENTURE WITHOUT GIVING EFFECT TO THE APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY. EACH OF THE PARTIES HERETO AND THE HOLDERS AGREE TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.

                           15.      AUTHENTICATION. This Note shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.

                           16.      ABBREVIATIONS. Customary abbreviations may
be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).

                           17.      ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED
GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided
to Holders under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in any
Registration Rights Agreement.

                           18.      CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Issuers have caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.

                           19.      REGISTRATION RIGHTS. PURSUANT TO A
REGISTRATION RIGHTS AGREEMENT, THE COMPANY AND THE GUARANTORS WILL BE OBLIGATED
UPON THE OCCURRENCE OF CERTAIN EVENTS TO CONSUMMATE AN EXCHANGE OFFER PURSUANT
TO WHICH THE HOLDER OF THIS NOTE SHALL HAVE THE RIGHT TO EXCHANGE THIS NOTE FOR
A 8% SENIOR SECOND LIEN NOTE DUE 2012 OF THE COMPANY WHICH HAS BEEN REGISTERED
UNDER THE SECURITIES ACT, IN LIKE PRINCIPAL AMOUNT AND HAVING TERMS IDENTICAL IN
ALL MATERIAL RESPECTS AS THIS NOTE. THE HOLDERS SHALL BE ENTITLED TO RECEIVE
CERTAIN ADDITIONAL INTEREST PAYMENTS IN THE EVENT SUCH EXCHANGE OFFER IS NOT
CONSUMMATED AND UPON CERTAIN OTHER CONDITIONS, ALL PURSUANT TO AND IN ACCORDANCE
WITH THE TERMS OF SUCH REGISTRATION RIGHTS AGREEMENT.(4)

                           20.      SECURITY. THE COMPANY HAS GRANTED, AND
CERTAIN OTHER ENTITIES MAY GRANT IN THE FUTURE, LIENS ON CERTAIN OF THEIR ASSETS
TO

- --------------
(4)      This paragraph should be included only if the Notes are entitled to the
         benefits of a Registration Rights Agreement.

                                     A-1-8


THE TRUSTEE PURSUANT TO THE SECURITY DOCUMENTS. THE LIENS ARE SUBJECT TO
RELEASE UNDER CERTAIN CONDITIONS DESCRIBED IN THE INDENTURE AND THE SECURITY
DOCUMENTS. THE COMPANY WILL EXECUTE AND COMPLY WITH, AND CAUSE EACH OF ITS
SUBSIDIARIES TO EXECUTE AND COMPLY WITH, THE TERMS OF EACH SECURITY DOCUMENT TO
WHICH SUCH PERSON IS, OR IS REQUIRED TO BE, A PARTY.

                           21.      OTHER REFERENCED AGREEMENTS. PURSUANT TO
SECTION 7.12 OF THE INDENTURE, THE TRUSTEE ON BEHALF OF EACH PRESENT AND FUTURE
HOLDER IS AUTHORIZED TO ENTER INTO CERTAIN AGREEMENTS, INCLUDING AN
INTERCREDITOR AGREEMENT WITH THE AGENT SPECIFIED THEREIN ON BEHALF OF AND FOR
THE BENEFIT OF THE HOLDERS OF PARI PASSU FIRST PRIORITY INDEBTEDNESS OF THE
ISSUERS AND THEIR SUBSIDIARIES, AND OTHER AGREEMENTS. EACH HOLDER IN SUCH
CAPACITY ACKNOWLEDGES AND AGREES, ALTHOUGH NONE OF THE ISSUERS OR ANY OF THEIR
AFFILIATES MAY BE A PARTY TO OR BOUND THEREBY, THAT SUCH HOLDER WILL BE BOUND BY
ANY SUCH AGREEMENTS, AND THAT ANY SUCH AGREEMENTS WILL BE DIRECTLY ENFORCEABLE
AGAINST SUCH HOLDER IN ITS CAPACITY AS SUCH. NONE OF THE ISSUERS OR ANY OF THEIR
AFFILIATES WILL BE A PARTY TO, BOUND BY, OR A BENEFICIARY OF, ANY OF THE
PROVISIONS OF ANY SUCH AGREEMENTS, INCLUDING ANY INTERCREDITOR AGREEMENT, NOR
WILL THE PARTIES TO ANY SUCH AGREEMENTS HAVE ANY CONTRACTUAL RIGHT OF
ENFORCEMENT THEREUNDER AGAINST THE ISSUERS OR ANY GUARANTOR. COPIES OF ANY SUCH
AGREEMENTS WILL BE AVAILABLE FROM THE TRUSTEE UPON REQUEST.

                           The Issuers will furnish to any Holder upon written
request and without charge a copy of the Indenture, the Security Documents
and/or any applicable Registration Rights Agreement. Requests may be made to:

         Charter Communications Operating, LLC
         Charter Communications Operating Capital Corp.
         c/o Charter Communications, Inc.
         12405 Powerscourt Drive
         Suite 100
         St. Louis, Missouri 63131
         Attention: Secretary
         Telecopier No.: (314) 965-8793

                                     A-1-9


                                 ASSIGNMENT FORM

                  To assign this Note, fill in the form below:

(i) or (we) assign and transfer this Note to: __________________________________
                                                (Insert assignee's legal name)

________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
            (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________ to
transfer this Note on the books of the Issuers. The agent may substitute another
to act for him.

Date:________________________________

     Your Signature:____________________________________________________________
                    (Sign exactly as your name appears on the face of this Note)

     Signature Guarantee*:______________________________________________________

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                     A-1-10


                       OPTION OF HOLDER TO ELECT PURCHASE

                           If you want to elect to have this Note purchased by
the Issuers pursuant to Section 4.11 or 4.16 of the Indenture, check the
appropriate box below:

                  [ ] Section 4.11 [ ] Section 4.16

                           If you want to elect to have only part of the Note
purchased by the Issuers pursuant to Section 4.11 or Section 4.16 of the
Indenture, state the amount you elect to have purchased:

$ _______________________

Date:____________________

     Your Signature: ___________________________________________________________
                    (Sign exactly as your name appears on the face of this Note)

     Tax Identification No.:____________________________________________________

     Signature Guarantee*:______________________________________________________

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                     A-1-11


             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(5)

                           The following exchanges of a part of this Global Note
for an interest in another Global Note or for a Definitive Note, or exchanges of
a part of another Global Note or Definitive Note for an interest in this Global
Note, have been made:



               Amount of           Amount of      Principal Amount
              decrease in         increase in      of this Global
            Principal Amount   Principal Amount    Note following
 Date of     of this Global     of this Global      such decrease    Signature of authorized officer of
Exchange          Note               Note           (or increase)         Trustee or Note Custodian
- -------------------------------------------------------------------------------------------------------
                                                         



- ----------------
(5)      This schedule should be included only if the Notes are issued in global
         form.

                                     A-1-12


                                                                     EXHIBIT A-2

                                 [Face of Note]

                              CUSIP NO. [_________]

                    8-3/8% Senior Second Lien Notes due 2014

No.

                               $[________________]

                      CHARTER COMMUNICATIONS OPERATING, LLC

                                       and

                 CHARTER COMMUNICATIONS OPERATING CAPITAL CORP.

promise to pay to ____________________________________________________________,

or registered assigns,

the principal amount of _____________________________________________ Dollars

($______________________________) on April 30, 2014.

Interest Payment Dates: April 30 and October 30

Record Dates: April 15 and October 15

Subject to restrictions set forth in this Note.

                                     A-2-1


                           IN WITNESS WHEREOF, each of Charter Communications
Operating, LLC and Charter Communications Operating Capital Corp. has caused
this instrument to be duly executed.

Dated: [______________]

                                       CHARTER COMMUNICATIONS OPERATING, LLC

                                       By: _____________________________________
                                           Name:
                                           Title:

                                       By: _____________________________________
                                           Name:
                                           Title:

                                       CHARTER COMMUNICATIONS OPERATING
                                       CAPITAL CORP.

                                       By: _____________________________________
                                           Name:
                                           Title:

                                       By: _____________________________________
                                           Name:
                                           Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

WELLS FARGO BANK, N.A.,
as Trustee

By: __________________________________
    Authorized Signatory

                                     A-2-2


                                 [Back of Note]

                  8-3/8% Senior Second Lien Notes due 2014

                  "THE ISSUERS HAVE REQUESTED THE DEPOSITORY TRUST COMPANY NOT
                  TO TRANSFER ANY INTEREST IN THIS GLOBAL NOTE BY EFFECTING
                  BOOK-ENTRY DELIVERIES UNTIL JUNE 6, 2004."(6)

                  "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
                  INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
                  THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
                  TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
                  (i) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
                  REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (ii) THIS
                  GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
                  TO SECTION 2.06(a) OF THE INDENTURE, (iii) THIS GLOBAL NOTE
                  MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
                  SECTION 2.11 OF THE INDENTURE AND (iv) THIS GLOBAL NOTE MAY BE
                  TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
                  CONSENT OF THE ISSUERS."(7)

                  "THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
                  UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
                  AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
                  EXCEPT (a) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
                  IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
                  144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
                  OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
                  TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN
                  OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
                  REGULATION S UNDER THE SECURITIES ACT, (3) TO AN INSTITUTIONAL
                  ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
                  REGISTRATION REQUIREMENTS OF THE SECURITIES ACT SUBJECT TO THE
                  CERTIFICATION AND DELIVERY REQUIREMENTS OF THE INDENTURE
                  GOVERNING THE NOTES, (4) PURSUANT TO AN EXEMPTION FROM
                  REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
                  THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE
                  REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (b) IN
                  ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES
                  OF THE UNITED STATES."(8)

- ----------------
(6)      This paragraph should be included only for temporary Regulation S
         Global Notes.

(7)      This paragraph should be included only if the Notes are issued in
         global form.

(8)      This paragraph should be removed upon the exchange of Notes for
         Exchange Notes in an Exchange Offer or upon the registration of the
         Notes pursuant to the terms of a Registration Rights Agreement.

                                     A-2-3


                  Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.

                           1.       INTEREST. Charter Communications Operating,
LLC, a Delaware limited liability company (the "Company"), and Charter
Communications Operating Capital Corp., a Delaware corporation ("Capital Corp"
and, together with the Company, the "Issuers"), promise to pay interest on the
principal amount of this Note at the rate of 8-3/8% per annum from the Issue
Date until maturity. The Issuers will pay interest semi-annually in arrears on
April 30 and October 30 of each year (each an "Interest Payment Date"), or if
any such day is not a Business Day, on the next succeeding Business Day.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of issuance;
provided that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face and the
next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be October 30, 2004. The Issuers shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
that is 2% per annum in excess of the rate then in effect; they shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

                           2.       METHOD OF PAYMENT. The Issuers shall pay
interest on the Notes (except defaulted interest) to the Persons who are
registered Holders at the close of business on the April 15 or October 15 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium, if any, and interest at the office or
agency of the Issuers maintained for such purpose within or without the City and
State of New York, or, at the option of the Issuers, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium on
all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Issuers or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.

                           3.       PAYING AGENT AND REGISTRAR. Initially, Wells
Fargo Bank, N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

                           4.       INDENTURE. The Issuers issued the Notes
under an Indenture dated as of April 27, 2004 (the "Indenture") among the
Issuers and the Trustee. The Notes arise out of and are made in accordance with
the Indenture, including the terms stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb). The Holders are referred to the Indenture and
such Act for a complete statement of such terms.

                           5.       OPTIONAL REDEMPTION.

                           (a)      Except as set forth in clause (b) of this
Paragraph 5, the Issuers shall not have the option to redeem the Ten Year Notes
pursuant to this Paragraph 5 prior to April 30, 2009. Thereafter, the Issuers
shall have the option to redeem the Ten Year Notes, in whole or in part, upon
not

                                     A-2-4


less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest, if any, to the applicable redemption date, if redeemed during the
twelve-month period beginning on April 30 of the years indicated below:



        Year                                       Percentage
        ----                                       ----------
                                                
2009                                                104.188%
2010                                                102.792%
2011                                                101.396%
2012 and thereafter                                 100.000%


                           (b)      Notwithstanding the provisions of clause (a)
of this Paragraph 5, at any time prior to April 30, 2007, the Issuers may, on
any one or more occasions, redeem up to 35% of the original aggregate principal
amount of the Ten Year Notes (including the principal amount of any Additional
Ten Year Notes) issued under this Indenture on a pro rata basis (or nearly as
pro rata as practicable), at a redemption price of 108.375% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the redemption
date, with the net cash proceeds of one or more Equity Offerings; provided,
however, that:

                  (i)      at least 65% of the original aggregate principal
         amount of Ten Year Notes (including the principal amount of any
         Additional Ten Year Notes) issued under the Indenture remains
         outstanding immediately after the occurrence of such redemption
         (excluding Ten Year Notes held by the Company and its Subsidiaries);
         and

                  (ii)     the redemption must occur within 60 days of the date
         of the closing of such Equity Offering.

                           6.       MANDATORY REDEMPTION. Except as otherwise
provided in Paragraph 7 below, the Issuers shall not be required to make
mandatory redemption payments with respect to the Notes.

                           7.       REPURCHASE AT OPTION OF HOLDER.

                           (a)      If there is a Change of Control, the Issuers
shall make an offer (a "Change of Control Offer") to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest thereon, if any, to the date of purchase (the
"Change of Control Payment"). Within 10 days following any Change of Control,
the Issuers shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on the Change of Control Payment Date specified in such notice, pursuant
to the procedures required by the Indenture and described in such notice.

                           (b)      If the Company or a Restricted Subsidiary
thereof consummates any Asset Sale, when the aggregate amount of Excess Proceeds
exceeds $25.0 million, the Issuers shall commence an offer (an "Asset Sale
Offer") pursuant to Section 4.11 of the Indenture to all Holders and all holders
of other Indebtedness that is of equal priority with the Notes containing
provisions requiring offers to purchase or redeem with the proceeds of sales of
assets to purchase the maximum principal amount of Notes and such other
Indebtedness of equal priority that may be purchased out of the Excess Proceeds
(which amount includes the entire amount of the Net Proceeds). The offer price
in any Asset Sale Offer will be payable in cash and equal to 100% of principal
amount plus accrued and unpaid interest, if any, to the date of purchase. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, the

                                     A-2-5


Company may use such Excess Proceeds for any purpose not otherwise prohibited by
the Indenture. If the aggregate principal amount of Notes and such other
Indebtedness of equal priority tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such other
Indebtedness of equal priority to be purchased on a pro rata basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero. Holders that are the subject of an offer to purchase will receive
an Asset Sale Offer from the Issuers prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.

                           8.       DENOMINATIONS, TRANSFER, EXCHANGE. The Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Issuers may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Issuers need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Issuers need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.

                           9.       PERSONS DEEMED OWNERS. The registered Holder
may be treated as its owner for all purposes.

                           10.      AMENDMENT, SUPPLEMENT AND WAIVER. Subject to
certain exceptions, the Indenture, the Notes, the Note Guarantees or the
Security Documents may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or a tender offer or exchange offer for, Notes)
and, subject to Sections 6.04 and 6.07 of the Indenture, any existing Default or
compliance with any provision of the Indenture, the Notes (other than any
provision relating to the right of any Holder to bring suit for the enforcement
of any payment of principal, premium, if any, and interest on such Note, on or
after the scheduled due dates expressed in the Notes), the Note Guarantees or
the Security Documents may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes (including,
without limitation, consents obtained in connection with a purchase of, or a
tender offer or exchange offer for, Notes). Without the consent of any Holder,
the Issuers and the Trustee may amend or supplement the Indenture, the Notes,
the Note Guarantees or the Security Documents to cure any ambiguity, defect or
inconsistency; to provide for uncertificated Notes in addition to or in place of
certificated Notes; to provide for or confirm the issuance of Additional Notes;
to provide for the assumption of either Issuer's obligations to Holders in the
case of a merger or consolidation or sale of all or substantially all of the
assets of such Issuer pursuant to Article 5 of the Indenture; to make any change
that would provide any additional rights or benefits to the Holders or that does
not adversely affect the legal rights under the Indenture of any Holder; to, if
applicable, comply with requirements of the SEC in order to, if applicable,
effect or maintain the qualification of the Indenture under the TIA or otherwise
as necessary to comply with applicable law; to release Collateral or a
Guarantor, as permitted under the terms of the Indenture or the Security
Documents; to add any additional assets as Collateral; or to add a Guarantor.

                           11.      DEFAULTS AND REMEDIES. Each of the following
is an Event of Default: (i) default for 30 consecutive days in the payment when
due of interest on this series of Notes, (ii) default in payment when due of the
principal of or premium, if any, on this series of Notes, (iii) failure by the
Company or any of its Restricted Subsidiaries to comply with Sections 4.16 and
5.01 of the Indenture, (iv) failure by the Company or any of its Restricted
Subsidiaries for 30 consecutive days after written

                                     A-2-6


notice thereof has been given to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% of the aggregate principal amount
of the Notes outstanding to comply with any of its other covenants or agreements
in the Indenture, (v) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or
is created after the date of the Indenture, if that default: (a) is caused by a
failure to pay at final stated maturity the principal amount of such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default"); or (b) results
in the acceleration of such Indebtedness prior to its express maturity, and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$100 million or more, (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments which are non-appealable aggregating in
excess of $100 million (net of applicable insurance which has not been denied in
writing by the insurer), which judgments are not paid, discharged or stayed for
a period of 60 days, (vii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Significant Subsidiaries, (viii) any Note
Guarantee of any Guarantor that, taken together with all other such Guarantors,
would be a Significant Subsidiary ceases to be in full force and effect (other
than in accordance with the terms of the Indenture and such Note Guarantee) or
is declared null and void and unenforceable or found to be invalid or any
Guarantor denies its liability under its Note Guarantee with respect to any
series of Notes (other than by reason of release of a Guarantor from its Note
Guarantee in accordance with the terms of the Indenture and such Note
Guarantee), and (ix) so long as the Security Documents securing any series of
Notes have not otherwise been terminated in accordance with their terms or the
Collateral as a whole has not otherwise been released from the Lien of the
Security Documents securing any series of Notes in accordance with the terms
thereof, (a) any default by the Company or any Subsidiary in the performance of
its obligations under the Security Documents securing any series of Notes (after
the lapse of any applicable grace periods) or the Indenture which adversely
affects the enforceability, validity, perfection or priority of the Trustee's
Lien on the Collateral or which adversely affects the condition or value of the
Collateral, taken as a whole, in any material respect, (b) repudiation or
disaffirmation by the Company or any Subsidiary of its respective obligations
under the Security Documents securing any series of Notes and (c) the
determination in a judicial proceeding that the Security Documents securing such
series of Notes are unenforceable or invalid against the Company or any
Subsidiary for any reason. In the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company, all
outstanding Notes will become due and payable without further action or notice.
In the case of an Event of Default described in the foregoing clauses (i) and
(ii) as to this series of Notes, the Trustee or the holders of at least 25% in
aggregate principal amount of such series of Notes then outstanding may declare
such series of Notes due and payable immediately. If any other Event of Default
occurs and is continuing, the Trustee by notice to the Issuers or the Holders of
at least 25% in principal amount of the then outstanding Notes by notice to the
Issuers and the Trustee may declare all the Notes to be due and payable. Holders
may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal, premium, if any, or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
premium, if any, or the principal of, the Notes. The Issuers are required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture. Upon becoming aware of any Default or Event of Default, the Issuers
are required to deliver to the Trustee a statement specifying such Default or
Event of Default.

                                     A-2-7


                           12.      TRUSTEE DEALINGS WITH ISSUERS. The Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuers or any Affiliate of the Issuers with the
same rights it would have if it were not Trustee.

                           13.      NO RECOURSE AGAINST OTHERS. A director,
officer, employee, incorporator, manager, member or stockholder of either of the
Issuers, director, officer or employee incorporator or stockholder of CCI as
manager of the Issuers as such, shall not have any liability for any obligations
of the Issuers under the Notes or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.

                           14.      GOVERNING LAW. THE INTERNAL LAWS OF THE
STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE AND THE
INDENTURE WITHOUT GIVING EFFECT TO THE APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY. EACH OF THE PARTIES HERETO AND THE HOLDERS AGREE TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.

                           15.      AUTHENTICATION. This Note shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.

                           16.      ABBREVIATIONS. Customary abbreviations may
be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).

                           17.      ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED
GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided
to Holders under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in any
Registration Rights Agreement.

                           18.      CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Issuers have caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.

                           19.      REGISTRATION RIGHTS. PURSUANT TO A
REGISTRATION RIGHTS AGREEMENT, THE COMPANY AND THE GUARANTORS WILL BE OBLIGATED
UPON THE OCCURRENCE OF CERTAIN EVENTS TO CONSUMMATE AN EXCHANGE OFFER PURSUANT
TO WHICH THE HOLDER OF THIS NOTE SHALL HAVE THE RIGHT TO EXCHANGE THIS NOTE FOR
A 8-3/8% SENIOR SECOND LIEN NOTE DUE 2014 OF THE COMPANY WHICH HAS BEEN
REGISTERED UNDER THE SECURITIES ACT, IN LIKE PRINCIPAL AMOUNT AND HAVING TERMS
IDENTICAL IN ALL MATERIAL RESPECTS AS THIS NOTE. THE HOLDERS SHALL BE ENTITLED
TO RECEIVE CERTAIN ADDITIONAL INTEREST PAYMENTS IN THE EVENT SUCH EXCHANGE OFFER
IS NOT CONSUMMATED AND UPON CERTAIN

                                     A-2-8


OTHER CONDITIONS, ALL PURSUANT TO AND IN ACCORDANCE WITH THE TERMS OF SUCH
REGISTRATION RIGHTS AGREEMENT.(9)

                           20.      SECURITY. THE COMPANY HAS GRANTED, AND
CERTAIN OTHER ENTITIES MAY GRANT IN THE FUTURE, LIENS ON CERTAIN OF THEIR ASSETS
TO THE TRUSTEE PURSUANT TO THE SECURITY DOCUMENTS. THE LIENS ARE SUBJECT TO
RELEASE UNDER CERTAIN CONDITIONS DESCRIBED IN THE INDENTURE AND THE SECURITY
DOCUMENTS. THE COMPANY WILL EXECUTE AND COMPLY WITH, AND CAUSE EACH OF ITS
SUBSIDIARIES TO EXECUTE AND COMPLY WITH, THE TERMS OF EACH SECURITY DOCUMENT TO
WHICH SUCH PERSON IS, OR IS REQUIRED TO BE, A PARTY.

                           21.      OTHER REFERENCED AGREEMENTS. PURSUANT TO
SECTION 7.12 OF THE INDENTURE, THE TRUSTEE ON BEHALF OF EACH PRESENT AND FUTURE
HOLDER IS AUTHORIZED TO ENTER INTO CERTAIN AGREEMENTS, INCLUDING AN
INTERCREDITOR AGREEMENT WITH THE AGENT SPECIFIED THEREIN ON BEHALF OF AND FOR
THE BENEFIT OF THE HOLDERS OF PARI PASSU FIRST PRIORITY INDEBTEDNESS OF THE
ISSUERS AND THEIR SUBSIDIARIES, AND OTHER AGREEMENTS. EACH HOLDER IN SUCH
CAPACITY ACKNOWLEDGES AND AGREES, ALTHOUGH NONE OF THE ISSUERS OR ANY OF THEIR
AFFILIATES MAY BE A PARTY TO OR BOUND THEREBY, THAT SUCH HOLDER WILL BE BOUND BY
ANY SUCH AGREEMENTS, AND THAT ANY SUCH AGREEMENTS WILL BE DIRECTLY ENFORCEABLE
AGAINST SUCH HOLDER IN ITS CAPACITY AS SUCH. NONE OF THE ISSUERS OR ANY OF THEIR
AFFILIATES WILL BE A PARTY TO, BOUND BY, OR A BENEFICIARY OF, ANY OF THE
PROVISIONS OF ANY SUCH AGREEMENTS, INCLUDING ANY INTERCREDITOR AGREEMENT, NOR
WILL THE PARTIES TO ANY SUCH AGREEMENTS HAVE ANY CONTRACTUAL RIGHT OF
ENFORCEMENT THEREUNDER AGAINST THE ISSUERS OR ANY GUARANTOR. COPIES OF ANY SUCH
AGREEMENTS WILL BE AVAILABLE FROM THE TRUSTEE UPON REQUEST.

                           The Issuers will furnish to any Holder upon written
request and without charge a copy of the Indenture, the Security Documents
and/or any applicable Registration Rights Agreement. Requests may be made to:

         Charter Communications Operating, LLC
         Charter Communications Operating Capital Corp.
         c/o Charter Communications, Inc.
         12405 Powerscourt Drive
         Suite 100
         St. Louis, Missouri 63131
         Attention: Secretary
         Telecopier No.: (314) 965-8793

- ---------------
(9)      This paragraph should be included only if the Notes are entitled to the
         benefits of a Registration Rights Agreement.

                                     A-2-9


                                 ASSIGNMENT FORM

                  To assign this Note, fill in the form below:

(i) or (we) assign and transfer this Note to: __________________________________
                                               (Insert assignee's legal name)

________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
                 (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________ to
transfer this Note on the books of the Issuers. The agent may substitute another
to act for him.

Date:____________________

         Your Signature:________________________________________________________
                    (Sign exactly as your name appears on the face of this Note)

         Signature Guarantee*:__________________________________________________

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                     A-2-10


                       OPTION OF HOLDER TO ELECT PURCHASE

                           If you want to elect to have this Note purchased by
the Issuers pursuant to Section 4.11 or 4.16 of the Indenture, check the
appropriate box below:

                  [ ] Section 4.11 [ ] Section 4.16

                           If you want to elect to have only part of the Note
purchased by the Issuers pursuant to Section 4.11 or Section 4.16 of the
Indenture, state the amount you elect to have purchased:

$ _______________________

Date:____________________

          Your Signature:_______________________________________________________
                   (Sign exactly as your name appears on the face of this Note)

          Tax Identification No.:_______________________________________________

          Signature Guarantee*:_________________________________________________

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                     A-2-11


            SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(10)

                           The following exchanges of a part of this Global Note
for an interest in another Global Note or for a Definitive Note, or exchanges of
a part of another Global Note or Definitive Note for an interest in this Global
Note, have been made:



              Amount of           Amount of      Principal Amount
             decrease in         increase in      of this Global
           Principal Amount   Principal Amount    Note following
 Date of    of this Global     of this Global      such decrease    Signature of authorized officer of
Exchange         Note               Note           (or increase)         Trustee or Note Custodian
- ------------------------------------------------------------------------------------------------------
                                                        



- ---------------------
(10)   This schedule should be included only if the Notes are issued in global
       form.

                                     A-2-12


                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

Charter Communications Operating, LLC
Charter Communications Operating Capital Corp.
c/o Charter Communications, Inc.
12405 Powerscourt Drive, Suite 100
St. Louis, Missouri 63131
Wells Fargo Bank, N.A.

Corporate Trust Services
MAC N9303-120
Sixth Street and Marquette Avenue
Minneapolis, MN 55479
Telecopier No.: (612) 667-2160
Attention: Michael Lechner

                  Re:      8% Senior Second Lien Notes due 2012
                           8-3/8% Senior Second Lien Notes due 2014

                           Reference is hereby made to the Indenture, dated as
of April 27, 2004 (the "Indenture"), among Charter Communications Operating, LLC
(the "Company") and Charter Communications Operating Capital Corp. ("Capital
Corp" and, together with the Company, the "Issuers"), and Wells Fargo Bank,
N.A., as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.

                           ___________________ (the "Transferor") owns and
proposes to transfer the Note[s] or interest in such Note[s] specified in Annex
A hereto, in the principal amount of $_____________________________ in such
Note[s] or interests (the "Transfer"), to ___________________________ (the
"Transferee"), as further specified in Annex A hereto. In connection with the
Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

                  1.       Check if Transferee will take delivery of a
beneficial interest in the Rule 144A Global Note or a Definitive Note Pursuant
to Rule 144A. The Transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further certifies
that the beneficial interest or Definitive Note is being transferred to a Person
that the Transferor reasonably believed and believes is purchasing the
beneficial interest or Definitive Note for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Rule 144A
Global Note and/or the Definitive Note and in the Indenture and the Securities
Act.

                                      B-1


                  2.       Check if Transferee will take delivery of a
beneficial interest in the Regulation S Global Note or a Definitive Note
pursuant to Regulation S. The Transfer is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly,
the Transferor hereby further certifies that (i) the Transfer is not being made
to a person in the United States and (x) at the time the buy order was
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act and (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act. Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Note and/or the Definitive Note and in the Indenture and the Securities Act. If
the Transfer of the beneficial interest occurs prior to the expiration of the
40-day distribution compliance period set forth in Regulation S, the transferred
beneficial interest will be held immediately thereafter through Euroclear or
Clearstream.

                  3.       Check and complete if Transferee will take delivery
of a beneficial interest in a Definitive Note pursuant to any provision of the
Securities Act other than Rule 144A or Regulation S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):

         (a)      such Transfer is being effected pursuant to and in accordance
         with Rule 144 under the Securities Act; or

         (b)      such Transfer is being effected to the Company or a subsidiary
         thereof; or

         (c)      such Transfer is being effected pursuant to an effective
         registration statement under the Securities Act and in compliance with
         the prospectus delivery requirements of the Securities Act; or

         (d)      such Transfer is being effected to an Institutional Accredited
         Investor and pursuant to an exemption from the registration
         requirements of the Securities Act other than Rule 144A, Rule 144 or
         Rule 904, and the Transferor hereby further certifies that it has not
         engaged in any general solicitation within the meaning of Regulation D
         under the Securities Act and the Transfer complies with the transfer
         restrictions applicable to beneficial interests in a Restricted Global
         Note or Restricted Definitive Notes and the requirements of the
         exemption claimed, which certification is supported by (1) a
         certificate executed by the Transferee in the form of Exhibit D to the
         Indenture and (2) an Opinion of Counsel provided by the Transferor or
         the Transferee (a copy of which the Transferor has attached to this
         certification), to the effect that such Transfer is in compliance with
         the Securities Act. Upon consummation of the proposed transfer in
         accordance with the terms of the Indenture, the transferred beneficial
         interest or Definitive Note will be subject to the restrictions on
         transfer enumerated in the Private Placement Legend printed on the
         Restricted Global Note and/or the Definitive Notes and in the Indenture
         and the Securities Act.

                  4.       Check if Transferee will take delivery of a
beneficial interest in an Unrestricted Global Note or of an Unrestricted
Definitive Note.

                                      B-2


         (a)      Check if Transfer is pursuant to Rule 144. (i) The Transfer is
         being effected pursuant to and in accordance with Rule 144 under the
         Securities Act and in compliance with the transfer restrictions
         contained in the Indenture and any applicable blue sky securities laws
         of any state of the United States and (ii) the restrictions on transfer
         contained in the Indenture and the Private Placement Legend are not
         required in order to maintain compliance with the Securities Act. Upon
         consummation of the proposed Transfer in accordance with the terms of
         the Indenture, the transferred beneficial interest or Definitive Note
         will no longer be subject to the restrictions on transfer enumerated in
         the Private Placement Legend printed on the Restricted Global Notes, on
         Restricted Definitive Notes and in the Indenture.

         (b)      Check if Transfer is Pursuant to Regulation S. (i) The
         Transfer is being effected pursuant to and in accordance with Rule 903
         or Rule 904 under the Securities Act and in compliance with the
         transfer restrictions contained in the Indenture and any applicable
         blue sky securities laws of any state of the United States and (ii) the
         restrictions on transfer contained in the Indenture and the Private
         Placement Legend are not required in order to maintain compliance with
         the Securities Act. Upon consummation of the proposed Transfer in
         accordance with the terms of the Indenture, the transferred beneficial
         interest or Definitive Note will no longer be subject to the
         restrictions on transfer enumerated in the Private Placement Legend
         printed on the Restricted Global Notes, on Restricted Definitive Notes
         and in the Indenture.

         (c)      Check if Transfer is Pursuant to Other Exemption. (i) The
         Transfer is being effected pursuant to and in compliance with an
         exemption from the registration requirements of the Securities Act
         other than Rule 144, Rule 903 or Rule 904 and in compliance with the
         transfer restrictions contained in the Indenture and any applicable
         blue sky securities laws of any State of the United States and (ii) the
         restrictions on transfer contained in the Indenture and the Private
         Placement Legend are not required in order to maintain compliance with
         the Securities Act. Upon consummation of the proposed Transfer in
         accordance with the terms of the Indenture, the transferred beneficial
         interest or Definitive Note will not be subject to the restrictions on
         transfer enumerated in the Private Placement Legend printed on the
         Restricted Global Notes or Restricted Definitive Notes and in the
         Indenture.

                           This certificate and the statements contained herein
are made for your benefit and the

benefit of the Issuers.

_____________________________________________
              [Insert Name of Transferor]

By __________________________________________
   Name:
   Title:

Dated: ______________________________________

                                      B-3


                       ANNEX A TO CERTIFICATE OF TRANSFER

                  1.       The Transferor owns and proposes to transfer the

following:

                   [CHECK ONE OF (a) OR (b)]

                  (a)      a beneficial interest in the:

                           (i)      Rule 144A Global Note (CUSIP __________), or

                           (ii)     Regulation S Global Note (CUSIP _________),
                                    or

                  (b)      a Restricted Definitive Note.

                  2.       After the Transfer the Transferee will hold:

                  [CHECK ONE]

                  (a)      a beneficial interest in the:

                           (i)      Rule 144A Global Note (CUSIP __________), or

                           (ii)     Regulation S Global Note (CUSIP _________),
                                    or

                           (iii)    Unrestricted Global Note (CUSIP _________);
                                    or

                  (b)      a Restricted Definitive Note; or

                  (c)      an Unrestricted Definitive Note,

in accordance with the terms of the Indenture.

                                      B-4


                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

Charter Communications Operating, LLC
Charter Communications Operating Capital Corp.
c/o Charter Communications, Inc.
12405 Powerscourt Drive, Suite 100
St. Louis, Missouri 63131

Wells Fargo Bank, N.A.
Corporate Trust Services
MAC N9303-120
Sixth Street and Marquette Avenue
Minneapolis, MN 55479
Telecopier No.: (612) 667-2160
Attention: Michael Lechner

                  Re:      8% Senior Second Lien Notes due 2012
                           8-3/8% Senior Second Lien Notes due 2014

                           Reference is hereby made to the Indenture, dated as
of April 27, 2004 (the "Indenture"), among Charter Communications Operating, LLC
(the "Company") and Charter Communications Operating Capital Corp. ("Capital
Corp" and, together with the Company, the "Issuers"), and Wells Fargo Bank,
N.A., as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.

                           __________________________ (the "Owner") owns and
proposes to exchange the Note[s] or interest in such Note[s] specified herein,
in the principal amount of $____________________________ in such Note[s] or
interests (the "Exchange"). In connection with the Exchange, the Owner hereby
certifies that:

                           1.       Exchange of Restricted Definitive Notes or
Beneficial Interests in a Restricted Global Note for Unrestricted Definitive
Notes or Beneficial Interests in an Unrestricted Global Note.

         (a)      Check if Exchange is from beneficial interest in a Restricted
         Global Note to beneficial interest in an Unrestricted Global Note. In
         connection with the Exchange of the Owner's beneficial interest in a
         Restricted Global Note for a beneficial interest in an Unrestricted
         Global Note in an equal principal amount, the Owner hereby certifies
         (i) the beneficial interest is being acquired for the Owner's own
         account without transfer, (ii) such Exchange has been effected in
         compliance with the transfer restrictions applicable to the Global
         Notes and pursuant to and in accordance with the United States
         Securities Act of 1933, as amended (the "Securities Act"), (iii) the
         restrictions on transfer contained in the Indenture and the Private
         Placement Legend are not required in order to maintain compliance with
         the Securities Act and (iv) the beneficial interest in an Unrestricted
         Global Note is being acquired in compliance with any applicable blue
         sky securities laws of any state of the United States. If the Exchange
         is from beneficial interest in a Regulation S Global Note to beneficial
         interest in an Unrestricted Global Note, the Owner further certifies
         that it is either (x) a non-U.S. Person to whom Notes would be
         transferred in accordance with Regulation

                                      C-1


         S or (y) a U.S. Person who purchased Notes in a transaction that did
         not require registration under the Securities Act.

         (b)      Check if Exchange is from beneficial interest in a Restricted
         Global Note to Unrestricted Definitive Note. In connection with the
         Exchange of the Owner's beneficial interest in a Restricted Global Note
         for an Unrestricted Definitive Note, the Owner hereby certifies (i) the
         Definitive Note is being acquired for the Owner's own account without
         transfer, (ii) such Exchange has been effected in compliance with the
         transfer restrictions applicable to the Restricted Global Notes and
         pursuant to and in accordance with the Securities Act, (iii) the
         restrictions on transfer contained in the Indenture and the Private
         Placement Legend are not required in order to maintain compliance with
         the Securities Act and (iv) the Definitive Note is being acquired in
         compliance with any applicable blue sky securities laws of any state of
         the United States.

         (c)      Check if Exchange is from Restricted Definitive Note to
         beneficial interest in an Unrestricted Global Note. In connection with
         the Owner's Exchange of a Restricted Definitive Note for a beneficial
         interest in an Unrestricted Global Note, the Owner hereby certifies (i)
         the beneficial interest is being acquired for the Owner's own account
         without transfer, (ii) such Exchange has been effected in compliance
         with the transfer restrictions applicable to Restricted Definitive
         Notes and pursuant to and in accordance with the Securities Act, (iii)
         the restrictions on transfer contained in the Indenture and the Private
         Placement Legend are not required in order to maintain compliance with
         the Securities Act and (iv) the beneficial interest is being acquired
         in compliance with any applicable blue sky securities laws of any state
         of the United States. If the Exchange is from beneficial interest in a
         Regulation S Global Note to an Unrestricted Definitive Note, the Owner
         further certifies that it is either (x) a non-U.S. Person to whom Notes
         could be transferred in accordance with Regulation S or (y) a U.S.
         Person who purchased Notes in a transaction that did not require
         registration under the Securities Act.

         (d)      Check if Exchange is from Restricted Definitive Note to
         Unrestricted Definitive Note. In connection with the Owner's Exchange
         of a Restricted Definitive Note for an Unrestricted Definitive Note,
         the Owner hereby certifies (i) the Unrestricted Definitive Note is
         being acquired for the Owner's own account without transfer, (ii) such
         Exchange has been effected in compliance with the transfer restrictions
         applicable to Restricted Definitive Notes and pursuant to and in
         accordance with the Securities Act, (iii) the restrictions on transfer
         contained in the Indenture and the Private Placement Legend are not
         required in order to maintain compliance with the Securities Act and
         (iv) the Unrestricted Definitive Note is being acquired in compliance
         with any applicable blue sky securities laws of any state of the United
         States.

                           2.       Exchange of Restricted Definitive Notes or
         Beneficial Interests in Restricted Global Notes for Restricted
         Definitive Notes or Beneficial Interests in Restricted Global Notes.

                           (a)

         (a)      Check if Exchange is from beneficial interest in a Restricted
         Global Note to Restricted Definitive Note. In connection with the
         Exchange of the Owner's beneficial interest in a Restricted Global Note
         for a Restricted Definitive Note with an equal principal amount, the
         Owner hereby certifies that the Restricted Definitive Note is being
         acquired for the Owner's own account without transfer. If the Exchange
         is from beneficial interest in a Regulation S Global Note to a
         Restricted Definitive Note, the Owner further certifies that it is
         either (x) a non-U.S. Person to whom Notes could be transferred in
         accordance with Regulation S or (y) a U.S. Person who purchased Notes
         in a transaction that did not require registration under the Securities
         Act. Upon consummation of the proposed Exchange in accordance with the
         terms of the Indenture, the Restricted

                                      C-2


         Definitive Note issued will continue to be subject to the restrictions
         on transfer enumerated in the Private Placement Legend printed on the
         Restricted Definitive Note and in the Indenture and the Securities Act.

         (b)      Check if Exchange is from Restricted Definitive Note to
         beneficial interest in a Restricted Global Note. In connection with the
         Exchange of the Owner's Restricted Definitive Note for a beneficial
         interest in the [CHECK ONE] Rule 144A Global Note or Regulation S
         Global Note with an equal principal amount, the Owner hereby certifies
         (i) the beneficial interest is being acquired for the Owner's own
         account without transfer and (ii) such Exchange has been effected in
         compliance with the transfer restrictions applicable to the Restricted
         Global Notes and pursuant to and in accordance with the Securities Act,
         and in compliance with any applicable blue sky securities laws of any
         state of the United States. Upon consummation of the proposed Exchange
         in accordance with the terms of the Indenture, the beneficial interest
         issued will be subject to the restrictions on transfer enumerated in
         the Private Placement Legend printed on the relevant Restricted Global
         Note and in the Indenture and the Securities Act.

                                      C-3


                           This certificate and the statements contained herein
are made for your benefit and the benefit of the Issuers.

____________________________________________
           [Insert Name of Transferor]

By __________________________________________
   Name:
   Title:

Dated: _____________________________________

                                      C-4


                                                                       EXHIBIT D

                            FORM OF CERTIFICATE FROM

                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

Charter Communications Operating, LLC
Charter Communications Operating Capital Corp.
c/o Charter Communications, Inc.
12405 Powerscourt Drive, Suite 100
St. Louis, Missouri 63131

Wells Fargo Bank, N.A.
Corporate Trust Services
MAC N9303-120
Sixth Street and Marquette Avenue
Minneapolis, MN 55479
Telecopier No.: (612) 667-2160
Attention: Michael Lechner

                  Re:      8% Senior Second Lien Notes due 2012
                           8-3/8% Senior Second Lien Notes due 2014

                           Reference is hereby made to the Indenture, dated as
of April 27, 2004 (the "Indenture"), among Charter Communications Operating, LLC
(the "Company") and Charter Communications Operating Capital Corp. ("Capital
Corp" and, together with the Company, the "Issuers"), and Wells Fargo Bank,
N.A., as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.

                           In connection with our proposed purchase of
$____________ aggregate principal amount of:

                  (i)      [ ]    a beneficial interest in a Global Note, or

                  (ii)     [ ]    a Definitive Note,

we confirm that:

                           1.       We understand that any subsequent transfer
of the Notes or any interest therein is subject to certain restrictions and
conditions set forth in the Indenture and the undersigned agrees to be bound by,
and not to resell, pledge or otherwise transfer the Notes or any interest
therein except in compliance with, such restrictions and conditions and the
United States Securities Act of 1933, as amended (the "Securities Act").

                           2.       We understand that the offer and sale of the
Notes have not been registered under the Securities Act, and that the Notes and
any interest therein may not be offered or sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any accounts
for which we are acting as hereinafter stated, that if we should sell the Notes
or any interest therein, we will do so only (a) to the Company or any subsidiary
thereof, (b) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (c) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S.

                                      D-1


broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter and an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (d) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (e) pursuant to the provisions of Rule
144(k) under the Securities Act or (f) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the requirements of clauses (a) through (e) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.

                           3.       We understand that, on any proposed resale
of the Notes or beneficial interest therein, we will be required to furnish to
you and the Issuers such certifications, legal opinions and other information as
you and the Issuers may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.

                           4.       We are an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.

                           5.       We are acquiring the Notes or beneficial
interest therein purchased by us for our own account or for one or more accounts
(each of which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.

                           You and the Issuers are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.

____________________________________________
         [Insert Name of Transferor]

By __________________________________________
   Name:
   Title:

Dated: ______________________________________

                                      D-2


                                                                       EXHIBIT E

                             FORM OF NOTE GUARANTEE

                           For value received, the undersigned hereby
unconditionally guarantees, on a senior basis jointly and severally with each
other guarantor, to the Holder of this Note the cash payments in United States
dollars of principal of, premium, if any, and interest on this Note (and
including Special Interest payable thereon) in the amounts and at the times when
due and interest on the overdue principal, premium, if any, and interest, if
any, of this Note, if lawful, and the payment or performance of all other
Obligations of the Company under the Indenture or this Note, to the Holder of
this Note and the Trustee, in accordance with the Note, Article 11 of the
Indenture and this Note Guarantee, including the terms stated in the Note, the
Indenture and this Note Guarantee. The validity and enforceability of this Note
Guarantee shall not be affected by the fact that it is not affixed to any
particular Note. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Indenture dated as of April 27, 2004 among
Charter Communications Operating, LLC, a Delaware limited liability company,
Charter Communications Operating Capital Corp., a Delaware corporation, and
Wells Fargo Bank, N.A., as trustee (as amended or supplemented, the
"Indenture").

                           THIS NOTE GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Each Guarantor hereby agrees to submit to the jurisdiction of the courts of the
State of New York in any action or proceeding arising out of or relating to this
Note Guarantee.

                           This Note Guarantee is subject to release upon the
terms set forth in the Indenture.

                                    [GUARANTOR]

                                    By: ________________________________________
                                        Name:
                                        Title:

                                      E-1


                                                                       EXHIBIT F

                           FORM OF SECURITY AGREEMENT

                                      F-1


                                                                       EXHIBIT G

                         FORM OF SUPPLEMENTAL INDENTURE

       SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of

_________________________ .

                  WHEREAS Charter Communications Operating, LLC (the "Company"),
Charter Communications Operating Capital Corp. ("Capital Corp") and Wells Fargo
Bank, N.A., as trustee, are parties to an Indenture (as it may be amended from
time to time, the "Indenture"), dated as of April 27, 2004, relating to the
Company's 8% Senior Second Lien Notes due 2012 (the "Eight Year Notes") and
8-3/8% Senior Second Lien Notes due 2014 (the "Ten Year Notes" and, together
with the Eight Year Notes, the "Notes");

                  WHEREAS Section 4.17 of the Indenture requires the Company to
cause CCO Holdings, LLC, a Delaware limited liability company ("CCOH"), and each
Subsidiary of the Company that, directly or indirectly, Guarantees or pledges
any assets to secure the payment, or otherwise becomes an obligor with respect
to, any Indebtedness under clause (1) of the second paragraph of Section 4.10 of
the Indenture to execute and deliver to the Trustee a supplemental indenture
pursuant to which CCOH or such Subsidiary, as the case may be, shall
unconditionally guarantee all of the Company's obligations under the Indenture
and the Notes.

                  NOW, THEREFORE, for good and valuable consideration, the
receipt of which is acknowledged, the undersigned hereby agrees to guarantee the
Company's obligations under the Notes on the terms and subject to the conditions
set forth in Article 11 of the Indenture. From and after the date hereof, the
undersigned shall be a Guarantor for all purposes under the Indenture and the
Notes.

                                      F-1


                  IN WITNESS WHEREOF, the undersigned has caused this
Supplemental Indenture to be duly executed as of the date first above written.

                                   [GUARANTOR]

                                   By: _________________________________________
                                       Name:
                                       Title:

                                   CHARTER COMMUNICATIONS OPERATING,
                                   LLC, as an Issuer

                                   By: _________________________________________
                                       Name:
                                       Title: Vice President

                                   CHARTER COMMUNICATIONS OPERATING
                                   CAPITAL CORP., as an Issuer

                                   By: _________________________________________
                                       Name:
                                       Title: Executive Vice President

                                   WELLS FARGO BANK, N.A.,
                                   as Trustee

                                   By: _________________________________________
                                       Name:
                                       Title:

                                       F-2


                                                                       EXHIBIT H

               FORM OF EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                                       F-1

EX-10.33

                                                               EXECUTION VERSION

                                                                   EXHIBIT 10.33

                                 $1,500,000,000

                      CHARTER COMMUNICATIONS OPERATING, LLC

                 CHARTER COMMUNICATIONS OPERATING CAPITAL CORP.

                                 $1,100,000,000
                      8% SENIOR SECOND LIEN NOTES DUE 2012

                                  $400,000,000
                    8-3/8% SENIOR SECOND LIEN NOTES DUE 2014

                               PURCHASE AGREEMENT

                              Dated April 20, 2004



                                                                  April 20, 2004

J.P. Morgan Securities Inc.
Banc of America Securities LLC
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
        c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017

Ladies and Gentlemen:

            Charter Communications Operating, LLC, a Delaware limited liability
company (the "Company"), and Charter Communications Operating Capital Corp., a
Delaware corporation ("CCO Capital" and, together with the Company, the
"Issuers"), propose, subject to the terms and conditions stated herein, to issue
and sell to the purchasers named in Schedule I hereto (the "Purchasers") an
aggregate of $1,100,000,000 principal amount of 8% Senior Second Lien Notes due
2012 (the "Eight Year Notes") and (ii) an aggregate of $400,000,000 principal
amount of 8-3/8% Senior Second Lien Notes due 2014 (the "Ten Year Notes" and,
together with the Eight Year Notes, the "Notes"). The Notes will be issued
pursuant to an Indenture to be dated as of April 27, 2004 (the "Indenture")
among the Issuers and Wells Fargo Bank, N.A., as trustee (the "Trustee").

            In connection with the sale of the Notes, the Issuers have prepared
an offering memorandum, dated April 20, 2004 (the "Offering Memorandum"). The
Offering Memorandum sets forth certain information concerning the Issuers and
their subsidiaries and the Notes. The Issuers hereby confirm that they have
authorized the use of the Offering Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Notes by the Purchasers.

            Pursuant to the Security Documents (as defined in the Offering
Memorandum), the Notes will be secured by a second priority lien on the
Collateral (as defined in the Offering Memorandum), subject to certain
exceptions and otherwise in accordance with the terms of the Indenture and the
Security Documents. The Notes will have the benefit of certain collateral
security as provided in the Security Documents.

            The Notes are being issued in connection with the refinancing of
four existing credit facilities of the Company, CC VI Operating Company LLC,
Falcon Cable Communications, LLC and CC VIII Operating Company, LLC. The Company
and CCO Holdings, LLC will enter into an Amended and Restated Credit Agreement,
to be dated as of April 27, 2004, by and among the Company, CCO Holdings, LLC,
the lenders from time to time parties thereto, JPMorgan Chase Bank, as
Administrative Agent, JPMorgan Chase Bank, Bank of America, N.A., Citigroup
North America, Inc. and Credit Suisse First



Boston, acting through its Cayman Islands Branch, as Syndication Agents, and
General Electric Capital Corporation, Credit Lyonnais New York Branch and
Deutsche Bank AG, as Documentation Agents, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time
(the "Credit Facility"). This Agreement, the Notes, the Indenture, the Security
Documents and the agreements and instruments to which the Company of any of its
subsidiaries is a signatory relating to the Credit Facility collectively are
referred to herein as the "Transaction Documents."

            1.    Representations and Warranties of the Issuers. Each of the
Issuers represent and warrant to, and agree with, each of the Purchasers that:

            (a)   The Offering Memorandum and any amendments or supplements
thereto does not and will not, as of their respective dates, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information relating to the Purchasers furnished in
writing to the Issuers by or on behalf of a Purchaser through J.P. Morgan
Securities Inc. expressly for use therein;

            (b)   None of the Issuers or any of their subsidiaries has sustained
since the date of the latest audited financial statements included in the
Offering Memorandum any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Offering Memorandum; and, since the respective
dates as of which information is given in the Offering Memorandum, there has not
been any change in the capital stock or limited liability company interests or
long-term debt of the Issuers or any of their subsidiaries or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial position,
members' or stockholders' equity or results of operations of Charter
Communications, Inc. ("CCI"), Charter Communications Holding Company, LLC ("CCH
LLC"), Charter Communications Holdings, LLC ("Holdings"), CCH I, LLC, CCH II,
LLC and CCO Holdings, LLC ("CCOH" and, collectively with CCI, CCH LLC, Holdings,
CCH I, LLC and CCH II LLC the "Parent Companies"), the Issuers and each of the
Issuers' subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Offering Memorandum;

            (c)   Each of the Issuers and its subsidiaries has good and
marketable title to all real property and good and valid title to all personal
property owned by it reflected as owned in the financial statements included in
the Offering Memorandum, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Offering Memorandum or except
such as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Issuers and
their subsidiaries; and any real property and buildings held under lease by the
Issuers and their subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Issuers and their subsidiaries;

            (d)   The Company has been duly formed and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware, and CCO Capital has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware; each of
the Issuers has power and authority to own its properties and conduct its
business as described in the Offering Memorandum and to execute, deliver and
perform its obligations under this Agreement, and has been duly qualified as a
foreign corporation or limited liability company, as the case may be, for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification; and is not

                                      -2-



subject to liability or disability by reason of the failure to be so qualified
in any such jurisdiction, except such as would not, individually or in the
aggregate, have a material adverse effect on the current or future financial
position, members' or stockholders' equity or results of operations of the
Parent Companies, the Issuers and the Issuers' subsidiaries, taken as a whole (a
"Material Adverse Effect"); each Parent Company and each of the Issuers'
subsidiaries has been duly incorporated or formed, as the case may be, and is
validly existing as a corporation, partnership or limited liability company, as
the case may be, in good standing under the laws of its jurisdiction of
incorporation or formation, in each case except such as would, individually or
in the aggregate, not result in a Material Adverse Effect. CCO Capital has no
subsidiaries;

            (e)   All the outstanding ownership interests of the Issuers have
been duly and validly authorized and issued and are fully paid and
non-assessable; and all the outstanding capital stock, limited liability company
interests or partnership interests, as the case may be, of CCO Capital and each
"significant subsidiary" (as such term is defined in Rule 1-02 of Regulation
S-X) of the Company (each a "Significant Subsidiary") of the Company have been
duly and validly authorized and issued, are fully paid and nonassessable and
(except as otherwise set forth in the Offering Memorandum) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims;

            (f)   This Agreement has been duly authorized and executed by each
of the Issuers;

            (g)   The Notes have been duly authorized and, when executed by the
Issuers and authenticated by the Trustee in accordance with the provisions of
the Indenture and when delivered to, and paid for, by the Purchasers in
accordance with the terms of this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Issuers entitled to the benefits provided by the
Indenture under which they are to be issued and enforceable against the Issuers
in accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;

            (h)   The Indenture has been duly authorized, and when executed and
delivered by the Issuers (assuming the due execution and delivery thereof by the
Trustee), will constitute a valid and legally binding instrument, enforceable
against the Issuers in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles; the
Indenture meets the requirements for qualification under the United States Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"); and the Indenture
conforms in all. material respects to the descriptions thereof in the Offering
Memorandum;

            (i)   Each Security Document has been duly authorized by each Issuer
party thereto and, when duly executed and delivered by the Issuers (assuming the
due authorization, execution and delivery thereof by the Trustee (as defined in
the Offering Memorandum)), will constitute a valid and legally binding
obligation of each such Issuer in accordance with its terms, enforceable against
it in accordance with its terms except that (i) the enforcement thereof may be
subject, to (A) bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and (B) general
principles of equity, and (ii) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public policy
considerations;

            (j)   The Collateral Agreement, made by the Company in favor of the
Trustee, to be dated as of April 27, 2004 (the "Collateral Agreement"), once
executed and delivered, will create, in favor of the Trustee for the benefit of
the Trustee and the holders of the Notes, a valid and enforceable, and upon the
filing or recording of the appropriate financing statements and similar
instruments with the appropriate governmental authorities (and the payment of
the appropriate filing fees and any applicable

                                      -3-



taxes) and the delivery of the applicable documents to the Trustee in accordance
with the provisions of the Collateral Agreement, a perfected security interest
in all Collateral, superior to and prior to the Liens (as defined in the
Offering Memorandum) of all third persons other than Liens not prohibited by the
Indenture;

            (k)   Each other Transaction Document to which either of the Issuers
is, or is to be, a party has been duly authorized, executed and delivered by
each Issuer a party thereto in accordance with its terms and, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
constitutes the legal, valid and binding obligation of each such Issuer,
enforceable against each such Issuer in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles, whether arising in a court of equity or law;

            (l)   None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the
Notes) will violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any regulation
promulgated thereunder, including, without limitation, Regulations T, U, and X
of the Board of Governors of the Federal Reserve System;

            (m)   Prior to the date hereof, none of the Issuers or any of their
affiliates has taken any action which is designed to or which has constituted or
which might have been expected to cause or result in stabilization or
manipulation of the price of any security of the Issuers in connection with the
offering of the Notes.

            (n)   The issue and sale of the Notes and the compliance by the
Issuers with all provisions of each of the Transaction Documents, including
those described under the caption "Description of the Notes" and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement, lease, license, franchise agreement, permit or other
agreement or instrument to which the Issuers, the Parent Companies or any of the
Issuers' subsidiaries is a party or by which the Issuers, the Parent Companies
or any of the Issuers' subsidiaries is bound or to which any of the property or
assets of the Issuers, the Parent Companies or any of the Issuers' subsidiaries
is subject, nor will such action result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Issuers, the Parent Companies or any of the Issuers'
subsidiaries or any of their properties, including, without limitation, the
Communications Act of 1934, as amended, the Cable Communications Policy Act of
1984, as amended, the Cable Television Consumer Protection and Competition Act
of 1992, as amended, and the Telecommunications Act of 1996 (collectively, the
"Cable Acts") or any order, rule or regulation of the Federal Communications
Commission (the "FCC"), except where such conflicts, breaches, violations or
defaults would not, individually or in the aggregate, have a Material Adverse
Effect and would not have the effect of preventing the Issuers from performing
any of their respective obligations under this Agreement or any of the other
Transaction Documents to which they are, or are to be, a party; nor will such
action result in any violation of the certificate of formation or limited
liability company agreement of the Company or the certificate of incorporation
or bylaws of CCO Capital; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required, including, without limitation, under the Cable Acts or any
order, rule or regulation of the FCC, for the issue and sale of the Notes or the
consummation by the Issuers of the transactions contemplated in this paragraph
(n), except such consents, approvals, authorizations, registrations or
qualifications as have been made or except as may be required under state or
foreign securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Purchasers and except such as may be required
by the National Association of Securities Dealers, Inc. (the "NASD");

                                      -4-



            (o)   None of the Issuers, the Parent Companies or any of the
Issuers' subsidiaries is (i) in violation of its certificate of incorporation,
bylaws, certificate of formation, limited liability company agreement,
partnership agreement or other organizational document, as the case may be, (ii)
in default in the performance or observance of-any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease, license, permit or other agreement or instrument to which it
is a party or by which it or any of its properties may be bound or (iii) in
violation of the terms of any franchise agreement, or any law, statute, rule or
regulation or any judgment, decree or order, in any such case, of any court or
governmental or regulatory agency or other body having jurisdiction over the
Issuers, the Parent Companies or any of the Issuers' subsidiaries or any of
their properties or assets, including, without limitation, the Cable Acts or any
order, rule or regulation of the FCC, except, in the case of clauses (ii) and
(iii), such as would not, individually or in the aggregate, have a Material
Adverse Effect;

            (p)   The statements set forth in the Offering Memorandum under the
captions "Description of the Notes," insofar as it purports to constitute a
summary of the terms of the Notes and under the captions "Risk factors,"
"Business," "Regulation and legislation," "Management," "Certain relationships
and related party transactions," "Description of certain indebtedness" and
"Important United States federal income tax considerations for non-U.S. holders"
insofar as they purport to describe the provisions of the laws, documents and
arrangements referred to therein, are accurate in all material respects;

            (q)   Other than as set forth in the Offering Memorandum, there are
no legal or governmental proceedings (including, without limitation, by the FCC
or any franchising authority) pending to which the Issuers, the Parent Companies
or any of the Issuers' subsidiaries is a party or of which any property of the
Issuers, the Parent Companies or any of the Issuers' subsidiaries is the subject
which, if determined adversely with respect to the Issuers, any of the Parent
Companies or any of the Issuers' subsidiaries, would, individually or in the
aggregate, have a Material Adverse Effect; and, to the best knowledge of the
Issuers and, except as disclosed in the Offering Memorandum, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others;

            (r)   Each of the Issuers, the Parent Companies and the Issuers'
subsidiaries carries insurance (including, without limitation, self-insurance)
in such amounts and covering such risks as in the reasonable determination of
the Issuers is adequate for the conduct of its business and the value of its
properties;

            (s)   Except as set forth in the Offering Memorandum, there is no
strike, labor dispute, slowdown or work stoppage with the employees of any of
the Issuers or their subsidiaries which is pending or, to the best knowledge of
the Issuers, threatened which would, individually or in the aggregate, have a
Material Adverse Effect;

            (t)   When the Notes are issued and delivered pursuant to this
Agreement, the Notes will not be of the same class (within the meaning of Rule
144A under the Securities Act of 1933, as amended, (the "Act")) as securities
which are listed on a national securities exchange registered under Section 6 of
the Exchange Act or quoted in a U.S. automated inter-dealer quotation system;

            (u)   Neither Issuer is, or after giving effect to the offering and
sale of the Notes will be, an "investment company" or any entity "controlled" by
an "investment company" as such terms are defined in the U.S. Investment Company
Act of 1940, as amended (the "Investment Company Act");

            (v)   None of the Issuers or any of their affiliates, nor any person
authorized to act on their behalf (other than the Purchasers, as to whom the
Issuers make no representations) has, directly or

                                      -5-



indirectly, made offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of the Notes
under the Act;

            (w)   None of the Issuers or any of the Parent Companies or the
Issuers' subsidiaries, or any person authorized to act on their behalf (other
than the Purchasers, as to whom the Issuers make no representation) has offered
or sold, the Notes by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Act or, with respect to Notes sold
outside the United States to non-U.S. persons (as defined in Rule 902 under the
Act), by means of any directed selling efforts within the meaning of Rule 902
under the Act and the Issuers, any affiliate of the Issuers and any person
authorized to act on their behalf (other than the Purchasers, as to whom the
Issuers make no representation) has complied with and will implement the
offering restriction within the meaning of such Rule 902;

            (x)   Within the preceding six months, none of the Issuers or any
other person authorized to act on their behalf (other than the Purchasers, as to
whom the Issuers make no representation) has offered or sold to any person any
Notes, or any securities of the same or a similar class as the Notes, other than
Notes offered or sold to the Purchasers hereunder. The Issuers will take
reasonable precautions designed to ensure that any offer or sale, direct or
indirect, in the United States or to any U.S. person (as defined in Rule 902
under the Act) of any Notes or any substantially similar security issued by the
Issuers, within six months subsequent to the date on which the distribution of
the Notes has been completed (as notified to the Issuers by J.P. Morgan
Securities Inc.), is made under restrictions and other circumstances reasonably
designed not to affect the status of the offer and sale of the Notes in the
United States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Act;

            (y)   The consolidated financial statements (including the notes
thereto) included in the Offering Memorandum present fairly in all material
respects the respective consolidated financial positions, results of operations
and cash flows of the entities to which they relate at the dates and for the
periods to which they relate and have been prepared in accordance with U.S.
generally accepted accounting principles ("GAAP") applied on a consistent basis
(except as otherwise noted therein). The selected historical financial data in
the Offering Memorandum present fairly in all material respects the information
shown therein and, except with respect to the selected historical financial data
for the calendar year ended December 31, 1999 (which has not been restated),
have been prepared and compiled on a basis consistent with the audited financial
statements included therein;

            (z)   The pro forma financial information included in the Offering
Memorandum (i) complies as to form in all material respects with the applicable
requirements of Regulation S-X for Form S-1 promulgated under the Exchange Act,
and (ii) has been properly computed on the bases described therein; the
assumptions used in the preparation of the pro forma financial information
included in the Offering Memorandum are reasonable and the adjustments used
therein are appropriate to give effect to the transactions or circumstances
referred to therein;

            (aa)  KPMG LLP, who has certified the financial statements included
in the Offering Memorandum, is a firm of independent public accountants as
required by the Act and the rules and regulations of the Securities and Exchange
Commission (the "Commission") thereunder, based upon representations by such
firm to us;

            (bb)  The Issuers, the Parent Companies and the Issuers'
subsidiaries own or possess, or can acquire on reasonable terms, adequate
licenses, trademarks, service marks, trade names and copyrights (collectively,
"Intellectual Property") necessary to conduct the business now or proposed to be
operated by each of them as described in the Offering Memorandum, except where
the failure to own, possess or have the ability to acquire any Intellectual
Property would not, individually or in the aggregate,

                                      -6-



have a Material Adverse Effect; and none of the Issuers or any of the Parent
Companies or the Issuers' subsidiaries has received any notice of infringement
of or conflict with (and none actually knows of any such infringement of or
conflict with) asserted rights of others with respect to any Intellectual
Property which, if any such assertion of infringement or conflict were sustained
would, individually or in the aggregate, have a Material Adverse Effect;

            (cc)  Except as described in the Offering Memorandum, the Issuers,
the Parent Companies and the Issuers' subsidiaries have obtained all consents,
approvals, orders, certificates, licenses, permits, franchises and other
authorizations of and from, and have made all declarations and filings with, all
governmental and regulatory authorities (including, without limitation, the
FCC), all self-regulatory organizations and all courts and other tribunals
legally necessary to own, lease, license and use their respective properties and
assets and to conduct their respective businesses in the manner described in the
Offering Memorandum, except to the extent that the failure to so obtain or file
would not, individually or in the aggregate, have a Material Adverse Effect;

            (dd)  The Issuers, the Parent Companies and the Issuers'
subsidiaries have filed all necessary federal, state and foreign income and
franchise tax returns required to be filed as of the date hereof, except where
the failure to so file such returns would not, individually or in the aggregate,
have a Material Adverse Effect, and have paid all taxes shown as due thereon;
and there is no tax deficiency that has been asserted against the Issuers or any
of their subsidiaries (other than those which the amount or validity thereof are
currently being challenged in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the relevant entity) that could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect;

            (ee)  The Issuers, the Parent Companies and the Issuers'
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;

            (ff)  Except as described in the Offering Memorandum: (i) each of
the franchises held by, or necessary for any operations of, the Issuers and
their subsidiaries that are material to the Issuers and their subsidiaries,
taken as a whole, is in full force and effect, with no material restrictions or
qualifications; (ii) to the best knowledge of the Issuers, no event has occurred
which permits, or with notice or lapse of time or both .would permit, the
revocation or non-renewal of any such franchises, assuming the filing of timely
renewal applications and the timely payment of all applicable filing and
regulatory fees to the applicable franchising authority, or which would be
reasonably likely to result, individually or in the aggregate, in any other
material impairment of the rights of the Issuers and the Issuers' subsidiaries
in such franchises; and (iii) the Issuers have no reason to believe that any
franchise that is material to the operation of the Issuers and their
subsidiaries will not be renewed;

            (gg)  Each of the programming agreements entered into by, or
necessary for any operations of, the Issuers, their Parent Companies or their
subsidiaries that are material to the Issuers and their subsidiaries, taken as a
whole, is in full force and effect (or in any cases where the Issuers or their
subsidiaries and any suppliers of content are operating in the absence of an
agreement, such content providers and the Issuers and their subsidiaries provide
and receive service in accordance with terms that have been agreed to or
consistently acknowledged or accepted by both parties, including, without
limitation, situations in which providers or suppliers of content accept regular
payment for the provision of such content);

                                      -7-



and to the best knowledge of the Issuers, no event has occurred (or with notice
of lapse of time or both would occur) which would be reasonably likely to result
in the early termination or non-renewal of any such programming agreements and
which would, individually or in the aggregate, result in a Material Adverse
Effect; no amendments or other changes to such programming agreements, other
than amendments relating to intra-company transfers, extensions of termination
dates or pricing adjustments, together with other changes that are not in the
aggregate material, have been made to the copies of the programming agreements
provided for the review of the Purchasers or their representatives;

            (hh)  The Issuers, the Parent Companies and the Issuers'
subsidiaries (i) are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of `them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to. comply with
the terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, have a Material Adverse Effect;

            (ii)  Immediately after the consummation of this offering (including
after giving effect to the execution, delivery and performance of this Agreement
and the Indenture and the issuance and sale of the Notes), (i) the fair market
value of the assets of each of Holdings, CCH I, LLC, CCH II, LLC, CCOH and the
Company, each on a consolidated basis with its subsidiaries, exceeds and will
exceed its liabilities, on a consolidated basis with its subsidiaries; (ii) the
present fair saleable value of the assets of each of Holdings, CCH I, LLC, CCH
II, LLC, CCOH and the Company, each on a consolidated basis with its
subsidiaries, exceeds and will exceed its liabilities, on a consolidated basis
with its subsidiaries; (iii) each of Holdings, CCH I, LLC, CCH II, LLC, CCOH and
the Company, each on a consolidated basis with its subsidiaries, is and will be
able to pay its debts, on a consolidated basis with its subsidiaries, as such
debts respectively mature or otherwise become absolute or due; and (iv) each of
Holdings, CCH I, LLC, CCH II, LLC, CCOH and the Company, on a consolidated basis
with its subsidiaries, does not have and will not have unreasonably small
capital with which to conduct its respective operations;

            (jj)  The Issuers and their Parent Companies each maintain a system
of disclosure controls and procedures to ensure that material information
relating to the Issuers and their Parent Companies, including their consolidated
subsidiaries, is made known to each of them by others within those entities,
particularly during the period in which the periodic reports are being prepared;

            (kk)  There is, and has been, no failure on the part of the Issuers,
the Parent Companies or the Issuers' subsidiaries, or any of their directors or
officers, in their capacities as such, to comply with any provision of the
Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith, including, without limitation, Section 402 related to
loans and Sections 302 and 906 related to certifications;

            (ll)  The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources that the Issuers
believe to be reliable and accurate; and

            (mm)  Each of the relationships and transactions specified in Item
404 of Regulation S-K that would have been required to be described in a
prospectus if this offering had been registered under the Act have been so
described in the Offering Memorandum (exclusive of any amendment or supplement
thereto).

                                      -8-



            2.    Purchase and Sale. (a) Subject to the terms and conditions
herein set forth, the Issuers agree to issue and sell to each of the Purchasers,
and each of the Purchasers agrees, severally and not jointly, to purchase from
the Issuers the principal amount of the Eight Year Notes set forth opposite the
name of such Purchaser in Schedule I hereto, at an aggregate purchase price of
$1,079,375,000 (representing 98.125% of the gross proceeds thereof).

            (b)   Subject to the terms and conditions herein set forth, the
Issuers agree to issue and sell to each of the Purchasers, and each of the
Purchasers agrees, severally and not jointly, to purchase from the Issuers the
principal amount of the Ten Year Notes set forth opposite the name of such
Purchaser in Schedule I hereto, at an aggregate purchase price of $392,500,000
(representing 98.125% of the gross proceeds thereof).

            3.    Representations, Warranties and Covenants of the Purchasers.
Upon the authorization by you of the release of the Notes, the several
Purchasers propose to offer the Notes for sale upon the terms and conditions set
forth in this Agreement and the Offering Memorandum and each Purchaser,
severally and not jointly, hereby represents and warrants to, and agrees with
the Issuers that:

            (a)   It will offer and sell the Notes only: (i) to persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A or (ii) upon the terms and conditions set forth in Annex I to this
Agreement;

            (b)   It is an institutional "accredited investor" within the
meaning of Regulation D under the Act; and

            (c)   It has not offered and will not offer or sell the Notes by any
form of general solicitation or general advertising, including, without
limitation, the methods described in Rule 502(c) under the Act.

            4.    Delivery and Payment.

            (a)   The Notes to be purchased by each Purchaser hereunder will be
represented by definitive global Notes in book-entry form which will be
deposited by or on behalf of the Issuers with The Depository Trust Company
("DTC") or its designated custodian. The Issuers will deliver the Notes to J.P.
Morgan Securities Inc., for the account of each Purchaser, against payment by or
on behalf of such Purchaser of the purchase price therefor by wire transfer of
same day funds wired in accordance with the written instructions of the Company,
by causing DTC to credit the Notes to the account of J.P. Morgan Securities Inc.
at DTC. The Issuers will cause the certificates representing the Notes to be
made available to J.P. Morgan Securities Inc. for checking at least twenty-four
hours prior to the Time of Delivery at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be 9:30 a.m., New York City time, on April 27, 2004 or such other
time and date as J.P. Morgan Securities Inc. and the Issuers may agree upon in
writing. Such time and date are herein called the "Time of Delivery."

            (b)   The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including, without
limitation, the cross-receipt for the Notes and any additional documents
requested by the Purchasers pursuant to Section 7(l) hereof, will be delivered
at such time and date at the offices of Cahill Gordon & Reindel LLP, 80 Pine
Street, New York, New York 10005 or such other location as the parties mutually
agree (the "Closing Location"), and the Notes will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 6 p.m., New York City time, on the New York Business Day
next preceding the Time of Deliv-

                                      -9-



ery, at which meeting the final drafts of the documents to be delivered pursuant
to the preceding sentence will be available for review by the parties hereto.
For the purposes of this Section 4, "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.

            5.    Agreements. Each of the Issuers agrees with each of the
Purchasers:

            (a)   To prepare the Offering Memorandum in a form approved by you;
to make no amendment or any supplement to the Offering Memorandum which shall
not be approved by you promptly after reasonable notice thereof; and to furnish
you with copies thereof;

            (b)   Promptly from time to time to take such action as you may
reasonably request to qualify the Notes for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Notes; provided that in connection therewith the Issuers shall not be
required to qualify as a foreign corporation or limited liability company, as
the case may be, or to file a general consent to service of process in any
jurisdiction;

            (c)   To furnish the Purchasers with copies of the Offering
Memorandum and each amendment or supplement thereto signed by an authorized
officer of each of the Issuers with the independent accountants' reports in the
Offering Memorandum, and any amendment or supplement containing amendments to
the financial statements covered by such reports, signed by the accountants, and
additional copies thereof in, such quantities as you may from time to time
reasonably request, and if, at any time prior to the expiration of nine months
after the date of the Offering Memorandum, any event shall have occurred as a
result of which the Offering Memorandum as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Offering Memorandum is
delivered, not misleading, or, if for any other reason it shall be necessary or
desirable during such same period to amend or supplement the Offering
Memorandum, to notify you and upon your request to prepare and furnish without
charge to each Purchaser and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended Offering Memorandum or a
supplement to the Offering Memorandum which will correct such statement or
omission or effect such compliance;

            (d)   During the period beginning from the date hereof and
continuing until the date 90 days after the Time of Delivery, not to, and not
permit any of its affiliates or anyone authorized to act on behalf of the
Issuers or their affiliates to, without the prior written consent of J.P. Morgan
Securities Inc., offer, sell, contract to sell or otherwise dispose of, except
as provided hereunder, any securities of the Issuers that are substantially
similar to the Notes;

            (e)   Not to be or become, at any time prior to the expiration of
two years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;

            (f)   At any time when any Issuer is not subject to or in compliance
with Section 13 or 15(d) of the Exchange Act, for the benefit of holders from
time to time of Notes, to furnish at the Issuers' expense, upon request, to
holders of Notes and prospective purchasers of securities information (the
"Additional Issuer Information") satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the Act;

                                      -10-



            (g)   If such documents are not then available on the Commission's
EDGAR Database, to furnish or make electronically available to the holders of
the Notes as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, members' or
stockholders' equity and cash flows of the Issuers and their consolidated
subsidiaries certified by independent public accountants), and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the date of the Offering
Memorandum), to make electronically available to holders of the Notes
consolidated summary financial information of the Issuers and their subsidiaries
for such quarter in reasonable detail;

            (h)   If such documents are not then available on the Commission's
EDGAR Database, during a period of three years from the date of the Offering
Memorandum, to furnish or make electronically available to you, copies of all
reports or other communications (financial or other) furnished to holders of
ownership interests of the Issuers or CCI, and to furnish or make electronically
available to you, as soon as they are available, of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which the Notes or any class of securities of the Issuers or CCI is listed;

            (i)   During the period of two years after the Time of Delivery, the
Issuers will not, and will not permit any of their "affiliates" (as defined in
Rule 144 under the Act) to, resell any of the Notes which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them;

            (j)   To use the net proceeds received from the sale of the Notes
pursuant to this Agreement in the manner specified in the Offering Memorandum
under the caption "Use of proceeds";

            (k)   None of the Issuers or any of their affiliates, nor any person
authorized to act on their behalf (other than the Purchasers, as to whom the
Issuers take no responsibility) will engage in any directed selling efforts with
respect to the Notes in contravention of, and each of them will comply with, the
applicable offering restrictions requirement of Regulation S. Terms used in this
paragraph have the meanings given to them by Regulation S;.

            (l)   None of the Issuers or any of their affiliates, nor any person
authorized to act on their behalf (other than the Purchasers, as to whom the
Issuers take no responsibility) will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Notes under the Act;

            (m)   None of the Issuers or any of their affiliates, nor any person
authorized to act on their behalf (other than the Purchasers, as to whom the
Issuers take no responsibility), will engage in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with
any offer or sale of the Notes in the United States;

            (n)   Except as otherwise permitted by Regulation M under the
Exchange Act, none of the Issuers or any of their affiliates will take, directly
or indirectly, any action designed to or which has constituted or which would
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Issuers to
facilitate the sale or resale of the Notes; and

            (o)   The Issuers will use their best efforts prior to the Time of
Delivery to cause the Notes to be eligible for the PORTAL trading system of the
NASD.

            6.    Agreement to Pay Certain Fees. Each of the Issuers covenants
and agrees with the several Purchasers that the Issuers will pay or cause to be
paid the following: (i) the fees, disburse-

                                      -11-



ments and expenses of the Issuers' counsel and accountants in connection with
the issue of the Notes and all other expenses in connection with the
preparation, printing and filing of the Offering Memorandum and any amendments
and supplements thereto and the mailing and delivering of copies thereof to the
Purchasers and dealers; (ii) the cost of printing or producing any Agreement
among Purchasers, this Agreement, the Indenture, the Notes, the Security
Documents, the Blue Sky and Legal Investment Memoranda, closing documents
(including, without limitation, any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Notes; (iii) all expenses in connection with the qualification of the Notes for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including, without limitation, the fees and disbursements of counsel for
the Purchasers in connection with such qualification and in connection with the
Blue Sky and Legal Investment surveys; (iv) any fees charged by securities
rating services for rating the Notes; (v) the cost of preparing the Notes; (vi)
the fees and expenses of the Trustee and any agent of the Trustee and the fees
and disbursements of counsel for the Trustee in connection with the Indenture
and the Notes; (vii) any cost incurred in connection with the designation of the
Notes for trading in PORTAL; (viii) all costs associated with the grant of the
security interests to be obtained under the Indenture and the Security Documents
including, without limitation, the preparation of the financing statement
referred to in Section 7(k) (including the reasonable expenses of counsel for
the Purchasers) and all filing fees and similar taxes; and (ix) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section 6 and Sections 9 and 12
hereof; the Purchasers will pay all their own costs and expenses, including,
without limitation, the fees of their counsel, transfer taxes on resale of any
of the Notes by them, and any advertising expenses connected with any offers
they may make.

            7.    Conditions to the Obligations of the Purchasers. The
obligations of the Purchasers hereunder shall be subject, in their discretion,
to the condition that all representations and warranties and other statements of
the Issuers herein are, at and as of the date hereof and the Time of Delivery,
true and correct, the condition that the Issuers shall have performed all their
obligations hereunder theretofore to be performed, and the following additional
conditions:

            (a)   The Purchasers shall have received from Cahill Gordon &
Reindel LLP, counsel for the Purchasers, such opinion or opinions, dated the
Time of Delivery and addressed to the Purchasers, with respect to the issuance
and sale of the Notes and the Indenture and other related matters as the
Purchasers may reasonably require, and the Issuers shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.

            (b)   Irell & Manella LLP, counsel for the Issuers, shall have
furnished to you their written opinions, dated the Time of Delivery,
substantially in the forms of Annex II-A and II-B hereto.

            (c)   Cole, Raywid & Braverman, L.L.P., special regulatory counsel
to the Issuers, shall have furnished to you their written opinion, dated the
Time of Delivery, in form and substance reasonably satisfactory to you, to the
effect that:

                  (i)   The issue and sale of the Notes and the compliance by
      the Issuers with all the provisions of the Notes, the Indenture, the
      Security Documents and this Agreement and the consummation of the
      transactions herein and therein contemplated do not and will not
      contravene the Cable Acts or any order, rule or regulation of the FCC to
      which the Issuers or any of their Parent Companies or subsidiaries or any
      of their property is subject; however, to the extent that any document
      purports to grant a security interest in licenses issued by the FCC, the
      FCC has taken the position that security interests in FCC licenses are not
      valid. To the extent that any party seeks to exercise control of an FCC
      license in the event of a default or for any other reason, it may be
      necessary to obtain prior FCC consent;

                                      -12-



                  (ii)  To the best of such counsel's knowledge, no consent,
      approval, authorization or order of, or registration, qualification or
      filing with the FCC is required under the Cable Acts or any order, rule or
      regulation of the FCC in connection with the issue and sale of the Notes
      and the compliance by the Issuers with all the provisions of the Notes,
      the Indenture, the Security Documents and this Agreement and the
      consummation of the transactions herein and therein contemplated; however,
      to the extent that any document purports to grant a security interest in
      licenses issued by the FCC, the FCC has taken the position that security
      interests in FCC licenses are not valid; to the extent that any party
      seeks to exercise control of an FCC license in the event of a default or
      for any other reason, it may be necessary to obtain prior FCC consent;

                  (iii) The statements set forth in the Offering Memorandum
      under the captions "Risk factors" under the subheading "Risks relating to
      regulatory and legislative matters" and in "Regulation and legislation,"
      insofar as they constitute summaries of laws referred to therein,
      concerning the Cable Acts and the published rules, regulations and
      policies promulgated by the FCC thereunder, fairly summarize the matters
      described therein;

                  (iv)  To such counsel's knowledge based solely upon its review
      of publicly available records of the FCC and operational information
      provided by the Issuers' and their Parent Companies and subsidiaries'
      management, the Company and its Parent Companies and subsidiaries hold all
      FCC licenses for cable antenna relay services necessary to conduct the
      business of the Company and its subsidiaries as currently conducted,
      except to the extent the failure to hold such FCC licenses would not,
      individually or in the aggregate, be reasonably expected to have a
      Material Adverse Effect; and

                  (v)   Except as disclosed in the Offering Memorandum and
      except with respect to rate regulation matters, and general rulemakings
      and similar matters relating generally to the cable television, industry,
      to such counsel's knowledge, based solely upon its review of the publicly
      available records of the FCC and upon inquiry of the Issuers' and their
      Parent Companies' and subsidiaries' management, during the time the cable
      systems of the Company and its Parent Companies and subsidiaries have been
      owned by the Company and its Parent Companies and subsidiaries (A) there
      has been no adverse FCC judgment, order or decree issued by the FCC
      relating to the ongoing operations of any of the Company or one of its
      subsidiaries that has had or could reasonably be expected to have a
      Material Adverse Effect; and (B) there are no actions, suits, proceedings,
      inquiries or investigations by or before the FCC pending or threatened in
      writing against or specifically affecting the Company or any of its Parent
      Companies or subsidiaries or any cable system of the Company or any of its
      Parent Companies or subsidiaries which could, individually or in the
      aggregate, be reasonably expected to result in a Material Adverse Effect;

            (d)   Curtis Shaw, Esq., General Counsel of the Company, shall have
furnished to you his written opinion, dated as of the Time of Delivery, in form
and substance satisfactory to you, to the effect that:

                  (i)   Each subsidiary of the Company listed on a schedule
      attached to such counsel's opinion (the "Charter Subsidiaries") has been
      duly incorporated or formed, as the case may be, and is validly existing
      as a corporation, limited liability company or partnership, as the case
      may be, in good standing under the laws of its jurisdiction of
      incorporation or formation; and all the issued shares of capital stock,
      limited liability company interests or partnership interests, as the case
      may be, of each Charter Subsidiary are set forth on the books and records
      of the Company and, except for those Charter Subsidiaries that are general
      partners, assuming receipt of requisite consideration therefor, are fully
      paid and nonassessable (in the case of corporate entities) and not subject
      to additional capital contributions (in the case of limited liability
      company entities

                                      -13-



      and limited partnerships); and, except as otherwise set forth in the
      Offering Memorandum, and except for liens not prohibited under the credit
      agreements listed on such schedule, all outstanding shares of capital
      stock of each of the Charter Subsidiaries are owned by the Company, either
      directly or indirectly or through wholly-owned subsidiaries free and clear
      of any perfected security interest and, to the knowledge of such counsel,
      after due inquiry, any other security interest, claim, lien or
      encumbrance;

                  (ii)  Each of the Issuers and the Charter Subsidiaries has
      been duly qualified as a foreign corporation, partnership or limited
      liability company, as the case may be, for the transaction of business and
      is in good standing under the laws of each jurisdiction set forth in a
      schedule to such counsel's opinion;

                  (iii) To the best of such counsel's knowledge and other than
      as set forth in the Offering Memorandum, there are no legal or
      governmental proceedings pending to which the Issuers, the Parent
      Companies or any of the Issuers' subsidiaries is party or of which any
      property of the Issuers, the Parent Companies or any of the Issuers'
      subsidiaries is the subject, of a character required to be disclosed in a
      registration statement on Form S-1, which is not disclosed in the Offering
      Memorandum, except for such proceedings which are not likely to have,
      individually or in the aggregate, a Material Adverse Effect; and, to the
      best of such counsel's knowledge and other than as set forth in the
      Offering Memorandum, no such proceedings are overtly threatened by
      governmental authorities or by others; and

                  (iv)  The issue and sale of the Notes and the compliance by
      the Issuers with all the provisions of the Notes, the Indenture, the
      Security Documents and this Agreement and the consummation of the
      transactions therein contemplated will not result in a violation of the
      provisions of the certificate of incorporation or by-laws, or certificate
      of formation or limited liability company agreement or partnership
      agreement, as the case may be, of any of the Charter Subsidiaries;

            (e)   On the date of the Offering Memorandum and also at the Time of
Delivery, KPMG LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you;

            (f)   (i) None of the Issuers, any of the Parent Companies or any of
the Issuers' subsidiaries shall have sustained since the date of the latest
audited financial statements included in the Offering Memorandum any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Offering
Memorandum, and (ii) since the respective dates as of which information is given
in the Offering Memorandum (for clarification purposes, this excludes any
amendment or supplement to the Offering Memorandum on or after the date of this
Agreement) there shall not have been any change in the capital stock, limited
liability company interests, partnership interests or long-term debt of the
Issuers or any of their subsidiaries or any change, or any development involving
a prospective change, in or affecting the general affairs, management, financial
position, stockholders' or members' equity, or results of operations of the
Issuers and their subsidiaries, otherwise than as set forth or contemplated in
the Offering Memorandum, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of the Purchasers so material and adverse
as to make it impracticable or inadvisable to proceed with the offering or the
delivery of the Notes on the terms and in the manner contemplated in this
Agreement and in the Offering Memorandum;

            (g)   Subsequent to the execution and delivery of this Agreement,
(i) no downgrading shall have occurred in the rating accorded the Notes or any
other debt securities or preferred stock issued

                                      -14-



or guaranteed by the Issuers by any "nationally recognized statistical rating
organization," as such term is defined by the Commission for purposes of Rule
436(g)(2) under the Act; and (ii) no such organization shall have publicly
announced that it has under surveillance or review, or has changed its outlook
with respect to, its rating of the Notes or of any other debt securities or
preferred stock issued or guaranteed by the Issuers (other than an announcement
with positive implications of a possible upgrading);

            (h)   On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the Nasdaq National
Market; (ii) a suspension or material limitation in trading in CCI's Class A
common stock on the Nasdaq National Market, (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities or the
declaration of a national emergency or war or the occurrence of any other
calamity or crisis, if the effect of any such event specified in this clause
(iv) in the judgment of the Purchasers makes it impracticable or inadvisable to
proceed with the offering; sale or the delivery of the Notes on the terms and in
the manner contemplated in the Offering Memorandum;

            (i)   The Notes shall have been designated for trading on PORTAL;

            (j)   The Credit Facility shall have been executed by the respective
parties thereto and shall be in form and substance substantially similar to that
described in the Offering Memorandum;

            (k)   The Purchasers and the Trustee shall have received each of the
following documents which shall be reasonably satisfactory in form and substance
to J.P. Morgan Securities Inc. and the Trustee and each of their respective
counsel with respect to each item of Collateral, as appropriate:

                  (i)   each Security Document;

                  (ii)  to the extent delivered to the agents under the Credit
      Facility, Uniform Commercial Code, judgment, tax lien and intellectually
      property searches;

                  (iii) any UCC-1 financing statement required by the Collateral
      Agreement to be filed in order to create in favor of the Trustee for the
      benefit of the holders of the Notes, a perfected lien on the collateral
      described therein;

                  (iv)  to the extent delivered to the agents under the Credit
      Facility, any certificate of an officer of any Parent Company or any
      subsidiary of a Parent Company relating to the Collateral (which shall
      also be addressed to each of the Purchasers and the Trustee); and

                  (v)   opinions from all local and foreign counsel who deliver
      opinions to the Bank Agents (as defined in the Offering Memorandum) (which
      opinions shall be addressed to the Purchasers and the Trustee), which
      opinions shall address, with respect to the Collateral and the Notes, the
      matters addressed with respect to the Credit Facility with only such
      modifications as are necessary to reflect the relative priority of the
      Notes as contemplated by the Offering Memorandum and the Transaction
      Documents and otherwise satisfactory to J.P. Morgan Securities Inc., the
      Trustee and each of their respective counsel; and

            (l)   The Issuers shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of each Issuer satisfactory
to you as to the accuracy of the representations and warranties of the Issuers
herein at and as of such Time of Delivery, as to the performance by the Issuers
of all their obligations hereunder to be performed at or prior to such Time of
Delivery, as to the mat-

                                      -15-



ters set forth in subsections (f) and (g) of this Section 7 and as to such other
matters as you may reasonably request.

            8.    Conditions to the Obligations of the Issuers. The obligations
of the Issuers hereunder shall be subject to the satisfaction of the condition
set forth in Section 7(j) above.

            9.    Indemnification and Contribution.

            (a)   Indemnification of the Purchasers. The Issuers jointly and
severally agree to indemnify and hold harmless each Purchaser, its affiliates,
directors and officers and each person, if any, who controls such Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, reasonable legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted, as such
fees and expenses are incurred), joint or several, that arise out of, or are
based upon, any untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum (or any amendment or supplement thereto) or
any omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to any Purchaser furnished to the
Issuers in writing by such Purchaser through J.P. Morgan Securities Inc.
expressly for use therein.

            (b)   Indemnification of the Issuers. Each Purchaser agrees,
severally and not jointly, to indemnify and hold harmless each Issuer, its
affiliates, officers, directors, employees, members, managers and agents, and
each person, if any, who controls an Issuer within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act to the same extent as the indemnity
set forth in paragraph (a) above, but only with respect to any losses, claims,
damages or liabilities that arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to such Purchaser furnished
to the Issuers in writing by such Purchaser through J.P. Morgan Securities Inc.
expressly for use in the Offering Memorandum (or any amendment or supplement
thereto), it being understood and agreed that the only such information consists
of the following: the statements set forth in the last paragraph of the cover
page regarding the delivery of the Notes, and under the heading "Plan of
distribution," the paragraph related to over-allotment, covering and
stabilization transactions.

            (c)   Notice and Procedures. If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnification may be sought (the "Indemnifying Person") in writing; provided
that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under this Section 9 except to the extent that it has
been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under this Section 9. If any such
proceeding shall be brought or asserted against an Indemnified Person and it
shall have notified the Indemnifying Person thereof, the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others entitled to indemnification
pursuant to this Section 9 that the Indemnifying Person may designate in such
proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding, as incurred. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indem-

                                      -16-



nified Person shall have mutually agreed to the contrary; (ii) the Indemnifying
Person has failed within a reasonable time to retain counsel reasonably
satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it which if
raised in a proceeding involving both parties would be inappropriate under
applicable legal or ethical standards due to actual or potential differing
interests between it and the Indemnifying Person; or (iv) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate under applicable legal or
ethical standards due to actual or potential differing interests between them.
It is understood and agreed that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such reasonable
fees and expenses shall be reimbursed as they are incurred. Any such separate
firm for any Purchaser, its affiliates, directors and officers and any control
persons of such Purchaser shall be designated in writing by J.P. Morgan
Securities Inc. and any such separate firm for the Issuers and any control
persons of the Issuers shall be designated in writing by the Issuers. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, not subject to further appeal, the
Indemnifying Person agrees to indemnify each Indemnified Person from and against
any loss or liability provided for in such settlement or judgment. No
Indemnifying Person shall, without the written consent of the Indemnified Person
(which shall not be unreasonably withheld), effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of such
Indemnified Person.

            (d)   Contribution. If the indemnification provided for in
paragraphs (a) and (b) above is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Issuers on the one hand and the Purchasers on
the other from the offering of the Notes or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Issuers on the one hand and the Purchasers on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Issuers on the one hand
and the Purchasers on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the
Issuers from the sale of the Notes and the total discounts and commissions
received by the Purchasers in connection therewith, as provided in this
Agreement, bear to the aggregate offering price of the Notes. The relative fault
of the Issuers on the one hand and the Purchasers on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuers or by the
Purchasers and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

            (e)   Limitation on Liability. The Issuers and the Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata allocation (even if the Purchasers were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph (d) above.
The amount paid or

                                      -17-



payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 9, in no event shall a Purchaser
be required to contribute any amount in excess of the amount by which the total
discounts and commissions received by such Purchaser with respect to the
offering of the Notes exceeds the amount of any damages that such Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective purchase obligations
hereunder and not joint.

            (f)   Non-Exclusive Remedies. The remedies provided for in this
Section 9 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any Indemnified Person at law or in equity.

            10.   Default by a Purchaser.

            (a)   If any Purchaser shall default in its obligation to purchase
the Notes which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Notes on the
terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Notes, then the Issuers
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such
Notes on such terms. In the event that, within the respective prescribed
periods, you notify the Issuers. that you have so arranged for the purchase of
such Notes, or the Issuers notify you that they have so arranged for the
purchase of such Notes, you or the Issuers shall have the right to postpone the
Time of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Offering Memorandum, or in
any other documents or arrangements, and the Issuers agree to prepare promptly
any amendments to the Offering Memorandum which in your opinion may thereby be
made necessary. The term "Purchaser" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Notes.

            (b)   If, after giving effect to any arrangements for the purchase
of the Notes of a defaulting Purchaser or Purchasers by you and the Issuers as
provided in subsection (a) above, the aggregate principal amount of such Notes
which remains unpurchased does not exceed one-tenth of the aggregate principal
amount of all the Notes, then the Issuers shall have the right to require each
non-defaulting Purchaser to purchase the principal amount of Notes which such
Purchaser agreed to purchase hereunder and, in addition, to require each
non-defaulting Purchaser to purchase its pro rata share (based on the principal
amount of Notes which such Purchaser agreed to purchase hereunder) of the Notes
of such defaulting Purchaser or Purchasers for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Purchaser from
liability for its default.

            (c)   If, after giving effect to any arrangements for the purchase
of the Notes of a defaulting Purchaser or Purchasers by you and the Issuers as
provided in subsection (a) above, the aggregate principal amount of Notes which
remains unpurchased exceeds one-tenth of the aggregate principal amount of all
the Notes, or if the Issuers shall not exercise the right described in
subsection (b) above to require non-defaulting Purchasers to purchase Notes of a
defaulting Purchaser or Purchasers, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Purchaser or the
Issuers, except for the expenses to be borne by the Issuers and the Purchasers
as provided in Section 6

                                      -18-



hereof and the indemnity and contribution agreements in Section 9 hereof; but
nothing herein shall relieve a defaulting Purchaser from liability for its
default.

            11.   Representations and Indemnities to Survive. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuers and the several Purchasers, as set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Purchaser or any controlling
person of any Purchaser, or the Issuers, or any officer or director or
controlling person of the Issuers, and shall survive delivery of and payment for
the Notes.

            12.   Termination. If this Agreement shall be terminated pursuant to
Section 10 hereof, the Issuers shall not then be under any liability to any
Purchaser except as provided in Sections 6 and 9 hereof; but, if for any other
reason other than a termination pursuant to clauses (i), (iii) or (iv) of
Section 7(h), the Notes are not delivered by or on behalf of the Issuers as
provided herein, the Issuers will reimburse the Purchasers through you for all
out-of-pocket expenses approved in writing by you, including, fees and
disbursements of counsel, reasonably incurred by the Purchasers in making
preparations for the purchase, sale and delivery of the Notes, but the Issuers
shall then be under no further liability to any Purchaser except as provided in
Sections 6 and 9 hereof.

            13.   Reliance and Notices. In all dealings hereunder, you shall act
on behalf of each of the Purchasers, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Purchaser made or given by you jointly or by J.P. Morgan Securities Inc. on
behalf of you as Purchasers.

            All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Purchasers (or any of them) shall be delivered or sent
by mail, telex or facsimile transmission to you as Purchasers (or a Purchaser)
to J.P. Morgan Securities Inc., Attn: James P. Casey, Managing Director, 270
Park Avenue, New York, New York 10017 (fax: (212) 270-1063), and if to the
Issuers shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Issuers set forth in the Offering Memorandum, Attention:
Secretary. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.

            14.   Successors. This Agreement shall be binding upon, and inure
solely to the benefit of, the Purchasers, the Issuers, and, to the extent
provided in Sections 9 and 11 hereof, the officers and directors of the Issuers
and the Purchasers and each person who controls the Issuers or any Purchaser,
and their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Notes from any Purchaser shall be deemed a
successor or assign by reason merely of such purchase.

            15.   Timeliness. Time shall be of the essence in this Agreement.

            16.   Applicable Law. This Agreement shall be governed by and
construed in. accordance with the laws of the State of New York.

            17.   Counterparts. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.

                                      -19-



            If the foregoing is in accordance with your understanding, please
sign and return to us counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Issuers. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Issuers for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.

                                        Very truly yours,

                                        CHARTER COMMUNICATIONS OPERATING, LLC

                                        By: /s/ Eloise E. Schmitz
                                            -----------------------------------
                                            Name: Eloise E. Schmitz
                                            Title: Vice President

                                        CHARTER COMMUNICATIONS OPERATING
                                        CAPITAL CORP.

                                        By: /s/ Eloise Schmitz
                                            ------------------------------------
                                            Name: Eloise E. Schmitz
                                            Title: Vice President

                                      -20-



                                        Accepted as of the date hereof

                                        J.P. MORGAN SECURITIES INC.

                                        Acting severally on behalf of themselves
                                               and the several Purchasers named
                                               in Schedule I hereto.

                                        By: /s/ Daniel M. Hochstadt
                                            -----------------------------------
                                            Name: Daniel M. Hochstadt
                                            Title: Vice President

                                      -21-



                                   SCHEDULE I



                                         Principal Amount of Eight Year    Principal Amount of Ten Year
             Purchasers                      Notes to be Purchased             Notes to be Purchased
             ----------                      ---------------------             ---------------------
                                                                     
J.P. Morgan Securities Inc.                      US $291,500,000                 US $106,000,000

Banc of America Securities LLC                       165,000,000                      60,000,000

Citigroup Global Markets Inc.                        165,000,000                      60,000,000

Credit Suisse First Boston LLC                       165,000,000                      60,000,000

Credit Lyonnais Securities (USA) Inc.                 82,500,000                      30,000,000

Deutsche Bank Securities Inc.                         68,750,000                      25,000,000

BNP Paribas Securities Corp.                          22,000,000                       8,000,000

BNY Capital Markets, Inc.                             19,250,000                       7,000,000

Rabo Securities USA, Inc.                             19,250,000                       7,000,000

Scotia Capital (USA) Inc.                             19,250,000                       7,000,000

ABN AMRO Incorporated                                 16,500,000                       6,000,000

Harris Nesbitt Corp.                                  16,500,000                       6,000,000

Morgan Stanley & Co. Incorporated                     16,500,000                       6,000,000

RBC Capital Markets Corporation                       16,500,000                       6,000,000

SG Cowen Securities Corp.                             16,500,000                       6,000,000
                                               -----------------                 ---------------
        Total........................          US $1,100,000,000                 US $400,000,000
                                               =================                 ===============




                                                                         ANNEX I

                       Selling Restrictions for Offers and
                         Sales outside the United States

            (1)(a) The Securities have not been and will not be registered under
the Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in. accordance with Regulation S
under the Act or pursuant to an exemption from the registration requirements of
the Act. Each Purchaser represents and agrees that, except as otherwise
permitted under Section 3(a)(i) of the Agreement to which this is an annex, it
has offered and sold the Securities, and will offer and sell the Securities, (i)
as part of their distribution at any time; and (ii) otherwise until 40 days
after the later of the commencement of the offering and the Time of Delivery,
only in accordance with Rule 903 of Regulation S under the Act. Accordingly,
each Purchaser represents and agrees that neither it, nor any of its affiliates
nor any person acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and that it and they
have complied and will comply with the offering restrictions requirement of
Regulation S. Each Purchaser agrees that, at or prior to the confirmation of
sale of Securities (other than a sale of Securities pursuant to Section 3(a)(i)
of the Agreement to which this is an annex), it shall have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the distribution
compliance period a confirmation or notice to substantially the following
effect:

            "The Securities covered hereby have not been registered under the
            U.S. Securities Act of 1933, as amended (the "Act") and may not be
            offered or sold within the United States or to, or for the account
            or benefit of, U.S. persons (i) as part of their distribution at any
            time or (ii) otherwise until 40 days after the later of the
            commencement of the offering and April 27, 2004, except in either
            case in accordance with Regulation S or Rule 144A under the Act.
            Terms used above have the meanings given to them by Regulation S."

            (b)   Each Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its affiliates
or with the prior written consent of the Company.

            (c)   Terms used in this section have the meanings given to them by
Regulation S.

            (2)   Each Purchaser represents and agrees that:

            (a)   It has not offered or sold and prior to the expiry of the
period of six months from the closing of the offering of the Securities, will
not offer or sell any Securities to persons in the United Kingdom, except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances that have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995.

            (b)   It has only communicated or caused to be communicated and will
only communicate or cause to be communicated any invitation or inducement to
engage in investment activity (within the meaning of section 21 of the Financial
Services and Markets Act 2000 ("FSMA")) received by it in connection with the
issue or sale of any Securities or Exchange Notes in circumstances in which
section 21(1) of the FSMA does not apply to the Company.



            (c)   It has complied and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to the Securities or
Exchange Notes in, from or otherwise involving the United Kingdom.

            (d)   The offer in the Netherlands of the Securities or Exchange
Notes is exclusively limited to persons who trade or invest in securities in the
conduct of a profession or business (which includes banks, stockbrokers,
insurance companies, pension funds, other institutional investors and finance
companies and treasury departments of large enterprises).

            (3)   Each Purchaser agrees that it will not offer, sell or deliver
any of the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with the express written consent of J.P. Morgan Securities Inc. and then only at
such Purchaser's own risk and expense.

                                      -2-

EX-23.2

Exhibit 23.2

Independent Auditors’ Consent

The Board of Directors
CCH II, LLC:

We consent to the use of our report dated March 1, 2004, except as to Note 24, which is as of April 27, 2004, relating to the consolidated balance sheets of CCH II, LLC and subsidiaries as of December 31, 2003 and 2002, and the related consolidated statements of operations, changes in member’s equity, and cash flows for each of the years in the three-year period ended December 31, 2003, included herein, and to the reference to our firm under the headings “Summary Consolidated Financial Data,” “Selected Historical Consolidated Financial Data,” and “Experts” in the registration statement.

As discussed in Note 3 to the consolidated financial statements, effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

As discussed in Note 16 to the consolidated financial statements, effective January 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, as amended by Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure – an amendment of FASB Statement No. 123.

/s/ KPMG LLP
St. Louis, Missouri
May 4, 2004