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Carolina <br />Cable <br />1129 \kea1 er Dairy Rd. • Timberhne Shopping Ctr. • Chapel Hill. \C yr,s- (",l • x)19 <br />January 15, 1992 <br />Honorable Moses Carey, Jr. <br />Chairman <br />Orange County Board of Commissioners <br />Post Office Box 8181 <br />Hillsborough, North Carolina 27278 <br />Dear Chairman Carey: <br />As we previously advised informally, Prime Cable Income Partners, L.P. <br />d /b /a Carolina Cable has been negotiating for the sale of its cable television <br />system. We are now pleased to inform you that a subsidiary of Time Warner Inc. <br />("TWI "), American Television & Communications Corporation ( "ATC "), which is <br />the parent corporation of Cablevision of Durham has contracted with Carolina <br />Cable to acquire the system, subject to the approval of the County <br />Commissioners. Accordingly, Carolina Cable respectfully requests approval for <br />the transfer and assignment of its franchise. <br />ATC or its subsidiaries operate cable television systems in Charlotte, <br />Raleigh, Durham, Greensboro, Fayetteville and many other North Carolina <br />communities. As can be explained to you in greater detail by Mr. Fraser of ATC, <br />Time Warner is in the initial stages of a corporate restructuring in which assets of <br />several of its subsidiaries, including ATC, will be transferred to Time Warner <br />Entertainment, L.P., a limited partnership ( "TWE "). Two Japanese corporations, <br />Toshiba and C. Itoh, will each receive a 6.25% limited partner interest in return <br />for a combined capital investment of $1 billion. The remaining 87.5% interest in <br />TWE will be held by TWI through subsidiaries. <br />While there will be no change in the management or control of ATC or its <br />subsidiaries, there will be a pro forma reorganization and transfer of the cable <br />franchises and other assets to the new limited partnership. The transfer of assets <br />to TWE may take place through one or more entities controlled by TWI. <br />Accordingly, it is respectfully requested that approval be given for a transfer or <br />assignment of the franchise to ATC and /or any other entity under the control of <br />TWI. <br />There is one other aspect of the proposed transaction that we need to <br />bring to the Board's attention and for which we will need the approval and <br />cooperation of the County Commissioners. As a result of a peculiarity in the <br />copyright rules governing cable television signal retransmission, it will not be <br />possible to consummate the proposed transaction if the transfer of the Orange <br />