UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
JONES INTERCABLE, INC.
(Name of Issuer)
CLASS A COMMON STOCK
$.01 PAR VALUE
COMMON STOCK
$.01 PAR VALUE
(Title of Class of Securities)
480206-200
480206-101
(CUSIP Number)
BELL CANADA INTERNATIONAL INC.
(Name of Persons Filing Statement)
Martine Turcotte
General Counsel
Bell Canada International Inc.
1000, rue de la Gauchetiere Ouest, Bureau 1100
Montreal, Quebec
Canada H3B 4Y8
Tel. No.: (514) 392-2340
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
December 20, 1994
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this statement because of Rule 13d-1(b)(3) or (4), check the
following: [ ].
Check the following box if a fee is being paid with this statement:
[ ].
SCHEDULE 13D
______________________________ ________________________________
|(Class A Common Stock) | | |
|CUSIP No. 480206-200 | | Page 2 of 86 Pages |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | Bell Canada International Inc. |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |_| |
| | (b) |X| |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | AF |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(E) |_| |
| | Not applicable |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Canada |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | |
| | | 9,914,300 (see Item 5) |
| | | |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | |
| OWNED BY | | 0 |
| EACH |____|_______________________________________________|
| REPORTING | 9 | SOLE DISPOSITIVE POWER |
| PERSON | | |
| WITH | | 9,914,300 (see Item 5) |
| | | |
| |____|_______________________________________________|
| | 10 | SHARED DISPOSITIVE POWER |
| | | |
| | | 0 |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | 9,914,300 (see Item 5) |
|____|____________________________________________________________________|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* Not applicable |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 37.9% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | CO |
|____|____________________________________________________________________|
SCHEDULE 13D
______________________________ ________________________________
|(Common Stock) | | |
|CUSIP No. 480206-101 | | Page 3 of 86 Pages |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | Bell Canada International Inc. |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |_| |
| | (b) |X| |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | AF |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(E) |_| |
| | Not applicable |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Canada |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | |
| | | 0 |
| | | |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | |
| OWNED BY | | 0 |
| EACH |____|_______________________________________________|
| REPORTING | 9 | SOLE DISPOSITIVE POWER |
| PERSON | | |
| WITH | | 0 |
| | | |
| |____|_______________________________________________|
| | 10 | SHARED DISPOSITIVE POWER |
| | | |
| | | 2,878,151 (see Item 5) |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | 2,878,151 (see Item 5) |
|____|____________________________________________________________________|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* Not applicable |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 56.3% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | CO |
|____|____________________________________________________________________|
Bell Canada International Inc. ("BCI") hereby amends and
supplements its Report on Schedule 13D, originally filed with the Securities
and Exchange Commission on April 1, 1994, as amended by Amendment No. 1 filed
on June 3, 1994 (the "Schedule 13D") with respect to the shares of Class A
Common Stock, $.01 par value (the "Class A Common Stock") of Jones Intercable,
Inc. (the "Company").
Unless otherwise indicated, each capitalized term used but not
defined herein shall have the meaning assigned to such term in the Schedule
13D.
The transactions contemplated by the Stock Purchase Agreement
and the Transaction Agreement, together with the Spacelink Transaction, were
consummated on December 20, 1994 (the "Closing").
Item 1. Security and Issuer.
The response set forth in Item 1 of the Schedule 13D is hereby
amended and supplemented by the following information:
This statement also relates to the shares of Common Stock, $.01
par value (the "Common Stock") of the Company.
Item 2. Identity and Background
The response set forth in Item 2 of the Schedule 13D is hereby
amended and supplemented by the following information:
On November 15, 1994, the name of BCE Telecom International Inc.
was changed to BCE Investments (Canada) Inc. ("BCEI").
The name, business address, present principal occupation or
employment, and each director and executive officer of BCI, Bell BVI, BCEI
and BCE is set forth on Schedules A, B, C and D, respectively.
Item 3. Source and Amount of Funds
or Other Consideration.
The response set forth in Item 3 of the Schedule 13D is hereby
amended and supplemented by the following information:
The aggregate purchase price for the 7,414,300 shares of Class
A Common Stock purchased by Bell BVI on December 20, 1994 pursuant to the
Stock Purchase Agreement was $203,893,250. Such price was contributed to the
capital of Bell BVI by BCI, which funded such amount by way of an interest
bearing demand loan from its ultimate parent company, BCE. For purposes of
this Schedule 13D, "30% Block" means the 7,414,300 shares of Class A Common
Stock purchased by Bell BVI at the Closing, together with the 2,500,000 shares
of Class A Common Stock purchased by Bell BVI on March 25, 1994.
The aggregate purchase price paid by Morgan Guaranty Trust
Company of New York, acting as agent for BCI ("MGT"), in connection with the
purchase of the Control Option was $54,684,869. Such price was funded by way
of an interest bearing demand loan from BCI's ultimate parent company, BCE.
Item 4. Purpose of the Transaction.
The response set forth in Item 4 of the Schedule 13D is hereby
amended and supplemented by the following information:
BCI has acquired the 30% Block and the Control Option for the
purpose of investment and as part of a strategic relationship with the Company
and certain of its affiliates.
In connection with the Closing, Derek H. Burney and Daniel E.
Somers were appointed to the Board of Directors of the Company. BCI has the
right to designate an additional member to the Company's Board of Directors and
expects to exercise that right in 1995. In addition, BCI and Mr. Jones have
the right to jointly designate three independent directors to the Board. This
right is also expected to be exercised in 1995.
BCI intends to review periodically the Company's business
affairs, financial position and prospects. Based on such evaluation and
review and general economic and industry conditions existing at the time, BCI
may consider from time to time various alternative courses of action. Such
actions may include the acquisition of additional shares of Class A Common
Stock or Common Stock through open market purchases, privately negotiated
transactions, tender offer, exchange offer or otherwise. Alternatively, such
actions may involve the sale of all or a portion of the 30% Block in the open
market, in privately negotiated transactions, through a registered public
offering or otherwise.
Pursuant to the terms of the Shareholders Agreement, BCI has
committed to invest a total of $400 million in the capital of the Company,
of which $259 million has already been invested. The remaining $141
million is expected to be invested from time to time to maintain BCI's 30%
equity interest in the Company.
There can be no assurance that BCI will purchase any additional
shares of Class A Common Stock or Common Stock, obtain control of the
Company or take any of the other actions enumerated above. Except as set
forth above, none of the Bell Canada Entities, any person controlling the
Bell Canada Entities, or to the best of BCI's knowledge, any of the persons
named in Schedules A,B,C or D, has any plan or proposals which relate to or
would result in any of the transactions described in subparagraphs (a)
through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Company.
The response set forth in Item 5 of the Schedule 13D is hereby
amended and supplemented by the following information:
Based on information furnished to BCI by the Company, BCI
believes that immediately following consummation of the Closing, there were
outstanding 5,113,021 shares of Common Stock and 26,131,388 shares of Class A
Common Stock.
(a) For the purpose of Rule 13d-3 promulgated under the Exchange
Act, BCI, through Bell BVI, beneficially owns the 30% Block, representing
approximately 38% of the outstanding Class A Common Stock and 31.7% of the
outstanding Capital Stock.
For the purpose of Rule 13d-3(d)(1)(i), BCI, acting through its
agent MGT, may be deemed to have beneficial ownership of the 2,878,151
shares of Common Stock covered by the Option Agreements, representing 56.3%
of the outstanding Common Stock and 9.2% of the outstanding Capital Stock.
By virtue of BCI being an indirect wholly-owned subsidiary of
BCE, BCE may be deemed to beneficially own the 30% Block which is beneficially
owned by BCI, and the 2,878,151 shares of Common Stock covered by the Option
Agreements.
Because of the existence of the Shareholders Agreement, BCI may
be deemed, pursuant to Rule 13d-(5)(b)(1), to be a member of a "group" with
Mr. Jones and International. BCI, however, disclaims that it is a member of a
"group" with Mr. Jones and International.
Mr. Jones and International own or have the right to acquire
and, solely for the purpose of Rule 13d-3, may be deemed to own beneficially
and to have the sole power to vote or direct the vote, and to dispose or
direct the disposition of, 2,769,678 shares of Class A Common Stock (which
includes Mr. Jones' options to purchase 134,677 shares of Class A Common Stock),
representing approximately 11% of the outstanding shares of Class A Common
Stock, and 2,878,151 shares of Common Stock, representing approximately 56% of
the outstanding shares of Common Stock. All of such shares of Common Stock
are covered by the Option Agreements.
Under Rule 13d-(5)(b)(1) the group is deemed to have acquired
beneficial ownership of all of the equity securities of the Company
beneficially owned by the other members of the group. However, BCI
disclaims beneficial ownership of any share of Common Stock or Class A
Common Stock beneficially owned by Mr. Jones or International.
Information contained herein relating to Mr. Jones and International is
provided to the best of BCI's knowledge.
Derek H. Burney, Chairman of the Board and Chief Executive
Officer of BCI, owns 350 shares of Class A Common Stock. Daniel E.
Somers, Senior Vice-President and Chief Financial Officer of BCI, owns 100
shares of Class A Common Stock. Brian A. Tickle, President and Chief
Operating Officer of BCI, owns 500 shares of Class A Common Stock. Michael
Lisogurski, Group Vice-President of Business Development of BCI, owns 1,000
shares of Class A Common Stock.
Except as set forth in this Item 5(a), none of the Bell Canada
Entities, nor any other person controlling the Bell Canada Entities, nor, to
the best of BCI's knowledge, any persons named in Schedule A, B, C or D hereto
owns beneficially any Class A Common Stock or Common Stock.
(b) BCI, through Bell BVI, has the sole power to vote or to
direct the voting of, and the sole power to dispose or to direct the
disposition of, the Shares.
By virtue of BCI being a wholly-owned subsidiary of BCE, BCE
may be deemed to share the voting and disposition power with respect to the
Shares.
(c) No transactions in Class A Common Stock or Common Stock have
been effected during the last 60 days by any Bell Canada Entity, any other
person controlling any Bell Canada Entity, or to the best of BCI's
knowledge, any of the persons named in Schedule A, B, C or D.
(d) Inapplicable.
(e) Inapplicable.
Item 6. Contracts, Arrangements, Understandings
or Relationships with Respect to
Securities of the Issuer.
The response set forth in Item 6 of the Schedule 13D is hereby
amended and supplemented by the following information:
On December 20, 1994, pursuant to the Stock Purchase Agreement,
BCI entered into the Shareholders Agreement with Mr. Jones, International and
the Company.
On December 20, 1994, pursuant to the Transaction Agreement,
MGT entered into Option Agreements with each of the following entities: (i)
Glenn Jones Grantor Business Trust ("GJ Trust"); (ii) Jones International
Grantor Business Trust ("JI Trust"); (iii) Entertainment; (iv) Jones Space
Segment, Inc. ("Space Segment"); (v) Jones Global Group, Inc. ("Global Group")
and (vi) Jones Interdigital, Inc. ("Interdigital"). The number of shares of
Common Stock covered by each Option Agreement is as follows:
Grantor Number of Shares
------- ----------------
GJ Trust 474,400
JI Trust 2,239,416
Entertainment 100,400
Space Segment 35,707
Global Group 27,585
Interdigital 643
A copy of the Shareholders Agreement is attached hereto as
Exhibit 8. A copy of the Option Agreement between MGT and JI Trust is
attached hereto as Exhibit 9. All of the other Option Agreements are
substantially similar except for the number of shares of Common Stock covered
thereby, which is described above.
To the best knowledge of BCI, except as referred to or
described herein, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) between the persons enumerated in Item 2,
and any other person, with respect to any securities of the Company,
including, but not limited to, transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 8: Shareholders Agreement dated as of December 20,
1994 among Mr. Jones, International, BCI and the
Company.
Exhibit 9: Option Agreement dated as of December 20, 1994
between MGT and JI Trust.
Exhibit 10: BCI Press Release issued December 20, 1994.
SIGNATURES
After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth
in this statement is true, complete and correct.
Date: December 22, 1994
BELL CANADA INTERNATIONAL INC.
By: /s/ Martine Turcotte
----------------------------
Name: Martine Turcotte
Title: General Counsel and
Corporate Secretary
EXHIBIT INDEX
Exhibit 8: Shareholders Agreement dated as of December 20,
1994 among Mr. Jones, International, BCI and the
Company.
Exhibit 9: Option Agreement dated as of December 20, 1994
between MGT and JI Trust.
Exhibit 10: BCI Press Release issued December 20, 1994.
Schedule A
DIRECTORS AND EXECUTIVE OFFICERS
OF BELL CANADA INTERNATIONAL INC.
The name, business address, title, present principal occupation
or employment and citizenship of each of the directors and executive officers
of Bell Canada International Inc. ("BCI") are set forth below. If no business
address is given the director's or officer's business address is 1000, rue de
la Gauchetiere West, Bureau 1100, Montreal, Quebec, Canada H3B 4Y8.
Unless otherwise indicated, each occupation set forth opposite
an individual's name refers to BCI.
Name and Present Principal
Relationship Occupation Including
to BCI Name and Address
Citizenship of Employer(1)
- ------------ ----------------------
Derek H. Burney Chairman of the Board Canadian
Director and and CEO
Officer
Thomas J. Bourke President and CEO Canadian
Director Tele-Direct (Publications) Inc.
1600 Rene-Levesque Blvd. West
Suite 1850
Montreal, Quebec H3H 1P9
J. Derek M. Davies Senior Vice-President Canadian and
Director BCE Inc. United States
1000 de la Gauchetiere
Street West
Suite 3700
Montreal, Quebec H3B 4Y7
Josef F. Fridman Senior Vice-President, Law Canadian
Director BCE Inc.
1000 de la Gauchetiere
Street West
Suite 3700
Montreal, Quebec H3B 4Y7
W. Brian Hewat President and CEO Canadian
Director Bell Northern Research
3500 Carling Avenue
Department AAOO - Lab 5
P.O. Box 3511, Station C
Ottawa, Ontario K1Y 4H7
Robert Kearney Chairman Canadian
Director BCE Canadian Telecom Group
BCE Inc.
1000 de la Gauchetiere
Street West
Suite 3700
Montreal, Quebec H3B 4Y7
Gerald T. McGoey Executive Vice-President Canadian
Director and Chief Corporate Officer
Bell Canada
1050 Beaver Hall Hill
19th Floor
Montreal, Quebec H2Z 1S4
John T. McLennan President and CEO Canadian
Director Bell Canada
1050 Beaver Hall Hill
19th Floor
Montreal, Quebec H2Z 1S4
C. Wesley M. Scott President and CEO Canadian
Director Stentor Resource Centre Inc.
160 Elgin Street
Suite 1800
Ottawa, Ontario K1G 3J4
Lynton R. Wilson Chairman, President and CEO Canadian
BCE Inc.
1000 de la Gauchetiere
Street West
Suite 3700
Montreal, Quebec H3B 4Y7
Robert Drolet Assistant Corporate Canadian
Officer Secretary
Michael Lisogurski Group Vice-President Canadian
Officer Business Development
C.S. Loudiadis Group Vice-President Canadian
Officer Telecom Services
Christian M. Paupe Vice-President Canadian
Officer Corporate Finance and Swiss
Serge Rouleau Vice-President Canadian
Officer Business Development
Richard Roy Corporate Comptroller Canadian
Officer
Daniel E. Somers Senior Vice-President Canadian
Officer and CFO
Brian A. Tickle President and Chief Canadian
Officer Operating Officer
Martine Turcotte General Counsel and Canadian
Officer Corporate Secretary
Leonard J. van Vice-President, Canadian
der Heyden Human Resources
Officer and Corporate Services
- ----------------
(1) Same address as director's or officer's business address except where
indicated.
<PAGE>
Schedule B
DIRECTORS AND EXECUTIVE OFFICERS OF BELL
CANADA INTERNATIONAL BVI III LIMITED
The name, business address, title, present principal occupation
or employment and citizenship of each of the directors and executive officers
of Bell Canada International BVI III Limited ("Bell BVI") are set forth below.
If no business address is given the director's or officer's business address
is Arawak Trust Company Limited, Main Street, Road Town, Tortola, British
Virgin Islands.
Name and Present Principal
Relationship Occupation Including
to Bell BVI Name and Address
Citizenship of Employer(1)
- ------------- ---------------------
David Raworth Attorney British
Director & Smith-Hughes Raworth
President & McKenzie
Arawak Chambers
P.O. Box 173
Road Town, Tortola
British Virgin Islands
Anthony G. Lynton Attorney Barbadian
Secretary Smith-Hughes Raworth
& McKenzie
Arawak Chambers
P.O. Box 173
Road Town, Tortola
British Virgin Islands
- ----------------
(1) Same address as director's or officer's business address except where
indicated. address except where indicated.
Schedule C
DIRECTORS AND EXECUTIVE OFFICERS
OF BCE INVESTMENTS (CANADA) INC.
The name, business address, title, present principal
occupation or employment and citizenship of each of the directors and
executive officers of BCE Investments (Canada) Inc. (``BCEI'') are set
forth below. If no business address is given the director's or officer's
business address is 1000, rue de la Gauchetiere Ouest, Bureau 3700, Montreal,
Quebec, Canada H3B 4Y7.
Unless otherwise indicated, each occupation set forth
opposite an individual's name refers to BCEI.
Name and Present Principal
Relationship Occupation Including
to BCEI Name and Address
Citizenship of Employer(1)
- ------------- ----------------------
Frederick J. Andrew Vice-President, Finance Canadian
Director & Vice-President, and Treasurer, BCE Inc.
Finance and Treasurer
Derek H. Burney Chairman and Chief Executive Canadian
Director Officer, Bell Canada
International Inc., 100, rue de la
Gauchetiere Quest, Bureau 1100,
Montreal, Quebec, H3B 4Y8
Josef J. Fridman Senior Vice-President, Law Canadian
Director & President and BCE Inc.
Chief Executive Officer
Marc J. Ryan General Counsel, BCE Inc. Canadian
Officer Secretary
Lynton R. Wilson Chairman, President and Chief Canadian
Director & Chairman of Executive Officer, BCE Inc.
the Board
Schedule D
DIRECTORS AND EXECUTIVE OFFICERS OF BCE INC.
The name, business address, title, present principal occupation
or employment and citizenship of each of the directors and executive officers
of BCE Inc. ("BCE") are set forth below. If no business address is given the
director's or officer's business address is 1000 rue de la Gauchetiere Ouest,
Bureau 3700, Montreal, Quebec, Canada H3B 4Y7. Unless otherwise indicated,
each occupation set forth opposite an individual's name refers to BCE.
Present Principal
Name and Occupation Including
Relationship Name and Address
to BCE of Employer(1)
- ------------ --------------------
Citizenship
- ------------
Peter A. Allen President Canadian
Director Anchises Investment Ltd.
Suite 3720, P.O. Box 621
Canada Trust Tower
BCE Place
161 Bay Street
Toronto, Ontario M5J 2S1
Ralph M. Barford President Canadian
Director Valleydene Corporation
Limited
20 Eglinton Avenue West
Suite 1903
P.O. Box 2026
Toronto, Ontario M4R 1K8
Warren Chippindale Retired Canadian
F.C.A. Cuttle Street
Director P.O. Box 9
Mont-Tremblant, Quebec
J0T 1Z0
J.V. Raymond Cyr Chairman of the Board Canadian
O.C. Bell Canada
Director c/o 1000 de la Gauchetiere
Street West
Suite 3700
Montreal, Quebec H3B 4Y8
C. William Daniel Retired Canadian
O.C. c/o Bank of Montreal
Director 4th Floor, 302 Bay Street
Toronto, Ontario M5X 1A1
Jeannine Guillevin Chairman of the Board Canadian
Wood and CEO
Director Guillevin International
Inc.
400 Montpellier Road
St-Laurent, Quebec H4N 2G7
The Hon. Donald J. Legal Counsel Canadian
Johnston, P.C. Q.C. Heenan Blaikie
Director 1250 Rene-Levesque Blvd.
West
Suite 2500
Montreal, Quebec H3B 4Y1
Gerald J. Maier Chairman of the Board Canadian
Director TransCanada PipeLines
Limited
c/o Western Gas Tower
530 8th Avenue S.W.
Suite 2600
P.O. Box 500, Station M
Calgary, Alberta T2P 3V6
E. Neil McKelvey Legal Counsel Canadian
O.C., Q.C. Stewart McKelvey Stirling
Director Scales
P.O. Box 7289
Postal Station A
Saint John, New Brunswick
E2L 4S6
J. Edward Newall President and CEO Canadian
O.C. NOVA Corporation of Alberta
Director P.O. Box 2535, Station M
801 - 7th Avenue S.W.
Calgary, Alberta T2P 2N6
Alastair H. Ross President Canadian
Director Allaro Resources Ltd.
630, 6th Avenue S.W.
10th Floor
Calgary, Alberta T2P 0S8
C. Richard Sharpe Chairman of the Board Canadian
Director Sears Canada Inc.
222 Jarvis Street
9th Floor
Toronto, Ontario M5B 2B8
Louise B. Retired Canadian
Vaillancourt C.M. c/o Tour Banque Nationale
Director 600 de la Gauchetiere
Street West
10th Floor
Montreal, Quebec H3B 4L2
Lynton R. Wilson Chairman, President Canadian
Director and Officer and CEO
Frederick J. Andrew Vice-President, Finance and Canadian
Officer Treasurer
Thomas J. Bourke Group Vice-President, Canadian
Officer Directories of BCE;
President and CEO
Tele-Direct (Publications) Inc.
1600 Rene-Levesque Blvd. West
Suite 1850
Montreal, Quebec H3H 1P9
Derek H. Burney Executive Vice-President Canadian
Officer of BCE;
Chairman of the Board and CEO
Bell Canada International Inc.
1000 de la Gauchetiere
Street West
Suite 1100
Montreal, Quebec H3B 4Y8
J. Derek M. Davies Senior Vice-President Canadian and
Officer Corporate Strategy United States
Josef J. Fridman Senior Vice-President, Canadian
Officer Law
Guy Houle Vice President and Canadian
Officer Corporate Secretary
BCE Inc.
c/o 1050 Beaver Hall Hill
Suite 1420
Montreal, Quebec H2Z 1S4
Charles A. Labarge Vice-President, Canadian
Officer Corporate Services
- ----------------
(1) Same address as director's or officer's business address except
where indicated.
SHAREHOLDERS AGREEMENT
Dated as of December 20, 1994
Among
GLENN R. JONES,
JONES INTERNATIONAL, LTD.,
BELL CANADA INTERNATIONAL INC.
and
JONES INTERCABLE, INC.
TABLE OF CONTENTS(*)
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions...................................... 1
ARTICLE II
GOVERNANCE OF THE COMPANY
SECTION 2.1 Board of Directors............................... 12
2.2 Class A Directors................................ 13
2.3 Common Directors................................. 13
2.4 Nomination and Vacancies......................... 14
2.5 Certain Shareholder Agreements................... 14
2.6 Investor Consent Rights.......................... 15
2.7 Termination of Rights............................ 19
2.8 Tag-Along Right and
Third Party Offers . . . . . . . . . . 21
(*) The Table of Contents is not a part of this Agreement.
ARTICLE III
COVENANTS
SECTION 3.1 Investment Commitment............................ 22
3.2 Consultation on Business Strategies.............. 24
3.3 Obligation to Refer Business
Opportunities.................................. 26
3.4 Supplier Arrangements............................ 26
3.5 Programming Services............................ 30
3.6 Transactions with Affiliates..................... 31
3.7 Information...................................... 32
3.8 Preemptive Rights................................ 32
3.9 Registration Rights.............................. 36
3.10 Confidentiality.................................. 36
3.11 Certain Brokerage Fees........................... 37
3.12 Purchases of Additional Shares
of Capital Stock............................... 37
3.13 Termination of Article III....................... 38
ARTICLE IV
TRANSFER RESTRICTIONS
AND OFFER PROCEDURES
SECTION 4.1 Transfer Restrictions............................ 38
4.2 Sales of Class A Shares by Jones................. 40
4.3 Purchases of Class A Shares by
Bell International Group Entities.............. 41
4.4 General Offer Procedures......................... 42
4.5 Termination of Article IV........................ 44
ARTICLE V
PROVISIONS RELATING
TO THE CONTROL OPTION
SECTION 5.1 Issuances of Common Shares During the
Option Period.................................. 44
5.2 Consents and Approvals For Exercise
of Control Option.............................. 44
5.3 Further Assurances............................... 45
5.4 No Proxies or Encumbrances on
Optioned Shares................................ 45
5.5 Deemed Exercise.................................. 46
5.6 Trading in Class A Shares........................ 46
5.7 Certain Information.............................. 46
5.8 Covenants of International and Jones............. 47
5.9 Termination of Article V......................... 48
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Representations and Warranties of
Jones.......................................... 48
6.2 Representations and Warranties of
International.................................. 49
6.3 Representations and Warranties of
Investor....................................... 50
6.4 Representations and Warranties of
the Company.................................... 51
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Termination...................................... 53
7.2 Successors and Assigns; Assignment............... 53
7.3 Specific Performance........................... 54
7.4 Notices.......................................... 54
7.5 Expenses......................................... 56
7.6 Amendments and Waivers........................... 56
7.7 Governing Law.................................... 56
7.8 Counterparts; Effectiveness..................... 56
7.9 Headings......................................... 56
7.10 Entire Agreement................................. 56
7.11 Separability..................................... 57
SCHEDULES
SCHEDULE I List of Affiliate Agreements
SCHEDULE II List of Cable Partnerships
EXHIBITS
EXHIBIT A Registration Rights
EXHIBIT B Form of Sale Offer Notice
EXHIBIT C Form of Purchase Notice
EXHIBIT D Form of Purchase Offer Notice
EXHIBIT E Form of Sale Notice
AGREEMENT dated as of December 20, 1994 among Glenn R. Jones, a
resident of Colorado, Jones International, Ltd., a Colorado corporation
("International"), Bell Canada International Inc., a Canadian corporation
("Investor"), and Jones Intercable, Inc., a Colorado corporation (the
"Company").
W I T N E S E T H :
WHEREAS, on March 25, 1994 Investor, through its wholly owned
subsidiary Bell Canada International BVI III Limited ("Bell BVI") purchased
2,500,000 Class A Shares (as defined below) at a price of $22.00 per share, or
$55,000,000 in the aggregate;
WHEREAS, concurrently with the execution of this Agreement,
(i) Investor is purchasing, through Bell BVI, International BVI III Limited
from the Company 7,414,300 Class A Shares at a price of $27.50 per share, or
$203,893,250 in the aggregate and (ii) certain affiliates of Glenn R. Jones
are granting to Investor options to purchase the Optioned Shares (as defined
below); and
WHEREAS, in connection with such transactions the parties
hereto wish to enter into certain arrangements concerning the operation and
governance of the Company and other related matters;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. (a) The following terms, as used herein,
have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with such Person.
"Affiliate Agreements" means the agreements described on
Schedule I as in effect on the date hereof.
"Allocated Expenses" means for any period the fees payable
(without regard to any Cable Partnership's right to defer or limit actual
payment) to the Company or a Consolidated Subsidiary by the Cable Partnerships
to compensate the Company or such Consolidated Subsidiary for that portion
(computed by the Company consistently with respect to all Cable Partnerships)
of its general overhead and administrative expenses, including all of its
direct and indirect expenses allocable to the operation of the Cable
Partnerships' business, including, but not limited to, home office rent,
supplies, telephone, travel and copying charges, and salaries of full and
part-time employees.
"Allowed Amount" means $20,000,000 until December 31, 1995.
During each subsequent calendar year, the Allowed Amount shall be equal to the
Increase Percentage for such calendar year multiplied by the Allowed Amount
for the immediately preceding calendar year. "Increase Percentage" for any
calendar year shall mean one plus the percentage increase in the Consumer
Price Index for the Denver Metropolitan Area as published by the United States
Department of Labor for the immediately preceding calendar year.
"Annualized Operating Cash Flow" means, for any fiscal quarter
of the Company, the product of (i) four and (ii) the total revenues (excluding
the gain on the sale of any assets to the extent included therein) of the
Company and its Consolidated Subsidiaries for such quarter, adjusted for Owned
Systems acquired or sold during such period, plus MLP Distributions and
Interest Income, less the sum of (A) operating expenses of the Company and its
Consolidated Subsidiaries for such quarter, excluding non-cash items, adjusted
for Owned Systems acquired or sold during such period, (B) general and
administrative expenses of the Company and its Consolidated Subsidiaries for
such quarter, excluding non-cash items, in each case, (C) CATV Fund Fees, net
of taxes, and (D) payments of Taxes on operating income, provided that
Management Fees, Allocated Expenses and Interest Income shall be included in
the foregoing amounts only to the extent actually received in cash during such
quarter.
"BCE Group Entity" means, at any time, BCE Inc., Investor and
(i) any entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are, directly or indirectly, owned or
controlled by BCE Inc. at such time and (ii) any other entity that is,
directly or indirectly, controlled by BCE Inc. at such time.
"Bell International Group Entity" means, at any time, Investor
and (i) any entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are, directly or indirectly, owned or
controlled by Investor at such time and (ii) any other entity that is,
directly or indirectly, controlled by Investor at such time.
"Bell International Shareholder" means, at any time, any Bell
International Group Entity that owns shares of Capital Stock at such time.
"Board" means the board of directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks are authorized to close in Montreal, Canada or
Denver, Colorado.
"Buy-Out Price" means the purchase price for the Owned
Securities, as determined pursuant to Section 2.8(c) and (d).
"Cable Partnership" means, at any time, any partnership listed
on Schedule II hereto that is an Intercable Group Entity at such time.
"Capital Stock" means, at any time, the Common Shares, the
Class A Shares and any other shares of authorized capital stock of the Company.
"CATV Fund Fees" means cash distributions (other than MLP
Distributions and Management Fees) from the Cable Partnerships to the Company
in its capacity as general partner of the Cable Partnerships, including,
without limitation, distributions from cash flow, distributions from the sale
or refinancing of Systems owned by a Cable Partnership and distributions upon
dissolution of a Cable Partnership (whether or not such distributions are
recognized for income statement purposes).
"Class A Directors" means the members of the Board elected by
the holders of the Class A Shares.
"Class A Shares" means the shares of Class A Common Stock, par
value $0.01 per share, of the Company.
"Closing Date" means the date of this Agreement.
"Common Directors" means the members of the Board elected by
the holders of the Common Shares.
"Common Shares" means the shares of Common Stock, par value
$0.01 per share, of the Company.
"Consolidated Subsidiaries" means, at any date, those
Subsidiaries of the Company whose accounts would be consolidated with those of
the Company if consolidated financial statements were prepared as of such date
in accordance with generally accepted accounting principles.
"Control Option" means the options to purchase the Optioned
Shares pursuant to the Option Agreements.
"Convertible Debt" means the 7.5% Convertible Debentures due
June 1, 2007 of the Company.
"Core Business" means, at any time, the following lines of
business: (i) cable television services, (ii) wireline local communications
services (including exchange, access and value-added services, such as call
waiting, call forwarding and similar services) in geographic markets where
the Company or a Subsidiary of the Company owns a cable television business at
such time and (iii) physical cable or wireline delivery of multi-media
services (including inter-active services) over broadband networks in
geographic markets where the Company or a Subsidiary of the Company provides
cable television or wireline local communications services at such time.
"Core Business" does not include (A) the provision of personal communications
services (as defined by the Federal Communications Commission at 47 C.F.R.
99.5 on the date hereof), but includes the lease (or other provision) of
wireline or broadband networks used in connection with the operation of the
Core Business to providers of personal communications services and (B) the
creation, development, production, acquisition, packaging and sale (but not
physical delivery) of entertainment, informational, educational and other
programming services or software, including inter-active, multi-media and CD
ROM services.
"Debt" of the Company and its Consolidated Subsidiaries means
at any date, without duplication, (i) all obligations of such Persons for
borrowed money, (ii) all obligations of such Persons evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of all
such Persons to pay the deferred purchase price of property or services,
except trade accounts payable and current liabilities arising in the ordinary
course of business, (iv) all obligations of all such Persons as lessee which
are capitalized in accordance with generally accepted accounting principles,
(v) all Debt of others secured by a Lien on any asset of all such Persons,
whether or not such Debt is otherwise an obligation of such Persons, (vi) all
guarantees, endorsements and other contingent obligations with respect to
Debt, or to otherwise assure the owner of any of such Debt against loss with
respect thereto and (vii) obligations to repurchase assets previously sold.
"Debt" does not include any Convertible Debentures.
"Distribution" means any distribution of cash or property by
International in respect of its capital stock other than (i) the 1,589,421
shares in Bell Cablemedia plc received directly or indirectly by International
from the initial public offering of such shares, (ii) the 2,372,567 Class A
Shares held directly or indirectly by International at the date hereof, (iii)
the amount paid to or for the benefit of International pursuant to Section 2.1
of the Option Agreement between Morgan Guaranty Trust Company of New York,
acting as agent for Investor, and Jones International Grantor Business Trust
and (iv) the proceeds from the sale or disposition of such shares or amounts.
The number of shares described in the immediately preceding sentence will be
adjusted to reflect stock dividends, stock splits or similar transactions in
respect of such shares and the type of such security will be similarly
adjusted in the event a merger, recapitalization, consolidation or similar
transaction results in the issuance of other securities in respect of such
shares.
"Dollars" or "$" means United States dollars.
"Employee Options" means any options to purchase Class A Shares
granted to employees, officers or directors of the Company or any of its
Subsidiaries pursuant to any employee benefit plan (including a stock option,
stock purchase or stock bonus plan) approved by the Board.
"Event Date" means, after the Option Termination Date, the
earlier of (i) the date on which Investor's Ownership Percentage is less than
20% and (ii) the date on which the JI Group sells the Control Block to a
Control Purchaser after the Bell International Group Entities have declined to
accept an offer from a Control Purchaser pursuant to Section 2.8.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Extraordinary Dividend" means any Distribution or the fair
market value of which, when added to the sum of (i) the aggregate fair market
value of all prior Distributions made from and after the date hereof and (ii)
the aggregate amount of the Additional Costs, exceeds the Allowed Amount.
"FCC" means the Federal Communications Commission or its
successor.
"Financial Services Agreement" means the Financial Services
Agreement dated as of the date hereof between the Company and Jones Financial
Group, Inc.
"Franchise Agreement" means any franchise, agreement, permit,
license or other authorization granted by any Governmental Authority organized
within the United States of America, including all laws, regulations and
ordinances relating thereto, which authorizes the construction or operation of
a System or the reception and transmission of signals by microwave, and shall
include, without limitation, all FCC licenses and all certificates of
compliance, if any, and cable television registration statements (or similar
documents) which are required to be issued by or filed with the FCC.
"Governmental Authority" means any local, county, state,
commonwealth, federal or foreign court, judicial, executive, or legislative
instrumentality, or any agency, authority, commission, board or official
thereof, including, without limitation, any franchising authority.
"Grantors" means the grantors under the Option Agreements.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Intercable Group" means, at any time, the Company and each
Person that is a Subsidiary of the Company at such time.
"Intercable Group Entity" means, at any time, each Person
included in the Intercable Group at such time.
"Interest Income" means, for any period, the sum of interest
paid to the Company with respect to (a) deferrals of Management Fees or
Allocated Expenses owed to the Company, (b) loans and advances made by the
Company to the Cable Partnerships and (c) cash on deposit in interest bearing
accounts.
"Investor Nominee" means any nominee designated to the Board by
Investor pursuant to Section 2.2(a)(i) and 2.3(ii) (which does not include any
Joint Nominee).
"Investor's Ownership Percentage" means, at any time, the ratio
of (i) the aggregate number of shares of Capital Stock owned by Investor and
the other Bell International Group Entities (and, in the case of calculations
pursuant to Section 3.12(a), any other BCE Group Entity) at such time to (ii)
the aggregate number of shares of Capital Stock outstanding at such time, in
each case calculated on a fully diluted basis and assuming the conversion of
all securities convertible or exchangeable into shares of Capital Stock and
the exercise of all options, warrants and other rights to acquire shares of
Capital Stock, whether or not vested. In the case of sales or issuances of
New Securities, Investor's Ownership Percentage will be calculated immediately
preceding such sale or issuance.
"JI Group" means, at any time, Jones, International, each
grantor under the Option Agreements and each other Person that is a Subsidiary
of Jones or International at such time, other than any Person that is an
Intercable Group Entity at such time.
"JI Group Entity" means, at any time, each Person included in
the JI Group at such time.
"JI Shareholder" means, at any time, any JI Group Entity that
owns shares of Capital Stock at such time.
"Jones" means Glenn R. Jones, a resident of Colorado, or in the
event he is not then alive or legally competent, his executor, the
administrator of his estate or his legal representative (including, without
limitation, his guardian, conservator or other similar fiduciary).
"Jones Employment Agreement" means the Employment Agreement
dated as of the date hereof between Glenn R. Jones and the Company.
"Jones Family Member" means any member of the immediate family
of Glenn R. Jones (as defined in Rule 16a-1 under the Exchange Act), or a
trust for the benefit of such members.
"Jones Nominee" means any nominee designated to the Board by
Jones pursuant to Section 2.3(i) (which does not include any Joint Nominee).
"Lien" means, with respect to any property or asset, any
mortgage, lien, pledge, charge, security interest, encumbrance or other
adverse claim of any kind in respect of such property or asset. For the
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any property or asset which it has acquired or holds subject to the interest
of a vendor or lessor under any conditional sale agreement, capital lease or
other title retention agreement relating to such property or asset.
"Management Fees" means, for any period, management fees earned
by the Company and its Consolidated Subsidiaries during such period for
management services provided to the Cable Partnerships pursuant to the terms of
the relevant partnership agreements.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect on the financial condition, business, assets or
results of operations of such Person and its Subsidiaries, taken as a whole.
"MLP Distributions" means, for any period, the cash
distributions made by Jones Intercable Investors, L.P. to the Company in
respect of the Class A Units owned by the Company.
"Net Debt" means, at any time, Debt at such time, less cash and
cash equivalents of the Company and its Consolidated Subsidiaries at such time.
"New Securities" means any shares of Capital Stock, and
securities of any type whatsoever that are, or may become, exercisable to
purchase, or convertible or exchangeable into, shares of Capital Stock, in
each case that are issued after the date hereof, provided that "New
Securities" does not include Employee Options.
"Option Agreements" means the Option Agreements dated as of the
Closing Date between Morgan Guaranty Trust Company of New York, acting as
agent for Investor, and each of Jones International Grantor Business Trust,
Glenn Jones Grantor Business Trust, Jones Space Segment, Inc., Jones Global
Group, Inc., Jones Interdigital, Inc. and Jones Entertainment Group, Ltd.
"Option Period" means the period from the date hereof to the
Option Termination date.
"Option Termination Date" means the earlier of (i) the date on
which the Control Option terminates pursuant to Section 3.6 of the Option
Agreements, or otherwise, or (ii) the date on which Investor (or its agent)
purchases the Optioned Shares pursuant to the Option Agreements.
"Optioned Shares" means the Common Shares subject to the Option
Agreements.
"Owned System" means any System that is owned and operated by
an Intercable Group Entity other than a Cable Partnership.
"Permitted Amount" means, at any date, the product of (i) seven
and (ii) Annualized Operating Cash Flow for the most recently ended fiscal
quarter of the Company prior to, or on, such date.
"Permitted Equity Issuances" means sales by the Company prior
to, but not at, the Commitment Termination Time of Class A Shares for cash
where the proceeds from any such sale will be used to finance the purchase by
the Company (or its Subsidiary) of any System owned by a Cable Partnership.
"Person" means an individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Related Agreements" means the Financial Services Agreement,
the Jones Employment Agreement, the Supply and Services Agreement and the
Secondment Agreement.
"SEC" means the Securities and Exchange Commission.
"Secondment Agreement" means the Secondment Agreement dated as
of the date hereof between Investor and the Company.
"Securities Act" means the Securities Act of 1933 as amended,
and the rules and regulations promulgated thereunder.
"Shareholder" means, at any time, any Bell International
Shareholder or JI Shareholder at such time.
"Shareholder Nominees" means the Jones Nominees, Investor
Nominees and Joint Nominees.
"Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of May 31, 1994, as amended on October 20, 1994, between Investor and
the Company.
"Subsidiary" means, as to any Person, (i) any entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are, directly or indirectly, owned or controlled by such Person,
(ii) any partnership of which such Person is, directly or indirectly, a
general or managing partner and (iii) any other entity that is, directly or
indirectly, controlled by such Person. By way of example, the parties hereto
acknowledge that (i) Glenn R. Jones and International are not Subsidiaries of
any Intercable Group Entity and (ii) BCE Inc. is not a Subsidiary of Investor.
"Subsidiary Securities" means any shares of capital stock of a
Subsidiary of the Company, and securities of any type whatsoever that are, or
may become, exercisable to purchase, or convertible or exchangeable into,
shares of such capital stock.
"Supply and Services Agreement" means the Supply and Services
Agreement dated as of the date hereof between Investor and the Company.
"System" means a cable television or SMATV system owned or
operated by an Intercable Group Entity serving subscribers within a
geographical area covered by one or more Franchise Agreements from the same
head end facility (or two or more related head end facilities).
"Taxes" means, for any Person, taxes, assessments, or other
governmental charges or levies imposed upon such Person, its income or any of
its properties, franchises or assets.
"Transfer" means, with respect to any securities, any direct or
indirect sale, assignment, transfer, grant of a participation in, pledge, gift
or other disposition thereof, without regard to whether such disposition is for
consideration.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
---- -------
Additional Costs 5.8
Agreed Rate 3.5
Commitment Termination Time 3.1
Control 5.8
Control Block 2.8
Control Purchaser 2.8
Convertible Debenture 3.1
Distributor 3.5
Eligible Assignee 7.1
Independent Director 2.2
Investor Programming 3.5
Joint Nominee 2.2
Jones Programming 3.5
Major Financing Transaction 5.8
Market Value 3.8
New Programming 3.5
Offer Period 4.2
Offer Price 4.2
Offered Shares 4.2
Offering Party 3.3
Offeror 4.2
Opportunity 3.3
Owned Securities 2.8
Programmer 3.5
Proposed Price 4.3
Purchase Conditions 3.8
Purchase Notice 4.2
Purchase Number 4.3
Purchaser 4.3
Purchase Offer Notice 4.3
Qualifying Merger 3.12
Qualifying Tender Offer 3.12
Restricted Business 7.1
Rights Notice 3.8
Sale Notice 4.3
Sale Offer Notice 4.2
Special Issue 3.8
Trigger Date 3.8
Unrelated Directors 3.6
Validating Distributor 3.5
Validating Programming
Agreement 3.5
Validation Periods 3.5
(c) All accounting determinations hereunder shall be made,
and all financial calculations required to be made hereunder shall be
prepared, in accordance with generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with the most recent
audited consolidated financial statements of the Company and its Consolidated
Subsidiaries.
ARTICLE II
GOVERNANCE OF THE COMPANY
2.1. Board of Directors. (a) The Board shall consist of 13
directors: nine members of the Board will be Common Directors and four
members of the Board will be Class A Directors. Such directors will be
nominated, elected and removed in accordance with the articles of
incorporation and bylaws of the Company and the terms of this Agreement.
(b) The Board shall have an executive committee, an audit
committee and a compensation committee. Except to the extent required by
applicable law, Investor will be entitled to have at least one Investor
Nominee on each committee of the Board at all times.
(c) The Company will use reasonable efforts to obtain and
maintain in effect $25,000,000 of directors and officers liability insurance
coverage for any period in which an Investor Nominee, Jones Nominee or a Joint
Nominee is a member of the Board, provided that such insurance may be obtained
at reasonable cost. In the event the Company believes such insurance cannot
be obtained at reasonable cost, the Company will consult with Investor as to an
appropriate replacement policy.
2.2. Class A Directors. (a) The parties hereto agree that
the four Class A Directors will be designated as follows:
(i) Investor will be entitled, but not required, to
designate one director, and
(ii) Jones and Investor will designate three directors
that are each an Independent Director mutually acceptable to both
parties (each a "Joint Nominee").
(b) An "Independent Director" is a person who is free from any
relationship that would interfere with the exercise of independent judgment by
such person as a member of the Board. Without limiting the generality of the
foregoing, unless the Board has unanimously determined otherwise, a person
will not be an Independent Director if such person:
(i) is, or has been, a director or officer of, employed
by or a consultant to, any Intercable Group Entity, JI Group Entity
or BCE Group Entity, provided that this provision does not apply to
Independent Directors that are elected for successive terms of office,
(ii) is, or since January 1, 1993 has been, an officer,
director, general partner or more than 5% shareholder (by either vote
or value) of a Person that has, or since January 1, 1993 has had, a
material business relationship with any Intercable Group Entity, JI
Group Entity or BCE Group Entity,
(iii) is, or has been, a more than 5% shareholder (by
either vote or value) of any Intercable Group Entity, JI Group Entity
or BCE Group Entity, or is an officer or director of any such
shareholder, or
(iv) is a member of the immediate family (as defined in
Rule 16a-1 under the Exchange Act) of any person described in clauses
(i), (ii) or (iii).
2.3. Common Directors. The parties hereto agree that the nine
Common Directors will be designated as follows:
(i) Jones will be entitled, but not required, to
designate seven directors, and
(ii) Investor will be entitled, but not required, to
designate two directors.
2.4. Nomination and Vacancies. (a) In the event that
Investor or Jones chooses to designate one or more nominees to the Board
pursuant to Article II, the Company will use its reasonable efforts to (i)
include each such nominee in the group of nominees proposed by management of
the Company for election to the Board, (ii) recommend to the shareholders of
the Company each such nominee's election to the Board and (iii) solicit
proxies for each such nominee from all holders of voting securities entitled
to vote thereon.
(b) In the event that any Shareholder Nominee vacates his seat
on the Board, whether by resignation, death, removal or otherwise, the Board
will as promptly as practicable hold a meeting of the Board and, subject to its
fiduciary duties, will fill any such vacancy with a person designated by the
Shareholder (or Shareholders in the case of a Joint Nominee) entitled to
designate such Shareholder Nominee, provided that if such Shareholder Nominee
was an Independent Director, such designated person must also be an
Independent Director.
2.5. Certain Shareholder Agreements. (a) Each Bell
International Shareholder will vote or cause to be voted all shares of Capital
Stock owned or controlled by it at any regular or special meeting of
shareholders of the Company, or in any written consent executed in lieu of such
a meeting of shareholders,
(i) in favor of any Jones Nominees and Joint Nominees
designated as provided in this Article II,
(ii) to remove any Jones Nominee (with or without cause)
requested to be removed by Jones pursuant to Section 2.4, and
(iii) to seek the election of such number of Jones Nominees
as is necessary to constitute a majority of the members of the Board.
(b) Each JI Shareholder will vote or cause to be voted all
shares of Capital Stock owned or controlled by it at any regular or special
meeting of shareholders of the Company, or in any written consent executed in
lieu of such a meeting of shareholders,
(i) subject to Section 2.5(a)(iii), in favor of any
Investor Nominees and Joint Nominees designated as provided in this
Article II,
(ii) to remove any Investor Nominee (with or without
cause) requested to be removed by Investor pursuant to Section 2.4,
and
(iii) to cause the Company to comply with the provisions of
Section 2.6.
(c) Each Shareholder will cause all shares of Capital Stock
owned or held of record by it to be represented, in person or by proxy, at all
meetings of shareholders of the Company of which such Shareholder has actual
notice, so that such shares of Capital Stock may be counted for the purpose of
determining the presence of a quorum at such meetings.
(d) Without the written consent of Jones no Bell International
Shareholder will, and without the written consent of Investor no JI
Shareholder will, (i) solicit any proxies or consents in connection with any
matter to be voted upon, or sought to be voted upon, by the shareholders of
the Company except in accordance with the terms of this Agreement or the
approval of the Board, (ii) become a participant in any such solicitation or
(iii) except as contemplated by this Agreement, become a part of a voting
group or deposit shares in a voting trust. The provisions of the immediately
preceding sentence will terminate (x) as to Bell International Shareholders on
the Option Termination Date if Investor (or its agent) purchases the Control
Option under the Option Agreements and (y) as to JI Shareholders on the Option
Termination Date if Investor (or its agent) does not purchase the Control
Option under the Option Agreements. Nothing herein shall restrict any
Shareholder from granting revocable proxies in connection with meetings of
shareholders of the Company.
2.6. Investor Consent Rights. (a) Subject to the provisions
of Section 2.7, the Company will not take or agree to take, and will not
permit any Subsidiary to take or agree to take, directly or indirectly, any of
the following actions without the prior written consent of Investor or
pursuant to the procedures described in paragraph (c) below:
(i) authorize, sell, distribute or otherwise issue, or
grant rights with respect to, New Securities, Employee Options or
Subsidiary Securities (or any stock appreciation or similar interests
or rights with respect to such securities) except for (A) routine
grants of Employee Options (or stock appreciation rights) approved
after the date hereof by the compensation committee of the Board in
an amount not to exceed options to purchase (and stock appreciation
rights in respect of) 2,000,000 Class A Shares in the aggregate, (B)
any grant of options pursuant to Section 4 of the Jones Employment
Agreement, (C) any issuances of Capital Stock pursuant to the terms
of Employee Options or the Convertible Debt and the Convertible
Debentures and the options granted pursuant to Section 4 of the Jones
Employment Agreement, (D) authorizations, sales, distributions or
other issuances of Subsidiary Securities to Persons that are
wholly-owned Intercable Group Entities (except in connection with
sales of Subsidiary Securities permitted by subparagraphs (v) and
(vi) of this Section 2.6), and (E) Permitted Equity Issuances,
(ii) repurchase, redeem or exchange any shares of Capital
Stock, other than (A) repurchases, redemptions or exchanges of Class
A Shares where all holders of Class A Shares are entitled to
participate on a pro rata basis, (B) repurchases of Class A Shares
in the open market, provided that at any time the aggregate number of
Class A Shares repurchased during the immediately preceding 12 months
may not exceed 5% of the aggregate number of shares of Capital Stock
outstanding on the immediately preceding December 31 (calculated on a
fully diluted basis assuming the conversion of all options and the
exercise of other rights), and (C) as contemplated by the terms of any
New Securities,
(iii) amend the articles of incorporation or bylaws of the
Company,
(iv) (A) in the case of the Company and its Consolidated
Subsidiaries, incur Debt if after the incurrence of such Debt, Net
Debt would exceed the Permitted Amount and (B) in the case of the
Cable Partnerships, incur long-term Debt not in the ordinary course
of business,
(v) acquire or sell any interest in a cable television
system that is not owned by a Cable Partnership for a purchase price
exceeding $50,000,000 in any single transaction (or series of related
transactions), and $250,000,000 in the aggregate for acquisitions and
$250,000,000 in the aggregate for sales,
(vi) acquire or sell any interest in a business (other
than a cable television system) for a purchase price exceeding
$5,000,000 in any single transaction (or series of related
transactions), and $50,000,000 in the aggregate for acquisitions and
$50,000,000 in the aggregate for sales,
(vii) enter into (whether by acquisition or otherwise) a
line of business other than (A) the Core Business in the United
States of America, England and Spain, (B) the provision of audio
programming services to radio stations and cable television systems,
(C) manufacturing and marketing of computer and facsimile security
products and software, and the manufacture of printed circuit board
assembly using surface mount or through-hole technology for the
computer, communications, business equipment, finance, medical and
scientific industries, (D) the acquisition and distribution of
entertainment, informational, educational and other programming
services in connection with the provision of cable television or
multi-media services to customers of a System and (E) the provision
of local origination programming services to customers of a System
(whether required by a Franchise Agreement or otherwise),
(viii) take any action that would reasonably be expected to,
as a result of a law, rule or regulation of a Governmental Authority
organized within the United States of America, England or any other
jurisdiction where the Intercable Group conducts a material portion
of its business, (A) prevent Investor (or its agent) from exercising
the Control Option or from otherwise obtaining control of the
Company, (B) require Investor (or its agent) to divest or otherwise
limit Investor's (or its agent's) ability to exercise full rights of
ownership over the Control Option or any shares of Capital Stock
(whether acquired upon exercise of the Control Option or otherwise)
or (C) require, after the exercise of the Control Option, the
Intercable Group to divest any material business or assets or impose a
material limitation on the conduct of Intercable Group's business,
provided that (1) if on the date hereof the activities conducted by
any BCE Group Entity are subject to any such law, rule or regulation
(based on interpretations in effect on the date hereof) that has, or
would reasonably be expected to have, one or more of the effects
described in clauses (A), (B) or (C), or if after the date hereof
Investor or any of its Affiliates enters into a new line of business
and at such time there is a law, rule or regulation that has, or
would reasonably be expected to have, one or more of the effects
described in clauses (A), (B) or (C), then in each case this
subparagraph (viii) will not apply to actions of the Intercable Group
that would reasonably be expected to have such effects under such
law, rule or regulation, (2) after the Option Termination Date this
subparagraph (viii) will only apply to actions that would reasonably
be expected to require Investor to divest, or otherwise limit its
ability to exercise full rights of ownership over, any shares of
Capital Stock, (3) the Company shall not be in breach of this clause
(viii) in matters relating to Franchise Agreements and material
contracts if it is in compliance with its obligations under Section
5.2 concerning such matters and (4) in the case of clauses (A) and
(B) the effect of any such action must be due to the business or
assets of Investor or its Affiliates (and not an agent thereof).
(ix) (A) sell substantially all of the assets of the
Company, (B) adopt a plan of liquidation or dissolution of the
Company, (C) engage in a merger, consolidation, share exchange or
other business combination involving the Company (except in connection
with an acquisition for cash that is permitted by subparagraphs (v)
and (vi) of this Section 2.6), (D) engage in a recapitalization,
stock split or similar reconstitution of the Capital Stock or (E)
file a petition by or on behalf of the Company or any Subsidiary, or
the taking of similar action, under any bankruptcy, insolvency,
reorganization or similar law,
(x) declare or make any provision for payment of, or
the setting aside of assets with respect to, any dividend or other
distribution of any property other than cash by the Company with
respect to any shares of Capital Stock, and
(xi) agree to, or enter into, any amendment to a Related
Agreement.
(b) For purposes of this Section 2.6, transactions occurring
after the date of the Stock Purchase Agreement will count towards any amounts
described in paragraph (a) above, provided that any transaction approved by
Investor pursuant to the Company's request will not count towards the
aggregate transaction amounts described in subparagraphs (v) and (vi) of such
paragraph (a).
(c) If the Company wishes to take an action described in
paragraph (a) of this Section 2.6, the Company will deliver to Investor a
written notice describing in reasonable detail the action proposed to be taken
and expressly requesting Investor's consent to such action pursuant to this
Section 2.6. Such notice will be accompanied by such additional information
as is reasonably required to enable Investor to evaluate such proposed action.
Upon receipt of such notice, Investor will have ten Business Days to exercise
its right not to consent to such proposed action. If no response is received
by the Company from Investor prior to the expiration of such time period, the
proposed action will be deemed to have been approved by Investor.
(d) The parties hereto acknowledge that the provisions of
paragraph (a) above are not intended to apply to JI Group Entities.
2.7. Termination of Rights. (a) The rights and obligations
in this Article II will terminate as provided in this Section 2.7 and in
Section 7.1.
(b) If at any time prior to the Option Termination Date (x)
Investor and the other Bell International Group Entities own in the aggregate
less than 10,000,000 shares of Capital Stock (adjusted for stock splits and
stock dividends declared after the date hereof) and (y) Investor's Ownership
Percentage is less than 15%, then:
(i) Investor's right to designate the Joint Nominees
pursuant to Section 2.2(a)(ii) and two Common Directors pursuant to
Section 2.3 will terminate, and after such time Investor will have
the right to designate only one Class A Director pursuant to Section
2.2(a)(i); and
(ii) the consent rights of Investor described in Section
2.6(a) will terminate except as to the matters described in clauses
(iii), (viii) and (ix) thereof.
(c) Upon the occurrence of an Event Date, until such time as
Investor's Ownership Percentage is less than 15%:
(i) Investor's right to designate the Joint Nominees
pursuant to Section 2.2(a)(ii) and one Common Director pursuant to
Section 2.3 will terminate, and after such time Investor will have
the right to designate only one Class A Director pursuant to Section
2.2(a)(i) and one Common Director pursuant to Section 2.3; and
(ii) the consent rights of Investor described in Section
2.6(a) will terminate except as to the matters described in clause
(viii) thereof.
(d) If at any time after the Option Termination Date
Investor's Ownership Percentage is less than 15%, but equal to or greater than
10%, then:
(i) in addition to the termination provisions described
in subparagraph (c)(i) above, Investor's right to designate a second
Common Director pursuant to Section 2.3 will terminate, and after such
time Investor will have the right to designate only one Class A
Director pursuant to Section 2.2(a)(i); and
(ii) the consent rights of Investor described in Section
2.6(a) will terminate except as to the matters described in clause
(viii) thereof.
(e) If Investor (or its agent) does not purchase the Optioned
Shares pursuant to the Option Agreements, then:
(i) until such time as the JI Group Entities own in the
aggregate less than a majority of the outstanding Common Shares,
Jones will be entitled to designate all Common Directors that are not
designated by Investor pursuant to this Article II (and after such
time such directors will be nominated without regard to this
Agreement), and
(ii) until such time as Investor's right to designate the
Joint Nominees terminates pursuant to Section 2.7(c), Jones will be
entitled to designate the Joint Nominees pursuant to Section
2.2(a)(ii) (and after such time such directors will be designated
without regard to this Agreement).
2.8 Tag-Along Right and Third Party Offers. (a) Subject
to the transfer rights of JI Shareholders under Section 4.1(c), after the
Option Termination Date but prior to the eighth anniversary of the date
hereof, the JI Group Entities will not sell (or enter into an agreement or
option to sell), directly or indirectly, in one transaction or a series of
related transactions, a majority of the then outstanding shares of Common
Stock (the "Control Block") to a Person that is not a JI Group Entity (the
"Control Purchaser"), unless (i) the Control Purchaser agrees to be bound by
the terms of this Agreement as a JI Shareholder or (ii) prior to any such sale
such Control Purchaser offers to purchase for cash all (but not less than all)
of the shares of Capital Stock, and other debt or equity securities, issued by
the Intercable Group Entities to, and then held by, the Bell International
Group Entities (the "Owned Securities") at the Buy-Out Price pursuant to the
procedures of this Section 2.8.
(b) After the eighth anniversary of the date hereof, if the
JI Group Entities sell, directly or indirectly, in one transaction or a series
of related transactions, the Control Block to a Control Purchaser, prior to
any such sale such Control Purchaser may, but is not required to, offer to
purchase for cash all (but not less than all) of the Owned Securities at the
Buy-Out Price.
(c) A Control Purchaser that offers to purchase the Owned
Securities for the Buy-Out Price pursuant to this Section 2.8 will deliver a
written offer notice to Investor. After the delivery of such notice, the
Control Purchaser and Investor will attempt to negotiate a Buy-Out Price that
is mutually satisfactory. If in connection with the purchase of the Control
Block the Control Purchaser (or an Intercable Group Entity) is also offering
to purchase from the public any class of Owned Securities, the Buy-Out Price
for such Owned Securities will be such offer price.
(d) If the Control Purchaser and Investor are unable to agree
on a mutually satisfactory Buy-Out Price, the Control Purchaser and the
relevant JI Group Entity will make a public announcement that the Control
Purchaser is negotiating to purchase the Control Block. In such event, the
Buy-Out Price for each class of Owned Securities will be equal to the Market
Value of such class of Owned Securities, calculated pursuant to Section 3.8(h)
and (i) and assuming that the Trigger Date is the tenth trading day immediately
after the day of such public announcement
(e) After the Market Value of each class of Owned Securities
has been determined, if the Control Purchaser wishes to proceed with the
proposed transaction to purchase the Control Block and the Owned Securities,
it will (or after the eight anniversary of the Closing Date, it may), by
written notice to Investor, irrevocably offer to purchase all of the Owned
Securities at the Buy-Out Price. If Investor fails to deliver a written
acceptance notice within 10 Business Days after receipt of such written offer
from the Control Purchaser, Investor will be deemed to have declined an offer
from a Control Purchaser, including for purposes of determining whether an
Event Date has occurred.
(f) The purchase and sale of the Owned Securities will take
place simultaneously with the purchase of the Control Block. The purchase
price for the Owned Securities purchased pursuant to this Section 2.8 will be
paid by wire transfer in immediately available funds to a bank account
designated by the relevant Bell International Group Entity not less than three
Business Days prior to closing.
(g) At any closing hereunder, the relevant Bell International
Group Entity will deliver to the Control Purchaser good and valid title to the
Owned Securities, free and clear of any Lien.
ARTICLE III
COVENANTS
3.1. Investment Commitment. (a) Investor will purchase for
cash 30% of any Class A Shares sold by the Company to unaffiliated third
parties after the date hereof, at a price per share equal to the price per
share received by the Company from such third parties in connection with any
such sales (net of selling commissions and underwriter's discounts), provided
that the obligation of Investor under this Section 3.1 will terminate at such
time (the "Commitment Termination Time") as the aggregate purchase price of
all equity securities, and securities that are convertible or exchangeable
into equity securities (including any Convertible Debentures), purchased by the
Bell International Group Entities from the Company or any Intercable Group
Entity prior to, on or after the date hereof (including any New Securities
purchased pursuant to this Section 3.1) equals $400,000,000. The parties
hereto acknowledge that after taking into account the purchase of 2,500,000
Class A Shares on March 25, 1994 pursuant to the Investment Agreement dated as
of such date between the Company and Investor, and 7,414,300 Class A Shares on
the date hereof pursuant to the Stock Purchase Agreement, the Bell
International Group Entities have purchased from the Company Class A shares
having an aggregate purchase price of $258,893,250, and that Investors's
remaining investment commitment is $141,106,750.
(b) In the event the Company proposes to offer and sell any
Class A Shares prior to the termination of the purchase commitment described
in paragraph (a), it will give Investor not less than ten Business Days'
written notice of its intention, describing the material terms of the proposed
sale, including the manner of sale and a range of proposed prices and numbers
of Class A Shares to be sold to unaffiliated third parties and to Investor.
The Company will deliver to Investor copies of all prospectuses and other
related offering and closing documents prepared by the Company and its
advisors in connection with the proposed sale and will keep Investor informed
as to material developments during the offering process. The closing for the
purchase and sale of any Class A Shares purchased by Investor pursuant to this
Section 3.1 will take place on the later to occur of (i) the date on which
such third parties purchase Class A Shares, (ii) the date on which the Purchase
Conditions have been satisfied, or waived by Investor in its sole discretion
(provided that if Investor has not purchased the Class A Shares 40 days after
the third party closing, the Company may sell such shares to a third party) or
(iii) such other time as Investor and the Company agree. Except as otherwise
contemplated by this Agreement, any Class A Shares purchased by Investor under
this Section 3.1 will be purchased pursuant to the same terms and conditions
as the unaffiliated third parties.
(c) At Investor's request, Investor may purchase for
$50,000,000 in cash a Convertible Debenture, provided that the Company may
postpone such purchase until such time as it wishes to sell any New
Securities. For purposes of this Section 3.1, "Convertible Debenture" means a
convertible unsecured subordinated debenture of the Company having terms and
conditions that would be obtained from the Company by an unaffiliated
institutional investor at the time of such purchase pursuant to a public
offering (such terms and conditions to be mutually agreed by the parties),
provided that (i) such debenture will convert automatically into Class A
Shares two years after the date of issuance, unless earlier converted at the
option of the holder and (ii) the indenture relating to such debenture will
contain the consent rights set forth in Section 2.6 and the termination
provisions set forth in Sections 2.7 and 7.1.
3.2. Consultation on Business Strategies. (a) The Company
will regularly advise and consult with Investor as to the business of the
Company and its Subsidiaries, which consultation will include the review of
(i) strategic, operating and financial plans, including plans for acquisitions
and sales of cable television systems (both as they relate to owned and
managed systems), (ii) equity, debt, joint venture and other financing
strategies, (iii) business plans for operations, marketing and technology
deployment and (iv) personnel, compensation and related decisions.
(b) Each year, management of the Company will present to the
Board for approval a business plan that includes the elements described in
paragraph (a) of this Section 3.2.
3.3. Obligation to Refer Business Opportunities. (a) Subject
to the provisions of this Section 3.3, each of Investor, Jones and
International will refer, and will cause each of their Subsidiaries to refer,
to the Company business opportunities in the following lines of business:
(i) any business that is primarily engaged in a Core
Business in the United States of America at such time,
(ii) any business that is primarily engaged in wireline
local communications services (including exchange, access and
value-added services, such as call waiting, call forwarding and
similar services) in geographic markets in the United States where the
Company does not own or operate a cable television or wireline local
communications business at such time, and has a fair market value
less than the then market capitalization (equity and long-term debt)
of the Company at such time, and
(iii) such other businesses as may be agreed in writing by
Investor and Jones from time to time.
The parties hereto acknowledge that the foregoing businesses do not include
(x) inter-active or multi-media services, or programming networks or (y)
competitive access provider services similar to those provided by Jones
Lightwave, Ltd. and its Subsidiaries.
(b) Investor, Jones and International will not, and will cause
each of their Subsidiaries not to, purchase, finance or otherwise participate
in the acquisition of a business described in paragraph (a) of this Section
3.3 (an "Opportunity") without first complying with the following procedures:
(i) The Person referring the Opportunity (an "Offering
Party") will notify the Company of the Opportunity, and deliver to
the Company a report setting forth in reasonable detail the material
terms and conditions of such Opportunity.
(ii) The Company will then promptly convene a special
meeting of the Board to consider whether the proposed Opportunity is
in the best interests of the Company.
(iii) If the Board determines that the Company should
pursue the Opportunity, the Company will so notify the Offering Party
(and each of Jones and Investor), and thereafter none of the Offering
Party, any Bell International Group Entity (or a Subsidiary thereof)
nor any JI Group Entity will pursue, or participate in, such
Opportunity, provided that the Offering Party will be free to pursue,
or participate in, such Opportunity if (A) the Company is unable to
raise financing in respect of such Opportunity (unless the Offering
Party is a Bell International Group Entity (or a Subsidiary thereof)
and Investor exercised its consent rights under Section 2.6 in
respect of any such proposed financing, in which case the Offering
Party may not pursue or participate in such Opportunity), (B) the
Company is unable to pursue or participate in such Opportunity
because a law, rule or regulation of a Governmental Authority
prevents (or materially restricts) the participation by the
Intercable Group in such Opportunity or (C) the Company otherwise
subsequently elects not to pursue, or participate in, such
Opportunity. Nothing in this subparagraph (iii) will affect the
consent rights of Investor in Section 2.6.
(iv) If the Board fails to approve the pursuit by the
Company of an Opportunity or the Company otherwise elects not to
pursue such Opportunity, the Offering Party will be free to pursue
such Opportunity without any further obligation to the Company,
provided that the Offering Party may not pursue, or participate in,
any such Opportunity if (A) the Offering Party is a Bell
International Group Entity (or a Subsidiary thereof) and Investor
exercised its consent rights under Section 2.6 in respect of such
Opportunity or (B) the Offering Party is a JI Group Entity and a
majority of the Jones Nominees that are not Independent Directors
voted against the pursuit by the Company of such Opportunity.
(c) Each Shareholder agrees to keep confidential (as provided
in Section 3.10) any Opportunities that it receives notice of pursuant to this
Section 3.3. If an Offering Party is permitted to pursue an Opportunity
pursuant to this Section 3.3, Shareholders that are not Affiliates of such
Offering Party, and Subsidiaries of such Shareholders, will not be permitted
to pursue, or participate in, such Opportunity unless they lawfully acquire
knowledge of such Opportunity from sources other than the Offering Party or an
Affiliate of such Offering Party. In the event an Opportunity is offered by a
Bell International Group Entity (or a Subsidiary thereof), and Investor elects
to exercise its consent rights under Section 2.6 in respect of such
Opportunity, the JI Group Entities will be free to pursue such Opportunity.
(d) The Company will use reasonable efforts to keep Investor
and Jones informed as to the geographic markets served by the cable television
and wireline local communications businesses owned or operated by the
Intercable Group Entities.
(e) The provisions of this Section 3.3 will terminate on the
Option Termination Date.
3.4. Supplier Arrangements. The Company will give Investor,
International and their respective Affiliates the first opportunity to supply
services, compatible network equipment and systems to the Company on
competitive terms and conditions which will, at the Company's discretion, be
made pursuant to competitive bidding or other processes. Nothing herein will
adversely affect the Company's ability to obtain services, equipment and
systems on open and competitive terms.
3.5. Programming Services. Notwithstanding any other
provision in this Agreement to the contrary: (a) The JI Group Entities shall
have the right to distribute, on a full-time (or, if requested from time to
time by Jones or International, part-time, to be extended or restored, as
applicable, to full-time upon his or its request), daily basis, programming
packaged (as opposed to brokered) by, created by or created primarily for a JI
Group Entity ("Jones Programming") on such number of channels (not to exceed
six at any one time) on the Systems as Jones or International may designate
from time to time (with the Mind Extension University programming to be
carried on a VHF channel (i.e., channel 2 through 12)). The Bell
International Group Entities shall have the right to distribute, on a
full-time (or, if requested from time to time by Investor, part-time to be
extended or restored, as applicable to full time upon Investor's request),
daily basis, programming packaged (as opposed to brokered) by, created by or
created primarily for a Bell International Group Entity ("Investor
Programming") on such number of channels (not to exceed two at any one time)
on the Systems as Investor may designate from time to time.
(b) Prior to exercising its distribution right with respect to
any programming under this Section 3.5, the relevant JI Group Entity or Bell
International Group Entity (each a "Programmer") will present to the Board a
reasonably detailed business plan that, among other things, describes (i) the
general content of such programming, (ii) the marketing strategy for such
programming, including service level (such as basic, tier or a la carte) and
(iii) pricing for such service levels. The Jones Programming and the Investor
Programming shall be carried and priced by the Intercable Group Entities on
such level or levels of services as such programming is intended to be carried
under the business plan for such programming.
(c) Notwithstanding the rights granted pursuant to paragraph
(a) above:
(i) the Intercable Group Entities shall not be required to
delete from any System any programming acquired from any third-party
programmer prior to the expiration of the term of the program carriage
agreement with such third-party programmer in order to carry any
Investor Programming or Jones Programming,
(ii) in the event there is insufficient channel capacity to
carry Jones Programming or Investor Programming, carriage of such
Jones Programming or Investor Programming on a System shall be given
priority over any third party programming not then carried by such
System and over any third party programming then carried by the
System at such time as the initial or then current renewal term, as
applicable, is scheduled to expire, provided that (x) such priority
shall not apply to off-air programming carried by the four major
broadcast networks or as mandated by law, or the 20 most widely
viewed third party programs as then carried by the System at the time
as reported by Cablevision magazine, and (y) in addition to the
foregoing requirements, the Company shall use its reasonable best
efforts to add Jones Programming and Investor Programming to the
Systems whenever opportunities to do so arise,
(iii) in the event there is insufficient channel capacity to
carry both the Jones Programming and Investor Programming, Jones
Programming will be given priority over carriage of Investor
Programming,
(iv) Jones, International and Investor, as the case
may be, shall give the Company at least four months' prior notice of
any proposed commencement or termination of use of any channel and
(v) the Bell International Group Entities shall have
no rights under this Section 3.5 to distribute programming that has
substantially similar content as any Jones Programming.
(d) During the Validation Period (as defined herein), the
license fee payable by the Intercable Group Entities for any unit of Jones
Programming (excluding Mind Extension University, Health Care Network, Jones
Computer Network and Product Information Network) or Investor Programming
("New Programming") shall be such license fee as the Programmer establishes in
good faith based on its reasonable estimate of the market value of such New
Programming. A Programmer shall notify the Company and the Independent
Directors in writing promptly following the end of the Validation Period
whether the Programmer has entered into an agreement providing for (a) the
distribution of such New Programming by a cable television operator or other
distributor of video programming (a "Distributor") having at least 400,000
subscribers ("Validating Distributor") and (b) the payment of a license fee by
such Validating Distributor at a rate equal to or greater than the license fee
payable by the Intercable Group Entities ("Validating Programming Agreement").
If no Validating Programming Agreement has been entered into during the
Validation Period, the Company or any Independent Director may, by written
notice given within sixty (60) days after receipt by the Company and the
Independent Directors of the above-referenced notification, require that such
Programmer reduce the license fee payable by the Intercable Group Entities for
such New Programming to the greater of (i) a license agreement approved by the
Independent Directors, (ii) the average license fee charged by the applicable
Programmer to all Distributors for such New Programming and (iii) the Agreed
Rate in effect at such time. For purposes of this Section 3.5, "Agreed Rate"
means, at any time, the rate set forth in the Affiliate Agreement between Mind
Extension University, Inc. and the Company dated December 28, 1993, as amended
as of June 1, 1994. Thereafter, the license fee payable by the Intercable
Group Entities for such New Programming shall be subject to such adjustments
as are similar to adjustments in the license fee permitted by the Validating
Programming Agreement or, if there is no such agreement in effect, by the
programming agreement pursuant to which such New Programming is carried by the
largest Distributor serving fewer than 400,000 subscribers. A Programmer may
elect at any time to terminate carriage of such unit of New Programming upon
not less than ninety days prior written notice to the Company if it does enter
into a Validating Programming Agreement during the Validation Period.
"Validation Period" shall mean, as to any New Programming, the fifteen (15)
month period commencing with the first month with respect to which a license
fee is payable by an Intercable Group Entity for the right to distribute such
New Programming.
(e) The Intercable Group Entities shall carry Jones
Programming and Investor Programming on the Systems for a period of 15 years
after the date hereof (or the expiration date of the applicable programming
agreement with the Company) in accordance with this Section 3.5, provided that
if Investor does not purchase the Optioned Shares pursuant to the Option
Agreements, the rights of the Bell International Group Entities will terminate
on the Option Termination Date.
(f) No JI Group Entity nor any Bell International Group
Entity may sell or assign (other than to an Affiliate) its unused right of
distribution to the Systems pursuant to this Section 3.5, provided that in the
event any Programming is being distributed pursuant to this Section 3.5, such
Programming will continue to have the distribution rights provided herein if
the relevant JI Group Entity sells or assigns (i) any network or networks
carried on a System or any such Programming or (ii) any entity directly or
indirectly owning or controlling such network(s) or Programming. In the event
of any such sale or assignment by a JI Group Entity or a Bell International
Group Entity, the continuing distribution rights of such Programming will
count towards the number of channels permitted to be designated by such JI
Group Entity or Bell International Group Entity pursuant to paragraph (a)
above.
(g) Each of Investor and International shall use reasonable
best efforts to cause its designees to the Board, subject to their fiduciary
duties under applicable law as advised by counsel, to approve the carriage by
the Intercable Group Entities of the other party's Programming in accordance
with this Section 3.5.
3.6. Transactions with Affiliates. (a) Investor acknowledges
that prior to the date hereof certain services have been provided by the
Intercable Group Entities to the JI Group Entities and by the JI Group
Entities to the Intercable Group Entities. Investor agrees that the services
described in the Affiliate Agreements or the Current SEC Filings (as defined
in the Stock Purchase Agreement) may continue to be provided for a period of
eight years following the date hereof, on terms and conditions consistent with
those described in such Current SEC Filings or as set forth in the Related
Agreements.
(b) Except for transactions described in Section 3.5 or
paragraph (a) of this Section 3.6, or undertaken pursuant to the terms of the
Related Agreements or the Affiliate Agreements, each Shareholder agrees that
neither it nor any of its Affiliates will engage in any transaction, or enter
into, amend in any material respect or renew any agreement, with an Intercable
Group Entity unless the material terms of such transaction are fully and fairly
disclosed to the Board, and approved by a majority of the Unrelated Directors.
(c) For purposes of this Agreement "Unrelated Directors"
means:
(i) in the case of a transaction or agreement between an
Intercable Group Entity and a JI Group Entity, the three Investor
Nominees and the three Joint Nominees,
(ii) in the case of a transaction or agreement between a
BCE Group Entity and an Intercable Group Entity, the directors that
are not Investor Nominees, and
(iii) in the case of a transaction or agreement among an
Intercable Group Entity, a JI Group Entity and a BCE Group Entity,
the directors that are Independent Directors.
3.7. Information. (a) The Company will permit Investor (or a
representative of Investor) to visit and inspect any of the properties of any
Intercable Group Entity, including the books of account and other records of
such Intercable Group Entity (and make copies thereof and take extracts
therefrom), and to discuss its affairs, finances and accounts with the
relevant officers and, after notice to the Company, its independent public
accountants and counsel, all at such reasonable times and as often as Investor
may reasonably request.
(b) As soon as available and in any event within 45 days
after the close of each quarterly accounting period ending after the date
hereof, the Company will deliver to Investor the consolidated balance sheet of
the Company as of the end of such quarterly period, and the related
consolidated statements of income, shareholders' equity and cash flows for
such quarterly period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly period, and in each case setting forth
comparative figures for the related periods in the prior fiscal year, all of
which shall be certified by the Chief Financial Officer of the Company to have
been prepared in accordance with generally accepted accounting principles
(subject to normal year-end audit adjustments).
(c) As soon as available and in any event within 90 days
after the close of each fiscal year of the Company, the Company will deliver
to Investor the consolidated balance sheet of the Company as of the end of
such fiscal year and the related consolidated statements of income,
shareholders' equity and cash flows for such fiscal year, in each case setting
forth comparative figures for the preceding fiscal year, and certified by
Arthur Andersen & Co., or other independent certified public accountants of
recognized national standing to have been prepared in accordance with
generally accepted accounting principles in the United States.
(d) The Company will provide Investor with such assistance as
Investor reasonably requests from officers, employees and auditors of the
Company to enable Investor to account for its investment in the Company in its
financial statements, including assistance in the calculation and presentation
of any adjustments required to reflect generally accepted accounting
principles in Canada.
(e) The Company will furnish to Investor copies of (i) all
reports, registration statements, proxy statements or other filings made by an
Intercable Group Entity with the SEC, promptly after any such filing and (ii)
all reports, notices or other written communications (other than routine
correspondence and responses to routine inquiries) sent to holders of equity
or debt securities of, or lenders to, the Company, promptly after any such
communications are sent.
3.8. Preemptive Rights. (a) The Company hereby grants to
Investor the preemptive right to purchase Investor's Ownership Percentage of
any New Securities which the Company may propose to sell or otherwise issue
from time to time (other than Class A Shares issued pursuant to any
Convertible Debt or Convertible Debentures). The procedures described in this
Section 3.8 do not apply to purchases of Class A Shares by Investor pursuant
to Section 3.1. Investor may exercise its preemptive right with respect to
any or all of the New Securities offered to Investor pursuant to this Section
3.8.
(b) In the event the Company proposes to sell or otherwise
issue any New Securities it shall give Investor not less than 30 days' prior
written notice (a "Rights Notice") of its intention, describing the material
terms of the proposed sale, including the type of New Securities proposed to
be issued, the manner of sale and a range of proposed prices and number of
shares (including over-allotments) or other securities to be sold or issued.
If the New Securities are traded, or proposed to be traded, on a national
securities exchange, the high and low end of such range will be no greater
than 110%, or lower than 90%, of the midpoint. Investor shall have 20 days
(10 days in the case of New Securities to be offered by the Company pursuant
to a shelf registration statement) from the date of receipt of a Rights Notice
to agree to purchase up to Investor's Ownership Percentage of such New
Securities, by delivery of written notice to the Company. If the Company
determines that the price or number of New Securities to be sold or issued is
not within the range specified in the Rights Notice, or that there have been
other material changes to the transaction described in the Rights Notice, the
Company will promptly deliver an amended Rights Notice to Investor, setting
forth the revised ranges for the price and number of securities to be offered,
or any other revised material terms. Investor will have 10 Business Days
after receipt of any such amended Rights Notice to agree to purchase up to its
Investor's Ownership Percentage of such New Securities, upon the revised terms
and conditions set forth in the amended Rights Notice, by delivery of a
written notice to the Company.
(c) In the case of any New Securities sold for cash, the
price for any New Securities purchased by Investor pursuant to this Section
3.8 will be the proceeds received by the Company in connection with such sale,
net of selling commissions and underwriters discounts. In the case of any
issuance of New Securities for consideration other than cash, including
issuances in connection with an acquisition of a business (a "Special Issue"),
the price at which Investor shall purchase such New Securities shall be the
Market Value of such New Securities, calculated as described in paragraph (h)
below where the applicable "Trigger Date" is the tenth trading day immediately
after the public announcement of the agreement giving rise to the Special
Issue (or if there is no public announcement the date the transaction
agreement is executed and delivered). In the case of a Special Issue,
Investor shall have five Business Days after the determination of the Market
Value to determine whether or not to purchase Investor's Ownership Percentage
of such New Securities.
(d) Except as otherwise contemplated by this Agreement, any
New Securities purchased by Investor under this Section 3.8 will be purchased
pursuant to the same terms and conditions as such New Securities are issued to
third parties, provided that so long as Investor is using its reasonable
efforts to consummate the closing promptly, Investor may postpone such closing
until such time as the Purchase Conditions have been satisfied or waived by
Investor, provided further that if such Purchase Conditions have not been
satisfied or waived within 90 days after the third party closing, Investor's
rights to purchase such New Securities hereunder will terminate and the
Company will be free to sell such New Securities without regard to Investor's
rights under this Section 3.8.
(e) In the event Investor fails to exercise its preemptive
right in accordance with the terms of this Section 3.8, the Company shall have
120 days after the latest of (i) 20 days after delivery of a Rights Notice,
(ii) 10 Business Days after delivery of an amended Rights Notice, (iii) if
applicable, the expiration of the five Business Day period described in
paragraph (c) above, or (iv), if applicable, 20 days after the expiration of
the 90 day period referred to in Section 3.8(d), to sell, or enter into an
agreement to sell (containing customary conditions), the New Securities
proposed to be sold in the Rights Notice (or the amended Rights Notice), at a
price and upon general terms no more favorable to the purchasers thereof than
specified in such notice. In the event the Company has not sold, or entered
into such an agreement to sell, such New Securities prior to or within said
120-day period, the Company shall not thereafter issue or sell any such New
Securities without first offering such securities to Investor in the manner
provided above.
(f) In the case of Employee Options granted by the Company,
Investor's preemptive rights will be exercisable following each calendar year.
Promptly after December 31 of each calendar year, the Company will deliver to
Investor a list of the Employee Options granted during such calendar year.
For a period of 30 days after receipt of such list, Investor will have the
right to purchase from the Company a number of Class A Shares equal to the
product of (i) the highest level of Investor's Ownership Percentage during the
calendar year in question and (ii) the aggregate number of Class A Shares into
which such Employee Options are exercisable. The purchase price for such
purchases of Class A Shares will be the Market Value of the Class A Shares,
calculated as described in paragraph (h) below where the applicable "Trigger
Date" is December 31 of the calendar year in question.
(g) All sales pursuant to this Section 3.8 shall be made
pursuant to arrangements reasonably determined by the Company in order to
ensure compliance with the Securities Act.
(h) For purposes of this Agreement, "Market Value" of a share
of any security means the average of the daily closing prices on the NASDAQ
National Market System (or other principal exchange on which shares of such
security is listed or approved for trading) for the shares of such security
for the 20 consecutive trading days immediately prior to the applicable
Trigger Date. The daily closing price for each such trading day shall be the
closing price, if reported, or, if the closing price is not reported, the
average of the closing "bid" and "asked" prices as reported by NASDAQ (or
other principal exchange). If the daily closing price per share of such New
Security is determined during a period following the declaration of a
dividend, distribution, recapitalization, reclassification or similar
transaction, then the Market Value shall be properly adjusted to take into
account ex-dividend trading.
(i) In the event that a New Security is not traded on a
national securities exchange, promptly after delivery of a Rights Notice
Investor and the Company shall in good faith negotiate the Market Value of
such New Security. If they are unable to reach agreement within 10 Business
Days, each of Investor and the Company shall promptly select a nationally
recognized independent investment banking firm to determine the Market Value of
such New Security. If 20 Business Days after their selection such firms
cannot agree as to such Market Value, within 10 Business Days they shall
mutually select a third nationally recognized independent investment banking
firm which shall be engaged to make such determination, which Market Value
shall be within the range of values suggested by the two investment banking
firms. Such third investment banking firm shall make such determination by
written notice to Grantor and Purchaser within 20 Business Days of its
engagement and its judgment as to all matters relating to its determination
shall be binding upon the parties hereto. Each party will pay the fees and
expenses of the initial investment banking firm hired by such party. The fees
and out-of-pocket expenses of the third investment banking firm shall be paid
equally by the Company and Investor.
(j) For purposes of this Agreement, "Purchase Conditions"
means:
(i) The waiting period (including any extension thereof
resulting from additional inquiries, if any) under the HSR Act
applicable to the purchase by Investor of the subject securities
shall have expired or been earlier terminated.
(ii) All other actions by, in respect of or filings with
any Governmental Authority required to permit the consummation of the
closing shall have been taken or obtained, as the case may be, and
shall be in full force and effect.
(iii) There shall not then be in effect any applicable
law, rule or regulation or any judgment, injunction, order or decree
that has one or more of the effects described in clauses (a), (b) or
(c) of the following paragraph (iv).
(iv) There shall not then be instituted or pending any
action or proceeding before any federal or state court or other
Governmental Authority brought by a Governmental Authority
challenging the consummation of the closing or seeking to (a) prevent
Investor (or its agent) from exercising the Control Option, (b)
require Investor (or its agent) to divest, or otherwise limit
Investor's ability to exercise full rights of ownership over, the
shares of Capital Stock owned by Investor and its Affiliates, the
Control Option or the Optioned Shares or (c) require, after the
exercise of the Control Option, the Intercable Group to divest any
material business or assets or would impose a material limitation on
the conduct of Intercable Group's business, provided that any actions
or proceedings having the effect described in clause (a) or (b) will
be based on the business or assets of Investor or its Affiliates (and
not an agent thereof).
(v) The Intercable Group Entities shall have received
all material third party consents, if any, required to be obtained in
connection with the closing, in each case in form and substance
reasonably satisfactory to Investor.
3.9. Registration Rights. The Company grants to Investor and
each other BCE Group Entity that has agreed to be bound by the terms of this
Agreement the registration rights set forth in Exhibit A, which registration
rights apply to all shares of Capital Stock owned by Investor and any BCE
Group Entity (including the 2,500,000 shares described in the first Whereas
clause). If Investor exercises the Control Option, the Company will grant to
the JI Group Shareholders registration rights on the same terms and conditions
as the rights set forth in Exhibit A. The Registration Rights Agreement dated
as of March 25, 1994 between Investor and the Company is hereby terminated.
3.10. Confidentiality. Each party to this Agreement will hold
in confidence and not use, and will use its reasonable efforts to cause its
respective Affiliates, shareholders, officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold in confidence
and not use, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all documents and information
received from the other parties to this Agreement (and Affiliates of such
other parties) in connection with any information exchange contemplated by
this Agreement, except to the extent that such information can be shown to
have been (i) previously known by such party on a nonconfidential basis, (ii)
in the public domain through no fault of such party or (iii) later lawfully
acquired by such party on a non-confidential basis from sources other than
another party to this Agreement (or an Affiliate of such other party). The
obligation of each party to hold any such information in confidence shall be
satisfied if they exercise the same care with respect to such information as
they would take to preserve the confidentiality of their own similar
information.
3.11. Certain Brokerage Fees. The parties hereto acknowledge
that any brokerage or similar fees payable pursuant to the partnership
agreements of the Cable Partnerships will be paid to an Intercable Group
Entity. The provisions of this Section 3.11 will terminate on the Option
Termination Date if Investor does not exercise the Control Option.
3.12. Purchases of Additional Shares of Capital Stock. (a)
After the Closing, the Bell International Group Entities and the JI Group
Entities shall be entitled to purchase additional shares of Capital Stock in
the open market or otherwise, and the Company will not interfere with or
otherwise take action to restrict such purchases, provided that in the event
any BCE Group Entity proposes to take an action that would increase Investor's
Ownership Percentage above 79%, Investor will conduct (or cause another BCE
Group Entity to conduct) (i) a Qualifying Tender Offer or (ii) a Qualifying
Merger to implement such increase.
(b) Prior to or on the tenth anniversary of the Option
Termination Date, "Qualifying Tender Offer" means a tender offer that has the
following elements: (i) the offer is for all of the outstanding shares of
Capital Stock not owned by a BCE Group Entity, (ii) the offer is for cash,
(iii) the offeror has received a written opinion from a nationally recognized
investment bank that such price is fair to the holders of Capital Stock from a
financial point of view, (iv) the offer has a minimum condition that 51% of
the outstanding shares of Capital Stock not owned by a BCE Group Entity shall
have been validly tendered and (v) the offer will provide that it will be
extended for ten Business Days after the offeror has publicly announced that
such minimum condition has been satisfied. After the tenth anniversary of the
Option Termination Date, "Qualifying Tender Offer" means a tender offer for
all of the outstanding shares of Capital Stock not owned by a BCE Group Entity.
(c) Prior to the time that Investor or its Affiliates have
purchased shares of Capital Stock pursuant to a Qualifying Tender Offer,
"Qualifying Merger" means a merger or similar transaction that has been
approved by (i) a majority of the members of a special committee consisting
of all the Independent Directors (which special committee may hire outside
advisors if it so chooses) and (ii) the holders of a majority of the shares of
Capital Stock not beneficially owned by a BCE Group Entity. After Investor or
any of its Affiliates have purchased shares of Capital Stock pursuant to a
Qualifying Tender Offer, "Qualifying Merger" means a merger or similar
transaction.
(d) The parties hereto acknowledge that in the event the JI
Group Entities elect not to purchase the Control Option pursuant to Section
7.2(b) of the Option Agreements, the Company will be given the opportunity to
make such purchase on the same terms and conditions as the JI Group Entities
under such Section 7.2(b).
3.13 Termination of Article III. (a) The provisions set
forth in Section 3.1, 3.3, 3.5, 3.9, 3.11, 3.12 will terminate as provided
therein.
(b) The provisions of Sections 3.2, 3.4, 3.6, 3.7 and 3.8
will terminate on the Event Date.
(c) The provisions of Section 3.10 will survive any
termination of this Agreement.
ARTICLE IV
TRANSFER RESTRICTIONS AND OFFER PROCEDURES
4.1. Transfer Restrictions. (a) No Bell International
Shareholder and no JI Group Shareholder will Transfer any shares of Capital
Stock or New Securities to an Affiliate of such transferor unless such
Affiliate has agreed to be bound by the terms of this Agreement as a
Shareholder and has delivered an executed counterpart of this Agreement to the
Company, Jones and Investor, provided that after the Option Termination Date
this Section 4.1 will apply only to Transfers of shares of Common Stock.
(b) During the Option Period, without the consent of Investor
each of Jones and International will not, and will cause each other JI Group
Entity not to, sell any Class A Shares or Common Shares that are not Optioned
Shares except (i) to other JI Group Entities pursuant to paragraph (a) above,
(ii) to Jones Family Members that have agreed to be bound by the terms of this
Agreement as a JI Shareholder, (iii) pursuant to pledges to financial
institutions to secure bona fide borrowings by such JI Group Entity (provided
that any foreclosure transferee's interest in such shares will be subject to
the provisions of this Agreement), (iv) to BCE Group Entities or (v) pursuant
to the procedures set forth in Section 4.2. Nothing in this paragraph (b)
will be construed as restricting a JI Group Entity from making gifts to
charitable institutions, family members or other Persons.
(c) If Investor does not purchase the Control Option pursuant
to the Option Agreements, between the Option Termination Date and an Event
Date no JI Group Shareholder will Transfer any shares of Common Stock to a
Person that is not a JI Group Entity or a BCE Group Entity unless (i) such
Transfer is pursuant to an underwritten public offering or Rule 144
promulgated under the Securities Act, (ii) such transferee has agreed to be
bound by the terms of this Agreement as if such transferee was a JI
Shareholder and has delivered an executed counterpart of this Agreement to the
Company and Investor or (iii) such Transfer is pursuant to a pledge to a
financial institution to secure bona fide borrowings by such Person (provided
that any foreclosure transferee's interest in such shares of Common Stock will
be subject to the provisions of this Agreement). In addition to the
foregoing, during such period of time the JI Group Entities may Transfer up to
an aggregate of 200,000 Common Shares to charitable institutions and pursuant
to gifts; to the extent any such Transfers exceed 50,000 individually or
200,000 in the aggregate, such Transfers may only be made if the charitable
institution or donee agrees to be bound by the terms of this Agreement as a JI
Shareholder.
(d) Any attempt by a JI Group Entity or a Bell International
Group Entity to effect a Transfer of shares of Capital Stock (including the
Optioned Shares) not in compliance with the terms of this Agreement and the
Option Agreements shall be null and void and neither the Company nor any
transfer agent shall give any effect in the Company's stock records to such
attempted Transfer.
4.2. Sales of Class A Shares by Jones. (a) During the Option
Period, the JI Group Entities may sell up to an aggregate of 15,000 Class A
Shares in any single calendar month without any obligation to offer such
shares to Investor.
(b) During the Option Period, if any JI Group Entity wishes to
sell (x) a number of Class A Shares that, when added to the sales of all JI
Group Entities during such calendar month, exceeds 15,000 or (y) any Common
Shares that are not Optioned Shares, such sale shall be made pursuant to the
following procedures:
(i) The relevant JI Group Entity (the "Offeror") shall
deliver to Investor an irrevocable written notice in the form
attached hereto as Exhibit B (the "Sale Offer Notice") specifying the
number of Class A Shares or Common Shares offered for sale by such
Offeror (the "Offered Shares") and the average of the closing "bid"
and "asked" prices for Class A Shares or Common Shares, as the case
may be, as reported by the NASDAQ for the Business Day immediately
preceding the Business Day on which the Sale Offer Notice is
delivered (the "Offer Price"). During the Offer Period (as defined
below), Investor will have the right to purchase (at its election)
100% or 50% of the Offered Shares at a price per share equal to the
Offer Price by delivery to the Offeror of a written notice in the form
attached hereto as Exhibit C (the "Purchase Notice"). For purposes
of this Section 4.2, the "Offer Period" means the period beginning at
the time Investor receives the Sale Offer Notice and ending 24 hours
after such time, provided that the Offer Period will end five
Business Days after such time if the sum of (x) the aggregate
proposed purchase price of the Offered Shares and (y) any other
amounts paid by Investor to any JI Group Entity pursuant to this
Section 4.2 during the 30 days immediately preceding delivery of the
Sale Offer Notice, exceeds $10,000,000.
(ii) If Investor fails to deliver a Purchase Notice to the
Offeror on or prior to the expiration of the Offer Period, the
Offeror will have the right, for a period of 30 calendar days after
receipt of the Sale Offer Notice, to sell the Offered Shares in the
open market or to any Person that is not primarily engaged in the
cable television or telecommunications business in the United States,
Canada or Mexico.
(iii) If Investor timely delivers a Purchase Notice to the
Offeror, (x) the closing for the purchase and sale of the Offered
Shares covered by such Purchase Notice will take place five Business
Days after the delivery of such Purchase Notice pursuant to the
procedures set forth in Section 4.4, provided that Investor will have
30 days to close such purchase in cases where the Offer Period is
five Business Days, (y) the Offeror will have the right to sell any
remaining Offered Shares (A) to any person that is not primarily
engaged in the cable television or telecommunications business in the
United States, Canada or Mexico or (B) in the open market and (z)
Investor will purchase in the open market a number of Class A Shares
equal to the number of Offered Shares purchased pursuant to such
Purchase Notice, at a price per share not to exceed the Offer Price
to the extent such Class A Shares are available for purchase at such
price during the 60 calendar days after the delivery by Investor of a
Purchase Notice.
(c) Notwithstanding the foregoing, without Investor's prior
written consent during the Option Period the JI Group Entities may not sell
more than 900,000 Class A Shares in the aggregate during any period of twelve
consecutive calendar months, calculated on a cumulative basis and adjusted for
prior sales of Class A Shares by the JI Group Entities. If the JI Group
Entities wish to sell more than an aggregate of 900,000 Class A Shares in any
such twelve month period for tax, estate planning or other unanticipated bona
fide liquidity needs, the JI Group Entities will have the right to sell such
Class A Shares; Jones and such JI Group Entity will consult with Investor and
the Company as to the proposed plan of distribution and such JI Group Entity
shall use its reasonable best efforts to develop a plan of orderly disposition
of such Class A Shares. Such plan shall take into account any projected
offerings by the Company of Capital Stock during the next 12 month period.
4.3. Purchases of Class A Shares by Bell International Group
Entities. During the Option Period, the Bell International Group Entities may
purchase up to an
aggregate of 15,000 Class A Shares in any single calendar month without any
obligation to offer to purchase such Class A Shares from any other
Shareholder. During the Option Period, if any Bell International Group Entity
wishes to purchase a number of Class A Shares that, when added to the
purchases of all Bell International Group Entities during such calendar month,
exceeds 15,000, Investor or the relevant Bell International Group Entity (the
"Purchaser") will first offer to purchase of such Class A Shares from Jones
(or any JI Group Entity designated by Jones) pursuant to the following
procedures:
(i) Purchaser shall deliver to Jones an irrevocable
written notice in the form attached hereto as Exhibit D (the
"Purchase Offer Notice") specifying the number (the "Purchase
Number") of Class A Shares that Purchaser is offering to purchase,
and the average of the closing "bid" and "asked" prices for Class A
Shares as reported by NASDAQ for the Business Day immediately
preceding the Business Day on which the Purchase Offer Notice is
delivered (the "Proposed Price"). For a period of 48 hours after
receipt of a Purchase Offer Notice, Jones (and any JI Group Entity
designated by Jones) will have the right to sell to Purchaser an
aggregate number of Class A Shares equal to (but not less than) the
Purchase Number, at a price per share equal to the Proposed Price, by
delivery to Investor of a written notice in the form attached hereto
as Exhibit E (the "Sale Notice").
(ii) If Jones (or his designee) fails to deliver a Sale
Notice to Purchaser prior to the expiration of the 48 hour time
period specified in paragraph (i), Purchaser will have the right, for
a period of 30 calendar days after delivery of the Purchase Offer
Notice, to purchase a number of Class A Shares equal to or less than
the Purchase Number.
(iii) If Jones (or his designee) timely delivers a Sale
Notice to Purchaser, (x) the closing for the purchase and sale of the
Class A Shares will take place five Business Days after delivery of
such Sale Notice pursuant to the procedures set forth in Section 4.4
and (y) Purchaser will purchase in the open market a number of Class
A Shares equal to the Purchase Number at a price per share not to
exceed the Proposed Price to the extent such Class A Shares are
available for purchase at such price during the 60 calendar days
after the receipt by Investor of a Sale Notice.
4.4. General Offer Procedures. (a) The delivery of a
Purchase Notice or a Sale Notice will constitute a contract between the
relevant Bell International Group Entity and the relevant JI Group Entity for
the purchase and sale of (i) in the case of a Purchase Notice, the Offered
Shares at a price per share equal to the Offer Price, and (ii) in the case of
a Sale Notice, a number of Class A Shares equal to the Purchase Number at a
price per share equal to the Proposed Price.
(b) So long as Investor is using its reasonable efforts to
consummate a closing under this Article IV promptly, Investor may postpone a
closing pursuant to Section 4.2 (but not Section 4.3) until such time as the
following conditions have been satisfied or waived by Investor:
(i) The waiting period (including any extension thereof
resulting from additional inquiries, if any) under the HSR Act
applicable to the purchase by Investor of the subject securities
shall have expired or been earlier terminated.
(ii) All other actions by, in respect of or filings with
the Federal Communications Commission (or similar federal agency), if
any, required to permit the consummation of the closing shall have
been taken or obtained, as the case may be, and shall be in full
force and effect.
(c) Notwithstanding the foregoing, if the Purchase Conditions
have not been satisfied or waived within 40 days after the delivery of a
Purchase Notice, the relevant Offeror will be free to sell the Offered Shares
without restriction.
(d) The purchase price for any Class A Shares purchased
pursuant to Sections 4.2 or 4.3 will be paid by wire transfer in immediately
available funds to a bank account designated by the relevant JI Group Entity
not less than three Business Days prior to closing, provided that upon the
mutual agreement of Investor and such JI Group Entity all or a portion of the
purchase price may be paid in shares of common stock of BCE Inc. or another
BCE Group Entity.
(e) At any closing hereunder, the relevant JI Group Entity
will deliver to Investor good and valid title to the Class A Shares or other
shares of Capital Stock being sold, free and clear of any Lien.
(f) The parties hereto recognize that the offer periods in
Sections 4.2 and 4.3 are short and that written communications will be
delivered by facsimile transmission. Any party delivering a notice pursuant
to Sections 4.2 and 4.3 will use reasonable efforts to contact by telephone a
representative of the other party to notify him or her of the content of such
notice.
4.5 Termination of Article IV. The provisions of Sections
4.2, 4.3 and 4.4 will terminate on the Option Termination Date and the
provisions of Section 4.1 will terminate as provided therein.
ARTICLE V
PROVISIONS RELATING
TO THE CONTROL OPTION
5.1. Issuances of Common Shares During the Option Period. (a)
During the Option Period, without the prior written consent of Investor the
Company will not sell or otherwise issue any Common Shares, or grant any
rights that are, or may become, exercisable to purchase, or convertible or
exchangeable into, Common Shares except (i) pursuant to employee options
granted to Glenn R. Jones or (ii) to Investor.
(b) During the Option Period, Investor will have the right to
purchase (or cause to be purchased) an option on any Common Shares, or any
options to purchase Common Shares, owned by any JI Group Entity, on the same
terms and conditions as set forth in the Option Agreements, provided that
Investor (or its agent) shall purchase (or cause to be purchased) such option
no later than 30 days after receipt by Investor (or its agent) of a notice
from a JI Group Entity that it owns, or has options to purchase, any Common
Shares that are not Optioned Shares.
5.2. Consents and Approvals For Exercise of Control Option.
(a) During the Option Period, the Company, Investor and Jones will, and to
the extent necessary will cause their respective Subsidiaries, counsel and
other advisors to, cooperate in identifying, and from time to time at the
request of Investor (or its agent) cooperate in obtaining, all consents and
approvals of, giving all notices to, and making all filings required by any
Intercable Group Entity with, any Governmental Authority organized within a
country where the Intercable Group conducts business or third party that are
necessary in connection with the exercise by Investor of the Control Option.
(b) During the Option Period, if any Intercable Group Entity
renews an existing Franchise Agreement, or in connection with an acquisition
seeks a consent or approval under a Franchise Agreement, the Company will use
reasonable efforts at such time to obtain any consents or approvals that are
required under such Franchise Agreement in connection with the exercise by
Investor (or its agent) of the Control Option.
(c) During the Option Period, the Company will not make, nor
allow any Intercable Group Entity to make, a material acquisition without
first (i) reviewing the likely effect of the exercise of the Control Option on
any Franchise Agreements, contracts or other rights proposed to be acquired in
connection with such acquisition and (ii) discussing the results of such
review with a representative of Investor.
(d) During the Option Period, without the prior written
consent of Investor, no Intercable Group Entity will enter into a new credit
(or other financing) agreement or other contract (other than Franchise
Agreements) material to the Intercable Group if such agreement or contract
contains a provision that would, as a result of the exercise by Investor (or
its agent) of the Control Option, (i) require any consent or other action by
any Person, (ii) give rise to an event of default, right of termination,
cancellation or acceleration thereunder or (iii) cause a loss of any material
benefit to which an Intercable Group Entity is entitled.
5.3. Further Assurances. In the event Investor (or its agent)
exercises its right to purchase the Optioned Shares, the Company, Jones,
International and Investor (or its agent) will each execute and deliver or
cause to be executed and delivered all further documents and instruments and
use their reasonable efforts to secure such consents and take all such further
action as may be reasonably necessary in order to consummate the exercise of
the Control Option and the purchase of the Optioned Shares, and to enable
Investor (or its agent) to thereafter enjoy all benefits and rights in respect
of the Optioned Shares, provided that this Section 5.3 will not apply to
approvals that Investor and its Affiliates may need from Governmental
Authorities in Canada or in any country in which the Company does not conduct
business.
5.4. No Proxies or Encumbrances on Optioned Shares. Except as
contemplated by this Agreement and the Option Agreements, without the consent
of Investor (or its agent) no JI Group Entity will, directly or indirectly, (i)
grant any proxies (other than a revocable proxy granted in connection with a
meeting of stockholders) or enter into any voting trust or other agreement or
arrangement with respect to the voting of any Optioned Shares, (ii) sell,
assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other
disposition of, any Optioned Shares or (iii) seek or solicit any transaction or
arrangement described in clauses (i) and (ii). Jones or International will
notify Investor promptly (and provide all details reasonably requested by
Investor) if Jones or International is approached or solicited, directly or
indirectly, by any Person with respect to any of the foregoing. Nothing
herein shall be deemed to prevent or restrict Jones, International or any
other JI Group Entity from voting the Optioned Shares in its sole discretion on
all matters, except as otherwise agreed in this Agreement.
5.5. Deemed Exercise. For all purposes of this Agreement,
Investor will be deemed to have exercised the Control Option and purchased the
Optioned Shares if a financial institution acting as agent of Investor
exercises the Control Option and purchases the Optioned Shares pursuant to the
terms of the Option Agreements.
5.6. Trading in Class A Shares. Neither Investor, Jones,
International nor the Company, nor any of their respective Subsidiaries, nor
any Persons acting on behalf or at the direction of such Persons, shall
purchase or sell, or cause to be purchased or sold, any Class A Shares during
any period during which they know that "Market Value" is being determined
pursuant to the Option Agreements.
5.7. Certain Information. (a) Investor (or any of its
successors) will notify the Company and Jones if any equity interests in
Investor become owned by any Person that is not a BCE Group Entity. Jones
will notify Investor if any equity interests in International (or any of its
successors) become owned by a Person that is not a JI Group Entity.
(b) Following the end of the applicable fiscal year:
(i) Investor will deliver to International its audited
financial statements,
(ii) International will deliver to Investor a certificate
stating that its assets exceeded its liabilities at the end of such
fiscal year, that it is paying its obligations when due and that it
is not aware of any circumstance that is likely to give rise to a
Jones Bankruptcy Event (as defined in the Option Agreements) during
the immediately succeeding fiscal year.
5.8 Covenants of International and Jones. (a)
International shall furnish to Investor such financial statements of
International (if any) as are provided by International or Jones to an
unrelated third-party purchaser or lender pursuant to a Major Financing
Transaction. Such financial statements shall be provided to Investor promptly
following their delivery to such purchaser or lender. A "Major Financing
Transaction" means the sale, issuance or other transfer of shares representing
twenty-five percent (25%) or more of the outstanding shares of common stock of
International or the entering in to by International of credit facilities
pursuant to which it may borrow $25,000,000 or more.
(b) Jones shall, during his lifetime, maintain Control of
International. For purposes of this Section 5.8, "Control" means (i) the
ownership or control, directly or indirectly, of securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors of International, or (ii) the ownership or control of equity
interests constituting at least fifty percent (50%) of the fair market value
of all outstanding equity interests of International, or (iii) the possession,
directly or indirectly, of the ability to direct or cause the direction of the
management or policies of International, whether through the ownership of
voting securities (even through such ownership may be of less than a majority
of the outstanding voting securities) or by agreement or otherwise, provided
that in the case of this subparagraph (iii) Jones and its Affiliates also owns,
directly or indirectly, not less than twenty-five percent (25%) of the fair
market value of all outstanding equity interests of International, or (iv)
following a registered public offering of any of the shares of International,
the ownership or control of securities or other ownership interests
representing at least twenty-five percent (25%) of the votes entitled to be
cast for the election of directions, provided that in the case of this
subparagraph (iv), Jones and his Affiliates own, in the aggregate, more voting
securities in International than any other shareholder.
(c) International shall not distribute to its shareholders
any Extraordinary Dividends.
(d) Transactions between International and its Affiliates
(other than its Subsidiaries) shall be on terms comparable to those
International would obtain in an arms'-length transaction with a Person that
is not an Affiliate or, if on terms that are not so comparable, the additional
cost thereof to International ("Additional Costs"), when added to the amount
of all Distributions, shall not, in the aggregate, exceed the Allowed Amount.
(e) International will give Investor prompt notice of any
Distributions by International or any transactions described in paragraph (d)
that result in Additional Costs or Distributions exceeding $1,000,000.
(f) The covenants set forth in Sections 5.8(a), (c) and (e)
apply only to International. The covenants set forth in Section 5.8(b) apply
only to Jones and International. Without limiting the generality of the
foregoing, no covenant set forth in Section 5.8(c) or (e) shall apply to any
Affiliate or Subsidiary of International, whether now or hereafter existing,
and no covenant set forth in Section 5.8(a) or (b) shall apply to any
Affiliate or Subsidiary of Jones or International, whether now or hereafter
existing, except to the extent that Jones or International is an Affiliate or
Subsidiary of the other.
5.9 Termination of Article V. The provisions of this Article
V will terminate on the Option Termination Date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Representations and Warranties of Jones. Jones
represents and warrants to Investor and the Company that as of the date hereof:
(a) The execution, delivery and performance of this Agreement
by Jones is within his legal capacity. This Agreement constitutes a valid and
binding agreement of Jones.
(b) The execution, delivery and performance by Jones of this
Agreement requires no action of Jones by or in respect of, or filing by Jones
with, any Governmental Authority organized within the United States of America,
England or Spain other than any such action or filing as to which the failure
to make or obtain would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Jones.
(c) The execution, delivery and performance by Jones of this
Agreement does not (i) violate any applicable law, rule, regulation, judgment,
injunction, order or decree binding on Jones or (ii) require any consent or
other action by any Person under, or constitute a default under, any agreement
or other instrument binding upon Jones or any license, permit or other similar
authorization held by Jones, except to the extent that any such violation,
failure to obtain any such consent or other action, or default, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Jones.
6.2. Representations and Warranties of International.
International represents and warrants to Investor and the Company that as of
the date hereof:
(a) The execution, delivery and performance of this Agreement
by International is within International's corporate power and has been duly
authorized by all necessary corporate action on the part of International.
This Agreement constitutes a valid and binding agreement of International.
(b) The execution, delivery and performance by International
of this Agreement requires no action of International by or in respect of, or
filing by International with, any Governmental Authority organized within the
United States of America, England or Spain other than any such action or
filing as to which the failure to make or obtain would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
International.
(c) The execution, delivery and performance by International
of this Agreement does not (i) violate the articles of incorporation or bylaws
of International, (ii) violate any applicable law, rule, regulation, judgment,
injunction, order or decree binding on International or (iii) require any
consent or other action by any Person under, or constitute a default under,
any agreement or other instrument binding upon International or any license,
permit or other similar authorization held by International, except in the
case of clauses (ii) and (iii) to the extent that any such violation, failure
to obtain any such consent or other action, or default, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on International.
6.3. Representations and Warranties of Investor. Investor
represents and warrants to each of Jones, International and the Company that
as of the date hereof:
(a) Investor is a corporation duly incorporated, validly
existing and in good standing under the laws of Canada and has all corporate
powers and all material governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted.
(b) The execution, delivery and performance of this Agreement
by Investor is within Investor's corporate power and has been duly authorized
by all necessary corporate action on the part of Investor. This Agreement
constitutes a valid and binding agreement of Investor.
(c) The execution, delivery and performance by Investor of
this Agreement require no action by Investor or in respect of, or filing by
Investor with, any governmental body, agency or official other than any such
action or filing as to which the failure to make or obtain would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Investor.
(d) The execution, delivery and performance by Investor of
this Agreement do not (i) violate the articles of incorporation or bylaws of
Investor or (ii) violate any applicable law, rule, regulation, judgment,
injunction, order or decree binding on Investor or (iii) require any consent
or other action by any Person under, or constitute a default under, any
agreement or instrument binding upon Investor or any license, permit or other
similar authorization held by Investor except, in the case of clauses (ii) and
(iii), to the extent that any such violation, failure to obtain any such
consent or take such other action, or default, would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Investor.
(e) Assuming the accuracy of the Grantors' representations and
warranties in the Option Agreements, the purchase by Morgan Guaranty Trust
Company of New York, as agent for Investor, of the Optioned Shares requires no
action by Investor in respect of, or filing by Investor with, any Governmental
Authority other than (i) compliance with any applicable requirements of the
HSR Act and the Exon-Florio Act, and (ii) any such action or filing as to
which the failure to make or obtain would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on, the business,
assets, results of operation, properties or financial condition of Investor.
(f) The execution, delivery and performance by Investor (or
its agent) of the Option Agreements does not (i) assuming the accuracy of the
Grantors' representations and warranties in the Option Agreements and
compliance with the matters referred to in paragraph (e) of this Section 6.3,
violate any applicable law, rule, regulation, judgment, injunction, order or
decree, (ii) assuming the accuracy of Grantors' representations and warranties
in the Option Agreements, require any consent or other action by any Person
under, or constitute a default under, any material agreement or instrument
binding upon Investor or (iii) result in the creation or imposition of any
Lien on any material asset of Investor, except to the extent that any such
violation, failure to obtain any such consent or other action, default, right,
loss or Lien would not reasonably expected to have, individually or in the
aggregate, a material adverse effect on, the business, assets, results of
operations, properties or condition (financial or otherwise) of the Investor.
(g) There is no investment banker, broker, finder or other
intermediary which has been retained by or is
authorized to act on behalf of Investor who might be entitled to any fee or
commission from International or its Affiliates in connection with the grant
or exercise of the Control Option.
6.4. Representations and Warranties of the Company. The
Company represents and warrants to Investor, Jones and International that as
of the date hereof:
(a) The execution, delivery and performance of this Agreement
by the Company is within the Company's corporate power and has been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement constitutes a valid and binding agreement of the Company.
(b) The execution, delivery and performance by the Company of
this Agreement requires no action of any Intercable Group Entity by or in
respect of, or filing by any Intercable Group Entity with, any Governmental
Authority organized within the United States of America, England or Spain
other than any such action or filing as to which the failure to make or obtain
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Intercable Group Entities.
(c) The execution, delivery and performance by the Company of
this Agreement do not (i) violate (x) the articles of incorporation or bylaws
of the Company or (y) the articles of incorporation, by-laws, partnership
agreement or other organizational document (as applicable) of any other
Intercable Group Entity, (ii) violate any applicable law, rule, regulation,
judgment, injunction, order or decree binding on the Company, (iii) require any
consent or other action by any Person under, constitute a default under, or
give rise to any right of termination, cancellation or acceleration of any
right or obligation of the Company or any other Intercable Group Entity or
cause a loss of any benefit to which the Company or any other Intercable Group
Entity is entitled under any agreement or other instrument binding upon the
Company or any other Intercable Group Entity or any Franchise Agreement,
license, permit or other similar authorization held by the Company or any
other Intercable Group Entity or (iv) result in the creation of any Lien on
any asset of the Company or any Intercable Group Entity, except in the case of
clauses (ii), (iii) and (iv), to the extent that any such violation, failure
to obtain any such consent or other action, default, right, loss or Lien would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Intercable Group Entities.
ARTICLE VII
MISCELLANEOUS
7.1. Termination. The provisions of this Agreement will
terminate, and be of no further force and effect:
(i) if Investor purchases the Optioned Shares pursuant
to the Option Agreements, on the Option Termination Date, provided
that the provisions of Sections 2.5(d), 3.5, 3.9, 3.10 and 3.12 will
survive any such termination, or
(ii) if Investor does not purchase the Optioned Shares
pursuant to the Option Agreements, on the date after the Option
Termination Date when Investor's Ownership Percentage is less than
10%, provided that the provisions of Sections 2.5(d), 3.5, 3.9 and
3.10 will survive any such termination.
7.2. Successors and Assigns; Assignment. (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, and to the extent
applicable heirs, executors, administrators and legal representatives.
(b) Except as otherwise provided herein, neither the Company
nor any Shareholder may assign, delegate or otherwise Transfer any of its
rights or obligations under this Agreement without the prior written consent
of all of the other parties hereto, provided that (i) any party hereto may
pledge its interest in this agreement to a financial institution to secure a
bona fide borrowing by such party in connection with a pledge by such party of
its general intangible interests (provided that any foreclosure transferees's
interest will be subject to the provisions of this Agreement), (ii) Investor
and any other Bell International Shareholder may assign its rights, but not its
obligations, to any Eligible Assignee and (iii) Investor may assign its rights
and obligations to any purchaser of the Control Option that has paid for the
Optioned Shares pursuant to Article VII of the Option Agreements at any time
after such purchaser has delivered to the Company, Jones and International an
executed counterpart of this Agreement and agreed to be bound by the terms of
this Agreement as if such Person was Investor, provided that Sections 3.3 and
3.4 will terminate at the time of any such assignment to such purchaser.
(c) For purposes of this Agreement, "Eligible Assignee" means
any entity which at the time of such assignment is, and thereafter during the
term of this Agreement remains (i) controlled, directly or indirectly, by
Investor and (ii) not primarily engaged in, or a Subsidiary of Investor
primarily engaged in, the direct operation or management of (x) cable
television systems located in North America, (y) wireline local communications
services located in the United States of America or (z) educational
programming services, other than Investor and any Person that is an Intercable
Group Entity or a JI Group Entity (each a "Restricted Business"). The parties
hereto acknowledge that the foregoing provisions are not intended to restrict
Investor from assigning its rights hereunder to a Subsidiary of Investor that
is a holding company of an entity or entities primarily engaged in a Restricted
Business.
7.3. Specific Performance. Each party hereto agrees that a
Shareholder could be irreparably damaged if any party failed to perform any
obligation under this Agreement, and that such Shareholder would not have an
adequate remedy at law for money damages in such event. Accordingly, each
Shareholder shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement. This provision
is without prejudice to any other rights that such Shareholder may have
against any party for any failure by such party to perform its obligations
under this Agreement.
7.4. Notices. All notices, requests, claims, demands and
other communications hereunder shall be deemed to have been duly given when
delivered in person, by facsimile transmission, or by registered or certified
mail (postage prepaid, return receipt requested):
if to Jones:
Glenn R. Jones
9697 East Mineral Avenue
Englewood, Colorado 80155
Fax: (303) 799-4675
if to International:
Jones International, Ltd.
9697 East Mineral Avenue
Englewood, Colorado 80155
Fax: (303) 799-4675
Attention: Chief Executive Officer
if to Investor:
Bell Canada International Inc.
1000, rue de la Gauchetiere West
Suite 1100
Montreal, Quebec
Canada H3B 4Y8
Fax: 514-392-2262
Attention: Chief Financial Officer
with a copy to:
Bell Canada International Inc.
1000, rue de la Gauchetiere West
Suite 1100
Montreal, Quebec
Canada H3B 4Y8
Fax: 514-392-2342
Attention: General Counsel
if to the Company, to:
Jones Intercable, Inc.
9697 East Mineral Avenue
Englewood, Colorado 80112
Attention: President
Fax: (303) 784-8503
with a copy to:
Jones Intercable Inc.
9697 East Mineral Avenue
Englewood, Colorado 80112
Attention: General Counsel
Fax: (303) 799-1644
All such notices, requests and other communications shall be deemed received
on the date of receipt by the recipient thereof if received prior to 5 p.m. in
the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to
have been received until the next succeeding business day in the place of
receipt.
7.5. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
7.6. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed, in the case of an amendment, by each party to
this Agreement, or in the case of a waiver, by the party against whom the
waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
7.7. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Colorado, without
regard to the conflicts of law rules of such state.
7.8. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by all of the other parties
hereto.
7.9. Headings. The headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning of
interpretation of this Agreement.
7.10. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral
and written, between the parties with respect to the subject matter of this
Agreement.
7.11. Separability. In case any provision of this Agreement
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.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
______________________________
GLENN R. JONES, individually
JONES INTERNATIONAL, LTD.
By____________________________
Name:
Title:
BELL CANADA INTERNATIONAL
INC.
By____________________________
Name:
Title:
JONES INTERCABLE, INC.
By____________________________
Name:
Title:
SCHEDULE I
List of Affiliate Agreements
1. Transponder License Agreement between Jones Space Segment, Inc. and
Jones Intercable, Inc., dated February 2, 1993.
2. Affiliate Agreement between Mind Extension University, Inc. and Jones
Intercable, Inc., dated December 28, 1993, as amended June 1, 1994.
3. Cable Affiliate Agreement between Galactic Radio, Inc. and Jones
Programming Services, Inc., dated May 1, 1990.
4. Office Lease between Jones Properties Inc. and Jones Intercable Inc.,
dated June 8, 1984.
5. Short Form Lease, dated June 8, 1984, and amendment, dated November
30, 1989, between Jones Properties, Inc. and Jones Intercable, Inc.
6. Sublease Agreement between the Jones Group, Ltd. and Jones Intercable,
Inc., dated August 25, 1987.
7. Sublease Agreement between Jones International, Ltd. and Jones
Intercable, Inc., dated August 25, 1987.
8. Sublease Agreement between Jones Spacelink, Ltd. and Jones Intercable,
Inc., dated August 25, 1987.
Affiliate Agreements in Process
1. Agreement between Jones Interactive, Inc. and Jones Intercable, Inc.
for the provision of certain support services.
2. Affiliate Agreement between Jones Computer Networks, Inc. and Jones
Intercable, Inc. for carriage of programming.
3. Affiliate Agreement between Product Information Networks and Jones
Intercable, Inc. for carriage of programming.
4. Affiliate Agreement between Healthcare Network and Jones Intercable,
Inc. for carriage of programming.
5. Agreement between Jones International, Ltd. or an affiliate thereof
and Jones Intercable, Inc. for development of customer billing
service.
6. Option Agreement between affiliate of Jones International, Ltd. and
Jones Intercable, Inc. regarding purchase of Terrace Building.
SCHEDULE II
List of Cable Partnerships
I. Limited Partnerships
1. Jones Cable Income Fund 1-A, Ltd.
2. Jones Intercable Income Fund 1-B, Ltd.
3. Jones Cable Income Fund 1-C, Ltd.
4. Cable TV Fund 11-A, Ltd.
5. Cable TV Fund 11-B, Ltd.
6. Cable TV Fund 11-C, Ltd.
7. Cable TV Fund 11-D, Ltd.
8. Cable TV Fund 12-A, Ltd.
9. Cable TV Fund 12-B, Ltd.
10. Cable TV Fund 12-C, Ltd.
11. Cable TV Fund 12-D, Ltd.
12. Cable TV Fund 14-A, Ltd.
13. Cable TV Fund 14-B, Ltd.
14. Cable TV Fund 15-A, Ltd.
15. IDS/Jones Growth Partners 87-A, Ltd.
16. IDS/Jones Growth Partners 89-B, Ltd.
17. IDS/Jones Growth Partners II, L.P.
18. Jones Intercable Investors
19. Jones Spacelink Income/Growth Fund 1-A, Ltd.
20. Spacelink Fund 3, Ltd.
21. Jones Spacelink Fund 4, Ltd.
22. Jones Spacelink Fund 5, Ltd.
23. Jones Spacelink Income Partners 87-1, L.P.
24. Jones Growth Partners, L.P.
25. Jones Growth Partners II, L.P.
II. Joint Ventures
1. Jones Cable Income Fund 1-B/C Venture
2. Cable TV Joint Fund 11
3. Cable TV Fund 12-BCD Venture
4. Cable TV Fund 14-A/B Venture
5. IDS Jones Joint Venture Partners
EXHIBIT B
[Form of Sale Offer Notice]
[Date]
Bell Canada International Inc.
To Bell Canada International Inc.:
Reference is made to the Shareholders Agreement, dated as of
December 20, 1994, among Glenn R. Jones, Jones International, Ltd., Bell
Canada International Inc. and Jones Intercable, Inc. (the "Agreement").
Capitalized terms used but not defined herein have the meanings set forth in
the Agreement. This Sales Offer Notice is being delivered to you pursuant to
Section 4.2(a) of the Agreement.
The undersigned hereby irrevocably offers to sell to you
_______ [Class A/Common] Shares at a price per share of $_________, which is
equal to the average of the [closing "bid" and "asked" prices] for [Class
A/Common] Shares on the Business Day immediately preceding the date on which
this Sale Offer Notice is being delivered to you. The aggregate purchase
price for the Offered Shares is $__________.
If you wish to purchase the Offered Shares pursuant to Sections
4.2(a) and 4.4 of the Agreement, please respond by delivery of a Purchase
Notice to the undersigned prior to the expiration of the Offer Period, which
is [time] on [date].
[Name of JI Group Entity]
By:______________________
EXHIBIT C
[Form of Purchase Notice]
[Date]
[Name of Glenn Jones
Group Entity]
To __________:
Reference is made to the Shareholders Agreement dated as of
December 20, 1994, among Glenn R. Jones, Jones International, Ltd., Bell
Canada International Inc. and Jones Intercable Inc. (the "Agreement").
Capitalized terms used but not defined herein have the meaning set forth in the
Agreement. This Purchase Notice is being delivered to you pursuant to Section
4.2(a) of the Agreement and in response to your Sale Offer Notice dated
______________.
The undersigned hereby irrevocably elects to exercise the right
to purchase [50%/100%] of the Offered Shares for an aggregate purchase price
of $____________.
The closing for the purchase and sale of the Offered Shares
pursuant to this Purchase Notice shall take place pursuant to the procedures
set forth in Section 4.4. Please contact us so that we may agree on wire
transfer arrangements and a mutually acceptable time and place for closing.
BELL CANADA INTERNATIONAL INC.
By:___________________________
EXHIBIT D
[Form of Purchase Offer Notice]
[Date]
Glenn R. Jones
To Glenn R. Jones:
Reference is made to the Shareholders Agreement, dated as of
December 20, 1994, among Glenn R. Jones, Jones International, Ltd., Bell
Canada International Inc. and Jones Intercable, Inc. (the "Agreement").
Capitalized terms used but not defined herein have the meanings set forth in
the Agreement. This Purchase Offer Notice is being delivered to you pursuant
to Section 4.3 of the Agreement.
The undersigned hereby irrevocably offers to purchase from you
(or any JI Group Entity designated by you) _______ Class A Shares at a price
per share of $_________, for an aggregate purchase price of $______________.
If you (or any JI Group Entity) wishes to sell Class A Shares
pursuant to the foregoing offer and Sections 4.3 and 4.4 of the Agreement,
please respond by delivery of a Sale Notice to the undersigned no later than
[time] on [date].
[Name of Bell International Group Entity]
By:______________________________________
EXHIBIT E
[Form of Sale Notice]
[Date]
[Name of Bell International Group Entity]
To [Name of Bell International Group Entity]:
Reference is made to the Shareholders Agreement dated as of
December 20, 1994, among Glenn R. Jones, Jones International, Ltd., Bell
Canada International Inc. and Jones Intercable Inc. (the "Agreement").
Capitalized terms used but not defined herein have the meaning set forth in
the Agreement. This Sale Notice is being delivered to you pursuant to
Section 4.3 of the Agreement and in response to your Purchase Offer Notice
dated ____________.
The undersigned hereby irrevocably elects to sell to you ______
Class A Shares for an aggregate purchase price of $__________.
The closing for the purchase and sale of the Class A Shares
pursuant to this Sale Notice shall take place pursuant to the procedures set
forth in Section 4.4. Please contact us so that we may agree on wire transfer
arrangements and a mutually acceptable time and place for closing.
[Name of JI Group Entity]
By:_____________________
Option Agreement dated as of December 20, 1994 between MGT and JI Trust.
OPTION AGREEMENT
dated as of
December 20, 1994,
between
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as agent for
Bell Canada International Inc.
and
JONES INTERNATIONAL GRANTOR BUSINESS TRUST
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions...................................... 1
ARTICLE II
GRANT OF THE CONTROL OPTION
SECTION 2.1. Grant of Control Option.......................... 6
ARTICLE III
EXERCISE OF THE CONTROL OPTION
SECTION 3.1. Exercise Periods................................. 6
SECTION 3.2. Exercise of Control Option....................... 7
<PAGE>
SECTION 3.3. Purchase Price For the Optioned
Shares...................................... 9
SECTION 3.4. Determination of Market Value.................... 10
SECTION 3.5. Closing.......................................... 12
SECTION 3.6. Termination of Control Option.................... 12
SECTION 3.7. Adjustment Upon Changes in Capitalization
or Merger................................... 13
ARTICLE IV
COVENANTS
SECTION 4.1. No Proxies for or Encumbrances on Optioned
Shares...................................... 13
SECTION 4.2. Further Assurances............................... 14
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF GRANTOR
SECTION 5.1. Valid Title...................................... 14
SECTION 5.2. Existence........................................ 14
SECTION 5.3. Binding Effect................................... 14
SECTION 5.4. Governmental Authorization....................... 14
SECTION 5.5. Non-Contravention................................ 15
SECTION 5.6. Finder's Fees.................................... 15
SECTION 5.7. Validity, Perfection and Priority of Security
Interest.................................... 15
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
SECTION 6.1. Acquisition for Purchaser's Account.............. 16
ARTICLE VII
CHANGE IN LAW
SECTION 7.1. Change in Law.................................... 16
SECTION 7.2. Right of First Offer............................. 17
SECTION 7.3. Closing Procedures............................... 18
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
SECTION 8.1. Survival......................................... 19
SECTION 8.2. Indemnification.................................. 19
SECTION 8.3. Procedures....................................... 19
<PAGE>
ARTICLE IX
PLEDGE OF OPTIONED SHARES
SECTION 9.1. The Security Interest............................ 20
SECTION 9.2. Delivery of Collateral........................... 21
SECTION 9.3. Further Assurances............................... 21
SECTION 9.4. Right to Vote and Receive Dividends on
Collateral.................................. 21
SECTION 9.5. Limitation on Duty of Purchaser in Respect of
Collateral.................................. 22
SECTION 9.6. Termination of Security Interest; Release of
Collateral.................................. 22
SECTION 9.7. Successors and Assigns........................... 22
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination..................................... 23
SECTION 10.2. Successors and Assigns.......................... 23
SECTION 10.3. Specific Performance............................ 24
SECTION 10.4. Notices......................................... 24
SECTION 10.5. Expenses........................................ 25
SECTION 10.6. Amendments and Waivers.......................... 25
SECTION 10.7. Governing Law................................... 26
SECTION 10.8. Counterparts; Effectiveness..................... 26
SECTION 10.9. Headings........................................ 26
SECTION 10.10. Entire Agreement............................... 26
SECTION 10.11. Separability................................... 26
SECTION 10.12. Agency Capacity of Purchaser................... 26
SCHEDULES
SCHEDULE I Option Price
EXHIBITS
EXHIBIT A Exercise Period Notice
EXHIBIT B Exercise Notice
EXHIBIT C Offer Notice
EXHIBIT D Acceptance Notice
OPTION AGREEMENT
AGREEMENT dated as of December 20, 1994 between Morgan Guaranty
Trust Company of New York, as agent for BCI (in such capacity, "Purchaser"),
and Jones International Grantor Business Trust, a Delaware business trust
("Grantor").
W I T N E S E T H :
WHEREAS, concurrently with the execution of this Agreement,
<PAGE>
Purchaser is purchasing (i) 7,414,300 shares of Class A Common Stock of Jones
Intercable, Inc., a Colorado corporation (the "Company"), for an aggregate
purchase price of $203,893,250, (ii) 2,410 shares of Class A Common Stock of
Jones Education Networks, Inc., a Colorado corporation, for an aggregate
purchase price of $18,000,000, (iii) 12,592 shares of Class A Common Stock of
Jones Lightwave, Ltd., a Colorado corporation, for an aggregate purchase price
of $5,000,000 and (iv) 747,500 shares of Class A Common Stock of Jones
Entertainment Group, Ltd., a Colorado corporation, for an aggregate purchase
price of $7,000,000;
WHEREAS, the parties hereto acknowledge that Purchaser would
not enter into the Stock Purchase Agreement (as defined below) unless Grantor
also granted the option set forth herein; and
WHEREAS, in order to induce the Purchaser to enter into this
Agreement, Grantor has agreed to grant a continuing security interest in and
to the Optioned Shares to secure its obligations under this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. (a) The following terms, as used
herein, have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with such Person.
"BCI" means Bell Canada International Inc., a corporation
organized under the Canada Business Corporations Act.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks are authorized to close in Montreal, Canada, New
York, New York or Denver, Colorado.
"Capital Stock" means, at any time, Common Stock, Class A
Common Stock and any other authorized capital stock of the Company.
"Change in Law" means on or after the date of this Agreement
the adoption of any applicable treaty, law, rule or regulation, or any change
in any applicable treaty, law, rule or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority
(whether by opinion, order, policy statement or other similar documents), or
any directive of any Governmental Authority relating to the business or assets
of BCI or its Affiliates and not the Purchaser.
"Class A Common Stock" means the Class A Common Stock of the
Company, par value $0.01 per share.
"Common Stock" means the Common Stock of the Company, par value
$0.01 per share.
"Control Option" means the option to purchase the Optioned
Shares pursuant to the terms and conditions of this Agreement.
"Dollars" and sign "$" means United States dollars.
<PAGE>
"Event" means the death or Incapacity of Glenn R. Jones. For
purposes of this Agreement, "Incapacity" shall be deemed to exist if Glenn R.
Jones becomes physically or mentally incapacitated and is therefore unable for
a period of six consecutive months, or for an aggregate of 12 months in any 24
consecutive month period, to perform his duties as Chief Executive Officer
with the Company. Any question as to the existence of Incapacity shall be
determined in writing by a qualified independent physician mutually acceptable
to Grantor and Purchaser. If Grantor and Purchaser cannot agree as to a
qualified independent physician, each shall appoint such a physician and those
two physicians shall select a third who shall make such determination. The
determination of Incapacity made by any such physician shall be final and
conclusive for all purposes of this Agreement.
"Exon-Florio Act" means Section 721 of Title VII of the Defense
Production Act of 1950, as amended, together with the rules and regulations
promulgated thereunder.
"Governmental Authority" means any local, county, state,
commonwealth, federal or foreign court, judicial, executive, or legislative
instrumentality, or any agency, authority, commission, board or official
thereof, including, without limitation, any franchising authority.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Intercable Group" means, at any time, the Company and each
Person that is a Subsidiary of the Company at such time.
"Intercable Group Entity" means, at any time, each Person
included in the Intercable Group at such time.
"Jones" means Glenn R. Jones, a resident of Colorado, or in the
event he is not then alive or legally competent, his executor, the
administrator of his estate or his legal representative (including, without
limitation, his guardian, conservator or other similar fiduciary).
"Jones Bankruptcy Event" means (i) Grantor, Glenn Jones Grantor
Business Trust, Jones or Jones International shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
substantially all of its property, or shall consent to any such relief or to
the appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize any
of the foregoing, (ii) an involuntary case or other proceeding shall be
commenced against Grantor, Glenn Jones Grantor Business Trust, Jones or Jones
International seeking liquidation, reorganization or other relief with respect
to it or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or substantially all of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 90 days or (iii) an order for relief
shall be entered against Grantor, Glenn Jones Grantor Business Trust, Jones or
Jones International under the federal bankruptcy laws as now or hereafter in
effect.
<PAGE>
"Jones International" means Jones International, Ltd., a
Colorado corporation.
"Lien" means, with respect to any property or asset, any
mortgage, lien, pledge, charge, security interest, encumbrance or other
adverse claim of any kind in respect of such property or asset.
"Option Price" means, at any time, the Option Price described
on Schedule I at such time.
"Optioned Shares" means the 2,239,416 shares of Common Stock
owned by Grantor on the date hereof and delivered to Purchaser pursuant to
Section 9.1 (as the same may be adjusted pursuant to Section 3.7).
"Optionor" means Grantor and the grantors under the Related
Option Agreements.
"Person" means an individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Purchase Price" means the aggregate amount payable to Grantor
in connection with the purchase of the Optioned Shares, as calculated pursuant
to Section 3.3.
"Related Option Agreements" means the Option Agreements dated
as of the date hereof between Purchaser and each of Glenn Jones Grantor
Business Trust, Jones Space Segment, Inc., Jones Global Group, Inc., Jones
Interdigital, Inc. and Jones Entertainment Group, Ltd.
"Resignation Event" means the resignation of Glenn R. Jones as
Chief Executive Officer of the Company.
"Secured Obligations" means the obligations of Grantor to
deliver the Optioned Shares at the Closing, free and clear of any Lien and any
other limitation or restriction under this Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
and rules and regulations promulgated thereunder.
"Security Interest" means the security interest in the
Collateral granted hereunder securing the Secured Obligations.
"Shareholders Agreement" means the Shareholders Agreement dated
as of the date hereof among BCI, the Company, Jones and Jones International.
"SPA Closing" means December 20, 1994.
"Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of May 31, 1994, as amended on October 20, 1994, between the Company
and BCI.
"Subsidiary" means, as to any Person, (i) any entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are, directly or indirectly, owned or controlled by such Person,
(ii) any partnership of which such Person is, directly or indirectly, a
general or managing partner or (iii) any other entity that is, directly or
indirectly, controlled by such Person. The parties hereto acknowledge that
(i) Glenn R. Jones and Jones International are not Subsidiaries of any
<PAGE>
Intercable Group Entity and (ii) BCE Inc. is not a Subsidiary of BCI.
"Trust Agreement" means the Trust Agreement dated as of the
date hereof among Robert S. Zinn and Christine Jones Marocco, as Managing
Trustees, John P. Garniewski, Jr. as Independent Trustee, and Jones
International.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
Acceptance Notice 7.2
Additional Securities 7.3
Closing 3.2
Collateral 9.1
Damages 8.2
Eligible Assignee 10.2
Exercise Notice 3.2
Exercise Period 3.1
Final Determination 3.4
Indemnified Party 8.3
Indemnifying Party 8.3
Grantor's Notice 3.1
Market Value 3.4
Offer Notice 7.2
Offer Price 7.2
Restricted Business 10.2
Termination Time 3.6
Trigger Date 3.3 and 7.2
Withdrawal Period 3.4
(c) Unless otherwise defined herein, or unless the context
otherwise requires, all terms used herein which are defined in the New York
Uniform Commercial Code as in effect on the date hereof shall have the
meanings therein stated.
ARTICLE II
GRANT OF THE CONTROL OPTION
SECTION 2.1. Grant of Control Option. (a) Subject to the
terms and conditions of this Agreement, Grantor hereby grants to Purchaser an
irrevocable option to purchase all, but not less than all, of the Optioned
Shares.
(b) In consideration of the grant by Grantor of the Control
Option, Purchaser hereby pays to Grantor an amount in cash equal to $19.00 per
Optioned Share.
(c) Amounts paid by Purchaser pursuant to this Section 2.1
shall not be deducted from the Purchase Price payable at the Closing.
ARTICLE III
EXERCISE OF THE CONTROL OPTION
<PAGE>
SECTION 3.1. Exercise Periods. (a) The Control Option may be
exercised either as provided in Section 7.2(c), or by Purchaser at any time
during any of the following periods (each, an "Exercise Period"):
(i) the period commencing on the day of an Event and
ending 270 days after Purchaser receives written notice from or
on behalf of any Optionor of the occurrence of an Event;
(ii) the period commencing on the day of a Resignation
Event and ending 90 days after Purchaser receives a written
notice from (or on behalf of) any Optionor of the occurrence of
a Resignation Event;
(iii) the period commencing on the day that Purchaser
receives a written notice from (or on behalf of) Grantor
requesting that Purchaser exercise the Control Option (the
"Grantor's Notice"), which notice may be delivered only on or
after the fifth anniversary of the SPA Closing, and ending 180
days after such day;
(iv) the period commencing on the seventh anniversary of
the SPA Closing and ending on the eighth anniversary of the SPA
Closing; and
(v) the period commencing on the day of a Jones
Bankruptcy Event and ending 30 days after Purchaser receives
written notice of the occurrence of a Jones Bankruptcy Event.
provided that no Exercise Period will expire if immediately preceding such
expiration there is in effect a law, regulation or order that stays or
otherwise prohibits Purchaser from delivering an Exercise Notice after (or as a
result of) the occurrence of a Jones Bankruptcy Event.
(b) The notices delivered pursuant to clauses (i), (ii),
(iii) and (v) will be in the form attached hereto as Exhibit A. A Grantor's
Notice delivered pursuant to clause (iii) will be effective only if a similar
notice is simultaneously delivered to Purchaser under the Related Option
Agreements. Once delivered to Purchaser, a Grantor's Notice will be
irrevocable.
(c) Subject to the termination provisions of Section 3.6, the
parties acknowledge that at any given time there may be more than one Exercise
Period in effect at such time.
SECTION 3.2. Exercise of Control Option. (a) Purchaser may
exercise the Control Option at any time during an Exercise Period by delivery
to Grantor of an irrevocable written notice in the form attached hereto as
Exhibit B (the "Exercise Notice"). Purchaser has no obligation to deliver an
Exercise Notice and may allow the Control Option to expire and terminate
without purchasing the Optioned Shares. The Control Option may only be
exercised simultaneously with the exercise of the option granted under the
Related Option Agreements and the Closing hereunder will only take place
simultaneously with the closing of the exercise of the option granted under the
Related Option Agreements.
(b) The closing for the exercise of the Control Option (the
"Closing") will take place not more than 20 Business Days after the date that
the Exercise Notice is delivered to Grantor, provided that (x) if it is
necessary to determine Market Value pursuant to Section 3.4(b), the Closing
will be postponed as provided in Section 3.4(c) and (y) so long as Purchaser
<PAGE>
is using its reasonable efforts to consummate the Closing promptly, and
subject to Section 3.6 hereof, Purchaser may postpone the Closing until such
time as the following conditions have been satisfied or waived by Purchaser:
(i) The waiting period (including any extension thereof
resulting from additional inquiries, if any) under the HSR Act
applicable to the purchase of the Optioned Shares by Purchaser shall
have expired or been earlier terminated.
(ii) All other actions by, in respect of or filings with any
Governmental Authority in the United States, England or Spain, or any
other country where the Intercable Group conducts material business,
required to permit the consummation of the Closing shall have been
taken or obtained, as the case may be, and shall be in full force and
effect.
(iii) There shall not then be in effect any applicable law, rule
or regulation or any judgment, injunction, order or decree that has
one or more of the effects described in clauses (a), (b) or (c) of the
following paragraph (iv), provided that if after the date hereof BCI
or any of its Affiliates enters into a new line of business and at
such time there is a law, rule or regulation that has, or is
reasonably expected to have, one or more of such effects, then this
clause (iii) will not apply to any such law, rule or regulation.
(iv) There shall not then be instituted or pending any action or
proceeding before any federal or state court or other Governmental
Authority brought by a Governmental Authority challenging the
consummation of the Closing or seeking to (a) prevent BCI (or its
agent) from exercising the Control Option, (b) require BCI (or its
agent) to divest, or otherwise limit BCI's (or its agent's) ability
to exercise full rights of ownership over, the shares of Capital
Stock owned by BCI and its Affiliates, the Control Option or the
Optioned Shares or (c) require, after the exercise of the Control
Option, the Intercable Group to divest any material business or
assets or would impose a material limitation on the conduct of
Intercable Group's business, provided that (A) if after the date
hereof BCI or any of its Affiliates enters into a new line of
business and at such time there is a law, rule or regulation that
has, or is reasonably expected to have, one or more of the foregoing
effects, then this paragraph (iv) will not apply to actions or
proceedings that seek to enforce such law, rule or regulation and (B)
any actions or proceedings described in clause (a) or (b) will be
based on the business or assets of BCI or its Affiliates and not the
Purchaser.
(v) The Intercable Group Entities shall have received all
material third party consents required to be obtained in connection
with the Closing, in each case in form and substance reasonably
satisfactory to Purchaser.
(vi) The representations and warranties of Grantor contained in
Article V shall be true at and as of the date of the Closing, as if
made at and as of such date.
SECTION 3.3. Purchase Price For the Optioned Shares. (a) The
purchase price per Optioned Share will be calculated as follows:
(i) (A) if the Trigger Date occurs prior to or on June 18,
1995, 200% of the Market Value of a share of Class A Common Stock on
<PAGE>
the applicable Trigger Date, or (B) if the Trigger Date occurs after
June 18, 1995, the sum of (x) two-thirds of the Option Price on the
applicable Trigger Date and (y) one-third of 120% of the Market Value
of a share of Class A Common Stock on the applicable Trigger Date(1),
in each case reduced by
- -----------
(1) As an example of the calculation described in clause (i)(B), if on the
applicable Trigger Date the Option Price were $50 per Share and the Market
Value of a share of Class A Common Stock were $60 per share, the purchase
price would be 2/3 of $50 ($33.3333) plus 1/3 of 120% of $60 ($24), or
$57.3333 (computed to four decimal places).
(ii) the amount (or in the case of property other than cash,
fair market value) of any dividends and distributions other than
stock dividends paid, declared or otherwise distributed by the
Company in respect of the Optioned Shares between the date hereof and
the date of Closing. In the event any such dividends or
distributions are made in property other than cash, the fair market
value of such dividends or distributions will be determined pursuant
to the valuation procedures described in Section 3.4(b).
(b) The applicable "Trigger Date" will depend on the Exercise
Period under which Purchaser is delivering an Exercise Notice and will be
earliest of the following days:
(i) in the case of an Exercise Period described in clauses
(i) or (ii) of Section 3.1(a), the day of an Event or Resignation
Event, as the case may be;
(ii) in the case of an Exercise Period described in clause
(iii) of Section 3.1(a), the day immediately preceding the day on
which Grantor delivers a Grantor's Notice;
(iii) in the case of an Exercise Period described in clause (iv)
of Section 3.1(a), the day immediately preceding the day on which
Purchaser delivers an Exercise Notice; or
(iv) in the case of an Exercise Period described in clause (v)
of Section 3.1(a), the day immediately preceding the day of a Jones
Bankruptcy Event.
SECTION 3.4. Determination of Market Value. (a) For purposes
of this Agreement, "Market Value" of a share of Class A Common Stock means, on
any Trigger Date, the average of the daily closing prices on the NASDAQ
National Market System (or other principal exchange on which shares of Class A
Common Stock are listed or approved for trading) for the shares of Class A
Common Stock for the 20 consecutive trading days immediately prior to the
Trigger Date. The daily closing price for each such trading day shall be the
closing price, if reported, or, if the closing price is not reported, the
average of the closing "bid" and "asked" prices as reported by NASDAQ (or
other principal exchange). If the daily closing price per share of Class A
Common Stock is determined during a period following the declaration of a
dividend, distribution, recapitalization, reclassification or similar
transaction, then the Market Value shall be properly adjusted to take into
account ex-dividend trading.
(b) In the event that the shares of Class A Common Stock are
not traded on a national securities exchange, promptly after delivery of an
Exercise Notice Grantor and Purchaser shall in good faith negotiate the Market
Value on the applicable Trigger Date. If they are unable to reach agreement
within 10 Business Days, each of Grantor and Purchaser shall promptly select a
nationally recognized independent investment banking firm to determine the
Market Value of a share of Class A Common Stock, which will be based on a
public market valuation of the Company and its Subsidiaries as if the Class A
Shares were traded on the NASDAQ National Market System and a non-controlling
block of approximately 1,000,000 Class A Shares had been purchased on the
<PAGE>
Trigger Date by a willing institutional purchaser. If 20 Business Days after
their selection such firms cannot agree as to such Market Value, each firm will
submit to Grantor and Purchaser a proposed Market Value and within 10 Business
Days they shall mutually select a third nationally recognized independent
investment banking firm which shall be engaged to make such determination,
which Market Value shall be within the range of values proposed by the two
investment banking firms. Such third investment banking firm shall make such
determination (the "Final Determination") by written notice to Grantor and
Purchaser within 20 Business Days of its engagement and its judgment as to all
matters relating to its determination shall be binding upon the parties
hereto. Each party will pay the fees and expenses of the initial investment
banking firm hired by such party. The fees and out-of-pocket expenses of the
third investment banking firm shall be paid equally by Grantor and Purchaser,
provided that if Purchaser withdraws an Exercise Notice pursuant to the
following paragraph (c), Purchaser shall pay the fees and expenses of such
third investment banker.
(c) At any time prior to 10 Business Days after the receipt
by Purchaser of a written determination of the Market Value pursuant to the
immediately preceding paragraph (b) (the "Withdrawal Period"), Purchaser shall
have the right to withdraw its Exercise Notice by written notice to Grantor.
Notwithstanding the immediately preceding sentence, in the event the
investment banking firm selected by Purchaser submits a proposed Market Value
pursuant to such paragraph (b), Purchaser may withdraw its Exercise Notice
only for 10 Business Days after the receipt by Purchaser of such proposed
Market Value, provided that if (but only if) the Final Determination is
greater than 110% of such proposed Market Value, Purchaser will have 10
Business Days after the receipt by Purchaser of such Final Determination to
withdraw its Exercise Notice. If Purchaser does not withdraw such Exercise
Notice pursuant to this paragraph (c), Purchaser will notify Grantor within
five Business Days after the expiration of such Withdrawal Period as to the
time and place of the Closing, which shall be not more than 20 Business Days
after the expiration of such Withdrawal Period, provided that, subject to
Section 3.6, Purchaser may postpone such closing until such time as the
conditions described in Section 3.2(b) have been satisfied or waived by
Purchaser.
SECTION 3.5. Closing. (a) At the Closing, Grantor shall
deliver to Purchaser a certificate or certificates or other documentation
representing the Optioned Shares, accompanied by stock powers duly executed
in blank or other appropriate assignment documentation reasonably satisfactory
to Purchaser.
(b) At the Closing, Purchaser shall deliver to Grantor an
amount in cash equal to the purchase price for such Optioned Shares,
calculated pursuant to Section 3.3(a). Such purchase price will be paid by
wire transfer to a bank account designated by Grantor not later than five
Business Days prior to the Closing. Notwithstanding the foregoing, upon the
mutual agreement of Purchaser and Grantor, all or a portion of the Purchase
Price may be paid in shares of common stock of BCE Inc.
SECTION 3.6. Termination of Control Option. (a) The Control
Option shall terminate at 5:00 p.m. Denver time when the first Exercise Period
described in clauses (i), (iii) or (iv) of Section 3.1 expires (the
"Termination Time"), provided that, subject to the following paragraph (b),
the Control Option will not terminate if Purchaser has previously delivered to
Grantor an Exercise Notice. The Control Option shall also terminate (A) at
such time as Purchaser withdraws an Exercise Notice pursuant to Section
3.4(c), or (B) if the Closing has been postponed pursuant to Section 3.2(b),
ten Business Days after Grantor has delivered written notice to Purchaser
<PAGE>
stating that it believes Purchaser is not using its reasonable efforts to
consummate the Closing promptly (which notice will set forth the basis for
such claim) and Purchaser has failed to use its reasonable efforts prior to
the expiration of such period to cure the problem identified by Grantor. The
Control Option will not terminate upon the expiration of the Exercise Periods
described in clauses (ii) and (v) of Section 3.1.
(b) Notwithstanding anything in this Agreement to the
contrary, (i) if an Exercise Period is extended pursuant to the proviso in
Section 3.1(a), the Termination Time will occur twenty Business Days after
such stay or prohibition has been lifted and Purchaser has received notice of
such action and (ii) each Exercise Notice shall terminate, and be of no
further force or effect, 18 months after its delivery, unless a Closing shall
have occurred by such time.
SECTION 3.7. Adjustment Upon Changes in Capitalization or
Merger.If any change in the Company's capital stock shall occur by reason of
stock dividends, stock splits, mergers, consolidations, recapitalizations,
combinations, conversions, exchanges of shares, dividends or other changes in
the corporate or capital structure of the Company, the number and kind of
shares or securities subject to the Control Option and the Purchase Price
shall be adjusted so that Purchaser shall receive upon exercise of the Control
Option the number and class of shares or other securities or property that
Purchaser would have received in respect of the Optioned Shares purchasable
upon exercise of the Control Option if the Control Option had been exercised
immediately prior to such event.
ARTICLE IV
COVENANTS
SECTION 4.1. No Proxies for or Encumbrances on Optioned
Shares. Except as contemplated by this Agreement, until the termination of
this Agreement pursuant to Section 10.1, Grantor shall not, directly or
indirectly, (i) grant any proxies (other than a revocable proxy granted in
connection with a meeting of stockholders) or enter into any voting trust or
other agreement or arrangement with respect to the voting of any Optioned
Shares, (ii) sell, assign, transfer, encumber or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the direct or indirect sale, assignment, transfer, encumbrance or
other disposition of, any Optioned Shares or (iii) seek or solicit any
transaction or arrangement described in clauses (i) and (ii). Grantor will
notify Purchaser promptly (and provide all details reasonably requested by
Purchaser) if Grantor is approached or solicited, directly or indirectly, by
any person with respect to any of the foregoing. Nothing herein shall be
deemed to prevent or restrict (x) Grantor or its Affiliates from voting its
shares in its sole discretion on all matters, except as otherwise agreed to
between Grantor, its Affiliates and BCI in the Shareholders Agreement or
otherwise or (ii) any Affiliate of Grantor from taking or refraining from
taking any other action not provided herein or otherwise agreed to between
Grantor, its Affiliates and BCI in the Shareholders Agreement or otherwise.
SECTION 4.2. Further Assurances. BCI (and its agent) and
Grantor will each execute and deliver or cause to be executed and delivered
all further documents and instruments and use their reasonable best efforts to
secure such consents and take all such further action as may be reasonably
necessary in order to consummate the transactions contemplated hereby or to
enable Purchaser and BCI to enjoy all benefits and rights of the Optioned
Shares.
<PAGE>
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF GRANTOR
Grantor represents and warrants to Purchaser that, except as
disclosed in the Schedules to the Stock Purchase Agreement, as of the date
hereof and, in the case of Sections 5.1, 5.2 and 5.6 the date of the Closing:
SECTION 5.1. Valid Title. Grantor is the sole record and
beneficial owner of the Optioned Shares, free and clear of any Lien (other
than the Security Interest) and any other limitation or restriction (including
any limitation or restriction on the right to vote, sell or otherwise dispose
of or transfer any Optioned Share). At the Closing, Grantor will convey good
and valid title to the Optioned Shares, free and clear of any Lien and any
such limitation or restriction (other than offer and sale restrictions imposed
by securities laws).
SECTION 5.2. Existence. Grantor is a trust duly organized,
validly existing and in good standing under the laws of Delaware and has all
powers and all material governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted.
Grantor has heretofore delivered to Purchaser true and complete copies of its
Trust Agreement and trust certificate as currently in effect.
SECTION 5.3. Binding Effect. The execution, delivery and
performance by Grantor of this Agreement are within Grantor's power and have
been duly authorized by all necessary action on the part of Grantor. This
Agreement has been duly executed and delivered by Grantor, and assuming the
accuracy of Purchaser's representations and warranties herein, is a valid and
binding agreement of Grantor.
SECTION 5.4. Governmental Authorization. Assuming the
accuracy of BCI's representations and warranties in the Shareholders
Agreement, the execution, delivery and performance by Grantor of this Agreement
requires no action by Grantor in respect of, or filing by Grantor with, any
Governmental Authority other than (i) compliance with any applicable
requirements of the HSR Act and (ii) any such action or filing as to which the
failure to make or obtain would not reasonably expected to have, individually
or in the aggregate, a material adverse effect on the business, assets,
results of operations, properties or condition (financial or otherwise) of
Grantor.
SECTION 5.5. Non-Contravention. The execution, delivery and
performance by Grantor of this Agreement do not: (i) violate the Trust
Agreement or trust certificate of Grantor, (ii) assuming the accuracy of
Purchaser's representations and warranties herein and compliance with the
matters referred to in Section 5.4, violate any applicable law, rule,
regulation, judgment, injunction, order or decree binding on Grantor, (iii)
assuming the accuracy of Purchaser's representations and warranties herein,
require any consent or other action by any Person under, or constitute a
default under, any material agreement or other instrument binding upon
Grantor, or (iv) except as contemplated by Article IX, result in the creation
or imposition of any Lien on any material asset of Grantor, except in the case
of clauses (ii), (iii) and (iv), to the extent that any such violation,
failure to obtain any such consent or other action, default, right, loss or
Lien would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the business, assets, results of
<PAGE>
operations, properties or financial condition of Grantor.
SECTION 5.6. Finder's Fees. Except as disclosed to BCI, there
is no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of Grantor or its Affiliates who
might be entitled to any fee or commission from Purchaser, BCI or any
Intercable Group Entity in connection with the grant or exercise of the
Control Option.
SECTION 5.7. Validity, Perfection and Priority of Security
Interest. (a) Upon the delivery of the certificates representing the
Optioned Shares to Purchaser in accordance with Section 9.2, Purchaser will
have a valid and perfected security interest in the Collateral subject to no
prior Lien. No registration, recordation or filing with any governmental
body, agency or official is required in connection with (i) the execution or
delivery of this Agreement or necessary for the validity or enforceability
hereof (except as covered in Sections 5.4 and 5.5) or (ii) for the perfection
or enforcement of the Security Interest. Neither Grantor nor any of its
Affiliates has performed or will perform any acts which would prevent
Purchaser from enforcing any of the terms and conditions of this Agreement or
which would materially limit Purchaser in any such enforcement. Without
limiting the generality of the foregoing, the parties hereto acknowledge that
in matters relating to Franchise Agreements (as defined in the Shareholders
Agreement) and material contracts, an Affiliate of Grantor will not be in
breach of the immediately preceding sentence if it is in compliance with its
obligations under Section 5.2 of the Shareholders Agreement concerning such
matters.
(b) The chief executive office of Grantor is located at its
address set forth in Section 10.4. Under the Uniform Commercial Code as in
effect in the State in which such office is located, no local filing is
required to perfect a security interest in collateral consisting of general
intangibles other than any such collateral arising from or relating to farm
products.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
SECTION 6.1. Acquisition for Purchaser's Account. Purchaser
represents and warrants to Grantor that as of the date hereof and the date of
the Closing the Optioned Shares to be acquired upon exercise of the Control
Option will be acquired by Purchaser as the agent for BCI's own account and
not with a view to the public distribution thereof and will not be transferred
except in compliance with the Securities Act.
ARTICLE VII
CHANGE IN LAW
SECTION 7.1. Change in Law. (a) If a Change in Law after the
execution and delivery of this Agreement and prior to the delivery of an
Exercise Notice would be reasonably likely to (i) prevent BCI (or its agent)
from exercising the Control Option, (ii) require BCI (or its agent) to divest,
or otherwise limit BCI's (or its agent's) ability to exercise full rights of
ownership over, the shares of Capital Stock owned by BCI and its Affiliates,
the Control Option or the Optioned Shares or (iii) after the exercise of the
Control Option, require the Intercable Group to divest any material business
<PAGE>
or assets or impose a material limitation on the conduct of Intercable Group's
business, BCI may instruct the Purchaser to dispose of the Control Option and
any other securities of the Intercable Group Entities owned by BCI and its
Affiliates pursuant to the terms and procedures of this Article VII.
(b) Purchaser acknowledges that it will have no rights under
this Article VII if after the date hereof BCI or any of its Subsidiaries
enters into a new line of business and at such time there is a law, rule or
regulation that has one or more of the effects described in clauses (i), (ii)
or (iii) of the preceding paragraph (a).
SECTION 7.2. Right of First Offer. (a) In the event
Purchaser is instructed by BCI to dispose of the Control Option after the
occurrence of an event described in Section 7.1, Purchaser shall, by written
notice to Grantor, first offer the Control Option to Grantor at a price equal
to the aggregate consideration paid by Purchaser pursuant to Section 2.1, plus
interest from the date of this Agreement to and including the date the Control
Option is purchased by Grantor (or an Affiliate of Grantor), at a rate per
annum equal to 12%, compounded annually (the "Offer Price"). Any such written
notice shall be in the form of Exhibit C hereto (the "Offer Notice"), but will
be effective only if a similar notice is simultaneously delivered by Purchaser
under the Related Option Agreements.
(b) For a period of 270 days after receipt of the Offer
Notice, Grantor (or, if Grantor elects not to purchase the Control Option,
Jones International or any of its Affiliates, including the Company) may, by a
written notice to Purchaser in the form attached as Exhibit D hereto (an
"Acceptance Notice"), elect to purchase the Control Option at the Offer Price
and, if it so elects, may also purchase all (but not less than all) of (i) the
shares of Common Stock and Class A Common Stock then held by BCI and its
Subsidiaries at a price per share equal to the Market Value of such shares
(calculated pursuant to Section 3.4 and assuming that the Trigger Date is the
day immediately preceding the day the Offer Notice is delivered) and (ii) any
other debt or equity securities of the Intercable Group Entities then held by
BCI and its Subsidiaries at a price equal to the fair market value of such
securities on the day immediately preceding the day on which the Offer Notice
is delivered (such value to be determined pursuant to the valuation procedures
described in Section 3.4(b)).
(c) If Grantor, Jones International or any of its Affiliates
(including the Company) fail to elect to purchase the Control Option within
270 days after receipt of the Offer Notice, then Purchaser may, for a period
of 360 days following the expiration of such time period, sell (or enter into
an agreement to sell) the Control Option to a third party, provided that in
the event of any such sale the third party purchaser must simultaneously
exercise the Control Option and deliver the Option Price to Grantor in exchange
for the Optioned Shares (in such event, the "Trigger Date" will be the day
which is 270 days after receipt by Grantor of an Offer Notice).
(d) If Grantor fails to elect to purchase the Control Option
at the Offer Price and Purchaser shall not have sold or entered into an
agreement to sell the Control Option prior to the expiration of the 360 day
period specified in paragraph (c) above, Purchaser must, prior to selling the
Control Option, again offer the Control Option to Grantor pursuant to the
terms and procedures of this Section 7.2.
(e) In the event Purchaser is instructed by BCI to exercise
its rights under Sections 7.1 and 7.2, Purchaser and Grantor will use
reasonable efforts to identify a suitable partner to purchase the Control
Option and the shares of Class A Common Stock held by Purchaser. Purchaser
<PAGE>
will consult with Jones before selling the Control Option to a third party and
will consider Jones' views as to the suitability of potential purchasers.
SECTION 7.3. Closing Procedures. (a) The delivery of an
Acceptance Notice will constitute a contract between Purchaser and Grantor
(and any Affiliate of Grantor that delivers the Acceptance Notice) for the
purchase and sale of (i) the Control Option at the Offer Price, and (ii) if
applicable, the securities described in clauses (i) and (ii) of Section 7.2(b)
(the "Additional Securities") at the price described therein.
(b) If Grantor (or its Affiliate) timely delivers an
Acceptance Notice, the closing for the purchase and sale of the Control Option
and the Additional Securities will take place 20 Business Days after delivery
of such Acceptance Notice.
(c) The purchase price for the Control Option and the
Additional Securities will be paid by wire transfer in immediately available
funds to a bank account designated by Purchaser not less than five Business
Days prior to Closing.
(d) At any closing hereunder, Purchaser will deliver to the
purchaser good and valid title to the Control Option and the Additional
Securities, free and clear of any Lien.
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
SECTION 8.1. Survival. The covenants, agreements,
representations and warranties of the parties hereto contained in this
Agreement or in any certificate or other writing delivered pursuant hereto or
in connection herewith shall survive the Closing until one year after the date
of the Closing, provided that the representation and warranty contained in
Section 5.1 shall survive indefinitely. Notwithstanding the preceding
sentence, any covenant, agreement, representation or warranty in respect of
which indemnity may be sought under this Agreement shall survive the time at
which it would otherwise terminate pursuant to the preceding sentence, if
notice of the inaccuracy or breach thereof giving rise to such right of
indemnity shall have been given to the party against whom such indemnity may
be sought prior to such time. Any such notice shall set forth the basis of
the claim for indemnification (including reference to the specific details
regarding the manner in which the covenants, agreements, representations or
warranties are alleged to have been breached).
SECTION 8.2. Indemnification. Grantor hereby indemnifies
Purchaser against and agrees to hold it harmless from any and all damage,
loss, liability and expense other than consequential damages (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any action, suit or
proceeding) ("Damages") incurred or suffered by Purchaser arising out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by Grantor pursuant to this Agreement.
SECTION 8.3. Procedures. The party seeking indemnification
under Section 8.2 (the "Indemnified Party") agrees to give prompt notice to
the party against whom indemnity is sought (the "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding
in respect of which indemnity may be sought under such Section. The
Indemnifying Party may, and at the request of the Indemnified Party shall
<PAGE>
participate in and control the defense of any such suit, action or proceeding
at its own expense. The Indemnifying Party shall not be liable under Section
8.2 for any settlement effected without its consent of any claim, litigation
or proceeding in respect of which indemnity may be sought hereunder.
ARTICLE IX
PLEDGE OF OPTIONED SHARES
SECTION 9.1. The Security Interest. In order to secure the
performance of the Secured Obligations in accordance with the terms thereof,
and to secure the performance of all the obligations of Grantor hereunder:
(a) Grantor hereby assigns and pledges to Purchaser and grants to
Purchaser a security interest in the Optioned Shares, and all of its rights
and privileges with respect to the Optioned Shares, and all income and profits
thereon (other than dividends paid by the Company in respect of the Optioned
Shares prior to any exercise by the Purchaser of its remedies hereunder, which
will paid over to Grantor as provided in Section 9.4) and all proceeds of the
foregoing, and any and all property referred to in Section 9.1(b) (the
"Collateral").
(b) In the event any change in the Company's capital stock
described in Section 3.7 shall occur, Grantor will immediately pledge and
deposit with Purchaser any securities (and any share certificates or other
instruments evidencing such securities) issued by the Company in respect of
the Optioned Shares, and all income and profits thereon (other than dividends
paid by the Company in respect of the Optioned Shares prior to any exercise by
the Purchaser of its remedies hereunder), as additional security for the
Secured Obligations. All such securities, share certificates, instruments and
other property constitute Collateral and are subject to all provisions of this
Agreement.
(c) The Security Interest is granted as security only and shall not
subject Purchaser to, or transfer or in any way affect or modify, any
obligation or liability of Grantor with respect to any of the Collateral or any
transaction in connection therewith.
(d) In the event Grantor fails to perform any Secured
Obligation, Purchaser shall be entitled to exercise all rights of a secured
party under the Uniform Commercial Code (whether or not in effect in the
jurisdiction where the rights are exercised) and such other rights as may
otherwise be provided to a secured party under applicable law.
SECTION 9.2. Delivery of Collateral. All certificates
representing Optioned Shares (or securities described in Section 9.1(b))
delivered to Purchaser by Grantor pursuant hereto shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, with signatures appropriately guaranteed, and
accompanied by any required transfer tax stamps, all in form and substance
satisfactory to Purchaser.
SECTION 9.3. Further Assurances. (a) Grantor agrees that it
will, at Purchaser's expense and in such manner and form as Purchaser may
reasonably require, execute, deliver, file and record any financing statement,
specific assignment or other paper and take any other action that may be
necessary or desirable that Purchaser may request, in order to create,
preserve, perfect or validate the Security Interest or to enable Purchaser to
exercise and enforce its rights hereunder with respect to any of the
<PAGE>
Collateral. To the extent permitted by applicable law, Grantor hereby
authorizes Purchaser to execute and file, in the name of Grantor or otherwise,
Uniform Commercial Code financing statements (which may be carbon,
photographic, photostatic or other reproductions of this Agreement or of a
financing statement relating to this Agreement) which Purchaser in its
reasonable discretion may deem necessary or appropriate to further perfect the
Security Interest.
(b) Grantor agrees that it will not change (i) its name,
identity or structure in any manner or (ii) the location of its chief
executive office unless it shall have given Purchaser not less than 30 days'
prior notice thereof.
(c) In connection with an exercise of rights pursuant to
Section 9.1(d), Purchaser may cause any or all of the Optioned Shares to be
transferred of record into the name of Purchaser, BCI or any of their
nominees. After notice thereof, Grantor will promptly give to the Purchaser
(or its designee) copies of any notices or other communications received by it
with respect to the Optioned Shares registered in the name of Grantor, and
Purchaser will promptly give to Grantor copies of any notices and
communications received by Purchaser (or BCI or a nominee) with respect to any
Optioned Shares registered in the name of Purchaser (or BCI or a nominee).
SECTION 9.4. Right to Vote and Receive Dividends on
Collateral. (a) Until such time (if ever) that Purchaser shall have
exercised, pursuant to Section 9.1(d), any of its remedies in respect of the
Collateral, Grantor shall retain all voting rights with respect to the Optioned
Shares and shall have the right to receive all dividends paid by the Company
in respect of the Collateral and Purchaser shall take all such action as
Grantor may deem necessary or appropriate to give effect to such right. All
such dividends which are received by Purchaser shall be received in trust for
the benefit of Grantor and shall promptly be paid over to Grantor.
(b) In the event Purchaser exercises, pursuant to Section
9.1(d), any of its remedies in respect of the Collateral, Purchaser shall
thereafter be entitled to receive all dividends paid by the Company in respect
of the Collateral, but there will be no Option Price adjustment pursuant to
Section 3.3(a)(ii) in respect of any such dividends retained by Purchaser.
SECTION 9.5. Limitation on Duty of Purchaser in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof,
Purchaser shall have no duty as to any Collateral in its possession or control
or in the possession or control of any agent or bailee or any income thereon
or as to the preservation of rights against prior parties or any other rights
pertaining thereto. Purchaser shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss
or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any agent or bailee selected by
Purchaser in good faith.
SECTION 9.6. Termination of Security Interest; Release of
Collateral. The Security Interest granted hereunder shall terminate, and all
rights to the Collateral shall revert to the Grantor, at the termination of
this Agreement pursuant to Section 10.1 (unless the Optioned Shares have been
purchased as provided herein). Upon any such termination of the Security
Interests or release of Collateral, Purchaser will deliver the Collateral to
Grantor and will execute and deliver to Grantor such documents as Grantor
shall reasonably request to evidence the termination of the Security Interest
<PAGE>
or the release of such Collateral, as the case may be.
SECTION 9.7. Successors and Assigns. The provisions of this
Article IX are for the benefit of Purchaser and Grantor and their respective
successors and assigns, and in the event of an assignment permitted by Section
10.2 of all or any of the Secured Obligations, the rights hereunder, to the
extent applicable to the indebtedness so assigned, may be transferred with such
indebtedness.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination. (a) This Agreement will terminate
automatically and will be of no further force or effect at the time the
Control Option terminates (at the Termination Time or otherwise) or a closing
pursuant to Section 7.2 or 7.3, provided that Sections 5.1, 5.6 and 6.1 will
survive any such termination.
(b) The termination of this Agreement pursuant to Section 10.1
shall be without liability of any party (or any stockholder, director,
officer, employee, agent, consultant or representative of such party) to any
other party to this Agreement, provided that no such termination shall relieve
any party for any liability such party may have for a material willful breach
hereof.
SECTION 10.2. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors. No party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement
without the written consent of the other parties hereto, provided that (i)
Purchaser may assign its rights, but not its obligations, hereunder to any
Eligible Assignee (or an agent of such Eligible Assignee), (ii) Purchaser may
assign its rights and obligations hereunder as provided in Article VII and
(iii) Purchaser may assign its rights (but not its obligations) hereunder at
any time after the delivery by it of an Exercise Notice to Grantor if at the
time of any such assignment pursuant to this clause (iii) the assignee
purchases the Optioned Shares pursuant to Section 3.5.
(b) For purposes of this Agreement, "Eligible Assignee" means
BCI and any entity which at the time of such assignment is, and thereafter
during the term of this Agreement remains, (i) controlled, directly or
indirectly, by BCI and (ii) not primarily engaged in, or a Subsidiary of BCI
primarily engaged in, the direct operation or management of (x) cable
television systems located in North America, (y) wireline local communications
services located in the United States of America or (z) educational programming
services, other than BCI and any Person that is an Intercable Group Entity or
a JI Group Entity (each a "Restricted Business"). The parties hereto
acknowledge that the foregoing provisions are not intended to restrict the
Purchaser from assigning its rights hereunder to a Subsidiary of BCI that is a
holding company of an entity or entities primarily engaged in a Restricted
Business.
SECTION 10.3. Specific Performance. The parties agree that
(i) Purchaser would be irreparably damaged if for any reason Grantor failed to
sell the Optioned Shares upon exercise of the Control Option or to perform any
of Grantor's other obligations under this Agreement, and that Purchaser would
not have an adequate remedy at law for money damages in such event and (ii)
Grantor would be irreparably damaged if for any reason Purchaser failed to
<PAGE>
maintain the Collateral in accordance with the terms of this Agreement or to
perform any of Purchaser's other obligations under this Agreement, and that
Grantor would not have an adequate remedy at law for money damages in such
event. Accordingly, each party shall be entitled to specific performance and
injunctive and other equitable relief to enforce the performance of this
Agreement by the other party. This provision is without prejudice to any other
rights that each party may have against the other party for any failure to
perform their obligations under this Agreement.
SECTION 10.4. Notices. All notices, requests, claims, demands
and other communications hereunder shall be deemed to have been duly given
when delivered in person, by cable, telegram or telex, or by registered or
certified mail (postage prepaid, return receipt requested):
if to Grantor, to each of:
Robert S. Zinn
431 Leyden Street
Denver, CO 80220
Telephone and Fax: (303)333-5054
Christine Jones Marocco
25 East End Avenue
Apt. 14F
New York, New York 10028
Telephone: (212)737-4722
John P. Garniewski, Jr.
2625 Concord Pike
P.O.Box 7108
Wilmington, Delaware 19803
Telephone: 302-477-1260
302-478-8524
with a copy to:
Jones International, Ltd.
9697 East Mineral Avenue
Englewood, Colorado 80155
Fax: 303-784-8510
Attention: Glenn R. Jones and General
Counsel
if to Purchaser:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Fax: 212-648-5111
Attention: Jack Fruchtman
with copies to:
Bell Canada International Inc.
1000, rue de la Gauchetiere West
Suite 1100
Montreal, Quebec
Canada H3B 4Y8
Fax: 514-392-2342
Attention: Chief Financial Officer
<PAGE>
and General Counsel
Any notice delivered after business hours or on any day which is not a
Business Day shall be deemed for purposes of computing any time period
hereunder to have been delivered on the succeeding Business Day.
SECTION 10.5. Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost
or expense.
SECTION 10.6. Amendments and Waivers. (a) Any provision of
this Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by each party
to this Agreement, or in the case of a waiver, by the party against whom the
waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 10.7. Governing Law. This Agreement shall be
construed in accordance with and governed by the law of the State of Delaware,
without regard to the conflicts of law rules of such state.
SECTION 10.8. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by all of the other parties
hereto.
SECTION 10.9. Headings. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
SECTION 10.10. Entire Agreement. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter of
this Agreement and supersedes all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter of
this Agreement.
SECTION 10.11. Separability. In case any provision of this
Agreement 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 10.12. Agency Capacity of Purchaser. Grantor
expressly acknowledges and agrees that Purchaser is acting solely as agent on
behalf of BCI and not in a principal capacity. Grantor further acknowledges
and agrees that in executing and delivering this Agreement, making any
payment, delivering any notice or instruction, making any determination or
taking any other action provided for or contemplated herein, Purchaser is
acting and shall act solely upon the instruction and at the direction of BCI.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
<PAGE>
JONES INTERNATIONAL GRANTOR
BUSINESS TRUST
By: _________________________
Name: Robert S. Zinn
Title: Managing Trustee
By: _________________________
Name: Christine Jones Marocco
Title: Managing Trustee
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as agent for Bell
Canada International Inc.
By: _________________________
Title:
SCHEDULE I
THE OPTION PRICE
The Option Price on any Trigger Date will be based on the following table:
Anniversary
of the
SPA Closing Base Price
June 19, 1995 28.50
1 40.32
2 45.16
3 50.58
4 56.65
5 63.44
6 71.06
7 79.58
8 89.13
The Option Price on any Trigger Date will equal the sum of:
(i) the Base Price on the anniversary of the SPA Closing
immediately preceding the Trigger Date, and
(ii) a pro rata portion (based on the number of days elapsed between
the most recent anniversary of the SPA Closing and the Trigger
Date) of the difference between such Base Price and the Base
Price on the immediately succeeding anniversary of the SPA
Closing.
<PAGE>
EXHIBIT A
[Form of Exercise Period Notice]
[Date]
To Morgan Guaranty Trust Company of New York:
Reference is made to the Option Agreement (the "Agreement")
dated as of December 20, 1994 between Morgan Guaranty Trust Company of New
York, as agent for Bell Canada International Inc., and Jones International
Grantor Business Trust. Capitalized terms used but not defined herein have
the meanings set forth in the Agreement. This Grantor's Notice is being
delivered to you pursuant to Section 3.1 of the Agreement.
Grantor hereby irrevocably notifies Purchaser that [an Event
has occurred on [date] and an Exercise Period has commenced pursuant to
subsection 3.1(a)(i) of the Agreement. Such Exercise Period will expire on
270 days from receipt by you of this Grantor's Notice.](*) [a Resignation
Event has occurred on [date] and an Exercise Period has commenced pursuant to
subsection 3.1(a)(ii) of the Agreement. Such Exercise Period will expire on
________, which is 90 days from receipt by you of this Grantor's Notice.](**)
[pursuant to subsection 3.1(a)(iii) of the Agreement, Grantor hereby requests
that Purchaser determine whether it wishes to exercise the Control Option on
or prior to ________, which is 180 days from receipt by you of this Grantor's
Notice.](***) [a Jones Bankruptcy Event has occurred on [date] and an Exercise
Period has commenced pursuant to subsection 3.1(a)(v) of the Agreement. Such
Exercise Period will expire on ________, which is 30 days from receipt by you
of this Grantor's Notice.](****)
- -----------
*Insert if Section 3.1(a)(i) Grantor's Notice.
**Insert if Section 3.1(a)(ii) Grantor's Notice.
***Insert if Section 3.1(a)(iii) Grantor's Notice.
****Insert if Section 3.1(a)(v) Grantor's Notice.
If Purchaser wishes to exercise the Control Option pursuant to
the terms and conditions of the Agreement, please respond by delivery of an
Exercise Notice in
accordance with Section 3.2 of the Agreement prior to the expiration of the
Exercise Period.
JONES INTERNATIONAL GRANTOR
BUSINESS TRUST
By: _________________________
EXHIBIT B
[Form of Exercise Notice]
[Date]
To Jones International Grantor Business Trust:
Reference is made to the Option Agreement (the "Agreement"
dated as of December 20, 1994 between Morgan Guaranty Trust Company of New
York, as agent for Bell Canada International Inc., and Jones International
Grantor Business Trust. Capitalized terms used but not defined herein have
the meaning set forth in the Agreement. This Exercise Notice is being
delivered to you pursuant to Section 3.2 of the Agreement and in response to
your Exercise Period Notice dated as of [date].
<PAGE>
Purchaser hereby [irrevocably elects to exercise the Control
Option and purchase the Optioned Shares for an aggregate purchase price of
$__________ . Schedule I hereto sets forth our calculation of the purchase
price per share pursuant to Sections 3.3 and 3.4(a) of the Agreement. Please
contact us so that we may agree on a mutually acceptable time and place for
closing.] [elects to exercise the Control Option and purchase the Optioned
Shares at a price to be determined pursuant to Section 3.3 and the procedures
described in Section 3.4(b) of the Agreement. Please contact us so that we
may attempt to negotiate the Market Value of _______ within 10 Business Days
of the date hereof.](*)
Please contact us so that we may agree on a mutually acceptable
time and place for closing.
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as agent for Bell
Canada International Inc.
By: _________________________
______________
(*) Use second option only if a Market Value must be determined pursuant
to Section 3.4(b).
EXHIBIT C
[Form of Offer Notice]
[Date]
To Jones International Grantor Business Trust:
Reference is made to the Option Agreement (the "Agreement")
dated as of December 20, 1994 between Morgan Guaranty Trust Company of New
York, as agent for Bell Canada International Inc., and Jones International
Grantor Business Trust. Capitalized terms used but not defined herein have
the meanings set forth in the Agreement. This Offer Notice is being delivered
to you pursuant to Section 7.2 of the Agreement.
Purchaser wishes to dispose of the Control Option and hereby
irrevocably offers to sell the Control Option to Grantor (or, if Grantor
elects not to purchase the Control Option, Jones International, Ltd. or any of
its Affiliates, including the Company) for the Offer Price (as defined in the
Agreement), which we calculate to be $__________ as of the date of this Offer
Notice.
If Grantor (or Jones International, Ltd. or any of its
Affiliates) wishes to purchase the Control Option for the Offer Price, please
respond by delivery of an Acceptance Notice in accordance with subsection
7.2(b) of the Agreement on or prior to that date which is 270 days from
receipt by you of this Offer Notice.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as agent for
Bell Canada International Inc.
By: _________________________
<PAGE>
EXHIBIT D
[Form of Acceptance Notice]
[Date]
To Morgan Guaranty Trust Company of New York:
Reference is made to the Option Agreement (the "Agreement")
dated as of December 20, 1994 between Morgan Guaranty Trust Company of New
York, as agent for Bell Canada International Inc., and Jones International
Grantor Business Trust. Capitalized terms used but not defined herein have
the meaning set forth in the Agreement. This Acceptance Notice is being
delivered to you pursuant to Section 7.2 of the Agreement and in response to
Purchaser's Offer Notice dated as of [date].
[Grantor](*) hereby irrevocably agrees to exercise the Control
Option and purchase the Optioned Shares for the Offer Price, which we
calculate to be $___________ as of the date hereof. [Grantor also hereby
elects to purchase (i) all shares of Common Stock and Class A Common Stock and
(ii) any other debt or equity securities of the Intercable Group Entities held
by Purchaser and its Subsidiaries on the date hereof for an aggregate purchase
price to be determined pursuant to Section 7.2(b) of the Agreement.](**)
Please contact us so that we may agree on a mutually acceptable
time and place for closing [and the purchase price of the additional
securities](**).
[JONES INTERNATIONAL GRANTOR
BUSINESS TRUST](*)
By: _________________________
- -----------
* Insert name of Grantor, Jones International, Ltd. or name of Affiliate,
as applicable.
** Insert if appropriate.
NEWS RELEASE [LOGO]
December 19, 1994
Bell Canada International to Complete Purchase in Jones Intercable
MONTREAL - Bell Canada International Inc. (BCI) announced today that it
plans to complete its acquisition of a 30 per cent interest in Jones
Intercable, Inc.
Tomorrow, December 20, BCI will invest approximately US$204 million in
Jones Intercable at a price of US$27.50 per share. This is in addition to
the US$55 million already invested in Jones in March 1994, at US$22 per
share. Also, BCI will acquire equity interests in Jones Education
Networks, Inc., Jones Lightwave, Inc. and Jones Entertainment Group for an
additional consideration of US$35 million.
Derek H. Burney, chairman and chief executive officer of BCI stated, ``We
are pleased about concluding this transaction. The furtherance of our
relationship with Jones gives BCI a significant presence in the dynamic
U.S. market and will provide us with valuable experience in educational,
multimedia and alternative access services.'' He added, ``We believe this
investment will support Jones Intercable's vigorous growth in the U.S.
telecommunications market.''
The transaction will provide Jones Intercable with access to new
technologies and skills, in addition to providing greater financial
flexibility and resources. ``We are extremely pleased with this
transaction, and are convinced that the strategic alliance with BCI will
bring great benefit to Jones Intercable, its associates and its
shareholders,'' said Glenn R. Jones, chairman and chief executive officer
of Jones Intercable.
In addition, BCI has committed to invest an additional US$140 million in
Jones by participating up to a level of 30 per cent in additional equity
offerings the company may undertake.
Jones Intercable also announced that it has completed its merger with
Jones Spacelink, Inc.
BCI will nominate three directors to the Board of directors of Jones
Intercable, and, with Jones International, Ltd., will name up to three
independent members of the Board.
Bell Canada International Inc. is responsible for the international
telecommunications investments and services of its parent company, BCE
Inc., Canada's largest telecommunications company.
Jones Intercable, Inc., is one of the largest cable television operations
in the United States. It is also the world's largest cable television
management company, managing cable operations for publicly held entities.
It manages cable operations in 20 states and three countries.
For information:
Daniel E. Somers Patrick J. Lombardi
Bell Canada International Inc. Jones Financial Group, Inc.
(303) 792-3111 (303) 792-3111
