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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 20, 1997
JONES INTERCABLE, INC.
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(Exact name of registrant as specified in its charter)
Colorado 1-9953 84-0613514
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(State of Organization) (Commission File No.) (IRS Employer
Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
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(Address of principal executive office and Zip Code (Registrant's
telephone no.
including area code)
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Item 5. Other Events
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Pursuant to the effective Registration Statement on Form S-3 (No. 33-
62537) of Jones Intercable, Inc. (the "Company") allowing the Company to sell
shares of the Company's Class A Common Stock, the Company has agreed to sell
8,000,000 shares of its Class A Common Stock. The net proceeds to the Company
from the sale will be $79,600,000 after payment of estimated expenses (assuming
no exercise of the Underwriters' over-allotment option).
The Company will use the net proceeds of the offering, together with
amounts borrowed under the Company's credit facilities, to acquire the cable
television system serving areas in and around Independence, Missouri (the
"Independence System") during the third quarter of 1997. Pending the use of the
net proceeds to acquire the Independence System, such proceeds will be held in a
separate account and may be invested in money market or other short-term,
interest bearing, investment-grade instruments.
The terms and conditions of the offering are set forth in the Company's
Prospectus Supplement dated August 20, 1997 to the Prospectus dated November 27,
1995 filed with the Securities and Exchange Commission pursuant to Rule
424(b)(2) promulgated under the Securities Act of 1933, as amended.
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Item 7. Financial Statements and Exhibits
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a. Not applicable.
b. Not applicable.
c. Exhibits.
1.1 Underwriting Agreement among the Company, Lehman Brothers Inc. and
Donaldson Lufkin & Jenrette Securities Corporation, as representatives
of the several Underwriters.
5.1 Opinion regarding legality.
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JONES INTERCABLE, INC.,
a Colorado corporation
Dated: August 20, 1997 By: /s/ Elizabeth M. Steele
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Elizabeth M. Steele
Vice President, General
Counsel and Secretary
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EXHIBIT 1.1
JONES INTERCABLE, INC.
8,000,000 SHARES
CLASS A COMMON STOCK
August 20, 1997
Lehman Brothers Inc.
Donaldson Lufkin & Jenrette Securities Corporation
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
Jones Intercable, Inc., a Colorado corporation (the "Company"),
proposes to sell 8,000,000 shares (the "Firm Securities") of the Company's Class
A Common Stock, $.01 par value per share (the "Class A Common Stock" or the
"Securities"). In addition, the Company proposes to grant to the Underwriters
named in Schedule 1 hereto (the "Underwriters") an option to purchase up to an
additional 1,200,000 shares of the Class A Common Stock on the terms and for the
purposes set forth in Section 2 (the "Option Securities"). The Firm Securities
and the Option Securities, if purchased, are hereinafter collectively called the
"Offered Securities." This is to confirm the agreement concerning the purchase
of the Offered Securities from the Company by the Underwriters.
1. Representations and Warranties of the Company. The Company
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represents and warrants to and agrees with each Underwriter that:
(a) A registration statement on Form S-3, including a prospectus,
with respect to the Securities, (i) has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act") and the rules and regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder, (ii)
has been filed with the Commission and (iii) has become effective. Such
registration statement and prospectus may have been supplemented from time
to time prior to the date of this Agreement. A prospectus supplement (the
"Prospectus Supplement"), including a prospectus, relating to the Offered
Securities has been so prepared. The Prospectus Supplement and, if not
previously filed, such prospectus will be filed pursuant to Rule 424 under
the Act within the time prescribed by such Rule.
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Copies of such registration statement and prospectus, any such supplement,
the Prospectus Supplement and all documents incorporated by reference
therein which were filed with the Commission on or prior to the date hereof
(including one fully executed copy of the registration statement for
counsel for the Underwriters) have been delivered to you. Such registration
statement and prospectus, as supplemented to the date hereof and as
supplemented by the Prospectus Supplement are herein referred to as the
"Registration Statement" and the "Prospectus," respectively. Any reference
herein to the Registration Statement or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein which
were filed with the Commission on or prior to the date hereof and any
reference to the terms "amend," "amendment" or "supplement" with respect to
the Registration Statement or the Prospectus shall be deemed to refer to
and include, except with respect to Paragraph 5(d) hereof, the filing of
any document with the Commission deemed to be incorporated by reference
therein after the date hereof and on or prior to the Closing Date.
(b) The Registration Statement, at the time it became effective,
the Registration Statement and the Prospectus, as of the date hereof and at
the Closing Date (as hereinafter defined), and any amendment or supplement
thereto, conformed or will conform in all material respects to the
requirements of the Act, the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and the Rules and Regulations; and no such document
included or will include an untrue statement of a material fact or omitted
or will omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that the
Company makes no representation or warranty as to information contained in
or omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of any Underwriter specifically for inclusion therein or
information contained in the Statements of Eligibility on Form T-1 of the
Trustees other than information furnished to the Trustees by the Company
specifically for inclusion therein.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, when they became effective or were filed with
the Commission, as the case may be, under the Securities Exchange Act of
1934 (the "Exchange Act"), conformed, and any documents so filed and
incorporated by reference after the date hereof and on or prior to the
Closing Date will, when they are filed with the Commission, conform, in all
material respects to the requirements of the Act and the Exchange Act, as
applicable, and the Rules and Regulations of the Commission thereunder; and
no such document included or will include an untrue statement of a material
fact or omitted or will omit to state
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a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(d) Neither the Company nor any of its subsidiaries (as defined in
Paragraph 12) is in violation of its corporate charter or by-laws, in the
case of the Company and its corporate subsidiaries, or the applicable
limited partnership agreement, in the case of the Company's affiliated
partnerships, or in default, and no event has occurred which, with notice
or lapse of time or both, would constitute such a default, under any
agreement, indenture or instrument, or in violation of any order, rule or
regulation of any court or governmental agency having jurisdiction over the
Company, any of its subsidiaries or their property, the effect of which
violation or default would constitute a Material Adverse Effect (as defined
hereafter) or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its properties or assets or to the conduct of
its business; neither the issuance or sale of the Offered Securities, nor
the execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated herein, nor
fulfillment of the terms hereof, will conflict with, or result in the
creation or imposition of any lien, charge or encumbrance, which in either
case would have a Material Adverse Effect upon any of the assets of the
Company or any of its subsidiaries pursuant to the terms of, or constitute
a default under, any agreement, indenture or instrument, or result in a
violation of the corporate charter or by-laws of the Company, in the case
of the Company and its corporate subsidiaries, or the applicable limited
partnership agreement, in the case of the Company's affiliated
partnerships, or any order, rule or regulation of any court or governmental
agency having jurisdiction over the Company, any of its subsidiaries or
their property, the effect of which default or violation would constitute a
Material Adverse Effect; and except as required by the Act, the Exchange
Act, the Trust Indenture Act, and applicable state securities laws, no
consent, authorization or order of, or filing or registration with, any
court or governmental agency is required for the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein.
(e) Except as described in or contemplated by the Registration
Statement and the Prospectus, subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any Material Adverse Effect in, or any
adverse development which materially affects, the business, franchises,
properties, financial condition, results of operations or prospects of the
Company and its subsidiaries and its interests in its affiliated
partnerships taken as a whole, nor has there been any change in the capital
stock or long-term debt of the Company or any of its corporate
subsidiaries.
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4
(f) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the description thereof contained in the
Prospectus; the Offered Securities have been duly and validly authorized,
and, when issued and delivered against payment therefore in accordance with
the provisions of this Agreement, will be duly and validly issued, fully
paid and non-assessable; and the Offered Securities will conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(g) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(h) Each of the Company and its subsidiaries has been duly
incorporated, and each of the Company's affiliated partnerships has been
duly formed, and are validly existing and in good standing as corporations,
in the case of the Company and its corporate subsidiaries, or as limited
partnerships, in the case of its affiliated partnerships, under the laws of
their respective jurisdictions of incorporation, or formation, and are duly
qualified to do business and in good standing as a foreign corporation or
partnership in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective business requires such
qualification (except where the failure so to qualify would not have a
Material Adverse Effect), and has all corporate or partnership power and
authority necessary to own or hold their respective properties and to
conduct the business in which they are engaged. Except as described in the
Registration Statement and the Prospectus, all of the outstanding shares of
each of the Company's corporate subsidiaries are owned by the Company
directly, or indirectly through wholly-owned subsidiaries, free and clear
of any liens, claims, equities or encumbrances, except liens, claims,
equities or encumbrances arising in connection with bank indebtedness
incurred in the ordinary course of business, have been duly authorized and
are validly issued and outstanding, fully paid and non-assessable.
(i) Except as set forth in or contemplated by the Registration
Statement or the Prospectus, there is no material litigation or
governmental proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries which, if
determined adversely to the Company or any of its corporate subsidiaries or
affiliated partnerships, would reasonably be likely to result in any
Material Adverse Effect or which is required to be disclosed in the
Registration Statement and the Prospectus.
(j) The financial statements and schedules and information of the
Company appearing in or incorporated by reference in the Registration
Statement
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and Prospectus fairly present the financial condition and results of
operations of the entities purported to be shown thereby, at the dates and
for the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. Arthur Andersen LLP, who have examined
such financial statements, as set forth in their reports incorporated by
reference in the Registration Statement and the Prospectus, and who shall
deliver the letter referred to in Section 8(g), are independent public
accountants within the meaning of the Act and the Rules and Regulations.
(k) There are no contracts or other documents which are required
to be described in the prospectus or filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the Rules
and Regulations.
(l) The Company and each of its subsidiaries own or possess
adequate licenses or other rights to use all patents, trademarks, service
marks, trade names, copyrights and know-how necessary to conduct the
business now or proposed to be operated by them as described in the
Prospectus, and, except as described in the Prospectus, neither the Company
nor any of its subsidiaries has received any notice of infringement of or
conflict with (or know of any such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which is likely to be sustained
and, if such infringement or conflict were sustained, would result in any
Material Adverse Effect.
(m) The Company and its subsidiaries have filed all necessary
federal, state, local and foreign income and franchise tax returns and have
paid all taxes shown as due thereon; and there is no tax deficiency that
has been asserted against the Company or any of its subsidiaries that would
(nor does the Company or any of its subsidiaries have any knowledge of any
tax deficiency which, if determined adversely against the Company or any of
its subsidiaries, might) result in any Material Adverse Effect.
(n) The Company and its subsidiaries have good and marketable
title to all properties and assets described in the Prospectus as owned by
them free and clear of all liens, charges, encumbrances, or restrictions,
except, with respect to the Company and its corporate subsidiaries, as set
forth in the Prospectus and, with respect to the Company's affiliated
partnerships, liens, charges, encumbrances, and restrictions arising in
connection with bank debt incurred in the ordinary course of business; to
the best of the Company's knowledge all of the material leases, licenses
and franchise agreements under which the Company and its subsidiaries
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6
hold or use tangible or intangible properties or assets as lessee, licensee
or franchisee are in full force and effect and no material claim has been
asserted by anyone adverse to their rights as lessee, licensee or
franchisee under any of such leases, licenses or franchise agreements, or
affecting or questioning their right to the continued possession or use of
the leased, licensed or franchised tangible or intangible property or
assets under any such lease, license or franchise agreement which claim is
likely to be sustained and, if sustained, would have a Material Adverse
Effect.
(o) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(p) Neither the Company nor any of its subsidiaries is an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"40 Act").
(q) (i) The property, assets and operations of the Company and
its subsidiaries comply in all material respects with all applicable
Environmental Laws (as defined below) (except to the extent that failure to
comply with such Environmental Laws would not have a Material Adverse
Effect), (ii) to the knowledge of the Company after reasonable inquiry,
none of the property, assets or operations of the Company or its
subsidiaries is the subject of any federal, state or local investigation
evaluating whether any remedial action is needed to respond to a release of
any Hazardous Materials (as defined below) into the environment or is in
contravention of any federal, state or local law, order or regulation that
would have a Material Adverse Effect, (iii) neither the Company nor any of
its subsidiaries has received any notice or claim, nor are there pending,
threatened or reasonably anticipated lawsuits against them, with respect to
violations of an Environmental Law or in connection with any release of any
Hazardous Materials into the environment that would result in a Material
Adverse Effect, and (iv) neither the Company nor any of its subsidiaries
has any material contingent liability (material to the Company and its
subsidiaries and its interests in its affiliated partnerships taken as a
whole) in connection with any release of any Hazardous Materials into the
environment (as used herein, "Environmental Laws"
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7
means any federal, state, territorial, provincial or local law, common law
doctrine, rule, order, decree, judgment, injunction, license, permit or
regulation relating to environmental matters, and "Hazardous Materials"
means those substances that are regulated by or form the basis of liability
under any Environmental Laws).
(r) Neither the Company nor any of its subsidiaries is involved
in any labor dispute nor, to the best knowledge of the Company, is any
dispute imminent, other than routine disciplinary and grievance matters.
(s) Except for the Shareholders Agreement (as defined in the
Prospectus), there are no contracts, agreements or understandings between
the Company and any person granting such person the right (other than
rights which have been waived or satisfied) to require the Company to file
a registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the Company
to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the Act.
(t) Except as described in the Prospectus, the Company has not
sold or issued any shares of Class A Common Stock during the six-month
period preceding the date of the Prospectus, including any sales pursuant
to Rule 144A under, or Regulations D or S of, the Act, other than shares
issued pursuant to employee benefit plans, qualified stock options plans or
other employee compensation plans or pursuant to outstanding options,
rights or warrants.
(u) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any transaction not in
the ordinary course of business or (iv) declared or paid any dividend on
its capital stock.
(v) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.
2. Purchase and Offering of Securities by the Underwriters. On the
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basis of the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell 8,000,000
shares of the Firm Securities
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8
to the several Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase the number of shares of the Firm Securities set
opposite that Underwriter's name in the Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Securities
shall be rounded among the Underwriters to avoid fractional shares, as the
Underwriters may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,200,000 shares of Option Securities. Such option is granted
solely for the purpose of covering over-allotments in the sale of Firm
Securities and is exercisable as provided in Section 3 hereof. Shares of Option
Securities shall be purchased severally for the account of the Underwriters in
proportion to the number of shares of Firm Securities set opposite the name of
such Underwriters in Schedule 1 hereto. The respective purchase obligations of
each Underwriter with respect to the Option Securities shall be adjusted by the
Underwriters so that no Underwriter shall be obligated to purchase Option
Securities other than in 100 share amounts.
The price of both the Firm Securities and any Option Securities shall
be $9.975 per share.
Upon authorization by the Representatives of the release of the Firm
Securities, the Underwriters propose to offer the Firm Securities for sale upon
the terms and conditions set forth in the Prospectus.
3. Delivery of and Payment for the Securities. Delivery of and
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payment for the Firm Securities shall be made at the office of Simpson Thacher &
Bartlett at 425 Lexington Avenue, New York, New York 10017, at 9:30 A.M., New
York City time, on the fourth full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are sometimes
referred to as the "Closing Date". On the Closing Date, the Company shall
deliver or cause to be delivered certificates representing the Firm Securities
to the Representatives for the account of each Underwriter against payment to
the Company of the purchase price by wire transfer of immediately available
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Firm Securities shall be
registered in such names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to the Closing
Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Securities, the Company shall make the certificates
representing the Firm Securities available for inspection by the Representatives
in New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Closing Date.
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At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of shares of Option Securities as to which the option is
being exercised, the names in which the shares of Option Securities are to be
registered, the denominations in which the shares of Option Securities are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Securities are to be delivered; provided, however, that this
date and time shall not be earlier than the Closing Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Securities are
delivered are sometimes referred to as the "Second Closing Date".
Delivery of and payment for the Option Securities shall be made at the
place specified in the first sentence of the first paragraph of this Section 3
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 9:30 A.M., New York City time, on the Second
Closing Date. On the Second Closing Date, the Company shall deliver or cause to
be delivered the certificates representing the Option Securities to the
Representatives for the account of each Underwriter against payment to the
Company of the purchase price by wire transfer of immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Securities shall be registered
in such names and in such denominations as the Representatives shall request in
the aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Securities, the Company shall make
the certificates representing the Option Securities available for inspection by
the Representatives in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the Second Closing Date.
4. Substitution of Underwriters. (a) The Company shall not be
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obligated to deliver any of the Offered Securities to be delivered on the
Closing Date or the Second Closing Date (as hereinafter defined), as the case
may be, except upon payment for all the Offered Securities to be purchased on
such Closing Date as provided herein.
(b) If on either Closing Date any Underwriter or Underwriters
shall fail to take up and pay for the number of shares of the Offered Securities
agreed by such Underwriter or Underwriters to be purchased hereunder on such
Closing Date, upon tender of such Offered Securities in accordance with the
terms hereof, and the total number of shares of the Offered Securities not
purchased does not aggregate more than 10% of the total number of shares of the
Offered Securities to be purchased on such Closing Date, the remaining
Underwriters shall be obligated to take up and pay for (in proportion to
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10
their respective underwriting obligations, except as may otherwise be determined
by you) the Offered Securities which the withdrawing or defaulting Underwriters
agreed but failed to purchase on such Closing Date.
(c) If on either Closing Date any Underwriter or Underwriters shall
fail to take up and pay for the number of shares of the Offered Securities
agreed by such Underwriter or Underwriters to be purchased hereunder on such
Closing Date, upon tender of such Offered Securities in accordance with the
terms hereof, and the total number of shares of Offered Securities not purchased
aggregates more than 10% of the total number of shares of the Offered Securities
to be purchased on such Closing Date, and arrangements satisfactory to you and
the Company for the purchase of such Offered Securities on such Closing Date by
other persons are not made within 36 hours thereafter, this Agreement (or with
respect to the Second Closing Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Securities) shall terminate.
(d) In the event of a default by any Underwriter as set forth in this
Paragraph 4, such Closing Date shall be postponed for such period, not to exceed
seven full business days, as you shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. In the event of any such
termination, the Company shall not be under any liability to any Underwriter
(except to the extent provided in Paragraphs 5(j) and 9 hereof) nor shall any
Underwriter (other than an Underwriter who shall have failed, otherwise than for
some reason permitted under this Agreement, to purchase the number of shares of
the Offered Securities agreed by such Underwriter to be purchased under this
Agreement) be under any liability to the Company. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any non-defaulting Underwriter for damages occasioned by its
default hereunder.
5. Covenants. The Company agrees:
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(a) To furnish promptly to you and to counsel for the
Underwriters a signed copy of the Registration Statement and the Prospectus
(including all documents incorporated by reference therein) as originally
filed, and each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith and all documents incorporated by
reference therein;
(b) To deliver promptly to you and to each Underwriter such
number of conformed copies of the Registration Statement as originally
filed and each amendment thereto (excluding exhibits other than this
Agreement), the Prospectus and any amended or supplemented Prospectus as
you may reasonably request;
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(c) To cause the Prospectus Supplement to be filed pursuant to
Rule 424 under the Act within the time prescribed therein and to notify you
promptly of such filing;
(d) At any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act, prior to filing with
the Commission, any amendment to the Registration Statement or subsequent
supplement to the Prospectus, or to filing any prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to you and
counsel for the Underwriters and obtain your consent to the filing; and to
make no further amendment to the Registration Statement or subsequent
supplement to the Prospectus prior to the Second Closing Date except as
permitted herein;
(e) To advise you promptly (i) when any amendment to the
Registration Statement has become effective or any subsequent supplement to
the Prospectus has been filed, (ii) of any request or proposed request by
the Commission for any amendment to the Registration Statement, a
supplement to the Prospectus or for any additional information, (iii) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threat of
any stop order proceedings, (iv) of receipt by the Company of any
notification with respect to the suspension of the qualification of the
Offered Securities for sale in any jurisdiction or the initiation or threat
of any proceeding for that purpose, and (v) of the happening of any event
which makes untrue any statement of a material fact made in the
Registration Statement or the Prospectus, or which requires the making of a
change in the Registration Statement or the Prospectus in order to make any
material statement therein not misleading; and, in the event of the
issuance of any such stop order or suspension of qualification of the
Offered Securities, to use promptly its best efforts to obtain its
withdrawal;
(f) Within the time during which a prospectus relating to the
Offered Securities is required to be delivered under the Act, the Company
will (i) file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and (ii) comply as
far as it is able with all requirements imposed upon it by the Act, as now
and hereafter amended, and by the Rules and Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales of or
dealings in the Offered Securities as contemplated by the provisions hereof
and the Prospectus. If during such period any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
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12
circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or the
Prospectus to comply with the Act, the Company will amend or supplement the
Registration Statement or the Prospectus (at the expense of the Company) so
as to correct such statement or omission or effect such compliance;
(g) The Company will make generally available to its securities
holders and to you as soon as practicable, but in any event not later than
15 months after the end of the Company's current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month period
beginning after the date upon which the Prospectus Supplement is filed
pursuant to Rule 424 under the Act which shall satisfy the provisions of
Section 11(a) of the Act;
(h) For a period of five years from the date of this Agreement,
to furnish to you copies of all public reports and all reports and
financial statements furnished by the Company to any securities exchange
pursuant to requirements of or agreements with any such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder;
(i) To endeavor in all reasonable respects to qualify the Offered
Securities for offer and sale under the securities laws of such
jurisdictions as you may reasonably request and to comply with such laws so
as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Offered Securities;
(j) To pay the costs incident to the authorization, issuance,
sale and delivery of the Offered Securities and any taxes payable in that
connection; the costs incident to the preparation, printing and filing
under the Act of the Registration Statement and any amendments and exhibits
thereto; the costs of distributing to the Underwriters and any selected
dealers the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including exhibits), the
Prospectus and any amendment or supplement to the Prospectus as provided in
this Agreement; the costs of printing this Agreement; the costs of filings
and clearance with the National Association of Securities Dealers, Inc.
(including the reasonable fees and disbursements of counsel for the
Underwriters related thereto); any applicable listing or other fees; the
reasonable fees and expenses of qualifying the Offered Securities under the
securities laws of the several jurisdictions as provided in this Paragraph
and of preparing and printing a Blue Sky Memorandum (including related fees
and expenses of counsel for the Underwriters); and all other costs and
expenses incident to the performance of the obligations of the Company
under this Agreement, including, without limitation, the cost of printing
and engraving the certificates representing the Securities, the
<PAGE>
13
cost of their personnel and other internal costs, and all expenses and
taxes incident to the sale and delivery of the Securities to you; provided
that, except as provided in this Paragraph, the Underwriters shall pay
their own costs and expenses, including the fees and expenses of their
counsel; any transfer taxes on the Offered Securities which they may sell
and the expenses of advertising any offering of the Offered Securities made
by the Underwriters;
(k) For a period of 120 days from the date of the Prospectus
Supplement, not to, directly or indirectly, offer for sale, sell or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition or purchase
by any person at any time in the future of) any shares of Class A Common
Stock (other than the Offered Securities and shares of Class A Common Stock
issued pursuant to employee benefit plans, qualified stock option plans or
other employee compensation plans existing on the date hereof or pursuant
to currently outstanding options, warrants or rights) or shares of the
Company's Common Stock, $.01 par value per share (the "Common Stock"), or
sell or grant options, rights or warrants with respect to any shares of
Class A Common Stock or Common Stock (other than the grant of options with
respect to Class A Common Stock pursuant to option plans existing on the
date hereof or that may be approved by the shareholders of the Company and
take effect subsequent to the date hereof), without the prior written
consent of Lehman Brothers Inc.; and to cause each officer and director of
the Company (other than the directors designated by Bell Canada
International Inc.) and Jones International, Ltd., Jones Entertainment
Group, Ltd., Jones Space Segment, Inc., Jones Global Group, Inc., Jones
Interdigital, Inc., Jones International Grantor Business Trust, Glenn Jones
Grantor Business Trust, Christine Jones Marocco, Joseph Michael Marocco
Irrevocable Trust, Christine Jones Marocco Irrevocable Trust and Michael
Marocco to furnish to the Representatives, prior to the Closing Date, a
letter or letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree not to,
directly or indirectly, offer for sale, sell or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition or purchase by any person at any
time in the future of) any shares of Class A Common Stock or Common Stock
for a period of 120 days from the date of the Prospectus, without the prior
written consent of Lehman Brothers Inc.;
(l) To apply the net proceeds from the sale of the Offered
Securities being sold by the Company as set forth in the Prospectus
Supplement; and
(m) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company"
within the
<PAGE>
14
meaning of such term under the 40 Act and the rules and regulations of the
Commission thereunder.
6. Indemnification. (a) The Company shall indemnify and hold
---------------
harmless each Underwriter, the directors, officers, agents and employees of each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act from and against any loss, claim, damage or liability, joint
or several, and any action in respect thereof, to which that Underwriter,
director, officer, agent, employee or controlling person may become subject,
under the Act or otherwise, insofar as such loss, claim, damage, liability or
action (i) arises out of, or is based upon, any untrue statement or alleged
untrue statement of a material fact contained in (A) the Registration Statement
when it became effective, the Registration Statement or the Prospectus, or any
amendment or supplement thereto (including a preliminary prospectus supplement)
or (B) in any blue sky application or other document prepared or executed by the
Company (or based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Offered Securities
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue Sky
Application"), or (ii) arises out of, or is based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
each Underwriter, director, officer, agent, employee and each such controlling
person for any legal and other expenses reasonably incurred by that Underwriter,
director, officer, agent, employee or controlling person in investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action; provided that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus or in the Registration
Statement or the Prospectus or any amendment or supplement thereto or in any
Blue Sky Application in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter specifically for
inclusion therein; and, provided further, that as to any preliminary prospectus
supplement this indemnity agreement shall not inure to the benefit of any
Underwriter or any person controlling that Underwriter on account of any loss,
claim, damage, liability or action arising from the sale of Offered Securities
to any person by the Underwriter if that Underwriter failed to send or give a
copy of the Prospectus, as the same may be amended or supplemented, to that
person within the time required by the Act, and the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact in such preliminary prospectus supplement was corrected in the
Prospectus, unless such failure resulted from non-compliance by the Company with
Paragraphs 5(b), (d) or (f). For purposes of the last proviso to the
immediately preceding sentence, the term "Prospectus" shall not be deemed to
include the documents incorporated therein by reference, and no Underwriter
shall be obligated to send or give any supplement or amendment to any document
incorporated by reference
<PAGE>
15
in any preliminary prospectus supplement or the Prospectus to any person other
than a person to whom such Underwriter had delivered such incorporated document
or documents in response to a written request therefor. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have
to any Underwriter or any controlling person of that Underwriter.
(b) Each Underwriter (severally, but not jointly) shall indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and any person who controls the Company within
the meaning of the Act from and against any loss, claim, damage or liability,
joint or several, and any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under the Act
or otherwise, insofar as such loss, claim, damage, liability or action (i)
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in (A) the Registration Statement when it
became effective, the Registration Statement or the Prospectus, or any amendment
or supplement thereto (including a preliminary prospectus supplement) or (B) in
any Blue Sky Application, or (ii) arises out of, or is based upon, the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company and any such
officer, director or controlling person for any legal and other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action. The foregoing indemnity agreement is
in addition to any liability which any Underwriter may otherwise have to the
Company or any of its directors, officers or controlling persons.
(c) Promptly after receipt by an indemnified party under this
Paragraph of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Paragraph, notify the indemnifying party in
writing of the claim or the commencement of that action, provided that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party except to the extent that the failure
to give notice has materially prejudiced the indemnifying party. If any such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein, and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not
<PAGE>
16
be liable to the indemnified party under this Paragraph for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof; provided that the indemnified party shall have the right to
employ counsel to represent such indemnified party who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the indemnified party against the indemnifying party under this Paragraph, if
in the reasonable judgment of the indemnified party, it is advisable for such
indemnified party to be represented by separate counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has been
authorized by the indemnifying party, (ii) the named parties to any such action
(including any impleaded parties) include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to the indemnified party
which are different from or additional to those available to the indemnifying
party (in which case the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party) or (iii) the
indemnifying party shall not in fact have employed counsel to assume the defense
of such action in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
in each of which cases the fees and expenses of such separate counsel shall be
paid by the indemnifying party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated in writing
by the Underwriters, if the indemnified parties under this Paragraph consist of
any Underwriter or any of their respective officers, employees or controlling
persons, or by the Company, if the indemnified parties under this Paragraph
consist of the Company or any of the Company's directors, officers, employees or
controlling persons. An indemnifying party will not (i) without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action, suit or
proceeding or (ii) be liable for any settlement of any such action effected
without its written consent (which consent shall not be unreasonably withheld),
but if settled with its written consent or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
<PAGE>
17
(d) If the indemnification provided for in this Paragraph shall for
any reason be unavailable to an indemnified party under Paragraph 6(a) or 6(b)
in respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Offered Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Offered Securities
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters with respect
to such offering, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Paragraph were to be determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Paragraph
shall be deemed to include, for purposes of this Paragraph, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Paragraph, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public was offered to the
public exceeds that amount of any damages which such Underwriter has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Paragraph 6(d) are several in proportion to their respective underwriting
obligations and not joint.
<PAGE>
18
(e) The Underwriters severally confirm that the statements with
respect to the public offering of the Offered Securities set forth in the last
paragraph on the cover page of, and in paragraphs 1-4 and 8-10 under the caption
"Underwriting" in, the Prospectus are correct and constitute the only
information furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
(f) The indemnity agreements contained in this Paragraph and the
representations, warranties and agreements of the Company in Paragraphs 1 and 5
shall survive the delivery of the Offered Securities and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.
7. Effective Date of Agreement and Termination. (a) This Agreement
-------------------------------------------
shall become effective on the day on which this Agreement is executed.
(b) The obligations of the Underwriters hereunder may be terminated
by you, in your absolute discretion, by notice given to and received by the
Company prior to delivery of and payment for the Firm Securities, if prior to
that time any of the following events shall have occurred: (i) since the
respective date as of which information is given in the Registration Statement
and the Prospectus, any adverse change or development involving a prospective
adverse change in the financial condition of the Company and its subsidiaries
taken as a whole or the earnings or business affairs of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course of
business which would, in your judgment, make it impracticable to market the
Offered Securities on the terms and in the manner contemplated in the
Prospectus, (ii) any outbreak or escalation of hostilities or other national or
international calamity or crises, if the effect of such outbreak, escalation,
calamity, or crisis would, in your judgment, make the offering or delivery of
the Offered Securities impracticable, (iii) existing financial, political,
economic or stock market conditions in Europe, the United States or elsewhere,
or international monetary conditions, shall have undergone a material change
which, in your judgment, materially and adversely affects the market for the
Offered Securities or makes the offering or delivery of the Offered Securities
impracticable; (iv) the suspension or material limitation of trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market System or limitation on prices for securities on any such
exchange or National Market System, (v) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business or
operations of the Company or any subsidiary, (vi) the declaration of a banking
moratorium by either federal or New York State authorities or (vii) the taking
of any action by any federal, state or local government or agency in respect of
its monetary or
<PAGE>
19
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
8. Conditions of the Underwriters' Obligations. The obligations of
-------------------------------------------
the Underwriters to purchase and pay for the Offered Securities as provided
herein are subject to the accuracy, as of the date hereof and on each Closing
Date (as if made at each Closing Date) of the representations and warranties of
the Company contained herein, to performance by the Company of its obligations
thereunder, and to each of the following additional terms and conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued, and prior to that time no stop order
proceeding shall have been initiated or threatened (and such threat shall
not have been withdrawn) by the Commission; any request by the Commission
for inclusion of additional information in the Registration Statement or
the Prospectus or otherwise shall have been complied with; and the Company
shall not have filed with the Commission the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus without the
consent of the Representatives; and
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Offered Securities
and the Registration Statement and the Prospectus, other than financial
statements and other financial data, and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be
satisfactory in all respects to Simpson Thacher & Bartlett, counsel for the
Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(c) Elizabeth M. Steele, Vice President/General Counsel to the Company
shall have furnished to you her opinion addressed to the Underwriters and
dated such Closing Date to the effect that:
(i) Such counsel has no reason to believe that any
material licenses, permits, franchises and authorizations of the
Company and its subsidiaries and affiliated partnerships are not in
full force and effect and that the Company and its subsidiaries and
affiliated partnerships are not in all material respects complying
therewith.
(ii) The Company has been duly incorporated and is
validly existing in good standing as a corporation under the laws of
the State of Colorado, with corporate power and authority to own its
properties and conduct its business as now documented and described in
the Prospectus,
<PAGE>
20
and is duly qualified to do business as a foreign corporation and in
good standing in all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualifications, except where the failure to be so qualified will not
have a Material Adverse Effect.
(iii) Each of the Company's subsidiaries has been duly
incorporated and is validly existing in good standing as a corporation
under the laws of its jurisdiction of incorporation, with corporate
power and authority to own its properties and conduct its business as
now conducted and described in the Prospectus, and is duly qualified
to do business as a foreign corporation and in good standing in all
other jurisdictions where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except
where the failure to be so qualified will not have a Material Adverse
Effect. The outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and are owned, directly or
indirectly, by the Company free and clear of all liens, encumbrances,
equities and claims, except as set forth in the Prospectus or except
liens, encumbrances, equities and claims arising in connection with
bank indebtedness incurred in the ordinary course of business.
(iv) Each of the Company's affiliated partnerships has
been duly formed and is validly existing in good standing as a limited
partnership under the laws of its jurisdiction of formation, with
power and authority to own its properties and conduct its business as
now conducted and described in the Prospectus, and is duly qualified
to do business as a foreign limited partnership and in good standing
in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified will not have a Material
Adverse Effect.
(v) The execution, delivery and performance of this
Agreement by the Company, the issuance and sale of the shares of the
Offered Securities being delivered on such Closing Date and the
consummation by the Company of the transactions herein contemplated
will not conflict with, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of the Company or
any of its subsidiaries pursuant to the terms of, or constitute or
result in a breach or violation of, or default under, the articles of
incorporation or bylaws of the Company or any of its subsidiaries, or
the respective certificates of or agreements of limited partnership of
any of the Company's affiliated partnerships, or any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement
<PAGE>
21
or instrument known to such counsel, to which the Company or any of
its subsidiaries or affiliated partnerships is a party or by which it
or any of them or their respective properties may be bound, or any law
or statute or any judgment, decree, order, rule or regulation of any
court, governmental agency or other body applicable to the Company or
any of its subsidiaries or affiliated partnerships of any of their
respective properties; and, except for the registration of the Offered
Securities under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Offered Securities by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court, governmental agency or
other body is required for the execution, delivery and performance of
this Agreement by the Company and the consummation of the transactions
contemplated hereby. (In the case of any law, order, rule or
regulation relating to the Federal Communications Act or the Federal
Communications Commission, such counsel may rely upon the opinion of
Cole Raywid & Braverman, Washington, D.C.)
(vi) This Agreement has been validly authorized and duly
executed and delivered by authorized officers of the Company.
(vii) The Company has an authorized capitalization as set
forth in the Prospectus Supplement, and all of the issued shares of
capital stock of the Company (including the shares of the Offered
Securities being delivered on such Closing Date) have been duly and
validly authorized and issued, are fully paid and non-assessable with
no personal liability attaching to the ownership thereof, and conform
as to legal matters to the statements concerning them in the
Registration Statement and the Prospectus; all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable with
no personal liability attaching to the ownership thereof and are owned
directly or indirectly by the Company free and clear of all liens,
encumbrances, equities or claims; and none of the shares of the
Offered Securities will be subject to any preemptive right, or any
lien, charge or encumbrance or any other claim of any third party, nor
any restriction upon the voting or transfer thereof pursuant to the
Company's charter or by-laws or any agreement or other instrument
known to such counsel.
(viii) Except for the Shareholders Agreement (as defined
in the Prospectus), there are no contracts, agreements or
understandings between the Company and any person granting such person
the right (other than
<PAGE>
22
rights which have been waived or satisfied) to require the Company to
file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Act.
(ix) The Registration Statement is effective under the
Act, no stop order suspending its effectiveness has been issued, and,
to the knowledge of such counsel, no proceeding for that purpose is
pending or threatened by the Commission, and the Prospectus was filed
with the Commission pursuant to the subparagraph of Rule 424(b) of the
Rules and Regulations specified in such opinion and on the date
specified therein.
(x) To the best of the knowledge of such counsel, there
is not pending or threatened any action, suit, proceeding, inquiry or
investigation to which the Company or any of its subsidiaries or
affiliated partnerships is a party, or to which the property of the
Company or any of its subsidiaries or affiliated partnerships is
subject, before or brought by any court or governmental agency or
body, except as described in the Prospectus and except for litigation
incident to the kind of business conducted by the Company and its
subsidiaries and affiliated partnerships which, individually or in the
aggregate, will not have a Material Adverse Effect.
(xi) Such counsel has no reason to believe that the
Company and its subsidiaries and affiliated partnerships have not
obtained all licenses, permits, franchises and other governmental
authorizations (in the case of any law, order, rule or administrative
regulation relating to the Federal Communications Act or the Federal
Communications Commission, such counsel may rely upon the opinion of
Cole Raywid & Braverman, Washington, D.C.), the lack of which would
have a Material Adverse Effect.
(xii) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company or
any of its subsidiaries which would affect the subject matter of this
Agreement or is required to be disclosed in the Prospectus which is
not disclosed and correctly summarized therein.
(xiii) To the best of such counsel's knowledge, neither the
Company nor any of its subsidiaries is in default under any material
agreement, indenture or instrument or in violation of its corporate
charter or bylaws.
<PAGE>
23
(xiv) Neither the Company nor any of its subsidiaries is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the 40 Act.
(xv) Such counsel does not know of any contracts or other
documents which are required to be filed as exhibits to the
Registration Statement by the Act, the Exchange Act or by the Rules
and Regulations which have not been filed as exhibits to the
Registration Statement or incorporated therein by reference as
permitted by the Rules and Regulations.
(xvi) The Statements made by the Prospectus under the
captions "Description of the Debt Securities" and "Description of
Capital Stock," insofar as they constitute a summary of the provisions
of documents or agreements specifically referred to therein, fairly
present the information called for with respect thereto by Form S-3.
In addition, as part of her opinion letter, such counsel shall advise
that, except as to financial statements and FCC regulatory matters as to
which such counsel need not express any opinion, such counsel (A) is of the
opinion that the Registration Statement, all Preliminary Prospectuses, the
Prospectus and any supplements or amendments thereto, as of their
respective effective or issue dates, complied as to form in all material
respects with the Act, the applicable Rules and Regulations and the Trust
Indenture Act, (B) that the documents incorporated by reference in the
Prospectus, when they were filed with the Commission, complied as to form
in all material respects with the requirements of the Exchange Act and the
Rules and Regulations thereunder, (C) believes that the descriptions in the
Registration Statement and the Prospectus of statutes, contracts and other
documents, and to the best knowledge of such counsel, all descriptions of
legal or governmental proceedings and legislative proposals (in the case of
any law, order, rule or administrative regulation relating to the Federal
Communications Act or the Federal Communications Commission, such counsel
may rely upon the opinion of Cole Raywid & Braverman, Washington, D.C.),
are accurate and present fairly the information required to be presented by
the Act or the Rules and Regulations and (D) although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and Prospectus (relying as to materiality to a large extent upon
the opinions of officers, counsel and other representatives of the Company)
nothing has come to such counsel's attention which would lead such counsel
to believe that the Registration Statement and the Prospectus (and any
amendments or supplements thereto), as of their respective effective or
issue dates or as of the date hereof, or the documents incorporated by
reference therein at the time they were filed, contained an untrue
statement of a material fact or omitted
<PAGE>
24
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, or that the Prospectus (if amended or
supplemented), as of such Closing Date, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely, (A) as to matters of
fact, upon statements and certificates from officers of the Company, public
officials and other sources reasonably believed by such counsel to be
reliable, and (B) as to matters of law of jurisdictions other than
jurisdictions in which such counsel are admitted to the practice of law
upon opinions of other counsel reasonably acceptable to the Underwriters;
provided such counsel shall furnish the Underwriters copies of any such
opinions.
(d) Cole Raywid & Braverman, as special counsel to the Company, shall
have furnished to you their opinion addressed to the Underwriters and dated
the Closing Date to the effect that with respect to matters arising under
the Communications Act of 1934, as amended, and the rules and regulations
of the Federal Communications Commission (the "FCC"):
(i) No approval of the FCC is required in connection with
the issuance and sale of the Offered Securities;
(ii) Based on due inquiry and investigation as described
in such opinion, the Company and its subsidiaries have such licenses
relating to the cable communications industry as are necessary under
the Communications Act or 1934, as amended, and the rules and
regulations of the FCC to own their cable television systems and to
conduct their cable television business in the manner described in the
Prospectus except where the failure to have or comply with such
licenses would have a materially adverse effect on the business or
financial condition of the Company and its subsidiaries as a whole,
and such licenses contain no burdensome restrictions not adequately
described in the Prospectus, which restrictions would have a
materially adverse effect on the Company and its subsidiaries as a
whole.
(iii) The execution, delivery and performance of this
Agreement by the Company and compliance by the Company with the
provisions of the Indenture and the Offered Securities does not and
will not violate the Communications Act of 1934, as amended, or the
rules and regulations of the FCC;
<PAGE>
25
(iv) Except for matters described in the Registration
Statement, such counsel does not know of any proceeding before the FCC
to which the Company or any of its subsidiaries is a party or
involving the cable television systems, licenses or authorizations of
the Company or its subsidiaries, or of any cable communications law or
regulation relevant to such systems, licenses or authorizations
required pursuant to SEC Regulation S-K to be described in the
Registration Statement or the Prospectus which is not described as
required;
(v) The statements made in the Company's most recent Annual
Report on Form 10-K filed with the Commission under the caption
"Regulation and Legislation" and as updated in the Prospectus under
the caption "Risk Factors-Risks Associated with Government Regulation
of the Cable Television Industry" and "Risks of Competition," insofar
as they purport to summarize current and proposed federal legislation
and regulations of the FCC and certain court decisions specifically
referred to therein, have been reviewed by such counsel and such
counsel has no reason to believe that such sections of the
Registration Statement, as of the effective date of the Registration
Statement and as of the Closing Date, contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make such statements not misleading.
(e) You shall have received from Simpson Thacher & Bartlett, counsel
for the Underwriters ("Counsel for the Underwriters"), an opinion or
opinions, dated the Closing Date, covering certain matters referred to in
sub-headings (ii), (vi) and (vii) of paragraph (c) of this Section 8 and
such other related matters as you may require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, such
counsel may rely, as to the incorporation of the Company and as to all
other matters governed by the laws of the State of Colorado, upon the
opinion of counsel for the Company referred to above.
(f) The Company shall have furnished to you on the Closing Date a
certificate, dated such Closing Date, of its President and its principal
accounting officer stating that:
(i) The representations, warranties and agreements of the
Company in Paragraph 1 are true and correct as of such Closing Date;
the Company has complied with all its agreements contained herein; and
the conditions set forth in Paragraph 8(a) have been fulfilled; and
<PAGE>
26
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion, (A) as of the effective date
of the Registration Statement, the Registration Statement and
Prospectus did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) since
the effective date of the Registration Statement, no event has
occurred which should have been set forth in a supplement to or
amendment of the Prospectus which has not been set forth in such a
supplement or amendment.
(g) The Company shall have furnished to you on the Closing Date a
letter, in form and substance satisfactory to you, of Arthur Andersen LLP,
addressed to the Underwriters and dated the Closing Date, confirming that
they are independent public accountants within the meaning of the Act and
are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, and containing statements and information of the type
ordinarily included in accountants "comfort letters" to underwriters with
respect to financial statements and certain financial information contained
in or incorporated by reference in the Registration Statement and the
Prospectus.
(h) The Company shall have obtained and delivered to the Underwriters
such agreements regarding the sale of the Company's Class A Common Stock
and Common Stock as are specified in Paragraph 5(k).
(i) After the execution and delivery of this Agreement, there shall
not have been any downgrading in the ratings of the Company's debt
securities by any "nationally recognized statistical rating agency" (as
defined in Rule 426(g) under the Act) or any notice given thereby of, or
any other action thereby threatening, any intended or potential downgrading
in any such rating or of a possible change in any such rating that does not
indicate the direction of the possible change or any action thereby placing
the Company under special surveillance.
(j) The Underwriters shall have received in connection with Bell
Canada International Inc.'s purchase from the Underwriters of 30% of the
Firm Securities or the Option Securities, as applicable, payment from Bell
Canada International Inc. of the purchase price of such Firm Securities or
Option Securities, as applicable, by wire transfer of immediately available
funds to a bank account designated by the Underwriters, concurrently with
the closing hereunder on such Closing Date.
<PAGE>
27
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to
counsel for the Underwriters.
9. Expenses of Underwriters. If the Company shall fail to tender the
------------------------
Offered Securities for delivery to the Underwriters for any reason permitted
under this Agreement, or if the Underwriters shall decline to purchase the
Offered Securities for any reason permitted under this Agreement other than as
set forth in Paragraph 4 or Paragraph 7(b), the Company shall reimburse the
Underwriters for the reasonable fees and expenses of their counsel and for such
other out-of-pocket expenses as shall have been incurred by them in connection
with this Agreement and the proposed purchase of the Offered Securities, and
upon demand the Company shall pay the full amount thereof to the Underwriters.
10. Notices. All notices or communications hereunder shall be
-------
sufficient if in writing and if sent to you shall be mailed, delivered or
telegraphed and confirmed to you at Three World Financial Center, New York, New
York 10285, Attention: Syndicate Department (Fax: 212-528-8822). Any notice by
the Underwriters to the Company shall be sufficient if given in writing or by
telegraph addressed to the Company at 9697 East Mineral Avenue, Englewood,
Colorado 80112, Attention of the General Counsel.
11. Parties. This agreement shall inure to the benefit of and be
-------
binding upon the Underwriters, the Company and their respective successors.
This Agreement and the terms and provisions hereof are for the sole benefit of
only those persons, except that (a) the representations, warranties, indemnities
and agreements of the Company contained in this Agreement shall also be deemed
to be for the benefit of the person or persons, if any, who control any
Underwriter within the meaning of Section 15 of the Act, and (b) the indemnity
agreement of the Underwriters contained in Paragraph 6 of this Agreement shall
be deemed to be for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company. Nothing in this Agreement is intended or shall be construed to
give any person other than the persons referred to in this Paragraph any legal
or equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
12. Certain Definitions. For purposes of this Agreement, (a)
-------------------
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations and shall include affiliated partnerships only if the Company or
one of its corporate subsidiaries is a general partner of such partnership, (c)
"affiliate" has the meaning set forth in Rule 144 of the Rules and Regulations
and (d) "Material Adverse Effect" means
<PAGE>
28
a material adverse effect, financial or otherwise, on the Company and its
subsidiaries and its interests and its affiliated partnerships taken as a whole.
13. Governing Law; Counterparts. This Agreement shall be governed by
---------------------------
and construed in accordance with the laws of the State of New York. This
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart the executed counterparts shall together constitute a
single instrument.
<PAGE>
29
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
Jones Intercable, Inc.
By /s/ Elizabeth Steele
-----------------------------
Its: Vice President
Accepted:
Lehman Brothers Inc.
Donaldson Lufkin & Jenrette Securities Corporation
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Lehman Brothers Inc.
By /s/ Ros Stephenson
-------------------------------------
Authorized Representative
<PAGE>
SCHEDULE 1
Number of
Underwriters Shares
------------ ---------
Lehman Brothers Inc......................................... 3,541,000
Donaldson, Lufkin & Jenrette Securities Corporation......... 3,541,000
Morgan Stanley & Co. Incorporated........................... 204,000
Oppenheimer & Co., Inc...................................... 204,000
PaineWebber Incorporated.................................... 204,000
Sanford C. Bernstein & Co., Inc............................. 102,000
Hanifen, Imhoff Inc......................................... 102,000
Neuberger & Berman, LLC..................................... 102,000
---------
Total.................................................... 8,000,000
=========
<PAGE>
EXHIBIT 5.1
August 20, 1997
Jones Intercable, Inc.
9697 East Mineral Avenue
Englewood, Colorado 80112
Re: Jones Intercable, Inc. Class A Common Stock
Ladies and Gentlemen:
I am Vice President/General Counsel of Jones Intercable, Inc., a Colorado
corporation (the "Company"), and I have acted as counsel to it in connection
with the authorization, issuance and sale by the Company of up to 9,200,000
shares of the Company's Class A Common Stock, $.01 par value per share (the
"Class A Common Stock"). The shares of Class A Common Stock have been registered
with the Securities and Exchange Commission pursuant to a Form S-3 Registration
Statement (No. 33-62537) declared effective November 27, 1995 (the "Registration
Statement"). The Class A Common Stock will be sold by the Company to Lehman
Brothers Inc. and Donaldson Lufkin & Jenrette Securities Corporation and the
several other underwriters of the public offering of the shares of Class A
Common Stock named in the underwriting agreement with respect thereto.
In rendering this opinion, I have made such investigations of fact and
examinations of law as I have deemed appropriate for the purposes of giving the
opinion set forth herein. I have examined originals or copies, certified or
otherwise identified to my satisfaction, of such records, documents,
certificates and agreements as I have deemed necessary. This opinion is limited
in all respects to the laws of the State of Colorado.
<PAGE>
Jones Intercable, Inc.
August 20, 1997
Page 2
Based upon and subject to the foregoing, it is my opinion that the
9,200,000 shares of Class A Common Stock have been duly and validly authorized
for issuance and, when issued and sold in accordance with the provisions of the
underwriting agreement dated August 20, 1997, between the Company and Lehman
Brothers Inc. and Donaldson Lufkin & Jenrette Securities Corporation, the Class
A Common Stock will be validly issued, fully paid and non-assessable.
I hereby consent to the reference to me under the heading "Legal Matters"
in the Company's Prospectus Supplement dated August 20, 1997 and I further
consent to the use of this opinion as an exhibit to a Form 8-K current report to
be filed by the Company and to its incorporation by reference as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Elizabeth M. Steele
------------------------------
Elizabeth M. Steele
Vice President/General Counsel
(31707)
