<PAGE>
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): March 21, 1997
--------------
JONES INTERCABLE, INC.
----------------------
(Exact name of registrant as specified in its charter)
Colorado 1-9953 84-0613514
-------- ------ ----------
(State of Organization) (Commission File No.) (IRS Employer
Identification No.)
P.O. Box 3309
9697 E. Mineral Avenue, Englewood, CO 80155-3309
------------------------------------------------
(Address of principal executive office and Zip Code)
----------------------------------------------------
Registrant's telephone number, including area code (303) 792-3111
--------------
<PAGE>
Item 5. Other Events.
------------
Pursuant to an effective Registration Statement on Form S-3
(No. 33-62537) allowing it to offer up to $600,000,000 of senior debt
securities, senior subordinated debt securities, subordinated debt securities
and Class A Common Stock, Jones Intercable, Inc. (the "Company") issued and sold
$250,000,000 of its 8 7/8% Senior Notes Due 2007 (the "Notes") on March 18, 1997
in a transaction which closed on March 21, 1997. Interest on the Notes is
payable semiannually on April 1 and October 1 of each year, commencing October
1, 1997. The Notes will mature on April 1, 2007. The Notes will not be
redeemable prior to April 1, 2004. From April 1, 2004 until March 31, 2005, the
Notes will be redeemable, in whole or in part, on at least 30 and not more than
60 days' notice at the option of the Company from time to time at 101.109% of
principal amount, together with accrued interest to the date fixed for
redemption. On or after April 1, 2005, the Notes will be redeemable, in whole
or in part, on at least 30 and not more than 60 days' notice at the option of
the Company from time to time at 100.000% of principal amount, together with
accrued interest to the date fixed for redemption.
The Company anticipates that the approximately $244,092,500 (after
payment of estimated expenses) net proceeds from the offering of the Notes will
be used to retire the $160 million outstanding issue of the Company's 11.5%
Subordinated Debentures due 2004 (the "11.5% Debentures") at 106.75% of the
principal amount thereof and for general corporate purposes. The 11.5%
Debentures are redeemable on July 15, 1997. Pending any such use of the
proceeds, the proceeds will be applied to reduce the amounts outstanding under
the Company's revolving credit facilities.
Item 7. Financial Statements and Exhibits
---------------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
1.1 Terms Agreement dated March 18, 1997, between the Company and
Lehman Brothers Inc., Chase Securities Inc., NationsBanc Capital
Markets, Inc. and TD Securities (USA) Inc.
-2-
<PAGE>
4.1 Second Supplemental Indenture dated March 21, 1997 with respect
to $250,000,000 aggregate principal amount of the Company's 8
7/8% Senior Notes due 2007, between the Company and U.S. Trust
Company of California, N.A.
5 Opinion of Elizabeth M. Steele as to the legality of the
issuance of the Notes.
23(a) Consent of Ernst & Young LLP (New York City) to the reference
to said firm under the caption "Experts" in the Company's
prospectus supplement dated March 18, 1997 to the prospectus
included in the Company's registration statement on Form S-3,
No. 33-62537, and to the incorporation by reference therein of
said firm's reports dated April 12, 1996 and May 15, 1996 with
respect to certain historical financial statements relating to
cable television systems acquired by the Company during 1996,
which reports and historical financial statements were filed
with the Securities and Exchange Commission by the Company as
exhibits to Current Reports on Form 8-K filed on May 14, 1996
and June 26, 1996.
23(b) Consent of Ernst & Young LLP (Denver) to the reference to said
firm under the caption "Experts" in the Company's prospectus
supplement dated March 18, 1997 to the prospectus included in
the Company's registration statement on Form S-3, No. 33-62537,
and to the incorporation by reference therein of said firm's
report dated May 2, 1996 with respect to certain historical
financial statements relating to cable television systems
acquired by the Company during 1996, which report and historical
financial statements were filed with the Securities and Exchange
Commission by the Company as exhibits to a Current Report on
Form 8-K filed on May 14, 1996.
-3-
<PAGE>
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.
Dated: March 21, 1997 By: /s/ Elizabeth M. Steele
---------------------------
Elizabeth M. Steele
Vice President
-4-
<PAGE>
EXHIBIT 1.1
TERMS AGREEMENT
---------------
March 18, 1997
Jones Intercable, Inc.
9697 East Mineral Avenue
Englewood, CO 80112
Attn: Mr. Kevin Coyle
Dear Sirs:
We (the "Underwriters") understand that Jones Intercable, Inc., a
Colorado corporation (the "Company"), proposes to issue and sell $250,000,000
aggregate principal amount of its senior debt securities (the "Underwritten
Securities"). Subject to the terms and conditions set forth herein or
incorporated by reference herein, the Underwriters named in Schedule I hereto
offer to purchase, severally and not jointly, the principal amounts of such
Underwritten Securities set forth opposite their names in such list at 97.641%
of the principal amount thereof (plus accrued interest, if any, on the
Underwritten Securities from March 21, 1997 to Closing Date). The Closing Date
shall be March 21, 1997, at 10 a.m. at the offices of Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017.
The Underwritten Securities shall have the terms set forth in the
Prospectus dated November 27, 1995, and the Prospectus Supplement dated March
18, 1997, including the following:
Title: 8-7/8% Senior Notes Due 2007
Maturity: April 1, 2007
Interest Rate: 8-7/8%
Interest Payment Dates: April 1 and October 1
Redemption Provisions: Redeemable by the Company on or after
April 1, 2004,
in whole or in part, at 101.109% of principal amount, and on or
after April 1, 2005 at 100.000% of principal amount, in each case
together with accrued interest to the redemption date.
Public Offering Price: 99.440% of principal amount, plus
accrued interest, if any, from March 21, 1997
All the provisions contained in the document entitled "Jones
Intercable, Inc. --Debt Securities -- Underwriting Agreement Basic Provisions"
and dated March 15, 1995 (the "Basic Provisions"), a copy of which you have
previously received, are herein incorporated by reference in their entirety and
shall be deemed to be a part of this Terms Agreement to the same extent as if
the Basic Provisions had been set forth in full herein, except that Simpson
Thacher & Bartlett shall serve as counsel for the Underwriters and Cole Raywid &
Braverman shall serve as special counsel to the Company, in each case in
substitution for the
<PAGE>
firm so designated in the Basic Provisions, and except as provided for below.
Terms defined in the Basic Provisions are used herein as therein defined.
Please accept this offer by signing a copy of this Terms Agreement in
the space set forth below and returning the signed copy to us, or by sending us
a written acceptance in the following form:
"We hereby accept your offer, set forth in the Terms Agreement, dated
March 18, 1997, to purchase the Underwritten Securities on the terms set
forth therein."
Very truly yours,
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
NATIONSBANK CAPITAL MARKETS, INC.
TD SECURITIES (USA) INC.
By Lehman Brothers Inc.
By: /s/ John W. Russell, Jr.
---------------------------------
Name: John W. Russell, Jr.
Title: Managing Director
Three World Financial Center
New York, New York 10285
Attention: John W. Russell, Jr.
Accepted:
JONES INTERCABLE, INC.
By: /s/ Elizabeth M. Steele
----------------------------
Elizabeth M. Steele
Vice President/General Counsel
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
Principal Amount
of Securities to
Underwriters Be Purchased
------------ ----------------
<S> <C>
Lehman Brothers Inc. $150,000,001
Chase Securities Inc. 33,333,333
NationsBank Capital Markets, Inc. 33,333,333
TD Securities (USA) Inc. 33,333,333
------------
Total. . . . . . . . . . . . . .$250,000,000
</TABLE>
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
JONES INTERCABLE, INC.
and
U.S. TRUST COMPANY OF CALIFORNIA, N.A., Trustee
---------------------------------
Second Supplemental Indenture
Dated as of March 21, 1997
---------------------------------
8-7/8% Senior Notes Due 2007
- --------------------------------------------------------------------------------
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of March 21, 1997 (the "Second
Supplemental Indenture"), to the Indenture, dated as of March 23, 1995 (the
"Indenture"), between JONES INTERCABLE, INC., a corporation duly organized and
existing under the laws of the State of Colorado (the "Company"), having its
principal office at 9697 E. Mineral Avenue, Englewood, Colorado 80112, and U.S.
TRUST COMPANY OF CALIFORNIA, N.A., a national banking association organized and
existing under and by virtue of the laws of the United States of America (the
"Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
the Indenture to provide for the issuance from time to time of one or more
series of its senior debt securities (the "Securities") to be issued in one or
more series as in the Indenture provided;
WHEREAS, the Company desires and has requested the Trustee to join it in
the execution and delivery of this Second Supplemental Indenture in order to
establish and provide for the issuance by the Company of a series of Securities
designated as its 8-7/8% Senior Notes Due 2007 in the aggregate principal amount
of $250,000,000, substantially in the form attached hereto as Exhibit A (the "8-
7/8% Senior Notes"), on the terms set forth herein.
WHEREAS, Section 11.01 of the Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee without the consent
of any holder of any Securities for such purpose provided certain conditions are
met;
WHEREAS, the conditions set forth in the Indenture for the execution and
delivery of this Second Supplemental Indenture have been complied with; and
WHEREAS, all things necessary to make this Second Supplemental Indenture a
valid agreement of the Company and the Trustee, in accordance with its terms,
and a valid amendment of, and supplement to, the Indenture have been done;
NOW THEREFORE:
In consideration of the premises and the purchase and acceptance of the 8-
7/8% Senior Notes by the holders thereof the Company mutually covenants and
agrees with the Trustee, for the equal and proportionate benefit of all holders
of the 8-7/8% Senior Notes, that the Indenture is supplemented and amended, to
the extent and for the purposes expressed herein, as follows:
PARAGRAPH A. SCOPE OF THIS SECOND
SUPPLEMENTAL INDENTURE
----------------------
The changes, modifications and supplements to the Indenture effected by
this Second Supplemental Indenture in Paragraphs B and C hereof shall only be
applicable with respect to, and govern the terms of, the 8-7/8% Senior Notes
issued by the Company, which
<PAGE>
2
shall be limited in aggregate principal amount to $250,000,000, except as
provided in Section 2.01(2) of the Indenture, and shall not apply to any other
Securities which may be issued under the Indenture unless a supplemental
indenture with respect to such other Securities specifically incorporates such
changes, modifications and supplements.
PARAGRAPH B. ADDITIONAL PROVISIONS
---------------------
B1. ADDITIONAL DEFINITIONS - Each of the following definitions, which
----------------------
constitute part of this Second Supplemental Indenture, shall be inserted in
proper alphabetical order in Article 1:
Affiliate: The term "Affiliate" of any specified Person shall mean
---------
any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For the
purposes of this definition, "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), when
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting
securities or by agreement or otherwise.
Annualized Pro Forma Operating Cash Flow: The term "Annualized Pro
----------------------------------------
Forma Operating Cash Flow" shall mean Pro Forma Operating Cash Flow for the
latest fiscal quarter ended prior to the date as of which the Annualized
Pro Forma Operating Cash Flow is being determined multiplied by four.
Asset Sale: The term "Asset Sale" shall mean the sale, transfer or
----------
other disposition (other than to the Company or any of its Subsidiaries) in
any single transaction or series of related transactions of (a) any Capital
Stock of any Subsidiary, (b) all or substantially all of the assets of the
Company or any Subsidiary or (c) all or substantially all of the assets of
a division, line of business, cable television system, or comparable
business segment of the Company or any Subsidiary.
Capitalized Lease Obligation: The term "Capitalized Lease Obligation"
----------------------------
shall mean, as applied to any Person, any lease of any property (whether
real, personal, or mixed) by that Person as lessee which, in conformity
with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person.
Cash Flow Available for Interest Expense: The term "Cash Flow
----------------------------------------
Available for Interest Expense" shall mean, for any Person, for any period,
(A) the sum of the amount for such period of (i) Net Income, (ii) Interest
Expense, (iii) provisions for taxes based on income (excluding taxes
related to gains and losses excluded from the definition of Net Income),
(iv) depreciation expense, (v) amortization expense, and (vi) any other
non-cash items reducing the Net Income of such Person for such period,
minus (B) all non-cash items increasing Net Income of such Person, all as
-----
determined on a consolidated basis in accordance with GAAP; provided that
if, during such period, such Person shall have made any Asset Sale, Cash
Flow Available for Interest
<PAGE>
Expense of such Person for such period shall be reduced by an amount equal
to the Cash Flow Available for Interest Expense (if positive) directly
attributable to the assets which are the subject of such Asset Sale for the
period or increased by an amount equal to the Cash Flow Available for
Interest Expense (if negative) directly attributable thereto for such
period.
Currency Agreement: The term "Currency Agreement" shall mean any
------------------
foreign exchange contract, currency swap agreement or other similar
agreement or arrangement designed to protect against fluctuations in
currency values.
Debt: The term "Debt" of any Person shall mean (without duplication)
----
any indebtedness, contingent or otherwise, in respect of borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), or evidenced by bonds, notes,
debentures or similar instruments or representing the balance deferred and
unpaid of the purchase price of any property (except any such balance that
constitutes a trade payable or an accrued liability arising in the ordinary
course of business that is not overdue by more than 120 days or that is
being contested in good faith), if and to the extent any of the foregoing
indebtedness would appear as a liability upon a balance sheet of the
Company in accordance with GAAP.
8-7/8% Senior Notes: The term "8-7/8% Senior Notes" shall mean the
-------------------
Company's 8-7/8% Senior Notes Due 2007 originally issued in the aggregate
principal amount of $250,000,000 pursuant to this Second Supplemental
Indenture.
GAAP: The term "GAAP" shall mean generally accepted accounting
----
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession as in effect on the
date hereof.
incurrence: The term "incurrence" shall have the meaning assigned to
----------
such term in Section 5.09 hereof.
Indebtedness: The term "Indebtedness" of any Person shall mean the
------------
Debt of such Person and shall also include, to the extent not otherwise
included, any Capitalized Lease Obligation, the maximum fixed repurchase
price of any Redeemable Stock, the aggregate liquidation preference of the
issued and outstanding shares of preferred stock of any Subsidiary,
indebtedness secured by a Lien to which the property or assets owned or
held by such Person are subject (whether or not the obligations secured
thereby shall have been assumed), guarantees of items that would constitute
Indebtedness under this definition (whether or not such items would appear
upon the balance sheet of such Person), letters of credit and letter of
credit reimbursement obligations (whether or not such items would appear on
such balance sheet), and obligations in respect of Currency Agreements and
Interest Swap
<PAGE>
Obligations, and any renewal, extension, refunding or amendment of any of
the foregoing. For purposes of the preceding sentence, the maximum fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were repurchased on any date
on which Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon or measured by the fair market
value of such Redeemable Stock (or any equity security for which it may be
exchanged or converted), such fair market value shall be determined in good
faith by the Board of Directors. The amount of Indebtedness of any Person
at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of
any such contingent obligations at such date.
Interest Expense: The term "Interest Expense" of any Person shall
----------------
mean, for any period, the aggregate amount of (i) interest in respect of
Indebtedness of such Person (excluding interest attributable to cable
television systems held for resale and including amortization of original
issue discount on any such Indebtedness and the interest portion of any
deferred payment obligation, calculated in accordance with the effective
interest method of accounting, all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers' acceptance
financing and the net costs associated with Interest Swap Obligations and
Currency Agreements), and (ii) all but the principal component of rentals
in respect of Capitalized Lease Obligations, paid, accrued or scheduled to
be paid or accrued by such Person during such period.
Interest Swap Obligations: The term "Interest Swap Obligations" shall
-------------------------
mean the obligations of any Person pursuant to any arrangement with any
other Person whereby, directly or indirectly, such Person is entitled to
receive from time to time periodic payments calculated by applying either a
floating or a fixed rate of interest on a stated notional amount in
exchange for periodic payments made by such Person calculated by applying a
fixed or a floating rate of interest on the same notional amount.
Lien: The term "Lien" shall mean any lien, security interest, charge
----
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to
give any security interest).
Maturity Date: The term "Maturity Date" shall mean the earlier to
-------------
occur of April 1, 2007 and the date upon which the 8-7/8% Senior Notes
shall be declared due and payable pursuant to the terms of Section 7.01
Net Income: The term "Net Income" of any Person shall mean the net
----------
income (loss) of such Person, determined in accordance with GAAP,
excluding, however, (i) any gain or loss realized upon an Asset Sale
(including, without limitation, dispositions pursuant to sale and leaseback
transactions) of such Person not in the
<PAGE>
ordinary course of business, (ii) the amount of any non-recurring
distribution from any Affiliated Partnership and (iii) extraordinary gains
and losses.
Pro Forma Operating Cash Flow: The term "Pro Forma Operating Cash
-----------------------------
Flow" shall mean, for any period, (A) the sum of the amount for such period
of (i) Net Income, (ii) Interest Expense, (iii) provisions for taxes based
on income (excluding taxes related to gains and losses excluded from the
definition of Net Income), (iv) depreciation expense, (v) amortization
expense, (vi) any other non-cash items reducing the Net Income of such
Person for such period, minus (B) all non-cash items increasing Net Income
of such Person for such period; all as determined on a consolidated basis
for the Company and its Subsidiaries in accordance with GAAP after giving
effect to the following: (i) if, during such period, the Company or any
Subsidiary shall have any cable television systems held for resale, to the
extent not otherwise included, Pro Forma Operating Cash Flow of the Company
for such period shall be increased by an amount equal to the Pro Forma
Operating Cash Flow (if positive) of such cable television system held for
resale for such period or increased by an amount equal to the Pro Forma
Operating Cash Flow (if negative) directly attributable thereto for such
period; (ii) if, during such period, the Company or any of its Subsidiaries
shall have made any Asset Sale, Pro Forma Operating Cash Flow of the
Company for such period shall be reduced by an amount equal to the Pro
Forma Operating Cash Flow (if positive) directly attributable to the assets
which are the subject of such Asset Sale for the period or decreased by an
amount equal to Pro Forma Operating Cash Flow (if negative) directly
attributable thereto for such period; and (iii) if, during such period,
Indebtedness is incurred by the Company or any of its Subsidiaries for or
in connection with the acquisition of any Person or business which
immediately after acquisition is a Subsidiary or whose assets are held
directly by the Company or a Subsidiary, Pro Forma Operating Cash Flow
shall be computed so as to give pro forma effect to the acquisition of such
Person or business as if such acquisition had occurred as of the first day
of such period.
Redeemable Stock: The term "Redeemable Stock" shall mean any Capital
----------------
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof,
in whole or in part, on or prior to the Maturity Date.
Restricted Payment: The term "Restricted Payment" shall mean, with
------------------
respect to any Person, (i) the declaration or payment of any dividend on,
or the making of any distribution to the holders (as such) of, any shares
of its Capital Stock (other than (A) dividends or distributions payable in
Capital Stock (other than Redeemable Stock) of the Company or (B) dividends
or distributions from a Subsidiary to any wholly-owned Subsidiary or to the
Company); or (ii) the direct or indirect purchase, redemption or other
acquisition or retirement value of any Capital Stock of such Person; or
(iii) any direct or Indirect payment to redeem, repurchase, defease or
otherwise acquire or retire for value, prior to any scheduled maturity,
scheduled repayment or scheduled sinking
<PAGE>
fund payment, any Indebtedness of the Company that (a) is subordinate in
right of payment to the 8-7/8% Senior Notes and (b) has a scheduled
maturity subsequent to the Maturity Date of the 8-7/8% Senior Notes.
B2. ADDITIONAL SECTIONS - Each of the following provisions, which
--------------------
constitute part of this Second Supplemental Indenture, is numbered to conform
with the format of the Indenture:
SECTION 4.09. Optional Redemption.
-------------------
The Notes will not be redeemable by the Company prior to April 1,
2004. From April 1, 2004 until March 31, 2005, the Notes will be redeemable, in
whole or in part, on at least 30 and not more than 60 days' notice at the option
of the Company from time to time at 101.109% of principal amount, together with
accrued interest to the date fixed for redemption. On or after April 1, 2005,
the Notes will be redeemable, in whole or in part, on at least 30 and not more
than 60 days' notice at the option of the Company from time to time at 100.000%
of principal amount, together with accrued interest to the date fixed for
redemption.
SECTION 5.06. Limitation on Restricted Payments.
---------------------------------
The Company shall not, and shall not permit any Subsidiary to, make
any Restricted Payment if at the time of making such Restricted Payment:
(i) an Event of Default shall have occurred and be continuing, or
shall occur as a consequence thereof, or
(ii) if upon giving effect to such payment the aggregate amount
expended for all such Restricted Payments subsequent to February 29, 1992 shall
exceed the sum of (a) the excess of (x) the aggregate of Cash Flow Available for
Interest Expense of the Company and its Subsidiaries, on a consolidated basis,
accrued during all fiscal quarters ended subsequent to February 29, 1992 over
(y) the product of (1) 1.2 and (2) the aggregate of Interest Expense of the
Company and its Subsidiaries, on a consolidated basis, accrued during all fiscal
quarters ended subsequent to February 29, 1992, (b) the net proceeds received by
the Company from the issuance or sale, after February 29, 1992, of Capital Stock
of the Company (other than Redeemable Stock) and of any convertible securities
which have been converted into Capital Stock (other than Redeemable Stock) and
(c) $15,000,000.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration when the payment would
have complied with the dividend restriction set forth above on the date of
declaration; (ii) the retirement of any shares of the Company's Capital Stock in
exchange for, or out of the net proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of, other shares of the Company's
Capital Stock (other than Redeemable Stock); and (iii) the redemption,
repurchase or retirement of any Indebtedness which is subordinated to the 8-7/8%
Senior Notes with the proceeds of, or in exchange for, (a) any Indebtedness of
the Company which (x) is
<PAGE>
subordinate in right of payment to the 8-7/8% Senior Notes and (y) has a
scheduled final maturity subsequent to the Maturity Date of the 8-7/8% Senior
Notes, or (b) any shares of the Company's Capital Stock other than Redeemable
Stock. Payments pursuant to clause (i) of the preceding sentence shall be
included, and payments pursuant to clauses (ii) and (iii) of such sentence shall
be excluded in calculating the aggregate amount of Restricted Payments pursuant
to the first paragraph of this Section 5.06; provided in the case of clauses
---------
(ii) and (iii)(b) that the net proceeds from the sale of Capital Stock so
applied to retire, repurchase or redeem Capital Stock or subordinated
Indebtedness are excluded in calculating amounts under clause (ii)(b) of the
first paragraph of this Section 5.06.
SECTION 5.07. Limitation On Transactions with Affiliates.
------------------------------------------
The Company shall not, and shall not permit any Subsidiary to, engage
in any single transaction or series of related transactions having a value in
excess of $10,000,000 with an Affiliate of the Company (other than a
Subsidiary), or any director, officer or employee of the Company or any
Subsidiary, except for (i) any payment for goods or services purchased in the
ordinary course of business, (ii) temporary loans or advances to any Affiliated
Partnership on a basis consistent with past practice, (iii) allocation of
corporate overhead to Affiliates of the Company and to the Company and its
Subsidiaries on a basis which is fair and reasonable, and (iv) the making of any
payment pursuant to any agreement or arrangement with any Affiliate entered into
prior to the date of this Indenture. Notwithstanding the foregoing, such
provision shall not prohibit any such transaction the terms of which, taken as a
whole, are determined by the Board of Directors of the Company to be fair and in
the best interests of the Company or any Subsidiary.
SECTION 5.09. Limitation on Additional Indebtedness.
-------------------------------------
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create, incur, issue, assume, or become liable for,
contingently or otherwise (collectively, an "incurrence"), any Indebtedness
(other than the 8-7/8% Senior Notes) unless, after giving effect to such
incurrence on a pro forma basis, Indebtedness of the Company and its
Subsidiaries, on a consolidated basis, shall not be more than nine times
Annualized Pro Forma Operating Cash Flow for the latest fiscal quarter preceding
such incurrence for which financial statements are available. Notwithstanding
the above, neither the Company nor any Subsidiary shall be prohibited from
incurring (i) Indebtedness incurred in connection with Currency Agreements or
Interest Swap Obligations, (ii) Indebtedness outstanding on the date of this
Indenture, (iii) letters of credit and letter of credit reimbursement
obligations that support performance obligations not to exceed $15,000,000 in
the aggregate outstanding at any time and (iv) Indebtedness resulting from the
extension, refunding or renewal of any Indebtedness existing prior to such
extension, renewal or refunding which does not result in an increase in the
principal amount of such existing Indebtedness then outstanding or, in the case
of existing Indebtedness which matures subsequent to the Maturity Date, does not
result in the maturity of such Indebtedness prior to the Maturity Date of the 8-
7/8% Senior Notes or, if the existing indebtedness is subordinated in right of
payment to the 8-7/8% Senior Notes, the Indebtedness resulting from such
extension, renewal or refunding is also subordinated in right of payment to the
8-7/8% Senior Notes.
<PAGE>
8
SECTION 7.01. Events of Default.
-----------------
Section 7.01 of the Indenture is amended by deleting subclause (f) in
its entirety and substituting in lieu thereof the following:
(f) default in the payment at final maturity of principal, or
premium, if any, aggregating $5,000,000 or more with respect to any Indebtedness
of the Company or any Subsidiary or the acceleration of any such Indebtedness,
which default shall not be cured or waived, or which acceleration shall not be
rescinded or annulled; for purposes of this Section 7.01(f), "final maturity"
shall mean, in the case of Indebtedness which is payable in installments, the
date on which the last installment of such Indebtedness is due or the date on
which such Indebtedness is due as a result of the acceleration thereof; and
(g) any final judgment or judgments for the payment of money in
excess of $5,000,000 shall be rendered against the Company or any Subsidiary and
shall not be discharged for any period of 60 consecutive days during which a
stay of enforcement shall not be in effect.
SECTION 12.01. Company may Consolidate, etc. Only on Certain Terms.
---------------------------------------------------
Section 12.01 is amended by (i) deleting the word "and" at the end of
subclause b, (ii) deleting the period at the end of subclause c and substituting
in lieu thereof a semicolon followed by the word "and" and (iii) adding the
following subclause at the end thereof, to read in its entirety as follows:
(d) immediately after giving effect to such transaction on a pro
forma basis, the consolidated Indebtedness of the Person formed by or surviving
any such consolidation or merger, or to which such sale, assignment, transfer,
lease or conveyance or disposition shall be made, shall not be more than nine
times Annualized Pro Forma Operating Cash Flow for the latest fiscal quarter
preceding such transaction for which financial statements are available.
<PAGE>
9
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed all as of the day and year first
above written.
JONES INTERCABLE, INC.
By: /s/ Elizabeth M. Steele
------------------------------
Name: Elizabeth M. Steele
Title: Vice President
U.S. TRUST COMPANY OF CALIFORNIA, N.A.
By: /s/ Sandee Parks
-------------------------------
Name: Sandee Parks
Title: Vice President
<PAGE>
A-1
EXHIBIT A
[Form of Face of Note]
No. $
JONES INTERCABLE, INC.
8-7/8% SENIOR NOTE DUE 2007
Jones Intercable, Inc., a corporation duly organized and existing
under the laws of the State of Colorado (together with any successor corporation
under the Indenture hereinafter referred to, the "Company"), for value received,
hereby promises to pay to , or registered assigns, the principal
sum of Dollars, on April 1, 2007.
Interest Payment Dates: April 1 and October 1, commencing on
October 1, 1997.
Record Dates: March 15 and September 15.
This Note is continued on the reverse hereof and the additional
provisions there set forth shall for all purposes have the same effect as if set
forth at this place.
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereto shall have been signed by the
Trustee under the Indenture.
IN WITNESS WHEREOF, Jones Intercable, Inc. has caused this Note to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
Dated: JONES INTERCABLE, INC.
[Corporate Seal] By:
---------------------------
Attest:
- --------------------------- ------------------------------
Secretary Chairman of the Board
<PAGE>
A-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 8-7/8% Senior Notes Due 2007 referred to in the
Indenture dated as of March 23, 1995, as supplemented by the Second Supplemental
Indenture, dated as of March 21, 1997, between Jones Intercable, Inc. and U.S.
Trust Company of California, N.A., as Trustee.
U.S. TRUST COMPANY OF
CALIFORNIA, N.A.
By:
-----------------------------------
Authorized Signatory
Authentication Date:
<PAGE>
A-3
[Form of Reverse of Note]
JONES INTERCABLE, INC.
8-7/8% SENIOR NOTE DUE 2007
1. Interest and Principal Payments. JONES INTERCABLE, INC. (together
-------------------------------
with any successor corporation under the Indenture hereinafter referred to, the
"Company") promises to pay interest on the principal amount of this 8-7/8%
Senior Note Due 2007 (this "Note") at a rate equal to 8-7/8% per annum. The
Company will pay interest semi-annually in arrears on each April 1 and October 1
(an "Interest Payment Date") of each year commencing October 1, 1997 to the
holder of record of this Note at the close of business on the preceding March 15
and September 15, respectively. Interest on this Note will accrue from the most
recent date as to which interest has been paid or, if no interest has been paid,
from March 21, 1997. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company will pay the principal amount of this Note on April 1,
2007. The Company shall pay interest on overdue principal at the rate of 8-7/8%
per annum and interest on overdue installments of interest, to the extent
lawful, at the same rate.
2. Method of Payment. The Company will pay the interest on this Note
-----------------
provided for in paragraph 1 above (except defaulted interest) to the person who
is the registered holder of this Note (also referred to as the "Noteholder") at
the close of business on the March 15 or September 15, as the case may be, next
preceding the Interest Payment Date. The holder must surrender this Note to the
Office of the Trustee in Los Angeles, California, to collect principal payments.
The Company will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
The Company may pay such principal and interest by its check payable in such
money by mailing an interest check to the holder's registered address. If a
payment date is not a Business Day, payment may be made on the next succeeding
Business Day, and no interest shall accrue for the intervening period.
3. Office or Agency of Company. The principal office of the Trustee
---------------------------
in Los Angeles, California, shall be the office or agency of the Company where
Notes may be presented for registration of transfer, where notices and demands
with respect to the Notes and the Indenture may be served and where the Notes
may be presented for payment, unless the Company shall maintain some other
office or agency for such purpose and shall give the Trustee written notice
thereof. In case the Company shall fail to maintain such other office or agency,
presentations may be made and notices and demands may be served at the principal
office of the Trustee.
4. Indenture. The Company issued the Notes under an Indenture dated
---------
as of March 23, 1995, as supplemented by the Second Supplemental Indenture,
dated as of March 21, 1997 (as supplemented, the "Indenture"), between the
Company and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date
of the Indenture. The Notes are subject to all such terms, and holders of Notes
are referred to the Indenture and such Act for a statement of such terms. The
Notes are general
<PAGE>
A-4
obligations of the Company limited to $250,000,000 in aggregate principal
amount, except for Notes issued in substitution for exchanged, destroyed, lost
or stolen Notes. Capitalized terms used in this Note and not defined in this
Note shall have the respective meanings set forth in the Indenture.
5. Optional Redemption.
-------------------
The Notes will not be redeemable by the Company prior to April 1,
2004. From April 1, 2004 until March 31, 2005, the Notes will be redeemable, in
whole or in part, on at least 30 and not more than 60 days' notice at the option
of the Company from time to time at 101.109% of principal amount, together with
accrued interest to the date fixed for redemption. On or after April 1, 2005,
the Notes will be redeemable, in whole or in part, on at least 30 and not more
than 60 days' notice at the option of the Company from time to time at 100.000%
of principal amount, together with accrued interest to the date fixed for
redemption.
The Notes are not subject to any mandatory sinking fund or mandatory
redemption.
6. Satisfaction and Discharge of Indenture. Subject to certain
---------------------------------------
conditions set forth in the Indenture, the Company may, by the deposit of funds
with the Trustee, discharge its obligations under the Indenture with respect to
the Notes.
7. Denominations, Transfer, Exchange. The Notes are in registered
---------------------------------
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The officer or agent of the Company referred to in
Section 3 hereof may require a holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture.
8. Persons Deemed Owners. The Company, the Trustee and any agent of
---------------------
the Company or the Trustee may treat the Person in whose name this Note is
registered upon the books maintained at the office or agency of the Company for
the registration of Notes as the owner for all purposes.
9. Amendments and Waivers. The Company and the trustee, with the
----------------------
consent of the holders of not less than a majority in aggregate principal amount
of the Notes at the time outstanding, may execute supplemental indentures (which
shall comply with the provisions of the Trust Indenture Act of 1939, as amended,
as then in effect) for the purpose of adding, changing or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in any
manner the rights of the holders of the Notes; provided, however, that no such
supplemental indenture may (i) extend the stated maturity of the Notes, reduce
the rate or extend the time of payment of interest thereon, reduce the principal
amount thereof or impair the right to institute suit for the enforcement of any
such payment on or after the stated maturity thereof (or, in the case of
redemption, on or after the redemption date), without the consent of each holder
of the Notes, (ii) reduce the aforesaid percentage of Notes, the consent of the
holders of which is required for any such supplemental indenture, without the
consent of each holder of the Notes then outstanding, or
<PAGE>
A-5
(iii) modify any of the provisions concerning modification of the Indenture
except to increase any such percentage or to provide that certain other
provisions of the Indenture cannot be modified or waived without the consent of
each holder of the Notes.
10. Events of Default and Remedies. Events of Default under the
------------------------------
Indenture include the following: a default in payment of principal of, or
premium, if any, on the Notes at maturity; a default in payment of interest on
the Notes, and continuance of such default for a period of 30 days; a failure by
the Company for 60 days after notice in the manner prescribed in the Indenture
to perform any other of the covenants or agreements in the Indenture; certain
events of bankruptcy, insolvency or reorganization of the Company or any
Significant Subsidiary; default in the payment at the final maturity of
principal or premium, if any, aggregating $5,000,000 or more with respect to
other Indebtedness of the Company or any Subsidiary or the acceleration of any
such Indebtedness which default shall not be cured or waived, or which
acceleration shall not be rescinded or annulled; or a rendering of a final
judgment in excess of $5,000,000 against the Company or any Subsidiary that is
not discharged for any period of 60 consecutive days during which a stay of
enforcement shall not be in effect. Subject to certain limitations in the
Indenture, if an Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% of the aggregate principal amount of the Notes then
outstanding may declare the principal amount of the Notes to be due and payable
immediately. The Indenture provides that such declaration in certain events may
be annulled by the holders of a majority in aggregate principal amount of the
Notes then outstanding. Noteholders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, holders of a majority in principal amount of the Notes then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Noteholders notice of any continuing default (except a
default in payment of principal, premium, if any, or interest) if it determines
that withholding notice is in their interest. The Company must furnish annual
compliance certificates to the Trustee. The above description of Events of
Default and remedies is qualified by reference and is subject in its entirety to
the more complete description thereof contained in the Indenture.
11. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may engage or be interested in any
financial or other transactions with the Company or any Subsidiary or Affiliate,
and may buy, own, hold and sell any Notes or other securities of the Company or
its Subsidiaries and Affiliates, make loans to and maintain any and all other
general banking and business relations with the Company or its Subsidiaries and
Affiliates, and may otherwise deal with the Company or its Subsidiaries and
Affiliates, as if it were not the Trustee.
12. No Recourse Against Others. No recourse shall be had for the
--------------------------
payment of the principal of or the interest on this Note, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any incorporator,
shareholder, officer, director or employee, as such, past, present or future, of
the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issue hereof, expressly waived and released.
<PAGE>
A-6
13. Authentication. This Note shall not be valid until authenticated
--------------
by the manual signature of the Trustee or an authenticating agent.
14. Unclaimed Money. If money for the payment of principal of or
---------------
interest on the Notes remains unclaimed for two years after the date upon which
such payment shall have become due, the Trustee or any paying agent will pay the
money back to the Company at its request. After such payment, holders entitled
to any portion of such money must look solely to the Company for payment
thereof.
15. Definitions and Abbreviations. All terms used in this Note which
-----------------------------
are defined in the Indenture shall have the meanings assigned to them in the
Indenture. Customary abbreviations may be used in the name of a Noteholder or an
assignee such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Noteholder upon written request and
without charge a copy of the Indenture. Requests may be made to: Jones
Intercable, Inc., 9697 E. Mineral Avenue, Englewood, Colorado 80112.
<PAGE>
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (We) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(insert assignee's soc. sec. or tax I.D. No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(print or type assignee's name, address and zip code)
and irrevocably appoint
- --------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: Your Signature:
------------ -----------------------------------
(Sign exactly as your name appears
on the other side of this Note.)
Signature Guarantee:
-----------------------
<PAGE>
Exhibit 5
---------
March 21, 1997
Jones Intercable, Inc.
9697 E. Mineral Avenue
Englewood, Colorado 80112
Re: JONES INTERCABLE, INC.
8 7/8% SENIOR NOTES DUE 2007
Gentlemen:
I have acted as counsel for Jones Intercable, Inc., a Colorado corporation
(the "Company"), in connection with the authorization, issuance and sale by the
Company of $250,000,000 principal amount of its 8 7/8% Senior Notes Due 2007
(the "Notes"), pursuant to the Terms Agreement dated March 18, 1997 (the "Terms
Agreement"), between the Company and Lehman Brothers Inc., Chase Securities
Inc., NationsBanc Capital Markets, Inc. and TD Securities (USA) Inc.
I am of the opinion that the Notes have been duly and validly issued by the
Company.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5 to the Company's Current Report on Form 8-K
dated March 21, 1997. I also consent to the reference to me under the heading
"Legal Matters" in the Prospectus Supplement, dated March 18, 1997, to the
Prospectus filed in the Company's Registration Statement on Form S-3 (No. 33-
62537).
Very truly yours,
/s/ Elizabeth M. Steele
-----------------------
Elizabeth M. Steele
General Counsel
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Prospectus Supplement, dated March 18, 1997, to the Prospectus filed in the
Registration Statement (Form S-3, No. 33-62537) of Jones Intercable, Inc.
("Jones"), and to the incorporation by reference therein of our report dated May
15, 1996, with respect to the financial statements of Cablevision of Savannah as
of December 31, 1995 and 1994, and for the years then ended, included in Jones'
Current Report on Form 8-K dated June 26, 1996, and to the incorporation by
reference therein of our report dated April 12, 1996, with respect to the
financial statements of Prince George's County as of December 31, 1995, and for
the period from April 1, 1995 through December 31, 1995, included in Jones'
Current Report on Form 8-K dated May 14, 1996, both filed with the Securities
and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
New York, New York
March 18, 1997
<PAGE>
EXHIBIT 23(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Prospectus Supplement, dated March 18, 1997, to the Prospectus filed in the
Registration Statement (Form S-3, No. 33-62537) of Jones Intercable, Inc.
("Jones"), and to the incorporation by reference therein of our report dated May
2, 1996, with respect to the financial statements of Warner Cable Communications
(Fairfax County, Virginia) as of December 31, 1995, and for the year then ended,
included in Jones' Current Report on Form 8-K dated May 14, 1996, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Denver, Colorado
March 18, 1997
