<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
JONES INTERCABLE, INC.
________________________________________________________________________________
(Name of Issuer)
Common Stock, $0.1 Par Value
________________________________________________________________________________
(Title of Class of Securities)
480206101
480206200
_______________________________________________________________
(CUSIP Number)
Elizabeth M. Steele
9697 E. Mineral Avenue, Englewood, Colorado 80112
________________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
August 12, 1998
_______________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
<PAGE>
- ----------------------- ---------------------
(COMMON STOCK) PAGE 2 OF 25 PAGES
CUSIP NO. 480206101
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Glenn R. Jones.
Social Security No. ###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
2,916,151
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
2,916,151
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,916,151 (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
57.0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
<PAGE>
- ----------------------- ---------------------
CUSIP NO. 480206200 PAGE 3 OF 25 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Glenn R. Jones.
Social Security No. ###-##-####
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 828,006
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
1,497,373
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 828,006
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
1,497,373
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,325,379 (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
6.5%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
<PAGE>
- ----------------------- ---------------------
(COMMON STOCK) PAGE 4 OF 25 PAGES
CUSIP NO. 480206101
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jones International, Ltd.
I.R.S. Identification No. 84-0595284
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Jones International, Ltd., a Colorado corporation. Principal business
and address: A holding company; 9697 E. Mineral Avenue, Englewood,
Colorado 80112.
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
2,916,151
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
2,916,151
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,916,151 (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
57.0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
HC
- ------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
(CLASS A COMMON STOCK) PAGE 5 OF 25 PAGES
CUSIP NO. 480206200
- ---------------------------------------- ----------------------------------
<TABLE>
<S> <C>
1 NAME OF REPORTING PERSON
S.S. OF I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jones International, Ltd.
I.R.S. Identification No. 84-0595284
- ----------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) /X/
- ----------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
- ----------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Jones International, Ltd., a Colorado corporation. Principal business and address:
A holding company; 9697 E. Mineral Avenue, Englewood, Colorado 80112.
- ----------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
-------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,497,373
EACH
-------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 0
WITH
-------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,497,373
- ----------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,497,373 (See Item 5)
- ----------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- ----------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.2%
- ----------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 1. SECURITY AND ISSUER
-------------------
The classes of equity securities to which this statement relates are
(i) the Common Stock, $.01 par value per share, of Jones Intercable, Inc., a
Colorado corporation (the "Company"), and (ii) the Class A Common Stock, $.01
par value per share, of the Company. The address of the Company's principal
executive offices is 9697 E. Mineral Avenue, Englewood, Colorado 80112.
ITEM 2. IDENTITY AND BACKGROUND:
-----------------------
The names of the persons filing this statement are:
1. Glenn R. Jones*, an individual residing in the State of Colorado.
2. Jones International, Ltd., a Colorado corporation
("International"). Mr. Jones is the Chairman of the Board of Directors and
Chief Executive Officer of International and owns all of the outstanding shares
of International. The principal business of International is acting as a
holding company.
3. Jones Entertainment Group, Ltd., a Colorado corporation ("JEG"),
is 80% owned by Jones 21st Century, Inc. (f/k/a Jones Digital Century, Inc.), a
Colorado corporation, and 20% owned by BCI (U.S. Cable) Limited (f/k/a Bell
Canada International BVI III Limited), a British Virgin Islands company. Jones
21st Century, Inc. is 95% owned by International and 5% owned by a member of Mr.
Jones' family. The principal business of JEG is the production of entertainment
programming.
4. Jones Space Segment, Inc., a Colorado corporation ("JSS"), is 81%
owned by International and 19% by Mr. Jones. The principal business of JSS is
leasing satellite space on a communications satellite.
5. Jones Global Group, Inc., a Colorado corporation ("JGG"), is 80%
owned by International and 20% by the Company. The principal business of JGG is
acting as a holding company.
______________
*Through Mr. Jones' direct and indirect ownership of International and the
Company, Mr. Jones may be deemed to be the beneficial owner of all the Common
Stock and Class A Common Stock held by each of the Jones Entities (as defined on
the following page).
6
<PAGE>
6. Jones Interdigital, Inc., a Colorado corporation ("Interdigital"),
is wholly owned by International. The principal business of Interdigital is
leasing equipment for the various Jones companies.
The foregoing persons (Nos. 1 through 6 above) are hereinafter
collectively referred to as the "Jones Entities". The name, business address,
present principal occupation or employment, and citizenship of each director and
executive officer of each of the Jones Entities are set forth on Schedules A
through E attached hereto. The address of the principal business office for
each of the Jones Entities is 9697 E. Mineral Avenue, Englewood, Colorado
80112.
During the last five years, none of the Jones Entities, nor any other
person controlling any of the Jones Entities, nor, to the best of the Jones
Entities knowledge, any of the persons listed on Schedules A through E attached
hereto, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
-------------------------------------------------
N/A
ITEM 4. PURPOSE OF TRANSACTION
----------------------
See Item 6.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
------------------------------------
The Jones Entities believe that as of August 12, 1998, there were
outstanding 5,113,021 shares of Common Stock and 35,973,892 shares of Class A
Common Stock.
7
<PAGE>
(a) Amount Beneficially Owned:
-------------------------
(i) Common Stock:
------------
<TABLE>
<CAPTION>
Number of
shares of Number of
Common Shares of
Stock Common
owned Stock owned Percent
Name Directly Indirectly of Ownership
---- -------- ---------- ------------
<S> <C> <C> <C>
Glenn R. Jones/(1)/ 0 2,916,151/(2)/ 57.0%
International/(1)/ 0 2,916,151/(2)/ 57.0%
BTH/(3)/ 0 2,878,151 56.3%
</TABLE>
(1) For purposes of Rule 13d-3, Mr. Jones may be deemed to have beneficial
ownership of the shares of Common Stock owned by International, JEG, JSS,
JGG and Interdigital. Also for purposes of Rule 13d-3, International may
be deemed to have beneficial ownership of the shares of Common Stock owned
by JEG, JSS, JGG and Interdigital. All of the shares of Common Stock held
by Mr. Jones are owned of record by a trust. See Item 6 below.
(2) Includes 474,400 shares held by Mr. Jones, 2,277,416 shares held by
International, 100,400 shares held by JEG, 35,707 shares held by JSS,
27,585 shares held by JGG and 643 shares held by Interdigital. All of the
shares of Common Stock held by International are owned of record by a
trust. See Item 6 below.
(3) For purposes of Rule 13d-3(d)(1)(i), the Jones Entities are informed that
BCI Telecom Holding Inc., a corporation incorporated under the Canada
Business Corporations Act ("BTH"), may be deemed to have beneficial
ownership of the 2,878,151 shares of Common Stock covered by the Option
Agreements (as defined in Item 6). By virtue of BTH being an indirect
wholly-owned subsidiary of BCE Inc., a corporation incorporated under the
Canada Business Corporations Act ("BCE"), the Jones Entities are informed
that BCE may be deemed to beneficially own the 30% equity interest in the
Company which is beneficially owned by BTH, and the 2,878,151 shares of
Common Stock covered by the Option Agreements. See, however, Item 6 below
8
<PAGE>
with respect to the rights of Comcast Corporation ("Comcast") to acquire
such shares of Common Stock upon the exercise of the Option Agreements.
Because of the existence of that certain Shareholders Agreement dated
December 20, 1994, between Mr. Jones, International, BTH and the Company (the
"Shareholders Agreement"), Mr. Jones and International may be deemed, pursuant
to Rule 13d-(5)(b)(1), to be members of a "group" with BTH. Mr. Jones and
International, however, disclaim that they are members of a "group" with BTH.
See Footnote 4 below. See also Item 6 below regarding an amendment to the
Shareholders Agreement.
The beneficial ownership of the Common Stock of the Company by each
director and executive officer of the Jones Entities are set forth on Schedule F
attached hereto.
(ii) Class A Common Stock:
---------------------
<TABLE>
<CAPTION>
Number of
shares of Number of
Class A Shares of
Common Stock Class A Common Percent
owned Stock owned of
Name Directly Indirectly Ownership
---- ------------- ---------------- ---------
<S> <C> <C> <C>
Glenn R. Jones/(1)/ 828,006/(2)/ 1,497,373/(3)/ 6.5%
International 1,497,373 -- 4.2%
BTH -- 12,782,500/(4)/ 35.5%
Comcast -- 12,782,500/(4)(5)/ 35.5%
</TABLE>
(1) For purposes of Rule 13d-3, Mr. Jones may be deemed to have beneficial
ownership of the shares of Class A Common Stock owned by International.
(2) Includes Mr. Jones' vested options to purchase 301,113 shares.
(3) Represents shares held of record by International.
<PAGE>
(4) Under Rule 13d(5)(b)(1) the group is deemed to have acquired beneficial
ownership of all of the equity securities of the Company beneficially owned
by the other members of the group. However, Mr. Jones and International
disclaim beneficial ownership of any shares of Common Stock or Class A
Common Stock through any beneficial ownership by BTH or Comcast.
Information contained herein relating to BTH and Comcast is provided to the
best of the Jones Entities' knowledge. See Item 6 below with respect to
the agreement between BTH and Comcast regarding the acquisition of the
shares by Comcast.
(5) Pursuant to Amendment No. 1 to Schedule 13D dated August 12, 1998 filed by
Comcast, Comcast claims shared dispositive power over such shares, which
are the same shares set forth for BTH in the above table.
The beneficial ownership of the Class A Common Stock of the Company by
each director and executive officer of the Jones Entities are set forth on
Schedule G attached hereto.
(b) (i) Voting Power and Disposition Power of the Common Stock:
-------------------------------------------------------
Stock:
- -----
<TABLE>
<CAPTION>
Sole Power to Shared Power to
Sole Power to Shared Power to Dispose or to Dispose or to
Vote or to Vote or to Direct the Direct the
Name of Entity Direct the Vote Direct the Vote Disposition Disposition
- -------------- --------------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
Glenn R. Jones 0 2,916,151 0 2,916,151
International 0 2,916,151 0 2,916,151
BTH 0 0 0 2,878,151
Comcast/(1)/ 0 0 0 2,878,151
</TABLE>
/(1)/Pursuant to Amendment No. 1 to Schedule 13D dated August 12, 1998 filed by
Comcast, Comcast claims shared dispositive power over such shares, which are the
same shares set forth for BTH in the above table.
10
<PAGE>
(ii) Voting Power and Disposition Power of the Class A Common Stock:
--------------------------------------------------------------
<TABLE>
<CAPTION>
Sole Power to Shared Power to Sole Power to Shared Power to
Vote or to Vote or to Dispose or to Dispose or to
Name of Direct the Direct the Direct the Direct the
Entity Vote Vote Disposition Disposition
- ------------------ ------------------ ---------------- -------------- ---------------
<S> <C> <C> <C> <C>
Glenn R. Jones 828,006 1,497,373 828,006 1,497,373
International 0 1,497,373 0 1,497,373
</TABLE>
(c) The following transactions in the Common Stock and/or Class A
Common Stock have been effected during the last 60 days as follows:
<TABLE>
<CAPTION>
Number of Shares of
Date of Class A Common
Jones Entity Purchase Stock Purchased* Price Per Share
------------ -------- ------------------- ---------------
<S> <C> <C> <C>
Glenn R. Jones 06/30/98 300,000 $12.65
</TABLE>
*Exercise of employee stock option.
Except as stated above, no transactions in the Common Stock or the
Class A Common Stock have been effected during the last 60 days by any other
person controlling the Jones Entities, or to the best of the Jones Entities'
knowledge, any of the persons named in Item 2 hereof.
(d) Not applicable.
(e) Not applicable.
11
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
--------------------------------------------------------
WITH RESPECT TO SECURITIES OF THE ISSUER
----------------------------------------
a. On December 20, 1994, the Company entered into the Shareholders
Agreement (Exhibit 1). On December 20, 1994, BTH, through its agent, Morgan
Guaranty Trust Company of New York ("MGT"), entered into Option Agreements
(Exhibit 2) with each of the following entities: (i) Glenn Jones Grantor
Business Trust ("GJ Trust"); (ii) Jones International Grantor Business Trust
("JI Trust"); (iii) JEG; (iv) JSS; (v) JGG; and (vi) Interdigital. The number
of shares of Common Stock covered by each Option Agreement is as follows:
Number of Shares of
Grantor Common Stock
------- ------------
GJ Trust 474,400
JI Trust 2,239,416
JEG 100,400
JSS 35,707
JGG 27,585
Interdigital 643
All of the other Option Agreements are substantially similar except
for the number of shares of Common Stock covered thereby, which is set forth
above.
b. On August 12, 1998, Glenn R. Jones, International, GJ Trust, JI
Trust, JSS, JGG, Interdigital and JEG (collectively, the "Jones Entities")
entered into an agreement (the "Agreement") with Comcast, pursuant to which the
Jones Entities have agreed to an acceleration of the exercise of the options to
acquire their aggregate 2,878,151 shares of Common Stock of the Company (the
"Control Shares"). The Control Shares are presently subject to Option
Agreements between certain of the Jones Entities and The Bank of New York, as
successor agent to MGT (See Exhibit 2). Also on August 12, 1998, the Option
Agreements were amended (the "Amended Option Agreements", see Exhibit 4) in
order to allow acceleration of the sale of the Control Shares, which is expected
to close in the first quarter of 1999. Such closing, which is subject to
certain conditions stated below, would occur simultaneously with the closing of
the acquisition by Comcast of BTH's approximately 30% interest in the Company,
represented by approximately 12.8 million shares of Class A Common Stock.
12
<PAGE>
The Jones Entities are informed that BTH and Comcast have amended
their agreement (whereby Comcast is to acquire BTH's equity position in the
Company), in order to provide for the simultaneous closing of Comcast's
acquisitions of shares of the Company pursuant to the BTH and Jones Entities
transactions. Comcast will pay BTH approximately $500 million in cash at
closing, and in addition, will pay certain of the Jones Entities an aggregate of
$200 million in cash to acquire the Control Shares. Comcast made a deposit of
$50 million on August 12, 1998 under the Agreement and certain of the JI
Entities pledged to Comcast 2,000,000 shares of Class A Common Stock of the
Company as security with respect to such deposit (the "Pledged Shares"). The
Pledged Shares are not part of, or subject to, the Amended Option Agreements.
The $50 million (plus interest) will be credited towards the $200 million to be
paid to certain of the Jones Entities at the closing pursuant to the Amended
Option Agreements. Upon a termination of the Agreement due to a breach of the
Agreement by Comcast, the Jones Entities can retain the $50 million deposit and
Comcast will release the Pledged Shares. Upon a termination of the Agreement
due to a breach by the Jones Entities, the Jones Entities must return the $50
million deposit plus interest. The Pledged Shares secure the Jones Entities
obligation to so return such deposit.
The closing is conditioned on the satisfaction or waiver of certain
conditions precedent, including, without limitation, (i) expiration of all
applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, (ii) receipt of certain other governmental and
franchise approvals, (iii) absence of any governmental order, injunction or
applicable law prohibiting the transactions or requiring any party to divest a
material portion of its assets as a result of the consummation of the
transactions, (iv) receipt of all material third party consents and approvals,
(v) truth and accuracy of certain representations and warranties, (vi) use of
reasonable best efforts of Comcast, BTH and the Jones Entities to do everything
necessary to consummate the contemplated transactions, (vii) absence of material
adverse change during a certain period, and (viii) compliance by each party in
all material respects with the covenants required of it pursuant to the
documents. Comcast and the Jones Entities are not required to agree to any
consent decree related to objections by the Department of Justice or the Federal
Trade Commissions to the contemplated transactions.
Upon consummation of the closing of the Agreement and Comcast's
agreement with BTH, Comcast will own a sufficient number of shares of Common
Stock and Class A Common Stock to elect a majority of the Board
13
<PAGE>
of Directors of the Company and pursuant to the terms of the related agreements,
the directors of the Company, other than the three directors jointly designated
by Jones and BTH pursuant to the Shareholders Agreement, will resign seriatim
from the board of directors of the Company and will be replaced by individuals
designated by Comcast.
Some of the covenants and agreements of Comcast under the Agreement
include entering into a carriage agreement with Knowledge TV, Inc. ("KTV") and
Great American Country, Inc. ("GAC"), which are affiliates of the Jones
Entities, acknowledging certain agreements between the Company and the Jones
Entities, and agreeing not to challenge their validity, using its reasonable
best efforts to cause the Company not to modify certain indemnification rights
of officers, directors and employees of the Company, performing its obligations
and enforcing its rights under the agreement between Comcast and BTH and not
amending such agreement without the consent of the Jones Entities, and paying a
$1.5 million fee to International for financial advisory, brokerage and
consulting services rendered to the Company.
Some of the covenants and agreements of the Jones Entities under the
Agreement include Jones and the Jones Nominees (as defined in the Shareholders
Agreement) resigning from the Company's board of directors and filling the
vacancies with individuals chosen by Comcast, offering the Company the
opportunity to enter into certain transactions following the Closing, releasing
certain claims against the BTH entities and Comcast, causing KTV and GAC to
amend certain agreements with the Company, and refraining from entering into
agreements with the Company other than those specifically authorized.
c. Also on August 12, 1998, the Shareholders Agreement was amended
(See Exhibit 5) to provide that, upon the closing of the acquisition of the
Control Shares by Comcast, certain of the provisions of the Shareholders
Agreement would terminate, principally those with respect to the programming
rights of Mr. Jones and International. As a result, Mr. Jones and International
will receive $25 million in compensation from the Company for the termination of
such rights. The amended Shareholders Agreement also contemplates that a number
of other agreements between the Company, Mr. Jones, International and BTH will
also be terminated upon the closing of the transactions. In addition, the
Company has agreed to terminate Mr. Jones' employment agreement for a payment
equal generally to the discounted value of the remaining term of such agreement
as of the closing date.
14
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
--------------------------------
Exhibit 1: Form of Shareholders Agreement dated as of December 20,
1994, between Mr. Jones, International, BTH and the Company. (1)
Exhibit 2: Option Agreement dated as of December 20, 1994, between
MGT and JI Trust. (2)
Exhibit 3: Agreement dated as of August 12, 1998, among the Jones
Entities and Comcast (to which a Pledge Agreement for 2,000,000
shares of Class A Common Stock is an exhibit and is included
herewith).
Exhibit 4: Amendment to Option Agreements dated as of August 12,
1998, between The Bank of New York, as successor agent to MGT (as
agent for BTH and Comcast) and the Jones Entities.
Exhibit 5: Agreement and Amendment No. 1 to Shareholders
Agreement dated as of August 12, 1998, amending the
Shareholders Agreement.
Exhibit 6: Termination Agreement dated as of August 12, 1998,
between the Company and Mr. Jones.
______________
(1) Incorporated by reference from the Company's Current Report on Form
8-K, electronically filed on June 6, 1994, and identified as Exhibit C to
the Stock Purchase Agreement filed as an Exhibit to such Form 8-K.
(2) Incorporated by reference from the Reporting Persons original Schedule
13D, electronically filed on December 30, 1994, and identified as Exhibit 4
to said Schedule 13D.
15
<PAGE>
SIGNATURES
----------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Date: August 14, 1998
/s/ Glenn R. Jones
________________________
Glenn R. Jones
JONES INTERNATIONAL, LTD.
By: /s/ Glenn R. Jones
_____________________
Glenn R. Jones
President
16
<PAGE>
SCHEDULE A
----------
DIRECTORS AND EXECUTIVE OFFICERS
OF
JONES INTERNATIONAL, LTD.
The name and title(s) of each of the directors and executive officers of
Jones International, Ltd. are set forth below. Unless otherwise indicated
below, the principal address, present principal occupation and citizenship of
each of the directors and executive officers are 9697 E. Mineral Avenue,
Englewood, CO 80112, cable television executive and USA, respectively.
Name Title(s)
---- --------
Glenn R. Jones Chairman of the Board, Chief
Executive Officer and
President
Steven W. Gampp Group Vice President/Finance and Chief
Financial Executive Financial Officer
Heather O'Mara Vice President and Treasurer
Elizabeth M. Steele Secretary
Keith Thompson Controller
Christine Jones Marocco Director
Homemaker
25 East End Avenue
Apartment 14F
New York, NY 10028
Robert W. Hampton Director
<PAGE>
SCHEDULE B
----------
DIRECTORS AND EXECUTIVE OFFICERS
OF
JONES ENTERTAINMENT GROUP, LTD.
The name and title(s) of each of the directors and executive officers of
Jones Entertainment Group, Ltd. are set forth below. Unless otherwise indicated
below, the principal address, present principal occupation and citizenship of
each of the directors and executive officers are 9697 E. Mineral Avenue,
Englewood, CO 80112, cable television executive and USA, respectively.
Name Title(s)
---- --------
Glenn R. Jones Chairman of the Board, Chief Executive Officer
and President
Steven W. Gampp Vice President/Finance and Treasurer
Financial Executive
Elizabeth M. Steele Secretary
Keith D. Thompson Chief Accounting Officer
Wilfred N. Cooper, Sr. Director
Investor
3158 Redhill Avenue
Suite 120
Costa Mesa, CA 92626
David K. Zonker Director
Financial Executive
J. Rodney Dyer
Graphic Design
8360 Melrose Avenue
Los Angeles, CA 90069 Director
<PAGE>
Robert Kearney Director
Retired Executive
Canada Citizenship
Robinwood 324 Lakeside
Knowlton, Quebec, Canada
JOE 1V0
<PAGE>
SCHEDULE C
----------
DIRECTORS AND EXECUTIVE OFFICERS
OF
JONES SPACE SEGMENT, INC.
The name and title(s) of each of the directors and executive officers of
Jones Space Segment, Inc. are set forth below. Unless otherwise indicated
below, the principal address, present principal occupation and citizenship of
each of the directors and executive officers are 9697 E. Mineral Avenue,
Englewood, CO 80112, cable television executive and USA, respectively.
Name Title(s)
---- --------
Glenn R. Jones President and Director
Elizabeth M. Steele Vice President and Secretary
Jay B. Lewis Treasurer
Media Company Executive
Gregory J. Liptak Director
Media Company Executive
<PAGE>
SCHEDULE D
----------
DIRECTORS AND EXECUTIVE OFFICERS
OF
JONES GLOBAL GROUP, INC.
The name and title(s) of each of the directors and executive officers of
Jones Global Group, Inc. are set forth below. Unless otherwise indicated below,
the principal address, present principal occupation and citizenship of each of
the directors and executive officers are 9697 E. Mineral Avenue, Englewood, CO
80112, cable television executive and USA, respectively.
Name Title(s)
---- --------
Glenn R. Jones Chairman of the Board, Chief Executive
Officer and President
Elizabeth M. Steele Vice President/General Counsel and Secretary
Steven W. Gampp Vice President/Finance and Treasurer
Financial Executive
Alan Bates Director
Management Consultant
Great Britain Citizenship
Barnfield, Fair Mile
Henley-on-Thames
Oxon RG9 2JY England
Robert Tynan Director
Management Consultant
10600 E. Exposition Avenue
Building B, Suite 200
Aurora, CO 80012
<PAGE>
SCHEDULE E
----------
DIRECTORS AND EXECUTIVE OFFICERS
OF
JONES INTERDIGITAL, INC.
The name and title(s) of each of the directors and executive officers of
Jones Interdigital, Inc. are set forth below. Unless otherwise indicated below,
the principal address, present principal occupation and citizenship of each of
the directors and executive officers are 9697 E. Mineral Avenue, Englewood, CO
80112, cable television executive and USA, respectively.
Name Title(s)
---- --------
Glenn R. Jones Chief Executive Officer, President
and Director
Elizabeth M. Steele Vice President and Secretary
Steven W. Gampp Treasurer
Financial Executive
Timothy J. Burke Director
Financial Executive
<PAGE>
SCHEDULE F
----------
BENEFICIAL OWNERSHIP OF THE
COMMON STOCK
Set forth below are the directors and executive officers of the Jones
Entities who beneficially own shares of Common Stock at August 12, 1998.
<TABLE>
<CAPTION>
Number of Shares
----------------
of Common Stock
Name ----------------
----
<S> <C>
Timothy J. Burke 533
Christine Jones Marocco 2,726,543(1)
</TABLE>
___________
(1) Includes 12,370 shares held by Mrs. Marocco; 357 shares held by the Joseph
Michael Marocco Irrevocable Trust; 2,239,416 shares held by the Jones
International Grantor Business Trust in which Mrs. Marocco has shared
voting power; and 474,400 shares held by the Glenn Jones Grantor Business
Trust in which Mrs. Marocco has shared voting power.
The foregoing shares are not included in the Jones Entities' ownership
because the foregoing individual has the sole power to vote and dispose of his
shares shown above.
<PAGE>
SCHEDULE G
----------
BENEFICIAL OWNERSHIP OF THE
CLASS A COMMON STOCK
Set forth below are the directors and executive officers of the Jones
Entities who beneficially own shares of Class A Common Stock at August 12, 1998.
Number of Shares
----------------
of Class A Common Stock
Name -----------------------
----
Timothy J. Burke 13,587(1)
Steven W. Gampp 500
Gregory J. Liptak 3,820(2)
Christine Jones Marocco 75,083(3)
David K. Zonker 18,720(4)
___________
(1) Includes 13,391 shares pursuant to vested stock options.
(2) Represents shares pursuant to a vested stock option.
(3) Includes 64,113 shares held by Mrs. Marocco; 970 shares held by the Joseph
Michael Marocco Irrevocable Trust; and 10,000 shares held by Mrs. Marocco's
husband. Mrs. Marocco disclaims beneficial ownership of the shares held by her
husband.
(4) Includes 18,546 shares pursuant to vested stock options.
The foregoing shares are not included in International's or Mr. Jones'
ownership because each of the foregoing individuals has the sole power to vote
and dispose of his or her respective shares shown above.
<PAGE>
EXHIBIT INDEX
-------------
No. Exhibit Page
- --- ------- ----
Exhibit 1 Form of Shareholders Agreement dated as
of December 20, 1994, between Mr. Jones,
International, BTH and the Company. (1)
Exhibit 2 Option Agreement dated as of December 20,
1994, between MGT and JI Trust. (2)
Exhibit 3 Agreement dated as of August 12, 1998,
among the Jones Entities and Comcast
(to which a Pledge Agreement for
2,000,000 shares of Class A Common
Stock is an exhibit and is included
herewith). 26
Exhibit 4 Amendment to Option Agreements dated
as of August 12, 1998, between The Bank
of New York, as successor agent to MGT
(as agent for BTH and Comcast) and the
Jones Entities. 66
Exhibit 5 Agreement and Amendment No. 1 to
Shareholders Agreement dated as of
August 12, 1998, amending the Shareholders
Agreement. 81
Exhibit 6 Termination Agreement dated as of
August 12, 1998, between the Company
and Mr. Jones. 91
____________
(1) Incorporated by reference from the Company's Current Report on Form
8-K, electronically filed on June 6, 1994, and identified as Exhibit C to
the Stock Purchase Agreement filed as an Exhibit to such Form 8-K.
(2) Incorporated by reference from the Reporting Persons original Schedule
13D, electronically filed on December 30, 1994, and identified as Exhibit 4
to said Schedule 13D.
<PAGE>
EXHIBIT 3
Execution Copy
AGREEMENT
This AGREEMENT is entered into as of August 12, 1998, by and among Comcast
Corporation, a Pennsylvania corporation ("Comcast") and Mr. Glenn R. Jones
("Jones"), Jones International, Ltd. ("International"), Glenn Jones Grantor
Business Trust (the "Jones Trust"), Jones International Grantor Business Trust
(the "JI Trust", and together with the Jones Trust, the "Trusts"), Jones Space
Segment, Inc. ("Space"), Jones Global Group, Inc. ("Global"), Jones
Interdigital, Inc. ("Interdigital"), Jones Entertainment Group, Ltd.
("Entertainment" and together with Jones, International, the Trusts, Space,
Global and Interdigital, the "Jones Entities").
WHEREAS, certain of the Jones Entities and The Bank of New York, as
successor agent to Morgan Guaranty Trust Company of New York, as agent for BCI
Telecom Holding Inc., a Canadian corporation f/k/a/ Bell Canada International
Inc. ("BTH") and BTH (Intercable) Limited, a British Virgin Islands corporation
f/k/a Bell Canada International BVI VI Limited ("BTH Intercable"), as assignee
of BTH, have entered into certain option agreements each dated as of December
20, 1994 and amended as of the date hereof (the "Option Agreements"), granting
an option (the "Control Option") to purchase the shares of Common Stock, par
value $.01 per share (the "Common Stock"), of Jones Intercable, Inc. (the
"Company") owned beneficially or of record by the Jones Entities (the "Control
Shares");
WHEREAS, the Company, Jones, International and BTH are parties to a certain
Shareholders Agreement originally dated as of December 20, 1994 providing for
certain rights and obligations regarding their relationships (the "Original
Shareholders Agreement");
WHEREAS, Comcast, BTH, BTH Intercable and BTH (US Cable) Limited, a British
Virgin Islands corporation f/k/a Bell Canada International BVI III Limited ("US
Cable" and together with BTH and BTH Intercable the "BTH Entities") have
entered into a Purchase and Sale Agreement, dated as of May 22, 1998, providing,
among other things, for the acquisition by Comcast of the Control Shares at such
time that certain of the BTH Entities (or their agents) are entitled to
acquire the Control Shares pursuant to the Control Option (the "Original
Comcast/BTH Agreement");
WHEREAS, conditioned on the terms hereof, the Jones Entities and Comcast
desire to expedite the consummation of the transactions contemplated by the
Option Agreements;
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Jones Entities and certain of the BTH Entities are amending the
Option Agreements which amendments provide for the immediate acceleration of
the exercise of the Control Option and the ultimate acquisition of the Control
Shares by Comcast;
<PAGE>
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Company, Jones, International and BTH have entered into an
agreement of even date herewith providing for the amendment of certain rights
and obligations of the parties under the Original Shareholders Agreement (the
Original Shareholders Agreement as so amended, the "Shareholders Agreement"),
and the other Jones Entities and BTH Entities have also entered into such
agreement of even date herewith to provide for the mutual release, effective as
of the Closing Date, of certain claims each of the Jones Entities, the Company
and the BTH Entities may have against each other.
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Comcast and the BTH Entities have entered into an amendment to the
Original Comcast/BTH Agreement amending, among other things, the timing of the
"Initial Closing" and "Final Closing" and providing for the "Simultaneous
Closing" (as such terms are defined in the Comcast/BTH Agreement) of the
transactions contemplated by the Comcast/BTH Agreement, which Simultaneous
Closing shall occur on the same date as the Closing (as defined below) (the
Original Comcast/BTH Agreement as so amended, the "Comcast/BTH Agreement"); and
WHEREAS, Comcast and the Jones Entities desire to set forth their agreement
regarding certain matters relating to the transactions contemplated by the
amendments to the Option Agreements, the Comcast/BTH Agreement and the
Shareholders Agreement;
THEREFORE, in consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties agree as follows.
1. CLOSING.
-------
(a) The closing of the transactions contemplated hereby (the
"Closing") shall take place on the same date as the Simultaneous Closing at
the offices of Dechert Price & Rhoads, 4000 Bell Atlantic Tower, 1717 Arch
Street, Philadelphia, PA 19103 as soon as is reasonably practicable after
the date on which the conditions specified in Sections 3 and 4 shall be
fulfilled or waived. The date on which the Closing occurs is sometimes
referred to herein as the "Closing Date". Comcast shall notify to the
extent possible the Jones Entities of the expected Closing Date no less
than three days prior to the Closing Date.
(b) At the Closing, the parties agree that the following events
shall occur in the following sequence:
(i) The directors of the Company other than the Joint
Nominees (as defined in the Shareholders Agreement) shall resign seriatim
and the remaining directors shall appoint individuals designated by Comcast
to fill the vacancies created thereby.
(ii) The purchase and sale of the Control Shares shall occur
(the "Option Closing").
-2-
<PAGE>
(iii) The Simultaneous Closing shall occur.
(c) If the Option Closing and the Simultaneous Closing under the
Comcast/BTH Agreement shall not have occurred on the Closing Date, then all
of the transactions and agreements to be effected at the Closing shall be
rescinded and deemed not to have occurred.
2. INITIAL CONSIDERATION.
---------------------
(a) In consideration for the Jones Entities entering into this
Agreement, Comcast agrees that, on the date that the Jones Entities pledge
the Pledged Shares (as defined herein) pursuant to Section 9(e) hereof, it
will deposit with International $50,000,000 in cash (the "Initial
Consideration") by wire transfer of immediately available funds to a bank
account designated by International. The parties acknowledge and agree that
the Initial Consideration, together with interest thereon, shall be a
credit against the aggregate Purchase Price (as such term is defined in the
Option Agreements) required to be paid upon the closing of the purchase and
sale of all of the Optioned Shares, as more fully described in the Option
Agreements.
(b) In the event that this Agreement is terminated for any reason
other than pursuant to Section 16(c) hereof or the Closing fails to occur
on the Closing Date for any reason other than as set forth in Section
16(c), the Jones Entities agree to pay to Comcast, upon delivery by any
Jones Entity of any notice of termination or upon demand by Comcast, an
amount equal to the Initial Consideration plus interest calculated at the
Applicable Rate from the date the Initial Consideration is deposited with
the Jones Entities to and including the date the Jones Entities repay such
Initial Consideration. "Applicable Rate" means an interest rate per annum
at which deposits in United States dollars appears on page 3750 (or any
successor page thereto) of the Dow Jones Telerate Screen for a ninety day
period, plus 1/2%. The Applicable Rate for any period shall be determined
as of the date the Initial Consideration is deposited with the Jones
Entities, and shall be adjusted quarterly on the first business day of each
January, April, July and October through the date the Jones Entities repay
the Initial Consideration (or the Initial Consideration is credited against
the Purchase Price payable in respect of the Optioned Shares pursuant to
the Option Agreements).
(c) In the event that this Agreement is validly terminated by the
Jones Entities pursuant to Section 16(c) hereof or the Closing fails to
occur on the Closing Date for the reason set forth in Section 16(c), the
parties agree that the damages suffered by the Jones Entities would be
speculative and difficult to measure and, therefore, the Jones Entities
shall be entitled to retain the Initial Consideration (together with any
interest earned thereon by the Jones Entities) as liquidated damages and a
sole remedy for Comcast's breach of its obligations under this Agreement;
provided however, that nothing contained in this clause (c) shall preclude
-------- -------
the Jones Entities from seeking specific performance of Comcast's
obligations hereunder prior to the termination of this Agreement.
-3-
<PAGE>
(d) The Jones Entities shall be entitled to retain the Initial
Consideration (together with any interest earned thereon by the Jones
Entities) upon consummation of the purchase and sale of the Optioned
Shares.
3. CONDITIONS TO THE OBLIGATIONS OF COMCAST. The obligation of
----------------------------------------
Comcast to take any action required to be taken by Comcast at or following the
Closing shall be subject to the fulfillment or waiver of each of the following
conditions:
(a) The waiting period (including any extension thereof resulting
from additional inquiries, if any) under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") applicable to the
consummation of the transactions contemplated hereby (including the
consummation of the exercise of the Control Option and the Simultaneous
Closing under the Comcast/BTH Agreement) shall have expired or been earlier
terminated.
(b) All authorizations, consents, approvals or other actions by,
in respect of or filings with any Governmental Authority in the United
States, England or Spain, or any other country where any Intercable Group
Entity conducts material business required (including the obtaining of any
approvals from Franchise Authorities) to permit the consummation of the
transactions contemplated hereby shall have been taken or obtained, as the
case may be, and shall be in full force and effect; provided that if all
authorizations, consents and approvals from applicable Franchise
Authorities necessary to effect the change of control of the Franchises (i)
relating to the Franchises (whether in Owned Systems or Managed Systems)
set forth on Schedule F, (ii) relating to Franchises in Managed Systems
which, as of the Closing Date, are subject to a letter of intent or
agreement of sale providing for the sale or other disposition of such
Managed System to a Person other than the Company (or its wholly owned
Subsidiaries), and (iii) relating to Franchises with not less than 10,000
basic subscribers in Systems (whether Owned Systems or Managed Systems)
acquired by any Intercable Group Entity (except for Managed Systems which,
as of the Closing Date, are subject to a letter of intent or agreement of
sale providing for the sale or other disposition of such Managed System to
the Company or one of its wholly owned Subsidiaries) after the date hereof
(the "Required Franchise Approvals") shall have been so obtained, be in
effect and not be subject to withdrawal or appeal then the condition
contained in this paragraph (b) shall be deemed to be fulfilled as it
relates to authorizations, consents or approvals from applicable Franchise
AUTHORITIES ON THE DATE ON WHICH ALL OF THE REQUIRED FRANCHISE APPROVALS
ARE SO OBTAINED AND ARE IN EFFECT AND NOT SUBJECT TO WITHDRAWAL OR APPEAL
AND PROVIDED FURTHER THAT THIS CONDITION SHALL NOT BE SATISFIED IF ANY
REQUIRED FRANCHISE APPROVAL SHALL NOT HAVE BEEN OBTAINED.
(c) There shall not then be in effect any applicable law, rule or
regulation or any judgment, injunction, order or decree that has one or
more of the effects described in clauses (i), (ii) or (iii) of the
following paragraph (d); provided that if after the date hereof Comcast or
any of its Affiliates enters into a new line of business and at such time
there is a law, rule or regulation that has, or is reasonably expected to
have, one or more of such effects, then this paragraph (c) will not apply
to any such law, rule or regulation.
-4-
<PAGE>
(d) There shall not then be instituted or pending any action or
proceeding before any federal or state court or other Governmental
Authority brought by a Governmental Authority challenging the consummation
of the transactions contemplated hereby or seeking to (i) prevent Comcast
from consummating the transactions contemplated hereby, including
exercising (or directing BTH Intercable (or its Affiliates and agents) to
exercise) the Control Option or prevent BTH Intercable (or its Affiliates
and agents) from exercising the Control Option, (ii) require Comcast to
divest, or otherwise limit Comcast's ability to exercise full rights of
ownership over the Control Option or the Optioned Shares or any shares of
capital stock of the Company owned by Comcast, BTH, BTH Intercable or their
respective Affiliates, or (iii) require, after the exercise of the Control
Option, Comcast or the Intercable Group to divest any material business or
assets or which would impose a material limitation on the conduct of
Comcast's or the Intercable Group's business; provided that if after the
date hereof Comcast or any of its Affiliates enters into a new line of
business and at such time there is a law, rule or regulation that has, or
is reasonably expected to have, one or more of the foregoing effects, then
this paragraph (d) will not apply to actions or proceedings that seek to
enforce such law, rule or regulation.
(e) The Intercable Group Entities shall have received all
material third party consents required to be obtained in connection with
the Closing (including all consents required under any loan or security
agreement, indenture or other agreement in respect of borrowed funds to
which any Intercable Group Entity is a party and waivers of all purchase
rights or rights of first offer or rights of first refusal triggered by the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby held by any Franchise Authority, or other
third party in respect of any Franchise of the Intercable Group Entities
but excluding consents from Franchise Authorities necessary to effect the
change of control of the Franchises held by Intercable Group Entities), in
each case in form and substance reasonably satisfactory to Comcast.
(f) Each of the covenants and agreements to be performed by the
Jones Entities under this Agreement at or prior to the Closing shall have
been duly performed in all material respects.
(g) Each of the representations and warranties of the Jones
Entities contained in this Agreement shall, in the case of those
representations and warranties that are not qualified by materiality, be
true, complete and correct in all material respects, and in the case of
those representations and warranties that are qualified by materiality
shall be true, complete and correct in all respects, as of each of (i) the
date of this Agreement and (ii) unless otherwise specified as having been
made as of a specific date, the Closing Date, in each case as though newly
made at such time.
(h) Within forty-five (45) days of the date hereof, the Company
shall have amended the Severance Plan adopted by the Board of Directors on
August 11, 1998, so that such Severance Plan conforms to the requirements
of Schedule B.
-5-
<PAGE>
(i) The Simultaneous Closing shall have occurred on the Closing
Date.
4. CONDITIONS TO THE OBLIGATIONS OF THE JONES ENTITIES. The
---------------------------------------------------
obligations of the Jones Entities to take any action required by them at or
following the Closing shall be subject to the fulfillment or waiver of each of
the following conditions:
(a) The waiting period (including any extension thereof resulting
from additional inquiries, if any) under the HSR Act applicable to the
consummation of the transactions contemplated hereby (including the
consummation of the exercise of the Control Option and the Simultaneous
Closing under the Comcast/BTH Agreement) shall have expired or been earlier
terminated.
(b) There shall not then be in effect any applicable law, rule or
regulation or any judgment, injunction, order or decree that would prevent
the Jones Entities from consummating the transactions contemplated hereby.
(c) Each of the covenants and agreements to be performed by
Comcast hereunder at or prior to the Closing shall have been duly performed
in all material respects.
(d) Each of the representations and warranties of Comcast
contained in this Agreement shall, in the case of those representations and
warranties that are not qualified by materiality, be true, complete and
correct in all material respects, and in the case of those representations
and warranties that are qualified by materiality shall be true, complete
and correct in all respects, as of each of (i) the date of this Agreement
and (ii) unless otherwise specified as having been made as of a specific
date, the Closing Date, in each case as though newly made at such time.
(e) The Simultaneous Closing shall have occurred on the Closing
Date.
5. REPRESENTATIONS AND WARRANTIES OF THE JONES ENTITIES. Each
----------------------------------------------------
Jones Entity jointly and severally represents and warrants to Comcast that, as
of the date hereof and the Closing Date (except for the representations
contained in Section 5(d) and clause (ii) of Section 5(e) which representation
is made only as of the date hereof):
(a) Such Jones Entity is the sole record and beneficial owner of
the Optioned Shares and the shares of Class A Stock, par value $.01 per
share of the Company (the "Class A Shares") set forth opposite its name on
Schedule A free and clear of any mortgage, lien, pledge, charge, security
interest, encumbrance or other adverse claim of any kind ("Liens") (other
than the Option Agreements and the Shareholders Agreement) and any other
limitation or restriction (including any limitation or restriction on the
right to vote, sell or otherwise dispose of or transfer any Optioned Share
or Class A Share), other than offer and sale restrictions imposed
-6-
<PAGE>
by securities laws and the Shareholders Agreement. At the Closing, each
Jones Entity will convey good and valid title to the Optioned Shares set
forth opposite its name on Schedule A free and clear of any Lien and any
such limitation or restriction (other than offer and sale restrictions
imposed by securities laws).
(b) Such Jones Entity has been duly organized, and is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted.
(c) The execution, delivery and performance by each Jones Entity
of this Agreement are within such Jones Entity's power and have been duly
authorized by all necessary action on the part of such Jones Entity. This
Agreement has been duly executed and delivered by each Jones Entity, and
assuming the accuracy of Comcast's representations and warranties contained
herein, is a valid and binding agreement of such Jones Entity.
(d) Assuming the accuracy of Comcast's representations and
warranties contained herein, the execution, delivery and performance by
each Jones Entity of this Agreement requires no action by any Jones Entity
or any Intercable Group Entity in respect of, or filing by any Jones Entity
or any Intercable Group Entity with, any Governmental Authority other than
(i) compliance with any applicable requirements of the HSR Act and (ii)
actions or filings with Franchise Authorities and the Federal
Communications Commission and (iii) any such action or filing as to which
the failure to make or obtain would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the
business, assets, results of operations, properties or condition (financial
or otherwise) of any Intercable Group Entities taken as a whole or the
ability of such Jones Entity to consummate the transactions contemplated
hereby or perform its obligations hereunder.
(e) The execution, delivery and performance by each Jones Entity
of this Agreement do not: (i) violate its articles of incorporation or
trust, bylaws or similar organizational documents, (ii) assuming the
accuracy of Comcast's representations and warranties herein violate any
applicable law, rule, regulation, judgment, injunction, order or decree
binding on such Jones Entity or any Intercable Group Entity, (iii) assuming
the accuracy of Comcast's representations and warranties herein, require
any consent or other action by any Person under, or constitute a default
under, any material agreement or other instrument binding upon such Jones
Entity or any Intercable Group Entity, (iv) result in the creation or
imposition of any Lien on any material asset of such Jones Entity or any
Intercable Group Entity, or (v) require any consent or other action by any
Person under, or constitute a default under, (x) any agreement or other
instrument binding upon any Intercable Group Entity providing for the sale
of a Managed System to a Person other than the Company or its wholly owned
Subsidiaries or (y) any Partnership Agreement or similar organizational
document of any Cable Partnership, except in the case of clauses (ii),
(iii) and (iv), to the that any such violation, failure to obtain any such
consent or other action, default, right, loss or Lien would not reasonably
be
-7-
<PAGE>
expected to have, individually or in the aggregate, a material adverse
effect on the business, assets, results of operations, properties or
financial condition of such Intercable Group Entities taken as a whole or
the ability of such Jones Entity to consummate the transactions
contemplated hereby or perform its obligations hereunder and except in the
case of clauses (ii) and (iii), actions and consents required under the HSR
Act and the Communications Act of 1934, as amended, and in respect of
Franchises, loan and lease agreements and other agreements and instruments
customarily entered into by cable operators in the ordinary course of
business, including agreements with utilities, programming agreements and
retransmission consent agreements.
(f) There is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf
of any Jones Entity or its Affiliates who might be entitled to any fee or
commission from Comcast or any Intercable Group Entity in connection with
the transactions contemplated by this Agreement.
(g) Options to purchase no more than 1,353,083 shares of Class A
Common Stock of the Company are outstanding and there are no options
outstanding to purchase any shares of Common Stock of the Company. The
Company has not granted any options to purchase either Class A Common Stock
or Common Stock since July 28, 1997.
6. REPRESENTATIONS AND WARRANTIES OF COMCAST. Comcast represents
-----------------------------------------
and warrants to the Jones Entities that, as of the date hereof and the Closing
Date (except for the representation contained in Section 6(c) and clause (ii) of
Section 6(d) which representation is made only as of the date hereof):
(a) Comcast has been duly organized, and is validly existing and
in good standing under the laws of the jurisdiction of its incorporation
and has all powers and all material governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted.
(b) The execution, delivery and performance by Comcast of this
Agreement are within Comcast's power and have been duly authorized by all
necessary action on the part of Comcast. This Agreement has been duly
executed and delivered by Comcast, and assuming the accuracy of the
representations and warranties of the Jones Entities contained herein, is a
valid and binding agreement of Comcast.
(c) Assuming the accuracy of the Jones Entities' representations
and warranties contained herein, the execution, delivery and performance by
Comcast of this Agreement requires no action by Comcast in respect of, or
filing by Comcast with, any Governmental Authority other than (i)
compliance with any applicable requirements of the HSR Act, (ii) filings
with respect to franchises of the intercable group entities and (iii) any
such action or filing as to which the failure to make or obtain would not
reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the ability of comcast to consummate the
transactions contemplated hereby or perform its obligations hereunder.
-8-
<PAGE>
(d) The execution, delivery and performance by Comcast of this
Agreement does not: (i) violate its articles of incorporation or bylaws,
(ii) assuming the accuracy of the representations and warranties of the
Jones Entities contained herein, violate any applicable law, rule,
regulation, judgment, injunction, order or decree binding on Comcast, (iii)
assuming the accuracy of the representations and warranties of the Jones
Entities contained herein, and assuming that the Intercable Group Entities
have all powers, licenses, authorizations, permits, consents and approvals
required to carry on their businesses as now conducted, require any consent
or other action by any Person under, or constitute a default under, any
material agreement or other instrument binding upon Comcast, or (iv) result
in the creation or imposition of any Lien on any material asset of Comcast,
except in the case of clauses (ii), (iii) and (iv), to the extent that any
such violation, failure to obtain any such consent or other action,
default, right, loss or Lien would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the ability
of Comcast to consummate the transactions contemplated hereby or perform
its obligations hereunder.
(e) There is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf
of Comcast or its Affiliates who might be entitled to any fee or commission
from any Jones Entity or any Intercable Group Entity in connection with the
transactions contemplated by this Agreement.
7. REASONABLE BEST EFFORTS; FURTHER ASSURANCES. Comcast and the
-------------------------------------------
Jones Entities will each execute and deliver or cause to be executed and
delivered all further documents and instruments and use their reasonable best
efforts to secure such consents and take, or cause to be taken, all such further
action and to do, or cause to be done, all things as may be reasonably necessary
in order to consummate the transactions contemplated hereby or to enable Comcast
to enjoy all of the benefits and rights incident to the ownership of the Control
Shares. Comcast and the Jones Entities shall each use their reasonable best
efforts to, and the Jones Entities shall use their reasonable best efforts to
cause the Intercable Group Entities to, cooperate with one another (a) in
determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from any third party, in connection with the
consummation of the transactions contemplated by this Agreement and (b) in
taking such actions or making any such filings, furnishing information required
in connection therewith and seeking timely to obtain any such actions, consents,
approvals or waivers, including making such filings on FCC Form 394 ("394
Filings") as may be necessary to obtain the required authorizations, consents
and approvals from the applicable Franchise Authorities relating to the
Franchises held by the Intercable Group Entities; provided that no such 394
Filings shall be required to be filed prior to November 1, 1998 with respect to
Franchises relating to Managed Systems, which, on the date hereof, are and
thereafter remain subject to a letter of intent or agreement of sale providing
for the sale or other disposition of such Managed System to a Person other than
the Company (or its wholly-owned Subsidiaries). In connection with the
foregoing, Comcast may also seek that any such actions, consents, approvals or
waivers include the immediate transfer on the Closing Date of the Control Shares
by Comcast
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<PAGE>
to Comcast Cable Communications, Inc., a wholly-owned subsidiary of
Comcast and the parent company of Comcast's cable division. Comcast and the
Jones Entities shall use their reasonable best efforts to, and the Jones
Entities shall use their reasonable best efforts to cause the Intercable Group
Entities to, each make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act no later than ten business days from the date hereof;
and each such filing shall request early termination of the waiting period
imposed by the HSR Act. Comcast and the Jones Entities shall not be required to
agree to any consent decree or order in connection with any objections of the
Department of Justice or the Federal Trade Commission to the transactions
contemplated by this Agreement.
8. COVENANTS AND AGREEMENTS OF COMCAST.
-----------------------------------
(a) (i) On the Closing Date, Comcast agrees to enter into, or
cause one or more of its appropriate Affiliates to enter into an agreement
with Knowledge TV, Inc. ("KTV") in the form of Exhibit D attached hereto.
(ii) On the Closing Date, Comcast agrees to enter into, or
cause one or more of its appropriate Affiliates to enter into (x) an amendment
to that certain Affiliate Agreement dated December 10, 1997, between Comcast and
Great American Country, Inc. ("GAC"), which amendment shall be in the form of
Exhibit A attached hereto, and shall provide for the elimination of the current
incremental service subscriber launch commitment and (y) an agreement with GAC
in the form of Exhibit E attached hereto.
(b) Comcast acknowledges effective as of and conditioned upon the
consummation of the Closing, the Option Closing and the Simultaneous
Closing the existence of (i) that certain lease (the "Lease"), dated
November 30, 1989, by and between the Company and Jones Properties, Inc.
(the "Landlord"), together with that certain Sublease, dated December 1,
1994 between the Company and Jones International, Ltd., (ii) that certain
Services Agreement, dated June 9, 1994, by and between the Company and
Jones Interactive, Inc., (iii) that certain Amended and Restated Jones
Infomercial Networks, Inc. Affiliate Agreement, dated as of August 1, 1994,
by and between Jones Infomercial Networks, Inc. and the Company, (iv) that
certain Galactic Radio Affiliate Agreement, dated as of May 1, 1990, by and
between Galactic Radio, Inc. and Jones Programming Services, Inc., (v) the
KTV and GAC Agreements (as defined herein), and (vi) the transactions,
agreements and/or arrangements as described in the Company's Form 10-K for
the year ended December 31, 1997 (the "1997 Form 10-K") (the matters listed
in clauses (i) through (vi), the "Existing Related Party Agreements") and
that such Existing Related Party Agreements are binding obligations of the
Company except as enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent transfer or similar laws
affecting the enforcement of creditor's rights generally and by the effect
of general principles of equity (regardless of whether asserted in a
proceeding at law or in equity). Comcast agrees effective as of and
conditioned upon the consummation of the Closing, the Option Closing and
the Simultaneous Closing that it shall not assert directly or
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<PAGE>
indirectly in any claim, suit or action or otherwise, the invalidity or
unenforceability, in whole or in part, of any Existing Related Party
Agreement.
(c) Comcast, on behalf of itself and its Affiliates, effective as
of and conditioned upon the consummation of the Closing, the Option Closing
and the Simultaneous Closing, (i) waives and releases the Jones Entities,
their Affiliates and their Affiliates' employees, officers, directors,
shareholders and their predecessors, successors and assigns from any
obligations, actions, causes of action, demands, damages, costs, expenses
and liabilities whatsoever at law or in equity known or unknown, fixed or
contingent ("Claims") which Comcast and its Affiliates ever had, now has or
which their successors or assigns can, shall or may have against them and
(ii) agrees not to cause any Intercable Group Entity to assert any Claims
against them, in the case of both (i) and (ii) arising from (x) the
adoption of the proposed resolutions set forth on Schedules B or C, (y) any
transaction or agreement between any Jones Entity or an Affiliate thereof
and any Intercable Group Entity consummated or terminated prior to and no
longer in effect as of the date hereof and (z) arising from the Existing
Related Party Agreements. In the event this Agreement is terminated the
execution and delivery of this Agreement including this Section 8(c) shall
not be deemed a waiver by Comcast of each Claim which it may have against
any of the Jones Entities.
(d) Comcast agrees that, for six years after the Closing, it
shall use its reasonable best efforts to cause the Company not to amend,
repeal or otherwise modify any rights to indemnification by the Company
which exist as of the Closing Date in favor of each present and former
director, officer, employee or agent of the Company under the Company's
articles of incorporation or bylaws, in each case as in effect on the date
of this Agreement, in any manner that would adversely affect the rights of
individuals who, at any time prior to the Closing, were directors, officers
or employees of the Company to receive indemnification under the Company's
articles of incorporation and bylaws for actions occurring prior to the
Closing. Comcast shall use its reasonable best efforts to cause the Company
to maintain in effect for six years from the Closing Date, if available,
the current directors' and officers' liability insurance policies
maintained by the Company covering those persons and positions who are
currently covered by such policies (provided that the Company may
substitute therefor policies of at least the same coverage containing terms
and conditions which are not less favorable) with respect to matters
occurring prior to the Closing Date; provided, however, that in no event
shall Comcast be required to use its reasonable best efforts to cause the
Company to expend pursuant to this paragraph (e) more than an amount per
year equal to one hundred fifty percent (150%) of current annual premiums
paid by the Company for such insurance. In the event that, but for the
proviso to the immediately preceding sentence, the Company would be
required to expend more than one hundred fifty percent (150%) of current
annual premiums, Comcast shall use its reasonable best efforts to cause the
Company to obtain the maximum amount of such insurance obtainable by
payment of annual premiums equal to one hundred fifty percent (150%) of
current annual premiums.
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<PAGE>
(e) Comcast agrees that (i) it shall perform its obligations
under the Comcast/BTH Agreement; (ii) it shall not, without the written
consent of the Jones Entities, amend the Comcast/BTH Agreement to add any
additional conditions to the obligations of the parties to the Comcast/BTH
Agreement to consummate the Simultaneous Closing or otherwise adversely
affect in a material way the right or ability of any party thereto to
consummate the Closing or the Simultaneous Closing; and (iii) it shall
enforce vigorously any rights it may have against the BTH Entities in
respect of any breach by them of their obligations under the Comcast/BTH
Agreement, including seeking specific performance by the BTH Entities of
their obligations thereunder.
(f) Comcast agrees that it shall pay to International, at the
Closing, a fee of $1,500,000 on account of financial advisory, brokerage
and consulting services performed by International for the Company.
9. COVENANTS AND AGREEMENTS OF THE JONES ENTITIES.
-----------------------------------------------
(a) At the Closing (but in any event prior to the closing of the
purchase and sale of the Optioned Shares, Jones agrees to resign as a
director, and Jones and International agree to cause each of the other
Jones Nominees (as such term is defined in the Shareholders Agreement) to
resign, seriatim from the Company's board of directors and to designate as
Jones Nominees such persons as may be selected by Comcast and the Jones
Entities agree to vote in favor of and Jones and International agree to
cause the other Jones Nominees, subject to their fiduciary duties as
provided in Section 2.4(b) of the Shareholders Agreement, to vote in favor
of electing such individuals designated by Comcast to fill the vacancies
created by such resignations and by the resignations of the Investor
Nominees (as such term is defined in the Shareholders Agreement) pursuant
to the Comcast/BTH Agreement. The Jones Entities agree to follow Comcast's
direction with respect to the sequence of such resignations and the filling
of such vacancies.
(b) The Jones Entities agree that to the extent the Company does
not adopt any of the proposed resolutions set forth on Schedule C hereto
prior to the Closing, then following the Closing, the Jones Entities may
offer the Company the opportunity to enter into (and Comcast agrees to use
its reasonable best efforts after the Closing to cause the Company to
consider promptly and in any event within 30 days after receipt of such
offer) the same transactions with the Jones Entities as are authorized by
such proposed resolution; provided that the Jones Entities shall, following
the Closing, offer such opportunity to the Company with respect to those
resolutions so indicated on Schedule C. The Jones Entities agree that any
such offer shall remain open for at least 30 days following the Closing.
(c) Each of the Jones Entities on behalf of itself and each of
its Affiliates (the "Releasing Parties"), effective as of and conditioned
upon the consummation of the Closing, the Option Closing and the
Simultaneous Closing, releases and forever holds harmless, and waives and
relinquishes from and against all obligations, actions, causes of action,
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claims, demands, damages, costs, expenses and liabilities whatsoever, at
law or in equity, known and unknown, fixed or contingent which the
Releasing Parties ever had, now have or which their predecessors,
successors, assigns, heirs, executors and administrators hereafter can,
shall or may have against (i) each of the BTH Entities and (ii) Comcast
and, in the case of both (i) and (ii), their Affiliates, and their (and
their Affiliates') officers, directors, employees, shareholders and their
predecessors, successors or assigns on account of or arising out of (A) any
matter, cause or thing whatsoever relating to the execution and delivery of
the Comcast/BTH Agreement and the consummation of the transactions
contemplated thereby; and (B) the BTH Entities having provided to Comcast
any information received by them or the Investor Nominees. In the event
that this Agreement is terminated the execution and delivery of this
Agreement including this Section 9(c) shall not be deemed to be a waiver by
the Jones Entities of any claim they may have against Comcast arising out
of or related to the execution, delivery or performance of the Comcast/BTH
Agreement.
(d) In consideration of Comcast's execution and delivery of this
Agreement and the Comcast/BTH Agreement, the Jones Entities agree to take
any and all actions and refrain from taking any and all actions and to use
their reasonable best efforts to cause the Company to take any and all
actions and refrain from taking any and all actions necessary or advisable
to seek a stay any proceedings relating to that certain lawsuit brought by
BTH against Jones Intercable, Inc., Jones International, Ltd., Jones
Internet Channel, Inc. and Glenn R. Jones, which was brought before the
U.S. District Court for the District of Colorado (the "Litigation"),
including, without limitation, any hearings or proceedings relating to any
damage claims relating to the subject matter of the Litigation and the
appeal of the order entered on May 5, 1998 until the first to occur of (i)
the date on which both the Closing and the Simultaneous Closing shall have
occurred or (ii) the termination of this Agreement as provided in Section
16 hereof and, effective as of the Closing Date, to release any and all
claims which they may have against the BTH Entities and their Affiliates in
respect of the Litigation on the terms and conditions set forth in the
Agreement and Amendment No. 1 to Shareholders Agreement of even date
herewith.
(e) The Jones Entities agree, as a condition to Comcast's
obligation to deliver the Initial Consideration, to pledge 2,000,000 Class
A Shares owned by the Jones Entities as of the date hereof (the "Pledged
Shares") to Comcast to secure the repayment of the Initial Consideration
pursuant to Section 2(b). The Jones Entities shall pledge the Pledged
Shares by delivering them to Comcast and executing and delivering to
Comcast a pledge agreement containing the same terms as are contained in
the pledge agreement in the form attached as Exhibit C (the "Pledge
Agreement"). Comcast agrees to terminate its security interest in and
release the Pledged Shares to the Jones Entities upon the earliest to occur
of (i) the Closing, (ii) the valid termination of this Agreement pursuant
to Section 16(c) hereof or (iii) repayment to Comcast of the Initial
Consideration plus interest as provided in Section 2(b). In the event that
the Jones Entities breach their obligations to repay the Initial
Consideration plus interest as provided in Section 2(b), Comcast shall be
entitled to exercise its rights under the Pledge Agreement; provided that
Comcast shall remain entitled to all other remedies available to it at
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<PAGE>
law or in equity in respect of such breach and the exercise by Comcast of
its rights under the Pledge Agreement shall not relieve the Jones Entities
of any liability they may have in respect of any breach of this Agreement.
(f) The Jones Entities agree that they shall cause GAC to enter
into an amendment, effective as of and conditioned upon the consummation of
the Closing, the Option Closing and the Simultaneous Closing, to the GAC
Programming Agreement substantially in the form of Exhibit A hereto.
(g) The Jones Entities agree that they shall cause KTV, formerly
known as Mind Extension University, Inc. and GAC to amend, effective as of
and conditioned upon the consummation of the Closing, the Option Closing
and the Simultaneous Closing, those certain Affiliate Agreements with the
Company, dated December 28, 1993, and January 1, 1996, with KTV and GAC,
respectively (the "KTV/GAC Agreements") to provide that the term of such
KTV/GAC Agreements shall expire no later than June 9, 2009.
(h) Effective as of and conditioned upon the consummation of the
Closing, the Option Closing and the Simultaneous Closing, the Jones
Entities and Landlord each agree that any extension of the Lease beyond its
stated term is required to be approved by the Company.
(i) The Jones Entities agree that they waive, effective as of and
conditioned upon the Closing, the Option Closing and the Simultaneous
Closing and conditioned further upon an amount equal to $50,000,000 of the
Purchase Price (as defined in the Comcast/BTH Agreement) being allocated to
the Affiliate Stock in the amounts previously disclosed to the Jones
Entities, any rights they may have under the Education and Entertainment
Shareholders Agreements (including Section 4.5 thereof) with respect to the
sale of the Affiliate Stock (as such term is defined in the Comcast/BTH
Agreement) to Comcast at the Simultaneous Closing pursuant to the
Comcast/BTH Agreement. In addition, the Jones Entities consent to the
assignment, effective as of and conditioned upon the consummation of the
Closing, the Option Closing and the Simultaneous Closing, of all of the
rights and obligations of BTH under the Education and Entertainment
Shareholders Agreements and the related Registration Rights Agreements.
"Education and Entertainment Shareholders Agreements" means that certain
Shareholders Agreement dated as of December 20, 1994 among Jones,
International, Bell Canada International Inc. and Jones Entertainment
Group, Ltd. and that certain Shareholders Agreement dated as of December
20, 1994 among Jones, International, Bell Canada International Inc. and
Jones Education Networks, Inc.
(j) The Jones Entities agree that prior to the Closing without
the prior written consent of Comcast they and their Affiliates shall not
enter into any contract, agreement, understanding or transaction (including
the amendment, modification or renewal of any existing contract, agreement,
arrangement or understanding) with any Intercable Group Entity other than
those transactions specifically authorized by the resolutions listed on
Schedule B.
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<PAGE>
(k) The Jones Entities agree that (i) they shall perform their
obligations under the Option Agreements and the Shareholders Agreement
(including the Agreement and Amendment No.1 to Shareholders Agreement of
even date herewith); (ii) they shall not, without the written consent of
Comcast, amend any of their rights under the Shareholders Agreement
(including the Agreement and Amendment No. 1 to Shareholders Agreement of
even date herewith); and (iii) they shall enforce vigorously any rights
they may have against the BTH Entities in respect of any breach by them of
their obligations under the Shareholder's Agreement (including the
Agreement and Amendment No. 1 to Shareholders Agreement), including seeking
specific performance by the BTH Entities of their obligations thereunder.
10. ADDITIONAL COVENANTS OF THE JONES ENTITIES WITH RESPECT TO THE
---------------------------------------------------------------
COMPANY.
-------
(a) The Jones Entities agree that they shall use their reasonable
best efforts to cause the Company not to take or agree to take, and not to
permit any Subsidiary of the Company to take or agree to take, directly or
indirectly, any of the following actions prior to the Closing without the
prior written consent of Comcast or except pursuant to the procedures
described in paragraph (b) below:
(i) authorize, sell, distribute or otherwise issue, or grant
rights with respect to, any shares of capital stock or securities
convertible into or exchangeable for shares of capital stock of the Company
or its Subsidiaries (or any stock appreciation or similar interests or
rights with respect to such securities) except for (A) any issuances of
capital stock pursuant to the terms of stock options issued and outstanding
as of the date hereof, (B) authorizations, sales, distributions or other
issuances of capital stock of a Subsidiary of the Company to Persons that
are wholly-owned Intercable Group Entities (except in connection with sales
of capital stock of a Subsidiary of the Company permitted by subparagraphs
(v) and (vi) of Section 2.6(a) of the Shareholders Agreement and Section
10(a)(ii) of this Agreement), and (C) Permitted Equity Issuances as such
term is defined in the Shareholders Agreement.
(ii) any action described in Section 2.6(a)(ii) through
(vii), inclusive, and Section 2.6(a)(ix) and (xi) of the Shareholders
Agreement.
(iii) enter into any contract, agreement, arrangement,
understanding or transaction (including the amendment, modification or renewal
of any existing contract, agreement, arrangement or understanding) with any
Jones Entity or BTH Entity or any Affiliate of any Jones Entity or BTH Entity
other than those transactions specifically identified by the resolutions listed
on Schedule B. For purposes of this clause (iii) only no Intercable Group Entity
shall be deemed an Affiliate of any Jones Entity or any BTH Entity.
(iv) any action that would reasonably be expected to, as a
result of a law, rule or regulation of a Governmental Authority organized
within the United States of
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<PAGE>
America, England or any other jurisdiction where the Intercable Group
conducts a material portion of its business, (A) prevent Comcast, BTH or
their Affiliates from consummating the transactions contemplated hereby or
from otherwise obtaining control of the Company, (B) require Comcast, BTH
or their Affiliates to divest or otherwise limit Comcast's ability to
exercise full rights of ownership over the Control Option or any shares of
capital stock of the Company (whether acquired upon exercise of the Control
Option or otherwise) or (C) require, after the exercise of the Control
Option, Comcast, BTH or their Affiliates or the Intercable Group to divest
any material business or assets or impose a material limitation on the
conduct of Comcast's or the Intercable Group's business; provided that (1)
if on the date hereof the activities conducted by Comcast or BTH are
subject to any such law, rule or regulation (based on interpretations in
effect on the date hereof) that has, or would reasonably be expected to
have, one or more of the effects described in clauses (A), (B) or (C), or
if after the date hereof Comcast or BTH enters into a new line of business
and at such time there is a law, rule or regulation that has, or would
reasonably be expected to have, one or more of the effects described in
clauses (A), (B) or (C), then in each case this subparagraph (iv) will not
apply to actions of the Intercable Group that would reasonably be expected
to have such effects under such law, rule or regulation, (2) the Jones
Entities shall not be in breach of this clause (iv) in matters relating to
Franchise agreements and material contracts if the Company is in compliance
with its obligations under Section 5.2 of the Shareholders Agreement
concerning such matters and if the Company is in compliance with the
obligations it would have under Section 5.2 of the Shareholders Agreement
if Comcast were "Investor" as such term is used in the Shareholders
Agreement, and (3) in the case of clauses (A) and (B) the effect of any
such action must be due to the business or assets of Comcast or BTH (and
not an agent thereof).
(v) declare or make any provision for payment of, or the
setting aside of assets with respect to, any dividend or other distribution
of any property by the Company with respect to any shares of capital stock
of the Company.
(b) If the Company wishes to take an action described in
paragraph (a) of this Section 10, the Jones Entities shall cause the
Company to deliver to Comcast a written notice describing in reasonable
detail the action proposed to be taken and expressly requesting Comcast's
consent to such action pursuant to this Section 10. Such notice shall be
accompanied by such additional information as is reasonably required to
enable Comcast to evaluate such proposed action. Upon receipt of such
notice and of any additional information as may be reasonably requested by
Comcast, Comcast will have ten Business Days to exercise its right not to
consent to such proposed action. If no response is received by the Jones
Entities from Comcast prior to the expiration of such time period, the
proposed action will be deemed to have been approved by Comcast. The Jones
Entities shall not be in breach of this Section 10 if such action is taken
in compliance with the procedure set forth in this paragraph.
11. PRESERVATION OF BUSINESS. Between the date hereof and the
------------------------
earlier of the Closing Date and the date this Agreement is terminated, the Jones
Entities will use their reasonable best efforts to preserve, and to cause the
Company to preserve, the business
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<PAGE>
organization of the Company intact and to preserve the goodwill of the
Company's (and its Subsidiaries') suppliers, clients and others having
business relationships with the Company (or its Subsidiaries) and to
operate their respective businesses in the ordinary course, consistent with
past practices.
12. ACCESS.
------
(a) Immediately upon execution of this Agreement, the Jones
Entities shall use their best efforts to cause the Company to provide
Comcast and its representatives complete access to the books, records,
agreements, employees, accountants and the offices of the Company and its
Subsidiaries for the purposes of making such investigation of the business
of the Company and its Subsidiaries as Comcast shall deem necessary;
provided, however, that such investigation shall not unreasonably interfere
with the operations of the Company. Between the date hereof and the
termination of this Agreement, Jones agrees to provide to Comcast copies of
all information delivered to BTH or any Investor Nominee in accordance with
the Shareholders Agreement. In addition, the parties agree that the BTH
Entities shall be permitted to provide to Comcast all information regarding
the Company received by them or any Investor Nominee after the date hereof;
provided that any such information provided to Comcast shall be subject to
paragraph (b) below.
(b) From the date hereof to the earlier of the Closing Date or
the date which is one year after the termination of this Agreement, Comcast
and its officers, directors, employees, representatives and Affiliates will
use reasonable care to avoid disclosure to third parties of proprietary
information (whether received by Comcast from the Company, the Jones
Entities or the BTH Entities) relating to the Company, except as
specifically (and only to the extent) required to be disclosed by
applicable law or administrative or legal process. For purposes of
Comcast's obligations under this Section 12, reasonable care means the same
degree of care that Comcast exercises with respect to similar types of its
own proprietary information. It is understood and agreed that: (i) Comcast
will (to the extent reasonably possible) notify the Jones Entities in
writing prior to any proposed disclosure of such nonpublic information in
response to the requirements of applicable law or administrative or legal
process in order to enable the Jones Entities to seek an appropriate
protective order; (ii) Comcast may disclose any information which (x) is or
becomes publicly available other than as a result of a disclosure of
Comcast in breach of this Agreement, (y) was known to the party receiving
such information prior to the receipt thereof other than as a result of a
disclosure by Comcast in breach of this Agreement, or (z) was previously
independently developed by the party receiving such information without the
assistance of Comcast. In the event that the transactions contemplated
hereby do not take place, all original documents shall be returned by
Comcast if requested by the providing party within thirty (30) days of the
termination of this Agreement; otherwise, Comcast shall dispose of any such
original documents in the normal course of Comcast's business.
13. COSTS AND EXPENSES. Whether or not the transactions
------------------
contemplated hereby are consummated, each party shall bear its own costs and
expenses. The Jones Entities
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agree to indemnify, defend and hold harmless Comcast and its Affiliates
and each of their respective directors, officers, employees, agents,
contractors, successors and assigns from any claims by or liabilities to any
third party with whom the Jones Entities or their agents had discussions
regarding the disposition of their interests in the Company arising from the
consummation of the transactions contemplated hereby.
14. PUBLICITY. The parties agree to keep the transactions
---------
contemplated hereby confidential until mutual agreement is reached in writing
regarding publicity or until otherwise required by law (and as to the latter the
parties will make reasonable efforts to consult with each other).
15. STANDSTILL. From the date of the execution of this Agreement
----------
until the Closing or termination of this Agreement, the Jones Entities, on
behalf of themselves and each of their Affiliates, agents, officers,
consultants, and representatives, agree not to solicit, encourage or negotiate
with any other party relating to or enter into any contract, agreement,
understanding or arrangement with respect to the sale of the Common Stock of the
Company owned beneficially or of record by the Jones Entities or a transaction
involving the merger, consolidation or sale of the Company or substantially all
of the Company's assets.
16. TERMINATION. This Agreement may be terminated as follows:
-----------
(a) by mutual written consent of Comcast and the Jones Entities; (b) by Comcast
upon written notice to the other parties hereto of such termination if (x) the
Jones Entities have materially breached any of their obligations contained
herein and the Jones Entities have failed to cure such breach within fifteen
(15) calendar days of receipt of written notice of such breach from Comcast, (y)
all of the conditions to closing set forth in Sections 3 and 4 hereof shall have
been fulfilled or waived at the time of such termination except for the
condition which has not been fulfilled or waived because of the Jones Entities'
breach of this Agreement and (z) Comcast shall not be in material breach of its
obligations contained herein or in the BTH/Comcast Agreement; (c) by the Jones
Entities upon written notice to Comcast of such termination if (x) Comcast has
materially breached any of its obligations contained herein and Comcast has
failed to cure such breach within fifteen (15) calendar days of receipt of
written notice of such breach from the Jones Entities, (y) all of the conditions
to closing set forth in Sections 3 and 4 hereof shall have been fulfilled or
waived at the time of such termination except for the condition which has not
been fulfilled or waived because of Comcast's breach of this Agreement and (z)
the Jones Entities shall not be in material breach of their obligations
contained herein or in the Agreement and Amendment No. 1 to Shareholders
Agreement of even date herewith; (d) if the Closing shall not have occurred on
or prior to June 30, 1999, by Comcast upon written notice of such termination to
the other parties hereto, provided that no such notice of termination shall be
effective if at the time of such
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<PAGE>
purported termination, Comcast is in material breach of any of its obligations
contained herein or in the Comcast/BTH Agreement; or (e) if the Closing shall
not have occurred on or prior to June 30, 1999, by the Jones Entities upon
written notice of such termination to Comcast and repayment to Comcast of the
Initial Consideration as provided in Section 2(b) hereof, provided that no such
notice of termination shall be effective if at the time of such purported
termination, any Jones Entity shall be in material breach of any of its
obligations contained herein or in the Agreement and Amendment No. 1 to
Shareholders Agreement of even date herewith. This Agreement and the rights and
obligations of the parties hereunder shall cease upon any termination pursuant
to this Section; provided that (x) the provisions of this Section and Section
2(b), 12(b) and 13 shall survive any termination of this Agreement and (y)
nothing herein shall relieve any party from any liability for any prior breach
of this Agreement.
17. MISCELLANEOUS.
-------------
(a) Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors. No party may assign, delegate or otherwise transfer any
of its rights or obligations under this Agreement without the written consent of
the other parties hereto, provided that Comcast may assign its rights, but not
its obligations, hereunder to any SUBSIDIARY OF COMCAST.
(b) Specific Performance. The parties agree that (i) Comcast
--------------------
would be irreparably damaged if for any reason any Jones Entity failed to sell
the Optioned Shares upon exercise of the Control Option or to perform any of
such Jones Entity's other obligations under this Agreement, and that Comcast
would not have on adequate remedy at law for money damages in such event and
(ii) the Jones Entities would be irreparably damaged if for any reason Comcast
failed to perform any of Comcast's obligations under this Agreement, and that
the Jones Entities would not have an adequate remedy at law for money damages in
such event. Accordingly, each party shall be entitled to specific performance
and injunctive and other equitable relief to enforce the performance of this
Agreement by the other party. This provision is without prejudice to any other
rights that each party may have against the other party for any failure to
perform their obligations under this Agreement.
(c) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be deemed to have been duly given when delivered
in person, by facsimile transmission, nationally-recognized overnight courier
service or by registered or certified mail (postage prepaid, return receipt
requested):
if to the Jones Entities,
c/o Glenn R. Jones
Jones International, Ltd.
9697 East Mineral Avenue
Englewood, Colorado 80112
-19-
<PAGE>
if to Comcast:
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
Attn: General Counsel
Any notice delivered after business hours or on any day which is not a Business
Day shall be deemed for purposes of computing any time period hereunder to have
been delivered on the succeeding Business Day.
(d) Amendments and Waivers. (i) Any provision of this
----------------------
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(ii) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
(e) Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the law of the State of Delaware, without regard
to the conflicts of law rules of such state.
(f) Counterparts; Effectiveness: This Agreement may be signed
---------------------------
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
(g) Entire Agreement. This Agreement, the Shareholders
----------------
Agreement (including Agreement and Amendment No.1 to Shareholders Agreement),
the Option Agreements, the Comcast/BTH Agreement and the agreements attached as
exhibits hereto, together with their respective schedules and exhibits,
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersedes all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter of
this Agreement.
(h) Separability. In case any provision of this Agreement
------------
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
-20-
<PAGE>
(i) No Third Party Beneficiaries. This Agreement is for the
----------------------------
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any
person or entity, other than the parties hereto and such assigns, any legal
or equitable rights hereunder.
(j) Tax Matters. The parties hereto covenant and agree to
-----------
consult with one another and cooperate in good faith to determine mutually
advantageous allocations and tax structures to effect the transactions
contemplated by this Agreement.
18. DEFINITIONS.
-----------
"Affiliate" shall have the same meaning as in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks are authorized to close in New York, New York.
"Cable Partnership" means, at any time, any partnership that is an
Intercable Group Entity at such time.
"Franchise" means written "franchise" within the meaning of Section
602(8) of the Cable Communications Policy Act of 1984 (47 U.S.C. (S)522(9)).
"Franchise Authority" has the meaning that term is given by Section
602(9) of the Cable Communications Act of 1984 (47 U.S.C. (S)522(10)).
"Governmental Authority" means any local, county, state, commonwealth,
federal or foreign court, judicial, executive or legislative instrumentality, or
any agency, authority, commission, board or official thereof, including, without
limitation, any Franchise Authority.
"Intercable Group" means, at any time, the Company and each person
that is a Subsidiary of Jones Intercable, Inc., a Colorado corporation at such
time.
"Intercable Group Entity" means, at any time, each Person included in
the Intercable Group at such time.
"Jones" means Glenn R. Jones, a resident of Colorado, or in the event
he is not then alive or legally competent, his executor, the administrator of
his estate or his legal representative (including, without limitation, his
guardian, conservator or other similar fiduciary).
"Managed System" means any System that is owned and operated by a
Cable Partnership.
-21-
<PAGE>
"Option Closing" shall mean the consummation of the purchase and sale
of the Control Shares.
"Owned System" means any System that is owned and operated by an
Intercable Group Entity other than a Cable Partnership.
"Person" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Securities Act" means the Securities Act of 1933, as amended, and
rules and regulations promulgated thereunder.
"Subsidiary" means, as to any Person, (i) any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are, directly or indirectly, owned or controlled by such person, (ii) any
partnership of which such Person is, directly or indirectly, a general or
managing partner or (iii) any other entity that is, directly or indirectly,
controlled by such Person.
"System" means a cable television or SMATV system owned or operated by
an Intercable Group Entity serving subscribers within a geographical area
covered by one or more Franchise agreements from the same head end facility (or
two or more related head end facilities).
-22-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.
COMCAST CORPORATION
By: /s/ Arthur R. Block
-------------------
/s/ Glenn R. Jones
------------------
Glenn R. Jones
GLENN JONES GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
---------------------------
JONES INTERNATIONAL GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
---------------------------
JONES INTERNATIONAL, LTD.
By: /s/ Glenn R. Jones
------------------
JONES SPACE SEGMENT, INC.
By: /s/ Glenn R. Jones
------------------
-23-
<PAGE>
JONES GLOBAL GROUP, INC.
By: /s/ Glenn R. Jones
------------------
JONES INTERDIGITAL, INC.
By: /s/ Glenn R. Jones
------------------
JONES ENTERTAINMENT GROUP, LTD.
By: /s/ Glenn R. Jones
------------------
The undersigned hereby joins in this Agreement as a party hereto
solely for purposes of Sections 9(h) and 17 hereof.
JONES PROPERTIES, INC.
By: /s/ Glenn R. Jones
------------------
The undersigned hereby consent to the execution of this Agreement
pursuant to Section 5.4 of the Shareholders Agreement and Section 4.1 of each of
the Option Agreements.
BCI TELECOM HOLDING INC.
By: /s/ Siim Vanaselja
------------------
Director
BTH (INTERCABLE) LTD.
By: /s/ Christopher S. McKenzie
---------------------------
Director/President
-24-
<PAGE>
BTH (US CABLE) LTD.
By: /s/ Christopher S. McKenzie
---------------------------
Director/President
-25-
<PAGE>
Schedule A
Beneficial Ownership of Optioned Shares held by the Jones Entities
------------------------------------------------------------------
<TABLE>
<CAPTION>
Optioned Shares
(Common Stock)
<S> <C>
Jones International Grantor Business Trust 2,239,416
Glenn Jones Grantor Business Trust 474,400
Jones Space Segment, Inc. 35,707
Jones Global Group, Inc. 27,585
Jones Interdigital, Inc. 643
Jones Entertainment Group, Ltd. 100,400
---------
2,878,151
=========
<CAPTION>
Class A Shares
<S> <C>
Jones International Ltd. 1,497,373
Glenn R. Jones 526,893
---------
2,024,266
=========
</TABLE>
-26-
<PAGE>
Schedule B
Permitted Affiliate Transactions
--------------------------------
1. The purchase of the following assets by Jones or a Jones Entity at a price
equal to the fair market value (determined by appraisal) of such assets:
(a) that certain real estate located on Lot 1, Jones Intercable's
headquarters according to the recorded plot thereof, County of Arapahoe, State
of Colorado and the Panorama Falls Office Building.
(b) the Company's equity interest in each of Jones Futurex, Inc.,
Jones Global Group and Jones Customer Service Management LLC
(c) all of the Company's interest in the "Jones Spacelink"
tradename.
2. The assumption by the Jones Entities of the Company's rights and obligations
under that certain lease dated, December 23, 1997, by and between the Company
and PNC Leasing Corp. ("Lessor") relating to the aircraft presently leased by
the Company and the release by the Lessor of the Company from such lease.
3. The amendment of (i) that certain lease, dated November 30, 1989, by and
between the Company and Jones Properties, Inc. (the "Lease") (a) providing the
Company with a right to terminate the Lease upon (x) vacating the entire
premises which are subject to the Lease and occupied by the Company with the
intention not to re-occupy such leased premises and (y) the payment by the
Company to Jones Properties, Inc. of an amount determined pursuant to section
27(a)(v) of such Lease (without the offset for fair market rental value of such
premises provided in such section calculated until the end of the stated term of
such lease, June 30, 2000, and (b) prohibiting the Company from subleasing the
premises to any person other than Jones, through the stated term of such lease,
and (ii) any subleases relating to the premises providing that such subleases
automatically terminate upon the termination of the Lease and relieving the
Company of any further obligations under such sublease following such
termination.
4. The adoption of a Severance Plan for certain associates of the Intercable
Group Entities located in Denver, Colorado, and Lanham, Maryland. Amounts
payable under the plan shall be in cash and shall not exceed $33,000,000 in the
aggregate, of which not more than $15,000,000 shall be non-deductible by the
Company from its income under Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code").
-27-
<PAGE>
Such Severance Plan may also include the provision of COBRA benefits for the
number of weeks used to calculate a covered employee's severance payment but in
any case not to exceed one year.
All such severance payments shall, as a condition to payment, require that the
recipient be an employee of the Company at all times from the date hereof to the
date which is 90 days after the Closing Date unless such employee is terminated
without cause prior to the expiration of such 90-day period. Jones shall not be
a recipient of any such severance payments.
5. The termination of the Services Agreement on the terms set forth on Schedule
C-1.
-28-
<PAGE>
Schedule C
Transactions Offered to the Company Post-Closing
------------------------------------------------
1. The purchase of the following assets by Jones or a Jones Entity at a price
equal to the fair market value (determined by appraisal) of such assets:
(a) that certain real estate located on Lot 1, Jones Intercable
headquarters according to the recorded plot thereof, County of Arapahoe, State
of Colorado and the Panorama Falls Office Building.
(b) the Company's equity interest in each of Jones Futurex, Inc.,
Jones Global Group and Jones Customer Service Management LLC
(c) all of the Company's interest in the "Jones Spacelink" tradename.
*2. The assumption by the Jones Entities of the Company's rights and
obligations under that certain lease dated, December 23, 1997, by and between
the Company and PNC Leasing Corp. ("Lessor") relating to the aircraft presently
leased by the Company and the release by the Lessor of the Company from such
lease.
*3. The termination of the Services Agreement on the terms set forth on
Schedule C-1.
*4. The amendment of (i) that certain lease, dated November 30, 1989, by and
between the Company and Jones Properties, Inc. (the "Lease") (a) providing the
Company with a right to terminate the Lease upon (x) vacating the entire
premises which are subject to the Lease and occupied by the Company with the
intention not to re-occupy such leased premises and (y) the payment by the
Company to Jones Properties, Inc. of an amount determined pursuant to section
27(a)(v) of such Lease (without the offset for fair market rental value of such
premises provided in such section calculated until the end of the stated term of
such lease, June 30, 2000 and (b) prohibiting the Company from subleasing the
premises to any person other than Jones, through the stated term of such lease,
and (ii) any subleases relating to the premises providing that such subleases
automatically terminate upon the termination of the Lease and relieving the
Company of any further obligations under such sublease following such
termination.
* Indicates transactions which Jones Entities shall offer the Company following
the Closing as provided in Section 9(b).
-29-
<PAGE>
Schedule C-1
The Services Agreement dated as of December 9, 1994 (the "Services
Agreement") between Jones Intercable, Inc. ("Intercable") and Jones Interactive,
Inc. ("Interactive") may be terminated by Intercable, prior to the end of the
term stated in the Services Agreement (an "Early Termination"), on sixty (60)
days prior written notice to Interactive (an "Early Termination Notice"),
subject to the following termination payment:
In connection with an Early Termination, Intercable shall pay to
Interactive on the termination date (x) the net present value discounted at a
rate of 6.25% of the greater of (i) $50,000 or (ii) the average Management Fee
(as such term is defined in the Services Agreement) which was payable during the
three (3) months immediately preceding the date of the Early Termination Notice,
in either case times the number of months remaining in the term of the Services
Agreement; plus (y) an amount equal to the severance costs associated with the
termination of employment of employees of Interactive in connection with the
termination of the Services Agreement, which severance payments shall be
calculated based on the formulas contained in the severance plan adopted by
Intercable in connection with the change in control of Intercable from Glenn R.
Jones and Jones International, Ltd. to Comcast Corporation; plus (z) any lease
termination costs associated with early termination of leases of equipment that
will no longer be required or used as a result of the Early Termination and
which the Company has decided not to assume.
-30-
<PAGE>
SCHEDULE F
----------
Owned Systems
-------------
FRANCHISES HELD BY
JONES INTERCABLE, INC.
- ----------------------
Panama City Beach, Florida System
- ---------------------------------
City of Panama City Beach
Oxnard, California System
- -------------------------
City of Oxnard
FRANCHISES HELD BY
JONES COMMUNICATIONS OF MARYLAND, INC.
- --------------------------------------
Prince George's County System:
- ------------------------------
North Prince George's County
South Prince George's County
City of Bowie
Chesapeake Bay Group (including Annapolis),
- -------------------------------------------
Anne Arundel County and
- -----------------------
Charles County Systems):
- -----------------------
Anne Arundel County
City of Annapolis
<PAGE>
FRANCHISES HELD BY
JONES COMMUNICATIONS OF
GEORGIA/SOUTH CAROLINA, INC.
- ----------------------------
Savannah System:
- ---------------
Chatham County
City of Savannah
FRANCHISES HELD BY
JONES COMMUNICATIONS OF VIRGINIA, INC.
- --------------------------------------
Alexandria System:
- -----------------
City of Alexandria
Prince William Group (including
- -------------------------------
Dale City, Reston and
- ---------------------
Manassas Systems):
- ----------------
Fairfax County (Reston)
City of Manassas
FRANCHISES HELD BY
JONES COMMUNICATIONS OF ARIZONA, INC.
- -------------------------------------
Pima County System:
- ------------------
Town of Oro Valley
FRANCHISES HELD BY
JONES COMMUNICATIONS OF MISSOURI, INC.
- --------------------------------------
Independence System:
- -------------------
City of Olathe, KS
City of Raytown
-32-
<PAGE>
FRANCHISES HELD BY
JONES COMMUNICATIONS OF NEW MEXICO, INC.
- ----------------------------------------
Albuquerque System:
- ------------------
City of Albuquerque
FRANCHISES HELD BY
JONES OF WISCONSIN, INC.
- ------------------------
Manitowoc System:
- ----------------
City of Manitowoc
MANAGED SYSTEMS
---------------
FRANCHISES HELD BY
CABLE TV FUND 14-A, Ltd.
- ------------------------
Calvert County System:
- ---------------------
Calvert County
Naperville System
- -----------------
City of Naperville
FRANCHISES HELD BY
JONES GROWTH PARTNERS, L.P.
- ---------------------------
Wheaton System
- --------------
City of Wheaton
Village of Addison
-3-
<PAGE>
FRANCHISES HELD BY
IDS/JONES JOINT VENTURE PARTNERS
- --------------------------------
Aurora System
- -------------
City of Aurora
FRANCHISES HELD BY
CABLE TV FUND 12-BCD VENTURE
- -----------------------------
Palmdale and Littlerock Systems:
- -------------------------------
Los Angeles County
City of Lancaster
City of Palmdale
FRANCHISES HELD BY
JONES CABLE INCOME FUND 1-A, LTD.
- ---------------------------------
Owatonna/Glencoe System
- -----------------------
City of Owatonna
FRANCHISES HELD BY
CABLE TV FUND 12-A, LTD.
- ------------------------
Cook County/Orland Park System
- ------------------------------
Village of Mundelein
FRANCHISES HELD BY
CABLE TV FUND 15-A, LTD.
- ------------------------
South Suburban System
- ---------------------
Village of Lansing
-4-
<PAGE>
EXHIBIT C
PLEDGE AGREEMENT
This PLEDGE AGREEMENT is entered into as of the 12 day of August 1998, by
and among Glenn R. Jones ("Jones"), Jones International, Ltd. ("International")
and Comcast Corporation ("Comcast").
WHEREAS, Comcast, Jones, International, Glenn Jones Grantor Business
Trust, Jones International Grantor Business Trust, Jones Space Segment, Inc.,
Jones Global Group, Inc., Jones Interdigital, Inc., and Jones Entertainment
Group, Ltd. have entered into that certain Agreement, dated as of August __,
1998 (the "Jones/Comcast Agreement");
WHEREAS, Section 2 of the Jones/Comcast agreement provides for Comcast
to deposit $50,000,000 with International (the "Initial Consideration");
WHEREAS, Section 2 of the Jones/Comcast Agreement further provides
that under certain circumstances described therein, the Jones Entities, as
defined therein, are obligated to repay the Initial Consideration to Comcast
plus interest as described in such Section 2 (the "Secured Obligations");
WHEREAS, Comcast's obligation to deposit the Initial Consideration
with International is conditioned upon Jones and International pledging
2,000,000 shares (the "Class A Stock") of Class A Common Stock, par value $.01
per share, of Jones Intercable, Inc. (the "Company") with Comcast to secure the
Secured Obligations; and
WHEREAS, contemporaneously with the execution and delivery hereof
Comcast is depositing the Initial Consideration with International;
THEREFORE, in consideration of the mutual covenants contained herein
and intending to be legally bound hereby, the parties agree as follows.
1. The Security Interest. In order to secure the performance of the
---------------------
Secured Obligations in accordance with the terms thereof,
(a) Jones and International each hereby assign and pledge to Comcast and grant
to Comcast a security interest in the Class A Shares, and all of their
rights and privileges with respect to the Class A Shares, and all income
and profits thereon (other than dividends paid by the Company in respect of
the Class A Shares prior to any exercise by Comcast of its remedies
hereunder, which will be paid over to Jones and International as provided
in Section 4)
<PAGE>
and all proceeds of the foregoing, and any and all property referred to in
Section 1(b) (the "Collateral").
(b) In the event any change in the Company's capital stock shall occur,
Jones and International will immediately pledge with Comcast any securities (and
any share certificates or other instruments evidencing such securities) issued
by the Company in respect of the Class A Shares, and all income and profits
thereon (other than dividends paid by the Company in respect of the Class A
Shares prior to any exercise by Comcast of its remedies hereunder), as
additional security for the Secured Obligations. All such securities, share
certificates, instruments and other property constitute Collateral and are
subject to all provisions of this Agreement.
(c) The Security Interest is granted as security only and shall not
subject Comcast to, or transfer or in any way affect or modify, any obligation
or liability of Jones and International with respect to any of the Collateral or
any transaction in connection therewith.
(d) In the event Jones and International fail to perform any Secured
Obligation, Comcast shall be entitled to exercise all rights of a secured party
under the Uniform Commercial Code (whether or not in effect in the jurisdiction
where the rights are exercised) and such other rights as may otherwise be
provided to a secured party under applicable law.
2. Delivery of Collateral. All certificates representing the Class A
----------------------
Shares (or securities described in Section 1(b)) delivered to Comcast by Jones
and International pursuant hereto shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, with signatures appropriately guaranteed, and accompanied
by any required transfer tax stamps, all in form and substance satisfactory to
Comcast.
3. Further Assurances. (a) Jones and International agrees that they
------------------
will, at Comcast's expense and in such manner and form as Comcast may reasonably
require, execute, deliver, file and record any financing statement, specific
assignment or other paper and take any other action that may be necessary or
desirable that Comcast may request, in order to create, preserve, perfect or
validate the Security Interest or to enable Comcast to exercise and enforce its
rights hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, Jones and International hereby authorize Comcast to execute
and file, in the name of Jones and International or otherwise, Uniform
Commercial Code financing statements (which may be carbon, photographic,
photostatic or other reproductions of this Pledge Agreement or of a financing
statement relating to this Pledge Agreement) which Comcast in its reasonable
discretion may deem necessary or appropriate to further perfect the Security
Interest.
(b) Jones and International agree that they will not change (i) their
name, identity or structure in any manner or (ii) the location of their chief
executive office or domicile unless they shall have given Comcast not less than
30 days' prior notice thereof.
<PAGE>
(c) In connection with an exercise of rights pursuant to Section 1(d),
Comcast may cause any or all of the Class A Shares to be transferred of record
into the name of Comcast or its designee. After notice thereof, Jones and
International will promptly give to Comcast (or its designee) copies of any
notices or other communications received by them with respect to the Class A
Shares registered in the name of Jones and International, and Comcast will
promptly give Jones and International copies of any notices and communications
received by Comcast with respect to any Class A Shares registered in the name of
Comcast.
4. Right to Vote and Receive Dividends on Collateral. (a) Until such
-------------------------------------------------
time (if ever) that Comcast shall have exercised, pursuant to Section 1(d), any
of its remedies in respect of the Collateral, Jones and International shall
retain all voting rights with respect to the Class A Shares and shall have the
right to receive all dividends paid by the Company in respect of the Collateral
and Comcast shall take all such action as Jones and International may deem
necessary or appropriate to give effect to such right. All such dividends which
are received by Comcast shall be received in trust for the benefit of Jones and
International and shall promptly be paid over to Jones and International.
(b) In the event Comcast exercises, pursuant to Section 1(d), any of its
remedies in respect of the Collateral, Comcast shall thereafter be entitled to
receive all dividends paid by the Company in respect of the Collateral.
5. Limitation on Duty of Comcast in Respect of Collateral. Beyond the
------------------------------------------------------
exercise of reasonable care in the custody thereof, Comcast shall have no duty
as to any Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto. Comcast
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property, and
shall not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any agent or bailee selected by Comcast in good faith.
6. Termination of Security Interest; Release of Collateral. The
-------------------------------------------------------
Security Interest granted hereunder shall terminate, and all rights to the
Collateral shall revert to Jones and International at such time as the Jones
Entities shall have no further obligation to repay the Initial Consideration.
Upon any such termination of the Security Interests or release of Collateral,
Comcast will deliver the Collateral to Jones and International and will execute
and deliver to Jones and International such documents as Jones and International
shall reasonably request to evidence the termination of the Security Interest or
the release of such Collateral, as the case may be.
<PAGE>
7. Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be deemed to have been duly given when delivered
in person, by facsimile transmission, nationally-recognized overnight courier
service or by registered or certified mail (postage prepaid, return receipt
requested):
if to Jones or International,
c/o Glenn R. Jones
Jones International, Ltd.
9697 East Mineral Avenue
Englewood, Colorado 80112
if to Comcast:
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
Attn: General Counsel
Any notice delivered after business hours or on any day which is not a business
day shall be deemed for purposes of computing any time period hereunder to have
been delivered on the succeeding business day.
8. Amendments and Waivers. (i) Any provision of this Pledge
----------------------
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Pledge Agreement, or in the case of a waiver, by the party against whom the
waiver is to be effective. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
9. Governing Law. This Agreement shall be construed in accordance
-------------
with and governed by the law of the State of Delaware, without regard to the
conflicts of law rules of such state.
10. Counterparts; Effectiveness: This Agreement may be signed in any
---------------------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become
<PAGE>
effective when each party hereto shall have received counterparts hereof signed
by all of the other parties hereto.
11. Entire Agreement. This Pledge Agreement and the Jones/Comcast
----------------
Agreement together with its respective schedules and exhibits, constitute the
entire agreement between the parties with respect to the subject matter of this
Pledge Agreement and supersedes all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter of this
Pledge Agreement.
12. Separability. In case any provision of this Pledge Agreement
------------
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
13. Successors and Assigns. The provisions of this Pledge Agreement
----------------------
are for the benefit of Comcast and Jones and International and their respective
successors and assigns.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be executed as of the date set forth above by their duly authorized
representatives.
COMCAST CORPORATION
By:________________________________
___________________________________
Glenn R. Jones
JONES INTERNATIONAL, LTD.
By:________________________________
<PAGE>
EXHIBIT 4
EXECUTION COPY
AMENDMENT NO. 1 TO OPTION AGREEMENTS
This AMENDMENT to each of those certain Option Agreements described more
fully herein is entered into as of this 12 day of August 1998, by and among
Jones International, Ltd. ("International"), Glenn Jones Grantor Business Trust
(the "Jones Trust"), Jones International Grantor Business Trust (the "JI Trust",
and together with the Jones Trust, the "Trusts"), Jones Space Segment, Inc.
("Space"), Jones Global Group, Inc. ("Global"), Jones Interdigital, Inc.
("Interdigital"), Jones Entertainment Group, Ltd. ("Entertainment" and together
with International, the Trusts, Space, Global and Interdigital, the "Jones
Entities") and The Bank of New York (as successor agent to Morgan Guaranty Trust
Company of New York) (the "Purchaser"), as agent for, in the case of a Section
3.1(a)(vi) Exercise (as defined herein), Comcast Corporation, a Pennsylvania
corporation ("Comcast"), and in all other cases BTH (Intercable) Limited, a
British Virgin Islands corporation f/k/a Bell Canada International BVI VI
Limited ("BTH Intercable") as assignee of BCI Telecom Holdings Inc., a Canadian
corporation, f/k/a Bell Canada International, Inc. ("BTH").
WHEREAS, the Jones Entities have entered into those certain Option
Agreements, each dated as of December 20, 1994 (the "Option Agreements"),
pursuant to which BTH Intercable, as assignee of BTH and through its agent, has
the option (the "Control Option") to purchase the shares of Common Stock, par
value $.01 per share (the "Common Stock"), of Jones Intercable, Inc. (the
"Company") owned beneficially or of record by the Jones Entities (the "Control
Shares");
WHEREAS, BTH, BTH Intercable and BTH (US Cable) Limited, a British Virgin
Islands corporation f/k/a Bell Canada International BVI III, Limited ("US
Cable") have entered into a Purchase and Sale Agreement with Comcast, dated as
of May 22, 1998, and amended and restated as of the date hereof (the
"Comcast/BTH Agreement") in connection with the transactions contemplated by the
Jones/Comcast Agreement (as defined herein), including the exercise of the
Control Option pursuant to the Option Agreements. BTH, BTH Intercable and US
Cable are sometimes referred to herein as the "Bell Entities."
WHEREAS, the Jones Entities have entered into an Agreement with Comcast,
dated August 12, 1998 (the "Jones/Comcast Agreement"), concerning the exercise
of the Control Option;
WHEREAS, in connection with the execution and delivery of the Comcast/BTH
Agreement as so amended and restated and the Jones/Comcast Agreement and in
light of the transactions contemplated thereby, the parties hereto desire to
amend each of the Option Agreements as described herein to provide for, among
other things, a new Exercise Period (as
<PAGE>
defined in the Option Agreements) which will cause the Control Option to become
currently exercisable;
THEREFORE, in consideration of the mutual covenants contained herein, and
intending to be legally bound hereby, the parties agree as follows.
1. Definitions. All terms used but not otherwise defined herein shall
-----------
have the same meanings as ascribed to them in the Option Agreements.
2. Amendment of Preamble. The preamble to the Option Agreements is hereby
---------------------
amended by:
(a) inserting after the date "December 20, 1994" the phrase "and
amended as of August 12, 1998" and
(b) inserting after the word "between" the phrase "The Bank of New York
(as successor agent to Morgan Guaranty Trust Company of New York) (the
"Purchaser"), as agent for, in the case of a Section 3.1(a)(vi) Exercise (as
defined herein), Comcast Corporation, a Pennsylvania corporation and in all
other cases BTH (Intercable) Limited, a British Virgin Islands corporation f/k/a
Bell Canada International BVI VI Limited ("BTH Intercable") as assignee of BCI
Telecom Holdings Inc., a Canadian corporation, f/k/a Bell Canada International,
Inc. ("BTH")".
3. Substitution of the term "BCI". All instances of the term "BCI" in the
------------------------------
Option Agreements are hereby deleted and replaced with the term "BTH".
4. Amendment to Section 1.1(a). Section 1.1(a) is amended by:
---------------------------
(a) deleting the definition of "BCI" and inserting in lieu thereof the
following definition:
""BTH" means BCI Telecom Holding Inc. f/k/a Bell Canada International
Inc., a corporation organized under the Canada Business Corporations Act."
(b) deleting the definition of "Shareholders Agreement" and inserting
in lieu thereof the following definition:
""SHAREHOLDERS AGREEMENT" means the Shareholders Agreement dated as of
December 20, 1994 among BTH, the Company, Jones and Jones International, as
amended on August 12, 1998."
(c) and adding thereto the following definitions:
-2-
<PAGE>
""BTH/COMCAST AGREEMENT" means that certain Purchase and Sale Agreement,
dated May 22, 1998, and amended and restated as of August 12, 1998 by and among
Comcast, BTH, BTH (US Cable) Limited, a British Virgin Islands corporation f/k/a
Bell Canada International BVI III Limited, and BTH Intercable.
"Comcast" means Comcast Corporation, a Pennsylvania corporation.
"FRANCHISE AUTHORITY" has the meaning that term is given by Section
602(9) of the Cable Communications Act of 1984 (47 U.S.C. (S) 522(10)).
"JONES/COMCAST AGREEMENT" means that certain Agreement dated August 12,
1998 by and among Comcast and the Jones Entities (as defined therein).
"JONES/COMCAST CLOSING" means the "Closing" as defined in the
Jones/Comcast Agreement.
"JONES/COMCAST CLOSING DATE" means the "Closing Date" as defined in the
Jones/Comcast Agreement.
"SECTION 3.1(A)(VI) EXERCISE" shall refer to the exercise of the Control
Option in accordance with Article III hereof pursuant to Section 3.1(a)(vi).
"SIMULTANEOUS CLOSING" means the Simultaneous Closing as such term is
defined in the BTH/Comcast Agreement."
5. Amendment to Section 1.1(b). Section 1.1(b) is hereby amended by
---------------------------
inserting the following:
"Other Transactions 3.2(b)"
6. Amendment of Section 3.1. Section 3.1 is hereby deleted in its
------------------------
entirety and the following is substituted in lieu thereof:
"SECTION 3.1 EXERCISE PERIODS. (a) The Control Option may be exercised
----------------
either as provided in Section 7.2(c), or by Purchaser at any time during any of
the following periods (each, an "EXERCISE PERIOD"):
(i) the period commencing on the day of an Event and ending 270 days
after Purchaser receives written notice from or on behalf of any Optionor
of the occurrence of an Event;
(ii) the period commencing on the day of a Resignation Event and ending
90 days after Purchaser receives a written notice from (or on behalf of)
any Optionor of the occurrence of a Resignation Event;
-3-
<PAGE>
(iii) the period commencing on the day that Purchaser receives a written
notice from (or on behalf of ) Grantor requesting that Purchaser exercise
the Control Option (the "GRANTOR'S NOTICE"), which notice may be delivered
only on or after the fifth anniversary of the SPA Closing, and ending 180
days after such day;
(iv) the period commencing on the seventh anniversary of the SPA
Closing and ending on the eighth anniversary of the SPA Closing;
(v) the period commencing on the day of a Jones Bankruptcy Event and
ending 30 days after Purchaser receives written notice of the occurrence of
a Jones Bankruptcy Event; and
(vi) the period commencing on August 12, 1998, which period shall only
apply to the exercise of the Control Option pursuant to the Jones/Comcast
Agreement; provided, that upon the occurrence of the Initial Closing as
--------
defined in the BTH/Comcast Agreement the Exercise Period described in this
Section 3.1(a)(vi) shall automatically terminate.
provided that no Exercise Period will expire if immediately preceding such
- --------
expiration there is in effect a law, regulation or order that stays or otherwise
prohibits Purchaser from delivering an Exercise Notice after (or as a result of)
the occurrence of a Jones Bankruptcy Event; provided further however, that the
commencement of any Exercise Period described in Sections 3.1(a)(i) through (v)
inclusive shall be postponed until such time, if ever, on the earlier to occur
of the date the Jones/Comcast Agreement shall have expired or been terminated or
the date of the Initial Closing under the BTH/Comcast Agreement, but in no event
shall such Exercise Periods described in Sections 3.1(a)(i) - 3.1(a)(v) end
later than December 20, 2002.
(b) The notices delivered pursuant to clauses (i), (ii), (iii) and (v)
will be in the form attached hereto as Exhibit A. A Grantor's Notice delivered
pursuant to clause (iii) will be effective only if a similar notice is
simultaneously delivered to Purchaser under the Related Option Agreements. Once
delivered to Purchaser, a Grantor's Notice will be irrevocable.
(c) Subject to the termination provisions of Section 3.6, the parties
acknowledge that at any given time there may be more than one Exercise Period in
effect at such time.
(d) Grantor acknowledges and agrees that the delivery of an Exercise
Notice pursuant to a Section 3.1(a)(vi) Exercise is being made for the account
of Comcast. BTH shall not be liable to Grantor under this Agreement if the
closing of the Section 3.1(a)(vi) Exercise shall not occur for any reason
provided that this Section 3.1(d) shall not be deemed to be a waiver by Grantor
of any claim which it may have against BTH due to a breach by BTH of its
obligations
-4-
<PAGE>
hereunder or preserved pursuant to the second sentence of Section 1.6 of the
Agreement and Amendment No. 1 to Shareholders Agreement of even date herewith."
7. Amendment of Section 3.2. Section 3.2 is hereby deleted in its
------------------------
entirety and the following is substituted in lieu thereof:
"SECTION 3.2 EXERCISE OF CONTROL OPTION . (a) Purchaser may exercise
--------------------------
the Control Option at any time during an Exercise Period by delivery to Grantor
of an irrevocable written notice in the form attached hereto as Exhibit B (the
"EXERCISE NOTICE"). The execution and delivery of this Agreement as amended on
August 12, 1998 shall be deemed to be delivery by Purchaser of a valid Exercise
Notice as of such date pursuant to a Section 3.1(a)(vi) Exercise. Purchaser has
no obligation to deliver an Exercise Notice pursuant to Section 3.1(a)(i)
through (v) and may allow the Control Option to expire and terminate without
purchasing the Optioned Shares. The Control Option may only be exercised
simultaneously with the exercise of the option granted under the Related Option
Agreements and the Closing hereunder will only take place simultaneously with
the closing of the exercise of the option granted under the Related Option
Agreements; provided that the Closing pursuant to a Section 3.1(a)(vi) Exercise
will also only take place on the same date as the Jones/Comcast Closing and the
Simultaneous Closing.
(b) The closing for the exercise of the Control Option (the "CLOSING")
(1) in the case of any exercise of the Control Option other than a Section
3.1(a)(vi) Exercise, will take place not more than 20 Business Days after the
date that the Exercise Notice is delivered to Grantor, provided that (x) if it
--------
is necessary to determine Market Value pursuant to Section 3.4(b), the Closing
will be postponed as provided in Section 3.4(c) and (y) so long as Purchaser is
using its reasonable efforts to consummate the Closing promptly, and subject to
Section 3.6 hereof, Purchaser may postpone the Closing until such time as the
following conditions have been satisfied or waived by Purchaser and (2) in the
case of a Section 3.1(a)(vi) Exercise, will take place on the same date as the
Jones/Comcast Closing and the Simultaneous Closing at such time as the following
conditions have been satisfied or waived by Purchaser:
(i) The waiting period (including any extension thereof resulting from
additional inquiries, if any) under the HSR Act applicable to (x) the
purchase of the Optioned Shares by Purchaser and (y) in the case of a
Section 3.1(a)(vi) Exercise, the consummation of the transactions
contemplated by the Jones/Comcast Agreement and the BTH/Comcast Agreement
including the sale of the Optioned Shares from Purchaser to Comcast (the
"Other Transactions") shall have expired or been earlier terminated.
(ii) All other actions by, in respect of or filings with any Governmental
Authority in the United States, England or Spain, or any other country
where the Intercable Group conducts material business, required to permit
(x) the consummation of the Closing and (y) in the case of a Section
3.1(a)(vi) Exercise, the consummation of the Other Transactions, shall have
been taken or obtained, as the case may be, and shall be in
-5-
<PAGE>
full force and effect; provided that, in the case of a Section 3.1(a)(vi)
Exercise, if all authorizations, consents and approvals from applicable
Franchise Authorities necessary to effect the change of control of the
Franchises (A) relating to the Franchises in Systems (whether Owned Systems
or Managed Systems) set forth on Schedule F hereto, (B) relating to
Franchises in Managed Systems which as of the date of Closing are subject
to a letter of intent or agreement of sale providing for the sale or other
disposition of such Managed Systems to a person other than the Company (or
its wholly owned Subsidiaries), and (C) relating to Franchises with not
less than 10,000 basic subscribers in Systems (whether Owned Systems or
Managed Systems) acquired by any Intercable Group Entity (except for
Managed Systems which, as of the Closing Date, are subject to a letter of
intent or agreement of sale providing for the sale or other disposition of
such Managed System to the Company or one of its wholly owned Subsidiaries)
after the date hereof (the "Required Franchise Approvals") shall have been
so obtained, be in effect and not be subject to withdrawal or appeal then
the condition contained in this paragraph (ii) shall be deemed to be
fulfilled as it relates to authorizations, consents or approvals from
applicable Franchise Authorities on the date on which all of the Required
Franchise Approvals are so obtained and are in effect and not subject to
withdrawal or appeal and provided further that this condition shall not be
satisfied if any Required Franchise Approval shall not have been obtained.
(iii) There shall not then be in effect any applicable law, rule or
regulation or any judgment, injunction, order or decree that has one or
more of the effects described in clauses (a), (b) or (c) of the following
paragraph (iv), provided that (x) if after the date hereof BTH or any of
--------
its Affiliates and (y) in the case of a Section 3.1(a)(vi) Exercise, if
after August 12, 1998 Comcast or any of its Affiliates enters into a new
line of business and at such time there is a law, rule or regulation that
has, or is reasonably expected to have, one or more of such effects, then
this clause (iii) will not apply to any such law, rule or regulation.
(iv) There shall not then be instituted or pending any action or
proceeding before any federal or state court or other Governmental
Authority brought by a Governmental Authority challenging the consummation
of the Closing or, in the case of a Section 3.1(a)(vi) Exercise, the Other
Transactions or seeking to (a) prevent BTH (or its agent) or, in the case
of a Section 3.1(a)(vi) Exercise, Comcast (or its agent) from exercising
the Control Option, (b) require BTH (or its agent) or, in the case of a
Section 3.1(a)(vi) Exercise, Comcast (or its agent) to divest, or otherwise
limit BTH's, Comcast's (or their respective agent's) ability to exercise
full rights of ownership over, the shares of Capital Stock owned by BTH and
its Affiliates, Comcast and its Affiliates, the Control Option or the
Optioned Shares or (c) require, after the exercise of the Control Option,
the Intercable Group or, in the case of a Section 3.1(a)(vi) Exercise the
Intercable Group or Comcast to divest any material business or assets or
would impose a material limitation on the conduct of Intercable Group's or
Comcast's business, provided that (A)
-6-
<PAGE>
if after the date hereof BTH or any of its Affiliates, or, in the case of
a Section 3.1(a)(vi) Exercise, if after August 12, 1998 Comcast or any of
its Affiliates enters into a new line of business and at such time there is
a law, rule or regulation that has, or is reasonably expected to have, one
or more of the foregoing effects, then this paragraph (iv) will not apply
to actions or proceedings that seek to enforce such law, rule or regulation
and (B) any actions or proceedings described in clause (a) or (b) will be
based on the business or assets of BTH and Comcast or their respective
Affiliates and not the Purchaser.
(v) The Intercable Group Entities shall have received all material
third party consents required to be obtained in connection with the
Closing, and, in the case of a Section 3.1(a)(vi) Exercise, the
consummation of the Other Transactions in each case in form and substance
reasonably satisfactory to Purchaser.
(vi) The representations and warranties of Grantor contained in
Article V shall be true at and as of the date of the Closing, as if made at
and as of such date.
(vii) In the case of a Section 3.1(a)(vi) Exercise only, the
Jones/Comcast Closing and the Simultaneous Closing shall have occurred on
the same date as the Closing hereunder."
8. Amendment of Section 3.3. Section 3.3 is hereby deleted in its
------------------------
entirety and the following is substituted in lieu thereof:
"SECTION 3.3 PURCHASE PRICE FOR THE OPTIONED SHARES. (a) The purchase
--------------------------------------
price per Optioned Share will be calculated as follows:
(i) (A) if the Trigger Date occurs prior to or on June 18, 1995, 200%
of the Market Value of a share of Class A Common Stock on the applicable
Trigger Date, or (B) except in the case of a Section 3.1(a)(vi) Exercise,
if the Trigger Date occurs after June 18, 1995, the sum of (x) two-thirds
of the Option Price on the applicable Trigger Date and (y) one-third of
120% of the Market Value of a share of Class A Common Stock on the
applicable Trigger Date /1/ or (C) in the case of a Section 3.1(a)(vi)
Exercise, $69.4891 per Optioned Share, in each case reduced by
(ii) (A) the amount (or in the case of property other than cash, fair
market value) of any dividends and distributions other than stock dividends
paid, declared or
- -------------------
1. As an example of the calculation described in clause (i) (B), if on the
applicable Trigger Date the Option Price were $50 per Share and the Market
Value of a share of Class A Common Stock were $60 per share, the purchase
price would be 2/3 of $50 ($33.3333) plus 1/3 of 120% of $60 ($24), or
$57.3333 (computed to four decimal places).
-7-
<PAGE>
otherwise distributed by the Company in respect of the Optioned Shares
between the date hereof and the date of Closing and (B) in the case of a
Section 3.1(a)(vi) Exercise, the amount of any Initial Consideration (as
such term is used in the Jones/Comcast Agreement) which has been paid to
Jones, Grantor or any party to the Related Option Agreements (or their
respective Affiliates) in respect of the Optioned Shares plus interest
accrued at the Applicable Rate (as such term is used in the Jones/Comcast
Agreement) from the date such Initial Consideration was paid by Comcast to
and including the date of Closing; provided that the amount of such Initial
Consideration (plus interest) deemed to have been paid in respect of each
Optioned Share shall be equal to the total amount of such Initial
Consideration (plus interest) paid (and accrued) under the Jones/Comcast
Agreement divided by the sum of the aggregate number of Optioned Shares
actually acquired by Purchaser on the date of Closing under this Option
Agreement plus the aggregate number of Optioned Shares (as such term is
used in the Related Option Agreements) actually acquired by Purchaser on
the date of Closing under the Related Option Agreements./2/ In the event
any such dividends or distributions are made in property other than cash,
the fair market value of such dividends or distributions will be determined
pursuant to the valuation procedures described in Section 3.4(b).
(b) The applicable "TRIGGER DATE" will depend on the Exercise Period under
which Purchaser is delivering an Exercise Notice and will be earliest of the
following days:
(i) in the case of an Exercise Period described in clauses (i) or
(ii) of Section 3.1(a), the day of an Event or Resignation Event, as the
case may be;
(ii) in the case of an Exercise Period described in clause (iii) of
Section 3.1(a), the day immediately preceding the day on which Grantor
delivers a Grantor's Notice;
(iii) in the case of an Exercise Period described in clause (iv) of
Section 3.1(a), the day immediately preceding day on which Purchaser
delivers an Exercise Notice;
- ----------------------
/2/ As an example of the calculation described in clause (ii)(B), if on the
date of Closing the total amount of the Initial Consideration (plus
interest) paid (and accrued) under the Jones/Comcast Agreement is equal to
$51,000,000 and the sum of the aggregate number of Optioned Shares actually
acquired by Purchaser on the date of Closing under this Option Agreement
plus the aggregate number of Optioned Shares (as such term is used in the
Related Option Agreements) actually acquired by Purchaser on the date of
Closing under the Related Option Agreements is equal to 2,700,000 Optioned
Shares, the amount of the reduction per Optioned Share would be $51,000,000
divided by 2,700,000, or $18.8889 (computed to four decimal places).
-8-
<PAGE>
(iv) in the case of an Exercise Period described in clause (v) of
Section 3.1(a), the day immediately preceding the day of a Jones Bankruptcy
Event; or
(v) in the case of a Section 3.1(a)(vi) Exercise, the date hereof."
9. Amendment of Section 3.5. Section 3.5 is amended by adding a new
------------------------
subsection (c) thereto as follows:
"(c) In the case of a Section 3.1(a)(vi) Exercise, the transactions
described in paragraphs (a) and (b) of this Section 3.5 shall occur on the same
date as the Jones/Comcast Closing and the Simultaneous Closing. If the
Simultaneous Closing and the Jones/Comcast Closing shall not have occurred on
the same date as the Closing, then the transactions described in paragraphs (a)
and (b) of Section 3.5 shall be rescinded and deemed not to have occurred. In
the case of a Section 3.1(a)(vi) Exercise, the procedures at the Closing shall
be as follows:
(i) the directors of the Company other than the Joint Nominees (as
such term is defined in the Shareholders Agreement) shall resign seriatim
and the remaining directors shall appoint individuals designated by Comcast
to fill the vacancies created thereby, all as more fully described in the
Jones/Comcast Agreement and the BTH/Comcast Agreement.
(ii) the transactions described in paragraphs (a) and (b) of Section
3.5 of this Agreement and of the Related Option Agreements shall occur; and
(iii) the transactions to be effected at the Simultaneous Closing shall
occur."
10. Amendment of Section 3.6 Section 3.6 is hereby deleted in its
------------------------
entirety and the following is substituted in lieu thereof:
"SECTION 3.6 TERMINATION OF CONTROL OPTION. (a) The Control Option shall
------------------------------
terminate at 5:00 p.m. Denver time when the first Exercise Period described in
clauses (i), (iii) or (iv) of Section 3.1 expires (the "TERMINATION TIME"),
provided that, subject to the following paragraph (b), the Control Option will
- --------
not terminate if Purchaser has previously delivered to Grantor an Exercise
Notice. The Control Option shall also terminate (A) at such time as Purchaser
withdraws an Exercise Notice pursuant to Section 3.4(c), or (B) if the
Closing has been postponed pursuant to Section 3.2(b)(1), ten Business Days
after Grantor has delivered written notice to Purchaser stating that it believes
Purchaser is not using its reasonable efforts to consummate the Closing promptly
(which notice will set forth the basis for such claim) and Purchaser has failed
to use its reasonable efforts prior to the expiration of such period to cure the
problem identified by Grantor. The Control Option will not terminate solely
because of the expiration of the Exercise Periods described in clauses (ii) and
(v) of Section 3.1, or in the case
-9-
<PAGE>
of a Section 3.1(a)(vi) Exercise, upon the termination of the Jones/Comcast
Agreement and the failure of the Closing hereunder to occur.
(b) Notwithstanding anything in this Agreement to the contrary, (i) if an
Exercise Period is extended pursuant to the proviso in Section 3.1(a), the
Termination Time will occur twenty Business Days after such stay or prohibition
has been lifted and Purchaser has received notice of such action and (ii) each
Exercise Notice other than a Section 3.1(a)(vi) Exercise Notice shall terminate,
and be of no further force or effect, 18 months after its delivery, unless a
Closing shall have occurred by such time.
(c) Notwithstanding the foregoing provisions of this Section 3.6, in no
event shall the Control Option expire or terminate prior to the termination of
the Jones/Comcast Agreement."
11. Amendment of Section 4.1. Section 4.1 is hereby deleted in its
------------------------
entirety and the following is substituted in lieu thereof:
"SECTION 4.1 NO PROXIES FOR OR ENCUMBRANCES ON OPTIONED SHARES. Except
-------------------------------------------------
as contemplated by this Agreement, until the termination of this Agreement
pursuant to Section 10.1, Grantor shall not, directly or indirectly, (i) grant
any proxies (other than a revocable proxy granted in connection with a meeting
of stockholders) or enter into any voting trust or other agreement or
arrangement with respect to the voting of any Optioned Shares, (ii) sell,
assign, transfer, encumber or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to the direct or
indirect sale, assignment, transfer, encumbrance or other disposition of, any
Optioned Shares or (iii) seek or solicit any transaction or arrangement
described in clauses (i) and (ii). Grantor will notify Purchaser promptly (and
provide all details reasonably requested by Purchaser) if Grantor is approached
or solicited, directly or indirectly, by any person with respect to any of the
foregoing. Nothing herein shall be deemed to prevent or restrict (x) Grantor or
its Affiliates from voting its shares in its sole discretion on all matters,
except as otherwise agreed to between Grantor, its Affiliates, and BTH in the
Shareholders Agreement or otherwise, or between Grantor, its Affiliates and
Comcast in the Jones/Comcast Agreement or otherwise or (y) any Affiliate of
Grantor from taking or refraining from taking any other action not provided
herein or otherwise agreed to between Grantor, its Affiliates and BTH in the
Shareholders Agreement, the Jones/Comcast Agreement or otherwise or between
Grantor, its Affiliates and Comcast in the Jones/Comcast Agreement."
12. Amendment of Section 4.2. Section 4.2 is hereby deleted in its
------------------------
entirety and the following is substituted in lieu thereof:
"SECTION 4.2 FURTHER ASSURANCES. BTH (and its agent) and Grantor will
------------------
each execute and deliver or cause to be executed and delivered all further
documents and instruments and use their reasonable best efforts to secure such
consents and take all such further action as may be reasonably necessary in
order to consummate the transactions contemplated hereby or to
-10-
<PAGE>
enable Purchaser and BTH or Comcast, as applicable, to enjoy all benefits and
rights of the Optioned Shares."
13. Amendment of Section 6.1. Section 6.1 is hereby deleted in its
------------------------
entirety and the following is substituted in lieu thereof:
"SECTION 6.1 ACQUISITION FOR PURCHASER'S ACCOUNT'. Purchaser represents
-----------------------------------
and warrants to Grantor that as of the date hereof and the date of the Closing
the Optioned Shares to be acquired upon exercise of the Control Option will be
acquired by Purchaser as the agent for, in the case of a Section 3.1(a)(vi)
Exercise, Comcast's, and in all other instances BTH's own account and not with a
view to the public distribution thereof and will not be transferred except in
compliance with the Securities Act."
14. Amendment of Section 9.3(c). Section 9.3(c) is hereby deleted in its
---------------------------
entirety and the following is substituted in lieu thereof:
"(c) In connection with an exercise of rights pursuant to Section 9.1(d),
Purchaser may cause any or all of the Optioned Shares to be transferred of
record into the name of Purchaser, in the case of a Section 3.1(a)(vi) Exercise,
to Comcast and in the case of any other exercise, to BTH, or in any event, to
any of their respective nominees. After notice thereof, Grantor will promptly
give to the Purchaser (or its designee) copies of any notices or other
communications received by it with respect to the Optioned Shares registered in
the name of Grantor, and Purchaser will promptly give to Grantor copies of any
notices and communications received by Purchaser, to the extent the same have
been delivered to Purchaser (or Comcast, BTH or a nominee) with respect to any
Optioned Shares registered in the name of Purchaser (or Comcast, BTH or a
nominee)."
15. Amendment of Section 10.2(a). Section 10.2(a) is hereby deleted in
----------------------------
its entirety and the following is substituted in lieu thereof:
"SECTION 10.2 SUCCESSORS AND ASSIGNS. (a) The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors. No party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
written consent of the other parties hereto, provided that (i) Purchaser may
--------
assign its rights, but not its obligations, hereunder to any Eligible Assignee
(or an agent of such Eligible Assignee), (ii) Purchaser may assign its rights
and obligations hereunder as provided in Article VII, (iii) Purchaser may assign
its rights (but not its obligations) hereunder at any time after the delivery by
it of an Exercise Notice to Grantor if at the time of any such assignment
pursuant to this clause (iii) the assignee purchases the Optioned Shares
pursuant to Section 3.5(a) and (b) and (iv) Purchaser may, at the Closing of a
Section 3.1(a)(vi) Exercise and the consummation of the Jones/Comcast Closing,
assign all its rights and obligations hereunder to Comcast."
-11-
<PAGE>
16. Amendment of Section 10.4. Section 10.4 is hereby amended by (a)
-------------------------
deleting the address of Bell Canada International, Inc. in its entirety and
substituting in lieu thereof the following:
"BCI Telecom Holding Inc.
1000, rue de la Gauchetiere West
Suite 1100
Montreal, Quebec
Canada H3B 4Y8
Fax: 514-392-2342
Attention: Corporate Secretary
with copies to (unless the Initial Closing (as defined in the
BTH/Comcast Agreement) shall have occurred or the Jones/Comcast
Agreement shall have terminated):
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
Fax: 215-981-7794"
and (b) deleting the name and address of the Purchaser and substituting in lieu
thereof:
"The Bank of New York, as successor agent to
Morgan Guaranty Trust Company of New York
101 Barclay Street
Floor 12E
New York, NY 10286
Fax: 212-815-7181
Attention: Robert W. Rich, Assistant Vice President"
17. Amendment to Section 10.10. Section 10.10 is hereby deleted in its
--------------------------
entirety and the following is substituted in lieu thereof:
"SECTION 10.10 ENTIRE AGREEMENT. This Agreement, together with the
----------------
Jones/Comcast Agreement, the Shareholders Agreement (including the Agreement and
Amendment No. 1 to Shareholders Agreement) and the BTH/Comcast Agreement
constitutes the entire agreement between the parties with respect to the subject
matter of this Agreement and supersedes all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter of
this Agreement."
18. Amendment to Section 10.12. Section 10.12 is hereby deleted in its
--------------------------
entirety and the following is substituted in lieu thereof:
-12-
<PAGE>
"SECTION 10.12 AGENCY CAPACITY OF PURCHASER. Grantor expressly
----------------------------
acknowledges and agrees that Purchaser is acting solely as agent on behalf of,
in the case of a Section 3.1(a)(vi) Exercise, Comcast, and in all other
instances, BTH and not in a principal capacity. Grantor further acknowledges
and agrees that in executing and delivering this Agreement, making any payment,
delivering any notice or instruction, making any determination or taking any
other action provided for or contemplated herein, Purchaser is acting and shall
act solely upon the instruction and at the direction of, in the case of a
Section 3.1(a)(vi) Exercise, Comcast, and in all other instances, BTH."
19. Addition of Section 10.13. Immediately following Section 10.12, a new
-------------------------
Section 10.13 is hereby added as follows:
"SECTION 10.13 Termination of Jones/Comcast Agreement. All references to
--------------------------------------
the Jones/Comcast Agreement, the BTH/Comcast Agreement, the Jones/Comcast
Closing and Closing Date, Comcast and the Section 3.1(a)(vi) Exercise shall be
deemed deleted and of no force or effect if and at such time as the earlier to
occur of the Initial Closing under the BTH/Comcast Agreement and the date the
Jones/Comcast Agreement shall have been terminated."
-13-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their duly authorized representatives as of the day and year first
above written.
GLENN JONES GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
---------------------------
JONES INTERNATIONAL GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
---------------------------
JONES INTERNATIONAL, LTD.
By: /s/ Glenn R. Jones
------------------
JONES SPACE SEGMENT, INC.
By: /s/ Glenn R. Jones
------------------
JONES GLOBAL GROUP, INC..
By: /s/ Glenn R. Jones
------------------
JONES INTERDIGITAL, INC..
By: /s/ Glenn R. Jones
------------------
-14-
<PAGE>
JONES ENTERTAINMENT GROUP, LTD.
By: /s/ Glenn R. Jones
------------------
THE BANK OF NEW YORK, as successor agent to MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as agent for
BTH Telecom Holding Inc. f/k/a Bell Canada
International Inc. and
Comcast Corporation
By: /s/ Robert W. Rich
------------------
Assistant Vice President
This Amendment is consented to and approved of by the following:
BCI TELECOM HOLDING, INC.
By: /s/ Siim Vanaselja
------------------
Director
BTH (INTERCABLE) LIMITED
By: /s/ Christopher S. McKenzie
---------------------------
Director/President
COMCAST CORPORATION
By: /s/ Arthur R. Block
-------------------
-15-
<PAGE>
EXHIBIT 5
Execution Copy
AGREEMENT AND AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT
This AGREEMENT AND AMENDMENT No. 1 (this "Agreement and Amendment") is
entered into as of this 12 day of August 1998, and amends that certain
Shareholders Agreement dated as of December 20, 1994 (the "Shareholders
Agreement") by and among Jones International, Inc. ("International"), Glenn R.
Jones ("Jones"), Jones Intercable, Inc., a Colorado corporation (the "Company")
and BCI Telecom Holding Inc., a Canadian corporation, f/k/a Bell Canada
International Inc. ("BTH"), and is also entered into by BTH (US Cable) Limited,
a British Virgin Islands corporation, f/k/a Bell Canada International BVI III,
Limited ("US Cable") as assignee of BTH and by BTH (Intercable) Limited, a
British Virgin Islands corporation, f/k/a Bell Canada International BVI VI
Limited ("BTH Intercable" and together with BTH and US Cable, the "BTH
Entities") and the other Jones Entities (as defined herein).
WHEREAS, on December 20, 1994, International, Jones, the Company and BTH
entered into the Shareholders Agreement;
WHEREAS, BTH assigned its rights but not its obligations under the
Shareholders Agreement to US Cable by that certain assignment dated December 20,
1994;
WHEREAS, in connection with the execution and delivery of the Shareholders
Agreement, Glenn Jones Grantor Business Trust ("Trust"), Jones International
Grantor Business Trust ("JI Trust"), Jones Space Segment, Inc. ("Space"), Jones
Global Group, Inc. ("Global"), Jones Interdigital, Inc. ("Interdigital"), Jones
Entertainment Group, Ltd. ("Entertainment" and together with Jones,
International, Trust, JI Trust, Space, Global and Interdigital, the "Jones
Entities") and Morgan Guaranty Trust Company of New York, as agent for BTH and
BTH Intercable entered into certain option agreements each dated as of December
20, 1994 and amended and restated as of the date hereof, granting an option (the
"Control Option") to purchase the shares of Common Stock, par value $.01 per
share (the "Common Stock"), of the Company owned beneficially or of record by
the Jones Entities (the "Control Shares");
WHEREAS, the Jones Entities, BTH, through its agent, have entered into an
amendment to the foregoing option agreements (as amended, the "Option
Agreements") to provide for, among other things, a new Exercise Period (as
defined therein) which has caused the Control Option to become currently
exercisable as provided in Section 3.1(a)(vi) of the Option Agreements (the
"Accelerated Exercise");
WHEREAS, the Shareholders Agreement currently provides that upon the
consummation of the purchase and sale of the Optioned Shares (as defined
therein) such Shareholders Agreement terminates with the proviso that certain
provisions of such Shareholders Agreement shall survive such termination;
<PAGE>
WHEREAS, Comcast Corporation, a Pennsylvania corporation ("Comcast"), and
the BTH Entities have entered into a Purchase and Sale Agreement, dated as of
May 22, 1998, providing, among other things, for the acquisition by Comcast of
the Control Shares at such time that the BTH Entities are entitled to acquire
the Control Shares pursuant to the Control Option, which agreement has been
amended and restated on the date hereof, in connection with the Accelerated
Exercise (the "Comcast/BTH Agreement");
WHEREAS, the Jones Entities and Comcast have entered into an Agreement,
dated as of the date hereof, relating to certain arrangements between the Jones
Entities and Comcast concerning the exercise of the Control Option (the
"Comcast/Jones Agreement");
WHEREAS, the parties hereto desire to amend the Shareholders Agreement to
amend the termination provision of the Shareholders Agreement so that in the
event the Optioned Shares are purchased pursuant to the Accelerated Exercise
certain provisions of the Shareholders Agreement shall not survive such
termination; and
WHEREAS, the parties hereto desire to set forth certain other agreements
relating to the consummation of the transactions contemplated by the
Comcast/Jones Agreement and the Comcast/BTH Agreement;
THEREFORE, in consideration of the mutual covenants contained herein, and
intending to be legally bound hereby, the parties agree as follows.
ARTICLE I
---------
AMENDMENT TO SHAREHOLDERS AGREEMENT
1.1. Definitions. All terms used but not otherwise defined herein shall have
-----------
the same meanings as ascribed to them in the Shareholders Agreement.
1.2. Amendment to Section 1.1. Section 1.1 of the Shareholders Agreement is
------------------------
hereby amended by deleting therefrom the definitions of "Option Agreements" and
"Option Termination Date" in their entirety and substituting in lieu thereof
the following:
"Option Termination Date" means the earlier of (i) the date on which the
Control Option terminates pursuant to Section 3.6 of the Option Agreements, or
otherwise, (ii) the date on which BTH (or its agent) purchases the Option Shares
pursuant to the Option Agreements or (iii) the Closing, as defined in the
Comcast/Jones Agreement, and the Simultaneous Closing, as defined in the
Comcast/BTH Agreement, shall have occurred.
"Option Agreements" means the Option Agreements dated as of the Closing
Date between Bank of New York, as successor agent to Morgan Guaranty Trust
Company of New York, acting as agent for Investor and in the case of a Section
3.1(a)(vi) Exercise, for Comcast,
-2-
<PAGE>
and each of Jones International Grantor Business Trust, Glenn Jones Grantor
Business Trust, Jones Space Segment, Inc., Jones Global Group, Inc., Jones
Interdigital Inc. and Jones Entertainment Group, Ltd., as amended on August 12,
1998.
1.3. Amendment to Section 3.10. Section 3.10 of the Shareholders Agreement is
-------------------------
hereby amended by adding the following to the end of such section:
"Notwithstanding the foregoing, the parties hereto agree that this Section
3.10 shall not prohibit any of the parties from disclosing all such
documents and information received after August 12, 1998 and until the
earlier to occur of (x) the Closing of the transactions contemplated by
that certain Agreement, dated August 12, 1998, by and among Comcast
Corporation, a Pennsylvania corporation ("Comcast") Jones International and
certain JI Group Entities named therein (the "Comcast/Jones Agreement") or
(y) the expiration or termination of the Comcast/Jones Agreement from the
other parties to this Agreement (and Affiliates of such other parties),
including any information provided by the Company to any Investor Nominee,
to Comcast, and to the officers, directors, employees, agents,
representatives and advisors (including, without limitation, legal and
financial advisors) of Comcast.
1.4. Amendment to Section 3.5. Effective as of and conditioned upon the
------------------------
consummation of the transactions contemplated by the Jones/Comcast Agreement.
Section 3.5 of the Shareholders Agreement shall be deleted in its entirety and
the following substituted in lieu thereof:
"3.5 Programming Services. Notwithstanding any other provision in this
--------------------
Agreement to the contrary: (a) The Bell International Group Entities
shall have the right to distribute, on a full-time (or, if requested
from time to time by Investor, part-time to be extended or restored,
as applicable to full time upon Investor's request), daily basis,
programming packaged (as opposed to brokered) by, created by or
created primarily for a Bell International Group Entity ("INVESTOR
PROGRAMMING") on such number of channels (not to exceed two at any one
time) on the Systems as Investor may designate from time to time.
(b) Prior to exercising its distribution right with respect to any
programming under this Section 3.5, the relevant Bell International
Group Entity (a "PROGRAMMER") will present to the Board a reasonably
detailed business plan that, among other things, describes (i) the
general content of such programming, (ii) the marketing strategy for
such programming, including service level (such as basic, tier or a la
carte) and (iii) pricing for such service levels. The Investor
Programming shall be carried and priced by the Intercable Group
Entities on such level or levels
-3-
<PAGE>
of services as such programming is intended to be carried under the
business plan for such programming.
(c) Notwithstanding the rights granted pursuant to paragraph (a)
above:
(i) the Intercable Group Entities shall not be required to delete
from any System any programming acquired from any third-party
programmer prior to the expiration of the term of the program carriage
agreement with such third-party programmer in order to carry any
Investor Programming,
(ii) in the event there is insufficient channel capacity to carry
Investor Programming, carriage of such Investor Programming on a
System shall be given priority over any third party programming not
then carried by such System and over any third party programming then
carried by the System at such time as the initial or then current
renewal term, as applicable, is scheduled to expire, provided that (x)
such priority shall not apply to off-air programming carried by the
four major broadcast networks or as mandated by law, or the 20 most
widely viewed third party programs as then carried by the System at
the time as reported by Cablevision magazine, and (y) in addition to
the foregoing requirements, the Company shall use its reasonable best
efforts to add Investor Programming to the Systems whenever
opportunities to do so arise, and
(iii) Investor shall give the Company at least four months' prior
notice of any proposed commencement or termination of use of any
channel.
(d) During the Validation Period (as defined herein), the license
fee payable by the Intercable Group Entities for any unit of Investor
Programming ("NEW PROGRAMMING") shall be such license fee as the
Programmer establishes in good faith based on its reasonable estimate
of the market value of such New Programming. A Programmer shall notify
the Company and the Disinterested Directors in writing promptly
following the end of the Validation Period whether the Programmer has
entered into an agreement providing for (a) the distribution of such
New Programming by a cable television operator or other distributor of
video programming (a "DISTRIBUTOR") having at least 400,000
subscribers ("VALIDATING DISTRIBUTOR") and (b) the payment of a
license fee by such Validating Distributor at a rate equal to or
greater than the license fee payable by the Intercable Group Entities
("VALIDATING
-4-
<PAGE>
PROGRAMMING AGREEMENT"). If no Validating Programming Agreement has
been entered into during the Validation Period, the Company or any
Disinterested Director may, by written notice given within sixty (60)
days after receipt by the Company and the Disinterested Directors of
the above-referenced notification, require that such Programmer reduce
the license fee payable by the Intercable Group Entities for such New
Programming to the greater of (i) a license agreement approved by the
Disinterested Directors, (ii) the average license fee charged by the
applicable Programmer to all Distributors for such New Programming and
(iii) the Agreed Rate in effect at such time. For purposes of this
Section 3.5, "AGREED RATE" means, at any time, the rate set forth in
the Affiliate Agreement between Mind Extension University, Inc. and
the Company dated December 28, 1993, as amended as of June 1, 1994.
Thereafter, the license fee payable by the Intercable Group Entities
for such New Programming shall be subject to such adjustments as are
similar to adjustments in the license fee permitted by the Validating
Programming Agreement or, if there is no such agreement in effect, by
the programming agreement pursuant to which such New Programming is
carried by the largest Distributor serving fewer than 400,000
subscribers. A Programmer may elect at any time to terminate carriage
of such unit of New Programming upon not less than ninety days prior
written notice to the Company if it does enter into a Validating
Programming Agreement during the Validation Period. "VALIDATION
PERIOD" shall mean, as to any New Programming, the fifteen (15) month
period commencing with the first month with respect to which a license
fee is payable by an Intercable Group Entity for the right to
distribute such New Programming.
(e) The Intercable Group Entities shall carry Investor
Programming on the Systems until December 20, 2009 (or the expiration
date of the applicable programming agreement with the Company) in
accordance with this Section 3.5.
(f) For purposes of this Section 3.5 the term "DISINTERESTED
DIRECTORS" shall mean any director who would be considered a
"disinterested director" for the purposes of Section 7-108-501 of the
Colorado Business Corporation Act.
(g) Notwithstanding anything to the contrary contained in this
Agreement, Investor may assign on behalf of itself and the Bell
International Group Entities its rights under this Section 3.5 to
Comcast."
-5-
<PAGE>
1.5. Upon the amendment to Section 3.5 of the Shareholders Agreement
contained in Section 1.4 hereof becoming effective the Company shall pay to
Jones and International $25,000,000 in immediately available funds to such bank
account or accounts as Jones shall designate in consideration of the termination
of the JI Group Entities' rights under Section 3.5 of this Agreement.
1.6. General. Except as expressly modified by this Agreement and
-------
Amendment, the provisions of the Shareholders Agreement shall remain in full
force and effect. Except as set forth in Section 2.2, below, execution and
delivery of this Agreement and Amendment, the Option Agreements and the
Comcast/Jones Agreement shall not constitute or be deemed to be a waiver by any
party of (a) any rights or claims that such party had or may have under the
Shareholders Agreement as amended hereby or (b), in the event that the
Comcast/Jones Agreement is terminated, any rights or claims that the Jones
Entities or the Company had or may have against the BTH Entities by reason of
the execution, delivery or performance of the Comcast/BTH Agreement.
ARTICLE II
----------
OTHER AGREEMENTS
2.1. Agreement to Stay Proceedings. In consideration of Comcast's execution
-----------------------------
and delivery of the Comcast/Jones Agreement and the Comcast/BTH Agreement, each
of the parties hereto hereby agrees to take any and all actions and refrain from
taking any and all actions necessary or advisable to seek a stay of any
proceedings relating to that certain lawsuit brought by BTH against Jones
Intercable, Inc., Jones International, Ltd., Jones Internet Channel, Inc. and
Glenn R. Jones, which was filed before the U.S. District Court for the District
of Colorado (the "Litigation"), including, without limitation, any hearings or
proceedings relating to any damage claims relating to the subject matter of the
Litigation and the appeal of the order entered on May 5, 1998 until the first to
occur of (i) the date on which both the Closing (as defined in the Comcast/Jones
Agreement) and the Simultaneous Closing (as defined in the Comcast/BTH
Agreement) shall have occurred, at which time the parties shall dismiss the
Litigation with prejudice or (ii) the termination of the Comcast/Jones
Agreement.
2.2. General Release. In consideration of Comcast's execution and
---------------
delivery of the Comcast/Jones Agreement and the Comcast/BTH Agreement each of
(i) the Jones Entities and the Company and (ii) each of the BTH Entities, in the
case of each of (i) and (ii), on behalf of itself and each of its Affiliates
(including the Company and its subsidiaries) (the "Releasing Parties"),
effective as of and conditioned upon the consummation of both the Closing (as
defined in the Comcast/Jones Agreement) and the Simultaneous Closing (as defined
in the Comcast/BTH Agreement), except as otherwise provided below, releases and
forever holds harmless, and waives and relinquishes from and against all
obligations, actions, causes of action, claims, demands, damages, costs,
expenses and liabilities whatsoever, at law or in equity, known or
-6-
<PAGE>
unknown, fixed or contingent, which the Releasing Parties ever had, now have or
which their successors, predecessors, assigns, heirs, executors and
administrators hereafter can, shall or may have against any of the BTH Entities
and the Jones Entities, their Affiliates (including the Company and its
subsidiaries), officers, directors, employees, shareholders and their successors
or assigns (the "Released Parties") on account or arising out of any matter,
cause or thing whatsoever from the beginning of the world to the date on which
the Closing Date (as defined in the Comcast/Jones Agreement) and the
Simultaneous Closing Date (as defined in the Comcast/BTH Agreement) shall both
have occurred. Notwithstanding the foregoing nothing in this Section 2.2 shall
release any obligations, rights, actions, causes of action, claims, demands,
damages, costs, expenses or liabilities of the Released Parties to the Releasing
Parties under the Option Agreements or with respect to any judgment previously
obtained in any court of competent jurisdiction.
2.3. (a) Tax Matters. (a) The Company shall and International shall cause
Jones Education Company ("Education") and Entertainment to provide BTH with
certification and file notice(s) with the Internal Revenue Service within 10
days after the request of BTH regarding any disposition undertaken in connection
with the Comcast/BTH Agreement, which certification or notification, as the case
may be, shall attest to the fact that the BTH Entities' interest in such
corporations does not constitute a "real property interest" within the meaning
of the Internal Revenue Code and shall otherwise conform with the requirements
of United States Treasury Regulation 1.897-2(h).
(b) Promptly upon request the Company shall, and International shall
cause Education and Entertainment to, accord the BTH Entities reasonable access
to the books and records and employees of the Company, Education and
Entertainment to enable the BTH Entities to confirm whether or not their
respective investments in such entities will constitute "excluded property"
within the meaning of the Income Tax Act (Canada) (i.e., that no more than 10%
of the assets of such entities consist of passive assets) as of the Simultaneous
Closing Date or the Initial Closing Date and the Final Closing Date, as the case
may be.
2.4. Termination of Certain Agreements.The BTH Entities, the Jones Entities
---------------------------------
and the Company agree and acknowledge, on their own behalf and on behalf of
their respective Affiliates, that the Secondment Agreement, the Fee Sharing
Agreement, the Financial Services Agreement and the Supply and Services
Agreement (each as defined in the Shareholders Agreement) shall terminate as of
and conditioned upon the consummation of the Closing and the Simultaneous
Closing; provided that anything contained in Section 2.2 to the contrary
--------
notwithstanding, any moneys accrued for the account of BTH prior to termination
of such agreements shall be paid to BTH at the Closing or as soon as is
reasonably practicable thereafter.
2.5. Approval of this Agreement. Each of the parties to this Agreement and
--------------------------
Amendment represents and warrants to the other parties hereto that (i) if it is
a corporation, it is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its
-7-
<PAGE>
incorporation or organization, (ii) if it is a trust, the trust agreement
governing its operation is in full force and effect, (iii) it has the power and
authority to execute, deliver and perform this Agreement and Amendment and (iv)
this Agreement and Amendment has been duly executed and delivered by it and is a
valid and binding agreement by it. The parties hereto hereby agree with each
other that (i) this Agreement and Amendment, (ii) the termination of Jones'
employment with Company pursuant to the form of Termination Agreement presented
to the Board of Directors of the Company and (iii) the assumption by an
Affiliate of a Jones Entity of the Company's rights and obligations under that
certain lease dated December 23, 1997 by and between the Company and PNC Leasing
Corp. shall be subject to the approval of the Joint Nominees (as such term is
defined in the Shareholders Agreement) and that such approval shall satisfy the
requirements of Section 3.6 of the Shareholders Agreement. The Company
represents and warrants to the other parties to this Agreement that this
Agreement and Amendment has been approved by a majority of the Joint Nominees at
a meeting duly called and held for such purpose.
ARTICLE III
-----------
MISCELLANEOUS
3.1. General. This Agreement shall be governed by and construed and
-------
enforced in accordance with the internal laws (as opposed to the conflicts of
laws provisions) of the State of Colorado. The agreement of the parties, which
is comprised of this Agreement and Amendment and the Shareholders Agreement,
sets forth the entire agreement and understanding between the parties relating
to the subject matter hereof and supersedes any prior agreement or
understanding, written or oral, relating to the subject matter of this Agreement
and Amendment and the Shareholders Agreement.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement and Amendment to
be executed by their duly authorized representatives as of the day and year
first above written.
JONES INTERCABLE, INC.
By: /s/ Kevin P. Coyle
------------------
/s/ Glenn R. Jones
------------------
Glenn R. Jones
JONES INTERNATIONAL, LTD.
By: /s/ Glenn R. Jones
------------------
GLENN JONES GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
---------------------------
JONES INTERNATIONAL GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
---------------------------
JONES SPACE SEGMENT, INC.
By: /s/ Glenn R. Jones
------------------
JONES GLOBAL GROUP, INC.
-9-
<PAGE>
By: /s/ Glenn R. Jones
------------------
JONES INTERDIGITAL, INC.
By: /s/ Glenn R. Jones
------------------
JONES ENTERTAINMENT GROUP, LTD.
By: /s/ Glenn R. Jones
------------------
BCI TELECOM HOLDING INC.
By: /s/ Siim Vanaselja
---------------------
Director
BTH (US CABLE) LTD.
By: /s/ Christopher S. McKenzie
------------------------------
Director/President
BTH (INTERCABLE) LIMITED
By: /s/ Christopher S. McKenzie
------------------------------
Director/President
-10-
<PAGE>
EXHIBIT 6
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT is made this 12th day of August, 1998, by and
between Jones Intercable, Inc., a Colorado corporation (the "Company"), and
Glenn R. Jones ("Jones").
RECITALS
--------
A. The Company and Jones are parties to that certain Employment Agreement
dated December 20, 1994 (the "Employment Agreement"), pursuant to which the
Company has agreed to employ Jones as Chairman and Chief Executive Officer of
the Company for a term ending on December 20, 2002, unless earlier terminated as
provided therein.
B. Jones and certain of his affiliates (the "Jones Entities") and the Bank
of New York, as successor agent to Morgan Guaranty Trust Company of New York, as
agent for BCI Telecom Holding Inc., a Canadian corporation f/k/a Bell Canada
International Inc. ("BTH"), and BTH (Intercable) Limited, a British Virgin
Islands corporation f/k/a Bell Canada International BVI VI Limited ("BTH
Intercable" and together with BTH, the "BTH Entities"), have entered into
certain option agreements, each dated as of December 20, 1994 (the "Original
Option Agreements"), granting an option (the "Control Option") to purchase
shares of Common Stock, par value $.01 per share (the "Control Shares"), of the
Company owned beneficially or of record by the Jones Entities. Under the
Original Option Agreements, the Control Option does not become exercisable until
December 20, 2001, except under limited circumstances not currently pertinent.
C. Contemporaneously with the execution and delivery of this Agreement,
the Jones Entities and the BTH Entities are amending and restating the Original
Option Agreements (as amended and restated, the "Option Agreements") to provide
for the immediate acceleration of the exercise of the Control Option (the "Early
Exercise") and the ultimate acquisition of the Control Shares by Comcast
Corporation ("Comcast"). Such Early Exercise is to be effected pursuant to and
at the closing of the transactions contemplated by that certain Agreement dated
the date hereof by and among Comcast and the Jones Entities (the "Comcast
Closing").
D. The Company and Jones desire to terminate the Employment Agreement and
the rights and obligations of the parties thereunder at the consummation of the
purchase of the Optioned Shares (as defined in the Option Agreements) pursuant
to the Early Exercise, and the Company has agreed to pay to Jones a termination
payment as provided herein at the time of such termination, all as set forth
herein.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. TERMINATION OF EMPLOYMENT. Effective as of and conditioned upon the
-------------------------
occurrence of the Comcast Closing, the Company terminates Jones as an employee
of the Company.
<PAGE>
2. TERMINATION PAYMENT. Effective as of and conditioned upon the
-------------------
occurrence of the Comcast Closing, the Employment Agreement shall terminate and
the Company shall pay to Jones, and Jones agrees to accept in full satisfaction
of his rights under the Employment Agreement, an amount determined in accordance
with Schedule A attached hereto (the "Termination Payment"). Such amount shall
be paid to Jones in immediately available funds to a bank account designated by
Jones at or prior to the time of such termination.
3. RELEASE OF CLAIMS. Upon the termination of the Employment Agreement
-----------------
and payment of the Termination Payment, each of Jones and the Company releases
and waives any claims, damages and causes of action either may have against the
other arising out of or related to the Employment Agreement and the termination
thereof contemplated by this Agreement.
4. AMENDMENT; WAIVER. Any provision of this Agreement may be amended or
-----------------
waived if, but only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by each party to this Agreement, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
5. GOVERNING LAW. This Agreement shall be construed in accordance with
-------------
and governed by the laws of the State of Colorado, without regard to the
conflicts of law rules of such state.
6. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
----------------
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, between the parties with
respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
JONES INTERCABLE, INC.
By: /s/ Kevin P. Coyle
---------------------------------
Name: Kevin P. Coyle
Title: Group Vice President/Finance
/s/ Glenn R. Jones
-----------------------------------
Glenn R. Jones
<PAGE>
SCHEDULE A
----------
(a) Jones shall be entitled to a lump sum payment equal to the total
cumulative Base Salary (as such term is defined in the Employment Agreement)
that would have been payable to Jones through December 20, 2001 (the "Payout
Period"), plus 6% of such amount that would have been payable by the Company
during the Payout Period as a matching contribution to Jones' Deferred
Compensation Plan; provided, however, that (i) for purposes of determining the
-------- -------
Increase Percentage (as defined in the Employment Agreement) for any year in the
Payout Period, the percentage increase in the Consumer Price Index for the
Denver Metropolitan Area shall be deemed to be the average of such increases for
the five calendar years immediately preceding the date of this Termination
Agreement; (ii) the amount of such lump sum payment shall be discounted to
present value at the rate of 6.25%; and (iii) under no circumstances shall the
Company be obligated to pay to Jones more than the maximum amount that Jones
would be entitled to receive without causing any payment pursuant to the
Termination Agreement or otherwise to be nondeductible by the Company because of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code").
(b) Jones and the Company agree that the five (5) year average
increase in the Consumer Price Index for the Denver Metropolitan Area is 3.95%
and that such percentage shall be used, for purposes of the calculation
described in subsection (a) above of this Schedule A, in determining Jones' Base
Salary for the periods included in the Payout Period. Further, Jones and the
Company agree that Jones' Base Salary for the period December 20, 1997 through
December 19, 1998 is $2,806,714.
(c) If the payment to Jones hereunder or otherwise would be
nondeductible because of Section 280G of the Code, Jones may elect which and how
much of such payments shall be eliminated or reduced and shall notify the
Company of such election prior to the time payment is made. If no such election
is made by Jones, the Company may elect which and how much of such payments
shall be eliminated or reduced to maximize the amount of payments made to Jones
without causing any payment to be nondeductible because of Section 280G of the
Code.
