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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to ________
Commission file number: 0-16939
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
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(Exact name of registrant as specified in its charter)
Colorado 84-1069504
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State of Organization (IRS Employer
Identification No.)
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P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
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(Address of principal executive office and Zip Code (Registrant's telephone no. including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Interests
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Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
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State the aggregate market value of the voting stock held by non-affiliates of
the registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
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DOCUMENTS INCORPORATED BY REFERENCE: None
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PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Jones Spacelink Income/Growth Fund 1-A, Ltd. (the
"Partnership") is a Colorado limited partnership that was formed pursuant to the
public offering of limited partnership interests in the Jones Spacelink
Income/Growth Fund 1 Limited Partnership Program (the "Program"). Jones
Intercable, Inc. ("Intercable"), a Colorado corporation, is the general partner
of the Partnership (the "General Partner"). On December 20, 1994, Intercable
acquired substantially all of the assets of Jones Spacelink, Ltd. ("Spacelink"),
including its general partner interest in the Partnership. All references herein
to the "General Partner" relating to matters prior to December 20, 1994 are to
Spacelink, and all references to the "General Partner" relating to matters after
that date are to Intercable. The Partnership was formed for the purpose of
acquiring and operating cable television systems. The Partnership owns the cable
television systems serving the areas in and around the communities of Bluffton,
Decatur, Monroe, Auburn, Butler, Uniondale, Waterloo and Garrett and certain
unincorporated areas of Wells, Allen, Noble, Adams and DeKalb Counties, all in
the State of Indiana (the "Bluffton System"), the community of Ripon and
adjacent areas of Fond-du-Lac County, Wisconsin (the "Ripon System"); and the
community of Lake Geneva and adjacent areas of Walworth County, Wisconsin (the
"Lake Geneva System"). The Bluffton System, the Ripon System and the Lake Geneva
System may collectively hereinafter be referred to as the "Systems."
CABLE TELEVISION SERVICES. The Systems offer to their subscribers
various types of programming, which include basic service, tier service, premium
service, pay-per-view programs and packages including several of these services
at combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites. Basic
service also usually includes programs originated locally by the system, which
may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or entertainment
nature. FM radio signals are also frequently distributed to subscribers as part
of the basic service.
The Systems offer tier services on an optional basis to their
subscribers. A tier generally includes most of the cable networks such as
Entertainment and Sports Programming Network (ESPN), Cable News Network (CNN),
Turner Network Television (TNT), Family Channel, Discovery and others, and the
cable television operators buy tier programming from these networks. The Systems
also offer a package that includes the basic service channels and the tier
services.
The Systems also offer premium services to their subscribers, which
consist of feature films, sporting events and other special features that are
presented without commercial interruption. The cable television operators buy
premium programming from suppliers such as HBO, Showtime, Cinemax or others at a
cost based on the number of subscribers the cable operator serves. Premium
service programming usually is significantly more expensive than the basic
service or tier service programming, and consequently cable operators price
premium service separately when sold to subscribers.
The Systems also offer to subscribers pay-per-view programming.
Pay-per-view is a service that allows subscribers to receive single programs,
frequently consisting of motion pictures that have recently completed their
theatrical exhibitions and major sporting events, and to pay for such service on
a program-by-program basis.
REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. In addition, advertising
sales are becoming a significant source of revenue for the Systems. As a result
of the adoption by the FCC of new rules under the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), and several rate
regulation orders, the Systems' rate structures for cable programming services
and equipment have been revised. See Regulation and Legislation. At December 31,
1994, the Systems' monthly basic service rates ranged from $7.76 to $11.00,
monthly basic and
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tier ("basic plus") service rates ranged from $18.94 to $21.77 and monthly
premium services ranged from $1.99 to $10.00 per premium service. Charges for
additional outlets have been eliminated, and charges for remote controls and
converters have been "unbundled" from the programming service rates. In
addition, the Partnership earns revenues from the Systems' pay-per-view programs
and advertising fees. Related charges may include a nonrecurring installation
fee that ranges from $4.66 to $40.00; however, from time to time the Systems
have followed the common industry practice of reducing or waiving the
installation fee during promotional periods. Commercial subscribers such as
hotels, motels and hospitals are charged a nonrecurring connection fee that
usually covers the cost of installation. Except under the terms of certain
contracts with commercial subscribers and residential apartment and condominium
complexes, the subscribers are free to discontinue the service at any time
without penalty. For the year ended December 31, 1994, of the total fees
received by the Systems, basic service and tier service fees accounted for
approximately 75% of total revenues, premium service fees accounted for
approximately 14% of total revenues, pay-per-view fees were approximately .5% of
total revenues, advertising fees were approximately 2.5% of total revenues and
the remaining 8% of total revenues came principally from equipment rentals,
installation fees and program guide sales. The Partnership is dependent upon the
timely receipt of service fees to provide for maintenance and replacement of
plant and equipment, current operating expenses and other costs of the Systems.
The Partnership's business consists of providing cable television
services to a large number of customers, the loss of any one of which would have
no material effect on the Partnership's business. Each of the Systems has had
some subscribers who later terminated the service. Terminations occur primarily
because people move to another home or to another city. In other cases, people
terminate on a seasonal basis or because they no longer can afford or are
dissatisfied with the service. The amount of past due accounts in the Systems is
not significant. The General Partner's policy with regard to past due accounts
is basically one of disconnecting service before a past due account becomes
material.
The Partnership does not depend to any material extent on the
availability of raw materials; it carries no significant amounts of inventory
and it has no material backlog of customer orders. The Partnership has no
employees because all properties are managed by employees of the General
Partner. The General Partner has engaged in research and development activities
relating to the provision of new services but the amount of the Partnership's
funds expended for such research and development has never been material.
Compliance with Federal, state and local provisions that have been
enacted or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Partnership.
FRANCHISES. The Systems are constructed and operated under
non-exclusive, fixed-term franchises or other types of operating authorities
(referred to collectively herein as "franchises") granted by local governmental
authorities. The Systems' franchises require that franchise fees ranging from 3%
to 5% of gross revenues of the cable system and, with respect to the Ripon
System, an annual $1,000 per year fee, be paid to the governmental authority
that granted the franchise, that certain channels be dedicated to municipal use,
that municipal facilities, hospitals and schools be provided cable service free
of charge and that any new cable plant be substantially constructed within
specific periods. (See Item 2 for a range of franchise expiration dates of the
Systems.)
The responsibility for franchising of cable television systems
generally is left to state and local authorities. There are, however, several
provisions in the Communications Act of 1934, as amended, that govern the terms
and conditions under which cable television systems provide service, including
the standards applicable to cable television operators seeking renewal of a
cable television franchise. In addition, the 1992 Cable Act also made several
procedural changes to the process under which a cable operator has not
substantially complied with the material terms of the franchise, has not
provided reasonable service in light of the community's needs, does not have the
financial, legal and technical ability to provide the services being proposed
for the future, or has not presented a reasonable proposal for future service. A
final decision of non-renewal by the franchising authority is appealable in
court. The General Partner and its affiliates recently have experienced lengthy
negotiations with some franchising authorities for the granting of franchise
renewals and transfers. Some of the issues involved in
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recent renewal negotiations include rate reregulation, customer service
standards, cable plant upgrade or replacement and shorter terms of franchise
agreements. The inability of the Partnership to renew a franchise, or lengthy
negotiations or litigation involving the renewal process could have an adverse
impact on the business of the Partnership.
COMPETITION. Cable television systems currently experience competition
from several sources, but two technologies, Multichannel Multipoint Distribution
Service ("MMDS") systems, commonly called wireless cable systems, and Direct
Broadcast Satellite ("DBS") systems, which distribute programming to home
satellite dishes, currently pose the greatest potential threat to the cable
television industry.
MMDS systems will likely focus on providing service to residents of
rural areas that are not served by cable television systems, but providers of
programming via MMDS systems will generally have the potential to compete
directly with cable television systems in urban areas as well, and in some areas
of the country, MMDS systems are now in direct competition with cable television
systems. To date, the Partnership has not lost a significant number of
subscribers, nor a significant amount of revenue, to MMDS operators competing
with its cable television systems.
DBS operators deliver premium channel services and specialized
programming to subscribers by high-powered DBS satellites on a wide-scale basis,
and two major companies began operations in 1994. Subscribers are able to
receive DBS services virtually anywhere in the United States with a rooftop or
wall-mounted antenna. In some instances, DBS systems may serve as a complement
to cable television operations by enabling cable television operators to offer
additional channels of programming without the construction of additional cable
plant. DBS companies use video compression technology to increase the channel
capacity of their satellite systems to provide a wide variety of program
services that are competitive with those of cable television systems.
Cable television systems also compete with broadcast television,
private cable television systems known as Master Antenna Television ("MATV"),
Satellite Master Antenna Television ("SMATV") and Television Receive-Only Earth
Stations ("TVRO"). MATV and SMATV generally serve multi-unit dwellings such as
condominiums, apartment complexes and private residential communities, and TVROs
are satellite receiving antenna dishes that are used by "backyard users."
There is also potential competition from an emerging technology, Local
Multipoint Distribution Service ("LMDS"). When it is authorized for service, the
LMDS, sometimes referred to as cellular television, could have the capability of
delivering approximately 50 channels, or if two systems were combined 100
channels, of video programming to a subscriber's home, which capacity could be
increased by using video compression technology. The General Partner believes
that there are not any current fully operational LMDS systems.
Although the Systems have not yet encountered competition from a
telephone company entering into the business of providing video services to
subscribers, the Systems could potentially face competition from telephone
companies doing so. A Federal cross-ownership restriction has historically
limited entry into the cable television business by potentially strong
competitors such as telephone companies. This restriction, which is contained in
the 1984 Cable Act, has generally prohibited telephone companies from owning or
operating cable television systems within their own telephone service areas, but
several recent court decisions have eliminated this restriction. In addition,
the FCC is authorizing telephone companies to provide video dialtone service
within their service areas. Legislation is also pending in Congress that would
permit telephone companies to provide video programming through separate
subsidiaries. The General Partner cannot predict at this time to what extent
current restrictions will be modified to permit telephone companies to provide
cable television services within their own service areas in competition with
cable television systems. See Regulation and Legislation, Ownership and Market
Structure for a description of the potential participation of the telephone
industry in the delivery of cable television services. Entry into the market by
telephone companies as direct competitors of the Systems could adversely impact
the profitability of the Systems. If a telephone company were to become a direct
competitor of the Partnership in an area served by a Partnership System, the
Partnership could be at a competitive
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disadvantage because of the relative financial strength of a telephone company
compared to the Partnership. Depending on a number of factors, such competition
could also result in cable television systems providing the same types of
services now provided by the telephone industry.
The FCC has established a new wireless telecommunications service known
as Personal Communications Service ("PCS"). It is envisioned that PCS would
provide portable non-vehicular mobile communications services similar to that
available from cellular telephone companies, but at a lower cost. PCS would be
delivered by placing numerous microcells in a particular area to be covered,
accessible to both residential and business customers. Because of the need to
link the many microcells necessary to deliver this service economically, many
parties are investigating integration of PCS with cable television operations.
Several cable television multiple systems operators and others, including
affiliates of the General Partner, hold or have requested experimental licenses
from the FCC to test PCS technology. The FCC has established spectrum
auctioning procedures for PCS licenses and the licenses are being auctioned in
a series of auction events.
Cable television franchises are not exclusive, so that more than one
cable television system may be built in the same area (known as an "overbuild"),
with potential loss of revenues to the operator of the original cable television
system. The Systems currently face no direct competition from other cable
television operators.
COMPETITION FOR SUBSCRIBERS IN THE PARTNERSHIP'S SYSTEMS. Following is
a summary of competition from DBS, MMDS, SMATV and TVRO operators in the
Systems' franchise areas:
Bluffton System: One MMDS operator operates in the system's
franchise area but does not provide significant
competition. There are approximately seven TVRO
dealers and one microwave delivered service in the
franchise area; however, their rates are
substantially higher than the rates of the Bluffton
System.
Lake Geneva System: There are TVRO dishes in the system's
service area, but the system has not lost a
significant number of subscribers to TVRO services.
DBS is available in the system's service area, but
it does not currently provide significant
competition.
Ripon System: DBS is available in the system's service area, but
it does not currently provide significant
competition.
REGULATION AND LEGISLATION. The cable television industry is regulated
through a combination of the Federal Communications Commission ("FCC"), some
state governments, and most local governments. In addition, the Copyright Act of
1976 imposes copyright liability on all cable television systems. Cable
television operations are subject to local regulation insofar as systems operate
under franchises granted by local authorities.
Cable Television Consumer Protection and Competition Act of 1992. On
October 5, 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The 1992
Cable Act generally allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States, including
those owned and managed by the General Partner, are subject to rate regulation
of basic cable services. In addition, the 1992 Cable Act allows the FCC to
regulate rates for non-basic service tiers other than premium services in
response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and non-basic services. The FCC's rules became effective on September 1,
1993.
In compliance with these rules, the General Partner reduced rates
charged for certain regulated services effective September 1, 1993. These
reductions resulted in some decrease in revenues and operating income before
depreciation and amortization; however, the decrease was not as severe as
originally anticipated. The General Partner has undertaken actions to mitigate a
portion of these reductions primarily through (a) new service
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offerings in some systems, (b) product re-marketing and re-packaging and (c)
marketing efforts directed at non-subscribers.
On February 22, 1994, however, the FCC adopted several additional rate
orders including an order which revised its earlier-announced regulatory scheme
with respect to rates. The FCC's new regulations generally require rate
reductions, absent a successful cost-of-service showing, of 17% of September 30,
1992 rates, adjusted for inflation, channel modifications, equipment costs, and
increases in programming costs. However, the FCC held rate reductions in
abeyance in certain systems. The new regulations became effective on May 15,
1994, but operators could elect to defer rate reductions to July 14, 1994, so
long as they made no changes in their rates and did not restructure service
offerings between May 15 and July 14.
On February 22, 1994, the FCC also adopted interim cost-of-service
regulations. Rate reductions will not be required where it is successfully
demonstrated that rates for basic and other regulated programming services are
justified and reasonable using cost-of-service standards. The FCC established an
interim industry-wide 11.25% permitted rate of return, and requested comments
on whether this standard and other interim cost-of-service standards should be
made permanent. The FCC also established a presumption that acquisition costs
above a system's book value should be excluded from the rate base, but the FCC
will consider individual showings to rebut this presumption. The need for
special rate relief will also be considered by the FCC if an operator
demonstrates that the rates set by a cost-of-service proceeding would constitute
confiscation of investment, and that, absent a higher rate, the return necessary
to operate and to attract investment could not be maintained. The FCC will
establish a uniform system of accounts for operators that elect cost-of-service
rate regulation, and the FCC has adopted affiliate transaction regulations.
After a rate has been set pursuant to a cost-of-service showing, rate increases
for regulated services will be indexed for inflation, and operators will also be
permitted to increase rates in response to increases in costs beyond their
control, such as taxes and increased programming costs.
After analyzing the effects of the two methods of rate regulation, the
Partnership elected to file cost-of-service showings in the Bluffton System. The
General Partner thus anticipates no further reduction in revenues or operating
income before depreciation and amortization in this system resulting from the
FCC's rate regulations. At this time, however, the regulatory authorities have
not approved the cost-of-service showings, and there can be no assurance that
the Partnership's cost-of-service showings will prevent further rate reductions
in this system until such final approval is received. The Partnership complied
with the benchmark regulations and further reduced rates in the Lake Geneva and
Ripon Systems. The Partnership will continue its efforts to mitigate the effect
of such rate reductions.
Among other issues addressed by the FCC in its February rate orders was
the treatment of packages of a la carte channels. The FCC in its rate
regulations adopted April 1, 1993, exempted from rate regulation the price of
packages of a la carte channels upon the fulfillment of certain conditions. On
November 10, 1994, the FCC reversed its policy regarding rate regulation of
packages of a la carte services. A la carte services that are offered in a
package will now be subject to rate regulation by the FCC, although the FCC
indicated that it cannot envision circumstances in which any price for a
collective offering of premium channels that have traditionally been offered on
a per-channel basis would be found to be unreasonable.
On November 10, 1994, the FCC also announced a revision to its
regulations governing the manner in which cable operators may charge subscribers
for new cable programming services. In addition to the present formula for
calculating the permissible rate for new services, the FCC instituted a
three-year flat fee mark-up plan for charges relating to new channels of cable
programming services. Commencing on January 1, 1995, operators may charge for
new channels of cable programming services added after May 14, 1994 at a rate of
up to 20 cents per channel, but may not make adjustments to monthly rates
totaling more than $1.20 plus an additional 30 cents for programming license
fees per subscriber over the first two years of the three-year period for these
new services. Operators may charge an additional 20 cents in the third year only
for channels added in that year plus the costs for the programming. Operators
electing to use the 20 cent per channel adjustment may not also take a 7.5%
mark-up on programming cost increases, which is permitted under the FCC's
current rate regulations. The
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FCC has requested further comment as to whether cable operators should continue
to receive the 7.5% mark-up on increases in license fees on existing programming
services.
The FCC also announced that it will permit operators to offer a "new
product tier" ("NPT"). Operators will be able to price this tier as they elect
so long as, among other conditions, other channels that are subject to rate
regulation are priced in conformity with applicable regulations and operators do
not remove programming services from existing tiers and offer them on the NPT.
There have been several lawsuits filed by cable operators and
programmers in Federal court challenging various aspects of the 1992 Cable Act,
including provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulations,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge Federal district court panel issued a decision upholding the
constitutionality of the mandatory signal carriage requirements of the 1992
Cable Act. That decision was appealed directly to the United States Supreme
Court. The United States Supreme Court vacated the lower court decision on June
27, 1994 and remanded the case to the district court for further development of
a factual record. The Supreme Court's majority determined that the must-carry
rules were content neutral, but that it was not yet proven that the rules were
needed to preserve the economic health of the broadcasting industry. In the
interim, the must-carry rules will remain in place during the pendency of the
proceedings in district court. In 1993, a Federal district court for the
District of Columbia upheld provisions of the 1992 Cable Act concerning rate
regulation, retransmission consent, restrictions on vertically integrated cable
television operators and programmers, mandatory carriage of programming on
commercial leased channels and public, educational and governmental access
channels and the exemption for municipalities from civil damage liability
arising out of local regulation of cable services. The 1992 Cable Act's
provisions providing for multiple ownership limits for cable operators and
advance notice of free previews for certain programming services have been found
unconstitutional. In November 1993, the United States Court of Appeals for the
District of Columbia held that the FCC's regulations implemented pursuant to
Section 10 of the 1992 Cable Act, which permit cable operators to ban indecent
programming on public, educational or governmental access channels or leased
access channels, were unconstitutional, but the court has agreed to reconsider
its decision. All of these decisions construing provisions of the 1992 Cable Act
and the FCC's implementing regulations have been or are expected to be appealed.
Ownership and Market Structure. The FCC rules and Federal law generally
prohibit the direct or indirect common ownership, operation, control or interest
in a cable television system, on the one hand, and a local television broadcast
station whose television signal reaches any portion of the community served by
the cable television system, on the other hand. The FCC recently lifted its ban
on the cross-ownership of cable television systems by broadcast networks. The
FCC revised its regulations to permit broadcast networks to acquire cable
television systems serving up to 10% of the homes passed in the nation, and up
to 50% of the homes passed in a local market. Neither the Partnership nor the
General Partner has any direct or indirect ownership, operation, control or
interest in a television broadcast station, or a telephone company, and they are
thus presently unaffected by the cross-ownership rules.
The Cable Communications Policy Act of 1984 (the "1984 Cable Act") and
FCC regulations generally prohibit the common operation of a cable television
system and a telephone company within the same service area. Until recently, a
provision of a Federal court antitrust consent decree also prohibited the
regional Bell operating companies ("RBOCs") from engaging in cable television
operations. This prohibition was recently removed when the court retaining
jurisdiction over the consent decree ruled that the RBOCs could provide
information services over their facilities. This decision permits the RBOCs to
acquire or construct cable television systems outside of their own service
areas.
The 1984 Cable Act prohibited local exchange carriers, including the
RBOCs, from providing video programming directly to subscribers within their
local exchange telephone service areas, except in rural areas or by specific
waiver of FCC rules. Several Federal district courts have struck down the 1984
Cable Act's telco/cross-ownership provision as facially invalid and inconsistent
with the First Amendment. The United States Courts of Appeals for the Fourth and
the Ninth Circuits have upheld the appeals of two of these district court
decisions, and the United States Justice Department is expected to request the
United States Supreme Court to
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review these two decisions. This Federal cross-ownership rule is particularly
important to the cable industry since these telephone companies already own
certain facilities needed for cable television operation, such as poles, ducts
and associated rights-of-way.
The FCC amended its rules in 1992 to permit local telephone companies
to offer "video dialtone" service for video programmers, including channel
capacity for the carriage of video programming and certain noncommon carrier
activities such as video processing, billing and collection and joint marketing
arrangements. In its video dialtone order, which was part of a comprehensive
proceeding examining whether and under what circumstances telephone companies
should be allowed to provide cable television services, including video
programming to their customers, the FCC concluded that neither the 1984 Cable
Act nor its rules apply to prohibit the interexchange carriers (i.e., long
distance telephone companies such as AT&T) from providing such services to their
customers. Additionally, the FCC also concluded that where a local exchange
carrier ("LEC") makes its facilities available on a common carrier basis for the
provision of video programming to the public, the 1984 Cable Act does not
require the LEC or its programmer customers to obtain a franchise to provide
such service. This aspect of the FCC's video dialtone order was upheld on appeal
by the United States Court of Appeals for the D.C. Circuit. The FCC recently
issued an order reaffirming its initial decision, and this order has been
appealed. Because cable operators are required to bear the costs of complying
with local franchise requirements, including the payment of franchise fees, the
FCC's decision could place cable operators at a competitive disadvantage
vis-a-vis services offered on a common carrier basis over local telephone
company provided facilities. In its Reconsideration Order, the FCC, among other
actions, refused to require telephone companies to justify cost allocations
prior to the construction of video dialtone facilities, and indicated that it
would provide guidance on costs that must be included in proposed video dialtone
tariffs. The FCC also established dual Federal/state jurisdiction over video
dialtone services based on the origination point of the video dialtone
programming service. In a separate proceeding, the FCC has proposed to increase
the numerical limit on the population of areas qualifying as "rural" and in
which LECs can provide cable service without a FCC waiver.
On January 12, 1995, the FCC adopted a Fourth Further Notice of
Proposed Rulemaking in its video dialtone docket. The FCC tentatively concluded
that it should not ban telephone companies from providing their own video
programming over their video dialtone platforms in those areas in which the
cable/telephone cross-ownership rules have been found unconstitutional. The FCC
requested comments on this issue and on further refinements of its video
dialtone regulatory framework concerning, among other issues, telephone
programmer affiliation standards, the establishment of structural safeguards to
prevent cross-subsidization of video dialtone and programming activities, and
the continuation of the FCC's ban prohibiting telephone companies from acquiring
cable systems within their telephone service areas for the provision of video
dialtone services. The FCC will also consider whether a LEC offering video
dialtone service must secure a local franchise if that LEC also engages in the
provision of video programming carried on its video dialtone platform. The FCC
has also proposed to broadly interpret its authority to waive the
cable/telephone cross-ownership ban upon a showing by telephone companies that
they comply with the safeguards which the FCC establishes as a condition of
providing video programming.
A number of bills that would have permitted telephone companies to
provide cable television service within their own service areas were considered
during the last Congress, but none were adopted. These bills would have
permitted the provision of cable television service by telephone companies in
their own service areas conditioned on the establishment of safeguards to
prevent cross-subsidization between telephone and cable television operations
and the provision of telecomunication services by cable television systems.
Similar legislation is expected to be considered by Congress during its current
session. The outcome of these FCC, legislative or court proceedings and
proposals or the effect of such outcome on cable system operations cannot be
predicted.
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ITEM 2. PROPERTIES
The cable television systems owned by the Partnership at December 31,
1994 are described below:
System Acquisition Date
Bluffton System November 1988
Ripon System March 1991
Lake Geneva System March 1991
The following sets forth (i) the monthly basic plus service rates
charged to subscribers, (ii) the number of basic subscribers and pay units and
(iii) the range of franchise expiration dates for the Systems. The monthly basic
service rates set forth herein represent, with respect to systems with multiple
headends, the basic service rate charged to the majority of the subscribers
within the system. While the charge for basic plus service may have increased in
1993 in some cases as a result of the FCC's rate regulations, overall revenues
may have decreased due to the elimination of charges for additional outlets and
certain equipment. In cable television systems, basic subscribers can subscribe
to more than one pay TV service. Thus, the total number of pay services
subscribed to by basic subscribers are called pay units. As of December 31,
1994, the Partnership's Systems operated approximately 600 miles of cable plant,
passing approximately 30,000 homes, representing an approximate 66% penetration
rate. Figures for numbers of subscribers, miles of cable plant and homes passed
are compiled from the General Partner's records and may be subject to
adjustments.
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At December 31,
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BLUFFTON, INDIANA 1994 1993 1992
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Monthly basic plus service rate $ 21.77 $ 21.77 $ 21.50
Basic subscribers 13,084 12,775 12,205
Pay units 7,136 7,710 6,791
</TABLE>
Franchise expiration dates range from November 1996 to February 2005.
<TABLE>
<CAPTION>
At December 31,
-------------------------------
LAKE GENEVA, WISCONSIN 1994 1993 1992
---------------------- ----- ----- -----
<S> <C> <C> <C>
Monthly basic plus service rate $20.70 $21.13 $20.95
Basic subscribers 3,344 2,972 2,745
Pay units 1,568 1,490 1,344
</TABLE>
Franchise expiration dates are not specified in the franchise agreements of the
Towns of Bloomfield, Geneva and Linn. The franchise expiration dates for the
City of Lake Geneva and the Town of Lyons are December 1999 and December 2005,
respectively.
<TABLE>
<CAPTION>
At December 31,
-------------------------------
RIPON, WISCONSIN 1994 1993 1992
---------------- ----- ----- -----
<S> <C> <C> <C>
Monthly basic plus service rate $19.50 $21.73 $20.96
Basic subscribers 2,423 2,318 2,283
Pay units 730 736 665
</TABLE>
There is no franchise expiration date specified in the franchise agreement for
the Town of Ripon; the franchise expiration date for the City of Ripon is
December 1996.
PROGRAMMING SERVICES
Programming services provided by the Systems include local affiliates
of the national broadcast networks, local independent broadcast channels, the
traditional satellite services (e.g., American Movie Classics, Arts &
9
<PAGE> 10
Entertainment, Black Entertainment Network, C-SPAN, The Discovery Channel,
Lifetime, Entertainment Sports Network, Home Shopping Network, Mind Extension
University, Music Television, Nickelodeon, Turner Network Television, The
Nashville Network, Video Hits One, and superstations WOR, WGN and TBS. The
Partnership's Systems also provide a selection, which varies by system, of
premium channel programming (e.g., Cinemax, Encore, Home Box Office, Showtime
and The Movie Channel).
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
While the Partnership is publicly held, there is no public market for
the limited partnership interests, and it is not expected that a market will
develop in the future. As of February 15, 1995, the approximate number of equity
security holders in the Partnership was 2,321.
10
<PAGE> 11
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
For the Year Ended December 31,
-----------------------------------------------------------------------------
1994 1993 1992 1991 1990
---------- ---------- ---------- --------- -------
<S> <C> <C> <C> <C> <C>
Revenues $ 6,440,941 $ 6,214,322 $ 5,797,797 $ 4,776,786 $ 3,333,835
Depreciation and Amortization 3,074,711 3,161,687 3,069,420 2,750,778 1,737,422
Operating Loss (714,065) (681,473) (747,624) (750,863) (444,412)
Net Loss (1,459,114) (1,328,059) (1,356,392) (1,154,431) (241,420)
Net Loss per
Limited Partnership Unit (28.17) (25.64) (26.19) (22.29) (4.66)
Weighted average number of
Limited Partner units outstanding 51,276 51,276 51,276 51,276 51,276
General Partner's Deficit (134,377) (119,786) (88,533) (57,101) (29,785)
Limited Partners' Capital 8,710,412 10,154,935 13,248,990 16,360,840 19,065,081
Total Assets 19,865,099 21,435,720 23,527,282 25,631,213 19,657,169
Credit Facility and Capitalized
Lease Obligations 10,787,551 10,058,100 9,386,632 8,421,101 -
General Partner Advances 44,786 584,196 101,372 67,840 -
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
1994 Compared to 1993
Revenues of the Partnership for the year ended December 31, 1994
totalled $6,440,941, an increase of $226,619, or approximately 4 percent, over
the amount reported in 1993. An increase in advertising revenues accounted for
approximately 29 percent of the increase. Increases in premium channel revenue
accounted for approximately 28 percent. The increase in revenues would have been
greater if not for the reduction in basic rates due to basic rate regulations
issued by the FCC in April 1993 and February 1994, with which the Partnership
complied, effective September 1993 and July 1994. No other individual factor was
significant to the increase in revenues. See regulatory matters discussed below.
Operating, general and administrative expenses increased $299,247, or
approximately 10 percent, from $2,926,350 in 1993 to $3,225,597 in 1994.
Operating, general and administrative expenses represented approximately 47 and
50 percent of revenues in 1993 and 1994, respectively. Of the total net increase
in operating, general and administrative expenses, personnel costs increased
approximately $127,000 representing approximately 42 percent of the total
increase, and programming fees increased approximately $89,000, representing
approximately 30 percent of the total increase. No other individual factor
significantly affected the increase in operating, general and administrative
expense for the periods discussed.
Management fees and allocated administrative costs from the General
Partner increased $46,940, or approximately 6 percent, from $807,758 in 1993 to
$854,698 in 1994. This increase was primarily the result of increased revenues,
upon which management fees and the allocation of such expenses are calculated.
The General Partner has experienced increases in expenses, including personnel
costs and reregulation costs, a portion of which are allocated to the
Partnership.
Operating loss increased $32,592, or approximately 5 percent, from
$681,473 in 1993 to $714,065 in 1994. This increase was a result of the
increases in operating, general and administrative expenses and management fees
and allocated administrative costs from the General Partner exceeding the
increase in revenues. Operating income before depreciation and amortization
decreased $119,568, or approximately 5 percent, from $2,480,214 in 1993 to
$2,360,646 in 1994. The decrease was due to the increase in operating, general
and administrative expenses and management fees and allocated
11
<PAGE> 12
administrative expenses from the General Partner exceeding the increases in
revenues. The decrease in operating income before depreciation and amortization
reflects the current operating environment of the cable television industry. The
FCC rate regulations under the 1992 Cable Act have caused revenues to increase
more slowly than otherwise would have been the case. In turn, this has caused
certain expenses which are a function of revenue, such as franchise fees,
copyright fees and management fees, to increase more slowly than in prior years.
However, other operating costs such as programming fees, salaries and benefits,
and marketing costs as well as other costs incurred by the General Partner,
which are allocated to the Partnership, continue to increase at historical
rates. This situation has led to reductions in operating income before
depreciation and amortization as a percent of revenue ("Operating Margin"). Such
reductions in Operating Margins may continue in the near term as the Partnership
and the General Partner incur cost increases due to, among other things,
increases in programming fees, compliance costs associated with reregulation and
competition, that exceed increases in revenue. The General Partner will attempt
to mitigate a portion of these reductions through (a) new service offerings, (b)
product re-marketing and re-packaging and (c) marketing efforts targeted at
non-subscribers.
Net losses increased by $131,055, or approximately 10 percent, from
$1,328,059 in 1993 to $1,459,114 in 1994. These losses were primarily a result
of increases in operating, general and administrative expenses and management
fees and allocated administration expense from the General Partner exceeding the
increase in revenue and decrease in depreciation and amortization expense.
1993 Compared to 1992
Revenues of the Partnership for the year ended December 31, 1993
totalled $6,214,322, an increase of $416,525, or approximately 7 percent, over
the amount reported in 1992. This increase was primarily the result of increases
in the number of basic subscribers and basic rate adjustments. Increases in
basic subscribers and adjustments in the rates for basic service accounted for
approximately $170,000 and $129,000, respectively, or approximately 41 percent
and 31 percent, respectively, of the revenue increase for the year ended
December 31, 1993. The increase in revenues would have been greater if not for
the reduction in basic rates due to basic rate regulations issued by the FCC in
April 1993, with which the Partnership complied effective September 1993. No
other individual factor was significant to the increase in revenues.
Operating, general and administrative expenses increased $203,344, or
approximately 7 percent, from $2,723,006 in 1992 to $2,926,350 in 1993.
Operating, general and administrative expenses represented approximately 47
percent of revenues in 1993 and 1992. Of the total net increase in operating,
general and administrative expenses, programming fees increased $121,599,
representing approximately 60 percent of the total increase, and marketing
related costs increased $29,422, representing approximately 14 percent of the
total increase. No other individual factor significantly affected the increase
in operating, general and administrative expense for the periods discussed.
Management fees and allocated administrative costs from the General
Partner increased $54,763, or approximately 7 percent, from $752,995 in 1992 to
$807,758 in 1993. This increase was primarily the result of increased revenues,
upon which management fees and the allocation of such expenses are calculated.
Operating income before depreciation and amortization increased
$158,418, or approximately 7 percent, from $2,321,796 in 1992 to $2,480,214 in
1993. The increase was due to the increase in revenues exceeding the increases
in operating, general and administrative expenses and management fees and
allocated administrative expenses from the General Partner.
Net losses decreased by $28,333, or approximately 2 percent, from
$1,356,392 in 1992 to $1,328,059 in 1993. These losses were primarily a result
of depreciation and amortization.
Financial Condition
During 1994, the Partnership purchased plant and equipment for its
cable television systems approximately totalling $1,360,400. Approximately 65
percent of the expenditures related to cable plant extensions, cable, hardware
and labor for new subscriber installations, and equipment replacements.
Approximately 15 percent related to upgrades in the Indiana system. The
remainder of these expenditures were used for various enhancements throughout
all of the Partnership's cable television systems. The capital expenditures
were funded primarily by cash generated from operations. Anticipated capital
12
<PAGE> 13
expenditures for 1995 are estimated to be approximately $1,143,300, and will be
financed from cash generated from operations and from borrowings from the
Partnership's renegotiated credit facility, as discussed below. It is estimated
that approximately 71 percent of the currently anticipated capital expenditures
will be for cable plant extensions.
In March 1991, the Partnership entered into a $10,000,000 revolving
credit facility with a commercial bank to finance the purchase of the Lake
Geneva and Ripon systems and to provide financing for capital expenditures. The
revolving aspect of the credit facility expired on December 31, 1993, at which
time the outstanding principal converted to a term loan with a maturity date of
December 31, 1996. In March 1994, the commercial bank agreed to defer the loan
amortization payments due March 31 and June 30, 1994 until September 30, 1994.
In September 1994, the Partnership renegotiated the terms of its credit facility
to extend the revolving credit period and to increase the amount available to
$14,000,000 to provide the Partnership with a source of funding for capital
expenditures. The then-outstanding principal balance on the revolving credit
facility will convert on December 31, 1996 to a term loan with a final
maturity date of December 31, 1999. At December 31, 1994, $10,700,000 was
outstanding, leaving $3,300,000 for future borrowings. Interest on the
outstanding principal balance is at the Partnership's option of Prime or LIBOR
plus 1.125 percent.
A primary objective of the Partnership is to provide quarterly cash
distributions to the partners, principally from cash flow from operations
remaining after principal and interest payments and the creation of any reserves
necessary for the operation of the Partnership. The Partnership declared such
distributions totalling $1,797,249 and $1,786,890 during 1993 and 1992,
respectively. All of these distributions have been paid. The Partnership
suspended quarterly distributions to the partners because the Partnership had no
borrowing capacity under its previous credit facility and needed funds from cash
flow to pay for capital additions. Because the Partnership has successfully
renegotiated its credit facility, it can to some extent use borrowings to fund
capital expenditures and the Partnership will attempt to provide some level of
distributions to the partners in 1995. No determination has been made
regarding the level of future distributions. The level of distributions, if
any, will be determined on a quarter-by-quarter basis.
Regulatory Matters
The General Partner presently believes cash flow from operations and
available borrowings from the revolving credit facility will be sufficient to
fund capital expenditures and other liquidity needs of the Partnership over the
near-term.
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a greater
degree of regulation of the cable television industry. In April 1993, the FCC
adopted regulations governing rates for basic and non-basic services. These
regulations became effective on September 1, 1993. Such regulations caused
reductions in rates for certain regulated services. On February 22, 1994, the
FCC adopted several additional rate orders including an order which revised its
earlier-announced regulatory scheme with respect to rates.
The Partnership has filed a cost-of-service showing for the Bluffton
System and thus anticipates no further reductions in rates in that system. The
cost-of-service showing has not yet received final approval from franchising
authorities, however, and there can be no assurance that the Partnership's
cost-of-service showing will prevent further rate reductions in that system
until such final approval is received. The Partnership complied with the
February 1994 benchmark regulations and further reduced rates in the Lake Geneva
and Ripon systems effective July 1994. See Item 1 for further discussion of the
provisions of the 1992 Cable Act and the FCC regulations promulgated thereunder.
13
<PAGE> 14
Item 8. Financial Statements
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 AND 1993
AND FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants 15
Balance Sheets 16
Statements of Operations 18
Statements of Partners' Capital (Deficit) 19
Statements of Cash Flows 20
Notes to Financial Statements 21
</TABLE>
14
<PAGE> 15
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Jones Spacelink Income/Growth Fund 1-A, Ltd.:
We have audited the accompanying balance sheets of Jones
Spacelink Income/Growth Fund 1-A, Ltd. (a Colorado limited partnership) as of
December 31, 1994 and 1993, and the related statements of operations, partners'
capital (deficit) and cash flows for each of the three years in the period ended
December 31, 1994. These financial statements are the responsibility of the
General Partner's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Jones
Spacelink Income/Growth Fund 1-A, Ltd. as of December 31, 1994 and 1993, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1994, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1995.
15
<PAGE> 16
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31,
--------------------------------
1994 1993
-------------- -------------
<S> <C> <C>
CASH $ 171,944 $ 87,972
TRADE RECEIVABLES, less allowance for doubtful
receivables of $9,238 and $7,936 at December 31, 1994
and 1993, respectively 130,642 113,414
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 14,257,087 12,896,681
Less- accumulated depreciation (5,220,117) (4,158,493)
------------- -------------
9,036,970 8,738,188
Franchise costs, net of accumulated amortization
of $6,667,352 and $5,342,284 at December 31, 1994
and 1993, respectively 7,700,849 9,025,917
Subscriber lists, net of accumulated amortization
of $2,485,523 and $2,031,043 at December 31, 1994
and 1993, respectively 781,826 1,236,306
Noncompete agreements, net of accumulated amortization
of $592,741 and $436,414 at December 31, 1994
and 1993, respectively 187,827 344,154
Costs in excess of interests in net assets purchased,
net of accumulated amortization of $262,527 and $212,827
at December 31, 1994 and 1993, respectively 1,763,915 1,813,615
------------- -------------
Total investment in cable
television properties 19,471,387 21,158,180
DEBT PLACEMENT COSTS, net of accumulated
amortization of $98,540 and $71,028 at
December 31, 1994 and 1993, respectively 29,904 57,416
DEPOSITS, PREPAID EXPENSES AND OTHER ASSETS 61,222 18,738
------------- -------------
Total assets $ 19,865,099 $ 21,435,720
============= =============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
16
<PAGE> 17
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
December 31,
------------------------------
1994 1993
------------ ------------
<S> <C> <C>
LIABILITIES:
Credit facility and capitalized lease
obligations $ 10,787,551 $ 10,058,100
Accounts payable to Jones Intercable, Inc. 44,786 584,196
Trade accounts payable and accrued liabilities 403,916 331,149
Accrued distributions to partners -- 372,916
Subscriber prepayments and deposits 52,811 54,210
------------ ------------
Total liabilities 11,289,064 11,400,571
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 8)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Distributions (78,698) (78,698)
Accumulated deficit (56,679) (42,088)
------------ ------------
(134,377) (119,786)
------------ ------------
Limited Partners-
Net contributed capital (51,276 units
outstanding at December 31, 1994 and
1993, respectively) 21,875,852 21,875,852
Distributions (7,791,180) (7,791,180)
Accumulated deficit (5,374,260) (3,929,737)
------------ ------------
8,710,412 10,154,935
Total partners' capital 8,576,035 10,035,149
------------ ------------
Total liabilities and
partners' capital (deficit) $ 19,865,099 $ 21,435,720
============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
17
<PAGE> 18
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended
December 31,
----------------------------------------------
1994 1993 1992
------------ ----------- -----------
<S> <C> <C> <C>
REVENUES $ 6,440,941 $ 6,214,322 $ 5,797,797
COSTS AND EXPENSES:
Operating, general and administrative 3,225,597 2,926,350 2,723,006
Management fees and allocated
administrative costs from the
General Partner 854,698 807,758 752,995
Depreciation and amortization 3,074,711 3,161,687 3,069,420
------------ ----------- -----------
OPERATING LOSS (714,065) (681,473) (747,624)
OTHER INCOME (EXPENSE):
Interest expense (735,717) (628,906) (627,478)
Interest income 811 1,433 13,453
Other, net (10,143) (19,113) 5,257
------------ ----------- -----------
NET LOSS $ (1,459,114) $(1,328,059) $(1,356,392)
============ =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (14,591) $ (13,281) $ (13,564)
============ =========== ===========
Limited Partners $ (1,444,523) $(1,314,778) $(1,342,828)
============ =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (28.17) $ (25.64) $ (26.19)
============ =========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNER UNITS OUTSTANDING 51,276 51,276 51,276
============ =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
18
<PAGE> 19
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
For the Year Ended
December 31,
-------------------------------------------------
1994 1993 1992
------------- -------------- --------------
<S> <C> <C> <C>
GENERAL PARTNER:
Balance, beginning of year $ (119,786) $ (88,533) $ (57,101)
Distributions -- (17,972) (17,868)
Net loss for the year (14,591) (13,281) (13,564)
------------ ------------ ------------
Balance, end of year $ (134,377) $ (119,786) $ (88,533)
============ ============ ============
LIMITED PARTNERS:
Balance, beginning of year $ 10,154,935 $ 13,248,990 $ 16,360,840
Distributions -- (1,779,277) (1,769,022)
Net loss for the year (1,444,523) (1,314,778) (1,342,828)
------------ ------------ ------------
Balance, end of year $ 8,710,412 $ 10,154,935 $ 13,248,990
============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
19
<PAGE> 20
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Year Ended
December 31,
--------------------------------------------------
1994 1993 1992
------------- ------------ -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,459,114) $ (1,328,059) $ (1,356,392)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 3,074,711 3,161,687 3,069,420
Decrease (increase) in trade accounts receivable, net (17,228) 18,384 (42,272)
Decrease (increase) in deposits, prepaid expenses
and other assets (42,484) 2,531 (2,105)
Increase (decrease) in trade accounts payable and accrued
liabilities and subscriber prepayments and deposits 71,368 (27,317) (11,505)
------------- ------------ -------------
Net cash provided by operating activities 1,627,253 1,827,226 1,657,146
------------- ------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,360,406) (1,098,158) (1,061,714)
------------- ------------ -------------
Net cash used in investing activities (1,360,406) (1,098,158) (1,061,714)
------------- ------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners -- (1,797,249) (1,786,890)
Increase (decrease) in accrued distributions (372,916) (93,229) 51,793
Proceeds from borrowings 912,645 690,782 1,276,352
Repayment of borrowings (183,194) (19,314) (310,821)
Increase (decrease) in advances from Jones Intercable, Inc. (539,410) 482,824 33,532
------------- ------------ -------------
Net cash used in financing activities (182,875) (736,186) (736,034)
------------- ------------ -------------
INCREASE (DECREASE) IN CASH 83,972 (7,118) (140,602)
CASH, AT BEGINNING OF YEAR 87,972 95,090 235,692
------------- ------------ -------------
CASH, AT END OF YEAR $ 171,944 $ 87,972 $ 95,090
============= ============ =============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 666,291 $ 648,668 $ 592,249
============= ============ =============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
20
<PAGE> 21
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS:
Formation and Business
Jones Spacelink Income/Growth Fund 1-A, Ltd. (the
"Partnership"), a Colorado limited partnership, was formed on May 12, 1988,
pursuant to a public offering of limited partner interests sponsored by Jones
Spacelink, Ltd. ("Spacelink"). The Partnership was formed to acquire, construct,
develop and operate cable television systems. On December 20, 1994, Jones
Intercable, Inc. ("Intercable"), a Colorado corporation that was a subsidiary of
Spacelink, acquired substantially all of the assets of Spacelink, including
Spacelink's general partner interest in the Partnership. Intercable now is the
general partner and manager of the Partnership. All references herein to the
"General Partner" relating to matters prior to December 20, 1994 are to
Spacelink, and all references to the "General Partner" relating to matters after
that date are to Intercable. Intercable and certain of its subsidiaries also own
and operate cable television systems for their own account and for the account
of other managed limited partnerships.
Contributed Capital, Commissions and Syndication Costs
The capitalization of the Partnership is set forth in the
accompanying statements of partners' capital (deficit). No limited partner is
obligated to make any additional contribution to Partnership capital. The
General Partner purchased its general partner interest in the Partnership by
contributing $1,000 to partnership capital.
All profits and losses of the Partnership will be allocated 99
percent to the limited partners and one percent to the General Partner, except
for income or gain from the sale or disposition of cable television properties,
which will be allocated to the partners based upon the formula set forth in the
partnership agreement, and interest income earned prior to the first acquisition
by the Partnership of a cable television system, which was allocated 100 percent
to the limited partners.
Cable Television System Acquisitions
In November 1988, the Partnership purchased the cable
television systems serving the areas in and around the communities of Bluffton,
Decatur, Monroe, Auburn, Butler, Uniondale, Waterloo and Garrett, and the
unincorporated areas of Wells, Allen, Noble, Adams and Dekalb Counties, all in
the State of Indiana (the "Bluffton Systems").
In March 1991, the Partnership purchased the cable television
system serving the communities of Lake Geneva and areas of Walworth County, all
in the State of Wisconsin (the "Lake Geneva System") and the cable television
system serving the communities of Ripon and areas of Fond-du-Lac County, all in
the State of Wisconsin (the "Ripon System").
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Accounting Records
The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted accounting
principles. The Partnership's tax returns are also prepared on the accrual
basis.
21
<PAGE> 22
Property, Plant and Equipment
Depreciation of property, plant and equipment is provided
primarily using the straight-line method over the following estimated service
lives:
<TABLE>
<S> <C>
Cable distribution systems 5 - 15 years
Equipment and tools 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
</TABLE>
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
Allocation of Cost of Purchased Cable Television Systems
Based on independent appraisals, the Partnership allocated the
total purchase price of the cable television systems acquired as follows: first,
to the fair value of net tangible assets acquired; second, to franchise costs in
an amount equal to the estimated value of franchise agreements; third, to
subscriber lists; fourth, to noncompete agreements; and fifth, to costs in
excess of interests in net assets purchased. The brokerage fees paid to The
Jones Group, Ltd. upon acquisition of the systems and other acquisition costs
were capitalized and charged to investment in cable television properties in the
accompanying balance sheets.
Intangible Assets
Costs assigned to intangible assets are being amortized using
the straight-line method over the following estimated useful lives:
<TABLE>
<S> <C>
Franchise costs 5 - 16 years
Subscriber lists 7 - 8 years
Noncompete agreements 5 years
Costs in excess of interests in net assets purchased 36 years
</TABLE>
Revenue Recognition
Subscriber prepayments are initially deferred and recognized
as revenue when earned.
Reclassifications
Certain prior year amounts have been reclassified to conform
to the 1994 presentation.
22
<PAGE> 23
(3) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1994 and
1993, consisted of the following:
<TABLE>
<CAPTION>
1994 1993
------------ ------------
<S> <C> <C>
Cable distribution systems $ 13,094,377 $ 11,862,029
Equipment and tools 496,075 436,814
Office furniture and equipment 186,435 180,910
Buildings 22,572 22,572
Vehicles 399,628 336,356
Land 58,000 58,000
------------ ------------
14,257,087 12,896,681
------------ ------------
Less-accumulated depreciation (5,220,117) (4,158,493)
------------ ------------
$ 9,036,970 $ 8,738,188
============ ============
</TABLE>
(4) DEBT:
At December 31, 1994 and 1993, debt consisted of the
following:
<TABLE>
<CAPTION>
1994 1993
------------ ------------
<S> <C> <C>
Revolving credit and term loan facility $ 10,700,000 $ 10,000,000
Capital lease obligations 87,551 58,100
------------ ------------
$ 10,787,551 $ 10,058,100
============ ============
</TABLE>
In March 1991, the Partnership entered into a $10,000,000
revolving credit facility with a commercial bank to finance the purchase of the
Lake Geneva and Ripon systems and to provide financing for capital expenditures.
The revolving aspect of the credit facility expired on December 31, 1993, at
which time the outstanding principal converted to a term loan with a maturity
date of December 31, 1996. In March 1994, the commercial bank agreed to defer
the loan amortization payments due March 31 and June 30, 1994 until September
30, 1994. In September 1994, the Partnership renegotiated the terms of its
credit facility to extend the revolving credit period and to increase the
amount available to $14,000,000 to provide the Partnership with a source of
funding for capital expenditures. The then-outstanding principal balance on
the revolving credit facility will convert on December 31, 1996 to a term loan
with a final maturity date of December 31, 1999. At December 31, 1994,
$10,700,000 was outstanding, leaving $3,300,000 for future borrowings.
Interest on the outstanding principal balance is at the Partnership's option of
Prime or LIBOR plus 1.125 percent. The effective interest rates on the term loan
as of December 31, 1994 and 1993 were 7.0 and 4.6 percent, respectively.
Estimated maturities of the term loan and capital lease
obligations for the five years in the period ended December 31, 1999 and
thereafter are as follows:
<TABLE>
<C> <C>
1995 $ 26,265
1996 26,265
1997 561,265
1998 1,078,756
1999 9,095,000
Thereafter -
-----------
$10,787,551
===========
</TABLE>
(5) SIGNIFICANT TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES:
Management Fees, Distribution Ratios and Reimbursements
The General Partner manages the Partnership and receives a fee
for its services equal to five percent of the gross revenues of the Partnership,
excluding revenues from the sale of cable television systems or franchises.
Management fees paid to the General Partner by the Partnership for the years
ended December 31, 1994, 1993 and 1992 were $322,047, $310,716 and $289,890,
respectively.
Any partnership distributions made from cash flow (defined as
cash receipts derived from routine operations and interest income, less debt
principal and interest payments and cash expenses) are allocated 99 percent to
the
23
<PAGE> 24
limited partners and one percent to the General Partner. The Partnership may
distribute any proceeds from the sale or refinancing of a cable television
system generally as follows: first, to the Partners until they have received an
amount equal to their initial capital contributions (as reduced by all prior
distributions other than distributions from cash flow); second, to the limited
partners until they have received a liquidation preference equal to 12 percent
per annum, cumulative and noncompounded, on an amount equal to their initial
capital contributions, less any portion of such capital contributions which has
been returned to the limited partners from prior sale or refinancing proceeds,
as determined for any particular year; provided that such cumulative return will
be reduced by all prior distributions of cash flow from operations and prior
distributions of proceeds of sales or refinancings of the Partnership's cable
television systems. The balance will be allocated 75 percent to the limited
partners' and 25 percent to the General Partner. See Note 6 for discussion of
cash flow distributions.
The Partnership reimburses the General Partner and certain of
its subsidiaries for certain allocated general and administrative expenses.
These expenses include salaries and benefits paid to corporate personnel, office
rent and related facilities expense. Such personnel provide engineering,
marketing, administrative, accounting, legal, and investor relation services to
the Partnership. Allocations of personnel costs are based primarily on actual
time spent by employees of the General Partner and certain of its subsidiaries
with respect to each partnership managed. Remaining expenses are allocated based
on the pro rata relationship of the Partnership's revenues to the total revenues
of all systems owned or managed by the General Partner and certain of its
subsidiaries, and/or the cost of Partnership assets managed. At December 1,
1993, the General Partner changed its allocation method to be based soley on
revenues. Included in the costs allocated from the General Partner and certain
of its subsidiaries are expenses allocated to the General Partner from
affiliated entities for information processing and certain other
administrative services. The General Partner believes that the methodology
used in allocating general and administrative costs is reasonable. General and
administrative expenses allocated to the Partnership by the General Partner
were $532,651, $497,042 and $463,105 for the years ended December 31, 1994,
1993 and 1992, respectively.
The Partnership was charged interest during 1994, 1993 and
1992 at average interest rates of approximately 10 percent, 5 percent and 6
percent, respectively, per annum on the amounts due the General Partner, which
approximated the General Partner's weighted average cost of borrowing. Total
interest charged by the General Partner was $24,392, $3,167 and $3,672 for the
years ended December 31, 1994, 1993 and 1992, respectively.
Payments to/from Affiliates for Programming Services
The Partnership receives programming from Product Information
Network, Superaudio, The Mind Extension University and Jones Computer Network,
affiliates of the General Partner. Payments to Superaudio by the Partnership for
the years ended December 31, 1994, 1993 and 1992 totalled $11,575, $11,098 and
$9,949, respectively. Payments to The Mind Extension University, for the years
ended December 31, 1994, 1993 and 1992 totalled $10,339, $6,649 and $6,198,
respectively. Payments to Jones Computer Network, which initiated service in
1994, totalled $310 in 1994. The Partnership receives a commission from Product
Information Network, based on a percentage of advertising revenue and number of
subscribers. Product Information Network, which initiated service in 1994, paid
commissions to the Partnership totalling $461 in 1994.
(6) DISTRIBUTIONS FROM CASH FLOW:
A primary objective of the Partnership is to provide quarterly cash
distributions to the partners, principally from cash flow from operations
remaining after principal and interest payments and the creation of any reserves
necessary for the operation of the Partnership. The Partnership declared such
distributions totalling $1,797,249 and $1,786,890 during 1993 and 1992,
respectively. All of these distributions have been paid. The Partnership
suspended quarterly distributions to the partners in 1994 because the
Partnership had no borrowing capacity under its previous credit facility and
needed funds from cash flow to pay for capital additions. Because the
Partnership has successfully renegotiated its credit facility, it can to some
extent use borrowings to fund capital expenditures and the Partnership will
attempt to provide some level of distributions to the partners in 1995. No
determination has been made regarding the level of future distributions. The
level of distributions, if any, will be determined on a quarter-by-quarter
basis.
24
<PAGE> 25
(7) INCOME TAXES:
Income taxes have not been recorded in the accompanying
financial statements because they accrue directly to the partners. The Federal
and state income tax returns of the Partnership are prepared and filed by the
General Partner.
The Partnership's tax returns, the qualification of the
Partnership as such for tax purposes, and the amount of distributable income or
loss are subject to examination by Federal and state taxing authorities. If such
examinations result in changes with respect to the Partnership's qualification
as such, or in changes with respect to the Partnership's recorded income or
loss, the tax liability of the general and limited partners would likely be
changed accordingly.
Taxable income (loss) to the Partners is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable income
(loss) and the net loss reported in the statements of operations.
(8) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television
Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") which
became effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation in the cable television industry. In April 1993,
the Federal Communications Commission (the "FCC") adopted regulations governing
rates for basic and non-basic services. These regulations became effective on
September 1, 1993. Such regulations caused reductions in rates for certain
regulated services. On February 22, 1994, the FCC adopted several additional
rate orders including an order which revised its earlier-announced regulatory
scheme with respect to rates. The Partnership has filed a cost-of-service
showing in its Bluffton System and anticipates no further reductions in rates in
that system. The cost-of-service showing has not yet received final approval
from franchising authorities, however, and there can be no assurance that the
Partnership's cost-of-service showing will prevent further rate reductions in
that system until such final approval is received. The Partnership complied with
the February 1994 benchmark regulations and further reduced rates in the Lake
Geneva and Ripon systems effective July 1994.
The Partnership rents office and other facilities under
various long-term lease arrangements. Rent paid under such lease arrangements
totalled $71,355, $59,241 and $60,897, respectively, for the years ended
December 31, 1994, 1993 and 1992. Future minimum lease payments as of December
31, 1994, under noncancelable operating leases for each of the five years in the
period ending December 31, 1999, and thereafter are as follows:
<TABLE>
<C> <C>
1995 $ 52,424
1996 25,658
1997 24,368
1998 14,368
1999 8,882
Thereafter 24,824
--------
$150,524
========
</TABLE>
25
<PAGE> 26
(9) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective
years are presented below:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Maintenance and repairs $ 42,864 $ 50,567 $ 55,706
========== ========== ==========
Taxes, other than income and payroll taxes $ 108,962 $ 93,457 $ 82,489
========== ========== ==========
Advertising $ 65,492 $ 81,798 $ 66,351
========== ========== ==========
Depreciation of property, plant and equipment $1,061,624 $1,148,601 $1,056,333
========== ========== ==========
Amortization of intangible assets $2,013,087 $2,013,086 $2,013,087
========== ========== ==========
</TABLE>
26
<PAGE> 27
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership itself has no officers or directors. Certain
information concerning the directors and executive officers of the General
Partner is set forth below.
<TABLE>
<CAPTION>
Name Age Positions with the General Partner
---- --- ----------------------------------
<S> <C> <C>
Glenn R. Jones 65 Chairman of the Board and Chief Executive Officer
Derek H. Burney 55 Vice Chairman of the Board
James B. O'Brien 45 President, Chief Operating Officer and Director
Ruth E. Warren 45 Group Vice President/Operations
Kevin P. Coyle 43 Group Vice President/Finance
Christopher J. Bowick 40 Group Vice President/Technology
Timothy J. Burke 44 Group Vice President/Taxation/Administration
Raymond L. Vigil 48 Group Vice President/Human Resources and Director
Cynthia A. Winning 43 Group Vice President/Marketing
Elizabeth M. Steele 43 Vice President/General Counsel/Secretary
Larry W. Kaschinske 35 Controller
James J. Krejci 53 Director
Christine Jones Marocco 39 Director
Daniel E. Somers 47 Director
Robert S. Zinn 58 Director
David K. Zonker 41 Director
</TABLE>
Mr. Glenn R. Jones has served as Chairman of the Board of Directors and
Chief Executive Officer of the General Partner since its formation in 1970, and
he was President from June 1984 until April 1988. Mr. Jones was elected a member
of the Executive Committee of the Board of Directors in April 1985. Mr. Jones is
the sole shareholder, President and Chairman of the Board of Directors of Jones
International, Ltd. He is also Chairman of the Board of Directors of the
subsidiaries of the General Partner and of certain other affiliates of the
General Partner. Mr. Jones has been involved in the cable television business in
various capacities since 1961, is a past and present member of the Board of
Directors of the National Cable Television Association, and is a former member
of its Executive Committee. Mr. Jones is a past director and member of the
Executive Committee of C-Span. Mr. Jones has been the recipient of several
awards including the Grand Tam Award in 1989, the highest award from the Cable
Television Administration and Marketing Society; the Chairman's Award from the
Investment Partnership Association, which is an association of sponsors of
public syndications; the cable television industry's Public Affairs Association
President's Award in 1990, the Donald G. McGannon award for the advancement of
minorities and women in cable; the STAR Award from American Women in Radio and
Television, Inc. for exhibition of a commitment to the issues and concerns of
women in television and radio; and the Women in Cable Accolade in 1990 in
recognition of support of this organization. Mr. Jones is also a founding member
of the James Madison Council of the Library of Congress and is on the Board of
Governors of the American Society of Training and Development.
Mr. Derek H. Burney was appointed a Director of the General Partner in
December 1994 and Vice Chairman of the Board of Directors in January 1995. He is
also a member of the Executive Committee of the Board of Directors. Mr. Burney
joined BCE Inc., Canada's largest telecommunications company, in January 1993 as
Executive Vice President, International. He has been the Chairman of Bell Canada
International Inc., a
27
<PAGE> 28
subsidiary of BCE, since January 1993 and, in addition, has been Chief Executive
Officer of BCI since July 1993. Prior to joining BCE, Mr. Burney served as
Canada's ambassador to the United States from 1989 to 1992. Mr. Burney also
served as chief of staff to the Prime Minister of Canada from March 1987 to
January 1989 where he was directly involved with the negotiation of the U.S. -
Canada Free Trade Agreement. In July 1993, he was named an Officer of the Order
of Canada. Mr. Burney is chairman of Bell Cablemedia plc. He is a director of
Mercury Communications Limited, Videotron Holdings plc, Tele-Direct
(Publications) Inc., Teleglobe Inc., Bimcor Inc., Maritime Telegraph and
Telephone Company, Limited, Moore Corporation Limited and Northbridge
Programming Inc.
Mr. James B. O'Brien, the General Partner's President, joined the
General Partner in January 1982. Prior to being elected President and a Director
of the General Partner in December 1989, Mr. O'Brien served as a Division
Manager, Director of Operations Planning/Assistant to the CEO, Fund Vice
President and Group Vice President/Operations. Mr. O'Brien was appointed to the
General Partner's Executive Committee in August 1993. As President, he is
responsible for the day-to-day operations of the cable television systems
managed and owned by the General Partner. Mr. O'Brien is a board member of
Cable Labs, Inc., the research arm of the U.S. cable television industry. He
also serves as a director of the Cable Television Administration and Marketing
Association and as a director of the Walter Kaitz Foundation, a foundation
that places people of any ethnic minority group in positions with cable
television systems, networks and vendor companies.
Ms. Ruth E. Warren joined the General Partner in August 1980 and has
served in various operational capacities, including system manager and Fund Vice
President, since then. Ms. Warren was elected Group Vice President/Operations of
the General Partner in September 1990.
Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the General Partner in
August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance and Chief Financial Officer in October 1990.
Mr. Christopher J. Bowick joined the General Partner in September 1991
as Group Vice President/Technology and Chief Technical Officer. Previous to
joining the General Partner, Mr. Bowick worked for Scientific Atlanta's
Transmission Systems Business Division in various technical management
capacities since 1981, and as Vice President of Engineering since 1989.
Mr. Timothy J. Burke joined the General Partner in August 1982 as
corporate tax manager, was elected Vice President/Taxation in November 1986 and
Group Vice President/Taxation/Administration in October 1990.
Mr. Raymond L. Vigil joined the General Partner in June 1993 as Group
Vice President/Human Resources. Previous to joining the General Partner, Mr.
Vigil served as Executive Director of Learning with USWest. Prior to USWest, Mr.
Vigil worked in various human resources posts over a 14-year term with the IBM
Corporation.
Ms. Cynthia A. Winning joined the General Partner as Group Vice
President/Marketing in December 1994. Previous to joining the General Partner,
Ms. Winning served since 1994 as the President of PRS Inc., Denver, Colorado, a
sports and event marketing company. From 1979 to 1981 and from 1986 to 1994, Ms.
Winning served as the Vice President and Director of Marketing for Citicorp
Retail Services, Inc., a provider of private-label credit cards for ten national
retail department store chains. From 1981 to 1986, Ms. Winning was the Director
of Marketing Services for Daniels & Associates cable television operations, as
well as the Western Division Marketing Director for Capital Cities Cable. Ms.
Winning also serves as a board Member of Cities in Schools, a dropout
intervention/prevention program.
28
<PAGE> 29
Ms. Elizabeth M. Steele joined the General Partner in August 1987 as
Vice President/General Counsel and Secretary. From August 1980 until joining the
General Partner, Ms. Steele was an associate and then a partner at the Denver
law firm of Davis, Graham & Stubbs, which serves as counsel to the General
Partner.
Mr. Larry Kaschinske joined the General Partner in 1984 as a staff
accountant in the General Partner's former Wisconsin Division; was promoted to
Assistant Controller in 1990 and named Controller in August 1994.
Mr. James J. Krejci was President of the International Division of
International Gaming Technology International headquartered in Reno, Nevada,
until March 1995. Prior to joining IGT in May 1994, Mr. Krejci was Group Vice
President of Jones International, Ltd. and a Group Vice President of the General
Partner. Prior to May 1994, he also served as Group Vice President of Jones
Futurex, Inc., an affiliate of the General Partner engaged in manufacturing and
marketing data encryption devices, Jones Interactive, Inc., a subsidiary of
Jones International, Ltd. providing computer data and billing processing
facilities and Jones Lightwave, Ltd., a company owned by Jones International,
Ltd. and Mr. Jones, which is engaged in the provision of telecommunications
services. Mr. Krejci has been a Director of the General Partner since August
1987.
Ms. Christine Jones Marocco was appointed a Director of the General
Partner in December 1994. She is the daughter of Glenn R. Jones. Ms. Marocco is
also a director of Jones International, Ltd.
Mr. Daniel E. Somers was appointed a Director of the General Partner in
December 1994 and also serves on the General Partner's Audit Committee. From
January 1992 to January 1995, Mr. Somers worked as Senior Vice President and
Chief Financial Officer of Bell Canada International Inc. and was appointed
Executive Vice President and Chief Financial Officer on February 1, 1995. He is
also a Director of certain of its affiliates. Prior to joining Bell Canada
International Inc. and since January 1989, Mr. Somers was the President and
Chief Executive Officer of Radio Atlantic Holdings Limited. Mr. Somers is a
member of the North American Society of Corporate Planning, the Financial
Executives Institution and the Financial Analysts Federation.
Mr. Robert S. Zinn was appointed a Director of the General Partner in
December 1994. Mr. Zinn joined the General Partner in January 1991 and is a
member of its Legal Department. He is also Vice President/Legal Affairs of Jones
International, Ltd. Prior to joining the General Partner, Mr. Zinn was in
private law practice in Denver, Colorado for over 25 years.
Mr. David K. Zonker was appointed a Director of the General Partner in
December 1994. Mr. Zonker has been the President of Jones International
Securities, Ltd., a subsidiary of Jones International, Ltd. since January 1984
and he has been its Chief Executive Officer since January 1988. From October
1980 until joining Jones International Securities, Ltd. in January 1984, Mr.
Zonker was employed by the General Partner. Mr. Zonker is a member of the Board
of Directors of various affiliates of the General Partner, including Jones
International Securities, Ltd. Mr. Zonker is licensed by the National
Association of Securities Dealers, Inc. and he is a past chairman of the
Investment Program Association, a trade organization based in Washington, D.C.
that promotes direct investments. He is a member of the Board of Trustees of
Graceland College, Lamoni, Iowa; the International Association of Financial
Planners and the American and Colorado Institutes of Certified Public
Accountants.
As disclosed in Item 1., on December 10, 1994, Intercable acquired
Spacelink's general partner interest in the Partnership. As a result of this
transaction, the members of the Board of Directors and the executive officers of
Intercable first became obligated to file reports pursuant to Section 16(a) of
the Securities Exchange Act of 1934, as amended, to disclose their ownership of
limited partnership interests of the Partnership. Given the complexities of
closing the Intercable/Spacelink transaction, this filing obligation was
overlooked, and the directors and executive officers of Intercable did not file
such reports on a timely basis (the reports were filed in March 1995). The
directors and executive officers have not owned and do not own any limited
partnership interests in the Partnership.
29
<PAGE> 30
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are
required to operate the cable television systems owned by the Partnership. Such
personnel are employed by the General Partner and, pursuant to the terms of the
limited partnership agreement of the Partnership, the cost of such employment is
charged by the General Partner to the Partnership as a direct reimbursement
item. See Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
No person or entity owns more than 5 percent of the limited partnership
interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates engage in certain transactions
with the Partnership as contemplated by the limited partnership agreement of the
Partnership. The General Partner believes that the terms of such transactions
are generally as favorable as could be obtained by the Partnership from
unaffiliated parties. This determination has been made by the General Partner in
good faith, but none of the terms were or will be negotiated at arm's-length and
there can be no assurance that the terms of such transactions have been or will
be as favorable as those that could have been obtained by the Partnership from
unaffiliated parties.
The General Partner charges the Partnership a management fee, and the
Partnership reimburses the General Partner for certain allocated overhead and
administrative expenses in accordance with the terms of the limited partnership
agreement of the Partnership. These expenses consist primarily of salaries and
benefits paid to corporate personnel, rent, data processing services and other
facilities costs. Such personnel provide engineering, marketing, administrative,
accounting, legal and investor relations services to the Partnership.
Allocations of personnel costs are based primarily on actual time spent by
employees of the General Partner with respect to the Partnership managed.
Remaining overhead costs are allocated based on revenues and/or the costs of
assets managed for the Partnership. Systems owned by the General Partner and all
other systems owned by partnerships for which Jones Intercable, Inc. is the
general partner, are also allocated a proportionate share of these expenses.
The General Partner also advances funds and charges interest on the
balance payable from the Partnership. The interest rate charged the Partnership
approximates the General Partner's weighted average cost of borrowing.
The Systems receive stereo audio programming from Superaudio, a joint
venture owned 50% by an affiliate of the General Partner and 50% by an
unaffiliated party, educational video programming from Mind Extension
University, Inc., an affiliate of the General Partner, and computer video
programming from Jones Computer Network, Ltd., an affiliate of the General
Partner, for fees based upon the number of subscribers receiving the
programming.
Product Information Network ("PIN"), an affiliate of the General
Partner, provides advertising time for third parties on the Systems. In
consideration, the revenues generated from the third parties are shared
two-thirds and one-third between PIN and the Partnership. During the year ended
December 31, 1994, the Partnership received revenues from PIN of $461.
The charges to the Partnership for related party transactions are as
follows for the periods indicated:
<TABLE>
<CAPTION>
Jones Spacelink Income/Growth Fund 1-A, Ltd. At December 31,
-------------------------------------------- --------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Management fees $322,047 $310,716 $289,890
Allocation of expenses 532,657 497,042 463,105
Interest expense 24,392 3,167 3,672
Amount of advances outstanding 44,786 584,196 101,372
Highest amount of advances outstanding 816,671 984,476 715,294
Programming fees:
Superaudio 11,575 11,098 9,949
Mind Extension University 10,339 6,649 6,198
Jones Computer Network 310 -0- -0-
</TABLE>
30
<PAGE> 31
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
<TABLE>
<S> <C>
(a)1. See index to financial statements for a list of financial statements and exhibits thereto
filed as part of this report.
3. The following exhibits are filed herewith:
4.1 Limited Partnership Agreement for Jones Spacelink Income/Growth Fund 1-A, Ltd. (1)
10.1.1 Copy of franchise and related documents granting a cable television system franchise for the
County of Adams, Indiana. (1)
10.1.2 Copy of franchise and related documents granting a cable television system franchise for the
County of Allen, Indiana. (1)
10.1.3 Copy of franchise and related documents granting a cable television system franchise for the
City of Auburn, Indiana. (1)
10.1.4 Copy of franchise and related documents granting a cable television system franchise for the
City of Bluffton, Indiana. (1)
10.1.5 Copy of franchise and related documents granting a cable television system franchise for the
City of Butler, Indiana. (1)
10.1.6 Copy of franchise and related documents granting a cable television system franchise for the
City of Decatur, Indiana. (1)
10.1.7 Copy of franchise and related documents granting a cable television system franchise for the
County of DeKalb, Indiana. (1)
10.1.8 Copy of franchise and related documents granting a cable television system franchise for the
City of Garrett, Indiana. (1)
10.1.9 Copy of franchise and related documents granting a cable television system franchise for the
County of Adams, Indiana. (1)
10.1.10 Copy of franchise and related documents granting a cable television system franchise for the
Town of Monroe, Indiana. (1)
10.1.11 Copy of franchise and related documents granting a cable television system franchise for the
County of Noble, Indiana. (1)
10.1.12 Copy of franchise and related documents granting a cable television system franchise for the
Town of Poneto, Indiana. (1)
10.1.13 Copy of franchise and related documents granting a cable television system franchise for the
Town of Uniondale, Indiana. (1)
10.1.14 Copy of franchise and related documents granting a cable television system franchise for the
Town of Vera Cruz, Indiana. (1)
</TABLE>
31
<PAGE> 32
<TABLE>
<S> <C>
10.1.15 Copy of franchise and related documents granting a cable television system franchise for the
Town of Waterloo, Indiana. (1)
10.1.16 Copy of franchise and related documents granting a cable television system franchise for the
County of Wells, Indiana. (1)
10.1.17 Copy of franchise and related documents granting a cable television system franchise for the
Town of Bloomfield, Wisconsin. (2)
10.1.18 Copy of franchise and related documents granting a cable television system franchise for the
Town of Geneva, Wisconsin. (2)
10.1.19 Copy of franchise and related documents granting a cable television system franchise for the
City of Lake Geneva, Wisconsin. (2)
10.1.20 Copy of franchise and related documents granting a cable television system franchise for the
Town of Linn, Wisconsin. (2)
10.1.21 Copy of franchise and related documents granting a cable television system franchise for the
Town of Lyons, Wisconsin. (2)
10.1.22 Copy of franchise and related documents granting a cable television system franchise for the
City of Ripon, Wisconsin. (2)
10.1.23 Copy of franchise and related documents granting a cable television system franchise for the
Town of Ripon, Wisconsin. (2)
10.2.1 Credit and Security Agreement dated as of March 6, 1991 among Jones Spacelink Income/Growth
Fund 1-A, Ltd. and Credit Lyonnais New York Branch, as agent for various lenders. (3)
10.2.2 Amendment No. 2 dated as of September 30, 1994 to the Credit and Security Agreement dated as
of March 6, 1991 among Jones Spacelink Income/Growth Fund 1-A, Ltd. and Credit Lyonnais New
York Branch, as agent for various lenders.
10.2.3 Amendment No. 3 dated as of December 16, 1994 to the Credit and Security Agreement dated as of
March 6, 1991 among Jones Spacelink Income/Growth Fund 1-A, Ltd. and Credit Lyonnais New York
Branch, as agent for various lenders.
10.3.1 Purchase and Sale Agreement dated as of November 16, 1990, by and between Jones Spacelink,
Ltd. and Ripon Cable Company, Inc. (4)
10.3.2 Assignment and Assumption Agreement dated as of January 4, 1992, by and between the
Partnership and Jones Spacelink, Ltd. relating to the Ripon System. (4)
10.3.3 Purchase and Sale Agreement dated as of November 16, 1990, by and between Jones Spacelink,
Ltd. and Southern Wisconsin Cable, Inc.. (4)
10.3.4 Assignment and Assumption Agreement dated as of January 4, 1992, by and between the
Partnership and Jones Spacelink, Ltd. relating to the Lake Geneva System. (4)
27 Financial Data Schedule
</TABLE>
----------
32
<PAGE> 33
<TABLE>
<S> <C>
(1) Incorporated by reference from the Partnership's Annual Report on Form 10-K for fiscal year
ended 12/31/88.
(2) Incorporated by reference from the Partnership's Annual Report on Form 10-K for fiscal year
ended 12/31/90.
(3) Incorporated by reference from the Partnership's Annual Report on Form 10-K for fiscal year
ended 12/31/91.
(4) Incorporated by reference from the Partnership's Current Report on Form 8-K dated January 11,
1991.
(b) Reports on Form 8-K
None.
</TABLE>
33
<PAGE> 34
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JONES SPACELINK INCOME/
GROWTH FUND 1-A, LTD.
a Colorado limited partnership
By: Jones Intercable, Inc.
By: /s/ Glenn R. Jones
---------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 27, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/ Glenn R. Jones
---------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 27, 1995 (Principal Executive Officer)
By: /s/ Kevin P. Coyle
---------------------------------
Kevin P. Coyle
Group Vice President/Finance
Dated: March 27, 1995 (Principal Financial Officer)
By: /s/ Larry Kaschinske
---------------------------------
Larry Kaschinske
Controller
Dated: March 27, 1995 (Principal Accounting Officer)
By: /s/ James B. O'Brien
---------------------------------
James B. O'Brien
Dated: March 27, 1995 President and Director
By: /s/ Raymond L. Vigil
---------------------------------
Raymond L. Vigil
Dated: March 27, 1995 Group Vice President and Director
By: /s/ Robert S. Zinn
---------------------------------
Robert S. Zinn
Dated: March 27, 1995 Director
34
<PAGE> 35
By: /s/ David K. Zonker
---------------------------------
David K. Zonker
Dated: March 27, 1995 Director
By:
---------------------------------
Derek H. Burney
Dated: Director
By:
---------------------------------
William Frenzel
Dated: Director
By:
---------------------------------
Donald L. Jacobs
Dated: Director
By:
---------------------------------
James J. Krejci
Dated: Director
By:
---------------------------------
Philip R. Ladouceur
Dated: Director
By:
---------------------------------
Christine Jones Marocco
Dated: Director
By:
---------------------------------
Daniel E. Somers
Dated: Director
By:
---------------------------------
Robert B. Zoellick
Dated: Director
35
<PAGE> 36
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
------- ----
<S> <C> <C>
4.1 Limited Partnership Agreement for Jones Spacelink Income/Growth Fund 1-A, Ltd. (1)
10.1.1 Copy of franchise and related documents granting a cable television system franchise for the
County of Adams, Indiana. (1)
10.1.2 Copy of franchise and related documents granting a cable television system franchise for the
County of Allen, Indiana. (1)
10.1.3 Copy of franchise and related documents granting a cable television system franchise for the
City of Auburn, Indiana. (1)
10.1.4 Copy of franchise and related documents granting a cable television system franchise for the
City of Bluffton, Indiana. (1)
10.1.5 Copy of franchise and related documents granting a cable television system franchise for the
City of Butler, Indiana. (1)
10.1.6 Copy of franchise and related documents granting a cable television system franchise for the
City of Decatur, Indiana. (1)
10.1.7 Copy of franchise and related documents granting a cable television system franchise for the
County of DeKalb, Indiana. (1)
10.1.8 Copy of franchise and related documents granting a cable television system franchise for the
City of Garrett, Indiana. (1)
10.1.9 Copy of franchise and related documents granting a cable television system franchise for the
County of Adams, Indiana. (1)
10.1.10 Copy of franchise and related documents granting a cable television system franchise for the
Town of Monroe, Indiana. (1)
10.1.11 Copy of franchise and related documents granting a cable television system franchise for the
County of Noble, Indiana. (1)
10.1.12 Copy of franchise and related documents granting a cable television system franchise for the
Town of Poneto, Indiana. (1)
10.1.13 Copy of franchise and related documents granting a cable television system franchise for the
Town of Uniondale, Indiana. (1)
10.1.14 Copy of franchise and related documents granting a cable television system franchise for the
Town of Vera Cruz, Indiana. (1)
</TABLE>
<PAGE> 37
<TABLE>
<CAPTION>
EXHIBIT PAGE
-------- ----
<S> <C> <C>
10.1.15 Copy of franchise and related documents granting a cable television system franchise for the
Town of Waterloo, Indiana. (1)
10.1.16 Copy of franchise and related documents granting a cable television system franchise for the
County of Wells, Indiana. (1)
10.1.17 Copy of franchise and related documents granting a cable television system franchise for the
Town of Bloomfield, Wisconsin. (2)
10.1.18 Copy of franchise and related documents granting a cable television system franchise for the
Town of Geneva, Wisconsin. (2)
10.1.19 Copy of franchise and related documents granting a cable television system franchise for the
City of Lake Geneva, Wisconsin. (2)
10.1.20 Copy of franchise and related documents granting a cable television system franchise for the
Town of Linn, Wisconsin. (2)
10.1.21 Copy of franchise and related documents granting a cable television system franchise for the
Town of Lyons, Wisconsin. (2)
10.1.22 Copy of franchise and related documents granting a cable television system franchise for the
City of Ripon, Wisconsin. (2)
10.1.23 Copy of franchise and related documents granting a cable television system franchise for the
Town of Ripon, Wisconsin. (2)
10.2.1 Credit and Security Agreement dated as of March 6, 1991 among Jones Spacelink Income/Growth
Fund 1-A, Ltd. and Credit Lyonnais New York Branch, as agent for various lenders. (3)
10.2.2 Amendment No. 2 dated as of September 30, 1994 to the Credit and Security Agreement dated as
of March 6, 1991 among Jones Spacelink Income/Growth Fund 1-A, Ltd. and Credit Lyonnais New
York Branch, as agent for various lenders.
10.2.3 Amendment No. 3 dated as of December 16, 1994 to the Credit and Security Agreement dated as of
March 6, 1991 among Jones Spacelink Income/Growth Fund 1-A, Ltd. and Credit Lyonnais New York
Branch, as agent for various lenders.
10.3.1 Purchase and Sale Agreement dated as of November 16, 1990, by and between Jones Spacelink,
Ltd. and Ripon Cable Company, Inc. (4)
10.3.2 Assignment and Assumption Agreement dated as of January 4, 1992, by and between the
Partnership and Jones Spacelink, Ltd. relating to the Ripon System. (4)
10.3.3 Purchase and Sale Agreement dated as of November 16, 1990, by and between Jones Spacelink,
Ltd. and Southern Wisconsin Cable, Inc.. (4)
10.3.4 Assignment and Assumption Agreement dated as of January 4, 1992, by and between the
Partnership and Jones Spacelink, Ltd. relating to the Lake Geneva System. (4)
27 Financial Data Schedule
</TABLE>
----------
<PAGE> 38
<TABLE>
<CAPTION>
<S> <C>
(1) Incorporated by reference from the Partnership's Annual Report on Form 10-K for fiscal year
ended 12/31/88.
(2) Incorporated by reference from the Partnership's Annual Report on Form 10-K for fiscal year
ended 12/31/90.
(3) Incorporated by reference from the Partnership's Annual Report on Form 10-K for fiscal year
ended 12/31/91.
(4) Incorporated by reference from the Partnership's Current Report on Form 8-K dated January 11,
1991.
</TABLE>
<PAGE> 1
AMENDMENT NO. 2 (the "Amendment") dated as of
September 30, 1994 to the Credit and Security Agreement
dated as of March 6, 1991, as amended by Amendment No.
1 thereto dated as of March 30, 1994 ( the "Agreement"),
among JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.,
a Colorado limited partnership (the "Borrower"), THE
LENDERS REFERRED TO THEREIN (the "Lenders" ) and CREDIT
LYONNAIS NEW YORK BRANCH, as agent for the Lenders
(the "Agent" ).
INTRODUCTORY STATEMENT
All capitalized terms not otherwise defined in this Amendment
are used herein as defined in the Agreement.
The Borrower has requested that the Agreement be amended (i) to
increase the amount of the Commitments to $14,000,000 and (ii) to modify
the provisions of the Agreement as hereinafter set forth.
In consideration of the mutual agreements contained herein and
other good and valuable consideration, the parties hereto hereby agree as
follows-
SECTION 1. Amendment to the Agreement. Subject to the
provisions of Section 4 hereof, the Agreement is hereby amended effective
as of September 30, 1994 as follows:
(A) The definition of "Conversion Date" appearing in Article 1
of the Agreement is hereby amended in its entirety to read as follows:
"'Conversion Date' shall mean December 31, 1996."
(B) The following definition is hereby inserted in Article 1 of
the Agreement in the correct alphabetical sequence:
"'Applicable Margin' shall be as defined in Section 2.05(c)."
(C) The third sentence of Section 2.04(a) of the Agreement is
hereby amended in its entirety to read as follows:
<PAGE> 2
"The principal amount of the Term Loan shall be payable in quarterly
installments commencing on March 31, 1997 and on each June 30, September
30, December 31 and March 31 thereafter through and including December 31,
1999, in accordance with the following amortization schedule:
<TABLE>
<CAPTION>
AMOUNT OF INSTALLMENT AS A
PERCENTAGE OF ORIGINAL
PAYMENT DATE PRINCIPAL AMOUNT OF TERM LOAN
------------ -----------------------------
<S> <C>
March 31, 1997 1.25%
June 30, 1997 1.25%
September 30, 1997 1.25%
December 31, 1997 1.25%
March 31, 1998 2.50%
June 30, 1998 2.50%
September 30, 1998 2.50%
December 31, 1998 2.50%
March 31, 1999 2.50%
June 30, 1999 2.50%
September 30, 1999 2.50%
December 31, 1999 77.50%
</TABLE>
provided, however, that the final installment on December 31, 1999
shall be in the amount required pay the remaining outstanding
principal balance of the Term Loan in full."
(D) The first sentence of Section 2.05(a) of the Agreement is
hereby amended by deleting the figure "1-1/8%" appearing therein and
inserting the words "the Applicable Margin" in lieu thereof.
(E) The first sentence of Section 2.05(b) is hereby amended by
adding the words "plus the Applicable Margin" at the end of the existing
text.
(F) Section 2.05(c) of the Agreement is hereby amended in its
entirety to read as follows:
"(c) The Applicable Margin for all times during the applicable
periods set forth below shall mean: (a) with respect to Eurodollar
Loans, the applicable percentage set forth below in the column
captioned "LIBO Applicable Margin", and (b) with respect to Alternate
Base Rate Loans, the applicable percentage set forth below in the
column captioned "Base Rate Applicable Margin".
- 2 -
<PAGE> 3
<TABLE>
<CAPTION>
WHEN THE RATIO OF TOTAL LIBO BASE RATE
DEBT TO ANNUALIZED APPLICABLE APPLICABLE
OPERATING CASH FLOW IS: MARGIN MARGIN
----------------------- ---------- ----------
<S> <C> <C>
Less than 4.00:1.00 but
greater than or equal to
3.50:1.00 1-3/8% 3/8%
Less than 3.50:1.00
but greater than
or equal to 3.00:1.00 1-1/4% 1/4%
Less than 3.00:1.00 1-1/8% 0%
</TABLE>
For purposes of determining the Applicable Margin, the ratio of Total
Debt to Annualized Operating Cash Flow shall be calculated and the
Applicable Margin shall be determined quarterly. Any change in the
Applicable Margin shall be prospective and shall take effect on the
tenth Business Day following receipt by the Agent of the statement
contemplated by Section 5.O1(c) which evidences that such change in
the Applicable Margin is required. If Borrower shall fail to make
timely delivery of such certificate, the Applicable Margin shall
immediately thereafter continue to be or be changed to the maximum
amount set forth for each type of Loan set forth in the table above
taking effect as set forth in the preceding sentence, until such time
as such certificate is delivered."
(G) Section 2.16 of the Agreement is hereby deleted in its
entirety.
(H) Section 3.05 of the Agreement is hereby amended by
deleting the date "September 30, 1990" appearing therein and inserting the
date "June 30, 1994" in lieu thereof.
(I) Section 6.13 of the Agreement is hereby amended in its
entirety to read as follows:
"SECTION 6.13. Debt Service Coverage Ratio.
Permit the ratio of Annualized Operating Cash Flow of the
Borrower to Pro-Forma Debt Service of the Borrower to be less than
1.50:1.00 as at the last day of any fiscal quarter."
- 3 -
<PAGE> 4
(J) Section 6.14 of the Agreement is hereby amended in its
entirety to read as follows:
"SECTION 6.14. Total Debt to Cash Flow Ratio of the Borrower.
Permit the ratio of Total Debt of the Borrower to Annualized
Operating Cash Flow of the Borrower:
(i) at any time through and including March 31, 1997, to exceed
4.00-1.00;
(ii) at any time from April 1, 1997 through and including March
31, 1998, to exceed 3.50-1.00; and
(iii) at any time on or after April 1, 1998, to exceed
3.00:1.00."
(K) The Schedules to the Agreement are hereby amended in their
entirety by replacing them with the Schedules which are annexed hereto.
SECTION 2. Additional Facility Fee. The Borrower hereby agrees
to pay to the Agent (for the benefit of each of the Lenders whose
Commitment under the Agreement shall increase upon the effectiveness of
this Amendment), a fee in an amount equal to 1/2 of 1% of the amount of the
increase in each Lender's Commitment. The foregoing fee referred to in
this paragraph shall be hereinafter referred to as the "Additional Facility
Fee". The Borrower hereby agrees that the Additional Facility Fee shall be
paid in immediately available funds and once paid, shall not be refundable
under any circumstances.
SECTION 3. Existing Term Loans. Subject to the provisions of
Section 4 hereof, the parties hereto hereby agree that as of September 30,
1994, all Term Loans existing on September 30, 1994 shall be deemed to be
Revolving Credit Loans under the Agreement.
SECTION 4. Conditions to Effectiveness. The effectiveness of
this Amendment is subject to the satisfaction in full of the following
conditions precedent:
(A) the Agent shall have received executed counterparts of this
Amendment, which, when taken together, bear the signatures of the Borrower
and those Lenders required by Section 10.09 of the Agreement;
- 4 -
<PAGE> 5
(B) the Agent shall have received new promissory notes
substantially in the form of Exhibit A to the Agreement, duly executed on
behalf of the Borrower and payable to the order of each Lender in the
principal amount equal to such Lender's respective Commitment after giving
effect to this Amendment (each such note shall be referred to herein
individually as a "New Note" and collectively as the "New Notes" );
(C) the Agent shall have received the favorable written opinion
of Elizabeth M. Steele, General Counsel of Jones Spacelink, Ltd., addressed
to the Agent and the Lenders, covering such matters as are specified by
counsel to the Agent and in form and substance satisfactory to counsel for
the Agent;
(D) the Agent shall have received a certificate of the
Secretary of the General Partner certifying (i) that attached thereto is a
true and complete copy of resolutions adopted by the Board of Directors of
the General Partner authorizing the execution and delivery of this
Amendment, the New Notes and any other documents required or contemplated
hereby, the performance in accordance with its terms of the Agreement (as
amended by Amendment No. 1 thereto dated as of March 30, 1994 and by this
Amendment) and the New Notes, and the borrowings thereunder; (ii) that the
copies of the Partnership Agreement and the articles of incorporation and
by-laws of the General Partner heretofore delivered to the Agent are
complete and correct and that the Partnership Agreement and such articles
of incorporation and by-laws have not been amended since the respective
dates of the last amendments thereto included or reflected in such copies,
or, if the Partnership Agreement or the articles of incorporation or
by-laws of the General Partner shall have been amended since such
respective dates, certifying that attached thereto are copies of all of the
amendments and that such copies are complete and correct and that such
copies, taken together with the copies of the Partnership Agreement and the
certificate of incorporation and by-laws of the General Partner previously
delivered to the Agent constitute complete and correct copies of the
Partnership Agreement and the articles of incorporation and by-laws of the
General Partner all as in effect on the date of such certificate, there
having been no further amendments to the Partnership Agreement or such
articles of incorporation or by-laws, and (iii) as to the incumbency and
specimen signature of each officer of the General Partner executing this
Amendment, the New Notes or any other document required or contemplated
hereby (such certificate to contain a certification by another officer of
the General Partner as to the incumbency
- 5 -
<PAGE> 6
and signature of the officer signing the certificate referred to in this
Section 3(D)),
(E) the Agent shall have received the Additional Facility Fee,
and
(F) all legal matters in connection with this Amendment shall
be reasonably satisfactory to counsel for the Agent.
SECTION 5. Post-Closing Matter. The Borrower hereby agrees to
deliver to the Agent by November 15, 1994, an amendment to each of the
Mortgages, which amendment shall be duly executed on behalf of the Borrower
and shall be in form and substance satisfactory to the Agent.
SECTION 6. Representations and Warranties. The Borrower
represents and warrants to the Lenders that, after giving effect to this
Amendment:
(A) the representations and warranties contained in the
Agreement and in the other Fundamental Documents are true and correct in
all material respects on and as of the date hereof as if such
representations and warranties had been made on and as of the date hereof
(except to the extent such representations and warranties expressly relate
to an earlier date); and
(B) the Borrower is in compliance with all the terms and
provisions set forth in the Agreement and no Default or Event of Default
has occurred or is continuing under the Agreement.
SECTION 7. Full Force and Effect.
(A) Except as expressly set forth herein, this Amendment does
not constitute a waiver or modification of any provision of the Agreement
or a waiver of any Default or Event of Default under the Agreement, in
either case whether or not known to the Agent. Except as expressly amended
hereby, the Agreement shall continue in full force and effect in accordance
with the provisions thereof on the date hereof. As used in the Agreement,
the terms "Credit Agreement", "this Agreement", "herein", "hereafter",
"hereto", "hereof", and words of similar import, shall, unless the
context otherwise requires, mean the Agreement as amended by this
Amendment. References to the terms "Agreement" or "Credit Agreement"
appearing in the Exhibits or Schedules to the Agreement, shall, unless the
context otherwise requires, mean the Agreement as amended by this
Amendment.
- 6 -
<PAGE> 7
(B) References to any of the Schedules to the Agreement,
appearing in the Agreement or in the Exhibits or Schedules to the
Agreement, shall, unless the context otherwise requires, mean the
respective Schedule which is attached to this Amendment.
(C) References to the terms "Note" or "Notes" appearing in the
Agreement or in the Exhibits or Schedules to the Agreement, shall, unless
the context otherwise requires, mean the New Notes.
SECTION 8. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF
NEW YORK.
SECTION 9. Counterparts. This Amendment may be executed in
two or more counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute but one instrument.
SECTION 10. Expenses. The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by the Agent in connection with
the preparation, execution and delivery of this Amendment and any other
documentation contemplated hereby, including, but not limited to, the
reasonable fees and disbursements of counsel for the Agent.
SECTION 11. Headings. The headings of this Amendment are for
the purposes of reference only and shall not affect the construction of or
be taken into consideration in interpreting this Amendment.
- 7 -
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their duly authorized officers, all as of the date and
year first written above.
BORROWER:
JONES SPACELINK INCOME/GROWTH
FUND 1-A, LTD.
By: Jones Spacelink, Ltd.,
its General Partner
By: \s\ JAY B. LEWIS
Name: Jay B. Lewis
Title: Treasurer
CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Agent
By: /s/ BRUCE M. YEAGER
Name: Bruce M. Yeager
Title: First Vice President
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH, individually
By: /s/ BRUCE M. YEAGER
Name: Bruce M. Yeager
Title: Authorized Signature
- 8 -
<PAGE> 9
SCHEDULE 1
SCHEDULE OF COMMITMENTS
<TABLE>
<CAPTION>
Revolving Term
Credit Loan Total
Lender Commitment Commitment Commitments Percentage
------ ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Credit Lyonnais $14,000,000 $14,000,000 $14,000,000 100%
</TABLE>
- 9 -
<PAGE> 10
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13246
09/29/94
Page 1
SCHEDULE 2
Real Property
WISCONSIN SYSTEMS:
Ripon - Real Property Owned
1. Tower Site. Conveyed by Warranty Deed dated March 7, 1991, recorded
March 18, 1991, Vol. 1037, Page 198-200, Fond du Lac County,
Wisconsin, from Ripon Cable Company, Inc. to Jones Spacelink
Income/Growth Fund 1-A, Ltd., the following described property:
That part of the NE 1/4 SE 1/4 of Section 19, T16N, R14E, Town of
Ripon, Fond du Lac County, Wisconsin, described as follows:
Commencing at the Northeast corner of the SE/4 of Section 19, thence
South 420.00 feet, thence South 89 degrees 57' West 550.00 feet, thence
North 420.00 feet, thence North 89 degrees 57' East 550.00 feet to
place of beginning.
Tax Key No. T17-16-14-19-13-002
Record Owner: Jones Spacelink Income/Growth Fund 1-A, Ltd.
<PAGE> 11
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13246
09/29/94
Page 2
Lake Geneva - Real Property Owned
1. Tower site. Conveyed by Warranty Deed dated March 7, 1991, recorded
March 18, 1991, Vol. 513, Page 787, Walworth County, Wisconsin,
from Southern Wisconsin Cable, Inc. to Jones Spacelink Income/Growth
Fund 1-A, Ltd., the following described property:
Lot 1 of Certified Survey Map No. 1556, located in the SE/4 of Section
21, T2N, R17E, Walworth County, Wisconsin, recorded December 2, 1986 in
Volume 7 of Certified Surveys, Page 193 as Document No. 138550.
Tax Key No. JA 1556 00001
Record Owner: Jones Spacelink Income/Growth Fund 1-A, Ltd.
<PAGE> 12
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13246
09/29/94
Page 3
Indiana - Real Property Leased
1. Lease dated April 23, 1991, and recorded July 30, 1992 as Record WW,
Page 277, DeKalb County, Indiana, between The City of Butler, Indiana
and Jones Spacelink Income/Growth Fund 1-A, Ltd. for a headend site in
Butler, Indiana. (Consent to grant security interest denied.)
Description of Property:
The lease is for the right to place certain antennae on a city-owned
water tower and to place a tower and earth station and related
equipment on a parcel of real estate 25'X48' immediately adjacent to
the existing water tower in the City of Butler, located south of
Railroad Street and between Willow Street, Broadway Street and Depot
Street.
Expiration Date: May 1, 2001
Record Owner: City of Butler, Indiana
<PAGE> 13
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13246
09/29/94
Page 4
2. Lease dated February 6, 1976, as amended, between Jones Spacelink
Income/Growth Fund 1-A, Ltd., successor to Jones Spacelink, Ltd. and
DeKalb Cable Company, and Evans Auburn, Inc., successor to Ball Brass
and Aluminum Foundry, Inc., for a tower site in Auburn, Indiana;
Memorandum of Lease dated April 24, 1991, between Evans Auburn,
Inc. and Jones Spacelink Income/Growth Fund 1-A, Ltd., recorded
May 8, 1991, as Record UU, Page 407, DeKalb County, Indiana.
Description of Property:
The lease is for a tower site approximately 30'X30' located on the
following described property:
A part of the South half of the North East quarter of Section thirty
one (31) Township thirty four (34) North Range thirteen (13) East,
described as follows, to-wit:
Commencing at the South East comer of lot numbered one hundred fourteen
(114) of Fluke's Third Addition to the City of Auburn, Indiana, thence
East a distance of thirty (30) feet to a stone monument, located at the
North West comer of land owned by Cornelia Caruth, thence South along
the West boundary line of said Carnelia Caruth land, thirteen (13)
chains and forty five (45) links, more or less, to a stone monument and
to the quarter line, thence West ten (10) chains and seventy three (73)
links, more or less, to the East boundary line of the Right of Way of
the New York Central Railway, thence in a North Easterly direction
along the East boundary line of said Right of Way to a point of
intersection with a line drawn East and West, one hundred fifty (150)
feet South of and parallel with the South line of lot numbered one
hundred fourteen (114) of Fluke's third addition to the City of Auburn,
Indiana; thence East along said line to the extended East line of said
lot; thence North along said extended East line of said lot to the
point of beginning, located in the City of Auburn, DeKalb County,
Indiana.
<PAGE> 14
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13246
09/29/94
Page 5
Subject to an easement made in deed to Ella Pomeroy and Minnie G.
Grosscup on May 3, 1945; to a strip of land thirty (30) feet wide, East
and West, and one hundred fifty (150) feet, North and South, adjoining
the extended East line of above mentioned lot numbered one hundred
fourteen (114).
Expiration Date: February 5, 1996
Record Owner: Evans Auburn, Inc.
<PAGE> 15
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13246
09/29/94
Page 6
3. Lease dated August 1, 1991 and recorded August 20, 1991, Record 38,
Page 388-393, Adams County, Indiana, between Jones Spacelink
Income/Growth Fund 1-A, Ltd. and Knights of Columbus Building
Association for a headend site in Washington Township, Indiana.
Description of Property:
The lease covers three acres out of the center and north side of the
following described real estate, to-wit:
Commencing at a point 594 feet east of the Northwest corner of the
Southwest Quarter of Section 11, Township 27 North, Range 14 East, as a
place of beginning; thence continuing in an easterly direction along
the north line of said Southwest Quarter a distance of 726 feet; thence
in a southerly direction parallel to the west line of said Southwest
Quarter, a distance of 600 feet; thence in a westerly direction and
parallel to the north line of said Southwest Quarter, a distance of 726
feet; thence in a northerly direction parallel to the west line of said
Southwest Quarter a distance of 600 feet to the place of beginning
containing 10 acres more or less.
Lessor further grants to Lessee the right of ingress and egress on and
upon its presently existing roadway existing on the real estate
described as follows, to-wit:
Commencing at the Northwest corner of the Southwest Quarter of Section
11, Township 27 North, Range 14 East, in Adams County, Indiana, thence
east 594 feet to an iron pin; thence south six hundred (600) feet
parallel with the west line of said section to an iron pin; thence west
five hundred ninety-four (594) feet to the west line of said section;
thence north along said section line six hundred (600) feet to the
place of beginning, containing 8.18 acres more or less, subject to
existing road right of way.
Expiration Date: July 31, 2006
Record Owner: Knights of Columbus Building Association
<PAGE> 16
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13246
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Page 7
4. Lease dated December 15, 1975, between Moser Implement Co., Inc., and
Bluffton Cable Co., which was recorded on July 28, 1976, as Instrument
#16506 in Miscellaneous Records Book 48, Page 979, of the Records of
Wells County, Indiana.
Amendment to Lease dated October 1, 1987, between Moser Implement Co.,
Inc., and Bluffton Cable Co., which was recorded on October 12, 1987,
as Instrument #35778 in Miscellaneous Records Book 48, Page 979, of the
Records of Wells County, Indiana.
Consent to and Ratification of Amendment to Lease dated September 22,
1988, by Moser Enterprises, Inc., successor in interest to Moser
Implement Co., Inc., which was recorded on September 23, 1988, as
Instrument #40027 in Miscellaneous Records Book 48, Page 979, of the
Records of Wells County, Indiana.
Letter dated September 22, 1988, by Moser Enterprises, Inc., consenting
to an assignment of lessee's interest in the Lease to Jones Spacelink,
Ltd. or its assigns, and to subsequent assignments to and among its
affiliates, and further, consenting to the granting of a security
interest in the Lease by Jones Spacelink, Ltd. and/or any of its
affiliates.
Assignment and Assumption Agreement, dated September 30, 1988, from
Bluffton Cable Co. to Jones Spacelink, Ltd., which was recorded on
March 14, 1991, as Instrument #53151 in Miscellaneous Records Book 48,
Page 979, of the Records of Wells County, Indiana.
Assignment and Assumption Agreement, dated November 16, 1988, from
Jones Spacelink, Ltd., to Jones Spacelink Income/Growth Fund 1-A, Ltd.,
which was recorded on March 14, 1991, as Instrument #53152 in
Miscellaneous Records Book 48, Page 979, of the Records of Wells
County, Indiana.
Description of Property: Plat of Survey No. 4-76-4776
Tract E-F-G-H-J-K-L-M
A part of the NW/4 of Section 10, Township 26 north, Range 12 east,
Harrison Township, Bluffton, Indiana described as follows:
<PAGE> 17
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Starting at the NW corner of said NW/4 marked by an iron stake found
this survey, thence easterly 750.0 feet on the north line of said NW/4;
thence southerly, deflecting right 89 degrees 58 minutes 28 seconds,
175.0 feet parallel with the west line of said NW/4, which shall be the
place of beginning;
thence continuing southerly, parallel with the west line of said NW/4,
325.0 feet; thence westerly, deflecting right 90 degrees 01 minutes 32
seconds, 36.0 feet parallel with the north line of said NW/4; thence
southerly, deflecting left 90 degrees 01 minutes 32 seconds, 60.0 feet
parallel with the west line of said NW/4 to a standard corner marker
(5/8" x 15" reinforcing bar stake with an aluminum cap stamped Higman,
10025) set this survey; thence westerly, deflecting right 90 degrees
01 minutes 32 seconds, 414.0 feet parallel with the north line of said
NW/4 to a standard corner marker set this survey; thence northerly,
deflecting right 89 degrees 58 minutes 28 seconds, 260.0 feet parallel
with the west line of said NW/4; thence easterly, deflecting right 90
degree 01 minutes 32 seconds, 200.0 feet parallel with the north line
of said NW/4; thence northerly, deflecting left 90 degrees 01 minutes
32 seconds, 125.0 feet parallel with the west line of said NW/4; thence
easterly, deflecting right 90 degrees 01 minutes 32 seconds, 250.0 feet
parallel with the north line of said NW/4 to the place of beginning;
Containing in all 3.35 acres.
The lease is subject to the rights of Panhandle Eastern Pipe Line
Company with respect to three natural gas lines which cross the subject
property.
All as shown on a plat of survey number 4-76-4776 dated April 19, 1976
by R.K. Higman, Land Surveyor number 10025, Indiana.
Expiration Date: April 10, 2003
Record Owner: Moser Enterprises, Inc.
<PAGE> 18
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SCHEDULE 3.03
Governmental Approvals
WISCONSIN SYSTEMS:
All FCC Licenses: (see Schedule 3.21B for additional information)
The Federal Communications Commission prohibits the granting of a security
interest in FCC licenses.
INDIANA SYSTEM:
All FCC Licenses: (see Schedule 3.21B for additional information)
The Federal Communications Commission prohibits the granting of a security
interest in FCC licenses.
Real Property Leases:
1. Headend Site - City of Butler, Indiana
(Consent to grant security interest denied.)
<PAGE> 19
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SCHEDULE 3.06
Fictitious Names
WISCONSIN SYSTEMS:
Ripon
Responsibility for the day-to-day operation of the Ripon System will be
delegated by the Borrower to Jones Intercable, Inc., an affiliated entity
of Jones Spacelink, Ltd., the General Partner of Borrower. Jones
Intercable, Inc. will use its own name in conducting the day-to-day
operations of the Ripon System. Borrower, however, will retain title to the
Collateral and continue to hold the existing and hereafter acquired assets
of the Ripon System and the rights related or connected to, or arising from
the Ripon System.
Lake Geneva
Responsibility for the day-to-day operation of the Lake Geneva System
will be delegated by the Borrower to Jones Intercable, Inc., an affiliated
entity of Jones Spacelink, Ltd., the General Partner of Borrower. Jones
Intercable, Inc. will use its own name in conducting the day-to-day
operations of the Lake Geneva System. Borrower, however, will retain title
to the Collateral and continue to hold the existing and hereafter acquired
assets of the Lake Geneva System and the rights related or connected to, or
arising from the Lake Geneva System.
INDIANA SYSTEM:
Responsibility for the day-to-day operation of the Indiana System will
be delegated by the Borrower to Jones Spacelink, Ltd., the General Partner
of Borrower. Jones Spacelink, Ltd. will use its own name in conducting the
day-to-day operations of the Indiana System. Borrower, however, will retain
title to the Collateral and continue to hold the existing and hereafter
acquired assets of the Indiana System and the rights related or connected
to, or arising from the Indiana System.
<PAGE> 20
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SCHEDULE 3.08
Principal Offices of the Borrower
Chief Executive Office:
9697 East Mineral Avenue
Englewood, Colorado 80112
WISCONSIN SYSTEMS:
Ripon
Principal Office:
219 Watson Street
Ripon, Wisconsin
Tower/Headend Site:
Goods included in the Collateral are also located at the property in Fond
du Lac County, Wisconsin, which property is more specifically described in
Schedule 2.
Lake Geneva
Principal Office:
719 William Street
Lake Geneva, Wisconsin
Tower/Headend Site:
Goods included in the Collateral are also located at the property in
Walworth County, Wisconsin, which property is more specifically described
in Schedule 2.
<PAGE> 21
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INDIANA SYSTEM:
Principal Office:
109 East 5th Street, Suite A
Auburn, Indiana
Goods included in the Collateral are also located at the following
locations, which locations are more specifically described on Schedule 2:
Antenna Site - Butler, Indiana
Office - 201 East Market Place, Bluffton, Indiana
Office - 204 North 13th Street, Decatur, Indiana
Tower Site - Auburn, Indiana
Tower Site - Washington Township, Indiana
Tower Site - Harrison Township, Indiana
<PAGE> 22
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SCHEDULE 3.09
LITIGATION
NONE
<PAGE> 23
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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SCHEDULE 3.17
UCC Filings
-----------
<TABLE>
<CAPTION>
DEBTOR NAME JURISDICTION
----------- -------------
<S> <C>
Jones Spacelink Income/Growth Colorado Secretary of State's office
Fund 1-A, Ltd. ("Borrower") (comprehensive filing)
Borrower Wisconsin Secretary of State's office
(comprehensive filing)
Borrower Wisconsin Secretary of State's office
(comprehensive/transmitting utility filing)
Borrower Fond du Lac County, Wisconsin
(fixture filing)
Borrower Walworth County, Wisconsin
(fixture filing)
Borrower Indiana Secretary of State's office
(comprehensive filing)
Borrower Indiana Secretary of State's office
(comprehensive/transmitting utility filing)
Borrower DeKalb County, Indiana
(comprehensive filing/local)
Borrower Adams County, Indiana
(fixture filing)
Borrower DeKalb County, Indiana
(fixture filing)
Borrower Wells County, Indiana
(fixture filing)
</TABLE>
<PAGE> 24
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SCHEDULE 3.19
Environmental Liabilities
-------------------------
None
<PAGE> 25
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SCHEDULE 3.21A
Complaints
----------
None
<PAGE> 26
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SCHEDULE 3.21B
FCC Licenses
------------
WISCONSIN SYSTEMS:
Ripon
-----
Business Radio: KNFM815
Expiration Date: March 20, 1996
Earth Station: WF90
Expiration Date: October 15, 2002
Lake Geneva
------------
Business Radio: KVJ460
Expiration Date: June 7, 1996
Earth Station: KU90
Expiration Date: October 1, 2002
INDIANA SYSTEM:
Business Radio: KNDL670
Expiration Date: February 18, 1999
Business Radio: KNDC251
Expiration Date: February 18, 1999
CARS: WLY-374
Expiration Date: August 1, 1997
Earth Station: E920052
Expiration Date: October 31,2001
Earth Station: E860422
Expiration Date: May 2, 1996
<PAGE> 27
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Earth Station: E910545
Expiration Date: July 24, 2001
Earth Station: E860301
Expiration Date: July 22, 1998
(The grant of a security interest in FCC licenses is prohibited.)
<PAGE> 28
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SCHEDULE 3.24A
Pole Agreements
---------------
WISCONSIN SYSTEMS:
Ripon
-----
1.* CATV Pole Lease Agreement dated April 30, 1993, with Wisconsin
Power and Light Company for the City of Ripon, Wisconsin.
2.* CATV Pole Lease Agreement dated April 30, 1993, with Wisconsin
Power and Light Company for the Town of Ripon, Wisconsin.
3.** Agreement dated April 22, 1977, as amended and supplemented, with
North-West Telephone Company for the City of Ripon, Wisconsin.
Lake Geneva
-----------
1. Agreement dated June 15, 1975, as amended, with Wisconsin Bell, Inc.
for the City of Lake Geneva, Wisconsin and vicinity.
2.* CATV Pole Lease Agreement dated April 30, 1993, with Wisconsin
Power and Light Company for the Town of Bloomfield, Wisconsin.
3.* CATV Pole Lease Agreement dated April 30, 1993, with Wisconsin
Power and Light Company for the Town of Geneva, Wisconsin.
4.* CATV Pole Lease Agreement dated April 30, 1993, with Wisconsin
Power and Light Company for the City of Lake Geneva, Wisconsin.
5.* CATV Pole Lease Agreement dated April 30, 1993, with Wisconsin
Power and Light Company for the Town of Linn, Wisconsin.
_______________
*Consent to grant security interest required; consent requested.
**Consent to grant security interest denied.
<PAGE> 29
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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6.* CATV Pole Lease Agreement dated April 30, 1993, with Wisconsin Power
and Light Company for the Town of Lyons, Wisconsin.
_______________
*Consent to grant security interest required; consent requested.
**Consent to grant security interest denied.
<PAGE> 30
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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INDIANA SYSTEM:
1. Pole Contract, dated August 12, 1974, between The City of Bluffton and
its Board of Public Works and Safety and Jones Spacelink Income/Growth
Fund 1-A, Ltd., successor to Jones Spacelink, Ltd. and Bluffton Cable
Co., for Bluffton, Indiana.
2. CATV Pole Lease Agreement, undated, between GTE North
Incorporated, formerly known as General Telephone Company of Indiana,
Inc. and Jones Spacelink Income/Growth Fund 1-A, Ltd., successor to
Jones Spacelink, Ltd. and DeKalb Cable Company, for the Butler,
Indiana area.
3. CATV Pole Lease Agreement dated September 1, 1976, between GTE
North Incorporated, formerly known as General Telephone Company of
Indiana, Inc. and Jones Spacelink Income/Growth Fund 1-A, Ltd.,
successor to Jones Spacelink, Ltd. and DeKalb Cable Company, for the
Waterloo, Indiana area.
4. Pole Contract dated 1975, between the City of Garrett and Jones
Spacelink Income/Growth Fund 1-A, Ltd., successor to DeKalb Cable TV
Co., for the areas of Auburn, Garrett, Waterloo and Butler, Indiana.
5. License Agreement for Aerial Facilities dated September 30, 1988,
between Indiana Bell Telephone Company, Incorporated and Jones
Spacelink Income/Growth Fund 1-A, Ltd. for the areas of Auburn and
Bluffton, Indiana.
6. Agreement for the Joint Use of Poles dated May 1, 1982, between Indiana
Michigan Power Company, formerly known as Indiana & Michigan
Electric Company, and Jones Spacelink Income/Growth Fund 1-A, Ltd.,
successor to Jones Spacelink, Ltd. and DeKalb Cable Company, for the
areas of Auburn, Garrett, Waterloo and Butler, Indiana.
7. Agreement for the Joint Use of Poles dated May 1, 1982, between Indiana
Michigan Power Company, formerly known as Indiana & Michigan
Electric Company, and Jones Spacelink Income/Growth Fund 1-A, Ltd.,
successor to Jones Spacelink, Ltd. and Decatur Cable Co., for Decatur,
Indiana and the surrounding area.
<PAGE> 31
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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8. Agreement for the Joint Use of Poles dated May 1, 1982, between
Indiana Michigan Power Company, formerly known as Indiana & Michigan
Electric Company, and Jones Spacelink Income/Growth Fund 1-A, Ltd.,
successor to Jones Spacelink, Ltd. and Bluffton Cable Co., for
Bluffton, Indiana and the surrounding area.
9. Agreement for Joint Use of Electric System Poles dated January 5, 1990,
between Jay County Rural Electric Membership Corporation and Jones
Spacelink Income/Growth Fund 1-A, Ltd.
10.* Agreement No. A-1335 dated February 1, 1992, as amended, between
Northern Indiana Public Service Company and Jones Spacelink
Income/Growth Fund 1-A, Ltd. for Waterloo, Indiana.
11. License Agreement - Pole Attachments dated April 20, 1982, between
United Rural Electric Membership Corporation and Jones Spacelink
Income/Growth Fund 1-A, Ltd., successor to Jones Spacelink, Ltd. and
Bluffton Cable Co., for unincorporated areas of Wells County, Indiana.
12. Agreement for the Shared Use of Utility Poles dated April 29, 1991,
between United Telephone System and Jones Spacelink Income/Growth Fund
1-A, Ltd. for the areas in and around Monroe and Decatur, Adams
County, Indiana.
_______________
*Consent to grant security interest required.
<PAGE> 32
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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SCHEDULE 3.24B
Franchises
----------
WISCONSIN SYSTEMS:
Ripon
-----
Town of Ripon. Wisconsin
------------------------
o Ordinance dated January 14, 1991, granting a cable television
franchise to Ripon Cable Company, Inc.
o Resolution dated January 14, 1991, consenting to the transfer of the
Franchise to Jones Spacelink, Ltd., and to any subsequent transfers
from Jones Spacelink, Ltd. to any Jones Affiliate, or among Jones
Affiliates, including any partnerships of which Jones Spacelink, Ltd.,
or any affiliate thereof is a general partner; the Resolution also
consents to the granting of a security interest in the Franchise to
such lending institution(s) as may be designated by Jones Spacelink,
Ltd. or any Jones Affiliate
o Notice of Closing addressed to the Town of Ripon notifying the Town
that pursuant to the Resolution dated January 14, 1991, the Franchise
was transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. (a
"Jones Affiliate" as defined in the Resolution) as of March 15, 1991
Expiration Date: No term specified
<PAGE> 33
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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City of Ripon, Wisconsin
------------------------
o Enabling Ordinance No. 679A passed March 23, 1976
o Title 16 of the City Code entitled Cable Television effective
February 22, 1991
o Ordinance No. 810 passed January 8, 1985, amending Chapter 16.32.020
of the City Municipal Code with respect to annual fee payable to City
o Resolution No. 85-5 dated January 1985, with respect to settlement of
and dismissal of lawsuit, extending current franchise term to December
12, 1996, and amending annual fee payable to City to $1,000 instead of
3% of total gross subscriber revenues as set forth in Enabling
Ordinance
o Resolution No. 1990-21R1 adopted January 8, 1991, ratifying and
confirming the original grant of the franchise to Ripon Cable Company,
Inc., consenting to the transfer of the Franchise from Ripon Cable
Company, Inc. to Jones Spacelink Income/Growth Fund 1-A, Ltd., and
consenting to the grant of a security interest in the Franchise to
such lending institution(s) as may be designated by Jones Spacelink
Income/Growth Fund 1-A, Ltd.
o Notice of Closing addressed to the City of Ripon notifying the City
that pursuant to Resolution No. 1990-21R1, the cable television system
and Franchise were transferred to Jones Spacelink Income/Growth Fund
1-A, Ltd. as of March 15, 1991
o Letter dated January 19, 1994, regarding the initiation of
negotiations for renewal of the franchise.
Expiration Date: December 12, 1996
<PAGE> 34
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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Lake Geneva
-----------
Town of Bloomfield, Wisconsin
-----------------------------
o Ordinance dated March 2, 1970, granting a cable television franchise
to Southern Wisconsin Company, Incorporated
o Acknowledgment of Town dated March 6, 1971, with respect to assignment
of franchise to Southern Wisconsin Cable, Inc.
o Resolution dated February 4, 1991, consenting to the transfer of the
Franchise to Jones Spacelink, Ltd., and to any subsequent transfers
from Jones Spacelink, Ltd. to any Jones Affiliate, or among Jones
Affiliates, including any partnerships of which Jones Spacelink, Ltd.,
or any affiliate thereof is a general partner; the Resolution also
consents to the granting of a security interest in the Franchise to
such lending institution(s) as may be designated by Jones Spacelink,
Ltd. or any Jones Affiliate
o Notice of Closing addressed to the Town of Bloomfield notifying the
Town that pursuant to the Resolution dated February 4, 1991, the
Franchise was transferred to Jones Spacelink Income/Growth Fund 1-A,
Ltd. (a "Jones Affiliate" as defined in the Resolution) as of March
15, 1991
Expiration Date: No term specified
<PAGE> 35
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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Town of Geneva, Wisconsin
-------------------------
o Ordinance dated January 2, 1969, granting a cable television franchise
to Southern Wisconsin Company, Incorporated
o Acknowledgment of Town dated March 10, 1971, with respect to
assignment of franchise to Southern Wisconsin Cable, Inc.
o Resolution dated January 7, 1991, consenting to the transfer of the
Franchise to Jones Spacelink, Ltd., and to any subsequent transfers
from Jones Spacelink, Ltd. to any Jones Affiliate, or among Jones
Affiliates, including any partnerships of which Jones Spacelink, Ltd.,
or any affiliate thereof is a general partner; the Resolution also
consents to the granting of a security interest in the Franchise to
such lending institution(s) as may be designated by Jones Spacelink,
Ltd. or any Jones Affiliate
o Notice of Closing addressed to the Town of Geneva notifying the Town
that pursuant to the Resolution dated January 7, 1991, the Franchise
was transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. (a
"Jones Affiliate" as defined in the Resolution) as of March 15, 1991
Expiration Date: No term specified
<PAGE> 36
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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Town of Linn, Wisconsin
-----------------------
o Ordinance dated January 12, 1970, granting a cable television
franchise to Southern Wisconsin Company, Incorporated
o Acknowledgment of Town dated March 4, 1971, with respect to assignment
of franchise to Southern Wisconsin Cable, Inc.
o Resolution dated January 14, 1991, consenting to the transfer of the
Franchise to Jones Spacelink, Ltd., and to any subsequent transfers
from Jones Spacelink, Ltd. to any Jones Affiliate, or among Jones
Affiliates, including any partnerships of which Jones Spacelink, Ltd.,
or any affiliate thereof is a general partner; the Resolution also
consents to the granting of a security interest in the Franchise to
such lending institution(s) as may be designated by Jones Spacelink,
Ltd. or any Jones Affiliate
o Notice of Closing addressed to the Town of Linn notifying the Town
that pursuant to the Resolution dated January 14, 1991, the Franchise
was transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. (a
"Jones Affiliate" as defined in the Resolution) as of March 15, 1991
Expiration Date: No term specified
<PAGE> 37
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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City of Lake Geneva, Wisconsin
------------------------------
o Franchise Agreement dated December 26, 1979, granting a cable
television franchise to Southern Wisconsin Cable, Inc.
o Settlement Agreement and Stipulation and Order of Dismissal dated
March 2, 1989, evidencing, among other matters, the amendment of the
Franchise Agreement with respect to the extension of the term of the
franchise to December 31, 1999, and the franchise fees
o Resolution No. 500-91 adopted on January 28, 1991 (and erroneously
dated January 28, 1990), consenting to the transfer of the Franchise
to Jones Spacelink, Ltd., and to any subsequent transfers from Jones
Spacelink, Ltd. to any Jones Affiliate, or among Jones Affiliates,
including any partnerships of which Jones Spacelink, Ltd., or any
affiliate thereof is a general partner; the Resolution also consents
to the granting of a security interest in the Franchise to such
lending institution(s) as may be designated by Jones Spacelink, Ltd.
or any Jones Affiliate
o Notice of Closing addressed to the City of Lake Geneva notifying the
City that pursuant to Resolution No. 500-91, the Franchise was
transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. (a "Jones
Affiliate" as defined in the Resolution) as of March 15, 1991
Expiration Date: December 31, 1999
<PAGE> 38
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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Town of Lyons, Wisconsin
------------------------
o Cable Television System Agreement dated December 24, 1990, granting a
cable television franchise to Southern Wisconsin Cable, Inc., its
successors and assigns
o Notice of Closing addressed to the Town of Lyons notifying the Town
that the cable television system and franchise were transferred to
Jones Spacelink Income/Growth Fund 1-A, Ltd. as of March 15, 1991
Expiration Date: December 23, 2005
<PAGE> 39
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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INDIANA SYSTEM:
County of Adams, Indiana
------------------------
o Franchise Agreement and Contract For Coaxial Cable, dated
September 30, 1985, between Adams County and Decatur Cable Co.
o Ordinance No. 1985-10, dated September 30, 1985, approving a franchise
agreement and contract with Decatur Cable Co.
o Resolution No. 1988-8, dated July 25, 1988, approving the transfer of
the cable television franchise from Decatur Cable Co. to Jones
Spacelink, Ltd. ("Jones") or any affiliate of Jones, including any
limited partnership(s) of which Jones or any affiliate of Jones is a
general partner, or any joint venture or general partnership of which
Jones, any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones; the Resolution
also consents to the granting by Jones or any Affiliate of Jones of a
security interest in the Franchise to such lending institution(s) as
may be designated by Jones or any Affiliate of Jones.
o Notice of Closing Date addressed to Adams County notifying the County
that pursuant to Section 3 of Resolution No. 1988-8, the Franchise was
transferred to Jones Spacelink, Ltd. as of September 30, 1988.
o Notice of Closing Date addressed to Adams County notifying the County
that pursuant to Section 3 of Resolution No. 1988-8, the Franchise was
transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. as of
November 16, 1988.
Expiration Date: September 30, 2000
<PAGE> 40
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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County of Allen, Indiana
------------------------
o Franchise Agreement (Allen County Code, Title 14 - Cable Television,
Article 4, Contract with Cable Television Company) dated January 5,
1987, between the County of Allen and Decatur Cable Co.
o Resolution, dated August 8, 1988, approving the transfer of the cable
television franchise from Decatur Cable Co. to Jones Spacelink, Ltd.
and the subsequent transfer to any limited partnership of which Jones
is the general partner.
o Notice of closing addressed to Allen County notifying the County that
pursuant to a Resolution adopted on August 8, 1988, the Franchise was
transferred to Jones Spacelink, Ltd. on September 30, 1988.
o Notice of closing addressed to Allen County notifying the County that
pursuant to a Resolution adopted on August 8, 1988, the Franchise was
transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. as of
November 16, 1988.
Expiration Date: January 5, 2002
<PAGE> 41
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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City of Auburn, Indiana
------------------------
o Ordinance No. 74-5 dated March 2, 1974, granting a cable television
franchise to Auburn Cable Co. (now known as Dekalb Cable Company).
o Ordinance No. 87-34 dated October 6, 1987, amending Ordinance No. 74-5
to extend the term of the Franchise for an additional fifteen years,
until March 2, 2004.
o Resolution No. 1-88 dated July 19, 1988, approving the transfer of the
Franchise from DeKalb Cable Company to Jones Spacelink, Ltd. ("Jones")
or any affiliate of Jones, including any limited partnership(s) of
which Jones or any affiliate of Jones is a general partner, or any
joint venture or general partnership of which Jones, any affiliate of
Jones or any such limited partnership(s) is a constituent partner, or
any other entity controlled by, controlling or under common control
with Jones (any such entity being hereinafter referred to as an
"Affiliate of Jones") and to any subsequent transfers between Jones
and any Affiliate of Jones.
o Notice of closing addressed to the City of Auburn notifying the City
that pursuant to Resolution No. 1-88, the Franchise was transferred to
Jones Spacelink, Ltd. on September 30, 1988.
o Notice of closing addressed to the City of Auburn notifying the City
that pursuant to Resolution No. 1-88, the Franchise was transferred to
Jones Spacelink Income/Growth Fund 1-A, Ltd. on November 16, 1988.
Expiration Date: March 2, 2004
<PAGE> 42
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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City of Bluffton, Indiana
-------------------------
o Resolution No. 73-1 dated March 26, 1973, approving the form of
Franchise Agreement to be entered into with Bluffton Cable Co. and
fixing a time at which the Franchise Agreement would be finally
considered.
o Resolution No. 73-2 dated April 10, 1973, granting final approval to a
proposed Franchise Agreement with Bluffton Cable Co. and authorizing
and directing the execution of the Agreement subject to ratification
by the Common Council.
o Agreement dated April 16, 1973, between The Board of Public Works and
Safety of the City of Bluffton and Bluffton Cable Co. granting a
cable television franchise to Bluffton Cable Co.
o Ordinance No. 494 dated May 8, 1973, approving and ratifying an
agreement by the Board of Public Works and Safety of the City of
Bluffton granting a franchise to Bluffton Cable Co. and fixing a time
when the same shall take effect.
o Letter dated July 14, 1975 from Michael S. Maurer, Esq. to Mayor
William M. Fryback, addressing clarification of the franchise document
with respect to rate increases amendments, FCC Rules and franchise
fees.
o Resolution No. 86-1 dated December 1, 1986, extending the term of the
Franchise for an additional 15 years, to April 10, 2003, and fixing a
time at which said Agreement would be finally considered.
o Ordinance No. 772 dated December 16, 1986, ratifying and approving a
resolution of the Board of Public Works and Safety extending the
Franchise and ratifying and approving Resolution No. 86-1.
o Resolution dated July 26, 1988, approving the transfer of the
Franchise from Bluffton Cable Co. to Jones Spacelink, Ltd. ("Jones")
or any affiliate of Jones, including any limited partnership(s) of
which Jones or any affiliate of Jones is a general partner, or any
joint venture or general partnership of which Jones, any affiliate of
Jones or any such limited partnership(s) is a constituent partner, or
any other entity controlled by, controlling or under common control
with Jones (any such entity being hereinafter referred to as an
"Affiliate of Jones") and to any subsequent transfers between Jones
and any Affiliate of Jones.
o Notice of closing addressed to the City of Bluffton notifying the City
that pursuant to Section 2 of the Resolution dated July 26, 1988, the
Franchise was transferred to Jones Spacelink, Ltd. on September 30,
1988.
<PAGE> 43
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 12
o Notice of closing addressed to the City of Bluffton notifying the City
that pursuant to Section 2 of the Resolution dated July 26, 1988, the
Franchise was transferred to Jones Spacelink Income/Growth Fund 1-A,
Ltd. as of November 16, 1988.
Expiration Date: April 10, 2003
<PAGE> 44
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 13
City of Butler, Indiana
-----------------------
o Ordinance No. 981 dated November 17, 1980 granting a cable television
franchise to Butler Cable Services, Inc.
o Assignment of Franchise dated March 6, 1981 from Butler Cable
Services, Inc. to DeKalb Cable Company.
o Resolution No. 88-248 dated July 15, 1988, approving the transfer of
the Franchise from DeKalb Cable Company to Jones Spacelink, Ltd.
("Jones") or any affiliate of Jones, including any limited
partnership(s) of which Jones or any affiliate of Jones is a general
partner, or any joint venture or general partnership of which Jones,
any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones; the Resolution
also consents to the granting by Jones or any Affiliate of Jones of a
security interest in the Franchise to such lending institution(s) as
may be designated by Jones or any Affiliate of Jones.
o Notice of closing addressed to the City of Butler notifying the City
that pursuant to Section 3 of Resolution No. 88-248, the Franchise
was transferred to Jones Spacelink, Ltd. on September 30, 1988.
o Notice of closing addressed to the City of Butler notifying the City
that pursuant to Section 3 of Resolution No. 88-248, the Franchise
was transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. as of
November 16, 1988.
Expiration Date: November 3, 2000
<PAGE> 45
Jones Spacelink Income/Growth Fund 1-A, Ltd.
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Page 14
City of Decatur, Indiana
------------------------
o Ordinance No. 1986-10 dated December 16, 1986, amending Chapter 119 of
the Decatur Code of 1978 establishing a new provision concerning
community antenna television service, and granting a cable television
franchise to Decatur Cable Co.
o Resolution No. 1988-6 dated August 2, 1988, approving the transfer of
the Franchise from Decatur Cable Co. to Jones Spacelink, Ltd.
("Jones") or any affiliate of Jones, including any limited
partnership(s) of which Jones or any affiliate of Jones is a general
partner, or any joint venture or general partnership of which Jones,
any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones.
o Notice of closing addressed to the City of Decatur notifying the City
that pursuant to Section 2 of Resolution No. 1988-6, the Franchise was
transferred to Jones Spacelink, Ltd. on September 30, 1988.
o Notice of closing addressed to the City of Decatur notifying the City
that pursuant to Section 2 of Resolution No. 1988-6, the Franchise was
transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. as of
November 16, 1988.
Expiration Date: March 3, 2003
<PAGE> 46
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 15
County of DeKalb, Indiana
-------------------------
o Ordinance dated October 22, 1974, granting a cable television
franchise to Auburn Cable Co.
o Ordinance dated February 8, 1988, amending the cable television
franchise ordinance by extending the term of the Franchise for an
additional period of fifteen years, to October 24, 2004.
o Resolution No. 88-3 dated July 18, 1988, approving the transfer of the
cable television franchise from Auburn Cable Co. to Jones Spacelink,
Ltd. ("Jones") or any affiliate of Jones, including any limited
partnership(s) of which Jones or any affiliate of Jones is a general
partner, or any joint venture or general partnership of which Jones,
any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones.
o Notice of closing addressed to the County of DeKalb notifying the
County that pursuant to Section 2 of Resolution No. 88-3, the
Franchise was transferred to Jones Spacelink, Ltd. on September 30,
1988.
o Notice of closing addressed to the County of DeKalb notifying the
County that pursuant to Section 2 of Resolution No. 88-3, the
Franchise was transferred to Jones Spacelink Income/Growth Fund 1-A,
Ltd. as of November 16, 1988.
Expiration Date: October 24, 2004
<PAGE> 47
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 16
City of Garrett, Indiana
-------------------------
o Ordinance No. 11474 dated November 4, 1974, authorizing the granting
of a cable television franchise to DeKalb Cable Co.
o Ordinance No. 91587 dated September 15, 1987, amending the cable
television franchise ordinance by extending the term of the Franchise
for an additional fifteen years to November 4, 2004.
o Resolution No. 788-1 dated July 19, 1988, approving the transfer of
the cable television franchise from DeKalb Cable Company to Jones
Spacelink, Ltd. ("Jones") or any affiliate of Jones, including any
limited partnership(s) of which Jones or any affiliate of Jones is a
general partner, or any joint venture or general partnership of which
Jones, any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones.
o Notice of closing addressed to the City of Garrett notifying the City
that pursuant to Section 2 of Resolution No. 788-1, the Franchise was
transferred to Jones Spacelink, Ltd. on September 30, 1988.
o Notice of closing addressed to the City of Garrett notifying the City
that pursuant to Section 2 of Resolution No. 788-1, the Franchise was
transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. as of
November 16, 1988.
Expiration Date: November 4, 2004
<PAGE> 48
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 17
Town of Monroe, Indiana
-----------------------
o Franchise Agreement dated July 8, 1982, granting a cable television
franchise to Decatur Cable Co.
o Resolution No. 1 dated August 4, 1988, approving the transfer of the
cable television franchise from Decatur Cable Co. to Jones Spacelink,
Ltd. ("Jones") or any affiliate of Jones, including any limited
partnership(s) of which Jones or any affiliate of Jones is a general
partner, or any joint venture or general partnership of which Jones,
any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones.
o Notice of closing addressed to the Town of Monroe notifying the Town
that pursuant to Section 2 of Resolution No. 1, the Franchise was
transferred to Jones Spacelink, Ltd. on September 30, 1988.
o Notice of closing addressed to the Town of Monroe notifying the Town
that pursuant to Section 2 of Resolution No. 1, the Franchise was
transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. as of
November 16, 1988.
Expiration Date: July 8, 1997
<PAGE> 49
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 18
County of Noble, Indiana
------------------------
o Franchise Grant dated November 16, 1987, granting a cable television
franchise to DeKalb Cable Co.
o Resolution No. 1988-3 dated July 18, 1988, approving the transfer of
the cable television franchise from DeKalb Cable Co. to Jones
Spacelink, Ltd. ("Jones") or any affiliate of Jones, including any
limited partnership(s) of which Jones or any affiliate of Jones is a
general partner, or any joint venture or general partnership of which
Jones, any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones; the Resolution
also consents to the granting by Jones or any Affiliate of Jones of a
security interest in the Franchise to such lending institution(s) as
may be designated by Jones or any Affiliate of Jones.
o Notice of closing addressed to the County of Noble notifying the
County that pursuant to Section 3 of Resolution No. 1988-3, the
Franchise was transferred to Jones Spacelink, Ltd. on September 30,
1988.
o Notice of closing addressed to the County of Noble notifying the
County that pursuant to Section 3 of Resolution No. 1988-3, the
Franchise was transferred to Jones Spacelink Income/Growth Fund 1-A,
Ltd. as of November 16, 1988.
Expiration Date: November 16, 2002
<PAGE> 50
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 19
Town of Poneto, Indiana
-----------------------
o Ordinance No. 90212 dated as of February 12, 1990, granting a cable
television franchise to Jones Spacelink Income/Growth Fund 1-A, Ltd.
o Resolution No. 191103 dated March 11, 1991, consenting to the granting
of a security interest
Expiration Date: February 12, 2005
<PAGE> 51
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 20
Town of Uniondale, Indiana
--------------------------
o Franchise Agreement dated August 25, 1988, granting a cable television
franchise to Bluffton Cable TV Co.
o Resolution No. 106 dated August 25, 1988, approving the transfer of
the cable television franchise from Bluffton Cable Co. to Jones
Spacelink, Ltd. ("Jones") or any affiliate of Jones, including any
limited partnership(s) of which Jones or any affiliate of Jones is a
general partner, or any joint venture or general partnership of which
Jones, any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones.
o Notice of closing addressed to the Town of Uniondale notifying the
Town that pursuant to Section 2 of Resolution No. 106, the Franchise
was transferred to Jones Spacelink, Ltd. on September 30, 1988.
o Notice of closing addressed to the Town of Uniondale notifying the
Town that pursuant to Section 2 of Resolution No. 106, the Franchise
was transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. as of
November 16, 1988.
Expiration Date: August 25, 2003
<PAGE> 52
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 21
Town of Vera Cruz, Indiana
--------------------------
o Ordinance No. 89-1 dated as of August 10, 1989, granting a cable
television franchise to Jones Spacelink Income/Growth Fund 1-A, Ltd.
o Resolution No. 91-1 dated March 10, 1991, consenting to the granting
of a security interest
Expiration Date: August 10, 2004
<PAGE> 53
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 22
Town of Waterloo, Indiana
-------------------------
o Ordinance No. 217 dated October 8, 1974, granting a cable television
franchise to DeKalb Cable TV Co.
o Ordinance No. 87-16 dated November 14, 1987, amending the cable
television franchise ordinance by extending the term of the Franchise
for an additional period of fifteen years, to October 8, 2004.
o Resolution No. 88-R6 dated August 9, 1988, approving the transfer of
the cable television franchise from DeKalb Cable Co. to Jones
Spacelink, Ltd. ("Jones") or any affiliate of Jones, including any
limited partnership(s) of which Jones or any affiliate of Jones is a
general partner, or any joint venture or general partnership of which
Jones, any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones.
o Notice of closing addressed to the Town of Waterloo notifying the Town
that pursuant to Section 2 of Resolution No. 88-R6, the Franchise was
transferred to Jones Spacelink, Ltd. on September 30, 1988.
o Notice of closing addressed to the Town of Waterloo notifying the Town
that pursuant to Section 2 of Resolution No. 88-R6, the Franchise was
transferred to Jones Spacelink Income/Growth Fund 1-A, Ltd. as of
November 16, 1988.
Expiration Date: October 8, 2004
<PAGE> 54
Jones Spacelink Income/Growth Fund 1-A, Ltd.
13193
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Page 23
County of Wells, Indiana
------------------------
o Franchise Agreement and Contract for Coaxial Cable dated November 2,
1981, granting a cable television franchise to Bluffton Cable Co.
o Ordinance dated November 16, 1981, ratifying, conforming and approving
a franchise agreement and contract with Bluffton Cable Co.
o Resolution No. 88-3 dated August 8, 1988, approving the transfer of
the cable television franchise from Bluffton Cable Co. to Jones
Spacelink, Ltd. ("Jones ") or any affiliate of Jones, including any
limited partnership(s) of which Jones or any affiliate of Jones is a
general partner, or any joint venture or general partnership of which
Jones, any affiliate of Jones or any such limited partnership(s) is a
constituent partner, or any other entity controlled by, controlling or
under common control with Jones (any such entity being hereinafter
referred to as an "Affiliate of Jones") and to any subsequent
transfers between Jones and any Affiliate of Jones; the Resolution
also consents to the granting by Jones or any Affiliate of Jones of a
security interest in the Franchise to such lending institution(s) as
may be designated by Jones or any Affiliate of Jones.
o Notice of closing addressed to the County of Wells notifying the
County that pursuant to Section 3 of Resolution No. 88-3, the
Franchise was transferred to Jones Spacelink, Ltd. on September 30,
1988.
o Notice of closing addressed to the County of Wells notifying the
County that pursuant to Section 3 of Resolution No. 88-3, the
Franchise was transferred to Jones Spacelink Income/Growth Fund 1-A,
Ltd. as of November 16, 1988.
o Letter dated November 11, 1993, regarding the initiation of
negotiations for renewal of the franchise
Expiration Date: November 2, 1996
<PAGE> 1
COMPOSITE ORIGINAL
AMENDMENT NO. 3 (the "Amendment")
dated as of December 16, 1994 to the Credit
and Security Agreement dated as of March 6,
1991, as amended by Amendment No. 1 thereto
dated as of March 30, 1994 and Amendment No.
2 thereto dated as of September 30, 1994
(the "Agreement" ) , among JONES SPACELINK
INCOME/GROWTH FUND 1-A, LTD., a Colorado
limited partnership (the "Borrower"), THE
LENDERS REFERRED TO THEREIN (the "Lenders")
and CREDIT LYONNAIS NEW YORK BRANCH, as
agent for the Lenders (the "Agent").
INTRODUCTORY STATEMENT
All capitalized terms not otherwise defined in this
Amendment are used herein as defined in the Agreement.
The Borrower has requested that the Agreement be amended to
modify the provisions of the Agreement as hereinafter set forth.
In consideration of the mutual agreements contained herein
and other good and valuable consideration, the parties hereto hereby agree as
follows:
SECTION 1. Amendment to the Agreement. Subject to the
provisions of Section 2 hereof, the Agreement is hereby amended as follows:
(A) The definition of "General Partner" appearing in
Article 1 of the Agreement is hereby amended in its entirety to read as
follows:
"'General partner' shall mean either Jones
Spacelink, Ltd., a Colorado corporation or Jones Intercable,
Inc., a Colorado corporation, whichever at the applicable
time, is or was the general partner of the Borrower."
(B) Paragraph (k) of Article 7 of the Agreement is hereby
amended in its entirety to read as follows:
"(k) a 'change in control' shall occur; as used
herein a 'change in control' shall mean either Jones
Spacelink, Ltd. or Jones Intercable, Inc. ceases to be the
general partner of the Borrower;"
<PAGE> 2
SECTION 2. Conditions to Effectiveness. The
effectiveness of this Amendment is subject to the satisfaction in full of the
following conditions precedent:
(A) the Agent shall have received executed counterparts of
this Amendment, which, when taken together, bear the signatures of the Borrower
and those Lenders required by Section 10.09 of the Agreement and the signature
of Jones Intercable, Inc. as to its agreement with respect to the provisions
of the Subordination Agreement as hereinafter set forth; and
(B) all legal matters in connection with this Amendment
shall be reasonably satisfactory to Morgan, Lewis & Bockius, counsel for the
Agent.
SECTION 3. Representations and Warranties. The Borrower
represents and warrants to the Lenders that:
(A) the representations and warranties contained in the
Agreement and in the other Fundamental Documents are true and correct in all
material respects on and as of the date hereof as if such representations and
warranties had been made on and as of the date hereof (except to the extent
such representations and warranties expressly relate to an earlier date); and
(B) the Borrower is in compliance with all the terms and
provisions set forth in the Agreement and no Default or Event of Default has
occurred or is continuing under the Agreement.
SECTION 4. Full Force and Effect. Except as expressly
set forth herein, this Amendment does not constitute a waiver or modification
of any provision of the Agreement or a waiver of any Default or Event of
Default under the Agreement, in either case whether or not known to the Agent.
Except as expressly amended hereby, the Agreement shall continue in full force
and effect in accordance with the provisions thereof on the date hereof. As
used in the Agreement, the terms "Credit Agreement", "this Agreement",
"herein", "hereafter", "hereto", "hereof", and words of similar import,
shall, unless the context otherwise requires, mean the Agreement as amended by
this Amendment. References to the terms "Agreement" or "Credit Agreement"
appearing in the Exhibits or Schedules to the Agreement, shall, unless the
context otherwise requires, mean the Agreement as amended by this Amendment.
SECTION 5. APPLICABLE LAW. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE
OF NEW YORK.
- 2 -
<PAGE> 3
SECTION 6. Counterparts. This Amendment may be executed
in two or more counterparts, each of which shall constitute an original, but
all of which when taken together, shall constitute but one instrument.
SECTION 7. Expenses. The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by the Agent in connection with the
preparation, execution and delivery of this Amendment and any other
documentation contemplated hereby, including, but not limited to, the
reasonable fees and disbursements of Morgan, Lewis & Bockius, counsel for the
Agent.
SECTION 8. Headings. The headings of this Amendment are
for the purposes of reference only and shall not affect the construction of, or
be taken into consideration in interpreting, this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers, all as of the
date and year first written above.
BORROWER:
JONES SPACELINK INCOME/GROWTH
FUND 1-A, LTD.
By: Jones Spacelink, Ltd.,
its General Partner
By: \s\ JAY B. LEWIS
Name: Jay B. Lewis
Title: Treasurer
CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Agent
By: /s/ BRUCE M. YEAGER
Name: Bruce M. Yeager
Title: First Vice President
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH, individually
By: /s/ BRUCE M. YEAGER
Name: Bruce M. Yeager
Title: Authorized Signature
- 3 -
<PAGE> 4
Reference is hereby made to that certain Subordination
Agreement dated as of March 6, 1991 among the Borrower, Jones Spacelink, Ltd.
and Credit Lyonnais New York Branch, as Agent (the "Subordination Agreement").
Jones Intercable, Inc. ("Intercable") by signing in the
space provided below, agrees that at such time as it shall become the general
partner of the Borrower:
(i) all then existing or thereafter arising
obligations of the Borrower to pay (A) Management
Fees or Home Office Allocations to Intercable,
(B) loans or advances from Intercable and (C) any
other amount then or thereafter payable by the
Borrower to Intercable, shall be Subordinated
Obligations (as such term is defined in the
Subordination Agreement) and shall be subordinate
to the payment in full of the Senior Obligations
(as such term is defined in the Subordination
Agreement) to the extent and in the manner set
forth in the Subordination Agreement;
(ii) Intercable assumes and agrees to perform, observe
and be bound by, each of the covenants, rights,
promises, agreements, terms, conditions,
obligations, duties and liabilities under the
Subordination Agreement as if it were the
Subordinated Creditor (such term being used herein
as defined in the Subordination Agreement)
thereunder;
(iii) Intercable accepts and assumes any liability
related to each representation or warranty,
covenant or obligation made by the Subordinated
Creditor in the Subordination Agreement as if it
were the Subordinated Creditor thereunder and
expressly affirms for the benefit of the Lenders,
each of such representations, warranties,
covenants and obligations;
(iv) Intercable agrees that Credit Lyonnais New York
Branch, as Agent for the Lenders, shall have all
the rights and benefits contemplated by the
Subordination Agreement with respect to all
Subordinated Obligations owed to Intercable; and
- 4 -
<PAGE> 5
(v) All references to the Subordinated Creditor in the
Credit Agreement or any other Fundamental Document
shall include Intercable.
JONES INTERCABLE, INC.
By: /s/ J. ROY POTTLE
--------------------------
Name: J. Roy Pottle
Title: Treasurer
- 5 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 171,944
<SECURITIES> 0
<RECEIVABLES> 130,642
<ALLOWANCES> (9,238)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,257,087
<DEPRECIATION> (5,220,117)
<TOTAL-ASSETS> 19,865,099
<CURRENT-LIABILITIES> 501,513
<BONDS> 10,787,551
<COMMON> 0
0
0
<OTHER-SE> 8,576,035
<TOTAL-LIABILITY-AND-EQUITY> 19,865,099
<SALES> 0
<TOTAL-REVENUES> 6,440,941
<CGS> 0
<TOTAL-COSTS> 7,155,006
<OTHER-EXPENSES> 9,332
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 735,717
<INCOME-PRETAX> (1,459,114)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,459,114)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,459,114)
<EPS-PRIMARY> (28.17)
<EPS-DILUTED> (28.17)
</TABLE>
