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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
IDS/JONES GROWTH PARTNERS 87-A, LTD.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: Limited
Partnership Interests
(2) Aggregate number of securities to which transaction applies: 19,785
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): Pursuant to
Rule 0-11(c)(2), the transaction valuation is based upon the $40,000,000
sales price that is to be paid to IDS/Jones Growth Partners 87-A, Ltd.
in connection with the transaction that is the subject of the proxy
solicitation.
(4) Proposed maximum aggregate value of the transaction: $40,000,000
(5) Total fee paid: $8,000
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
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[JONES INTERCABLE, INC. LOGO]
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
NOTICE OF VOTE OF THE LIMITED PARTNERS OF IDS/JONES GROWTH PARTNERS 87-A, LTD.
To the Limited Partners of IDS/Jones Growth Partners 87-A, Ltd.:
A special vote of the limited partners of IDS/Jones Growth Partners 87-A,
Ltd. (the "Partnership") is being conducted through the mails on behalf of the
Partnership by Jones Cable Corporation, the managing general partner of the
Partnership, for the purpose of obtaining limited partner approval of the
sale, to Comcast Corporation or one of its affiliates, of the Partnership's
cable television system serving the community of Roseville and certain
portions of unincorporated Placer County, all in the State of California (the
"Roseville System"), for $40,000,000 in cash, subject to customary working
capital closing adjustments that may have the effect of increasing or
decreasing the sales price by a non-material amount. Information relating to
this matter is set forth in the accompanying Proxy Statement.
If the limited partners approve the proposed sale of the Roseville System
and if the transaction is closed, the Partnership will repay all of its
indebtedness, which totaled $10,370,890 at June 30, 1998 (including
$10,000,000 borrowed under its credit facility, $352,326 in advances from the
managing general partner and capital lease obligations of $18,564), leaving
the Partnership with no debt outstanding, pay brokerage fees to affiliates of
the general partners totaling $1,000,000, representing 2.5 percent of the
sales price, for acting as brokers and financial advisors in this transaction,
settle working capital adjustments and then the $29,385,638 of net sale
proceeds will be distributed to the Partnership's partners of record as of the
closing date. Because the distribution to be made on the sale of the Roseville
System together with the April 1996 distribution from the sale of the
Partnership's cable television system serving the communities in and around
Carmel, Indiana will exceed 125 percent of the amounts originally contributed
to the Partnership by the limited partners, the general partners will receive
general partner distributions on the sale of the Roseville System. Based upon
financial information as of June 30, 1998, the limited partners, as a group,
will receive $27,365,634, the managing general partner will receive $1,010,002
and IDS Cable Corporation, the supervising general partner, will receive
$1,010,002 of the net proceeds from the sale of the Roseville System. This
distribution will give the Partnership's limited partners an approximate
return of $167 for each $250 limited partnership interest, or $668 for each
$1,000 invested in the Partnership. Distributions will be net of California
non-resident withholding tax, if applicable, and distribution checks will be
issued to limited partners' account registration or payment instruction of
record. Once the distribution of the net proceeds from the sale of the
Roseville System has been made, limited partners will have received a total of
$350 for each $250 limited partnership interest, or $1,400 for each $1,000
invested in the Partnership, taking into account the prior distribution to
limited partners made in April 1996.
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Only limited partners of record at the close of business on August 31, 1998
are entitled to notice of, and to participate in, this vote of limited
partners. It is very important that all limited partners participate in the
voting. The Partnership's ability to complete the transaction discussed in the
Proxy Statement and the Partnership's ability to make a distribution to its
partners of the net proceeds of the sale of the Partnership's Roseville System
are dependent upon the approval of the transaction by the holders of a
majority of the Partnership's limited partnership interests.
The proposal that is the subject of this proxy solicitation will be adopted
only if approved by the holders of a majority of the limited partnership
interests. Each limited partnership interest entitles the holder thereof to
one vote on the proposal. Because the Partnership's limited partnership
agreement (the "Partnership Agreement") requires that the proposal to sell the
Roseville System be approved by the holders of a majority of the limited
partnership interests, abstentions and non-votes will be treated as votes
against the proposal. A properly executed consent returned to the managing
general partner on which a limited partner does not mark a vote will be
counted as a vote for the proposed sale of the Roseville System. Because
limited partners do not have dissenters' or appraisal rights in connection
with the proposed sale of the Roseville System, if the holders of a majority
of the limited partnership interests approve the proposal, all limited
partners will receive a distribution of the net sale proceeds in accordance
with the procedures prescribed by the Partnership Agreement regardless of how
or whether they vote on the proposal.
Jones Cable Corporation, as managing general partner of the Partnership,
urges you to sign and return the enclosed proxy as promptly as possible. The
proxy should be returned in the enclosed envelope.
JONES CABLE CORPORATION
Managing General Partner
/s/ Elizabeth M. Steele
Elizabeth M. Steele
Secretary
Dated: September 15, 1998
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[JONES INTERCABLE, INC. LOGO]
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
PROXY STATEMENT
VOTE OF THE LIMITED PARTNERS
OF IDS/JONES GROWTH PARTNERS 87-A, LTD.
This Proxy Statement is being furnished in connection with the solicitation
of the written consents of the limited partners of IDS/Jones Growth Partners
87-A, Ltd. (the "Partnership") by Jones Cable Corporation, the managing
general partner of the Partnership (the "Managing General Partner"), on behalf
of the Partnership, for the purpose of obtaining limited partner approval of
the sale of the Partnership's cable television system serving the community of
Roseville and certain portions of unincorporated Placer County, all in the
State of California (the "Roseville System") for $40,000,000 in cash, subject
to normal working capital closing adjustments, to Comcast Corporation or one
of its affiliates ("Comcast"). The Partnership's supervising general partner
is IDS Cable Corporation (the "Supervising General Partner") and the Managing
General Partner and the Supervising General Partner are referred to in this
Proxy Statement collectively as the "General Partners." Comcast currently is
not an affiliate of the Partnership or of either of the General Partners as
such term is defined in the Partnership's limited partnership agreement (the
"Partnership Agreement"). But see "Certain Information About the Partnership,
the General Partners and the Purchaser of the System" for information about
Comcast's agreement to acquire a controlling ownership interest in the parent
of the Managing General Partner.
Proxies in the form enclosed, properly executed and duly returned, will be
voted in accordance with the instructions thereon. Limited partners are urged
to sign and return the enclosed proxy as promptly as possible. Proxies cannot
be revoked except by delivery of a proxy dated as of a later date. Officers
and other employees of the Managing General Partner may solicit proxies by
mail, by fax, by telephone or by personal interview. The deadline for the
receipt of proxy votes is October 30, 1998, unless extended, but the vote of
the Partnership's limited partners will be deemed to be concluded on the date,
at least 20 business days from the date the proxy materials are sent to
limited partners, that the Managing General Partner, on behalf of the
Partnership, is in receipt of proxies executed by the holders of a majority of
the limited partnership interests either consenting to or disapproving of the
proposed transaction. The Managing General Partner may extend the deadline for
receipt of proxy votes if a majority of the limited partners fail to express
an opinion on the transaction by October 30, 1998. If the Managing General
Partner extends the deadline for receipt of proxy votes, the limited partners
will be informed by mail of the reason for the extension and the new deadline.
The cost of the proxy solicitation will be paid by the Partnership.
The Partnership has only one class of limited partners and no limited
partner has a right of priority over any other limited partner. The
participation of the limited partners is divided into limited partnership
interests and each limited partner owns one limited partnership interest for
each $250 of capital contributed to the Partnership.
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As of August 31, 1998, the Partnership had 164,178 limited partnership
interests outstanding, held by approximately 6,347 persons. There is no
established trading market for such interests. To the best of the Managing
General Partner's knowledge, no person or group of persons beneficially own
more than five percent of the limited partnership interests. The Managing
General Partner owns 200 limited partnership interests and the Supervising
General Partner owns 100 limited partnership interests. In addition, IDS
Management Corporation, an affiliate of the Supervising General Partner, owns
768 limited partnership interests. These limited partnership interests owned
by the General Partners and IDS Management Corporation will be voted in favor
of the sale of the Roseville System to Comcast. The officers and directors of
the General Partners do not own any limited partnership interests. Only
limited partners of record at the close of business on August 31, 1998 will be
entitled to notice of, and to participate in, the vote.
Upon the consummation of the proposed sale of the Roseville System, the
Partnership will repay all of its indebtedness, which totaled approximately
$10,370,890 at June 30, 1998 (including $10,000,000 borrowed under its credit
facility, $352,326 in advances from the Managing General Partner and capital
lease obligations of $18,564), pay brokerage fees to The Jones Group, Ltd., an
affiliate of the Managing General Partner, and to IDS Management Corporation,
an affiliate of the Supervising General Partner, totaling $1,000,000,
representing 2.5 percent of the sale price, for acting as brokers and
financial advisors in this transaction and settle working capital adjustments,
and then the Partnership will distribute the $29,385,638 of net sale proceeds
to its partners of record as of the closing date. Because the distribution to
be made on the sale of the Roseville System together with the April 1996
distribution from the sale of the Partnership's cable television system
serving the communities in and around Carmel, Indiana (the "Carmel System")
will exceed 125 percent of the amounts originally contributed to the
Partnership by the limited partners, the General Partners will receive general
partner distributions on the sale of the Roseville System. Based upon pro
forma financial information as of June 30, 1998, as a result of the Roseville
System's sale, the limited partners of the Partnership, as a group, will
receive $27,365,634, the Managing General Partner will receive $1,010,002 and
the Supervising General Partner will receive $1,010,002 of the net proceeds
from the sale of the Roseville System. Limited partners will receive $167 for
each $250 limited partnership interest, or $668 for each $1,000 invested in
the Partnership, from the net proceeds of the Roseville System's sale.
Distributions will be net of California non-resident withholding tax, if
applicable, and distribution checks will be issued to limited partners'
account registration or payment instruction of record. Limited partners should
note that there are certain federal and state income tax consequences of the
proposed transaction. See "Federal and State Income Tax Consequences."
Once the net proceeds from the sale of the Roseville System have been
distributed to the partners, the limited partners will have received a total
of $350 for each $250 limited partnership interest, or $1,400 for each $1,000
invested in the Partnership, taking into account the prior distribution to
limited partners made in April 1996.
As of the date of this Proxy Statement, the Partnership's only asset is the
Roseville System. After the sale of the Roseville System, the Partnership will
be liquidated and dissolved. The Partnership will cease to be a public entity
subject to the informational reporting requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), when the Partnership is
liquidated and dissolved, most likely in the first quarter of 1999.
The proposal that is the subject of this proxy solicitation will be adopted
only if approved by the holders of a majority of the limited partnership
interests. Each limited partnership interest entitles the holder thereof to
one vote on the proposal. Because the Partnership Agreement requires that the
proposal to sell the Roseville System be approved by the holders of a majority
of the limited partnership interests, abstentions and non-votes will be
treated as votes against the proposal. A properly executed consent returned to
the Managing General Partner on which a limited partner does not mark a vote
will be counted as a vote for the proposed sale of the Roseville System.
Because limited partners do not have dissenters' or appraisal rights in
connection with the proposed sale of the Roseville System, if the holders of a
majority of the limited partnership interests approve the proposal, all
limited partners will receive a distribution of the net sale proceeds in
accordance with the procedures prescribed by the Partnership Agreement
regardless of how or whether they vote on the proposal.
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The Board of Directors of the Managing General Partner approved the proposed
sale of the Roseville System and the Supervising General Partner has given its
consent to the proposed sale of the Roseville System. The General Partners
therefore recommend approval of the transaction by the holders of the
Partnership's limited partnership interests.
The approximate date on which this Proxy Statement and Form of Proxy are
being sent to limited partners is September 15, 1998.
PARTNERSHIP INFORMATION
THE PARTNERSHIP'S INVESTMENT OBJECTIVES
The Partnership was formed to acquire, develop, operate and, ultimately,
sell cable television systems. The primary objectives of the Partnership have
been to obtain capital appreciation in the value of the Partnership's cable
television properties; to obtain equity build-up through debt reduction; and
to generate tax losses that could be utilized to offset passive income. It was
contemplated from the outset of the Partnership's existence that capital
appreciation in Partnership cable television properties would be converted to
cash by a sale of such properties at such time as the General Partners
determined that the Partnership's investment objectives had substantially been
achieved and after a holding period of five to seven years.
The Partnership was formed in September 1987 as a Colorado limited
partnership in connection with a public offering of its limited partnership
interests. Sales of limited partnership interests in the Partnership closed on
January 9, 1989. The Partnership raised gross offering proceeds of
$41,039,500. Since its formation, the Partnership has engaged primarily in the
ownership and operation of the Carmel System and the Roseville System. The
Carmel System was sold in February 1996 to an affiliate of the Managing
General Partner for a sales price of $44,235,333, which price represented the
average of three separate, independent appraisals of the fair market value of
the Carmel System. A portion of the sale proceeds, $14,235,333, was used to
reduce Partnership debt, and the remainder of the sale proceeds, $30,000,000,
was distributed to the limited partners of the Partnership in April 1996. The
distribution of the net proceeds from the sale of the Carmel System resulted
in the Partnership's limited partners receiving a return of $183 for each $250
limited partnership interest, or $731 for each $1,000 invested in the
Partnership. No vote of the limited partners of the Partnership was required
in connection with the sale of the Carmel System because the assets of the
Carmel System did not constitute all or substantially all of the Partnership's
assets. The Supervising General Partner consented to the timing of the sale of
the Carmel System and participated in the selection of the firms that
conducted the appraisals of the Carmel System.
Because the distribution made to the limited partners of the Partnership
from the net proceeds of the sale of the Carmel System did not total the
amounts originally contributed to the Partnership by the limited partners, the
General Partners did not receive any general partner distributions on the sale
of the Carmel System. Because the distribution to be made on the sale of the
Roseville System together with the prior distribution made by the Partnership
from the net proceeds of the sale of the Carmel System will exceed 125 percent
of the amounts originally contributed to the Partnership by the limited
partners, the General Partners will receive general partner distributions
totaling $2,020,004 from the Roseville System's net sale proceeds.
Based upon disclosures made to prospective investors about the Partnership's
investment objectives in the IDS/Jones Growth Partners Limited Partnership
Program Prospectus and in the accompanying sales brochure, investors in the
Partnership reasonably could have anticipated that the Partnership's
investment objectives would be achieved and its assets liquidated after a
holding period of approximately five to seven years. Due to the uncertain and
adverse regulatory environment that developed in the early 1990s for the cable
television industry, the resulting decline in the prices for cable television
systems and the subsequent inactivity in the cable television system
marketplace, the Managing General Partner determined that it would be prudent
to delay the sale of the Roseville System until market conditions improved.
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The Managing General Partner, through The Jones Group, Ltd., began marketing
the Roseville System in 1996. The Partnership entered into an asset purchase
agreement in October 1996 pursuant to which it agreed to sell the Roseville
System to an affiliate of Roseville, California's local telephone company. The
proposed sales price at that time was $30,900,000, with possible upward
adjustments. Although that transaction was approved by the holders of a
majority of the limited partnership interests in the Partnership, one of the
material closing conditions to that transaction was never satisfied. Because
the prospective purchaser was affiliated with the company that provides
telephone services in the geographical area in which the Roseville System
provides cable television services, a waiver from the Federal Communications
Commission (the "FCC") of Section 652 of the Telecommunications Act of 1996,
which prohibits the acquisition by a telephone company and its affiliates of
cable systems in the telephone company's service area, was necessary to permit
the prospective purchaser to consummate its acquisition of the Roseville
System. The prospective purchaser, with the support and assistance of the
Managing General Partner, actively sought this waiver from the FCC, but the
FCC failed to grant the request for the waiver. As a result of the FCC's
failure to grant the request for the waiver, the asset purchase agreement
between the Partnership and that prospective purchaser expired and was not
renewed in February 1998, and the Managing General Partner, through The Jones
Group, Ltd., again marketed the Roseville System for sale. As a result of all
of the foregoing factors, the Roseville System has been held by the
Partnership for more than ten years.
The purpose of the sale of the Roseville System, from the Partnership's
perspective, is to attain the Partnership's primary investment objective with
respect to the Roseville System, i.e., to convert the Partnership's capital
appreciation in the Roseville System to cash. The sale proceeds will be used
to repay all outstanding indebtedness of the Partnership and pay certain fees
and expenses of the transaction, including brokerage fees of 2.5 percent of
the sales price, or $1,000,000, to affiliates of the General Partners and
settle working capital adjustments, and the remaining sale proceeds will be
distributed to the partners of the Partnership in accordance with the
distribution procedures established by the Partnership Agreement. The sale of
the Roseville System is thus the necessary final step in the Partnership's
accomplishment of its investment objectives with respect to the Roseville
System.
All distributions of the Partnership from the proceeds of the sales of cable
television systems are to be distributed 100 percent to the limited partners
until the limited partners receive amounts equal to 125 percent of their
initial capital contributions, and thereafter all such distributions are to be
shared 75 percent to the limited partners and 25 percent to the General
Partners. With the distributions to be made on the sale of the Roseville
System, the limited partners of the Partnership will have received
distributions in excess of 125 percent of their initial capital contributions
counting the distributions made from both the Carmel System's sale proceeds
and the Roseville System's sale proceeds, and thus the sharing arrangement
between the limited partners and the General Partners will be triggered upon
the distribution of the net proceeds from the Roseville System's sale. Based
upon financial information as of June 30, 1998, the limited partners, as a
group, will receive $27,365,634, the Managing General Partner will receive
$1,010,002 and the Supervising General Partner will receive $1,010,002 of the
Roseville System's net sale proceeds. This distribution will provide the
Partnership's limited partners with an approximate return of $167 for each
$250 limited partnership interest, or $668 for each $1,000 invested in the
Partnership. Taking into account the distributions to limited partners from
the net proceeds of the sale of the Carmel System and from the net proceeds of
the sale of the Roseville System, the limited partners of the Partnership will
have received a total return of $350 for each $250 limited partnership
interest, or $1,400 for each $1,000 invested in the Partnership by the time of
the Partnership's liquidation and dissolution.
VOTING PROVISION OF THE PARTNERSHIP AGREEMENT
Section 2.2(k) of the Partnership Agreement provides that the sale of all or
substantially all of the Partnership's assets is subject to the approval of
the holders of a majority of the Partnership's limited partnership interests.
Because the Roseville System represents all of the Partnership's remaining
assets, the proposed sale of the Roseville System to Comcast is being
submitted for limited partner approval.
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PROPOSED SALE OF ASSETS
GENERAL
Pursuant to the terms and conditions of an Asset Purchase Agreement dated as
of July 21, 1998 (the "Asset Purchase Agreement") by and between the
Partnership and Comcast, the Partnership has agreed to sell the Roseville
System to Comcast for a sales price of $40,000,000, subject to customary
working capital closing adjustments. Comcast is a Pennsylvania corporation
headquartered at 1500 Market Street, Philadelphia, Pennsylvania 19102. Comcast
is not an affiliate of the Partnership or of either of the General Partners as
such term is defined in the Partnership Agreement. See "Certain Information
About the Partnership, the General Partners and the Purchaser of the System"
for information about Comcast's intention to acquire an ownership interest in
the parent of the Managing General Partner. The Partnership has been informed
that Comcast intends to finance its acquisition of the Roseville System
through cash on hand and borrowings.
THE CLOSING
The closing of the sale will occur on the last day of the month immediately
following the tenth day after the date on which all of the closing conditions
set forth in the Asset Purchase Agreement have been satisfied. It is
anticipated that the closing will occur during the fourth quarter of 1998.
Because the closing is conditioned upon, among other things, the approval of
the limited partners of the Partnership and the receipt of material third
party consents necessary for the transfer of the Roseville System to Comcast,
there can be no assurance that the proposed sale will occur. The Asset
Purchase Agreement may be terminated by either the Partnership or Comcast if
the closing is not consummated on or before December 31, 1998. See "Proposed
Sale of Assets, Conditions to Closing" for a description of the material
consents necessary for the transfer of the Roseville System to Comcast.
THE ROSEVILLE SYSTEM
The assets to be acquired by Comcast consist primarily of the tangible and
intangible assets of the Roseville System. The Roseville System was purchased
by the Partnership in April 1988 for an aggregate purchase price of
$20,363,000. At the date of acquisition in April 1988, the Roseville System
served approximately 7,600 basic subscribers using cable plant passing
approximately 13,000 homes. As of December 31, 1997, the Roseville System
served approximately 19,190 basic subscribers using cable plant passing
approximately 24,100 homes.
Comcast will purchase all of the tangible assets of the Roseville System
that are leased or owned by the Partnership and used in the operation of the
system, including the system's real estate, vehicles, headend equipment,
underground and aboveground cable distribution systems, towers, earth
satellite receive stations and furniture and fixtures. Comcast also will
acquire certain of the intangible assets of the system, including all of the
franchises, leases, agreements, permits, licenses and other contracts and
contract rights necessary for the operation of the system. Also included in
the sale are the subscriber accounts receivable of the system and all of the
system's records, files, schematics, maps, reports, promotional graphics,
marketing materials and reports filed with federal, state and local regulatory
agencies. The foregoing notwithstanding, certain of the Roseville System's
assets will be retained by the Partnership, including cash or cash equivalents
on hand and in banks, insurance policies, and any federal, state or local
income or other tax refunds to which the Partnership may be entitled.
SALES PRICE
Subject to the closing adjustments described below, the sales price for the
Roseville System is $40,000,000. The Asset Purchase Agreement provides for
closing adjustments that may increase or reduce the sales price by a non-
material amount.
In the event that the Roseville System's current assets as of the closing
date are in excess of the Roseville System's current liabilities as of closing
date that Comcast has agreed to assume, the sales price will be increased by
such excess amount. In the event that the Roseville System's current assets as
of the closing date are less
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than the Roseville System's current liabilities as of the closing date that
Comcast has agreed to assume, the purchase price will be decreased by such
amount. These closing adjustments, which are not expected to be material,
reflect the principle that all liabilities, expenses and income of the
Roseville System prior to the closing date belong to the Partnership and all
liabilities, expenses and income attributable to the Roseville System after
the closing date are for the account of Comcast.
The sales price will be reduced by, at Comcast's option, either (a) an
amount equal to the product of $2,000 multiplied by the number, if any, by
which the number of basic equivalent subscribers to the Roseville System as of
the closing date is less than 20,000 or (b) the amount by which the revenue
attributable to basic, tier and premium video services in the three-month
period immediately preceding the closing date is less than $1,815,600, if any,
multiplied by 22.031 (the "subscriber/revenue adjustment"). The Partnership
would have no obligation to close the sale of the Roseville System if the
subscriber/revenue adjustment exceeds $2,000,000; provided, however, that in
the event that the subscriber/revenue adjustment exceeds the amount of
$2,000,000 and Comcast agrees to limit the amount of the actual
subscriber/revenue adjustment to $2,000,000, then this condition to closing
shall be deemed waived by the Partnership. Because the Managing General
Partner expects that the Roseville System will have more than 20,000 basic
equivalent subscribers and revenue attributable to basic, tier and premium
video services in excess of $1,815,600 in the three-month period immediately
preceding the closing date, the Managing General Partner anticipates that any
closing adjustments relating to the number of the system's basic subscribers
and/or revenue will not reduce the sales price by a material amount.
Please see the Notes to Unaudited Pro Forma Financial Statements for a
detailed accounting of the Managing General Partner's current best estimate of
the anticipated closing adjustments.
CONDITIONS TO THE CLOSING
The obligations of both the Partnership and Comcast to consummate the
closing are subject to the satisfaction or waiver of the following conditions:
(a) any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act") relating to the transactions
contemplated by the Asset Purchase Agreement shall have expired or been
terminated; (b) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
closing; (c) the Partnership and Comcast shall have received all required
consents in connection with the Roseville System's material contracts
(excluding pole attachment agreements) and all approvals of governmental
franchising authorities to the transfer of the Roseville System's cable
television franchises from the Partnership to Comcast, and no such required
consent or franchise approval shall have been revoked; and (d) the holders of
the limited partnership interests of the Partnership shall have voted to
approve the Partnership's sale of the Roseville System to Comcast. On
September 2, 1998, the Partnership received notice of early termination of all
waiting periods under the HSR Act, thereby removing this as a condition to
closing.
The obligation of Comcast to consummate the closing is subject to the
satisfaction or waiver of the following further conditions: (a) the
Partnership shall have performed in all material respects all of its
obligations required under the Asset Purchase Agreement to be performed by it
on or prior to the closing date, the representations and warranties of the
Partnership contained in the Asset Purchase Agreement and in any certificate
or other writing delivered by the Partnership pursuant thereto shall have been
true as of the date of the Asset Purchase Agreement and shall be true at and
as of the closing date in all material respects except for changes permitted
or contemplated by the Asset Purchase Agreement, and Comcast shall have
received a certificate signed by an appropriate executive officer of the
General Partner to the foregoing effect; (b) Comcast shall have received an
opinion of the General Partner's Vice President and General Counsel, dated the
closing date, in form and substance reasonably satisfactory to Comcast; (c)
Comcast shall have received an opinion of the Partnership's FCC counsel, dated
the closing date, in form and substance reasonably satisfactory to Comcast;
(d) the Roseville System shall have as of the closing date at least (i) 19,000
basic equivalent subscribers, (ii) 24,523 homes passed and (iii) revenue
attributable to basic, tier and premium video services in the three-month
period immediately preceding the closing date of at least $1,724,819; (e)
there shall have been no material adverse change in the business, assets,
condition (financial or otherwise) or results of operations of the Roseville
System; (f) Comcast shall have entered into, or received a valid assignment
of, a retransmission
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consent agreement with each broadcaster whose signal is carried on the
Roseville System at the closing on terms and conditions reasonably acceptable
to Comcast (excluding broadcasters that made the "must carry" election);
(g) Comcast shall have conducted an environmental assessment of the Roseville
System's real estate, which assessment shall be satisfactory to Comcast in its
reasonable discretion; (h) no provision of any applicable law or regulation
and no judgment, injunction, order or decree shall restrain, prohibit or
otherwise interfere with the effective operation or enjoyment by Comcast of
all or any material portion of the Roseville System; (i) no proceeding
challenging the Asset Purchase Agreement or the transactions contemplated
thereby or seeking to prohibit or materially delay the closing shall have been
instituted by any person; (j) the Partnership shall have obtained a franchise
renewal agreement with each of the city and county franchising authorities on
terms and conditions reasonably satisfactory to Comcast; (k) Comcast shall
have received evidence satisfactory to it that the Partnership's credit
facility has been repaid and that the security interest of the Partnership's
banks in the Roseville System have been terminated; (l) Comcast shall have
entered into license agreements for pole attachments with each of the parties
to the Roseville System's license agreements for pole attachments or provided
for or made alternative arrangements reasonably acceptable to Comcast for use
of such pole attachments without violation of any legal requirement; (m)
certain contracts related to the Roseville System between third parties and
affiliates of the Managing General Partner shall have been transferred to
Comcast; and (n) the Partnership shall have provided Comcast with written
evidence, reasonably satisfactory to Comcast, that the Partnership has made a
certain $5,000 payment required by one of its franchises for cablecasting.
The obligation of the Partnership to consummate the closing is subject to
the satisfaction or waiver of the following further conditions: (a) Comcast
shall have performed in all material respects all of its obligations under the
Asset Purchase Agreement required to be performed by it at or prior to the
closing date, the representations and warranties of Comcast contained in the
Asset Purchase Agreement and in any certificate or other writing delivered by
Comcast pursuant thereto shall have been true as of the date of the Asset
Purchase Agreement and shall be true at and as of the closing date in all
material respects, and the Partnership shall have received a certificate
signed by an appropriate executive officer of Comcast to the foregoing effect;
(b) the subscriber/revenue adjustment to the sales price shall not exceed the
amount of $2,000,000; provided, however, that in the event that the
subscriber/revenue adjustment to the sales price would exceed such amount but
Comcast agrees to limit the amount of the subscriber/revenue adjustment to the
sales price to an amount equal to $2,000,000, then this condition shall be
deemed waived by the Partnership; (c) the Partnership shall have received an
opinion of the Deputy General Counsel of Comcast, dated the closing date, in
form and substance reasonably satisfactory to the Partnership; and (d) no
proceeding challenging the Asset Purchase Agreement or the transactions
contemplated thereby or seeking to prohibit or materially delay the closing
shall have been instituted by any person.
BREAK-UP FEE PAYABLE TO COMCAST
In order to induce Comcast to enter into the Asset Purchase Agreement, the
Partnership has agreed that if (i) the Managing General Partner fails to vote
in favor of or fails to recommend to the limited partners of the Partnership
that they vote in favor of the sale of the Roseville System to Comcast and the
limited partners of the Partnership fail to approve the sale of the Roseville
System to Comcast, or (ii) the limited partners of the Partnership fail to
approve the sale of the Roseville System to Comcast because of a superior
proposal for the Roseville System received by the Partnership after the date
of the Asset Purchase Agreement and prior to the vote of the limited partners
of the Partnership or any transaction having a similar effect, the Partnership
will pay to Comcast a break-up fee in an amount equal to the greater of five
percent of the $40,000,000 sales price or five percent of the sales price to
be received by the Partnership from the party making the superior proposal.
For this purpose, the term "superior proposal" means any bona fide, written,
unsolicited offer or proposal relating to a merger or other business
combination involving the Partnership or the acquisition in any manner of any
significant equity interest in, or a substantial portion of the assets of, the
Partnership. Limited partners are informed that as of the date of this Proxy
Statement, the Partnership has received no superior proposal for the Roseville
System and the Managing General Partner currently does not expect that the
Partnership will receive a superior proposal for the Roseville System.
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GUARANTEE AND COVENANTS TO COMCAST
In order to induce Comcast to enter into the Asset Purchase Agreement, the
Managing General Partner's parent, Jones Intercable, Inc., has executed and
delivered to Comcast a guarantee by which Jones Intercable, Inc. has
guaranteed all of the liabilities and obligations of the Partnership to
Comcast under the Asset Purchase Agreement. Comcast informed Jones Intercable,
Inc. that it would be unwilling to enter into the Asset Purchase Agreement
without having received Jones Intercable, Inc.'s guarantee. Jones Intercable,
Inc. received no payment from the Partnership in return for giving this
guarantee.
The parties have agreed that none of the Partnership, the Managing General
Partner or Jones Intercable, Inc., nor any of their respective affiliates, nor
any of their respective officers, directors, representatives or agents shall,
directly or indirectly, encourage, solicit, initiate or participate in any way
in discussions or negotiations with or provide any confidential information
to, any entity concerning any merger of or business combination with or
involving the Partnership, the sale of any of the Partnership's assets, other
than in the ordinary course of business, consistent with past practice,
including without limitation, the Roseville System, the sale of the
partnership interests of the Partnership or similar transactions involving the
Partnership. The parties have agreed, however, that nothing contained in the
Asset Purchase Agreement shall prohibit the Partnership, the Managing General
Partner or Jones Intercable, Inc. from responding to any unsolicited proposal
or inquiry solely by advising the person making such proposal or inquiry of
the terms of the Asset Purchase Agreement.
The Managing General Partner agreed with Comcast that the Managing General
Partner would prepare and, as soon as practicable, and in any event within 30
days after the date of the Asset Purchase Agreement, file with the Securities
and Exchange Commission (the "SEC") a preliminary proxy statement comprising
preliminary proxy materials of the Partnership under the Exchange Act with
respect to the transactions contemplated by the Asset Purchase Agreement, and
would thereafter use its best efforts to respond to any comments of the SEC
with respect thereto and to cause a definitive proxy statement and proxy to be
mailed to the limited partners of the Partnership as promptly as practicable.
The Managing General Partner is obligated to notify Comcast promptly of the
receipt of any comments from the SEC or its staff or any other governmental
official and of any request by the SEC or its staff or any other governmental
official for amendments or supplements to the preliminary proxy statement or
for additional information.
The Managing General Partner also agreed with Comcast that this Proxy
Statement would include the affirmative recommendation of the Managing General
Partner that the limited partners of the Partnership approve the transactions
contemplated by the Asset Purchase Agreement, and it does so. The Managing
General Partner also agreed with Comcast that it would take all action
necessary, in accordance with applicable law and the Partnership Agreement, to
conduct a vote of the limited partners of the Partnership as promptly as
practicable to consider the approval of the Asset Purchase Agreement and the
transactions contemplated thereby, and it has done so. The Managing General
Partner also agreed with Comcast that, subject to compliance with applicable
law, it would use commercially reasonable efforts to solicit from the limited
partners of the Partnership proxies in favor of approval of the transactions
contemplated by the Asset Purchase Agreement and to take all other
commercially reasonable action necessary to secure the vote of the limited
partners required to effect the transactions contemplated by the Asset
Purchase Agreement, and it intends to do so. The Managing General Partner also
agreed with Comcast that it would vote its limited partnership interests in
favor of the sale of the Roseville System to Comcast pursuant to the terms and
conditions of the Asset Purchase Agreement, and it intends to do so.
Each of the Partnership, the Managing General Partner and Jones Intercable,
Inc. have agreed with Comcast that for a period of three years from the
closing date neither they nor any person in which they have an economic
interest will directly or indirectly engage in or be financially interested in
or otherwise connected with any business competitive with the Roseville
System. This restrictive covenant will not prohibit the Partnership, the
Managing General Partner or Jones Intercable, Inc. or any person in which any
of the foregoing have an economic interest from, among other things, acquiring
an equity interest in 10 percent or less in any company in competition with
the Roseville System if such investment constitutes a passive investment and
none of the
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entities giving the noncompetition covenant shall play a role in the managing
or operation of such company. The parties have agreed that Comcast shall be
entitled to injunctive relief requiring specific performance of this covenant
not to compete.
BROKERAGE FEE
As permitted by Section 2.2(n)(i) of the Partnership Agreement, which
provides for the payment by the Partnership of brokerage fees to The Jones
Group, Ltd. and IDS Management Corporation, affiliates of the General
Partners, in an amount not to exceed a total of 2.5 percent of the sales price
of a cable television system sold by the Partnership to an unaffiliated party,
the Partnership will pay The Jones Group, Ltd. and IDS Management Corporation
aggregate fees of $1,000,000 upon the completion of the sale of the Roseville
System to Comcast as compensation to such firms for acting as the
Partnership's brokers and financial advisors in connection with the sale of
the Roseville System to Comcast. The $1,000,000 in fees represents 2.5 percent
of the $40,000,000 sales price and will be shared equally by such firms.
REASONS FOR THE TIMING OF THE SALE
The decision to proceed with the sale of the Roseville System was based upon
the Managing General Partner's determination that the Partnership has achieved
its investment objectives with respect to the Roseville System. The Roseville
System has appreciated in value during the holding period.
Following the sale of the Partnership's Carmel System, the Managing General
Partner, through The Jones Group, Ltd., an affiliate of the Managing General
Partner, marketed the Roseville System for sale in 1996. The Jones Group, Ltd.
received offers for the Roseville System from three unaffiliated companies,
including Comcast and an affiliate of the local Roseville telephone company.
Each of the original bids were rejected as too low and new offers were
solicited. Because the Roseville telephone company affiliate submitted a
higher bid in the second round of bidding and offered to include a purchase
price upward adjustment in the purchase agreement, a feature not offered by
the other bidders, its offer was accepted and a definitive asset purchase
agreement was negotiated at arm's-length between the Managing General Partner,
representing the Partnership, and the Roseville telephone company affiliate
over a period of several months and the definitive asset purchase agreement
was executed on October 14, 1996. The proposed sales price at that time was
$30,900,000. Although that transaction was approved by the holders of a
majority of the limited partnership interests in the Partnership, one of the
material closing conditions to that transaction was never satisfied. Because
the prospective purchaser was affiliated with the company that provides
telephone services in the geographical areas in which the Roseville System
provides cable television services, a waiver from the Federal Communications
Commission (the "FCC") of Section 652 of the Telecommunications Act of 1996,
which prohibits the acquisition by a telephone company and its affiliates of
cable systems in the telephone company's service area, was necessary to permit
the prospective purchaser to consummate its acquisition of the Roseville
System. The prospective purchaser, with the support and assistance of the
Managing General Partner, actively sought this waiver from the FCC, but the
FCC failed to grant the request for the waiver. As a result of the FCC's
failure to grant the request for the waiver, the asset purchase agreement
between the Partnership and that prospective purchaser expired and was not
renewed in February 1998, and the Managing General Partner, through The Jones
Group, Ltd., again marketed the Roseville System for sale.
In February 1998, officers of The Jones Group, Ltd. contacted Comcast, one
of the bidders for the Roseville System in 1996, to determine whether Comcast
would be interested in bidding for the Roseville System again. Comcast
indicated that it wished to make an offer for the Roseville System and
informed the Managing General Partner it would pay a premium for the Roseville
System if The Jones Group, Ltd. would refrain from putting the system out for
general bidding. Given Comcast's willingness to pay a premium for the
Roseville System, the Managing General Partner instructed The Jones Group,
Ltd. to negotiate with Comcast. In March 1998, management of the Managing
General Partner and officers of The Jones Group, Ltd. concluded that Comcast's
offer should be accepted in light of the following factors: Comcast's good
reputation as a cable system operator would facilitate the transfer of the
Roseville System's cable franchises to Comcast as buyer, Comcast's willingness
to commit to a rebuild of the Roseville System would make less difficult the
renewal of the Roseville System's cable franchises that are scheduled to
expire in 1999 and 2000, Comcast's strong financial
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position removed any uncertainty about its ability to close its purchase of
the Roseville System, Comcast was willing to close the transaction regardless
of the threat of competition from the local telephone company affiliate that
had failed to acquire the Roseville System and Comcast offered a $40,000,000
sales price, which equates to a sales price equal to 11.95 times the Roseville
Systems' 1997 cash flow and a price of $2,000 per basic equivalent subscriber.
An agreement in principle was reached in March 1998 and the definitive
agreement was executed in July 1998 once the Supervising General Partner
consented to the transaction.
The Partnership has a finite legal existence of 17 years, almost 11 of which
have passed. It was not intended or expected, however, that the Partnership
would hold its cable systems for 17 years. Although it was not possible at the
outset of the Partnership to determine precisely how quickly the investment
objectives with respect to any particular system would be achieved, investors
were informed that past experience with prior partnerships had shown that five
to seven years was the average length of time from the acquisition of a cable
system to its sale. Investors in the Partnership also were able to examine the
track record of prior partnerships because such track record was set forth in
the prospectus delivered in connection with the Partnership's initial public
offering. At the time of the formation of the Partnership, the track record
showed that prior partnerships had rarely held their cable systems for any
longer than six years.
When investing in the Partnership, by virtue of the provisions of the
Partnership Agreement, the limited partners vested in the Managing General
Partner the right and the responsibility to determine when the Partnership's
investment objectives had been achieved. The Roseville System was acquired
because, in the opinion of the Managing General Partner at the time of the
Roseville System's acquisition, it had the potential for capital appreciation
within a reasonable period of time. It is the Managing General Partner's
opinion that during the 10 years that the Roseville System has been held by
the Partnership, the Partnership's investment objectives with respect to the
Roseville System have been achieved. The Managing General Partner used no
specific benchmarks or measurement tools in determining that the Partnership's
investment objectives have been achieved. The Managing General Partner
conducted a very subjective evaluation of a variety of factors including the
length of the holding period, the prospects for future growth as compared to
the potential risks, the cash on cash return to investors, the after-tax
internal rate of return to limited partners and the amount of gain to be
recognized on the sale of assets.
The Managing General Partner generally considered the benefits to the
limited partners that might be derived by holding the Roseville System for an
additional period of time. The Managing General Partner assumed that the
Roseville System probably would continue to appreciate in value and that as a
result the Roseville System might be able to be sold for a greater sales price
in the future. The Managing General Partner weighed these assumptions against
the potential risks to investors from a longer holding period, i.e., the risks
that regulatory, technology and/or competitive developments could cause the
Roseville System to decline in value, which would result in a lesser sales
price in the future. A longer holding period would expose investors to the
risk that competition from direct broadcast satellite companies, telephone
companies and/or neighboring cable companies could diminish the number of
subscribers to the Roseville System's basic and premium services, thereby
decreasing the value of the Roseville System. A longer holding period also
would expose investors to the risk that changes in the regulations promulgated
by the governmental agencies that oversee cable operations could make cable
systems a less desirable investment, thereby decreasing the value of the
Roseville System. Weighing all of these factors, the Managing General Partner
concluded that now rather than later was the time to sell the Roseville
System.
RECOMMENDATION OF THE MANAGING GENERAL PARTNER AND FAIRNESS OF THE PROPOSED
SALE OF ASSETS
The Managing General Partner believes that the proposed sale of the
Roseville System and the distribution of the net proceeds therefrom are fair
to all partners of the Partnership, and it recommends that the limited
partners approve the transaction. In determining the fairness of the proposed
transaction, the Managing General Partner considered each of the following
factors, all of which had a positive effect on their fairness determination:
(i) The limited partnership interests are at present illiquid and the
cash to be distributed to limited partners as a result of the proposed sale
of the Roseville System will provide limited partners with liquidity and
with the means to realize the appreciation in the value of the Roseville
System;
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(ii) The sales price represents the fair market value of the Roseville
System because the sales price was determined in an arm's-length
negotiation between officers of The Jones Group, Ltd. and management of the
Managing General Partner, representing the Partnership, and Comcast;
(iii) The Partnership has held the Roseville System for 10 years, a holding
period beyond that originally anticipated;
(iv) The conditions and prospects of the cable television industry in
which the Partnership is engaged, including the developing threat of
competition from DBS services and telephone companies, and the working
capital and other financial needs of the Partnership if it were to continue
to operate and upgrade the Roseville System, which will need to be rebuilt as
a condition to the renewal of the system's cable franchises; and
(v) The terms and conditions of the Asset Purchase Agreement by and
between the Partnership and Comcast, including the fact that the sales price
will be paid in cash and the fact that Comcast's obligation to close is not
contingent upon its ability to obtain financing.
The Managing General Partner reviewed the terms of the Asset Purchase
Agreement and the sales price and, based on its general knowledge of cable
television system transactions undertaken by cable television companies,
concluded that the sales price and other transaction terms were fair and were
within industry norms for comparable transactions.
CONSENT OF THE SUPERVISING GENERAL PARTNER
Pursuant to Section 2.3(c)(ii) of the Partnership Agreement, the Partnership
could not proceed with the sale of the Roseville System unless the Supervising
General Partner consents to the transaction. After an independent review of all
of the terms and conditions of the proposed sale of the Roseville System to
Comcast, the Supervising General Partner consented to the transaction in July
1998.
CERTAIN EFFECTS OF THE SALE
Upon the consummation of the proposed sale of the Roseville System, the
proceeds of the sale will be used to repay all indebtedness of the Partnership
(including $10,000,000 borrowed under its credit facility, $352,326 in advances
from the Managing General Partner and capital lease obligations of $18,564),
pay brokerage fees to The Jones Group, Ltd., an affiliate of the Managing
General Partner, and to IDS Management Corporation, an affiliate of the
Supervising General Partner, totaling $1,000,000, representing 2.5 percent of
the sales price, for acting as brokers and financial advisors in this
transaction and settle working capital adjustments, and then the Partnership
will distribute the $29,385,638 net sale proceeds to the partners of record as
of the closing date pursuant to the terms of the Partnership Agreement. Because
the distribution to be made on the sale of the Roseville System together with
the April 1996 distribution from the sale of the Carmel System will exceed 125
percent of the amounts originally contributed to the Partnership by the limited
partners,the General Partners will receive general partner distributions on the
sale of the Roseville System. Based upon the pro forma financial information as
of June 30, 1998, as a result of this distribution, the limited partners of the
Partnership, as a group, will receive $27,365,634, the Managing General Partner
will receive $1,010,002 and the Supervising General Partner will receive
$1,010,002 of the net proceeds from the sale of the Roseville System. The
limited partners will be subject to federal and state income tax on the income
resulting from the sale of the Roseville System. See the detailed information
below under the caption "Federal and State Income Tax Consequences."
After the sale of the Roseville System and the distribution of the net
proceeds therefrom, the Partnership will be liquidated and dissolved, most
likely in the first quarter of 1999. Neither Colorado law nor the Partnership
Agreement afford dissenters' or appraisal rights to limited partners in
connection with the proposed sale of the Roseville System. If the proposed
transaction is approved by the holders of a majority of limited partnership
interests, all limited partners will receive a distribution in accordance with
the procedures prescribed by the Partnership Agreement regardless of how or
whether they vote on the proposal. It is anticipated that if the
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proposed transaction is not consummated, the Managing General Partner's
current management team will continue to manage the Roseville System on behalf
of the Partnership until such time as the Roseville System can be sold.
All distributions of the Partnership from the proceeds of the sale of the
Roseville System will be made to the Partnership's limited partners of record
as of the closing date of the sale of the Roseville System. Because
transferees of limited partnership interests following the closing date of the
sale of the Roseville System would not be entitled to any distributions from
the Partnership, a transfer of limited partnership interests following the
closing date of the sale of the Roseville System would have no economic value.
The Managing General Partner therefore has determined that, pursuant to the
authority granted to it by Section 3.5 of the Partnership Agreement, it will
not approve any transfers of limited partnership interests following the
closing of the sale of the Roseville System. Sales of limited partnership
interests pursuant to limited tender offers, in the secondary market or
otherwise will not be possible following the closing of the sale of the
Roseville System.
FEDERAL AND STATE INCOME TAX CONSEQUENCES
The purpose of the following discussion of the income tax consequences of
the proposed transaction is to inform the limited partners of the Partnership
of the federal income tax consequences to the Partnership and to its partners
arising from the proposed sale of the Roseville System. The tax information
included herein was prepared by the tax department of the Managing General
Partner. The tax information is taken from tax data compiled by the Managing
General Partner in its role as the Partnership's tax administrator and is not
based upon the advice or formal opinion of counsel. The tax discussion that
follows is merely intended to inform the limited partners of factual
information and should not be considered tax advice.
PARTNERSHIP ALLOCATION OF GAIN FROM SALE
Section 5.4 of the Partnership Agreement specifies that Partnership
distributions of cable television system net sale proceeds shall be allocated
100 percent to limited partners until they have received a return in an amount
equal to 125 percent of their initial capital contributions and thereafter
such distributions are to be made 75 percent to the limited partners and 25
percent to the General Partners. The net cash proceeds from the Roseville
System's sale, together with prior cash distributions, will allow the limited
partners to receive an amount in excess of 125 percent of the initial limited
partner capital contributions. Accordingly, a portion of the cash
distributions will be specially allocated 75 percent to the limited partners
and 25 percent to the General Partners.
The allocation of gain from the sale of the Roseville System will follow the
allocation provisions of Section 5.3 of the Partnership Agreement. The
allocation of gain will be 100 percent to the limited partners to the extent
of 125 percent of their initial capital contributions and thereafter 75
percent to the limited partners and 25 percent to the General Partners. This
allocation follows the underlying economic gain of the partners and hence
satisfies the "substantial economic effect" test enacted in Internal Revenue
Code ("IRC") Section 704(b) regarding special partnership allocations.
Application of the allocation provisions of Section 5.3 ensures that the
limited partners' net sum of allocable partnership loss and income during the
Partnership's life will equal the net economic gain or loss realized from
their investment in the Partnership. The estimated allocable limited partner
income from the Roseville System sale reported below incorporates the
application of the special partnership allocation rules of Section 5.3.
PROJECTED 1998 TAX RESULTS
By the expected date of the proposed system sale in 1998, most of the
limited partners will have received certain tax benefits from their investment
in the Partnership. Assuming maximum federal income tax rates and no other
sources of passive income, original limited partners of the Partnership will
have received $558,560 in tax benefits from Partnership losses ($14 per $1,000
invested). Tax benefits derived from allocable Partnership losses have been
limited due to the passive loss limitation rules enacted in 1986.
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The 1998 sale of the Roseville System will result in a gain for federal
income tax purposes. The amount of this gain allocated to limited partners
will be approximately $29,542,801. The Managing General Partner estimates that
$25,347,681 ($618 per $1,000 invested) of this gain will be treated as
ordinary income. This amount of ordinary income results from the recapture of
depreciation on business assets under IRC Section 1245. The Managing General
Partner estimates that the remainder of the gain, $4,195,120 ($102 per $1,000
invested), will be treated as long term capital gain under IRC Section 1231.
Some of this allocable gain may be offset by passive loss carryforwards of the
limited partners, which is discussed in more detail below.
APPLICATION OF PASSIVE LOSS CARRYFORWARDS
The Tax Reform Act of 1986 enacted a limitation on a limited partner's
ability to currently deduct allocable partnership losses, which were deemed to
be passive losses. The law phased in the disallowance of passive loss
deductions until 1991, when no passive losses were allowable except to the
extent of passive income or a disposition of the passive activity. The proper
application of these loss limitation rules will have resulted in the existence
of passive loss carryforwards for the Partnership's limited partners. These
potential passive loss carryforwards can be deducted in the current year to
offset the allocable Partnership gains from the sale of the Roseville System.
The Managing General Partner estimates that the Partnership has generated
potential passive loss carryforwards of $5,751,841 ($140 per $1,000 invested)
that may be available for offset against 1998 income. The carryforward amount
is calculated by applying the passive loss limitations to historical
partnership losses and assuming that the limited partners of the Partnership
would not have utilized prior year limited passive losses on account of other
sources of passive income. The 1996 sale of the Partnership's Carmel, Indiana
system effectively utilized a significant portion of the Partnership-generated
passive loss carryforwards. The availability of remaining loss carryforwards
depends on the particular tax history of each limited partner. Partners that
have utilized some or all of prior Partnership losses limited by the passive
loss rules will have deductible passive losses that vary accordingly.
SYNDICATION COSTS
Syndication costs represent the sales commissions paid by limited partners
on their purchase of their limited partnership interests and allocable costs
associated in forming the Partnership. These costs were capitalized on the
Partnership's books and are reflected in the limited partners' capital account
balance. Upon liquidation of the Partnership, the syndication costs cannot be
deducted by the Partnership. However, these costs can be deducted by the
limited partners as a long term capital loss under IRC Section 731. Limited
partners will have an ending capital balance on their final Form 1065,
Schedule K-1 which represents their allocable syndication costs. The
Partnership has syndication costs of $4,760,362 ($116 per $1,000 invested)
that will be deductible by limited partners in the final year of the
Partnership, which is anticipated to be 1999.
Assuming the 31 percent rate applies to ordinary income and the 20 percent
rate applies to long term capital gain income, a limited partner will be
subject to federal taxes of $144 per $1,000 invested in the Partnership. This
tax amount assumes deduction of passive loss carryforwards and syndication
costs as discussed above.
SECONDARY MARKET PURCHASERS
Limited partners that have recently acquired their partnership interests in
the limited partnership secondary market or through tender offers will have
allocable income from the Roseville System sale in the amounts reported above.
Because the Partnership does not have an IRC Section 754 election in effect,
the purchase of a limited partnership interest in the Partnership places the
new investor in the same position as the limited partner from whom the
interest was purchased.
Newer investors in the Partnership will not have their net tax basis in
their partnership interests reflected on their annual Schedule K-1. Such
limited partners must track their tax basis by adjusting their original cost
by allocable income or loss and partnership distributions. Their adjusted tax
basis will be deductible as a long term capital loss under IRC Section 731 in
a manner similar to the Partnership syndication costs discussed above.
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TAX WITHHOLDING ON SALE PROCEEDS
The sale of the Roseville System will require limited partner reporting to
the State of California. The Managing General Partner is required by
California state law to withhold 7 percent of each U.S. nonresident partner's
cash distribution from California sources. The Managing General Partner is
required to withhold 9.3 percent of each foreign nonresident partner's cash
distribution. This withholding requirement does not apply to tax exempt
entities such as trusts and IRAs.
California nonresident limited partners are required to file California
nonresident state tax returns to compute the appropriate state tax liability.
Documentation of withheld taxes will be reported on state specified forms to
limited partners in January 1999. Detailed California reporting instructions
and blank forms will be provided to limited partners in their annual tax
reporting package, which will be mailed to limited partners in March 1999.
FEDERAL REPORTING BY TAX EXEMPT ENTITIES
The 1998 Roseville System sale will generate Unrelated Business Taxable
Income (UBTI) to tax exempt entities, which will require the filing of Form
990-T. Although many trust administrators complete the required tax returns,
responsibility for completion of the Form 990-T ultimately rests with the
beneficiaries of trusts, IRAs and other tax exempt entities. Because this is
an area in which there is a variance of policy among trust administrators,
each limited partner who is a beneficiary is advised to confirm with his or
her trust administrator how this filing requirement will be fulfilled.
The Managing General Partner has learned that some trust administrators will
file a Form 990-T without consideration of prior year loss carryforwards. If
your plan administrator employs this methodology, your tax exempt plan will be
subject to significant tax liabilities that would not be incurred if prior
year losses were reported. Each limited partner who is a beneficiary of a tax
exempt entity is advised to inquire about the reporting methodology employed
by his or her trust administrator if the trust administrator is filing the
Form 990-T for 1998.
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CERTAIN INFORMATION ABOUT THE PARTNERSHIP, THE GENERAL
PARTNERS AND THE PURCHASER OF THE SYSTEM
The principal executive offices of the Partnership and the Managing General
Partner are located at 9697 East Mineral Avenue, Englewood, Colorado 80112,
and their telephone number is (303) 792-3111. The principal executive offices
of the Supervising General Partner are located at IDS Tower 10, 733 Marquette
Avenue, Minneapolis, Minnesota 55402, and its telephone number is (612) 671-
2927. The principal executive offices of Comcast are located at 1500 Market
Street, Philadelphia, Pennsylvania 19102.
The parent of the Managing General Partner is Jones Intercable, Inc.
("Intercable"). Both Intercable and Comcast are among the nation's largest
cable television system operators. Intercable was formed by Glenn R. Jones,
who serves as Intercable's chairman and chief executive officer. Through his
ownership of a majority of Intercable's supervoting Common Stock, Mr. Jones is
entitled to elect a majority of the members of Intercable's Board of Directors
and he otherwise controls the company. Intercable's current other major
shareholder is BCI Telecom Holding Inc. ("BTH"). BTH owns approximately 36
percent of Intercable's Class A Common Stock. Through rights granted to it
under a shareholders agreement among Mr. Jones and his affiliates, BTH and
Intercable, BTH has the ability to nominate several persons to Intercable's
Board of Directors. In addition, BTH holds an option to purchase Mr. Jones'
supervoting Common Stock of Intercable. In May 1998, BTH announced its
intention to sell approximately half of its shares of Intercable's Class A
Common Stock to Comcast. BTH also announced its intention to grant to Comcast
the right to acquire all of Mr. Jones' supervoting Common Stock of Intercable
from BTH if and when BTH exercises its option to purchase such shares. Except
in limited circumstances, such option would only be exerciseable during the
12-month period following December 20, 2001. BTH also announced its intention
to sell to Comcast at the time that the option is exercised BTH's remaining
holdings in Intercable. In August 1998, Intercable, Mr. Jones and his
affiliates, BTH and Comcast announced that agreements have been executed that
accelerated the exercise of the option by Comcast and allow for the early
closing of the transactions between Comcast and BTH. The closing of the option
exercise is conditioned upon the satisfaction or waiver of certain conditions
precedent. Upon the closing of the option exercise, which is anticipated to
occur in the first quarter of 1999, Comcast will own approximately 38 percent
of the economic and approximately 48 percent of the voting interest in
Intercable, and the Common Stock of Intercable to be held by Comcast will
allow it to elect 75 percent of the members of Intercable's Board of
Directors. The proposed change in control of Intercable, if it occurs, is not
expected to occur until after the closing of the Partnership's sale of the
Roseville System to Comcast. Each of these transactions were negotiated
independently of the other and the closing of the sale of the Roseville System
is not related to or contingent upon the closing of Comcast's investment in
Intercable. The Managing General Partner believes that the announced
transaction among Intercable, Mr. Jones and his affiliates, BTH and Comcast
involving the equity ownership of Intercable does not compromise the arm's-
length nature of the Partnership's proposed sale of the Roseville System to
Comcast.
The limited partnership interests of the Partnership are registered pursuant
to Section 12(g) of the Exchange Act. As such, the Partnership currently is
subject to the informational reporting requirements of the Exchange Act and,
in accordance therewith, is obligated to file periodic reports, proxy
statements and other information with the Securities and Exchange Commission
relating to its business, financial condition and other matters. Reports and
other information filed by the Partnership can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the following regional offices
of the Commission: 7 World Trade Center, Suite 1300, New York, New York 10048
and Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The SEC also maintains a World Wide Website on the Internet
that contains reports, proxy statements and other information of registrants
(including the Partnership) that file electronically with the SEC at
http://www.sec.gov. After the net proceeds from the sale of the Roseville
System finally are distributed to the Partnership's limited partners of record
as of the closing date of the sale of the Roseville System, the Partnership
will be liquidated and dissolved. The Partnership's registration and reporting
requirements under the Exchange Act will be terminated upon the dissolution of
the Partnership, most likely in the first quarter of 1999.
15
<PAGE>
USE OF PROCEEDS FROM THE ROSEVILLE SYSTEM'S SALE
The following is a brief summary of the Partnership's estimated use of the
proceeds from the sale of the Roseville System. All of the following selected
financial information is based upon amounts as of June 30, 1998 and certain
estimates of liabilities at closing. Final results may differ from these
estimates. A more detailed discussion of the financial consequences of the
sale of the system is set forth below under the caption "Unaudited Pro Forma
Financial Information." All limited partners are encouraged to review
carefully the unaudited pro forma financial statements and notes thereto.
If the holders of a majority of limited partnership interests of the
Partnership approve the proposed sale of the Roseville System and the
transaction is closed, the Partnership will pay all of its indebtedness, and
then the Partnership will distribute the net sale proceeds pursuant to the
terms of the Partnership Agreement. The estimated uses of the sale proceeds
are as follows:
<TABLE>
<S> <C>
Contract Sales Price of the Roseville System.................... $ 40,000,000
Add:Cash on Hand................................................ 837,732
Less:Estimated Net Closing Adjustments.......................... (81,204)
Repayment of Debt............................................ (10,370,890)
Brokerage Fees............................................... (1,000,000)
------------
Cash Available for Distribution by the Partnership......... $ 29,385,638
============
</TABLE>
Based upon financial information available at June 30, 1998, below is an
estimate of all cash distributions that will have been made to limited
partners after the distribution of the proceeds from the sale of the Roseville
System is completed.
Summary of Estimated Cash Distributions to Limited Partners:
<TABLE>
<S> <C>
Return of Limited Partners' Initial Capital on the 1996
Sale of the Partnership's Carmel System..................... $30,000,000
Return of Limited Partners' Initial Capital on the 1998 Sale
of the Partnership's Roseville System ...................... 11,044,500
Return of Limited Partners' 25 Percent Liquidation
Preference on the 1998 Sale of the Partnership's Roseville
System...................................................... $10,261,125
Limited Partners' Share of Residual Proceeds on the
1998 Sale of the Partnership's Roseville System............. 6,060,009
-----------
Total Estimated Cash Received by Limited Partners............ $57,365,634
===========
Total Cash Received per $1,000 of Limited Partnership
Capital..................................................... $ 1,400
===========
Total Cash Received per $250 Limited Partnership Interest ... $ 350
===========
</TABLE>
Based on financial information available at June 30, 1998, the following
table presents the estimated results of the Partnership when it has completed
the sale of the Roseville System:
<TABLE>
<S> <C>
Dollar Amount Raised............................................ $41,044,500
Number of Cable Television Systems Purchased.................... Two
Date of Closing of Offering..................................... January 1989
</TABLE>
<TABLE>
<S> <C>
Tax and Distribution Data per $1,000 of Limited Partnership
Capital:
Federal Income Tax Results
Ordinary Income (Loss)
--from operations............................................. $ (807)
--from recapture.............................................. $1,207
Capital Gain (Loss)........................................... $ -0-
Cash Distributions to Investors
Source (on GAAP basis)
--investment income........................................... $ 400
--return of capital........................................... $1,000
Source (on cash basis)
--sales....................................................... $1,400
</TABLE>
16
<PAGE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
OF IDS/JONES GROWTH PARTNERS 87-A, LTD.
The following unaudited pro forma balance sheet assumes that as of June 30,
1998, the Partnership had sold the Roseville System for $40,000,000. The funds
available to the Partnership, adjusting for the estimated net closing
adjustments of the Roseville System, are expected to total approximately
$39,918,796. Such funds will be used to repay all indebtedness of the
Partnership (including $10,000,000 borrowed under its credit facility,
$352,326 in advances from the Managing General Partner and capital lease
obligations of $18,564), pay brokerage fees to The Jones Group, Ltd., an
affiliate of the Managing General Partner, and to IDS Management Corporation,
an affiliate of the Supervising General Partner, totaling $1,000,000,
representing 2.5 percent of the sales price, for acting as brokers and
financial advisors in this transaction and settle working capital adjustments,
and the balance will be distributed to the partners of the Partnership of
record as of the closing date pursuant to the terms of the Partnership
Agreement. Because the distribution to be made on the sale of the Roseville
System together with the April 1996 distribution from the sale of the Carmel
System will exceed 125 percent of the amounts originally contributed to the
Partnership by the limited partners, the General Partners will receive general
partner distributions on the sale of the Roseville System.
The unaudited pro forma balance sheet should be read in conjunction with the
appropriate notes to the unaudited pro forma balance sheet.
ALL OF THE FOLLOWING UNAUDITED PRO FORMA FINANCIAL INFORMATION IS BASED UPON
AMOUNTS AS OF JUNE 30, 1998 AND CERTAIN ESTIMATES OF LIABILITIES AT CLOSING.
FINAL RESULTS MAY DIFFER FROM SUCH INFORMATION.
17
<PAGE>
IDS/JONES GROWTH PARTNERS 87-A, LTD.
UNAUDITED PRO FORMA BALANCE SHEET
JUNE 30, 1998
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS BALANCE
----------- ------------ -----------
<S> <C> <C> <C>
ASSETS
Cash and Cash Equivalents............... $ 837,732 $28,547,906 $29,385,638
Trade Receivables, net.................. 275,749 (275,749) --
Investment in Cable Television
Properties:
Property, plant and equipment, net.... 9,166,770 (9,166,770) --
Franchise costs and other intangibles,
net.................................. 2,496,067 (2,496,067) --
----------- ------------ -----------
Total investment in cable television
properties......................... 11,662,837 (11,662,837) --
Deposits, Prepaid Expenses and Deferred
Charges................................ 94,969 (94,969) --
----------- ------------ -----------
Total Assets............................ $12,871,287 $ 16,514,351 $29,385,638
=========== ============ ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Debt.................................. $10,018,564 $(10,018,564) $ --
Advances from Managing General
Partner.............................. 352,326 (352,326) --
Trade accounts payable and accrued
liabilities.......................... 416,289 (416,289) --
Subscriber prepayments................ 35,633 (35,633) --
Accrued distribution to limited
partners............................. -- 27,365,634 27,365,634
Accrued distribution to General
Partners............................. -- 2,020,004 2,020,004
----------- ------------ -----------
Total Liabilities................... 10,822,812 18,562,826 29,385,638
----------- ------------ -----------
Partners' Capital:
Managing General Partner.............. (3,741) 3,741 --
Supervising General Partner........... (3,740) 3,740 --
Limited Partners...................... 2,055,956 (2,055,956) --
----------- ------------ -----------
Total Partners' Capital............. 2,048,475 (2,048,475) --
----------- ------------ -----------
Total Liabilities and Partners'
Capital.............................. $12,871,287 $ 16,514,351 $29,385,638
=========== ============ ===========
</TABLE>
The accompanying notes to unaudited pro forma financial statements are an
integral part of this unaudited balance sheet.
18
<PAGE>
IDS/JONES GROWTH PARTNERS 87-A, LTD.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS BALANCE
----------- ----------- ---------
<S> <C> <C> <C>
REVENUES.................................... $7,840,578 $(7,840,578) $ --
COSTS AND EXPENSES:
Operating expenses........................ 4,633,573 (4,633,573) --
Management fees and allocated overhead
from the General Partners................ 931,938 (931,938) --
Depreciation and Amortization............. 1,589,820 (1,589,820) --
---------- ----------- ---------
OPERATING INCOME............................ 685,247 (685,247) --
---------- ----------- ---------
OTHER INCOME (EXPENSE):
Interest expense.......................... (702,281) 702,281 --
Other, net................................ (461,290) 461,290 --
---------- ----------- ---------
Total other income (expense), net....... (1,163,571) 1,163,571 --
---------- ----------- ---------
NET LOSS.................................... $ (478,324) $ 478,324 $ --
========== =========== =========
NET LOSS PER LIMITED PARTNERSHIP INTEREST... $ (2.88) $ --
========== =========
</TABLE>
The accompanying notes to unaudited pro forma financial statements are an
integral part of this unaudited statement.
19
<PAGE>
IDS/JONES GROWTH PARTNERS 87-A, LTD.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS BALANCE
----------- ----------- ---------
<S> <C> <C> <C>
REVENUES.................................... $4,143,522 $(4,143,522) $ --
COSTS AND EXPENSES:
Operating expenses........................ 2,431,327 (2,431,327) --
Management fees and allocated overhead
from the General Partners................ 479,662 (479,662) --
Depreciation and amortization............. 791,647 (791,647) --
---------- ----------- ---------
OPERATING INCOME............................ 440,886 (440,886) --
---------- ----------- ---------
OTHER INCOME (EXPENSE):
Interest expense.......................... (354,640) 354,640 --
Other, net................................ (20,448) 20,448 --
---------- ----------- ---------
Total other income (expense), net....... (375,088) 375,088 --
---------- ----------- ---------
NET INCOME.................................. $ 65,798 $ (65,798) $ --
========== =========== =========
NET INCOME PER LIMITED PARTNERSHIP
INTEREST................................... $ .40 $ --
========== =========
</TABLE>
The accompanying notes to unaudited pro forma financial statements are an
integral part of this unaudited statement.
20
<PAGE>
IDS/JONES GROWTH PARTNERS 87-A, LTD.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
1) The following calculations present the sale of the Roseville System and
the resulting estimated proceeds expected to be received by the Partnership.
2) The unaudited pro forma balance sheet assumes that the Partnership had
sold the Roseville System for $40,000,000 as of June 30, 1998. The unaudited
pro forma statements of operations assume that the Partnership had sold the
Roseville System for $40,000,000 as of January 1, 1997.
3) The estimated gain recognized from the sale of the Roseville System and
corresponding estimated distribution to limited partners as of June 30, 1998
has been computed as follows:
GAIN ON SALE OF ASSETS:
<TABLE>
<S> <C>
Contract sales price............................................. $ 40,000,000
Less: Net book value of investment in cable television properties
at June 30, 1998........................................... (11,662,837)
Brokerage fees................................................... (1,000,000)
------------
Gain on sale of assets........................................... $ 27,337,163
============
DISTRIBUTION TO PARTNERS:
Contract sales price............................................. $ 40,000,000
Working Capital Adjustment:
Add: Trade receivables, net..................................... 275,749
Prepaid expenses........................................... 94,969
Less: Accrued liabilities........................................ (416,289)
Subscriber prepayments..................................... (35,633)
------------
Adjusted cash received........................................... 39,918,796
Less: Outstanding debt to third parties.......................... (10,018,564)
Outstanding advances from the Managing General Partner..... (352,326)
Brokerage fee to The Jones Group, Ltd...................... (500,000)
Brokerage fee to IDS Management Corporation................ (500,000)
Add: Cash on hand............................................... 837,732
------------
Cash available for distribution in 1998.......................... $ 29,385,638
============
Limited partners' share.......................................... $ 27,365,634
============
Managing General Partner's share................................. $ 1,010,002
============
Supervising General Partner's share.............................. $ 1,010,002
============
</TABLE>
21
<PAGE>
AVAILABLE INFORMATION
The Partnership's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and the Partnership's Quarterly Reports on Form 10-Q for the
fiscal quarters ended March 31, 1998 and June 30, 1998 are being mailed to the
limited partners of the Partnership together with this Proxy Statement.
INCORPORATION BY REFERENCE
The Partnership's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and the Partnership's Quarterly Reports on Form 10-Q for the
fiscal quarters ended March 31, 1998 and June 30, 1998 are incorporated by
reference in their entirety in this proxy statement.
22
<PAGE>
[LOGO OF JONES INTERCABLE, INC.]
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE PARTNERSHIP BY THE MANAGING GENERAL
PARTNER
The undersigned Limited Partner of IDS/Jones Growth Partners 87-A, Ltd., a
Colorado limited partnership, hereby votes on the sale of the Partnership's
Roseville, California cable television system to Comcast Corporation or one of
its affiliates for a sales price of $40,000,000 in cash, subject to normal
closing adjustments, pursuant to the terms and conditions of that certain Asset
Purchase Agreement dated as of July 21, 1998, as follows:
[_] CONSENTS [_] WITHHOLDS CONSENT [_] ABSTAINS
(You must sign on the reverse side of this proxy card for your vote to count.)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED LIMITED PARTNER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSED SALE TRANSACTION.
PLEASE SIGN EXACTLY AS NAME
APPEARS.
DATED: _____________________, 1998
__________________________________
Beneficial Owner Signature
(Investor)
__________________________________
Authorized Trustee/Custodian
Signature
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
[LOGO OF JONES INTERCABLE, INC.]
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE PARTNERSHIP BY THE MANAGING GENERAL
PARTNER
The undersigned Limited Partner of IDS/Jones Growth Partners 87-A, Ltd., a
Colorado limited partnership, hereby votes on the sale of the Partnership's
Roseville, California cable television system to Comcast Corporation or one of
its affiliates for a sales price of $40,000,000 in cash, subject to normal
closing adjustments, pursuant to the terms and conditions of that certain Asset
Purchase Agreement dated as of July 21, 1998, as follows:
[_] CONSENTS [_] WITHHOLDS CONSENT [_] ABSTAINS
(You must sign on the reverse side of this proxy card for your vote to count.)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED LIMITED PARTNER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSED SALE TRANSACTION.
All owners must sign exactly as
name(s) appear on label.
When limited partnership inter-
ests are held by more than one
person, all owners must sign.
When signing as attorney, as ex-
ecutor, administrator, trustee or
guardian, please give full title
as such. If a corporation, please
sign in full corporation name by
authorized officer. If a partner-
ship, please sign in partnership
name by authorized person.
DATED: _____________________, 1998
__________________________________
Signature--Investor 1
__________________________________
Signature--Investor 2
__________________________________
Signature--Investor 3
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
