O83-50ORDINANCE NO. ~_~-~¢9
AN ORDINANCE OF THE CITY OF BOYNTON BEACH,
FLORIDA, GRD~TING A NON-EXCLUSIVE LICENSE
TO SPACELINK OF FLORIDA, LTD. TO OPERATE
A COMMUNITY ANTENNA TELEVISION SYSTEM
WITHIN CERTAIN AREAS OF THE MUNICIPAL
LIMITS OF THE CITY OF BOYNTON BEACH;
PROVIDING THE TER~[S OF SAID LICENSE;
PROVIDING FOR A REPEALING CLAUSE; PRO-
VIDING AN EFFECTIVE DATE; AND FOR OTHER
PURPOSES.
WHEREAS, SPACELINK OF FLORIDA, LTD., a Colorado
corporation authorized to do business in Florida, has requested
a non-exclusive easement to furnish cable television to certain
areas in the City of Boynton Beach; and
WHEREAS, the City Council has determined that it is
in the best interest for the municipality to authorize instal-
lation of a community antenna television system for the use of
reSidents and inhabitants of said city; and
WHEREAS, the application attached~to this ordinance
as Exhibit "A" has been reviewed by the City Council; and
%~HEREAS, a review of the application is found to be
in conformity With the provisions of Chapter 7A of the codified
ordinances for the City of Boynton Beach, Florida.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL
OF THE CITY OF BOYNTON BEACH, FLORIDA:
Section 1. SPACELINK OF FLORIDA, LTD. has submitted
an application for the privilege of conducting community
antenna television systems within the City of Boynton Beach
(said application is attached hereto as Exhibit "A" of said
ordinance and made a part hereof by reference). Said SPACELINK
OF FLORIDA, LTD. is hereby granted and awarded a non-exclusive
license to construct, license, operate and maintain a community
antenna television system within a certain area of municipallimits
of the City of Boynton Beach (as described in Exhibit "A" of this
ordinance) for a period of twenty (20) years from the effective
date of this ordinance, in strict accordance with the terms and
provisions of the aforedescribed application and in strict
accordance with the provision of Chapter 7 of the codified
ordinance of the City of Bovnton Beach, Florida; which provisions
are hereby also adopted by reference and made a part of this
ordinance and the license is hereby awarded.
Section 2. That all ordinances or parts of ordinances
in conflict herewith are hereby repealed.
Section 3~ That should any section or provision of
this ordinance or any portion hereof be declared by a Court of
competent jurisdiction to be invalid, such decision shall
not affect the remainder of this ordinance.
SeCtion 4. That this ordinance shall be effective
immediately upon its passage~
Section 5. That authority is hereby granted to codify
this ordinance.
FIRST READING this ~z~ day of ~~~
SECOND READING AND FINAL PASSAGE this ~day of
kTTEST:
(Corp. Seal)
, 1983.
CITY OF BOYNTON BEACH, FLORIDA
Vice 'Ma~ ~-~
ALAN f. B~ACKETT
LAW OFFICES
BI:{2kGKETT, GOOK, S2~ED, WELGI-I (~; SCOTT
218 DATURA STREET
POST OFFICE .BOX 3746
WEST PALM ]~EAfi;H, FLORI DA' 334OB
TELEPHONE (305) 655 -- 8~3J
September 13 , 1983
Mr. Peter Cheney
City Manager of Boynton Beach
P.O. Box 310
Boynton Beach, Florida 33435-0313
Re: CATV Franchise Application of Spacelink of Florida, Ltd.
Dear Mr. Cheney:
We represent Spacelink of Florida, Ltd., a Colorado corporation
authorized to. do business in Florida and engaged in the cable
TV business. Spacelink of Florida, Ltd. is a wholly owned
subsidiary of Spacelink Ltd. The parent company has offi.cies
at 5400 S~ Syracuse Street, Greenwood Village, Englewood,
Colorado, 80-111. The local-office i's located at 1490 Golden
Lakes BoUlevard, West Palm Beach, Florida, 33411. The
President and Chief Operations officer of Spacelink of Florida,
Ltd. is Cecil C. Rush, Jr. At the present time, Spacelink of
Florida, Ltd. is desirous-of[obtaining a franchise from the
City of Boynton Beach to construct and operate a community
antenna television system with Boynton Beach, Specifically,
Spacelink would like to obtain a franchise for the area from
1-95 west to Lawrence Road, from the Boynton Canal north to
Hypoluxo Raod on the-south, including any areas therein which
may become part of the City of Boynton Beach through annexation.
Pursuant to Boynton Beach Ordinance Section 7-28, .Spacelink'of
Florida, Ltd. is hereby making application by this letter and
the attached Exhibits. For your convenience, we have arranged'
the information requested, by the Ordinance in correspondingly
numbered Exhibits.
1. Exhibit I ~c~ntains a complete listing of the names,
addresses, and telephone numbers of Spacelink of
Florida, Ltd. and its parent company, along with the
names and addresses of the directors main officers,
major stockholders and associates of both.
2. Exhibit II contains a statement and description of
the CATV system proposed in addition to the other
information requested under Section 2 of your Ordinance.
EXHIBIT "A"
Mr. Peter Cheney
Page Two
Exhibit III contains a description in detail of
public streets, etc., in which Spacelink's proposes
to maintain CATV equipment alOng with a detailed
description of the equipment to be constructed
and the proposed, specific location thereof.
E~hibit IV of the map shows the proposed service
area.
m
Exhibit V contains a proposed rate schedule along
with a .copy of our porposed service agreement be%ween
Spacelink and our subscribers.
Exhibits VI and VII are representations or warranties
from Spacelink of Florida, Ltd. regarding their
contracts with public utility companies and all
other agreements in regard to this proposed franchise.
Exhibit VIII includes our latest available financial
statement; a current one has been ordered and will be
forwarded to you immediately upon receipt. We are
however, attaching a current financial statement (dated
5/83) and annual report of our Parent Company Spacelink,
Ltd, along with a letter from them assuring you of
their full financial support for the operations of
Spacelink of Florida, Ltd.
Although not required by your Ordinance, we are also attaching letters
o.f reference from Versatile Investment Properties, Inc. and The Satter
Companies, Inc. for whom we have provided similar services.
We are willing to pay a franchise fee of up to 3% of "gross subscriber
revenues" since this appears to be the standard in the industry, but
we would appreciate no% being charged more than other recent franchise
applicants.
In addition to the enclosed items, should there be any additional
items required or requested by you~ we will be happy to furnish these
upon request.-
Enclosures
CHC/ms
Sincerely,
Christopher H. Cook
Attorney for Spacelink of Florida,Ltd
a Colorado corporation
EXHIBIT
N~iES, ADDRESSES AND PHONE NUMBER OF APPLICANT, DIRECTORS, MAIN
OFFICERS, ~JOR STOCKHOLDERS AND ASSOCIATES; NAMES AND ADDRESSES
OF PARENT AND SUBSIDIARY COMPANIES
Applicant:
Spacelink of Florida, Ltd., Inc..
1490 Golden Lakes Boulevard
West Palm Beach, Florida 33411
(305) 686-158t
Officers, Directors, Stockholders and Associates:
Glen R. Jones, Chief Executive Officer
1490 Golden Lakes Boulevard
West Palm Beach, Florida 33411
(305) 686-!581
Cecil C. Rush, Jr., President & Chief Operations Officer
1490 Golden Lakes Boulevard
West Palm Beach, Florida 33411
(305) 686-i581
Christine E, Jones, Vice President
1490 Golden Lakes Boulevard
West Palm Beach, Florida 33411
(305) 686-1581
Hana Rokusek, Treasurer
1490 Golden Lakes Boulevard
West Palm Beach, Florida 33411
.... (305) 686--1581
Peter L. Edwards, Secretary
1490 Golden Lakes Boulevard
West Palm Beach, Florida 33411
(305) 686--1581
Renee Fried'man~ Assistant Secretary
1490 Golden Lakes Boulevard
West Palm Beach, Florida 33411
(305) 686-1581
~perators and Associates:
Cecil C. Rush, Jr.
1490 Golden Lakes Boulevard
West Palm Beach, Florida 33411
(305) 686-i581
Don A. Spears
1490 Golden Lakes Boulevard
West Palm Beach, Florida 33411
(305) 686-!581
Home Address:
5020 Old Spanish Trail
Lantana, Florida 33462
Robert L. Shipley
1490 Golden Lakes Boulevard
..... t~ ].or_, c~ 3341]
Pepper & Corazzini
Washington, D.C. (F.C.C. Counsel)
700 Montgomery Building
1776 K Street, N.W.
Washington, D.C. 20006
(202) 296-0600
Parent Company:
Spacelink Ltd.
5400 S. Syracuse Street
Greenwood Village
Englewood, Colorado 80111
Officers o~ Parent:
Glenn R. Jones, .Chief_Executive Officer
(same address as Parent' Company)
John Ostermitier,~Ex~cUtive VicePresident
(same address as Parent Company)
Christine E. Jones, Vice President
(same address as Parent Company)
Hana Rokusek, Treasurer
(Same address as Parent Company)
Peter L.' Edwards, Secretary
(same address as Parent Company)
Renee Friedman, Assistance Secretary
(same ad~r~ess as Parent Company)
EXHIBIT II
The cable television system proposed by Spacelink will be of
modern design providing quality and dependable ~service to all
customers. The system will be capable of carrying thirty-five
(35') channels immediately as it is built. The design of the
system will ~be such that a simple change in electronics w±ll
make the system capable of carrying fifty-four (54) channels
when consumer demand warrants.
Additionally, the system will be constructed so that it will
be capable of two-way communications. This feature will
allow the system to offer such-services as security systems
and other innovative services when feasible.
The system will be ~constructed so that no less than every
third amplifier' ~ilt h'ave "automatic gain control". This
feature will provide consistant signal levels which will in
turn provide more consistant signal auatity to the consumer.
Also, the system will have "stand-by" power supplies. This
feature will provide back up power to keep the system running
when electric ser-v-ice~-is temporarily interrupted. This elimin-
ates those short-nuisance outages that greatly irritate the
customer.
The head-end, receiving site for all television signals, will
be the existing site which is located within the Dos Lagos de-
velopment. This site currently receives off-air and satellite
channels. The main trunk cable will exit the Dos Lagos develop-
ment on to ,Congress Avenue. The main north~south trunk cable
will run along the west side of Congress Avenue. The main
east-west trunk cables will run along NW 22nd'Avenue and Miner
Road as they develop. Distribution cables will branch off Of
the main trunk cable to serve the various areas as they develop.
The system will be constructed consistant with .existing util-
ities. In thoSe areas where utilities are aerial the system will
be built aerial, and where utilities are underground the system
will be underground.
Ail aerial construction, however, is subject to receiving pole
attachment agreements from the local power and telephone com-
panies. Should'theSe agreements not be received or cause
construction delay's %hen~Spacelink will construct the entire
cable system underground. In either case all construction will
be consistant with local~ codes and the National Electrical code.
All installations~ ~ '
,sezvlce and maintenance will be coordinated
from the existing offiCe'facility at 1490 Golden Lakes Boulevard
West Palm Beach, Florida~ 33411. All vehicles are radio dis- .
patched and can promptly'~respond to any customer complaint.
Should an office become necessary it would be located as close
to the franchise area as possible. The commercial area at
Congress Avenue and New Boynton Road would be ideal.
EXHIBIT III
Public streets and rights of way proposed to be used are marked
in pink on the attached EXHIBIT IV~ Primarily these are Congress
Avenue, N.W. 22nd Street, Miner Road, Meadows Boulevard, Baytree
Circle, Baytree Lane, Cedar Drive, Cedar Circle, Cedar Lane,
Cedar PlaCe, Dogwood Circle, and High Ridge Road. Currently ~most
of the area is undeveloped and many streets which are yet to ~e
developed are difficult to determine at this time.
Ail Cable used in the construction of the system will be of
high quality and dependability. All trunk cable will be
Comm-Scope PiTI three quarter inCh and distribution cable will
be Comm-Scope PIII half-inch. All underground cable will be
"flooded" and designed specifically for underground use. All
aerial cable will have a vinyl jacket to protect it and help
insure dependable service. All amplifiers will be C-Cor. Trunk
amplifiers will be C-Cor Model 501D, and distribution amplifiers
will be C-Cor Model E417.. All taps will be either RMS or Magnavox.
While it is Spacetink's intention to use the equipment specified
it may be necessary to substitute other equipment due to a short-
age or delay of manufacturers. Any equipment to be substituted
wilt be of comparable .quality and performance to the ~quipment
specified. A proposed system layout is attached' as EXHIBIT'III.
EXHIBIT IV
Attached is a map delineating, by green border, the specific
franchise area for which Spacelink is making appliCation,
(EXHIBIT IV). ~We would like Chis area to include the area
f~om 1-95 West to Lawrence Road, bounded by the Boynton Canal
on the South' and Hypoluxo Road on the North, including any
areas within-thOse boundaries that_ may become available
through annexation to the City of Boynton Beach. -As noted on
the Exhibit, the system will be built in phases as the ar'ea
develops.
Phase I is the areas known as Congress Lakes, The Meadows, and
Dos Lagos. Discussions are underway with these developers
for the right to utilize any private easements which may be
necessary.
Phase II of t~e-. system will be developed as the area develops.
It is Spacelink's intention to provide service to these
developing areas no mor/e th~n thirty (30) days after a deve'loDment
is. occupied.
~lexander &.Alexander Inc.
650~S. Cherry St., suite 1100
80222
ti- [ E~
Named Insured wording) ......... c°~" TM
cOMPAN'~
LE1TER
0.'80111
POLICY
~ ~AIION DAlE
POLICY Nt
0~ ~N'~ ~ Fireman'S Fund i~surance Co.
LA 3,267663
Mission National Ins. Co.
Argonaut insurance Co.
Integrity Insurance Co~
BODIL ? INJURY
4 / 01 / 84 PROPEl tTY DAMAGE
AGGREGATE
BODIL'~ INJURY AND
PROPI .RTY DAMAGE
C )MBINED
500,
500,
FORM
LA 326766:3
MN 0217 39
WC53 417 00174
4/ol/84
4/Ol/84
4/Ol/84
500,
PERSONA- INJURY
) OILY INJURY $
"*CH PERSON) $
BC OILY INJURY
(EN ,'H ACCIDENT]
PRO PERTY DAMAGE
pROPERTY DAMAGE $ 500 ,
BOI)ILY INJURY A ~D
pRO~E~TYDA~GE $ 5,000 ~: 5,000
CoNtBINED
STATUTORY
$20,000,000 Loss Limit
~o-lic; eS ie c ~l[u:,~Ued before the exp ration date thereof, the issuing com-
' pa~Ymaii suchWill :~-~¢';'~:noticef theshallaboVeimposemailde'"~c,:,,~.gO .noib'< d days' /vrili:~:en r ct; ce to the below named certificate holder but failure to
bligati~ ,n ,o1~ lia tDI Ih.,! of any kind upon the company.
S OF CERTIFICATE HOLDE;
city of Boynton Beach, F~orida
120 North Second Ave~ riVE
goynton Beach, Florida
SPACELINK OF FLORIDA,
SECURZTiES A~D EXCHANGE COi,~IssION
~ashington, D.C- 20549
FORM ~O-K
Annual Report pursuant to SectiOn 13 or 15(d) of
~he Securities Exchange Act of 1934
fiscal year ended ~ Commission file number ~
For the ~
SPAC~
(Exac~ name of registrant as specified in its charter)
etlon
or organization)
~loyer
zip c
pal executive offices
's telephone number, including ,area code (303) 773-3053
registered pursuant to Section 12(b)-of the Act: None
es registered pursuant to Section 12(g) of the Act:
~itle of Class
check mark whether the registrant has filed all reports required
Section 13 or 15 (d) of the Securities Exchange Act of 1934
ceding 12 months (or such shorter period that the registrant was
such reports), and (2) has been subject to such filing
the past 90 dayS-
NO~
YES X_ _
market value of the voting stock of the registrant held'bY non-
of the registrant as of August 25, 1983 was approximately
based upon the average of the bid and asked prices of the
Class A Common Stock, $~01 par value, as cf the close of business
1983, as reported by NASDAQ- '
~r of shares outstanding of each of the registrant s classes of
as of August 25, 1983:
Class.A Common Stock, $.01 par Malue: 9,362,479-
ClaSS B Common Stock, $.01 par value: 265'000
DocUMENTS iNCORPORATED BY REFERENCE
DocUMENTS z~ ....... ~ -ulation 14A
~ _ ~.~= ~r~uant to meg
Definitive ~ ~ - ~ ~t of 19.34 ~n u ~ - ...... rated by reference
e Securities ~xon~n~'~i~strant, which ~s mnc~
ng~of Shareholders o~ ~= ~ ~
of this
Page i of ~pages
Item 1. Business
,Development of Operations
PART I
Spacelink, Ltd. ("Spacelink") is a Colorado corporation formed in March
980 originally to engage in the construction and management of self-contained
satellite receiving and connected cable distribution ("SMATV") systems, which
provide cable teDevision service to a target market of large residential and
bommercia! complexes. Subsequently, Spacelink has expanded/into ownership and
)perations of conventional cable television'.("CATV") systems serving small
;owns and rural areas. Spacelink has two wholly-owned subsidiaries, Spacelink
If Florida, Ltd. ("SFL") and Tri-Comm Systems, Inc'. (,TCS"). Spacelink and
ubsidiaries (The "Company") engage in their bus, ness activities through the
uisition a~d upgrading of existing cable distribution systems, the
~n of new systems, the acquisition of contracts to manage or
therwise provide services through cable distribution systems owned by third
partieS and the acquisition of contracts for the construction and maintenance
~f systems, on behalf of third parties.
The Company's SMATV target market includes large multi-unit dwelling
omplexes such as planned unit. developments, condominium complexes, and large
ommercial complexes such as hotels, motels and hospitals. The CATV target
arket includes small towns and,rural areas. Presently, the Company's
mphasis is on ownership and operation of SMATV and CATV systems rather than
onstruction and management activities for third parties.
The Company has grown significantly in fiscal year 1983. Prior to the
ear ended May 31, 1983, the Company had exclusive cable distribution service
Ereements with the owners of multiple unit complexes for four SMATV systems
West Palm Beach County, Florida, and managed three other SMA~V systems in
~e same area. As of May 31, 1983, the Company owned and operated six such
zstems providing basic "off-air" television service and premium satellite
~levision service under various exclusive cable distribution service
)ntracts. The Company has exclusive service agreements for the sale of
~emium satellite television service, and system maintenance agreements with
~e'owners of two additional SMATV systems in Florida (inclUding a
)nstruction agreement for one of these systems), and an additional Contract
construct a CATV system for a developer in Texas. The Company also owns
~ree CATV systems in Colorado. See Item 2 below entitled "Properties" for a
~rther description of the Company's systems.
A~ of December 1, 1982, Spacelink acquired all of the outstanding common
~ock of TCS from Jones International, Ltd. ("International") in exchange for
414,319 shares of SPacelink's Class A Common Stock, par value $.01 per
~are. See "Financing" for additional information with respect to
.~e~na~ional.~TCS owns~three~SMATym systemsinWestPalm-Beach County,
orida. The systems presently pass approximately 2,300 units and provide
levision and premium satellite services to approximately 2,200 subscribers.
en completely developed these systems are expected to offer service to
approximately 4,300 units. Prior to the acquisition of TCS, Spacelink had a
management contract with TCS for these three systems. This contract was
terminated upon Spacellnk s acqu!sztzon of TCS. The TCS systems provided
approximately $109,OOO in revenues in fiscal year 1983 while operating at a
net loss of approximately $196,000 (unauditedl. See Note 3 of Notes to
Consolidated Financial Statements.
As of March 1, 1983, .SPacelink acquired three CATV syst&ms from Colorado
Intercable, Inc., ~ subsidiary of International, for 2,713,160 shares'of
Spacellnk s ClassjA Common Stock. The systems are located in Colorado, and
ffer television services and optional premium services ~o approximately 1,900
omes. These systems provided approximately $207,000 in revenues and operated
~t a net loss of~pproximately $59,000 ('unaudited) in fiscal year 1983.
The effect of the above-described acquieitions and other developments on
the number of subscribers in the systems which the Company'owns and opsrates
~s summarized in the following table:
Basic Service
Subscribers
Expanded
Basic Service
Subscribers
Premium Service
Subscribers
1982 107 -- 145
1983 3,364 755 872
Net Increase 3,257 755 727
The Company has agreements for the construction of one SMATV system and
ne CATV system for third parties. One of the systems will serve a 500 unit
ondominium complex near Boca Raton, Florida. In fiscal year 1982, the
ompany earned approximately $81,OOO of the total contract price of $125,OOO.
onstruction work on the cable distribution system is being done
imultaneously with condominium construction; however, no add%tional units
ere constructed in fiscal year 1983 and no additional revenues were earned.
he Company will Offer premium satellite programming to the residents of this
omplex as individual condominium units are sold.
In March 1983, the Company entered into an agreement with a developer
n~ar Odessa, 'Texas, for the construction of a CATV system designed to serve
approximately 4,000 units over a ten year build-out period. During fiscal
y~ar 1983, the Company realized approximately $13,0OO of construction revenue
o~ related construction costs of approximately $10,OOO. The Company is in the
process of negotiating with the developer for a contract to maintain and
m~nage the system once completed, for a management fee equal to 10% of the
g~$~-~reve~ues~fr~m~the~system.~A~l~c~sts~f~peratiag~nd~maintaining the
s~stem will be paid by the owner.
The~Company entered into agreements to construct, own and operate three
SMATV systems in Florida subsequent to May 31, 1983. These systems are in the
initial stages of construction, and will serve a~proximately 2,500 planned
units when completed. The estimated build-out period for these systems is
four years. In addition, in August 1983, the Company signed a contract to
acquire all the outstanding capital stock of a California corporation which
owns and operates a CATV system in California, serving approximately 1,5OO
subscribers. See Note 8 of Notes to Consolidated Financial Statements for
furtherinformation regarding these transactions.
Financing
/-
In August 1981, the Company completed a $3,000,000 public offering of
1,500,0OO units, each unit consisting of two shares of Class A Common Stock
and one warrant to purchase one share of Class A Common Stock. The expiration
date of the Warrants, which was originally August 11, 1982, has been extended
to February 11, 1984. ..
The-net proceeds to the Company from this offering were approximately
$2,553,000. The proceeds were used to acquire and build the systems described
previously, as well as for operations. Additional stock was issued in 1983 to
acquire additional systems as previously described.
As of May 31, t983, the Company's outstanding capital stock consists of
-- ~9,536,506_shares~of Class A-Common-Stock and 265,0OO shares of Class B Common
Stock. However, because of certain adjustments to be made to the number of
shares issued in connection with acquiSitions by Spacelink during fiscal 1983,
the amount of Class A Common Stock deemed issued for ail purposes hereof is
9,362,479..shares International,~aCblorado.corporation_whose msole
shareholder is Glenn R. Jones, Chairman of the Board of Directors and Chief
Executive Officer of the Company, owns all of the outstanding shares of,Class
~ Common Stock, entitling it to elect 75% of the members of the Company s
oard of Directors. International and Mr. Glenn R. Jones, individually, · ~
~eneficially, or as'trustee for members of his family, own 5,838,981, or 62 4~
Of the Company's issued and outstandin~ Class A Common Stock.
None of the Company's systems are encumbered by debt.
Management
During fiscal 1983, several~members of the executive management team were
replaced and several management positions were temporarily eliminated. This
~tep was taken in an effort to control administrative costs, and to develop a
anagement team which could generate the growth necessary to sustain the
ompany. See Part III, Item 10 for a discussion of~the Directors and
Executive Officers of the Compan~
The Industry
The Company operates in two separate, yet related, industries. The CATV
industry provides television reception and other services to residents of
towns or other incorporated areas. A CATV system will generally utilize a
tower antenna or an earth station to receive local television or satellite
signals, and distribute these signals through a coaxial cable network to a
subscriber's television set for a monthly fee. Because the system utilizes
coaxial cable, it has the ability to distribute an array of~signals with very
little interferenpe.
CATV systems were originally developed to serve outlying areas where
conventional television reception was difficult. The development of a variety
of programming services, however, made CATV systems attractDve to urban areas
where these services were not available from' local broadcasting stations. A
CATV system normally utilizes the public rights-of-way and requires operating
permits or franchises from the local governing authority.
The SMATV industry in which the Company operates has only recently
teveloped. It has emerged by application of technology from the cable
~elevision and related industries to individually owned and operated master
intenna television ("MATV") systems. An MATV system is designed to provide
~elevision reception to residents of multi-unit complexes, where individual
~ntennas either are not feasible or are restricted by aesthetic or other
:ovenants of a particular development. The Company owns and operates SMATV
~ystems, which~typically~integrate satellite receiving and distribution
~quipment with upgraded MATV system components in. order to increase the
~fficiency of the system, as well as the amount and quality of programming.
Subscriber Fees
In both SMATV and CATV systems, the subscriber normally will pay for the
connection or hook-up of his television set to the system and also pay a
~onthly charge for service. The Company s one-time connection fees generally
ange from $15.OO to.$35.00 per service outlet; however, in certain situations
~he Company may waive the fee. The monthly charge for service is broken down
between a basic programming package at one rate, and additional programming
from satellites (such as commercial-free movies) at an additional charge.
In the Company's CATV systems, the programming and rates are usually
established and regulated by negotiation with the local governing authority.
~ll service is optional.
In the Company's SMATV systems, monthly service fees and charges are
usually established for each system by negotiation with the entity which owns
or controls the complex. In residential complexes, basic service rates vary
significantly from project to project. Service may be optional or automatic,
depending upon the contract. As of May 31, 1983, there were approximately
~2,~DO~.subsc~ribe~sof~Company~-owned or.~ope~rated systems ~receiving basic service
on an automatic basis to all units within a complex. In these, instances, the
owner is responsible for collection of charges which are part of the
subscriber's rent or association fees, and the Company receives a single
periodic amount from the owner. '
Expanded ~basic and premium or "pay TV" services are also available in
nine of the Company's eleven owned or managed systems on an optional basis.
The Company presently serves approximately 1,600 expanded basic and premium
pay subscribers, at rates which vary with each service offered.
.Competition and 0~her Factors
Company systems compete with the direct reception of television
broadcasts and ether signals, as well as with SMATV and CATV systems owned by
others and, to varying degrees, with other communications and entertainment
media.
In most cases, SMATV systems are developed and operated under a contract
with the owner or developer of a complex or the. governing body, such as a
homeowners' association, rather than through a license or franchise granted bT
a public authority, as is the case with CATV systems. TypiCally, CATV systems
are required to offer uniform services throughout an entire franchise area,
whereas SMATV systems are not presently restricted in this manner, and are
able to offer customized services to specific locations within the same
geographic region. Conversely, CATV systems can typically provide a greater
programming selection than SMATV systems.
There are numerous companies providing various types of SMATV and CATV
services, including construction, maintenance and~management services. To the
extent that the Company competes with companies engaged in the cable
.......... telev-ision business.~-it-encounters competitionTrom many. concerns, many of
whom have far greater resources, technical capacity and experience than the
~Company. Other firms may be able .to offer services to subscribers which are
not available through a Company system or which may not be economically
feasible for the Company system to offer.
Recent publications in the SMATV industry have described situations where
SMATV companies have encountered difficulty in obtaining satellite programming
from certain suppliers, primarily in areas where an existing CATV op6rator has
been awarded a franchise. The issue regarding the program supplier's right to
refuse sale of.programming to SMATVoperators is currently being litigated
among parties not related to the Company, and the matter remains unresolved.
The Company is not certain of the extent to which it may be impeded in its
effort to obtain certain satellite programming by reason of the foregoing. To
the extent that it is so impeded, however, the business of the Company could
be adversely affected.
Marketing
~'~The~'~C°mp-aaY~'~has developed~a~-m'arketing~program, which~includesadvertising
in national and regional publications, holding exhibits at industry
con.ventions and trade shows, and making direct sales calls to builders,
developers, condominium associations, hospital administrators~and apartment,
hotel and motel~owners.
Initially, the Company's marketing emphasis was directed primarily toward
construction and operation of SMATV systems to service multi-unit housing
complexes in the planning or early construction phases. Because of the~
adversity facing new construction-in the housing industry in the past several
years, the Company has expanded its marketing program to place more emphasis
on existing multi-family units, including rental apartments, condominiums,
mobile home parks, and small towns and incorporated developments. Although
existing complexes have different marketing and construction requirements,
contracts acquired to service such .units will result in immed±ate revenues
from an existinN subscriber base not dependent on the rate of new
construction, and will still allow the Company's subscriber base to grow as
new units are added.
To facilitate this and other marketing objectives, in July 1982, the
Company moved its.principal office from Denver, Colorado to Newport Beach,
California, to provide the visibility that was considered essential for
penetration of the market in California. The Company could not obtain the
necessary penetration into this market; consequently, the principal office was
relocated to Denver in March, 1983. Costs associated with the California
operation and subsequent shutdown were substantial. (See Management's
Discussion and Analysis of Financial Condition and Results of Operations.)
Regulation
The Federal Communications Commission ("FCC") regulates certain aspects
of CATV systems. Three of the Company's systems are CATV systems subject to
FCC regulation. In addition, rates and other matters are regulated by local
authorities._-~TheCompany~-has~had~-no:-material problems-complying with existing
regulations.
Unlike conventional CATV systems, which ordinarily utilize the public
rights-of-way, most of the Company's systems are SMATV systems, which provide
services to multi-unit dwellings on private property. The FCC does not
regulate SMATV systems (even though it has the authority to do so) and the
Company's SMATV systems are generally not subject to state or local
regulations. In the future, it is possible that the FCC or state and local
authorities may find it appropriate to assert jurisdiction over SMATV systems.
To the extent that any such regulation would be imposed, the SMATV business of
the Company could be adversely affected.
Other Matters
Many of the Company's systems are in Florida. These systems are subject,
in some degree, to seasonal trends. The Company's business does not depend to
any material extent on the availability of raw materials and the Company
carries very little inventory. The Company has not expended any material sums
..... on'research ~r~deve~opment,~and to'~the~best-of'~its-knowledge, is.in-compliance
with Federal, state and local provisions relating to the protection of the
environment.
Item 2. Properties
The headquarters of the Company are located in Engle~ood, Colorado in a
portion of an office building owned by Jones Properties, Inc. ("JPI"), a
wholly-owned subsidiary of International and an affiliate of the Company.
International leases the office building from JPI and, in turn, allocates
occupancy costs to the Company based on square footage occupied. Charges to
theCompany are madeat JPt's'coSt. 'The Co~pany~also~rents~property~in_~daho
Springs, Colorado, and West Palm Beach, Florida, as sales and service
locations.~
Spacelink owns cable distributionsystems directly and~throughSFL and
TCS, its wholty-~wned subsidiaries. For its own account, Spacelink leases and
owns various equipment used in the CATV systems serving Empire, Georgetown and
Idaho Springs, Colorado. These systems senye ~pproximately 1,100 basic
service subscribers, at rates ranging from $5.50 to $11.50 per month, 600
expanded basic service subscribers at rates ranging from $2.50 to $6.00 per
month and 600 premium pay service subscribers, ~t a rate of $9.50 per month.
Service is. offered, subject in certain respects to the terms of various
pe~rmits or franchises-which expire between 1988 and 1997. The systems include
approximately 24 miles of cable which is in good condition, and pass
approximately 1900 homes.
SFL leases or owns various equipment used in several SMATV systems
serving three private developments in the West Palm Beach, Florida area.
These systems offer basic service to approximately 100 basic subscribers at
~ates ranging from $7.00 to $7.95 per month, and approximately 100 premium pay
service subscribers a~ rates ranging from $9.45 to $12.50 per month. These
services are offered under various exclusive service agreements which expire
between 1985 and 2002. The systems include approximately 14 miles of cable,
which is in the process of being upgraded, and pass approximately 1,500 units.
~Total planned units for the developments which SFL-serves is approximately
3,200. No schedule related to the additional development has been set and
construction during fiscal year 1983 has been minimal.
TCS owns various equipment used in SMATV systems serving three private
developments in the West Palm Beach, Florida area. These systems offer basic
service to approximately 2,200 basic service subscribers at rates ranging from
$4.10 to $7.00 per month, 200 expanded basic subscribers at $3.00 per month
and 200 premium pay service subscribers at rates ranging from $9-95 to $10.00
permonth~ .... Thes~rv±ces'are~Offer~d under ~x~lusive~service ~gre'ements~hich
expire between 1988 an~ 1999. The systems include approximately 16 miles of
Cable, some of which is in the process of being upgraded, and pass
approximately 2,300 units. Total planned units in the developments which TCS
~serves~is' appr°ximat~ly'4~3OO~ schedule~to becompl~ted~overapproximately
ten years. Twenty-five units were constructed du~ing fiscal 1983.
Executive 0fficers of Registrant
In addition to those Officer~ of the Company who also act as directors,
the Company has the following executive officers:
Name A~e Position with the Company
Peter L. Edwards 30 Secretary
Mr. Edwards has been secretary and Staff legal counsel of the Company
since May 1981. He is also an officer or director and staff legal counsel of
certain of International's affiliates other than the Company. He was an
associate with the law firm of Coudert Bro£hers, New York~ City, from 197'8 to
May 1981, and with the law firm Dewey, Ballantine, Bushby~ Palmer & Wood, New
York City, from 1977 to 1978. He has degrees in law and business
administration from the University of Michigan..
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.
Market for the Registrant's Common Stock and
Relat'ed Security Holder Matters
The Class A Common Stock, par value $~01 per share, of .the Company is
traded in the over-the-counter market and is authorized for quotation on the
automated quotations system operated by the National Association of Securities
Dealers, Inc. ("~ASDAQ'), under the symbol SPLKA.
The Company.'s units (each unit consisting of two shares of Class A Common
Stock and one warrant to purchase a share of class A Common Stock, expiring
February 11, 1984) are also traded on the NASDAQ system under the symbol
SPLKU. .. '
The following table shows the high and low bid prices as reported on
NASDAQ for the fiscal quarters commencing with She initial trading of the
Company's Class A Common Stock. There is no established market for the
C '
ompany s Class B Common Stock.
Fiscal 1982
Class A Common Stock (SPLKA)
LOW BID HIGH BID
First Quarter N/A N/A
Second Quarter 3/8 3/4
Third Quarter 7/16 11/16
Fourth~Quar~er 1/4 7/16
Fiscal 1 983
First Quarter 3/16 5/16
Second Quarter 3/16 1/4
Third Quarter 3/16 1/2
Fourth Quarter 3/16 11/16
At May ~31, 1983, the Class A Common Stock of the Company was held by
approximately 500 shareholders of record. All of the Company's Class B Common
Stock, which elects 75% of the Board of Directors, is held by International,
whose sole shareholder is Glenn R. Jones, Chief Executive Officer and Chairman
of the Board of Directors of the Company. The Company has never paid a
dividend with respect to its.shares of Class A Common Stock or Class B Common
Stock. The policy of the Company's Board of Directors is to retain earnings
to provide funds for the operation and expansion of its business, and the
Board of Directors presently has no intention to pay caSh dividends in the
foreseeable future. Future dividends, if any, will be determined by the Board
°~Direc~°rs--inr~'ightof--theci~cums~ances ~hen existing.
Item 6. Selected Financial Data
The following table sets forth selected financial data regarding the
Company's financial position and operating results. This data should be read
in conjunction with the Company's consolidated finandial statements and the
notes,thereto and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" appearing in Item 7.
Income Statement Data
Total Revenues
Net Loss
Net Loss per Common
Share
Weighted Average
Number of Common Shares
Outstanding
Selected Financial Data*
1983 1982 1981
$ 363,633 $ 404,~9~5 $ 231,634
$(1,077,746) $ (562,184) $ (95,619)
$ (.11) $ (,06) $ (.01)
9,627,479 9,O43,917 6,471,315
Balance Sheet Data
Total Assets $ 2,295,985 $3,127,599 $ 950,336
To. tal. Shareholders.' Investment. $ 1,850,664 $2,676,184 $ ~667,110
'*The above information reflects the effect of the acquisitions described in
Item 1, as if they had occurred as of the earliest date reported.
The Company had very limited activity in the period from inception.to May
31, 1980.
Item 7.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Introduction- On August 11, 1981, Spacelink completed a $3,000,000 public
offering of 1,5OO,OOO units, each unit consisting of two shares of Class A
Common Stock and one warrant to purchase one share of Class A Common Stock.
The net proceeds to the Company from this offering were approximately
$2,553,OOO, of which approximately $1OO,0OO was used to pay existing
liabilities.
Subsequent to the public offering, the Company used a portion of the
.proceeds .£or hiring-additiona'l-managemen~ !evet-personnel in .the areas of
marketing, finance and operations as well as for supplying offices in Newport
Beach, California and West Palm Beach, Florida. The Newport Beach office was
subsequently closed. Additional funds from the public offering were used to
extend and upgrade systems acquired when Spacelink exchanged shares of Class A
Common Stock for all of the shares of Spacelink of Flori'da, Ltd. in May 1982.
Additional shares of Class A Common Stock were exchanged for the outstanding
shares of Tri-Comm Systems, Inc., in December ~982, and for three conventional
cable television systems in March 1983. The accompanying financial statements
and the matters discussed below reflect the results of all acquisitions on a
retroactive basis (see'Note 3 of Notes to the Consolidated~Financial
Statements).
;
Liquidity and Capital Resources - During fiscal 1983, the Company used much of
the proceeds from the public offering in operations. As of May 31, 1983,
approximately $530,000 remained invested in cash and short term investments.
Management anticipates these funds will be adequate to fuMd existing
operations of the Company through fiscal year 1984; however, additional'
sources of capital will be necessary to finance the acquisition and
construction of additional cable distribution systems.
The acquisition, development and expansion of cable distribution systems
is highly Capital intensive. In recognition of this fact, the Company intends
to offer interests in private limited partnerships to finance the acquisition
and construction of SMATV systems. The Company would be the general partner
and would manage these systems for the partnerships. The Company, in its
capacity as manager, would earn a management fee from these systems and would
allocate certain general and administrative costs to the limited partnerships.
The Company also intends to continue its efforts to acquire, develop and
expand cable distribution systems for its own account. To finance this
development,~the Comp.any~may. sell~one of--its.exis~ing~systems. ~Management
anticipates the sale would provide funds for the construction and development
-of several additional systems.
None of the Company's existing systems is encumbered by debt, and the
Company anticipates that funds could be borrowed on a secured basis in the
event they are necessary. No revolving line of credit or other debt
arrangements have been made as of May 31, 1983; however, subsequent to
yearend, the Company signed a contract to acquire a CATV system in California,
and will incur approximately $1,000,000 of debt in~ connection with this
acquisition. See Note 8 of Notes to Consolidated Financial Statements for
~dditional information with respect to this transaction.
Results of Operations - Revenues decreased while expenses increased in fiscal
year 1983 over 1982,~-resulting in a net loss per share of $.ll in ~983
compared to $.06 in1982. Total revenues declined in fiscal year 1983 due to
a decrease in construction fees earned, as residential construction in one of
the developments for which the Company has a construction contract was halted.
Service revenues increased in fiscal year 1983 over 1982, due to the expansion
of several of the Company's systems in Florida and the addition of premium pay
services in these systems. Subscriber rates generally remained the same
during fiscal.years 1983and 1982.
Revenues are expected to increase in fiscal year 1984 due to the addition
or'new subscribers in the Company's existing systems and new systems which are
under construction. Premium pay services are being added to two systems which
did not previously have these services available and rate increases are
scheduled on one of the Company's larger systems in January 1984. In May
1983, the Company began construction on a system to be owned by a developer in
Texas, which should increase construction revenues in fiscal year 1984. The
Company anticipates that management fees ear.ned in the management of systems
for limited partnerships whic. h the Company intends to form, may also increase
~revenues~in~fiscat year~1984.
Interest ineome was less in fiscal year 1983 compared to 1982, as amounts
available for i~ves~ment in short-'term securities decreased during the year.
Operating expenses increased in fiscal year 1983 compared to 1982. These
costs primarily consist of salaries, occupancy costs, marketing expenses,
travel expenses, and depreciation. Included in fiscal 1983 operating costs is
approximately $192,000 associated with op~ing a new office in'Newport Beach,
California, and subsequently closing that office when marketing and '
acquisition efforts failed to produce expected levels of new business.
Similar costs are not expected to be incurred ~n the future. The Company has
taken several steps to reduce administrative costs, including reduction in
levels of staffing and occupancy costs.
Inflation - The effects of inflation have not significantly affected the
Company's business to date. Further, although the possible effects of future
inflation cannot be determined with certainty, the Company believes that such
effects can generally be offset through increases in subscriber'levels and
rates, and increases in prices charged for the sate of cable distribution
systems to third parties.
Item 8. Financial Statements and Supplementary Data
Index to Financial Statments-
Page
Report of Independent Public Accountants
14
Consolidated Balance Sheets-- May 31, 1983 and 1982
15
Consolidated Statements of Operations--
For the Years Ended May 31, 1983, 1982 and 1981
17
Consolidated Statements of Shareholders' Investment-~-'-
For the Years Ended May 31, 1983, 1982 and 1981
18
-Consol-idated~S%at~ements.~of-C~hanges~in FinancialPosition--
For the Years Ended May 31, 1983, 1982 and 1981
2O
Notes to Consolidated Financial Statements
21
A:RTHUI~ A;N-DERSEN & CO.
DENVl~R, C 0LOI~A_t) 0
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Spacelink~ Ltd.:
We have examined the consolidated balance sheets of SPACELINK
\
LTD. (a Colorado corporation and subsidiary of'Jones International,
Ltd.) and subsidoiaries as of May 31, ~1983 and 1982, and the related
consolidated statements of income, shareholders' investment and
changes in financial position for each of the three years in the
Period then ended. Our examinations were made in accordance with
generally accepted auditing standards and, accordingly, included such
tests ~f the accounting records and such ~ot~h'er-auditing procedures as
we considered necessary in the circumstances.
In our opinion, the financial statements referred to above
present fairly th~ financial position of Spacelink, Ltd. and sub-
sidiaries as of May 31, !983 and !982, and the results of their
operations and the changes in their financial position for each of the
three years in the period ended May 31, 1983, in conformity with
generally accepted accounting principles applied on a consistent
basis.
ARTHUR ANDERSEN & CO.
Denver, Colorado,
August !5, 1.983.
SPACELIN~, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MAY 3~, 1983 AND 1982
(Notes 1 and 3)
?SSETS
1983
1982
CASH AND T~tPORARY CASHINVESTMENTS
ACCOUNTS RECEIVABLE:
Affiliated entities (Note 3)
Trade
Income tax benefit receivable
from parent (Notes 1 and 5)
INVESTMENT IN CABLE DISTRIBUTION SYSTEMS:
Property and equipment, net of
accumulated depreciation of $366,426
and $173,699 (Notes'l and 4)
Franchis~ costsand~otherdntangible
assets, net of accumulated amortization
of $55,279 and $45,315
Cost in excess of carrying value of net
assets purchased,-ne~o~racoumutated
amortization of $18,289 and $11,973
OTHER ASSETS
Total Assets
$ 531,679
34,200
345,000
1,203,366
7I, 391
101,711
8,638
$2,295,985
,851,364
21,577
70,997
981,074
81,355
108,O27
'13,205
$3,127,599
The accompanying notes to consolidated financial
statements are an integral part of these balance sheets.
SPACELINK, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MAY 3~, 1983 AND 1982
(Notes 1 and 3)
LIABILITIES AND SHAREHOLDERS' INVESTMENT
ACCOUNTS PAYABLE:
Affiliated entities (Note 3)
Trade
ACCRUED LIABILITIES
CUSTOMER DEPOSITS
OBLIGATIONS UNDER CAPITAL LEASES (Note 6)
Total Liabilities
1983
253,940
71,696
56,324
29,193
34,168
445,321
1982
$ 166,763
173,531.
40,971
17,902
52,248
451,415
COMMITMENTS (Note 6)
SHAREHOLDERS" INVESTMENT (Notes 1, 2, 3 and 7):
Class A Common Stock, $.0t par
value, 20,000,000 shares
-~uthorized; 9,362,'479 shares
outstanding
Class B Common Stock, $.O1 par
value, 500,000 shares
authorized; 265,000 shares
outstanding
Additional paid-in-capital
Accumulated deficit
Total Shareholders' Investment
Total Liabilities and
Shareholders' Investment
93,625
2,650
3,493,405
(1,739,016)
1,850,664
$2,295,985
93,625
2,650
3,241,179
(661,270)
2,676,184
$3,127,599
The accompanying notes to consolidated financial
statements are an integral part of these balance sheets;
SPACELINK, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF 0PERATIONS-
FOR THE YEARS ENDED' MAY 31, 1983, 1982 AND 1981
(Notes 1 and 3)
983 1982 1981
REVENUES ~
OPERATING, GENERAL AND
ADMINISTRATIVE EXPENSES
OPERATING LOSS
OTHER INCOME(EXPENSE):
Interest income
Interest expense, net of interest
capitalized of $2,026 in 1981
$ 363,633
1,855,719''
(1,492,O86)
404,965
1,193,780
(788,815)
231,634
317,3~8
(85,734)
LOSS~BEFORE~INCOME TAXES
98,505 231,868 4,534
(29,165) (15,480) (4,176)
69,340 21 6,388
INCOME TAX PROVISION (BENEFIT)
(Notes 1 and 5)
NET LOSS
NET LOSS PER COMMON SHARE
- (1,422,746)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
(572~427)
(345,OOO) (10,243)
$(1,O77,746) $ (562,184)
$ (.11) $ (.o6)
9,627,479 9,043,917
358
(85,376)
10,243
(95,619)
(.o~)
6,471,315
The accompanying notes to consolidated financial
.... statements are~an~integral~part of these.statemcnts.
SPACELINK, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
FOR THE YEARSmENDED MAY 31, 1983, 1982 AND 1981
(Notes 1, 2, and 3)
BALANCE, May 31, I980
Issuance of Class B
Common Stock to
International
Issuance of Class A
Common Stock
Stock issued or deemed
issued in connection
~with acquisition
Net loss
BALANCE;~ May 31,~1981,
as previously
reported
Stock issued or deemed
" issued in ,connection
with aquisitions
Net loss of acquired
systems
BALANCE, May 31, 1981,
as restated
Class A
Common Stock
(Par~Value $.01 )
Class B
Common Stock
(Par Value $.O1)
Additional
Paid-in
~Capital
Shares Amount Shares Amount
- $ - - $ - $~ _
1,735,000 17,350
265,000 2,650 97,350
Accumulate
Earnings
(Deficit.)
500~000 5,000 - - (4,000) -
..... (26,603)
2,235,000 22,350 265,060 2,650 93,350 (26,603)
4,127,479 41,275 - - 606,571
6,362,479 $ 63,625
265,000 $ 2,650 $699,921
(3,46?)
(69,016)
$ (99,086)
The accompanYing notes to consolidated financial
statements are an integral part of these statements.
SPACELINK, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
FOR THE YEARS ENDED ~MAY 31, 1983, 1982 AND 1981
(Notes 1, 2 and 3)
BALANCE, May 31, 1981,
as restated
Class A
Co.mmon Stock
~(Par Value $.01 )
Shares Amount
6,362,479 $ 63,625
Class B Additional Accumulat~
Common Stock Paid-in Earnings
(Par Value $,01) Capital (Defic~t'~
Shares Amount
265,000 $ 2,650 $
699,921 $ (99,086)
Issuance of Class A
Common Stock
Issuance of warrants
to purchase 300,000
shares of Class A
Common Stock
Additional capital
contribution from
parent of acquired
system
Net loss
BALANCE, May 31, 1982,
as restated
Additional capital
contribution from
parent of acquired
system
Net loss
BALANCE, May 31, 1983
3,OO0,000 30,000
9,362,479 93,625 265,000
9,362,479 $ 93,625 265,OO0
- 2,520,000'
3,000
18,258 -
- (562,184)
2,650 3,241,179 (661,270)
252,226 -
- - (1,077,746)
2,650 $3,493,405 $(1,739,016)
The~-accompanying notes toconsol±datedfinancial
statements are an integral part of these statements.
SPACELINX, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTSOF CHANGES IN FINANCIAL POSITI0~N
FOR THE YEARS ENDED' MAY 31, 1983, 1982 AND 1981
(Notes 1 and 3)
/-
1983 1982 198~
SOURCES OF FUNDS':
Class B Common Stock issued to
Parent
Class A Common Stock issued
or deemed issued
Proceeds from bank borrowings
Increase (decrease) in accounts
payable
Increase in lease obligations
and other liabilities
Additional capital contribution from
parent of acquired system
Total sources of funds
(14,658)
8,564
252,226
246,132
$ - $ 100,O00
2,553,000 386,104
- 111,922
253,163 141,818
19,807 60,908
18,258 -
2,844,228 800,752
USES OF FUNDS:
Funds used in operations- Net loss
Less - Depreciation~ and amorti-
zation, which do not require
funds
Funds used in operations
Other uses-
..... ~urchase-o~-~property-and equipment
Increase in accounts recemvable
Increase (decrease) in other assets
Repayment of debt
?
Total uses of funds
INCREASE (DECREASE) IN CASH
AND TEMPORARY CASH INVESTMENTS
1,077,746 562,184 95,619
(209,007) (127,629) (73,185)
868,739 434,555 22,434
415,019 '462,945 5't4,356
286,626 38,739 110,765
(4,567) 8,410 102,536
IO4,781 -
1,565,817 1 ,O49,430. 750,091
$(1,319,685) $1,794,798 $ 50,661
The accompanying notes to consOlidated financial
statements are an integral part of these statements.
SPACELINK, LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, '1 983, 1982 AND 1981
(1) ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
0rganizgtion and Basis of Presentation-
Spacelink, Ltd. (the Company ), formerly Jones Spacelink, Ltd., was
incorporated on March 24, 1980, orginallyas a wholly-owned subsidiary
of Jones International, Ltd. ("International"). .In Apmil 1981, the
Company issued 1,735,000 shares of Class A Common' Stock, and in August
1981, the Company completed a public offering whereby 1,500,O00 units
were sold, each unit consisting of two.~hares of Class A Common Stock
and a warrant to purchase one share of Class A Common Stock. See Note
2 for additional information with respect to the Company's
capitalization.
During fiscal year 1982, the Company acquired all of the outstanding
common stock of Spacelink of Florida, Ltd. ("SFL"), formerly a wholly-
owned subsidiary of International and an affiliate of the Company, in
' k
.- .... exchange for~_5OO, OO0 shares~o£.~he~Companys_.ClassA~Common Stoc · In
fiscal year 1983, the Company acquired all af the outstanding common
stock of Tri-Comm Syst.ems, Inc.("TCS"), formerly a wholly-owned
subsidiary of International and an affiliate of the Company, for
1,41~,3!9 .shares. of-~he~ComPany's-Class~A-Common Stock. Also in
fiscall year 1983, the Company acquired the assets of and operating
rights for three conventional cable television systems from Colorado'
"CIC"
Intercab]e, Inc. ( ), a subsidiary of International, in exchange
for 2,713,160 shares of the Company's Class A Common Stock. See Note
3 for additional information with respect to these transactions.
These acquisitions have been accounted for as transfers between
entities under common control. Accordingly, the assets and
liabilities so transferred have been recorded by the Company at
historical cost, and the accompanying consolidated financial
statements have been retroactively restated to reflect these
acquisitions as of the earliest date reported.
Principles of Consolidation-
The accompanying consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries for all
periods presented after elimination of all significant intercompany
transactions.
Business-
The Company.is.in the business of owning, operating, constructing and
selling on a direct basis, self-contained cable distribution ("SMATV")
systems which provide services to densely populated multi-unit
residential and commercial developments , and conventional cable
television ("CATV") systems which provide service to towns and rural
areas.
The Company had very limited activity during the period from inception
through~May-31,-t980.~ The ability Of the Company to operate on a
significant basis was only achieved as a result of the public offering
in August' 1981. For a period of time after that, the Company was
primarily involVed in staffing, planning, and negotiating with
-~prospective customers. As Of'May 31, 1983, the.Company has acquired
service contracts or operating rights for eleven cable distribution
systems. /
Sources of revenues for fiscal years 1983, 1982 and 1981 were as
follows: ,.
Year Ended May 31
1 983 1 982 1981
Contract Construction $ 13,OOO $ 81,OOO $ -
Operating Systems 350,633 323,965 231,634
Total $ 363,233. $ 404,965 $231,634
Direct costs of contract construction were $10,OOO in 1983 and $51,O00
in 1982.
As discussed in Note 8, the Company has made commitments to purchase
and construct several cable distribution systems. Funding-for these
acquisitions, construction projects and any future operating losses
will be obtained from debt secured by the systems, the possible sale
of existing assets and advances from affiliated companies, if
necessary.
Summary of Significant ACcounting Policies-
~.~_~The~CompanyJ~as~adoptemdthe fol'towing~signi~fic-antaccounting~policies:
Revenue Recognition - Service fees, including amounts received
in advance for future services, are recorded as revenues in
the~period that the relatedservices are rendered. ~Hookup
fees are recognized as revenue to the extent of direct selling
costs (which include, among other things, commissions,
compensation that results in obtaining subscribers and certain
advertising costs) incurred in connection with the related
hookup. Revenues from contract construction of pre-sold cable
...... dist~ribution~systems are recognized on,the percentage-of-
completion basis, but only to the extent billings are assured
of being collected.
Capitalization Policy CosTs incurred to bring the Company's
cable distribution systems to a fully operational status are
capitalized as part of the cable transmission and distribution
systems. The cos~ of a subscriber connection made at a
location where a previous customer~ had been connected to the
system isexpensed.
Depreciation - Depreciation of property and equipment is
provided using the straight-line method primarily over the
following estimated useful lives:
Years
Earth receiving stations
Test equipment ..
Office furniture and equipment
Vehicles
Cable distribution systems
Leasehold improvements
lO to 15 5
7
3 to 5
Lesser of term
of service
agreement or
10 years
Lesser of term of
lease or 10
years
.... Income Taxes TheCompany joins~ith~International.in.filing
consolidated tax returns for periads during which it is a
member of International's controlled group; otherwise, the
Company files separate returns. The Company provides for
taxesas_though~itwere.-subject to~iaxes .on a separate-company
basis, without consideration for the effect of graduated tax
rates. In fiscal 1982 and 1981, income taxes were prQvided
based on income reported in the financial statements rather
than Taxable income. Effective June 1, 1982, the Company
entered into a tax allocation agreement with International and
International's other subsidiaries. For the year ended May
31, 1983 tax benefits were provided based on the Company's pro
rata contribution of taxable income (loss) to International's
consolidated taxable income (loss). Investment tax credits
are accounted for as a reduction of the provision for income
taxes in the~year in which 'the investment qualifies for the
credit. See Note 5 for additional income tax information.
Net Loss Per Share - Net loss per share is computed based on
the weighted average number of shares of Class A common StoCk
and Class B Common Stock outstanding or deemed outstanding
during the periods as restated for the effect of acquisitions
(Note 3)- Warrants to purchase shares of Class A Common Stock
and Class B Common Stock have not been included in the
computation as the effect would be antidilutive.
Investments - Temporary cash investments are carried at cost
plus accrued interest. The interest rate on the funds
invested at May 31, 1983 was 8% and the investment matures in
one day.
(2)
CAPITALIZATION:
The Company has authorized ~0,000,000 shares of Class A Common Stock
and 500,000 shares of Class B Common Stock as of May 31, 1983.
Neither class has a preference with respect to dividends or upon
liquidation. With respect to voting matters, holders of shares of
'Class B Common Stock have one vote for each share and holders of Class
A Common Stock have one-twentieth of a vote for each share. Class A
an~ Class B shares vote as separate classes on (a) any sale of ali or
substantially all of the assets of the Company, not in the ordinary
course of business, (b) any merger, consolidation or liquidation of
the Compa~y, (c) any amendment to the Articles of Incorporation, and
(d) any matter requiring a class vote under Colorad~ law. Any matter
submitted to class vote must be app=oved by both classes .of stock '
separately and by both classes voting together.
In April 1981,' the Company issued 1,735,Q00 shares of Class A Common
Stockat $.01 per share for cash to International and various officers
of the Company and other affiliates. In addition, the Board of
Directors authorized a warrant agreement which expires on June 17,
1986, betweenthe Company and International, whereby International
could purchase 235,000 shares of Class B Common Stock at a.price of
$1.50 per share. As. of May 31, 1983, no warrants had been exercised.
In ~ugus$~.981,~.the~.Company~completed a pnblic offeri~ng whereby
1,500,0OO units were sold, each unit consisting of .two shares of Class
A Common Stock and a waErant to purchase one share of Class A Common
Stock. The warrants are exercisable through February 11, 1984 (the
expir~tion~da~e, unless~extended) at $1.20 ~er. share In connection
with this offering, the Company also issued to its primary underwriter
for $.01 per warrant, warrants to purchase a minimum of 300,000 shares
of the Company's Class A Common Stock. These warrants became
exercisable on August 11, 1982, and are nontransferrable or assignable
except to and among officers of the underwriter. The underwriter's
warrants are exercisable through August 11, 1986, at $.82 per share.
As of May~31, 1983 these warrants have not been exercised. The
proceeds of $3,000 from the sale of these warrants have been credited
to additional paid-in capital.
As~described in Notes I and 3, the Company issued shares of-Class'A
Common Stock to International in 1982, in exchange for all of the
shares of Spacelink of Florida, Ltd., and in 1983, in exchange for all
of the shares of Tri-Comm Systems, Inc. The Company issued additional
shares ofUlass A Common Stock in 1983, to CIC, a subsidiary of
International, for three CATV systems in Colorado. CIC subsequently
transferred these shares to International. As a result of these
shares, International and Glenn R. Jones, the sole shareholder of
International and the Chief Executive Officer and Chairman of the
Board of Directors of the Company, control 5,838,981 or 62.4%, of the
Company's outstandingClass A~Common Stock.
(3)
TRANSACTIONS WITH RELATED PARTiES~:
International is wholly-owned~ by Glenn R. Jones, Chairman of the Board
and Chief Executive Officer of the Company. International controls
various subsidiaries, including Data Transmission, Inc. ("DTI"), Jones
Intercable, Inc. ( JIC ), ColoraDo Intercable, Inc. ( CIC ) and
Calstar Communications, Inc. ( Calstar ). Certain members of the
..... mana~gement ~of~ the-Company 'are ~AtSo officers or direCtors-~of ~'these 'or
other aff,iliated entities. Certain expenses and capital costs are
paid by a~filiated companies on behalf of the Company and by the
Company/for affiliated companies!, and allocated based on actual time
spent -or- specific ·identification.
Prior to August 1981, International provided office facilities to the
Company at no charge. Subsequently, the Company subleased these'
facilities from International on. essentially the Same terms as
International's underlying leaseiwith an unaffiliated third party.
Subsequent to May 31, 1983, an a~filiate purchased the building which
the,Company occupies, and the Company's lease with International was
terminated. The affiliate will allocate the cost of the building to
.the Company and~other tenants based on square footage occupied.
The Company leases various cable, distribution equipment and vehicles
from DTI pursuant to various lea~e agreements expiring between June
1984, and February 1986. The to~al cost of assets leased by the
Company under these agreements o.f $82,480 and $70,380 are included in
...... property and equipment in the accompanying financial statements in
fiscal 1983 and 1982, vespectivelly. See Note 6 for information with
respect to future minimum lease ~ayments under these agreements.
During fiscal year 1982, the ComPany purchased two transportable earth
stations from Calstar at a cost iof approximately $31,000. The Company
believes that its cost in purchasing the earth stations was less than
the cost to Calstar. The Company believes that the prices paid for
this equipment were at least as favorable as prices which could have
been obtained from unaffiliated third parties for comparable
equipment.
In fiscal 1983, the Company purchased a computer system and related
software from an affiliate, Jones Futurex, 'Inc., for approximately
$2G,000 ..... Th~Oompany-b~!ieves~t~at the~amount~paid~for~this'equipment
is at least as favorable as the amount which would have been charged
by unaffiliated third parties foir comparable equipment.
Included~in~operat&ngexpenses~areapproximately $87',289, $63,622 and
$24,559 of expenses allocated from affiliates of the Company, for
computer and administrative serwic~s, for 1983, 1982 and 1981,
respectively.
A summary of .receivables from a~d payables to affiliated entities is
as follows:
May 31
Receivable From-
1983 1982
DTI $ - $ 21,577
International 345,000 -
To~al $ 345,000 $ 21,577
Payable to~
DTI $ 2,867 $
International 241,420" 166,763
CIC 9,653 -
Total $ 253,940 " $ 166,763
All affiliate accounts bear interest at the rate of 1% per month on
average month-end outstanding balances. Net accrued interest expense
on intercompany balances was $19,O76 in 1983. Interest income on
intercompany balances was minimal in 1982 and $4,534 in 1981.
As described'in Note 1, effective May 31, 1982, the Company purchased
£rom-,.Inte~nationat~atl~.o~the. outstanding ~ommons~ock, of SFL in
exchange for 500,000 shares of the Company'a Class A Common Stock.
SFL owns and operates ,SMATV systems in Florida. The exchange price
for this acquisition was based on approximately 90% of the appraised
.... walue~-of:SFL's~operating~systems~adjuStedfor~thehistorical.carrying
value of its other assets and liabilities. In addition, for purposes
of this exchange, the price of the Class A Common Stock was set at
$.50 per share, although the prevailing quoted market price at the
time of the transaction was $.375 per share. Prior to the acquisition
of SFL, the Company managed SFL's systems under a management agreement
between the parties. This agreement was terminated in connection with
the acquisition.
Effective December 1, 1982, the Company purchased from International
all of the outstanding common stock of TCS in exchange for 1,414,319
shares of the Company's Class A Common Stock. TCS owns several SMATV .....
systems in the West Palm Beach, Florida area. The exchange price for
the aquisition of TCS was approximately 90% of the appraised value of
the systems adjusted for the historical carrying value of certain
assets and liabilities of TCS. In addition for purposes of t~e ~
exchange, the price of the Company's Class A Common Stock was set at
$.45833, although the average market price of the Company's stock for
30 days prior to closing was $.34461. Prior to the acquisition of
TCS, the Company managed TCS's systems under the terms of a management
agreement between the parties. The agreement was terminated in
connection with the~acquistion.
In addition, in fiscal 1983, the Company acquired three CATV systems
in Colorado from CIC. The systems were purchased for 2,713,160 shares
of the Company's Class A Common Stock. The purchase price for these
systems was based on approximately 90% of the appraised value of the
systems adjusted for the historical carrying value of certain other
assets and liabilities of.the systems. In addition, for purposes of
the exchange, the price of the Company's stock was set at $.30525,
although the average market price of the Company's stock for 30 days
prior to closing was $.2775.
In each of the acquisitions referred to above, appraisals of the
systems ~ere conducted by independent appraisers. Among other things,
these a~pra~sals were based on physical inspection of the systems, the
nature and duration of existing service Contracts, existing and
potential services that could be provided to subscribers and future
growth of the service areas.
The effect of the fiscal year 1983 acquisitions on revenues, net loss
and loss per share, f.or the periods prior to the dates of acquisition,
are summarized below:
Net .Earnings (Loss)
Period Revenues Income (Loss) Per Share
Year ended May 31, 1981-
TOE - ~1111,591 $ -(.,48,478)
cIc 118,095 19,414
Year ended May 31, 1982-
TCS $112,740 $ (131,811) $ (.01)
CIC 181,264 (10,916) -
Six months ended
November 30, 1982-
TCS $ 59,000 $ (65,248) $ (.01)
'Nine months ended
February 28, 1983-
CIC $149,997 $ (35,719)
(4)
PROPERTY AND EQUIPMENT:
~,--~roper~ty~-and~equipment~(:including~capi~alized.leases __ see Notes 3
and 6) at May 31, 1983 and 1982, consisted of the following:
Cable distribution system~
Earth receiving stations
Test equipment
0f.£ice~.furniture-~and~equipment
Vehicles
Leasehol~ improvements
Equipment held for installation
Less-Accumulated depreciation
May 31
1983 1982
$1,095,975 $800,136
54,467 54,467
119,001 93,164
98,058 ~60~182
131,335 83,699
40,300 39,668
30,656 23,457
1 ~ 569,.792
1,1 54, 7'73
(366,426)~ ~ (173,699)
$1,203,366 $981,074
(5) INCOME TAXES:
As described in Note 1, the Company, from time to time, either joins
with International in filing consolidated income tax returns or files
such returns on a separate-company basis. From inception through
August 10, t981, the Company was part of International's controlled
group and, therefore, was includable in International's consolidated
return. For the period from August 11, 1981 through May 31, 1982, the
-Company was required to file separately. As of June 1,1982, the
Company has again become part of InternationaI*s controlled group for
income tax reporting purposes for periods subsequent to that date.
The provision (benefit) for taxes in 1~982 and 1981 consisted of
amounts estimated to be payable (receivable) based on the separate-
company income (loss) of the Company. The losse~ of SFL, TCS and the
CIC systems for these periods were not considered in these
computations since, for financial reporting purposes, such benefits
could not be provided on a separate-company basis. In fiscal year
1983, the Company entered into a tax allocation agreement with
International (Note 1), resulting in a 1983 tax benefit of $~45,OOO,
which represents its pro-rata share of the benefits expected to be
realized in the consolidated tax return of International. On a
-~sep~rate~company~basis,~the~Company~has' net~operat~ng loss and
investment tax credit carryforwards which are available to offset
taxable income through fiscal year 1997 of approximately $280,000 and
$20,000, respectively. Pursuant to the tax allocation agreement
................. discussed,above,~he~.~.Company~..has.~addi.tional.-net~.eperati~gtoss~and
investment tax credit carryforwards available to offset the taxable
income of International's consolidated tax group through 1998 of
$876,000 and $32,000 respectively.
(6) COMMITMENTS:
The Company rents office facilities and certain equipment under
various operating lease arrangements, and leases certain other
equipment and vehicles under capital leases (see Note 3)- Future
minimum lease payments as of May 31, 1983, under noncanceiable capital
and operating leases are as follows:
1984
1985
1986 j
1987
1988
Thereafter
Total minimum
lease payments
Less - Imputed
interest on
capitalized leases
Present value of
minimum lease
payments on
capitalized I~ases
Capita1 Operating
Leases Leases Total
$31,287
5,655
4.,293
41,235
(7,067)
$34,168
$ 46,795 $ 78,082
27,985 33,640
25,936 30,229
16,O30 16;030
14,160 14,160
124,660 124,660
$255,566 $296,801
Net rental expense under all noncancelable operating leases was
approximately$167,-O00, $35,000 and $1440OO for the years ended May
31, 1983, 1982, and 1981, respectively.
(7) ' :
(8)
INCENTIVE~STOCK--OPTION 'PLAN:'
In February 1982, the Board of Directors of the Company approved an
Incentive StOck Option Plan to provide for the grant of stock options
to key employees. A maximum of 473,500 shares of Class A Common Stock
are available for grant at an option price not less than the fair
market value of the stock at the date of grant. Options generally
become exercisable in 25% annual, cumulative increments over a four-
year period from the first anniversary of the grant da~e. The stock
options expire, to the extent not exercised, on the fifth anniversary
-,of...th~ date~o~ant~,-o'r~.'~pon--~he?eartier~terminat~onof.the
employment of the recipient. In March ~983, options to purchase
125,OOO shares, exercisable at $.28125, were granted to officers of
the Company.
SUBSEQUENT EVENTS:
Subsequent to May 31, 1983, the Company signed contracts to construct,
own and operate three SMATV systems in Florida. These systems include
approximately 2500 planned units which are scheduled to be built over
a period of four years.~ In addition to the systems noted above, the
Company signed a contract to acquire all of the outstanding shares of
a California corporation which owns a CATV system in California,
serving approximately ~5OO subscribers. The purchase price is
approximately $1,100,O00. For this system, the Company~will incur
approximately $1,000,0OO of debt and will issue shares of ~the
Company's Class A Common Stock to Glenn R. Jones, who owns a 16.7%
interest in the system. .The interest rate on the debt will.be 9% for
the first two years, and will be 1% above the prime rate thereafter.
The principal will be paid off in equal monthly installments over a
period of ten years from the closing date, with the first principal
paymen~ due 25 months after closing.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
PART III
Item 10. DireCtors and Executive Officers o£ the~Registrant
The informatio~ required by this item is incorporated by reference from the
Company's definitive proxy statement to be flied pursuant~to Regulation.14A
under the Securities Exchange Act of 1934'.in connection with the Company's
1983 Annua~ Meeting of Shareholders. ~
Item 11. Management Remuneration and Transactions
The information required by this item is incorporated by reference from the
Company's definitive proxy statement to be filed pursuant to Regulation 14A
under the Securities Exchange Act of 1934 in connection with the Company's
1983 Annual Meeting of Shareholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is incorporated by reference from the
Company's definitive proxy statement to be filed pursuant to Regulation 14A
under the Securities Exchange Act of 1934 in connection with the Company's
1983 Annual Mee~ing-o~Sharehotders.
Item 13. Certain Relationships and Related Transactions
During fiscal 1983, the Company, in exchange for Class A Common Stock,
purchased all of the outstanding shares of Tri-Comm Systems, Inc. from
International and three other cable distribution systems from Colorado
Intercable, Inc., a subsidiary of International. International and Glenn R.
Jones, Chairman of the Board of Directors and Chief ExecuTive Officer of the
Company, own all of t'heCompany's Class B Common Stock and 5,838,981 shares of
the Company's Class A Common Stock.. For~add£tional~.information on-these
transactions and for ot~er information with regard to indebtedness of the
Company to International and other transactions with International, see Note 3
of Notes to Consolidated Pinancial Statements.
PART IV
Item 14.
Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)~ Financial~Statements and Financial Statement Schedules
1. List of Financial Statements - Reference is made to the
Index zo Financial Statements included in this report under
I.tem 8.
2. List of Financial Statement Schedules-
Report of Independent Public Accountants on Schedules
Schedule IV--Indebtedness of (to) Related~Parties-For the
Years Ended May 31, 1983, 1982 and 1981
Schedule V-- Property and Equipment - For the Years Ended
May 31, 1983, 1982 and 1981
~.~Schedule.Vt--Accumulated~Depreciationof~Property and
Equipment - For the Years Ended May 31, 1983, 1982 and 1981
/
Schedule X--Supplementa.ry Income Statement Information-- For
the Years Ended May 31., 1983, 1982 and 1981
List of Exhibits-Reference is~.made to the Index to Exhibits
immediately preceding the exhibits hereto, which is
reproduced on pages 42-44 of this report.
All other schedules for which provision is made in the apPlicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.
(b) Reports on Form 8-K.
'The following reports on Form 8-K were filed during the fourth quarterof
1 983.
Date of report: March 25, 1983 (as amended under Cover of Form
8, dated April 14, 1983)
Items reported:
1. Agreement to purchase assets from Colorado Intercable,
Inc.
Consummation of agreement to purchase Tri-Comm
Systems, Inc.
3. ~- -Election of new .director
4. Financial Statements of Tri-Comm Systems, Inc.
& Co.
DENVER, COLO:~O
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
To Spacelink, .,Ltd.:
In connection with our examination of .the consolidated
financial statements of SPACELINK, LTD.,.(a Colorado corporation, and
subsidiary of Jones International, Ltd.) and subsidiaries included in
this Form 10-K, we have also examined the supplemental Schedules IV,
V, VI and X included in this Form lO-K. Our examinations of the
consclidated fi~nancial.:~statements were made for.~the purpose .of forming
an opinion on those statements taken as a-whole. The supplemental
..... schedules ~ar.e~presented~.for-pur. poses of,compllying with ~the ~Securities
and Exchange Commission's rules and are not part of the basic consol-
idated financial statements. These supplemental schedules have been
subjected to the auditing procedures applied in the examinations of
the basic consolidated f~nanciak statements and, in our oPinion,
fairly stat~e,~n a.ll. material..nespects ,.the financial data required to
be sets forth therein in relation to the basic consolidated financial
statements taken.as.a ~whole.
ARTHUR ANDERSEN & CO.
Denver, Colorado,
August 15, 1983.
fr
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III 111
III III
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INDEX TO EXHIBITS
INDEX
NUMBER
lO(a) (i)
lO(a) (i±)
lO(a) (iii)
lO( )
lO( )
DESCRIPTION
Articles of Incorporation of the registrant,
as amended, are incorporated by reference to
Exhibit 3(a) to the registrant's Annual Report
on Form IO-K for~theTiscal year'ended May31,
1982, as filed with the'Securities and Exchange
Commission.
Bylaws of the registrant are incorporated by
reference to. Exhibit 2(b) to the registrant's
Registration Statement No. 2-7~884-D on Form
S-18, as filed with the Securities and Exchange
Commission on June 19, 1981.
Management Agreement dated June 1, 1980, between
the registrant and Tri-Comm Systems, Inc. is
incorporated by reference to Exhibit 9(a) to
the registrant's Registration Statement No.
2-72884-D on Form S-18, as filed with the
Securities and Exchange Commission on June 19,
1981.
Amendment to Management Agreement, dated May 18,
1981, between the registrant and Tri-Comm Systems,
Inc. is incorporated by reference to Exhibit 9(b)
to the registrant's Registration Statement No.
2-72884-D on Form S-18, as filed with the' Securities
and Exchange Commission on June 19, 1981.
Termination Agreement dated as of December 1, 1982,
between the registrant and Tri-Comm Systems, Inc.,
terminating the Management Agreement included
herein, as amended, as Exhibits lO(a)(i) and 10 (a)
(ii).
Agreement dated Apri2 29, 1981, between and among the
registrant, Jones International, Ltd., and Howard O.
Thr~li~-re~ating to'Mr.'Th~ratl~s purchase and reten-
tion of 200,000 shares of the registrant's Class A
Common Stock, is incorporated by reference to Exhibit
lO(b) to the registrant's Annual Report on Form IO-K
for the fiscal year ended May 31, 1982, as filed with
the Secur±ties and Exchange Commission.
Agreement dated April 29, 1981, between and among the
registrant, Jones International, Ltd., and Hana B.
Rokusek, relating to Ms. Rokusek's purchase and re-
PAGE
lO(d)
lO(e)
lO(f)
lO(g)
lO(h)
tention of 100,O00 shares of the registrant's Class
A .Common Stock, is incorporated by reference to Ex-
hibit 10(c) to the registrant's Annual Report on Form
IO-K for the fiscal year ended May 31, 1982, as filed
with the Securities and Exchange Commission.
Underwriting Agreement dated August 10, 1981, between
~.~h~.~regi~s%rant~andHanifen,. l-mhoff,.-.tnc..~-is~incorpor-
ated by reference to Exhibit lO(d) to the registran%'s
Ahnual Report on Form 10-K for the fiscal year ended
-May 31, 1982, as filed with the Securities and Exchange
Commission.
Warrant Agency Agreement dated as of Augus~ 11, 1981,
between the registrant and..American Stock. Transfer, Inc,,
is incorporated by reference to exhibit 10(e) to the
registrant's Annual Report on Form IO-K for the fiscal
year ended May 31, 1982, as fi~d with the Securities
and Exchange Commission.
Underwriter's Warrant issued to Hanifen, Imhoff, Inc.,
dated August 20, 1981 to purchase 185,000 shares of
Class A Common Stock, is incorporated by reference to
Exhibit lO(f) to the registrant's Annual Report on Form
IO-K for the fiscal year ended May 31, 1982, as filed
with the Securities and Exchange Commission.
NOTE: Warrants to purchase an aggregate of 115,000
shares of the registrant's Class A Common
Stock have been transferred by Hanifen, Imhoff,
Inc. to'certain of its directors, officers, and
employees and are currently held by such trans-
ferees. Such warrants are identical to Exhibit
lOIf) in all respects, except as to identities
of the persons to whom issued and the number of
shares purchasable. Accordingly, pursuant to
Instruction 2 to Item 601 of Regulation S-K, such
other warrants are not being filed herewith. The
registrant will provide copies of any such
warrants to the Securities and Exchange Comm-
.... ission-upon~.request.
Warrant issued to Jones International, Ltd. to purchase
235,000 shares of Class B Common Stock is incorporated
.... by.~reference-to~Exhibit 9(e) to the registrant'~ Regis-
tration Statement No. 2-72884-D on Form S-18, as filed
with the Securities and Exchange Commission on June 19,
1981.
Agreement dated as of May 25, 1982, between Jones Inter-
national, Ltd. and the registrant, relating to the
acquisition by the registrant of all the issued and
outstanding capital stock of Spacelink of Florida, Ltd.,
is incorporated by reference to the registrant's Current
lO(i)
lO(O)
lO(k)
o(1)
lO(m)
lO(n)
lO(o)
22
Report on Form 8-K dated June 23, 1982, as amended under
cover of Form 8 dated August 26, 1982, all as filed with
the Securities and Exchange Commission.
Termination of Management Agreement, dated May 3, 1982,
between the registrant and Spacelink of Florida, Ltd.,
is incorporated by reference to Exhibit 10(i) to the
registrant's Annual Report on Form~lO'K forlthe fiscal
year ended May 31, 1982, as filed with the Securities
And Exchange Commission.
Agreement dated as of December 1; 1982, between Jones
International, Ltd. and ~he registrant, relating to the
acquisition by the registrant of all the Sssued and
outstanding capital stock..of Tri-Comm Systems, Inc.
Agreement dated as of March 1, 1983, between Colorado,
Inte~cable, Inc. and the registrant, relating to the
acquisition by the registrant of certain cable
television system assets.
Master Antenna Television and Cable Distribution
System Agreement dated as of May 26, 1983,
between Hovnanian of Palm Beach, VII, Inc. and
Spacelink of Florida, Ltd. relating to the instal-
lation of a satellite master antenna television
and cable distribution system.
Master Antenna Television and Cable Distribution System
Agreement dated as of July 1, 1983, between Hovnanian
of Palm'Beach V, Inc. and Spacelink of Florida, Ltd.,
relating to the installation of a satellite master
antenna system and cable distribution system.
Master Antenna Television and Cable Distribution System
Agreement dated as of July 1, 1983, between Hovnanian at
Tarpon Lakes I, Inc. and Spacelink of Florida, Ltd.,
relating to the installation of a satellite master
antenna television and cable distribution system.
Purchase and Sale Agreement dated as of August 24, 1983
between William P. Brooks, Brooks' (a California general
partnershiP), Glenn R. Jones and the registrant relating
to the purchase of all of the common stock of Hi-Vista,
Inc., a California corporation.
List of subsidiaries of the registrant.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
SPACELINK, LTD.
BY:
/s/ Patrick J. Lombardi
Patrick-J.~'~ombardi
TreasUrer,
Chief Financial Officer and
Chief Accountihg Officer
August 26, 1983
Pursuant to the requirements of the SecuritiEs Exchange Act of'
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
August 26, 1983
August 26, 1983
August 26, 1983
August 26, 1983
August 26, 1983
August 26, 1983
By:
/s/ Glenn R. Jones
Glenn R. Jones
Chairman of the Board
Chief Executive Officer
By: /s/ Patrick J. Lombardi
Patrick J. Lombardi
Treasurer and Director
By: /s/ John K. Ostermiller
John K. Ostermiller
Executive Vice President
and Director
BY: /s/ Cecil C. Rush
By:
Cecil C. Rush
Director
/s/ Hana B. Rokusek
Hana B. Rokusek
Director
By: /s/ Peter Lo Edwards
Peter L. Edwards
Secretary
and
EXHIBIT.8
· SPACELINK OF FL~0R!DA? LTD-
FINANCIAL STATEMENTS
AS OF MAY 3.1, 1982 ~ND 1981,
AND FOR TEE PERIODS THEN ENDED
TOGETHER WITM AUDITORS' REPORT
132
ARTi-iU'R ikNI~ERSEN ~: CO.
To Spacelink of.Florida, Ltd.:
' ''' '' balance sheet4 of SPACELINK OF FLORIDA, LTD.
· amtned .the
We have ex ........ = ~e~znk L~d.~, ....... Y
(a Colorado corporation an~ suosZ~zary
Jones Spacelink of Florida, Ltd., as of Ma~ 31, 1982 and 1981, and the
related' statements of opeYations and changes in financial positioh for
the year ended May 31, 1982, and the period from inception (September
i8, 1980)throughMay.31, 1981.. Our examinations were made in
accordance with generally accepted auditing standards and, accordingly,
included such tests of the accounting records .and such other auditing
procedures as we considered necessary in the circumstances. !,
Aa discussed further in Note 1 to the financial statements, the
Company has. incurred losses of $112,912 for the perio~ from inception to
May 31, 1982. Realization of the investment in property and equipment of
$101,962 at May. 31, 1982 is dependent upon (1) the success of future
operation~, or (2) sale Or other disposition ~f the property and
equipment for-an amount at least equivalent to the investment therein.
In our opinion; sub. Jec. t to the realization of the investment in
property and equipment discussed in the preceding paragraph, the
financial statements referred to above present fairly the financial
position'of Spacelink of Florida, Ltd. as of May 31, 1982 and 1981, the
results of its operations'and the changes in its financial position for
the periods then ended, in conformity with generally accepted accounting
principles.applied on a consistent basis.
ARTHUR ANDERSEN & CO..
Denver, Colorado,
July 30, 1982.
- 133
SPACELINK OF FLORIDA, LTD.
BALANCE SHEETS
MAY 31, 1982 and 1981
ASSETS
CASH
ACCOUNTS RECEIVABLE-
Accumulated costs and profit~ on'
construction work in process, net
of advance received Of $25,000 (Note
Other
PROPERTY AND EQUiPME~, net of
accumulated depreciation of $13,742 and
$1,953 (Notes 1- and 3)
OTttER ASSETS
Total assets
LIABILITIES AND SHA~,,HOLDEK,S INVESTMENT_
1982
4,700
56,O00
3,837
· I01,762
;
12.5
$ ,16,6,624_
1981
9,230
69,054
78;284
ACCOUNTS PAYABLE-
Affiliated ~ntities (Note 2)
Trade
ACCRUED LIABILITIES
CUSTOMER DEPOSITS
Total liabilities
$ 273,507
5,283
176
7,969
286,935
$ 10&,709
1,092
7,98~
11 ,9 p,
COMMITMENTS (Note 2)
SHAreHOLDER'S INVESTMENT (Notes 1 and 2)-
Common stock, $.01 par value,
1,O00 shares authorized and
outstanding
Additional'paid-in capital
Accumulated deficit
Total shareholder's investment
Total liabilities and shareholder
investment
10
990
(121,311)
10
990
(38,635)
(120,311) (37,635)
$~ 166,62& S 78,284
The accompanying notes are an integral part of these balance, sheets.
-- 18'4
t~VERqJES'
SPACELiNK OF FLORIDA, LTD.
STATEMENTS OF OPE'RATIONS
FOR ~ y~.AT~ ENDED MAY 31, 1982 AND
FoR -TTtE PERIOD FROM INCEPTION THROUGI{ MAY. 31, 1981
(Notes 1 and 2)
Period Ended May 31._
1982 1981
$ 108,842 $ -1,949
OPERATING, GENERAL AND ADMINISTRATIVE
EXPENSES
OPERATING LOSS
INTEREST EXPENSE, net of interest
Capitalized of $2,026 in 1981
NET LOSS
164~928
: (56,086)
(26,590)
$ (82,676.)
37,293
~35,344)'
~3~29!)
(38,635)
The accompanying notes are an integral part of these statements.
..13U
SPACELINK"OF FLORIDA, LTD-
STATEMENTS OF CHANGES IN FINANCIAL POSITtO~
FOR TME TEAR ENDED MAY 31, 1982 AND
FORT HE PERIOD FROM INCEPTION.THROuGHMAY~31' I981
SOURCES OF FUNDS:
Increase in payables to affiliated
entities
Issuance of common stock to parent
Increase in other liabilities, net
Total sources.of fun~s
USES OF FUNDS:
Funds used in operations~
'Net loss . -
Less - Depreciation, which does
not require funds
Funds'used in operations
.Other uses of fundp-
Purchases of property and equipment
Increase in accounts receivable
Total uses of funds
INCREASE (DECREASE) iN CASH-
Per~od Ended May 31_
1982 . 1982
$ 168,798 $ 104,709
_ t,O00
io93 11,219
170,891
116~919
82,676
(11,78p)
70,887
38,635
(1,953)
36,682
44,697
59,837
175,421
$ (4 ;530)
7'1,007
107,689
$ 9,230
The accompanying notes are an integral part of these statements.
.- 136
(1)
SPACELINK OF FLORIDA, LTDt
NOTES TO FINANCIAL STATEMENTS
.MAY 31, 1982 AND 1981
ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
OrganizatiOn and Basis of Pr~sentation-
Spacelink of Florida, Ltd. (the 'Company"), formerly Jones
spacelink of FlOrida, Ltd., was incorporated on September 18, 1980,
originally as a wholly owned subsidiary of Jones International,
Ltd. ("International"). Effective May 31, 1982, Spacelink, Ltd.,
formerly a wholly-owned subsidiary of International and an
affiliate of the Company, acquired all of the outstanding common
s~ock of the Company from International.
~ ,
Bus,ness- !
The Company is in th~ business of owning, managing, constructing
and selling on a direct basis self-contained cable distribution
systems which provide services to densely populated multi-unit
'residential and commercial developments.
For the period from inception (September 18, 1980).~o May 31, 19'82.,
the Company has incurred losses of $112,912 in the'operation of
these systems. The Company is currently involved in constructing
new systems both for its own account and for sale to others, and is
also negotiating t~ provide additional subscriber services to
existing systems. TO some extent, ~osstble changes in subscriber
services is dependent upon the completion of construction and
closing of additional residential housing units within the systems
presently being served.
Realization of the Company's investment in property and equipment
of $101,.962 at May 31, 1982 is dependent upon (1) the success of
future operations, or (2) sale or other disposition of the systems
for an amount at least equivalent to the investment therein.
Sources of revenues for 1982 and 1981 were as follows':
Period Ended May 31
1982 t981
Contract construction .$ 81,000 $ -
Operating systems 27,842 1,949
$'108,842 $ 1,949
Direct'costs of contract construction in 1982 were S51,000.
187
Summary of Significant Accounttn~ Policies-
The Company has adopted the follpwtng significant accounting
policies:
~evenue'Reca~nitlon - Service fees, .including amounts received
in advance for futu-re services, are recorded as revenues in
the ~eriod that the related services are rendered. Hookup
fees are recognized as revenue to the extent of direct.selling
costs (which include, among other things, commissions,
compensation that results in obtaining subscribers and certain
advertising costs) i~curred in connection.with the related
hookup. Revenues from con~ract co~struction for pre-sold
cable distribution systems are recognized on the percentage-
o-f-completion basis. However, no revenue is recognized~until
a significant portion of the related construction work is
completed, which is generally at the time the system is
activated-
Capitalization Polic~ - Costs incurred to-bring the Company's ,
~abl~ distribution systems to a fully operational stat~s are
capitalized as part of the cable transmission-and distribution
systems. The cost of a subscriber connection made at ~
location where a previous customer had been connected to the
system is expensed.
Depreciation - Depreciation of property and equipment is
~rovided using the straight-line method primarily over the
following estimated useful lives:
Test equipment
Office furniture and equipmemt
Cable distribution .systems
Years
5
7
Lesse~ of term of
service agreement
or I0 years
'InCome Taxes - The Company joins with International in filing
~-6nsolidated_tax returns for periods during which it is a
member~of International's controlled group. For fiscal years
1982 and 1981, the Company was included in International's
consolidated tax return, and for financial reporting purposes,
was no~ allocated a tax provision nor benefit on a separate-
company basis. For periods after May 3~, 1982, the Company
will join in-filing a consolidated tax return with Spacelink,
Ltd., whtch~ as of May 31, ~982, is a member of
International's controlled group.
188
(2)
TRA~SkCTIONS WITH RELATED PARTIES:'
International is wholly owned by Glenn R. Jones, chairman of the
board and chief executive officer of the Company. International
controls various subsidiaries, including Spacelink, Ltd., Tri-Comm
Systems, Inc.. (TCS), and Data Transmission, Inc. (DTi).
International also controls Jones Intercabte, Inc. which iS 'the
general partner and manager for various cable television
partnerships including Fund VII/ABC Venture ("ABC"). Certain
members of. the maqagement of the Company are also officers of thes~
or other affiliated entities. Certain expenses are paid~ by
affiliated, companies on behalf of the Company and by the Company
for affiliated companies, and allocated based on actual time spent
or ,sPecific identification. -
Under certain agreements between ABC and the Company, ABC provides
satellite television signals for use in the operation of the
Company's_~cable distribution systems. For this, the Company pays
.ABC specified amounts based upon the number of the Company's
subscribers. The agreements vary in length from three to seven
years and automatically renew for successive three-year terms
uniess terminated. The. Company may terminate the agreements upon
three-month's notice. Charges for 1982 and 19'81 for the purchase
of'signals tot,!ed $11,606 and $891, respectively-
Thr0ugh May '31, 1982, the Company's systems were managed by
Spacelin~, Ltd. In return for management services, the Company was
obligated to pay specified percentages of its operating revenues to
Spacelink, Ltd., and also to reimburse Spacelink, Ltd. for certain
genera~ and administrative expenses incurred in managing the.
systems,.- This management agreement was terminated in connection
with the acquisition of the Company by Spacelink, Ltd. referred to
in Note 1. A~crued management fee expense for 1982 and 1981 ~as
$5,092 and $3t2, respectively. Accrued reimbursable general 'and
administrative expenses for 1982 and 1981 were $32,560 and $383,
respectively. In addition, Spacelink, Ltd. and TCS have provided
financial assistance to the Company in the form of cash advances
and construction and operational services. The Company is charged
interest on payables to affiliated entities at 1% per month on
average~?month-end outstanding balances.
The Company leases various cable distribution equipment from DTI
pursuant to a thr'ee-year lease agreement expiring August 15, 1984.
The to~al cost Of assets leased by the Company under this agreement
of $46,882 are included in property and equipment in the
accompanying financial statements. Future minimum lease payments
as of May 31, 1982, under this noncancelable capital lease are as
~ollows' ' '
Amount
1983 $ 21,918 -
1984_ 18
Total minimum lease payments 40,t83
Less-Imputed interest (7,782)
Present value of minimum
lease payments $32,401
139
(3)
A summary of payables to affiliated entities is as follows:
Spaceli~k
Intern,~lonal
DTI r
TCS
May 31 .-
1982 _ ~!981 -
$ 161,423 $ 29,916
3!,312 27,107
10,823 19,753
$ 273,507 $ 104,.70~
Interest expense td affiliated entities was $26,590 for 1982, and
$5,317 for 1981, ofwhich $2,026 has been capitalized.
PROPERTY AND EQUIPMENT: '
Property and equipment (including capitalized leases -- see Note 2)
at May 31, 1982 and 1981, consisted of the following:
Ma~
1982 1981
Cable distribution systems
Test equipment
Office furniture and equipment
EqUipment. held for installation
Less-Accumulated depreciation
$ 102,847 $ 70,230
2,112 -
210 777
10,535 -
115,704 71,007
$_ 101,96~ $ 69,05~
140
R~VZSED Certificate of Insurance
~THIS CER~ICATE'IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON YOU THE CERTIFICATE'HOLDER. THIS CERTIFICAT.E~.NOT AN INSURANCE
POLICY/~ND DOES NOT AMEND. EXTEND. OR ALTER THE COVERAGE AFFORDED BYTHE POLICIES LISTED BELOW. ~_ T #~/~
This is to Certify that [; i ERTY
-~ Name and MUTUAL
FJones Intercable Inc., ETAL
(See Attached Named Insured Wording)
5275 DTC Parkway
Engtewood:, CO 80111
address of
Insured.
L_ -J
is, at the issue date Of this certificate, insured by the Company under th.e policy(les) listed below. *The insurance afforded by the listed policy(les) is subject to all
their terms, exc!asions and conditions and is not altered by any requirement, term Or condition ofhny contract or other document with respect to which this
certificate may be issued.
TYPE OF POLICY l%~rT. EXR DATE POLICY NUMBER L~AITS O5 LL~BILITY
i u,o~itinuous COVERAGE AFFORDED UNDER W. C. COV. B 100.~000
LAW Of THE FOLLOWING STATES: I~1~,,~ !l'jl, JJ~l~ B~ ~CClDENT '
Until WC1'191-051938-035~ North Carolina $~v~, ...... ,~,..ACCmENT
WORKERS' Cancelled WC2_191_051938_015 All States SODiLYiNJURYBYDISEAsE
COMPENSATION WC2-191-051938-025 California , $
BODILY INJURY MY DISEASE
/l jX] ~C~"EHE"SlVE . BODILY INJURY - ', PROPERTY DAMAGE
EACH EACH
I [] SCHEDULE FORM ' ' "'' ' $ . OCCURRENCE $ OCCURREN(
~ Continuous
~h VRODUC?S COM- Until .
]~L~'~J~iTI(~S Terminated . $ AGGREGATE $ AGGREGATE
itel Operation~
~,. NDEPENDEN~ CON- COMBINED SINGLE LI~IT
[] TRACTORS/CONTRAC- Reduced ' *LG1-191-051938-045
To.s .ROTECTIVE BODILY [~UURY AND PROPER~Y DAmAge
$500,000 ~CHOCCU.RE~CE
, ~ CONTRACTUAL
L'AB'U~ _ $500,000 ^~REGATE
~ Broad Form
~ NON~WNED ' Until
~ HIRED Terminated AE1-191-051938-065 $ EACH"ERSON ·
EACH ACCIDENT EACH ACCIDENT
or Reduced $ OROCCU~RENCE $ OR OCCURRENCE
Expioszon ~
UndergroundC°llapse Hazard[continued~j. . ~LG1-191-051938-045 $1,000 Deductible Property Damage.
t Hazard Persona In~u~v
[OCATK~b~S}.OF OPERA/qON$ & JOB · (Ii Applicable) DESCRIP~qON OF OpERATK)NS.-
, ~NOTE= You will NOT ~nofifi~.a~lJy ~ ~ c~i~ of ~i§ cov~age. ~u ~ilt ~ ~i~ iJ ~is cgv~mg~ is t~mi~t~ r~uced. _
· ~ertzzzcate ~oz~er zs namea a~z~zona~ znsurea as respects the agreement
with the Named Insured. Additional Insured shall include the City, its
Officers, Boards, Commissions, Agents& Employees per Ordinance of the City
NOTICE OF CANCELLATION: THECOMPANY WILL NOT TERMINATE OR of Boynton Beach, Florida,
~RED~E THE INSURANCE AFFORDED UNDER THE ABOVE POLICIES UNLESS Ordinance ~/83-50.
DAYS NOTICE OF SUCH TERMINATION OR REDUCTION HAS BEEN
MAILED TO:
CERTIFICATE
HOLDER-"~
l- -1
City o.f Boynton Beach
P. O. Box 310, 120 N.E. 2nd Avenue
Boynton ·Beach, Florida 33435
3 21 j~THORIZEDREPRESENTATIVE
- - 5 . Englewood
DATE ISSUED OI=FtCE
[_ Att: Betty S. BorOni, City Clerk _J
~'his cectificate i ..... ted.by LIBER~m/MUTUAL tNSORA..N~. E COMPANY .... pe¢ts such in ........ is afforded by That Co.mil~ns.n~a~iS ex.ec~e~,b.y ~!BE~TY.M~UTUAL ~IRI: INSURANCE CoMpANY as
respects such insurance os is cfforded by That Company, it is executed by LIBERTY INSURANCE CORPORATION as respects ~.~n, su e c~s ~s atto. a_,z~ m/I m~t ~..ompae7.
BS 7455
E~CI~IEA~E ~ i~SSUS9 AS A MATTE~pOF !?FC)RMATION O/4L¥ AND CONCERS NO R:GHTS UPON [HE CEnTIF CATE
HiS ~u~,~A~_ ~O~S NOT AMEND, EXTEND OR ALTER ;HE ,,OVERAGE AFFORDED ~Y T~E POLiCiES [ISTEB BELOW
CO~ANt-ES
AFFORDING
COVERAGES
KENNETH.MURCHISON & CO
BOX 4SS67
DALLAS TX 7S24S
i~:'E~ A Mouston General
Intercable, Inc. etal
(See Attached Named Insured Wording)
I.~TER
DTC Parkway D
Englewood, 'Colorado 80111
)acelink of Florida LETTER E
This {s to certif'/ that OD:it[es of insurance listed below have beep issued to the insured named e~oye. Notwithstanding any reguirement, term or coD~it[on o~
any c0nzract Or othe¢ document-~cvith respect to which this certi{~cate may be issued or may pertain, the i~.sure~ce a~¢orded by the policies described here[r[ is
aH the terms, exclusions and-( onditions of such policies.
TYPE OF INSURANCE
GENERAL LIAE~.LtTY
COMPrEHENSiVE FORM
AUTOMOBILE LIABILITY
COMPFiEHEN$tVEFORM
OWNED
HIRED
NON-OWNED
POLtCY
EXPIRATION DATE
EXCESS LIABILITY
UMB~-=~A FO~: 5X$227974
WORKER'S COMPENSAT10~¢ .-
and
EMPLOYER'SOTHER L~ABIL~TM
OPERATIONS. LOCA~!ON$ ~ EHICLES
PO L[CY NUMBER
4/i/86
Limits of Liabilit:, in Thousands (000} '
EACH
COMBINED
P ER$Ot~AL INJURY
{EACH PERSQN}
~ooI~Y,~u~Y AN~ 5,000 J 5,000
$TATUTORY
:ificate Holder including the City, its Officers, Boards, Commissions, Agents & Employees pe~
iinance of the City of Boynton Beach, Florida, Ordinance #83-50, have been added as Additional
Insureds as respects the Agreement with the Named Insured.
CanceJlat~on: Sho~;d any of the above de~cdbed policies be canceiled before the expiration date thereof, the [sst~[ng com-
pan~ ~,'i~, . ~ndeavor to ,.,aif~ ~O ~dafs w:fitte~ notice to the belot~ named certificate ho[der, ~ut ~[~ure to
ma~ such not?ce sh~lt ~mpose no obligation or fiabiHty o~ any kind upon the company.
City .of Boynton Beach
P. O. Box 310, 120 N.E. 2nd Avenue
Boynton Bemch, Florida 33435
Att~ Betty S. Boroni, City Clerk
JONES INTERC~BLE, INC. ET AL
NAMED INSURED WORDING
Page 1 of 2
(Rev.
Jones International, Ltd~
Atlantic Cable C0~pany
Betterview Cablevision of Oregon, Inc.
Evergreen Intercable, Inc.
Konocti TV, Inc.
Colorado Intercable, Inc.
Jones Tri-City Intercable, Inc.
Cable TV Fund VI
Cable TV Fund VII
Cable TV Fund VII-A
Cable TV Fund VII-B
Cable TV Fund VII-C
Cable TV Fund VII/ABC
Cable TV Fund VII/ABC Venture
Cable TV Fund VIII
Cable TV Fund VIII-A
Cable TV Fund VIII-B
Cable TV Fund VIII-C
Cable TV Fund IX
Cable TV Fund IX-A
Cable TV Fund IX-B
Cable TV Fund IX-C
Cable TV Fund 10
Cable TV Fund 10-A
Cable TV Fund 10-B
Cable TV Fund 10-C
Cable TV Fund 11
Cable TV Fund ll-A
Anne Arundel Intercable, Inc.
Cable TV Fund lI-B
Cable TV Fund ll-C
Cable TV Fund ll-D
Cable Tv~'Joint Fund 1I
Jones of West Allis, Inc.
Jones of New Berlin, Inc.
Total TV of Kenosha
Total TV Cable Services I
Cable TV Fund II-E/F Venture
Cable TV Fund 12
JonesInte~¢able, Inc. Et A1 and subsidiary or affiliated ~ntities or
subsidiaries or affiliates thereof (Corporations, Companies,
Partnerships, Individuals or Others) as now exist or may hereafter be
constituted including, but not l~mited to the following:
JONES INTERCABLE, INC- ET AL
NAMED INSURED WORDING
Spacelink, Ltd.
Spacelink of Florida, Inc.
Spacelink of Texas, Inc.
Spacelink 2, Inc.
Spacelink of MisSion .Dorado, Ltd.
Data Transmissions. Inc.
The Jones Group, Ltd.
GlenuR~ JOnes
Christine E. Jones
Glenn Michael Jones
Suzanne M. Jones
Jones Futura Foundation, Ltd.
The Mind Extension Channel, In=.
Jones International Securities, Ltd.
Jones Futurex 3, Inc.
Jones Performance .Products, Inc.
Starsearch, Ltd.
Walnut Valley Special Cable TV Fund, Ltd°
Jones IntercableOf California, Inc.
Tri~Comm,SYstems, Inc.
Jones Futurex, Inc.
Jones Info~mation Management, Inc.
'Jones Communications, Ltd.
Jones Intercable of L. A. County, Inc.
Jones Securities, Inc.
Saturn T.V., Inc.
SF Alarm, Inc.
Internation Aviation, Ltd.
Jones Properties, Inc.
Jones Cable Security, Inc.
Jones Strategic ~curity Systems, Inc.
Colonial ~levision, Ltd.
Cable ~ds, Ltd.
' Hi Viista, Inc. ~
Colorado CableiProperties, Inc.
Jones Intercable Advertising Sales, Inc.
Suffolk Cablievision, Inc.
"Spacelink of Grants
Spacelink of Socorro
Page 2 of 2
-
JONES INTERCABLE~ INC. ET AL
NAMED INSURED WORDING
Jones Intercable, Inc. Et A1 and subsidiary or affiliated entities or
subsidiaries or affiliates thereof (Corporations, Companies,
Partnerships, Individuals or Others) as now exist or may hereafter be
constituted including, but not limited to the following:
Jones International, Ltd.
Atlantic Cable Company
Betterview Cablevision of Oregon, Inc.
Evergreen Intercable, Inc.
Konocti TV, Inc.
Colorado Intercable, Inc.
Jones Tri-City Intercable, Inc.
Cable TV Fund VI
Cable TV Fund VII
Cable TV Fund VII-A
Cable TV Fund VII-B
Cable TV Fund VII-C
Cable TV Fund VII/ABC
Cable TV Fund VII/ABC Venture
Cable TV Fund VIII
Cable TV Fund VIII-A
(continued)
exander
exander
JONES INTERCABLE~ INC. ET AL
NAMED INSURED WORDING
(continued)
Cable TV Fund VIII-B
Cable TV Fund VIII-C
Cable TV Fund IX
Cable TV Fund IX-A
Cable TV Fund IX-B
Cable TV Fund IX-C
Cable TV Fund iO-A
Cable TV Fund IO-B
Cable TV Fund IO-C
Cable TV Fund 11
Cable TV Fund ll-A
Cable TV Fund ll-B
Cable TV Fund ll-C
Jones V.V.S., Inc.
Spacelink, Ltd.
Spacelink of Florida, Ltd.
Data Transmission, Inc.
Jones Group, Ltd.
Glenn R. Jones
(continued)
Alexander
exander
JONES INTERCABLE~ INC. ET AL
NAMED INSURED WORDING
(cont inued )
Jones Futura Foundation, Ltd.
Cable TV Fund 10
Jones Performance Products, Inc.
Starsearch, Ltd.
Walnut Valley Special Cable TV Fund, Ltd.
Jones Intercable of California, Inc.
Tri-Comm Systems, Inc.
Jones Futurex, Inc.
Jones Information Management, Inc.
Jones Communicatins, Ltd.
Jones Intercable of L.A. County, Inc.
Jones Intercable Securities, Inc.
Saturn Cable T.V., Inc.
Calstar Communications, Inc.
Jones Futurex Securities, Inc.
Spacelink Alarm, Inc.
International Aviation, Ltd.
Jones Properties, Inc.
US Alarms, Inc. D/B/A Westec Security Systems
(continued)
xander
exander --
JONES INTERCABLE~ INC. ET AL
NAMED INSURED WORDING
(continued)
Total Protection Plus, Inc.
Colonial Cablevision, Ltd.
Cable Ads, Inc.
Hi Vista, Inc.
xander __
exander
January 5, ~8/
TO ~OM IT ~'~ CONCERN:
Spacelink of ~zorida, Ltd. is.a wholly owned subsidiary of Spacelink, Ltd..
connection w~h our long range plans, we expect to continue full financial
support for the operations of.Spacelink of Florida, Ltd.
Sincerely,
Gary R. Peacock
Vice President/Finan'ce -
CRPjmh
83/007
PAG'E ~7 oJ~
-EXHIBIT
3901 Westerly Place)Suite 10~,/Newpor~ Beach CA 92660!(714)
-The Satte' CompanY. es,
/nc
· Real Estate Developers
· General Contractors
· Planners & Architects
- En~neers
· Real Estate Brokers
· Property Managers
· Mortgage Bankers
· Title Insurors
March 15, t983
Spacelink
1490 Garden Lakes Boulevard
W.--Palm-Beach,FL 33411
TAtte~tionf. Judy Martin
Dear Ladies and Gentlemen:
Our company contracted with Spacelink to provide
cable t.v. services to a 400 plus unit development
in Boynton Beach~ _ ~f i~ce '
invo~..~.., ..... : exper w-zth the corc:mn,~ -'
_._._,. ' . . ~ ~*~ ~--~zit..~o.~12 ~or service
w~un revmewing the orosr~ ~ ~ .....
°=~* ~*~3or~a~lons and installa~ ..... v _ .
~** u~ rne ~acxlities
.the company has always maintained the highest degree
of Professionalism and cooperation. I have found
the company has employees who are responsive, concerned
and have a sense of urgency. I certainly would rec~d
the company as one capable of ProViding qualiky and
ef~[~?ient service in our area.
"ALL YOU NEED TO KNOW IN REAL ESTATE"
2328 South Congress Avenue West Palm Beach, Florida 33406
305-968,0750 ._ -~--~-~>' ~
Versatile Investment Properties, Inc.
1300 North Federal Hwy., Unit 102, Boca Rat0n, FL 33432
2
Telephone: 421-723 , Telex: 512462, Cable V.I.P~I.-BORN
.March 16, 19-83
Jones Spacelink
1490 Goldenlakes Blvd.
West Palm Beach, FL 33411
To whom it may concern,
Pleas.e be advised the above noted company has completed the
installation of a master antenna and earth station system for our
Windwood Project in Boca Raton; Florida.
We have found their workmanship and service, excellent and
have no hesitation in recommending them for similar work in other
projects.
Yours very' truly,
VBRSATILB INrVBSTMBNT PROPBRTIBS, INC.
~e4Bu-~fscha er.t .....
V i ck~P~r e s i dent / ~ ~nanc ~
LB:VR ':
EXHIBIT V
The proposed signal carriage and rate schedule is listed below:
Service Channels
Aerial or Underground
Installation
Monthly Rate
Basic
2-WPBT-Miami-PBS
-WTVJ-Mzamz-CBS
5-WPTV-West Palm Beach
NBC
7-WS%~-Miami-NBC
10-WPLG-Miami-ABC
12-WPEC-West Palm Beach
ABc
29-WFLX-West Palm Beach
Ind~
34-WTVX-Ft. Pierce-CBS
45-WHFT-Ft. Lauderdale
Ind.
51.WKID-Ft. Lauderdale
Ind
First Outlet
Each Additional Outlet
$19.95
15.00
(An installation of more than 150 feet in length will have
an additional charge of $.35 per foot.)
$8.50
2.50
Extended Basic
17-WTBS-Ind.-Atlanta
9-WGN-Ind.'Chicago
Cable News Network-Atlant 24 Hour News Entertainment
and Sports Progranuning Network 24-Hour Soorts
Nickelodeon-Quality Children's Program
ArtsmCultural Programming
CBN Cable Network-Family Entertainment
USA Network-Broadbased programs including sports
Calliope-Children's programming
Cable Health Network-Health 'and Science
First-Outlet
Each Additional Outlet
Premium Services-
Home Box Office
The 'Movie Channel
Cinemax
$10.00 $3.50
5.00 2.50
$10.O0 $10.00
10.00 10.00
10.00 10.00
If a customer takes a second or third premium service there
will be a $.50 discount on the second and third premium
service. For example, the first premium service is $10.00
per month, the second $9.50 and the third $9.00
Multiple Family (6 units or more)
(Based on 100% of units)
First Unit Time and Material
Additional Units Time and Material
Co~merciai, Hotel, ~tel
First Outlet Time an~ Material
Each Additional Outlet Time and Material
$8.50
6.50
S8.50
~ 50
e
EXHIBIT 5 (page 2)
SPACELINK OF FLORIDA, LTD., INC,
CABLE SUBSCRIPTION AGREEMENT
NAME
ADDRESS
TOWN
Type of Premises: RESIDENTIAL
(Circle one) ~
No. of Outlets:
(Circle-one)
DATE
TELEPHONE
COMMERCIAL
CONNECTION CHARGE Pay 'TV
Same Time
RATE SCHEDULE
MONTHLY SERVICE CHARGE
Pay TV $
Additional Set{s)
Later Date "
Additional. Set(s)
Other
sub Total
Tax
Total
Additional Set(
Additional Set(s)
Other
Sub Total
~ax
Total
pAY TV,EQUIPMEnT
SERIAL NUMBER(S) .- L, ......
SECURiTY'DEPOSIT $
This 'is a monthly ~ubsCriptiOn Agreement, and shall auto-
matically be renewed for additional successive terms of one month each
unless and until I cancel this subscription Agreement by written notice
giv~ to Spacelink at-least 15 days before the end of the current term
after which sUch cancellation will be effective.
Subscription fees are payable monthly in advance; I understand that
"Spacelink will install TV equipment in my residence or business prem-
ises, and that'this equipment shall remain the prOperty of Spaceltnk.
agree to make no modification in the equipment installed without written
consent of SpaCelink. ~I agree~that I will not destroy, alter, tamper
with or remove~the equipment .and that I shall return it to Spaceltnk or
permit Spac~link to enter my residence or business premises to remove
it if service is cannelled_for any reason.
In the event that the pay TV equipment is (1) lost, stolen or damaged, or
(2) not returned ~to Spacelink upon the cancellation of pay TV service, I
agree to forfeit my Securit~ Deposit of $ to Spacelink and to pay
an additional Sum of $150.00 as damages for the pay TV equipment..
In the event that it is necessary for Spacelink to commence legal pro-
ceedings for the recovery of the pay TV equipment or the value thereof,
the undersigned subscriber agrees that any Judgement against him or her
shall include reasonab~le attorney's fees~and any and all court costs in-.
curred. I understand that the monthly service charge is subject to change
by Spacelink. I also understand that Spacelink may cancel this agreement
at any time upon notice to me, and I agree that Spacelfnk shall not be
liable for any interruption, interference or cessation of service re-
s~lting from events beyond Spacelink's reasonable control.
z'otai Amount Received $
Subscriber's Signature Date
Instailer's Signature
Date
EXHIBIT VI
Spacelink does non now have contracts Wi~h any of the
public utilities serving the_City of Boynton. Beach.
Discussions are under way with developers of the right
to utilize any private easements which may be necessary.
EXHIBIT VII
Neither Spacelink of Florida, Ltd., nor its parent company
has any agreements, written, oral or otherwise with any other
firm, partnership, corporation, corporation or individual in
regard 'to this application or in the operation of it if it
were to be awarded same.
EXHIBIT VIII
Attached is Spacelink of Florida, Ltd's latest available
statement, and a current financial statement and annual
report of ou~ parent company, ~Spacelink, Ltd., along with
a letter from them indicating that they will provide
whatever financial backing necessary for this operation.
As you can see from the financial statement and as we
can 'assure you, we will have the funds to build, operate
and maintain any cable oper'ation in the City of Boynton Beach.
A current financial statement for our company has been
ordered and will be forwarded to you upon receipt..
THE ,~E'i'NA CASUALTY AND SURETY COMPANY
Hartford, Connecticut 06115
POWER OF ATTORNEY AND,CERTIFICATE OF AUTHORITY OF ATTORNEY(S)-iN-FACT
KNOW ALL MEN BY THESE PRESENTS, THAT THE/ETNA CASUALTY AND SURETY COMFANY, a corporation duly organized under the laws of the
State of Connecticut, and having its principal office in the City of Hartford, County of Hartford, State of Connecticut, hath made, constituted and
app°inted, and does by these presents make, constitute and appoint L. E. Larson~ Robert S. Cecil, Mary Fisher or
Steven R. Kennedy - -
of Derive r ~ .Co 1 o fade , its true and lawful Attorney(s)-in-Fact, with full power and authority hereby conferred
tOnatedSign, execute and acknowledge· at any place within the United States, or, if the following line be filled in, within the area there desig-
· the following instrument(s):
by hie/her sole signature and act, any and all bonds· recognizances, contracts of indemnity, and other writings, obligatory in the nature of a bond,
recognizance, or conditional undertaking, and any and all consents incidents thereto Dot exceeding the sum of TWO HUNDRED
THOUSAND ($200~000o00) DOLLARS -
State of Connecticut
County of Hartford
and to.bind THE/ETNA CASUALTY AND SURETY COMPANY, thereby as fully and to the same extent as if the same were signed by the duly
authorized officers of TH E/ETNA CASUALTY AND SURETY COMPANY, and all the acts of said Attorney(s)-in-Fact, pu rsuantto
given, are hereby ratified and confirmed, the authority herein
This appointment is made under and by authority of the following Standing Resolutions of said Company which Resolutions are now in full force
and effect:
VOTED. That each of the following officers, o . . Chairman Vice Chairman, President, Any Executive Vice President, Any Senior Vice President, Any Vice. . .
President Any Assistant Vice President, Any Secretary, Any Assistant Secretary, may from time to time appoint Resident Vice Presidents, Resident
Assistant Secretaries, Attorneys-in-Fact, and Agents to act for and on behalfofthe Company and may give any such appointee such authority as his
certificate of authority may prescribe to sign with the Company's name and seal with the Company's seat bonds, recognizances, cohtrects of
indemnity;and other Writings obligatory in the nature of a bond, recognizance, or conditional undertaking, and any of said
Directors may at any time remove any such appointee and revoke the power and authority given him. officers or the Board Of
VOTED: That any bond, recognizance,' contract of Indemnity,' ' or writing' ' obhgatory' in the nature of a bond, recognizance, or conditional undertaking
shall be valid and binding upon the Company when {a) signed by the Chairman, the Vice Chairman, the President, an Executive Vice
certificate of authority of sUCh Resideflt Vice President, and duly attested and sealed with the Company's seal by a President, a
Senior Vice President, a Vice President, an Assistant Vice President or by a Resident Vice President, pursuant to the power prescribed in the
Secretary or Assistant Secretary
or by a Resident Assistant Secretary, pursuant to the power prescribed in the certificate of authority of such Resident Assistant Secretary; or (b) duly
·authority.executed (under seal, if required) by one or mole Attorneys-in-Fact pursuant to the power prescribed in his or their certificate or certificates of
This Power of Attorney and Certificate of Authority is signed and sealed by facsimile under and by authority of the following Standing Resolution
voted by the Board of Directors of THE/ETNA CASUALTY AND SURETY COMPANY Which Resolution is now in full force and effect:
VOTED:. That the signature, of each 0fthe. following, officers:. Chairman, Vice Chairman· President, Any Executive Vice President, Any Senior Vice
P .reslden% Any Vice President, Any Assistant Vice President, Any Secretary, Any Assistant Secretary, and the seal ofthe Company may be affixed by
facsimile to any power of attorney or to any certificate relating thereto appointing Resident Vice Presidents, Resident Assistant Secretaries or
Attorneys-in-Fact for purposes only of executing and attesting bonds and undertakings and other writings obligatOry in the nature thereof, and any
such power of attorney or certificate bearing such facsimile signature or facsimile seal shall be valid and binding upon the Company and any such
power so executed and certified by such facsimile signature and facsimile seal shall be valid and binding upon the Company in the future with
respect to any bond or undertaking to which it is attached.
IN WITNESS WHEREOF, THE/ETNA CASUALTY AND SURETY COMPANY has caused this instrument to be signed by its AS sistaa t
dayofVice OctoberPresidemt ,19 82 , and its corporate seal to be hereto affixed this ].3th
,,,:~ .~o
~ ~% THE ~E'I'NA CASUALTY AND SURETY COMPANY
', ........ ,,,," By
ss. Hartford Assistant V~ce President
Onthis 13th dayof October ,19 82 , before me personal;y came R. T, RIPPE
to me known, who, being by me duly sworn, did depose and say: that he/she is
Assistant Vice Preslde~ o~
THE/ETNA CASUALTY AND SURETY COMPANY· the corporation deScribed in · .
and wh,ch executed the above instrument; that he/she knows the
seal of said corporation; that the seal affixed to the said instrument is such corporate seal; and that he/she executed the said instrument on behalf
of the corporation by authority of his/her office under the Standing Resolutions thereof.
CERTIFICATE
' the undersigned,
S acre tary of THE/ETNA CASUALTY AND SURETY COMPANY, a s~ock corporation of the
S{ate of Connecticut, DO HEREBY CERTIFY that the foregoing and attached Power of Attorney and Certificate of Authority remains in full force and
has not been revoked; and furthermore, that the Standing Resolutions of the Board of irectors, as set fbrth in the Ce 'ficate of Authority, are now
in force. ~(~ ~ (~
SignedDecemberand Sealed at the Home, 19OffiCe83of the Company, in the ............ City of Hartford, Statee/6fX~,of nnecticut:~,Sll, th day of
£J ~% .
.(S-1922-E) (M) 3-79 ;."', ,?.." Secreta~
PRINTED iN U.S.A.
THE A;TNA CASUALTY AND SURETY. COMPANY
-- Hartford. Connecticut 06115
FE & CASUALTY
PERFORMANCE BOND #19S42 , 400217 BCA
~OW ALL MEN.BY THESE PRESENTS, That we, .S. PACELINK OF FLORIDA,
Principal, hereinafter called Principal, and The ~tna Casualty and Surety Company, a Connaa
-t corporation, as Surety, hereinafter called Surety, are held and firmly bound unto
~TY OF BOYNTON BEACH~ F~.ORIDA . , as Obligee, hereinafter called 0bligee, in the
.~unt of Fifteen Thousand and no/100 Dollars,
1.5,000.00 ......... -), for the payment of which'sum, well and truly to be made, the said
~incipal and Surety bind themselves, and their heirs, executors, administrators, successors
and assigns, jointly and severally, firmly by these presents.
M~MEREAS, Principal has entered in~o a written agreement with the Obligee dated Dec. 6, 1983
construct a cable TV system in the vicinity of the' City~limit~ of Boyn~on ~eacn, ~'±~
ich agreement is hereby referred to and made a part hereof as fully and to the same extent a
if copied at length herein. ~
...... W, THEREFORE, THE CONDITION OF THIS OBLIGATION' IS SUCH, That if Principal shall fully indem-
fy and reimburse the Obligee for any loss that they may suffer through the failure of the
incipal to faithfully observe and perform all obligations and duties imposed upon the Princi
said agreement, for which a bohd must be post6d~, then this obligation to be void; otherwis~
tg remain in full force and' effect.
PROVIDED,~. HOWEVER, It shall be a condtion precedent to any right of recovery hereunder, that
e~ent of any default on the part of the Principal, a written statement~of the particular
of such default shall be, within thirty (30) days, delivered to Surety at its Home Offic~
~rtford, Connecticut by registered mail.
DED, HOWEVER, That no action, suit or proceeding shall be had or maintained against the
/~ty on this instrument unless the same be brought or instituted and process served upon the
~ety within one year after completion of the work mentioned in said agreement, whether such
· k be completed by the Principal, Surety or Obligee; but if there is any maintenance period
~ ~vided in [the agreement for which said Surety is liable, an action for maintenance may be
~ught within three months from the expiration of the maintenance period, but not afterwards.
DVIDED, HOWEVER, That no right" of action Shall accrue under this bond to or for the use of a~
~son other than the Obligee, and its successors and assigns.
WITNESS WHEREOF~ The said Principal and Surety have signed and sealed this instrument this
6th day of December , , 1983
Co~rr~ers ignatur, e ,,o
Rofoert C.' Rice~ Jr.
311 North Flc~ida Ave.
Tam~a, Florida 33609
SPACELINK OF FLORIDA, INC..
THE /ETNA CASUALTY AND SURETY COMPANY
BY; . . /
Mary Fisher, Attorney-in-fact
· (L- 247--E) 9-75
CAT. 399949
PRINTED )N U.S.A.