UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 15)*
VIDEO JUKEBOX NETWORK, INC.
(Name of Issuer)
Common Stock, par value $.001 per share
(Title of Class of Securities)
92656G 10 8
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JANUARY 30, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
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1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.4%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
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1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.4%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
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1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
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2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 71,584
Beneficially 8. Shared Voting Power
Owned By 12,255,280
Each 9. Sole Dispositive Power
Reporting 71,584
Person With 10. Shared Dispositive Power
9,026,470
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.4%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
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1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
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2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
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3. SEC Use Only
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4. Source of Funds*
WC
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5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization
Delaware
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Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.4%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
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This Amendment No. 15 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July 1993 Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "Amendment No. 1") and as amended by Amendment
No. 2 thereto dated September 10, 1993 (the "Amendment No. 3") and as amended by
Amendment No. 3 thereto dated September 13, 1993 ("Amendment No. 3") and as
amended by Amendment No. 4 thereto dated December 20, 1993 ("Amendment No. 4")
and as amended by Amendment No. 5 thereto dated January 11, 1994 ("Amendment No.
5") and as amended by Amendment No. 6 thereto dated February 10, 1994
("Amendment No. 6") and as amended by Amendment No. 7 thereto dated February 23,
1994 ("Amendment No. 7") and as amended by Amendment No. 8 thereto dated March
9, 1994 ("Amendment No. 8") and as amended by Amendment No. 9 thereto dated May
10, 1994 ("Amendment No. 9") and as amended by Amendment No. 10 thereto dated
July 8, 1994 ("Amendment No. 10") and as amended by Amendment No. 11 thereto
dated July 28, 1994 ("Amendment No. 11") and as amended by Amendment No. 12
thereto dated August 10, 1994 ("Amendment No. 12") and as amended by Amendment
No. 13 thereto dated December 16, 1994 ("Amendment No. 13") and as amended by
Amendment No. 14 thereto dated September 14, 1995 ("Amendment No. 14") (the July
Statement as amended by the August Amendment, September Amendment, Amendment No.
3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment
No. 8, Amendment No. 9, Amendment No. 10, Amendment No. 11, Amendment No. 12,
Amendment No. 13 and Amendment No. 14 is referred to as the "Original
Statement"), is jointly filed by the persons listed on the execution pages
hereof (the "Reporting Persons") pursuant to the Joint Filing Agreement filed as
Exhibit 1 to Amendment No. 12.
This Amendment is filed by the Reporting Persons subsequent to filing by
CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment is filed to disclose that the arrangements pursuant to
which Communications Equity Associates, Inc. ("CEA") was to become an agent for
certain persons in connection with transactions related to the disposition of
shares of Common Stock have not been consummated nor is such an appointment
anticipated.
Item 13 on the cover pages filed herewith has been amended to reflect the
percentage of beneficial ownership of the respective Reporting Person based upon
the number of shares issued and outstanding as of January 31, 1996.
Except as specifically modified, amended or supplemented by this Amendment
all of the information in the Original Statement is hereby confirmed.
Item 4 of the Original Statement is hereby supplemented by adding thereto the
following:
Item 4. Purpose Of Transaction
CEA, VLW (now dissolved - See Item 6 hereto), Wolfson, individually,
and together with his wife, Lynn R. Wolfson (collectively, "the Wolfsons"), VHC,
the Blanks and Puck have been unable to reach a mutually satisfactory
arrangement and have terminated their discussions relating to the appointment of
CEA as an exclusive agent for each of the Wolfsons, VHC, the Blanks and Puck in
connection with negotiations among third parties with respect to the shares of
Common Stock, which are subject to the VLW Proxy Agreement and the VHC Proxy
Agreement. At the current time, the Wolfsons, VHC, the Blanks and Puck do not
6
<PAGE>
intend to appoint CEA as their agent in connection with any transactions
involving the Common Stock. Additionally, StarNet/CEA II Partners (the "Joint
Venture") and CEA have been unable to reach a mutually satisfactory arrangement
and have terminated their discussions relating to the appointment of CEA as the
Joint Venture's exclusive negotiating agent in connection with any potential
transactions with third parties.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest in Securities of the Issuer
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of January 31, 1996 is
approximately 23,944,281. The percentage of beneficial ownership of each of the
Reporting Persons included in response to Item 13 on the cover page filed
herewith is computed based on the aggregate number of shares outstanding on
January 31, 1996.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
Item 6. Contracts, Arrangements, Understandings Or Relationships With Respect
To Securities Of The Issuer
In connection with the liquidation and dissolution of VLW, VLW distributed
312,894 shares of Common Stock to Wolfson and 327,492 shares of Common Stock
(collectively, the "Dissolution Shares") to Lynn R. Wolfson. In connection with
such transfer, each of Wolfson and Lynn R. Wolfson executed an Agreement to be
Bound by Irrevocable Proxy, Right of Refusal and Tag Along Agreement. Pursuant
to such agreements, each of the Wolfsons agreed to be bound by the VLW Proxy
Agreement and to subject the Dissolution Shares to the terms and conditions of
the VLW Proxy Agreement. Wolfson also received an additional distribution of
697,067 shares of Common Stock (the "Additional Shares") from VLW. Wolfson,
pursuant to an Agreement to be Bound by Irrevocable Proxy, Right of Refusal and
Tag Along Agreement, agreed to be bound by the terms of the VLW Proxy Agreement
and to subject the Additional Shares to the terms and conditions of the VLW
Proxy Agreement. Since VLW has transferred all of the shares of Common Stock
formerly held by it to the Wolfsons and has been dissolved, VLW is no longer a
party to the VLW Proxy Agreement.
The following amendment to Item 6 included in Amendment No. 14 dated
September 14, 1995 is hereby deleted in its entirety:
See Item 4 with respect to the agreements in principle between
CEA and each of VLW and Wolfson; VHC, the Blanks and Puck; and
the Joint Venture with respect to the engagement of CEA as
exclusive negotiating agent for such parties in connection
with any disposition of Common Stock held by the Joint Venture
and any shares of Common Stock subject to the VLW or VHC Proxy
Agreements which may be transferred in connection therewith
pursuant to the co-sale rights therein. Such agreements in
principle are intended to be reflected in written agreements.
Item 7 of the Original Statement is hereby amended and supplemented as
follows:
Item 7. Material To Be Filed As Exhibits
Exhibit 99.1 Agreement to be Bound by Irrevocable Proxy, Right of Refusal
and Tag-Along Agreement dated as of October 19, 1995 by and
between Wolfson, Lynn R. Wolfson and CEA Investors
Partnership II, Ltd.
Exhibit 99.2 Agreement to Be Bound by Irrevocable Proxy, Right of Refusal
and Tag-Along Agreement dated as of November 30, 1995 by and
between Wolfson and CEA Investors Partnership II, Ltd.
Exhibit 99.3 Schedule 13D dated July 27, 1993 (originally filed in paper
format)
Exhibit 99.4 Amendment No. 1 to Schedule 13D dated August 9, 1993
(originally filed in paper format)
Exhibit 99.5 Amendment No. 2 to Schedule 13D dated September 10, 1993
(originally filed in paper format)
Exhibit 99.6 Amendment No. 3 to Schedule 13D dated September 13, 1993
(originally filed in paper format)
Exhibit 99.7 Amendment No. 4 to Schedule 13D dated December 20, 1993
(originally filed in paper format)
Exhibit 99.8 Amendment No. 5 to Schedule 13D dated January 11, 1994
(originally filed in paper format)
Exhibit 99.9 Amendment No. 6 to Schedule 13D dated February 10, 1994
(originally filed in paper format)
Exhibit 99.10 Amendment No. 7 to Schedule 13D dated February 23, 1994
(originally filed in paper format)
Exhibit 99.11 Amendment No. 8 to Schedule 13D dated March 9, 1994
(originally filed in paper format)
Exhibit 99.12 Amendment No. 9 to Schedule 13D dated May 10, 1994
(originally filed in paper format)
Exhibit 99.13 Amendment No. 10 to Schedule 13D dated July 8, 1994
(originally filed in paper format)
Exhibit 99.14 Amendment No. 11 to Schedule 13D dated July 28, 1994
(originally filed in paper format)
Exhibit 99.15 Amendment No. 12 to Schedule 13D dated August 10, 1994
(originally filed in paper format)
Exhibit 99.16 Amendment No. 13 to Schedule 13D dated December 16, 1994
(originally filed in paper format)
Exhibit 99.17 Amendment No. 14 to Schedule 13D dated September 14, 1995
(originally filed in paper format)
Except as specifically modified, amended or supplemented by this Amendment
No. 15, all of the information in the Original Statement is hereby confirmed.
7
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SCHEDULE 13D
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited Florida corporation
partnership
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
-------------------------------------
As: Vice President
-------------------------------------
By: /s/ THOMAS W. CARDY Dated: February 9, 1996
-------------------------------
As: Vice President
-------------------------------
Dated: February 9, 1996
/s/ J. PATRICK MICHAELS, JR.
- ----------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: February 9, 1996 By: CEA Investors Partnership
II, Ltd., a Florida
Limited Partnership, its
General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
--------------------------------------
As: Vice President
--------------------------------------
Dated: February 9, 1996
8
EXHIBIT 99.1
AGREEMENT TO BE BOUND BY
IRREVOCABLE PROXY,
RIGHT OF REFUSAL AND TAG-ALONG AGREEMENT
between
LOUIS WOLFSON, III
and
CEA INVESTORS PARTNERSHIP II, LTD.
Dated as of the 30th day of November, 1995
<PAGE>
AGREEMENT TO BE BOUND BY IRREVOCABLE PROXY, RIGHT OF REFUSAL AND
TAG-ALONG AGREEMENT
AGREEMENT, dated as of the 30th day of November, 1995 by and between
LOUIS WOLFSON, III (herein referred to as WOLFSON or the "Affiliated
Stockholder") and CEA INVESTORS PARTNERSHIP II, LTD., a Florida limited
partnership ("CEA II, Ltd."), of which CEA Investors, Inc., a Florida
corporation ("CEA Investors") is the general partner.
WHEREAS, WOLFSON, Venture LW Corporation ("VLW Corp.") and CEA II, Ltd.
are parties to an Irrevocable Proxy, Right of Refusal and Tag-Along Agreement
dated as of August 27, 1993 (the "Proxy Agreement") a copy of which is attached
hereto as Exhibit A;
WHEREAS, VLW Corp. has transferred 697,067 shares of Common Stock of
Video Jukebox Network, Inc. (the "Company") to WOLFSON (the "Shares");
WHEREAS, such shares and any proposed transfer of such shares are
subject to certain restrictions on transfer under the terms of the Proxy
Agreement and to an irrevocable proxy executed by VLW Corp. in favor of CEA II,
Ltd.; and
WHEREAS, WOLFSON is willing to agree to be bound by the terms of the
Proxy Agreement with respect to the Shares.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein
and in the Proxy Agreement, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
1. CONSENT. CEA II, Ltd. hereby acknowledges and consents to the transfer of the
Shares from VLW Corp. to WOLFSON in the amount specified above subject to
WOLFSON's execution of this Agreement and his delivery to CEA II, Ltd. of
documentation confirming his grant of the proxy for such Shares in the form of
the proxy attached as Exhibit A to the Proxy Agreement upon the execution of
this Agreement and the issuance by the Company of certificates representing the
Shares issued in the names of WOLFSON. CEA II, Ltd.'s consent is also subject to
placement of legends on such newly issued stock certificates in the form as the
legends attached to the certificate or certificates representing the Shares
issued in the name of VLW Corp.
2. AGREEMENT TO BE BOUND. WOLFSON hereby reaffirms that he is bound by the terms
of the Proxy Agreement which remains in full force and effect and confirms that
those of the Shares to be issued to WOLFSON are subject to the Proxy Agreement
and the Proxy to be executed and delivered to CEA II, Ltd. by WOLFSON upon the
execution of this Agreement.
<PAGE>
3. RIGHTS UNDER PROXY AGREEMENT. Each of the parties hereto acknowledges and
agrees that WOLFSON is entitled to the rights granted under the Proxy Agreement
in favor of VLW (as defined therein), including without limitation the rights of
first refusal and tag-along rights applicable and running in favor of VLW
therein.
4. INCORPORATION BY REFERENCE. This Agreement is hereby incorporated by
reference into and made a part of the Proxy Agreement and all of its provisions,
as applicable, including without limitation notice and miscellaneous provisions,
shall apply to the interpretation and enforcement of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
/s/ LOUIS WOLFSON, III
----------------------
Louis Wolfson, III
CEA INVESTORS PARTNERSHIP II,
LTD.
By: CEA Investors, Inc.
General Partner
By: /s/ T.W. CARDY
------------------
Name: T.W. Cardy
Title: Vice President
<PAGE>
EXHIBIT A
IRREVOCABLE PROXY,
RIGHT OF REFUSAL AND TAG-ALONG AGREEMENT
BY AND AMONG
VENTURE LW CORPORATION
AND
LOUIS WOLFSON, III
AND
CEA INVESTORS PARTNERSHIP II, LTD.
DATED AS OF THE 27TH DAY OF AUGUST, 1993
<PAGE>
TABLE OF CONTENTS
BACKGROUND STATEMENT
SECTION 1 PAY-OFF OF PETERS NOTE
SECTION 2 IRREVOCABLE WAIVER OF
VJN PARTNERSHIP FIRST REFUSAL RIGHTS
2.1 Irrevocable Waiver
2.2 Confirmation of Waiver
SECTION 3 GRANT OF IRREVOCABLE PROXY; TERMS
3.1 Grant of Irrevocable Proxy
3.2 Irrevocability; Term of Proxy
3.3 Limited Power of Substitution;
Assignability
3.4 Confirming Documentation
SECTION 4 RIGHT OF FIRST REFUSAL
4.1 Right of First Refusal For Third Party
Offers
4.2 Right of First Refusal for Sales in
Registered Offerings
4.3 Right of First Refusal for Rule 144 Sales
During 1994
4.4 Right of First Refusal for Rule 144 Sales
During 1995 and Thereafter
4.5 Prohibition Against Encumbrances
4.6 CEA II, Ltd. Right to Designate
SECTION 5 TAG-ALONG RIGHTS
5.1 Right to Participate in Certain
Transactions Involving Company
Shares or the Company
5.2 Right to Participate in Certain
Transactions Involving StarNet/
CEA Interests
5.3 Rights with Respect to Registrations
<PAGE>
SECTION 6 GOING PRIVATE TRANSACTIONS
SECTION 7 EFFECTIVE DATE;
DEFERRED PROXY EFFECTIVE DATE
7.1 Effective Date
7.2 Deferred Proxy Effective Date
SECTION 8 DEFINITIONS
SECTION 9 LEGEND
9.1 Form
9.2 Procedures
SECTION 10 MISCELLANEOUS
10.1 Notice
10.2 Binding Effect; Benefits
10.3 Entire Agreement
10.4 Governing Law
10.5 Headings
10.6 Severability
10.7 Assignability
10.8 Arbitration
10.9 Remedies
10.10 Costs and Expenses
<PAGE>
IRREVOCABLE PROXY,
RIGHT OF REFUSAL AND TAG-ALONG AGREEMENT
AGREEMENT, dated as of the 27th day of August, 1993 by and between
VENTURE LW CORPORATION, a Florida corporation ("VLW Corp."), and LOUIS
WOLFSON III (herein referred to as the "Affiliated Stockholder") (VLW Corp. and
the Affiliated Stockholder are herein collectively referred to as "VLW"); and
CEA INVESTORS PARTNERSHIP II, LTD., a Florida limited partnership ("CEA
II, Ltd."), of which CEA Investors, Inc., a Florida corporation ("CEA
Investors") is the general partner.
BACKGROUND STATEMENT
WHEREAS, VLW Corp. is the beneficial owner of 1,417,453 shares of the
common stock, par value $.001 per share (the "VLW Corp. Shares") of Video
Jukebox Network, Inc., a Florida corporation (the "Company"). Affiliated
Stockholder is the beneficial owner of 310,194 shares of common stock, par value
$.001 per share (the "Affiliated Stockholder Shares") of the Company acquired or
to be acquired from New Vision Music, a Florida general partnership ("NVM").
The VLW Corp. Shares and the Affiliated Stockholder Shares are herein
collectively referred to as the "Existing VLW Shares");
WHEREAS, the VLW Corp. Shares are comprised of 834,120 shares of the
Company's common stock held directly of record by VLW Corp., and of 583,333
shares of the Company's common stock (the VLW Escrow Shares) beneficially owned,
but held of record by "VJN Partners", a dissolved Florida general partnership
(the "VJN Partnership"), and held in escrow by Hornsby & Whisenand, P.A.
("Escrow Agent") pursuant to that certain Stock Escrow Agreement, dated as of
June 3, 1988 (the "Escrow Agreement") between the VJN Partnership and Steven A.
Peters ("Peters"), which escrow arrangement relates to the purchase by VJN
Partnership of 3,500,000 shares of the Company's common stock from Peters,
payment for which was made by the VJN Partnership's payment of $2,000,000 and
delivery of its $1,175,000 promissory note payable to Peters (the "Peters
Note");
WHEREAS, pursuant to a Dissolution Agreement, dated as of December 7,
1992 (the "VJN Dissolution Agreement") among VLW Corp., CEA II, Ltd., NVM, and
Video Holdings Corporation, a Florida corporation ("VHC Corp."), as the then
partners of the VJN Partnership, such partners dissolved the VJN Partnership and
agreed that each of them (a) would have direct beneficial ownership of its
respective PRO RATA interest in the shares of the Company's common stock held
pursuant to the Escrow Agreement including the right to vote such shares; (b)
would be directly obligated for its respective PRO RATA shares of the Peters
Note obligation; and (c) would
<PAGE>
have rights of refusal, through December 7, 1993, as to the transfer or
assignment by any other former partner of the VJN Partnership of certain of the
Company's shares of common stock held by each such former partner, as
specifically provided in Section 13 of the Dissolution Agreement (which rights
as set forth therein are herein referred to as the "VJN Partnership First
Refusal Rights);
WHEREAS, CEA II, Ltd. is a substantial investor in the Company and
presently is the beneficial owner of 2,834,908 shares of the Company's common
stock (the "Existing CEA II, Ltd. Shares"); and J. Patrick Michaels, Jr.
("Michaels") has a financial interest in CEA II, Ltd. through his stock
ownership interest in CEA Investors;
WHEREAS, CEA II, Ltd. and StarNet Interactive Entertainment, Inc.
("StarNet") have formed a partnership known as "StarNet/CEA II Partners" (herein
referred to as "StarNet/CEA"), pursuant to a Partnership Agreement dated as of
August 24, 1993 (as amended and modified from time to time, the "StarNet/CEA
Partnership Agreement");
WHEREAS, CEA II, Ltd. intends to capitalize StarNet/CEA in part by the
transfer of the Existing CEA II, Ltd. Shares;
WHEREAS, StarNet/CEA and NVM have agreed to enter into an Agreement (the
"NVM/CEA Purchase Agreement"), pursuant to which, subject to certain conditions,
StarNet/CEA will purchase from NVM, and NVM will sell and transfer to
StarNet/CEA, up to 2,014,520 shares of the Company's common stock (the "NVM/CEA
Shares") for an aggregate purchase price of $1,611,616, or $.80 per share;
WHEREAS, Affiliated Stockholder and NVM have agreed to enter into an
Agreement (the "NVM/Wolfson Purchase Agreement"), pursuant to which, subject to
certain conditions, Affiliated Stockholder will purchase from NVM and NVM will
sell and transfer to Affiliated Stockholder, 310,194 shares of the Company's
common stock (the "NVM/Wolfson Shares"), for an aggregate purchase price of
$248,155.20, or $.80 per share;
WHEREAS, Andrew Blank, Mark Blank and Tony Blank (the "Blanks") and Bob
Puck and NVM have agreed to enter into agreements (the "NVM/Blank Purchase
Agreement"), pursuant to which, subject to certain conditions, Mark Blank,
Andrew Blank, Tony Blank and Bob Puck will each purchase from NVM and NVM will
sell and transfer to the Blanks and Bob Puck, an aggregate of 310,194 shares of
the Company's common stock (the "NVM/Blank Shares"), for an aggregate purchase
price of $248,155.20, or $.80 per share;
<PAGE>
WHEREAS, CEA II, Ltd., StarNet and the Company have entered into a Stock
and Note Purchase Agreement dated as of August 24, 1993 (the "Company Stock and
Note Purchase Agreement") pursuant to which, subject to certain conditions,
StarNet/CEA will invest up to $1,750,000 in the Company through the purchase
from the Company of (i) convertible promissory notes (the "Convertible Notes"),
convertible into shares of common stock of the Company (the "Converted Company
Shares"), and (ii) newly issued shares of the Company's authorized but unissued
common stock (the "Initial New Company Shares") (the Initial New Company Shares
and the Converted New Company shares are herein referred to as the "New Company
Shares");
WHEREAS, pursuant to the Company Stock and Note Purchase Agreement, the
Company will enter into (a) with StarNet/CEA, a Registration Rights Agreement
(the "Registration Rights Agreement") covering the New Company Shares; (b) with
StarNet and/or its affiliates, a Consulting Agreement, a Management Agreement
and a Service Agreement (the "StarNet Agreements"); and (c) with Communications
Equity Associates, Inc. ("CEA"), an affiliate of CEA II, Ltd., agreements as to
its domestic and international investment banking arrangements (the "CEA
Agreements"), all as more particularly specified in the Company Stock and Note
Purchase Agreement;
WHEREAS, in connection with the foregoing transactions and the other
transactions contemplated herein, each of NVM, CEA II, Ltd., VLW Corp. and VHC
Corp. have agreed to terminate and irrevocably and permanently waive the VJN
Partnership First Refusal Rights;
WHEREAS, in connection with the organization of StarNet/CEA, and the
entering into of the NVM/VHC Purchase Agreement, and the Company Stock and Note
Purchase Agreement, VHC Corp., Mark Blank, Andrew Blank, Tony Blank and Bob Puck
(all five parties herein collectively referred to as "VHC"), VHC and CEA II,
Ltd. have on the date hereof entered into an Irrevocable Proxy, Right of Refusal
and Tag-Along Agreement relating to the voting and disposition of the shares of
Common Stock of the Company acquired or to be acquired by VHC; and
WHEREAS, in connection with the organization of StarNet/CEA, and the
entering into of the NVM/Wolfson Purchase Agreement and the Company Stock and
Note Purchase Agreement, VLW, Affiliated Stockholder and CEA II, Ltd. have
agreed to enter into certain agreements relating to the voting and disposition
of the Existing VLW Shares and certain other shares acquired or to be acquired
by VLW or Affiliated Stockholder as set forth herein.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
SECTION 1. PAY-OFF OF PETERS NOTE. Prior to or concurrently with the
"Effective Date", as hereinafter defined, VLW Corp. shall pay its PRO RATA share
of the Peters Note obligation (provided that all of the other former partners of
the VJN Partnership pay their similar obligations) and use its best efforts (i)
to obtain the release of the VLW Escrow Shares from the escrow arrangement
relating to the purchase of such VLW Escrow Shares; and (ii) to obtain the
<PAGE>
release of the certificate representing the VLW Escrow Shares from the Escrow
Agent. CEA II, Ltd. shall pay its PRO RATA share of the Peters Note obligation
and will use its best efforts to obtain the release of the certificates
representing the shares beneficially owned by CEA II, Ltd. held by the Escrow
Agent.
SECTION 2. IRREVOCABLE WAIVER OF VJN PARTNERSHIP FIRST REFUSAL RIGHTS.
2.1 IRREVOCABLE WAIVER. Effective on the "Effective Date", as hereinafter
defined, VLW Corp. hereby irrevocably and permanently waives any and all rights
it has or may have under the VJN Partnership First Refusal Rights to purchase or
otherwise acquire any shares of the Company's common stock from any party under
any arrangement or agreement heretofore or hereafter entered into, including any
of the Existing CEA II, Ltd. Shares in connection with the proposed transfer
thereof to StarNet/CEA and the shares held by NVM in connection with the
transactions contemplated by the NVM/CEA Purchase Agreement, or the NVM/VHC
Purchase Agreement.
2.2 CONFIRMATION OF WAIVER
Subject to execution of this Agreement by all parties, VLW Corp. agrees
to enter into, or has entered into, a separate agreement with VHC, NVM and CEA
II, Ltd. confirming VLW's irrevocable waiver of its rights with respect to the
VJN Partnership First Refusal Rights on the terms set forth in Section 2.1.
SECTION 3. GRANT OF IRREVOCABLE PROXY; TERMS.
3.1 GRANT OF IRREVOCABLE PROXY. Effective upon the Effective Date as to
the 310,194 Affiliated Stockholder Shares and 689,806 of the VLW Corp. Shares
for an aggregate of one million (1,000,000) Existing VLW Shares, and effective
upon the "Deferred Proxy Effective Date" (as hereinafter defined) as to the
balance of the VLW Voting Shares (as hereinafter defined) (the "Deferred Proxy
Shares"), VLW hereby grants to CEA II, Ltd., with power of substitution as set
forth herein (CEA II, Ltd. and its permitted substitute in its capacity as
substitute being herein referred to as the "Proxy"), an irrevocable proxy with
respect to the Existing VLW Shares, and with respect to any other shares of the
Company's common stock hereafter acquired by VLW Corp. or Affiliated Stockholder
in respect of any of the Existing VLW Shares, including any capital stock of the
Company or subsidiaries or affiliated companies acquired by operation of law,
such as by merger, or consolidation or spin-off; or by reason of any stock
split, reclassification, share exchange or other reconstitution of the
outstanding capital stock of the Company (all of which shares, however acquired,
are herein referred to as the "VLW Voting Shares"), such proxy to specifically
extend to the following rights and authorizations:
(a) to attend any and all meetings of the stockholders of the
Company in the name, place and stead of VLW with respect to any or all of the
VLW Voting Shares, including the right to present such shares to be counted as
attending the meeting by proxy for purposes of
<PAGE>
establishing a quorum, or the right to withhold such Shares in whole or in part
from attendance at any such meeting;
(b) to cast such votes at any meeting of the stockholders and
any adjournment thereof as shall be entitled to be cast by the holders of the
VLW Voting Shares in such manner as the Proxy shall, in its sole discretion,
determine, or to withhold such Shares in whole or in part from voting at any
time or for any reason;
(c) to execute any documents required or advisable, in the sole
discretion of the Proxy, to be executed by the holder of the VLW Voting Shares,
including the call of any special meeting of the stockholders, waiver of notice
of any meeting of the stockholders, written consents of stockholders, whether
unanimous or otherwise, ballots, attendance records or any other similar
document; and
(d) to do any or all of the foregoing on behalf of the holder of
the VLW Voting Shares to the same effect as if such holder had taken such
actions directly, notwithstanding any actual or alleged conflict of interest on
the part of any holder of the VLW Voting Shares or of CEA II, Ltd. or the Proxy
or any of their respective affiliates. As used herein, the "holder of the VLW
Voting Shares" shall mean the record or beneficial holder of such shares, as the
case may be, or any other person, in each case who or which is the person
entitled or permitted to exercise the voting rights or other stockholder rights,
as applicable, with respect to the VLW Voting Shares involved.
3.2 IRREVOCABILITY; TERM OF PROXY.
(a) The proxy granted hereby shall be IRREVOCABLE during its
term. The term of this proxy shall be for a period commencing on the Effective
Date with respect to the one million (1,000,000) Existing VLW Shares identified
above in Section 3.1, and the "Deferred Proxy Effective Date" (as hereinafter
defined) with respect to the balance of the VLW Voting Shares, and ending on
June 30, 2003 unless on such date CEA II, Ltd. directly or through StarNet/CEA
or others, is the beneficial owner of twenty percent (20%) or more of the
outstanding voting stock of the Company, in which event the term shall extend
for such period until CEA II, Ltd. is the beneficial owner of less than twenty
percent (20%) of such outstanding voting stock (which period, as it may be
extended, is herein referred to as the "Term"), provided that the proxy shall
expire as to any of the VLW Voting Shares which are (i) acquired by CEA II,
Ltd., pursuant to the exercise of the Rights of Refusal granted pursuant to
Section 4 hereof, (ii) transferred to a third party pursuant to the exercise of
the Tag-Along Rights granted pursuant to Section 5 hereof, (iii) transferred to
a Third Party, as defined in Section 4.1, in a transaction in which CEA II, Ltd.
has been afforded the Rights of Refusal provided for in Section 4 hereof and has
not exercised such Rights, (iv) sold in a Proposed 1933 Act Sale in a
transaction in which CEA II, Ltd. has been afforded the Rights of Refusal
provided for in Section 4.2, 4.3 or 4.4, as applicable, and CEA II, Ltd. has not
exercised such Rights, (v) acquired by CEA II, Ltd., pursuant to the exercise of
the option granted pursuant to Section 6 hereof, or (vi) not subject to Rights
of Refusal under this Agreement as a result of paragraph (b) of this Section 3.2
or otherwise.
<PAGE>
(b) In addition, this proxy, and the Rights of Refusal (as
defined below) granted and the Tag-Along Rights (as set forth in Section 5)
provided to VLW pursuant to this Agreement shall terminate and shall be of no
further force and effect with respect to the number of VLW Voting Shares
determined by applying Section 3.2(b)(i), (ii) or (iii) (whichever is
applicable) below, in the event CEA II, Ltd. shall have exercised the Rights of
Refusal (as defined below) with respect to such VLW Voting Shares and shall have
failed to pay the purchase price in cash by cashiers check or wire transfer for
the then Offered VLW Shares or offered VLW 144 Shares on or prior to the date by
which payment is required under Section 4 (or as extended under this Section
3.2(b)); provided, however, VLW gives written notice ("Remedy Election Notice")
to CEA II, Ltd. of VLW's election to so terminate the proxy, all Rights of
Refusal and Tag-Along Rights with respect to such VLW Voting Shares no later
than five (5) business days following the latest date on which CEA II, Ltd. had
the opportunity to pay but failed to pay the purchase price. If VLW elects to so
terminate the proxy and such Rights, they shall terminate and shall be of no
further force and effect on the date on which the Remedy Election Notice is
delivered to CEA II, Ltd. pursuant to Section 10.1. VLW shall deliver, by the
same method as the Remedy Election Notice is delivered to CEA II, Ltd. under
Section 10.1, a copy of the Remedy Election Notice to the office of the Company.
Delivery of the copy shall be conclusive evidence that the proxy and Rights of
Refusal and Tag-Along Rights have been terminated as of the date of delivery to
CEA II, Ltd. VLW's election to terminate the proxy and Rights of Refusal and
Tag-Along Rights (collectively the "Rights") shall be in lieu of any other
remedy available to VLW under this Agreement for enforcement of breach of
contract by CEA II, Ltd. for such failure to pay the purchase price, which other
remedies (such as recovery of damages or injunctive relief for specific
performance) shall thereupon be deemed permanently and irrevocably waived as to
such which did not close due to CEA II, Ltd.'s failure to pay.
If VLW does not send a Remedy Election Notice it may sell the VLW Voting
Shares which had been subject to the exercised Rights of Refusal as if such
Rights of Refusal had not been exercised; provided that the period during which
such shares may be sold shall commence on the date following the latest date on
which CEA II, Ltd. had the opportunity to pay for the Offered VLW Shares or
Offered VLW 144 Shares without being in breach of this Agreement and failed to
make the payment. In addition, if VLW does not send a Remedy Election Notice VLW
may pursue all other remedies to which it is entitled at law or in equity.
In the event CEA II, Ltd. exercises Rights of Refusal and fails to pay
the purchase price due under Section 4.1, 4.2, 4.3 and 4.4 hereof with respect
to such exercise and VLW delivers a Remedy Election Notice when due then the
rights shall terminate with respect to the following number of Shares:
(i) If the purchase price payable is less than or equal to
$50,000, this proxy and such Rights of Refusal and
Tag-Along Rights shall terminate with respect to those VLW
Voting Shares which were the subject of the exercise of the
Rights of Refusal;
<PAGE>
(ii) If the purchase price is more than $50,000 and less than or
equal to $750,000, the proxy and such Rights shall
terminate with respect to a number of VLW Voting Shares
equal to the shares which were subject to the exercised
Rights of Refusal multiplied by two, provided CEA II, Ltd.
shall have been first afforded a period of 10 business days
(as opposed to 5 business days) to close the purchase of
such shares if the Rights of Refusal were exercised under
Section 4.3 or 4.4 hereof; or
(iii) If the purchase price is more than $750,000, the proxy and
such Rights shall terminate and expire with respect to all
of the VLW Voting Shares; provided, CEA II, Ltd. shall have
been first afforded a period of 20 business days (as
opposed to 5 business days) to close the purchase of such
shares if the Rights of Refusal were exercised under
Section 4.3 or 4.4 hereof.
3.3 LIMITED POWER OF SUBSTITUTION; ASSIGNABILITY.
(a) The proxy granted hereby may be exercised by CEA II, Ltd.,
acting through any person designated in writing by CEA Investors, provided that
CEA II, Ltd. or CEA Investors may designate a substitute Proxy, which
designation shall be limited to Michaels (but only so long as he is the Chief
Executive Officer or controlling stockholder of CEA),, the Trustee of the John
P. Michaels, Jr. Family Trust, or any other person who is the Chairman,
President or Chief Executive Officer of CEA or CEA Investors. In connection with
the exercise of the proxy, CEA II, Ltd. or any other Proxy may agree to exercise
its proxy rights in conjunction with one or more other Persons, including, but
not limited to StarNet/CEA or its partners.
(b) Notwithstanding the foregoing, in the event that StarNet/CEA
transfers shares of the Company's common stock to a single person or related
group (the "Major Block Transferee") in one transaction or a series of related
transactions within any six (6) month period amounting to more than twenty-five
percent (25%) of the then outstanding common stock of the Company (which
transaction or related series of transactions is herein referred to as a "Major
Block Transfer"), and in connection with such Major Block Transfer, VLW has been
afforded the benefit of the "Tag-Along Rights" set forth in Section 5 hereof,
and shall not have elected to exercise such Tag-Along Rights, then CEA II, Ltd.
may assign to the Major Block Transferee the irrevocable proxy rights granted
hereunder to the extent of that portion of the VLW Voting Shares which is equal
to the percentage which (x) the shares of the Company's common stock transferred
to the Major Block Transferee in the Major Block Transfer bears to (y) the total
outstanding shares of the Company's common stock held by StarNet/CEA immediately
prior to the first transaction which was a part of the Major Block Transfer. In
such event, the Major Block Transferee shall have full power of substitution
under the proxy and the proxy shall terminate on June 30, 2003.
3.4 CONFIRMING DOCUMENTATION. In order to facilitate the exercise of the
proxy granted hereby, VLW will, promptly upon the request of CEA II, Ltd.,
execute and deliver written confirmation of the grant of the proxy for the VLW
Voting Shares substantially in the form annexed hereto as Exhibit A.
<PAGE>
SECTION 4. RIGHT OF FIRST REFUSAL.
4.1 RIGHT OF FIRST REFUSAL FOR THIRD PARTY OFFERS. If, after the
Effective Date and prior to the expiration of the Term of the proxy (as defined
in Section 3.2), VLW shall have received a bona fide written offer (a "Third
Party Offer") from a Third Party to purchase any of the VLW Voting Shares (the
Shares subject to such offer being referred to as the "Offered VLW Shares") and
VLW desires to accept such Third Party Offer, VLW may accept such Third Party
Offer only after it has afforded CEA II, Ltd. the following rights of first
refusal (including the rights of first refusal set forth in Sections 4.2, 4.3
and 4.4 collectively herein referred to as the "Rights of Refusal") and complied
strictly with the below described procedure:
(a) VLW shall notify CEA II, Ltd. of its desire to sell the
Offered VLW Shares to a Third Party, the price and terms of the Third Party
Offer, and the identity of the Third Party.
(b) For a period of ten (10) business days after the date of
receipt of such notice, CEA II, Ltd. shall have the option to purchase the
Offered VLW Shares at the same price and on the same terms as the Third Party
Offer, such option to be exercised by written notice thereof given in compliance
with Section 10.1 of this Agreement.
(c) If at the end of such ten (10) business day period, CEA II,
Ltd. does not elect to exercise its right to first refusal pursuant to this
Section 4.1, VLW shall have a period of the longer of sixty (60) calendar days
or the number of days required to obtain regulatory approval, if any is
required, in which to sell to the Third Party all or part of the Offered VLW
Shares, at the price and on terms not less favorable to VLW as the terms set
forth in the Third Party Offer.
(d) If, at the end of such period, VLW has not completed the
sale of the Offered VLW Shares to a Third Party pursuant to the Third Party
Offer, all of the restrictions on the sale, transfer or assignment set forth in
this Section 4 shall again apply with respect to the Offered VLW Shares.
(e) If CEA II, Ltd. does exercise its option to acquire the
Offered VLW Shares, pursuant to Section 4.1(b), the closing of such purchase
shall take place at the principal office of the Company on a date specified by
CEA II, Ltd. within sixty (60) days after receipt of the Third Party Offer, at
which time VLW shall deliver the certificates representing the Offered VLW
Shares, together with stock powers executed in blank with signature guaranteed,
against payment of the purchase price as required by the Third Party Offer. Each
of the seller and purchaser in any such transaction shall be entitled to receive
such representations, warranties, certificates and other instruments as shall be
reasonably required by any other party.
(f) Any Third Party Offer shall be reduced to writing and signed
by the Third Party and shall state that such Third Party has or will have at the
closing of the purchase of the Offered VLW Shares, sufficient funds to
consummate such offer (giving reasonably satisfactory
<PAGE>
confirming evidence thereof), and a copy thereof shall be delivered to CEA II,
Ltd. pursuant to Section 10.1 hereof.
(g) A Third Party Offer shall not include the sale, transfer or
other disposition of any of the VLW Voting Shares, to an affiliate of VLW Corp.
or the Affiliated Stockholder, if the transferee ("VLW Transferee") agrees to
all of the terms of this Agreement including without limitation the execution
and delivery of confirming documentation under Section 3.4.
(h) Any sale or proposed sale through a registered public
offering or a proposed sale under Rule 144 promulgated under the Securities Act
of 1933, as amended (the "1933 Act") shall be subject to the Rights of Refusal
granted hereby (any such proposed sales being herein referred to as "Proposed
1933 Act Sales") as set forth and described in Section 4.2 and 4.3 below.
4.2 RIGHT OF FIRST REFUSAL FOR SALES IN REGISTERED OFFERINGS. In
connection with any Proposed 1933 Act Sales in a registered offering, the Rights
of Refusal shall apply to all VLW Voting Shares which the lead underwriter has
agreed to be included in the registration statement, when effective, all as
confirmed by such underwriter in writing to CEA II, Ltd. no later than five (5)
days prior to the proposed effective date of such registration statement. CEA
II, Ltd. shall have one (1) business day, following CEA II, Ltd.'s receipt of
such confirmation from the underwriter, to exercise such Rights of Refusal with
respect to some or all of the VLW Voting shares to be included, such right to be
exercised by written notice to VLW thereof delivered no later than one (1)
business day after the date on which it is sent. The closing of any such
purchase shall take place on the date of, and to be subject to the conditions
of, the closing of the sale of the shares of the Company common stock pursuant
to the registered offering at a price per share equal to the public offering
price per share of Company common stock sold in the registered offering subject
to such conditions, the parties shall close the purchase of the VLW Voting
Shares pursuant to paragraph (f) of Section 4.4.
4.3 RIGHT OF FIRST REFUSAL FOR RULE 144 SALES DURING 1994. In
connection with any Proposed 1933 Act Sales by VLW under Rule 144 during 1994:
(a) VLW will not sell any of the VLW Shares under Rule 144
before March 1, 1994.
(b) If VLW desires to sell shares under Rule 144 during 1994,
VLW shall deliver to CEA II, Ltd. Notice of such intent to sell (a "1994
Notice") as follows:
(i) on or before March 1, 1994 for its intended Rule 144 Sales
between March 1 and June 15, 1994.
(ii) on or before June 16, 1994 for its intended Rule 144 sales
between June 16 and September 30, 1944.
(iii) on or before October 1, 1994 for its intended Rule 144 sales
between October 1 and December 31, 1994.
<PAGE>
The above "1994 Notices" shall be effective ("1994 Notice Effective Date") as of
the first day of the period specified or on the first business day following the
day sent, if later. The 1994 Notices shall be effective for the persons
specified, and cover intended Rule 144 Sales during the periods specified in
4.3(b)(i), (ii) or (iii) (the "1994 Notice Period"). Each 1994 Notice shall
specify the number of VLW Shares VLW intends to sell (the "Offered VLW 144
Shares") and the minimum price ("Minimum Price") per share at which VLW would be
willing to sell such shares under Rule 144 during each respective 1994 Notice
Period.
(c) The maximum number ("Maximum Amount") of VLW Shares which
VLW may specify in any 1994 Notice or sell under Rule 144 in any such three
month period will be the greater of 1% of the outstanding shares of common stock
of the Company at the time the 1994 Notice is delivered or the average weekly
trading volume during the four calendar weeks preceding delivery of each
respective 1994 Notice subject to any other applicable limits under Rule 144.
(d) For a period of five (5) business days after the 1994 Notice
Effective Date of a 1994 Notice, CEA II, Ltd. may exercise its right of first
refusal ("Rights of Refusal" as previously defined) to purchase all or a part of
the Offered VLW 144 Shares at the Minimum Price per share such Right of Refusal
to be exercised by written notice thereof (the "Election Notice"), specifying
the number of shares to be purchased, delivered no later than one (1) business
day after the date on which it is sent in compliance with Section 10.1 of this
Agreement. If CEA II, Ltd. exercises such Right of Refusal it shall close the
purchase of the specified Offered VLW 144 Shares pursuant to paragraph (f) of
Section 4.4 within the number of business days specified in Section 3.2(b)(i),
(ii) or (iii) (as applicable based on the aggregate purchase price for each
respective purchase) following its delivery of its Election Notice.
(e) If at the end of such five (5) business day period, VLW has
not received an Election Notice from CEA II, Ltd. pursuant to this Section 4.3,
VLW shall have the balance of the applicable 1994 Notice Period following
delivery of any 1994 Notice to sell under Rule 144 up to but not exceeding the
Maximum Amount of Offered VLW 144 Shares at a price of at least the Minimum
Price per share.
(f) If, at the end of the applicable 1994 Notice Period, VLW has
not completed the sale of the Offered VLW 144 Shares under Rule 144, all of the
restrictions on the sale, transfer or assignment set forth in this Section 4
shall again apply with respect to any unsold Offered VLW 144 Shares.
(g) In the event VLW desires to sell any of such Offered VLW 144
Shares under Rule 144 during any applicable 1994 Notice Period at a price less
than the Minimum Price, then VLW shall first give CEA II, Ltd. notice of its
desire to sell such Offered VLW 144 Shares at such new minimum price. Such
notice will be treated as a 1994 Notice affording CEA II, Ltd. the Right of
Refusal to purchase all or part of such Offered VLW 144 Shares at such new
minimum price in accordance with the foregoing provisions. Once VLW has
delivered a 1994 Notice for a respective 1994 Notice Period, VLW shall be
afforded the opportunity to send a new 1994 Notice
<PAGE>
reflecting a reduced minimum price no more than two times during each applicable
1994 Notice Period.
4.4 RIGHT OF REFUSAL FOR RULE 144 SALES DURING 1995 and THEREAFTER. In
connection with any Proposed 1933 Act Sales by VLW under Rule 144 during 1995
and thereafter:
(a) During 1995 and thereafter VLW shall deliver written notice
(a "Post 1994 Notice") to CEA II, Ltd. no more frequently than on a monthly
basis of its desire to sell VLW Shares under Rule 144 during the thirty (30) day
period following delivery of the Post 1994 Notice, which Post 1994 Notice shall
specify the number of Offered VLW 144 Shares VLW intends to sell and the Minimum
Price per share at which VLW would be willing to sell such shares under Rule 144
during such thirty (30) day period.
(b) For a period of five (5) business days after the date of
receipt of the Post 1994 Notice, CEA II, Ltd. may exercise its Rights of Refusal
to purchase all or a part of the Offered VLW 144 Shares at the Minimum Price per
share, such Rights of Refusal to be exercised by written notice thereof (the
"Post 1994 Election Notice"), specifying the number of shares to be purchased,
delivered no later than one (1) business day after the date on which it is sent
in compliance with Section 10.1 of this Agreement. If CEA II, Ltd. exercises
such Rights of Refusal it shall close the purchase of the specified Offered VLW
144 Shares pursuant to paragraph (f) of this Section 4.4 within the number of
business days specified in Section 3.2(b)(i), (ii) and (iii) (as applicable
based on the aggregate purchase price for each respective purchase) following
its delivery of its Post 1994 Election Notice.
(c) If at the end of such five (5) business day period, VLw has
not received a Post 1994 Election Notice from CEA II, Ltd. pursuant to this
Section 4.4, VLW shall have a period of thirty (30) days from and after the
fifth business day following delivery of any Post 1994 Notice to sell under Rule
144 up to but not exceeding the number of Offered VLW 144 Shares specified in
such Post 1994 Notice at a price of at least the Minimum Price per share.
(d) In the event VLW desires to sell any of such Offered VLW 144
Shares under Rule 144 during any applicable 1994 Notice Period at a price less
than the Minimum Price, then VLW shall first give CEA II, Ltd. notice of its
desire to sell such Offered VLW 144 Shares at such new minimum price. Such
notice will be treated as a Post 1994 Notice affording CEA II, Ltd. Rights of
Refusal to purchase all or a part of such Offered VLW 144 Shares at such new
minimum price in accordance with the foregoing provisions. Once VLW has
delivered a Post 1994 Notice for a respective thirty (30) day period VLW shall
be affored the opportunity to send a new Post 1994 Notice reflecting a reduced
Minimum Price no more than two times during each applicable thirty (30) day
period.
(e) If, at the end of such thirty (30) day period from and after
the fifth business day following delivery of any Post 1994 Notice, VLW has not
completed the sale of any of the Offered VLW 144 Shares under Rule 144, all of
the restrictions on the sale, transfer or assignment set forth in this Section 4
shall again apply with respect to any unsold Offered VLW 144 Shares.
<PAGE>
(f) If CEA II, Ltd. does exercise its right to acquire any of
the VLW Voting Shares pursuant to Section 4.2 or 4.3 or 4.4, the closing of such
purchase shall take place at the principal office of the Company on a date
specified by CEA II, Ltd. no later than the date set forth for closing in
Section 4.2, 4.3 or 4.4, as the case may be. At which time VLW shall deliver the
certificates representing the VLW Voting Shares to be purchased, together with
stock powers executed in blank with signature guaranteed, against payment of the
purchase price in cash by cashier's check or wire transfer as required by this
Agreement. Each of the seller and purchaser in any such transaction shall be
entitled to receive such representations, warranties, certificates and other
instruments relating to the transaction as shall be reasonably requested by the
other party to the transaction.
4.5 PROHIBITION AGAINST ENCUMBRANCES. VLW shall have no right to pledge,
margin, hypothecate or otherwise encumber any of the VLW Shares, and any attempt
to do any of the foregoing shall be null and void.
4.6 CEA II, LTD. RIGHT TO DESIGNATE. CEA II, Ltd. may from time to time
designate any other Person or Persons, including StarNet/CEA, to exercise its
Rights of Refusal pursuant to Sections 4.1, 4.2, 4.3 and 4.4 hereof, which
designation shall be sufficient if in writing and delivered to VLW at the time
of and together with notice of the exercise of any such Rights of Refusal. In
such event, any notice to be given thereafter by VLW hereunder shall also be
given to such designated Person but only with respect to the particular
transaction. Initially, CEA II, Ltd. hereby designates StarNet/CEA to exercise
such Rights of Refusal and no additional written notice as to such designation
shall be required to be delivered to VLW with respect to such initial
designation.
4.7 COVENANT WITH RESPECT TO RULE 144 SALES. CEA II, Ltd. agrees it will
not sell or permit StarNet/CEA to sell any of its shares of common stock of the
Company under Rule 144 during 1994 to the extent aggregation of such sales will
be required with respect to sales by VLW of its shares under Rule 144.
SECTION 5. TAG-ALONG RIGHTS.
5.1 RIGHT TO PARTICIPATE IN CERTAIN TRANSACTIONS INVOLVING COMPANY
SHARES OR THE COMPANY.
(a) In the event that, after the Effective Date,
StarNet/CEA, StarNet or CEA II, Ltd. (to the extent any of them holds any shares
of the Company's common stock), (StarNet/CEA, StarNet and CEA, Ltd. even if only
one of them is involved, is herein referred to as a "Selling Group"):
(i) proposes to sell or transfer to any Person, other than
in a public offering of the Company's common stock
registered under the 1993 Act (provided such sale or
transfer affords VLW Tag-Along Rights under Section 5.2
herein), and other than to its or their respective
partners or Affiliates (as long as the
<PAGE>
transferee agrees in writing to the terms of this
Agreement), in a single transaction or series of
related transactions, shares of the Company's common
stock (other than a sale or transfer of shares of the
Company's common stock which when aggregated with all
prior sales by one or more members of the Selling Group
as to which Tag-Along Rights were not afforded to VLW
pursuant to this Section 5, does not exceed two percent
(2%) of the aggregate shares of common stock
outstanding, assuming no exercise of any outstanding
options to acquire, or the conversion of any
outstanding securities into, common stock of the
Company) as of the date of such proposed sale or
transfer (herein referred to as a "Sale Transaction");
or
(ii) participates in, or agrees with any one or more Persons
to participate in, any transaction which will result in
the merger of the Company with any other corporation,
or exchange of a majority of the outstanding common
stock of the Company (herein referred to as an
"Acquisition Transaction") the Sale Transaction and the
Acquisition Transaction shall be conditioned upon VLW
having the rights to participate in the transaction as
set forth herein; and CEA II, Ltd. and StarNet/CEA
shall, within a reasonable time prior to consummating
its or their participation in any such Sale Transaction
or Acquisition Transaction:
(x) afford and cause any other member of the Selling
Group to afford VLW the right to include in such
Sale Transaction or Acquisition Transaction up to
that percentage of the VLW Voting Shares then
owned by VLW and its Affiliates who have agreed
to the terms of this Agreement that is equal to
the percentage of the Selling Group's aggregate
beneficial holdings (measured by dispositive
power) of the Company's common stock proposed to
be sold or transferred in any Sale Transaction or
proposed to be covered by any Acquisition
Transaction, on the same terms and conditions as
the Company common stock proposed to be so sold
or transferred by the Selling Group;
(y) deliver written notice (the "Tag-Along Rights
Notice") and a copy of the definitive agreement
evidencing the Sale Transaction or the
Acquisition Transaction, as the case may be, to
VLW in accordance with Section 10.1 identifying
the terms and conditions of the proposed Sale
Transaction or Acquisition Transaction at least
twenty (20) days, if possible, prior to the date
of the closing of the proposed transaction; and
(z) advise VLW in the Tag Along Rights Notice of its
Tag Along Rights to so participate in the
proposed transaction.
<PAGE>
(b) If VLW desires to participate in a Sale Transaction or
Acquisition Transaction, VLW shall give written notice to CEA II, Ltd. of its
level of participation in such sale or transfer within ten (10) business days of
delivery of the Tag Along Rights Notice. If VLW elects to so participate, VLW
shall thereupon be included as a party to, and shall be required to comply at
its own cost with all the provisions of the pertinent purchase agreement (in the
case of the Sale Transaction) or merger or acquisition agreement (in the case of
an Acquisition Transaction), applicable to VLW Voting Shares to be included.
5.2 RIGHT TO PARTICIPATE IN CERTAIN TRANSACTIONS INVOLVING
STARNET/CEA INTERESTS.
(a) In the event that CEA II, Ltd. proposes to sell or transfer
to any Person, other than to its partners or Affiliates who have agreed to the
terms of this Agreement, any partnership interest in StarNet/CEA which when
aggregated with all prior sales or other transfers or dispositions by CEA II,
Ltd. as to which Tag Along Rights were not afforded to VLW pursuant to this
Section 5, does not exceed two percent (2%) of the total aggregate interests in
the profits or capital of StarNet/CEA as of the date of such proposed sale or
transfer (herein referred to as "CEA II, Ltd. Sale Transaction"), then CEA II,
Ltd. shall condition its participation in the CEA II, Ltd. Sale Transaction on
VLW receiving the Tag Along Rights set forth herein and shall, prior to
consummating its participation in such CEA II, Ltd. Sale Transaction:
(i) offer VLW the right to include in such CEA II, Ltd. Sale
Transaction that percentage of the VLW Voting Shares then
owned by VLW or its Affiliates that have agreed to the terms
of this Agreement that is equal to the percentage of the
partnership interest in StarNet/CEA held by CEA II, Ltd.
that CEA II, Ltd. proposes to sell in the CEA II, Ltd. Sale
Transaction, on the same terms and conditions as CEA II,
Ltd. proposes to sell its interest in StarNet/CEA (with the
VLW Voting Shares to be valued for such purpose either by
agreement of VLW Corp. and CEA II, Ltd. or failing such
agreement at the applicable purchase price per share based
on the number of shares represented by the partnership
interest proposed to be sold, as hereinafter defined);
(ii) give a Tag-Along Notice to VLW identifying the terms and
conditions of the proposed CEA II, Ltd. Sale Transaction at
least twenty (20) days prior to the date of closing thereof;
and
(iii) advise VLW in the Tag-Along Notice of its Tag-Along Rights
to participate in the proposed transaction.
(b) If VLW desires to participate in a CEA II, Ltd. Sale
Transaction, VLW shall give written notice to CEA II, Ltd. of its level of
participation in such sale or transfer within ten (10) business days of delivery
of the Tag-Along Rights Notice. If VLW elects to so participate, VLW shall
thereupon be included as a party to, and shall be required to comply at its own
cost with all the provisions of the CEA II, Ltd. Sale Transaction purchase
agreement applicable to VLW Voting Shares to be included.
<PAGE>
(c) In the event VLW, VHC or StarNet/CEA elect to exercise
contractual rights to participate in or purchase part of a proposed CEA II, Ltd.
Sale Transaction, the amount CEA II, Ltd. proposes to sell in the CEA II, Ltd.
Sale Transaction and accordingly, the amount VLW may include in such transaction
may be proportionately reduced.
5.3 RIGHTS WITH RESPECT TO REGISTRATIONS.
In the event that the Selling Group proposes to include any of its shares
of common stock of the Company for sale in a registration statement to be filed
by the Company under the 1993 Act:
(a) CEA II, Ltd. will deliver written notice to VLW of the
proposed inclusion of shares of common stock of the Company owned by the Selling
Group in such registration statement.
(b) Upon receipt of written notice from VLW delivered to CEA II,
Ltd. of VLW's election to include some of its shares in such registration
statement, CEA II, Ltd. will ask the Company to add VLW Voting Shares to the
registration statement, but only to the extent that the maximum number of VLW
Voting Shares so included shall not exceed the percentage (the "VLW Percentage")
of the total number of shares included in the registration statement which are
then owned by the Selling Group, VHC or VLW which percentage is equal to the
number of VLW Voting Shares then beneficially owned by VLW or any of its
Affiliates who have agreed to the terms of this Agreement (based on dispositive
power) divided by the total number of shares of the Company's common stock then
beneficially owned by the Selling Group, VLW or VHC or any of their partners or
Affiliates who have agreed to the terms of this Agreement (based on dispositive
power).
(c) In the event the Company will not permit VLW to add its
shares to the registration statement as described in Section 5.3(b) above, or in
the event, at any time, the underwriter or underwriting group requires a
decrease in the aggregate number of shares held by shareholders to be included
in any registration statement, then CEA II, Ltd. shall cause Selling Group to
reduce, and Selling Group shall reduce the number of shares it proposes to
include in the registration statement to permit VLW to include a number of
shares (also reduced) in the registration statement but only to the extent that
the maximum number of VLW Voting Shares so included shall not exceed the VLW
Percentage of the shares to be included by the Selling Group, VLW, or VHC or any
of its Affiliates who have agreed to the terms of this Agreement.
SECTION 6. GOING PRIVATE TRANSACTIONS. In the event the Company,
StarNet/CEA, any of its partners or Affiliates who have agreed to the terms of
this Agreement or a third party proposes (i) to make a tender offer for less
than all shares of the Company's common stock or (ii) to initiate any other
transaction or series of transactions or action, such tender offer, transaction
or action shall be referred to as the "Going Private Transaction." (For purposes
of this agreement a merger reorganization consolidation or share exchange
between the Company or its shareholders and a company resulting in ownership by
the Company's shareholders of publicly traaded shares shall not be treated as or
deemed a "Going Private Transaction.") If after any such
<PAGE>
Going Private Transaction the Company's shares of common stock would not be
listed or otherwise registered with the Securities and Exchange Commission, any
stock exchange or Nasdaq (Nasdaq/NMS; Nasdaq; the Nasdaq bulletin board or the
pink sheets) and as a result the use of Rule 144 under the 1933 Act would not be
available for the sale of their respective securities by VLW Corp. or the
Affiliated Stockholder, then StarNet/CEA will not vote its shares of Company
common stock or, to the extent StarNet/CEA can control the decision through its
representatives on the Board of Directors, permit the Company or such parties to
approve and to close such parties to approve and to close such a Going Private
Transaction unless: StarNet/CEA or CEA II, Ltd. shall first, at its option, make
an offer or cause a third party to make an offer to VLW to purchase ("Going
Private Option Purchase") all of the then issued and outstanding VLW Voting
Shares then subject to this proxy at a purchase price equal to the lower of:
(i) the following prices during the three periods
indicated:
(A) $2.00 per share if the purchase and sale is closed
on or before December 31, 1994;
(B) $2.50 per share if the purchase and sale is closed
in 1995;
(C) $3.00 per share if the purchase and sale is closed
in 1996, 1997 or 1998; or
(ii) the price per share offered and paid to shareholders
who sell their shares in the Going Private Transaction.
(b) VLW shall have the right to accept or reject the Going
Private Option Purchase offer. The closing of the Going Private Option Purchase
shall be conditioned on and subject to the closing of the Going Private
Transaction. The closing of the purchase shall take place on the date of the
closing of the Going Private Transaction in the same manner as sales of shares
under the provisions of Section 4.4(f) of this Agreement.
(c) So long as the Going Private Option Purchase offer is made
and rejected or, if accepted, such sale is closed, then the Going Private
Transaction may proceed.
SECTION 7. EFFECTIVE DATE: DEFERRED PROXY EFFECTIVE DATE.
7.1 EFFECTIVE DATE. The effective date (the "Effective Date") for
the following transactions contemplated by this Agreement:
(a) The irrevocable waiver and termination of the VJN Partnership
First Refusal Rights as provided in Section 2.1;
(b) The grant of the irrevocable proxy as to One Million (1,000,000)
VLW Voting Shares as provided in Section 3.1;
<PAGE>
(c) The grant of the Rights of Refusal as provided in Section 4.1,
4.2, 4.3 and 4.4; and
(d) The grant and availability of the Tag-Along Rights as provided in
Sections 5.1, 5.2 and 5.3, shall be that date, on or before September 15, 1993,
which is specified by written notice (the "Effective Date Notice") from CEA II,
Ltd. to VLW Corp., provided that the following events (the "Conditions
Precedent") shall have occurred on or prior to such date:
(i) StarNet and CEA shall have entered into the StarNet/CEA
Partnership Agreement and each of them shall have made the contributions
to the capital of StarNet/CEA provided for therein;
(ii) StarNet/CEA shall have entered into the NVM/CEA Purchase
Agreement with NVM, and the transactions contemplated thereby shall have
been consummated;
(iii) Affiliated Stockholder shall have entered into the
NVM/Wolfson Purchase Agreement with NVM, and the transactions
contemplated thereby shall have been consummated;
(iv) Each of the Blanks and Bob Puck shall have entered into the
NVM/Blank Purchase Agreement with NVM, and the transactions contemplated
thereby shall have been consummated;
(v) NVM, VLW Corp., VHC and CEA II, Ltd. shall have paid their
respective obligations under the Peters Note, and all shares of the
Company's common stock held pursuant to the Escrow Agreement shall have
been released to an authorized representative of the former partners of
the VJN Partnership or such representative's counsel; and
(vi) StarNet/CEA and the Company shall have entered into the
Company Stock and Note Purchase Agreement and all transactions
contemplated thereby, including the issuance of the New Company Shares
and the New Company Convertible Notes, and the execution and delivery of
the Registration Rights Agreement, the StarNet Agreements and the CEA
Agreements, shall have been consummated to the extent contemplated
therein to be consummated on the Closing Date, as defined therein. If the
Effective Date does not occur on or before September 15, 1993, then this
Agreement shall terminate upon written notice from either VLW Corp. to
CEA II, Ltd. or from CEA II, Ltd. to VLW Corp., and no party shall have
any obligation hereunder.
7.2 DEFERRED PROXY EFFECTIVE DATE. The effective date for the grant of
the proxy under Section 3.1 as to the Deferred Proxy Shares (the "Deferred Proxy
Effective Date") shall be that date, on or before the first anniversary of the
Effective Date, as specified by written notice from CEA II, Ltd. to VLW Corp.
which date shall be on or after the date on which either (a) the Federal
Communications Commission ("FCC") shall have granted approval to the change of
control of the Company contemplated by the Stock and Note Purchase Agreement,
and the grant of proxy rights to CEA II, Ltd. pursuant to this Agreement and a
similar agreement with VHC
<PAGE>
(the "Change of Control Transactions") and such grant of approval shall have
become final and non-appealable, or (b) the Company shall have effectuated the
disposition of its operations subject to licensing and regulation by the FCC,
and no FCC approval of the Change of Control Transactions is required. If the
Deferred Proxy Effective Date shall not have occurred on or before the first
anniversary of the Effective Date, then, upon written notice from VLW Corp. to
CEA II, Ltd., CEA II, Ltd. shall have no further rights under this Agreement
with respect to the Deferred Proxy Shares, but such Deferred Proxy Shares shall
remain subject to the Rights of Refusal set forth in Section 4 hereof and
entitled to the benefits of the Tag-Along Rights set forth in Section 5 hereof.
VLW shall cooperate with CEA II, Ltd., StarNet/CEA and the Company in connection
with all applications for FCC approval of the Change of Control Transactions.
SECTION 8. DEFINITIONS. As used herein, the following terms shall have
the definitions set forth:
"Affiliate" as to any Person shall mean any other Person controlled by,
under common control with or controlling such Person.
"Tag-Along Rights" shall mean the rights granted pursuant to Section 5 of
this Agreement.
"Person" shall mean an individual, partnership, joint venture,
corporation, trust, limited liability company or a government or any department,
subdivision or agency thereof.
"Rights of Refusal" shall mean the rights granted pursuant to Section 4
of this Agreement.
"Third Party" in any proposed arrangement shall mean any Person who is
not an Affiliate of any Person entering into the arrangement.
"VLW Shares" shall mean any VLW Voting Shares owned beneficially by VLW
Corp., the Affiliated Stockholder or VLW Transferees.
SECTION 9. LEGEND.
9.1 FORM. Each certificate evidencing the Existing VLW Shares or
representing any other VLW Voting Shares, and each certificate issued in
exchange for or upon the transfer of any such Shares during the term of this
Agreement shall be stamped or otherwise imprinted with a legend in substantially
the following form:
The securities represented by this certificate are subject to
(a) an agreement as to the exercise of voting rights, and (b)
certain restrictions on transfer (including certain restrictions
on pledging, granting a security interest in, or otherwise
encumbering such securities), as set forth in an Irrevocable
Proxy, Right of Refusal and Tag-Along Agreement dated as of
August 27, 1993, between Venture LW Corporation, Louis Wolfson
III and CEA Investors Partnership II, Ltd. A copy of such
Agreement will be furnished without charge by the registered
holder of this certificate upon written request.
<PAGE>
9.2 PROCEDURES. On the Effective Date, VLW shall produce the certificates
representing the Existing VLW Shares and the shares purchased under the NWM/VLW
purchase Agreement so that the legend set forth above may be added to such
certificates. In addition, VLW shall assure that each certificate for any VLW
Shares acquired by VLW Corp. or the Affiliated Stockholder in the future in
respect of the Existing VLW Shares is stamped or imprinted with the legend set
forth above, and appropriate evidence thereof provided to CEA II, Ltd.
SECTION 10. MISCELLANEOUS.
10.1 NOTICE. (a) Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given if personally delivered, delivered by
facsimile telephone transmission, delivered by express delivery service (such as
Federal Express), or mailed first class U.S. mail (unless delivery is required
in less than three days), postage prepaid, addressed as follows:
If to Venture LW Corporation or Affiliated Stockholder:
Venture LW Corporation
9350 South Dixie Highway
Miami, FL 33156
Attn: Louis Wolfson, III
Fax: 305-670-2212
with a copy to:
Steel Hector & Davis
200 South Biscayne Blvd.
Miami, FL 33131-2398
Attn: Sheila A. Halpern, P.A.
Fax: 305-358-1418
If to CEA Investors Partnership II, Ltd.:
CEA Investors Partnership II, Ltd.
c/o Communications Equity Associates, Inc.
101 East Kennedy Blvd., Suite 3300
Tampa, FL 33602
Attn: Thomas W. Cardy
Fax: 813-225-1513
with a copy to:
Edwards & Angell
250 Royal Palm Way
<PAGE>
Palm Beach, Florida 33480
Attention: Jonathan E. Cole
Fax No.: 407-655-8719
and
StarNet/CEA II Partners
c/o StarNet Interactive Entertainment, Inc.
1332 Enterprise Drive
Suite 200
West Chester, PA 19380
Attention: Alan McGlade
Fax No.: 215-692-6487
(or to such other address as any party shall specify by written notice so
given), and shall be deemed to have been delivered as of the date so delivered
or three (3) days after mailing.
(b) VLW Corp. shall act as the representative of VLW and VLW
Transferees and VLW Corp. shall deliver any notice or elections or consents
under this Agreement, from VLW Corp., Affiliated Stockholder and VLW
Transferees, such that only one notice, election or consent reflecting the
combined instructions or directions of all such parties shall be delivered to or
by VLW Corp. on behalf of all such parties. CEA II, Ltd. shall not be
responsible for allocating, coordinating or apportioning any of the rights of
VLW or VLW Transferees under this Agreement. [Any notice as to the Rights of
Refusal, Offered VLW Shares and Offered VLW 144 Sales shall specify only one
price per share per notice.]
10.2 BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective permitted
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators or assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
10.3 ENTIRE AGREEMENT. This Agreement constitutes the final written
expression of all of the agreements between the parties with respect to the
subject matter hereof, supersedes all understandings and negotiations concerning
the matters specified herein. No addition to or modification of any provision of
this Agreement shall be binding upon any party unless made in writing and signed
by all parties.
10.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida as such laws are applied by
Florida courts to agreements entered into and to be performed in Florida by and
between residents of Florida.
<PAGE>
10.5 HEADINGS. Headings of the Sections of this Agreement are for the
convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
10.6 SEVERABILITY. If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid as applied to any particular case or in all cases, such
circumstances shall not have the effect of rendering such provision invalid in
any other case or of rendering any of the other provisions of this Agreement
inoperative, unenforceable or invalid.
10.7 ASSIGNABILITY. Except as specifically provided herein, neither this
Agreement nor any of the parties' rights hereunder shall be assignable by any
party hereto without the prior written consent of the other parties hereto.
10.8 ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or its breach which is not settled between the parties, shall be
settled by arbitration in accordance with the then governing rules of the
American Arbitration Association, with proceedings to take place in Miami,
Florida. Judgment upon any arbitration award may be entered and enforced in any
court of competent jurisdiction. An arbitration award may cover all costs, legal
fees and other charges reasonably incurred by the prevailing party in such
proceedings.
10.9 REMEDIES. Subject to the election and waiver of remedies under
Section 3.2(b) the parties hereto shall be entitled to enforce their rights
under this Agreement specifically, to recover damages by reason of any breach of
any provision hereof, and to exercise all other rights existing in their favor.
VLW and CEA II, Ltd. agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that
either of them may apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief in order to enforce or prevent
any violation of the provisions of this Agreement, notwithstanding the
provisions hereof requiring arbitration of other controversies or claims
hereunder.
10.10 COSTS AND EXPENSES. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of a dispute or
alleged breach or default in connection with any of the provisions of this
Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorney's fees, expenses, and other costs incurred in that action or
proceeding, at both trial and appellate levels.
Balance of This Page
Intentionally Left Blank
IN WITNESS WHEREOF, this Irrevocable Proxy, Right of Refusal and
Tag-Along Agreement has been executed as of the day and year first above
written.
<PAGE>
VENTURE LW CORPORATION
By: /s/ LOUIS WOLFSON, III
--------------------------------
Name: Louis Wolfson, III
Title: President
--------------------------------
/s/ LOUIS WOLFSON, III
--------------------------------
Louis Wolfson, III, individually
CEA INVESTORS PARTNERSHIP II, LTD.
By: CEA Investors, Inc.,
general partner
By: /s/ T.W. CARDY
--------------------------------
Thomas W. Cardy,
Title: Vice President
-------------------------
The undersigned hereby acknowledges and agrees to be bound by the provisions of
Section 5 and Section 6 of this Agreement and any other reference to it in the
Agreement.
STARNET/CEA II Partners
a Delaware general partnership
By: CEA INVESTORS PARTNERSHIP II,
LTD., general partner
By: CEA INVESTORS, INC. its
general partner
By: /s/ T.W. CARDY
--------------------------------
Thomas W. Cardy,
Title: Vice President
--------------------------
<PAGE>
By: STARNET INTERACTIVE
ENTERTAINMENT, INC.
By: /s/ ALAN McGLADE
-------------------------
Name: Alan McGlade
-----------------------
Title: President
----------------------
<PAGE>
EXHIBIT A
IRREVOCABLE PROXY
The undersigned stockholder of Video Jukebox Network, Inc., a Florida
corporation (the "Company"), hereby irrevocably appoints ___________________
_______________ (the "Proxy"), a designee of CEA Investors
Partnership II, Ltd., a limited partnership organized under the State of
Florida, the attorney and proxy of the undersigned, with full power of
substitution, to vote in such manner as each such attorney and proxy of his
substitute shall in his sole discretion deem proper, and otherwise to act with
respect to all the shares of Common Stock, par value $.001 per share, of the
Company (the "Common Stock") which are (a) owned of record by the undersigned,
(b) beneficially owned by the undersigned where the record owner thereof has
agreed to, or is required to, permit the undersigned to exercise any voting or
other stockholder rights, with respect to such shares, or (c) subject to a proxy
in favor of the undersigned which permits the undersigned to designate another
person or substitute to exercise such proxy rights (collectively, the "Voting
Shares"). The attorney and proxy so appointed and designated is specifically
granted the rights and authorizations:
(a) to attend any and all meetings of the stockholders of the
Company in the name, place and stead of the undersigned with respect to any or
all of the Voting Shares, including the right to present such shares to be
counted as attending the meeting by proxy for purposes of establishing a quorum,
or the right to withhold such Shares in whole or in part from attendance at any
such meeting;
(b) to cast such votes at any meeting of the stockholders and
any adjournment thereof as shall be entitled to be cast by the holders of the
Voting Shares in such manner as the Proxy shall, in its sole discretion,
determine, or to withhold such Shares in whole or in part from voting at any
time or for any reason;
(c) to execute any documents required or advisable, in the sole
discretion of the Proxy, to be executed by the holder of the Voting Shares,
including the call of any special meeting of the stockholders, waiver of notice
of any meeting of the stockholders, written consents of stockholders, whether
unanimous or otherwise, ballots, attendance records or any other similar
document; and
(d) to do any or all of the foregoing on behalf of the holder of
the Voting Shares to the same effect as if such holder had taken such actions
directly, notwithstanding any actual or alleged conflict of interest on the part
of any holder of the Voting Shares or of CEA II, Ltd. or the Proxy or any of
their respective affiliates. As used herein, the "holder of the Voting Shares"
shall mean the record or beneficial holder of such shares, as the case may be,
or any other person, in each case who or which is the person entitled or
permitted to exercise the voting rights or other stockholder rights, as
applicable, with respect to the Voting Shares involved.
<PAGE>
This Irrevocable Proxy is subject to all the terms and conditions of that
certain Irrevocable Proxy, Right of Refusal and Tag-Along Agreement between the
undersigned and CEA Investors Partnership II, Ltd., dated as of August 27, 1993
(the "Agreement"), and shall terminate in accordance with that document. The
terms and conditions of the Agreement shall be binding on the Proxy, its
successors and permitted assigns.
The officer or representative of the undersigned executing this instrument
certifies that he/she is authorized to execute this instrument on behalf of the
undersigned stockholder of the Company, and will provide evidence of such
authorization upon request.
Dated:
--------------------
VENTURE LW CORPORATION
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
-----------------------------------
Louis Wolfson, III
<PAGE>
IRREVOCABLE PROXY
The undersigned stockholder of VIDEO JUKEBOX NETWORK, INC., a Florida
corporation (the "Company"), hereby irrevocably appoints _____________________
(the "Proxy"), a designee of CEA Investors Partnership II, Ltd., a limited
partnership organized under the laws of the State of Florida, the attorney and
proxy of the undersigned, with full power of substitution, to the extent
permitted under the Agreement (defined herein), to vote in such manner as each
such attorney and proxy of his substitute shall in his sole discretion deem
proper, and otherwise to act with respect to the 697,067 shares of Common Stock,
par value $.001 per share, of the Company (the "Common Stock") which are (a)
owned of record by the undersigned, or (b) beneficially owned by the undersigned
and held of record by VJN Partners, a dissolved Florida general partnership, and
with respect to any other shares of the Company's Common Stock hereafter
acquired by the undersigned in respect of any of such shares, including any
capital stock of the Company or subsidiaries or affiliated companies acquired by
operation of law, such as by merger, or consolidation or spin-off; or by reason
of any stock split, reclassification, share exchange or other reconstitution of
the outstanding capital stock of the Company (all of which shares, however
acquired, are herein referred to as the "Voting Shares"). The attorney and proxy
so appointed and designated is specifically granted the rights and
authorizations:
(a) To attend any and all meetings of the stockholders of the Company
in the name, place and stead of the undersigned with respect to any or all of
the Voting Shares, including the right to present such shares to be counted as
attending the meeting by proxy for purposes of establishing a quorum, or the
right to withhold such Shares in whole or in part from attendance at any such
meeting;
(b) To cast such votes at any meeting of the stockholders and any
adjournment thereof as shall be entitled to be cast by the holders of the Voting
Shares in such manner as the Proxy shall, in its sole discretion, determine, or
to withhold such Shares in whole or in part from voting at any time or for any
reason;
(c) To execute any documents required or advisable, in the sole
discretion of the Proxy, to be executed by the holder of the Voting Shares,
including the call of any special meeting of the stockholders, waiver of notice
of any meeting of the stockholders, written consents of stockholders, whether
unanimous or otherwise, ballots, attendance records or any other similar
document; and
(d) To do any or all of the foregoing on behalf of the holder of the
Voting Shares to the same effect as if such holder had taken such actions
directly, notwithstanding any actual or alleged conflict of interest on the part
of any holder of the Voting Shares or of CEA Investors
<PAGE>
Partnership II, Ltd. or the Proxy of any of their respective affiliates. As used
herein, the "holder of the Voting Shares" shall mean the record or beneficial
holder of such shares, as the case may be, or any other person, in each case who
or which is the person entitled or permitted to exercise the voting rights or
other stockholder rights as described above, with respect to the Voting Shares
involved.
This Irrevocable Proxy is subject to all the terms and conditions of
that certain Irrevocable Proxy, Right of Refusal and Tag-Along Agreement between
the undersigned and CEA Investors Partnership II, Ltd., dated as of August 27,
1993 (the "Agreement"), and shall terminate in accordance with that document.
The terms and conditions of the Agreement shall be binding on the Proxy, its
successors and permitted assigns.
Date executed:
------------------------
/s/ LOUIS WOLFSON
---------------------------------
Louis Wolfson, III
EXHIBIT 99.2
AGREEMENT TO BE BOUND BY
IRREVOCABLE PROXY,
RIGHT OF REFUSAL AND TAG-ALONG AGREEMENT
between
LOUIS WOLFSON, III,
LYNN R. WOLFSON
and
CEA INVESTORS PARTNERSHIP II, LTD.
Dated as of the 19th day of October, 1995
<PAGE>
AGREEMENT TO BE BOUND BY IRREVOCABLE PROXY, RIGHT OF REFUSAL AND
TAG-ALONG AGREEMENT
AGREEMENT, dated as of the 19th day of October, 1995 by and between
LOUIS WOLFSON, III (herein referred to as L. WOLFSON or the "Affiliated
Stockholder") and LYNN R. WOLFSON (herein referred to as L. R. WOLFSON)
(collectively, referred to herein as WOLFSON or WOLFSONS); and
CEA INVESTORS PARTNERSHIP II, LTD., a Florida limited partnership ("CEA
II, Ltd."), of which CEA Investors, Inc., a Florida corporation ("CEA
Investors") is the general partner.
WHEREAS, L. WOLFSON, Venture LW Corporation ("VLW Corp.") and CEA II,
Ltd. are parties to an Irrevocable Proxy, Right of Refusal and Tag-Along
Agreement dated as of August 27, 1993 (the "Proxy Agreement") a copy of which is
attached hereto as Exhibit A;
WHEREAS, in connection with the dissolution of VLW Corp., VLW Corp.
intends to distribute 312,894 shares of the common stock of Video Jukebox
Network, Inc. (the "Company") to L. WOLFSON and 327,492 shares of common stock
of the Company to L.R. WOLFSON (collectively the "Shares");
WHEREAS, such shares and any proposed transfer of such shares are
subject to certain restrictions on transfer under the terms of the Proxy
Agreement and to an irrevocable proxy executed by VLW Corp. in favor of CEA II,
Ltd.; and
WHEREAS, the WOLFSONS are willing to agree to be bound by the terms of
the Proxy Agreement with respect to the Shares.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein
and in the Proxy Agreement, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
1. CONSENT. CEA II, Ltd. hereby acknowledges and consents to the transfer of the
Shares from VLW Corp. to the WOLFSONS in the amount specified above subject to
the WOLFSONS execution of this Agreement and their delivery to CEA II, Ltd. of
documentation confirming their grant of the proxy for such Shares in the form of
the proxy attached as Exhibit A to the Proxy Agreement upon the execution of
this Agreement and the issuance by the Company of certificates representing the
Shares issued in the names of the WOLFSONS. CEA II, Ltd.'s consent is also
subject to placement of legends on such newly issued stock certificates in the
form as the legends attached to the certificate or certificates representing the
Shares issued in the name of VLW Corp.
<PAGE>
2. AGREEMENT TO BE BOUND. L. WOLFSON hereby reaffirms that he is bound by the
terms of the Proxy Agreement which remains in full force and effect and confirms
that those of the Shares to be issued to L. WOLFSON are subject to the Proxy
Agreement and the Proxy to be executed and delivered to CEA II, Ltd. by L.
WOLFSON upon the execution of this Agreement.
L.R. WOLFSON hereby confirms that she agrees to be and shall hereby be bound by
the terms of the Proxy Agreement and confirms that those Shares to be issued to
L.R. WOLFSON are subject to the Proxy Agreement and the Proxy to be executed and
delivered to CEA II, Ltd. upon execution of this Agreement. L.R. WOLFSON further
agrees, pursuant to Section 10.1(b) of the Proxy Agreement, that L. WOLFSON
shall act as her representative for the purposes described in Section 10.1(b).
3. RIGHTS UNDER PROXY AGREEMENT. Each of the parties hereto acknowledges and
agrees that the WOLFSONS are entitled to the rights granted under the Proxy
Agreement in favor of VLW (as defined therein), including without limitation the
rights of first refusal and tag-along rights applicable and running in favor of
VLW therein.
4. INCORPORATION BY REFERENCE. This Agreement is hereby incorporated by
reference into and made a part of the Proxy Agreement and all of its provisions,
as applicable, including without limitation notice and miscellaneous provisions,
shall apply to the interpretation and enforcement of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
/s/ LOUIS WOLFSON, III
---------------------------------
Louis Wolfson, III
/s/ LYNN R. WOLFSON
---------------------------------
Lynn R Wolfson, III
CEA INVESTORS PARTNERSHIP II,
LTD.
By: CEA Investors, Inc.
General Partner
By: /s/ T.W. CARDY
--------------------------
Name: T.W. Cardy
Title: Vice President
<PAGE>
EXHIBIT A
IRREVOCABLE PROXY,
RIGHT OF REFUSAL AND TAG-ALONG AGREEMENT
BY AND AMONG
VENTURE LW CORPORATION
AND
LOUIS WOLFSON, III
AND
CEA INVESTORS PARTNERSHIP II, LTD.
DATED AS OF THE 27TH DAY OF AUGUST, 1993
<PAGE>
TABLE OF CONTENTS
BACKGROUND STATEMENT
SECTION 1 PAY-OFF OF PETERS NOTE
SECTION 2 IRREVOCABLE WAIVER OF
VJN PARTNERSHIP FIRST REFUSAL RIGHTS
2.1 Irrevocable Waiver
2.2 Confirmation of Waiver
SECTION 3 GRANT OF IRREVOCABLE PROXY; TERMS
3.1 Grant of Irrevocable Proxy
3.2 Irrevocability; Term of Proxy
3.3 Limited Power of Substitution;
Assignability
3.4 Confirming Documentation
SECTION 4 RIGHT OF FIRST REFUSAL
4.1 Right of First Refusal For Third Party
Offers
4.2 Right of First Refusal for Sales in
Registered Offerings
4.3 Right of First Refusal for Rule 144 Sales
During 1994
4.4 Right of First Refusal for Rule 144 Sales
During 1995 and Thereafter
4.5 Prohibition Against Encumbrances
4.6 CEA II, Ltd. Right to Designate
SECTION 5 TAG-ALONG RIGHTS
5.1 Right to Participate in Certain
Transactions Involving Company
Shares or the Company
5.2 Right to Participate in Certain
Transactions Involving StarNet/
CEA Interests
5.3 Rights with Respect to Registrations
<PAGE>
SECTION 6 GOING PRIVATE TRANSACTIONS
SECTION 7 EFFECTIVE DATE;
DEFERRED PROXY EFFECTIVE DATE
7.1 Effective Date
7.2 Deferred Proxy Effective Date
SECTION 8 DEFINITIONS
SECTION 9 LEGEND
9.1 Form
9.2 Procedures
SECTION 10 MISCELLANEOUS
10.1 Notice
10.2 Binding Effect; Benefits
10.3 Entire Agreement
10.4 Governing Law
10.5 Headings
10.6 Severability
10.7 Assignability
10.8 Arbitration
10.9 Remedies
10.10 Costs and Expenses
<PAGE>
IRREVOCABLE PROXY,
RIGHT OF REFUSAL AND TAG-ALONG AGREEMENT
AGREEMENT, dated as of the 27th day of August, 1993 by and between
VENTURE LW CORPORATION, a Florida corporation ("VLW Corp."), and LOUIS
WOLFSON III (herein referred to as the "Affiliated Stockholder") (VLW Corp. and
the Affiliated Stockholder are herein collectively referred to as "VLW"); and
CEA INVESTORS PARTNERSHIP II, LTD., a Florida limited partnership ("CEA
II, Ltd."), of which CEA Investors, Inc., a Florida corporation ("CEA
Investors") is the general partner.
BACKGROUND STATEMENT
WHEREAS, VLW Corp. is the beneficial owner of 1,417,453 shares of the
common stock, par value $.001 per share (the "VLW Corp. Shares") of Video
Jukebox Network, Inc., a Florida corporation (the "Company"). Affiliated
Stockholder is the beneficial owner of 310,194 shares of common stock, par value
$.001 per share (the "Affiliated Stockholder Shares") of the Company acquired or
to be acquired from New Vision Music, a Florida general partnership ("NVM")..
The VLW Corp. Shares and the Affiliated Stockholder Shares are herein
collectively referred to as the "Existing VLW Shares");
WHEREAS, the VLW Corp. Shares are comprised of 834,120 shares of the
Company's common stock held directly of record by VLW Corp., and of 583,333
shares of the Company's common stock (the VLW Escrow Shares) beneficially owned,
but held of record by "VJN Partners", a dissolved Florida general partnership
(the "VJN Partnership"), and held in escrow by Hornsby & Whisenand, P.A.
("Escrow Agent") pursuant to that certain Stock Escrow Agreement, dated as of
June 3, 1988 (the "Escrow Agreement") between the VJN Partnership and Steven A.
Peters ("Peters"), which escrow arrangement relates to the purchase by VJN
Partnership of 3,500,000 shares of the Company's common stock from Peters,
payment for which was made by the VJN Partnership's payment of $2,000,000 and
delivery of its $1,175,000 promissory note payable to Peters (the "Peters
Note");
WHEREAS, pursuant to a Dissolution Agreement, dated as of December 7,
1992 (the "VJN Dissolution Agreement") among VLW Corp., CEA II, Ltd., NVM, and
Video Holdings Corporation, a Florida corporation ("VHC Corp."), as the then
partners of the VJN Partnership, such partners dissolved the VJN Partnership and
agreed that each of them (a) would have direct beneficial ownership of its
respective PRO RATA interest in the shares of the Company's common stock held
pursuant to the Escrow Agreement including the right to vote such shares; (b)
would be directly obligated for its respective PRO RATA shares of the Peters
Note obligation; and (c) would
<PAGE>
have rights of refusal, through December 7, 1993, as to the transfer or
assignment by any other former partner of the VJN Partnership of certain of the
Company's shares of common stock held by each such former partner, as
specifically provided in Section 13 of the Dissolution Agreement (which rights
as set forth therein are herein referred to as the "VJN Partnership First
Refusal Rights);
WHEREAS, CEA II, Ltd. is a substantial investor in the Company and
presently is the beneficial owner of 2,834,908 shares of the Company's common
stock (the "Existing CEA II, Ltd. Shares"); and J. Patrick Michaels, Jr.
("Michaels") has a financial interest in CEA II, Ltd. through his stock
ownership interest in CEA Investors;
WHEREAS, CEA II, Ltd. and StarNet Interactive Entertainment, Inc.
("StarNet") have formed a partnership known as "StarNet/CEA II Partners" (herein
referred to as "StarNet/CEA"), pursuant to a Partnership Agreement dated as of
August 24, 1993 (as amended and modified from time to time, the "StarNet/CEA
Partnership Agreement");
WHEREAS, CEA II, Ltd. intends to capitalize StarNet/CEA in part by the
transfer of the Existing CEA II, Ltd. Shares;
WHEREAS, StarNet/CEA and NVM have agreed to enter into an Agreement (the
"NVM/CEA Purchase Agreement"), pursuant to which, subject to certain conditions,
StarNet/CEA will purchase from NVM, and NVM will sell and transfer to
StarNet/CEA, up to 2,014,520 shares of the Company's common stock (the "NVM/CEA
Shares") for an aggregate purchase price of $1,611,616, or $.80 per share;
WHEREAS, Affiliated Stockholder and NVM have agreed to enter into an
Agreement (the "NVM/Wolfson Purchase Agreement"), pursuant to which, subject to
certain conditions, Affiliated Stockholder will purchase from NVM and NVM will
sell and transfer to Affiliated Stockholder, 310,194 shares of the Company's
common stock (the "NVM/Wolfson Shares"), for an aggregate purchase price of
$248,155.20, or $.80 per share;
WHEREAS, Andrew Blank, Mark Blank and Tony Blank (the "Blanks") and Bob
Puck and NVM have agreed to enter into agreements (the "NVM/Blank Purchase
Agreement"), pursuant to which, subject to certain conditions, Mark Blank,
Andrew Blank, Tony Blank and Bob Puck will each purchase from NVM and NVM will
sell and transfer to the Blanks and Bob Puck, an aggregate of 310,194 shares of
the Company's common stock (the "NVM/Blank Shares"), for an aggregate purchase
price of $248,155.20, or $.80 per share;
<PAGE>
WHEREAS, CEA II, Ltd., StarNet and the Company have entered into a Stock
and Note Purchase Agreement dated as of August 24, 1993 (the "Company Stock and
Note Purchase Agreement") pursuant to which, subject to certain conditions,
StarNet/CEA will invest up to $1,750,000 in the Company through the purchase
from the Company of (i) convertible promissory notes (the "Convertible Notes"),
convertible into shares of common stock of the Company (the "Converted Company
Shares"), and (ii) newly issued shares of the Company's authorized but unissued
common stock (the "Initial New Company Shares") (the Initial New Company Shares
and the Converted New Company shares are herein referred to as the "New Company
Shares");
WHEREAS, pursuant to the Company Stock and Note Purchase Agreement, the
Company will enter into (a) with StarNet/CEA, a Registration Rights Agreement
(the "Registration Rights Agreement") covering the New Company Shares; (b) with
StarNet and/or its affiliates, a Consulting Agreement, a Management Agreement
and a Service Agreement (the "StarNet Agreements"); and (c) with Communications
Equity Associates, Inc. ("CEA"), an affiliate of CEA II, Ltd., agreements as to
its domestic and international investment banking arrangements (the "CEA
Agreements"), all as more particularly specified in the Company Stock and Note
Purchase Agreement;
WHEREAS, in connection with the foregoing transactions and the other
transactions contemplated herein, each of NVM, CEA II, Ltd., VLW Corp. and VHC
Corp. have agreed to terminate and irrevocably and permanently waive the VJN
Partnership First Refusal Rights;
WHEREAS, in connection with the organization of StarNet/CEA, and the
entering into of the NVM/VHC Purchase Agreement, and the Company Stock and Note
Purchase Agreement, VHC Corp., Mark Blank, Andrew Blank, Tony Blank and Bob Puck
(all five parties herein collectively referred to as "VHC"), VHC and CEA II,
Ltd. have on the date hereof entered into an Irrevocable Proxy, Right of Refusal
and Tag-Along Agreement relating to the voting and disposition of the shares of
Common Stock of the Company acquired or to be acquired by VHC; and
WHEREAS, in connection with the organization of StarNet/CEA, and the
entering into of the NVM/Wolfson Purchase Agreement and the Company Stock and
Note Purchase Agreement, VLW, Affiliated Stockholder and CEA II, Ltd. have
agreed to enter into certain agreements relating to the voting and disposition
of the Existing VLW Shares and certain other shares acquired or to be acquired
by VLW or Affiliated Stockholder as set forth herein.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
SECTION 1. PAY-OFF OF PETERS NOTE. Prior to or concurrently with the
"Effective Date", as hereinafter defined, VLW Corp. shall pay its PRO RATA share
of the Peters Note obligation (provided that all of the other former partners of
the VJN Partnership pay their similar obligations) and use its best efforts (i)
to obtain the release of the VLW Escrow Shares from the escrow arrangement
relating to the purchase of such VLW Escrow Shares; and (ii) to obtain the
<PAGE>
release of the certificate representing the VLW Escrow Shares from the Escrow
Agent. CEA II, Ltd. shall pay its PRO RATA share of the Peters Note obligation
and will use its best efforts to obtain the release of the certificates
representing the shares beneficially owned by CEA II, Ltd. held by the Escrow
Agent.
SECTION 2. IRREVOCABLE WAIVER OF VJN PARTNERSHIP FIRST REFUSAL RIGHTS.
2.1 IRREVOCABLE WAIVER. Effective on the "Effective Date", as hereinafter
defined, VLW Corp. hereby irrevocably and permanently waives any and all rights
it has or may have under the VJN Partnership First Refusal Rights to purchase or
otherwise acquire any shares of the Company's common stock from any party under
any arrangement or agreement heretofore or hereafter entered into, including any
of the Existing CEA II, Ltd. Shares in connection with the proposed transfer
thereof to StarNet/CEA and the shares held by NVM in connection with the
transactions contemplated by the NVM/CEA Purchase Agreement, or the NVM/VHC
Purchase Agreement.
2.2 CONFIRMATION OF WAIVER
Subject to execution of this Agreement by all parties, VLW Corp. agrees
to enter into, or has entered into, a separate agreement with VHC, NVM and CEA
II, Ltd. confirming VLW's irrevocable waiver of its rights with respect to the
VJN Partnership First Refusal Rights on the terms set forth in Section 2.1.
SECTION 3. GRANT OF IRREVOCABLE PROXY; TERMS.
3.1 GRANT OF IRREVOCABLE PROXY. Effective upon the Effective Date as
to the 310,194 Affiliated Stockholder Shares and 689,806 of the VLW Corp. Shares
for an aggregate of one million (1,000,000) Existing VLW Shares, and effective
upon the "Deferred Proxy Effective Date" (as hereinafter defined) as to the
balance of the VLW Voting Shares (as hereinafter defined) (the "Deferred Proxy
Shares"), VLW hereby grants to CEA II, Ltd., with power of substitution as set
forth herein (CEA II, Ltd. and its permitted substitute in its capacity as
substitute being herein referred to as the "Proxy"), an irrevocable proxy with
respect to the Existing VLW Shares, and with respect to any other shares of the
Company's common stock hereafter acquired by VLW Corp. or Affiliated Stockholder
in respect of any of the Existing VLW Shares, including any capital stock of the
Company or subsidiaries or affiliated companies acquired by operation of law,
such as by merger, or consolidation or spin-off; or by reason of any stock
split, reclassification, share exchange or other reconstitution of the
outstanding capital stock of the Company (all of which shares, however acquired,
are herein referred to as the "VLW Voting Shares"), such proxy to specifically
extend to the following rights and authorizations:
(a) to attend any and all meetings of the stockholders of the
Company in the name, place and stead of VLW with respect to any or all of the
VLW Voting Shares, including the right to present such shares to be counted as
attending the meeting by proxy for purposes of
<PAGE>
establishing a quorum, or the right to withhold such Shares in whole or in part
from attendance at any such meeting;
(b) to cast such votes at any meeting of the stockholders and
any adjournment thereof as shall be entitled to be cast by the holders of the
VLW Voting Shares in such manner as the Proxy shall, in its sole discretion,
determine, or to withhold such Shares in whole or in part from voting at any
time or for any reason;
(c) to execute any documents required or advisable, in the sole
discretion of the Proxy, to be executed by the holder of the VLW Voting Shares,
including the call of any special meeting of the stockholders, waiver of notice
of any meeting of the stockholders, written consents of stockholders, whether
unanimous or otherwise, ballots, attendance records or any other similar
document; and
(d) to do any or all of the foregoing on behalf of the holder of
the VLW Voting Shares to the same effect as if such holder had taken such
actions directly, notwithstanding any actual or alleged conflict of interest on
the part of any holder of the VLW Voting Shares or of CEA II, Ltd. or the Proxy
or any of their respective affiliates. As used herein, the "holder of the VLW
Voting Shares" shall mean the record or beneficial holder of such shares, as the
case may be, or any other person, in each case who or which is the person
entitled or permitted to exercise the voting rights or other stockholder rights,
as applicable, with respect to the VLW Voting Shares involved.
3.2 IRREVOCABILITY; TERM OF PROXY.
(a) The proxy granted hereby shall be IRREVOCABLE during its
term. The term of this proxy shall be for a period commencing on the Effective
Date with respect to the one million (1,000,000) Existing VLW Shares identified
above in Section 3.1, and the "Deferred Proxy Effective Date" (as hereinafter
defined) with respect to the balance of the VLW Voting Shares, and ending on
June 30, 2003 unless on such date CEA II, Ltd. directly or through StarNet/CEA
or others, is the beneficial owner of twenty percent (20%) or more of the
outstanding voting stock of the Company, in which event the term shall extend
for such period until CEA II, Ltd. is the beneficial owner of less than twenty
percent (20%) of such outstanding voting stock (which period, as it may be
extended, is herein referred to as the "Term"), provided that the proxy shall
expire as to any of the VLW Voting Shares which are (i) acquired by CEA II,
Ltd., pursuant to the exercise of the Rights of Refusal granted pursuant to
Section 4 hereof, (ii) transferred to a third party pursuant to the exercise of
the Tag-Along Rights granted pursuant to Section 5 hereof, (iii) transferred to
a Third Party, as defined in Section 4.1, in a transaction in which CEA II, Ltd.
has been afforded the Rights of Refusal provided for in Section 4 hereof and has
not exercised such Rights, (iv) sold in a Proposed 1933 Act Sale in a
transaction in which CEA II, Ltd. has been afforded the Rights of Refusal
provided for in Section 4.2, 4.3 or 4.4, as applicable, and CEA II, Ltd. has not
exercised such Rights, (v) acquired by CEA II, Ltd., pursuant to the exercise of
the option granted pursuant to Section 6 hereof, or (vi) not subject to Rights
of Refusal under this Agreement as a result of paragraph (b) of this Section 3.2
or otherwise.
<PAGE>
(b) In addition, this proxy, and the Rights of Refusal (as
defined below) granted and the Tag-Along Rights (as set forth in Section 5)
provided to VLW pursuant to this Agreement shall terminate and shall be of no
further force and effect with respect to the number of VLW Voting Shares
determined by applying Section 3.2(b)(i), (ii) or (iii) (whichever is
applicable) below, in the event CEA II, Ltd. shall have exercised the Rights of
Refusal (as defined below) with respect to such VLW Voting Shares and shall have
failed to pay the purchase price in cash by cashiers check or wire transfer for
the then Offered VLW Shares or offered VLW 144 Shares on or prior to the date by
which payment is required under Section 4 (or as extended under this Section
3.2(b)); provided, however, VLW gives written notice ("Remedy Election Notice")
to CEA II, Ltd. of VLW's election to so terminate the proxy, all Rights of
Refusal and Tag-Along Rights with respect to such VLW Voting Shares no later
than five (5) business days following the latest date on which CEA II, Ltd. had
the opportunity to pay but failed to pay the purchase price. If VLW elects to so
terminate the proxy and such Rights, they shall terminate and shall be of no
further force and effect on the date on which the Remedy Election Notice is
delivered to CEA II, Ltd. pursuant to Section 10.1. VLW shall deliver, by the
same method as the Remedy Election Notice is delivered to CEA II, Ltd. under
Section 10.1, a copy of the Remedy Election Notice to the office of the Company.
Delivery of the copy shall be conclusive evidence that the proxy and Rights of
Refusal and Tag-Along Rights have been terminated as of the date of delivery to
CEA II, Ltd. VLW's election to terminate the proxy and Rights of Refusal and
Tag-Along Rights (collectively the "Rights") shall be in lieu of any other
remedy available to VLW under this Agreement for enforcement of breach of
contract by CEA II, Ltd. for such failure to pay the purchase price, which other
remedies (such as recovery of damages or injunctive relief for specific
performance) shall thereupon be deemed permanently and irrevocably waived as to
such which did not close due to CEA II, Ltd.'s failure to pay.
If VLW does not send a Remedy Election Notice it may sell the VLW Voting
Shares which had been subject to the exercised Rights of Refusal as if such
Rights of Refusal had not been exercised; provided that the period during which
such shares may be sold shall commence on the date following the latest date on
which CEA II, Ltd. had the opportunity to pay for the Offered VLW Shares or
Offered VLW 144 Shares without being in breach of this Agreement and failed to
make the payment. In addition, if VLW does not send a Remedy Election Notice VLW
may pursue all other remedies to which it is entitled at law or in equity.
In the event CEA II, Ltd. exercises Rights of Refusal and fails to pay
the purchase price due under Section 4.1, 4.2, 4.3 and 4.4 hereof with respect
to such exercise and VLW delivers a Remedy Election Notice when due then the
rights shall terminate with respect to the following number of Shares:
(i) If the purchase price payable is less than or equal to
$50,000, this proxy and such Rights of Refusal and
Tag-Along Rights shall terminate with respect to those VLW
Voting Shares which were the subject of the exercise of the
Rights of Refusal;
<PAGE>
(ii) If the purchase price is more than $50,000 and less than or
equal to $750,000, the proxy and such Rights shall
terminate with respect to a number of VLW Voting Shares
equal to the shares which were subject to the exercised
Rights of Refusal multiplied by two, provided CEA II, Ltd.
shall have been first afforded a period of 10 business days
(as opposed to 5 business days) to close the purchase of
such shares if the Rights of Refusal were exercised under
Section 4.3 or 4.4 hereof; or
(iii) If the purchase price is more than $750,000, the proxy and
such Rights shall terminate and expire with respect to all
of the VLW Voting Shares; provided, CEA II, Ltd. shall have
been first afforded a period of 20 business days (as
opposed to 5 business days) to close the purchase of such
shares if the Rights of Refusal were exercised under
Section 4.3 or 4.4 hereof.
3.3 LIMITED POWER OF SUBSTITUTION; ASSIGNABILITY.
(a) The proxy granted hereby may be exercised by CEA II, Ltd.,
acting through any person designated in writing by CEA Investors, provided that
CEA II, Ltd. or CEA Investors may designate a substitute Proxy, which
designation shall be limited to Michaels (but only so long as he is the Chief
Executive Officer or controlling stockholder of CEA),, the Trustee of the John
P. Michaels, Jr. Family Trust, or any other person who is the Chairman,
President or Chief Executive Officer of CEA or CEA Investors. In connection with
the exercise of the proxy, CEA II, Ltd. or any other Proxy may agree to exercise
its proxy rights in conjunction with one or more other Persons, including, but
not limited to StarNet/CEA or its partners.
(b) Notwithstanding the foregoing, in the event that StarNet/CEA
transfers shares of the Company's common stock to a single person or related
group (the "Major Block Transferee") in one transaction or a series of related
transactions within any six (6) month period amounting to more than twenty-five
percent (25%) of the then outstanding common stock of the Company (which
transaction or related series of transactions is herein referred to as a "Major
Block Transfer"), and in connection with such Major Block Transfer, VLW has been
afforded the benefit of the "Tag-Along Rights" set forth in Section 5 hereof,
and shall not have elected to exercise such Tag-Along Rights, then CEA II, Ltd.
may assign to the Major Block Transferee the irrevocable proxy rights granted
hereunder to the extent of that portion of the VLW Voting Shares which is equal
to the percentage which (x) the shares of the Company's common stock transferred
to the Major Block Transferee in the Major Block Transfer bears to (y) the total
outstanding shares of the Company's common stock held by StarNet/CEA immediately
prior to the first transaction which was a part of the Major Block Transfer. In
such event, the Major Block Transferee shall have full power of substitution
under the proxy and the proxy shall terminate on June 30, 2003.
3.4 CONFIRMING DOCUMENTATION. In order to facilitate the exercise of the
proxy granted hereby, VLW will, promptly upon the request of CEA II, Ltd.,
execute and deliver written confirmation of the grant of the proxy for the VLW
Voting Shares substantially in the form annexed hereto as Exhibit A.
<PAGE>
SECTION 4. RIGHT OF FIRST REFUSAL.
4.1 RIGHT OF FIRST REFUSAL FOR THIRD PARTY OFFERS. If, after the
Effective Date and prior to the expiration of the Term of the proxy (as defined
in Section 3.2), VLW shall have received a bona fide written offer (a "Third
Party Offer") from a Third Party to purchase any of the VLW Voting Shares (the
Shares subject to such offer being referred to as the "Offered VLW Shares") and
VLW desires to accept such Third Party Offer, VLW may accept such Third Party
Offer only after it has afforded CEA II, Ltd. the following rights of first
refusal (including the rights of first refusal set forth in Sections 4.2, 4.3
and 4.4 collectively herein referred to as the "Rights of Refusal") and complied
strictly with the below described procedure:
(a) VLW shall notify CEA II, Ltd. of its desire to sell the
Offered VLW Shares to a Third Party, the price and terms of the Third Party
Offer, and the identity of the Third Party.
(b) For a period of ten (10) business days after the date of
receipt of such notice, CEA II, Ltd. shall have the option to purchase the
Offered VLW Shares at the same price and on the same terms as the Third Party
Offer, such option to be exercised by written notice thereof given in compliance
with Section 10.1 of this Agreement.
(c) If at the end of such ten (10) business day period, CEA II,
Ltd. does not elect to exercise its right to first refusal pursuant to this
Section 4.1, VLW shall have a period of the longer of sixty (60) calendar days
or the number of days required to obtain regulatory approval, if any is
required, in which to sell to the Third Party all or part of the Offered VLW
Shares, at the price and on terms not less favorable to VLW as the terms set
forth in the Third Party Offer.
(d) If, at the end of such period, VLW has not completed the
sale of the Offered VLW Shares to a Third Party pursuant to the Third Party
Offer, all of the restrictions on the sale, transfer or assignment set forth in
this Section 4 shall again apply with respect to the Offered VLW Shares.
(e) If CEA II, Ltd. does exercise its option to acquire the
Offered VLW Shares, pursuant to Section 4.1(b), the closing of such purchase
shall take place at the principal office of the Company on a date specified by
CEA II, Ltd. within sixty (60) days after receipt of the Third Party Offer, at
which time VLW shall deliver the certificates representing the Offered VLW
Shares, together with stock powers executed in blank with signature guaranteed,
against payment of the purchase price as required by the Third Party Offer. Each
of the seller and purchaser in any such transaction shall be entitled to receive
such representations, warranties, certificates and other instruments as shall be
reasonably required by any other party.
(f) Any Third Party Offer shall be reduced to writing and signed
by the Third Party and shall state that such Third Party has or will have at the
closing of the purchase of the Offered VLW Shares, sufficient funds to
consummate such offer (giving reasonably satisfactory
<PAGE>
confirming evidence thereof), and a copy thereof shall be delivered to CEA II,
Ltd. pursuant to Section 10.1 hereof.
(g) A Third Party Offer shall not include the sale, transfer or
other disposition of any of the VLW Voting Shares, to an affiliate of VLW Corp.
or the Affiliated Stockholder, if the transferee ("VLW Transferee") agrees to
all of the terms of this Agreement including without limitation the execution
and delivery of confirming documentation under Section 3.4.
(h) Any sale or proposed sale through a registered public
offering or a proposed sale under Rule 144 promulgated under the Securities Act
of 1933, as amended (the "1933 Act") shall be subject to the Rights of Refusal
granted hereby (any such proposed sales being herein referred to as "Proposed
1933 Act Sales") as set forth and described in Section 4.2 and 4.3 below.
4.2 RIGHT OF FIRST REFUSAL FOR SALES IN REGISTERED OFFERINGS. In
connection with any Proposed 1933 Act Sales in a registered offering, the Rights
of Refusal shall apply to all VLW Voting Shares which the lead underwriter has
agreed to be included in the registration statement, when effective, all as
confirmed by such underwriter in writing to CEA II, Ltd. no later than five (5)
days prior to the proposed effective date of such registration statement. CEA
II, Ltd. shall have one (1) business day, following CEA II, Ltd.'s receipt of
such confirmation from the underwriter, to exercise such Rights of Refusal with
respect to some or all of the VLW Voting shares to be included, such right to be
exercised by written notice to VLW thereof delivered no later than one (1)
business day after the date on which it is sent. The closing of any such
purchase shall take place on the date of, and to be subject to the conditions
of, the closing of the sale of the shares of the Company common stock pursuant
to the registered offering at a price per share equal to the public offering
price per share of Company common stock sold in the registered offering subject
to such conditions, the parties shall close the purchase of the VLW Voting
Shares pursuant to paragraph (f) of Section 4.4.
4.3 RIGHT OF FIRST REFUSAL FOR RULE 144 SALES DURING 1994. In
connection with any Proposed 1933 Act Sales by VLW under Rule 144 during 1994:
(a) VLW will not sell any of the VLW Shares under Rule 144
before March 1, 1994.
(b) If VLW desires to sell shares under Rule 144 during 1994,
VLW shall deliver to CEA II, Ltd. Notice of such intent to sell (a "1994
Notice") as follows:
(i) on or before March 1, 1994 for its intended Rule 144 Sales
between March 1 and June 15, 1994.
(ii) on or before June 16, 1994 for its intended Rule 144 sales
between June 16 and September 30, 1944.
(iii) on or before October 1, 1994 for its intended Rule 144 sales
between October 1 and December 31, 1994.
<PAGE>
The above "1994 Notices" shall be effective ("1994 Notice Effective Date") as of
the first day of the period specified or on the first business day following the
day sent, if later. The 1994 Notices shall be effective for the persons
specified, and cover intended Rule 144 Sales during the periods specified in
4.3(b)(i), (ii) or (iii) (the "1994 Notice Period"). Each 1994 Notice shall
specify the number of VLW Shares VLW intends to sell (the "Offered VLW 144
Shares") and the minimum price ("Minimum Price") per share at which VLW would be
willing to sell such shares under Rule 144 during each respective 1994 Notice
Period.
(c) The maximum number ("Maximum Amount") of VLW Shares which
VLW may specify in any 1994 Notice or sell under Rule 144 in any such three
month period will be the greater of 1% of the outstanding shares of common stock
of the Company at the time the 1994 Notice is delivered or the average weekly
trading volume during the four calendar weeks preceding delivery of each
respective 1994 Notice subject to any other applicable limits under Rule 144.
(d) For a period of five (5) business days after the 1994 Notice
Effective Date of a 1994 Notice, CEA II, Ltd. may exercise its right of first
refusal ("Rights of Refusal" as previously defined) to purchase all or a part of
the Offered VLW 144 Shares at the Minimum Price per share such Right of Refusal
to be exercised by written notice thereof (the "Election Notice"), specifying
the number of shares to be purchased, delivered no later than one (1) business
day after the date on which it is sent in compliance with Section 10.1 of this
Agreement. If CEA II, Ltd. exercises such Right of Refusal it shall close the
purchase of the specified Offered VLW 144 Shares pursuant to paragraph (f) of
Section 4.4 within the number of business days specified in Section 3.2(b)(i),
(ii) or (iii) (as applicable based on the aggregate purchase price for each
respective purchase) following its delivery of its Election Notice.
(e) If at the end of such five (5) business day period, VLW has
not received an Election Notice from CEA II, Ltd. pursuant to this Section 4.3,
VLW shall have the balance of the applicable 1994 Notice Period following
delivery of any 1994 Notice to sell under Rule 144 up to but not exceeding the
Maximum Amount of Offered VLW 144 Shares at a price of at least the Minimum
Price per share.
(f) If, at the end of the applicable 1994 Notice Period, VLW has
not completed the sale of the Offered VLW 144 Shares under Rule 144, all of the
restrictions on the sale, transfer or assignment set forth in this Section 4
shall again apply with respect to any unsold Offered VLW 144 Shares.
(g) In the event VLW desires to sell any of such Offered VLW 144
Shares under Rule 144 during any applicable 1994 Notice Period at a price less
than the Minimum Price, then VLW shall first give CEA II, Ltd. notice of its
desire to sell such Offered VLW 144 Shares at such new minimum price. Such
notice will be treated as a 1994 Notice affording CEA II, Ltd. the Right of
Refusal to purchase all or part of such Offered VLW 144 Shares at such new
minimum price in accordance with the foregoing provisions. Once VLW has
delivered a 1994 Notice for a respective 1994 Notice Period, VLW shall be
afforded the opportunity to send a new 1994 Notice
<PAGE>
reflecting a reduced minimum price no more than two times during each applicable
1994 Notice Period.
4.4 RIGHT OF REFUSAL FOR RULE 144 SALES DURING 1995 and THEREAFTER.
In connection with any Proposed 1933 Act Sales by VLW under Rule 144 during 1995
and thereafter:
(a) During 1995 and thereafter VLW shall deliver written notice
(a "Post 1994 Notice") to CEA II, Ltd. no more frequently than on a monthly
basis of its desire to sell VLW Shares under Rule 144 during the thirty (30) day
period following delivery of the Post 1994 Notice, which Post 1994 Notice shall
specify the number of Offered VLW 144 Shares VLW intends to sell and the Minimum
Price per share at which VLW would be willing to sell such shares under Rule 144
during such thirty (30) day period.
(b) For a period of five (5) business days after the date of
receipt of the Post 1994 Notice, CEA II, Ltd. may exercise its Rights of Refusal
to purchase all or a part of the Offered VLW 144 Shares at the Minimum Price per
share, such Rights of Refusal to be exercised by written notice thereof (the
"Post 1994 Election Notice"), specifying the number of shares to be purchased,
delivered no later than one (1) business day after the date on which it is sent
in compliance with Section 10.1 of this Agreement. If CEA II, Ltd. exercises
such Rights of Refusal it shall close the purchase of the specified Offered VLW
144 Shares pursuant to paragraph (f) of this Section 4.4 within the number of
business days specified in Section 3.2(b)(i), (ii) and (iii) (as applicable
based on the aggregate purchase price for each respective purchase) following
its delivery of its Post 1994 Election Notice.
(c) If at the end of such five (5) business day period, VLw has
not received a Post 1994 Election Notice from CEA II, Ltd. pursuant to this
Section 4.4, VLW shall have a period of thirty (30) days from and after the
fifth business day following delivery of any Post 1994 Notice to sell under Rule
144 up to but not exceeding the number of Offered VLW 144 Shares specified in
such Post 1994 Notice at a price of at least the Minimum Price per share.
(d) In the event VLW desires to sell any of such Offered VLW 144
Shares under Rule 144 during any applicable 1994 Notice Period at a price less
than the Minimum Price, then VLW shall first give CEA II, Ltd. notice of its
desire to sell such Offered VLW 144 Shares at such new minimum price. Such
notice will be treated as a Post 1994 Notice affording CEA II, Ltd. Rights of
Refusal to purchase all or a part of such Offered VLW 144 Shares at such new
minimum price in accordance with the foregoing provisions. Once VLW has
delivered a Post 1994 Notice for a respective thirty (30) day period VLW shall
be affored the opportunity to send a new Post 1994 Notice reflecting a reduced
Minimum Price no more than two times during each applicable thirty (30) day
period.
(e) If, at the end of such thirty (30) day period from and after
the fifth business day following delivery of any Post 1994 Notice, VLW has not
completed the sale of any of the Offered VLW 144 Shares under Rule 144, all of
the restrictions on the sale, transfer or assignment set forth in this Section 4
shall again apply with respect to any unsold Offered VLW 144 Shares.
<PAGE>
(f) If CEA II, Ltd. does exercise its right to acquire any of
the VLW Voting Shares pursuant to Section 4.2 or 4.3 or 4.4, the closing of such
purchase shall take place at the principal office of the Company on a date
specified by CEA II, Ltd. no later than the date set forth for closing in
Section 4.2, 4.3 or 4.4, as the case may be. At which time VLW shall deliver the
certificates representing the VLW Voting Shares to be purchased, together with
stock powers executed in blank with signature guaranteed, against payment of the
purchase price in cash by cashier's check or wire transfer as required by this
Agreement. Each of the seller and purchaser in any such transaction shall be
entitled to receive such representations, warranties, certificates and other
instruments relating to the transaction as shall be reasonably requested by the
other party to the transaction.
4.5 PROHIBITION AGAINST ENCUMBRANCES. VLW shall have no right to
pledge, margin, hypothecate or otherwise encumber any of the VLW Shares, and any
attempt to do any of the foregoing shall be null and void.
4.6 CEA II, LTD. RIGHT TO DESIGNATE. CEA II, Ltd. may from time to
time designate any other Person or Persons, including StarNet/CEA, to exercise
its Rights of Refusal pursuant to Sections 4.1, 4.2, 4.3 and 4.4 hereof, which
designation shall be sufficient if in writing and delivered to VLW at the time
of and together with notice of the exercise of any such Rights of Refusal. In
such event, any notice to be given thereafter by VLW hereunder shall also be
given to such designated Person but only with respect to the particular
transaction. Initially, CEA II, Ltd. hereby designates StarNet/CEA to exercise
such Rights of Refusal and no additional written notice as to such designation
shall be required to be delivered to VLW with respect to such initial
designation.
4.7 COVENANT WITH RESPECT TO RULE 144 SALES. CEA II, Ltd. agrees it
will not sell or permit StarNet/CEA to sell any of its shares of common stock of
the Company under Rule 144 during 1994 to the extent aggregation of such sales
will be required with respect to sales by VLW of its shares under Rule 144.
SECTION 5. TAG-ALONG RIGHTS.
5.1 RIGHT TO PARTICIPATE IN CERTAIN TRANSACTIONS INVOLVING COMPANY
SHARES OR THE COMPANY.
(a) In the event that, after the Effective Date,
StarNet/CEA, StarNet or CEA II, Ltd. (to the extent any of them holds any shares
of the Company's common stock), (StarNet/CEA, StarNet and CEA, Ltd. even if only
one of them is involved, is herein referred to as a "Selling Group"):
(i) proposes to sell or transfer to any Person, other than
in a public offering of the Company's common stock
registered under the 1993 Act (provided such sale or
transfer affords VLW Tag-Along Rights under Section 5.2
herein), and other than to its or their respective
partners or Affiliates (as long as the
<PAGE>
transferee agrees in writing to the terms of this
Agreement), in a single transaction or series of
related transactions, shares of the Company's common
stock (other than a sale or transfer of shares of the
Company's common stock which when aggregated with all
prior sales by one or more members of the Selling Group
as to which Tag-Along Rights were not afforded to VLW
pursuant to this Section 5, does not exceed two percent
(2%) of the aggregate shares of common stock
outstanding, assuming no exercise of any outstanding
options to acquire, or the conversion of any
outstanding securities into, common stock of the
Company) as of the date of such proposed sale or
transfer (herein referred to as a "Sale Transaction");
or
(ii) participates in, or agrees with any one or more Persons
to participate in, any transaction which will result in
the merger of the Company with any other corporation,
or exchange of a majority of the outstanding common
stock of the Company (herein referred to as an
"Acquisition Transaction") the Sale Transaction and the
Acquisition Transaction shall be conditioned upon VLW
having the rights to participate in the transaction as
set forth herein; and CEA II, Ltd. and StarNet/CEA
shall, within a reasonable time prior to consummating
its or their participation in any such Sale Transaction
or Acquisition Transaction:
(x) afford and cause any other member of the Selling
Group to afford VLW the right to include in such
Sale Transaction or Acquisition Transaction up to
that percentage of the VLW Voting Shares then
owned by VLW and its Affiliates who have agreed
to the terms of this Agreement that is equal to
the percentage of the Selling Group's aggregate
beneficial holdings (measured by dispositive
power) of the Company's common stock proposed to
be sold or transferred in any Sale Transaction or
proposed to be covered by any Acquisition
Transaction, on the same terms and conditions as
the Company common stock proposed to be so sold
or transferred by the Selling Group;
(y) deliver written notice (the "Tag-Along Rights
Notice") and a copy of the definitive agreement
evidencing the Sale Transaction or the
Acquisition Transaction, as the case may be, to
VLW in accordance with Section 10.1 identifying
the terms and conditions of the proposed Sale
Transaction or Acquisition Transaction at least
twenty (20) days, if possible, prior to the date
of the closing of the proposed transaction; and
(z) advise VLW in the Tag Along Rights Notice of its
Tag Along Rights to so participate in the
proposed transaction.
<PAGE>
(b) If VLW desires to participate in a Sale Transaction or
Acquisition Transaction, VLW shall give written notice to CEA II, Ltd. of its
level of participation in such sale or transfer within ten (10) business days of
delivery of the Tag Along Rights Notice. If VLW elects to so participate, VLW
shall thereupon be included as a party to, and shall be required to comply at
its own cost with all the provisions of the pertinent purchase agreement (in the
case of the Sale Transaction) or merger or acquisition agreement (in the case of
an Acquisition Transaction), applicable to VLW Voting Shares to be included.
5.2 RIGHT TO PARTICIPATE IN CERTAIN TRANSACTIONS INVOLVING
STARNET/CEA INTERESTS.
(a) In the event that CEA II, Ltd. proposes to sell or transfer
to any Person, other than to its partners or Affiliates who have agreed to the
terms of this Agreement, any partnership interest in StarNet/CEA which when
aggregated with all prior sales or other transfers or dispositions by CEA II,
Ltd. as to which Tag Along Rights were not afforded to VLW pursuant to this
Section 5, does not exceed two percent (2%) of the total aggregate interests in
the profits or capital of StarNet/CEA as of the date of such proposed sale or
transfer (herein referred to as "CEA II, Ltd. Sale Transaction"), then CEA II,
Ltd. shall condition its participation in the CEA II, Ltd. Sale Transaction on
VLW receiving the Tag Along Rights set forth herein and shall, prior to
consummating its participation in such CEA II, Ltd. Sale Transaction:
(i) offer VLW the right to include in such CEA II, Ltd. Sale
Transaction that percentage of the VLW Voting Shares then
owned by VLW or its Affiliates that have agreed to the terms
of this Agreement that is equal to the percentage of the
partnership interest in StarNet/CEA held by CEA II, Ltd.
that CEA II, Ltd. proposes to sell in the CEA II, Ltd. Sale
Transaction, on the same terms and conditions as CEA II,
Ltd. proposes to sell its interest in StarNet/CEA (with the
VLW Voting Shares to be valued for such purpose either by
agreement of VLW Corp. and CEA II, Ltd. or failing such
agreement at the applicable purchase price per share based
on the number of shares represented by the partnership
interest proposed to be sold, as hereinafter defined);
(ii) give a Tag-Along Notice to VLW identifying the terms and
conditions of the proposed CEA II, Ltd. Sale Transaction at
least twenty (20) days prior to the date of closing thereof;
and
(iii) advise VLW in the Tag-Along Notice of its Tag-Along Rights
to participate in the proposed transaction.
(b) If VLW desires to participate in a CEA II, Ltd. Sale
Transaction, VLW shall give written notice to CEA II, Ltd. of its level of
participation in such sale or transfer within ten (10) business days of delivery
of the Tag-Along Rights Notice. If VLW elects to so participate, VLW shall
thereupon be included as a party to, and shall be required to comply at its own
cost with all the provisions of the CEA II, Ltd. Sale Transaction purchase
agreement applicable to VLW Voting Shares to be included.
<PAGE>
(c) In the event VLW, VHC or StarNet/CEA elect to exercise
contractual rights to participate in or purchase part of a proposed CEA II, Ltd.
Sale Transaction, the amount CEA II, Ltd. proposes to sell in the CEA II, Ltd.
Sale Transaction and accordingly, the amount VLW may include in such transaction
may be proportionately reduced.
5.3 RIGHTS WITH RESPECT TO REGISTRATIONS.
In the event that the Selling Group proposes to include any of its shares
of common stock of the Company for sale in a registration statement to be filed
by the Company under the 1993 Act:
(a) CEA II, Ltd. will deliver written notice to VLW of the
proposed inclusion of shares of common stock of the Company owned by the Selling
Group in such registration statement.
(b) Upon receipt of written notice from VLW delivered to CEA II,
Ltd. of VLW's election to include some of its shares in such registration
statement, CEA II, Ltd. will ask the Company to add VLW Voting Shares to the
registration statement, but only to the extent that the maximum number of VLW
Voting Shares so included shall not exceed the percentage (the "VLW Percentage")
of the total number of shares included in the registration statement which are
then owned by the Selling Group, VHC or VLW which percentage is equal to the
number of VLW Voting Shares then beneficially owned by VLW or any of its
Affiliates who have agreed to the terms of this Agreement (based on dispositive
power) divided by the total number of shares of the Company's common stock then
beneficially owned by the Selling Group, VLW or VHC or any of their partners or
Affiliates who have agreed to the terms of this Agreement (based on dispositive
power).
(c) In the event the Company will not permit VLW to add its
shares to the registration statement as described in Section 5.3(b) above, or in
the event, at any time, the underwriter or underwriting group requires a
decrease in the aggregate number of shares held by shareholders to be included
in any registration statement, then CEA II, Ltd. shall cause Selling Group to
reduce, and Selling Group shall reduce the number of shares it proposes to
include in the registration statement to permit VLW to include a number of
shares (also reduced) in the registration statement but only to the extent that
the maximum number of VLW Voting Shares so included shall not exceed the VLW
Percentage of the shares to be included by the Selling Group, VLW, or VHC or any
of its Affiliates who have agreed to the terms of this Agreement.
SECTION 6. GOING PRIVATE TRANSACTIONS. In the event the Company,
StarNet/CEA, any of its partners or Affiliates who have agreed to the terms of
this Agreement or a third party proposes (i) to make a tender offer for less
than all shares of the Company's common stock or (ii) to initiate any other
transaction or series of transactions or action, such tender offer, transaction
or action shall be referred to as the "Going Private Transaction." (For purposes
of this agreement a merger reorganization consolidation or share exchange
between the Company or its shareholders and a company resulting in ownership by
the Company's shareholders of publicly traaded shares shall not be treated as or
deemed a "Going Private Transaction.") If after any such
<PAGE>
Going Private Transaction the Company's shares of common stock would not be
listed or otherwise registered with the Securities and Exchange Commission, any
stock exchange or Nasdaq (Nasdaq/NMS; Nasdaq; the Nasdaq bulletin board or the
pink sheets) and as a result the use of Rule 144 under the 1933 Act would not be
available for the sale of their respective securities by VLW Corp. or the
Affiliated Stockholder, then StarNet/CEA will not vote its shares of Company
common stock or, to the extent StarNet/CEA can control the decision through its
representatives on the Board of Directors, permit the Company or such parties to
approve and to close such parties to approve and to close such a Going Private
Transaction unless: StarNet/CEA or CEA II, Ltd. shall first, at its option, make
an offer or cause a third party to make an offer to VLW to purchase ("Going
Private Option Purchase") all of the then issued and outstanding VLW Voting
Shares then subject to this proxy at a purchase price equal to the lower of:
(i) the following prices during the three periods
indicated:
(A) $2.00 per share if the purchase and sale is closed
on or before December 31, 1994;
(B) $2.50 per share if the purchase and sale is closed
in 1995;
(C) $3.00 per share if the purchase and sale is closed
in 1996, 1997 or 1998; or
(ii) the price per share offered and paid to shareholders
who sell their shares in the Going Private Transaction.
(b) VLW shall have the right to accept or reject the Going
Private Option Purchase offer. The closing of the Going Private Option Purchase
shall be conditioned on and subject to the closing of the Going Private
Transaction. The closing of the purchase shall take place on the date of the
closing of the Going Private Transaction in the same manner as sales of shares
under the provisions of Section 4.4(f) of this Agreement.
(c) So long as the Going Private Option Purchase offer is made
and rejected or, if accepted, such sale is closed, then the Going Private
Transaction may proceed.
SECTION 7. EFFECTIVE DATE: DEFERRED PROXY EFFECTIVE DATE.
7.1 EFFECTIVE DATE. The effective date (the "Effective Date") for
the following transactions contemplated by this Agreement:
(a) The irrevocable waiver and termination of the VJN Partnership
First Refusal Rights as provided in Section 2.1;
(b) The grant of the irrevocable proxy as to One Million (1,000,000)
VLW Voting Shares as provided in Section 3.1;
<PAGE>
(c) The grant of the Rights of Refusal as provided in Section 4.1,
4.2, 4.3 and 4.4; and
(d) The grant and availability of the Tag-Along Rights as provided in
Sections 5.1, 5.2 and 5.3, shall be that date, on or before September 15, 1993,
which is specified by written notice (the "Effective Date Notice") from CEA II,
Ltd. to VLW Corp., provided that the following events (the "Conditions
Precedent") shall have occurred on or prior to such date:
(i) StarNet and CEA shall have entered into the StarNet/CEA
Partnership Agreement and each of them shall have made the contributions
to the capital of StarNet/CEA provided for therein;
(ii) StarNet/CEA shall have entered into the NVM/CEA Purchase
Agreement with NVM, and the transactions contemplated thereby shall have
been consummated;
(iii) Affiliated Stockholder shall have entered into the
NVM/Wolfson Purchase Agreement with NVM, and the transactions
contemplated thereby shall have been consummated;
(iv) Each of the Blanks and Bob Puck shall have entered into the
NVM/Blank Purchase Agreement with NVM, and the transactions contemplated
thereby shall have been consummated;
(v) NVM, VLW Corp., VHC and CEA II, Ltd. shall have paid their
respective obligations under the Peters Note, and all shares of the
Company's common stock held pursuant to the Escrow Agreement shall have
been released to an authorized representative of the former partners of
the VJN Partnership or such representative's counsel; and
(vi) StarNet/CEA and the Company shall have entered into the
Company Stock and Note Purchase Agreement and all transactions
contemplated thereby, including the issuance of the New Company Shares
and the New Company Convertible Notes, and the execution and delivery of
the Registration Rights Agreement, the StarNet Agreements and the CEA
Agreements, shall have been consummated to the extent contemplated
therein to be consummated on the Closing Date, as defined therein. If the
Effective Date does not occur on or before September 15, 1993, then this
Agreement shall terminate upon written notice from either VLW Corp. to
CEA II, Ltd. or from CEA II, Ltd. to VLW Corp., and no party shall have
any obligation hereunder.
7.2 DEFERRED PROXY EFFECTIVE DATE. The effective date for the grant
of the proxy under Section 3.1 as to the Deferred Proxy Shares (the "Deferred
Proxy Effective Date") shall be that date, on or before the first anniversary of
the Effective Date, as specified by written notice from CEA II, Ltd. to VLW
Corp. which date shall be on or after the date on which either (a) the Federal
Communications Commission ("FCC") shall have granted approval to the change of
control of the Company contemplated by the Stock and Note Purchase Agreement,
and the grant of proxy rights to CEA II, Ltd. pursuant to this Agreement and a
similar agreement with VHC
<PAGE>
(the "Change of Control Transactions") and such grant of approval shall have
become final and non-appealable, or (b) the Company shall have effectuated the
disposition of its operations subject to licensing and regulation by the FCC,
and no FCC approval of the Change of Control Transactions is required. If the
Deferred Proxy Effective Date shall not have occurred on or before the first
anniversary of the Effective Date, then, upon written notice from VLW Corp. to
CEA II, Ltd., CEA II, Ltd. shall have no further rights under this Agreement
with respect to the Deferred Proxy Shares, but such Deferred Proxy Shares shall
remain subject to the Rights of Refusal set forth in Section 4 hereof and
entitled to the benefits of the Tag-Along Rights set forth in Section 5 hereof.
VLW shall cooperate with CEA II, Ltd., StarNet/CEA and the Company in connection
with all applications for FCC approval of the Change of Control Transactions.
SECTION 8. DEFINITIONS. As used herein, the following terms shall have
the definitions set forth:
"Affiliate" as to any Person shall mean any other Person controlled by,
under common control with or controlling such Person.
"Tag-Along Rights" shall mean the rights granted pursuant to Section 5 of
this Agreement.
"Person" shall mean an individual, partnership, joint venture,
corporation, trust, limited liability company or a government or any department,
subdivision or agency thereof.
"Rights of Refusal" shall mean the rights granted pursuant to Section 4
of this Agreement.
"Third Party" in any proposed arrangement shall mean any Person who is
not an Affiliate of any Person entering into the arrangement.
"VLW Shares" shall mean any VLW Voting Shares owned beneficially by VLW
Corp., the Affiliated Stockholder or VLW Transferees.
SECTION 9. LEGEND.
9.1 FORM. Each certificate evidencing the Existing VLW Shares or
representing any other VLW Voting Shares, and each certificate issued in
exchange for or upon the transfer of any such Shares during the term of this
Agreement shall be stamped or otherwise imprinted with a legend in substantially
the following form:
The securities represented by this certificate are subject to
(a) an agreement as to the exercise of voting rights, and (b)
certain restrictions on transfer (including certain restrictions
on pledging, granting a security interest in, or otherwise
encumbering such securities), as set forth in an Irrevocable
Proxy, Right of Refusal and Tag-Along Agreement dated as of
August 27, 1993, between Venture LW Corporation, Louis Wolfson
III and CEA Investors Partnership II, Ltd. A copy of such
Agreement will be furnished without charge by the registered
holder of this certificate upon written request.
<PAGE>
9.2 PROCEDURES. On the Effective Date, VLW shall produce the
certificates representing the Existing VLW Shares and the shares purchased under
the NWM/VLW purchase Agreement so that the legend set forth above may be added
to such certificates. In addition, VLW shall assure that each certificate for
any VLW Shares acquired by VLW Corp. or the Affiliated Stockholder in the future
in respect of the Existing VLW Shares is stamped or imprinted with the legend
set forth above, and appropriate evidence thereof provided to CEA II, Ltd.
SECTION 10. MISCELLANEOUS.
10.1 NOTICE. (a) Any notice required or permitted hereunder shall be
in writing and shall be sufficiently given if personally delivered, delivered by
facsimile telephone transmission, delivered by express delivery service (such as
Federal Express), or mailed first class U.S. mail (unless delivery is required
in less than three days), postage prepaid, addressed as follows:
If to Venture LW Corporation or Affiliated Stockholder:
Venture LW Corporation
9350 South Dixie Highway
Miami, FL 33156
Attn: Louis Wolfson, III
Fax: 305-670-2212
with a copy to:
Steel Hector & Davis
200 South Biscayne Blvd.
Miami, FL 33131-2398
Attn: Sheila A. Halpern, P.A.
Fax: 305-358-1418
If to CEA Investors Partnership II, Ltd.:
CEA Investors Partnership II, Ltd.
c/o Communications Equity Associates, Inc.
101 East Kennedy Blvd., Suite 3300
Tampa, FL 33602
Attn: Thomas W. Cardy
Fax: 813-225-1513
with a copy to:
Edwards & Angell
250 Royal Palm Way
<PAGE>
Palm Beach, Florida 33480
Attention: Jonathan E. Cole
Fax No.: 407-655-8719
and
StarNet/CEA II Partners
c/o StarNet Interactive Entertainment, Inc.
1332 Enterprise Drive
Suite 200
West Chester, PA 19380
Attention: Alan McGlade
Fax No.: 215-692-6487
(or to such other address as any party shall specify by written notice so
given), and shall be deemed to have been delivered as of the date so delivered
or three (3) days after mailing.
(b) VLW Corp. shall act as the representative of VLW and VLW
Transferees and VLW Corp. shall deliver any notice or elections or consents
under this Agreement, from VLW Corp., Affiliated Stockholder and VLW
Transferees, such that only one notice, election or consent reflecting the
combined instructions or directions of all such parties shall be delivered to or
by VLW Corp. on behalf of all such parties. CEA II, Ltd. shall not be
responsible for allocating, coordinating or apportioning any of the rights of
VLW or VLW Transferees under this Agreement. [Any notice as to the Rights of
Refusal, Offered VLW Shares and Offered VLW 144 Sales shall specify only one
price per share per notice.]
10.2 BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective permitted
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators or assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
10.3 ENTIRE AGREEMENT. This Agreement constitutes the final written
expression of all of the agreements between the parties with respect to the
subject matter hereof, supersedes all understandings and negotiations concerning
the matters specified herein. No addition to or modification of any provision of
this Agreement shall be binding upon any party unless made in writing and signed
by all parties.
10.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida as such laws are applied by
Florida courts to agreements entered into and to be performed in Florida by and
between residents of Florida.
<PAGE>
10.5 HEADINGS. Headings of the Sections of this Agreement are for the
convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
10.6 SEVERABILITY. If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid as applied to any particular case or in all cases, such
circumstances shall not have the effect of rendering such provision invalid in
any other case or of rendering any of the other provisions of this Agreement
inoperative, unenforceable or invalid.
10.7 ASSIGNABILITY. Except as specifically provided herein, neither this
Agreement nor any of the parties' rights hereunder shall be assignable by any
party hereto without the prior written consent of the other parties hereto.
10.8 ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or its breach which is not settled between the parties, shall be
settled by arbitration in accordance with the then governing rules of the
American Arbitration Association, with proceedings to take place in Miami,
Florida. Judgment upon any arbitration award may be entered and enforced in any
court of competent jurisdiction. An arbitration award may cover all costs, legal
fees and other charges reasonably incurred by the prevailing party in such
proceedings.
10.9 REMEDIES. Subject to the election and waiver of remedies under
Section 3.2(b) the parties hereto shall be entitled to enforce their rights
under this Agreement specifically, to recover damages by reason of any breach of
any provision hereof, and to exercise all other rights existing in their favor.
VLW and CEA II, Ltd. agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that
either of them may apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief in order to enforce or prevent
any violation of the provisions of this Agreement, notwithstanding the
provisions hereof requiring arbitration of other controversies or claims
hereunder.
10.10 COSTS AND EXPENSES. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of a dispute or
alleged breach or default in connection with any of the provisions of this
Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorney's fees, expenses, and other costs incurred in that action or
proceeding, at both trial and appellate levels.
Balance of This Page
Intentionally Left Blank
IN WITNESS WHEREOF, this Irrevocable Proxy, Right of Refusal and
Tag-Along Agreement has been executed as of the day and year first above
written.
<PAGE>
VENTURE LW CORPORATION
By: /s/ LOUIS WOLFSON, III
-----------------------------------
Name: Louis Wolfson, III
Title: President
-----------------------------
/s/ LOUIS WOLFSON, III
-----------------------------------
Louis Wolfson, III, individually
CEA INVESTORS PARTNERSHIP II, LTD.
By: CEA Investors, Inc.,
general partner
By: /s/ T.W. CARDY
-------------------------------
Thomas W. Cardy,
Title: Vice President
----------------------------
The undersigned hereby acknowledges and agrees to be bound by the provisions of
Section 5 and Section 6 of this Agreement and any other reference to it in the
Agreement.
STARNET/CEA II Partners
a Delaware general partnership
By: CEA INVESTORS PARTNERSHIP II,
LTD., general partner
By: CEA INVESTORS, INC. its
general partner
By: /s/ T.W. CARDY
------------------------------
Thomas W. Cardy,
Title: Vice President
------------------------
<PAGE>
By: STARNET INTERACTIVE
ENTERTAINMENT, INC.
By: /s/ ALAN McGLADE
-------------------------------
Name: Alan McGlade
-----------------------------
Title: President
----------------------------
<PAGE>
IRREVOCABLE PROXY
The undersigned stockholder of VIDEO JUKEBOX NETWORK, INC., a Florida
corporation (the "Company"), hereby irrevocably appoints ______________________
(the "Proxy"), a designee of CEA Investors Partnership II, Ltd., a limited
partnership organized under the laws of the State of Florida, the attorney and
proxy of the undersigned, with full power of substitution, to the extent
permitted under the Agreement (defined herein), to vote in such manner as each
such attorney and proxy of his substitute shall in his sole discretion deem
proper, and otherwise to act with respect to the 697,067 shares of Common Stock,
par value $.001 per share, of the Company (the "Common Stock") which are (a)
owned of record by the undersigned, or (b) beneficially owned by the undersigned
and held of record by VJN Partners, a dissolved Florida general partnership, and
with respect to any other shares of the Company's Common Stock hereafter
acquired by the undersigned in respect of any of such shares, including any
capital stock of the Company or subsidiaries or affiliated companies acquired by
operation of law, such as by merger, or consolidation or spin-off; or by reason
of any stock split, reclassification, share exchange or other reconstitution of
the outstanding capital stock of the Company (all of which shares, however
acquired, are herein referred to as the "Voting Shares"). The attorney and proxy
so appointed and designated is specifically granted the rights and
authorizations:
(a) To attend any and all meetings of the stockholders of the Company
in the name, place and stead of the undersigned with respect to any or all of
the Voting Shares, including the right to present such shares to be counted as
attending the meeting by proxy for purposes of establishing a quorum, or the
right to withhold such Shares in whole or in part from attendance at any such
meeting;
(b) To cast such votes at any meeting of the stockholders and any
adjournment thereof as shall be entitled to be cast by the holders of the Voting
Shares in such manner as the Proxy shall, in its sole discretion, determine, or
to withhold such Shares in whole or in part from voting at any time or for any
reason;
(c) To execute any documents required or advisable, in the sole
discretion of the Proxy, to be executed by the holder of the Voting Shares,
including the call of any special meeting of the stockholders, waiver of notice
of any meeting of the stockholders, written consents of stockholders, whether
unanimous or otherwise, ballots, attendance records or any other similar
document; and
(d) To do any or all of the foregoing on behalf of the holder of the
Voting Shares to the same effect as if such holder had taken such actions
directly, notwithstanding any actual or alleged conflict of interest on the part
of any holder of the Voting Shares or of CEA Investors
<PAGE>
Partnership II, Ltd. or the Proxy of any of their respective affiliates. As used
herein, the "holder of the Voting Shares" shall mean the record or beneficial
holder of such shares, as the case may be, or any other person, in each case who
or which is the person entitled or permitted to exercise the voting rights or
other stockholder rights as described above, with respect to the Voting Shares
involved.
This Irrevocable Proxy is subject to all the terms and conditions of
that certain Irrevocable Proxy, Right of Refusal and Tag-Along Agreement between
the undersigned and CEA Investors Partnership II, Ltd., dated as of August 27,
1993 (the "Agreement"), and shall terminate in accordance with that document.
The terms and conditions of the Agreement shall be binding on the Proxy, its
successors and permitted assigns.
Date executed:
---------------------
/s/ LOUIS WOLFSON
--------------------------------
Louis Wolfson, III
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. _____)*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class Securities)
92656G 10 8
----------------------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JULY 20, 1993
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [X]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 8,587,269
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,169,816
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
8,694,193
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
54.6%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 8,587,269
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,169,816
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
8,694,193
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
54.6%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 100,000
Beneficially 8. Shared Voting Power
Owned By 8,594,193
Each 9. Sole Dispositive Power
Reporting 100,000
Person With 10. Shared Dispositive Power
7,176,740
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
8,694,193
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
54.6%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: To Be Applied For
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
WC
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 8,587,269
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,169,816
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
8,694,193
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
54.6%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Schedule 13D is jointly filed by the persons listed on the
execution pages hereof (the "Reporting Persons") pursuant to the Joint Filing
Agreement filed as Exhibit 1.
This Schedule 13D is the first Schedule 13D filed by the Reporting
Persons (as a "group" pursuant to Rule 13d-5(b)(1)). The group which has agreed
to act together to consummate the transactions described in this Schedule 13D
includes the Reporting Persons. StarNet, Inc. ("StarNet"), Lenfest
Communications, Inc. ("LCI"), and H.F. Lenfest ("Lenfest"). StarNet, LCI and
Lenfest will be filing a separate Schedule 13D.
Liberty Program Investments, Inc. ("Liberty") is a record owner of
shares of Common Stock of Video Jukebox Network, Inc. Liberty may be affiliated
with LCI and StarNet. Liberty may be deemed a beneficial owner of the shares to
be acquired by StarNet/CEA II Partners (the "Joint Venture") and accordingly,
Liberty may be deemed a member of the group, however, the Reporting Persons
believe Liberty will disclaim participation in the group and the Reporting
Persons have insufficient knowledge or information to determine whether or not
Liberty is part of the group.
The Partnership intends to acquire an irrevocable voting proxy from
Venture LW Corporation a beneficial owner of shares of the Company's Common
Stock. Venture LW Corporation may be deemed to be a member of the group,
however, the Reporting Persons do not believe Venture LW Corporation is a member
of the group and believe Venture LW Corporation will disclaim participation in
the group.
This Schedule 13D is the first Schedule 13D filed by CEA Investors
Partnership II, Ltd., CEA Investors, Inc., and J. Patrick Michaels, Jr. (the
"CEA Group") subsequent to the filing by the CEA Group of Amendment No. 1
("Amendment") dated July 7, 1993, to the Schedule 13D dated June 18, 1993 filed
by the CEA Group. Schedule 13D dated June 18, 1993, as amended by the Amendment,
and it and its exhibits are incorporated herein by reference.
Item 1. Security And Issuer
The class of securities to which this statement relates is the common
stock, par value $.001 per share (the "Common Stock"), of Video Jukebox Network,
Inc., a Florida corporation (the "Company"). The principal executive officers of
the Company are J. Patrick Michaels, Jr., Chairman and Acting Chief Executive
Officer, Jules Haimovitz, Acting President and Luann M. Simpson, Chief Financial
Officer and Chief Administrative Officer. Mr. Michaels business address is 101
East Kennedy Boulevard, Suite 3300, Tampa, Florida 33602. The business address
of Mr. Haimovitz and Ms. Simpson is the address of the Company's principal
office at 12000 Biscayne Boulevard, Miami, Florida, 33181.
Item 2. Identity And Background
This statement is jointly filed by the following Reporting Persons:
1. CEA Investors Partnership II, Ltd., a Florida limited
partnership (the "Partnership"). The principal business of the Partnership is to
hold title to and otherwise deal with investment interests in the Company
including shares of Common Stock. The principal office and the address of the
principal business of the Partnership is 101 East Kennedy Boulevard, Suite 3300,
Tampa, Florida, 33602.
The Partnership has not, during the last five years, (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or (ii) been a party to a civil proceeding of a judidical or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree, or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
2. CEA Investors, Inc., a Florida corporation ("CEA
Investors"). The principal business of CEA Investors is serving as the sole
General Partner of the Partnership. The principal office and the address of the
principal business of CEA Investors is 101 East Kennedy Boulevard, Suite 3300,
Tampa, Florida, 33602.
6
<PAGE>
CEA Investors has not, during the last five years, (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree, or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
3. J. Patrick Michaels, Jr., ("Michaels"). Michaels is a U.S.
citizen and the sole Director, President, and sole shareholder (through the
revocable John P. Michaels, Jr. Family Trust) of CEA Investors. Michaels'
business address is 101 East Kennedy Boulevard, Suite 3300, Tampa, Florida,
33602. The principal business occupation of Michaels is Chairman of the Board
and Chief Executive Officer of Communications Equity Associates, Inc., a Florida
corporation ("CEA"), engaged in brokerage, investment banking, mergers, and
acquisitions in the communications industry. The principal business address of
CEA is 101 East Kennedy Boulevard, Suite 3300, Tampa, Florida, 33602.
Michaels has not, during the last five years, (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree, or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
4. StarNet/CEA II Partners ("Joint Venture"), a Delaware
general partnership and a joint venture to be formed between the Partnership and
StarNet. (For further discussion see Item 6.) The principal business occupation
of the Joint Venture is the proposed acquisition of a controlling interest in
the outstanding Common Stock of the Company, as described herein, and the
exercise of control over management of the Company. The Joint Venture's
principal office and the address of the principal business is 101 East Kennedy
Boulevard, Suite 3300, Tampa, Florida, 33602.
The Joint Venture has not, during the last five years, (i)
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree, or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
In addition to the Reporting Persons, H. Gene Gawthrop
("Gawthrop") and Thomas W. Cardy ("Cardy") are persons enumerated in Instruction
C to this Schedule as to which the information called for in Items 2 through 6
of this Schedule must be given. Gawthrop is a U.S. citizen and the Executive
Vice President, and Secretary, of CEA Investors. The principal business
occupation of Gawthrop is Executive Vice President of CEA. See Number 3, above,
for the business of CEA.
Gawthrop has not, during the last five years, (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree, or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Cardy is a U.S. Citizen and the Vice President, Treasurer and Assistant
Secretary of CEA Investors. The principal business occupation of Cardy is Senior
Vice President of CEA. See number 3, above, for the business of CEA.
Cardy has not, during the last five years, (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), or
(ii) been a party to a civil proceeding of a judidical or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree, or final order
7
<PAGE>
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Except with respect to the shares of Common Stock held of record or
purchasable by Liberty, each of the Reporting Persons, Gawthrop and Cardy, other
than the Joint Venture, expressly declares that the filing of this Schedule
shall not be construed as an admission that such person is, for the purposes of
Section 13(d) or 13(g) of the Act, the beneficial owner of any securities
covered by this Schedule.
With respect to the shares of Common Stock held of record or
purchasable by Liberty, each of the Reporting Persons, Gawthrop and Cardy
expressly declares that the filing of this Schedule shall not be construed as an
admission that such person is, for the purposes of Section 13(d) or 13(g) of the
Act, the beneficial owner of any such securities held by or purchasable by
Liberty.
Item 3. Source And Amount Of Funds Or Other Consideration
On July 12, 1993 the Board of Directors approved the issuance of
100,000 shares of Common Stock as compensation for Michaels' service as Chairman
and acting Chief Executive Officer of the Company. Mr. Michaels will receive
such shares as compensation with no payment required. Mr. Michaels and the
Company have fixed the value of such shares at $0.40625 per share or $40,625 in
the aggregate.
In connection with the formation of the Joint Venture, StarNet intends
to make a capital contribution of $3,200,00 to the Joint Venture for its
interest in the Joint Venture. The Partnership will contribute as capital its
2,834,908 shares of Common Stock for its interest in the Joint Venture. In
addition, each of StarNet and the Partnership will contribute approximately
$50,000 ($100,000 in the aggregate) to pay for expenses of organization of the
Joint Venture and to provide capital for other transactions contemplated and
described herein.
The Joint Venture intends to use the $3,200,000 of capital (a) to
purchase 2,834,908 shares of Common Stock for an aggregate price of $2,000,000
from New Vision Music, a company controlled by or affiliated with Donald E.
Newhouse and S.I. Newhouse Jr. (collectively the "Newhouse Group") which shares
are subject to rights of refusal described in Item 6, and (b) to purchase from
the Company 1,500,000 shares of Common Stock for an aggregate price of
$1,200,000 or $.80 per share.
In order to accommodate the potential exercise of certain preemptive
rights by Liberty, the Company intends to offer an aggregate of 1,645,000 shares
of Common Stock to the Joint Venture and Liberty, provided Liberty will be
entitled to purchase up to approximately 8.4% or 138,180 shares of Common Stock
out of such 1,645,000 shares. If Liberty does not exercise its preemptive
rights, the Joint Venture intends to purchase only 1,500,000 shares. In the
event Liberty exercises such preemptive rights and purchases 138,180 shares,
then the Joint Venture intends to purchase 1,500,000 shares of Common Stock for
an aggregate price of $1,200,000 plus an additional 6,820 shares for an
aggregate price of $5,456 or $.80 per share. The source of funds for the
purchase of such additional 6,820 shares by the Joint Venture will be capital of
the Joint Venture contributed equally by the Partnership and by StarNet. The
source of such funds to be provided by the Partnership will be capital
contributions from its partners.
The Partnership has an agreement in principle, subject to the execution
of definition agreements, to acquire an irrevocable proxy to vote the 1,417,453
shares of Common Stock held of record by Venture LW Corporation. The Partnership
does not intend to pay for the proxy it will receive from Venture LW
Corporation, however, the Partnership believes the proxy will be granted to the
Partnership and a right of refusal with respect to Venture LW Corporation's
shares will be granted to the Joint Venture, in consideration for certain
agreements by the Joint Venture and the Partnership, including the proposed
grant of so called "tag along" rights, in favor of Venture LW Corporation in the
event of any sale or registration of or merger affecting the shares of Common
Stock held by the Joint Venture or any sale of the Partnership's interest in the
Joint Venture.
Item 4. Purpose Of Transaction.
8
<PAGE>
The principal purposes of the Joint Venture are to acquire control of
the outstanding Common Stock of the Company, through acquisition and purchase of
and by obtaining proxies on shares of Common Stock; to obtain for the Company
access to certain technology of StarNet and access to satellite transmission
capability controlled by StarNet; to manage the acquired equity interests in the
Company; to change the composition of the Company's Board of Directors; to cause
the Company to enter into a management agreement with StarNet and to elect new
officers of the Company. After the transactions contemplated are consummated,
the Joint Venture will have the right, by ownership or proxy, to vote a majority
of the outstanding shares of Common Stock and therefore to elect all directors
of the Company.
The Joint Venture and Reporting Persons reserve the right to, and may
in the future, change their purposes or plans with respect to their investment
in or proxies for shares of Common Stock, including without limitation the
acquisition of additional shares of Common Stock. The Joint Venture may seek
voting proxies from additional shareholders in connection with its purposes and
plans or otherwise. Except for the foregoing, as of the date of this statement,
the Joint Venture and other Reporting Persons have no present plans or proposals
which relate to or would result in any of the actions described in paragraphs
(a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest In Securities Of The Issuer.
On July 12, 1993, the Board of Directors of the Company authorized
issuance of 100,000 shares of Common Stock to Michaels as compensation. In
accordance with the Company's agreement with Liberty, the Company gave written
notice to Liberty affording Liberty an opportunity to exercise certain
preemptive rights. Accordingly, the shares are not issuable by the Company to
Michaels until the 20th day following July 16, 1993. When issued, Michaels will
have sole voting and sole dispositive power with respect to such 100,000 shares.
The 100,000 shares are included in the number of shares listed as beneficially
owned by each of the Reporting Persons in their responses to Item 11 on the
cover page filed herewith for each Reporting Person, pursuant to Rule
13d-5(b)(1).
The total number of shares of Common Stock issued and outstanding as of
July 2, 1993 according to a report of the Company's transfer agent was
14,323,663.
As described in Item 6 herein, the Joint Venture intends to acquire a
proxy to vote 1,417,453 shares held by Venture LW Corporation; intends to
acquire 2,834,908 shares from the Partnership as a capital contribution to the
Joint Venture; intends to purchase 1,500,000 shares from the Company; and
intends to purchase 2,834,908 shares from New Vision Music. Assuming the
consummation of the foregoing transactions and the issuance of the
aforementioned shares to Michaels, the aggregate number of shares of Common
Stock issued and outstanding will be 15,923,663. Assuming the consummation of
the foregoing transactions, and as a result of the rights granted to the Joint
Venture to acquire the proxy and shares described above:
(A) Each of the Partnership, CEA Investors, and the Joint Venture
may be deemed to beneficially own 8,694,193 shares of Common
Stock, to have shared power to vote or to direct the vote with
respect to 8,587,269 shares of Common Stock, to have shared
power to dispose or to direct the disposition with respect to
7,169,816 shares of Common Stock and no shares of Common Stock
for which any such reporting persons has sole voting power or
sole dispositive power.
(B) Michaels may be deemed to beneficially own 8,694,193 shares of
Common Stock, to have sole power to vote or to direct the vote
with respect to 100,000 shares, to have shared power to vote
or to direct the vote with respect to 8,594,193 shares, to
have sole power to dispose or to direct the disposition of
100,000 shares and to have shared power to dispose or to
direct the disposition of 7,176,740 shares of Common Stock.
Each of the Reporting Persons may be deemed to beneficially own the following
shares which were excluded from their respective responses listed in Item 11 on
the cover page filed herewith relating to each Reporting Person:
9
<PAGE>
(A) The shares of Common Stock purchasable by Liberty in the event
it exercises its preemptive rights with respect to (i) the
issuance of 100,000 shares to Michaels, (ii) the contemplated
sale of 1,506,820 shares by the Company to the Joint Venture,
(1,500,000 shares in the event Liberty fails to exercise its
preemptive rights);
(B) The 1,203,464 shares of Common Stock held of record by
Liberty; and
(C) Shares issuable upon conversion of accrued principal and
interest under a convertible note ("Convertible Note")
issuable, at the Company's election, to Digital Satellite
Networks ("DSN"), a division of StarNet in cooperation with
MicroNet, Inc. (an affiliate of StarNet). In the event the
Company elects to defer up to $2,400,000 of payments, plus
interest thereon at prime plus one percent, payable during the
first year under the proposed contract between the Company and
DSN for lease of a transponder and related satellite uplink
services, the Convertible Note will be issued and convertible
into shares of Common Stock at a conversion price of $1.25 per
share through thirty six months from its issuance. If the
Company elects to pay the $200,000 per month fees to DSN in
the first year of the lease agreement, rather than defer
payments, the Convertible Note will not be issued.
Gawthrop may be deemed to be the beneficial owner of 8,659,347 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote, 8,587,269 shares as to which there is
shared power to vote or to direct the vote, 1,154 shares as to which there is
sole power to dispose or to direct the disposition, and 8,587,269 shares as to
which there is shared power to dispose or to direct the disposition.
Cardy may be deemed to be the beneficial owner of 8,695,347 shares of
Common Stock with 1,154 shares of Common Stock as to which there is sole power
to vote or to direct the vote, 8,587,269 shares as to which there is shared
power to vote or to direct the vote, 1,154 shares as to which there is sole
power to dispose or to direct the disposition, and 8,587,269 shares as to which
there is shared power to dispose or to direct the disposition.
Item 6. Contracts, Arrangements, Understandings Or Relationships With Respect
To Securities Of The Issuer.
1,166,667 of the shares of Common Stock beneficially owned by the
Partnership are "pledged" as security for payment of a note ("Note") issued by
VJN Partners to Steven A. Peters ("Peters") in connection with the purchase of
3,500,000 shares by VJN Partners from Peters on June 3, 1988. The Partnership
acquired its ownership interest in such 1,166,667 shares upon dissolution of VJN
Partners on December 7, 1992. 1,166,667 of the shares of Common Stock
beneficially owned by New Music Vision are also subject to such pledge in favor
of Peters. Obligations under the Note were assumed by all former general
partners of VJN Partners. The Note was due on June 3, 1993. Former general
partners of VJN Partners have had discussions with Peters. Peters has offered to
forebear collection of the Note subject to certain conditions. To date no action
has been taken by Peters to collect the Note. Upon payment of the Note, such
shares pledged by the Partnership will be available for contribution by the
Partnership to the Joint Venture and such shares pledged by New Music Vision
will be available for sale to the Joint Venture. The Partnership believes the
Note will be paid from funds set aside by the obligors and that the pledged
shares will be free of the pledge for transfer.
On June 3, 1988, Peters granted a proxy to VJN Partners to vote 500,000
shares of Common Stock held of record by Peters. VJN Partners appointed the
Partnership as VJN Partners' substitute to vote as proxy 166,667 of such Common
Stock held by Peters. The Proxy expired on June 3, 1993.
The Partnership and the Venture LW Corporation, affiliated with Louis
Wolfson, III and the Louis Wolfson, III Maternal Trust, have agreed in principle
subject to the execution of a definitive agreement, to provide for the grant of
an irrevocable voting proxy from Venture LW Corporation in favor of the
Partnership with respect to the 1,417,453 shares of Common Stock beneficially
owned by Venture LW Corporation. Venture LW Corporation has offered to grant a
right of refusal in favor of the Joint Venture with respect to any proposed
transfer of the shares held of record by Venture LW corporation.
10
<PAGE>
The Partnership, the Joint Venture and Venture LW Corporation have also
agreed in principle that the Joint Venture intends to grant certain so called
"tag along" rights in favor of Venture LW Corporation in the event of a possible
private sale or sale by registration or merger affecting the shares of common
stock held by the Joint Venture or any sale of the Partnership's interest in the
Joint Venture. The voting proxy from Venture LW Corporation will be granted
solely in favor of the Partnership. The Partnership intends to vote the shares
subject to the proxy in the same manner as the Joint Venture votes its shares.
The Partnership and StarNet have agreed in principle that the Joint Venture will
vote its shares only as agreed to by the Partnership and StarNet.
Pursuant to a letter agreement dated July 23, 1993 (the "Letter of
Intent") (copy attached as Exhibit 2) from H.F. (Gerry) Lenfest, on behalf of
StarNet, and accepted by the Partnership on July 26, 1993, the parties have
agreed, subject to certain conditions precedent, to form the Joint Venture for
the principal purposes of acquiring control of the outstanding shares of Common
Stock, the Board of Directors and management of the Company and obtaining for
the Company access to certain technology of StarNet and access to satellite
transmission capability controlled by StarNet. The Partnership has agreed to
contribute to the capital of the Joint Venture 2,834,908 shares of Common Stock
with an agreed value for capital account purposes of $3,200,000. StarNet has
agreed to contribute $3,200,000 to the capital of the Joint Venture. In
addition, StarNet and the Partnership have each agreed to contribute
approximately $50,000 ($100,000 in the aggregate) as additional capital to the
Joint Venture.
By letter dated July 26, 1993, CEA, on behalf of the Joint Venture,
transmitted to the Company's investment banker a letter of intent ("Company
Letter of Intent") dated July 23, 1993, from the Partnership and StarNet
addressed to the Board of Directors of the Company (copy of both letters
attached as Exhibit 3). The Joint Venture has asked the Company to acknowledge
and confirm the approval in principle of the transactions outlined in the
Company Letter of Intent by the close of business on Tuesday, July 27, 1993.
The transactions contemplated by the Joint Venture are subject to the
following conditions precedent: (a) waiver of certain rights of refusal held by
the former partners of VJN Partners including Video Holding Corporation, New
Vision Music, Venture LW Corporation and the Partnership; (b) the release of the
shares of common stock beneficially owned by the Partnership and by New Vision
Music which are pledged and held in escrow to secure payment of the Note held by
Peters; and (c) the execution of certain business contracts between the Company
and StarNet and companies or joint ventures affiliated with StarNet and the
Partnership. The Joint Venture has set August 16, 1993 as the closing deadline,
unless mutually extended, for execution of the agreements documenting conditions
precedent and the contemplated transactions.
The Joint Venture and New Vision Music have agreed in principle that
the Joint Venture will purchase 2,834,908 shares of Common Stock held of record
by New Vision Music (affiliated with the Newhouse Group) for an aggregate
purchase price of $2,000,000.
The Company will offer 1,645,000 shares of Common Stock to the Joint
Venture and to Liberty, in accordance with the Company's obligations to afford
Liberty preemptive rights. In the event Liberty elects to exercise its
preemptive rights it will purchase up to 138,180 shares of Common Stock. If
Liberty exercises such preemptive rights, the Joint Venture intends to purchase
1,500,000 shares plus an additional 6,820 shares of Common Stock. In the event
Liberty fails to exercise such preemptive rights to purchase 138,180 shares,
then the Joint Venture intends to purchase only 1,500,000 shares for an
aggregate purchase price of $1,200,000.
The Company has agreed to grant registration rights to the Joint
Venture with respect to the 1,500,000 (or 1,506,820) shares the Joint Venture
intends to purchase from the Company. In the event the Company files a
registration statement for the sale of securities under the Securities Act of
1933, the Company will include in the registration statement an amount of such
shares held by the Joint Venture as the Joint Venture may elect to include,
subject to priority registration rights previously granted by the Company to
Liberty and further subject to any limitations imposed by the underwriters
participating in such registered offering of securities, pursuant to a
Registration Rights Agreement to be negotiated, which may include rights to
register other shares owned by the Joint Venture.
11
<PAGE>
Under the Joint Venture Agreement, the shares of Common Stock acquired
by contribution from the Partnership (2,834,908), by purchase from New Vision
Music (2,834,908) and by purchase from the Company (1,500,000 or 1,506,820) will
be held of record by the Joint Venture. The interests of the Partnership and
StarNet in all of such shares will be determined in accordance with the
allocation provisions of the Joint Venture Agreement which provide for
allocations of profits, income, losses and deductions on an equal basis and
distributions in accordance with capital accounts.
The Joint Venture is a general partnership with the Partnership and
StarNet as its sole general partners. The Partnership's general partner is CEA
Investors, which is controlled by Michaels. If for any reason Michaels ceases to
control CEA Investors, the Partnership has agreed that the Chief Executive
Officer of CEA will be substituted in place of Michaels. Any other person
seeking to acquire control of the Partnership will require the approval of
StarNet, which approval will not be unreasonably withheld.
The Partnership and StarNet intend to grant rights of refusal to each
other with respect to any proposed transfer to a third party of their respective
interests in the Joint Venture.
Upon the closing of the purchase of the 1,500,000 (or 1,506,820) shares
of Common Stock by the Joint Venture from the Company, all of the existing
members of the Board of Directors will be asked to resign except for J. Patrick
Michaels, Jr., Joel Rudich, Leonard Sokolow, Jules Haimovitz and Joseph Furfaro.
The number of members of Board of Directors will be reduced to seven and the
remaining directors will appoint H.F. Lenfest and Alan McGlade (each nominees
and affiliates of StarNet) to serve on the Board of Directors until the election
of directors at the next annual meeting of shareholders of the Company.
The Company intends to enter into a management agreement ("Management
Agreement") with StarNet. StarNet will have management control of the Company's
domestic operations for three years with a management fee of $300,000 per annum
for the first year, paid in advance in equal monthly installments. The
management fee for the second and third year will be as agreed upon by StarNet
and the Company's Board of Directors, taking into account the performance and
operating status of the Company, but the fee will not be less than $150,000 per
year. The Joint Venture intends to cause the Board of Directors to elect H.F.
Lenfest Chairman of the Board of Directors for three years and Michaels will be
elected Vice Chairman. Alan McGlade of StarNet will be elected acting Chief
Executive Officer. StarNet intends to search for an individual to serve as Chief
Executive Officer or Chief Operating Officer as an employee of the Company.
The Company intends to enter into or extend certain business
arrangements and contracts with StarNet and CEA and companies or joint ventures
affiliated with StarNet and the Partnership, whereby the Company will receive
rights to use certain technology relating to its business, management services,
satellite time and uplink service, investment banking services, and technology
development assistance. These proposed arrangements and contracts are more
fully described in Exhibit 3. The proposed arrangements regarding the national
satellite uplink access and service, management contracts, technology
development and investment banking relationships, are conditions precedent to
the Joint Ventures' agreement to purchase Common Stock from the Company.
Transfer of the shares held of record by the Partnership, to be
contributed to the Joint Venture, and the shares held of record by New Vision
Music, to be sold to the Joint Venture, is subject to rights of first refusal
held by Venture LW Corporation, Video Holdings Corporation, the Partnership and
New Vision Music pursuant to the Dissolution Agreement dated December 7, 1992
between such parties as to the dissolution of VJN Partners. Waiver of such
rights of first refusal is a condition precedent to the Joint Venture's closing
of the proposed transactions. The Joint Venture intends to seek and expects to
receive waiver and termination of such rights of first refusal from all parties
holding such rights. In any event, such rights of refusal expire on December 31,
1993.
12
<PAGE>
Item 7. Material To Be Filed As Exhibits
Exhibit 1. Joint Filing Agreement with respect to the
joint filing of Schedule 13D and all amendments
thereto.
Exhibit 2. Letter of Intent dated July 23, 1993 between
H.F. (Gerry) Lenfest on behalf of StarNet, Inc.
and accepted by CEA Investors Partnership II,
Ltd. on July 26, 1993.
Exhibit 3. Transmittal letter dated July 26, 1993 from CEA
on behalf of the Joint Venture along with
Company Letter of Intent dated July 23, 1993
from CEA Investors Partnership II, Ltd. and
StarNet, Inc. to Board of Directors of Video
Jukebox Network, Inc.
13
<PAGE>
SCHEDULE 13D
SIGNATURES
The undersigned, after reasonable inquiry and to the best of
their knowledge and belief, certify that the information set forth in this
statement is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, LTD CEA INVESTORS, INC. a Florida Corporation
a Florida limited partnership
By: CEA Investors, Inc.,
General Partner
By: /s/ H. GENE GAWTHROP By: /s/ H. GENE GAWTHROP
-------------------------------- ------------------------------------
As: Vice President As: Vice President
-------------------------------- ------------------------------------
Dated: JULY 27, 1993 Dated: JULY 27, 1993
/s/ J. PATRICK MICHAELS, JR.
- -----------------------------------
J. Patrick Michaels, Jr.
Dated: JULY 27, 1993
STARNET/CEA II PARTNERS
By: CEA Investors Partnership II, Ltd.,
a Florida Limited Partnership, its
General Partner
By: CEA Investors, Inc., General Partner
By: /s/ H. GENE GAWTHROP
------------------------------------
As: Vice President
------------------------------------
Dated: JULY 27, 1993
14
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class Securities)
92656G 10 8
-----------
(CUSIP Number)
JOHN G. IGOE, ESQ.
EDWARDS & ANGELL
250 ROYAL PALM WAY
PALM BEACH, FLORIDA 33480
(407) 833-7700
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
AUGUST 6, 1993
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,545,738
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,136,928
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,652,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.1%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,545,738
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,136,928
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,652,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.1%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 100,000
Beneficially 8. Shared Voting Power
Owned By 10,552,662
Each 9. Sole Dispositive Power
Reporting 100,000
Person With 10. Shared Dispositive Power
7,143,852
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,652,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.1%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: To be applied for
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
WC
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,545,738
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,136,928
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,652,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.1%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 1 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), is jointly filed by the persons
listed on the execution pages hereof (the "Reporting Persons") pursuant to the
Joint Filing Agreement filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michael's, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. Schedule 13D dated June
18, 1993, as amended by Amendment No. 1 dated July 7, 1993 and it and its
exhibits as well as the July Statement and its exhibits are incorporated herein
by reference. Capitalized terms not defined herein shall have the meanings
defined in the July Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose changes in the status of
negotiations and terms of proposed transactions with respect to which the
Reporting Persons have agreed to act together to consummate. Items 7, 8, 9,
10, 11 and 13 of the cover pages filed herewith have been amended to reflect
numbers of shares of Common Stock as appropriate in light of the amendments
described below.
Item 2 of the July Statement is hereby amended and supplemented as follows:
Item 2. Identity And Background
With respect to the formation of the Joint Venture, StarNet, Inc.
("StarNet") informed the Partnership that it intends to participate in the Joint
Venture through StarNet Interactive Entertainment, Inc. ("StarNet INT"), a newly
organized Delaware corporation and a wholly owned subsidiary of StarNet.
Accordingly, StarNet INT, and not StarNet, will be the co-general partner along
with the Partnership in the Joint venture.
Liberty Program Investments, Inc. ("Liberty") is a record owner of
shares of Common Stock of the Company. Liberty is an affiliate of Liberty Cable,
Inc., a Wyoming corporation ("Liberty Cable"), the beneficial owner of 50% of
the outstanding Common Stock of LCI. The Reporting Persons specifically disclaim
any beneficial interest in the shares of the Common Stock beneficially owned by
Liberty or by Liberty Cable.
Liberty and Liberty Cable may be deemed beneficial owners of the shares
of Common Stock of the Company to be acquired by the Joint Venture. Because of
the contractual arrangements among the stockholders of LCI which grant to
Lenfest the exclusive right to control the majority of the Board of Directors of
LCI and the management and business affairs of LCI and its subsidiaries, Liberty
and Liberty Cable have informed the Reporting Persons that Liberty and Liberty
Cable disclaim participation in the group and any beneficial ownership of the
shares of the Common Stock of the Company to be acquired by the Joint Venture.
In connection with the transactions contemplated in connection with the
formation of the Joint Venture, the Partnership intends to acquire an
irrevocable voting proxy from Venture LW Corporation, a beneficial owner of
shares of the Company's Common Stock. Venture LW Corporation may be deemed to be
a member of the group by reason of the discussions concerning its
6
<PAGE>
contemplated grant of an irrevocable proxy and other agreements to be entered
into with the Partnership and the Joint Venture; however, the Reporting Persons
do not believe Venture LW Corporation is a member of the group solely by reason
of such agreements or for any other reason. The Reporting Persons believe that
Venture LW Corporation will disclaim participation in the group.
In connection with the transactions contemplated in connection with the
formation of the Joint Venture, the Partnership intends to acquire an
irrevocable voting proxy from Video Holding Corporation, a beneficial owner of
shares of the Company's Common Stock. Video Holding Corporation may be deemed to
be a member of the group by reason of the discussions concerning its
contemplated grant of an irrevocable proxy and other agreements to be entered
into with the Partnership and the Joint Venture; however, the Reporting Persons
do not believe Video Holding Corporation is a member of the group solely by
reason of such agreements or for any other reason. The Reporting Persons believe
Video Holding Corporation will disclaim participation in the group.
Each of the Reporting Persons, other than the Joint Venture, expressly
declares that the filing of this Amendment shall not be construed as an
admission that such person is, for the purposes of Section 13(d) or 13(g) of the
Act, the beneficial owner of any securities covered by this Amendment.
Item 3 of the July Statement is hereby amended and supplemented as follows:
Item 3. Source And Amount Of Funds Or Other Consideration
If the Joint Venture successfully concludes the agreements and
arrangements described herein with the Company and certain other shareholders of
the Company, the Joint Venture intends to use approximately $3,242,000 of
capital (a) to purchase 2,114,520 shares of Common Stock (2,834,908 shares in
the event certain rights of refusal are not exercised) for an aggregate price of
approximately $1,491,794 or $.7055 per share from New Vision Music, which shares
are subject to rights of refusal described in Item 6, and (b) to purchase from
the Company for cash, and to acquire the right to purchase, pursuant to certain
convertible notes from the Company ("Convertible Notes"), up to 2,187,500 shares
of Common Stock for an aggregate purchase price and conversion price of
$1,750,000 or $.8O per share
In order to accommodate the potential exercise of certain preemptive
rights by Liberty, the Reporting Persons expect to negotiate an arrangement for
the Company to offer an aggregate of 2,386,537 shares of Common Stock to the
Joint Venture and Liberty, provided Liberty will be entitled to purchase up to
approximately 8.34% or 199,037 shares of Common Stock out of such 2,386,537
shares. Whether or not Liberty exercises such preemptive rights, the Joint
Venture intends to purchase up to an aggregate of 2,187,500 shares, including
shares underlying the Convertible Notes.
The source of funds for the proposed purchase of shares from New Vision
Music and from the Company and for the proposed purchase of the Convertible
Notes from the Company, in excess of $3,200,000 will be capital of the Joint
Venture contributed equally by the Partnership and StarNet INT.
The Partnership has negotiated an agreement in principle, subject to a
number of conditions, including the execution of definitive agreements, to
acquire an irrevocable proxy to vote shares of Common Stock beneficially owned
by Venture LW Corporation. Venture LW Corporation presently beneficially owns
1,417,453 shares of Common Stock, and the Reporting Persons believe that, if the
Joint Venture successfully concludes an agreement for the purchase of
7
<PAGE>
shares of Common Stock beneficially owned by New Vision Music, Venture LW
Corporation will acquire approximately 360,194 shares of Common Stock from New
Vision Music pursuant to the exercise of certain rights of refusal described in
Item 6 (1,777,647 shares in the aggregate). The Partnership does not intend to
pay monetary consideration for the proxy from Venture LW Corporation; however,
the Partnership expects that the definitive agreement with Venture LW
Corporation will provide that Venture LW Corporation will grant to the
Partnership an irrevocable proxy and certain rights of refusal on proposed sales
by Venture LW Corporation of any of its shares of Common Stock (which right of
refusal will be assignable to the Joint Venture) and that Venture LW Corporation
will waive (or not exercise) certain rights of refusal it may have in
consideration of the substantial financial investment in the Company and for
other arrangements with the Company to be made by the Joint Venture and its
affiliates and the grant by the Partnership of certain so called "tag along"
rights, in favor of Venture LW Corporation in the event of certain transactions
involving the sale or registration of or merger affecting the shares of Common
Stock held by the Joint Venture or the sale of the Partnership's interest in the
Joint Venture. The Partnership intends to request that the Joint Venture confirm
directly to Venture LW Corporation the grant of such "tag along" rights.
The Partnership has had discussions with Video Holding Corporation
("VHC") with respect to the grant by VHC of an irrevocable proxy to vote the
720,387 shares of Common Stock beneficially owned by VHC, the 720,387 shares of
Common Stock beneficially owned by VHC, the 550,582 shares of Common Stock of
VHC may acquire upon conversion of certain convertible debt instruments issued
by the Company to VHC and 360,194 shares of Common Stock which VHC may acquire
from New Vision Music pursuant to the exercise of certain rights of refusal
described in Item 6 (1,631,162 shares in the aggregate).
Based on the Partnership's discussions with VHC, the Reporting Persons
expect that the Partnership and the Joint Venture will reach an agreement in
principle with VHC subject to a number of conditions including the execution of
definitive agreements, for the grant by VHC to the Partnership of an irrevocable
proxy and rights of first refusal and the waiver of certain rights of refusal,
in consideration of the agreements of the Partnership and the Joint Venture with
the Company and VHC, all on terms substantially similar to those contained in
the arrangements with Venture LW Corporation described above and in Item 6.
Item 4 of the July Statement is hereby amended and supplemented as
follows:
Item 4. Purpose Of Transaction.
The principal purposes of the Joint Venture remain as set forth in Item
4 of the July Statement. Certain aspects of the contemplated transactions
require prior approval of the Federal Communications Commission ("FCC"). The
Joint Venture does not intend to close those aspects of the contemplated
transactions without first obtaining FCC approval. After the contemplated
transactions are consummated, the Joint Venture will have the right, by
ownership or proxy, to vote a majority of the outstanding shares of Common Stock
and therefore to elect all directors of the Company.
The Reporting Persons reserve the right to, and may in the future,
change their purposes or plans with respect to their investment in or proxies
for shares of Common Stock, including without limitation the acquisition of
additional shares of Common Stock. The Reporting Persons may seek voting proxies
from additional shareholders in connection with their purposes and plans or
otherwise. Except for the foregoing, as of the date of this
8
<PAGE>
statement, the Reporting Persons have no present plans or proposals which relate
to or would result in any of the actions described in paragraphs (a) through (j)
of Item 4 of Schedule 13D.
Item 5 of the July Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer.
As described in Item 6 herein, if the Joint Venture successfully
concludes the transactions described herein, the Joint Venture: expects to
acquire a proxy to vote the 1,417,453 shares of Common Stock beneficially owned
by Venture LW Corporation and the 360,194 shares of Common Stock which the
Reporting Persons believe that Venture LW Corporation will acquire from New
vision Music pursuant to the exercise of certain rights of refusal; will acquire
2,834,908 shares from the Partnership as a capital contribution to the Joint
Venture; expects to purchase and acquire the right to purchase pursuant to
Convertible Notes up to 2,187,500 shares from the Company; expects to purchase
approximately 2,114,520 shares from New Vision Music; and expects to acquire
proxies to vote (a) the 720,387 shares of Common Stock beneficially owned by
VHC, (b) the 360,194 shares which the Reporting Persons believe VHC will acquire
from New Vision Music pursuant to the exercise of certain rights of refusal, and
(c) the 550,582 shares of Common Stock which the Reporting Persons believe VHC
will acquire upon conversion of a convertible note issued by the Company to VHC.
Assuming the consummation of the foregoing transactions and the issuance of the
shares to Michaels described in the July Statement, the aggregate number of
shares of Common Stock issued and outstanding will be 17,161,744. Assuming the
consummation of the foregoing transactions, including the conversion of the
Convertible Notes upon that grant of required FCC approval, and as a result of
the rights granted to the Joint Venture to acquire the proxy and shares
described above:
(A) Each of the Partnership, CEA Inventors, and the Joint Venture may
be deemed to beneficially own 10,652,662 shares of Common Stock, to have shared
power to vote or to direct the vote with respect to 10,545,738 shares of Common
Stock, to have shared power to dispose or to direct the disposition with respect
to 7,136,928 shares of Common Stock and to have no shares of Common Stock for
which any such Reporting Persons has sole voting power or sole dispositive
power.
(B) Michaels may be deemed to beneficially own 10,652,662 shares of
Common Stock, to have sole power to vote or to direct the vote with respect to
100,000 shares, to have shared power to vote or to direct the vote with respect
to 10,552,662 shares, to have sole power to dispose or to direct the disposition
of 100,000 shares and to have shared power to dispose or to direct the
disposition of 7,143,852 shares of Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person including, without
limitation, the shares of Common Stock purchasable by Liberty in the event it
exercises its preemptive rights with respect to the contemplated sale of
2,187,500 shares by the Company, directly or through conversion of the
Convertible Notes.
Gawthrop may be deemed to be the beneficial owner of 10,653,816 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote, 10,545,738 shares as to which there is
shared power to vote or to direct the vote, 1,154 shares as to which there is
9
<PAGE>
sole power to dispose or to direct the disposition, and 7,136,928 shares as to
which there is shared power to dispose or to direct the disposition.
Cardy may be deemed to the beneficial owner of 10,653,816 shares of
Common Stock with 1,154 shares of Common Stock as to which there is sole power
to vote or to direct the vote, 10,545,738 shares as to which there is shared
power to vote or to direct the vote, 1,154 shares as to which there is sole
power to dispose or to direct the disposition, and 7,136,928 shares as to which
there is shared power to dispose or to direct the disposition.
Item 6 of the July Statement is hereby amended and supplemented as
follows:
Item 6. Contract, Arrangements, Understandings Or Relationships With Respect To
Securities Of The Issuer.
583,333 shares of Common Stock beneficially owned by VHC and 583,333
shares beneficially owned by Venture LW Corporation are also subject to the
"pledge" in favor of Peters and are held in escrow along with the 1,166,667
shares beneficially owned by the Partnership and the 1,166,667 shares
beneficially owned by New Vision Music. The Joint Venture expects that New
Vision Music will pay its portion of the Note held by Peters. The Partnership
intends to pay its portion of the Note. The Partnership and the Joint Venture
intend to make it a condition to the consummation of the various transactions
with Venture LW Corporation and VHC that they will pay their portion of the
Note. Assuming the Note held by Peters is paid in full the escrow will be
terminated and all of such shares will be released.
Since the July Statement was filed, the Joint venture has delivered to
New Vision Music its formal written offer to purchase 2,834,908 shares of Common
Stock from New Vision Music for an aggregate price of $2,000,000 or
approximately $.7055 per share. Notwithstanding the Joint Venture's prior belief
concerning its proposed arrangements with New Vision Music, New Vision Music has
informed the Joint Venture that it will not be in a position to give formal
consideration to the formal written offer until the week of August 9, 1993 and
the Joint Venture expects a formal response from New Vision Music on or about
August 11, 1993. The closing of all of the contemplated transactions
described in the July Statement and in this Amendment is contingent on New
Vision Music's sale of such 2,834,908 shares on substantially the terms
contained in the written offer.
The Joint Venture expects that it or the Partnership will enter into
arrangements with Venture LW Corporation and VHC with respect to the proposed
purchase by Venture LW Corporation and VHC of a portion of the 2,834,908 shares
the Joint Venture has offered to purchase from New Vision Music. Under the
Dissolution Agreement dated as of December 7, 1992 among the partners of VJN
Partners (consisting of VHC, Venture LW Corporation, New Vision Music and the
Partnership), Venture LW Corporation and VHC have certain rights of refusal with
respect to transfers of certain of the shares of the Company's Common Stock held
beneficially by any of such former partners occurring within one year of the
date of such Dissolution Agreement. Since the July Statement was filed, Venture
LW Corporation and VHC have each expressed interest to the Partnership in
exercising at least part of such rights of refusal. Based on discussions to
date, the Partnership and the Joint Venture believe that Venture LW Corporation
intends to purchase 360,194 shares of Common Stock, and that VHC intends to
purchase 360,194 shares of Common Stock out of the 2,834,908 shares the Joint
venture has offered to purchase from New Vision Music. Accordingly, the Joint
Venture intends to purchase 2,114,520 shares from New Vision Music.
10
<PAGE>
The Joint Venture expects that the purchase price payable to New Vision
Music by the Joint Venture, Venture LW Corporation and VHC will be $.7055 per
share of Common Stock, or an aggregate of $2,000,090 for all 2,834,908 shares.
In the event that Venture LW Corporation does acquire any shares of
Common Stock from New Vision Music, the Partnership and Joint Venture expect
that such shares will be subject to the irrevocable proxy, right of refusal and
co-sale arrangements negotiated with respect to the shares of Common Stock
presently beneficially owned by Venture LW Corporation. Such proposed
arrangement is more specifically described in Item 3 above.
As noted in Item 3 above, the Partnership is currently in discussions
with VHC and, subject to a number of conditions, expects that, if the proposed
transactions described herein are consummated, VHC and the Partnership and the
Joint Venture will enter into irrevocable proxy, right of refusal and co-sale
arrangements containing terms substantially the same as those contained in the
arrangements with Venture LW Corporation described above. Further, the Reporting
Persons expect that VHC will exercise its right to convert the Company's
convertible note presently held by VHC into 550,582 shares of Common Stock and
that VHC will purchase approximately 360,194 of the shares of Common Stock the
Joint Venture has offered to purchase from New Vision Music and that a11 of such
shares will be subject to the irrevocable proxy, right of refusal and co-sale
arrangements. All of such arrangements are subject to the negotiation of
definitive agreements.
The Company did not sign and return the Company Letter of Intent by the
close of business on Tuesday, July 27, 1993 and the Joint Venture has not
withdrawn its offer set forth in the Company Letter of Intent. Discussions and
negotiations among the Company and the Partnership and StarNet are continuing.
The Partnership and StarNet delivered a letter dated August 6, 1993 ("Extension
Letter") (attached hereto as Exhibit 2) to the Company. The Extension Letter
specifies August 12, 1993 (or such later date as the parties may agree) as the
date for execution of a definitive Stock Purchase Agreement and sets forth the
terms of the proposed transactions with the Company.
To comply with certain requirements of the Federal Communications
Commission ("FCC") which may apply to the transactions contemplated, the Joint
Venture has proposed that the transactions be structured to permit (a) prompt
consummation of those aspects which can be closed without prior FCC approval and
(b) deferred consummation of those aspects which may require prior FCC approval.
Under FCC rules applicable to the Company, the acquisition of control
of the Company by the Joint Venture and the proposed Management Agreement
between the Company and StarNet would constitute a change of control which will
require FCC approval with respect to the transfer of certain low power
television station licenses ("LPTV Licenses") held by the Company. The Extension
Letter contemplates that the proposed Management Agreement will not take effect
until FCC approval is obtained or is no longer required and that pending FCC
approval or events eliminating the need for FCC approval, the Company will enter
into a Consulting Agreement with StarNet, pursuant to which StarNet will advise
the Company's management, for a consulting fee of $25,000 per month.
No action will be taken by the Joint Venture or directors to appoint
H.F. Lenfest and Alan McGlade to serve on the Board of Directors of the Company
or to serve as officers of the Company until after required FCC approval is
obtained or is no longer required.
11
<PAGE>
As provided in the Extension Letter, the Joint Venture has expressed
its interest and intent to increase the total cash investment by the Joint
Venture in the Company up to $1,750,000, part of which may be used to purchase
shares of Common Stock at a price of $.80 per share, and part of which may be
used to purchase Convertible Notes of the Company convertible into shares of
Common Stock at a price of $.80 per share. As a result, the Joint Venture would
acquire a maximum aggregate number of 2,187,500 shares,
The Joint Venture intends to seek the Company's commitment in the
definitive Stock Purchase Agreement that, in the event FCC approval is not
obtained within a reasonable period of time, the Company will spin-off or
otherwise divest (the "Spin-Off") itself of the LPTV Licenses. Upon the
Company's receipt of FCC approval or upon disapproval by the FCC and/or the
consummation of the Spin-Off of the LPTV Licenses, the Joint Venture intends
to convert the Convertible Notes and to acquire the shares of Common Stock
underlying such Convertible Notes.
The transactions contemplated by the Joint Venture with respect to the
Company are subject to (i) the waiver or modification of certain rights of
refusal held by VHC and Venture LW Corporation in connection with which the
Joint Venture believes that VHC and Venture LW Corporation will each purchase
approximately 360,194 shares of Common Stock, respectively, from New Vision
Music, and (ii) the sale by New Vision Music of its 2,834,908 shares of Common
Stock.
Assuming all transactions proceed, the Reporting Persons expect that
the Company will offer 2,386,537 shares of Common Stock to the Joint Venture and
to Liberty, in accordance with the Company's obligations to afford Liberty
preemptive rights. Liberty may elect to exercise its preemptive rights to
purchase up to 199,037 shares of Common Stock. Whether or not Liberty exercises
such preemptive rights, the Joint Venture intends to purchase from the Company a
portion of 2,187,500 shares and one or more Convertible Notes convertible into a
number of shares not exceeding the balance of such 2,187,500 shares.
The registration rights to be granted to the Joint Venture under a
proposed Registration Rights Agreement between the Joint Venture and the Company
will include the shares the Joint Venture intends to purchase and the shares
underlying one or more Convertible Notes the Joint Venture intends to purchase
from the Company.
In the event all transactions contemplated are consummated the shares
of Common Stock acquired by contribution from the Partnership (2,834,908), by
purchase from New Vision Music (expected to be 2,114,520) and by purchase from
the Company (expected to be 2,187,500) will be held of record by the Joint
Venture.
The Joint Venture is being formed as a Delaware general partnership
with the Partnership and StarNet INT, as its sole general partners.
Except as specifically modified, amended or supplemented by this
Amendment No. 1, all of the information in the July Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
Exhibit 1. Joint Filing Agreement with respect to the
joint filing of Amendment No. 1 to Schedule
13D and all amendments thereto.
12
<PAGE>
Exhibit 2. Letter dated August 6, 1993 from CEA
Investors Partnership II, Ltd. and StarNet,
Inc. to Board of Directors of Video Jukebox
Network, Inc.
13
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ H. GENE GAWTHROP
--------------------------------
As: VP
By: /s/ H. GENE GAWTHROP Dated: AUGUST 9, 1993
---------------------------------
As: VP
Dated: AUGUST 9, 1993
/s/ J. PATRICK MICHAELS, JR.
- ------------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: AUGUST 9, 1993 By: CEA Investors Partnership
II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ H. GENE GAWTHROP
-----------------------------------
As: VP
Dated: AUGUST 9, 1993
14
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class Securities)
92656G 10 8
-----------------------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
AUGUST 30, 1993
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,345,738
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,036,928
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,452,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [ ]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.8%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,345,738
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,036,928
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,452,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [ ]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.8%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 100,000
Beneficially 8. Shared Voting Power
Owned By 10,352,662
Each 9. Sole Dispositive Power
Reporting 100,000
Person With 10. Shared Dispositive Power
7,043,852
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,452,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [ ]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.8%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
WC
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,345,738
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,036,928
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,452,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [ ]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.8%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 2 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the July Statement as amended by the August
Amendment is referred to as the "Original Statement"), is jointly filed by the
persons listed on the execution pages hereof (the "Reporting Persons") pursuant
to the Joint Filing Agreement filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr., (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993, as amended by Amendment No. 1 dated July 7,
1993 and it and its exhibits as well as the Original Statement and its exhibits
are incorporated herein by reference. Capitalized terms not defined herein shall
have the meanings defined in the Original Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose the final terms and consummation of
the transactions with respect to which the Reporting Persons acted together to
consummate. Items 7, 8, 9, 10, 11 and 13 of the cover pages filed herewith have
been amended to reflect numbers of shares of Common Stock as appropriate in
light of the amendments described below.
Items 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity and Background.
Each of the Reporting Persons, other than StarNet/CEA II Partners (the
"Joint Venture"), expressly declares that the filing of this Amendment shall not
be construed as an admission that such person is, for the purposes of
Section 13(d) or 13(g) of the Act, the beneficial owner of any securities
covered by this Amendment.
Item 3 of the Original Statement is hereby amended and supplemented as
follows:
Item 3. Source and Amount of Funds or Other Consideration.
The Joint Venture used $3,361,616 of capital (a) to purchase 2,014,520
shares of Common Stock ("Purchased NVM Shares") for an aggregate purchase price
of $1,611,616 or $.80 per share from New Vision Music, and (b) to purchase
687,500 shares of Common Stock ("Purchased Company Shares") for an aggregate
purchase price of $550,000 or $.80 per share from the Company, and (c) to
purchase from the Company its $1,200,000 convertible promissory note (the
"Convertible Note"), which is convertible into 1,500,000 shares of Common Stock
("Convertible Company Shares") at the conversion rate of $.80 per share with
respect to principal and is convertible into additional shares of Common Stock
at the conversion rate of $1.25 per share with respect to accrued interest, if
not paid by the Company.
The Joint Venture entered into a Stock and Note Purchase Agreement with
the Company dated August 24, 1993 (the "Stock and Note Purchase Agreement")
(copy filed as Exhibit 2 to this Amendment) relating to the purchase of the
Purchased Company Shares and the Convertible Note. On August 24, 1993 the
Company notified Liberty of its right to purchase up to 62,554 shares of Common
Stock at a purchase price of $.80 per share and up to $109,186 in principal
amount of a convertible note, which note would be convertible on the same terms
as the Convertible Note purchased by the Joint Venture. This notice was
delivered to Liberty by the Company in accordance with its existing preemptive
rights.
In consideration for the Partnership's capital contribution of
2,834,908 shares of Common Stock to the Joint Venture, and for an additional
cash capital contribution, the Partnership acquired a 50% interest in the Joint
Venture.
In consideration of StarNet INT's capital contribution of $3,200,000
in cash and an additional cash contribution, Starnet INT acquired a 50% interest
in the Joint Venture.
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<PAGE>
The source of funds for the purchase of the Purchased NVM Shares, the
Purchased Company Shares and the Convertible Note, in excess of $3,200,000 was
capital of the Joint Venture contributed equally by the Partnership and StartNet
INT.
The Partnership entered into an Irrevocable Proxy, Right of Refusal and
Tag-Along Agreement dated as of August 27, 1993 with Venture LW Corporation
("VLW") and Louis Wolfson III ("Wolfson") and joined by the Joint Venture (the
"VLW Proxy Agreement") (copy filed as Exhibit 3 to this Amendment). The
Partnership entered into an Irrevocable Proxy, Right of Refusal and Tag-Along
Agreement dated as of August 27, 1993 with Video Holdings Corporation ("VHC"),
Mark Blank, Andrew Blank, Tony Blank (the "Blanks") and Robert Puck ("Puck") and
joined by the Joint Venture (the "VHC Proxy Agreement") (copy filed as Exhibit 4
to this Amendment).
Under the VLW Proxy Agreement, the Partnership acquired from VLW and
Wolfson an irrevocable voting proxy effective August 30, 1993 ("Proxy Effective
Date") as to 1,000,000 shares of Common Stock and an irrevocable voting proxy
(the "Deferred VLW Proxy") effective on a deferred date as to 727,647 shares of
Common Stock, for an aggregate of 1,727,647 shares. Under the VHC Proxy
Agreement, the Partnership acquired from VHC, the Blanks and Puck an irrevocable
voting proxy effective on the Proxy Effective Date as to 1,000,000 shares of
Common Stock and an irrevocable voting proxy (the "Deferred VHC Proxy")
effective on a deferred date as to 581,163 shares of Common Stock, for an
aggregate of 1,581,163 shares.
The Partnership acquired the voting proxies and rights of refusal on
proposed transfers of the shares of Common Stock which are subject to the VLW
Proxy Agreement and the VHC Proxy Agreement, respectively, in consideration for
the grant to VLW and Wolfson and the grant to VHC, the Blanks and Puck of
tag-along rights permitting them to sell proportionate amounts of such shares in
the event of certain transactions involving the sale or registration for sale of
shares of Common Stock by the Joint Venture; any merger or consolidation of the
Company with any other corporation, or any sale, exchange, transfer or other
action affecting a majority of the outstanding Common Stock of the Company in
which the Joint Venture or certain of its transferees participates; any sale or
transfer by the Partnership or certain of its transferees of its interests in
the Joint Venture; any sale or transfer or disposition of the interests of CEA
Investors in the Partnership; or any sale or transfer of the common stock of CEA
Investors. In addition, under certain circumstances the Joint Venture cannot
vote its shares of Common Stock of the Company or permit its representatives on
the Company's Board of Directors to approve a "Going Private Transaction" (as
defined in the VLW and VHC Proxy Agreements) unless the Joint Venture or the
Partnership shall have first made an offer or caused a third party to make an
offer to purchase the shares of Common Stock subject to the Proxy Agreements at
a price determined in accordance with such agreements.
Item 4 of the Original Statement is hereby amended and supplemented as
follows:
Item 4. Purpose of Transaction.
The principal purposes of the Joint Venture remain as set forth in Item
4 of the Original Statement. The Joint Venture must obtain prior approval of the
Federal Communications Commission ("FCC") before acquiring control of the
Company because the Company holds FCC licenses for the Company's low power
television stations. When FCC approval is obtained, or no longer required, the
Joint Venture intends to convert the Convertible Note and acquire the
7
<PAGE>
underlying 1,500,000 Convertible Company Shares and to cause the Deferred VLW
and VHC Proxies to become effective with respect to 727,647 shares of Common
Stock subject to the VLW Proxy Agreement and 581,163 shares of Common Stock
subject to the VHC Proxy Agreement. Based on the number of shares of Common
Stock issued and outstanding, upon the consummation of such actions the Joint
Venture will have the right, by ownership or proxy, to vote a majority of the
outstanding shares of Common Stock and therefore to elect all directors of the
Company.
Effective August 30, 1993, the date of the closing of the transactions
under the Stock and Note Purchase Agreement, David O. Deutsch and Robert J. Puck
resigned as members of the Board of Directors sand Jules Haimovitz resigned as
Acting President and Acting Chief Operating Officer of the Company. J. Patrick
Michaels, Jr., Acting Chief Executive Officer and a Director, was elected to
serve as Acting President and Acting Chief Operating Officer.
Upon conversion of the Convertible Note and the Joint Venture's
acquisition of control of a majority of the outstanding shares of Common Stock,
the Company has agreed pursuant to the Stock and Note Purchase Agreement to use
its best efforts to assure that the Board of Directors will fix the number of
Directors constituting the Board of Directors at seven (7) and elect H.F.
Lenfest and Alan McGlade, designees of the Joint Venture, to fill the two
vacancies, and that H.F. Lenfest will be designated Chairman, J. Patrick
Michaels, Jr. will be designated Vice Chairman and Alan McGlade will be
designated Acting Chief Executive Officer.
The Reporting Persons reserve the right to, and may in the future,
change their purposes or plans with respect to their investment in or proxies
for shares of Common Stock, including without limitation the acquisition of
additional shares of Common Stock. The Reporting Persons may seek voting proxies
from additional shareholders in connection with their purposes and plans or
otherwise. Except for the foregoing, as of the date of this Amendment, the
Reporting Persons have no present plans or proposals which relate to or would
result in any of the actions described in paragraphs (a) through (j) of Item 4
of Schedule 13D.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest in Securities of the Issuer.
On August 25, 1993 VHC acquired from the Company 550,582 shares of
Common Stock upon conversion of a convertible note issued by the Company. The
Company issued 100,000 shares of Common Stock to Michaels in July 1993.
As described in Item 6 herein, the Partnership acquired: (a) proxies
effective August 30, 1993 to vote the following shares of Common Stock (i)
689,806 shares previously owned by VLW, (ii) 310,194 shares purchased by Wolfson
from NVM, (iii) 689,806 shares previously owned by VHC, (iv) 96,732 shares
purchased by Mark Blank from NVM, (v) 96,731 shares purchased by Andrew Blank
from NVM, (vi) 96,731 shares purchased by Tony Blank from NVM, and (vii) 20,000
shares purchased by Robert Puck from NVM (2,000,000 shares in the aggregate);
(b) the Deferred VLW Proxy and Deferred VHC Proxy, effective on the "Deferred
Proxy Effective Date" (as defined in each of the VLW and VHC Proxy Agreements),
to vote the following shares of Common Stock (i) 727,647 shares owned by VLW,
and (ii) 581,163 shares owned by VHC, respectively.
8
<PAGE>
The Joint Venture acquired: (a) 2,834,908 shares of Common Stock from
the Partnership as a capital contribution; (b) the 687,500 Purchased Company
Shares from the Company; (c) the 2,104,520 Purchased NVM Shares; and (d) the
right to acquire by conversion of the Convertible Note 1,500,000 Convertible
Company Shares. The Partnership also agreed to vote the shares of Common Stock
covered by each of the VLW and VHC Proxy Agreements in accordance with the
determinations of the Joint Venture's partners.
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of August 30, 1993 was
approximately 15,685,898. Assuming conversion by the Joint Venture of the
Convertible Note and the issuance of the 1,500,000 Convertible Company Shares,
the aggregate number of shares of Common Stock issued and outstanding will be
17,185,898. Assuming such conversion and the triggering of the Deferred Proxy
Effective Date with respect to the Deferred VLW Proxy and the Deferred VHC
Proxy:
(A) Each of the Partnership, CEA Investors, and the Joint Venture
may be deemed to beneficially own 10,452,662 shares of Common
Stock, to have shared power to vote or to direct the vote with
respect to 10,345,738 shares of Common Stock, to have shared
power to dispose or to direct the disposition with respect to
7,036,928 shares of Common Stock and to have no shares of
Common Stock for which any such Reporting Persons has sole
voting power or sole dispositive power.
(B) Michaels may be deemed to beneficially own 10,452,662 shares of
Common Stock, to have sole power to vote or to direct the vote
with respect to 100,000 shares, to have shared power to vote
or to direct the vote with respect to 10,352,662 shares, to
have sole power to dispose or to direct the disposition of
100,000 shares and to have shared power to dispose or to
direct the disposition of 7,043,852 shares of Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person including, without
limitation, (a) the shares of Common Stock purchasable by Liberty in the event
it exercises its preemptive rights with respect to the sale of 687,500 shares
and the $1,200,000 Convertible Note by the Company to the Joint Venture, (b) the
shares which may be acquired by the Joint Venture (and by Liberty pursuant to
related preemptive rights) in the event the Company fails to pay interest under
the Convertible Note and the Joint Venture elects to convert such interest into
shares of Common Stock at the conversion price of $1.25 per share, and (c) any
shares which may be purchasable by StarNet (any by Liberty pursuant to related
preemptive rights) in the event the Company elects to issue a convertible note
to Digital Satellite Network ("DSN"), a division of StarNet, in consideration
for deferral of payments due under the Service Agreement effective as of
August 30, 1993 between the Company and DSN relating to the provision of
satellite transponder services by DSN to the Company.
Gawthrop may be deemed to be the beneficial owner of 10,453,816 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote, 10,345,738 shares as to which there is
shared power to vote or to direct the vote, 1,154 shares as to which there is
sole power to dispose or to direct the disposition, and 7,036,928 shares as to
which there is shared power to dispose or to direct the disposition.
9
<PAGE>
Cardy may be deemed to the beneficial owner of 10,453,816 shares of
Common Stock with 1,154 shares of Common Stock as to which there is sole power
to vote or to direct the vote, 10,345,738 shares as to which there is shared
power to vote or to direct the vote, 1,154 shares as to which there is sole
power to dispose or to direct the disposition, and 7,036,928 shares as to which
there is shared power to dispose or to direct the disposition.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
On August 30, 1993, VHC, VLW, NVM and the Partnership each paid their
respective obligations under the Note held by Peters, which resulted in payment
in full of such Note and the release from escrow of the 583,333, 583,333,
1,166,667 and 1,166,667 shares of Common Stock beneficially owned by such
parties. VHC, VLW, NVM and the Partnership entered into a Note Payment and
Termination of Rights of Refusal Agreement dated as of August 27, 1993 (the
"Rights Termination Agreement") (copy filed as Exhibit 5 to this Amendment),
pursuant to which the parties agreed irrevocably and permanently to waive and
terminate all rights of refusal under the Dissolution Agreement dated as of
December 7, 1992 between such parties, the former partners of a VJN Partners,
as such rights of refusal related to the transactions described in this
Amendment or otherwise.
Pursuant to the Rights Termination Agreement, each of VLW and VHC
agreed to waive their respective rights of refusal with respect to the proposed
purchase of shares of Common Stock from NVM by the Joint Venture. The parties
agreed that VLW, VHC or related parties would be entitled to purchase a certain
number of shares of Common Stock from NVM a $.80 per share (as noted in Item 4
above), free of any rights of refusal. The Company agreed to sell an additional
687,500 shares of Common Stock to the Joint Venture.
Pursuant to a Stock Purchase letter agreement dated August 27, 1993
between the Joint Venture and NVM (copy filed as Exhibit 6 to this Amendment),
on August 30, 1993 the Joint Venture acquired 2,014,520 shares of Common Stock
from NVM at $.80 per share. The Reporting Persons understand that, also on
August 30, 1993, Wolfson acquired 310,194 shares of Common Stock from NVM at
$.80 per share; and Mark Blank, Andrew Blank, Tony Blank and Robert J. Puck
acquired 96,732, 96,731, 96,731 and 20,0000 shares of Common Stock,
respectively, from NVM at $.80 per share.
Pursuant to the VLW Proxy Agreement, (a) VLW and Wolfson granted the
Partnership an irrevocable voting proxy effective on August 30, 1993, the Proxy
Effective Date, with respect to 689,806 shares of Common Stock owned by VLW and
310,194 shares owned by Wolfson, and (b) VLW granted the Partnership an
irrevocable voting proxy, effective on the "Deferred Proxy Effective Date" as
defined in the VLW Proxy Agreement, with respect to 727,647 shares of Common
Stock owned by VLW. The Deferred Proxy Effective Date will be that date, on or
before the first anniversary of the Proxy Effective Date, as specified by
written notice from the Partnership on or after the date on which either the FCC
shall have granted approval to the change of control of the Company to the Joint
Venture or when no FCC approval is required because the Company shall have
effectuated a disposition of its operations subject to licensing and regulation
by the FCC.
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<PAGE>
Pursuant to the VHC Proxy Agreement (a) VHC, the Blanks and Puck
granted the Partnership an irrevocable voting proxy effective on the Proxy
Effective Date with respect to 689,806 shares of Common Stock owned by VHC and
96,732, 96,731, 96,731 and 20,000 shares owed by Mark Blank, Andrew Blank, Tony
Blank and Robert J. Puck, respectively, and (b) VHC granted the Partnership an
irrevocable voting proxy effective on the Deferred Proxy Effective Date (defined
as described above in the discussion of the VLW Proxy Agreement) with respect to
581,163 shares of Common Stock.
The Partnership has agreed to vote the shares of Common Stock covered
by each of the VLW and VHC Proxy Agreements in the same manner as the Joint
Venture votes its shares of Common Stock.
Under the VLW and VHC Proxy Agreements the Partnership acquired first
rights of refusal with respect to proposed transfers of shares of Common Stock
whether to a third party in a private transfer, to the public in a brokered sale
under Rule 144 promulgated under the Securities Act of 1933 ("Rule 144 Sales"),
by VLW and Wolfson ("VLW Grantors") and by VHC, the Blanks and Puck (the "VHC
Grantors") and by their affiliates ("Grantor Transferees") who agree to be
bound by the terms of the respective Proxy Agreement, except with respect to
transfers to Grantor Transferees. The VLW Grantors and VHC Grantors each agreed
to limit the frequency and number of their proposed Rule 144 Sales. Under each
of the VLW and VHC Proxy Agreements, the Partnership agreed to limit and to
cause the Joint Venture to limit the number of shares they may sell under Rule
144 Sales to the extent any aggregation of such sales with proposed Rule 144
Sales by any of the VLW Grantors and VHC Grantors, and their respective Grantor
Transferees, would be required.
In a Supplemental Letter Agreement among VLW, Wolfson, the Partnership,
CEA Investors and the shareholders of CEA Investors and VLW ("Supplemental VLW
Agreement") (copy of form filed as Exhibit 7 to this Amendment), the parties
extended first rights of refusal to proposed transfers of capital stock of VLW
or any corporate VLW Grantor Transferee. In a Supplemental Letter Agreement
among VHC, the Blanks, Puck, the Partnership, CEA Investors and the shareholders
of CEA Investors and VHC ("Supplemental VHC Agreement") (copy of form filed
as Exhibit 8 to this Amendment), the parties extended first rights of refusal
to proposed transfers of capital stock of VHC or any corporate VHC Grantor
Transferee.
Under each of the VLW and VHC Proxy Agreements, the Partnership
designated the Joint Venture as its initial designee for exercise of the first
rights of refusal and the Joint Venture agreed to be bound by the terms of the
Proxy Agreement relating to rights of refusal, tag-along rights and "Going
Private Transactions" (as defined in each of the VLW and VHC Proxy Agreements).
The irrevocable proxies granted to the Partnership under the Proxy
Agreements include a limited power of substitution of permitted designees
including Michaels (as long as he is the Chief Executive Officer or controlling
stockholder of CEA), the Trustee of the John P. Michaels, Jr. Family Trust or
any other person who is Chairman, President or Chief Executive Officer of CEA or
CEA Investors. The proxy granted under each of the VLW and VHC Proxy Agreements
may be assigned, as to a proportionate amount of shares subject to the proxy, to
a person or related group ("Major Block Transferee") in connection with a
transfer of more than 25% of the Company's outstanding Common Stock within a six
month period, with respect to which each separate VLW and VHC Grantor group
elected not to exercise their tag-along rights; provided the Major Block
Transferee is required to assume obligations of the Partnership and the Joint
Venture with respect to any Going Private
11
<PAGE>
Transaction as set forth in such Proxy Agreements. Unless terminated earlier the
proxies will terminate on June 30, 2003.
The proxies cover the shares identified above and any shares acquired
in respect of such shares such as by merger, consolidation, spin-off, stock
split, reclassification, share exchange or other reconstitution of capital
stock.
Under each of the VLW and VHC Proxy Agreements, each of the respective
VLW and VHC Grantors and Grantor Transferees received certain "Tag-Along Rights"
to include a proportionate amount of their shares of Common Stock in certain
sale, transfer or disposition transactions by: (a) the Joint Venture's "Selling
Group" (as defined in the VLW and VHC Proxy Agreements) with respect to shares
of Common Stock of the Company; (b) the Partnership and any "CEA Transferee" (as
defined in the VLW and VHC Proxy Agreements) with respect to any partnership
interest in the Joint Venture; (c) CEA Investors or any CEA Transferee with
respect to any partnership interest in the Partnership; and (d) the Selling
Group with respect to the inclusion of shares of Common Stock for sale in a
registration statement to be filed by the Company under the Securities Act of
1933. Under the terms of the Supplemental VLW Agreement and the Supplemental VHC
Agreement, the Tag-Along Rights were extended to any proposed sale, transfer or
disposition of shares of Common Stock of CEA Investors or capital stock of a
corporate CEA Transferee.
In the event of a proposed Going Private Transaction, the Joint Venture
will not vote its shares of Common Stock in favor of, and, to the extent the
Joint Venture can control the decision through its representatives on the
Company's Board of Directors, will cause the Company or such directors not to
approve, the proposed Going Private Transaction unless: the Joint Venture or the
Partnership shall first, at their option, make an offer or cause a third party
to make an offer to purchase all of the shares of Common Stock subject to the
proxy or rights of refusal under the VLW and VHC Proxy Agreements at a purchase
price determined in accordance with a formula included in each of the VLW and
VHC Proxy Agreements. The VLW and VHC Grantors may accept or reject the offers
in whole or in part. The Going Private Transaction may then proceed so long as
the offers wee made and rejected or, if accepted, such sale is closed.
The Joint Venture has been formed and organized as a Delaware general
partnership pursuant to a Partnership Agreement date August 24, 1993 between the
Partnership and StarNet INT (the "Partnership Agreement") (copy filed as Exhibit
9 to this Amendment), as its sole general partners. Under the Partnership
Agreement the Partnership agreed to exercise its rights as "Proxy" under each of
the VLW and VHC Proxy Agreements including the taking of any actions and casting
of any votes only to the extent such actions and votes shall be the same as the
actions taken or the votes cast by the Joint Venture with respect to the shares
of Common Stock held by the Joint Venture. The Partnership agreed to designate
the Joint Venture for exercise of rights of refusal under each of the VLW and
VHC Proxy Agreements. Each partner in the Joint Venture agreed to appoint one
initial representative and substitute representative to serve on the two person
"Management Committee" responsible for managing the Joint Venture. The initial
representative and substitute representatives of the Partnership and StarNet
INT, respectively, are Thomas W. Cardy and J. Patrick Michaels and Alan McGlade
and H.F. Lenfest, respectively. The partners of the Joint Venture granted each
other rights of refusal with respect to certain proposed transfers or
assignments of interests in the Joint Venture or changes in control of the
partners and agreed to coordinate the exercise of such rights with the
applicable Tag-Along Rights granted under each of the VLW and VHC Proxy
Agreements.
12
<PAGE>
Under FCC rules applicable to the Company, the acquisition of control
of the Company by the Joint Venture pursuant to the stock purchase and proxy
transactions described herein and, possibly, pursuant to a Management Agreement
dated as of August 24, 1993 between the Company and StarNet (but not yet
effective) might constitute a change of control which would require FCC approval
with respect to certain FCC licenses for low power television stations ("LPTV
Licenses") held by the Company. The Management Agreement will not take effect
until FCC approval is obtained or is no longer required. Pending FCC approval or
events eliminating the need for FCC approval, StarNet will advise the Company's
management pursuant to a Consulting Agreement dated August 24, 1993 between the
Company and StarNet for a consulting fee of $25,000 per month.
No action will be taken to elect or appoint H.F. Lenfest and Alan
McGlade or any other representatives of the Joint Venture to serve on the Board
of Directors of the Company or to serve as officers of the Company until after
any required FCC approval is obtained or is no longer required.
Pursuant to the Stock and Note Purchase Agreement, the Joint Venture
invested $1,750,000 in the Company, of which $550,000 was used to purchase the
687,500 Purchased Company Shares at a price of $.80 per share, and $1,200,000
was used to purchase the Convertible Note, the principal of which is convertible
into the 1,500,000 Convertible Company Shares at a conversion price of $.80 per
share. As a result, the Joint Venture will acquire 2,187,500 shares of Common
Stock from the Company. Interest accrues under the Convertible Note and is
payable on the conversion date. Unpaid accrued interest is convertible at the
holders option into shares of Common Stock at a conversion price of $1.25 per
share.
Pursuant to the Stock and Note Purchase Agreement and subject to
deferrals, in the event FCC approval is not obtained by December 31, 1993, the
Company has agreed to spin-off or otherwise divest itself of the LPTV Licenses
(the "Spin-Off Transaction"). Upon the Company's receipt of FCC approval or upon
disapproval by the FCC and/or the consummation of the Spin-Off Transaction, the
principal of the Convertible Note is automatically converted into the shares of
Common Stock underlying such Convertible Note. (A copy of the form of
Convertible Note is attached as Exhibit A to the Stock and Note Purchase
Agreement which is filed as Exhibit 2 to this Amendment.)
The Company offered 62,554 shares of Common Stock and a $109,186 in
principal amount convertible note to Liberty, in accordance with the Company's
obligation to afford Liberty preemptive rights relating to the Purchased Company
Shares and the Convertible Note acquired by the Joint Venture.
Pursuant to a Registration Rights Agreement dated August 24, 1993
between the Joint Venture and the Company ("Registration Rights Agreement")
(copy filed as Exhibit 10 to this Amendment) the Company granted to the Joint
Venture certain registration rights with respect to the Purchased Company Shares
and the shares underlying the Convertible Note.
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<PAGE>
The shares of Common Stock acquired by contribution from the
Partnership (2,834,908) by purchase from NVM (2,014,520) and by purchase from
the Company (2,187,500), (assuming conversion of the Convertible Note and
issuance of the Convertible Company Shares), will be held of record by the Joint
Venture.
Except as specifically modified, amended or supplemented by this
Amendment No. 2, all of the information in the Original Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Joint Filing Agreement with respect to the joint filing of
Amendment No. 2 to Schedule 13D and all amendments thereto.
Exhibit 2 Stock and Note Purchase Agreement dated as of August 24, 1993
between the Company and the Joint Venture.
Exhibit 3 Irrevocable Proxy, Right of Refusal and Tag-Along Agreement dated
as of August 27, 1993 between VLW, Wolfson and the Partnership,
joined by the Joint Venture.
Exhibit 4 Irrevocable Proxy, Right of Refusal and Tag-Along Agreement dated
as of August 27, 1993 between VHC, Mark Blank, Andrew Blank, Tony
Blank, Robert Puck and the Partnership, joined by the Joint
Venture.
Exhibit 5 Note Payment and Termination of Rights of Refusal Agreement dated
August 27, 1993 between the Partnership, VHC, VLW and NVM.
Exhibit 6 Stock Purchase Letter Agreement dated August 27, 1993 between NVM
and the Joint Venture.
Exhibit 7 Form of Supplemental Letter Agreement between VLW, Wolfson and the
Partnership and including CEA Investors and shareholders of VLW
and CEA Investors.
Exhibit 8 Form of Supplemental Letter Agreement between VHC, Mark Blank,
Andrew Blank, Tony Blank, Robert J. Puck, and the Partnership
and including CEA Investors and shareholders of VHC and CEA
Investors.
Exhibit 9 Partnership Agreement dated as of August 24, 1993 between StarNet
INT and the Partnership.
Exhibit 10 Registration Rights Agreement dated August 24, 1993 between the
Company and the Joint Venture.
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15
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SCHEDULE 13D
SIGNATURES
The undersigned, after reasonable inquiry and to the best of
their knowledge and belief, certify that the information set forth in this
statement is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, LTD CEA INVESTORS, INC. a Florida Corporation
a Florida limited partnership
By: CEA Investors, Inc.,
General Partner
By: /s/ T.W. CARDY By: /s/ T.W. CARDY
- ----------------------------------- --------------------------------------
As: Vice President, Treasurer, As: Vice President, Treasurer,
Assistant Secretary Assistant Secretary
Dated: SEPTEMBER 10, 1993 Dated: SEPTEMBER 10, 1993
/s/ J. PATRICK MICHAELS, JR.
- -----------------------------------
J. Patrick Michaels, Jr.
Dated: SEPTEMBER 10, 1993
STARNET/CEA II PARTNERS
By: CEA Investors Partnership II, Ltd.,
a Florida Limited Partnership, its
General Partner
By: CEA Investors, Inc., General Partner
By: /s/ T.W. CARDY
--------------------------------------
As: Vice President, Treasurer,
Assistant Secretary
Dated: SEPTEMBER 10, 1993
16
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 3 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class Securities)
92656G 10 8
----------------------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
AUGUST 30, 1993
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,345,738
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,036,928
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,452,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.8%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,345,738
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,036,928
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,452,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.8%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 100,000
Beneficially 8. Shared Voting Power
Owned By 10,352,662
Each 9. Sole Dispositive Power
Reporting 100,000
Person With 10. Shared Dispositive Power
7,043,852
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,452,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.8%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
WC
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,345,738
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,036,928
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
10,452,662
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.8%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 3 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, l993 ("September Amendment") (the
July Statement as amended by the August Amendment and September Amendment is
referred to as the (Original Statement"), is jointly filed by the persons listed
on the execution pages hereof (the "Reporting Persons") pursuant to the Joint
Filing Agreement filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd,, CEA Investors, Inc., and J. Patrick
Michaels , Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group Schedule
13D dated June 18, 1993, as amended by Amendment No. 1 dated July 7, 1993 and it
and its exhibits as well as the Original Statement and its exhibits are
incorporated herein by reference. Capitalized terms not defined herein shall
have the meanings defined in the Original Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to amend the cover pages filed with the
September Amendment solely to check the boxes in items 2(a) and 12 on each cover
page, which were inadvertently not checked in the September Amendment.
Except as specifically modified and amended by this Amendment No. 3,
a11 of the information in the Original Statement is hereby confirmed.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Joint Filing Agreement with respect to the joint filing of
Amendment No. 3 to Schedule 13D and all amendments thereto.
6
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ T.W. CARDY
------------------------------------
As: VP. TREAS., ASSIST. SEC.
------------------------------------
By: /s/ T.W. CARDY Dated: SEPTEMBER 13, 1993
------------------------------- ---------------------------------
As: VP, TREAS., ASSIST. SEC.
------------------------------
Dated: SEPTEMBER 13, 1993
-------------------------
/s/ J. PATRICK MICHAELS
- ---------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: SEPTEMBER 13, 1993 By: CEA Investors Partnership
--------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ T.W. CARDY
------------------------------------
As: VP, TREAS., ASSIST. SEC.
------------------------------------
Dated: SEPTEMBER 13, 1993
---------------------------------
8
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 4 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class Securities)
92656G 10 8
----------------------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
DECEMBER 1 AND 16, 1993
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,345,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,112,546
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.2%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,112,546
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.2%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 100,000
Beneficially 8. Shared Voting Power
Owned By 10,372,546
Each 9. Sole Dispositive Power
Reporting 100,000
Person With 10. Shared Dispositive Power
7,063,736
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,112,546
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.2%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
WC
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,112,546
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.2%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 4 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, 1993 (the "September Amendment") and
as amended by Amendment No. 3 thereto dated September 13, 1993 ("Amendment No.
3") (the July Statement as amended by the August Amendment, September Amendment
and Amendment No. 3 is referred to as the "Original Statement"), is jointly
filed by the persons listed on the execution pages hereof (the "Reporting
Persons") pursuant to the Joint Filing Agreement filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, l993 and its exhibits, as amended by Amendment No. 1
dated July 7, l993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose the acquisition of control of the
Company by the Reporting Persons following approval of the Federal
Communications Commission ("FCC") and the acquisition by StarNet, Inc.
("StarNet") of "Deferred Payment Convertible Notes" (as defined herein)
convertible into shares of the Company's Common Stock.
Except as specifically modified and amended by this Amendment No. 4,
all of the information in the Original Statement is hereby confirmed.
Items 7, 8, 9, 10, 11 and 13 of the cover pages filed herewith have
been amended to reflect numbers of shares of Common Stock as appropriate in
light of the amendments described below.
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity and Background
Each of the Reporting Persons, other than StarNet/CEA II Partners (the
"Joint Venture"), expressly declares that the filing of this Amendment shall not
be construed as an admission that such person is, for the purposes of Section
13(d) or 13(g) of the Act, the beneficial owner of any securities covered by
this Amendment. The Joint Venture expressly declares that the filing of this
Amendment shall not be construed as an admission that such person is, for the
purpose of Section 13(d) or 13(g) of the Act, the beneficial owner of any
securities covered by this Amendment and held by or issuable to StarNet, Inc.
except to the extent the Joint Venture may be deemed to be a beneficial owner of
such securities pursuant to Rule 13d-5(b)(1) under the Act.
Item 3 of the Original Statement is hereby amended and supplemented as follows:
Item 3. Source and Amount of Funds and Other Consideration
The Convertible Note purchased by the Joint Venture from the Company
has been converted, as of December 16, 1993, into 1,500,000 shares of Common
Stock at the conversion rate of $.80 per share with respect to principal and
19,884 shares of Common Stock at the conversion rate of $1.25 per share with
respect to accrued interest, for an aggregate of 1,519,884 shares of Common
Stock.
In consideration for deferral of four (4) monthly payments of $200,000
each due to Digital Satellite Network ("DSN"), a division of StarNet, under the
satellite transponder Service Agreement (the "Service Agreement") dated August
24, 1993 between the Company and StarNet, the Company as of December 1, 1993
6
<PAGE>
agreed to issue to DSN four separate $200,000 Convertible Notes (the "Deferred
Payment Convertible Notes"), which will be dated as of September 1, October 1,
November 1 and December 1, 1993. The Deferred Payment Convertible Notes accrue
interest at 7% and are convertible in accordance with their terms into shares of
the Company's Common Stock at the conversion rate of $1.25 per share as to
principal and accrued interest. A copy of the Service Agreement is filed as
Exhibit 2. A copy of the September 1, 1993 Deferred Payment Convertible Note is
filed as Exhibit 3, which, except for the date thereof, is identical in all
material respects to each of the Deferred Payment Convertible Notes issued and
issuable by the Company pursuant to the Service Agreement.
Item 4 of the Original Statement is hereby amended and supplemented as
follows:
Item 4. Purpose of Transaction
The principal purposes of the Joint Venture remain as set forth in Item
4 of the Original Statement. The Joint Venture obtained approval of the FCC for
the acquisition of control of the Company and all conditions as to the
effectiveness of such approval were met on December 16, 1993. In accordance with
the terms of the Convertible Note, the Convertible Note was automatically
converted on and as of December 16, 1993 and the Company issued 1,519,884 shares
of Common Stock to the Joint Venture in exchange for surrender and conversion of
the Convertible Note as described in Item 3 and Item 6.
Pursuant to the terms of the VLW Proxy Agreement, the Partnership
delivered written notice to Wolfson confirming December 16, 1993 as the Deferred
Proxy Effective Date of the Deferred VLW Proxy granted to the Partnership as to
727,647 shares of Common Stock. The Partnership now holds an irrevocable voting
proxy for an aggregate of 1,727,647 shares of Common Stock held of record by VLW
and Wolfson.
Pursuant to the terms of the VHC Proxy Agreement, the Partnership
delivered written notice to Mark Blank confirming December 16, 1993 as the
Deferred Proxy Effective Date of the Deferred VHC Proxy granted to the
Partnership as to 581,163 shares of Common Stock. The Partnership now holds an
irrevocable voting proxy for an aggregate of 1,581,163 shares of Common Stock
held of record by VHC and Mark Blank, Andrew Blank, Tony Blank and Robert J.
Puck, (together with VHC the "VHC Group").
The Joint Venture has the right, by ownership or proxy, to vote the
majority of the outstanding shares of Common Stock and therefore to elect all
directors of the Company.
Pursuant to resolutions previously adopted by the Board of Directors of
the Company, effective upon the conversion of the Convertible Note on and as of
December 16, 1993, the number of directors constituting the Board of Directors
has been fixed at seven (7); H.F. Lenfest and Alan McGlade, designees of the
Joint Venture, were elected directors to fill the two vacancies; and H.F.
Lenfest was designated Chairman, J. Patrick Michaels, Jr. was designated Vice
Chairman and Alan McGlade was designated Acting Chief Executive Officer of the
Company.
The Reporting Persons reserve the right to, and may in the future,
change their purposes or plans with respect to their investment and/or proxies
for shares of Common Stock, including without limitation the acquisition of
additional shares of Common Stock. The Reporting Persons may seek voting proxies
from additional shareholders in connection with their purposes and plans or
otherwise. Except for the foregoing, as of the date of this Amendment, the
Reporting Persons have no present plans or proposals which relate to or would
result in any of the actions described in paragraphs (a) through (j) of Item 4
of Schedule 13D.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest in Securities of the Issuer
As described in Item 6 herein, the Partnership triggered the Deferred
Proxy Effective Date under the Deferred VLW Proxy granted with respect to
727,647 shares of Common Stock owned by VLW and Wolfson and
7
<PAGE>
the Deferred Proxy Effective Date under the Deferred VHC Proxy granted with
respect to 581,163 shares of Common Stock owned by the VHC Group.
This Joint Venture acquired by conversion of the Convertible Note
1,500,000 shares of Common Stock by conversion of $1,200,000 principal at the
rate of $.80 per share and 19,884 shares of Common Stock by conversion of
accrued interest under the Convertible Note at the rate of $1.25 per share, for
an aggregate of l,519,844 shares of Common Stock.
Under the Deferred Payment Convertible Notes, StarNet has acquired the
right to acquire 640.000 shares of Common Stock by conversion of the principal
amount of such Deferred Payment Convertible Notes at the rate of $1.25 per share
and the right to acquire additional shares of Common Stock upon conversion of
accrued interest under such Deferred Payment Convertible Notes at the rate of
$1.25 per share.
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of December 20, 1993 is
approximately 17,214,490.
(A) Each of the Partnership, CEA Investors, and the Joint Venture
may be deemed to beneficially own 11,112,546 shares of Common
Stock, to have shared power to vote or to direct the vote with
respect to 10,365,622 shares of Common Stock, to have shared
power to dispose or to direct the disposition with respect to
7,056,812 shares of Common Stock and to have no shares of
Common Stock for which any such Reporting Persons has sole
voting power or sole dispositive power.
(B) Michaels may be deemed to beneficially own 11,112,546 shares
of Common Stock, to have sole power to vote or to direct the
vote with respect to 100,000 shares, to have shared power to
vote or to direct the vote with respect to 10,365,622 shares.
to have sole power to dispose or to direct the disposition of
100,000 shares and to have shared power to dispose or to
direct the disposition of 7,063,736 shares of Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person including, without
limitation, (a) any shares which may be acquired by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event StarNet elects to convert
interest which accrues and remains unpaid under the Deferred Payment Convertible
Notes and (b) any shares which may be purchasable by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event the Company elects to issue
additional convertible notes to DSN in consideration for deferral of any
additional payments due under the Service Agreement.
Gawthrop may be deemed to be the beneficial owner of 11,113,700 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote; 11,112,546 shares as to which there is
shared power to dispose or to direct the vote; 1,154 shares as to which there is
sole power to dispose or to direct the disposition; and 7,056,812 shares as to
which there is shared power to dispose or to direct the disposition.
Cardy may be deemed to be the beneficial owner of 11,113,700 shares of
Common Stock with 1,154 shares of Common Stock as to which there is sole power
to vote or to direct the vote; 11,112,546 shares as to which there is shared
power to vote or to direct the vote; 1,154 shares as to which there is sole
power to dispose or to direct the disposition; and 7,056,812 shares as to which
there is shared power to dispose or to direct the disposition.
Item 6 of the Original Statement is hereby amended and supplemented as follows:
Item 6 Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
8
<PAGE>
Pursuant to the VLW Proxy Agreement, the Partnership delivered written
notice after the date on which the FCC granted approval of the change of control
of the Company to the Joint Venture, which notice designated December 16, 1993
as the Deferred Proxy Effective Date with respect to 727,647 shares of Common
Stock owned by VLW and Wolfson.
Pursuant to the VHC Proxy Agreement, the Partnership delivered written
notice after the date on which the FCC granted approval of the change of control
of the Company to the Joint Venture, which notice designated December 16, 1993
as the Deferred Proxy Effective Date with respect to 581,163 shares of Common
Stock owned by the VHC Group.
Effective December 16, 1993 the Consulting Agreement dated August 24,
1993 between the Company and StarNet was terminated and the Management Agreement
dated as of August 19, 1993 between the Company and StarNet took effect.
Pursuant to previous resolutions approved by the Board of Director of
the Company, H.F. Lenfest and Alan McGlade, designees of the Joint Venture,
have been elected to serve as members of the Board of Directors, H.F. Lenfest
has been designated Chairman, J. Patrick Michaels, Jr. has been designated Vice
Chairman and Alan McGlade has been designated Acting Chief Executive Officer of
the Company.
The Company submitted notice to DSN of the Company's intention to defer
payments of $200,000 per month due to DSN under the Service Agreement for the
months of September, October, November and December of l993. Upon receipt of the
initial notice, StarNet and the Company entered into discussions and
negotiations relating to proposed modification of the terms of the Deferred
Payment Convertible Notes issuable by the Company to StarNet. It was proposed,
among other things, that the conversion privilege under the Deferred Payment
Convertible Notes be modified by restricting the right of conversion until some
future date. On December 1, 1993 StarNet and the Company reached agreement as to
the terms of the Deferred Payment Convertible Notes to be issued by the Company
to StarNet. On December 1, 1993, the Company authorized issuance of the Deferred
Payment Convertible Notes dated as of September 1, 1993, October 1, 1993,
November 1, 1993 and December 1, 1993 which notes are to be issued, subject to
the purchase by Liberty of its proportionate share in the event it chooses to
exercise its pre-emptive rights, after the expiration of the notice period
provided by the Company to Liberty with respect to such pre-emptive rights. By
written notice dated December 1, 1993, the Company notified Liberty of its
opportunity to purchase up to 7.668% of each of the four Deferred Payment
Convertible Notes. If Liberty exercises its pre-emptive rights, a portion of the
Notes will be issued to Liberty for a purchase price equal to the proportionate
principal of the Notes acquired by Liberty and the Reporting Persons believe
such cash proceeds will be used by the Company as partial payment to StarNet of
amounts due under the Service Agreement.
Under the terms of the Deferred Payment Convertible Notes, the Company
must commence payment on the third anniversary of the respective Deferred
Payment Convertible Note in thirty (30) equal monthly installments plus interest
on each installment. The Company must give notice of its intention to make
prepayments of all or a portion of principal and accrued interest on any
Deferred Payment Convertible Note and the holder may elect to receive such
prepayment in Common Stock at the conversion rate of $1.25 per share. The holder
of any Deferred Payment Convertible Note may convert all (but not less than all)
of the principal and accrued interest at the conversion rate of $1.25 per share
at any time prior to the third anniversary of such note, so long as (i) the
prior approval of the FCC has been obtained or is not required and/or (ii) no
filing under the Hart-Scott Rodino Act is required, or if required, the waiting
period has expired without objection by the Federal Trade Commission or the
Department of Justice or early termination has been granted with respect to such
a filing.
Pursuant to the terms of the Stock and Note Purchase Agreement and the
automatic conversion of the Convertible Note on and as of December 16. 1993, the
Joint venture has acquired 1,500,000 shares of Common Stock by conversion of
$1,200,000 of principal at the conversion price of $.80 per share and the Joint
Venture has acquired l9,884 shares of Common Stock by conversion of accrued
interest under the Convertible Note at the conversion price of $1.25 per share,
for an aggregate of 1,519,884 shares of Common Stock. See copy of
9
<PAGE>
transmittal letter from the Joint Venture to the Company filed as Exhibit 4.
Liberty previously waived its pre-emptive rights with respect to the Company's
issuance of the Convertible Note.
Except as specifically modified, amended or supplemented by this
Amendment No. 4, all of the information in the Original Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Joint Filing Agreement with respect to the joint
filing of Amendment No. 4 to Schedule 13D and
all amendments thereto.
Exhibit 2 Service Agreement dated August 24, 1993 between
Digital Satellite Networks, a division of StarNet,
Inc., and the Company.
Exhibit 3 Copy of $200,000 Convertible Promissory Note dated as
of September 1, 1993 issued by the Company to Digital
Satellite Networks, a division of StarNet, Inc.
Exhibit 4 Transmittal letter from the Joint Venture to the
Company dated December 16, 1993 relating to the
conversion of $1,200,000 Convertible Note.
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: VP. TREAS., ASSIST. SEC.
------------------------------------
By: /s/ THOMAS W. CARDY Dated: DECEMBER 20, 1993
------------------------------ ---------------------------------
As: VP, TREAS., ASSIST. SEC.
-----------------------------
Dated: DECEMBER 20, 1993
---------------------------
/s/ J. PATRICK MICHAELS, JR.
- ---------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: DECEMBER 20, 1993 By: CEA Investors Partnership
--------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: VP, TREAS., ASSIST. SEC.
------------------------------------
Dated: DECEMBER 20, 1993
---------------------------------
11
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 5 )*
VIDEO JUKEBOX NETWORK, INC.
--------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class of Securities)
92656G 10 8
----------------------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JANUARY 1, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,272,546
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.6%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,272,546
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.6%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
00
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 100,000
Beneficially 8. Shared Voting Power
Owned By 10,372,546
Each 9. Sole Dispositive Power
Reporting 100,000
Person With 10. Shared Dispositive Power
7,063,736
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,272,546
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.6%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- --------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- --------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds*
WC
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,272,546
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.6%
- --------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 5 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, 1993 (the "September Amendment") and
as amended by Amendment No. 3 thereto dated September 13, 1993 ("Amendment No.
3") and as amended by Amendment No. 4 thereto dated December 20, 1993
("Amendment No. 4") (the July Statement as amended by the August Amendment,
September Amendment, Amendment No. 3, and Amendment No. 4 is referred to as the
"Original Statement"), is jointly filed by the persons listed on the execution
pages hereof (the "Reporting Persons") pursuant to the Joint Filing Agreement
filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No . 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose the acquisition by StarNet, Inc.
("StarNet") of a "Deferred Payment Convertible Note" (as defined herein)
convertible into shares of the Company's Common Stock.
Except as specifically modified and amended by this Amendment No. 5,
all of the information in the Original Statement is hereby confirmed.
Items 11 and 13 of the cover pages filed herewith have been amended to
reflect numbers of shares of Common Stock as appropriate in light of the
amendments described below.
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity And Background
Each of the Reporting Persons, other than StarNet/CEA II Partners (the
"Joint Venture), expressly declares that the filing of this Amendment shall not
be construed as an admission that such person is, for the purposes of Section
13(d) or 13(g) of the Act, the beneficial owner of any securities covered by
this Amendment. The Joint Venture expressly declares that the filing of this
Amendment shall not be construed as an admission that such person is, for the
purposes of Section 13(d) or 13(g) of the Act, the beneficial owner of any
securities covered by this Amendment and held by or issuable to StarNet, Inc.
except to the extent the Joint Venture may be deemed to be a beneficial owner of
such securities pursuant to Rule 13d-5(b)(1) under the Act.
Item 3 of the Original Statement is hereby amended and supplemented as follows:
Item 3. Source And Amount Of Funds And Other Consideration
In consideration for deferral of the monthly payment of $200,000 due in
January, 1994 to Digital Satellite Network ("DSN"), a division of StarNet, under
the satellite transponder Service Agreement (the "Service Agreement") dated
August 24, 1993 between the Company and StarNet, the Company as of January 1,
1994 agreed to issue to DSN a $200,000 Convertible Note (the "January 1, 1994
Deferred Payment Convertible Note"), which will be dated as of January 1, 1994.
The Deferred Payment Convertible Notes ("Deferred Payment Convertible Notes")
issued and issuable under the Service Agreement accrue interest at the prime
rate as listed on the first business day of the month in which such notes are
issued in the Wall Street Journal plus one percent (1%) and are convertible in
accordance with their terms into shares of the Company's Common Stock at the
conversion rate of $1.25 per share as to principal and accrued interest. A copy
of the Service Agreement was filed as Exhibit
6
<PAGE>
2 to Amendment No. 4. A copy of the form of September 1, 1993 Deferred Payment
Convertible Note filed as Exhibit 3 to Amendment No. 4, except for the date
thereof and variations in the interest rate, if any, is identical in all
material respects to the January 1, 1994 Deferred Payment Convertible Note and
each of the Deferred Payment Convertible Notes issued and issuable by the
Company pursuant to the Service Agreement.
Item 4 of the Original Statement is hereby amended and supplemented as
follows:
Item 4. Purpose Of Transaction
The principal purposes of the Joint Venture remain as set forth in Item
4 of the Original Statement.
The Reporting Persons reserve the right to, and may in the future,
change their purposes or plans with respect to their investment and/or proxies
for shares of Common Stock, including without limitation the acquisition of
additional shares of Common Stock. The Reporting Persons may seek voting proxies
from additional shareholders in connection with their purposes and plans or
otherwise. Except for the foregoing, as of the date of this Amendment, the
Reporting Persons have no present plans or proposals which relate to or would
result in any of the actions described in paragraphs (a) through (j) of Item 4
of Schedule 13D.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer
Under the January 1, 1994 Deferred Payment Convertible Note, StarNet
has acquired the right to acquire 160,000 shares of Common Stock by conversion
of the principal amount of such Deferred Payment Convertible Note at the rate of
$1.25 per share and the right to acquire additional shares of Common Stock upon
conversion of accrued interest under such Deferred Payment Convertible Note at
the rate of $1.25 per share.
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of January 10, 1994 is
approximately 17,214,490.
(A) Each of the Partnership, CEA Investors, and the Joint Venture
may be deemed to beneficially own 11,272,546 shares of Common
Stock, to have shared power to vote or to direct the vote with
respect to 10,365,622 shares of Common Stock, to have shared
power to dispose or to direct the disposition with respect to
7,056,812 shares of Common Stock and to have no shares of
Common Stock for which any such Reporting Persons has sole
voting power or sole dispositive power.
(B) Michaels may be deemed to beneficially own 11,272,546 shares
of Common Stock, to have sole power to vote or to direct the
vote with respect to 100,000 shares, to have shared power to
vote or to direct the vote with respect to 10,372,546 shares,
to have sole power to dispose or to direct the disposition of
100,000 shares and to have shared power to dispose or to
direct the disposition of 7,063,736 shares of Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares
which were excluded from their respective responses listed in Item 11 on the
cover page filed herewith relating to each Reporting Person including, without
limitation, (a) any shares which may be acquired by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event StarNet elects to convert
interest which accrues and remains unpaid under the Deferred Payment Convertible
Notes and (b) any shares which may be purchasable by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event the Company elects to issue
additional Deferred Payment Convertible Notes to DSN in consideration for
deferral of any additional payments due under the Service Agreement.
Gawthrop may be deemed to be the beneficial owner of 11,273,700 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote; 11,272,546 shares as to
7
<PAGE>
which there is shared power to vote or to direct the vote; 1,154 shares as to
which there is sole power to dispose or to direct the disposition; and 7,056,812
shares as to which there is shared power to dispose or to direct the
disposition.
Cardy may be deemed to be the beneficial owner of 11,273,700 shares of
Common Stock with 1,154 shares of Common Stock as to which there is sole power
to vote or to direct the vote; 11,272,546 shares as to which there is shared
power to vote or to direct the vote; 1,154 shares as to which there is sole
power to dispose or to direct the disposition; and 7,056,812 shares as to which
there is shared power to dispose or to direct the disposition.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
Item 6. Contracts, Arrangements, Understandings Or Relationships With
Respect To Securities Of The Issuer
The Company submitted notice to DSN of the Company's intention to defer
payment of $200,000 due to DSN under the Service Agreement for the month of
January 1994. The January 1, 1994 Deferred Payment Convertible Note will be
issued to DSN, subject to the purchase by Liberty of its proportionate share in
the event it chooses to exercise its pre-emptive rights, after the expiration of
the notice period provided by the Company to Liberty with respect to such
pre-emptive rights. By written notice dated December 30, 1993, the Company
notified Liberty of its opportunity to purchase up to 7.00% of the January 1,
1994 Deferred Payment Convertible Note. If Liberty exercises its pre-emptive
rights, a portion of the Notes will be issued to Liberty for a purchase price
equal to the proportionate principal of the notes acquired by Liberty and the
Reporting Persons believe such cash proceeds will be used by the Company as a
partial payment to StarNet of amounts due under the Service Agreement.
Under the terms of each Deferred Payment Convertible Note, the Company
must commence payment on the third anniversary of the respective Deferred
Payment Convertible Note in thirty (30) equal monthly installments plus interest
on each installment. The Company must give notice of its intention to make
prepayments of all or a portion of principal and accrued interest on any
Deferred Payment Convertible Note and the holder may elect to receive such
prepayment in Common Stock at the conversion rate of $1.25 per share. The holder
of any Deferred Payment Convertible Note may convert all (but not less than all)
of the principal and accrued interest at the conversion rate of $1.25 per share
at any time prior to the third anniversary of such note, so long as (i) the
prior approval of the FCC has been obtained or is not required and/or (ii) no
filing under the Hart-Scott Rodino Act is required, or if required, the waiting
period has expired without objection by the Federal Trade Commission or the
Department of Justice or early termination has been granted with respect to such
a filing.
Except as specifically modified, amended or supplemented by this
Amendment No. 5, all of the information in the Original Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Joint Filing Agreement with respect to the joint filing of
Amendment No. 5 to Schedule 13D and all amendments thereto.
8
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: VP
------------------------------------
By: /s/ THOMAS W. CARDY Dated: JANUARY 11, 1994
------------------------------- ---------------------------------
As: VP
-------------------------------
Dated: JANUARY 11, 1994
----------------------------
/s/ J. PATRICK MICHAELS, JR.
- ----------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: JANUARY 11, 1994 By: CEA Investors Partnership
---------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: VP
------------------------------------
Dated: JANUARY 11, 1994
---------------------------------
9
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 6 )*
VIDEO JUKEBOX NETWORK, INC.
-----------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class of Securities)
92656G 10 8
--------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
FEBRUARY 1, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,432,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,432,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 100,000
Beneficially 8. Shared Voting Power
Owned By 10,372,546
Each 9. Sole Dispositive Power
Reporting 100,000
Person With 10. Shared Dispositive Power
7,063,736
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,452,456
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,432,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 6 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, 1993 (the "September Amendment")
and as amended by Amendment No. 3 thereto dated September 13, 1993 ("Amendment
No. 3") and as amended by Amendment No. 4 thereto dated December 20, 1993
("Amendment No. 4") and as amended by Amendment No. 5 thereto dated January 11,
1994 ("Amendment No. 5") (the July Statement as amended by the August Amendment,
September Amendment, Amendment No. 3, Amendment No. 4 and Amendment No. 5 is
referred to as the "Original Statement"), is jointly filed by the persons listed
on the execution pages hereof (the "Reporting Persons") pursuant to the Joint
Filing Agreement filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose the acquisition by StarNet, Inc.
("StarNet") of a "Deferred Payment Convertible Note" (as defined herein)
convertible into shares of the Company's Common Stock.
Except as specifically modified, amended or supplemented by this
Amendment No. 6, all of the information in the Original Statement is hereby
confirmed.
Items 11 and 13 of the cover pages filed herewith have been amended to
reflect numbers of shares of Common Stock as appropriate in light of the
amendments described below.
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity And Background
Each of the Reporting Persons, other than StarNet/CEA II Partners (the
"Joint Venture"), expressly declares that the filing of this Amendment shall
not be construed as an admission that such person is, for the purposes of
Section 13(d) or 13(g) of the Act, the beneficial owner of any securities
covered by this Amendment. The Joint Venture expressly declares that the filing
of this Amendment shall not be construed as an admission that such person is,
for the purposes of Section 13(d) or 13(g) of the Act, the beneficial owner of
any securities covered by this Amendment and held by or issuable to StarNet,
Inc. except to the extent the Joint Venture may be deemed to be a beneficial
owner of such securities pursuant to Rule 13d-5(b)(1) under the Act.
Item 3 of the Original Statement is hereby amended and supplemented as follows:
Item 3. Source And Amount Of Funds And Other Consideration
In consideration for deferral of the monthly payment of $200,000 due in
February, 1994 to Digital Satellite Network ("DSN"), a division of StarNet,
under the satellite transponder Service Agreement (the "Service Agreement")
dated August 24, 1993 between the Company and StarNet, the Company as of
February 1, 1994 intends to issue to DSN a $200,000 Convertible Note (the
"February 1, 1994 Deferred Payment Convertible Note"). The Deferred Payment
Convertible Notes ("Deferred Payment Convertible Notes") issued and issuable
under the Service Agreement accrue interest at the prime rate as listed on the
first business day of the month in which such notes are issued in the Wall
Street Journal plus one percent (1%) and are convertible in accordance with
their terms into shares of the Company's Common Stock at the conversion rate of
6
<PAGE>
$1.25 per share as to principal and accrued interest. A copy of the Service
Agreement was filed as Exhibit 2 to Amendment No. 4. A copy of the form of
September 1, 1993 Deferred Payment Convertible Note filed as Exhibit 3 to
Amendment No. 4, except for the date thereof and variations in the interest
rate, if any, is identical in all material respects to the February 1, 1994
Deferred Payment Convertible Note and each of the Deferred Payment Convertible
Notes issued and issuable by the Company pursuant to the Service Agreement.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer
Under the February 1, 1994 Deferred Payment Convertible Note, StarNet
has acquired the right to acquire 160,000 shares of Common Stock by conversion
of the principal amount of such Deferred Payment Convertible Note at the rate of
$1.25 per share and the right to acquire additional shares of Common Stock upon
conversion of accrued interest under such Deferred Payment Convertible Note at
the rate of $1.25 per share.
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of February 10, 1994 is
approximately 17,214,490.
(A) Each of the Partnership, CEA Investors, and the Joint
Venture may be deemed to beneficially own 11,432,546 shares of
Common Stock, to have shared power to vote or to direct the
vote with respect to 10,365,622 shares of Common Stock, to
have shared power to dispose or to direct the disposition with
respect to 7,056,812 shares of Common Stock and to have no
shares of Common Stock for which any such Reporting Persons
has sole voting power or sole dispositive power.
(B) Michaels may be deemed to beneficially own 11,432,546
shares of Common Stock, to have sole power to vote or to
direct the vote with respect to 100,000 shares, to have shared
power to vote or to direct the vote with respect to 10,372,546
shares, to have sole power to dispose or to direct the
disposition of 100,000 shares and to have shared power to
dispose or to direct the disposition of 7,063,736 shares of
Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person including, without
limitation, (a) any shares which may be acquired by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event StarNet elects to convert
interest which accrues and remains unpaid under the Deferred Payment Convertible
Notes and (b) any shares which may be purchasable by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event the Company elects to issue
additional Deferred Payment Convertible Notes to DSN in consideration for
deferral of any additional payments due under the Service Agreement.
Gawthrop may be deemed to be the beneficial owner of 11,433,700 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote; 11,432,546 shares as to which there is
shared power to vote or to direct the vote; 1,154 shares as to which there is
sole power to dispose or to direct the disposition; and 7,056,812 shares as to
which there is shared power to dispose or to direct the disposition.
Cardy may be deemed to be the beneficial owner of 11,433,700 shares of
Common Stock with 1,154 shares of Common Stock as to which there is sole power
to vote or to direct the vote; 11,432,546 shares as to which there is shared
power to vote or to direct the vote; 1,154 shares as to which there is sole
power to dispose or to direct the disposition; and 7,056,812 shares as to which
there is shared power to dispose or to direct the disposition.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
7
<PAGE>
Item 6. Contracts, Arrangements, Understandings Or Relationships With Respect
To Securities Of The Issuer
The Company submitted notice to DSN of the Company's intention to defer
payment of $200,000 due to DSN under the Service Agreement for the month of
February 1994. The February 1, 1994 Deferred Payment Convertible Note will be
issued to DSN, subject to the purchase by Liberty of its proportionate share in
the event it chooses to exercise its pre-emptive rights, after the expiration of
the notice period provided by the Company to Liberty with respect to such
pre-emptive rights. The Company has notified Liberty of its opportunity to
purchase up to 6.9909% of the February 1, 1994 Deferred Payment Convertible
Note. If Liberty exercises its pre-emptive rights, a portion of the Notes will
be issued to Liberty for a purchase price equal to the proportionate principal
of the notes acquired by Liberty and the Reporting Persons believe such cash
proceeds will be used by the Company as a partial payment to StarNet of amounts
due under the Service Agreement.
Under the terms of each Deferred Payment Convertible Note, the Company
must commence payment on the third anniversary of the respective Deferred
Payment Convertible Note in thirty (30) equal monthly installments plus interest
on each installment. The Company must give notice of its intention to make
prepayments of all or a portion of principal and accrued interest on any
Deferred Payment Convertible Note and the holder may elect to receive such
prepayment in Common Stock at the conversion rate of $1.25 per share. The holder
of any Deferred Payment Convertible Note may convert all (but not less than all)
of the principal and accrued interest at the conversion rate of $1.25 per share
at any time prior to the third anniversary of such note, so long as (i) the
prior approval of the FCC has been obtained or is not required and/or (ii) no
filing under the Hart-Scott Rodino Act is required, or if required, the waiting
period has expired without objection by the Federal Trade Commission or the
Department of Justice or early termination has been granted with respect to such
a filing.
Except as specifically modified, amended or supplemented by this
Amendment No. 6, all of the information in the Original Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Joint Filing Agreement with respect to the joint filing of
Amendment No. 6 to Schedule 13D and all amendments thereto.
8
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
-------------------------------------
As: VP
-------------------------------------
By: /s/ THOMAS W. CARDY Dated: FEBRUARY 10, 1994
--------------------------- ----------------------------
As: VP
---------------------------
Dated: FEBRUARY 10, 1994
-------------------------
/s/ J. PATRICK MICHAELS, JR.
- -------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: FEBRUARY 10, 1994 By: CEA Investors Partnership
------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
-------------------------------------
As: VP
-------------------------------------
Dated: FEBRUARY 10, 1994
----------------------------------
9
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 7 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class of Securities)
92656G 10 8
--------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
FEBRUARY 11, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,432,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,452,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 100,000
Beneficially 8. Shared Voting Power
Owned By 10,372,546
Each 9. Sole Dispositive Power
Reporting 100,000
Person With 10. Shared Dispositive Power
7,063,736
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,432,456
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,432,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
62.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 7 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, 1993 (the "September Amendment") and
as amended by Amendment No. 3 thereto dated September 13, 1993 ("Amendment No.
3") and as amended by Amendment No. 4 thereto dated December 20, 1993
("Amendment No. 4") and as amended by Amendment No. 5 thereto dated January 11,
1994 ("Amendment No. 5") and as amended by Amendment No. 6 thereto dated
February 10, 1994 ("Amendment No. 6") (the July Statement as amended by the
August Amendment, September Amendment, Amendment No. 3, Amendment No. 4,
Amendment No. 5 and Amendment No. 6 is referred to as the "Original Statement"),
is jointly filed by the persons listed on the execution pages hereof (the
"Reporting Persons") pursuant to the Joint Filing Agreement filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose the agreement in principle of
StarNet/CEA II Partners (the "Joint Venture") to purchase additional shares of
Common Stock pursuant to a rights offering proposed to be conducted by the
Company, as further described in Item 6 below, and to disclose certain other
agreements in principle reached by the Joint Venture and its partners, CEA
Investors Partnership II, Ltd. ("CEA II, Ltd.) and StarNet Interactive
Entertainment, Inc. ("StarNet INT"), a wholly owned subsidiary of StarNet, Inc.
("StarNet"), with Island Pictures, a division of Island Trading Company
("Island"). Items 7, 8, 9, 10, 11 and 13 of the cover pages filed herewith do
not reflect shares of Common Stock which may be purchased by the Joint Venture
in the event the Company commences the rights offering.
Except as specifically modified, amended or supplemented by this
Amendment No. 7, all of the information in the Original Statement is hereby
confirmed.
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity And Background
Each of the Reporting Persons, other than the Joint Venture, expressly
declares that the filing of this Amendment shall not be construed as an
admission that such person is, for the purposes of Section 13(d) or 13(g) of the
Act, the beneficial owner of any securities covered by this Amendment. The Joint
Venture expressly declares that the filing of this Amendment shall not be
construed as an admission that such person is, for the purposes of Section 13(d)
or 13(g) of the Act, the beneficial owner of any securities covered by this
Amendment except to the extent the Joint Venture may be deemed to be a
beneficial owner of such securities pursuant to Rule 13d-5(b)(1) under the Act.
Item 3 of the Original Statement is hereby amended and supplemented as follows:
Item 3. Source And Amount Of Funds And Other Consideration
The Common Stock proposed to be issued pursuant to the Proposed
Offering (as that term is defined herein) is contemplated to be issued at $2.00
per share. If and to the extent that such Common Stock is purchased by the Joint
Venture, the Joint Venture will pay the purchase price therefor from working
capital, through additional capital contributions from CEA II, Ltd. and StarNet
6
<PAGE>
INT, the partners of the Joint Venture. CEA II, Ltd. anticipates it would raise
up to $2,000,000 pursuant to capital calls from its partners and it would
advance such funds as capital contributions to the Joint Venture. CEA Investors,
Inc., the general partner of CEA II, Ltd. anticipates it would raise up to
$2,000,000 of such funds as equity contributions from J. Patrick Michaels, Jr.,
its sole shareholder. The Reporting Persons believe that StarNet INT anticipates
it would obtain an interest bearing loan of up to $2,000,000 from Lenfest
Communications, Inc. ("LCI") and it would advance such funds as capital
contributions to the Joint venture and that LCI would make such loan out of its
working capital.
Item 4 of the Original Statement is hereby amended and supplemented as follows:
Item 4. Purpose Of Transaction
The principal purposes of the Joint Venture and the other Reporting Persons
remain as set forth in Item 4 of the Original Statement. As described in Item 6
herein, the Joint Venture has agreed to acquire its pro rata portion of Common
Stock to be offered in the Proposed Offering plus all shares of Common Stock
that are not purchased by the other shareholders of the Company in the Proposed
Offering. As described in Item 6, the Joint Venture, StarNet INT, and CEA II,
Ltd. have agreed in principle to grant certain Tag Along Rights (as defined
herein) to Island in exchange for reciprocal tag along rights from Island
relating to the proposed sale of shares of Common Stock held by such parties or
the proposed sale of interests in the Joint Venture, StarNet INT or CEA II, Ltd.
The Joint Venture has agreed in principle to vote its shares of the Company's
Common Stock to elect as a director of the Company a designee of Island.
Item 6 of the Original Statement is hereby amended and supplemented as follows:
Item 6. Contracts, Arrangements, Understandings Or Relationships With
Respect To Securities Of The Issuer
As reported in the Form 8-K filed by the Company on or about February
22, 1994, the Company has reached an agreement in principle with Island for the
sale to Island of 2,500,000 shares of Common Stock and options to purchase an
additional 2,500,000 shares of Common Stock, for an aggregate purchase price of
$5,000,000 (the "Island Transaction").
In connection with the Island Transaction, the Company has also
reported in the Form 8-K that it intends to offer rights to purchase 2,000,000
shares of Common Stock for $2.00 per share on a pro rata basis to the holders of
record of Common Stock as of a record date which has not yet been determined
(the "Proposed Offering"). The Company has reported that if the Proposed
Offering is undertaken, the shares of Common Stock issuable in the Proposed
Offering will be registered pursuant to the Securities Act of 1933, as amended.
The Joint Venture has agreed in principle to purchase its pro rata
portion of shares of Common Stock offered in the Proposed Offering, plus all
shares of Common Stock that are not purchased by the other shareholders in the
Proposed Offering. The Joint Venture, StarNet INT and CEA II, Ltd. have further
agreed in principle to grant to Island, under certain circumstances in which
shares of Common Stock held by the Joint Venture, or interests in the Joint
Venture, StarNet INT or CEA II, Ltd. are to be sold, the right to include a
proportionate number of Island's shares of Common Stock in such sale on the same
terms and conditions on which the Joint Venture proposes to sell its Common
Stock or the appropriate party proposes to sell its interests in the Joint
Venture, StarNet INT or CEA II, Ltd. ("Tag Along Rights").
The Reporting Persons will require that reciprocal "tag along" rights
be granted by Island to the Joint Venture, StarNet INT and CEA II, Ltd. covering
the sale by Island of any of the Company's Common Stock covered by the Island
Transaction, effective at the sooner to occur of (i) the date on which Island
exercises options acquired in the Island Transaction to purchase 500,000 shares
of Common Stock at $2.00 per share, which options are reported by the Company in
its Form 8-K referred to above to be exercisable for a period of one year from
the closing of the Island Transaction or (ii) one year from the closing of the
Island Transaction.
In connection with its agreements in principle with Island, the Joint
Venture has agreed to vote its shares of the Company's Common Stock to elect as
a director of the Company a designee of Island.
7
<PAGE>
The Company has reported on its Form 8-K referenced above that the
consummation of the Island Transaction is subject to the negotiation of
definitive agreements. The consummation of the agreements in principle between
the Joint Venture and its partners and Island is subject to the consummation of
the Island Transaction and to the execution of definitive agreements between
such parties.
It is not known at this date what proportion of the Common Stock
offered in the Proposed Offering will ultimately be purchased by the Joint
Venture, and, accordingly it is not known at this date the extent to which such
purchase may affect the beneficial ownership of Common Stock with respect to
each Reporting Person. If the Joint Venture purchases solely its pro rata
interest in the Proposed Offering, based on the percentage of the Company's
outstanding Common Stock held of record by the Joint Venture at the date hereof,
the Joint Venture would purchase approximately 819,800 shares of such Common
Stock at an aggregate price of $1,639,600 (or $2.00 per share). If none of the
other stockholders of the Company purchase any shares of such Common Stock in
the Proposed Offering, the Joint Venture has agreed to purchase all 2,000,000
shares covered by such Proposed Offering at an aggregate price of $4,000,000 (or
$2.00 per share).
Except as specifically modified, amended or supplemented by this
Amendment No. 7, all of the information in the Original Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Joint Filing Agreement with respect to the joint filing of
Amendment No. 7 to Schedule 13D and all amendments thereto.
8
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
--------------------------------
As: VP
--------------------------------
By: /s/ THOMAS W. CARDY Dated: FEBRUARY 23, 1994
---------------------------- -----------------------------
As: VP
----------------------------
Dated: FEBRUARY 23, 1994
--------------------------
/s/ J. PATRICK MICHAELS, JR.
- --------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: FEBRUARY 23, 1994 By: CEA Investors Partnership
-------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: VP
------------------------------------
Dated: FEBRUARY 23, 1994
---------------------------------
9
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 8 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class of Securities)
92656G 10 8
--------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
MARCH 1, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,592,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
63.2%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,592,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
63.2%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 100,000
Beneficially 8. Shared Voting Power
Owned By 10,372,546
Each 9. Sole Dispositive Power
Reporting 100,000
Person With 10. Shared Dispositive Power
7,063,736
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,592,456
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
63.2%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,593,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
63.2%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 8 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, 1993 (the "September Amendment") and
as amended by Amendment No. 3 thereto dated September 13, 1993 ("Amendment No.
3") and as amended by Amendment No. 4 thereto dated December 20, 1993
("Amendment No. 4") and as amended by Amendment No. 5 thereto dated January 11,
1994 ("Amendment No. 5") and as amended by Amendment No. 6 thereto dated
February 10, 1994 ( "Amendment No. 6") and as amended by Amendment No. 7 thereto
dated February 23, 1994 ("Amendment No. 7") (the July Statement as amended by
the August Amendment, September Amendment, Amendment No. 3, Amendment No. 4,
Amendment No. 5, Amendment No. 6, and Amendment No. 7 is referred to as the
"Original Statement"), is jointly filed by the persons listed on the execution
pages hereof (the "Reporting Persons") pursuant to the Joint Filing Agreement
filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose the acquisition by StarNet, Inc.
("StarNet") of a "Deferred Payment Convertible Note" (as defined herein)
convertible into shares of the Company's Common Stock and the acquisition by CEA
Investors Partnership II, Ltd. (the "Partnership") of a right to acquire all or
a part of 85,000 shares of Common Stock from Venture LW Corporation ("VLW").
Except as specifically modified, amended or supplemented by this
Amendment No. 8, all of the information in the Original Statement is hereby
confirmed.
Items 11 and 13 of the cover pages filed herewith have been amended to
reflect numbers of shares of Common Stock as appropriate in light of the
amendments described below.
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity And Background
Each of the Reporting Persons, other than StarNet/CEA II Partners (the
"Joint Venture"), expressly declares that the filing of this Amendment shall not
be construed as an admission that such person is, for the purposes of Section
13(d) or 13(g) of the Act, the beneficial owner of any securities covered by
this Amendment. The Joint Venture expressly declares that the filing of this
Amendment shall not be construed as an admission that such person is, for the
purposes of Section 13(d) or 13(g) of the Act, the beneficial owner of any
securities covered by this Amendment and held by or issuable to StarNet, Inc.
except to the extent the Joint Venture may be deemed to be a beneficial owner of
such securities pursuant to Rule 13d-5(b)(1) under the Act.
Item 3 of the Original Statement is hereby amended and supplemented as
follows:
Item 3. Source And Amount Of Funds And Other Consideration
In consideration for deferral of the monthly payment of $200,000 due in
March, 1994 to Digital Satellite Network ("DSN"), a division of StarNet, under
the satellite transponder Service Agreement (the "Service Agreement") dated
August 24, 1993 between the Company and StarNet, the Company as of March 1, 1994
intends to issue to DSN a $200,000 Convertible Note (the "March 1, 1994 Deferred
Payment Convertible Note"). The Deferred Payment Convertible Notes ("Deferred
6
<PAGE>
Payment Convertible Notes") issued and issuable under the Service Agreement
accrue interest at the prime rate as listed on the first business day of the
month in which such notes are issued in the Wall Street Journal plus one percent
(1%) and are convertible in accordance with their terms into shares of the
Company's Common Stock at the conversion rate of $1.25 per share as to principal
and accrued interest. A copy of the Service Agreement was filed as Exhibit 2 to
Amendment No. 4. A copy of the form of September 1, 1993 Deferred Payment
Convertible Note filed as Exhibit 3 to Amendment No. 4, except for the date
thereof and variations in the interest rate, if any, is identical in all
material respects to the March 1, 1994 Deferred Payment Convertible Note and
each of the Deferred Payment Convertible Notes issued and issuable by the
Company pursuant to the Service Agreement.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer
Under the March 1, 1994 Deferred Payment Convertible Note, StarNet has
acquired the right to acquire 160,000 shares of Common Stock by conversion of
the principal amount of such Deferred Payment Convertible Note at the rate of
$1.25 per share and the right to acquire additional shares of Common Stock upon
conversion of accrued interest under such Deferred Payment Convertible Note at
the rate of $1.25 per share.
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of March 9, 1994 is
approximately 17,214,490.
(A) Each of the Partnership, CEA Investors, and the Joint
Venture may be deemed to beneficially own 11,592,596 shares of
Common Stock, to have shared power to vote or to direct the
vote with respect to 10,365,622 shares of Common Stock, to
have shared power to dispose or to direct the disposition with
respect to 7,056,812 shares of Common Stock and to have no
shares of Common Stock for which any such Reporting Persons
has sole voting power or sole dispositive power.
(B) Michaels may be deemed to beneficially own 11,592,546
shares of Common Stock, to have sole power to vote or to
direct the vote with respect to 100,000 shares, to have shared
power to vote or to direct the vote with respect to 10,372,546
shares, to have sole power to dispose or to direct the
disposition of 100,000 shares and to have shared power to
dispose or to direct the disposition of 7,063,736 shares of
Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person including, without
limitation, (a) any shares which may be acquired by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event StarNet elects to convert
interest which accrues and remains unpaid under the Deferred Payment Convertible
Notes and (b) any shares which may be purchasable by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event the Company elects to issue
additional Deferred Payment Convertible Notes to DSN in consideration for
deferral of any additional payments due under the Service Agreement.
Gawthrop may be deemed to be the beneficial owner of 11,593,700 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote; 11,592,546 shares as to which there is
shared power to vote or to direct the vote; 1,154 shares as to which there is
sole power to dispose or to direct the disposition; and 7,056,812 shares as to
which there is shared power to dispose or to direct the disposition.
Cardy may be deemed to be the beneficial owner of 11,593,700 shares of
Common Stock with 1,154 shares of Common Stock as to which there is sole power
to vote or to direct the vote; 11,592,546 shares as to which there is shared
power to vote or to direct the vote; 1,154 shares as to which there is sole
power to dispose or to direct the disposition; and 7,056,812 shares as to which
there is shared power to dispose or to direct the disposition.
7
<PAGE>
On February 28, 1994 VLW delivered notice to the Partnership of VLW's
intention to sell under Rule 144 sales up to 85,000 shares of Common Stock at a
minimum price of $3.00 per share, which shares may be deemed beneficially owned
by the Partnership, CEA Investors, the Joint Venture, Michaels, Gawthrop and
Cardy, pursuant to a right of first refusal granted by the VLW Group to the
Partnership in the VLW Proxy Agreement, which right to acquire is described in
Item 6 herein. The Partnership declined to exercise this right.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
Item 6. Contracts, Arrangements, Understandings Or Relationships With Rrespect
To Securities Of The Issuer
The Company submitted notice to DSN of the Company's intention to defer
payment of $200,000 due to DSN under the Service Agreement for the month of
March 1994. The March 1, 1994 Deferred Payment Convertible Note will be issued
to DSN, subject to the purchase by Liberty of its proportionate share in the
event it chooses to exercise its pre-emptive rights, after the expiration of the
notice period provided by the Company to Liberty with respect to such
pre-emptive rights. The Company has notified Liberty of its opportunity to
purchase up to 6.9909% of the March 1, 1994 Deferred Payment Convertible Note.
If Liberty exercises its pre-emptive rights, a portion of the Notes will be
issued to Liberty for a purchase price equal to the proportionate principal of
the notes acquired by Liberty and the Reporting Persons believe such cash
proceeds will be used by the Company as a partial payment to StarNet of amounts
due under the Service Agreement.
Under the terms of each Deferred Payment Convertible Note, the Company
must commence payment on the third anniversary of the respective Deferred
Payment Convertible Note in thirty (30) equal monthly installments plus interest
on each installment. The Company must give notice of its intention to make
prepayments of all or a portion of principal and accrued interest on any
Deferred Payment Convertible Note and the holder may elect to receive such
prepayment in Common Stock at the conversion rate of $1.25 per share. The holder
of any Deferred Payment Convertible Note may convert all (but not less than all)
of the principal and accrued interest at the conversion rate of $1.25 per share
at any time prior to the third anniversary of such note, so long as (i) the
prior approval of the FCC has been obtained or is not required and/or (ii) no
filing under the Hart-Scott Rodino Act is required, or if required, the waiting
period has expired without objection by the Federal Trade Commission or the
Department of Justice or early termination has been granted with respect to such
a filing.
On February 28, 1994 VLW delivered notice to the Partnership of VLW's
intention to sell under Rule 144 sales up to 85,000 shares of Common Stock at a
minimum price of $3.00 per share. Under the terms of the VLW Proxy Agreement,
this notice gave the Partnership or its designee (initially the Joint Venture)
the right to acquire all or part of such 85,000 shares at a purchase price of
$3.00 per share, which shares are currently subject to an irrevocable voting
proxy granted by VLW in favor of the Partnership. The Partnership declined to
exercise the right to acquire any of the 85,000 shares. If all or part of the
85,000 shares are subsequently sold by VLW to a third party, the shares so sold
would no longer be subject to the VLW Proxy Agreement; accordingly, none of the
Partnership, CEA Investors, the Joint Venture, Michaels, Gawthrop and Cardy
would after such sale have any beneficial interest therein. However, if VLW
desires to sell under Rule l44 sales any shares of Common Stock prior to June
11, 1994 at a price of less than $3.00 per share, VLW must again by the terms of
the VLW Proxy Agreement grant the Partnership the right to acquire all or part
of the shares of Common Stock proposed to be sold.
Except as specifically modified, amended or supplemented by this
Amendment No. 8, all of the information in the Original Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Joint Filing Agreement with respect to the joint filing of
Amendment No. 8 to Schedule 13D and all amendments thereto.
8
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
--------------------------------
As: VP
--------------------------------
By: /s/ THOMAS W. CARDY Dated: MARCH 9, 1994
---------------------------- -----------------------------
As: VP
----------------------------
Dated: MARCH 9, 1994
--------------------------
/s/ J. PATRICK MICHAELS, JR.
- --------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: MARCH 9, 1994 By: CEA Investors Partnership
-------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: VP
------------------------------------
Dated: MARCH 9, 1994
---------------------------------
9
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 9 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class of Securities)
92656G 10 8
--------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
MAY 1, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,878,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.1%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,878,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.1%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 65,000
Beneficially 8. Shared Voting Power
Owned By 10,372,546
Each 9. Sole Dispositive Power
Reporting 65,000
Person With 10. Shared Dispositive Power
7,063,736
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,878,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.1%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,878,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.1%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------------------------------------------------------------------------
5
<PAGE>
This Amendment No. 9 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, 1993 (the "September Amendment") and
as amended by Amendment No. 3 thereto dated September 13, 1993 ("Amendment No.
3") and as amended by Amendment No. 4 thereto dated December 20, 1993
("Amendment No. 4") and as amended by Amendment No. 5 thereto dated January 11,
1994 ("Amendment No. 5") and as amended by Amendment No. 6 thereto dated
February 10, 1994 ("Amendment No. 6") and as amended by Amendment No. 7 thereto
dated February 23, 1994 ("Amendment No. 7") and as amended by Amendment No. 8
thereto dated March 9, 1994 ("Amendment No. 8") (the July Statement as amended
by the August Amendment, September Amendment, Amendment No. 3, Amendment No. 4,
Amendment No. 5, Amendment No. 6, Amendment No. 7, and Amendment No. 8 is
referred to as the "Original Statement"), is jointly filed by the persons listed
on the execution pages hereof (the "Reporting Persons") pursuant to the Joint
Filing Agreement filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose the acquisition by StarNet, Inc.
("StarNet") of two "Deferred Payment Convertible Notes" (as defined herein)
convertible into shares of the Company's Common Stock, the sale of 35,000 shares
of Common Stock by J. Patrick Michaels, Jr. ("Michaels"), 25,000 of which were
sold to Thomas W. Cardy Family Trust, the agreement between the Company and
StarNet/CEA II Partners (the "Joint Venture"') relating to the purchase of
unpurchased shares to be offered by the Company in a proposed rights offering,
certain agreements between Island Trading Company, Inc. ("Island"), the Company,
the Joint Venture, CEA Investors Partnership II, Ltd. ("CEA II Ltd." or the
"Partnership"), and StarNet Interactive Entertainment, Inc. ("StarNet INT"), and
certain changes in the Board of Directors.
Except as specifically modified, amended or supplemented by this
Amendment all of the information in the Original Statement is hereby confirmed.
Items 7, 8, 9, 10, 11 and 13 of the cover pages filed herewith have
been amended to reflect numbers of shares of Common Stock as appropriate in
light of the amendments described below, except that such items do not reflect
shares of Common Stock which may be purchased by the Joint Venture in the event
the Company commences the Rights Offering.
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity And Background
Each of the Reporting Persons, other than the Joint Venture, expressly
declares that the filing of this Amendment shall not be construed as an
admission that such person is, for the purposes of Section 13(d) or 13(g) of the
Act, the beneficial owner of any securities covered by this Amendment. The Joint
Venture expressly declares that the filing of this Amendment shall not be
construed as an admission that such person is, for the purposes of Section 13(d)
or 13(g) of the Act, the beneficial owner of any securities covered by this
Amendment except to the extent the Joint Venture may be deemed to be a
beneficial owner of such securities pursuant to Rule 13d-5(b)(1) under the Act.
The filing of the Original Statement and this Amendment shall not be construed
as an admission that Thomas W. Cardy or H. Gene Gawthrop are, for the purposes
of Section 13(d) or 13(g) of the Act, the beneficial owners of any securities
covered by the Original Statement and this Amendment.
6
<PAGE>
Item 3 of the Original Statement is hereby amended and supplemented as follows:
Item 3. Source And Amount Of Funds And Other Consideration
In consideration for deferral of the monthly payments of $200,000 due
in April, 1994 and $200,000 due in May, 1994 to Digital Satellite Network
("DSN"), a division of StarNet, Inc. ("StarNet") under the satellite transponder
Service Agreement (the "Service Agreement") dated August 24, 1993 between the
Company and StarNet, the Company as of April 1, 1994 issued to DSN a $200,000
Convertible Note (the "April 1, 1994 Deferred Payment Convertible Note") and as
of May 1, 1994 intends to issue to DSN a $200,000 Convertible Note (the "May 1,
1994 Deferred Payment Convertible Note"). The Deferred Payment Convertible Notes
("Deferred Payment Convertible Notes") issued and issuable under the Service
Agreement accrue interest at the prime rate as listed on the first business day
of the month in which such notes are issued in the Wall Street Journal plus one
percent (1%) and are convertible in accordance with their terms into shares of
the Company's Common Stock at the conversion rate of $1.25 per share as to
principal and accrued interest. A copy of the Service Agreement was filed as
Exhibit 2 to Amendment No. 4. A copy of the form of September 1, 1993 Deferred
Payment Convertible Note filed as Exhibit 3 to Amendment No. 4, except for the
date thereof and variations in the interest rate, if any, is identical in all
material respects to the April 1 and May 1, 1994 Deferred Payment Convertible
Notes and each of the Deferred Payment Convertible Notes issued and issuable by
the Company pursuant to the Service Agreement.
The Company has reported in its Form 8-K filed on or about April 26,
1994 that it intends to proceed with the Rights Offering (as that term is
defined herein) of 2,000,000 shares of Common Stock for $2.00 per share. The
source and amount of funds and other consideration for the Joint Venture, CEA
II, Ltd., CEA Investors, Inc., Michaels and StarNet INT remains as disclosed in
Item 3 of Amendment No. 7.
Item 4 of the Original Statement is hereby amended and supplemented as follows:
Item 4. Purpose Of Transaction
The principal purposes of the Joint Venture and the other Reporting
Persons remain as set forth in Item 4 of the Original Statement. As described in
Item 6 herein, the Joint Venture has agreed to subscribe for and purchase any
and all of 2,000,000 shares of Common Stock which are the subject of the Rights
Offering not purchased by the other shareholders of the Company in the Rights
Offering. As described in Item 6, the Joint Venture, StarNet INT, and CEA II,
Ltd. have agreed to grant certain Tag Along Rights (as defined herein) to Island
in exchange for reciprocal tag along rights from Island relating to the proposed
sale of shares of Common Stock held by such parties or the proposed sale of
interests in the Joint Venture, StarNet INT or CEA II, Ltd.
As reported by the Company in the Form 8-K: Christopher Blackwell
("Blackwell"), a consultant to Island, was appointed to the Board of Directors
on April 21, 1994, pursuant to the Stock Purchase Agreement between the Company
and Island; Mr. Blackwell filled the vacancy created by Joseph V. Furfaro's
resignation; Blackwell and H.F. Lenfest, the Chairman of the Board, will be
appointed to the Executive Committee of the Board. The Executive Committee is to
include Michaels, the Vice Chairman of the Board and the Company's Acting
President and Acting Chief Operating Officer. Leonard Sokolow and Jules
Haimovitz resigned as members of the Executive Committee but continue to serve
as directors. Under the "Tag Along Agreement" (as defined herein) the Joint
Venture has agreed to use its best efforts to cause the nomination and election
to the Board of Directors of the Company of one designee of Island reasonably
acceptable to the Joint Venture (it was acknowledged that Blackwell is
acceptable) and to vote the shares of Common Stock held of record by the Joint
Venture for the election of such Island designee to the Board of Directors.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer
7
<PAGE>
Under the April 1, 1994 Deferred Payment Convertible Note, StarNet has
acquired the right to acquire 160,000 shares of Common Stock by conversion of
the principal amount of such Deferred Payment Convertible Note at the rate of
$1.25 per share and the right to acquire additional shares of Common Stock upon
conversion of accrued interest under such Deferred Payment Convertible Note at
the rate of $1.25 per share.
Under the May 1, 1994 Deferred Payment Convertible Note, StarNet has
acquired the right to acquire 160,000 shares of Common Stock by conversion of
the principal amount of such Deferred Payment Convertible Note at the rate of
$1.25 per share and the right to acquire additional shares of Common Stock upon
conversion of accrued interest under such Deferred Payment Convertible Note at
the rate of $1.25 per share.
Under the nine Deferred Payment Convertible Notes outstanding,
including the April 1, 1994 and May 1, 1994 Deferred Payment Convertible Notes,
StarNet has the right to acquire 1,440,000 shares of Common Stock by conversion
of the principal amount of such notes at the rate of $1.25 per share.
On March 16, 1994 in private transactions Michaels transferred 65,000
shares of Common Stock to the John P. Michaels, Jr. Family Trust; sold 25,000
shares to Thomas W. Cardy Family Trust at a purchase price of $1.50 per share;
and sold 10,000 shares to an individual at a purchase price of $1.50 per share.
Thomas W. Cardy ("Cardy") is the Trustee of the Thomas W. Cardy Family Trust and
Vice President of CEA Investors, Inc. ("CEA Investors").
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of May 2, 1994 is
approximately 19,745,894.
(A) Each of the Partnership, CEA Investors, and the Joint Venture
may be deemed to beneficially own 11,878,546 shares of Common
Stock, to have shared power to vote or to direct the vote with
respect to 10,365,622 shares of Common Stock, to have shared
power to dispose or to direct the disposition with respect to
7,056,812 shares of Common Stock and to have no shares of Common
Stock for which any such Reporting Persons has sole voting power
or sole dispositive power.
(B) Michaels may be deemed to beneficially own 11,878,546 shares of
Common Stock, to have sole power to vote or to direct the vote
with respect to 65,000 shares, to have shared power to vote or
to direct the vote with respect to 10,372,546 shares, to have
sole power to dispose or to direct the disposition of 65,000
shares and to have shared power to dispose or to direct the
disposition of 7,063,736 shares of Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person including, without
limitation, (a) any shares which may be acquired by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event StarNet elects to convert
interest which accrues and remains unpaid under the Deferred Payment Convertible
Notes, (b) any shares which may be purchasable by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event the Company elects to issue
additional Deferred Payment Convertible Notes to DSN in consideration for
deferral of any additional payments due under the Service Agreement, and (c) any
shares which may be purchased by the Joint Venture in connection with the Rights
Offering (as defined and described in Item 6 below).
Gawthrop may be deemed to be the beneficial owner of 11,879,700 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote; 10,365,622 shares as to which there is
shared power to vote or to direct the vote; 1,154 shares as to which there is
sole power to dispose or to direct the disposition; and 7,056,812 shares as to
which there is shared power to dispose or to direct the disposition.
Cardy may be deemed to be the beneficial owner of 11,904,700 shares of
Common Stock with 26,154 shares of Common Stock as to which there is sole power
to vote or to direct the vote; 10,365,622 shares as to which there is shared
power to vote or to direct the vote; 26,154 shares as to which there is sole
8
<PAGE>
power to dispose or to direct the disposition; and 7,056,812 shares as to which
there is shared power to dispose or to direct the disposition. Gawthrop and
Cardy each own interests as limited partners in the Partnership.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
Item 6. Contracts, Arrangements, Understandings Or Relationships With Respect
To Securities Of The Issuer
The Company submitted notice to DSN of the Company's intention to defer
payment of $200,000 due to DSN under the Service Agreement for the month of
April 1994. The Company notified Liberty of its opportunity to purchase up to
6.9909% of the April 1, 1994 Deferred Payment Convertible Note. Liberty waived
its pre-emptive rights as to the note and the Company issued the April 1, 1994
Deferred Payment Convertible Note to DSN.
The Company submitted notice to DSN of the Company's intention to defer
payment of $200,000 due to DSN under the Service Agreement for the month of May
1994. The May 1, 1994 Deferred Payment Convertible Note will be issued to DSN,
subject to the purchase by Liberty of its proportionate share in the event it
chooses to exercise its pre-emptive rights, after the expiration of the notice
period provided by the Company to Liberty with respect to such pre-emptive
rights. The Company has notified Liberty of its opportunity to purchase up to
6.9909% of the May 1, 1994 Deferred Payment Convertible Note. If Liberty
exercises its pre-emptive rights, a portion of the note will be issued to
Liberty for a purchase price equal to the proportionate principal of the note
acquired by Liberty and the Reporting Persons believe such cash proceeds will be
used by the Company as a partial payment to StarNet of amounts due under the
Service Agreement.
Under the terms of each Deferred Payment Convertible Note, the Company
must commence payment on the third anniversary of the respective Deferred
Payment Convertible Note in thirty (30) equal monthly installments plus interest
on each installment. The Company must give notice of its intention to make
prepayments of all or a portion of principal and accrued interest on any
Deferred Payment Convertible Note and the holder may elect to receive such
prepayment in Common Stock at the conversion rate of $1.25 per share. The holder
of any Deferred Payment Convertible Note may convert all (but not less than all)
of the principal and accrued interest at the conversion rate of $1.25 per share
at any time prior to the third anniversary of such note, so long as (i) the
prior approval of the FCC has been obtained or is not required and/or (ii) no
filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 is
required, or if required, the waiting period has expired without objection by
the Federal Trade Commission or the Department of Justice or early termination
has been granted with respect to such a filing.
As reported in the Form 8-K filed by the Company on or about April 26,
1994, the Company has consummated an agreement with Island for the sale to
Island of 2,500,000 shares of Common Stock and options to purchase an additional
2,500,000 shares of Common Stock, for an aggregate purchase price of $5,000,000
(the "Island Transaction").
In the Registration Rights Agreement dated August 24, 1993 between the
Company and the Joint Venture, the Company agreed not to grant certain demand or
piggyback registration rights. In a letter agreement dated April 11, 1994 (copy
attached hereto as Exhibit 2), the Joint Venture waived the restriction and
consented to the Company's grant of registration rights to Island. In a
Registration Rights Agreement dated April 21, 1994, the Company granted Island
certain demand and piggyback registration rights with respect to the 2,500,000
shares purchased by Island and the 2,500,000 shares underlying the options
acquired in the Island Transaction.
CEA II, Ltd., StarNet INT and the Joint Venture entered into a
Tag-Along Agreement (the "Tag-Along Agreement") dated as of April 21, 1994 with
Island (copy attached hereto as Exhibit 3). Under the Tag-Along Agreement,
Island was granted the right, under certain circumstances in which (i) shares of
Common Stock held by the Joint Venture or (ii) interests in the Joint Venture,
StarNet INT, or CEA II, Ltd., are to be sold, to include a proportionate number
of shares of Common Stock held by Island in such sale on the same terms and
conditions on which the Joint Venture proposes to sell shares of Common Stock
held by it or the appropriate party proposes to sell its interests in the Joint
Venture, StarNet INT or CEA II, Ltd. (the "Tag-Along Rights"). Reciprocal
Tag-Along Rights were granted by Island to the Joint Venture, StarNet INT and
9
<PAGE>
CEA II, Ltd. with respect to (i) the sale by Island of shares of Common Stock
purchased from the Company or held upon exercise of Island's options acquired
from the Company or (ii) the sale of interests in a limited purpose Island
affiliate holding shares of Common Stock. The reciprocal Tag-Along Rights
granted by Island are effective upon the earlier of (i) April 21, 1995 or (ii)
the date Island has exercised options for the purchase of no less than 500,000
shares of Common Stock.
In the Tag-Along Agreement, the Joint Venture agreed that so long as
Island and "Island Transferees" (as defined in the Tag-Along Agreement) hold
issued and outstanding shares of Common Stock constituting no less than
2,000,000 shares or 10% of the outstanding Common Stock of the Company, the
Joint Venture will use its best efforts to cause the nomination and election to
the Board of Directors of the Company of one (1) designee of Island reasonably
acceptable to the Joint Venture and will vote shares, which it has the right to
vote, for the election of such Island designee to the Board of Directors. The
Joint Venture acknowledged that Blackwell is an acceptable designee.
In connection with the Island Transaction, the Company has also
reported in the Form 8-K that: (i) it intends to offer rights ("Rights
Offering") to purchase 2,000,000 shares of Common Stock for $2.00 per share on
the basis of one right for approximately each 9.8 shares of Common Stock owned
of record at the close of business on May 5, 1994; (ii) the rights will be
non-transferable and exercisable for a period of 30 days ("Exercise Period");
and (iii) the Rights Offering will be registered with the Securities and
Exchange Commission.
Pursuant to a Letter Agreement dated April 21, 1994 between the Company
and the Joint Venture (the "Backstop Agreement") (copy attached hereto as
Exhibit 4), the Joint Venture has agreed to subscribe for and purchase any and
all of the 2,000,000 shares of Common Stock which are offered in the Rights
Offering but not purchased by the holders of record at the expiration of the
Exercise Period (the "Unpurchased Shares"), at a purchase price of $2.00 per
share, subject to continued effectiveness of the registration statement filed
with respect to the Rights Offering and to certain material market conditions
set forth in the Backstop Agreement. The Unpurchased Shares will include shares
to be offered to Island in the Rights Offering because, as reported by the
Company in the Form 8-K, Island has agreed not to participate in the Rights
Offering.
In consideration for its commitment to purchase the Unpurchased Shares,
the Joint Venture will be granted a period of three (3) business days after
expiration of the Exercise Period in which to subscribe for and purchase the
Unpurchased Shares, provided that the three day period will be extended, if
necessary, until such time as any required filing by any of the Joint Venture's
ultimate parent entities under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 has been made and the waiting period with respect thereto has expired
without objection by the Federal Trade Commission or the Department of Justice
or early termination has been granted with respect to such filing. The Joint
Venture is not obligated to purchase the Unpurchased Shares if it is unable to
obtain such regulatory approval.
It is not known at this date what proportion of the Common Stock to be
offered in the Rights Offering will ultimately be purchased by the Joint
Venture, and, accordingly it is not known at this date the extent to which such
purchase may affect the beneficial ownership of Common Stock with respect to
each Reporting Person. If the Joint Venture purchases solely its pro rata
interest in the Offering, based on the number of shares of the Company's
outstanding Common Stock held of record by the Joint Venture at the date hereof,
the Joint Venture would purchase approximately 720,000 shares of such Common
Stock at an aggregate price of $1,440,000 (or $2.00 per share). If none of the
other stockholders of the Company purchase any shares of such Common Stock in
the Rights Offering, the Joint Venture has agreed to purchase all 2,000,000
shares covered by such Rights Offering at an aggregate price of $4,000,000 (or
$2.00 per share).
Except as specifically modified, amended or supplemented by this
Amendment No. 9, all of the information in the Original Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Joint Filing Agreement with respect to the joint
filing of Amendment No. 9 to Schedule 13D and
10
<PAGE>
all amendments thereto.
Exhibit 2 Letter Agreement dated April 11, 1994 between
StarNet/CEA II Partners and the Company relating to waiver
under Registration Rights Agreement.
Exhibit 3 Tag-Along Agreement dated as of April 21, 1994
between Island Trading Company, Inc., CEA Investors
Partnership II, Ltd., StarNet Interactive Entertainment, Inc.
and StarNet/CEA II Partners.
Exhibit 4 Letter Agreement dated April 21, 1994 between the
Company and StarNet/CEA II Partners relating to Rights
Offering.
11
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
--------------------------------
As: Vice President
--------------------------------
By: /s/ THOMAS W. CARDY Dated: MAY 10, 1994
---------------------------- -----------------------------
As: Vice President
----------------------------
Dated: MAY 10, 1994
--------------------------
/s/ J. PATRICK MICHAELS, JR.
- --------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: MAY 10, 1994 By: CEA Investors Partnership
-------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: Vice President
------------------------------------
Dated: MAY 10, 1994
---------------------------------
12
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 10 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class of Securities)
92656G 10 8
--------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JUNE 30, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,198,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.7%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,198,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.7%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 65,000
Beneficially 8. Shared Voting Power
Owned By 10,372,546
Each 9. Sole Dispositive Power
Reporting 65,000
Person With 10. Shared Dispositive Power
7,063,736
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,198,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.7%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,056,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,198,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.7%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 10 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the July Statement"), as amended by Amendment No. 1 thereto
dated August 9, 1993 (the "August Amendment") and as amended by Amendment No. 2
thereto dated September 10, 1993 (the September Amendment") and as amended by
Amendment No. 3 thereto dated September 13, 1993 ("Amendment No. 3") and as
amended by Amendment No. 4 thereto dated December 20, 1993 ("Amendment No. 4")
and as amended by Amendment No. 5 thereto dated January 11, 1994 ("Amendment No.
5") and as amended by Amendment No. 6 thereto dated February 10, 1994
("Amendment No. 6") and as amended by Amendment No. 7 thereto dated February 23,
1994 ("Amendment No. 7") and as amended by Amendment No. 8 thereto dated March
9, 1994 ("Amendment No. 8") and as amended by Amendment No. 9 thereto dated May
10, 1994 ("Amendment No. 9") (the July Statement as amended by the August
Amendment, September Amendment, Amendment No. 3, Amendment No. 4, Amendment No.
5, Amendment No. 6, Amendment No. 7, Amendment No. 8, and Amendment No. 9 is
referred to as the "Original Statement"), is jointly filed by the persons listed
on the execution pages hereof (the "Reporting Persons") pursuant to the Joint
Filing Agreement filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment relates to the Common Stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose the acquisition by StarNet, Inc.
("StarNet") of two "Deferred Payment Convertible Notes" (as defined herein)
convertible into shares of the Company's Common Stock, the exercise by CEA
Investors Partnership II, Ltd. ("CEA II Ltd. or the "Partnership") of a right of
refusal to purchase 80,000 shares of Common Stock from Louis Wolfson III,
scheduled to close on July 15, 1994, and the commencement of the rights offering
by the company and the related distribution of rights to the joint venture to
purchase shares in the rights offering and the Joint Venture's agreement to
Purchase shares unpurchased in the rights offering.
Except as specifically modified, amended or supplemented by this
Amendment all of the information in the Original Statement is hereby confirmed.
Items 7, 8, 9, 10, 11 and 13 of the cover pages filed herewith have
been amended to reflect numbers of shares of Common Stock as appropriate in
light of the amendments described below, except that such items do not reflect
shares of Common Stock which may be purchased by the Joint Venture in the event
the Company commences the Rights Offering.
6
<PAGE>
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity and Background
Each of the Reporting Persons, other than StarNet/CEA II Partners (the
"Joint Venture"), expressly declares that the filing of this Amendment shall not
be construed as an admission that such person is, for the purposes of Section
13(d) or 13(g) of the Act, the beneficial owner of any securities covered by
this Amendment. The Joint Venture expressly declares that the filing of this
Amendment shall not be construed as an admission that such person is, for the
purposes of Section 13(d) or 13(g) of the Act, the beneficial owner of any
securities covered by this Amendment except to the extent the Joint Venture may
be deemed to be a beneficial owner of such securities pursuant to Rule
13d-5(b)(1) under the Act. The filing of the Original Statement and this
Amendment shall not be construed as an admission that Thomas W. Cardy or H. Gene
Gawthrop are, for the purposes of Section 13(d) or 13(g) of the Act the
beneficial owners of any securities covered by the Original Statement and this
Amendment.
Item 3 of the Original Statement is hereby amended and supplemented as follows:
Item 3. Source And Amount Of Funds And Other Consideration
In consideration for deferral of the monthly payments of $200,000 due
in June, 1994 and $200,000 due in July, 1994 to Digital Satellite Network
("DSN"), a division of StarNet, Inc. ("StarNet") under the satellite transponder
Service Agreement (the "Service Agreement") dated August 24, 1993 between the
Company and StarNet, the Company as of June 1, 1994 issued to DSN a $200,000
Convertible Note (the "June 1, 1994 Deferred Payment Convertible Note") and as
of July 1, 1994 intends to issue to DSN a $200,000 Convertible Note (the "July
1, 1994 Deferred Payment Convertible Note"). The Deferred Payment Convertible
Notes ("Deferred Payment Convertible Notes") issued and issuable under the
Service Agreement accrue interest at the prime rate as listed on the first
business day of the month in which such notes are issued in the Wall Street
Journal plus one percent (1%) and are convertible in accordance with their terms
into shares of the Company's Common Stock at the conversion rate of $1.25 per
share as to principal and accrued interest. A copy of the Service Agreement was
filed as Exhibit 2 to Amendment No. 4. A copy of the form of September 1, 1993
Deferred Payment Convertible Note filed as Exhibit 3 to Amendment No. 4, except
for the date thereof and variations in the interest rate, if any, is identical
in all material respects to the June 1 and July 1, 1994 Deferred Payment
Convertible Notes and each of the Deferred Payment Convertible Notes issued and
issuable by the Company pursuant to the Service Agreement.
On June 30, 1994 the Company distributed a prospectus relating to its
Rights Offering of 2,000,000 shares of Common Stock for $2.00 per share. The
source and amount of funds and other consideration for the Joint Venture, CEA
II, Ltd., CEA Investors, Inc., Michaels and StarNet INT remains as disclosed in
Item 3 of Amendment No. 7.
Item 4 of the Original Statement is hereby amended and supplemented as follows:
7
<PAGE>
Item 4. Purpose Of Transaction
The principal purposes of the Joint Venture and the other Reporting
Persons remain as set forth in Item 4 of the Original Statement. As described in
Amendment No. 9 and in Item 6 herein, the Joint Venture has agreed to subscribe
for and purchase any and all of 2,000,000 shares of Common Stock which are the
subject of the Rights Offering not purchased by the other shareholders of the
Company in the Rights Offering.
As described in Item 5 and 6 herein, CEA II, Ltd. has exercised its
right of first refusal to purchase 80,000 shares of Common Stock from Louis
Wolfson, III. As further described in Item 6, CEA II, Ltd. has made a contingent
assignment of its right to purchase such 80,000 shares to the Joint Venture.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer
Under the June 1, 1994 Deferred Payment Convertible Note, StarNet has
acquired the right to acquire 160,000 shares of Common Stock by conversion of
the principal amount of such Deferred Payment Convertible Note at the rate of
$1.25 per share and the right to acquire additional shares of Common Stock upon
conversion of accrued interest under such Deferred Payment Convertible Note at
the rate of $1.25 per share.
Under the July 1, 1994 Deferred Payment Convertible Note, StarNet has
acquired the right to acquire 160,000 shares of Common Stock by conversion of
the principal amount of such Deferred Payment Convertible Note at the rate of
$1.25 per share and the right to acquire additional shares of Common Stock upon
conversion of accrued interest under such Deferred Payment Convertible Note at
the rate of $1.25 per share.
Under the eleven Deferred Payment Convertible Notes outstanding,
including the June 1, 1994 and July 1, 1994 Deferred Payment Convertible Notes,
StarNet has the right to acquire 1,760,000 shares of Common Stock by conversion
of the principal amount of such notes at the rate of $1.25 per share.
On June 30, 1994 CEA II, Ltd. exercised its right of first refusal to
purchase 80,000 shares of Common Stock from Louis Wolfson III ("Wolfson") at a
price of $1.80 per share. The closing is scheduled for July 15, 1994. CEA II,
Ltd. currently holds an irrevocable proxy granted by Wolfson to vote such
shares. CEA II, Ltd. has made a contingent assignment of its rights to purchase
such 80,000 shares to the Joint Venture, and the Joint Venture has agreed that
it will purchase such shares from Wolfson on July 15, 1994 subject to the
condition that the waiting period with respect to the HSR Filing has expired
without objection by the Federal Trade Commission and the Department of Justice
or early termination has been granted with respect to such filing. If such
condition is not met, CEA II, Ltd. intends to purchase the 80,000 shares from
Wolfson.
8
<PAGE>
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of July 8, 1994 is
approximately 19,750,894.
(A) Each of the Partnership, CEA Investors, and the Joint
Venture may be deemed to beneficially own 12,198,546 shares of
Common Stock, to have shared power to vote or to direct the
vote with respect to 10,365,622 shares of Common Stock, to
have shared power to dispose or to direct the disposition with
respect to 7,056,812 shares of Common Stock and to have no
shares of Common Stock for which any such Reporting Persons
has sole voting power or sole dispositive Power.
(B) Michaels may be deemed to beneficially own 12,198,546
shares of Common Stock, to have sole power to vote or to
direct the vote with respect to 65,000 shares, to have shared
power to vote or to direct the vote with respect to 10,372,546
shares, to have sole power to dispose or to direct the
disposition of 65,000 shares and to have shared power to
dispose or to direct the disposition of 7,063,736 shares of
Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person including, without
limitation, (a) any shares which may be acquired by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event StarNet elects to convert
interest which accrues and remains unpaid under the Deferred Payment Convertible
Notes, (b) any shares which may be purchasable by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event the Company elects to issue
additional Deferred Payment Convertible Notes to DSN in consideration for
deferral of any additional payments due under the Service Agreement, and (c) any
shares which may be purchased by the Joint Venture in connection with the Rights
Offering (as defined and described in Amendment No. 9 and in Item 6 below).
Gawthrop may be deemed to be the beneficial owner of 12,199,700 shares
of Common Stock with 1,l54 shares of Common Stock as to which there is sole
power to vote or to direct the vote; 10,365,622 shares as to which there is
shared power to vote or to direct the vote; 1,154 shares as to which there is
sole power to dispose or to direct the disposition; and 7,056,812 shares as to
which there is shared power to dispose or to direct the disposition.
Cardy may be deemed to be the beneficial owner of 12,224,700 shares of
Common Stock with 26,154 shares of Common Stock as to WHICH there is sole power
to vote or to direct the vote; 10,365,622 shares as to which there is shared
power to vote or to direct the vote; 26,154 shares as to which there is sole
power to dispose or to direct the disposition; and 7,056,812 shares as to which
there is shared power to dispose or to direct the disposition. Gawthrop and
Cardy each own interests as limited partners in the Partnership.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
Item 6. Contracts, Arrangements, Understandings Or Relationships With Respect
To Securities Of The Issuer
9
<PAGE>
The Company submitted notice to DSN of the Company's intention to defer
payment of $200,000 due to DSN under the Service Agreement for the month of June
1994. The Company notified Liberty of its opportunity to purchase up to 6.0948%
of the June 1, 1994 Deferred Payment Convertible Note. Liberty waived its
pre-emptive rights as to the note and the Company issued the June 1, 1994
Deferred Payment Convertible Note to DSN.
The Company submitted notice to DSN of the Company's intention to defer
payment of $200,000 due to DSN under the Service Agreement for the month of July
1994. The July 1, 1994 Deferred Payment Convertible Note will be issued to DSN,
subject to the purchase by Liberty of its proportionate share in the event it
chooses to exercise its pre-emptive rights, after the expiration of the notice
period provided by the Company to Liberty with respect to such pre-emptive
rights. The Company has notified Liberty of its opportunity to purchase up to
6.0932% of the July 1, 1994 Deferred Payment Convertible Note. If Liberty
exercises its pre-emptive rights, a portion of the note will be issued to
Liberty for a purchase price equal to the proportionate principal of the note
acquired by Liberty and the Reporting Persons believe such cash proceeds will be
used by the Company as a partial payment to StarNet of amounts due under the
Service Agreement.
Under the terms of each Deferred Payment Convertible Note, the Company
must commence payment on the third anniversary of the respective Deferred
Payment Convertible Note in thirty (30) equal monthly installments plus interest
on each installment. The Company must give notice of its intention to make
prepayments give all or a portion of principal and accrued interest on any
Deferred Payment Convertible Note and the holder may elect to receive such
prepayment in Common Stock at the conversion rate of $1.25 per share. The holder
of any Deferred Payment Convertible Note may convert all (but not less than all)
of the principal and accrued interest at the conversion rate of $1.25 per share
at any time prior to the third anniversary of such note, so long as (i) the
prior approval of the FCC has been obtained or is not required and/or (ii) no
filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 is
required, or if required, the waiting period has expired without objection by
the Federal Trade Commission or the Department of Justice or early termination
has been granted with respect to such a filing.
The Company's Registration Statement relating to the Rights Offering
was declared effective on June 28, 1994. On June 30, 1994 the Company
distributed its Prospectus relating to the Rights Offering ("Rights Offering")
of 2,000,000 shares of Common Stock to its shareholders. All shareholders were
offered a non-transferable right (the "Rights") to purchase for $2.00 one share
of Common Stock for each 9.872947 shares of Common Stock owned of record on May
5, 1994. The subscription period ("Exercise Period") expires August 1, 1994.
As described in Amendment No. 9, the Joint Venture has agreed to
subscribe for and purchase any and all of the 2,000,000 shares of Common Stock
which are offered in the Rights Offering but not purchased by the holders of
record at the expiration of the Exercise Period (the "Unpurchased Shares"), at a
purchase price of $2.00 per share, subject to continued effectiveness of the
registration statement filed with respect to the Rights Offering and to certain
material market conditions set forth in the Backstop Agreement.
10
<PAGE>
The ultimate parent entities of the Joint Venture have filed premerger
notifications form under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 ("HSR Filing"). In consideration for its commitment to purchase the
Unpurchased Shares, the Joint Venture has been granted a period of three (3)
business days after expiration of the Exercise Period in which to subscribe for
and purchase the Unpurchased Shares, provided that the three day period will be
extended, if necessary, until such time as the waiting period with respect to
the HSR Filing has expired without objection by the Federal Trade Commission and
the Department of Justice or early termination has been granted with respect to
such filing. The Joint Venture is not obligated to purchase the Unpurchased
Shares if it is unable to obtain such regulatory approval. It is not known at
this date what proportion of the Common Stock to be offered in the Rights
Offering will ultimately be purchased by the Joint Venture, and, accordingly it
is not known at this date the extent to which such purchase may affect the
beneficial ownership of Common Stock with respect to each Reporting Person. If
the Joint Venture purchases solely its pro rata interest in the Rights Offering,
based on the number of shares of the Company's outstanding Common Stock held of
record by the Joint Venture at May 5, 1994, the Joint Venture would purchase
approximately 720,000 shares of such Common Stock at an aggregate price of
$1,440,000 (or $2.00 per share). If none of the other stockholders of the
Company purchase any shares of such Common Stock in the Rights Offering, the
Joint Venture has agreed to purchase all 2,000,000 shares covered by such Rights
Offering at an aggregate price of $4,000,000 (or $2.00 per share).
On June 22, 1994 CEA II, Ltd. received notice from Wolfson of his
intention to sell under Rule 144 up to 80,000 shares of Common Stock of the
Company at a minimum price of $1.80 per share. The notice (copy attached hereto
as Exhibit 2) was delivered pursuant to the Irrevocable Proxy, Right of Refusal
and Tag-Along Agreement dated as of August 27, 1993 between Venture LW
Corporation, Wolfson, CEA II, Ltd. and joined by the Joint Venture (the "VLW
Proxy Agreement"). Under the terms of the VLW Proxy Agreement, CEA II, Ltd. has
a right of first refusal to purchase such shares and CEA II, Ltd. may, without
further notice, designate the Joint Venture as the party which will purchase the
shares. On June 30, 1994 CEA II, Ltd. delivered notice (copy attached hereto as
Exhibit 3) to Wolfson of its election to purchase 80,000 shares of Common Stock
at a purchase price of $1.80 per share, setting the closing date for the
purchase and sale at July 15, 1994.
CEA II, Ltd. has made a contingent assignment of its rights to purchase
such 80,000 shares to the Joint Venture, and the Joint Venture has agreed that
it will purchase such shares from Wolfson on July 15, 1994 subject to the
condition that the waiting period with respect to the HSR Filing has expired
without objection by the Federal Trade Commission and the Department of Justice
or early termination has been granted with respect to such filing. If such
condition is not met, CEA II, Ltd. intends to purchase the 80,000 shares from
Wolfson. CEA II Ltd. currently holds an irrevocable proxy to vote such 80,000
shares pursuant to the terms of the VLW Proxy Agreement.
Except as specifically modified, amended or supplemented by this
Amendment No. 10, all of the information in the Original Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
11
<PAGE>
Exhibit 1 Joint Filing Agreement with respect to the joint
filing of Amendment No. 10 to Schedule 13D and
all amendments thereto.
Exhibit 2 Notice dated June 22, 1994 from Louis
Wolfson III to CEA Investors Partnership II, Ltd.
(received by CEA Investors Partnership II, Ltd.
on June 23, 1994).
Exhibit 3 Notice dated June 30, 1994 from CEA Investors
Partnership II, Ltd. to Louis Wolfson III.
12
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
--------------------------------
As: Vice President
--------------------------------
By: /s/ THOMAS W. CARDY Dated: JULY 8, 1994
---------------------------- -----------------------------
As: Vice President
----------------------------
Dated: JULY 8, 1994
--------------------------
/s/ J. PATRICK MICHAELS, JR.
- --------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: JULY 8, 1994 By: CEA Investors Partnership
-------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: Vice President
------------------------------------
Dated: JULY 8, 1994
---------------------------------
13
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 11 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class Securities)
92656G 10 8
--------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JULY 15, 1994
------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,136,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,198,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.7%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,136,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,198,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.7%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 65,000
Beneficially 8. Shared Voting Power
Owned By 10,372,546
Each 9. Sole Dispositive Power
Reporting 65,000
Person With 10. Shared Dispositive Power
7,143,736
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,198,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.7%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 10,365,622
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
7,136,812
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
12,198,546
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
56.7%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 11 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, 1993 (the "September Amendment") and
as amended by Amendment No. 3 thereto dated September 13, 1993 ("Amendment No.
3") and as amended by Amendment No. 4 thereto dated December 20, 1993
("Amendment No. 4") and as amended by Amendment No. 5 thereto dated January 11,
1994 ("Amendment No. 5") and as amended by Amendment No. 6 thereto dated
February 10, 1994 ("Amendment No. 6") and as amended by Amendment No. 7 thereto
dated February 23, 1994 ("Amendment No. 7") and as amended by Amendment No. 8
thereto dated March 9, 1994 ("Amendment No. 8") and as amended by Amendment No.
9 thereto dated May 10, 1994 ("Amendment No. 9") and as amended by Amendment No.
10 thereto dated July 8, 1994 ("Amendment No. 10") (the July Statement as
amended by the August Amendment, September Amendment, Amendment No. 3, Amendment
No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment No. 8,
Amendment No. 9 and Amendment No. 10 is referred to as the "Original
Statement"), is jointly filed by the persons listed on the execution pages
hereof (the "Reporting Persons") pursuant to the Joint Filing Agreement filed as
Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment relates to the common stock, par value $.001 per share
(the "Common Stock"), of Video Jukebox Network, Inc., a Florida corporation (the
"Company") and is filed pursuant to Rule 13d-2 under the Securities Exchange Act
of 1934, as amended (the "Act").
This Amendment is filed to disclose the acquisition by StarNet/CEA II
Partners (the "Joint Venture") of 80,000 shares of Common Stock from Venture LW
Corporation on July 15, 1994, and the expiration of the waiting period without
objection by the Federal Trade Commission and the Department of Justice with
respect to the filing by ultimate parent entities of the Joint Venture of
premerger notification forms under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 as it relates to the Joint Venture's agreement to purchase shares
unpurchased in a rights offering conducted by the Company.
Except as specifically modified, amended or supplemented by this
Amendment all of the information in the Original Statement is hereby confirmed.
Item 10 of the cover pages filed herewith has been amended to reflect
numbers of shares of Common Stock as appropriate in light of the amendments
described below, except that such items do not reflect shares of Common Stock
which may be purchased by the Joint Venture in the event the Company consummates
the Rights Offering (as defined below).
6
<PAGE>
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity And Background
Each of the Reporting Persons, other than the Joint Venture, expressly
declares that the filing of this Amendment shall not be construed as an
admission that such person is, for the purposes of Section 13(d) or 13(g) of the
Act, the beneficial owner of any securities covered by this Amendment. The Joint
Venture expressly declares that the filing of this Amendment shall not be
construed as an admission that such person is, for the purposes of Section 13(d)
or 13(g) of the Act, the beneficial owner of any securities covered by this
Amendment except to the extent the Joint Venture may be deemed to be a
beneficial owner of such securities pursuant to Rule 13d-5(b)(1) under the Act.
The filing of the Original Statement and this Amendment shall not be construed
as an admission that Thomas W. Cardy or H. Gene Gawthrop are, for the purposes
of Section 13(d) or 13(g) of the Act the beneficial owners of any securities
covered by the Original Statement and this Amendment.
Item 3 of the Original Statement is hereby amended and supplemented as follows:
Item 3. Source And Amount Of Funds And Other Consideration
The source and amount of funds and other consideration for the Joint
Venture, CEA Investments Partnership II, Ltd. (the "Partnership" or "CEA II,
Ltd."), CEA Investors, Inc. ("CEA Investors"), and J. Patrick Michaels, Jr.
("Michaels") remains as disclosed in Item 3 of Amendment No. 7. On July 15,
1994, the Joint Venture purchased 80,000 shares of Common Stock from Venture LW
Corporation for an aggregate purchase price of $144 000 ($1.80 Per share). See
Item 6 below.
Item 4 of the Original Statement is hereby amended and supplemented as follows:
Item 4. Purpose Of Transaction
The principal purposes of the Joint Venture and the other Reporting
Persons remain as set forth in Item 4 of the Original Statement See Items 5 and
6 below. Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer
Under the eleven Deferred Payment Convertible Notes outstanding,
StarNet has the right to acquire 1,760,000 shares of Common Stock by conversion
of the principal amount of such notes at the rate of $1.25 per share.
As described in Item 6, the Joint Venture purchased 80,000 shares from
Venture LW Corporation on July 15, 1994. Prior to such purchase, CEA II, Ltd.
held an irrevocable proxy from Venture LW Corporation to vote such shares
pursuant to the VLW Proxy Agreement previously described in the Original
Statement.
7
<PAGE>
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of July 22, 1994 is
approximately 19,755,894.
(A) Each of the Partnership, CEA Investors, and the Joint
Venture may be deemed to beneficially own 12,198,546 shares of
Common Stock, to have shared power to vote or to direct the
vote with respect to 10,365,622 shares of Common Stock, to
have shared power to dispose or to direct the disposition with
respect to 7,136,812 shares of Common Stock and to have no
shares of Common Stock for which any such Reporting Persons
has sole voting power or sole dispositive power.
(B) Michaels may be deemed to beneficially own 12,198,546
shares of Common Stock, to have sole power to vote or to
direct the vote with respect to 65,000 shares, to have shared
power to vote or to direct the vote with respect to 10,372,546
shares, to have sole power to dispose or to direct the
disposition of 65,000 shares and to have shared power to
dispose or to direct the disposition of 7,143,736 shares of
Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person including, without
limitation, (a) any shares which may be acquired by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event StarNet elects to convert
interest which accrues and remains unpaid under the Deferred Payment Convertible
Notes, (b) any shares which may be purchasable by StarNet (and by Liberty
pursuant to related pre-emptive rights) in the event the Company elects to issue
additional Deferred Payment Convertible Notes to DSN in consideration for
deferral of any additional payments due under the Service Agreement, and (c) any
shares which may be purchased by the Joint Venture in connection with the Rights
Offering (as described in Item 6 below).
Gawthrop may be deemed to be the beneficial owner of 12,199,700 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote; 10,365,622 shares as to which there is
shared power to vote or to direct the vote; 1,154 shares as to which there is
sole power to dispose or to direct the disposition; and 7,136,812 shares as to
which there is shared power to dispose or to direct the disposition.
Cardy may be deemed to be the beneficial owner of 12,224,700 shares of
Common Stock with 26,154 shares of Common Stock as to which there is sole power
to vote or to direct the vote; 10,365,622 shares as to which there is shared
power to vote or to direct the vote; 26,154 shares as to which there is sole
power to dispose or to direct the disposition; and 7,136,812 shares as to which
there is shared power to dispose or to direct the disposition. Gawthrop and
Cardy each own interests as limited partners in the Partnership.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
8
<PAGE>
Item 6. Contracts, Arrangements, Understandings Or Relationships With Respect
To Securities Of The Issuer
The ultimate parent entities of the Joint Venture filed premerger
notification forms under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 ("HSR Filing") on or about June 14, 1994. On June 30, 1994, CEA II, Ltd.
made a contingent assignment of its rights to purchase up to 80,000 shares of
Common Stock from Louis Wolfson III ("Wolfson") to the Joint Venture, and the
Joint Venture agreed to purchase such shares from Wolfson on July 15, 1994
subject to the condition that the waiting period with respect to the HSR Filing
expired without objection by the Federal Trade Commission and Department of
Justice or early termination was granted with respect to such filing. The
waiting period expired July 14, 1994 without such objection, and on July 15,
1994 the Joint Venture purchased the 80,000 shares from Venture LW Corporation
for an aggregate purchase price of $144,000 ($1.80 per share). At the closing,
Wolfson delivered 80,000 shares held of record by Venture LW Corporation, a
corporation which was also a party to the VLW Proxy Agreement and which the
Reporting Persons believe is controlled by Wolfson.
The Company's Rights Offering and the Joint Venture's agreement to
purchase any and all of the 2,000,000 shares of Common Stock offered in the
Rights Offering but not purchased by other shareholders, as described in the
Backstop Agreement, have been described in Amendments No. 9 and No. 10.
Since the waiting period relating to the HSR Filing expired on July 14,
1994 without objection as described above, the Joint Venture is obligated and
intends to purchase any and all Unpurchased Shares within 3 business days after
August 1, 1994, the expiration of the Exercise Period, or no later than August
4, 1994, subject only to the material market conditions included in the Backstop
Agreement and disclosed in Amendments No. 9 and No. 10.
It is not known at this date what proportion of the Common Stock to be
offered in the Rights Offering will ultimately be purchased by the Joint
Venture, and, accordingly it is not known at this date the extent to which such
purchase may affect the beneficial ownership of Common Stock with respect to
each Reporting Person. If the Joint Venture purchases solely its pro rata
interest in the Offering, based on the number of shares of the Company's
outstanding Common Stock held of record by the Joint Venture as of May 5, 1994,
the Joint Venture would purchase approximately 720,000 shares of such Common
Stock at an aggregate price of $1,440,000 (or $2.00 per share). If none of the
other stockholders of the Company purchase any shares of such Common Stock In
The Rights Offering, the Joint Venture has agreed to purchase all 2,000,000
shares covered by such Rights Offering at an aggregate price of $4,000,000 (or
$2.00 per share).
Except as specifically modified, amended or supplemented by this
Amendment No. 11, all of the information in the Original Statement is hereby
confirmed.
Item 7. Material To Be Filed As Exhibits
9
<PAGE>
Exhibit 1 Joint Filing Agreement with respect to the joint filing
of Amendment No. 11 to Schedule 13D and Amendments thereto.
10
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
--------------------------------
As: Vice President
--------------------------------
By: /s/ THOMAS W. CARDY Dated: JULY 28, 1994
---------------------------- -----------------------------
As: Vice President
----------------------------
Dated: JULY 28, 1994
--------------------------
/s/ J. PATRICK MICHAELS, JR.
- --------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: JULY 28, 1994 By: CEA Investors Partnership
-------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: Vice President
------------------------------------
Dated: JULY 28, 1994
---------------------------------
11
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 12 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class Securities)
92656G 10 8
--------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
AUGUST 4, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,082,864
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,082,864
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------------------------------------------------------------------------
3
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 71,584
Beneficially 8. Shared Voting Power
Owned By 12,250,280
Each 9. Sole Dispositive Power
Reporting 71,584
Person With 10. Shared Dispositive Power
9.021,470
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,082,864
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,082,864
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.9%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 12 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 the ("August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, 1993 (the "September Amendment") and
as amended by Amendment No. 3 thereto dated September 13, 1993 ("Amendment No.
3") and as amended by Amendment No. 4 thereto dated December 20, 1993
("Amendment No. 4" ) and as amended by Amendment No. 5 thereto dated January 11,
1994 ("Amendment No. 5") and as amended by Amendment No. 6 thereto dated
February 10, 1994 ("Amendment No. 6") and as amended by Amendment No. 7 thereto
dated February 23, 1994 ("Amendment No. 7") and as amended by Amendment No. 8
thereto dated March 9, l994 ("Amendment No. 8") and as amended by Amendment No.
9 thereto dated May 10, 1994 ("Amendment No. 9") and as amended by Amendment No.
10 thereto dated July 8, l994 ("Amendment No. 10") and as amended by Amendment
No. 11 thereto dated July 28, 1994 ("Amendment No. 11") (the July Statement as
amended by the August Amendment, September Amendment, Amendment No. 3, Amendment
No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment No. 8,
Amendment No. 9, Amendment No. 10 and Amendment No. 11 is referred to as the
"Original Statement"), is jointly filed by the persons listed on the execution
pages hereof (the "Reporting Persons") pursuant to the Joint Filing Agreement
filed as Exhibit 1.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its Exhibits as as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment is filed to disclose the: (a) acquisition of shares
of Common Stock in the Rights Offering (i) by the John P. Michaels, Jr. Family
Trust (6,584 shares) and the Kimberly Lynn Michaels Trust (701 shares), which
shares may be deemed beneficially owned by Mr. Michaels and accordingly by the
other Reporting Persons; and (ii) by Thomas W. Cardy, Smith Barney, Inc.
Rollover IRA Custodian ("Cardy IRA") (116 shares) (Thomas W. Cardy is Vice
President of CEA Investors, Inc.), and (b) acquisition by StarNet/CEA II
Partners (the "Joint Venture") of 1,877,033 shares of Common Stock from the
Company on August 4, 1994 in connection with the previously disclosed agreement
by the Joint Venture to purchase shares unpurchased in the Rights Offering. Such
Trusts and the Cardy IRA are not Reporting Persons and are not part of the group
which has filed the Original Statement and this Amendment.
Except as specifically modified, amended or supplemented by this
Amendment all of the information in the Original Statement is hereby confirmed.
Items 8, 10, 11 and 13 of the cover pages filed herewith has been
amended to reflect numbers of shares of Common Stock as appropriate in light of
the amendments described below.
6
<PAGE>
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity And Background
Each of the Reporting Persons, other than the Joint Venture, express1y
declares that the filing of this Amendment shall not be construed as an
admission that such person is, for the purposes of Section 13(d) or 13(g) of the
Act, the beneficial owner of any securities covered by this Amendment. The Joint
Venture expressly declares that the filing of this Amendment shall not be
construed as an admission that such person is, for the purposes of Section 13(d)
or 13(g) of the Act, the beneficial owner of any securities covered by this
Amendment except to the extent the Joint Venture may be deemed to be a
beneficial owner of such securities pursuant to Rule 13d-5(b)(l) under the Act
and except for the 1,877,033 shares of the Company's Common Stock acquired
by the Joint Venture as described below. The filing of the Original Statement
and this Amendment shall not be construed as an admission that Thomas W. Cardy
or H. Gene Gawthrop are, for the purposes of Section 13(d) or 13(g) of the Act
the beneficial owners of any securities covered by the Original Statement and
this Amendment.
Item 3 of the Original Statement is hereby amended and supplemented as follows:
Item 3. Source And Amount Of Funds And Other Consideration
The source and amount of funds and other consideration for the Joint
Venture, CEA Investments Partnership II, Ltd. (the "Partnership" or "CEA II,
Ltd."), CEA Investors, Inc. ("CEA Investors"), and J. Patrick Michaels, Jr.,
("Michaels") remains as previously disclosed in Item 3 of Amendment No 7. The
Joint Venture purchased the 1,877,033 shares of Common Stock from the Company
for an aggregate purchase price of $3,754,066 ($2.00 per share). See Items 5 and
6 below.
Item 4 of the Original Statement is hereby amended and supplemented as follows.
Item 4. Purpose Of Transaction
The principal purposes of the Joint Venture and the other Reporting
Persons remain as set forth in Item 4 of the Original Statement. See Items 5 and
6 below.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer
AS described in Item 6, the Joint Venture purchased 1,877,033 shares of
Common Stock from the Company at a price of $2.00 per share on August 4, 1994.
Mr. Michaels may be deemed to have acquired beneficial ownership of
6,584 shares of Common Stock and 701 shares of Common Stock acquired by the
7
<PAGE>
John P. Michaels, Jr. Family Trust and the Kimberly Lynn Michaels Trust,
respectively, in the Rights Offering at a price of $2.00 per share on August 1,
1994.
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of August 9, 1994 is
approximately 19,755,894 and will be approximately 21,755,894 upon issuance of
the 2,000,000 shares purchased by shareholders in the Rights Offering.
(A) Each of the Partnership, CEA Investors, and the Joint
Venture may be deemed to beneficially own 14,082,864 shares of
Common Stock, to have shared power to write or to direct the
vote with respect to 12,242,655 shares of Common Stock. to
have shared power to dispose or to direct the disposition with
respect to 9,013,845 shares of Common Stock and to have no
shares of Common Stock for which any such Reporting Persons
has sole voting power or sole dispositive power.
(B) Michaels may be deemed to beneficially own 14,082,864
shares of Common Stock, to have sole power to vote or to
direct the vote with respect to 71,584 shares, to have shared
power to vote or to direct the vote with respect to 12,250,280
shares, to have sole power to dispose or to direct the
disposition of 71,584 shares and to have shared power to
dispose or to direct the disposition of 9,021,470 shares of
Common Stock.
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person including, without
limitation, any shares which may be acquired by StarNet in the event StarNet
elects to convert interest which accrues and remains unpaid under the Deferred
Payment Convertible Notes.
Gawthrop may be deemed to be the beneficial owner of 14,084,018 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote; 12,242,655 shares as to which there is
shared power to vote or to direct the vote; 1,154 shares as to which there is
sole power to dispose or to direct the disposition; and 9,013,845 shares as to
which there is shared power to dispose or to direct the disposition.
The Cardy IRA acquired 116 shares of Common Stock in the Rights
Offering at a price of $2.00 per share. Cardy may be deemed to be the beneficial
owner of 14,109,134 shares of Common Stock with 26,270 shares of Common Stock as
to which there is sole power to vote or to direct the vote; 12,242,655 shares as
to which there is shared power to vote or to direct the vote; 26,270 shares as
to which there is sole power to dispose or to direct the disposition; and
9,013,845 shares as to which there is shared power to dispose or to direct the
disposition. Gawthrop and Cardy each own interests as limited partners in the
Partnership.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
8
<PAGE>
Item 6. Contracts, Arrangements, Understandings Or Relationships With Respect
To Securities Of The Issuer
As previously disclosed, the Joint Venture agreed with the Company to
purchase any and all of the 2,000,000 shares of Common Stock offered by the
Company in the Rights Offering not purchased by other shareholders, as described
in the Backstop Agreement. See Exhibit 4 to Amendment No. 9.
On August 4, l994 the Joint Venture purchased 1,877,033 shares of
Common Stock of the Company, which amount constituted all the unpurchased
shares.
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Joint Filing Agreement with respect to the joint filing of
Amendment No. 12 to Schedule 13D and all amendments thereto.
9
<PAGE>
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited partnership Florida corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
--------------------------------
As: Vice President
--------------------------------
By: /s/ THOMAS W. CARDY Dated: AUGUST 10, 1994
---------------------------- -----------------------------
As: Vice President
----------------------------
Dated: AUGUST 10, 1994
--------------------------
/s/ J. PATRICK MICHAELS, JR.
- --------------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: AUGUST 10, 1994 By: CEA Investors Partnership
-------------------------- II, Ltd., a Florida Limited Partnership,
its General Partner
By: CEA Investors, Inc.,
General Partner
By: /s/ THOMAS W. CARDY
------------------------------------
As: Vice President
------------------------------------
Dated: AUGUST 10, 1994
---------------------------------
10
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 13 )*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $.001 PER SHARE
---------------------------------------
(Title of Class of Securities)
92656G 10 8
--------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
DECEMBER 16, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10 Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.0%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.0%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 71,584
Beneficially 8. Shared Voting Power
Owned By 12,255,280
Each 9. Sole Dispositive Power
Reporting 71,584
Person With 10. Shared Dispositive Power
9,026,470
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.0%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
60.0%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 13 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "August Amendment") and as amended by
Amendment No. 2 thereto dated September 10, 1993 (the "September Amendment") and
as amended by Amendment No. 3 thereto dated September 13, 1993 ("Amendment No.
3") and as amended by Amendment No. 4 thereto dated December 20, 1993
("Amendment No. 4") and as amended by Amendment No. 5 thereto dated January 11,
1994 ("Amendment No. 5") and as amended by Amendment No. 6 thereto dated
February 10, 1994 ("Amendment No. 6") and as amended by Amended by Amendment No.
7 thereto dated February 23, 1994 ("Amendment No. 7") and as amended by
Amendment No. 8 thereto dated March 9, 1994 ("Amendment No. 8") and as amended
by Amendment No. 9 thereto dated May 10, 1994 ("Amendment No. 9") and as amended
by Amendment No. 10 thereto dated July 8, 1994 ("Amendment No. 10") and as
amended by Amendment No. 11 thereto dated July 28, 1994 ("Amendment No. 11") and
as amended by Amendment No. 12 thereto dated August 10, 1994 ("Amendment No.
12") (the July Statement as amended by the August Amendment, September
Amendment, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6,
Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment
No. 11, and Amendment No. 12 is referred to as the "Original Statement"), is
jointly filed by the persons listed on the execution pages hereof (the
"Reporting Persons") pursuant to the Joint Filing Agreement filed as Exhibit 1
to Amendment No. 12.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment is filed to disclose the conversion by StarNet, Inc.
on December 16, 1994 of the Deferred Payment Convertible Notes. StarNet, Inc. is
a member of the group which includes the Reporting Persons.
Except as specifically modified, amended or supplemented by this
Amendment all of the information in the Original Statement is hereby confirmed.
Items 8, 10, 11 and 13 of the cover pages filed herewith has been
amended to reflect numbers of shares of Common Stock as appropriate in light of
the amendments described below and to reflect the withdrawal of 1,000 shares
owned by Alan McGlade from the beneficial ownership reported in this Statement
because, the Reporting Persons believe, Mr. McGlade is no longer included in the
group in which the Reporting Persons are included.
Item 2 of the Original Statement is hereby supplemented as follows:
Item 2. Identity And Background
Each of the Reporting Persons, other than the Joint Venture, expressly
declares that the filing of this Amendment shall not be construed as an
admission that such person is, for the purposes of Section 13(d) or 13(g) of the
Act, the beneficial owner of any securities covered by this Amendment. The Joint
Venture expressly declares that the filing of this Amendment shall not be
construed as an admission that such person is, for the purposes of Section 13(d)
or 13(g) of the Act, the beneficial owner of any securities covered by this
Amendment except to the extent the Joint Venture may be deemed to be a
beneficial owner of such securities pursuant to
6
<PAGE>
Rule 13d-5(b)(1) under the Act. The filing of the Original Statement and this
Amendment shall not be construed as an admission that Thomas W. Cardy or H. Gene
Gawthrop are, for the purposes of Section 13(d) or 13(g) of the Act the
beneficial owners of any securities covered by the Original Statement and this
Amendment.
Item 3 of the Original Statement is hereby amended and supplemented as follows:
Item 3. Source And Amount Of Funds And Other Consideration
1,883,555 shares of Common Stock were acquired by StarNet's conversion
of the outstanding principal and accrued interest of the Deferred Payment
Convertible Notes. See Items 5 and 6 below.
Item 4 of the Original Statement is hereby amended and supplemented as follows:
Item 4. Purpose Of Transaction
The principal purposes of the Joint Venture and the other Reporting
Persons remain as set forth in Item 4 of the Original Statement. See Items 5 and
6 below.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer
As described in Item 6, the Reporting Persons believe StarNet has
notified the Company that it will convert the outstanding principal and accrued
interest on the Deferred Payment Convertible Notes into 1,883,555 shares of
Common Stock from the Company based on a conversion price of $1.25 per share.
Mr. Michaels may be deemed to have acquired beneficial ownership of
5,000 shares of Common Stock acquired by the Kimberly Lynn Michaels Trust at a
price of $1.50 per share in the open market on December 20, 1994.
The Reporting Persons believe that the aggregate number of shares of
Common Stock of the Company issued and outstanding as of December 27, 1994 is
approximately 21,788,393 and will be approximately 23,671,948 upon issuance of
the 1,883,555 shares acquired by StarNet upon converion of the Deferred Payment
Convertible Note.
(A) Each of the Partnership, CEA Investors, and the Joint
Venture may be deemed to beneficially own 14,210,419 shares of
Common Stock, to have shared power to vote or to direct the
vote with respect to 12,242,655 shares of Common Stock, to
have shared power to dispose or to direct the disposition with
respect to 9,013,845 shares of Common Stock and to have no
shares of Common Stock for which any such Reporting Persons
has sole voting power or sole dispositive power.
(B) Michaels may be deemed to beneficially own 14,210,419
shares of Common Stock, to have sole power to vote or to
direct the vote with respect to 71,584 shares, to have shared
power to vote or to direct the vote with respect to 12,255,280
shares, to have sole power to dispose or to direct the
disposition of 71,584 shares and to have shared power to
dispose or to direct the disposition of 9,026,470 shares of
Common Stock.
7
<PAGE>
Each of the Reporting Persons may be deemed to beneficially own shares which
were excluded from their respective responses listed in Item 11 on the cover
page filed herewith relating to each Reporting Person.
Gawthrop may be deemed to be the beneficial owner of 14,211,573 shares
of Common Stock with 1,154 shares of Common Stock as to which there is sole
power to vote or to direct the vote; 12,242,655 shares as to which there is
shared power to vote or to direct the vote; 1,154 shares as to which there is
sole power to dispose or to direct the disposition; and 9,013,845 shares as to
which there is shared power to dispose or to direct the disposition.
Cardy may be deemed to be the beneficial owner of 14,236,689 shares of
Common Stock with 26,270 shares of Common Stock as to which there is sole power
to vote or to direct the vote; 12,242,655 shares as to which there is shared
power to vote or to direct the vote; 26,270 shares as to which there is sole
power to dispose or to direct the disposition; and 9,013,845 shares as to which
there is shared power to dispose or to direct the disposition. Gawthrop and
Cardy each own interests as limited partners in the Partnership.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
Item 6. Contracts, Arrangements, Understandings Or Relationships With Respect
To Securities Of The Issuer
As previously disclosed, StarNet had the right to convert the principal
and accrued interest on the Deferred Payment Convertible Notes into shares of
the Company's Common Stock at a conversion rate of $1.25 per share. At December
13, 1994, the principal and accured interest on the Deferred Payment Convertible
Notes was $2,354,443.85. On December 6, 1994, the Company notified StarNet that
unless StarNet elected to receive shares of Common Stock, the Company would
prepay the Deferred Payment Convertible Notes in cash. (See Exhibit 1 attached
hereto.) By letters dated December 8 and December 9, 1994, StarNet requested and
the Company granted an extension of the deadline for StarNet's election. In
exchange for such extension, StarNet waived interest on the Deferred Payment
Convertible Notes after December 13, 1994. (See Exhibit 2 attached hereto.) By
letter dated December 15, 1994, StarNet notified the Company of its election to
receive shares of Common Stock of the Company. (See Exhibit 3 attached hereto.)
Item 7. Material To Be Filed As Exhibits
Exhibit 1 Copy of letter dated December 6, 1994 from Luann M.
Simpson CFO of the Company addressed to Alan McGlade,
President of StarNet, Inc., with attachments.
Exhibit 2 Copy of letters dated December 8, 1994 from StarNet,
Inc. and December 9, 1994 from the Company.
Exhibit 3 Copy of letter dated December 15, 1994 from StarNet
Inc.'s counsel notifying the Company of StarNet's
conversion of the Deferred Payment Convertible Notes.
8
<PAGE>
SCHEDULE 13D
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, CEA INVESTORS, INC., a
LTD. a Florida limited Florida corporation
partnership
By: CEA Investors, Inc.,
General Partner
By: /s/ T. W. CARDY By: /s/ T. W. CARDY
-------------------------- --------------------------------------
As: Vice President As: Vice President
-------------------------- --------------------------------------
Dated: January 13, 1995 Dated: January 13, 1995
/s/ J. PATRICK MICHAELS, JR.
- -----------------------------
J. Patrick Michaels, Jr.
STARNET/CEA II PARTNERS
Dated: January 13, 1995 By: CEA Investors Partnership II, Ltd., a
Florida Limited Partnership, its General
Partner
By: CEA Investors, Inc., General Partner
By: /s/ T. W. CARDY
--------------------------------------
As: Vice President
--------------------------------------
Dated: January 13, 1995
9
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 14)*
VIDEO JUKEBOX NETWORK, INC.
---------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
---------------------------------------
(Title of Class of Securities)
92656G 10 8
--------------
(CUSIP Number)
John G. Igoe, Esq.
Edwards & Angell
250 Royal Palm Way
Palm Beach, Florida 33480
(407) 833-7700
-----------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
SEPTEMBER 14, 1995
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors Partnership II, Ltd.
Employer I.D. No.: 59-2881170
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.5%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN (Limited)
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
CEA Investors, Inc.
Employer I.D. No.: 59-2827410
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Florida
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.5%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
J. Patrick Michaels, Jr.
Social Security No.: ###-##-####
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
00
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares 71,584
Beneficially 8. Shared Voting Power
Owned By 12,255,280
Each 9. Sole Dispositive Power
Reporting 71,584
Person With 10. Shared Dispositive Power
9,026,470
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.5%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- -------------------------------------------------------------------------------
1. Name of reporting person
S.S. or I.R.S. Identification No. of above person
StarNet/CEA II Partners
Employer I.D. No.: 59-3197398
- -------------------------------------------------------------------------------
2. Check the appropriate box if a member of a group*
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------
4. Source of Funds*
WC
- -------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- -------------------------------------------------------------------------------
Number of 7. Sole Voting Power
Shares -0-
Beneficially 8. Shared Voting Power
Owned By 12,242,655
Each 9. Sole Dispositive Power
Reporting -0-
Person With 10. Shared Dispositive Power
9,013,845
- -------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
14,210,419
- -------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [X]
- -------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
59.5%
- -------------------------------------------------------------------------------
14. Type of Reporting Person*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
This Amendment No. 14 ("Amendment") to the Statement on Schedule 13D
dated July 27, 1993 (the "July 1993 Statement"), as amended by Amendment No. 1
thereto dated August 9, 1993 (the "Amendment No. 1") and as amended by Amendment
No. 2 thereto dated September 10, 1993 (the "Amendment No. 2") and as amended by
Amendment No. 3 thereto dated September 13, 1993 ("Amendment No. 3") and as
amended by Amendment No. 4 thereto dated December 20, 1993 ("Amendment No. 4")
and as amended by Amendment No. 5 thereto dated January 11, 1994 ("Amendment No.
5") and as amended by Amendment No. 6 thereto dated February 10, 1994
("Amendment No. 6") and as amended by Amendment No. 7 thereto dated February 23,
1994 ("Amendment No. 7") and as amended by Amendment No. 8 thereto dated March
9, 1994 ("Amendment No. 8") and as amended by Amendment No. 9 thereto dated May
10, 1994 ("Amendment No. 9") and as amended by Amendment No. 10 thereto dated
July 8, 1994 ("Amendment No. 10") and as amended by Amendment No. 11 thereto
dated July 28, 1994 ("Amendment No. 11") and as amended by Amendment No. 12
thereto dated August 10, 1994 ("Amendment No. 12") and as amended by Amendment
No. 13 thereto dated December 16, 1994 ("Amendment No. 13") (the July Statement
as amended by the August Amendment, September Amendment, Amendment No. 3,
Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment
No. 8, Amendment No. 9, Amendment No. 10, Amendment No. 11, Amendment No. 12,
and Amendment No. 13 is referred to as the "Original Statement"), is jointly
filed by the persons listed on the execution pages hereof (the "Reporting
Persons") pursuant to the Joint Filing Agreement filed as Exhibit 1 to Amendment
No. 12.
This Amendment is filed by the Reporting Persons subsequent to filing
by CEA Investors Partnership II, Ltd., CEA Investors, Inc., and J. Patrick
Michaels, Jr. (the "CEA Group") of Amendment No. 1 dated July 7, 1993, to the
Schedule 13D dated June 18, 1993 filed by the CEA Group. The CEA Group's
Schedule 13D dated June 18, 1993 and its exhibits, as amended by Amendment No. 1
dated July 7, 1993 and its exhibits as well as the Original Statement and its
exhibits are incorporated herein by reference. Capitalized terms not defined
herein shall have the meanings defined in the Original Statement.
This Amendment is filed to disclose the possible change in plans and
purposes of the Reporting Persons as a result of the accomplishment of the
purposes set forth in the Original Statement.
Except as specifically modified, amended or supplemented by this
Amendment all of the information in the Original Statement is hereby confirmed.
Item 2 of the Original Statement is hereby amended and supplemented as
follows:
Item 2. Identity And Background
Each of the Reporting Persons, other than the Joint Venture, expressly
declares that the filing of this Amendment shall not be construed as an
admission that such person is, for the purposes of Section 13(d) or 13(g) of the
Act, the beneficial owner of any securities covered by this Amendment. The Joint
Venture expressly declares that the filing of this Amendment shall not be
construed as an admission that such person is, for the purposes of Section 13(d)
6
<PAGE>
or 13(g) of the Act, the beneficial owner of any securities covered by this
Amendment except to the extent the Joint Venture may be deemed to be a
beneficial owner of such securities pursuant to Rule 13d-5(b)(1) under the Act.
As of the date hereof, the filing of the Original Statement and this Amendment
shall not be construed as an admission that Thomas W. Cardy is, for the purposes
of Section 13(d) or 13(g) of the Act, the beneficial owner of any securities
covered by the Original Statement and this Amendment.
Item 4 of the Original Statement is hereby amended and supplemented as follows:
Item 4. Purpose Of Transaction
The Joint Venture acquired and since August 1993 has exercised control
of a majority voting interest in the Company, through the ownership of Common
Stock directly and through proxies granted to the Joint Venture by Venture LW
Corporation ("VLW") and Louis Wolfson III ("Wolfson") and by Video Holdings
Corporation ("VHC"), Mark Blank, Andrew Blank and Tony Blank (the "Blanks") and
Robert Puck ("Puck"). In connection with the acquisition and exercise of such
control, the Joint Venture has accomplished the original purposes of its
investment in the Company, as set forth in the Original Statement, including
changing the Board of Directors and management of the Company.
In accordance with the reservation by the Joint Venture and the
Reporting Persons of the right to change their purposes and plans, the Joint
Venture has determined to review and reconsider, on an on-going basis, the Joint
Venture's investment in the Company's Common Stock. In connection with such
review and reconsideration, the Joint Venture and Reporting Persons may
determine to hold such investment indefinitely, to acquire additional shares of
Common Stock or proxies with respect thereto, or to dispose of some or all of
the Common Stock held by the Joint Venture and the Reporting Persons.
In connection with the review of its investment in the Company, the
Joint Venture has had discussions with representatives of VLW and Wolfson and
representatives of VHC, the Blanks and Puck with respect to the Common Stock of
each which is subject to (a) in the case of VLW and Wolfson, an Irrevocable
Proxy, Right of First Refusal and Tag-Along Agreement, dated as of August 27,
1993 (the "VLW Proxy Agreement"), and (b) in the case of VHC, the Blanks and
Puck, an Irrevocable Proxy, Right of First Refusal and Tag-Along Agreement,
dated as of August 27, 1993 (the "VHC Proxy Agreement").
Each of VLW and Wolfson with respect to the Common Stock subject to the
VLW Proxy Agreement, and VHC, the Blanks and Puck with respect to the Common
Stock subject to the VHC Proxy Agreement, have agreed in principle to engage
Communications Equity Associates, Inc. ("CEA"), an affiliate of the Reporting
Persons, as the exclusive agent for such persons to negotiate any arrangements
with third parties with respect to any of such Common Stock which may be
entitled to co-sale rights under such Proxy Agreements in connection with a
disposition by the Joint Venture of any shares of Common Stock. Under such
engagement, which is subject to the negotiation of a mutually satisfactory fee
arrangement, CEA would have no authority to bind such parties as to the
disposition of any shares of Common Stock, as each such party would retain full
discretion to exercise any rights of co-sale available to it under such Proxy
Agreements. The parties intend to document terms of such engagement with letter
agreements. The Reporting Persons believe that they are not, together with any
of VLW, Wolfson, VHC, the Blanks or Puck, a group within the meaning of Section
13(d)(3) of the Act.
7
<PAGE>
The Joint Venture has also agreed in principle to engage CEA as its
exclusive negotiating agent in connection with any potential transactions with
third parties, also subject to the negotiation of a mutually satisfactory fee
arrangement. The Joint Venture retains full discretion to accept or reject any
proposals or arrangements with third parties.
As of the date of this Amendment, except as described above, the
Reporting Persons have no present plans or proposals which relate to or would
result in any of the actions described in Paragraphs (a) through (j) of Item 4
of Schedule 13D.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
Item 5. Interest In Securities Of The Issuer
As of the date hereof, Cardy may be deemed to be the beneficial owner
of 14,236,689 shares of Common Stock with 26,270 shares of Common Stock as to
which there is sole power to vote or direct the vote; 12,242,655 shares as to
which there is shared power to vote or direct the vote; 26,270 shares as to
which there is sole power to dispose or to direct the disposition; and 9,013,845
shares as to which there is shared power to dispose or to direct the
disposition.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
Item 6. Contracts, Arrangements, Understandings Or Relationships With Respect
To Securities Of The Issuer
See Item 4 with respect to the agreements in principle between CEA and
each of VLW and Wolfson; VHC, the Blanks and Puck; and the Joint Venture with
respect to the engagement of CEA as exclusive negotiating agent for such parties
in connection with any disposition of Common Stock held by the Joint Venture and
any shares of Common Stock subject to the VLW or VHC Proxy Agreements which may
be transferred in connection therewith pursuant to the co-sale rights therein.
Such agreements in principle are intended to be reflected in written agreements.
Except as specifically modified, amended or supplemented by this
Amendment No. 14, all of the information in the Original Statement is hereby
confirmed.
8
<PAGE>
SCHEDULE 13D
SIGNATURES
The undersigned, after reasonable inquiry and to the best of their
knowledge and belief, certify that the information set forth in this statement
is true, complete, and correct.
CEA INVESTORS PARTNERSHIP II, LTD. CEA INVESTORS, INC., a Florida
a Florida limited partnership Corporation
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY By: /s/ THOMAS W. CARDY
--------------------------------- -------------------------------
As: Vice President As: Vice President
--------------------------------- -------------------------------
Dated: SEPTEMBER 20, 1995 Dated: SEPTEMBER 20, 1995
------------------------------ ----------------------------
/s/ J. PATRICK MICHAELS, JR.
- ------------------------------------
J. Patrick Michaels, Jr.
Dated: SEPTEMBER 20, 1995 STARNET/CEA II PARTNERS
------------------------------ By: CEA Investors Partnership II,
Ltd., a Florida Limited
Partnership, its General Partner
By: CEA Investors, Inc., General
Partner
By: /s/ THOMAS W. CARDY
-------------------------------
As: Vice President
-------------------------------
Dated: SEPTEMBER 20, 1995
----------------------------
9
