UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(RULE 13D-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 20)*
The Box Worldwide, Inc.
(f/k/a/ 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
(561) 833-7700
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 21, 1997
(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 [ ].
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.
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*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).
<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 Shares Beneficially 7. Sole Voting Power
Owned by Each Reporting Person -0-
With 8. Shared Voting Power
12,242,655
9. Sole Dispositive Power
-0-
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)
59.2%
14. Type of Reporting Person*
PN (Limited)
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<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 Shares Beneficially 7. Sole Voting Power
Owned By Each Reporting Person -0-
With 8. Shared Voting Power
12,255,280
9. Sole Dispositive Power
-0-
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)
59.2%
14. Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<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 Shares Beneficially 7. Sole Voting Power
Owned By Each Reporting Person 71,584
With 8. Shared Voting Power
12,255,280
9. Sole Dispositive Power
71,584
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)
59.2%
14. Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<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 Shares Beneficially 7. Sole Voting Power
Owned By Each Reporting Person With -0-
With 8. Shared Voting Power
12,242,655
9. Sole Dispositive Power
-0-
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)
59.2%
14. Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
This Amendment No. 20 ("Amendment") to the Statement on Schedule 13D dated
July 7, 1993 (the "July 1993 Statement"), as amended by Amendment No. 1 thereto
dated August 9, 1993 ("Amendment No. 1") and as amended by Amendment No. 2
thereto dated September 10, 1993 ("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 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") and as
amended by Amendment No 15 thereto dated January 30, 1996 ("Amendment No. 15")
and as amended by Amendment No. 16 thereto dated May 22, 1996 ("Amendment No.
16") and as amended by Amendment No. 17 thereto dated June 12, 1996 ("Amendment
No. 17") and as amended by Amendment No. 18 thereto dated June 25, 1996
("Amendment No. 18") and as amended by Amendment No. 19 thereto dated July 9,
1996 ("Amendment No. 19") (the July 1993 Statement as amended by Amendment Nos.
1 through 19 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. ("Michaels") (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 The Box Worldwide, Inc. (formerly known as 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 changed purpose of the CEA Group as
a result of the agreement between the Company and TCI Music, Inc. ("TCIM"), an
affiliate of Tele-Communications, Inc. ("TCI"), for the acquisition of the
Company through a merger (the "Merger") into a newly formed wholly owned
subsidiary of TCIM, with the Company as the surviving corporation in the Merger.
The terms of the proposed Merger are set forth in a letter agreement ("Letter
Agreement") dated July 21, 1997 between the Company and TCIM. Pursuant to the
Letter Agreement, the Company has agreed to cause the directors of the Company
to undertake to vote shares of the Company's Common Stock which they
beneficially own in favor of the proposed Merger, subject to the conditions and
terms of the Letter Agreement or, if entered into, a superseding definitive
merger agreement.
The Merger and other actions contemplated by the Letter Agreement and the
Term Sheet are collectively referred to in this Amendment No. 20 as the
"Proposed Transaction."
If the Merger is consummated, shareholders of the Company would receive
shares of preferred stock ("TCIM Preferred Stock") convertible into shares of
Series A Common Stock of TCIM in exchange for their shares of Common Stock of
the Company at an effective purchase price of $1.50 per share of Company Common
Stock.
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 amended and supplemented as follows:
ITEM 4. PURPOSE OF TRANSACTION
As previously reported, the Joint Venture has accomplished its original
objective of acquiring control of the Company and effecting changes in the Board
of Directors and management of the Company.
The Reporting Persons intend to cause the 14,210,419 shares beneficially
owned by each Reporting Person to be voted in favor of the Proposed Transaction,
subject to the terms and conditions set forth in the Letter Agreement and Term
Sheet annexed to the Letter Agreement, or any definitive merger agreement
executed pursuant thereto, and to dispose of shares of the Company's Common
Stock held by them in exchange for shares of TCIM Preferred Stock in the
Proposed Transaction.
Item 6 of the Original Statement is amended and supplemented as follows:
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
The Company and TCIM have entered into the Letter Agreement pursuant to
which TCIM has agreed to acquire all 25,668,448 of the issued and outstanding
shares of the Company's common stock (assuming conversion of outstanding
preferred stock into 1,666,667 shares of common stock) at an effective price of
$1.50 per share in exchange for shares of TCIM Preferred Stock, convertible into
shares of Series A Common Stock of TCIM, through a Merger of the Company into a
newly formed wholly owned subsidiary of TCIM, on the terms and conditions set
forth in the Letter Agreement and the Term Sheet annexed to the Letter
Agreement.
A copy of the Letter Agreement, with the Term Sheet attached, is filed with
this Amendment No. 20 as Exhibit 99.20.1.
Terms relating to existing and proposed arrangements between the Reporting
Persons and others are summarized below.
A. Closing Conditions. The Merger agreement is to be subject to a number of
closing conditions including the following provisions.
1. Approval of the shareholders of TCIM and the Company, which in
accordance with the Articles of Incorporation of the Company will require
approval of shareholders holding at least 75% of the outstanding voting capital
stock of the Company. The Reporting Persons intend to cause the 14,210,419
shares beneficially owned by each Reporting Person to be voted in favor of the
Proposed Transaction, subject to the terms and conditions set forth in the
Letter Agreement and Term Sheet annexed to the Letter Agreement, or any
definitive merger agreement executed pursuant thereto.
2. Obtaining from each director of the Company an undertaking that he will
cause the shares of the Company's Common Stock which he beneficially owns to be
voted in favor of the Proposed Transaction pursuant to the terms of the
definitive merger agreement (or the Letter Agreement and Term Sheet, if
applicable). TCIM may terminate the Letter Agreement and the Term Sheet if these
voting agreements are not obtained within 10 business days after July 21, 1997.
Item 7 of the Original Statement is amended and supplemented as follows:
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 99.20.1 Letter Agreement dated July 21, 1997 between The Box
Worldwide, Inc. and TCI Music, Inc., with attached Term Sheet.
Exhibit 99.20.2 Press Release issued by the Company, dated July 22, 1997.
Except as specifically modified, amended or supplemented by this Amendment
No. 20, all of the information in the Original Statement is hereby confirmed.
<PAGE>
SCHEDULE 13D-A
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., EA INVESTORS, INC., a Florida
a Florida limited partnership corporation
By: CEA Investors, Inc.,
General Partner By:/S/ David Burns
------------------------------
As: Vice President
By:/S/ David Burns
- --------------------------------
As: Vice President Dated: August 1, 1997
Dated: August 1, 1997
STARNET/CEA II PARTNERS
By: CEA Investors Partnership II,
Ltd., a Florida Limited
/S/ J. Patrick Michaels, Jr. Partnership, its General Partner
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J. Patrick Michaels, Jr.
By: CEA Investors, Inc., General Partner
Dated: August 1, 1997
By:/S/ David Burns
-------------------------------------
As: Vice President
Dated: August 1, 1997
See Exhibit Index (attached)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Document
Exhibit 99.20.1 Letter Agreement dated July 21, 1997 between The Box Worldwide,
Inc. and TCI Music, Inc., with attached Term Sheet.
Exhibit 99.20.2 Press Release issued by the Company, dated July 22, 1997.
EXHIBIT 99.20.1
TCI MUSIC, INC.
8101 EAST PRENTICE AVENUE, SUITE 500
ENGLEWOOD, CO 80111
July 21, 1997
Board of Directors
The Box Worldwide, Inc.
c/o Communications Equity Associates
101 East Kennedy Blvd., Suite 3300
Tampa, Florida 33602
Dear Sirs:
Reference is made to the Term Sheet attached hereto pursuant to which, subject
to the prior receipt of any required approvals of the Board of Directors of TCI
Music, Inc. ("TCIM") and The Box Worldwide, Inc. ("The Box") prior to July 22,
1997, we intend to merge The Box into a newly formed wholly owned subsidiary of
TCIM, with The Box as the surviving corporation, all as more fully described in
the Term Sheet.
The Term Sheet contemplates that the agreements contained herein will be
superseded by a definitive merger agreement and instruments which will contain
provisions incorporating and expanding upon the agreements set forth therein,
together with other provisions customary in the case of transactions of this
type, and such other provisions as are reasonable and appropriate in the context
of the transactions contemplated hereby. Notwithstanding the foregoing, the
parties expressly acknowledge that the obligations of the parties pursuant to
the Term Sheet and this agreement, subject to the prior receipt of any such
required approvals of the Board of Directors of The Box and TCIM, will
constitute a binding agreement between them, subject to the terms and
preconditions set forth herein and in the Term Sheet, until such definitive
agreements are executed and delivered. If such definitive agreements are not
executed and delivered, then, subject to the receipt of any such required
approvals of the Board of Directors of The Box and TCIM, the Term Sheet and this
agreement shall constitute such definitive agreements.
If the foregoing is acceptable to you, please execute the copy of this agreement
in the space below, at which time this instrument will constitute a binding
agreement between us.
Very truly yours,
TCI MUSIC, INC.
By:/s/ David Koff
- -----------------------------------
Name: David Koff
Title: President
ACCEPTED AND AGREED
this 21st day of July, 1997
THE BOX WORLDWIDE, INC.
By:/s/ Alan McGlade
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Name: Alan McGlade
Title: President and CEO
<PAGE>
TERM SHEET
Parties
SELLERS: The Shareholders of The Box Worldwide, Inc. (the "Company")
BUYER: TCI Music, Inc.
Transaction
The merger of the Company into a newly created, wholly owned subsidiary of the
Buyer with the Company as the surviving entity.
Securities Being Exchanged
25,668,448 shares of The Box Worldwide, Inc. Common Stock, $.001 par value per
share, such shares representing all the Company stock outstanding immediately
before the merger (after giving effect to conversion of the Company's
outstanding convertible preferred stock), less shares held by dissenting
minority shareholders ("Dissenting Shareholders") upon exercise of any appraisal
rights such shareholders may be entitled to under applicable state law.
Purchase Price
$1.50 per share ("Original Purchase Price")
Amount
$38,502,672
Instrument
A convertible preferred stock ("New Preferred Stock") of Buyer
Number of Shares
The number of shares of New Preferred Stock to be issued will be determined by
dividing $38,502,672 (less the product of $1.50 times the number of shares of
the Company's common stock held by the Dissenting Shareholders) by three times
the average closing bid/ask price of TCI Music Series A Common Stock ("Common
Stock") for a period of 20 consecutive trading days ending on the third trading
day prior to the closing of the Transaction. Cash will be paid in lieu of any
fractional shares of New Preferred Stock. Each share of New Preferred Stock will
be convertible into three shares of Common Stock, as set forth in the section
below captioned "Optional Conversion."
Dividend
The holders of the New Preferred Stock will receive no dividends other than any
dividends on Common Stock (excluding stock dividends for which an anti-dilution
adjustment is made), which shall also be payable to holders of New Preferred
Stock on a fully converted basis.
Liquidation Preference
In the event of liquidation, dissolution, or winding-up of the Buyer, the
holders of the New Preferred Stock will be entitled to receive in preference to
the holders of Common Stock an amount equal to the Original Purchase Price plus
the greater of (a) 3% or (b) CPI, with a 5% maximum in any year, compounded
annually. Holders will have the right to convert up until the date of any
liquidation, dissolution or winding up.
A sale of all or substantially all of the Buyer's assets or any consolidation,
merger or other transaction or series of related transactions in which the
stockholders of the Buyer immediately prior to such transaction or transactions
do not retain at least 50% of the voting power of the Buyer shall be deemed to
be a liquidation or winding-up for purposes of the liquidation preference.
Optional Conversion
The holders of the New Preferred Stock shall have the right, at any time from
the date of issuance at the option of such holder, to convert each share of New
Preferred Stock into three shares of Common Stock and thereafter as subject to
adjustment as provided below with respect to anti-dilution protection. The Buyer
will use its best efforts to cause the shares of Common Stock issuable upon
conversion of the new Preferred Stock to be qualified for quotation on NASDAQ,
it being acknowledged that until the rights ("Rights") issued by
TeleCommunications, Inc. ("TCI") in connection with the Buyer's acquisition of
DMX Inc. shall have expired or been fully exercised, the shares of Common Stock
issuable upon conversion of New Preferred Stock may be required, for the purpose
of such qualification, to be treated as a class of securities separate from the
shares of Common Stock issued by the Buyer in its acquisition of DMX Inc. The
shares of Common Stock issuable upon conversion of the New Preferred Stock will
not be entitled to any Rights, but otherwise will be identical to, and will be
of the same class and series as, the shares of Common Stock held by holders of
the Rights, both before and after the expiration or full exercise of the Rights.
Anti-dilution Protection
If the Buyer issues or is deemed to issue shares of Common Stock (other than
shares issued or issuable to employees, officers or directors under plans or
arrangements approved by the Board of Directors of the Buyer) at a purchase
price per share less than the current market price of shares of New Preferred
Stock, the then current conversion price of shares of New Preferred Stock shall
be adjusted based upon a weighted average anti-dilution adjustment. The
conversion price of the New Preferred Stock shall also be subject to customary
adjustments for stock splits, dividends, recapitalizations, subdivisions,
combinations, reclassifications, etc.
Redemption
The Buyer may redeem, with proper notice, the New Preferred Stock (i) at any
time after the closing sale price of the Common Stock (or, if the Common Stock
is not traded on a securities exchange or the NASDAQ NMS, the average of the
closing bid and asked prices) equals or exceeds, for a period of at least 30
consecutive trading days, 125% of the price used to establish the number of
shares of New Preferred Stock issuable to the Sellers or (ii) during the 30-day
period immediately following the fourth, sixth and eighth anniversary dates of
the issuance and shall be required to redeem the New Preferred Stock on the
tenth anniversary of the issuance, in each case at the Original Purchase Price
plus the greater of (a) 3% or (b) the CPI with a 5% maximum in any year,
compounded annually.
Voting Rights
Holders of the New Preferred Stock shall be entitled to attend all meetings of
the shareholders of the Buyer and shall be entitled to the number of votes for
each share held equal to the number of shares of Common Stock into which the
shares of New Preferred Stock are then convertible. Holders of the New Preferred
Stock shall vote together as one class with holders of the Common Stock.
Registration Rights
The New Preferred Stock and the Common Stock underlying the New Preferred Stock
shall be registered pursuant to the combined registration statement/proxy
statement required to effect the Transaction.
Registration Expenses
The Buyer shall pay all reasonable registration expenses in connection with the
above registration statement.
The Merger Agreement
The parties agree to use their best efforts to negotiate in good faith a
definitive merger agreement. If, after exhausting such efforts, the parties fail
within a reasonable period of time to execute and deliver a definitive merger
agreement, then this Term Sheet shall constitute such definitive agreement. The
merger agreement shall be prepared by counsel for the Buyer, and shall contain,
among other things, representations and warranties of the Buyer and the Company,
covenants of the Buyer and the Company and closing conditions. The merger
agreement (and this Term Sheet to the extent that it shall be deemed to be the
definitive merger agreement as provided for above) shall be subject: (i) to the
requisite approval of the shareholders of the Buyer and the Company as required
by applicable law; (ii) to a condition that the Company may terminate the
Transaction if the Company is presented with an unsolicited offer for a
transaction that is more favorable for the Company's shareholders than the
Transaction, provided that the Company gives the Buyer reasonable notice of
receipt of any unsolicited offer; (iii) to the parties' obtaining all approvals
necessary to consummate the Transaction, including expiration or termination of
any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act and any approvals or clearances required from the U.S. Department of
Justice, Federal Trade Commission, Securities and Exchange Commission and
Federal Communications Commission; (iv) to the Buyer entering into the
Contribution Agreement with TCI as will be revised on the terms recently
disclosed to the Company; and (v) the Transaction qualifying as a tax-free
reorganization under the Internal Revenue Code. In addition, the respective
obligations of the parties to consummate the Transaction shall be subject to
there being no material adverse change in the other parties' financial
condition, operations, assets, liabilities or business since the end of the
period covered by such party's most recent annual or quarterly report under
Section 13 or 15(d) of the Securities Exchange Act of 1934. Promptly after
execution of the letter agreement to which this Term Sheet is attached, the
Company shall obtain (and it will be a condition to effectiveness of the
obligations of the Buyer under the letter agreement and this Term Sheet that the
Company does obtain) an undertaking in form and substance reasonably
satisfactory to the Buyer from each director of the Company that he will cause
the shares of the Company's Common Stock that he beneficially owns to be voted
in favor of the Transaction pursuant to the terms of the definitive merger
agreement (including, if applicable, this Term Sheet) so long as such definitive
merger agreement or such undertaking remains in effect and containing such other
provisions as are customarily included in voting agreements for similar
transactions. If such undertakings are not obtained within 10 business days
after the date the letter agreement is executed by the Buyer and the Company,
the Buyer, at its election, may terminate the letter agreement and this Term
Sheet. The letter agreement and this Term Sheet also may be terminated, at the
election of either the Buyer or the Company, if (i) the Company's Board of
Directors determines that its approval of the letter agreement and this Term
Sheet should be subject to receipt of an opinion of a financial advisor retained
by the Board of Directors or a committee thereof substantially to the effect
that the Transaction is fair to the shareholders of the Company from a financial
point of view (a "Fairness Opinion") and (ii) within 10 business days after the
date the letter agreement is executed by the Buyer and the Company, the Company
has not given the Buyer notice that a Fairness Opinion has been received. If the
Company's Board of Directors elects not to make its approval of the letter
agreement and this Term Sheet subject to receipt of a Fairness Opinion, the
letter agreement and this Term Sheet will be binding on the Company immediately
upon such approval. The Company and the Buyer shall bear their own expenses
(other than the registration expenses referred to above) related to the
Transaction, including legal expenses.
TCI Loan
It will be a condition to the Company's obligations to complete the Transaction
that the Buyer shall have delivered to the Company a written commitment from TCI
to the Company that if the Buyer is not able to refinance the $40 million loan
currently owed by the Buyer to TCI before the scheduled maturity thereof, TCI
will extend the time for repayment of such loan to permit the Buyer to have a
reasonable period of time to obtain third-party financing sufficient to repay
the loan.
Digital Multiplex
Buyer shall hire the Company on a contract basis on the date of signing the
letter agreement to which this Term Sheet is attached to develop a four channel
Digital Music Video Multiplex of Buyer which shall be distributed through TCI's
Digital Tier and the Headend In The Sky (HITS). That contract may be terminated
at the Buyer's option if the Transaction is abandoned.
EXHIBIT 99.20.2
FOR IMMEDIATE RELEASE
JULY 22, 1997
THE BOX WORLDWIDE AND TCI MUSIC SET TO MERGE
COMBINED RESOURCES AND EXPERTISE WILL CREATE
DIVERSIFIED MUSIC PROGRAMMING SERVICES
BINDING LETTER OF INTENT IS SIGNED
Miami Beach, Florida, and Englewood, Colorado -- The Box Worldwide, Inc. ("The
Box Worldwide") (Nasdaq: BOXW), which programs and distributes the music video
channel THE BOX, and TCI Music, Inc. ("TCI Music") (Nasdaq: TUNE) today signed a
binding letter of intent for the merger of The Box Worldwide into TCI Music. As
a result of the merger, The Box Worldwide would become a wholly-owned subsidiary
of TCI Music, and shares of the Common Stock of The Box Worldwide would be
exchanged for shares of TCI Music's Series "A" Preferred Stock.
The letter of intent provides that each share of Common Stock of The Box
Worldwide would be valued at $1.50 and would be exchanged for shares of TCI
Music Series "A" Preferred Stock ("TCI Music Preferred"). Each share of TCI
Music Preferred would be immediately convertible into three shares of TCI Music
Series "A" Common Stock entitled to the same rights as the currently outstanding
TCI Music Series "A" Common Stock other than its put feature. The number of
shares of TCI Music Preferred which each Box Worldwide shareholder will be
entitled to receive will be determined by dividing the product of $1.50 times
the number of Box Worldwide shares held, by three times the average bid and ask
price of TCI Music Series "A" Common Stock during the 20 consecutive trading
days ending on the third trading day prior to the closing of the transaction.
The announcement was made by Alan McGlade, President and Chief Executive Officer
of The Box Worldwide, and Leo J. Hindery, Jr., Chairman of TCI Music and
President and Chief Operating Officer of its parent company, TeleCommunications,
Inc. ("TCI"), the nation's largest cable television operator. The merger would
combine the resources and expertise of THE BOX, the world's only interactive,
24-hour, all music video service, with TCI Music, formed earlier this year by
TCI, to deliver audio and video music services to residential and commercial
customers via television, the Internet and other methods.
THE BOX is a technically advanced programming service that has been transformed
over the past year to provide market-by-market customization from five basic
music video formats: Pop/Rock, Mainstream, Urban, Country and Latin. The Box
Worldwide also has recently completed an upgrade of all its domestic markets to
a fully integrated digital distribution system utilizing local file servers. THE
BOX currently reaches more than 30 million households in the U.S. and abroad.
In announcing the binding letter of intent to merge, TCI's Mr. Hindery said, "By
bringing The Box Worldwide into the TCI family, we have the strategic
opportunity to build the assets of TCI Music and embark on an exciting future
together. THE BOX's agile video platform, in particular, will be a vital
component to our plans to develop TCI Music into a major music services
company."
The Box Worldwide's Mr. McGlade commented, "We are enthusiastic about this
merger which is the next logical step in the evolution of THE BOX. It positions
The Box Worldwide for both short and long term growth as we further enhance
existing programming, launch new services and heighten our impact in the
television and music industries."
TCI Music is managed by Liberty Media Corporation, the programming unit of TCI.
Liberty Media has been an investor in The Box Worldwide for many years and also
holds numerous other investments in globally branded entertainment and
electronic retailing networks. Earlier this month, TCI Music acquired DMX Inc.,
which programs, markets and distributes its premium digital audio service,
Digital Music Express.
Robert R. Bennett, President and CEO of Liberty Media, said "Last week's
acquisition of DMX positioned TCI Music as a leading provider of digital audio
music to cable and satellite television customers. With this transaction we will
broaden our product offering to include digital video music, including THE BOX's
unique existing service as well as a music multiplex service that we expect to
create and launch in the coming months."
The merger, expected to take several months to complete, is subject to
regulatory approvals, the requisite approval of The Box Worldwide shareholders
and the fiduciary obligations of the Board of Directors. David Burns of
Communications Equity Associates is representing The Box Worldwide in the
transaction.
TCI Music, Inc. Series "A" Common Stock is traded on the Nasdaq SmallCap Market
under the symbol TUNE. It is anticipated that TCI Music Preferred will also
trade on the Nasdaq SmallCap Market. Efforts will be made to list the TCI Music
Series "A" Common Stock that The Box Worldwide shareholders may initially
receive upon conversion, so that those shares which will not have the put
feature, may trade separately from the currently outstanding TCI Music Series
"A" Common Stock. The put feature will expire no later than August 11, 1998
after which time all shares of TCI Music Series "A" Common Stock will trade as a
single class.
Devoid of veejays, long form programming and commercial clutter, THE BOX has
engendered viewer loyalty by presenting the most diverse selection of new music
on television. Viewers call in and request a video from a menu of up to 300
selections, with the cost billed directly to the consumer's telephone. THE BOX
is currently available in the United States, Europe, Latin America and New
Zealand through locally installed Boxes and on U.S. satellite via Galaxy 7,
T-13. The Box Worldwide is traded under the symbol BOXW on the Nasdaq SmallCap
Market.
# # #
Contacts:
Vivian Carr -- TCI Music
(303) 721-5406
Jeffrey Volk -- Lippert Heilshorn
(212) 838-3777
