[Xxxxxxx Group Letterhead]
December 24, 1997
Xx. Xxxx XxXxxxx
President and CEO
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Re: Letter Agreement dated September 17, 1994 ("Letter Agreement")
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Dear Xxxx:
In light of the Agreement and Plan of Merger dated as of August 12, 1997
among The Box Worldwide, Inc. ("BOX"), TCI Music, Inc. ("TCIM") and TCI Music
Acquisition Sub, Inc., it is appropriate to clarify the impact of the
transactions contemplated by that Agreement on the option for BOX stock granted
under the Letter Agreement between me and StarNet (the "Option") which I have
attached.
Upon the completion of the merger contemplated by the Merger Agreement, the
200,000 shares of common stock which are the subject of the Option to you under
the Letter Agreement (the "Underlying BOX Common"), have been exchanged for
14,000 shares of TCI Music Class A Convertible Preferred Stock (the "TCIM
Preferred"), in accordance with the exchange ratio set out in the Merger
Agreement.
The Option will continue on the same terms as set forth in the Letter
Agreement, provided that (1) the shares subject to the Option shall be 14,000
shares of TCIM Preferred (the "Option Shares") issued in the Merger and (2) the
exercise price per share shall be adjusted accordingly, and shall be equal to
$250,000 divided by 14,000. If the TCIM Option Shares are subsequently converted
into TCI Music Series A Common Stock, the exercise price for the underlying
42,000 shares of TCI Music Series A Common Stock shall be equal to $250,000
divided by 42,000.
If TCIM subdivides the TCIM Preferred into a greater number of shares, or
combines them into a smaller number of shares, or engages in a business
combination or reclassification, re-capitalization or reorganization that
effects the TCIM Preferred such that an adjustment is required in order to
preserve the benefits under the Option, then such adjustments shall be made as
are equitable and appropriate, to any or all of (1) the number and kind of
shares for which the Option is exercisable, and (2) the exercise price for such
shares, as shall be appropriate, to preserve the benefits under the Letter
Agreement.
If the above correctly sets forth our agreement, kindly acknowledge your
agreement by signing and returning the enclosed copy of this letter.
Best regards,
/s/ X.X. Xxxxxxx
----------------------------
X.X. Xxxxxxx
Intending to be legally bound hereby, the undersigned accepts and agrees to the
foregoing modification of the Option.
Xxxx XxXxxxx
-----------------------------
Date:____________________
[Xxxxxxx Group Letterhead]
September 17, 1994
Xxxx XxXxxxx
000 Xxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
Dear Xxxx:
The following will reflect our understanding:
1. Your position as President of StarNet will end December 31, 1994.
2. You agree to provide whatever counsel is needed without compensation on
StarNet matters in the calendar year 1995.
3. Should you be appointed CEO of VJN, Inc. ("VJN"), you will receive an
option by StarNet to purchase 200,000 shares of VJN stock at an exercise
price of $1.25 per share and you shall have the right to exercise the
option at any time prior to January 1, 1999. The exercise of the option may
be in partial amounts. However, you will be limited to the sale of no more
than 66,666 of the shares in the first year after the grant of the option,
66,666 of the shares in the second year after the grant of the option and
66,668 of the shares in the third year after the grant of the option.
StarNet shall have the right, if it so chooses, to place the 200,000 shares
of VJN stock in escrow to assure that the above limitation on sale is
adhered to. Any shares remaining on January 1, 1999 upon which your option
has not been exercised, will be returned to StarNet or its successor or as
instructed by either.
4. In the event that StarNet decides to sell two thirds or more of its VJN
stock, you shall have the right to piggybank any or all of the option share
without any of the limitations on the sale of stock in paragraph 3.
5. Repayment of the present outstanding loan from our company in the amount of
$100,000 and interest will be waived on January 2, 1995 and such waiver
shall be deemed to be repayment in full of the outstanding loan.
Xxxx XxXxxxx
September 17, 1994
Page 2
6. Upon your appointment as CEO of VJN, and in consideration of the other
terms of this letter, you agree to relinquish all carried interest or other
interest of any kind in StarNet and to provide a general release and other
documentation as may be required by our company.
If the above correctly sets forth our understanding, kindly acknowledge your
agreement by signing and returning the enclosed copy of this letter.
Sincerely,
/s/ H.F. (Xxxxx) Xxxxxxx
-----------------------------
H.F. (Xxxxx) Xxxxxxx
Accepted this 20th day of September, 1994.
/s/ Xxxx XxXxxxx
------------------------
Xxxx XxXxxxx
AM:ar
