Liberty Digital warns of DMX default

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The parent company of cable digital-music service DMX may have slipped into
technical default on its bank loans.

The company, Maxide Acquisition, was created when Liberty Digital-controlled DMX
merged with commercial "elevator-music" provider AEI Music Network Inc. last May.

Liberty Digital said in a securities filing that Maxide may have fallen out
of compliance with $120 million in bank loans made at the time of the merger.

A complete assessment will come after Maxide finishes its annual audit, but
Liberty said Maxide is negotiating with its lenders for a waiver of the
loan covenants.

Liberty Digital and Maxide executives could not be reached for comment.

DMX feeds audio-music channels to cable operators, which package them as part of
their digital-cable lineups.

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