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To: Jim Bishop who wrote (10194)	9/23/1999 9:48:00 AM
From: SSP	Respond to of 150070

CIEI - Classics International Entertainment, Inc. Signs Letter Of Understanding to Merge with Zideo.Com CHICAGO, Sept. 23 /PRNewswire/ -- Richard S. Berger, Director, Classics International Entertainment, Inc. (Nasdaq: CIEI - news) announced today that CIE has entered into a Letter of Understanding (''LOU'') to merge with Zideo.Com, Inc., a wholly owned subsidiary of DigiByte Corporation. One of Zideo's present applications is its Zideo.Com ''Player'' which plays all forms of digital entertainment media over the Internet; i.e.: music, video, games and information. This player is also being designed to be hand held thereby expanding its use to other forms of entertainment besides on a person's PC. Zideo's.Com Player can also: -- Play all forms of digital entertainment media even when connected to the Internet. -- Will automatically find all digitized media on a local hard-drive. -- Will also automatically find all digitized media on any connected network. -- Can also play any form of music or video available for computers in either compressed or uncompressed format. Don Ashley, President of Zideo.Com, said, ''The science is driven by high levels of compression, speed and encryption which allows full motion streaming and static content in a high resolution, low bandwidth, cross platform format. It's anticipated that Zideo's web site will be expanded in November. Our unique scientific innovations, content and interactive web site will not only produce a highly trafficked web site suitable for large advertising programs, co-branding and major events, but will allow the presentation of our technologies in a real world environment.'' Zideo will have continued support from DigiByte sciences which will enhance Zideo's prominence as a global leader in Internet, intranet, and satellite transmission activities. Mr. Berger stated, ''I view this as a wonderful opportunity for the shareholders of CIE and Zideo.com. Under the LOU, it is incumbent upon CIE to bring its audits, SEC filings, and Federal and State filings current; convert all issued and outstanding Preference shares and Warrants into one class of common free trading shares; settle all liabilities using the Company's common stock as currency, and to do any and all other activities to assure Zideo.Com that CIE is in compliance with the agreement.'' Mr. Berger also stated that CIE will end up with 6 million shares (including all shares issued to bring the Company into compliance with its creditors, the conversion of its Preference shares, and outstanding Warrants issued several years ago). Should the transaction close, it is anticipated that 26.6 million shares will be issued and outstanding. 6 million shares will be on the initial ''float'' or 22.6% of the common shares issued. 4 million shares of the 20.6 million will be registered as the share price rises to certain levels; 4 million shares when the stock price reaches $8, and 4 million shares at each $4 increment thereafter: all other shares will be restricted under Rule 144. Mr. Berger also stated that, ''there are no assurances that this transaction will be completed because of CIE's liability burden.'' All of the events necessary to close are on a ''fast track'' and must take place within two periods of time: all filings, audits, conversions, and settlements must be completed by November 3, 1999, at which time a ''Definitive Agreement'' would be executed, with a close to take place on or before November 17, 1999. Closing of this transaction will require consent of both Boards, and the shareholders of CIE.