AMENDMENT NO. 6
TO
AMENDED AND RESTATED CREDIT AGREEMENT
AGREEMENT, made as of this 23rd day of September 2003, by and among:
MEDIABAY, INC. (formerly known as Audio Book Club, Inc.), a Florida
corporation ("MEDIABAY"), XXXXX XXXXXXX, INC., a Delaware corporation ("XXXXX
XXXXXXX") and AUDIO BOOK CLUB, INC., a Delaware corporation ("AUDIO BOOK CLUB",
collectively with MediaBay and Xxxxx Xxxxxxx, the "BORROWERS" and each
individually, a "BORROWER");
The banks, financial institutions and other institutional lenders which
have executed the signature page annexed thereto (each individually, a "LENDER
PARTY" and collectively, the "LENDER PARTIES"); and
ING CAPITAL LLC, as Issuing Bank and as administrative agent for the
Lender Parties (in such capacity, together with its successors in such capacity,
the "ADMINISTRATIVE AGENT");
WHEREAS:
(A) The Borrowers are indebted to the Lender Parties pursuant to an
Amended and Restated Credit Agreement dated April 30, 2001 (as it is hereby and
as it may hereafter from time to time be amended, modified or supplemented, the
"CREDIT AGREEMENT");
(B) The Borrowers have requested and the Lender Parties have agreed, upon
the terms and conditions set forth herein, to modify certain definitions,
covenants and other terms thereof;
(C) All capitalized terms that are used herein without definition and
which are defined n the Credit Agreement shall have the respective meanings
ascribed thereto therein; NOW, THEREFORE, the parties hereto hereby agree as
follows:
ARTICLE I
AMENDMENTS TO CREDIT AGREEMENT
This Amendment No. 6 to Amended and Restated Credit Agreement shall be
deemed to be an amendment to the Credit Agreement, and shall not be construed in
any way as a replacement therefor. All of the terms and provisions of this
Amendment No. 6 are hereby incorporated by reference into the Credit Agreement
as if such terms and provisions were set forth in full therein. The Credit
Agreement is hereby amended, effective upon the satisfaction of the conditions
precedent set forth in Article III hereof, in the following respects:
1.1 The definition of "Huntingdon October 2002 Notes" is amended to
delete the word "subordinated" (an inaccurate reference).
1.2 Section 6.2 of the Credit Agreement, "DEBT", is amended by
deleting clause (c)(xi) and replacing it with the following:
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(xi) up to $1,500,000 in additional
unsecured subordinated indebtedness (herein referred
to as Subordinated Unsecured Debt) on the same terms
and conditions as (a) set forth in the form of the
note, including the subordination provisions set
forth in Annex A thereto (the "September 2003 Notes")
certified to the Administrative Agent by Borrower,
prior to issuance thereof on or about September 23,
2003, as being the form of "September 2003 Notes" or
(b) applicable to Huntingdon Secured Subordinated
Debt (as in effect, to the extent permitted under
this Agreement, on the date of issuance of any such
Subordinated Unsecured Debt) except that the
Subordinated Unsecured Debt shall be unsecured, and
provided that the holders of such indebtedness
execute and deliver to the Lenders and Administrative
Agent such agreements and documents (if any) as may
be requested by the Lenders relating to such
subordination consistent with the requirements
relating to previously issued Huntingdon Secured
Subordinated Debt (excluding security provisions
thereunder); and shall in any event deliver to the
Lenders copies of all such Subordinated Unsecured
Debt, which shall be in form and substance,
satisfactory to the Lenders and certified as true and
complete, on or before the date of issuance thereof
(except that Subordinated Unsecured Debt which is
incurred on the terms set forth in the Subordinated
Portion (as such term is defined within the
definition of "Huntingdon October Debt 2002
Documents") of the Huntingdon October 2002 Debt
Documents or in the September 2003 Notes shall be
deemed satisfactory to the Lenders, and certified
copies shall be delivered as set forth above); and
provided, further, that principal and interest shall
be payable or paid by MediaBay only in accordance
with the terms and conditions of the applicable
Subordinated Unsecured Debt Documents but in any
event with no cash payments of principal, interest or
otherwise due or payable in connection with any
Subordinated Unsecured Debt, and any such payments
shall accrue, be paid-in-kind or be paid in shares of
common stock of MediaBay in lieu of and in full
satisfaction of paying such payments in cash until
all Obligations under the Credit Agreement have been
paid in full, and subject to the first two sentences
of Section 6.19 hereof; and
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each Borrower hereby represents and warrants to the Administrative Agent
and the Lender Parties that:
2.1 After giving effect to this Amendment No. 6, there exists no
Default or Event of Default under the Credit Agreement, as amended hereby, as of
the date hereof.
2.2
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(a) Each and every one of the representations and warranties set
forth in Article 4 of the Credit Agreement is true and correct in all respects
as if made on the date hereof, except for (i) such changes which were disclosed
in the Company's Form 10-Q for the quarter ended June 30, 2003, (ii) such
changes in the ordinary course of business not prohibited by the Credit
Agreement, or (iii) such matters as described in Schedule 1 hereto, as to which
matters, in each case with respect to the preceding clauses (i), (ii) and (iii),
each Borrower represents and warrants that such items listed in the preceding
clauses (i), (ii) and (iii) would not have a Material Adverse Effect
individually or in the aggregate, except that the item listed in the preceding
clause (iii) may have a Material Adverse Effect as to the Borrowers' results of
operations under clause (a) of the definition of Material Adverse Effect;
provided that such Material Adverse Effect does not modify the representations
and warranties made in Section 2.2(b) below.
(b) The matters set forth in Schedule 1 hereto do not and will not
(i) affect the Borrowers' compliance with, or cause a breach of, any of the
covenants set forth in Article 6, Article 7 and Article 8 of the Credit
Agreement with respect to any of the periods covered by the restatement of the
financial statements as set forth in Schedule 1 hereto, except for those which
have been waived by the Lenders and Administrative Agent in Amendment No. 3 to
the Credit Agreement, or (ii) affect the Borrowers' compliance with the
covenants set forth in Article 6, Article 7 and Article 8 of the Credit
Agreement in future periods.
2.3 Each Loan Party (a) to the extent it is a party thereto, has all
requisite corporate power and authority to execute and deliver this Amendment
No. 6, and each other agreement, instrument or document contemplated to be
executed or delivered by any Borrower, or any other Loan Party pursuant to
Amendment No. 6 (all such agreements, instruments and documents contemplated to
be executed or delivered in connection herewith by any Loan Party are sometimes
hereinafter referred to collectively, together with this Amendment No. 6, as the
"AMENDMENT NO. 6 DOCUMENTS") and to consummate the transactions contemplated
hereby and (b) has taken all action, corporate or otherwise, necessary to
authorize the execution and delivery of the Amendment No. 6 Documents and the
consummation of the transactions contemplated hereby.
2.4 The execution, delivery and performance by each Loan Party of
the Amendment No. 6 Documents to which it is a party and the consummation of the
transactions contemplated thereby, are within such Loan Party's corporate
powers, have been duly authorized by all necessary corporate action, and do not
(a) contravene such Loan Party's charter or bylaws, (b) violate any law
(including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (c) conflict with or result in the breach of, or
constitute a default under, any material contract, loan agreement, indenture,
mortgage, deed of trust, lease or other material instrument or agreement binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
respective properties where the conflict, breach or default relates to an
instrument, agreement or other document involving assets, revenues or
liabilities in excess of $250,000 individually or $500,000 in the aggregate or
otherwise could reasonably be expected to have a Material Adverse Effect, or (d)
except for the
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Liens created under the Collateral Documents, result in or require the creation
or imposition of any Lien upon or with respect to any of the properties of any
Loan Party or any of its Subsidiaries. No Loan Party or any of its Subsidiaries
is in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such contract,
loan agreement, indenture, mortgage, deed of trust, lease or other instrument or
agreement, the violation or breach of which could reasonably be expected to have
a Material Adverse Effect.
2.5 This Amendment No. 6 and the other Amendment No. 6 Documents
have each been duly executed and delivered by each Loan Party that is a party
thereto and each constitutes the valid and legally binding obligation of such
Loan Party, except (a) as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws, now or hereafter in effect, relating to or affecting the
enforcement of creditors' rights generally, and to the extent such
enforceability is subject to general principles of equity (whether such
enforcement is sought in a proceeding at law or in equity), and (b) that the
remedy of specific performance and other equitable remedies are subject to
judicial discretion.
2.6 The Liens and security interests granted pursuant to the
Collateral Documents secure, without limitation, the indebtedness, liabilities
and obligations of the Borrowers to the Administrative Agent and the Lender
Parties under the Credit Agreement, as amended hereby, or the Guaranteed
Obligations of the Guarantors signatory hereto, whether or not expressly so
stated in the Collateral Documents, and the terms "Obligations", "Debt" and
"Indebtedness" as used in such Collateral Documents (or any other term used
therein to describe or refer to the indebtedness, liabilities and obligations of
the Borrower to the Administrative Agent and the Lender Parties) includes,
without limitation, the indebtedness, liabilities and obligations of the
Borrowers under the Credit Agreement as amended hereby.
ARTICLE III
CONDITIONS
The effectiveness of this Amendment No. 6 shall be subject to the
fulfillment by the Borrowers, in a manner satisfactory to the Administrative
Agent and the Lender Parties, of all of the conditions precedent set forth in
this Article III, and the date on which all such conditions shall have been
fulfilled to the satisfaction of the Administrative Agent and the Lender
Parties, and this Amendment No. 6 shall have become effective, shall be herein
called the "Effective Date".
3.1 (a) The representations and warranties contained herein and each
other agreement, instrument, certificate or other writing delivered to the
Administrative Agent or any Lender Party pursuant hereto or to the Credit
Agreement shall be correct on and as of the date hereof after giving effect to
this Amendment No. 6 as though made on and as of such date, (b) no Default or
Event of Default shall have occurred and be continuing on the Effective Date or
would result from the taking effect of this Amendment No. 6, or the transactions
contemplated hereby, and (c) all of the conditions precedent to the
effectiveness of this Amendment No. 6 shall have been satisfied; and the
execution and delivery of this Amendment No. 6 constitutes the
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Borrowers' certification to the Lender Parties and the Administrative Agent as
to the truth, accuracy and completeness of the matters set forth in this Section
3.1.
3.2 The Administrative Agent shall have received copies of
resolutions adopted by MediaBay's board of directors, authorizing the execution,
delivery and performance of the Amendment No. 6 Documents, and all documents
incidental thereto shall be satisfactory to the Administrative Agent, the Lender
Parties and their counsel, and each such person shall have received all such
information and such counterpart originals or certified copies of documents as
may have been reasonably requested. 3.3 The Borrowers shall have:
(a) paid to Winston & Xxxxxx LLP counsel to the Administrative
Agent, and Xxxxxxxx Xxxxxx Xxxxx & Xxxx LLP, counsel to Ark CLO 2000-1, Limited,
all outstanding fees and expenses incurred in connection with this Amendment No.
6 or otherwise; and
(b) otherwise complied in all respects with the terms hereof and of
any other agreement, document, instrument or other writing to be delivered by
any Borrower in connection herewith.
3.4 Each of the parties hereto shall have executed and delivered
this Amendment No. 6 to the Administrative Agent.
3.5 All proceedings in connection with the transactions contemplated
by this Amendment No. 6 and all documents incidental thereto shall be reasonably
satisfactory to the Administrative Agent, the Lender Parties and their
respective counsel, and each such Person shall have received all such
information and such counterpart originals or certified copies of documents as
may have been reasonably requested.
ARTICLE IV
ACKNOWLEDGMENTS, CONFIRMATIONS AND GENERAL AMENDMENTS
4.1 Each Borrower and each Guarantor hereby acknowledges that (i)
the outstanding aggregate principal amount of the Advances as of the date of
this Amendment No. 6 is $3,225,000 and (ii) accrued interest on the unpaid
principal amount of the Advances has been paid through August 31, 2003.
4.2 Each of the Guarantors hereby (i) acknowledges and consents to
this Amendment No. 6 (whether or not its consent is required); (ii) confirms and
agrees that the Subsidiary Guaranty to which it is a party is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects, and all references in any such Subsidiary Guaranty to "the Credit
Agreement," "thereof," "thereunder" or words of like import referring to the
Credit Agreement shall mean the Credit Agreement as amended by this Amendment
No. 6; (iii) confirms and agrees that, the "Guaranteed Obligations" as defined
in such Subsidiary Guaranty include the Obligations of the Borrowers to the
Lender Parties under the Credit Agreement as amended by this Amendment No. 6;
and (iv) confirms and agrees that the Liens and security interests granted by
each of them pursuant to the Collateral Documents secure,
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without limitation, the indebtedness, liabilities and obligations of the
Guarantors to the Lender Parties and the Administrative Agent under the
Subsidiary Guaranty, including without limitation, the Guaranteed Obligations
which obligations include the obligations of the Borrowers under the Credit
Agreement as amended hereby.
4.3 All references in the Credit Agreement and every other
agreement, instrument and document executed and delivered by each of the Loan
Parties in connection therewith, including, without limitation, any of the
Collateral Documents, to "Credit Agreement" and "Agreement", as applicable, and
also, in the case of the Credit Agreement to "this Agreement", shall be deemed
to refer to the Credit Agreement as amended and supplemented hereby.
4.4 The Credit Agreement, the Collateral Documents and all
agreements, instruments and documents executed and delivered in connection with
any of the foregoing, shall each be deemed amended hereby to the extent
necessary, if any, to give effect to the provisions of this Amendment No. 6.
4.5 Each Borrower and each Guarantor hereby acknowledges that (i) it
has been advised by counsel in the negotiation, execution and delivery of this
Amendment No. 6; (ii) neither the Lender Parties nor any of their
representatives have any fiduciary relationship to any Borrower or any Guarantor
and the relationship between the Lender Parties, on the one hand, and the
Borrowers and each Guarantor, on the other, is solely that of creditor and
debtor; and (iii) no joint venture exists among any of the Lender Parties and
any Borrower or any Guarantor.
ARTICLE V
CONTINUED EFFECTIVENESS OF CREDIT AGREEMENT; RELEASE OF CLAIMS
The Credit Agreement and the other agreements to which any Borrower
is a party delivered in connection herewith or with the Credit Agreement are,
and shall continue to be, in full force and effect, and are hereby ratified and
confirmed in all respects except that on and after the date hereof (a) all
references in the Credit Agreement to "this Agreement", "hereto", "hereof',
"hereunder" or words of like import referring to the Credit Agreement shall mean
the Credit Agreement as amended and supplemented by this Amendment No. 6 and (b)
all references in the Credit Agreement and such other agreements to which any
Borrower is a party to the "Credit Agreement", "thereto", "thereof',
"thereunder" or words of like import referring to the Credit Agreement shall
mean the Credit Agreement as amended and supplemented by this Amendment No. 6.
FOR GOOD AND VALUABLE CONSIDERATION, INCLUDING, WITHOUT LIMITATION,
THE AGREEMENT BY THE LENDER PARTIES TO ENTER INTO THIS AMENDMENT NO. 6, EACH
BORROWER, ITS SUBSIDIARIES AND EACH GUARANTOR SHALL RELEASE EACH OF THE LENDER
PARTIES AND THEIR OFFICERS, DIRECTORS, REPRESENTATIVES, MEMBERS, AGENTS,
EMPLOYEES AND PROFESSIONAL ADVISORS FROM ANY AND ALL CLAIMS (AS DEFINED IN 11
U.S.C. ss.101(5))(EACH A "CLAIM" AND COLLECTIVELY THE "CLAIMS") AND ANY AND ALL
ACTIONS, CAUSES OF ACTION, SUITS, DEBTS, DUES, SUMS OF MONEY, ACCOUNT,
RECKONINGS, RIGHTS TO LEGAL REMEDIES, RIGHTS TO EQUITABLE
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REMEDIES, RIGHTS TO PAYMENT AND CLAIMS, BONDS, BILLS, SPECIALTIES, COVENANTS,
CONTRACTS, CONTROVERSIES, AGREEMENTS, PROMISES, VARIANCES OR TRESPASSES, WHETHER
KNOWN OR UNKNOWN, REDUCED TO JUDGMENT, NOT REDUCED TO JUDGMENT, LIQUIDATED,
UNLIQUIDATED, FIXED, CONTINGENT, MATURED, UNMATURED, DISPUTED, UNDISPUTED,
SECURED OR UNSECURED, AND WHETHER ASSERTED OR ASSERTABLE DIRECTLY OR INDIRECTLY
OR DERIVATIVELY, IN LAW, EQUITY OR OTHERWISE (EACH A "CAUSE OF ACTION", AND
COLLECTIVELY, THE "CAUSES OF ACTION"); PROVIDED, HOWEVER, THAT THE FOREGOING
SENTENCE SHALL NOT RELEASE OR AFFECT ANY OBLIGATIONS OF THE LENDER PARTIES SET
FORTH IN THIS AMENDMENT NO. 6.
THE RELEASE SET FORTH ABOVE SHALL APPLY TO EACH CLAIM AND CAUSE OF
ACTION THAT ANY BORROWER, ITS SUBSIDIARIES OR ANY GUARANTOR OR ANY OF THEIR
AFFILIATES WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT IN THEIR OWN RIGHT
(WHETHER INDIVIDUALLY OR COLLECTIVELY) OR ON BEHALF OF THE HOLDER OF ANY CLAIM
OR EQUITY INTEREST IN ANY BORROWER, ITS SUBSIDIARIES OR ANY GUARANTOR OR OTHER
PERSON OR ENTITY, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION,
TRANSACTION, AGREEMENT, EVENT OR OTHER OCCURRENCE TAKING PLACE ON OR BEFORE THE
DATE OF THIS AMENDMENT NO. 6 FOR CLAIMS OR LIABILITIES (I) IN RESPECT OF ANY
LOAN, ADVANCE OR SIMILAR PAYMENT BY ANY BORROWER, ITS SUBSIDIARIES OR ANY
GUARANTOR OR ANY OF THEIR AFFILIATES TO ANY SUCH PERSON, OR (II) IN RESPECT OF
ANY CONTRACTUAL OBLIGATION OWED BY SUCH PERSON TO ANY BORROWER, ITS SUBSIDIARIES
OR ANY GUARANTOR OR ANY OF THEIR AFFILIATES.
ARTICLE VI
MISCELLANEOUS
6.1 Except as specifically amended herein, the Credit Agreement
shall remain in full force and effect in accordance with its terms.
6.2 This Amendment No. 6 shall be governed and construed in
accordance with the laws of the State of New York.
6.3 No modification or waiver of or with respect to any provisions
of this Amendment No. 6 and all other agreements, instruments and documents
delivered pursuant hereto or thereto, nor consent to any departure by the
Administrative Agent or the Lender Parties from any of the terms or conditions
thereof, shall in any event be effective unless it shall be in writing and
executed in accordance with the provisions of the Credit Agreement, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No consent to or demand on any Borrower in any case
shall, of itself, entitle it to any other or further notice or demand in similar
or other circumstances. This Amendment No. 6, together with the Credit
Agreement, as amended, embodies the entire agreement and understanding among the
Borrowers, the Administrative Agent and the Lender Parties and supersedes all
prior agreements and understandings relating to the subject matter hereof.
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6.4 The provisions of this Amendment No. 6 are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Amendment No. 6 in any jurisdiction.
6.5 This Amendment No. 6 may be signed in any number of counterparts
with the same effect as if the signatures thereto and hereto were upon the same
instrument. Delivery of an executed counterpart to this Amendment No. 6 by
facsimile machine shall be as effective as delivery of a manually executed
counterpart of this Amendment No. 6. Notwithstanding any provision of Article
III above, the provisions of Article III and this Article VI shall become
effective immediately upon the execution hereof.
6.6 This Amendment No. 6 shall be binding upon and inure to the
benefit of each Borrower and its respective successors and to the benefit of the
Administrative Agent and the Lender Parties and their respective successors and
assigns. The rights and obligations of any Borrower under this Amendment No. 6
shall not be assigned or delegated without the prior written consent of the
Lender Parties, and any purported assignment or delegation without such consent
shall be void.
6.7 Time is expressly made of the essence of this Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 6
to be duly executed on the date first above written.
MEDIABAY, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
XXXXX XXXXXXX, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
AUDIO BOOK CLUB, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
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ING CAPITAL LLC,
as Administrative Agent and Lender
By: /s/ Xxxx Xxxxxx
------------------------------------
Title: Director
ARK CLO 2000-1, LIMITED,
as Lender
By: PATRIARCH PARTNERS, LLC,
its Collateral manager
By: Xxxx X. Xxxxxx
------------------------------------
Title: Manager
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The undersigned, whether or not consent is required in respect of any of the
foregoing, hereby confirm, agree to and accept the terms of this Amendment No. 6
and confirm the truth and accuracy of the representations and warranties
relating to any of the undersigned.
XXXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
XXXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
ABC-COA ACQUISITION CORP.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
MEDIABAY SERVICES, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
AUDIO BOOK CLUB, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
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ABC INVESTMENT CORP.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
MEDIABAY PUBLISHING, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
RADIO CLASSICS, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and
Chief Financial Officer
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SCHEDULE 1
The Borrowers have notified the Lenders and Administrative Agent that they
have restated certain of the Company's financial statements that have previously
been delivered to Lenders and Administrative Agent to reflect non-cash charges
relating to previously disclosed financing transactions which were accounted for
erroneously in MediaBay's financial statements for the years ended December 31,
1999, 2000 and 2001 and the first three fiscal quarters of 2002. As set forth in
Section 2.2(b) of this Amendment, each Borrower hereby represents and warrants
to the Lenders and Administrative Agent that the matters set forth in this
Schedule 1 do not and will not (i) affect the Borrowers' compliance with, or
cause a breach of, any of the covenants set forth in Article 6, Article 7 and
Article 8 of the Credit Agreement for any of the periods covered by the
restatement of the financial statements as described above, except for those
which have been waived by the Lenders and Administrative Agent in Amendment No.3
to the Credit Agreement or (ii) affect the Borrowers' compliance with the
covenants set forth in Article 6, Article 7 and Article 8 of the Credit
Agreement in future periods. Each Borrower further represents and warrants to
the Lenders and the Administrative Agent that the non-cash charges as set forth
in this Schedule 1 are non-cash financing and non-cash compensation charges
which relate solely to the accounting treatment of notes and warrants issued in
the previously disclosed financial transactions and do not represent additional
cash compensation paid to any officers or directors.
