AMENDMENT NUMBER ONE TO CONVERTIBLE SECURED
SUBORDINATED DEBENTURE
THIS AMENDMENT is made this 8th day of September, 1997 by and
between MICROLEAGUE MULTIMEDIA, INC., a Pennsylvania corporation (the "Company")
and PENN JANNEY OPPORTUNITIES FUND, L.P. ("Holder").
Holder is the holder of that certain Convertible Secured
Subordinated Debenture dated April 25, 1997 in the face amount of $1,000,000
(the "Debenture") issued by the Company. Section 7.02 of the Debenture provides
that the Company shall not, until the Debenture is paid in full, issue
additional securities other than common stock or securities convertible into
common stock at a price per share not less than 90% of the fair market value of
such stock at the time of issuance or conversion, without the express prior
written consent of the undersigned.
The Company has advised the Holder that it intends to offer
Convertible Term Notes for sale pursuant to a Convertible Term Loan Agreement
dated September 8, 1997, a copy of which is attached to this Amendment as
Exhibit 1. The Company has requested the consent of the Holder to the issuance
and sale of such Convertible Term Notes, and if and when converted, to the
conversion thereof to Conversion Shares pursuant to the terms of and as defined
in the Convertible Term Loan Agreement.
NOW, THEREFORE, for and in consideration of the mutual
covenants herein contained, and intending to be legally bound hereby, the
parties agree as follows:
1. The Holder hereby consents to the issuance and sale of up
to five million dollars ($5,000,000) of such Convertible Term Notes on the terms
set forth in the Convertible Term Loan Agreement and up to two hundred thousand
dollars ($200,000) of term notes under a Term Note Agreement.
2. The Debenture is hereby amended to provide that,
notwithstanding the Consent contained in Paragraph 1 hereof, the payment in cash
of any principal or interest due on any debt of the Company for borrowed money
(other than debt to which the Debenture has been expressly subordinated and
other than the payment of cash in lieu of fractional share conversions of the
Convertible Term Notes), prior to the time when all Obligations (as defined in
that certain Security Agreement by and among the Company, its subsidiaries, and
the Holder dated April 25, 1997 (the "Security Agreement") executed in
connection with the issuance of the Debenture) of the Company to the Holder
shall have been paid or satisfied in full, shall constitute an Event of
Default under the Debenture and under the Security Agreement.
3. The Company shall pay directly or reimburse Holder for the
fees and expenses (including reasonable attorneys' fees) of drafting and
renewing the Debenture and related documentation (including this Amendment), and
of reviewing any other documentation prepared in connection with the purchase by
Holder of debt instruments (other than the Debenture) issued by the Company.
4. Except as modified hereby, the Debenture shall remain in
full force and effect in accordance with its terms. Holder may attach this
Amendment to the Debenture, after which time this Amendment will be deemed an
Allonge thereto.
IN WITNESS WHEREOF, the parties have executed and delivered
this Amendment the day and year first above written.
PENN JANNEY OPPORTUNITIES FUND, L.P.
By: Penn Xxxxxx XX, L.L.C.,
its General Partner
By: /s/ Xxxxxxx X. Xxx
Xxxxxxx Xxx,
Managing Member
MICROLEAGUE MULTIMEDIA, INC.
By: /s/ Xxxx X. Xxxxxxxx
(2)
Exhibit 1
Convertible Term Loan Agreement
