Worldspace negotiates forbearance agreement regarding bridge loan notes, convertibles

By Devika Patel

Knoxville, Tenn., July 10 - Worldspace, Inc. negotiated a forbearance agreement with each of the four holders of its amended and restated bridge loan notes and second amended and restated convertible notes, according to an 8-K filed Thursday with the Securities and Exchange Commission.

The new agreement allows the company to extend the due date for the bridge loan notes' interest and principal payments and the convertibles' interest payments, which total about $18.8 million, until July 9.

The company and investors also agreed to exchange the 5 million warrants, which were issued to the investors on June 13, for 6.5 million amended warrants, which will be exercisable into class A common shares at $1.55 per share.

The warrants were allocated among the investors on a pro rata basis in accordance with their percentage ownership interest of the bridge loans notes.

The company also said in the filing that it is in discussions with the investors in order to negotiate an additional forbearance agreement, which would defer the company's obligation to pay the $18.8 million to July 31 from July 9.

Worldspace, based in Silver Spring, Md., has established an operational satellite-based digital radio system, commonly known as Digital Audio Radio Service (DARS), and is a licensed DARS provider.

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