Debt

Our debt consists solely of a $19.3 million Promissory Note ("Note") issued to UMG as payment for Vivendi Entertainment's working capital. Under the terms of the Note and other related Vivendi Entertainment acquisition agreements, UMG will be collecting the pre-closing accounts receivable of Vivendi Entertainment for a 90 day period following the closing date of the acquisition. The terms of the Note provide that for each of the 30 day periods following the closing, UMG is entitled to retain, out of the collected funds, an amount equal to the greater of 1/3 of Vivendi Entertainment's pre-closing accounts receivable or 1/3 of the principal amount of the Note as payments on the Note, with the balance of the Note due, if any, 90 days following the acquisition date of Vivendi Entertainment. For each such 30 day period, UMG will remit to Gaiam Vivendi Entertainment any amounts collected on the pre-closing accounts receivable in excess of the amount UMG is entitled to retain, if any. The Note is non-interest bearing.