The following announcement was released to the BattleBot contestants on September 12, 2002:

AN IMPORTANT MESSAGE FROM BATTLEBOTS INC.

BattleBots Inc. has been informed by Comedy Central that the current Phase
5.0 TV Series will be finishing its full run on the network into December
2002. This is very good news because it enables BattleBots to maintain a
high public visibility until the end of the year. In addition, it gives
the public a chance to see the grand spectacle of the May 2002 Tournament
to its conclusion.

As for the state of affairs at this time, please be informed as to the
distinction between "Cancellation" and "Non-Renewal." Cancellation means
that a show and all its outstanding episodes are pulled from the air and
removed from the schedule. Non-Renewal means that a show does NOT go into
future production. Our show "Comedy Central Sports Presents BattleBots"
has NOT been cancelled. All of our new episodes will be aired and possibly
old episodes re-aired as the Fall season runs its course.

On the heels of the success that we had in May, we want to go forward with
the staging of the next BattleBots Tournament as soon as possible. We are
actively pursuing various options right now in order to expedite the
staging of our next tournament. We appreciate your cooperation and
patience in this regard. Stay tuned for updates.

As for outstanding Royalties that are payable to the Builders, please be
assured that those payments will continue without interruption. The
amounts will continue to be calculated as the shows are aired. We
appreciate your patience as we process these figures in due course.
In the meantime, we will keep you informed of the latest developments.
Please do not hesitate to contact us with your feedback. Thank you very much.

Sincerely,

BattleBots Inc.

---