[LETTERHEAD]
XXXXX XXXXX & FIX, P.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
August 25, 1998
BY TELEFAX
Mr. Xxxxx Xxxxxx
Planet Entertainment Corporation
000 Xxxxxxx 00
Xxxxxxxxxx, Xxx Xxxxxx 00000
Re: GULF COAST MUSIC, L.L.C.
Dear Xxxxx:
This letter will confirm that the parties have agreed as follows:
1. Planet Entertainment Corporation ("Planet") shall, upon the
execution of this letter of agreement, release without condition
the sum of $150,000 presently held in escrow by Xxxxxxx, Xxxxx &
Xxxxxxxx, attorneys for Gulf Coast Music, L.L.C. ("Gulf Coast").
2. Planet shall, upon the execution of this letter of agreement,
cause to be paid without condition to the escrow account of Xxxxx,
Xxxxx & Fix, P.C., as attorneys for Gulf Coast, the sum of
$100,000 for immediate release to Gulf Coast.
3. Planet shall:
a. by September 9, 1998, enter into formal written agreements as
provided in the Reorganization Plan in the Sehorn
consolidated bankruptcy proceeding and execute any and all
documents required thereby, including a restated Promissory
Note, provided, however, that Planet's power to license
rights relating to the master recordings acquired
non-exclusively thereby shall be limited in that Planet shall
agree not to permit its licensees to sublicense rights in
such matters. The restated agreements shall further provide
that, by December 31, 1998,
/s/ Xxxxxxx X. Xxxxxxxxx
XXXXX XXXXX & FIX, P.C.
Mr. Xxxxx Xxxxxx
August 25, 1998
Page 2
Planet shall receive clear and unencumbered title to
approximately 7,500 master recordings. In the event that
Planet is unable to obtain such title to such number of
master recordings, Gulf Coast shall identify and replace any
disputed master recordings and/or supplement the master
recordings in Planet's possession with comparable master
recordings of substantially similar commercial value, within
90 days thereafter.
b. by September 15, 1998, enter into a further agreement
pursuant to which:
i. Planet agrees to pay the sum of $2,550,000 to Gulf Coast
and, in the event such sum is not paid prior to
September 17, 1998, to pay $250,000 to the escrow
account of Xxxxx, Xxxxx & Fix, P.C., as attorneys for
Gulf Coast, with the balance to be paid as soon as
practicable thereafter but, in any event, within ninety
days of the date of this letter of agreement.
ii. Planet's payment of the total sum of $2,800,000, as set
forth above, shall be for the purpose of redeeming the
694,000 shares of Planet common stock presently issued
to Upbeat Music, L.L.C. and shall constitute full and
complete satisfaction of promissory notes now
outstanding in favor of Pep Music, Inc., Upbeat Music,
L.L.C, and Hallelujah Music, Inc. or such restated
promissory note as may be made in replacement of such
notes as provided forth in the Reorganization Plan.
iii. The parties shall consult in order to establish a
mechanism for the consummation of this transaction so
that Gulf Coast shall be neither a seller nor an issuer
of Planet common stock and shall have no potential
liability to any party in connection with the
transaction(s) contemplated herein.
/s/ Xxxxxxx X. Xxxxxxxxx
XXXXX XXXXX & FIX, P.C.
Mr. Xxxxx Xxxxxx
August 25, 1998
Page 3
c. The transactions contemplated herein shall not be contingent
upon the resolution of any disputes that may exist between
Planet, on the one hand, and Xxxxxxx Xxxxxxxxxx, X. Xxxx,
Inc. and Music Marketers, Inc. on the other.
If the foregoing accurately represents the terms of the understanding
between the parties, please execute this letter and one copy where indicated
below. Upon execution, please telefax and send one copy by overnight mail to the
undersigned.
Yours very truly,
/s/ XXXXXXX X. XXXXX
-------------------------------
Xxxxxxx X. Xxxxx
BTO:mm
AGREED AND ACCEPTED:
PLANET ENTERTAINMENT CORPORATION
BY: /s/ XXXXXXX XXXXXX
---------------------------------
ITS:
---------------------------------
GULF COAST MUSIC, LLC.
BY: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------
ITS: GENERAL MANAGER
---------------------------------
XXXXXXX X. XXXXXXXXX
