PLAYBOY ENTERTAINMENT GROUP, INC.
September 19, 2001
Xx. Xxxxx Xxxxxxx
President
Directrix, Inc.
000 Xxxx 00xx Xxxxxx
Xxxx Xxxxxx 00-X
Xxx Xxxx, XX 00000
RE: Letter Agreement
Dear Xxxxx:
This letter shall serve as a binding agreement between Playboy
Entertainment Group, Inc. ("Playboy") and Directrix, Inc. ("Directrix")
regarding Directrix' obligation, on the one hand, to provide network origination
and studio facilities/tenant improvements and Playboy's obligation, on the other
hand, to pay to Directrix service fees for the provision of such services on
substantially the same terms and conditions as contained in the draft of the
Master Services Agreement dated September 14, 2001. The parties further
acknowledge and agree that (i) other than Directrix not agreeing, as part of the
base Service Fees, to provide a second Pinnacle DekoCast (it being acknowledged
that Playboy will provide equipment to enable the inclusion of digital effects
for three (3) additional television networks) and (ii) open issues relating to
the equipment lease financing provisions of Master Services Agreement Sections
25.1 and 25.3, the Master Services Agreement is in an executable form. With
regard to the equipment lease financing issue and based on the totality of any
Playboy proposed alternate equipment lease financing package, Playboy
acknowledges that Directrix shall not be obligated to agree to equipment lease
financing provided by Playboy on terms less favorable than those secured by
Directrix from CapitalSource Finance, LLC and reflected in the August 20, 2001
term sheet approved by Playboy ("Term Sheet"). If Playboy is unable to secure
alternate equipment lease financing, Playboy will use best efforts to enter into
an equipment finance lease with CapitalSource; provided that, it is able to do
so on reasonable financing terms and conditions which do not violate any of
Playboy's bank covenants.
In consideration of the foregoing, and other good and valuable
consideration, Playboy and Directrix further agree, at Playboy's option, to
enter into a customary property maintenance/management agreement, on usual terms
and conditions, whereby Directrix shall have all of the same obligations
concerning such property maintenance/management as originally provided in
version 16 of the draft Sublease Agreement between Directrix and Playboy whereby
Directrix was to sublet to Playboy a portion of the premises as described
therein and Playboy was to bear its proportionate share of such obligations,
preserving to the greatest extent possible, the economic terms, benefits and
burdens relating to property maintenance/management contained in version 16 of
the draft Sublease Agreement.
Playboy further agrees to pay Directrix' documented, reasonable
out-of-pocket legal and other fees as of September 14, 2001 directly related to
Playboy's request to restructure the Andrita Studio transaction documents.
If the foregoing accurately reflects the mutual understanding of the
parties, please sign this letter agreement as provided below and forward to me
an executed copy thereof.
Sincerely,
Xxxxx X. English
AGREED AND ACCEPTED:
Directrix, Inc.
By:______________________
Xxxxx Xxxxxxx, President
cc: X.Xxxxxxxx, X. Xxxxxx, X. Xxxxxx, X. Xxxxxxx, X. Xxxxxxx, X. Xxxxxx
