FORM OF TRANSFER AND REDEMPTION AGREEMENT
TRANSFER AND REDEMPTION AGREEMENT, dated as of ____________
__, 1998 (this "Agreement"), between Spice Entertainment Companies, Inc., a
Delaware corporation ("Spice", and, collectively with all subsidiaries of Spice
other than Subco, "Transferor"), and Directrix, Inc., a Delaware corporation and
wholly owned subsidiary of Transferor as of the date hereof ("Subco").
WHEREAS, Playboy Enterprises, Inc., a Delaware corporation
("Playboy"), and Spice have entered into an Agreement and Plan of Merger, dated
as of May 29, 1998 (the "Merger Agreement"), wherein, among other things, they
have agreed to merge in accordance with the terms and conditions contained
therein.
WHEREAS, all capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Merger Agreement, or, if
not defined therein, in the Non-Competition Agreement.
WHEREAS, the Merger Agreement provides that at the Effective
Time of the Mergers, (i) the holders of shares of common stock, par value $.01
per share, of Spice (the "Spice Common Stock"), (ii) the holders of shares of
Convertible Preferred Stock Series 1997-A of Spice (the "Convertible
Preferred"), as if such shares of Convertible Preferred had been converted into
shares of Spice Common Stock immediately prior to the Effective Time of the
Mergers, and (iii) the holders of stock options or warrants of Spice, for each
share of Spice Common Stock for which a stock option or warrant is exercisable,
shall be entitled to receive, as part of the Merger Consideration and in partial
exchange therefor, the outstanding common stock, par value $.01 per share, of
Subco (the "Subco Common Stock") and, if any, warrants to purchase shares of
Subco Common Stock (the "Subco Warrants") as part of the consideration to be
given in connection with the Mergers (the "Redemption").
WHEREAS, for Federal income tax purposes it is intended that
the Mergers qualify as exchanges under Section 351 of the Internal Revenue Code
of 1986, as amended (the "Code"), and as a redemption under Section 302(b) of
the Code.
WHEREAS, it is further contemplated by the Merger Agreement
that, prior to the Redemption, Transferor shall transfer certain assets and
liabilities to Subco in accordance with the terms of this Agreement and the
other Related Agreements.
WHEREAS, accordingly, the Boards of Directors of Spice and
Subco have approved this Agreement.
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NOW, THEREFORE, in consideration of the premises, and of the
respective representations, warranties, covenants and agreements set forth in
this Agreement, the parties hereto hereby agree as follows:
1. Transfer and Assignment of Transferred Assets.
(a) (i) On the Closing Date immediately prior to the
Redemption, subject to the conditions of this Agreement, Transferor shall
transfer, assign, convey and deliver to, and vest in (collectively, "transfer"),
Subco, its successors and assigns, all of Transferor's right, title and interest
with respect to the items listed on Schedule 1(a)(1) hereto, all as the same
shall exist on the Closing Date, subject to the disposition of any such right,
title or interest by Transferor prior to the Closing Date in accordance with the
terms of the Merger Agreement (collectively, the "Transferred Assets"). For
purposes of this Agreement, the term "Transferred Assets" shall also include the
items listed on Schedule 1(a)(2) hereto, which items shall be transferred to
Subco separately from this Agreement in accordance with the terms of the
documents referenced in such Schedule.
(ii) Notwithstanding anything herein to the
contrary, no Transferred Asset (which is a contract or agreement or any part
thereof or any rights or interests thereunder, other than the Explicit Rights
Agreements or the License Agreements in connection therewith (as such terms are
defined in Section 6(a))) which pursuant to its terms or otherwise by law may
not be transferred without the consent of any party thereto shall be deemed
transferred pursuant to this Agreement unless and until such consent or a waiver
therefrom is given. If any such consent or waiver is not reasonably likely to be
obtained before the Closing Date, each of Transferor and Subco agrees (subject
to its continuing obligation to attempt to obtain such consents or waivers prior
to Closing in accordance with the terms of the Merger Agreement and the Related
Agreements) to use its reasonable commercial efforts to enter into any
reasonable arrangement (such as subcontracting, sublicensing or subleasing)
designed to provide for Subco as of the Closing Date, on terms at least as
favorable as those Subco would have been entitled to receive had such consents
or waivers been obtained, the benefits under the applicable Transferred Asset
(such rights, title and interests of Subco under such arrangement with respect
to such Transferred Asset, the "Replacement Asset"), including, without
limitation, enforcement, at the cost and for the benefit of Subco, of any and
all rights of Transferor against any other party thereto arising out of the
breach or cancellation thereof by such party; provided that Subco agrees to
assume all liabilities and obligations relating to, or arising out of, such
Replacement Asset ("Replacement Liabilities") (provided, however, that Subco
will not assume any liabilities or obligations in excess of the liabilities or
obligations that would have been assumed had the applicable Transferred Asset
actually been transferred) and to indemnify and hold harmless Transferor (and
any Indemnitees covered by Section 10(b)) for all Losses (as defined in Section
10(a)) arising out of such Replacement Liabilities to the same extent as if such
Replacement Liabilities were included on Schedule 2 as Assumed Liabilities and
were duly assumed by Subco in accordance with the terms hereof (other than for
the costs and expenses incurred by
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Transferor in order to obtain such consent or waiver or negotiate such
arrangements), including, without limitation, for any loss or other liability of
Transferor arising out of the direct or indirect use or other exploitation of
such Replacement Asset by Subco.
(b) Notwithstanding anything in Section 1(a) to the
contrary, there shall be excluded from the Transferred Assets all of
Transferor's right, title or interest with respect to the items listed on
Schedule 1(b) hereto and all other items not expressly set forth on Schedule
1(a)(1) or Schedule 1(a)(2), which right, title and interest shall not be
transferred to Subco hereunder.
(c) Subco acknowledges that all of the Transferred
Assets shall be transferred to and accepted by Subco in accordance with this
Agreement and the other Related Agreements on the Closing Date in an "as is"
condition, free of any and all warranties or representations by Transferor,
express or implied, and subject to any liens of the Vendor Capital Group (with
respect to the portion of Vendor Capital Lease Agreement included in the
Transferred Assets), IBM Credit Corporation (with respect to the IBM related
contracts and agreements included in the Transferred Assets), or any other
liens, encumbrances or agreements (including sublicenses) in existence on the
Closing Date, with respect thereto, other than the liens of Darla L.L.C. which
shall be released in accordance with Section 6.2 of the Merger Agreement by the
Closing Date.
(d) Each of Spice and Subco shall use its reasonable
commercial efforts to cause a Licensor Consent (as defined in the Explicit
Rights Agreement) to be duly executed, prior to Closing, in connection with the
Explicit Rights Agreements for each License Agreement.
1A. Consideration. In consideration of the transfer of the
Transferred Assets, Subco will (a) assume certain liabilities as described in
Section 2 below and (b) issue to Spice, in an amount and on such terms as shall
be determined by Spice, shares of Subco Common Stock, and, if so determined by
Spice, Subco Warrants.
2. Assumption of Liabilities. In connection with the transfer
of the Transferred Assets, on the Closing Date immediately prior to the
Redemption, Subco shall unconditionally assume and undertake to pay, perform and
satisfy, when due, all of the debts, liabilities, commitments and obligations of
Transferor, whether fixed, absolute or contingent, direct or indirect, accrued
or not accrued, monetary or non-monetary, known or unknown, matured or
unmatured, whenever or however arising and whether or not the same would be
required by generally accepted accounting principles to be reflected in
financial statements or disclosed in the notes thereto (each a "Liability" and,
collectively, "Liabilities"), set forth on Schedule 2 hereto (collectively, the
"Assumed Liabilities"). Other than the Assumed Liabilities and subject to
Section 1(c) and the indemnification provisions contained in Section 1(a)(ii)
and Section 10, Subco shall have no obligation to pay, perform or satisfy any
Liability of Transferor.
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3. Employees and Employee Benefit Plans.
(a) Employment. Subco will, as of the Closing Date,
offer employment to the employees of Transferor set forth on Schedule 3(a)
hereto (the "Subco Employees"). Subco shall be entitled to offer employment to
any other Person at any time, subject to certain restrictions set forth in
Section 1(d) of the Non-Competition Agreement.
(b) 401(k) Plans. Effective as of the Closing Date,
Transferor will take steps necessary to initiate termination of Transferor's
401(k) Plan.
(c) Bonuses. Effective as of the Closing Date, Subco
shall assume all liability for the pro rata portion of the 1998 bonuses payable
to Subco Employees attributable to the period commencing immediately after the
Closing Date and continuing through the end of such year pursuant to the
Transferor's bonus plan.
(d) Worker's Compensation. Effective as of the
Closing Date, Subco shall assume all liability for workers' compensation claims
by Subco Employees arising out of events occurring after the Closing Date.
Transferor shall continue to be responsible for all liability for (i) workers'
compensation claims by Subco employees arising out of events occurring on or
prior to the Closing Date and (ii) all workers' compensation claims by all
Non-Subco Employees without regard to the date on which such claims arise.
(e) Preservation of Employee Plans. No provision of
this Agreement shall be construed as a limitation on the right of Transferor or
Subco to amend or terminate any employee plan which Transferor or Subco would
otherwise have under the terms of such employee plan or otherwise.
(f) Severance Payments. Transferor shall retain
liability for all (i) non-contractual severance obligations (other than with
respect to former Transferor employees who are employed by Subco (or EM) at any
time within six months following the Closing) arising in connection with or as a
result of the Mergers and (ii) the other severance obligations set forth on
Schedule 3(g) hereto.
3A. Special Provisions Regarding BET and Vendor
Capital Group.
(a) BET. On the Closing Date and as part of the
Transferred Assets, Transferor shall assign to Subco the Agreement for
Compressed Transponder Services effective as of January 1, 1998 between Black
Entertainment Television, Inc. ("BET") and Transferor, as renewed pursuant to a
letter dated May 26, 1998 (as extended, the "BET Agreement"), subject to BET's
consent to such assignment. Transferor shall provide one compressed digital
stream for the BET service in accordance with the BET Agreement for the balance
of the term of the BET Agreement at no charge to Subco, provided, Subco shall be
responsible for any out-of-pocket costs
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incurred by Transferor in connection with such assignment, including any costs
Transferor may incur for compression of an additional channel, if any. The BET
Agreement expires on November 30, 1998, subject to BET's rights to extend the
term for an additional six months. Notwithstanding the foregoing, should
Transferor wish to use the compressed transponder stream used by BET for any
other purpose, Transferor shall send Subco no less than 60 days prior written
notice of its desired use of the compressed transponder stream. Subco shall
cause BET to terminate its use of Transferor's compressed transponder services
on the termination date in accordance with the prior written notice and Subco
shall provide BET with a compressed transponder stream for BET's use. Subco
shall indemnify Transferor for any Losses (as defined in Section 10(a)) incurred
in connection with the BET Agreement in accordance with the indemnification
provision of this Agreement.
(b) Vendor Capital Lease Group Equipment Lease. On
the Closing Date and as part of the Transferred Assets, Transferor shall
transfer to Subco the General Instruments Digicipher II Integrated Encoder
System ("Encoder System") leased from Vendor Capital Group ("VCG") under an
equipment lease dated June 24, 1996 ("Vendor Capital Lease Agreement"). The
Vendor Capital Lease Agreement shall be replaced with two lease agreements, one
for the Encoder System and one for the decoders, with the lease payments
prorated based on the relative original costs of the Encoder System and the
decoders. Transferor shall retain the entire benefit of the advance lease
payments under the Vendor Capital Lease Agreement and the C/D assigned to VCG as
additional security thereunder. As provided for in the Mandatory Services
Agreement, Transferor shall make service payments for Compression and Encryption
Services (as those terms are defined in the Mandatory Services Agreement) in an
amount equal to the lease payments otherwise payable by Subco for the Encoder
System in accordance with the Vendor Capital Lease Agreement, as modified as
provided for herein. At Subco's election, Subco may exercise the purchase option
for the Encoder System as provided for in the Vendor Capital Lease Agreement in
which event Transferor shall pay Subco an amount equal to the amount which Subco
shall pay to VCG pursuant to the purchase option, and upon exercise of such
purchase option and payment thereunder Subco shall own all right, title and
interest in and to the Encoder System. From the date of Subco's purchase of such
Encoder System until the expiration of the initial term under the Mandatory
Services Agreement, Subco shall continue to provide Compression and Encryption
Services to Transferor, and Transferor shall not be obligated to make any
payments for such Compression and Encryption Services. If Transferor desires to
have Subco provide Compression and Encryption Services after the initial term of
the Mandatory Services Agreement, Subco shall provide such services for a fair
market value service fee to be mutually agreed to by the parties.
4. Closing.
(a) Closing and Closing Date. Subject to Section 6,
the closing of the transactions contemplated in this Agreement (the "Closing")
shall take
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place in New York City at the offices of Paul, Weiss, Rifkind, Wharton &
Garrison on the Closing Date, on or prior to the Effective Time of the Mergers.
(b) Spice Deliveries. At the Closing, Spice shall
execute and deliver to Subco the following:
(i) one or more bills of sale and instruments of
assignment with respect to the Transferred Assets in form and substance
reasonably satisfactory to the parties hereto, duly executed by Transferor;
(ii) an assignment and assumption of the Tenth
Floor Lease (as defined below) in form and substance reasonably satisfactory to
the parties hereto, duly executed by Transferor; and
(iii) all such other conveyances, assignments,
confirmations, powers of attorney, and other instruments, duly executed by
Transferor, as the parties hereto shall reasonably determine are necessary,
expedient or proper in order to effectuate the transfer and assignment of the
Transferred Assets as contemplated hereby.
(c) Subco Deliveries. At the Closing, Subco shall
execute and deliver to Spice the following:
(i) an instrument of assumption with respect to
the Assumed Liabilities in form and substance reasonably satisfactory to the
parties hereto, duly executed by Subco;
(ii) an assignment and assumption of the Tenth
Floor Lease (as defined below) in form and substance reasonably satisfactory to
the parties hereto, duly executed by Subco;
(iii) a certificate or certificates representing
shares of common stock of Subco and warrants, if any, to purchase shares of
common stock of Subco, in the number determined in accordance with Section
5(b)(v), for delivery to the Exchange Agent; and
(iv) all such other instruments of assumptions,
duly executed by Subco, as the parties hereto shall reasonably determine are
necessary, expedient or proper in order to effectuate the assumption of the
Assumed Liabilities as contemplated hereby.
5. The Redemption.
(a) Cooperation Prior to the Redemption. As promptly
as practicable after the date hereof, Spice and Subco shall take all such action
as may be necessary or appropriate to fulfill all of the conditions set forth in
Section 6 and to
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effect the Redemption, including without limitation the specific actions set
forth in clauses (b) and (c) of this Section 5, as applicable.
(b) The Redemption
(i) Spice and Subco shall prepare and Subco shall
file with the SEC a registration statement on Form S-1 or any other appropriate
form (the "S-1") to effect the registration of the Subco Common Stock and Subco
Warrants, if any, pursuant to the Securities Act and they shall use their best
efforts to cause such registration statement to be declared effective under the
Securities Act.
(ii) Spice and Subco shall cooperate in
preparing, filing with the SEC and causing to become effective any registration
statements or amendments thereto which are appropriate to reflect the
establishment of, or amendments to, any employee benefit and other plans
contemplated in this Agreement to be in effect for Subco.
(iii) Spice and Subco shall take all such action
as may be necessary or appropriate under any applicable state securities or blue
sky laws or other applicable laws in connection with the transactions
contemplated in this sub section (b).
(iv) Spice and Subco shall prepare, and Subco
shall file and seek to make effective, an application to permit listing or
quotation of the Subco Common Stock and Subco Warrants, if any, on the Nasdaq
Small Cap Market.
(v) Subject to Section 6, on the Closing Date,
Spice shall deliver to the Exchange Agent one or more share certificates
representing the shares of Subco Common Stock (and Subco Warrants, if any) to be
distributed as part of the Merger Consideration in the Mergers and shall
instruct the Exchange Agent, in accordance with the terms of the Merger
Agreement, to distribute to each holder of Spice Common Stock (other than those
whose shares shall be canceled pursuant to Section 2.2(g) of the Merger
Agreement or those who have exercised and perfected dissenters' rights under
Section 262 of the DGCL and Section 2.3(j) of the Merger Agreement), as of the
Effective Time of the Mergers, and for each share of Spice Common Stock held,
the number of shares of Subco Common Stock equal to the Redemption Ratio and the
number of Subco Warrants, if any, to be delivered pursuant to Section 2.2 of the
Merger Agreement with respect to each such share of Spice Common Stock. Spice
shall also deliver to the Exchange Agent the number of shares of Subco Common
Stock (and Subco Warrants, if any) that each holder of Convertible Preferred
would be entitled to receive if the shares of Convertible Preferred were
converted into Spice Common Stock immediately prior to the Effective Time of the
Mergers. Spice shall also deliver to the Exchange Agent the number of shares of
Subco Common Stock and Subco Warrants, if any, that each holder of stock options
or warrants of Spice would be entitled to receive if the stock options or
warrants were exercised for Spice Common Stock, and the exercise price for such
stock options or
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warrants were paid, immediately prior to the Effective Time of the Mergers.
Subco agrees to provide all share certificates that the Exchange Agent shall
require in order to effect such Redemption. All shares of Subco Common Stock
issued in the Mergers shall be duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Such distribution of Subco Common
Stock (and Subco Warrants, if any) in the Mergers shall be in partial exchange
for such shares of Spice Common Stock and Convertible Preferred, shall
constitute part of the Merger Consideration under the Merger Agreement, and
shall be considered a redemption of such Spice Common Stock and Convertible
Preferred for tax purposes.
(vi) Immediately upon consummation of the
Redemption, each share of Subco Common Stock owned by Spice shall automatically
and without any action on the part of Spice, be canceled and retired and cease
to exist, so that Spice shall not hold or beneficially own directly or
indirectly any shares of Subco Common Stock or any other capital stock or
securities of Subco.
(c) Spice Approval of Certain Subco Actions. Unless
otherwise provided in this Agreement, Spice shall cooperate with Subco in
effecting, and, if so requested by Subco, Spice shall, as the sole stockholder
of Subco, ratify any actions that are reasonably necessary or desirable to be
taken by Subco to effectuate, prior to the Closing Date, the transactions
contemplated in this Agreement in a manner consistent with the terms of this
Agreement, including, without limitation, the following: (i) the preparation and
approval of the Certificate of Incorporation and By-laws of Subco to be in
effect at the Closing Date; (ii) the election or appointment of directors and
officers of Subco to serve in such capacities commencing on the Closing Date;
and (iii) the registration under applicable securities laws of any securities of
Subco issued or distributed pursuant to subsection (b) above.
6. Conditions.
(a) General Conditions. The respective obligations of
the parties hereto to consummate the Redemption and to perform all other
obligations set forth herein are subject to the satisfaction or waiver of the
following conditions:
(i) an Explicit Rights Agreement, substantially
in the form of Exhibit 6(a)(i) hereto (an "Explicit Rights Agreement"), with
respect to the license agreements listed on Schedule 6(a)(i) hereto (the
"License Agreements"), other than such License Agreements for which a Licensor
Consent has not been duly executed, shall have been duly executed by all of the
parties thereto;
(ii) the Owned Rights Agreement, substantially in
the form of Exhibit 6(a)(ii) hereto (the "Owned Rights Agreement") shall have
been duly executed by all of the parties thereto; and
(iii) if the Newco Transactions shall have been
consummated, the Mandatory Services Agreement shall have been duly executed by
the
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parties thereto, and if the Newco Transactions shall not have been consummated,
the Mandatory Services Agreement, as modified to provide that Subco shall
provide the Satellite Services (as defined in the Mandatory Services Agreement)
for a minimum of three (3), rather than two (2), networks, shall have been duly
executed by the parties thereto.
(b) Conditions to the Obligations of Spice. The
obligations of Spice to consummate the Redemption and to perform all other
obligations set forth herein are subject to the satisfaction or waiver of the
following conditions:
(i) Subco shall have effected its assumption of
the Assumed Liabilities, as contemplated in Section 2;
(ii) Playboy shall have received a certificate in
form and substance reasonably satisfactory to Playboy, executed as of the
Effective Time of the Mergers by the President of Subco on behalf of Subco,
certifying that all of the conditions to be performed by Subco or Transferor
contained in this Section 6 and all of the covenants and agreements to be
performed prior to or at Closing by Subco or Transferor, shall have been duly
satisfied, performed or waived in accordance with the terms of this Agreement,
and that the covenants and agreements contained in Section 5.15(b) of the Merger
Agreement shall have been duly performed in accordance with the terms of such
Section;
(iii) effective as of the Closing Date,
Transferor shall have received all reasonably necessary or desirable releases
(including, without limitation, releases of any liens or other encumbrances on
the assets to be retained by Transferor under the Related Agreements) in
connection with any debt, financing or other similar obligations to be
transferred to Subco pursuant to the Related Agreements, a complete and accurate
list of which is set forth by Subco on Schedule 6(b)(iii) hereto, including,
without limitation, such releases duly executed and delivered by IBM Credit
Corporation and the Vendor Capital Group;
(iv) [intentionally omitted];
(v) effective as of the Closing Date, Transferor
shall have been removed as guarantor of or obligor for any indebtedness or other
obligations for which Subco would be primarily liable after giving effect to the
transactions contemplated hereby, a complete and accurate list of all such
guaranties or other obligations being set forth by Subco on Schedule 6(b)(v)
hereto;
(vi) (A) effective as of the Closing Date, all of
the contracts and agreements made solely between Transferor and EM (or any of
its subsidiaries or affiliates), a complete and accurate list of which is set
forth by Subco on Schedule 6(b)(vi)(A) hereto, shall have been terminated or
assigned in their entirety (including all rights, interests and obligations
thereunder) from Transferor to Subco;
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(B) effective as of the Closing Date, all of the
contracts and agreements among EM (or any of its subsidiaries or affiliates),
Transferor and any third party, a complete and accurate list of which is set
forth by Subco on Schedule 6(b)(vi)(B) hereto, shall have been terminated or
assigned in their entirety (including all rights, interests and obligations
thereunder) from Transferor to Subco; and
(C) effective as of the Closing Date, all of the
contracts and agreements solely among EM and third parties and all other
contracts and agreements of EM referred to in clauses (A) and (B) of this
Section 6(b)(vi) which would violate the Non-Competition Agreement (including
through the performance of any obligation thereunder), a complete and accurate
list of which is set forth by Subco on Schedule 6(b)(vi)(C) hereto, shall have
been terminated (including all rights, interests and obligations thereunder) or
amended to the extent necessary so that such contracts or agreements would no
longer be in violation of the Non-Competition Agreement;
(vii) effective as of the Closing Date, all
contracts and agreements which obligate Transferor to provide any programming,
services or other obligations, the content of which would generally be
considered "explicit" in the adult industry (including, without limitation, any
obligations to provide any programming which is similar in content and degree of
explicitness to the movies and related programming currently featured on the
C-Band channels maintained by EM) (collectively, "Explicit Obligations"), a
complete and accurate list of which is set forth by Subco on Schedule 6(b)(vii)
hereto, shall have been (x) terminated or assigned in their entirety (including
all rights, interests and obligations thereunder) to Subco pursuant to the
Related Agreements, or (y) terminated or assigned (including all rights,
interests and obligations thereunder) insofar as they relate to the provision of
such Explicit Obligations to Subco pursuant to the Related Agreements;
(viii) effective as of the Closing Date, the
Transponder Services Agreement, dated as of February 7, 1995 (including any
amendments thereto), between Loral Skynet (as successor in interest to AT&T) and
Transferor (the "Transponder Services Agreement") shall have been terminated and
replaced by two new similar and separate agreements between Loral Skynet and
Spice (or, if the Newco Transactions shall have been consummated, Newco), on the
one hand, with respect to the "platinum" transponder 7 which had been covered by
the Transponder Services Agreement (the "Newco Transponder"), and Loral Skynet
and Subco, on the other hand, with respect to the remaining transponders which
had been covered by the Transponder Services Agreement, in each case in a manner
satisfactory to Spice, so that, among other things, following the Closing Date
Transferor (or if the Newco Transactions shall have been consummated, Transferor
and Newco) shall have no liabilities or other obligations with respect to such
remaining transponders and Subco shall have no liabilities or other obligations
with respect to the Newco Transponder;
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(ix) effective as of the Closing Date, the Vendor
Capital Lease, shall have been terminated and replaced by two new similar and
separate agreements between Vendor Capital Group and Transferor, on the one
hand, with respect to the "decoders" which had been covered by the Vendor
Capital Lease Agreement, and Vendor Capital Group and Subco, on the other hand,
with respect to the Encoder System in accordance with Section 3A(b) hereof;
(x) effective as of the Closing Date, (a) the
Lease, dated February 13, 1995 (including any amendments thereto), between
Transferor, as tenant, and Schack & Schack Real Estate Co., as landlord,
covering the Tenth (10th) Floor of the building known as 536 Broadway, New York,
New York (the "Tenth Floor Lease") shall have been amended, so that Paragraph 75
of the Tenth Floor Lease (which provides for a cross-default between the Tenth
Floor Lease and any other lease between Transferor and the landlord under the
Tenth Floor Lease) shall be deleted in its entirety, and (b) all other leases of
space by Transferor, as tenant, in the buildings known as 532 Broadway and 536
Broadway, shall have been amended so that the cross default provision which is
set forth in Paragraph 75 of the Tenth Floor Lease and which is deemed included
in any other lease previously signed by Transferor and the landlord under the
Tenth Floor Lease, shall be deleted from such other leases, in each case, in a
manner satisfactory to Spice;
(xi) all other consents, approvals and other
items referenced in Section 7(c) shall have been duly obtained, including those
listed on Schedule 7(c) hereto, and all waiting periods shall have expired or
otherwise terminated without any adverse effect upon any of the parties hereto;
(xii) the representations and warranties of Subco
set forth in this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date, as though made on and as of the Closing
Date; and
(xiii) Subco shall have delivered to Transferor a
certificate (in form and substance reasonably satisfactory to Transferor), dated
the Closing Date and signed by the Secretary of Subco, certifying (A) that full
and complete copies of the following documents are attached thereto: (x) the
Certificate of Incorporation and By-laws of Subco as in effect on the Closing
Date and (y) resolutions of the Board of Directors of Subco authorizing and
approving this Agreement, the Related Agreements and the transaction
contemplated thereby; and (B) as to the incumbency and specimen signature of
each officer of Subco signing this Agreement and the Related Agreements.
(c) Conditions to the Obligations of Subco. The
obligations of Subco to consummate the transactions contemplated herein and to
perform all other obligations set forth herein are subject to the satisfaction
or waiver of the following conditions:
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(i) that Transferor shall have transferred to
Subco the Transferred Assets, as contemplated in Sections 1(a)(i), (b) and (c);
(ii) that any failures to obtain any consents or
waivers, or to make any arrangements, in each case, which were contemplated in
Section 1(a)(ii), by the Closing Date is not reasonably likely to have,
individually or in the aggregate, an effect in, on or relating to the business
of Subco that is, or is reasonably likely to be, materially adverse to the
business, assets (including intangible assets), liabilities (contingent or
otherwise), condition (financial or otherwise), prospects or results of
operations of Subco, other than (A) any effect arising out of general economic
conditions in the United States or (B) a change in the market price of Subco
Common Stock not accompanied by one or more other effects of the type described
above in this clause (ii) (a "Subco Material Adverse Effect");
(iii) that any failure to obtain any Licensor
Consents is not reasonably likely to have, individually or in the aggregate, a
Subco Material Adverse Effect;
(iv) that all liens imposed in connection with
the Darla L.L.C. credit facility of Transferor shall have been released in
connection with the satisfaction of such facility contemplated by Section 6.2 of
the Merger Agreement; and
(v) if the Newco Transactions shall have been
consummated, the Non-Competition Agreement (as defined in the Asset Purchase
Agreement included in the Newco Agreements) shall have been duly executed and
delivered by the parties thereto.
7. Representations and Warranties of Subco. Subco represents
and warrants as follows:
(a) Corporate Existence and Power. Subco is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and it has the requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement and each
Related Agreement to which it is or will be a party. Subco was organized on July
20, 1998, and since such date has engaged in no business other than activities
relating to its organization and the transactions contemplated by this Agreement
and the other Related Agreements.
(b) Authorization; No Contravention. The execution,
delivery and performance by Subco of this Agreement, the other Related
Agreements to which it is or will be a party and the transactions contemplated
hereby and thereby (x) have been duly authorized by all necessary corporate
action of Subco, (y) do not contravene the terms of the certificate of
incorporation or by-laws of Subco or any note, bond, lease, license, contract,
agreement or other instrument or obligation to which Subco is a party or by
which it or any of its respective properties or assets may be bound, and (z) do
not violate any judgment, injunction, writ, award, decree or order
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of any nature of any Governmental Entity against, or binding upon, Subco or any
law or regulation applicable to Subco.
(c) Governmental Authorization; Third Party Consents.
Schedule 7(c) sets forth each approval, consent, compliance, exemption, permit,
license, authorization or other action by, or notice to, or filing with, any
Governmental Entity or any other Person, and each waiting period under any
applicable law or otherwise, which is necessary or required in connection with
the execution, delivery and performance by Transferor or Subco of this
Agreement, the other Related Agreements and the transactions contemplated hereby
and thereby.
(d) Binding Effect. This Agreement has been, and each
other Related Agreement to which Subco is or will be a party will be, duly
executed and delivered by Subco; and this Agreement constitutes, and each other
Related Agreement to which Subco is or will be a party will constitute, the
legal, valid and binding obliga tion of Subco enforceable against Subco in
accordance with its terms.
8. Litigation.
(a) With respect to any action, suit, arbitration,
inquiry, proceeding or investigation by or before any court, any governmental or
other regulatory or administrative agency or commission or any arbitration
tribunal (collectively, any "Action") now pending or which may hereafter be
commenced or threatened relating to or arising from the Assumed Liabilities
which may result in liability for Transferor (and/or its successors in interest,
affiliates and employees, as the case may be), Transferor and Subco shall each
use its best efforts to have Subco or a Subco subsidiary substituted as parties
to such Action in the place of and for Transferor (and/or such other parties, as
the case may be) and to have Transferor (and/or such other parties, as the case
may be) removed as parties to such Action following the Closing Date.
(b) With respect to all Actions now pending or which
may hereafter be commenced or threatened relating to or arising from any
liabilities or obligations of Transferor not assumed by Subco pursuant to
Section 2 hereof which may result in liability for Subco (and/or its successors
in interest, affiliates and employees, as the case may be), Transferor and Subco
shall each use its best efforts to have Transferor substituted as a party to
such Action in the place of and for Subco (and/or such other parties, as the
case may be) and to have Subco (and/or such other parties, as the case may be)
removed as parties to such Action following the Closing Date.
(c) At all times from and after the Closing Date,
each of the parties hereto shall use reasonable efforts to make available to the
other upon written request its and its subsidiaries' officers, directors,
employees and agents as witnesses to the extent that such persons may reasonably
be required in connection with any Actions in which the requesting party may
from time to time be involved without
14
reimbursement for such persons' salaries (but with reimbursement for such
persons' reasonable travel and other similar expenses incurred pursuant to this
Section 8(c)), and which relate to the business of Transferor as it existed
prior to the Closing.
9. Administrative Matters.
(a) Provision of Corporate Records. Each of the
parties hereto shall use its best efforts to arrange, as soon as practicable
following the Closing Date, for the delivery to the other party of the
Transferor Documents or Subco Documents (each, as defined in the Schedules
hereto), as the case may be. Except as otherwise required by law or agreed to in
writing, each of Transferor and Subco shall retain all information relating to
the business, assets or liabilities of Transferor or Subco as they existed prior
to the Closing in its possession or under its control until such information is
at least five years old except that if, prior to the expiration of such period,
any of them wishes to destroy or dispose of any such information that is at
least three years old, prior to destroying or disposing of any of such
information, (i) Transferor or Subco shall provide no less than 30 days prior
written notice to the other party, specifying the information proposed to be
destroyed or disposed of, and (ii) if, prior to the scheduled date for such
destruction or disposal, the other party requests in writing that any of the
information proposed to be destroyed or disposed of be delivered to such other
party, such party promptly shall arrange for the delivery of the requested
information to a location specified by, and at the expense of, the requesting
party. For purposes of this Section 9, "information" shall mean all records,
books, subscriptions, contracts, instruments, computer data and other data and
information.
(b) Access to Information. From and after the Closing
Date, each of the parties hereto shall afford to the other and its authorized
accountants, counsel and other designated representatives reasonable access and
duplication rights (at the requesting party's expense) during normal business
hours and upon reasonable advance notice, subject to appropriate restrictions
for classified information, to all information within the possession or control
of such party and its subsidiaries, to the extent relating to the business,
assets or liabilities of Transferor or Subco as it existed prior to the Closing,
insofar as such access is reasonably required by the other party. Without
limiting the foregoing, information may be requested under this Section 9(b) for
audit, accounting, claims, litigation and tax purposes, as well as for purpose
of fulfilling disclosure and reporting obligations.
(c) Cooperation with Respect to Government Filings
and Reports. Each of the parties hereto agrees to provide the other party with
such cooperation and information as may be reasonably requested by the other in
connection with the preparation or filing of any government report or other
government filing, or in conducting any other government proceeding, relating to
events prior to the Closing Date. Such cooperation and information shall
include, without limitation, promptly forwarding copies of appropriate notices
and forms or other communications received from or sent to any government
authority to the appropriate party. Each party shall make its employees and
facilities available during normal business hours and on
15
reasonable prior notice to provide explanation of any documents or information
provided hereunder.
(d) Correspondence. Spice hereby authorizes Subco, on
and after the Closing Date, to receive and open mail addressed to Transferor and
to deal with the contents thereof in a responsible manner, provided that such
mail relates (or reasonably appears to relate) to the Subco Business, the
Transferred Assets or the Assumed Liabilities. Subco shall deliver to Spice any
mail which relates to any other matter addressed to Transferor which is
delivered to and received by Subco. Subco hereby authorizes Transferor, on and
after the Closing Date, to receive and open mail addressed to Subco and to deal
with the contents thereof in a responsible manner, provided that such mail
relates (or reasonably appears to relate) to such other matters. Transferor
shall deliver to Subco any mail which relates to the Subco Business, the
Transferred Assets or the Assumed Liabilities addressed to Subco which is
delivered to and received by Transferor.
(e) Settlement for Cash Collections and
Disbursements. For each calendar month, commencing with the month in which the
Closing occurs and continuing until determined by the parties no longer to be
necessary, each of Subco and Spice shall cause all cash collections and cash
disbursements received by Subco for the benefit of Transferor, or by Transferor
for the benefit of Subco, as the case may be, during the relevant month to be
remitted to the party entitled to the benefit thereof as promptly as reasonably
possible after the receipt thereof. Subject to the foregoing sentence, each of
Transferor and Subco shall pay to the other, if and when received, any amounts
which shall be received after the Closing Date for the benefit of such other
party.
10. Indemnification.
(a) Obligation of Spice to Indemnify. Spice shall
indemnify, defend and hold harmless Subco (and any of its directors,
representatives, officers, employees, affiliates, subsidiaries, successors and
assigns) from and against any losses, claims (including, without limitation, any
third party claims), damages, expenses or other liabilities or obligations
("Losses") (including, without limitation, interest, penalties and reasonable
fees and expenses (including costs of investigation and preparation) of
attorneys, experts and consultants incurred by any such indemnified party in any
action or proceeding between such indemnified party and such indemnifying party
or between such indemnified party and any third party) arising out of or in
connection with (i) a breach by Spice of any covenant or agreement to be
performed by it after Closing contained in this Agreement, any other Related
Agreement to which it is a party or in any document or other writing delivered
pursuant hereto or thereto, (ii) any Liability of Transferor not intended to be
assumed by Subco pursuant to Section 2, and (iii) any untrue statement or
alleged untrue statement of a material fact contained in the S-1, S-4 or in the
Proxy Statement, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which
16
they were made, not misleading, but only in each case with respect to
information provided by or on behalf of Playboy relating to Playboy and
contained in or omitted from the S-1, S-4 or the Proxy Statement.
(b) Obligation of Subco to Indemnify. Subco shall
indemnify, defend and hold harmless Spice (and any of its directors,
representatives, officers, employees, affiliates, successors (including the S
Surviving Corporation), subsidiaries and assigns) from and against any Losses
(including, without limitation, interest, penalties and reasonable fees and
expenses (including costs of investigation and preparation) of attorneys,
experts and consultants incurred by any such indemnified party in any action or
proceeding between such indemnified party and such indemnifying party or between
such indemnified party and any third party) arising out of or in connection with
(i) a breach by Subco of any representation, warranty, certification, covenant
or agreement contained in this Agreement, any other Related Agreement to which
it is a party, or in any document or other writing delivered pursuant hereto or
thereto (including, without limitation, any certificate delivered pursuant to
this Agreement or any other Related Agreement), (ii) a breach by Spice of any
covenant or agreement to be performed by it at or prior to Closing contained in
this Agreement, any other Related Agreement to which it is a party, or in any
document or other writing delivered pursuant hereto or thereto, (iii) any
Assumed Liabilities, and (iv) any untrue statement or alleged untrue statement
of a material fact contained in the S-1, S-4 or in the Proxy Statement, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but only in each case
with respect to information provided by or on behalf of Subco or Transferor
relating to Subco and contained in or omitted from the S-1, S-4 or the Proxy
Statement.
(c) Notice to Indemnifying Party. If any Person
entitled to indemnification hereunder (the "Indemnitee") receives written notice
of any third party claim or potential claim or the commencement of any action or
proceeding that could give rise to an obligation on the part of any other Person
(the "Indemnifying Party") pursuant to Section 10(a) or 10(b), the Indemnitee
shall promptly give the Indemnifying Party notice thereof (the "Indemnification
Notice"); provided, however, that the failure to give the Indemnification Notice
promptly shall not impair the Indemnitee's right to indemnification in respect
of such claim, action or proceeding unless, and only to the extent that, the
lack of prompt notice results in the Indemnifying Party's forfeiture of
substantive rights or defenses. The Indemnification Notice shall contain factual
information describing the asserted claim, action or proceeding in reasonable
detail (to the extent known to the Indemnitee) and shall include copies of any
notice or other document received from any third party in respect of any such
asserted claim, action or proceeding. The Indemnifying Party shall have the
right to assume the defense of a third party claim, action or proceeding
described in this Section 10(c) at its own cost and expense and with counsel of
its own choosing; provided, however, that the Indemnifying Party acknowledges in
writing (at the time it elects to assume the defense of such claim, action or
proceeding, which shall be not later than thirty (30) days after the date of the
Indemnification Notice) its obligation
17
under this Section 10(c) to indemnify the Indemnitee with respect to such claim,
action or proceeding; such counsel is reasonably satisfactory to the Indemnitee;
the Indemnitee is kept reasonably informed of all developments and is furnished
copies of all papers; the Indemnitee is given the opportunity, at its option, to
participate in, but not control, at its own cost and expense and with counsel of
its own choosing the defense of such claim, action or proceeding; and the
Indemnifying Party diligently prosecutes the defense of such claim, action or
proceeding. In the event that all of the conditions of the foregoing provision
are not satisfied, the Indemnitee shall have the right, without impairing any of
its rights to indemnification as provided herein, to assume and control the
defense of such claim, action or proceeding and to settle such claim, action or
proceeding. No settlement of any such third party claim, action or proceeding
shall be made by the Indemnifying Party without the prior written consent of the
Indemnitee (which shall not be unreasonably withheld or delayed). No settlement
of any such third party claim, action or proceeding shall be made by the
Indemnitee if the Indemnifying Party shall have assumed the defense thereof and
shall be in compliance with its obligations with respect thereto as set forth
above in this Section 10(c). If the Indemnifying Party chooses to defend any
claim, the Indemnitee shall make available to the Indemnifying Party any books,
records or other documents within its control that are necessary or appropriate
for such defense. Notwithstanding the foregoing, the Indemnitee shall have the
right to employ separate counsel at the Indemnifying Party's expense and to
control its own defense of such asserted liability if in the opinion of counsel
to such Indemnitee a conflict or potential conflict exists between the
Indemnifying Party and such Indemnitee that would make such separate
representation advisable.
(d) Certain Limitations. The amount of any Losses for
which indemnification is provided under this Agreement shall be net of any
amounts actually recovered by the Indemnitee from third parties (including,
without limitation, amounts actually recovered under insurance policies other
than pursuant to retrospective or other self-insurance type policies) with
respect to such Losses. Any Indemnifying Party hereunder shall be subrogated to
the rights of the Indemnitee upon payment in full of the amount of the relevant
Loss. An insurer who would otherwise be obligated to pay any claim shall not be
relieved of the responsibility with respect thereto or, solely by virtue of the
indemnification provisions hereof, have any subrogation rights with respect
thereto. If any Indemnitee recovers an amount from a third party in respect of
any Loss for which indemnification is provided under this Agreement after the
full amount of such Loss has been paid by an Indemnifying Party or after an
Indemnifying Party has made a partial payment of such Loss and the amount
received from the third party exceeds the remaining unpaid balance of such Loss,
then the Indemnitee shall promptly remit to the Indemnifying Party the excess
(if any) of (i) the sum of the amount theretofore paid by the Indemnifying Party
in respect of such Loss plus the amount received from the third party in respect
thereof, less (ii) the full amount of such Loss.
11. Tax Matters.
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(a) Except as may otherwise be agreed by the parties,
Transferor shall be liable for, and shall indemnify and hold Subco harmless from
and against, all liability for Taxes imposed by any governmental authority (i)
on Transferor that Subco pays, otherwise satisfies in whole or in part, or
results in liens or encumbrances on any assets of Subco, and (ii) on Subco in
respect of its income, business, property or operations or for which Subco may
otherwise be liable, for taxable years ending on or prior to the Closing Date,
including without limitation any Taxes arising as a result of the transactions
contemplated hereby and under the Merger Agreement and other Related Agreements.
All Taxes of Subco for which Transferor is not required to indemnify Subco
pursuant to the foregoing sentence shall be the obligation of Subco, and Subco
shall be liable for, and shall indemnify and hold Transferor and its
subsidiaries harmless from and against, all such liabilities. The parties hereto
agree to take all actions necessary to ensure that there are no taxable years of
Subco that include, but do not end on, the Closing Date. As used herein, the
term "Taxes" means all federal, state, local and foreign taxes, including,
without limitation, income, profits, franchise, employment, transfer,
withholding, property, excise, sales and use taxes (including interest and
penalties thereon and additions thereto).
(b) Any refunds of taxes or any credit against Taxes
of Subco with respect to any taxable years or portions thereof ending on or
prior to the Closing Date shall be for the account of Transferor. Subco shall
promptly forward to, or reimburse Transferor for, any such refunds or credits
and interest due Transferor after receipt thereof. Each party hereto shall
cooperate with the other party as reasonably requested in making such filings as
may be necessary and appropriate to seek any such refunds or credits.
(c) Transferor shall prepare any returns relating to
Taxes to be filed by or with respect to Subco which relates to any period ending
on or prior to the Closing Date. Subco shall promptly respond to all reasonable
requests by Transferor for information necessary to prepare and file any such
Tax returns.
(d) Transferor shall have the right, at its own
expense, to negotiate, settle or contest any asserted Tax liability or refund
claim of Subco to the extent that Transferor is required to indemnify against
such asserted Tax liability pursuant to Section 11(a) or is entitled to such
refund or credit pursuant to Section 11(b).
(e) If Subco receives any written communication from
a taxing authority regarding any actual or proposed assessment, official inquiry
or proceeding that could give rise to an official determination with respect to
any Tax liability or Tax refund claim for any period for which Transferor may be
liable (in the case of a liability) or may be entitled (in the case of a refund
claim) pursuant to this Agreement, Subco (i) shall within 15 days of receipt of
such written communication so notify Transferor in writing, and (ii) shall,
prior to and for at least 30 days after so notifying Transferor (or, if less,
within a period ending 5 days prior to the date,
19
including extensions, on which Subco is required to take action pursuant to such
written communication), refrain from making any payment of any Tax claimed and
forbear from any settlement negotiations or compromises with respect to such
proposed adjustment. Transferor agrees to notify Subco in writing within such 30
(or shorter) day period if it intends to exercise its contest rights hereunder
with respect to the asserted Tax liabilities or the refund claim. The parties
hereto agree to cooperate with each other in connection with any examination
process with respect to any asserted Tax liability or refund claim and shall
make available on a reasonable basis to each other any personnel, books, records
or other documents necessary or appropriate for participation in such process.
12. Certain Transaction Costs and Expenses. The parties hereto
hereby agree that all of the costs and expenses of Subco and Transferor incurred
in connection with the development, negotiation, preparation and execution of
this Agreement, the other Related Agreements and all documents contemplated
hereby or thereby, and otherwise in connection with the consummation of the
transactions contemplated hereby and thereby, shall be paid in accordance with
the terms of Section 7.5 of the Merger Agreement.
13. Mutual Release. Effective as of the Closing, each of
Transferor, on the one hand, and Subco, on the other hand, releases and forever
discharges the other and its affiliates, and its directors, officers, employees
and agents of and from all debts, demands, actions, causes of action, suits,
accounts, covenants, contracts, agreements, damages, and any and all claims,
demands and liabilities whatsoever of every name and nature, both in law and in
equity, against such other party or any of its assigns, which the releasing
party has or ever had, which arise out of or relate to events, circumstances or
actions taken by such other party prior to the Closing; provided, however, that
the foregoing general release shall not apply to this Agreement, the Merger
Agreement, the other Related Agreements or the transactions contemplated hereby
or thereby and shall not affect either party's right to enforce this Agreement,
the other Related Agreements or any other agreement contemplated hereby or
thereby in accordance with its terms.
14. Termination. The Agreement (a) may be terminated at any
time prior to the Closing Date by mutual written consent of Spice and Playboy,
or (b) shall terminate upon termination of the Merger Agreement and abandonment
of the transactions therein contemplated prior to the Effective Time of the
Mergers.
15. Further Assurances. Transferor and Subco shall cooperate
with one another and shall execute and deliver, or cause to be executed and
delivered, such documents and other papers, and take such further actions, as
may be reasonably requested or desirable to carry out the provisions hereof and
to consummate the transactions contemplated hereby.
16. Waiver and Amendments; Remedies; Third Party
Beneficiaries. This Agreement may be amended, superseded, canceled, renewed or
extended, and the
20
terms hereof may be waived, only by a written instrument signed by each of the
parties hereto, or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege. The rights
and remedies herein provided are cumulative and are not exclusive of any rights
or remedies that any party may otherwise have at law or in equity. The parties
hereby agree that Playboy (and each of its subsidiaries and affiliates) shall be
a third-party beneficiary of this Agreement. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any Person other than
the parties hereto, any Indemnitee under Section 10 and Playboy (and each of its
subsidiaries and affiliates) and their respective successors and assigns any
legal or equitable right, remedy or claim under or in or in respect of this
Agreement or any provision herein contained.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES THEREOF.
18. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS
AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER RELATED AGREEMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
19. Binding Effect; No Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
successors, assigns and legal representatives. This Agreement shall not be
assigned by either party hereto, except that either party may assign this
Agreement with the prior written consent of Playboy.
20. Entire Agreement. This Agreement, the other Related
Agreements, the Merger Agreement and all other documents in connection with the
foregoing (including the exhibits and schedules hereto and thereto) contain the
entire agreement among the parties with respect to the transactions contemplated
hereby and thereby and supersede all prior agreements, written or oral, with
respect thereto.
21. Severability. If any provision of this Agreement shall be
declared to be invalid, illegal or unenforceable, such provision shall survive
to the extent it is not so declared, and the validity, legality and
enforceability of the other provisions hereof shall not in any way be affected
or impaired thereby, unless such action would
21
substantially impair the benefits to either party of the remaining provisions of
this Agreement.
22. Table of Contents and Headings. The table of contents and
headings in this Agreement are solely for convenience of reference and shall not
affect the interpretation or construction of any of the provisions hereof.
23. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed given on the date delivered if delivered personally (including by
courier), on the date transmitted if sent by telecopy (which is confirmed) or
mailed by registered or certified mail (return receipt requested) to the parties
at the following addresses:
If to Transferor prior to the Closing Date:
Spice Entertainment Companies, Inc.
536 Broadway
New York, New York 10012
Attention: Daniel Barsky, Esq.
General Counsel
Facsimile: (212) 226-6354
with a copy to: Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Attention: Paul S. Pearlman, Esq.
Facsimile: (212) 715-8000
If to Transferor on or after the Closing Date or to Playboy:
Playboy Enterprises, Inc.
680 North Lake Shore Drive
Chicago, IL 60611
Attention: Howard Shapiro, Esq.
General Counsel
Facsimile:(312) 266-2042
with a copy to: Paul, Weiss, Rifkind, Wharton &
Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: James M. Dubin, Esq.
Facsimile: (212) 757-3990
or to such other Person or address (or facsimile number) as Playboy shall
furnish to Subco in writing.
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If to Subco to: Directrix, Inc.
536 Broadway, 10th Floor
New York, New York 10012
Attention: J. Roger Faherty
Facsimile: [ ]
with a copy to: Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Attention: Paul S. Pearlman, Esq.
Facsimile: (212) 715-8000
or to such other Person or address (or facsimile number) as Subco shall furnish
to Transferor in writing.
Prior to the Effective Time of the Mergers, Playboy shall
receive copies of all notices or other communications given hereunder by any
party at the address set forth above.
24. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same original.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
SPICE ENTERTAINMENT COMPANIES, INC.
By:
----------------------------------------
Name:
Title:
DIRECTRIX, INC.
By:
----------------------------------------
Name:
Title: