Exhibit 2.1
EXECUTION COPY
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT ("Agreement"), dated as of December 23,
2002, by and among Playboy Enterprises, Inc., a Delaware corporation ("PEI"),
Playboy Entertainment Group, Inc., a Delaware corporation ("PEGI"), Playboy
Enterprises International, Inc., a Delaware corporation ("PEII"), Claxson
Interactive Group Inc., a British Virgin Islands corporation ("Claxson"),
Carlyle Investments LLC, a Delaware limited liability company ("Carlyle") (in
its own right and as a successor in interest to Victoria Springs Investments
Ltd., a British Virgin Islands corporation ("VSI")), Carlton Investments LLC,
a Delaware limited liability company ("Carlton", and together with Carlyle,
"Carlton and Carlyle") (in its own right and as a successor in interest to
VSI), Lifford International Co. Ltd. (BVI), a British Virgin Islands
corporation ("Lifford"), and Playboy TV International, LLC, a Delaware limited
liability company ("PTVI"). Terms used but not defined herein shall have the
meaning set forth in Section 10.
WHEREAS, concurrently with the execution of this Agreement, the
parties hereto are closing the restructuring (the "Restructuring") of the
joint venture relationships among PEI and its Affiliates, on the one hand, and
Claxson and its Affiliates, on the other hand;
WHEREAS, Carlton and Carlyle are presently the beneficial owners
of an 80.1% membership interest (the "PTVI Interest") in PTVI;
WHEREAS, Lifford is presently the record and beneficial owner of
728,112 shares of Series A Preferred Stock (the "Xxxxxxx.xxx Interest") of
Xxxxxxx.xxx, Inc., a Delaware corporation ("Xxxxxxx.xxx");
WHEREAS, pursuant to the terms of the PTVI Operating Agreement,
Carlton and Carlyle are presently obligated to make additional mandatory
capital contributions to PTVI up to the maximum amount specified in the PTVI
Operating Agreement (the "Carlton and Carlyle Capital Contribution") which
amounts will be used, among other things, to cover operating losses and to
enable PTVI to satisfy the PTVI Payment Obligation;
WHEREAS, Lifford desires to assign, transfer and convey the
Xxxxxxx.xxx Interest to PEI, and PEI has agreed to accept such assignment,
transfer and conveyance;
WHEREAS, Carlton and Carlyle desire not to make the Carlton and
Carlyle Capital Contribution and, instead, desire to surrender the PTVI
Interest to PTVI, and PEGI has agreed to accept Carlton and Carlyle's
surrender of the PTVI Interest to PTVI in lieu of pursuing any other course of
action available to it under the PTVI Operating Agreement, the PTVI Program
Supply Agreement, the PTVI Trademark License Agreement, the Carlyle Guaranty
or the Carlton Guaranty;
WHEREAS, the parties hereto desire to effect the transactions
contemplated hereby upon the terms set forth herein;
NOW THEREFORE, in consideration of the premises, the mutual
promises of the parties hereto and the mutual benefits to be gained by the
performance thereof, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, PEI, PEII, PEGI, Claxson,
Xxxxxxx, Xxxxxxx, Lifford and PTVI, for their respective successors and
permitted assigns, hereby agree as follows:
Section 1. PEI's Representations and Warranties.
PEI, PEII and PEGI, jointly and severally, represent and warrant
to Claxson, Xxxxxxx, Xxxxxxx and Lifford as follows:
(a) Authority. Each of PEI, PEII and PEGI has been duly
organized, and is validly existing and in good standing, under the laws of its
jurisdiction of formation, has the power and authority to execute, deliver and
carry out the terms and provisions of this Agreement and each other
Restructuring Agreement and to consummate the transactions contemplated hereby
and thereby, and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and each other Restructuring
Agreement. No vote of any class or series of stock issued by PEI, PEII or PEGI
or any other corporate action on the part of PEI, PEII or PEGI is necessary to
approve the Restructuring or any of the Restructuring Agreements.
(b) Enforceability. This Agreement and each of the
Restructuring Agreements (as applicable) has each been duly executed and
delivered by each of PEI, PEII and PEGI, and, assuming due and legal, valid
authorization, execution and delivery hereof and thereof by Claxson, Xxxxxxx,
Xxxxxxx, Lifford and PTVI and the other parties thereto (other than PEI, PEII,
PEGI and any Affiliates of PEI, PEII or PEGI), constitutes a legal, valid and
binding obligation of each of PEI, PEII and PEGI, enforceable against each of
PEI, PEII and PEGI in accordance with its terms.
(c) Consents and Approvals; No Violations. Except for the
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, and state
securities or blue sky laws, none of the execution, delivery or performance of
this Agreement or any other Restructuring Agreement by PEI, PEII and PEGI, the
consummation by PEI, PEII and PEGI of the Restructuring or compliance by PEI,
PEII and PEGI with any of the provisions hereof or thereof will (i) conflict
with or result in any breach of any provision of the certificate of
incorporation, the by-laws or similar organizational documents of PEI or its
Subsidiaries, (ii) require any filing with, or permit, authorization, consent or
approval of, any Governmental Entity or other Person (including consents from
parties to Contracts to which PEI or any of its Subsidiaries or Affiliates is a
party or is bound or subject), (iii) require any consent, approval or notice
under, or result in a violation or breach of, or constitute (with or without due
notice or the passage of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any Contract to which PEI or any of
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its Subsidiaries or Affiliates is a party or is bound or subject, or
(iv) violate any order, writ, injunction, decree, statute, law, rule or
regulation applicable to PEI or its Subsidiaries or Affiliates or any of their
respective properties or assets.
Section 2. Claxson's Representations and Warranties.
Claxson, Xxxxxxx, Xxxxxxx and Lifford, jointly and severally,
represent and warrant to PEI, PEII and PEGI as follows:
(a) Authority. Each of Claxson, Xxxxxxx, Xxxxxxx and Lifford
has been duly organized, and is validly existing and in good standing, under
the laws of its jurisdiction of formation, has the power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and
each other Restructuring Agreement to which it is a party and to consummate
the transactions contemplated hereby and thereby, and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement
and each other Restructuring Agreement to which it is a party. No vote of any
class or series of stock issued by Claxson, Xxxxxxx, Xxxxxxx and Lifford or
any of their Subsidiaries (excluding PTVI and PTVLA) or any other corporate
action on the part of Claxson, Xxxxxxx, Xxxxxxx and Lifford or any of their
Subsidiaries (excluding PTVI and PTVLA) is necessary to approve the
Restructuring or any of the Restructuring Agreements.
(b) Enforceability. This Agreement and each of the
Restructuring Agreements (as applicable) has each been duly executed and
delivered by each of Claxson, Xxxxxxx, Xxxxxxx and Lifford, and, assuming due
and legal, valid authorization, execution and delivery hereof and thereof by
PEI, PEII and PEGI and the other parties thereto (other than Claxson, Xxxxxxx,
Xxxxxxx and Lifford and any of their respective Affiliates), constitutes a
legal, valid and binding obligation of Claxson, Xxxxxxx, Xxxxxxx and Lifford,
enforceable against each of Claxson, Xxxxxxx, Xxxxxxx and Lifford in
accordance with its terms.
(c) Consents and Approvals; No Violations. Except for the
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, and state
securities or blue sky laws, none of the execution, delivery or performance of
this Agreement or any other Restructuring Agreement by Claxson and its
Subsidiaries and Affiliates (excluding PTVI and PTVLA), the consummation by
Claxson and its Subsidiaries and Affiliates (excluding PTVI and PTVLA) of the
Restructuring or compliance by Claxson and its Subsidiaries and Affiliates
(excluding PTVI and PTVLA) with any of the provisions hereof will (i) conflict
with or result in any breach of any provision of the certificate of
incorporation, the by-laws or similar organizational documents of Claxson or
its Subsidiaries (excluding PTVI and PTVLA), (ii) require any filing with, or
permit, authorization, consent or approval of, any Governmental Entity or
other Person (including consents from parties to Contracts to which Claxson or
any of its Subsidiaries or Affiliates (excluding PTVI and PTVLA) is a party or
is bound or subject), (iii) require any consent, approval or notice under, or
result in a violation or breach of, or constitute (with or without due notice
or the passage of time or both) a default (or give rise to any
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right of termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any Contract to which Claxson or its
Subsidiaries or Affiliates (excluding PTVI and PTVLA) is a party or is bound or
subject, or (iv) violate any order, writ, injunction, decree, statute, law, rule
or regulation applicable to Claxson or its Subsidiaries or Affiliates (excluding
PTVI and PTVLA) or any of their respective properties or assets.
(d) Representation of Ownership. Carlton and Carlyle are the
sole record and beneficial owners of the PTVI Interest free and clear of any
and all liens, charges, security interests, claims, mortgages, pledges,
proxies, voting trusts or agreements, obligations, understandings or
arrangements or other restrictions on title or transfer of any nature
whatsoever (collectively, "Encumbrances"), other than Encumbrances imposed by
the PTVI Operating Agreement and restrictions on transfer imposed by
applicable federal and state securities laws. Lifford is the sole record and
beneficial owner of the Xxxxxxx.xxx Interest free and clear of any and all
Encumbrances, other than Encumbrances imposed by the Investors' Rights
Agreement, dated as of August 13, 2001 (the "Investors' Rights Agreement"), by
and between Xxxxxxx.xxx and the Investors (as defined therein), the Right of
First Refusal and Co-Sale Agreement (the "Co-Sale Agreement"), dated as of
August 13, 2001, by and among Xxxxxxx.xxx, PEI and the Stockholders (as
defined therein) and restrictions on transfer imposed by applicable federal
and state securities laws. Upon consummation of the transactions contemplated
by this Agreement, PTVI will acquire the PTVI Interest free and clear of all
Encumbrances other than Encumbrances imposed by the PTVI Operating Agreement
and restrictions on transfer imposed by applicable federal and state
securities laws, and neither Claxson nor any of its Subsidiaries or Affiliates
will own any Equity Interest or have any other rights in PTVI. Upon
consummation of the transactions contemplated by this Agreement, PEI will
acquire the Xxxxxxx.xxx Interest free and clear of all Encumbrances other than
Encumbrances imposed by the Investors' Rights Agreement, the Co-Sale Agreement
and restrictions on transfer imposed by applicable federal and state
securities laws, and neither Claxson nor any of its Subsidiaries or Affiliates
will own any Equity Interest or have any other rights in Xxxxxxx.xxx. No
person has any rights as a successor or assignee under any of the agreements
entered into by Lifford in connection with the issuance by Xxxxxxx.xxx of
782,112 shares of its Series A Preferred Stock to Lifford on August 13, 2001
(including, without limitation, the Investors' Rights Agreement and the
Co-Sale Agreement).
(e) No Undisclosed Liabilities. Except as reflected or reserved
against in the March Balance Sheet, there are no Liabilities, other than
Liabilities which, individually or in the aggregate, are not material to the
business or condition of PTVI and its Subsidiaries, arising out of, relating
to or resulting from the ownership or operations of the business, properties
and assets of PTVI and its Subsidiaries on or prior to March 31, 2002. To the
knowledge of Claxson and its Subsidiaries after due inquiry, except as
reflected or reserved against in the September Balance Sheet, there are no
Liabilities, other than Liabilities which, individually or in the aggregate,
are not material to the business or condition of PTVI and its Subsidiaries,
arising out of, relating to or resulting from the ownership or operations of
the business, properties and assets of PTVI and its Subsidiaries from April 1,
2002 to the date of this Agreement. Notwithstanding the
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foregoing, no representations or warranties are made with respect to
Liabilities (x) owed to PEI or its Subsidiaries or Affiliates pursuant to any
contract or agreement or (y) related to or arising out of the ownership or
operations of the business, properties or assets of Playboy TV UK Limited,
Playboy TV/UK Benelux Ltd. or The Playboy Channel Japan, Inc.
(f) Affiliated Transactions. Schedule 2(f) contains a complete
and accurate listing of any current officer, director, key employee or
Affiliate of Claxson or any of its Subsidiaries or the Xxxxxxxx Group who is,
directly or indirectly, a party to any Contract or transaction (other than
with respect to compensation or travel expense account reimbursement in the
ordinary course of business consistent with past practice) with, or has any
loan obligation to or from, PTVI or any of its Subsidiaries (or for which any
of them is or may be liable under any guarantee or otherwise) or has any
interest in any property used by PTVI or any of its Subsidiaries. Schedule
2(f) sets forth a brief description of each such transaction, including,
without limitation, any Contract providing for the furnishing of services
(other than employment contracts), or the rental of real or personal property
from, or otherwise requiring payments to, any such Person.
Section 3. Transfer.
In consideration of the closing of the Restructuring and the
transactions pursuant to the terms hereof and the other Restructuring
Agreements, (a) Carlton and Carlyle hereby assign, transfer and convey to PTVI
all of their right, title and interest in the PTVI Interest, free and clear of
all Encumbrances other than Encumbrances imposed by the PTVI Operating
Agreement and restrictions on transfer imposed by applicable federal and state
securities laws, and (b) Lifford hereby assigns, transfers and conveys all of
Lifford's right, title and interest in the Xxxxxxx.xxx Interest to PEI, free
and clear of all Encumbrances other than Encumbrances imposed by the
Investors' Rights Agreement or the Co-Sale Agreement and restrictions on
transfer imposed by applicable federal and state securities laws. The
conveyance of the PTVI Interest to PTVI pursuant to the terms hereof shall be
deemed effective as of April 1, 2002 upon the execution and delivery by each
of Carlton and Carlyle to PTVI of the Certificate attached as Exhibit A
hereto. The conveyance of the Xxxxxxx.xxx Interest to PEI pursuant to the
terms hereof will be effective upon the delivery by Lifford to PEI of
certificates representing the Xxxxxxx.xxx Interest, accompanied by irrevocable
stock powers duly endorsed in blank in the form attached as Exhibit B hereto.
Section 4. Affiliated Transactions.
Except as set forth on Schedule 4, Claxson shall cause all
Contracts and transactions (including loan obligations) between PTVI and any
of its Subsidiaries (or for which any of them is or may be liable under any
contract or otherwise) and any current officer, director, key employee or
Affiliate of Claxson or any of its Subsidiaries (excluding PTVI and its
Subsidiaries) or the Xxxxxxxx Group, including, without limitation, those
Contracts and transactions set forth on Schedule 2(f) hereto, to be terminated
effective as of April 1, 2002, and shall deliver to PEI evidence of such
terminations that is reasonably acceptable to PEI.
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Section 5. Indemnification and Mutual Releases.
(a) (i) Claxson, Xxxxxxx, Xxxxxxx and Lifford agree to
indemnify and hold PEI and its Subsidiaries and their respective
stockholders, members, directors, officers, employees, attorneys, agents
and Affiliates (collectively, the "PEI Indemnified Parties") harmless
from and against the aggregate of all Losses incurred or suffered by the
PEI Indemnified Parties arising out of, relating to, or resulting from
(i) any breach of a representation or warranty (other than the
representations and warranties set forth in Section 2(e)) made by
Claxson, Xxxxxxx, Xxxxxxx or Lifford in or pursuant to this Agreement
(determined in all cases as if the terms "material" or "materially" were
not included therein), (ii) any breach of the covenants or agreements
made by Claxson, Xxxxxxx, Xxxxxxx or Lifford in or pursuant to this
Agreement and (iii) any inaccuracy in any certificate, instrument or
other document delivered by Claxson, Xxxxxxx, Xxxxxxx or Lifford as
required by this Agreement.
(ii) Claxson, Xxxxxxx, Xxxxxxx and Lifford also agree to
indemnify and hold the PEI Indemnified Parties harmless from and against
the aggregate of 80.1% of all Losses incurred or suffered by the PEI
Indemnified Parties related to, arising out of or resulting from any
breach of the representations and warranties set forth in Section 2(e)
hereof (determined in all cases as if the phrase "other than Liabilities
which, individually or in the aggregate, are not material to the business
or condition of PTVI and its Subsidiaries" were not included therein)
(the "Indemnifiable Losses"), provided, however, that Claxson, Xxxxxxx,
Xxxxxxx and Lifford shall not be required to indemnify and hold the PEI
Indemnified Parties harmless under this Section 5(a)(ii) until the
Indemnifiable Losses singly or in the aggregate exceed $500,000, at which
point Claxson, Xxxxxxx, Xxxxxxx and Lifford shall be required to
indemnify and hold the PEI Indemnified Parties harmless for all
Indemnifiable Losses up to $10,000,000 (the "Cap"). Claxson shall satisfy
its obligation to pay Indemnifiable Losses pursuant to this Section
5(a)(ii) by Transferring (as defined in the PTVLA Operating Agreement),
or causing to be Transferred, to the applicable PEI Indemnified Parties,
Membership Interests (as defined in the PTVLA Operating Agreement) in
PTVLA equal to the Indemnifiable Losses divided by the Fair Market Value
(as defined in the PTVLA Operating Agreement) of PTVLA at the time of the
Transfer (determined in accordance with Exhibit C to the PTVLA Operating
Agreement). Notwithstanding the foregoing sentence, if Claxson or its
Affiliates Transfer any Membership Interests in PTVLA to a third party in
accordance with the terms of the PTVLA Operating Agreement, the PEI
Indemnified Parties shall have recourse to Claxson's and its
Subsidiaries' remaining assets up to the Cap; provided, however, that the
parties hereto expressly acknowledge that all indemnification obligations
of Claxson, Xxxxxxx, Xxxxxxx or Lifford under this Section 5(a)(ii),
shall terminate pursuant to the terms of Section 7 herein.
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(b) PEI, PEII and PEGI agree to indemnify and hold Claxson and
its Subsidiaries and their respective stockholders, members, directors,
officers, employees, attorneys, agents and Affiliates (collectively, the
"Claxson Indemnified Parties") harmless from and against the aggregate of all
Losses incurred or suffered by the Claxson Indemnified Parties arising out of,
relating to, or resulting from (i) any breach of a representation or warranty
made by PEI, PEII or PEGI in or pursuant to this Agreement (determined in all
cases as if the terms "material" or "materially" were not included therein),
(ii) any breach of the covenants or agreements made by PEI, PEII or PEGI in or
pursuant to this Agreement, and (iii) any inaccuracy in any certificate,
instrument or other document delivered by PEI, PEII or PEGI as required by
this Agreement.
(c) The right to indemnification, payment of Losses or for
other remedies based on any representation, warranty, covenant or obligation
of any of PEI, PEII, PEGI, Claxson, Xxxxxxx, Xxxxxxx or Lifford contained in
or made pursuant to this Agreement shall not be affected by any investigation
conducted with respect to, or any knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery of
this Agreement or the closing of the Restructuring, with respect to the
accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant or obligation.
(d) (i) Claxson, on behalf of itself and the other Claxson
Indemnified Parties (collectively, the "Claxson Releasing Parties"), for good
and sufficient consideration, the receipt of which is acknowledged, releases
absolutely and forever discharges the PEI Indemnified Parties (the "PEI
Released Parties"), from any and all actual or possible claims, charges,
damages, demands, debts, liabilities, losses, accounts, reckonings,
obligations, suits, actions and causes of action of every kind and nature
whatsoever, including, but not limited to, those arising under contract,
statute or common law, whether or not known or suspected at this time, which
the Claxson Releasing Parties have, or ever had, owned or held, or hereafter
can, shall or may have against any or all of the PEI Released Parties, based
upon, arising out of, related to, or by reason of any cause, occurrence,
event, act, fact, circumstance, thing, statement or omission occurring before
the date of this Agreement relating to, arising from or in connection with
PTVI (collectively, "Claxson Claims"), other than Claxson Claims relating to,
arising out of, or in connection with (i) the matters set forth in any
Restructuring Agreement or (ii) the willful malfeasance or intentional
misconduct of, or fraud by, any PEI Released Party.
(ii) PEI, on behalf of itself and the other PEI Indemnified
Parties (collectively, the "PEI Releasing Parties"), for good and
sufficient consideration, the receipt of which is acknowledged, releases
absolutely and forever discharges the Claxson Indemnified Parties (the
"Claxson Released Parties"), from any and all actual or possible claims,
charges, damages, demands, debts, liabilities, losses, accounts,
reckonings, obligations, suits, actions and causes of action of every kind
and nature whatsoever, including, but not limited to, those arising under
contract, statute or common law, whether or not known or suspected at
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this time, which the PEI Releasing Parties have, or ever had, owned or
held, or hereafter can, shall or may have against any or all of the
Claxson Released Parties, based upon, arising out of, related to, or by
reason of any cause, occurrence, event, act, fact, circumstance, thing,
statement or omission occurring before the date of this Agreement
relating to, arising from or in connection with PTVI (collectively, "PEI
Claims"), other than PEI Claims relating to, arising out of or in
connection with (i) the matters set forth in any Restructuring Agreement
or (ii) the willful malfeasance or intentional misconduct of, or fraud
by, any Claxson Released Party. Notwithstanding the generality of the
foregoing, the PEI Releasing Parties hereby expressly release the Claxson
Released Parties from any PEI Claims related to or arising from any
Claxson Released Party's election not to attend any board meetings of PTVI.
Section 6. Method of Asserting Claims.
All claims for indemnification by any party under Section 5 will
be asserted and resolved as follows:
(a) In the case of any claim asserted by a third party (a
"Third Party Claim") against a party entitled to indemnification under this
Agreement (the "Indemnified Party"), notice (a "Claim Notice") shall be given
by the Indemnified Party to the party required to provide indemnification (the
"Indemnifying Party") with reasonable promptness after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and the
Indemnified Party shall permit the Indemnifying Party (at the expense of such
Indemnifying Party) to assume, direct and control the defense of any claim or
any litigation resulting therefrom, provided that (a) the counsel for the
Indemnifying Party who shall conduct the defense of such claim or litigation
shall be reasonably satisfactory to the Indemnified Party, (b) the Indemnified
Party may participate in such defense at such Indemnified Party's expense, and
(c) the failure by any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its indemnification obligation
under this Agreement except to the extent that such failure results in a
failure of actual notice to the Indemnifying Party and such Indemnifying Party
is irreparably and materially prejudiced as a result of such failure to give
notice. Except with the prior written consent of the Indemnified Party, such
consent not to be unreasonably withheld, no Indemnifying Party, in the defense
of any such claim or litigation, shall consent to entry of any judgment or
enter into any settlement. In the event that the Indemnified Party shall in
good faith determine (x) that the conduct of the defense of any claim by the
Indemnifying Party might be expected to (i) affect adversely the ability of an
Indemnified Party to conduct its businesses, (ii) result in the finding or
admission of any violation of applicable law by the Indemnified Party or (iii)
result in the imposition of injunctive or other equitable relief against the
Indemnified Party or (y) that the Indemnified Party may have available to it
one or more defenses or counterclaims that are inconsistent with one or more
of those that may be available to the Indemnifying Party in respect of such
claim or any litigation relating thereto, the Indemnified Party shall have the
right at all times to take over and assume control over the defense,
settlement, negotiations or litigation relating to any such claim, provided that
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if the Indemnified Party does so take over and assume control, the
Indemnified Party shall not settle such claim or litigation without the
written consent of the Indemnifying Party, such consent not to be unreasonably
withheld and unless prior thereto or in connection therewith the Indemnified
Party unconditionally releases the Indemnifying Party. In the event that the
Indemnified Party takes over and assumes control over the defense, settlement,
negotiations or litigations relating to any such claim the Indemnifying Party
shall pay reasonable fees and expenses of counsel for the Indemnified Party.
In the event that the Indemnifying Party does not accept the defense of any
matter as above provided, the Indemnified Party shall have the full right to
defend against any such claim or demand and shall be entitled to settle or
agree to pay in full such claim or demand. In any event, the Indemnifying
Party and the Indemnified Party shall cooperate in the defense of any claim or
litigation subject to this Section 6 and the records of each shall be
available to the other with respect to such defense.
(b) In the event any Indemnified Party should have a claim
under Section 5 against an Indemnifying Party that does not involve a Third
Party Claim, the Indemnified Party shall deliver a written notification of the
indemnification claim specifying the nature of and basis for such
indemnification claim (the "Indemnity Notice") with reasonable promptness to
the Indemnifying Party. If an Indemnifying Party notifies the Indemnified
Party that it does not dispute the claim described in such Indemnity Notice or
fails to notify the Indemnified Party within forty-five (45) days following
receipt of the Indemnity Notice whether the Indemnifying Party disputes the
claim described in such Indemnity Notice, the Loss arising from the claim
specified in such Indemnity Notice will be conclusively deemed a liability of
the Indemnifying Party under Section 5 and the Indemnifying Party shall pay
the amount of such Loss to the Indemnified Party on demand following the final
determination thereof. If the Indemnifying Party has timely disputed its
liability with respect to such claim, the Indemnifying Party and the
Indemnified Party will resolve such dispute in accordance with Section 8
herein.
Section 7. Survival of Representations and Warranties, etc.
The covenants and agreements of the parties contained in this
Agreement and the representations and warranties contained in Sections 1(a),
1(b), 2(a), 2(b) and 2(d) will survive the consummation of the Restructuring
without limitation; and all other representations and warranties of PEI, PEII,
PEGI, Claxson, Xxxxxxx, Xxxxxxx and Lifford contained in this Agreement will
survive the consummation of the Restructuring until the date that is 45 days
after the completion of the full audit of PTVI's consolidated financial
statements for the fiscal year ending December 31, 2003, but in no event later
than June 1, 2004; provided, however, that any representation or warranty that
would otherwise terminate will continue to survive, with respect to such claim
only, if a Claim Notice or Indemnity Notice (as applicable) shall have been
timely given in good faith based on facts reasonably expected to establish a
valid claim under Section 5 on or prior to such termination date, until the
related claim for indemnification has been satisfied or otherwise resolved as
provided in Section 6.
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Section 8. Dispute Resolution.
(a) If any dispute or difference of any kind whatsoever shall
arise between the parties in connection with, arising out of or relating to
this Agreement (including any schedule or exhibit hereto), or the breach,
termination or validity thereof (a "Dispute"), the parties shall attempt to
settle such Dispute in the first instance by mutual discussions. For the
purpose of this Section 8, PEI and its Subsidiaries and Affiliates shall act
and be treated as one party, and Claxson and its Subsidiaries and Affiliates
shall act and be treated as one party. Within ten (10) business days of the
receipt by a party of a notice of the existence of a Dispute ("Notice"), the
receiving party shall submit a written response to the other party
("Response"). Both the Notice and the Response shall include (i) a statement
of each party's position with regard to the Dispute and a summary of arguments
supporting that position; and (ii) the name and title of the senior executive
who will represent that party in attempting to resolve the Dispute pursuant to
this Section 8(a). Within five (5) business days of receipt of the Response,
the designated executives shall meet and attempt to resolve the Dispute. All
negotiations pursuant to this clause shall be confidential and shall be
treated as compromise and settlement negotiations, and no oral or documentary
representations made by the parties during such negotiations shall be
admissible for any purpose in any subsequent proceedings. If any Dispute is
not resolved for any reason within twenty (20) days of receipt of the Response
(or within such longer period as to which the parties have agreed in writing),
then, on the request of any party the Dispute shall be submitted to
arbitration in accordance with Sections 8(b)-(e) herein.
(b) Any Dispute not timely resolved in accordance with Section
8(a) shall be finally and exclusively settled by arbitration in accordance
with the International Arbitration Rules of the American Arbitration
Association ("AAA") then in effect (the "Rules"), except as modified herein.
The arbitration shall be held in Los Angeles, California. The arbitration
proceedings shall be conducted, and the award shall be rendered, in the
English language.
(c) If the Dispute (including claims and counterclaims) is for
less than $5 million, there shall be one arbitrator. The parties shall have
fifteen (15) days from the receipt by the respondent of the demand for
arbitration to agree on an arbitrator. If the parties fail to timely agree, on
the request of any party such arbitrator shall be appointed by the AAA in
accordance with the Rules and the procedures set forth herein. If the Dispute
(including claims and counterclaims) is for more than $5 million, there shall
be three neutral and impartial arbitrators of whom the claimant and the
respondent shall each appoint one, within fifteen (15) days of the receipt by
respondent of a copy of the demand for arbitration. The two arbitrators so
appointed shall select a third arbitrator to serve as presiding arbitrator,
such selection to be made within twenty (20) days of the selection of the
second arbitrator. If any arbitrator is not appointed within the time limits
set forth herein, such arbitrator(s) shall be appointed by the AAA in
accordance with the Rules and the procedures set forth herein. There shall be
no restriction on the nationality of any arbitrator. Any arbitrator appointed
by the AAA shall be either a retired judge with experience in international
commercial cases or a practicing attorney with at least 15 years experience
with large commercial cases and experience as an international
10
arbitrator. The AAA shall send simultaneously to each party an identical list
of at least nine arbitrator candidates, and each party shall be permitted to
strike two names from the list, rank the remaining arbitrators in order of
preference and return the list to the AAA within ten (10) days of the
transmittal date. If a party does not return the list within the time
specified, all persons named therein shall be considered acceptable. From
among the persons who remain on both lists and in accordance with the
designated order of mutual preference, the AAA shall invite the acceptance of
an arbitrator to serve. There shall be no restrictions on the nationality of
any arbitrator.
(d) The hearing on the merits shall be held as expeditiously as
possible, if practicable no later than four months after the appointment of a
single arbitrator or five months after the appointment of the third
arbitrator, as applicable. The hearing shall, if practicable, last no longer
than ten days, which shall be consecutive, if possible. The award, which shall
be in writing and shall briefly and concisely state the findings of fact and
conclusions of law on which it is based, shall be rendered, if practicable,
within twenty (20) days of the close of the hearing. In rendering an award,
the arbitrator(s) shall be required to follow the law of the State of New
York. The arbitrator(s) are not empowered to award damages in excess of
compensatory damages and each party hereby irrevocably waives any right to
recover such damages with respect to any dispute resolved by arbitration. The
arbitrator(s) shall have the authority to award the costs of the arbitration
(including attorneys' fees and expenses) to the prevailing party. The award
shall be final and binding upon the parties and shall be the sole and
exclusive remedy between the parties regarding any claims, counterclaims,
issues or accounting presented to the arbitral tribunal. Judgment upon any
award may be entered in any court having jurisdiction thereof. Any costs or
fees (including attorney's fees and expenses) incident to enforcing the award
shall be charged against the party resisting such enforcement.
(e) By agreeing to arbitration, the parties do not intend to
deprive any court of its jurisdiction to issue a pre-arbitral injunction,
pre-arbitral attachment or other order in aid of arbitration proceedings and
the enforcement of any award. Without prejudice to such provisional remedies
as may be available under the jurisdiction of a national court, the arbitral
tribunal shall have full authority to grant provisional remedies or modify or
vacate any temporary or preliminary relief issued by a court, and to award
damages for the failure of any party to respect the arbitral tribunal's orders
to that effect.
Section 9. Maintenance of Books and Records.
Within thirty (30) days after the consummation of the Restructuring,
Claxson shall cause all of the Books and Records relating to PTVI and its
Subsidiaries and their businesses, properties and assets held by Claxson or its
Subsidiaries or Affiliates to be transferred to PEGI. Each of the parties
hereto shall preserve, and shall cause its Subsidiaries and Affiliates to
preserve, until at least June 1, 2004, all pre-Restructuring records possessed
or to be possessed by such party relating to PTVI and its business, properties
and assets (provided that the foregoing shall not abridge Claxson's
11
obligation to transfer all Books and Records relating to PTVI and
its Subsidiaries to PEGI within thirty (30) days after consummating the
Restructuring).
Section 10. Definitions.
When used in this Agreement, the following terms shall have the
meanings set forth below:
"AAA" has the meaning set forth in Section 8(b).
"Affiliate" means any Person, directly or indirectly through one
or more intermediaries, controlling, controlled by, or under common control
with the specified Person. The term "control" (and "controlled" and
"controlling," respectively), means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of the
specified Person (whether by Contract, the holding of shares or other Equity
Interests, the possession of voting rights or otherwise).
"Agreement" has the meaning set forth in the Preamble.
"Amended Program Supply Agreement" means the Amended Program
Supply Agreement, executed concurrently herewith and effective as of April 1,
2002, between PEGI and PTVLA with respect to the supply of programming for and
the licensing of trademarks to PTVLA.
"Books and Records" means, for any Person, all files, documents,
instruments, papers, books and records relating to the business, operations,
condition of (financial or other), results of operations and assets and
properties of such Person, including without limitation financial statements,
tax returns and related work papers and letters from accountants, budgets,
pricing guidelines, ledgers, journals, deeds, title policies, minute books,
stock certificates and books, stock transfer ledgers, contracts, licenses,
customer lists, computer files and programs, operating data and plans.
"California Courts" has the meaning set forth in Section 11(g).
"Carlton" has the meaning set forth in the Preamble.
"Carlton and Carlyle Capital Contribution" has the meaning set
forth in the Recitals.
"Carlton Guaranty" means the Guaranty, dated as of December 28,
2000, by Carlton Investments LLC in favor of and for the benefit of PTVI,
Playboy Enterprises International, Inc. and PEGI.
12
"Carlyle" has the meaning set forth in the Preamble.
"Carlyle Guaranty" means the Guaranty, dated as of December 28,
2000, by Carlyle Investments LLC in favor of and for the benefit of PTVI,
Playboy Enterprises International, Inc. and PEGI.
"Cap" has the meaning set forth in Section 5(a)(ii).
"Xxxxxxxx Group" means (i) Xxxxxxx X. Xxxxxxxx, Xxxxxxx X.
Xxxxxxxx, their respective wives and direct descendants or any entity,
including trusts, in which Xxxxxxx X. Xxxxxxxx and/or Xxxxxxx X. Xxxxxxxx or
their respective wives and direct descendants hold, directly or indirectly, at
least 50.1% of the economic benefit or the total shares, participations or
interests in (however designated) corporate stock, partnership interests,
limited liability company interests, or any equivalents thereof of such
entity, and which is controlled, directly or indirectly, by any of such
persons; or (ii) any entity, including trusts, which is controlled, directly
or indirectly, by any of Xxxxxxx X. Xxxxxxxx and/or Xxxxxxx X. Xxxxxxxx or
their respective wives and direct descendants.
"Claim Notice" has the meaning set forth in Section 6(a).
"Claxson" has the meaning set forth in the Preamble.
"Claxson Claims" has the meaning set forth in Section 5(d)(i).
"Claxson Indemnified Parties" has the meaning set forth in
Section 5(b).
"Claxson Released Parties" has the meaning set forth in
Section 5(d)(ii).
"Claxson Releasing Parties" has the meaning set forth in
Section 5(d)(i).
"Contract" means any agreement, lease, license, evidence of
indebtedness, indenture, security agreement or other contract (whether written
or oral).
"Co-Sale Agreement" has the meaning set forth in Section 2(d).
"Dispute" has the meaning set forth in Section 8(a).
"Encumbrances" has the meaning set forth in Section 2(d).
"Equity Interest" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of, rights to
acquire, or interests in (however designated) corporate stock, partnership
interests, limited liability company interests, trusts or any equivalents
thereof, including, without limitation, any security which is convertible into
or exercisable for such stock or interests.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Entity" means any (a) nation, state, county, city,
town, village, district or other jurisdiction of any nature, (b) federal,
state, provincial, local, county, municipal, foreign or other government, (c)
governmental or quasi-governmental authority of any nature (including any
governmental agency branch, department, official or entity and any court or
other tribunal), (d) multi-national organization or body, or (e) body
exercising, or entitled or purporting to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature.
13
"Indemnifiable Losses" has the meaning set forth in
Section 5(a)(ii).
"Indemnified Party" has the meaning set forth in Section 6(a).
"Indemnifying Party" has the meaning set forth in Section 6(a).
"Indemnity Notice" has the meaning set forth in Section 6(b).
"Investors' Rights Agreement" has the meaning set forth in
Section 2(d).
"Liabilities" means all liabilities, obligations or indebtedness
(whether absolute, accrued, contingent, fixed or otherwise, or whether due or
to become due).
"Lifford" has the meaning set forth in the Preamble.
"Losses" means any and all claims, Liabilities, obligations,
losses, fines, costs, proceedings or damages (whether absolute, accrued,
conditional or otherwise), including out-of-pocket expenses and reasonable
attorneys' and accountants' fees incurred in the investigation, defense or
settlement of any of the same or in asserting any rights hereunder.
"March Balance Sheet" means the consolidated balance sheet of PTVI
and its Subsidiaries as of March 31, 2002 attached as Exhibit D hereto.
"Notice" has the meaning set forth in Section 8(a).
"PEGI" has the meaning set forth in the Preamble.
"PEI" has the meaning set forth in the Preamble.
"PEII" has the meaning set forth in the Preamble.
"PEI Claims" has the meaning set forth in Section 5(d)(ii).
"PEI Indemnified Parties" has the meaning set forth in Section
5(a)(i).
"PEI Released Parties" has the meaning set forth in Section
5(d)(i).
"PEI Releasing Parties" has the meaning set forth in Section
5(d)(ii).
"Person" means an individual, general partnership, limited
partnership, limited liability company, corporation, trust, estate, real
estate investment trust, association or any other entity.
"Xxxxxxx.xxx" has the meaning set forth in the Recitals.
"Xxxxxxx.xxx Interest" has the meaning set forth in the Recitals.
"PTVI" has the meaning set forth in the Preamble.
14
"PTVI Interest" has the meaning set forth in the Recitals.
"PTVI Operating Agreement" means the Operating Agreement for PTVI,
dated as of August 31, 1999, by and between PEGI and VSI, as amended by the
First Amendment thereto, dated as of September 24, 1999, by and between PEGI
and VSI, and the Second Amendment to Operating Agreement, Release of Guaranty
and Consent to Transfer for PTVI, dated as of December 28, 2000, by and among
PEI, Playboy Enterprises International, Inc., a Delaware corporation ("PEII"),
VSI, Hampstead Management Company, Ltd., a British Virgin Islands corporation,
Carlton and Carlyle.
"PTVI Payment Obligation" means PTVI's obligation to make
additional library license and programming output payments pursuant to the
PTVI Program Supply Agreement to PEGI in the amount of $57.5 million through
September 2004.
"PTVI Program Supply Agreement" means the Program Supply
Agreement, dated as of August 31, 1999, by and among PEGI, PTVI and PTV U.S.,
LLC, a Delaware limited liability company.
"PTVI Trademark License Agreement" means the Trademark License
Agreement, dated as of August 31, 1999, by and among Playboy Enterprises
International, Inc. and PTVI.
"PTVLA" means Playboy TV - Latin America, LLC, a California
limited liability company.
"PTVLA Operating Agreement" means the Second Amended and Restated
Operating Agreement for PTVLA, effective as of April 1, 2002, by and between
PEGI and Lifford.
"Response" has the meaning set forth in Section 8(a).
"Restructuring" has the meaning set forth in the Recitals.
"Restructuring Agreements" means those agreements set forth on
Exhibit C hereto.
"Rules" has the meaning set forth in Section 8(b).
"September Balance Sheet" means the consolidated balance sheet of
PTVI and its Subsidiaries as of September 30, 2002, attached as Exhibit E
hereto.
"Subsidiary" means, with respect to any Person at any time, any
corporation, partnership, limited liability company or other entity, a
majority of the Equity Interests of which shall, at the time as of which any
determination is made, be owned, controlled or held by such Person either
directly or through Subsidiaries of such Person.
"Third Party Claim" has the meaning set forth in Section 6(a).
15
"Transfer" or "Transferred" have the meaning given them in the
PTVLA Operating Agreement.
"Venus Contribution Agreement" means the Venus Contribution
Agreement, dated as of December 23, 2002, by and between Claxson, Lifford,
PTVLA and PEGI.
"VSI" has the meaning set forth in the Preamble.
Section 11. Miscellaneous Provisions.
(a) Amendment and Modification. This Agreement may be amended,
modified and supplemented only by written agreement of each of the parties
hereto.
(b) Notices. All notices, requests, demands and other
communications required or permitted shall be made in writing by
hand-delivery, telecopier (with written confirmation) or air courier
guaranteeing overnight delivery:
if to PEI or PEII, to:
Playboy Enterprises, Inc.
Attention: General Counsel
000 Xxxxx Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Fax Number: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxxxxx
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Fax Number: (000) 000-0000
if to PEGI or PTVI, to:
Playboy Entertainment Group, Inc.
Attention: President
0000 Xxxxx Xxxxxx Xx.
Xxx Xxxxxxx, XX 00000
United States of America
Fax Number: (000) 000-0000
16
with a copy to:
Playboy Enterprises, Inc.
Attention: General Counsel
000 Xxxxx Xxxx Xxxxx Xxxxx
Xxxxxx Xxxxxx xx Xxxxxxx
Fax Number: (000) 000-0000
if to Claxson, Xxxxxxx, Xxxxxxx or Lifford, to:
Claxson Interactive Group Inc.
Attention: Chairman and Chief Executive Officer
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
United States of America
Fax Number: (000) 000-0000
With a copy to:
Claxson Interactive Group Inc.
Attention: General Counsel
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
United States of America
Fax Number: (000) 000-0000
with a copy to:
L. Xxxxx X'Xxxx
Xxxxxxxx Chance US LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx of America
Fax Number: (000) 000-0000
or to such other address or facsimile transmission number as the relevant
addressee may hereafter by notice hereunder substitute.
All such notices, requests, demands and other communications
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
(c) Post-Restructuring Cooperation. In case at any time
after the consummation of the Restructuring any further action is
necessary, proper or advisable to carry out the purposes of this Agreement
or any other Restructuring Agreement, as soon
17
as reasonably practicable, each party hereto shall take, or cause its
Subsidiaries or Affiliates and their respective proper officers or directors to
take, all such necessary, proper or advisable actions.
(d) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall fail to be
in effect only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement or of any such provision.
(e) Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but except as otherwise provided
for or permitted herein neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto
without the prior written consent of each of the other parties hereto.
(f) Governing Law. This Agreement and the legal relations among
the parties hereto shall be governed by and construed in accordance with the
laws of the State of New York.
(g) Jurisdiction and Venue. SUBJECT TO SECTION 8 HEREIN, EACH
OF PEI, PEII, PEGI, CLAXSON, XXXXXXX, XXXXXXX, LIFFORD AND PTVI HEREBY
IRREVOCABLY AGREE THAT ANY ACTION OR PROCEEDING TO COMPEL ARBITRATION, IN AID
OF ARBITRATION, OR FOR PRELIMINARY RELIEF IN AID OF ARBITRATION, TO PREVENT
IRREPARABLE HARM OR TO PRESERVE THE STATUS QUO PENDING THE APPOINTMENT OF AN
ARBITRAL TRIBUNAL, SHALL BE HEARD AND DETERMINED ONLY IN A CALIFORNIA STATE
COURT SITTING IN THE CITY OF LOS ANGELES OR, TO THE EXTENT PERMITTED BY LAW,
IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA
SITTING IN THE CITY OF LOS ANGELES (THE "CALIFORNIA COURTS"), AND EACH OF PEI,
PEII, PEGI, CLAXSON, XXXXXXX, XXXXXXX, LIFFORD AND PTVI HEREBY AGREE NOT TO
BRING AN ACTION IN ANY OTHER COURT, EXCEPT THAT AN ACTION TO ENFORCE A FINAL
ARBITRAL AWARD MAY BE ENFORCED IN ANY COURT HAVING JURISDICTION. EACH OF PEI,
PEII, PEGI, CLAXSON, XXXXXXX, XXXXXXX, LIFFORD AND PTVI HEREBY IRREVOCABLY
SUBMIT TO AND ACCEPT THE JURISDICTION OF THE CALIFORNIA COURTS, AND EACH OF
PEI, PEII, PEGI, CLAXSON, XXXXXXX, XXXXXXX, LIFFORD AND PTVI HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO, ANY
DEFENSE OR OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY DEFENSE OR OBJECTION
TO VENUE BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE MAINTENANCE OF ANY ACTION IN SUCH JURISDICTIONS. EACH OF
PEI, PEII, PEGI, CLAXSON, XXXXXXX, XXXXXXX, LIFFORD AND PTVI HEREBY
18
IRREVOCABLY AGREE THAT THE SUMMONS AND COMPLAINT OR ANY OTHER PROCESS IN ANY
ACTION MAY BE SERVED BY MAILING (USING CERTIFIED OR REGISTERED MAIL, POSTAGE
PREPAID RETURN RECEIPT REQUESTED) TO THE NOTICE ADDRESS FOR SUCH PARTY
SPECIFIED ABOVE OR BY HAND DELIVERY TO A PERSON OF SUITABLE AGE AND DISCRETION
AT SUCH ADDRESS.
(h) Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
(i) Headings. The headings of the Sections of this Agreement
are inserted for convenience only and shall not constitute a part hereof or
affect in any way the meaning or interpretation of this Agreement.
(j) Entire Agreement. This Agreement and the other
Restructuring Agreements set forth the entire agreement and understanding of
the parties hereto in respect of the subject matter contained herein and
therein, and supersede all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, relating to the subject matter hereof and thereof.
(k) Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by a party of any covenants or agreements
contained in this Agreement will cause the other party to sustain injury for
which it would not have an adequate remedy at law for money damages.
Therefore, each of the parties hereto agrees that in the event of any such
breach, the aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and preliminary and permanent
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity, and the parties hereto further agree
to waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such injunctive or other equitable relief.
(l) Third Parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or
corporation, other than the parties hereto and their successors or assigns,
any rights or remedies under or by reason of this Agreement.
19
EXECUTION COPY
IN WITNESS WHEREOF, PEI, PEII, PEGI, Claxson, Xxxxxxx,
Xxxxxxx, Lifford and PTVI have executed this Agreement effective as of the date
and year first above written.
PLAYBOY ENTERPRISES, INC.
By:______________________________
Name: ___________________________
Title: ____________________________
PLAYBOY ENTERPRISES
INTERNATIONAL, INC.
By:______________________________
Name: ___________________________
Title: __________________________
PLAYBOY ENTERTAINMENT
GROUP, INC.
By:______________________________
Name: ___________________________
Title: __________________________
CLAXSON INTERACTIVE GROUP INC.
By:______________________________
Name: ___________________________
Title: __________________________
CARLYLE INVESTMENTS LLC
By:______________________________
Name: ___________________________
Title: __________________________
CARLTON INVESTMENTS LLC
By:______________________________
Name: ___________________________
Title: __________________________
LIFFORD INTERNATIONAL CO. LTD. (BVI)
By:______________________________
Name: ___________________________
Title: __________________________
PLAYBOY TV INTERNATIONAL, LLC
By:______________________________
Name: ___________________________
Title: __________________________
Exhibit A
---------
TRANSFER OF MEMBERSHIP INTERESTS
Pursuant to that certain Transfer Agreement, dated as of December
23, 2002, by and among Playboy Enterprises, Inc., a Delaware corporation
("PEI"), Playboy Enterprises International, Inc., a Delaware corporation
("PEII"), Playboy Entertainment Group, Inc., a Delaware corporation ("PEGI"),
Claxson Interactive Group Inc., a British Virgin Islands corporation
("Claxson"), Carlyle Investments LLC, a Delaware limited liability company
("Carlyle"), Carlton Investments LLC, a Delaware limited liability company
("Carlton", and together with Carlyle, "Carlyle and Carlton") (each in its own
right and as a successor in interest to 50% of the assets of Victoria Springs
Investments Ltd., a British Virgin Islands corporation ("VSI")), Lifford
International Co. Ltd. (BVI), a British Virgin Islands corporation
("Lifford"), and Playboy TV International, LLC, a Delaware limited liability
company ("PTVI"), the undersigned hereby agree that for good and valuable
consideration, the sufficiency of which is hereby acknowledged, Carlyle and
Carlton hereby assign, transfer and convey their entire membership interest in
PTVI, representing 80.1% of the entire membership interests of PTVI, to PTVI,
which hereby accepts such assignment, transfer and conveyance.
IN WITNESS WHEREOF, the undersigned have duly executed and
delivered this Transfer of Membership Interests as of December 23, 2002.
CARLYLE INVESTMENTS LLC
By:____________________________
Name:
Title:
CARLTON INVESTMENTS LLC
By:____________________________
Name:
Title:
PLAYBOY TV INTERNATIONAL, LLC
By:____________________________
Name:
Title:
A-1
Exhibit B
---------
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby assign, transfer
and convey to Playboy Enterprises, Inc., a Delaware corporation, 728,112
Shares of Series A Preferred Stock of Xxxxxxx.xxx, Inc., a Delaware
corporation, represented by Certificate No. PA-1 (the "Stock"), standing in
the name of the undersigned on the books of said corporation and does hereby
irrevocably constitute and appoint _______________ as the undersigned's true
and lawful attorney, for it and in its name and stead, to assign, transfer and
convey all or any of the Stock, and for that purpose to make and execute all
necessary acts of assignment, transfer and conveyance thereof, and to
substitute one or more persons with like full power, hereby ratifying and
confirming all that said attorney or substitute or substitutes shall lawfully
do by virtue hereof.
Dated: _____________________
LIFFORD INTERNATIONAL CO. LTD. (BVI)
By: ___________________________
Name:
Title:
B-1
Exhibit C
---------
Schedule of Restructuring Agreement
-----------------------------------
[SCHEDULE OMITTED]
C-1
Exhibit D
---------
March Balance Sheet
-------------------
[CHART OMITTED]
D-1
Exhibit E
---------
September Balance Sheet
-----------------------
[CHART OMITTED]
E-1
