EXHIBIT E
January 8, 1998
VIA FACSIMILE
000-000-0000
B1 Investments LLC
Balfour Investors Incorporated
Veritov Trade, Inc.
c/o Balfour Investors Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxx Xxxxxxxx
Re: Discovery Zone, Inc. Class 6 Common Stock and Warrants
Gentlemen:
Reference is made to (i) that certain Amended and Restated Operating
Agreement of Birch Holdings LLC ("Birch"), dated as of July 17, 1996, among
Birch Acquisition LLC ("SM Acquisition"), B1 Investments LLC ("BF Acquisition")
and the individual named therein as the withdrawing member (the "Agreement"),
and (ii) that certain letter agreement (the "Letter Agreement"), also dated July
17, 1996, between SM Acquisition, BF Acquisition and Veritov, Trade Inc.
("Veritov"). Capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed thereto in the Agreement of the Letter
Agreement, as the case may be.
The purpose of this letter is to confirm our understanding with
respect to the following matters:
1. Upon issuance of the shares DZ Common Stock and General
Warrants in accordance with the letter of instruction (the
"Letter of Instruction") dated December 23, 1997 to Mr. Xxxxxx
Xxxxxx of DZ (a copy of which is attached hereto as Exhibit
A), such issuances by DZ shall be in full satisfaction of the
obligations of the Company, SM Acquisition and their
respective Affiliates to distribute or transfer to BF
Acquisition and its Affiliates (including each of you) any
warrants to purchase DZ Common Stock. In addition, such
issuances shall be deemed to constitute a
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BF Acquisition Satisfaction Event, with the effects set forth
in paragraph 3(i) of the Letter Agreement.
2. The provisions of Article 8 of the Agreement shall apply,
mutatis mutandis, to the 213,983 and 37,757 shares of DZ
Common Stock held by Balfour in Veritov and Birch,
respectively, to be issued pursuant to the Letter of
Instruction, and each of you agrees to be bound by such
provisions to the same extent as BF Acquisition.
If the foregoing correctly sets forth our agreement with respect to
the subject matter hereof, please sign the attached copy of this letter, which
shall serve as our agreement, and return the same to me.
Very truly yours,
BIRCH ACQUISITION LLC
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Partner
Acknowledged and Agreed:
B1 INVESTMENTS LLC
By: /s/ Xxx Xxxxxxxxx
------------------------------
Name: Xxx Xxxxxxxxx
Title: Member
BALFOUR INVESTORS INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman of the Board
3
VERITOV TRADE, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
