Renewal Proposal Addendum I - Communications Data Services Inc. and Playboy Enterprises International Inc.
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Renewal Proposal Addendum I
Playboy Enterprises International, Inc.
March 9, 2006
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CDS is pleased to present Playboy Enterprises International, Inc. with our
revised contract renewal proposal extending the long-standing relationship our
two companies have enjoyed since 1987. This document supersedes our previously
submitted proposals dated February 2, 2006 and February 16, 2006 in their
entirety. The contents of this document are confidential and intended for the
sole use of Playboy Enterprises International, Inc. in evaluating the proposed
services.
SINGLE CONTRACT
Playboy Book of Lingerie, Playboy Book of Lingerie Digital and Playboy Digital
will be merged into the current Playboy magazine contract, resulting in a single
contract for all titles. Annualized savings will be $*****
MONTHLY DISCOUNT
CDS will provide Playboy Enterprises International, Inc. a monthly discount of
$***** provided that Playboy Enterprises' total active subscription circulation
size is ***** (all magazines combined). In the event the total active
subscription file size decreases below *****, a percentage equal to the decrease
below ***** will be used to reduce the monthly discount. Annualized savings will
be $*****
SOURCE DOCUMENT STORAGE
***** Annualized savings will be $*****
TERM AND CONDITIONS
The term of our Agreement will be extended five years creating an expire of June
30, 2011.
Effective date for the new contract will be July 1, 2006.
All other services and fees not expressly addressed in this proposal will remain
as presently defined and stated in our current Subscription Fulfillment
Agreement.
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Communications Data Services, Inc.
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TOTAL ANNUAL SAVINGS
Total value of the above items will deliver to Playboy Enterprises
International, Inc. $*****in annual savings.
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Communications Data Services, Inc.
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SEVENTH AMENDMENT dated as of July 1, 2006 by and between COMMUNICATIONS
DATA SERVICES, INC., an Iowa corporation ("CDS"), with its principal office at
1901 Bell Avenue, Des Moines, Iowa 50315-1099, and PLAYBOY ENTERPRISES
INTERNATIONAL, INC. (formerly PLAYBOY ENTERPRISES, INC.), a Delaware corporation
(the "Publisher"), with its principal office at 680 North Lake Shore Drive,
Chicago, Illinois 60611.
RECITALS
WHEREAS, CDS and the Publisher entered into a Subscription Fulfillment
Agreement dated as of July 1, 1987, as amended by an Amendatory Agreement dated
as of September 1, 1987; a Letter Agreement for Electronic Presort dated as of
June 1, 1988; a Second Amendment dated as of July 1, 1990; a Letter Agreement
for CDS's Destination Entry Program dated as of June 1, 1995; a Third Amendment
dated as of July 1, 1996; a Letter Agreement for CDSxpress Moves dated as of
July 1, 1996; a Fourth Amendment dated as of June 1, 1997; a Letter Agreement
for Internet Services dated as of July 7, 1997; a Special Project (Letter)
Agreement dated as of October 1, 1999; a Fifth Amendment dated as of July 1,
2001; a Letter Agreement for E-mail Fulfillment Services dated as of October 1,
2002; and a Sixth Amendment dated as of April 1, 2003 (collectively, the
"Agreement"); and
WHEREAS, the parties now desire to further amend the Agreement to update
the listing of Magazines, extend the Term of the Agreement, and make other
changes as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, it is agreed by and between the parties hereto as follows:
1. The first recital of the Agreement is hereby amended and restated in
its entirety to read as follows:
"WHEREAS, CDS is engaged in the business of providing subscription
fulfillment and other services (individually and collectively, the
"Services:") and the Publisher publishes the following magazine(s) (the
"Magazine(s)")
Name of Magazine Frequency per Year
Playboy 12
Playboy Digital 12
Playboy Special Editions Lingerie 6
Playboy Special Editions Lingerie Digital 6"
2. The headings of column 1 and column 2 of Section 2.1(a) of the
Agreement are hereby amended to read as follows:
"Aggregate Number of Labels
per Issue Annual Basic Service Charge
for all Magazines Combined per Subscription per Magazine"
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3. Section 2.1(b) of the Agreement (billing mechanism paragraph), as
previously amended, is hereby amended to add the following new sentence at the
end of the paragraph:
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"To determine 'Aggregate Number of Labels per Issue for All Magazines
Combined' in those months in which all Magazines do not publish an issue
or publish more than one issue, the label counts for the last closed issue
(which would normally include mainfile pull and supplements for the last
closed issue) will be used."
4. Section 2.1 of the Agreement, as previously amended, is hereby amended
to add a new paragraph (e) to read as follows:
"(e) In the event Publisher disposes of a Magazine and pursuant to Section
IX of this Agreement assigns its interest in this Agreement for such
Magazine to the transferee, the schedule of circulation levels and
corresponding Annual Basic Service Charge rates set forth in 2.1(a) above
shall apply separately and individually to Publisher and the transferee."
5. Section 2.17 of the Agreement, as previously amended, is hereby amended
to add the following sentence at the end of the paragraph to read as follows:
"Notwithstanding the foregoing, the Change in Charges provisions shall not
apply to Section 2.18."
6. Section II of the Agreement, as previously amended, is hereby amended
to add a new Section 2.18 to read as follows:
"2.18 Monthly Discount
(a) The following shall apply from July 1, 2006 through June
30, 2011: Each month that the Aggregate Number of Labels per Issue for All
Magazines Combined, using the last closed issue for the Magazines
fulfilled at CDS as described in Section 2.1(b) as amended herein, is at
least *****, a monthly discount of $***** shall apply, such discount to be
issued as a credit to the Publisher on each month's invoice.
(b) If the Aggregate Number of Labels per Issue for All
Magazines Combined as described in paragraph (a) above decreases below
*****, the percentage of the decrease in the active file size will be
calculated and the Monthly Discount amount will be reduced by the same
percentage. (Example: *****.) If the Aggregate Number of Labels per Issue
for All Magazines Combined is equal to or over ***** in any month, then
the discount for that month will be $*****."
(c) The monthly discount amount will be applied to the
Magazines' invoices as instructed by Publisher."
7. Section II of the Agreement, as previously amended, is hereby amended
to add a new Section 2.19 to read as follows:
"2.19 Source Document Storage.
CDS will store source documents for orders, payments, and renewals
at no additional charge to Publisher."
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8. Section 5.1 of the Agreement, as previously amended, is hereby amended
and restated in its entirety to read as follows:
"5.1 Term.
The Term of this Agreement shall continue until June 30, 2011, plus
a period of time equal to the period(s) of time, if any, during which
Services were not rendered hereunder due to an Event of Force Majeure
affecting CDS or the Publisher. When used in this Agreement, the term
"year" shall mean a consecutive twelve (12) month period."
9. Except as expressly amended hereby, the Agreement shall remain in full
force and effect in accordance with its terms.
10. This Seventh Amendment shall become effective as of the day and year
first written
above.
IN WITNESS WHEREOF, the parties have executed this Seventh Amendment as of
the day and year first above written.
COMMUNICATIONS DATA PLAYBOY ENTERPRISES
SERVICES, INC. INTERNATIONAL, INC.
by: /s/ Dennis Luther by: /s/ Phyllis Rotunno
(signature) (signature)
Dennis Luther Phyllis Rotunno
(print or type) (print or type)
Title: Vice President Title: VP Subscription Circulation
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