RizvilTraverse May 10, 2012 William Etkin Etkin & Company, Inc. 14 East 60th Street New York, NY 10022 Dear Mr. Etkin: 1999 Avenue of the Stars Suite 3030 Los Angeles, CA 90067 Tel: 310.786.7443 Fax 310.786.1792 The purpose of this letter agreement is to set forth to Etkin & Company, Inc. ("you"), as advisor to The TAO Group (together with its affiliates, collectively "TG" or the "Company"), the general terms and conditions upon which Rizvi Traverse Management LLC (("RT" or "we"), which holds a majority interest in Playboy Enterprises ("Playboy")), would be willing to recapitalize TG (the "Transaction") with Marc Packer, Rich Wolf, Noah Tepperberg, Jason Strauss (collectively the "Partners"). This letter is not intended to create a binding commitment, but demonstrates our mutual willingness to work together in good faith to consummate the Transaction contemplated hereby on the terms outlined herein. We are excited about this Transaction, as we are confident that an alliance between TG and Playboy would create an unparalleled combination between the leader in nightlife and one of the most storied and valuable brands worldwide that is the original pioneer of nightlife. We believe the collective strength of the assets and expertise of both ownership and management groups will provide synergies and incremental financial benefits to both parties resulting in significantly enhanced shareholder value. By way of background, Playboy was formed in 1953 and in its 59 years has become one of the most storied, iconic and recognized brands in the world. Its Rabbit Head Logo falls in the same rankings of global unaided awareness as the McDonald's Golden Arches and the Nike Swoosh. Playboy Magazine has monthly circulation of 15 million readers worldwide, Playboy.com receives 6 million monthly unique visitors and Playboy has over 7 million combined Facebook fans and Twitter followers. Today Playboy has four primary business lines: 1. Licensing. Pl