SECOND AMENDMENT TO PUBLISHING AGREEMENT
This Second Amendment, made as of this 27 day of July, 2005, between
SOBE LIFE, LLC ("Sobe") an Illinois limited liability company, and XXXXX WORLD
PUBLICATIONS LLC ("Xxxxx"), a New York limited liability company.
Statement of Facts
A. By Publishing Agreement dated as of May 28, 2004 the "Original
Publishing Agreement") between Sobe and Xxxxx, Xxxxx granted Sobe the right to
publish a magazine entitled Xxxxx World Magazine on the terms and provisions
provided in the Original Publishing Agreement. The Original Publishing Agreement
was modified by a First Amendment ("First Amendment") to Publishing Agreement,
dated as of May 28, 2004, between Sobe and Xxxxx (the Original Publishing
Agreement as modified by the First Amendment, collectively, the "Publishing
Agreement")
B. Sobe and Xxxxx now desire to further amend the Publishing Agreement as
hereinafter provided.
NOW, THEREFORE, in consideration of the mutual terms, covenants and
provisions hereinafter provided and other good and valuable consideration, the
receipt and sufficiency of which is herein acknowledged, Sobe and Xxxxx hereby
agree as follows:
1. Subsection h1 of Section I of the Publishing Agreement is deleted in its
entirety and the following is substituted in its place:
"In consideration of Xxxxx'x xxxxx to SOBE of the rights provided in this
Agreement, commencing with the fall (October) 2005 issue of the Magazine,
and for each issue of the Magazine thereafter, SOBE shall pay to Xxxxx an
amount (the "Xxxxx Fee") equal to seven and one half (7-1/2%) percent of
all "Net Profits" (as herein defined) with respect to the Magazine in each
year of publication. Such consideration shall be paid to Xxxxx on a per
issue basis, on account, (the "Publication Payment") within thirty (30)
days after the publication date of each such issue. Each Publication
Payment shall be accompanied by a profit and loss statement ("P&L
Statement") for SOBE covering the period from the last P&L Statement sent
to Xxxxx (or in the case of the first P&L Statement, from the date hereof)
to the last day of the calendar month in which the subject issue of the
Magazine is released and a statement, as part of the P&L Statement,
identifying the number of publications that Premiere Publishing Group,
Inc. ("Premiere") and all of its subsidiaries and affiliates are then
publishing. Each P&L Statement shall be certified as true and correct by
Xxxxxxx Xxxxxxxx ("Xxxxxxxx"). For the purposes of this Subsection h1, the
term "Net Profits" shall mean all gross revenues and other consideration,
regardless of the source, received by or on behalf of or due to SOBE with
respect to the Magazine, and all ancillary rights and interests related
thereto (excluding, however, amounts received by SOBE pursuant to
Subsection h3 of this Section 1) less the sum of:
1
(a) (1) accounting (not to exceed $10,000 per year); (2) legal (not to
exceed $10,000 per year); (3) xxxxxxxxxxxxx.xxx -- maintenance and upgrade;
and
(b) "Xxxxx World's Share" (as herein defined) of the following expenses of
operation of the publications identified in the applicable Publication
Statement (the "Premiere Expenses"): (1) payroll -- sales reps, publisher,
editors, art director, production team and office staff including health
benefits, payroll processing and payroll taxes; (2) printing -- paper and
distribution of the Magazine via trucking; (3) operating expenses -- rent,
messenger service, postage, Federal Express and insurance, (4) telephone
and fax; (5) photography (6) photo shoots; and (7) outside editors.
Within thirty (30) days of the end of each year of publication, Sobe shall
deliver to Xxxxx (i) a P&L Statement through the last day of such year,
certified as true and correct by Xxxxxxxx; and (ii) an annual
reconciliation (the "Reconciliation") of all P&L Statements for such year
certified as true and correct by Sobe's certified public accountants. Based
on the Reconciliation, there shall be an adjustment made between Sobe and
Xxxxx with respect to the Xxxxx Fee for the subject year. "Xxxxx World's
Share" shall mean its proportionate share of the Premiere Expenses
determined by dividing the number of all publications identified in the
applicable P&L Statement into the Premiere Expenses. By way of
illustration, if at the time of Reconciliation there are twenty (20)
Premiere publications, then Xxxxx World's Share shall mean five (5%)
percent."
2. Sobe and Xxxxx hereby agree that, in satisfaction of all consideration
due to Xxxxx under the Publishing Agreement with respect to all issues of the
Magazine to and including the July 2005 issue, Sobe shall pay to Xxxxx, on or
before July 30, 2005, the amount of $200,000.00.
3. The provisions of Section II (Termination; Default) of the Original
Publishing Agreement are hereby modified by adding the following as subsection C
thereof:
"if the License Agreement between Sobe and Xxxxx Xxxxx XX dated as
of May 28, 2004, an affiliate of Xxxxx, is terminated for any
reason."
4. SOBE acknowledges that all obligations to SOBE's lender, identified in
Subparagraph B(ii) of Section II of the Publishing Agreement, have been
satisfied in full and, therefore, any reference in the Publishing Agreement to
such lender shall be deemed deleted in its entirety.
5. The capitalized terms not defined herein shall have the meanings
ascribed to them in the Publishing Agreement.
IN WITNESS WHEREOF, Sobe and Xxxxx, intending to be legally bound, have
executed this Agreement as of the day and year above written.
SOBE LIFE, LLC
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxx, Managing Member
XXXXX WORLD PUBLICATIONS LLC
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Managing Member
