EXHIBIT 10.15
AMENDMENT TO DISTRIBUTION AGREEMENT
WHEREAS, Xxxxxx Circulation Company ("Xxxxxx") and Publisher (as
hereinafter defined) entered into that certain Distribution Agreement, dated
September 19, 1977 (as thereafter amended, modified and supplemented, the
"Distribution Agreement"); and
WHEREAS, on December 17, 1992, Xxxxxx and General Media Publishing Group,
Inc. entered into a letter agreement (the "Letter Agreement") relating to, among
other things, the payment of interest by Publisher on certain amounts due under
the Distribution Agreement; and
WHEREAS, on February 28, 1995, Xxxxxx and Omni Publications International,
Ltd., Longevity International, Ltd. and General Media International, Inc.
("GMII") entered into an Overadvance Agreement (the "Overadvance Agreement");
and
WHEREAS, Xxxxxx and Publisher intend, among other things, to (i) reaffirm
and restate certain terms and conditions of the Distribution Agreement, the
Overadvance Agreement and the Letter Agreement, (ii) extend the term of the
Distribution Agreement and (iii) enact certain additional modifications to the
terms and conditions of the Distribution Agreement, and the Overadvance
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Parties. The first unnumbered paragraph of the Distribution
Agreement is hereby amended in its entirety to read as follows:
Between XXXXXX CIRCULATION COMPANY, 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter
called "Xxxxxx"); and PENTHOUSE INTERNATIONAL, LTD., FORUM
INTERNATIONAL, LTD., FOUR XXXXXXX PUBLISHING, LTD., PENTHOUSE LETTERS,
LTD., OMNI PUBLICATIONS INTERNATIONAL, LTD., VARIATIONS INTERNATIONAL,
LTD., GIRLS OF PENTHOUSE PUBLICATIONS, INC., LONGEVITY INTERNATIONAL,
LTD., HOT TALK PUBLICATIONS, LTD., STOCK CAR RACING PUBLISHING, LTD;
SUPER STOCK AND DRAG ILLUSTRATED PUBLISHING, LTD. and OPEN WHEEL
PUBLISHING, LTD., each having an office at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000-0000 (collectively, "Publisher").
2. The Distribution Agreement. The terms and conditions of the
Distribution Agreement, as amended herein, shall be in full force and effect for
the territories of the United States of America and Canada. To the extent that
any provision of the Distribution Agreement and the Overadvance Agreement shall
be in conflict with one or more of the provisions of the Amendments to those
agreements (the "Amendments"), the provision(s) of these Amendments shall
control in all respects.
3. The Overadvance and Letter Agreements. The terms and conditions
of the Overadvance Agreement and the Letter Agreement shall remain in full force
and effect, with the following modifications: the Overadvance Agreement shall be
hereby modified and amended by the deletion of the following language: "or (iii)
a sale of the stock or the titles of OMNI and/or LONGEVITY." which language
appears on the second page of the Letter Agreement at the end of the third full
paragraph in the letter. In addition, the word "or" shall be inserted between
the phrases "(i) a public offering or private sale of stock, "or" (ii) notice of
termination of the Distribution Agreement..."
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4. Term; Renewal. (a) The term of the Distribution Agreement shall be
for a period of ten (10) years from the date hereof, covering all issues of the
Publications (as hereinafter defined) with "On-Sale Dates" within such period.
(b) The Distribution Agreement shall be automatically renewable for
additional one (1) year terms, unless advance written notice of termination is
given by either party to the other at least one (1) year prior to the
commencement of the following renewable term.
5. Overadvance. Upon execution of this Amendment, Xxxxxx shall advance to
Publisher the sum of $3.0 million, as an overadvance (the "Overadvance")
pursuant to section 11 of the Distribution Agreement, against all amounts due or
which may become due, to Publisher from Xxxxxx under the terms of the
Distribution Agreement. The obligation of Publisher to repay the Overadvance
shall be reduced and forgiven over the term of the Distribution Agreement (as
amended hereby) at a rate of $300,000 per year for a period of ten (10) years
from the date hereof. Upon the termination of the Distribution Agreement for any
reason at any time prior to Nov. 8, 2005, or the occurrence of an event of
default that entitles Xxxxxx to terminate the Distribution Agreement, any
portion(s) of the Overadvance for which Publisher's obligation to repay has not
been reduced and forgiven shall be deemed to be an overpayment within the
meaning of Section 11 of the Distribution Agreement, and Xxxxxx may exercise any
and all rights set forth in Section 11 of the Distribution Agreement against
Publisher, including rights of offset, recoupment and deduction, for all such
portion(s) of the Overadvance as of the date of such
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termination. Should OMNI or LONGEVITY Magazine be closed or sold during the term
of this Agreement, the Agreement shall terminate as it pertains to those
magazines without any requirement of partial or complete repayment by Publisher.
6. Publications. Xxxxxx is the exclusive distributor in the
Untied States of America and Canada of all publications published by Publisher
and shall be the exclusive distributor for Publications which may be hereafter
acquired or published by Publisher, and which are placed on sale during the term
of the Distribution Agreement (collectively, the "Publications").
7. Competing Periodicals. Section 18 of the Distribution
Agreement shall be, and hereby is, omitted and eliminated in its entirety.
8. Cure Period. Notwithstanding anything to the contrary
contained in the Distribution Agreement, upon the occurrence and continuance of
an event of default under the Distribution Agreement by Xxxxxx for a period of
one hundred eighty (180) days, Publisher shall have the right (but not the
obligation) to terminate the Distribution Agreement upon thirty (30) days
written notice to Xxxxxx; provided, however, that if Publisher fails to give
written notice to Xxxxxx of the occurrence of an event of default within ninety
(90) days of such occurrence, such event of default shall be deemed waived and
Publisher shall have no right to terminate the Distribution Agreement as a
result of such event of default.
9. Sale of Publications. (a) If Publisher wishes to sell,
assign, transfer or otherwise dispose of its interest in any Publication(s) to
any third party at any time during the term of the Distribution Agreement other
than OMNI or LONGEVITY magazines, it shall comply with the terms and provisions
of this paragraph 9.
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(b) It shall be a condition to any such disposition that such
third party shall enter into a new distribution agreement with Xxxxxx for such
Publication(s) (each, a "New Agreement"), and Xxxxxx agrees that it will enter
into such New Agreement with such third party, which such New Agreement shall
be on the same terms and conditions as the Distribution Agreement, and shall
expire on the same date as the Distribution Agreement.
10. New Entities. Any new entity that is now or hereafter formed,
purchased or otherwise acquired by GMII, General Media, Inc. or any of their
respective subsidiaries or affiliates for the purpose of publishing one or more
Publications shall be deemed to be a Publisher within the meaning of the
Distribution Agreement, as amended hereby, and shall be bound by the terms and
conditions thereof and hereof.
11. Overseas Distribution. (a) Publisher represents and warrants that
it has the right to terminate its distribution agreement (the "Worldwide
Agreement") with Worldwide Media Service, Inc. ("Worldwide"), which agreement
provides for the overseas distribution of certain Publications. At the option of
Xxxxxx, which option may be exercised in its sole and absolute discretion on or
prior to December 1, 1998, Xxxxxx shall have the right to direct Publisher to
give to Worlwide, on or prior to December 31, 1998, notice of the termination of
the Worldwide Agreement.
(b) Subsequent to the termination of the Worldwide Agreement
pursuant to this paragraph 11, Xxxxxx shall distribute the Publications covered
by the Worldwide Agreement pursuant to the terms of the Distribution Agreement.
Subsequent to the termination of the Worldwide Agreement for any other reason,
Xxxxxx shall have the option, in its sole and absolute
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discretion, to distribute the Publications covered by the Worldwide Agreement
pursuant to the terms of the Distribution Agreement.
(c) Publisher represents and warrants that, in the event of
Publisher's termination of the Worldwide Agreement, a cancellation (or other
similar) payment shall be due and owing to Worldwide. If Xxxxxx shall exercise
its option to distribute the Publications covered by the Worldwide Agreement,
Xxxxxx hereby agrees to reimburse Publisher for any such cancellation (or other
similar) payment made by Publisher as a result of a termination of the
Worldwide Agreement, in an amount not to exceed $500,000, upon the occurrence of
both of the following events: (i) evidence of the need for such cancellation
payment and the amount thereof, reasonably satisfactory to Xxxxxx and (ii)
evidence of payment by Publisher of such cancellation (or other similar)
payment.
(d) Further, if Xxxxxx shall exercise its option to distribute
publications covered by the Worldwide Agreement, Xxxxxx guarantees that it will
abide by Publisher's galley delineating allotments to foreign customers chosen
by Publisher (provided such customers are not credit risks) of (i) the
following individual magazines -- PENTHOUSE, OMNI and LONGEVITY, and (ii) the
following groups of magazines aggregated -- adult sophisticate magazines other
than PENTHOUSE and automotive magazines. Publisher will notify Xxxxxx within
ninety days of any failure to meet the guarantee.
(e) The parties hereto agree that, upon a breach of Publisher's
obligation to give notice to Worldwide pursuant to paragraph 11(a) above,
Publisher shall pay to Xxxxxx or Xxxxxx may set off or recoup from any advances
due Publisher under paragraph 11 of the
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Distribution Agreement the sum of $500,000 as liquidated damages and not a
penalty in connection with such breach.
(f) Publisher represents and warrants that it presently has a
distribution agreement with a licensee for the distribution of certain
Publications in Australia and New Zealand. The parties hereto agree that, in
the event such distribution agreement is terminated and is not replaced by a
similar distribution agreement with such licensee or another licensee, Xxxxxx
shall have the option to distribute such Publications in Australia and New
Zealand pursuant to the terms of the Distribution Agreement.
12. No Conflicts. Publisher hereby represents and warrants that the
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execution, delivery and performance of this Amendment with not violate any
provisions of any agreement or other contractual obligation of Publisher.
13. Entire Agreement; Binding Effect. The Distribution Agreement and
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the Overadvance Agreement, as amended by these Amendments, and the Letter
Agreement set forth the entire understanding of the parties with respect to the
distribution of the Publications and shall be binding on the parties, their
respective successors and assigns; and, in particular, the Distribution
Agreement shall be binding upon any transferors, successors or assigns of
Publisher who shall publish any of the Publications, it being the intent of the
parties that the Distribution Agreement run with and apply to all Publications,
except as otherwise provided herein, with respect to OMNI and LONGEVITY
magazines.
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IN WITNESS WHEREOF, the parties hereto execute this agreement the 8 day of
Nov., 1995.
XXXXXX CIRCULATION COMPANY
By: /s/ Xxxxxx X. Xxxxx, Chairman & CEO
_________________________________________
Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
LONGEVITY INTERNATIONAL, LTD.
PENTHOUSE INTERNATIONAL, LTD.
FORUM INTERNATIONAL, LTD.
FOUR XXXXXXX PUBLISHING, LTD.
VARIATIONS INTERNATIONAL, LTD.
GIRLS OF PENTHOUSE PUBLICATIONS, INC.
SUPER STOCK AND DRAG ILLUSTRATED
PUBLISHING, LTD.
OPEN WHEEL PUBLISHING, LTD.
PENTHOUSE LETTERS, LTD.
OMNI PUBLICATIONS INTERNATIONAL,
LTD.
HOT TALK PUBLICATIONS, LTD.
STOCK CAR RACING PUBLISHING, LTD.
THE GENERAL MEDIA GROUP, INC.
GENERAL MEDIA INTERNATIONAL, INC.
GENERAL MEDIA GROUP SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
_________________________________________
Xxxxxx X. Xxxxxxxx
Chairman, Group Publisher and
Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxx
_________________________________________
Xxxxxxx X. Xxxxxxx
President, Publishing Group
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