Printing Contract - Quebecor World Inc. and General Media Communications Inc.
PRINTING CONTRACT BETWEEN: Quebecor World, Inc. -------- "The Printer" AND: General Media Communications, Inc. ---- "The Customer" This contract is dated as of October 12, 2001 and shall become effective on September 1, 2001, and sets forth the terms and conditions by which Quebecor World, Inc. a corporation of Quebec, Canada, having its head office at 612 St. Jacques Street, Montreal Quebec, H3C 4M8 (hereinafter referred to as the "Printer"), shall supply the products and services specified hereinafter to General Media Communications Inc., a corporation of the State of New York, U.S.A., having its head office at 11 Penn Plaza, 12th Floor, New York, NY 10001, USA (hereinafter referred to as the "Customer"). THE PARTIES HERETO AGREE AS FOLLOWS ----------------------------------- TERMS AND CONDITIONS OF CONTRACT -------------------------------- 1.0 WORK UNDERTAKEN --------------- 1.1 Customer retains the services of the Printer to print the following publications: The U.S. Edition of Penthouse Magazine, Girls of Penthouse and Penthouse Letters (each a "Magazine"; collectively the "Magazines"), commencing with the December, 2001, editions. Printer hereby undertakes to perform all services necessary to print, bind, package and ship the Magazines on a monthly basis in accordance with the Customer's specifications as communicated in writing from time to time and as may be set forth in the schedules to this Contract. Such services shall include, but not be limited to a. Preparation, CTP plate making, offset make ready, offset printing, and the furnishing of ink. b. Binding and trimming. c. Newsstand bundling. d. Delivering F.O.B. Printer's dock the copies of the Magazines to be shipped by truck or rail car. Printer shall arrange, on behalf of Customer, for contract carrier to transport the Magazines from dock, if requested by Customer, and Customer shall take payment for all such charges directly to the carrier. 1.1.1 Notwithstanding any other actual or apparently conflicting language in this Contract a. Printer agrees to produce high quality, commercially acceptable Magazines in line with the standard of quality hereinafter defined, unless defective original materials are furnished or a violation of process limitations is involved. Without limitation of the obligation of the Printer to take all its usual precaution in relation to the curing of any such defect, Printer shall use its best efforts to inform Customer of such defects in time for correction and consult with Customer on the solution to the problem of such defective materials. 1 <PAGE> b. Countersigned, bound copies of Magazine acceptable to PUBLISHER and Printer will be retained by both Customer and Printer for use as the standard of quality. 1.2 This contract shall apply exclusively to the printed products mentioned in Section 1.1 hereof. Any other products published by the Customer, which are not included herein, shall be negotiated between the Printer and the Customer. 1.3 Customer will supply the paper to print the Magazines in accordance with the paper usage charts, which are attached as Schedules C and H. Printer shall furnish to Customer no later than the 15th of each month a written accounting of all paper received from Customer and consumed during the previous month and all of the remaining stocks. Printer shall take a physical inventory every six months during the term of this Contract and shall promptly supply the results in writing to Customer, which may audit such inventory report at any time upon four (4) business days' notice to Printer. Should the paper consumption exceed that set forth in Schedules C and H, Printer shall upon completion of such accounting, at Printer's option, reimburse Customer for such excess either in kind or at the same price per pound, at a rate equal to the average cost of said paper during the accounting period. In the event of a net under consumption, Customer agrees to pay the Printer an amount equal to one-half of the cost of the paper so under consumed, computed at the same rates. The value of under consumption, if any, of one kind or weight of the paper shall be used as a credit against over consumption, if any, of other kinds/weights of paper. Printer shall store up to three months' paper requirements for the printing of the three (3) Magazines on its premises, at no cost to Customer. 1.4 Printer agrees to produce and maintain high quality standards of reproduction consistent with industry SWOP standards. Printer shall bear the cost (including paper and ink) of make-goods caused by any error or omission attributable to Printer. Failure to correct errors within sixty (60) days after receipt of written notification, shall be considered as breach of the terms and conditions of this contract and will entitle Customer to cancel this contract on thirty (30) days' notice. 2.0 PRICE AND PAYMENT ----------------- 2.1 The prices set forth in Schedules A, B, D, E, F and G include CTP plate making, printing, binding, and mail preparation work and all other services necessary to produce print, bind, package and ship the three (3) Magazines as described in section 1.1. 2.2 Customer shall be invoiced based on the number of copies ordered and delivered as described in Section 3.1. 2.3 The price structure in Schedules A, B, D, E, F and G shall be effective on September 1, 2001 and for a period of one (1) year thereafter, except for the changes described in section 2.4. 2.4 Should there be an increase or reduction in the price of paper, ink, labor and manufacturing, Printer may increase or reduce the prices as follows: 2.4.1 The increase in the Customer's costs shall be no greater than the actual increase in the cost incurred by Printer. 2.4.2 Customer shall be notified fifteen (15) days in advance. 2.4.3 Printer shall provide all supporting documentation with the notification provided for in section 2.4.2 above. 3.0 TERMS AND CONDITIONS -------------------- 2 <PAGE> 3.1 The term of this agreement shall be five (5) years, unless sooner terminated as provided below. This agreement shall be effective beginning September 1, 2001 (effective date) and expire August 31, 2006. 3.2 Customer shall issue a purchase order for each issue including the print run, the nature of the work, the final quantities and provide shipping documentation. Customer shall issue this purchase order to the Printer no later than fifteen (15) days prior to the scheduled press run start as agreed on by the parties. 3.3 Printer shall submit one invoice for each issue. The invoice shall specify in detail satisfactory to Customer the services performed and the prices charged. The terms are net thirty (30) days. The date of the invoice will be the last day of the shipping cycle. The last day of shipping shall be five (5) working days after the ship date of the attached production schedules to Newsstand Distributors. 3.3A (a) The production schedule for the year 2001-02 is contained in Schedule I, attached hereto and made part hereof. The production schedule may be amended or established for subsequent years as mutually agreed upon by both parties. (b) Customer agrees to provide any Customer-furnished material in accordance with the schedule mutually agreed upon by the parties. Where the Customer does not adhere to the production schedule, final delivery date(s) and/or prices will be subject to re-negotiation. 3.4 Production schedules shall be prepared and approved by both parties. 3.5 Printer will store 5,000 finished copies of each of the three (3) Magazines for ninety (90) days following the on-sale date at no additional cost to Customer; thereafter, such copies shall be shipped at Customer's direction and expense to a facility designated by Customer. Failing Customer's instructions the Printer may destroy such copies but will give Customer fifteen (15) days' notice before doing so. 3.6 In furtherance and not in derogation of Printer's obligation of due care toward Customer's property, Printer shall cover by insurance the values added by Printer in the form of raw materials, labour, and overhead, against fire, extended coverage perils, vandalism, malicious mischief and sprinkler leakage. Customer will similarly insure its property while on Printer's premises. Customer will also insure its paper throughout the printing process (except waste paper). All waste paper shall become Printer's property. 3.7 Risk of loss or damage to Customer and title to the finished work shall pass to the Customer upon delivery to a common carrier F.O.B. Printer's shipping dock, or delivery into storage, whichever first occurs. 3.8 Neither the three (3) Magazines nor any material furnished by the Customer shall be subject to any lien(s) of Printer or Printer's creditors of any kind or nature whatsoever, and Printer hereby waives any rights under statute or otherwise to assert any liens on or otherwise distrain Customer's property, work in progress or the finished product. Printer will take all steps prescribed by law to protect Customer's interests as they may appear upon any levy or attempted levy by Printer's creditors on the Customer's property or any finished work or work in progress; Printer shall expeditiously seek to remove any such lien and in any event shall hold Customer entirely harmless therefrom. 3.9 Printer shall use its best efforts to keep confidential the contents of each issue of the three (3) Magazines prior to general public distribution. 3.10 Customer may terminate this agreement as to any Magazine effective on written notice if it discontinues publication of such Magazine. 3 <PAGE> 3.11 Customer shall be entitled to terminate this Agreement, notwithstanding the provisions of paragraph 3.1 above: 3.11.1 Upon written notice, if Printer consistently falls below the standard of quality required by paragraph 1.1 above as provided in paragraph 1.4 above; and subsequent to 1.1.1B. 3.11.2 Upon the happening of an event of force majeure which prevents or substantially hinders Printer's full performance hereunder (force majeure being defined as an event the non-occurrence of which is relied upon by both parties for the performance of the contract and includes but is not limited to: strikes, war, fire, flood, Acts of God and any other unforeseen events of the same or a different nature not necessarily within the control of either party), Printer shall have the right to remove the work (as to any or all Magazines) to another facility ("Printer's Facility") provided that within three business days of the occurrence of the event of force majeure Printer provides assurances satisfactory to Customer that the work can be performed at Printer's Facility to the same quality standards and upon the same price terms as herein; failing which, Customer shall have the right to remove the work to another printer of its own choosing for the duration of the event of force majeure. If the event of force majeure continues more than forty-five (45) days, and (i) Printer has removed the work to Printer's Facility as provided above, then if Customer is satisfied with the work of Printer's Facility, Printer has the option of continuing this Agreement in full force and effect and upon all terms and conditions hereof, as to all Magazines so removed, except that the work be performed at Printer's Facility; (ii) Customer has removed the work to a printer of its own choice as provided above, then Customer may cancel this Agreement as to any or all Magazines so removed. 3.11.3 As specified in paragraph 5.2 below. 3.12 Either party shall have the right to terminate this agreement for a material breach which remains uncured more than thirty (30) days after written notice and demand to cure is received specifying the breach; such termination shall be by written notice effective thirty (30) days after receipt; provided always that if in Customer's reasonable business judgement Printer's breach substantially impairs Customer's ability to distribute its Magazines on time Customer shall have the right immediately to move the work elsewhere as to any or all Magazines. In any event, upon termination for any cause whatsoever Printer will cooperate fully with Customer in the transition process to a new Printer. 3.13 In the event either of the parties should become insolvent or bankrupt, the other party shall be entitled to terminate this Contract on no less than thirty (30) days' written notice to the other party or to its estate or successor. 3.14 Subject to the remainder of this agreement, upon termination, Customer shall not be liable for any of the Printer's costs: (a) incurred or ordered after notice; (b) which can be cancelled at no loss to the Printer, or (c) in excess of the out-of-pocket loss to the Printer of any unused items sold to other customers or third parties or returned to suppliers. In any event, Printer's costs will only include normal manufacturing expenses. 3.15 Upon the sale of the Magazines, or any one of them, Customer will attempt to have the purchaser continue this Agreement for any unexpired term. 4.0 LIABILITY FOR CONTENT --------------------- 4 <PAGE> 4.1 Customer will indemnify and hold Printer harmless from and against any claims, demands, suits, actions, costs, loss or judgements, including reasonable attorneys' fees, for libel, defamation of character, copyright or trademark infringement, invasion of right of privacy or publicity, patent infringement or invasion of any other right, by any person, firm or entity against the Printer not attributable to Printer's fault and arising out of any material delivered by the Customer or supplied on its behalf to Printer and used by Printer according to Customer's instructions in producing the three (3) Magazines, provided that such indemnity shall not include consequential or exemplary damages or lost profits. 4.2 In like manner Printer shall indemnify and hold Customer harmless from and against any claims, demands, suits, actions, costs, loss or judgements, including reasonable attorneys' fees, for libel, defamation of character, copyright or trademark infringement, invasion of right of privacy or publicity, patent infringement or invasion of any other right, by any person, firm or entity against Customer arising out of any act or omission of Printer in performing its services hereunder, provided, however that such indemnity shall not exceed the value of the contract and shall not include liability for consequential or exemplary damages or lost profits. 4.3 No indemnification promised in sections 4.1 or 4.2 above shall be effective unless the indemnified party shall have given prompt notice of any indemnifiable claim to the indemnifying party. Thereafter the indemnifying party shall at its sole cost and expense defend the claim by counsel of its choosing reasonably acceptable to the indemnified party or at its option instruct the indemnified party to defend but at the indemnifying party's expense. Nothing herein shall prevent any indemnified party from retaining its own counsel at its own expense to advise it or to elect to defend with its own counsel but in such event such defense shall be at the indemnified party's sole expense and risk of liability. No indemnifying party shall conclude a settlement binding on an indemnified party absent the consent of the indemnified party. Should an indemnified party elect to settle or compromise any claim solely as to itself without permission of the indemnifying party, the indemnifying party shall thereafter have no further obligations toward the indemnified party. 5.0 DISPUTED INVOICES 5.1 Customer shall not be obligated to pay any portion of any invoice, which it disputes in good faith. Customer shall have sixty (60) days from the receipt of such invoice to notify the Printer in writing of any items which it disputes and shall specify its grounds therefor. Thereafter the parties shall attempt during the next thirty (30) days to attempt to resolve the dispute among themselves in good faith. In no event shall dispute of an invoice by Customer be deemed a breach of this Contract or entitle Printer to stop or distrain work. 5.2 Notwithstanding anything in this Contract to the contrary, Printer's continued failure, for any reason whatsoever except events of force majeure, to produce the three (3) Magazines or to produce them timely in accordance with the production schedule submitted by the Customer and agreed upon by Printer, shall entitle Customer, on thirty (30) days' notice, to terminate this Contract and take the work elsewhere. In case of events of force majeure paragraph 3.11.2 will apply. 6.0 MISCELLANEOUS 6.1 Any amendments to or modifications of this contract or any term or condition hereof shall only be valid if in writing signed both by Printer and Customer. This Contract shall not be assigned by either party without the written consent of both parties, except that either party may assign it to a wholly owned subsidiary or to an affiliate of either party which is under its common ownership and control. 6.2 This contract and the rights of the parties to it shall be governed by the law of the State of New York, USA, applicable to contracts made and wholly to be performed therein without regard to the conflicts 5 <PAGE> of laws rules thereof. No lawsuit arising out of the execution, formation, terms, performance or breach of this Contract shall be brought except in courts physically located in New York County, New York, and the parties hereto expressly consent to the personal jurisdiction of such courts over all such litigation and all matters whatsoever relating to or arising out of this Contract. This Contract and the attached schedules contain the sole understanding and agreement of the parties concerning the subject matter hereof, all prior negotiations, conversations, understandings and agreements, whether oral or written, being merged herein. 6.3 Notice where required shall be given to each party at its address first set forth above, or to its telefacsimile number, and shall be effective on receipt if by telefacsimile or by express service which requires a signed receipt, and otherwise three days from the date of mailing. Regular mail shall be sent first-class, postage prepaid. 7.0 SCHEDULES --------- 7.1 This contract consists of this document and the following annexed schedules. Schedule A: Presswork, PENTHOUSE Magazine Schedule B: Bindery and Bundling, PENTHOUSE Magazine Schedule C(C-1, C-2, C-3): Paper Consumption, PENTHOUSE Magazine Schedule D(D-1, D-2): Mailing and Polybagging, GIRLS OF PENTHOUSE/PENTHOUSE LETTERS and PENTHOUSE Magazines Schedule E: Presswork, GIRLS OF PENTHOUSE/PENTHOUSE LETTERS Magazines Schedule F-1: Bindery (Perfect) and Packaging, GIRLS OF PENTHOUSE/PENTHOUSE LETTERS Magazines Schedule F-2: Bindery (Saddle Stitched) and Packaging, GIRLS OF PENTHOUSE/PENTHOUSE LETTERS Magazines Schedule G: Miscellaneous, GIRLS OF PENTHOUSE/PENTHOUSE LETTERS Magazines Schedule H(H-1, H-2): Paper Consumption, GIRLS OF PENTHOUSE/PENTHOUSE LETTERS Magazines Schedule I: Production Schedules 2001/02, GIRLS OF PENTHOUSE/PENTHOUSE LETTERS/PENTHOUSE Magazines IN WITNESS WHEREOF the parties have signed this 12 day of October, 2001. GENERAL MEDIA COMMUNICATIONS, INC. QUEBECOR WORLD, INC. /s/John D. Orlando /s/Richard Tremblay ------------------------ ----------------------- Name: John D. Orlando Name: Richard Tremblay Title: Senior VP/C.F.O. Title: President, East Group /s/Harold W. Halpner /s/Jean Labelle ------------------------ ----------------------- Name: Harold W. Halpner Name: Jean Labelle Title: Executive VP/Manufacturing Title: Vice-President,East Group 6 <PAGE> A <Table> PENTHOUSE 2001 PRICE STRUCTURE PRESSWORK <S> <C> DESCRIPTION DESCRIPTION COVER-4 PAGES LITHOD 4/4 INK Coated Gloss 136# Makeready 4-color process (price/Mpp) Running (price/M) 5-color (process & 1 PMS) Cutting Covers (price/M) (price/Mpp) UV Gloss one side (price/M) 6-color (Process & 1 PMS 1 metallic) (price/Mpp) INSERT-6pp single gatefold 4/4 WASH UP Gloss Coated 60# Makeready Makeready-open 5th or 6th unit Running (price/M) TEXT-32pp signature 4/4 (2/16's) INSERT-2pp single sheet 4/4 Gloss Coated 50# Gloss Coated 100# Makeready Makeready Running (price/M) Running (price/M) TEXT-16pp signature 4/4 (1/16's) Gloss Coated 50# Makeready Press stop Running (price/M) Paper change stop Plate change (1/0) (price/plate) TEXT-8pp signature 4/4 (1/8's) Gloss Coated 50# Makeready Running (price/M) TEXT-4pp signature 4/4 (1/4's) Gloss Coated 50# Makeready Running (price/M) </Table> Note: Above prices include all broker fees Issued: June 28, 2001 <PAGE> B PENTHOUSE 2001 PRICE STRUCTURE BINDERY & BUNDLING <Table> <Caption> DESCRIPTION <S> <C> <C> <C> BINDERY - perfect binding Makeready Run 13-15 sections /M 16-18 sections /M 19-21 sections /M Blow-in cards supplied to our specs. /M Bind-in cards supplied to our specs. /M Reverse lap feed /M Pocket change /pocket NEWSSTAND - BUNDLING 20 copies per bundle /M 25 copies per bundle /M 30-35 copies per bundle /M 40-45 copies per bundle /M Pack Newsstand bundles on pallets /pallet Newsstand Pooling (FOB Plattsburgh) /cwt Fuel surcharge on Pooling Paper Handling /cwt </Table> Note: Above prices include all broker fees. Issued: August 14, 2001 /ADC <PAGE> C-1 PENTHOUSE MAGAZINE PAPER CONSUMPTION <Table> <Caption> DESCRIPTION <S> <C> <C> <C> Per Min Final Trim Size 8' x 10 3/4' Rollsize Makeready Pounds COVER 4 Pages 25 x 38 Supplied Coated 100# text weight 33.5" 1,568# 46,9# PLATE CHANGES Supplied Coated 100# text weight - 1/C plate change 33.5" 553# - 4/C plate change 33.5" 1,107# COVER 4 pages 25 x 38 Supplied Coated 136# text weight 33.5" 2,127# 63,8# PLATE CHANGES Supplied Coated 136# text weight - 1/C plate change 33.5" 753# - 4/C plate change 33.5" 1,506# GATELEG 6 pages 25 x 38 Supplied Coated 60# text weight 23,0" 457# 40,7# BODY 25 x 38 Supplied Coated 40# text weight - 32 pages 33" 920# 147,6# - 16 pages 33" 824# 73,9# - 8 pages 33" 911# 36,9# - 4 pages 33.5" 643# 18,7# </Table> <PAGE> C-2 PENTHOUSE MAGAZINE PAPER CONSUMPTION <Table> <Caption> DESCRIPTION PER MAIN FINAL TRIM SIZE 8" X 10 3/4" ROLL SIZE MAKEREADY POUNDS <S> <C> <C> <C> PLATE CHANGES Supplied Coated 40# text weight - 1/C plate change 33" 436# - 4/C plate change 33" 872# BODY 25 x 38 Supplied Coated 50# text weight - 32 pages 33" 1,050# 184,6# - 16 pages 33" 1,064# 92,3# - 8 pages 33" 1,071# 46,1# - 4 pages 33.5" 851# 23,4# PLATE CHANGES Supplied Coated 50# text weight - 1/C plate change 33" 545# - 4/C plate change 33" 1,091# BODY 25 x 38 Supplied Coated 60# text weight - 32 pages 33" 1,259# 221,5# - 16 pages 33" 1,277# 110,7# - 8 pages 33" 1,285# 55,4# - 4 pages 33.5" 1,021# 28,1# </Table> <PAGE> C-3 --- PENTHOUSE MAGAZINE PAPER CONSUMPTION <Table> <Caption> DESCRIPTION <S> <C> <C> <C> Final Trim Size 8" x 10 3/4" Roll size Makeready Per M in Pounds PLATE CHANGES Supplied Coated 60# text weight -1/C plate change 33" 655# -4/C plate change 33" 1,309# INSERT 2 pages 25x38 Supplied Coated 100# text weight 33" 1,095# 23,1# </Table> Issued: August 14, 2001 <PAGE> D-1 PENTHOUSE/GIRLS/LETTERS PRICE STRUCTURE MAILING & POLYBAGGING <Table> <Caption> DESCRIPTION <S> <C> ________________________________________________________________________________ DATA PROCESSING ________________________________________________________________________________ Processing of addresses for printing 4-up Cheshire label, bar coded, letter carrier pre-sorted /M To run start file for pooling /job To run special pressure sensitive labels for /M Supplements minimum ________________________________________________________________________________ MAILING ________________________________________________________________________________ Insert one piece into poly /M Address using cheshire labels, sort, bundle & bag /M Insertion of each additional piece into poly /M/piece Blow-in on the Sitma (on line) /M/piece To manually address P/S labels (with return address and permit) insertion of the piece into 9" x 12" envelope. Seal, sort, bundle & bag /M minimum Supply 9" x 12" envelope /M Delivery to Plattsburgh Post Office /Truck ________________________________________________________________________________ POLYBAGGING LABOUR ________________________________________________________________________________ Insert 1 piece into polybag /M To apply starburst for Mexico /M To nest supplied card into book /M </Table> <PAGE> D-2 PENTHOUSE MAGAZINE / GIRLS/ LETTERS PRICE STRUCTURE - MAILING & POLYBAGGING <Table> <Caption> DESCRIPTION <S> <C> <C> POLYBAGGING - MATERIAL Supply plastic - 1mm - printed one color black for Printed...in Canada -4.250MM bags (6 months) /M Generic opaque - USPS approved - printed Black/white/silver - 1.25mm based on 1,960,000 bags - 6 months /M Printing 3 colors on clear poly - 3 different News- stand versions - based on 1,240,000 bags - 1.25mm (1 year + 1 year back-up for Penthouse Mag) /M PRE-PRESS & PLATES Client supplies disk with application files We do trapping, file verification, imposition plates, digital blues and color proofs USPS plastic Penthouse Magazine & Penthouse Letters Girls of Penthouse - 2 versions </Table> Issued: August 28, 2001 /ADC <PAGE> E GIRLS OF PENTHOUSE / LETTERS OF PENTHOUSE PRICE STRUCTURE - PRESSWORK <Table> <Caption> DESCRIPTION DESCRIPTION <S> <C> <S> <C> COVER, 4 pages Litho'd 4/4 INK Supplied Coated 80# or 136# text weight Makeready 4 color procees /Page/M 3 color procees /Page/M Running /M (saddle stitched) 2 color procees /Page/M 1 color black /Page/M Running /M (perfect bound) Cutting /M (perfect bound) Metallic /Page/M PMS color match /Page/M UV Gloss one side /M TEXT, 32pp signature 4/4 as 2/16's TEXT, 16pp signature 4/4 as 1/16's 2-out Supplied Machine Coated 50# text weight Supplied Machine Coated 50# text weight Makeready Makeready Running /M Running /M TEXT, 8pp signature 4/4 as 1/8's 2-out TEXT, 4pp signature 4/4 as 1/4's 4-out Supplied Machine Coated 50# text weight Supplied Machine Coated 50# text weight Makeready Makeready Running /M Running /M MISCELLANEOUS Wash-up on 5th or 6th unit /unit Plate change (1/0) Press stop / Paper change </Table> Note: Above prices include all broker fees Issued: August 14, 2001 <PAGE> F-1 GIRLS of PENTHOUSE / LETTERS of PENTHOUSE Price Structure BINDERY (perfect) & PACKAGING <Table> DESCRIPTION <S> <C> <C> <C> BINDERY-perfect binding Makeready Run 6-8 sections /M 9-11 sections /M 12-14 sections /M Blow-in cards supplied to our specs. /M Bind-in cards supplied to our specs. /M Reverse lap feed /M Pocket change /pocket </Table> Note: Above prices include all broker fees. Issued: August 14, 2001 /ADC <PAGE> F-2 GIRLS of PENTHOUSE / LETTERS of PENTHOUSE Price Structure BINDERY (saddle stitched) & PACKAGING <Table> DESCRIPTION <S> <C> <C> <C> BINDERY-saddle stitched Makeready Run 7-9 sections /M 10-12 sections /M 13-15 sections /M 16-18 sections /M Blow-in cards supplied to our specs. /M Blind-in cards supplied to our specs. /M Reverse lap feed /M Pocket change /pocket </Table> Note: Above prices include all broker fees. Issued: August 14, 2001 /ADC <PAGE> G --- GIRLS of PENTHOUSE/LETTERS of PENTHOUSE MISCELLANEOUS <Table> DESCRIPTION <S> <C> Paper handling /cwt NEWSSTAND-BUNDLING 20 copies per bundle /M 25 copies per bundle /M 30-35 copies per bundle /M 40-45 copies per bundle /M Pack newsstand bundles on pallets /pallet Newsstand Pooling (FOB Plattsburgh) /cwt Fuel surcharge on Pooling </Table> Note: Above prices include all broker fees. Issued: August 14, 2001 /ADC <PAGE> H-1 GIRLS OF PENTHOUSE / LETTERS OF PENTHOUSE PAPER CONSUMPTION <Table> <Caption> DESCRIPTION Per Min Final Trim Size 8" x 10 1/2" Roll size Makeready Pounds <S> <C> <C> <C> COVER 4 pages - sheet size 25 x 38 Supplied Coated 80# text weight 33.5" 1,254# 38,3# COVER 4 pages - sheet size 25 x 38 Supplied Coated 136# text weight 33.5" 2,170# 65,1# BODY 25 x 38 Supplied Coated 40# text weight - 32 pages 33" 857# 150,6# - 16 pages 33" 868# 75,3# - 8 pages 33" 874# 37,6# PLATE CHANGES Supplied Coated 40# text weight - 1/C plate change 33" 436# - - 4/C plate change 33" 873# - BODY 25 x 38 Supplied Coated 50# text weight - 32 pages 33" 1,071# 188,3# - 16 pages 33" 1,085# 94,1# - 8 pages 33" 1,092# 47,0# PLATE CHANGES Supplied Coated 50# text weight - 1/C plate change 33" 545# - - 4/C plate change 33" 1,091# - </Table> Issued: August 14, 2001 <PAGE> H-2 GIRLS OF PENTHOUSE / LETTERS OF PENTHOUSE PAPER CONSUMPTION <Table> <Caption> DESCRIPTION <S> <C> <C> <C> Final Trim Size 7 1/2" x 10 1/2" Per Min Roll size Makeready Pounds COVER 4 pages-sheet size 25 x 38 Supplied Coated 80# text weight 32.5" 1,217# 37,2# COVER 4 pages-sheet size 25 x 38 Supplied Coated 136# text weight 32.5" 2,069# 63,2# BODY 25 x 38 Supplied Coated 50# text weight - 32 pages 32" 1,039# 182,3# - 16 pages 32" 1,052# 91,2# - 8 pages 32" 1,059# 45,6# PLATE CHANGES Supplied Coated 50# text weight - 1/C plate change 32" 528# - 4/C plate change 32" 1,058# </Table> Issued: August 14, 2001 <PAGE> I-1 THE GIRLS OF PENTHOUSE 2002 <Table> <Caption> Maps & Manuscripts JANUARY MARCH MAY SPRING JULY BLACK LABEL Due 4 weeks prior to FEBRUARY APRIL JUNE SPECIAL AUGUST SUMMER 4/C Due Date REARVIEW SPECIAL <S> <C> <C> <C> <C> <C> <C> Cover & Pictorial 4/C Due 10/05 11/06 12/18 1/28 3/12 4/17 Late 4/C Due 10/12 11/15 12/27 2/01 3/18 4/24 Balance 4/C 10/18 11/27 1/07 2/07 3/22 4/29 Type Due FINAL TYPE 10/24 12/04 1/11 2/13 3/28 5/03 DISC DUE CRITICAL DATE 10/31 12/11 1/17 3/20 4/04 5/09 FINAL TYPE DISC SHIPS TO PRINTER 11/07 12/18 1/23 2/27 4/10 5/15 Blues (start) 11/15 1/03 1/31 3/07 4/18 5/23 On Press (start) 11/19 1/05 2/04 3/11 4/22 5/27 Bindery (start) 11/24 1/06 2/09 3/16 4/27 6/01 ON-SALE DATE 12/18 1/29 3/05 4/09 5/21 6/25 </Table> <Table> <Caption> Maps & Manuscripts SEPTEMBER FALL NOVEMBER BLACK LABEL JANUARY Due 4 weeks prior to OCTOBER SPECIAL DECEMBER WINTER FEBRUARY' 4/C Due Date LEGS SPECIAL 03 <S> <C> <C> <C> <C> <C> Cover & Pictorial 4/C Due 5/21 6/26 7/26 8/28 10/04 Late 4/C Due 5/28 7/01 8/01 9/06 10/11 Balance 4/C 5/31 7/09 8/08 9/12 10/18 Type Due FINAL TYPE 6/07 7/15 8/15 9/19 10/24 DISC DUE CRITICAL DATE 6/13 7/19 8/21 9/25 10/31 FINAL TYPE DISC 6/19 7/24 8/27 10/02 11/06 SHIPS TO PRINTER Blues (start) 6/27 8/01 9/05 10/10 11/14 On Press (start) 7/01 8/05 9/09 10/14 11/18 Bindery (start) 7/06 8/10 9/14 10/19 11/23 ON-SALE DATE 7/30 9/03 10/08 11/12 12/17 </Table> 8/21/2001 <PAGE> I-2 PENTHOUSE LETTERS 2002 <Table> <Caption> Maps & Manuscripts Due 4 weeks prior to 4/C Due Date JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER ______________________________________________________________________________________________________________________________ <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> Cover & Pictorial 9/18 10/15 11/15 12/12 1/07 2/05 3/05 4/02 4/30 5/17 6/13 4/C Due Late 9/25 10/19 11/19 12/17 1/14 2/12 3/12 4/09 5/07 5/24 6/20 4/C Due Balance 4/C 10/02 10/26 11/27 12/20 1/22 2/19 3/19 4/16 5/14 6/04 7/09 Type Due FINAL TYPE DISC 10/09 11/01 12/04 1/02 1/28 2/26 3/26 4/23 5/21 6/11 7/16 DUE CRITICAL DATE 10/16 11/08 12/11 1/07 2/04 3/05 4/02 4/30 5/29 6/19 7/23 FINAL FILMS 10/23 11/15 12/18 1/14 2/11 3/12 4/09 5/07 6/04 6/27 7/30 SHIPS TO PRINTER Blues (start) 11/01 11/29 1/03 1/24 2/21 3/21 4/18 5/16 6/13 7/11 8/08 On Press (start) 11/03 12/01 1/05 1/26 2/23 3/23 4/20 5/18 6/15 7/13 8/10 Bindery (start) 11/06 12/04 1/06 1/29 2/26 3/26 4/23 5/21 6/18 7/16 8/13 On-Sale Date 12/04 1/01 1/29 2/26 3/26 4/23 5/21 6/18 7/16 8/13 9/10 ______________________________________________________________________________________________________________________________ 8/21/01 </Table> <Table> <Caption> Maps & Manuscripts Due 4 weeks prior to 4/C Due Date DECEMBER HOLIDAY JANUARY 2003 ________________________________________________________________________________ <S> <C> <C> <C> Cover & Pictorial 7/15 8/13 9/24 4/C Due Late 7/22 8/20 10/01 4/C Due Balance 4/C 7/29 8/26 10/08 Type Due FINAL TYPE DISC 8/06 9/04 10/16 DUE CRITICAL DATE 8/13 9/12 10/23 FINAL FILMS 8/23 9/24 10/30 SHIPS TO PRINTER Blues (start) 9/05 10/03 11/07 On Press (start) 9/07 10/05 11/09 Bindery (start) 9/10 10/08 11/12 On-Sale Date 10/08 11/05 12/10 ________________________________________________________________________________ 8/21/01 </Table> <PAGE> <TABLE> <CAPTION> I-3 PENTHOUSE 2002 JUNE JAN FEB MARCH APRIL MAY POY JULY PLAY-OFF ================================================================================================================================== <S> <C> <C> <C> <C> <C> <C> <C> MANUSCRIPTS DUE 4 WEEKS PRIOR TO 8/04 8/14 10/15 11/14 12/20 1/10 2/7 4/C DUE DATE EARLY OFFSET 4/COLOR DUE 9/05 10/05 11/05 12/05 1/10 2/01 3/1 F.O.B. & FEATURE 4/COLOR DUE 9/10 10/12 11/09 12/12 1/17 2/08 3/6 LATE OFFSET 4/COLOR DUE 9/14 10/19 11/14 12/17 1/23 2/13 3/11 FEATURE TYPE, CARTOON FEATURE, HOUSECALL, 9/19 10/25 11/19 12/21 1/28 2/20 3/14 PREVIEW OFFSET TYPE SHIPS TO COMBINE W/4/COLOR 9/24 11/01 11/27 12/27 2/01 2/25 3/19 ================================================================================================================================== LATEST PASTE-UP FINAL PAGINATION DUE 10/01 11/07 11/30 1/04 2/05 3/01 3/22 W/O O/T ================================================================================================================================== CRITICAL DATE 10/10 11/14 12/07 1/11 2/11 3/08 3/28 ================================================================================================================================== PICTORIAL TYPE SHIPS 10/10 11/14 12/07 1/11 2/11 3/08 3/28 ================================================================================================================================== AD/EDIT COMBOS COVER TYPE SHIPS 10/12 11/20 12/13 1/17 2/14 3/14 4/11 OFFSET FILM SHIPS 10/18 11/26 12/19 1/23 2/20 3/20 4/17 US BLUELINES FROM QUEBECOR DUE 10/25 12/06 1/03 1/31 2/28 3/28 4/25 OFFSET ON PRESS COVER ON PRESS 10/27 12/06 1/05 2/02 3/02 3/30 4/27 BINDERY STARTS 10/31 12/12 1/09 2/06 3/06 4/03 5/1 ================================================================================================================================== ON-SALE DATE 11/27 1/08 2/05 3/05 4/02 4/30 5/28 ================================================================================================================================== CANADIAN PAGINATION W/ CORRECTIONS 10/22 12/4 1/2 1/29 2/26 3/25 4/30 COVER W/O UPC & CARTOONS TO INTERNET 10/22 12/4 1/2 1/29 2/26 3/25 4/30 ON-SALE PERIOD 28 28 28 28 28 28 28 HOLIDAYS IN LABOR DAY COLUMBUS DAY THANKSGIVING HANUKKAH MARTIN LUTHER PRESIDENT S PASSOVER PRODUCTION CYCLE ROSH HASHANAH THANKSGIVING HANUKKAH CHRISTMAS KING DAY DAY GOOD FRIDAY REDUCE DAYS ALLOWED TO YOM KIPPUR CHRISTMAS NEW YEAR S EASTER PRODUCE THE ISSUE COLUMBUS DAY 10/1/01 </TABLE> <TABLE> <CAPTION> PENTHOUSE 2002 AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER SPECIAL JANUARY ANNIVERSARY ISSUE POY'03 ================================================================================================================================== <S> <C> <C> <C> <C> <C> <C> <C> MANUSCRIPTS DUE 4 WEEKS PRIOR TO 3/4 4/4 5/3 5/24 6/26 7/25 8/14 4/C DUE DATE EARLY OFFSET 4/COLOR DUE 3/25 4/25 5/24 6/21 7/17 8/15 9/4 F.O.B. & FEATURE 4/COLOR DUE 4/2 5/2 5/30 6/28 7/24 8/21 9/11 LATE OFFSET 4/COLOR DUE 4/8 5/6 6/4 7/3 7/30 8/26 9/18 FEATURE TYPE, CARTOON FEATURE, HOUSECALL, 4/12 5/10 6/10 7/11 8/5 9/3 9/25 PREVIEW OFFSET TYPE SHIPS TO COMBINE W/4/COLOR 4/18 5/16 6/14 7/17 8/9 9/9 10/2 ================================================================================================================================== LATEST PASTE-UP FINAL PAGINATION DUE 4/24 5/23 6/21 7/22 8/15 9/13 10/8 W/O O/T ================================================================================================================================== CRITICAL DATE 5/2 5/30 6/28 7/26 8/22 9/19 10/16 ================================================================================================================================== PICTORIAL TYPE SHIPS 5/2 5/30 6/28 7/26 8/22 9/19 10/16 ================================================================================================================================== AD/EDIT COMBOS COVER TYPE SHIPS 5/9 6/7 7/5 8/1 8/28 9/25 10/23 OFFSET FILM SHIPS 5/15 6/12 7/10 8/7 9/4 10/2 10/28 US BLUELINES FROM QUEBECOR DUE 5/23 6/20 7/18 8/15 9/12 10/10 11/7 OFFSET ON PRESS COVER ON PRESS 5/25 6/22 7/20 8/17 9/14 10/12 11/9 BINDERY STARTS 5/29 6/26 7/24 8/21 9/18 10/16 11/13 ================================================================================================================================== ON-SALE DATE 6/25 7/23 8/20 9/17 10/15 11/12 12/10 ================================================================================================================================== CANADIAN PAGINATION W/ CORRECTIONS 5/28 6/25 7/29 8/26 9/24 N/A N/A COVER W/O UPC & CARTOONS TO INTERNET 5/28 6/25 7/29 8/26 9/24 N/A N/A ON-SALE PERIOD 28 28 28 28 28 28 28 HOLIDAYS IN MEMORIAL DAY JULY 4TH JULY 4TH LABOR DAY LABOR DAY COLUMBUS PRODUCTION CYCLE ROSH HASHANAH DAY REDUCE DAYS ALLOWED TO YOM KIPPUR THANKSGIVING PRODUCE THE ISSUE COLUMBUS DAY 10/1/01 </TABLE> <TABLE> <CAPTION> PENTHOUSE 2002 FEBRUARY ======================================== <S> <C> MANUSCRIPTS DUE 4 WEEKS PRIOR TO 9/17 4/C DUE DATE EARLY OFFSET 4/COLOR DUE 10/8 F.O.B. & FEATURE 4/COLOR DUE 10/16 LATE OFFSET 4/COLOR DUE 10/22 FEATURE TYPE, CARTOON FEATURE, HOUSECALL, 10/28 PREVIEW OFFSET TYPE SHIPS TO COMBINE W/4/COLOR 11/1 ======================================== LATEST PASTE-UP FINAL PAGINATION DUE 11/6 W/O O/T ======================================== CRITICAL DATE 11/13 ======================================== PICTORIAL TYPE SHIPS 11/13 ======================================== AD/EDIT COMBOS COVER TYPE SHIPS 11/20 OFFSET FILM SHIPS 11/25 US BLUELINES FROM QUEBECOR DUE 12/5 OFFSET ON PRESS COVER ON PRESS 12/7 BINDERY STARTS 12/11 ======================================== ON-SALE DATE 1/7/03 ======================================== CANADIAN PAGINATION W/ CORRECTIONS N/A COVER W/O UPC & CARTOONS TO INTERNET N/A ON-SALE PERIOD 28 HOLIDAYS IN THANKSGIVING PRODUCTION CYCLE REDUCE DAYS ALLOWED TO PRODUCE THE ISSUE 10/1/01 </TABLE>