If your uncomfortable about it all then don't do it, it sounds like a bad deal to me. If the person isn't willing to pay for the rights then they can get one that they own the rights to. I would also keep an eye on the magazine to make sure that they don't submit it anyways, if they do I would go to the magazine and tell them about the copyright situation. I'm not a lawyer or a professional but that seems to be the best course.
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