EXHIBIT 10-17 EDITED VERSION--
SUBJECT TO CONFIDENTIAL TREATMENT REQUEST
ADVERTISING AGREEMENT
This Agreement is by and between ARTISTIC GREETINGS INCORPORATED, a
Delaware corporation with its principal office at Xxx Xxxxx Xxxxxx, Xxxxxx,
Xxx Xxxx 00000 ("Artistic") and VALASSIS COMMUNICATIONS, INC., a Delaware
corporation with an address of 00000 Xxxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx
00000 ("Valassis").
R E C I T A L S:
WHEREAS, the parties hereto, along with Valcheck Company ("Valcheck"),
are parties to an Asset Purchase Agreement of even date herewith, pursuant
to which Artistic is purchasing certain assets of Valcheck, a partnership
of which Valassis Direct Response, Inc., a Delaware corporation and a
wholly-owned subsidiary of Valassis, is an 80% partner; and
WHEREAS, Valcheck is engaged in the direct mail marketing of
personalized bank checks ("checks"); and
WHEREAS, Valassis currently has long-term contracts for the placement
of advertising in print media with a total of over 55,000,000 in weekly
circulation; and
WHEREAS, as a material element of the transactions contemplated under
the Asset Purchase Agreement, Valassis has agreed to grant Artistic the
rights to place Artistic's advertising set forth hereinafter, in return for
which Artistic has agreed to pay the consideration set forth hereinafter;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1) RIGHT OF FIRST REFUSAL.Valassis hereby grants to Artistic an
exclusive right of first refusal with respect to the placement of weekly
newspaper full-page "free standing insert" ("FSI") advertising, as well as
in any newspaper supplement or similar advertising in which Valassis has
placement contracts, in all such circulation in which Valassis now or
hereafter during the term of this agreement has placement contracts with
respect to advertising, subject to Valassis' standard terms and conditions
of such advertising placement.
2) EXCLUSIVE PLACEMENT.Valassis guarantees Artistic that for all
circulation in which Artistic elects to place FSI advertising pursuant to
this agreement for checks, Artistic's advertisements will be the exclusive
check advertising contained in that edition of each publication in which
such advertising is placed.
3) ADVERTISING; PRICING.(a) During the term hereof, Valassis
guarantees to Artistic that Valassis shall use its best efforts
to maintain the right to place full-page FSI advertising in newspapers
with weekly circulation of no less than 40,000,000 copies.
(b) For any FSI advertising placed by Artistic under this agreement,
Artistic shall pay Valassis the applicable price as set forth in Schedule 1
hereto. The prices listed in Schedule 1 shall be subject to an increase of
3% annually for each twelve-month year during the term hereof, beginning on
the first anniversary date of the execution of this Agreement. Provided,
however, that if the price at which Valassis would have sold the space
purchased by Artistic to a third party drops materially below the
applicable price set forth in Schedule 1 hereto such that the Schedule 1
price then in effect is uncompetitive, the parties shall negotiate in good
faith toward a reasonable decrease in the Schedule 1 price then in effect.
If the parties cannot agree on such an adjustment, the Schedule 1 price
then in effect shall remain in force. For any other newspaper supplement
or similar advertising, including, without limitation, ROP and C&D Inserts,
placed by Artistic under this Agreement, Artistic shall pay Valassis market
prices for such products.
(c) In addition to the payments set forth in Section 3(b) above, in
consideration of the circulation volume offered, the right of first refusal
and the advertising pricing that Valassis is granting to Artistic
hereunder, Artistic agrees to pay Valassis the following amounts, whether
or not Artistic elects to place any advertising pursuant to this Agreement:
PAYMENT DATE: AMOUNT:
Year 1 - Upon execution of this agreement and
the closing of the transactions contemplated
in the Asset Purchase Agreement
(the "closing date"): $3,000,000
Year 2 - On the first anniversary of the closing date: $2,000,000
Year 3 - On the second anniversary of the closing date: $2,000,000
Year 4 - On the third anniversary of the closing date: $2,000,000
Year 5 - On the fourth anniversary of the closing date: $1,000,000
All such payments shall be made by certified check or bank draft payable to
the order of Valassis or as directed by Valassis or by or wire transfer to
an account designated by Valassis, and shall be made in advance of the year
for which the payment is made, within three business days following the due
date for each such payment.
4) TERM; TERMINATION.This agreement shall remain in effect for five
years following the date of its execution, subject to earlier termination
only upon the mutual agreement of the parties hereto or in the event of a
material breach of any of the terms hereof by either party. In the event
of a material breach, the party alleging such breach shall promptly give
written notice to the party alleged to have committed such breach, which
notice shall describe with reasonable detail the breach alleged to have
occurred. Upon receiving such notice, the party alleged to have committed
the breach shall have 30 days to remedy such breach to the reasonable
satisfaction of the non-breaching party, or this agreement shall terminate
at the end of such 30 day cure period without further notice being
required. In the event that this agreement is terminated, the obligations
of both parties hereto, including but not limited to Artistic's obligations
to make any further payments to Valassis hereunder and Valassis'
obligations to place advertising for Artistic hereunder, shall
automatically expire.
5) GENERAL.
(a) NOTICE.Any notice required or permitted hereunder shall be in
writing and shall be deemed to have been duly given (i) upon hand delivery,
or (ii) on the third day following delivery to the U.S. Postal Service as
certified mail, return receipt requested and postage prepaid, or (iii) on
the first day following delivery to a nationally recognized U.S. overnight
courier service, fee prepaid and return receipt or other confirmation of
delivery requested, or (iv) when telecopied or sent by facsimile
transmission. Any such notice shall be delivered to a party at its address
first set forth above, or at such other address as may be designated by one
party in a notice given to the other from time to time in accordance with
the terms of this paragraph.
(b) ASSIGNMENT. This Agreement may not be assigned in whole or in
part without the written consent of all parties.
(c) ENTIRE AGREEMENT; AMENDMENT.This Agreement, together with all
Schedules hereto, contains the entire understanding among the parties
hereto and supersedes any prior agreements, understandings, discussions, or
writings among the parties with respect to the subject matter hereof. This
Agreement may only be amended by a written document signed by all parties
hereto. There are no representations, warranties, or obligations of any
party not expressly contained herein.
(d) XXXXXX.Xx waiver by any party of a breach of any term or
condition of this Agreement by any other party shall be effective unless in
writing and duly executed by the waiving party. No such waiver shall
constitute a waiver of any subsequent breach of the same or any other term
or condition of this Agreement.
(e) CONSTRUCTION.Should an occasion arise in which interpretation of
this Agreement becomes necessary, such construction or interpretation shall
not presume that the terms hereof be more strictly construed against one
party by reason of any rule of construction or authorship.
(f) DUPLICATE ORIGINALS.This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original. It shall not be
necessary in making proof of this Agreement to produce or account for more
than one of such counterparts.
(g) HEADINGS.The headings included herein are for convenience only
and do not constitute a portion of this Agreement and shall not be used in
any construction hereof.
(h) APPLICABLE LAW; SEVERABILITY.This Agreement shall be governed and
construed in accordance with the laws of the State of New York pertaining
to contracts made and to be wholly performed within such state, without
taking into account conflict of laws principles. If any provision
contained herein is held to be invalid or unenforceable, the validity and
enforceability of the remaining provisions shall not in any way be affected
or impaired.
(i) JURISDICTION AND XXXXX.Xx the event that any legal proceedings
are commenced in any court with respect to any matter arising under this
Agreement, the parties hereto specifically consent and agree that the
courts of the State of New York and/or the Federal Courts located in the
State of New York shall have jurisdiction over each of the parties hereto
and over the subject matter of any such proceedings, and the venue of any
such action shall be in Monroe County, New York and/or the U.S. District
Court for the Western District of New York.
IN WITNESS WHEREOF, the parties hereto have executed this agreement
as of the 30th day of May, 1995.
ARTISTIC GREETINGS INCORPORATED VALASSIS COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxx By: /s/ Xxxxxx X. Xxxxxxx
Title: President and COO Title:CFO and Treasurer
SCHEDULE 1
FSI PRICING
*DENOTES CONFIDENTIAL TREATMENT REQUESTED OF REDACTED INFORMATION
1995 June $[ ]*
July $[ ]*
August $[ ]*
September $[ ]*
October $[ ]*
November $[ ]*
December $[ ]*
1996 January $[ ]*
February $[ ]*
March $[ ]*
April $[ ]*
May $[ ]*
