Advertising Agreement - Weider Publications Inc. and Weider Nutrition International Inc.
ADVERTISING AGREEMENT
Dated December 1, 1996
by and between
WEIDER PUBLICATIONS, INC.
WEIDER NUTRITION INTERNATIONAL, INC.
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ADVERTISING AGREEMENT
This Advertising Agreement (the "Agreement") is made and entered into as of
December 1, 1996, by and between Weider Publications, Inc., a Delaware
corporation ("WPI") and Weider Nutrition International, Inc., a Delaware
corporation ("Weider Nutrition").
In consideration of the mutual covenants and promises contained herein and
for other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
ADVERTISING
1.1 Advertising Pages. WPI will furnish to Weider Nutrition as many
advertising pages (or, ad pages) each month as ordered for Weider Nutrition in
each of WPI's publications.
(a) Weider Nutrition shall present an annual advertising plan for
each publication by March 31 for the year commencing the following June 1.
(b) Weider Nutrition shall order, at a minimum, the number of ad
pages for each publication as shown on Exhibit I.
(c) Weider Nutrition shall place insertion orders for ad pages in
each issue within the time prescribed by WPI. An insertion order shall be
defined as written ad lists supplied by Weider Nutrition and verbal orders
placed by officers or directors of Weider Nutrition.
(d) WPI shall have the option to insert an ad page ordered for Weider
Nutrition up to the date the issue goes to press.
(e) For each issue of each publication, WPI shall have the right to
(i) rotate positions of each ad page of Weider Nutrition, (ii) pull Weider
Nutrition ad pages if WPI believes the ratio of Weider Nutrition ad pages to
total ad pages exceeds an acceptable level, and (iii) pull a Weider Nutrition ad
page if the ad page conflicts with editorial policy. Notwithstanding the
foregoing, WPI will use reasonable efforts to comply with the requests of Weider
Nutrition for placement and rotation of its ads in each publication.
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(f) Weider Nutrition may elect to pay rate card for selected ad pages
in an issue to nullify (e) above, except for clause (iii).
(g) Weider Nutrition may not resell an ad page to any other party.
1.2 Ad Page Rate. For each Weider Nutrition ad page ordered and published
in a WPI publication pursuant to Section 1.1 above, Weider Nutrition shall pay
to WPI the Ad Page Rate in effect for the fiscal year.
(a) The Ad Page Rate shall be, for each publication, the amount
(rounded upward to the nearest $100) derived by dividing (i) its budgeted Direct
Production Costs, by (ii) its budgeted Average Book Size. The Ad Page Rate
represents the direct cost per page for each publication.
(b) Direct Production Costs shall be based on the accounting methods
employed by WPI. Direct Production Costs shall be, for each publication, all
costs related directly to the production and distribution of the publication,
including, but not limited to, film prep and proofs, paper, printing and
binding, freight, subs postage and display costs. Costs incurred for buyouts of
articles and photos shall be specifically excluded from Direct Production Costs.
(c) The Average Book Size shall be, for each publication, the amount
(rounded to two decimal positions) derived by dividing (i) the sum total of the
number of pages (including cover) published in a single copy of each issue for
the fiscal year, by (ii) the number of issues published in the fiscal year.
(d) The Ad Page Rate for each publication is set forth on Exhibit II.
Such rate shall be updated annually by April 15 for the year commencing the
following June 1, except in the event of an increase of more than 3% in the
actual ad page rate during a fiscal year. In such event, the Ad Page Rate shall
be adjusted upward during that fiscal year for the effect of such increase in
excess of 3%.
(e) Notwithstanding the foregoing, the following shall apply in each
of years 6 through 10 of the term of this Agreement: In year 6 Weider Nutrition
shall pay Ad Page Rate plus 5%, in year 7 Ad Page Rate plus 10%, in year 8 Ad
Page Rate plus 15% in year 9 Ad Page Rate plus 20%, and in year 10 Ad Page Rate
plus 25%.
(f) Furthermore, notwithstanding anything to the contrary set forth
herein, the Ad Page Rates provided for herein shall not apply to any company or
business acquired by Weider Nutrition after January 1, 1997. Such companies or
businesses shall pay for advertising in any of WPI's publications 2 times the ad
page rate as defined in Schedule II or by calculation of 1.2(a) applicable
publication's rate card then in effect.
1.3 Billing and Payment. Weider Nutrition ad pages shall be, for each
publication, billed and paid in the same manner as all other advertisers.
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(a) WPI shall bill Weider Nutrition for each ad page at the Ad Page
Rate on the bill date for each publication.
(b) Weider Nutrition shall pay WPI each billing within 15 days of
invoice date.
(c) Late payments shall be subject to a 1/2% fee for each month, or
portion thereof, the billing remains unpaid.
1.4 New Publications. In the event WPI acquires or launches a new
publication during the term of this Agreement, Weider Nutrition shall have the
right, but not the obligation, to purchase ad pages in such publication on the
terms set forth in Section 1.1, 1.2 and 1.3 above.
ARTICLE II
TERM AND TERMINATION
2.1 Term. Unless terminated by the parties pursuant to Section 2.2 below,
this Agreement shall continue in effect for a term of ten (10) years.
2.2 Termination, This Agreement may be terminated:
(a) by mutual consent of the parties hereto;
(b) by Weider Nutrition for a material breach of this Agreement by
the Company or WPI which continues for 30 days after written notice thereof from
Weider Nutrition to the Company and WPI;
(c) by the Company or WPI for a material breach of this Agreement by
Weider Nutrition which continues for 30 days after written notice thereof from
the Company or WPI to Weider Nutrition;
(d) by WPI with 180 days written notice to Weider Nutrition in the
event of a public offering of stock by WPI or a business combination in which
WPI is not the surviving and/or controlling entity; or
(e) by WPI with 30 days written notice to Weider Nutrition at such
time that the Company no longer controls more than 50% of the voting control or
ownership of Weider Nutrition.
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ARTICLE III
MISCELLANEOUS
3.1 Certification. The Chief Financial Officer or President/CEO of WPI
shall sign a compliance certificate at the beginning and end of each fiscal year
certifying that the Ad Page Rates were determined in accordance with this
Agreement.
3.2 Force Majeure. If any party shall be prevented by an event of force
majeure from the timely performance of any of its obligations under this
Agreement, save and except the making of payments as provided in this Agreement,
the obligation of performance shall be excused and shall not be a ground for
cancellation or termination or default. The party suffering the event of force
majeure shall use reasonable diligence to remedy such, but shall not be required
to contest the validity of any authority, or to prevent or settle any strike or
labor dispute. As used in this Agreement, the term "force majeure" shall mean
any cause beyond a party's reasonable control, including without limitation, any
of the following: Law or regulation, action or inaction of civil or military
authority; inability to obtain any license, permit, or other authorization that
may be required, unusually severe weather, casualty; unavoidable shutdown; fire,
explosion, or flood; insurrection; riot; labor dispute; delay in transportation;
and act of God.
3.3 Amendment. This Agreement may be amended, or any provision of this
Agreement may be waived; provided, however, that any such amendment or waiver
shall be binding only on a party hereto if such amendment or waiver is set forth
in writing executed by such party.
3.4 Captions. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and shall not be
deemed to limit, characterize, or in any way affect any provision of this
Agreement, and all provisions of this Agreement shall be enforced and construed
as if no caption had been used in this Agreement.
3.5 Counterparts. This Agreement may be executed in one or more
counterparts all of which taken together shall constitute one and the same
instrument.
3.6 Governing Law. All questions concerning the construction, validity,
and interpretation of this Agreement and the performance of the obligations
imposed by this Agreement shall be governed by the law of the State of
California but without reference to choice of law or conflict of laws provisions
thereof.
3.7 No Third Party Contract Rights. This Agreement is intended solely for
the benefit of the parties hereto. Nothing herein shall be construed or deemed
to create any rights or benefits to any third parties or third party
beneficiaries.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
Weider Publications, Inc.
MICHAEL T. CARR
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Michael T. Carr
Chief Executive Officer and President
Weider Nutrition International, Inc.
RICHARD B. BIZZARO
------------------------------------
Richard B. Bizzaro
Chief Executive Officer and President
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EXHIBIT II
<TABLE>
<CAPTION>
AD PAGE RATES
BEGINNING DECEMBER 1, 1996 AND
ENDING MAY 31,1997
Publication Ad Page Rate
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<S> <C>
Muscle and Fitness $6,000
Flex $2,000
Men's Fitness $3,000
Prime Fitness $2,000
Shape $7,500
Living Fit $3,500
Fit Pregnancy $2,500
Shape Cook's $2,500
Jump $3,500
Senior Golfer $3,200
</TABLE>