EXHIBIT 10.1

CONFIDENTIAL TREATMENT REQUESTED

AMENDMENT NO. 2 TO EXCLUSIVE RESELLER AGREEMENT

by and between

VALASSIS SALES & MARKETING SERVICES, INC.

and

INSIGNIA SYSTEMS, INC.

AMENDMENT NO. 2 TO EXCLUSIVE RESELLER AGREEMENT (the “Second Amendment”), dated
as of July 2, 2007, by and between Valassis Sales & Marketing Services, Inc.
(the “Reseller”) and Insignia Systems, Inc. (the “Company”) (collectively, the
“Parties”). All capitalized terms used but not defined herein shall have the
same meanings as ascribed to them in the Exclusive Reseller Agreement (as
defined below).

W I T N E S S E T H:

WHEREAS, on June 12, 2006, the Reseller and the Company entered into the
Exclusive Reseller Agreement, and amended such agreement by Amendment No. 1 to
Exclusive Reseller Agreement dated December 6, 2006 (as amended, the “Exclusive
Reseller Agreement”);

WHEREAS, the Parties wish to, among other things, extend the term of the
Agreement and set forth additional terms and conditions; and

WHEREAS, the Parties have determined to amend the Exclusive Reseller Agreement
as herein set forth.

NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto hereby
agree as follows:

 

1.

Title of the Agreement shall be changed to “Exclusive Reseller and Retail
Services Agreement.”

 

2.

The Section entitled “Recitals” is hereby amended and restated in its entirety
as follows:

“The Company develops, manufactures and distributes certain products and
services which may be sold through the Reseller channel to grocery and drug
retailers. The Reseller is experienced and intends to be engaged in the business
of distributing the kinds of products and services sold by the Company to
customers and providing them additional or complementary services or products
and integrated solutions. The parties desire to set forth the terms and
conditions under which the Reseller will acquire from the Company and distribute
to Customers the Products in the Territory and provide to Customers the Services
(as such terms are defined below) as well as assist the Company in expanding the
Company’s retail network by developing new contracts between the Company and the
Target Retailers (as such term is defined below).”

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3.

The parties hereby agree to add the following definition to Section 1 as
Subsection (h) and re-letter the definition of “Territory” to Subsection (i):

(h) “Target Retailers” shall mean those retail chains set forth on Exhibit C
attached hereto.

 

4.

The first sentence of Section 3(c)(ii) is hereby amended and restated in its
entirety as follows:

“All Certificates of Insurance shall be sent to the other party at the
appropriate address set forth in Section 14(f).”

 

5.

Section 3(c)(x) is hereby amended and restated in its entirety as follows:

(x)        Insurance Submittal Address. All Certificates of Insurance shall be
sent to the address of the Reseller set forth in Section 14(f) hereof.

 

6.

Section 4(c) is hereby amended and restated in its entirety as follows:

(c)        Company Payments. The Company shall provide the Reseller with a
calculation of all revenue for (i) joint sales with respect to Products and
Services and (ii) development of Target Retailers on a monthly basis, and remit
payment to Reseller, along with an accounting of the amounts due, within 30 days
after each calendar year during the term. All payments shall be made in U.S.
Dollars.

 

7.

Section 4(f)(i) is hereby amended and restated in its entirety as follows:

(i)        Record Keeping. Each of the Company and the Reseller shall keep
accurate and complete records relating to (i) the Products and sales of fixed
rate and joint sales Services to Customers in the Territory and to such party’s
performance of its obligations under this Agreement and (ii) the joint
development of new relationships with Target Retailers and to such party’s
performance of its obligations under this Agreement.

 

8.

Section 10(a) is hereby amended and restated in its entirety as follows:

(a)        Term. The term of this Agreement shall commence on the Effective Date
and shall continue until December 31, 2017 (the “Initial Term”) unless
terminated earlier (i) by mutual consent of the parties hereto or (ii) pursuant
to the provisions of this Section 10. At the end of the Initial Term, this
Agreement shall renew automatically for additional 12 month periods unless prior
to that time, at the end of each renewal term, either party gives the other
party 90 days’ written notice of non-renewal. At the end of each year during the
Initial Term, the parties shall mutually agree on any appropriate adjustments to
Exhibit B.

 

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9.

Section 10(d) of the Agreement is hereby deleted in its entirety.

 

10.

Section 10(g) is hereby amended and restated in its entirety as follows:

(g)       Survival of Certain Terms. The provisions of Sections 1, 3(c), 4,
6(e), 7, 8, 9, 10, 13 and 14 of this Agreement, and all payment or delivery
obligations incurred during the term of this Agreement, shall survive the
expiration or termination of this Agreement for any reason. All other rights and
obligations of the parties shall cease upon termination of this Agreement.

 

11.

The parties hereby agree to re-number old Section 11 “Limitation of Liability”
to Section 13.

 

12.

The parties hereby agree to re-number old Section 12 “Miscellaneous” to Section
14.

 

13.

The parties hereby agree to insert as new Section 11 the following language:

11. Development of Target Retailers.

(a)        Joint Development.    The Company and the Reseller hereby agree to
jointly try to expand the Company’s current retail network by creating new
relationships, through marketing and sales efforts, between the Company and the
Target Retailers.

(b)       Reseller Responsibilities.    The Reseller hereby agrees to use its
expertise and marketing skills to help develop new relationships for the Company
with Target Retailers, with the Company’s assistance. In order to assist the
Company in developing new relationship with Target Retailers, the Reseller
hereby agrees to take a lead role with respect to the following activities: (i)
developing sales and marketing materials for retailer expansion, (ii)
identifying and qualifying top prospects and (iii) developing, proposing and
conceptualizing sell opportunities. The Reseller hereby agrees to work jointly
with the Company to develop and finalize agreement terms and conditions with the
Target Retailers; provided, however, that the terms and conditions of such
agreements shall be solely in the discretion of the Company. The Reseller also
agrees to assist the Company with respect to the training of such retailers and
integration of operations. Upon the request of the Company, the Reseller and the
Company will meet prior to the end of the two (2) year period commencing on the
date of this Amendment No. 2 and at the end of each two (2) year period
thereafter during the Initial Term whereby the parties will review the work done
by Reseller in the prior two (2) years and develop a plan of action for the next
two (2) years.

 

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(c)       Company Responsibilities.    In order to develop new relationships
with Target Retailers, the Company hereby agrees to assist the Reseller with
respect to the following activities: (i) developing sales and marketing
materials for retailer expansion, (ii) identifying and qualifying top prospects
and (iii) developing, proposing and conceptualizing sell opportunities. The
Company hereby agrees to work jointly with the Reseller to develop and finalize
agreement terms and conditions with the Target Retailers and agrees to take a
lead role with respect to the training of such retailers and integration of
operations. The Company also agrees to provide reporting and other operational
support to any Target Retailer (without any assistance from the Reseller). In
order to further incentive the Reseller to perform its obligations under Section
11(b) hereof, the Company also agrees to grant to the Reseller a warrant, dated
as of the date hereof, to purchase up to 800,000 shares of the Company’s common
stock.

(d)       Payment Terms.    In exchange for the Reseller’s obligations under
this Agreement with respect to Target Retailers, the Company hereby agrees to
pay a cash commission to the Reseller during the term of the Agreement, payable
on December 1, March 1, June 1 and September 1 each year based on the most
recent calendar quarter, of [ * ] based on any revenue that the Company derives
from POPS programs run in the new Target Retailers added to the Company’s
network through the Reseller’s efforts. The Company also hereby agrees to pay a
cash commission to the Reseller during the term of the Agreement, payable on
December 1, March 1, June 1 and September 1 each year, of [ * ] and [ * ] based
on any revenue that the Company derives from POPS programs run at stores
operated by [ * ] and [ * ], respectively.

 

14.

The parties hereby agree to insert as new Section 12 the following language:

12. Change of Control.    The Company hereby agrees that if, during the term of
this Agreement, a Change of Control of the Company occurs and, following such
Change of Control, the Company or the successor entity terminates this Agreement
for any reason other than the Reseller’s material breach of this Agreement, the
Company and its successor company shall be jointly and severally liable to the
Reseller for liquidated damages in a lump-sum amount of [ * ] in immediately
available funds. Upon a Change of Control, the Company hereby agrees to use its
best efforts to cause any successor company to assume this Agreement and comply
with the requirements of this Section 12, if applicable. The Reseller shall be
entitled to receive such payment within 30 days of such termination.

 

* Confidential treatment requested for this portion.

 

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For purposes of this Section 12, “Change of Control” means the occurrence of one
or more of the following events:

 

(a)       the date any one “person” (as that term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, other than the
Company), or more than one person acting as a group, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person(s)) ownership of stock of the Company possessing 30 percent or more
of the total voting power of the stock of the Company;

(b)       the date a majority of the members of the Company’s Board of Directors
is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the Company’s Board of Directors
before the date of the appointment or election;

(c)       the date any one person, or more than one person acting as a group,
acquires ownership of stock of the Company that, together with stock held by
such person or group, constitutes more than 50 percent of the fair market value
or total voting power of the stock of the Company; or

(d)       the date one person, or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person(s)) all or a substantial portion of the
Company’s assets if such assets have a total gross fair market value equal to or
more than 40 percent of the total gross fair market value of all of the assets
of the Company immediately before such acquisition(s).

15.           Except as set forth herein, all of the terms, conditions and
provisions of the Exclusive Reseller Agreement shall remain unchanged and in
full force and effect.

16.           Each Party hereto shall cooperate and take any further actions,
and shall execute and deliver any further documents, that are reasonably
requested by a party hereto in order to effectuate or facilitate the purposes
and intents of this Second Amendment.

17.           This Second Amendment may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same agreement.

18.           The Exclusive Reseller Agreement, as amended by this Second
Amendment, sets forth the entire understanding and agreement of the Parties
hereto with respect to the subject matter thereof, and merges all prior
understandings and agreements with respect to the subject matter thereof.

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment No. 2 to be
executed as of the day and year first above written.

 

RESELLER:

 

 

 

 

VALASSIS SALES & MARKETING SERVICES, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Steven Mitzel

 

 

Name:     Steven Mitzel

 

 

Title:       Vice President

 

 

 

 

COMPANY:

 

 

 

 

 

 

 

INSIGNIA SYSTEMS, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Scott Drill

 

 

Name:    Scott Drill

 

 

Title:      CEO

 

 

 

 

 

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EXHIBIT C

Target Retailers

 

Retailer

 

[ * ]

 

 

 

Priority Listing

 

Immediate (30 – 60 Days)

 

[ * ]

 

 

 

 

60 – 90 Days

 

[ * ]

 

 

 

 

90 – 120 Days

 

[ * ]

 

 

 

 

On-Going

 

[ * ]

 

 

 

* Confidential treatment requested for this portion.

 

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