The Supply Agreement between Idea and Design Works, LLC and Diamond Comic Distributors, Inc., dated September 30, 2013 (fees, payment terms and other business terms redacted)

EX-10.14 2 ea136423ex10-14_idwmedia.htm THE SUPPLY AGREEMENT BETWEEN IDEA AND DESIGN WORKS, LLC AND DIAMOND COMIC DISTRIBUTORS, INC., DATED SEPTEMBER 30, 2013 (FEES, PAYMENT TERMS AND OTHER BUSINESS TERMS REDACTED)

Exhibit 10.14

 

Note: The fees, payment terms, and other business terms in the agreement and exhibits have been excluded because these terms are both not material and would likely cause competitive harm to IDW Media Holdings Inc. if publicly disclosed.

 

SUPPLY AGREEMENT

 

This SUPPLY AGREEMENT (the “Agreement”) is made and entered into as of September 30, 2013 (the “Effective Date”) by and between IDEA AND DESIGN WORKS, LLC d/b/a IDW Publishing, a limited liability company located at 5080 Santa Fe Street, San Diego, CA 92109 (“Seller”) and DIAMOND COMIC DISTRIBUTORS, INC, a Maryland corporation located at 10150 York Road, Hunt Valley, Maryland 21030 (“Buyer”).

 

WHEREAS, Seller is currently engaged in the business of publishing, manufacturing, selling, and distributing (i) comic books (collectively, the “Comic Books”), (ii) related graphic novel, trade paperback and hard-cover books and compilations of the Comic Books (collectively, the “Graphic Novels”), (iii) science fiction, fantasy and horror novels (collectively, the “Novels”), (iv) miniature, role playing and collectible card playing games (collectively, the “Games”), and (v) merchandise that is directly derivative of a Comic Book, Graphic Novel, Novel, Game, or merchandise as to which Seller creates, or obtains or licenses from a third party content owner only the merchandising rights, such as, by way of example only, a t-shirt that bears the cover image of a Comic Book or a hat containing the logo of a theatrical motion picture (collectively, the “Related Merchandise,” and together with the Comic Books, the Graphic Novels, the Novels and the Games, the “Products.”) Products described in (i) (ii) and (iii) above will be referred to as “Book Products” and Products described in (iv) and (v) above will be referred to as “Ancillary Products”. All references herein to “Products” shall refer only to the English-language version thereof; and

 

WHEREAS, Buyer is engaged in the business of selling and distributing Comic Books, Graphic Novels, Novels, Games, related merchandise and other pop culture items; and

 

WHEREAS, Seller desires to appoint Buyer as Seller’s distributor of the Products on the terms and conditions set forth in this Agreement; and

 

WHEREAS, Buyer desires to accept the appointments as distributor of the Products for Seller on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein contained, the sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1. Appointment: Territory.

 

(a) Seller hereby appoints Buyer as its sole and exclusive distributor worldwide for the sale and distribution of Book Products in the Book Market, and as a non-exclusive distributor of Ancillary Products in the Book Market. “Book Market” shall mean chain book store retailers and their internet affiliates; independent book stores (i.e., stores whose revenues are derived primarily from the sale of books, as opposed to magazines, comic books, or other items); and, for purposes of this Agreement, Amazon.com.

 

 

(b) Seller hereby appoints Buyer as its sole and exclusive distributor worldwide for the sale and distribution of Book Products in the Mass Market. Buyer is not appointed as distributor for Ancillary Products in the Mass Market. “Mass Market” shall mean mass-market merchandisers and their internet affiliates; libraries; and the wholesalers who service those accounts; warehouse clubs and specialty mass merchandisers/retailers, buying under Buyer’s returnable trade terms.

 

(c) Seller hereby appoints Buyer as its sole and exclusive distributor worldwide for the sale and distribution of Products in the Direct Market. “Direct Market” shall mean hobby and specialty game and comic retailers and wholesalers, and those stores (other than stores that fall within the definition of “Mass Market” or “Book Market” above) that are presently being served, or of the type being served, through the direct sales channel of distribution (as the term “direct sales” is commonly understood in the comic book industry), buying under Buyers non-returnable trade terms.

 

(d) Notwithstanding anything to the contrary set forth herein, the appointment of Buyer to serve as Seller’s exclusive distributor for Book Products as set forth above (i) shall apply to all Seller’s Book Product titles published under the Seller’s trademarks during the Term (as hereinafter defined) of this Agreement and (ii) shall not apply to “cross-over” books (unless Seller is the designated publisher of such “cross-over” book), “tour” books and “incentive” or “coupon” books (as such terms are commonly understood in the comic book industry).

 

(e) Seller shall retain the exclusive right to sell any service or product directly into book clubs, fan clubs, book fairs, Scholastic Books (collectively, the “Specialty Market”), and, subject to the terms set forth in the next sentence, any Direct Market, Book Market or Mass Market account to which Buyer chooses not to sell (an “External Account”). Seller shall notify Buyer of the identity of any External Account to which Seller desires the right to directly sell and, if Seller and Buyer do not within ten (10) business days after the date of such notice agree on terms pursuant to which Buyer will sell to such account, then Seller shall have the right to sell directly to such account. Buyer may notify Seller, from time to time, that it considers certain accounts to be “credit risk” accounts (a “Credit Risk Notice”), in which case Seller agrees to notify Buyer within ten (10) business days following its receipt of a Credit Risk Notice whether Seller agrees to assume the credit risk involved in continuing to have Buyer sell to such account.

 

(f) Seller shall retain the exclusive right to offer or sell to any third party at any time any service or product other than the Products using any media now known or hereafter invented.

 

(g) Subject to the terms and conditions of this Agreement, Buyer hereby accepts the appointments as Seller’s sole and exclusive distributor for the sale and distribution of the Products as set forth in Paragraphs 1(a), 1(b), 1(c) and 1(d) hereof during the Term and pursuant to the terms and conditions herein (collectively, the “Appointments”).

 

2. Term. The term of this Agreement (the “Term”) is for three years from the Commencement Date (as defined herein) with respect to Products shipped on or after such Commencement Date. “Commencement Date” shall mean October 1, 2013. Each year of the Term that starts on October 1 and ends on the following September 30 is referred to herein as a “Contract Year.”

 

 

3. Supply.

 

(a) During the Term, Seller hereby agrees to consign to Buyer, and Buyer hereby agrees to accept from Seller, such amounts of Products as are required to meet Buyer’s distribution needs, as such amounts are determined by Buyer in its reasonable discretion.

 

(b) Buyer shall place consignment orders (referred to herein as “Shipping Requests”) with Seller for all Products to be shipped to Buyer pursuant to the terms of this Agreement through delivery to Seller of a written or electronically transmitted document in the form attached hereto as Exhibit B (the “Purchase Order Form”) with such changes as may be mutually agreed upon by Buyer and Seller from time to time. Buyer shall deliver such Shipping Requests to Seller pursuant to Buyer’s Routing Guide and to the address provided for notices to Seller in this Agreement, or to such other address as may be provided by Seller to Buyer from time to time. In the event of any conflict between the terms of this Agreement and the Purchase Order Form, the terms of this Agreement shall control.

 

(c) Buyer will warehouse Products on consignment in a clean, dry, secure, and fire-protected facility.

 

(d) With respect to Products shipped to Buyer’s UK distribution facility, which ultimately cannot be sold to customers serviced by Buyer’s UK distribution facility, such Products may be returned to Buyer’s United States distribution facility (currently designated as Buyer’s Olive Branch, Mississippi facility) and associated freight costs will be deducted from the next Weekly Payment Amount due from Buyer to Seller. Buyer will give Seller 10 days prior notification of the intent to return Products to the United States, and Seller may elect to have Buyer either liquidate or destroy the Products, rather than return them, at Buyer’s sole cost and expense.

 

(e) Buyer will include all shipments of Products to its UK distribution facility in its regular sales reporting to Seller. Additionally, Buyer will provide Seller with an additional monthly report containing all sales and returns activity of UK Book Market customers, in order to calculate the appropriate additional UK Book Market fees outlined in Exhibit C of this Agreement. Such additional UK Book Market fees will be deducted from the first Weekly Payment Amount payable following the month for which such fees are calculated.

 

4. Distribution Services: Additional Services.

 

(a) Buyer shall perform each of the distribution and marketing services specified on Exhibit A hereto (collectively, the “Distribution Services”). Distribution Services shall be provided free of charge to Seller, except as otherwise specifically set forth on Exhibit A and in Paragraph 6 hereof. If, during the Term, Buyer offers any new Distribution Services to any other “Premier” publishers whose products are featured in its catalog, it will automatically be deemed to have offered those same Distribution Services to Seller on competitive terms with those offered  to any such “Premier” publisher; provided that such “Premier” publisher has overall market share (as determined by total sales dollars through Buyer) less than or equal to 2 times the overall market share (as determined by total sales dollars through Buyer) of Seller.

 

(b) [redacted]

 

5. Price for Products.

 

[redacted]

 

6. Payment Terms; Book Market Returns; Etc.

 

[redacted]

 

 

7. Title And Risk Of Loss; Inventory.

 

(a) All Products are to be held by Buyer on consignment, and remain the property of Seller until sold by Seller through Buyer. Seller shall retain title to Products while they are stored in Buyer’s distribution center, which title will pass to customers in accordance with Diamond’s Terms of Sale to such customer. Buyer will cooperate with Seller in the execution of any financing statements or continuations or amendments to financing statements Seller reasonably deems necessary to provide adequate notice of its rights as consignor hereunder, naming Buyer as consignee or debtor, and identifying the Products as consigned goods, and further authorizes Seller to file such financing statements in all filing offices Seller reasonably deems appropriate, provided that Seller provides Buyer with reasonable advance notice and copies of all such filings.

 

(b) [redacted].

 

(c) [redacted]

 

(d) [redacted].

 

(e) [redacted].

 

(f) If Buyer is requested by Seller to ship Product as a No Cost Replacement (as defined herein) then Buyer will charge Seller $15.00 per order, $2.00 per title and $.25 for each box shipped. “No Cost Replacement” shall mean Products and items distributed on behalf of the Seller that are not purchased by a Customer or intended for resale.

 

8. Intellectual Property.

 

(a) Seller hereby represents and warrants to Buyer that it owns or has a valid license for all rights, including intellectual property rights, required for the distribution of the Products by Buyer, including all required patents, trademarks (registered or unregistered), service marks, trade names, assumed names, copyrights and all applications therefor (collectively, the “Intellectual Property”). The performance by Buyer of its obligations hereunder will not infringe upon the Intellectual Property or any other rights of any third party. The execution, delivery and performance of this Agreement by Seller will not breach or conflict with any agreement between Seller and any third party.

 

(b) Buyer acknowledges Seller’s exclusive right, title, and interest in and to the Products and related trademarks, service marks, and any registrations that have been issued or may be issued, licensed or assigned to IDEA AND DESIGN WORKS, LLC d/b/a IDW PUBLISHING, IDW GAMES and/or IDW ENTERTAINMENT, (collectively, the “Trademarks”) and Buyer will not at any time knowingly do or cause to be done any act or thing contesting or impairing any part of such right, title, and interest. All rights in the Trademarks are reserved to Seller for its own use and benefit. Buyer acknowledges that Buyer shall not acquire any rights whatsoever in the Trademarks as a result of Buyer’s use thereof, and that use of the Trademarks by Buyer shall inure to the benefit of Seller.

 

 

(c) In connection with Buyer’s use of the Trademarks, Buyer shall not in any manner represent that Buyer has any ownership in the Trademarks, or in any material supplied to Buyer or created by Seller pursuant to this Agreement. Buyer agrees that Buyer shall not at any time apply for any registration of any copyright, trademark, service mark, or other designation, nor file any document with any governmental authority, or to take any action that would affect the ownership of the Trademarks or Seller’s copyrights or other intellectual property.

 

(d) Except as otherwise provided herein, upon termination of this Agreement, Buyer will not at any time thereafter adopt or use without Seller’s prior written consent, any word or mark which is identical or confusingly similar to the Trademarks.

 

(e) Buyer shall, or shall cause to be, permanently affixed to all advertising, promotional, and display material incorporating or relating to the Products and/or their contents in a reasonably prominent position in the following order and in the manner specified the following clause:

 

“© and ™ 20__ IDEA AND DESIGN WORKS, LLC., All Rights Reserved.”

 

(f) Buyer shall use no markings, legends, or notices on or in association with the Products, including advertising, other than as specified above and any notices as may from time to time be specified by Seller, without obtaining Seller’s prior written approval.

 

(g) The obligations set forth in this Paragraph 8 shall survive the termination of this Agreement.

 

9. Termination.

 

(a) Either party may terminate this Agreement prior to the expiration of the Term upon 45 days prior written notice to the other party if the other party has materially defaulted under the terms of this Agreement and has not cured such default during such 45-day notice period. Notwithstanding the foregoing, in the event of any material default by a party hereunder, which default is incapable of cure during such 45 -day period, the defaulting party shall have an additional 45 days to cure such default, provided, however, that such defaulting party is diligently attempting to cure such default. Such extended cure period shall not apply to the payment of amounts owed by a party under this Agreement.

 

(c) Notwithstanding Paragraph 9(b) hereof, this Agreement shall immediately terminate, upon receipt of written notice if:

 

(1) Buyer fails to abide by the terms of Paragraph 8 within 15 days after receipt of written notification of a violation of Paragraph 8;

 

(2) Buyer fails to pay amounts owed to Seller within the time stated in this Agreement and such failure continues for more than 15 days after Seller provides .written notice to Buyer that such amounts are owing to Seller;

 

(3) A party attempts to assign or sublicense any or all of the rights or obligations under this Agreement, other than to an affiliate, without the prior written approval of the other party;

 

 

(4) Buyer consummates a transaction or series of related transactions which cause the holders of the ownership interests in Buyer as of date of this Agreement to beneficially own less than fifty percent of the voting rights in Buyer; or

 

(5) Either Buyer or Seller files a petition in bankruptcy, is adjudicated a bankrupt, has a petition in bankruptcy filed against it (which is not dismissed within 60 days), becomes insolvent, makes an assignment for the benefit of its creditors or an arrangement pursuant to any bankruptcy law or other similar laws regarding insolvency, discontinues its business, or has a receiver appointed for it or its business, or any similar event has occurred with respect to Buyer or Seller.

 

10. Effect of Termination.

 

(a) Upon termination of this Agreement, all rights granted to Buyer hereunder shall immediately terminate, Seller shall be free to appoint others to act as distributor for Seller in the sale and distribution of Products, Buyer shall have no right to remainder Products, and Buyer shall have no further right to exploit or in any way deal with the Products, including, without limitation, the distribution of Products to Customers who have submitted orders to Buyer prior to the termination of this Agreement.

 

(b) If this Agreement is terminated as a result of a default by Buyer under this Agreement, all amounts owed to Seller shall become immediately due and payable and Seller shall have no further obligations to Buyer, monetarily or otherwise, other than for credits, allowances and payments otherwise due under this Agreement as of the date of termination. Seller reserves the right of offset of what is due Seller from Buyer against what Buyer owes Seller.

 

(c) If this Agreement is terminated as a result of a default by the Seller under this Agreement, all amounts owed to Buyer shall become immediately due and payable and Buyer shall have no further obligations to Seller, monetarily or otherwise, other than for credits, allowances and payments otherwise due under this Agreement as of the date of termination. Buyer reserves the right of offset of what is due Buyer from Seller against what Seller owes Buyer.

 

(d) Except as provided herein, the termination of this Agreement shall not relieve or release any party from any of its obligations existing prior to such termination. Upon termination of this Agreement, title to all material containing the Trademarks, or Seller’s copyrights, service marks, or similar rights shall be deemed to have automatically vested in Seller. Unless otherwise agreed to by Seller, Buyer shall immediately deliver such material to Seller, at Seller’s cost Buyer, at Seller’s option, may destroy such material at Seller’s cost, and upon such destruction furnish Seller a certificate of destruction satisfactory to Seller and signed by an officer of Buyer.

 

(e) [redacted].

 

(f) Promptly upon termination of this Agreement, Seller will remove at its own expense all Products held on consignment (“Inventory”) from Buyer’s distribution center. If Seller fails to remove such Inventory within sixty (60) days after the termination of this Agreement and written demand from Buyer that such Inventory be removed, Buyer shall have the right either to dispose of such Inventory as it deems best or to destroy such Inventory. Upon termination of this Agreement and in accordance with Section 3(d), Buyer will return the UK consignment and returned Book Market Products to Buyer’s U.S. Distribution Inventory Hub. If Seller prefers this UK Product to be destroyed, Buyer will do so at Seller’s request and at Seller’s sole cost and expense

 

 

11. Notices. All notices given to a party hereunder must be given in writing and either (a) delivered in person, (b) mailed by certified or registered mail, postage prepaid, return receipt requested, (c) transmitted by telephone facsimile transmission, or (d) sent by recognized overnight, express, or other prepaid receipted courier delivery service, as follows:

 

If to Seller:

IDEA AND DESIGN WORKS, LLC

5080 Santa Fe Street

San Diego, CA 92109

Attention: Ted Adams

Fax: (858) 270-1308

 

If to Buyer:

Diamond Comic Distributors, Inc.

10150 York Rd. Suite 300

Hunt Valley, Maryland 21030

Attention: Chief Operating Officer

Fax: (410) 683-7088

 

or to such other address as either party shall have designated in a notice to the other party. Each such notice shall be effective (i) if given by telecommunication, when transmitted to the appropriate number and the appropriate answer back is received or (ii) if given by any other means, upon receipt.

 

12. Independent Contractors: No Third Party Rights. Seller and Buyer are contractors independent of one another, and neither has the authority to bind the other to any third person or otherwise to act in any way as the representative of the other, unless otherwise expressly agreed to in writing signed by both parties hereto. Nothing set forth herein shall constitute a joint venture, partnership or similar relationship between Buyer and Seller. Nothing contained in this Agreement shall give or is intended to give any rights of any nature to any third party.

 

13. Force Majeure. Neither party shall be liable to the other for any failure of or delay in the performance of this Agreement for the period that such failure or delay is due to acts of God, public enemy, civil war, strikes or labor disputes or any other cause beyond that party’s control. The party limited by a force majeure agrees to notify the other promptly of the occurrence of any such cause and to carry out the terms of this Agreement as promptly as practicable after such cause is terminated.

 

 

14. Assignment: Binding Effect. Seller may assign the right to receive payments under this Agreement to any other person or entity upon written notice to Buyer and may assign this Agreement to any affiliate organized for the purpose of publishing the Products. Buyer may assign this Agreement to any affiliate of Buyer organized for the purpose of conducting substantially all of Buyer’s distribution activities, provided that Buyer remains secondarily liable pursuant to this Agreement. Notwithstanding the foregoing, this Agreement, and the rights and obligations of each party hereto, shall not be assigned without the prior written consent of the other party, which consent shall not be unreasonably withheld. Any purported assignment by a party in contravention of this Paragraph 14 shall be void and shall constitute material breach of this Agreement. All terms and provisions of this Agreement shall be binding upon, and inure to the benefit of, and be enforceable by Seller and Buyer and their respective successors, permitted assigns, and legal representatives.

 

15. Entire Agreement: Modification. Other than Buyer’s Purchase Order Form, this Agreement and any Exhibits attached hereto constitute the entire Agreement between the parties with respect to the subject matter hereof, and supersede all other prior oral and written representations, agreements, or understandings between them relating thereto, including but not limited to that certain Supply Agreement between the Parties executed and effective as of September 01, 2010. This Agreement and any Exhibits attached hereto (other than Buyer’s Purchase Order Form) may not be modified, altered or changed except by an instrument in writing signed by both parties. The failure of either Seller or Buyer to enforce, or the delay by Seller or Buyer in enforcing any of said party’s rights under this Agreement shall not be deemed a waiver or continuing waiver, and said party may, within such time as is provided by applicable law, commence appropriate suits, actions, or proceedings to enforce any or all such rights.

 

16. Applicable Law. This Agreement shall be deemed to have been entered into in the State of Maryland and shall be interpreted and construed in accordance with the laws of the State of Maryland applicable to agreements executed and to be fully performed therein. Both parties will attempt to resolve disputes and other problems regarding this Agreement with communication and respect for the Interests of the other party. In the event of a dispute, the parties are unable to resolve, the parties will attempt to agree on an arbitrator. Such disputes will be submitted to the selected arbitrator and will take place in the State of Maryland in accordance with the rules and regulations of the American Arbitrators Association. The decision of such arbitrator will be final and binding on the parties hereto, and it may be enforced in any court of jurisdiction.

 

17. Survival. All payment obligations hereunder and all obligations under Paragraphs 8 and 19 hereof shall survive the termination of this Agreement.

 

18. Severability. In the event that any provision of this Agreement, or any portion hereof, shall be declared invalid or unenforceable by a court of competent jurisdiction in any jurisdiction, such provision, or portion thereof, shall, as to such jurisdiction, be ineffective to the extent declared invalid or unenforceable without affecting the validity or enforceability of the other provisions of this Agreement, or any portion thereof, and the remainder of this Agreement shall remain binding on the parties hereto. However, in the event that any such provision, or any portion thereof, shall be declared unenforceable because of its scope, breadth, or duration, then it shall be automatically modified to the scope, breadth, or duration permitted by law and shall be fully enforceable in such jurisdiction as so modified as if such modification was made upon the effective date of this Agreement.

 

 

19. LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGE OF ANY KIND OR NATURE, INCLUDING LOST PROFITS, ARISING OUT OF THIS AGREEMENT, WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR STRICT LIABILITY, EXCEPT AS SET FORTH IN PARAGRAPH 20 HEREOF.

 

20. Confidentiality.

 

(a) The parties agree to use reasonable commercial efforts to keep confidential and not disclose the existence or terms of this Agreement without the prior written consent of the other party.

 

(b) In connection with the performance of its obligations hereunder, Buyer will be provided with access to certain information regarding Seller, including oral and written legal, business, financial and other information, ideas and data, in written, oral, electronic, photographic and/or other forms concerning Seller (collectively “Seller Confidential Information”). Such Seller Confidential Information shall be used by Buyer solely for the purpose of performing its obligations hereunder. The Seller Confidential Information is proprietary and confidential to Seller and is, and shall remain, the property of Seller. Buyer and its employees and agents shall hold the Seller Confidential information in strict confidence and shall not, without the prior written consent of Seller, disclose or release the Seller Confidential Information to either (a) persons within its organization not having a legitimate need to know, or (b) persons outside its organization. Upon written request from Seller, Buyer will and will cause its employees and agents to deliver promptly to Seller all documents (and all analyses, copies, extracts or summaries thereof) furnished to Buyer or its employees or agents by or on behalf of Seller pursuant hereto. All other Seller Confidential Information not returned to Seller, including all Seller Confidential Information prepared by Buyer or its employees or agents, shall be destroyed and no copy thereof shall be retained and, upon request, Buyer shall certify in writing to Seller that such action has been taken. Notwithstanding the return or destruction of the Seller Confidential Information, Buyer and its employees and agents will continue to be bound by its obligations of confidentiality hereunder.

 

(c) In connection with the performance of its obligations hereunder, Seller will be provided with access to certain information regarding Buyer, including oral and written legal, business financial and other information, ideas and data, in written, oral, electronic photographic and/or other forms concerning Buyer (collectively “Buyer Confidential Information”). Such Buyer Confidential Information shall be used by Seller solely for the purpose of performing its obligations hereunder. The Buyer Confidential Information is proprietary and confidential to Buyer and is, and shall remain, the property of Buyer. Seller and its employees and agents shall hold the Buyer Confidential Information in strict confidence and shall not, without the prior written consent of Buyer, disclose or release the Buyer Confidential Information to either (a) persons within its organization not having a legitimate need to know, or (b) persons outside its organization. Upon written request from Buyer, Seller will and will cause its employees and agents to deliver promptly to Buyer all documents (and all analyses, copies, extracts or summaries thereof) furnished to Seller or its employees or agents by or on behalf of Buyer pursuant hereto. All other Buyer Confidential Information not returned to Buyer, including all Buyer Confidential Information prepared by Seller or its employees or agents, shall be destroyed and no copy thereof shall be retained and, upon request, Seller shall certify in writing to Buyer that such action has been taken. Notwithstanding the return or destruction of the Buyer Confidential Information, Seller and its employees and agents will continue to be bound by its obligations of confidentiality hereunder.

 

 

(d) Notwithstanding anything to the contrary set forth in this Paragraph 20, the obligations of Paragraph 20 do not apply to the following:

 

(1)

disclosures (A) required by law or required to implement the terms of this Agreement or (B) to the parties’ respective counsel, accountants and financial advisors, provided that (y) in the case of the foregoing clause (A) the non-disclosing party shall be provided with notice and an opportunity to review any disclosure required by applicable law or regulation prior to its publication and (z) in the cases of the foregoing clauses (A) and (B) the receiving party is informed of the confidential nature of such matters, is instructed to keep them confidential and is liable for any unauthorized disclosure; and

 

(2)

Confidential Information that (A) at the time of an alleged breach hereof is part of the public domain (other than as a result of a breach of confidentiality obligations by the disclosing party), (B) has been disclosed, at the time of an alleged breach hereof, by the non-disclosing party to third parties without restrictions on disclosure, (C) has, at the time of an alleged breach hereof, been received by the disclosing party from a third party without breach of a nondisclosure obligation of the third party, or (D) has been independently developed by the disclosing party without access to the non-disclosing party’s Confidential Information.

 

(e) The parties acknowledge and agree that there would be no adequate remedy at law for, and that irreparable harm would result from, any material breach of the provisions of this Paragraph 20. Accordingly and notwithstanding the provisions of Paragraph 16 hereof, in the event of such a breach by one party, the other party shall be entitled to seek injunctive relief and to specific enforcement of the terms and provisions hereof, in addition to any other remedy to which such other party may be entitled at law or in equity. It is further understood and agreed that no failure to exercise, or delay in exercising, any right, power or privilege hereunder shall operate as a waiver thereof, and no single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise of any such right, power or privilege. If any action is initiated to enforce any of the provisions hereof, the prevailing party shall be entitled to reimbursement of all costs and expenses, including the reasonable fees and expenses of legal counsel, incurred by it in connection therewith.

 

21. Headings and Construction. Captions and headings contained in this Agreement have been included for ease of reference and convenience and will not be considered in interpreting or construing this Agreement. This Agreement will not be interpreted or construed in any particular manner based on considerations as to which party drafted this Agreement.

 

 

22. Release. By signing this Agreement, Seller and Buyer waive and release any claims either has against the other as of the Effective Date of this Agreement, except those arising from the post term audit rights as defined herein or in any prior agreement between the parties; provided, however, that with respect to any prior agreement such audit is conducted within one year of the Commencement Date.

 

23. Counterparts; Facsimile Signature Pages. This Agreement may be executed in counterparts, each of which will be deemed to be an original and all of which together will be considered one and the same instrument. Delivery of an executed signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Agreement.

 

{Signatures appear on next page}

 

 

IN WITNESS WHEREOF, the parties have caused this Supply Agreement to be executed and effective as of the Commencement Date and do each hereby warrant and represent that their respective signatory whose signature appears below has been and is on the date of this Agreement duly authorized by all necessary and appropriate corporate action to execute this Agreement.

 

	IDEA AND DESIGN WORKS, LLC d/b/a IDW Publishing
	By:	/s/ Greg Goldstein
	Name:	Greg Goldstein
	Title:	President and COO
	Date:	10/23/13
	DIAMOND COMIC DISTRIBUTORS, INC.
	By:	/s/ Larry R. Swanson
	Name:	Larry R. Swanson
	Title:	Treasurer
	Date:	10/23/13

 

 

EXHIBIT A

 

DIAMOND COMIC DISTRIBUTORS, INC. (“Buyer”) agrees to exercise commercially reasonable efforts in the performance of distribution and marketing services on behalf of IDEA AND DESIGN WORKS, LLC (“Seller”) during the Term. All defined terms used in this Exhibit A shall have the same meaning as defined in the Agreement by and between Buyer and Seller of even date herewith (the “Agreement”), unless otherwise specified herein. Unless otherwise specified herein, (a) all terms used herein to describe distribution and marketing services shall have the meaning customarily ascribed to them in the business of distributing Products to Customers; and (b) Buyer shall receive no fee or other compensation for any such Distribution Services other than the allowances specified in this Agreement. In addition to the items set forth below, Buyer shall provide Seller with a wide range of core distribution, marketing and consulting services in a manner consistent with industry standards, including communicating Customer feedback and market information to Seller. In addition, Buyer shall assist Seller in the development of programs and products and other similar services, at no fee, provided that (i) the service does not require customized computer programming and (ii) can reasonably be performed by the Brand Manager (as described in Section 3 below).

 

1. Buyer shall perform the following marketing services:

 

(a) Produce, publish and distribute a monthly catalog (currently known as Diamond Previews), suitable for consumers and retailers of Products offered by Buyer to the Direct Market.

 

(b) [redacted].

 

(c) [redacted].

 

2. [redacted].

 

3. Buyer will assign a brand manager mutually agreed upon by Buyer and Seller (the “Brand Manager”) to act as a liaison between Seller and all Buyer departments.

 

4. To the extent Buyer has a presence at major comic industry trade show events or book industry trade show events in North America (such as the San Diego Comic Con, Wizard World Chicago, American Library Association Conference, and Book Expo America convention), Buyer, at no charge to Seller, shall dedicate prominent placement of Seller’s Products as appropriate for the type of event.

 

5. [redacted].

 

6. To the extent Buyer produces a catalog or advertising booklet for distribution in the Book Market or for book industry trade show events, Buyer shall provide Seller, at no charge to Seller, a reasonable amount of editorial content to be provided by Seller as determined in Buyer’s sole discretion

 

 

7. [redacted]

 

8. Seller will receive a report once per week from Buyer with Direct Market customer service/sales feedback from Buyers outside sales reports, at no cost to Seller.

 

9. [redacted].

 

10. Buyer reserves the right to distribute any marketing or related materials provided for hereunder in digital format (eliminating print), provided, that the basic Direct Market and Book Market Services set forth herein are provided to Seller to the extent reasonably practicable in such digital format.

 

11. The Agreement, including all amendments, attachments, and exhibits thereto, is hereby incorporated by reference into this Exhibit A.

 

 

Exhibit B

 

PURCHASE ORDER TERMS

Diamond Comic Distributors, Inc.’s (“DCD”) Purchase Order Terms are to be maintained by Vendor in its permanent file and all orders placed by DCD with Vendor shall be accepted by Vendor under the terms and conditions of this document. These Purchase Order Terms supersede all prior written or oral agreements.

 

DCD shall place all orders with Vendor by any number of means including, but not limited to, mail, courier, facsimile transmission or other electronic means, and all such orders shall be construed as being subject to this document.

 

Vendor shall be deemed to have accepted DCD’s Purchase Order under the terms and conditions stated herein unless Vendor notifies the DCD Order Processing Department in writing within five (5) days of its receipt of the Purchase Order. Upon notification DCD will either cancel the existing Purchase Order and decide whether to place a new Purchase Order, or accept the product on a returnable basis subject to fees and conditions outlined below.

 

If the product and/or invoice is received with a different retail price, terms, or other documentation than stated on the Purchase Order, DCD may accept the most favorable terms and/or pay the lower of the two prices, and all products will be fully returnable.

 

In the event DCD accepts products on a returnable basis, DCD reserves the right, at its sole discretion, to withhold payment for such products, for up to 120 days from receipt of goods, and impose on Vendor a processing fee of $100.

 

Vendor shall include a packing list with each shipment to include title, DCD item code, quantity shipped and DCD’s purchase order number.

 

A scannable bar code must be printed or stickered on all items shipped. At DCD’s sole discretion, items received without a valid scannable bar code may be either returned to the vendor, or assessed a $150.00 per sku/per shipment processing fee, as well as an additional $.20 per piece fee to cover expenses associated with creating, printing and stickering each piece for distribution (both fees subject to future increases). Distribution of items which arrive without valid bar codes (and are not returned to the vendor) may be delayed up to three weeks. Vendor shall extend full return privileges to both DCD and Retailers on all items stickered by DCD. Both the processing charge and per piece fee are subject to future increases.

 

Notwithstanding orders for Themed Products (as hereinafter defined), any Purchase Order for a product which DCD is ordering for the first time (“Initial Order”) shall be valid for a period of thirty (30) days after the Vendor solicited ship month, after which date the Purchase Order shall be void and of no further force or effect.

 

 

If a Purchase Order is placed after the Initial Order for the same product (“Reorder”) the Reorder must ship within fourteen (14) days of delivery of the Initial Order shipment, or within fourteen (14) days of the order date printed on the Reorder, whichever is later. Any such reorders that do not ship within the above described time frame will be cancelled, or if indicated by DCD in writing, accepted on a fully returnable basis.

 

DCD requires that any and all items that are related to holidays or other media events (“Themed Products”) must ship at least twenty one (21) days prior to said holiday or event. Any such Themed Products that do not ship within the above described time frame will be canceled, or if indicated by DCD in writing, accepted on a fully returnable basis.

 

In the event Vendor ships product to DCD which has not been ordered by DCD, Vendor assumes all risk for the product. DCD shall be under no obligation to receive, store, secure, inventory, or return such unsolicited product to Vendor. DCD shall not be obligated to make any payment for such unsolicited product under any circumstances.

 

By accepting DCD’s Purchase Order, Vendor hereby warrants to DCD that (i) it owns all rights to market and sell the products to DCD as described in the Purchase Order; (ii) said products will be of good and salable quality; and are free of all liens, claims and encumbrances; (iii) said products conform to affirmations of fact made by Vendor in its solicitations, catalogs and product descriptions; and (iv) said products are adequately contained, packaged and labeled in compliance with law and conform to the promises and affirmations of fact made on the container and label. Vendor further agrees to indemnify and hold DCD, its agents, affiliates and subsidiaries (collectively “DCD”) harmless, from and against any loss, damage or expense suffered by DCD, including reasonable attorneys’ fees and costs, by reason of breach by Vendor of the warranties contained herein or any act or omission of Vendor or allegation of trademark, copyright or patent infringements, defects in material, workmanship or design, personal injury, property damage, unfair competition, obscenity, libel or other invaded right, either alone or in combination, and any settlement, judgment or payment with respect to any claim, lawsuit or cause of action against DCD as a result thereof. In addition to and not in limitation of any rights DCD may have under this paragraph, by law or statute, in the event a claim or allegation is made against DCD regarding any of the above or if Vendor breaches the warranties contained herein, DCD shall have the right, in its sole discretion, to either receive quantities DCD ordered, cancel the Purchase Order without further obligation on its part, or return the products to the Vendor for a full refund. Vendor shall reimburse DCD for all costs incurred due to the above.

 

Shipments of product shall be delivered F.O.B. to the location(s) designated on the Purchase Order, unless other arrangements have been agreed to by DCD, in writing.

 

Shipments from International Vendors must be shipped “deliver duty paid (DDP)”.

 

Should failure of Vendor to follow DCD’s shipping instructions result in freight cost in excess of what would have been incurred using the given instructions, Vendor shall reimburse DCD for the difference in cost.

 

The Purchase Order shall be governed by the laws of the State of Maryland, excepting the conflict of law rules of the State. In the event of any litigation arising out of the Purchase Order, Vendor hereby agrees that jurisdiction and venue shall rest exclusively within the courts of the State of Maryland, including the United States District Court for the District of Maryland.

 

 

If any term or provisions of these Purchase Order Terms are held by a court to be invalid, void, or unenforceable, the remainder of the terms and provisions of these Purchase Order Terms shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

Vendor shall not assign or transfer the Purchase Order or any part thereof or any right here/thereunder without DCD’s prior written consent.

 

These Purchase Order Terms are intended by the parties to be a final, exclusive and complete statement of the terms of their agreement, and acceptance is expressly limited to the terms stated herein. Neither trade usage nor any terms and conditions that may be contained in any acknowledgment, invoice or other documentation of Vendor, nor course of prior dealing between the parties shall be relevant to supplement or explain any terms used in the Purchase Order.

 

Should Vendor have any questions as to the meaning of any terminology or phrasing used in these Purchase Order Terms, Vendor shall get clarification from DCD. DCD’s Purchase Order Terms shall constitute the entire agreement between the parties and may not be modified or rescinded except by a writing signed by both parties.

 

PURCHASE ORDER SAMPLE

 

[redacted]

 

 

 

Exhibit C

Summary of Key Deal Points

 

[redacted]

 

 

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