playlogic10k123109x105_41510.htm


    
Exhibit 10.5

    
      
 

       

      


       

      


       

      Distribution
Agreement

       

      


       

      


       

      Playlogic
International N.V.

       

      -

       

      


       

      U&I
Entertainment LLC

       


      
        
           


        

        
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      Distribution
Agreement

       

      THIS AGREEMENT is dated March
16, 2009 by and between U&I
ENTERTAINMENT, LLC, having his registered address at 251 1st Ave
N#2, Minneapolis, MN 55401, USA and  Playlogic International
NV, a Dutch company having its registered address at World Trade Centre,
C-Tower 10th
Floor, Strawinksylaan 1041, 1077 XX, Amsterdam, the Netherlands.

       

       

      RECITALS:

       

      
        	
                 
      

              	
                A.

              	
                U
      & I is in the business of manufacturing, marketing and distributing
      software and related products.

              


      

       

      B.           Playlogic
is in the business of publishing software products.

       

      
        	
                 
      

              	
                C.

              	
                Playlogic
      desires to deliver to U & I the software products described in
      Addendum A for sale and distribution by U &
  I.

              


      

       

      NOW, THEREFORE, in
consideration of the mutual promises set forth in this Agreement, the parties
agree as follows:

       

      
        	
                1.

              	
                Definitions.

              


      

       

      "Customers"
means any individual or entity to whom Units are or may be distributed by U
& I.  Customers may include U & I, resellers and
retailers.

       

      "Distribution
Fee" means an amount equal to the Net Proceeds multiplied by the applicable
percentage set forth in Addendum A.

       

      "End
Users" means those persons who purchase for use one or more Units from
Customers.

       

      “Customer
Specific Programs” means the costs associated with marketing and merchandising
programs that are either required or mutually agreed to at
Customer.

       

      “Customer
Event Fees” means the costs associated with attending or exhibiting at Customer
specific events.

       

      “Logistic
Fees” means the costs associated with logistics. The estimated amount is
approximately USD 1.25 (one dollar and twenty five cents) per unit.

       

      “Future
Authorized Deductions” means all price protection and returns that have been
offered to retail customers but not yet deducted from receipts.

       

      “Imminent
Deductions Hold Back” means a hold back from Gross Receipts based on potential
deductions from retail.

       


      
        
           


        

        
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      "Marketing
Development Fund" or "MDF" means the costs associated with the marketing and
merchandising of each Version at Customer locations.

       

      “Net
Proceeds” means Wholesale Proceeds received in any given calendar month minus
Price Protection minus MDF minus Pre-Approved Returns minus Customer Specific
Programs minus Customer Event Fees minus Placement Fees minus Future Authorized
Deductions minus Imminent Deductions Hold Back minus the Distribution
Fee.

       

      “Placement
Fees” means the costs associated with securing retail shelf placement at
Customer.

       

      “Price
Protection” means price reductions granted to Customers after order and delivery
of Units to the Customer to facilitate retail sale efforts.

       

      "Pre-Approved
Returns" means Units of any Version of the Title returned by a Customer that are
pre-approved for return by Playlogic

       

      "Term"
means the period during which this Agreement shall be in effect, as set forth in
Section 6 below.

       

      "Territory" means reference Addendum
A.

       

      "Title"
means each software product published by Playlogic and listed on
Addendum A, together with all printed artwork, booklets, manuals, pamphlets
or other materials, prepared by or on behalf of Playlogic, which refer to or
relate to each respective Title.

       

      "Unit"
means one copy of one Version embodied on any storage device embodied on CD-ROM,
DVD, cartridge, or any other tangible medium now known or later devised, fully
packaged as a finished good and ready for shipment to Customers.

       

      "Version"
means the Title as designed to operate with software or other interactive media
environment or platform now known or later devised.  Examples of
Versions include software products developed for:  the IBM PC platform
utilizing the Windows XP operating system; the Apple Macintosh platform; and
console platform versions such as Sony Playstation2, PSP, Microsoft Xbox, and
Nintendo Gamecube.

       

      "Wholesale
Proceeds" means wholesale proceeds actually received by U & I from the
distribution of the Titles in any given calendar month.

       

      
        	
                2.

              	
                Grant of
      Rights.

              


      

       

      
        	
                 
      

              	
                a)

              	
                Rights
      Granted.  With respect to each Title, Playlogic hereby
      grants to U & I throughout the Territory, during the
    Term:

              


      

       


      
        
           


        

        
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                (i)

              	
                exclusive
      right to sell and distribute Units in North America and
      Canada.

              


      

       

      
        	
                 
      

              	
                b)

              	
                the
      non-exclusive right:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                to
      advertise, publicize and promote, in a manner reasonably acceptable to
      Playlogic, each Version by any means and in all media now known or later
      devised, subject to Playlogic’s prior written approval during the Term and
      within the Territory.

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                to
      use, publish and permit others to use and publish Playlogic’s trademarks,
      logos and other proprietary markings in conjunction with the advertising
      and promotion of Units.

              


      

       

      
        	
                3.

              	
                Obligations of U &
      I.

              


      

       

      


       

      3.1           Distribution and
Warehousing.

       

      
        	
                 
      

              	
                a)

              	
                U
      & I shall use commercially reasonable efforts to distribute Units to
      Customers.

              


      

       

      
        	
                 
      

              	
                b)

              	
                U
      & I shall be responsible for distributing and shipping Units
      to    Customers.

              


      

       

      
        	
                 
      

              	
                c)

              	
                U
      & I shall provide adequate and secure warehousing facilities for
      all   Units in
inventory.

              


      

       

      
        	
                 
      

              	
                d)

              	
                U
      & I shall be responsible for all billing, invoicing and related
      administrative procedures associated with order taking, distribution and
      shipping of the Units.

              


      

       

      
        	
                 
      

              	
                e)

              	
                U
      & I will promptly notify Playlogic in writing of any known
      infringement of Playlogic’s propriety rights which comes to U & I’s
      attention.  U & I agrees to cooperate, at Playlogic’s
      expense, in connection with Playlogic’s reasonable efforts to protect its
      proprietary rights in the Titles.

              


      

       

      
        	
                 
      

              	
                f
      )

              	
                For
      the fence of doubt it is clear between Parties that U & I will be
      responsible of the management and that Playlogic will be responsible for
      the costs involved with the
logistic.

              


      

       

      


       

      3.2           Trade
Marketing.

       

      
        	
                 
      

              	
                a)

              	
                U
      & I shall use commercially reasonable efforts to trade market the
      Units to the  Customers.

              


      

       


      
        
           


        

        
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                b)

              	
                U
      & I shall provide recommendations and assist Playlogic in developing
      strategies to be implemented by Playlogic to help stimulate the sale of
      the Units, provided that U & I shall not be obligated to incur any
      costs associated with retaining or employing third
  parties.

              


      

       

      
        	
                 
      

              	
                c)

              	
                U
      & I  will provide Playlogic with regular reports which shall
      include the following information, if available; a summary of the number
      of Units distributed to each Customer, sold through, and the number of
      Units returned since the last report
issued.

              


      

       

      
        	
                 
      

              	
                d)

              	
                U
      & I shall advise Playlogic on matters relating to marketing,
      placement, promotion and sell through of Titles by each
      Customer.

              


      

       

      
        	
                 
      

              	
                e)

              	
                U
      & I shall obtain approval from Playlogic prior to authorizing trade
      marketing and MDF or Price Protection for a
  Customer.

              


      

       

      3.3           Insurance

       

      
        	
                 
      

              	
                a)

              	
                U
      & I shall undertake to maintain and keep in force, in adequate
      amounts, an insurance on manufactured copies of the Titles described in
      Addendum A to be delivered to U & I by Playlogic and to be stored by U
      & I as stock, at a company accepted by Playlogic, that is common in
      the videogame business, including a fire insurance and a extended coverage
      insurance. In case of loss, the amount payable will be paid to Playlogic.
      Playlogic may request to see the original of all policies and/or
      certificates of insurance on the stock as described above during the
      duration of this agreement and until the last payment and/or performance
      of an obligation under this agreement including Logistic
    Fees.

              


      

       

      4. Obligations of
Playlogic.

       

      
        	
                 
      

              	
                4.1  Software.

              


      

       

      
        	
                 
      

              	
                a)

              	
                Playlogic
      shall provide U & I with finished goods of the Title or Titles in each
      Version.

              


      

       

      4.2  Technical
Support.

       

      
        	
                 
      

              	
                a)

              	
                Playlogic
      will provide technical support for each Version in the Territory to U
      & I, Customers and End Users.  Technical support will
      include, without limitation, warranty service and email
      support.  Playlogic will have personnel knowledgeable of the
      technical and the application aspects of each Version available to answer
      support questions during regular business hours.  During the
      Term of this Agreement, each party agrees to inform the other promptly of
      any known defects or operational errors affecting any
    Version.

              


      

       


      
        
           


        

        
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                4.3  Testing.

              


      

       

      
        	
                 
      

              	
                a)

              	
                Prior
      to the delivery of Titles to U & I , Playlogic agrees to test each
      Version to make certain that each Version, to the best of Playlogic’s
      knowledge, is bug-free and fully functional in the different
      configurations in which the Version is designated to run and for all
      peripherals with which each Version is designated to
  work.

              


      

       

      4.4  Changes.

       

      
        	
                 
      

              	
                a)

              	
                Playlogic
      will give U & I notice at least thirty (30) days prior to any material
      modification to a Title or any Version, including, without limitation,
      Playlogic’s decisions to discontinue or materially enhance any Title or
      Version.  Playlogic shall promptly provide U & I with master
      disks embodying all updates and
enhancements.

              


      

       

      4.5  Marketing.

       

      
        	
                 
      

              	
                a)

              	
                Notwithstanding
      U & I ’s rights set forth in Section 2.1, throughout the Term,
      Playlogic will use its commercially reasonable efforts to advertise,
      market and promote the Titles throughout the
  Territory.

              


      

       

      
        	
                 
      

              	
                b)

              	
                Playlogic
      shall provide to U & I thirty (30) days prior to the street date of
      each Version and upon reasonable request thereafter, at no cost to U &
      I, copies of each of the following materials for purposes of facilitating
      the promotion of that Version by U & I: demonstration copies,
      specification sheets, sell sheets and any other available promotional
      material.

              


      

       

      
        	
                 
      

              	
                4.6  Insurance.

              


      

       

      
        	
                 
      

              	
                a)

              	
                During
      the Term of this Agreement, Playlogic will at all times maintain at its
      own cost comprehensive general liability insurance, Playlogic’s liability
      and errors and omissions insurance.  Each policy shall have
      coverage of at least one million dollars ($1,000,000) per occurrence/three
      million dollars ($3,000,000) in the aggregate.  Each policy
      shall be in a form reasonably acceptable to U & I and shall be issued
      by an insurance company with a rating of A or better as set forth in the
      most current

              


      

       

      
        	
                 
      

              	
                4.7  Best Insurance
      Guide.

              


      

       

      
        	
                 
      

              	
                a)

              	
                At
      the request of U & I, Playlogic shall add U & I as an additional
      insured to each policy and furnish certificates evidencing that
      insurance.

              


      

       

      4.8           Distribution.

       

      
        	
                 
      

              	
                a)

              	
                Playlogic
      will be responsible for all fees associated with shipping Units including
      handling, storage and freight. The amounts will be deducted from payment
      as described under the definition of Net
  Proceeds.

              


      

       


      
        
           


        

        
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                    5.

                  	
                    Compensation.

                  


          

           

        

      

      
        	
                5.1.1

              	
                Net Proceeds.
      On the tenth day of each calendar month, U & I shall pay 100% of Net
      Proceeds minus the Distribution Fee for the prior calendar month to
      Playlogic. See Addendum B for sample
statement.

              


      

       

      
        	
                5.2

              	
                Accounting.

              


      

       

      
        	
                5.2.1

              	
                Along
      with any Net Proceeds due, U & I shall submit a report to Playlogic
      showing Wholesale Proceeds, Price Protection, MDF, Returns, the Logistic
      Fees and any other costs permitted to be deducted under the terms of this
      Agreement.

              


      

       

      
        	
                5.2.2

              	
                Playlogic
      will have the right, exercisable not more than once every six (6) months,
      at Playlogic’s expense, to examine or have its agents examine, such books,
      records and accounts during U & I ’s normal business hours to verify
      the payments due by U & I to Playlogic hereunder. If the examination
      shows the amount paid was insufficient and the difference between the
      actual amount paid due more than 5% than U & I will be responsible for
      the costs of the examination.

              


      

       

      
        	
                5.2.3

              	
                On
      a quarterly basis, U & I and Playlogic will discuss the Imminent
      Deduction Hold Back amount from the previous quarter and will decide on a
      mutually agreeable reconciliation if
  appropriate.

              


      

       

      
        	
                6.

              	
                Term.

              


      

       

      Subject
to Section 7 below, the term of this Agreement shall commence as of the date
hereof and shall continue for six (6) months, and shall automatically renew for
additional renewal terms of six (6) months unless notice of termination is
received by any party at least thirty (30) days prior to the expiration of the
initial term or any renewal term.

       

      
        	
                7.

              	
                Termination.

              


      

       

      
        	
                7.1

              	
                Termination for
      Breach.  In the event of a material breach by either
      party, which breach is not cured within thirty (30) days after written
      notice by the non breaching party, the non breaching party may, upon
      written notice to the breaching party, terminate this Agreement in its
      entirety or only in respect to the Version to which the breach
      applies.

              


      

       

      
        	
                7.2

              	
                  Upon
      termination, the non breaching party will have the right to pursue any
      remedies it may have at law or in
equity.

              


      

       

      
        	
                7.3

              	
                Immediate
      Termination.  Either party may immediately terminate this
      agreement if (i) a receiver is appointed for the other party or its
      property; (ii) the other party becomes insolvent or is unable to pay its
      debts as they mature, or makes an assignment for the benefit of its
      creditors; (iii) the other party seeks relief or if proceedings are
      commenced against the other party or on its behalf under any bankruptcy,
      insolvency or debtor's relief law, and those proceedings have not been
      vacated or set aside within sixty (60) days from the date of their
      commencement; or (iv) if the other party is liquidated or
      dissolved

              


      

       


      
        
           


        

        
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      7.4 Vendor of Record Status
Termination.  In the event that Playlogic secures vendor of
record status at Customer(s), Playlogic may terminate the agreement in respect
to the customer with which vendor of record status has been
secured.

       

      7.5.
Early Termination by
Playlogic. Without prejudice to any other rights, either party may
terminate this Agreement in its entirety or with respect to 1 (one) or more
specific Titles at Playlogic’s sole discretion, after a period of 9 months from
the signing of this agreement, up until 6 (six) weeks before the respective
North American release date of said Title(s) as described in Addendum A, with or
without cause upon written notice (by certified mail) to U & I or such
termination, which shall be deemed effective when received by U & I.
Playlogic may remove a single title from the agreement, without cause, up until
8 (eight) weeks before the respective North American release date of said
title.  No more than two titles may be removed from the agreement
during the initial nine months following execution of the
agreement.  Playlogic agrees that U&I is allowed 30 (thirty) days
to match any offer that Playlogic receives from any party on any title that
Playlogic requests to remove during the term of this agreement.

      


      7.6  Return of stock.
After termination of the Agreement for any reason, any Title that have been
delivered to U & I by Playlogic that, at the moment of termination, have not
been sold yet by Distributor, will be returned to Playlogic immediately
thereafter.

      


       

      7.7  Effect of Termination.  Upon
termination of this agreement:

       

      (a)  Upon
termination, Playlogic and U & I will establish a mutually agreeable payment
plan based on historic sell through patterns and any anticipated, imminent or
potential exposure at retail.

       

      (b)  U
& I may return all unsold units of product to manufacturer and/or sell
remaining inventory with Playlogic’s approval.

       

      (c)  Paragraphs
1, 5, 7.3, 8, 9, 10, 11, 12.1, 12.2, 12.6, and 12.09 shall survive termination
of this Agreement.

       

      
        8.  Freedom to
Compete.

      

       

      Subject
to the rights granted to U & I herein, each party agrees that nothing in
this Agreement will be construed as restricting or prohibiting either party from
lawfully competing with the other party in any other aspects of its business,
including, without limitation, development of and/or distribution of other
software products and services.  Without limiting the generality of
the foregoing, each party acknowledges that the other party is in the business
of creating and publishing software products for a variety of hardware platforms
and related hardware products, that the other party maintains and continually
seeks relationships with other parties, and that the other party maintains and
continually seeks licensing or similar arrangements with other
parties.  Each party

       


      
        
           


        

        
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      agrees
that nothing in this Agreement will be construed as restricting or prohibiting
the other party from continuing its business in any lawful manner and without
limitation the other party may at its sole discretion at any time during or
after the term of this Agreement (a) create, publish, manufacture, market and
distribute any other products, even if such products are competitive and similar
to the Titles; and (b) enter into and maintain relationships with any other
party, even if such parties are competitors, or licensors of the other
party.

       

      
        	
                9.

              	
                Representations and
      Warranties.

              


      

       

      
        	
                9.1.2.1

              	
                Playlogic
      represents and warrants to U & I
that:

              


      

       

      
        	
                9.1.2.1.1

              	
                It
      has the full right, power and authority to enter into this Agreement, to
      carry out its terms and to grant the rights, licenses and privileges
      granted under this Agreement;

              


      

       

      
        	
                9.1.2.1.2

              	
                Playlogic
      has all necessary rights, title and interest in and to the Titles and the
      Versions and all other materials furnished to U & I under this
      Agreement to grant U & I the rights granted
  hereunder;

              


      

       

      
        	
                9.1.2.2

              	
                The
      Titles and other materials furnished to U & I by and on behalf of
      Playlogic, under this Agreement do not infringe upon, or misappropriate,
      any copyright, trade secret or any other proprietary rights of any third
      party;

              


      

       

      
        	
                9.1.2.3

              	
                Each
      Version will perform substantially in accordance with Playlogic’s
      specifications and express warranties for each respective
      Version;

              


      

       

      
        	
                9.1.2.4

              	
                Playlogic
      has not and shall not assign, transfer, lease, convey or grant a security
      interest or otherwise similarly dispose of the Titles to a third party
      unless such third party agrees to be bound by the terms of this Agreement;
      and

              


      

       

      
        	
                9.1.2.5

              	
                Prior
      to delivery of master disks or finished goods to Distributor, Playlogic
      will obtain all necessary rights from any and all hardware manufacturers
      (e.g. Microsoft, Sony and Nintendo) to perform its obligations with
      respect to any Title or Version.

              


      

       

      
        	
                9.1.3

              	
                U
      & I represents and warrants to Playlogic
  that:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                It
      has the full right, power and authority to enter into this Agreement, to
      carry out its terms and to grant the rights, licenses and privileges
      granted in this Agreement.

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                It
      has all necessary rights, title and interest in and to the materials
      furnished by it and incorporated into the
Units;

              


      

       


      
        
           


        

        
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                (iii)

              	
                Materials
      furnished by U & I under this Agreement do not infringe upon or
      misappropriate any copyright, trade secret or any other proprietary rights
      of any third party.

              


      

       

      
        	
                10.

              	
                Indemnification.

              


      

       

      
        	
                10.1

              	
                Playlogic
      Indemnity.  Playlogic agrees to indemnify, hold harmless
      and defend U & I, its subsidiaries, affiliates and their respective
      officers, directors and employees from and against all claims, losses,
      defense costs (including reasonable attorneys' fees), judgments and other
      expenses related to or arising out of:  (a) the breach of its
      representations, warranties and covenants hereunder; (b) any product
      liability with respect to any Title; (c) the alleged infringement or
      violation of any trademark, copyright, trade secret, patent or other
      proprietary right with respect to any Title; and (d) any unfair trade
      practice, trade libel or misrepresentation based on any promotional
      material, packaging, documentation or other materials provided by
      Playlogic with respect to any Title, provided that Playlogic shall have no
      indemnification obligations hereunder to the extent any such claims,
      losses or costs relate to or arise out of U & I 's gross negligence,
      willful misconduct or breach of this agreement.  Playlogic's
      obligation to indemnify is conditioned on (i) U & I notifying
      Playlogic of any such claim as to which indemnification will be sought
      promptly after U & I learns of such claim and (ii) providing Playlogic
      reasonable cooperation in the defense and settlement
      thereof.  Playlogic shall have the right to control the defense
      and settlement of any such claim at Playlogic's expense and to choose
      counsel for such purpose, provided that (other than with respect to claims
      for money damages for which U & I is indemnified hereunder) Playlogic
      may not settle any such claim without U & I's prior written consent,
      which consent shall not be unreasonably withheld or delayed.  U
      & I may retain counsel (at U & I 's sole option and expense) with
      respect to any such claim, and Playlogic shall ensure that its counsel
      reasonably cooperates with U & I 's counsel in the course of such
      defense.  If Playlogic does not fulfill its indemnification
      obligations in good faith, U &I will have the right to defend and
      settle any claim for which it was entitled to indemnification under this
      agreement and to receive reimbursement from Playlogic for all of its
      reasonable costs (including attorneys fees and costs) in defending and
      settling such claim.

              


      

       

      
        	
                10.2

              	
                U & I
      Indemnification.  U & I agrees to indemnify, hold
      harmless and defend Playlogic, its subsidiaries, affiliates and their
      respective officers, directors and employees from and against all claims,
      losses, defense costs (including reasonable attorneys' fees), judgments
      and other expenses arising out of:  (a) the breach of its
      representations, warranties and covenants hereunder and (b) any unfair
      trade practice, trade libel of misrepresentation based on any promotional
      material, packaging documentation or other materials provided by U & I
      with respect to any Title, provided that U & I shall have no
      indemnification obligations hereunder to the extent any such claims,
      losses or costs relate to or arise out of Playlogic's gross negligence,
      willful misconduct, breach of this agreement or any materials provided by
      Playlogic pursuant to this
agreement.

              


      

       


      
        
           


        

        
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                U
      & I 's obligation to indemnify is conditioned on Playlogic notifying U
      & I of any such claim as to which indemnification will be sought
      promptly after Playlogic learns of such claim, and providing U & I
      reasonable cooperation in the defense and settlement
      thereof.  Provided that U & I is fulfilling its
      indemnification obligations hereunder in good faith, U & I shall have
      the right to control the defense and settlement of any such claim at U
      & I 's expense and to choose counsel for such purpose, provided that U
      & I may not settle any such claim without Playlogic’s prior written
      consent, which consent shall not be unreasonably withheld or
      delayed.  Playlogic may retain counsel (as Playlogic’s sole
      option and expense) with respect to any such claim, and U & I shall
      ensure that its counsel reasonably cooperates with Playlogic’s counsel in
      the course of such defense.  If U & I does not fulfill its
      indemnification obligations in good faith, Playlogic will have the right
      to defend and settle any  claim for which it was entitled to
      indemnification and to receive reimbursement from U & I for all of its
      reasonable costs (including attorneys fees and costs) in defending and
      settling this claim.

              


      

       

      
        	
                10.3

              	
                LIMITATION OF
      LIABILITY.  BOTH PARTIES AGREE THAT TO THE EXTENT
      PERMISSIBLE BY APPLICABLE LAW, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY
      BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL
      DAMAGES OR LOST PROFITS, ARISING IN CONNECTION WITH THIS AGREEMENT, OR, ON
      ACCOUNT OF ITS TERMINATION, EVEN IF APPRAISED OF THE LIKELIHOOD OF SUCH
      DAMAGES OCCURRING.

              


      

       

      
        	
                11

              	
                Confidentiality.

              


      

       

      
        	
                11.1

              	
                Confidential
      Information.  During the Term of this agreement,
      Playlogic and U & I may be exposed to certain information that is
      confidential to the other party and is not generally known to the public,
      including without limitation (a) quantities, dollar volumes, and revenue
      of Units, (b) the terms of this agreement including Wholesale Proceeds,
      marketing funds and like information, and (c) business and marketing
      plans, future products, research and development.  Each party
      agrees respectively, that for a period of three (3) years after its
      initial receipt of the other party's confidential information it will not,
      and will cause its employees, agents, contractors, and like entities to
      not, use in any way for its own account or the account of any third party,
      nor disclose to any third party, any such confidential information without
      the prior written consent of the other party, except to employees, agents,
      contractors and like entities solely as required to fulfill the purposes
      of this Agreement, provided any such third parties agree in writing to be
      bound by the confidentiality obligations under this
      agreement.  Playlogic and U & I agree that they will
      safeguard the confidential information which each party may receive from
      the other party for the period set forth above with the same degree of
      care used to protect its own information of a like nature but in no
      circumstances less than reasonable
care.

              


      

       


      
        
           


        

        
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                11.2

              	
                Non-Confidential
      Information.  Section 11.1 above shall not be
      applicable to any information:  (a) which is in the public
      domain or which becomes part of the public domain through no fault on the
      part of the receiving party; (b) which is known to the receiving party
      prior to the disclosure thereof by the disclosing party, as established by
      documentary evidence; (c) which is lawfully received by the receiving
      party from a third party who provided, such information without breach of
      any separate confidentiality obligation owed to the disclosing party; (d)
      which is disclosed by the disclosing party to any third party without
      restriction on further disclosure; (e) which is independently developed by
      personnel having no access to the disclosing party's confidential
      information as established by documentary evidence, or (f) which is
      required to be disclosed pursuant to any governmental, judicial or
      administrative order, subpoena or discovery request (in which case,
      receiving party shall promptly notify disclosing party of such order and
      reasonably cooperate with the disclosing party in seeking to enjoin the
      disclosure of such information).

              


      

       

      
        	
                11.3

              	
                Notices.  Any
      notice required or permitted to be given or sent under this agreement will
      be deemed delivered if hand delivered or if mailed, postage prepaid, by
      registered, express or certified mail, return receipt requested, or by any
      nationally-recognized private express courier, to either party at the
      address listed below, or to such other address of which either party may
      so notify the other, as of the date such notice is
    received.

              


      

       

      
        
          	
                  If
      to Playlogic:

                	
                  Playlogic
      International N.V.

                
	 
      	
                  World
      Trade Centre

                
	 
      	
                  Strawinskylaan
      1041

                
	 
      	
                  1077
      XX Amsterdam

                
	 
      	
                  Attn:           Mr. C.Prak

                
	 
      	
                  Phone:  0031620065747

                
	 
      	 
      
	 
      	 
      
	
                  With
      a copy to:

                	
                  Mr. Frank Dijkstra

                
	 
      	
                  Dijkstra
      Voermans advocatuur

                
	 
      	
                  Winthonlaan
      2

                
	 
      	
                  3526
      KV Utrecht

                
	 
      	
                  Phone:  030-2850300

                
	 
      	 
      
	
                  If
      to U &
      I                      :

                	
                  U
      & I, Inc.

                
	 
      	
                  251
      1st
      Avenue North

                
	 
      	
                  Minneapolis,
      MN  55401

                
	 
      	
                  Attn:  Marty
      Hawk

                
	 
      	
                  Phone:  (612)
      333-5300

                
	 
      	
                  Fax:  (612)
      335-9604

                


           

        


       


      
        
           


        

        
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                  With
      a copy to:

                	
                  Gray
      Plant Mooty

                
	 
      	
                  80
      South Eighth Street, Suite 500

                  Minneapolis,
      MN  55402                                           

                
	 
      	
                  Attn:  Barry
      Clegg

                
	 
      	
                  Phone:  (612)
      632-3220

                
	 
      	
                  Fax:  (612)
      632-4220

                


        

         

      

      
        	
                11.4

              	
                Governing
      Law/Forum. Parties agree that any and all disputes between the
      parties arising from or related to this Agreement up to an amount of USD
      200.000 DOLLAR shall be subject to the laws of Minnesota, USA and parties
      submit to the jurisdiction of the Federal State courts located in
      Minnesota. Parties agree that any and all dispute between the parties
      arising from or related to this agreement above the amount of USD 200,000
      DOLLAR shall be subject to the laws of the Netherlands and parties submit
      to the jurisdiction of the Federal State courts located in Amsterdam.
      Parties further agree that prior to either party submitting any concerns
      or disputes to the courts of any nature related to this agreement, that
      either has 60 days to resolve the issues as identified and described by
      the other.  Any such concerns are subject to the terms of
      Notification herein.

              


      

       

      
        	
                11.5

              	
                Force
      Majeure.  Neither party will be deemed in default of this
      agreement to the extent that performance of its obligations, or attempts
      to cure any breach is delayed or prevented by reason of any act of God,
      fire, natural disaster, accident, act of government, shortages of material
      or supplies or any other cause not being under the control of such party
      ("Force Majeure"), provided that such party gives the other party prompt
      written notice thereof promptly and uses its good faith effort to continue
      to cure any breach.  In the event that either party's
      performance is delayed for more than thirty (30) days from the date such
      Force Majeure arose, the party whose performance is not affected may
      terminate this Agreement without further liability (but subject to either
      party's obligation to pay the other party any amounts which have or will
      become due) upon notice to the affected party if the Force Majeure is
      continuing.

              


      

       

      
        	
                11.6

              	
                Amendment.  No
      amendment or modification of this agreement will be made except by an
      instrument in writing signed by both parties.  The failure of
      either party to prosecute its right with respect to any single or
      continued breach of this agreement will not act as a waiver of the right
      of that party to later exercise any right or remedy with respect to that
      breach or any other breach of this agreement by the other
      party.

              


      

       

      
        	
                11.7

              	
                Relationship.  The
      relationship between U & I and Playlogic will be that of independent
      contractors.  Each party is not and shall not be deemed to be an
      employee, agent, partner or legal representative of the other for any
      purpose and shall not have any right, power or authority to create any
      obligation or responsibility on behalf of the
  other.

              


      

       

      
        	
                11.8

              	
                Severability.  If
      any provision of this agreement is found invalid or unenforceable pursuant
      to judicial decree, such provision will be enforced
  to

              


      

       


      
        
           


        

        
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                the
      maximum extent permissible and the remainder of this agreement will remain
      in full force and effect according to its
terms.

              


      

       

      
        	
                11.9

              	
                Assignment.  Neither
      party may assign any of its rights hereunder without the prior written
      consent of the non-assigning party, which will not be unreasonably
      withheld, provided that either party may assign this agreement, without
      the other party's consent, (a) to a parent company, a subsidiary of a
      parent company or a subsidiary provided that such entity has similar
      capabilities to perform the obligations to those of the assigning party or
      (b) to a third party which acquires the assigning party, merges with the
      assigning party or acquires all or substantially all of the assigning
      party's assets.

              


      

       

      
        	
                11.10

              	
                Modification.
      Modification to this Agreement (and the Appendices hereof) can be made in
      writing, through an Addendum which has to be signed by both parties.
      

              


      

       

      
        	
                11.11

              	
                Goodwill. U
      & I covenants that all goodwill associated with the trademarks
      relating to the Titles, other than trademarks developed or owned by U
      & I hall inure directly and exclusively to the benefit of Playlogic,
      as the case may be.  U &
      I  or  Playlogic shall not at any time acquire or
      claim any right, title or interest in the other's trademarks or service
      marks other than those rights expressly granted.  All right,
      title or interest in either party's trademarks and service marks which
      come into existence as a result, or during the term of, the exercise by U
      & I  or Playlogic of any right granted to it hereunder shall
      immediately vest in the applicable
party.

              


      

       

      
        	
                11.12

              	
                Entire
      Agreement.  This agreement and the Exhibits attached
      hereto state the entire agreement between the parties relating to the
      subject matter of this agreement and supersede any and all prior
      agreements and communications, written or oral.  This agreement
      may be executed by facsimile and in counterparts and shall constitute a
      valid, binding agreement.

              


      

       

      IN WITNESS WHEREOF, the
parties hereto have executed the agreement by their duly authorized
representatives as set forth below.

       

      
        	
                U&I
      Entertainment, LLC.

              	
                PLAYLOGIC
      ENTERTAINMENT, INC.

              
	
                 

                By:  /s/
      Marty Hawk                                                              

                Name:
      Marty Hawk

                Title:CEO                                                                

              	
                 

                By:  /s/ W.M.
      Smit                                                              

                Name: W.M.
      Smit

                Title:CEO
      &
      President                                                                

              


      

      


       


      
        
           


        

        
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      ADDENDUM
A

       

      


       

      Distribution
Fee:           6%

       

      Accrual/Reserve for Price
Protections:    15% of gross revenue
(gross revenue = units sold times unit cost to retail). To be reconciled with
actuals every 3 months. If actuals are less than accrual, U & I will credit
Playlogic the balance. In the event price protections exceed 15(fifteen)%, U
& I will deduct actuals as they occur. With the exception of FairyTale
Fights X360, PS3 and PC – which will have a holdback amount of
10(ten)%.

       

      Titles:

      
         

        
          	
                  Building
      & Co

                	
                  PC

                
	
                  Sudoku
      Ball

                	
                  Wii,
      DS, PC,

                
	
                  Infernal

                	
                  XBOX
      360

                
	
                  Obscure                                           

                	
                  DS
      & PSP,

                
	
                  Worldshift

                	
                  PC

                
	
                  They
      Came From Upstairs

                	
                  WII,DS,PS2,
      PC,

                
	
                  Vertigo                                

                	
                  PC,
      WII

                
	
                  Zooloreto                                           

                	
                  DS,
      PC

                
	
                  Pool
      Hall
      Pro                                           

                	
                  WII,
      PC

                
	
                  Young
      Archeologists                                           

                	
                  DS,
      PC

                
	
                  Age
      of Pirates
      2                                

                	
                  PC

                
	
                  Fairytale
      Fights                                           

                	
                  XBOX
      360, PS3, PC

                


        

        


        * Any
additions, deletions or substitutions of Titles and/or Versions in this Addendum
A shall be made only in accordance with Section

      

      


      



      
        
           


        

        
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