playlogic10k123109x106_41510.htm


     

    Exhibit 10.6

     

     

    KOCH MEDIA


    Terms
Summary

    


    


    
      	
               
      

            	
              Parties

            


    

    


    Playlogic
International NV, having its registered office and place of business at World
Trade Centre, C-Tower 10th
Floor, Strawinskylaan 1041, 1077 XX Amsterdam, including all its affiliates,
duly represented by Willem W. Smit, CEO of Playlogic, hereinafter referred to as
“Supplier”;

    


    and

    


    
      	
               
      

            	
              Koch
      Media GmbH having its registered office and place of business at
      Gewerbegebiet 1, A-6604 Höfen, Austria, hereinafter referred to as “Koch”

            


    

    


    
      	
               
      

            	
              Supplier
      and Koch individually referred to as “Party” and jointly referred to as
      “Parties”.

            


    

    


    
      	
               
      

            	 


    

    Whereas
Supplier has certain Products that it wishes to have Distributed in the
Territory for the Term

    


    
      	
               
      

            	
              And

            


    

    


    
      	
               
      

            	
              Whereas
      Koch wishes to (have) these products distributed in the Territory for the
      Term

            


    

    


    Parties
have entered into consultation with one another and have reached agreement on
the conditions on which Koch will distribute the Product for Supplier in the
Territory for the Term for which purpose Supplier will grant Koch an exclusive
license, as laid down in this Terms Summary.

    


    Definitions                             ESD: Electronic Software
Download

    Product(s): Titles listed in
Appendix 1 and Appendix 2 on the platforms listed in Appendix 1 and Appendix
2.

    Units: hardcopies of the
Products.

    Territory: GAS (Germany,
Austria, Switzerland), FRANCE, French part of Benelux, UK, Spain, Portugal,
Italy, Scandinavia

    Term:   two (2)
years from the launch of each Product (title) on the market. An exclusive three
(3) months sell off period will be authorised by Supplier at the end of the
Term.

    IP Rights /Intellectual Property
Rights: any patent, registered design, copyright, design right, trade
mark, service mark, as well as any application to register any of the
aforementioned rights, trade secrets, know-how, sui generis rights in databases
and any other intellectual or industrial right of whatever nature in any part of
the world, including the Source Code.

    MG: minimum guarantee of the
amount of Units as reflected in Appendix 1.

    MG Amount: MG multiplied by
Export Price.

    Export Prices: export prices
reflected in Appendix 1. Parties explicitly agree that the Export Prices in
Appendix 1 are bottom Day1 prices and that they present an assumption of the
actual export prices and that the actual amounts due can therefore
increase

    Day1: day 1 amount of Units as
mutually planned, subject to timely release are reflected in Appendix
1.

    Bottom Day1 RRP: minimum
recommended retail price as reflected in Appendix 1.

    RRP: recommended retail price
including applicable VAT.

    SOR Units: sales or return
units. These are the difference amounts of units between day-1 quantity and MG
quantity as per Appendix 1.

    COGs: Cost of Goods which
shall mean the cost in relation to the manufacturing of the Product Units on the
different applicable sku ́s including printed parts and platform holder licence
fees as indicated in Appendix 3.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    MDF: marketing development
fund.

     

     

    
      
        	
                Koch’s
      Obligations

              	
                Koch
      will distribute the Product during the Term, in the
    Territory.

              
	 
      	
                Koch
      ensures to release the Products as per quarters indicated in Appendix 1,
      provided that the Products are delivered on time to Koch by Supplier to
      ensure such releases. The Products will be considered to be delivered on
      time when Supplier has delivered the Products to Koch, latest on the
      Wednesday, the week before the release date of this
    Product.

              
	 
      	 
      
	 
      	
                Koch
      undertakes the task of marketing; of retail promotion and ofpress work for the Supplier's
      Products in the Territory.

              
	 
      	
                Koch
      is obliged to spend MDF costs with a minimum of 10% per Unit of Koch's
      trade price, based on Day1 figures as indicated in Appendix 1 for the
      Supplier's Products. On request of Supplier Koch will send proofs of the
      expenditure. In case this 10% per Unit on the MDF is not spent for any
      reason, the Export Price will be increased by 10% per Unit. Koch may shift
      marketing funds between Products in order to achieve maximum impact (i.e.
      spend more on one title and less on another).

              
	 
      	 
      
	 
      	
                Marketing
      plans and assets will be submitted to Supplier before use, as to obtain
      prior written approval. In case approval or comments are not communicated
      with Koch within a period of 3 working days, the submitted plans and
      assets will be deemed to be approved. Koch will ensure there will be
      transparency with regard to the marketing efforts in all Territories.
      Supplier may request marketing invoices as proof of the spent marketing
      budget.

              
	 
      	 
      
	 
      	
                Koch
      will undertake its best endeavours to make the sale of the Products
      successful.

              
	 
      	 
      
	
                Distribution
      rights

              	
                Supplier
      grants Koch an exclusive license to distribute the Product in the
      Territory for the Term. Koch is not in any case authorized to
      sell/distribute (or have sold or have distributed) the Products outside
      the Territory. The licence of rights concerning ESD are
      non-exclusive.

              
	 
      	 
      
	 
      	
                Parties
      acknowledge and agree that Koch obtains the limited distribution rights as
      described above in this section only with regard to Products (to be) sold
      as standalone products. The distribution rights relating to the Products
      listed in Appendix 1 and 2 are not applicable to any sequels, prequels,
      adaptations, add-ons or any other not specifically mentioned derivatives,
      and are limited to the mentioned platforms.

              
	 
      	 
      
	
                IP
      Rights

              	
                Koch
      acknowledges that it has paid no consideration for the IP Rights and that
      any and all IP Rights in, and/or pertaining to the commercial exploitation
      of the Product are the property of Supplier or Supplier’s Licensors, as
      the case may be. Koch further acknowledges that nothing in this Terms
      Summary, nor the use by the Koch of any of the IP Rights, shall be
      construed as vesting the title to any of the IP Rights in Koch. Koch shall
      not register, seek to register or cause to be registered, or otherwise
      assert ownership in any of IP Rights including trademarks.
      Koch will not have the right to sublicense its rights granted by Supplier
      under this Terms Summary without written approval of
    Supplier.

              
	 
      	 
      
	
                PC
      Fairytale Fights

              	
                The
      release of the Title Fairytale Fights on the PC platform (on ESD and
      retail) will be delayed to avoid potential impact of PC piracy on console
      sales. The delay between the releases to be communicated to Koch in due
      time by Supplier.

              
	 
      	 
      
	
                      
                  ESD
      revenue

                

                for
      Koch PC Digital:

              	
                60-40%
      profit sharing (60% for Supplier and 40% for KOCH).  KOCH will
      have the non-exclusive license regarding ESD rights with 60% of revenues
      for Supplier and 40% for KOCH. Revenue will be reported by both Parties on
      a quarterly basis. Both Parties are free to take on PC distribution on
      ESD
      deals at all times. A List of PC games available for ESD is indicated in
      appendix 2. Both Parties shall communicate potential ESD deals as soon as
      possible to the other Party and in writing to ensure clarity and avoid
      redundancy or duplication. Exception:
      Supplier’s own ESD portal (www.gamessence.com)
      will be exclusive to Supplier with 100% of revenues remaining with
      Supplier.

              


      

    

     

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      
        	
                Obscure

              	
                Console
      digital distribution on Obscure: The Aftermath regarding PSP on PSN: 30%
      of the net revenues collected by Supplier will be due to Koch by Supplier.
      Koch will maintain the MG and Day1 as agreed and reflected in Appendix 1.
      Supplier will send on a quarterly basis for the Term the official report
      from Sony on the console digital activity.

              
	 
      	 
      
	
                Distribution
      Margin

              	
                All
      RRPs shall be kept flexible for best results in open discussion between
      Koch and Supplier. Bottom Day1 RRPs mentioned in Appendix 1 will be
      considered to be minimum Day1 RRPs (except in case of Sudoku Ball
      Detective – which may be reduced to 29.99 Euros as minimum RRP to be
      mutually agreed upon between Parties).

              
	 
      	
                For
      example: Fairytale Fights X360 and PS3 Bottom Day1 RRP to be 49.99 euro
      minimum with a target of 59.99 euro. For the avoidance of doubt, the
      Bottom Day1 RRP is a minimum. Amounts to be paid/due will be calculated on
      the basis of actual amounts received.

              
	 
      	 
      
	 
      	
                The
      parties will calculate any buy prices of Koch according to the formula as
      laid down in Appendix 1.

              
	 
      	 
      
	 
      	
                The
      MG and MG Amounts relating to a particular title in (a particular part of)
      the Territory will only be applicable if this title is not banned in (a
      particular part) the Territory. Same applies if in Germany no USK rating
      of 18 (or lower) can be obtained.

              
	 
      	 
      
	
                Sell
      off

              	
                ONLY
      With regard to SOR Units: if a specific Product does not generate positive
      sales (means sell through less than 20%) for a period of 3 (three)
      consecutive months in sum and the Product has been on the market for at
      least 12 (twelve) months, Koch is allowed to release this SOR Units of
      this Product for a sell-off. Koch has to give prior written notice to the
      Supplier. Sell-offs are defined as sales on the basis of a dealer price
      under [5€] (five Euro). In these cases the net revenue (after all trade
      discounts, bonuses, settlement discounts as well as taking into account
      authorised and expected returns as well as returns that have been
      received) is split between Koch and the Supplier on a 30/70- basis (thirty
      per cent for Koch and seventy per cent for Supplier).

              
	 
      	 
      
	
                Delivery

              	
                The
      Products shall be delivered free of charge:

              
	
                 

              	 
      
	 
      	
                -  
      for the German stock, the Italian stock and the French stock for
      Switzerland:

              
	 
      	
                to
      KOCH Media GmbH, Gewerbegebiet, A-6604 Höfen, Austria

              
	 
      	 
      
	 
      	
                -           For
      the French stock:

              
	 
      	
                to
      SCP Warehouse 39 zone industrielle de Bethune 2, 39 rue des Bethunes,
      95000, St Ouen L aumone

              
	 
      	 
      
	 
      	
                -  For
      the UK stock:

              
	 
      	 
      
	 
      	
                FXMS
      Ltd, Unit B&D

              
	 
      	
                Lutyens
      Industrial Centre

              
	 
      	
                Bilton
      Road

              
	 
      	
                Basingstoke

              
	 
      	
                RG24
      8LJ

              
	 
      	 
      
	 
      	
                -  For
      the Spanish Stock:

              
	 
      	
                PROEIN,
      S.L. / Koch Media S.L

              
	 
      	
                Doctor
      Severo Ochoa, 37

              


      

    

     

    
 

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      
        	 
      	
                Polígono
      Industrial Casablanca 2

              
	 
      	
                Edificio
      4 – Puerta 4   A

              
	 
      	
                28100
      ALCOBENDAS

              
	 
      	
                MADRID

              
	 
      	
                SPAIN

              
	 
      	 
      
	 
      	
                If
      fees or expenses to Koch should arise from the delivery of the Products
      due to a failure by Supplier, they can be charged back to the
      Supplier.

              
	 
      	 
      
	
                Payment

              	
                Supplier
      will invoice Koch the COGs amount for the MG number of units. Koch will
      pay at least 1 (one) week before Supplier places the manufacturing order
      at the manufacturer.

              
	 
      	 
      
	 
      	
                Supplier
      will invoice Koch for the Day1 amount (which is the Day1 units multiplied
      by the Export Prices), minus the prepaid COGs. which is payable within 60
      (sixty) days after delivery at the warehouse appointed by
      Koch,

              
	 
      	
                With
      respect to the SOR units, Koch will pay the number of units sold through
      at 60 days after delivery at the warehouse appointed by Koch and every 30
      days thereafter. Sold through units to be determined based on official
      sell-through reports (GFK and Chart Track data) multiplied by the
      appropriate factor to cover the entire market.

              
	 
      	 
      
	 
      	
                In
      case of needed price protection (partially or in full) with regard to i)
      the SOR Unit part of the Day1, and ii) the MG part of the Day1 only up to
      20% of the MG as per Appendix 1, Koch may request a credit note from
      Supplier, which will be deducted from the payable amount by Koch to
      Supplier upon market information and sales reports, no sooner than 60
      (sixty) days after release of the Product in the Territory, unless
      otherwise agreed by Supplier in writing in exceptional cases of extremely
      poor sell through.

              
	 
      	 
      
	
                Returns

              	
                Parties
      have agreed that no general returns provision is applicable, except
      for  defective units.

              
	 
      	 
      
	 
      	
                Koch
      will have 100% return facility for SOR Units, but only if the Product is
      not selling. In case Koch applies for a 100% return credit nota, Koch will
      provide the SOR Units to Supplier and will waive its exclusive
      distribution rights with regard to this specific
  Product.

              
	
                 

              	 
      
	
                Writedown
      Provision

              	
                Koch
      cannot decrease the Bottom Day1 RRP for a specific Product before 60
      (sixty) days after release of this Product. However, Supplier and
      Koch agree to come to an understanding in special cases where the Product
      is not selling. After 60 (sixty) days from release of this Product,
      Parties agree to discuss a decrease of the Bottom Day1 RRP in good faith
      and in both Parties best interest based on regular market feedback
      provided by Koch.

              
	 
      	 
      
	 
      	
                The
      Parties agree on a price protection of 20% of the purchase price which
      will be covered by Supplier in case of overstock issues and when it
      becomes necessary. In the event that the price protection applies, and the
      amount bases on the 20% of the purchase price as mentioned above under
      this section,  does not fully cover Koch’s losses made with
      regard to these unsold (not finally sold) Units , Koch may place orders at
      Supplier against COGs, as indicated in Appendix 3 only for compensation.
      This placement of orders by Koch will be negotiated between Parties, in
      evidence of official sell through figures, multiplied by the appropriate
      factor and in good faith between both Parties.

              
	 
      	 
      
	
                Defectives

              	
                The
      Supplier agrees that defect Units or Units sent back to Koch as defectives
      by Koch ́s customers or end users will be reported to the Supplier and upon
      instruction will be destroyed at Koch’s expense or returned at Supplier’s
      cost. In both cases Supplier will credit Koch the price Koch has
      originally been billed for.

              


      

    

     

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      
        	
                Re-orders

              	
                Koch
      can place re-orders with Supplier, but Parties agree that these re-orders
      have to be consistent (and not lower) to the minimal manufacturing amount
      of units that the manufacturer requires.

              
	 
      	 
      
	
                Subsequent
      period

              	
                an
      additional licensing period may be added to the Term, only if and when
      explicitly agreed upon by both Parties in writing.

              
	 
      	 
      
	
                Marketing
      Samples

              	
                Koch
      will receive 75 (seventy five) Units per Territory per sku free of charge
      from Supplier. Any additional Units to be used as marketing
      samples  Koch will be able to receive from Supplier against
      COGs, with a maximum of 150 (hundred fifty) Units per Territory. These
      Units will under no circumstance be sold as a retail Product by
      Koch.

              
	 
      	 
      
	
                Standard
      coop fees

              	
                unless
      the Parties have agreed otherwise the following standard coop fees will
      apply: none.

              
	 
      	 
      
	
                Reporting

              	
                In
      the first two months of the launch of any Product, a monthly detailed
      sales and marketing reports per Territory will be sent by Koch for the
      Territories to Supplier. For the remaining period of the Term, Koch will
      provide Supplier with a quarterly detailed sales
report.

              
	 
      	 
      
	
                Extra
      printed parts

              	
                In
      order to help Koch stock-manage inventory in all countries Supplier agrees
      to let Koch repackage stock with different language sleeves. Should the
      situation arise that Koch has surplus inventory of a title in one language
      version and have a need for this product in another language version,
      Supplier agrees to supply Koch extra printed parts at the cost of printing
      so that Koch may repackage inventory. Cost for printing and repackaging
      are borne by Koch.

              


      

    

     

    In
addition to above terms the parties agree that the General Distribution Terms
& Conditions (enclosed) as well as the General Delivery Conditions for
Delivering Products to the Central Warehouse in Madrid (as long as they do not
infringe on first parties shipping requirements) including the Cost Summary
shall apply.

    


    Supplier
confirms the receipt of the following documents:

    


    
      	
              Ø

            	
              Terms
      Summary

            


    

    
      	
              Ø

            	
              General
      Distribution Terms & Conditions

            


    

    
      	
              Ø

            	
              General
      Delivery and Warehousing Terms

            


    

    


    


    


    ________________,
on _________

    Playlogic

    


    represented
by

    


    


    


    ___________________________

    Name

    titles

    


    


    


    


    Höfen, on
_______________

    KOCH
Media GmbH

    


    represented
by

    


    


    ___________________________

    Dr.
Klemens Kundratitz / Dr. Reinhard Gratl

    Managing
Director

    


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    


    General
Terms and Conditions of Distribution

    


    


    The
General Distribution Terms and Conditions apply to the business relationship
between “Supplier” (Name and Address of which as in the attached Terms Summary)
and KOCH Media SLU, hereinafter referred to as "Koch".

    


    1.
Subject of the agreement

    


    The
subject of these General Terms and Conditions of Distribution are all Products
listed in the confirmation of terms and conditions. The product range will be
referred to in its totality in the following as “the Products”. The Supplier
grants Koch for the Term the distribution rights as defined in more detail in
the  Terms Summary “Distribution rights”. Koch undertakes to publicise
and distribute the Products or to have them publicised and distributed by its
distribution companies and to include them in the distribution program in the
Territory in the Terms Summary.

    


    In the
event that there should be definite indications, or that such should turn up in
the course of Koch's distribution, to the effect that the publicising and/or the
distribution of a product offends morals, laws or the rights of third parties,
Koch retains the right not to publicise the PRODUCTS and/or to discontinue the
distribution of this specific Product(s).

    


    2.
Legal relationship

    


    The
Supplier appoints Koch as his distribution partner within the Territory as
stipulated in the Terms Summary for the Term . The distribution rights licensed
include particularly the right to sell data carriers, the right to public
representation for the purpose of sale, the right to advertise the data carriers
in all media (TV, radio, press, etc.) and the right to non-commercial public
presentation of same.

    


    If the
Supplier grants Koch a full or restricted exclusivity in the Territory, he
simultaneously guarantees that within the framework of the granted exclusivity,
not to offer any third party the products for sale, distribution or for other
commercial purposes which would be in violation of the distribution transferred
to Koch and / or which would narrow the sales potential of the
product

    If
nothing is stipulated to the contrary in the Terms Summary, the distribution
rights bestowed herewith on Koch shall extend to the superstores, computer
trade, the music/video retail, the book trade, department stores, chains,
markets, wholesalers, mail-order houses, on-line networks, lenders and the club-
and end-user businesses in the Territory. Beyond the distribution channels
granted to Koch in the Terms Summary the Supplier transfers the right to
distribute the PRODUCTS via internet services located in the Territory. This
includes software downloads as shown Terms Summary.

    


    3.
Obligations on the part of the Supplier

    


    The
Supplier shall inform Koch without delay and fully in each case regarding new
releases, new versions, price changes, sell-offs, deletions and provides all
Product data that are necessary to keep Koch ́s Product database up to date.
..

    


    The
Supplier undertakes to use its best endeavours  to remain constantly
in a position to deliver the PRODUCTS so long as the Term is in force, and to
process each order without delay, in any event within ten days at the latest
provided that the minimum order quantity with the manufacturer is
met.

    


    If the
Parties in a particular case do not agree otherwise, the Supplier undertakes to
deliver the PRODUCTS in sealed cellophane or plastic foil. If this is not done
and Koch has to carry out the shrink-wrapping, then the Supplier shall bear the
resultant expense (cf. the enclosed Cost Summary).

    


    If there
is a legal obligation for certification by an authority for a specific product
in the respective country of the Territory the Supplier will only offer and
deliver the PRODUCTS including the respective certification mark.

    


    Insofar
as the Parties to the Terms Summary have not made any other agreement in the
Terms Summary, Koch may use free samples from the warehouse inventory to a
reasonable extent for sales promotion and marketing purposes and charge this to
the Supplier at the purchasing price. On request, Koch will provide the Supplier
with information about the use of the free samples.

    


    For the
Term, the Koch undertakes to maintain a technical support service for the
PRODUCTS (in case the Supplier is the publisher of the products) being marketed
by Koch. This service shall deal with queries in writing and by telephone from
end users during normal office hours and reply to them promptly.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


     

    4.
Prices and transport

    


    Within
the framework of this Agreement the Products shall be purchased according to the
terms in the Terms Summary. Koch is responsible for the insurance of the
Products as of transfer to the freight carrier (if this has been determined by
Koch) or as of supply by the Supplier (in the event that the freight carrier is
determined by the Supplier). In the event of an insurance claim, Koch shall
reimburse the Products costs of the respective Products (not including author
fees, licences etc.) insofar as the insurance company does not provide any
higher cover. The Products costs shall be verified by the Supplier on the basis
of invoices from his Suppliers (moulding plants, print works).

    


    The
Parties agree on purchasing conditions for Koch as specified in the Terms
Summary. Insofar as this does not contain any other provisions, the Supplier
shall determine the publicised end sale prices for the products in this event
Koch is entitled to resell the Products with full right of return to its
clients.

    


    The
Products shall be provided or delivered by the Supplier as agreed in the Terms
Summary. The Supplier shall be obliged to comply with the supply conditions for
the supply of Products in the KOCH warehouses.

    


    With
respect to products which are delivered in retail boxes, the Supplier declares
his willingness, on request by Koch, to replace goods free of charge which are
or become unsaleable due to damage to the retail packaging up to the point of
delivery to Koch by Supplier. The costs incurred by Koch for the repackaging of
returned Products shall be charged to the Supplier in accordance with the
expense incurred (see also Terms Summary).

    


    5.
Stock recall

    


    If the
Supplier recalls certain Products or demands that Koch returns them, Koch shall
take steps to do so immediately. In normal circumstances, a complete recall
shall take six months. Supplier must allow Koch a minimum period of six months
for the recall of Products. Products that are being recalled according to the
Supplier's notification will not be rendered resalable when prepared for return,
but will be booked to the Supplier's depot stocks irrespective of their
condition.

    


    6.
Terms and conditions of payment

    


    Payment
shall be made as described in the Terms Summary. Charges resulting from returns
to the Supplier shall be immediately deducted from payments. For any repayments
by the Supplier to Koch the due date for payment shall be 30 days net as of the
date of the delivery note. In case of late payment of the Supplier a service fee
of 1% per month is agreed and chargeable.

    


    Koch
standard insures its Suppliers in relation to the returns risk. The Supplier
will upon request submit all necessary documentation to the insurance company
who insures Koch’s Suppliers. Koch may retain payments until sufficient
guarantees are granted if there is a shortage in insurance coverage and a
resulting credit risk.

    


    


    7.
Expiry and extension of the agreement

    


    Early
termination:

    


    Parties
may terminate the Terms Summary in case of material breach by the other Party,
taking into account a remedy period of 30 days after given notice by the non
breaching Party.

    


    In case
of a breach which is not remedied within the 30 day period after breach notice,
this Term Summary is terminated without further notice. In case of termination
of this Terms Summary for whatever reason, licensed rights will immediately
return to Supplier.

    


    The
duration Term is shown in the Terms Summary. This Terms Summary is concluded
first for the duration of the Term. It shall be extended upon mutual
consent

    


    If there
are definite indications that the financial situation of one Party has
deteriorated to the point that he can no longer meet his contractual
obligations, then in such a case the other party to the contract shall have the
opportunity of threatening termination by setting out his misgivings in writing
and setting a deadline of 30 days for response. The first party can either
refute the expressed misgivings within the set deadline in writing, or can
provide security. If this does not take place, the contract is deemed to have
been terminated with immediate effect after these 30 days.

    


     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    In the
event of termination of the contract, the Parties shall reckon up their accounts
with one another. Koch will advise Supplier of stock in the warehouse, Supplier
will credit this stock in case of SOR Units and repay Koch at the prices Koch
has originally been billed for and Koch shall then make the Supplier's remaining
Products available for collection. The Supplier shall take back the Products at
his own expense. Koch is entitled to accept returns within 3 (three) months
following termination of the Terms Summary, and to charge the Supplier for the
same at the latest Export Price. The Supplier can collect the Products from Koch
at any time at his own expense in case of SOR Units.

    


    8.
Product defects / liability of the Supplier

    


    The
Supplier warrants that the PRODUCTS essentially performs the tasks which are
included on its packaging and that it works according to commonly accepted
quality standards.

    


    If not
agreed otherwise in the Terms Summary, Koch will receive “defectives” by its
customers, credit them, collect them in the Central Warehouse, report defectives
to Supplier from time to time and send them back at Supplier’s expense. For the
handling and the separate stocking of the Defective PRODUCTS the charges laid
down in the General Delivery and Warehousing Terms are applicable. If the
PRODUCTS made available and notified in writing are not being collected within
30 days Koch is entitled to destroy them. In addition, the laws of the
respective distribution countries (see “Territory”) shall apply between the
Supplier and Koch in relation to statutory rights in respect of warranties and
defects.

    


    The sale
price to be paid by Koch includes all rights needful for the sale of the
PRODUCTS, in particular all copyrights and rights for use of film, picture,
audio, text, animation and interactive elements. The latter include in
particular any fees payable to copyright collection agencies and
publishers.

    


    The
Supplier hereby declares and guarantees (1) that the PRODUCTS and the packaging
thereof in each case (retail box, booklet, inlay card, etc.) absolutely conform
to the laws concerning fair trading and indeed do not violate any legislation in
the territory covered by the contract; (2) that he has reimbursed or will
reimburse the services of all the parties involved in the Products, and that
there are no third-party rights of any kind on the Products that can be lawfully
pressed against Koch; (3) that he has for the duration of this Agreement all
necessary rights to enter into this Agreement.

    


    The
Supplier assures that the PRODUCTS, packaging and proposed name(s) are free from
the third party rights and violate neither the copyrights nor the commercial
protection rights, such as patents, patented designs, taste patterns, and/or
commercial labelling rights, including but not limited to copyrights and
trademark rights, and also do not contravene against any other laws and
regulations in the Territory.

    


    The
Supplier undertakes to indemnify Koch against any and all third party claims
arising from the sale and distribution of the Products in case of an alleged
violation of any copyrights, commercial protection rights, trademarks or any
right of third parties. Should the continued sale and/or distribution have to be
ceased as a result of a court decision as a consequence of a third party’s claim
of the type described above, the Supplier will reimburse Koch for any damage and
expenses (including lawyers' and court fees of Koch and/or its customers)
caused.

    


    


    9.
Confidentiality

    


    The
parties undertake to remain silent about all business and operational matters
that become known to them within the framework of  the Terms Summary,
in particular stock or sales reports, statistics, customer lists etc. This
applies irrespective of whether the matter in question is explicitly designated
as confidential or not. The obligation to confidentiality also applies with
respect to associated concerns and remains in force for 1 (one) year beyond the
end of the Term .

    


    This does
not apply to such characteristics and details, (1) as were already in the
possession of the other party in written form before entry into the contractual
negotiations for the present contract; or (2) as have been made public without
the illicit commission or omission of the other party; or (3) as a party is
obliged by legal regulations to communicate to the authorities or other third
parties.

    


    10.
Miscellaneous

    


    Supplier
may only offset his outstanding claims against Koch with own outstanding
liabilities to Koch if the claims in question have been confirmed by a finally
binding court decision or have been confirmed by Koch in writing. Claims against
Koch arising from this contract cannot be assigned without prior written
consent. Koch is entitled to set off outstanding claims which are owed to
enterprises, subsidiaries, branch offices or other companies in which the Koch
company or Franz Koch himself has a direct or indirect participation. This also
applies even if the dates on which the payments become due are
different.

     

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    
      


      
        	
                 
      

              	
                Assignment:
      Koch may not assign the Terms Summary, nor may any of Koch’s
      rights

                 

              


      

    

    
      	
               
      

            	
              hereunder
      be assigned or otherwise transferred to any third party, without
      Supplier’s prior written consent in each case.

               

            


    

    
      	
               
      

            	
              Waiver:
      No failure or delay by either Party in exercising any right, power, or
      remedy under the Terms Summary shall operate as waiver of such right,
      power, or remedy. No waiver of any provision of the Terms Summary shall be
      effective unless in writing and signed by the Party against whom such
      waiver is sought to be enforced. Any waiver by either Party of any
      provision of the Terms Summary shall not be construed as a waiver of such
      provision respecting any future event of circumstance.

               

            


    

    
      	
               
      

            	
              Force
      majeure

            


    

    


    Parties
do not accept any liability if and in so far as they cannot fulfil part or all
of this Terms Summary on account through no fault of their own. A failure cannot
be attributable to a Party if there is a situation of force
majeure.

    


    If the
non-imputable failure is of a temporary nature, then the party reserves the
right to suspend the execution of this Terms Summary until the circumstance that
leads to the non-imputable failure no longer occurs.

    


    If the
non-imputable failure is of a permanent nature, this Terms Summary is dissolved
as of the time the permanent shortcoming takes effect. Parties will not be
obliged to pay any form of damages to one another in such cases.

    


    Supplier
has the right to let an independent, registered accountant perform an audit once
a year with regard to the accounts of  Koch insofar as these accounts
refer directly to (the execution of) the Term Summary. Supplier will timely
consult with Koch with regard to the date on which the audit will be performed.
This audit will only take place during business hours and in such manner that
Koch’s normal business activities are not unnecessarily interfered
with.

    


    The costs
of this audit will be for the account of Supplier, unless said audit shows that
the amount paid was insufficient and the difference between the actual amount
paid and the amount due is more than 3 % (three percent). In this case the costs
of the audit will be for the account of Koch.

    


    EXCEPT AS
EXPRESSLY PROVIDED IN THIS TERMS SUMMARY, THE LIABILITY OF SUPPLIER, IF ANY, FOR
DAMAGES IN RESPECT OF NEGLIGENCE, BREACH OF CONTRACT, TORT, MISREPRESENTATION OR
ANY OTHER LEGAL LIABILITY UNDER THIS TERMS SUMMARY SHALL BE LIMITED TO THE
ACTUAL AMOUNTS PAID BY KOCH TO SUPPLIER HEREUNDER.  IN NO EVENT SHALL
SUPPLIER BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES OF ANY KIND OR THE LOSS OF ANTICIPATED PROFITS ARISING FROM ANY BREACH
OF THIS TERMS SUMMARY EVEN WHERE SUPPLIER HAS BEEN NOTIFIED OF THE POSSIBILITY
OF SUCH DAMAGES AND REGARDLESS OF WHETHER ANY REMEDY PROVIDED HEREIN FAILS OF
ITS ESSENTIAL PURPOSE.

    


    This
contract, in accordance with the intentions of the parties, shall have validity
also for the legal successors on both sides. The Appendices and enclosures
attached to this contract are integral components thereof. Amendments and
additions to this contract and/or to the enclosures and Appendices must be
executed in writing. This applies also to a renunciation of the requirement for
the written form. A fax version of this agreement or amendments is valid. No
verbal agreements have been made. The use of other General Business Conditions
than this are expressly ruled out by both parties. The contracting parties
herewith confirm that contractual performance and consideration are adequate and
in accordance with the parties` economic intentions. Any rescission of the
contract based on error, consideration being less than half of true value or on
similar grounds is herewith excluded. If one of the terms of the contract should
turn out to be wholly or partially invalid, the remaining terms shall not be
affected thereby. The invalid term shall be interpreted according to its sense
and replaced by a new regulation that achieves the commercial purpose of the
invalid term as much as possible. Austrian Law applies to this contract. The
exclusive place of jurisdiction for any possible disputes arising out of this
Agreement is agreed to be the court that has competence Koch.

    


     

    



    
      
        
           


        

        
           


          
            

          

        

        
           


        

         

        
          KOCH MEDIA


        

      

    

    


    General Delivery and
Warehousing Terms -

    


    


    1. Delivery deadlines and
confirmation of orders

    


    On our
orders we indicate the required delivery date (goods-in at point of delivery)
for every item. KOCH Media will deem this delivery date as binding unless within
five (5) working days from receipt of order this has been declined on the
written order confirmation by supplier, which then has to state a new delivery
deadline. KOCH Media will charge back to the supplier any damages claimed by
customers because of late deliveries and any increased shipping
costs.

    


    If you
ship more than one pallet, please send a short fax or an e-mail at least one day
before the goods reach our warehouse to Mr. ____________ ______________

    


    2. Delivery
notes

    


    Delivery
notes and invoices have to be made out exactly for the same items and goods as
delivered per shipment (no collective invoices and documentation will be
accepted).

    The
documents must contain the following information:

    
      	
               
      

            	
              1)

            	
              KOCH
      Media order number (JB number)

            


    

    
      	
               
      

            	
              2)

            	
              KOCH
      Media article number and
description

            


    

    
      	
               
      

            	
              3)

            	
              Number
      of items ordered / number of items
delivered

            


    

    
      	
               
      

            	
              4)

            	
              Number
      of parcels

            


    

    


    This
information has to be provided also for backlog deliveries or when more than one
order is dispatched in one delivery. In urgent cases and in relation to partial
deliveries all delivery notes should be faxed beforehand to your responsible
contact in KOCH Media’s Purchase Department.

    


    


    3.
Invoices

    


    All
invoices have to be mailed separately to the address indicated on the order
documents. All deliveries from European Community member states (except Spain)
have to be invoiced in the contractually agreed currency quoting the respective
tax ID number. These invoices have to be made out free of VAT.

    


    We assume
that all deliveries from non-EC member states are free of customs or other
excise costs. Any costs incurred by KOCH Media because of customs or excise
payments will be charged back in full unless stated differently in the
contract.

    


    


    4. Acceptance of
deliveries

    


    Goods-in
Department will only accept deliveries from Monday to Friday (except on public
holidays in Spain) from 8:00  – 12:00 and 13:00 – 16:00.

     

    Any other
delivery times or dates have to be agreed before delivery either with our
goods-in manager ____________.

    


    


    


    


    


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    5. Packaging and labelling
of goods

    


     

    a.)  Individual
products

     

    The
packaging of individual products has to comply exactly with the requirements of
the client. Changes without a written agreement are not permitted. Every product
has to be labelled clearly with a scannable bar code and the article
number.  The bar code may only be applied once to the packaging. If a
cardboard packaging contains a jewel case then the jewel case should either not
be labelled at all or be labelled with a different bar code.

    


    


    ATTENTION: the
product data, especially the bar code, contents, weight and volume
(morphological data) may not be changed in subsequent deliveries once the
initial delivery has been made.

    


    Our
clients exclusively request products in cellophane wrapping. Therefore only
cellophane wrapped goods (without third party stickers) may be shipped to our
warehouse. In exceptional cases when cardboard packaged goods are sealed with a
"flap" please contact and agree with the responsible KOCH Media product manager
if delivered goods have to cellophaned or not.

    


    


    b.)  Packaging
Units

     

    Only
industry agreed packaging units may be used:

    Jewel
case           25 items, dimensions 267 mm x 129 mm, height 142
mm

    DVD                             maximum
allowable  30 items

    Hardware             maximum
allowable  30 items

    


    
      	
               
      

            	
              ·

            	
              Every
      packaging unit must contain the same number of
  products.

            


    

    
      	
               
      

            	
              ·

            	
              A
      packaging unit may not exceed the dimensions of 600 x 400 x 300 mm (length
      x width x height) and a maximum weight of 25 kg per cardboard
      box.

            


    

    
      	
               
      

            	
              ·

            	
              Subsequent
      deliveries always have to contain the same number of items per packaging
      unit as the initial delivery.

            


    

    


    c.) Pallets / package
wrapping

     

    All boxes
on a EURO pallet at least have to be secured and made safe for transport by
wrapping foil. The number of packaged items has to be documented on the delivery
note and the accompanying shipping documents.

    


    Please
avoid padding wherever possible. Any wrapping and any padding should be made of
one type of materials for environmental reasons. Padding must not be made of
plastics, polystyrene or industrial waste material.

    


    Only
EURO-pallets (120 x 80 cm) may be used! The total height (incl. Pallet base)
must not exceed 150 cm. Projections of up to 5 cm will be tolerated. In
principal all pallets have to be delivered only with one type of goods and the
packaging units have to be assembled on the pallet so that the labels can be
read from the front (the side with dimensions of 80 cm). Two articles per pallet
may be delivered if it is possible to clearly keep the boxes apart in two halves
(40 x 120 each) and all the other requirements can be fulfilled.

    


    


    6. New products, new
versions/updates of Productss and recalls

    


    A new
version of a product is not only a change of content but also any change to its
dimensions in length, height and width for more than

    +/- 1 mm
and changes in weight of more than +/- 2 grams per item.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    Under no
circumstances may new version of products bear an already used bar code or
article number. New versions of products may never be delivered on the basis of
an order for an old / to be discontinued version.

    


    KOCH
Media has to be informed of deletions or the introduction of a new version at
least 4 weeks before a new quarter (1.1/ 1.4 / 1.7 / 1.10) the new product is
introduced or the old is being deleted. KOCH Media will return all stocks of a
deleted product without repackaging.

    


    7.  Goods-in
differences

    


    Please
verify all and any differences in delivered items reported by the KOCH Media
goods-in department. We assume you accept these differences unless you reply
differently within two (2) working days.

    


    You will
be informed of erroneous deliveries, which are kept ready for collection. Should
you fail to collect the goods within 14 days, KOCH Media will return all goods
at your cost (you will pay delivery charges on receipt of goods).

    


    8. Faulty goods and
returns

    


    Goods
already damaged on delivery (damage during transport etc.) will be reported to
the supplier within 48 hours of delivery and will be destroyed or returned at
your cost depending on our agreement with you. Damaged of faulty goods returned
by our clients will be accepted by KOCH Media and destroyed after informing the
supplier.

    


    KOCH
Media always checks goods returned by our clients with regards to cleanness and
quality. Then the goods will be re-stocked. This only applies to goods where
there is a good chance (stocks, product life cycle) that these goods can be
re-delivered.

    


    Goods on
consignment, which are no longer corresponding to the internal requirements to
be re-stocked, are not repackaged and will be returned to the supplier.
Depending on the agreement with the supplier KOCH Media may be in a position to
destroy these goods.

    


    9. Transport
guidelines

    


    Should in
exceptional cases the freight costs of delivered goods be borne by KOCH Media,
the goods may only be handed over to the shipping agent commissioned by KOCH
Media. Should the supplier send the goods using a different transport agent, he
will have to bear these costs in full.

    


    10.
Contacts

     

     

    
    

     

    
      	 Person, 	 Responsibility	 Telephone	 Fax/Voicemail