EXHIBIT 10.31
(Translated from German
to English)
PHILIPS
1996 ANNUAL AGREEMENT
with
Prodac GmbH
Max-Planck-Str. 38
50858 Koln-Marsdorf
Customer No. 19/13784
Products of the Philips Consumer Electronics Division, Hamburg
(not including automobile radios, tapes and accessories, software, background music)
for use in the commercial sector (hotels etc.)
1996 sales objective: Total CE > [***] DM
Prices: net, as indicated in attached Price List
(to be examined jointly each quarter)
all other products from Net Price List - 12 %
Annual bonus: on sales billed: [***]
Payment: [***] discount 30 days, 45 days net
(Items > [***] DM = [***]% discount 60 days)
Service: 1.2 % lump-sum credit as reimbursement
of costs for 12 month Philips warranty.
11% discount on Philips replacement parts.
Replacement guarantee on warranty claims
within 1 week after delivery.
Disposal of packaging: From the hotel, all at once, in the
context of regularly scheduled routes
at no charge (separated by type of
material and laid flat), or via
"Gruner Punkt"
[Green Dot - a German recycling system]
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Advertising/Promotion: See Appendix
[handwriting]
Hamburg, June 18, 1996 Cologne, June 19, 1996
Philips CE / Hotel TV Prodac GmbH
Appendix to Annual Agreement
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[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
Net Price List Philips HOTEL-LINE PC
PRODAC, Cologne 19/13784 April 15, 1996
APRIL 1, 1996 SPECIFICATION REMOTE DM NET
- ---------------------------------------------------------------------------------------------------------------------------------
37 CM / 34 cm HiBn color picture tube each
TV 14-3152 Basic - (available mid 1996) included [***]
-----
TV 14-3252 Basic plus Videotext, clock, alarm included [***]
----------
TV 14-3302 Basic plus Videotext, clock, alarm, UKW Radio included [***]
----------
45 CM / 41 cm Black-HiBn-FSQ color picture tube
TV 17-3152 Basic - (available mid/late April 1996) included [***]
-----
TV 17-3202 Basic Videotext included [***]
-----
TV 17-3252 Basic plus Videotext, clock, alarm included [***]
----------
TV 17-3302 Basic plus Videotext, clock, alarm, UKW Radio included [***]
----------
TV 1340 System - [***]
TV 17-3252 System System, clock and alarm ready - [***]
------
- interface installed, remote control included [***]
TV 17-3402 System System, videotext, clock, alarm - [***]
------
55 CM / 51 cm Blackline-FSQ-color picture tube
TV 21-3152 Basic - (available late April 1996) included [***]
-----
TV 21-3202 Basic Videotext included [***]
-----
TV 21-3252 Basic plus Videotext, clock, alarm included [***]
----------
TV 21-3302 Basic plus Videotext, clock, alarm, UKW radio included [***]
----------
TV 1350 System - [***]
- interface installed - [***]
TV 21-3352 System System, clock and alarm ready* - [***]
------
- interface installed, remote control included [***]
TV 21-3402 System System, videotext, clock, alarm* - [***]
------
Smart-Loader(TM) Fast Programmer Module (22AV1013) [***]
RC 8611 Hotel Cursor Remote Control [***]
(batteries not included)
TVZ 9052 Master remote control with operating [***]
instructions for Hotel-TV
45 cm / 55 cm Basic plus and System with second speaker connection (DIN)
---------- ------
All units with full Hyperband Tuner, fast programming capability, channel,
volume lock, indicator for low battery in remote control, "Welcome Greeting."
Initial programming with Smart-Loader(TM) within 10 seconds/unit.
System with additional power supply for CE operation.
All net prices, not including VAT, before discount, free delivery (CIF) to
country of delivery
Delivery: approximately 8 weeks, or on request.
- -------------------------------------------------------------------------------------------
Philips GmbH, CE / Hotel-TV, Alexanderstr. 1, 20099 Hamburg, Tel: 040-2852-1508, Fax: -1509
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[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
PLANNING, ORDER DEADLINES, DELIVERY
For business and administrative reasons, we must closely coordinate our planning
and scheduling of component purchases, production and shipment. For customer-
specific products such as television sets with the interface integrated during
the fabrication of the units, our objective is "near on demand" production, with
only a minimum inventory maintained by Philips.
Basically, the following planning procedures must be followed to achieve this
objective:
- - monthly projections for the following 3 months, to determine
availability of the components,
- - weekly orders every Thursday, for determination of the quantities
required in Week 6 thereafter (delivery to the hotel).
(for new models, the delivery date must be determined individually)
Philips will not maintain significant inventories of customer-specific versions.
The interface boards will be ordered by Philips Plant Purchasing in the context
of the projections received from the customer and the definitive order. Until
further notice, all projections and orders from Prodac must be routed via
Philips Hotel-TV Hamburg. This procedure is necessary on account of the planning
required, and to guarantee the smoothest possible handling of international
shipments.
Philips can only be held accountable for late deliveries if the delivery date
has been confirmed in writing by Philips Hotel-TV not later than 3 days before
the delivery deadline. Philips shall not be held liable in case of events of
force majeure and delays caused by a cutoff of credit. On the other hand,
Philips may demand reimbursement for any expenses incurred, in particular for
any transportation arrangements which have been made, if said arrangements must
be changed later than 3 days before the delivery deadline. This requirement also
applies, where appropriate, to merchandise which has been ordered and is ready
for shipment, but is not picked up on time.
June 18, 1996
HJP /S/ Authorized signatures
PHILIPS
APPENDIX TO 1996 ANNUAL AGREEMENT
CE CONFORMITY
Philips products meet the requirements set forth in CE Specifications, have been
appropriately tested and bear the CE symbol. Any intervention into the equipment
not expressly authorized in writing by Philips voids this CE certification,
unless the intervention in question is a repair based on the instructions
contained in the corresponding Service Documentation.
The obligations on the part of Philips set forth in the Guarantee or Warranty,
as well as any product liability on the part of Philips shall become null and
void in the event of an unauthorized intervention; in such cases, the CE
certification applied for by Philips is also null and void.
Even in the event of authorized interventions, Philips' contractual partner
shall not sell the equipment without CE conformity testing and certification.
DISPOSAL OF PACKAGING
Philips complies with the packaging disposal requirements specified by the
applicable laws and regulations. In the context of an industry-wide agreement,
said disposal is carried out in cooperation with VfW, Cologne, which provides
disposal of business and industrial waste materials in the context of its
regularly scheduled routes. Notification of the disposal of items must be given
to VfW 3-4 days in advance, using the appropriate form, in which case VfW shall
make its best efforts to provide service on the date requested.
The packaging materials must be made available to the disposal company ready for
pickup, i.e. flattened, sorted by type, and collected at one location.
Philips shall not pay any special charges, nor any costs which are incurred as a
result of specified pick-up dates or additional trips.
SERVICE
Reimbursement of warranty costs shall be paid in the form of a lump sum to
cover the conventional warranty risk. Reimbursement for the repair of frequent
or epidemic defects for which Philips is responsible shall be paid separately.
In such a case, both parties shall endeavor to reach a settlement which is
economically and administratively reasonable for both parties.
CREDIT LIMIT
Philips will extend a merchandise credit limit which is appropriate to the scope
of activity and the economic risk, although the customer has no legal
entitlement to such a credit limit. If, in the estimation of Philips, the
customer's economic situation changes between the date the order is accepted and
the specified delivery date, such that a limitation of the supplier's risk is
indicated, Philips shall not incur any liability for the consequences of any
delay in delivery. These terms also apply if there are corresponding delays in
payment for prior shipments.
Hamburg, June 18, 1996 Cologne, ___________________
Philips CE / Hotel-TV Prodac GmbH, Cologne
PHILIPS RECYCLING WITH SYSTEM
for CE Products (television sets etc.)
DISPOSAL OF PACKAGING MATERIAL WHICH COMES WITH THE ITEM
Philips CE complies with the packaging disposal requirements set forth in the
applicable laws and regulations. In the context of an industry-wide agreement,
said disposal is carried out in cooperation with VfW, Cologne, which provides
disposal of business and industrial waste materials in the context of its
regularly scheduled routes. Notification of the disposal of items must be given
to VfW 3-4 days in advance, using the appropriate form, in which case VfW shall
make its best efforts to provide service on the date requested.
The packaging materials must be made available to the disposal company ready for
pickup, i.e. flattened, sorted by type, and collected at one location.
Philips shall not pay any special charges, nor any costs which are incurred as a
result of specified pick-up dates or additional trips.
PROCEDURE
The enclosed form (Recycling with System) must be completed and sent by telefax
to VfW, Cologne. The form must indicate the types of units in question and the
number of units of which the packaging materials must be disposed, as well as
the amount of material in kilograms obtained by multiplying the individual
weights - for each model and for each material (paper, film, Styrofoam) - again
for each model and as a total including all models.
Please note that the form must also include the desired pick-up date
(approximately 5 working days after the form is filed), the complete address
where the material is to be picked up, the name of a contact person, and a
telephone number for additional information.
The VfW will bill Philips CE on the basis of this form.
The materials to be picked up must be prepared as follows:
- - separated by type, into paper, film, Styrofoam
- - flattened, with cardboard boxes laid flat
- - Styrofoam must be in Styrofoam collection bags
The disposal company is required to pick up only materials prepared as indicated
above. All additional services may result in additional charges. These terms
also apply for unnecessary trips for which the customer is responsible,
additional trips which may be necessary to pick up small additional quantities,
and for other materials which are not part of the CE scope of supply.
Using this procedure, Philips CE shall be responsible for picking up the
packaging materials in the context of a regular pickup schedule, but it does not
guarantee that it will be able to comply with any requested or specified
deadlines. Likewise, it will, under no circumstances, pay the costs of any
disposal arranged outside this procedure.
THIS PROCEDURE APPLIES TO PHILIPS-CE PRODUCTS SUCH AS TELEVISION SETS.