Exhibit 10.4

 

Contract Number: 150738

 

XBOX 360 PUBLISHER LICENSE AGREEMENT

 

This Xbox 360 Publisher License Agreement (“Agreement”) is entered into and
effective as of the later of the two signature dates below (the “Effective
Date”) by and between Microsoft Licensing, GP, a Nevada general partnership
(“Microsoft”), and Activision Publishing, Inc., a Delaware corporation
(“Publisher”).

 

RECITALS

 

A.                                    Microsoft and its affiliated companies
develop and license a computer game system known as the Xbox 360 game system and
a proprietary online service accessible via the Xbox 360 game system known as
Xbox Live.

 

B.                                    Publisher wishes to develop and/or publish
one or more software products running on the Xbox 360 game system, which
software products may also be made available to subscribers of Xbox Live, and to
license proprietary materials from Microsoft on the terms and conditions set
forth herein.

 

Accordingly, for and in consideration of the mutual covenants and conditions
contained herein, and for other good and valuable consideration, receipt of
which each party hereby acknowledges, Microsoft and Publisher agree as follows:

 

1.                                      Exhibits

 

The following exhibits are hereby incorporated to this Agreement (some require
completion and/or execution by one or both parties):

 

Exhibit 1:                    Payments

Exhibit 2:                    Xbox 360 Royalty Tier Selection Form

Exhibit 3:                    Xbox 360 Publisher Enrollment Form

Exhibit 4:                    Authorized Subsidiaries

Exhibit 5:                    Non-Disclosure Agreement

Exhibit 6:                    Japan/Asian Royalty Incentive Program

Exhibit 7:                    Xbox Live Incentive Program

 

2.                                      Definitions

 

As further described in this Agreement and the Xbox 360 Publisher Guide (defined
below), the following terms have the following respective meanings:

 

2.1                                 “Asian Manufacturing Region” means the
region for manufacturing comprising Taiwan, Hong Kong, Singapore, Korea, Japan
and any other countries that are included by Microsoft from time to time as set
forth in the Xbox 360 Publisher Guide.

 

2.2                                 “Asian Sales Territory” means the territory
for sales distribution comprising Taiwan, Hong Kong, Singapore, Korea, and any
other countries that are included by Microsoft from time to time as set forth in
the Xbox 360 Publisher Guide.  The Asian Sales Territory does not include Japan.

 

2.3                                 “Authorized Replicator” means a software
replicator certified and approved by Microsoft for replication of FPUs (defined
below) that run on the Xbox 360.

 

2.4                                 “Branding Specifications” means the
specifications as provided by Microsoft from time to time for using the Licensed
Trademarks in connection with a Software Title and/or Online Content and on
Marketing Materials as set forth in the Xbox 360 Publisher Guide.

 

2.5                                 “BTS” means a Microsoft designed
break-the-seal sticker that will be issued to the Authorized Replicator for
placement on the Packaging Materials (defined below) as specified in the Xbox
360 Publisher Guide.

 

2.6                                 “Certification” means the final stage of the
approval process by which Microsoft approves or disapproves of a Software Title
or Online Content for manufacture and/or distribution.  Certification is further
defined in this Agreement and the Xbox 360 Publisher Guide.

 

MICROSOFT CONFIDENTIAL

 

Microsoft

 

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2.7                                 “Commercial Release” with respect to a
Software Title means the first commercial distribution of an FPU that is not
designated as a Demo Version.  With respect to Online Content, Commercial
Release means its first availabilityvia Xbox Live to Xbox Live Users.

 

2.8                                 “Concept” means the detailed description of
Publisher’s proposed Software Title and/or Online Content in each case including
such information as may be requested by Microsoft.

 

2.9                                 “Demo Versions” means a small portion of an
applicable Software Title that is provided to end users to advertise or promote
a Software Title.

 

2.10                           “European Sales Territory” means the territory
for sales distribution comprising the United Kingdom, France, Germany, Spain,
Italy, Netherlands, Belgium, Sweden, Denmark, Norway, Finland, Austria,
Switzerland, Ireland, Portugal, Greece, Australia, New Zealand and any other
countries that are included by Microsoft from time to time as set forth in the
Xbox 360 Publisher Guide.

 

2.11                           “European Manufacturing Region” means the region
for manufacturing comprising the United Kingdom, France, Germany, Spain, Italy,
Netherlands, Belgium, Sweden, Denmark, Norway, Finland, Austria,
Switzerland,Ireland, Portugal, Greece, Australia, New Zealand and any other
countries that are included by Microsoft from time to time as set forth in the
Xbox 360 Publisher Guide.

 

2.12                           “FPU” or “Finished Product Unit” means a copy of
a Software Title in object code form that has passed Certification, has been
affixed to a DVD disk and approved by Microsoft for release and manufacturing. 
Once the Packaging Materials have been added, and the BTS has been assigned or
affixed to the FPU or its packaging, the FPU also includes itsaccompanying BTS
and Packaging Materials.

 

2.13                           “Japan Sales Territory” means the territory for
sales distribution comprising the country of Japan.

 

2.14                           “Licensed Trademarks” means the Microsoft
trademarks identified in the Xbox 360 Publisher Guide.

 

2.15                           “Marketing Materials” collectively means the
Packaging Materials and all press releases, marketing, advertising or
promotional materials related to the Software Title, FPUs and/or Online Content
(including without limitation Web advertising and Publisher’s Web pages to the
extent they refer to the Software Title(s), FPU(s) and/or Online Content) that
will be used and distributed by Publisher in the marketing of the Software
Title(s), FPU(s) and/or Online Content.

 

2.16                           “Manufacturing Region” means the Asian
Manufacturing Region, European Manufacturing Region; and/or North American
Manufacturing Region.

 

2.17                           “North American Sales Territory” means the
territory for sales distribution comprising the United States, Canada, Mexico,
Colombia and any other countries that may be included by Microsoft from time to
time as set forth in the Xbox 360 Publisher Guide

 

2.18                           “North American Manufacturing Region” means the
region for manufacturing comprising the United States, Canada, Mexico, Colombia
and any other countries that may be included by Microsoft from time to time as
set forth in the Xbox 360 Publisher Guide

 

2.19                           “Online Content” means any content, feature, or
access to software or online service that is distributed by Microsoft pursuant
to this Agreement.  Online Content includes, but is not limited to, Online Game
Features, Title Updates, Demo Versions, trailers, “themes,” “gamer pictures” or
any other category of online content or service approved by Microsoft from time
to time.  Trailers, “themes,” “gamer pictures” and any other approved Online
Content will be further described in the Xbox 360 Publisher Guide.

 

2.20                           “Online Game Features” means a Software Title’s
content, features and/or services that are available to Xbox Live Users via Xbox
Live, whether included in the Software Title’s FPU or otherwise distributed via
Xbox Live.

 

2.21                           “Packaging Materials” means art and mechanical
formats for a Software Title including the retail packaging, end user
instruction manual with end user license agreement and warranties, end user
warnings, FPU media label, and any promotional inserts and other materials that
are to be included in the retail packaging.

 

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2.22                           “Pre-Certification” means the first stage of the
approval process wherein Microsoft tests to provide feedback and/or identify any
issues that may prevent the Software Title from being approved during the
Certification phase.   Pre-Certification is further described in this Agreement
and the Xbox 360 Publisher Guide.

 

2.23                           “Sales Territory” means the Asian Sales
Territory, European Sales Territory, Japan Sales Territory, and/or North
American Sales Territory.

 

2.24                           “Software Title” means the single software
product as approved by Microsoft for use on Xbox 360, including any Title
Updates thereto (if and to the extent approved by Microsoft) and all Online Game
Features for such Software Title.  If Microsoft approves one or more additional
single software product(s) proposed by Publisher to run on Xbox 360, this
Agreement, and the term “Software Title,” will be broadened automatically to
cover the respective new software product(s) as additional Software Title(s)
under this Agreement.

 

2.25                           “Subscriber” means an Xbox Live User that
establishes an account with Xbox Live.

 

2.26                           “Sub-Publisher” means an entity that has a valid
Xbox 360 publisher license agreement with Microsoft or a Microsoft affiliate and
with whom Publisher has entered an agreement to allow such entity to publish a
Software Title or Online Content in specific Sales Territories.

 

2.27                           “Suggested Retail Price” means the highest per
unit price that Publisher or its agent recommends the FPU be made commercially
available to end-users in a particular Sales Territory.  If the Suggested Retail
Price of a particular Software Title varies among the countries in a single
Sales Territory, then the highest Suggested Retail Price established for any of
the countries will be used to determine the appropriate royalty fees for the
entire Sales Territory.

 

2.28                           “Title Update” means an update, upgrade, or
technical fix to a Software Title that Xbox Live Users can automatically
download to the Xbox Live User’s Xbox 360.

 

2.29                           “Wholesale Price” means the highest per unit
price that Publisher charges retailers and/or distributors in bona fide third
party transactions for the right to distribute and sell the Software Title
within a Sales Territory, it being agreed that (i) any transactions involving
affiliates of Publisher (entities controlling, controlled by or under common
control of, Publisher) are not to be considered in determining the Wholesale
Price; (ii) if Publisher enters into an agreement with a third party (such as a
Sub-publisher) providing the third party with the exclusive right to distribute
the Software Title in a Sales Territory, the Wholesale Price is governed by the
price charged by the third party rather than the terms of the exclusive
distribution agreement between Publisher and such third party; and (iii) if the
Wholesale Price varies among countries in a single Sales Territory, the highest
Wholesale Price used in the Sales Territory will be used to determine the
appropriate royalty fees for the entire Sales Territory.

 

2.30                           “Xbox 360” means the second version of
Microsoft’s proprietary game system, successor to the Xbox game system,
including operating system software and hardware design specifications.

 

2.3 1                        “Xbox 360 Publisher Guide” means a document (in
physical, electronic or Web site form) created by Microsoft that supplements
this Agreement and provides detailed requirements regarding the
Pre-Certification and Certification approval process, Branding Specifications,
replication requirements, royalty payment process, marketing guidelines,
technical specifications and certification requirements, Demo Version
requirements, packaging requirements and other operational aspects of the Xbox
360 and Xbox Live.  Microsoft may supplement, revise or update the Xbox 360
Publisher Guide from time to time in its reasonable discretion as set forth in
this Agreement.

 

2.32                           “Xbox Live” means the proprietary online service
offered by Microsoft to Xbox Live Users.

 

2.33                           “Xbox Live User” means any individual that
accesses and uses Xbox Live.

 

2.34                           Other Terms.  All other capitalized terms have
the definitions set forth with the first use of such term as described in this
Agreement.

 

3.                                      Xbox 360 Development Kit License

 

Publisher shall enter into one or more development kit license(s) for the
applicable territory(ies) to which Xbox 360 game development kits will be
shipped for use by Publisher (each an “XDK License”) pursuant to which Microsoft
or its affiliate may license to Publisher software development tools and
hardware to assist Publisher in the development and testing of

 

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Software Titles, including redistributable code that Publisher must incorporate
into Software Titles pursuant to the terms and conditions contained in the XDK
License.

 

4.                                      Approval Process

 

4.1                                 Standard Approval Process.  The standard
approval process for a Software Title is divided into four phases comprised of
Concept approval, Pre-Certification, Certification, and Marketing Materials
approval.  Unless Publisher elects the EU Approval Option for a European FPU
(described below), Publisher is required to submit its Software Title
toMicrosoft for evaluation at all four phases.  Each phase is identified below
and further described in the Xbox 360 Publisher Guide.  Additional or alternate
approval processes for Online Content may be further described in the Xbox 360
Publisher Guide

 

4.1.1                        Concept.  For each Software Title, Publisher shall
deliver to Microsoft a completed Conceptsubmission form (in the form provided by
Microsoft to Publisher) that describes the Software Title.  In the event that
Publisher desires to host or have a third party host or provide to Xbox Live
Users any of Publisher’s Online Game Features,Publisher shall so indicate on the
Concept submission form and must execute an addendum to this Agreement, which
addendum is available upon request and will be incorporated into this Agreement
upon execution.  Following evaluation of Publisher’s Concept submission,
Microsoft will notify Publisher of whether the Concept is approved or rejected. 
If approved, the Concept submission form, in the form submitted and approved by
Microsoft, is incorporated herein by reference and adherence to its terms is a
requirement for Certification.  Publisher may propose Online Content at any time
after a Concept has been approved, in which case Publisher shall deliver to
Microsoft a separate Concept submission for each proposed piece of Online
Content.

 

4.1.2                        Pre-Certification.  If the Concept is approved,
Publisher shall deliver to Microsoft a code-complete version of the Software
Title or Online Content that includes all current features of the Software Title
and such other content as may be required under the Xbox 360 Publisher Guide. 
Upon receipt, Microsoft shall conduct technicalscreen and/or other testing of
the Software Title or Online Content consistent with the Xbox 360 Publisher
Guide and willsubsequently provide Publisher with advisory feedback regarding
such testing.

 

4.1.3                        Certification.  Following Pre-Certification,
Publisher shall deliver to Microsoft the proposed finalrelease version of the
applicable Software Title that is complete, ready for access via Xbox Live (if
applicable), release,manufacture, and commercial distribution.  Such version
must include the final content rating certification required by Section 4.4,
have identified program errors corrected, and have any and all changes
previously required by Microsoft implemented.  Microsoft shall conduct
compliance, compatibility, functional and other testing consistent with the Xbox
360 Publisher Guide (“Certification Testing”) and shall subsequently provide
Publisher with the results of such testing, including any required fixes
required prior to achieving Certification.  Release from Certification for a
Software Title (and for Online Content as applicable) is based on (1) passing
the Certification Testing; (2) conformance with the approved Concept and any
required submission materials as stated in the Xbox 360 Publisher Guide; (3)
Packaging Materials approval; (4) consistency with the goals and objectives of
the Xbox 360 console platform and Xbox Live; and (5) continuing and ongoing
compliance with all Certification requirements and other requirements as set
forth in the Xbox 360 Publisher Guide and this Agreement.

 

4.1.4                        Marketing Materials Approval.  Publisher shall
submit all Marketing Materials to Microsoft and shall not distribute such
Marketing Materials unless and until Microsoft has approved them in writing. 
Prior to use or publication of any Marketing Materials, Publisher agrees to
incorporate all changes relating to use of the Licensed Trademarks that
Microsoft may reasonably request and will use its commercially reasonable
efforts to incorporate other changes reasonably suggested by Microsoft
(provided, however, that in any event Publisher shall at all times comply with
the Branding Specifications).

 

4.2                                 EU Approval Option.  For a Software Title
that Publisher intends to distribute solely in the EuropeanSales Territory (a
“European FPU”), Publisher may choose to forego Concept approval (Section
4.1.1), Pre-Certification(Section 4.1.2) and/or Marketing Materials approval
(Section 4.1.4) and submit such Software Title to Microsoft only
forCertification approval.  This option is referred to herein as the “EU
Approval Option.” The EU Approval Option applies solely to distribution of
European FPUs, and is not available for Online Content intended to be available
in the European Sales Territory.  If Publisher chooses the EU Approval Option,
Publisher shall not use the Licensed Trademarks on theEuropean FPU and the
license grant set forth in Section 12.1 is withdrawn as to such European FPU. 
In addition, Publisher shall make no statements in advertising, marketing
materials, packaging, Web sites or otherwise that the European FPU is approved
or otherwise sanctioned by Microsoft or is an official Xbox 360 Software Title. 
The European FPU may not be distributed outside the European Sales Territory
without complying with all terms of this Agreement concerning approvals and the
release of the FPU as deemed relevant by Microsoft.  Microsoft may provide
additional information in the Xbox 360

 

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Publisher Guide regarding the European Approval Option.  Notwithstanding
Publisher’s choice of the EU Approval Option, all other portions of this
Agreement other than those specifically identified above shall remain in effect.

 

4.3                                 Resubmissions and Additional Review.  If a
Software Title or Online Content fails Certification, and if Publisher has made
good faith efforts to address any issues raised by Microsoft, Microsoft will
give Publisher the opportunityto resubmit such Software Title or Online Content
for Certification.  Microsoft may charge Publisher a reasonable fee designed to
offset the costs associated with testing upon resubmission.  Publisher may
request the ability to submit versions of the Software Title or Online Content
at stages of development other than as identified above for review and feedback
by Microsoft.  Such review is within the discretion of Microsoft and may require
the payment of reasonable fees by Publisher to offset the costs associated with
the review of such Software Titles or Online Content.

 

4.4                                 Content Rating.  For those Sales Territories
that utilize a content rating system, Microsoft will not acceptsubmission of a
Software Title for Certification approval unless and until Publisher has
obtained, at Publisher’s sole cost, arating not higher than “Mature (17+)” or
its equivalent from the appropriate rating bodies and/or any and all
otherindependent content rating authority/authorities for the applicable Sales
Territory(ies) reasonably designated by Microsoft(such as ESRB, ELSPA, CERO,
etc.).  Publisher shall include the applicable rating(s) prominently on FPUs and
Marketing Materials, in accordance with the applicable rating body guidelines,
and shall include the applicable rating in a header file of the Software Title
and in Online Content, as described in the Xbox 360 Publisher Guide.  For those
Sales Territories that do not utilize a content rating system, Microsoft will
not approve any Software Title or Online Content that, in its opinion,contains
excessive sexual content or violence, inappropriate language or other elements
deemed unsuitable for the Xbox 360platform.  If, after Commercial Release, a
Software Title is determined as suitable for adults only or otherwise as
indecent, obscene or otherwise prohibited by law, the Publisher shall at its own
costs recall all FPUs.  Publisher hereby represents and warrants that any Online
Game Features and other game-related Online Content not included in the initial
Software Title FPU will not be inconsistent with the content rating (or, in
those countries that do not utilize a content rating system, with the overall
nature of the content) of the underlying Software Title.  Content rating
information and requirements may be further described in the Xbox 360 Publisher
Guide.

 

4.5                                 Publisher Testing.  Publisher shall perform
its own testing of the Software Title and FPUs and shall keepwritten or
electronic records of such testing during the Term of this Agreement and for a
period of [*] (“Test Records”).  Upon Microsoft’s request, Publisher shall
provide Microsoft with copies of the Test Records, FPUs and Software Title
(either in pre-Commercial Release or Commercial Release versions, as Microsoft
may request).

 

4.6                                 Mutual Approval Required.  Publisher shall
not distribute the Software Title, nor manufacture any FPU intended for
distribution, unless and until Microsoft has given its final approval and
release from Certification version of theSoftware Title and both parties have
approved the FPU in writing.

 

4.7                                 Title Updates

 

4.7.1                        All Title Updates for Software Titles are subject
to approval by Microsoft.  Publisher may releaseone Title Update per Software
Title free of charge.  Any additional Title Updates proposed by Publisher may be
subject to a reasonable charge.

 

4.7.2                        Microsoft may require Publisher to develop and
provide a Title Update if (a) a Software Title or Online Content adversely
affects Xbox Live, (b) if a change to the Xbox 360 Publisher Guide affecting
Online Content requires a Title Update, (c) if Certification is revoked for
Online Content, or (d) for any other reason at Microsoft’sreasonable
discretion.  Microsoft will not charge Publisher for the Certification, hosting,
and distribution of Title Updates to Xbox Live Users for the first Title Update
(if any) per Software Title or Online Content required by a specific change in
the Xbox 360 Publisher Guide or for any other reason at Microsoft’s reasonable
discretion.  Microsoft reserves the right to charge Publisher a reasonable fee
to offset the costs associated with the Certification, hosting, and distribution
of Title Updates to Xbox Live Users that are required because of revocation of
Certification or a Software Title or Online Content adversely affecting Xbox
Live.

 

5.                                      Xbox 360 Publisher Guide

 

Publisher acknowledges that the Xbox 360 Publisher Guide is an evolving document
and subject to change during the term of this Agreement.  Publisher agrees to be
bound by all provisions contained in the then-applicable version of the Xbox 360
Publisher Guide.  Publisher agrees that upon Publisher’s receipt of notice of
availability of the applicable supplement, revision, or updated version of the
Xbox 360 Publisher Guide (which may be via a publisher newsletter or other
electronic notification), Publisher automatically is bound by all provisions of
the Xbox 360 Publisher Guide as supplemented, revised,

 

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[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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or updated.  Publisher’s continued distribution of FPUs after a notice of
supplement, revision or update is included in the Xbox 360 Publisher Guide or
made available to Publisher constitutes Publisher’s agreement to the
then-current Xbox 360Publisher Guide as supplemented, revised or updated. 
Microsoft will specify in each such supplement, revision or update a reasonable
effective date of each change if such change is not required to be effective
immediately.  Only with respect to a Software Title that has passed
Pre-Certification prior to the applicable revision or update, Publisher will not
be obligated to comply with any changes made to the technical or content
requirements for Software Titles in the Xbox 360 Publisher Guide, except in
circumstances where such change is deemed by Microsoft to be vitally important
to the success of the Xbox 360 platform (e.g.  changes due to piracy, technical
failure) or will not add significant expense to the Software Title’s
development.  In addition, changes made in Branding Specifications or other
Marketing Materials requirements will be effective as to a Software Title that
has passed Certification only on a “going forward” basis (i.e., only to such
Marketing Materials and/or FPUs as are manufactured after Microsoft notifies
Publisher of the change).  Notwithstanding the foregoing, Publisher shall comply
with such changes to the Xbox 360 Publisher Guide related to Branding
Specifications or other Marketing Materials requirements retroactively if
Microsoft agrees to pay for Publisher’s direct, out-of-pocket
expensesnecessarily incurred as a result of its retrospective compliance with
the change.

 

6.                                      Post-Release Compliance

 

6.1                                 Correction of Bugs or Errors. 
Notwithstanding Microsoft’s Certification, all Software Titles must remain in
compliance with all Certification requirements and requirements set forth in the
Xbox 360 Publisher Guide on acontinuing and ongoing basis.  Publisher must
correct any material program bugs or errors in conformance with the Xbox 360
Publisher Guide whenever discovered and Publisher agrees to correct such
material bugs and errors as soon as possible after discovery.  With respect to
bugs or errors discovered after Commercial Release of the applicable Software
Title, Publisher will, at Microsoft’s request or allowance, correct the bug or
error in all FPUs manufactured after discovery and Microsoft may charge a
reasonable amount to cover the costs of Certifying the Software Title again.

 

6.2                                 Online Content; Minimum Commitment

 

6.2.1                        Publisher agrees that each Online Game Feature of a
Software Title will be made available via Xbox Live for at least [*] following
the respective Commercial Release of the FPUs of the Software Title in each
Sales Territory in which is available (the “Minimum Commitment”).  Publisher is
obligated to provide all necessarysupport for such Online Game Feature during
its availability.  Following the Minimum Commitment period, Publisher may
terminate Microsoft’s license associated with such Online Game Feature upon [*]
prior written notice to Microsoft; and/or Microsoft may discontinue the
availability of any or all such Online Game Feature via Xbox Live [*] prior
written notice to Publisher.  Publisher is responsible for communicating the
duration of Online Game Feature availability to Xbox Live Users, and for
providing reasonable advance notice to Xbox Live Users of any discontinuation of
such Online Game Feature.

 

6.2.2                        Subject to Section 10.3, Publisher agrees that
Microsoft has the right to make Online Content other than Online Games Features
submitted by Publisher available to Xbox Live Users for the Term of this
Agreement.  Publisher agrees to provide all necessary support for such Online
Content as long as such Online Content is made available to Xbox Live Users and
for [*] thereafter.

 

6.2.3                        Archive Copies.  Publisher agrees to maintain, and
to possess the ability to support, copies in object code, source code and symbol
format, of all Online Content available to Xbox Live Users during the term of
this Agreement and for no less than [*]

 

7.                                      Manufacturing

 

7.1                                 Authorized Replicators.  Publisher will use
only an Authorized Replicator to produce FPUs.  Prior to placing an order with a
replicator for FPUs, Publisher shall confirm with Microsoft that such entity is
an Authorized Replicator.  Microsoft will endeavor to keep an up-to-date list of
Authorized Replicators in the Xbox 360 Publisher Guide.  Publisher will notify
Microsoft in writing of the identity of the applicable Authorized Replicator and
the agreement for such replication services shall be as negotiated by Publisher
and the applicable Authorized Replicator, subject to the requirements in this
Agreement.  Publisher acknowledges that Microsoft may charge the Authorized
Replicator fees for rights, services or products associated with the manufacture
of FPUs and that the agreement with the Authorized Replicator grants Microsoft
the right to instruct the Authorized Replicator to cease the manufacture of FPU
and/or prohibit the release of FPU to Publisher or its agents in the event
Publisher is in breach of this Agreement or any credit arrangement entered into
byMicrosoft and Publisher or Publisher affiliates.  Microsoft does not guarantee
any level of performance by the Authorized Replicators, and Microsoft will have
no liability to Publisher for any Authorized Replicator’s failure to perform its

 

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[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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obligations under any applicable agreement between Microsoft and such Authorized
Replicator and/or between Publisher and such Authorized Replicator.  Microsoft
has no responsibility for ensuring that FPUs are free of all defects.

 

7.2                                 Submissions to the Authorized Replicator. 
Microsoft, and not Publisher, will provide to the applicable Authorized
Replicator the final release version of the Software Title and all
specifications required by Microsoft for themanufacture of the FPUs including,
without limitation, the Security Technology (as defined in Section 7.9 below). 
Publisher is responsible for preparing and delivering to the Authorized
Replicator all other items required for manufacturing FPUs including approved
Packaging Materials associated with the FPUs.  Subject to the approval of
Publisher (which approvalshall not be unreasonably withheld), Microsoft has the
right to have included in the packaging of FPUs such promotionalmaterials for
Xbox, Xbox 360, Xbox Live, and/or other Xbox or Xbox 360 products or services as
Microsoft may determine in its reasonable discretion.  Microsoft will be
responsible for delivering to the Authorized Replicator all such promotional
materials as it desires to include with FPUs, and, unless otherwise agreed by
the parties, any incremental replication and insertion costs relating to such
marketing materials will be borne by Microsoft.

 

7.3                                 Verification Versions.  Publisher shall
cause the Authorized Replicator to create several test versions ofeach FPU
(“Verification Version(s)”) that will be provided to both Microsoft and
Publisher for evaluation.  Prior to full manufacture of a FPU by the Authorized
Replicator, both Publisher and Microsoft must approve the applicable
Verification Version.  Throughout the manufacturing process and upon the request
of Microsoft, Publisher shall cause the AuthorizedReplicator to provide
additional Verification Versions of the FPU for evaluation by Microsoft. 
Microsoft’s approval is a condition precedent to manufacture, however Publisher
shall grant the final approval and shall work directly with the Authorized
Replicator regarding the production run.  Publisher agrees that all FPUs must be
replicated in conformity with all of the quality standards and manufacturing
specifications, policies and procedures that Microsoft requires of its
Authorized Replicators, and that all Packaging Materials must be approved by
Microsoft prior to packaging.  Publisher shall cause the Authorized Replicator
to include the BTS on each FPU.

 

7.4                                 Samples.  For each Software Title sku, at
Publisher’s cost, Publisher shall provide Microsoft with [*] FPUs and
accompanying Marketing Materials per Sales Territory in which the FPU will be
released.  Such units may be used in marketing (subject to Publisher’s
approval), as product samples, for customer support, testing and for archival
purposes.  Publisher will not have to pay a royalty fee for such samples nor
will such samples count towards the Unit Discounts under Exhibit 1.

 

7.5                               Minimum Order Quantities

 

7.5.1                        Within [*] after the date on which both Microsoft
and Publisher have authorized the Authorized Replicator to begin replication of
FPUs for distribution to a specified Sales Territory, (receipt of both approvals
is referred to as “Release to Manufacture”), Publisher must place orders to
manufacture the minimum order quantities (“MOQs”) as described in the Xbox 360
Publisher Guide.  Microsoft may update and revise the MOQs [*] which will be
effective starting the following [*].  Currently, the MOQs are as follows:

 

[*]

 

7.5.2                        For the purposes of this section, a “Disc” shall
mean an FPU that is signed for use on a certain defined range of Xbox 360
hardware, regardless of the number of languages or product skus contained
thereon.  The MOQsper Software Title are cumulative per Sales Territory.  For
example, if an FPU is released in both the North American Sales Territory and
the European Sales Territory, the cumulative MOQ per Software Title would be [*]
The MOQ per Software Title and the MOQ per Disc, however, are not cumulative. 
For example, a single Disc FPU released only in the North America Sales
Territory will have a total minimum order quantity of [*] which would cover the
[*] MOQ per Software Title and the [*] MOQ per Disc (rather than [*] which would
have been the total minimum order quantity if the MOQ per Software Title and the
MOQ per Disc had been cumulative).

 

7.5.3                        If Publisher fails to place orders to meet any
applicable minimum order quantity within [*] of Release to Manufacture,
Publisher shall immediately pay Microsoft the applicable royalty fee for the
number of FPUs represented by the difference between the applicable MOQ and the
number of FPUs of the Software Title actually ordered by Publisher.

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

7

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7.6                                 Manufacturing Reports.  For purposes of
assisting in the scheduling of manufacturing resources, on a [*] basis, or as
otherwise requested by Microsoft in its reasonable discretion, Publisher shall
provide Microsoft with forecasts showing manufacturing projections [*] out for
each Software Title.  Publisher will use commercially reasonable efforts to
cause the Authorized Replicator to deliver to Microsoft true and accurate [*]
statements of FPUs manufactured in each [*] on a Software Title-by-Software
Title basis and in sufficient detail to satisfy Microsoft, within [*] Microsoft
will have reasonable audit rights to examine the records of the Authorized
Replicator regarding the number of FPUs manufactured.

 

7.7                                 New Authorized Replicator.  If Publisher
requests that Microsoft certify and approve a third party replicator that is not
then an Authorized Replicator, Microsoft will consider such request in good
faith.  Publisher acknowledges and agrees that Microsoft may condition
certification and approval of such third party on the execution of an agreement
in a form satisfactory to Microsoft pursuant to which such third party agrees to
strict quality standards, non-disclosure requirements, license fees for use of
Microsoft intellectual property and trade secrets, and procedures to protect
Microsoft’s intellectual property and trade secrets.  Notwithstanding anything
contained herein, Publisher acknowledges that Microsoft is not required to
certify, maintain the certification or approve any particular third party as an
AuthorizedReplicator, and that the certification and approval process may be
time-consuming.

 

7.8                                 Alternate Manufacturing in Europe. 
Publisher may, solely with respect to FPUs manufactured for distribution in the
European Sales Territory, utilize a different process or company for the
combination of a FPU withPackaging Materials provided that such packaging
process incorporates the BTS and otherwise complies with the Xbox 360 Publisher
Guide.  Publisher shall notify Microsoft regarding its use of such process or
company so that the parties may properly coordinate their activities and
approvals.  To the extent that Microsoft is unable to accommodate such processes
or company, Publisher shall modify its operations to comply with Microsoft’s
requirements.

 

7.9                                 Security.  Microsoft has the right to add to
the final release version of the Software Title delivered by Publisher to
Microsoft, and to all FPUs, such digital signature technology and other security
technology and copyright management information (collectively, “Security
Technology”) as Microsoft may determine to be necessary, and/or Microsoft may
modify the signature included in any Security Technology included in the
Software Title by Publisher at Microsoft’s discretion.  Additionally, Microsoft
may add Security Technology that prohibits the play of Software Titles on Xbox
360 units manufactured in a region or country different from the location of
manufacture of the respective FPUs or that have been modified in any manner not
authorized by Microsoft.

 

7.10                           Demo Versions.  If Publisher wishes to distribute
a Demo Version in FPU format, Publisher must obtainMicrosoft’s prior written
approval and Microsoft may charge a reasonable fee to offset costs of the
Certification.  Subject to the terms of the Xbox 360 Publisher Guide, such Demo
Version(s) may be placed on a single disc, either as a stand-alone or with other
Demo Versions and the price of such units must be [*] or its equivalent in local
currency.  Unless separately addressed in the Xbox 360 Publisher Guide, all
rights,obligations and approvals set forth in this Agreement as applying to
Software Titles shall separately apply to any DemoVersion.  [*]  If Publishers
wishes to distribute a Demo Versions in an online downloadable format, such
downloadable Demo Version shall be distributed via by Microsoft Xbox Live in
accordance with Section 10.3, and such downloadable Demo Version will be subject
to all other terms and policies applicable to Online Content set forth herein
and in the Xbox 360 Publisher Guide.

 

8.                                      Payments

 

The Parties shall make payments to each other under the terms of Exhibit 1.

 

9.                                      Marketing, Sales and Support

 

9.1                                 Publisher Responsible.  As between Microsoft
and Publisher, Publisher is solely responsible for the marketing and sales of
the Software Title.  Publisher is also solely responsible for providing
technical and all other support relating to the FPUs (including for Xbox Live
Users of Online Content).  Publisher shall provide all appropriate
contactinformation (including without limitation Publisher’s address and
telephone number, and the applicable individual/groupresponsible for customer
support), and shall also provide all such information to Microsoft for posting
on http://www.xbox.com, or such successor or related Web site identified by
Microsoft or in Xbox Live.  Customer support shall at all times conform to the
Customer Service Requirements set forth in the Xbox 360 Publisher Guide and
industry standards in the console game industry.

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

8

--------------------------------------------------------------------------------

 

9.2                                 Warranty.  Publisher shall provide the
original end user of any FPU a minimum warranty in accordancewith local laws and
industry practices.  For example, in the United States, Publisher shall, as of
the Effective Date, provide a minimum [*] limited warranty that the FPU will
perform in accordance with its user documentation or Publisher will refund the
purchase price or provide a replacement FPU at no charge.  Publisher may offer
additional warranty coverage consistent with the traditions and practices of
video game console game publishers within the applicable Sales Territory or as
otherwise required by local law.

 

9.3                                 Recall.  Notwithstanding anything to the
contrary contained in this Agreement, if there is a material defectin a Software
Title and/or any FPUs, which defect in the reasonable judgment of Microsoft
would significantly impair theability of an end user to play such Software Title
or FPU or would adversely affect in a material way the gameplay of theXbox 360
or Xbox Live, Microsoft may require Publisher to recall FPUs and undertake
prompt repair or replacement of such Software Title and/or FPUs.

 

9.4                                 No Bundling with Unapproved Peripherals,
Products or Software.  Except as expressly stated in this section, Publisher
shall not market or distribute a FPU bundled with any other product or service,
nor shall Publisher knowingly permit or assist any third party in such bundling,
without Microsoft’s prior written consent.  Publisher may market or distribute
(i) FPU bundled with a Software Title(s) that has been previously certified and
released by Microsoft for manufacturing; or (ii) FPU bundled with a peripheral
product (e.g.  game pads) that has been previously licensed as an “Xbox 360
Licensed Peripheral” by Microsoft, without obtaining the written permission of
Microsoft.  Publisher shall contact Microsoft in advance to confirm that the
peripheral or Software Title to be bundled has previously been approved by
Microsoft pursuant to a valid license.

 

9.5                                 Software Title License.  Subject to the
prior approval of Publisher (not to be unreasonably withheld or delayed),
Publisher grants Microsoft a fully-paid, royalty-free, worldwide, non-exclusive
license (i) to publicly perform theSoftware Titles at conventions, events, trade
shows, press briefings, public interactive displays and the like; (ii) to use
the title of the Software Title, and screen shots from the Software Title, in
advertising and promotional material relating to Xbox 360 and related Microsoft
products and services, as Microsoft may reasonably deem appropriate; (iii)
distribute Demo Versions with the Official Xbox Magazine, as a standalone
product with other demo software; and (iv) distribute SoftwareTitle trailers via
xbox.com.  Publisher may also select Online Content for inclusion in public
interactive displays and/or compilation demo discs published by Microsoft, in
which case Publisher grants Microsoft a fully-paid, royalty-free, worldwide,
transferable, sublicenseable license to broadcast, transmit, distribute, host,
publicly display, reproduce and manufacture such selected Online Content as part
of public interactive displays and compilation demo discs, and to distributeand
permit end users to download and store (and, at Publisher’s discretion, to make
further copies) such Online Content viapublic interactive displays.

 

10.                               Grant of Distribution License, Limitations

 

10.1                           Distribution License.  Upon Certification of the
Software Title, approval of the Marketing Materials and the FPU test version of
the Software Title by Microsoft, and subject to the terms and conditions
contained within thisAgreement.  Microsoft grants Publisher a non-exclusive,
non-transferable, license to distribute FPUs containing Redistributable and
Sample Code (as defined in the XDK License) and Security Technology (as defined
above) within the Sales Territories approved in the Software Title’s Concept in
FPU form to third parties for distribution to end users and/or directly to end
users.  The license to distribute the FPUs is personal to Publisher and except
for transfers of FPU through normal channels of distribution (e.g. wholesalers,
retailers), absent the written approval of Microsoft, Publisher may not
sublicense or assign its rights under this license to other parties.  For the
avoidance of doubt, without the written approval of Microsoft, Publisher may not
sublicense, transfer or assign its right to distribute Software Titles or FPU to
another entity that will brand, co-brand or otherwise assume control over such
products as a “publisher” as that concept is typically understood in the console
game industry.  Publisher may only grant end users the right to make personal,
non-commercial use of Software Titles and may not grant end users any of the
other rights reserved to a copyright holder under US Copyright Law, Japanese
Copyright Law, or its international equivalent.  Publisher’s license rights do
not include any license, right, power or authority to subject Microsoft’s
software or derivative works thereof or intellectual property associated
therewith in whole or in part to any of the terms of an Excluded License. 
“Excluded License” means any license that requires as a condition of use,
modification and/or distribution of software subject to the Excluded License,
that such software or other software combined and/or distributed with such
software be (a) disclosed or distributed in source code form; (b) licensed for
the purpose of making derivative works; or (c) redistributable at no charge.

 

10.2                           No Distribution Outside the Sales Territory. 
Publisher shall distribute FPUs only in Sales Territories for which the Software
Title has been approved by Microsoft.  Publisher shall not directly or
indirectly export any FPUs from an authorized Sales Territory to an unauthorized
territory nor shall Publisher knowingly permit or assist any third party in
doing

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

9

--------------------------------------------------------------------------------

 

so, nor shall Publisher distribute FPUs to any person or entity that it has
reason to believe may re-distribute or sell such FPUs outside authorized Sales
Territories.

 

10.3                           Online Content.  In consideration of the royalty
payments as described in Exhibit 1, Publisher grants toMicrosoft (i) a
worldwide, transferable, sublicensable (only transferable and sublicensable with
respect to Microsoft affiliates) license to broadcast, transmit, distribute,
host, publicly display, reproduce, and license Online Content submitted
toMicrosoft hereunder for use on Xbox 360s, and (ii) a worldwide, transferable
license solely to distribute to end users andpermit end users to download and
store Online Content (and, at Publisher’s discretion, to make further copies). 
Publisher agrees that the license grants set forth in this section applicable to
Online Content are exclusive, meaning that except as expressly permitted under
this Agreement, the Xbox 360 Publisher Guide and/or as agreed by the Parties,
Publisher shall not directly or indirectly permit or enable access to Online
Content by any means, methods, platforms or services other than through Xbox
Live, or as otherwise set forth in this Agreement.  Notwithstanding the
foregoing, this Section 10.3 does not prevent Publisher from making other
platform versions of its Software Titles or Online Content available via other
platform- specific online services.  This Section 10.3 shall survive expiration
or termination of this Agreement solely to the extent and for the duration
necessary to effectuate Section 17.3 below.

 

10.4                           No Reverse Engineering.  Publisher may utilize
and study the design, performance and operation of Xbox 360 or Xbox Live solely
for the purposes of developing the Software Title or Online Content. 
Notwithstanding the foregoing, Publisher shall not, directly or indirectly,
reverse engineer or aid or assist in the reverse engineering of all or any part
of Xbox 360 or Xbox Live except and only to the extent that such activity is
expressly permitted by applicable law notwithstanding this limitation.  In the
event applicable law grants Publisher the right to reverse engineer the Xbox 360
or Xbox Live notwithstanding this limitation, Publisher shall provide Microsoft
with written notice prior to such reverse engineering activity, information
regarding Publisher’s intended method of reverse engineering, its purpose and
the legal authority for such activity and shall afford Microsoft a reasonable
period of time before initiating such activity in order to evaluate the activity
and/or challenge the reverse engineering activity with the appropriate legal
authorities.  Publisher shallrefrain from such reverse engineering activity
until such time as any legal challenge is resolved in Publisher’s favor. 
Reverse engineering includes, without limitation, decompiling, disassembly,
sniffing, peeling semiconductor components, or otherwise deriving source code. 
In addition to any other rights and remedies that Microsoft may have under the
circumstances, Publisher shall be required in all cases to pay royalties to
Microsoft in accordance with and Exhibit 1 with respect to any games or other
products that are developed, marketed or distributed by Publisher, and derived
in whole or in part from the reverse engineering of Xbox 360, Xbox Live or any
Microsoft data, code or other material.

 

10.5                           Reservation of Rights.  Microsoft reserves all
rights not explicitly granted herein.

 

10.6                           Ownership of the Software Titles.  Except for the
intellectual property supplied by Microsoft to Publisher (including without
limitation the Licensed Trademarks hereunder and the licenses in certain
software and hardware granted by an XDK License), ownership of which is retained
by Microsoft, insofar as Microsoft is concerned, Publisher will own allrights in
and to the Software Titles and Online Content.

 

10.7                           Sub-Publishing.  Notwithstanding Section 10.1,
Publisher may enter into independent agreements with other publishers to
distribute Software Titles in multiple approved Sales Territories (a
“Sub-Publishing Relationship”), solong as:

 

10.7.1                  Publisher provides written notice to Microsoft, at least
[*] prior to authorizing a Sub- Publisher to manufacture any Software Title(s),
of the Sub-Publishing relationship, along with (i) a summary of the scope and
nature of the Sub-Publishing relationship including, without limitation, as
between Publisher and Sub-Publisher, (ii) which party will be responsible for
Certification of the Software Title(s) and/or any Online Content, (iii) a list
of the SoftwareTitle(s) for which Sub-publisher has acquired publishing rights,
(iv) the geographic territory(ies) for which such rights weregranted, and (v)
the term of Publisher’s agreement with Sub-publisher; and

 

10.7.2                  The Sub-publisher has signed an Xbox 360 publisher
license agreement (“Xbox 360 PLA”) and both Publisher and Sub-publisher are and
remain at all times in good standing under each of their respective Xbox 360
PLAs.  Publisher is responsible for making applicable royalty payments for the
FPUs for which it places manufacturing orders, and Sub-publisher is responsible
for making royalty payments for the FPUs for which it places manufacturing
orders.

 

10.8                           Authorized Affiliates.  If Publisher and an
affiliate execute the “Publisher Affiliate Agreement” provided in Exhibit 4,
then Publisher’s authorized affiliate may exercise the rights granted to
Publisher under this Agreement.  The foregoing shall not apply to any Publisher
affiliate which pays or intends to pay royalties from a European billing
address.

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

10

--------------------------------------------------------------------------------

 

Any such European affiliate shall instead execute an Xbox 360 Publisher
Enrollment with MIOL, a copy of which is attached hereto as Exhibit 3.

 

11.                               Usage Data

 

Publisher acknowledges that the operation of the Xbox Live service requires that
Microsoft collect and store Xbox Live User usage data, including, without
limitation, Xbox Live User statistics, scores, ratings, and rankings
(collectively, “Xbox Live User Data”), as well as personally-identifiable Xbox
Live User data (e.g., name, email address) (“Personal Data”).  Microsoft
reserves the right, in its discretion, to use such Xbox Live User Data for any
purpose, including without limitation, posting the Xbox Live User Data on
Xbox.com or other Microsoft Web sites.  Microsoft agrees to use commercially
reasonableefforts to periodically make certain Xbox Live User Data and Personal
Data available to Publisher; provided that Publisher’suse of such data is in
accordance with the then-current Xbox Live Privacy Statement and such other
reasonable restrictions as Microsoft may require.  Without limiting the
foregoing, Publisher agrees that any disclosure of Personal Data to Publisher is
only used by Publisher and may not be shared with any other third parties, and
any permitted email communications with Xbox Live Users includes instructions
for opting out of receiving any further communications from Publisher.

 

12.                               Trademark Rights and Restrictions

 

12.1                           Licensed Trademarks License.  In each Software
Title, FPU, Online Content and on all MarketingMaterials, Publisher shall
incorporate the Licensed Trademarks and include credit and acknowledgement to
Microsoft as setforth in the Xbox 360 Publisher Guide.  Microsoft grants to
Publisher a non-exclusive, non-transferable, personal license to use the
Licensed Trademarks in connection with Software Titles, FPUs, Online Content and
Marketing Materials according to the Xbox 360 Publisher Guide and other
conditions herein, and solely in connection with marketing, sale, and
distribution in the approved Sales Territories or via Xbox Live.

 

12.2                           Limitations.  Publisher is granted no right, and
shall not purport, to permit any third party to use theLicensed Trademarks in
any manner without Microsoft’s prior written consent.  Publisher’s license to
use Licensed Trademarks in connection with the Software Title, FPUs and/or
Online Content does not extend to the merchandising or sale of related or
promotional products.

 

12.3                           Branding Specifications.  Publisher’s use of the
Licensed Trademarks (including without limitation in FPUs, Online Content and
Marketing Materials) must comply with the Branding Specifications set forth in
the Xbox 360 Publisher Guide.  Publisher shall not use Licensed Trademarks in
association with any third party trademarks in a manner that might suggest
co-branding or otherwise create potential confusion as to source or sponsorship
of the Software Title,Online Content or FPUs or ownership of the Licensed
Trademarks, unless Microsoft has otherwise approved such use inwriting.  Upon
notice or other discovery of any non-conformance with the requirements or
prohibitions of this section, Publisher shall promptly remedy such
non-conformance and notify Microsoft of the non-conformance and remedial steps
taken.

 

12.4                           Protection of Licensed Trademarks.  Publisher
shall assist Microsoft in protecting and maintaining Microsoft’s rights in the
Licensed Trademarks, including preparation and execution of documents necessary
to register theLicensed Trademarks or record this Agreement, and giving
immediate notice to Microsoft of potential infringement of the Licensed
Trademarks.  Microsoft shall have the sole right to and in its sole discretion
may, commence, prosecute or defend, and control any action concerning the
Licensed Trademarks, either in its own name or by joining Publisher as a party
thereto.  Publisher shall not during the term of this Agreement contest the
validity of, by act or omission jeopardize, or take any action inconsistent
with, Microsoft’s rights or goodwill in the Licensed Trademarks in any country,
including attempted registrationof any Licensed Trademark, or use or attempted
registration of any mark confusingly similar thereto.

 

12.5                           Ownership and Goodwill.  Publisher acknowledges
Microsoft’s ownership of all Licensed Trademarks and all goodwill associated
with the Licensed Trademarks.  Use of the Licensed Trademarks shall not create
any right, title or interest therein in Publisher’s favor.  Publisher’s use of
the Licensed Trademarks shall inure solely to the benefit of Microsoft.

 

13.                               Non-Disclosure; Announcements

 

13.1                           Non-Disclosure Agreement.  The information,
materials and software exchanged by the parties hereunder or under an XDK
License, including the terms and conditions hereof and of the XDK License, are
subject to the Non- Disclosure Agreement between the parties attached hereto as
Exhibit 5 (the “Non-Disclosure Agreement”), which is incorporated herein by
reference; provided, however, that for purposes of the foregoing, Section
2(a)(i) of the Non-Disclosure

 

11

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Agreement shall hereinafter read, “The Receiving Party shall: (i)] Refrain from
disclosing Confidential Information of the Disclosing Party to any third parties
for as long as such remains undisclosed under 1(b) above except as expressly
provided in Sections 2(b) and 2(c) of this [Non-Disclosure] Agreement.” In this
way.  all Confidential Information provided hereunder or by way of the XDK
License in whatever form (e.g.  information, materials, tools and/or software
exchanged by the parties hereunder or under an XDK License), including the terms
and conditions hereof and of the XDK License, unless otherwise specifically
stated, will be protected from disclosure for as long as it remains
Confidential.

 

13.2                           Public Announcements.  Neither party shall issue
any such press release or make any such public announcement(s) related to the
subject matter of this Agreement or any XDK License without the express prior
consent of theother party, which consent will not be unreasonably withheld or
delayed.  Nothing contained in this Section 13.2 will relieve Publisher of any
other obligations it may have under this Agreement, including without limitation
its obligations to seek and obtain Microsoft approval of Marketing Materials.

 

13.3                           Required Public Filings.  Notwithstanding
Sections 13.1 and 13.2, the parties acknowledge that this Agreement, or portions
thereof, may be required under applicable law to be disclosed, as part of or an
exhibit to a party’srequired public disclosure documents.  If either party is
advised by its legal counsel that such disclosure is required, it will notify
the other in writing and the parties will jointly seek confidential treatment of
this Agreement to the maximum extent reasonably possible, in documents approved
by both parties and filed with the applicable governmental or regulatory
authorities, and/or Microsoft will prepare a redacted version of this Agreement
for filing.

 

14.                               Protection of Proprietary Rights

 

14.1                           Microsoft lntellectual Property.  If Publisher
learns of any infringement or imitation of the Licensed Trademarks, a Software
Title, Online Content or FPU, or the proprietary rights in or related to any of
them, it will promptly notify Microsoft thereof.  Microsoft may take such action
as it deems advisable for the protection of its rights in and to such
proprietary rights, and Publisher shall, if requested by Microsoft, cooperate in
all reasonable respects therein at Microsoft’s expense.  In no event.  however,
shall Microsoft be required to take any action if it deems it inadvisable to do
so.  Microsoft will have the right to retain all proceeds it may derive from any
recovery in connection with such actions.

 

14.2                           Publisher Intellectual Property.  Publisher,
without the express written permission of Microsoft, may bring any action or
proceeding relating to infringement or potential infringement of a Software
Title, Online Content or FPU, to the extent such infringement involves any
proprietary rights of Publisher (provided that Publisher will not have the right
to bring any such action or proceeding involving Microsoft’s intellectual
property).  Publisher shall make reasonable efforts to inform Microsoft
regarding such actions in a timely manner.  Publisher will have the right to
retain all proceeds it may derive from any recovery in connection with such
actions.  Publisher agrees to use all commercially reasonable efforts to protect
and enforce its proprietary rights in the Software Title or Online Content.

 

14.3                           Joint Actions.  Publisher and Microsoft may agree
to jointly pursue cases of infringement involving theSoftware Titles or Online
Content (since such products will contain intellectual property owned by each of
them).  Unless the parties otherwise agree, or unless the recovery is expressly
allocated between them by the court (in which case the terms of Sections 14.1
and 14.2 will apply), in the event Publisher and Microsoft jointly prosecute an
infringement lawsuit under this provision, any recovery will be used first to
reimburse Publisher and Microsoft for their respective reasonable attorneys’
feesand expenses, pro rata, and any remaining recovery shall also be given to
Publisher and Microsoft pro rata based upon the fees and expenses incurred in
bringing such action.

 

15.                               Warranties

 

15.1                           Publisher.  Publisher warrants and represents
that:

 

15.1.1                  It has the full power to enter into this Agreement;

 

15.1.2                  It has obtained and will maintain all necessary rights
and permissions for its and Microsoft’s use of the Software Title, FPUs,
Marketing Materials, Online Content, all information, data, logos, and software
or other materials provided to Microsoft and/or made available to Xbox Live
Users via Xbox Live (excluding those portions that consist of the Licensed
Trademarks, Security Technology and redistributable components of the so-called
“XDK” in the form as delivered to Publisher by Microsoft pursuant to an XDK
License) (collectively, the “Publisher Content”), and that all Publisher Content
complies with all laws and regulations, and docs not and will not infringe upon
or misappropriate any third party trade secrets, copyrights, trademarks,
patents, publicity, privacy or other proprietary rights.

 

12

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15.1.3                  It shall comply with all laws, regulations, industry
content rating requirements and administrative orders and requirements within
any applicable Sales Territory relating to the distribution, sale and marketing
of the Software Title, and shall keep in force all necessary licenses, permits,
registrations, approvals and/or exemptions throughout the term of this Agreement
and for so long as it is distributing, selling or marketing the Software Title
in any applicable Sales Territory.

 

15.1.4                  The Software Title, Online Content and/or information,
data, logos and software or other materials provided to Microsoft and/or made
available to Xbox Live Users via Xbox Live, do not and shall not contain any
messages, data, images or programs that are, by law, defamatory, obscene or
pornographic, or in any way violate any applicable laws or industry content
rating requirements (including without limitation laws of privacy) of the
applicable Sales Territory(ies)where the Software Title is marketed and/or
distributed.

 

15.1.5                  The Online Content shall not harvest or otherwise
collect information about Xbox Live Users, including e-mail addresses, without
the Xbox Live Users’ express consent; and the Online Content shall not link to
any unsolicited communication sent to any third party.

 

15.2                           Microsoft.  Microsoft warrants and represents
that it has the full power to enter into this Agreement and it has not
previously and will not grant any rights to any third party that are
inconsistent with the rights granted to Publisherherein

 

15.3                        DISCLAIMER.  EXCEPT AS EXPRESSLY STATED IN THIS
SECTION 15, MICROSOFT PROVIDES ALL MATERIALS (INCLUDING WITHOUT LIMITATION THE
SECURITY TECHNOLOGY) AND SERVICES HEREUNDER ON AN “AS IS” BASIS, AND MICROSOFT
DISCLAIMS ALL OTHER WARRANTIES UNDER THE APPLICABLE LAWS OF ANY COUNTRY, EXPRESS
OR IMPLIED, REGARDING THE MATERIALS AND SERVICES IT PROVIDES HEREUNDER,
INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, OR WARRANTY OF FREEDOM FROM COMPUTER VIRUSES.  WITHOUT LIMITATION,
MICROSOFT PROVIDES NO WARRANTY OF NON-INFRINGEMENT.

 

15.4                        EXCLUSION OF INCIDENTAL, CONSEQUENTIAL AND CERTAIN
OTHER DAMAGES.  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT
SHALL MICROSOFT, ITS AFFILIATES, LICENSORS OR ITS SUPPLIERS BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE
WHATSOEVER, RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
INCLUDING WITHOUT LIMITATION, LOST PROFITS OR LOST GOODWILL AND WHETHER BASED ON
BREACH OF ANY EXPRESS OR IMPLIED WARRANTY, BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE) OR STRICT LIABILITY, REGARDLESS OF WHETHER SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGE OR IF SUCH DAMAGE COULD HAVE BEEN
REASONABLY FORESEEN.

 

15.5                        LIMITATION OF LIABILITY.  THE MAXIMUM LIABILITY OF
MICROSOFT TO PUBLISHER OR TO ANY THIRD PARTY ARISING OUT OF THIS AGREEMENT WILL
BE [*] FURTHERMORE, UNDER NO CIRCUMSTANCES SHALL MICROSOFT BE LIABLE TO
PUBLISHER FOR ANY DAMAGES WHATSOEVER WITH RESPECT TO ANY CLAIMS RELATING TO THE
SECURITY TECHNOLOGY AND/OR ITS EFFECT ON ANY SOFTWARE TITLE OR FOR ANY
STATEMENTS OR CLAIMS MADE BY PUBLISHER, WHETHER IN PUBLISHER’S MARKETING
MATERIALS OR OTHERWISE, REGARDING THE AVAILABILITY OR OPERATION OF ANY ONLINE
FEATURES.

 

16.           Indemnity; Insurance.  A claim for which indemnity may be sought
hereunder is referred to as a “Claim.”

 

16.1                           Mutual Indemnification.  Each party hereby agrees
to indemnify, defend, and hold the other party harmless from any and all third
party claims, demands, costs, liabilities, losses, expenses and damages
(including reasonable attorneys’ fees, costs, and expert witnesses’ fees)
arising out of or in connection with any claim that, taking the
claimant’sallegations to be true, would result in a breach by the indemnifying
party of any of its representations, warranties orcovenants set forth in Section
15.

 

16.2                           Additional Publisher Indemnification Obligation. 
Publisher further agrees to indemnify, defend, and hold Microsoft harmless from
any and all third party claims, demands, costs, liabilities, losses, expenses
and damages (including reasonable attorneys’ fees, costs, and expert witnesses’
fees) arising out of or in connection with any claim

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

13

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regarding any Software Title or FPU including without limitation any claim
relating to quality, performance, safety thereof and excluding those portions of
the Software Title or FPU that consist of the Licensed Trademarks, Security
Technology and redistributable components of the so-called “XDK” in the form as
delivered to Publisher by Microsoft pursuant to an XDK License), or arising out
of Publisher’s use of the Licensed Trademarks in breach of this Agreement.

 

16.3                           Notice and Assistance.  The indemnified party
shall: (i) provide the indemnifying party reasonably prompt notice in writing of
any Claim and permit the indemnifying party to answer and defend such Claim
through counsel chosen and paid by the indemnifying party; and (ii) provide
information, assistance and authority to help the indemnifyingparty defend such
Claim.  The indemnified party may participate in the defense of any Claim at its
own expense.  Theindemnifying party will not be responsible for any settlement
made by the indemnified party without the indemnifyingparty’s written
permission, which will not be unreasonably withheld or delayed.  In the event
the indemnifying party and the indemnified party agree to settle a Claim, the
indemnified party agrees not to publicize the settlement without first
obtainingthe indemnifying party’s written permission.

 

16.4                           Insurance

 

16.4.1                  Publisher shall maintain sufficient and appropriate
insurance coverage to enable it to meet its obligations under this Agreement and
by law (whether Products Liability, General Liability or some other type of
insurance).  For FPUs distributed in the Japan Sales Territory, Publisher’s
coverage will have minimum limits of the Japanese yen equivalent of [*] per
occurrence, with a deductible of not more than the Japanese yen equivalent of
[*] For FPUs distributed in the Asian Sales Territory, Publisher’s coverage will
have minimum limits of [*] per occurrence (or its equivalent value in local
currency as of the date of issuance), with a deductible of not more than [*] (or
its equivalent value in local currency as of the date of issuance).

 

16.4.2                  As of the Effective Date, Publisher is not required
under this Agreement to hold any errors and omissions policy through a third
party and may self-insure.  However, in the event that fails to meet Microsoft’s
annually updated criteria for self-insurance, which will be reasonable be based
on Publisher’s liquidity position and will be communicated to Publisher at least
[*] in advance of applicability, Publisher will at its sole cost and expense
shall have endorsed Microsoft as an additional insured on Publisher’s media
perils errors and omissions liability policy for claims arising in connection
with production, development and distribution of each Software Title in an
amount no less than [*] on a per occurrence or per incident basis.  Coverage
provided to Microsoft under the policy shall be primary to and not contributory
with any insurance maintained by Microsoft.  Upon request, Publisher agrees to
furnish copies of the additional insured endorsement and/or a certificate of
insurance evidencing compliance with this requirement.

 

17.                               Term and Termination

 

17.1                           Term.  The term of this Agreement shall commence
on the Effective Date and shall continue until [*] Unless one party gives the
other notice of non-renewal within [*] of the end of the then-current term, this
Agreement shall automatically renew for successive [*] terms.

 

17.2                           Termination for Breach.  If either party
materially fails to perform or comply with this Agreement or anyprovision
thereof, and fails to remedy the default within [*] after the receipt of notice
to that effect, then the other party has the right, at its sole option and upon
written notice to the defaulting party, to terminate this Agreement upon written
notice; provided that if Publisher is the party that has materially failed to
perform or comply with this Agreement, then Microsoft has the right, but not the
obligation, to suspend availability of the Online Content during such [*]
period.  Any notice of default hereunder must be prominently labeled “NOTICE OF
DEFAULT”; provided, however, that if the default is of Sections 10, 12 or
Sections 1 or 2 of Exhibit 1, the Non-Disclosure Agreement, or an XDK License,
then the non-defaulting party may terminate this Agreement immediately upon
written notice, without being obligated to provide a [*] cure period.  The
rights and remedies provided in this section are not exclusive and are in
addition to any other rights and remedies provided by law or this Agreement.  If
the uncured default is related to a particular Software Title or particular
Online Content, then the party not in default has the right, in its discretion,
to terminate this Agreement itsentirety or with respect to the applicable
Software Title or the particular Online Content.

 

17.3                        Effect of Termination; Sell-off Rights.  Upon
termination or expiration of this Agreement, Publisher has no further right to
exercise the rights licensed hereunder or within the XDK License and shall
promptly cease all manufacturing of FPU through its Authorized Replicators and,
other than as provided below, cease use of the Licensed Trademarks.  Publisher
shall have a period of [*] to sell-off its inventory of FPUs existing as of the
date of termination or expiration,

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

14

--------------------------------------------------------------------------------

 

after which sell-off period Publisher shall immediately return all FPUs to an
Authorized Replicator for destruction.  Publisher shall cause the Authorized
Replicator to destroy all FPUs and issue to Microsoft written certification by
an authorized representative of the Authorized Replicator confirming the
destruction of FPUs required hereunder.  All of Publisher’s obligations under
this Agreement shall continue to apply during such [*] sell-off period.  If this
Agreement is terminated due to Publisher’s breach, at Microsoft’s option,
Microsoft may require Publisher to immediately destroy all FPUs not yet
distributed to Publisher’s distributors, dealers and/or end users and shall
require all those distributing the FPU over which it has control to cease
distribution.  Upon termination or expiration of this Agreement, Publisher shall
continue to support existing Online Game Features for FPUs that have already
been sold until the end of the Minimum Commitmentterm.

 

17.4                           Cross-Default.  If Microsoft has the right to
terminate this Agreement, then Microsoft may, at its solediscretion also
terminate the XDK License.  If Microsoft terminates the XDK License due to a
breach by Publisher, then Microsoft may, at its sole discretion also terminate
this Agreement.

 

17.5                           Survival.  The following provisions shall survive
expiration or termination of this Agreement: Sections 2,6.2.2 (as to the Minimum
Commitment), 6.2.3, 8 and Sections 1, 2 and 5 of Exhibit I, 9.1-9.3, 10.3, 10.4,
1 I, 13.1, 14, 15, 16, 17.3, 17.5 and 18.

 

18.                               General

 

18.1                           Governing Law; Venue; Attorneys Fees.  This
Agreement is to be construed and controlled by the laws of the State of
Washington.  U.S.A., and Publisher consents to exclusive jurisdiction and venue
in the federal courts sitting in King County, Washington, U.S.A., unless no
federal jurisdiction exists, in which case Publisher consents to exclusive
jurisdiction and venue in the Superior Court of King County, Washington, U.S.A. 
Publisher waives all defenses of lack of personal jurisdiction and forum non
conveniens.  Process may be served on either party in the manner authorized by
applicable law or court rule.  The English version of this Agreement is
determinative over any translations thereof.  If either party employs attorneys
to enforce any rights arising out of or relating to this Agreement, the
prevailing party is entitled to recover its reasonable attorneys’ fees, costs
and other expenses.  This choice of jurisdiction provision does not prevent
Microsoft from seeking injunctive relief with respect to a violation of
intellectual property rights or confidentiality obligations in any appropriate
jurisdiction.

 

18.2                           Notices; Requests.  All notices and requests in
connection with this Agreement are deemed given on the [*] after they are
deposited in the applicable country’s mail system [*] postage prepaid, certified
or registered, return receipt requested; or [*] sent by overnight courier,
charges prepaid, with a confirming fax; and addressed as follows:

 

Publisher:

Activision Publishing.  Inc.

Microsoft:

MICROSOFT LICENSING, GP

 

3100 Ocean Park Boulevard

 

6100 Neil Road, Suite 100

 

Santa Monica, CA 90405

 

Reno, NV 89511-1137

 

 

 

 

 

 

Attention:

Xbox Accounting Services

Attention:

Greg Deutsch

 

 

Fax:

310-255-2152

with a cc to:

MICROSOFT CORPORATION

Phone:

310-255-2555

 

One Microsoft Way

Email:

gdeutsch@activision.com

 

Redmond, WA 98052-6399

 

 

 

 

 

 

Attention:

Law & Corporate Affairs Department

 

 

 

Assoc.  General Counsel, Consumer Legal

 

 

 

Group (H&ED)

 

 

 

Fax: (425) 936-7329

 

or to such other address as the party to receive the notice or request so
designates by written notice to the other.

 

18.3                           No Delay or Waiver.  No delay or failure of
either party at any time to exercise or enforce any right orremedy available to
it under this Agreement, and no course of dealing or performance with respect
thereto, will constitute awaiver of any such right or remedy with respect to any
other breach or failure by the other party.  The express waiver by a

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

15

--------------------------------------------------------------------------------

 

party of any right or remedy in a particular instance will not constitute a
waiver of any such right or remedy in any other instance.  All rights and
remedies will be cumulative and not exclusive of any other rights or remedies.

 

18.4                           Assignment.  Publisher may not assign this
Agreement or any portion thereof, to any third party unlessMicrosoft expressly
consents to such assignment in writing.  Microsoft will have the right to assign
this Agreement and/or any portion thereof as Microsoft may deem appropriate
and/or authorize its affiliates or partners to perform this Agreement in whole
or part on its behalf.  For the purposes of this Agreement, a merger,
consolidation, or other corporate reorganization, or a transfer or sale of a
controlling interest in a party’s stock, or of all or substantially all of its
assets is to be deemed to be an assignment.  This Agreement will inure to the
benefit of and be binding upon the parties, their successors, administrators,
heirs, and permitted assigns.

 

18.5                           No Partnership.  Microsoft and Publisher are
entering into a license pursuant to this Agreement andnothing in this Agreement
is to be construed as creating an employer-employee relationship, a partnership,
a franchise, or a joint venture between the parties.

 

18.6                           Severability.  if any provision of this Agreement
is found invalid or unenforceable pursuant to judicialdecree or decision, the
remainder of this Agreement shall remain valid and enforceable according to its
terms.  The parties intend that the provisions of this Agreement be enforced to
the fullest extent permitted by applicable law.  Accordingly, the parties agree
that if any provisions are deemed not enforceable, they are to be deemed
modified to the extent necessary to make them enforceable.

 

18.7                           Injunctive Relief.  The parties agree that
Publisher’s threatened or actual unauthorized use of the LicensedTrademarks or
other Microsoft proprietary rights whether in whole or in part, may result in
immediate and irreparable damage to Microsoft for which there is no adequate
remedy at law.  Either party’s threatened or actual breach of the
confidentiality provisions may cause damage to the non-breaching party, and in
such event the non-breaching party is entitled to seek appropriate injunctive
relief from any court of competent jurisdiction without the necessity of posting
bond or other security.

 

18.8                           Entire Agreement; Modification; No Offer.  This
Agreement (including the Concept, the Non-Disclosure  Agreement, the Xbox 360
Publisher Guide, written amendments thereto, and other incorporated documents)
and the XDK License constitute the entire agreement between the parties with
respect to the subject matter hereof and merges all prior and contemporaneous
communications.  This Agreement shall not be modified except by a written
agreement dated subsequent hereto signed on behalf of Publisher and Microsoft by
their duly authorized representatives.  Neither this Agreement nor any written
or oral statements related hereto constitute an offer, and this Agreement is not
legally binding until executed by both parties hereto.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date on the dates indicated below.

 

MICROSOFT LICENSING, GP

ACTIVISION PUBLISHING, INC.

 

 

 

 

 

 

/s/ Roxanne V. Spring

 

/s/ George L. Rose

 

By (sign)

 

By (sign)

 

 

 

Roxanne V. Spring

 

GEORGE L. ROSE

 

Name (Print)

 

Name (Print)

 

 

 

SPM

 

Sr. Vice President & General Counsel

 

Title

 

Title

 

 

 

25-OCT-2005

 

October 24, 2005

 

Date

 

Date

 

16

--------------------------------------------------------------------------------

 

EXHIBIT 1

 

PAYMENTS

 

1.             Platform Royalty

 

a.                                       For each FPU manufactured during the
term of this Agreement, Publisher shall pay Microsoft nonrefundable royalties in
accordance with the royalty tables set forth below (Tables 1 and 2) and the
“Unit Discount” table set forth in Section 1.d of this Exhibit 1 (Table 3).

 

b.                                      The royalty fee is determined by the
“Threshold Price” (which is the Wholesale Price (WSP) or Suggested Retail Price
(SRP) at which Publisher intends to sell the Software Title in the applicable
Sales Territory).  To determine the applicable royalty rate for a particular
Software Title in a particular Sales Territory, the applicable Threshold Price
fromTable 1 below will determine the correct royalty “Tier.” The royalty fee is
then as set forth in Table 2 based on the Manufacturing Region in which the FPUs
will be manufactured.  For example, assume the Wholesale Price of a Software
Title to be sold in the European Sales Territory is [*] According to Table 1,
[*] royalty rates will apply to that SoftwareTitle and the royalty rate is
determined in Table 2 by the Manufacturing Region.  If the Software Title were
manufactured inthe European Manufacturing Region, the royalty fee would be [*]
per FPU.  If the Software Title were manufactured in Asian Manufacturing
Region.  the royalty fee would be [*] per FPU.

 

[*]

 

[*]

 

[*]

 

c.                                       [*] submit to Microsoft, at least [*]
for a Software Title, a completed and signed “Royalty Tier Selection Form” in
the form attached to this Agreement as Exhibit 2 for each Sales Territory.  The
selection indicated in the Royalty Tier Selection Form will only be effective
once the Royalty Tier Selection Form has been accepted by Microsoft.  If
Publisher does not submit a Royalty Tier Selection Form as required hereunder,
the royalty fee for such Software Title will default to [*] regardless of the
actual Threshold Price.  The selection of a royalty tier for a Software Title in
a Sales Territory is binding for the life of that SoftwareTitle even if the
Threshold Price is reduced following the Software Title’s Commercial Release.

 

d.                                      Unit Discounts.  Publisher is eligible
for a discount to FPUs manufactured for a particular Sales Territory(a “Unit
Discount”) based on the number of FPUs that have been manufactured for sale in
that Sales Territory as described in Table 3 below.  Except as provided in
Section 4 below, units manufactured for sale in a Sales Territory are aggregated
only towards a discount on FPUs manufactured for that Sales Territory; there is
no worldwide or cross-territorial aggregation of units for a particular Software
Title.  The discount will be rounded up to the nearest Cent, Yen or hundredth of
a Euro.

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1

--------------------------------------------------------------------------------

 

[*]

 

[*]

 

[*]

 

2.                                      Payment Process

 

a.                                       [*] Publisher shall not authorize its
Authorized Replicators to begin production until such time as [*] Depending upon
Publisher’s credit worthiness, Microsoft may, but is not obligated to, offer
Publisher credit terms for the payment of royalties due under this Agreement
within [*] of receipt of invoice.  All payments will be made by wire transfer
only in accordance with the payment instructions set forth in the Xbox 360
Publisher Guide.

 

b.                                      Publisher will pay royalties for FPUs
manufactured in the North American Manufacturing Region in US Dollars, for FPUs
manufactured in the Asian Manufacturing Region in Japanese Yen and for FPUs
manufactured in the European Manufacturing Region in Euros.

 

3.                                      Billing Address

 

a.                                       Publisher may have only two “bill to”
addresses for the payment of royalties under this Agreement, one for the North
American Manufacturing Region and one for the Asian Manufacturing Region.  If
Publisher desires to have a “bill-to” address in a European country.  Publisher
(or a Publisher Affiliate) must execute an MIOL Enrollment Form in the form
attached to this Agreement as Exhibit 3.

 

Publisher’s billing address(es) is as follows:

 

North America Manufacturing Region:

Asian Manufacturing Region (if different):

 

 

 

 

 

 

Name:

 

Activision Publishing, Inc.

Name:

 

 

 

Address:

 

3100 Ocean Park Boulevard

Address:

 

 

 

 

 

Santa Monica, CA 90405

 

 

 

 

 

 

 

 

 

 

 

Attention:

 

 

 

 

 

 

Email address:

 

 

 

Attention:

 

 

 

Fax:

 

 

 

Email address:

 

 

 

Phone:

 

 

 

Fax:

 

 

 

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

2

--------------------------------------------------------------------------------

 

 

 

 

Phone:

 

 

 

4.                                      Asia Simship Program

 

The purpose of this program is to encourage Publisher to release Japanese FPUs
or North American FPUs, that have been multi-region signed to run on NTSC-J
boxes (hereinafter collectively referred to as “Simship Titles”), in Hong Kong,
Singapore and Taiwan (referred to as “Simship Territory”) at the same time as
Publisher releases the Software Title in the Japan and/or North American Sales
Territories.  In order for a Software Title to qualify as a Simship Title,
Publisher must release the Software Title in the Simship Territory on the same
date as the Commercial Release date of such Software Title in the Japan and/or
North American Sales Territories, wherever the Software Title was first
Commercially Released (referred to as “Original Territory”). To the extent that
a Software Title qualifies as a Simship Title, the applicable royalty tier
(under Section 1.b of this Exhibit 1 above) and Unit Discount (under Section 1.d
of this Exhibit 1 above) is determined as if all FPUs of such Software Title
manufactured for distribution in both the Original Territory and the Simship
Territory were manufactured for distribution in the Original Territory.  For
example, if a Publisher initially manufactures [*] FPUs of a Software Title for
the Japan Sales Territory and simships [*] of those units to the Simship
Territory, the royalty fee for all of the FPUs is determined by [*]  In this
example, Publisher would also receive a [*] Unit Discount on [*] units for
having exceeded the Unit Discount level specified in Section 1.d of this Exhibit
1 above applicable to the Japan Sales Territory.  Publisher must provide
Microsoft with written notice of its intention to participate in the Asian
Simship Program with respect to a particular Software Title at least [*] prior
to manufacturing any FPUs it intends to qualify for the program. In its notice,
Publisher shallprovide all relevant information, including total number of FPUs
to be manufactured, number of FPUs to be simshipped into the Sirnship Territory,
date of simship, etc.  Publisher remains responsible for complying with all
relevant import, distribution and packaging requirements as well as any other
applicable requirements set forth in the Xbox 360 Publisher Guide.

 

5.                                      Online Content

 

a.                                       For the purpose of this Section 5, the
following capitalized terms have the following meanings:

 

[*]

 

[*]

 

b.                                      Publisher may, from time to time, submit
Online Content to Microsoft for Microsoft to distribute via Xbox Live. [*]

 

c.                                       [*]

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

3

--------------------------------------------------------------------------------

 

e.                                       Within [*] after the end of [*] with
respect to which Microsoft owes Publisher any Royalty Fees, Microsoft shall
furnish Publisher with a statement, together with payment for any amount shown
thereby to be due to Publisher.  The statement will contain information
sufficient to discern how the Royalty Fees were computed.

 

6.                                      Xbox Live Billing and Collection

 

Microsoft is responsible for billing and collecting all fees associated with
Xbox Live, including fees for subscriptions and/or any Online Content for which
a Xbox Live User may be charged. [*].

 

7.                                      Taxes

 

a.                                       The amounts to be paid by either party
to the other do not include any foreign, U.S. federal, state, local, municipal
or other governmental taxes, duties, levies, fees, excises or tariffs, arising
as a result of or in connection with thetransactions contemplated under this
Agreement including, without limitation, (i) any state or local sales or use
taxes or anyvalue added tax or business transfer tax now or hereafter imposed on
the provision of any services to the other party underthis Agreement, (ii) taxes
imposed or based on or with respect to or measured by any net or gross income or
receipts of eitherparty, (iii) any franchise taxes, taxes on doing business,
gross receipts taxes or capital stock taxes (including any minimumtaxes and
taxes measured by any item of tax preference), (iv) any taxes imposed or
assessed after the date upon which thisAgreement is terminated, (v) taxes based
upon or imposed with reference to either parties’ real and/or personal
propertyownership and (vi) any taxes similar to or in the nature of those taxes
described in (i), (ii), (iii), (iv) or (v) above, now or hereafter imposed on
either party (or any third parties with which either party is permitted to enter
into agreements relating to its undertakings hereunder) (all such amounts,
together with any penalties, interest or any additions thereto, collectively
“Taxes”). Neither party is liable for any of the other party’s Taxes incurred in
connection with or related to the sale of goods and services under this
Agreement, and all such Taxes are the financial responsibility of the party
obligated to pay such taxes as determined by the applicable law, provided that
both parties shall pay to the other the appropriate Collected Taxes in
accordance with subsection 7.b below.  Each party agrees to indemnify, defend
and hold the other party harmless from any Taxes (other than Collected Taxes,
defined below) or claims, causes of action, costs (including, without limitation
reasonable attorneys’ fees) and any other liabilities of any nature whatsoever
related to such Taxes to the extent such Taxes relate to amounts paid under this
Agreement.

 

b.                                      Any sales or use taxes described in 7.a
above that (i) are owed by either party solely as a result of entering into this
Agreement and the payment of the fees hereunder, (ii) are required to be
collected from that party under applicable law, and (iii) are based solely upon
the amounts payable under this Agreement (such taxes the “Collected Taxes”).
will be stated separately as applicable on payee’s invoices and will be remitted
by the other party to the payee, upon request payee shall remit to the other
party official tax receipts indicating that such Collected Taxes have been
collected and paid by the payee.  Either party may provide the other party an
exemption certificate acceptable to the relevant taxing authority (including
without limitation a resale certificate) in which case payee shall not collect
the taxes covered by such certificate.  Each party agrees to take such
commercially reasonable steps as are requested by the other party to minimize
such Collected Taxes in accordance with all relevant laws and to cooperate with
and assist the other party, in challenging the validity of any Collected Taxes
or taxes otherwise paid by the payor party.  Each party shall indemnify and hold
the other party harmless from any Collected Taxes, penalties, interest, or
additions to tax arising from amounts paid by one party to the other under this
Agreement, that are asserted or assessed against one party to the extent such
amounts relate to amounts that are paid to or collected by one party from the
other under this section.  If any taxing authority refunds any tax to a party
that the other party originally paid, or a party otherwise becomes aware that
any tax was incorrectly and/or erroneously collected from the other party, then
that party shall promptly remit to the other party an amount equal to such
refund or incorrect collection as the case may be plus any interest thereon.

 

c.                                       1f taxes are required to be withheld on
any amounts otherwise to be paid by one party to the other, the paying party
shall deduct such taxes from the amount otherwise owed and pay them to the
appropriate taxing authority.  At a party’s written request and expense, the
parties shall use reasonable efforts to cooperate with and assist each other in
obtaining tax certificates or other appropriate documentation evidencing such
payment, provided, however, that the responsibility for such documentation shall
remain with the payee party.  If publisher is required by any non-U.S.A.
government to withhold income taxes on payments to Microsoft, then Publisher may
deduct such taxes from the amount owed Microsoft and shall pay them to the
appropriate tax authority, provided that within [*] of such payment, Publisher
delivers to Microsoft an official receipt for any such taxes withheld or other
documents necessary to enable Microsoft to claim a U.S.A. Foreign Tax Credit.

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

4

--------------------------------------------------------------------------------

 

d.                                      This Section 7 shall govern the
treatment of all taxes arising as a result of or in connection with this
Agreement notwithstanding any other section of this Agreement.

 

8.                                      Audit

 

During the term of this Agreement and for [*] each party shall keep all usual
and proper records related to its performance under this Agreement, including
but not limited to audited financial statements and support for all transactions
related to the ordering, production, inventory, distribution and
billing/invoicing information.  Such records, books of account, and entries will
be kept in accordance with generally accepted accounting principles.  Either
party (the “Auditing Party”) may audit and/or inspect the other party’s (the
“Audited Party”) records no more than [*] in any [*] period in order to verify
compliance with the terms of this Agreement.  The Auditing Party may, upon
reasonable advance notice, audit the Audited Party’s records and consult with
the Audited Party’s accountants for the purpose of verifying the Audited Party’s
compliance with the terms of this Agreement and for a period of [*]  Any such
audit will be conducted during regular business hours at the Audited Party’s
offices.  Any such audit will be paid for by Auditing Party unless Material
discrepancies are disclosed.  As used in this section, “Material” means [*]  If
Material discrepancies are disclosed, the Audited Party agrees to pay the
Auditing Party for [*]

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

5

--------------------------------------------------------------------------------

 

EXHIBIT 2

 

XBOX 360 ROYALTY TIER SELECTION FORM

 

PLEASE COMPLETE THE BELOW INFORMATION, SIGN THE FORM, AND FAX IT TO MICROSOFT AT
+1 (425) 708-2300 TO THE ATTENTION OF MICROSOFT LICENSING, GP (MSLI) AND YOUR
ACCOUNT MANAGER.

 

NOTES:

1.              THIS FORM MUST BE SUBMITTED [*].  IF THIS FORM IS NOT SUBMITTED
ON TIME, THE ROYALTY RATE WILL DEFAULT TO [*] FOR THE APPLICABLE SALES
TERRITORY.

 

2.              A SEPARATE FORM MUST BE SUBMITTED FOR EACH SALES TERRITORY.

 

1.

 

Publisher Name:

 

 

 

 

 

2.

 

Xbox 360 Software Title Name:

 

 

 

 

 

3.

 

XeMID Number:

4.

Manufacturing Region (check one):

 

 

 

 

 

 

 

 

 

 

o

 

North American

 

 

 

 

 

o

 

European

 

 

 

 

 

o

 

Asian

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.

 

Sales Territory (check one):

6.

Final Certification Date:

 

 

 

 

 

 

 

 

 

o

 

North American Sales Territory

 

 

 

 

o

 

Japan Sales Territory

 

 

 

 

o

 

European Sales Territory

 

 

 

 

o

 

Asian Sales Territory

 

 

 

 

 

 

 

 

 

7.

 

Select Royalty Tier: (check one):

[*]

o

 

[*]

o

 

 

The undersigned represents that he/she has authority to submit this form on
behalf of the above publisher, and that the information contained herein is true
and accurate.

 

 

 

 

 

By (sign)

 

 

 

 

 

 

 

Name, Title (Print)

 

 

 

 

 

 

E-Mail Address (for confirmation of receipt)

 

 

 

 

 

 

Date (Print mm/dd/yy)

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1

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EXHIBIT 3

 

XBOX 360 PUBLISHER ENROLLMENT FORM

 

PLEASE COMPLETE THIS FORM, SIGN IT, AND FAX IT TO MICROSOFT AT
+1 (425) 708-2300 TO THE ATTENTION OF YOUR ACCOUNT MANAGER.

 

NOTE: PUBLISHER MUST COMPLETE, SIGN AND SUBMIT THIS ENROLLMENT FORM [*]

 

This Xbox 360 Publisher License Enrollment (“Enrollment”) is entered into
between Microsoft Ireland Operations Ltd. (“MIOL”) and Activision UK, Ltd.
(“Publisher”), and is effective as of the latter of the two signatures
identified below.  The terms of that certain Xbox 360 Publisher License
Agreement signed by Microsoft Licensing GP and Activision Publishing, Inc. dated
on or about                                   (the “Xbox 360 PLA”) are
incorporated herein by reference.

 

1.                                       Term.  This Enrollment will expire on
the date on which the Xbox 360 PLA expires, unless it is terminated earlier as
provided for in that agreement.

 

2.                                       Representations and Warranties.  By
signing this Enrollment, the parties agree to be bound by the terms of this
Enrollment and Publisher represents and warrants that: (i) it has read and
understood the Xbox 360 PLA, including any amendments thereto, and agree to be
bound by those; (ii) it is either the entity that signed the Xbox 360 PLA or its
affiliate;and (iii) the information that provided herein is accurate.

 

3.                                       Notices; Requests.  All notices and
requests in connection with this Enrollment are deemed given on (i) the [*]
after they are deposited in the applicable country’s mail system ([*] if sent
internationally), postage prepaid, certified or registered, return receipt
requested; or (ii) [*] after they are sent by overnight courier, charges
prepaid, with a confirming fax; and addressed as follows:

 

Publisher: Activision UK, Ltd.

Microsoft:

 

MICROSOFT IRELAND OPERATIONS LTD.

 

 

 

 

Microsoft European Operations Centre,

Address:

Parliament House, St. Laurence Way

 

 

Atrium Building Block B,

 

Slough, Berkshire, SL I 2BW

 

 

Carmenhall Road,

 

 

 

 

Sandyford Industrial Estate

Attention:

George Rose, Director & SVP & General

 

 

Dublin 18

Counsel

 

 

 

Ireland

Fax:

01753 756109

 

 

 

 

 

 

 

Fax:  353 1 706 4110

Phone:

01753 756100

 

 

 

 

 

Attention:

 

MIOL Xbox Accounting Services

Email:

grose@activision.com

 

 

 

 

 

with a cc to:

 

MICROSOFT CORPORATION

 

 

 

 

One Microsoft Way

 

 

 

 

Redmond, WA 98052-6399

 

 

 

 

 

 

 

Attention:

 

Law & Corporate Affairs Department

 

 

 

 

Consumer

 

 

 

 

Legal Group, H&ED (Xbox)

 

 

 

 

Fax:  +1  (425) 706-7329

 

or to such other address as the party to receive the notice or request so
designates by written notice to the other.

 

[remainder of page intentionally left blank]

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1

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4.                                       Billing Address.  For purposes of the
Xbox 360 PLA, Exhibit 1, Section 3, Publisher’s billing address forthe European
Manufacturing Region is as follows:

 

Name:

 

Activision UK, Ltd.

 

 

 

Address:

 

Parliament House, St. Laurence Way

 

 

Slough, Berkshire SLI 2BW

 

 

 

VAT number:

 

GB 387814408

 

 

 

Attention:

 

Frank Borghouts, Head of Finance, Europe

 

 

 

Email address:

 

tborghouts@activision.com

 

 

 

Fax:

 

01753 756109

 

 

 

Phone:

 

01753 756100

 

 

MICROSOFT IRELAND OPERATIONS LTD.

PUBLISHER:

 

 

 

 

 

 

 

 

 

By (sign)

By (sign)

 

 

 

 

 

Name (Print)

Name (Print)

 

 

 

 

 

Title

Title

 

 

 

 

 

Date (Print mm/dd/yy)

Date (Print mm/dd/yy)

 

 

2

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EXHlBIT 4

 

AUTHORIZED AFFILIATES

 

Publisher affiliates authorized to perform the rights and obligations under this
Agreement are:

 

I.

Name:

 

 

II.

Name:

 

 

 

Address:

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Telephone:

 

 

 

Telephone:

 

 

 

Fax:

 

 

 

Fax:

 

 

 

Publisher will provide Microsoft at least [*] written notice of the name and
address of each additional Publisher affiliate that Publisher wishes to add to
this Exhibit 4. Any additional Publisher affiliate may not perform any rights or
obligations under this Agreement until it has signed and submitted a Publisher
Affiliate Agreement (attached below) to Microsoft

 

PUBLISHER AFFILIATE AGREEMENT

 

For good and valuable
consideration,                                                         , a
corporation of                                             (“Publisher Affiliate
“) hereby covenants and agrees with Microsoft Licensing, GP, a Nevada general
partnership that Publisher Affiliate will comply with all obligations of
                                             (“Publisher”) pursuant to that
certain Xbox 360 Publisher License Agreement between Microsoft and Publisher
dated                  , 200    (the “Xbox 360 PLA”) and to be bound by the
terms and conditions of this Publisher Affiliate Agreement.  Capitalized terms
used herein and not otherwise defined will have the same meaning as in the
Agreement.

 

Publisher Affiliate acknowledges that its agreement herein is a condition for
Publisher Affiliate to exercise the rights and perform the obligations
established by the terms of the Xbox 360 PLA.  Publisher Affiliate and Publisher
will be jointly and severally liable to Microsoft for all obligations related to
Publisher Affiliate’s exercise of the rights, performance of obligations, or
receipt of Confidential Information under the Xbox 360 PLA.  This Publisher
Affiliate Agreement may be terminated in the manner set forth in the Xbox 360
PLA.  Termination of this Publisher Affiliate Agreement does not terminate the
Xbox 360 PLA with respect to Publisher or any other Publisher Affiliates.

 

IN WITNESS WHEREOF, Publisher Affiliate has executed this agreement as of the
date set forth below.  All signed copies of this Publisher Affiliate Agreement
will be deemed originals.

 

 

 

 

Signature

 

 

 

Title

 

 

 

Name (Print)

 

 

 

Date

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1

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EXHIBIT 5

 

NON-DISCLOSURE AGREEMENT

 

[Attached]

 

1

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EXHIBIT 6

 

JAPAN AND ASIA ROYALTY INCENTIVE PROGRAM

 

1.                                      Overview

 

To encourage Publisher to release localized Software Titles in the Japan and
Asian Sales Territories during [*] Publisher may qualify for a special incentive
payment equal to [*] according to the terms of this Exhibit 6 (the “Royalty
Incentive Program”).

 

2.                                      Qualified FPUs

 

In order to qualify for the Royalty Incentive Program, the following
requirements must be met.

 

a.                                       Approved Concept Submission Form.
Publisher must send Microsoft a completed Concept submission form (in a format
to be provided by Microsoft) for any Software Titles Publisher intends to
qualify for the Royalty Incentive Program no later than [*]  In order for FPUs
to qualify for the Royalty Incentive Program, Publisher’s Concept for the
Software Title must be received on time and approved by Microsoft.

 

b.                                      J-signed. Only FPUs that are “J-signed”
(as defined in the Xbox 360 Publisher Guide) to technically restrict their
operation to Xbox consoles made for the Japan and Asian Sales Territories will
qualify for the Royalty Incentive Program.

 

c.                                       [*]

 

d.                                      [*]

 

e.                                       Public Relations. In order to qualify
for the Royalty Incentive Program, Publisher must allow Microsoft to publicly
disclose that the Software Title will be released on Xbox 360 in the Japan or
Asian Sales Territories.

 

f.                                         Timely Payment. Publisher must pay
royalty fees on time in accordance with this Agreement or its credit arrangement
with Microsoft in order to qualify for the Royalty Incentive Program.

 

3.                                      Payment

 

a.                                       Manufacturing Periods. The Royalty
Incentive Program will only apply to qualified FPUs manufactured [*] (as
applicable for the FPU).

 

b.                                      Incentive Payments. Microsoft will make
royalty incentive payments within [*] in which qualified FPUs were manufactured.

 

c.                                       Limit. Subject to the terms of this
Exhibit 6, Publisher’s royalty incentive payment will equal [*] Publisher
acknowledges that the Royalty Incentive Payment will only apply to [*]

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1

--------------------------------------------------------------------------------

 

EXHIBIT 7

 

XBOX 360 LIVE INCENTIVE PROGRAM

 

1.                                      Xbox 360 Live Incentive Program

 

To encourage Publisher to support functionality for Xbox Live in its Xbox 360
Software Titles and to drive increased usage of Xbox Live via Xbox 360,
Publisher may qualify for certain payments based on the amount of Xbox Live
Market Share (defined in Section 2.a. of this Exhibit 7 below) created by
Publisher’s Multiplayer Software Titles (defined in Section 2.c. of this Exhibit
7 below). Each Accounting Period (defined in Section 3.c. of this exhibit
below), Microsoft will calculate Publisher’s Xbox Live Market Share. If it is
above [*] then Microsoft will pay Publisher an amount [*] The basic equation for
calculating the Publisher’s payment under this program is:

 

[*]

 

The following sections define the elements of this basic equation.

 

Notwithstanding anything herein to the contrary, use of or revenue derived from
online games for which an end user pays a subscription separate from any account
established for basic use of Xbox Live, are excluded from this Xbox 360 Live
Incentive Program.

 

2.                                      Xbox Live Market Share

 

a.                                       “Xbox Live Market Share” = [*]

 

b.                                      “[*] Unique User Market Share” means [*]

 

c.                                       “Multiplayer Software Titles” means a
Software Title for Xbox 360 that supports real-time multiplayer game play.

 

d.                                      “[*] Unique Users” means [*]

 

e.                                       “Paying Subscriber” [*]

 

f.                                         “[*] Unique User Market Share” means
[*]

 

g.                                      “[*] Unique Users” means [*]

 

h.                                      “New Subscriber Market Share” means [*]

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

1

--------------------------------------------------------------------------------

 

i.                                          “New Subscriber” means a Paying
Subscriber who pays for an Xbox Live account for the first time. A New
Subscriber is attributed to the first Multiplayer Software Title he or she
plays, even if such play was during a free-trial period which was later
converted into a paying subscription. Each Paying Subscriber can only be counted
as a New Subscriber once.

 

3.                                      Participation Pool

 

a.                                       “Participation Pool” means [*]

 

b.                                      “Subscription Revenue” means [*]

 

c.                                       “Accounting Period” means [*] within
the Term (defined below); provided that if the Effective Date of this Agreement
or the expiration date of this program falls within such [*] then the applicable
payment calculation set forth below shall be made for a partial Accounting
Period, as appropriate.

 

4.                                      Example

 

[*]

•                                          [*]

•                                          [*]

•                                          [*]

 

[*]

 

•           [*]

•           [*]

•           [*]

 

[*]

 

[*]

 

•                                          [*]

•                                          [*]

•                                          [*]

•                                          [*]

 

[*]

 

5.                                      Term

 

This Xbox 360 Live Incentive Program will be available for [*] Microsoft
reserves the right to change the weights for averaging set forth in Section 2.a.
of this exhibit upon written notice to Publisher, but no more frequently than
[*]

 

6.                                      Payments

 

In the event Publisher qualifies for a payment under this program during an
Accounting Period, Microsoft shall furnish Publisher with a statement, together
with payment for any amount shown thereby to be due to Publisher within [*]

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

2

--------------------------------------------------------------------------------

 

EXHIBIT B

 

MICROSOFT CORPORATION NON-DISCLOSURE AGREEMENT (STANDARD – RECIPROCAL)

 

COMPANY: Activision Publishing, Inc.

MICROSOFT CORPORATION

Address:  3100 Ocean Park Blvd.

One Microsoft Way

Santa Monica, CA 90405

Redmond, WA 98052-6399

 

 

Sign:

/s/ Greg Deutsch

 

Sign:

[ILLEGIBLE]

 

 

 

Print Name:

Greg Deutsch

 

Print Name:

[ILLEGIBLE]

 

 

 

Print Title:

Director, Business & Legal Affairs

 

Print Title:

Director

 

 

 

Signature Date:

2-18-2004

 

Signature Date:

2-24-04

 

 

1              Definition of Confidential Information and Exclusions

 

(a)                                  “Confidential Information” means nonpublic
information that a party to this Agreement (“Disclosing Party”) designates as
being confidential to the party that receives such information (“Receiving
Party”) or which, under the circumstances surrounding disclosure ought to be
treated as confidential by the Receiving Party. “Confidential Information”
includes, without limitation, information in tangible or intangible form
relating to and/or including released or unreleased Disclosing Party software or
hardware products, the marketing or promotion of any Disclosing Party product,
Disclosing Party’s business policies or practices, and information received from
others that Disclosing Party is obligated totreat as confidential. Except as
otherwise indicated in this Agreement, the term “Disclosing Party” also includes
all Affiliates of the Disclosing Party and, except as otherwise indicated, the
term “Receiving Party” also includes all Affiliates of the Receiving Party. An
“Affiliate” means any person, partnership, joint venture, corporation or other
form of enterprise, domestic or foreign, including but not limited to
subsidiaries, that directly or indirectly, control, are controlled by, or are
under common control with a party. Prior to the time that any Confidential
Information is shared with an Affiliate who has not signed this Agreement, the
Receiving Party that executed this Agreement (the “Signatory Receiving Party”)
shall have entered into an appropriate written agreement with that Affiliate
sufficient to enable the Disclosing Party and/or the Signatory Receiving Party
to enforce all of the provisions of this Agreement against such Affiliate.

 

(b)                                 Confidential Information shall not include
any information, however designated, that: (i) is or subsequently becomes
publicly available without Receiving Party’s breach of any obligation owed
Disclosing Party; (ii) became known to Receiving Party prior to Disclosing
Party’s disclosure of such information to Receiving Party pursuant to the terms
of this Agreement; (iii) became known to ReceivingParty from a source other than
Disclosing Party other than by the breach of an obligation of confidentiality
owed to Disclosing Party; (iv) is independently developed by Receiving Party; or
(v) constitutes Feedback (as defined in Section 5 of this Agreement).

 

2.                                       Obligations Regarding Confidential
Information

 

(a)                                            Receiving Party shall:

 

(i)                                     Refrain from disclosing any Confidential
Information of the Disclosing Party to third parties for [*] following the date
that Disclosing Party first discloses such

 

--------------------------------------------------------------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

11

--------------------------------------------------------------------------------

 

Confidential Information to Receiving Party, except as expressly provided in
Sections 2(b) and 2(c) of this Agreement;

(ii)           Take reasonable security precautions, at least as great as the
precautions it takes to protect its own confidential information, but no less
than reasonable care, to keep confidential the Confidential Information of the
Disclosing Party;

(iii)          Refrain from disclosing, reproducing, summarizing and/or
distributing Confidentiallnformation of the Disclosing Party except in pursuance
of Receiving Party’s business relationship with Disclosing Party, and only as
otherwise provided hereunder; and

(iv)          Refrain from reverse engineering, decompiling or disassembling any
software code and/or pre-release hardware devices disclosed by Disclosing Party
to Receiving Party under the terms of this Agreement, except as expressly
permitted by applicable law.

 

(b)                                 Receiving Party may disclose Confidential
lnformation of Disclosing Party in accordance with a judicial or other
governmental order, provided that Receiving Party either (i) gives the
Disclosing Party reasonable notice prior to such disclosure to allow Disclosing
Party a reasonable opportunity to seek a protective order or equivalent, or (ii)
obtains written assurance from the applicable judicial or governmental entity
that it will afford the Confidential lnformation the highest level of protection
afforded under applicable law or regulation. Notwithstanding the foregoing, the
Receiving Party shall not discloseany computer source code that contains
Confidential Information of the Disclosing Party in accordance with a judicial
or other governmental order unless it complies with the requirement set forth in
sub-section (i) of this Section 2(b).

 

(c)                                  The Receiving Party may disclose
Confidential Information only to Receiving Party’s employees and consultants on
a need-to-know basis. The Receiving Party will have executed or shall execute
appropriate written agreements with its employees and consultants sufficient to
enable ReceivingParty to enforce all the provisions of this Agreement.

 

(d)                                 Receiving Party shall notify the Disclosing
Party immediately upon discovery of any unauthorized use or disclosure of
Confidential Information or any other breach of this Agreement by Receiving
Party and its employees and consultants, and will cooperate with Disclosing
Party in every reasonable way to help Disclosing Party regain possession of the
Confidential lnformation and prevent its further unauthorized use or disclosure.

 

(e)                                  Receiving Party shall, at Disclosing
Party’s request, return all originals, copies, reproductions and summaries of
Confidential lnformation and all other tangible materials and devicesprovided to
the Receiving Party as Confidential Information, or at Disclosing Party’s
option, certify destruction of the same.

 

3.                                       Remedies. The parties acknowledge that
monetary damages may not be a sufficient remedy for unauthorized disclosure of
Confidential Information and that Disclosing Party shall be entitled,
withoutwaiving any other rights or remedies, to such injunctive or equitable
relief as may be deemed proper by a court of competent jurisdiction.

 

4.                                       Miscellaneous

 

(a)                                  All Confidential lnformation is and shall
remain the property of Disclosing Party. By disclosing Confidential Information
to Receiving Party, Disclosing Party does not grant any express or implied right
to Receiving Party to or under any patents, copyrights, trademarks, or trade
secret information except as otherwise provided herein. Disclosing Party
reserves without prejudice the ability to protect its rights under any such
patents, copyrights, trademarks, or trade secrets except as otherwise provided
herein.

 

(b)                                 In the event that the Disclosing Party
provides any computer software and/or hardware to the Receiving Party as
Confidential Information under the terms of this Agreement, such computer
software and/or hardware may only be used by the Receiving Party for evaluation
and providing Feedback (as defined in Section 5 of this Agreement) to the
Disclosing Party. Unless otherwise agreed by the

 

12

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Disclosing Party and the Receiving Party, all such computer software and/or
hardware is provided “AS IS” without warranty of any kind, and Receiving Party
agrees that neither Disclosing Party nor its suppliers shall be liable for any
damages whatsoever arising from or relating to Receiving Party’s use of or
inability to use such software and/or hardware.

 

(c)                                  The parties agree to comply with all
applicable international and national laws that apply to (i) any Confidential
Information, or (ii) any product (or any part thereof), process or service that
is the direct product of the Confidential Information, including the U.S. Export
Administration Regulations, as well as end-user, end-use and destination
restrictions issued by U.S. and other governments. For additional information on
exporting Microsoft products, see http://www.microsoft.com/exporting/.

 

(d)                                 The terms of confidentiality under this
Agreement shall not be construed to limit either the Disclosing Party or the
Receiving Party’s right to independently develop or acquire products without use
of the other party’s Confidential Information. Further, the Receiving Party
shall be free to use for any purpose the residuals resulting from access to or
work with the Confidential Information of the DisclosingParty, provided that the
Receiving Party shall not disclose the Confidential Information except as
expressly permitted pursuant to the terms of this Agreement. The term
“residuals” means information in intangible form, which is retained in memory by
persons who have had access to the Confidential Information, including ideas,
concepts, know-how or techniques contained therein. The Receiving Party shall
not have any obligation to limit or restrict the assignment of such persons or
to pay royalties for any work resulting from the use of residuals. However, this
sub-paragraph shall not be deemed to grant to the Receiving Party a license
under the Disclosing Party’s copyrights or patents.

 

(e)                                  None of the provisions of this Agreement
shall be deemed to have been waived by any act or acquiescence on the part of
Disclosing Party, the Receiving Party, their agents, or employees, but only by
an instrument in writing signed by an authorized employee of Disclosing Party
and the Receiving Party. No waiver of any provision of this Agreement shall
constitute a waiver of any other provision(s) or of the same provision on
another occasion.

 

(f)                                    If either Disclosing Party or the
Receiving Party employs attorneys to enforce any rights arising out of or
relating to this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys’ fees and costs. This Agreement shall be construed and
controlled by the laws of the State of Washington, and the parties further
consent to exclusive jurisdiction and venue in the federal courts sitting in
King County, Washington, unless no federal subject matter jurisdiction exists,
in which case the partiesconsent to the exclusive jurisdiction and venue in the
Superior Court of King County, Washington. Company waives all defenses of lack
of personal jurisdiction and forum non conveniens. Process may be served on
either party in the manner authorized by applicable law or court rule.

 

(g)                                 This Agreement shall be binding upon and
inure to the benefit of each party’s respective successors and lawful assigns;
provided, however, that neither party may assign this Agreement (whether by
operation of law, sale of securities or assets, merger or otherwise), in whole
or in part, without the prior written approval of the other party. Any attempted
assignment in violation of this Section shall be void.

 

(h)                                 If any provision of this Agreement shall be
held by a court of competent jurisdiction to be illegal, invalid or
unenforceable, the remaining provisions shall remain in full force and effect.

 

(i)                                     This Agreement shall expire on the
Expiration Date set forth above, provided that either party may terminate this
Agreement with or without cause upon thirty (30) days prior written notice to
the other party sent to the address listed above (and if to Microsoft, with a cc
to “Law & Corporate Affairs, attn. NDA, LCA Records”). All sections of this
Agreement relating to the rights and obligations of the parties concerning
Confidential Information disclosed during the term of the Agreement shall
survive any such expiration or termination.

 

13

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(j)                                     This copy of this Agreement may not be
altered except to complete any blanks in the signature blocks above (e.g.,
signature date), and any other modifications, additions, or other alterations
are void and not part of this Agreement. This Agreement shall not be modified
except by a written agreement dated subsequent to the date of this Agreement and
signed by both parties.

 

(k)                                  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof, and
supersedes all prior and contemporaneous non-disclosure agreements or
communications, but only with respect to the Limited Purpose set forth above. It
shall not be modifiedexcept by a written agreement that explicitly references
the Limited Purpose, is dated subsequent to the date of this Agreement, and is
signed on behalf of the parties by their respective duly authorized
representatives.

 

5.                                       Suggestions and Feedback. The Receiving
Party may from time to time provide suggestions, comments or other feedback
(“Feedback”) to the Disclosing Party with respect to Confidential
Informationprovided originally by the Disclosing Party. Both parties agree that
all Feedback is and shall be given entirely voluntarily. Feedback, even if
designated as confidential by the party offering the Feedback, shall not, absent
a separate written agreement, create any confidentiality obligation for the
receiver of theFeedback. Receiving Party will not give Feedback that is subject
to license terms that seek to require any Disclosing Party product, technology,
service or documentation incorporating or derived from such Feedback, or any
Disclosing Party intellectual property, to be licensed or otherwise shared with
any thirdparty. Furthermore, except as otherwise provided herein or in a
separate subsequent written agreement between the parties, the receiver of the
Feedback shall be free to use, disclose, reproduce, license or otherwise
distribute, and exploit the Feedback provided to it as it sees fit, entirely
without obligation or restriction of any kind on account of intellectual
property rights or otherwise.

 

14

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