Exhibit 10.3

 

XXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT
WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE RULES APPLICABLE TO SUCH
CONFIDENTIAL TREATMENT REQUEST.

 

CONTRACT NO. 149237

 

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 Take-Two Interactive Software, 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.

 

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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.

 

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 availability via
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 its accompanying 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.

 

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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.

 

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.

 

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2.31 “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 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

 

 

4.1.1 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 to Microsoft for evaluation
at all four phases. Each phase is identified belowand 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. Microsoft
shall not unreasonably withhold or delay its testing and/or approval under any
of the four approval stages.

 

4.1.2 Concept. For each Software Title, Publisher shall deliver to Microsoft a
completed Concept submission 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.

 

4.1.3 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 technical screen and/or other testing of the Software Title or
Online Content consistent with the Xbox 360 Publisher Guide and will
subsequently provide Publisher with advisory feedback regarding such testing.

 

4.1.4 Certification. Following Pre-Certification, Publisher shall deliver to
Microsoft the proposed final release 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,
subject to Section 5 below.

 

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4.1.5 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 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 European Sales Territory (a “European FPU”), Publisher
may choose to forego Concept approval (Section 4.1.1), Pre-Certification
(Section 4.1.3) and/or Marketing Materials approval (Section 4.1.5) and submit
such Software Title to Microsoft only for Certification 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 the
European 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 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 opportunity to
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 accept submission of a Software Title for
Certification approval unless and until Publisher has obtained, at Publisher’s
sole cost, a rating not higher than “Mature (17+)” or its equivalent from the
appropriate rating bodies and/or any and all other independent 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 360 platform. 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 keep written or electronic records of such testing
during the term of this Agreement and for no less than XXXX thereafter (“Test
Records”). Upon Microsoft’s request, Publisher shall provide Microsoft with
copies of, or reasonable access to inspect, the Test Records, FPUs and Software
Title (either in pre-Commercial Release or Commercial Release versions, as
Microsoft may request).

 

5

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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 the
Software 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 release one 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 requires a Title Update, (c) if
Certification is revoked for Online Content, or (d) for any other reason at
Microsoft’s reasonable 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 (which such first free Title
Update shall be in addition to, and not in lieu of, the Title Update that may be
released free of charge as per Section 4.7.1); provided that Microsoft will
never charge Publisher for the Certification, hosting and distribution of Title
Updates to Xbox Live Users for any Title Update required by Microsoft pursuant
to clause (d) of the preceding sentence. 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, unless otherwise provided in this Section 5. 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, or updated, unless otherwise provided in this Section 5.
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 360
Publisher Guide as supplemented, revised or updated, unless otherwise provided
in this Section 5. 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. Anything contained herein to the contrary
notwithstanding, 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 (a) 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 (b) solely with respect to Software Titles that have
passed Pre-Certification but not Certification, 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 only if Microsoft agrees to pay for Publisher’s direct,
out-of-pocket expenses necessarily 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 and
subject to the provisions of Section 5 above, all Software Titles must remain in
compliance with all Certification requirements and requirements set forth in the
Xbox 360 Publisher Guide on a continuing 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
such material 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.

 

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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 XXXX following the respective
Commercial Release of the FPUs of the Software Title in each Sales Territory in
which Xbox Live is available (the “Minimum Commitment”). Publisher is obligated
to provide all necessary support for such Online Game Feature during its
availability and for XXXX after discontinuation . Following the Minimum
Commitment period, Publisher may terminate Microsoft’s license associated with
such Online Game Feature upon XXXX prior written notice to Microsoft; and/or
Microsoft may discontinue the availability of any or all such Online Game
Feature via Xbox Live upon XXXX 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 XXXX 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 XXXX thereafter.

 

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 or 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 by Microsoft
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 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 the manufacture
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
prior written approval of Publisher (which approval shall not be unreasonably
withheld), Microsoft has the right to have include in the packaging of FPUs
promotional materials 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 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 of each 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 Authorized
Replicator 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.

 

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7.4 Samples. For each Software Title sku, at Publisher’s cost, Publisher shall
provide Microsoft with XXXX FPUs and accompanying Marketing Materials per Sales
Territory in which the FPU will be released. Such units may be used in
marketing, 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 XXXX 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 XXXX which will be
effective starting the following XXXX. Currently, the MOQs are as follows:

 

 

XXXX

XXXX

XXXX

XXXX

XXXX

XXXX

XXXX

XXXX

XXXX

XXXX

XXXX

XXXX

XXXX

XXXX

 

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 MOQs per 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 XXXX . 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 XXXX , which would cover the XXXX MOQ per Software Title and
the XXXX MOQ per Disc (rather than XXXX 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 XXXX 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.

 

7.6 Manufacturing Reports. Subject to any limitations and/or restrictions
imposed by applicable law (including, without limitation, federal and state
securities laws), for purposes of assisting in the scheduling of manufacturing
resources, on a XXXX basis, or as otherwise requested by Microsoft in its
reasonable discretion, Publisher shall use its commercially reasonable efforts
to provide Microsoft with forecasts showing manufacturing projections by Sales
Territory XXXX out for each Software Title. Publisher will use commercially
reasonable efforts to cause the Authorized Replicator to deliver to Microsoft
true and accurate XXXX statements of FPUs manufactured in each XXXX, on a
Software Title-by-Software Title basis and in sufficient detail to satisfy
Microsoft, XXXX.

 

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 Authorized Replicator,
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 with Packaging
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.

 

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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 obtain Microsoft’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 XXXX 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 Demo Version. XXXX If Publishers wishes to distribute a
Demo Versions in an online downloadable format, such downloadable Demo Version
shall be distributed via 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 contact information (including without
limitation Publisher’s address and telephone number, and the applicable
individual/group responsible 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.

 

9.2 Warranty. Publisher shall provide the original end user of any FPU a minimum
warranty in accordance with local laws and industry practices. For example, in
the United States, Publisher shall, as of the Effective Date, provide a minimum
XXXX limited warranty that the FPU will perform in accordance with its user
documentation or Publisher will 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 defect in a Software Title and/or any FPUs,
which defect in the reasonable judgment of Microsoft would significantly impair
the ability of an end user to play such Software Title or FPU or would
materially and adversely affect the gameplay of the Xbox 360 or Xbox Live,
Microsoft may require Publisher to undertake prompt repair or replacement of
such Software Title and/or FPUs and, if Publisher is not able to repair or
replace such defective Software Title and/or FPU within a reasonable time after
exercising its best efforts to do the same, then Microsoft may require Publisher
to recall such defective Software and/or FPU.

 

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.

 

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9.5 Software Title License. Publisher grants Microsoft a fully-paid,
royalty-free, worldwide, non-exclusive license (in each case subject to
Publisher’s prior written approval) (i) to publicly perform the Software 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 Software Title trailers via xbox.com. Publisher may also select
Online Content for inclusion in public interactive displays and/or compilation
demo discs published by Microsoft (subject to Publisher’s prior written
approval), 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 distribute and permit end users to download and store (and, at
Publisher’s discretion, to make further copies) such Online Content via public
interactive displays, The rights granted in the preceding sentence are in
addition to any rights that Microsoft may have for uses of Publisher Software
Titles under the applicable law, such as uses that are “referential,” “fair use”
or “reasonable use.”

 

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 this
Agreement, Microsoft grants Publisher a non-exclusive, non-transferable, license
to market, sell and distribute FPUs containing Redistributable and Sample Code
(as defined in the XDK License) and Security Technology (as defined above)
within the Sales Territoriesapproved in the Software Title’s Conceptin 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 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 Features. In consideration of the royalty payments as described in
Exhibit 1, Publisher grants to Microsoft (i) a worldwide, transferable,
sublicensable license to broadcast, transmit, distribute, host, publicly
display, reproduce, and license Online Content for use on Xbox 360s, and (ii) a
worldwide, transferable license solely to distribute to end users and permit 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.

 

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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 shall refrain 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 all rights 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”), so long
as:

 

10.7.1 Publisher provides written notice to Microsoft, at least XXXX 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 Software Title(s) for which Sub-Publisher has acquired publishing rights,
(iv) the geographic territory(ies) for which such rights were granted, 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. 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 reasonable
efforts to periodically make certain Xbox Live User Data and Personal Data
available to Publisher; provided that Publisher’s use 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.

 

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12.

Trademark Rights and Restrictions

 

 

12.1 Licensed Trademarks License. In each Software Title, FPU, Online Content
and on all Marketing Materials, Publisher shall incorporate the Licensed
Trademarks and include credit and acknowledgement to Microsoft as set forth in
the Xbox 360 Publisher Guide in effect at the time of Certification of such
Software Title, FPU or Online Content or approval of such Marketing Materials.
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 the Licensed 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, subject to the provisions of Section 5 hereof. 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 in
writing. 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 the
Licensed 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 registration of
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 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.

 

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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 the other
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’s
required 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 Intellectual 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 the Software 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’ fees and
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 does not and will not infringe upon or misappropriate any
third party trade secrets, copyrights, trademarks, patents, publicity, privacy
or other proprietary rights.

 

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 required and 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.

 

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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
Publisher herein.

 

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, ITSAFFILIATES, LICENSORS OR ITSSUPPLIERS 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 XXXX. 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’s allegations to be true,
would result in a breach by the indemnifying party of any of its
representations, warranties or covenants 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 regarding any Software Title or FPU including
without limitation any claim relating to quality, performance, safety thereof,
or arising out of Publisher’s use of the Licensed Trademarks in breach of this
Agreement.

 

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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 indemnifying party defend such Claim. The indemnified
party may participate in the defense of any Claim at its own expense. The
indemnifying party will not be responsible for any settlement made by the
indemnified party without the indemnifying party’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 obtaining the indemnifying
party’s written permission.

 

16.4   Insurance. Prior to distribution of any Software Title, Publisher 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 XXXX 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 three (3) years after such date that the Xbox 360 is first
commercially released by Microsoft in the United States. Unless one party gives
the other notice of non-renewal within XXXX of the end of the then-current term,
this Agreement shall automatically renew for successive one-year terms.

 

17.2   Termination for Breach. If either party materially fails to perform or
comply with this Agreement or any provision thereof, and fails to remedy the
default within XXXX 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 XXXX 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 XXXX 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 its entirety or with respect to the applicable Software Title or
the particular Online Content. If Microsoft reasonably determines, at any time
prior to the Commercial Release of a Software Title or Online Content, that such
Software Title or Online Content does not materially comply with the
requirements set forth in the applicable Xbox 360 Publisher Guide then in effect
or to any applicable laws, then Microsoft has the right, in Microsoft’s sole
discretion and notwithstanding any prior approvals given by Microsoft, to
terminate this Agreement without cost or penalty, as a whole or on a Software
Title by Software Title, or Sales Territory by Sales Territory basis upon
written notice to Publisher with respect to such Software Title or Sales
Territory.

 

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 XXXX , to
sell-off its inventory of FPUs existing as of the date of termination or
expiration, 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 XXXX
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 Commitment term.

 

15

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17.4   Cross-Default. If Microsoft has the right to terminate this Agreement,
then Microsoft may, at its sole discretion 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 1, 9.1, 9.2, 9.3, 10.3, 10.4, 11,
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 XXXX after they are deposited in the
applicable country’s mail system XXXX, postage prepaid, certified or registered,
return receipt requested; or XXXX sent by overnight courier, charges prepaid,
with a confirming fax; and addressed as follows:

 

Publisher:

Take-Two Interactive Software, Inc.

622 Broadway, 6th Floor

New York, NY 10012

Attention: Paul Eibeler, President and CEO

Fax:     (646) 536-2928

Phone: (646) 536 3010

Email: paul.eibeler@take2games.com

Microsoft:

MICROSOFT LICENSING,GP

6100 Neil Road, Suite 100

Reno, NV 89511-1137

Attention: Xbox Accounting Services, with a cc to:

MICROSOFT CORPORATION

One Microsoft Way

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 or remedy available to it under this Agreement,
and no course of dealing or performance with respect thereto, will constitute a
waiver of any such right or remedy with respect to any other breach or failure
by the other party. The express waiver by a 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 unless Microsoft 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.

 

16

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18.5   No Partnership. Microsoft and Publisher are entering into a license
pursuant to this Agreement and nothing 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 judicial decree 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 Licensed Trademarks 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 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

 

TAKE-TWO INTERACTIVE SOFTWARE, INC.

 

 

 

/s/ Roxanne V. Spring

 

/s/ Paul Eibeler

 

 

 

By (sign)

 

By (sign)

 

 

 

Roxanne V. Spring

 

Paul Eibeler

 

 

 

Name (Print)

 

Name (Print)

 

 

 

SPM

 

President and CEO

 

 

 

Title

 

Title

 

 

 

November 17, 2005

 

November 11, 2005

 

 

 

Date

 

Date

 

17

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

 

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 from Table 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 XXXX . According to Table 1, XXXX royalty rates will apply to that
Software Title and the royalty rate is determined in Table 2 by the
Manufacturing Region. If the Software Title were manufactured in the European
Manufacturing Region, the royalty fee would be XXXX per FPU. If the Software
Title were manufactured in Asian Manufacturing Region, the royalty fee would be
XXXX per FPU.

 

XXXX

 

c. Setting the Royalty. Publisher shall submit to Microsoft, at least XXXX 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 XXXX , 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 Software Title 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.

 

XXXX

 

 

i.

For North American Sales Territory:

 

 

 

 

 

XXXX

 

 

 

 

ii.

For Japan Sales Territory:

 

 

 

 

 

XXXX

 

2.

Payment Process

 

 

a. XXXX. Publisher shall not authorize its Authorized Replicators to begin
production until such time as XXXX . 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 XXXX 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.

 

1

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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:

Take-Two Interactive Software, Inc.

Name:

 

Address:

622 Broadway

Address:

 

 

New York, NY 10012

 

 

 

 

 

 

 

 

 

Attention:

Attention:

 

Email address:

Email address:

 

Fax:

Fax:

 

Phone:

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 XXXX FPUs of a Software Title for
the Japan Sales Territory and simships XXXX of those units to the Simship
Territory, the royalty fee for all of the FPUs is determined by XXXX . In this
example, Publisher would also receive a XXXX Unit Discount on XXXX 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 XXXX prior
to manufacturing any FPUs it intends to qualify for the program. In its notice,
Publisher shall provide all relevant information, including total number of FPUs
to be manufactured, number of FPUs to be simshipped into the Simship 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, subject to
Section 5 of the Agreement.

 

XXXX

 

5.

Online Content

 

 

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

 

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

 

c. XXXX

 

d. XXXX

 

2

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e. Within XXXX after the end of XXXX 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. XXXX

 

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 the transactions contemplated under this Agreement including,
without limitation, (i) any state or local sales or use taxes or any value added
tax or business transfer tax now or hereafter imposed on the provision of any
services to the other party under this Agreement, (ii) taxes imposed or based on
or with respect to or measured by any net or gross income or receipts of either
party, (iii) any franchise taxes, taxes on doing business, gross receipts taxes
or capital stock taxes (including any minimum taxes and taxes measured by any
item of tax preference), (iv) any taxes imposed or assessed after the date upon
which this Agreement is terminated, (v) taxes based upon or imposed with
reference to either parties’ real and/or personal property ownership 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 Amendment.

 

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. If 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
XXXX 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.

 

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.

 

3

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8.

Audit

 

 

During the term of this Agreement and for XXXX thereafter 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 XXXX in any XXXX 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 XXXX . 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 XXXX . If
Material discrepancies are disclosed, the Audited Party agrees to pay the
Auditing Party XXXX.

 

4

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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 AT LEAST XXXX. IF THIS FORM IS NOT
SUBMITTED ON TIME, THE ROYALTY RATE WILL DEFAULT TO XXXX 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): XXXX

 

 

 

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)

 

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 XXXX

 

This Xbox 360 Publisher License Enrollment (“Enrollment”) is entered into
between Microsoft Ireland Operations Ltd. (“MIOL”) and Take-Two Interactive
Software Europe 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 Take-Two Interactive
Software, 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 XXXX after they are deposited in the
applicable country’s mail system XXXX if sent internationally), postage prepaid,
certified or registered, return receipt requested; or (ii) XXXX after they are
sent by overnight courier, charges prepaid, with a confirming fax; and addressed
as follows:

 

Publisher: Take-Two Interactive Software Europe Ltd.

Microsoft:

MICROSOFT IRELAND OPERATIONS LTD.

Address: Saxon House, 2-4 Victoria Street

 

Microsoft European Operations Centre,

 

 

 

Windsor, Berkshire, Sl4 1EN, UK

 

Atrium Building Block B,

 

 

 

Attention: Simon Little

 

Carmenhall Road,

Fax:

+44 1753 496669

 

 

Phone:

+44 1753 496600

 

Sandyford Industrial Estate

 

 

 

 

 

Dublin 18

 

 

 

 

 

Ireland

 

 

 

Email:

slittle@take2europe.com

 

Fax: 353 1 706 4110

 

 

 

 

Attention:

MIOL Xbox Accounting Services

 

 

 

 

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]

 

1

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

 

Name:

 

Take-Two Interactive Software Europe Ltd

Address:

 

Saxon House, 2-4 Victoria Street

 

 

Windsor, Berkshire, Sl4 1EN, UK

 

 

 

VAT number:

 

GB578 51 51 11

 

 

 

Attention:

 

Simon Little

 

 

 

Email address:

 

slittle@take2europe.com

 

 

 

Fax:

 

+44 1753 496669

 

 

 

Phone:

 

+44 1753 496600

 

MICROSOFT IRELAND OPERATIONS LTD.

PUBLISHER:Take-Two Interactive Software Europe Ltd.

 

 

 

 

By (sign)

By (sign)

 

 

 

 

Name (Print)

Name (Print)

 

 

 

 

Title

Title

 

 

 

 

Date (Print mm/dd/yy)

Date (Print mm/dd/yy)

 

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EXHIBIT 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 XXXX 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

 

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EXHIBIT 5

MICROSOFT CORPORATION NON-DISCLOSURE AGREEMENT
(STANDARD RECIPROCAL)

 

This Non-Disclosure Agreement (the “Agreement”) is made and entered into as of
the later of the two signature dates below by and between MICROSOFT CORPORATION,
a Washington corporation (“Microsoft”), and Take Two, a New York corporation
(“Company”).

 

IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS CONTAINED IN THIS
AGREEMENT AND THE MUTUAL DISCLOSURE OF CONFIDENTIAL INFORMATION, THE PARTIES
HERETO AGREE AS FOLLOWS:

 

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 to treat 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 below (the “Undersigned Receiving Party”) shall have entered into
an appropriate written agreement with that Affiliate sufficient to enable the
Disclosing Party and/or the Undersigned 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 Receiving Party 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 five (5) years following the date that Disclosing Party first
discloses such 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
Confidential Information 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 Information of Disclosing Party in
accordance with a judicial or other governmental order, provided that Receiving
Party either (i) gives the undersigned 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
Information the highest level of protection afforded under applicable law or
regulation. Notwithstanding the foregoing, the Receiving Party shall not
disclose any 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).

 

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

 

(d) Receiving Party shall notify the undersigned 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 Information 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 Information and all other
tangible materials and devices provided 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, without waiving 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 Information 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
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 Disclosing Party, 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.

 

2

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(e) This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof. It shall not be modified except by a
written agreement dated subsequent to the date of this Agreement and signed by
both parties. 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 parties consent 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) Either party may terminate this Agreement with or without cause upon ninety
(90) days prior written notice to the other party. 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 termination.

 

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
Information provided 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 the Feedback. 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 third party. 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.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

 

COMPANY: TAKE-TWO INTERACTIVE SOFTWARE, INC.

 

MICROSOFT CORPORATION

 

 

 

Address: 622 Broadway
New York, NY 10012

 

One Microsoft Way
Redmond, WA 98052-6399

 

 

 

By:

/s/ Ken Selterman

 

By:

/s/ Dean Lester

Name: Ken Selterman

 

Name: Dean Lester

Title: General Counsel

 

Title: General Manager

 

 

Windows Graphics/Gaming/Workstation

Date: 06/19/03

 

Date: 06/24/03

 

3

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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 XXXX , Publisher may qualify for a special
incentive payment equal to XXXX 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 XXXX. 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. XXXX

 

d. XXXX

 

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 XXXX (as applicable for the FPU).

 

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

 

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

 

1

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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 XXXX , then Microsoft will pay Publisher an amount XXXX The basic
equation for calculating the Publisher’s payment under this program is:

 

XXXX

 

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” = XXXX

 

b. “XXXXUnique User Market Share” means XXXX

 

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

 

d. “XXXXUnique Users” means XXXX

 

e. “Paying Subscriber” means XXXX

 

f. “XXXXUnique User Market Share” means XXXX

 

g. “XXXXUnique Users” means the XXXX

 

h. “New Subscriber Market Share” means XXXX

 

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 XXXX

 

b. “Subscription Revenue” means XXXX

 

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

 

4.

Example

 

 

XXXX

 

1

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5.

Term

 

 

This Xbox 360 Live Incentive Program will be available for XXXX . 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
XXXX .

 

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 XXXX.

 

2

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