Term, this Agreement shall automatically renew for a
single renewal term of one (1) year. The period of time since the Effective Date
of the PLA through the Current Term and any extensions or renewals thereto shall
constitute the "Term" as referred to in the PLA and this Amendment.
3
New Royalty Tier 1.5
3.1
THE ROYALTY RATE TABLES AND PROVISIONS IN
SECTIONS 7.1.4 AND 7.1.5 (OR SECTIONS 6.1.4 AND 6.1.5) OF THE PLA DESCRIBING HOW
ROYALTY RATES ARE CALCULATED ARE HEREBY REPLACED BY THE PROVISIONS OF THIS
AMENDMENT. NOTWITHSTANDING THE FOREGOING, THE NEW TIER 1.5 DESCRIBED BELOW WILL
ONLY BE AVAILABLE TO PUBLISHER AFTER OCTOBER 1, 2005,
3.2
ROYALTY FEE
3.2.1
FOR [***] FPU MANUFACTURED DURING THE TERM OF THE
PLA, PUBLISHER SHALL PAY MICROSOFT NONREFUNDABLE ROYALTIES IN ACCORDANCE WITH
THE ROYALTY TABLES SET FORTH BELOW (TABLES I AND 2) AND THE "UNIT DISCOUNT"
TABLE SET FORTH IN SECTION 3.4 OF THIS AMENDMENT (TABLE 3).
3.2.2
THE BASE ROYALTY RATE 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) AND THE PUBLISHER'S BILLING ELECTION PER THE PLA ("WORLDWIDE"
OR "REGIONAL"). TO DETERMINE THE APPLICABLE BASE ROYALTY FOR A PARTICULAR
SOFTWARE TITLE IN A PARTICULAR SALES TERRITORY, THE APPLICABLE THRESHOLD PRICE
FROM TABLE I BELOW WILL DETERMINE THE CORRECT ROYALTY "TIER." THE BASE ROYALTY
IS THEN AS SET FORTH IN TABLE 2 BASED ON THE BILLING OPTION SELECTED BY
PUBLISHER UNDER THE PLA AND THE MANUFACTURING REGION IN WHICH THE FPUS WILL BE
MANUFACTURED. FOR EXAMPLE, ASSUME THE WHOLESALE PRICE OF A SOFTWARE TITLE TO BE
SOLD IN THE EUROPEAN SALES TERRITORY IS [***]. ACCORDING TO TABLE I, TIER 2
ROYALTY RATES WILL APPLY TO THAT SOFTWARE TITLE. IF THE PUBLISHER HAS CHOSEN A
WORLDWIDE BILLING ELECTION, THEN THE BASE ROYALTY IS [***] PER TABLE 2.
IF
PUBLISHER HAS CHOSEN A REGIONAL BILLING OPTION, THE BASE ROYALTY IS DETERMINED
IN TABLE 2 BY THE MANUFACTURING REGION. IF THE SOFTWARE TITLE WERE MANUFACTURED
IN THE EUROPEAN MANUFACTURING REGION, THE BASE ROYALTY WOULD BE [***] PER FPU.
IF THE SOFTWARE TITLE WERE MANUFACTURED IN ASIAN MANUFACTURING REGION, THE BASE
ROYALTY WOULD BE [***] PER FPU.
MICROSOFT CONFIDENTIAL
[***]
The portions of this document marked with three asterisks represent
confidential portions omitted and filed separately with the Securities and
Exchange Commission.
2
Table 1: Threshold Price per Sales Territory
North America WSP
European WSP
Japan SRP
Asia WSP (US$)*
Tier 1
[***] and over
[***] and over
[***] and over
[***] and over
Tier 1.5
[***] - [***]
[***] - [***]
[***] - [***]
[***] - [***]
Tier 2
[***] - [***]
[***] - [***]
[***] - [***]
[***] - [***]
Tier 3
[***] or less
[***] or less
[***] or less
[***] or less
*This is the US dollar equivalent of local currency in the Asia Sales Territory.
Table 2: Royalty Rates
Worldwide Billing
Royalty Rate per