Manufacturing Region for Regional
Billing Option
Option
North American
European
Asian
Tier 1
[***]
[***]
[***]
[***]
Tier 1.5
[***]
[***]
[***]
[***]
Tier 2
[***]
[***]
[***]
[***]
Tier 3
[***]
[***]
[***]
[***]
Hit FPU
[***]
[***]
[***]
[***]
Super Hit FPU
[***]
[***]
[***]
[***]
3.3
SETTING THE BASE ROYALTY. PUBLISHER SHALL
SUBMIT TO MICROSOFT, AT LEAST [***] BEFORE PLACING THE FIRST MANUFACTURING ORDER
FOR A SOFTWARE TITLE, A COMPLETED AND SIGNED "ROYALTY TIER SELECTION FORM" IN
THE FORM ATTACHED HERETO AS EXHIBIT I FOR EACH SALES TERRITORY. THE SELECTION
INDICATED IN THE FORM WILL ONLY BE EFFECTIVE ONCE THE FORM HAS BEEN ACCEPTED BY
MICROSOFT. IF PUBLISHER DOES NOT SUBMIT A ROYALTY TIER SELECTION FORM AS
REQUIRED HEREUNDER, THE BASE ROYALTY FOR SUCH SOFTWARE TITLE WILL DEFAULT TO
TIER 1, REGARDLESS OF THE ACTUAL THRESHOLD PRICE.
EXCEPT FOR AS PROVIDED FOR
UNDER SECTION 4 OF THIS AMENDMENT, THE SELECTION OF A BASE ROYALTY 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. MICROSOFT MAY CHANGE THE FEES AND ROYALTY RATES SET FORTH
HEREIN UPON WRITTEN NOTICE TO PUBLISHER IN THE FIRST QUARTER EACH CALENDAR YEAR,
WHICH NEW FEES AND ROYALTY RATES WILL BECOME EFFECTIVE THE FOLLOWING JULY 1.
3.4
UNIT DISCOUNTS. PUBLISHER IS ELIGIBLE FOR A
DISCOUNT TO THE BASE ROYALTY APPLICABLE TO FPUS MANUFACTURED FOR A PARTICULAR
SALES TERRITORY (A "UNIT DISCOUNT") BASED ON THE NUMBER OF STANDARD FPUS THAT
HAVE BEEN MANUFACTURED FOR SALE IN THAT SALES TERRITORY AS DESCRIBED IN TABLE 3
BELOW. NOTE THAT 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. THE DISCOUNT WILL BE
ROUNDED UP TO THE NEAREST CENT, YEN OR HUNDREDTH OF A EURO. MICROSOFT MAY REVISE
THE DISCOUNT SCHEDULE UPON WRITTEN NOTICE TO PUBLISHER IN THE FIRST QUARTER EACH
CALENDAR YEAR, WHICH REVISED DISCOUNT SCHEDULE WILL BECOME EFFECTIVE THE
FOLLOWING JULY 1.
MICROSOFT CONFIDENTIAL
[***]
The portions of this document marked with three asterisks represent
confidential portions omitted and filed separately with the Securities and
Exchange Commission.
3
Table 3: Unit Discounts
Unit
Discount
North America Sales
Territory
European Sales
Territory
Japan Sales
Territory
Asia Sales
Territory
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
Example l (under worldwide billing election): Publisher manufactures a Software
Title for sale in the North American Sales Territory with a wholesale price
between [***] and [***] and an initial order quantity of [***] Standard FPUs.
Publisher manufactures the same Software Title for sale in the European Sales
Territory with a wholesale price between [***] and an initial order quantity of
[***] Standard FPUs. The actual applied royalty-rates for this Software Title
would-be:
I.
FOR NORTH AMERICAN SALES TERRITORY:
A.