Document:

exv10w71

 

Exhibit 10.71

CONTRACT # 154486

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 Midway Home Entertainment
Inc., a Delaware corporation (“Publisher”).

RECITALS

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

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

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

1. Exhibits

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

	 	 	 	 	 
	 

	 	Exhibit 1:
	 	Payments
	 

	 	Exhibit 2:
	 	Xbox 360 Royalty Tier Selection Form
	 

	 	Exhibit 3:
	 	Xbox 360 Publisher Enrollment Form
	 

	 	Exhibit 4:
	 	Authorized Subsidiaries
	 

	 	Exhibit 5:
	 	Non-Disclosure Agreement
	 

	 	Exhibit 6:
	 	Japan/Asian Royalty Incentive Program
	 

	 	Exhibit 7:
	 	Xbox Live Incentive Program

2. Definitions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     2.31 “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.
Notwithstanding anything to the contrary in this Agreement, under no circumstances shall the Xbox
360 Publisher Guide alter any terms or conditions found in this document entitled “Xbox 360
Publisher License Agreement” in a manner that is unfavorable to Publisher.

     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.

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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 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 below and further described in the Xbox 360 Publisher Guide.
Additional or alternate approval processes for Online Content may be further described in the Xbox
360 Publisher Guide

          4.1.1 Concept. For each Software Title, Publisher shall deliver to Microsoft a completed
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 by Publisher and
approved by Microsoft, is incorporated herein by reference and adherence to its terms is a
requirement for Certification. Publisher may propose Online Content at any time after a Concept
has been approved, in which case Publisher shall deliver to Microsoft a separate Concept submission
for each proposed piece of Online Content.

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

          4.1.3 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.

          4.1.4 Marketing Materials Approval. Publisher shall submit all Marketing Materials to
Microsoft and shall not distribute such Marketing Materials unless and until Microsoft has
approved them in writing. Prior to use or publication of any Marketing Materials, Publisher agrees
to incorporate all changes relating to use of the Licensed Trademarks that Microsoft may 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).

          4.1.5 Notwithstanding anything to the contrary in this Agreement (including, without limitation,
any version of the Xbox Guide), Publisher shall have no liability to Microsoft whatsoever under
this Agreement should Publisher cancel or delay the development of a Software Title.

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     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 4.1.2) and/or Marketing Materials approval (Section
4.1.4) 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 by the ESRB, ELSPA, or CERO (or its equivalent agency in other Sales
Territories) as suitable for adults only or otherwise indecent, obscene or otherwise prohibited by
law, the Publisher shall at its own costs recall all FPUs. If, after Commercial release, a Software
Title distributed in a Sales Territory without a ratings body is determined by Microsoft, in its
reasonable discretion, as suitable for adults only, or otherwise indecent or obscene, or otherwise
prohibited by law, the Publisher shall at its own cost recall all FPUs. If, after Commercial
release, a Software Title is determined by Microsoft, in its reasonable discretion, as suitable for
adults only or otherwise indecent or obscene, or otherwise prohibited by law due to content that
was not disclosed to Microsoft during the Certification process, then 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. Upon Microsoft’s request, Publisher shall provide Microsoft with copies of, or reasonable
access to inspect the FPUs and Software Title (either in pre-Commercial Release or Commercial
Release versions, as Microsoft may request).

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

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4.7 Title Updates

          4.7.1 All Title Updates for Software Titles are subject to approval by Microsoft. Publisher
may release [*] 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, or for any other reason at Microsoft’s reasonable discretion. Microsoft reserves
the right to charge Publisher a reasonable fee to offset the costs associated with the
Certification, hosting, and distribution of Title Updates to Xbox Live Users that are required
because of revocation of Certification or a Software Title or Online Content adversely affecting
Xbox Live.

5. Xbox 360 Publisher Guide

Publisher acknowledges that the Xbox 360 Publisher Guide is an evolving document and subject to
change during the term of this Agreement. Publisher agrees to be bound by all provisions contained
in the then-applicable version of the Xbox 360 Publisher Guide. Publisher agrees that upon
Publisher’s receipt of notice of availability of the applicable supplement, revision, or updated
version of the Xbox 360 Publisher Guide (which may be via a publisher newsletter or other
electronic notification), Publisher automatically is bound by all provisions of the Xbox 360
Publisher Guide as supplemented, revised, or updated. Publisher’s continued distribution of FPUs
after a notice of supplement, revision or update is included in the Xbox 360 Publisher Guide or
made available to Publisher constitutes Publisher’s agreement to the then-current Xbox 360
Publisher Guide as supplemented, revised or updated. Microsoft will specify in each such
supplement, revision or update a reasonable effective date of each change if such change is not
required to be effective immediately. Only with respect to a Software Title that has passed
Pre-Certification prior to the applicable revision or update, Publisher will not be obligated to
comply with any changes made to the technical or content requirements for Software Titles in the
Xbox 360 Publisher Guide, except in circumstances where such change is deemed by Microsoft to be
vitally important to the success of the Xbox 360 platform (e.g. changes due to piracy, technical
failure) and such change would apply broadly to other Software Titles and Publishers (i.e., rather
than applying only to a single Software Title or publisher) or Publisher will not incur any
significant expense to accommodate such change. In addition, changes made in Branding
Specifications or other Marketing Materials requirements will be effective as to a Software Title
that has passed Certification only on a “going forward” basis (i.e., only to such Marketing
Materials and/or FPUs as are manufactured after Microsoft notifies Publisher of the change).
Notwithstanding the foregoing, Publisher shall comply with such changes to the Xbox 360 Publisher
Guide related to Branding Specifications or other Marketing Materials requirements retroactively if
Microsoft agrees to pay for Publisher’s direct, out-of-pocket 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, 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 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 to be manufactured after discovery and Microsoft may charge a reasonable amount to cover
the costs of Certifying the Software Title again.

     6.2 Online Content; Minimum Commitment

          6.2.1 Publisher agrees that each Online Game Feature of a Software Title will be made available via
Xbox Live for at least [*] following the respective Commercial Release of the FPUs of the Software
Title in each Sales Territory in which 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 [*] after discontinuation. Following the Minimum Commitment period, Publisher
may terminate Microsoft’s license associated with such Online Game Feature upon [*] prior

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

6

 

written notice to Microsoft; and/or Microsoft may discontinue the availability of any or all such
Online Game Feature via Xbox Live upon [*] 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, and unless otherwise agreed upon by the Parties,, Publisher
agrees that Microsoft has the right to make Online Content other than Online Games Features
submitted by Publisher available to Xbox Live Users for the Term of this Agreement. Publisher
agrees to provide all necessary support for such Online Content as long as such Online Content is
made available to Xbox Live Users and for [*] thereafter.

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

7. Manufacturing

     7.1 Authorized Replicators. Publisher will use only Authorized Replicators to produce FPUs.
Prior to placing an order with a replicator for FPUs, Publisher shall confirm with Microsoft that
such entities are Authorized Replicators. 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 Replicators and the agreement for such replication
services shall be as negotiated by Publisher and the applicable Authorized Replicators, subject to
the requirements in this Agreement. Publisher acknowledges that Microsoft may charge the
Authorized Replicators fees for rights, services or products associated with the manufacture of
FPUs and that the agreements with the Authorized Replicators grant Microsoft the right to instruct
the Authorized Replicators 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 Replicators and/or between Publisher and
such Authorized Replicators. 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 Replicators 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 Replicators all other items required for manufacturing FPUs
including approved Packaging Materials associated with the FPUs. Subject to the approval of
Publisher (which approval shall not be unreasonably withheld), Microsoft has the right to have
included in the packaging of FPUs such promotional materials for Xbox, Xbox 360, Xbox Live, and/or
other Xbox or Xbox 360 products or services (other than video games) 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 Replicators 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 Replicators, 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
Replicators to provide additional Verification Versions of the FPU for evaluation by Microsoft.
Microsoft’s approval is a condition precedent to manufacture, however Publisher shall grant the
final approval and shall work directly with the Authorized Replicator regarding the production run.
Publisher agrees that all FPUs must be replicated in conformity with all of the quality standards
and manufacturing specifications, policies and procedures that Microsoft requires of its Authorized
Replicators, and that all Packaging Materials must be approved by Microsoft prior to packaging.
Publisher shall cause the Authorized Replicator to include the BTS on each FPU.

     7.4 Samples. For each Software Title sku, at Publisher’s cost, Publisher shall provide Microsoft
with [*] FPUs and accompanying Marketing Materials per Sales Territory in which the FPU will be
released. Such units may be used in marketing (subject to Publisher’s consent), as product
samples, for customer support, testing and for archival purposes.

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

7

 

Publisher will not have to pay a royalty fee for such samples nor will such samples count towards
the Unit Discounts under Exhibit 1.

7.5 Minimum Order Quantities

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

	 	 	 	 	 	 	 	 	 
	 
	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 

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

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

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

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

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

8

 

     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 [*] 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. [*]. If
Publishers wishes to distribute a Demo Versions in an online downloadable format, such downloadable
Demo Version shall be distributed via by Microsoft Xbox Live in accordance with Section 10.3, and
such downloadable Demo Version will be subject to all other terms and policies applicable to Online
Content set forth herein and in the Xbox 360 Publisher Guide.

8. Payments

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

9. Marketing, Sales and Support

     9.1 Publisher Responsible. As between Microsoft and Publisher, Publisher is solely
responsible for the marketing and sales of the Software Title. Publisher is also solely
responsible for providing technical and all other support relating to the FPUs (including for Xbox
Live Users of Online Content). Publisher shall provide all appropriate 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 [*] limited warranty that the FPU will be free
from defects in materials or workmanship or, at Publisher’s option, Publisher will refund the
purchase price or provide a repaired or 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 adversely affect the gameplay of the Xbox 360 or Xbox Live, Microsoft may require
Publisher to recall FPUs and undertake prompt repair or replacement of such Software Title and/or
FPUs.

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

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

9

 

     9.5 Software Title License. Subject to Publisher’s prior approval for each Software Title,
Publisher grants Microsoft a fully-paid, royalty-free, worldwide, non-exclusive license (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 (only in reference
to 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, 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 when such uses would not
require the authorization of the rights holders therein under the applicable law (but Publisher
gives Microsoft no such authorization).

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

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

     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

10

 

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 [*] 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.

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

11

 

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. 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. 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 prompt
notice to Microsoft of apparent 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, with Publisher’s consent (not to be
unreasonably withheld) 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 in
whatever form (e.g. information, materials, tools and/or software exchanged by the parties
hereunder), including the terms and conditions, unless otherwise specifically stated, will be
protected from disclosure for as long as it remains Confidential.(provided that if and to the
extent that any provision of the Non-Disclosure Agreement is inconsistent with the body of this
Agreement, then the terms of this Agreement will be deemed to control and the first sentence of
Section 4(b) of the Non-Disclosure Agreement shall not apply with respect to any information,
materials and software exchanged in connection with this Agreement).

12

 

     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. Notwithstanding anything to the contrary contained
herein or in the Non-Disclosure Agreement, Microsoft shall not make public announcements regarding
Software Titles until Publisher has approved of such disclosure or such Software Titles have been
generally disclosed to the public by Publisher.

     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.

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

     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 (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; provided, however that Publisher makes no representations or warranties as to
infringement, misappropriation or compliance with laws and regulations to the extent due to the
“Sample code,” “Tools,” or “Redistributable Code” in the form as provided by Microsoft (as defined
in the XDK License) or due to the Security Technology, Licensed Trademarks, Xbox Live, or other
materials in the form as provided by Microsoft under this Agreement.

          15.1.3 It shall comply with all laws, regulations, industry content rating requirements and
administrative orders and requirements within any applicable Sales Territory relating to the
distribution, sale and marketing of the Software Title, and shall keep in force all necessary
licenses, permits, registrations, approvals and/or exemptions throughout the term

13

 

of this Agreement and for so long as it is distributing, selling or marketing the Software Title in
any applicable Sales Territory.

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

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

     15.2 Microsoft. Microsoft warrants and represents that it has the full power to enter into
this Agreement and it has not previously and will not grant any rights to any third party that are
inconsistent with the rights granted to 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, ITS AFFILIATES, LICENSORS OR ITS
SUPPLIERS OR PUBLISHER OR ITS AFFILIATES BE LIABLE FOR ANY SPECIAL, INCIDENTAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER, RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING WITHOUT LIMITATION, LOST PROFITS OR LOST GOODWILL AND
WHETHER BASED ON BREACH OF ANY EXPRESS OR IMPLIED WARRANTY, BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE) OR STRICT LIABILITY, REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE OR IF SUCH DAMAGE COULD HAVE BEEN REASONABLY FORESEEN.

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

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

     16.1 Mutual Indemnification. Each party hereby agrees to indemnify, defend, and hold the
other party harmless from any and all third party claims, demands, costs, liabilities, losses,
expenses and damages (including reasonable attorneys’ fees, costs, and expert witnesses’ fees)
arising out of or in connection with any claim by an unaffiliated third party 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 by an unaffiliated third party
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;

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

14

 

provided, however, that Publisher shall have no obligation with respect to any claim to the extent
due to the “Sample code,” “Tools,” or “Redistributable Code” in the form as provided by Microsoft
(as defined in the XDK License) or due to the Security Technology, Licensed Trademarks, Xbox Live,
or other materials in the form as provided by Microsoft under this Agreement.

     16.3 Notice and Assistance. The indemnified party shall: (i) provide the indemnifying party
reasonably prompt notice in writing of any Claim and permit the indemnifying party to answer and
defend such Claim through counsel chosen and paid by the indemnifying party; and (ii) provide
information, assistance and authority to help the 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. Publisher shall maintain Comprehensive General Liability Coverage
(including Products Liability and Advertising Liability Coverage) For FPUs distributed in the
Japan Sales Territory, Publisher’s coverage will have minimum limits of the Japanese yen equivalent
of $[*] per occurrence, $[*] in the aggregate , with a deductible of not more than the Japanese yen
equivalent of $[*]. For FPUs distributed in the Asian Sales Territory, Publisher’s coverage will
have minimum limits of $[*] per occurrence, $[*] in the aggregate (or its equivalent value in local
currency as of the date of issuance), with a deductible of not more than $[*] (or its equivalent
value in local currency as of the date of issuance). For FPUs distributed outside of Japan and the
Asian Sales Territories, Publisher shall maintain such coverage with policy limits of not less than
$[*] per occurrence, $[*] in the aggregate, (or its equivalent value in local currency as of the
date of issuance), each claim with a deductible of not more than $[*] (or its equivalent value in
local currency as of the date of issuance). The insurance retroactive coverage date will be no
later than [*]. Publisher shall maintain an active policy, or purchase an extended reporting
period providing coverage for claims first made and reported to the insurance company within [*]
after [*]. Upon request, Publisher shall deliver to Microsoft proof of such coverage. In the
event that Publisher’s proof evidences coverage that Microsoft reasonably determines to be less
than that required to meet Publisher’s obligations as specified in this provision, then Publisher
agrees that it shall promptly acquire such coverage and notify Microsoft in writing thereof.

17. Term and Termination

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

     17.2 Termination for Breach. If either party materially fails to perform or comply with this
Agreement or any provision thereof, and fails to remedy the default within [*] after the receipt of
notice to that effect, then the other party has the right, at its sole option and upon written
notice to the defaulting party, to terminate this Agreement upon written notice; provided that if
Publisher is the party that has materially failed to perform or comply with this Agreement, then
Microsoft has the right, but not the obligation, to suspend availability of the Online Content
during such [*] period. Any notice of default hereunder must be prominently labeled “NOTICE OF
DEFAULT”; provided, however, that if the default is of Sections 10, 12, or the Non-Disclosure
Agreement as it applies to the Agreement, or if the non-defaulting party has the right to terminate
the XDK License for default in accordance with its terms, then the non-defaulting party may
terminate this Agreement immediately upon written notice, without being obligated to provide a [*]
cure period. The rights and remedies provided in this section are not exclusive and are in
addition to any other rights and remedies provided by law or this Agreement. If the uncured
default is related to a particular Software Title or particular Online Content, then the party not
in default has the right, in its discretion, to terminate this Agreement its entirety or with
respect to the applicable Software Title or the particular Online Content. If Microsoft
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 Xbox 360 Publisher Guide 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.

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

15

 

     17.3 Effect of Termination; Sell-off Rights. Upon termination or expiration of this
Agreement, Publisher has no further right to exercise the rights licensed hereunder or within the
XDK License and shall promptly cease all manufacturing of FPU through its Authorized Replicators
and, other than as provided below, cease use of the Licensed Trademarks. Publisher shall have a
period of [*], to sell-off its inventory of FPUs existing as of the date of termination or
expiration, after which sell-off period Publisher shall immediately return all FPUs to an
Authorized Replicator for destruction. Publisher shall cause the Authorized Replicator to destroy
all FPUs and issue to Microsoft written certification by an authorized representative of the
Authorized Replicator confirming the destruction of FPUs required hereunder. All of Publisher’s
obligations under this Agreement shall continue to apply during such [*] sell-off period. If this
Agreement is terminated due to Publisher’s breach, at Microsoft’s option, Microsoft may require
Publisher to immediately destroy all FPUs not yet distributed to Publisher’s distributors, dealers
and/or end users and shall require all those distributing the FPU over which it has control to
cease distribution. Upon termination or expiration of this Agreement, Publisher shall continue to
support existing Online Game Features for FPUs that have already been sold until the end of the
Minimum Commitment term.

     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 for default in accordance with its terms, 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, 9.1-9.3, 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 [*] after they are deposited in the applicable country’s mail system [*], postage
prepaid, certified or registered, return receipt requested; or [*] sent by overnight courier,
charges prepaid, with a confirming fax; and addressed as follows:

	 	 	 	 	 	 	 
	Publisher:

	 	MIDWAY HOME ENTERTAINMENT INC.
	 	Microsoft:
	 	MICROSOFT LICENSING, GP
	 

	 	c/o Midway Games Inc.
	 	 	 	6100 Neil Road, Suite 100
	 

	 	2704 West Roscoe Street
	 	 	 	Reno, NV 89511-1137
	 

	 	Chicago, Illinois 60618	 	 	 	 
	 

	 	 	 	Attention:
	 	Xbox Accounting Services
	Attention:

	 	President	 	 	 	 
	Fax:

	 	 	 	with a cc to:
	 	MICROSOFT CORPORATION
	Phone:

	 	 

	 	 
	 	One Microsoft Way
	 

	 	 

	 	 
	 	Redmond, WA 98052-6399
	 
	 	 	 	 	 	 
	with a cc to:

	 	MIDWAY GAMES INC.	 	 	 	 
	 

	 	2704 West Roscoe Street
	 	Attention:
	 	Law & Corporate Affairs Department
	 

	 	Chicago, Illinois 60618
	 	 	 	Assoc.
General Counsel, Consumer Legal Group (H&ED)

	 

	 	 	 	 	 	Fax: (425) 936-7329
	Attention:

	 	Vice President and General Counsel	 	 	 	 
	Fax:

	 	(773) 961-2299	 	 	 	 
	Email:

	 	dfulton@midwaygames.com	 	 	 	 

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

16

 

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.

     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 to the extent incorporated herein, the Xbox 360 Publisher Guide, written
amendments thereto, and other incorporated documents) 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	 	 	 	Midway Home Entertainment Inc.	 	 
	 
	/s/ Anna Becker
 

By (sign)

	 	 
	 	/s/ Miguel Iribarren
 

By (sign)
	 	 
	 
	 	 	 	 	 	 
	ANNA BECKER
 

Name (Print)

	 	 
	 	Miguel Iribarren
 

Name (Print)
	 	 
	 
	 	 	 	 	 	 
	Sr. Program Manager
 

Title

	 	 
	 	VP-Publishing
 

Title
	 	 
	 
	 	 	 	 	 	 
	OCT 25 2006
 

Date

	 	 
	 	10-24-06
 

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 [*]. According to Table 1,
[*] 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 [*] per FPU. If the Software Title were manufactured in Asian
Manufacturing Region, the royalty fee would be [*] per FPU.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	[*] 	 
	 	 	[*]	 	[*]	 	[*]	 	 	[*]	 
	[*]
	 	[*]	 	[*]	 	[*]	 	 	[*]	 
	[*]
	 	[*]	 	[*]	 	[*]	 	 	[*]	 

	 	 	 	 	 	 	 
	[*]	 	[*]
	 	 	[*]	 	[*]	 	[*]
	[*]
	 	[*]	 	[*]	 	[*]
	[*]
	 	[*]	 	[*]	 	[*]

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

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

1

 

Table 3: Unit Discounts

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 

     [ * ]

	 	i.	 	For North American Sales Territory:
	 
	 	 	 	[*]
	 
	 	ii.	 	For Japan Sales Territory:
	 
	 	 	 	[*]

2. Payment Process

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

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

3. Billing Address

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

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

	 	 	 	 	 	 	 	 	 	 	 
	North America Manufacturing Region:	 	 	 	Asian Manufacturing Region (if different):	 	 
	 
	Name:

	 	Midway Home Entertainment Inc.___c/o
	 	 	 	Name:	 	 	 	 
	Midway Games Inc	 	 	 	 	 	Address:	 	 	 	 
	Address:

	 	2704 West Roscoe Street	 	 	 	 	 	 	 	 
	 	 	Chicago, IL60618	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Attention:	 	 	 	 
	Attention:	 	Accounts	 	Email address:	 	 	 	 
	payable

	 	 	 	 	 	Fax:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Email address:

	 	 	 	 	 	Phone:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Fax:

	 	773 961-2464	 	 	 	 	 	 	 	 
	Phone:

	 	773 961-2000	 	 	 	 	 	 	 	 

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

2

 

4. Asia Simship Program

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

5. Online Content

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

          [*]

          [*]

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

     c. [*]

     d. [*]

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

3

 

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

6. Xbox Live Billing and Collection

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

7. Taxes

     a. The amounts to be paid by either party to the other do not include any foreign, U.S.
federal, state, local, municipal or other governmental taxes, duties, levies, fees, excises or
tariffs, arising as a result of or in connection with 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
within [*] of such payment, Publisher delivers to Microsoft an official receipt for any such taxes
withheld or other documents necessary to enable Microsoft to claim a U.S.A. Foreign Tax
Credit.

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

4

 

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

8. Audit

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

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

5

 

EXHIBIT 2

XBOX 360 ROYALTY TIER SELECTION FORM

PLEASE COMPLETE THE BELOW INFORMATION, SIGN THE FORM, AND FAX IT TO MICROSOFT AT

+1 (425) 708-2300 TO THE ATTENTION OF MICROSOFT LICENSING, GP (MSLI) AND YOUR ACCOUNT
MANAGER.

NOTES:

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

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

	1.	 	Publisher Name:       
           
          
           
          
          
          
          
         
          
         
          
         
              

	2.	 	Xbox 360 Software Title Name:                                                                            
                                                                 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	3.  XeMID Number:	 	 	 	4. Manufacturing Region (check one):
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	North American	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	European	 	 
	 

	 	 	 	 	 	 	 	 

	 	 Asian	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	5.	 	Sales Territory (check one):	 	 	 	6. Final Certification Date:
	 

	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	North American Sales Territory	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Japan Sales Territory	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	European Sales Territory	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Asian Sales Territory	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	7.	 	Select Royalty Tier: (check one): [*]	 	 	 	 	 	 	 	 

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)
	 	 

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

1

 

EXHIBIT 3

XBOX 360 PUBLISHER ENROLLMENT FORM

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

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

     This Xbox 360 Publisher License Enrollment (“Enrollment”) is entered into between Microsoft
Ireland Operations Ltd. (“MIOL”) and                                          (“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                                          dated on or about
                                         (the “Xbox 360 PLA”) are incorporated herein by reference.

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

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

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

	 	 	 	 	 	 	 	 	 
	Publisher:

	 	 	 	 	 	Microsoft:
	 	MICROSOFT IRELAND OPERATIONS LTD.
	 

	 	 

	 	 
	 	 	 	Microsoft European Operations Centre,
	Address:

	 	 	 	 	 	 	 	Atrium Building Block B,
	 

	 	 

	 	 
	 	 	 	Carmenhall Road,
	 

	 	 	 	 	 	 	 	Sandyford Industrial Estate
	 

	 	 

	 	 
	 	 	 	Dublin 18
	Attention:

	 	 	 	 	 	 	 	Ireland
	 

	 	 

	 	 	 	 	 	 
	Fax:

	 	 	 	 	 	 	 	Fax: 353 1 706 4110
	 

	 	 

	 	 	 	 	 	 
	Phone:

	 	 	 	 	 	Attention:
	 	MIOL Xbox Accounting Services
	 

	 	 

	 	 	 	 	 	 
	Email:

	 	 	 	 	 	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]

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

1

 

     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:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	VAT number:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Attention:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Email address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Fax:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Phone:	 	 	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	MICROSOFT IRELAND OPERATIONS LTD.	 	 	 	PUBLISHER:	 	 
	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 
	By (sign)

	 	 	 	By (sign)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 
	Name (Print)

	 	 	 	Name (Print)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 
	Title

	 	 	 	Title	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 
	Date (Print mm/dd/yy)

	 	 	 	Date (Print mm/dd/yy)

2

 

EXHIBIT 4

AUTHORIZED AFFILIATES

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	I.

	 	Name:
	 	Midway Games Limited
	 	 	 	II.
	 	Name:
	 	K.K. Midway Games	 	 
	 

	 	Address:
	 	43 Worship Street
	 	 	 	 	 	Address:
	 	10-7, Higashigotonnda	 	 
	 

	 	 	 	London EC2A 2DX UK
	 	 	 	 	 	 	 	1-chome, Shinagawa-ku	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	Tokyo, Japan	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Telephone:
	 	44 0207 382 7720
	 	 	 	 	 	Telephone:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 

	 	 
	 

	 	Fax:
	 	44 0207 382 7759
	 	 	 	 	 	Fax:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 

	 	 

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

PUBLISHER AFFILIATE AGREEMENT

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

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

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

	 	 	 
	 
	 

Signature

	 	 
	 
	 	 
	 

Title

	 	 
	 
	 	 
	 

Name (Print)

	 	 
	 
	 	 
	 

Date

	 	 

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

1

 

EXHIBIT 5

NON-DISCLOSURE AGREEMENT

[Attached]

1

 

EXHIBIT 6

JAPAN AND ASIA ROYALTY INCENTIVE PROGRAM

1. Overview

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

2. Qualified FPUs

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

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

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

     c. [*] 

     d. [*] 

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

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

3. Payment

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

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

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

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

1

 

EXHIBIT 7

XBOX 360 LIVE INCENTIVE PROGRAM

1. Xbox 360 Live Incentive Program

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

[*]

The following sections define the elements of this basic equation.

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

2. Xbox Live Market Share

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

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

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

     d. “[*] Unique Users” means [*].

     e. “Paying Subscriber” [*].

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

     g. “[*] Unique Users” means [*].

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

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

2

 

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

3. Participation Pool

     a. “Participation Pool” means [*].

     b. “Subscription Revenue” means all gross amounts recognized as revenue (in accordance with
Microsoft’s normal accounting policies) and actually received by Microsoft, in U.S. Dollars, for
subscription accounts to Xbox Live for use on Xbox 360 (excluding applicable sales, use,
value-added and similar taxes) during a particular Accounting Period. Microsoft shall convert and
recognize amounts received in currencies other than U.S. Dollars in accordance with its standard
accounting practices.

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

4. Example

[*]

          • [*]

[*]

          • [*]

[*]

[*]

          • [*]

[*]

5. Term

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

6. Payments

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

 

			
	*	 	Information has been omitted from this document and filed
separately with the SEC under a request for confidential treatment pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

3exv10w1

 

EXHIBIT 10.1

WAIVER AND AMENDMENT

          This WAIVER AND AMENDMENT(“Waiver”) is entered into as of February 28, 2007, among
METHODE ELECTRONICS, INC., a Delaware (the “Borrower”), each lender party hereto
(collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA,
N.A., as Administrative Agent, and L/C Issuer.

          WHEREAS, the Borrower, the Lenders and Bank of America, N.A., as Administration Agent and L/C
Issuer are parties to that certain Credit Agreement, dated as of December 19, 2002, as amended (the
“Credit Agreement”) (terms defined in the Credit Agreement shall have the same respective meanings
when used herein);

          WHEREAS, the Borrower has requested that the Lenders agree to waive and/or amend certain
provisions of the Credit Agreement pursuant to the terms hereof; and

          WHEREAS, the Lenders are willing to waive or amend the Credit Agreement, all subject to the
terms and conditions contained herein;

          NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I

AMENDMENT AND WAIVER

          1.01. Section 7.03(e) of the Credit Agreement is amended by deleting “$5,000,000” and
inserting in lieu thereof the following: “$5,000,000, plus in connection with the Borrower’s
acquisition of Touchsensor Technologies, up to $8,321,968 of assumed letter of credit reimbursement
obligations (the “Gemtron LC Obligations”) of Gemtron Corporation (“Gemtron”) in connection with
letters of credit (the “Gemtron LC’s”) issued by JP Morgan Chase Bank or an affiliate (“JP Morgan”)
for the account of Gemtron.”

          1.02. The Lenders hereby waive the provisions of Section 7.01 of the Credit Agreement to the
extent that Section 7.01 would prohibit the Borrower from granting to JP Morgan, as security for
the Gemtron LC Obligations, any collateral provided for under the letter of credit applications (as
in effect on the date hereof) related to the Gemtron LC Obligations.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

          The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that:

          2.01. The representations and warranties of the Borrower set forth in Article V of the Credit
Agreement are true and correct as of the date hereof as though made on the date hereof and as
though applied to the Credit Agreement as amended by this Waiver and Amendment

 

 

(except to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.01, the representations and warranties contained in Section 5.05(a) and
(b) of the Credit Agreement shall be deemed to refer to the most recent statements furnished
pursuant to Section 6.01 (a) and (b) of the Credit Agreement).

          2.02. No Default or Event of Default has occurred and is continuing.

ARTICLE III

GENERAL

          3.01. This Waiver and Amendment shall become effective as of the date hereof, subject,
however, to the receipt by the Administrative Agent of counterparts of this Waiver, executed by the
Borrower, the other Loan Parties whose signatures are provided for hereinbelow, and the Lenders.

          3.02. As amended or modified by this Waiver, the Loan Documents shall remain in full force and
effect. References to the Credit Agreement in any of the Loan Documents shall be deemed to include
a reference to the Credit Agreement as amended or modified hereby, whether or not reference is made
to this Waiver. Section headings used in this Waiver and Amendment are for convenience of
reference only, and shall not affect the construction of this Waiver.

          3.03. This Waiver and Amendment may be executed in any number of counterparts (each of which
shall be deemed an original, but all such counterparts together shall constitute but one and the
same instrument).

          3.04. The Borrower agrees to pay to or reimburse the Administrative Agent, upon demand, for
all costs and expenses incurred (including legal expenses) in connection with the development,
preparation, negotiation, execution and delivery of this Waiver.

          3.05. All obligations of the Borrower and rights of the Administrative Agent and the Lenders,
that are expressed herein, shall be in addition to and not in limitation to those provided by
applicable law. This Waiver and Amendment shall be a contract made under and governed by the
internal laws of the State of Illinois, without giving effect to principles of conflicts of laws.
Whenever possible, each provision of this Waiver and Amendment shall be interpreted in such manner
as to be effective and valid under applicable law; but if any provision of this Waiver and
Amendment shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Waiver.

          3.06. The Borrower acknowledges and agrees that the execution and delivery by the
Administrative Agent and the Lenders of this Waiver and Amendment shall not be deemed to create a
course of dealing or otherwise obligate the Lenders to forbear or execute similar Waivers under the
same or similar circumstances in the future.

2

 

          3.07. This Waiver and Amendment shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. No third party beneficiaries are intended in
connection with this Waiver.

          3.08. This Waiver, together with the Credit Agreement, contains the entire and exclusive
agreement of the parties hereto with reference to the matters discussed herein and therein. This
Waiver and Amendment supercedes all prior drafts and communications with respect hereto. This
Waiver and Amendment may not be amended except in accordance with the provisions of Section 10.1 of
the Credit Agreement.

[Signature Page Follows]

3

 

     IN WITNESS WHEREOF, each parties hereto have caused this Agreement to be duly executed as of
the date first above written.

	 	 	 	 	 
	 	METHODE ELECTRONICS,INC.

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as

Administrative Agent

 	 
	 	By:  	/s/ Jonathan M. Phillips
 	 
	 	 	Name:  	Jonathan M. Phillips 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as a Lender, and L/C

Issuer

 	 
	 	By:  	/s/ Jonathan M. Phillips
 	 
	 	 	Name:  	Jonathan M. Phillips 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

ACKNOWLEDGEMENT

     The undersigned hereby acknowledges and agrees to the foregoing Waiver and Amendment and
confirms that its Loan Documents remain in full force and effect and are hereby reaffirmed.

	 	 	 	 	 
	 	ABAS, INC.

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	AUTOMOTIVE SAFETY TECHNOLOGIES, INC.

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	CABLECO TECHNOLOGIES, INC.

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	DUEL SYSTEMS, INC.

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	KBA, INC.

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	MAGNA-LASTIC DEVICES, INC.

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	TRACE LABORATORIES, INC.

(formerly METHODE DELAWARE HOLDINGS,

 INC.)

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	METHODE DEVELOPMENT COMPANY

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	METHODE ELECTRONICS CONNECTIVITY

TECHNOLOGIES, INC.

 	 
	 	By:  	/s/ Douglas A. Koman
 	 
	 	 	Name:  	Douglas A. Koman 	 
	 	 	Title:  	Vice President

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