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Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) is the type of information that the registrant treats as private or confidential.  Double asterisks denote omissions.
Exhibit 10.9
This Agreement is entered into on 27 September 2005 by and between

SONY COMPUTER ENTERTAINMENT EUROPE LIMITED
of 30 Golden Square, London W1F 9LD (hereinafter referred to as “SCEE”)

and

ACTIVISION UK LIMITED
of Parliament House, St. Laurence way, Slough, Berks, SL1 2BW
(hereinafter referred to as "Publisher")
PUBLISHER AUTHORISATION #: 056

Recitals

(A)SCEE, its parent company Sony Computer Entertainment Inc., and/or certain of their affiliates and companies within the group of companies of which any of them form part (hereinafter jointly and severally referred to as “Sony”) have developed, and are licensing core components of, a computer entertainment system known and hereinafter referred to as “PlayStation® Portable” or “PSP”, and are the owners of, or have the right to grant licences of, certain proprietary information and intellectual property rights pertaining to PSP.

(B)Publisher desires to be granted a non-exclusive licence, on a product by product basis, to market, distribute and sell Licensed Products (as defined below), and for such Licensed Products and associated materials to be manufactured by an authorised manufacturing facility licensed by SCEE, on the terms and subject to the conditions set forth in this Agreement.

(C)SCEE is willing, on the terms and subject to the conditions of this Agreement, to grant Publisher the desired non-exclusive licences.

In consideration of the undertakings, representations and warranties given herein, and of other good and valuable consideration the receipt and sufficiency of which is acknowledged, Publisher and SCEE agree as follows:

1.Definitions

1.1“Licensed Products” means the PSP format Software games listed in Schedule 3, and such further PSP format Software games as shall, from time to time, achieve unconditional pass status under SCEE’s product assessment process, in unique UMD format software discs and shells.

1.2“Licensed Territory” means the countries specified in Schedule 1.

1.3“Sony Intellectual Property Rights” means all worldwide current and future rights in or in relation to the Licensed Trademarks, any patents, inventions, designs, copyrights, rights in databases, trademarks, service marks, trade names (including any goodwill associated with any trademarks

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or names), semi-conductor topography rights, Confidential Information of Sony, rights in technical information and know- how, rights in the nature of unfair competition rights and rights to sue for passing off and all other proprietary or intellectual property rights (and the equivalents of each of the foregoing under the laws of any jurisdiction) of Sony pertaining to Sony Materials and/or PSP (including, without limitation, all registrations, applications to register and rights to apply for registration of the same) for their full term including all renewals and extensions thereof.

1.4“Specifications” means such specifications relating to the content and/or manufacture of Licensed Products, Printed Materials, Advertising Materials and/or related matters or materials as may from time to time be promulgated by Sony, which specifications (and/or procedures relating to the testing or verification of all such materials for conformity to the Specifications and/or relating to the ordering and manufacture of Licensed Products and associated materials) are incorporated into and form part of this Agreement and may be amended from time to time upon reasonable notice to Publisher.

1.5“Licensed Trademarks” means the “PS” family logo and PlayStation Portable and “PSP” logotypes and such other trademarks, service marks, trade dress, logos and other icons or indicia as shall be specified in the Specifications or otherwise designated by SCEE from time to time. SCEE may amend such Licensed Trademarks upon reasonable notice to Publisher.

Publisher is not authorised to use the PlayStation, PSone, PlayStation 2, “PS2”, playstation.com or psp.com logos and/or logotypes or the PlayStation Shapes devices, other than as expressly permitted by separate agreement. Nothing contained in this Agreement shall in any way grant Publisher the right to use the trademark “Sony” in any manner as (or as part of) a trademark, trade name, service mark or logo or otherwise howsoever.

1.6“Advertising Materials” means all advertising, merchandising, promotional and display materials of or concerning the Licensed Products.

1.7“Printed Materials” means all artwork and mechanicals to be set forth on the Licensed Product itself, and on the box (or other) packaging for the Licensed Product and all instruction manuals, inlays, inserts, stickers and other user information and/or materials to be inserted in or affixed to such box and/or packaging.

1.8“Manufactured Materials” means all units of the Licensed Products, of the Printed Materials to be set forth on the Licensed Products themselves and of the boxes for such Licensed Products (which expression shall include any alternative form of container for Licensed Products subsequently introduced by SCEE).

1.9“Licensed Developer Software” means Licensed Developer’s application source code and data (including audio and visual material) developed by Licensed Developer in accordance with its LDAP which, when integrated with any software (whether in object code or source code form) provided by SCEE, creates PSP format Software.

1.10“Licensed Developer” means Publisher or such other third party as shall have developed Licensed Developer Software and PSP format Software pursuant to a then current LDAP.

1.11“LDAP” means the PSP Licensed Developer Agreement between Licensed Developer of the applicable PSP format Software and SCEE (or an equivalent such agreement between Licensed Developer and an Affiliate of SCEE).

1.12‘‘Article 6” means Article 6 of Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs.

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1.13“Affiliate of SCEE” means, as applicable, either Sony Computer Entertainment Inc in Japan, Sony Computer Entertainment America Inc in the USA, Sony Computer Entertainment Korea or such other Sony Computer Entertainment entity as may be established by Sony from time to time.

1.14“PSP format Software” means Publisher’s object code software, which includes Licensed Developer Software and any software (whether in object code or source code form) which is provided by SCEE and intended to be combined with Licensed Developer Software for execution on PSP and has the ability to communicate with the software resident in PSP.

1.15“Sony Materials” means any hardware, data, object code, source code, documentation (or any part(s) of any of the foregoing) and related peripheral items provided to the Licensed Developer of any PSP format Software pursuant to the LDAP applicable for such PSP format Software.

1.16“Confidential Information of Sony” means the content and/or substance of this Agreement (including the Schedules hereto and the Specifications) and any and all confidential and/or proprietary information, documents and related materials of whatever nature (including, without limitation, all information made available to Publisher on www.publisher.scee.net or other Sony websites or otherwise and all processes, hardware, software, inventions, trade secrets, ideas, designs, research, know- how, business methods, production plans and marketing plans) concerning PSP and related products, developed or owned by, licensed to or under the control of Sony and, without limitation, information otherwise related to Sony’s technology, know- how, products, potential products, research projects, trials, promotional advertising and marketing plans, schedules and budgets, licensing terms and pricing, customer lists and details, commercial relationships or negotiations, services, financial models and other business information, whether relating to PSP or otherwise including relating to Sony’s “PlayStation” and “PlayStation 2” predecessor video and computer entertainment system(s), disclosed by whatever means, whether directly or indirectly, by or on behalf of Sony to Publisher at any time, whether disclosed orally, in writing or in machine-readable or other form, or otherwise discovered by Publisher (or any parent company, subsidiary or affiliate of Publisher) as a result of any information or materials provided (whether directly or indirectly) by or on behalf of Sony to Publisher (or any parent company, subsidiary or affiliate of Publisher).

1.17“UMD” means Universal Media Disc, a proprietary disc format developed by or on behalf of Sony.

1.18“Third Party Intellectual Property Rights” means all worldwide current and future rights in or in relation to any patents, inventions, designs, copyrights, rights in databases, trademarks, service marks, trade names (including any goodwill associated with any trademarks or names), semi-conductor topography rights, trade secret rights, technical information and know-how, rights in the nature of unfair competition rights and rights to sue for passing off and all other proprietary or intellectual property rights (and the equivalents of each of the foregoing under the laws of any jurisdiction) of any third party other than Publisher or Sony (including, without limitation, all registrations, applications to register and rights to apply for registrations of the same) for their full term including all renewals and extensions thereof.

1.19“Term” means, subject to Clause 2.2, the period from [**] and continuing thereafter unless and until terminated by not less than [**] notice on either side given to expire on such date or any subsequent [**].

1.20“CNDA (PSP)” means the Confidentiality & Non-Disclosure (or similar) Agreement between Publisher and SCEE or an Affiliate of SCEE relating to PSP and to Confidential Information of Sony and/or of Publisher thereunder.

1.21“Confidential Information of Publisher” means any and all confidential and/or proprietary information, documents and related materials of whatever nature (including, without limitation,

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all processes, hardware, software, inventions, trade secrets, ideas, designs, research, know-how, business methods, production plans and marketing plans) concerning PSP format Software developed or owned by, licensed to or under the control of Publisher and, without limitation, information otherwise related to Publisher’s technology, know-how, products, potential products, research projects, trials, promotional advertising and marketing plans, schedules and budgets, licensing terms and pricing, customer lists and details, commercial relationships or negotiations, services, financial models and other business information, whether relating to PSP format Software or otherwise, disclosed by whatever means, whether directly or indirectly, by or on behalf of Publisher to SCEE at any time, whether disclosed orally, in writing or in machine-readable or other form, or otherwise discovered by SCEE as a result of any information or materials provided (whether directly or indirectly) by or on behalf of Publisher to SCEE, which information is designated by Publisher as, or becomes known to SCEE under circumstances indicating that such information is, confidential or proprietary.

2.Grant of Licence

2.1SCEE hereby grants to Publisher, and Publisher hereby accepts, within the Licensed Territory only and under the Sony Intellectual Property Rights, a non-exclusive non-transferable licence, without the right to sub-license (except as specifically provided herein), to publish Licensed Products in such genres or categories as SCEE shall from time to time designate in the Specifications, and the right and obligation to use the Licensed Trademarks, in the form and manner prescribed in the Specifications, strictly, only and directly in connection with such publication.

2.2For these purposes, to “publish” shall mean any or all of the following: (i) produce Advertising Materials and Printed Materials; (ii) to issue to SCEE purchase orders for Manufactured Materials as prescribed in Clause 6; (iii) to market and advertise Licensed Products; (iv) to distribute and sell Licensed Products (and to authorise others so to do) save that, until [**], such rights shall be limited to the distribution and sale of Licensed Products to trade only; and (iv) from [**], to sub- license to end users the right to use Licensed Products for non-commercial purposes only and not for public performance. Failure to take all measures necessary to ensure that Licensed Products are not made available to consumers prior to [**] will be a material breach of this Agreement not capable of remedy and an infringement of the Licensed Trademarks.

3.Limitations

3.1Publisher shall publish Licensed Products only if based on Licensed Developer Software developed by a Licensed Developer strictly in accordance with all the terms and conditions of such Licensed Developer’s LDAP and shall not, subject to Article 6, publish or attempt to publish any other software whatsoever intended for or capable of execution on PSP. The onus of evidencing that each Licensed Product satisfies the foregoing criteria shall rest on Publisher and SCEE reserves the right to require Publisher to furnish evidence satisfactory to SCEE that the foregoing criteria are satisfied.

3.2Publisher shall not publish PSP format Software or Licensed Products outside the Licensed Territory unless and until Publisher shall be authorised and licensed so to do pursuant to a current license agreement with the applicable Affiliate of SCEE. Further, Publisher shall not sub-publish PSP format Software or Licensed Products through a third party either within or outside the Licensed Territory unless and until such sub-publisher shall be authorised and licensed so to do either pursuant to a current PSP Licensed Publisher Agreement with SCEE or a current PSP licence agreement with the applicable Affiliate of SCEE.

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3.3The licence granted in this Agreement extends only to the publication, marketing, distribution and sale of Licensed Products in such formats as may be designated by SCEE. Without limiting the generality of the foregoing and except as otherwise provided herein, Publisher and, if applicable, its sub-publishers shall at all times and in all territories be strictly prohibited from undertaking or authorising the distribution or transmission of PSP format Software or Licensed Products through electronic means or any other means now known or hereafter devised, including without limitation, via wireless, cable, fibre optic means, telephone lines, microwave and/or radio waves, or over a network of interconnected computers or other devices. Notwithstanding this limitation, Publisher may (i) authorise the sharing of insubstantial parts of PSP format Software between PSPs (so called “game sharing”) and ad hoc playing of a PSP format Software game between PSPs and, in each case by the use of the wireless features of the PSP and not via the internet or other publicly available network; (ii) undertake or authorise the distribution or transmission of PSP format Software, or user-contributed content for use with PSP format Software, over the internet or other publicly available network, and the playing of PSP format Software games between players via the internet or other publicly available network strictly for non-commercial purposes (so that no rights are granted under this Agreement where Publisher receives any direct or indirect income from such downloads or services including, without limitation, one-off payments, subscriptions, revenue sharing, advertising revenue or a combination of all or any of the same); and (iii) electronically transmit PSP format Software from site to site, or from machine to machine over a computer network, for the sole purpose of facilitating development; provided that no right of retransmission shall attach to any such transmission, and provided further that Publisher shall use reasonable security measures customary within the high technology industry to reduce the risk of unauthorised interception or retransmission of such transmissions.

3.4Subject only to Article 6, Publisher and, if applicable, its sub-publishers shall at all times be strictly prohibited from disassembling or decompiling software, peeling semiconductor components or otherwise reverse engineering or attempting to reverse engineer or derive source code or create derivative works from PSP format Software, from permitting or encouraging any third party so to do, and from acquiring or using any materials from any third party who does so. Publisher shall in all cases be primarily liable for the payment of Platform Charge to the applicable authorised manufacturing facility licensed by SCEE in accordance with Clause 7 hereof in respect of any product published by Publisher, or, if applicable, any of its sub- publishers, which utilises Sony Materials and/or Sony Intellectual Property Rights and/or, subject to Council Directive 91/250/EEC, Confidential Information of Sony. The onus of evidencing that any such product is not so published shall rest on Publisher and SCEE reserves the right to require Publisher to furnish evidence satisfactory to SCEE that the applicable of the foregoing criteria are satisfied.

3.5Publisher shall inform all such sub-publishers of the obligations imposed by this Agreement and shall obtain their commitment to abide by the same.

3.6Publisher acknowledges and agrees that; (i) no rights are granted under this Agreement in respect of non-game products or products which contain significant elements of, or are a hybrid with, audio or video profile products for UMDs; (ii) no Licensed Product shall, except as specifically authorised in advance writing by SCEE in each case, incorporate (in whole or in part) more than 1 (one) game product; and (iii) it may publish, market, distribute, sell or otherwise dispose of Licensed Products only on a standalone basis, and may not do the same in conjunction or bundled with any other goods, products or services except as specifically authorised in advance in writing by SCEE in each case.

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3.7Any breach of the provisions of this Clause 3 shall be a material breach of this Agreement not capable of remedy.

4.Reservations

4.1This Agreement does not grant any right or licence, under any Sony Intellectual Property Rights or otherwise, except as expressly provided herein, and no other right or licence is to be implied by or inferred from any provision of this Agreement or the conduct of the parties hereunder. Subject only to the rights of Publisher under this Agreement, all right, title and interest in and to the Sony Materials and the Sony Intellectual Property Rights are and shall be the exclusive property of Sony, and Publisher shall not make use of, or do or cause to be done any act or thing contesting or in any way impairing or tending to impair any of Sony’s right, title or interest in or to, any of the Sony Materials, Sony Intellectual Property Rights and PSP except as authorised by and in compliance with the provisions of this Agreement or as may otherwise expressly be authorised in writing by Sony; provided however that the foregoing shall not be taken to preclude Publisher from challenging the validity of any Sony Intellectual Property Rights. No right, licence or privilege has been granted to Publisher hereunder concerning the development of any collateral product or other use or purpose of any kind whatsoever which displays or depicts any of the Licensed Trademarks. No promotional or novelty items or premium products (including, by way of illustration but without limitation, T-shirts, posters, stickers, etc) displaying or depicting any of the Licensed Trademarks shall be developed, manufactured, marketed, sold and/or distributed by, with the authority of or on behalf of, Publisher without the prior written consent and authorisation of SCEE in each case.

4.2The Licensed Trademarks and the goodwill associated therewith are and shall be the exclusive property of Sony. Nothing herein shall give Publisher any right, title or interest in or to any of the Licensed Trademarks, other than the non-exclusive licence and privilege to display and use the Licensed Trademarks solely in accordance with the provisions of this Agreement. Publisher shall not do or cause to be done any act or thing contesting or in any way impairing or tending to impair any of Sony’s right, title or interest in or to any of the Licensed Trademarks, nor shall Publisher register or apply to register any trademark in its own name or in the name of any other person or entity, or obtain or seek to obtain rights to employ internet domain name(s) or address(es), which is or are similar to or is or are likely to be confused with any of the Licensed Trademarks; provided however that the foregoing shall not be taken to preclude Publisher from challenging the validity of any Licensed Trademarks.

4.3Publisher or Licensed Developer (as applicable) retains all right, title and interest in and to Licensed Developer Software, including Licensed Developer’s intellectual property rights therein and any names or other designations used as titles therefor, and nothing in this Agreement shall be construed to restrict the right of Licensed Developer to develop and/or the right of Publisher to publish products incorporating Licensed Developer Software alone (which do not contain or rely on Sony Materials and/or Sony Intellectual Property Rights and/or, subject to Council Directive 91/250/EEC, Confidential Information of Sony), and/or under such names or other designations, for any hardware platform or service other than PSP.

4.4Subject to the proviso to Clauses 4.1 and 4.2 above, Publisher shall, at the expense of SCEE, take all such steps as SCEE may reasonably require, including the execution of licences and obtaining registrations, to assist SCEE in maintaining the validity and enforceability of Sony Intellectual Property Rights.

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4.5Without prejudice to Clause 11, Publisher or SCEE (as applicable) shall promptly and fully notify the other in writing in the event that it discovers or otherwise becomes aware of any actual, threatened or suspected infringement of, or challenge to, any of the intellectual property or trademark rights of the other embodied in any of the Licensed Products, and of any claim of infringement or alleged infringement by the other of any Third Party Intellectual Property Rights, and shall at the request and expense of the other do all such things as may reasonably be required to assist the other in taking or resisting any proceedings in relation to any such infringement or claim.

5.Quality Standards

5.1Each Licensed Product, including without limitation the title and content thereof, and/or Publisher’s use of any of the Licensed Trademarks, shall be required to conform to the Specifications. Testing or verification for conformity to the Specifications shall be conducted by SCEE or, at Publisher’s election, by an independent external testing service (if and when such service becomes available).

5.2Publisher shall submit for testing for conformity to the Specifications such information and materials relating to the PSP format Software for each Licensed Product as shall be specified in the Specifications. Such Specifications shall be comparable with the specifications applied by Sony with respect to its own PSP format software products. SCEE acknowledges and agrees that such Specifications shall be of prospective application only and shall not be applied to any inventory units of the Licensed Products manufactured prior to, or in the active process of manufacture at the date of, the promulgation thereof by SCEE.

5.3For each Licensed Product, Publisher shall be responsible, at Publisher’s expense, for the origination of all Printed Materials, and for the manufacture and delivery to the manufacturer of such Licensed Product of all Printed Materials other than those to be set forth on the Licensed Product itself, all of which Printed Materials shall conform in all material respects to the Specifications. The Specifications referred to above shall be comparable with the specifications applied by Sony with respect to its own PSP format software products. SCEE acknowledges and agrees that such Specifications shall be of prospective application only and shall not be applied to any inventory units of the Licensed Products manufactured prior to, or in the active process of manufacture at the date of, the promulgation thereof. All materials to be submitted pursuant to this Clause
5.3shall be delivered by such means and in such form as shall be prescribed in the Specifications and at Publisher’s sole risk and expense. Publisher undertakes that the quality of such Printed Materials shall be of the same quality as that associated with high quality consumer products.

5.4SCEE (or, where applicable, an independent external testing service as aforesaid) will test or verify for conformity to the Specifications (as the case may be) all materials submitted by Publisher pursuant to Clause 5.2 and Clause 5.3. Where such testing or verification is conducted by SCEE, SCEE shall advise Publisher of the results of such testing or verification within the applicable of the timeframes specified in the Specifications. Where such testing or verification is conducted by such independent external testing service, such service shall advise Publisher of the results of such testing or verification within timeframes agreed between such service and Publisher (and SCEE shall have no responsibility or liability whatsoever arising from a failure by such service to meet such timeframes). If any of such materials (or any element(s) thereof) fail to conform to the Specifications, SCEE (or, where applicable, such independent external testing service) shall specify the reasons for such failure and state what revisions are required. After making the required revisions, Publisher may resubmit such materials in such revised form for re-testing or re-verification by SCEE (or, where applicable, such independent external testing

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service). The procedures described in this Clause 5.4 shall if necessary be repeated until all such materials for each Licensed Product shall expressly have been certified as conforming to the Specifications, such certification to be validly given only if in writing and signed by the duly authorised representative(s) of SCEE as specified in the Specifications (or, where applicable, by the duly authorised representative(s) of such independent external testing service). SCEE shall have no liability to Publisher for the accuracy or content (including translations and localisations) of Printed Materials (except only items required to be included in accordance with the Specifications) or in respect of costs incurred or irrevocably committed by Publisher as a result of any failure to conform to Specifications (even where certified for conformity) or in relation to, or to the use of, Printed Materials which shall not have been given a certificate of conformity by SCEE (or, where applicable, by such independent external testing service). No production units of any Licensed Product shall be manufactured, marketed, distributed or sold by, with the authority of or on behalf of, Publisher unless and until such a certificate of conformity of such Licensed Product shall first have been given by SCEE (or, where applicable, by such independent external testing service). No certificate of conformity from SCEE (or, where applicable, from such independent external testing service) of any element of the materials so submitted or resubmitted shall be deemed a certificate of conformity of any other element of such materials, nor shall any such certificate of conformity be deemed to constitute a waiver of any of SCEE’s rights under this Agreement.

The generality of the foregoing notwithstanding, in the event that Publisher wishes to contest a finding by SCEE of non- conformity to the Specifications as an alternate to making required revisions and resubmissions as above, or in the event that Publisher wishes to contest the outcome of SCEE’s product assessment process in relation to any specific product. Publisher may have recourse to the appeals process specified in the Specifications.

5.5Publisher shall not change in any material respect any of the materials for which a certificate of conformity shall have been given by SCEE (or, where applicable, by an independent external testing service) pursuant to Clause 5.4 (or, if applicable, pursuant to Clause 5.6) (or, alternately, which shall have been held to conform to the Specifications following recourse by Publisher to the appeals process specified in the Specifications). If any of the Licensed Products and/or related materials published by, with the authority of or on behalf of, Publisher fail to conform to the Specifications and the materials for which SCEE (or, where applicable, such independent external testing service) shall from time to time have given a certificate of conformity, then the provisions of Clause 14.2 shall apply.

5.6SCEE reserves the right to require that pre-production samples of all Advertising Materials shall be submitted by Publisher to SCEE or, at Publisher’s election, to an independent external testing service (if and when such service becomes available), [**] and in accordance with the procedure specified in the Specifications, for verification for conformity to the Specifications (including specifically, but without limitation, in relation to the usage of any of the Licensed Trademarks), prior to any actual production, use or distribution of any such items by, with the authority or on behalf of, Publisher. No such proposed Advertising Materials shall be produced, used or distributed directly or indirectly by Publisher without first obtaining a certificate of conformity to the Specifications. Where such verification is conducted by SCEE, SCEE shall advise Publisher of the results of such verification within the applicable of the timeframes specified in the Specifications. Where such verification is conducted by such independent external testing service, such service shall advise Publisher of the results of such verification within timeframes agreed between such service and Publisher (and SCEE shall have no responsibility or liability whatsoever arising from a failure by such service to meet such timeframes). If any such Advertising Materials (or any element(s) thereof) fail to conform to the Specifications, SCEE (or, where applicable, such independent external testing service) shall

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specify the reasons for such failure and state what revisions are required. After making the required revisions, Publisher may resubmit such materials in such revised form for re-verification by SCEE (or, where applicable, by such independent external testing service). The procedures described in this Clause 5.6 shall if necessary be repeated until all such Advertising Materials for each Licensed Product shall expressly have been certified as conforming to the Specifications, such certification to be validly given only if in writing and signed by the duly authorised representative(s) of SCEE as specified in the Specifications (or, where applicable, by the duly authorised representative(s) of such independent external testing service). SCEE shall have no liability to Publisher in respect of costs incurred or irrevocably committed by Publisher in relation to, or to the use of, Advertising Materials which shall not have been given a certificate of conformity by SCEE (or, where applicable, by such independent external testing service). No certificate of conformity from SCEE (or, where applicable, from such independent external testing service) of any element of Advertising Materials so submitted or resubmitted shall be deemed a certificate of conformity of any other element of such Advertising Materials, nor shall any such certificate of conformity be deemed to constitute a waiver of any of SCEE’s rights under this Agreement.

The generality of the foregoing notwithstanding, in the event that Publisher wishes to contest a finding of non-conformity to the Specifications by SCEE, and as an alternate to making required revisions and resubmissions as above, Publisher may have recourse to the appeals process specified in the Specifications.

Subject in each instance to the prior written consent of SCEE, Publisher may use such textual and/or pictorial advertising matter (if any) as may be created by, with the authority or on behalf of, Sony pertaining to the Sony Materials and/or to the Licensed Trademarks on such Advertising Materials as may, in Publisher’s judgement, promote the sale of Licensed Products within the Licensed Territory. Sony shall have the right to use Licensed Products and/or other materials relating to Publisher’s PSP format Software games in any advertising or promotion for PSP at Sony’s expense, subject to giving Publisher reasonable prior notice of such advertisement or promotion. Sony shall confer with Publisher regarding the text of any such advertisement.

5.7No Licensed Product may be published in any country of the Licensed Territory unless the Licensed Product itself and associated Printed Materials bear a consumer advisory age rating either: (i) as required by local law; or (ii) where no such local law obtains, as prescribed under the Pan European Games Information age rating system (“PEGI”) promulgated by the Interactive Software Federation of Europe. Each such rating shall be displayed as prescribed by local law or under PEGI as the case may be. Publisher shall also conform to local law or to the requirements of PEGI as the case may be in relation to the display of consumer advisory age ratings in Advertising Materials. No Licensed Product, nor any Printed Materials or Advertising Materials, may bear more than one consumer advisory age rating.

6.Manufacture of Licensed Products & Associated Materials

6.1Subject only to Article 6, Publisher acknowledges and agrees that it shall purchase Manufactured Materials only from an authorised manufacturing facility licensed by SCEE. SCEE shall have the right, but no obligation, to subcontract the whole or any part or phase of the production of any or all of the Manufactured Materials or any part(s) thereof.

6.2Promptly following the giving by SCEE (or, where applicable, by an independent external testing service as aforesaid) of a certificate of conformity to the Specifications (or, alternately, a holding of conformity to the Specifications following recourse by Publisher to the appeals process specified in the Specifications) for each Licensed Product pursuant to Clause 5.4, SCEE shall

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create (from one of the copies of the finally tested version of the PSP format Software as submitted by Publisher pursuant to Clause 5.2) an encrypted copy of such PSP format Software for transmission to the authorised manufacturing facility licensed by SCEE for the creation of the master UMD Disc (“Master UMD Disc”) from which all other copies of the Licensed Product are to be replicated in compliance with the Specifications effective at the time of replication. Where such certificate of conformity shall have been given by such an independent external testing service, then the copy of the finally tested version of the PSP format Software as submitted by Publisher pursuant to Clause 5.2 from which the Master UMD Disc is to be created shall be furnished to SCEE by such service. Publisher will retain duplicates of all such PSP format Software. SCEE shall not be liable for loss of or damage to any copies of the PSP format Software furnished to SCEE hereunder. There will be no technology exchange between Sony and Publisher under this Agreement. The encryption and mastering process being of a proprietary and commercially confidential nature, neither SCEE nor any manufacturing subcontractor of SCEE will under any circumstances release any Master UMD Discs or other in-process materials to Publisher. All such physical materials shall be and remain the sole property of Sony.

6.3Publisher shall be solely responsible for the delivery, direct to an authorised manufacturing facility licensed by SCEE and in accordance with Clause 6.4, of [**] of the number of sets of the Printed Materials (other than those set forth on the applicable Licensed Product itself) required to fulfil Publisher’s purchase order for Manufactured Materials of each PSP format Software game, which Printed Materials shall be in strict compliance with the Specifications. SCEE shall, at Publisher’s request, give Publisher all reasonable assistance in arranging the manufacture of Printed Materials to be used in conjunction with Licensed Products not manufactured in reliance on Article 6 through SCEE’s authorised manufacturing facility (if a Sony company), but SCEE shall have no responsibility with respect to pricing, delivery or any other related matter whatsoever in connection with such manufacture.

6.4Subject to the giving by SCEE of a certificate of conformity to the Specifications (or, alternately, a holding of conformity following recourse by Publisher to the appeals process specified in the Specifications) for the applicable PSP format Software and Printed Materials pursuant to Clause 5, and to the delivery to an authorised manufacturing facility licensed by SCEE of the materials to be delivered under Clause 6.3, the applicable authorised manufacturing facility licensed by SCEE will, [**] and as applicable, manufacture, assemble, package and deliver the Manufactured Materials and the Printed Materials in accordance with the terms and conditions set forth in this Clause 6 and such other conditions as Publisher and the applicable authorised manufacturing facility may agree. The delivery of the materials specified in Clause 6.3 shall be made in accordance with the timetable for such delivery specified in the Specifications.

6.5Publisher shall issue to the applicable authorised manufacturing facility licensed by SCEE purchase order(s) via SCEE’s Electronic Order System (or otherwise as specified by SCEE from time to time) in accordance with, and in compliance with the timetable specified in, the Specifications. No such order shall be issued unless and until all necessary certificates of conformity shall have been given (or, alternately, there shall have been a holding of conformity following recourse by Publisher to the appeals process specified in the Specifications) pursuant to Clause 5. Each such order shall reference Publisher authorisation number and purchase order reference number, specify quantities of Licensed Products by title by pack sku (in multiples of the minimum box shipment advised from time to time by the authorised manufacturing facility licensed by SCEE), state requested ex-factory delivery date and all packaging information together with such other information as SCEE shall reasonably require and shall be for not less than the applicable minimum order quantity as specified from time to time by SCEE or the

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applicable authorised manufacturing facility licensed by SCEE. All such purchase orders shall be subject to acceptance by the applicable authorised manufacturing facility licensed by SCEE (and approval by SCEE), which acceptance will be advised to Publisher not more than [**] following delivery in accordance with Clause 6.4 of the materials required to be delivered under Clauses 6.2 and 6.3. The applicable authorised manufacturing facility shall use all reasonable endeavours, subject to available manufacturing capacity, to fulfil Publisher’s purchase orders by Publisher’s requested ex-factory delivery date but does not in any event guarantee so to do. Publisher shall have no right to cancel or reschedule any purchase order or reorder (or any portion thereof) for any Licensed Product unless the parties shall first have reached mutual agreement as to Publisher’s financial liability with respect to any desired cancellation or rescheduling of any such purchase order or reorder (or any portion thereof).

6.6Subject only to the provisions of Clause 6.3 in relation to Printed Materials, neither SCEE nor any authorised manufacturing facility licensed by SCEE shall be under any obligation to store finished units of Manufactured Materials or of associated Printed Materials beyond the actual ex-factory delivery date thereof. Delivery of Manufactured Materials shall be made ex- factory the applicable authorised manufacturing facility licensed by SCEE in the Licensed Territory. All risk of loss or damage in transit to any and all Manufactured Materials manufactured pursuant to Publisher’s orders shall pass to Publisher forthwith upon first handling by Publisher’s carrier.

6.7Publisher must advise the applicable authorised manufacturing facility in writing where any finished units of such Manufactured Materials fail to conform to the Specifications and/or any description(s) contained in this Agreement. Publisher and the applicable authorised manufacturing facility shall agree the terms, if any, for any rejection, rectification or remedy with respect to such units.

6.8In no circumstances shall SCEE or its authorised manufacturing facility treat any of Publisher’s Licensed Products in any way more or less favourably, in terms of production turnaround times or otherwise, than the Licensed Products of any other Licensed Publisher of SCEE or than PSP format software games published by SCEE itself.

7.Platform Charge

7.1The all-in Platform Charge for finished units of Manufactured Materials in respect of which the applicable authorised manufacturing facility licensed by SCEE accepts Publisher’s purchase order in accordance with Clause 6.5 shall be as specified in Schedule 2 (but subject to adjustment as therein provided) and shall be paid to the applicable authorised manufacturing facility licensed by SCEE. The all-in Platform Charge reflects monies due to SCEE in respect of each unit manufactured and the raw materials costs and production services provided by the applicable manufacturing facility licensed by SCEE for each such unit. Such Platform Charge shall be subject to change by SCEE at any time upon reasonable notice to Publisher and SCEE shall advise Publisher of such changes; provided, however, that such Platform Charge shall not be changed with respect to any units of Manufactured Materials which are the subject of an effective purchase order or reorder but which have not yet been delivered by the applicable authorised manufacturing facility licensed by SCEE. Such Platform Charge for finished units of Manufactured Materials is exclusive of any value-added or similar sales tax, customs and excise duties and other similar taxes or duties, which the applicable authorised manufacturing facility licensed by SCEE may be required to collect or pay as a consequence of the sale or delivery of finished units of Manufactured Materials. Publisher shall be solely responsible for the payment or reimbursement of any such taxes or duties, and other such charges or assessments applicable to the sale and/or purchase of finished units of Manufactured Materials.

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The Platform Charge for products developed utilising Sony Materials and/or Sony Intellectual Property Rights and/or, subject to Council Directive 91/250/EEC, Confidential Information of Sony, but manufactured in reliance on Article 6, shall be the otherwise applicable Platform Charge less only such sum as represents from time to time the costs of raw materials and for production services (including for utilisation of Sony’s proprietary Disc Mastering technology) for the products concerned whichwould otherwise have been deducted from SCEE’s receipts from its authorised manufacturing facility (“the Article 6 Platform Charge”). If Publisher has products so manufactured in reliance on Article 6, then Publisher shall furnish SCEE, within [**]: (i) a written reporting of the number of inventory units (by product title) of products so manufactured during such [**]; (ii) an external auditor’s certificate (or similar independent certificate reasonably acceptable to SCEE) confirming the completeness and accuracy of such reporting; (iii) Publisher’s remittance for the Article 6 Platform Charge multiplied by the number of inventory units reflected in such reporting. Any failure fully and promptly to comply with the foregoing reporting and payment obligations shall constitute a breach of this Agreement not capable of remedy, entitling SCEE forthwith to terminate the Term pursuant to Clause 13.1(i); and upon termination by SCEE for such cause, the provisions of Clause 14.2 shall come into effect.

SCEE shall upon reasonable written request provide Publisher with details of the aforementioned costs of raw materials and production services if Publisher has legitimately exercised its rights under Article 6 or genuinely intends to exercise and rely upon such rights. However, SCEE reserves the right to require Publisher to execute a separate Non-Disclosure Agreement before making such information available.

7.2No costs incurred in the development, manufacture, marketing, sale and/or distribution of Licensed Products and/or associated materials shall be deducted from any Platform Charge payable to the applicable authorised manufacturing facility licensed by SCEE hereunder. Similarly, there shall be no deduction from the Platform Charge otherwise payable to the applicable authorised manufacturing facility licensed by SCEE hereunder as a result of any uncollectable accounts owed to Publisher, or for any credits, discounts, allowances or returns which Publisher may credit or otherwise grant to any third party customer in respect of any units of Licensed Products and/or associated materials, or for any taxes, fees, assessments, or expenses of any kind which may be incurred by Publisher in connection with its sale and/or distribution of any units of Licensed Products and/or associated materials, and/or arising with respect to the payment of Platform Charge hereunder. Publisher shall furnish to the applicable authorised manufacturing facility licensed by SCEE official tax receipts or other such documentary evidence issued by the applicable tax authorities sufficient to substantiate the fact of the deduction of any withholding taxes and/or other such assessments which may be imposed by any governmental authority with respect to such payments of Platform Charge hereunder and the amount of each such deduction.

7.3Publisher shall effect payment for the Platform Charge specified in Clause 7.1 for the finished units of Manufactured Materials the subject matter of each purchase order issued pursuant to Clause 6.5 in accordance with the Specifications. SCEE hereby confirms that in respect of each purchase order, the applicable authorised manufacturing facility licensed by SCEE is entitled to collect on behalf of SCEE the proportion of the Platform Charge due to SCEE after deduction of the cost of raw materials and production services in respect of Manufactured Materials. Each delivery of Manufactured Materials to Publisher shall constitute a separate sale obligating Publisher to pay therefor, whether said delivery be whole or partial fulfilment of any order. No claim for credit due to shortage of Manufactured Materials as delivered to carrier will be allowed unless it is made within [**] from the date of receipt at Publisher’s receiving

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destination. Title to Manufactured Materials the subject of each such purchase order shall pass to Publisher only upon payment in full of the Platform Charge due in respect thereof. The receipt and deposit by SCEE of monies in accordance with this Agreement shall be without prejudice to any rights or remedies of SCEE and shall not restrict or prevent SCEE from thereafter successfully challenging the basis for calculation and/or the accuracy of such payment. SCEE reserves the right, upon reasonable notice to Publisher, to require that such payments due to SCEE shall be made to such other Sony entity as SCEE may designate from time to time.

7.4SCEE may, subject to reasonable prior notice to Publisher vary the payment process set out in this Clause 7, including but not limited to changing the recipient of the Platform Charge in respect of Manufactured Materials.

8.Marketing  & Distribution

Publisher shall, [**], diligently market, distribute and sell Licensed Products throughout (but only in) the Licensed Territory, and shall use all reasonable efforts consistent with its best business judgement to stimulate demand therefore in the Licensed Territory and to supply any resulting demand. Publisher shall not market, distribute or sell Licensed Products outside the Licensed Territory or to any person, firm, corporation or entity having its place of business, or to any purchasing agency located, outside the Licensed Territory.
Publisher shall use all reasonable efforts consistent with its best business judgement to protect Licensed Products from and against illegal reproduction and/or copying by end users or by any other persons or entities. Such methods of protection may include, without limitation, markings or insignia providing identification of authenticity and packaging seals as may be specified in the Specifications. SCEE shall be entitled, at SCEE’s sole cost and expense, to manufacture or have manufactured up to [**] additional units of Manufactured Materials (or such greater number of additional units as shall be agreed by Publisher, such agreement not unreasonably to be withheld or delayed) for each PSP format Software game (and to purchase from Publisher, at a price equal to the actual cost thereof to Publisher, a corresponding number of units of Printed Materials for each such PSP format Software game), for the purposes of or in connection with the marketing and promotion of PSP; provided however that SCEE shall not directly or indirectly resell any such units of Manufactured Materials (and, if applicable, of Printed Materials) within the Licensed Territory without Publisher’s prior written consent. Further, SCEE shall be entitled to utilise Publisher’s name and/or logo and the audio-visual content of, and/or the Printed Materials for, PSP format Software games (not to exclude the likenesses of any recognisable talent) for the purposes of or in connection with such marketing and promotion.

9.Confidentiality

9.1All the terms and provisions of the CNDA(PSP) shall apply to Confidential Information of Sony and, if and to the extent applicable, Confidential Information of Publisher.

9.2Where Confidential Information of Publisher is not protected by the CNDA(PSP), SCEE shall hold the same in confidence and shall take all reasonable steps necessary to preserve such confidentiality. Except as may expressly be authorised by Publisher, SCEE shall not at any time, directly or indirectly: (i) disclose any Confidential Information of Publisher to any person other than a Sony employee who needs to know or have access to such information for the purposes of this Agreement, and only to the extent necessary for such purposes; (ii) except for the purposes of this Agreement, duplicate or use the Confidential Information of Publisher for any other purpose whatsoever; or (iii) remove any copyright notice, trademark notice and/or other proprietary legend set forth on or contained within any of the Confidential Information of Publisher.

9.3The provisions of Clause 9.2 hereof shall not apply to any Confidential Information of Publisher which: (i) has become part of information in the public domain through no fault of SCEE; (ii) was

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known to SCEE prior to the disclosure thereof by Publisher; (iii) properly comes into the possession of SCEE from a third party which is not under any obligation to maintain the confidentiality of such information. SCEE may disclose Confidential Information of Publisher pursuant to a judicial or governmental order provided that SCEE promptly advises Publisher in writing prior to any such disclosure so that Publisher may seek other legal remedies to maintain the confidentiality of such Confidential Information of Publisher, and SCEE shall comply with any applicable protective order or equivalent.

9.4Unless and until a public announcement regarding this Agreement shall have been made by Sony (or SCEE shall otherwise have agreed in writing), the fact that the parties have entered into this Agreement shall be Confidential Information of Sony and shall be treated in all respects accordingly. The content of, and the timing and method of the making of, any such public announcement shall be determined by SCEE in its best business judgement. However, SCEE will give reasonable consideration to any notice from Publisher requesting that no such public announcement be made at or prior to a particular time or at all.

10.Warranties

10.1SCEE represents and warrants solely for the benefit of Publisher that SCEE has the right, power and authority to enter into, and fully to perform its obligations under, this Agreement.

10.2SCEE warrants that units of the UMDs comprising Licensed Products manufactured by the authorised manufacturing facility licensed by SCEE for Publisher pursuant to Clause 6 hereof shall be free from defects in materials and workmanship under normal use and service at time of delivery in accordance with Clause 6.6. The sole obligation of SCEE under this warranty shall be, for a period of [**] from the date of delivery of such UMDs in accordance with Clause 6.6, at SCEE’s election, either (i) to replace such defective UMDs or (ii) to issue credit for, or to refund to Publisher the Platform Charge of such defective UMDs and to reimburse Publisher its reasonable return shipping costs. Such warranty is the only warranty applicable to Licensed Products manufactured by the authorised manufacturing facility licensed by SCEE for Publisher pursuant to Clause 6. This warranty shall not apply to damage resulting from accident, fair wear and tear, wilful damage, alteration, negligence, abnormal conditions of use, failure to follow directions for use (whether given in instruction manuals or otherwise howsoever) or misuse of Licensed Products, or to UMDs comprising less than [**] in the aggregate of the total number of Licensed Products manufactured by the authorised manufacturing facility licensed by SCEE for Publisher per purchase order of any PSP format Software game. If, during such [**] period, defects appear as aforesaid, Publisher shall
notify SCEE and, upon request by SCEE (but not otherwise), return such defective UMDs, with a written description of the defect claimed, to such location as SCEE shall designate, SCEE shall not accept for replacement, credit or refund as aforesaid any Licensed Products except factory defective UMDs (i.e. UMDS that are not free from defects in materials and workmanship under normal use and service). All returns of defective UMDs shall be subject to prior written authorisation by SCEE, not unreasonably to be withheld. If no defect exists or the defect is not such as to be covered under the above warranty, Publisher shall reimburse SCEE for expenses incurred in processing and analysing the UMDs.

10.3Publisher represents, warrants, covenants and agrees that: (i) Publisher has the right, power and authority to enter into, and fully to perform its obligations under, this Agreement; (ii) the making of this Agreement by Publisher does not violate any separate agreement, rights or obligations existing between Publisher and any other person, firm, corporation or entity, and, throughout the Term, Publisher shall not make any separate agreement with any person or entity which is inconsistent with any of the provisions hereof; (iii) both Licensed Developer Software and, to the

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extent not comprised of any software provided by SCEE, PSP format Software, and any name, designation or title used in conjunction therewith, shall be free from any valid third party claim of infringement of any Third Party Intellectual Property Rights; (iv) there is no litigation, proceeding or claim pending or threatened against Publisher or any subsidiary or affiliate of Publisher which may materially affect Publisher’s rights in and to Licensed Developer Software, the names, designations or titles used in conjunction therewith, the works and performances embodied therein and/or the copyrights pertaining thereto;
(v) Publisher shall have made or shall make any and all payments required to be made to any person, firm, corporation or other entity, or to any body or group representing authors or participants in the production of the works or performances embodied in Licensed Developer Software and PSP format Software, or to publishers or other persons having legal or contractual rights of any kind to participate in any income arising in respect of the exploitation of such works or performances; (vi) neither Publisher nor any subsidiary or affiliate of Publisher shall make any representation or give any warranty to any person or entity expressly or impliedly on Sony’s behalf, or to the effect that Licensed Products are connected in any way with Sony (other than that Licensed Products have been developed, marketed, manufactured, sold and/or distributed under licence from Sony); (vii) each Licensed Product shall be marketed, sold and distributed in an ethical manner and in accordance with all applicable laws and regulations; and (viii) Publisher’s policies and practices with respect to the marketing, sale and/or distribution of Licensed Products shall in no manner reflect adversely upon the name, reputation or goodwill of Sony.

10.4Further, Publisher represents, warrants, covenants and agrees that neither Publisher nor any parent company, subsidiary or affiliate of Publisher shall during the Term, whether for itself or for the benefit of any other person, firm, corporation or entity, whether by itself or by its officers, employees or agents, directly or indirectly, induce or seek to induce, on an individually targeted basis, the employment of, or the engagement of the services of, any Relevant Employee. For these purposes “Relevant Employee” shall mean and include any employee of SCEE or of any subsidiary of SCEE (or any of their subsidiaries or branch offices outside the United Kingdom), the services of which employee are (a) specifically engaged in product development (or directly related) functions or (b) otherwise reasonably deemed by his/her employer to be of material importance to the protection of its legitimate business interests, and with which employee Publisher (or any parent company, subsidiary or affiliate of Publisher) shall have had contact or dealings during the Term. The foregoing provisions shall continue to apply for a period of [**] following expiry or earlier termination of the Term and are hereby deemed substituted for any corresponding provisions in any agreement(s) previously entered into between the parties hereto in relation to PSP and/or to Sony’s “PlayStation 2” predecessor computer entertainment system.

11.Indemnities

11.1SCEE shall indemnify and hold Publisher harmless from and against any and all claims, losses, liabilities, damages, expenses and costs, including without limitation reasonable fees for lawyers, expert witnesses and litigation costs, and including costs incurred in the settlement or avoidance of any such claim, which result from or are in connection with a breach of any of the warranties provided by SCEE herein; provided however that Publisher shall give prompt written notice to SCEE of the assertion of any such claim, and provided further that SCEE shall have the right to select counsel and control the defence and/or settlement thereof, subject to the right of Publisher to participate in any such action or proceeding at its own expense with counsel of its own choosing. SCEE shall have the exclusive right, at its discretion, to commence and prosecute at its own expense any lawsuit or to take such other action with respect to such matters as shall be deemed appropriate by SCEE. Publisher shall provide SCEE, at no expense to Publisher, reasonable assistance and co-operation concerning any such matter. Publisher shall not agree to the compromise, settlement or abandonment of any such claim, action or proceeding without SCEE’s prior written consent.

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11.2Publisher shall indemnify and hold SCEE harmless from and against any and all claims, losses, liabilities, damages, expenses and costs, including without limitation reasonable fees for lawyers, expert witnesses and litigation costs, and including costs incurred in the settlement or avoidance of any such claim, which result from or are in connection with (i) a breach of any of the warranties provided by Publisher herein or any breach of Publisher’s confidentiality obligations as referred to in
Clause 9.1 hereof, or (ii) any claim of infringement or alleged infringement of any Third Party Intellectual Property Rights with respect to Licensed Developer Software, or (iii) any claim of or in connection with any injury (including death) or property damage, by whomsoever such claim is made, arising (in whole or in part) out of the manufacture, sale and/or use of any of the Manufactured Materials unless resulting from the proven negligence of Sony; provided however that SCEE shall give prompt written notice to Publisher of the assertion of any such claim, and provided further that Publisher shall have the right to select counsel and control the defence and/or settlement thereof, subject to the right of SCEE to participate in any such action or proceeding at its own expense with counsel of its own choosing. Publisher shall have the exclusive right, at its discretion, to commence and/or prosecute at its own expense any lawsuit or to take such other action with respect to such matter as shall be deemed appropriate by Publisher. SCEE shall provide Publisher, at no expense to SCEE, reasonable assistance and co-operation concerning any such matter. SCEE shall not agree to the compromise, settlement or abandonment of any such claim, action or proceeding without Publisher’s prior written consent.

12.Limitations of Liability

12.1In no event shall Sony or its suppliers be liable for loss of revenue, loss of actual or prospective profits, loss of contracts, loss of anticipated savings, loss of business opportunity, reputation or goodwill or loss of, damage to or corruption of data (whether such loss or damage is direct, indirect special, incidental or consequential) arising out of or in connection with this Agreement or any collateral contract (including without limitation the breach of this Agreement by SCEE), whether known, foreseen or foreseeable and whether under theory of contract, tort (including negligence), indemnity, product liability or otherwise.

12.2In no event shall Sony or its suppliers be liable for any indirect, special, incidental or consequential loss or damage of any kind arising out of or in connection with this Agreement or any collateral contract (including without limitation the breach of this Agreement by SCEE), whether known, foreseen or foreseeable and whether under theory of contract, tort (including negligence), indemnity, product liability or otherwise.

12.3Publisher acknowledges and agrees that no representations were made prior to the entering into of this Agreement and that, in entering into this Agreement, it does not rely on any statement, representation, warranty or understanding (whether negligently or innocently made) of any person (whether party to this Agreement or not) other than as expressly set out in this Agreement. Publisher shall have no remedy in respect of any representation (whether written or oral) made to it upon which it relied in entering into this Agreement and Sony shall have no liability to Publisher other than pursuant to the express terms of this Agreement.

12.4Except as expressly set forth herein, no Sony entity, nor any of their respective directors, officers, employees or agents, shall bear any risk, or have any responsibility or liability, of any kind to Publisher or to any third parties with respect to the functionality and/or performance of Licensed Products.

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12.5In no event shall Sony’s liability arising under or in connection with this Agreement, or any collateral contract, exceed [**] within the [**] to the date of the first occurrence of the event or circumstances giving rise to such liability.

12.6In no event shall Publisher be liable to SCEE for loss of revenue, loss of actual or prospective profits, loss of contracts, loss of anticipated savings, loss of business opportunity, reputation or goodwill or loss of, damage to or corruption of data (whether such loss or damage is direct, indirect, special, incidental or consequential) arising out of or in connection with this Agreement or any collateral contract (including without limitation the breach of this Agreement by Publisher), whether known, foreseen or foreseeable and whether under theory of contract, tort (including negligence), indemnity, product liability or otherwise, provided that Publisher expressly agrees that such limitations shall not apply to damages resulting from Publisher’s breach of Clauses 2, 3, 4, 7, 9 or 11.2 of this Agreement.

12.7    [**]

12.8        Nothing in this Agreement shall exclude or limit Sony’s liability in relation to claims arising from deceit, the injury or death of any person resulting from the proven negligence of Sony or any other liability which may not be excluded or limited by applicable law.

13.Termination by SCEE

13.1SCEE shall have the right forthwith to terminate this Agreement by written notice to Publisher at any time after the occurrence of any of the following events or circumstances: (i) any material breach of Publisher’s obligations under this Agreement or the CNDA(PSP) (or, if Publisher shall also have executed a PlayStation Non-Disclosure Agreement and/or PlayStation 2 Confidentiality & Non-Disclosure Agreement which shall have been breached by Publisher, or a PlayStation Licensed Developer Agreement, a PlayStation Licensed Publisher Agreement, a PlayStation 2 Tools & Materials Loan Agreement, a PlayStation 2 Licensed Developer Agreement, a PlayStation 2 Licensed Publisher Agreement, a PSP Tools & Materials Loan Agreement, and/or a PSP Licensed Developer Agreement with SCEE, or a PlayStation, PlayStation 2 or PSP non-disclosure, licensed developer, development system or licensed publisher agreement (or equivalent) with an Affiliate of SCEE, which shall have been terminated for breach by SCEE or by such party) which breach, if capable of remedy, shall not have been corrected or cured in full within [**] following notice from SCEE specifying and requiring the correction or cure of such breach, or any repetition of a prior material breach of any such obligation, whether or not capable of remedy; (ii) any refusal or failure by Publisher to effect payment of Platform Charge, promptly in accordance with Clauses 7.1 or 7.3 or at all, or a statement that Publisher is or will be unable to pay, any sum(s) due hereunder, or Publisher being unable to pay its debts generally as the same fall due; (iii) Publisher’s filing of an application for, or consenting to or directing the appointment of, or the taking of possession by, a receiver, administrator, custodian, trustee or liquidator (or the equivalent of any of the foregoing under the laws of any jurisdiction) of any of Publisher’s property (whether tangible or intangible and wherever located), assets and/or

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undertaking; (iv) the making by Publisher of a general assignment for the benefit of creditors; (v) an adjudication in any jurisdiction that Publisher is a bankrupt or insolvent; (vi) the commencing by Publisher of, or Publisher’s intention to commence, a voluntary case under applicable bankruptcy laws of any jurisdiction; (vii) the filing by Publisher of, or Publisher’s intention to file, a petition seeking to take advantage of any other law(s) of any jurisdiction providing for the relief of debtors; (viii) Publisher’s acquiescence in, intention to acquiesce in, or failure to have dismissed within [**] any petition filed against it in any involuntary case brought pursuant to the bankruptcy or other law(s) of any jurisdiction referred to in (vi) and (vii) above; (ix) a controlling partnership or equity interest [or any such interest (other than an acquisition of less than [**], in the case of a transfer to any party which (a) shall previously have executed a PlayStation Non-Disclosure Agreement, a PlayStation 2 Confidentiality & Non-Disclosure Agreement or a PSP Confidentiality & Non-Disclosure Agreement which shall have been breached by such party, or a PlayStation Licensed Developer Agreement, a PlayStation Licensed Publisher Agreement, a PlayStation 2 Tools and Materials Loan Agreement, a PlayStation 2 Licensed Developer Agreement, a PlayStation 2 Licensed Publisher Agreement, a PSP Tools & Materials Loan Agreement, a PSP Licensed Developer Agreement or a PSP Licensed Publisher Agreement, or a PlayStation, PlayStation 2 or PSP non-disclosure, licensed developer, development system or licensed publisher agreement (or equivalent) with an Affiliate of SCEE, which shall have been terminated for breach by SCEE or by such party, or (b) is, or which directly or indirectly holds or acquires a partnership or equity interest in, the developer of (or other owner of intellectual property rights in) any interactive hardware device or product which is or will be directly or indirectly competitive with PSP, or (c) is in litigation with Sony concerning any proprietary technology, trade secrets and/or intellectual property matter(s) and/or has challenged the validity of any Sony Intellectual Property Rights] in Publisher or in all or substantially all of Publisher’s property (whether tangible or intangible), assets and/or undertaking, being acquired, directly or indirectly, by any person, firm, corporation or other entity; (x) Publisher enters into any third party business relationship pursuant to which Publisher makes a material contribution to the development of the core components of any interactive hardware device or product which is or will be directly or indirectly competitive with PSP, or if Publisher directly or indirectly holds or acquires a partnership or equity interest (other than a holding or acquisition of less than [**] in, or otherwise forms a strategic commercial relationship with, any third party firm, corporation or other entity which has developed or during the Term develops (or which owns or during the Term acquires ownership of intellectual property rights in) any such device or product; (xi) Publisher failing to submit materials relating to any new PSP format Software in accordance with Clause 5.2, and/or failing to issue any purchase orders for Manufactured Materials in accordance with Clause 6.5, during any period of [**]; (xii) Publisher (or any parent company, subsidiary or affiliate of Publisher) being in litigation with Sony concerning any proprietary technology, trade secrets and/or intellectual property matter(s) and/or challenging the validity of any Sony Intellectual Property Rights; or (xiii) Publisher or any of its officers or employees engaging in so-called “hacking” of any PSP format software or in activities which facilitate the same by any third party. As used in this Clause 13.1, “controlling interest” means (i) in relation to a body corporate, the power of the holder of such interest to secure - (a) by means of the holding of shares or the possession of voting power in, or in relation to, that or any other body corporate or (b) by virtue of any powers conferred by the Articles of Association or other document regulating that or any other body corporate - that the affairs of such body corporate be conducted in accordance with the wishes of the holder of such interest, and (ii) in relation to a partnership, the right to a share of more than [**] 

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Forthwith upon such occurrence, Publisher shall notify SCEE of the occurrence of any of the events or circumstances specified in (ii) to (x) or (xiii) above; and Publisher’s failure so to do shall be a material breach of this Agreement not capable of remedy. In the event of termination by SCEE pursuant to Clause 13.1 (xiii) SCEE shall have the right also to terminate any prior PlayStation agreements between SCEE and Publisher.

13.2Further, SCEE shall have the right by written notice to Publisher forthwith to terminate the licences and related rights herein granted to Publisher in relation to any PSP format Software at any time after the occurrence of any of the following events: (i) any failure by Publisher to submit to SCEE the materials required to be submitted under Clauses 5.2 and 5.3 (or, if applicable, under Clause 5.6) in the form and manner and in conformity with the standards and specifications therein prescribed; and (ii) any failure by Publisher promptly to notify SCEE in writing of any material change to any of the materials approved by SCEE pursuant to Clause 5.4 (or, if applicable, pursuant to Clause 5.6); provided however that SCEE shall not be entitled to exercise such right of termination if Publisher’s failure under (i) above is directly caused by SCEE’s failure to comply with any of its material obligations expressly set forth herein.

14.Effect of Expiration or Termination

14.1Notwithstanding the giving of notice to terminate the Term pursuant to Clause 1.19, Publisher shall be entitled to continue to publish Licensed Products comprising PSP format Software games the development of which shall have been approved prior to or during the Term hereof by SCEE (or by an Affiliate of SCEE) pursuant to the applicable LDAP, and to use the Licensed Trademarks strictly, only and directly in connection with such publication, until the expiration of the Term or, if later, until [**]. Upon expiration of the Term or, if applicable, such extended period for publishing Licensed Products, Publisher may sell off existing inventories of Licensed Products relating to the applicable PSP format Software games, on a non-exclusive basis, for a period of [**]; provided always that such inventory thereof shall not have been manufactured solely or principally for sale within such sell-off period.

14.2However, upon the exercising by SCEE of its right of termination, either of this Agreement pursuant to Clauses 13.1(i) to (viii), (xii) or (xiii) or in relation to any PSP format Software pursuant to Clause 13.2, all rights, licences and privileges licensed or otherwise granted to Publisher hereunder, either generally or in relation to such PSP format Software (as applicable), shall forthwith and without further formality revert absolutely to SCEE and Publisher shall forthwith cease and desist from any further use of the Sony Materials, any Sony Intellectual Property Rights related thereto and the Licensed Trademarks, and, subject to Clause 14.3, shall have no further right to continue the marketing, sale and/or distribution of any units of Licensed Product or of any units of Licensed Product derived from such PSP format Software (as applicable).

14.3In the event of termination by SCEE pursuant to Clause 13.1(ix), (x) or (xi) or by Publisher pursuant to Clause 25, Publisher may sell off then unsold units of Licensed Product(s), for a period of [**]; provided always that such inventory thereof shall not have been manufactured solely or principally for sale within such sell-off period. Subsequent to the expiry of such [**] sell-off period, or in the event of termination by SCEE pursuant to Clauses 13.1(i) to (viii), (xii) or (xiii) or Clause 13.2, any and all units of Licensed Products or the applicable Licensed Products (as the case may be) remaining in Publisher’s inventory and/or under its control shall be destroyed by Publisher within [**] following such expiry or effective date of

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termination. Within [**], Publisher shall furnish SCEE an itemised statement, certified accurate by a duly authorised officer, partner or other representative (as applicable) of Publisher, specifying the number of then unsold units of Licensed Product(s) to which such termination applies, on a PSP format Software game-by-game basis, which remain in its inventory and/or under its control at such date, confirming the number of units of Licensed Products destroyed, on a PSP format Software game-by- game basis, and indicating the location and date of such destruction and the disposition of the remains of such destroyed materials. SCEE shall be entitled to conduct a physical inspection of Publisher’s inventory during normal business hours in order to ascertain or verify such inventory and/or statement.

14.4Upon termination of the Term by SCEE pursuant to Clause 13.1, Publisher shall forthwith deliver up to SCEE (or, if so requested by SCEE in writing, destroy and promptly furnish SCEE a certificate of such destruction signed by a duly authorised officer, partner or other representative (as applicable) of Publisher) all Sony Materials, and any Confidential Information of Sony of which Publisher shall have become apprised and which has been reduced to tangible or written form, and any and all copies thereof then in the possession, custody or control of Publisher.

14.5SCEE shall be under no obligation to renew or extend this Agreement notwithstanding any actions taken by either of the parties prior to its expiration or earlier termination. In the event of termination pursuant to Clauses 13.1 or 13.2, no part of any payment(s) whatsoever theretofore made to SCEE hereunder (or, if Publisher shall also have executed a LDAP, thereunder) shall be owed or repayable to Publisher, and nor shall either party be liable to the other for any damages (whether direct, consequential or incidental, and including without limitation any expenditures, loss of profits or prospective profits) sustained or arising out of, or alleged to have been sustained or to have arisen out of, such expiration or earlier termination. However, the expiration or earlier termination of this Agreement shall not excuse either party from any prior breach of any of the terms and provisions of this Agreement or from any obligations surviving such expiration or earlier termination, and full legal and equitable remedies shall remain available for any breach or threatened breach of this Agreement or of any obligations arising therefrom.

14.6The expiration or earlier termination of this Agreement (whether by SCEE pursuant to Clause 13 or otherwise howsoever) shall be without prejudice to any and all rights and remedies which either party may then or subsequently have against the other party.

15.Notices

15.1All notices under this Agreement shall be in writing and shall be given by courier or other personal delivery, by registered or certified mail, by recognised international courier service or by facsimile transmission (with an immediate confirmation copy by regular mail or any of the methods specified above) at the appropriate address hereinbefore specified or at a substitute address designated by notice by the party concerned (and in the case of notices to SCEE shall be directed to its Senior Vice President, Third Party & Business Affairs or such other Sony representative as shall from time to time be designated by notice by SCEE). Notices given other than by facsimile transmission shall be deemed given and effective when delivered. Notices given by facsimile transmission shall be deemed given only upon receipt of confirmation copy as aforesaid but, upon such receipt, shall be deemed effective as of the date of transmission.

15.2Whenever Publisher is required to obtain the authorisation, consent or approval of SCEE, Publisher shall request the same by notice to SCEE as aforesaid, and with a copy under separate cover to its Director of Third Party Relations or such other Sony representative as shall from time to time be designated by notice to Publisher. Such authorisation, consent or approval shall not be deemed to be granted unless and until SCEE shall have given a written affirmative response to each request therefor and shall in no event be implied or inferred from any delay or failure of SCEE to give such or any response.

20

16.Force Majeure

Neither SCEE nor Publisher shall be liable for any loss or damage or be deemed to be in breach of this Agreement if its failure to perform, or failure to cure any breach of, its obligations under this Agreement results from any events or circumstances beyond its reasonable control, including without limitation any natural disaster, fire, flood, earthquake or other act of God, inevitable accidents, lockout, strike or other labour dispute, riot or civil commotion, act of public enemy, enactment, rule, order or act of any government or governmental authority, failure of technical facilities, or failure or delay of transportation facilities.

17.Relationship of the Parties

The relationship hereunder between SCEE and Publisher respectively is that of licensor and licensee. Publisher is an independent contractor and shall not in any respect act as or be deemed to be the legal representative, agent, joint venturer, partner or employee of SCEE for any purpose whatsoever. Neither party shall have any right or authority to assume or create any obligations of any kind or to make any representation or warranty (express or implied) on behalf of the other party or to bind the other party in any respect whatsoever.

18.        Assignability

SCEE has entered into this Agreement based on the particular reputation, capabilities and experience of Publisher and of its officers, directors and employees. Accordingly, Publisher may not assign, pledge or otherwise dispose of this Agreement or of any of its rights hereunder, nor delegate or otherwise transfer any of its obligations hereunder, to any third party unless the prior written consent of SCEE shall first have been obtained in each case. Any attempted or purported assignment, pledge, delegation or other disposition in contravention of this Clause 18 shall be null and void and a material breach of this Agreement not capable of remedy, SCEE shall be entitled, without the consent of Publisher, to assign its rights and obligations hereunder to any corporation or other entity in which Sony Corporation (or any successor in interest thereto) holds a controlling interest (as defined in Clause 13.1), whether directly or indirectly. Subject to the foregoing, this Agreement shall enure to the benefit of the parties and their respective successors and permitted assigns.

Save as expressly provided in this Agreement and save that Sony may enforce the terms of Clauses 2, 3, 4, 5.6, 6.2, 7, 9, 10, 11, 12, 14, 38, 20, 21, 22, 23, 24, 25 and 27 of this Agreement, a person who is not party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement. This provision does not affect any right or remedy of any person which exists or is available otherwise than pursuant to such Act.

19.Compliance with Applicable Laws

The parties shall at all times comply with all applicable regulations and orders of their respective countries and all conventions and treaties to which their countries are party or relating to or in any way affecting this Agreement and the performance by the parties of this Agreement. Each party, at its own expense, shall negotiate and obtain any approval, licence or permit required for the performance of its obligations hereunder, and shall declare, record or take such steps as may be necessary to render this Agreement binding, including without limitation any required filing of this Agreement with any appropriate governmental authorities.

21

20.Governing  Law

This Agreement shall be governed by, construed and interpreted in accordance with English Law, without giving effect to the conflict of laws principles thereof. The parties irrevocably agree for the exclusive benefit of SCEE that the English Courts shall have jurisdiction to adjudicate any proceeding, suit or action arising out of or in connection with this Agreement. However, nothing contained in this Clause 20 shall limit the right of SCEE to take any such proceeding, suit or action against Publisher in any other court of competent jurisdiction, nor shall the taking of any such proceeding, suit or action in one or more jurisdictions preclude the taking of any other such proceeding, suit or action in any other jurisdiction, whether concurrently or not, to the extent permitted by the law of such other jurisdiction. Publisher shall have the right to take any such proceeding, suit or action against SCEE only in the English Courts.

21.Remedies
Publisher acknowledges and agrees that any breach by Publisher of this Agreement may cause Sony irreparable harm and damage which may not be capable of remedy by damages alone and therefore that in the event of any such breach SCEE may seek equitable (including injunctive) relief against Publisher in addition to damages and/or any other remedy available to SCEE at law or in equity. Either party’s election to avail itself of any of the remedies provided for in this Agreement shall not be exclusive of any other remedies available hereunder or otherwise at law or in equity, and all such remedies shall be cumulative. Publisher shall indemnify SCEE for all losses, liabilities, damages, expenses and costs, including without limitation reasonable fees for lawyers, expert witnesses and litigation costs, which SCEE may sustain or incur as a result of any breach or threatened breach by Publisher of this Agreement.

22.Severability

In the event that any provision of this Agreement (or any part(s) thereof), other than a provision in respect of which SCEE gives a notice of amendment pursuant to Clause 25, is determined by a court of competent jurisdiction to be invalid or otherwise unenforceable, such provision (or part(s) thereof) shall be enforced to the extent possible consistent with the stated intention of the parties or, if incapable of such enforcement, shall be deemed to be deleted from this Agreement, but not in any way so as to affect the validity or enforceability of any other provisions of this Agreement which shall continue in full force and effect.

23.Provisions Surviving  Expiration or Termination

The following provisions of this Agreement shall survive and continue in full force and effect notwithstanding its expiration or earlier termination (whether by SCEE pursuant to Clause 13 hereof or otherwise howsoever):

Clause 3    Sub-Publishers
Clause 4    Reservations
Clause 5.7    Consumer Advisory Age Ratings
Clause 6    Manufacture of Licensed Products
Clause 7    Platform Charge
Clause 9    Confidentiality
Clause 10.2 to 10.4    Warranties
Clause 11    Indemnities
Clause 12    Limitations of Liability
Clause 14    Effect of Expiration or Termination
Clause 18    Assignability

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Clause 20    Governing Law
Clause 21    Remedies
Clause 22    Severability

24.Waiver

No failure or delay by either party in exercising any right, power or remedy under this Agreement shall operate as a waiver of any such right, power or remedy. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to enforce such waiver. Any waiver by either party of any provision of this Agreement shall not be construed as a waiver of any other provision of this Agreement, nor shall such waiver operate or be construed as a waiver of such provision in relation to any future event or circumstance.

25.Amendments

SCEE reserves the right, at any time upon reasonable notice to Publisher, to amend the relevant provisions of this Agreement, the Schedules hereto and/or the specifications herein referred to, to take account of or in response to any decision or order of, or objection raised by, any court or governmental or other competition authority of competent jurisdiction and/or any statutory or similar measures which might be implemented to give effect to any such decision, which apply to this Agreement, the Schedules hereto and/or the Specifications herein referred to (and from which this Agreement, the Schedules hereto and/or the Specifications herein referred to are not exempt) or to reflect any undertaking given by Sony to any such authority in relation to any and all such matters aforesaid. Any such amendment shall be of prospective application only and shall not be applied to any Licensed Product materials which shall have been submitted to SCEE by Publisher pursuant to Clause 5.2 and/or 5.3 prior to the date of SCEE’s notice of amendment. In the event that Publisher is unwilling to accept any such amendment, then Publisher shall have the right forthwith to terminate this Agreement by written notice to SCEE given not more than [**] following the date of SCEE’s notice of amendment. The provisions of Clause 14.3 shall come into effect upon any such termination by Publisher.

Subject to the foregoing and except as otherwise provided herein, this Agreement shall not be subject to amendment, change or modification other than by another written instrument duly executed by both of the parties hereto.

26.Headings

The clause and other headings contained in this Agreement are intended primarily for reference purposes only and shall not alone determine the construction or interpretation of this Agreement or any provision(s) hereof.

27.Integration

This document (including the Schedules hereto) constitutes the entire agreement between the parties with respect to the subject matter contained herein, and supersedes all prior or contemporaneous agreements, proposals, understandings and communications between Sony and Publisher, whether oral or written, with respect to the subject matter hereof. However, the generality of the foregoing notwithstanding, the CNDA (PSP) and, if applicable, the LDAP executed by Publisher shall continue in full force and effect.

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28.Counterparts

This Agreement may be executed in 2 (two) counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument.

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

																					
	SONY COMPUTER ENTERTAINMENT EUROPE LIMITED		ACTIVISION UK LIMITED
							
	By:		/s/ John Brunning
		By:		/s/ George Rose

							
	Print Name:		John Brunning
		Print Name:		George Rose

							
	Title:		SVP, Third Party Relations and Business Affairs
		Title:		Sr. VP & Gen. Counsel 

							

24

SCHEDULE 1

to the PSP Licensed Publisher Agreement dated 27 September 2005 between Sony Computer Entertainment Europe Limited and Activision UK Limited

Licensed Territory (Clause 1.2)

												
	Algeria	Andorra	Australia	Austria
	Bahrain	Belgium	Belorussia	Bosnia Herzegovina

	Bulgaria	Croatia	Cyprus	Czech Republic

	Denmark	Egypt	Estonia	Finland
	France	Georgia	Germany	Greece
	Hungary	Iceland	India	Iran
	Ireland	Israel	Italy	Jordan
	Kenya	Kuwait	Latvia	Lebanon
	Libya	Liechtenstein	Lithuania	Luxembourg
	Malta & Gozo
	Monaco	Montenegro	Morocco
	Netherlands	New Zealand
	Nigeria	Norway
	Oman	Pakistan	Poland	Portugal
	Qatar	Romania	Russia	San Marino

	Saudi Arabia
	Serbia	Slovakia	Slovenia

Together with:

(1)All other countries which from time to time are members of the European Union or have otherwise implemented the Treaty on a European Economic Area or where Articles 81 & 82 of the Treaty establishing the European Community (or provisions similar thereto) have been implemented or are otherwise directly effective.

(2)Such countries in addition to those specified above which SCEE, in its sole discretion as representative of Sony Computer Entertainment worldwide, determines from time to time to include within the Licensed Territory by notice to Publisher. Without limiting the generality of the foregoing, SCEE shall have the right not to include within the Licensed Territory or, having included, subsequently to exclude from the Licensed Territory by reasonable notice to Publisher (and intends so to exclude) any such country or countries in which, in SCEE’s best business judgement, the laws or enforcement of such laws do not adequately protect Sony Intellectual Property Rights. By not later than the expiry of any such notice of exclusion, Publisher shall cease and desist, in the country or countries concerned, from any further use of the Sony Materials, any Sony Intellectual Property Rights related thereto and the Licensed Trademarks and shall have no further right to continue or authorise the marketing, sale and/or distribution of any units of Licensed Products.

25

SCHEDULE 2

to the PSP Licensed Publisher Agreement dated 27 September 2005 between Sony Computer Entertainment Europe Limited and Activision UK Limited

Platform Charge (Clause 7.1) (retail products only)

[**]

For these purposes, “maximum price to trade” shall mean -

Publisher’s (or, where applicable, Publisher’s distributor’s) highest price net of trade margin to any trade customer in the European Economic Area and Australia for Publisher’s (or, where applicable, Publisher’s distributor’s) minimum order quantity of the relevant inventory, net of year end (or similar) volume rebates (if any) properly attributable to sales of Licensed Products, but prior to any credit, deduction or rebate for co-op advertising or other marketing support, returns or otherwise howsoever.

Where Publisher’s business (with the trade or through distributors) is conducted in local currencies other than €€, the local currency/€€ exchange rates to be applied for purposes of conforming to maximum price to trade for any given Band will be the closing mid-point spot rate as quoted in the London “Financial Times” on the first business day of each 6 month period, commencing 1 September 2005. Such exchange rate will then reset for each successive 6 month period thereafter

The local currency maximum price to trade for any given game will then be that derived by applying the exchange rate obtaining for the 6 month period (as above) in which Publisher places its first purchase order for the game concerned and will continue to apply for that game unless and until Publisher places its first PO in a different Band in a subsequent 6 month period. SCEE reserves the right to review local currency maximum prices to trade per Band applicable for any given 6 month period (as above) in the event of a material exchange rate fluctuation, deemed for these purposes to be +/- 5%.

The foregoing assumes a standard 1-disc UMD product and covers mastering, disc and shell, 4-colour disc label, PSP box (or other packaging) and automated assembly of all components, but excludes the cost of Printed Materials other than disc label.

Shrink Wrap is available as an option subject to incremental charges (in addition to the otherwise applicable Platform Charge specified above) of [**] (or as individually quoted in each case for products in non-standard packaging).

26

The foregoing assumes a standard 1-disc UMD product and covers mastering, disc and shell, 4-colour disc label, PSP box (or other packaging) and automated assembly of all components, but excludes the cost of Printed Materials other than disc label.

Shrink Wrap is available as an option subject to incremental charges (in addition to the otherwise applicable Platform Charge specified above) of [**] (or as individually quoted in each case for products in non-standard packaging).

The Platform Charge and minimum order and reorder quantities for other “non-standard” Manufactured Materials and/or production processes (subject to availability) shall be as individually quoted in each case.

Demo Discs

PSP Demo Discs are also available. Demos must be from one game profile UMD Publisher only, and content will be limited to a maximum of [**] playable and/or [**] non-playable demo segments (each such segment to feature [**]. Platform Charge is [**]. Demos will have a standard 4-colour disc label and be supplied in a plastic pochette (included in Platform Charge). An Inlay may be provided as Printed Materials. The charge for manual insertion of Inlays shall be as individually quoted in each case. Order quantities shall be multiples of the minimum box shipment advised from time to time by SCEE or the authorised manufacturing facility licensed by SCEE. However, where a separate Demo Disc sku is required for Germany (to comply with German law which requires consumer advisory age ratings to appear not only on the outer packaging but also on the disc label ~ and please note this applies only for product distributed in the German market), the minimum order quantity for initial and reorders of that sku is [**]. Demo discs may not be sold (directly or indirectly) or offered as premium cost items to, or used in the redemption of paid pre-orders for retail Licensed Products by, consumers.

Delivery

SCEE offers free delivery to EEA countries (only) by regular road (and/or, where applicable, sea) services, with airfreight or other expedited delivery available but the incremental costs thereof for Publisher’s account. The minimum quantity per game per drop is [**].

Audit

In order to verify conformity with the Band structure for Licensed Products described above, SCEE will require from time to time at its own expense to inspect and audit the relevant of Publisher’s financial records (and, where applicable, those of Publisher’s associated companies, subsidiaries and/or branch offices in the Licensed Territory). Any such inspection and audit shall take place during normal business hours at Publisher’s principal place of business (or such other location as the relevant books and records are maintained) upon reasonable prior notice and shall, at SCEE’s sole election, be conducted either by an independent chartered or certified accountant or by an appropriately professionally qualified member of SCEE’s staff.

Initialled by     
                                
              

Sony Computer Entertainment Europe

Initialled by 

Activision UK Limited

27

SCHEDULE 3

to the PSP Licensed Publisher Agreement dated 27 September 2005 between Sony Computer Entertainment Europe Limited and Activision UK Limited

PSP format Software games (Clause 1.1)

[**]

28masterconfirmation-uncol

    Jefferies LLC  520 Madison Avenue  New York, NY 10022  Tel: 212.284.2300  Jefferies.com    Execution Version  MASTER CONFIRMATION  ACCELERATED SHARE REPURCHASE TRANSACTIONS  Date: May 3, 2022  To: BlueLinx Holdings Inc.   1950 Spectrum Circle, Suite 300   Marietta, GA 30067  Re:  Accelerated Share Repurchase Transactions  Ladies and Gentleman:  This master confirmation (this “Master Confirmation”), dated as of May 3, 2022, sets forth certain terms  and conditions of certain Transactions (each, a “Transaction”) that Jefferies LLC (“Jefferies”), will enter into with  BlueLinx Holdings Inc. (“Counterparty”).  Each Transaction will have terms contained in this Master Confirmation and terms not contained in this  Master Confirmation.  In particular, any Transaction entered into under this Master Confirmation will be subject to  the additional terms set forth in a transaction confirmation in the form attached hereto as Schedule A, which transaction  confirmation will reference this Master Confirmation and supplement, form a part of, and be subject to this Master  Confirmation (each such transaction confirmation, a “Transaction Confirmation”).  For any Transaction, this Master  Confirmation and the Transaction Confirmation for such Transaction together will constitute a “Confirmation” as  referred to in the Agreement specified below.  Taken alone, this Master Confirmation is neither a commitment by  either party to enter into any Transaction nor evidence of any Transaction.  This Master Confirmation incorporates the definitions and provisions contained in the 2002 ISDA Equity  Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives  Association, Inc.  For each Transaction, this Master Confirmation and the Transaction Confirmation for such  Transaction evidence a complete binding agreement between Counterparty and Jefferies with respect to the subject  matter and terms of such Transaction and shall supersede all prior or contemporaneous written or oral communications  with respect thereto.  This Master Confirmation and the Transaction Confirmation for each Transaction each supplement, form a  part of, and are subject to, an agreement in the form of the ISDA 2002 Master Agreement (the “Agreement”) as if  Jefferies and Counterparty had executed the Agreement on the date of this Master Confirmation (but without any  Schedule except for (i) the election of New York law (without reference to its choice of laws doctrine other than Title  14 of Article 5 of the New York General Obligations Law) as the governing law and US Dollars (“USD”) as the  Termination Currency, and (ii) the election that the “Cross Default” provisions of Section 5(a)(vi) shall apply to  Jefferies and Counterparty, with a “Threshold Amount” in respect of Jefferies of 3% of the members’ equity of  Jefferies and a “Threshold Amount” in respect of Counterparty of USD 50.0 million (provided that (a) the phrase “or  becoming capable at such time of being declared” shall be deleted from clause (1) of such Section 5(a)(vi) of the  Agreement and (b) the following sentence shall be added to the end thereof: “Notwithstanding the foregoing, a default  under subsection (2) hereof shall not constitute an Event of Default if (i) the default was caused solely by error or  omission of an administrative or operational nature; (ii) funds were available to enable the party to make the payment  when due; and (iii) the payment is made within one Local Business Day of such party’s receipt of written notice of its  failure to pay.”.  

 

2  The Transactions shall be the sole Transactions under the Agreement.  If there exists any ISDA Master  Agreement between Jefferies and Counterparty or any confirmation or other agreement between Jefferies and  Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Jefferies and Counterparty,  then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or  any other agreement to which Jefferies and Counterparty are parties, the Transactions shall not be considered  Transactions under, or otherwise governed by, such existing or deemed ISDA Master Agreement.  All provisions contained or incorporated by reference in the Agreement shall govern this Master  Confirmation and each Transaction Confirmation, except as expressly modified herein or in the related Transaction  Confirmation.  If, in relation to any Transaction to which this Master Confirmation and a Transaction Confirmation relate,  there is any inconsistency between the Agreement, this Master Confirmation, such Transaction Confirmation and the  Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated:  (i) such Transaction Confirmation; (ii) this Master Confirmation; (iii) the Equity Definitions; and (iv) the Agreement.  Each Transaction constitutes a Share Forward Transaction for purposes of the Equity Definitions.  Set forth  below are the terms and conditions that, together with the terms and conditions set forth in the Transaction  Confirmation relating to such Transaction, shall govern any Transaction.  1. General Terms:  Trade Date: For any Transaction, the date set forth as such in the Transaction Confirmation  for such Transaction.  Buyer: Counterparty  Seller: Jefferies  Shares: The common stock of Counterparty, par value USD 0.01 per share  (Symbol: BXC)  Exchange: The New York Stock Exchange  Related Exchange(s): All Exchanges  Prepayment: Applicable  Variable Obligation: Applicable  Prepayment Amount: For any Transaction, the amount set forth as such in the Transaction Confirmation  for such Transaction.  Prepayment Date: For any Transaction, the date set forth as such in the Transaction Confirmation  for such Transaction.  Calculation Agent: Jefferies  Valuation Terms:  10b-18 VWAP Price: Subject to the provisions of “Valuation Disruption” below, for any Scheduled  Trading Day, as determined by the Calculation Agent based on the 10b-18  Volume Weighted Average Price per Share for the regular trading session  (including any extensions thereof) of the Exchange on such Scheduled Trading  Day (without regard to pre-open or after hours trading outside of such regular  trading session for such Scheduled Trading Day), as published by Bloomberg at  4:15 p.m., New York time (or 15 minutes following the end of any extension of  the regular trading session), on such Scheduled Trading Day, on Bloomberg page  

 

3  “BXC <Equity> AQR_SEC” (or any successor thereto), or if such price (a) is not  reported on such Bloomberg page or successor page on such Scheduled Trading  Day or (b) is, in the Calculation Agent’s reasonable discretion, erroneous, the  price reasonably determined by the Calculation Agent to substitute for such  unreported or erroneous price, which price the Calculation Agent will base on  only those trades that are (i) reported on the Exchange during the period of time  during which Counterparty could have purchased Shares on the Exchange on such  Scheduled Trading Day pursuant to Rule 10b-18(b)(2) under the Securities  Exchange Act of 1934, as amended (the “Exchange Act”) and (ii) effected such  purchases pursuant to the conditions of Rule 10b-18(b)(3) under the Exchange  Act (such trades, “Rule 10b-18 Eligible Transactions”).  Forward Price: For any Transaction, the arithmetic average of the 10b-18 VWAP Prices with  respect to all Exchange Business Days in the Valuation Period for such  Transaction, subject to “Valuation Disruption” below.  Forward Price Discount: For any Transaction, the amount set forth as such in the Transaction Confirmation  for such Transaction.  Valuation Period: For any Transaction, the period from, and including, the Valuation Period Start  Date for such Transaction, to, and including, the Valuation Date for such  Transaction.  Valuation Period Start Date: For any Transaction, the date set forth as such in the Transaction Confirmation  for such Transaction.  Valuation Date: For any Transaction, the Scheduled Valuation Date for such Transaction;  provided that Jefferies may, in its sole discretion, designate any Scheduled  Trading Day during the period beginning on, and including, the First Acceleration  Date for such Transaction, and ending on, and excluding, the Scheduled Valuation  Date for such Transaction, in whole or in part, to be a Valuation Date by delivering  notice to Counterparty of the occurrence of such Valuation Date on or before  11:59 p.m., New York time on the second Exchange Business Day immediately  following such Scheduled Trading Day (the “Acceleration Date”) and specifying  the portion of the Prepayment Amount that is subject to acceleration (which  amount shall not be less than 20% of the Prepayment Amount as of the  Prepayment Date (or, if less, the remainder of the Prepayment Amount for which  a notice of acceleration has yet to be delivered)).  If the portion of the Prepayment  Amount that is subject to acceleration is less than the full remaining Prepayment  Amount, then the Calculation Agent shall make such mechanical or administrative  adjustments to the terms of such Transaction as appropriate in order to take into  account the occurrence of such Acceleration Date (including cumulative  adjustments to take into account all prior Acceleration Dates).   Scheduled Valuation Date: For any Transaction, the date set forth as such in the Transaction Confirmation  for such Transaction, subject to postponement as provided in “Valuation  Disruption” below.  First Acceleration Date: For any Transaction, the date set forth as such in the Transaction Confirmation  for such Transaction.  Valuation Disruption: Notwithstanding anything to the contrary in the Equity Definitions or in this  Master Confirmation:   (a) whenever any Scheduled Trading Day during the Valuation Period for any  Transaction is a Disrupted Day, the Calculation Agent may, in its good faith and  

 

4  commercially reasonable discretion, postpone the Scheduled Valuation Date for  such Transaction by one Scheduled Trading Day;   (b) whenever any Scheduled Trading Day during the Settlement Valuation Period,  if any, for any Transaction is a Disrupted Day, the Calculation Agent may, in its  good faith and commercially reasonable discretion, postpone the expected final  Scheduled Trading Day of such Settlement Valuation Period by one Scheduled  Trading Day; and   (c) whenever at least nine consecutive Scheduled Trading Days during the  Valuation Period or the Settlement Valuation Period, as the case may be, for any  Transaction have been Disrupted Days, the Calculation Agent, in its good faith  and commercially reasonable discretion, may deem such ninth Scheduled Trading  Day that is a Disrupted Day not to be a Disrupted Day (any such Disrupted Day,  a “Deemed Trading Day”), in which case the Calculation Agent will not  postpone the Scheduled Valuation Date or the expected final Scheduled Trading  Day of such Settlement Valuation Period pursuant to clause (i) or (ii) above, as  the case may be, for such Deemed Trading Day.   Whenever any Scheduled Trading Day during the Valuation Period or the  Settlement Valuation Period for any Transaction is a Deemed Trading Day, the  Calculation Agent will, in a good faith and commercially reasonable manner,  calculate the 10b-18 VWAP Price for such Deemed Trading Day as its estimate  of the value of the Shares on such Deemed Trading Day, which estimate may be  based on, among other factors, historical trading patterns in the Shares, the volume  of Shares traded on such Deemed Trading Day and the price of the Shares, if any,  on the Exchange on such Deemed Trading Day, and such estimate will be the 10b- 18 VWAP Price for such Deemed Trading Day.   Notwithstanding anything to the contrary in the Equity Definitions or in this  Master Confirmation, if a Market Disruption Event (or a deemed Market  Disruption Event as provided herein) occurred on any such Disrupted Day during  the Valuation Period or the Settlement Valuation Period, but such Disrupted Day  is not a Deemed Trading Day, the Calculation Agent shall determine in a good  faith and commercially reasonable manner whether (i) such Disrupted Day is a  Disrupted Day in full, in which case the 10b-18 VWAP Price for such Disrupted  Day shall not be included for purposes of determining the Forward Price or the  Settlement Price, as the case may be, or (ii) such Disrupted Day is a Disrupted  Day only in part, in which case the Calculation Agent will, in a good faith and  commercially reasonable manner, determine (A) the 10b-18 VWAP Price for such  Disrupted Day based on the Rule 10b-18 Eligible Transactions in the Shares  effected on such Disrupted Day before the relevant Market Disruption Event  occurred and/or after the relevant Market Disruption Event ended, and (B) the  Forward Price or the Settlement Price, as the case may be, based on adjusted  weightings that account for such partially Disrupted Day, which adjusted  weightings may, for the avoidance of doubt, deviate from the weightings that the  Calculation Agent would use to compute an arithmetic average and/or account for  the duration of any relevant Market Disruption Event during such Disrupted Day,  historical trading patterns in the Shares, the prices of the Shares on such Disrupted  Day and/or otherwise.   Any Scheduled Trading Day on which, as of the date hereof, the Exchange is  scheduled to close prior to its normal close of trading shall be deemed not to be a  Scheduled Trading Day; if a closure of the Exchange prior to its normal close of  trading on any Scheduled Trading Day is scheduled following the date hereof, but  prior to the open of the regular trading session of the Exchange on such day, then  such Scheduled Trading Day shall be deemed to be a Disrupted Day in full.  

 

5  Market Disruption Event: The definition of “Market Disruption Event” contained in Section 6.3(a) of the  Equity Definitions is hereby amended by:   (i) deleting the words “at any time during the one-hour period that ends at the  relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or  Knock-out Valuation Time, as the case may be” and inserting the words “at any  time on any Scheduled Trading Day during the Valuation Period or the Settlement  Valuation Period” after the word “material,” in the third line thereof; and   (ii) replacing the words “or (iii) an Early Closure” in the fifth line thereof with the  words “, (iii) an Early Closure or (iv) a Regulatory Disruption”.  Early Closure: The definition of “Early Closure” contained in Section 6.3(d) of the Equity  Definitions is hereby amended by deleting the remainder of the provision  following the term “Scheduled Closing Time” in the fourth line thereof.  Regulatory Disruption: Any event that Jefferies, in its good faith and reasonable discretion, upon advice  of counsel, determines makes it appropriate with regard to any legal, regulatory  or self-regulatory requirements or related policies and procedures (whether or not  such requirements, policies or procedures are imposed by law or have been  voluntarily adopted by Jefferies or its affiliates), for Jefferies to refrain from or  decrease any market activity in connection with the relevant Transaction.   Whenever a Regulatory Disruption occurs, Jefferies shall notify Counterparty of  such occurrence in writing as soon as reasonably practicable under the  circumstances; provided that Jefferies shall not be required to communicate to  Counterparty the reason for Jefferies’s exercise of its rights pursuant to this  provision if Jefferies reasonably determines in good faith, upon advice of counsel,  that disclosing such reason would be reasonably likely to result in a violation of  any legal, regulatory, or self-regulatory requirements or related policies and  procedures (whether or not such requirements, policies or procedures are imposed  by law or have been voluntarily adopted by Jefferies).  Settlement Terms:  Settlement Currency: USD  Physical Settlement: If the Number of Shares to be Delivered is positive, Applicable.  Additional Settlement  Provisions: To the extent that Jefferies is obligated to deliver Shares to Counterparty under  any Transaction, Jefferies does not, and shall not, make the agreement or the  representations set forth in Section 9.11 of the Equity Definitions related to the  restrictions imposed by applicable securities laws.   In addition, for the avoidance of doubt, all references to the Excess Dividend  Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.  Initial Shares:  Initial Share Delivery: For any Transaction, Jefferies shall deliver to Counterparty a number of Shares  equal to the Number of Initial Shares for such Transaction on the Initial Share  Delivery Date for such Transaction, in accordance with Section 9.4 of the Equity  Definitions, with such Initial Share Delivery Date deemed to be a “Settlement  Date” for purposes of such Section 9.4.   Initial Share Delivery Date: For any Transaction, the date set forth as such in the Transaction Confirmation  for such Transaction.  

 

6  Number of Initial Shares: For any Transaction, the amount set forth as such in the Transaction Confirmation  for such Transaction.  Additional Shares:  Settlement Date: For any Transaction, if the Number of Shares to be Delivered is a positive number,  the date that is one Settlement Cycle immediately following the Valuation Date  for such Transaction; provided that if Jefferies delivers notice designating the  accelerated Valuation Date pursuant to the definition thereof, the date that is one  Settlement Cycle immediately following the date Jefferies delivers such notice.   Number of Shares  to be Delivered: For any Transaction, a number of Shares equal to (i) the Prepayment Amount for  such Transaction divided by (A) the Forward Price for such Transaction minus (B)  the Forward Price Discount for such Transaction, minus (ii) the number of Shares  delivered by Jefferies to Counterparty with respect to such Transaction pursuant  to the provisions of “Initial Share Delivery”.   If the Number of Shares to be Delivered for any settlement of any Transaction is  a negative number, then the terms of the Counterparty Settlement Provisions in  Annex A shall apply.  Share Adjustments:  Method of Adjustment: Calculation Agent Adjustment; provided that the Equity Definitions shall be  amended by replacing the words “diluting or concentrative” in Sections 11.2(a),  11.2(c) of the Equity Definitions (in two instances) and 11.2(e)(vii) with the word  “material” and by adding the words “or the Transactions” after the words  “theoretical value of the relevant Shares” in Sections 11.2(a), 11.2(c) and  11.2(e)(vii); provided, further, that adjustments may be made to account for  changes in volatility, expected dividends, correlation, stock loan rate, withholding  or transfer taxes, and liquidity relative to the relevant Share or the Transactions.   Potential Adjustment Event: Notwithstanding anything to the contrary in Section 11.2(e) of the Equity  Definitions, (i) an Extraordinary Dividend shall not constitute a Potential  Adjustment Event and (ii) none of the Transactions pursuant to this Master  Confirmation nor any Permitted OMR Transaction (as defined below) shall  constitute a Potential Adjustment Event.   It shall constitute an additional Potential Adjustment Event if the Scheduled  Valuation Date for any Transaction is postponed pursuant to “Valuation  Disruption” above, in which case the Calculation Agent may, in its good faith and  commercially reasonable discretion, adjust any relevant terms of any such  Transaction as necessary to preserve as nearly as practicable the fair value of such  Transaction to Jefferies prior to such postponement.  Extraordinary Dividend: Any dividend or distribution on the Shares (other than any dividend or distribution  of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) or (B) of the  Equity Definitions).  Extraordinary Events:   Consequences of Merger Events:  (a) Share-for-Share: Modified Calculation Agent Adjustment  (b) Share-for-Other: Cancellation and Payment  

 

7  (c) Share-for-Combined: Component Adjustment or Cancellation and Payment, at the election of  Jefferies.  Tender Offer: Applicable; provided, however, that the definitions of “Tender Offer”  and “Tender Offer Date” in Section 12.1 of the Equity Definitions are  each hereby amended by inserting the words “or Shares” after the words  “voting shares”.   Consequences of Tender Offers:  (a) Share-for-Share: Modified Calculation Agent Adjustment  (b) Share-for-Other: Modified Calculation Agent Adjustment  (c) Share-for-Combined: Modified Calculation Agent Adjustment  New Shares: In the definition of New Shares in Section 12.1(i) of the Equity  Definitions, (i) the text in clause (i) thereof shall be deleted in its entirety  and replaced with “publicly quoted, traded or listed on any of the New  York Stock Exchange, The NASDAQ Global Select Market or The  NASDAQ Global Market (or their respective successors),” and (ii) the  following phrase shall be inserted at the end thereof:  “and (iii) in the  case of a Merger Event, of an entity or person that is a corporation  organized under the laws of the United States, any State thereof or the  District of Columbia”.   Nationalization,  Insolvency or Delisting: Cancellation and Payment; provided that in addition to the provisions of  Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a  Delisting if the Exchange is located in the United States and the Shares  are not immediately re-listed, re-traded or re-quoted on any of the New  York Stock Exchange, The NASDAQ Global Select Market or The  NASDAQ Global Market (or their respective successors); if the Shares  are immediately re-listed, re-traded or re-quoted on any such exchange  or quotation system, such exchange or quotation system shall be deemed  to be the Exchange and the Calculation Agent shall make adjustments it  deems necessary to the terms of the Transactions, as if Modified  Calculation Agent Adjustment were applicable to such event.  Additional Disruption Events:  (a) Change in Law:  Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is  hereby amended by (i) replacing the parenthetical beginning after the  word “regulation” in the second line thereof with the words “(including,  for the avoidance of doubt and without limitation, (x) any tax law or (y)  adoption or promulgation of new regulations authorized or mandated by  existing statute)”,  (ii) replacing the phrase “the interpretation” in the third  line thereof with the phrase “or announcement or statement of the formal  or informal interpretation”, (iii) deleting the words “a party to such  Transaction” in the fifth line thereof and replacing them with the words  “Jefferies”, (iv) replacing the word “Shares” with “Hedge Positions” in  the sixth line thereof, (v) immediately following the word “Transaction”  in clause (X) thereof, adding the phrase “in the manner contemplated by  the Hedging Party on the Trade Date”, and (vi) adding the words “, or  holding, acquiring or disposing of Shares or any Hedge Positions relating  to,” after the word “under” in clause (Y) thereof.    

 

8  (b) Failure to Deliver: Applicable  (c) Insolvency Filing: Applicable  (d) Hedging Disruption: Applicable   (e) Increased Cost of Hedging: Applicable  (f) Loss of Stock Borrow: Applicable; provided that Section 12.9(b)(iv) of the Equity Definitions is  hereby amended by (i) deleting (1) subsection (A) in its entirety, (2) the  phrase “or (B)” following subsection (A) and (3) the phrase “in each case”  in subsection (B) and (ii) replacing the phrase “neither the Non-Hedging  Party nor the Lending Party lends Shares” with the phrase “such Lending  Party does not lend Shares” in the penultimate sentence.   Maximum Stock Loan Rate: For any Transaction, the rate specified as such in the Transaction  Confirmation for such Transaction.  (g) Increased Cost of   Stock Borrow: Applicable; provided that Section 12.9(b)(v) of the Equity Definitions is  hereby amended by (i) adding the word “or” immediately before  subsection “(B)” and deleting the comma at the end of subsection (A) and  (ii) (1) deleting subsection (C) in its entirety, (2) deleting the word “or”  immediately preceding subsection (C), and (3) deleting clause (X) in the  final sentence.   Initial Stock Loan Rate: For any Transaction, the rate specified as such in the Transaction  Confirmation for such Transaction.   Hedging Party: For all applicable Additional Disruption Events, Jefferies    Determining Party: For all applicable Extraordinary Events and Additional Disruption Events,  Jefferies  Non-Reliance/Agreements and  Acknowledgments Regarding   Hedging Activities/ Additional  Acknowledgments Applicable  Additional Termination Events:  Additional Termination Event(s): The declaration by the Issuer of any Extraordinary Dividend, the ex- dividend date for which occurs or is scheduled to occur during the  Relevant Dividend Period, will constitute an Additional Termination  Event, with Counterparty as the sole Affected Party and all Transactions  hereunder as the Affected Transactions.   Notwithstanding anything to the contrary in Section 6 of the Agreement,  if an Automatic Termination Price is specified in the Transaction  Confirmation for any Transaction, then an Additional Termination Event  with Counterparty as the sole Affected Party and such Transaction as the  Affected Transaction will automatically occur without any notice or  action by Jefferies or Counterparty if the price of the Shares on the  Exchange at any time falls below such Automatic Termination Price, and  the Exchange Business Day on which the price of the Shares on the  Exchange at any time falls below the Automatic Termination Price will  be the “Early Termination Date” for purposes of the Agreement.  

 

9  Relevant Dividend Period: For any Transaction, the period beginning on, and including, the  Valuation Period Start Date for such Transaction to, and including, the  Relevant Dividend Period End Date for such Transaction.  Relevant Dividend Period  End Date: For any Transaction, if Annex A applies to such Transaction, the last day  of the Settlement Valuation Period applicable to such Transaction;  otherwise, the final Valuation Date for such Transaction.  Accounts, Notices and Offices:  Account Details:  Account for Payments  to Counterparty: To be provided by Counterparty.  Account for Delivery  of Shares to Counterparty: To be provided by Counterparty.  Account for Payments  To Jefferies: To be provided by Jefferies  Offices:  Counterparty’s Office for each Transaction is Marietta, Georgia  Jefferies’s Office for each Transaction is New York.  Notices:  Counterparty’s Contact Details  for Purpose of Giving Notice: BlueLinx Holdings Inc.   1950 Spectrum Circle, Suite 300   Marietta, GA 30067   Attention:  Shyam K. Reddy    Chief Legal and Sustainability Officer    Corporate Secretary   Facsimile:  (770) 221-2502   Email:  Shyam.Reddy@BlueLinxCo.com  Jefferies’s Contact Details  for Purpose of Giving Notice: Jefferies LLC  520 Madison Avenue  New York, NY 10022  Attention: General Counsel  Email: msharp@jefferies.com    with a copy to the following addresses:    CorpEqDeriv@jefferies.com  EQDERIV_MO@jefferies.com  2. Mutual representations, warranties and covenants.  In addition to the representations, warranties and  covenants in the Agreement, each party represents, warrants and covenants to the other party, that:  (a) Eligible Contract Participant.  It is an “eligible contract participant,” as defined in the U.S.  Commodity Exchange Act, as amended (the “CEA”), and is entering into such Transaction as principal (and not as  

 

10  agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.  In addition, each  party acknowledges that this Master Confirmation has been, and each Transaction entered into hereunder will be,  subject to individual negotiation by the parties and has not been executed or traded on a “trading facility” as defined  in the CEA.   (b) Accredited Investor.  Each party acknowledges that the offer and sale of such Transaction to it is  intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue  of Section 4(a)(2) thereof.  Accordingly, each party represents and warrants to the other party that (i) it has the financial  ability to bear the economic risk of its investment in such Transaction and is able to bear a total loss of its investment,  (ii) it is an “accredited investor” as that term is defined under Regulation D under the Securities Act and (iii) it is  entering into such Transaction for investment and not with a view to the distribution or resale thereof in a manner that  would violate the Securities Act, and (iv) the disposition of such Transaction is restricted under this Master  Confirmation, the Securities Act and state securities laws.  3. Additional representations, warranties and covenants of Counterparty.  In addition to the  representations, warranties and covenants in the Agreement and those made by Counterparty under Section 2 of this  Master Confirmation, Counterparty represents and warrants, as of the Trade Date for each Transaction and covenants  to Jefferies that:  (a) 10b5-1 Plan.  (i) Counterparty is entering into this Master Confirmation and each Transaction  hereunder in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the  Exchange Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of the federal or applicable state  securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging  transaction or position with respect to the Shares.  For the avoidance of doubt, the entry into any Permitted OMR  Transactions (as defined below) shall not fall within the ambit of the previous sentence.  Counterparty acknowledges  that it is the intent of the Counterparty and Jefferies that each Transaction entered into under this Master Confirmation  comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and that each Transaction entered  into under this Master Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c).  (ii) Counterparty will not seek to control or influence Jefferies’s decision to make any  “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into  under this Master Confirmation, including, without limitation, the price paid per Share pursuant to such  purchases, whether such purchases are made on any securities exchange or privately and how, when or  whether Jefferies enters into any hedging transactions.  Counterparty represents and warrants that it has  consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master  Confirmation and each Transaction Confirmation under Rule 10b5-1.  (iii) Counterparty acknowledges and agrees that any amendment, modification, waiver or  termination of this Master Confirmation or any Transaction Confirmation must be effected in accordance  with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c).  Without  limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be  made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such  amendment, modification or waiver shall be made at any time at which Counterparty is aware of any material  non-public information regarding Counterparty or the Shares.  (b) Tender Offer Rules.  Counterparty will not be engaged in an “issuer tender offer” as such term is  defined in Rule 13e-4 under the Exchange Act nor is it aware of any third party tender offer with respect to the Shares  within the meaning of Rule 13e-1 under the Exchange Act.  (c) Share Buy-back Program.  Each Transaction is being entered into pursuant to a publicly disclosed  Share buy-back program and Counterparty’s board of directors (or any committee thereof duly authorized to act on  behalf of the board of directors) has approved the use of accelerated share purchase programs to effect the Share buy- back program.  (d) 10b-18.  Neither Counterparty nor any “affiliated purchaser”, as defined in Rule 10b-18 under the  Exchange Act (“Rule 10b-18”), shall, without prior written consent of Jefferies, directly or indirectly purchase, offer  

 

11  to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to,  any Shares (or an equivalent interest, or any security convertible into or exchangeable for such Shares and including,  without limitation, by means of a derivative instrument) on the open market, or enter into any accelerated share  repurchase program, or any derivative share repurchase transaction, or other similar transaction, during the Relevant  Period, Settlement Valuation Period or Seller Termination Purchase Period and thereafter until all payments or  deliveries of Shares under this Master Confirmation have been made. During such time, any purchases of Shares by  Counterparty shall be made through Jefferies or its affiliates, subject to such reasonable conditions as Jefferies or such  affiliate shall impose, and in compliance with Rule 10b-18 or otherwise in a manner that Counterparty and Jefferies  believe is in compliance with applicable requirements. Notwithstanding the immediately preceding sentence or  anything herein to the contrary, Counterparty may purchase Shares (i) on any Scheduled Trading Day pursuant to any  Rule 10b5-1 or Rule 10b-18 repurchase plan entered into with Jefferies or an Affiliate of Jefferies (each, a “Permitted  OMR Transaction”), so long as, on any Scheduled Trading Day, purchases under the Permitted OMR Transaction  do not in the aggregate exceed the lower of (x) Designated OMR Fixed Threshold and (y) Designated OMR Percentage  Threshold, in each case specified in the Transaction Confirmation for such Transaction, on such Scheduled Trading  Day.  In addition, notwithstanding anything to the contrary in this Master Confirmation or in the Equity Definitions,  Counterparty agrees that:  (i) Counterparty will not during the period beginning on, and including, the Trade Date for  any Transaction and ending on, and including, the last day of the Relevant Period or the last day of the  Settlement Valuation Period and the last day of the Seller Termination Purchase Period (as defined below),  for such Transaction, make or permit to be made (to the extent within Counterparty’s control), any public  announcement (as defined in Rule 165(f) under the Securities Act) of a Merger Transaction or potential  Merger Transaction (a “Merger Announcement”) unless such Merger Announcement is made prior to the  opening or after the close of the regular trading session on the Exchange for the Shares;  (ii) after any such Merger Announcement is made, Counterparty shall promptly (but in any  event prior to the next opening of the regular trading session on the Exchange) deliver written notice to  Jefferies that such Merger Announcement has been made, which notice shall also specify (A) Counterparty’s  average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months  immediately preceding the date on which such Merger Announcement was made that were not effected  through Jefferies or its affiliates and (B) the number of Shares purchased pursuant to the proviso in Rule 10b- 18(b)(4) under the Exchange Act for the three full calendar months preceding the date on which such Merger  Announcement was made.  Such written notice shall be deemed to be a certification by Counterparty to  Jefferies that such information is true and correct;  (iii) after any such Merger Announcement is made, Counterparty shall promptly notify Jefferies  of the earlier to occur of the completion of such transaction and the completion of any shareholder vote  related to such matter;  (iv) Counterparty is aware that each notice delivered pursuant to this section may result in the  adjustment of the terms of, or the termination of, one or more Transactions; accordingly, Counterparty  acknowledges that its delivery of such notice will comply with the standards set forth in clause (a) of this  Section 3; and  (v) Upon the occurrence of any such Merger Announcement, Jefferies in its good faith and  commercially reasonable discretion may (i) make commercially reasonable adjustments to the terms of any  Transaction, including, without limitation, the Scheduled Valuation Date or the Forward Price Discount,  and/or suspend the Settlement Valuation Period (which adjustments shall be based upon changes in stock  price, volatility, interest rates, stock loan rate, value of any commercially reasonable Hedge Positions in  connection with the Transaction, liquidity relevant to the Shares or to such Transaction and taking into  account whether the Calculation Period had fewer Scheduled Trading Days than originally anticipated) or  (ii) treat the occurrence of such Merger Announcement as an Additional Termination Event with  Counterparty as the sole Affected Party and the Transactions hereunder as the Affected Transactions and  

 

12  with the amount under Section 6(e) of the Agreement determined taking into account the fact that the  Settlement Valuation Period had fewer Scheduled Trading Days than originally anticipated.  “Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as  contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act (after giving effect to the exclusions from such  reference in clause (A) of Rule 10b-18(a)(13)(iv)).   For any Transaction, the “Relevant Period” means the period beginning on, and including, the Valuation  Period Start Date for such Transaction and ending on, and including, the later of (i) the Scheduled Valuation Date for  such Transaction, or such earlier day as elected by Jefferies and communicated to Counterparty on such day (or, if  later, the First Acceleration Date without regard to any acceleration thereof pursuant to “Special Provisions  Acquisition Transaction Announcements” below) and (ii) if Section 7(b) is applicable to such Transaction, the date  on which all deliveries owed pursuant to Section 7(b) have been made.   (e) MNPI and Manipulation.  Counterparty is not entering into any Transaction under this Master  Confirmation (i) on the basis of, and is not aware of, any material non-public information with respect to the Shares,  (ii) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self-tender offer or a third- party tender offer or (iii) to create actual or apparent trading activity in the Shares (or any security convertible into or  exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security  convertible into or exchangeable for the Shares).  (f) Regulation M.  The Shares are not, and Counterparty will not cause the Shares to be, subject to a  “restricted period” (as defined in Regulation M promulgated under the Exchange Act) at any time during any  Regulation M Period for any Transaction unless Counterparty has provided written notice of such restricted period to  Jefferies at least three Scheduled Trading Days immediately preceding the first day of such “restricted period.”  In  addition, Counterparty acknowledges that any such notice may result in a Regulatory Disruption and that  Counterparty’s deliver of such notice must comply with the standards set forth in clause (a) of this Section 3.  “Regulation M Period” means, for any Transaction, (i) the Relevant Period for such Transaction, (ii) the Settlement  Valuation Period, if any, for such Transaction and (iii) the Seller Termination Purchase Period (as defined below), if  any, for such Transaction.   (g) Reporting Requirements.  Counterparty shall comply with all reporting requirements applicable to  each Transaction that Counterparty enters under this Master Confirmation, including, without limitation, those  applicable pursuant to the Exchange Act and the Rules and Regulations promulgated under the Exchange Act.  In  addition, as of (i) the date hereof and (ii) the Trade Date for each Transaction that Counterparty enters under this  Master Confirmation, Counterparty is, and will be, in compliance with its reporting obligations under the Exchange  Act and Counterparty’s most recent Annual Report on Form 10-K, together with all reports subsequently filed by it  pursuant to the Exchange Act, taken together and as amended and supplemented to the date on which Counterparty is  making this representation, do not, as of their respective filing dates, contain any untrue statement of a material fact  or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light  of the circumstances under which they were made, not misleading.  (h) Investment Company.  Counterparty is not and, after giving effect to any Transaction that it enters  under this Master Confirmation, will not be, required to register as an “investment company” as such term is defined  in the Investment Company Act of 1940, as amended.   (i) Solvency.  As of the Trade Date, the Prepayment Date, the Initial Share Delivery Date and the  Settlement Date for each Transaction, Counterparty is not “insolvent” (as such term is defined under Section 101(32)  of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would  be able to purchase a number of Shares with a value equal to the Prepayment Amount in compliance with the laws of  the jurisdiction of Counterparty’s incorporation.  (j) Risk Disclosure.  Counterparty represents and warrants that it has received, read and understands  Jefferies’s “Risk Disclosure Statement Regarding OTC Derivatives Products” and acknowledges the terms thereof as  if it had signed the Risk Disclosure Statement Verification contained therein as of the date hereof.  

 

13  (k) Financial Expertise and Total Assets. Counterparty (i) is capable of evaluating investment risks  independently, both in general and with regard to all transactions and investment strategies involving a security or  securities; (ii) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its  associated persons, unless it has otherwise notified the broker-dealer in writing; and (iii) has total assets of at least  USD 50,000,000 as of the date hereof.  (l) No Plan Assets.  The assets of Counterparty do not constitute “plan assets” under the Employee  Retirement Income Security Act of 1974, as amended, the Department of Labor Regulation promulgated thereunder  or similar law.  4. Acknowledgments by Counterparty and Jefferies.  Each of Counterparty and Jefferies intend that:  (a) each Transaction that Counterparty enters into under this Master Confirmation will be a “securities  contract” as defined in Section 741(7) of the Bankruptcy Code, a “swap agreement” as defined in Section 101(53B)  of the Bankruptcy Code and a “forward contract” as defined in Section 101(25) of the Bankruptcy Code, and the  parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17),  362(b)(27), 362(o), 546(e), 546(g), 546(j), 555, 556, 560 and 561 of the Bankruptcy Code;  (b) the Agreement will be a “master netting agreement” as defined in Section 101(38A) of the  Bankruptcy Code;  (c) a party’s right to liquidate, terminate or accelerate any Transaction, net out or offset termination  values or payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or  Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the  termination or cancellation of any Transaction will constitute a “contractual right” (as defined in the Bankruptcy  Code); and  (d) all payments for, under or in connection with each Transaction, all payments for the Shares  (including, for the avoidance of doubt, payment of the Prepayment Amount) and the transfer of such Shares to  constitute “settlement payments” and “transfers” (as defined in the Bankruptcy Code).  5. Additional Counterparty Acknowledgments.  Counterparty agrees and acknowledges that:  (a) during the term of any Transaction, Jefferies and its affiliates may buy or sell Shares or other  securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to  establish, adjust or unwind its hedge position with respect to such Transaction;  (b) Jefferies and its affiliates may also be active in the market for the Shares other than in connection  with hedging activities in relation to any Transaction;  (c) Jefferies shall make its own determination as to whether, when or in what manner any hedging or  market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate  to hedge its price and market risk with respect to the Forward Price and the 10b-18 VWAP Price;  (d) any market activities of Jefferies and its affiliates with respect to the Shares may affect the market  price and volatility of the Shares, as well as the Forward Price and 10b-18 VWAP Price, each in a manner that may  be adverse to Counterparty;   (e) each Transaction is a derivatives transaction in which Counterparty has granted Jefferies an option;  Jefferies may purchase Shares for its own account at an average price that may be greater than, or less than, the price  paid by Counterparty under the terms of the related Transaction;   (f) without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty  acknowledges that neither Jefferies nor any of its affiliates is making any representations or warranties or taking any  position or expressing any view with respect to the treatment of any Transaction that Counterparty enters into under  

 

14  this Master Confirmation under any accounting standards including, without limitation, ASC Topic 260, Earnings Per  Share, ASC Topic 815, Derivatives and Hedging, ASC Topic 480, Distinguishing Liabilities from Equity and ASC  815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity; and  (g) Counterparty is not relying, and has not relied, upon Jefferies with respect to the legal, accounting,  tax or other implications of entering into this Master Confirmation and any Transaction.  In addition, Counterparty  has conducted its own analysis of the legal, accounting, tax and other implications of entering into this Master  Confirmation and of entering into Transactions under this Master Confirmation.  Counterparty further acknowledges  and agrees that Jefferies has not acted as its advisor in any capacity in connection with this Master Agreement or the  Transactions contemplated by this Master Confirmation.  Counterparty acknowledges that Jefferies is not acting as  the agent for Counterparty in effecting any purchase of Shares pursuant to this Agreement.  6. SPECIAL PROVISIONS FOR ACQUISITION TRANSACTION ANNOUNCEMENTS.  (a) If an Acquisition Transaction Announcement occurs on or prior to the Settlement Date for any  Transaction, then the Calculation Agent shall make such adjustments in a commercially reasonable manner to the  exercise, settlement, payment or any other terms of such Transaction as the Calculation Agent determines is  commercially reasonable, at such time or at multiple times as the Calculation Agent determines appropriate, to account  for the economic effect on such Transaction of such Acquisition Transaction Announcement (including adjustments  to account for changes in volatility, expected dividends, stock loan rate, the value of maintaining or establishing any  commercially reasonable hedge positions in connection with the Transaction and liquidity relevant to the Shares or to  such Transaction). If an Acquisition Transaction Announcement occurs after the Trade Date, but prior to the First  Acceleration Date of any Transaction, the First Acceleration Date shall be the date of such Acquisition Transaction  Announcement.   (b) “Acquisition Transaction Announcement” means (i) the announcement of an Acquisition  Transaction or an event that, if consummated, would result in an Acquisition Transaction, (ii) an announcement that  Counterparty or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed  to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore  strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, (iv) any other  announcement that in the reasonable judgment of the Calculation Agent may result in an Acquisition Transaction, or  (v) any announcement of any change or amendment to any previous Acquisition Transaction Announcement  (including any announcement of the abandonment of any such previously announced Acquisition Transaction,  agreement, letter of intent, understanding or intention). For the avoidance of doubt, announcements as used in the  definition of Acquisition Transaction Announcement refer to any public announcement whether made by the Issuer  or a third party.   (c)  “Acquisition Transaction” means (i) any Merger Event (for purposes of this definition the  definition of Merger Event shall be read with the references therein to “100%” being replaced by “15%” and to “50%”  by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger  therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the  merger of Counterparty with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of  Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction with respect  to Counterparty, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or  distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event  by Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to  Counterparty or its subsidiaries exceeds 15% of the market capitalization of Counterparty and (v) any transaction in  which Counterparty or its board of directors has a legal obligation to make a recommendation to its shareholders in  respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).   7. Miscellaneous.  (a) Delivery of Shares.  Notwithstanding anything to the contrary herein, Jefferies may, by prior notice  to Counterparty, satisfy its obligation to deliver any Shares or other securities on any date due (an “Original Delivery  Date”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or  

 

15  prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on  or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.  (b) Early Termination.  In the event that an Early Termination Date (whether as a result of an Event of  Default or a Termination Event) occurs or is designated or deemed to occur with respect to any Transaction or any  Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a  Nationalization, Insolvency or Merger Event in which the consideration to be paid to holders of Shares consists solely  of cash, (ii) a Merger Event or Tender Offer that is within Counterparty’s control, or (iii) an Event of Default in which  Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party other than  an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination  Event of the type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside  Counterparty’s control), if either party would owe any amount to the other party pursuant to Section 6(d)(ii) of the  Agreement or any Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a  “Payment Amount”), then, in lieu of any payment of such Payment Amount, unless Counterparty makes an election  to the contrary no later than the Early Termination Date or the date on which such Transaction is terminated or  cancelled, Counterparty or Jefferies, as the case may be, shall deliver to the other party a number of Shares (or, in the  case of a Nationalization, Insolvency or Merger Event, a number of units, each comprising the number or amount of  the securities or property that a hypothetical holder of one Share would receive in such Nationalization, Insolvency or  Merger Event, as the case may be (each such unit, an “Alternative Delivery Unit”)) with a value equal to the Payment  Amount, as determined in a commercially reasonable manner by the Calculation Agent over a commercially  reasonable period of time (and the parties agree that, in making such determination of value, the Calculation Agent  may take into account a number of factors, including the market price of the Shares or Alternative Delivery Unit on  the Early Termination Date or the date of early cancellation or termination, as the case may be, and if such delivery is  made by Jefferies, the prices at which Jefferies purchases Shares or Alternative Delivery Units to fulfill its delivery  obligations under this Section 7(b)); provided that in determining the composition of any Alternative Delivery Unit,  if the relevant Nationalization, Insolvency or Merger Event involves a choice of consideration to be received by  holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash; and provided  further that Counterparty may elect that the provisions of this Section 7(b) above providing for the delivery of Shares  or Alternative Delivery Units, as the case may be, shall not apply only if Counterparty represents and warrants to  Jefferies, in writing on the date it notifies Jefferies of such election, that, as of such date, Counterparty is not aware of  any material non-public information regarding Counterparty or the Shares and is making such election in good faith  and not as part of a plan or scheme to evade compliance with the federal securities laws. If delivery of Shares or  Alternative Delivery Units, as the case may be, pursuant to this Section 7(b) is to be made by Counterparty, paragraphs  2 through 7 of Annex A hereto shall apply as if (A) such delivery were a settlement of the Transaction to which Net  Share Settlement applied, (B) the Cash Settlement Payment Date were the Early Termination Date or the date of early  cancellation or termination, as the case may be, and (C) the Forward Cash Settlement Amount were zero (0) minus  the Payment Amount owed by Counterparty.  For the avoidance of doubt, if Counterparty validly elects for the  provisions of this Section 7(b) relating to the delivery of Shares or Alternative Delivery Units, as the case may be, not  to apply to any Payment Amount, the provisions of Article 12 of the Equity Definitions, or the provisions of Section  6(d)(ii) of the Agreement, as the case may be, shall apply.  If delivery of Shares or Alternative Delivery Units, as the  case may be, is to be made by Jefferies pursuant to this Section 7(b), the period during which Jefferies purchases  Shares or Alternative Delivery Units to fulfill its delivery obligations under this Section 7(b) shall be referred to as  the “Seller Termination Purchase Period”.   (c) Calculations and Payment Date upon Early Termination.  The parties acknowledge and agree that  in calculating (i) the Close-out Amount pursuant to Section 6 of the Agreement or (ii) the amount due upon  cancellation or termination of any Transaction (whether in whole or in part) pursuant to Article 12 of the Equity  Definitions as a result of an Extraordinary Event, Jefferies may (but need not) determine such amount based on (A)  expected losses assuming a commercially reasonable (including without limitation with regard to reasonable legal and  regulatory guidelines) risk bid were used to determine loss or (B) the price at which one or more market participants  would offer to sell to Jefferies a block of Shares equal in number to Jefferies’ hedge position in relation to the  Transaction.  Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement, all amounts calculated as  being due in respect of an Early Termination Date under Section 6(e) of the Agreement or upon cancellation or  termination of the relevant Transaction under Article 12 of the Equity Definitions will be payable on the day that  notice of the amount payable is effective; provided that if Counterparty elects to receive Shares or Alternative Delivery  

 

16  Units in accordance with clause (b) of this Section 7, such Shares or Alternative Delivery Units shall be delivered on  a date selected by Jefferies as promptly as practicable.  (d) Delivery of Cash.  For the avoidance of doubt, nothing in this Master Confirmation shall be  interpreted as requiring Counterparty to deliver cash in respect of the settlement of the Transactions contemplated by  this Master Confirmation following payment by Counterparty of the relevant Prepayment Amount, except in  circumstances where the required cash settlement thereof is permitted for classification of the contract as equity under  ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity as in effect on the relevant Trade Date  (including, without limitation, where Counterparty so elects to deliver cash or fails timely to elect to deliver Shares or  Alternative Delivery Units in respect of the settlement of such Transactions).  (e) No Netting or Set-off.  Obligations under any Transaction shall not be netted, recouped or set off  (including pursuant to Section 6 of the Agreement) against any other obligations of the parties, whether arising under  the Agreement, this Master Confirmation or any Transaction Confirmation, or under any other agreement between the  parties hereto, by operation of law or otherwise, and no other obligations of the parties shall be netted, recouped or set  off (including pursuant to Section 6 of the Agreement) against obligations under any Transaction, whether arising  under the Agreement, this Master Confirmation or any Transaction Confirmation, or under any other agreement  between the parties hereto, by operation of law or otherwise, and each party hereby waives any such right of setoff,  netting or recoupment.  (f) No Collateral.  Counterparty and Jefferies acknowledge that no Transaction entered into under this  Master Agreement is secured by any collateral that would otherwise secure the obligations of Counterparty herein or  pursuant to the Agreement.  (g) Subordinated to Level of Equity.  Jefferies acknowledges and agrees that this Master Confirmation  is not intended to convey to it rights with respect to any Transaction entered under it that are senior to the claims of  the holders of the Shares in the event of Counterparty’s bankruptcy; provided, however, that nothing herein shall limit  or shall be deemed to limit Jefferies’s right to pursue remedies in the event of a breach by Counterparty of its  obligations and agreements with respect to this Master Confirmation; and provided further that in pursuing a claim  against Counterparty in the event of a bankruptcy, insolvency or dissolution with respect to Counterparty, Jefferies’s  rights hereunder shall rank on a parity with the rights of a holder of the Shares enforcing similar rights under a contract  involving the Shares.  (h) Indemnification.  Counterparty will indemnify and hold Jefferies harmless against any losses,  claims, damages or liabilities to which Jefferies may become subject in connection with any matter referred to in this  Master Confirmation or the Transaction Confirmation for any Transaction entered into under this Master  Confirmation, except to the extent that any such loss, claim, damage or liability (i) is found in a nonappealable  judgment by a court of competent jurisdiction to have resulted from Jefferies’ willful misconduct or gross negligence  (and in such case, Jefferies shall promptly return to Counterparty any amounts previously expended by Counterparty  hereunder) or (ii) are trading losses incurred by Jefferies as part of its purchases or sales of Shares pursuant to this Master  Confirmation or any Transaction (unless such trading losses are related to the breach of any agreement, term or covenant  herein).  The obligations of Counterparty under this Section 7(h) shall be in addition to any liability which  Counterparty may otherwise have, shall extend upon the same terms and conditions to any affiliate of Jefferies and  the partners, directors, officers, agents, employees and controlling persons (if any), as the case may be, of Jefferies  and any such affiliate and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal  representatives of Counterparty, Jefferies, any such affiliate and any such person.  The foregoing provisions shall  survive any termination, completion or assignment of this Master Confirmation and/or any Transaction hereunder.  (i) Delivery Procedures and Limitation.  Notwithstanding anything to the contrary in this Master  Confirmation, Counterparty acknowledges and agrees that, on any day, Jefferies (or its agent or affiliate) shall not be  obligated to deliver or receive any Shares to or from Counterparty and Counterparty shall not be entitled to receive  any Shares if such receipt or delivery would result in Jefferies directly or indirectly beneficially owning (as such term  is defined for purposes of Section 13(d) of the Exchange Act) at any time in excess of 7.5% of the outstanding Shares.   Any purported receipt or delivery of the Shares shall be void and have no effect to the extent (but only to the extent)  that any receipt or delivery of such Shares would result in Jefferies directly or indirectly so beneficially owning in  excess of 7.5% of the outstanding Shares.  If, on any day, any delivery or receipt of the Shares by Jefferies (or its agent  

 

17  or affiliate) is not effected, in whole or in part, as a result of this provision, Jefferies’ and Counterparty’s respective  obligations to make or accept such receipt or delivery shall not be extinguished and such receipt or delivery shall be  effected over time as promptly as Jefferies reasonably determines that such receipt or delivery would not result in  Jefferies directly or indirectly beneficially owning in excess of 7.5% of the outstanding Shares.  (j) [Omitted].  (k) Severability.  If any term, provision, covenant or restriction of this Master Confirmation, the  Agreement or the Transaction Confirmation for any Transaction entered into under this Master Confirmation is held  by a court of competent jurisdiction to be invalid, void or unenforceable, the reminder of the terms, provisions,  covenants and obligations set forth herein or therein shall remain in full force and effect and shall in no way be  affected, impaired or invalidated.  (l) Headings.  Descriptive headings herein are for convenience only and shall not control or affect the  meaning or construction of any provision of this Master Confirmation.  (m) Counterparts.  This Master Confirmation may be executed by the parties hereto in counterparts, and  each such executed counterpart shall be, and shall be deemed to be, an original instrument and all such counterparts,  taken together, shall constitute one and the same instrument.  The words “execution,” “signed,” “signature,” and words  of like import in the Agreement, this Master Confirmation, any Transaction Confirmation or in any other certificate,  agreement or document related to the Agreement, this Master Confirmation or any Transaction Confirmation, if any,  shall include images of manually executed signatures transmitted by facsimile or other electronic format (including,  without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and  AdobeSign).  The use of electronic signatures and electronic records (including, without limitation, any contract or  other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same  legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping  system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and  National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law,  including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform  Commercial Code.  (n) Assignment.  Notwithstanding anything to the contrary in the Agreement or in this Master  Confirmation, Jefferies may transfer or assign its rights and obligations hereunder, in whole or in part, without the  consent of Counterparty to any affiliate of Jefferies.  Counterparty may not assign its rights or obligations hereunder,  in whole or in part, without the prior written consent of Jefferies (which consent shall not be unreasonably withheld),  and any attempt by Counterparty to assign any of its rights or obligations hereunder without such consent shall be  void. Jefferies may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities  and otherwise to perform Jefferies’s obligations in respect of any Transaction hereunder and any such designee may  assume such obligations without the written consent of Counterparty. Jefferies shall be discharged of its obligations  to Counterparty solely to the extent of any such performance. For the avoidance of doubt, Jefferies hereby  acknowledges that notwithstanding any such designation hereunder, to the extent any of Jefferies’s obligations in  respect of any Transaction are not completed by its designee, Jefferies shall be obligated to continue to perform or to  cause any other of its designees to perform in respect of such obligations.  (o) Waiver.  No failure or delay on the part of Jefferies or Counterparty in exercising any power or right  hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any  abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof  or the exercise of any other right or power.  No amendment, modification or waiver of any provision of this Master  Confirmation, the Agreement or the Transaction Confirmation for any Transaction entered into under this Master  Confirmation, nor any consent to any departure by either party therefrom shall in any event be effective unless the  same shall be in writing and, in the case of a waiver or consent, shall be effective only in the specific instance and for  the purpose for which given.  (p) Beneficiaries.  This Master Confirmation and the Transaction Confirmation for any Transaction  entered into under this Master Confirmation shall be binding upon, and inure solely to the benefit of, Counterparty,  Jefferies and, to the extent provided in clause (h) of this Section 7, the affiliates, partners, directors, officers, agents,  

 

18  employees and controlling persons, if any, of Jefferies, and their respective successors, assigns, heirs and personal  representatives, and no other person shall acquire any rights hereunder.  (q) Governing Law; Jurisdiction; Waiver of Jury Trial.    (i) The Agreement, this Master Confirmation, each Transaction Confirmation and all matters  arising in connection with the Agreement, this Master Confirmation and each Transaction Confirmation shall  be governed by and construed and enforced in accordance with the laws of the State of New York without  reference to conflict of law principles.  Each of Jefferies and Counterparty irrevocably submits to the extent  permitted under applicable law to the exclusive jurisdiction of the federal and state courts located in the  Borough of Manhattan, State of New York and waive any objection to the laying of venue in, and  inconvenient forum with respect to, such courts.  Nothing in this provision shall prohibit a party from bringing  an action to enforce a money judgment in any other jurisdiction.    (ii) Each party waives, to the fullest extent permitted by applicable law, any right it may  have to a trial by jury in respect of any suit, action or proceeding relating to this the Agreement, this  Master Confirmation and/or each Transaction Confirmation.  (r) CARES Act.  Counterparty acknowledges that each Transaction may constitute a purchase of its  equity securities or a capital distribution.  Counterparty further acknowledges that, pursuant to the provisions of the  Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Counterparty will be required to agree  to certain time-bound restrictions on its ability to purchase its equity securities or make capital distributions if it  receives loans, loan guarantees or direct loans (as that term is defined in the CARES Act) under section 4003(b) of  the CARES Act.  Counterparty further acknowledges that it may be required to agree to certain time-bound restrictions  on its ability to purchase its equity securities or make capital distributions if it receives loans, loan guarantees or direct  loans (as that term is defined in the CARES Act) under programs or facilities established by the Board of Governors  of the Federal Reserve System or the U.S. Department of Treasury for the purpose of providing liquidity to the  financial system, and may be required to agree to similar restrictions under programs or facilities established in the  future.  Accordingly, Counterparty represents and warrants that neither it nor any of its subsidiaries has applied for,  and throughout the term of each Transaction shall not apply, for a loan, loan guarantee, direct loan (as that term is  defined in the CARES Act) or other investment, or to receive any financial assistance or relief (howsoever defined)  under any program or facility that (a) is established under applicable law (whether in existence as of the date of this  Master Confirmation or subsequently enacted, adopted or amended), including without limitation the CARES Act and  the Federal Reserve Act, as amended, and (b) requires under applicable law (or any regulation, guidance, interpretation  or other pronouncement thereunder), as a condition of such loan, loan guarantee, direct loan (as that term is defined  in the CARES Act), investment, financial assistance or relief, that Counterparty or any of its subsidiaries agree, attest,  certify or warrant that it has not, as of the date specified in such condition, repurchased, or will not repurchase, any  equity security of Counterparty, and that it has not, as of the date specified in such condition, made a capital  distribution or will not make a capital distribution  (collectively, “Restricted Financial Assistance”); provided that  Counterparty may apply for Restricted Financial Assistance if Counterparty either (a) determines, based on the advice  of outside counsel of national standing, that the terms of any Transaction would not cause Counterparty to fail to  satisfy any condition for application for or receipt or retention of such loan, loan guarantee, direct loan (as that term  is defined in the CARES Act), investment, financial assistance or relief based on the terms of the program or facility  as of the date of such advice or (b) delivers to Jefferies evidence of a waiver or other guidance from a governmental  authority with jurisdiction for such program or facility that each Transaction is permitted under such program or  facility (either by specific reference to each Transaction or by general reference to transactions with attributes of each  Transaction in all relevant respects).  Counterparty further represents and warrants that the Prepayment Amount is not  being paid, in whole or in part, directly or indirectly, with funds received under or pursuant to any program or facility,  including the U.S. Small Business Administration’s “Paycheck Protection Program”, that (a) is established under  applicable law (whether in existence as of the Trade Date or subsequently enacted, adopted or amended), including  without limitation the CARES Act and the Federal Reserve Act, as amended, and (b) requires under such applicable  law (or any regulation, guidance, interpretation or other pronouncement of a governmental authority with jurisdiction  for such program or facility) that such funds be used for specified or enumerated purposes that do not include the  purchase of each Transaction (either by specific reference to each Transaction or by general reference to transactions  with the attributes of each Transaction in all relevant respects).  

 

19  8. Matters Relating to Taxes.  (a) Tax Documentation.  For the purposes of Sections 4(a)(i) and 4(a)(ii) of the Agreement,  Counterparty shall provide to Jefferies a valid and duly executed U.S. Internal Revenue Service Form W-9, or any  successor thereto, with the “corporation” box checked, (i) on or before the date of execution of this Confirmation; (ii)  promptly upon reasonable demand by the other party; and (iii) promptly upon learning that any such tax form  previously provided has become invalid, obsolete, or incorrect.  For the purposes of Sections 4(a)(i) and 4(a)(ii) of the  Agreement, Jefferies shall provide to Counterparty a valid and duly executed U.S. Internal Revenue Service Form W- 9, or any successor thereto, (i) on or before the date of execution of this Confirmation and (ii) promptly upon  reasonable demand by Counterparty.  (b) Withholding Tax Imposed on Payments to Non-US Counterparties under the United States Foreign  Account Tax Compliance Act.  “Indemnifiable Tax”, as defined in Section 14 of the Agreement shall not include any  U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the Code, any current  or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the  Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement  entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”).   For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by  applicable law for the purposes of Section 2(d) of the Agreement.  (c) Incorporation of ISDA 2015 Section 871(m) Protocol Provisions.  To the extent that either party to  the Agreement with respect to the Transaction is not an adhering party to the ISDA 2015 Section 871(m) Protocol  published by the International Swaps and Derivatives Association, Inc. on November 2, 2015 and available at  www.isda.org, as may be amended, supplemented, replaced or superseded from time to time (the “871(m) Protocol”),  the parties agree that the provisions and amendments contained in the Attachment to the 871(m) Protocol are  incorporated into and apply to the Agreement with respect to the Transaction as if set forth in full herein.  The parties  further agree that, solely for purposes of applying such provisions and amendments to the Agreement with respect to  the Transaction, references to “each Covered Master Agreement” in the 871(m) Protocol will be deemed to be  references to the Agreement with respect to the Transaction, and references to the “Implementation Date” in the  871(m) Protocol will be deemed to be references to the Trade Date of the Transaction. For greater certainty, if there  is any inconsistency between this provision and the provisions contained in any other agreement between the parties  with respect to each Transaction, this provision shall prevail unless such other agreement expressly overrides the  provisions of the Attachment to the 871(m) Protocol.  (d) Payee Tax Representations.  For the purpose of Section 3(f) of the Agreement:  (i) Jefferies makes the following representations:  (A) It is a limited liability company organized under the laws of the State of  Delaware and is treated as a disregarded entity of a New York corporation for United States federal  income tax purposes.  (B) Its’ sole member is “exempt” within the meaning of U.S. Treasury Regulations  Sections 1.6041-3(p) and 1.6049-4(c) from information reporting on Form 1099 and backup  withholding.  (ii) Counterparty makes the following representations:  (A) It is a “U.S. person” within the meaning of Treasury Regulation Section  1.1441-4(a)(3)(ii) and an exempt recipient within the meaning of Treasury Regulation Section  1.6049-4(c)(1)(ii)(A).    

 

          US-DOCS\7418141.9   By signing this Master Confirmation and returning it to Jefferies Counterparty hereby (a) agrees that it has  checked this Master Confirmation carefully for errors or discrepancies and (b) confirms that this Master Confirmation  correctly sets forth the terms of the agreement between Jefferies and Counterparty with respect to any Transaction that  Counterparty enters into with Jefferies under this Master Confirmation.      Sincerely yours,    JEFFERIES LLC        By: /s/ John Noonan   Name: John Noonan  Title: Managing Director        Agreed and Accepted By:    BLUELINX HOLDINGS INC.      By: /s/ Kelly C. Janzen   Name: Kelly C. Janzen  Title: Senior Vice President and Chief Financial Officer    

 

      A-1  US-DOCS\7418141.9 SCHEDULE A  TRANSACTION CONFIRMATION  ACCELERATED SHARE REPURCHASE TRANSACTION  Date: [                         ]  To: BlueLinx Holdings Inc.   1950 Spectrum Circle, Suite 300   Marietta, GA 30067  From: Jefferies LLC   520 Madison Avenue   New York, NY 10022    Re:  Accelerated Share Repurchase Transaction  Ladies and Gentleman:  This Transaction Confirmation confirms the terms and conditions of the Transaction entered into between  Jefferies LLC (“Jefferies”) and BlueLinx Holdings Inc. (“Counterparty”) (together, the “Contracting Parties”) on  the Trade Date specified below.  This Transaction Confirmation is a binding contract between Jefferies and  Counterparty as of the relevant Trade Date for the Transaction referenced below.  1. This Transaction Confirmation supplements, forms part of, and is subject to the Master Confirmation dated  as of May 3, 2022 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from  time to time.  All provisions contained in the Master Confirmation govern this Transaction Confirmation except as  expressly modified below.  2. The additional terms of the Transaction to which this Transaction Confirmation relates are as follows:    Trade Date: [               ]  Prepayment Amount: USD [               ]  Prepayment Date: [               ]  Forward Price Discount: USD [   ]   Valuation Period Start Date: [               ]  Initial Share Delivery Date: [               ]   Number of Initial Shares: [               ] Shares; provided that if, in connection with the Transaction,  Jefferies is unable to borrow or otherwise acquire a number of Shares  equal to the Number of Initial Shares for delivery to Counterparty on  the Initial Share Delivery Date, the Number of Initial Shares shall be  reduced to such number of Shares that Jefferies is able to so borrow or  otherwise acquire.  Scheduled Valuation Date: [               ]  First Acceleration Date: [               ]  Maximum Stock Loan Rate [      ] basis points per annum  Initial Stock Loan Rate [     ] basis points per annum  Automatic Termination Price: USD [               ]  Designated OMR Fixed Threshold: [____]    

 

A-2  US-DOCS\7418141.9 Designated OMR Percentage Threshold: For any Scheduled Trading Day, [____]% of the daily trading volume  of the Shares based on transactions executed in the United States during  the regular trading session (including any extensions thereof) of the  Exchange on such Scheduled Trading Day (without regard to pre-open  or after hours trading outside of such regular trading session for such  Scheduled Trading Day), as determined by the Calculation Agent.  3. Counterparty represents and warrants to Jefferies that neither it nor any “affiliated purchaser” (as defined in  Rule 10b-18 under the Exchange Act) of Counterparty has made any purchases of blocks pursuant to the proviso in  Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the  Trade Date or (ii) during the calendar week in which the Trade Date occurs.  4. This Transaction Confirmation may be executed in any number of counterparts, all of which shall constitute  one and the same instrument, and any party hereto may execute this Transaction Confirmation by signing and  delivering one or more counterparts.    

 

      A-3  US-DOCS\7418141.9  By signing this Transaction Confirmation and returning it to Jefferies Counterparty hereby (a) agrees that it  has checked this Transaction Confirmation carefully for errors or discrepancies and (b) confirms that this Transaction  Confirmation correctly sets forth the terms of the agreement between Jefferies and Counterparty with respect to the  Transaction between Counterparty and Jefferies to which this Transaction Confirmation relates.      Sincerely yours,    JEFFERIES LLC        By:    Name:  Title:        Agreed and Accepted By:    BLUELINX HOLDINGS INC.      By:    Name:  Title:      

 

      1  ANNEX A  COUNTERPARTY SETTLEMENT PROVISIONS  1. The following Counterparty Settlement Provisions shall apply to the extent indicated under  the Master Confirmation:  Settlement Currency: USD  Settlement Method Election: Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby  amended by deleting the word “Physical” in the sixth line thereof and  replacing it with the words “Net Share” and (ii) the Electing Party may make  a settlement method election only if the Electing Party represents and  warrants to Jefferies in writing on the date it notifies Jefferies of its election  that, as of such date, the Electing Party is not aware of any material non- public information concerning Counterparty or the Shares and is electing the  settlement method in good faith and not as part of a plan or scheme to evade  compliance with the federal securities laws.  Electing Party: Counterparty  Settlement Method  Election Date: The earlier of (i) the Scheduled Valuation Date and (ii) the Exchange  Business Day immediately following the Valuation Date (if different than the  Scheduled Valuation Date).  Default Settlement Method: Cash Settlement  Forward Cash Settlement  Amount: The Number of Shares to be Delivered multiplied by the Settlement Price.  Settlement Price: The arithmetic average of the 10b-18 VWAP Prices for the Scheduled  Trading Days in the Settlement Valuation Period plus USD 0.02, subject to  Valuation Disruption as specified in the Master Confirmation, plus interest  on such amount during the Settlement Period at the rate of interest for  Counterparty’s long term, unsecured and unsubordinated indebtedness, as  determined by the Calculation Agent.  Settlement Valuation Period: A number of consecutive Scheduled Trading Days selected by Jefferies in its  good faith and commercially reasonable reasonable discretion, beginning on  the Scheduled Trading Day immediately following the Settlement Method  Election Date.   Cash Settlement: If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute  value of the Forward Cash Settlement Amount on the Cash Settlement  Payment Date.   Cash Settlement  Payment Date: The date that is one Settlement Cycle following the last day of the Settlement  Valuation Period.  Net Share Settlement  Procedures: If Net Share Settlement is applicable, Net Share Settlement shall be made in  accordance with paragraphs 2 through 7 below.  2. Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a  number of Shares satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or  

 

2  a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value  equal to 101% (in the case of Registered Settlement Shares) or 105% (in the case of Unregistered Settlement Shares)  of the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the value thereof to  Jefferies (which value shall, in the case of Unregistered Settlement Shares, take into account a commercially  reasonable illiquidity discount), in each case as determined by the Calculation Agent.  Notwithstanding Counterparty’s  election of Net Share Settlement, if all of the conditions for delivery of either Registered Settlement Shares or  Unregistered Settlement Shares have not been met, Cash Settlement shall be applicable in accordance with paragraph  1 above.  3. Counterparty may only deliver Registered Settlement Shares pursuant to paragraph 2 above  if:  (a) a registration statement covering public resale of the Registered Settlement Shares by  Jefferies (the “Registration Statement”) shall have been filed with the Securities and Exchange Commission under  the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop  order shall be in effect with respect to the Registration Statement; a printed prospectus relating to the Registered  Settlement Shares (including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to  Jefferies, in such quantities as Jefferies shall reasonably have requested, on or prior to the date of delivery;  (b) the form and content of the Registration Statement and the Prospectus (including, without  limitation, any sections describing the plan of distribution) shall be satisfactory to Jefferies;  (c) as of or prior to the date of delivery, Jefferies and its agents shall have been afforded a  reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for  underwritten offerings of equity securities and the results of such investigation are satisfactory to Jefferies, in its  reasonable discretion; and  (d) as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been  entered into with Jefferies in connection with the public resale of the Registered Settlement Shares by Jefferies  substantially similar to underwriting agreements customary for underwritten offerings of equity securities, in form  and substance satisfactory to Jefferies, which Underwriting Agreement shall include, without limitation, provisions  substantially similar to those contained in such underwriting agreements relating, without limitation, to the  indemnification of, and contribution in connection with the liability of, Jefferies and its affiliates and the provision of  customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.  4. If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above:  (a) all Unregistered Settlement Shares shall be delivered to Jefferies (or any affiliate of  Jefferies designated by Jefferies) pursuant to the exemption from the registration requirements of the Securities Act  provided by Section 4(a)(2) thereof;  (b) as of or prior to the date of delivery, Jefferies and any potential purchaser of any such  Shares from Jefferies (or any affiliate of Jefferies designated by Jefferies) identified by Jefferies shall be afforded a  commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary  in scope for private placements of equity securities (including, without limitation, the right to have made available to  them for inspection all financial and other records, pertinent corporate documents and other information reasonably  requested by them) and the results of such investigation shall be satisfactory to Jefferies or such potential purchaser,  as the case may be, in its reasonable discretion;   (c) as of the date of delivery, Counterparty shall enter into an agreement (a “Private  Placement Agreement”) with Jefferies (or any affiliate of Jefferies designated by Jefferies) in connection with the  private placement of such shares by Counterparty to Jefferies (or any such affiliate) and the private resale of such  shares by Jefferies (or any such affiliate), substantially similar to private placement purchase agreements customary  for private placements of equity securities, in form and substance commercially reasonably satisfactory to Jefferies,  which Private Placement Agreement shall include, without limitation, provisions substantially similar to those  

 

3  contained in such private placement purchase agreements relating  to the indemnification of, and contribution in  connection with the liability of, Jefferies and its affiliates and the provision of customary opinions, accountants’  comfort letters and lawyers’ negative assurance letters, and shall provide for the payment by Counterparty of all fees  and expenses in connection with such resale, including all fees and expenses of counsel for Jefferies, and shall contain  representations, warranties, covenants and agreements of Counterparty reasonably necessary or advisable to establish  and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales;  and  (d) in connection with the private placement of such shares by Counterparty to Jefferies (or  any such affiliate) and the private resale of such shares by Jefferies (or any such affiliate), Counterparty shall, if so  requested by Jefferies, prepare, in cooperation with Jefferies, a private placement memorandum in form and substance  reasonably satisfactory to Jefferies.   5. Jefferies, itself or through an affiliate (the “Selling Agent”) or any underwriter(s), will sell  all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered  Settlement Shares and any Makewhole Shares (as defined below) (together, the “Settlement Shares”) delivered by  Counterparty to Jefferies pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and  continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as  determined by Jefferies, is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final  Resale Date”).  If the proceeds of any sale(s) made by Jefferies, the Selling Agent or any underwriter(s), net of any  fees and commissions (including, without limitation, underwriting or placement fees) customary for similar  transactions under the circumstances at the time of the offering, together with carrying charges and expenses incurred  in connection with the offer and sale of the Shares (including, but without limitation to, the covering of any over- allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward  Cash Settlement Amount, Jefferies will refund, in USD, such excess to Counterparty on the date that is three (3)  Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold,  Jefferies shall return to Counterparty on that date such unsold Shares.  6. If the Calculation Agent determines in a commercially reasonable manner in good faith that  the Net Proceeds received from the sale of the Registered Settlement Shares or Unregistered Settlement Shares or any  Makewhole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement  Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash  Settlement Amount being the “Shortfall”), Counterparty shall, on the Exchange Business Day next succeeding the  day on which such Shortfall is established (the “Makewhole Notice Date”), deliver to Jefferies, through the Selling  Agent, a notice of Counterparty’s election that Counterparty shall either (i) pay an amount in cash equal to the Shortfall  on the day that is one (1) Currency Business Day after the Makewhole Notice Date, or (ii) deliver additional Shares.   If Counterparty elects to deliver to Jefferies additional Shares, then Counterparty shall deliver additional Shares in  compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Makewhole  Shares”), on the first Clearance System Business Day which is also an Exchange Business Day following the  Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a market value on  that Exchange Business Day equal to the Shortfall.  Such Makewhole Shares shall be sold by Jefferies in accordance  with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares  and the Net Proceeds from the sale of any Makewhole Shares is less than the absolute value of the Forward Cash  Settlement Amount then Counterparty shall, at its election, either make such cash payment or deliver to Jefferies  further Makewhole Shares until such Shortfall has been reduced to zero.  7. Notwithstanding the foregoing, in no event shall the aggregate number of Settlement  Shares and Makewhole Shares be greater than the Reserved Shares minus the amount of any Shares actually delivered  by Counterparty under any other Transaction(s) under this Master Confirmation (the result of such calculation, the  “Capped Number”).  Counterparty represents and warrants (which shall be deemed to be repeated on each day that  a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined  according to the following formula:  

 

4  A – B  Where A = the number of authorized but unissued shares of the Counterparty that are not reserved  for future issuance on the date of the determination of the Capped Number; and   B = the maximum number of Shares required to be delivered to third parties if Counterparty  elected Net Share Settlement of all transactions in the Shares (other than Transactions in  the Shares under this Master Confirmation) with all third parties that are then currently  outstanding and unexercised.  “Reserved Shares” means initially, [      ] Shares.  The Reserved Shares may be increased or  decreased in a Transaction Confirmation.  If at any time, as a result of this paragraph 7, Counterparty fails to deliver to Jefferies any Settlement Shares,  Counterparty shall, to the extent that Counterparty has at such time authorized but unissued Shares not reserved for  other purposes, promptly notify Jefferies thereof and deliver to Jefferies a number of Shares not previously delivered  as a result of this paragraph 7.  Counterparty agrees to use its best efforts to cause the number of authorized but  unissued Shares to be increased, if necessary, to an amount sufficient to permit Counterparty to fulfill its obligation to  deliver any Settlement Shares.

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