Document:

abat8k20090601ex10-e.htm

    
      

      

    

    

    SERIES
C WARRANT

     

    NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND,
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT, AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.

    

    COMMON
STOCK PURCHASE WARRANT

    

    ADVANCED
BATTERY TECHNOLOGIES, INC.

     

    
      	
              Warrant
      Shares: __________

            	
              Initial
      Exercise Date: November 27, 2009

            

    

    

     

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, ________________ (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the six month anniversary of the
date hereof (the “Initial Exercise
Date”) and on or prior to the close of business on the five year
anniversary of the Initial Exercise Date  (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Advanced Battery
Technologies, Inc., a Delaware corporation (the “Company”), up to
_________ shares (the “Warrant Shares”) of
Common Stock.  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

     

    Section
1.            Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the “Purchase Agreement”),
dated May 27, 2009, among the Company and the purchasers signatory
thereto.

     

    Section
2.             Exercise.

    

    
      
        
           

        

        
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    a)           Exercise of
Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto; and, within three (3) Trading Days of
the date said Notice of Exercise is delivered to the Company, the Company shall
have received  payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States
bank or, if available, pursuant to the cashless exercise procedure specified in
Section 2(c) below.  Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the
Company until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which case, the Holder
shall surrender this Warrant to the Company for cancellation within three (3)
Trading Days of the date the final Notice of Exercise is delivered to the
Company.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.  The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such
purchases.  The Company shall deliver any objection to any Notice of
Exercise Form within 1 Business Day of receipt of such notice.  In the
event of any dispute or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error. The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face hereof.
NOTWITHSTANDING ANY PROVISION OF THIS WARRANT TO THE CONTRARY, NO MORE THAN THE
MAXIMUM ELIGIBILITY NUMBER OF WARRANT SHARES SHALL BE EXERCISABLE HEREUNDER.
As used herein, "Maximum Eligibility Number"
means initially zero and shall be increased each time the Holder exercises its Series
B Warrant issued to the Holder by the Company pursuant to the Purchase Agreement
by an amount equal to twenty-five percent (25%) of the number of Warrant Shares
issued to the Holder under such Series B Warrant.

     

    b)           Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $5.68, subject to adjustment
hereunder (the “Exercise
Price”).

     

    c)           Cashless
Exercise.  If at any time after the six (6) month anniversary
of the date this Warrant was issued to the Holder, there is no effective
Registration Statement registering, or no current prospectus available for, the
resale of the Warrant Shares by the Holder, then this Warrant may also be
exercised, in whole or in part, at such time by means of a “cashless exercise”
in which the Holder shall be entitled to receive a certificate for the number of
Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

     

    
      
        
          	 
      	
                  (A)
      =

                	
                  the
      VWAP on the Trading Day immediately preceding the date on which Holder
      elects to exercise this Warrant by means of a “cashless exercise,” as set
      forth in the applicable Notice of Exercise;

                
	 
      	 
      	 
      
	 
      	
                  (B)
      =

                	
                  the
      Exercise Price of this Warrant, as adjusted hereunder;
  and

                
	 
      	 
      	 
      
	 
      	
                  (X)
      =

                	
                  the
      number of Warrant Shares that would be issuable upon exercise of this
      Warrant in accordance with the terms of this Warrant if such exercise were
      by means of a cash exercise rather than a cashless
    exercise.

                

        

      

    

    

    
      
        
           

        

        
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    Notwithstanding
anything herein to the contrary and subject to Section 2(e), on the Termination
Date, this Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c).

    

    
      d)         
 Mechanics of
Exercise.

    

     

    i.      Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through
its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is then a participant in such system and either (A) there is an
effective Registration Statement permitting the issuance of the Warrant Shares
to or resale of the Warrant Shares by the Holder or (B) the shares are eligible
for resale by the Holder without volume or manner-of-sale limitations pursuant
to Rule 144, and otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise by the date that is three (3) Trading Days
after the latest of (A) the delivery to the Company of the Notice of Exercise
Form, (B) surrender of this Warrant (if required), and (C) payment of the
aggregate Exercise Price as set forth above (including by cashless exercise, if
permitted) (such date, the “Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the first date on which all of the foregoing have been delivered to the
Company.  The Warrant Shares shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been exercised, with payment to the Company of the Exercise
Price (or by cashless exercise, if permitted) and all taxes required to be paid
by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of
such shares, having been paid.  If the Company fails for any reason to
deliver to the Holder certificates evidencing the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to
the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
of Warrant Shares subject to such exercise (based on the VWAP of the Common
Stock on the date of the applicable Notice of Exercise), $10 per Trading Day
(increasing to $20 per Trading Day on the fifth Trading Day after such
liquidated damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such certificates are delivered or Holder rescinds
such exercise.

    

    
      
        
           

        

        
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    ii.          Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

     

    iii.         Rescission
Rights.  If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the
Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date,
then, the Holder will have the right to rescind such exercise.

     

    iv.         Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise.  In
addition to any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to an exercise on or
before the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a “Buy-In”), then the
Company shall , within three (3) Trading Days after the Holder's request and in
the Holder's discretion, either (i) pay cash to the Holder in an amount equal to
the Holder's total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased (the "Buy-In Price"), at
which point the Company's obligation to deliver such certificate (and to issue
such Warrant Shares or credit such Holder's balance account with The Depository
Trust Company ("DTC")) shall
terminate, or (ii) promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such Warrant Shares or credit such
Holder's balance account with DTC and pay cash to the Holder in an amount equal
to the excess (if any) of the Buy-In Price over the product of (A) such number
of shares of Common Stock, times (B) the VWAP on the date of
exercise.  The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon
request of the Company, evidence of the amount of such loss.  Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

    

    
      
        
           

        

        
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    v.         No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole
share.

     

    vi.         Charges, Taxes and
Expenses.  Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

     

    vii.         Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

     

    

    
      
        
           

        

        
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    e)           Holder’s Exercise
Limitations.  The Company shall not effect any exercise of this
Warrant, and a Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the applicable Notice of
Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s
Affiliates), would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other  Common Stock
Equivalents) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its
Affiliates.  Except as set forth in the preceding sentence, for purposes of
this Section 2(e), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
the rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Holder is solely
responsible for any schedules required to be filed in accordance
therewith.   To the extent that the limitation contained in this
Section 2(e) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable shall be in the
sole discretion of the Holder, and the submission of a Notice of Exercise shall
be deemed to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is exercisable, in each
case subject to the Beneficial Ownership Limitation, and the Company shall have
no obligation to verify or confirm the accuracy of such
determination.   In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder.  For purposes of this Section 2(e), in determining the
number of outstanding shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a
more recent public announcement by the Company or (C) a more recent written
notice by the Company or the Transfer Agent setting forth the number of shares
of Common Stock outstanding.  Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding.  In any case,
the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported.  The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant.  The Holder upon written
notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock upon exercise of this Warrant held by the Holder and the
provisions of this Section 2(e) shall continue to apply.  Any such
increase will not be effective until the 61st day
after such notice is delivered to the Company.  The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(e) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.

    

    
      
        
           

        

        
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    Section
3.             Certain
Adjustments.

     

    a)           Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise makes a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares or (iv)
issues by reclassification of shares of the Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event, and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged.  Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.

     

    b)           RESERVED.

     

    c)           Subsequent Rights
Offerings.  If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to the Holders) entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the VWAP on the record
date mentioned below, then, the Exercise Price shall be multiplied by a
fraction, of which the denominator shall be the number of shares of the Common
Stock outstanding on the date of issuance of such rights, options or warrants
plus the number of additional shares of Common Stock offered for subscription or
purchase, and of which the numerator shall be the number of shares of the Common
Stock outstanding on the date of issuance of such rights, options or warrants
plus the number of shares which the aggregate offering price of the total number
of shares so offered (assuming receipt by the Company in full of all
consideration payable upon exercise of such rights, options or warrants) would
purchase at such VWAP.  Such adjustment shall be made whenever such
rights, options or warrants are issued, and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such rights, options or warrants.

     

    d)           Pro Rata
Distributions.  If the Company, at any time while this Warrant
is outstanding, shall distribute to all holders of Common Stock (and not to the
Holders) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than the Common Stock), then in each such case the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the VWAP determined
as of the record date mentioned above, and of which the numerator shall be such
VWAP on such record date less the then per share fair market value at such
record date of the portion of such assets or evidence of indebtedness or rights
or warrants so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith.  In
either case the adjustments shall be described in a statement provided to the
Holder of the portion of assets or evidences of indebtedness so distributed or
such subscription rights applicable to one share of Common
Stock.  Such adjustment shall be made whenever any such distribution
is made and shall become effective immediately after the record date mentioned
above.

    

    
      
        
           

        

        
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    e)           Fundamental
Transaction. If, at any time while this Warrant is outstanding, in one or
more related transactions (i) the Company or any of its Subsidiaries, directly
or indirectly, in one or more related transactions effects any merger or
consolidation of the Company or any of its Subsidiaries with or into another
Person, (ii) the Company, directly or indirectly, effects any sale, lease,
license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions,
(iii) any, direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to sell, tender or exchange their shares
for other securities, cash or property and has been accepted by the holders of
50% or more of the outstanding Common Stock, (iv) the Company, directly or
indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property, (v) the Company, directly or
indirectly, in one or more related transactions consummates a stock or share
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination), or (vi) any "person" or
"group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act), to become the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary
voting power represented by issued and outstanding Common Stock (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration
(the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by
a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to
any limitation in Section 2(e) on the exercise of this Warrant).  For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the

    
      
        
           

        

        
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    Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration.  If holders of
Common Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction.  Notwithstanding
anything to the contrary, in the event of a Fundamental Transaction or a Change
of Control Transaction (as defined in the Certificate of Designation) other than
one in which a Successor Entity (as defined below) that is a publicly traded
corporation whose stock is quoted or listed for trading on an Eligible Market
assumes this Warrant such that the Warrant shall be exercisable for the publicly
traded Common Stock of such Successor Entity, the Company or any Successor
Entity  shall, at the Holder’s option, exercisable at any time
concurrently with, or within 30 days after, the consummation of the Fundamental
Transaction or the Change of Control Transaction, as applicable, purchase
this Warrant from the Holder by paying to the Holder an amount of cash
equal to the Black Scholes Value of the remaining unexercised portion of this
Warrant on the date of the consummation of such Fundamental Transaction or such
Change of Control Transaction, as applicable.  As used herein (w)
“Black
Scholes Value” means the value of this Warrant based on the Black and
Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P.
(“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date, (B) an expected volatility equal to the greater of
100% and the 100 day volatility obtained from the HVT function on Bloomberg as
of the Trading Day immediately following the public announcement of the
applicable Fundamental Transaction, (C) the underlying price per share used in
such calculation shall be the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in
such Fundamental Transaction and (D) a remaining option time equal to the time
between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date, (x) “Successor
Entity"
means the
Person
(as defined in the Purchase Agreement) (or, if so elected by the Holder, the
Parent Entity (as defined below)) formed by, resulting from or surviving any
Fundamental Transaction or the Person (or, if so elected by the Holder, the
Parent Entity) with which
such Fundamental Transaction shall have been entered into, (y) "Eligible
Market"
means the NYSE Amex, The NASDAQ Capital Market, The NASDAQ Global Market,
The NASDAQ Global Select Market or the New York Stock Exchange (or any
successors to any of the foregoing)
and (z) "Parent
Entity"
of a Person means an
entity that, directly or indirectly, controls the applicable Person and whose
common
stock or equivalent equity security is quoted or listed on an Eligible
Market,
or, if there is more than one such Person
or Parent Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.  The Company shall cause any Successor Entity to
assume in writing all of the obligations of the Company under this Warrant and
the other Transaction Documents in accordance with the provisions of this
Section 3(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such

    
      
        
           

        

        
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    Fundamental
Transaction and shall, at the option of the holder of this Warrant, deliver to
the Holder in exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance to
this Warrant which is exercisable for a corresponding number of shares of
capital stock of such Successor Entity (or its parent entity) equivalent to the
shares of Common Stock acquirable and receivable upon exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) prior to
such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into
account the relative value of the shares of Common Stock pursuant to such
Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for the purpose
of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any
such Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the
Company herein.

     

    f)           Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.  Upon each such
adjustment of the Exercise Price hereunder, the number of Warrant Shares shall
be adjusted to the number of shares of Common Stock determined by multiplying
the Exercise Price in effect immediately prior to such adjustment by the number
of Warrant Shares acquirable upon exercise of this Warrant immediately prior to
such adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment. No adjustment pursuant to this Section 3 will increase the
Exercise Price or decrease the number of Warrant Shares.

     

    g)           Notice to
Holder.

     

    i.      Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a notice
setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. If the Company enters into a
Variable Rate Transaction, despite the prohibition thereon in the Purchase
Agreement, the Company shall be deemed to have issued Common Stock or Common
Stock Equivalents at the lowest possible conversion or exercise price at which
such securities may be converted or exercised.

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

     

    ii.           Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice.  To the extent that
any notice provided hereunder constitutes, or contains, material, non-public
information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K.  The Holder shall remain entitled to exercise this
Warrant during the period commencing on the date of such notice to the effective
date of the event triggering such notice  except as may otherwise be
expressly set forth herein.

     

    Section
4.             Transfer of
Warrant.

     

    a)           Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase
Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  The Warrant, if properly
assigned in accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

     

    b)           New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney.  Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated
the Initial Exercise Date and shall be identical with this Warrant except as to
the number of Warrant Shares issuable pursuant thereto.

     

    c)           Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

     

    d)           Transfer
Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall
not be either (i) registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or
blue sky laws or (ii) eligible for resale without volume or manner-of-sale
restrictions or current public information requirements pursuant to Rule 144,
the Company may require, as a condition of allowing such transfer, that the
Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section
5.7 of the Purchase Agreement.

     

    e)           Representation by the
Holder.  The Holder, by the acceptance hereof, represents and
warrants that it is acquiring this Warrant and, upon any exercise hereof, will
acquire the Warrant Shares issuable upon such exercise, for its own account and
not with a view to or for distributing or reselling such Warrant Shares or any
part thereof in violation of the Securities Act or any applicable state
securities law, except pursuant to sales registered or exempted under the
Securities Act.

     

    Section
5.             Miscellaneous.

     

    a)           No Rights as Stockholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights, dividends or other rights as a stockholder of the Company
prior to the exercise hereof as set forth in Section 2(d)(i).

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

     

    b)           Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     

    c)           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then, such action may be taken or such right may be exercised
on the next succeeding Business Day.

     

    d)           Authorized
Shares.

     

    The
Company covenants that, during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant.  The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant.  The Company will
take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed.  The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant and payment for such Warrant Shares in accordance herewith, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with
such issue).

     

    Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment.  Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may be,
necessary to enable the Company to perform its obligations under this
Warrant.

    

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

     

    Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

     

    e)           Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.

     

    f)           Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered and the Holder does not utilize cashless exercise,
will have restrictions upon resale imposed by state and federal securities
laws.

     

    g)           Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

     

    h)           Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

     

    i)           Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

     

    j)           Remedies.  The
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant.  The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law
would be adequate.

    

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

     

    k)           Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder.  The provisions of this
Warrant are intended to be for the benefit of any Holder from time to time of
this Warrant and shall be enforceable by the Holder or holder of Warrant
Shares.

     

    l)           Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and Holders holding Warrants at least equal to
100% of the Warrant Shares issuable upon exercise of all then outstanding
Warrants.

     

    m)           Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

     

    n)           Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

     

    

    ********************

    

    

    (Signature
Pages Follow)

     

    

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.

     

    

    
 

    
      
        	
                ADVANCED
      BATTERY TECHNOLOGIES, INC.

                 

                 

              
	
                By:__________________________________________

                     Name:

                     Title:

                 

              

      

    

    

    

    

    
      
        
           

        

        
          16

          
            

          

        

        
           

        

      

    

    

    NOTICE
OF EXERCISE

    

    TO:           ADVANCED
BATTERY TECHNOLOGIES, INC.

    

    (1)           The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

     

    (2)           Payment
shall take the form of (check applicable box):

     

    [  ]
in lawful money of the United States; or

     

    [ ] [if
permitted] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection
2(c).

     

    (3)           Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

     

    _______________________________

    

    

    The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

    

    _______________________________

    

    _______________________________

    

    _______________________________

    

    (4)  Accredited
Investor.  If the Warrant is not being exercised pursuant to
Subsection 2(c), the undersigned hereby represents it is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

    

    [SIGNATURE
OF HOLDER]

    

    Name of
Investing Entity:
_______________________________________________________________________

    Signature of Authorized Signatory of
Investing Entity:
_________________________________________________

    Name of
Authorized Signatory:
___________________________________________________________________

    Title of
Authorized Signatory:
____________________________________________________________________

    Date:
_______________________________________________________________________________________

    

    

    

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

     

    ASSIGNMENT
FORM

    

    (To
assign the foregoing warrant, execute

    this form
and supply required information.

    Do not
use this form to exercise the warrant.)

    

    

    

    FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to

     

    

    _______________________________________________
whose address is

    

    _______________________________________________________________.

    

    

    

    _______________________________________________________________

    

    Dated:  ______________,
_______

    
       

      

        
          
            
              	 
      	
                      Holder’s
      Signature:

                    	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      Holder’s
      Address:

                    	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

            

          

        

      

    

     

    

    

    Signature
Guaranteed:  ___________________________________________

    

    

    NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.Exhibit 10.1

 

EXECUTION VERSION

 

JPMorgan Chase Bank, National Association

P.O. Box 161

60 Victoria Embankment

London EC4Y 0JP

England

 

	
   

  	
  May 28,
  2009

  

 

To: Take-Two Interactive
Software, Inc.

622 Broadway

New York, New York

Attention: Treasurer

Telephone No.:   (646)
536-2842

Facsimile No.:    (646) 941-3566

 

Re: Call Option Transaction

 

The purpose of this letter agreement (this “Confirmation”)
is to confirm the terms and conditions of the call option transaction entered
into between JPMorgan Chase Bank, National Association, London Branch (“Dealer”) and  Take-Two
Interactive Software, Inc. (“Counterparty”)
as of the Trade Date specified below (the “Transaction”).  This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below.  This Confirmation shall replace any previous
agreements and serve as the final documentation for this Transaction.

 

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.
(“ISDA”) are incorporated into this
Confirmation.  In the event of any
inconsistency between the Equity Definitions and this Confirmation, this
Confirmation shall govern.  Certain defined
terms used herein have the meanings assigned to them in the Prospectus dated May 27,
2009, as supplemented by the Prospectus Supplement dated May 28, 2009 (as
so supplemented, the “Prospectus”)
relating to the USD 120,000,000 principal amount of Convertible Senior Notes
due June 1, 2014 (the “Convertible Notes”
and each USD 1,000 principal amount of Convertible Notes, a “Convertible Note”) issued by Counterparty pursuant to the
Indenture to be dated June 3, 2009 (the “Base
Indenture”), as supplemented by a Supplemental Indenture thereto
(the “Supplemental Indenture”) to be dated June 3,
2009, between Counterparty and The Bank of New York Mellon, as trustee (the
Base Indenture as so supplemented, the “Indenture”).  In the event of any inconsistency between the
terms defined in the Prospectus, the Indenture and this Confirmation, this
Confirmation shall govern. The parties acknowledge that this Confirmation is
entered into on the date hereof with the understanding that (i) definitions
set forth in the Indenture which are also defined herein by reference to the
Indenture and (ii) sections of the Indenture that are referred to herein
will conform to the descriptions thereof in the Prospectus.  If any such definitions in the Indenture or
any such sections of the Indenture differ from the descriptions thereof in the
Prospectus, the descriptions thereof in the Prospectus will govern for purposes
of this Confirmation.  The parties
further acknowledge that the Indenture section numbers used herein are based on
the draft of the Indenture last reviewed by Dealer as of the date of this
Confirmation, and if any such section numbers are changed in the Indenture as
executed, the parties will amend this Confirmation in good faith to preserve
the intent of the parties.  For the
avoidance of doubt, references to the Indenture herein are references to the
Indenture as in effect on the date of its execution and if the Indenture is
amended following its execution, any such amendment will be disregarded for
purposes of this Confirmation unless the parties agree otherwise in writing.

 

JPMorgan Chase Bank, National Association 

Organised under the laws of the United States as a National Banking Association

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271

Registered as a branch in England & Wales branch No. BR000746 

Registered Branch Office 125 London Wall, London EC2Y 5AJ

Authorised and regulated by the Financial Services Authority

 

 

Each party is hereby advised, and each such party acknowledges, that
the other party has engaged in, or refrained from engaging in, substantial
financial transactions and has taken other material actions in reliance upon
the parties’ entry into the Transaction to which this Confirmation relates on
the terms and conditions set forth below.

 

1.                                       This
Confirmation evidences a complete and binding agreement between Dealer and
Counterparty as to the terms of the Transaction to which this Confirmation
relates.  This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the
2002 ISDA Master Agreement (the “Agreement”) as
if Dealer and Counterparty had executed an agreement in such form (but without
any Schedule except for (i) the election of the laws of the State of New
York as the governing law (without
reference to choice of law doctrine) and (ii) the election that Section 5(a)(v) of
the Agreement shall not apply to either party) on the Trade Date.  In the event of any inconsistency between
provisions of the Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation
relates.  The parties hereby agree that
no Transaction other than the Transaction to which this Confirmation relates
shall be governed by the Agreement.

 

2.                                       The
terms of the particular Transaction to which this Confirmation relates are as
follows:

 

General Terms:

 

	
  Trade Date:

  	
   

  	
  May 28, 2009

  
	
   

  	
   

  	
   

  
	
  Effective Date:

  	
   

  	
  The third Exchange Business Day immediately prior to the Premium
  Payment Date

  
	
   

  	
   

  	
   

  
	
  Option Style:

  	
   

  	
  “Modified American”, as described under “Procedures for Exercise”
  below

  
	
   

  	
   

  	
   

  
	
  Option Type:

  	
   

  	
  Call

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
   

  	
  Counterparty

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  Dealer

  
	
   

  	
   

  	
   

  
	
  Shares:

  	
   

  	
  The common stock of Counterparty, par value USD 0.01 per Share
  (Exchange symbol “TTWO”)

  
	
   

  	
   

  	
   

  
	
  Number of
  Options:

  	
   

  	
  [      ].
  For the avoidance of doubt, the Number of Options shall be reduced by any
  Options exercised by Counterparty. In no event will the Number of Options be
  less than zero.

  
	
   

  	
   

  	
   

  
	
  Applicable
  Percentage:

  	
   

  	
  [      ]%

  
	
   

  	
   

  	
   

  
	
  Option Entitlement:

  	
   

  	
  As of any date, a number equal to the product of the Applicable
  Percentage and the Conversion Rate as of such date (as defined in the
  Supplemental Indenture, but without regard to any adjustments to the
  Conversion Rate pursuant to Section 9.04(g) or (h) or
  Section 9.06 of the Supplemental Indenture and subject to “Method of
  Adjustment” below), for each Convertible Note.

  
	
   

  	
   

  	
   

  
	
  Strike Price:

  	
   

  	
  USD 10.6750

  
	
   

  	
   

  	
   

  
	
  Premium:

  	
   

  	
  USD [      ]

  
	
   

  	
   

  	
   

  
	
  Premium
  Payment Date:

  	
   

  	
  June 3,
  2009

  
	
   

  	
   

  	
   

  
	
  Exchange:

  	
   

  	
  The NASDAQ
  Global Select Market

  

 

2

 

	
  Related Exchange(s):

  	
   

  	
  All Exchanges

  

 

Procedures for Exercise:

 

	
  Exercise
  Period(s):

  	
   

  	
  Notwithstanding
  anything to the contrary in the Equity Definitions, an Exercise Period shall
  occur with respect to an Option hereunder only if such Option is an
  Exercisable Option (as defined below) and the Exercise Period shall be, in
  respect of any Exercisable Option, the period commencing on, and including,
  the relevant Conversion Date and ending on, and including, the Scheduled
  Valid Day immediately preceding the first day of the relevant Settlement
  Averaging Period in respect of such Conversion Date; provided
  that (i) in respect of Exercisable Options relating to Convertible Notes
  for which the relevant Conversion Date occurs on or after December 1,
  2013, the final day of the Exercise Period shall be the Scheduled Valid Day
  immediately preceding the Expiration Date and (ii) in respect of
  Exercisable Options relating to Convertible Notes for which the relevant
  Conversion Date occurs after the Convertible Notes have been called for
  redemption (including after December 1, 2013) pursuant to
  Section 10.01 of the Supplemental Indenture, the final day of the
  Exercise Period shall be the Scheduled Valid Day immediately preceding the
  Scheduled Redemption Date (as defined below).

  
	
   

  	
   

  	
   

  
	
  Conversion
  Date:

  	
   

  	
  With respect
  to any conversion of Convertible Notes, the date on which the Holder (as such
  term is defined in the Supplemental Indenture) of such Convertible Notes
  satisfies all of the requirements for conversion thereof as set forth in
  Section 9.02(b) of the Supplemental Indenture.

  
	
   

  	
   

  	
   

  
	
  Exercisable
  Options:

  	
   

  	
  In respect
  of any Exercise Period (the “Relevant Exercise Period”),
  the lesser of (i) the number of Convertible Notes surrendered to
  Counterparty for conversion on the first day of the Relevant Exercise Period,
  and (ii) the Number of Options as of the first day of the Relevant
  Exercise Period; provided that
  if there are any other Exercisable Options as to which a prior Exercise
  Period has commenced but no Exercise Date has yet occurred which would
  thereby reduce the Number of Options as of the related Exercise Date (such
  other Exercisable Options, the “Other Exercisable
  Options”), then solely for the purposes of determining the number
  of Exercisable Options for the Relevant Exercise Period, the Number of
  Options on the first day of the Relevant Exercise Period shall be reduced by
  such Other Exercisable Options.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notwithstanding
  the foregoing, in no event shall the number of Exercisable Options exceed the
  Number of Options.

  
	
   

  	
   

  	
   

  
	
  Expiration
  Time:

  	
   

  	
  The
  Valuation Time

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  June 1,
  2014, subject to earlier exercise.

  
	
   

  	
   

  	
   

  
	
  Multiple
  Exercise:

  	
   

  	
  Applicable,
  as described under Exercisable Options above.

  

 

3

 

	
  Automatic
  Exercise:

  	
   

  	
  Applicable;
  and means that in respect of an Exercise Period, a number of Options not
  previously exercised hereunder equal to the number of Exercisable Options
  shall be deemed to be exercised on the final day of such Exercise Period for
  such Exercisable Options; provided that
  such Options shall be deemed exercised only to the extent that Counterparty
  has provided to Dealer a Notice of Exercise.

  
	
   

  	
   

  	
   

  
	
  Notice of
  Exercise:

  	
   

  	
  Notwithstanding
  anything to the contrary in the Equity Definitions, in order to exercise any
  Exercisable Options, Counterparty must notify Dealer in writing before
  5:00 p.m. (New York City time) on the Scheduled Valid Day prior to the
  scheduled first day of the Settlement Averaging Period for the Exercisable Options
  being exercised of (i) the number of such Options, (ii) the
  scheduled first day of the Settlement Averaging Period and the scheduled
  Settlement Date, (iii) the Relevant Settlement Method for such
  Exercisable Options, and (iv) if the Relevant Settlement Method for such
  Exercisable Options is not Net Share Settlement, the fixed amount of cash per
  Convertible Note that Counterparty has elected to deliver to holders of the
  related Convertible Notes (the “Specified Cash Amount”),
  together with any representations, acknowledgements and agreements set forth
  under “Settlement Method Election Conditions” below; provided
  that in respect of Exercisable Options relating to Convertible Notes with a
  Conversion Date occurring on or after December 1, 2013, (A) such notice
  may be given on or prior to the second Scheduled Valid Day immediately
  preceding the Expiration Date and need only specify the information required
  in clause (i) above, and (B) if the Relevant Settlement Method for
  such Exercisable Options is not Net Share Settlement, Dealer shall have
  received a separate notice (“Notice of Final
  Settlement Method”) in respect of all such Convertible Notes
  before 5:00 p.m. (New York City time) on or prior to December 1,
  2013 specifying the information required in clauses (iii) and
  (iv) above; provided further
  that in respect of Exercisable Options relating to any Convertible Notes for
  which the relevant Conversion Date occurs after the Convertible Notes have
  been called for redemption (including after December 1, 2013) pursuant
  to Section 10.01 of the Supplemental Indenture, (A) such notice may
  be given on or prior to the second Scheduled Valid Day immediately preceding
  the Scheduled Redemption Date (as defined below) and need only specify the
  information required in clause (i) above and (B) Dealer shall have
  received a Notice of Early Redemption as specified below.

  
	
   

  	
   

  	
   

  
	
  Notice of
  Early Redemption:

  	
   

  	
  In order to
  exercise any Exercisable Options relating to Convertible Notes that have been
  called for redemption pursuant to Section 10.01 of the Supplemental
  Indenture, Counterparty must notify Dealer in writing before 5:00 p.m.
  (New York City time) on the Scheduled Valid Day immediately preceding the
  fifty-fourth (54th) Scheduled Valid Day immediately prior to the
  scheduled redemption date specified by Counterparty for such Convertible
  Notes pursuant to Section 10.01 of the Supplemental Indenture (the “Scheduled Redemption Date”) of (i) the Scheduled
  Redemption Date, (ii) the Relevant Settlement Method for such
  Exercisable Options, and (iii) if the Relevant Settlement 

  

 

4

 

	
   

  	
   

  	
  Method for
  such Exercisable Options is not Net Share Settlement, the Specified Cash
  Amount, together with any representations, acknowledgements and agreements
  set forth under “Settlement Method Election Conditions” below.

  
	
   

  	
   

  	
   

  
	
  Valuation Time:

  	
   

  	
  At the close of trading of the regular trading session on the
  Exchange; provided that if the principal trading
  session is extended, the Calculation Agent shall determine the Valuation Time
  in its reasonable discretion.

  
	
   

  	
   

  	
   

  
	
  Market Disruption Event:

  	
   

  	
  Section 6.3(a) of the Equity Definitions is hereby replaced
  in its entirety by the following:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “‘Market Disruption Event’ means, in respect of a Share, (i) a
  failure by the primary United States national or regional securities exchange
  or market on which the Shares are listed or admitted to trading to open for
  trading during its regular trading session or (ii) the occurrence or
  existence prior to 1:00 p.m., New York City time, on any Scheduled Valid
  Day for the Shares for more than one half-hour period in the aggregate during
  regular trading hours of any suspension or limitation imposed on trading (by
  reason of movements in price exceeding limits permitted by the relevant stock
  exchange or otherwise) in the Shares or in any options, contracts or future
  contracts relating to the Shares.”

  

 

Settlement Terms:

 

	
  Settlement Method:

  	
   

  	
  For any Exercisable Option, Net Share
  Settlement; provided that the Relevant
  Settlement Method set forth below for such Exercisable Option shall apply,
  but only if the Settlement Method Election Conditions have been satisfied and
  Counterparty shall have notified Dealer of the Relevant Settlement Method in
  the Notice of Exercise, Notice of Final Settlement Method or Notice of Early
  Redemption, as applicable, for such Exercisable Option.

  
	
   

  	
   

  	
   

  
	
  Relevant Settlement Method:

  	
   

  	
  In respect of any Exercisable Option,
  subject to the Settlement Method Election Conditions:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)      if Counterparty has
  elected to settle its conversion obligations in respect of the related
  Convertible Note entirely in Shares (together with cash in lieu of fractional
  Shares), then the Relevant Settlement Method for such Exercisable Option
  shall be Net Share Settlement;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)     if Counterparty has
  elected to settle its conversion obligations in respect of the related
  Convertible Note in a combination of cash and Shares, then the Relevant
  Settlement Method for such Exercisable Option shall be Combination
  Settlement; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)    if Counterparty has
  elected to settle its conversion obligations in respect of the related
  Convertible Note entirely in cash, then the Relevant Settlement Method for
  such Exercisable Option shall be Cash Settlement.

  

 

5

 

	
  Settlement Method Election Conditions:

  	
   

  	
  For any Relevant Settlement Method other
  than Net Share Settlement, such Relevant Settlement Method shall apply only
  if the Notice of Exercise, the Notice of Final Settlement Method or the
  Notice of Early Redemption for such Exercisable Option, as applicable,
  notifying Dealer of the Relevant Settlement Method contains a representation
  that, on the date of such Notice of Exercise, Notice of Final Settlement
  Method or Notice of Early Redemption, as applicable, Counterparty is not in
  possession of any material non-public information with respect to
  Counterparty or the Shares.

  
	
   

  	
   

  	
   

  
	
  Net Share Settlement:

  	
   

  	
  If Net Share Settlement is applicable to any Exercisable Option
  exercised or deemed exercised hereunder, Dealer will deliver to Counterparty,
  on the relevant Settlement Date for each such Exercisable Option a number of
  Shares (the “Net Share Settlement Amount”)
  equal to the sum, for each Valid Day during the Settlement Averaging Period
  for each such Exercisable Option, of (i) the Daily Option Value for such
  Valid Day, divided by (ii) the
  Relevant Price on such Valid Day, divided by
  (iii) the number of Valid Days in the Settlement Averaging Period; provided that in no event shall the Net Share Settlement
  Amount exceed a number of Shares equal to the product of the Applicable
  Percentage and the excess of (i) the aggregate number of Shares that
  Counterparty is obligated to deliver to the holder of the related Convertible
  Note pursuant to Section 9.03(b) of the Supplemental Indenture,
  over (ii) a number of Shares equal to USD 1,000 divided by
  the Relevant Price on the last Valid Day of the Settlement Averaging Period.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dealer will deliver cash in lieu of any fractional Shares to be
  delivered with respect to any Net Share Settlement Share Amount valued at the
  Relevant Price for the last Valid Day of the Settlement Averaging Period.

  
	
   

  	
   

  	
   

  
	
  Combination Settlement:

  	
   

  	
  If Combination Settlement is applicable to any Exercisable Option
  exercised or deemed exercised hereunder, Dealer will deliver to Counterparty,
  on the relevant Settlement Date for each such Exercisable Option:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) an amount of cash (the “Combination Settlement
  Cash Amount”) equal to the sum, for each Valid Day during the
  Settlement Averaging Period for such Exercisable Option, of (A) an
  amount (the “Daily Combination Settlement Cash Amount”)
  equal to the lesser of (1) the product of (x) the Applicable
  Percentage and (y) the Specified Cash Amount minus
  USD 1,000 and (2) the Daily Option Value, divided by
  (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in clause (1) above
  results in a negative number for any Valid Day, the Combination Settlement
  Cash Amount and the Daily Combination Settlement Cash Amount for such Valid
  Day shall each be deemed to be zero; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) a number of Shares (the “Combination
  Settlement Share Amount”) equal to the sum, for each Valid Day
  during the Settlement Averaging Period for such Exercisable Option, of
  (A) the Daily Option Value on such Valid Day minus
  Daily 

  

 

6

 

	
   

  	
   

  	
  Combination Settlement Cash Amount for such Valid Day, divided by (B) the Relevant Price on such Valid Day, divided by (C) the number of Valid Days in the
  Settlement Averaging Period; provided that
  if the calculation in clause (A) above results in a negative number for
  any Valid Day, the Combination Settlement Share Amount for such Valid Day
  shall be deemed to be zero.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dealer will deliver cash in lieu of any fractional Shares to be
  delivered with respect to any Combination Settlement Share Amount valued at
  the Relevant Price for the last Valid Day of the Settlement Averaging Period.

  
	
   

  	
   

  	
   

  
	
  Cash Settlement:

  	
   

  	
  If Cash Settlement is applicable to any Exercisable Option exercised
  or deemed exercised hereunder, in lieu of Section 8.1 of the Equity
  Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date
  for each such Exercisable Option, an amount of cash equal to the sum, for
  each Valid Day during the Settlement Averaging Period for such Exercisable
  Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the
  Settlement Averaging Period.

  
	
   

  	
   

  	
   

  
	
  Daily Option Value:

  	
   

  	
  For any Valid Day, an amount equal to (i) the Option Entitlement
  on such Valid Day multiplied by
  (ii) the Relevant Price on such Valid Day less the
  Strike Price on such Valid Day; provided that
  if the calculation contained in clause (ii) above results in a negative
  number, the Daily Option Value for such Valid Day shall be deemed to be zero.
  In no event will the Daily Option Value be less than zero.

  
	
   

  	
   

  	
   

  
	
  Valid Day:

  	
   

  	
  A day on which (i) there is no Market Disruption Event and
  (ii) trading in the Shares generally occurs on the Exchange or, if the
  Shares are not then listed on the Exchange, on the principal other United
  States national or regional securities exchange on which the Shares are then
  listed or, if the Shares are not then listed on a United States national or
  regional securities exchange, on the principal other market on which the
  Shares are then traded. If the Shares are not so listed or traded, “Valid
  Day” means a Business Day.

  
	
   

  	
   

  	
   

  
	
  Scheduled Valid Day:

  	
   

  	
  A day that is scheduled to be a Valid Day on the principal United
  States national or regional securities exchange or market on which the Shares
  are listed or admitted for trading. If the Shares are not so listed or
  admitted for trading, “Scheduled Valid Day” means a Business Day.

  
	
   

  	
   

  	
   

  
	
  Business Day:

  	
   

  	
  Any day other than a Saturday, a Sunday or a day on which the Federal
  Reserve Bank of New York is authorized or required by law or executive order
  to close or be closed.

  
	
   

  	
   

  	
   

  
	
  Relevant Price:

  	
   

  	
  On any Valid Day, the per Share volume-weighted average price as
  displayed under the heading “Bloomberg VWAP” on Bloomberg page TTWO.UQ
  <equity> AQR (or its equivalent successor page if such
  page is not available) in respect of the period from the scheduled
  opening time of the Exchange to the Scheduled Closing Time of the Exchange on
  such Valid Day (or 

  

 

7

 

	
   

  	
   

  	
  if such volume-weighted average price is unavailable, the market
  value of one Share on such Valid Day, as determined by the Calculation Agent
  using a volume-weighted method).

  
	
   

  	
   

  	
   

  
	
  Settlement Averaging Period:

  	
   

  	
  For any Exercisable Option and regardless, for the avoidance of
  doubt, of the settlement method elected by Counterparty under the related
  Convertible Note, (i) if Counterparty has, on or prior
  to December 1, 2013, delivered a Notice of Exercise to Dealer with
  respect to such Exercisable Option with  a
  Conversion Date occurring prior to December 1, 2013, the fifty (50) consecutive Valid Days
  commencing on and including the second Scheduled Valid Day following such Conversion Date, or (ii) if
  Counterparty has, on or following December 1,
  2013,
  delivered a Notice of Exercise to Dealer with respect to such Exercisable
  Optionwith  a Conversion Date occurring on or
  following December 1, 2013,
  the fifty (50) consecutive Valid Days commencing on, and including, the
  fifty-second (52nd)
  Scheduled Valid Day immediately prior to the Expiration Date; provided that if Counterparty has at any time delivered a
  Notice of Early Redemption to Dealer (including after December 1, 2013),
  the Settlement Averaging Period for any Exercisable Option shall be the fifty
  (50) consecutive Valid Days commencing on, and including, the fifty-second
  (52nd)
  Scheduled Valid Day immediately prior to the Scheduled Redemption Date,
  regardless, for the avoidance of doubt, of the settlement method elected by
  Counterparty under the related Convertible Note

  
	
   

  	
   

  	
   

  
	
  Settlement Date:

  	
   

  	
  For any Exercisable Option, the third Business Day immediately
  following the final Valid Day of the Settlement Averaging Period for such
  Exercisable Option.

  
	
   

  	
   

  	
   

  
	
  Settlement Currency:

  	
   

  	
  USD

  
	
   

  	
   

  	
   

  
	
  Other Applicable Provisions:

  	
   

  	
  The provisions of Sections 9.1(c), 9.8, 9.9, 9.11, 9.12 and 10.5 of
  the Equity Definitions will be applicable, except that all references in such
  provisions to “Physically-settled” shall be read as references to “Share
  Settled”. “Share Settled” in relation to any Option means that Net Share
  Settlement or Combination Settlement is applicable to that Option.

  
	
   

  	
   

  	
   

  
	
  Representation and Agreement:

  	
   

  	
  Notwithstanding Section 9.11 of the Equity Definitions, the
  parties acknowledge that any Shares delivered to Counterparty shall be, upon
  delivery, subject to restrictions and limitations arising from Counterparty’s
  status as issuer of the Shares under applicable securities laws.

  

 

3. Additional Terms applicable to the Transaction:

 

	
  Adjustments applicable to the Transaction:

  	
   

  
	
   

  	
   

  
	
  Potential Adjustment Events:

  	
   

  	
  Notwithstanding Section 11.2(e) of the Equity Definitions,
  a “Potential Adjustment Event” means an occurrence of any event or condition,
  as set forth in Section 9.04 of the Supplemental Indenture that would
  result in an adjustment to the Conversion Rate of the Convertible Notes; provided that in no event shall there be any adjustment
  hereunder as a result of 

  
			

 

8

 

	
   

  	
   

  	
  an adjustment to the Conversion Rate pursuant to
  Section 9.04(g) or (h) or Section 9.06 of the
  Supplemental Indenture.

  
	
   

  	
   

  	
   

  
	
  Method of Adjustment:

  	
   

  	
  Calculation Agent Adjustment, and means that, notwithstanding
  Section 11.2(c) of the Equity Definitions, upon any adjustment to
  the Conversion Rate of the Convertible Notes pursuant to the Supplemental
  Indenture (other than Section 9.04(g) and (h) and
  Section 9.06 of the Supplemental Indenture) or any adjustment pursuant
  to Section 9.05 of the Supplemental Indenture, the Calculation Agent
  will make a corresponding adjustment to any one or more of the Strike Price,
  Number of Options, Option Entitlement and any other variable relevant to the
  exercise, settlement or payment for the Transaction; provided that
  if the Calculation Agent in good faith disagrees with any adjustment to the
  Conversion Rate pursuant to Section 9.04(m) or Section 9.05 of
  the Supplemental Indenture, the Calculation Agent will determine the
  corresponding adjustment to be made to any one or more of the Strike Price,
  Number of Options, Option Entitlement and any other variable relevant to the
  exercise, settlement or payment of the Transaction in a commercially
  reasonable manner.

  

 

Extraordinary Events applicable to the
Transaction:

 

	
  Merger Events:

  	
   

  	
  Applicable; provided that
  notwithstanding Section 12.1(b) of the Equity Definitions, a
  “Merger Event” means the occurrence of any event or condition set forth in
  the definition of “Merger Event” in Section 9.07 of the Supplemental
  Indenture.

  
	
   

  	
   

  	
   

  
	
  Tender Offers:

  	
   

  	
  Applicable; provided that
  notwithstanding Section 12.1(d) of the Equity Definitions, a
  “Tender Offer” means the occurrence of any event or condition set forth in
  Section 9.04(e) of the Supplemental Indenture.

  
	
   

  	
   

  	
   

  
	
  Consequence of Merger Events/ Tender Offers:

  	
   

  	
  Notwithstanding Section 12.2 and Section 12.3 of the Equity
  Definitions, upon the occurrence of a Merger Event or a Tender Offer, the
  Calculation Agent shall make a corresponding adjustment in respect of any
  adjustment under the Supplemental Indenture to any one or more of the nature
  of the Shares, Strike Price, Number of Options, Option Entitlement and any
  other variable relevant to the exercise, settlement or payment for the
  Transaction; provided, however,
  that such adjustment shall be made without regard to any adjustment to the
  Conversion Rate for the issuance of additional shares as set forth in
  Section 9.06 of the Supplemental Indenture; provided
  further that if, with respect to a Merger Event or a Tender Offer,
  (i) the consideration for the Shares includes (or, at the option of a
  holder of Shares, may include) shares of an entity or person not organized
  under the laws of the United States, any State thereof or the District of
  Columbia or (ii) the Counterparty to the Transaction following such Merger
  Event or Tender Offer, will not be the Issuer following such Merger Event or
  Tender Offer, then Cancellation and Payment (Calculation Agent Determination)
  shall apply.

  
	
   

  	
   

  	
   

  
	
  Nationalization, Insolvency or Delisting:

  	
   

  	
  Cancellation and Payment (Calculation Agent
  Determination); 

  

 

9

 

	
   

  	
   

  	
  provided that,
  in addition to the provisions of Section 12.6(a)(iii) of the Equity
  Definitions, it will 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 of the New
  York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global
  Market (or their respective successors), such exchange or quotation system
  shall thereafter be deemed to be the Exchange.

  
	
   

  	
   

  	
   

  
	
  Additional Disruption Events:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Change in Law:

  	
   

  	
  Applicable; provided that Section 12.9(a)(ii)(X) of the
  Equity Definitions is hereby amended by replacing the word “Shares” with the
  phrase “Hedge Positions.”

  
	
   

  	
   

  	
   

  
	
  Failure to Deliver:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Hedging Disruption:

  	
   

  	
  Applicable; provided that Section 12.9(a)(v) of the Equity
  Definitions is hereby modified by inserting the following two phrases at the
  end of such Section:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “For the avoidance of doubt, the term “equity price
  risk” shall be deemed to include, but shall not be limited to, stock price
  and volatility risk. And, for the further avoidance of doubt, any such
  transactions or assets referred to in phrases (A) or (B) above must
  be available on commercially reasonable pricing terms.”

  
	
   

  	
   

  	
   

  
	
  Hedging Party:

  	
   

  	
  Dealer for all
  applicable Additional Disruption Events

  
	
   

  	
   

  	
   

  
	
  Determining Party:

  	
   

  	
  For all
  applicable Extraordinary Events, Dealer

  

 

	
  Non-Reliance:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Agreements and Acknowledgements Regarding Hedging Activities:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Additional Acknowledgments:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  4.  Calculation Agent:

  	
   

  	
  Dealer

  

 

5.  Account Details:

 

(a)         Account for payments to Counterparty:

 

[     
]

ABA:  [      ]

Acct:   Take-Two Interactive Software Inc.

Acct No.:  [      ]

 

Account for delivery of Shares to Counterparty:

 

To be provided by Counterparty.

 

(b)           Account
for payments to Dealer:

 

[     
]

 

10

 

ABA: 
[      ]

Favour: [     
]

A/C: 
[      ]

 

Account for delivery of Shares from Dealer:

 

[     
]

 

6.  Offices:

 

The Office of Counterparty for the Transaction is:  Inapplicable, Counterparty is not a
Multibranch Party.

 

The Office of Dealer for the Transaction is:
London

 

JPMorgan Chase Bank, National Association

London Branch

P.O. Box 161

60 Victoria Embankment

London EC4Y 0JP

England

 

7. Notices: For purposes of this
Confirmation:

 

(a)           Address for notices or communications
to Counterparty:

 

Take-Two Interactive Software, Inc.

622 Broadway

New York, New York

Attention: Treasurer

Telephone No.:  (646) 536-2842

Facsimile No.:     (646) 941-3566

 

(b)           Address for notices or communications
to Dealer:

 

JPMorgan Chase
Bank, National Association

4 New York
Plaza, Floor 18

New York,
NY  10004-2413

Attention:  Mariusz Kwasnik

Title:  Operations Analyst

EDG Corporate
Marketing

Telephone No:     (212) 623-7223

Facsimile No:        (212) 623-7719

 

8. 
Representations and Warranties of Counterparty

 

Each of the representations and warranties
made by Counterparty pursuant to the Underwriting Agreement (the “Underwriting Agreement”) dated as of May 28, 2009 between
Counterparty and J.P. Morgan Securities Inc. and Barclays Capital Inc., as
representative of the Underwriters party thereto, on the “Closing Date” (as
defined in the Underwriting Agreement) are true and correct and are hereby
deemed to be repeated to Dealer as if set forth herein.  Counterparty hereby further represents and
warrants to Dealer that:

 

(a)                                   Counterparty
has all necessary corporate power and authority to execute, deliver and perform
its obligations in respect of this Transaction; such execution, delivery and
performance have been duly authorized by all necessary corporate action on
Counterparty’s part; and this Confirmation has been duly and validly executed
and delivered by Counterparty and constitutes its valid and binding obligation,
enforceable against Counterparty in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar

 

11

 

laws affecting creditors’ rights and remedies generally, and subject,
as to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except that
rights to indemnification and contribution hereunder may be limited by federal
or state securities laws or public policy relating thereto.

 

(b)                                  Neither the execution
and delivery of this Confirmation nor the incurrence or performance of
obligations of Counterparty hereunder will conflict with or result in a breach
of the certificate of incorporation or by-laws (or any equivalent documents) of
Counterparty, or any applicable law or regulation, or any order, writ,
injunction or decree of any court or governmental authority or agency, or any
agreement or instrument to which Counterparty or any of its subsidiaries is a
party or by which Counterparty or any of its subsidiaries is bound or to which
Counterparty or any of its subsidiaries is subject, or constitute a default
under, or result in the creation of any lien under, any such agreement or
instrument.

 

(c)                                   No consent, approval,
authorization, or order of, or filing with, any governmental agency or body or
any court is required in connection with the execution, delivery or performance
by Counterparty of this Confirmation, except such as have been obtained or made
and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws.

 

(d)                                  Counterparty is not
and will not be required to register as an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended.

 

(e)                                   It is an “eligible contract participant” (as
such term is defined in Section 1a(12) of the Commodity Exchange Act, as
amended (the “CEA”)) because one or more of the
following is true:

 

Counterparty is a corporation,
partnership, proprietorship, organization, trust or other entity and:

 

(A)                                 Counterparty has total assets in excess of USD
10,000,000;

 

(B)                                  the obligations of Counterparty hereunder are
guaranteed, or otherwise supported by a letter of credit or keepwell, support
or other agreement, by an entity of the type described in Section 1a(12)(A)(i) through
(iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or 1a(12)(C) of the CEA; or

 

(C)       Counterparty
has a net worth in excess of USD 1,000,000 and has entered into this Agreement
in connection with the conduct of Counterparty’s business or to manage the risk
associated with an asset or liability owned or incurred or reasonably likely to
be owned or incurred by Counterparty in the conduct of Counterparty’s business.

 

(f)                                     Each of it and its
affiliates is not, on the date hereof, in possession of any material non-public
information with respect to Counterparty.

 

9.  Other
Provisions:

 

(a)                                  Opinions.  Counterparty shall deliver to Dealer, on or
prior to the Premium Payment Date, an opinion of counsel, dated as of the
Premium Payment Date, with respect to the matters set forth in Sections 8(a) through
(c) of this Confirmation.  Delivery
of such opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii) of
the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of
the Agreement.

 

(b)                                 Repurchase Notices.  Counterparty shall, on any day on which
Counterparty effects any repurchase of Shares, promptly give Dealer a written
notice of such repurchase (a “Repurchase Notice”)
on such day if following such repurchase, the number of outstanding Shares as
determined on such day is (i) less than 76 million (in the case of the
first such notice) or (ii) thereafter more than 4 million less than the
number of Shares included in the immediately

 

12

 

preceding Repurchase Notice. 
Counterparty agrees to indemnify and hold harmless Dealer and its
affiliates and their respective officers, directors, employees, affiliates,
advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses
(including losses relating to Dealer’s hedging activities as a consequence of
becoming, or of the risk of becoming, a Section 16 “insider”, including
without limitation, any forbearance from hedging activities or cessation of
hedging activities and any losses in connection therewith with respect to this
Transaction), claims, damages, judgments, liabilities and expenses (including
reasonable attorney’s fees), joint or several, which an Indemnified Person may
become subject to, as a result of Counterparty’s failure to provide Dealer with
a Repurchase Notice on the day and in the manner specified in this paragraph,
and to reimburse, within 30 days, upon written request, each of such
Indemnified Persons for any reasonable legal or other expenses incurred in
connection with investigating, preparing for, providing testimony or other
evidence in connection with or defending any of the foregoing.  If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand shall be brought
or asserted against the Indemnified Person as a result of Counterparty’s
failure to provide Dealer with a Repurchase Notice in accordance with this
paragraph, such Indemnified Person shall promptly notify Counterparty in
writing, and Counterparty, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others Counterparty may designate in such proceeding
and shall pay the fees and expenses of such counsel related to such
proceeding.  Counterparty shall not be
liable for any settlement of any proceeding contemplated by this paragraph that
is effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, Counterparty agrees to indemnify
any Indemnified Person from and against any loss or liability by reason of such
settlement or judgment.  Counterparty
shall not, without the prior written consent of the Indemnified Person, effect
any settlement of any pending or threatened proceeding contemplated by this
paragraph that is in respect of which any Indemnified Person is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter of
such proceeding on terms reasonably satisfactory to such Indemnified
Person.  If the indemnification provided
for in this paragraph is unavailable to an Indemnified Person or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then Counterparty hereunder, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities.  The remedies provided for in this paragraph (b) are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Party at law or in equity.  The indemnity and contribution agreements
contained in this paragraph shall remain operative and in full force and effect
regardless of the termination of this Transaction.

 

(c)                                  Regulation
M.  Counterparty is not on
the date hereof engaged in a distribution, as such term is used in Regulation M
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Counterparty, other
than the distribution of the Convertible Notes. 
Counterparty shall not, until the second Scheduled Trading Day
immediately following the Effective Date, engage in any such distribution.

 

(d)                                 No
Manipulation. 
Counterparty is not entering into this Transaction 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) or otherwise in violation of the Exchange Act.

 

(e)                                Transfer
or Assignment.  (i) Counterparty
shall have the right to transfer or assign its rights and obligations hereunder
with respect to all, but not less than all, of the Options hereunder (such
Options, the “Transfer Options”); provided that such transfer or assignment shall be subject
to reasonable conditions that Dealer may impose, including but not limited, to
the following conditions:

 

13

 

(A)      With
respect to any Transfer Options, Counterparty shall not be released from its
notice and indemnification obligations pursuant to Section 9(b) or
any obligations under Section 9(m) or 9(r) of this Confirmation;

 

(B)        Any
Transfer Options shall only be transferred or assigned to a third party that is
a United States person (as defined in the Internal Revenue Code of 1986, as
amended);

 

(C)        Such
transfer or assignment shall be effected on terms, including any reasonable
undertakings by such third party (including, but not limited to, an undertaking
with respect to compliance with applicable securities laws in a manner that, in
the reasonable judgment of Dealer, will not expose Dealer to material risks
under applicable securities laws) and execution of any documentation and
delivery of legal opinions with respect to securities laws and other matters by
such third party and Counterparty, as are requested and reasonably satisfactory
to Dealer;

 

(D)       Dealer
will not, as a result of such transfer and assignment, be required to pay the
transferee on any payment date an amount under Section 2(d)(i)(4) of
the Agreement greater than an amount that Dealer would have been required to
pay to Counterparty in the absence of such transfer and assignment;

 

(E)         An
Event of Default, Potential Event of Default or Termination Event will not occur
as a result of such transfer and assignment;

 

(F)         Without
limiting the generality of clause (B), Counterparty shall cause the transferee
to make such Payee Tax Representations and to provide such tax documentation as
may be reasonably requested by Dealer to permit Dealer to determine that
results described in clauses (D) and (E) will not occur upon or after
such transfer and assignment; and

 

(G)        Counterparty
shall be responsible for all reasonable costs and expenses, including
reasonable counsel fees, incurred by Dealer in connection with such transfer or
assignment.

 

(ii) Dealer may, without Counterparty’s consent, transfer or
assign all or any part of its rights or obligations under the Transaction to
any third party with a rating for its long term, unsecured and unsubordinated
indebtedness equal to or better than the lesser of (x) the credit rating
of Dealer at the time of the transfer and (y) AA- by Standard and Poor’s
Rating Group, Inc. or its successor (“S&P”), or
Aa3 by Moody’s Investor Service, Inc. (“Moody’s”)
or, if either S&P or Moody’s ceases to rate such debt, at least an
equivalent rating or better by a substitute rating agency mutually agreed by
Counterparty and Dealer; provided that
such transfer or assignment shall be subject to the condition that (1) a
Tax Event described in Section 5(b)(iii)(A) or (B) will not
occur with respect to Counterparty due to, and immediately upon, such transfer
or assignment and (2) an Event of Default, Potential Event of Default or
Termination Event will not occur as a result of such transfer or
assignment.  Dealer agrees to use its
commercially reasonable efforts to provide prior notice to Counterparty of any
transfer or assignment of Options to a third party pursuant to this
Section.  If at any time at which (1) the
Section 16 Percentage exceeds 7.5%, (2) the Option Equity Percentage
exceeds 14.5%, or (3) the Share Amount exceeds the Post-Effective Limit
(if any applies), Dealer may, in its reasonable discretion, either (I) effect
a transfer or assignment of Options to a third party in accordance with the
conditions described above such that (1) the Section 16 Percentage
will be equal to or less than 7.5%, (2) the Option Equity Percentage will
be equal to or less than 14.5%, and (3) the Share Amount will be equal to
or less than any such Post-Effective Limit, or (II) designate any Exchange
Business Day as an Early Termination Date with respect to a portion of the
Transaction (the “Terminated Portion”),
such that following such partial termination (1) the Section 16
Percentage will be equal to or less than 7.5%, (2) the Option Equity
Percentage will be equal to or less than 14.5%, and (3) the Share Amount
will be equal to or less than such Post-Effective Limit.  In the event that Dealer so designates an
Early Termination Date with respect to a Terminated Portion, a payment shall be
made pursuant to Section 6 of the Agreement as if (1) an Early
Termination Date had been designated in respect of a Transaction having terms
identical to this Transaction and a Number of Options equal to the number of
Options underlying the Terminated Portion, (2) Counterparty shall be the
sole Affected Party with respect to such partial termination and (3) the
Terminated Portion shall be the sole Affected Transaction

 

14

 

(and, for the avoidance of doubt, the provisions of Section 9(k) shall
apply to any amount that is payable by Dealer to Counterparty pursuant to this
sentence as if Counterparty was not the Affected Party).  The “Section 16
Percentage” as of any day is the fraction, expressed as a
percentage, (A) the numerator of which is the number of Shares that Dealer
and each person subject to aggregation of Shares with Dealer under Section 13
or Section 16 of the Exchange Act and rules promulgated thereunder
directly or indirectly beneficially own (as defined under Section 13 or Section 16
of the Exchange Act and rules promulgated thereunder) and (B) the
denominator of which is the number of Shares outstanding.  The “Option Equity Percentage”
as of any day is the fraction, expressed as a percentage, (A) the
numerator of which is the sum of (x) the product of the Number of Options
and the Option Entitlement and (y) the aggregate number of Shares
underlying any other call option transaction sold by Dealer to Counterparty,
and (B) the denominator of which is the number of Shares outstanding.  The “Share Amount”
as of any day is the number of Shares that Dealer and any person whose
ownership position would be aggregated with that of Dealer (Dealer or any such
person, a “Dealer Person”) under any law, rule, regulation or regulatory order
that for any reason becomes applicable to ownership of Shares after the Trade
Date (“Applicable Laws”), owns,
beneficially owns, constructively owns, controls, holds the power to vote or
otherwise meets a relevant definition of ownership of under the Applicable
Laws, as determined by Dealer in its reasonable discretion. The “Post-Effective Limit” means (x) the minimum number of
Shares that would give rise to reporting or registration obligations or other
requirements (including obtaining prior approval from any person or entity) of
a Dealer Person, or would result in an adverse effect on a Dealer Person, under
the Applicable Laws, as determined by Dealer in its reasonable discretion, minus (y) 1% of the number of Shares
outstanding.

 

(iii) Notwithstanding any other provision in this Confirmation to
the contrary requiring or allowing Dealer to purchase, sell, receive or deliver
any Shares or other securities to or from Counterparty, Dealer may designate
any of its affiliates to purchase, sell, receive or deliver such Shares or
other securities and otherwise to perform Dealer’s obligations in respect of
this Transaction and any such designee may assume such obligations.  Dealer shall be discharged of its obligations
to Counterparty to the extent of any such performance.

 

(f)                                    Staggered Settlement.  If upon advice of counsel with respect to
applicable legal and regulatory requirements, including any requirements
relating to Dealer’s hedging activities hereunder, Dealer reasonably determines
that it would not be practicable or advisable to deliver, or to acquire Shares
to deliver, any or all of the Shares to be delivered by Dealer on the
Settlement Date for the Transaction, Dealer may, by notice to Counterparty on
or prior to any Settlement Date (a “Nominal Settlement Date”),
elect to deliver the Shares on two or more dates (each, a “Staggered
Settlement Date”) as follows:

 

(a)                                in
such notice, Dealer will specify to Counterparty the related Staggered
Settlement Dates (the first of which will be such Nominal Settlement Date and
the last of which will be no later than the twentieth (20th) Exchange Business
Day following such Nominal Settlement Date) and the number of Shares that it
will deliver on each Staggered Settlement Date;

 

(b)                               the
aggregate number of Shares that Dealer will deliver to Counterparty hereunder
on all such Staggered Settlement Dates will equal the number of Shares that
Dealer would otherwise be required to deliver on such Nominal Settlement Date;
and

 

(c)                                  if
the Net Share Settlement terms or the Combination Settlement terms set forth
above were to apply on the Nominal Settlement Date, then the Net Share
Settlement terms or the Combination Settlement terms, as applicable, will apply
on each Staggered Settlement Date, except that the Shares deliverable pursuant
to such terms on the Nominal Settlement Date will be allocated among such
Staggered Settlement Dates as specified by Dealer in the notice referred to in
clause (a) above.

 

(g)                                 Role  of Agent.  Each party agrees and acknowledges that (i) J.P.
Morgan Securities Inc., an

 

15

 

affiliate of Dealer (“JPMSI”),
has acted solely as agent and not as principal with respect to this Transaction
and (ii) JPMSI has no obligation or liability, by way of guaranty,
endorsement or otherwise, in any manner in respect of this Transaction
(including, if applicable, in respect of the settlement thereof). Each party
agrees it will look solely to the other party (or any guarantor in respect
thereof) for performance of such other party’s obligations under this
Transaction.

 

(h)                                 Additional Termination Events.

 

(i)  Notwithstanding anything to the contrary in
this Confirmation if an event of default with respect to Counterparty shall
occur under the terms of the Convertible Notes as set forth in Section 6.01
of the Supplemental Indenture or under Section 6.01 of the Base Indenture,
then such event of default shall constitute an Additional Termination Event
applicable to the Transaction and, with respect to such event of default (A) Counterparty
shall be deemed to be the sole Affected Party and the Transaction shall be the
sole Affected Transaction and (B) Dealer shall be the party entitled to designate
an Early Termination Date pursuant to Section 6(b) of the Agreement.

 

(ii)  Notwithstanding anything to the contrary in this
Confirmation, the giving of any Notice of Exercise in respect of Exercisable
Options that correspond to Convertible Notes converted pursuant to Section 9.01(iv) of
the Supplemental Indenture in connection with a “Make-Whole Fundamental Change”
(as defined in the Supplemental Indenture) shall constitute an Additional
Termination Event as provided in this clause (ii).  Upon receipt of any such notice, Dealer shall
designate an Exchange Business Day as an Early Termination Date with respect to
the portion of this Transaction corresponding to the number of such Exercisable
Options specified in such Notice of Exercise (such number of Options, the “Specified Options”). 
Any payment hereunder with respect to such termination shall be
calculated pursuant to Section 6 of the Agreement as if (A) an Early
Termination Date had been designated in respect of a Transaction having terms
identical to this Transaction and a Number of Options equal to the number of
Specified Options, (B) Counterparty shall be the sole Affected Party with
respect to such Additional Termination Event, (C) the terminated portion
of the Transaction shall be the sole Affected Transaction and (D) for the
avoidance of doubt, in determining the amount payable pursuant to Section 6
of the Agreement, the Calculation Agent, acting in a commercially reasonable
manner, shall not take into account any adjustments to the Option Entitlement
that result from corresponding adjustments to the Conversion Rate pursuant to Section 9.06
of the Supplemental Indenture; provided that
the amount of cash deliverable in respect of such early termination by Dealer
to Counterparty shall not be greater than the product of (x) the
Applicable Percentage and (y) the excess of (I) (1) the number
of Specified Options multiplied by (2) the
Conversion Rate (after taking into account any applicable adjustments to the
Conversion Rate pursuant to Section 9.06 of the Supplemental Indenture) multiplied by (3) a price per Share determined by the
Calculation Agent over (II) the aggregate principal amount of the
corresponding Convertible Notes, as determined by the Calculation Agent in a
commercially reasonable manner.

 

(i)                                     Amendments to Equity Definitions.  (i) Section 12.6(a)(ii) of
the Equity Definitions is hereby amended by (1) deleting from the fourth
line thereof the word “or” after the word “official” and inserting a comma
therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof
and inserting the following words therefor “or (C) at Dealer’s option, the occurrence of any of the events specified in Section 5(a)(vii)(1) through
(9) of the ISDA Master Agreement with respect to that Issuer.”

 

(ii) Section 12.9(b)(i) of the Equity Definitions is
hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice
to Counterparty” in the first sentence of such section.

 

(j)                                     No Collateral; Setoff.  Notwithstanding any provision of the
Agreement or any other agreement between the parties to the contrary, the
obligations of Dealer and Counterparty hereunder are not secured by any
collateral.  Obligations of Counterparty
hereunder shall not be set off by Counterparty against any obligations of
Dealer, whether arising under the Agreement, this

 

16

 

Confirmation, under any other agreement between the parties hereto, by
operation of law or otherwise.  In
addition to and without limiting any rights of set-off that a party hereto may
have as a matter of law, pursuant to contract or otherwise, upon the occurrence
of an Early Termination Date, Dealer (and only Dealer)  shall have the
right to set off any obligation that it may have to Counterparty under this
Confirmation, including without limitation any obligation to make any payment
of cash or delivery of Shares to Counterparty, against any obligation
Counterparty may have to Dealer under any other agreement between Dealer and
Counterparty relating to Shares (each such contract or agreement, a “Separate Agreement”), including without
limitation any obligation to make a payment of cash or a delivery of Shares or
any other property or securities. For this purpose, Dealer shall be entitled to
convert any obligation (or the relevant portion of such obligation) denominated
in one currency into another currency at the rate of exchange at which it would
be able to purchase the relevant amount of such currency, and to convert any
obligation to deliver any non-cash property into an obligation to deliver cash
in an amount calculated by reference to the market value of such property as of
the Early Termination Date, as determined by the Calculation Agent in its sole
discretion; provided that in the
case of a set-off of any obligation to release or deliver assets against any
right to receive fungible assets, such obligation and right shall be set off in
kind and; provided further that
in determining the value of any obligation to deliver Shares, the value at any
time of such obligation shall be determined by reference to the market value of
the Shares at such time, as determined in good faith by the Calculation
Agent.  If an obligation is unascertained
at the time of any such set-off, the Calculation Agent may in good faith
estimate the amount or value of such obligation, in which case set-off will be
effected in respect of that estimate, and the relevant party shall account to
the other party at the time such obligation or right is ascertained. For the
avoidance of doubt and notwithstanding anything to the contrary provided in
this Section 9(j), in the event of bankruptcy or liquidation of either
Counterparty or Dealer neither party shall have the right to set off any
obligation that it may have to the other party under this Transaction against
any obligation such other party may have to it, whether arising under the
Agreement, this Confirmation or any other agreement between the parties hereto,
by operation of law or otherwise.

 

(k)                                  Alternative Calculations and Payment on Early
Termination and on Certain  Extraordinary
Events.  If in respect of this Transaction, an amount is
payable by Dealer to Counterparty (i) pursuant
to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant
to Section 6(d)(ii) of the Agreement (a “Payment
Obligation”), Counterparty may request Dealer to satisfy any such Payment Obligation by the
Share Termination Alternative (as defined below) (except that Counterparty shall
not make such an election in the event of a Nationalization, Insolvency, Merger
Event or Tender Offer, in each case, in which the consideration to be paid to
holders of Shares consists solely of cash, or 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) and shall give irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled
Trading Day, no later than 12:00 p.m. New York local time on the Merger
Date, the Tender Offer Date, the Announcement Date (in the case of
Nationalization, Insolvency or Delisting), the Early Termination Date or date
of cancellation, as applicable; provided that
if Counterparty does not validly request Dealer to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to
satisfy its Payment Obligation by the Share Termination Alternative,
notwithstanding Counterparty’s election to the contrary.  In calculating any amounts under Section 6(e) of
the Agreement, notwithstanding anything to the contrary in the Agreement, (1) separate
amounts shall be calculated as set forth in Section 6(e) with respect
to (i) this Transaction and (ii) all other Transactions, and (2) such
separate amounts shall be payable pursuant to Section 6(d)(ii) of the
Agreement.

 

	
  Share
  Termination Alternative:

  	
   

  	
  Applicable and means that Dealer shall deliver to Counterparty the
  Share Termination Delivery Property on, or within a commercially reasonable 

  

 

17

 

	
   

  	
   

  	
  period of time after, the date when the Payment Obligation would
  otherwise be due pursuant to Section 12.7 or 12.9 of the Equity
  Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as
  applicable (the “Share Termination
  Payment Date”), in satisfaction of the Payment Obligation in the
  manner reasonably requested by Counterparty free of payment.

  
	
   

  	
   

  	
   

  
	
  Share
  Termination Delivery Property:

  	
   

  	
  A number of Share Termination Delivery Units, as calculated by the
  Calculation Agent, equal to the Payment Obligation divided by the Share
  Termination Unit Price. The Calculation Agent shall adjust the Share
  Termination Delivery Property by replacing any fractional portion of a
  security therein with an amount of cash equal to the value of such fractional
  security based on the values used to calculate the Share Termination Unit
  Price.

  
	
   

  	
   

  	
   

  
	
  Share
  Termination Unit Price:

  	
   

  	
  The value to Dealer of property contained in one Share Termination
  Delivery Unit, as determined by the Calculation Agent in its discretion by
  commercially reasonable means and notified by the Calculation Agent to Dealer
  at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the
  Share Termination Delivery Unit Price the Calculation Agent may consider the
  purchase price paid in connection with the purchase of Share Termination
  Delivery Property.

  
	
   

  	
   

  	
   

  
	
  Share
  Termination Delivery Unit:

  	
   

  	
  One Share or, if a Merger Event has occurred and a corresponding
  adjustment to this Transaction has been made, a unit consisting of the number
  or amount of each type of property received by a holder of one Share (without
  consideration of any requirement to pay cash or other consideration in lieu
  of fractional amounts of any securities) in such Merger Event, as determined
  by the Calculation Agent.

  
	
   

  	
   

  	
   

  
	
  Failure
  to Deliver:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Other
  applicable provisions:

  	
   

  	
  If Share Termination Alternative is applicable, the provisions of
  Sections 9.8, 9.9, 9.11, 9.12 and 10.5 (as modified above) of the Equity
  Definitions will be applicable, except that all references in such provisions
  to “Physically-settled” shall be read as references to “Share Termination
  Settled” and all references to “Shares” shall be read as references to “Share
  Termination Delivery Units”. “Share Termination Settled” in relation to this
  Transaction means that Share Termination Alternative is applicable to this
  Transaction.

  

 

(l)                                     Waiver of Jury Trial.  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

 

18

 

Transaction.  Each party (i) certifies
that no representative, agent or attorney of either party has represented,
expressly or otherwise, that such other party would not, in the event of such a
suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other party have been induced to enter into this Transaction,
as applicable, by, among other things, the mutual waivers and certifications
provided herein.

 

(m)                               Registration.  Counterparty hereby agrees that if, in the
good faith reasonable judgment of Dealer, (A) the Shares acquired by
Dealer for the purpose of hedging its obligations pursuant to this Transaction
(the “Hedge Shares”) or (B) any Early
Unwind Shares delivered to Dealer pursuant to Section 9(t) (any such
Hedge Shares or Early Unwind Shares, “Restricted Shares”)
cannot be sold in the public market by Dealer without registration under the
Securities Act, Counterparty shall, at its election, either (i) in order
to allow Dealer to sell the Restricted Shares in a registered offering, make
available to Dealer an effective registration statement under the Securities
Act and enter into an agreement, in form and substance satisfactory to Dealer,
substantially in the form of an underwriting agreement for a registered
secondary offering; provided, however, that if Dealer, in its sole reasonable discretion,
is not satisfied with access to due diligence materials, the results of its due
diligence investigation, or the procedures and documentation for the registered
offering referred to above, then clause (ii) or clause (iii) of this
paragraph shall apply at the election of Counterparty, (ii) in order to
allow Dealer to sell the Restricted Shares in a private placement, enter into a
private placement agreement substantially similar to private placement purchase
agreements customary for private placements of equity securities for an
issuance of a similar size, in form and substance satisfactory to Dealer (in
which case, the Calculation Agent shall make any adjustments to the terms of
this Transaction that are necessary, in its reasonable judgment, to compensate
Dealer for any discount from the public market price of the Shares incurred on
the sale of Restricted Shares in a private placement for  issuance of a similar size), or (iii) purchase
the Restricted Shares from Dealer at the Reference Price on such Exchange
Business Days, and in the amounts, requested by Dealer.

 

(n)                                 Tax
Disclosure.  Effective
from the date of commencement of discussions concerning the Transaction,
Counterparty and each of its employees, representatives, or other agents may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the Transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to Counterparty relating
to such tax treatment and tax structure.

 

(o)                                 Right to
Extend.  Dealer may
postpone, in whole or in part, any Settlement Date or any other date of
valuation or delivery by Dealer or add additional Settlement Dates or any other
date of valuation or delivery, with respect to some or all of the Options
hereunder, if Dealer reasonably determines, in its commercially reasonable
discretion, that such extension is reasonably necessary or appropriate to
preserve Dealer’s hedging or hedge unwind activity hereunder in light of
existing liquidity conditions or to enable Dealer to effect purchases of Shares
in connection with its hedging, hedge unwind or settlement activity hereunder
in a manner that would, if Dealer were Counterparty or an affiliated purchaser
of Counterparty, be in compliance with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures
applicable to Dealer.

 

(p)                                 Status of Claims in Bankruptcy.   Dealer acknowledges and agrees that
this Confirmation is not intended to convey to Dealer rights against
Counterparty with respect to the Transaction that are senior to the claims of
common stockholders of Counterparty in any United States bankruptcy proceedings
of Counterparty; provided that
nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue
remedies in the event of a breach by Counterparty of its obligations and
agreements with respect to the Transaction; provided, further, that
nothing herein shall limit or shall be deemed to limit Dealer’s rights in
respect of any transactions other than the Transaction.

 

(q)                                 Securities
Contract; Swap Agreement.  The parties hereto intend for: (a) the
Transaction to be a “securities contract” and a “swap agreement” as defined in
the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be entitled to
the

 

19

 

protections afforded by, among other
Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the
Bankruptcy Code; (b) a party’s right to liquidate the Transaction and to
exercise any other remedies upon the occurrence of any Event of Default under
the Agreement with respect to the other party to constitute a “contractual
right” as described in the Bankruptcy Code; and (c) each payment and
delivery of cash, securities or other property hereunder to constitute a
“margin payment” or “settlement payment” and a “transfer” as defined in the
Bankruptcy Code.

 

(r)                                    Notice of Merger
Consideration. Counterparty
covenants and agrees that, as promptly as practicable following the public
announcement of any consolidation, merger and binding share exchange to which
Counterparty is a party, or any sale of all or substantially all of
Counterparty’s assets, in each case pursuant to which the Shares will be
converted into cash, securities or other property, Counterparty shall notify
Dealer in writing of the types and amounts of consideration that holders of
Shares have elected to receive upon consummation of such transaction or event
(the date of such notification, the “Consideration Notification
Date”); provided that
in no event shall the Consideration Notification Date be later than the date on
which such transaction or event is consummated.

 

(s)                                  Receipt or Delivery of Cash. For the avoidance of doubt, other
than payment of the Premium by Counterparty, nothing in this Confirmation shall
be interpreted as requiring Counterparty to cash settle this Transaction,
except in circumstances where such cash settlement is within Counterparty’s
control (including, without limitation, where Counterparty elects to receive or
deliver cash, or where Counterparty fails timely to elect the Share Termination
Alternative) or in those circumstances in which holders of the Shares would
also receive cash.

 

(t)                                    Early Unwind. (i) In the event the sale of the Convertible Notes is not
consummated with the Underwriters for any reason, or if Counterparty fails to
deliver to Dealer opinions of counsel as required pursuant to Section 9(a),
in each case by the close of business in New York on the Premium Payment Date,
or such later date as agreed upon by the parties (the Premium Payment Date or
such later date the “Early Unwind Date”),  the Transaction shall automatically
terminate (the “Early Unwind”),  on the Early Unwind Date and (i) the Transaction
and all of the respective rights and obligations of Dealer and Counterparty
under the Transaction shall be cancelled and terminated and (ii) each
party shall be released and discharged by the other party from and agrees not
to make any claim against the other party with respect to any obligations or
liabilities of the other party arising out of and to be performed in connection
with the Transaction either prior to or after the Early Unwind Date; provided that Counterparty shall reimburse
Dealer for any costs or expenses (including market losses) relating to the
unwinding of its hedging activities in connection with the Transaction
(including any loss or cost incurred as a result of terminating, liquidating,
obtaining or reestablishing any hedge or related trading position of Dealer or
one or more of its affiliates in connection with the Transaction). The amount
of any such reimbursement shall be determined by Dealer in its sole good faith
discretion. Dealer shall notify Counterparty of such amount and Counterparty
shall pay such amount in immediately available funds on the Early Unwind
Date.  Each of Dealer and Counterparty
represent and acknowledge to the other that, subject to the proviso included in
this Section, upon an Early Unwind, all obligations with respect to the
Transaction shall be deemed fully and finally discharged.

 

(ii)  If an amount is payable by Counterparty to Dealer pursuant
to Section 9(t)(i) (a “Reimbursement Obligation”),
Counterparty shall have the right, in its sole discretion, to satisfy any such
Reimbursement Obligation by delivering to Dealer, on the Exchange Business Day
immediately following the Early Unwind Date, the Early Unwind Shares (as
defined below) in satisfaction of such Reimbursement Obligation in the manner
reasonably requested by Dealer free of payment. 
The “Early Unwind Shares” shall be a
number of Shares equal to the Reimbursement Obligation otherwise payable under Section 9(t)(i) divided by the value to Dealer per Share on the date such
Shares are to be delivered as Early Unwind Shares (the “Early
Unwind Share Price”), as determined by
the Calculation Agent in its discretion using commercially reasonable means,
together with cash in lieu of any fractional Shares based on the Early Unwind
Share Price.  The Calculation Agent shall
notify Counterparty of  the Early Unwind
Share Price at

 

20

 

the time of notification of the Reimbursement Obligation.  If such Early Unwind Shares are Restricted
Shares as set forth in Section 9(m), the Early Unwind Share Price may
reflect, in the Calculation Agent’s judgment, a discount applicable to such
Early Unwind Shares.  If such Early
Unwind Shares are not Restricted Shares as set forth in Section 9(m), the
Early Unwind Price shall be Relevant Price on the Early Unwind Date.  Counterparty shall give irrevocable
telephonic notice, confirmed in writing within one Scheduled Trading Day, to
Dealer of its election to satisfy any Reimbursement Obligation by delivery of
Early Unwind Shares pursuant to this Section no later than 6:00 p.m.
New York local time on the Early Unwind Date.

 

(u)                                 Maximum
Share Delivery. 
Notwithstanding any other provision of this Confirmation or the
Agreement, in no event will Counterparty be required to deliver more than two
times the Number of Shares in the aggregate to Dealer pursuant to Section 9(t).  In the event Counterparty shall not have
delivered the full number of Shares otherwise applicable as a result of the
foregoing sentence (such deficit, the “Deficit Shares”),
Counterparty shall be continually obligated to deliver, from time to time until
the full number of Deficit Shares have been delivered pursuant to this Section,
Shares when, and to the extent, that (i) Shares are repurchased, acquired
or otherwise received by Counterparty or any of its subsidiaries after the
Trade Date (whether or not in exchange for cash, fair value or any other
consideration), (ii) authorized and unissued Shares reserved for issuance
in respect of other transactions prior to such date which prior to the relevant
date become no longer so reserved and (iii) Counterparty additionally
authorizes any unissued Shares that are not reserved for other
transactions.  Counterparty shall immediately
notify Dealer of the occurrence of any of the foregoing events (including the
number of Shares subject to clause (i), (ii) or (iii) and the
corresponding number of Shares to be delivered) and promptly deliver the
Applicable Percentage of the aggregate number of such Shares thereafter.

 

(v)                                 Payment
by Counterparty. In the event that (i) an Early Termination
Date occurs or is designated with respect to the Transaction as a result of a
Termination Event or an Event of Default (other than an Event of Default
arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement)
and, as a result, Counterparty owes to Dealer pursuant to Section 6(d)(ii) of
the Agreement an amount calculated under Section 6(e) of the
Agreement, or (ii) Counterparty owes to Dealer, pursuant to Section 12.7
or Section 12.9 of the Equity Definitions (including, for the avoidance of
doubt, any amount payable in connection with an Extraordinary Event), an amount
calculated under Section 12.8 of the Equity Definitions, such amount shall
be deemed to be zero.

 

21

 

Please confirm that the foregoing correctly
sets forth the terms of our agreement by executing this Confirmation and
returning it to EDG Confirmation Group, J.P. Morgan Securities Inc., 277 Park
Avenue, 11th Floor, New York, NY 10172-3401, or by fax to (212) 622
8519.

 

	
   

  	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  J.P.
  Morgan Securities Inc., as agent for JPMorgan Chase Bank, National
  Association

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and confirmed

  	
   

  	
   

  
	
  as of the Trade Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Take-Two Interactive Software, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
						

 

JPMorgan Chase Bank, National Association 

Organised under the laws of the United States as a National Banking
Association

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271

Registered as a branch in England & Wales branch No. BR000746 

Registered Branch Office 125 London Wall, London EC2Y 5AJ

Authorised and regulated by the Financial Services Authority

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