XBOX 360 PUBLISHER LICENSE AGREEMENT

 

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

 

2.8                                  “Concept” means the detailed description of Publisher’s proposed Software Title and/or Online Content in each case including such information as may be requested by Microsoft.

 

2.9                                  “Demo Versions” means a small portion of an applicable Software Title that is provided to end users to advertise or promote a Software Title.

 

2.10                            “European Sales Territory” means the territory for sales distribution comprising the United Kingdom, France, Germany, Spain, Italy, Netherlands, Belgium, Sweden, Denmark, Norway, Finland, Austria, Switzerland, Ireland, Portugal, Greece, Australia, New Zealand and any other countries that are included by Microsoft from time to time as set forth in the Xbox 360 Publisher Guide.

 

2.11                            “European Manufacturing Region” means the region for manufacturing comprising the United Kingdom, France, Germany, Spain, Italy, Netherlands, Belgium, Sweden, Denmark, Norway, Finland, Austria, Switzerland,Ireland, Portugal, Greece, Australia, New Zealand and any other countries that are included by Microsoft from time to time as set forth in the Xbox 360 Publisher Guide.

 

2.12                            “FPU” or “Finished Product Unit” means a copy of a Software Title in object code form that has passed Certification, has been affixed to a DVD disk and approved by Microsoft for release and manufacturing.  Once the Packaging Materials have been added, and the BTS has been assigned or affixed to the FPU or its packaging, the FPU also includes itsaccompanying BTS and Packaging Materials.

 

2.13                            “Japan Sales Territory” means the territory for sales distribution comprising the country of Japan.

 

2.14                            “Licensed Trademarks” means the Microsoft trademarks identified in the Xbox 360 Publisher Guide.

 

2.15                            “Marketing Materials” collectively means the Packaging Materials and all press releases, marketing, advertising or promotional materials related to the Software Title, FPUs and/or Online Content (including without limitation Web advertising and Publisher’s Web pages to the extent they refer to the Software Title(s), FPU(s) and/or Online Content) that will be used and distributed by Publisher in the marketing of the Software Title(s), FPU(s) and/or Online Content.

 

2.16                            “Manufacturing Region” means the Asian Manufacturing Region, European Manufacturing Region; and/or North American Manufacturing Region.

 

2.17                            “North American Sales Territory” means the territory for sales distribution comprising the United States, Canada, Mexico, Colombia and any other countries that may be included by Microsoft from time to time as set forth in the Xbox 360 Publisher Guide

 

2.18                            “North American Manufacturing Region” means the region for manufacturing comprising the United States, Canada, Mexico, Colombia and any other countries that may be included by Microsoft from time to time as set forth in the Xbox 360 Publisher Guide

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.3 1                         “Xbox 360 Publisher Guide” means a document (in physical, electronic or Web site form) created by Microsoft that supplements this Agreement and provides detailed requirements regarding the Pre-Certification and Certification approval process, Branding Specifications, replication requirements, royalty payment process, marketing guidelines, technical specifications and certification requirements, Demo Version requirements, packaging requirements and other operational aspects of the Xbox 360 and Xbox Live.  Microsoft may supplement, revise or update the Xbox 360 Publisher Guide from time to time in its reasonable discretion as set forth in this Agreement.

 

2.32                            “Xbox Live” means the proprietary online service offered by Microsoft to Xbox Live Users.

 

2.33                            “Xbox Live User” means any individual that accesses and uses Xbox Live.

 

2.34                            Other Terms.  All other capitalized terms have the definitions set forth with the first use of such term as described in this Agreement.

 

3.                                       Xbox 360 Development Kit License

 

Publisher shall enter into one or more development kit license(s) for the applicable territory(ies) to which Xbox 360 game development kits will be shipped for use by Publisher (each an “XDK License”) pursuant to which Microsoft or its affiliate may license to Publisher software development tools and hardware to assist Publisher in the development and testing of

 

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Software Titles, including redistributable code that Publisher must incorporate into Software Titles pursuant to the terms and conditions contained in the XDK License.

 

4.                                       Approval Process

 

4.1                                  Standard Approval Process.   The standard approval process for a Software Title is divided into four phases comprised of Concept approval, Pre-Certification, Certification, and Marketing Materials approval.  Unless Publisher elects the EU Approval Option for a European FPU (described below), Publisher is required to submit its Software Title toMicrosoft for evaluation at all four phases.  Each phase is identified below and further described in the Xbox 360 Publisher Guide.  Additional or alternate approval processes for Online Content may be further described in the Xbox 360 Publisher Guide

 

4.1.1                         Concept.   For each Software Title, Publisher shall deliver to Microsoft a completed Conceptsubmission form (in the form provided by Microsoft to Publisher) that describes the Software Title.  In the event that Publisher desires to host or have a third party host or provide to Xbox Live Users any of Publisher’s Online Game Features,Publisher shall so indicate on the Concept submission form and must execute an addendum to this Agreement, which addendum is available upon request and will be incorporated into this Agreement upon execution.  Following evaluation of Publisher’s Concept submission, Microsoft will notify Publisher of whether the Concept is approved or rejected.  If approved, the Concept submission form, in the form submitted and approved by Microsoft, is incorporated herein by reference and adherence to its terms is a requirement for Certification.  Publisher may propose Online Content at any time after a Concept has been approved, in which case Publisher shall deliver to Microsoft a separate Concept submission for each proposed piece of Online Content.

 

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

 

4.1.3                         Certification.   Following Pre-Certification, Publisher shall deliver to Microsoft the proposed finalrelease version of the applicable Software Title that is complete, ready for access via Xbox Live (if applicable), release,manufacture, and commercial distribution.  Such version must include the final content rating certification required by Section 4.4, have identified program errors corrected, and have any and all changes previously required by Microsoft implemented.  Microsoft shall conduct compliance, compatibility, functional and other testing consistent with the Xbox 360 Publisher Guide (“Certification Testing”) and shall subsequently provide Publisher with the results of such testing, including any required fixes required prior to achieving Certification.  Release from Certification for a Software Title (and for Online Content as applicable) is based on (1) passing the Certification Testing; (2) conformance with the approved Concept and any required submission materials as stated in the Xbox 360 Publisher Guide; (3) Packaging Materials approval; (4) consistency with the goals and objectives of the Xbox 360 console platform and Xbox Live; and (5) continuing and ongoing compliance with all Certification requirements and other requirements as set forth in the Xbox 360 Publisher Guide and this Agreement.

 

4.1.4                         Marketing Materials Approval.   Publisher shall submit all Marketing Materials to Microsoft and shall not distribute such Marketing Materials unless and until Microsoft has approved them in writing.  Prior to use or publication of any Marketing Materials, Publisher agrees to incorporate all changes relating to use of the Licensed Trademarks that Microsoft may reasonably request and will use its commercially reasonable efforts to incorporate other changes reasonably suggested by Microsoft (provided, however, that in any event Publisher shall at all times comply with the Branding Specifications).

 

4.2                                  EU Approval Option.   For a Software Title that Publisher intends to distribute solely in the EuropeanSales Territory (a “European FPU”), Publisher may choose to forego Concept approval (Section 4.1.1), Pre-Certification(Section 4.1.2) and/or Marketing Materials approval (Section 4.1.4) and submit such Software Title to Microsoft only forCertification approval.  This option is referred to herein as the “EU Approval Option.” The EU Approval Option applies solely to distribution of European FPUs, and is not available for Online Content intended to be available in the European Sales Territory.  If Publisher chooses the EU Approval Option, Publisher shall not use the Licensed Trademarks on theEuropean FPU and the license grant set forth in Section 12.1 is withdrawn as to such European FPU.  In addition, Publisher shall make no statements in advertising, marketing materials, packaging, Web sites or otherwise that the European FPU is approved or otherwise sanctioned by Microsoft or is an official Xbox 360 Software Title.  The European FPU may not be distributed outside the European Sales Territory without complying with all terms of this Agreement concerning approvals and the release of the FPU as deemed relevant by Microsoft.  Microsoft may provide additional information in the Xbox 360

 

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Publisher Guide regarding the European Approval Option.  Notwithstanding Publisher’s choice of the EU Approval Option, all other portions of this Agreement other than those specifically identified above shall remain in effect.

 

4.3                                  Resubmissions and Additional Review.   If a Software Title or Online Content fails Certification, and if Publisher has made good faith efforts to address any issues raised by Microsoft, Microsoft will give Publisher the opportunityto resubmit such Software Title or Online Content for Certification.  Microsoft may charge Publisher a reasonable fee designed to offset the costs associated with testing upon resubmission.  Publisher may request the ability to submit versions of the Software Title or Online Content at stages of development other than as identified above for review and feedback by Microsoft.  Such review is within the discretion of Microsoft and may require the payment of reasonable fees by Publisher to offset the costs associated with the review of such Software Titles or Online Content.

 

4.4                                  Content Rating.   For those Sales Territories that utilize a content rating system, Microsoft will not acceptsubmission of a Software Title for Certification approval unless and until Publisher has obtained, at Publisher’s sole cost, arating not higher than “Mature (17+)” or its equivalent from the appropriate rating bodies and/or any and all otherindependent content rating authority/authorities for the applicable Sales Territory(ies) reasonably designated by Microsoft(such as ESRB, ELSPA, CERO, etc .).  Publisher shall include the applicable rating(s) prominently on FPUs and Marketing Materials, in accordance with the applicable rating body guidelines, and shall include the applicable rating in a header file of the Software Title and in Online Content, as described in the Xbox 360 Publisher Guide.  For those Sales Territories that do not utilize a content rating system, Microsoft will not approve any Software Title or Online Content that, in its opinion,contains excessive sexual content or violence, inappropriate language or other elements deemed unsuitable for the Xbox 360platform.  If, after Commercial Release, a Software Title is determined as suitable for adults only or otherwise as indecent, obscene or otherwise prohibited by law, the Publisher shall at its own costs recall all FPUs.  Publisher hereby represents and warrants that any Online Game Features and other game-related Online Content not included in the initial Software Title FPU will not be inconsistent with the content rating (or, in those countries that do not utilize a content rating system, with the overall nature of the content) of the underlying Software Title.  Content rating information and requirements may be further described in the Xbox 360 Publisher Guide.

 

4.5                                  Publisher Testing.   Publisher shall perform its own testing of the Software Title and FPUs and shall keepwritten or electronic records of such testing during the Term of this Agreement and for a period of [*] (“Test Records”).  Upon Microsoft’s request, Publisher shall provide Microsoft with copies of the Test Records, FPUs and Software Title (either in pre-Commercial Release or Commercial Release versions, as Microsoft may request).

 

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

 

4.7                                  Title Updates

 

4.7.1                         All Title Updates for Software Titles are subject to approval by Microsoft.  Publisher may releaseone Title Update per Software Title free of charge.  Any additional Title Updates proposed by Publisher may be subject to a reasonable charge.

 

4.7.2                         Microsoft may require Publisher to develop and provide a Title Update if (a) a Software Title or Online Content adversely affects Xbox Live, (b) if a change to the Xbox 360 Publisher Guide affecting Online Content requires a Title Update, (c) if Certification is revoked for Online Content, or (d) for any other reason at Microsoft’sreasonable discretion.  Microsoft will not charge Publisher for the Certification, hosting, and distribution of Title Updates to Xbox Live Users for the first Title Update (if any) per Software Title or Online Content required by a specific change in the Xbox 360 Publisher Guide or for any other reason at Microsoft’s reasonable discretion.  Microsoft reserves the right to charge Publisher a reasonable fee to offset the costs associated with the Certification, hosting, and distribution of Title Updates to Xbox Live Users that are required because of revocation of Certification or a Software Title or Online Content adversely affecting Xbox Live.

 

5.                                       Xbox 360 Publisher Guide

 

Publisher acknowledges that the Xbox 360 Publisher Guide is an evolving document and subject to change during the term of this Agreement.  Publisher agrees to be bound by all provisions contained in the then-applicable version of the Xbox 360 Publisher Guide.  Publisher agrees that upon Publisher’s receipt of notice of availability of the applicable supplement, revision, or updated version of the Xbox 360 Publisher Guide (which may be via a publisher newsletter or other electronic notification), Publisher automatically is bound by all provisions of the Xbox 360 Publisher Guide as supplemented, revised,

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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or updated.  Publisher’s continued distribution of FPUs after a notice of supplement, revision or update is included in the Xbox 360 Publisher Guide or made available to Publisher constitutes Publisher’s agreement to the then-current Xbox 360Publisher Guide as supplemented, revised or updated.  Microsoft will specify in each such supplement, revision or update a reasonable effective date of each change if such change is not required to be effective immediately.  Only with respect to a Software Title that has passed Pre-Certification prior to the applicable revision or update, Publisher will not be obligated to comply with any changes made to the technical or content requirements for Software Titles in the Xbox 360 Publisher Guide, except in circumstances where such change is deemed by Microsoft to be vitally important to the success of the Xbox 360 platform (e.g.  changes due to piracy, technical failure) or will not add significant expense to the Software Title’s development.  In addition, changes made in Branding Specifications or other Marketing Materials requirements will be effective as to a Software Title that has passed Certification only on a “going forward” basis ( i.e ., only to such Marketing Materials and/or FPUs as are manufactured after Microsoft notifies Publisher of the change).  Notwithstanding the foregoing, Publisher shall comply with such changes to the Xbox 360 Publisher Guide related to Branding Specifications or other Marketing Materials requirements retroactively if Microsoft agrees to pay for Publisher’s direct, out-of-pocket expensesnecessarily incurred as a result of its retrospective compliance with the change.

 

6.                                       Post-Release Compliance

 

6.1                                  Correction of Bugs or Errors.   Notwithstanding Microsoft’s Certification, all Software Titles must remain in compliance with all Certification requirements and requirements set forth in the Xbox 360 Publisher Guide on acontinuing and ongoing basis.  Publisher must correct any material program bugs or errors in conformance with the Xbox 360 Publisher Guide whenever discovered and Publisher agrees to correct such material bugs and errors as soon as possible after discovery.  With respect to bugs or errors discovered after Commercial Release of the applicable Software Title, Publisher will, at Microsoft’s request or allowance, correct the bug or error in all FPUs manufactured after discovery and Microsoft may charge a reasonable amount to cover the costs of Certifying the Software Title again.

 

6.2                                  Online Content; Minimum Commitment

 

6.2.1                         Publisher agrees that each Online Game Feature of a Software Title will be made available via Xbox Live for at least [*] following the respective Commercial Release of the FPUs of the Software Title in each Sales Territory in which is available (the “Minimum Commitment”).  Publisher is obligated to provide all necessarysupport for such Online Game Feature during its availability.  Following the Minimum Commitment period, Publisher may terminate Microsoft’s license associated with such Online Game Feature upon [*] prior written notice to Microsoft; and/or Microsoft may discontinue the availability of any or all such Online Game Feature via Xbox Live [*] prior written notice to Publisher.  Publisher is responsible for communicating the duration of Online Game Feature availability to Xbox Live Users, and for providing reasonable advance notice to Xbox Live Users of any discontinuation of such Online Game Feature.

 

6.2.2                         Subject to Section 10.3, Publisher agrees that Microsoft has the right to make Online Content other than Online Games Features submitted by Publisher available to Xbox Live Users for the Term of this Agreement.  Publisher agrees to provide all necessary support for such Online Content as long as such Online Content is made available to Xbox Live Users and for [*] thereafter.

 

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

 

7.                                       Manufacturing

 

7.1                                  Authorized Replicators.   Publisher will use only an Authorized Replicator to produce FPUs.  Prior to placing an order with a replicator for FPUs, Publisher shall confirm with Microsoft that such entity is an Authorized Replicator.  Microsoft will endeavor to keep an up-to-date list of Authorized Replicators in the Xbox 360 Publisher Guide.  Publisher will notify Microsoft in writing of the identity of the applicable Authorized Replicator and the agreement for such replication services shall be as negotiated by Publisher and the applicable Authorized Replicator, subject to the requirements in this Agreement.  Publisher acknowledges that Microsoft may charge the Authorized Replicator fees for rights, services or products associated with the manufacture of FPUs and that the agreement with the Authorized Replicator grants Microsoft the right to instruct the Authorized Replicator to cease the manufacture of FPU and/or prohibit the release of FPU to Publisher or its agents in the event Publisher is in breach of this Agreement or any credit arrangement entered into byMicrosoft and Publisher or Publisher affiliates.  Microsoft does not guarantee any level of performance by the Authorized Replicators, and Microsoft will have no liability to Publisher for any Authorized Replicator’s failure to perform its

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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obligations under any applicable agreement between Microsoft and such Authorized Replicator and/or between Publisher and such Authorized Replicator.  Microsoft has no responsibility for ensuring that FPUs are free of all defects.

 

7.2                                  Submissions to the Authorized Replicator.   Microsoft, and not Publisher, will provide to the applicable Authorized Replicator the final release version of the Software Title and all specifications required by Microsoft for themanufacture of the FPUs including, without limitation, the Security Technology (as defined in Section 7.9 below).  Publisher is responsible for preparing and delivering to the Authorized Replicator all other items required for manufacturing FPUs including approved Packaging Materials associated with the FPUs.  Subject to the approval of Publisher (which approvalshall not be unreasonably withheld), Microsoft has the right to have included in the packaging of FPUs such promotionalmaterials for Xbox, Xbox 360, Xbox Live, and/or other Xbox or Xbox 360 products or services as Microsoft may determine in its reasonable discretion.  Microsoft will be responsible for delivering to the Authorized Replicator all such promotional materials as it desires to include with FPUs, and, unless otherwise agreed by the parties, any incremental replication and insertion costs relating to such marketing materials will be borne by Microsoft.

 

7.3                                  Verification Versions.   Publisher shall cause the Authorized Replicator to create several test versions ofeach FPU (“Verification Version(s)”) that will be provided to both Microsoft and Publisher for evaluation.  Prior to full manufacture of a FPU by the Authorized Replicator, both Publisher and Microsoft must approve the applicable Verification Version.  Throughout the manufacturing process and upon the request of Microsoft, Publisher shall cause the AuthorizedReplicator to provide additional Verification Versions of the FPU for evaluation by Microsoft.  Microsoft’s approval is a condition precedent to manufacture, however Publisher shall grant the final approval and shall work directly with the Authorized Replicator regarding the production run.  Publisher agrees that all FPUs must be replicated in conformity with all of the quality standards and manufacturing specifications, policies and procedures that Microsoft requires of its Authorized Replicators, and that all Packaging Materials must be approved by Microsoft prior to packaging.  Publisher shall cause the Authorized Replicator to include the BTS on each FPU.

 

7.4                                  Samples.   For each Software Title sku, at Publisher’s cost, Publisher shall provide Microsoft with [*] FPUs and accompanying Marketing Materials per Sales Territory in which the FPU will be released.  Such units may be used in marketing (subject to Publisher’s approval), as product samples, for customer support, testing and for archival purposes.  Publisher will not have to pay a royalty fee for such samples nor will such samples count towards the Unit Discounts under Exhibit 1 .

 

7.5                                Minimum Order Quantities

 

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

 

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

 

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

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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

 

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

 

7.8                                  Alternate Manufacturing in Europe.   Publisher may, solely with respect to FPUs manufactured for distribution in the European Sales Territory, utilize a different process or company for the combination of a FPU withPackaging Materials provided that such packaging process incorporates the BTS and otherwise complies with the Xbox 360 Publisher Guide.  Publisher shall notify Microsoft regarding its use of such process or company so that the parties may properly coordinate their activities and approvals.  To the extent that Microsoft is unable to accommodate such processes or company, Publisher shall modify its operations to comply with Microsoft’s requirements.

 

7.9                                  Security.   Microsoft has the right to add to the final release version of the Software Title delivered by Publisher to Microsoft, and to all FPUs, such digital signature technology and other security technology and copyright management information (collectively, “Security Technology”) as Microsoft may determine to be necessary, and/or Microsoft may modify the signature included in any Security Technology included in the Software Title by Publisher at Microsoft’s discretion.  Additionally, Microsoft may add Security Technology that prohibits the play of Software Titles on Xbox 360 units manufactured in a region or country different from the location of manufacture of the respective FPUs or that have been modified in any manner not authorized by Microsoft.

 

7.10                            Demo Versions.   If Publisher wishes to distribute a Demo Version in FPU format, Publisher must obtainMicrosoft’s prior written approval and Microsoft may charge a reasonable fee to offset costs of the Certification.  Subject to the terms of the Xbox 360 Publisher Guide, such Demo Version(s) may be placed on a single disc, either as a stand-alone or with other Demo Versions and the price of such units must be [*] or its equivalent in local currency.  Unless separately addressed in the Xbox 360 Publisher Guide, all rights,obligations and approvals set forth in this Agreement as applying to Software Titles shall separately apply to any DemoVersion.  [*]  If Publishers wishes to distribute a Demo Versions in an online downloadable format, such downloadable Demo Version shall be distributed via by Microsoft Xbox Live in accordance with Section 10.3, and such downloadable Demo Version will be subject to all other terms and policies applicable to Online Content set forth herein and in the Xbox 360 Publisher Guide.

 

8.                                       Payments

 

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

 

9.                                       Marketing, Sales and Support

 

9.1                                  Publisher Responsible.   As between Microsoft and Publisher, Publisher is solely responsible for the marketing and sales of the Software Title.  Publisher is also solely responsible for providing technical and all other support relating to the FPUs (including for Xbox Live Users of Online Content).  Publisher shall provide all appropriate contactinformation (including without limitation Publisher’s address and telephone number, and the applicable individual/groupresponsible for customer support), and shall also provide all such information to Microsoft for posting on http://www.xbox.com, or such successor or related Web site identified by Microsoft or in Xbox Live.  Customer support shall at all times conform to the Customer Service Requirements set forth in the Xbox 360 Publisher Guide and industry standards in the console game industry.

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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9.2                                  Warranty.   Publisher shall provide the original end user of any FPU a minimum warranty in accordancewith local laws and industry practices.  For example, in the United States, Publisher shall, as of the Effective Date, provide a minimum [*] limited warranty that the FPU will perform in accordance with its user documentation or Publisher will refund the purchase price or provide a replacement FPU at no charge.  Publisher may offer additional warranty coverage consistent with the traditions and practices of video game console game publishers within the applicable Sales Territory or as otherwise required by local law.

 

9.3                                  Recall.   Notwithstanding anything to the contrary contained in this Agreement, if there is a material defectin a Software Title and/or any FPUs, which defect in the reasonable judgment of Microsoft would significantly impair theability of an end user to play such Software Title or FPU or would adversely affect in a material way the gameplay of theXbox 360 or Xbox Live, Microsoft may require Publisher to recall FPUs and undertake prompt repair or replacement of such Software Title and/or FPUs.

 

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

 

9.5                                  Software Title License.   Subject to the prior approval of Publisher (not to be unreasonably withheld or delayed), Publisher grants Microsoft a fully-paid, royalty-free, worldwide, non-exclusive license (i) to publicly perform theSoftware Titles at conventions, events, trade shows, press briefings, public interactive displays and the like; (ii) to use the title of the Software Title, and screen shots from the Software Title, in advertising and promotional material relating to Xbox 360 and related Microsoft products and services, as Microsoft may reasonably deem appropriate; (iii) distribute Demo Versions with the Official Xbox Magazine , as a standalone product with other demo software; and (iv) distribute SoftwareTitle trailers via xbox.com.  Publisher may also select Online Content for inclusion in public interactive displays and/or compilation demo discs published by Microsoft, in which case Publisher grants Microsoft a fully-paid, royalty-free, worldwide, transferable, sublicenseable license to broadcast, transmit, distribute, host, publicly display, reproduce and manufacture such selected Online Content as part of public interactive displays and compilation demo discs, and to distributeand permit end users to download and store (and, at Publisher’s discretion, to make further copies) such Online Content viapublic interactive displays.

 

10.                                Grant of Distribution License, Limitations

 

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

 

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

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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so, nor shall Publisher distribute FPUs to any person or entity that it has reason to believe may re-distribute or sell such FPUs outside authorized Sales Territories.

 

10.3                            Online Content.   In consideration of the royalty payments as described in Exhibit 1 , Publisher grants toMicrosoft (i) a worldwide, transferable, sublicensable (only transferable and sublicensable with respect to Microsoft affiliates) license to broadcast, transmit, distribute, host, publicly display, reproduce, and license Online Content submitted toMicrosoft hereunder for use on Xbox 360s, and (ii) a worldwide, transferable license solely to distribute to end users andpermit end users to download and store Online Content (and, at Publisher’s discretion, to make further copies).  Publisher agrees that the license grants set forth in this section applicable to Online Content are exclusive, meaning that except as expressly permitted under this Agreement, the Xbox 360 Publisher Guide and/or as agreed by the Parties, Publisher shall not directly or indirectly permit or enable access to Online Content by any means, methods, platforms or services other than through Xbox Live, or as otherwise set forth in this Agreement.  Notwithstanding the foregoing, this Section 10.3 does not prevent Publisher from making other platform versions of its Software Titles or Online Content available via other platform- specific online services.  This Section 10.3 shall survive expiration or termination of this Agreement solely to the extent and for the duration necessary to effectuate Section 17.3 below.

 

10.4                            No Reverse Engineering.   Publisher may utilize and study the design, performance and operation of Xbox 360 or Xbox Live solely for the purposes of developing the Software Title or Online Content.  Notwithstanding the foregoing, Publisher shall not, directly or indirectly, reverse engineer or aid or assist in the reverse engineering of all or any part of Xbox 360 or Xbox Live except and only to the extent that such activity is expressly permitted by applicable law notwithstanding this limitation.  In the event applicable law grants Publisher the right to reverse engineer the Xbox 360 or Xbox Live notwithstanding this limitation, Publisher shall provide Microsoft with written notice prior to such reverse engineering activity, information regarding Publisher’s intended method of reverse engineering, its purpose and the legal authority for such activity and shall afford Microsoft a reasonable period of time before initiating such activity in order to evaluate the activity and/or challenge the reverse engineering activity with the appropriate legal authorities.  Publisher shallrefrain from such reverse engineering activity until such time as any legal challenge is resolved in Publisher’s favor.  Reverse engineering includes, without limitation, decompiling, disassembly, sniffing, peeling semiconductor components, or otherwise deriving source code.  In addition to any other rights and remedies that Microsoft may have under the circumstances, Publisher shall be required in all cases to pay royalties to Microsoft in accordance with and Exhibit 1 with respect to any games or other products that are dev