Re: Call Option Transaction

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

Related Exchange(s):

All Exchanges

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.

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 (54 th ) 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

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 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.

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

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

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 Option with a Conversion Date occurring on or following December 1, 2013, the fifty (50) consecutive Valid Days commencing on, and including, the fifty-second (52 nd ) 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 (52 nd ) 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.

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 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.

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);

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