Common use of Limitation on Debt or Other Liabilities Clause in Contracts

Limitation on Debt or Other Liabilities. Neither the Company nor any Subsidiary will create, incur, assume or suffer to exist (at any time after the Closing Date, after giving effect to the application of the proceeds of the issuance of the Securities) any Debt exceeding, in the aggregate for the Company and such Subsidiaries, $750,000, except for the following (such Debt being referred to as "Permitted Debt"): (i) Debt incurred or assumed solely to pay all or any part of the purchase price or cost of construction, of any real or personal property (or any improvement thereon) acquired or constructed by the Company or a Subsidiary after the Closing Date provided: (a) any Lien with respect to such Debt shall extend solely to the item or items of such property (or -------------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT - Page 32 (Take-Two Interactive Software, Inc.) improvements thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed property (or improvement thereon) or which is real property being improved by such acquired or constructed property (or improvement thereon); (b) the principal amount of the Debt for such property shall at no time exceed an amount equal to the cost of the acquisition or the operation of the property (or improvement thereon) so acquired or constructed; and (c) any Lien with respect to such Debt shall be created within sixty (60) days of the acquisition or construction of such property; (ii) Non-recourse Debt which, by its terms, bars the lender thereof from action against the Company or any Subsidiary, as borrower, if the security value falls below the amount required to repay such Debt; (iii) Debt incurred in connection with equipment leases to which the Company or its Subsidiary is a party incurred in the ordinary course of business; (iv) Debt incurred in connection with trade accounts payable arising in the ordinary course of business; (v) Revolving Credit Debt; (vi) Debt incurred with respect to the Convertible Notes; (vii) Debt incurred from time to time in connection with working capital credit facilities of the Company and its Subsidiaries as in effect as of the Closing Date of this Agreement (including the Citibank Debt, the National Bank of Canada Debt, the Crestar Debt and the Barclays Bank Debt); (viii) Unsecured Debt subordinated to the convertible Notes on terms reasonably satisfactory to the Purchasers; (ix) Guaranties of a Subsidiary by the Company or by the Company of any Subsidiary of Permitted Debt; (x) Reimbursement obligations in respect of Letters of Credit and similar obligations established by the Company in favor of suppliers the Products and other inventory items in the ordinary course of business; (xi) Debt of a Subsidiary owing to the Company or another Subsidiary; (xii) Debt in an amount sufficient to prepay in full or redeem in full the Convertible Notes when required or permitted hereunder; and -------------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT - Page 33 (Take-Two Interactive Software, Inc.) (xiii) Debt of the Company and its Subsidiaries reflected on the Company's balance sheet as of July 31, 1997 and the notes thereto included in the Company's Quarterly Report on Form 10-QSB for the quarter ended July 31, 1997.

Limitation on Debt or Other Liabilities. Neither the Company nor any Subsidiary will create, incur, assume or suffer to exist (at any time after the Closing Date, after giving effect to the application of the proceeds of the issuance of the Securities) any Debt exceeding, in the aggregate for the Company and such Subsidiariesaggregate, $750,00010,000,000, except for the following (such Debt being referred to as "Permitted Debt"): (i) Debt incurred or assumed solely to pay all or any part of the purchase price or cost of construction, of any real or personal property (or any improvement thereon) acquired or constructed by the Company or a Subsidiary after the Closing Date provided: (a) any Lien with respect to such Debt shall extend solely to the item or items of such property (or -------------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT - Page 32 (Take-Two Interactive Software, Inc.) improvements thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed property (or improvement thereon) or which is real property being improved by such acquired or constructed property (or improvement thereon); (b) the principal amount of the Debt for such property shall at no time exceed an amount equal to the cost of the acquisition or the operation of the property (or improvement thereon) so acquired or constructed; and (c) any Lien with respect to such Debt shall be created within sixty (60) days of substantially contemporaneously with the acquisition or construction of such property; (ii) Non-recourse Debt whichwhich such Debt, by its terms, bars the lender thereof from action against the Company or any Subsidiary, as borrower, if the security value falls below the amount required to repay such Debt; (iii) Debt incurred in connection with equipment leases to which the Company or its Subsidiary is a party incurred in the ordinary course of business; (iv) Debt incurred in connection with trade accounts payable payable, imbalances and refunds arising in the ordinary course of business; (v) Revolving Credit Debt; (vi) Debt incurred with respect to the Convertible Notes; (vii) Debt incurred from time to time in connection with working capital credit the Company's warehouse facilities of and asset securitization transactions in compliance with the Company and its Subsidiaries as in effect as of the Closing Date of this Agreement (including the Citibank Debt, the National Bank of Canada Debt, the Crestar Debt and the Barclays Bank Debt);AutoBond Manual; and (viii) Unsecured Debt subordinated to the convertible Notes on terms reasonably satisfactory to the Purchasers; (ix) Guaranties of a Subsidiary by the Company or by the Company of any Subsidiary of Permitted Debt; (x) Reimbursement obligations in respect of Letters of Credit and similar obligations established by the Company in favor of suppliers the Products and other inventory items in the ordinary course of business; (xi) Debt of a Subsidiary owing to the Company or another Subsidiary; (xii) Debt in an amount sufficient to prepay in full or redeem in full the Convertible Notes when required or permitted hereunder; and -------------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT - Page 33 (Take-Two Interactive Software, Inc.) (xiii) Debt of the Company and its Subsidiaries reflected on the Company's balance sheet as of July 31, 1997 and the notes thereto included in the Company's Quarterly Report on Form 10-QSB for the quarter ended July 31, 1997Notes.

Limitation on Debt or Other Liabilities. Neither the Company nor any Subsidiary will create, incur, assume or suffer to exist (at any time after the Closing Date, after giving effect to the application of the proceeds of the issuance of the Securities) any Debt exceeding, in the aggregate for the Company and such Subsidiaries, $750,000Debt, except for the following (such Debt being referred to as Debt, "Permitted Debt"): (i) Debt incurred or assumed solely to pay all or any part of the purchase price or cost of construction, of any real or personal property (or any improvement thereon) acquired or constructed by the Company or a Subsidiary after the Closing Date provided: (a) any Lien with respect to such Debt shall extend solely to the item or items of such property (or -------------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT - Page 32 (Take-Two Interactive Software, Inc.) improvements thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed property (or improvement thereon) or which is real property being improved by such acquired or constructed property (or improvement thereon); (b) the principal amount of the Debt for such property shall at no time exceed an amount equal to the cost of the acquisition or the operation of the property (or improvement thereon) so acquired or constructed; and (c) any Lien with respect to such Debt shall be created within sixty (60) days of substantially contemporaneously with the acquisition or construction of such property; (ii) Non-recourse Debt which, by its terms, bars the lender thereof from action against the Company or any Subsidiary, as borrower, if the security value falls below the amount required to repay such Debt; (iii) Debt incurred in connection with equipment leases to which the Company or its Subsidiary is a party incurred in the ordinary course of business; (iviii) Debt incurred in connection with trade accounts payable payable, imbalances and refunds arising in the ordinary course of business; (viv) Revolving Credit Debt; (viv) Debt incurred with respect to the Convertible Notes;; and (viivi) Debt incurred from time to time in connection with working capital credit facilities of the Company and its Subsidiaries as in effect outstanding as of the Closing Date of this Agreement (including the Citibank Debt, the National Bank of Canada Debt, the Crestar Debt and the Barclays Bank Debt); (viii) Unsecured Debt subordinated to the convertible Notes listed on terms reasonably satisfactory to the Purchasers; (ix) Guaranties of a Subsidiary by the Company or by the Company of any Subsidiary of Permitted Debt; (x) Reimbursement obligations in respect of Letters of Credit and similar obligations established by the Company in favor of suppliers the Products and other inventory items in the ordinary course of business; (xi) Debt of a Subsidiary owing to the Company or another Subsidiary; (xii) Debt in an amount sufficient to prepay in full or redeem in full the Convertible Notes when required or permitted hereunder; and -------------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT - Page 33 (Take-Two Interactive Software, Inc.) (xiii) Debt of the Company and its Subsidiaries reflected on the Company's balance sheet as of July 31, 1997 and the notes thereto included in the Company's Quarterly Report on Form 10-QSB for the quarter ended July 31, 1997.Schedule V.

Limitation on Debt or Other Liabilities. Neither the Company nor --------------------------------------- any Subsidiary will will, without the prior written consent of the Majority Holders, create, incur, assume or suffer to exist (at any time after the First Tranche Closing Date, after giving effect to the application of the proceeds of the issuance of the SecuritiesConvertible Debentures and Shares) any Debt exceeding, in the aggregate for the Company and such Subsidiaries, $750,000Debt, except for the following (such Debt being referred to as Debt, "Permitted Debt"):): -------------- (i) Debt incurred or assumed solely to pay all or any part of the purchase price or cost of construction, of any real or personal property (or any improvement thereon) acquired or constructed by the Company or a Subsidiary after the First Tranche Closing Date provided: (a) any Lien with respect to such Debt shall extend solely to the item or items of such property (or -------------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT - Page 32 (Take-Two Interactive Software, Inc.) improvements thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed property (or improvement thereon) or which is real property being improved by such acquired or constructed property (or improvement thereon); (b) the principal amount of the Debt for such property shall at no time exceed an amount equal to the cost of the acquisition or the operation of the property (or improvement thereon) so acquired or constructed; and (c) any Lien with respect to such Debt shall be created within sixty (60) days of substantially contemporaneously with the acquisition or construction of such property; (ii) Non-recourse Debt which, by its terms, bars the lender thereof from action against the Company or any Subsidiary, as borrower, if the security value falls below the amount required to repay such Debt; (iii) Debt incurred in connection with equipment leases to which the Company or its Subsidiary is a party incurred in the ordinary course of business; (iviii) Debt incurred in connection with trade accounts payable payable, imbalances and refunds arising in the ordinary course of business; (viv) Revolving Credit Debt; (viv) Debt incurred with respect to the Convertible NotesDebentures; (viivi) Subject to Section 4.11, Debt incurred from time not to time exceed in connection with the aggregate $3,000,000 solely to finance the Company's budgeted capital expenditures or for general corporate or working capital credit facilities purposes, provided, however, that (i) the repayment of the Company and its Subsidiaries as in effect as of the Closing Date of this Agreement such Debt is subordinated (including the Citibank Debt, the National Bank of Canada Debt, the Crestar Debt and the Barclays Bank Debt); (viii) Unsecured Debt subordinated to the convertible Notes on terms reasonably satisfactory to the Purchasers; ' Representative) to the prior payment of all amounts (ixincluding principal and interest) Guaranties due and owing under the Convertible Debentures, whether at maturity, upon liquidation or dissolution, or otherwise; (ii) the maturity date of a Subsidiary such Debt will be after, and the Debt by its terms will not permit any prepayments (whether optional or mandatory) prior to, the Maturity Date (as such term is defined in the Convertible Debentures) of the Convertible Debentures and the Company or by the Company of any Subsidiary of Permitted Debt; Conversion Date (x) Reimbursement obligations in respect of Letters of Credit and similar obligations established by the Company in favor of suppliers the Products and other inventory items as such term is defined in the ordinary course Series B Designation) of business; the Shares; (xiiii) such Debt is not convertible into or exchangeable for shares of a Subsidiary owing to the Company Common Stock or another Subsidiary; (xii) Debt in an amount sufficient to prepay in full other securities or redeem in full the Convertible Notes when required or permitted hereunder; and -------------------------------------------------------------------------------- SECURITIES PURCHASE AGREEMENT - Page 33 (Take-Two Interactive Software, Inc.) (xiii) Debt rights of the Company that are convertible into or exchangeable for shares of Common Stock; and its Subsidiaries reflected on (iv) in the event such Debt is incurred from an Affiliate of the Company's balance sheet as of July 31, 1997 and the notes thereto included in the Company's Quarterly Report on Form 10-QSB for the quarter ended July 31, 1997such transaction complies with Section 4.14(l) hereof.