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EXHIBIT 10.29

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of May 7, 2001,

among

ACTIVISION, INC.,
and certain of its Domestic Subsidiaries

THE LENDERS NAMED HEREIN,

and

PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent, Collateral Agent and Issuing Bank

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TABLE OF CONTENTS

ARTICLE I   1
SECTION 1.01.
 
Defined Terms
 
1 SECTION 1.02.   Terms Generally   20
ARTICLE II
 
20
SECTION 2.01.
 
Commitments; Formula Amount
 
20 SECTION 2.02.   Loans   21 SECTION 2.03.   Procedure for Revolving Credit
Borrowings   22 SECTION 2.04.   Disbursement of Loans   23 SECTION 2.05.  
Manner of Borrowing and Payment   23 SECTION 2.06.   Evidence of Debt   24
SECTION 2.07.   Statement of Account   25 SECTION 2.08.   Fees   25 SECTION
2.09.   Interest on Loans   26 SECTION 2.10.   Default Interest   26 SECTION
2.11.   Termination and Reduction of Commitments   26 SECTION 2.12.   Repayment
of Borrowings   27 SECTION 2.13.   Prepayment   27 SECTION 2.14.   Mandatory
Prepayments   27 SECTION 2.15.   Illegality   28 SECTION 2.16.   Increased Costs
  28 SECTION 2.17.   Basis For Determining Interest Rate Inadequate or Unfair  
29 SECTION 2.18.   Capital Adequacy   30 SECTION 2.19.   Indemnity   30 SECTION
2.20.   Pro Rata Treatment   31 SECTION 2.21.   Sharing of Setoffs   31 SECTION
2.22.   Payments   31 SECTION 2.23.   Taxes   31 SECTION 2.24.   Assignment of
Commitments Under Certain Circumstances; Duty to Mitigate   32 SECTION 2.25.  
Defaulting Lender   33 SECTION 2.26.   Letters of Credit   34
ARTICLE III
 
40
SECTION 3.01.
 
Organization; Powers
 
40 SECTION 3.02.   Authorization   40 SECTION 3.03.   Enforceability   41
SECTION 3.04.   Governmental Approvals   41 SECTION 3.05.   Financial Statements
  41 SECTION 3.06.   No Material Adverse Change   41 SECTION 3.07.   Title to
Properties; Possession Under Leases   42 SECTION 3.08.   Subsidiaries   42
SECTION 3.09.   Litigation; Compliance with Laws   42 SECTION 3.10.   Agreements
  42 SECTION 3.11.   Federal Reserve Regulations   42 SECTION 3.12.   Investment
Company Act; Public Utility Holding Company Act   43 SECTION 3.13.   Use of
Proceeds   43 SECTION 3.14.   Tax Returns   43 SECTION 3.15.   No Material
Misstatements   43 SECTION 3.16.   Employee Benefit Plans   43 SECTION 3.17.  
Environmental Matters   44 SECTION 3.18.   Insurance   44

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SECTION 3.19.   Security Documents   44 SECTION 3.20.   Location of Real
Property and Leased Premises   45 SECTION 3.21.   Labor Matters   45 SECTION
3.22.   Solvency   46 SECTION 3.23.   Year 2000   46 SECTION 3.24.   Letters of
Credit   46
ARTICLE IV
 
46
SECTION 4.01.
 
All Credit Events
 
46 SECTION 4.02.   Restatement Effective Date   47
ARTICLE V
 
48
SECTION 5.01.
 
Existence; Businesses and Properties
 
48 SECTION 5.02.   Insurance   48 SECTION 5.03.   Obligations and Taxes   49
SECTION 5.04.   Financial Statements, Reports, etc.   49 SECTION 5.05.  
Litigation and Other Notices   51 SECTION 5.06.   Employee Benefits   52 SECTION
5.07.   Maintaining Records; Access to Properties and Inspections   52 SECTION
5.08.   Use of Proceeds   52 SECTION 5.09.   Compliance with Environmental Laws
  52 SECTION 5.10.   Preparation of Environmental Reports   52 SECTION 5.11.  
Audits   53 SECTION 5.12.   Further Assurances   53 SECTION 5.13   Government
Receivables   53 SECTION 5.14   Intellectual Property   53 SECTION 5.15  
Blocked Accounts   54 SECTION 5.16   Receivables   55
ARTICLE VI
 
56
SECTION 6.01.
 
Indebtedness
 
57 SECTION 6.02.   Liens   57 SECTION 6.03.   Sale and Lease-Back Transactions  
58 SECTION 6.04.   Investments, Loans and Advances   58 SECTION 6.05.   Mergers,
Consolidations, Sales of Assets and Acquisitions   61 SECTION 6.06.   Dividends
and Distributions; Restrictions on Ability of Subsidiaries to Pay Dividends   62
SECTION 6.07.   Transactions with Affiliates   62 SECTION 6.08.   [Intentionally
omitted]   62 SECTION 6.09.   Interest Coverage Ratio   62 SECTION 6.10.   Fixed
Charge Coverage Ratio   63 SECTION 6.11.   [Intentionally omitted]   63 SECTION
6.12.   [Intentionally omitted]   63 SECTION 6.13.   Minimum Tangible Net Worth
  63 SECTION 6.14.   Limitation on Modifications of Indebtedness; Modifications
of Certificate of Incorporation, By-laws and Certain Other Agreements, etc   63
SECTION 6.15.   Limitation on Creation of Subsidiaries   63 SECTION 6.16.  
Business   64 SECTION 6.17.   Fiscal Year; Accounting Changes   64
ARTICLE VII
 
64
ARTICLE VIII
 
66
ARTICLE IX
 
69

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SECTION 9.01.
 
Notices
 
69 SECTION 9.02.   Survival of Agreement   70 SECTION 9.03.   Binding Effect  
70 SECTION 9.04.   Successors and Assigns   70 SECTION 9.05.   Expenses;
Indemnity   73 SECTION 9.06.   Right of Setoff   74 SECTION 9.07.   Applicable
Law   74 SECTION 9.08.   Waivers; Amendment   75 SECTION 9.09.   [Intentionally
Deleted]   75 SECTION 9.10.   Entire Agreement   75 SECTION 9.11.   WAIVER OF
JURY TRIAL; CONSEQUENTIAL DAMAGES   76 SECTION 9.12.   Severability   76 SECTION
9.13.   Counterparts   76 SECTION 9.14.   Headings   76 SECTION 9.15.  
Jurisdiction; Consent to Service of Process   76 SECTION 9.16.   Confidentiality
  77 SECTION 9.17.   Delivery of Notes   77

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AMENDED AND RESTATED CREDIT AGREEMENT

    AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 7, 2001, among
ACTIVISION PUBLISHING, INC., a Delaware corporation ("Activision"),
ACTIVISION, INC., a Delaware corporation ("Activision Holdings"), ACTIVISION
VALUE PUBLISHING, INC., a Minnesota corporation (formerly Head Games
Publishing, Inc.) ("Value") and EXPERT SOFTWARE, INC., a Delaware corporation
("Expert"; each of Activision, Activision Holdings, Value and Expert, a
"Borrower" and collectively, "Borrowers"), the Lenders (as defined in
Article I), PNC BANK, NATIONAL ASSOCIATION, a national banking association, as
issuing bank (in such capacity, the "Issuing Bank"), and as administrative agent
(in such capacity, the "Administrative Agent") and collateral agent (in such
capacity, the "Collateral Agent") for the Lenders.

    WHEREAS, the Borrowers, certain financial institutions, including the
Lenders, and the Administrative Agent are parties to the Existing Credit
Agreement (such term and each other capitalized term used but not defined herein
having the meaning given it in Article I), and wish to amend and restate the
Existing Credit Agreement on the terms set forth herein;

    WHEREAS, in connection with such amendment and restatement, certain lenders
under the Existing Credit Agreement and the Syndication Agent (as defined in the
Existing Credit Agreement) will cease to be lenders to the Borrowers, the Term
Loans (under and as defined in the Existing Credit Agreement) will be repaid in
full, and the Total Revolving Credit Commitment will be reduced on the
Restatement Effective Date.

    Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

    SECTION 1.01.  Defined Terms.  As used in this Agreement, the following
terms shall have the meanings specified below:

    "ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.

    "ABR Loan" shall mean any Revolving Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

    "Acquired Debt" shall mean Indebtedness of an Acquired Entity existing at
the time of a Permitted Acquisition which was not incurred in contemplation of
such Permitted Acquisition, is Indebtedness permitted under Section 6.01 and, if
owed by a Domestic Subsidiary, the terms of such Indebtedness permit the
Domestic Subsidiary to become a party to the Subsidiary Guarantee Agreement, the
Pledge Agreement and the Security Agreement, to grant to the Collateral Agent a
first priority Lien on its assets and to make loans, dividends and other
distributions to Activision and, if owed by a Foreign Subsidiary, is not
Guaranteed by any Loan Party.

    "Acquired Entity" shall have the meaning set forth in Section 6.04(h).

    "Activision" shall mean Activision Publishing, Inc., a Delaware corporation,
formerly known as Activision, Inc.

    "Activision Holdings" shall mean Activision, Inc., a Delaware corporation,
formerly known as Activision Holdings, Inc.

    "Adjusted EBITDA" of a person for any period shall mean (a) EBITDA for such
period plus (b) the aggregate amortization with respect to Development Costs for
such period which are not otherwise included as amortization expenses in
calculating EBITDA in accordance with GAAP, minus (c) the principal amount of
loans made during such period to officers and employees permitted under
Section 6.04(n), to the extent not included in calculating EBITDA in accordance
with GAAP.

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    "Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.

    "Administrative Questionnaire" shall mean an Administrative Questionnaire in
such form as may be supplied from time to time by the Administrative Agent.

    "Advance Rates" shall have the meaning assigned to such term in
Section 2.01(a).

    "Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified; provided, however, that for purposes of Section 6.07, the term
"Affiliate" shall also include any person that directly or indirectly owns 5% or
more of any class of Equity Interests of the person specified or that is an
officer or director of the person specified.

    "Agent Fees" shall have the meaning assigned to such term in
Section 2.08(b).

    "Aggregate Revolving Credit Exposure" shall mean the aggregate amount of the
Lenders' Revolving Credit Exposures.

    "Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Base Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Alternate Base Rate shall be determined without regard to clause (b) of the
preceding sentence until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the Base
Rate or the Federal Funds Rate shall be effective on the effective date of such
change in the Base Rate or the Federal Funds Rate, respectively. The term "Base
Rate" shall mean the base commercial lending rate of PNC as publicly announced
to be in effect from time to time, such rate to be adjusted automatically,
without notice, on the effective date of any change in such rate. This rate of
interest is determined from time to time by PNC as a means of pricing some loans
to its customers and is neither tied to any external rate of interest or index
nor does it necessarily reflect the lowest rate of interest actually charged by
PNC to any particular class or category of customers of PNC.

    "Asset Sale" shall mean the sale, transfer or other disposition (by way of
merger or otherwise, and including any casualty event or condemnation that
results in the receipt of any insurance or condemnation proceeds) by any
Borrower or any of the Subsidiaries to any person other than a Borrower or any
Subsidiary Guarantor of (a) any Equity Interests of any of the Subsidiaries or
(b) any other assets of a Borrower or any of its Subsidiaries (other than
(i) inventory, excess, damaged, obsolete or worn out assets, scrap and Permitted
Investments, in each case disposed of in the ordinary course of business,
(ii) assets transferred for an aggregate purchase price not exceeding $1,000,000
in any four consecutive fiscal quarters of the Borrowers, (iii) dispositions
between or among Foreign Subsidiaries or (iv) license, distribution or
development agreements entered into in the ordinary course of business which do
not transfer all or substantially all of the rights owned by a Borrower or its
Subsidiary), provided that any asset sale or series of related asset sales
described in clause (b) above having a value not in excess of $250,000 shall be
deemed not to be an "Asset Sale" for purposes of this Agreement.

    "Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative Agent, in
the form approved by the Administrative Agent.

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    "Board" shall mean the Board of Governors of the Federal Reserve System of
the United States of America.

    "Blocked Accounts" shall have the meaning set forth in Section 5.15.

    "Borrower Guarantee Agreement" shall mean the Borrower Guarantee Agreement
substantially in the form of Exhibit M to the Existing Credit Agreement, made by
the Borrowers in favor of the Collateral Agent for the benefit of the Secured
Parties.

    "Borrowers" shall mean Activision Holdings, Activision, Value, Expert and
any other Subsidiary of Activision Holdings which becomes a Borrower hereunder.

    "Borrowers' Account" shall have the meaning given such term in Section 2.07.

    "Borrowing" shall mean a group of Loans of a single Type made by the Lenders
on a single date and as to which a single Interest Period is in effect.

    "Borrowing Agent" shall mean Activision.

    "Borrowing Base Availability" shall mean that amount determined under
clauses (i) and (ii)(A) of the definition of Formula Amount contained in
Section 2.01(a).

    "Borrowing Request" shall mean a request by the Borrowing Agent on behalf of
a Borrower in accordance with the terms of Section 2.03 and substantially in the
form of Exhibit C to the Existing Credit Agreement, or such other form as shall
be approved by the Administrative Agent.

    "Business Day" shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London and New York interbank markets.

    "Capital Expenditures" shall mean, for any period and with respect to any
person, the aggregate amount of all expenditures during such period by such
person that (a) would be classified as capital expenditures in accordance with
GAAP or are made in property that is the subject of a synthetic lease to which
such person becomes a lessee party during such period but excluding any such
expenditure made (i) to restore, replace or rebuild property to the condition of
such property immediately prior to any damage, loss, destruction or condemnation
of such property, to the extent such expenditure is made with insurance proceeds
or condemnation awards relating to any such damage, loss, destruction or
condemnation, (ii) with proceeds from the sale or exchange of property to the
extent utilized to purchase functionally equivalent property or equipment or
(iii) as the purchase price of any Permitted Acquisition; and (b) constitute
Development Costs.

    "Capital Lease Obligations" of any person shall mean the obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

    "Cash Collateral" shall mean money or Permitted Investments in the
possession of the Collateral Agent (including in the Investment Account) as
collateral hereunder or under any other Loan Document and in which the
Collateral Agent has a first priority perfected Lien.

    "Cash Components" shall mean, with respect to any Permitted Acquisition, the
cash expenditures and (without duplication) Indebtedness (including Acquired
Indebtedness) incurred in connection therewith.

    "Casualty" shall have the meaning set forth in each of the Mortgages.

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    "Casualty Proceeds" shall have the meaning set forth in each of the
Mortgages.

    "Change in Control" shall be deemed to have occurred if (a) any person or
group (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934,
as amended, as in effect on the date hereof) shall own directly or indirectly,
beneficially or of record, shares representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
Activision Holdings, (b) a majority of the seats (other than vacant seats) on
the board of directors of Activision Holdings shall at any time be occupied by
persons who were neither (i) nominated by the board of directors of Activision
Holdings, nor (ii) appointed by directors so nominated, or (c) any change in
control (or similar event, however denominated) with respect to Activision
Holdings or any of its Subsidiaries shall occur under and as defined in any
indenture or agreement in respect of Indebtedness in an aggregate principal
amount in excess of $2,000,000 to which Activision Holdings or any of its
Subsidiaries is a party, or (d) Activision ceases to be a wholly-owned
Subsidiary of Activision Holdings, or (e) any Subsidiary of Activision which is
a Borrower or UK Sub ceases to be a wholly-owned Subsidiary of Activision.

    "Change in Law" shall mean (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15, by any lending office of such Lender or
by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

    "Closing Date" shall mean June 22, 1999.

    "Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.

    "Collateral" shall mean all the "Collateral" as defined in any Security
Document and shall also include any Mortgaged Properties, but shall exclude
"Margin Stock" (as defined in Regulation U of the Board).

    "Commitment" shall mean, with respect to any Lender, such Lender's Revolving
Credit Commitment.

    "Commitment Fee" shall have the meaning assigned to such term in
Section 2.08(a).

    "Commitment Increase" shall have the meaning assigned to such term in
Section 2.30.

    "Condemnation" shall have the meaning set forth in each of the Mortgages.

    "Condemnation Proceeds" shall have the meaning set forth in each of the
Mortgages.

    "Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of Activision dated April 1999.

    "Control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms "Controlling" and "Controlled" shall have meanings correlative thereto.

    "Convertible Subordinated Note Documents" shall mean the Convertible
Subordinated Notes, the Convertible Subordinated Note Indenture and all other
documents executed and delivered with respect to the Convertible Subordinated
Notes or the Convertible Subordinated Note Indenture.

    "Convertible Subordinated Note Indenture" shall mean the Indenture dated as
of December 22, 1997, between Activision and State Street Bank and Trust Company
of California, N.A., as trustee, as

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in effect on the Closing Date and as thereafter amended from time to time in
accordance with the requirements hereof and thereof.

    "Convertible Subordinated Notes" shall mean Activision's 63/4% Convertible
Subordinated Notes due 2005 issued pursuant to the Convertible Subordinated
Note Indenture.

    "Credit Event" shall have the meaning assigned to such term in Section 4.01.

    "Default" shall mean any event or condition which upon notice, lapse of time
or both would constitute an Event of Default.

    "Default Rate" shall have the meaning set forth in Section 2.10.

    "Defaulting Lender" shall have the meaning set forth in Section 2.25(a).

    "Depository Accounts" shall have the meaning set forth in Section 5.15.

    "Development Costs" shall mean prepaid or guaranteed royalties paid to
independent software developers, license fees paid to holders of intellectual
property rights and expenses incurred for product development, in each case to
the extent such amounts are capitalized in accordance with the Statement of
Financial Accounting Standards No. 86, "Accounting for the Costs of Computer
Software to be Sold, Leased or Otherwise Marketed".

    "Dilution Reserve" shall mean the percentage of dilution of Receivables for
the most recent 12 months as determined in the most recent audit by the
Administrative Agent less 5% multiplied by the amount of Eligible Receivables.

    "Dollars" or "$" shall mean lawful money of the United States of America.

    "Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.

    "EBITDA" for any person for any period shall mean the Net Income of such
person for such period, to which shall be added back, to the extent deducted in
calculating Net Income for such period (a) the Interest Expense of such person
for such period, (b) all charges against income for foreign, Federal, state and
local income taxes of such person for such period, (c) the aggregate
depreciation expense of such person for such period, and (d) the aggregate
amortization expense of such person for such period, each such component
determined in accordance with GAAP.

    "Eligible Inventory" shall mean and include, with respect to each Borrower,
Inventory owned by such Borrower (excluding (a) work in process, (b) Inventory
not located at a facility owned or leased by a Borrower in the U.S. or a
warehouse located in the U.S., (c) Inventory on consignment and (d) components),
valued at the lower of cost or market value, determined on a first-in-first-out
basis, which is not, in the Administrative Agent's Permitted Discretion,
obsolete, slow moving or unmerchantable and which the Administrative Agent, in
its Permitted Discretion, shall not deem ineligible Inventory, based on such
considerations as the Administrative Agent may from time to time in its
Permitted Discretion deem appropriate, including, without limitation, whether
the Inventory is subject to a perfected, first priority security interest in
favor of the Collateral Agent, subject to no other Lien, and whether the
Inventory conforms to all standards imposed by any governmental agency, division
or department thereof which has regulatory authority over such goods or the use
or sale thereof applicable. Eligible Inventory shall include all Inventory
in-transit for which title has passed to the Borrower, which is insured to the
full value thereof, under policies for which the Collateral Agent is a loss
payee and for which the Administrative Agent shall have in its possession
(a) all negotiable bills of lading properly endorsed and (b) all non-negotiable
bills of lading issued in the Administrative Agent's name.

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    "Eligible Receivables" shall mean and include with respect to each Borrower
each Receivable of such Borrower arising in the ordinary course of such
Borrower's business and which the Administrative Agent, in its Permitted
Discretion, shall deem to be an Eligible Receivable, based on such
considerations as the Administrative Agent may from time to time in its
Permitted Discretion deem appropriate. A Receivable shall not be deemed eligible
unless such Receivable is subject to the Collateral Agent's first priority
perfected security interest and no other Lien (other than a Permitted Lien on
terms acceptable to the Administrative Agent in its Permitted Discretion and for
which adequate reserves have been established), and is evidenced by an invoice
or other documentary evidence satisfactory to the Administrative Agent. In
addition, no Receivable shall be an Eligible Receivable if:

    (a) it arises out of a sale made by a Borrower to an Affiliate of such
Borrower or to a Person controlled by an Affiliate of such Borrower;

    (b) it is due or unpaid more than one hundred twenty (120) days after the
original invoice date or more than sixty (60) days after the due date;

    (c) fifty percent (50%) or more of the Receivables from such Customer are
not deemed Eligible Receivables hereunder;

    (d) any covenant, representation or warranty contained in this Agreement or
the Security Agreement with respect to such Receivable has been breached in any
material respect;

    (e) the Customer shall (i) apply for, suffer, or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee or liquidator
of itself or of all or a substantial part of its property or call a meeting of
its creditors, (ii) admit in writing its inability, or be generally unable, to
pay its debts as they become due or cease operations of its present business,
(iii) make a general assignment for the benefit of creditors, (iv) commence a
voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vii) acquiesce to, or fail to have dismissed, any petition which is filed
against it in any involuntary case under such bankruptcy laws, or (viii) take
any action for the purpose of effecting any of the foregoing;

    (f)  the sale is to a Customer not domiciled in the United States of America
or Canada unless the sale is on letter of credit, guaranty or acceptance terms,
or backed by credit insurance, in each case acceptable to the Administrative
Agent in its Permitted Discretion;

    (g) the sale to the Customer is on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other similar repurchase
or return basis (other than return rights customary in the Borrower's business)
or is evidenced by chattel paper;

    (h) the Administrative Agent believes, in its Permitted Discretion, that
collection of such Receivable is insecure or that such Receivable may not be
paid by reason of the Customer's financial inability to pay;

    (i)  the Customer is the United States of America or Canada, any state or
province or any department, agency or instrumentality of any of them, unless the
Borrower assigns its right to payment of such Receivable to the Administrative
Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise
complied with other applicable statutes or ordinances;

    (j)  the goods giving rise to such Receivable have not been shipped and
delivered to the Customer or the services giving rise to such Receivable have
not been fully performed by the Borrower or the Receivable otherwise does not
represent a final sale;

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    (k) the Receivables of the Customer exceed a credit limit determined by the
Administrative Agent, in its Permitted Discretion, to the extent such Receivable
exceeds such limit;

    (l)  the Receivable is subject to any unwaived offset, deduction, defense,
dispute, or counterclaim, the Customer is also a creditor or supplier of a
Borrower or the Receivable is contingent in any respect or for any reason;

    (m) the Borrower has made any agreement with the Customer for any deduction
therefrom, except for discounts or allowances made in the ordinary course of
business, all of which discounts or allowances are reflected in the calculation
of the face value of each respective invoice related thereto;

    (n) any return, rejection or repossession of the merchandise has occurred
but only to the extent of the portion of the Receivable relating to the
returned, rejected or repossessed goods;

    (o) such Receivable is not payable to a Borrower;

    (p) such Receivable is not otherwise satisfactory to the Administrative
Agent in its Permitted Discretion;

    (q) the Borrower has not observed and complied with all laws of the
jurisdiction in which the Customer or the Receivable is located which, if not
observed or complied with, would deny the Borrower access to the courts of such
jurisdiction;

    (r) the Receivable arises out of sales of Inventory for which the Borrower
acts solely as a collection agent;

    (s) Receivables from original equipment manufacturers or licensees unless
such Receivables arise out of an invoice issued for shipment of goods on normal
trade terms; or

    (t)  the Receivable is owed by Kaboom.

    "environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.

    "Environmental Claim" shall mean any written accusation, allegation, notice
of violation, claim, demand, order, directive, cost recovery action or other
cause of action by, or on behalf of, any Governmental Authority or any person
for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon (a) the existence, or
the continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases), (b) exposure to any Hazardous Material,
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.

    "Environmental Law" shall mean any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material or to health and safety
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq. (collectively "CERCLA"),
the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C.
§ 6901 et seq., the Federal Water Pollution Control Act, as amended by the Clean
Water Act of 1977, 33 U.S.C. § 1251 et seq., the Clean Air Act

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of 1970, as amended 42 U.S.C. § 7401 et seq., the Toxic Substances Control Act
of 1976, 15 U.S.C. § 2601 et seq., the Occupational Safety and Health Act of
1970, as amended, 29 U.S.C. § 651 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq., the Safe Drinking Water
Act of 1974, as amended, 42 U.S.C. § 300(f) et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. § 5101 et seq., and any similar or implementing
state, local or foreign law, and all amendments or regulations promulgated under
any of the foregoing.

    "Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.

    "Equity Interests" shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a person.

    "Equity Issuance" shall mean any issuance or sale by Activision Holdings or
any Subsidiary of any Equity Interests of Activision Holdings or any Subsidiary,
as applicable, or any obligations convertible into or exchangeable for, or
giving any Person a right, option or warrant to acquire, such Equity Interests
or such convertible or exchangeable obligations, except in each case for (a) any
issuance or sale to a Borrower or any Subsidiary, (b) any issuance of directors'
qualifying shares, (c) sales or issuances of common stock of Activision Holdings
to management or key employees of Activision Holdings or any Subsidiary or
Kaboom under any employee stock option or stock purchase plan or employee
benefit plan in existence from time to time or other stock options from time to
time granted to employees or directors, or in connection with license,
distribution or development or other similar agreements, (d) conversion of the
Convertible Subordinated Notes into common stock of Activision Holdings,
(e) issuance of common stock (or options or warrants to purchase common stock)
of Activision Holdings as consideration for any Permitted Acquisition, and
(f) other issuances of Equity Interests for non-cash or no consideration.

    "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.

    "ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with any Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

    "ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by a Borrower or any of
its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability with respect to the withdrawal from any Plan or Multiemployer
Plan; (g) the receipt by a Borrower or any of its ERISA Affiliates of any
notice, or the receipt by any Multiemployer Plan from a Borrower or any of its
ERISA Affiliates of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA; or
(h) any Foreign Benefit Event.

    "Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar Loans.

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    "Eurodollar Loan" shall mean any Revolving Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.

    "European Distribution Subsidiaries" shall mean Combined Distribution
(Holdings) Limited, PDQ Distribution Limited, CentreSoft Limited, NBG EDV
Handels und Verlags GmbH & Co. KG, Target Software Vertriebs GmbH, CD Contact
Data GmbH, Contact Data N.V., and Contact Data Belgium NV and their respective
successors and assignors and any other Foreign Subsidiary engaged primarily in
the business of distributing a Borrower's and other persons' products in Europe.

    "Event of Default" shall have the meaning assigned to such term in
Article VII.

    "Excluded Taxes" shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of a Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which a Borrower is located and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a request by the Borrowers
under Section 2.24(a)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.23(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrowers with respect to such withholding tax pursuant to
Section 2.23(a).

    "Existing Credit Agreement" shall mean the Credit Agreement dated as of
June 21, 1999, among the Borrowers, the lenders party thereto, Credit Suisse
First Boston, acting through its New York Branch, as Syndication Agent, and PNC
Bank, National Association, as Administrative Agent and Collateral Agent, as
amended or otherwise modified from time to time prior to the Restatement
Effective Date.

    "Existing Letter of Credit" shall mean each letter of credit previously
issued for the account of Activision or its Domestic Subsidiaries pursuant to
the Existing Credit Agreement that is outstanding on the Restatement Effective
Date.

    "Expert" shall mean Expert Software, Inc., a Delaware corporation.

    "Federal Funds Rate" shall mean, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day which is a Business Day, the average of quotations for such day on such
transactions received by PNC from three Federal funds brokers of recognized
standing selected by PNC.

    "Fee Letter" shall mean the Fee Letter dated concurrently herewith, between
Activision, the Administrative Agent and the Collateral Agent.

    "Fees" shall mean the Commitment Fees, the Agent Fees, the L/C Participation
Fees and the Issuing Bank Fees.

    "Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such
corporation.

    "Fixed Charge Coverage Ratio" with respect to any person for any period
shall mean the ratio of (a) Adjusted EBITDA of such person plus, in the case of
any Borrower (and without duplication of any amounts included in the Borrowers'
Net Income) the amount of dividends or loans or repayments of

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loans actually received from its Foreign Subsidiaries during such period less
the amount of loans or capital contributions made to the Foreign Subsidiaries
during such period to (b) Fixed Charges for such period.

    "Fixed Charges" with respect to any person for any period shall mean,
without duplication, the sum of (a) Interest Expense for such period, plus
(b) payments on long term Indebtedness (including Capital Lease Obligations) of
such person for such period, plus(c) Capital Expenditures made by such person
during such period, plus (d) taxes paid in cash by such person during such
period.

    "Foreign Benefit Event" shall mean, with respect to any Foreign Pension
Plan, (a) the existence of unfunded liabilities in excess of the amount
permitted under any applicable law, or in excess of the amount that would be
permitted absent a waiver from a Governmental Authority, (b) the failure to make
the required contributions or payments, under any applicable law, on or before
the due date for such contributions or payments, (c) the receipt of a notice by
a Governmental Authority relating to the intention to terminate any such Foreign
Pension Plan or to appoint a trustee or similar official to administer any such
Foreign Pension Plan, or alleging the insolvency of any such Foreign Pension
Plan and (d) the incurrence of any liability in excess of $2,000,000 (or the
Dollar equivalent thereof in another currency) by a Borrower or any of its
Subsidiaries under applicable law on account of the complete or partial
termination of such Foreign Pension Plan or the complete or partial withdrawal
of any participating employer therein, or (e) the occurrence of any transaction
that is prohibited under any applicable law and could reasonably be expected to
result in the incurrence of any liability by the Borrower or any of its
Subsidiaries, or the imposition on a Borrower or any of its Subsidiaries of any
fine, excise tax or penalty resulting from any noncompliance with any applicable
law, in each case in excess of $2,000,000 (or the Dollar equivalent thereof in
another currency).

    "Foreign Lender" shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which a Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

    "Foreign Pension Plan" shall mean any plan, fund (including any super
annuating fund) or other similar program established or maintained outside the
United States by a Borrower or any one or more of its Subsidiaries primarily for
the benefit of employees of such Borrower or such Subsidiaries residing outside
the United States, which plan, fund or other similar program provides, or
results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which plan
is not subject to ERISA or the Code.

    "Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.

    "Formula Amount" shall have the meaning set forth in Section 2.01(a).

    "GAAP" shall mean generally accepted accounting principles in the United
States applied on a consistent basis.

    "Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.

    "Granting Lender" shall have the meaning specified in Section 9.04(i).

    "Guarantee" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation,
(b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other

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obligation or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation;
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.

    "Hazardous Materials" shall mean all explosive or radioactive substances or
wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

    "Hedging Agreement" shall mean any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against fluctuations in interest or currency exchange rates and not
entered into for speculation.

    "Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed,
(g) all Guarantees by such person of Indebtedness of others, (h) all Capital
Lease Obligations of such person, (i) all obligations of such person in respect
of Hedging Agreements and (j) all obligations of such person as an account party
in respect of letters of credit and bankers' acceptances. The Indebtedness of
any person shall include the Indebtedness of any partnership in which such
person is a general partner. Prepaid or guaranteed royalties to independent
software developers, license fees paid or guaranteed to holders of intellectual
property rights and expenses incurred for product development, whether or not
capitalized, are not Indebtedness hereunder.

    "Indemnified Taxes" shall mean Taxes other than Excluded Taxes.

    "Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D to the Existing Credit Agreement, among the Borrowers, the Subsidiary
Guarantors and the Collateral Agent.

    "Individual Formula Amount" shall mean, at the date of determination
thereof, with respect to each Borrower an amount equal to: (a) up to the
Receivables Advance Rate of the sum of Eligible Receivables of such Borrower
less its Dilution Reserve, plus (b) up to the Inventory Advance Rate of the
value of Eligible Inventory of such Borrower; plus (c) the product of (i) the
aggregate amount of outstanding Trade L/C Exposure of such Borrower times
(ii) the Inventory Advance Rate, plus (d) Cash Collateral of such Borrower,
minus (e) such other reserves as the Administrative Agent in its Permitted
Discretion deems proper and necessary from time to time.

    "Intercompany Note" shall mean the demand promissory note in the original
principal amount of approximately $23,000,000 from UK Sub to Activision
evidencing the obligations of UK Sub to Activision, which is secured by the UK
Charge Documents.

    "Interest Coverage Ratio" with respect to any person for any period shall
mean the ratio of Adjusted EBITDA of such person for such period to the Interest
Expense of such person for such period.

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    "Interest Expense" with respect to any person for any period shall mean the
total cash interest expense of such person (including amortization of deferred
financing fees, premiums or interest rate protection agreements and original
issue discounts) for such period determined in accordance with GAAP.

    "Interest Payment Date" shall mean (a) with respect to any ABR Loan, the
last Business Day of each month, and (b) with respect to any Eurodollar Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration, each day that would have been an
Interest Payment Date had successive Interest Periods of three months' duration
been applicable to such Borrowing, and, in addition, the date of any prepayment
of a Eurodollar Borrowing or conversion of a Eurodollar Borrowing to an ABR
Borrowing.

    "Interest Period" shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrowing Agent may elect (or such other period thereafter as the Borrowing
Agent may request and all the Lenders with Loans included in such Borrowing may
agree); provided, however, that if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.

    "Investment Account" shall mean a cash collateral account maintained by the
Collateral Agent invested in Permitted Investments and under the control of the
Collateral Agent.

    "Inventory" with respect to any person shall mean and include all of its now
owned or hereafter acquired goods, merchandise and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all raw materials, work in process, finished goods and materials and
supplies of any kind, nature or description which are or might be used or
consumed in its business or used in selling or furnishing such goods,
merchandise and other personal property, and all documents of title or other
documents representing them.

    "Inventory Advance Rate" shall have the meaning set forth in
Section 2.01(a)(ii) hereof.

    "Issuing Bank" shall mean as the context may require, (a) PNC Bank, National
Association, with respect to Letters of Credit issued by it, (b) with respect to
each Existing Letter of Credit, the Lender that issued such Existing Letter of
Credit, (c) any other Lender that may become an Issuing Bank pursuant to
Section 2.26(h) or (j), with respect to Letters of Credit issued by such Lender,
or (d) collectively, all the foregoing.

    "Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.08(c).

    "Joinder Agreement" shall mean a Borrower Joinder Agreement substantially in
the form attached hereto as Exhibit E to the Existing Credit Agreement executed
by Activision Holdings or any Domestic Subsidiary which becomes a Borrower
hereunder.

    "Kaboom" shall mean Kaboom.com, Inc., a Delaware corporation, and a
wholly-owned subsidiary of Activision Holdings.

    "L/C Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.26.

    "L/C Disbursement" shall mean a payment or disbursement made by the Issuing
Bank pursuant to a Letter of Credit.

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    "L/C Exposure" shall mean at any time of determination, the sum of (a) the
Trade L/C Exposure and (b) the Standby L/C Exposure and "L/C Exposure" of a
Borrower shall mean the sum of (a) the Trade L/C Exposure with respect to Trade
Letters of Credit issued for the account of such Borrower and the Standby L/C
Exposure with respect to Standby Letters of Credit issued for the account of
such Borrower.

    "L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.06(c).

    "Lenders" shall mean (a) the financial institutions listed on Schedule 2.01
(other than any such financial institution that has ceased to be a party hereto
pursuant to an Assignment and Acceptance) and (b) any financial institution that
has become a party hereto pursuant to an Assignment and Acceptance.

    "Letter of Credit" shall mean Trade Letters of Credit, Standby Letters of
Credit and any Existing Letter of Credit.

    "LIBO Rate" shall mean for any Eurodollar Borrowing for the then current
Interest Period relating thereto the interest rate per annum determined by PNC
by dividing (the resulting quotient rounded upwards, if necessary, to the
nearest 1/100th of 1% per annum) (i) the rate of interest determined by PNC in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the eurodollar rate two (2) Business Days prior to
the first day of such Interest Period for an amount comparable to such
Eurodollar Borrowing and having a borrowing date and a maturity comparable to
such Interest Period by (ii) a number equal to 1.00 minus the Reserve
Percentage.

    "Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

    "Loan Documents" shall mean this Agreement, the Letters of Credit, the
Borrower Guarantee Agreement, the Subsidiary Guarantee Agreement, the Security
Documents, the Indemnity, Subrogation and Contribution Agreement, any Joinder
Agreement and any and all agreements, instruments and documents now or hereafter
executed by a Borrower or a Subsidiary Guarantor and delivered to the
Administrative Agent, the Issuing Bank or any Lender in connection with this
Agreement or the Existing Credit Agreement.

    "Loan Parties" shall mean the Borrowers and the Subsidiary Guarantors.

    "Loans" shall mean the Revolving Loans.

    "Margin Stock" shall have the meaning assigned to such term in Regulation U.

    "Master Note" shall mean any demand promissory note evidencing loans from a
Loan Party to a Foreign Subsidiary.

    "Material Adverse Effect" shall mean a material adverse effect on (a) the
condition, operations, assets, business or prospects of the Loan Parties, taken
as a whole, or on Activision Holdings and its Subsidiaries, taken as a whole;
(b) the ability of the Loan Parties taken as a whole to pay or perform the
Obligations in accordance with the terms thereof; (c) the value of the
Collateral or the Collateral Agent's Liens on the Collateral or the priority of
such Liens; (d) the validity or enforceability of any Loan Document (other than
with respect to a Subsidiary which is not a Material Subsidiary) or (e) the
practical realization of the benefits of the Administrative Agent's, the
Collateral Agent's and each Lender's rights and remedies under this Agreement
and the other Loan Documents.

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    "Material Contract" shall mean any and all contracts or agreements of a
Borrower or any Domestic Subsidiary involving amounts remaining to be paid in
excess of $1,000,000.

    "Material Subsidiary" shall mean any Subsidiary which has assets with a book
value in excess of $5,000 as of the date of determination.

    "Merger Agreement" shall mean the Amended and Restated Agreement and Plan of
Merger dated as of April 19, 1999, by and among Activision, Sub and Expert, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof and thereof.

    "Mortgaged Properties" shall mean the owned real properties and leasehold
and subleasehold interests of the Loan Parties at the time subject to the
Mortgages.

    "Mortgages" shall mean the mortgages, deeds of trust, leasehold mortgages,
assignments of leases and rents, modifications and other security documents
delivered pursuant to Section 5.12, each in form and substance satisfactory the
Administrative Agent.

    "Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

    "Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the cash
proceeds (including cash proceeds subsequently received (as and when received)
in respect of noncash consideration initially received), net of (i) selling
expenses (including reasonable broker's fees or commissions, legal fees,
transfer and similar taxes and the Borrowers' good faith estimate of income
taxes paid or payable in connection with such sale), (ii) amounts provided as a
reserve, in accordance with GAAP, against any liabilities under any
indemnification obligations associated with such Asset Sale (provided that, to
the extent and at the time any such amounts are released from such reserve, such
amounts shall constitute Net Cash Proceeds) and (iii) the principal amount,
premium or penalty, if any, interest and other amounts on any Indebtedness for
borrowed money which is secured by the asset sold in such Asset Sale and which
is repaid with such proceeds (other than any such Indebtedness assumed by the
purchaser of such asset or repayments of the Revolving Loans) and (b) with
respect to any issuance or disposition of Indebtedness or any Equity Issuance,
the cash proceeds thereof, net of all taxes and customary fees, commissions,
costs and other expenses incurred in connection therewith. Notwithstanding the
foregoing, Net Cash Proceeds shall not include any amounts received by the
Borrowers or any Subsidiary in respect of any casualty or condemnation to the
extent Borrower or such Subsidiary uses the amounts so received within 180 days
of the receipt thereof to rebuild, restore or replace the property subject to
such casualty or condemnation.

    "Net Income" shall mean, for any period, net income or loss of the Loan
Parties for such period determined on a consolidated basis in accordance with
GAAP; provided that there shall be excluded (a) the income of any Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by the Subsidiary of that income is prohibited by operation of the terms of its
charter or any agreement, instrument, judgment, decree, statute, rule or
governmental regulation applicable to the Subsidiary except to the extent that
dividends or distributions are actually paid in compliance therewith, (b) the
income (or loss) of any person accrued prior to the date it becomes a Subsidiary
or is merged into or consolidated with a Loan Party or the date that person's
assets are acquired by a Loan Party, and (c) the income of any Subsidiary which
is not a wholly owned Subsidiary except to the extent that dividends or
distributions are actually paid to a Loan Party.

    "New Lenders" shall have the meaning assigned to such term in Section 2.30.

    "Obligations" shall mean and include any and all of each Borrower's
Indebtedness and/or liabilities to the Administrative Agent, the Collateral
Agent, the Issuing Bank or Lenders or any corporation that directly or
indirectly controls or is controlled by or is under common control with the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender of
every kind, nature and description, direct or indirect, secured or unsecured,
joint, several, joint and several, absolute or contingent, due or

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to become due, now existing or hereafter arising, contractual or tortious,
liquidated or unliquidated, regardless of how such indebtedness or liabilities
arise or by what agreement or instrument they may be evidenced or whether
evidenced by any agreement or instrument, including, but not limited to, any and
all of any Borrower's Indebtedness and/or liabilities under this Agreement, the
other Loan Documents or under any other agreement between the Administrative
Agent, the Collateral Agent, the Issuing Bank or Lenders and any Borrower and
all obligations of any Borrower to the Administrative Agent, the Collateral
Agent, the Issuing Bank or Lenders to perform acts or refrain from taking any
action.

    "Other Taxes" shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.

    "Payment Office" shall mean initially Two Tower Center Boulevard, East
Brunswick, New Jersey 08816; thereafter, such other office of the Administrative
Agent, if any, which it may designate by notice to the Borrowing Agent and to
each Lender to be the Payment Office.

    "PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.

    "PNC" shall mean PNC Bank, National Association.

    "Perfection Certificate" shall mean the Perfection Certificate substantially
in the form of Annex 2 to the Security Agreement.

    "Permitted Acquisition" shall have the meaning assigned to such term in
Section 6.04(h).

    "Permitted Discretion" means the Administrative Agent's reasonable and good
faith judgment based upon any factor which the Administrative Agent believes in
good faith (a) could reasonably be expected to adversely affect the value of any
Collateral, the enforceability or priority of the Collateral Agent's Liens or
the amount that the Lenders would be likely to receive upon a liquidation of the
Collateral; (b) suggests that any report of Collateral or financial information
is incomplete, inaccurate or misleading in any material respect; (c) could
reasonably be expected to create a Default or Event of Default or increase the
likelihood of an insolvency or bankruptcy proceeding. In exercising such
judgment with respect to matters relating to the determination of Eligible
Inventory and Eligible Receivables, changes in advance rates or the imposition,
increase or reduction of reserves, the Administrative Agent may reasonably take
into account factors included in the definitions of Eligible Inventory and
Eligible Receivables, as well as changes in concentration of risk of
Receivables, changes in collection history and dilution, changes in demand for
and pricing of Inventory, and other changes in the value of the Inventory or
Receivables that tend to increase the credit risk of lending to the Borrowers on
the security of Inventory or Receivables. The burden of establishing lack of
good faith shall be on the Borrowers.

    "Permitted Investments" shall mean any of the following:

    (a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

    (b) investments in commercial paper maturing within 180 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard & Poor's Ratings Service or from Moody's
Investors Service, Inc.;

    (c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank

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organized under the laws of the United States of America or any State thereof
that has a combined capital and surplus and undivided profits of not less than
$500,000,000;

    (d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (c) above; and

    (e) such other investments that are acceptable to the Administrative Agent.

    "person" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.

    "Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 307 of ERISA, and in respect of which the
Borrowers or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.

    "Pledge Agreement" shall mean the Pledge Agreement, substantially in the
form of Exhibit F to the Existing Credit Agreement, between the Borrowers, the
Subsidiaries party thereto and the Collateral Agent for the benefit of the
Secured Parties, together with any pledge or similar agreement required or
advisable under the laws of any foreign jurisdiction to perfect the pledge the
stock of the Foreign Subsidiaries.

    "Pro Rata Percentage" of any Revolving Credit Lender at any time shall mean
the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment.

    "Receivables" of a person shall mean and include all of its accounts,
contract rights, instruments (including those evidencing indebtedness owed to it
by its Affiliates), documents, chattel paper, general intangibles relating to
accounts, drafts and acceptances, and all other forms of obligations owing to
such person arising out of or in connection with the sale or lease of Inventory
or the rendition of services, all guarantees and other security therefor,
whether secured or unsecured, now existing or hereafter created, and whether or
not specifically sold or assigned to the Administrative Agent or Collateral
Agent hereunder.

    "Receivables Advance Rate" shall have the meaning set forth in
Section 2.01(a)(i) hereof.

    "Register" shall have the meaning given such term in Section 9.04(d).

    "Regulation T" shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

    "Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

    "Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

    "Related Fund" shall mean, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.

    "Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.

    "Remedial Action" shall mean (a)"remedial action" as such term is defined in
CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily

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undertaken to: (i) cleanup, remove, treat, abate or in any other way address any
Hazardous Material in the environment; (ii) prevent the Release or threat of
Release, or minimize the further Release of any Hazardous Material so it does
not migrate or endanger or threaten to endanger public health, welfare or the
environment; or (iii) perform studies and investigations in connection with, or
as a precondition to, (i) or (ii) above.

    "Repayment Date" shall have the meaning given such term in Section 2.12.

    "Repurchase Amount" shall mean an amount equal to the sum of (i) the net
cash proceeds received by Activision Holdings from the exercise of stock options
or warrants since June 8, 2000 plus (ii) the net cash proceeds received by
Activision Holdings since June 8, 2000 from any other Equity Issuances plus
(iii) the value of the common stock of Activision Holdings issued since the
Restatement Effective Date, or additional paid in capital since such date, as a
result of the conversion of any Convertible Subordinated Notes less
(iv) payments made since June 8, 2000 in connection with any repurchase or
redemption of Convertible Subordinated Notes or capital stock; provided that no
more than $10,000,000 of Revolving Loans may be used to fund the Repurchase
Amount.

    "Required Lenders" shall mean, at any time, Lenders having Loans, L/C
Exposure and unused Revolving Credit Commitments representing at least a
majority of the sum of all Loans outstanding, L/C Exposure and unused Revolving
Credit Commitments at such time, subject, however, to the provisions of
Section 2.25 with respect to Defaulting Lenders.

    "Responsible Officer" of any corporation shall mean any executive officer or
Financial Officer of such corporation and any other officer or similar official
thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement.

    "Restatement Effective Date" shall mean the date on which this Agreement
becomes effective in accordance with its terms.

    "Restructure Date" shall mean May 7, 2001.

    "Revolving Credit Borrowing" shall mean a Borrowing comprised of Revolving
Loans.

    "Revolving Credit Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to Section 2.11 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 2.30 or 9.04.

    "Revolving Credit Exposure" shall mean, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Revolving
Loans of such Lender, plus the aggregate amount at such time of such Lender's
L/C Exposure.

    "Revolving Credit Lender" shall mean a Lender with a Revolving Credit
Commitment.

    "Revolving Credit Maturity Date" shall mean June 21, 2002.

    "Revolving Loans" shall mean the revolving loans made by the Lenders to the
Borrowers pursuant to Section 2.01. Each Revolving Loan shall be a Eurodollar
Loan or an ABR Loan.

    "Schedule of Receivables" shall mean, as to each Borrower, a detailed aged
trial balance of all then existing Receivables of such Borrower in form and
substance satisfactory to the Administrative Agent, specifying in each case the
names, addresses, face amount and dates of invoice(s) for each Customer
obligated on a Receivable so listed and, if requested by the Administrative
Agent, copies of proof of delivery and customer statements and the original copy
of all documents, including, without limitation, repayment histories and present
status reports, and such other matters and information relating to the status of
the Receivables and/or the Customers so scheduled as the Administrative Agent
may from time to time reasonably request.

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    "Schedule of Payables" shall mean, as to each Borrower, a detailed aged
listing of such Borrower's existing accounts payable, specifying the names of
each creditor and the amount owed to such creditor and such matters and
information relating to the status of such Borrower's accounts payable so
scheduled as the Administrative Agent may from time to time reasonably request.

    "Seasonal Advance" shall have the meaning set forth in Section 2.01.

    "Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.

    "Security Agreement" shall mean the Security Agreement, substantially in the
form of Exhibit G to the Existing Credit Agreement, among the Borrowers, the
Subsidiaries party thereto and the Collateral Agent for the benefit of the
Secured Parties.

    "Security Documents" shall mean the Mortgages, the Security Agreement, the
Pledge Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.12.

    "Settlement Date" shall mean the Restatement Effective Date and thereafter
Wednesday of each Week unless such day is not a Business Day in which case it
shall be the next succeeding Business Day.

    "SPC" shall have the meaning specified in Section 9.04(i).

    "Standby L/C Exposure" shall mean, at any time of determination, the sum of
(a) the aggregate undrawn amount of all outstanding Standby Letters of Credit
and (b) the aggregate amount that has been drawn under any Standby Letter of
Credit but for which the Issuing Bank or the Lenders, as the case may be, have
not been reimbursed by the Borrowers at such time.

    "Standby Letter of Credit" shall mean (a) each irrevocable letter of credit
issued pursuant to Section 2.26(a) under which the Issuing Bank agrees to make
payments for the account of a Borrower, on behalf of such Borrower, in respect
of obligations of such Borrower incurred pursuant to contracts made or
performances undertaken or to be undertaken or like matters relating to
contracts to which a Borrower is or proposes to become a party in the ordinary
course of such Borrower's business and (b) each Existing Letter of Credit.

    "Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject with
respect to the Adjusted LIBO Rate, for Eurocurrency Liabilities (as defined in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

    "Sub" shall mean Expert Acquisition Corp., a Delaware corporation.

    "Subordinated Debt" shall mean unsecured Indebtedness of Activision which
has a maturity date at least one year after the Revolving Credit Maturity Date,
no principal payments due prior to one year after the Revolving Credit Maturity
Date and is otherwise on terms and conditions set forth on Exhibit K to the
Existing Credit Agreement.

    "subsidiary" shall mean, with respect to any person (herein referred to as
the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made,

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owned, controlled or held, or (b) that is, at the time any determination is
made, otherwise Controlled, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent and that is
consolidated with such person in accordance with GAAP.

    "Subsidiary" shall mean any subsidiary of Activision Holdings, excluding,
however, Kaboom and any of its subsidiaries.

    "Subsidiary Guarantee Agreement" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit H to the Existing Credit
Agreement, made by the Subsidiary Guarantors in favor of the Collateral Agent
for the benefit of the Secured Parties.

    "Subsidiary Guarantor" shall mean each Subsidiary listed on
Schedule 1.01(a), and each other Subsidiary that is or becomes a party to the
Subsidiary Guarantee Agreement.

    "Tangible Net Worth" for any person shall mean, at a particular date (a) the
aggregate amount of all assets of such person as may be properly classified as
such in accordance with GAAP consistently applied, excluding such assets as are
properly classified as intangible assets under GAAP and assets evidencing any
receivable from or investments in any Affiliate less (b) the sum of (i) the
aggregate amount of all liabilities of such person and (ii) the sum of
Development Costs and the value of warrants issued by Activision Holdings, to
the extent that such amount exceeds $40,000,000.

    "Taxes" shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.

    "Terminating Lender" shall mean a party that is a "Lender" under the
Existing Credit Agreement as of the Restatement Effective Date but not a Lender
hereunder.

    "Total Debt" at any time and with respect to any person shall mean the total
Indebtedness of such person at such time (excluding Indebtedness of the type
described in clause (i) of the definition of such term).

    "Total Revolving Credit Commitment" shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time.

    "Trade L/C Exposure" shall mean, at any time of determination, the sum of
(a) the aggregate undrawn amount of all outstanding Trade Letters of Credit,
(b) the aggregate unpaid amount of all accepted usance drafts drawn under
Letters of Credit and (c) the aggregate amount that has been drawn under any
Trade Letter of Credit but for which the Issuing Bank or the Lenders, as the
case may be, have not been reimbursed by the Borrowers at such time.

    "Trade Letter of Credit" shall mean each sight or usance commercial
documentary letter of credit issued by the Issuing Bank for the account of a
Borrower pursuant to Section 2.26(a) for the purchase of goods in the ordinary
course of business.

    "Transactions" shall have the meaning assigned to such term in Section 3.02.

    "Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term "Rate" shall include the
Adjusted LIBO Rate and the Alternate Base Rate.

    "UK Sub" shall mean Activision UK, Ltd., a corporation organized under the
laws of England and Wales.

    "UK Charge Documents" shall mean the various pledge and security agreements
securing the Intercompany Note.

    "Undrawn Availability" at a particular date shall mean an amount equal to
(a) the lesser of (i) the Formula Amount or (ii) the Total Revolving Credit
Commitment minus (b) the sum of (i) the

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Aggregate Revolving Credit Exposure, plus (ii) all amounts due and owing to the
Loan Parties' trade creditors which are outstanding more than 60 days after the
due date, plus (iii) fees and expenses for which Borrowers are liable but which
have not been paid or charged to Borrowers' Account.

    "Week" shall mean the time period commencing with the opening of business on
a Wednesday and ending on the end of business the following Tuesday.

    "wholly owned subsidiary" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the equity or 100% of the ordinary
voting power or 100% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person.

    "Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

    SECTION 1.02.  Terms Generally.  The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, (a) any reference in this Agreement to any Loan Document shall
mean such document as amended, restated, supplemented or otherwise modified from
time to time and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that if the Borrowing Agent notifies the Administrative Agent that the
Borrowers wish to amend any covenant in Article VI or any related definition to
eliminate the effect of any change in GAAP occurring after the date of this
Agreement on the operation of such covenant (or if the Administrative Agent
notifies the Borrowing Agent that the Required Lenders wish to amend Article VI
or any related definition for such purpose), then the Borrowers' compliance with
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrowers
and the Required Lenders.

ARTICLE II

The Credits

    SECTION 2.01.  Commitments; Formula Amount.  (a)  Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly, to make Revolving Loans to the
Borrowers, at any time and from time to time on or after the Restatement
Effective Date and until the earlier of the Revolving Credit Maturity Date and
the termination of the Revolving Credit Commitment of such Lender in accordance
with the terms hereof, in an aggregate principal amount at any time outstanding
that will not result in such Lender's Revolving Credit Exposure exceeding the
lesser of (x) such Lender's Revolving Credit Commitment and (y) such Lender's
Pro Rata Percentage of an amount equal to the sum of the following (the "Formula
Amount"):

     (i) up to 85%, subject to the provisions of Section 2.01(c) hereof
("Receivables Advance Rate"), of the sum of (A) Eligible Receivables of the
Borrowers less (B) the Dilution Reserve, plus

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    (ii) up to the lesser of (A) the sum of (a) the lesser of (x) 50%, subject
to the provisions of Section 2.01(c) hereof, of the value of Eligible Inventory
of the Borrowers and (y) 85%, subject to the provisions of
Section 2.01(c) hereof, of the orderly liquidation value of Eligible Inventory
of Borrowers, as determined by appraisals satisfactory to Administrative Agent
(in either case, the "Inventory Advance Rate" and together with the Receivables
Advance Rate, the "Advance Rates") and (b) the product of (x) the Trade L/C
Exposure for Inventory for which title has not yet passed to the Borrower times
(y) the Inventory Advance Rate, or (B) the greater of (a) $15,000,000 or
(b) forty percent (40%) of the Borrowing Base Availability in the aggregate at
any one time, minus

    (iii) the L/C Exposure, plus

    (iv) from August 15 to November 15, an amount not in excess of $5,000,000
(any Revolving Loan under this clause (iv), a "Seasonal Advance"); plus

    (v) Cash Collateral; minus

    (vi) such other reserves as the Administrative Agent may deem proper and
necessary from time to time in its Permitted Discretion.

    (b) Each Revolving Credit Lender agrees, severally and not jointly, to make
Revolving Loans to each Borrower in aggregate amounts outstanding at any time
not greater than such Lender's Pro Rata Percentage of such Borrower's Individual
Formula Amount less such Borrower's L/C Exposure.

    (c) The Advance Rates may be increased (subject to consents required by
Section 9.08) or decreased by the Administrative Agent at any time and from time
to time in the exercise of its Permitted Discretion; provided, however, that
(i) any decrease in any Advance Rate shall only be effective on the fifth day
after the Administrative Agent has given the Borrowing Agent notice of such
decrease and (ii) any increase or decrease in the Receivables Advance Rate shall
only apply to Eligible Receivables created and assigned to the Administrative
Agent after such change in Advance Rate becomes effective, but any increase or
decrease in the Inventory Advance Rate shall apply to all Eligible Inventory
whether then owned or thereafter acquired. Each Borrower consents to any such
increases or decreases and acknowledges that decreasing the Advance Rates or
increasing the reserves may limit or restrict Revolving Loans or Letters of
Credit requested by the Borrowing Agent.

    (d) For purposes of calculating the Formula Amount, Individual Formula
Amount, Eligible Inventory, and Eligible Receivables, the Receivables and
Inventory acquired in any Permitted Acquisition shall not be included until such
time as the Administrative Agent has performed an audit with results
satisfactory to it in its Permitted Discretion.

    SECTION 2.02.  Loans.  (a)  Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
applicable Commitments; provided, however, that the failure of any Lender to
make any Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender). Except for Loans deemed made pursuant to
Section 2.03(a), the Loans comprising any Borrowing shall be in an aggregate
principal amount that is (i) an integral multiple of $1,000,000 or (ii) equal to
the remaining available balance of the applicable Commitments.

    (b) Subject to Sections 2.15 and 2.17, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrowing Agent may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not

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affect the obligation of the Borrowers to repay such Loan in accordance with the
terms of this Agreement. Borrowings of more than one Type may be outstanding at
the same time; provided, however, that the Borrowers shall not be entitled to
request any Borrowing that, if made, would result in more than five Eurodollar
Borrowings outstanding hereunder at any time. For purposes of the foregoing,
Borrowings made by a Borrower having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate Borrowings.

    (c) Notwithstanding any other provision of this Agreement, the Borrowing
Agent shall not be entitled to request any Revolving Credit Borrowing if the
Interest Period requested with respect thereto would end after the Revolving
Credit Maturity Date.

    SECTION 2.03.  Procedure for Revolving Credit Borrowings.  (a) The Borrowing
Agent on behalf of any Borrower may notify the Administrative Agent prior to
1:00 p.m., New York time, on a Business Day of a Borrower's request to make, on
that day, a Revolving Credit Borrowing hereunder. Should any amount required to
be paid as interest hereunder, or as fees or other charges under this Agreement
or any other agreement with the Administrative Agent, the Collateral Agent or
Lenders, or any L/C Disbursement, or with respect to any other Obligation,
become due, same shall be deemed a request for a Revolving Credit Borrowing as
of the date such payment is due, in the amount required to pay in full such
interest, fee, charge or Obligation under this Agreement or any other agreement
with the Administrative Agent, the Collateral Agent or Lenders, and such request
shall be irrevocable. The Administrative Agent is hereby irrevocably authorized,
in its sole discretion, to make Revolving Loans from time to time, or to charge
Borrowers' Account, to pay any interest, fees or other amounts (including any
L/C Disbursement) for which payment is due under this Agreement, or at any time
after the occurrence of an Event of Default to cash collateralize the L/C
Exposure.

    (b) Notwithstanding the provisions of Section 2.03(a) above, in the event a
Borrower desires to make a Eurodollar Borrowing, the Borrowing Agent shall give
the Administrative Agent at least three (3) Business Days' prior written notice,
specifying (i) the date of the proposed Borrowing (which shall be a Business
Day), (ii) the amount on the date of such Revolving Credit Borrowing, which
amount shall be an integral multiple of $1,000,000, and (iii) the duration of
the first Interest Period therefor. No Eurodollar Borrowing shall be made
available to the Borrowers during the continuance of a Default or an Event of
Default.

    (c) The Borrowing Agent shall elect the initial Interest Period applicable
to a Eurodollar Borrowing by its notice of borrowing given to the Administrative
Agent pursuant to Section 2.03 (a) or by its notice of conversion given to the
Administrative Agent pursuant to Section 2.03(d), as the case may be. The
Borrowing Agent shall elect the duration of each succeeding Interest Period by
giving irrevocable written notice to the Administrative Agent of such duration
not less than three (3) Business Days prior to the last day of the then current
Interest Period applicable to such Eurodollar Borrowing. If the Administrative
Agent does not receive timely notice of the Interest Period elected by the
Borrowing Agent, the applicable Borrower shall be deemed to have elected to
convert to an ABR Loan, subject to Section 2.03(d) hereinbelow.

    (d) Provided that no Default or Event of Default shall have occurred and be
continuing, the Borrowing Agent may, on the last Business Day of the then
current Interest Period applicable to any outstanding Eurodollar Loan, or on any
Business Day with respect to ABR Loans, convert any such Loan into a Loan of
another type in the same aggregate principal amount; provided that any
conversion of a Eurodollar Loan shall be made only on the last Business Day of
the then current Interest Period applicable to such Eurodollar Loan. If a
Borrower desires to convert a Loan, the Borrowing Agent shall give the
Administrative Agent not less than three (3) Business Days' prior written notice
to convert from an ABR Loan to a Eurodollar Loan or one (1) Business Day's prior
written notice to convert from a Eurodollar Loan to an ABR Loan, specifying the
date of such conversion, the Loans to be converted and if the conversion is from
an ABR Loan to a Eurodollar

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Loan, the duration of the first Interest Period therefor. After giving effect to
each such conversion, there shall not be outstanding more than five
(5) Eurodollar Borrowings, in the aggregate.

    SECTION 2.04.  Disbursement of Loans.  All Loans shall be disbursed from
whichever office or other place the Administrative Agent may designate from time
to time and, together with any and all other Obligations of the Borrowers to the
Administrative Agent, the Collateral Agent or Lenders, shall be charged to the
Borrowers' Account on the Administrative Agent's books. The Borrowers may use
the Revolving Loans by borrowing, prepaying and reborrowing, all in accordance
with the terms and conditions hereof. The proceeds of each Revolving Credit
Borrowing requested by a Borrower or deemed to have been requested by or on
behalf of a Borrower under Section 2.03(a) hereof shall, with respect to
requested Revolving Credit Borrowings to the extent Lenders make such Revolving
Credit Borrowings, be made available to such Borrower on the day so requested by
way of credit to such Borrower's operating account at PNC, in immediately
available federal funds or other immediately available funds or, with respect to
Revolving Credit Borrowings deemed to have been requested by the Borrowers, be
disbursed to the Administrative Agent to be applied to the outstanding
Obligations giving rise to such deemed request.

    SECTION 2.05.  Manner of Borrowing and Payment.  (a)  Each Revolving Credit
Borrowing shall be advanced according to the applicable Pro Rata Percentages of
the Revolving Credit Lenders.

    (b) Each payment (including each prepayment) by a Borrower on account of the
principal of and interest on the Revolving Loans shall be applied to the
Revolving Loans of such Borrower according to the applicable Pro Rata
Percentages of the Revolving Credit Lenders. Except as expressly provided
herein, all payments (including prepayments) to be made by the Borrowers on
account of principal, interest and fees shall be made without set off or
counterclaim and shall be made to the Administrative Agent on behalf of the
Lenders to the Payment Office, in each case on or prior to 1:00 P.M., New York
time, in Dollars and in immediately available funds.

    (c) (i) Notwithstanding anything to the contrary contained in Sections 2.03
or 2.05 (a) and (b) hereof, commencing with the first Business Day following the
Restatement Effective Date, each Revolving Loan shall be advanced by the
Administrative Agent and each payment by the Borrowers on account of Revolving
Loans shall be applied first to those Revolving Loans advanced by the
Administrative Agent. On or before 1:00 P.M., New York time, on each Settlement
Date commencing with the first Settlement Date following the Restatement
Effective Date, the Administrative Agent and Lenders shall make certain payments
as follows: (I) if the aggregate amount of new Revolving Loans made by the
Administrative Agent during the preceding Week (if any) exceeds the aggregate
amount of repayments applied to outstanding Revolving Loans during such
preceding Week, then each Lender shall provide the Administrative Agent with
immediately available funds in an amount equal to its applicable Pro Rata
Percentage of the difference between (w) such Revolving Loans and (x) such
repayments and (II) if the aggregate amount of repayments applied to outstanding
Revolving Loans during such Week exceeds the aggregate amount of new Revolving
Credit Loans made during such Week, then the Administrative Agent shall provide
each Lender with immediately available funds in an amount equal to its
applicable Pro Rata Percentage of the difference between (y) such repayments and
(z) such Revolving Loans.

    (ii) Each Lender shall be entitled to earn interest at the rate applicable
to the rate on the outstanding Revolving Loans which it has funded.

    (iii) Promptly following each Settlement Date, the Administrative Agent
shall submit to each Lender a certificate with respect to payments received and
Revolving Loans made during the Week immediately preceding such Settlement Date.
Such certificate of the Administrative Agent shall be conclusive in the absence
of manifest error.

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    (d) Unless the Administrative Agent shall have been notified by telephone,
confirmed in writing, by any Lender that such Lender will not make the amount
which would constitute its applicable Pro Rata Percentage of the Revolving Loans
available to the Administrative Agent, the Administrative Agent may (but shall
not be obligated to) assume that such Lender shall make such amount available to
the Administrative Agent on the next Settlement Date and, in reliance upon such
assumption, make available to the Borrowers a corresponding amount. The
Administrative Agent will promptly notify the Borrowing Agent of its receipt of
any such notice from a Lender. If such amount is made available to the
Administrative Agent on a date after such next Settlement Date, such Lender
shall pay to the Administrative Agent on demand an amount equal to the product
of (i) the daily average Federal Funds Rate (computed on the basis of a year of
360 days) during such period as quoted by the Administrative Agent, times
(ii) such amount, times (iii) the number of days from and including such
Settlement Date to the date on which such amount becomes immediately available
to the Administrative Agent. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this paragraph shall be
conclusive, in the absence of manifest error. If such amount is not in fact made
available to the Administrative Agent by such Lender within three (3) Business
Days after such Settlement Date, the Administrative Agent shall be entitled to
recover such an amount, with interest thereon at the rate per annum then
applicable to such Revolving Loans hereunder, on demand from the applicable
Borrower; provided, however, that the Administrative Agent's right to such
recovery shall not prejudice or otherwise adversely affect the Borrower's rights
(if any) against such Lender.

    SECTION 2.06.  Evidence of Debt.  (a)  Each Borrower hereby unconditionally
and jointly and severally promises to pay to the Administrative Agent on the
Revolving Credit Maturity Date (or earlier termination of the Revolving Credit
Commitments) for the account of each Revolving Credit Lender, the then unpaid
principal amount of each Revolving Loan made by such Lender to Borrowers.

    (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.

    (c) The Administrative Agent shall maintain accounts in which it will record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrowers to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
from the Borrowers or any Subsidiary Guarantor and each Lender's share thereof.

    (d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) above shall be prima facie evidence of the existence and amounts of
the obligations therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrowers to repay
the Loans in accordance with their terms.

    (e) Any Lender may request that Loans made by it hereunder be evidenced by a
promissory note. In such event, the Borrowers shall execute and deliver to such
Lender a promissory note payable to such Lender and its registered assigns and
in a form and substance reasonably acceptable to the Administrative Agent and
the Borrowers. Notwithstanding any other provision of this Agreement, in the
event any Lender shall request and receive such a promissory note, the interests
represented by such note shall at all times (including after any assignment of
all or part of such interests pursuant to Section 9.04) be represented by one or
more promissory notes payable to the payee named therein or its registered
assigns.

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    SECTION 2.07.  Statement of Account.  (a)  The Administrative Agent shall
maintain, in accordance with its customary procedures, a loan account
("Borrowers' Account") in the name of the Borrowers in which shall be recorded
the date and amount of each Borrowing, each L/C Disbursement and the date and
amount of each payment in respect thereof; provided, however, the failure by the
Administrative Agent to record the date and amount of any Borrowing or L/C
Disbursement shall not adversely affect the Administrative Agent or any Lender.
Each month, the Administrative Agent shall send to the Borrowing Agent a
statement showing the accounting for the Borrowings made, payments made or
credited in respect thereof, and other transactions between the Administrative
Agent and the Borrowers during such month. The monthly statements shall be
deemed correct and binding upon the Borrowers in the absence of manifest error
and shall constitute an account stated between Lenders and Borrowers unless the
Administrative Agent receives a written statement of the Borrowers' specific
exceptions thereto within thirty (30) days after such statement is received by
the Borrowers. The records of the Administrative Agent with respect to
Borrowers' Account shall be conclusive evidence absent manifest error of the
amounts of Loans and other charges thereto and of payments applicable thereto.

    (b) Any sums expended by the Administrative Agent or any Lender due to a
Borrower's failure to perform or comply with its obligations under this
Agreement or any Loan Document may be charged to Borrowers' Account as a
Revolving Loan and added to the Obligations.

    SECTION 2.08.  Fees.  (a)  The Borrowers jointly and severally agree to pay
to each Lender, through the Administrative Agent, on the last day of March,
June, September and December in each year and on each date on which any
Commitment of such Lender shall expire or be terminated as provided herein, a
commitment fee (a "Commitment Fee") equal to 1/4 of 1% per annum on the daily
unused amount of the Commitments of such Lender during the preceding quarter (or
other period commencing with the date hereof or ending with the Revolving Credit
Maturity Date or the date on which the Commitments of such Lender shall expire
or be terminated). All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. The Commitment Fee due to
each Lender shall commence to accrue on the date hereof and shall cease to
accrue on the date on which the Commitment of such Lender shall expire or be
terminated as provided herein.

    (b) The Borrowers jointly and severally agree to pay to the Administrative
Agent and Collateral Agent, for its own account, the fees set forth in the Fee
Letter at the times and in the amounts specified therein (the "Agent Fees").

    (c) The Borrowers jointly and severally agree to pay (i) to each Revolving
Credit Lender, through the Administrative Agent, on the last Business Day of
March, June, September and December of each year and on the date on which the
Revolving Credit Commitment of such Lender shall be terminated as provided
herein, a fee (an "L/C Participation Fee") calculated on such Lender's Pro Rata
Percentage of the average daily aggregate L/C Exposure (excluding the portion
thereof attributable to unreimbursed L/C Disbursements) during the preceding
quarter (or shorter period commencing with the date hereof or ending with the
Revolving Credit Maturity Date or the date on which all Letters of Credit have
been canceled or have expired and the Revolving Credit Commitments of all
Lenders shall have been terminated) at a rate equal to (x) in the case of the
Standby L/C Exposure, 2.75% per annum, and (y) in the case of the Trade L/C
Exposure, 1.375% per annum, and (ii) to the Issuing Bank with respect to each
Letter of Credit a fronting, issuance and drawing fee equal to .25% per annum on
the face amount of all outstanding Letters of Credit, payable quarterly in
arrears and on the Revolving Credit Maturity Date or the date on which all
Letters of Credit have been canceled or have expired and the Revolving Credit
Commitments of all Lenders shall have been terminated (the "Issuing Bank Fees").
All L/C Participation Fees and Issuing Bank Fees shall be computed on the basis
of the actual number of days elapsed in a year of 360 days.

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    (d) On the Restatement Effective Date, the Borrowers jointly and severally
agree to pay the Administrative Agent for the ratable benefit of the Lenders an
accommodation fee of $150,000.

    (e) All Fees shall be paid on the dates due, in immediately available funds,
to the Administrative Agent for distribution, if and as appropriate, among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the Issuing
Bank. Once paid, none of the Fees shall be refundable under any circumstances.

    SECTION 2.09.  Interest on Loans.  (a)  Subject to the provisions of
Section 2.10, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when the Alternate Base Rate is determined by
reference to the Base Rate and over a year of 360 days at all other times and
calculated from and including the date of such Borrowing to but excluding the
date of repayment thereof) at a rate per annum equal to the Alternate Base Rate
plus 1.25%.

    (b) Subject to the provisions of Section 2.10, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
2.25%.

    (c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.

    (d) In no event whatsoever shall interest and other charges charged
hereunder exceed the highest rate permissible under law. In the event interest
and other charges as computed hereunder would otherwise exceed the highest rate
permitted under law, such excess amount shall be first applied to any unpaid
principal balance owed by the Borrowers, and if the then remaining excess amount
is greater than the previously unpaid principal balance, Lenders shall promptly
refund such excess amount to the Borrowers and the provisions hereof shall be
deemed amended to provided for such permissible rate.

    SECTION 2.10.  Default Interest.  Upon and after the occurrence of an Event
of Default and during the continuation thereof, (i) the Obligations other than
Eurodollar Loans shall bear interest at the rate otherwise applicable to ABR
Loans plus two percent (2%) per annum and (ii) Eurodollar Loans shall bear
interest at the rate otherwise applicable to Eurodollar Loans plus two percent
(2%) per annum (as applicable, the "Default Rate").

    SECTION 2.11.  Termination and Reduction of Commitments.  (a)  The Revolving
Credit Commitments, and the L/C Commitment shall automatically terminate on the
Revolving Credit Maturity Date.

    (b) Upon at least three Business Days' prior irrevocable written or telecopy
notice to the Administrative Agent, the Borrowers may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Revolving Credit Commitments; provided, however, that (i) each partial reduction
of the Revolving Credit Commitments shall be in an integral multiple of
$1,000,000 and (ii) the Total Revolving Credit Commitment shall not be reduced
to an amount that is less than the sum of the Aggregate Revolving Credit
Exposure at the time.

    (c) Each reduction in the Revolving Credit Commitments hereunder shall be
made ratably among the Lenders in accordance with their respective applicable
Commitments. The Borrowers shall pay to the Administrative Agent for the account
of the applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to but excluding the date of such termination or reduction.

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    SECTION 2.12.  Repayment of Borrowings.  (a)  The Revolving Loans shall be
due and payable in full on the Revolving Credit Maturity Date subject to earlier
prepayment as herein provided.

    (b) With respect to any deposits in any lockbox or Blocked Account, the
Borrowers recognize that the amounts evidenced by checks, notes, drafts or any
other items of payment relating to and/or proceeds of Collateral may not be
collectible by the Administrative Agent on the date received. In consideration
of the Administrative Agent's agreement to conditionally credit Borrowers'
Account as of the Business Day on which the Administrative Agent receives those
items of payment, the Borrowers agree that, in computing the charges under this
Agreement, all items of payment shall be deemed applied by the Administrative
Agent on account of the Obligations on the Business Day the Administrative Agent
receives such payments via wire transfer or electronic depository check. The
Administrative Agent is not, however, required to credit Borrowers' Account for
the amount of any item of payment which is unsatisfactory to the Administrative
Agent and the Administrative Agent may charge Borrowers' Account for the amount
of any item of payment which is returned to the Administrative Agent unpaid.

    (c) All payments of principal, interest and other amounts payable hereunder,
or under any of the other Loan Documents, shall be made to the Administrative
Agent at the Payment Office not later than 1:00 P.M. (New York Time) on the due
date therefor in lawful money of the United States of America in federal funds
or other funds immediately available to the Administrative Agent. The
Administrative Agent shall have the right to effectuate payment on any and all
Obligations due and owing hereunder by charging Borrowers' Account or by making
Revolving Loans as provided in Section 2.02(a) hereof.

    (d) Borrowers shall pay principal, interest, and all other amounts payable
hereunder, or under any related agreement, without any deduction whatsoever,
including, but not limited to, any deduction for any setoff or counterclaim.

    SECTION 2.13.  Prepayment.  (a)  The Borrowers shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon at
least three Business Days' prior written or telecopy notice (or telephone notice
promptly confirmed by written or telecopy notice) in the case of Eurodollar
Loans, or written or telecopy notice (or telephone notice promptly confirmed by
written or telecopy notice) on or prior to the date of prepayment in the case of
ABR Loans, to the Administrative Agent before 1:00 p.m., New York City time;
provided, however, that each partial prepayment shall be in an amount that is an
integral multiple of $1,000,000.

    (b) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrowers to prepay such Borrowing by the
amount stated therein on the date stated therein. All prepayments under this
Section 2.13 shall be subject to Section 2.19 but otherwise without premium or
penalty. All prepayments under this Section 2.13 shall be accompanied by accrued
interest on the principal amount being prepaid to the date of payment.

    SECTION 2.14.  Mandatory Prepayments.  (a)  In the event of any termination
of all the Revolving Credit Commitments in accordance with this Agreement, the
Borrowers shall, on the effective date of such termination, repay or prepay all
outstanding Revolving Credit Borrowings and replace all outstanding Letters of
Credit and/or deposit an amount equal to 105% of the L/C Exposure in cash in a
cash collateral account established with the Collateral Agent for the benefit of
the Secured Parties and/or provide an irrevocable letter of credit in form and
substance reasonably acceptable to the Administrative Agent from a bank
reasonably acceptable to the Administrative Agent. In the event of any partial
reduction of the Revolving Credit Commitments, then (i) at or prior to the
effective date of such reduction, the Administrative Agent shall notify the
Borrowers and the Revolving Credit Lenders of the Aggregate Revolving Credit
Exposure after giving effect thereto and (ii) if the Aggregate Revolving Credit
Exposure would exceed the Total Revolving Credit Commitment after

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giving effect to such reduction or termination, then the Borrowers shall, on the
effective date of such reduction or termination, repay or prepay Revolving
Credit Borrowings and/or replace or cash collateralize outstanding Letters of
Credit in an amount sufficient to eliminate such excess.

    (b) If on any date the Aggregate Revolving Credit Exposure shall exceed the
Formula Amount, or the Revolving Loans to a Borrower plus the L/C Exposure of
such Borrower shall exceed the Individual Formula Amount, the Borrowers shall on
such date repay or prepay Revolving Credit Borrowings and/or replace or cash
collateralize outstanding L/C Exposure in an amount sufficient to eliminate such
excess. Any such excess amount shall constitute part of the Obligations and be
secured by the Collateral.

    (c) Without duplication of any prepayment or repayment required under
Section 2.14(b), not later than the third Business Day following the completion
of any Asset Sale, Activision shall repay or prepay the Revolving Credit
Borrowings and/or cash collateralize outstanding L/C exposure in an amount equal
to the lesser of (i) any prepayment required under Section 2.14(b) as a result
of such Asset Sale and (ii) 50% of the Net Cash Proceeds of such Asset Sale, and
the Revolving Credit Commitments shall be permanently reduced by any amount
repaid or prepaid under this Section 2.14(c).

    (d) The Borrowing Agent shall deliver to the Administrative Agent, at the
time of each prepayment required under this Section 2.14, (i) a certificate
signed by a Financial Officer of the Borrowing Agent setting forth in reasonable
detail the calculation of the amount of such prepayment and (ii) to the extent
practicable, at least three days prior written notice of such prepayment. Each
notice of prepayment shall specify the prepayment date, the Type of each Loan
being prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All prepayments of Borrowings under this Section 2.14 shall be subject
to Section 2.19, but shall otherwise be without premium or penalty.

    SECTION 2.15.  Illegality.  Notwithstanding any other provision hereof, if
any applicable law, treaty, regulation or directive, or any change therein or in
the interpretation or application thereof, shall make it unlawful for any Lender
(for purposes of this subsection (g), the term "Lender" shall include any Lender
and the office or branch where any Lender or any corporation or bank controlling
such Lender makes or maintains any Eurodollar Loans) to make or maintain its
Eurodollar Loans, the obligation of Lenders to make Eurodollar Loans hereunder
shall forthwith be canceled and the Borrower shall, if any affected Eurodollar
Loans are then outstanding, promptly upon request from the Administrative Agent,
either pay all such affected Eurodollar Loans or convert such affected
Eurodollar Loans into ABR Loans. If any such payment or conversion of any
Eurodollar Loan is made on a day that is not the last day of the Interest Period
applicable to such Eurodollar Loan, the Borrowers shall pay the Administrative
Agent upon the Administrative Agent's request, such amount or amounts as may be
necessary to compensate Lenders for any loss or expense sustained or incurred by
Lenders in respect of such Eurodollar Loan as a result of such payment or
conversion, including (but not limited to) any interest or other amounts payable
by Lenders to lenders of funds obtained by Lenders in order to make or maintain
such Eurodollar Loan. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by any Lender to the Borrowing
Agent shall be conclusive absent manifest error.

    SECTION 2.16.  Increased Costs.  In the event that any applicable law,
treaty or governmental regulation, or any change therein or in the
interpretation or application thereof, or compliance by any Lender (for purposes
of this Section 3.7, the term "Lender" shall include the Administrative Agent or
any Lender and any corporation or bank controlling the Administrative Agent or
any Lender) and the office or branch where the Administrative Agent or any
Lender (as so defined) makes or maintains any

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Eurodollar Loans with any request or directive (whether or not having the force
of law) from any central bank or other financial, monetary or other authority,
shall:

    (a) subject the Administrative Agent or any Lender to any tax of any kind
whatsoever not currently applicable with respect to this Agreement or any Loan
Document or change the basis of taxation of payments to the Administrative Agent
or any Lender of principal, fees, interest or any other amount payable hereunder
or under any Loan Documents (except for any imposition or changes in the rate of
tax on the overall net income of the Administrative Agent or any Lender by the
jurisdiction in which it maintains its principal office);

    (b) impose, modify or hold applicable any reserve, special deposit,
assessment or similar requirement against assets held by, or deposits in or for
the account of, Loans or loans by, or other credit extended by, any office of
the Administrative Agent or any Lender, including (without limitation) pursuant
to Regulation D of the Board of Governors of the Federal Reserve System; or

    (c) impose, modify or hold applicable on the Administrative Agent or any
Lender or the London interbank Eurodollar market any other condition with
respect to this Agreement or any Loan Document;

and the result of any of the foregoing is to increase the cost to the
Administrative Agent or any Lender of making, renewing or maintaining its Loans
hereunder by an amount that the Administrative Agent or such Lender reasonably
deems to be material or to reduce the amount of any payment (whether of
principal, interest or otherwise) in respect of any of the Loans by an amount
that the Administrative Agent or such Lender reasonably deems to be material,
then, in any case the Borrowers shall promptly pay the Administrative Agent or
such Lender, upon its demand, such additional amount as will compensate the
Administrative Agent or such Lender for such additional cost or such reduction,
as the case may be, provided that the foregoing shall not apply to increased
costs which are reflected in the Adjusted LIBO Rate. The Administrative Agent or
such Lender shall certify the amount of such additional cost or reduced amount
to the Borrowers, and such certification shall be conclusive absent manifest
error.

    SECTION 2.17.  Basis For Determining Interest Rate Inadequate or Unfair.  In
the event that the Administrative Agent or any Lender shall have determined
that:

    (a) reasonable means do not exist for ascertaining the LIBO Rate for any
Interest Period; or

    (b) Dollar deposits in the relevant amount and for the relevant maturity are
not available in the London interbank Eurodollar market, with respect to an
outstanding Eurodollar Loan, a proposed Eurodollar Borrowing, or a proposed
conversion of an ABR Loan into a Eurodollar Loan;

then the Administrative Agent shall give the Borrowing Agent prompt written,
telephonic or telegraphic notice of such determination. If such notice is given,
(i) any such requested Eurodollar Loan shall be made as an ABR Borrowing, unless
the Borrowing Agent shall notify the Administrative Agent no later than
10:00 a.m. (New York City time) two (2) Business Days prior to the date of such
proposed Borrowing, that its request for such Borrowing shall be canceled,
(ii) any ABR Loan or Eurodollar Loan which was to have been converted to an
affected type of Eurodollar Loan shall be continued as or converted into an ABR
Loan, or, if the Borrowing Agent shall notify the Administrative Agent, no later
than 10:00 a.m. (New York City time) two (2) Business Days prior to the proposed
conversion, shall be maintained as an unaffected type of Eurodollar Loan and
(iii) any outstanding affected Eurodollar Loans shall be converted into an ABR
Loan, or, if Borrower shall notify the Administrative Agent, no later than
10:00 a.m. (New York City time) two (2) Business Days prior to the last Business
Day of the then current Interest Period applicable to such affected Eurodollar
Loan, shall be converted into an unaffected type of Eurodollar Loan on the last
Business Day of the then current Interest Period for such affected Eurodollar
Loans. Until such notice has been withdrawn,

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Lenders shall have no obligation to make an affected type of Eurodollar Loan or
maintain outstanding affected Eurodollar Loans and the Borrowers shall not have
the right to convert an ABR Loan or an unaffected type of Eurodollar Loan into
an affected type of Eurodollar Loan.

    SECTION 2.18.  Capital Adequacy.  In the event that the Administrative Agent
or any Lender shall have determined that any applicable law, rule, regulation or
guideline regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Administrative Agent or any Lender
(for purposes of this Section 2.18, the term "Lender" shall include the
Administrative Agent or any Lender and any corporation or bank controlling the
Administrative Agent or any Lender) and the office or branch where the
Administrative Agent or any Lender (as so defined) makes or maintains any
Eurodollar Loans with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the Administrative Agent or any Lender's capital as a consequence of its
obligations hereunder to a level below that which the Administrative Agent or
such Lender could have achieved but for such adoption, change or compliance
(taking into consideration the Administrative Agent's and each Lender's policies
with respect to capital adequacy) by an amount deemed by the Administrative
Agent or any Lender to be material, then, from time to time, the Borrowers shall
pay upon demand to the Administrative Agent or such Lender such additional
amount or amounts as will compensate the Administrative Agent or such Lender for
such reduction. In determining such amount or amounts, the Administrative Agent
or such Lender may use any reasonable averaging or attribution methods. The
protection of this Section shall be available to the Administrative Agent and
each Lender regardless of any possible contention of invalidity or
inapplicability with respect to the applicable law, regulation or condition. A
certificate of the Administrative Agent or a Lender setting forth such amount or
amounts as shall be necessary to compensate the Administrative Agent or such
Lender with respect to this Section 2.18 when delivered to the Borrowing Agent
shall be conclusive absent manifest error.

    SECTION 2.19.  Indemnity.  The Borrowers shall jointly and severally
indemnify the Administrative Agent, the Collateral Agent and each Lender against
any loss or expense that the Administrative Agent, the Collateral Agent and such
Lender may sustain or incur as a consequence of (a) any event, other than a
default by such Lender in the performance of its obligations hereunder, which
results in (i) such Lender receiving or being deemed to receive any amount on
account of the principal of any Eurodollar Loan prior to the end of the Interest
Period in effect therefor, (ii) the conversion of any Eurodollar Loan to an ABR
Loan, or the conversion of the Interest Period with respect to any Eurodollar
Loan, in each case other than on the last day of the Interest Period in effect
therefor, or (iii) any Eurodollar Loan to be made by such Lender (including any
Eurodollar Loan to be made pursuant to a conversion or continuation under
Section 2.10) not being made after notice of such Loan shall have been given by
the Borrowing Agent hereunder (any of the events referred to in this
clause (a) being called a "Breakage Event") or (b) any default in the making of
any payment or prepayment required to be made hereunder. In the case of any
Breakage Event, such loss shall include an amount equal to the excess, as
reasonably determined by such Lender, of (i) its cost of obtaining funds for the
Eurodollar Loan that is the subject of such Breakage Event for the period from
the date of such Breakage Event to the last day of the Interest Period in effect
(or that would have been in effect) for such Loan over (ii) the amount of
interest likely to be realized by such Lender in redeploying the funds released
or not utilized by reason of such Breakage Event for such period. A certificate
of any Lender setting forth any amount or amounts which such Lender is entitled
to receive pursuant to this Section 2.19 shall be delivered to the Borrowers and
shall be conclusive absent manifest error.

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    SECTION 2.20.  Pro Rata Treatment.  Each payment or prepayment of principal
of any Borrowing, each payment of interest on the Loans, each payment of the
Commitment Fees and L/C Participation Fees, each reduction of the Revolving
Credit Commitments and each conversion of any Borrowing to or continuation of
any Borrowing as a Borrowing of any Type shall be allocated pro rata among the
Lenders in accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). Each Lender agrees
that in computing such Lender's portion of any Borrowing to be made hereunder,
the Administrative Agent may, in its discretion, round each Lender's percentage
of such Borrowing to the next higher or lower whole dollar amount.

    SECTION 2.21.  Sharing of Setoffs.  Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
any Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or L/C Disbursement as a result of which the unpaid principal
portion of its Revolving Loans and participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the Revolving Loans
and participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Revolving Loans and L/C Exposure, as the case may be of such other Lender, so
that the aggregate unpaid principal amount of the Revolving Loans and L/C
Exposure and participations in Revolving Loans and L/C Exposure held by each
Lender shall be in the same proportion to the aggregate unpaid principal amount
of all Revolving Loans and L/C Exposure then outstanding as the principal amount
of its Revolving Loans and L/C Exposure prior to such exercise of banker's lien,
setoff or counterclaim or other event was to the principal amount of all
Revolving Loans and L/C Exposure outstanding prior to such exercise of banker's
lien, setoff or counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.21
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. The
Borrowers expressly consent to the foregoing arrangements and agree that any
Lender holding a participation in a Revolving Loan or L/C Disbursement deemed to
have been so purchased may exercise any and all rights of banker's lien, setoff
or counterclaim with respect to any and all moneys owing by the Borrowers to
such Lender by reason thereof as fully as if such Lender had made a Loan
directly to the Borrowers in the amount of such participation.

    SECTION 2.22.  Payments.  Except as otherwise expressly provided herein,
whenever any payment (including principal of or interest on any Borrowing or any
Fees or other amounts) hereunder or under any other Loan Document shall become
due, or otherwise would occur, on a day that is not a Business Day, such payment
may be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of interest or Fees, if
applicable.

    SECTION 2.23.  Taxes.  (a)  Any and all payments by or on account of any
obligation of the Borrowers or any Loan Party hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if a Borrower or any Loan Party
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent or such Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower or such Loan Party shall

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make such deductions and (iii) the Borrower or such Loan Party shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

    (b) In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

    (c) The Borrowers shall jointly and severally indemnify the Administrative
Agent and each Lender, within 10 days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes paid by the Administrative
Agent or such Lender, as the case may be, on or with respect to any payment by
or on account of any obligation of the Borrowers or any Loan Party hereunder or
under any other Loan Document (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrowing Agent by a Lender, or by the Administrative Agent on its behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

    (d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrowers or any other Loan Party to a Governmental Authority, the
Borrowers shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

    (e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which a Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrowing Agent (with a copy
to the Administrative Agent), at the time or times prescribed by applicable law,
such properly completed and executed documentation prescribed by applicable law
or reasonably requested by the Borrowers as will permit such payments to be made
without withholding or at a reduced rate, provided that such Foreign Lender has
received written notice from the Borrowing Agent advising it of the availability
of such exemption or reduction and supplying all applicable documentation.

    SECTION 2.24.  Assignment of Commitments Under Certain Circumstances; Duty
to Mitigate.  (a)  In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.16, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15 or (iii) the
Borrowers are required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing Bank
pursuant to Section 2.23, the Borrowers may, at their sole expense and effort
(including with respect to the processing and recordation fee referred to in
Section 9.04(b)), upon notice to such Lender or the Issuing Bank and the
Administrative Agent, require such Lender or the Issuing Bank to transfer and
assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all of its interests, rights and obligations under
this Agreement to an assignee that shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (x) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction, (y) the
Borrowers shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Credit Commitment is being assigned, of the Issuing
Bank), which consent shall not unreasonably be withheld, and (z) the Borrowers
or such assignee shall have paid to the affected Lender or the Issuing Bank in
immediately available funds an amount equal to the sum of the principal of and
interest accrued to the date of such payment on the outstanding Loans or L/C
Disbursements of such Lender or the Issuing Bank, respectively, plus all Fees
and other amounts accrued for the account of such Lender or the Issuing Bank
hereunder (including

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any amounts under Section 2.15 and Section 2.16); provided further that, if
prior to any such transfer and assignment the circumstances or event that
resulted in such Lender's or the Issuing Bank's claim for compensation under
Section 2.16 or notice under Section 2.15 or the amounts paid pursuant to
Section 2.23, as the case may be, cease to cause such Lender or the Issuing Bank
to suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified in
Section 2.15, or cease to result in amounts being payable under Section 2.23, as
the case may be (including as a result of any action taken by such Lender or the
Issuing Bank pursuant to paragraph (b) below), or if such Lender or the Issuing
Bank shall waive its right to claim further compensation under Section 2.14 in
respect of such circumstances or event or shall withdraw its notice under
Section 2.15 or shall waive its right to further payments under Section 2.20 in
respect of such circumstances or event, as the case may be, then such Lender or
the Issuing Bank shall not thereafter be required to make any such transfer and
assignment hereunder.

    (b) If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.16, (ii) any Lender or the Issuing Bank delivers a notice described in
Section 2.15 or (iii) the Borrowers are required to pay any additional amount to
any Lender or the Issuing Bank or any Governmental Authority on account of any
Lender or the Issuing Bank, pursuant to Section 2.23, then such Lender or the
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Borrowers or (y) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.16 or enable it to withdraw its notice pursuant to
Section 2.15 or would reduce amounts payable pursuant to Section 2.23, as the
case may be, in the future. The Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender or the Issuing Bank in connection with
any such filing or assignment, delegation and transfer.

    SECTION 2.25.  Defaulting Lender.  (a)  Notwithstanding anything to the
contrary contained herein, in the event any Lender (x) has refused (which
refusal constitutes a breach by such Lender of its obligations under this
Agreement) to make available its portion of any Revolving Credit Borrowing or
reimbursement for drawings under Letters of Credit or (y) notifies either the
Administrative Agent or the Borrowers that it does not intend to make available
its portion of any Revolving Credit Borrowing or reimbursement (if the actual
refusal would constitute a breach by such Lender of its obligations under this
Agreement) (each, a "Lender Default" ), all rights and obligations hereunder of
such Lender (a "Defaulting Lender") as to which a Lender Default is in effect
and of the other parties hereto shall be modified to the extent of the express
provisions of this Section 2.25 while such Lender Default remains in effect.

    (b) Revolving Credit Borrowings shall be incurred pro rata from Lenders (the
"Non-Defaulting Lenders") which are not Defaulting Lenders based on their
respective Pro Rata Percentages, and no Pro Rata Percentage of any Lender or any
Pro Rata Percentage of any Revolving Credit Borrowings required to be advanced
by any Lender shall be increased as a result of such Lender Default. Amounts
received in respect of principal of any type of Revolving Loans shall be applied
to reduce the applicable Revolving Loans of each Lender pro rata based on the
aggregate of the outstanding Revolving Loans of that type of all Lenders at the
time of such application; provided that such amount shall not be applied to any
Revolving Loans of a Defaulting Lender at any time when, and to the extent that,
the aggregate amount of Revolving Loans of any Non-Defaulting Lender exceeds
such Non-Defaulting Lender's Pro Rata Percentage of all Revolving Loans then
outstanding.

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    (c) A Defaulting Lender shall not be entitled to give instructions to the
Administrative Agent or the Collateral Agent or to approve, disapprove, consent
to or vote on any matters relating to this Agreement and the Loan Documents. All
amendments, waivers and other modifications of this Agreement and the Loan
Documents may be made without regard to a Defaulting Lender and, for purposes of
the definition of "Required Lenders", a Defaulting Lender shall be deemed not to
be a Lender and not to have Loans outstanding.

    (d) Other than as expressly set forth in this Section 2.25, the rights and
obligations of a Defaulting Lender (including the obligation to indemnify the
Administrative Agent or the Collateral Agent) and the other parties hereto shall
remain unchanged. Nothing in this Section 2.25 shall be deemed to release any
Defaulting Lender from its obligations under this Agreement and the Loan
Documents, shall alter such obligations, shall operate as a waiver of any
default by such Defaulting Lender hereunder, or shall prejudice any rights which
Borrowers, the Administrative Agent, the Collateral Agent or any Lender may have
against any Defaulting Lender as a result of any default by such Defaulting
Lender hereunder.

    (e) In the event a Defaulting Lender retroactively cures to the satisfaction
of the Administrative Agent the breach which caused a Lender to become a
Defaulting Lender, such Defaulting Lender shall no longer be a Defaulting Lender
and shall be treated as a Lender under this Agreement.

    SECTION 2.26.  Letters of Credit.  (a)  The Borrowing Agent on behalf of a
Borrower may request the issuance of a Letter of Credit for its own account or
the account of a Borrower, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time while the
Revolving Credit Commitments remain in effect. This Section shall not be
construed to impose an obligation upon the Issuing Bank to issue any Letter of
Credit that is inconsistent with the terms and conditions of this Agreement.

    (b) In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the Borrowing Agent shall hand
deliver or telecopy to the Issuing Bank and the Administrative Agent (reasonably
in advance of the requested date of issuance, amendment, renewal or extension)
the Administrative Agent's form of letter of credit application or the Issuing
Bank's form of Letter of Credit Application, completed to the satisfaction of
the Administrative Agent or the Issuing Bank, respectively, or a notice
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if, and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrowers
shall be deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed
the lesser of $80,000,000 and the Total Revolvling Credit Commitment, (ii) the
Aggregate Revolving Credit Exposure shall not exceed the lesser of (x) the Total
Revolving Credit Commitment, and (y) the Formula Amount in effect at such time
and (iii) the outstanding principal amount of Revolving Loans of any Borrower
plus such Borrower's L/C Exposure shall not exceed the Borrower's Individual
Formula Amount.

    If the Issuing Bank is not the Administrative Agent, the Administrative
Agent will notify the Issuing Bank via phone, confirmed by telecopy, of changes
in availability to issue Letters of Credit under the facility, and the Issuing
Bank will notify the Administrative Agent via phone, confirmed by telecopy, of
any changes in outstanding balances of Letters of Credit it has issued. No new
Letter of Credit shall be issued, and no existing Letter of Credit shall be
amended, renewed or

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extended, by the Issuing Bank until the Administrative Agent shall have
approved, via phone, confirmed by telecopy, such issuance, amendment, renewal or
extension.

    (c) No Letter of Credit shall be issued with a stated expiration date or
latest maturity date of the accepted draft if a usance letter of credit later
than the earlier of (i) the close of business on the date that is five Business
Days prior to the Revolving Credit Maturity Date and (ii) the close of business
on the date that is (x) 270 days after the date of issuance of such Letter of
Credit in the case of a Trade Letter of Credit and (y) 12 months after the date
of issuance of such Letter of Credit in the case of a Standby Letter of Credit.
Each Letter of Credit shall, among other things, (i) provide for the payment of
sight drafts or acceptances of usance drafts when presented for honor thereunder
in accordance with the terms thereof and when accompanied by the documents
described therein and (ii) have an expiry date or latest maturity date in the
case of usance drafts not later than five Business Days prior to the Revolving
Credit Maturity Date. Each Letter of Credit shall be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, and any amendments or revision thereof
adhered to by the Issuing Bank and, to the extent not inconsistent therewith,
the laws of the State of New York.

    (d) By the issuance of a Letter of Credit and without any further action on
the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to
each Revolving Credit Lender, and each such Lender hereby acquires from the
applicable Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Pro Rata Percentage of the aggregate amount available to be drawn under
such Letter of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Bank, such Lender's Pro Rata Percentage of each
L/C Disbursement made by the Issuing Bank and not reimbursed by the Borrowers
(or, if applicable, another party pursuant to its obligations under any other
Loan Document). Each Revolving Credit Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.

    (e) All disbursements or payments with respect to Letters of Credit shall be
deemed to be Revolving Credit Borrowings consisting of ABR Loans and shall bear
interest at the ABR Rate.

    (f)  The Borrowers' obligations to reimburse L/C Disbursements as provided
in paragraph (e) above shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement,
under any and all circumstances whatsoever, and irrespective of:

     (i) any lack of validity or enforceability of any Letter of Credit or any
Loan Document, or any term or provision therein;

    (ii) any amendment or waiver of or any consent to departure from all or any
of the provisions of any Letter of Credit or any Loan Document;

    (iii) the existence of any claim, setoff, defense or other right that a
Borrowers, any other party guaranteeing, or otherwise obligated with, such
Borrowers, any Subsidiary or other Affiliate thereof or any other person may at
any time have against the beneficiary under any Letter of Credit, the Issuing
Bank, the Administrative Agent or any Lender or any other person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;

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    (iv) any draft or other document presented under a Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;

    (v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit; and

    (vi) any other act or omission to act or delay of any kind of the Issuing
Bank, the Lenders, the Administrative Agent or any other person or any other
event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the Borrowers' obligations hereunder.

    Without limiting the generality of the foregoing, it is expressly understood
and agreed that the absolute and unconditional obligation of the Borrowers
hereunder to reimburse L/C Disbursements will not be excused by the gross
negligence or willful misconduct of the Issuing Bank. However, the foregoing
shall not be construed to excuse the Issuing Bank from liability to the
Borrowers to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrowers to the
extent permitted by applicable law) suffered by the Borrowers that are caused by
the Issuing Bank's gross negligence or willful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute willful
misconduct or gross negligence of the Issuing Bank.

    (g) The Issuing Bank shall, promptly following its receipt thereof, examine
all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall as promptly as possible give telephonic
notification, confirmed by telecopy, to the Administrative Agent and the
Borrowing Agent of such demand for payment and whether the Issuing Bank has made
or will make an L/C Disbursement thereunder; provided that any failure to give
or delay in giving such notice shall not relieve the Borrowers of their
obligation to reimburse the Issuing Bank and the Revolving Credit Lenders with
respect to any such L/C Disbursement.

    (h) The Issuing Bank may resign at any time by giving 90 days' prior written
notice to the Administrative Agent, the Lenders and the Borrowers but such
resignation shall not be effective until a successor is appointed. Subject to
the next succeeding paragraph, upon the acceptance of any appointment as the
Issuing Bank hereunder by a Lender that shall agree to serve as successor
Issuing Bank, such successor shall succeed to and become vested with all the
interests, rights and obligations of the retiring Issuing Bank and the retiring
Issuing Bank shall be discharged from its obligations to issue additional
Letters of Credit hereunder. At the time such removal or resignation shall
become effective, the Borrowers shall pay all accrued and unpaid fees pursuant
to Section 2.08(c)(ii). The acceptance of any appointment as the Issuing Bank
hereunder by a successor Lender shall be evidenced by an agreement entered into
by such successor, in a form

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satisfactory to the Borrowers and the Administrative Agent, and, from and after
the effective date of such agreement, (i) such successor Lender shall have all
the rights and obligations of the previous Issuing Bank under this Agreement and
the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term "Issuing Bank" shall be deemed to refer to such successor
or to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the resignation or removal of the
Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.

    (i)  If any Event of Default shall occur and be continuing, the Borrowers
shall, on the Business Day the Borrowing Agent receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) of an Event of Default and
of the amount to be deposited, deposit in an account with the Collateral Agent,
for the benefit of the Revolving Credit Lenders, an amount in cash equal to 105%
of the L/C Exposure as of such date or provide one or more letters of credit, in
form and substance reasonably satisfactory to the Administrative Agent and from
a bank acceptable to the Administrative Agent for such amount in lieu of or to
replace such cash deposit. Such deposit or letter of credit shall be held by the
Collateral Agent as collateral for the payment and performance of the
Obligations. The Collateral Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits in Permitted Investments,
which investments shall be made at the option and sole discretion of the
Collateral Agent, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall (i) automatically be applied by the Administrative Agent to
reimburse the Issuing Bank for L/C Disbursements for which it has not been
reimbursed, (ii) be held for the satisfaction of the reimbursement obligations
of the Borrowers for the L/C Exposure at such time and (iii) if the maturity of
the Loans has been accelerated (but subject to the consent of Revolving Credit
Lenders holding participations in outstanding Letters of Credit representing
greater than 50% of the aggregate undrawn amount of all outstanding Letters of
Credit), be applied to satisfy the Obligations. If the Borrowers are required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Borrowers within three Business Days after all Events of
Default have been cured or waived.

    (j)  The Borrowers may, at any time and from time to time with the consent
of the Administrative Agent (which consent shall not be unreasonably withheld)
and such Lender, designate one or more additional Lenders to act as an issuing
bank under the terms of this Agreement. Any Lender designated as an issuing bank
pursuant to this paragraph (k) shall be deemed (in addition to being a Lender)
to be the Issuing Bank with respect to Letters of Credit issued or to be issued
by such Lender, and all references herein and in the other Loan Documents to the
term "Issuing Bank" shall, with respect to such Letters of Credit, be deemed to
refer to such Lender in its capacity as Issuing Bank.

    (k) The Existing Letters of Credit shall be deemed to be Letters of Credit
issued hereunder, and on the Restatement Effective Date each Revolving Credit
Lender shall be deemed to have been granted and acquired a participation therein
pursuant to paragraph (d) above.

    (l)  In connection with the issuance of any Letter of Credit, the Borrowers
shall jointly and severally indemnify, save and hold the Administrative Agent,
each Lender and each Issuing Bank harmless from any loss, cost, expense or
liability, including, without limitation, payments made by

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the Administrative Agent, any Lender or any Issuing Bank and expenses and
reasonable attorneys' fees incurred by the Administrative Agent, any Lender or
Issuing Bank arising out of, or in connection with, any Letter of Credit to be
issued or created for any Borrower. The Borrowers shall be bound by the
Administrative Agent's or any Issuing Bank's regulations and good faith
interpretations of any Letter of Credit issued or created for Borrowers'
Account, although this interpretation may be different from its own; and neither
the Administrative Agent, nor any Lender, nor any Issuing Bank nor any of their
correspondents shall be liable for any error, negligence, or mistakes, whether
of omission or commission, in following the applicable Borrowers' instructions
or those contained in any Letter of Credit or of any modifications, amendments
or supplements thereto or in issuing or paying any Letter of Credit, except for
the Administrative Agent's, any Lender's, any Issuing Bank's or such
correspondents' willful misconduct or gross negligence.

    (m) If the Administrative Agent is not the Issuing Bank of any Letter of
Credit, Borrower shall authorize and direct the Issuing Bank to deliver to the
Administrative Agent all instruments, documents, and other writings and property
received by the Issuing Bank pursuant to the Letter of Credit and to accept and
rely upon the Administrative Agent's instructions and agreements with respect to
all matters arising in connection with the Letter of Credit and the application
therefor

    (n) In connection with all Letters of Credit issued or caused to be issued
by the Administrative Agent under this Agreement, each Borrower hereby appoints
the Administrative Agent, or its designee, as its attorney, with full power and
authority (i) to sign and/or endorse such Borrower's name upon any warehouse or
other receipts, letter of credit applications and acceptances; (ii) to sign such
Borrower's name on bills of lading; (iii) to clear Inventory through the United
States of America Customs Department ("Customs") in the name of such Borrower or
the Administrative Agent or the Administrative Agent's designee, and to sign and
deliver to Customs officials powers of attorney in the name of such Borrower for
such purpose; and (iv) to complete in such Borrower's name or the Administrative
Agent's, or in the name of the Administrative Agent's designee, any order, sale
or transaction, obtain the necessary documents in connection therewith, and
collect the proceeds thereof. Neither the Administrative Agent nor its attorneys
will be liable for any acts or omissions nor for any error of judgment or
mistakes of fact or law, except for the Administrative Agent's or its attorney's
willful misconduct. This power, being coupled with an interest, is irrevocable
as long as any Letters of Credit remain outstanding.

    SECTION 2.27.  Borrowing Agency Provisions.  (a)  Each Borrower hereby
irrevocably designates the Borrowing Agent to be its attorney and agent and in
such capacity to borrow, sign and endorse notes, and execute and deliver all
instruments, documents, writings and further assurances now or hereafter
required hereunder, on behalf of such Borrower or Borrowers, and hereby
authorizes the Administrative Agent to pay over or credit all loan proceeds
hereunder in accordance with the request of the Borrowing Agent.

    (b) The handling of this credit facility as a co-borrowing facility with a
borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to the Borrowers and at their request. Neither the Administrative
Agent, the Collateral Agent, nor any Lender shall incur liability to any
Borrower as a result thereof. To induce the Administrative Agent, the Collateral
Agent and Lenders to do so and in consideration thereof, each Borrower hereby
indemnifies the Administrative Agent, the Collateral Agent and each Lender and
holds the Administrative Agent, the Collateral Agent and each Lender harmless
from and against any and all liabilities, expenses, losses, damages and claims
of damage or injury asserted against the Administrative Agent, the Collateral
Agent or any Lender by any Person arising from or incurred by reason of the
handling of the financing arrangements of the Borrowers as provided herein,
reliance by the Administrative Agent, the Collateral Agent or any Lender on any
request or instruction from the Borrowing Agent or any other action taken by the
Administrative Agent, the Collateral Agent or any Lender

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with respect to this Section 2.27, except due to willful misconduct or gross
(not mere) negligence by the indemnified party.

    (c) Subject to Section 2.29, all Obligations shall be joint and several, and
each Borrower shall make payment upon the maturity of the Obligations by
acceleration or otherwise, and such obligation and liability on the part of each
Borrower shall in no way be affected by any extensions, renewals and forbearance
granted by the Administrative Agent, the Collateral Agent or any Lender to any
Borrower, failure of the Administrative Agent, the Collateral Agent or any
Lender to give any Borrower notice of borrowing or any other notice, any failure
of the Administrative Agent, the Collateral Agent or any Lender to pursue or
preserve its rights against any Borrower, the release by Agent or any Lender of
any Collateral now or thereafter acquired from any Borrower, and such agreement
by each Borrower to pay upon any notice issued pursuant thereto is unconditional
and unaffected by prior recourse by the Administrative Agent, the Collateral
Agent or any Lender to the other Borrowers or any Collateral for such Borrower's
Obligations or the lack thereof.

    SECTION 2.28.  Waiver of Subrogation.  Each Borrower expressly waives any
and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution of any other claim which such Borrower may now or hereafter have
against the other Borrowers or other person directly or contingently liable for
the Obligations hereunder, or against or with respect to the other Borrowers'
property (including, without limitation, any property which is Collateral for
the Obligations), arising from the existence or performance of this Agreement,
until termination of this Agreement and repayment in full of the Obligations.

    SECTION 2.29.  Borrower Guarantee Agreement.  The Obligations of the
Borrowers as joint and several obligors shall be subject to all the terms,
conditions, waivers and agreements contained in the Borrower Guarantee
Agreement.

    SECTION 2.30.  Increases in Total Revolving Credit Commitment.  The
Borrowers have requested that the Total Revolving Credit Commitment be increased
to $100,000,000, and the Administrative Agent has agreed to use its best efforts
to find one or more additional financial institutions ("New Lenders") to become
parties to this Agreement with Revolving Credit Commitments not in excess of
$22,000,000 in the aggregate (the "Commitment Increase"). Such New Lenders shall
be selected by the Administrative Agent and the Borrowers shall pay to the
Administrative Agent such customary fees and expenses in connection with
syndicating the Commitment Increase as may be necessary, in the reasonable
judgment of the Administrative Agent, to achieve a successful syndication, and
no portion of such fees shall be allocable to any Lender other than the
Administrative Agent and any New Lender. The Administrative Agent shall have no
liability to the Borrowers or the Lenders if the Administrative Agent is unable
to successfully syndicate the Commitment Increase. If the Administrative Agent
is able to successfully syndicate the Commitment Increase, the Commitment
Increase (or so much thereof as shall have been syndicated, as notified to the
Borrowers and the Lenders by the Administrative Agent) shall become effective on
the date specified by the Administrative Agent; provided, however, that (i) no
Default or Event of Default shall exist on such date, both before and after
giving effect to the Commitment Increase, (ii) the New Lenders shall have
entered into one or more joinder agreements, in form and substance satisfactory
to the Administrative Agent, to become Lenders hereunder, (iii) the Borrowers
shall have paid all fees and expenses in connection with the syndication and
arrangement of the Commitment Increase, (iv) the Borrowers shall have executed
and delivered to the Administrative Agent for the benefit of the New Lenders
promissory notes in the amount of the respective portion of the Commitment
Increase, and (v) the Borrowers shall have delivered or caused to be delivered
to the Administrative Agent such legal opinions, certificates and other
documents as the Administrative Agent may reasonably request. On the effective
date of the Commitment Increase, subject to the satisfaction of the foregoing
conditions, (x) Schedule 2.01 shall be amended to reflect the reallocated
Revolving Credit Commitments, and

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(y) each New Lender shall become a Lender hereunder and under the other Loan
Documents. In no event shall the Total Revolving Credit Commitments exceed
$100,000,000 without the consent of all Lenders.

    SECTION 2.31  Realignment of the Revolving Credit Commitments on the
Restatement Effective Date.  In order to effect a realignment of the Revolving
Credit Commitments of the Lenders, after the Terminating Lenders shall have
ceased to become parties to this Agreement, the Borrowers and each Lender agree
as follows, notwithstanding the provisions of any Loan Document:

    (a) On the Restatement Effective Date, each outstanding Eurodollar Loan
owing to each Lender and each Terminating Lender shall be converted to an ABR
Loan, and the Borrowers agree to pay to each Lender and each Terminating Lender
any amount that may be owing under the Existing Credit Agreement as a result of
any conversion on any date other than the last day of an Interest Period. On the
Restatement Effective Date, the Borrowers shall pay all accrued interest on any
Eurodollar Loan so converted, and any accrued fees under the Existing Credit
Agreement.

    (b) On the Restatement Effective Date, subject to the satisfaction of the
conditions in this Agreement, the Administrative Agent, the Lenders and the
Terminating Lenders shall, among themselves, purchase or sell such interests in
the Revolving Loans and Revolving Credit Commitments in such amounts as shall be
necessary so that, after giving effect thereto, the Revolving Loans and
Revolving Credit Commitments will be held by the Lenders ratably in proportion
to the Revolving Credit Commitments of all Lenders set forth on Schedule 2.01.
The Borrowers shall take such actions as the Administrative Agent may reasonably
request (including the execution and delivery of new promissory notes) to
facilitate the realignment of the Revolving Credit Commitments.

    (c) Upon completion of the foregoing realignment, each outstanding Revolving
Loan under the Existing Credit Agreement shall be a Revolving Loan outstanding
under this Agreement, and shall be comprised of Revolving Loans made by each
Lender in proportion to its Pro Rata Percentage of the Total Revolving Credit
Commitment.

ARTICLE III

Representations and Warranties

    The Borrowers represent and warrant to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders that:

    SECTION 3.01  Organization; Powers.  The Borrowers and each of the
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has all requisite power
and authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (c) is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required, except where the failure so to qualify could not reasonably be
expected to result in a Material Adverse Effect, and (d) has the power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents and each other agreement or instrument contemplated hereby to which it
is or will be a party and, in the case of the Borrowers, to borrow hereunder.

    SECTION 3.02  Authorization.  The execution, delivery and performance by
each Loan Party of each of the Loan Documents and the consummation of the
transactions contemplated by the Loan Documents (including the borrowings
hereunder) (collectively, the "Transactions") (i) have been duly authorized by
all requisite corporate and, if required, stockholder action and (ii) will not
(x) violate (A) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of any Borrower or any Subsidiary, (B) any order of any Governmental
Authority or (C) any provision of any indenture, agreement or other instrument
to which

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any Borrower or any Subsidiary is a party or by which any of them or any of
their property is or may be bound, (y) be in conflict with, result in a breach
of or constitute (alone or with notice or lapse of time or both) a default
under, or give rise to any right to accelerate or to require the prepayment,
repurchase or redemption of any obligation under any such indenture, agreement
or other instrument or (z) result in the creation or imposition of any Lien upon
or with respect to any property or assets now owned or hereafter acquired by any
Borrowers or any Subsidiary (other than any Lien created hereunder or under the
Security Documents).

    SECTION 3.03  Enforceability.  This Agreement has been duly executed and
delivered by each Borrower and constitutes, and each other Loan Document when
executed and delivered by the each Loan Party thereto will constitute, a legal,
valid and binding obligation of such Loan Party enforceable against such Loan
Party in accordance with its terms.

    SECTION 3.04  Governmental Approvals.  No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except for (i) the
filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and the United States Copyright
Office, (ii) recordation of the Mortgages and (iii) such as have been made or
obtained and are in full force and effect.

    SECTION 3.05  Financial Statements.  (a)  The Borrowers have heretofore
furnished to the Lenders Activision's consolidated balance sheets and statements
of income, stockholder's equity and cash flows (i) as of and for the fiscal year
ended March 31, 1998, audited by and accompanied by the opinion of KPMG Peat
Marwick LLP, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended December 31, 1998, certified by
its chief financial officer. Such financial statements present fairly the
financial condition and results of operations and cash flows of Activision and
its consolidated Subsidiaries as of such dates and for such periods. Such
balance sheets and the notes thereto disclose all material liabilities, direct
or contingent, of Activision and its consolidated Subsidiaries as of the dates
thereof required to be disclosed therein in accordance with GAAP. Such financial
statements were prepared in accordance with GAAP applied on a consistent basis.

    (b) Activision has heretofore delivered to the Lenders its unaudited pro
forma consolidated balance sheet and statements of income, stockholder's equity
and cash flows as of March 31, 1999, prepared giving effect to the Transactions
as if they had occurred, with respect to such balance sheet, on such date and,
with respect to such other financial statements, on the first day of the
12-month period ending on such date. Such pro forma financial statements have
been prepared in good faith by the Borrowers, based on the assumptions used to
prepare the pro forma financial information contained in the Confidential
Information Memorandum (which assumptions are believed by the Borrowers on the
date hereof and on the Restatement Effective Date to be reasonable), are based
on the best information available to the Borrowers as of the date of delivery
thereof, accurately reflect all adjustments required to be made to give effect
to the Transactions and presents fairly on a pro forma basis the estimated
consolidated financial position of Activision and its consolidated Subsidiaries
as of such date and for such period, assuming that the Transactions had actually
occurred at such date or at the beginning of such period, as the case may be.

    SECTION 3.06  No Material Adverse Change.  There has been no material
adverse change in the business, results of operations, property, condition
(financial or otherwise) or prospects of the Borrowers and the Subsidiaries,
taken as a whole, since December 31, 1998.

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    SECTION 3.07  Title to Properties; Possession Under Leases.  (a)  Each of
the Borrowers and the Subsidiaries has good and marketable title to, or valid
leasehold interests in, all its material properties and tangible assets
(including all Mortgaged Property), except for minor defects in title that do
not interfere with its ability to conduct its business as currently conducted or
to utilize such properties and assets for their intended purposes. All such
material properties and assets are free and clear of Liens, other than Liens
expressly permitted by Section 6.02.

    (b) Each of the Borrowers and the Subsidiaries has complied in all material
respects with all obligations under all material leases or warehousing
agreements to which it is a party and all such leases or warehousing agreements
are in full force and effect. Each of the Borrowers and the Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases.

    (c) No Borrower has received any notice of, nor has any knowledge of, any
pending or contemplated condemnation proceeding affecting the Mortgaged
Properties or any sale or disposition thereof in lieu of condemnation.

    (d) No Borrower nor any of the Subsidiaries is obligated under any right of
first refusal, option or other contractual right to sell, assign or otherwise
dispose of any Mortgaged Property or any interest therein.

    SECTION 3.08  Subsidiaries.  Schedule 3.08 sets forth as of the Restatement
Effective Date a list of all Subsidiaries and the percentage ownership interest
of the Borrowers or their Subsidiaries therein. The shares of capital stock or
other ownership interests so indicated on Schedule 3.08 are fully paid and
non-assessable and are owned by the applicable Borrower or Subsidiary, directly
or indirectly, free and clear of all Liens, other than Liens in favor of the
Collateral Agent and Liens disclosed in Schedule 6.02.

    SECTION 3.09  Litigation; Compliance with Laws.  (a)  Except as set forth on
Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrowers, threatened against or affecting any Borrower or any
Subsidiary or any business, property or rights of any such person (i) that
involve any Loan Document or the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.

    (b) Neither any Borrower nor any of the Subsidiaries or any of their
respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting the Mortgaged Property, or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.

    SECTION 3.10  Agreements.  (a)  Neither any Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.

    (b) Neither any Borrower nor any of the Subsidiaries is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any Material Contract, where such default could
reasonably be expected to result in a Material Adverse Effect.

    SECTION 3.11  Federal Reserve Regulations.  (a)  Neither the Borrowers nor
any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.

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    (b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.

    SECTION 3.12  Investment Company Act; Public Utility Holding Company
Act.  Neither any Borrower nor any Subsidiary is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.

    SECTION 3.13  Use of Proceeds.  The Borrowers will use the proceeds of the
Loans only for working capital and other general corporate purposes and will
request the issuance of Letters of Credit only to support obligations incurred
in the ordinary course of business. In no event may any Seasonal Advance be used
to purchase any Equity Interests of Activision Holdings or any of its
Subsidiaries (or options, warrants or other rights to acquire such Equity
Interests) or to make any investments under Section 6.04(l) hereof.

    SECTION 3.14  Tax Returns.  Each of the Borrowers and the Subsidiaries has
filed or caused to be filed all Federal, state, local and foreign tax returns or
materials required to have been filed by it and has paid or caused to be paid
all taxes due and payable by it and all assessments received by it, except taxes
that are being contested in good faith by appropriate proceedings and for which
the applicable Borrowers or such Subsidiary, as applicable, shall have set aside
on its books adequate reserves.

    SECTION 3.15  No Material Misstatements.  None of (a) the Confidential
Information Memorandum or (b) any other written information, report, financial
statement, exhibit or schedule furnished by the Borrowers to the Administrative
Agent or any Lender in connection with the Loan Documents or included therein or
delivered pursuant thereto contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading; provided that to the
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, the Borrowers represent
only that they acted in good faith and utilized reasonable assumptions and due
care in the preparation of such information, report, financial statement,
exhibit or schedule.

    SECTION 3.16  Employee Benefit Plans.  (a)  Each of the Borrowers and its
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrowers or
any of their ERISA Affiliates. The present value of all benefit liabilities
under each Plan (based on those assumptions used to fund such Plan) did not, as
of the last annual valuation date applicable thereto, exceed the fair market
value of the assets of such Plan, and the present value of all benefit
liabilities of all underfunded Plans (based on those assumptions used to fund
each such Plan) did not, as of the last annual valuation dates applicable
thereto, exceed the fair market value of the assets of all such underfunded
Plans.

    (b) Each Foreign Pension Plan is in compliance in all material respects with
all requirements of law applicable thereto and the respective requirements of
the governing documents for such plan except to the extent such non-compliance
could not reasonably be expected to result in a Material Adverse Effect. With
respect to each Foreign Pension Plan, none of the Borrowers, any Affiliates or
any of their directors, officers, employees or agents has engaged in a
transaction that subjects any Borrower or any of its Subsidiaries, directly or
indirectly, to a material tax or civil penalty. With respect to each Foreign
Pension Plan, reserves have been established in the financial statements
furnished to the Lenders in respect of any unfunded liabilities in accordance
with

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applicable law and prudent business practice or, where required, in accordance
with ordinary accounting practices in the jurisdiction in which such Foreign
Pension Plan is maintained. The aggregate unfunded liabilities, with respect to
such Foreign Pension Plans could not reasonably be expected to result in a
Material Adverse Effect. There are no actions, suits or claims (other than
routine claims for benefits) pending or threatened against any Borrower or any
of its Affiliates with respect to any Foreign Pension Plan that could reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect.

    SECTION 3.17  Environmental Matters.  Except as set forth in Schedule 3.17:

    (a) The properties owned or operated by the Borrowers and the Subsidiaries
(the "Properties") do not contain any Hazardous Materials in amounts or
concentrations which (i) constitute, or constituted a violation of, (ii) require
Remedial Action under, or (iii) could give rise to liability under,
Environmental Laws, which violations, Remedial Actions and liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;

    (b) The Properties and all operations of the Borrowers and the Subsidiaries
are in compliance, and in the last six years have been in compliance, with all
Environmental Laws and all necessary Environmental Permits have been obtained
and are in effect, except to the extent that such non-compliance or failure to
obtain any necessary permits, in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect;

    (c) There have been no Releases or threatened Releases at, from, under or
proximate to the Properties or otherwise in connection with the operations of
the Borrowers or the Subsidiaries, which Releases or threatened Releases, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;

    (d) Neither any Borrowers nor any of the Subsidiaries has received any
notice of an Environmental Claim in connection with the Properties or the
operations of any Borrowers or the Subsidiaries or with regard to any person
whose liabilities for environmental matters any Borrower or any Subsidiary has
retained or assumed, in whole or in part, contractually, by operation of law or
otherwise, which, in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, nor do the Borrowers or the Subsidiaries have reason to
believe that any such notice will be received or is being threatened; and

    (e) Hazardous Materials have not been transported from the Properties, nor
have Hazardous Materials been generated, treated, stored or disposed of at, on
or under any of the Properties in a manner that could give rise to liability
under any Environmental Law, nor have the Borrowers or the Subsidiaries retained
or assumed any liability, contractually, by operation of law or otherwise, with
respect to the generation, treatment, storage or disposal of Hazardous
Materials, which transportation, generation, treatment, storage or disposal, or
retained or assumed liabilities, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.

    SECTION 3.18  Insurance.  Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrowers or by the
Borrowers for their Subsidiaries as of the date hereof and the Restatement
Effective Date. As of each such date, such insurance is in full force and effect
and all premiums have been duly paid. The Borrowers and their Subsidiaries have
insurance in such amounts and covering such risks and liabilities as are in
accordance with normal industry practice.

    SECTION 3.19  Security Documents.  (a)  The Pledge Agreement is effective to
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral (as
defined in the Pledge Agreement) and, when the Collateral is delivered to the
Collateral Agent (or in the case of Foreign Subsidiaries in Germany, the
Netherlands and the United Kingdom, when pledge agreements complying with
applicable foreign laws are executed and delivered), the Pledge Agreement shall
constitute a fully perfected first priority Lien on, and

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security interest in, all right, title and interest of the pledgors thereunder
in such Collateral, in each case prior and superior in right to any other
person.

    (b) The Security Agreement is effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral
(other than the Intellectual Property, as defined in the Security Agreement), in
each case prior and superior in right to any other person, other than with
respect to Liens expressly permitted by Section 6.02.

    (c) When the Security Agreement is filed in the United States Patent and
Trademark Office and the United States Copyright Office, the Security Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in the Intellectual Property (as
defined in the Security Agreement), in each case prior and superior in right to
any other person (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the grantors after the date hereof).

    (d) The Mortgages are effective to create in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, a legal, valid and enforceable
Lien on all of the Loan Parties' right, title and interest in and to the
Mortgaged Property thereunder and the proceeds thereof, and when the Mortgages
are filed in the appropriate offices in the jurisdictions in which the Mortgaged
Properties are located the Mortgages shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Mortgaged Property and the proceeds thereof, in each case prior and
superior in right to any other person, other than with respect to the rights of
persons pursuant to Liens expressly permitted by Section 6.02.

    (e) The UK Charge Documents are effective to create in favor of Activision a
legal, valid and enforceable security interest in and charge over the personal
property assets of UK Sub described therein and, when Form 395 is filed in the
Companies House in the United Kingdom, such UK Charge Documents shall constitute
a fully perfected Lien on, and security interest on all right, title and
interest of UK Sub in such personal property assets prior and superior in right
to any other person.

    SECTION 3.20  Location of Real Property and Leased
Premises.  (a)  Schedule 3.20(a) lists completely and correctly as of the
Restatement Effective Date all real property owned by the Loan Parties and the
addresses thereof. The Loan Parties own in fee all the real property set forth
on Schedule 3.20(a).

    (b) Schedule 3.20(b) lists completely and correctly as of the Restatement
Effective Date all real property leased by the Loan Parties and all locations of
Collateral and the addresses thereof. The Loan Parties have valid leases in or
valid warehouse agreements with respect to all the real property set forth on
Schedule 3.20(b) except to the extent set forth on such Schedule.

    SECTION 3.21  Labor Matters.  As of the date hereof and the Restatement
Effective Date, there are no strikes, lockouts or slowdowns against any Borrower
or any Subsidiary pending or, to the knowledge of the Borrowers, threatened. The
hours worked by and payments made to employees of any Borrower and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such matters.
All payments due from the Borrowers or any Subsidiary, or for which any claim
may be made against any Borrowers or any Subsidiary, on account of wages and
employee health and welfare insurance and other benefits, have

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been paid or accrued as a liability on the books of such Borrower or such
Subsidiary. The consummation of the Transactions will not give rise to any right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Borrower or any Subsidiary is
bound.

    SECTION 3.22  Solvency.  Immediately after the consummation of the
Transactions to occur on the Restatement Effective Date and immediately
following the making of each Loan and after giving effect to the application of
the proceeds of each Loan, (a) the fair value of the assets of each Loan Party,
at a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
each Loan Party will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(c) each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Restatement Effective
Date.

    SECTION 3.23  Year 2000.  No further programming or reprogramming is
required to permit the proper functioning, in and following the year 2000, of
(a) the Borrowers' and their Subsidiaries' computer systems and (b) equipment
containing embedded microchips (including systems and equipment supplied by
others or with which the Borrowers' or their Subsidiaries' systems interface).
The cost to the Borrowers and their Subsidiaries of the reasonably foreseeable
consequences of the year 2000 to the Borrowers and their Subsidiaries (including
reprogramming errors and the failure of others' systems or equipment) will not
result in a Material Adverse Effect. The computer and management information
systems of the Borrowers and their Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient to permit the Borrowers and its Subsidiaries to conduct their
business without Material Adverse Effect.

    SECTION 3.24  Letters of Credit.  The Existing Letters of Credit are the
only letters of credit issued for the account of the Borrowers or any of its
Domestic Subsidiaries that are outstanding immediately prior to the Restatement
Effective Date.

ARTICLE IV

Conditions of Lending

    The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:

    SECTION 4.01  All Credit Events.  On the date of each Borrowing, and on the
date of each issuance, amendment, extension or renewal of a Letter of Credit
(each such event being called a "Credit Event"):

    (a) The Administrative Agent shall have received a notice of such Borrowing
as required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.03) or, in the case of the issuance, amendment,
extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by
Section 2.26(b).

    (b) The representations and warranties set forth in Article III hereof and
in each other Loan Document shall be true and correct in all material respects
on and as of the date of such Credit Event with the same effect as though made
on and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case they shall have been true and
correct as of such earlier date.

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    (c) The Borrowers and each other Loan Party shall be in compliance in all
material respects with all the terms and provisions set forth herein and in each
other Loan Document on its part to be observed or performed, and at the time of
and immediately after such Credit Event, no Event of Default or Default shall
have occurred and be continuing, or would exist after giving effect to the Loan
to be made or Letter of Credit to be issued on such date.

    Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrowers on the date of such Credit Event as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.

    SECTION 4.02  Restatement Effective Date.  On the Restatement Effective Date
(or, as specifically indicated below, prior to the date hereof):

    (a) This Agreement shall have been executed and delivered by each Lender and
each Borrower, and the Administrative Agent shall have received satisfactory
evidence of such execution and delivery.

    (b) The Borrower shall have executed and delivered to each Lender requesting
the issuance of a promissory note a note payable to the order of such Lender in
the amount of its Revolving Credit Commitment.

    (c) The Administrative Agent shall have received, on behalf of itself, the
Lenders and the Issuing Bank, a favorable written opinion of Robinson Silverman
Pearce Aronsohn & Berman LLP, counsel for the Loan Parties, (A) dated the
Restatement Effective Date, (B) addressed to the Issuing Bank, the
Administrative Agent, the Collateral Agent and the Lenders, and (C) covering
such matters relating to the Loan Documents and the Transactions as the
Administrative Agent shall reasonably request, and the Borrowers hereby request
such counsel to deliver such opinions.

    (d) All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be
satisfactory to the Lenders, to the Issuing Bank and to the Administrative
Agent.

    (e) The Administrative Agent shall have received (i) a certificate of the
Secretary or Assistant Secretary of each Loan Party dated the Restatement
Effective Date and certifying (A) that the certificate or articles of
incorporation and bylaws of such Loan Party have not been amended since June 8,
2000 (or attaching any amendments since such date), and (B) as to the incumbency
and specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party; (ii) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate pursuant to
(i) above; and (iii) such other documents as the Lenders, the Issuing Bank or
the Administrative Agent may reasonably request.

    (f)  The Administrative Agent shall have received a certificate, dated the
Restatement Effective Date and signed by an officer of the Borrowers, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01.

    (g) The Administrative Agent shall have received all Fees and other amounts
due and payable on or prior to the Restatement Effective Date, including, any
amounts owing under Section 2.31 as a result of the realignment of the Revolving
Credit Commitments and, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrowers
hereunder or under any other Loan Document.

    (h) Each of the Subsidiary Guarantors shall have duly executed and delivered
to the Collateral Agent a consent to this Agreement.

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    (i)  The Term Loans (under and as defined in, the Existing Credit
Agreement), and all accrued interest thereon, shall have been paid in full.

    (j)  The Administrative Agent shall have received all other documents,
agreements and certificates as the Administrative Agent or any Lender shall
reasonably request.

ARTICLE V

Affirmative Covenants

    The Borrowers covenant and agree with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full and all
Letters of Credit have been canceled or have expired and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, each Borrower will, and will cause each of the
Subsidiaries to:

    SECTION 5.01  Existence; Businesses and Properties.  (a)  Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise expressly permitted under Section 6.05.

    (b) Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated or in a
manner reasonably related to present operations; comply in all material respects
with all applicable laws, rules, regulations (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits or any
restrictions of record or agreements affecting the Mortgaged Properties) and
decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted; and at all times maintain and preserve all property material
to the conduct of such business and keep such property in good repair, working
order and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.

    SECTION 5.02  Insurance.  The Loan Parties shall bear the full risk of any
loss of any nature whatsoever with respect to the Collateral. At the cost and
expense of the Loan Parties in amounts and with carriers reasonably acceptable
to the Administrative Agent, the Loan Parties shall (a) keep all insurable
properties and properties in which any Loan Party has an interest insured
against the hazards of fire, flood, sprinkler leakage, those hazards covered by
extended coverage insurance and such other hazards, and for such amounts, as is
customary in the case of companies engaged in businesses similar to the business
of the Loan Parties including, without limitation, business interruption
insurance and marine and air cargo insurance, (b) maintain a bond in such
amounts as is customary in the case of companies engaged in businesses similar
to the business of the Loan Parties insuring against larceny, embezzlement or
other criminal misappropriation of insured's officers and employees who may
either singly or jointly with others at any time have access to the assets or
funds of such Loan Party either directly or through authority to draw upon such
funds or to direct generally the disposition of such assets; (c) maintain public
and product liability insurance against claims for personal injury, death or
property damage suffered by others; (d) maintain all such worker's compensation
or similar insurance as may be required under the laws of any state or
jurisdiction in which such Loan Party is engaged in business; (e) furnish the
Administrative Agent with (i) copies of all policies and evidence of the
maintenance of such policies by the renewal thereof at least thirty (30) days
before any expiration date, and (ii) appropriate loss payable endorsements in
form and substance reasonably satisfactory to the Administrative Agent, naming
the Administrative Agent as a co-insured and loss payee as its interests

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may appear with respect to all insurance coverage referred to in clause (a), and
providing (A) that all proceeds thereunder shall be payable to the
Administrative Agent, (B) no such insurance shall be affected by any act or
neglect of the insured or owner of the property described in such policy, and
(C) that such policy and loss payable clauses may not be canceled, amended or
terminated unless at least thirty (30) days' prior written notice is given to
the Administrative Agent. In the event of any loss thereunder, the carriers
named therein hereby are directed by the Administrative Agent and the applicable
Loan Party to make payment for such loss to the Administrative Agent and not to
such Loan Party and Administrative Agent jointly. If any insurance losses are
paid by check, draft or other instrument payable to any Loan Party and the
Administrative Agent jointly, the Administrative Agent may endorse such Loan
Party's name thereon and do such Loan Party other things as the Administrative
Agent may deem advisable to reduce the same to case. Following the occurrence of
an Event of Default, the Administrative Agent is hereby authorized to adjust and
compromise claims under insurance coverage referred to in clauses (a), and (b).
All loss recoveries received by the Administrative Agent upon any such insurance
prior to the occurrence of an Event of Default shall be applied to the Revolving
Loans. Any surplus shall be paid by the Administrative Agent to Borrowers or
applied as may be otherwise required by law.

    SECTION 5.03  Obligations and Taxes.  Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise that, if unpaid, might
give rise to a Lien upon such properties or any part thereof; provided, however,
that such payment and discharge shall not be required with respect to any such
tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and the Borrowers
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien and,
in the case of a Mortgaged Property, there is no risk of forfeiture of such
property.

    SECTION 5.04  Financial Statements, Reports, etc.  In the case of the
Borrowers, furnish to the Administrative Agent and each Lender:

    (a) within 90 days after the end of each fiscal year, the consolidated and
consolidating balance sheet and related statements of income, stockholders'
equity and cash flows showing the financial condition of Activision Holdings and
its consolidated Subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such Subsidiaries during such
year, and the balance sheet and related statement of income, stockholders'
equity and cash flows showing the financial condition of Kaboom as of the close
of such fiscal year and the results of its operations during such year. The
consolidated financial statements shall be audited by PriceWatershouseCoopers or
other independent public accountants of recognized national standing and
accompanied by an opinion of such accountants (which shall not be qualified in
any material respect) to the effect that such consolidated financial statements
fairly present the financial condition and results of operations of Activision
Holdings and its consolidated Subsidiaries on a consolidated basis, or of
Kaboom, as the case may be, in accordance with GAAP. In addition, Development
Costs and the amortization of Development Costs for such year shall be
identified explicitly in the audited financial statements or in the notes
thereto;

    (b) within 45 days after the end of each fiscal quarter of each fiscal year,
the consolidated and consolidating balance sheet and related statements of
income, stockholders' equity and cash flows showing the financial condition of
Activision Holdings and its consolidated Subsidiaries, and of the Loan Parties,
as of the close of such fiscal quarter and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then elapsed
portion of the fiscal year, and the balance sheet and related statement of
income, stockholders' equity and cash flows

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showing the financial condition of Kaboom as of the close of such fiscal quarter
and the results of its operations during such fiscal quarter and the then
elapsed portion of the fiscal year, each certified by a Financial Officer of
Activision Holdings or Kaboom, as the case may be, as fairly presenting the
financial condition and results of operations of the Loan Parties and Activision
Holdings and its consolidated Subsidiaries, or of Kaboom, as the case may be, in
accordance with GAAP, subject to normal year-end audit adjustments;

    (c) within 20 days after the end of each month, the consolidated and
consolidating balance sheet and related statements of income, stockholder's
equity and cash flows showing the financial condition of the Loan Parties and of
Activision Holdings and its consolidated Subsidiaries as of the close of such
fiscal month and the results of its operations and the operations of such
Subsidiaries and of the Loan Parties during such fiscal month and the then
elapsed portion of such fiscal year, all certified by one of its Financial
Officers as fairly presenting the financial condition and results of operations
of the Loan Parties and of Activision Holdings and its consolidated Subsidiaries
in accordance with GAAP, subject to normal year-end audit adjustments;

    (d) concurrently with the delivery of financial statements under
paragraph (b) above, a report in reasonable detail of amounts accrued and paid
during such quarter for royalties and fees under license, distribution or
development agreements, in a form reasonably satisfactory to the Administrative
Agent.

    (e) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of the accounting firm (in the case of
paragraph (a)) or Financial Officer (in the case of paragraph (b)) opining on or
certifying such statements (which certificate, when furnished by an accounting
firm, may be limited to accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that no Event of Default or Default has occurred
or, if such an Event of Default or Default has occurred, specifying the nature
and extent thereof and any corrective action taken or proposed to be taken with
respect thereto and (ii) setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with the
covenants contained in Sections 6.09, 6.10, and 6.13;

    (f)  within 90 days of the Restructure Date, an inventory appraisal, from an
appraiser acceptable to the Administrative Agent and in form and substance
satisfactory to the Administrative Agent;

    (g) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Activision Holdings or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be;

    (h) promptly after the receipt thereof by any Borrower or any of its
Subsidiaries, a copy of any "management letter" (whether in draft or final form)
received by any such person from its certified public accountants and the
management's responses thereto; and

    (i)  each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to clause (a) above, the Borrowers
shall deliver to the Administrative Agent a certificate of a Financial Officer
of the Borrowers (i) setting forth the information required pursuant to Sections
1-4, 6 and 9 of the Perfection Certificate or confirming that there has been no
change in such information since the date of the Perfection Certificate
delivered on the Closing Date or the date of the most recent certificate
delivered pursuant to this Section and (ii) certifying that all Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations, including all
refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed

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of record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above to the extent necessary to
protect and perfect the security interests under the Security Documents for a
period of not less than 18 months after the date of such certificate (except as
noted therein with respect to any continuation statements to be filed within
such period).

    (j)  on or before the fifteenth (15th) day of each month as and for the
prior month (a) a Schedule of Receivables, (b) a Schedule of Payables and
(c) Inventory reports; provided, however, that during the period from
September 1 to December 1 of each year, the foregoing information shall be
provided on each Thursday as and for the prior Week; and (d) a schedule, in form
and substance satisfactory to the Administrative Agent, of all Convertible
Subordinated Notes converted to common stock, and all repurchases or redemptions
of Convertible Subordinated Notes and common stock during such month and
cumulatively. In addition, the Borrowers will deliver to the Administrative
Agent at least once every two weeks (or more frequently at the option of the
Borrowers) or as the Administrative Agent may require, (i) confirmatory
assignment schedules, (ii) remittance schedules and (iii) schedules of credits
to Receivables, each certified as complete and correct by a Financial Officer of
the Borrowers. Borrowers shall also deliver to the Administrative Agent at such
intervals as the Administrative Agent may require: (i) copies of Customer
invoices (ii) evidence of shipment or delivery and (iii) such further schedules,
documents and/or information regarding the Collateral as the Administrative
Agent may require including, without limitation, trial balances and test
verifications. The Administrative Agent shall have the right to confirm and
verify all Receivables by any manner and through any medium it considers
advisable and do whatever it may deem reasonably necessary to protect its
interests hereunder. The items to be provided under this Section are to be in
form reasonably satisfactory to the Administrative Agent and executed by the
Borrowers and delivered to the Administrative Agent from time to time solely for
the Administrative Agent's convenience in maintaining records of the Collateral,
and any Borrower's failure to deliver any of such items to the Administrative
Agent shall not affect, terminate, modify or otherwise limit the Collateral
Agent's Lien with respect to the Collateral.

    (k) no later than forty-five (45) days after the beginning of each fiscal
year commencing with the fiscal year ending March 31, 2001, a month by month
projected operating budget and cash flow of Activision Holdings and of the Loan
Parties for such fiscal year (including an income statement for each month and a
balance sheet as at the end of the last month in each fiscal quarter), such
projections to be accompanied by a certificate signed by a Financial Officer of
the Borrowers to the effect that such projections have been prepared on the
basis of sound financial planning practice consistent with past budgets and
financial statements and that such officer has no reason to question the
reasonableness of any material assumptions on which such projections were
prepared; provided that Borrowers will deliver a preliminary projected operating
budget and cash flow for the fiscal year ending March 31, 2003 by April 1, 2002.
In addition, concurrently with the delivery of the financial statements referred
to in clauses (a), (b) and (c) above the Borrowers will deliver a written report
summarizing all material variances from the budgets submitted by the Borrowers
and a discussion and analysis by management with respect to such variances.

    (l)  promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrowers or any
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.

    SECTION 5.05  Litigation and Other Notices.  Furnish to the Administrative
Agent, the Issuing Bank and each Lender prompt written notice of the following:

    (a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken with
respect thereto;

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    (b) the filing or commencement of, or any threat or notice of intention of
any person to file or commence, any action, suit or proceeding, whether at law
or in equity or by or before any Governmental Authority, against any Borrower or
any Affiliate thereof that could reasonably be expected to result in a Material
Adverse Effect;

    (c) any development that has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect;

    (d) any event of default or event which, with notice or lapse of one or both
would constitute an event of default under the Convertible Subordinated Note
Documents or any agreement with respect to Subordinated Debt;

    (e) all matters materially affecting the value, enforceability or
collectibility of any portion of the Collateral, including, without limitation,
any Loan Party's reclamation or repossession of, or the returns to any Loan
Party of, a material amount of goods or claims or disputes asserted by any
Customer or other obligor; and

    (f)  any breach or default under any agreement under which a Loan Party is
the licensee or distributor or any notice of intent to terminate any such
agreement.

    SECTION 5.06  Employee Benefits.  (a)  Comply in all material respects with
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible after, and in any event within
10 days after any Responsible Officer of any Borrower or any ERISA Affiliate
knows or has reason to know that, any ERISA Event has occurred that, alone or
together with any other ERISA Event could reasonably be expected to result in
liability of the Borrowers in an aggregate amount exceeding $1,000,000, a
statement of a Financial Officer of the Borrowers setting forth details as to
such ERISA Event and the action, if any, that the Borrowers propose to take with
respect thereto.

    SECTION 5.07  Maintaining Records; Access to Properties and
Inspections.  Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities. Each
Loan Party will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the financial records and the properties of the Borrowers or any
Subsidiary at reasonable times and as often as reasonably requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender to discuss
the affairs, finances and condition of the Borrowers or any Subsidiary with the
officers thereof and independent accountants therefor.

    SECTION 5.08  Use of Proceeds.  Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in
Section 3.13.

    SECTION 5.09  Compliance with Environmental Laws.  Comply, and cause all
lessees and other persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Properties; obtain and renew all material Environmental Permits
necessary for its operations and Properties; and conduct any Remedial Action in
accordance with Environmental Laws; provided, however, that neither any
Borrowers nor any of the Subsidiaries shall be required to undertake any
Remedial Action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.

    SECTION 5.10  Preparation of Environmental Reports.  If a Default caused by
reason of a breach of Section 3.17 or 5.09 shall have occurred and be
continuing, at the request of the Required Lenders through the Administrative
Agent, provide to the Lenders within 45 days after such request, at the expense
of the Borrowers, an environmental site assessment report for the Properties
which are the

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subject of such Default prepared by an environmental consulting firm acceptable
to the Administrative Agent and indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance or Remedial Action in
connection with such Properties.

    SECTION 5.11  Audits.  From time to time upon the request of the Collateral
Agent or the Required Lenders through the Administrative Agent, permit the
Collateral Agent or the Lenders to conduct evaluations and appraisals of (a) the
Borrowers' practices in the computation of the Borrowing Base and (b) the assets
included in the Borrowing Base. In connection therewith, Borrowers shall pay the
costs of the Collateral Agent's auditors in accordance with the Agent's Fee
Letter.

    SECTION 5.12  Further Assurances.  Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
mortgages and deeds of trust) that may be required under applicable law, or that
the Required Lenders, the Administrative Agent or the Collateral Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the validity
and first priority of the security interests created or intended to be created
by the Security Documents and the UK Charge Documents. The Borrowers will cause
any subsequently acquired or organized Domestic Subsidiary which is a Material
Subsidiary and any other Domestic Subsidiary which becomes a Material Subsidiary
to execute a Subsidiary Guarantee Agreement, Indemnity Subrogation and
Contribution Agreement and each applicable Security Document in favor of the
Collateral Agent. If any new Domestic Subsidiary is to become a Borrower
hereunder, it will execute and deliver a Joinder Agreement and the Borrower
Guarantee Agreement, Indemnity, Subrogation and Contribution Agreement and the
Security Agreement; provided, however, that any new Borrower's Receivables and
Inventory may not be included in calculating the Formula Amount or Individual
Formula Amount until the Administrative Agent has completed its audit with
respect thereto with results satisfactory to it in its Permitted Discretion. In
addition, from time to time, the Borrowers will, at their cost and expense,
promptly secure the Obligations by pledging or creating, or causing to be
pledged or created, perfected security interests with respect to such of the
assets and properties of the Loan Parties as the Administrative Agent or the
Required Lenders shall designate (it being understood that it is the intent of
the parties that the Obligations shall be secured by substantially all the
assets of the Borrowers and their Domestic Subsidiaries (including real and
other properties acquired subsequent to the Closing Date)). Such security
interests and Liens will be created under the Security Documents and other
security agreements, mortgages, deeds of trust and other instruments and
documents in form and substance satisfactory to the Collateral Agent, and the
Borrowers shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Collateral Agent shall reasonably request to evidence
compliance with this Section. The Borrowers agree to provide such evidence as
the Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien.

    SECTION 5.13  Government Receivables.  Notify the Administrative Agent
immediately if any Receivables arise out of contracts between any Borrower and
the United States, any state or any department, agency or instrumentality of any
of them and take all steps necessary to protect the Collateral Agent's interest
in the Collateral under the Federal Assignment of Claims Act or other applicable
state or local statutes or ordinances and deliver to the Administrative Agent
appropriately endorsed any instrument or chattel paper connected with any
Receivable arising out of contracts between any Loan Party and the United
States, any state or any department, agency of instrumentality of any of them.

    SECTION 5.14  Intellectual Property.  (a)  Each Loan Party shall register or
cause to be registered (to the extent not already registered) with the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, those intellectual property rights listed on the exhibits to the
Security Agreement within thirty (30) days of the date of this Agreement. Each
Loan Party shall

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register or cause to be registered with the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, those additional
material intellectual property rights developed or acquired by such Loan Party
from time to time in connection with any product prior to the sale or licensing
of such product to any third party, including without limitation revisions or
additions to the intellectual property rights listed on such exhibits, when such
Loan Party reasonably determines that such registration is appropriate; provided
that such Loan Party shall in any case register such additional patents, and/or
copyrights as are developed or obtained in connection with any product
accounting for more than five percent (5%) of such Loan Party's gross revenues
in any calendar quarter. Notwithstanding the foregoing, each Loan Party shall
only be required to register trademarks when such Loan Party reasonably
determines that such registration is appropriate.

    (b) Each Loan Party shall execute and deliver such additional instruments
and documents from time to time as the Collateral Agent shall reasonably request
to perfect the Collateral Agent's security interest in the Collateral consisting
of Intellectual Property (as defined in the Security Agreement).

    (c) Each Loan Party shall (i) protect, defend and maintain the validity and
enforceability of the Intellectual Property, (ii) use commercially reasonable
efforts to detect infringements of the Intellectual Property and promptly advise
the Administrative Agent in writing of material infringements detected, and
(iii) not allow any Intellectual Property to be abandoned, forfeited or
dedicated to the public without the written consent of the Required Lenders,
which shall not be unreasonably withheld.

    (d) The Collateral Agent shall have the right, but not the obligation, to
take, at Borrowers' sole expense, any actions that Borrowers are required to
take under this Section, but fail to take, after fifteen (15) days' notice to
Borrowers. Borrowers shall reimburse and indemnify the Administrative Agent for
all reasonable costs and reasonable expenses incurred in the reasonable exercise
of its rights under this Section.

    SECTION 5.15  Blocked Accounts.  All proceeds of Collateral shall, at the
direction of the Administrative Agent, be deposited by the Loan Parties into a
lock box account, dominion account or such other "blocked account" ("Blocked
Accounts") with PNC or another bank reasonably acceptable to the Administrative
Agent, that enters into a Lock Box Agreement with the Administrative Agent in
form and substance acceptable to the Administrative Agent. Each Loan Party shall
issue to the institution with which the Blocked Accounts are maintained an
irrevocable letter of instruction directing said bank to transfer such funds so
deposited in accordance with a notice from the Administrative Agent to the
Administrative Agent, either to any account maintained by the Administrative
Agent at said bank or by wire transfer to appropriate account(s) of the
Administrative Agent. All funds deposited in such Blocked Accounts shall
immediately become the property of the Administrative Agent and Borrowers shall
obtain the agreement by such bank to waive any offset rights against the funds
so deposited (except any rights of PNC as a Lender hereunder). Neither the
Administrative Agent, the Collateral Agent nor any Lender assumes any
responsibility for such "blocked account" arrangement, including without
limitation, any claim of accord and satisfaction or release with respect to
deposits accepted by any bank thereunder. Alternatively, the Administrative
Agent may establish depository accounts (the "Depository Accounts") in the name
of the Administrative Agent at a bank or banks for the deposit of such funds and
the Loan Parties shall deposit all proceeds of Collateral or cause same to be
deposited, in kind, in such Depository Accounts in lieu of depositing same to
the Blocked Accounts.

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    All funds in the Blocked Accounts or Depository Accounts shall be
transferred daily to the Administrative Agent to be applied to outstanding
Revolving Loans which are ABR Loans, and applied to the Obligations as they
become due. Any funds remaining after such application may be transferred, if
all ABR Loans and all other Obligations then due have been paid in full, to the
Investment Account to be held as Cash Collateral hereunder and applied to the
Obligations as they become due. From time to time the Administrative Agent
shall, upon the request of the Borrowing Agent, transfer funds from the
Investment Account to Borrower's operating account, but Borrowers may not make
investments in Permitted Investments other than those held in the Investment
Account unless no Revolving Loans are outstanding and, after any transfer of
funds from the Investment Account, Undrawn Availability is at least $10,000,000
or such lesser amount to which the Administrative Agent otherwise consents.

    SECTION 5.16  Receivables.  (a)  Each of the Receivables shall be a bona
fide and valid account representing a bona fide indebtedness incurred by the
Customer therein named and each of the Receivables proposed to be included as an
Eligible Receivable is for a fixed sum as set forth in the invoice relating
thereto (provided immaterial or unintentional invoice errors shall not be deemed
to be a breach hereof) with respect to an absolute sale or lease and delivery of
goods upon stated terms of a Borrower, or work, labor or services theretofore
rendered by a Borrower as of the date each Receivable is created. Same shall be
due and owing in accordance with the applicable Borrower's standard terms of
sale without dispute, setoff or counterclaim except as may be stated on the
Schedules of Receivables delivered by Borrowers to the Administrative Agent.

    (b) Each Customer, to the best of each Borrower's knowledge, as of the date
each Receivable is created, is and will be solvent and able to pay all
Receivables on which the Customer is obligated in full when due or with respect
to such Customers of any Borrower who are not solvent such Borrower has set up
on its books and in its financial records bad debt reserves adequate to cover
such Receivables.

    (c) Each Borrower's chief executive office is located at the addresses set
forth on Schedule 3.20(a) or (b) hereto. Until written notice is given to the
Administrative Agent by the Borrowing Agent of any other office at which any
Borrower keeps its records pertaining to Receivables, all such records shall be
kept at such executive office.

    (d) Until any Borrower's authority to do so is terminated by the
Administrative Agent (which notice the Administrative Agent may give at any time
following the occurrence of an Event of Default), each Borrower will, at such
Borrower's sole cost and expense, but on the Administrative Agent's behalf and
for the Administrative Agent's account, collect as the Administrative Agent's
property and in trust for the Administrative Agent all amounts received on
Receivables, and shall not commingle such collections with any Borrower's funds
or use the same except to pay Obligations. Each Borrower shall, upon request,
deliver to the Administrative Agent, or deposit in the Blocked Account, in
original form and on the date of receipt thereof, all checks, drafts, notes,
money orders, acceptances, cash and other evidences of Indebtedness.

    (e) At any time following the occurrence of an Event of Default, the
Administrative Agent shall have the right to send notice of the assignment of,
and the Collateral Agent's security interest in, the Receivables to any and all
Customers or any third party holding or otherwise concerned with any of the
Collateral. Thereafter, the Collateral Agent shall have the sole right to
collect the Receivables, take possession of the Collateral, or both. The
Collateral Agent's actual collection expenses, including, but not limited to,
stationery and postage, telephone and telegraph, secretarial and clerical
expenses and the salaries of any collection personnel used for collection, may
be charged to Borrowers' Account and added to the Obligations.

    (f)  The Collateral Agent shall have the right to receive, endorse, assign
and/or deliver in the name of the Collateral Agent or any Borrower any and all
checks, drafts and other instruments for the payment of money relating to the
Receivables, and each Borrower hereby waives notice of

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presentment, protest and non-payment of any instrument so endorsed. Each
Borrower hereby constitutes the Collateral Agent or its designee as such
Borrower's attorney with power (i) to endorse such Borrower's name upon any
notes, acceptances, checks, drafts, money orders or other evidences of payment
or Collateral; (ii) to sign such Borrower's name on any invoice or bill of
lading relating to any of the Receivables, drafts against Customers, assignments
and verifications of Receivables; (iii) to send verifications of Receivables to
any Customer; (iv) to sign such Borrower's name on all financing statements or
any other documents or instruments deemed necessary or appropriate by the
Collateral Agent to preserve, protect, or perfect the Collateral Agent's
interest in the Collateral and to file same; (v) following an Event of Default,
to demand payment of the Receivables; (vi) following an Event of Default, to
enforce payment of the Receivables by legal proceedings or otherwise;
(vii) following an Event of Default, to exercise all of Borrowers' rights and
remedies with respect to the collection of the Receivables and any other
Collateral; (viii)following an Event of Default, to settle, adjust, compromise,
extend or renew the Receivables; (ix) following an Event of Default, to settle,
adjust or compromise any legal proceedings brought to collect Receivables;
(x) following an Event of Default, to prepare, file and sign such Borrower's
name on a proof of claim in bankruptcy or similar document against any Customer,
(xi) following an Event of Default, to prepare, file and sign such Borrower's
name on any notice of Lien., assignment or satisfaction of Lien or similar
document in connection with the Receivables; and (xii) to do all other acts and
things necessary to carry out this Agreement. All acts of said attorney or
designee are hereby ratified and approved, and said attorney or designee shall
not be liable for any acts of omission or commission nor for any error of
judgment or mistake of fact or of law, unless constituting willful misconduct or
gross (not mere) negligence; this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid. The Collateral Agent
shall have the right at any time following the occurrence of an Event of Default
to change the address for delivery of mail addressed to any Borrower to such
address as the Collateral Agent may designate and to receive, open and dispose
of all mail addressed to any Borrower.

    (g) Neither the Administrative Agent, the Collateral Agent nor any Lender
shall, under any circumstances or in any event whatsoever, have any liability
for any error or omission or delay of any kind occurring in the settlement,
collection or payment of any of the Receivables or any instrument received in
payment thereof, or for any damage resulting therefrom. Following the occurrence
of an Event of Default the Administrative Agent may, without notice or consent
from any Borrower, sue upon or otherwise collect, extend the time of payment of,
compromise or settle for cash, credit or upon any terms any of the Receivables
or any other securities, instruments or insurance applicable thereto and/or
release any obligor thereof. The Collateral Agent is authorized and empowered to
accept following the occurrence of an Event of Default the return of the goods
represented by any of the Receivables, without notice to or consent by any
Borrower, all without discharging or in any way affecting any Borrower's
liability hereunder.

    (h) No Borrower will, without the Administrative Agent's consent, compromise
or adjust any material amount of the Receivables or extend the time for payment
thereof or accept any material returns of merchandise or grant any additional
discounts, allowances or credits thereon except for those compromises,
adjustments, returns, discounts, credits and allowances as have been heretofore
customary in the business of such Borrower.

ARTICLE VI

Negative Covenants

    The Borrowers covenant and agree with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full and all
Letters of Credit have been canceled or have expired and all amounts drawn
thereunder

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have been reimbursed in full, unless the Required Lenders shall otherwise
consent in writing, no Borrower will nor will it cause or permit any of the
Subsidiaries to:

    SECTION 6.01  Indebtedness.  Incur, create, assume or permit to exist any
Indebtedness, except:

    (a) Indebtedness for borrowed money existing on the Closing Date and set
forth in Schedule 6.01, but not any extensions, renewals or replacements of such
Indebtedness (unless otherwise permitted under this Section 6.01);

    (b) Indebtedness created hereunder and under the other Loan Documents;

    (c) Indebtedness evidenced by Capital Lease Obligations, or secured pursuant
to Section 6.02(h), in each case so long as the aggregate principal amount of
all Indebtedness permitted to be outstanding under this paragraph (c) shall not
exceed $5,000,000;

    (d) Indebtedness in favor of a Lender (or an Affiliate thereof) under one or
more Hedging Agreements approved by the Administrative Agent (such approval not
to be unreasonably withheld);

    (e) intercompany Indebtedness of Activision and its Subsidiaries to the
extent permitted by Sections 6.04(e), (g) and (o);

    (f)  Indebtedness with respect to any surety bonds required in the ordinary
course of business of the Borrowers and the Subsidiaries, provided that such
Indebtedness shall not at any time exceed $250,000 in the aggregate;

    (g) Indebtedness of the European Distribution Subsidiaries in an aggregate
principal amount not to exceed $50,000,000 (or the equivalent thereof) at any
time outstanding, provided that such Indebtedness shall not be Guaranteed by any
Loan Party other than through one or more Letters of Credit issued hereunder to
support such Indebtedness in a face amount not in excess of $9,000,000;

    (h) Indebtedness of Foreign Subsidiaries (other than the European
Distribution Subsidiaries) in an aggregate principal amount not to exceed
$15,000,000 (or the equivalent thereof) at any time outstanding, provided such
Indebtedness shall not be Guaranteed by any Loan Party;

    (i)  other unsecured Indebtedness of the Borrowers and the Subsidiaries in
an aggregate principal amount not to exceed $5,000,000 at any time outstanding;

    (j)  Subordinated Debt in an aggregate principal amount which does not
exceed at the time of incurrence $15,000,000 in outstanding principal amount;
and

    (k) Acquired Debt in connection with a Permitted Acquisition.

    SECTION 6.02  Liens.  Create, incur, assume or permit to exist any Lien on
any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:

    (a) Liens on property or assets of the Borrowers and its Subsidiaries
existing on the date hereof and set forth in Schedule 6.02; provided that such
Liens shall secure only those obligations which they secure on the date hereof
and may not encumber Receivables;

    (b) any Lien created under the Loan Documents;

    (c) Liens for taxes not yet due or which are being contested in compliance
with Section 5.03; provided that the Lien shall have no effect on the priority
of the Liens under the Loan Documents or the value of the Collateral and a stay
of enforcement of any such Lien shall be in effect;

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    (d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or which are being contested in
compliance with Section 5.03;

    (e) Liens (other than any Lien imposed by ERISA), pledges and deposits made
in the ordinary course of business in compliance with workmen's compensation,
unemployment insurance and other social security laws or regulations;

    (f)  deposits to secure the performance of bids, trade contracts (other than
for Indebtedness), leases (other than Capital Lease Obligations), statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

    (g) zoning restrictions, easements, rights-of-way, restrictions on use of
real property and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of the Borrowers or any of its
Subsidiaries;

    (h) purchase money security interests in real property, improvements thereto
or equipment hereafter acquired (or, in the case of improvements, constructed)
by the Borrowers or any Subsidiary; provided that (i) such security interests
secure Indebtedness permitted by Section 6.01, (ii) such security interests are
incurred, and the Indebtedness secured thereby is created, within 90 days after
such acquisition (or construction), (iii) the Indebtedness secured thereby does
not exceed 85% of the lesser of the cost or the fair market value of such real
property, improvements or equipment at the time of such acquisition (or
construction) and (iv) such security interests do not apply to any other
property or assets of the Borrowers or any Subsidiary;

    (i)  Liens on assets of Foreign Subsidiaries; provided that (i) such Liens
do not extend to, or encumber, assets of the Borrowers or any of its Domestic
Subsidiaries and (ii) such Liens secure only Indebtedness incurred by such
Foreign Subsidiaries pursuant to Section 6.01 (g), (h) or (k); and

    (j)  Liens granted to licensors by a Loan Party which encumber only the
licensed intellectual property and inventory produced thereunder (but not any
Receivables from the sale, distribution or licensing thereof), are subordinated
to the Liens of the Collateral Agent on terms and conditions satisfactory to the
Collateral Agent and expressly permit the Liens granted by the Loan Documents
and the exercise of remedies thereunder.

    SECTION 6.03  Sale and Lease-Back Transactions.  Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred unless (a) the sale of such property is
permitted by Section 6.05 and (b) the Capital Lease Obligations arising
therefrom are permitted by Section 6.01(c).

    SECTION 6.04  Investments, Loans and Advances.  Purchase, hold or acquire
any Equity Interests, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:

    (a) investments by the Borrowers existing on the date hereof in the Equity
Interests of the Subsidiaries and the investment by Activision Holdings in
Kaboom existing on the date hereof in an amount not in excess of $1,000;

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    (b) Permitted Investments held in the Investment Account and, if Undrawn
Availability is at least $10,000,000 and there are no outstanding Revolving
Loans (or such lesser amount to which the Administrative Agent consents), other
Permitted Investments;

    (c) Receivables owing to any Borrower or any of its Subsidiaries arising
from sales of Inventory under usual and customary terms in the ordinary course
of business;

    (d) advances not to exceed $500,000 outstanding at any time to employees of
the Borrowers and the Subsidiaries to meet expenses incurred by such employees
in the ordinary course of business;

    (e) any wholly owned Subsidiary may make intercompany loans to a Borrower or
any other wholly owned Subsidiary and any Borrower may make intercompany loans
and advances to any wholly owned Subsidiary; provided that any promissory notes
evidencing such intercompany loans shall be pledged (and delivered) by the
applicable Borrower or the respective wholly owned Domestic Subsidiary that is
the lender of such intercompany loan as Collateral pursuant to the Pledge
Agreement; provided further that (i) any Borrower or any Domestic Subsidiaries
may make loans to and repay loans from any Foreign Subsidiaries pursuant to this
paragraph (e) only if, after giving effect thereto, the outstanding principal
amount of all loans made by Foreign Subsidiaries to Activision during any Fiscal
Year shall exceed the principal of loans made by any Borrower and its Domestic
Subsidiaries during such period and as of the end of each Fiscal Year the
outstanding principal amount of loans made by Foreign Subsidiaries shall exceed
the outstanding principal amount of loans made by the Borrowers and their
Domestic Subsidiaries by at least $4,000,000 and (ii) any loans made by any
Foreign Subsidiaries to any Borrower or any of its Domestic Subsidiaries
pursuant to this paragraph (e) shall be unsecured and subordinated to the
obligations of the Loan Parties pursuant to subordination provisions in
substantially the form of Exhibit J to the Existing Credit Agreement; and any
loans made by any Loan Party to any Foreign Subsidiary shall be evidenced by one
or more revolving Master Notes pledged to the Collateral Agent pursuant to the
Pledge Agreement.

    (f)  the Borrowers may establish Subsidiaries to the extent permitted by
Section 6.15;

    (g) the Borrowers and the Domestic wholly owned Subsidiaries may make
additional loans and advances to, or other investments in, Foreign Subsidiaries
of the Borrowers with the prior written consent of the Required Lenders;

    (h) a Borrower or any wholly owned Subsidiary may acquire substantially all
the assets of, or more than 50% of the Equity Interests of, a person (such
assets or such person referred to herein as the "Acquired Entity" and any
acquisition completed under this subsection 6.04(h) is a "Permitted
Acquisition"); provided that each of the following conditions is satisfied:

     (i) the Acquired Entity shall be a going concern and shall be in a line of
business reasonably related to that of the Borrowers and their Subsidiaries as
conducted during the current and most recent calendar year;

    (ii) the Acquired Entity shall have approved such transaction;

    (iii) the Borrowers shall have delivered to the Administrative Agent at
least 5 Business Days prior to consummation of the acquisition a certificate of
a Financial Officer demonstrating, in reasonable detail, that, at the time of
such transaction (A) both before and after giving effect thereto, no Event of
Default or Default shall have occurred and be continuing or shall exist, (B) the
Borrowers are in compliance with the covenants set forth in Sections 6.09, 6.10,
and 6.13 as of the last day of the most recent fiscal quarter preceding such
acquisition, and would be in compliance on a pro forma basis with such covenants
as of the last day of the month preceding such acquisition, and (C) all
calculations necessary to

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determine compliance with the conditions in clauses (vi) or (vii) below. All pro
forma calculations required to be made pursuant to this subsection 6.04(h) shall
(i) include only those adjustments that would be permitted or required by
Regulation S-X, (ii) be based on reasonably detailed written assumptions which
accompany the certificate and shall be acceptable to the Administrative Agent,
and (iii) be certified by a Financial Officer as having been prepared in good
faith based upon reasonable assumptions;

    (iv) the Borrowers shall comply with Sections 5.12, 6.15 and the relevant
provisions of the other Loan Documents with respect to the Acquired Entity and
its assets or any new Subsidiary formed to effect the acquisition;

    (v) the Borrowers shall have delivered to the Lenders consolidating
financial statements for each Borrower, each Subsidiary and the Acquired Entity
for the most recent fiscal year and fiscal quarter prior to the date of
acquisition in question, and the financial statements of the Acquired Entity for
the most recent fiscal year prior to the date of acquisition in question audited
by an independent certified public accountant; provided that if the total amount
expended (including the value of any Equity Issuance) is less than $30,000,000
and the Cash Components for such acquisition are less than $15,000,000, the
Borrowers shall not be required to deliver financial statements for the Acquired
Entity audited by an independent certified public accountant to the extent such
statements have not been delivered to the Borrowers or their subsidiaries;

    (vi) for any acquisition in which the Cash Components are no more than
$4,000,000 for any individual acquisition or $13,000,000 in the aggregate since
the Closing Date, (a) the Fixed Charge Coverage Ratio of the Loan Parties for
the four quarters ending on the last day of the most recent fiscal quarter
preceding such acquisition was, and the Fixed Charge Coverage Ratio of the Loan
Parties for the 12 months ending on the last day of the month preceding such
acquisition (such last day of the preceding month or such last day of the
preceding fiscal quarter, a "Measurement Date"), would be, on a pro forma basis,
at least 1.0 to 1.0 and (b) after giving effect to the acquisition, the actual
Undrawn Availability at closing (calculated for these purposes without including
the Inventory or Receivables of the Acquired Entity) is at least the lesser of
(x) $5,000,000 and (y) 10% of the sum of the amounts calculated under clauses
(i), (ii) and (v) of the definition of Formula Amount or if the Administrative
Agent has completed its audit of the Acquired Entity with results satisfactory
to the Administrative Agent in its Permitted Discretion, the actual Undrawn
Availability at closing calculated for the Borrowers and the Acquired Entity is
at least $10,000,000;

   (vii) for any acquisition other than an acquisition described in clause (vi),
(a) the Cash Components may be no more than $15,000,000 for any acquisition, no
more than $40,000,000 in any twelve month period, and no more than $60,000,000
since the Closing Date; (b) the Fixed Charge Coverage Ratio of the Loan Parties
for the four quarters ending the last day of the most recent fiscal quarter
preceding such acquisition was, and the Fixed Charge Coverage Ratio of the Loan
Parties for the 12 months ending on the last day of the month preceding such
acquisition would be, on a pro forma basis, at least the higher of (x) 1.1 to
1.0 or (y) the ratio required by Section 6.10; and (c) after giving effect to
the acquisition, the pro forma average daily Undrawn Availability at closing
(calculated for these purposes without including the Inventory or Receivables of
the Acquired Entity) for the most recent January to June period would be greater
than $15,000,000 or, if the Administrative Agent has completed its audit of the
Acquired Entity with results satisfactory to the Administrative Agent in its
Permitted Discretion, the actual Undrawn Availability at closing calculated for
the Borrowers and the Acquired Entity is at least $20,000,000;

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   (viii) any Indebtedness incurred in connection with the acquisition,
including any Acquired Debt and any Subordinated Debt, must be permitted under
Section 6.01; and

    (ix) in no event may any Equity Issuance in connection with any acquisition
exceed a number of shares of Activision common stock (or equivalents) equal to
40% of the issued and outstanding common stock of Activision on such date and
all Equity Issuances shall be of common equity or equivalents;

    (i)  the Borrowers may enter into Hedging Agreements to the extent permitted
in Section 6.01(d);

    (k) Activision and the Subsidiaries may consummate the Transactions;

    (l)  the Borrowers may make investments in persons not constituting
subsidiaries provided that (i) such person is in a line of business reasonably
related to the business of the Borrowers and their Subsidiaries, (ii) prior and
after giving effect to such investment, Undrawn Availability (without giving
effect to clause (iv) of the definition of "Formula Amount" in Section 2.01) is
an amount of at least 10% of the Formula Amount (without giving effect to such
clause (iv)), (iii) after giving effect to the investment and any Revolving
Loans made on the acquisition date, no Seasonal Advance is outstanding and the
Loan Parties are in compliance with the financial covenants contained in this
Agreement, (iv) the Cash Component of any single investment or series of related
investments shall not exceed $5,000,000, (v) the Cash Component(s) of all such
investments in persons not constituting subsidiaries shall not exceed
$15,000,000 in any twelve month period, and (vi) all capital stock or other
equity interests acquired by a Borrower or any other Loan Party shall be pledged
to the Collateral Agent.

    (m) the Borrowers and their Subsidiaries may make advance payments of
royalties under license or distribution agreements in the ordinary course of
business;

    (n) Activision may make loans to directors and employees in connection with
the granting of stock options or as incentive or bonus compensation; and

    (o) loans from Activision to UK Sub evidenced by the Intercompany Note may
remain outstanding.

    In no event may any Loan Party make any investment in Kaboom after the
Restatement Effective Date.

    SECTION 6.05  Mergers, Consolidations, Sales of Assets and
Acquisitions.  (a)  Merge into or consolidate with any other person, or permit
any other person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or any substantial part of the assets of any Borrower (whether now owned or
hereafter acquired) or any Equity Interest of any Subsidiary, or purchase, lease
or otherwise acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other person, except that (i) the
Borrowers and any Subsidiary may purchase and sell Inventory in the ordinary
course of business, (ii) the Borrowers or any wholly owned Subsidiary may make
acquisitions permitted under Section 6.04 above, (iii) if at the time thereof
and immediately after giving effect thereto no Event of Default or Default shall
have occurred and be continuing (x) any wholly owned Subsidiary may merge into a
Borrower in a transaction in which the Borrower is the surviving corporation and
(y) any wholly owned Subsidiary may merge into or consolidate with any other
wholly owned Subsidiary in a transaction in which the surviving entity is a
wholly owned Subsidiary and no person other than a Borrower or a wholly owned
Subsidiary receives any consideration, provided that if any such merger
described in this clause (y) shall involve a Domestic Subsidiary, the surviving
entity of such merger shall be a Domestic Subsidiary; and (iv) any Subsidiary
which is not a Material Subsidiary may be wound up and dissolved.

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    (b) Engage in any Asset Sale unless (i) such Asset Sale is for consideration
at least 85% of which is cash, (ii) such consideration is at least equal to the
fair market value of the assets being sold, transferred, leased or disposed of,
(iii) the fair market value of all assets sold, transferred, leased or disposed
of pursuant to this paragraph (b) and Section 6.05 of the Existing Credit
Agreement shall not exceed (x) $10,000,000 in any fiscal year or (y) $20,000,000
in the aggregate and (iv) the Net Cash Proceeds are applied as required by
Section 2.14.

    SECTION 6.06  Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends.   (a)  Declare or pay, directly or indirectly,
any dividend or make any other distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, with
respect to any of its Equity Interests or directly or indirectly redeem,
purchase, retire or otherwise acquire for value (or permit any Subsidiary to
purchase or acquire) any of its Equity Interests or set aside any amount for any
such purpose; provided, however, that any wholly owned Subsidiary may declare
and pay dividends or make other distributions to the holders of its Equity
Interests, but other Subsidiaries which are not wholly owned may not make
dividends or distributions and provided further that, as long as no Default or
Event of Default shall have occurred and be continuing or result therefrom,
after the Restatement Effective Date, Activision Holdings may purchase or redeem
its capital stock for an aggregate amount which, if added to any funds used to
redeem or purchase Convertible Subordinated Notes permitted under
Section 6.14(b), does not exceed the Repurchase Amount. In no event may any
Seasonal Advance be used to make any purchase or redemption of its stock
hereunder.

    (b) Permit its Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any such Subsidiary to (i) pay any dividends or make any other
distributions on its Equity Interests or (ii) make or repay any loans or
advances to a Borrower or the parent of such Subsidiary except (w) for such
encumbrances or restrictions existing under or by reason of (A) applicable law,
(B) this Agreement and the other Loan Documents, (C) the Convertible
Subordinated Note Documents, (x) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of a Borrower or a
Subsidiary of a Borrower, (y) customary provisions restricting assignment of any
agreement entered into by a Borrower or a Subsidiary in the ordinary course of
business, and (z) any holder of a Lien permitted by Section 6.02 may restrict
the transfer of the asset or assets subject thereto.

    SECTION 6.07  Transactions with Affiliates.  Except for transactions by or
among Loan Parties, sell or transfer any property or assets to, or purchase or
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except that:

    (a) a Borrower or any Subsidiary may engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to such Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties;

    (b) dividends may be paid to the extent provided in Section 6.06;

    (c) loans may be made and other transactions may be entered into between and
among the Borrowers, the Subsidiaries and their respective Affiliates to the
extent permitted by Sections 6.01 and 6.04;

    (d) a Borrower or any Subsidiary may pay reasonable compensation to officers
and directors in the ordinary course of business.

    SECTION 6.08.  [Intentionally omitted].  

    SECTION 6.09  Interest Coverage Ratio.  Permit the Interest Coverage Ratio
for (a) the six-month period ending September 30, 1999, (b) the nine-month
period ending December 31, 1999 or (c) any

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period of four consecutive fiscal quarters thereafter, in each case taken as one
accounting period, ended on the last day of the applicable fiscal quarter to be
less than 5.00 to 1.00 for the Loan Parties on a consolidated basis.

    SECTION 6.10  Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage
Ratio of the Loan Parties on a consolidated basis for any period of four
consecutive fiscal quarters in each case taken as one accounting period, ending
on the last day of any fiscal quarter ending during any period set forth below
to be less than 1.0 to 1.0:

    SECTION 6.11.  [Intentionally omitted]  

    SECTION 6.12.  [Intentionally omitted]  

    SECTION 6.13  Minimum Tangible Net Worth.  (a)  Permit Tangible Net Worth of
the Loan Parties on a consolidated basis at any date set forth below to be less
than the amount set forth opposite such date:

Fiscal Quarter

--------------------------------------------------------------------------------

  Amount

--------------------------------------------------------------------------------

June 30, 2000   $ 36,000,000 September 30, 2000   $ 40,000,000 December 31, 2000
  $ 47,000,000 March 31, 2001   $ 52,000,000 June 30, 2001   $ 55,000,000
September 30, 2001   $ 60,000,000 December 31, 2001   $ 70,000,000 March 31,
2002   $ 78,000,000

    SECTION 6.14  Limitation on Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-laws and Certain Other Agreements,
etc.  (a)  Amend or modify, or permit the amendment or modification of, any
provision of existing Indebtedness or of any agreement (including any purchase
agreement, indenture, loan agreement or security agreement) relating thereto
other than any amendments or modifications to Indebtedness which do not in any
way materially adversely affect the interests of the Lenders, (b) make (or give
any notice in respect thereof) any voluntary or optional payment or prepayment
on or redemption or acquisition for value of, or any prepayment or redemption as
a result of any asset sale, change of control or similar event of, any
Convertible Subordinated Notes, any Subordinated Debt, the Intercompany Note or
any other Indebtedness that is expressly subordinated to the Obligations;
provided, however, that, as long as no Default or Event of Default shall have
occurred and be continuing or shall result therefrom, after the Restatement
Effective Date Activision Holdings may redeem or purchase the Convertible
Subordinated Notes for an aggregate amount which, if added to any funds used to
redeem or purchase capital stock of Activision Holdings permitted under
Section 6.06(a) hereof, does not exceed the Repurchase Amount, but no Seasonal
Advance may be used for such redemption or purchase; (c) amend or modify, or
permit the amendment or modification of, the Merger Agreement or any of the
operating agreements entered into in connection therewith or any tax sharing
agreement, in each case except for amendments or modifications which are not in
any way adverse in any material respect to the interests of the Lenders or
(d) amend, modify or change its Certificate of Incorporation (including by the
filing or modification of any certificate of designation) or By-laws, or any
agreement entered into by it, with respect to its Equity Interests (including
any shareholders' agreement), or enter into any new agreement with respect to
its Equity Interests, other than any amendments, modifications or changes
pursuant to this clause (d) or any such new agreements pursuant to this
clause (d) which do not in any way materially adversely affect the interests of
the Lenders.

    SECTION 6.15  Limitation on Creation of Subsidiaries.  Establish or create
any additional Subsidiaries; provided that the Borrowers may establish or create
one or more Subsidiaries of the

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Borrowers so long as (a) 100% of the Equity Interests of any new Domestic
Subsidiary owned by a Loan Party (or all the Equity Interests of any new Foreign
Subsidiary that is owned by any Loan Party, except that not more than 65% of the
voting Equity Interests of any such Foreign Subsidiary shall be required to be
so pledged) is upon the creation or establishment of any such new Subsidiary
pledged and delivered to the Collateral Agent for the benefit of the Secured
Parties under the Pledge Agreement and (b) upon the creation or establishment of
any such new Domestic Subsidiary such Domestic Subsidiary becomes a party to the
applicable Security Documents in accordance with Section 5.12 and the other Loan
Documents.

    SECTION 6.16  Business.  With respect to Activision Holdings, engage in any
business other than owning Equity Interests in Activision and Kaboom and,
subject to compliance with Section 5.12 hereof, such other Subsidiaries as may
be organized from time to time and with respect to Activision and other
Subsidiaries, engage (directly or indirectly) in any business other than the
businesses in which Activision and its Subsidiaries are engaged on the Closing
Date and other businesses reasonably related thereto.

    SECTION 6.17  Fiscal Year; Accounting Changes.  Change its fiscal year end
to a date other than March 31 or make any change in accounting treatment and
reporting practices except as required by GAAP.

    SECTION 6.18  Minimum Undrawn Availability.  Other than during the period
from August 15 to November 15 in each year, permit Undrawn Availability at any
time to be less than an amount equal to 5% of the Formula Amount.

ARTICLE VII

Events of Default

    In case of the happening of any of the following events ("Events of
Default"):

    (a) any representation or warranty made or deemed made in or in connection
with any Loan Document or the borrowings or issuances of Letters of Credit
hereunder, or any representation, warranty, statement or information contained
in any report, certificate, financial statement or other instrument furnished in
connection with or pursuant to any Loan Document, shall prove to have been false
or misleading in any material respect when so made, deemed made or furnished;

    (b) default shall be made in the payment of any principal of any Loan or the
reimbursement with respect to any L/C Disbursement when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;

    (c) default shall be made in the payment of any interest on any Loan or any
Fee or L/C Disbursement or any other amount (other than an amount referred to in
(b) above) due under any Loan Document, when and as the same shall become due
and payable, and such default shall continue unremedied for a period of three
Business Days;

    (d) default shall be made in the due observance or performance by any
Borrowers or any Subsidiary of any covenant, condition or agreement contained in
Section 5.01(a), 5.05 or 5.08 or in Article VI;

    (e) default shall be made in the due observance or performance by any
Borrower or any Subsidiary or by UK Sub in any UK Charge Document of any
covenant, condition or agreement contained in any Loan Document (other than
those specified in (b), (c) or (d) above) and such default shall continue
unremedied for a period of 30 days;

    (f)  any Loan Party or UK Sub shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Indebtedness in a
principal amount in excess of $2,000,000, when and as the same shall become due
and payable, or (ii) fail to observe or perform any other term,

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covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or holders
of such Indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such Indebtedness to
become due prior to its stated maturity;

    (g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of any Borrower or any Subsidiary, or of a substantial part of the
property or assets of any Borrower or a Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Borrower or any Subsidiary or for a substantial part of
the property or assets of any Borrower or a Subsidiary or (iii) the winding-up
or liquidation of any Borrower or any Subsidiary; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

    (h) any Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(g) above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Borrower or any
Subsidiary or for a substantial part of the property or assets of any Borrower
or any Subsidiary, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable, admit in writing its inability
or fail generally to pay its debts as they become due or (vii) take any action
for the purpose of effecting any of the foregoing;

    (i)  one or more judgments for the payment of money in an aggregate amount
in excess of $250,000 be rendered against any Borrower, any Loan Party or any
combination thereof, unless the same shall be contested in good faith, the
Borrowers have established reserves reasonably satisfactory to the
Administrative Agent and enforcement shall be effectively stayed, satisfied, or
discharged within forty (40) days or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of the Borrowers or any Loan
Party to enforce any such judgment;

    (j)  an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other such ERISA Events, could reasonably
be expected to result in liability of the Borrowers and their ERISA Affiliates
in an aggregate amount exceeding $2,000,000;

    (k) any security interest purported to be created by any Security Document
or UK Charge Document shall cease to be, or shall be asserted by any Borrowers
or any other Loan Party not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security Document
security interest in the securities, assets or properties covered thereby,
except to the extent that any such loss of perfection or priority results from
the failure of the Collateral Agent to maintain possession of certificates
representing securities pledged under the Pledge Agreement and except to the
extent that such loss is covered by a lender's title insurance policy and the
related insurer promptly after such loss shall have acknowledged in writing that
such loss is covered by such title insurance policy;

    (l)  any of the Obligations shall cease to constitute "Senior Indebtedness"
under and as defined in the Convertible Subordinated Note Indenture, any
Subordinated Debt, the Intercompany Note or any Master Note;

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    (m) there shall have occurred a Change in Control;

    (n) issuance of a notice of Lien, levy, assessment, injunction or attachment
against a material portion of the property of any Loan Party or UK Sub, or any
portion of the Collateral shall be seized or taken by any Governmental Agency or
the title or right of any Loan Party which is the owner of any material portion,
or the Collateral shall have become the subject matter of any litigation which,
in the opinion of the Required Lenders, could reasonably be expected upon final
determination, to result in the impairment or loss of the security provided by
the Security Documents;

    (o) termination (other than as a result of any Asset Sale, merger or
liquidation of a Subsidiary permitted hereunder) or breach of any Subsidiary
Guarantee Agreement, or any Subsidiary Guarantor attempts to terminate,
challenge the validity of, or its liability under, any such Subsidiary Guarantee
Agreement or UK Sub attempts to challenge the validity of, or its liability
under the Intercompany Note or any UK Charge Document;

then, and in every such event (other than an event with respect to any Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrowing Agent, take either or
both of the following actions, at the same or different times: (i) terminate
forthwith the Commitments and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Borrowers accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrowers, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in any
event with respect to any Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrowers accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrowers, anything contained herein or in any other
Loan Document to the contrary notwithstanding.

    The Administrative Agent shall have the right in its sole discretion to
determine which rights, Liens, security interests or remedies the Administrative
Agent may at any time pursue, relinquish, subordinate, or modify or to take any
other action with respect thereto and such determination will not in any way
modify or affect any of the Administrative Agent's or Collateral Agent's or
Lenders' rights hereunder.

ARTICLE VIII

The Administrative Agent and the Collateral Agent

    In order to expedite the transactions contemplated by this Agreement, PNC
Bank, National Association, is hereby appointed to act as Administrative Agent
and Collateral Agent on behalf of the Lenders and the Issuing Bank (for purposes
of this Article VIII, the Administrative Agent and the Collateral Agent are
referred to collectively as the "Agents"). Each of the Lenders and each assignee
of any such Lender, hereby irrevocably authorizes the Agents to take such
actions on behalf of such Lender or assignee or the Issuing Bank and to exercise
such powers as are specifically delegated to the Agents by the terms and
provisions hereof and of the other Loan Documents, together with such actions
and powers as are reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement (including without limitation, collection of the
Obligations) the Agents shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from

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acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders (or as otherwise required by
Section 9.08(b)), and such instructions shall be binding; provided, however,
that the Agents shall not be required to take any action which exposes either of
them to liability or which is contrary to this Agreement or the other Loan
Documents or applicable law unless the Agents are furnished with an
indemnification reasonably satisfactory to each of them with respect thereto.
The Administrative Agent is hereby expressly authorized by the Lenders and the
Issuing Bank, without hereby limiting any implied authority, (a) to receive on
behalf of the Lenders and the Issuing Bank all payments of principal of and
interest on the Loans, all payments in respect of L/C Disbursements and all
other amounts due to the Lenders hereunder, and promptly to distribute to each
Lender or the Issuing Bank its proper share of each payment so received; (b) to
give notice on behalf of each of the Lenders to the Borrowers of any Event of
Default specified in this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by the Borrowers or any other Loan Party pursuant to this
Agreement or the other Loan Documents as received by the Administrative Agent.
Without limiting the generality of the foregoing, the Agents are hereby
expressly authorized to execute any and all documents (including releases) with
respect to the Collateral and the rights of the Secured Parties with respect
thereto, as contemplated by and in accordance with the provisions of this
Agreement and the Security Documents.

    Agents shall have no duties or responsibilities except those expressly set
forth in the Loan Documents. Neither the Agents nor any of their respective
directors, officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its or his own gross negligence or
willful misconduct, or be responsible for any statement, warranty or
representation herein or in any Loan Document or the contents of any document
delivered in connection herewith, or be required to ascertain or to make any
inquiry concerning the performance or observance by the Borrowers or any other
Loan Party of any of the terms, conditions, covenants or agreements contained in
any Loan Document. The Agents shall not be responsible to the Lenders for the
due execution, genuineness, validity, enforceability or effectiveness of this
Agreement or any other Loan Documents, instruments or agreements. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any of the other Loan Documents, or to inspect
the properties, books or records of the Borrowers or any other Loan Party. The
duties of the Agents as respects the Loans to the Borrowers shall be mechanical
and administrative in nature; the Agents shall not have by reason of this
Agreement or any other Loan Document a fiduciary relationship in respect of any
Lender; and nothing in this Agreement, expressed or implied, is intended to or
shall be so construed as to impose upon the Agents any obligations in respect of
this Agreement except as expressly set forth herein.

    The Agents shall in all cases be fully protected in acting, or refraining
from acting, in accordance with written instructions signed by the Required
Lenders (or as otherwise required by Section 9.08(b)) and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. Each Agent shall, in the
absence of actual knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper person or persons. Neither the
Agents nor any of their respective directors, officers, employees or agents
shall have any responsibility to the Borrowers or any other Loan Party on
account of the failure of or delay in performance or breach by any Lender or the
Issuing Bank of any of its obligations hereunder or to any Lender or the Issuing
Bank on account of the failure of or delay in performance or breach by any other
Lender or the Issuing Bank or the Borrowers or any other Loan Party of any of
their respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Agents may execute any and all
duties hereunder by or through agents or employees and shall be entitled to rely
upon the advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in

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accordance with the advice of such counsel and the term "Lender" or any similar
term shall, unless the context clearly otherwise indicates, include the
Administrative Agent and the Collateral Agent in its individual capacity as a
Lender.

    The Agents shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before making of the
Loans or at any time or times thereafter except as shall be provided by the
Borrowers pursuant to the terms of this Agreement. The Agents shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any agreement, document, certificate
or a statement delivered in connection herewith or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any other Loan Document, or of the financial
condition of Borrowers, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement, the other Loan Documents or the financial condition of the Borrowers
or any of its subsidiaries, or the existence of any Event of Default or any
Default.

    Either Agent may resign on sixty (60) days' written notice to each of the
Lenders and the Borrowers and upon such resignation, the Required Lenders will
promptly designate a successor Administrative Agent or Collateral Agent, as the
case may be, reasonably satisfactory to the Borrowers.

    Any such successor Administrative Agent or Collateral shall succeed to the
rights, powers and duties of the Administrative Agent or Collateral Agent, and
the term "the Administrative Agent" or "the Collateral Agent" shall mean such
successor Agent effective upon its appointment, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent. After any Agent's resignation, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this Agreement.

    If either Agent shall request instructions from Lenders with respect to any
act or action (including failure to act) in connection with this Agreement or
any other Loan Document, such Agent shall be entitled to refrain from such act
or taking such action unless and until it shall have received instructions from
the Required Lenders; and neither Agent shall incur liability to any person by
reason of so refraining. Without limiting the foregoing, Lenders shall not have
any right of action whatsoever against either Agent as a result of its acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders.

    The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document or telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or entity, and, with respect
to all legal matters pertaining to this Agreement and the Loan Documents and its
duties hereunder, upon advice of counsel selected by it. The Agents may employ
agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by the applicable
Agent with reasonable care.

    No Agent shall be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder or under the other Loan Documents,
unless it has received notice from a Lender or the Borrowers referring to this
Agreement or the other Loan Documents, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
an Agent receives such a notice, it shall give notice thereof to the Lenders.
The Agents shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; provided, that,
unless and until the Agents shall have received such directions, the Agents may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of Lenders.

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    The Lenders hereby acknowledge that neither Agent shall be under any duty to
take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders.

    With respect to the Loans made by it hereunder, each Agent in its individual
capacity and not as Agent shall have the same rights and powers as any other
Lender and may exercise the same as though it were not an Agent, and the Agents
and their Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrowers or any Subsidiary or other
Affiliate thereof as if it were not an Agent.

    Each Lender agrees (a) to reimburse the Agents, on demand, in the amount of
its pro rata share (based on the aggregate amount of its outstanding Revolving
Credit Commitments hereunder) of any expenses incurred for the benefit of the
Lenders by the Agents, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, that shall not
have been reimbursed by the Borrowers and (b) to indemnify and hold harmless
each Agent and any of its directors, officers, employees or agents, on demand,
in the amount of such pro rata share, from and against any and all liabilities,
taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against it in its capacity as Agent or any
of them in any way relating to or arising out of this Agreement or any other
Loan Document or any action taken or omitted by it or any of them under this
Agreement or any other Loan Document, to the extent the same shall not have been
reimbursed by the Borrowers or any other Loan Party, provided that no Lender
shall be liable to an Agent or any such other indemnified person for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent or any of
its directors, officers, employees or agents. Each Revolving Credit Lender
agrees to reimburse the Issuing Bank and its directors, employees and agents, in
each case, to the same extent and subject to the same limitations as provided
above for the Agents.

    Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agents or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement or any other Loan Document, any related agreement or any
document furnished hereunder or thereunder.

ARTICLE IX

Miscellaneous

    SECTION 9.01  Notices.  Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:

    (a) if to the Borrowers or the Borrowing Agent, to Activision, Inc. at 3100
Ocean Park Blvd., Santa Monica, California 90405, Attention of Chief Financial
Officer (Telecopy No. 310-255-2191);

    (b) if to the Administrative Agent, to PNC Bank, National Association, Two
Tower Center Boulevard, East Brunswick, New Jersey 08816, Attention of Ryan Peak
(Telecopy No. 732-220-4315) with a copy to PNC Bank, National Association, 2
North Lake Ave., Suite 940, Pasadena, California 91109, Attention of Albert
Perez (Telecopy No. 626-432-4589); and

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    (c) if to a Lender, to it at its address (or telecopy number) set forth on
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.

    Any party may change the directions for delivery of notices hereunder by
notice delivered in accordance with this Section 9.01. All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by telecopy or on the
date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.

    SECTION 9.02  Survival of Agreement.  All covenants, agreements,
representations and warranties made by the Borrowers herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. The provisions of Sections 2.16, 2.18, 2.19, 2.23 and
9.05 shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the expiration of the
Commitments, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent,
the Collateral Agent, any Lender or the Issuing Bank.

    SECTION 9.03  Binding Effect.  This Agreement shall become effective when it
shall have been executed by the Borrowers and the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective permitted successors and assigns.

    SECTION 9.04  Successors and Assigns.  (a)  Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrowers, the Administrative Agent, the
Issuing Bank or the Lenders that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns.

    (b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate or Related Fund of such Lender, (x) the Borrowers and the
Administrative Agent (and, in the case of any assignment of a Revolving Credit
Commitment, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed);
provided, however, that the consent of the Borrowers shall not be required to
any such assignment during the continuance of any Event of Default described in
subsection (g) or (h) of Article VII, and (y) the amount of the Commitment of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $5,000,000 (or, if less, the
entire remaining amount of such Lender's Commitment) or such lesser amount as
the Borrowers and the Administrative Agent may from time to time agree (such
agreement to be conclusively evidenced by the execution of the related
Assignment and Acceptance by all the

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parties thereto), (ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together
(except in the case of any assignment to an Affiliate or a Related Fund) with a
processing and recordation fee of $3,500 and (iii) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each Assignment and
Acceptance, (A) the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees
accrued for its account and not yet paid).

    (c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Revolving Credit Commitment, and the outstanding balances of its Revolving
Loans, in each case without giving effect to assignments thereof which have not
become effective, are as set forth in such Assignment and Acceptance,
(ii) except as set forth in (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the financial condition of
the Borrowers or any Subsidiary or the performance or observance by the
Borrowers or any Subsidiary of any of its obligations under this Agreement, any
other Loan Document or any other instrument or document furnished pursuant
hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements referred to in Section 3.05(a) or delivered
pursuant to Section 5.04 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.

    (d) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive and the Borrowers,
the Administrative Agent, the Issuing Bank, the Collateral Agent and the Lenders
may treat each person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register

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shall be available for inspection by the Borrowers, the Issuing Bank, the
Collateral Agent and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

    (e) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) above and, if required, the written consent of the Borrowers, the
Issuing Bank and the Administrative Agent to such assignment, the Administrative
Agent shall (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Lenders and the Issuing Bank. No assignment shall be effective
unless it has been recorded in the Register as provided in this paragraph (e).

    (f)  Each Lender may without the consent of the Borrowers, the Issuing Bank
or the Administrative Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.16 and 2.18 to the same extent as if they
were Lenders and (iv) the Borrowers, the Administrative Agent, the Issuing Bank
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the
Borrowers relating to the Loans or L/C Disbursements and to approve any
amendment, modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans, increasing or extending the Commitments or
releasing any Subsidiary Guarantor or all or any substantial part of the
Collateral).

    (g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided that, prior to any such disclosure of
information designated by the Borrowers as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.

    (h) Any Lender may at any time assign all or any portion of its rights under
this Agreement to secure extensions of credit to such Lender or in support of
obligations owed by such Lender; provided that no such assignment shall release
a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto.

    (i)  Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC"),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrowers, the option to provide to the Borrowers
all or any part of any Loan that such Granting Lender would otherwise be
obligated to make to the Borrowers pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to make any Loan and
(ii) if an SPC elects not to exercise such option or otherwise fails to provide
all or any part of such Loan, the Granting Lender shall be obligated to make
such Loan pursuant to the terms hereof. The making

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of a Loan by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting
Lender. Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability for
which shall remain with the Granting Lender). In furtherance of the foregoing,
each party hereto hereby agrees (which agreement shall survive the termination
of this Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this Section 9.04, any SPC may (i) with notice to, but without the prior
written consent of, the Borrowers and the Administrative Agent and without
paying any processing fee therefore, assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institutions (consented to
by the Borrowers and Administrative Agent) providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans and (ii) disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPC.

    (j)  No Borrower shall assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent, the
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.

    (k) In the event that Standard & Poor's Ratings Group, Moody's Investors
Service, Inc., and Thompson's BankWatch (or InsuranceWatch Ratings Service, in
the case of Lenders that are insurance companies (or Best's Insurance Reports,
if such insurance company is not rated by Insurance Watch Ratings Service))
shall, after the date that any Lender becomes a Revolving Credit Lender,
downgrade the long-term certificate deposit ratings of such Lender, and the
resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a
Lender that is an insurance company (or B, in the case of an insurance company
not rated by InsuranceWatch Ratings Service)), then the Issuing Bank shall have
the right, but not the obligation, at its own expense, upon notice to such
Lender and the Administrative Agent, to replace (or to request the Borrowers to
use their reasonable efforts to assist in the replacement of) such Lender with
an assignee (in accordance with and subject to the restrictions contained in
paragraph (b) above), and such Lender hereby agrees to transfer and assign
without recourse (in accordance with and subject to the restrictions contained
in paragraph (b) above) all its interests, rights and obligations in respect of
its Revolving Credit Commitment to such assignee; provided, however, that (i) no
such assignment shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) the Issuing Bank or such assignee, as the case
may be, shall pay to such Lender in immediately available funds on the date of
such assignment the principal of and interest accrued to the date of payment on
the Loans made by such Lender hereunder and all other amounts accrued for such
Lender's account or owed to it hereunder.

    SECTION 9.05  Expenses; Indemnity.  (a)  The Borrowers jointly and severally
agree to pay all out-of-pocket expenses incurred by the Administrative Agent,
the Collateral Agent, and the Issuing Bank in connection with the syndication of
the credit facilities provided for herein and the preparation and administration
of this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be
consummated) or incurred by the Administrative Agent, the Collateral Agent or
any Lender in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Loan Documents or in connection
with the Loans made or Letters of Credit issued hereunder, including the fees,
charges and disbursements of counsel for the Administrative Agent and the
Collateral Agent, and, in connection with any such

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enforcement or protection, the fees, charges and disbursements of any other
counsel for the Administrative Agent, the Collateral Agent or any Lender.

    (b) The Borrowers jointly and severally agree to indemnify the
Administrative Agent, the Collateral Agent, each Lender and the Issuing Bank,
each Affiliate of any of the foregoing persons and each of their respective
directors, officers, trustees, employees and agents (each such person being
called an "Indemnitee") against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (i) the execution or delivery of this Agreement or any other Loan Document or
any agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby, (ii) the use of
the proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) any actual or alleged
presence or Release of Hazardous Materials on any property owned or operated by
any Borrowers or any of the Subsidiaries, or any Environmental Claim related in
any way to any Borrowers or the Subsidiaries; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

    (c) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, any Lender or the Issuing
Bank. All amounts due under this Section 9.05 shall be payable on written demand
therefor.

    SECTION 9.06  Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender or any affiliate of a Lender is hereby authorized
at any time and from time to time, except to the extent prohibited by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender or any affiliate of a Lender to or for the credit or the account
of any Borrowers against any of and all the obligations of the Borrowers now or
hereafter existing under this Agreement and other Loan Documents held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or such other Loan Document and although such obligations
may be unmatured. The rights of each Lender and its affiliate under this
Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

    SECTION 9.07  Applicable Law.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.

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    SECTION 9.08  Waivers; Amendment.  (a)  No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrowers or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on the Borrowers in any case
shall entitle the Borrowers to any other or further notice or demand in similar
or other circumstances.

    (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrowers and the Required Lenders; provided, however, that no such
agreement shall (i) decrease the principal amount of, or extend the maturity of
or any scheduled principal payment date or date for the payment of any interest
on any Loan or any date for reimbursement of an L/C Disbursement, or waive or
excuse any such payment or any part thereof, or decrease the rate of interest on
any Loan or L/C Disbursement or any Fees, without the prior written consent of
each Lender affected thereby, (ii) change or extend the Commitment or decrease
or extend the date for payment of the Commitment Fees of any Lender without the
prior written consent of such Lender, (iii) amend or modify the pro rata
requirements of Section 2.20, the provisions of Section 9.04(i), the provisions
of this Section, the definition of the term "Required Lenders" or release any
Subsidiary Guarantor or all or any substantial part of the Collateral, without
the prior written consent of each Lender (iv) amend or modify the protections
afforded to an SPC pursuant to the provisions of Section 9.04(i) without the
written consent of such SPC, or (v) increase the Advance Rates above the Advance
Rates in effect on the Restatement Effective Date, without the prior written
consent of each Lender; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent, the
Collateral Agent or the Issuing Bank hereunder or under any other Loan Document
without the prior written consent of the Administrative Agent, the Collateral
Agent or the Issuing Bank, respectively.

    (c) In the event that the Administrative Agent requests the consent of a
Lender pursuant to this Section 9.08 and such Lender shall not respond or reply
to the Administrative Agent in writing within 5 days of delivery of such
request, such Lender shall be deemed to have consented to the matter that was
the subject of the request. In the event that the Administrative Agent requests
the consent of a Lender and such consent is denied, then PNC may, at its option,
require such Lender to assign its interest in the Obligations to PNC or to
another Lender or to any other Person designated by the Administrative Agent
(the "Designated Lender") for a price equal to the then outstanding principal
amount thereof plus accrued and unpaid interest and fees due such Lender, which
interest and fees shall be paid when collected from Borrowers. In the event that
PNC elects to require any Lender to assign its interest to PNC, or a Designated
Lender, PNC will so notify such Lender in writing within 45 days following such
Lender's denial, and such Lender will assign its interest to PNC or the
Designated Lender no later than 5 days following receipt of such notice pursuant
to an Assignment and Acceptance Agreement executed by such Lender, PNC or the
Designated Lender, as appropriate, and the Administrative Agent.

    SECTION 9.09.  [Intentionally Deleted]  

    SECTION 9.10  Entire Agreement.  This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any

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other previous agreement among the parties with respect to the subject matter
hereof is superseded by this Agreement and the other Loan Documents. Nothing in
this Agreement or in the other Loan Documents, expressed or implied, is intended
to confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement or the
other Loan Documents.

    SECTION 9.11  WAIVER OF JURY TRIAL; CONSEQUENTIAL DAMAGES.  EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.11. Neither the Administrative Agent, the
Collateral Agent nor any Lender, nor any agent or attorney for any of them,
shall be liable to any Borrowers or any other Loan Party for consequential
damages arising from any breach of contract, tort or other wrong relating to the
establishment, administration or collection of the Obligations.

    SECTION 9.12  Severability.  In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

    SECTION 9.13  Counterparts.  This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.

    SECTION 9.14  Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

    SECTION 9.15  Jurisdiction; Consent to Service of Process.  (a)  Each
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender may
otherwise have to

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bring any action or proceeding relating to this Agreement or the other Loan
Documents against any Borrowers or its properties in the courts of any
jurisdiction.

    (b) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

    (c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.

    SECTION 9.16  Confidentiality.  The Administrative Agent, the Collateral
Agent, the Issuing Bank, and each of the Lenders agrees to keep confidential
(and to use its best efforts to cause its respective agents and representatives
to keep confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
shall be permitted to disclose Information (a) to such of its respective
officers, directors, employees, agents, affiliates and representatives as need
to know such Information, (b) to a potential assignee or participant of such
Lender or any direct or indirect contractual counterparty in any swap agreement
relating to the Loans or such potential assignee's or participant's or
counterparty's advisors who need to know such Information (provided that any
such potential assignee or participant or counterparty shall, and shall use its
best efforts to cause its advisors to, keep confidential all such information on
the terms set forth in this Section 9.16, (c) to the extent requested by any
regulatory authority, (d) to the extent otherwise required by applicable laws
and regulations or by any subpoena or similar legal process, (e) in connection
with any suit, action or proceeding relating to the enforcement of its rights
hereunder or under the other Loan Documents or (f) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 9.16 or (ii) becomes available to the Administrative Agent, the
Issuing Bank, any Lender or the Collateral Agent on a nonconfidential basis from
a source other than a Borrower. For the purposes of this Section, "Information"
shall mean all financial statements, certificates, reports, agreements and
information (including all analyses, compilations and studies prepared by the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender based
on any of the foregoing) that are received from any Borrower and related to such
Borrower, any Subsidiary, any shareholder of the Borrowers or any employee,
customer or supplier of the Borrowers, other than any of the foregoing that were
available to the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to its disclosure thereto by the
Borrowers, and which are in the case of Information provided after the date
hereof, clearly identified at the time of delivery as confidential. The
provisions of this Section 9.16 shall remain operative and in full force and
effect regardless of the expiration and term of this Agreement.

    SECTION 9.17  Delivery of Notes .  Agent shall in good faith use
commercially reasonable efforts to request and obtain from each Lender and
Terminating Lender the delivery of any promissory note evidencing the Term Loan
made by such Lender or Terminating Lender. After receipt thereof, the
Administrative Agent shall immediately mark such promissory notes "cancelled"
and return them to the Borrower as soon as reasonably practicable. Each Lender
and the Administrative Agent on behalf of each of the Terminating Lenders hereby
confirms the cancellation and release of the Borrower's obligations under such
promissory notes and agrees to indemnify and hold harmless the Borrowers from
any loss, damage, claim or liability (including reasonable fees and
disbursements of its attorneys and all costs and expenses of enforcing this
indemnity) arising out of the presentation of such promissory notes by any
person or entity to whom such Lender or Terminating Lender transferred,

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assigned, pledged, hypothecated, created a security interest in or otherwise
encumbered such promissory note or related to the loss or theft of such note.

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    IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.

    ACTIVISION, INC.,
a Delaware corporation
 
 
By
 
  

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Name:
Title:
 
 
ACTIVISION PUBLISHING INC.,
a Delaware corporation
 
 
By
 
  

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Name:
Title:
 
 
EXPERT SOFTWARE, INC.,
a Delaware corporation
 
 
By
 
  

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Name:
Title:
 
 
ACTIVISION VALUE PUBLISHING, INC.,
a Minnesota corporation
 
 
By
 
  

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Name:
Title:

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    IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.

    PNC BANK, NATIONAL ASSOCIATION,
individually and as Administrative Agent, Collateral Agent and Issuing Bank,
 
 
By
 
  

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Name:
Title:

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    IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.

    COMERICA BANK
 
 
By
 
  

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Name:
Title:

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    IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.

    GUARANTY BUSINESS CREDIT CORPORATION
d/b/a Fidelity Funding
 
 
By
 
  

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Name:
Title:

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    IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.

    LASALLE BANK NATIONAL ASSOCIATION
 
 
By
 
  

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Name:
Title:

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    IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.

    U.S. BANK NATIONAL ASSOCIATION
 
 
By
 
  

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Name:
Title:

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Schedule 1.01(a)   Subsidiary Guarantors Schedule 2.01   Lenders and Commitments
Schedule 3.08   Subsidiaries Schedule 3.09   Litigation Schedule 3.17  
Environmental Matters Schedule 3.18   Insurance Schedule 3.20(a)   Real Property
Owned In Fee Schedule 3.20(b)   Leased Real Property Schedule 6.01   Outstanding
Indebtedness on Closing Date Schedule 6.02   Liens Existing on Restatement
Effective Date

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QuickLinks

EXHIBIT 10.29

TABLE OF CONTENTS
AMENDED AND RESTATED CREDIT AGREEMENT
ARTICLE I Definitions
ARTICLE II The Credits
ARTICLE III Representations and Warranties
ARTICLE IV Conditions of Lending
ARTICLE V Affirmative Covenants
ARTICLE VI Negative Covenants
ARTICLE VII Events of Default
ARTICLE VIII The Administrative Agent and the Collateral Agent
ARTICLE IX Miscellaneous