MICROSOFT CORPORATION
                       XBOXRM PUBLISHER LICENSE AGREEMENT

This License  Agreement  (the  "Agreement")  is entered into and effective as of
September 28, 2000 (the "Effective Date") by and between MICROSOFT  CORPORATION,
a Washington  corporation  ("Microsoft"),  and  CONSPIRACY  ENTERTAINMENT  CORP.
("Licensee").

      A.    Whereas,  Microsoft  develops and  licenses a computer  game system,
known as the XboxT, game system; and

      B.    Whereas,  Licensee is an experienced  publisher of software products
that wishes to develop and/or publish one or more software  products  running on
the Xbox game system, and to license  proprietary  materials from Microsoft,  on
the terms and conditions set forth herein.

Accordingly,  for and in  consideration  of the mutual  covenants and conditions
contained  herein,  and for other good and  valuable  consideration,  receipt of
which each party hereby acknowledges, Microsoft and Licensee agree as follows:

1.    DEFINITIONS.  For the purposes of this Agreement, the following terms will
have the respective indicated meanings.

      1.1   "Art & Marketing  Materials"  shall mean art and mechanical  formats
for a Software Title including the retail packaging, end user instruction manual
with end user license  agreement  and  warranties,  Finished  Product Unit media
label,  and any promotional  inserts and other materials that are to be included
in the retail packaging, as well as all press releases,  marketing,  advertising
or promotional  materials  related to the Software Title and/or Finished Product
Units (including  without limitation web advertising and Licensee's web pages to
the extent they refer to the Software Title(s) or the Finished Product Units).

      1.2   "Authorized  Replicator" shall mean a software replicator  certified
and  approved  by  Microsoft  for  replication  of games that run on Xbox.  Upon
Licensee's  written request,  Microsoft will provide Licensee with a copy of the
then-current  list of  Authorized  Replicators,  but the status of a  particular
replicator  and such list may change from time to time in  Microsoft's  sole and
absolute discretion.

      1.3   "Branding  Specifications"  shall mean the specifications in Exhibit
C, and such other design  specifications as Microsoft may hereafter provide from
time to time,  for using the Licensed  Trademarks on a Software  Title and/or on
related product packaging, documentation, and other materials.

      1.4   "Commercial  Release" shall mean (a) with respect to Xbox, the first
distribution  of an Xbox to the public for  payment,  and (b) with  respect to a
Software Title, the earlier of the first  distribution of the Software Title for
payment or  distribution  of Finished  Product Units that are not  designated as
beta or prerelease versions.

      1.5   "Finished  Product Unit" shall mean a DVD-9 copy, in software object
code only, of a Software Title, in whole or in part.

      1.6   "Licensed  Trademarks" shall mean the Microsoft  trademarks depicted
in Exhibit B (which  Microsoft  unilaterally may modify from time to time during
the term of this Agreement upon written notice to Licensee).

      1.7   "Software Title" shall mean the single software product as described
in the applicable Exhibit A (i.e.,  Exhibit A-1, Exhibit A-2, or Exhibit A-n, as
the case may be),  developed by Licensee,  and running on Xbox. A Software Title
shall  include  the  improvements  and  patches  thereto  (if and to the  extent
approved by  Microsoft),  but shall not include any  "prequel"  or  "sequel." If
Microsoft approves one or more additional concept(s) for another single software
product proposed by Licensee to run on Xbox, pursuant to the procedure set forth
in Section 2.1.1 below and the Xbox Guide (as defined in Section 2.1), then upon
Microsoft's  written  approval of such  concept,  this  Agreement,  and the term
"Software  Title," shall be broadened  automatically to cover the respective new
software  product  and the  parties  will  prepare,  initial  and append to this
Agreement a new Exhibit A-n for each such additional new software product.


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      1.8   "Certification  Requirements" shall mean the requirements  specified
in this  Agreement  (including  without  limitation the Xbox Guide) for quality,
compatibility,  and/or  performance of a Software Title,  and, to the extent not
inconsistent  with  the  foregoing  standards,  the  standards  of  quality  and
performance generally accepted in the console game industry.

      1.9   "Territory"  shall be  determined  on a  Software  Title-by-Software
Title  basis,  and shall mean such  comities as may be  specified  in writing by
Microsoft when the concept of the applicable Software Title is approved pursuant
to Section 2.1.1 below.

      1.10  "Xbox" shall mean the first version (as of the  Commercial  Release)
of  Microsoft's  Xbox game  system,  including  operating  system  software  and
hardware design specifications.

2.    DEVELOPMENT; DELIVERY; APPROVAL

      2.1   Software Title Development.  Licensee's  development activities with
respect to each  Software  Title  shall be in  accordance  with the  development
schedule set forth in the applicable Exhibit A-n.  Furthermore,  Licensee agrees
to be bound by all provisions  contained in the  then-applicable  version of the
"Xbox  Guide",  the current  version of which  Microsoft or its  affiliate  will
deliver to Licensee when it is completed, after the execution of this Agreement.
Licensee   understands  and  agrees  that  Microsoft  may,  in  its  discretion,
supplement,  revise  and  update  the Xbox Guide from time to time and that upon
Licensee's  receipt of the applicable  supplement,  revision or updated version,
Licensee automatically shall be bound by all provisions of the then-current Xbox
Guide;  Microsoft  will  specify in each such  supplement,  revision  or updated
version a reasonable effective date of each change if such change or revision is
not  required  to be  effective  immediately.  If  Licensee  proceeds  with  the
development  of a Software  Title,  Licensee  shall  deliver each  milestone (as
described  in this  Section  2.1) to  Microsoft  for  approval in  writing.  All
certification and playtesting (and applicable fees therefor,  if any) will be in
accordance with the then-applicable version of the Xbox Guide. If Microsoft does
not approve  Licensee's  submission  for a given  milestone  then Licensee shall
either  correct the  problems  that  contributed  to the lack of approval or, if
Microsoft  gives Licensee  written notice to cease  development,  Licensee shall
immediately cease all development activities for the applicable Software Title's
subsequent  milestones.  Each successive  milestone shall comply in all material
respects  with the  characteristics  of  previously  approved  milestones.  Each
software milestone shall be delivered in compiled object code form.

            2.1.1 Concept.  Licensee  shall  deliver to  Microsoft a written and
completed  concept  submission  form  (in the  form  provided  by  Microsoft  to
Licensee),  including  without  limitation:  (a) a detailed  description  of the
Software Title,  including but not limited to (to the extent  applicable) title,
theme, plot, characters,  play elements, and technical  specifications;  (b) the
identities of any proposed  subcontractors,  and general  information  about the
principal team of individual  developers,  and (c) an explanation of the design,
technical and marketing  suitability  of the Software  Title.  Evaluation of the
proposed design will be based on criteria including, but not necessarily limited
to,  the  following:  (i)  originality;  (ii)  play  breadth  and  depth;  (iii)
playability;   (iv)  replayability  and  long-term  interest;   and  (v)  theme,
characters and storyline.  Technical  evaluation of the concept will be based on
criteria including, but not necessarily limited to, feasibility of execution and
usage of system capabilities (such as graphics, audio, hard drive, play control,
online  capabilities and peripherals).  Marketing  suitability will be evaluated
based on criteria including,  but not necessarily limited to, the following: (i)
market  viability;   (ii)  Licensee's   marketing  commitment  (if  any);  (iii)
suitability  to the  target  demographic;  and  (iv)  overall  fit with the Xbox
certified software products portfolio.


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            2.1.2 Preliminary  Versions.  Licensee may, but will not be required
to, deliver to Microsoft certain preliminary  versions of the Software Title, as
addressed in the Xbox Guide.

            2.1.3 Feature-Complete  Version. Licensee shall deliver to Microsoft
a  feature-complete  version of the Software Title (the "Beta  Version"),  which
includes  all features of the  Software  Title and such other  content as may be
required under the Xbox Guide.  Concurrently  with delivery of the Beta Version,
Licensee  will  disclose in writing to Microsoft  the details  about any and all
so-called  "hidden  characters,"  "cheats,"  "easter  eggs," "bonus video and/or
audio," and similar elements  included in the Beta Version and/or intended to be
included in the fmal release version of the Software Title.

            2.1.4 Final Release  Version.  Licensee  shall deliver to Microsoft,
Licensee's  proposed final release version of the applicable Software Title that
is complete and ready for manufacture and commercial distribution, with the fmal
content rating certification, with identified program errors corrected, and with
any and all changes  previously  requested  by Microsoft  implemented.  However,
nothing  herein will be deemed to relieve  Licensee of its obligation to correct
program bugs and errors, whenever discovered (including without limitation after
Commercial Release), and Licensee agrees to correct such bugs and errors as soon
as possible  after  discovery  (provided  that,  with  respect to bugs or errors
discovered after Commercial Release of the applicable  Software Title,  Licensee
will use  commercially  reasonable  efforts  to  correct  the  bug/error  in all
Finished Product Units manufactured after discovery). In addition, Licensee will
comply with all certification procedures,  guidelines and standards set forth in
the then-applicable version of the Xbox Guide. Licensee shall not distribute the
Software  Title,  nor  manufacture  any  Finished  Product  Units  intended  for
distribution,   unless   and  until   Microsoft   shall  have  given  its  final
certification  and approval of the fmal release  version of the Software  Title,
and Microsoft  shall have provided the code for the final release version to the
applicable Authorized Replicator(s).

            2.1.5 Playtesting.  Microsoft  will  playtest  the Beta  Version and
proposed  fmal release  version of each  Software  Title;  if Licensee  delivers
preliminary  versions  of a  Software  Title,  Microsoft  may  (but  will not be
obligated to) playtest such versions. Microsoft will provide written comments to
Licensee  regarding  the results of its playtest  results,  and  Licensee  shall
comply with any requests  made by Microsoft to improve the  applicable  Software
Title   based   on  such   playtest   results.   Licensee   acknowledges   that,
notwithstanding  its receipt of approvals from Microsoft for prior milestones or
versions  during the  development  process,  Licensee's  proposed  fmal  release
version of each Software  Title must be approved by  Microsoft,  as set forth in
the Xbox Guide.  In addition to conforming with the approved  concept,  with all
technical  specifications,  and with all  other  requirements  set by  Microsoft
during the development and approval process,  each Software Title must achieve a
satisfactory  rating  in  final  playtesting.  Notwithstanding  anything  to the
contrary contained herein,  Licensee acknowledges and understands that, in part,
the results of  playtesting  will be  subjective,  that  Microsoft will have the
right to deny fmal approval  based on its  determination,  and that Licensee has
and will have no expectation of final approval of any Software Title  regardless
of any  approvals  or  assessments  given or made by  Microsoft,  informally  or
formally, at any time.

            2.1.6 Art & Marketing Materials. Licensee shall deliver to Microsoft
for approval all Art & Marketing Materials as and when developed, whether during
development activities or thereafter. Licensee shall not distribute any specific
Art & Marketing  Materials unless and until Microsoft shall have given its final
certification and approval of the specific item.

      2.2   Content  Rating.  Licensee  understands  and  agrees  that,  without
limitation,  Microsoft  will not give  final  certification  and  approval  of a
Software Title unless and until Licensee shall have obtained, at Licensee's sole
cost,  a rating of no higher  than  "Mature  (17+)" or its  equivalent  from the
appropriate  rating bodies for the applicable  Territory (such as, ESRB,  ELSPA,
etc.) and/or any and all other independent content rating  authority/authorities
reasonably  designated  by  Microsoft.  Licensee  shall make any  changes to the
Software  Title required to obtain a rating of no higher than "Mature (17+)" (or
its equivalent).  In no event shall Licensee distribute any Software Title under
an "Adults Only" or higher rating (or equivalent rating). Licensee shall include
the applicable  rating(s)  prominently on Finished  Product Units, in accordance
with the applicable rating body guidelines.


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<PAGE>


      2.3   Development  Kit License.  Microsoft or its affiliate  wilt offer to
Licensee the  opportunity to enter into one or more  development  kit license(s)
(each an "XDK License")  pursuant to which  Microsoft  would license to Licensee
software development tools and hardware to assist Licensee in the development of
Software  Titles,  including  without  limitation  certain sample code and other
redistributable  code which Licensee could  incorporate into Software Titles, on
such tents and conditions as are contained in the XDK License.

      2.4   Subcontractors.  Licensee  shall not use any  subcontractors  or any
other third parties to perform  software  development  work in connection with a
Software  Title unless and until (i) the proposed  subcontractor  or other third
party and (ii)  Microsoft  shall have  executed an XDK  license;  provided  that
nothing contained herein will be deemed to require Microsoft or its affiliate to
execute an XDK License with any particular  person or entity if Microsoft or its
affiliate determines that it is not appropriate to execute such an XDK License.

      2.5   Changes of Requirements by Microsoft.  Unless  otherwise  reasonably
specified by Microsoft at the  respective  time: (a) after approval by Microsoft
of the Beta  Version of a Software  Title,  Licensee  will not be  obligated  to
comply,  with respect to such Software Title only,  with any subsequent  changes
made by Microsoft to the technical or content  requirements  for Software Titles
generally in the Xbox Guide; and (b) subject to the immediately preceding clause
(a),  any  changes  made  by  Microsoft  in  Branding  Specifications  or  other
requirements after final  certification of a Software Title by Microsoft will be
effective as to such Software Title only on a "going forward" basis (i.e.,  only
to  such  Art &  Marketing  Materials  and/or  Finished  Product  Units  as  are
manufactured  after Microsoft  notifies Licensee of the change),  unless (i) the
change can be accommodated by Licensee with insignificant added expense, or (ii)
Microsoft  pays  for  Licensee's  direct,   out-of-pocket  expenses  necessarily
incurred as a result of its retrospective compliance with the change.

3.    RIGHTS AND RESTRICTIONS

      3.1   Trademarks.

            3.1.1 License.  In each Software Title, and on each Finished Product
Unit (and the  packaging  therefor),  Licensee  shall  incorporate  the Licensed
Trademarks and include credit and  acknowledgement  to Microsoft as set forth in
the Branding  Specifications and the Xbox Guide.  Microsoft grants to Licensee a
non-exclusive,   non-transferable,   personal   license  to  use  the   Licensed
Trademarks,  according  to the  Branding  Specifications  and  other  conditions
herein,  and solely in connection with marketing,  sale, and distribution in the
Territory of Finished Product Units that meet the Certification Requirements.

            3.1.2 Limitations.  Licensee  is  granted  no  right,  and shall not
purport,  to permit any third party to use the Licensed Trademarks in any manner
without  Microsoft's prior written consent.  Licensee's  license to use Licensed
Trademarks  in  connection  with the Software  Title and Finished  Product Units
shall not extend to the merchandising or sale of related or promotional products
under the Licensed Trademarks.

            3.1.3 Branding  Specifications.   Licensee's  use  of  the  Licensed
Trademarks  (including  without  limitation  in Finished  Product Unit and Art &
Marketing Materials) shall comply with the Branding Specifications in Exhibit C.
Licensee shall not use Licensed  Trademarks in association  with any third party
trademarks  in a manner  that might  suggest  co-branding  or  otherwise  create
potential  confusion  as to  source  or  sponsorship  of the  Software  Title or
Finished Product Units or ownership of the Licensed  Trademarks.  Upon notice or
other discovery of any non-conformance  with the requirements or prohibitions of
this section,  Licensee shall promptly  remedy such  non-conformance  and notify
Microsoft of the non-conformance and remedial steps taken.


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<PAGE>


            3.1.4 Certification  Requirements.  Licensee  may use  the  Licensed
Trademarks  only in connection  with the copies of the Software  Title that meet
the  Certification  Requirements.  Licensee  shall test the  Software  Title and
Finished  Product  Units for  conformance  with the  Certification  Requirements
according to  generally  accepted and best  industry  practices,  and shall keep
written or electronic  records of such testing during the term of this Agreement
and for no less than two (2) years thereafter ("Test Records"). Upon Microsoft's
request, Licensee shall provide Microsoft with copies of or reasonable access to
inspect the Test Records,  Finished  Product Units and Software Title (either in
pre-release  or commercial  release  versions,  as Microsoft may request).  Upon
notice  or  other  discovery  of  any  non-conformance  with  the  Certification
Requirements,  Licensee  shall  promptly  remedy  such  non-conformance  in  all
Finished  Product  Units  wherever  in the  chain of  distribution  (subject  to
Sections 2.1.4 and 2.5 above), and shall notify Microsoft of the non-conformance
and remedial steps taken.

            3.1.5 Protection  of  Licensed  Trademarks.  Licensee  shall  assist
Microsoft  in  protecting  and  maintaining  Microsoft's  rights in the Licensed
Trademarks,  including  preparation  and  execution  of  documents  necessary to
register the Licensed Trademarks or record this Agreement,  and giving immediate
notice to  Microsoft  of  potential  infringement  of the  Licensed  Trademarks.
Microsoft shall have the sole right to and in its sole discretion may, commence,
prosecute or defend, and control any action concerning the Licensed  Trademarks,
either in its own name or by joining Licensee as a party thereto. Licensee shall
not  during  the Term of this  Agreement  contest  the  validity  of,  by act or
omission jeopardize, or take any action inconsistent with, Microsoft's rights or
goodwill  in  the  Licensed  Trademarks  in  any  country,  including  attempted
registration of any Licensed Trademark,  or use or attempted registration of any
mark confusingly similar thereto.

            3.1.6 Ownership.  Licensee acknowledges Microsoft's ownership of all
Licensed  Trademarks,  and all goodwill associated with the Licensed Trademarks.
Use of the  Licensed  Trademarks  shall not create any right,  title or interest
therein in Licensee's  favor.  Licensee's use of the Licensed  Trademarks  shall
inure solely to the benefit of Microsoft.

            3.1.7 No Bundling with Unapproved Peripherals, Products or Software.
Licensee shall not market or distribute any Finished Product Unit bundled with a
peripheral  product  software or other  products,  nor shall Licensee  knowingly
permit or assist any third party in such  bundling,  without  Microsoft's  prior
written consent.

      3.2   EULA.  Licensee  shall  distribute   (directly  or  indirectly)  the
Software Title to end users subject to an end user license agreement ("EULA") in
a form to be approved by  Microsoft  prior to any  distribution  of the Software
Title; provided that, in any event, Licensee's EULA for the Software Title shall
(a) name Microsoft as a third party  beneficiary,  with the right to enforce the
agreement,  (b) grant the end user the right to use the  Software  Title on only
one Xbox console at a time, and (c) forbid the end user from reverse engineering
or  decompiling  the Software  Title or Xbox.  Microsoft  will have the right to
modify  its  requirements  for the  EULA at any  time,  in its  discretion,  and
Licensee shall implement, at its sole cost, all such new requirements as soon as
reasonably  possible  after  receiving  written  notice from  Microsoft  of such
required modifications.

      3.3   No Electronic  Transmission;  No Online  Activities.  Licensee shall
distribute  the  Software  Title only as  embodied in  Finished  Product  Units;
specifically, but without limitation, Licensee shall not distribute the Software
Title by any means of electronic transmission without the prior written approval
of  Microsoft,  which  Microsoft  may  grant  or  withhold  in  its  discretion.
Furthermore,  Licensee  will not  authorize  or  permit  any  online  activities
involving  the  Software  Title,   including  without  limitation   multiplayer,
peer-to-peer   and/or  online  play,  without  the  prior  written  approval  of
Microsoft, which Microsoft may grant or withhold in its discretion.

      3.4   No  Distribution  Outside the Territory.  Licensee shall  distribute
Finished  Product Units only in the  Territory.  Licensee  shall not directly or
indirectly  export  any  Finished  Product  Units from the  Territory  nor shall
Licensee  knowingly  permit or assist  any  third  party in doing so,  nor shall
Licensee  distribute  Finished Product Units to any person or entity that it has
reason to believe may  re-distribute or sell such Finished Product Units outside
the Territory.


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<PAGE>


      3.5   No  Reproduction  of Finished  Product  Units Except by Microsoft or
Authorized Replicators. Licensee acknowledges that this Agreement does not grant
Licensee the right to reproduce or otherwise  manufacture Finished Product Units
itself, or on its behalf, other than with Microsoft or an Authorized Replicator.
Licensee  must use Microsoft or an  Authorized  Replicator  to produce  Finished
Product Units, pursuant to Section 4.

      3.6   No Reverse  Engineering.  Licensee may utilize and study the design,
performance  and  operation  of Xbox solely for the purposes of  developing  the
Software Title.  Notwithstanding the foregoing,  Licensee shall not, directly or
indirectly,  reverse engineer or aid or assist in the reverse engineering of all
or any  part of Xbox  except  and  only to the  extent  that  such  activity  is
expressly permitted by applicable law notwithstanding  this limitation.  Reverse
engineering includes, without limitation,  decompiling,  disassembly,  sniffing,
peeling semiconductor components, or otherwise deriving source code. In addition
to  any  other  rights  and  remedies   that   Microsoft   may  have  under  the
circumstances,  Licensee  shall be  required  in all cases to pay  royalties  to
Microsoft in accordance  with Section 6 below with respect to any games or other
products that are developed, marketed or distributed by Licensee, and derived in
whole or in part from the reverse  engineering  of Xbox or any  Microsoft  data,
code or other material.

      3.7   Reservation of Rights.  Microsoft reserves all rights not explicitly
granted herein.

      3.8   Ownership  of the  Software  Titles.  Except  for  the  intellectual
property  supplied by Microsoft to Licensee  (including  without  limitation the
licenses  in the  Licensed  Trademarks  hereunder  and the  licenses  in certain
software and hardware granted by an XDK License), ownership of which is retained
by Microsoft, insofar as Microsoft is concerned, Licensee will own all rights in
and to the Software Titles.

4.    MANUFACTURING

      4.1   Approved  Replicators.  Licensee  shall  retain  only an  Authorized
Replicator to manufacture all Finished Product Units.

      4.2   Terms  of  Use  of  Authorized  Replicator.   Licensee  will  notify
Microsoft in writing of the identity of the applicable Authorized Replicator and
unless    Microsoft    agrees     otherwise,     the    agreement    for    such
manufacturing/replication  services  shall be as  negotiated by Licensee and the
applicable Authorized Replicator, subject to the following requirements:

            4.2.1 Microsoft,  and  not  Licensee,  will  provide  to the  single
applicable Authorized Replicator the final release version of the Software Title
and all specifications required by Microsoft for the manufacture of the Finished
Product Units (including without limitation the Security  Technology (as defined
in Section 4.4 below); Licensee will be responsible for preparing and delivering
to the Authorized Replicator all other items required for manufacturing Finished
Product  Units;  and  Licensee  agrees that all Finished  Product  Units must be
replicated in  conformity  with all of the quality  standards and  manufacturing
specifications,   policies  and  procedures  that  Microsoft   requires  of  its
Authorized  Replicators,  and that all  so-called  "adders"  must be approved by
Microsoft prior to packaging (in accordance with Section 2.1.6 above);

            4.2.2 Microsoft will have the right,  but not the obligation,  to be
supplied with up to fifty (50) Finished Product Units (including  pre-production
samples and random units manufactured during production runs) at Licensee's cost
but without royalties, for quality assurance and archival purposes;

            4.2.3 the initial  manufacturing order for Finished Product Units of
each Software Title may not be less than a number  specified by Microsoft in the
Xbox Guide; although such number may change from time to time during the term of
this Agreement, initially it will be thirty-five thousand (35,000);


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            4.2.4 as  between   Licensee  and   Microsoft,   Licensee  shall  be
responsible  for  ensuring  that  all  Finished  Product  Units  are free of all
defects;

            4.2.5 Licensee will use commercially reasonable efforts to cause the
Authorized  Replicator  to  deliver  to  Microsoft  true  and  accurate  monthly
statements of Finished  Product Units  manufactured in each calendar month, on a
Software  Title-by-Software  Title  basis and in  sufficient  detail to  satisfy
Microsoft,  within fifteen (15) days after the end of the applicable  month, and
Microsoft  will have  reasonable  audit  rights to  examine  the  records of the
Authorized   Replicator   regarding   the  number  of  Finished   Product  Units
manufactured;

            4.2.6 Microsoft  will  have  the  right  to  have  included  in  the
packaging of Finished  Product  Units such  marketing  materials for Xbox and/or
other Xbox  products or services as Microsoft  may  determine in its  reasonable
discretion.  Microsoft  will be  responsible  for  delivering to the  Authorized
Replicator all such  marketing  materials as it desires to include with Finished
Product Units,  and any  incremental  insertion costs relating to such marketing
materials will be borne by Microsoft;

            4.2.7 Microsoft  does not guarantee any level of  performance by its
Authorized Replicators, and Microsoft will have no liability to Licensee for any
Authorized  Replicator's failure to perform its obligations under any applicable
agreement  between  Microsoft  and such  Authorized  Replicator  and/or  between
Licensee and such Authorized Replicator; and

            4.2.8 Prior to placing an order vvith a replicator/manufacturer  for
Finished  Product Units,  Licensee shall confirm with Microsoft that such entity
is an Authorized Replicator;  Microsoft will endeavor to keep an up-to-date list
of Authorized  Replicators in the Xbox Guide.  Licensee will not place any order
for  Finished  Product  Units  vvith  any  entity  that is not at  such  time an
Authorized Replicator.

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

      4.4   Security.  Microsoft will have the right to add to the final release
version of the Software  Title  delivered by Licensee to  Microsoft,  and to all
Finished  Product Units,  such digital  signature  technology and other security
technology  and  copyright  management  information   (collectively,   "Security
Technology")  as Microsoft may determine to be necessary,  and/or  Microsoft may
modify  the  signature  included  in any  Security  Technology  included  in the
Software Title by Licensee at Microsoft's direction. Additionally, Microsoft may
add Security Technology that prohibits the play of Software Titles on Xbox units
manufactured  in a region or country  different from the location of manufacture
of the respective Finished Product Units.

5.    MARKETING, SALES AND SUPPORT

      5.1   Licensee  Responsible.  As between Microsoft and Licensee,  Licensee
shall be solely  responsible for marketing and sales of the Software Title,  and
for  providing  technical and all other support to the end users of the Finished
Product  Units.  Licensee will provide all end users of Software  Titles contact
information   (including  without  limitation   Licensee's  street  address  and
telephone number, and the applicable  individual/group  responsible for customer
support).  Such end user support  will be  consistent  with the  then-applicable
console game industry standards. Licensee acknowledges and agrees that Microsoft
will have no support  responsibilities  whatsoever  to end users of the Software
Title or with respect to Finished Product Units.


                                       7
<PAGE>


      5.2   Art & Marketing  Materials.  In accordance with Section 2.1.6 above,
Licensee shall submit all Art & Marketing  Materials to Microsoft,  and Licensee
shall not distribute such Art & Marketing  Materials  unless and until Microsoft
has  approved  them in  writing.  Prior to  publication  of any Art &  Marketing
Materials,  Licensee  agrees to incorporate  all changes  relating to use of the
Licensed  Trademarks that Microsoft may request,  and will use its  commercially
reasonable  efforts  to  incorporate  other  changes  reasonably   suggested  by
Microsoft (provided,  however,  that Licensee shall at all times comply with the
requirements set forth in the Branding Specifications and/or the Xbox Guide).

      5.3   Warranty.  Licensee  shall  provide  the  original  end  user of any
Finished  Product  Unit a minimum  ninety  (90) day  limited  warranty  that the
Finished Product Unit will perform in accordance with its user  documentation or
Licensee will provide a replacement Finished Product Unit at no charge.


      5.4   Recall.  Notwithstanding  anything to the contrary contained in this
Agreement  (including  without  limitation  Section  2.1.4),  in the  event of a
material  defect in a Software Title and/or any Finished  Product  Units,  which
defect in the reasonable  judgement of Microsoft would significantly  impair the
ability of an end user to play such  Software  Title or Finished  Product  Unit,
Microsoft may require  Licensee to recall  Finished  Product Units and undertake
prompt repair or  replacement  of such Software  Title and/or  Finished  Product
Units.

      5.5   Software  Title  License.  Subject  to third  party  rights of which
Licensee shall have informed Microsoft in writing at the time of delivery of the
feature-complete  version of the  applicable  Software  Title,  Licensee  hereby
grants to Microsoft a  fully-paid,  royalty-free,  non-exclusive  license (i) to
publicly perform the Software Titles at conventions,  events, trade shows, press
briefings,  and the like; and (ii) to use the title of the Software  Title,  and
screen shots from the Software Title,  in advertising  and promotional  material
relating to Xbox and related Microsoft  products and services,  as Microsoft may
reasonably deem appropriate.

6.    PAYMENTS

      6.1   Royalties.  Licensee  shall pay Microsoft  royalties,  on a Software
Title-by-Software  Title basis, for each Finished Product Unit manufactured,  in
accordance with the following table:

Finished Product Units Manufactured Royalty per Applicable
Finished Product Unit US Dollars
                                         Yen
                                        Euros
Units 1 -- 500,000
Units 500,001 -- 1,000,000 Units 1,000,001 -2,000,000 Units 2,000,001 and above


                                       8
<PAGE>


Notwithstanding  the  foregoing,  no royalties  will be payable  hereunder  with
respect to any Demo Finished  Product Units.  For the purposes  hereof,  a "Demo
Finished  Product Unit" will mean a Finished Product Unit that (i) contains only
a small portion of the applicable  Software Title, (ii) is provided to end users
only to  advertise or promote the  applicable  Software  Title  (although it may
include  demonstration  versions of other games for Xbox published by Licensee),
(iii) is  manufactured in a number of units that has been approved in advance by
Microsoft,  which approval  Microsoft agrees not to unreasonably  withhold,  and
(iv) is distributed  free or with a suggested retail price of not more than five
dollars (US$5.00).

      6.2   Royalty Payments. Licensee shall have the option of paying the above
royalties in US Dollars,  Japanese Yen or Euros,  according to the terms of this
Section.  By designating the  appropriate has below,  Licensee may choose to pay
royalties on either a "Worldwide" or "Regional" basis. Such designation shall be
binding  throughout  the term of this  Agreement for all of Licensee's  Software
Titles.  If Licensee elects to pay on a Worldwide  basis, it shall pay royalties
in US Dollars  regardless of where the Finished Product Units are distributed or
manufactured.  If  Licensee  elects  to pay on a  Regional  basis,  it shall pay
royalties in US Dollars,  Japanese Yen or Euros in accordance with the table set
forth in Section 6.1 but subject to the rest of this Section 6.2:

      (i)   If the  Authorized  Replicator  manufacturing  the Finished  Product
Units is located in Japan, Singapore, Malaysia or Taiwan, Licensee shall pay its
royalty denominated in Japanese Yen for such Finished Product Units.

      (ii)  If the  Authorized  Replicator  manufacturing  the Finished  Product
Units is located in a member country of the European  Union,  Licensee shall pay
its royalty denominated in Bums for such Finished Product Units.

      (iii) If the  Authorized  Replicator  manufacturing  the Finished  Product
Units is located in any other country or region of the world, Licensee shall pay
its royalty denominated in US Dollars for such Finished Product Units.

Notwithstanding the foregoing,  in the event the conversion ratio for either Yen
or Euros to Dollars,  as described in the US edition of the Wall Street Journal,
falls  outside  the  foreign  exchange  trading  range as set forth in the chart
below, for a period of time greater than thirty (30) consecutive days, Microsoft
may  then  readjust  the  royalty  amounts  set  forth in  Section  6.1 for that
currency.  Such readjustments shall be made in Microsoft's good faith discretion
according to its normal practices.

      6.3   Payment  Process.  After its receipt from the applicable  Authorized
Replicator(s) of each monthly statement of Finished Product Units  manufactured,
Microsoft  will invoice  Licensee  for the amount owed to Microsoft  pursuant to
Section  6.1 above based upon the  applicable  statement  Licensee  shall pay to
Microsoft  the full amount  invoiced  within thirty (30) calendar days after the
date of the  respective  invoice.  Payment  will be  made by wire  transfer,  in
immediately  available funds, to an account, and in accordance with a reasonable
procedure, to be specified in writing by Microsoft.


                                       9
<PAGE>


      6.4   Audit.  Licensee shall keep all usual and proper records  related to
its  performance  (and any  subcontractor's  performance)  under this Agreement,
including  support  for any cost  borne by or  income  due to  Microsoft,  for a
minimum period of three (3) years from the date they are created.  Such records,
books of  account,  and  entries  shall  be kept in  accordance  with  generally
accepted accounting  principles.  Microsoft reserves the right, upon twenty-four
(24) hours'  notice,  to audit  Licensee's  records and consult with  Licensee's
accountants for the purpose of verifying Licensee's compliance with the terms of
this  Agreement  and for a period of two (2) years  thereafter.  Any such  audit
shall be made by Microsoft's internal audit team or any Microsoft designee,  and
shall be conducted  during  regular  business  hours at the  Licensee's  (or any
applicable  subcontractor's)  offices.  Any  such  audit  shall  be paid  for by
Microsoft  unless material  discrepancies  are disclosed.  "Material" shall mean
five percent (5%) of the royalties due to Microsoft within the audit period.  If
material  discrepancies are disclosed,  Licensee agrees to pay Microsoft for the
costs  associated  with  the  audit,  as well  as  reimburse  Microsoft  for all
over-charged amounts, plus interest at a rate of twelve percent (12%) per annum.

      6.5   Taxes.

            6.5.1 The royalties to be paid by Licensee to Midosoft herein do not
include any foreign, U.S. federal, state, local, municipal or other governmental
taxes, customs and other duties, levies, fees, excises or tariffs,  arising as a
result  of or in  connection  with  the  transactions  contemplated  under  this
Agreement including,  without limitation,  any state or local sales or use taxes
or  consumption  tax or any value  added  tax or  business  transfer  tax now or
hereafter  imposed  on the  provision  of goods  and  services  to  Licensee  by
Microsoft  under this  Agreement,  regardless of whether the same are separately
stated by Microsoft  (all such taxes and other charges being  referred to herein
as "Taxes").  All Taxes (and any penalties,  interest, or other additions to any
Taxes),  with the exception of taxes imposed on  Microsoft's  net income or with
respect to Microsoft's property ownership, shall be the financial responsibility
of Licensee.  Licensee agrees to indemnify,  defend and hold Microsoft  harmless
from any such  Taxes or  claims,  causes of action,  costs  (including,  without
limitation,  reasonable attorneys' fees) and any other liabilities of any nature
whatsoever related to such Taxes.

            6.5.2 Licensee will pay all  applicable  value added,  sales and use
taxes and other taxes levied on it by a duly  constituted and authorized  taxing
authority  payments  made to Microsoft by Licensee  under this  Agreement or any
transaction  related  thereto  in each  country  in which  the  services  and/or
property are being provided or in which the transactions  contemplated hereunder
are otherwise  subject to tax,  regardless of the method of delivery.  Any taxes
that are owed by Licensee,  (i) as a result of entering into this  Agreement and
the  payment  of the  fees  hereunder,  (ii) are  required  or  permitted  to be
collected from Licensee by Microsoft  under  applicable law, and (iii) are based
upon the amounts  payable  under this  Agreement  (such taxes  described in (i),
(ii), and (iii) above the "Collected  Taxes"),  shall be remitted by Licensee to
Microsoft,  whereupon,  upon  request,  Microsoft  shall provide to Licensee tax
receipts  or other  evidence  indicating  that such  Collected  Taxes  have been
collected  by  Microsoft  and  remitted  to the  appropriate  taxing  authority.
Licensee  may  provide to  Microsoft  an  exemption  certificate  acceptable  to
Microsoft and to the relevant taxing authority  (including  without limitation a
resale certificate) in which case, after the date upon which such certificate is
received in proper form,  Microsoft  shall not collect the taxes covered by such
certificate.

            6.5.3 If,  after a  determination  by foreign tax  authorities,  any
taxes are required to be withheld,  on payments  made by Licensee to  Microsoft,
Licensee  may deduct such taxes from the amount owed  Microsoft  and pay them to
the appropriate taxing authority; provided however, that Licensee shall promptly
secure and deliver to Microsoft an official  receipt for any such taxes withheld
or other  documents  necessary to enable  Microsoft  to claim a U.S.  Foreign T.
Credit.  Licensee will make certain that any taxes withheld are minimized to the
extent possible under applicable law.

            6.5.4 This  Section  6.5 shall  govern  the  treatment  of all taxes
arising as a result of or in connection with this Agreement  notwithstanding any
other section of this Agreement.


                                       10
<PAGE>


7.    NON-DISCLOSURE; ANNOUNCEMENTS

      7.1   Non-Disclosure  Agreement.  The information,  materials and software
exchanged by the parties hereunder or under an XDK License,  including the terms
and  conditions  hereof  and  of  the  XDK  License,  shall  be  subject  to the
Non-Disclosure  Agreement  between the parties  attached hereto and incorporated
herein by reference as Exhibit D.

      7.2   Public  Announcements.   The  parties  contemplate  that  they  will
coordinate  the issuance of initial press  releases,  or a joint press  release,
announcing  the  relationship  established  by the execution of this  Agreement.
However,  neither  party  shall  issue any such  press  release or make any such
public  announcement(s)  without the express  prior  consent of the other party,
which consent will not be  unreasonably  withheld or delayed.  Furthermore,  the
parties agree to use their commercially  reasonable efforts to coordinate in the
same manner any subsequent press releases and public  announcements  relating to
their  relationship  hereunder  prior  to  the  issuance  of the  same.  Nothing
contained in this Section 7.2 will relieve Licensee of any other  obligations it
may have under this Agreement,  including without  limitation its obligations to
seek and obtain Microsoft approval of Art & Marketing Materials.

      7.3   Required Public Filings.  Notwithstanding  Sections 7.1 and 7.2, the
parties  acknowledge that this Agreement,  or portions thereof,  may be required
under  applicable  law to be  disclosed,  as part of or an  exhibit to a party's
required public  disclosure  documents.  If either party is advised by its legal
counsel that such  disclosure  is required,  it will notify the other in writing
and the parties will jointly seek  confidential  treatment of this  Agreement to
the maximum extent reasonably  possible,  in documents  approved by both parties
and filed with the applicable  governmental  or regulatory  authorities,  and/or
Microsoft will prepare a redacted version of this Agreement for filing.

8.    TERM AND TERMINATION

      8.1   Term.  The term of this  Agreement  shall  commence on the Effective
Date and unless  terminated  earlier as provided  herein,  shall  continue until
three (3) years after Commercial Release of Xbox.

      8.2   Termination for Breach.  In the event either party shall  materially
fail to perform or comply with this Agreement or any provision thereof, and fail
to remedy the default  within  fifteen  (15) days after the receipt of notice to
that effect,  then the other party shall have the right,  at its sole option and
upon written  notice to the defaulting  party,  to terminate this Agreement upon
written notice.  Any notice of default  hereunder  shall be prominently  labeled
"NOTICE OF DEFAULT";  provided,  however, that if the default is of Section 3 or
7.1 above, or an XDK License,  then the non-defaulting  party may terminate this
Agreement immediately upon written notice,  without being obligated to provide a
fifteen (15) day cure period.  The rights and remedies  provided in this Section
shall not be  exclusive  and are in  addition to any other  rights and  remedies
provided  by law or this  Agreement.  If the  uncured  default  is  related to a
particular Software Title, then the party not in default will have the right, in
its  discretion,  to terminate this Agreement in its entirety or with respect to
the applicable Software Title.

      8.3   Termination  for  Creative  Reasons.  In the  event  that  Microsoft
determines,  at any time prior to the  Commercial  Release of a Software  Title,
that such Software Title does not comply with the  requirements set forth in the
Xbox Guide,  then  Microsoft  will have the right to terminate  this  Agreement,
without cost or penalty,  upon written notice to Licensee solely with respect to
such Software Title,  in Microsoft's  sole  discretion and  notwithstanding  any
prior approvals given by Microsoft pursuant to Section 2 above.

      8.4   Effect  of  Termination;   Sell-off  Rights.   Upon  termination  or
expiration of this  Agreement,  Licensee shall have no further right to exercise
the  rights  licensed  hereunder  or  otherwise  acquired  in  relation  to this
Agreement  and  shall  promptly  return  any  and  all  copies  of the  Licensed
Trademarks.  Licensee shall have a period of six (6) months following expiration
of this Agreement,  or termination for a reason other than Licensee's breach, to
sell-off its  inventory  of Finished  Product  Units  existing as of the date of
termination or  expiration,  after which sell-off  period  Licensee  immediately


                                       11
<PAGE>

shall  destroy all Finished  Product  Units then in its  possession or under its
control.  All of Licensee's  obligations  under this Agreement shall continue to
apply during such six-month sell-off period. If this Agreement is terminated due
to Licensee's  breach,  Licensee shall immediately  destroy all Finished Product
Units not yet distributed to Licensee's distributors,  dealers and/or end users.
If requested by Microsoft  in writing,  Licensee  will deliver to Microsoft  the
written  certification  by an officer of Licensee  confirming the destruction of
Finished Product Units required hereunder.

      8.5   Survival. The following provisions shall survive termination of this
Agreement: 1, 3.6, 5.1, 5.3, 5.4, 6, 7, 8.4, 8.5, 9, 10, 11 and 12.

9.    WARRANTIES

      9.1   Licensee. Licensee warrants and represents that:

            9.1.1 It has the full power to enter into this Agreement;

            9.1.2 It has not  previously  and will not grant  any  rights to any
third party that are inconsistent  with the rights granted to Microsoft  herein;
and

            9.1.3 The Software Title,  Finished  Product Units,  Art & Marketing
Materials  (excluding  those  portions  that consist of the  Licensed  Material,
Licensed  Trademarks,  and redistributable  components of the so-called "XDK" in
the form as delivered  to Licensee by  Microsoft  pursuant to an XDK License) do
not and will not infringe upon or misappropriate  any third party trade secrets,
copyrights, trademarks, patents, publicity, privacy or other proprietary rights.

      9.2   Microsoft. Microsoft warrants and represents that:

            9.2.1 It has the full power to enter into this Agreement; and

            9.2.2 It has not  previously  and will not grant  any  rights to any
third party that are inconsistent with the rights granted to Licensee herein.

      9.3   DISCLAIMER.  EXCEPT AS EXPRESSLY STATED IN THIS SECTION 9, MICROSOFT
PROVIDES ALL MATERIALS  (INCLUDING WITHOUT  LIMITATION THE SECURITY  TECHNOLOGY)
AND SERVICES  HEREUNDER ON AN "AS IS" BASIS,  AND MICROSOFT  DISCLAIMS ALL OTHER
WARRANTIES  UNDER  THE  APPLICABLE  LAWS OF ANY  COUNTRY,  EXPRESS  OR  IMPLIED,
REGARDING  THE  MATERIALS  AND  SERVICES IT PROVIDES  HEREUNDER,  INCLUDING  ANY
IMPLIED  WARRANTIES OF  MERCHANTABILITY,  FITNESS FOR A PARTICULAR  PURPOSE,  OR
WARRANTY  OF  FREEDOM  FROM  COMPUTER  VIRUSES.  WITHOUT  LIMITATION,  MICROSOFT
PROVIDES NO WARRANTY OF NON-INFRINGEMENT.

      9.4   LIMITATION  OF  LIABILITY.  THE  MAXIMUM  LIABILTY OF  MICROSOFT  TO
LICENSEE OR ANY THIRD PARTY  ARISING  OUT OF THIS  AGREEMENT  SHALL BE THE TOTAL
AMOUNTS  RECEIVED BY MICROSOFT  HEREUNDER.  FURTHERMORE,  UNDER NO CIRCUMSTANCES
SHALL MICROSOFT BE LIABLE TO LICENSEE FOR ANY DAMAGES WHATSOEVER WITH RESPECT TO
ANY CLAIMS RELATING TO THE SECURITY TECHNOLOGY AND/OR ITS AFFECT ON ANY SOFTWARE
TITLE.

10.   INDEMNITY

      10.1  Indemnification. A claim for which indemnity may be sought hereunder
shall be referred to as a "Claim."


                                       12
<PAGE>


            10.1.1  Mutual Indemnification.   Each   party   hereby   agrees  to
indemnify,  defend,  and hold the other party  harmless from any and all claims,
demands, costs, liabilities,  losses, expenses and damages (including reasonable
attorneys'  fees,  costs,  and  expert  witnesses'  fees)  arising  out of or in
connection  with any claim that,  taking the claimant's  allegations to be true,
would result in a breach by the indemnifying  party of any of its warranties and
covenants set forth in Section 9.

            10.1.2  Additional Licensee  Indemnification  Obligation.   Licensee
further agrees to indemnify,  defend,  and hold Microsoft  harmless from any and
all claims, demands, costs, liabilities, losses, expenses and damages (including
reasonable attorneys' fees, costs, and expert witnesses' fees) arising out of or
in connection  with any claim  regarding any Software Title or Finished  Product
Unit,  including without limitation any claim relating to quality,  performance,
safety or conformance  with the  Certification  Requirements,  or arising out of
Licensee's use of the Licensed Trademarks in breach of this Agreement.

      10.2  Notice and Assistance.  The indemnified party shall: (i) provide the
indemnifying  party reasonably  prompt notice in writing of any Claim and permit
the  indemnifying  party to answer and defend such Claim through  counsel chosen
and paid by the indemnifying party; and (ii) provide information, assistance and
authority  to help the  indemnifying  party defend such Claim.  The  indemnified
party  may  participate  in the  defense  of any Claim at its own  expense.  The
indemnifying  party  will  not be  responsible  for any  settlement  made by the
indemnified  party without the indemnifying  party's written  permission,  which
will not be  unreasonably  withheld  or delayed.  In the event the  indemnifying
party and the indemnified  party agree to settle a Claim, the indemnified  party
agrees not to publicize the settlement  without first obtaining the indemnifying
party's written permission.

      10.3  Insurance.  Prior to distribution of any Software Title, Licensee at
its sole cost and expense shall have endorsed Microsoft as an additional insured
on  Licensee's  media perils errors and  omissions  liability  policy for claims
arising in connection  with  production,  development  and  distribution of each
Software  Title in an amount no less than  $5,000,000 on a per occurrence or per
incident basis. Coverage provided to Microsoft under the policy shall be primary
to and not  contributory  with  any  insurance  maintained  by  Microsoft.  Upon
request, Licensee agrees to furnish copies of the additional insured endorsement
and/or a certificate of insurance evidencing compliance with this requirement.

11.   PROTECTION OF PROPRIETARY RIGHTS

      11.1  Microsoft Intellectual Property. In the event Licensee learns of any
infringement or imitation of the Licensed Trademarks,  the Software Title or the
Finished Product Units, or the proprietary  rights in or related to any of them,
it will promptly notify Microsoft  thereof  Microsoft may take such action as it
deems  advisable  for the  protection  of its rights in and to such  proprietary
rights,  and  Licensee  shall,  if  requested  by  Microsoft,  cooperate  in all
reasonable respects therein at Microsoft's expense. In no event, however,  shall
Microsoft  be required to take any action if it deems it  inadvisable  to do so.
Microsoft  will have the right to retain all  proceeds  it may  derive  from any
recovery in connection with such actions.

      11.2  Licensee  Intellectual  Property.   Licensee,  without  the  express
written permission of Microsoft,  may bring any action or proceeding relating to
this  infringement or potential  infringement,  to the extent such  infringement
involves any  proprietary  rights of Licensee  (provided  that Licensee will not
have the right to bring  any such  action or  proceeding  involving  Microsoft's
intellectual  property).  Licensee  shall  make  reasonable  efforts  to  inform
Microsoft  regarding  such actions in a timely  manner.  Licensee  will have the
right to retain all proceeds it may derive from any recovery in connection  with
such actions.  Licensee  agrees to use all  commercially  reasonable  efforts to
protect and enforce its proprietary rights in the Software Title.

      11.3  Joint  Actions.  Licensee and Microsoft may agree to jointly  pursue
cases of  infringement  involving the Software  Titles (since such products will
contain  intellectual  property  owned  by each of  them).  Unless  the  parties
otherwise agree, or unless the recovery is expressly  allocated  between them by
the court (in which case the terms of Sections 11.1 and 11.2 will apply), in the
event Licensee and Microsoft  jointly  prosecute an  infringement  lawsuit under
this  provision,  any  recovery  shall be used first to  reimburse  Licensee and
Microsoft for their  respective  reasonable  attorneys'  fees and expenses,  pro
rota,  and any remaining  recovery shall also be given to Licensee and Microsoft
pro rata based upon the fees and expenses incurred in bringing such action.


                                       13
<PAGE>


12.   GENERAL

      12.1  Governing  Law;  Venue;  Attorneys  Fees.  This  Agreement  shall be
construed and  controlled by the laws of the State of  Washington,  U.S.A.,  and
Licensee  consents to  exclusive  jurisdiction  and venue in the federal  courts
sifting in King  County,  Washington,  U.S.A.,  unless no  federal  jurisdiction
exists, in which case Licensee  consents to exclusive  jurisdiction and venue in
the  Superior  Court of King  County,  Washington,  U.S.A.  Licensee  waives all
defenses of lack of personal jurisdiction and forum non conveniens.  Process may
be served on either party in the manner  authorized by  applicable  law or court
rule. If either party employs  attorneys to enforce any rights arising out of or
relating to this  Agreement,  the prevailing  party shall be entitled to recover
its  reasonable  attorneys'  fees,  costs and  other  expenses.  This  choice of
jurisdiction provision does not prevent Microsoft from seeking injunctive relief
with respect to a violation of intellectual  property rights or  confidentiality
obligations in any appropriate jurisdiction.

      12.2  Notices;  Requests. All notices and requests in connection with this
Agreement shall be deemed given as of the day they are (i) deposited in the U.S.
mails, postage prepaid,  certified or registered,  return receipt requested;  or
(ii) sent by overnight  courier,  charges  prepaid,  with a confirming  fax; and
addressed as follows:

      Licensee:  Conspiracy Entertainment Corp.
                 604 Santa Monica Blvd.
                 Santa Monica, CA 90401
      Attention: Sirus Ahmadi
      Fax:       (310) 260-6170
      Phone:     (310) 260-6150

      Microsoft: MICROSOFT CORPORATION
                 One Microsoft Way
                 Redmond, WA 98052-6399
      Attention: Xbox business Development
      with a cc to: MICROSOFT CORPORATION
                    One Microsoft Way
                    Redmond, WA 98052-6399
      Attention:    Law & Corporate Affairs Department
                    Product Development & Marketing
      Fax:          (425) 936-7329

or to such  other  address  as the party to  receive  the  notice or  request so
designates by written notice to the other.

      12.3  Assignment.  Licensee  may not assign this  Agreement or any portion
thereof,  to any  third  party  unless  Microsoft  expressly  consents  to  such
assignment in writing.  Microsoft  will have the right to assign this  Agreement
and/or any portion thereof as Microsoft may deem  appropriate.  For the purposes
of this Agreement, a merger,  consolidation,  or other corporate reorganization,
or a transfer or sale of a controlling interest in a party's stock, or of all or
substantially  all of its  assets  shall be  deemed  to be an  assignment.  This
Agreement  will inure to the benefit of and be binding upon the  parties,  their
successors, administrators, heirs, and permitted assigns.


                                       14
<PAGE>


      12.4  No  Partnership.  Microsoft and Licensee are entering into a license
pursuant to this Agreement and nothing in this  Agreement  shall be construed as
creating an employer-employee  relationship,  a partnership,  or a joint venture
between the parties.

      12.5  Severability.  In the event that any provision of this  Agreement is
found  invalid or  unenforceable  pursuant to judicial  decree or decision,  the
remainder of this Agreement shall remain valid and enforceable  according to its
terms.  The parties  intend that the provisions of this Agreement be enforced to
the fullest extent permitted by applicable law.  Accordingly,  the parties agree
that if any provisions are deemed not enforceable, they shall be deemed modified
to the extent necessary to make them enforceable.

      12.6  Injunctive Relief.  The parties agree that Licensee's  threatened or
actual  unauthorized use of the Licensed Trademarks whether in whole or in part,
may result in immediate and  irreparable  damage to Microsoft for which there is
no adequate  remedy at law, and that either party's  threatened or actual breach
of the  confidentiality  provisions  may cause like  damage to the  nonbreaching
party, and in such event the nonbreaching party shall be entitled to appropriate
injunctive relief, without the necessity of posting bond or other security.

      12.7  Entire Agreement;  Modification;  No Offer. The parties hereto agree
that  this  Agreement   (including  all  Exhibits  hereto,   and  the  Microsoft
Non-Disclosure  Agreement to the extent incorporated  herein) and the Xbox Guide
(as applicable from time to time)  constitute the entire  agreement  between the
parties  with  respect  to the  subject  matter  hereof and merges all prior and
contemporaneous  communications.  It shall not be  modified  except by a written
agreement dated subsequent  hereto signed on behalf of Licensee and Microsoft by
their duly authorized representatives. Neither this Agreement nor any written or
oral statements related hereto constitute an offer, and this Agreement shall not
be legally binding until executed by both parties hereto.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date on the dates indicated below.

MICROSOFT CORPORATION                         CONSPIRACY ENTERTAINMENT CORP.


By:  /s/ J. Allard                            By:  /s/ Sirus Ahmadi
  -------------------------                     --------------------------------
Name: J. Allard                                 Name: Sirus Ahmadi
Title: General Manager                          Title: President and CEO
Date: October 18, 2000                          Date: October 2, 2000



                                       15
<PAGE>


                                   EXHIBIT A-1
                          DESCRIPTION OF SOFTWARE TITLE









                                      A-1

<PAGE>


                                    EXHIBIT B
                               LICENSED TRADEMARKS

                            [insert Xbox design here]








                                      B-1


<PAGE>


                                    EXHIBIT C
                             BRANDING SPECIFICATIONS

The following  guidelines apply whenever  Licensee places a copy of any Licensed
Trademark on the Software Title, or related collateral materials.

o     Licensee  may  use the  Licensed  Trademarks  solely  on the  retail  box,
      documentation,  and Art & Marketing  Materials for the Software Title, and
      in no other manner.

o     Licensee's name, logo, or trademark must appear on any materials where the
      Licensed  Trademarks  are used, and must be larger and more prominent than
      the Licensed Trademarks.

o     The Licensed  Trademarks  may not be used in any manner that  expresses or
      might   imply   Microsoft's   affiliation,    sponsorship,    endorsement,
      certification, or approval, other than as contemplated by this Agreement

o     The Licensed  Trademarks  may not be included in any  non-Microsoft  trade
      name,  business name,  domain name,  product or service name,  logo, trade
      dress, design, slogan, or other trademark.

o     Licensee  may use the  Licensed  Trademarks  only as provided by Microsoft
      electronically  or in hard  copy  form.  Except  for size  subject  to the
      restrictions  herein,  the Licensed  Trademarks  may not be altered in any
      manner,  including  proportions,  colors,  elements,  etc.,  or  animated,
      morphed, or otherwise distorted in perspective or dimensional appearance.

o     The  Licensed  Trademarks  may not be  combined  with any  other  symbols,
      including words,  logos, icons,  graphics,  photos,  slogans,  numbers, or
      other design elements.

o     The Licensed  Trademarks  (including but not limited to Microsoft's logos,
      logotypes,  trade dress,  and other elements of product  packaging and web
      sites) may not be imitated.

o     The  Licensed  Trademarks  may  not be  used as a  design  feature  in any
      materials.

o     The Licensed  Trademarks must stand alone. A minimum amount of empty space
      must surround the Licensed Trademarks separating it from any other object,
      such as type, photography, borders, edges, and so on. The required area of
      empty space around the Licensed  Trademarks  must be 1/2x,  where x equals
      the height of the Licensed Trademarks.

o     Each use of the Licensed  Trademarks  must include the notice:  "Xbox is a
      trademark  of  Microsoft  Corporation  in the United  States  and/or other
      countries and is used under license from Microsoft".

Additional guidelines for proper use of the "Xbox" word mark:

o     Use the  trademark  symbol  (""") at the upper  right  corner or  baseline
      immediately  following the name "Xbox".  This symbol should be used at the
      first or most prominent mention. Please be sure to spell Xbox as one word,
      with no hyphen and with no space between "X" and "box".

o     Include the following notice on materials referencing )(box:

o     "Xbox is a trademark of Microsoft Corporation."

o     Trademarks  identify a company's goods or services.  Xbox is not a generic
      thing, but rather a brand of game system from Microsoft.  A trademark is a
      proper adjective that modifies the generic name or descriptor of a product
      or service.  The descriptor for Xbox is "game system," i.e.,  "XboxTm game
      system."  Use the  descriptor  immediately  after  mention of "Xbox".  You
      should not combine the Xbox  trademark  with an improper  generic  name or
      descriptor.  For example,  game programs  designed to run on the Xbox game
      system are not "Xbox  games,"  but rather  "games for the Xbox  system" or
      "Xbox certified games."

o     The Xbox trademark may never be  abbreviated.  Do not use "X" by itself to
      represent "Xbox."


                                      C-1

<PAGE>


                                    EXHIBIT D
                            NON-DISCLOSURE AGREEMENT








                                      D-1