<PAGE>

                                           
                                           
                          SECURITIES AND EXCHANGE COMMISSION
                                           
                              WASHINGTON, D.C.     20549
                                           
                              --------------------------
                                           
                                           
                                       FORM 8-K
                                           
                                   CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF THE 
                           SECURITIES EXCHANGE ACT OF 1934
                                           
Date of report (Date of earliest event reported)  December 5, 1997 
                                                  (November 26, 1997)
                                                  -----------------------------
                                           
                                           
                                   ACTIVISION, INC.
- --------------------------------------------------------------------------------
                  (Exact name of registrant as specified in charter)
                                           
                                           
    Delaware                        0-12699               94-2606438
- --------------------------------------------------------------------------------
(State or Other Jurisdiction       (Commission            (IRS Employer
     of Incorporation)             File Number)          Identification No.)


    3100 Ocean Park Blvd., Santa Monica, CA       90405
- --------------------------------------------------------------------------------
    (Address of Principal Executive Offices)    (Zip Code)


         Registrant's telephone number, including area code  (310) 255-2000
                                                              --------------

- --------------------------------------------------------------------------------
            (Former Name or Former Address, if Changed Since Last Report)


<PAGE>


ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS.

    (a)  ACQUISITION OF COMBINED DISTRIBUTION (HOLDINGS) LIMITED.  On November
26, 1997, Activision, Inc. ("Activision" or the "Company") completed the
acquisition of Combined Distribution (Holdings) Limited, a privately held
company based in Birmingham, England, which is the parent company of CentreSoft
Limited and PDQ Limited ("CentreSoft").  CentreSoft is engaged in the business
of distributing software products in the United Kingdom and, to a lesser extent,
continental Europe.  

    The transaction was structured as a share exchange in which the Company
issued 2,787,043 shares of its common stock, $0.000001 par value (the "Common
Stock"), for all the outstanding capital stock of CentreSoft.  The Common Stock
issued by the Company in the transaction had a market value at the time of the
closing of the transaction of approximately $44 million.  In addition, an option
to acquire shares of CentreSoft was canceled and in exchange for the
cancellation the holder of the option was granted an option to purchase 50,325
shares of Common Stock.  The transaction will be accounted for as a pooling of
interests.
    
    The shares of Common Stock were issued to the holders of CentreSoft capital
pursuant to an exemption from registration under the Securities Act of 1933, as
amended (the "Securities Act").  The Company is required to use its best
endeavors to file with the Securities and Exchange Commission on or before
January 5, 1998 a registration statement covering such shares for resale by the
holders.  The CentreSoft stockholders have agreed, however, not to sell or
otherwise dispose of any of the Common Stock received by them in the transaction
until after the issuance by Activision of its first earnings press release
including at least 30 days of combined operations.  The Company anticipates that
this earnings release will be issued in the fourth week of January, 1998.

    The following pro forma results of operations assume that the CentreSoft
transaction had occurred as of April 1,1996.  The Company anticipates filing an
amendment to this report within 30 days which will contain the audited
consolidated financial statements of CentreSoft and the unaudited pro forma
condensed combined financial statements of the Company and CentreSoft.


                                               Year             Six Months 
                                               ended          ended Sept. 30,
                                              March 31,      ------------------
                                               1997            1996       1997
                                             ---------      ---------   -------
            Net revenues                    $ 154,644     $   36,561  $  79,529
                                             ---------      ---------   -------
                                             ---------      ---------   -------
            Net income (loss)               $   9,226     $   (1,210) $  (3,576)
                                             ---------      ---------   -------
                                             ---------      ---------   -------
            Net income (loss) per share     $    0.50     $    (0.07) $  (0.19)
                                             ---------      ---------   -------
                                             ---------      ---------   -------

    (b)  ACQUISITION OF NBG EDV HANDELS & VERLAGS GMBH.  Also on November 26,
1997, a wholly-owned indirect German subsidiary of the Company acquired NBG EDV
Handels- und Verlags GmbH ("NBG"), a privately held software distributor and
publisher based in Burglengenfeld, Germany, and Target Software Vertriebs GmbH
("Target"), a small affiliated software retailer.  The transaction was
structured as a share for share exchange in which the Company issued 263,048
shares of Common Stock to the two holders of capital stock in NBG and Target in
exchange for their equity interests in these companies.  At the time of the
closing of the transaction, the Common Stock issued by the Company had a market
value of approximately $4.4 million.  In addition, as part of the transaction, a
wholly owned indirect German subsidiary of Activision acquired the real property
(including land and buildings) used by NBG and Target that was owned by the two
equity owners of NBG and Target, in exchange for the assumption by such
subsidiary of certain debt secured by a mortgage on the property.  The total
debt on the property was approximately DM1,250,000 (approximately $725,000). 
Approximately DM650,000 (approximately $377,000) of this debt is guaranteed by a
German government entity that assists small businesses and will therefore be
required to be repaid by the Company in the near future.  The transaction will
be accounted for as a pooling of interests.
    
    The shares of Common Stock were issued to the holders of NBG and Target 
capital stock pursuant to an exemption from registration under the Securities 
Act.  The Company is required to use its best efforts to file with the 
Securities and Exchange Commission within 60 days after the closing of the 
transaction, a registration statement covering such shares for resale by the 
holders.  The NBG and Target stockholders also have agreed, however, not to 
sell or otherwise dispose of any of the Common Stock received by them in the 
transaction until after the issuance by Activision of its first earnings 
press release including at least 30 days of combined operations.  The Company 
anticipates that this earnings release will be issued in the fourth week of 
January, 1998.


<PAGE>



ITEM 5.  OTHER EVENTS.

    Activision announced on December 5, 1997 that it intends to make a private
offering of $75,000,000 in Convertible Subordinated Notes (and up to an
additional $25,000,000 in Notes to cover over-allotments).  The Notes will bear
interest at a rate which is yet to be determined, and will be due approximately
seven years after issuance.  The Notes also will be convertible, in whole or in
part, at the option of the holder at any time after 60 days following the latest
date of original issuance of the Notes and prior to the close of business on the
business day immediately preceding the maturity date, unless previously redeemed
or repurchased into shares of Common Stock.  The Notes will be redeemable, in
whole or in part, at the option of the Company at any time approximately three
years after issuance.

    The Notes will be offered to a limited number of purchasers pursuant to a
Rule 144A placement.  The net proceeds of the offering are expected to be used
to finance its product development and product acquisition efforts, support its
corporate acquisition program and fund general corporate working capital needs.

    The Notes to be offered by Activision will not be registered under the
Securities Act and may not be offered or sold in the United States absent
registration with the Securities and Exchange Commission or the availability of
an applicable exemption from such registration requirements.


ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.

    (a)  FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

         The Company will file the financial statements required by this item
         by an amendment to this report, which the Company anticipates will be 
         filed within 30 days.

    (b)  PRO FORMA FINANCIAL INFORMATION.
    
         The Company will file the financial statements required by this item
         by an amendment to this report, which the Company anticipates will be 
         filed within 30 days.

    (c) EXHIBITS.

         10.1 Share Exchange Agreement dated November 23, 1997, among
              Activision, Close Securities Limited, Andrew R. Waterhouse, David
              Neal, Gary C. Hawkins, Norman C. Brown, Richard A. Steele,  Roger
              G. Swindells, Steven G. Varnish and Simon A. Hunt.
    
         10.2 Share Exchange Agreement dated November 26, 1997, among
              Activision, Kappaphoenicis Beteiligungs GmbH, Detlef Erhardt and
              Ingrid Herrmann.



                                      SIGNATURES
                                           
    Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:    December 5, 1997

                                  ACTIVISION, INC.    


                                  By  /s/  Barry Plaga
                                     ----------------------------
                                       Name:  Barry J. Plaga
                                       Title: Senior Vice President and
                                              Chief Financial Officer





<PAGE>

                                      AGREEMENT

             for the exchange of the whole of the issued share capital of
                Combined Distribution (Holdings) Limited for stock in
                                   Activision Inc.


(1) The persons listed in Schedule 1

(2) Activision, Inc.








Dated 23 November 1997











LONDON OFFICE
Hillgate House, 26 Old Bailey, London EC4M 7HS
Telephone  0171 600 0155  Facsimile  0171 248 9934


<PAGE>

                                    CONTENTS

    1. Definitions and interpretation. . . . . . . . . . . . . . . . . . . .1
    2. Conditions to Completion. . . . . . . . . . . . . . . . . . . . . . 15
    3. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . 18
    4. Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
    5. The Stock and Option Retention. . . . . . . . . . . . . . . . . . . 19
    6. Pre-Completion obligations. . . . . . . . . . . . . . . . . . . . . 20
    7. Completion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
    8. Restriction on Sale of the Consideration Stock and Option Stock . . 25
    9. Registration of the Consideration Stock and Option Stock. . . . . . 26
    10. Release of guarantees. . . . . . . . . . . . . . . . . . . . . . . 28
    11. Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
    12. Warrantors' remedies . . . . . . . . . . . . . . . . . . . . . . . 29
    13. Activision's remedies. . . . . . . . . . . . . . . . . . . . . . . 29
    14. Limitations on liability . . . . . . . . . . . . . . . . . . . . . 31
    15. Conduct of claims. . . . . . . . . . . . . . . . . . . . . . . . . 34
    16. Intentionally Deleted. . . . . . . . . . . . . . . . . . . . . . . 35
    17. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
    18. Announcements. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
    19. Costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . 38
    20. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
    21. Governing law and jurisdiction . . . . . . . . . . . . . . . . . . 39
Schedule 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Part I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(Allocation of Consideration Stock). . . . . . . . . . . . . . . . . . . . 41
Schedule 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(The Shareholders) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Schedule 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(Information concerning the Company) . . . . . . . . . . . . . . . . . . . 46
Schedule 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
(Information concerning the Subsidiaries). . . . . . . . . . . . . . . . . 49
Schedule 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(Warranties) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
    1. CAPACITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
    2.
 OWNERSHIP OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . 54
    3. ARRANGEMENTS BETWEEN GROUP COMPANIES AND WARRANTOR. . . . . . . . . 54
    4. COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
    5. SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
    6. INSOLVENCY OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . 56
    7. STATUTORY BOOKS AND DOCUMENTS FILED . . . . . . . . . . . . . . . . 56
    8. ACCURACY AND ADEQUACY OF INFORMATION. . . . . . . . . . . . . . . . 57
    9. PREPARATION AND CONTENTS OF THE ACCOUNTS. . . . . . . . . . . . . . 57
    10. ACCOUNTING RECORDS . . . . . . . . . . . . . . . . . . . . . . . . 59


                                          2

<PAGE>

    11. MANAGEMENT ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . 59
    12. EVENTS SINCE THE ACCOUNTS DATE . . . . . . . . . . . . . . . . . . 59
    13. FINANCIAL COMMITMENTS AND BORROWINGS . . . . . . . . . . . . . . . 61
    14. WORKING CAPITAL. . . . . . . . . . . . . . . . . . . . . . . . . . 62
    15. INSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
    16. CONTRACTS AND COMMITMENTS. . . . . . . . . . . . . . . . . . . . . 62
    17. TERMS OF TRADE . . . . . . . . . . . . . . . . . . . . . . . . . . 63
    18. PRODUCT LIABILITY AND YEAR 2000. . . . . . . . . . . . . . . . . . 63
    19. LICENCES AND CONSENTS. . . . . . . . . . . . . . . . . . . . . . . 64
    20. TRADING PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . 64
    21. COMPETITION AND TRADE REGULATION LAW . . . . . . . . . . . . . . . 64
    22. COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . . . . . . 65
    23. LITIGATION AND DISPUTES. . . . . . . . . . . . . . . . . . . . . . 66
    24. OWNERSHIP AND CONDITION OF ASSETS. . . . . . . . . . . . . . . . . 66
    25. STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
    26. CHARGES AND ENCUMBRANCES OVER ASSETS . . . . . . . . . . . . . . . 67
    27. INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . 67
    28. DIRECTORS AND EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . 69
    29. INDUSTRIAL RELATIONS . . . . . . . . . . . . . . . . . . . . . . . 71
    30. PENSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
    31. TITLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
    32. ENCUMBRANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
    33. PLANNING MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . 74
    34. STATUTORY OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . 75
    35. ADVERSE ORDERS . . . . . . . . . . . . . . . . . . . . . . . . . . 75
    36. CONDITION OF THE PROPERTIES. . . . . . . . . . . . . . . . . . . . 75
    37. LEASEHOLD PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . 76
    38. TENANCIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
    39. CONTAMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 77
    40. OTHER ENVIRONMENTAL MATTERS. . . . . . . . . . . . . . . . . . . . 77
    41. EVENTS SINCE THE ACCOUNTS DATE . . . . . . . . . . . . . . . . . . 77
    42. LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
    43. RECORDS AND COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . 78
    44. VAT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
    45. BALANCE SHEET VALUES . . . . . . . . . . . . . . . . . . . . . . . 81
    46. CLOSE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . 81
    47. GROUP TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . 81
    48. CAPITAL GAINS. . . . . . . . . . . . . . . . . . . . . . . . . . . 81
    49. DEDUCTIBLE EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . 82
    50. DIVIDENDS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . 82
    51. INHERITANCE TAX AND GIFTS. . . . . . . . . . . . . . . . . . . . . 82
    52. ANTI-AVOIDANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 82
    53. OVERSEAS MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . 83
    54. CAPACITY OF ACTIVISION . . . . . . . . . . . . . . . . . . . . . . 83


                                          3

<PAGE>

    55. DUE ORGANISATION OF ACTIVISION . . . . . . . . . . . . . . . . . . 83
    56. DUE AUTHORISATION OF CONSIDERATION STOCK . . . . . . . . . . . . . 83
    57. SEC DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 83
    58. MATERIAL ADVERSE CHANGE. . . . . . . . . . . . . . . . . . . . . . 84
Schedule 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
(Particulars of the Properties). . . . . . . . . . . . . . . . . . . . . . 85
    1.Freehold properties. . . . . . . . . . . . . . . . . . . . . . . . . 85
    2.Leasehold properties.. . . . . . . . . . . . . . . . . . . . . . . . 85
    3.Particulars of the Tenancies.. . . . . . . . . . . . . . . . . . . . 85
Schedule 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Dividend Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

                                          4

<PAGE>

THIS AGREEMENT is made the 24 day of November 1997

BETWEEN:

(1)  THE PERSONS whose names and addresses are set out in Part II of 
     Schedule 1; and

(2)  ACTIVISION, INC., a Delaware corporation whose main office is at 3100
     Ocean Park Boulevard, Santa Monica, CA 90405, USA ("ACTIVISION")

BACKGROUND:

The Shareholders have agreed with Activision to exchange the Company Shares (as
defined below) for the Consideration Stock (as defined below) on the terms of
this Agreement and Hunt (as defined below) has agreed with Activision to
terminate the Share Option (as defined below) in exchange for the Hunt Options
(as defined below).

IT IS AGREED as follows:

1.   Definitions and interpretation

1.1  In this Agreement, unless the context otherwise requires, the 
     following words have the following meanings:

     "THE ACCOUNTS"                the audited balance sheet as at
                                   the Accounts Date and the audited
                                   profit and loss account for the
                                   fiscal year ended on the Accounts
                                   Date of each Group Company, including
                                   all documents required by law to be
                                   annexed to them and, in the case of
                                   the Company, the audited consolidated
                                   balance sheet as at that date and
                                   the audited consolidated profit and
                                   loss account for that year;

     "THE ACCOUNTS DATE"           30 April 1997;

     "ACTIVISION WARRANTIES"       the representations referred to in
                                   clause 11.2 and set out in Part II
                                   of Schedule 4 and "Activision
                                   Warranty" means any one of them;

     "THIS AGREEMENT"              this Agreement (including any
                                   schedule or annexure to it and any
                                   document in agreed form);


                                          1

<PAGE>

     ""A" ORDINARY SHARES"         47,059 "A" ordinary shares of 1p
                                   each in the capital of the Company
                                   in issue at the date of this
                                   Agreement and at Completion;

     "THE ARTICLES"                the Articles of Association of the
                                   Company for the time being;


     "THE BOARD"                   in relation to each Group Company,
                                   its board of directors;

     "B" ORDINARY SHARES"          19,608 "B" ordinary shares of 1p
                                   each in the capital of the Company
                                   in issue at the date of this
                                   Agreement and at Completion;

     "BUSINESS DAY"                a day (other than a Saturday or a
                                   Sunday) on which clearing banks are
                                   open for business in the City of
                                   London;

     "CHANGE OF CONTROL"           that control of the Company (as
                                   control is defined in S.416 ICTA
                                   1988) is transferred to Activision;

     "CLAIM"                       a claim by Activision against all
                                   or any of the Warrantors in
                                   connection with the Surviving
                                   Shareholders' Warranties;

     "CODE"                        the United States Internal Revenue
                                   Code of 1986, as amended, and the
                                   regulations thereunder;

     "THE COMPANY"                 Combined Distribution (Holdings)
                                   Limited, details of which are set
                                   out in Schedule 2;

     "COMPANY SHARES"              the Ordinary Shares, "A" Ordinary
                                   Shares, "B" Ordinary Shares,
                                   Convertible Preference Shares,
                                   Redeemable Preference Shares and
                                   Loan Stock in issue at Completion
                                   as set out in Schedule 2;


                                          2

<PAGE>

     "COMPLETION"                  the completion of the exchange of
                                   the Company Shares for the
                                   Consideration Stock and the
                                   termination of the Share Option in
                                   exchange for the granting by
                                   Activision of the Hunt Options under
                                   this Agreement;

     "COMPUTER PROGRAMS"           all or any part of a set of
                                   instructions whose purpose is to
                                   cause a data processing machine
                                   to perform certain functions or
                                   operations whatever the form of the
                                   program (whether in source code or
                                   in human-readable form, or object
                                   code or machine-readable form, and
                                   whether or not compiled or assembled);

     "THE CONSIDERATION"           the consideration payable by Activision
                                   to the Shareholders for the Company
                                   Shares and to Hunt for the Share Option
                                   under clause 4;

     "THE CONSIDERATION STOCK"     new common stock par value $0.000001 per
                                   share of Activision calculated in
                                   accordance with Clause 4 and as set out
                                   in Schedule 1;

     THE "CONTRACTORS"             Eidos, Sony, Hasbro, Virgin Interactive,
                                   Ocean, Interplay, Bizarre Love Triangle,
                                   Mindscape, The Mousepad Company and
                                   Soldout Limited;

     "CONVERTIBLE PREFERENCE       133,333 convertible preference
     SHARES"                       shares of L1 each in the capital of
                                   the Company in issue at the date of
                                   this Agreement and at Completion;


                                          3

<PAGE>

     "COPYRIGHT"                   all copyright arising under English
                                   law (whether under the Copyright
                                   Designs and Patents Act 1988 or
                                   otherwise) in all original works,
                                   Computer Programs (in whatever
                                   form), customer lists, databases
                                   and any other work in which
                                   copyright subsists, together with
                                   all copyrights and/or rights of
                                   like nature arising (whether by
                                   operation of law, registration or
                                   otherwise) in any other part of the
                                   world; and the right to apply for
                                   the same and the benefit of any and
                                   all licences in connection with the
                                   foregoing;

     "DANGEROUS SUBSTANCE"         (whether in the form of a solid,
                                   liquid, gas or vapour) the
                                   generation, transportation,
                                   storage, treatment, use or disposal
                                   of which (whether alone or in
                                   combination with any other
                                   substance) gives rise to a risk of
                                   causing harm to human health,
                                   comfort or safety or harm to any
                                   other living organism or causing
                                   damage to the Environment;

     "THE DISCLOSURE LETTER"       the letter of the same date as this
                                   Agreement in the agreed form from
                                   the Warrantors or their solicitors
                                   to Activision or its solicitors,
                                   together with all attachments and
                                   which disclose matters that are
                                   exceptions to the Shareholders
                                   Warranties;

     "DIVIDENDS"                   the dividends or interest with
                                   respect to the Company Shares
                                   payable on 30 November 1997 as
                                   detailed in Schedule 6;


                                          4

<PAGE>

     "DOCUMENTATION"               all user manuals and other
                                   materials which accompany any unit
                                   of Software made generally
                                   commercially available and all
                                   other technical, reference and/or
                                   other manuals or documentation,
                                   whether intended for internal or
                                   external use in relation to any
                                   Software;

     "EMPLOYEE SHAREHOLDERS"       the persons whose names and
                                   addresses are set out in Part IIB
                                   of Schedule 1;

     "THE ENVIRONMENT"             the environment as defined in
                                   Section 1(2), Environmental
                                   Protection Act 1990;

     "ENVIRONMENTAL                any permit, exemption, filing
     CONSENT"                      requirement, licence or
                                   registration from time to time
                                   necessary or desirable under
                                   Environmental Law;

     "ENVIRONMENTAL LAW"           any directive, treaty, code of
                                   practice, circular, guidance note
                                   and the like, in each case of any
                                   jurisdiction, in force or enacted
                                   relating or pertaining to the
                                   Environment, any Dangerous
                                   Substance, human health, comfort,
                                   safety or the welfare of any other
                                   living organism;

     "ESCROW AGENT"                City National Bank, a national bank
                                   organised under the laws of the
                                   United States with offices in
                                   Beverly Hills, California, USA;

     "ESCROW AGREEMENT"            the agreement in the agreed form
                                   between (1) Activision, (2) the
                                   Warrantors and (3) the Escrow
                                   Agent;

     "THE GROUP                    the Company and any Subsidiary of
     COMPANIES"                    the Company (details of which are
                                   set out in Schedule 3) (together
                                   "THE GROUP") and "GROUP COMPANY"
                                   means any of them;

     "GUARANTEE"                   any guarantee, suretyship,
                                   indemnity, bonding liability or
                                   similar contingent liability;


                                          5

<PAGE>

     "HUNT"                        the person whose name and address
                                   is set out in Part IIC of Schedule
                                   1;

     "HUNT CONSULTANCY             the Agreement made between the
     AGREEMENT"                    Company and Carmel Industrial
                                   Securities Limited dated 28 June
                                   1996;

     "THE HUNT OPTION              the stock option agreements in the
     AGREEMENTS"                   agreed form between (1) Activision
                                   and (2) Hunt;

     "HUNT OPTIONS"                the options created by the Hunt
                                   Option Agreements;

     "ICTA"                        the Income and Corporation Taxes
                                   Act 1988;

     "INTELLECTUAL PROPERTY"       all Patents, Copyrights, Marks,
                                   Know How and Other IPR's;

     "INVESTOR SHAREHOLDER"        the person whose name and address
                                   is set out in Part IIA of Schedule
                                   1;

     "KNOW-HOW"                    all rights anywhere in the world in
                                   and to all industrial and
                                   commercial trade secrets and
                                   confidential and secret research,
                                   development, design, inventions,
                                   ideas, information, data, skills,
                                   products, processes, drawings,
                                   logos and specifications;

     "LIABILITY TO TAXATION"       (i) any liability of a Group
                                   Company to make actual payments of
                                   Taxation regardless of whether such
                                   Taxation is chargeable or
                                   attributable directly or primarily
                                   to a Group Company or to any other
                                   person;


                                          6

<PAGE>

                                   (ii) the loss of any Relief which
                                   would (were it not for the loss)
                                   have been available to any Group
                                   Company and which has been treated
                                   as an asset in preparing the
                                   Accounts or taken into account in
                                   computing (and so reducing) any
                                   provision for Taxation (including
                                   deferred taxation) which appears in
                                   the Accounts (or which, but for the
                                   availability or presumed
                                   availability of such Relief prior
                                   to its loss would have appeared in
                                   the Accounts); and

                                   (iii) the setting off against any
                                   liability to Taxation or against
                                   Profits earned, accrued or received
                                   on or before Completion of any
                                   Relief which arises in respect of
                                   any Transaction effected on or
                                   after Completion in circumstances
                                   where, but for the setting off, any
                                   Group Company would have had an
                                   actual liability to Taxation;

     "LOAN STOCK"                  L2,000,000 Secured Subordinated
                                   Loan Stock 1998-2000 of the Company
                                   constituted by a deed dated 28 June
                                   1996 (THE "LOAN STOCK DEED");

     "MANAGEMENT ACCOUNTS"         the unaudited consolidated
                                   management accounts of the Group
                                   for the period from 1 May 1997 to
                                   the Management Accounts Date
                                   (comprising a consolidated balance
                                   sheet, trading account and profit
                                   and loss account for the Group) and
                                   all notes, reports, statements and
                                   documents annexed or attached
                                   thereto;

     "MANAGEMENT ACCOUNTS DATE"    31 October 1997;


                                          7

<PAGE>

     "MARKS"                       all trade marks, servicemarks and
                                   logos whether registered in the UK
                                   or unregistered (including
                                   applications for registration
                                   thereof) together with all rights
                                   of like nature arising (whether by
                                   operation of law, registration or
                                   otherwise) out of the same in any
                                   part of the world and the rights to
                                   apply for the same and the benefit
                                   of any and all licences in
                                   connection with the foregoing;

     "MODIFICATION"                in relation to any Computer Program
                                   and/or Documentation, includes any
                                   translation (whether into another
                                   computer and/or national language),
                                   adaptation, enhancement,
                                   modification, variation, bug-fix
                                   and error correction, howsoever, by
                                   whomsoever and for whomsoever made;

     "NASDAQ"                      The NASDAQ National Market,
                                   maintained by the NASDAQ Stock
                                   Market, Inc.;

     "OPTION STOCK"                the shares of Activision common
                                   stock issued or issuable on
                                   exercise of the Hunt Options;

     "ORDINARY SHARES"             the 100,000 ordinary shares of 1p
                                   each in the capital of the Company
                                   in issue at the date of this
                                   Agreement and at Completion;


                                          8

<PAGE>

     "OTHER IPR'S"                 all designs (registered or
                                   unregistered), utility models and
                                   all other intellectual or
                                   industrial property rights
                                   (including without limitation as to
                                   secrecy or confidence) arising
                                   (whether by operation of law,
                                   registration or otherwise) under
                                   English law or in any other part of
                                   the world to the extent that the
                                   same are not otherwise included
                                   within the definitions of
                                   Copyright, Marks, Patents and Know
                                   How and the right to apply for the
                                   same and the benefit of any and all
                                   licences in connection with the
                                   foregoing;
     "PATENTS"                     letters patent and the right to
                                   apply for letters patent in any
                                   part of the world and any similar
                                   rights situated in any country; and
                                   the benefit of any and all licences
                                   in connection with the foregoing;

     "THE PENSION SCHEMES"         the Company's pension schemes being
                                   The Standard Life Group Personal
                                   Pension Plan implemented on 1 July
                                   1996 and Stanplan A for the Company
                                   commenced on 27 November 1996;

     "THE POLICIES"                all insurance policies in relation
                                   to which any Group Company has any
                                   interest and "POLICY" means any of
                                   them;

     "PROFITS"                     income, profits and gains, the
                                   value of any supply and any other
                                   consideration, value or receipt
                                   used or charged for Taxation
                                   purposes and references to "PROFITS
                                   EARNED, ACCRUED OR RECEIVED"
                                   include Profits deemed to have been
                                   earned, accrued or received for
                                   Taxation purposes;


                                          9

<PAGE>

     "THE PROPERTIES"              the leasehold properties
                                   particulars of which are set out in
                                   Schedule 5 and "THE PROPERTY" means
                                   any of them;

     "REDEEMABLE PREFERENCE        800,000 redeemable preference
     SHARES"                       shares of 10p each in the capital
                                   of the Company in issue at the date
                                   of this Agreement and at
                                   Completion;

     "RELEVANT CLAIM OR            any claim or surrender to or by any
     SURRENDER"                    Group Company of:

                                   group relief under Chapter IV, Part
                                   X, ICTA;

                                   advance corporation tax under
                                   Section 240, ICTA; or

                                   a tax refund under Section 102,
                                   Finance Act 1989;

     "RELIEF"                      any loss, relief, allowance,
                                   exemption, set-off, deduction,
                                   credit or right to repayment of
                                   Taxation and references to the
                                   "LOSS OF ANY RELIEF" include the
                                   loss, reduction, counteraction,
                                   disallowance, setting-off against
                                   Profits, crediting against a
                                   liability to make an actual payment
                                   of Taxation or failure to obtain a
                                   Relief and "LOSE" and "LOST" shall
                                   be construed accordingly;

     "RESTRICTIVE COVENANT         deeds in the agreed form between
     DEEDS"                        Activision (1) and each of the
                                   Employee Shareholders (2)
                                   containing certain restrictive
                                   covenants to be entered into at
                                   Completion;

     "SEC"                         the United States Securities and
                                   Exchange Commission;

     "SERVICE AGREEMENTS"          agreements in the agreed form
                                   between the Company and each of the
                                   Employee Shareholders to be entered
                                   into at Completion;


                                          10

<PAGE>

     "SHAREHOLDERS"                the Employee Shareholders and the
                                   Investor Shareholder together;

     "THE SHARE OPTION"            an option to subscribe for 3,030
                                   ordinary shares of 1p each in the
                                   Company granted by the Company to
                                   Hunt under an agreement dated 28
                                   June 1996;

     "SHAREHOLDERS'                the representations referred to in
     WARRANTIES"                   clause 11.1(a) and set out in Part
                                   I of Schedule 4, and "SHAREHOLDERS'
                                   WARRANTY" means any one of them;

     "SOFTWARE"                    all or any of the Computer Programs
                                   and Documentation forming part of,
                                   and all or any Modification to:

                                   (a)  any computer software made
                                        available and/or licensed by a
                                        Group Company as at or at any time
                                        before today's date whatever
                                        version number or release;

                                   (b)  any computer software in the course
                                        (at whatever stage) of development
                                        by a Group Company, including any
                                        recorded idea for a proposed new
                                        computer software product or
                                        solution and any computer software
                                        in the course of planning,
                                        development, trialling or testing
                                        (whether alpha, beta or otherwise)
                                        or evaluation;

                                   (c)  any Computer Programs otherwise
                                        developed by a Group  Company for
                                        the Group's own business or that of
                                        any third party;


                                          11

<PAGE>

                                   (d)  any Computer Programs acquired by
                                        the Group for licensing to its
                                        customers;

     "SUBSIDIARIES"                any subsidiaries within the meaning
                                   of Sections 736 and 736A, Companies
                                   Act 1985 and any subsidiary
                                   undertakings within the meaning of
                                   Sections 258 and 259, Companies Act
                                   1985 from time to time, details of
                                   which are set out in Schedule 3,
                                   and "SUBSIDIARY" means any of them;

     "SURVIVING                    the representations and warranties
     SHAREHOLDERS'                 referred to in clause 11.1(b) and
     WARRANTIES"                   the following clauses set out in
                                   Part I of Schedule 4, namely 1, 2,
                                   3, 4, 5, 6, 7.4, 8.1, 9, 11, 13.5,
                                   13.6, 23, 24.1, 31.1, 31.2, 31.5,
                                   33.4, 34.1, 37.7, 38.1 and 41  to
                                   53, inclusive and "SURVIVING
                                   SHAREHOLDERS' WARRANTY" means any
                                   one of them;

     "TAXATION"                    all forms of taxation and
                                   statutory, governmental,
                                   supra-governmental, state,
                                   provincial, local governmental or
                                   municipal impositions, duties,
                                   contributions and levies (including
                                   withholdings and deductions),
                                   whether domestic or foreign,
                                   whenever imposed and all penalties,
                                   fines, charges, costs and interest
                                   relating to any such matters and
                                   "TAX" shall be construed
                                   accordingly;

     "TAX AUTHORITY"               any taxing or other authority, body
                                   or official competent to
                                   administer, impose or collect any
                                   Liability to Taxation;

     "TCGA"                        the Taxation of Chargeable Gains
                                   Act 1992;


                                          12

<PAGE>

     "THE TENANCIES"               any tenancies or other occupational
                                   arrangements under which the
                                   Properties are held by third
                                   parties, particulars of which are
                                   set out in Schedule 5;

     "TERMINATION DEED"            the deed in the agreed form
                                   terminating the Share Option
                                   between the Company (1) and Hunt
                                   (2);

     "TRADING DAY"                 a day on which stock in Activision
                                   can be traded on NASDAQ;

     "TRANSACTION"                 any transaction, deed, act, event,
                                   omission, payment or receipt of
                                   whatever nature and whether actual
                                   or deemed for Tax purposes;

     "UNITED KINGDOM" OR           the United Kingdom of Great Britain
     "UK"                          and Northern Ireland;

     "UNITED STATES" OR "US"       the United States of America;

     "VATA"                        the Value Added Tax Act 1994 and
                                   all other statutes, statutory
                                   instruments, regulations and
                                   notices containing provisions
                                   relating to value added tax;

     "WARRANTIES"                  the Shareholders' Warranties and/or
                                   the Activision Warranties;

     "WARRANTORS"                  the Shareholders and Hunt;

     "WARRANTORS ASSOCIATE"        each of the Warrantors and any
                                   persons connected with any of them
                                   within the meaning of Section 839,
                                   ICTA;

     "YEAR 2000 CONFORMITY"        that neither performance nor
                                   functionality is affected by dates
                                   prior to, during and after the Year
                                   2000, in particular:

                              Rule 1:   No value for current date will
                                        cause any interruption in
                                        operation;


                                          13

<PAGE>

                              Rule 2:   Date-based functionality must
                                        behave consistently for dates prior
                                        to, during and after Year 2000.

                              Rule 3:   In all interfaces and data storage,
                                        the century in any date must be
                                        specified either explicitly or by
                                        unambiguous algorithms or
                                        inferencing rules;

                              Rule 4:   Year 2000 must be recognised as a
                                        leap year;

                              (all as defined by the British Standards
                              Institution in Document DISC PD2000-1).

1.2  In this Agreement, unless the context otherwise requires:

     (a)  words in the singular include the plural and vice versa and words
          in one gender include any other gender;

     (b)  a reference to a statute or statutory provision includes:

          (i)   any subordinate legislation (as defined in Section 21(1),
                Interpretation Act 1978) made under it;

          (ii)  any repealed statute or statutory provision which it re-enacts
                (with or without modification); and

          (iii) any statute or statutory provision which modifies,
                consolidates, re-enacts or supersedes it;

     (c)  a reference to:

          (i)   any party includes its successors in title and permitted
                assigns;

          (ii)  a "PERSON" includes any individual, firm, body corporate,
                association or partnership, government or state(whether or not
                having a separate legal personality);


                                          14

<PAGE>

         (iii)   clauses and schedules are to clauses and schedules of this
                 Agreement and references to sub-clauses and paragraphs are
                 references to sub-clauses and paragraphs of the clause or
                 schedule in which they appear;

         (iv)    any provision of this Agreement is to that provision as
                 amended in accordance with the terms of this Agreement;

         (v)     any document being "IN THE AGREED FORM" means in a form which
                 has been agreed by the parties on or before the date of this
                 Agreement and for identification purposes signed by them or on
                 their behalf by their solicitors;

         (vi)    "INDEMNIFY" and "INDEMNIFYING" any person against any
                 circumstance include indemnifying and keeping him harmless
                 from all actions, claims and proceedings from time to time
                 made against him and all loss or damage and all payments,
                 costs or expenses made or incurred by that person as a
                 consequence of or which would not have arisen but for that
                 circumstance; and

    (d)  except as set out in sub-clause 1.1, terms defined in the Companies
         Act 1985 and ICTA have the meanings attributed to them by those Acts.;

    (e)  "STERLING" and the sign "L" mean pounds sterling in the currency of
         the United Kingdom and "US DOLLARS" and the sign "$" mean dollars in
         the currency of the United States;

    (f)  the table of contents and headings are for convenience only and shall
         not affect the interpretation of this Agreement;

    (g)  general words shall not be given a restrictive meaning:

         (i)     if they are introduced by the word "other" by reason of the
                 fact that they are preceded by words indicating a particular
                 class of act, matter or thing; or

         (ii)    by reason of the fact that they are followed by particular
                 examples intended to be embraced by those general words;

    (h)  where any statement is qualified by the expression "SO FAR AS THE
         WARRANTORS ARE AWARE" or "TO THE BEST OF THE WARRANTORS' KNOWLEDGE AND
         BELIEF" or any similar expression it shall be deemed to include an
         additional statement that it has been made after due and careful
         enquiry.

2.  CONDITIONS TO COMPLETION


                                          15

<PAGE>

2.1  Except for the obligations set out in this clause, clause 6
     (Pre-Completion obligations) and sub-clause 17.10 (Termination), the
     obligations of the Warrantors  under this Agreement are in all respects
     conditional upon the following:

     (a) as at the date of Completion, Activision having performed all
         obligations and complied with all terms, conditions and covenants
         on its part agreed to be performed under this Agreement on or
         prior to the date of the Completion; 

     (b) the respective representations and warranties of Activision
         contained in this Agreement remaining true and correct both as of
         the date of this Agreement and as of the date of Completion with
         the same effect as though made at such date, except that any
         representation or warranty which is permitted to be and has been
         made as of and expressly limited to, a specific date shall have
         been true and correct on and as of such date; 

     (c) Activision receiving separately from KPMG Peat Marwick,
         independent auditors for Activision, and Grant Thornton,
         independent auditors of the Group, letters dated the date of
         Completion (which may contain customary qualifications and
         assumptions) to the effect that KPMG Peat Marwick and Grant
         Thornton respectively concur with Activision's management's
         conclusion that no conditions exist relating to Activision, the
         Company or the transactions contemplated by this Agreement that
         would preclude Activision from accounting for the share exchange
         as a pooling of interests for US accounting purposes under United
         States generally accepted accounting principles ("THE POOLING
         ARRANGEMENT");

2.2  Except for the obligations set out in this clause, clause 6
     (Pre-Completion obligations) and sub-clause 17.10 (Termination), the
     obligations of Activision under this Agreement are in all respects
     conditional upon the following:

     (a) conditional only upon Completion, the Company having duly passed
         requisite Board resolutions effecting the approval of all matters
         contemplated under this Agreement; 

     (b) the respective representations and warranties of the Warrantors
         contained in this Agreement remaining true and correct and the
         information set forth in any Schedule to this Agreement being
         true and correct both at the date of this Agreement and at the
         date of Completion with the same effect as though made at such
         date, except that any representation or warranty or items of
         information set forth in a Schedule which is permitted to be and
         has been made as of and expressly limited to, a specific date
         shall have been true and correct on and as of such date;

     (c) as of the date of Completion there being no material adverse
         change in the condition of the Group or its business (financial
         or otherwise), results of operations, assets, net worth,
         prospects, properties or litigation, except that the


                                          16

<PAGE>

         termination of any of the contracts between a Group Company and any
         Contractor by reason solely of the exercise of a right of termination
         upon a Change of Control shall not be a material adverse change.  Also
         for the purpose of this sub-clause, it shall be deemed not to be a
         material adverse change in the condition of the Group or its business
         (financial or otherwise), results of operations, assets, net worth,
         prospects, properties or litigation if a customer or customers
         individually or in the aggregate of the Group Companies (other than
         the Contractors) indicate that they will no longer  transact business
         with the Group as a result of the Change of Control unless such
         customer or customers individually or in the aggregate have accounted
         for 7 1/2 % or more of the Group's turnover in the twelve complete
         calendar months immediately preceding the date of this Agreement in
         which case there shall be deemed to be a material adverse change;

    (d)  as of the date of Completion, the Company and the Warrantors having
         performed all obligations and complied with all terms, conditions and
         covenants on their part agreed to be performed hereunder on or prior
         to the date of Completion;

    (e)  subsequent to the date of this Agreement and prior to Completion, the
         Company and the Warrantors not having performed any of the acts
         prohibited by clause 6;

    (f)  Activision having received a written opinion from Robinson Silverman
         Pearce Aronsohn & Berman LLP, its counsel, in form and substance
         reasonably satisfactory to it, to the effect that the share exchange
         will not result in a tax liability to Activision under the Code and
         such opinion shall not have been withdrawn; provided, however, that if
         such counsel does not render such opinion, this condition shall
         nonetheless be deemed to be satisfied with respect to Activision if
         the Company's counsel renders such opinion to Activision.  Activision,
         the Company, and the Warrantors agree to make reasonable
         representations as requested by such counsel for the purpose of
         rendering such opinion;

    (g)  Activision receiving separately from KPMG Peat Marwick, independent
         auditors for Activision, and Grant Thornton, independent auditors of
         the Group, letters dated the date of Completion (which may contain
         customary qualifications and assumptions) to the effect that KPMG Peat
         Marwick and Grant Thornton respectively concur with Activision's
         management's conclusion that no conditions exist relating to
         Activision, the Company or the transactions contemplated by this
         Agreement that would preclude Activision from accounting for the share
         exchange as a Pooling Arrangement; and

    (h)  the Bank of Scotland having formally waived any event of default
         arising under the terms of its facility agreement dated 28 June 1996
         by reason of change of control and having provided letters of non
         crystallisation in relation to Group debentures granted to them.


                                          17

<PAGE>

2.3 

     (a)  The Warrantors shall (so far as it lies within their powers) use all
          reasonable endeavours to procure that the Conditions referred to in
          sub-clauses 2.2(a), (b), (c), (d), (e), (g), and (h) are satisfied as
          soon as possible and in any event not later than 26 November 1997 (or
          such later date as the parties may agree).

     (b)  Activision shall (so far as it lies within its powers) use all
          reasonable endeavours to procure that the Conditions referred to in
          sub-clause 2.1(a),(b) and (c) and 2.2 (f) are satisfied as soon as
          possible and in any event not later than  26 November 1997 (or such
          later date as the parties may agree).

2.4  If any of the Conditions is not satisfied in full by the date specified in
     sub-clause 2.3 then (in the case of the Conditions specified in sub-clause
     2.1) the Warrantors and (in the case of the Conditions specified in
     sub-clauses 2.2) Activision shall be entitled at its (or as the case may
     be) their option either (in all cases prior to Completion):

     (a)  to waive the unsatisfied Condition; or

     (b)  to extend the period for satisfying the unsatisfied Condition until 1
          December 1997; or

     (c)  to treat this Agreement as terminated:

          (i)  without prejudice to the fact that in the event of termination by
               Activision, Activision reserves any rights it may have against
               the Warrantors for breach if the Warrantors have not complied
               with their obligations in clause 2.3(a); and

          (ii) without prejudice to the fact that in the event of termination by
               the Warrantors, the Warrantors reserve any rights they may have
               against Activision for breach if Activision has not complied with
               its obligations in clause 2.3(b).

          PROVIDED THAT the party exercising the rights of termination referred
          to in clause 2.4 shall have complied with its own respective
          obligations in clause 2.3(a) or 2.3(b) (as the case may be).

3.   TRANSFER AND EXCHANGE 

3.1  Subject to the terms of this Agreement, the Shareholders shall transfer to
     Activision  with effect from the date on which this Agreement becomes
     unconditional, the Company Shares with:

     (a)  full title guarantee (but free from all claims, charges, liens and
          encumbrances (whether monetary or not)); and


                                          18

<PAGE>

     (b)  all rights attaching to or accruing to them on or after the date on
          which this Agreement becomes unconditional (including all dividends
          and distributions declared, paid or made after that date save for the
          Dividends which will be paid by the Company in the ordinary course).

3.2  Subject to the terms of the Agreement, the Share Option shall be terminated
     pursuant to the Termination Deed.

3.3  Each of the Shareholders waives all rights of pre-emption and redemption
     over any of the Company Shares conferred on him by the Articles or in any
     other way and undertakes to take all steps necessary to waive any rights of
     pre-emption and redemption over any of the Company Shares.  Each of the
     Shareholders also waives any right he may have to receive any 'Approved
     Offer' as defined in the Articles.

3.4  Activision shall not be obliged to complete the exchange unless the
     transfer and exchange of all the Company Shares are completed
     simultaneously.

4.   CONSIDERATION

4.1  The Consideration payable to the Shareholders is the issuance by Activision
     to the Shareholders of  the Consideration Stock, credited as fully paid to
     the Shareholders in the manner and proportions as set out in Schedule 1.

4.2  The Consideration payable to Hunt is the issuance to Hunt by Activision of
     the Hunt Options.

4.3  The Consideration Stock shall rank in all respects with the common stock
     par value $0.000001 per share in the capital of Activision ("COMMON STOCK")
     in issue immediately prior to the allotment and issue of the Consideration
     Stock. 

5.   THE STOCK AND OPTION RETENTION

5.1  In order to ensure that the Surviving Shareholders' Warranties made by the
     Warrantors under this Agreement (which are surviving Completion) are not
     breached, and in order to provide a source of indemnification to Activision
     pursuant to any Claims, (a) the Shareholders agree that the certificates
     representing 7.5% of the total number of  shares of Consideration Stock
     issued to the Shareholders pursuant to clause 4 ("THE RETAINED STOCK")  and
     (b) Hunt agrees that a Hunt Option Agreement  with respect to 7.5% of the
     total number of the Hunt Options (and the Hunt Options represented thereby)
     (the "RETAINED OPTIONS") shall be deposited with the Escrow Agent in an
     escrow account ("THE ESCROW ACCOUNT") pursuant to the Escrow Agreement on
     the date of Completion to provide a source from which Activision can be
     reimbursed for any Claim.  Any Option Stock issued upon exercise of
     Retained Options shall be treated in the same manner as Retained Stock.


                                          19

<PAGE>

5.2 Such Retained Stock and Retained Options shall be held in the Escrow
    Account during such period of time as set forth in the Escrow Agreement
    ("THE HOLD PERIOD"). Any dividends and distributions with respect to such
    Retained Stock and any Option Stock issued upon the exercise of the
    Retained Options while held in the Escrow Account shall also be retained in
    the Escrow Account until the expiration of the Hold Period.  Any offsets or
    deductions made from Retained Stock or Retained Options held in the Escrow
    Account on account of any breach shall be made on the last business day of
    the Hold Period, or at such other time as set forth in the Escrow
    Agreement, and shall be based upon a market price per share of
    Consideration Stock of $15.5625 and dollar/sterling exchange rate of
    $1.6918 per L1 .  The value of each  Retained Option for these purposes
    shall be $15.5525.  All Retained Stock and Retained Options subject to such
    offset or deduction shall be cancelled by Activision and the remaining
    Retained Stock and Retained Options together with any dividends paid or
    distributions made with respect to such Retained Stock and Option Stock
    issued to Hunt upon the exercise of Retained Options that have not been
    cancelled shall be then delivered to the Shareholders and Hunt in
    accordance with their respective interests.

5.3 The cancellation by Activision of any Retained Stock and Retained Options
    contained in the Escrow Account in respect of any Claim shall not prejudice
    its right to recover any further sum due to it for that or any other Claim
    not satisfied by the Escrow Account.

6.  PRE-COMPLETION OBLIGATIONS

6.1 The Warrantors shall procure that, between the date of this Agreement and
    Completion, each Group Company shall carry on its respective businesses in
    the ordinary course and shall not without the consent of Activision do
    anything which is not of a routine or unimportant nature or which may
    jeopardise the Pooling Arrangement.  In particular, and without limitation,
    the Warrantors will procure that the Group will not (save in each case with
    the prior written consent of Activision):

    (a)  lend any moneys outside the ordinary course of business;

    (b)  lend any moneys to any shareholder, director or employee;

    (c)  borrow any moneys except in relation to the operation of bank
         overdrafts within existing limits as required in the ordinary course
         of business;

    (d)  give or allow to exist any further debenture, mortgage, charge or
         other encumbrance over any of its assets or undertaking save for a
         charge over debts owed by CentreSoft Limited to PDQ Distribution
         Limited to be granted by PDQ Distribution Limited to Eidos plc;

    (e)  enter into any capital expenditure commitments, hire purchase,
         leasing, rental or conditional sale agreements or arrangements save
         for those entered into in the ordinary course of business;


                                          20

<PAGE>

    (f)  enter into any agreement which is outside the ordinary course of its
         business or which is onerous or long term;

    (g)  declare, make or pay any dividend or other distribution or allot,
         issue, grant any options over, redeem, purchase, consolidate, convert,
         sub-divide or reduce any share or loan capital or issue any share
         warranties or securities convertible into shares;

    (h)  sell, transfer or otherwise dispose of the whole or any part of its
         business, undertakings or assets otherwise than current assets in the
         ordinary course of its business or fixed assets not exceeding L25,000
         in value in the aggregate;

    (i)  give any financial or other guarantees, securities or indemnities for
         any purpose other than in the ordinary course of business save for the
         guarantee to be granted by CentreSoft Limited. to Eidos plc in respect
         of the obligations owed by PDQ Distribution Limited to Eidos plc under
         the Distribution Agreement dated 28 June 1996;

    (j)  save for routine debt collection matters commence any litigation or
         compromise or settle any claim, dispute or other matter in which it is
         involved;

    (k)  redeem any of the Company Shares or any indebtedness to any Warrantor;

    (l)  attempt to do any of the matters set out in paragraphs (a) to (k);

6.2 In addition, the Warrantors shall procure that during the period set out in
    sub-clause 6.1 and save as expressly contemplated by this Agreement:

    (a)  no additional director is appointed to the Board of any Group Company;

    (b)  no resolution is passed by the shareholders of any Group Company;

    (c)  no change in the terms and conditions of employment of any employee of
         any Group Company is made;

    (d)  no act is performed or omission allowed, either by themselves or by
         any Group Company, which would result in any of the Shareholders
         Warranties being breached or becoming misleading at any time up to and
         including Completion;

    (e)  each Group Company maintains valid insurance in respect of its
         property, assets and business;

    (f)  each Group Company pays its creditors in the ordinary course of its
         business or within the normal terms of payment of such creditors.

7.  COMPLETION


                                          21

<PAGE>

7.1 Completion shall take place at the offices of Osborne Clarke on 26 November
    1997 (or on such other date, time and place as the parties may agree but,
    in any event, no later than 1 December 1997).

7.2 On Completion:

    (a)  the Warrantors shall deliver to Activision:

         (i)       stock transfer forms, duly completed and executed by the 
                   registered holders, in favour of Activision (or as it may 
                   direct) in respect of the Company Shares together with 
                   the relevant share and stock certificates;

         (ii)      letters of non-crystallisation dated not earlier than the 
                   second business day immediately preceding Completion from 
                   the holders of all outstanding floating charges given by 
                   any Group Company including without limit those given to 
                   Bank of Scotland plc;

         (iii)     A Deed of Release executed by Close Investment Management
                   Limited on behalf of Close Investment 1994 Fund in relation
                   to the security granted to the Investor Shareholder by any
                   Group Company in support of the Loan Stock Deed or any other
                   matter together with the original copies of such security
                   documentation;

         (iv)      evidence to the satisfaction of Activision that:

                   (aa) the Termination Deed has been executed by Hunt and the
                        Company;

                   (bb) the shareholders and subscription agreement dated 28 
                        June 1996  between the Shareholders has been 
                        terminated without residual liability of any party 
                        to it;

                   (cc) Bank of Scotland has waived any event of default arising
                        under the terms of its facility agreement dated 
                        28 June 1996 by reason of change of control;

                   (dd) the Hunt Consultancy Agreement has been terminated by an
                        agreement in the agreed form;

         (v)       irrevocable powers of attorney in favour of Activision in 
                   the agreed form executed by each of the registered holders 
                   of the Company Shares or any shares of the Subsidiaries 
                   which are not registered in the name of a Group Company to 
                   enable Activision (pending registration of transfers of 
                   the Shares) to exercise all voting and other rights 
                   attaching to the shares and to appoint proxies for this 
                   purpose;


                                          22

<PAGE>

         (vi)      the certificate of incorporation, any certificates of 
                   incorporation on change of name or re-registration, the 
                   statutory books written up to date, share certificate 
                   books, minute books, and the common seal of each Group 
                   Company;

         (vii)     all title deeds relating to the Properties including all
                   documents relating to the Tenancies and, where the
                   Properties are charged, Forms 53 or receipted legal charges
                   as appropriate;

         (viii)    all other papers and documents relating to each Group
                   Company which are in the possession of or under the control
                   of the Investor Shareholder or Hunt delivered at the
                   Company's premises;

         (ix)      letters of resignation in the agreed form from Hunt and 
                   Neil Murphy as directors of the Company; 

         (x)       letters of resignation from the auditors of each Group 
                   Company (save Electric Dreams Limited) containing the 
                   statement specified in Section 394(1), Companies Act 1985;

         (xi)      an investment letter from each Warrantor in the agreed form;

         (xii)     a certificate in the agreed form dated as of the date of
                   Completion executed by each of the Warrantors certifying
                   that the representations and warranties of the Warrantors
                   set out in this Agreement were true and correct as at the
                   date of the execution of this Agreement and are true and
                   correct on and as of the date at the Completion as if made
                   on and as of such date, and that since the Accounts Date
                   there has been no material adverse change (within the
                   meaning of such phrase contained in sub-clause 2.2(c)) in
                   the financial condition, business or operations of the
                   Company; 

         (xiii)    a copy of the Escrow Agreement duly executed together with
                   stock powers for Retained Stock;

         (xiv)     copies of the Accounts and the Management Accounts;

         (xv)      an opinion from the Warrantors' legal counsel in the 
                   agreed form relating to, inter alia, the good standing of 
                   the Company and other matters reasonably requested by 
                   Activision;

         (xvi)     the Hunt Option Agreements duly executed by Hunt;

         (xvii)    duly executed Restrictive Covenant Deeds by all Employee
                   Shareholders.


                                          23

<PAGE>

    (b)  The Shareholders shall repay all moneys (if any) then owing by them to
         any Group Company whether due and payable or not.

    (c)  The Employee Shareholders shall enter into the Service Agreements.

    (d)  The Warrantors shall procure that a board meeting of the Company is
         held at which it is resolved to approve the stock transfers referred
         to in Clause 7.2 (a)(i) and (subject to them being stamped) registered
         in the books of the Company.

    (e)  The Warrantors shall procure that such further board meetings of each
         Group Company (save for Electric Dreams Limited) are held at which:

         (i)       the persons nominated by Activision are appointed as 
                   directors of each Group Company;

         (ii)      the accounting reference date of each Group Company is 
                   changed to 31 March;

         (iii)     Grant Thornton resign from their office as auditors to each
                   Group Company and KPMG Peat Marwick  are appointed in their
                   place;

         (iv)      the execution and completion of the other documents to be 
                   entered into by each Group Company under this Agreement is 
                   approved; and

    (f)  The Warrantors shall produce the Accounts certified by Grant Thornton
         in a form suitable for filing with the SEC on Form 8-K.

    (g)  When the Warrantors have complied with the provisions of sub-clauses
         (a)-(f) inclusive, Activision shall: 

         (i)       subject to (ii) below procure the allotment and issue of 
                   the Consideration Stock to the Shareholders in proportions 
                   set out in Schedule 1; 

         (ii)      deliver certificates in respect of the Retained Stock to 
                   the Escrow Agent to be held in the Escrow Account;

         (iii)     enter into the Hunt Option Agreements; 

         (iv)      deliver the Hunt Option Agreement representing the 
                   Retained Options to the Escrow Agent;

         (v)       enter into the Escrow Agreement; 

         (vi)      enter into the Restrictive Covenant Deeds; and


                                          24

<PAGE>

         (vii)     deliver a copy of a resolution adopted by the board of
                   Activision approving the transactions contemplated by this
                   Agreement, certified by the company Secretary.

7.3 If any of the requirements of sub-clause 7.2 are not complied with on the
    date set for Completion under sub-clause 7.1, Activision (in the case of
    the requirements of sub-clauses 7.2 (a) - (f) inclusive) or the Warrantors
    (in the case of the requirements of sub-clause 7.2(g)) may:

    (a)  defer Completion to a date not later than 1 December 1997 or such
         later date as the parties may agree  (in which case the provisions of
         this sub-clause shall also apply to Completion as so deferred); or

    (b)  proceed to Completion so far as practicable but without prejudice to
         any other rights which it or they may have under this Agreement or any
         appropriate law; or

    (c)  treat this Agreement as terminated without prejudice to the fact that
         the terminating party reserves any rights it or they may have to claim
         damages against the non-terminating party for breach by such
         non-terminating party for not complying with its or their respective
         obligations under sub-clause 7.2.

    save that if Activision terminates the Agreement by reason only of the
    Warrantors failing to comply with clause 7.2(f) Activision shall have no
    claim for damages against the Warrantors.

8.   RESTRICTION ON SALE OF THE CONSIDERATION STOCK AND OPTION STOCK

8.1 The Warrantors acknowledge and agree that the Consideration Stock and the
    Option Stock will be issued to the Warrantors without registration under
    the United States Securities Act of 1933, as amended (the "SECURITIES
    ACT"), based upon the "private offering exemption", in reliance upon
    appropriate written representations from the Warrantors (as set forth in
    their respective Investment Letters in the agreed form), further evidenced
    by the restrictive wording on the certificates representing Consideration
    Stock and Option Stock and "stop transfer" instructions to Activision's
    transfer agent.  The Consideration Stock and Option Stock will constitute
    "restricted securities" within the meaning of the Securities Act and
    related rules and regulations.  Notwithstanding the provisions of the
    Securities Act, the Warrantors acknowledge and agree that the Warrantors
    shall not have the right to sell, pledge, gift, hypothecate or otherwise
    dispose of the Consideration Stock and Option Stock until the issuance by
    Activision of its first earnings press release containing thirty (30) days
    of combined operations of Activision and the Group.


                                          25

<PAGE>

8.2 Activision shall upon declaration of effectiveness of the Registration
    Statement (as defined in sub-clause 9.1(c) of this Agreement) procure that
    its corporate legal counsel issue an opinion and instructions to
    Activision's transfer agent to register for transfer, free of restrictive
    legends, certificates representing the Consideration Stock and Option Stock
    upon sale or transfer thereof by the Warrantors pursuant to the
    Registration Statement and compliance by the selling Warrantors with the
    prospectus delivery requirements of the Securities Act and certification to
    the transfer agent of such compliance. 

9.  REGISTRATION OF THE CONSIDERATION STOCK AND OPTION STOCK

9.1 Activision acknowledges that the Warrantors are likely to seek to sell some
    or all of their Consideration Stock or Option Stock at the earliest time
    permitted.  Activision therefore undertakes to use its best endeavours to
    file with the SEC:-

    (a)  notification of the acquisition of the Company on Form 8-K on or
         before 5 December 1997;

    (b)  financial statements for Form 8-K (including the Company's audited
         financial statements for the last fiscal year and the Company's
         unaudited financial statements for the quarters ended 31 October 1997)
         prior to 29 December 1997;

    (c)  a registration statement on Form S-3 ("THE REGISTRATION STATEMENT") or
         on such other available form which may be mutually acceptable to the
         parties as soon as reasonably practicable after Completion and in any
         case prior to the later of (i) 5 January 1998, or (ii) five business
         days after the filing referred to in 9.1(b) above, registering under
         the Securities Act, pursuant to Rule 415 under the Securities Act, if
         available, for the offer and sale in the future of up to all of the
         Consideration Stock and Option Stock issued by Activision pursuant to
         this Agreement and the Hunt Option Agreements.

9.2 Activision agrees:-  

    
    (a)  to use its best endeavours to release its earnings report for the
         quarter ended 31 December 1997 (provided that the Company closes its
         books for the quarter ended 31 December 1997 by 10 January 1998) prior
         to the later of (i )23 January 1998 and (ii) thirteen days after the
         Company closes its books for the quarter ended 31 December 1997;  

    (b)  to use its commercially reasonable efforts to cause the Registration
         Statement to be declared effective by the SEC within a time frame
         which is as soon as practicable in the circumstances;

    (c)  to maintain the effectiveness of the Registration Statement or
         successor registration statement filed by Activision for the purpose
         of registering the Consideration Stock and Option Stock until the 
         Consideration Stock and Option


                                          26

<PAGE>

         Stock is eligible to be resold without restrictions on disposition 
         pursuant to the Securities Act and its related rules and regulations;

    (d)  update the prospectus included in the Registration Statement ("THE
         PROSPECTUS") from time to time as may be necessary to ensure that the
         Prospectus does not contain any untrue statement of a material fact or
         omit to state a material fact necessary in order to make the
         Prospectus not misleading and to ensure that the Prospectus is current
         and can at all times be used during the 20 trading days following the
         first day the Warrantors are able to sell the Consideration Stock and
         Option Stock to the public in the United States pursuant to this
         Agreement; and 

    (e)  provide such number of copies of the Registration Statement and the
         Prospectus (as so updated) to the Warrantors as they may reasonably
         request in order to facilitate the public sale or other disposition of
         the Consideration Stock and Option Stock covered by such Registration
         Statement.

9.3 Activision shall bear the costs incurred for its legal counsel, accounting
    and all other costs and expenses, excluding costs for legal counsel for the
    Warrantors which may be incurred in connection with the preparation and
    filing of the Registration Statement pursuant to this clause 9.  The
    Warrantors shall be responsible for all costs associated with selling or
    disposing of the Consideration Stock and Option Stock (including brokers'
    commissions and underwriting fees) and all fees and expenses for their
    counsel, accountants and other advisors.

9.4 The rights in this clause 9 are not assignable to any transferee of
    Consideration Stock or Option Stock acquired by the Warrantors in
    connection with this Agreement.

9.5 The Warrantors severally agree that they will provide all required
    co-operation and furnish all necessary information and enter into such
    agreements customarily required of selling stockholders in connection with
    the preparation of the Registration Statement filed under the terms of
    sub-clause 9.1 and the Warrantors, severally, will represent and warrant
    the accuracy and completeness of all written information so furnished by
    them for inclusion in the Registration Statement and will indemnify and
    hold Activision, and its directors, officers, shareholders, controlling
    persons (within the meaning of the Securities Act) and underwriters
    harmless from and against any liability, loss, damage or expense (including
    costs and attorney's fees), incurred by or sustained by, or asserted
    against any of them, arising out of or based on any untrue statement (or
    alleged untrue statement) of a material fact contained in the information
    provided by the Warrantors or based on any omission (or alleged omission)
    to state a material fact required to be stated therein or necessary to make
    the statements therein not misleading.

9.6 Activision will indemnify and hold the Warrantors (and their controlling
    persons, if any, within the meaning of the Securities Act) harmless from
    and against any liability, loss, damage or expense (including costs and
    attorney's fees), incurred or sustained by, or asserted against, any of
    them ("DAMAGES") arising out of or based on any untrue


                                          27

<PAGE>

     statement (or alleged untrue statement) of a material fact in the
     Registration Statement, or based on any omission (or alleged omission) to
     state a material fact required to be stated therein or necessary to make
     the statements therein not misleading, other than in respect of any such
     Damages arising out of any written information furnished by the
     Warrantors pursuant to clause 9.5 for inclusion in the Registration
     Statement.

9.7  In the event it is determined by a Court of competent jurisdiction that
     Activision has breached Clause 9.1(c) or 9.2(a), the parties agree that
     the Court may consider (but shall not be bound to consider), in assessing
     damages, if any, any reduction in market value of the Consideration Stock
     and Option Stock from the date the Warrantors should have been able to
     sell the Consideration Stock and Option Stock had Activision not breached
     such clause or clauses and the date on which the Warrantors were actually
     able to sell the Consideration Stock and Option Stock.  The parties
     confirm that Activision shall be liable for damages for breach of
     covenant only if the breach is proved and only to the extent awarded by
     the Court.   The parties also agree that a reduction in market value is
     appropriately measured by reference to changes in the market price of
     Activision stock and changes in the $/L exchange rate.

10.  RELEASE OF GUARANTEES

     The Warrantors shall on Completion procure the release of a Group Company
     from any Guarantee given by such Group Company in respect of any
     obligations of any Warrantor or Warrantor Associate and shall indemnify
     Activision against all liability arising after Completion in respect of
     it.

11.  WARRANTIES

11.1 SHAREHOLDERS' WARRANTIES

     (a) The Warrantors severally represent and warrant to Activision that
         each of the Shareholders Warranties to be given by them
         respectively is true and accurate in all respects and not
         misleading at the date of this Agreement and will continue to be
         true and accurate in all respects and not misleading up to and
         including Completion.

     (b) The Warrantors severally represent and warrant to Activision that
         each of the Surviving Shareholders Warranties to be given by them
         is true and accurate in all respects and not misleading at the
         date of this Agreement and will continue to be true and accurate
         in all respects and not misleading up to and including
         Completion.

     (c) The Warrantors acknowledge that they give the Shareholders
         Warranties and Surviving Shareholders' Warranties with the
         intention of inducing Activision to enter into this Agreement and
         that Activision does so in reliance upon the Shareholder
         Warranties.


                                          28

<PAGE>

     (d) Each of the Shareholder Warranties and Surviving
         Shareholders'Warranties is a separate and independent warranty
         and shall not be limited by reference to any other warranty or
         anything in this Agreement.

11.2 ACTIVISION WARRANTIES

     (a) Activision represents and warrants to the Warrantors that each of
         the Activision Warranties to be given by it is true and accurate
         in all respects and not misleading at the date of this Agreement
         and will continue to be true and accurate in all respects and not
         misleading up to and including Completion.

     (b) Activision acknowledges that it gives the Activision Warranties
         with the intention of inducing the Warrantors to enter into this
         Agreement and that the Warrantors do so in reliance on the
         Activision Warranties.

     (c) Each of the Activision Warranties is a separate and independent
         warranty and shall not be limited by reference to any other 
         Activision Warranty or anything in this Agreement.

12.  WARRANTORS' REMEDIES

12.1 Activision undertakes to disclose in writing to the Warrantors anything
     which is or may constitute a claim by the Warrantors against Activision
     under the Activision Warranties directly after it comes to the notice of
     it either before, at the time of, or after Completion.

12.2 If between the date of this Agreement and Completion the Warrantors
     become aware that there has been a material breach of the Activision
     Warranties or any other term of the Agreement by Activision, the
     Warrantors shall be entitled to rescind this Agreement by notice in
     writing to Activision.

13.  ACTIVISION'S REMEDIES

13.1 Each of the Warrantors undertakes to disclose in writing to Activision
     anything which is or may constitute a Claim or which is or may be
     inconsistent with the contents of the Disclosure Letter directly after it
     comes to the notice of any of them either before, at the time of, or
     after Completion.

13.2 If, between the date of this Agreement and Completion, Activision becomes
     aware that there has been any material breach of the Shareholders
     Warranties or any other term of this Agreement Activision shall be
     entitled to rescind this Agreement by notice in writing to the
     Warrantors.  The rescission of this Agreement by Activision pursuant to
     Clause 13.2 for breach of any Shareholders' Warranty (other than a
     Surviving Shareholders' Warranty) shall be Activision's sole and
     exclusive remedy for any material breach of that Warranty.


                                          29

<PAGE>

13.3 The rights and remedies of Activision in respect of any breach of the
     Surviving Shareholders Warranties shall not be affected by Completion or
     by any investigation made, or which could have been made, by it or on its
     behalf into the affairs of any Group Company save as disclosed in the
     Disclosure Letter.

13.4 If, in respect of or in connection with any Claim, any amount payable to
     Activision by the Warrantors is subject to Taxation, the amount to be
     paid to Activision by the Warrantors shall be such as to ensure that the
     net amount received by Activision is equal to the full amount which would
     be payable to Activision had the amount not been subject to Taxation due
     credit being given to the Warrantors for any associated tax credit. 

13.5 If any Claim is made then:

     (a) Activision shall make and pursue such Claim against all and not
         some of the Warrantors; and

     (b) no Warrantor shall make any claim against any Group Company or
         any director or employee of any Group Company on whom he may have
         relied before agreeing to any terms of this Agreement or
         authorising any statement in the Disclosure Letter.

     This sub-clause shall not preclude any Warrantor from claiming against
     any other Warrantor under any right of contribution or indemnity to which
     he may be entitled.

13.6 If the Warrantors commit a breach of any Surviving Shareholders' Warranty
     and:

     (a) the value of any Group Company is less than it would have been at
         Completion in the absence of the breach; or

     (b) the value of the Company's shares or of any Group Company's
         assets is less than it would have been at Completion in the
         absence of the breach; or

     (c) any Group Company has incurred or will in future incur any
         liability which it would not have incurred, or which exceeds the
         liability it would have incurred, had matters been as warranted;
         or

     (d) any Group Company suffers or incurs any loss, costs or expenses
         (including legal costs) which it would not have suffered/incurred
         in the absence of a breach of warranty and/or had matters been as
         warranted; 

     then, without prejudice to any other rights and remedies to which
     Activision may be entitled, the Warrantors shall, on demand being made by
     Activision, pay to Activision by way of damages an amount equal to the
     said diminution in value or liability or excess liability and the said
     loss, costs or expenses.

13.7 The Warrantors shall indemnify Activision against all costs (including
     legal costs on an indemnity basis as defined in Order 62 of the Rules of
     the Supreme Court), expenses or


                                          30

<PAGE>

     other liabilities which Activision may reasonably incur either before or
     after the commencement of any action in connection with:

     (a) the settlement of any Claim;

     (b) any legal proceedings in respect of any Claim in which judgement
         is given for Activision; or

     (c) the enforcement of any such settlement or judgement.

13.8 Any amount paid by the Shareholders to Activision in respect of any of
     the provisions of this Agreement shall be treated by the Warrantors as
     paid to Activision by way of pro rata reduction in the Consideration. 

14.  LIMITATIONS ON LIABILITY 

14.1 The Warrantors shall not be liable in respect of any Claim under the
     Surviving Shareholders Warranties to the extent that the matter or
     matters giving rise to such Claim are fairly disclosed in the Disclosure
     Letter.

14.2 The aggregate maximum liability of the Warrantors  in respect of  a Claim
     or Claims under the Surviving Shareholders Warranties or a claim under
     Clause 13.1 shall in no event exceed L2,680,000 (inclusive of any
     liability of the Warrantors to contribute to Activision's costs of
     pursuing such Claim or Claims or claim under Clause 13.1) and the
     aggregate maximum liability of each Warrantor in respect of a Claim or
     Claims or claim under Clause 13.1 shall not exceed his Relevant
     Percentage (as defined below) of L2,680,000.

14.3 For the purposes of clauses 14.2 the expression "his Relevant Percentage"
     shall mean in relation to each Warrantor the percentage set against his
     name in Part III of Schedule 1;

14.4 The Warrantors shall not be liable in respect of any Claim where the
     amount of such Claim does not exceed L15,000.

14.5 The Warrantors shall not be liable in respect of Claims made by
     Activision unless and until the aggregate cumulative liability of the
     Warrantors in respect of such Claims (including for these purposes Claims
     in respect of which the Warrantors do not have any liability pursuant to
     the provisions of clause 14.4) exceeds L175,000 in which event the
     Warrantors shall be liable for the entire amount of such liability
     excluding for these purposes Claims in respect of which the Warrantors do
     not have any liability pursuant to the provisions of clause 14.4.

14.6 The Warrantors shall not be liable in respect of any Claim unless it
     shall have been made before the expiry of one year from Completion.


                                          31

<PAGE>

14.7   No Claim shall be deemed to have been made unless notice of such Claim
       was made in writing to the Warrantors specifying in reasonable detail
       the event of default to which the Claim relates and the nature of the
       breach and the amount claimed (to the extent ascertainable by
       Activision).

14.8   Any Claim in respect of which notice shall have been given in accordance
       with clause 14.7 shall be deemed to have been irrevocably withdrawn and
       lapsed (not having been previously satisfied, settled or withdrawn) if
       proceedings in respect of such Claim have not been issued and served on
       the Shareholders not later than the expiry of the period of 12 months
       after the date of such notice.

14.9   Where Activision and/or any Group Company is or is likely to be entitled
       to recover from some other person any sum in respect of any matter
       giving rise to a Claim then Activision shall procure that reasonable
       steps are taken to enforce such recovery (subject to Clause 15) and if
       any sum is so recovered then either the amount payable by the Warrantors
       in respect of that Claim shall be reduced by an amount equal to the sum
       so recovered (less the reasonable costs and expenses of recovering it)
       or (if any amount shall already have been paid by any of the Warrantors
       in respect of that Claim) there shall be repaid to the Warrantors an
       amount equal to the amount so recovered (less the reasonable costs and
       expenses of its recovery) or (if less) the amount of such payment.

14.10  Without prejudice to the generality of clause 14.9 above the provisions
       of clause 14.9 shall apply where any Group Company is entitled to
       recover from its insurers any sum in respect of any matter giving rise
       to a Claim.

14.11  The Shareholders shall have no liability (or such liability shall be
       reduced) in respect of any Claim:-

       (a)    if and to the extent that provision or reserve for or in respect
              of the liability or other matter giving rise to such Claim has
              been made in the Accounts or in the Management Accounts;

       (b)    if and to the extent any liability of any Group Company included
              in the Accounts has been discharged or satisfied below the amount
              attributed to it or included in respect of it in the Accounts or
              in the Management Accounts;

       (c)    if and to the extent any contingency or other matters provided
              against it in the Accounts or in the Management Accounts has in
              the event been over-provided for less the extent to which any
              contingency or other matters have been under-provided for;

       (d)    if and to the extent such Claim occurs or is increased as a
              result of any change in legislation after the date of this
              Agreement (or any legislation not in force at the date of this
              Agreement) which takes effect retrospectively or the withdrawal
              after


                                          32

<PAGE>

              the date of this Agreement of any published concession or
              published general practice previously made by the Inland Revenue
              or other taxing authority;

       (e)    if and to the extent that such Claim occurs or is increased as a
              result of any increase in the rate of Taxation in force at the
              date of this Agreement;

       (f)    if and to the extent that any Claim occurs as a result of or is
              otherwise attributable to Activision or any Group Company
              disclaiming any part of the benefit of capital or other
              allowances against Taxation claimed or proposed to be claimed on
              or before the date of this Agreement;

       (g)    if and to the extent that such Claim is attributable to any
              voluntary act or omission of or transaction or arrangement
              carried out by Activision or any Group Company after the
              Completion Date otherwise than in the ordinary course of business
              which act, omission, transaction or arrangement Activision was
              aware from the Disclosure Letter would otherwise give rise to a
              Claim;
       (h)    if and to the extent that such Claim would not have arisen or
              would have been reduced or eliminated but for the failure or
              omission on the part of Activision or any Group Company to make
              any claim, election, surrender or disclaimer or give notice or
              consent to any other thing under the provisions of any enactment
              or regulation relating to Taxation after Completion the making
              giving or doing of which was taken into account in computing the
              provision for taxation in the Accounts;

       (i)    if and to the extent that such Claim relates to a liability for
              Taxation  which would not have arisen but for any winding up or
              cessation after Completion of any trade or business carried on by
              any Group Company;

       (j)    if and to the extent that such Claim would not have arisen but
              for a change of accounting policy or practice of any Group
              Company after Completion other than to bring such company into
              line with UK generally accepted accounting principles;;

       (k)    if and to the extent that such Claim relates to a liability for
              Taxation for which any Group Company is or may become liable
              wholly or primarily as a result of transactions in the ordinary
              course of business after the Accounts Date;

       (l)    if and to the extent that such Claim would not have arisen but
              for the termination of the Share Option pursuant to this
              Agreement or for the payment of L500,000 to EIDOS plc as a result
              of the transactions contemplated by this Agreement.

14.12  The amount of any Claim shall take into account the amount of any relief
       from Taxation arising by virtue of the loss or damage in respect of
       which the Claim was made.


                                          33

<PAGE>

14.13  Nothing in this clause shall derogate from Activision's obligation to
       mitigate any loss which it suffers in consequence of a Claim.

14.14  If in respect of any Claim the liability of the Warrantors is contingent
       only, then the Warrantors shall not be under any obligation to make any
       payment to Activision until such time as the contingent liability ceases
       to be contingent and becomes actual provided that the provisions of
       clause 14.8 shall not apply to such claim whilst such liability remains
       contingent.

15.    CONDUCT OF CLAIMS

15.1   Activision shall notify the Warrantors as soon as reasonably practicable
       in writing of:

       (a)    any claim made against it or a Group Company by a third party
              which may give rise to a Claim; and

       (b)    any claim which it is aware any Group Company is entitled to
              bring against a third party which claim is based on circumstances
              which may give rise to a Claim.

       each of the above being hereinafter called a "THIRD PARTY CLAIM".

15.2   

       (a)    In respect of a Third Party Claim or Third Party Claims which the
              Purchaser, acting reasonably, believes individually or in the
              aggregate with all other Third Party Claims may exceed
              L2,680,000, the Purchaser shall consult with a representative
              appointed by the Investor Shareholder and with Richard Steele
              acting together on behalf of the Warrantors in connection with
              such Third Party Claim but such consultation shall be
              non-binding.  Subject to its obligation to consult, Activision
              shall have control of the conduct, negotiation, settlement and
              litigation of such Third Party Claims.

       (b)    In connection with a Third Party Claim or Third Party Claims
              which Activision, acting reasonably, believes individually or in
              the aggregate with all other Third Party Claims may be for less
              than L2,680,000 Activision shall procure that the conduct,
              negotiation, settlement or litigation of the claim by or against
              such third party is, so far as is reasonably practicable, carried
              out in accordance with the wishes of a representative appointed
              by the Investor Shareholder and of Richard Steele acting together
              on behalf of the Warrantors and at their cost subject to their
              giving timely instructions to Activision and providing reasonable
              security for any costs and expenses which might be incurred by
              Activision or a Group Company. 

15.3   Activision shall not be liable for any delay in giving any notice under
       sub-clause 15.1 unless the Warrantors have been materially prejudiced by
       such delay, in which case in assessing damages in respect of any Claim
       credit shall be given to the Warrantors in


                                          34

<PAGE>

       respect of any damages which would not have arisen pursuant to such
       Claim but for such delay.

15.4   Activision shall provide and shall procure that each Group Company
       provides to the Warrantors and the Warrantors professional advisers
       reasonable access to premises and personnel and to any relevant assets,
       documents and records within their power, possession or control for the
       purpose of investigating any Claim and enabling the Warrantors  to take
       the action referred to in sub-clause 15.2 and shall allow the Warrantors
       and their advisers to take copies of any relevant documents or records
       at their expense.

16.    [INTENTIONALLY DELETED]

17.    GENERAL

17.1   ENTIRE AGREEMENT AND CONFLICTS

       This Agreement sets out the entire agreement and understanding between
       the parties in respect of the subject matter of this Agreement.

17.2   ASSIGNMENT

       (a)    This Agreement shall be binding upon and enure for the benefit of
              the successors in title of the parties but, except as set out in
              sub-clause (b), shall not be assignable by any party without the
              prior written consent of the other.

       (b)    Activision may assign the benefit of this Agreement (including,
              without limitation, the Warranties) to any subsidiary of
              Activision.

17.3   VARIATION

       No purported variation of this Agreement shall be effective unless it is
       in writing and signed by or on behalf of each of the parties.

17.4   EFFECT OF COMPLETION

       Except to the extent already performed, all the provisions of this
       Agreement shall, so far as they are capable of being performed or
       observed, continue in full force and effect notwithstanding Completion.

17.5   INVALIDITY

       To the extent that any provision of this Agreement is found by any court
       or competent authority to be invalid, unlawful or unenforceable in any
       jurisdiction, that provision shall be deemed not to be a part of this
       Agreement, it shall not affect the enforceability of the


                                          35

<PAGE>

       remainder of this Agreement nor shall it affect the validity, lawfulness
       or enforceability of that provision in any other jurisdiction.

17.6   RELEASES AND WAIVERS

       (a)    The rights, powers and remedies conferred on Activision by this
              Agreement and remedies available to it are cumulative and are
              additional to any right, power or remedy which it may have under
              general law or otherwise.

       (b)    Activision may, in whole or in part, release, compound,
              compromise, waive or postpone, in its absolute discretion, any
              liability owed to it or right granted to it in this Agreement by
              any other party or parties without in any way prejudicing or
              affecting its rights in respect of that or any other liability or
              right not so released, compounded, compromised, waived or
              postponed.

       (c)    No single or partial exercise, or failure or delay in exercising
              any right, power or remedy by Activision shall constitute a
              waiver by it of, or impair or preclude any further exercise of,
              that or any right, power or remedy arising under this Agreement
              or otherwise.

17.7   FURTHER ASSURANCE

       After Completion, each party shall execute such documents and take such
       steps as the other party may reasonably require to fulfil the provisions
       of and to give to each party the full benefit of this Agreement. 

17.8   COUNTERPARTS

       (a)    This Agreement may be executed in any number of counterparts and
              by the parties on separate counterparts, but shall not be
              effective until each party has executed at least one counterpart.

       (b)    Each counterpart, when executed, shall be an original of this
              Agreement and all counterparts shall together constitute one
              instrument.

17.9   RESTRICTIVE TRADE PRACTICES ACTS 1976 AND 1977 

       No provision of this Agreement, or of any agreement or arrangement of
       which it forms part, which is subject to registration under the
       Restrictive Trade Practices Acts 1976 and 1977 shall take effect until
       the day after the date on which particulars of this Agreement, and/or
       any agreement or arrangement of which it forms part, have been supplied
       to the Director-General of Fair Trading in accordance with those Acts
       and the parties agree to use their respective reasonable endeavours to
       furnish such particulars by the first business day following Completion
       of this Agreement.

17.10  TERMINATION


                                          36

<PAGE>

       Without prejudice to any remedy available to any party arising out of
       any outstanding breach of this Agreement on the part of any other party
       (including for the avoidance of doubt and without limitation the rights
       contained in sub-clauses 2.4 and 7.3(c)), if this Agreement is
       terminated in accordance with its terms by reason of a breach by one of
       the parties of clause 2.3, the following shall occur:

       (a)    (if the Agreement is properly terminated by Activision) the
              Warrantors shall indemnify Activision for all costs, charges and
              expenses incurred by it in connection with the negotiation,
              preparations and determination or rescission of this Agreement
              and all matters which this Agreement contemplates and (except as
              referred to in sub-clause (b)) all obligations of Activision
              under this Agreement shall cease and (if the Agreement is
              properly terminated by the Warrantors) Activision shall indemnify
              the Warrantors for all costs, charges and expenses incurred by
              them  in connection with the negotiation, preparations and
              determination or rescission of this Agreement and all matters
              which this Agreement contemplates and (except as referred to in
              sub-clause (b)) all obligations of the Shareholders under this
              Agreement shall cease;

       (b)    the provisions contained in clauses 1, 2, 7, 17.10, 17.11, 17.12,
              18, 19, 20 and 21 shall continue to apply.

17.11   CONFIDENTIALITY

       (a)    Except as referred to in sub-clause (b), each party shall treat
              as strictly confidential all information received or obtained as
              a result of entering into or performing this Agreement which
              relates to the provisions or subject matter of this Agreement, to
              any other party or the negotiations relating to this Agreement. 

       (b)    Any party may disclose information which would otherwise be
              confidential if and to the extent: 

              (i)     it is required to do so by law or any securities exchange
                      or regulatory or governmental body to which it is subject
                      wherever situated;

              (ii)    it considers it necessary to disclose the information to
                      its professional advisers, auditors and bankers provided
                      that it does so on a confidential basis; 

              (iii)   the information has come into the public domain through
                      no fault of that party; or

              (iv)    each party to whom it relates has given its consent in
                      writing.

17.12  DEFAULT INTEREST


                                          37

<PAGE>

       If any party defaults in the payment when due of any sum payable under
       this Agreement (whether payable by agreement or by an order of a court
       or otherwise), the liability of that party shall be increased to include
       interest on that sum from the date when such payment was due until the
       date of actual payment at a rate per annum of 4 per cent. above the base
       rate from time to time of National Westminster Bank Plc. Such interest
       shall accrue from day to day and shall be compounded annually.

18.    ANNOUNCEMENTS

18.1   Except as referred to in sub-clauses 18.2 and 18.3, no announcement
       concerning the terms of this Agreement shall be made by or on behalf of
       any of the parties without the prior written consent of a representative
       of the Investor Shareholder and Richard Steele, acting together on
       behalf of the Warrantors, and Activision, such consent not to be
       unreasonably withheld or delayed.

18.2   Any announcement or circular required to be made or issued by any party
       by law or under the regulations of the SEC may be made or issued by that
       party without consent if it has first sought consent and given the other
       parties a reasonable opportunity to comment on the subject matter and
       form of the announcement or circular (given the time scale within which
       it is required to be released or despatched).

18.3   The parties acknowledge and consent to Activision issuing a press
       release in a form reasonably approved by the Shareholders in relation to
       the transaction contemplated by this Agreement promptly after the
       execution of this Agreement.

19.    COSTS AND EXPENSES

19.1   Except as set out in sub-clause 19.2 and sub-clause 17.10 (Termination)
       each party shall bear its own costs and expenses incurred in the
       preparation, execution and implementation of this Agreement provided
       that Activision shall pay the costs of the Warrantors' legal and
       accountancy advisors up to a maximum of L197,796.

19.2   Activision shall pay  all UK stamp duty applicable to any document to
       which it is a party executed pursuant to this Agreement.

20.    NOTICES

20.1   Any notice to a party under this Agreement shall be in writing signed by
       or on behalf of the party giving it and shall, unless delivered to a
       party personally, be left at, or sent by prepaid first class post (by
       airmail if outside the UK), prepaid recorded delivery or facsimile to
       the address of the parties as set out on page 1 of this Agreement in the
       case of Activision, in Schedule 1, in the case of the Warrantors to
       their home addresses set out in Schedule 1.  A party may notify the
       other parties of change of address of such party for the purposes of
       this clause, in which case such revised address shall thereafter be the
       address for notice of such party.


                                          38

<PAGE>

20.2   Except as referred to in sub-clauses 20.3 and 20.4, a notice shall be
       deemed to have been served:

       (a)    at the time of delivery if delivered personally;

              (i)     48 hours after posting in the case of an address in the
                      United Kingdom and 120 hours after posting for any other
                      address;

              (ii)    2 hours after transmission if served by facsimile on a
                      business day prior to 3pm in the recipient country or in
                      any other case at 10 am in the recipient country on the
                      business day after the date of despatch.

20.3   If the deemed time of service is not during normal business hours in the
       country of receipt, the notice shall be deemed served at or, in the case
       of faxes two hours after the opening of business on the next business
       day of that country.

20.4   The deemed service provisions set out in sub-clause 20.2 do not apply
       to:

       (a)    a notice served by post, if there is a national or local
              suspension, curtailment or disruption of postal services which
              affects the collection of the notice or is such that the notice
              cannot reasonably be expected to be delivered within 48 hours or
              120 hours (as appropriate) after posting; and

       (b)    a notice served by facsimile, if, before the time at which the
              notice would otherwise be deemed to have been served, the
              receiving party informs the sending party that the notice has
              been received in a form which is unclear in any material respect,
              and, if it informs the sending party by telephone, it also
              despatches a confirmatory facsimile within two hours.

20.5   In proving service it will be sufficient to prove:

       (a)    in the case of personal service, that it was handed to the party
              or delivered to or left in an appropriate place for receipt of
              letters at its address;

       (b)    in the case of a letter sent by post, that the letter was
              properly addressed, stamped and posted;

       (c)    in the case of facsimile, that it was properly addressed and
              despatched to the number of the party.

20.6   A party shall not attempt to prevent or delay the service on it of a
       notice connected with this Agreement.

21.    Governing law and jurisdiction

21.1   This Agreement shall be governed by and construed in accordance with
       English law.


                                          39

<PAGE>

21.2   Each of the parties irrevocably submits for all purposes in connection
       with this Agreement to the exclusive jurisdiction of the courts of
       England. 

THIS AGREEMENT has been signed on the date appearing at the head of page 1.


                                          40

<PAGE>

                                      SCHEDULE 1

                                        PART I

                          ALLOCATION OF CONSIDERATION STOCK


The allocation of the Consideration Stock and Hunt Options among the  Warrantors
pursuant to clause 4.1 of this Agreement shall be made in the following manner:

1.     ALLOCATION OF CONSIDERATION STOCK ON ACCOUNT OF LOAN STOCK

       217,405 shares of Consideration Stock shall be issued to the Investor
       Shareholder in consideration of the Loan Stock.

2.     ALLOCATION OF CONSIDERATION STOCK ON ACCOUNT OF REDEEMABLE PREFERENCE
       SHARES 

       86,962 shares of Consideration Stock shall be issued to the Investor
       Shareholder in consideration of the Redeemable Preference Shares.   

3.     ALLOCATION OF CONSIDERATION STOCK ON ACCOUNT OF CONVERTIBLE PREFERENCE
       SHARES

       14,494 shares of Consideration Stock shall be issued to the Investor
       Shareholder in consideration of the Convertible Preference Shares. 

4.     ALLOCATION OF CONSIDERATION STOCK ON ACCOUNT OF REDEEMABLE "B" ORDINARY
       SHARES (REQUIRED TO BE REDEEMED)

       1,976 of Consideration Stock shall be issued to the Investor Shareholder
       in consideration of the 18,182 of "B" Ordinary Shares required to be
       redeemed in accordance with Article 3(c)(ii) of the Articles

5.     ALLOCATION OF CONSIDERATION STOCK ON ACCOUNT OF ORDINARY SHARES, "A"
       ORDINARY SHARES AND "B" ORDINARY SHARES (NOT REQUIRED TO BE REDEEMED)

       
       Consideration Stock shall be issued as follows on account of the Company
       shares:

       NAME                            COMPANY SHARES      CONSIDERATION STOCK

       Investor Shareholder         1,426  "B" Ordinary       805,293

                                             - and -


                                          41

<PAGE>

                                    47,059 "A" Ordinary

       Andrew Richard Waterhouse    24,000 Ordinary          398,619

       David Neal                   10,000 Ordinary          166,091

       Gary Christopher Hawkins     6,000 Ordinary           99,655

       Norman Cecil Brown           24,000 Ordinary          398,619

       Richard Andrew Steele        24,000 Ordinary          398,619

       Roger Graham Swindells       6,000 Ordinary           99,655

       Steven Graham Varnish        6,000 Ordinary           99,655

6.     TREATMENT OF SHARE OPTION

       Activision shall issue to Hunt under the Hunt Options options to
       purchase an aggregate of 50,325 shares of Consideration Stock.


                                          42

<PAGE>

                                      SCHEDULE 1

                                       PART II

                                  (The Shareholders)

A. THE INVESTOR SHAREHOLDER

NAME                   ADDRESS                  NO. OF COMPANY     AMOUNT OF
                                                SHARES AT        CONSIDERATION
                                                EXCHANGE AND         STOCK
                                                COMPLETION

Close Securities       36 Great St. Helen's,    47,059 'A'        1,126,130
Limited                London EC3A 6AP          Ordinary
                                                Shares

                                                133,333
                                                Convertible
                                                Preference
                                                Shares

                                                800,000
                                                Redeemable
                                                Preference
                                                Shares

                                                L2,000,000
                                                Loan Stock
                                                19,608 "B"
                                                Ordinary
                                                Shares

 B.  THE EMPLOYEE SHAREHOLDERS

Andrew Richard         9 Spring Lane, Hoddey    24,000              398,619
Waterhouse             Heath, Solihull B94      Ordinary
                       6QX                      Shares


                                          43

<PAGE>

David Neal             1 Teasal Close,          10,000              166,091
                       Boughton Vale, Rugby     Ordinary
                       CV23 0TS                 Shares

Gary Christoper        5 The Sycamores, Vesey   6,000                99,655
Hawkins                Close, Walsall Road,     Ordinary
                       Sutton Coldfield B74     Shares
                       4QL

Norman Cecil Brown     21 Amington Close,       24,000              398,619
                       Four Oaks, Sutton        Ordinary
                       Coldfield B75 5UB        Shares

Richard Andrew Steele  213 Station Road,        24,000              398,619
                       Knowle, Solihill B93     Ordinary
                       0PU                      Shares

Roger Graham Swindells Amberley, Back Lane,     6,000                99,655
                       Shustoke, Near           Ordinary
                       Coleshill, West          Shares
                       Midlands B46 2AW 

Steven Graham Varnish  Squires House,           6,000                99,655
                       Valley Lane,             Ordinary
                       Bitteswell,              Shares
                       Leicestershire LE17 
                       4SW

C. Hunt               

Simon Anthony Hunt     3 Arthur Road,                          
                       Edgbaston, Birmingham,
                       B15 2UW


                                          44

<PAGE>

                                           
                                      SCHEDULE 1

                                       PART III

                                (RELEVANT PERCENTAGES)

 NAME                                          RELEVANT PERCENTAGE

 Investor Shareholder                          39.69%

 Andrew Richard Waterhouse                     14.049%

 David Neal                                    5.854%

 Gary Christopher Hawkins                      3.512%

 Norman Cecil Brown                            14.049%

 Richard Andrew Steele                         14.049%

 Roger Graham Swidells                         3.512%

 Steven Graham Varnish                         3.512%

 Simon Anthony Hunt                            1.773%

 TOTAL                                         100%


                                          45

<PAGE>

                                      SCHEDULE 2


                         (Information concerning the Company)

 REGISTERED NUMBER                           3136477

 DATE OF INCORPORATION                       11 December 1995

 ADDRESS OF REGISTERED OFFICE                Unit  4/5  Holford  Way  Holford
                                             Birmingham B6 7AX

 CLASS OF COMPANY                            Private limited

 AUTHORISED SHARE CAPITAL                    L215,029.97 divided into:

                                             100,000 ordinary shares of 1p each

                                             47,059  "A"  ordinary shares of 1p
                                             each

                                             19,608  "B"  ordinary shares of 1p
                                             each

                                             133,333   convertible   preference
                                             shares of L1 each 

                                             800,000    redeemable   preference
                                             shares of 10p each

 ISSUED SHARE CAPITAL
                                             100,000 ordinary shares of 1p each

                                             47,059  "A"  ordinary shares of 1p
                                             each

                                             133,333   convertible   preference
                                             shares of L1 each 

                                             800,000    redeemable   preference
                                             shares of 10p each

                                             19,608  "B"  ordinary shares of 1p
                                             each


                                          46

<PAGE>

 LOAN CAPITAL                                L2,000,000  15%  secured
                                             subordinated loan stock


                                          47

<PAGE>

 DIRECTORS

 FULL NAME                   USUAL RESIDENTIAL ADDRESS   NATIONALITY

 Norman Cecil Brown          See Schedule 1              British

 Simon Anthony Hunt          See Schedule 1              British

 Neil John Murphy            45 Northolme Road, London,  British
                             N5 2UX

 Richard Andrew Steele       See Schedule 1              British

 Andrew Richard Waterhouse   See Schedule 1              British


 SECRETARY

 FULL NAME                   USUAL RESIDENTIAL ADDRESS

 Ian Leslie Zant-Boer        Farm Manager's Cottage, Grange Farm, Preston
                             Deanery, Northampton NN7 2DT 

 ACCOUNTING REFERENCE DATE                   30 April

 TAX RESIDENCE                               UK


                                          48

<PAGE>

                                      SCHEDULE 3

                      (Information concerning the Subsidiaries)


 CENTRESOFT LIMITED

 REGISTERED NUMBER                 1673860

 DATE OF INCORPORATION             26 October 1982

 ADDRESS OF REGISTERED OFFICE      As the Company

 CLASS OF COMPANY                  Private limited

 AUTHORISED SHARE CAPITAL          L50,000 divided into:

                                   50,000 ordinary shares of L1 each

 ISSUED SHARE CAPITAL              L17,862 divided into:

                                   17,862 ordinary shares of L1 each

 LOAN CAPITAL                      None

 MEMBERS

 FULL NAME              REGISTERED ADDRESS             NUMBER OF SHARES HELD

 Combined               See Schedule 2                 17,861
 Distribution
 Holdings Limited

 DIRECTORS

 FULL NAME              USUAL RESIDENTIAL ADDRESS         NATIONALITY

 Norman Cecil Brown           See Schedule 1                British

 David Neal                   See Schedule 1                British


                                          49

<PAGE>

 Richard Andrew Steele        See Schedule 1                British
                                                            
 Roger Graham Swindells       See Schedule 1                British

 Steven Graham Varnish        See Schedule 1                British

 Andrew Richard               See Schedule 1                British
 Waterhouse

 SECRETARY

 FULL NAME              USUAL RESIDENTIAL ADDRESS

 Norman Cecil Brown           See Schedule 1                

 TAX RESIDENCE                     UK


 PDQ DISTRIBUTION LIMITED

 REGISTERED NUMBER                        2105582

 DATE OF INCORPORATION                    3 March 1987


 ADDRESS OF REGISTERED OFFICE             As the Company

 CLASS OF COMPANY                         Private Limited

 AUTHORISED SHARE CAPITAL                 L100 divided into:

                                          100 ordinary shares of L1 each

 ISSUED SHARE CAPITAL                     L100 divided into:

                                          100 ordinary shares of L1 each


                                          50

<PAGE>

 LOAN CAPITAL                                  None


                                          51

<PAGE>

 MEMBERS

 FULL NAME                       REGISTERED ADDRESS        NUMBER OF SHARES

                                                           HELD

 Centresoft Limited              As the Company            100

 DIRECTORS

 FULL NAME                       USUAL RESIDENTIAL ADDRESS   NATIONALITY

 Norman Cecil Brown              As Schedule 1               British

 Gary Christopher Hawkins        As Schedule 1               British

 Richard Andrew Steele           As Schedule 1               British

 Steven Graham Varnish           As Schedule 1               British

 Andrew Richard Waterhouse       As Schedule 1               British


 SECRETARY

 FULL NAME                                  USUAL RESIDENTIAL ADDRESS

 Norman Cecil Brown              As Schedule 1

 ACCOUNTING REFERENCE DATE            30 April

 TAX RESIDENCE                        UK


 ELECTRIC DREAMS LIMITED 

 REGISTERED NUMBER               1903909

 DATE OF INCORPORATION           10 April 1985


                                          52

<PAGE>

 ADDRESS OF REGISTERED OFFICE                  As the Company

 CLASS OF COMPANY                              Private Limited

 AUTHORISED SHARE CAPITAL                      L100 divided into:

                                               100 ordinary shares of L1 each

 ISSUED SHARE CAPITAL                          L100 divided into:

                                               100 ordinary shares of L1 each

 LOAN CAPITAL                                  None

 MEMBERS

 FULL NAME                       REGISTERED ADDRESS        NUMBER OF SHARES

                                                           HELD

 Centresoft Limited              As the Company            100

 DIRECTORS

 FULL NAME                       USUAL RESIDENTIAL ADDRESS   NATIONALITY

 Norman Cecil Brown              As Schedule 1               British

 Richard Andrew Steele           As Schedule 1               British

 Andrew Richard Waterhouse       As Schedule 1               British


 SECRETARY

 FULL NAME                                  USUAL RESIDENTIAL ADDRESS

 Norman Cecil Brown                         As Schedule 1

 ACCOUNTING REFERENCE DATE             30 April

 TAX RESIDENCE                         UK


                                          53

<PAGE>

                                      Schedule 4

                                     (Warranties)

                                        PART I


IN THIS SCHEDULE, WHERE THE CONTEXT PERMITS, THE EXPRESSION "THE COMPANY" MEANS
EACH GROUP COMPANY.

THE WARRANTORS

1.       CAPACITY

1.1      Each Warrantor has the requisite power and authority to enter into and
         perform this Agreement and the execution of this Agreement by each
         Warrantor shall not breach any applicable laws or any contracts or
         arrangements to which they are a party.

1.2      No Warrantor is bankrupt, has proposed a voluntary arrangement or has
         made or proposed any arrangement or composition with his creditors or
         any class of his creditors.

1.3      This Agreement constitutes and imposes valid legal and binding
         obligations on each Warrantor fully enforceable in accordance with its
         terms.

2.       OWNERSHIP OF SHARES

         Each Warrantor owns the Company Shares as set out in Part II of
         Schedule 1 with full title guarantee free from all charges and other
         encumbrances (whether monetary or not).

3.       ARRANGEMENTS BETWEEN GROUP COMPANIES AND WARRANTOR ASSOCIATES

         There are no contracts, arrangements or liabilities, actual or
         contingent, outstanding or remaining in whole or in part to be
         performed between any Group Company and any Warrantor Associate.


                                          54

<PAGE>

SHARE CAPITAL

4.       COMPANY

4.1      The Company Shares constitute the entire issued and allotted share
         capital of the Company and are fully paid or credited as fully paid.

4.2      Apart from this Agreement, there is no agreement, arrangement or
         commitment outstanding which calls for the allotment, issue or
         transfer of, or accords to any person the right to call for the
         allotment, issue or transfer of, any share or loan capital of the
         Company.

4.3      None of the Company Shares was, or represents assets which were, the
         subject of a transfer at an undervalue, within the meaning of Sections
         238 or 339, Insolvency Act 1986, within the past 5 years.

4.4      The Company has not at any time:

         (a)  reduced its share capital;

         (b)  redeemed any share capital;

         (c)  purchased any of its shares; or

         (d)  forfeited any of its shares.

5.       SUBSIDIARIES

5.1      Schedule 3 lists all the Subsidiaries of the Company and the holders
         of the entire issued and allotted share capital of the Subsidiaries.

5.2      The Company does not have, and has never had, a participating interest
         (as defined in Section 260, Companies Act 1985) in any undertaking
         which is not a Subsidiary nor has it agreed to acquire such an
         interest.

5.3      No Group Company holds or is liable on any share or relevant security
         which is not fully paid up or which carries any liability.

5.4      Apart from this Agreement, there is no agreement, arrangement or
         commitment outstanding which calls for the allotment, issue or
         transfer of, or accords to any person the right to call for the
         allotment, issue or transfer of, any share or loan capital of any
         Subsidiary.

5.5      None of the shares in the capital of any Subsidiary was, or represents
         assets which were, the subject of a transfer at an undervalue, within
         the meaning of Sections 238 or 339, Insolvency Act 1986, within the
         past 5 years.


                                          55

<PAGE>

CORPORATE MATTERS

6.       INSOLVENCY OF THE GROUP

6.1      No order has been made, no resolution has been passed, no petition
         presented, no meeting convened for the winding up of any Group Company
         or for a provisional liquidator to be appointed in respect of any
         Group Company and no Group Company has been a party to any transaction
         which could be avoided in a winding up.

6.2      No administration order has been made and no petition for one has been
         presented in respect of any Group Company.

6.3      No receiver or administrative receiver has been appointed in respect
         of any Group Company or any of its assets.

6.4      No Group Company is insolvent, has failed or is unable to pay, or has
         no reasonable prospect of being able to pay, any of its debts as they
         fall due, as those expressions are defined in Section 268, Insolvency
         Act 1986.

6.5      No voluntary arrangement has been proposed under Section 1, Insolvency
         Act 1986 in respect of any Group Company and no Group Company has made
         or proposed any arrangement or composition with its creditors or any
         class of them.

6.6      No distress, execution or other process has been levied on any Group
         Company's assets or action taken to repossess goods in the possession
         of any Group Company.

6.7      No unsatisfied judgement is outstanding against any Group Company and
         no demand has been served on any Group Company under Section
         123(1)(a), Insolvency Act 1986.

6.8      No event analogous to any referred to in sub-paragraphs 6.1 to 6.7 has
         occurred anywhere in the world.

7.       STATUTORY BOOKS AND DOCUMENTS FILED

7.1      The statutory books, including all registers and minute books, of each
         Group Company have been properly kept and contain an accurate and
         complete record of the matters with which those books should deal.

7.2      All documents which should have been delivered by any Group Company to
         the Registrar of Companies are complete and accurate and have been
         properly so delivered.

7.3      The copy of the memorandum and articles of association of each Group
         Company contained in the Disclosure Letter has embodied in it or
         annexed to it a copy of each


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<PAGE>

         resolution as referred to in Section 380, Companies Act 1985, and is
         accurate and complete in all respects.

7.4      Since the Accounts Date the members of any Group Company in general
         meeting, or of any class of them, have not passed any resolution other
         than resolutions relating to the ordinary business of annual general
         meetings.

INFORMATION

8.       ACCURACY AND ADEQUACY OF INFORMATION

8.1      The information contained in Schedules 1 to 3 (except Part 1 of
         Schedule 1) to this Agreement is accurate and complete.

8.2      The information contained in the Disclosure Letter and all written
         information supplied to Activision or its advisers by or on behalf of
         the Warrantors or any of their advisers or by any Group Company is
         complete and accurate and is not misleading because of any omission or
         ambiguity or for any other reason and where the information is
         expressed as an opinion, it is truly and honestly held and not given
         casually, recklessly or without due regard for its accuracy.

8.3      There is no fact or circumstance relating to the business and affairs
         of any Group Company which, if disclosed to Activision or any of its
         advisers, might reasonably be expected to influence the decision of
         Activision to purchase the Company Shares on the terms contained in
         this Agreement and which has not been so disclosed.

ACCOUNTS

9.       PREPARATION AND CONTENTS OF THE ACCOUNTS

9.1      The Accounts were prepared in accordance with the requirements of all
         relevant statutes and generally accepted United Kingdom accounting
         practices including, without limitation, all applicable Financial
         Reporting Standards issued by the Accounting Standards Board,
         Statements of Standard Accounting Practice issued by the Institute of
         Chartered Accountants of England and Wales and Statements from the
         Urgent Issues Task Force current at the Accounts Date and, where the
         accounting practice used to prepare the Accounts differs from those
         applicable in previous financial periods, the effect of any such
         difference is disclosed in the Disclosure Letter.


9.2      Without prejudice to the generality of sub-paragraph 9.1:

         (a)  the Accounts:

              (i)       give a true and fair view of the state of affairs of
                        each Group Company at the Accounts Date and the profits
                        or losses of each Group Company for the financial
                        period ending on that date;


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              (ii)      contain full provision or reserve for all liabilities
                        and for all capital and revenue commitments of each
                        Group Company as at the Accounts Date;

              (iii)     disclose all the assets of each Group Company as at the
                        Accounts Date and none of the values placed in the
                        Accounts on any of those assets was in excess of its
                        market value at the Accounts Date;

              (iv)      make full provision for bad and doubtful debts;

              (v)       do not include any figure which is referable to the
                        value of an intangible asset; and

              (vi)      make full provision for depreciation of the fixed
                        assets of each Group Company having regard to their
                        original cost and life.

         (b)  in the Accounts:

              (i)       in valuing work-in-progress no value was attributed in
                        respect of eventual profits and adequate provision was
                        made for such losses as were at the time of signature
                        of the Accounts by directors of each Group Company
                        reasonably foreseeable as arising or likely to arise;
                        and

              (ii)      slow-moving stock was written down appropriately,
                        redundant, obsolete, obsolescent or defective stock was
                        wholly written off and the value attributed to any
                        other stock did not exceed the lower of cost (on a
                        first in first out basis) and net realisable value (or
                        replacement value) at the Accounts Date.

9.3      The profits and losses of each Group Company shown in the Accounts
         were not, save as disclosed in the Accounts or in any note
         accompanying them, to any material extent affected by any
         extraordinary, exceptional, unusual or non-recurring income, capital
         gain or expenditure or by any other factor known to the Warrantors
         rendering any such profit or loss for such period exceptionally high
         or low.

9.4      The audited profit and loss accounts and audited balance sheets of
         each Group Company contained in the Accounts were prepared on a
         consistent basis with each other.

9.5      The Accounts and the Management Accounts contain and reflect adequate
         reserves for all liabilities or obligations of the Group of any
         nature, whether absolute, contingent or otherwise, and for all
         reasonably anticipated losses and costs in excess of expected
         receipts, on a basis consistent with past practice and experience. 
         The Group does not now nor will it prior to the date of Completion,
         have any liabilities or obligations not fully and properly reflected
         or reserved against in the Accounts and the Management Accounts except
         liabilities and obligations incurred by the Group in the ordinary
         course


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<PAGE>

         of business since the Management Accounts Date, none of which is
         individually or in the aggregate material in amount.

9.6      Neither the Company nor any of its Subsidiaries is directly or
         indirectly liable upon or with respect to (by discount, repurchase
         agreement or otherwise), or obligated in any way to provide funds in
         respect of or to guarantee or assume any debt, obligation or dividend
         of any company, association, partnership, individual or other entity
         other than the Company (and its Subsidiaries).


10.      ACCOUNTING RECORDS

10.1     The accounting records of each Group Company comply with the
         requirements of Sections 221 and 222, Companies Act 1985, do not
         contain or reflect any material inaccuracy or discrepancy and present
         and reflect in accordance with generally accepted accounting
         principles and standards the financial position of and all
         transactions entered into by the relevant Group Company or to which it
         has been a party.

10.2     All relevant financial books and records of each Group Company are in
         its possession or otherwise under its direct control.

10.3     Where any of the records of any Group Company are kept on computer,
         that Group Company:

         (a)  is the owner of all hardware and all software necessary to enable
              it to use the records as they have been used in its business to
              the date of this Agreement and to Completion;

         (b)  does not share any hardware or software relating to the records
              with any person; and

         (c)  maintains adequate back up records and support in the event of
              any fault or failure of such computer hardware and software. 

11.      MANAGEMENT ACCOUNTS

         The Management Accounts have been carefully prepared on a basis
         consistent with the Accounts, fairly reflect the trading position of
         each Group Company as at their date and for the period to which they
         relate and are not affected by any extraordinary, exceptional, unusual
         or non-recurring income, capital gain or expenditure or by any other
         factor known by the Warrantors rendering profits or losses for the
         period covered exceptionally high or low.

12.      EVENTS SINCE THE ACCOUNTS DATE


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<PAGE>

12.1     Since the Accounts Date there has been no material change in:

         (a)  the financial or trading position or prospects of any Group
              Company;

         (b)  the value or state of assets or amount or nature of liabilities
              as compared with the position disclosed in the Accounts; or

         (c)  in the turnover, direct or indirect expenses or the margin of
              profitability of any Group Company as compared with the position
              disclosed for the equivalent period of the last financial year.

12.2     Each Group Company has since the Accounts Date carried on its business
         in the ordinary course and without interruption, so as to maintain it
         as a going concern and paid its creditors in the ordinary course and
         within the credit periods agreed with such creditors.

12.3     Since the Accounts Date no supplier of any Group Company has ceased or
         restricted supplies or threatened so to do, there has been no loss or
         material curtailment of the business transacted by any Group Company
         with any customer which at any time in the preceding financial year
         represented 5 per cent or more of the turnover of that Group Company
         and the Warrantors are not aware of any circumstances likely to give
         rise to any of the above.

12.4     Since the Accounts Date no Group Company has:

         (a)  incurred or committed to incur:

              (i)  material (and for the purposes of this sub-clause material
                   shall mean a sum in excess of L20,000) capital expenditure; 
                   or

              (ii) any liability whether actual or contingent except for full
                   value or in the ordinary course of business;

         (b)  acquired or agreed to acquire:

              (i)  any asset for a consideration higher than its market value
                   at the time of acquisition or otherwise than in the ordinary
                   course of business;  or

              (ii) any business or substantial part of it or any share or
                   shares in a body corporate;

         (c)  disposed of or agreed to dispose of, any of the assets of any 
              Group Company, except in the ordinary course of business and for
              full value;

         (d)  repaid wholly or in part any loan except upon the due date or
              dates for repayment;


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<PAGE>

         (e)  issued or allotted share or loan capital, increased its
              authorised share capital, purchased or redeemed any shares,
              reduced or re-organised its share capital or agreed to do so;  or

         (f)  declared or paid any distribution of profit.

12.5     None of the debts included in the Accounts or any of the debts
         subsequently arising have been the subject of factoring by any Group
         Company and the Warrantors are not aware of any circumstances which
         could result in any presently outstanding debt in excess of L1,000 not
         being paid in full.

FINANCIAL

13.      FINANCIAL COMMITMENTS AND BORROWINGS

13.1     Complete and accurate details of all overdraft, loan and other
         financial facilities available to the Group Companies and the amounts
         outstanding under them at the close of business on the day preceding
         the date of this Agreement are set out in the Disclosure Letter and
         none of the Warrantors or any Group Company has done anything, or
         omitted to do anything, as a result of which the continuance of any of
         those facilities might be affected or prejudiced. 

13.2     No Group Company is a party to, or has agreed to enter into, any
         lending, or purported lending, agreement or arrangement (other than
         agreements to give credit in the ordinary course of its business).

13.3     No Group Company is exceeding any borrowing limit imposed upon it by
         its bankers, other lenders, its articles of association or otherwise
         nor has any Group Company entered into any commitment or arrangement
         which might lead it so to do.

13.4     No overdraft or other financial facilities available to any Group
         Company are dependent upon the guarantee of or security provided by
         any other person.

13.5     No event has occurred or been alleged which is or, with the passing of
         any time or the giving of any notice, certificate, declaration or
         demand, would become an event of default under, or breach of, any of
         the terms of any loan capital, borrowing, debenture or financial
         facility of any Group Company or which would entitle any person to
         call for repayment prior to normal maturity. 

13.6     No Group Company is, or has agreed to become, bound by any guarantee,
         indemnity, surety or similar commitment.

13.7     No Group Company has any credit cards in issue in its own name or that
         of any officer or employee of any Group Company or any person
         connected with any officer or employee.


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<PAGE>

13.8     No Group Company has received any grants, allowances, loans or
         financial aid of any kind from any government departmental or other
         board, body, agency or authority which may become liable to be
         refunded or repaid in whole or in part.

13.9     No Group Company has engaged in financing of a type which is not
         required, or has not been, shown or reflected in the Accounts.

14.      WORKING CAPITAL

         Having regard to existing bank and other facilities available to it,
         each Group Company has sufficient working capital for the purposes of
         continuing to carry on its business, in its present form and at its
         present level of turnover, for the period of 12 months after
         Completion.

15.      INSURANCES 

15.1     Each Group Company maintains, and at all material times has
         maintained, adequate insurance cover against all risks normally
         insured against by companies carrying on a similar business, for the
         full replacement or reinstatement value of its business and assets,
         and in particular has maintained product liability, professional
         indemnity insurance and all insurance required by statute and insured
         against loss of profits for a period of not less than 6 months and
         full details of the insurance policies are set out in the Disclosure
         Letter.

15.2     The Policies are valid and enforceable and all premiums due have been
         paid. There are no outstanding claims or circumstances likely to give
         rise to a claim under the Policies or which would be required to be
         notified to the insurers and nothing has been done or omitted to be
         done which has made or could make any Policy void or voidable or as a
         result of which the renewal of any Policy might be refused or the
         premiums due in respect of them may be liable to be increased.

15.3     There are no claims outstanding or threatened, or so far as the
         Warrantors are aware, pending, against any Group Company which are not
         fully covered by insurance.

TRADING AND CONTRACTS

16.      CONTRACTS AND COMMITMENTS

16.1     Complete and accurate details of the contracts of the Company
         (including the Contracts) are set out in the Disclosure Letter (save
         where any contract has an annual turnover or expenditure less than
         L300,000 for the previous financial year of the Group).

16.2     No Group Company is a party to any agreement, arrangement or
         commitment which:

         (a)  has or is expected to have material consequences in terms of
              expenditure or revenue;


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<PAGE>

         (b)  relates to matters outside the ordinary business of that Group
              Company or was not entered into on arms' length terms;

         (c)  constitutes a commercial transaction or arrangement which
              deviates from the usual pattern for that Group Company;

         (d)  can be terminated in the event of any change in the underlying
              ownership or control of that Group Company or would be materially
              affected by such change; 

         (e)  cannot readily be fulfilled or performed by it on time; or

         (f)  cannot be terminated, without giving rise to any liabilities on
              any Group Company, by that Group Company giving 3 months' notice
              or less. 

16.3     No Group Company:

         (a)  has outstanding any bid, tender, sale or service proposal which
              is material in relation to its business or which, if accepted,
              would be likely to result in a loss; 

         (b)  or WarrantorWarrantor is aware of any actual, potential or
              alleged breach, invalidity, grounds for termination, grounds for
              rescission, grounds for avoidance or grounds for repudiation of,
              any contract to which any Group Company is a party; or 

         (c)  has granted any power of attorney or other such authority
              (whether express or implied) which is still outstanding.

16.4     All contracts of the Group are valid and binding and enforceable in
         accordance with their terms.  No Group Company is in breach or default
         of any of its contracts.

16.5     No Group Company is in breach or default of any of the terms of the
         contract between Eidos plc and the Company, dated 28 June 1996, for
         the acquisition of Centresoft Limited ("THE EIDOS CONTRACTand no Group
         Company has made, or has become entitled to make any claim under or in
         respect of the Eidos Contract (or the Taxation Deed executed pursuant
         thereto) whether under the warranties, the Taxation Deed or otherwise.

17.      TERMS OF TRADE

         No Group Company has given any guarantee or warranty (other than any
         implied by law) or made any representation in respect of any product
         or services sold or supplied by it nor has it accepted any liability
         to service, maintain, repair or otherwise do or refrain from doing
         anything in relation to such goods or services after they have been
         sold or supplied by it except for those contained in its standard
         conditions of trading, complete and accurate copies of which are
         contained in the Disclosure Letter.

18.      PRODUCT LIABILITY AND YEAR 2000


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<PAGE>

18.1     No Group Company has manufactured, sold or provided any product or
         service which does not in every respect comply with all applicable
         laws, regulations or standards or which is defective or dangerous or
         not in accordance with any representation or warranty, express or
         implied, given in respect of it.

18.2     The products, systems and services used by the Company for its own
         internal purposes which are dependant in any way on automatic
         instructions or any computer hardware or software meet Year 2000
         conformity.

18.3     The products, systems and services used by the Company for its own
         internal purposes will not be affected, in terms of performance or
         functionality, by the use of dates before, during and after the Year
         2000.

19.      LICENCES AND CONSENTS

19.1     Complete and accurate details of all licences, consents, permissions,
         authorisations and approvals required by each Group Company for the
         carrying on of its business are contained in the Disclosure Letter and
         all of them have been obtained by that Group Company and are in full
         force and effect.

19.2     All reports, returns and information required by law or as a condition
         of any licence, consent, permission, authorisation or approval to be
         made or given to any person or authority in connection with the
         business of any Group Company have been made or given to the
         appropriate person or authority and there are no circumstances which
         indicate that any licence, consent, permission, authorisation or
         approval might not be renewed in whole or in part or is likely to be
         revoked, suspended or cancelled or which may confer a right of
         revocation, suspension or cancellation.

20.      TRADING PARTNERS

20.1     No Group Company acts or carries on business in partnership with any
         other person or is a member of any corporate or unincorporated body,
         undertaking or association.

20.2     No Group Company is a party to any joint venture agreement or
         arrangement or any agreement or arrangement under which it is to
         participate with any other person in any business.

20.3     No Group Company is a party to any agency, distributorship, licence or
         management agreement or is a party to any contract or arrangement
         which restricts its freedom to carry on its business in such manner as
         it may think fit in any part of the world.

20.4     No Group Company has any branch, agency, place of business or
         establishment outside the United Kingdom.

21.      COMPETITION AND TRADE REGULATION LAW


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<PAGE>

21.1     No Group Company is or has been a party to, or is or has been
         concerned in any agreement or arrangement, or is conducting or has
         conducted itself, whether by omission or otherwise, in a manner which:

         (a)  contravenes, is invalidated in whole or in part by or has been,
              or should have been, registered under the Restrictive Trade
              Practices Acts 1976 and 1977;

         (b)  contravenes the provisions of the Resale Prices Act 1976, the
              Trade Description Acts 1968 and 1972, the Fair Trading Act 1973
              or any secondary legislation made under either of those Acts;

         (c)  infringes Article 85 or 86 of the Treaty of Rome or any
              regulation or directive made under it or any other anti-trust or
              similar legislation in any jurisdiction in which any Group
              Company has assets or carries on or intends to carry on business
              or where its activities may have any effect.

21.2     No Group Company has:

         (a)  given an undertaking to, or is subject to, any order of or
              investigation by, or has received any request for information
              from;

         (b)  received, nor so far as the Warrantors are aware, is it likely to
              receive any process, notice or communication, formal or informal
              by or on behalf of;

         (c)  been or is a party to, or is or has been concerned in, any
              agreement or arrangement in respect of which an application for
              negative clearance and/or exemption has been made to

         the Office of Fair Trading, the Monopolies and Mergers Commission, the
         Secretary of State, the European Commission or any other governmental
         or other authority, department, board, body or agency of any country
         having jurisdiction in anti-trust or similar matters in relation to
         its business.

22.      COMPLIANCE WITH LAW

22.1     No Group Company has committed or is liable for, and no claim has been
         or, so far as the Warrantors are aware, will be made that any Group
         Company has committed or is liable for, any criminal, illegal,
         unlawful or unauthorised act or breach of any obligation or duty
         whether imposed by or pursuant to statute, contract or otherwise.

22.2     No Group Company has received notification that any investigation or
         inquiry is being, or has been, conducted by, or received any request
         for information from any governmental or other authority, department,
         board, body or agency in respect of the affairs of any Group Company
         and, so far as the Warrantors are aware, there are no circumstances
         which would give rise to such investigation, inquiry or request.


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<PAGE>

22.3     None of the activities, contracts or rights of any Group Company is
         ultra vires, unauthorised, invalid or unenforceable or in breach of
         any contract or covenant and all documents in the enforcement of which
         any Group Company may be interested are valid.

23.      LITIGATION AND DISPUTES

23.1     Except for actions to recover any debt incurred in the ordinary course
         of the business owed to any Group Company where each individual debt
         and its costs outstanding amounts to less than L50,000:

         (a)  no Group Company nor any person for whose acts a Group Company
              may be liable is engaged in any litigation, arbitration,
              administrative or criminal proceedings, whether as plaintiff,
              defendant or otherwise;

         (b)  no litigation, arbitration, administrative or criminal
              proceedings by or against any Group Company or any person for
              whose acts a Group Company may be liable are threatened or
              expected and, as far as the Warrantors are aware, none are
              pending; 

         (c)  there are no facts or circumstances likely to give rise to any
              litigation, arbitration, administrative or criminal proceedings
              against any Group Company or any person for whose acts a Group
              Company may be liable.

23.2     No Group Company is subject to any order or judgement given by any
         court or governmental or other authority, department, board, body or
         agency or has not been a party to any undertaking or assurance given
         to any court or governmental or other authority, department, board,
         body or agency which is still in force, nor are there any facts or
         circumstances likely to give rise to any Group Company becoming
         subject to such an order or judgement or to be a party to any such
         undertaking or assurance.

ASSETS

24.      OWNERSHIP AND CONDITION OF ASSETS

24.1     Each of the assets included in the Accounts or acquired by any Group
         Company since the Accounts Date (other than the Properties and current
         assets subsequently disposed of or realised in the ordinary course of
         business) is owned both legally and beneficially by a Group Company
         free from any third party rights and, if capable of possession, is in
         the possession of that Group Company.

24.2     Each item of plant and machinery, vehicle and office equipment used by
         each Group Company is:

         (a)  in good repair and condition, regularly maintained and certified
              safe and without risk to health when used;


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<PAGE>

         (b)  capable and will remain capable of doing the work for which it
              was designed or purchased until the time when (on the basis of
              depreciation adopted in the Accounts) it will have been written
              down to a nil value;

         (c)  not surplus to requirements; and

         (d)  not expected to require replacement or additions within 6 months
              of Completion.

24.3     No Group Company has acquired, or agreed to acquire, any asset on
         terms that title to that asset does not pass until full payment is
         made or all indebtedness incurred in connection with the acquisition
         is discharged.

24.4     The assets owned by each Group Company, together with all assets held
         under hire purchase, lease or rental agreements which are contained in
         the Disclosure Letter, comprise all assets necessary for the
         continuation of the business of each Group Company as it is currently
         carried on.

25.      STOCK

         No part of the stocks of materials of any Group Company is redundant,
         obsolete, obsolescent or defective.

26.      CHARGES AND ENCUMBRANCES OVER ASSETS

26.1     No option, right to acquire, mortgage, charge, pledge, lien (other
         than a lien arising by operation of law in the ordinary course of
         trading) or other form of security or encumbrance or equity on, over
         or affecting the shares or the whole or any part of the undertaking or
         assets of any Group Company, including any investment in any other
         Group Company, is outstanding and, apart from this Agreement, there is
         no agreement or commitment to give or create any of them and no claim
         has been made by any person to be entitled to any of them. 

26.2     No floating charge created by a Group Company has crystallised and
         there are no circumstances likely to cause such a floating charge to
         crystallise.

26.3     No Group Company has received notice from any person intimating that
         it will enforce any security which it may hold over the assets of any
         Group Company, and there are no circumstances likely to give rise to
         such a notice.

26.4     All charges in favour of a Group Company have, if required, been
         registered in accordance with the provisions of the Companies Act
         1985, Part XII.

27.      INTELLECTUAL PROPERTY

27.1     Complete and accurate details of all Intellectual Property and copies
         of all licences and other agreements relating to it are contained in
         the Disclosure Letter.


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<PAGE>

27.2     The Company is the sole legal and beneficial owner of the Intellectual
         Property used in connection with its business (including but not
         limited to the Software) and has absolute unencumbered title to such
         Intellectual Property and such Intellectual Property is not subject to
         any outstanding rights of any third party of any nature whatsoever or
         to any option or agreement for licence or purchase in favour of any
         person nor do any circumstances exist whereby any person may claim
         entitlement to such Intellectual Property in competition with the
         Company and without prejudice to the generality of the foregoing no
         employee of the Group is entitled to any award or compensation in
         respect thereof whether under the Patents Act 1977 or otherwise.

27.3     All Marks and Patents (if any) used by the Group in the course of its
         business are registered in the name of the relevant Group Company as
         proprietor.

27.4     As regards all Marks owned by the Group the Group has paid all renewal
         and other fees or expenses which may be necessary to ensure the
         continuance in force of the registrations of the said Marks.

27.5     All Know-How used by the Group in connection with its business is its
         sole property and each Group Company has neither disclosed to nor
         licensed any third party to use such Know-How.

27.6     None of the operations of the Group infringe any industrial property
         rights or intellectual property rights of any third party and the
         Group is not liable to make any payment of any royalty or fee in
         respect of the same.

27.7     Each Group Company does not use on its letterheads, business cards,
         circulars, advertisements, brochures, sales literature or vehicles or
         otherwise carry on business under a name other than its corporate
         name.

27.8     None of the Intellectual Property used by the Group in its business
         has been assigned or is being used, claimed, opposed or attacked by
         any person nor are the relevant Group Company's rights thereto being
         infringed.

27.9     The Group has not entered into any agreement which restricts the
         disclosure or use by the Group of any Know-how or technical
         information or other Intellectual Property and there has not been any
         infringement by any third party of any of the rights in confidential
         information or other Intellectual Property held by the Group.

27.10    Each Group Company is the beneficial owner of all Intellectual
         Property in the Software.

27.11    The Intellectual Property in the Software is free from encumbrances
         and /or any third party interests.

27.12    The Group has quiet enjoyment of all Intellectual Property in the
         Software at the date hereof.


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<PAGE>

27.13    No part of any of the Intellectual Property in any of the Software has
         except in the ordinary course of business been licensed, transferred,
         assigned, charged or otherwise encumbered or dealt with.

27.14    There is no third party Software licensed to the Group which the
         Company needs for its business.

27.15    No part of any of the Software is manufactured, supplied or licensed
         by any Group Company under any licence, consent or permission from any
         third party.

27.16    In respect of any part of any Software written, developed or
         originated by an employee or director of a Group Company:

         (a)  all such Software was written, developed or originated by such
              employee in the course of his employment by such Group Company;
              and

         (b)  the contract of employment between the relevant Group Company and
              such employee provides for the Group Company to own all rights in
              and to such Software; and

         (c)  if sub-paragraphs 27.16(a) and (b) do not both apply, such
              employee has expressly assigned as beneficial owner to the
              relevant Group Company all Intellectual Property in and to such
              Software.

27.17    The Group is in possession of all source code to the Software
         including without limitation to the generality of the foregoing,
         source-code listings, flow-charts and all accompanying documentation.

EMPLOYMENT

28.      DIRECTORS AND EMPLOYEES

28.1     Complete and accurate details of the terms and conditions of
         employment of all employees of each Group Company, including the date
         of commencement of their continuous period of employment, salary,
         position, notice period, non-cash benefits, age and any arrangements
         or assurances (whether or not legally binding) in relation to their
         employment, are contained in the Disclosure Letter and no employee is
         engaged on a form of employment contract copies of which have not been
         previously supplied to Activision or its advisors.

28.2     Each Group Company has maintained up-to-date, adequate and suitable
         records regarding the service and terms and conditions of employment
         of each of its employees.

28.3     Save as disclosed in the Disclosure Letter no Group Company is a party
         to any consultancy agreement, any agreement for management services or
         any contract of


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         services with any director and any such agreement or contract does not
         constitute a contract of employment.

28.4     Since the Accounts Date there has been:

         (a)  no material alteration in the terms of employment or any material
              change in the number of employees employed by any Group Company; 
              or

         (b)  no material increase in any fees, remuneration or benefits paid
              or payable to any officer or employee of any Group Company, nor
              are any negotiations for any such increase current or likely to
              take place in the next 6 months. 

28.5     No officer or employee of any Group Company is remunerated on a
         profit-sharing, bonus or commission basis.

28.6     Other than salary for the current month and accrued holiday pay, no
         amount is owing to any present or former officer or employee of any
         Group Company.

28.7     There is no share option or share incentive scheme in operation by or
         in relation to any Group Company for any of its officers or employees
         nor is the introduction of such a scheme been proposed.

28.8     Each Group Company has at all relevant times complied with all its
         obligations under statute and otherwise concerning the health and
         safety at work of its employees and there are no claims capable of
         arising or pending or threatened by any employee or third party in
         respect of any accident or injury which are not fully covered by
         insurance.

28.9     Save as provided for or taken into account in the Accounts:

         (a)  no claim or liability to make any payment of any kind to any
              person who is or has been an officer or employee has been
              received or incurred by any Group Company whether under the
              Employment Rights Act 1996, Sex Discrimination Act 1975, the Race
              Relations Act 1976 and the Disability Discrimination Act 1995 or
              otherwise; and

         (b)  no gratuitous payment of a material amount has been made or
              promised by any Group Company in connection with the actual or
              proposed termination or suspension of employment or variation of
              any contract of employment of any present or former officer or
              employee. 

28.10    No officer or employee of any Group Company has given notice or is
         under notice of dismissal nor are there any service contracts between
         any Group Company and its officers or employees which cannot be
         terminated by the relevant Group Company by 12 weeks notice or less
         without giving rise to a claim for damages or compensation (other than
         a statutory redundancy payment).


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28.11    No Group Company has:

         (a)  any actual, pending or threatened claims against it by any
              current or former employee;

         (b)  any employees who are on long term sick leave or in receipt of
              PHI payments; or

         (c)  any employee under warning under the terms of the relevant Group
              Company's disciplining procedure.

28.12    No Group Company has:

         (a)  entered into any arrangement involving the acquisition of
              non-cash assets from or disposal to;

         (b)  granted any loan or quasi-loan to or entered into any guarantee
              or credit transaction with; or

         (c)  provided any security in connection with any loan, quasi-loan or
              credit transaction to or with or entered into any other
              transaction with

         any director or person connected with a director within the meaning of
         the Companies Act 1985.

28.13    Any redundancy payments made by a Group Company have been calculated
         and paid in accordance with statutory requirements and no external
         redundancy payments have been made by any Group Company.

28.14    Each Group Company has abided at all times with the terms of any
         practice guides, employment procedural documents and any other
         employment manuals produced by the Group.


29.      INDUSTRIAL RELATIONS

29.1     No Group Company is a party to any contract, agreement or arrangement
         with any trade union or other body or organisation representing any of
         its employees.

29.2     Each Group Company has in relation to its employees and former
         employees complied with all conditions of service, customs and
         practices and, where relevant, all collective agreements and
         recognition agreements for the time being.

29.3     Within the last 12 months, no Group Company has:

         (a)  given notice of any redundancies to the Secretary of State,
              started consultations with any appropriate representatives or
              failed to comply with any obligation under the provisions of
              Chapter II Trade Union and Labour Relations (consolidation) Act
              1992; or


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         (b)  been a party to any relevant transfer as defined in the Transfer
              of Undertakings (Protection of Employment) Regulations 1981 or
              has failed to comply with any duty to inform and consult any
              appropriate representative under the Regulations.

29.4     No dispute has arisen between any Group Company and a material number
         or category of its employees nor are there any present circumstances
         known to the Warrantors which are likely to give rise to any such
         dispute.

29.5     No training schemes, arrangements or proposals exist nor have there
         been any such schemes, arrangements or proposals in the past in
         respect of which a levy may become payable by any Group Company under
         the Industrial Training Act 1982.

30.      PENSIONS

30.1     No Group Company has any plans, schemes or arrangements in relation to
         death, disability or retirement of any of its employees.

30.2     In relation to each plan, scheme or arrangement disclosed under
         paragraph 30.1 in the Disclosure Letter:

         (a)  complete and accurate details:

              (i)  of it (including, where appropriate, copies of all trust
                   deeds and rules together with copies of all amending deeds
                   and resolutions and the latest actuarial reports); and

              (ii) of the basis on which the relevant Group Company makes, or
                   is liable to make, contributions to it

              are contained in the Disclosure Letter.

         (b)  all contributions which are payable by any Group Company in
              respect of it and all contributions due from the employees of the
              relevant Group Company as members of it have been duly made and
              the relevant Group Company has fulfilled all its obligations
              under it;

         (c)  it has been administered in accordance with the preservation
              requirements within the meaning of Section 69, Pension Schemes
              Act 1993, the equal access requirements of Section 118, Pension
              Schemes Act 1993, the contracting-out requirements of Part III,
              Pension Schemes Act 1993 and all relevant requirements of the
              Pensions Act 1995 and in accordance with the trusts, powers and
              provisions of such plans, schemes or arrangements;

         (d)  no undertakings or assurances have been given to any employee of
              any Group Company as to the continuance, introduction, increase
              or improvement of any pension rights or entitlements which any
              Group Company and/or Activision


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              would be required to implement in accordance with good industrial
              relations' practice and whether or not there is any legal
              obligation so to do;

         (e)  no power to augment benefits has been exercised;

         (f)  no discretion has been exercised to admit to membership a present
              or former director or employee who would not otherwise be
              eligible for admission to membership;

         (g)  no discretion has been exercised to provide in respect of a
              member a benefit which would not otherwise be provided; 

         (h)  all benefits (other than a refund of contributions with interest
              where appropriate) payable on the death of a member while in
              service, or during a period of sickness or disability of a
              member, are fully insured under a policy effected with an
              insurance company to which the Insurance Companies Act 1982
              applies and the Warrantors are not aware of any circumstances in
              which such insurance would be invalidated;

         (i)  all liabilities or benefits accrued in respect of service
              completed at Completion are secured on an ongoing basis taking
              account of future increases in salary to normal retirement date
              and increases in pensions on the basis of realistic actuarial and
              financial assumptions and the obligations imposed on it as a
              result of Barber -v- Guardian Royal Exchange; and

         (j)  it is an exempt approved scheme and/or retirement annuity
              approved, or capable of being approved, under the Taxes Act and
              the Warrantors are not aware of any reasons why any such approval
              could be withdrawn.

30.3     No death, disability or retirement gratuity is currently being paid or
         has been promised nor will pending Completion be paid or promised by
         any Group Company to or in respect of any officer or employee of any
         Group Company.

PROPERTIES

31.      TITLE

31.1     The Properties comprise all the properties presently owned, occupied,
         held, controlled or otherwise used by any Group Company and a Group
         Company is in actual and exclusive occupation and is the legal and
         beneficial owner of each Property. 

31.2     The relevant Group Company's Leasehold title to each of the Properties
         is good and marketable (subject to prevailing market conditions).

31.3     Each Property is occupied or otherwise used by a Group Company by
         right of ownership or under the Leases, the terms of which permit its
         occupation or use as tenant and not


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         under any provision allowing the parting of or sharing of possession
         with group or associated companies and there are no outstanding
         circumstances which would restrict the continued possession and
         enjoyment of any Property or any part of it.

31.4     All deeds and documents necessary to prove title to each Property are
         in the possession and control of the Group Companies and consist of
         original deeds and documents or properly examined abstracts.

31.5     No person is in adverse possession of any Property or has acquired or
         is acquiring any rights or overriding interests (as defined by Section
         70, Land Registration Act 1925) adversely affecting any Property.

31.6     No Group Company has had occasion to make any claim or complaint in
         relation to any neighbouring property or its use or occupation and
         there are no disputes, claims, actions, demands or complaints in
         respect of any Property which are ongoing nor are any disputes,
         claims, actions, demands or complaints anticipated and no notices
         materially affecting any Property have been given or received and not
         complied with.

ENCUMBRANCES

32.1     No Property is subject to any outgoings other than business rates,
         water rates and insurance premiums and, in the case of leasehold
         properties, rent, insurance rent and service charges.

32.2     No Property is subject to any restrictive covenant, reservation,
         stipulation, easement, profits a prendre, wayleave, licence, grant,
         restriction, overriding interest, agreement for sale, estate contract,
         option, right of pre-emption or other similar agreement or right
         vested in third parties. 

32.3     So far as the Warrantors are aware there are no matters capable of
         registration against any Property as a Land Charge,  caution,
         inhibition, notice or restriction.

32.4     Where sub-paragraphs 32.1 to 32.3 inclusive have been disclosed
         against in the Disclosure Letter, the obligations and liabilities
         imposed and arising under the disclosed matter have been fully
         observed and performed and any payments in respect of it which are due
         and payable have been duly paid.

33.      PLANNING MATTERS

33.1     No notices have been received with regard to breaches of Planning
         Permissions which have not been complied with.

33.2     So far as the Warrantors are aware all necessary planning permissions
         have been obtained for each Property.


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33.3     Building regulation consents have been obtained with respect to all
         alterations and improvements to the Properties.

33.4     In respect of each Property, the Group Companies have complied in all
         respects with: 

         (a)  planning permissions, orders and regulations issued under the
              Planning Acts, the London Building Acts and building regulation
              consents and by-laws for the time being in force;

         (b)  all agreements under Section 52, Town and Country Planning Act
              1971 and planning obligations under Section 106, Town and Country
              Planning Act 1990; and

         (c)  all agreements made under Sections 38 and 278, Highways Act 1980,
              Section 33, Local Government (Miscellaneous Provisions) Act 1982,
              Section 18, Public Health Act 1936 and Section 104, Water
              Industry Act 1991.

33.5     So far as the Warrantors are aware all claims and liabilities under
         the Planning Acts or any other legislation have been discharged and no
         claim or liability, actual or contingent, is outstanding.

34.      STATUTORY OBLIGATIONS

34.1     So far as the Warrantors are aware each Group Company has complied
         with all applicable statutory and by-law requirements with respect to
         the Properties, and in particular with the requirements as to fire
         precautions under the Fire Precautions Act 1971 and under the Public
         Health Acts, the Offices, Shops and Railway Premises Act 1963, the
         Health and Safety at Work Act 1974, the Factories Act 1961 and the
         Shops Acts 1950 to 1956.

34.2     No licences are required in relation to any of the Properties under
         the Licensing Act 1988. 

35.      ADVERSE ORDERS

35.1     So far as the Warrantors are aware there are no compulsory purchase
         notices, orders or resolutions affecting any of the Properties and
         there are no circumstances likely to lead to any being made.

35.2     The Warrantors have not received any closing, demolition or clearance
         orders, enforcement notices or stop notices affecting the Properties.

36.      CONDITION OF THE PROPERTIES

36.1     Each Property enjoys the mains services of water, drainage,
         electricity and gas.

36.2     No Property is located in an area or subject to circumstances which
         makes it susceptible to subsidence or flooding.


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37.      LEASEHOLD PROPERTIES

37.1     Each Lease is valid and in full force and there are no circumstances
         which would entitle any landlord or other person to exercise any power
         of entry or take possession of the Properties.

37.2     Each Group Company has paid the rent and observed and performed the
         covenants on the part of the tenant and the conditions contained in
         any Lease to which it is a party. 

37.3     All licences, consents and approvals required from the landlords and
         any superior landlords for the grant of the Leases and during the
         continuance of the Leases have been obtained and any covenants on the
         part of the tenant contained in those licences, consents and approvals
         have been duly performed and observed.

37.4     There are no rent reviews outstanding or in progress under any Lease.

37.5     In the case of a lease granted for more than 21 years, the lease is
         registered at HM Land Registry with absolute title.

37.6     No Group Company has in the past been the tenant of or guarantor of
         any leasehold premises not listed in Schedule 5 in respect of which
         any obligations or liabilities could still accrue to that Group
         Company.

37.7     Where any property is occupied by a Group Company under an underlease
         then:

         (a)  there are no covenants contained in any superior lease which
              would affect the use and enjoyment by a Group Company of such
              premises;

         (b)  the grant of any underlease to a Group Company was strictly in
              accordance with the provisions of any superior lease; and

         (c)  the Warrantors will disclose details of the Intermediary Lease if
              they receive or are notified of them.

38.      TENANCIES

38.1     The Properties are not held subject to, and with the benefit of, any
         tenancy other than the Tenancies.  

38.2     Complete and accurate details of:

         (a)  the rent and any rent reviews and, with respect to rent reviews,
              the date for giving notice of exercise of the reviews and the
              operative review date;

         (b)  the term and any rights to break or renew the term;


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<PAGE>

         (c)  the obligations of the landlord and tenant in respect of
              outgoings, repairs, user, insurance services and service charge;

         (d)  any options, pre-emption or first refusal rights;

         (e)  the user required or permitted under the terms of the Tenancies;

         (f)  any entitlement of a tenant of the whole or any part of the
              Properties to compensation on quitting the premises let to him in
              respect of disturbance and improvements or otherwise; and

         in relation to each Tenancy are contained in the Disclosure Letter.

38.3     The Warrantors are not aware of any material or persistent breaches by
         a tenant of any of the Properties.

ENVIRONMENT

39.      CONTAMINATION

39.1     So far as the Warrantors are aware the Property is not entered in any
         register introduced under the Environment Act 1995 or otherwise as
         land which may be contaminated or which may have been put to a
         contaminative use.

40.      OTHER ENVIRONMENTAL MATTERS

40.1     No Group Company has received any notification under Environmental law
         from a Government appoint environmental agency concerning its use
         and/or occupation of the Property.

40.2     No Group Company has been threatened with any investigation or enquiry
         by any organisation, or received any complaint, in connection with the
         Environment.

40.3     Copies of any reports relating to the Environment commissioned by the
         Group are enclosed in the Disclosure Letter.

TAXATION

41.      EVENTS SINCE THE ACCOUNTS DATE

         (a)  Since the Accounts Date:

              (i)  there has been no disposal by any Group Company of any asset
                   or supply of any service or business facility of any kind,
                   including a loan of money or the letting, hiring or
                   licensing of any property whether tangible or intangible, in
                   circumstances where the consideration actually received or


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<PAGE>

                   receivable for such disposal or supply was less than the
                   consideration which could be deemed to have been received
                   for Tax purposes;

              (ii) no event has occurred which will give rise to a Liability to
                   Taxation on any Group Company, calculated by reference to
                   deemed, as opposed to actual Profits or which will result in
                   any Group Company becoming liable to pay or bear a Liability
                   to Taxation directly or primarily chargeable against or
                   attributable to another person, firm or company other than
                   another Group Company;

         (b)  no disposal has taken place or other event occurred which will,
              or may have, the effect of crystallising a Liability to Taxation
              which would have been included in the provision for deferred
              Taxation contained in the Accounts if such disposal or other
              event had been planned or predicted at the Accounts Date;

         (c)  no Group Company has made any payment, or incurred any obligation
              to make a payment, which will not be deductible in computing
              trading profits for the purposes of Tax, or be deductible as a
              management expense of an investment company;

         (d)  no Group Company has been a party to any transaction for which
              any Tax clearance provided for by statute has been, or could have
              been, obtained;

         (e)  no Group Company has paid, or become liable to pay, any interest
              or penalty in connection with any Tax, has otherwise paid any Tax
              after its due date for payment, or owes any Tax the due date for
              payment of which has passed or will arise in the next 30 days; 
              and

         (f)  no accounting period of any Group Company has ended (within the
              meaning of Section 12, ICTA).


42.      LIABILITY

42.1     Other than Taxation provided for in the Accounts or in respect of a
         liability Taxation occurring prior to 29 June 1996 or on Profits
         attributable to transactions in the ordinary course of trading since
         the Accounts Date, no Group Company is accountable or liable for any
         form of Taxation.

42.2     All documents which are required to be stamped or on which any form of
         Taxation is due and which are in the possession of any Group Company,
         or by virtue of which any Group Company has any right, have been duly
         and sufficiently stamped or the Taxation on such documents has been
         paid.

43.      RECORDS AND COMPLIANCE


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43.1     Since 28 June 1996 each Group Company has duly complied with all
         requirements imposed on it by any statute, law, regulation or similar
         provision, providing for, imposing or relating to Taxation and in
         particular:

         (a)  since 28 June 1996 each Group Company has punctually paid all
              Taxation for which it is liable and made all withholdings and
              deductions in respect, or on account, of any Taxation from any
              payments made by it which it is obliged or entitled to make and
              has accounted punctually and in full to the appropriate Tax
              Authority for all amounts so withheld or deducted;

         (b)  since 28 June 1996 each Group Company has properly prepared and
              punctually submitted all notices and returns required for Tax
              purposes and provided complete and accurate information to any
              Tax Authority and all such returns and information remain
              complete and accurate;

         (c)  since 28 June 1996 each Group Company has kept and maintained
              complete and accurate accounting records, invoices and other
              documents appropriate or requisite for Tax purposes and has
              sufficient records relating to past events to calculate its
              liability to Taxation or the relief from Taxation which would
              arise on any disposal or on the realisation of any assets owned
              at Completion;

         (d)  since 28 June 1996 there are no disputes, unsettled or
              outstanding assessments or appeals in respect of Taxation and no
              Group Company has since 28 June 1996 been subject to any back
              duty enquiry or other dispute with any Tax Authority and there
              are no circumstances which may give rise to such an enquiry or
              dispute;

         (e)  no Group Company has since 28 June 1996 been liable or will
              become liable to pay any interest, penalty, fine or sum of a
              similar nature in respect of Taxation nor, in relation to value
              added tax, has received any penalty liability notice, surcharge
              liability notice or other written notice or warning under the
              VATA;

         (f)  since 28 June 1996 each Group Company has duly submitted all
              claims and disclaimers which have been assumed to have been made
              for the purposes of the Accounts.

43.2     The draft computations of the liability to corporation tax of each
         Group Company for the period of twelve months to 31 March 1997 and the
         period of one month to 30 April 1997 ("the Draft Computations") are
         appended to the Disclosure Letter.  The Draft Computations are so far
         as the Warrantors are aware complete and accurate in all material
         respects and there are no facts, matter or circumstances known to the
         Warrantors which may give rise to any enquiry or dispute with the
         Inland Revenue and which would result in a material increase in the
         taxation provision of any Group Company for the accounting period
         ended on the Accounts Date if the Draft Computations are submitted to
         the Inland Revenue in their present form.


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43.3     No Group Company has since 28 June 1996 received any audit, visit or
         inspection from any Tax Authority and no such audit, visit or
         inspection is imminent or has been requested.

43.4     The amount of Tax chargeable on each Group Company or subject to
         withholding or deduction by that Group Company during any accounting
         period ending since 28 June 1996 has not to any material extent
         depended on any concession, agreement, dispensation or other formal or
         informal arrangement with any Tax Authority.

43.5     No Group Company is liable in respect of the period after 28 June 1996
         to be assessed to Tax as agent for, or on account of, or otherwise on
         behalf of, any other person.

43.6     No Group Company has since 28 June 1996 made any claim or application
         to pay any Tax by instalments or to defer the payment of any Tax.

44.      VAT

44.1     Each Group Company:

         (a)  is registered for the purpose of, and has since 28 June 1996
              complied in all respects with, the VATA and is not subject to any
              conditions imposed or agreed with H M Customs & Excise;  and

         (b)  is not, and has not  since 28 June 1996 been a member of a group
              for value added tax purposes under Section 43, VATA.

44.2     No Group Company has been  since 28 June 1996 subject to The Value
         Added Tax (Payments on Account) Order 1992.

44.3     No Group Company is, or has  since 28 June 1996 been, an agent or
         representative for, or otherwise liable to account for, value added
         tax for or on account of any other person pursuant to Sections 47 or
         48, VATA.

44.4     All supplies made by each Group Company are taxable supplies, and all
         input tax for which any Group Company has claimed credit since 28 June
         1996 has been paid by that Group Company, in respect of supplies made
         to it relating to goods or services used or to be used for the purpose
         of that Group Company's business.

44.5     No Group Company has since 28 June 1996 been required to give security
         under paragraph 4, Schedule 11, VATA.

44.6     No Group Company has made since 28 June 1996  , nor will prior to
         completion make, any election to waive exemption under paragraph 2,
         Schedule 10, VATA.

44.7     No Group Company has acquired any assets to which the provisions of
         Part XV, Value Added Tax Regulations 1995 (the Capital Goods Scheme)
         may apply.


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45. BALANCE SHEET VALUES

45.1     No Liability to Taxation will arise or be incurred on a disposal by
         any Group Company of any of its assets for:

         (a)  in the case of each asset owned at the Accounts Date, a
              consideration equal to the value attributed to that asset in
              preparing the Accounts; or

         (b)  in the case of each asset acquired since the Accounts Date, a
              consideration equal to the consideration given for the
              acquisition.

46.      CLOSE COMPANY

46.1     No Group Company is, nor has it at any time   since 28 June 1996
         either a close company within the meaning of Section 414, ICTA or a
         close investment holding company for the purposes of Section 13A,
         ICTA.

46.2     No Group Company has at any time since 28 June 1996 :

         (a)  made any loan, advance or payment or given any consideration or
              effected any transaction falling within Sections 419 to 422
              (inclusive), ICTA;

         (b)  made a transfer of value which is or may be liable to Tax under
              the provisions of Section 94, Inheritance Tax Act 1984, or

         (c)  made a transfer falling within the provisions of Section 125,
              TCGA.

47.      GROUP TRANSACTIONS

47.1     Since 28 June 1996 no Group Company has acquired any asset from any
         other company which was at the time of acquisition, and which has
         since the time of acquisition ceased to be a member of the same group
         of companies as that Group Company.

47.2     Since 28 June 1996 no Relevant Claim or Surrender has been claimed by
         any Group Company or taken into account in preparing the provision for
         Taxation in the Accounts (or in audited accounts for prior years)
         which could or might be effectively withdrawn, postponed, restricted
         or otherwise lost or not available and no Group Company is required to
         pay any sum in respect of any Relevant Claim or Surrender other than
         such sum as may be provided in the Accounts.

47.3     Since 28 June 1996 all Relevant Claims and Surrenders made by each
         Group Company were valid and have been or will be allowed by way of
         relief from Taxation.

48.      CAPITAL GAINS

         No Group Company has at any time since 28 June 1996:


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         (a)  made any claim under Sections 152 to 158 (inclusive), TCGA;  or

         (b)  acquired or disposed of any asset, or entered into any
              transaction whatsoever otherwise than by way of bargain at arms
              length.

49.      DEDUCTIBLE EXPENSES

         No Group Company is under any obligation to make any payment which, or
         to provide a benefit the cost of which, will be prevented from being
         deductible for Tax purposes, whether as a deduction in computing the
         profits of a trade or as an expense of management or as a charge on
         income.

50.      DIVIDENDS AND DISTRIBUTIONS

50.1     No Group Company has at any time since 28 June 1996 made any
         distribution within the meaning of Sections 209 to 211 (inclusive) and
         Section 418, ICTA except in respect of any dividends disclosed in the
         Accounts.

50.2     Save as provided in the Accounts, no Group Company is liable to make
         any payment of advance corporation tax or an amount equivalent to
         advance corporation tax.

50.3     Except as expressly contemplated by this Agreement no Group Company
         has  since 28 June 1996 purchased, repaid or redeemed or agreed to
         purchase, repay or redeem its share capital, or capitalised or agreed
         to capitalise in the form of redeemable shares or debentures any
         profits or reserves, or otherwise issued any share capital or other
         security as paid up otherwise than by the receipt of new consideration
         within the meaning of Section 254, ICTA.

50.4     No Group Company has at any time since 28 June 1996 been a party to or
         otherwise involved in any transaction to which Sections 213 to 218
         (inclusive), ICTA applied.

51.      INHERITANCE TAX AND GIFTS

51.1     No circumstances exist under which any power within Section 212,
         Inheritance Tax Act 1984 could be exercised in relation to, and there
         is no Inland Revenue charge (within the meaning of Section 237,
         Inheritance Tax Act 1984) attaching to, any shares or securities in or
         over any assets of any Group Company.

51.2     No Group Company is liable and there are no circumstances in existence
         since 28 June 1996 as a result of which it may become liable to be
         assessed to Tax as donor or donee of any gift or transfer or
         transferee of value.

52.      ANTI-AVOIDANCE

         Since 28 June 1996, no Group Company has entered into, or been party
         to, any scheme or arrangement designed partly or wholly for the
         purpose of avoiding or deferring Taxation,


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         such that a Liability to Taxation may arise after Completion as a
         result of or in consequence of such a scheme or arrangement.

53.      OVERSEAS MATTERS

53.1     Each Group Company has at all times since 28 June 1996 been resident
         for Tax purposes in the United Kingdom, which is the only country
         whose Tax Authorities seek to charge tax on the worldwide income,
         profits or gains of such company and no Group Company has during the
         past 6 years paid Tax and is not liable to pay Tax on its income,
         profits or gains to any Tax Authority in any other country.

53.2     No Group Company has  since 28 June 1996 carried out any transaction
         which is or was unlawful under Section 765, ICTA.

         PART II

         ACTIVISION WARRANTIES

54.      Activision is a corporation duly formed, validly existing and in good
         standing under the laws of its state of incorporation, with all
         necessary corporate power and authority under applicable laws to
         execute this Agreement and to consummate the transactions contemplated
         by this Agreement.

55.      The execution of this Agreement and the performance by Activision of
         its obligations under this Agreement have been duly authorised by all
         necessary corporate action.

56.      The Consideration Stock, upon its delivery to the Warrantors in
         accordance with the provisions of this Agreement, will have been duly
         and validly authorised, issued and delivered by Activision and the
         Consideration Stock will be fully paid for and non-assessable.

57.      Activision has previously made available to the Warrantors, and the
         Warrantors by their execution of this Agreement acknowledge receipt
         of, the following documents filed by Activision with the SEC:

         (a)  Activision's Annual Report on Form 10-K for the fiscal years
              ended 31 March 1997 and 1996; 

         (b)  Activision's Quarterly Report on Form 10-Q for the fiscal quarter
              ended 30 September 1997; and 

         (c)  Activision's Proxy Statement dated 29 July 1997 with respect to
              the annual meeting of Stockholders held on 24 September 1997
              ("THE SEC DOCUMENTS").  As of their respective dates, none of the
              SEC Documents contained any untrue


                                          83

<PAGE>

              statement of a material fact or omitted to state a material fact
              required to be stated in such documents or necessary to make the
              statements in such documents not misleading.  As of their
              respective dates, the SEC Documents complied in all material
              respects with the rules and regulations under the Securities
              Acts.

58.      Since 30 September 1997 there has been no material adverse change in
         the financial or trading position or property of Activision PROVIDED
         THAT Activision gives no warranty in relation to movements in its
         stock price on NASDAQ as a result of unusual market conditions nor as
         a result of the announcement of the transactions contemplated by this
         Agreement.


                                          84

<PAGE>

                                      SCHEDULE 5

                           (Particulars of the Properties)

LEASEHOLD PROPERTIES

1.  Unit 2, Holford Way, Witton, Birmingham held under a lease dated 21 May
    1986 made between Holford Estates Ltd (1) and CentreSoft Ltd (2) for a term
    of 25 years as is registered at HM Land Registry under title number
    WM 383599.

2.  Unit 3, Holford Way, Witton, Birmingham held under a lease dated 21 May
    1986 made between Holford Estates Ltd (1) and CentreSoft Limited (2) for a
    term of 25 years from 21 May 1986 as is registered at HM Land Registry
    under title number WM 383598.

3.  Unit 4, Holford Way, Witton, Birmingham held under a lease dated 12 July
    1990 made between Holford Estates Ltd (1) and CentreSoft Limited (2) for a
    term commencing on 25 March 1990 and expiring on 20 May 2011 as is
    registered at HM Land Registry under title number WM 510986.

4.  Unit 5, Holford Way, Witton, Birmingham held under a lease dated 6 August
    1987 made between Holford Estates Ltd (1) and The Timken Company (2) for a
    term of 25 years from 1 June 1987 as is registered at HM Land Registry
    under title number WM 412447.

5.  142 Wellhead Way, Witton Works, Witton, Birmingham held under a lease dated
    7 February 1997 made between Holford Estates Ltd (1) and PDQ Distribution
    Ltd (2) for a term of 2 years from 7 February 1997.

6.  142d Wellhead Way, Witton Works, Witton, Birmingham held under a lease
    dated 29 September 1997 made between Holford Estates Ltd (1) and PDQ
    Distribution Ltd (2) for a term commencing on 29 September 1997 and
    expiring on 6 February 1999.

                                   The Underleases

1.  Underlease of the ground and first floors of Units 2 and 3 Holford Way, as
    aforesaid dated 28 June 1996 made between CentreSoft Ltd (1) and Eidos
    Interactive Ltd (2) for a term of 2 years from 28 June 1996.


                                      85

<PAGE>


<TABLE>
<CAPTION>

                                                                 SCHEDULE 6

                                                             (DIVIDEND PAYMENT)


                                      LOAN INTEREST AND DIVIDENDS PAYABLE TO CLOSE SECURITIES LIMITED:-      1 DECEMBER 1997

AMOUNT LOAN             DESCRIPTION              PERIOD         RATE           GROSS       INCOME         ACT         NET
NOTES/SHARES                                                                                 TAX                    PAYMENT
                                                                                 L                       L
                                                                                              L                        L

<S>                <C>                           <C>            <C>          <C>          <C>            <C>        <C>
L2,000,000.00      15% Secured Subordinated      3 months       15%          75,000.00    15,000.00          0.00   60,000.00
                   Loan Notes 1998-2000
800,000            Redeemable Preference         3 months       12p p.s.     30,000.00         0.00      6,000.00   24,000.00
                   Shares of 10p
133,333            Convertible Preference        3 months       12p p.s.      5,000.00         0.00      1,000.00    4,000.00
                   Shares of L1
47,059             "A" Ordinary Shares of 1p     3 months       10p p.s.      1,470.58         0.00        294.12    1,176.46
19,608             "B" Ordinary Shares of 1p     3 months       10p p.s.        612.75         0.00        122.55      490.20

                                                                            112,083.33    15,000.00      7,416.67   89,666.66
                                                                            ----------    ---------      --------   ---------
                                                                            ----------    ---------      --------   ---------

</TABLE>



                                      86

<PAGE>

SIGNED by SIMON ANTHONY HUNT      )
in the presence of:               )



SIGNATURE OF WITNESS:

NAME:

ADDRESS:


OCCUPATION:



SIGNED by DAVID NEAL              )
in the presence of:               )



SIGNATURE OF WITNESS:

NAME:

ADDRESS:


OCCUPATION:



SIGNED by GARY CHRISTOPHER        )
HAWKINS in the presence of:       )



SIGNATURE OF WITNESS:

NAME:

ADDRESS:


<PAGE>

OCCUPATION:


<PAGE>

SIGNED by NORMAN CECIL BROWN      )
in the presence of:               )



SIGNATURE OF WITNESS:

NAME:

ADDRESS:



OCCUPATION:



SIGNED by Andrew Richard          )
Waterhouse in the presence of:    )



SIGNATURE OF WITNESS:

NAME:

ADDRESS:


OCCUPATION:



SIGNED by RICHARD ANDREW STEELE   )
in the presence of:               )



SIGNATURE OF WITNESS:

NAME:

ADDRESS:


<PAGE>

OCCUPATION:



SIGNED by ROGER GRAHAM SWINDELLS  )
in the presence of:               )



SIGNATURE OF WITNESS:

NAME:

ADDRESS:


OCCUPATION:



SIGNED by STEVEN GRAHAM VARNISH   )
in the presence of:               )



SIGNATURE OF WITNESS:

NAME:

ADDRESS:


OCCUPATION:




SIGNED by -                       )
for and on behalf of              )
ACTIVISION, INC.,                 )
in the presence of:               )



SIGNATURE OF WITNESS:


<PAGE>

NAME:

ADDRESS:


OCCUPATION:



<PAGE>
                                       

                            SHARE EXCHANGE AGREEMENT

between

1.  kappaphoenicis Beteiligungs GmbH, a German corporation, with its registered
    office in Munich, registered in the Commercial Register of Munich under
    number HRB 117436 ("Kappaphoenicis Beteiligungs GmbH")

2.  Activision, Inc., a Delaware Corporation with principal offices in Santa
    Monica, California, U.S.A. ("Activision, Inc.")

and


3.  Mr. Detlef Erhardt, Fasanenweg 3, D - 93133 Burglengenfeld, Germany
    ("Detlef Erhardt");

4.  Mrs. Ingrid Herrmann, Fasanenweg 3, D - 93133 Burglengenfeld, Germany
    ("Ingrid Herrmann");

    (Detlef Erhardt and Ingrid Herrmann collectively also the 
    "NBG-Shareholders")


                                    PREAMBLE


A.  NBG EDV Handels und Verlags GmbH 

    1.   The registered share capital of NBG EDV Handels- und Verlags GmbH
         ("NBG") with its registered office in Burglengenfeld, registered in
         the Commercial Register of Amberg under number HRB 1636, amounts to a
         nominal value of DM 100,000.00. It is divided into four (4) shares,
         all of which have been fully paid in.

         NBG was founded by Detlef Erhardt and Ingrid Herrmann on September 2,
         1991 by notarial deed of the notary Martin Eicher, Worth a. d. Donau,
         role of deeds no. 0903/1991; each of them subscribed to a share in the
         nominal value of DM 25,000.00 each. On June 17, 1996, the share
         capital
 was raised by notarial deed of the notary Walter Kolb in
         Burglengenfeld, role of deeds 


<PAGE>
                                       

         no. 1399/1996, to a nominal value of DM 100,000.00; Detlef Erhardt 
         and Ingrid Herrmann subscribed to a share in the nominal value of DM 
         25,000.00 each.

    2.   All shares in NBG are held as follows:

    2.1  Detlef Erhardt holds two shares with a nominal value of DM 25,000.00
         each;

    2.2  Ingrid Herrmann holds two shares with a nominal value of DM 25,000.00
         each.

B.  TARGET SOFTWARE VERTRIEBS GMBH

    1.   The registered share capital of TARGET SOFTWARE VERTRIEBS GMBH
         ("TARGET") with its registered office in Burglengenfeld, registered in
         the Commercial Register of Amberg under number HRB 2278, amounts to a
         nominal value of DM 50,000.00. It is divided into two shares, both of
         which have been fully paid in.

         TARGET was founded by Detlef Erhardt and Ingrid Herrmann on April 16,
         1997 by notarial deed of the notary Walter Kolb in Burglengenfeld,
         role of deeds no. 875/1997; each of them subscribed to a share in the
         nominal value of DM 25,000.00 each.

    2.   All shares in TARGET are held as follows:

    2.1  Detlef Erhardt holds one share with a nominal value of DM 25,000.00;

    2.2  Ingrid Herrmann holds one share with a nominal value of DM 25,000.00.

Kappaphoenicis Beteiligungs GmbH desires to exchange with the NBG-Shareholders
all their respective shares in NBG and TARGET



<PAGE>
                                       

   
(NBG and TARGET collectively also called the "NBG Companies") for shares in 
Activision, Inc.

NOW THEREFORE, it is agreed as follows:


                                   ARTICLE 1
                           TRANSFER OF THE NBG SHARES


1.1 Detlef Erhardt hereby transfers to Kappaphoenicis Beteiligungs GmbH his two
    shares in NBG with a nominal value of DM 25,000.00 each as stated in A.2.1
    of the preamble together with all ancillary rights, including, without
    limitation, the rights to vote such shares and the rights to all profits
    the distribution of which is resolved in the future. Kappaphoenicis
    Beteiligungs GmbH hereby accepts such transfer.

1.2 Ingrid Herrmann hereby transfers to Kappaphoenicis Beteiligungs GmbH her
    two shares in NBG with a nominal value of DM 25,000.00 each as stated in
    A.2.2 of the preamble together with all ancillary rights, including,
    without limitation, the rights to vote such shares and the rights to all
    profits the distribution of which is resolved in the future. Kappaphoenicis
    Beteiligungs GmbH hereby accepts such transfer.


                                   ARTICLE 2
                        TRANSFER OF THE TARGET SHARES


2.1 Detlef Erhardt hereby transfers to Kappaphoenicis Beteiligungs GmbH his
    share in TARGET with a nominal value of DM 25,000.00 as stated in B.2.1 of
    the preamble together with all ancillary rights, including, without
    limitation, the rights to vote such share and the rights to all profits the
    distribution of which is resolved in the future. 




<PAGE>
                                       

   
    Kappaphoenicis Beteiligungs GmbH hereby accepts such transfer.

2.2 Ingrid Herrmann hereby transfers to Kappaphoenicis Beteiligungs GmbH her
    share in TARGET with a nominal value of DM 25,000.00 as stated in B.2.2 of
    the preamble together with all ancillary rights, including, without
    limitation, the rights to vote such share and the rights to all profits the
    distribution of which is resolved in the future. Kappaphoenicis
    Beteiligungs GmbH hereby accepts such transfer.


                                   ARTICLE 3
                         ACTIVISION SHARES IN EXCHANGE


3.1 In exchange for the transfer of his shares in NBG as stated in A.2.1 of the
    preamble, Detlef Erhardt shall receive 130,597 shares in Activision, Inc.

3.2 In exchange for the transfer of her shares in NBG as stated in A.2.2 of the
    preamble, Ingrid Herrmann shall receive 130,597 shares in Activision, Inc.

3.3 In exchange for the transfer of his share in TARGET as stated in B.2.1 of
    the preamble, Detlef Erhardt shall receive 927 shares in Activision, Inc.

3.4 In exchange for the transfer of her share in TARGET as stated in B.2.2 of
    the preamble, Ingrid Herrmann shall receive 927 shares in Activision, Inc.

3.5 The shares in Activision, Inc. to be received by the NBG-Shareholders will
    be duly authorized, validly issued, fully paid and non-assessable shares of
    Activision, Inc.'s common stock US$ 0.000001 par value per share (the
    "Activision Shares") and will be delivered to the NBG-Shareholders free and
    clear of any and all liens, hypothecations, encumbrances or restrictions of
    any kind other than restrictions on 


<PAGE>
                                       

    transfer imposed by United States Federal Securities Laws and regulations 
    and by other applicable laws and the restrictions set forth in Article 6 
    of this Agreement (collectively, the "Permitted Restrictions").

3.6 Subject to Section 6.2 below, each of the NBG-Shareholders shall receive
    his or her respective number of Activision Shares on the date of this
    Agreement. The respective share certificates (other than to be deposited in
    escrow under Section 6.2) have been handed over to the NBG-Shareholders.
    Activision, Inc. shall hand over on behalf of the NBG-Shareholders the
    remaining Activision Shares to the Escrow Agent under the document called
    Warranty Escrow Agreement, still to be signed by City National Bank, a copy
    of which is attached hereto as EXHIBIT A.


                                   ARTICLE 4
                         GUARANTEES OF NBG-SHAREHOLDERS


4.1 Guarantees with respect to the NBG shares, the TARGET shares and the 
    NBG-Shareholders

    As an inducement to Kappaphoenicis Beteiligungs GmbH and Activision, Inc. 
    and recognizing Kappaphoenicis Beteiligungs GmbH's and Activision Inc.'s 
    reliance thereupon, the NBG-Shareholders, jointly and severally, 
    guarantee in the form of an independent guarantee ("selbstandiges
    Garantieversprechen") to Kappaphoenicis Beteiligungs GmbH and Activision, 
    Inc., each of them separately, with respect to the shares in the NBG 
    Companies that as of the date of this Agreement:

    (1)  each of the NBG-Shareholders has full power and authority to enter
         into and perform this Agreement, which constitutes a binding
         obligation on him or her in accordance with its terms;



<PAGE>
                                       

   
    (2)  the statements in the preamble of this Agreement are complete and
         correct. The respective registered share capital of the NBG Companies
         stated in the preamble has been fully paid in; no refunds have been
         made (Sec. 30 para. 1 GmbHG, German Act on Limited Liablity
         Companies). 

         There is no liability to affect further contributions ("Nachschusse")
         pursuant to Sec. 26 GmbHG (German Act on Limited Liability Companies);

               (3)  NBG-Shareholders hold each of their shares as stated in 
                    the preamble as sole beneficial owner in their own name 
                    and on their own account and can dispose of them freely 
                    and without consent of any third party. The shares are 
                    free of any encumbrances for the benefits of third 
                    parties or other rights of third parties and there is no 
                    agreement or arrangement to give or create any such 
                    encumbrance or right;

               (4)  the NBG-Shareholders are entitled to transfer the shares 
                    as stated in the preamble to Kappaphoenicis Beteiligungs 
                    GmbH on the terms of this Agreement without the consent 
                    of any third party;

               (5)  each of the NBG-Shareholders acknowledges and understands 
                    that he or she is responsible for obtaining independent 
                    legal advice with respect to the Activision Shares and 
                    the restrictions attached to NBG-Shareholders' right to 
                    sell or transfer in any way said Activision Shares; that 
                    such NBG-Shareholder has been given the opportunity to 
                    ask questions of and receive answers from, the officers 
                    of Activision, Inc. concerning Activision, Inc. and its 
                    business and the terms and conditions of the transactions 
                    contemplated by this Agreement; and that in view of 
                    NBG-Shareholders' extensive discussions with 
                    representatives of Activision, Inc. concerning such 
                    transactions, disclosures by Activision, Inc. to 
                    NBG-



<PAGE>
                                       

   
                    Shareholders shall constitute disclosure to each of the 
                    NBG-Shareholders and all NBG-Shareholders for all 
                    purposes, including without limitation for purposes of 
                    with the applicable securities laws regarding disclosure;

               (6)  the shares transferred by each of the NBG-Shareholders do 
                    not constitute the entire assets of that NBG-Shareholder 
                    within the meaning of Sec. 419 BGB (German Civil Code);

               (7)  each of the NBG-Shareholders guarantees that he or she is 
                    not an U.S.-citizen or -resident;

               (8)  none of the NBG Companies or any of the NBG-Shareholders 
                    has taken any action or engaged in any activities that 
                    would preclude Activision, Inc.'s ability to account for 
                    the exchange of shares (the "Exchange") under this 
                    Agreement as a pooling of interests;

               (10) each of the NBG-Shareholders has signed and delivered the 
                    document called the Warranty Escrow Agreement, still to 
                    be signed by City National Bank, a copy of which is 
                    attached hereto and incorporated as EXHIBIT A;

               (11) Detlef Erhardt and Ingrid Herrmann have executed and 
                    delivered their employment agreements with NBG in the 
                    form and substance as previously discussed with 
                    representatives of Activision, Inc.;

               (12) the members of the Supervisory Board, if any, of each of 
                    the NBG Companies resign as of the date of this Agreement;

4.2       Guarantees with Respect to NBG Companies

          As an inducement to Kappaphoenicis Beteiligungs GmbH and 
          Activision, Inc. and recognizing Kappaphoenicis 



<PAGE>
                                       

   
          Beteiligungs GmbH's and Activision, Inc.'s reliance thereupon, the 
          NBG-Shareholders, jointly and severally, guarantee in the form of 
          an independent guarantee ("selbstandiges Garantieversprechen") to 
          Kappaphoenicis Beteiligungs GmbH and Activision, Inc., each of them 
          separately, with respect to the NBG Companies that as of the date 
          of this Agreement unless stipulated herein otherwise:

               (1)  NBG and TARGET are limited liability companies 
                    (Gesellschaften mit beschrakter Haftung), duly organized 
                    under the laws of the Federal Republic of Germany and 
                    validly existing. 

                    The NBG Companies have full corporate power and authority 
                    to own the assets and to carry on the respective business 
                    as now being conducted;

               (2)  copies of the presently valid Articles of Association of 
                    each of the NBG Companies have been handed over to 
                    Kappaphoenicis Beteiligungs GmbH. There exist no 
                    Shareholders' Resolutions and/or obligations concerning 
                    any amendments of the Articles of Association with the 
                    exception of the Shareholders' Resolution at NBG 
                    concerning its conversion into a stock corporation which 
                    has been handed over to Kappaphoenicis Beteiligungs GmbH;

               (2a) in the last twelve (12) months there have been made no 
                    dividend or other payments to the NBG-Shareholders nor do 
                    there exist any shareholders' resolutions regarding any 
                    future dividend or other payments to the NBG-Shareholders;

               (3)  the copies of the annual accounts as of June 30, 1997 of 
                    each of the NBG Companies (the "Financial Statements"), 
                    which have been handed over to Kappaphoenicis 
                    Beteiligungs GmbH, have been prepared with the care of an 
                    duly acting business man in 



<PAGE>
                                       

                    accordance with the German principles of accounting and 
                    book-keeping ("GOB") pursuant to Sec. 243 HGB (German 
                    Commercial Code). The Financial Statements fairly present 
                    in all material respects the financial and profit 
                    situation of the NBG Companies at the respective dates of 
                    and for the periods referred to in such Financial 
                    Statements, observing continuity in the accounting and 
                    evaluation methods. The NBG Companies' Financial 
                    Statements were delivered to Kappaphoenicis Beteiligungs 
                    GmbH prior to the execution of this Agreement. The NBG 
                    Companies are in good financial standing;

               (4)  except as set forth in Schedule 4.2 (4) which is attached 
                    to this Agreement, the NBG Companies have no liabilities 
                    or obligations of any nature (whether fixed or 
                    contingent) as of the date of this Agreement except for 
                    liabilities reflected or reserved against in the 
                    Financial Statements; furthermore, the NBG Companies are 
                    not liable for any indemnity or warranty risks of more 
                    than DM 100,000.00 in total with respect to services 
                    and/or deliveries performed prior to the date of this 
                    Agreement unless sufficient reserves have been created in 
                    respect thereof in the Financial Statements;

               (4a) the operating profit (i.e. net revenues minus operating 
                    expenses) for the first quarter of NBG's current fiscal 
                    year, i. e. for the quarter until September 30, 1997, 
                    amounts to a minimum of DM 160,000.00;

               (4b) except as set forth in Schedule 4.2 (4b), there exist no 
                    loans to or from the NBG-Shareholders;

               (5)  the NBG Companies have duly withheld or collected, and to 
                    the extent required, paid to the proper governmental 
                    authority or other person all taxes due as of the date of 
                    this Agreement, including all VAT, 


<PAGE>
                                       

                    that each of the NBG Companies is legally required to 
                    withhold, collect and pay.

                    No external tax audit took place yet. There are no 
                    ongoing tax audits of or relating to any of the NBG 
                    Companies. As of September 30, 1997, the financial 
                    reporting has been prepared according to the tax 
                    reporting standards; since that date the company has 
                    filed all necessary tax statements and/or advance 
                    statements and has paid all amounts shown on such 
                    statements and the statements have been prepared in good 
                    faith and reflect all amounts due by their respective 
                    dates;

               (6)  the business of each of the NBG Companies has been 
                    properly conducted since June 30, 1997 in accordance with 
                    the ordinary course of business. Since then, there has 
                    not been any material adverse change of the business, 
                    operations, properties, prospects, assets or conditions, 
                    financial or otherwise, of each of the NBG Companies, and 
                    no event has occurred or circumstance exists that may 
                    result in such a material adverse change, in particular:

                    (a)  No liabilities of any kind have been created for 
                         which there has not been a reasonable quid pro quo; 
                         in particular, no contracts with danger of losses 
                         other than ordinary commercial losses at the time 
                         the contracts were awarded have been accepted;

                    (b)  No assets have been assigned without reasonable 
                         consideration;

                    (c)  No liabilities have been created which fall outside 
                         the ordinary course of business;

                    (d)  No substantial agreements of each of the NBG 
                         Companies have been concluded, changed or 



<PAGE>
                                       

                         terminated which fall outside the ordinary course of 
                         business;

                    (e)  There has been no damage or loss which either 
                         individually or cumulatively could have a material 
                         effect on the existence of each of the NBG Companies 
                         or its financial situation;

                    (f)  no hidden distributions of profits have been made.

               (7)  Each of the NBG Companies has paid, or has made provision 
                    for the payment of, all employee's contributions and 
                    employer's contributions to social insurance and pension, 
                    deferred compensation and other employee benefit payments 
                    required to be made by each of the NBG Companies with 
                    respect to its employees and agents and which are due as 
                    of the date of this Agreement. The consummation of the 
                    transactions contemplated by this Agreement will not 
                    result in the payment, vesting or accelaration of any 
                    benefit available to the employees of each of the NBG 
                    Companies under any pension plan or other employee 
                    benefit plan or under any employment contract or other 
                    arrangements;

               (8)  Schedule 4.2 (8), which is attached to this Agreement, 
                    contains a complete and correct list of all industrial 
                    property rights (patents, trademarks, corporate and 
                    design patents) and intellectual property rights, which 
                    are owned by each of the NBG Companies. None of the NBG 
                    Companies is in violation of and/or has breached any 
                    licensing agreement with respect to patents, trademarks, 
                    copyrights or other intellectual property. All of the 
                    patents, trademarks, copyrights and other intellectual 
                    property used by each of the NBG Companies in the conduct 
                    of its business are either owned by the respective NBG 
                    company or can be used according to 



<PAGE>
                                       

                    licensing agreements to which the respective NBG company 
                    is party and which are valid. Except in the sphere of 
                    distribution (which for these purposes means merely 
                    purchasing and reselling of finished goods), for which 
                    Schedule 4.2 (8a) contains a complete list of all known 
                    infringements, and all pending or threatened claims of 
                    infringement, none of the patents, trademarks, copyrights 
                    or other intellectual property rights by each of the NBG 
                    Companies in the conduct of its business infringes on the 
                    intellectual property rights of any third party;

               (9)  the conduct and operation of each of the NBG Companies' 
                    businesses have been and are in conformity with all 
                    applicable laws and regulations and none of the NBG 
                    Companies has received any notice asserting or suggesting 
                    any failure, or potential failure, to comply with or 
                    confirm to any such laws or regulations;

               (10) all assets of each of the NBG Companies which can be 
                    included in the balance sheet are fully owned by the 
                    respective NBG company without being subject to any 
                    charges. None of the NBG Companies is subject to any 
                    restrictions on disposal in relation to these items. 
                    Excepted are reservations of title and other security 
                    rights in accordance with normal business practice. 
                    Schedule 4.2.(10), which is attached to this Agreement, 
                    contains a complete and correct list of all assets which 
                    are subject to reservations of title or other security 
                    rights.

                    All objects in the asset side of each of the NBG 
                    Companies and used by the respective NBG company in its 
                    business are in an operational state;

               (11) each contract, agreement, commitment or understanding to 
                    which an NBG company is a party that is material to the 
                    respective NBG company's business, or that 


<PAGE>
                                       

                    involves the payment by, or to, the respective NBG 
                    company of more than DM 40,000.00 in any twelve (12) 
                    months period (collectively, the "Material Contracts") is 
                    listed on Schedule 4.2 (11), which is attached to this 
                    Agreement. of the NBG Companies has received notice of 
                    default with respect to and none of the NBG Companies is 
                    in default under any of the Material Contracts. The 
                    contracts with customers of any of the NBG-Companies 
                    contain no unusual obligations for any of the NBG 
                    Companies that could result in a material loss under such 
                    contract;

               (12) none of the NBG Companies has entered into any 
                    agreements, undertakings or commitments which would in 
                    any material way prevent or restrict the respective NBG 
                    company's business in continuing or further developing 
                    its business and/or would legally prevent or restrict its 
                    ability to compete with other companies;

               (13) unless otherwise listed in Schedule 4.2 (13), which is 
                    attached to this Agreement, no law suits that are or 
                    could be material to an NBG Company or with an amount 
                    claimed of DM 5,000.00 or more, administrative 
                    proceedings or investigations against any of the NBG 
                    Companies and/or the respective representatives and/or 
                    employees of the respective NBG company, the latter two 
                    only with respect to the business of the respective NBG 
                    company, have been initiated, notified or to the best 
                    knowledge of the NBG-Shareholders threatened to any of 
                    the NBG Companies, nor are any material circumstances 
                    known that would make the initiation of any such law 
                    suits, administrative proceedings or investigations 
                    appear likely to occur;

               (14) none of the information concerning each of the NBG 
                    Companies, each of the NBG Companies' business or the 
                    NBG-Shareholders that each of the NBG Companies or the 
                    NBG-Shareholders will supply Activision, Inc. for



<PAGE>
                                       


                    use in any of Activision, Inc.'s filings under United 
                    States Securities Laws will contain any untrue statement 
                    of a material fact or omit to state a material fact 
                    necessary in order to make the statements made therein, 
                    in light of the circumstances under which they will be 
                    made, not misleading;

               (15) Schedule 4.2 (15), which is attached to this Agreement, 
                    contains a complete and accurate list of the following 
                    information for each employee or director of each of the 
                    NBG Companies, including each employee on leave of 
                    absence or layoff status, stating name, job, title, 
                    professional qualifications, permits held, current 
                    compensation paid or payable and any change in 
                    compensation since June 30, 1997, vacation accrued, and 
                    service credited for purposes of eligibility and vesting 
                    under any social insurance or employee benefit plan or 
                    under any employment contracts or other arrangements; the 
                    two standard employment contracts of the NBG Companies 
                    have been handed over to Activision, Inc., and there are 
                    no material variations from these standard forms for any 
                    employee;

               (16) none of the NBG Companies has any real property rights or 
                    similar rights;

               (17) notwithstanding any other guarantees of NBG-Shareholders, 
                    no guarantee of NBG-Shareholders in this Agreement and no 
                    statement in any Schedule or Exhibit hereto omits to 
                    state a material fact necessary to make the statements 
                    herein or therein, in light of the circumstances in which 
                    they were made, not misleading. None of the 
                    NBG-Shareholders knows of any information, which is, or 
                    which may reasonably be regarded as, material to an 
                    accurate appraisal of the NBG Companies' businesses, 
                    assets, liabilities and affairs of each of the NBG 
                    Companies 




<PAGE>
                                       


                    and which has not been disclosed in writing to 
                    Kappaphoenicis Beteiligungs GmbH;

               (18) with the exception of the two Kreditgarantiegemeinschaft 
                    fur Handel in Bayern GmbH-loans given by Bayerische 
                    Landesanstalt fur Aufbaufinanzierung in the amount of DM 
                    1,000,000.00 and DM 400,000.00, none of the NBG 
                    Companies' contracts with third parties contains any 
                    change of control provisions (Kundigungsrechts oder 
                    auflosende Bedingung bei Wechsel des 
                    Mehrheitsgesellschafters) which could trigger termination 
                    of the respective contract in consequence of the signing 
                    of this Agreement and/or the transactions contemplated by 
                    this Agreement; each of the NBG Companies' contracts with 
                    third parties will stay in force after the date of this 
                    Agreement on identical terms and conditions immediately 
                    subsequent to the date of this Agreement;

               (18a) NBG-Shareholders shall use their best efforts to 
                    maintain the existing banking relationships on their 
                    respective current levels;

               (19) Schedule 4.2 (19), which is attached to this Agreement, 
                    contains a complete and accurate list of all insurance 
                    contracts of each of the NBG Companies;

               (20) Schedule 4.2 (20), which is attached to this Agreement, 
                    contains a complete and correct list of all bank 
                    accounts, brokerage and/or securities accounts and/or 
                    custody accounts, if any, of each of the NBG Companies 
                    and of all persons authorized to sign;

               (21) Schedule 4.2 (21), which is attached to this Agreement, 
                    contains a complete and correct list of all powers of 
                    attorney issued by each of the NBG Companies;



<PAGE>
                                       


               (22) if existent, the board of directors of each of the NBG 
                    Companies has approved of the transactions under this 
                    Agreement. All necessary approvals by each of the NBG 
                    Companies and/or the NBG-Shareholders have been obtained; 
                    any rights of first refusal have been waived.

                                  ARTICLE 5
     GUARANTEES OF KAPPAPHOENICIS BETEILIGUNGS GMBH AND ACTIVISION, INC.


5.1            Guarantees

               As an inducement to the NBG-Shareholders and recognizing the 
               NBG-Shareholders' reliance thereupon, Kappaphoenicis 
               Beteiligungs GmbH and Activision, Inc. guarantee in the form 
               of an independent guarantee ("selbstandiges 
               Garantieversprechen") to the NBG-Shareholders that:

               (1)  Activision, Inc. is a corporation duly organized, validly 
                    existing and in good standing under the laws of the State 
                    of Delaware, U.S.A. Activision, Inc. has full corporate 
                    power and authority to own its assets and to carry on its 
                    business as now being conducted;

               (2)  Kappaphoenicis Beteiligungs GmbH is a corporation duly 
                    organized, validly existing and in good standing under 
                    the laws of Germany;

               (3)  the copy of the Amended and Restated Certificate of 
                    Incorporation of Activision, Inc. as amended (the 
                    "Certificate of Incorporation") and By-laws of 
                    Activision, Inc. as currently in effect, previously 
                    delivered to the NBG-Shareholders, is complete and 
                    correct;

               (4)  Kappaphoenicis Beteiligungs GmbH has previously made 
                    available to the NBG-Shareholders (and the NBG-



<PAGE>
                                       


                    Shareholders by their execution of this Agreement 
                    acknowledge receipt of) the following documents filed by 
                    Activision, Inc. with the United States Securities and 
                    Exchange Commission: (i) Activision, Inc.'s Annual 
                    Reports on Form 10-K for the fiscal years ended March 31, 
                    1997 and 1996; and (ii) Activision, Inc.'s Quarterly 
                    Reports on Form 10-Q for the fiscal quarters ended June 
                    30, 1997, and September 30, 1997; (the "SEC Documents"). 
                    As of their respective dates, none of the SEC Documents 
                    contained any untrue statements of a material fact or 
                    omitted to state a material fact required to be stated in 
                    such documents or necessary to make the statements in 
                    such documents not misleading. As of their respective 
                    dates, the SEC Documents complied as to form in all 
                    material respects with rules and regulations under the 
                    Securities Exchange Act of 1934, as amended;

               (5)  the execution, delivery and performance of this Agreement 
                    by Kappaphoenicis Beteiligungs GmbH has been authorized 
                    by all necessary corporate action. This Agreement 
                    constitutes the legal, valid and binding obligation of 
                    Kappaphoenicis Beteiligungs GmbH, enforceable against 
                    Kappaphoenicis Beteiligungs GmbH in accordance with its 
                    terms. Kappaphoenicis Beteiligungs GmbH has the absolute 
                    and unrestricted right, power, authority and capacity to 
                    execute and deliver this Agreement and the other 
                    documents to be delivered by Kappaphoenicis Beteiligungs 
                    GmbH hereunder and to perform the obligations under this 
                    Agreement and such other documents;

               (6)  the authorized capital stock of Activision, Inc. on the 
                    date of this Agreement is as set forth in the Certificate 
                    of Incorporation. The Activision Shares, upon their 
                    delivery to the Shareholders in accordance with the 
                    provisions of this Agreement, will have been 



<PAGE>
                                       


                    duly authorized, validly issued and fully paid for and 
                    non-assessable;

               (7)  no guarantee of Kappaphoenicis Beteiligungs GmbH in this 
                    Agreement and no statement by Kappaphoenicis Beteiligungs 
                    GmbH in any Schedule or Exhihit hereto contains or shall 
                    contain an untrue statement of a material fact or omits 
                    to state a material fact necessary to make the statements 
                    herein or therein, in light of the circumstances in which 
                    they were made, not misleading. Kappaphoenicis 
                    Beteiligungs GmbH does not know of any information which 
                    is, or which may reasonably be regarded as, material to 
                    an accurate appraisal of the business, assets, 
                    liabilities and affairs of Kappaphoenicis Beteiligungs 
                    GmbH and Activision, Inc. and which has not been 
                    disclosed to NBG-Shareholders;

               (8)  Kappaphoenicis Beteiligungs GmbH will use its 
                    commercially reasonable efforts to be substituted as the 
                    guarantor of the NBG Companies' loans listed in Schedule 
                    5.1 (8) or, if the banks do not agree to such 
                    substitution, to indemnify Detlef Erhardt and Ingrid 
                    Herrmann if any of the NBG Companies fails to repay the 
                    respective loans, resulting in a call on Detlef Erhardt's 
                    and Ingrid Herrmann's guarantee.

                                   ARTICLE 6
                     COVENANTS REGARDING ACTIVISION SHARES


6.1            Restrictions on Sale of Activision Shares

               The NBG-Shareholders acknowledge and agree that the Activision 
               Shares will be issued to the NBG-Shareholders without 
               registration under the Securities Act of 1933, as amended (the 
               "Securities Act"), based upon the "private offering 
               exemption", in reliance upon appropriate written 



<PAGE>
                                       


               representations from the NBG-Shareholders; further evidenced 
               by restrictive legends on the certificates representing 
               Activision Shares and "stop transfer" instructions to 
               Activision Inc.'s transfer agent. Activision Shares will be 
               "restricted securities" within the meaning of the Securities 
               Act and the related rules and regulations. Notwithstanding the 
               provisions of the Securities Act, the NBG-Shareholders 
               acknowledge and agree that the NBG-Shareholders shall not 
               sell, pledge, gift, hypothecate or otherwise transfer or 
               dispose of any of the Activision Shares until the issuance by 
               Activision, Inc. of its first earnings press release including 
               at least thirty (30) days post-transaction combined operations.

6.2            Share Hold Back

               In order to insure that the representations, warranties and/or 
               guarantees made by the NBG-Shareholders under this Agreement 
               are not breached, and in order to provide a source of 
               indemnification of Kappaphoenicis Beteiligungs GmbH and/or 
               Activision, Inc. pursuant to Article 7, each of the 
               NBG-Shareholders agree that 10 % of the Activision Shares to 
               be received by them under this Agreement shall be deposited in 
               an escrow account (the "Escrow Account") pursuant to a 
               Warranty Escrow Agreement in the form attached hereto as 
               EXHIBIT A (the "Warranty Escrow Agreement") on the date of 
               this Agreement to provide a source from which Kappaphoenicis 
               Beteiligungs GmbH can be reimbursed for any amounts due under 
               Article 7 below. Such Activision Shares shall be held in the 
               Escrow Account during such period of time as set forth in the 
               Warranty Escrow Agreement (the "Hold Period"). Any dividends 
               and distributions with respect to such Activision Shares while 
               held in the Escrow Account also shall be retained in the 
               Escrow Account until the expiration of the Hold Period. Any 
               offsets or deductions made from Activision Shares held in the 
               Escrow Account on account of any breach shall be made on the 
               last business day of the Hold Period, or at such other time as 


<PAGE>
                                       


               set forth in the Escrow Agreement, and shall be based upon the 
               price of US$ 15.5625 per Activision share and an exchange rate 
               of US Dollars to Deutsche Marks of $ 0.576710/DM 1.00. All 
               Activision Shares subject to such offset or deduction shall be 
               canceled by Activision, Inc. and the remaining Activision 
               Shares, together with any dividends paid or distributions made 
               with respect to such Activision Shares that have not been 
               canceled, shall be then delivered to the NBG-Shareholders in 
               accordance with their respective interests. Notwithstanding 
               the foregoing, Activision Shares held in the Escrow Account 
               pursuant to the provisions of this Section 6.2 shall not be 
               deemed the sole source of recourse by Kappaphoenicis 
               Beteiligungs GmbH and/or Activision, Inc. for indemnification 
               under this Agreement and the NBG-Shareholders shall remain at 
               all times jointly and severally liable in accordance with 
               Article 7 below.

6.3            Registration of Activision Shares

               (1)  Registration on Form S-3

                    Activision, Inc. agrees to use its best efforts to file 
                    with the United States Securities and Exchange Commission 
                    (the "SEC"), within sixty (60) days after the date of 
                    this Agreement, a registration statement on Form S-3, or 
                    on such other form which may be mutually acceptable to 
                    the parties, registering under the Securities Act, 
                    pursuant to Rule 415 under the Securities Act ("Rule 
                    415") (if available), the offer and sale in the future of 
                    up to all of Activision Shares issued by Activision, Inc. 
                    pursuant to this Agreement. Activision, Inc. further 
                    agrees to (a) use its best efforts to cause such 
                    registration statement to be declared effective by the 
                    SEC within a time frame which is as soon as practible 
                    under the circumstances, (b) maintain the effectiveness 
                    of such registration statement or successor registration 
                    statement filed by Activision, Inc. for the purpose 



<PAGE>
                                       

                    of registering the Activision Shares (such registration 
                    statements being collectively referred to as the 
                    "Registration Statement") until Activision Shares are 
                    eligible to be resold without restriction on disposition 
                    pursuant to the Securities Act and its related rules and 
                    regulations, (c) update the prospectus included in the 
                    Registration Statement (the "Prospectus") from time to 
                    time as may be necessary to assure that the Prospectus 
                    does not make any untrue statement of a material fact or 
                    omit to state a material fact necessary in order to make 
                    the Prospectus not misleading, and (d) provide such 
                    number of copies of the Registration Statement and the 
                    Prospectus (as so updated) to the NBG-Shareholders as 
                    they may reasonably request in order to facilitate the 
                    public sale or other disposition of Activision Shares 
                    covered by such Registration Statement.

               (2)  Costs and Expenses

                    Activision, Inc. shall bear the filing and registration 
                    fees and the costs incurred for its legal counsel, 
                    accounting and all other costs and expenses, excluding 
                    costs for legal counsel and accountants for the 
                    NBG-Shareholders, which may be incurred in connection 
                    with the preparation and filing of the Registration 
                    Statement pursuant to Section 6.3 (1). The 
                    NBG-Shareholders shall be responsible for broker's 
                    commissions and underwriters' fees in connection with the 
                    sale of the Activision Shares.

               (3)  The rights granted in this Section 6.3 are not assignable 
                    to any transferee of Activision Shares acquired by the 
                    NBG-Shareholders under this Agreement.



<PAGE>
                                       


               (4)  Cooperation and Indemnification

                    The NBG-Shareholders, jointly and severally, agree that 
                    they will provide all required cooperation and furnish 
                    all necessary information and enter into such agreements 
                    customarily required of selling stockholders in 
                    connection with the preparation of the Registration 
                    Statement filed under the terms of this Section 6.3 and 
                    the disposition of their Activision Shares pursuant to 
                    such Registration Statement, and the NBG-Shareholders, 
                    jointly and severally, will represent and warrant the 
                    accuracy and completeness of all written information so 
                    furnished for inclusion in the Registration Statement and 
                    agree to indemnify and hold Activision, Inc. and its 
                    directors, officers, shareholders and underwriters 
                    harmless from and against any liability, loss or damage 
                    (including costs and attorneys' fees), incurred by or 
                    sustained by or asserted against any of them arising out 
                    of or based on any untrue statement (or alleged untrue 
                    statement) of a material fact contained in the 
                    information provided by the NBG-Shareholders or based on 
                    any omission (or alleged omission) to state a material 
                    fact required to be stated therein or necessary to make 
                    the statements therein not misleading.

               (4b) Activision will indemnify and hold the NBG-Shareholders 
                    harmless from and against any liability, loss or damage 
                    (including costs and attorneys' fees) (collectively 
                    "Damages") incurred by or sustained by or asserted 
                    against any of them arising out of or based on any untrue 
                    statement (or alleged untrue statement) of material fact 
                    contained in the Registration Statement or based on any 
                    omission (or alleged omission) to state a material fact 
                    required to be stated therein or necessary to make the 
                    statements herein not misleading, except to the


<PAGE>
                                       


                    extent such Damages arise out of or are based on any 
                    information provided by the NBG-Shareholders.


                                   ARTICLE 7
                                   LIABILITY


7.1            Liability

               Unless stipulated otherwise in this Agreement, in the event of 
               a breach of representations, warranties and/or guarantees 
               under this Agreement, the breaching party shall put the other 
               party into the position the party would have been if such 
               representations, warranties and/or guarantees had not been 
               breached. If it is not possible to do this within four (4) 
               weeks after the breaching party has received such request from 
               the other party, the other party and/or - if the breaching 
               party are the NBG-Shareholders - also the respective NBG 
               company can request full pecuniary compensation from the 
               breaching party, in particular, all claims, demands, losses, 
               costs, expenses, obligations, liabilities, actions, suits, 
               damages including without limitation interests and penalties, 
               counsel fees. Any further statutory remedies, including but 
               not limited to cancellation of contract (Wandlung, Rucktritt) 
               and diminuation of the purchase price (Minderung) are excluded 
               to the extent possible under statutory law. This limitation 
               shall not be applicable in case of defect of title 
               (Rechtsmangel) of one or more of the shares in any of the NBG 
               Companies.

               Claims shall be excluded if such claims are not raised until 
               two (2) years after the date of this Agreement; provided that 
               in respect of the guarantees regarding taxes the expiry date 
               shall not be until 6 months after the assessment by the 
               respective governmental authority has become final and 
               binding. The respective NBG-Shareholders shall be given the 
               opportunity at their own cost to take 



<PAGE>
                                       

               part in an external tax audit and to file an appeal against 
               tax demands with which they are charged or to demand the 
               filing of such an appeal.

               The aforementioned expiry dates are deadlines 
               (Ausschlussfristen) within which the party making a claim must 
               have sent a written notification of the claims explaining the 
               grounds herefor in reasonable detail.

7.2            Liability Limitation

               No party hereto shall have an obligation toward the others 
               under representations, warranties and/or guarantees or related 
               statutory claims unless and until the aggregate amount of such 
               claims against such party exceeds DM 100,000.00 or the 
               equivalent in any other currency, and if so, then only the 
               amount over such DM 100,000.00 shall be payable to the other 
               party.

               None of the NBG-Shareholders shall be liable to Kappaphoenicis 
               Beteiligungs GmbH and/or Activision, Inc. under any provision 
               of this Agreement or a related statutory provision for an 
               amount in excess of DM 5,750,000.00. This limitation is not 
               applicable in case of liability arising from defects of title 
               ("Rechtsmangel") of the shares in any of the NBG Companies.

                                   ARTICLE 8
                            NON-COMPETE UNDERTAKING


Except for the present activities (i. e. educational software development) in
the present extent of and in connection with Caps Software Design AG i.G., until
November 26, 1999, NBG-Shareholders shall neither directly nor indirectly
develop, market, sell, purchase or otherwise deal with any such products or
services or become direct or indirect shareholders of 




<PAGE>
                                       


companies that compete with any of the NBG Companies in their present 
business (i.e. marketing, sale and distribution of entertainment, educational 
and "edutainment" software products) in their present markets (i. e. Germany, 
Austria and German-speaking parts of Switzerland). Within this purview and 
until November 26, 1999, NBG-Shareholders shall not solicit any employees or 
customers of any of the NBG Companies without the prior written consent of 
Kappaphoenicis Beteiligungs GmbH. 

                                   ARTICLE 9
                         GUARANTEE BY ACTIVISION, INC.


Activision, Inc. guarantees Kappaphoenicis Beteiligungs GmbH's obligations to 
deliver Activision Shares under this Agreement.

Presently Kappaphoenicis Beteiligungs GmbH is a wholly owned indirect 
subsidiary of Activision, Inc.

                                   ARTICLE 10
                            MISCELLANEOUS PROVISIONS


10.1   The NBG-Shareholders hereby irrevocably, unconditionally and without 
       time limit guarantee by way of independent guarantee ("selbstandiges 
       Garantieversprechen") the timely and complete fulfillment of all 
       obligations of the NBG-Shareholders entered into or resulting from this
       Agreement.

10.2   Further Assistance

       Each party agrees to make all reasonable efforts to cooperate with the 
       other in post-closing matters that may arise in regard to taxes and 
       the like. NBG-Shareholders shall use their best efforts to assist and 
       to cause the NBG Companies' independent tax advisors to assist 
       Activision, Inc. in preparation of such audit and Financial Statements 
       for each of the NBG Companies as are necessary to enable 



<PAGE>
                                       


       Activision, Inc. to comply with the accounting and/or reporting 
       requirements promulgated under the Securities Act and Securities and 
       Exchange Act of 1934, as amended, in the United States.

10.3   Notices

       All notices made pursuant to this Agreement shall be valid only if 
       made by a person authorized to receive notices as per below by 
       Kappaphoenicis Beteiligungs GmbH or the NBG-Shareholders, as the case 
       may be, and sent by registered mail, return receipt requested or 
       facsimile, to the parties at the addresses set forth below, or as set 
       forth in any notice of change of address given in writing in the 
       manner prescribed herein to all other parties.

       If to KappaphoenicisActivision GmbH 
       Beteiligungs GmbH and/or Auf der Haar 47,
       Activision, Inc.:     D-33332 Gutersloh,  
                             Germany   
                             Fax: +49 (5241) 48 08 48



<PAGE>
                                       


      with a required copy to: 1. Activision, Inc. 
                                  3100 Ocean Park Boulevard  
                                  Santa Monica, CA 90405 U.S.A  
                                  Fax: +1 (310) 255-2152     

                               2. Robinson Silverman Pearce  
                                  Aronsohn & Berman LLP 
                                  attn.: Kenneth L. Henderson, Esq.
                                  1290 Avenue of the Americas,   
                                  New York, N.Y. 10104, USA  
                                  Fax: +1 (212) 541-4630
  

      If to Activision, Inc.:  Activision, Inc.    
                               attn.: Senior Vice President,
                                      Business Affairs and   
                                      Legal Counsel     
                               3100 Ocean Park Boulevard     
                               Santa Monica, CA 90405, U.S.A.
                               Fax: +1 (310) 255-2152




<PAGE>
                                       


      with a required copy to: Robinson Silverman Pearce 
                               Aronsohn & Berman LLP    
                               attn.: Kenneth L.  Henderson, Esq.   
                               1290 Avenue of the Americas,  
                               New York, N.Y. 10104, USA     
                               Fax: +1 (212) 541-4630


      If to Detlef Erhardt:    Fasanenweg 3,  
                               D - 93133 Burglengenfeld, Germany  
                               Fax: +49 (9471) 70 17 77


      If to Ingrid Herrmann:   Fasanenweg 3, 
                               D - 93133 Burglengenfeld, Germany  
                               Fax: +49 (9471) 70 17 66


10.4   Choice of Law, Venue

       This Agreement shall be governed by and construed in accordance with 
       the substantive laws of Germany. The exclusive legal venue for all 
       disputes in connection with this Agreement is Munich, Germany.

10.5   Assignment

       This Agreement may not be assigned by any party without the prior 
       written consent of the other party.

10.6   Waiver

       No waiver of any term, provision or condition of this Agreement, 
       whether by conduct or otherwise, in any one or more instances, shall 
       be deemed to be or be construed as a further or continuing waiver of 
       any such term, provision or 



<PAGE>
                                       


       condition or as a waiver of any other terms, provisions or conditions 
       of this Agreement.

10.7   Severability

       The invalidity or unenforceability of any provision of this Agreement 
       in any jurisdiction shall not invalidate or render unenforceable any 
       other provision herein. Any invalid or unenforceable provision shall 
       be replaced by such reasonable provision as comes closest to what the 
       parties wanted or would have wanted to apply in accordance with the 
       meaning and purpose of this Agreement if they had considered such 
       invalidity or unenforceability when entering into this transaction. 
       The same shall apply correspondingly to the filling of any gaps.

10.8   Announcement

       Activision, Inc., Kappaphoenicis Beteiligungs GmbH and 
       NBG-Shareholders shall cooperate in the preparation of any 
       announcements regarding the transaction contemplated by this 
       Agreement. Except as required by applicable law (in which case such 
       announcing party shall prior thereto advise the other party), no party 
       shall issue any announcement regarding the transactions contemplated 
       hereby without the prior written consent of the other party, which 
       consent shall not be unreasonably withheld.

10.9   Entire Agreement

       This Agreement (including all attachments, i. e. Exhibits and 
       Schedules) constitutes the entire understanding between the parties 
       with respect to the subject matter hereof, supersede all negotiations, 
       prior discussions and preliminary agreements. Neither party gives any 
       warranty or accepts any liability in addition to those expressed in 
       this Agreement. Amendments and additions to this Agreement are 
       required to be in written form, to the extent no notarial form 
       is prescribed by statute. The requirement for 


<PAGE>
                                       

written form can be lifted only by written agreement for the parties. The 
headings of this Agreement are not a part of this Agreement but are for 
convenience purposes only.

10.10  Attachments

       All Exhibits and Schedules are essential parts of this document. They 
       are referred to.

10.11  Costs

       Each party to this Agreement shall bear the costs for its legal 
       counsel, accounting and all other expenses incurred in connection with 
       this Agreement. Kappaphoenicis Beteiligungs GmbH shall bear the costs 
       of notarization of this Agreement.

10.12  Copies

       Each party shall receive certified copies (1 beglaubigte Abschrift, 1 
       Ausfertigung) of this deed. One certified copy shall be sent to 
       Finanzamt - Korperschaftsteuerstelle -.

This document was read aloud including the schedules and exhibits by the 
notary. Approved by the parties present and signed by them and the notary.